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Accordingly, the Manager has registered","page_number":27,"box":{"x":116,"y":672,"width":766,"height":12}},{"id":"5a156b2c-f97e-4653-8aca-905eba678bca","block_type":"box","text":"as a “commodity pool operator” and is subject to CFTC regulation in respect of the Fund.","page_number":27,"box":{"x":116,"y":688,"width":623,"height":11}},{"id":"a2581203-75a6-4848-89c3-f005b17b4add","block_type":"box","text":"Investments in the Subsidiary.","page_number":27,"box":{"x":117,"y":715,"width":226,"height":11}},{"id":"948a190c-e39f-4f2a-af1d-5f1646b11613","block_type":"box","text":"Investments in iShares Cayman Enhanced Roll Yield Index Fund, Ltd., a","page_number":27,"box":{"x":351,"y":715,"width":523,"height":12}},{"id":"b80cbd25-aad9-4b08-ba60-9564b5064db7","block_type":"box","text":"wholly owned subsidiary of the Fund formed in the Cayman Islands (the “Subsidiary”), are expected to","page_number":27,"box":{"x":116,"y":731,"width":749,"height":11}},{"id":"51aefde4-3bc3-40a4-8cfb-8f7ec6da1b45","block_type":"box","text":"provide the Fund with exposure to the commodity markets within the limitations of Subchapter M of the","page_number":27,"box":{"x":117,"y":746,"width":758,"height":12}},{"id":"7a524f0b-62d8-4c31-8e1c-6489c1f8f67e","block_type":"box","text":"Internal Revenue Code of 1986, as amended (the “Code”) and Internal Revenue Service (“IRS”)","page_number":27,"box":{"x":117,"y":762,"width":703,"height":11}},{"id":"8de4746e-07aa-4e59-9b11-12a6f9a6b87e","block_type":"box","text":"revenue rulings, as discussed below. In general, in order to comply with diversification requirements","page_number":27,"box":{"x":117,"y":777,"width":734,"height":12}},{"id":"aa6eb90f-4882-42f7-ab2d-4a21e1a84795","block_type":"box","text":"under Subchapter M of the Code, the Fund may not invest more than 25% of the value of its assets in","page_number":27,"box":{"x":117,"y":793,"width":748,"height":11}},{"id":"81b2c10b-a60d-4093-b634-9bccd2a56585","block_type":"box","text":"the securities of one or more Subsidiaries that are engaged in the same or similar or related trades or","page_number":27,"box":{"x":116,"y":808,"width":753,"height":12}},{"id":"0c636d5b-db29-429f-ba36-5b350a987c61","block_type":"box","text":"businesses. The Subsidiary is advised by the Manager. The Subsidiary (unlike the Fund) may invest","page_number":27,"box":{"x":117,"y":824,"width":729,"height":11}},{"id":"09f1fe0f-da4c-43e4-9fe4-f8740d87a820","block_type":"box","text":"without limitation in commodity-related instruments. However, the Subsidiary is otherwise subject to the","page_number":27,"box":{"x":116,"y":839,"width":769,"height":12}},{"id":"9bc6dc60-2dca-432d-a6d9-3cc049100ef8","block_type":"box","text":"same fundamental, non-fundamental and certain other investment restrictions as the Fund, including","page_number":27,"box":{"x":116,"y":855,"width":747,"height":11}},{"id":"9e7f4448-5501-4c8d-b2a1-a9b40cd10b18","block_type":"box","text":"the timing and method of the valuation of the Subsidiary’s portfolio investments and shares of the","page_number":27,"box":{"x":116,"y":870,"width":729,"height":12}},{"id":"eefebacb-f241-4c5a-b469-c782a8331660","block_type":"box","text":"I-5","page_number":27,"box":{"x":492,"y":917,"width":16,"height":9}},{"id":"71616570-5037-40e7-a6d0-96bb627ba226","block_type":"box","text":"NM1026U-6033243-27/221","page_number":27,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"a4c7d165-f212-46f5-bbd3-4f20f37e1f94","block_type":"box","text":"Subsidiary. The Subsidiary is managed pursuant to compliance policies and procedures that are the","page_number":28,"box":{"x":116,"y":80,"width":739,"height":11}},{"id":"94665b60-cb38-44e6-8598-ae14928ea06c","block_type":"box","text":"same, in all material respects, as the policies and procedures adopted by the Fund. The Subsidiary is a","page_number":28,"box":{"x":116,"y":95,"width":767,"height":11}},{"id":"97ae810a-0742-4d6f-87ea-da46104c60d6","block_type":"box","text":"company organized under the laws of the Cayman Islands, and is overseen by its own board of","page_number":28,"box":{"x":116,"y":111,"width":701,"height":11}},{"id":"92d8f5bf-b00b-4e30-ad02-9bb9dfb094f7","block_type":"box","text":"directors, which is comprised of John M. Perlowski, a Director, President and Chief Executive Officer of","page_number":28,"box":{"x":116,"y":126,"width":759,"height":11}},{"id":"1c4797ff-5228-4e45-9ad1-385ccd464378","block_type":"box","text":"the Fund, and Trent Walker, Chief Financial Officer of the Fund. The Fund is the sole shareholder of the","page_number":28,"box":{"x":116,"y":142,"width":762,"height":10}},{"id":"ab50e675-76b5-45f7-8094-d365d93b5e43","block_type":"box","text":"Subsidiary, and shares of the Subsidiary will not be sold or offered to other investors.","page_number":28,"box":{"x":116,"y":157,"width":635,"height":11}},{"id":"f46f53f2-d039-4b60-ada1-2e681bbc15ac","block_type":"box","text":"The Subsidiary invests primarily in commodity-related instruments. Although the Fund may enter into","page_number":28,"box":{"x":116,"y":180,"width":741,"height":12}},{"id":"e981fab3-9d8c-4b53-9472-0da81194735b","block_type":"box","text":"these commodity-related instruments directly, the Fund will likely gain exposure to these commodity","page_number":28,"box":{"x":116,"y":196,"width":737,"height":11}},{"id":"47c801df-fb43-48d3-b07c-72e5e9f3226f","block_type":"box","text":"related instruments indirectly by investing in the Subsidiary. To the extent that BFA believes that these","page_number":28,"box":{"x":117,"y":211,"width":758,"height":12}},{"id":"133ebcfd-487b-4d19-94f1-a7f74755f68b","block_type":"box","text":"commodity-related instruments provide suitable exposure to the commodities market, the Fund’s","page_number":28,"box":{"x":116,"y":227,"width":718,"height":11}},{"id":"1b7f5578-554d-4980-b783-4746242e9538","block_type":"box","text":"investment in the Subsidiary will likely increase. The Subsidiary may also hold cash and invest in other","page_number":28,"box":{"x":117,"y":242,"width":758,"height":12}},{"id":"ed4814bd-5708-42a2-80b5-f818484bfb2f","block_type":"box","text":"instruments, including fixed income securities, either as investments or to serve as margin or collateral","page_number":28,"box":{"x":117,"y":258,"width":765,"height":11}},{"id":"51da15eb-049d-4605-b97e-c75eb760fcbb","block_type":"box","text":"for the Subsidiary’s derivative positions.","page_number":28,"box":{"x":116,"y":273,"width":300,"height":12}},{"id":"2f1a24d4-89f2-4eea-8129-75a6fd526aa7","block_type":"box","text":"The Manager manages the assets of the Subsidiary pursuant to an Investment Advisory Agreement between","page_number":28,"box":{"x":116,"y":297,"width":767,"height":11}},{"id":"50b12989-c6d5-497d-bac1-5dbcce2278df","block_type":"box","text":"BFA and the Subsidiary, but receives no additional compensation for doing so. The Manager has entered into","page_number":28,"box":{"x":117,"y":312,"width":771,"height":12}},{"id":"0f33b293-812b-4c86-a000-dc70b9d3f7e5","block_type":"box","text":"a sub-advisory agreement with BlackRock International Limited with respect to the Subsidiary. BFA also","page_number":28,"box":{"x":116,"y":328,"width":729,"height":11}},{"id":"12c25efa-0ece-448e-8232-b0fd44d259a0","block_type":"box","text":"provides certain administrative services for the Subsidiary, but receives no additional compensation for doing","page_number":28,"box":{"x":117,"y":343,"width":771,"height":12}},{"id":"b4c106cd-da7f-4905-bc35-4a7795cee944","block_type":"box","text":"so. The Subsidiary will also enter into separate contracts for the provision of custody and accounting agent","page_number":28,"box":{"x":116,"y":359,"width":756,"height":11}},{"id":"2df83c75-46bb-4706-b590-2bfd09937a0d","block_type":"box","text":"services with the same or with affiliates of the same service providers that provide those services to the","page_number":28,"box":{"x":116,"y":374,"width":737,"height":11}},{"id":"906614b3-2bc4-4fa4-a08e-b48cf2e6409d","block_type":"box","text":"Fund.","page_number":28,"box":{"x":117,"y":390,"width":42,"height":9}},{"id":"89ef64d1-0cd4-4916-bcd1-6e854ee3b404","block_type":"box","text":"The financial statements of the Subsidiary are consolidated with the Fund’s financial statements in the","page_number":28,"box":{"x":116,"y":413,"width":729,"height":11}},{"id":"70bdb613-14cc-450b-92d7-46ad0b6d901a","block_type":"box","text":"Fund’s Annual and Semi-Annual Financial Statements and Additional Information. The Fund’s Annual and","page_number":28,"box":{"x":117,"y":428,"width":739,"height":10}},{"id":"eae3d87a-2358-409f-8b3a-08f387b6bada","block_type":"box","text":"Semi-Annual Financial Statements and Additional Information may be obtained at no charge by telephoning","page_number":28,"box":{"x":116,"y":444,"width":756,"height":11}},{"id":"5dc34296-e3b1-4a86-a438-8ffc89910cbc","block_type":"box","text":"the Distributor at the telephone number appearing on the front page of this SAI.","page_number":28,"box":{"x":116,"y":459,"width":565,"height":12}},{"id":"4ee7628a-90d4-4103-ba7c-12c9817bdd6b","block_type":"box","text":"The Subsidiary is not registered under the Investment Company Act, and, unless otherwise noted in the","page_number":28,"box":{"x":116,"y":483,"width":732,"height":11}},{"id":"48e06363-6601-4fd9-ba6a-cbfc73f84137","block_type":"box","text":"Fund’s Prospectus or this SAI, is not subject to all the investor protections of the Investment Company Act.","page_number":28,"box":{"x":117,"y":498,"width":756,"height":12}},{"id":"4e8990d6-ef38-443a-9836-b3650cf36a4d","block_type":"box","text":"However, the Fund wholly owns and controls the Subsidiary, and the Fund and the Subsidiary are both","page_number":28,"box":{"x":117,"y":514,"width":720,"height":11}},{"id":"531badca-dfd6-4625-9575-cb20c004477d","block_type":"box","text":"managed by BFA, making it unlikely that the Subsidiary will take action contrary to the interests of the Fund","page_number":28,"box":{"x":117,"y":529,"width":755,"height":12}},{"id":"b1556327-82ac-41ec-b41c-80e103ceb6d3","block_type":"box","text":"and its shareholders. The Fund’s Board has oversight responsibility for the investment activities of the Fund,","page_number":28,"box":{"x":116,"y":545,"width":767,"height":11}},{"id":"299add0d-1121-42a4-a384-5c1cbfdc8bb5","block_type":"box","text":"including its investment in the Subsidiary, and the Fund’s role as sole shareholder of the Subsidiary. Except","page_number":28,"box":{"x":117,"y":560,"width":761,"height":12}},{"id":"cd9efb5e-2438-4cf6-9425-dec719507717","block_type":"box","text":"as noted above, the Subsidiary will be subject to the same investment restrictions and limitations, and","page_number":28,"box":{"x":116,"y":576,"width":727,"height":11}},{"id":"25336a53-72f1-4e05-b4d0-dd666efb7c95","block_type":"box","text":"follow the same compliance policies and procedures, as the Fund. In addition, changes in the laws of the","page_number":28,"box":{"x":116,"y":591,"width":745,"height":12}},{"id":"6211eb1e-0649-4c95-9f85-2cd22833e2a4","block_type":"box","text":"United States and/or the Cayman Islands could result in the inability of the Fund and/or the Subsidiary to","page_number":28,"box":{"x":117,"y":607,"width":747,"height":11}},{"id":"2c95e7b8-f4e0-4df6-8acc-b42e10331b51","block_type":"box","text":"operate as described in the Fund’s Prospectus and this SAI and could adversely affect the Fund. For","page_number":28,"box":{"x":116,"y":622,"width":709,"height":12}},{"id":"35c80a50-0916-4da0-bab6-86d9f1e8d286","block_type":"box","text":"example, the Cayman Islands does not currently impose any income, corporate or capital gains tax, estate","page_number":28,"box":{"x":116,"y":638,"width":753,"height":11}},{"id":"46793b05-ae38-4a62-b575-64ba84ef6614","block_type":"box","text":"duty, inheritance tax, gift tax or withholding tax on the Subsidiary. If Cayman Islands law changes such that","page_number":28,"box":{"x":116,"y":653,"width":756,"height":12}},{"id":"1be4ea39-3a61-4686-8a03-39d1044d7bfc","block_type":"box","text":"the Subsidiary must pay Cayman Islands taxes, the Fund shareholders would likely suffer decreased","page_number":28,"box":{"x":116,"y":669,"width":704,"height":11}},{"id":"5dccbe9d-0d17-4bfd-953f-8e109df00966","block_type":"box","text":"investment returns.","page_number":28,"box":{"x":117,"y":684,"width":135,"height":9}},{"id":"ba492114-f830-48c0-bc5d-7c7c8cdad1f5","block_type":"box","text":"II. Investment Restrictions","page_number":28,"box":{"x":117,"y":713,"width":247,"height":9}},{"id":"6fa1360a-39ef-4ff7-9a72-f581dedd1cf7","block_type":"box","text":"The Fund has adopted restrictions and policies relating to the investment of the Fund’s assets and its","page_number":28,"box":{"x":116,"y":739,"width":699,"height":11}},{"id":"6140253f-df0d-45a5-ac15-685fd1894192","block_type":"box","text":"activities. Certain of the restrictions are fundamental policies of the Fund and may not be changed without the","page_number":28,"box":{"x":116,"y":754,"width":755,"height":12}},{"id":"517b2e8b-9e64-4941-ad42-86e6530e2d77","block_type":"box","text":"approval of the holders of a majority of the Fund’s outstanding voting securities (which for this purpose and","page_number":28,"box":{"x":116,"y":770,"width":734,"height":11}},{"id":"6389bda0-1f70-4097-980d-fbe65ad689a3","block_type":"box","text":"under the Investment Company Act means the lesser of (i) 67% of the shares represented at a meeting at","page_number":28,"box":{"x":117,"y":785,"width":728,"height":12}},{"id":"95539fe0-44dc-4e33-be1c-ec67e092cf62","block_type":"box","text":"which more than 50% of the outstanding shares are represented or (ii) more than 50% of the outstanding","page_number":28,"box":{"x":116,"y":801,"width":723,"height":11}},{"id":"5706a52e-8421-4158-bfa2-2c131a5fbb73","block_type":"box","text":"shares).","page_number":28,"box":{"x":116,"y":816,"width":55,"height":11}},{"id":"c9b0286a-dd3d-45e2-9dff-520bb43e4108","block_type":"box","text":"I-6","page_number":28,"box":{"x":492,"y":917,"width":16,"height":9}},{"id":"c3d2837e-7403-4b5d-a383-998696e277e9","block_type":"box","text":"NM1026U-6033243-28/221","page_number":28,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"082cbe40-5269-4253-be14-c7deef41c340","block_type":"box","text":"Under these fundamental investment restrictions, the Fund may not:","page_number":29,"box":{"x":117,"y":80,"width":485,"height":11}},{"id":"4743bc0b-86b5-4d1f-b245-6c297fac26ce","block_type":"box","text":"1. Concentrate its investments in a particular industry, as that term is used in the Investment Company Act,","page_number":29,"box":{"x":117,"y":103,"width":763,"height":11}},{"id":"59b53b84-aa9d-4227-a09b-e5d556fff029","block_type":"box","text":"except that the Fund will concentrate to approximately the same extent that its respective underlying index","page_number":29,"box":{"x":116,"y":119,"width":752,"height":11}},{"id":"67185b76-5a00-4c14-bd92-b469c780707e","block_type":"box","text":"concentrates in the securities of a particular industry or group of industries.","page_number":29,"box":{"x":116,"y":134,"width":535,"height":11}},{"id":"527c7edd-fdae-49c6-a86d-de9ab834616e","block_type":"box","text":"2. Borrow money, except as permitted under the Investment Company Act.","page_number":29,"box":{"x":117,"y":157,"width":528,"height":11}},{"id":"82acaf4e-068c-49d9-a197-29efbf110f6f","block_type":"box","text":"3. Issue senior securities to the extent such issuance would violate the Investment Company Act.","page_number":29,"box":{"x":116,"y":180,"width":691,"height":12}},{"id":"1e31355e-4448-424c-8388-8d80ad831241","block_type":"box","text":"4. Purchase or hold real estate, except the Fund may purchase and hold securities or other instruments that","page_number":29,"box":{"x":116,"y":204,"width":767,"height":11}},{"id":"60699118-f218-4fa7-bf5f-12c3c81d1923","block_type":"box","text":"are secured by, or linked to, real estate or interests therein, securities of real estate investment trusts","page_number":29,"box":{"x":116,"y":219,"width":725,"height":12}},{"id":"228e0311-420e-4dd9-8e76-96ad3966095d","block_type":"box","text":"(“REITs”), mortgage-related securities and securities of issuers engaged in the real estate business, and the","page_number":29,"box":{"x":117,"y":235,"width":768,"height":11}},{"id":"6cfa0c9a-54ce-4720-abf1-ebdc355a8c38","block_type":"box","text":"Fund may purchase and hold real estate as a result of the ownership of securities or other instruments.","page_number":29,"box":{"x":117,"y":250,"width":733,"height":12}},{"id":"f8c8fe10-0735-4a48-98bd-6c43f2dc6890","block_type":"box","text":"5. Underwrite securities issued by others, except to the extent that the sale of portfolio securities by the","page_number":29,"box":{"x":116,"y":273,"width":737,"height":12}},{"id":"7f7fbfa0-fa52-43cc-aefd-eff78c7563ff","block_type":"box","text":"Fund may be deemed to be an underwriting or as otherwise permitted by applicable law.","page_number":29,"box":{"x":117,"y":289,"width":623,"height":11}},{"id":"77fe34c7-ec42-41ca-9e2e-1233ed246eb1","block_type":"box","text":"6. Purchase or sell commodities or commodity contracts, except as permitted by the Investment Company","page_number":29,"box":{"x":116,"y":312,"width":752,"height":12}},{"id":"b33754ae-8b0a-4fd3-bb33-2eb4bc68f6b0","block_type":"box","text":"Act.","page_number":29,"box":{"x":116,"y":328,"width":31,"height":9}},{"id":"a78abce7-5142-4bfd-8739-19a04522000e","block_type":"box","text":"7. Make loans to the extent prohibited by the Investment Company Act.","page_number":29,"box":{"x":117,"y":351,"width":505,"height":11}},{"id":"a43ad1ca-ce74-4912-83e5-35d8798d8fb5","block_type":"box","text":"Notations Regarding the Fund’s Fundamental Investment Restrictions","page_number":29,"box":{"x":117,"y":380,"width":515,"height":11}},{"id":"80cf38f0-87f1-4932-9b4e-8d190e246a88","block_type":"box","text":"The following notations are not considered to be part of the Fund’s fundamental investment restrictions and","page_number":29,"box":{"x":116,"y":405,"width":763,"height":12}},{"id":"0978c28d-bbd0-4380-ad7e-fa563629421a","block_type":"box","text":"are subject to change without shareholder approval.","page_number":29,"box":{"x":116,"y":421,"width":370,"height":11}},{"id":"d6afc178-02e1-410d-b5e2-f25e59d5dc99","block_type":"box","text":"With respect to the fundamental policy relating to concentration set forth in (1) above, the Investment","page_number":29,"box":{"x":116,"y":444,"width":718,"height":11}},{"id":"48de28bf-f44a-4d2b-88cd-4e7cb313187b","block_type":"box","text":"Company Act does not define what constitutes “concentration” in an industry. The Commission staff has","page_number":29,"box":{"x":116,"y":459,"width":741,"height":12}},{"id":"381a1b54-df86-4354-931b-cde188ade3b5","block_type":"box","text":"taken the position that investment of 25% or more of a fund’s total assets in one or more issuers","page_number":29,"box":{"x":116,"y":475,"width":693,"height":11}},{"id":"e8de3c28-a260-4c8e-bfb4-e1ba3a7e4ae0","block_type":"box","text":"conducting their principal activities in the same industry or group of industries constitutes concentration. It is","page_number":29,"box":{"x":116,"y":490,"width":769,"height":12}},{"id":"3ca36cb1-728a-4def-9caa-d943172b9a84","block_type":"box","text":"possible that interpretations of concentration could change in the future. The policy in (1) above will be","page_number":29,"box":{"x":117,"y":506,"width":725,"height":11}},{"id":"795c0917-f679-4ce6-b093-d3a11a0aac4a","block_type":"box","text":"interpreted to refer to concentration as that term may be interpreted from time to time. The policy also will","page_number":29,"box":{"x":117,"y":522,"width":750,"height":11}},{"id":"8fe7be43-825d-44d3-a08e-9ad01220d7fc","block_type":"box","text":"be interpreted to permit investment without limit in the following: securities of the U.S. Government and its","page_number":29,"box":{"x":117,"y":537,"width":754,"height":11}},{"id":"a6f63a9d-60cc-4ae6-b6d5-02f7fff796b3","block_type":"box","text":"agencies or instrumentalities; securities of state, territory, possession or municipal governments and their","page_number":29,"box":{"x":116,"y":553,"width":752,"height":11}},{"id":"b554d1ae-89f2-46c0-8fbc-bb0705f2d2b4","block_type":"box","text":"authorities, agencies, instrumentalities or political subdivisions; and repurchase agreements collateralized","page_number":29,"box":{"x":116,"y":568,"width":753,"height":11}},{"id":"a1d818d2-ffb6-4e4c-a937-0d8edc7b3ddd","block_type":"box","text":"by any such obligations. Accordingly, issuers of the foregoing securities will not be considered to be","page_number":29,"box":{"x":117,"y":584,"width":703,"height":11}},{"id":"fbfc2500-712f-4050-9bf9-47fe3e461920","block_type":"box","text":"members of any industry. There also will be no limit on investment in issuers domiciled in a single","page_number":29,"box":{"x":117,"y":599,"width":693,"height":11}},{"id":"6d87403f-9943-4cfa-b547-831158d70f43","block_type":"box","text":"jurisdiction or country. Finance companies will be considered to be in the industries of their parents if their","page_number":29,"box":{"x":114,"y":615,"width":754,"height":11}},{"id":"fab5bd85-4afb-47c3-9d15-703d11092435","block_type":"box","text":"activities are primarily related to financing the activities of the parents. Each foreign government will be","page_number":29,"box":{"x":116,"y":630,"width":727,"height":12}},{"id":"19e14241-718a-472b-81de-175277eaed25","block_type":"box","text":"considered to be a member of a separate industry. With respect to the Fund’s industry classifications, the","page_number":29,"box":{"x":116,"y":646,"width":750,"height":11}},{"id":"1b1bc127-db55-4199-8de4-970f9029d8a1","block_type":"box","text":"Fund currently utilizes any one or more of the industry sub-classifications used by one or more widely","page_number":29,"box":{"x":117,"y":661,"width":707,"height":11}},{"id":"6ced454a-7d95-4b17-928e-e9f767375be8","block_type":"box","text":"recognized market indexes or rating group indexes, and/or as defined by Fund management. The policy also","page_number":29,"box":{"x":117,"y":677,"width":758,"height":11}},{"id":"e3e3fc07-43a0-4ce5-8dd3-c7cc815db805","block_type":"box","text":"will be interpreted to give broad authority to the Fund as to how to classify issuers within or among","page_number":29,"box":{"x":116,"y":692,"width":692,"height":12}},{"id":"c6fbd02c-d7f0-4fdb-b56c-805a1f09ffa7","block_type":"box","text":"industries.","page_number":29,"box":{"x":117,"y":708,"width":72,"height":9}},{"id":"75fc3769-3c2e-4706-860b-6cf20fb6bbae","block_type":"box","text":"With respect to the fundamental policy relating to borrowing money set forth in (2) above, the Investment","page_number":29,"box":{"x":116,"y":731,"width":736,"height":11}},{"id":"5485eafe-bec8-4e08-9f7a-841720664cf3","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":29,"box":{"x":116,"y":746,"width":731,"height":12}},{"id":"76edda83-0748-46c2-b809-d8cf842d165a","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":29,"box":{"x":116,"y":762,"width":752,"height":11}},{"id":"72abdde8-1049-483f-9ae8-cae0f52d470e","block_type":"box","text":"for temporary purposes. (The Fund’s total assets include the amounts being borrowed.) To limit the risks","page_number":29,"box":{"x":116,"y":777,"width":735,"height":12}},{"id":"33e0481b-f48e-4315-b55e-ed116903f96f","block_type":"box","text":"attendant to borrowing, the Investment Company Act requires the Fund to maintain at all times an “asset","page_number":29,"box":{"x":116,"y":793,"width":739,"height":11}},{"id":"f6378c90-7cc9-45dc-b95a-219491796881","block_type":"box","text":"coverage” of at least 300% of the amount of its borrowings. Asset coverage means the ratio that the value","page_number":29,"box":{"x":116,"y":808,"width":750,"height":12}},{"id":"61c8287e-8a9f-41e8-ac21-fcda92649a88","block_type":"box","text":"of the Fund’s total assets (including amounts borrowed), minus liabilities other than borrowings, bears to the","page_number":29,"box":{"x":116,"y":824,"width":765,"height":11}},{"id":"38e3bffe-982d-4583-9d42-13497e907e4a","block_type":"box","text":"aggregate amount of all borrowings. Borrowing money to increase portfolio holdings is known as","page_number":29,"box":{"x":116,"y":839,"width":679,"height":12}},{"id":"25cedd01-904d-4832-b4c0-21194c8bb9d3","block_type":"box","text":"“leveraging.” Certain trading practices and investments, such as reverse repurchase agreements, may be","page_number":29,"box":{"x":117,"y":855,"width":746,"height":11}},{"id":"695b3307-70c3-48f4-9d09-e8bc6895f5bc","block_type":"box","text":"considered to be borrowings or involve leverage and thus are subject to the Investment Company Act","page_number":29,"box":{"x":116,"y":870,"width":713,"height":12}},{"id":"c65c1bca-7355-4977-803c-645867b5b5b2","block_type":"box","text":"I-7","page_number":29,"box":{"x":492,"y":917,"width":15,"height":9}},{"id":"6edcd151-509b-4059-9323-4a6d63302add","block_type":"box","text":"NM1026U-6033243-29/221","page_number":29,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"b23fea61-f048-41f2-abd8-ab857be90b53","block_type":"box","text":"restrictions. In accordance with Rule 18f-4 under the Investment Company Act, when the Fund engages in","page_number":30,"box":{"x":117,"y":80,"width":747,"height":11}},{"id":"a1bfa0e9-3053-4e10-af9d-840dbb83b5a3","block_type":"box","text":"reverse repurchase agreements and similar financing transactions, the Fund may either (i) maintain asset","page_number":30,"box":{"x":117,"y":95,"width":746,"height":12}},{"id":"a2d9ab95-705c-43b8-9226-24f5e107449b","block_type":"box","text":"coverage of at least 300% with respect to such transactions and any other borrowings in the aggregate, or","page_number":30,"box":{"x":116,"y":111,"width":752,"height":11}},{"id":"fb4412f7-ed9b-440d-ac9d-1adfd69461e3","block_type":"box","text":"(ii) treat such transactions as “derivatives transactions” and comply with Rule 18f-4 with respect to such","page_number":30,"box":{"x":117,"y":126,"width":740,"height":11}},{"id":"a5ee0e62-5de5-41e1-aca6-b1c0ec16784c","block_type":"box","text":"transactions. Short-term credits necessary for the settlement of securities transactions and arrangements","page_number":30,"box":{"x":116,"y":142,"width":751,"height":11}},{"id":"d8145f56-df39-44c7-b5d0-78840cb69440","block_type":"box","text":"with respect to securities lending will not be considered to be borrowings under the policy. Practices and","page_number":30,"box":{"x":116,"y":157,"width":738,"height":12}},{"id":"0ef33bea-8cc4-4023-937e-36d2f5d1ca84","block_type":"box","text":"investments that may involve leverage but are not considered to be borrowings are not subject to the policy.","page_number":30,"box":{"x":117,"y":173,"width":762,"height":11}},{"id":"35b27887-125f-47c2-9236-c126828706b2","block_type":"box","text":"With respect to the fundamental policy relating to underwriting set forth in (5) above, the Investment","page_number":30,"box":{"x":116,"y":196,"width":707,"height":11}},{"id":"45e91741-6518-44e8-b2af-ece03b4bfd23","block_type":"box","text":"Company Act does not prohibit the Fund from engaging in the underwriting business or from underwriting the","page_number":30,"box":{"x":116,"y":211,"width":766,"height":12}},{"id":"64d72cea-7413-4db3-b866-79f0867560b8","block_type":"box","text":"securities of other issuers; in fact, in the case of diversified funds, the Investment Company Act permits a","page_number":30,"box":{"x":116,"y":227,"width":750,"height":11}},{"id":"eca4d74d-2e6a-4c00-a9bd-1c536534a5ca","block_type":"box","text":"fund to have underwriting commitments of up to 25% of its assets under certain circumstances. Those","page_number":30,"box":{"x":116,"y":242,"width":727,"height":12}},{"id":"983b4fc7-cc70-4ec9-9a35-f96efec790e1","block_type":"box","text":"circumstances currently are that the amount of the fund’s underwriting commitments, when added to the","page_number":30,"box":{"x":116,"y":258,"width":743,"height":11}},{"id":"6deb0451-8044-4372-9ee1-d7f09d07febe","block_type":"box","text":"value of the fund’s investments in issuers where the fund owns more than 10% of the outstanding voting","page_number":30,"box":{"x":116,"y":273,"width":743,"height":12}},{"id":"3a0cfe10-ff52-43da-bcae-fba62a5a5276","block_type":"box","text":"securities of those issuers, cannot exceed the 25% cap. A fund engaging in transactions involving the","page_number":30,"box":{"x":116,"y":289,"width":719,"height":11}},{"id":"44f8a08f-72e3-443d-bc25-6e55e7daab28","block_type":"box","text":"acquisition or disposition of portfolio securities may be considered to be an underwriter under the Securities","page_number":30,"box":{"x":116,"y":304,"width":765,"height":12}},{"id":"f5d9fab5-a28f-4418-a863-23dbebeff094","block_type":"box","text":"Act of 1933, as amended (the “Securities Act”). Although it is not believed that the application of the","page_number":30,"box":{"x":116,"y":320,"width":716,"height":11}},{"id":"9ec29939-7e91-4781-a0a2-1beb0bd0b5eb","block_type":"box","text":"Securities Act provisions described above would cause a fund to be engaged in the business of underwriting,","page_number":30,"box":{"x":116,"y":335,"width":771,"height":12}},{"id":"240d1d8e-c807-45a1-b763-1bd3c1b641ea","block_type":"box","text":"the policy in (5) above will be interpreted not to prevent a fund from engaging in transactions involving the","page_number":30,"box":{"x":116,"y":351,"width":746,"height":11}},{"id":"a1bbc426-931d-4fd3-8a19-f3946f064a8a","block_type":"box","text":"acquisition or disposition of portfolio securities, regardless of whether a fund may be considered to be an","page_number":30,"box":{"x":116,"y":366,"width":746,"height":12}},{"id":"6b38a1fa-15aa-483d-a54d-fdb51623f446","block_type":"box","text":"underwriter under the Securities Act or is otherwise engaged in the underwriting business to the extent","page_number":30,"box":{"x":117,"y":382,"width":725,"height":11}},{"id":"8a2a0b64-c432-4e55-a608-371eeaf607cc","block_type":"box","text":"permitted by applicable law.","page_number":30,"box":{"x":117,"y":398,"width":200,"height":11}},{"id":"8cf6b594-cfff-43b2-9f7b-49b796e876fd","block_type":"box","text":"With respect to the fundamental policy relating to lending set forth in (7) above, the Investment Company Act","page_number":30,"box":{"x":116,"y":421,"width":769,"height":11}},{"id":"4dde612b-0f3e-424a-a4f5-b93b493fb0ea","block_type":"box","text":"does not prohibit the fund from making loans (including lending its securities); however, Commission staff","page_number":30,"box":{"x":116,"y":436,"width":749,"height":12}},{"id":"1cc31f98-36cc-472a-a97e-2aa6e6f2672e","block_type":"box","text":"interpretations currently prohibit funds from lending more than one-third of their total assets (including","page_number":30,"box":{"x":117,"y":452,"width":720,"height":11}},{"id":"d9e28300-59f4-40c2-9a53-b9a4a39e3983","block_type":"box","text":"lending its securities), except through the purchase of debt obligations or the use of repurchase agreements.","page_number":30,"box":{"x":117,"y":467,"width":771,"height":12}},{"id":"9095aa49-44d8-4b73-aa6b-994edf45b892","block_type":"box","text":"In addition, collateral arrangements with respect to options, forward currency and futures transactions and","page_number":30,"box":{"x":117,"y":483,"width":752,"height":11}},{"id":"3255999f-0584-41fc-97f1-c0cd9d0a6ffb","block_type":"box","text":"other derivative instruments (as applicable), as well as delays in the settlement of securities transactions,","page_number":30,"box":{"x":116,"y":498,"width":752,"height":12}},{"id":"0b86ba7d-5008-466b-bc60-487d70de0e1b","block_type":"box","text":"will not be considered loans.","page_number":30,"box":{"x":116,"y":514,"width":206,"height":9}},{"id":"6d4ce919-f227-4d9c-8c4d-7f7fb5514552","block_type":"box","text":"Under its non-fundamental investment restrictions, which may be changed by the Board without shareholder","page_number":30,"box":{"x":117,"y":537,"width":762,"height":11}},{"id":"97483ffe-73f5-4370-91b4-adcf841b9257","block_type":"box","text":"approval, the Fund may not:","page_number":30,"box":{"x":116,"y":553,"width":201,"height":11}},{"id":"a4b5c41c-47de-4b85-a7c4-e20a3cbe2906","block_type":"box","text":"a. Purchase securities of other investment companies, except to the extent permitted by the Investment","page_number":30,"box":{"x":116,"y":576,"width":737,"height":11}},{"id":"2dbc9a89-2015-4c66-a802-54500c98d8fe","block_type":"box","text":"Company Act. As a matter of policy, however, the Fund will not purchase shares of any registered open-end","page_number":30,"box":{"x":116,"y":591,"width":756,"height":12}},{"id":"59a3f41c-602f-469c-8f4c-f36b18e477c0","block_type":"box","text":"investment company or registered unit investment trust, in reliance on Section 12(d)(1)(F) or (G) (the “fund of","page_number":30,"box":{"x":117,"y":607,"width":770,"height":11}},{"id":"63902720-c285-4fb5-97cb-4e77e4bd5611","block_type":"box","text":"funds” provisions) of the Investment Company Act, at any time the Fund has knowledge that its shares are","page_number":30,"box":{"x":116,"y":622,"width":755,"height":12}},{"id":"285e42f1-7d6c-4828-ac71-60a73dd1130b","block_type":"box","text":"purchased by another investment company investor in reliance on the provisions of subparagraph (G) of","page_number":30,"box":{"x":117,"y":638,"width":732,"height":11}},{"id":"9cc8a0cc-8f73-42b1-8140-9b5dfc0cb8e9","block_type":"box","text":"Section 12(d)(1).","page_number":30,"box":{"x":116,"y":653,"width":124,"height":11}},{"id":"4bc15677-04fb-43f2-b495-795b556cbf10","block_type":"box","text":"b. Make short sales of securities or maintain a short position, except to the extent permitted by the Fund’s","page_number":30,"box":{"x":117,"y":677,"width":750,"height":11}},{"id":"9cf13dfc-ad4f-4d19-bcc3-c7ce74274910","block_type":"box","text":"Prospectus and SAI, as amended from time to time, and applicable law.","page_number":30,"box":{"x":117,"y":692,"width":504,"height":11}},{"id":"09e966b6-aca4-4fda-b67b-579d6cc66e5e","block_type":"box","text":"Unless otherwise indicated, all limitations under the Fund’s fundamental or non-fundamental investment","page_number":30,"box":{"x":117,"y":715,"width":733,"height":11}},{"id":"9f467be3-e996-4ebf-ac44-3884e219aa1a","block_type":"box","text":"restrictions apply only at the time that a transaction is undertaken. Any change in the percentage of the","page_number":30,"box":{"x":117,"y":731,"width":725,"height":11}},{"id":"2ef6dbdd-53fe-4be1-8632-3fe3fccdbd48","block_type":"box","text":"Fund’s assets invested in certain securities or other instruments resulting from market fluctuations or other","page_number":30,"box":{"x":117,"y":746,"width":756,"height":12}},{"id":"42e0fe6d-2090-4e75-aad4-418486177e4d","block_type":"box","text":"changes in the Fund’s total assets will not require the Fund to dispose of an investment until the Manager","page_number":30,"box":{"x":116,"y":762,"width":748,"height":11}},{"id":"1d05c3d9-11d2-4f3c-9bd3-c204107379f9","block_type":"box","text":"determines that it is practicable to sell or close out the investment without undue market or tax","page_number":30,"box":{"x":116,"y":777,"width":671,"height":11}},{"id":"0dce88f6-265b-4e2c-9686-3ad0f291f2b2","block_type":"box","text":"consequences.","page_number":30,"box":{"x":116,"y":795,"width":106,"height":9}},{"id":"ec3a4f9a-8776-4527-974a-36b88958390e","block_type":"box","text":"The Subsidiary will follow the Fund’s fundamental and non-fundamental investment restrictions, described","page_number":30,"box":{"x":116,"y":816,"width":743,"height":11}},{"id":"d9f8f26f-6796-42b6-bf0d-45338e07eb4f","block_type":"box","text":"above, with respect to its investments.","page_number":30,"box":{"x":116,"y":832,"width":278,"height":11}},{"id":"03feaf24-c4c1-4ce6-9c9c-ef61c6814199","block_type":"box","text":"I-8","page_number":30,"box":{"x":492,"y":917,"width":16,"height":9}},{"id":"10fd3584-97f1-429e-a4f7-7cf9a1be0ebe","block_type":"box","text":"NM1026U-6033243-30/221","page_number":30,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"aa8104e1-7e13-4194-bcca-6e13c0fb5db9","block_type":"box","text":"III. Information on Trustees and Officers","page_number":31,"box":{"x":117,"y":80,"width":346,"height":9}},{"id":"694a80e4-7cd3-456f-ae90-a5f973b34723","block_type":"box","text":"The Board consists of thirteen individuals (each, a “Trustee”), eleven of whom are not “interested persons”","page_number":31,"box":{"x":116,"y":105,"width":761,"height":12}},{"id":"a9cfc967-2b69-445c-850d-0d5a85dc51e8","block_type":"box","text":"of the Trust as defined in the Investment Company Act (the “Independent Trustees”). The registered","page_number":31,"box":{"x":116,"y":121,"width":708,"height":11}},{"id":"61e5488a-0244-4292-93ca-9ec3cd0a5087","block_type":"box","text":"investment companies advised by the Manager or its affiliates (the “BlackRock-advised Funds”) are","page_number":31,"box":{"x":117,"y":136,"width":703,"height":12}},{"id":"07af1ff1-d4b0-4f6d-836b-4ecdb3ae19e0","block_type":"box","text":"organized into the BlackRock Multi-Asset Complex, the BlackRock Fixed-Income Complex, and the iShares","page_number":31,"box":{"x":116,"y":152,"width":748,"height":11}},{"id":"ce747cb3-7f04-410e-9db9-47a860edd51a","block_type":"box","text":"Complex (each, a “BlackRock Fund Complex”). The Trust is included in the BlackRock Fund Complex referred","page_number":31,"box":{"x":116,"y":167,"width":770,"height":12}},{"id":"d49021b5-688a-4183-aa5d-7e9ae3881105","block_type":"box","text":"to as the BlackRock Multi-Asset Complex. The Trustees also oversee as board members the operations of","page_number":31,"box":{"x":116,"y":183,"width":752,"height":11}},{"id":"e4bbff8d-de1c-42b6-a799-cc0cbf99aa38","block_type":"box","text":"the other open-end registered investment companies included in the BlackRock Multi-Asset Complex.","page_number":31,"box":{"x":116,"y":199,"width":715,"height":11}},{"id":"9360af7c-cd37-40af-a394-2c9e43b48f2d","block_type":"box","text":"The Board has overall responsibility for the oversight of the Trust and the Fund. The Chair of the Board is an","page_number":31,"box":{"x":116,"y":222,"width":763,"height":11}},{"id":"522733a2-9d73-4f7f-ba80-91f12da31caa","block_type":"box","text":"Independent Trustee, and the Chair of each Board committee (each, a “Committee”) is an Independent","page_number":31,"box":{"x":117,"y":237,"width":730,"height":11}},{"id":"cf8ce41a-2fcb-4b58-ac1e-3a4789e2f962","block_type":"box","text":"Trustee. The Board has five standing Committees: an Audit Committee, a Governance and Nominating","page_number":31,"box":{"x":116,"y":253,"width":724,"height":11}},{"id":"3ec88c38-2238-4a9e-aa00-af47e4e82924","block_type":"box","text":"Committee, a Compliance Committee, a Performance Oversight Committee and an Ad Hoc Topics","page_number":31,"box":{"x":116,"y":268,"width":691,"height":12}},{"id":"3940664f-9d13-44bf-8102-779fab70e9d0","block_type":"box","text":"Committee. The role of the Chair of the Board is to preside at all meetings of the Board and to act as a","page_number":31,"box":{"x":116,"y":284,"width":730,"height":11}},{"id":"ee54914c-abb4-4232-a3a9-9001880276e3","block_type":"box","text":"liaison with service providers, officers, attorneys and other Trustees generally between meetings. The Chair","page_number":31,"box":{"x":117,"y":299,"width":757,"height":12}},{"id":"bc094634-0d49-4d31-8398-ee31bf1a0ad5","block_type":"box","text":"of 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":315,"width":734,"height":11}},{"id":"703cdbe9-2bcc-42d0-96a2-3b9c17fda017","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":116,"y":330,"width":722,"height":12}},{"id":"746ef0f3-2df7-403a-8a63-9a3750529dc0","block_type":"box","text":"Committee from time to time. The Independent Trustees meet regularly outside the presence of Fund","page_number":31,"box":{"x":116,"y":346,"width":717,"height":11}},{"id":"57194f32-d45b-4aa5-9632-02fe062f6b26","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":361,"width":713,"height":12}},{"id":"7378d1f1-00f2-4c85-90b3-79a1f4afb963","block_type":"box","text":"meetings five times a year, and may hold special meetings if required before its next regular meeting. Each","page_number":31,"box":{"x":117,"y":377,"width":757,"height":11}},{"id":"23b49165-98aa-4f45-add7-48b4ce950e15","block_type":"box","text":"Committee meets regularly to conduct the oversight functions delegated to that Committee by the Board and","page_number":31,"box":{"x":116,"y":392,"width":769,"height":12}},{"id":"c42da2a3-f05a-46d1-9854-79b990496b61","block_type":"box","text":"reports its findings to the Board. The Board and each standing Committee conduct annual assessments of","page_number":31,"box":{"x":117,"y":408,"width":756,"height":11}},{"id":"b0fa2c14-164a-43b6-9153-a6b1369ebe8c","block_type":"box","text":"their oversight function and structure. The Board has determined that the Board’s leadership structure is","page_number":31,"box":{"x":116,"y":423,"width":741,"height":12}},{"id":"e53c339f-ac03-4b41-b7d1-1368aabefc8e","block_type":"box","text":"appropriate because it allows the Board to exercise independent judgment over management and to allocate","page_number":31,"box":{"x":116,"y":439,"width":770,"height":11}},{"id":"a6af9f4b-103f-4ee7-969d-a869eed72559","block_type":"box","text":"areas of responsibility among Committees and the full Board to enhance effective oversight.","page_number":31,"box":{"x":116,"y":454,"width":653,"height":12}},{"id":"b6769f5e-c4b0-43d5-b294-bd9bfcd52e18","block_type":"box","text":"The Board has engaged the Manager to manage the Fund on a day-to-day basis. The Board is responsible for","page_number":31,"box":{"x":116,"y":478,"width":771,"height":11}},{"id":"b8c61784-6948-4f7e-9540-728bf772a3a9","block_type":"box","text":"overseeing the Manager, other service providers, the operations of the Fund and associated risks in","page_number":31,"box":{"x":116,"y":493,"width":707,"height":12}},{"id":"13a7bd41-306c-4304-9b06-00b1e5629fea","block_type":"box","text":"accordance with the provisions of the Investment Company Act, state law, other applicable laws, the Trust’s","page_number":31,"box":{"x":116,"y":509,"width":764,"height":11}},{"id":"cdf9ff89-79b6-4260-902f-7f03e6047708","block_type":"box","text":"charter, and the Fund’s investment objective and strategies. The Board reviews, on an ongoing basis, the","page_number":31,"box":{"x":116,"y":524,"width":745,"height":12}},{"id":"1acacf57-f4ec-4a12-a34d-594a278cf615","block_type":"box","text":"Fund’s performance, operations and investment strategies and techniques. The Board also conducts reviews","page_number":31,"box":{"x":117,"y":540,"width":771,"height":11}},{"id":"ee713e90-4c05-44ae-9c01-f78b575ec7b3","block_type":"box","text":"of the Manager and its role in running the operations of the Fund.","page_number":31,"box":{"x":116,"y":555,"width":465,"height":12}},{"id":"8d98e3db-9166-46d3-9e4b-5090d0cbcd30","block_type":"box","text":"Day-to-day risk management with respect to the Fund is the responsibility of the Manager or of sub-advisers","page_number":31,"box":{"x":117,"y":578,"width":759,"height":12}},{"id":"6ba2f0b1-07cf-4448-b017-47a564e5a6ea","block_type":"box","text":"or other service providers (depending on the nature of the risk), subject to the supervision of the Manager.","page_number":31,"box":{"x":116,"y":594,"width":752,"height":11}},{"id":"98ce0f00-9813-4478-9ef4-2a5fa42ce4b4","block_type":"box","text":"The Fund is subject to a number of risks, including investment, compliance, operational and valuation risks,","page_number":31,"box":{"x":116,"y":609,"width":762,"height":12}},{"id":"547be879-00b1-49aa-bc45-e145c610844d","block_type":"box","text":"among others. While there are a number of risk management functions performed by the Manager and the","page_number":31,"box":{"x":116,"y":625,"width":754,"height":11}},{"id":"b7b48285-96f3-48b0-879a-10979eaa6206","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":640,"width":697,"height":12}},{"id":"5989a8c4-a1fc-47b5-93ab-c85d6e86a482","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":656,"width":708,"height":11}},{"id":"6784e243-89e7-478e-a8d8-0cbd595e8bad","block_type":"box","text":"addressed as part of various Board and Committee activities. The Board, directly or through a Committee,","page_number":31,"box":{"x":116,"y":671,"width":743,"height":12}},{"id":"6a9edd09-43e1-4fa4-ae97-805f494751de","block_type":"box","text":"also reviews reports from, among others, management, the independent registered public accounting firm","page_number":31,"box":{"x":116,"y":687,"width":744,"height":11}},{"id":"65696888-86c0-42cc-81a5-9e19b45e5998","block_type":"box","text":"for the Fund, sub-advisers and internal auditors for the investment adviser or its affiliates, as appropriate,","page_number":31,"box":{"x":116,"y":702,"width":741,"height":12}},{"id":"0fe573c1-4493-40ec-b0cf-769521efada8","block_type":"box","text":"regarding risks faced by the Fund and management’s or the service provider’s risk functions. The Committee","page_number":31,"box":{"x":117,"y":718,"width":763,"height":11}},{"id":"cc60bb87-8dbe-4c72-a4d7-97f906a18242","block_type":"box","text":"system facilitates the timely and efficient consideration of matters by the Trustees, and facilitates effective","page_number":31,"box":{"x":116,"y":733,"width":751,"height":12}},{"id":"a7940927-8a56-4efb-940b-ae83af50f742","block_type":"box","text":"oversight of compliance with legal and regulatory requirements and of the Fund’s activities and associated","page_number":31,"box":{"x":116,"y":749,"width":746,"height":11}},{"id":"05d13419-80bd-483e-b350-44f568ec3805","block_type":"box","text":"risks. The Board has appointed a Chief Compliance Officer, who oversees the implementation and testing of","page_number":31,"box":{"x":117,"y":764,"width":761,"height":12}},{"id":"c927927a-5a58-45f0-80c3-56bd9f74356d","block_type":"box","text":"the Trust’s compliance program and reports to the Board regarding compliance matters for the Fund and its","page_number":31,"box":{"x":116,"y":780,"width":756,"height":11}},{"id":"30e5c00d-fc7a-4003-8bf9-dcc6db1147c5","block_type":"box","text":"service providers. The Independent Trustees have engaged independent legal counsel to assist them in","page_number":31,"box":{"x":116,"y":796,"width":727,"height":11}},{"id":"80ca4ab7-3014-4f73-9020-fd364eec5088","block_type":"box","text":"performing their oversight responsibilities.","page_number":31,"box":{"x":117,"y":811,"width":293,"height":11}},{"id":"3b7a858e-ac3d-4f92-846e-5e71484afed8","block_type":"box","text":"Audit Committee.","page_number":31,"box":{"x":116,"y":834,"width":121,"height":9}},{"id":"08ddc98c-2860-4040-a126-93ca68203fd7","block_type":"box","text":"The members of the Audit Committee (the “Audit Committee”) are Henry R. Keizer (Chair),","page_number":31,"box":{"x":238,"y":834,"width":642,"height":11}},{"id":"1d6ee886-f106-4c48-b771-9ee750af07d8","block_type":"box","text":"Neil A. Cotty, Lori Richards, Kenneth L. Urish and Claire A. Walton, all of whom are Independent Trustees.","page_number":31,"box":{"x":117,"y":850,"width":746,"height":11}},{"id":"88aac50c-e982-40d7-9205-5822e4a15a7b","block_type":"box","text":"The principal responsibilities of the Audit Committee are to approve, and recommend to the full Board for","page_number":31,"box":{"x":116,"y":865,"width":743,"height":11}},{"id":"b97662a7-562a-4b67-8606-8c617a27dcc7","block_type":"box","text":"I-9","page_number":31,"box":{"x":492,"y":917,"width":16,"height":9}},{"id":"9ee8af3f-0ba5-4ba6-b35b-e915174be42f","block_type":"box","text":"NM1026U-6033243-31/221","page_number":31,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"a65a9b68-04f1-4090-b738-644dfbb31137","block_type":"box","text":"approval, the selection, retention, termination and compensation of the Fund’s independent registered public","page_number":32,"box":{"x":116,"y":80,"width":772,"height":11}},{"id":"7dd28450-636f-460b-aad5-e0917764a85d","block_type":"box","text":"accounting firm (the “Independent Registered Public Accounting Firm”) and to oversee the Independent","page_number":32,"box":{"x":116,"y":95,"width":729,"height":12}},{"id":"1f2eb522-c088-4878-8e07-256764533141","block_type":"box","text":"Registered Public Accounting Firm’s work. The Audit Committee’s responsibilities include, without limitation,","page_number":32,"box":{"x":117,"y":111,"width":762,"height":11}},{"id":"268fcdf2-1c93-440e-a176-4b89c357c733","block_type":"box","text":"to (1) evaluate the qualifications and independence of the Independent Registered Public Accounting Firm;","page_number":32,"box":{"x":116,"y":126,"width":752,"height":12}},{"id":"c3dae543-de7f-48bb-a54d-15e0a3460825","block_type":"box","text":"(2) approve all audit engagement terms and fees for the Fund; (3) review the conduct and results of each","page_number":32,"box":{"x":117,"y":142,"width":743,"height":11}},{"id":"593ab26f-5bf2-4df0-b6dd-246e7c886553","block_type":"box","text":"independent audit of the Fund’s annual financial statements; (4) review any issues raised by the","page_number":32,"box":{"x":117,"y":157,"width":682,"height":11}},{"id":"49e550dc-1b21-483e-b86a-63d8680b3134","block_type":"box","text":"Independent Registered Public Accounting Firm or Fund management regarding the accounting or financial","page_number":32,"box":{"x":117,"y":173,"width":748,"height":11}},{"id":"c7333b2c-4ce8-4b79-b6ce-ef97a1ea1125","block_type":"box","text":"reporting policies and practices of the Fund and the internal controls of the Fund and certain service","page_number":32,"box":{"x":117,"y":188,"width":706,"height":12}},{"id":"d3336790-733c-4495-a4b4-f6cd1a5f5619","block_type":"box","text":"providers; (5) oversee the performance of the Fund’s Independent Registered Public Accounting Firm;","page_number":32,"box":{"x":117,"y":204,"width":714,"height":11}},{"id":"7a48a568-9006-4d4b-b78b-e49d8496fd78","block_type":"box","text":"(6) review and discuss with management and the Fund’s Independent Registered Public Accounting Firm the","page_number":32,"box":{"x":117,"y":219,"width":764,"height":12}},{"id":"8fe635a5-ff58-431a-ae37-f17df162c3ba","block_type":"box","text":"performance and findings of the Fund’s internal auditors; (7) discuss with Fund management its policies","page_number":32,"box":{"x":117,"y":235,"width":736,"height":11}},{"id":"ee020790-e4f8-4f10-99d5-12cd7ba9f1e7","block_type":"box","text":"regarding risk assessment and risk management as such matters relate to the Fund’s financial reporting","page_number":32,"box":{"x":117,"y":250,"width":741,"height":12}},{"id":"24147b60-3aad-47ee-bff6-04d3052d0e80","block_type":"box","text":"and controls; (8) resolve any disagreements between Fund management and the Independent Registered","page_number":32,"box":{"x":116,"y":266,"width":745,"height":11}},{"id":"39f18ce3-e7f8-4d6d-9c48-1d475f6ded42","block_type":"box","text":"Public Accounting Firm regarding financial reporting; and (9) undertake such other duties and responsibilities","page_number":32,"box":{"x":117,"y":281,"width":766,"height":12}},{"id":"d15e5dc6-c28e-4353-9905-e7662c3e353a","block_type":"box","text":"as may from time to time be delegated by the Board to the Audit Committee. The Board has adopted a","page_number":32,"box":{"x":116,"y":297,"width":727,"height":11}},{"id":"a140f778-5dee-4fa5-9e8a-150eac82850f","block_type":"box","text":"written charter for the Audit Committee. During the fiscal year ended October 31, 2025, the Audit Committee","page_number":32,"box":{"x":116,"y":312,"width":770,"height":12}},{"id":"a3380dd3-fcb6-4959-b56d-080efb0cf012","block_type":"box","text":"met four times.","page_number":32,"box":{"x":117,"y":328,"width":112,"height":9}},{"id":"51abb2e1-28e2-4a44-bbb3-cfa05fd3b5d4","block_type":"box","text":"Governance and Nominating Committee.","page_number":32,"box":{"x":117,"y":351,"width":283,"height":11}},{"id":"ea9487aa-edc9-4e99-81cc-4a3ec011ff64","block_type":"box","text":"The members of the Governance and Nominating Committee (the","page_number":32,"box":{"x":401,"y":351,"width":469,"height":11}},{"id":"c22f1811-6b9e-41ce-8f7a-0d4cb75031f7","block_type":"box","text":"“Governance Committee”) are Cynthia A. Montgomery (Chair), Christopher J. Ailman, Susan J. Carter,","page_number":32,"box":{"x":117,"y":366,"width":713,"height":12}},{"id":"c2193e37-e62a-4a1a-88e2-3d4bd5bfe351","block_type":"box","text":"Collette Chilton and Henry R. Keizer, all of whom are Independent Trustees. The principal responsibilities of","page_number":32,"box":{"x":116,"y":382,"width":759,"height":11}},{"id":"e5cbb1e5-174e-4e26-a446-db2b2847f4d9","block_type":"box","text":"the Governance Committee are to (1) identify individuals qualified to serve as Independent Trustees of the","page_number":32,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"40737c0c-03f9-4816-ac08-9099ea04a446","block_type":"box","text":"Trust and recommend Independent Trustee nominees for election by shareholders or appointment by the","page_number":32,"box":{"x":116,"y":413,"width":743,"height":11}},{"id":"2984a258-c3dc-45b4-a334-7194b71b35ad","block_type":"box","text":"Board; (2) advise the Board with respect to Board composition, procedures and committees (other than the","page_number":32,"box":{"x":117,"y":428,"width":759,"height":12}},{"id":"2d199367-e883-4cce-b139-3c5682dd860a","block_type":"box","text":"Audit Committee); (3) oversee periodic self-assessments of the Board and committees of the Board (other","page_number":32,"box":{"x":116,"y":444,"width":753,"height":11}},{"id":"c469c781-f540-4e52-8953-e3bddae3509a","block_type":"box","text":"than the Audit Committee); (4) review and make recommendations regarding Independent Trustee","page_number":32,"box":{"x":116,"y":460,"width":694,"height":11}},{"id":"0cd7c8a3-c774-4611-9295-b7327a767d85","block_type":"box","text":"compensation; (5) monitor corporate governance matters and develop appropriate recommendations to the","page_number":32,"box":{"x":116,"y":475,"width":760,"height":11}},{"id":"4eab246b-455a-4bdf-b8a3-f41ca3376759","block_type":"box","text":"Board; (6) act as the administrative committee with respect to Board policies and procedures, committee","page_number":32,"box":{"x":117,"y":491,"width":744,"height":11}},{"id":"16e9bb9d-069e-4ba8-b19a-e157098e5944","block_type":"box","text":"policies and procedures (other than the Audit Committee) and codes of ethics as they relate to Independent","page_number":32,"box":{"x":117,"y":506,"width":763,"height":11}},{"id":"0a985e4e-722d-480c-9b2d-9f0c46b7eb16","block_type":"box","text":"Trustees; and (7) undertake such other duties and responsibilities as may from time to time be delegated by","page_number":32,"box":{"x":116,"y":522,"width":769,"height":11}},{"id":"8d463b25-4eca-4fa6-b2a1-fd6a710b1eb0","block_type":"box","text":"the Board to the Governance Committee. The Governance Committee may consider nominations for","page_number":32,"box":{"x":116,"y":537,"width":707,"height":11}},{"id":"6431024c-600d-4b74-984d-97055487d6c9","block_type":"box","text":"Trustees made by the Fund’s shareholders as it deems appropriate. Under the Trust’s Amended and","page_number":32,"box":{"x":116,"y":553,"width":713,"height":11}},{"id":"543f69d2-4621-4b1e-ab49-1dbf7ec1d154","block_type":"box","text":"Restated Code of Regulations (“Bylaws”), shareholders must follow certain procedures to nominate a person","page_number":32,"box":{"x":117,"y":568,"width":770,"height":11}},{"id":"001c74c9-addc-42ae-b442-b55788690856","block_type":"box","text":"for election as a Trustee at a shareholder meeting at which Trustees are to be elected. Under these advance","page_number":32,"box":{"x":116,"y":584,"width":770,"height":11}},{"id":"0761b345-ab64-4f31-ae36-e50d5589fb52","block_type":"box","text":"notice procedures, notice of the proposed nominee to the Secretary of the Trust must be delivered to or","page_number":32,"box":{"x":117,"y":599,"width":734,"height":11}},{"id":"3be500bf-a0cb-4eb1-8ffc-bc3faef1fc5d","block_type":"box","text":"mailed and received at the principal executive offices of the Trust not later than the close of business on the","page_number":32,"box":{"x":117,"y":615,"width":767,"height":11}},{"id":"f59df6cc-b050-48d1-8bc0-5673e680c18d","block_type":"box","text":"fifth day following the day on which notice of the date of the meeting was mailed or public disclosure of the","page_number":32,"box":{"x":116,"y":630,"width":756,"height":12}},{"id":"ece21e85-1d64-48ff-8493-5cee8b56b183","block_type":"box","text":"date of the meeting was made, whichever first occurs. The Trust’s Bylaws provide that notice of a proposed","page_number":32,"box":{"x":116,"y":646,"width":761,"height":11}},{"id":"f8445a49-db94-4d54-a6a3-e7b10bed6366","block_type":"box","text":"nomination must include certain information about the shareholder and the nominee, as well as certain","page_number":32,"box":{"x":117,"y":661,"width":725,"height":11}},{"id":"c55497c4-9c7a-4985-a2f6-a8c2c50c2d6f","block_type":"box","text":"other information, including a written consent of the proposed nominee to serve if elected. Reference is","page_number":32,"box":{"x":116,"y":677,"width":728,"height":11}},{"id":"7c25eb34-4f70-4ab3-b249-ab4733cfcb89","block_type":"box","text":"made to the Trust’s Bylaws for more details. The Board has adopted a written charter for the Governance","page_number":32,"box":{"x":117,"y":692,"width":738,"height":11}},{"id":"0ce6634a-e631-4d0b-abb1-bbba4174be9b","block_type":"box","text":"Committee. During the fiscal year ended October 31, 2025, the Governance Committee met ten times.","page_number":32,"box":{"x":116,"y":708,"width":724,"height":11}},{"id":"2a91fe19-283a-4a16-8b0c-c3d98f686a6f","block_type":"box","text":"Compliance Committee.","page_number":32,"box":{"x":117,"y":731,"width":167,"height":11}},{"id":"39fc85ee-8901-47fd-a935-ec979a4229dd","block_type":"box","text":"The members of the Compliance Committee (the “Compliance Committee”) are","page_number":32,"box":{"x":290,"y":731,"width":558,"height":11}},{"id":"859f2cf4-5cb2-40f6-a2a5-a364eb3abca1","block_type":"box","text":"Claire A. Walton (Chair), Cynthia A. Montgomery, Donald C. Opatrny, Lori Richards and Kenneth L. Urish, all","page_number":32,"box":{"x":116,"y":746,"width":749,"height":12}},{"id":"ae4111d1-4418-48f7-818a-87d5ba2ea87f","block_type":"box","text":"of whom are Independent Trustees. The Compliance Committee’s purpose is to assist the Board in fulfilling","page_number":32,"box":{"x":116,"y":762,"width":757,"height":11}},{"id":"909ee4da-ad15-4f86-83b4-f6ef2c585c38","block_type":"box","text":"its responsibility to oversee regulatory and fiduciary compliance matters involving the Trust, the fund-related","page_number":32,"box":{"x":117,"y":777,"width":753,"height":12}},{"id":"8d3c77f3-75bf-424f-8e24-288f200fc893","block_type":"box","text":"activities of the Manager and any sub-adviser and the Trust’s third-party service providers. The Compliance","page_number":32,"box":{"x":116,"y":793,"width":748,"height":11}},{"id":"db929fd0-8971-4f62-940d-c4fb6f7e9fb7","block_type":"box","text":"Committee’s responsibilities include, without limitation, to (1) oversee the compliance policies and","page_number":32,"box":{"x":116,"y":808,"width":693,"height":12}},{"id":"a04b002d-3911-4dc2-b9ce-6dce92a4678c","block_type":"box","text":"procedures of the Trust and its service providers and recommend changes or additions to such policies and","page_number":32,"box":{"x":117,"y":824,"width":755,"height":11}},{"id":"bbc05074-64f7-4d6b-a544-300a3d7f46ee","block_type":"box","text":"procedures; (2) review information on and, where appropriate, recommend policies concerning the Trust’s","page_number":32,"box":{"x":117,"y":839,"width":746,"height":12}},{"id":"7a9972a7-11d5-4e03-b64d-785a6a1ee2ce","block_type":"box","text":"compliance with applicable law; (3) review reports from, oversee the annual performance review of, and","page_number":32,"box":{"x":116,"y":855,"width":731,"height":11}},{"id":"f0567890-b426-4a8b-adb7-743dc8af393f","block_type":"box","text":"make certain recommendations and determinations regarding the Trust’s Chief Compliance Officer (the","page_number":32,"box":{"x":117,"y":870,"width":729,"height":12}},{"id":"c3eed963-5bf3-4ba1-9ac8-3ae0150cc3dc","block_type":"box","text":"I-10","page_number":32,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"7f1e37ca-e130-4553-ba5c-e2fdffa63c76","block_type":"box","text":"NM1026U-6033243-32/221","page_number":32,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d599ce38-b63a-4df4-8912-b466875c1713","block_type":"box","text":"“CCO”), including determining the amount and structure of the CCO’s compensation and recommending","page_number":33,"box":{"x":117,"y":80,"width":735,"height":11}},{"id":"b72e79bb-c808-44c9-84e2-d4a0bfd4b94d","block_type":"box","text":"such amount and structure to the full Board for approval and ratification; and (4) undertake such other duties","page_number":33,"box":{"x":116,"y":95,"width":772,"height":11}},{"id":"c938c69d-1d2d-485e-a85b-82dbafdbaf54","block_type":"box","text":"and responsibilities as may from time to time be delegated by the Board to the Compliance Committee. The","page_number":33,"box":{"x":116,"y":111,"width":764,"height":11}},{"id":"40124e00-bc3e-4cd3-a45d-d15dc58ced29","block_type":"box","text":"Board has adopted a written charter for the Compliance Committee. During the fiscal year ended","page_number":33,"box":{"x":117,"y":126,"width":683,"height":12}},{"id":"88339b55-a5a4-4ace-99ea-96df822232f9","block_type":"box","text":"October 31, 2025, the Compliance Committee met four times.","page_number":33,"box":{"x":116,"y":142,"width":446,"height":11}},{"id":"00d27c63-6ca1-403d-9b04-55be3f02879b","block_type":"box","text":"Performance Oversight Committee.","page_number":33,"box":{"x":117,"y":165,"width":244,"height":11}},{"id":"8002472d-0695-4ded-a4b0-5a2764cfe43a","block_type":"box","text":"The members of the Performance Oversight Committee (the","page_number":33,"box":{"x":361,"y":165,"width":430,"height":11}},{"id":"1739b25f-71a6-45b1-94a3-5e247835a8c5","block_type":"box","text":"“Performance Oversight Committee”) are Donald C. Opatrny (Chair), Christopher J. Ailman, Susan J. Carter,","page_number":33,"box":{"x":117,"y":180,"width":755,"height":12}},{"id":"f3838025-ede2-4408-a1a7-408631ffa520","block_type":"box","text":"Collette Chilton and Neil A. Cotty, all of whom are Independent Trustees. The Performance Oversight","page_number":33,"box":{"x":116,"y":196,"width":709,"height":11}},{"id":"53ef5131-107f-40bb-b5a2-e6f133873827","block_type":"box","text":"Committee’s purpose is to assist the Board in fulfilling its responsibility to oversee the Fund’s investment","page_number":33,"box":{"x":116,"y":211,"width":748,"height":12}},{"id":"892f5669-6bcb-421b-86cb-724c31cd7d2e","block_type":"box","text":"performance relative to its agreed-upon performance objectives and to assist the Independent Trustees in","page_number":33,"box":{"x":117,"y":227,"width":748,"height":11}},{"id":"49916ce7-2f27-4d1d-8ec3-8c463a50f29e","block_type":"box","text":"their consideration of investment advisory agreements. The Performance Oversight Committee’s","page_number":33,"box":{"x":116,"y":242,"width":681,"height":12}},{"id":"6e695ae9-8138-4c03-a6b8-f91faa6aa2f6","block_type":"box","text":"responsibilities include, without limitation, to (1) review information on, and make recommendations to the","page_number":33,"box":{"x":117,"y":258,"width":754,"height":11}},{"id":"3f6701a6-9660-43ba-8d34-8402f4628868","block_type":"box","text":"full Board in respect of, the Fund’s investment objective, policies and practices; (2) review information on the","page_number":33,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"6f55898b-eeda-4203-bce8-36105a685db0","block_type":"box","text":"Fund’s investment performance; (3) review information on appropriate benchmarks and competitive","page_number":33,"box":{"x":117,"y":289,"width":703,"height":11}},{"id":"b393fee1-3e54-4661-b437-0f0aa7a0a358","block_type":"box","text":"universes and unusual or exceptional investment matters; (4) review personnel and other resources devoted","page_number":33,"box":{"x":117,"y":305,"width":767,"height":11}},{"id":"b6afdbe1-a66a-43a3-8793-c0f215f6f28e","block_type":"box","text":"to management of the Fund and evaluate the nature and quality of information furnished to the Performance","page_number":33,"box":{"x":116,"y":320,"width":766,"height":11}},{"id":"0483983b-d4b6-4b39-819a-2801d73f3d76","block_type":"box","text":"Oversight Committee; (5) recommend any required action regarding changes in fundamental and","page_number":33,"box":{"x":116,"y":335,"width":682,"height":12}},{"id":"349ae88d-bcd7-42dc-bbb5-72ab729266cf","block_type":"box","text":"non-fundamental investment policies and restrictions, fund mergers or liquidations; (6) request and review","page_number":33,"box":{"x":117,"y":351,"width":750,"height":11}},{"id":"5c7ce5f3-a528-4e06-a855-296fefc4d117","block_type":"box","text":"information on the nature, extent and quality of services provided to the shareholders; (7) make","page_number":33,"box":{"x":117,"y":366,"width":676,"height":12}},{"id":"65d436d0-c47b-45d4-8bcb-38de500c7d9a","block_type":"box","text":"recommendations to the Board concerning the approval or renewal of investment advisory agreements; and","page_number":33,"box":{"x":117,"y":382,"width":760,"height":11}},{"id":"543280d7-e8ec-42a0-bb2b-14510eba0d4c","block_type":"box","text":"(8) undertake such other duties and responsibilities as may from time to time be delegated by the Board to","page_number":33,"box":{"x":117,"y":397,"width":759,"height":12}},{"id":"43e22a1b-bc76-41ba-9659-4b45473ff89d","block_type":"box","text":"the Performance Oversight Committee. The Board has adopted a written charter for the Performance","page_number":33,"box":{"x":116,"y":413,"width":710,"height":11}},{"id":"33d66354-1f46-4625-8e6b-21806f28c7ea","block_type":"box","text":"Oversight Committee. During the fiscal year ended October 31, 2025, the Performance Oversight Committee","page_number":33,"box":{"x":116,"y":428,"width":768,"height":12}},{"id":"c36f79d9-0c2e-4502-8903-4c632457c892","block_type":"box","text":"met five times.","page_number":33,"box":{"x":117,"y":444,"width":109,"height":9}},{"id":"c372d639-1ae2-4b25-a5cf-8dfdd327d420","block_type":"box","text":"Ad Hoc Topics Committee.","page_number":33,"box":{"x":116,"y":467,"width":185,"height":11}},{"id":"8adcb2c5-9dbe-4eac-b0a1-0046da44cf89","block_type":"box","text":"The members of the Ad Hoc Topics Committee (the “Ad Hoc Topics Committee”)","page_number":33,"box":{"x":302,"y":467,"width":577,"height":11}},{"id":"759a8f65-c18c-4670-a34b-593f7cc27cf2","block_type":"box","text":"are Mark Stalnecker (Chair) and Claire A. Walton, both of whom are Independent Trustees, and John M.","page_number":33,"box":{"x":116,"y":483,"width":732,"height":11}},{"id":"89f6a0ba-ade5-4684-a5aa-ffa1acf20e23","block_type":"box","text":"Perlowski, who serves as an interested Trustee. The principal responsibilities of the Ad Hoc Topics","page_number":33,"box":{"x":117,"y":498,"width":696,"height":11}},{"id":"8b6961c6-7993-404d-8da1-0f5468f3432d","block_type":"box","text":"Committee are to (1) act on routine matters between meetings of the Board; (2) act on such matters as may","page_number":33,"box":{"x":116,"y":514,"width":769,"height":11}},{"id":"590e38b8-67d4-4d12-ba48-7e1aaa09e409","block_type":"box","text":"require urgent action between meetings of the Board; and (3) exercise such other authority as may from time","page_number":33,"box":{"x":117,"y":529,"width":770,"height":12}},{"id":"31b12e88-a2f0-4cbb-bef2-5b61ee18ca5a","block_type":"box","text":"to time be delegated to the Ad Hoc Topics Committee by the Board. The Board has adopted a written charter","page_number":33,"box":{"x":116,"y":545,"width":770,"height":11}},{"id":"f1fa0567-f2f3-4b7a-a9fe-de8c79bbc7f0","block_type":"box","text":"for the Ad Hoc Topics Committee. During the fiscal year ended October 31, 2025, the Ad Hoc Topics","page_number":33,"box":{"x":116,"y":560,"width":712,"height":12}},{"id":"07ba2ea2-1c0a-4ce5-9477-1a52e9230c5d","block_type":"box","text":"Committee did not meet.","page_number":33,"box":{"x":116,"y":576,"width":180,"height":9}},{"id":"2abad205-d47d-4ffe-9b69-feb844fecf21","block_type":"box","text":"The Governance Committee has adopted a statement of policy that describes the experience, qualifications,","page_number":33,"box":{"x":116,"y":599,"width":766,"height":11}},{"id":"1de65d99-ed17-45d4-b895-16185e5fb06a","block_type":"box","text":"skills and attributes that are necessary and desirable for potential Independent Trustee candidates (the","page_number":33,"box":{"x":116,"y":615,"width":733,"height":11}},{"id":"b01c7b78-ab35-48fb-ba57-399a19f7b58c","block_type":"box","text":"“Statement of Policy”). The Board believes that each Independent Trustee satisfied, at the time he or she","page_number":33,"box":{"x":117,"y":630,"width":747,"height":11}},{"id":"37f456f9-8e4b-4c8d-b104-1d25ccb6c4cf","block_type":"box","text":"was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the","page_number":33,"box":{"x":116,"y":646,"width":740,"height":11}},{"id":"df779648-a773-4d88-a9fd-5122c2191cbd","block_type":"box","text":"Statement of Policy. Furthermore, in determining that a particular Independent Trustee was and continues to","page_number":33,"box":{"x":116,"y":661,"width":761,"height":12}},{"id":"748f6174-00c6-46a9-bad5-a84b6cb089e0","block_type":"box","text":"be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation,","page_number":33,"box":{"x":117,"y":677,"width":756,"height":11}},{"id":"9cc48827-b8b4-487a-84b5-4c70349880e9","block_type":"box","text":"was controlling. The Board believes that, collectively, the Independent Trustees have balanced and diverse","page_number":33,"box":{"x":116,"y":692,"width":748,"height":12}},{"id":"46331f83-8725-4967-ae62-b28c818b5a16","block_type":"box","text":"experience, skills, attributes and qualifications, which allow the Board to operate effectively in governing the","page_number":33,"box":{"x":116,"y":708,"width":757,"height":11}},{"id":"fb5ce1d0-337b-436e-aa35-8eb8f3efbc6d","block_type":"box","text":"Trust and protecting the interests of shareholders. Among the attributes common to all Independent","page_number":33,"box":{"x":116,"y":723,"width":704,"height":12}},{"id":"c5aaa859-9d81-4f8e-9d0d-1bb142e7f143","block_type":"box","text":"Trustees are their ability to review critically, evaluate, question and discuss information provided to them, to","page_number":33,"box":{"x":116,"y":739,"width":757,"height":11}},{"id":"35e82660-6d7c-467f-95d7-a83f122c591c","block_type":"box","text":"interact effectively with the Fund’s investment adviser, sub-advisers, other service providers, counsel and the","page_number":33,"box":{"x":117,"y":754,"width":765,"height":11}},{"id":"eb2327e6-b1b5-4a1c-bc59-ea7d9009fd9f","block_type":"box","text":"Independent Registered Public Accounting Firm, and to exercise effective business judgment in the","page_number":33,"box":{"x":117,"y":770,"width":693,"height":11}},{"id":"c891fc06-58c3-4226-8f9f-f74947d9abf5","block_type":"box","text":"performance of their duties as Trustees.","page_number":33,"box":{"x":117,"y":785,"width":281,"height":11}},{"id":"4da41d19-eb9a-4c1b-9552-1bd0d1d7510f","block_type":"box","text":"Each Trustee’s ability to perform his or her duties effectively is evidenced by his or her educational","page_number":33,"box":{"x":117,"y":808,"width":690,"height":12}},{"id":"a4c268fa-4f9f-42a3-81a1-3363c2ce6f32","block_type":"box","text":"background or professional training; business, consulting, public service or academic positions; experience","page_number":33,"box":{"x":117,"y":824,"width":751,"height":11}},{"id":"5ca55140-0c88-4d06-811a-9b1d8ff71e95","block_type":"box","text":"from service as a board member of the Trust and the other funds in the BlackRock Fund Complexes (and any","page_number":33,"box":{"x":116,"y":839,"width":771,"height":12}},{"id":"816b778c-1458-4ea5-b72e-c02e2707b893","block_type":"box","text":"predecessor funds), other investment funds, public companies, non-profit entities or other organizations;","page_number":33,"box":{"x":117,"y":855,"width":739,"height":11}},{"id":"f1c135b0-8dd9-406b-828a-6942dd15ba72","block_type":"box","text":"I-11","page_number":33,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"5e0b312a-f1d0-4c92-8273-be96591d521b","block_type":"box","text":"NM1026U-6033243-33/221","page_number":33,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"1d6da579-526b-4083-b188-a4fed8dc6e53","block_type":"box","text":"ongoing commitment to and participation in Board and Committee meetings, as well as his or her leadership","page_number":34,"box":{"x":116,"y":80,"width":769,"height":11}},{"id":"1274c473-697c-4bb8-9818-9c83f66df7f1","block_type":"box","text":"of standing and ad hoc committees throughout the years; or other relevant life experiences.","page_number":34,"box":{"x":116,"y":95,"width":649,"height":12}},{"id":"9c61ca46-0d97-4b7c-80a1-42e13de8f556","block_type":"box","text":"The table below discusses some of the experiences, qualifications and skills of each of the Trustees that","page_number":34,"box":{"x":116,"y":118,"width":745,"height":12}},{"id":"7b0dea1b-4bb2-4943-8422-333b6d791426","block_type":"box","text":"support the conclusion that each Trustee should serve on the Board.","page_number":34,"box":{"x":116,"y":134,"width":489,"height":11}},{"id":"75359d2e-6674-4056-8108-02296149fef5","block_type":"box","text":"Trustees","page_number":34,"box":{"x":116,"y":162,"width":51,"height":7}},{"id":"8989bffe-b72d-443c-bc37-f5cf0db05611","block_type":"box","text":"Experience, Qualifications and Skills","page_number":34,"box":{"x":266,"y":162,"width":219,"height":9}},{"id":"0497cd83-bd3e-4d5c-b482-e818f9ac0ff0","block_type":"box","text":"Independent Trustees","page_number":34,"box":{"x":117,"y":184,"width":127,"height":8}},{"id":"a55b7593-19d7-4c72-9f97-4a1be7f0ea1c","block_type":"box","text":"Christopher J. Ailman Christopher Ailman has more than 30 years of experience in the financial services industry, including","page_number":34,"box":{"x":116,"y":199,"width":741,"height":9}},{"id":"a35d87b1-079d-4f3d-9ca6-1c4be9533565","block_type":"box","text":"most recently serving as Chief Investment Officer of the California State Teachers Retirement System","page_number":34,"box":{"x":266,"y":209,"width":594,"height":10}},{"id":"bf76e0cb-4ee4-4f8b-990c-b894de75f5ca","block_type":"box","text":"(CalSTRS) from 2000 to June 2024 where he led its investment program. Mr. Ailman currently is a","page_number":34,"box":{"x":266,"y":220,"width":576,"height":9}},{"id":"4e130f82-72ca-4c9e-b292-b5aa272d0684","block_type":"box","text":"principal at Ailman Advisers. In addition, he has held various roles in the industry, including as member","page_number":34,"box":{"x":267,"y":230,"width":604,"height":9}},{"id":"ba3427c7-9358-416d-a82a-d0a0c1554f9c","block_type":"box","text":"and chair of the asset owner committee of the Kroner Center for Financial Research, chairman of the","page_number":34,"box":{"x":266,"y":240,"width":591,"height":9}},{"id":"c28a7d78-cf55-4eec-a9d5-37fcef191663","block_type":"box","text":"North American Chapter of the 300 Club of Global CIOs, and co-chair of the Milken Global Capital","page_number":34,"box":{"x":267,"y":251,"width":568,"height":9}},{"id":"e5f5dbd7-db9b-4c39-93bc-3969a776e2d1","block_type":"box","text":"Markets Advisory Council. These positions have provided Mr. Ailman with considerable investment","page_number":34,"box":{"x":267,"y":261,"width":574,"height":9}},{"id":"88d0168e-181b-43e2-88e9-eb55e13102f2","block_type":"box","text":"expertise across asset classes and strategies, and insight and perspective on the markets and the","page_number":34,"box":{"x":266,"y":271,"width":582,"height":10}},{"id":"2b8a8387-8c7c-4b8c-bde4-da949c45a545","block_type":"box","text":"economy. In addition, Mr. Ailman serves as a member of the Governance and Nominating Committee","page_number":34,"box":{"x":266,"y":282,"width":592,"height":9}},{"id":"c4cef7c9-a141-40b7-8c22-896855049999","block_type":"box","text":"and the Performance Oversight Committee.","page_number":34,"box":{"x":266,"y":292,"width":252,"height":9}},{"id":"bad18631-bbc1-41c4-a234-1ea587511255","block_type":"box","text":"Susan J. Carter Susan J. Carter has over 35 years of experience in investment management. She has served as","page_number":34,"box":{"x":116,"y":308,"width":713,"height":9}},{"id":"27c9bc82-43ad-4b37-96e3-3db8d143c8da","block_type":"box","text":"President & Chief Executive Officer of Commonfund Capital, Inc. (“CCI”), a registered investment adviser","page_number":34,"box":{"x":266,"y":318,"width":613,"height":9}},{"id":"73cbab27-28ee-41a2-ac7f-136eb74c4185","block_type":"box","text":"focused on non-profit investors, from 1997 to 2013, Chief Executive Officer of CCI from 2013 to 2014","page_number":34,"box":{"x":266,"y":328,"width":601,"height":9}},{"id":"fe9ae786-d3e4-4b93-a25e-26ee85052494","block_type":"box","text":"and Senior Advisor to CCI in 2015. Ms. Carter also served as director of the Pacific Pension Institute","page_number":34,"box":{"x":266,"y":339,"width":591,"height":7}},{"id":"6f544d7e-0a5f-4a68-ba49-bcd96526350b","block_type":"box","text":"from 2014 to 2018, trustee to the Financial Accounting Foundation from 2017 to 2021, Advisory Board","page_number":34,"box":{"x":266,"y":349,"width":607,"height":9}},{"id":"c7b24726-b967-4dcd-ab27-aa019134bd40","block_type":"box","text":"Member for the Center for Private Equity and Entrepreneurship at Tuck School of Business from 1997 to","page_number":34,"box":{"x":267,"y":359,"width":610,"height":9}},{"id":"92060d66-f73c-4e56-8abe-6805b3715c03","block_type":"box","text":"2021, Advisory Board Member for Bridges Fund Management from 2016 to 2018, Advisory Board","page_number":34,"box":{"x":266,"y":370,"width":572,"height":9}},{"id":"e5b6ec46-2b18-4561-9c7e-313873acc2fd","block_type":"box","text":"Member for Girls Who Invest from 2015 to 2018 and Board Member thereof from 2018 to 2022, and","page_number":34,"box":{"x":267,"y":380,"width":594,"height":8}},{"id":"d867219c-2758-453f-bcf1-6aa615590166","block_type":"box","text":"Practitioner Advisory Board Member for Private Capital Research Institute (“PCRI”) from 2017 to 2024.","page_number":34,"box":{"x":266,"y":390,"width":602,"height":9}},{"id":"27bc2ee9-5b66-4b0a-93ee-5e1d02537425","block_type":"box","text":"She currently serves as Member of the President’s Counsel for CommonFund. These positions have","page_number":34,"box":{"x":266,"y":401,"width":586,"height":9}},{"id":"60bdcf51-2bbf-49d6-ab5b-ca411f4ad124","block_type":"box","text":"provided her with insight and perspective on the markets and the economy.","page_number":34,"box":{"x":267,"y":411,"width":440,"height":9}},{"id":"3a20688d-6e9f-4e55-8485-bd7d20eb14c5","block_type":"box","text":"Collette Chilton Collette Chilton has over 20 years of experience in investment management. She has held the position","page_number":34,"box":{"x":116,"y":426,"width":754,"height":10}},{"id":"42eaca2b-6244-4fa8-b7fc-86962877192b","block_type":"box","text":"of Chief Investment Officer of Williams College from October 2006 to June 2023. Prior to that she was","page_number":34,"box":{"x":266,"y":437,"width":601,"height":9}},{"id":"88b70594-c31b-4af8-ac7c-f54f07471d7c","block_type":"box","text":"President and Chief Investment Officer of Lucent Asset Management Corporation, where she oversaw","page_number":34,"box":{"x":266,"y":447,"width":594,"height":9}},{"id":"32998018-b443-43f0-8dd5-bd31af16094f","block_type":"box","text":"approximately $40 billion in pension and retirement savings assets for the company. These positions","page_number":34,"box":{"x":266,"y":457,"width":594,"height":10}},{"id":"10adb986-215f-4900-b79c-f07fbea8f0d3","block_type":"box","text":"have provided her with insight and perspective on the markets and the economy.","page_number":34,"box":{"x":266,"y":468,"width":472,"height":9}},{"id":"28da237a-54c6-4577-b46a-510d350f0f41","block_type":"box","text":"Neil A. Cotty Neil A. Cotty has more than 30 years of experience in the financial services industry, including 19 years","page_number":34,"box":{"x":117,"y":483,"width":756,"height":9}},{"id":"1b35a3e9-0ada-44ce-b6ae-8929b750e914","block_type":"box","text":"at Bank of America Corporation and its affiliates, where he served, at different times, as the Chief","page_number":34,"box":{"x":266,"y":494,"width":575,"height":8}},{"id":"ba134550-ae74-4f34-8477-6fb0c53b0573","block_type":"box","text":"Financial Officer of various businesses including Investment Banking, Global Markets, Wealth","page_number":34,"box":{"x":267,"y":504,"width":545,"height":9}},{"id":"62f9f99c-1981-4234-b9b0-a6a43dbd0c75","block_type":"box","text":"Management and Consumer and also served ten years as the Chief Accounting Officer for Bank of","page_number":34,"box":{"x":267,"y":514,"width":574,"height":9}},{"id":"5624aacf-38e0-4190-b1e6-334610a02c17","block_type":"box","text":"America Corporation. Mr. Cotty has been determined by the Audit Committee to be an audit committee","page_number":34,"box":{"x":266,"y":525,"width":601,"height":9}},{"id":"3ed9805c-9b63-42cf-8250-7596b33cbee4","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":34,"box":{"x":266,"y":535,"width":449,"height":9}},{"id":"0a138762-e309-4256-b17d-490f578719a0","block_type":"box","text":"Henry R. Keizer Henry R. Keizer brings over 40 years of executive, financial, operational, strategic and global expertise","page_number":34,"box":{"x":117,"y":550,"width":748,"height":10}},{"id":"942d4151-72c5-4701-a1cc-7a32435f4c01","block_type":"box","text":"gained through his 35 year career at KPMG, a global professional services organization and by his","page_number":34,"box":{"x":266,"y":561,"width":574,"height":9}},{"id":"c00c510e-7b6c-4fdb-afce-e6b6d06c6b25","block_type":"box","text":"service as a director to both publicly and privately held organizations. He has extensive experience with","page_number":34,"box":{"x":266,"y":571,"width":604,"height":9}},{"id":"0152d1d5-f35e-40df-975a-9e396fb07a1c","block_type":"box","text":"issues facing complex, global companies and expertise in financial reporting, accounting, auditing, risk","page_number":34,"box":{"x":267,"y":581,"width":601,"height":10}},{"id":"557ecb3a-bd0d-4792-b77f-eb9c1d7e36a4","block_type":"box","text":"management, and regulatory affairs for such companies. Mr. Keizer’s experience also includes service","page_number":34,"box":{"x":266,"y":592,"width":600,"height":9}},{"id":"995724ce-c8d3-48ad-8788-483748fefe01","block_type":"box","text":"as an audit committee chair to both publicly and privately held organizations across numerous industries","page_number":34,"box":{"x":266,"y":602,"width":613,"height":9}},{"id":"22320ca9-3c7b-4e8d-a7c9-698f68c309d7","block_type":"box","text":"including professional services, property and casualty reinsurance, insurance, diversified financial","page_number":34,"box":{"x":267,"y":612,"width":571,"height":10}},{"id":"9491ca04-42bb-4465-8cd8-56fffd0aeb74","block_type":"box","text":"services, banking, direct to consumer, business to business and technology. Mr. Keizer is a certified","page_number":34,"box":{"x":266,"y":623,"width":589,"height":9}},{"id":"8197ba0a-6d1b-402d-8252-3e7cc64f4ae5","block_type":"box","text":"public accountant and also served on the board of the American Institute of Certified Public Accountants.","page_number":34,"box":{"x":267,"y":633,"width":614,"height":9}},{"id":"f08353b3-f1c3-4a60-88f9-7f429ba113ca","block_type":"box","text":"Mr. Keizer has been determined by the Audit Committee to be an audit committee financial expert, as","page_number":34,"box":{"x":267,"y":643,"width":595,"height":10}},{"id":"8155f309-1b1e-4762-bfbb-2f8147110176","block_type":"box","text":"such term is defined in the applicable Commission rules.","page_number":34,"box":{"x":266,"y":654,"width":333,"height":9}},{"id":"87cdbfc6-171d-46e8-8b76-32296696bbfe","block_type":"box","text":"Cynthia A. Montgomery Cynthia A. 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The Board benefits from","page_number":34,"box":{"x":566,"y":690,"width":272,"height":9}},{"id":"0fb3c139-104c-4c70-b4d8-391130fb3732","block_type":"box","text":"Ms. Montgomery’s more than 20 years of academic","page_number":34,"box":{"x":267,"y":700,"width":291,"height":9}},{"id":"c7d05ff8-3ebb-4157-a681-eac92a792822","block_type":"box","text":"experience as a professor at Harvard Business School","page_number":34,"box":{"x":562,"y":700,"width":305,"height":9}},{"id":"8cb08c6b-0608-4538-9592-88829aef6af9","block_type":"box","text":"where she taught courses on corporate strategy and corporate governance. Ms. Montgomery also has","page_number":34,"box":{"x":266,"y":711,"width":572,"height":9}},{"id":"35cf9ff2-b206-4b90-a943-0c9a5589613a","block_type":"box","text":"business management and corporate governance experience through her service on the corporate boards of","page_number":34,"box":{"x":266,"y":721,"width":609,"height":9}},{"id":"05480f51-6a95-4ce7-a5d9-b86ad05cd3e0","block_type":"box","text":"a variety of public companies. She has also authored numerous articles and books on these topics.","page_number":34,"box":{"x":266,"y":731,"width":560,"height":9}},{"id":"67c1416c-8f5f-4fa2-8754-5ec547da43a4","block_type":"box","text":"Donald C. Opatrny Donald C. 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In addition, Ms. Richards served as a member of the National","page_number":35,"box":{"x":266,"y":199,"width":604,"height":9}},{"id":"b376781c-b955-4e3a-935f-134cf282ed25","block_type":"box","text":"Adjudicatory Council of the Financial Industry Regulatory Authority (FINRA) from 2019 to 2022 and held","page_number":35,"box":{"x":266,"y":209,"width":602,"height":10}},{"id":"257c570b-5558-48f7-9429-ea99fb1bd444","block_type":"box","text":"the chair and vice chair posts during her tenure. Prior thereto, from 2010 to 2013, she was a Principal","page_number":35,"box":{"x":266,"y":220,"width":601,"height":9}},{"id":"d5238f30-a932-4076-8988-866af07ebe11","block_type":"box","text":"at PricewaterhouseCoopers LLP (“PwC”) and co-leader of its Asset Management Regulatory group. At","page_number":35,"box":{"x":266,"y":230,"width":591,"height":9}},{"id":"e3c026bc-321c-4d40-9edc-2d049075d323","block_type":"box","text":"PwC, she assisted a broad range of financial services clients in designing and implementing risk","page_number":35,"box":{"x":266,"y":240,"width":565,"height":10}},{"id":"c7fe2da5-81f6-4927-bccd-ef6f615a1afb","block_type":"box","text":"management and compliance programs, and preparing for new regulatory expectations. These positions","page_number":35,"box":{"x":266,"y":251,"width":608,"height":9}},{"id":"2cf3bdda-35b5-4fba-89a3-931d2b62c3ca","block_type":"box","text":"have provided her with insight and perspective on the markets and the economy, as well as asset","page_number":35,"box":{"x":266,"y":261,"width":573,"height":9}},{"id":"f57e50fd-a08a-4d49-b616-bb58cda13f3b","block_type":"box","text":"management regulation and compliance. In addition, Ms. Richards serves as a member of the Audit","page_number":35,"box":{"x":266,"y":271,"width":585,"height":10}},{"id":"ad375fc7-5205-4807-a17d-0c0fcd012003","block_type":"box","text":"Committee and the Compliance Committee.","page_number":35,"box":{"x":266,"y":282,"width":255,"height":9}},{"id":"ae2d390a-cf7a-4ed3-b9ce-75e49aac7424","block_type":"box","text":"Mark Stalnecker Mark Stalnecker has gained a wealth of experience in investing and asset management from his over","page_number":35,"box":{"x":117,"y":297,"width":743,"height":9}},{"id":"1b4a3007-d56d-454d-b695-539cdbc87047","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":35,"box":{"x":267,"y":308,"width":584,"height":9}},{"id":"7880d77b-2bec-44da-b3e3-7a961d1081e4","block_type":"box","text":"various positions with First Union Corporation, including Senior Vice President and State Investment","page_number":35,"box":{"x":266,"y":318,"width":585,"height":9}},{"id":"39e2e4bd-cd14-424c-8574-c6a0f1844371","block_type":"box","text":"Director of First Investment Advisors. The Board benefits from his experience and perspective as the","page_number":35,"box":{"x":267,"y":328,"width":588,"height":9}},{"id":"9e39da06-8445-4a96-897d-6e51d5b37e85","block_type":"box","text":"Chief Investment Officer of a university endowment and from the oversight experience he gained from","page_number":35,"box":{"x":266,"y":339,"width":593,"height":9}},{"id":"3ca4fe6e-858d-4dc1-993b-505f08425ad8","block_type":"box","text":"service on various private and non-profit boards.","page_number":35,"box":{"x":266,"y":349,"width":281,"height":9}},{"id":"be50d3ea-9dd6-4705-8aeb-646286f7c719","block_type":"box","text":"Kenneth L. Urish Kenneth L. Urish has served for over 15 years on the boards of registered investment companies, most","page_number":35,"box":{"x":117,"y":364,"width":757,"height":10}},{"id":"4c295b51-4fa8-4b4b-9c34-391e3a6640a7","block_type":"box","text":"recently as a member of the boards of certain BlackRock-advised Funds and predecessor funds,","page_number":35,"box":{"x":266,"y":375,"width":563,"height":9}},{"id":"7313643f-f41b-49bd-8e60-bfe42447d245","block_type":"box","text":"including the legacy BlackRock funds. He has over 30 years of experience in public accounting. Mr. Urish","page_number":35,"box":{"x":267,"y":385,"width":614,"height":9}},{"id":"5764175d-414b-42d9-b1cb-d5a9e4b9ac20","block_type":"box","text":"has served as a managing member of an accounting and consulting firm. Mr. Urish has been determined","page_number":35,"box":{"x":266,"y":395,"width":614,"height":10}},{"id":"01144fb2-5e40-488d-afa8-45c428f317f6","block_type":"box","text":"by the Audit Committee to be an audit committee financial expert, as such term is defined in the","page_number":35,"box":{"x":266,"y":406,"width":566,"height":9}},{"id":"11b3715a-7099-44d1-8c17-a1c7383cb7ab","block_type":"box","text":"applicable Commission rules.","page_number":35,"box":{"x":266,"y":416,"width":171,"height":9}},{"id":"97463dfa-7da5-4995-8b9c-1b45987971c5","block_type":"box","text":"Claire A. Walton Claire A. Walton has over 25 years of experience in investment management. 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These positions have provided","page_number":35,"box":{"x":266,"y":473,"width":604,"height":9}},{"id":"8ff65121-ac85-41ad-bf9f-7e91b7144dee","block_type":"box","text":"her with insight and perspective on the markets and the economy. Ms. Walton has been determined by","page_number":35,"box":{"x":266,"y":483,"width":604,"height":9}},{"id":"46abc398-6959-400e-bd55-7ca78d3329d1","block_type":"box","text":"the Audit Committee to be an audit committee financial expert, as such term is defined in the applicable","page_number":35,"box":{"x":266,"y":494,"width":613,"height":8}},{"id":"6f2120f0-6918-4c4d-bcef-32df587599f7","block_type":"box","text":"Commission rules.","page_number":35,"box":{"x":266,"y":504,"width":108,"height":7}},{"id":"d7a32b33-4d80-48c0-9449-00887326eeb8","block_type":"box","text":"Interested Trustees","page_number":35,"box":{"x":117,"y":522,"width":114,"height":7}},{"id":"32c3f792-ae99-424a-9597-213d2b3632ab","block_type":"box","text":"Robert Fairbairn Robert Fairbairn has more than 25 years of experience with BlackRock, Inc. and over 30 years of","page_number":35,"box":{"x":117,"y":538,"width":717,"height":9}},{"id":"dbd9eb0c-2405-41ba-9359-aa6fac7ac62e","block_type":"box","text":"experience in finance and asset management. 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Mr. Perlowski’s prior position as Managing Director and Chief Operating Officer of the Global","page_number":35,"box":{"x":267,"y":687,"width":582,"height":10}},{"id":"b70f27ab-c8d3-4e6b-b888-22251c6bf817","block_type":"box","text":"Product Group at Goldman Sachs Asset Management, and his former service as Treasurer and Senior","page_number":35,"box":{"x":266,"y":698,"width":597,"height":9}},{"id":"1d7d2efd-fdd4-4c67-94a9-edfb2e6c1baf","block_type":"box","text":"Vice President of the Goldman Sachs Mutual Funds and as Director of the Goldman Sachs Offshore","page_number":35,"box":{"x":266,"y":708,"width":584,"height":7}},{"id":"c06bcccd-aba6-4f41-b338-ec687f297aa4","block_type":"box","text":"Funds provides the Board with the benefit of his experience with the management practices of other","page_number":35,"box":{"x":267,"y":718,"width":586,"height":10}},{"id":"4c52d399-6d04-43d8-a1a6-ff211eda4f79","block_type":"box","text":"financial companies. 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Amounts shown may include shares as to which a Trustee has indirect beneficial ownership,","page_number":39,"box":{"x":116,"y":308,"width":772,"height":11}},{"id":"7991635e-3c67-4474-9419-91e2c2e4ba61","block_type":"box","text":"such as through participation in certain family accounts, 529 college savings plan interests, or similar","page_number":39,"box":{"x":116,"y":323,"width":721,"height":12}},{"id":"3b2f188a-64ab-4ad9-86f4-2bcf23169528","block_type":"box","text":"arrangements where the Trustee has beneficial economic interest but not a direct ownership interest.","page_number":39,"box":{"x":116,"y":339,"width":719,"height":11}},{"id":"5433b3c6-e80e-45dd-8857-9302a0327f76","block_type":"box","text":"Name","page_number":39,"box":{"x":159,"y":373,"width":33,"height":8}},{"id":"a5e57953-eab0-4560-a85a-1975c721d6c4","block_type":"box","text":"Dollar Range of Equity","page_number":39,"box":{"x":499,"y":363,"width":133,"height":9}},{"id":"29550022-1436-4ea9-8fd7-344fd466d8fd","block_type":"box","text":"Securities in the Fund","page_number":39,"box":{"x":499,"y":373,"width":131,"height":8}},{"id":"e5c104ef-a51c-48ec-bcb3-01af5e14b3fd","block_type":"box","text":"Aggregate Dollar Range of Equity","page_number":39,"box":{"x":683,"y":363,"width":200,"height":9}},{"id":"c2ed7d7d-cf1b-451f-b091-3dfd5977bffe","block_type":"box","text":"Securities in Supervised Funds","page_number":39,"box":{"x":691,"y":373,"width":184,"height":9}},{"id":"cedfb6fc-5cb3-4f4c-a028-6976e5a65cf0","block_type":"box","text":"Independent Trustees","page_number":39,"box":{"x":117,"y":394,"width":127,"height":9}},{"id":"3982c44a-e99a-43c2-aae2-a6b900714514","block_type":"box","text":"Christopher J. 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As of December 31,","page_number":39,"box":{"x":116,"y":637,"width":771,"height":12}},{"id":"3f7c6b3c-21d3-45aa-8803-cd315728b54b","block_type":"box","text":"2025, none of the Independent Trustees of the Trust or their immediate family members owned beneficially","page_number":39,"box":{"x":117,"y":653,"width":761,"height":11}},{"id":"09d730d9-6ba0-4d13-af20-7e059b0a9956","block_type":"box","text":"or of record any securities of the Fund’s investment adviser, principal underwriter, or any person directly or","page_number":39,"box":{"x":116,"y":668,"width":748,"height":12}},{"id":"e94a06ef-0008-43d5-acdc-130ef6a17246","block_type":"box","text":"indirectly controlling, controlled by, or under common control with such entities.","page_number":39,"box":{"x":117,"y":684,"width":554,"height":11}},{"id":"671f0994-d519-459c-b057-bd78ff022182","block_type":"box","text":"Compensation of Trustees","page_number":39,"box":{"x":116,"y":709,"width":196,"height":11}},{"id":"78d9de4c-3c27-40f6-846f-1efa3830edd1","block_type":"box","text":"Each Trustee who is an Independent Trustee is paid as compensation an annual retainer of $375,000 per","page_number":39,"box":{"x":117,"y":730,"width":747,"height":12}},{"id":"814c2859-abec-44d8-8384-768330a1154e","block_type":"box","text":"year for his or her services as a board member of the BlackRock-advised Funds in the BlackRock Multi-Asset","page_number":39,"box":{"x":116,"y":746,"width":762,"height":11}},{"id":"f7d5e87f-8d40-424c-a6a3-46987b0e1e52","block_type":"box","text":"Complex, including the Trust, and a $20,000 board meeting fee to be paid for each in-person board meeting","page_number":39,"box":{"x":116,"y":761,"width":762,"height":12}},{"id":"2972abdc-d153-4895-a116-e0787b25d495","block_type":"box","text":"attended (and may receive a board meeting fee for telephonic attendance at board meetings), for up to five","page_number":39,"box":{"x":116,"y":777,"width":752,"height":12}},{"id":"29408aa1-aed5-4562-8c2d-ade854363557","block_type":"box","text":"board meetings held in a calendar year (compensation for meetings in excess of this number to be","page_number":39,"box":{"x":117,"y":793,"width":693,"height":11}},{"id":"6b526872-3ac1-43dc-8cbb-63b78499f53e","block_type":"box","text":"determined on a case-by-case basis), together with out-of-pocket expenses in accordance with a board policy","page_number":39,"box":{"x":116,"y":808,"width":763,"height":12}},{"id":"5132cb87-68c9-4488-a026-3d544d02d4b5","block_type":"box","text":"on travel and other business expenses relating to attendance at meetings. The Chairs of the Audit","page_number":39,"box":{"x":116,"y":824,"width":691,"height":11}},{"id":"5a9b0251-f1a0-4be8-97b3-f53c0b1cafa7","block_type":"box","text":"Committee, Compliance Committee, Governance Committee and Performance Oversight Committee are paid","page_number":39,"box":{"x":116,"y":839,"width":769,"height":12}},{"id":"e892d012-b625-441b-a5b7-1bae83bd50b6","block_type":"box","text":"as compensation an additional annual retainer of $45,000, respectively. 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Ailman $724 None $445,000","page_number":40,"box":{"x":130,"y":210,"width":725,"height":10}},{"id":"563c8e8f-6b94-40a0-be9e-acd98b1b5dc1","block_type":"box","text":"Susan J. Carter $724 None $445,000","page_number":40,"box":{"x":130,"y":226,"width":725,"height":9}},{"id":"f9d81eb7-702d-4103-9a57-4816f2b5fa14","block_type":"box","text":"Collette Chilton $724 None $445,000","page_number":40,"box":{"x":130,"y":241,"width":725,"height":9}},{"id":"5f9d0b06-058e-47ac-b261-2347bafa955c","block_type":"box","text":"Neil A. Cotty $727 None $467,500","page_number":40,"box":{"x":130,"y":257,"width":725,"height":9}},{"id":"7249a6df-43e3-4660-aff2-0cac0b446c48","block_type":"box","text":"Lena G. 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Urish $724 None $445,000","page_number":40,"box":{"x":130,"y":365,"width":725,"height":9}},{"id":"a628cbbb-f1ca-4a43-a19f-c8f284c5e1e4","block_type":"box","text":"Claire A. Walton","page_number":40,"box":{"x":130,"y":381,"width":92,"height":8}},{"id":"e4f9c3c1-58b8-47b3-b1d9-306a356a6693","block_type":"box","text":"7","page_number":40,"box":{"x":223,"y":381,"width":4,"height":5}},{"id":"5f2f58b0-b1b6-4110-aada-00642ffac34f","block_type":"box","text":"$747 None $490,000","page_number":40,"box":{"x":501,"y":381,"width":354,"height":9}},{"id":"72612764-f0ce-4c53-91a1-9f07416c0cd8","block_type":"box","text":"Interested Trustees","page_number":40,"box":{"x":117,"y":399,"width":114,"height":8}},{"id":"089c0f34-387e-4011-8919-c492bee6ca4e","block_type":"box","text":"Robert Fairbairn None None None","page_number":40,"box":{"x":130,"y":415,"width":710,"height":7}},{"id":"d9fea28f-4443-45e4-a440-224f932c1cdd","block_type":"box","text":"John M. Perlowski None None None","page_number":40,"box":{"x":129,"y":430,"width":711,"height":8}},{"id":"f6c47c38-6d94-42d7-8fe4-0b59e5123b6f","block_type":"box","text":"1","page_number":40,"box":{"x":128,"y":456,"width":4,"height":5}},{"id":"7c11cac5-4bcd-409d-9a74-7cd39f5f0463","block_type":"box","text":"For the number of BlackRock-advised Funds from which each Trustee receives compensation, see “Biographical Information”","page_number":40,"box":{"x":147,"y":456,"width":730,"height":9}},{"id":"ecb5770f-acdc-4517-afe8-30a1e0a64a40","block_type":"box","text":"beginning on page I-14.","page_number":40,"box":{"x":147,"y":467,"width":136,"height":9}},{"id":"a60ee90d-90a1-4cd8-b729-2556c31e3821","block_type":"box","text":"2","page_number":40,"box":{"x":128,"y":477,"width":4,"height":4}},{"id":"9252bc32-d5aa-40f6-b7a5-954100ceb8d8","block_type":"box","text":"Ms. Goldberg retired as Trustee of the Trust and Chair of the Compliance Committee effective December 31, 2024.","page_number":40,"box":{"x":147,"y":477,"width":677,"height":9}},{"id":"e283b28c-c437-4927-8fff-060080032bf3","block_type":"box","text":"3","page_number":40,"box":{"x":128,"y":487,"width":4,"height":5}},{"id":"83a61993-a499-48c6-acd3-40e281ea6322","block_type":"box","text":"Chair of the Audit Committee.","page_number":40,"box":{"x":147,"y":487,"width":172,"height":7}},{"id":"d4420b13-80f6-41e6-a62c-c9fa7c2c0294","block_type":"box","text":"4","page_number":40,"box":{"x":128,"y":498,"width":4,"height":4}},{"id":"71777ef0-a177-428b-9b64-abf7f3c1e807","block_type":"box","text":"Chair of the Governance Committee.","page_number":40,"box":{"x":147,"y":498,"width":211,"height":7}},{"id":"65614eef-0065-433d-9f93-6e66cedd0c2b","block_type":"box","text":"5","page_number":40,"box":{"x":128,"y":508,"width":4,"height":5}},{"id":"492b6516-85e1-4e4e-97cf-1aa195e7be89","block_type":"box","text":"Chair of the Performance Oversight Committee.","page_number":40,"box":{"x":147,"y":508,"width":275,"height":9}},{"id":"588d8421-dea7-4ed0-bf3b-4ab1e1c841ca","block_type":"box","text":"6","page_number":40,"box":{"x":128,"y":518,"width":4,"height":5}},{"id":"3850430f-857d-42b8-9c23-b99d82a2ec26","block_type":"box","text":"Chair of the Board and Chair of the Ad Hoc Topics Committee.","page_number":40,"box":{"x":147,"y":518,"width":362,"height":9}},{"id":"0ec6b1a1-0218-439d-9159-2037207aeaf6","block_type":"box","text":"7","page_number":40,"box":{"x":128,"y":529,"width":4,"height":4}},{"id":"1e2cb6ef-7df3-4db7-9270-fd4529ce42a1","block_type":"box","text":"Chair of the Compliance Committee.","page_number":40,"box":{"x":147,"y":529,"width":211,"height":8}},{"id":"30ba71ce-beaf-4c4c-bc37-248194bbcd2a","block_type":"box","text":"IV. Management, Advisory and Other Service Arrangements","page_number":40,"box":{"x":117,"y":550,"width":494,"height":11}},{"id":"c3952340-01b5-4654-98cb-b1129d0d43c2","block_type":"box","text":"Management Agreement","page_number":40,"box":{"x":137,"y":572,"width":190,"height":11}},{"id":"12fa6062-da1e-41d5-a08c-9d2ef35917c5","block_type":"box","text":"The Trust, on behalf of the Fund, has entered into an investment advisory agreement with BFA pursuant to","page_number":40,"box":{"x":116,"y":593,"width":752,"height":11}},{"id":"9df927bc-0651-4d37-a568-d0f053b91968","block_type":"box","text":"which BFA is entitled to receive fees for the services it provides (the “Management Agreement”).","page_number":40,"box":{"x":116,"y":608,"width":683,"height":12}},{"id":"3b9b0505-7bb1-4261-9b78-62788384f5ed","block_type":"box","text":"Pursuant to the Management Agreement, BFA may from time to time, in its sole discretion to the extent","page_number":40,"box":{"x":117,"y":628,"width":732,"height":12}},{"id":"66f7d04d-defa-490b-943d-1d61ed93470b","block_type":"box","text":"permitted by applicable law, appoint one or more sub-advisers, including, without limitation, affiliates of the","page_number":40,"box":{"x":117,"y":644,"width":757,"height":11}},{"id":"025ec05a-901e-4d0f-b18d-6afe64e282bd","block_type":"box","text":"Manager, to perform investment advisory services with respect to the Fund. In addition, the Manager may","page_number":40,"box":{"x":117,"y":659,"width":745,"height":12}},{"id":"2187a7ad-d3fa-4aff-adf4-5347f38db298","block_type":"box","text":"delegate certain of its investment advisory functions under the Management Agreement to one or more of its","page_number":40,"box":{"x":116,"y":675,"width":765,"height":11}},{"id":"c0f16ddf-056b-46b4-b3f8-535bbfefaa4a","block_type":"box","text":"affiliates to the extent permitted by applicable law. BlackRock may terminate any or all sub-advisers or such","page_number":40,"box":{"x":116,"y":690,"width":756,"height":12}},{"id":"435fa92b-e3ff-4f96-a314-e6d7e4ca74db","block_type":"box","text":"delegation arrangements in its sole discretion at any time to the extent permitted by applicable law.","page_number":40,"box":{"x":116,"y":706,"width":699,"height":11}},{"id":"0d07de97-29c2-419b-b8cd-b8669aebb43d","block_type":"box","text":"BFA has entered into a sub-advisory agreement with BlackRock International Limited (“BIL” or the “Sub","page_number":40,"box":{"x":117,"y":726,"width":726,"height":11}},{"id":"7f8a883b-61c0-43a9-bea1-14f5c7e7dc6b","block_type":"box","text":"Adviser”), pursuant to which BFA pays the Sub-Adviser for providing services to BFA with respect to that","page_number":40,"box":{"x":116,"y":742,"width":725,"height":11}},{"id":"08191bd9-4514-4a46-a7e6-9dfd1a756bdb","block_type":"box","text":"portion of the Fund for which it acts as sub-adviser a monthly fee at an annual rate equal to a percentage of","page_number":40,"box":{"x":117,"y":757,"width":757,"height":12}},{"id":"d1d17612-cd2d-4dd2-9752-95160aaf1823","block_type":"box","text":"the management fee paid to BFA under the Management Agreement.","page_number":40,"box":{"x":116,"y":773,"width":485,"height":11}},{"id":"a864b47a-e710-42f0-bb77-8d88ca35b106","block_type":"box","text":"BFA and BlackRock Advisors, LLC (“BAL”), the Fund’s administrator, have contractually agreed to waive their","page_number":40,"box":{"x":117,"y":793,"width":742,"height":11}},{"id":"894e88c1-2d30-4604-becf-bbdbd811ac02","block_type":"box","text":"management fee and administration fee, as applicable, through June 30, 2036. On July 1 of each year, the","page_number":40,"box":{"x":117,"y":808,"width":736,"height":12}},{"id":"0945b819-d00d-49c2-b36c-6e08d21de5ba","block_type":"box","text":"waiver agreement will renew automatically for an additional one year so that the agreement will have a","page_number":40,"box":{"x":116,"y":824,"width":701,"height":11}},{"id":"b23e586d-667b-4c02-82cc-3dd8af82f914","block_type":"box","text":"perpetual ten-year term. The contractual agreement may be terminated upon 90 days’ notice by a majority of","page_number":40,"box":{"x":117,"y":839,"width":749,"height":12}},{"id":"6daf876f-0357-4830-899c-9d8226ac5024","block_type":"box","text":"the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of the","page_number":40,"box":{"x":116,"y":855,"width":738,"height":11}},{"id":"eee7e895-8479-4e4d-84bb-bc2345933e90","block_type":"box","text":"Fund.","page_number":40,"box":{"x":117,"y":870,"width":42,"height":9}},{"id":"45b26911-322c-4099-9dbf-da7de5729838","block_type":"box","text":"I-18","page_number":40,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"3c73aa4c-2949-47ba-b671-84d445b5502c","block_type":"box","text":"NM1026U-6033243-40/221","page_number":40,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"c1f8a333-6a76-4ba6-bbb1-e2dd5ae5293d","block_type":"box","text":"The fees and expenses of the Independent Trustees, counsel to the Independent Trustees and the","page_number":41,"box":{"x":116,"y":80,"width":700,"height":11}},{"id":"6b8a5ded-3608-4544-aff0-8c95a7708001","block_type":"box","text":"independent registered public accounting firm that provides audit services in connection with the Fund","page_number":41,"box":{"x":117,"y":95,"width":721,"height":12}},{"id":"2ffdfb3b-bef1-48e2-b6de-2e2442179657","block_type":"box","text":"(collectively referred to as the “Independent Expenses”) are paid directly by the Fund. Each of BAL and BFA","page_number":41,"box":{"x":117,"y":111,"width":755,"height":11}},{"id":"380d062c-be4d-4a3d-98d6-789245800c2a","block_type":"box","text":"has contractually undertaken, through June 30, 2036, to reimburse or provide an offsetting credit to the","page_number":41,"box":{"x":117,"y":126,"width":735,"height":12}},{"id":"658d5270-3073-4aaf-9387-a4b0d9a3afce","block_type":"box","text":"Fund for such Independent Expenses. On July 1 of each year, the waiver agreement will renew automatically","page_number":41,"box":{"x":117,"y":142,"width":761,"height":11}},{"id":"3e0787e2-cc30-452e-bb14-5e2066a87b60","block_type":"box","text":"for an additional one year so that the agreement will have a perpetual ten-year term. Such contractual","page_number":41,"box":{"x":116,"y":157,"width":719,"height":12}},{"id":"b79900bf-91f8-4227-b181-8bbe1776fa7d","block_type":"box","text":"agreement may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Trust","page_number":41,"box":{"x":116,"y":173,"width":763,"height":11}},{"id":"7edb43ab-7f71-4292-87bb-81e634092aaa","block_type":"box","text":"or by a vote of a majority of the outstanding voting securities of the Fund.","page_number":41,"box":{"x":116,"y":188,"width":519,"height":12}},{"id":"ac5dfd19-d856-44ed-bef8-b7b6ada29637","block_type":"box","text":"The table below sets forth information about the total management fees paid by the Trust, on behalf of the","page_number":41,"box":{"x":116,"y":211,"width":756,"height":12}},{"id":"80b98d27-a31e-43bd-af37-22540e5ccf14","block_type":"box","text":"Fund, to BFA pursuant to the Management Agreement, and the amounts waived, for the periods shown.","page_number":41,"box":{"x":117,"y":227,"width":732,"height":11}},{"id":"6904d9b7-67a6-40e0-8d14-0d51befbfa32","block_type":"box","text":"Fees Paid","page_number":41,"box":{"x":690,"y":247,"width":57,"height":7}},{"id":"e0992b35-b2b0-4563-9c38-4cae8f3624d6","block_type":"box","text":"to the","page_number":41,"box":{"x":701,"y":257,"width":35,"height":7}},{"id":"9735adbd-bf88-4a13-958a-81b702b48e12","block_type":"box","text":"Manager","page_number":41,"box":{"x":693,"y":268,"width":52,"height":9}},{"id":"0bf4a14b-6738-4831-94b9-272770083b79","block_type":"box","text":"Fees Waived","page_number":41,"box":{"x":808,"y":247,"width":75,"height":7}},{"id":"1790c8d1-07c2-4a66-a18e-aa822ff3ae07","block_type":"box","text":"by the","page_number":41,"box":{"x":827,"y":257,"width":36,"height":9}},{"id":"7a6bbf64-8674-4940-a02e-04e35a51f772","block_type":"box","text":"Manager","page_number":41,"box":{"x":820,"y":268,"width":52,"height":9}},{"id":"59ea7791-5bb2-45fd-aea7-a5a56aec25f3","block_type":"box","text":"Fiscal Year Ended October 31, 2025 $533,472 $533,472","page_number":41,"box":{"x":117,"y":289,"width":771,"height":12}},{"id":"10fb7c43-e116-40a7-8b3a-5058393712e1","block_type":"box","text":"BFA and BAL reimbursed or provided a credit for Independent Expenses in the amounts shown in the table","page_number":41,"box":{"x":117,"y":313,"width":752,"height":12}},{"id":"6758f9e5-bc7b-4dbd-8e19-28925b5af4f7","block_type":"box","text":"below for the periods shown.","page_number":41,"box":{"x":117,"y":329,"width":207,"height":11}},{"id":"4f8ad23c-0e8e-46f1-bc4d-2ccb0f0ce889","block_type":"box","text":"Fiscal Year Ended October 31, 2025 $31,857","page_number":41,"box":{"x":117,"y":357,"width":771,"height":11}},{"id":"37252a36-bf98-4ab0-9336-1dbe30ac6ff4","block_type":"box","text":"Administration Arrangements","page_number":41,"box":{"x":116,"y":381,"width":216,"height":11}},{"id":"13e99863-511f-451b-a847-a425466ae456","block_type":"box","text":"The Trust has engaged BlackRock Advisors, LLC (previously defined as “BAL”) to provide certain","page_number":41,"box":{"x":116,"y":404,"width":679,"height":11}},{"id":"9954f09c-938e-4c28-8f39-b20dbbec5c0b","block_type":"box","text":"administration services to the Fund. BAL and its affiliates provide the Fund with administration services,","page_number":41,"box":{"x":116,"y":419,"width":734,"height":12}},{"id":"f6f67bb0-5a94-42db-ac18-e0136b03dae4","block_type":"box","text":"including management reporting and treasury administration services, financial reporting, legal and tax","page_number":41,"box":{"x":117,"y":435,"width":724,"height":11}},{"id":"682149d9-391e-4b8a-ab48-10852dd06d37","block_type":"box","text":"services, and supervision of the Fund’s administrative operations, preparation of proxy statements and","page_number":41,"box":{"x":116,"y":450,"width":729,"height":12}},{"id":"16bef769-9d9f-402f-b59c-0baf0aad44e8","block_type":"box","text":"shareholder reports. BAL is entitled to receive an annual administration fee of 0.15% of the average daily net","page_number":41,"box":{"x":116,"y":466,"width":771,"height":11}},{"id":"76200d70-9587-428c-bbcd-6185c92b9e3d","block_type":"box","text":"assets of the Fund for providing administrative services.","page_number":41,"box":{"x":116,"y":481,"width":398,"height":12}},{"id":"6a2050ed-0ac5-4a8a-85e9-6edd11e07402","block_type":"box","text":"The Trust and its service providers may engage third party plan administrators who provide trustee,","page_number":41,"box":{"x":116,"y":505,"width":700,"height":11}},{"id":"9bcd0060-e837-4c01-ad00-fdc76be003b1","block_type":"box","text":"administrative and recordkeeping services for certain employee benefit, profit-sharing and retirement plans","page_number":41,"box":{"x":116,"y":520,"width":754,"height":12}},{"id":"d199111d-b318-4c49-b8e3-f7333958271a","block_type":"box","text":"as agents for the Trust with respect to such plans, for the purpose of accepting orders for the purchase and","page_number":41,"box":{"x":116,"y":536,"width":763,"height":11}},{"id":"4515587b-ce29-47a2-9d85-3cb647a10c72","block_type":"box","text":"redemption of shares of the Trust.","page_number":41,"box":{"x":117,"y":551,"width":245,"height":11}},{"id":"497456b3-a493-4283-b2e1-5b39a32957b7","block_type":"box","text":"The table below sets forth information about the administration fees paid by the Trust, on behalf of the Fund,","page_number":41,"box":{"x":116,"y":574,"width":771,"height":12}},{"id":"29e2635f-2724-4e37-845a-213dcde8f9af","block_type":"box","text":"to BAL, and the amounts waived, for the periods shown.","page_number":41,"box":{"x":116,"y":590,"width":400,"height":11}},{"id":"861efa0d-4e67-4794-b291-22140c48f80f","block_type":"box","text":"Fees Paid","page_number":41,"box":{"x":682,"y":610,"width":57,"height":7}},{"id":"291317a5-f6d0-409f-9165-1986c4b597de","block_type":"box","text":"to the","page_number":41,"box":{"x":692,"y":620,"width":36,"height":7}},{"id":"c6317a8f-d291-4199-93ee-bf81b00c63a3","block_type":"box","text":"Administrator","page_number":41,"box":{"x":669,"y":631,"width":82,"height":7}},{"id":"a4634b39-a9a7-43cf-a119-c90c35422ca4","block_type":"box","text":"Fees Waived","page_number":41,"box":{"x":805,"y":610,"width":75,"height":7}},{"id":"8ca2c8e1-36e5-4a38-a837-207e334be5fd","block_type":"box","text":"by the","page_number":41,"box":{"x":824,"y":620,"width":37,"height":9}},{"id":"c55a842b-f74e-486a-aaa6-d5ca7ff17754","block_type":"box","text":"Administrator","page_number":41,"box":{"x":802,"y":631,"width":81,"height":7}},{"id":"7811e48d-26c8-4a44-85c3-0976f19a166b","block_type":"box","text":"Fiscal Year Ended October 31, 2025 $533,472 $533,472","page_number":41,"box":{"x":117,"y":653,"width":768,"height":11}},{"id":"b52d93b9-5f3a-4f11-beeb-8114e5c08aa0","block_type":"box","text":"Information Regarding the Portfolio Managers","page_number":41,"box":{"x":137,"y":682,"width":344,"height":11}},{"id":"b715d900-e9f8-4930-b703-af0c1916b79b","block_type":"box","text":"Orlando Montalvo is the portfolio manager and is primarily responsible for the day-to-day management of the","page_number":41,"box":{"x":116,"y":705,"width":760,"height":11}},{"id":"b310e782-3eea-4927-8600-6b4d4ff77a78","block_type":"box","text":"Fund.","page_number":41,"box":{"x":117,"y":721,"width":36,"height":9}},{"id":"3916b6b7-bae1-4d33-aade-3a6cb4175d5f","block_type":"box","text":"I-19","page_number":41,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"bae39e9d-e514-4b81-a518-fa1c398b9c76","block_type":"box","text":"NM1026U-6033243-41/221","page_number":41,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"0e078987-22b7-4b23-ac69-ae613c35c1e3","block_type":"box","text":"Other Funds and Accounts Managed","page_number":42,"box":{"x":137,"y":80,"width":278,"height":11}},{"id":"088a1527-45ba-46bb-9b08-e4dd519070c4","block_type":"box","text":"The following tables set forth information about the funds and accounts other than the Fund for which the","page_number":42,"box":{"x":116,"y":107,"width":746,"height":11}},{"id":"07e2c42a-c9f1-4a2f-a66a-6f270c47e086","block_type":"box","text":"portfolio manager is primarily responsible for the day-to-day portfolio management as of October 31, 2025.","page_number":42,"box":{"x":117,"y":122,"width":755,"height":12}},{"id":"ce678270-7dab-46c6-89e8-020b4ee79918","block_type":"box","text":"Number of Other Accounts Managed","page_number":42,"box":{"x":297,"y":162,"width":217,"height":9}},{"id":"d01e579c-b3c3-4007-9131-e595d0b636f9","block_type":"box","text":"and Assets by Account Type","page_number":42,"box":{"x":320,"y":172,"width":170,"height":9}},{"id":"eed53f52-ef5b-4ff9-ad9d-ca195686dd5d","block_type":"box","text":"Number of Other Accounts and","page_number":42,"box":{"x":633,"y":151,"width":184,"height":8}},{"id":"6197c219-047a-4dfc-bfea-aa4903960e7e","block_type":"box","text":"Assets for Which Advisory Fee is","page_number":42,"box":{"x":626,"y":162,"width":197,"height":9}},{"id":"fd060311-060b-49cc-a0cd-48e936ca97c8","block_type":"box","text":"Performance-Based","page_number":42,"box":{"x":667,"y":172,"width":116,"height":7}},{"id":"6e8c54bc-218d-4b2d-b0c1-00721f55602b","block_type":"box","text":"Name of Portfolio","page_number":42,"box":{"x":116,"y":207,"width":104,"height":7}},{"id":"ed645e01-f588-4301-be04-20bdc31642db","block_type":"box","text":"Manager","page_number":42,"box":{"x":117,"y":217,"width":52,"height":9}},{"id":"39a1142f-7a63-45dd-8504-17a6b17b50b6","block_type":"box","text":"Other","page_number":42,"box":{"x":283,"y":186,"width":32,"height":8}},{"id":"b129029a-989c-431e-8b5a-3824b2b7e095","block_type":"box","text":"Registered","page_number":42,"box":{"x":267,"y":197,"width":64,"height":9}},{"id":"b94e26d8-d539-47a2-90c8-d72d260de884","block_type":"box","text":"Investment","page_number":42,"box":{"x":266,"y":207,"width":66,"height":7}},{"id":"cd7940eb-838b-4638-b4de-1a465451872e","block_type":"box","text":"Companies","page_number":42,"box":{"x":266,"y":217,"width":66,"height":9}},{"id":"cc154aab-fbf0-4057-b550-d47a45ad4e35","block_type":"box","text":"Other Pooled","page_number":42,"box":{"x":361,"y":197,"width":77,"height":7}},{"id":"0d87fa01-f509-4062-a514-0cf6be9e05fb","block_type":"box","text":"Investment","page_number":42,"box":{"x":366,"y":207,"width":67,"height":7}},{"id":"816b142e-843d-499a-89b8-bd160b96e22c","block_type":"box","text":"Vehicles","page_number":42,"box":{"x":374,"y":217,"width":50,"height":8}},{"id":"e79d9bb1-cf6b-40c5-acd9-43afbd6e3aeb","block_type":"box","text":"Other","page_number":42,"box":{"x":490,"y":207,"width":32,"height":7}},{"id":"1d3836ca-904b-4600-8c89-40d8daaa0ba5","block_type":"box","text":"Accounts","page_number":42,"box":{"x":477,"y":217,"width":57,"height":8}},{"id":"3485cda1-5372-4af4-aa23-ec57e392819f","block_type":"box","text":"Other","page_number":42,"box":{"x":596,"y":186,"width":33,"height":8}},{"id":"dbfb1f4b-1d4e-4fd7-bb6e-86c6f3bc31d9","block_type":"box","text":"Registered","page_number":42,"box":{"x":580,"y":197,"width":64,"height":9}},{"id":"c0d63c58-20df-4732-84da-3cc165598b60","block_type":"box","text":"Investment","page_number":42,"box":{"x":579,"y":207,"width":67,"height":7}},{"id":"a4d2825f-77d9-4e15-afbc-45ccdbbfc0dd","block_type":"box","text":"Companies","page_number":42,"box":{"x":579,"y":217,"width":66,"height":9}},{"id":"9783ece9-28cf-41f8-ba96-9f1ae21137c4","block_type":"box","text":"Other Pooled","page_number":42,"box":{"x":680,"y":197,"width":77,"height":7}},{"id":"e4e4e15e-ba64-411e-be22-d94ec5fd1c97","block_type":"box","text":"Investment","page_number":42,"box":{"x":686,"y":207,"width":66,"height":7}},{"id":"3ab124dc-ef62-4006-b4ca-7e578867aeb8","block_type":"box","text":"Vehicles","page_number":42,"box":{"x":694,"y":217,"width":50,"height":8}},{"id":"0c2d793c-a2f7-40e8-8546-380882acc151","block_type":"box","text":"Other","page_number":42,"box":{"x":815,"y":207,"width":33,"height":7}},{"id":"e35a613b-0f8d-4d54-80eb-9f41631f190d","block_type":"box","text":"Accounts","page_number":42,"box":{"x":803,"y":217,"width":56,"height":8}},{"id":"1211de66-59a5-420e-a309-78a6f02055be","block_type":"box","text":"Orlando Montalvo 59 25 20 0 0 0","page_number":42,"box":{"x":116,"y":237,"width":719,"height":8}},{"id":"3c1c7934-b0fe-4b1c-9670-64f2e57c0edc","block_type":"box","text":"$145.9 Billion $3.42 Billion $2.11 Billion $0 $0 $0","page_number":42,"box":{"x":252,"y":251,"width":588,"height":9}},{"id":"39f06b26-94c3-44f6-93ba-65e4efa85559","block_type":"box","text":"Portfolio Manager Compensation Overview","page_number":42,"box":{"x":150,"y":284,"width":325,"height":11}},{"id":"8da501fc-7e77-4aa2-b49c-451b4619551e","block_type":"box","text":"The discussion below describes the portfolio manager’s compensation as of October 31, 2025.","page_number":42,"box":{"x":116,"y":308,"width":679,"height":12}},{"id":"361917ad-84e5-4f2e-afb0-011d45d575ce","block_type":"box","text":"BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career","page_number":42,"box":{"x":117,"y":341,"width":765,"height":11}},{"id":"d8466656-c379-4fe4-98cd-53ebae5b8369","block_type":"box","text":"path emphasis at all levels reflect the value senior management places on key resources. Compensation","page_number":42,"box":{"x":117,"y":356,"width":743,"height":12}},{"id":"84c63f50-f2db-4eea-8a25-9b2d27253d9b","block_type":"box","text":"may include a variety of components and may vary from year to year based on a number of factors. The","page_number":42,"box":{"x":117,"y":372,"width":730,"height":11}},{"id":"79ee9b3f-13a0-46f4-abe7-a50f6eaa4778","block_type":"box","text":"principal components of compensation include a base salary, a performance-based discretionary bonus,","page_number":42,"box":{"x":117,"y":387,"width":736,"height":12}},{"id":"6c890879-a605-41df-b6fc-d9912e088504","block_type":"box","text":"participation in various benefits programs and one or more of the incentive compensation programs","page_number":42,"box":{"x":117,"y":403,"width":704,"height":11}},{"id":"eaa7f4d8-f1c8-4dc7-b867-e415f9ad86da","block_type":"box","text":"established by BlackRock.","page_number":42,"box":{"x":116,"y":418,"width":189,"height":12}},{"id":"2c7b7d5c-b8fe-41c1-b7f6-1bc1ef06fa82","block_type":"box","text":"Base Compensation","page_number":42,"box":{"x":117,"y":442,"width":143,"height":12}},{"id":"b8fdfe84-9593-41d6-9103-35aa40558552","block_type":"box","text":". Generally, portfolio managers receive base compensation based on their position with","page_number":42,"box":{"x":262,"y":442,"width":618,"height":12}},{"id":"8efa400b-f3a2-43c8-9e0f-41cc124f76b4","block_type":"box","text":"the firm.","page_number":42,"box":{"x":116,"y":458,"width":64,"height":9}},{"id":"31f177d4-ca1d-4bf2-8ed1-9726ecfde17b","block_type":"box","text":"Discretionary Incentive Compensation","page_number":42,"box":{"x":117,"y":488,"width":291,"height":11}},{"id":"ddff4250-f709-4fbf-aaf0-1b3aa3c3e956","block_type":"box","text":"Discretionary incentive compensation is a function of several components: the performance of BlackRock,","page_number":42,"box":{"x":117,"y":512,"width":749,"height":11}},{"id":"e8e081ad-555b-4300-99a5-89fe6906337d","block_type":"box","text":"Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance,","page_number":42,"box":{"x":117,"y":527,"width":721,"height":12}},{"id":"aa7a2037-20fe-4998-80fa-6a741f954fd3","block_type":"box","text":"including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio","page_number":42,"box":{"x":117,"y":543,"width":722,"height":11}},{"id":"d8cb81f9-e2af-438b-b549-2054c43c2258","block_type":"box","text":"manager relative to predetermined benchmarks, and the individual’s performance and contribution to the","page_number":42,"box":{"x":117,"y":558,"width":742,"height":12}},{"id":"d4611ab1-25d8-464e-8606-8b18017f542a","block_type":"box","text":"overall performance of these portfolios and BlackRock. In most cases, these benchmarks are the same as","page_number":42,"box":{"x":116,"y":574,"width":756,"height":11}},{"id":"52e7a9f6-7e34-427b-9c73-b59798c04fcd","block_type":"box","text":"the benchmark or benchmarks against which the performance of the Funds or other accounts managed by","page_number":42,"box":{"x":116,"y":589,"width":752,"height":12}},{"id":"1a718d42-0bbd-4a7b-a17c-015e798316ff","block_type":"box","text":"the portfolio managers are measured. Among other things, BlackRock’s Chief Investment Officers make a","page_number":42,"box":{"x":116,"y":605,"width":748,"height":11}},{"id":"fd3bf2b8-f001-4ba6-8909-e08527bb1ff7","block_type":"box","text":"subjective determination with respect to each portfolio manager’s compensation based on the performance","page_number":42,"box":{"x":116,"y":620,"width":761,"height":12}},{"id":"3a1b4dba-ea81-4a07-9a02-c2e842f4ddd8","block_type":"box","text":"of the Funds and other accounts managed by each portfolio manager relative to the various benchmarks.","page_number":42,"box":{"x":116,"y":636,"width":743,"height":11}},{"id":"18fe344c-4451-4ce9-8d9f-f1f8db7fa18f","block_type":"box","text":"Performance of fixed income and multi-asset class funds is measured on a pre-tax and/or after-tax basis","page_number":42,"box":{"x":117,"y":651,"width":740,"height":12}},{"id":"7c0e308c-279a-463d-9f81-d616384fd44e","block_type":"box","text":"over various time periods including 1-, 3- and 5- year periods, as applicable. Performance of index funds is","page_number":42,"box":{"x":116,"y":667,"width":745,"height":11}},{"id":"ef0ae857-3572-4bda-913c-9739794af94c","block_type":"box","text":"based on the performance of such funds relative to pre-determined tolerance bands around a benchmark, as","page_number":42,"box":{"x":117,"y":682,"width":764,"height":11}},{"id":"7300aaff-d80d-45d1-88e9-aa0c1fd805c5","block_type":"box","text":"applicable. The performance of Mr. Montalvo is not measured against a specific benchmark.","page_number":42,"box":{"x":116,"y":698,"width":648,"height":11}},{"id":"3a601927-fded-40d0-a6e0-3c6ae9ad4146","block_type":"box","text":"Distribution of Discretionary Incentive Compensation.","page_number":42,"box":{"x":117,"y":722,"width":384,"height":11}},{"id":"768a1fb1-8046-4bb4-9407-04f5c2756ff3","block_type":"box","text":"Discretionary incentive compensation is distributed","page_number":42,"box":{"x":508,"y":722,"width":356,"height":11}},{"id":"1e8023e1-0ea9-4c68-9d62-fd51ed38fb14","block_type":"box","text":"to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/or deferred cash","page_number":42,"box":{"x":116,"y":737,"width":766,"height":12}},{"id":"ce58feb9-2679-48d7-8340-0b803b885095","block_type":"box","text":"awards that notionally track the return of certain BlackRock investment products.","page_number":42,"box":{"x":116,"y":753,"width":567,"height":11}},{"id":"58440604-37c4-4427-89c3-912b33404ea6","block_type":"box","text":"Portfolio managers receive their annual discretionary incentive compensation in the form of cash. Portfolio","page_number":42,"box":{"x":117,"y":777,"width":743,"height":12}},{"id":"75f77f39-67cb-40cc-ac27-5be0096ef165","block_type":"box","text":"managers whose total compensation is above a specified threshold also receive deferred BlackRock, Inc.","page_number":42,"box":{"x":117,"y":793,"width":739,"height":11}},{"id":"6ed2124e-f712-4cf8-933f-a6485263dce8","block_type":"box","text":"stock awards annually as part of their discretionary incentive compensation. Paying a portion of discretionary","page_number":42,"box":{"x":116,"y":808,"width":763,"height":12}},{"id":"5e2d3364-1643-4b6a-91ea-19661d19d382","block_type":"box","text":"incentive compensation in the form of deferred BlackRock, Inc. stock puts compensation earned by a","page_number":42,"box":{"x":117,"y":824,"width":710,"height":11}},{"id":"7d0ec710-423f-4dab-b097-3fdd9e9daeb1","block_type":"box","text":"portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its","page_number":42,"box":{"x":117,"y":839,"width":697,"height":12}},{"id":"b56416eb-bd29-4e63-b917-01824d216257","block_type":"box","text":"performance over future periods. In some cases, additional deferred BlackRock, Inc. stock may be granted","page_number":42,"box":{"x":117,"y":855,"width":753,"height":11}},{"id":"47ed7af2-67cd-498f-88cb-a0273cb0e0d1","block_type":"box","text":"to certain key employees as part of a long-term incentive award to aid in retention, align interests with","page_number":42,"box":{"x":116,"y":870,"width":721,"height":12}},{"id":"4a3a7129-7c52-4589-a512-1d885e270336","block_type":"box","text":"I-20","page_number":42,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"3f2a35eb-32fc-46a9-9aca-2169567755d4","block_type":"box","text":"NM1026U-6033243-42/221","page_number":42,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"fbc33594-1efa-42fc-8b2a-0b2327338430","block_type":"box","text":"long-term shareholders and motivate performance. Deferred BlackRock, Inc. stock awards are generally","page_number":43,"box":{"x":117,"y":80,"width":730,"height":11}},{"id":"0e501261-87fb-496d-8243-36624fabdd53","block_type":"box","text":"granted in the form of BlackRock, Inc. restricted stock units that vest pursuant to the terms of the applicable","page_number":43,"box":{"x":116,"y":95,"width":769,"height":12}},{"id":"32f1b814-6f32-41c5-914b-7d1deec4c4e1","block_type":"box","text":"plan and, once vested, settle in BlackRock, Inc. common stock. The portfolio manager of this Fund have","page_number":43,"box":{"x":117,"y":111,"width":736,"height":11}},{"id":"e4260bd5-7981-4e9a-b853-3098235885e2","block_type":"box","text":"deferred BlackRock, Inc. stock awards.","page_number":43,"box":{"x":116,"y":126,"width":278,"height":11}},{"id":"f48f05bc-2f47-4635-96af-08959072218b","block_type":"box","text":"For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed in","page_number":43,"box":{"x":117,"y":149,"width":745,"height":12}},{"id":"ef5212a1-2386-4d53-90bd-d8524d46a8dd","block_type":"box","text":"the form of deferred cash awards that notionally track the returns of select BlackRock investment products","page_number":43,"box":{"x":116,"y":165,"width":756,"height":11}},{"id":"c519eb68-5320-4f9d-9ce5-e151ec81c88d","block_type":"box","text":"they manage, which provides direct alignment of portfolio manager discretionary incentive compensation with","page_number":43,"box":{"x":116,"y":180,"width":771,"height":12}},{"id":"4d0bf559-5827-4b71-a2ee-86eee26185d8","block_type":"box","text":"investment product results. Deferred cash awards vest ratably over a number of years and, once vested,","page_number":43,"box":{"x":117,"y":196,"width":738,"height":11}},{"id":"66e1a09e-5621-4b92-8a39-ce7b3034f411","block_type":"box","text":"settle in the form of cash. Only portfolio managers who manage specified products and whose total","page_number":43,"box":{"x":116,"y":211,"width":704,"height":12}},{"id":"c3055856-a3f0-4f3b-9fe3-a88047d25e18","block_type":"box","text":"compensation is above a specified threshold are eligible to participate in the deferred cash award program.","page_number":43,"box":{"x":116,"y":227,"width":759,"height":11}},{"id":"f458369f-7263-4d2e-ac41-cea425db199f","block_type":"box","text":"Other Compensation Benefits","page_number":43,"box":{"x":116,"y":250,"width":212,"height":11}},{"id":"8d4794db-5048-427c-a712-4dc8b7697724","block_type":"box","text":". In addition to base salary and discretionary incentive compensation, portfolio","page_number":43,"box":{"x":330,"y":250,"width":554,"height":12}},{"id":"4082607b-eeaf-4367-ba06-745663ee29dc","block_type":"box","text":"managers may be eligible to receive or participate in one or more of the following:","page_number":43,"box":{"x":117,"y":266,"width":577,"height":11}},{"id":"a4fd67d1-d8f8-4a7d-9368-2c331ac4119c","block_type":"box","text":"Incentive Savings Plans","page_number":43,"box":{"x":117,"y":289,"width":165,"height":11}},{"id":"a12e1213-b960-4d37-a859-c87b387335ab","block_type":"box","text":"s — BlackRock, Inc. has created a variety of incentive savings plans in which","page_number":43,"box":{"x":281,"y":289,"width":538,"height":11}},{"id":"82310cbe-f079-4c60-889f-cd4302a79a96","block_type":"box","text":"BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings","page_number":43,"box":{"x":117,"y":304,"width":759,"height":12}},{"id":"1712a498-d1ed-4756-8fc7-df368ad45b70","block_type":"box","text":"Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution","page_number":43,"box":{"x":117,"y":320,"width":683,"height":11}},{"id":"f0b12263-c6fc-4cb0-9ab7-b7c613ef6274","block_type":"box","text":"components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to","page_number":43,"box":{"x":116,"y":335,"width":760,"height":12}},{"id":"7c384f94-44c3-4ac9-81cf-88102b655971","block_type":"box","text":"the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible","page_number":43,"box":{"x":116,"y":350,"width":711,"height":12}},{"id":"483043d8-4b46-4137-9d98-37b80767cb42","block_type":"box","text":"compensation up to the Internal Revenue Service limit ($350,000 for 2025). The RSP offers a range of","page_number":43,"box":{"x":116,"y":366,"width":730,"height":12}},{"id":"cb748741-2479-4a2b-8f04-afbce051e597","block_type":"box","text":"investment options, including registered investment companies and collective investment funds managed by","page_number":43,"box":{"x":117,"y":382,"width":767,"height":11}},{"id":"68d757c0-5c49-417c-b0e4-22ce476b85d5","block_type":"box","text":"the firm. BlackRock contributions follow the investment direction set by participants for their own","page_number":43,"box":{"x":116,"y":397,"width":684,"height":12}},{"id":"e7ed0596-adb4-49f3-a4fb-3957009b04b0","block_type":"box","text":"contributions or, absent participant investment direction, are invested into a target date fund that","page_number":43,"box":{"x":116,"y":413,"width":689,"height":11}},{"id":"709c3020-0776-4ccb-a17e-9e2d137a3f8f","block_type":"box","text":"corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for","page_number":43,"box":{"x":116,"y":428,"width":715,"height":12}},{"id":"a722aa40-82cf-47a7-a7f8-24ebffbf2aa2","block_type":"box","text":"investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the","page_number":43,"box":{"x":117,"y":444,"width":717,"height":9}},{"id":"4db29275-bcb1-4dc2-8ed9-c474c7affe9f","block_type":"box","text":"purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock","page_number":43,"box":{"x":117,"y":459,"width":770,"height":12}},{"id":"77cf70e3-286c-4a5e-a5ae-c6a2573b25d6","block_type":"box","text":"or a dollar value of $25,000 based on its fair market value on the purchase date. All of the eligible portfolio","page_number":43,"box":{"x":116,"y":474,"width":761,"height":12}},{"id":"031a31cc-9c87-4900-a52a-c3fed2f06952","block_type":"box","text":"managers are eligible to participate in these plans.","page_number":43,"box":{"x":117,"y":491,"width":362,"height":11}},{"id":"5381433d-4189-4121-ac25-39335f9e42cf","block_type":"box","text":"Portfolio Manager Beneficial Holdings","page_number":43,"box":{"x":137,"y":519,"width":289,"height":11}},{"id":"be15d72e-d09f-4b40-97fd-8c9ea5e5830c","block_type":"box","text":"As of October 31, 2025, the Portfolio Manager did not beneficially own shares of the Fund.","page_number":43,"box":{"x":116,"y":545,"width":644,"height":11}},{"id":"d78b8859-5023-461b-901e-eec6371f260b","block_type":"box","text":"Portfolio Manager Potential Material Conflicts of Interest","page_number":43,"box":{"x":137,"y":573,"width":436,"height":11}},{"id":"1bc32271-0775-48f6-b61d-e5cf0eece98f","block_type":"box","text":"BlackRock has built a professional working environment, firm-wide compliance culture and compliance","page_number":43,"box":{"x":117,"y":599,"width":721,"height":11}},{"id":"1e23cab2-a4c3-400b-a8d0-74ce01365512","block_type":"box","text":"procedures and systems designed to protect against potential incentives that may favor one account over","page_number":43,"box":{"x":117,"y":615,"width":747,"height":11}},{"id":"b9a77c60-72fa-456f-847e-0f0ca4c82845","block_type":"box","text":"another. BlackRock has adopted policies and procedures that address the allocation of investment","page_number":43,"box":{"x":116,"y":630,"width":701,"height":11}},{"id":"8a32f463-3d25-4473-9d8d-9818e9c7e359","block_type":"box","text":"opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts","page_number":43,"box":{"x":116,"y":646,"width":771,"height":11}},{"id":"e79c346d-d200-4cc0-abd3-94147248a4e7","block_type":"box","text":"of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless,","page_number":43,"box":{"x":116,"y":661,"width":761,"height":12}},{"id":"94414686-a189-45b4-ade1-5a79339b0c4e","block_type":"box","text":"BlackRock furnishes investment management and advisory services to numerous clients in addition to the","page_number":43,"box":{"x":117,"y":677,"width":745,"height":11}},{"id":"af6aada5-4dcd-4d21-ae59-7a954f77c966","block_type":"box","text":"Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other","page_number":43,"box":{"x":117,"y":692,"width":722,"height":11}},{"id":"7083ceac-0fb6-4759-a273-c801abf925fb","block_type":"box","text":"clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to","page_number":43,"box":{"x":116,"y":708,"width":741,"height":11}},{"id":"6010ffc6-cf52-480c-9a9d-a737b650b4ea","block_type":"box","text":"BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may","page_number":43,"box":{"x":117,"y":723,"width":746,"height":12}},{"id":"ae2584b9-3aab-4bcc-a33b-a971d35718a7","block_type":"box","text":"be the same as or different from those made to the Fund. In addition, BlackRock, its affiliates and significant","page_number":43,"box":{"x":117,"y":739,"width":766,"height":11}},{"id":"e10f2480-0979-4eb2-bac0-f172720b3f20","block_type":"box","text":"shareholders and any officer, director, shareholder or employee may or may not have an interest in the","page_number":43,"box":{"x":116,"y":754,"width":722,"height":11}},{"id":"475db3fc-842d-47c0-8353-abaad563876f","block_type":"box","text":"securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, or any of its affiliates","page_number":43,"box":{"x":116,"y":770,"width":751,"height":11}},{"id":"3b183f74-d7bf-4e56-afeb-c1aa094cd200","block_type":"box","text":"or significant shareholders, or any officer, director, shareholder, employee or any member of their families","page_number":43,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"84d79fc9-f132-4f93-a380-fb5cdbdd6c87","block_type":"box","text":"may take different actions than those recommended to the Fund by BlackRock with respect to the same","page_number":43,"box":{"x":117,"y":801,"width":730,"height":11}},{"id":"fb359bac-1de2-441d-a407-bd9aa6e87c3e","block_type":"box","text":"securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of","page_number":43,"box":{"x":116,"y":816,"width":748,"height":12}},{"id":"21877a5b-e15c-44fe-b5fc-cb4f22735dab","block_type":"box","text":"companies of which any of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or","page_number":43,"box":{"x":116,"y":832,"width":744,"height":11}},{"id":"6334046f-1c14-4af8-afb8-ae39ef3e511e","block_type":"box","text":"employees are directors or officers, or companies as to which BlackRock or any of its affiliates or significant","page_number":43,"box":{"x":116,"y":847,"width":764,"height":12}},{"id":"a7af16b6-233c-4de9-9ff0-d4a9f3cd1c07","block_type":"box","text":"shareholders or the officers, directors and employees of any of them has any substantial economic interest","page_number":43,"box":{"x":116,"y":863,"width":761,"height":11}},{"id":"47052f05-ea41-476e-9f8d-51c4f8025721","block_type":"box","text":"I-21","page_number":43,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"df6f8b3d-27bf-4d1b-8006-34ea9260e66b","block_type":"box","text":"NM1026U-6033243-43/221","page_number":43,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"c2eb5c38-2510-4335-8732-35cd84e7903e","block_type":"box","text":"or possesses material non-public information. Certain portfolio managers also may manage accounts whose","page_number":44,"box":{"x":116,"y":80,"width":767,"height":11}},{"id":"204d1868-952d-4dde-b248-ebf0835b16bb","block_type":"box","text":"investment strategies may at times be opposed to the strategy utilized for the Fund. It should also be noted","page_number":44,"box":{"x":117,"y":95,"width":762,"height":12}},{"id":"d776c64e-343b-45d6-ab99-486def3eccb1","block_type":"box","text":"that the portfolio manager may be managing hedge fund and/or long only accounts, or may be part of a","page_number":44,"box":{"x":116,"y":111,"width":732,"height":11}},{"id":"15242c52-4efd-4fcc-8837-f8e4715f8a1b","block_type":"box","text":"team managing hedge fund and/or long only accounts, subject to incentive fees. The portfolio manager may","page_number":44,"box":{"x":116,"y":126,"width":764,"height":12}},{"id":"02303e97-ab1f-4995-b875-783c0a3296d9","block_type":"box","text":"therefore be entitled to receive a portion of any incentive fees earned on such accounts. Currently, the","page_number":44,"box":{"x":116,"y":142,"width":724,"height":11}},{"id":"8e441a8f-899d-4e48-8f57-5bd403ae91b2","block_type":"box","text":"portfolio manager of this fund is not entitled to receive a portion of incentive fees of other accounts.","page_number":44,"box":{"x":117,"y":157,"width":706,"height":12}},{"id":"3d2d8e93-eb9b-40aa-8c85-866bd26b6990","block_type":"box","text":"As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When","page_number":44,"box":{"x":116,"y":180,"width":704,"height":12}},{"id":"b09b20df-e24a-44f8-824b-c31a22bab05c","block_type":"box","text":"BlackRock purchases or sells securities for more than one account, the trades must be allocated in a","page_number":44,"box":{"x":117,"y":196,"width":719,"height":11}},{"id":"aaaebe9b-d204-4710-882d-8ceff2a45eb7","block_type":"box","text":"manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and","page_number":44,"box":{"x":117,"y":211,"width":709,"height":12}},{"id":"35b54f60-9c01-4a9c-86bf-45edc54ca452","block_type":"box","text":"equitable manner among client accounts, with no account receiving preferential treatment. To this end,","page_number":44,"box":{"x":116,"y":227,"width":729,"height":11}},{"id":"3c59fb5e-c89a-4f1b-b4e0-0f23bb5470a9","block_type":"box","text":"BlackRock has adopted policies that are intended to ensure reasonable efficiency in client transactions and","page_number":44,"box":{"x":117,"y":242,"width":761,"height":12}},{"id":"a28a8033-2f4a-4999-bb8f-f8dcb2286ad5","block_type":"box","text":"provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the","page_number":44,"box":{"x":117,"y":258,"width":744,"height":11}},{"id":"fdf99a0f-135a-4aad-b50f-b02d6c1584a3","block_type":"box","text":"particular investment discipline and client base, as appropriate.","page_number":44,"box":{"x":117,"y":274,"width":451,"height":11}},{"id":"061e8082-3af2-4921-9903-4af9e459211b","block_type":"box","text":"Accounting Services","page_number":44,"box":{"x":136,"y":302,"width":159,"height":11}},{"id":"249d1ade-289e-4514-aa1b-d2b8b59ec0cd","block_type":"box","text":"State Street Bank & Trust Company (“State Street”) serves as the accounting services provider for the Fund.","page_number":44,"box":{"x":116,"y":328,"width":769,"height":11}},{"id":"bcb44eba-8f16-424a-9b04-addc34fc57c9","block_type":"box","text":"State Street maintains the books of account and other financial records (other than those maintained by the","page_number":44,"box":{"x":116,"y":343,"width":767,"height":12}},{"id":"a8ef32c4-c54e-46f0-b2bc-74ea4d14a324","block_type":"box","text":"Fund’s custodian); records general ledger entries; calculates daily net income; reconciles activity to the trial","page_number":44,"box":{"x":117,"y":359,"width":759,"height":11}},{"id":"14e3577e-3cda-4527-8d3c-028e36b69afa","block_type":"box","text":"balance; calculates and publishes daily net asset value; prepares account balances; and provides such","page_number":44,"box":{"x":117,"y":374,"width":731,"height":12}},{"id":"6ecaaba0-059c-4ae7-8aa8-fda98befcddd","block_type":"box","text":"other accounting services as may be required. In connection with its accounting services, State Street also","page_number":44,"box":{"x":116,"y":390,"width":756,"height":11}},{"id":"4eb4c6ca-c9df-45ee-b5f3-d96d58eead8e","block_type":"box","text":"provides certain administration services.","page_number":44,"box":{"x":117,"y":405,"width":288,"height":11}},{"id":"81147942-d1fe-4441-815b-fdffb4dea935","block_type":"box","text":"Custodian","page_number":44,"box":{"x":136,"y":434,"width":81,"height":9}},{"id":"de09a5b9-e0fe-4138-ac55-27511d50cfe7","block_type":"box","text":"State Street Bank & Trust Company (previously defined as “State Street”), which has its principal offices at","page_number":44,"box":{"x":116,"y":459,"width":759,"height":12}},{"id":"180f8b38-f191-4145-a352-2703d95034d5","block_type":"box","text":"One Congress Street, Suite 1, Boston, Massachusetts 02114-2016, serves as the custodian for the Fund","page_number":44,"box":{"x":116,"y":475,"width":753,"height":11}},{"id":"39e29149-00b1-47dd-97c5-a0e6724aed4a","block_type":"box","text":"(the “Custodian”). The Custodian, among other responsibilities, maintains a custody account or accounts in","page_number":44,"box":{"x":117,"y":491,"width":762,"height":11}},{"id":"367c8dc5-69f7-42c6-a5d0-adde30bd78d3","block_type":"box","text":"the name of the Fund, receives and delivers all assets for the Fund upon purchase and upon sale or","page_number":44,"box":{"x":116,"y":506,"width":709,"height":11}},{"id":"4ff5408e-4242-4c13-bea2-5e1962e9a52c","block_type":"box","text":"maturity, and collects and receives all income and other payments and distributions on account of the","page_number":44,"box":{"x":117,"y":522,"width":721,"height":11}},{"id":"09d3e178-6337-4c60-8463-c84b63f07c01","block_type":"box","text":"assets of the Fund.","page_number":44,"box":{"x":116,"y":537,"width":141,"height":9}},{"id":"6d378859-4d6e-4585-a0a2-83cb691be086","block_type":"box","text":"Transfer Agent","page_number":44,"box":{"x":136,"y":565,"width":116,"height":12}},{"id":"f8c22ef4-3138-4453-8e10-740c6d0ff606","block_type":"box","text":"BNY Mellon Investment Servicing (US) Inc. (“BNY Mellon”), which has its principal place of business at 301","page_number":44,"box":{"x":117,"y":591,"width":759,"height":12}},{"id":"ba73ec05-8648-4b26-98ac-e9804a433c20","block_type":"box","text":"Bellevue Parkway, Wilmington, Delaware 19809, serves as the transfer and dividend disbursing agent for the","page_number":44,"box":{"x":117,"y":607,"width":770,"height":11}},{"id":"dad85ce2-ddd0-43e1-8dff-6beb66708713","block_type":"box","text":"Fund.","page_number":44,"box":{"x":117,"y":622,"width":42,"height":9}},{"id":"18b40857-bb17-4340-8bb8-2d328b9c0070","block_type":"box","text":"Organization and Management of Wholly-Owned Subsidiary","page_number":44,"box":{"x":136,"y":651,"width":447,"height":11}},{"id":"25ef81a4-e6d1-447d-b407-98fdac16e1da","block_type":"box","text":"The Fund will seek to gain exposure to commodity markets by investing up to 25% of its total assets in the","page_number":44,"box":{"x":116,"y":677,"width":749,"height":11}},{"id":"4d2d3009-d21a-437a-ba97-56556e9dadb2","block_type":"box","text":"Subsidiary. The Subsidiary invests primarily in commodity-related instruments.","page_number":44,"box":{"x":116,"y":692,"width":546,"height":11}},{"id":"8c3d2c1c-39d0-41eb-8331-dde08667b6c7","block_type":"box","text":"The Subsidiary is a company organized under the laws of the Cayman Islands, whose registered office is","page_number":44,"box":{"x":116,"y":715,"width":733,"height":12}},{"id":"86f4182e-33be-4298-9a92-b5996cd4c6a8","block_type":"box","text":"located at the offices of Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman","page_number":44,"box":{"x":117,"y":731,"width":740,"height":11}},{"id":"cfd36463-8418-41d4-a229-da993ff8a049","block_type":"box","text":"KYI-1104, Cayman Islands. The Subsidiary’s affairs are overseen by a board of directors, which is comprised","page_number":44,"box":{"x":117,"y":746,"width":763,"height":12}},{"id":"1669f8c6-6aae-4354-b093-9352c00819cf","block_type":"box","text":"of John M. Perlowski and Trent Walker.","page_number":44,"box":{"x":116,"y":762,"width":272,"height":9}},{"id":"72e2795f-a3dd-4227-89ef-25f08fdd9c03","block_type":"box","text":"The Manager provides investment management and administrative services to the Subsidiary. The Manager","page_number":44,"box":{"x":116,"y":785,"width":758,"height":12}},{"id":"e8e25f3e-1842-467a-b167-2a7e38655af1","block_type":"box","text":"does not receive separate compensation from the Subsidiary for providing it with investment advisory or","page_number":44,"box":{"x":116,"y":801,"width":729,"height":11}},{"id":"efafa3e4-2d9e-4dc5-9cff-d20fddc137c1","block_type":"box","text":"administrative services. However, the Fund pays the Manager based on the Fund’s assets, including the","page_number":44,"box":{"x":116,"y":816,"width":733,"height":12}},{"id":"6ffa66e4-a5d4-47b4-b163-be28a74988b7","block_type":"box","text":"assets invested in the Subsidiary. The Subsidiary entered into contracts for the provision of custody and","page_number":44,"box":{"x":116,"y":832,"width":737,"height":11}},{"id":"d69cccb9-580e-4878-b5c2-3b371669237a","block_type":"box","text":"audit services with the same service providers that provide those services to the Fund.","page_number":44,"box":{"x":116,"y":847,"width":614,"height":11}},{"id":"b187cae8-1278-4405-8689-929b07d09766","block_type":"box","text":"I-22","page_number":44,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"d7c318e5-acbc-4bea-bff0-3c8c5efe354c","block_type":"box","text":"NM1026U-6033243-44/221","page_number":44,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ce6244e2-7404-4d01-9956-b7431fca44a0","block_type":"box","text":"The Subsidiary is managed pursuant to compliance policies and procedures that are the same, in all","page_number":45,"box":{"x":116,"y":80,"width":711,"height":11}},{"id":"ecba4d06-2d2d-460f-b0b3-117186cb60dc","block_type":"box","text":"material respects, as the policies and procedures adopted by the Fund. As a result, the Manager, in","page_number":45,"box":{"x":117,"y":95,"width":707,"height":12}},{"id":"f0653e34-9673-4bac-bcd2-bdbb77ce4738","block_type":"box","text":"managing the Subsidiary’s portfolio, is subject to the same investment policies and restrictions that apply to","page_number":45,"box":{"x":117,"y":111,"width":766,"height":11}},{"id":"94549b5e-3f6b-440b-8854-fa3533dcb150","block_type":"box","text":"the management of the Fund, and, in particular, to the requirements relating to portfolio leverage, liquidity,","page_number":45,"box":{"x":116,"y":126,"width":753,"height":12}},{"id":"8e4c5709-5895-46b9-96c9-fb5e10ec9f0d","block_type":"box","text":"brokerage, and the timing and method of the valuation of the Subsidiary’s portfolio investments and shares","page_number":45,"box":{"x":117,"y":142,"width":760,"height":11}},{"id":"544282d9-59d1-49cc-bc42-7436ab379de9","block_type":"box","text":"of the Subsidiary. These policies and restrictions are described elsewhere in detail in this SAI. The Fund and","page_number":45,"box":{"x":116,"y":157,"width":766,"height":11}},{"id":"9b4e9b23-a1da-4251-bbd8-b113e8d58f26","block_type":"box","text":"the Subsidiary test for compliance with certain investment restrictions on a consolidated basis.","page_number":45,"box":{"x":116,"y":173,"width":674,"height":11}},{"id":"ed8b01af-c178-4c4f-8de1-228350d71b03","block_type":"box","text":"Credit Agreement","page_number":45,"box":{"x":136,"y":201,"width":138,"height":11}},{"id":"4fd1c733-d926-4274-b0f9-908560cf9694","block_type":"box","text":"The Trust, on behalf of the Fund, along with certain other funds managed by BlackRock Fund Advisors and its","page_number":45,"box":{"x":116,"y":227,"width":753,"height":11}},{"id":"b4d17a06-346f-4d65-b9bf-d9fc229a6b8d","block_type":"box","text":"affiliates (“Participating Funds”), is a party to a 364-day, $2.4 billion credit agreement with a group of lenders,","page_number":45,"box":{"x":116,"y":242,"width":759,"height":12}},{"id":"4f9d6f69-22bd-4fc0-8223-a99def872a17","block_type":"box","text":"which facility terminates on April 9, 2026, unless otherwise extended or renewed (the “Credit Agreement”).","page_number":45,"box":{"x":116,"y":258,"width":740,"height":11}},{"id":"6c15504b-1388-4d1f-9720-c33a26c82b9e","block_type":"box","text":"Excluding commitments designated for certain Participating Funds, the Participating Funds, including the Fund,","page_number":45,"box":{"x":117,"y":273,"width":760,"height":12}},{"id":"02954480-b6e5-4bcc-ae6d-0cceec2eeeeb","block_type":"box","text":"can borrow up to an aggregate commitment amount of $1.75 billion at any time outstanding, subject to asset","page_number":45,"box":{"x":116,"y":288,"width":758,"height":12}},{"id":"3e0d4d59-c117-4412-9cc6-6d4a6f17d975","block_type":"box","text":"coverage and other limitations as specified in the Credit Agreement. The Fund may borrow under the Credit","page_number":45,"box":{"x":116,"y":304,"width":738,"height":12}},{"id":"6fe4df76-e0a7-4d95-8666-359d4dab4d49","block_type":"box","text":"Agreement to meet shareholder redemptions and for other lawful purposes. However, the Fund may not borrow","page_number":45,"box":{"x":116,"y":320,"width":767,"height":11}},{"id":"8e31ae74-77f5-44c6-8506-51fb319e4a59","block_type":"box","text":"under the Credit Agreement for leverage. The Fund may borrow up to the maximum amount allowable under its","page_number":45,"box":{"x":117,"y":335,"width":763,"height":12}},{"id":"946b8717-5b3d-48eb-a99d-435fd74a2726","block_type":"box","text":"current Prospectus and SAI, subject to various other legal, regulatory or contractual limits. Borrowing results in","page_number":45,"box":{"x":116,"y":351,"width":761,"height":11}},{"id":"c9e6a11c-f1ec-4d7d-84ed-230c63b3c2f3","block_type":"box","text":"interest expense and other fees and expenses for the Fund which may impact the Fund’s net expenses. The","page_number":45,"box":{"x":117,"y":366,"width":748,"height":12}},{"id":"5f23edad-bd4e-4647-ad1d-4ae60fff90b2","block_type":"box","text":"costs of borrowing may reduce the Fund’s return. The Fund is charged its pro rata share of upfront fees and","page_number":45,"box":{"x":116,"y":382,"width":743,"height":11}},{"id":"c905ae34-5eb4-473c-9bda-a5d9fd75b236","block_type":"box","text":"commitment fees on the aggregate commitment amount based on its net assets. If the Fund borrows pursuant","page_number":45,"box":{"x":116,"y":397,"width":769,"height":12}},{"id":"1fe6bf5d-b194-4db2-b153-22ed844ec43e","block_type":"box","text":"to the Credit Agreement, the Fund will be charged interest at a variable rate.","page_number":45,"box":{"x":116,"y":413,"width":526,"height":11}},{"id":"df37eb29-8710-4202-8fe5-414bd968f8ae","block_type":"box","text":"V. Information on Distribution Related Expenses","page_number":45,"box":{"x":116,"y":441,"width":414,"height":12}},{"id":"d6eb7168-32f6-44fd-afc3-c00fa46dff71","block_type":"box","text":"BlackRock Investments, LLC (“BRIL” or the “Distributor”) acts as the Fund’s sole distributor. During the","page_number":45,"box":{"x":117,"y":467,"width":731,"height":12}},{"id":"8ee69634-ffae-4595-b14b-c78367e7db24","block_type":"box","text":"fiscal year ended October 31, 2025, the Fund did not make any payments to the Distributor.","page_number":45,"box":{"x":116,"y":483,"width":655,"height":11}},{"id":"64291b86-716d-4a68-85a4-25966ef60be7","block_type":"box","text":"VI. Computation of Offering Price Per Share","page_number":45,"box":{"x":116,"y":511,"width":374,"height":11}},{"id":"303da4ae-21bb-4724-8879-f057243d6ec7","block_type":"box","text":"The offering price for the Fund’s shares is equal to the net asset value computed by dividing the value of the","page_number":45,"box":{"x":116,"y":537,"width":767,"height":11}},{"id":"a30bafef-c987-4730-81eb-4524e0f5ddc2","block_type":"box","text":"Fund’s net assets by the number of shares outstanding.","page_number":45,"box":{"x":117,"y":552,"width":400,"height":11}},{"id":"98b0cca9-d87f-40fc-95db-a3b64b761a48","block_type":"box","text":"For more information on the purchasing and valuation of shares, please see “Purchase of Shares” and","page_number":45,"box":{"x":117,"y":575,"width":727,"height":11}},{"id":"c74dd86b-ff83-442c-b777-b5b8a756090b","block_type":"box","text":"“Pricing of Shares” in Part II of this SAI.","page_number":45,"box":{"x":117,"y":590,"width":281,"height":11}},{"id":"76243e60-2c00-47b5-ba0a-2f16abeca662","block_type":"box","text":"The Subsidiary is subject to the same valuation policies as the Fund as described in “Pricing of Shares” in","page_number":45,"box":{"x":116,"y":613,"width":752,"height":11}},{"id":"3a1976cd-9d9e-474a-a030-ddfa09867acb","block_type":"box","text":"Part II of this Statement of Additional Information. The Fund’s investment in the Subsidiary is valued based","page_number":45,"box":{"x":117,"y":628,"width":755,"height":11}},{"id":"612b4600-9974-4e82-81dc-74bf8deae366","block_type":"box","text":"on the value of the Subsidiary’s portfolio investments. The Subsidiary prices its portfolio investments","page_number":45,"box":{"x":116,"y":643,"width":714,"height":11}},{"id":"2b80c933-48de-417a-ae52-f8de951e5248","block_type":"box","text":"pursuant to the same pricing and valuation methodologies and procedures used by the Fund, which require,","page_number":45,"box":{"x":117,"y":658,"width":761,"height":11}},{"id":"cde0c46a-6355-40aa-91b7-24023f5184ee","block_type":"box","text":"among other things, that each of the Subsidiary’s portfolio investments be marked-to-market (that is, the","page_number":45,"box":{"x":116,"y":673,"width":736,"height":12}},{"id":"21139a11-387e-46fc-a4ef-84b17397f9be","block_type":"box","text":"value on the Subsidiary’s books changes) each business day to reflect changes in the market value of the","page_number":45,"box":{"x":116,"y":688,"width":745,"height":12}},{"id":"d208919a-c768-4ade-826a-8ebc9c083652","block_type":"box","text":"investment.","page_number":45,"box":{"x":117,"y":703,"width":80,"height":9}},{"id":"51e3ae77-2f7b-4bf3-a227-75428d068797","block_type":"box","text":"VII. Portfolio Transactions and Brokerage","page_number":45,"box":{"x":116,"y":732,"width":347,"height":11}},{"id":"141f3df9-589e-4451-b15c-a35b8ea95840","block_type":"box","text":"See “Portfolio Transactions and Brokerage” in Part II of this SAI for more information.","page_number":45,"box":{"x":116,"y":757,"width":597,"height":12}},{"id":"13b768fd-c197-44d6-8e55-5faa6b799872","block_type":"box","text":"Information about the brokerage commissions paid by the Fund, including commissions paid to affiliates, is","page_number":45,"box":{"x":117,"y":780,"width":753,"height":12}},{"id":"7b77b084-ab00-4f62-8854-0081625ebb61","block_type":"box","text":"set forth in the following table:","page_number":45,"box":{"x":116,"y":795,"width":212,"height":12}},{"id":"26dc28b5-29d4-4955-933b-27883d6efdec","block_type":"box","text":"Aggregate","page_number":45,"box":{"x":682,"y":815,"width":62,"height":9}},{"id":"4c39d608-16db-4025-9ecd-430c1e5e6163","block_type":"box","text":"Brokerage","page_number":45,"box":{"x":683,"y":825,"width":61,"height":9}},{"id":"5e2b14b2-d423-4212-8b1e-5638474f4238","block_type":"box","text":"Commissions","page_number":45,"box":{"x":673,"y":836,"width":79,"height":7}},{"id":"5bfc0c76-bb86-4144-a7ed-85a4a050e910","block_type":"box","text":"Paid","page_number":45,"box":{"x":701,"y":846,"width":24,"height":7}},{"id":"6c1187f9-680e-4484-bb96-f0be8102292f","block_type":"box","text":"Brokerage","page_number":45,"box":{"x":813,"y":815,"width":61,"height":9}},{"id":"c6a6cdf0-8224-43ca-a94c-714dbe55c0ee","block_type":"box","text":"Commissions","page_number":45,"box":{"x":804,"y":825,"width":79,"height":8}},{"id":"d9d67bc0-1f43-491d-9b5d-51a4ce33c140","block_type":"box","text":"Paid to","page_number":45,"box":{"x":823,"y":836,"width":41,"height":7}},{"id":"b7250be3-193e-4189-95e3-64207bc4dd1a","block_type":"box","text":"Affiliates","page_number":45,"box":{"x":817,"y":846,"width":53,"height":7}},{"id":"78ae6883-1982-4ff4-9cdb-2b5268b78017","block_type":"box","text":"Fiscal Year Ended October 31, 2025 $109,296 $0","page_number":45,"box":{"x":117,"y":868,"width":742,"height":11}},{"id":"d39fc40f-55ff-40a4-ae58-a80c6b9eb3a6","block_type":"box","text":"I-23","page_number":45,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"befe2e53-3b05-4700-8687-0b90b1cee37e","block_type":"box","text":"NM1026U-6033243-45/221","page_number":45,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e32375ff-8be2-4032-89e9-7bc9815d48de","block_type":"box","text":"The following table shows the dollar amount of brokerage commissions paid to brokers for providing","page_number":46,"box":{"x":116,"y":79,"width":707,"height":12}},{"id":"ab47a54a-89ef-4dce-b86f-fcae1cdd9b87","block_type":"box","text":"Section 28(e) research/brokerage services under Section 28(e) of the Securities Exchange Act of 1934, as","page_number":46,"box":{"x":116,"y":94,"width":759,"height":12}},{"id":"307fcd06-0e99-4552-80da-f10790f27dd0","block_type":"box","text":"amended, and the approximate dollar amount of the transactions involved for the fiscal year ended","page_number":46,"box":{"x":116,"y":109,"width":700,"height":12}},{"id":"060cb8ce-1cda-442e-b304-9ee6970cb31b","block_type":"box","text":"October 31, 2025. The provision of Section 28(e) research/brokerage services was not necessarily a factor","page_number":46,"box":{"x":116,"y":125,"width":762,"height":11}},{"id":"908ff8bc-1f31-4cc0-8a99-f16bfd05ee24","block_type":"box","text":"in the placement of all brokerage business with such brokers.","page_number":46,"box":{"x":117,"y":140,"width":438,"height":11}},{"id":"01de1dda-968b-4d01-bce6-4268973d47bf","block_type":"box","text":"Amount of Commissions","page_number":46,"box":{"x":282,"y":160,"width":145,"height":7}},{"id":"c9e05d28-9c1c-465e-a1b9-e275ba12f29c","block_type":"box","text":"Paid to Brokers for","page_number":46,"box":{"x":299,"y":170,"width":112,"height":7}},{"id":"2207de95-5e00-485e-9c42-4af2703e664c","block_type":"box","text":"Providing 28(e)","page_number":46,"box":{"x":309,"y":180,"width":91,"height":9}},{"id":"73dae922-2fe2-429e-ba98-04fe03e32b5c","block_type":"box","text":"Eligible Research Services","page_number":46,"box":{"x":276,"y":191,"width":158,"height":9}},{"id":"eb957830-b3b6-4f8b-8867-ebf956679ba3","block_type":"box","text":"Amount of Brokerage","page_number":46,"box":{"x":575,"y":180,"width":128,"height":9}},{"id":"c976c61a-9002-4857-8fec-f0366249f47b","block_type":"box","text":"Transactions Involved","page_number":46,"box":{"x":574,"y":191,"width":130,"height":7}},{"id":"c4b31e47-bb96-405b-81ee-0508d9106001","block_type":"box","text":"$0 $0","page_number":46,"box":{"x":346,"y":213,"width":308,"height":10}},{"id":"18b0c0b7-9539-49e7-94e1-4e8ada0d38a2","block_type":"box","text":"As of October 31, 2025, the value of the Fund’s aggregate holdings of the securities of its regular brokers or","page_number":46,"box":{"x":116,"y":236,"width":769,"height":12}},{"id":"a6406f1f-ea39-4998-ba63-aa823c389254","block_type":"box","text":"dealers (as defined in Rule 10b-1 under the Investment Company Act) or their parents, if any portion of such","page_number":46,"box":{"x":116,"y":251,"width":766,"height":12}},{"id":"95f7243a-e262-449b-9693-cf06148bc91d","block_type":"box","text":"holdings were purchased during the fiscal year ended October 31, 2025, are as follows:","page_number":46,"box":{"x":117,"y":266,"width":623,"height":12}},{"id":"dc7098fa-b305-48b1-804a-104a8a40e0f4","block_type":"box","text":"Regular Broker-Dealer","page_number":46,"box":{"x":137,"y":286,"width":131,"height":9}},{"id":"9739fcda-d861-4277-a226-cdc2c707f37a","block_type":"box","text":"Debt (D)/Equity (E)","page_number":46,"box":{"x":439,"y":286,"width":117,"height":9}},{"id":"b112812b-8f3d-4c5e-940d-840f37939e07","block_type":"box","text":"Aggregate Holdings (000’s)","page_number":46,"box":{"x":649,"y":286,"width":167,"height":9}},{"id":"b022d51d-be27-4b2d-ba61-d9a8023f692b","block_type":"box","text":"Mizuho Bank Ltd D $3,643","page_number":46,"box":{"x":137,"y":308,"width":629,"height":12}},{"id":"eb621516-ce0f-471f-9384-2664886cc470","block_type":"box","text":"Citigroup Inc D $1,008","page_number":46,"box":{"x":137,"y":329,"width":629,"height":12}},{"id":"03dcf916-30ef-401e-9a6f-61594351dbbb","block_type":"box","text":"Securities Lending","page_number":46,"box":{"x":116,"y":358,"width":144,"height":11}},{"id":"ae876cf6-68b6-4a35-8328-bcd7ed51486a","block_type":"box","text":"To the extent that the Fund engages in securities lending, the Fund conducts its securities lending pursuant","page_number":46,"box":{"x":116,"y":384,"width":762,"height":11}},{"id":"8130c02d-34ac-4d21-9178-adeac84acd6c","block_type":"box","text":"to an exemptive order from the Commission permitting it to lend portfolio securities to borrowers affiliated","page_number":46,"box":{"x":116,"y":399,"width":749,"height":11}},{"id":"579a1831-9c0c-4985-93d8-987a1ae28e82","block_type":"box","text":"with the Fund and to retain an affiliate of the Fund as securities lending agent. To the extent that the Fund","page_number":46,"box":{"x":116,"y":414,"width":751,"height":11}},{"id":"8b483309-421f-4d47-90e5-58b61904d37d","block_type":"box","text":"engages in securities lending, BlackRock Institutional Trust Company, N.A. (“BTC”) acts as securities lending","page_number":46,"box":{"x":116,"y":429,"width":770,"height":11}},{"id":"8b6598aa-4ef8-4a59-8d4e-7e8691c2ef1e","block_type":"box","text":"agent for the Fund, subject to the overall supervision of the Manager, pursuant to a written agreement (the","page_number":46,"box":{"x":116,"y":444,"width":754,"height":12}},{"id":"8f4b7981-52a5-4202-96d5-22d5c3b34ed9","block_type":"box","text":"“Securities Lending Agency Agreement”). BTC administers the lending program in accordance with guidelines","page_number":46,"box":{"x":117,"y":459,"width":769,"height":12}},{"id":"a1a0996f-6f54-46c8-8cf0-a5d9f1c7a7b6","block_type":"box","text":"approved by the Board.","page_number":46,"box":{"x":116,"y":474,"width":168,"height":12}},{"id":"02cb0f85-bfd5-4675-ad9f-6b3f8d503e2e","block_type":"box","text":"To the extent the Fund engages in securities lending, the Fund retains a portion of the securities lending","page_number":46,"box":{"x":116,"y":497,"width":737,"height":12}},{"id":"3612b7c8-ce3f-4816-83d1-d3407bdc430a","block_type":"box","text":"income and remits the remaining portion to BTC as compensation for its services as securities lending","page_number":46,"box":{"x":117,"y":512,"width":725,"height":12}},{"id":"57d464a9-f490-47f6-91fb-48ad22533b8e","block_type":"box","text":"agent. Securities lending income is generally equal to the total of income earned from the reinvestment of","page_number":46,"box":{"x":116,"y":527,"width":750,"height":12}},{"id":"f171ec38-0366-4ab2-8361-49933281dc5d","block_type":"box","text":"cash collateral (and excludes collateral investment fees as defined below), and any fees or other payments","page_number":46,"box":{"x":116,"y":543,"width":758,"height":11}},{"id":"77edb759-3dae-4135-9dd1-03e31bec21fe","block_type":"box","text":"to and from borrowers of securities. As securities lending agent, BTC bears all operational costs directly","page_number":46,"box":{"x":116,"y":558,"width":735,"height":11}},{"id":"71c00a56-b274-4cf5-af5b-6bd2da5c4097","block_type":"box","text":"related to securities lending. The Fund is responsible for fees in connection with the investment of cash","page_number":46,"box":{"x":117,"y":573,"width":733,"height":11}},{"id":"16fcf313-909a-49db-9b77-8825b1bf741b","block_type":"box","text":"collateral received for securities on loan in money market funds managed by BFA or its affiliates, and such","page_number":46,"box":{"x":116,"y":588,"width":753,"height":11}},{"id":"60daaa21-1cc1-4293-b9d0-20f0a1c0515a","block_type":"box","text":"fees will not be subject to any waivers (the “collateral investment fees”); however, BTC has agreed to reduce","page_number":46,"box":{"x":116,"y":603,"width":769,"height":11}},{"id":"06c198c0-c2d1-48ea-bc54-eebb4462b00a","block_type":"box","text":"the amount of securities lending income it receives in order to effectively limit the collateral investment fees","page_number":46,"box":{"x":116,"y":618,"width":764,"height":12}},{"id":"e112d77f-cb9a-4256-816a-64868db701ed","block_type":"box","text":"the Fund bears to an annual rate of 0.04%. Such money market fund shares will not be subject to a sales","page_number":46,"box":{"x":116,"y":633,"width":749,"height":12}},{"id":"5d2fa8b4-df97-4ae6-9e93-83715780e0da","block_type":"box","text":"load, distribution fee or service fee. To the extent that the Fund invests cash collateral in a non-government","page_number":46,"box":{"x":117,"y":648,"width":758,"height":12}},{"id":"a1b4b85a-2571-4db4-b410-4687f49794a3","block_type":"box","text":"money market fund, the Fund may be subject to a discretionary liquidity fee of up to 2% on all redemptions.","page_number":46,"box":{"x":117,"y":663,"width":752,"height":12}},{"id":"36b1964f-939c-407b-9b4c-e85945e56684","block_type":"box","text":"Discretionary liquidity fees may be imposed or terminated at any time at the discretion of the board of","page_number":46,"box":{"x":117,"y":679,"width":715,"height":11}},{"id":"68a99a21-2d9e-4e9b-b586-e3664469d878","block_type":"box","text":"directors of the money market fund, or its delegate, if it is determined that such fee would be, or would not","page_number":46,"box":{"x":116,"y":694,"width":752,"height":11}},{"id":"8cddaecd-a024-4633-8857-2a925b2679d3","block_type":"box","text":"be, respectively, in the best interest of the money market fund. Additionally, the Fund will be subject to a","page_number":46,"box":{"x":117,"y":709,"width":733,"height":11}},{"id":"d5684ecc-f401-4d5a-be94-5fee50392cec","block_type":"box","text":"mandatory liquidity fee if the money market fund’s total net redemptions on a single day exceed 5% of the","page_number":46,"box":{"x":117,"y":724,"width":744,"height":11}},{"id":"08550cd3-5de9-4f8e-8ff8-b92dd6861754","block_type":"box","text":"money market fund’s net assets, unless the liquidity costs are de minimis (i.e., less than one basis point","page_number":46,"box":{"x":117,"y":739,"width":741,"height":11}},{"id":"eeae92d6-51e0-4333-a628-26d30f0b02ad","block_type":"box","text":"(0.01%)). The money market fund will determine the size of the mandatory liquidity fee by making a good","page_number":46,"box":{"x":117,"y":754,"width":732,"height":12}},{"id":"fc96b182-caf0-4690-a393-b3fedee8b02c","block_type":"box","text":"faith estimate of certain costs the money market fund would incur if it were to sell a pro rata amount of each","page_number":46,"box":{"x":116,"y":769,"width":763,"height":12}},{"id":"ff77eeba-fa0f-4e24-80a6-4f6aeb4160f5","block_type":"box","text":"security in the portfolio to satisfy the amount of net redemptions on that day. There is no limit to the size of","page_number":46,"box":{"x":116,"y":784,"width":756,"height":12}},{"id":"e3d72579-718e-45a8-8e97-8cfae8056276","block_type":"box","text":"a mandatory liquidity fee. If the money market fund cannot estimate the costs of selling a pro rata amount of","page_number":46,"box":{"x":116,"y":800,"width":766,"height":11}},{"id":"e1d385f3-fe29-4084-b277-72ac9b3f33f7","block_type":"box","text":"each portfolio security in good faith and supported by data, it is required to apply a default liquidity fee of 1%","page_number":46,"box":{"x":116,"y":815,"width":762,"height":11}},{"id":"c226e1d4-c066-41d2-850a-993a52e02944","block_type":"box","text":"on the value of shares redeemed on that day. The imposition of any such discretionary or mandatory liquidity","page_number":46,"box":{"x":116,"y":830,"width":769,"height":11}},{"id":"48247853-61b7-4f82-99c6-79262eac46cc","block_type":"box","text":"fee would reduce the Fund’s returns on securities lending.","page_number":46,"box":{"x":116,"y":845,"width":414,"height":11}},{"id":"578c137e-e43c-45c9-965c-3ca2c4cb4c8a","block_type":"box","text":"I-24","page_number":46,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"112a9d28-9ed6-4455-88b6-9428fc5f2ee7","block_type":"box","text":"NM1026U-6033243-46/221","page_number":46,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"436236ec-f2c5-42d4-8ae8-0d85a9e00fe5","block_type":"box","text":"Under the securities lending program, the Fund is categorized into one of several specific asset classes. The","page_number":47,"box":{"x":117,"y":79,"width":768,"height":12}},{"id":"d7562b3a-536e-4b6e-958e-b2822f88510e","block_type":"box","text":"determination of the Fund’s asset class category (fixed-income, domestic equity, international equity or fund","page_number":47,"box":{"x":116,"y":94,"width":764,"height":12}},{"id":"fcbcb8dd-ef0a-451b-bc97-08cfe9860399","block_type":"box","text":"of funds), each of which may be subject to a different fee arrangement, is based on a methodology agreed to","page_number":47,"box":{"x":116,"y":109,"width":771,"height":12}},{"id":"c91ebb03-1ff8-4af3-8538-f3f24b728850","block_type":"box","text":"by the Trust and BTC.","page_number":47,"box":{"x":117,"y":125,"width":155,"height":11}},{"id":"76f89447-3c07-41ff-be6c-6c6857e92864","block_type":"box","text":"Pursuant to the current securities lending agreement: (i) if the Fund were to engage in securities lending, the","page_number":47,"box":{"x":117,"y":147,"width":766,"height":12}},{"id":"c8832a21-5f13-4946-b562-b59b942d3266","block_type":"box","text":"Fund retains 82% of securities lending income (which excludes collateral investment fees); and (ii) this","page_number":47,"box":{"x":117,"y":163,"width":724,"height":11}},{"id":"349c4b02-dc87-4966-ba4b-5f17b41a2393","block_type":"box","text":"amount can never be less than 70% of the sum of securities lending income plus collateral investment fees.","page_number":47,"box":{"x":116,"y":178,"width":768,"height":11}},{"id":"b4570469-d87e-4b6b-bba3-a53e55a5c6d9","block_type":"box","text":"In addition, commencing the business day following the date that the aggregate securities lending income","page_number":47,"box":{"x":117,"y":201,"width":748,"height":11}},{"id":"5a33106a-d553-4d29-ae46-4345415ec328","block_type":"box","text":"earned across the BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, the","page_number":47,"box":{"x":116,"y":216,"width":735,"height":12}},{"id":"b4d93d56-7f2e-40ad-be5f-8bfa181f3d6f","block_type":"box","text":"Fund, pursuant to the current securities lending agreement, will receive for the remainder of that calendar","page_number":47,"box":{"x":117,"y":232,"width":745,"height":11}},{"id":"47e02060-497d-4d0e-a3d7-04f6f8a50c8f","block_type":"box","text":"year securities lending income as follows: (i) if the Fund were to engage in securities lending, 85% of","page_number":47,"box":{"x":116,"y":247,"width":712,"height":12}},{"id":"88fba415-935b-476f-a664-9c38e13c1d91","block_type":"box","text":"securities lending income (which excludes collateral investment fees); and (ii) this amount can never be less","page_number":47,"box":{"x":116,"y":263,"width":767,"height":11}},{"id":"23e048e5-e31b-4011-8aab-ce7b0e173f49","block_type":"box","text":"than 70% of the sum of securities lending income plus collateral investment fees.","page_number":47,"box":{"x":116,"y":278,"width":580,"height":12}},{"id":"c1933e90-328f-4c28-9c5e-d23075e4a1d0","block_type":"box","text":"The Fund had no income and fees/compensation related to its securities lending activities during its most","page_number":47,"box":{"x":116,"y":302,"width":752,"height":11}},{"id":"327b9214-d64a-4419-a9d0-8b8619a8161a","block_type":"box","text":"recent fiscal year ended October 31, 2025.","page_number":47,"box":{"x":117,"y":317,"width":309,"height":12}},{"id":"71d9cfa9-bf23-4e45-89c3-61f3fdc36ddf","block_type":"box","text":"VIII. Additional Information","page_number":47,"box":{"x":116,"y":346,"width":239,"height":9}},{"id":"26d6489c-dc6f-4175-8a0a-7eeb6fca0e15","block_type":"box","text":"Independent Registered Public Accounting Firm","page_number":47,"box":{"x":117,"y":372,"width":343,"height":11}},{"id":"e112ab77-1685-4505-82a7-f735146fb19b","block_type":"box","text":". PricewaterhouseCoopers LLP, with offices located at Two","page_number":47,"box":{"x":462,"y":372,"width":414,"height":11}},{"id":"b6a45215-b425-46a5-8cf5-41b240b9f926","block_type":"box","text":"Commerce Square, 2001 Market Street, Suite 1800, Philadelphia, Pennsylvania 19103, serves as the","page_number":47,"box":{"x":116,"y":387,"width":729,"height":11}},{"id":"c589851b-4bed-410c-a926-254caa4984f8","block_type":"box","text":"Fund’s independent registered public accounting firm.","page_number":47,"box":{"x":117,"y":403,"width":381,"height":11}},{"id":"f1ba1266-6cd7-4399-9c57-13f7a6ecd094","block_type":"box","text":"Counsel","page_number":47,"box":{"x":116,"y":426,"width":57,"height":9}},{"id":"44445550-d4ca-41a0-b123-971c5ed6891f","block_type":"box","text":". Ropes & Gray LLP, with offices at 1211 Avenue of the Americas, New York, NY US 10036, serves","page_number":47,"box":{"x":175,"y":426,"width":702,"height":11}},{"id":"c745962c-c531-40df-8d63-32404c2b4800","block_type":"box","text":"as the Fund’s counsel.","page_number":47,"box":{"x":116,"y":441,"width":165,"height":9}},{"id":"8e736075-f819-4d56-a7a9-349c68f7d502","block_type":"box","text":"The Trust","page_number":47,"box":{"x":116,"y":470,"width":76,"height":9}},{"id":"fb3f5c5a-2657-40fe-8d6f-d7201b995599","block_type":"box","text":"The Trust was organized as a Massachusetts business trust on December 22, 1988, and is registered","page_number":47,"box":{"x":116,"y":496,"width":729,"height":11}},{"id":"a7ffd3f7-1f89-441e-8da4-40d527400358","block_type":"box","text":"under the Investment Company Act as an open-end management investment company. The Fund is","page_number":47,"box":{"x":117,"y":511,"width":702,"height":12}},{"id":"c47e66f4-b3be-4868-a491-4263397ae389","block_type":"box","text":"classified as non-diversified. The Trust is authorized to issue an unlimited number of shares of beneficial","page_number":47,"box":{"x":116,"y":527,"width":741,"height":9}},{"id":"94d80784-9145-4ba2-b83c-d09e1e77ca26","block_type":"box","text":"interest with a par value of $0.001 per share, which may be divided into different series and classes.","page_number":47,"box":{"x":117,"y":541,"width":717,"height":12}},{"id":"4f9eaa07-c683-439e-8476-91ef6a900c98","block_type":"box","text":"Under Massachusetts law, shareholders of a business trust may, under certain circumstances, be held","page_number":47,"box":{"x":117,"y":565,"width":730,"height":12}},{"id":"33abacb9-b892-427f-b774-0fa4cb61d007","block_type":"box","text":"personally liable as partners for the obligations of the Trust. However, the Trust’s Declaration of Trust","page_number":47,"box":{"x":117,"y":581,"width":717,"height":11}},{"id":"9051dd2e-b870-4477-b6af-7a0f6e465809","block_type":"box","text":"provides that shareholders shall not be subject to any personal liability in connection with the assets of the","page_number":47,"box":{"x":117,"y":596,"width":758,"height":12}},{"id":"b061badb-d6a0-487c-9a11-a46baa670370","block_type":"box","text":"Trust for the acts or obligations of the Trust, and that every note, bond, contract, order or other undertaking","page_number":47,"box":{"x":116,"y":612,"width":759,"height":11}},{"id":"96b8c6e5-86b6-4104-9c3a-10a7a3182f9f","block_type":"box","text":"made by the Trust shall contain a provision to the effect that the shareholders are not personally liable","page_number":47,"box":{"x":117,"y":627,"width":726,"height":12}},{"id":"2779534f-4db6-4108-b348-c00496f67ec0","block_type":"box","text":"thereunder. The Declaration of Trust provides for indemnification out of Trust property of any shareholder","page_number":47,"box":{"x":116,"y":643,"width":740,"height":11}},{"id":"061dc029-7d26-4f84-97c3-dd9451d85992","block_type":"box","text":"held personally liable solely by reason of his being or having been a shareholder and not because of such","page_number":47,"box":{"x":117,"y":658,"width":746,"height":12}},{"id":"a94dc4e5-0fda-43b4-8b4c-82cf7f363b5e","block_type":"box","text":"shareholder’s acts or omissions or some other reason. The Declaration of Trust also provides that the Trust","page_number":47,"box":{"x":116,"y":674,"width":759,"height":11}},{"id":"0734e5fc-a75b-4ced-9fa0-b64497a6a046","block_type":"box","text":"shall, upon request, assume the defense of any claim made against any shareholder for any act or","page_number":47,"box":{"x":116,"y":689,"width":695,"height":12}},{"id":"977e3d64-80fc-4103-8c09-dbe49a1cf6ad","block_type":"box","text":"obligation of the Trust, and shall satisfy any judgment thereon.","page_number":47,"box":{"x":116,"y":705,"width":438,"height":11}},{"id":"bab25429-9f93-46be-b24d-4a5b141a4080","block_type":"box","text":"The Declaration of Trust further provides that all persons having any claim against the Trustees or Trust shall","page_number":47,"box":{"x":116,"y":728,"width":764,"height":12}},{"id":"b510c8ca-ac67-47d3-b43d-6a28506115e5","block_type":"box","text":"look solely to the Trust property for payment; that no Trustee of the Trust shall be personally liable for or on","page_number":47,"box":{"x":117,"y":744,"width":752,"height":11}},{"id":"6509a0e9-7ee6-4cbb-b9c0-868d485bb080","block_type":"box","text":"account of any contract, debt, tort, claim, damage, judgment or decree arising out of or connected with the","page_number":47,"box":{"x":116,"y":759,"width":749,"height":12}},{"id":"5dfe3e3d-8a9c-4a62-a84e-38bfaf495098","block_type":"box","text":"administration or preservation of the Trust property or the conduct of any business of the Trust; and that no","page_number":47,"box":{"x":116,"y":775,"width":755,"height":11}},{"id":"a1851177-c2e7-466c-b559-c9bb946e4bdb","block_type":"box","text":"Trustee shall be personally liable to any person for any action or failure to act except by reason of such","page_number":47,"box":{"x":116,"y":790,"width":723,"height":11}},{"id":"c6e967ce-cede-498c-ba97-eea6dd699ca3","block_type":"box","text":"Trustee’s own bad faith, willful misfeasance, gross negligence or reckless disregard of his duties as a","page_number":47,"box":{"x":116,"y":806,"width":715,"height":11}},{"id":"0c3d8038-ca5a-4c44-be85-bef225839b74","block_type":"box","text":"Trustee.","page_number":47,"box":{"x":116,"y":821,"width":56,"height":9}},{"id":"4a6667ed-37fc-42f8-9556-c1977be5ca80","block_type":"box","text":"With the exception stated, the Declaration of Trust provides that a Trustee is entitled to be indemnified","page_number":47,"box":{"x":116,"y":844,"width":728,"height":12}},{"id":"27693000-d475-45f2-9b7b-42b410c66e47","block_type":"box","text":"against all liabilities and expenses reasonably incurred by such Trustee in connection with the defense or","page_number":47,"box":{"x":116,"y":860,"width":745,"height":11}},{"id":"09cec3ae-35b0-4e64-9813-d2714513563a","block_type":"box","text":"I-25","page_number":47,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"6f7738f3-f056-429d-8946-cdb4ad7f5cfa","block_type":"box","text":"NM1026U-6033243-47/221","page_number":47,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"2a3e70bf-9605-47d8-9656-293e25decf25","block_type":"box","text":"disposition of any proceeding in which he may be involved or with which he may be threatened by reason of","page_number":48,"box":{"x":116,"y":80,"width":758,"height":11}},{"id":"01486d6e-db94-493d-be62-bbb2dd008e2b","block_type":"box","text":"his being or having been a Trustee, and that the Trust will indemnify officers, representatives and employees","page_number":48,"box":{"x":117,"y":95,"width":767,"height":12}},{"id":"a6762d09-fdaf-4362-ade5-f76d682c88d5","block_type":"box","text":"of the Trust to the same extent that trustees are entitled to indemnification.","page_number":48,"box":{"x":116,"y":111,"width":538,"height":9}},{"id":"17532495-ef0a-4d11-8edb-af45e80e1cdb","block_type":"box","text":"Principal Shareholders","page_number":48,"box":{"x":117,"y":139,"width":172,"height":11}},{"id":"b9144fc1-7c97-44a7-9ccb-f1a236e4e854","block_type":"box","text":"To the knowledge of the Trust, the following entities owned of record or beneficially 5% or more of a class of","page_number":48,"box":{"x":116,"y":165,"width":763,"height":11}},{"id":"792af350-b9a6-4a2b-b5cc-57582f72740a","block_type":"box","text":"the Fund’s shares as of February 2, 2026:","page_number":48,"box":{"x":116,"y":180,"width":304,"height":12}},{"id":"b73c654d-99f0-4607-afb1-ccf35fd7bceb","block_type":"box","text":"Name","page_number":48,"box":{"x":197,"y":206,"width":34,"height":7}},{"id":"7e566430-5e4f-4eb0-a489-2263075d0a30","block_type":"box","text":"Address","page_number":48,"box":{"x":449,"y":206,"width":48,"height":7}},{"id":"a5f51e2b-9c3e-4446-86bf-a985893a5b03","block_type":"box","text":"Percentage","page_number":48,"box":{"x":739,"y":206,"width":68,"height":9}},{"id":"afdd0b34-3779-4ab5-966e-b92cd43ca210","block_type":"box","text":"BlackRock Funds LLC","page_number":48,"box":{"x":198,"y":225,"width":124,"height":7}},{"id":"7abb88d1-a1b9-4e01-ad5f-5854d91b5335","block_type":"box","text":"LifePath Index Retirement Fund","page_number":48,"box":{"x":198,"y":235,"width":181,"height":7}},{"id":"62d27e37-b601-4279-ac47-df5219b18549","block_type":"box","text":"400 Howard St","page_number":48,"box":{"x":449,"y":225,"width":89,"height":7}},{"id":"5858773b-a7ed-4e24-971b-9266f485f505","block_type":"box","text":"San Francisco CA 94105-2618","page_number":48,"box":{"x":450,"y":235,"width":181,"height":7}},{"id":"ab6a6d81-6535-4d09-917c-e8b40546a071","block_type":"box","text":"65.00%","page_number":48,"box":{"x":750,"y":225,"width":45,"height":7}},{"id":"b1d23576-f2c8-43bf-8e34-152a04143c6e","block_type":"box","text":"BlackRock Funds LLC","page_number":48,"box":{"x":198,"y":251,"width":124,"height":7}},{"id":"ac7a60a3-9f3a-4812-940e-5d3598f6e8fc","block_type":"box","text":"LifePath Index 2030 Fund","page_number":48,"box":{"x":198,"y":261,"width":149,"height":7}},{"id":"00076f4f-7118-47cb-8f6f-883cc7fa8d7d","block_type":"box","text":"400 Howard St","page_number":48,"box":{"x":449,"y":251,"width":89,"height":7}},{"id":"df53181a-3276-40a1-80cc-d2fd181b59c0","block_type":"box","text":"San Francisco CA 94105-2618","page_number":48,"box":{"x":450,"y":261,"width":181,"height":7}},{"id":"a8ac1b08-34c5-4acd-9db2-fa2626fb3f99","block_type":"box","text":"34.72%","page_number":48,"box":{"x":750,"y":251,"width":45,"height":7}},{"id":"b0b29024-8f0f-4aac-801c-72ddf808de9b","block_type":"box","text":"IX. Financial Statements","page_number":48,"box":{"x":117,"y":288,"width":232,"height":9}},{"id":"039be831-46e3-448d-9349-63a3f9e80d23","block_type":"box","text":"The audited financial statements, financial highlights and notes thereto in the Fund’s Annual Financial","page_number":48,"box":{"x":116,"y":313,"width":721,"height":12}},{"id":"c962aca9-2daf-4cd2-b637-883af11e9fbd","block_type":"box","text":"Statements and Additional Information for the fiscal period ended October 31, 2025, as filed with the SEC","page_number":48,"box":{"x":116,"y":329,"width":753,"height":11}},{"id":"d19163a4-a8ca-426d-8673-bbee8a731779","block_type":"box","text":"on Form N-CSR (the “2025 Annual Financial Statements”), are incorporated in this SAI by reference. No","page_number":48,"box":{"x":116,"y":344,"width":733,"height":12}},{"id":"817bd3aa-3bd4-4a1a-a61f-6df23992fa5f","block_type":"box","text":"other parts of the 2025 Annual Financial Statements are incorporated by reference herein. The 2025 Annual","page_number":48,"box":{"x":116,"y":360,"width":768,"height":11}},{"id":"decc624c-41bd-48e0-aed4-8af87a1d2ce9","block_type":"box","text":"Financial Statements have been audited by PricewaterhouseCoopers LLP. The report of","page_number":48,"box":{"x":117,"y":376,"width":616,"height":11}},{"id":"f3522727-54e6-4961-a8ba-3e7b2e579b2f","block_type":"box","text":"PricewaterhouseCoopers LLP is incorporated herein by reference. Such 2025 Annual Financial Statements","page_number":48,"box":{"x":117,"y":391,"width":752,"height":11}},{"id":"49b0543e-5ec9-4231-808f-d27514537645","block_type":"box","text":"have been incorporated herein in reliance upon such report given upon PricewaterhouseCoopers LLP’s","page_number":48,"box":{"x":117,"y":407,"width":723,"height":11}},{"id":"da95bc3f-ac47-4733-9719-3c4c535d7115","block_type":"box","text":"authority as experts in accounting and auditing. Additional copies of the Fund’s annual and semi-annual","page_number":48,"box":{"x":116,"y":422,"width":733,"height":11}},{"id":"1f116d3f-61dd-4884-b6e5-43a129f2c28c","block_type":"box","text":"reports to shareholders and the Fund’s Annual and Semi-Annual Financial Statements and Additional","page_number":48,"box":{"x":117,"y":438,"width":712,"height":11}},{"id":"d39a84ff-9b4e-46ae-a56d-b0717a3e2df2","block_type":"box","text":"Information may be obtained at no charge by telephoning the Distributor at the telephone number appearing","page_number":48,"box":{"x":117,"y":453,"width":763,"height":12}},{"id":"8cc30e74-bac4-419e-a2e4-29ce9622224a","block_type":"box","text":"on the front page of this SAI.","page_number":48,"box":{"x":116,"y":469,"width":207,"height":11}},{"id":"1a2d1add-2b67-404d-8e80-c04ef9203583","block_type":"box","text":"I-26","page_number":48,"box":{"x":487,"y":917,"width":26,"height":9}},{"id":"7e1f375b-1664-4e9b-b864-403f15ef8991","block_type":"box","text":"NM1026U-6033243-48/221","page_number":48,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"7468c131-480b-4080-9141-07a00dcd504e","block_type":"box","text":"PART II","page_number":49,"box":{"x":432,"y":92,"width":149,"height":22}},{"id":"560be9ff-6121-402c-9bd6-d45f56a8965b","block_type":"box","text":"Throughout this Statement of Additional Information (“SAI”), each BlackRock-advised fund may be","page_number":49,"box":{"x":116,"y":143,"width":734,"height":12}},{"id":"9939d04a-88d2-4f35-aa18-0c35b6b439cf","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":49,"box":{"x":117,"y":158,"width":770,"height":13}},{"id":"10808588-54c4-420c-81d0-b5d46606057a","block_type":"box","text":"as “Municipal Funds” if they invest certain of their assets in municipal investments described below.","page_number":49,"box":{"x":116,"y":174,"width":743,"height":12}},{"id":"9fb3d0cb-bba9-4ae1-a95d-92f6b5f591e8","block_type":"box","text":"Each Fund is organized either as a Maryland corporation, a Massachusetts business trust or a","page_number":49,"box":{"x":117,"y":205,"width":704,"height":11}},{"id":"f4caee7e-0a70-48d8-904c-85ea0b2dfa12","block_type":"box","text":"Delaware statutory trust. In each jurisdiction, nomenclature varies. For ease and clarity of presentation,","page_number":49,"box":{"x":117,"y":220,"width":769,"height":12}},{"id":"ad4cd4ec-7eef-45b0-823f-c44fe6aa4907","block_type":"box","text":"shares of common stock and shares of beneficial interest are referred to herein as “shares” or","page_number":49,"box":{"x":116,"y":235,"width":701,"height":10}},{"id":"3d6b82fd-3c16-4024-ad1a-8d5a23a3c943","block_type":"box","text":"“Common Stock,” holders of shares of Common Stock are referred to as “shareholders,” the trustees","page_number":49,"box":{"x":116,"y":251,"width":752,"height":11}},{"id":"7dbe8843-9d95-4502-aaee-ca40840b8447","block_type":"box","text":"or directors of each Fund are referred to as “Directors,” the boards of trustees/directors of each Fund","page_number":49,"box":{"x":116,"y":266,"width":754,"height":12}},{"id":"bdf79b6f-bf08-4fa7-a182-48173e2a125d","block_type":"box","text":"are referred to as the “Board of Directors” or the “Board,” BlackRock Advisors, LLC, BlackRock Fund","page_number":49,"box":{"x":116,"y":282,"width":752,"height":11}},{"id":"31201fa5-06e1-44b9-b54d-b827589539a4","block_type":"box","text":"Advisors or their respective affiliates is the investment adviser or manager of each Fund and is referred","page_number":49,"box":{"x":116,"y":297,"width":771,"height":12}},{"id":"f2a1fffe-ded2-4c81-bb48-16f1c285ad4f","block_type":"box","text":"to herein as the “Manager” or “BlackRock,” and the investment advisory agreement or management","page_number":49,"box":{"x":116,"y":313,"width":745,"height":12}},{"id":"1a1f4d9a-2f05-4b05-bf1f-928e2a6ecf5f","block_type":"box","text":"agreement applicable to each Fund is referred to as the “Management Agreement.” Each Fund’s","page_number":49,"box":{"x":116,"y":328,"width":722,"height":13}},{"id":"c85c0014-6e4d-4ff6-a2db-d7565a17342f","block_type":"box","text":"Articles of Incorporation or Declaration of Trust, together with all amendments thereto, is referred to as","page_number":49,"box":{"x":116,"y":344,"width":765,"height":12}},{"id":"3aea6c11-233c-4c61-8ba7-2aeeb4aae5e2","block_type":"box","text":"its “charter.” The Investment Company Act of 1940, as amended, is referred to herein as the","page_number":49,"box":{"x":117,"y":359,"width":689,"height":13}},{"id":"ada52b4c-5f64-44f5-8af5-41aa3ec4ddf3","block_type":"box","text":"“Investment Company Act.” The Securities Act of 1933, as amended, is referred to herein as the","page_number":49,"box":{"x":116,"y":375,"width":719,"height":12}},{"id":"6063f146-4da2-4090-9dab-1fff8c2c39ea","block_type":"box","text":"“Securities Act.” The Securities and Exchange Commission is referred to herein as the “Commission”","page_number":49,"box":{"x":116,"y":390,"width":755,"height":13}},{"id":"fb7231ea-68af-4783-8682-ba94725fbe18","block_type":"box","text":"or the “SEC.”","page_number":49,"box":{"x":116,"y":406,"width":103,"height":9}},{"id":"db76a73f-72b5-44f8-8c73-68881b6572fe","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":49,"box":{"x":117,"y":436,"width":765,"height":12}},{"id":"0c18a7bf-9843-4724-9766-9707880cd0fa","block_type":"box","text":"corresponding “master” portfolio (each, a “Master Portfolio”) of a master limited liability company (each,","page_number":49,"box":{"x":116,"y":452,"width":770,"height":12}},{"id":"3c75f0b2-3602-4a03-9793-32b37808f1f5","block_type":"box","text":"a “Master LLC”), a mutual fund that has the same objective and strategies as the Feeder Fund. All","page_number":49,"box":{"x":116,"y":467,"width":734,"height":12}},{"id":"e2ff42fd-72d9-4cc4-a11c-07e921020f7f","block_type":"box","text":"investments are generally made at the level of the Master Portfolio. This structure is sometimes called","page_number":49,"box":{"x":117,"y":483,"width":761,"height":12}},{"id":"b5a6ca5d-29dd-40fd-a0d7-4789195d0ed9","block_type":"box","text":"a “master/feeder” structure. A Feeder Fund’s investment results will correspond directly to the","page_number":49,"box":{"x":116,"y":498,"width":700,"height":12}},{"id":"ad3cef04-bfdd-4c74-9ba1-8a6f09e55f7f","block_type":"box","text":"investment results of the underlying Master Portfolio in which it invests. For simplicity, this SAI uses the","page_number":49,"box":{"x":117,"y":514,"width":770,"height":12}},{"id":"8b3eaa51-6f9a-4107-8e6a-6997a54b3c84","block_type":"box","text":"term “Fund” to include both a Feeder Fund and its Master Portfolio.","page_number":49,"box":{"x":116,"y":529,"width":503,"height":10}},{"id":"90e83241-8ea3-41a4-9873-840671a7726b","block_type":"box","text":"Certain information contained herein may not be relevant to a particular Fund.","page_number":49,"box":{"x":117,"y":560,"width":582,"height":12}},{"id":"6e1511c2-9490-437a-9c3f-561c6e03086a","block_type":"box","text":"Investment Risks and Considerations","page_number":49,"box":{"x":119,"y":610,"width":675,"height":23}},{"id":"50effef5-5dd9-49d3-80d7-f8c5d7857efe","block_type":"box","text":"Set forth below are descriptions of some of the types of investments and investment strategies that one","page_number":49,"box":{"x":116,"y":661,"width":767,"height":12}},{"id":"ddf00448-507a-4bbf-93eb-4833c84dc193","block_type":"box","text":"or more of the Funds may use, and the risks and considerations associated with those investments","page_number":49,"box":{"x":116,"y":677,"width":735,"height":12}},{"id":"5b24fbf2-cb28-466b-805a-64d031025667","block_type":"box","text":"and investment strategies. Please see each Fund’s prospectuses (the “Prospectus”) and the","page_number":49,"box":{"x":116,"y":692,"width":685,"height":12}},{"id":"b37e2cdf-4e61-42dd-8dd5-886529788a8d","block_type":"box","text":"“Investment Objective and Policies,” “Investment Objectives and Policies” or “Investment Strategies","page_number":49,"box":{"x":116,"y":708,"width":737,"height":12}},{"id":"6065e63c-65f6-4dec-8510-d0fdeb802ac3","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":49,"box":{"x":116,"y":723,"width":714,"height":12}},{"id":"f7f72159-c322-44f0-a4b5-b8536cb73b91","block_type":"box","text":"Fund’s investment policies and risks. Information contained in this section about the risks and","page_number":49,"box":{"x":117,"y":739,"width":692,"height":12}},{"id":"8bdc112b-761c-42b4-a893-6db183757840","block_type":"box","text":"considerations associated with a Fund’s investments and/or investment strategies applies only to those","page_number":49,"box":{"x":116,"y":754,"width":765,"height":12}},{"id":"f3c22784-9cfb-4c99-b727-4ccf752d3647","block_type":"box","text":"Funds specifically identified in Part I of this SAI as making each type of investment or using each","page_number":49,"box":{"x":117,"y":770,"width":716,"height":12}},{"id":"49972080-5d23-477c-af1c-5d991a61299a","block_type":"box","text":"investment strategy (each, a “Covered Fund”). Information that does not apply to a Covered Fund does","page_number":49,"box":{"x":117,"y":785,"width":764,"height":12}},{"id":"2b42eaec-5b72-4910-a700-a9f4a2e2425a","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":49,"box":{"x":117,"y":801,"width":735,"height":12}},{"id":"d77c96d7-d815-4d3f-8b0f-a2bd7b2f7b63","block_type":"box","text":"Fund. Only information that is clearly identified as applicable to a Covered Fund is considered to form a","page_number":49,"box":{"x":117,"y":816,"width":765,"height":12}},{"id":"7cca1a3f-8b9f-4fe6-b9d8-ac335a6a81db","block_type":"box","text":"part of that Covered Fund’s SAI.","page_number":49,"box":{"x":117,"y":832,"width":244,"height":12}},{"id":"684cfdd8-98b4-4d8c-852d-e8baaf05262f","block_type":"box","text":"Asset-Backed Securities.","page_number":49,"box":{"x":116,"y":862,"width":200,"height":10}},{"id":"e0fcda0c-fbee-49a4-931c-339468c10c80","block_type":"box","text":"Asset-backed securities are securities backed by home equity loans,","page_number":49,"box":{"x":317,"y":862,"width":519,"height":12}},{"id":"204cf166-27f5-4a72-9d06-19fb5b91772e","block_type":"box","text":"installment sale contracts, credit card receivables or other assets. Asset-backed securities are","page_number":49,"box":{"x":117,"y":878,"width":702,"height":11}},{"id":"ee0e3f3a-c2de-42e4-97b6-a7610ad4d81e","block_type":"box","text":"II-1","page_number":49,"box":{"x":489,"y":909,"width":20,"height":9}},{"id":"afb741a5-4bb5-4663-a9ea-1075110b8458","block_type":"box","text":"NM1026U-6033243-49/221","page_number":49,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d9f47eaa-42de-43e0-84c6-a3a86247a32f","block_type":"box","text":"“pass-through” securities, meaning that principal and interest payments — net of expenses — made by","page_number":50,"box":{"x":116,"y":87,"width":770,"height":12}},{"id":"1a10409f-3510-4bd8-9e22-4f171b93f31d","block_type":"box","text":"the borrower on the underlying assets (such as credit card receivables) are passed through to a Fund.","page_number":50,"box":{"x":116,"y":102,"width":763,"height":13}},{"id":"4a12ead9-1da3-4798-8e6c-c6c4a2f1efd3","block_type":"box","text":"The value of asset-backed securities, like that of traditional fixed-income securities, typically increases","page_number":50,"box":{"x":116,"y":118,"width":763,"height":12}},{"id":"5d114a9f-028f-4656-864b-a556ecc991f5","block_type":"box","text":"when interest rates fall and decreases when interest rates rise. However, asset-backed securities differ","page_number":50,"box":{"x":116,"y":134,"width":770,"height":11}},{"id":"bac38b2d-3d45-4c60-82c2-b22e0fc58495","block_type":"box","text":"from traditional fixed-income securities because of their potential for prepayment. The price paid by a","page_number":50,"box":{"x":116,"y":149,"width":755,"height":12}},{"id":"0b4735bc-d390-47c3-9008-8d5140dd6254","block_type":"box","text":"Fund for its asset-backed securities, the yield the Fund expects to receive from such securities and the","page_number":50,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"dacda669-9a32-4eba-8e31-a69bb8e46beb","block_type":"box","text":"average life of the securities are based on a number of factors, including the anticipated rate of","page_number":50,"box":{"x":116,"y":180,"width":709,"height":12}},{"id":"aeb019a6-e9b5-4766-ad9a-4bc222a3f4aa","block_type":"box","text":"prepayment of the underlying assets. In a period of declining interest rates, borrowers may prepay the","page_number":50,"box":{"x":117,"y":196,"width":761,"height":12}},{"id":"6b2b0ab3-7def-4620-b875-37e7713611ed","block_type":"box","text":"underlying assets more quickly than anticipated, thereby reducing the yield to maturity and the average","page_number":50,"box":{"x":117,"y":211,"width":769,"height":12}},{"id":"6425b1d0-e14f-41fa-9146-46a84574fcdd","block_type":"box","text":"life of the asset-backed securities. Moreover, when a Fund reinvests the proceeds of a prepayment in","page_number":50,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"c6c05516-f32a-4f4b-824f-5da4a8576033","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":50,"box":{"x":116,"y":242,"width":772,"height":12}},{"id":"b871b318-d1c1-472e-aa6d-1cae053dcb20","block_type":"box","text":"was prepaid. To the extent that a Fund purchases asset-backed securities at a premium, prepayments","page_number":50,"box":{"x":116,"y":258,"width":765,"height":12}},{"id":"469dfcb2-2d8c-440f-bf9f-20997c8622ed","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":50,"box":{"x":117,"y":273,"width":736,"height":12}},{"id":"6ba4b266-cdc0-4442-85e4-7668519a603e","block_type":"box","text":"both scheduled payments and unscheduled prepayments will increase current and total returns and","page_number":50,"box":{"x":117,"y":289,"width":742,"height":12}},{"id":"51a9846f-5cf8-40aa-9c76-47a57bcb25e6","block_type":"box","text":"unscheduled prepayments will also accelerate the recognition of income which, when distributed to","page_number":50,"box":{"x":117,"y":304,"width":738,"height":12}},{"id":"6706abd6-fb42-466d-80ca-552d7bf9931f","block_type":"box","text":"shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of the","page_number":50,"box":{"x":116,"y":320,"width":772,"height":12}},{"id":"a327aee8-0fac-47bb-8f51-13578bed0d0d","block_type":"box","text":"underlying assets may occur at a slower than expected rate, creating maturity extension risk. This","page_number":50,"box":{"x":117,"y":335,"width":730,"height":12}},{"id":"ff5633bf-88bd-4792-8ed0-22f5a174ef29","block_type":"box","text":"particular risk may effectively change a security that was considered short- or intermediate-term at the","page_number":50,"box":{"x":117,"y":351,"width":762,"height":12}},{"id":"ddb31316-a2b4-4cc1-94d6-cf80b775bd53","block_type":"box","text":"time of purchase into a longer term security. Since the value of longer-term securities generally","page_number":50,"box":{"x":116,"y":366,"width":710,"height":12}},{"id":"d85561b8-2a4a-4768-b02f-223a8f034160","block_type":"box","text":"fluctuates more widely in response to changes in interest rates than does the value of shorter-term","page_number":50,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"265d3ef7-a848-4249-a6e1-8da499bcf3bd","block_type":"box","text":"securities, maturity extension risk could increase the volatility of the Fund. When interest rates decline,","page_number":50,"box":{"x":116,"y":397,"width":766,"height":12}},{"id":"a24f9b04-7531-4ae5-9535-1ffd84749f51","block_type":"box","text":"the value of an asset-backed security with prepayment features may not increase as much as that of","page_number":50,"box":{"x":116,"y":413,"width":751,"height":12}},{"id":"b5108e8a-0979-4835-97f1-524a6e4507b4","block_type":"box","text":"other fixed-income securities, and, as noted above, changes in market rates of interest may accelerate","page_number":50,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"fb75ba19-bb07-4147-a338-009ec1c04f42","block_type":"box","text":"or retard prepayments and thus affect maturities.","page_number":50,"box":{"x":116,"y":444,"width":368,"height":12}},{"id":"7bca89e6-6587-48cf-a6fe-a4cba5cf385c","block_type":"box","text":"Asset-Based Securities.","page_number":50,"box":{"x":116,"y":475,"width":190,"height":9}},{"id":"9b9765d4-5f6d-416f-ab31-5001678bde8a","block_type":"box","text":"Certain Funds may invest in debt, preferred or convertible securities, the","page_number":50,"box":{"x":307,"y":475,"width":548,"height":12}},{"id":"359f61ed-ac77-4b7b-a26d-ccdfd83f0e75","block_type":"box","text":"principal amount, redemption terms or conversion terms of which are related to the market price of","page_number":50,"box":{"x":117,"y":490,"width":734,"height":12}},{"id":"9597cfeb-b914-440b-8eb4-2fff383a02fb","block_type":"box","text":"some natural resource asset such as gold bullion. These securities are referred to as “asset-based","page_number":50,"box":{"x":116,"y":506,"width":737,"height":12}},{"id":"88381711-7479-4cf5-8939-e2af933996b5","block_type":"box","text":"securities.” A Fund will purchase only asset-based securities that are rated, or are issued by issuers","page_number":50,"box":{"x":116,"y":521,"width":746,"height":12}},{"id":"5cbdfe1f-3951-423c-ba6b-3b2da4fbea36","block_type":"box","text":"that have outstanding debt obligations rated, investment grade (for example, AAA, AA, A or BBB by","page_number":50,"box":{"x":116,"y":537,"width":744,"height":12}},{"id":"37efa534-8b19-4a1f-81b6-f9b0c53b509d","block_type":"box","text":"S&P Global Ratings (“S&P”) or Fitch Ratings (“Fitch”), or Baa by Moody’s Investors Service, Inc.","page_number":50,"box":{"x":116,"y":552,"width":719,"height":12}},{"id":"d09ba6b2-a381-4cc8-b397-1b15c00c381f","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":50,"box":{"x":117,"y":568,"width":721,"height":12}},{"id":"0084ee1d-d5c0-478a-9c8d-0f5b4d96fc1a","block_type":"box","text":"Manager has determined to be of similar creditworthiness. Obligations ranked in the fourth highest","page_number":50,"box":{"x":117,"y":583,"width":733,"height":12}},{"id":"ca2ae217-0e2b-436a-8367-98959bf6f709","block_type":"box","text":"rating category, while considered “investment grade,” may have certain speculative characteristics and","page_number":50,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"f264c14e-8531-4abe-938a-3424d8df7759","block_type":"box","text":"may be more likely to be downgraded than securities rated in the three highest rating categories. If an","page_number":50,"box":{"x":117,"y":614,"width":759,"height":12}},{"id":"e2999d92-e8fa-4ac6-96d8-43501888036c","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":50,"box":{"x":116,"y":630,"width":764,"height":12}},{"id":"fb613c30-6124-4ae7-b276-50f9f3decd5b","block_type":"box","text":"such backing into account in determining the creditworthiness of the issuer. While the market prices for","page_number":50,"box":{"x":116,"y":645,"width":769,"height":12}},{"id":"0c267f6b-cea1-43fc-aaa8-4f2d5771181c","block_type":"box","text":"an asset-based security and the related natural resource asset generally are expected to move in the","page_number":50,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"495e1bb4-e03e-46f4-a8c5-3bf35965e686","block_type":"box","text":"same direction, there may not be perfect correlation in the two price movements. Asset-based","page_number":50,"box":{"x":116,"y":676,"width":696,"height":12}},{"id":"fcdb9e26-cff6-4b73-b284-20c85baffeda","block_type":"box","text":"securities may not be secured by a security interest in or claim on the underlying natural resource","page_number":50,"box":{"x":116,"y":692,"width":723,"height":12}},{"id":"31015314-e571-494f-afa6-bdca7768dfb8","block_type":"box","text":"asset. The asset-based securities in which a Fund may invest may bear interest or pay preferred","page_number":50,"box":{"x":116,"y":707,"width":716,"height":12}},{"id":"d0d1bf6f-388a-4dd7-ae64-427d87cc4535","block_type":"box","text":"dividends at below market (or even relatively nominal) rates. Certain asset-based securities may be","page_number":50,"box":{"x":116,"y":723,"width":738,"height":12}},{"id":"6d4e2750-6745-468b-8729-dac18c9f8780","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":50,"box":{"x":117,"y":738,"width":738,"height":12}},{"id":"7aa1849f-6461-4f11-a643-e48c97d9ddd0","block_type":"box","text":"stated amount of the asset to which it is related. In such instance, because no Fund presently intends","page_number":50,"box":{"x":116,"y":754,"width":753,"height":12}},{"id":"94624756-01ef-4865-8e5f-ba6e44173fb2","block_type":"box","text":"to invest directly in natural resource assets, a Fund would sell the asset-based security in the","page_number":50,"box":{"x":116,"y":769,"width":691,"height":12}},{"id":"433e4fd2-6770-4a13-ae25-d808495faae6","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":50,"box":{"x":116,"y":785,"width":733,"height":12}},{"id":"3e27df06-4347-4dc0-9e3a-fb5118f51c62","block_type":"box","text":"asset exceeds the stated principal amount and thereby realize the appreciation in the underlying asset.","page_number":50,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"cafc58b2-5305-422a-862e-3ab7235e1e66","block_type":"box","text":"Precious Metal-Related Securities.","page_number":50,"box":{"x":116,"y":831,"width":256,"height":10}},{"id":"77b49441-1c7e-442e-b00c-a6be5ed1ea6a","block_type":"box","text":"A Fund may invest in the equity and other securities of companies","page_number":50,"box":{"x":374,"y":831,"width":500,"height":12}},{"id":"978dff96-6db0-4558-8c88-c0edce0d81a7","block_type":"box","text":"that explore for, extract, process or deal in precious metals (","page_number":50,"box":{"x":116,"y":847,"width":447,"height":12}},{"id":"40772157-e726-46d5-8eb6-c281f05fd98a","block_type":"box","text":"e.g.","page_number":50,"box":{"x":564,"y":849,"width":26,"height":10}},{"id":"00d97f6e-3518-4505-836b-af81c2bb74ef","block_type":"box","text":", gold, silver and platinum), and in","page_number":50,"box":{"x":593,"y":847,"width":255,"height":12}},{"id":"173e3c5a-f050-4daf-99ae-983eaae3ffe0","block_type":"box","text":"asset-based securities indexed to the value of such metals. Such securities may be purchased when","page_number":50,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"ffe13ae2-4e87-4cbe-b62e-fb081f6a90a1","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":50,"box":{"x":116,"y":878,"width":769,"height":12}},{"id":"c4b43d9c-9844-4c0f-8784-f73dc2f23c6f","block_type":"box","text":"II-2","page_number":50,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"9292231f-c2ad-4b30-908f-0b6d77ec9a64","block_type":"box","text":"NM1026U-6033243-50/221","page_number":50,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"894c734c-41e3-44fa-bea1-9bacf0031e09","block_type":"box","text":"assets or when the values of precious metals are expected to benefit from inflationary pressure or","page_number":51,"box":{"x":116,"y":87,"width":731,"height":12}},{"id":"5dac9dcf-46c9-48ba-990c-4bcc96e753b9","block_type":"box","text":"other economic, political or financial uncertainty or instability. Based on historical experience, during","page_number":51,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"e272195a-8aff-496e-ab91-ac19eb71ac34","block_type":"box","text":"periods of economic or financial instability the securities of companies involved in precious metals may","page_number":51,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"037c58c7-937a-42dd-ba1b-ccd9e53d056b","block_type":"box","text":"be subject to extreme price fluctuations, reflecting the high volatility of precious metal prices during","page_number":51,"box":{"x":117,"y":134,"width":736,"height":12}},{"id":"303980e4-298d-448a-b008-e31e51e1b64c","block_type":"box","text":"such periods. In addition, the instability of precious metal prices may result in volatile earnings of","page_number":51,"box":{"x":116,"y":149,"width":721,"height":12}},{"id":"57b5adb9-588f-4aff-9472-8bb04308fd57","block_type":"box","text":"precious metal-related companies, which may, in turn, adversely affect the financial condition of such","page_number":51,"box":{"x":117,"y":165,"width":754,"height":12}},{"id":"fb0425be-8fda-4f23-9797-7ad368c33c31","block_type":"box","text":"companies. The major producers of gold include the Republic of South Africa, Russia, Canada, the","page_number":51,"box":{"x":116,"y":180,"width":739,"height":12}},{"id":"1530a999-c068-406e-8156-241aefb62fb2","block_type":"box","text":"United States, Brazil and Australia. Sales of gold by Russia are largely unpredictable and often relate","page_number":51,"box":{"x":117,"y":196,"width":754,"height":12}},{"id":"da648346-f33b-4e29-8da2-0928baa4133d","block_type":"box","text":"to political and economic considerations rather than to market forces. Economic, financial, social and","page_number":51,"box":{"x":116,"y":211,"width":753,"height":12}},{"id":"85801703-e57c-4a44-9c9f-1ea1cae113ee","block_type":"box","text":"political factors within South Africa may significantly affect South African gold production.","page_number":51,"box":{"x":117,"y":227,"width":663,"height":12}},{"id":"a7d30a13-9979-4e30-abf9-b902d89becd2","block_type":"box","text":"Borrowing and Leverage.","page_number":51,"box":{"x":116,"y":258,"width":201,"height":12}},{"id":"ee014152-0928-45b4-a043-b30129517d2a","block_type":"box","text":"Each Fund may borrow as a temporary measure for extraordinary or","page_number":51,"box":{"x":318,"y":258,"width":517,"height":12}},{"id":"50b47286-dd81-459f-ba32-42b0e5410c5b","block_type":"box","text":"emergency purposes, including to meet redemptions or to settle securities transactions. Certain Funds","page_number":51,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"0445a368-9079-4ef0-898d-c53098751f91","block_type":"box","text":"will not purchase securities at any time when borrowings exceed 5% of their total assets, except (a) to","page_number":51,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"4169e4f6-1d4e-4035-ab6b-b4cb02b96d87","block_type":"box","text":"honor prior commitments or (b) to exercise subscription rights when outstanding borrowings have been","page_number":51,"box":{"x":117,"y":304,"width":768,"height":12}},{"id":"d7f99b23-64ad-469a-a834-cfa36addc6cf","block_type":"box","text":"obtained exclusively for settlements of other securities transactions.","page_number":51,"box":{"x":116,"y":320,"width":508,"height":12}},{"id":"940bcb45-20b1-4c3d-b53a-760c58100464","block_type":"box","text":"Certain Funds may also borrow in order to make investments, to the extent disclosed in such Fund’s","page_number":51,"box":{"x":117,"y":351,"width":748,"height":12}},{"id":"e39e5baa-e091-4878-a1b4-a215b95a6f2c","block_type":"box","text":"Prospectus. The purchase of securities while borrowings are outstanding will have the effect of","page_number":51,"box":{"x":117,"y":366,"width":707,"height":12}},{"id":"5eefc206-99b0-448a-a84f-960d9875e503","block_type":"box","text":"leveraging the Fund. Such leveraging increases the Fund’s exposure to capital risk, and borrowed","page_number":51,"box":{"x":117,"y":382,"width":731,"height":12}},{"id":"ae9bd43d-971a-4edc-91d6-c56296791d73","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":51,"box":{"x":116,"y":397,"width":757,"height":12}},{"id":"ae781492-8d37-419b-846c-ed355137e2a5","block_type":"box","text":"an opportunity for greater total return, but, at the same time, creates special risks. For example,","page_number":51,"box":{"x":116,"y":413,"width":714,"height":12}},{"id":"d9a2c90d-1168-4fa1-8e0d-eefbd7823d1a","block_type":"box","text":"leveraging may exaggerate changes in the net asset value (“NAV”) of Fund shares and in the yield on","page_number":51,"box":{"x":117,"y":428,"width":758,"height":12}},{"id":"9f3fecb7-14d0-4506-a261-c2fdbb885770","block_type":"box","text":"the Fund’s portfolio. Although the principal of such borrowings will be fixed, the Fund’s assets may","page_number":51,"box":{"x":116,"y":444,"width":734,"height":12}},{"id":"d2a8c304-4ff2-4e52-ac5e-a5c250ea29c4","block_type":"box","text":"change in value during the time the borrowings are outstanding. Borrowings will create interest","page_number":51,"box":{"x":116,"y":459,"width":707,"height":12}},{"id":"274c1c30-4c56-4416-9cc2-dbb97fce9e2f","block_type":"box","text":"expenses for the Fund that can exceed the income from the assets purchased with the borrowings. To","page_number":51,"box":{"x":116,"y":475,"width":764,"height":12}},{"id":"5554eadb-0737-4b8f-bb8a-2a1a4cedfe9d","block_type":"box","text":"the extent the income or capital appreciation derived from securities purchased with borrowed funds","page_number":51,"box":{"x":116,"y":490,"width":747,"height":12}},{"id":"e6e8e84b-cd93-4f6a-bb42-83dac0fc72ae","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":51,"box":{"x":116,"y":506,"width":768,"height":12}},{"id":"6528655d-8e8e-4218-b625-5fae78935fac","block_type":"box","text":"if leverage had not been used. Conversely, if the income or capital appreciation from the securities","page_number":51,"box":{"x":117,"y":521,"width":735,"height":12}},{"id":"c42f256f-b2d5-4d94-922e-617fcac6ae45","block_type":"box","text":"purchased with such borrowed funds is not sufficient to cover the cost of borrowing, the return to the","page_number":51,"box":{"x":117,"y":537,"width":748,"height":12}},{"id":"0994e271-9fd5-46ae-94f4-712f81703821","block_type":"box","text":"Fund will be less than if leverage had not been used and, therefore, the amount available for","page_number":51,"box":{"x":117,"y":552,"width":690,"height":12}},{"id":"7dd0e5a9-3115-48f4-b3d0-f5d9d9654cca","block_type":"box","text":"distribution to shareholders as dividends will be reduced. In the latter case, the Manager in its best","page_number":51,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"50d4bc8f-e992-436b-9217-c7d0c2a15b45","block_type":"box","text":"judgment nevertheless may determine to maintain the Fund’s leveraged position if it expects that the","page_number":51,"box":{"x":115,"y":583,"width":752,"height":12}},{"id":"478b63ab-389a-47c3-ad72-e002a16a28dd","block_type":"box","text":"benefits to the Fund’s shareholders of maintaining the leveraged position will outweigh the current","page_number":51,"box":{"x":117,"y":599,"width":730,"height":12}},{"id":"1e62063c-5f8d-4b21-9abe-5352117f5006","block_type":"box","text":"reduced return.","page_number":51,"box":{"x":117,"y":614,"width":117,"height":10}},{"id":"410cb7f1-e51b-4414-b5c9-5bb0b2d31ab3","block_type":"box","text":"Certain types of borrowings by a Fund may result in the Fund being subject to covenants in credit","page_number":51,"box":{"x":117,"y":645,"width":727,"height":12}},{"id":"7564d762-8c53-462f-bf2b-bf70c0f58105","block_type":"box","text":"agreements relating to asset coverage, portfolio composition requirements and other matters. It is not","page_number":51,"box":{"x":116,"y":661,"width":753,"height":12}},{"id":"cc3b1bbb-509a-43eb-b4ee-d8ddfc67f990","block_type":"box","text":"anticipated that observance of such covenants would impede the Manager from managing a Fund’s","page_number":51,"box":{"x":116,"y":676,"width":739,"height":12}},{"id":"d13cc184-9a11-4932-b3c3-8d9dd36c7c2d","block_type":"box","text":"portfolio in accordance with the Fund’s investment objectives and policies. However, a breach of any","page_number":51,"box":{"x":117,"y":692,"width":746,"height":12}},{"id":"54b41fa1-e96c-4da5-acc5-37e88e5cffb0","block_type":"box","text":"such covenants not cured within the specified cure period may result in acceleration of outstanding","page_number":51,"box":{"x":116,"y":707,"width":732,"height":12}},{"id":"3c94f22a-5d4f-49a4-9378-81395c0c35fc","block_type":"box","text":"indebtedness and require the Fund to dispose of portfolio investments at a time when it may be","page_number":51,"box":{"x":117,"y":723,"width":706,"height":12}},{"id":"316e8f97-50ef-4baf-980c-24db126f07e7","block_type":"box","text":"disadvantageous to do so.","page_number":51,"box":{"x":116,"y":738,"width":195,"height":12}},{"id":"20a5f45f-53f5-4d82-a439-4a2ef3cdbfd1","block_type":"box","text":"Each Fund may at times borrow from affiliates of the Manager, provided that the terms of such","page_number":51,"box":{"x":117,"y":769,"width":699,"height":12}},{"id":"c7a75805-5ea5-459a-84d6-4617329f41b7","block_type":"box","text":"borrowings are no less favorable than those available from comparable sources of funds in the","page_number":51,"box":{"x":117,"y":785,"width":701,"height":12}},{"id":"b09214ce-c19a-436e-b36a-b791eebec1e0","block_type":"box","text":"marketplace.","page_number":51,"box":{"x":117,"y":800,"width":94,"height":12}},{"id":"1d03f3f7-0bc4-42e2-bdc2-10547e4fa835","block_type":"box","text":"Cash Management.","page_number":51,"box":{"x":117,"y":831,"width":151,"height":12}},{"id":"c7dc486a-0199-40e1-8bf2-90ec74996ed4","block_type":"box","text":"Generally, the Manager will employ futures and options on futures to provide","page_number":51,"box":{"x":269,"y":831,"width":578,"height":12}},{"id":"aba00eca-628f-40a9-a27c-6c540057bd61","block_type":"box","text":"liquidity necessary to meet anticipated redemptions or for day-to-day operating purposes. However, if","page_number":51,"box":{"x":117,"y":847,"width":756,"height":12}},{"id":"af74aec0-a8cb-42b3-883e-8ea899e5feda","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":51,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"54113170-d694-4637-902c-734a6225c456","block_type":"box","text":"certain types of instruments with remaining maturities of 397 days or less for liquidity purposes. Such","page_number":51,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"2354409b-7fce-46be-bdbd-e77906e6cded","block_type":"box","text":"II-3","page_number":51,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"9b9f481f-b18e-4043-9464-bc2389fb43db","block_type":"box","text":"NM1026U-6033243-51/221","page_number":51,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d64937aa-b166-4524-b5e1-ca8152f7ce59","block_type":"box","text":"instruments would consist of: (i) obligations of the U.S. Government, its agencies, instrumentalities,","page_number":52,"box":{"x":117,"y":87,"width":740,"height":12}},{"id":"26829518-82c6-4b26-ae01-6a224c6294bd","block_type":"box","text":"authorities or political subdivisions (“U.S. Government Securities”); (ii) other fixed-income securities","page_number":52,"box":{"x":116,"y":102,"width":742,"height":13}},{"id":"b6757f92-1928-4318-805c-92f93247d61a","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":52,"box":{"x":117,"y":118,"width":721,"height":12}},{"id":"330b70ef-8f10-4615-a0e9-fa9af480db72","block_type":"box","text":"opinion of the Manager; (iii) commercial paper; (iv) bank obligations, including negotiable certificates of","page_number":52,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"e567e349-d7b9-45ae-9672-8f749a3c98ec","block_type":"box","text":"deposit, time deposits and bankers’ acceptances; and (v) repurchase agreements. At the time the","page_number":52,"box":{"x":116,"y":149,"width":730,"height":12}},{"id":"e39bfb94-3632-4bda-abf8-f321e4756ab3","block_type":"box","text":"Fund invests in commercial paper, bank obligations or repurchase agreements, the issuer or the","page_number":52,"box":{"x":117,"y":165,"width":718,"height":12}},{"id":"2047fdc7-6b62-478b-b1e0-dc15884fedf6","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":52,"box":{"x":117,"y":180,"width":752,"height":12}},{"id":"b9e48975-6596-4fd3-a183-52518601d0bd","block_type":"box","text":"outstanding commercial paper, bank obligations or other short-term obligations rated Prime-1 by","page_number":52,"box":{"x":116,"y":196,"width":719,"height":12}},{"id":"6777a9a2-b62c-4727-a68c-1657af33433b","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":52,"box":{"x":117,"y":211,"width":731,"height":12}},{"id":"2fb3b088-404a-415f-a95d-4df090273fe2","block_type":"box","text":"quality in the opinion of the Manager. For more information on money market instruments, see “Money","page_number":52,"box":{"x":116,"y":227,"width":765,"height":12}},{"id":"1a4d46bb-85c9-42a2-87c9-dfe191e98daa","block_type":"box","text":"Market Securities” below.","page_number":52,"box":{"x":117,"y":242,"width":192,"height":10}},{"id":"3b95322b-cbd2-4999-b2b4-063e65a0b203","block_type":"box","text":"Collateralized Debt Obligations.","page_number":52,"box":{"x":117,"y":273,"width":251,"height":12}},{"id":"34e97be7-3c9f-476f-81f2-e75ec378b4af","block_type":"box","text":"Certain Funds may invest in collateralized debt obligations","page_number":52,"box":{"x":369,"y":273,"width":444,"height":12}},{"id":"0feac7c6-41c6-4e2d-8e92-e649c947bd70","block_type":"box","text":"(“CDOs”), which include collateralized bond obligations (“CBOs”), collateralized loan obligations","page_number":52,"box":{"x":117,"y":289,"width":713,"height":12}},{"id":"890227fd-d5cb-411b-90f9-339b3ebeb0f8","block_type":"box","text":"(“CLOs”) and other similarly structured securities. CDOs are types of asset-backed securities. A CBO","page_number":52,"box":{"x":117,"y":304,"width":756,"height":12}},{"id":"3a9b9806-556b-4be3-b85a-c5a3f2a1d8e9","block_type":"box","text":"is ordinarily issued by a trust or other special purpose entity (“SPE”) and is typically backed by a","page_number":52,"box":{"x":117,"y":320,"width":716,"height":12}},{"id":"706834f4-fcc0-4543-977f-b014bd264257","block_type":"box","text":"diversified pool of fixed-income securities (which may include high risk, below investment grade","page_number":52,"box":{"x":116,"y":335,"width":713,"height":12}},{"id":"693b09ce-201d-4cac-9c6d-d4e851f644b5","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":52,"box":{"x":116,"y":351,"width":722,"height":12}},{"id":"f8b75740-2b4c-4c81-b7c6-7e8bad4f1d4c","block_type":"box","text":"collateralized by a pool of loans, which may include, among others, domestic and non-U.S. senior","page_number":52,"box":{"x":116,"y":366,"width":729,"height":12}},{"id":"8902e5e4-29a9-4814-ab8b-78766be23db3","block_type":"box","text":"secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be","page_number":52,"box":{"x":116,"y":382,"width":756,"height":12}},{"id":"e4779f63-e038-4e74-8743-09fa0c92d1c6","block_type":"box","text":"rated below investment grade or equivalent unrated loans, held by such issuer. Investments in a CLO","page_number":52,"box":{"x":117,"y":397,"width":757,"height":12}},{"id":"f9d51f93-8ad0-483c-8eb7-240cb02888b6","block_type":"box","text":"organized outside of the United States may not be deemed to be foreign securities if the CLO is","page_number":52,"box":{"x":116,"y":413,"width":715,"height":12}},{"id":"76ef1c5a-2253-4278-8841-6112bd93cdb9","block_type":"box","text":"collateralized by a pool of loans, a substantial portion of which are U.S. loans. Although certain CDOs","page_number":52,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"949ad22c-ffe2-43f2-ae45-ab925997c8ac","block_type":"box","text":"may benefit from credit enhancement in the form of a senior-subordinate structure, over","page_number":52,"box":{"x":117,"y":444,"width":655,"height":12}},{"id":"1860f6d0-1e96-4591-949e-2ccba7cd774e","block_type":"box","text":"collateralization or bond insurance, such enhancement may not always be present, and may fail to","page_number":52,"box":{"x":116,"y":459,"width":735,"height":12}},{"id":"96dede74-a9c7-48c2-8bdc-8b24e1e0dde7","block_type":"box","text":"protect a Fund against the risk of loss on default of the collateral. Certain CDO issuers may use","page_number":52,"box":{"x":117,"y":475,"width":713,"height":12}},{"id":"e848611a-e7c3-4ef2-82aa-0b937984d70a","block_type":"box","text":"derivatives contracts to create “synthetic” exposure to assets rather than holding such assets directly,","page_number":52,"box":{"x":116,"y":490,"width":758,"height":12}},{"id":"e6cc3826-251d-46a4-bf5a-ff5eb4a9c666","block_type":"box","text":"which entails the risks of derivative instruments described elsewhere in this SAI. CDOs may charge","page_number":52,"box":{"x":116,"y":506,"width":742,"height":12}},{"id":"78a0609d-5b1e-4a15-91af-c99c04aadb58","block_type":"box","text":"management fees and administrative expenses, which are in addition to those of a Fund.","page_number":52,"box":{"x":117,"y":521,"width":664,"height":12}},{"id":"0270032a-ca8d-44b0-bde2-05a81d7963a9","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":52,"box":{"x":117,"y":552,"width":724,"height":12}},{"id":"9d97419a-d830-4ee9-a8bc-42edc8946b38","block_type":"box","text":"tranches, varying in risk and yield. The riskiest portion is the “equity” tranche, which bears the first loss","page_number":52,"box":{"x":116,"y":568,"width":765,"height":12}},{"id":"ba8863c6-4a49-4ab5-81aa-f4702808a9f8","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":52,"box":{"x":116,"y":583,"width":768,"height":12}},{"id":"94fd03d5-1062-4595-8638-22883a60f1c2","block_type":"box","text":"from default (though such protection is not complete). Since it is partially protected from defaults, a","page_number":52,"box":{"x":116,"y":599,"width":737,"height":12}},{"id":"5522bc82-0cbb-4283-b167-f6e7b75da79d","block_type":"box","text":"senior tranche from a CBO or CLO typically has higher ratings and lower yields than its underlying","page_number":52,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"0e314e34-636d-44ca-b281-34d7bc8962a7","block_type":"box","text":"securities, and may be rated investment grade. Despite the protection from the equity tranche, CBO or","page_number":52,"box":{"x":116,"y":630,"width":765,"height":12}},{"id":"ff2f5229-369d-43d9-9112-65d719fe4bca","block_type":"box","text":"CLO tranches can experience substantial losses due to actual defaults, downgrades of the underlying","page_number":52,"box":{"x":117,"y":645,"width":758,"height":12}},{"id":"7b9f9286-e15a-4f13-b144-f99413ccaeec","block_type":"box","text":"collateral by rating agencies, forced liquidation of the collateral pool due to a failure of coverage tests,","page_number":52,"box":{"x":116,"y":661,"width":752,"height":12}},{"id":"bc9b150e-4620-4c77-a6c2-2825e91b3e2e","block_type":"box","text":"increased sensitivity to defaults due to collateral default and disappearance of protecting tranches,","page_number":52,"box":{"x":117,"y":676,"width":728,"height":12}},{"id":"0af63cbc-be99-4a4f-a3a6-88e25452b837","block_type":"box","text":"market anticipation of defaults as well as investor aversion to CBO or CLO securities as a class.","page_number":52,"box":{"x":117,"y":692,"width":710,"height":12}},{"id":"f301f0dc-dea7-4039-93fa-04d8ec2f4476","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":52,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"fc1e4197-6b0e-4b72-b1bd-abcdf55abed5","block_type":"box","text":"of obligations of the same type rather than cash), which involves continued exposure to default risk","page_number":52,"box":{"x":116,"y":723,"width":734,"height":12}},{"id":"55b3aa63-f503-4adf-8bf9-63668b1f8fbe","block_type":"box","text":"with respect to such payments.","page_number":52,"box":{"x":116,"y":738,"width":229,"height":12}},{"id":"e69aff99-e10d-4336-a410-8b31a21b1475","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":52,"box":{"x":116,"y":769,"width":728,"height":12}},{"id":"33acf800-3885-4ee7-974a-5e65cc80a3dd","block_type":"box","text":"class of the CDO in which a Fund invests. Normally, CBOs, CLOs and other CDOs are privately","page_number":52,"box":{"x":116,"y":785,"width":712,"height":12}},{"id":"36a0bd4f-f976-481d-85d4-977f9aef64c2","block_type":"box","text":"offered and sold, and thus are not registered under the securities laws. However, an active dealer","page_number":52,"box":{"x":116,"y":800,"width":725,"height":12}},{"id":"a3154ddf-4823-4781-86e7-3d547a975bc3","block_type":"box","text":"market may exist for CDOs, allowing a CDO to qualify for Rule 144A transactions. In addition to the","page_number":52,"box":{"x":117,"y":816,"width":736,"height":12}},{"id":"54c78625-538b-43a5-8894-f2bf98639645","block_type":"box","text":"normal risks associated with fixed-income securities and asset-backed securities generally discussed","page_number":52,"box":{"x":117,"y":831,"width":755,"height":12}},{"id":"77d68203-d1c0-4358-969d-4c642db49964","block_type":"box","text":"elsewhere in this SAI, CDOs carry additional risks including, but not limited to: (i) the possibility that","page_number":52,"box":{"x":116,"y":847,"width":742,"height":12}},{"id":"7f6b4a82-5132-49b4-bbbd-0113f20a5a7a","block_type":"box","text":"distributions from collateral securities will not be adequate to make interest or other payments; (ii) the","page_number":52,"box":{"x":116,"y":862,"width":756,"height":12}},{"id":"c1a9aa6f-a9c4-4d1e-806e-9740b235a381","block_type":"box","text":"risk that the collateral may default or decline in value or be downgraded, if rated by a nationally","page_number":52,"box":{"x":117,"y":878,"width":708,"height":12}},{"id":"332804ea-24a7-4fc9-a2d0-5d82bc4f07b7","block_type":"box","text":"II-4","page_number":52,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"26daa314-6da2-462e-9b03-a1ff2cac06f9","block_type":"box","text":"NM1026U-6033243-52/221","page_number":52,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"9363f8f0-54bf-4f03-87d6-fc5ee128ff82","block_type":"box","text":"recognized statistical rating organization (“NRSRO”); (iii) a Fund may invest in tranches of CDOs that","page_number":53,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"00496fa7-3eb9-4931-b267-dfd3eff76c0e","block_type":"box","text":"are subordinate to other tranches; (iv) the structure and complexity of the transaction and the legal","page_number":53,"box":{"x":116,"y":102,"width":736,"height":13}},{"id":"f298e16f-8f8a-4ab4-bf9b-e56bfc32ea76","block_type":"box","text":"documents could lead to disputes among investors regarding the characterization of proceeds; (v) the","page_number":53,"box":{"x":116,"y":118,"width":760,"height":12}},{"id":"0068a647-58f4-4985-b000-44ae7658e562","block_type":"box","text":"investment return achieved by the Fund could be significantly different than those predicted by financial","page_number":53,"box":{"x":117,"y":134,"width":771,"height":12}},{"id":"8536d267-7d61-4af3-871a-9e4317484fed","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":53,"box":{"x":117,"y":149,"width":765,"height":12}},{"id":"a05c5728-f917-4a7c-a4fa-dfd617e22e35","block_type":"box","text":"liquidation due to technical defaults such as coverage test failures; and (viii) the CDO’s manager may","page_number":53,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"15d0403a-1ce7-49b7-b144-2823b8d0a311","block_type":"box","text":"perform poorly.","page_number":53,"box":{"x":117,"y":180,"width":117,"height":12}},{"id":"09cb0899-208e-4d0d-84ec-3d8002adcf66","block_type":"box","text":"Commercial Paper.","page_number":53,"box":{"x":117,"y":211,"width":150,"height":12}},{"id":"090fb831-cc68-4409-853c-95f4330e13ab","block_type":"box","text":"Certain Funds may purchase commercial paper. Commercial paper purchasable","page_number":53,"box":{"x":268,"y":211,"width":607,"height":12}},{"id":"830b11cc-37d2-4137-b61b-db07c1ee4f68","block_type":"box","text":"by each Fund includes “Section 4(a)(2) paper,” a term that includes debt obligations issued in reliance","page_number":53,"box":{"x":117,"y":227,"width":760,"height":12}},{"id":"dcad2948-006b-4a89-b48b-24995b05ff67","block_type":"box","text":"on the “private placement” exemption from registration afforded by Section 4(a)(2) of the Securities","page_number":53,"box":{"x":116,"y":242,"width":739,"height":12}},{"id":"117cbbbe-ba0e-4ec4-a90a-70d03b3a8793","block_type":"box","text":"Act. Section 4(a)(2) paper is restricted as to disposition under the Federal securities laws, and is","page_number":53,"box":{"x":116,"y":258,"width":719,"height":12}},{"id":"15f03398-7833-4bed-ae4b-53b721d5423f","block_type":"box","text":"frequently sold (and resold) to institutional investors such as the Fund through or with the assistance of","page_number":53,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"24685694-5834-47ab-94ce-319785410f2f","block_type":"box","text":"investment dealers who make a market in the Section 4(a)(2) paper, thereby providing liquidity. Certain","page_number":53,"box":{"x":117,"y":289,"width":769,"height":12}},{"id":"1ae0f8d7-2677-40ff-b247-7b42ccb725d4","block_type":"box","text":"transactions in Section 4(a)(2) paper may qualify for the registration exemption provided in Rule 144A","page_number":53,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"d7635d3e-7357-4d09-a2c1-bb3b4c7674ec","block_type":"box","text":"under the Securities Act. Most Funds can purchase commercial paper rated (at the time of purchase)","page_number":53,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"ed2a1f8e-efb9-4872-8df6-be7e84767bf4","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":53,"box":{"x":116,"y":335,"width":772,"height":12}},{"id":"2b947780-19d6-42eb-b3fc-f2fa3946eda9","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":53,"box":{"x":116,"y":351,"width":675,"height":12}},{"id":"c007e2b5-0ecd-4955-b36c-404cb50a202b","block_type":"box","text":"Commercial paper is generally considered to be short-term unsecured debt of corporations. Like all","page_number":53,"box":{"x":117,"y":382,"width":740,"height":12}},{"id":"5786ca24-8aa4-40a2-8464-7d07391a5584","block_type":"box","text":"fixed income securities, commercial paper prices are susceptible to fluctuations in interest rates. If","page_number":53,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"9ceffa27-a53a-406a-953b-3c9c721d174d","block_type":"box","text":"interest rates rise, commercial paper prices will decline and vice versa. However, the short-term nature","page_number":53,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"c30d8b87-acdb-4e04-942d-12aeecf2cb3d","block_type":"box","text":"of a commercial paper investment generally makes it less susceptible to volatility than many other fixed","page_number":53,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"76e6fc8c-ab83-43cd-b55f-a7b65f7002c2","block_type":"box","text":"income securities because interest rate risk typically increases as maturity lengths increase.","page_number":53,"box":{"x":117,"y":444,"width":686,"height":12}},{"id":"fc634241-03fb-4a4f-be33-772f62c228b1","block_type":"box","text":"Commercial paper tends to yield smaller returns than longer-term corporate debt because securities","page_number":53,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"6187ed84-ca9d-4c23-ac2c-f00da4167c72","block_type":"box","text":"with shorter maturities typically have lower effective yields than those with longer maturities.","page_number":53,"box":{"x":116,"y":475,"width":686,"height":12}},{"id":"8243d85d-9567-4317-b901-0e5d8aab31a0","block_type":"box","text":"Commodity-Linked Derivative Instruments and Hybrid Instruments.","page_number":53,"box":{"x":117,"y":506,"width":535,"height":12}},{"id":"08ec8d5f-a0cf-4053-98e8-0de4c20734ad","block_type":"box","text":"Certain Funds seek to gain","page_number":53,"box":{"x":653,"y":506,"width":210,"height":12}},{"id":"b1dcc5fe-ef9b-474a-bc68-9c8c71dc8b08","block_type":"box","text":"exposure to the commodities markets primarily through investments in hybrid instruments. Hybrid","page_number":53,"box":{"x":116,"y":521,"width":727,"height":12}},{"id":"4a2e46e8-2328-436b-8450-7bc47aba3565","block_type":"box","text":"instruments are either equity or debt derivative securities with one or more commodity-dependent","page_number":53,"box":{"x":117,"y":537,"width":727,"height":12}},{"id":"9ff0e104-e1ca-465c-9a30-08c2f431222f","block_type":"box","text":"components that have payment features similar to a commodity futures contract, a commodity option","page_number":53,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"7d78d80b-ffb1-46a2-92e7-3097f019037a","block_type":"box","text":"contract, or a combination of both. Therefore, these instruments are “commodity-linked.” They are","page_number":53,"box":{"x":116,"y":568,"width":731,"height":12}},{"id":"bd7d9bbf-ee56-4991-9250-d4aba62697c0","block_type":"box","text":"considered “hybrid” instruments because they have both commodity-like and security-like","page_number":53,"box":{"x":116,"y":583,"width":667,"height":12}},{"id":"53c2ebe9-95d7-4343-a5da-35693e036a7b","block_type":"box","text":"characteristics. Hybrid instruments are derivative instruments because at least part of their value is","page_number":53,"box":{"x":116,"y":599,"width":738,"height":12}},{"id":"271e0b70-2cfd-4129-ac09-057501848ebe","block_type":"box","text":"derived from the value of an underlying commodity, futures contract, index or other readily measurable","page_number":53,"box":{"x":116,"y":614,"width":766,"height":12}},{"id":"e943f919-e573-4a33-bea6-6556e0e956c7","block_type":"box","text":"economic variable.","page_number":53,"box":{"x":116,"y":630,"width":145,"height":9}},{"id":"bcb1e40a-5a0c-4789-a55c-aca30c0f07ee","block_type":"box","text":"The prices of commodity-linked derivative instruments may move in different directions than","page_number":53,"box":{"x":116,"y":661,"width":680,"height":12}},{"id":"4bbd485d-24dc-4bfc-b8c6-3e5bf1041555","block_type":"box","text":"investments in traditional equity and debt securities when the value of those traditional securities is","page_number":53,"box":{"x":117,"y":676,"width":731,"height":12}},{"id":"dc07b74f-1588-44ab-acd0-3bda1588cd58","block_type":"box","text":"declining due to adverse economic conditions. As an example, during periods of rising inflation, debt","page_number":53,"box":{"x":116,"y":692,"width":744,"height":12}},{"id":"9db067f1-f432-4ee7-ac33-79dd4215b0d6","block_type":"box","text":"securities have historically tended to decline in value due to the general increase in prevailing interest","page_number":53,"box":{"x":116,"y":707,"width":753,"height":12}},{"id":"f82ced88-baf1-4f0c-bf84-f442e4eb634c","block_type":"box","text":"rates. Conversely, during those same periods of rising inflation, the prices of certain commodities, such","page_number":53,"box":{"x":117,"y":723,"width":763,"height":12}},{"id":"953999d2-f4f0-4490-a3a8-7ae69a238494","block_type":"box","text":"as oil and metals, have historically tended to increase. Of course, there cannot be any guarantee that","page_number":53,"box":{"x":116,"y":738,"width":752,"height":12}},{"id":"243c1e6d-007b-4a23-bfb2-dc5bf1be62ca","block_type":"box","text":"these investments will perform in that manner in the future, and at certain times the price movements","page_number":53,"box":{"x":116,"y":754,"width":749,"height":12}},{"id":"1407ac94-f4f6-430c-a893-c86d54bf3991","block_type":"box","text":"of commodity-linked instruments have been parallel to those of debt and equity securities.","page_number":53,"box":{"x":116,"y":769,"width":665,"height":12}},{"id":"f1ccd3b2-b0fb-43e3-a616-5bb242546944","block_type":"box","text":"Commodities have historically tended to increase and decrease in value during different parts of the","page_number":53,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"6e09f3ed-107c-46be-8c0d-2646b0d1e7ad","block_type":"box","text":"business cycle than financial assets. Nevertheless, at various times, commodities prices may move in","page_number":53,"box":{"x":117,"y":800,"width":753,"height":12}},{"id":"c33af020-bd60-43b4-b9a2-ce62d693dda2","block_type":"box","text":"tandem with the prices of financial assets and thus may not provide overall portfolio diversification","page_number":53,"box":{"x":116,"y":816,"width":725,"height":12}},{"id":"bd6f0e29-bbf7-4f0d-8f36-f1528575e389","block_type":"box","text":"benefits. Under favorable economic conditions, the Fund’s investments may be expected to under","page_number":53,"box":{"x":117,"y":831,"width":731,"height":12}},{"id":"d66974d9-829c-469c-aa7a-b85ef0fc0871","block_type":"box","text":"perform an investment in traditional securities. Over the long term, the returns on the Fund’s","page_number":53,"box":{"x":117,"y":847,"width":688,"height":12}},{"id":"078715aa-5b52-403c-9916-e2e5452ef097","block_type":"box","text":"investments are expected to exhibit low or negative correlation with stocks and bonds.","page_number":53,"box":{"x":117,"y":862,"width":643,"height":12}},{"id":"32551f29-9104-452c-9e95-43bc04e4235f","block_type":"box","text":"II-5","page_number":53,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"3bf62e2b-9969-49d1-be34-3774179e70c2","block_type":"box","text":"NM1026U-6033243-53/221","page_number":53,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"60cc99b6-eeec-46e2-b38e-96a685c8fa98","block_type":"box","text":"Qualifying Hybrid Instruments.","page_number":54,"box":{"x":117,"y":87,"width":218,"height":12}},{"id":"348cff64-1a61-4280-90a1-2612111245fe","block_type":"box","text":"Certain Funds may invest in hybrid instruments that qualify for exclusion","page_number":54,"box":{"x":336,"y":87,"width":533,"height":12}},{"id":"27e27585-44ed-40a4-9cfe-a64e7e39c074","block_type":"box","text":"from regulation under the Commodity Exchange Act","page_number":54,"box":{"x":116,"y":102,"width":383,"height":13}},{"id":"53c7a8a4-d5bf-4f11-8158-022b97835597","block_type":"box","text":"and the regulations adopted thereunder. A hybrid","page_number":54,"box":{"x":499,"y":103,"width":362,"height":12}},{"id":"ff147aba-d74b-45be-b370-bc5d3e6371bb","block_type":"box","text":"instrument that qualifies for this exclusion from r","page_number":54,"box":{"x":117,"y":118,"width":347,"height":12}},{"id":"c3e81f60-4eb2-49d3-9383-f068e1076b88","block_type":"box","text":"egulation must be “predominantly a security.” A hybrid","page_number":54,"box":{"x":464,"y":118,"width":398,"height":12}},{"id":"a5ad5cba-7e69-4150-92d6-0340c4dc7918","block_type":"box","text":"instrument is considered to be predominantly a security if","page_number":54,"box":{"x":117,"y":134,"width":415,"height":12}},{"id":"b395cc97-fb14-48a2-a08b-cac06585ffe7","block_type":"box","text":"f (a) the issuer of the hybrid instrument receives","page_number":54,"box":{"x":531,"y":134,"width":347,"height":12}},{"id":"6135541c-e6d0-4888-a0a2-260cb726a8b7","block_type":"box","text":"payment in full of the purchase price of the hybr","page_number":54,"box":{"x":117,"y":149,"width":346,"height":12}},{"id":"e7318595-a5ff-4b20-96aa-de2889a91efc","block_type":"box","text":"id instrument, substantially contemporaneously with","page_number":54,"box":{"x":463,"y":149,"width":380,"height":12}},{"id":"5fd0628a-22ad-4b3e-a3ed-7aaaf5e3c4f1","block_type":"box","text":"delivery of the hybrid instrument; (b) the purchaser or","page_number":54,"box":{"x":116,"y":165,"width":387,"height":12}},{"id":"28c32681-2311-4cc0-bb4d-215be6405404","block_type":"box","text":"r holder of the hybrid instrument is not required to","page_number":54,"box":{"x":502,"y":165,"width":359,"height":12}},{"id":"cd4d3238-7b1e-4fe9-86c5-3de2571cd694","block_type":"box","text":"make any payment to the issuer in addition to t","page_number":54,"box":{"x":117,"y":180,"width":335,"height":12}},{"id":"36d0ab83-9997-4e21-9dc1-4b8a2d5b534a","block_type":"box","text":"the purchase price paid under subparagraph (a), whether","page_number":54,"box":{"x":452,"y":180,"width":421,"height":12}},{"id":"fd3f7aca-6fce-427c-a919-712be5b938a7","block_type":"box","text":"as margin, settlement payment, or otherwise, during the life","page_number":54,"box":{"x":116,"y":196,"width":423,"height":12}},{"id":"7dbcf201-020a-4bb9-9111-de9ff1b92ad5","block_type":"box","text":"fe of the hybrid instrument or at maturity; (c) the","page_number":54,"box":{"x":539,"y":196,"width":346,"height":12}},{"id":"f54f3378-fff5-4d14-980e-79a64e7c6484","block_type":"box","text":"issuer of the hybrid instrument is not subject by t","page_number":54,"box":{"x":117,"y":211,"width":351,"height":12}},{"id":"c39b4d04-57c8-483e-9798-961fb9daf718","block_type":"box","text":"he terms of the instrument to mark-to-market margining","page_number":54,"box":{"x":469,"y":211,"width":406,"height":12}},{"id":"e7b6b971-dff2-47f2-99aa-c8f5dc1c5592","block_type":"box","text":"requirements; and (d) the hybrid instrument is not ma","page_number":54,"box":{"x":117,"y":227,"width":385,"height":12}},{"id":"9f8def91-1d2e-4e92-8425-876c59cc2d7e","block_type":"box","text":"rketed as a contract of sale of a commodity for","page_number":54,"box":{"x":504,"y":227,"width":341,"height":12}},{"id":"010da10d-4dbd-4614-b100-033cc29e74ce","block_type":"box","text":"future delivery (or option on such a contract) subjec","page_number":54,"box":{"x":116,"y":242,"width":374,"height":12}},{"id":"ce736f87-76a9-40dd-8754-c01aa12173b3","block_type":"box","text":"t to applicable provisions of the Commodity Exchange","page_number":54,"box":{"x":490,"y":242,"width":396,"height":12}},{"id":"4cc8ac03-02d5-47f8-99bf-74537ea32551","block_type":"box","text":"Act. Hybrid instruments may be principal protected, parti","page_number":54,"box":{"x":116,"y":258,"width":408,"height":12}},{"id":"0baf37e0-3f65-44bf-ba39-c7fe0f7fe236","block_type":"box","text":"ally protected, or offer no principal protection. A","page_number":54,"box":{"x":525,"y":258,"width":349,"height":12}},{"id":"ff3675d7-52df-44c9-88be-9a06f39657e5","block_type":"box","text":"principal protected hybrid instrument means that t","page_number":54,"box":{"x":117,"y":273,"width":359,"height":12}},{"id":"ec36880e-e57e-4944-9cb6-cd0797fe8539","block_type":"box","text":"he issuer will pay, at a minimum, the par value of the","page_number":54,"box":{"x":477,"y":273,"width":387,"height":12}},{"id":"559b5e73-f175-4045-b650-783f38ae3925","block_type":"box","text":"note at maturity. Therefore, if the commodity value to w","page_number":54,"box":{"x":117,"y":289,"width":389,"height":12}},{"id":"1aae5a65-b6d0-4fcc-98d6-19809eaed892","block_type":"box","text":"which the hybrid instrument is linked declines over","page_number":54,"box":{"x":505,"y":289,"width":371,"height":12}},{"id":"7cafc89a-8749-4826-bc95-f769d122df9a","block_type":"box","text":"the life of the note, the Fund will receive","page_number":54,"box":{"x":116,"y":304,"width":294,"height":11}},{"id":"9eac5cb7-0b2c-4feb-bd08-20c1d668353c","block_type":"box","text":"at maturity the face or stated value of the note. With a principal","page_number":54,"box":{"x":410,"y":304,"width":461,"height":12}},{"id":"592e83ec-10d1-4626-b2bc-051a769c3912","block_type":"box","text":"protected hybrid instrument, the Fund will receive at matu","page_number":54,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"ea6e2a5e-9e8b-4caf-9ea9-f7a94ea9c4a2","block_type":"box","text":"rity the greater of the","page_number":54,"box":{"x":535,"y":320,"width":155,"height":12}},{"id":"f4a136e4-d54d-430e-94d5-01cd0c2296ab","block_type":"box","text":"par value of the note or","page_number":54,"box":{"x":691,"y":320,"width":173,"height":12}},{"id":"6668954f-70b7-4547-982b-bb129ad8275d","block_type":"box","text":"the increase in its value based on the underlying comm","page_number":54,"box":{"x":116,"y":335,"width":400,"height":12}},{"id":"6a7f41bc-35d2-4faf-88fd-e63512190d86","block_type":"box","text":"odity or index. This protection is, in effect, an","page_number":54,"box":{"x":518,"y":335,"width":329,"height":12}},{"id":"84ad2467-1e30-4c7a-a031-64e9a69c3a95","block_type":"box","text":"option whose value is subject to the volatility and","page_number":54,"box":{"x":116,"y":351,"width":359,"height":12}},{"id":"3ad384a1-be85-4f58-bc03-6a2ce3500cc0","block_type":"box","text":"price level of the underlying commodity. The Manager’s","page_number":54,"box":{"x":476,"y":351,"width":407,"height":12}},{"id":"773877a7-b047-49ee-8374-be1173eea04e","block_type":"box","text":"decision whether to use principal protection depends in","page_number":54,"box":{"x":116,"y":366,"width":405,"height":12}},{"id":"98b14a71-e626-4575-93e5-1011283c10ee","block_type":"box","text":"part on the cost of the protection. In addition, the","page_number":54,"box":{"x":522,"y":366,"width":356,"height":12}},{"id":"da081220-0128-4250-9c1c-00f051cd4c94","block_type":"box","text":"protection feature depends upon the ability","page_number":54,"box":{"x":117,"y":382,"width":314,"height":12}},{"id":"070cab0d-c480-4005-91d5-5956a0d5bb6d","block_type":"box","text":"of the issuer to meet its obligation to buy back the security,","page_number":54,"box":{"x":432,"y":382,"width":431,"height":12}},{"id":"4a39b961-cf25-43df-9168-a149a62e05a2","block_type":"box","text":"and, therefore, depends on the creditworthiness of the","page_number":54,"box":{"x":116,"y":397,"width":399,"height":12}},{"id":"acb4dd10-a4af-4007-8fee-2a35a1317e6e","block_type":"box","text":"issuer. With full principal protection, the Fund will","page_number":54,"box":{"x":516,"y":397,"width":358,"height":12}},{"id":"e6af1e49-1e10-4775-9a2d-1dfb8f776559","block_type":"box","text":"receive at maturity of the hybrid instrument either","page_number":54,"box":{"x":117,"y":413,"width":356,"height":12}},{"id":"7291c39c-aa08-467f-a893-5d53e02c6920","block_type":"box","text":"r the stated par value of the hybrid instrument, or","page_number":54,"box":{"x":472,"y":413,"width":354,"height":12}},{"id":"77853c13-6a6d-4c14-8ec1-05694e9e85df","block_type":"box","text":"potentially, an amount greater than","page_number":54,"box":{"x":117,"y":428,"width":258,"height":12}},{"id":"4efd95d6-8bf9-40ec-80dc-8145a25f4852","block_type":"box","text":"the stated par value if the underlying commodity, index, futures","page_number":54,"box":{"x":375,"y":428,"width":461,"height":12}},{"id":"0a6d571c-b3f1-4d21-aa23-18cb5f359e39","block_type":"box","text":"contract or economic variable to which the hybrid in","page_number":54,"box":{"x":116,"y":444,"width":373,"height":12}},{"id":"3d816ce2-4f25-466c-b0b3-232cd9581b5a","block_type":"box","text":"strument is linked has increased in value. Partially","page_number":54,"box":{"x":490,"y":444,"width":368,"height":12}},{"id":"35de210e-014e-4463-b075-c0a2edb39c84","block_type":"box","text":"protected hybrid instruments may suffer some loss of","page_number":54,"box":{"x":117,"y":459,"width":386,"height":12}},{"id":"86e1dd39-6dd6-4a1f-a15f-60871e87b40b","block_type":"box","text":"f principal if the underlying commodity, index, futures","page_number":54,"box":{"x":502,"y":459,"width":383,"height":12}},{"id":"5bf5a677-8816-41a4-9953-5867a9ffe9b2","block_type":"box","text":"contract or economic variable to which the hybrid ins","page_number":54,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"237c2471-4e12-4dba-82af-62b04774e198","block_type":"box","text":"trument is linked declines in value during the term of","page_number":54,"box":{"x":498,"y":475,"width":384,"height":12}},{"id":"26811943-d804-4f9c-bff2-f5744a6b7596","block_type":"box","text":"the hybrid instrument. However, partially protected hy","page_number":54,"box":{"x":116,"y":490,"width":388,"height":12}},{"id":"72a9bf90-415d-43ae-858f-3306860962b6","block_type":"box","text":"brid instruments have a specified limit as to the","page_number":54,"box":{"x":505,"y":490,"width":346,"height":12}},{"id":"f3bde538-8aca-412a-b7ec-949a4aaf611b","block_type":"box","text":"amount of principal that they may lose.","page_number":54,"box":{"x":116,"y":506,"width":286,"height":12}},{"id":"699d6d4c-be46-4f28-b576-d85b7c99a55b","block_type":"box","text":"Hybrid Instruments Without Principal Protection.","page_number":54,"box":{"x":116,"y":537,"width":355,"height":12}},{"id":"0305a507-7f0e-4123-83fe-186c6936e507","block_type":"box","text":"Certain Funds may invest in hybrid instruments that","page_number":54,"box":{"x":473,"y":537,"width":393,"height":12}},{"id":"23967a9b-f286-458a-8320-1eeca621c9d7","block_type":"box","text":"offer no principal protection. At maturity, there is a risk that the underlying commodity price, futures","page_number":54,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"bcc5a17d-1718-469b-a61f-33de8744a1ee","block_type":"box","text":"contract, index or other economic variable may have declined sufficiently in value such that some or all","page_number":54,"box":{"x":116,"y":568,"width":768,"height":12}},{"id":"52807065-395b-4a31-bd76-d7c3d9cb2fd9","block_type":"box","text":"of the face value of the hybrid instrument might not be returned. The Manager, at its discretion, may","page_number":54,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"2c904bf8-a1ac-45a4-b405-4d33d8d72d8d","block_type":"box","text":"invest in a partially protected principal structured note or a note without principal protection. In deciding","page_number":54,"box":{"x":117,"y":599,"width":767,"height":12}},{"id":"7975d999-c04a-4162-8163-c66f6c09e31d","block_type":"box","text":"to purchase a note without principal protection, the Manager may consider, among other things, the","page_number":54,"box":{"x":116,"y":614,"width":743,"height":12}},{"id":"8bb04397-90e6-4597-b206-24933f8efb8b","block_type":"box","text":"expected performance of the underlying commodity futures contract, index or other economic variable","page_number":54,"box":{"x":116,"y":630,"width":761,"height":12}},{"id":"e45dfbb7-06f5-4ead-b356-17e82f083082","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":54,"box":{"x":116,"y":645,"width":717,"height":12}},{"id":"033d7926-b7c9-4fb2-bda5-9b229ceec911","block_type":"box","text":"believes are relevant.","page_number":54,"box":{"x":117,"y":661,"width":157,"height":9}},{"id":"eae3e871-d45c-4b71-9ddc-0cf86d2c8f2a","block_type":"box","text":"Limitations on Leverage.","page_number":54,"box":{"x":116,"y":692,"width":177,"height":12}},{"id":"53f5dac8-b6d4-48e3-9c90-4b1fba88c8c2","block_type":"box","text":"Some of the hybrid instruments in which a Fund may invest may involve","page_number":54,"box":{"x":300,"y":692,"width":522,"height":12}},{"id":"02e226fc-c242-47ea-9721-7540f852b185","block_type":"box","text":"leverage. To avoid being subject to undue leverage risk,","page_number":54,"box":{"x":117,"y":707,"width":405,"height":12}},{"id":"0bf0caa9-fecd-4f42-80dd-e4bdb525e819","block_type":"box","text":"a Fund will seek to limit the amount of economic","page_number":54,"box":{"x":529,"y":707,"width":349,"height":10}},{"id":"9209017f-c841-4eb9-b915-124841b3b972","block_type":"box","text":"leverage it has under any one hybrid instrument t","page_number":54,"box":{"x":117,"y":723,"width":356,"height":12}},{"id":"97aafbed-5b62-44c1-b26a-fe16ddbbf01a","block_type":"box","text":"hat it buys and the leverage of the Fund’s overall","page_number":54,"box":{"x":474,"y":723,"width":352,"height":12}},{"id":"fd4bddce-ccdf-4fdb-80b0-f2d5afaa00fa","block_type":"box","text":"portfolio. A Fund will not invest in a hybrid instrument i","page_number":54,"box":{"x":117,"y":738,"width":390,"height":12}},{"id":"98f2e252-f5e4-499e-97d8-45bc71306e01","block_type":"box","text":"f, at the time of purchase: (i) that instrument’s","page_number":54,"box":{"x":508,"y":738,"width":330,"height":12}},{"id":"9453fbdd-8a35-429a-8dea-9d2a58d04ca0","block_type":"box","text":"“leverage ratio” exceeds 300% of the price increase","page_number":54,"box":{"x":116,"y":754,"width":375,"height":12}},{"id":"a4cdaf09-aaaf-405a-8769-db43ef15308c","block_type":"box","text":"in the underlying commodity, futures contract, index","page_number":54,"box":{"x":497,"y":754,"width":375,"height":12}},{"id":"72e6c4ce-cae0-4a3d-b264-9413f7e394e3","block_type":"box","text":"or other economic variable or (ii) the Fund’s “portfo","page_number":54,"box":{"x":116,"y":769,"width":369,"height":12}},{"id":"9e6826f9-d197-451f-b760-d13fb7860748","block_type":"box","text":"lio leverage ratio” exceeds 150%, measured at the","page_number":54,"box":{"x":486,"y":769,"width":366,"height":12}},{"id":"082a052e-3226-4956-ae79-daa97602b4b1","block_type":"box","text":"time of purchase. “Leverage ratio” is the expected in","page_number":54,"box":{"x":116,"y":785,"width":378,"height":12}},{"id":"473cb93b-f1a7-4f7b-9a78-261d83135d34","block_type":"box","text":"crease in the value of a hybrid instrument, assuming","page_number":54,"box":{"x":496,"y":785,"width":379,"height":12}},{"id":"42ca97f0-c295-4824-8f12-c6fe6908a3ad","block_type":"box","text":"a one percent price increase in the underlying commodi","page_number":54,"box":{"x":116,"y":800,"width":403,"height":12}},{"id":"d53a6e4e-4b9c-4aa5-a50e-e77f200d3369","block_type":"box","text":"ty, futures contract, index or other economic","page_number":54,"box":{"x":520,"y":800,"width":320,"height":12}},{"id":"1d9aaa8a-6d07-4740-84b5-fafff2a1a7e5","block_type":"box","text":"factor. In other words, for a hybrid instrument wit","page_number":54,"box":{"x":116,"y":816,"width":352,"height":12}},{"id":"64030e8e-ab95-48f8-a05e-63794333a2d8","block_type":"box","text":"h a leverage factor of 150%, a 1% gain in the underlying","page_number":54,"box":{"x":469,"y":816,"width":407,"height":12}},{"id":"1f2b4703-8f69-4301-9d14-6857d519a927","block_type":"box","text":"economic variable would be expected to result in a","page_number":54,"box":{"x":116,"y":831,"width":373,"height":12}},{"id":"42888f3c-59cd-407a-8452-e3120628d116","block_type":"box","text":"1.5% gain in value for the hybrid instrument.","page_number":54,"box":{"x":491,"y":831,"width":323,"height":12}},{"id":"0d0ed2a8-4678-4357-a09b-b8db82450a0f","block_type":"box","text":"Conversely, a hybrid instrument with a leverage fact","page_number":54,"box":{"x":117,"y":847,"width":376,"height":12}},{"id":"04142219-1cbb-4b55-8f0d-0f2828da6329","block_type":"box","text":"or of 150% would suffer a 1.5% loss if the underlying","page_number":54,"box":{"x":494,"y":847,"width":387,"height":12}},{"id":"633515b2-19b4-459c-92d8-dd33f140142b","block_type":"box","text":"economic variable lost 1% of its value. “Portfolio","page_number":54,"box":{"x":116,"y":862,"width":348,"height":10}},{"id":"8c376e4a-a3a3-46a1-bb14-e20805f12955","block_type":"box","text":"leverage ratio” is defined as the average (mean)","page_number":54,"box":{"x":465,"y":862,"width":359,"height":12}},{"id":"77275492-8ad0-4f9c-b435-0226155003d5","block_type":"box","text":"leverage ratio of all instruments in a Fund’s portfolio, we","page_number":54,"box":{"x":117,"y":878,"width":405,"height":12}},{"id":"8db16309-2cd7-48d2-b869-652ebfd6e386","block_type":"box","text":"ighted by the market values of such instruments","page_number":54,"box":{"x":523,"y":878,"width":353,"height":12}},{"id":"aff3cf50-1718-4662-80f3-c512933372aa","block_type":"box","text":"II-6","page_number":54,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"6268feca-bbc8-46e5-b4d5-853ea5cdf21c","block_type":"box","text":"NM1026U-6033243-54/221","page_number":54,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d2e05604-5a84-4a43-b279-3de075d7b9c2","block_type":"box","text":"or, in the case of futures contracts, their notional v","page_number":55,"box":{"x":116,"y":87,"width":355,"height":11}},{"id":"69481315-fd64-415f-bbc2-9f834d6cc6f6","block_type":"box","text":"values. A Fund may at times or from time to time decide","page_number":55,"box":{"x":471,"y":87,"width":412,"height":12}},{"id":"055a60a8-6920-4552-b9fa-5c35c58529c4","block_type":"box","text":"not to use leverage in its investments or us","page_number":55,"box":{"x":117,"y":103,"width":310,"height":12}},{"id":"5ab0d339-3433-4206-bd01-43b5923f567b","block_type":"box","text":"e less leverage than may otherwise be allowable.","page_number":55,"box":{"x":428,"y":103,"width":363,"height":12}},{"id":"1cd4aea5-20ca-4910-8b7c-57ca889963ef","block_type":"box","text":"Counterparty Risk.","page_number":55,"box":{"x":117,"y":134,"width":136,"height":12}},{"id":"23fbab7c-9aab-4749-8f93-faef01df8a9b","block_type":"box","text":"A significant risk of hybrid instruments is counterparty risk. Unlike exchange-traded","page_number":55,"box":{"x":255,"y":134,"width":625,"height":12}},{"id":"10494dfa-8dee-4e59-8ffb-35be9c47d276","block_type":"box","text":"futures and options, which are standard contracts, hybrid instruments are customized securities, tailor","page_number":55,"box":{"x":116,"y":149,"width":760,"height":12}},{"id":"d6cd19f6-c4a1-4291-851b-7a94c5c75636","block_type":"box","text":"made by a specific issuer. With a listed futures or options contract, an investor’s counterparty is the","page_number":55,"box":{"x":117,"y":165,"width":740,"height":12}},{"id":"629d4dde-0ee0-4f14-9a53-e580e73fa6ea","block_type":"box","text":"exchange clearinghouse. Exchange clearinghouses are capitalized by the exchange members and","page_number":55,"box":{"x":116,"y":180,"width":738,"height":12}},{"id":"936c98d6-7e41-4524-9641-e5b9f48f9229","block_type":"box","text":"typically have high investment grade ratings (","page_number":55,"box":{"x":116,"y":196,"width":336,"height":12}},{"id":"a38c221f-94c4-414b-8934-4be70ad5a1cb","block_type":"box","text":"e.g.","page_number":55,"box":{"x":453,"y":198,"width":26,"height":10}},{"id":"d959c96b-3ac9-4925-877e-c7acaaeef8b4","block_type":"box","text":", ratings of AAA or AA by S&P). Therefore, the risk is","page_number":55,"box":{"x":482,"y":196,"width":396,"height":12}},{"id":"7b7cc37c-d533-449b-afac-b7e9a4b07e1a","block_type":"box","text":"small that an exchange clearinghouse might be unable to meet its obligations at maturity. However,","page_number":55,"box":{"x":116,"y":211,"width":743,"height":12}},{"id":"e2a52f39-3e47-4831-b27b-5e5558e83cfd","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":55,"box":{"x":116,"y":227,"width":715,"height":12}},{"id":"31875b2d-8519-4057-aefc-b9069d245c77","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":55,"box":{"x":117,"y":242,"width":767,"height":12}},{"id":"a0d402ce-be0e-40de-9601-e7ce9bb3a349","block_type":"box","text":"under the structured note.","page_number":55,"box":{"x":117,"y":258,"width":196,"height":9}},{"id":"7c439708-1dc4-42f7-a728-61fbf7f1fed3","block_type":"box","text":"Convertible Securities.","page_number":55,"box":{"x":117,"y":289,"width":180,"height":9}},{"id":"e957b586-e2a9-4332-9845-69629e1d8d92","block_type":"box","text":"A convertible security is a bond, debenture, note, preferred stock or other","page_number":55,"box":{"x":298,"y":289,"width":554,"height":12}},{"id":"46fd1198-7aac-4313-8cf8-3b1613e60f74","block_type":"box","text":"security that may be converted into or exchanged for a prescribed amount of common stock or other","page_number":55,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"6d8a73a0-85d8-4bee-ac6b-710c881aec93","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":55,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"261847ce-2eb8-47e4-a57f-882098475d6a","block_type":"box","text":"formula. A convertible security entitles the holder to receive interest paid or accrued on debt or the","page_number":55,"box":{"x":116,"y":335,"width":734,"height":12}},{"id":"bba7b946-eed7-47aa-b8cb-f304d1a054d2","block_type":"box","text":"dividend paid on preferred stock until the convertible security matures or is redeemed, converted or","page_number":55,"box":{"x":116,"y":351,"width":742,"height":12}},{"id":"068fe8ff-7b64-45a5-baac-b867b1c1073b","block_type":"box","text":"exchanged. Before conversion, convertible securities have characteristics similar to nonconvertible","page_number":55,"box":{"x":116,"y":366,"width":738,"height":12}},{"id":"b58d59c8-f9fa-4290-85be-d16a9a8532b0","block_type":"box","text":"income securities in that they ordinarily provide a stable stream of income with generally higher yields","page_number":55,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"9d1bb48d-4929-4399-a2ac-0e2c7e7f14ed","block_type":"box","text":"than those of common stocks of the same or similar issuers, but lower yields than comparable","page_number":55,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"3f5bb38b-05d0-44be-8a00-51116b3ce59c","block_type":"box","text":"nonconvertible securities. The value of a convertible security is influenced by changes in interest rates,","page_number":55,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"234fc854-4be4-4e0b-84d3-b7d3bf2dd217","block_type":"box","text":"with investment value declining as interest rates increase and increasing as interest rates decline. The","page_number":55,"box":{"x":116,"y":428,"width":764,"height":12}},{"id":"8c7acd68-71c8-4b44-a270-dcf75f5c804d","block_type":"box","text":"credit standing of the issuer and other factors also may have an effect on the convertible security’s","page_number":55,"box":{"x":116,"y":444,"width":736,"height":12}},{"id":"c99d29ba-526d-45fb-98ad-650686c803d5","block_type":"box","text":"investment value. Convertible securities rank senior to common stock in a corporation’s capital","page_number":55,"box":{"x":117,"y":459,"width":706,"height":12}},{"id":"746cdebe-fc0b-48d2-addb-72e027d1d8c9","block_type":"box","text":"structure but are usually subordinated to comparable nonconvertible securities. Convertible securities","page_number":55,"box":{"x":116,"y":475,"width":757,"height":12}},{"id":"2cbff3e6-8802-46e5-895e-ffff46f9a7ea","block_type":"box","text":"may be subject to redemption at the option of the issuer at a price established in the convertible","page_number":55,"box":{"x":117,"y":490,"width":714,"height":12}},{"id":"b7446c2c-d8d9-4565-ba1c-6499ade795bf","block_type":"box","text":"security’s governing instrument.","page_number":55,"box":{"x":116,"y":506,"width":241,"height":12}},{"id":"f6603aa0-afc2-42c2-872c-7b3446fc74b2","block_type":"box","text":"The characteristics of convertible securities make them potentially attractive investments for an","page_number":55,"box":{"x":116,"y":537,"width":710,"height":12}},{"id":"9fda3487-f600-4b4b-9206-9601361ffe6e","block_type":"box","text":"investment company seeking a high total return from capital appreciation and investment income.","page_number":55,"box":{"x":117,"y":552,"width":727,"height":12}},{"id":"ee0d2987-6999-4185-817b-b3370bef3a10","block_type":"box","text":"These characteristics include the potential for capital appreciation as the value of the underlying","page_number":55,"box":{"x":116,"y":568,"width":716,"height":12}},{"id":"5c123a6b-2569-46c4-92d6-e7943d6621f1","block_type":"box","text":"common stock increases, the relatively high yield received from dividend or interest payments as","page_number":55,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"4618e814-161b-4db5-9df4-98c13beac499","block_type":"box","text":"compared to common stock dividends and decreased risks of decline in value relative to the underlying","page_number":55,"box":{"x":116,"y":599,"width":770,"height":12}},{"id":"8ce3877b-38df-4083-b4c4-bb479e837857","block_type":"box","text":"common stock due to their fixed-income nature. As a result of the conversion feature, however, the","page_number":55,"box":{"x":116,"y":614,"width":739,"height":11}},{"id":"9aef2ec4-8a69-4235-a8c1-780bb51f73c6","block_type":"box","text":"interest rate or dividend preference on a convertible security is generally less than would be the case if","page_number":55,"box":{"x":117,"y":630,"width":766,"height":12}},{"id":"53877bd1-6cd4-4600-aa13-6f17062bb2a2","block_type":"box","text":"the securities were issued in nonconvertible form.","page_number":55,"box":{"x":116,"y":645,"width":373,"height":10}},{"id":"e193b25f-1615-4a6a-9aaa-432c14415433","block_type":"box","text":"In analyzing convertible securities, the Manager will consider both the yield on the convertible security","page_number":55,"box":{"x":117,"y":676,"width":755,"height":12}},{"id":"b4743527-caf9-474d-a103-08a52212be7c","block_type":"box","text":"relative to its credit quality and the potential capital appreciation that is offered by the underlying","page_number":55,"box":{"x":117,"y":692,"width":710,"height":12}},{"id":"46bab0c9-d729-4246-9211-13829918ab43","block_type":"box","text":"common stock, among other things.","page_number":55,"box":{"x":116,"y":707,"width":265,"height":12}},{"id":"1aae150c-b53e-4c9a-92ea-c595dd8547a3","block_type":"box","text":"Convertible securities are issued and traded in a number of securities markets. Even in cases where a","page_number":55,"box":{"x":117,"y":738,"width":758,"height":10}},{"id":"8008d9b2-b2f9-4e1d-af4b-e666b6c0eeba","block_type":"box","text":"substantial portion of the convertible securities held by a Fund are denominated in U.S. dollars, the","page_number":55,"box":{"x":116,"y":754,"width":734,"height":12}},{"id":"297398ca-959a-49b9-8cbd-e552d789724c","block_type":"box","text":"underlying equity securities may be quoted in the currency of the country where the issuer is domiciled.","page_number":55,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"bf8f637e-c083-43a7-a464-af5cc04e7580","block_type":"box","text":"As a result, fluctuations in the exchange rate between the currency in which the debt security is","page_number":55,"box":{"x":116,"y":785,"width":707,"height":12}},{"id":"cd13b2d6-c4b1-48aa-8298-0d8ced11b0d8","block_type":"box","text":"denominated and the currency in which the share price is quoted will affect the value of the convertible","page_number":55,"box":{"x":116,"y":800,"width":761,"height":12}},{"id":"3bd95280-fbdf-493e-86fe-7a2fe6105f54","block_type":"box","text":"security. With respect to convertible securities denominated in a currency different from that of the","page_number":55,"box":{"x":116,"y":816,"width":728,"height":12}},{"id":"c88ac902-b860-45a6-814c-c11b0b5086d8","block_type":"box","text":"underlying equity securities, the conversion price may be based on a fixed exchange rate established","page_number":55,"box":{"x":117,"y":831,"width":756,"height":12}},{"id":"014c8dce-6c42-44dd-9fc4-253b09c3da6b","block_type":"box","text":"at the time the security is issued, which may increase the effects of currency risk. As described below,","page_number":55,"box":{"x":116,"y":847,"width":763,"height":12}},{"id":"e37a7d69-4a50-465f-9e24-c6393b8f5181","block_type":"box","text":"a Fund is authorized to enter into foreign currency hedging transactions in which it may seek to reduce","page_number":55,"box":{"x":116,"y":862,"width":766,"height":12}},{"id":"2bc5869c-7d8f-4edb-a49f-f3ae13385f4e","block_type":"box","text":"the effect of exchange rate fluctuations.","page_number":55,"box":{"x":116,"y":878,"width":298,"height":12}},{"id":"805f6760-71a0-4774-bdd4-a906d553d26d","block_type":"box","text":"II-7","page_number":55,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"ff720efb-c5a5-454d-8dc9-968e585505f2","block_type":"box","text":"NM1026U-6033243-55/221","page_number":55,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f9b72f79-7e27-4d25-9d77-467049447213","block_type":"box","text":"Apart from currency considerations, the value of convertible securities is influenced by both the yield","page_number":56,"box":{"x":116,"y":87,"width":749,"height":12}},{"id":"31c598b3-3116-43cc-9df9-beddcb27e898","block_type":"box","text":"on nonconvertible securities of comparable issuers and by the value of the underlying common stock.","page_number":56,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"9ce8fc38-4811-47ea-9f95-e14a3ba89496","block_type":"box","text":"The value of a convertible security viewed without regard to its conversion feature (","page_number":56,"box":{"x":116,"y":118,"width":617,"height":12}},{"id":"ec203531-5901-4e8e-8bfc-fc2e65e6f4ab","block_type":"box","text":"i.e.","page_number":56,"box":{"x":734,"y":118,"width":20,"height":10}},{"id":"91f31805-999d-4331-8449-83fdaf8bca4a","block_type":"box","text":", strictly on the","page_number":56,"box":{"x":757,"y":118,"width":112,"height":12}},{"id":"816b6710-15c4-476f-bcfa-144fe666de24","block_type":"box","text":"basis of its yield) is sometimes referred to as its “investment value.” To the extent interest rates","page_number":56,"box":{"x":117,"y":134,"width":709,"height":12}},{"id":"2c6af657-1ebb-42c7-b7fc-71802bac8a25","block_type":"box","text":"change, the investment value of the convertible security typically will fluctuate. At the same time,","page_number":56,"box":{"x":116,"y":149,"width":720,"height":12}},{"id":"dad1bf4a-5eb9-4f40-875f-86187fa5c006","block_type":"box","text":"however, the value of the convertible security will be influenced by its “conversion value,” which is the","page_number":56,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"7a009191-5fa5-4174-9c55-37eb58332b18","block_type":"box","text":"market value of the underlying common stock that would be obtained if the convertible security were","page_number":56,"box":{"x":117,"y":180,"width":747,"height":12}},{"id":"2f5bd7f1-b13f-4e01-a832-93bfc8aa8c57","block_type":"box","text":"converted. Conversion value fluctuates directly with the price of the underlying common stock. If the","page_number":56,"box":{"x":116,"y":196,"width":746,"height":12}},{"id":"f9956555-e417-4140-8c68-435405d24712","block_type":"box","text":"conversion value of a convertible security is substantially below its investment value, the price of the","page_number":56,"box":{"x":116,"y":211,"width":748,"height":12}},{"id":"bc7b1f2e-44d0-4f8d-ba2d-4dd8cdbe47ef","block_type":"box","text":"convertible security is governed principally by its investment value. To the extent the conversion value","page_number":56,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"33297ff3-a41c-4938-a951-67d138ec384a","block_type":"box","text":"of a convertible security increases to a point that approximates or exceeds its investment value, the","page_number":56,"box":{"x":116,"y":242,"width":743,"height":12}},{"id":"9d336784-0e49-46e2-91f9-7610371c3acb","block_type":"box","text":"price of the convertible security will be influenced principally by its conversion value. A convertible","page_number":56,"box":{"x":117,"y":258,"width":729,"height":12}},{"id":"8a93117c-8420-4d51-8807-feaa2d9eacb5","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":56,"box":{"x":116,"y":273,"width":768,"height":12}},{"id":"76d8e5b0-5e8b-4db6-9a5d-76a775a33040","block_type":"box","text":"to acquire the underlying common stock while holding a fixed-income security. The yield and","page_number":56,"box":{"x":116,"y":289,"width":691,"height":12}},{"id":"67f84e22-519a-4d16-b61b-5c8cb892bbaf","block_type":"box","text":"conversion premium of convertible securities issued in Japan and the Euromarket are frequently","page_number":56,"box":{"x":116,"y":304,"width":718,"height":12}},{"id":"9c4c399f-2ca4-4758-8760-aab81f6aca29","block_type":"box","text":"determined at levels that cause the conversion value to affect their market value more than the","page_number":56,"box":{"x":116,"y":320,"width":708,"height":9}},{"id":"df3e7dc0-f3d1-43a2-b59c-b3cfc90f6c1b","block_type":"box","text":"securities’ investment value.","page_number":56,"box":{"x":116,"y":335,"width":215,"height":10}},{"id":"25eb183a-3de7-4e5d-8af9-38baa20b30c6","block_type":"box","text":"Holders of convertible securities generally have a claim on the assets of the issuer prior to the common","page_number":56,"box":{"x":117,"y":362,"width":770,"height":12}},{"id":"6199b45d-00fe-4e9a-a7d6-317822ca9e44","block_type":"box","text":"stockholders but may be subordinated to other debt securities of the same issuer. A convertible","page_number":56,"box":{"x":116,"y":378,"width":713,"height":12}},{"id":"b8cb270d-5931-42da-b67a-50664bd7ccc7","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":56,"box":{"x":116,"y":393,"width":734,"height":12}},{"id":"3692808f-4da3-44c7-853e-cc2f1c778ebd","block_type":"box","text":"provision, indenture or other governing instrument pursuant to which the convertible security was","page_number":56,"box":{"x":117,"y":409,"width":723,"height":12}},{"id":"edf6a30f-240f-48ab-9d4b-dfa56fd038fd","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":56,"box":{"x":117,"y":424,"width":741,"height":12}},{"id":"dac7f345-346f-4b5f-81f0-b424c66efb01","block_type":"box","text":"redeem the security, convert it into the underlying common stock or sell it to a third party. Certain","page_number":56,"box":{"x":117,"y":440,"width":723,"height":12}},{"id":"aa6d8b31-a2dc-4321-a3bb-cac8616a0a93","block_type":"box","text":"convertible debt securities may provide a put option to the holder, which entitles the holder to cause","page_number":56,"box":{"x":116,"y":455,"width":745,"height":12}},{"id":"ad1bd428-0441-4646-90ac-e807cb52096d","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":56,"box":{"x":116,"y":471,"width":745,"height":12}},{"id":"8fa80976-d46d-4b73-bda0-baa9c3448788","block_type":"box","text":"security under certain circumstances.","page_number":56,"box":{"x":116,"y":486,"width":282,"height":12}},{"id":"3dc627eb-729b-4a06-8ab2-e89fda399696","block_type":"box","text":"A Fund may also invest in synthetic convertible securities. Synthetic convertible securities may include","page_number":56,"box":{"x":116,"y":513,"width":765,"height":12}},{"id":"b5154806-7622-47eb-996a-8299f6391a5a","block_type":"box","text":"either Cash-Settled Convertibles or Manufactured Convertibles. “Cash-Settled Convertibles” are","page_number":56,"box":{"x":116,"y":529,"width":717,"height":9}},{"id":"e4fdcbcf-74ee-4301-98cf-401ccad78b0f","block_type":"box","text":"instruments that are created by the issuer and have the economic characteristics of traditional","page_number":56,"box":{"x":117,"y":544,"width":701,"height":12}},{"id":"4b3be785-0cf4-4421-9f83-d4d484f071b1","block_type":"box","text":"convertible securities but may not actually permit conversion into the underlying equity securities in all","page_number":56,"box":{"x":116,"y":560,"width":760,"height":12}},{"id":"bd436e89-bf54-4dd3-9df7-1db4e103b1e8","block_type":"box","text":"circumstances. As an example, a private company may issue a Cash-Settled Convertible that is","page_number":56,"box":{"x":116,"y":575,"width":715,"height":12}},{"id":"ff66510f-a73d-4307-8eaf-53f2a9ff94f0","block_type":"box","text":"convertible into common stock only if the company successfully completes a public offering of its","page_number":56,"box":{"x":116,"y":591,"width":721,"height":12}},{"id":"52c5c7f3-5aa4-4917-b24e-60d52ea01f11","block_type":"box","text":"common stock prior to maturity and otherwise pays a cash amount to reflect any equity appreciation.","page_number":56,"box":{"x":116,"y":606,"width":751,"height":12}},{"id":"72dfb832-4d52-42a6-86c8-6d476dff4b83","block_type":"box","text":"“Manufactured Convertibles” are created by the Manager or another party by combining separate","page_number":56,"box":{"x":116,"y":622,"width":726,"height":12}},{"id":"c9bdbde9-6edb-40d0-b959-8d62e6505c24","block_type":"box","text":"securities that possess one of the two principal characteristics of a convertible security,","page_number":56,"box":{"x":116,"y":637,"width":651,"height":12}},{"id":"019876d5-651d-4772-aeec-86269c967280","block_type":"box","text":"i.e.","page_number":56,"box":{"x":767,"y":638,"width":21,"height":9}},{"id":"b3b4a432-3800-4e91-ae6c-2a7f7d0b7bf4","block_type":"box","text":", fixed","page_number":56,"box":{"x":791,"y":637,"width":49,"height":12}},{"id":"c1df5cd6-1583-4e76-9b0d-b9284584e52a","block_type":"box","text":"income (“fixed-income component”) or a right to acquire equity securities (“convertibility component”).","page_number":56,"box":{"x":117,"y":653,"width":756,"height":12}},{"id":"600ad26d-661b-425b-b2bf-b4ad035edf52","block_type":"box","text":"The fixed-income component is achieved by investing in nonconvertible fixed-income securities, such","page_number":56,"box":{"x":116,"y":668,"width":751,"height":12}},{"id":"8a90656c-53a3-48bf-8d29-c759790f4926","block_type":"box","text":"as nonconvertible bonds, preferred stocks and money market instruments. The convertibility","page_number":56,"box":{"x":116,"y":684,"width":684,"height":12}},{"id":"0ca70b47-a73d-45aa-a308-daeb71cc1a29","block_type":"box","text":"component is achieved by investing in call options, warrants, or other securities with equity conversion","page_number":56,"box":{"x":116,"y":700,"width":758,"height":12}},{"id":"a1ab8acf-763a-4b77-9ae5-f78df6038996","block_type":"box","text":"features (“equity features”) granting the holder the right to purchase a specified quantity of the","page_number":56,"box":{"x":116,"y":715,"width":697,"height":12}},{"id":"4b0c48ee-355a-462e-b4f3-2baaaa382d71","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":56,"box":{"x":117,"y":730,"width":745,"height":13}},{"id":"23de206b-2a46-48ff-9b89-2062d4c2a863","block_type":"box","text":"option, the right to receive a cash payment based on the value of the underlying stock index.","page_number":56,"box":{"x":116,"y":746,"width":685,"height":12}},{"id":"8422d0f7-9ad9-47bd-8b61-e51b26c983a0","block_type":"box","text":"A Manufactured Convertible differs from traditional convertible securities in several respects. Unlike a","page_number":56,"box":{"x":116,"y":773,"width":751,"height":12}},{"id":"8dd7f172-c564-47ec-ab94-c16cabbc9980","block_type":"box","text":"traditional convertible security, which is a single security that has a unitary market value, a","page_number":56,"box":{"x":116,"y":789,"width":669,"height":12}},{"id":"71ea4a43-bc00-4f52-9f07-175e646396e7","block_type":"box","text":"Manufactured Convertible is comprised of two or more separate securities, each with its own market","page_number":56,"box":{"x":117,"y":804,"width":742,"height":12}},{"id":"7de3d262-0e8c-4128-b50b-178378f8675a","block_type":"box","text":"value. Therefore, the total “market value” of such a Manufactured Convertible is the sum of the values","page_number":56,"box":{"x":116,"y":820,"width":755,"height":11}},{"id":"c1f14e7f-194e-4478-9295-34b7fd66d218","block_type":"box","text":"of its fixed-income component and its convertibility component.","page_number":56,"box":{"x":116,"y":835,"width":472,"height":12}},{"id":"80b89009-168f-4d60-b80e-0b1dbf498e01","block_type":"box","text":"More flexibility is possible in the creation of a Manufact","page_number":56,"box":{"x":117,"y":862,"width":382,"height":12}},{"id":"8da4fc07-1525-4cf1-a9dd-4df32c8e67d1","block_type":"box","text":"ctured Convertible than in the purchase of a traditional","page_number":56,"box":{"x":499,"y":862,"width":382,"height":12}},{"id":"c149a007-02cd-470b-aec3-968c8b7db5f1","block_type":"box","text":"convertible security. Because many corporations hav","page_number":56,"box":{"x":116,"y":878,"width":377,"height":12}},{"id":"7333690b-92c4-4f1a-918d-f1b4b3fd60f3","block_type":"box","text":"e not issued convertible securities, the Manager may","page_number":56,"box":{"x":493,"y":878,"width":380,"height":12}},{"id":"ddd5185e-ae37-41fd-bc30-84f7a29b5d29","block_type":"box","text":"II-8","page_number":56,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"d4eb00e7-2146-49e9-996d-1d7d235b629a","block_type":"box","text":"NM1026U-6033243-56/221","page_number":56,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"af1cd45c-e38b-4712-8164-5b53cd95145d","block_type":"box","text":"combine a fixed-income instrument and an equity feature wit","page_number":57,"box":{"x":116,"y":87,"width":429,"height":12}},{"id":"d0e3e9b3-f66a-48af-8780-2da6da91fc7e","block_type":"box","text":"h respect to the stock of the issuer of the fixed","page_number":57,"box":{"x":546,"y":87,"width":331,"height":12}},{"id":"a32aed10-46d5-451c-a1a4-d2cca6bd3512","block_type":"box","text":"income instrument to create a synthetic converti","page_number":57,"box":{"x":117,"y":103,"width":338,"height":12}},{"id":"16bacbd2-c157-4485-87a3-ef220e712c8e","block_type":"box","text":"ble security otherwise unavailable in the market. The","page_number":57,"box":{"x":457,"y":103,"width":378,"height":12}},{"id":"a58239aa-f237-43d3-b7f9-50391cf9b2ac","block_type":"box","text":"Manager may also combine a fixed-income instrument of","page_number":57,"box":{"x":117,"y":118,"width":405,"height":12}},{"id":"c41d5af8-0fe2-4c2c-9c39-11fd2827fd42","block_type":"box","text":"f an issuer with an equity feature with respect to the","page_number":57,"box":{"x":521,"y":118,"width":366,"height":12}},{"id":"887acbf2-2dba-4fe3-95bf-81ac199919c6","block_type":"box","text":"stock of a different issuer when the Manager belie","page_number":57,"box":{"x":116,"y":134,"width":354,"height":12}},{"id":"a5b4274c-0820-4609-9bd4-9bd34fa0a1dc","block_type":"box","text":"ves such a Manufactured Convertible would better","page_number":57,"box":{"x":471,"y":134,"width":362,"height":9}},{"id":"02cedd30-a7a6-4274-923f-44d0fca8ff21","block_type":"box","text":"promote a Fund’s objective than alternative investment","page_number":57,"box":{"x":117,"y":149,"width":389,"height":12}},{"id":"3b31b96e-8609-41ac-8e6e-edd7208c27e8","block_type":"box","text":"s. For example, the Manager may combine an equity","page_number":57,"box":{"x":506,"y":149,"width":381,"height":12}},{"id":"a1e807ce-4b6a-4784-8ca2-d74be3da1e2f","block_type":"box","text":"feature with respect to an issuer’s stock with a fixed-in","page_number":57,"box":{"x":116,"y":165,"width":382,"height":11}},{"id":"5b14e486-42ce-43f7-ac4f-82cf90f51ca1","block_type":"box","text":"come security of a different issuer in the same","page_number":57,"box":{"x":500,"y":165,"width":331,"height":12}},{"id":"6f77b0ce-4f08-4b2a-b010-bbc7e815a13d","block_type":"box","text":"industry to diversify the Fund’s credit exposure, or","page_number":57,"box":{"x":117,"y":180,"width":353,"height":12}},{"id":"26933c88-d10b-4799-8be6-c167a4af6260","block_type":"box","text":"r with a U.S. Treasury instrument to create a","page_number":57,"box":{"x":470,"y":180,"width":315,"height":12}},{"id":"cb79514a-d45b-45a9-8df0-8969ac5ab28c","block_type":"box","text":"Manufactured Convertible with a higher credit profile t","page_number":57,"box":{"x":117,"y":196,"width":379,"height":12}},{"id":"ca30794d-b096-42da-b4a4-9a2bcf0470d6","block_type":"box","text":"han a traditional convertible security issued by that","page_number":57,"box":{"x":497,"y":196,"width":363,"height":12}},{"id":"3100f917-360c-4771-9cf0-7c393ace924e","block_type":"box","text":"issuer. A Manufactured Convertible also is a more fl","page_number":57,"box":{"x":117,"y":211,"width":366,"height":10}},{"id":"286e7172-d745-4af5-937b-923579a8421e","block_type":"box","text":"exible investment in that its two components may be","page_number":57,"box":{"x":484,"y":211,"width":377,"height":12}},{"id":"d108ae32-5e9d-41ca-9cd1-56b1b4bd0575","block_type":"box","text":"purchased separately and, upon purchasi","page_number":57,"box":{"x":117,"y":227,"width":293,"height":12}},{"id":"5792ddc0-f9db-46c8-b4fc-567abc37458b","block_type":"box","text":"ng the separate securities, “combined” to create a Manufactured","page_number":57,"box":{"x":412,"y":227,"width":461,"height":12}},{"id":"b7358fa8-c4b6-48e2-bdc9-679755dabc03","block_type":"box","text":"Convertible. For example, the Fund may purchase a w","page_number":57,"box":{"x":117,"y":242,"width":375,"height":12}},{"id":"e9ad3803-37b5-4401-8522-5aa19f6cf7a2","block_type":"box","text":"warrant for eventual inclusion in a Manufactured","page_number":57,"box":{"x":492,"y":242,"width":347,"height":10}},{"id":"ee8dfd25-0c08-4191-aefb-5306f65bfa39","block_type":"box","text":"Convertible while postponing the purchase of a su","page_number":57,"box":{"x":117,"y":258,"width":354,"height":12}},{"id":"63ab17b1-7ef6-42d7-b182-764d17cd5909","block_type":"box","text":"itable bond to pair with the warrant pending development","page_number":57,"box":{"x":473,"y":258,"width":407,"height":12}},{"id":"ec7fe982-e420-43f2-af75-3d7634177803","block_type":"box","text":"of more favorable market conditions.","page_number":57,"box":{"x":116,"y":273,"width":265,"height":10}},{"id":"bb2cfe1e-e6f5-43cb-9d2e-3bcc64f4291e","block_type":"box","text":"The value of a Manufactured Convertible may respond to certain market fluctuations differently from a","page_number":57,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"d92a8d06-3ad7-4bd5-a499-292fa01d34a5","block_type":"box","text":"traditional convertible security with similar characteristics. For example, in the event a Fund created a","page_number":57,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"48c4c424-459c-4021-b748-9fa585f3688a","block_type":"box","text":"Manufactured Convertible by combining a short-term U.S. Treasury instrument and a call option on a","page_number":57,"box":{"x":117,"y":335,"width":752,"height":12}},{"id":"dafe02d9-260e-4dea-9819-11216551526c","block_type":"box","text":"stock, the Manufactured Convertible would be expected to outperform a traditional convertible of","page_number":57,"box":{"x":116,"y":351,"width":720,"height":12}},{"id":"d15b54a0-b4a5-4b86-8f73-1b8631a990db","block_type":"box","text":"similar maturity that is convertible into that stock during periods when Treasury instruments outperform","page_number":57,"box":{"x":116,"y":366,"width":767,"height":12}},{"id":"6853a40a-733c-429a-a1cc-f07d1153d6ba","block_type":"box","text":"corporate fixed-income securities and underperform during periods when corporate fixed-income","page_number":57,"box":{"x":116,"y":382,"width":722,"height":12}},{"id":"f0b6c80d-3a4a-4959-9e95-e0752dba3a1a","block_type":"box","text":"securities outperform Treasury instruments.","page_number":57,"box":{"x":116,"y":397,"width":329,"height":12}},{"id":"941a12bc-18e1-40d9-b53a-9e21b576a001","block_type":"box","text":"Corporate Loans.","page_number":57,"box":{"x":117,"y":428,"width":137,"height":12}},{"id":"7924454f-1b77-40c1-93b9-1a89b5ef2a70","block_type":"box","text":"Certain Funds may invest in corporate loans. Corporate loans are generally","page_number":57,"box":{"x":255,"y":428,"width":570,"height":12}},{"id":"1640d2d2-dd70-44df-8ba5-4908e1e0243a","block_type":"box","text":"non-investment grade floating rate instruments. Usually, they are freely callable at the issuer’s option.","page_number":57,"box":{"x":117,"y":444,"width":757,"height":12}},{"id":"f9cca4e9-1627-4ddf-94df-d5b11370235a","block_type":"box","text":"Certain Funds may invest in fixed and floating rate loans (“Loans”) arranged through private","page_number":57,"box":{"x":117,"y":459,"width":685,"height":12}},{"id":"958956c2-081a-40ce-b93b-7dcce611618c","block_type":"box","text":"negotiations between a corporate borrower or a foreign sovereign entity and one or more financial","page_number":57,"box":{"x":117,"y":475,"width":730,"height":12}},{"id":"75db84ed-7a7c-41f8-ac93-058caefed16a","block_type":"box","text":"institutions or institutional investors (“Lenders”). A Fund may invest in such Loans in the form of","page_number":57,"box":{"x":117,"y":490,"width":712,"height":12}},{"id":"7bff7543-7d2c-4263-8a82-2f5954c24813","block_type":"box","text":"participations in Loans (“Participations”) and assignments of all or a portion of Loans from third parties","page_number":57,"box":{"x":117,"y":506,"width":761,"height":12}},{"id":"3e87c7a9-4e16-46d7-8292-47658d63b3ad","block_type":"box","text":"(“Assignments”). A Fund considers these investments to be investments in debt securities for purposes","page_number":57,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"e78df539-f058-455a-8ee5-b3e3f930809b","block_type":"box","text":"of its investment policies. Participations typically will result in the Fund having a contractual relationship","page_number":57,"box":{"x":116,"y":537,"width":770,"height":12}},{"id":"78ab7893-070a-4d97-a987-4a1956bcdc7f","block_type":"box","text":"only with the Lender, not with the borrower. The Fund will have the right to receive payments of","page_number":57,"box":{"x":116,"y":552,"width":712,"height":12}},{"id":"ec834a19-33d3-4cee-8688-7b5f06861e04","block_type":"box","text":"principal, interest and any fees to which it is entitled only from the Lender selling the Participation and","page_number":57,"box":{"x":117,"y":568,"width":756,"height":12}},{"id":"16fea9e8-44bc-4564-aede-bfd87857d6ec","block_type":"box","text":"only upon receipt by the Lender of the payments from the borrower. In connection with purchasing","page_number":57,"box":{"x":116,"y":583,"width":734,"height":12}},{"id":"853468bb-282b-40a3-845f-d1377d31b2cb","block_type":"box","text":"Participations, the Fund generally will have no right to enforce compliance by the borrower with the","page_number":57,"box":{"x":117,"y":599,"width":737,"height":12}},{"id":"5ddc587c-ad79-4ac4-b23b-6ca6ee7a315a","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":57,"box":{"x":116,"y":614,"width":750,"height":12}},{"id":"4d020e79-1464-4999-b6ea-7a2e8810d16a","block_type":"box","text":"the Fund may not benefit directly from any collateral supporting the Loan in which it has purchased the","page_number":57,"box":{"x":116,"y":630,"width":766,"height":12}},{"id":"3975c9b0-1c68-4c2f-ae75-4c69e6395af5","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":57,"box":{"x":117,"y":645,"width":763,"height":12}},{"id":"9ee04e91-17ce-4efc-809f-099dfee234f1","block_type":"box","text":"is selling the Participation. In the event of the insolvency of the Lender selling the Participation, the","page_number":57,"box":{"x":117,"y":661,"width":730,"height":12}},{"id":"af722672-9267-4b93-9db5-6051a0ba3368","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":57,"box":{"x":117,"y":676,"width":758,"height":12}},{"id":"1cafc895-390a-46d0-a910-f3da6dc5d437","block_type":"box","text":"the Lender and the borrower. The Fund will acquire Participations only if the Lender interpositioned","page_number":57,"box":{"x":116,"y":692,"width":734,"height":12}},{"id":"a90ccf2e-10f6-4056-ab93-c162ee51bf2d","block_type":"box","text":"between the Fund and the borrower is determined by the Fund’s manager to be creditworthy. When","page_number":57,"box":{"x":117,"y":707,"width":738,"height":12}},{"id":"2411ca3a-6ea5-4726-816d-12c1711eedc7","block_type":"box","text":"the Fund purchases Assignments from Lenders, the Fund will acquire direct rights against the borrower","page_number":57,"box":{"x":116,"y":723,"width":767,"height":12}},{"id":"2fc7e732-ca51-4646-ae43-ab4e50338b7f","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":57,"box":{"x":116,"y":738,"width":718,"height":12}},{"id":"77b79684-2f47-448b-b5c7-6251d8cbedc9","block_type":"box","text":"Participations and Assignments on a forward commitment or “when-issued” basis, whereby a Fund","page_number":57,"box":{"x":117,"y":754,"width":731,"height":12}},{"id":"ef8e6eca-ae3a-4444-886b-b9f937ab6fe0","block_type":"box","text":"would agree to purchase a Participation or Assignment at set terms in the future. For more information","page_number":57,"box":{"x":116,"y":769,"width":759,"height":12}},{"id":"96e73b12-5608-4161-a2b1-fb60167be763","block_type":"box","text":"on forward commitments and when-issued securities, see “When-Issued Securities, Delayed Delivery","page_number":57,"box":{"x":116,"y":785,"width":753,"height":12}},{"id":"d9e9322f-a864-48a6-97e5-89dcbca6e907","block_type":"box","text":"Securities and Forward Commitments” below.","page_number":57,"box":{"x":116,"y":800,"width":339,"height":10}},{"id":"57e48077-ba83-4662-8e73-5fef93bee7ae","block_type":"box","text":"A Fund may have difficulty disposing of Assignments and Participations. In certain cases, the market","page_number":57,"box":{"x":116,"y":831,"width":752,"height":12}},{"id":"4b935295-1616-476d-a245-004d018c22dd","block_type":"box","text":"for such instruments may lack sufficient liquidity, and therefore the Fund anticipates that in such cases","page_number":57,"box":{"x":116,"y":847,"width":764,"height":12}},{"id":"d654363d-53fc-44a8-9a01-ce7b38760e70","block_type":"box","text":"such instruments could be sold only to a limited number of institutional investors. The lack of a","page_number":57,"box":{"x":116,"y":862,"width":704,"height":12}},{"id":"7f5f81bc-16f0-4c54-a52e-0e801705d065","block_type":"box","text":"sufficiently liquid secondary market may have an adverse impact on the value of such instruments and","page_number":57,"box":{"x":116,"y":878,"width":765,"height":12}},{"id":"c9e92b88-b73a-421d-ae1c-1b9aea327c5e","block_type":"box","text":"II-9","page_number":57,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"86280776-a0ab-41fe-afc8-3077e36f3761","block_type":"box","text":"NM1026U-6033243-57/221","page_number":57,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e76140c6-b05c-48dc-b28d-85f492402499","block_type":"box","text":"on the Fund’s ability to dispose of particular Assignments or Participations in response to a specific","page_number":58,"box":{"x":116,"y":87,"width":740,"height":12}},{"id":"a674b9b0-0b9f-4f10-849e-aeeb15de3ec7","block_type":"box","text":"economic event, such as deterioration in the creditworthiness of the borrower.","page_number":58,"box":{"x":116,"y":102,"width":583,"height":12}},{"id":"a57cbf4a-2e5e-46be-81f3-3f8a3c09de4f","block_type":"box","text":"Leading financial institutions often act as agent for a broader group of Lenders, generally referred to as","page_number":58,"box":{"x":117,"y":132,"width":768,"height":12}},{"id":"ad196fd4-3475-42e5-949a-cda028b4cb6b","block_type":"box","text":"a syndicate. The syndicate’s agent arranges the loans, holds collateral and accepts payments of","page_number":58,"box":{"x":116,"y":147,"width":720,"height":12}},{"id":"be5cca53-4a0d-44c1-a46a-bd31eba11369","block_type":"box","text":"principal and interest. Failure by the syndicate agent to fulfill its obligations may delay or adversely","page_number":58,"box":{"x":117,"y":163,"width":734,"height":12}},{"id":"d871747c-e9ff-47f6-8e63-61f6f33809f8","block_type":"box","text":"affect receipt of payment by the Fund.","page_number":58,"box":{"x":116,"y":178,"width":287,"height":12}},{"id":"3df2fc60-7326-4f30-bef9-5ae688df287f","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":58,"box":{"x":116,"y":207,"width":706,"height":12}},{"id":"d3c97eb4-8ea0-4703-b669-29a51c21f06d","block_type":"box","text":"Although borrowers frequently provide collateral to secure repayment of these obligations they do not","page_number":58,"box":{"x":116,"y":223,"width":757,"height":12}},{"id":"ff46de6e-d92e-440a-88db-e34b346b45ea","block_type":"box","text":"always do so. If they do provide collateral, the value of the collateral may not completely cover the","page_number":58,"box":{"x":116,"y":238,"width":732,"height":12}},{"id":"59ae3e9b-3478-49a8-815e-16c5eadfe343","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":58,"box":{"x":117,"y":254,"width":757,"height":12}},{"id":"5e20c42a-c97f-4df7-9e22-69aaaab29630","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":58,"box":{"x":116,"y":269,"width":761,"height":12}},{"id":"7632c256-6ba9-4cff-bef2-9cfc34ddc86c","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":58,"box":{"x":116,"y":285,"width":762,"height":12}},{"id":"57b9b2ab-e02d-4bf8-a228-cbdedb344db6","block_type":"box","text":"not recover its principal, may experience a long delay in recovering its investment and may not receive","page_number":58,"box":{"x":117,"y":300,"width":765,"height":12}},{"id":"6219e159-3d9a-4860-a622-39a4852392b2","block_type":"box","text":"interest during the delay.","page_number":58,"box":{"x":117,"y":316,"width":188,"height":12}},{"id":"4969af51-3371-4f84-9407-e5330b84138e","block_type":"box","text":"Transactions in corporate loans may settle on a delayed basis. As a result, the proceeds from the sale","page_number":58,"box":{"x":116,"y":345,"width":763,"height":12}},{"id":"27fb9d39-8a61-44dc-a1d2-56a193550afb","block_type":"box","text":"of corporate loans may not be readily available to make additional investments or to meet a Fund’s","page_number":58,"box":{"x":116,"y":360,"width":738,"height":12}},{"id":"b5a06028-e385-4408-a7f7-5d134921f383","block_type":"box","text":"redemption obligations. To the extent the extended settlement process gives rise to short-term liquidity","page_number":58,"box":{"x":117,"y":376,"width":765,"height":12}},{"id":"e4dea38d-b7ff-4e40-b499-63cab7501bd2","block_type":"box","text":"needs, a Fund may hold additional cash, sell investments or temporarily borrow from banks and other","page_number":58,"box":{"x":117,"y":391,"width":758,"height":12}},{"id":"1cf1d556-a0cd-43c2-a5ad-bda294abbf17","block_type":"box","text":"lenders.","page_number":58,"box":{"x":117,"y":407,"width":63,"height":9}},{"id":"06b1a7d0-39d4-45cb-942e-e651a5447cfd","block_type":"box","text":"In certain circumstances, Loans may not be deemed to be securities under certain federal securities","page_number":58,"box":{"x":117,"y":436,"width":746,"height":12}},{"id":"e238e75f-c34f-4d86-8bb9-3a514b9f8973","block_type":"box","text":"laws. Therefore, in the event of fraud or misrepresentation by a borrower or an arranger, Lenders and","page_number":58,"box":{"x":117,"y":451,"width":758,"height":12}},{"id":"47b56377-479e-4eb7-91a0-5734bd91acfe","block_type":"box","text":"purchasers of interests in Loans, such as the Funds, may not have the protection of the anti-fraud","page_number":58,"box":{"x":117,"y":467,"width":729,"height":12}},{"id":"ebb80b54-6e81-412b-bf39-8acacd794bc5","block_type":"box","text":"provisions of the federal securities laws as would otherwise be available for bonds or stocks. Instead,","page_number":58,"box":{"x":117,"y":482,"width":755,"height":12}},{"id":"54d2c1ce-ee41-482e-aa76-aa98d60ad15d","block_type":"box","text":"in such cases, parties generally would rely on the contractual provisions in the Loan agreement itself","page_number":58,"box":{"x":117,"y":498,"width":750,"height":12}},{"id":"0b2135ae-dcd2-4fe8-8ff1-fea16046e823","block_type":"box","text":"and common-law fraud protections under applicable state law.","page_number":58,"box":{"x":116,"y":513,"width":467,"height":12}},{"id":"e0bb84c9-46ee-4dbe-8075-2e850b15b191","block_type":"box","text":"Direct Lending.","page_number":58,"box":{"x":116,"y":543,"width":109,"height":11}},{"id":"03ca6596-8eb7-4976-a874-4553265b902e","block_type":"box","text":"The Fund may act as the originator for direct loans and engage in direct lending. Direct","page_number":58,"box":{"x":226,"y":542,"width":641,"height":13}},{"id":"90e8957e-ae8d-4c58-af53-233c4af7a8ef","block_type":"box","text":"loans between the Fund and a borrower may not be adm","page_number":58,"box":{"x":117,"y":558,"width":412,"height":12}},{"id":"731f7928-6990-4527-9c1c-7e787d398ed5","block_type":"box","text":"inistered by an underwriter or agent bank. The","page_number":58,"box":{"x":531,"y":558,"width":340,"height":12}},{"id":"2f0c83fa-5442-4ebe-939d-b41af0a3c39b","block_type":"box","text":"Fund may provide financing to commercial borrowers di","page_number":58,"box":{"x":117,"y":573,"width":402,"height":13}},{"id":"a7a683b8-a8b5-4c26-8522-2280032b8956","block_type":"box","text":"rectly or through companies acquired (or created)","page_number":58,"box":{"x":521,"y":573,"width":364,"height":13}},{"id":"3d75b8e3-b5d2-4696-a972-1844eeaa26ac","block_type":"box","text":"and owned by or otherwise affiliat","page_number":58,"box":{"x":116,"y":589,"width":244,"height":12}},{"id":"f1005473-7a11-4157-8979-aeefe8640931","block_type":"box","text":"ed with the Fund. The terms of the","page_number":58,"box":{"x":360,"y":589,"width":255,"height":9}},{"id":"d5bbad6b-677d-46d6-bfbd-b9fc0c3b34fd","block_type":"box","text":"direct loans are negotiated with","page_number":58,"box":{"x":616,"y":589,"width":231,"height":12}},{"id":"0eb8b107-82ed-4f4a-814a-ce098d01f1b0","block_type":"box","text":"borrowers in private transactions. Furthermore, a direct loan may be secured or unsecured.","page_number":58,"box":{"x":117,"y":605,"width":667,"height":12}},{"id":"5f781e2f-4ab8-4050-b052-3399bccd1d8e","block_type":"box","text":"In determining whether to make a direct loan, the Fund will rely primarily upon the creditworthiness of","page_number":58,"box":{"x":117,"y":634,"width":755,"height":12}},{"id":"cb132701-82e4-4f43-9414-e0280ec83940","block_type":"box","text":"the borrower and/or any collateral for payment of interest and repayment of principal. The risks","page_number":58,"box":{"x":116,"y":649,"width":708,"height":12}},{"id":"e8205ffe-fda3-4152-b305-e0721fa7156d","block_type":"box","text":"associated with direct loans are substantially similar to those associated with investing in corporate","page_number":58,"box":{"x":116,"y":665,"width":733,"height":12}},{"id":"477779a8-9a7a-433e-9caa-c5f7b69b4270","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":58,"box":{"x":117,"y":680,"width":764,"height":12}},{"id":"55776826-4e61-43b4-a1e8-2435f1578c46","block_type":"box","text":"insolvent and, consequently, that the Fund will lose money on the loan. Furthermore, direct loans may","page_number":58,"box":{"x":117,"y":696,"width":755,"height":12}},{"id":"e07b515b-8695-4c8f-9637-bd593c90caa7","block_type":"box","text":"subject the Fund to liquidity and interest rate risk and certain direct loans may be deemed illiquid.","page_number":58,"box":{"x":116,"y":711,"width":720,"height":12}},{"id":"b6b40d2d-ace1-457c-9716-81e78aa3305e","block_type":"box","text":"Direct loans are not publicly traded and may not have a secondary market. The lack of a secondary","page_number":58,"box":{"x":117,"y":727,"width":737,"height":12}},{"id":"1ae64a1d-f12c-4017-badb-6137ef1f5ed2","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":58,"box":{"x":117,"y":742,"width":734,"height":12}},{"id":"705f2128-6b26-4336-b8d1-3ee6df58725e","block_type":"box","text":"loan and/or to value the direct loan.","page_number":58,"box":{"x":117,"y":758,"width":260,"height":9}},{"id":"1cfc6113-a8b6-4f02-ab18-2afc82c16f62","block_type":"box","text":"When engaging in direct lending, the Fund’s performance may depend, in part, on the ability of the","page_number":58,"box":{"x":116,"y":787,"width":731,"height":12}},{"id":"bc6c3cc0-c0e0-4c4e-925d-f3a1586326a5","block_type":"box","text":"Fund to originate loans on advantageous terms. In originating loans, the Fund will compete with a","page_number":58,"box":{"x":117,"y":802,"width":722,"height":12}},{"id":"abee68aa-7228-45fd-9a65-a716314b2dd3","block_type":"box","text":"broad spectrum of lenders. Increased competition for, or a diminishment in the available supply of,","page_number":58,"box":{"x":117,"y":818,"width":727,"height":12}},{"id":"6faa9362-1068-4299-a316-712927831fdc","block_type":"box","text":"qualifying loans could result in lower yields on such loans, which could reduce Fund performance.","page_number":58,"box":{"x":116,"y":833,"width":730,"height":12}},{"id":"7cbacf3a-61b2-43ee-975c-1a75889e4f30","block_type":"box","text":"As part of its lending activities, the Fund may originate loans to companies that are experiencing","page_number":58,"box":{"x":116,"y":862,"width":719,"height":12}},{"id":"608ae9ec-132d-4fd2-827f-0ea8fc197f7f","block_type":"box","text":"significant financial or business difficulties, including companies involved in bankruptcy or other","page_number":58,"box":{"x":116,"y":878,"width":710,"height":12}},{"id":"917e5d44-2304-4d0f-ae36-c05c595c1c60","block_type":"box","text":"II-10","page_number":58,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"011bc5e3-72c5-4614-8a8f-fe1de72c94f9","block_type":"box","text":"NM1026U-6033243-58/221","page_number":58,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"026d8302-4174-42ab-ae70-e524cd028dae","block_type":"box","text":"reorganization and liquidation proceedings. Although the terms of such financing may result in","page_number":59,"box":{"x":117,"y":87,"width":701,"height":12}},{"id":"e68946ee-4b5e-445f-84ec-db9c5c2503a7","block_type":"box","text":"significant financial returns to the Fund, they involve a substantial degree of risk. The level of analytical","page_number":59,"box":{"x":116,"y":102,"width":768,"height":13}},{"id":"a4e22972-c09f-4b74-9dc7-640a682c76ce","block_type":"box","text":"sophistication, both financial and legal, necessary for successful financing to companies experiencing","page_number":59,"box":{"x":116,"y":118,"width":758,"height":12}},{"id":"e31d08d8-9f9f-42cc-95bd-b18f0e0410eb","block_type":"box","text":"significant business and financial difficulties is unusually high.","page_number":59,"box":{"x":116,"y":134,"width":461,"height":12}},{"id":"9e90701d-4a24-4449-8f6c-2a4a27119704","block_type":"box","text":"Credit Linked Securities.","page_number":59,"box":{"x":117,"y":162,"width":195,"height":10}},{"id":"bce22607-6e59-49cd-bc9d-a94c1cbff2b7","block_type":"box","text":"Among the income producing securities in which a Fund may invest are","page_number":59,"box":{"x":313,"y":162,"width":541,"height":12}},{"id":"f89d8e8d-f063-42a4-aeb4-af05db8981f6","block_type":"box","text":"credit linked securities, which are issued by a limited purpose trust or other vehicle that, in turn, invests","page_number":59,"box":{"x":116,"y":178,"width":768,"height":12}},{"id":"77f9fd8b-82b6-43d4-b5d9-7313648f05c1","block_type":"box","text":"in a derivative instrument or basket of derivative instruments, such as credit default swaps, interest rate","page_number":59,"box":{"x":117,"y":193,"width":771,"height":12}},{"id":"3c81d671-ba77-4c14-a764-729e28fa9566","block_type":"box","text":"swaps and other securities, in order to provide exposure to certain fixed-income markets. For instance,","page_number":59,"box":{"x":116,"y":209,"width":768,"height":12}},{"id":"4a94e0ee-1c21-4480-a93f-21ac858c1ed1","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":59,"box":{"x":116,"y":224,"width":765,"height":12}},{"id":"83220180-11e0-43a2-9baf-15cac6f43092","block_type":"box","text":"certain market and/or to remain fully invested when more traditional income producing securities are","page_number":59,"box":{"x":116,"y":240,"width":748,"height":12}},{"id":"76b52a29-7e9b-4793-9259-e7507c8d1e49","block_type":"box","text":"not available.","page_number":59,"box":{"x":117,"y":255,"width":103,"height":10}},{"id":"f6c29c64-531f-429b-9e6d-fafc37e63bd9","block_type":"box","text":"Like an investment in a bond, investments in these credit linked securities represent the right to receive","page_number":59,"box":{"x":117,"y":284,"width":770,"height":12}},{"id":"a60a8588-8f71-4d3c-8d3b-27de49b52dba","block_type":"box","text":"periodic income payments (in the form of distributions) and payment of principal at the end of the term","page_number":59,"box":{"x":117,"y":300,"width":761,"height":12}},{"id":"702bb364-247a-4e3c-b5dc-a21a19973e0c","block_type":"box","text":"of the security.","page_number":59,"box":{"x":116,"y":315,"width":114,"height":12}},{"id":"ee05e8d9-3bc8-4b66-af6c-a3c14e51f9cc","block_type":"box","text":"However, these payments are conditioned on the issuer’s receipt of payments from, and the issuer’s","page_number":59,"box":{"x":117,"y":344,"width":748,"height":12}},{"id":"7c08546a-90da-4156-9ae0-5160b088ab31","block_type":"box","text":"potential obligations to, the counterparties to the derivative instruments and other securities in which","page_number":59,"box":{"x":117,"y":359,"width":747,"height":12}},{"id":"ed29b1fb-06d4-4dca-bd65-7db1ebd38d5f","block_type":"box","text":"the issuer invests. For instance, the issuer may sell one or more credit default swaps, under which the","page_number":59,"box":{"x":116,"y":375,"width":762,"height":12}},{"id":"0979c2bf-ef37-4948-97cf-c7b140f5b92d","block_type":"box","text":"issuer would receive a stream of payments over the term of the swap agreements provided that no","page_number":59,"box":{"x":117,"y":390,"width":736,"height":12}},{"id":"fc0161c0-c23f-4dd3-9c9a-f4b4b2f057b2","block_type":"box","text":"event of default has occurred with respect to the referenced debt obligation upon which the swap is","page_number":59,"box":{"x":116,"y":406,"width":741,"height":12}},{"id":"2d9bcf9c-9cf8-4c63-b3ea-34f8aef577b0","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":59,"box":{"x":117,"y":421,"width":756,"height":12}},{"id":"066e40d8-f318-4708-9f10-750c4668d290","block_type":"box","text":"the counterparty the par (or other agreed upon value) of the referenced debt obligation. This, in turn,","page_number":59,"box":{"x":116,"y":437,"width":749,"height":12}},{"id":"464b5c30-204e-4b50-acb2-6ae7b3e8e06f","block_type":"box","text":"would reduce the amount of income and principal that","page_number":59,"box":{"x":116,"y":452,"width":404,"height":12}},{"id":"3d3fccc7-baa7-4a56-80ff-29e154dae29e","block_type":"box","text":"a Fund would receive. A Fund’s investments in","page_number":59,"box":{"x":521,"y":452,"width":351,"height":10}},{"id":"22246252-1192-40c0-943b-ec0c86256620","block_type":"box","text":"these instruments are indirectly subject to the risks associated with derivative instruments, including,","page_number":59,"box":{"x":116,"y":468,"width":750,"height":12}},{"id":"57a0b929-c400-40a6-a89d-a51070d508b6","block_type":"box","text":"among others, credit risk, default or similar event risk, counterparty risk, interest rate risk, leverage risk","page_number":59,"box":{"x":116,"y":483,"width":766,"height":12}},{"id":"6cef05dd-7cd2-4921-8b33-ed4a7f88c9a0","block_type":"box","text":"and management risk. It is also expected that the securities will be exempt from registration under the","page_number":59,"box":{"x":116,"y":499,"width":761,"height":12}},{"id":"6366c957-1ec6-4c00-85a0-15c204f1a2cb","block_type":"box","text":"Securities Act. Accordingly, there may be no established trading market for the securities and they may","page_number":59,"box":{"x":116,"y":514,"width":771,"height":12}},{"id":"2521a931-abef-49a9-8b6a-c523a9ff228c","block_type":"box","text":"constitute illiquid investments.","page_number":59,"box":{"x":116,"y":530,"width":227,"height":12}},{"id":"91877726-5786-46cb-acd4-c14d608c8e1f","block_type":"box","text":"Debt Securities.","page_number":59,"box":{"x":116,"y":559,"width":126,"height":9}},{"id":"8d8d4b4f-839c-4161-977a-84f32cdf1beb","block_type":"box","text":"Debt securities, such as bonds, involve credit risk. This is the risk that the issuer will","page_number":59,"box":{"x":243,"y":559,"width":633,"height":11}},{"id":"bc6004f4-aaf6-44bd-aa8a-0d3f0c87b6cf","block_type":"box","text":"not make timely payments of principal and interest. The degree of credit risk depends on the issuer’s","page_number":59,"box":{"x":117,"y":574,"width":751,"height":12}},{"id":"6d1a56db-cf78-4a1e-97e5-e328e6e6fc6a","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":59,"box":{"x":116,"y":590,"width":749,"height":12}},{"id":"f0932115-98b9-4454-9dd0-f593e13c56ba","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":59,"box":{"x":117,"y":605,"width":763,"height":12}},{"id":"3d82b82a-9b75-4ba0-af9f-08ab93133fa4","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":59,"box":{"x":116,"y":621,"width":754,"height":9}},{"id":"e8bf01e1-504d-46f3-9ba0-ba2cc6aba1db","block_type":"box","text":"Securities.","page_number":59,"box":{"x":116,"y":636,"width":83,"height":10}},{"id":"202bd25a-cc77-48ae-a470-d6d3584780bf","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":59,"box":{"x":116,"y":665,"width":709,"height":12}},{"id":"0a335926-a9e5-474e-834b-17f082bd0c5f","block_type":"box","text":"security may fall when interest rates rise. If interest rates move sharply in a manner not anticipated by","page_number":59,"box":{"x":116,"y":680,"width":755,"height":12}},{"id":"05209b9d-33cc-4a85-b271-cb5776363b13","block_type":"box","text":"Fund management, a Fund’s investments in debt securities could be adversely affected and the Fund","page_number":59,"box":{"x":117,"y":696,"width":752,"height":12}},{"id":"264cef1e-4b69-4066-a9ba-bcdb605f2170","block_type":"box","text":"could lose money. In general, the market price of debt securities with longer maturities will go up or","page_number":59,"box":{"x":116,"y":711,"width":735,"height":12}},{"id":"a36d8e78-599f-4a32-b660-eeaf5d33534f","block_type":"box","text":"down more in response to changes in interest rates than will the market price of shorter-term debt","page_number":59,"box":{"x":116,"y":727,"width":725,"height":12}},{"id":"a205ad6f-c22e-444f-8ed9-d175e1a9eba4","block_type":"box","text":"securities.","page_number":59,"box":{"x":116,"y":743,"width":74,"height":9}},{"id":"e44073cc-70a3-48a6-b938-c6dfcbc7674b","block_type":"box","text":"During periods of rising interest rates, the average life of certain fixed-income securities is extended","page_number":59,"box":{"x":117,"y":771,"width":738,"height":12}},{"id":"fbffda59-e47f-4ed2-9ac3-2d72dbdc547f","block_type":"box","text":"because of slower than expected principal payments. This may lock in a below-market interest rate and","page_number":59,"box":{"x":117,"y":787,"width":765,"height":12}},{"id":"910062df-43a6-4aaa-a620-b6d802dc7866","block_type":"box","text":"extend the duration of these fixed-income securities, especially mortgage-related securities, making","page_number":59,"box":{"x":116,"y":802,"width":739,"height":12}},{"id":"0f2dbabe-9b90-435e-8728-01aab2568ca0","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":59,"box":{"x":116,"y":818,"width":750,"height":12}},{"id":"87c053ac-b9b7-4d0b-a008-97e94901dc66","block_type":"box","text":"securities may exhibit additional volatility and lose value. This is known as extension risk.","page_number":59,"box":{"x":116,"y":833,"width":665,"height":12}},{"id":"30206cff-0f03-4f3c-bbf5-56493c5a8aa3","block_type":"box","text":"The value of fixed-income securities in the Funds can be expected to vary inversely with changes in","page_number":59,"box":{"x":116,"y":862,"width":745,"height":12}},{"id":"ab877b89-2bc5-4658-802d-2ba773bbef4b","block_type":"box","text":"prevailing interest rates. Fixed-income securities with longer maturities, which tend to produce higher","page_number":59,"box":{"x":117,"y":878,"width":753,"height":11}},{"id":"902ac9e5-d2ec-4df7-b283-a23e040bb2e1","block_type":"box","text":"II-11","page_number":59,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"92e4122b-984e-4e85-82bc-015756911c9e","block_type":"box","text":"NM1026U-6033243-59/221","page_number":59,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"1fc060c2-bbea-4a25-824b-d3158a79dda0","block_type":"box","text":"yields, are subject to potentially greater capital appreciation and depreciation than securities with","page_number":60,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"a8f5f27d-94ed-4cb9-805b-0fa2b06b5980","block_type":"box","text":"shorter maturities. The Funds are not restricted to any maximum or minimum time to maturity in","page_number":60,"box":{"x":116,"y":103,"width":714,"height":12}},{"id":"a27ad918-357c-40df-8bf0-0323cc0da7bb","block_type":"box","text":"purchasing individual portfolio securities, and the average maturity of a Fund’s assets will vary.","page_number":60,"box":{"x":117,"y":118,"width":707,"height":12}},{"id":"3f8ed400-7f32-4ef3-8cf1-27b0b71268f2","block_type":"box","text":"Floating and Variable Rate Securities","page_number":60,"box":{"x":116,"y":149,"width":277,"height":12}},{"id":"7e975fdc-d5ed-46e4-9743-3f717bf7eda8","block_type":"box","text":". Certain Funds may invest in debt instruments that pay a variable","page_number":60,"box":{"x":395,"y":149,"width":493,"height":12}},{"id":"6255df9b-f643-4aef-a300-d94aeb296158","block_type":"box","text":"coupon rate. Securities with floating or variable interest rates can be less sensitive to interest rate","page_number":60,"box":{"x":116,"y":165,"width":728,"height":12}},{"id":"19353afb-a75c-41ef-ae05-f8b1ae607cf6","block_type":"box","text":"changes than securities with fixed interest rates, but may decline in value if their interest rates do not","page_number":60,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"9ba38030-d0fd-46a7-880c-4e2587cf0a56","block_type":"box","text":"rise as much, or as quickly, as interest rates in general. Conversely, floating rate securities will not","page_number":60,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"b53bde2b-a488-46b9-a900-c26aade23e7a","block_type":"box","text":"generally increase in value if interest rates decline. The","page_number":60,"box":{"x":116,"y":211,"width":415,"height":12}},{"id":"d617fe4b-93a8-4b2b-b6ef-41f7fb5f4a13","block_type":"box","text":"impact of interest rate changes on floating rate","page_number":60,"box":{"x":532,"y":211,"width":350,"height":12}},{"id":"3b7b6044-33d0-446f-bc2a-8bb672957a95","block_type":"box","text":"investments is typically mitigated by the periodic interest rate reset of the investments. Benchmark","page_number":60,"box":{"x":117,"y":227,"width":733,"height":12}},{"id":"7e0a3efb-bb74-428e-b8dd-f6fdb950625f","block_type":"box","text":"interest rates used for floating and variable rate securities may not accurately track market interest","page_number":60,"box":{"x":117,"y":242,"width":734,"height":12}},{"id":"808a361d-9fee-4bd5-8892-bf178bc46ad1","block_type":"box","text":"rates.","page_number":60,"box":{"x":117,"y":258,"width":45,"height":9}},{"id":"bf81e26d-5ddb-4ae2-829f-26c4eb6265b6","block_type":"box","text":"Inflation-Indexed Bonds.","page_number":60,"box":{"x":117,"y":289,"width":179,"height":9}},{"id":"2330f260-9d57-41f9-adf8-a0d58b492507","block_type":"box","text":"Certain Funds may invest in inflation-indexed bonds, which are fixed-income","page_number":60,"box":{"x":297,"y":289,"width":577,"height":12}},{"id":"4e5829e3-dd8a-490e-b497-e8b73e8fb9de","block_type":"box","text":"securities or other instruments whose principal value is periodically adjusted according to the rate of","page_number":60,"box":{"x":116,"y":304,"width":746,"height":12}},{"id":"0fc7900e-40ed-44d4-a56b-a536f7c00692","block_type":"box","text":"inflation. Two structures are common. The U.S. Treasury and some other issuers use a structure that","page_number":60,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"c340f196-1ce7-4925-8f20-3833a09c0c0b","block_type":"box","text":"accrues inflation into the principal value of the bond. Most other issuers pay out the Consumer Price","page_number":60,"box":{"x":116,"y":335,"width":747,"height":12}},{"id":"2365de39-97fc-4592-be7a-cd2477525848","block_type":"box","text":"Index (“CPI”) accruals as part of a semi-annual coupon.","page_number":60,"box":{"x":117,"y":351,"width":417,"height":12}},{"id":"292bcfbd-79c4-40bb-970f-a62448cfed7a","block_type":"box","text":"Inflation-indexed securities issued by the U.S. Treasury have maturities of five, ten or thirty years,","page_number":60,"box":{"x":117,"y":382,"width":728,"height":12}},{"id":"ab3a00a1-3008-431f-85aa-d816077557e6","block_type":"box","text":"although it is possible that securities with other maturities will be issued in the future. The U.S.","page_number":60,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"ae2ac628-108d-4d5d-b117-b638c3e29442","block_type":"box","text":"Treasury securities pay interest on a semi-annual basis, equal to a fixed percentage of the inflation","page_number":60,"box":{"x":116,"y":413,"width":738,"height":12}},{"id":"d42ceda4-2879-4909-aaa0-803b56987996","block_type":"box","text":"adjusted principal amount. For example, if a Fund purchased an inflation-indexed bond with a par","page_number":60,"box":{"x":116,"y":428,"width":727,"height":12}},{"id":"6f95afb6-cb12-45ef-b780-569547c1950f","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":60,"box":{"x":116,"y":443,"width":753,"height":13}},{"id":"1a2f95f0-a055-41e0-99a4-afa44b56561a","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":60,"box":{"x":116,"y":458,"width":736,"height":13}},{"id":"9214ed17-5dad-4ac0-aecd-7faac30a5e72","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":60,"box":{"x":116,"y":474,"width":766,"height":13}},{"id":"8db6ed38-9c72-484f-9818-7431837e5412","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":60,"box":{"x":116,"y":490,"width":764,"height":12}},{"id":"b41bde68-3895-4acf-9253-67884a7d2d34","block_type":"box","text":"$1,030 and the second semi-annual interest payment would be $15.45 ($1,030 times 1.5%).","page_number":60,"box":{"x":116,"y":505,"width":689,"height":13}},{"id":"4c7b3bd2-4fd9-4420-b171-a15746bd8de6","block_type":"box","text":"If the periodic adjustment rate measuring inflation falls, the principal value of inflation-indexed bonds","page_number":60,"box":{"x":117,"y":537,"width":747,"height":12}},{"id":"05bacdb2-3e97-449a-8f53-f158160a7cd8","block_type":"box","text":"will be adjusted downward, and, consequently, the interest payable on these securities (calculated with","page_number":60,"box":{"x":116,"y":552,"width":769,"height":12}},{"id":"52ba1a6a-3efa-4223-a041-98096379802b","block_type":"box","text":"respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon","page_number":60,"box":{"x":117,"y":568,"width":754,"height":12}},{"id":"40d73865-c704-45c6-8ca0-821a20480f13","block_type":"box","text":"maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds,","page_number":60,"box":{"x":117,"y":583,"width":755,"height":12}},{"id":"3aefcfe8-34c8-41bb-b941-6d1c9ea367c8","block_type":"box","text":"even during a period of deflation. However, the current market value of the bonds is not guaranteed,","page_number":60,"box":{"x":116,"y":599,"width":748,"height":12}},{"id":"e6701a2c-6e14-462c-8f3f-54e3518d7c7b","block_type":"box","text":"and will fluctuate. Certain Funds may also invest in other inflation related bonds which may or may not","page_number":60,"box":{"x":116,"y":614,"width":763,"height":12}},{"id":"766fbad0-2aab-4b06-a4ee-001acea6e996","block_type":"box","text":"provide a similar guarantee. If a guarantee of principal is not provided, the adjusted principal value of","page_number":60,"box":{"x":117,"y":630,"width":752,"height":12}},{"id":"70ea556c-a0cc-424b-a522-d82cec3cd477","block_type":"box","text":"the bond repaid at maturity may be less than the original principal. In addition, if the Fund purchases","page_number":60,"box":{"x":116,"y":645,"width":749,"height":12}},{"id":"a61a0969-aad9-409f-9e3e-adcd4a26873e","block_type":"box","text":"inflation-indexed bonds offered by foreign issuers, the rate of inflation measured by the foreign inflation","page_number":60,"box":{"x":117,"y":661,"width":761,"height":12}},{"id":"71d54b53-3356-4ef5-9d33-855cfb4f9594","block_type":"box","text":"index may not be correlated to the rate of inflation in the United States.","page_number":60,"box":{"x":117,"y":676,"width":523,"height":12}},{"id":"f00a9a7d-fc6e-4d03-a24b-4a89e5148e73","block_type":"box","text":"The value of inflation-indexed bonds is expected to change in response to changes in real interest","page_number":60,"box":{"x":116,"y":707,"width":727,"height":12}},{"id":"d4e8620a-6df2-4bfa-94b5-37f96cedde02","block_type":"box","text":"rates. Real interest rates, in turn, are tied to the relationship between nominal interest rates and the","page_number":60,"box":{"x":117,"y":723,"width":736,"height":12}},{"id":"9d88a20b-3cc4-4dae-8cb2-d7a74ce5723e","block_type":"box","text":"rate of inflation. Therefore, if inflation were to rise at a faster rate than nominal interest rates, real","page_number":60,"box":{"x":117,"y":738,"width":717,"height":11}},{"id":"3a63c88b-c679-45f6-ae5d-7b894fb58273","block_type":"box","text":"interest rates might decline, leading to an increase in value of inflation-indexed bonds. In contrast, if","page_number":60,"box":{"x":117,"y":754,"width":739,"height":12}},{"id":"4181b9c1-8f47-4d39-97a6-bfefaa7c94bb","block_type":"box","text":"nominal interest rates increased at a faster rate than inflation, real interest rates might rise, leading to a","page_number":60,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"1d4c450e-86b8-41f5-a2de-1858ab050c24","block_type":"box","text":"decrease in value of inflation-indexed bonds. There can be no assurance, however, that the value of","page_number":60,"box":{"x":116,"y":785,"width":745,"height":11}},{"id":"ae20de46-fe21-4045-8362-bff5c11b46d7","block_type":"box","text":"inflation-indexed bonds will be directly correlated to changes in interest rates.","page_number":60,"box":{"x":117,"y":800,"width":570,"height":12}},{"id":"8d1bc9b0-5d68-4699-8ab5-e0311a2cd592","block_type":"box","text":"While these securities are expected to be protected from long-term inflationary trends, short-term","page_number":60,"box":{"x":116,"y":831,"width":725,"height":12}},{"id":"6a2e9124-9e68-4779-a325-847352605e0d","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":60,"box":{"x":117,"y":847,"width":731,"height":12}},{"id":"9a34268c-557e-40db-915c-adc781f6188e","block_type":"box","text":"inflation (for example, due to changes in currency exchange rates), investors in these securities may","page_number":60,"box":{"x":117,"y":862,"width":749,"height":12}},{"id":"e1beacbb-912b-48c5-a1f7-1a964ee8c625","block_type":"box","text":"not be protected to the extent that the increase is not reflected in the bond’s inflation measure.","page_number":60,"box":{"x":117,"y":878,"width":704,"height":12}},{"id":"3dddb508-bd08-45b0-ba1e-2ce14eadf18c","block_type":"box","text":"II-12","page_number":60,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"04cb4ced-b782-49ef-a383-98d80eac94b8","block_type":"box","text":"NM1026U-6033243-60/221","page_number":60,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8d6f1bea-8709-49ff-95f5-691b6b810a2c","block_type":"box","text":"In general, the measure used to determine the periodic adjustment of U.S. inflation-indexed bonds is","page_number":61,"box":{"x":117,"y":87,"width":750,"height":12}},{"id":"46ee394f-7241-4f18-8b4a-c7019d7f270b","block_type":"box","text":"the Consumer Price Index for Urban Consumers (“CPI-U”), which is calculated monthly by the U.S.","page_number":61,"box":{"x":116,"y":102,"width":739,"height":13}},{"id":"2997384c-52b8-4c3f-adf7-37d34d5ce81f","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":61,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"067871b7-bd05-4643-b79a-8ad218031450","block_type":"box","text":"components such as housing, food, transportation and energy. Inflation-indexed bonds issued by a","page_number":61,"box":{"x":116,"y":134,"width":739,"height":12}},{"id":"74e8a888-e7b7-483e-95ab-d7115dbb7980","block_type":"box","text":"foreign government are generally adjusted to reflect a comparable inflation index, calculated by that","page_number":61,"box":{"x":116,"y":149,"width":743,"height":12}},{"id":"adfe26fa-d424-4e21-b08a-29528e5e5c64","block_type":"box","text":"government. There can be no assurance that the CPI-U or any foreign inflation index will accurately","page_number":61,"box":{"x":116,"y":165,"width":744,"height":12}},{"id":"aefc444e-cc28-45b8-9295-52520a7fa76e","block_type":"box","text":"measure the real rate of inflation in the prices of goods and services. Moreover, there can be no","page_number":61,"box":{"x":117,"y":180,"width":716,"height":12}},{"id":"f7da4c54-ab4f-4131-aff8-45c90e0158fe","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":61,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"e138a274-e18a-4d40-a695-e698a64f4d74","block_type":"box","text":"United States.","page_number":61,"box":{"x":117,"y":211,"width":109,"height":10}},{"id":"732ba4e9-2487-40ea-8050-c0dde103dd70","block_type":"box","text":"Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary","page_number":61,"box":{"x":116,"y":242,"width":750,"height":12}},{"id":"f60152b0-c245-4b2a-9b2c-f0acbf49e0ec","block_type":"box","text":"income, even though investors do not receive their principal until maturity.","page_number":61,"box":{"x":117,"y":258,"width":552,"height":12}},{"id":"2772c7b4-e665-409b-9e06-fe7bc285700e","block_type":"box","text":"Investment Grade Debt Obligations.","page_number":61,"box":{"x":117,"y":289,"width":265,"height":12}},{"id":"bb4a4a4c-3da3-4df0-ab87-68ae8db156ed","block_type":"box","text":"Certain Funds may invest in “investment grade securities,” which","page_number":61,"box":{"x":383,"y":289,"width":492,"height":12}},{"id":"e53856e6-ff6a-4615-9c40-468852bcf350","block_type":"box","text":"are securities rated in the four highest rating categories of an NRSRO or deemed to be of equivalent","page_number":61,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"add628db-94af-4f35-a6c6-8388d09fde88","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":61,"box":{"x":116,"y":320,"width":734,"height":12}},{"id":"b0110fac-ce82-4a93-a448-c9c792102caa","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":61,"box":{"x":116,"y":335,"width":708,"height":12}},{"id":"0ef370cb-051d-4c86-af1a-c9ea8ec56603","block_type":"box","text":"i.e.","page_number":61,"box":{"x":825,"y":335,"width":20,"height":10}},{"id":"06384e15-9bdd-4b36-86cd-d7b1aec61f95","block_type":"box","text":",","page_number":61,"box":{"x":848,"y":343,"width":8,"height":3}},{"id":"d9b022b9-3914-417a-9430-34d39973196d","block_type":"box","text":"“Baa” by Moody’s or “BBB” by S&P) are considered to have some speculative characteristics and are","page_number":61,"box":{"x":116,"y":351,"width":756,"height":12}},{"id":"b768d8ea-8737-4b28-9186-09b99892d75c","block_type":"box","text":"more sensitive to economic change than higher rated securities. If an investment grade security of a","page_number":61,"box":{"x":117,"y":366,"width":747,"height":12}},{"id":"7b58f9fc-7ce2-4be4-b53d-75c7e17a4b1c","block_type":"box","text":"Fund is subsequently downgraded below investment grade, the Fund’s Manager will consider such an","page_number":61,"box":{"x":117,"y":382,"width":761,"height":12}},{"id":"5ac35cd7-0f28-4410-aed8-e6d7e4cdc404","block_type":"box","text":"event in determining whether the Fund should continue to hold the security. Subject to its investment","page_number":61,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"d752da5e-f5ac-443d-9ddd-fd5900566771","block_type":"box","text":"strategies, there is no limit on the amount of such downgraded securities a Fund may hold.","page_number":61,"box":{"x":116,"y":413,"width":679,"height":12}},{"id":"80682da5-05fb-4025-8052-258b6128b2a7","block_type":"box","text":"See Appendix A to this SAI for a description of applicable securities ratings.","page_number":61,"box":{"x":116,"y":444,"width":566,"height":12}},{"id":"75210422-a328-48d2-96be-01b9a69a4c9b","block_type":"box","text":"High Yield Investments (“Junk Bonds”).","page_number":61,"box":{"x":116,"y":475,"width":296,"height":12}},{"id":"700bc593-ef2b-4490-ab07-eafd4d2bf41c","block_type":"box","text":"Non-investment grade or “high yield” fixed-income or convertible securities commonly known to","page_number":61,"box":{"x":117,"y":498,"width":711,"height":12}},{"id":"6041c2a9-de75-4805-b8ac-9443aeb54b56","block_type":"box","text":"investors as “junk bonds” are debt securities that are rated below investment grade by the major rating","page_number":61,"box":{"x":117,"y":513,"width":764,"height":12}},{"id":"d9beab12-3ff1-4807-8473-63ecd1824687","block_type":"box","text":"agencies or are securities that Fund management believes are of comparable quality. While generally","page_number":61,"box":{"x":116,"y":529,"width":759,"height":12}},{"id":"36d534cc-4b80-4361-bb9b-0f6f0e31b31a","block_type":"box","text":"providing greater income and opportunity for gain, non-investment grade debt securities may be","page_number":61,"box":{"x":117,"y":544,"width":715,"height":12}},{"id":"6a615b29-24f7-4a07-998e-403b01af1813","block_type":"box","text":"subject to greater risks than securities which have higher credit ratings, including a high risk of default,","page_number":61,"box":{"x":116,"y":560,"width":764,"height":12}},{"id":"c3734323-ab0d-4635-943a-d604415b0583","block_type":"box","text":"and their yields will fluctuate over time. High yield securities will generally be in the lower rating","page_number":61,"box":{"x":116,"y":575,"width":709,"height":12}},{"id":"85652660-2c50-472e-a09e-59320af16c8e","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":61,"box":{"x":116,"y":591,"width":755,"height":12}},{"id":"56743141-5a86-430b-a6a0-d6916f0cb084","block_type":"box","text":"will be non-rated. The credit rating of a high yield security does not necessarily address its market","page_number":61,"box":{"x":116,"y":606,"width":730,"height":12}},{"id":"06e56180-c3ca-49b1-8938-0127560e9795","block_type":"box","text":"value risk, and ratings may from time to time change, positively or negatively, to reflect developments","page_number":61,"box":{"x":116,"y":622,"width":757,"height":12}},{"id":"6659bbfc-9509-41c2-8553-bea70cfcd824","block_type":"box","text":"regarding the issuer’s financial condition. High yield securities are considered to be speculative with","page_number":61,"box":{"x":117,"y":637,"width":743,"height":12}},{"id":"a2c2e1f6-413c-4f42-8f82-b5ed6fb2949d","block_type":"box","text":"respect to the capacity of the issuer to timely repay principal and pay interest or dividends in","page_number":61,"box":{"x":117,"y":653,"width":687,"height":12}},{"id":"14f58d57-aef4-4e28-9af6-aec8bc5a4d00","block_type":"box","text":"accordance with the terms of the obligation and may have more credit risk than higher rated securities.","page_number":61,"box":{"x":116,"y":668,"width":761,"height":12}},{"id":"784bb6ed-bfbc-41f0-bc5f-0d6abecad352","block_type":"box","text":"The major risks in junk bond investments include the following:","page_number":61,"box":{"x":116,"y":699,"width":464,"height":13}},{"id":"0b75a59a-2d8b-4d94-bd0e-9009d4949f64","block_type":"box","text":"• Junk bonds may be issued by less creditworthy companies. These securities are vulnerable to","page_number":61,"box":{"x":117,"y":731,"width":731,"height":12}},{"id":"1cfcd06d-973d-4de1-8a11-77fa850f6213","block_type":"box","text":"adverse changes in the issuer’s industry and to general economic conditions. Issuers of junk","page_number":61,"box":{"x":150,"y":746,"width":686,"height":12}},{"id":"336fd37c-fcf7-45d5-a6cc-b08cfedbe399","block_type":"box","text":"bonds may be unable to meet their interest or principal payment obligations because of an","page_number":61,"box":{"x":150,"y":761,"width":669,"height":13}},{"id":"423a2fe8-b863-4eb1-aac6-41ce947b03fa","block_type":"box","text":"economic downturn, specific issuer developments or the unavailability of additional financing.","page_number":61,"box":{"x":150,"y":777,"width":689,"height":12}},{"id":"119e447f-c1ef-41d7-a715-a84e73a713f6","block_type":"box","text":"• The issuers of junk bonds may have a larger amount of outstanding debt relative to their assets","page_number":61,"box":{"x":117,"y":800,"width":740,"height":12}},{"id":"7303ac7a-5cdb-4d9f-8812-9303408ab247","block_type":"box","text":"than issuers of investment grade bonds. If the issuer experiences financial stress, it may be","page_number":61,"box":{"x":150,"y":816,"width":678,"height":12}},{"id":"82b6722d-2034-4dc8-b60c-ada89179e27e","block_type":"box","text":"unable to meet its debt obligations. The issuer’s ability to pay its debt obligations also may be","page_number":61,"box":{"x":150,"y":831,"width":697,"height":12}},{"id":"fccccffe-202c-4bb4-a7e2-d27f0e2cc39b","block_type":"box","text":"lessened by specific issuer developments, or the unavailability of additional financing. Issuers of","page_number":61,"box":{"x":150,"y":847,"width":717,"height":12}},{"id":"5d313ef6-b01e-4f08-b07e-001ce22eb66d","block_type":"box","text":"high yield securities are often in the growth stage of their development and/or involved in a","page_number":61,"box":{"x":150,"y":862,"width":677,"height":12}},{"id":"3695130e-2739-4a00-a23d-21de9edf9ea7","block_type":"box","text":"reorganization or takeover.","page_number":61,"box":{"x":150,"y":878,"width":204,"height":12}},{"id":"c0b56491-e2da-4ab3-ab6b-c5f2df2d6083","block_type":"box","text":"II-13","page_number":61,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"638ffc21-71ea-470f-85cc-ddb216da8803","block_type":"box","text":"NM1026U-6033243-61/221","page_number":61,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"88f81786-39dd-4960-8d1f-425a4a935146","block_type":"box","text":"• Junk bonds are frequently ranked junior to claims by other creditors. If the issuer cannot meet its","page_number":62,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"72a932b8-078c-488f-b0b4-c953fcfe1d6b","block_type":"box","text":"obligations, the senior obligations are generally paid off before the junior obligations, which will","page_number":62,"box":{"x":150,"y":102,"width":706,"height":13}},{"id":"f6256499-4e86-48a4-bdc7-d62b50d4f5c4","block_type":"box","text":"potentially limit a Fund’s ability to fully recover principal or to receive interest payments when","page_number":62,"box":{"x":150,"y":118,"width":693,"height":12}},{"id":"2e23e7ab-4b01-4140-9083-85b33160dab3","block_type":"box","text":"senior securities are in default. Thus, investors in high yield securities have a lower degree of","page_number":62,"box":{"x":150,"y":134,"width":696,"height":12}},{"id":"886142c6-53f5-4874-95bd-013d274e0a29","block_type":"box","text":"protection with respect to principal and interest payments than do investors in higher rated","page_number":62,"box":{"x":150,"y":149,"width":674,"height":12}},{"id":"0ae4ddae-0a5e-44b7-8a05-8637e377c64e","block_type":"box","text":"securities.","page_number":62,"box":{"x":150,"y":165,"width":80,"height":9}},{"id":"129786fa-0dba-443c-b4f6-6b65f997635c","block_type":"box","text":"• Junk bonds frequently have redemption features that permit an issuer to repurchase the security","page_number":62,"box":{"x":117,"y":188,"width":753,"height":12}},{"id":"d990134c-1dd0-41e8-9428-f61c01ef65b2","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":62,"box":{"x":149,"y":203,"width":738,"height":12}},{"id":"21e2d481-a104-4d45-a91d-90c7decae621","block_type":"box","text":"proceeds in bonds with lower yields and may lose income.","page_number":62,"box":{"x":150,"y":219,"width":437,"height":12}},{"id":"ac94d1cc-214c-4fd4-bbdf-8597c7150280","block_type":"box","text":"• Prices of junk bonds are subject to extreme price fluctuations. Negative economic developments","page_number":62,"box":{"x":117,"y":242,"width":753,"height":12}},{"id":"b35f94d9-198c-453a-a2e4-d07d4e7c6a2b","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":62,"box":{"x":150,"y":258,"width":713,"height":12}},{"id":"c329060f-8cc8-461e-a287-faf21f0a0d6e","block_type":"box","text":"income securities.","page_number":62,"box":{"x":150,"y":273,"width":139,"height":10}},{"id":"d1fe2403-c5fc-4de1-81bb-ccba7137300c","block_type":"box","text":"• Junk bonds may be less liquid than higher rated fixed-income securities even under normal","page_number":62,"box":{"x":117,"y":296,"width":714,"height":12}},{"id":"394b30e2-8180-4791-b183-59c5d49e6ed9","block_type":"box","text":"economic conditions. Under certain economic and/or market conditions, a Fund may have difficulty","page_number":62,"box":{"x":150,"y":312,"width":738,"height":12}},{"id":"4b53c976-e804-4215-a702-af24339e1fd8","block_type":"box","text":"disposing of certain high yield securities due to the limited number of investors in that sector of the","page_number":62,"box":{"x":150,"y":327,"width":734,"height":12}},{"id":"d35853c9-f084-481e-9803-182129b3b790","block_type":"box","text":"market. There are fewer dealers in the junk bond market, and there may be significant differences","page_number":62,"box":{"x":150,"y":343,"width":730,"height":12}},{"id":"e4d02611-6289-4049-a1a3-c91e80540462","block_type":"box","text":"in the prices quoted for junk bonds by the dealers, and such quotations may not be the actual","page_number":62,"box":{"x":150,"y":358,"width":698,"height":12}},{"id":"9cb26a84-30b9-4ed6-9123-e8170aff096d","block_type":"box","text":"prices available for a purchase or sale. Because junk bonds are less liquid than higher rated","page_number":62,"box":{"x":150,"y":374,"width":688,"height":12}},{"id":"2cf17811-ad71-4340-857d-a7da2ab16cb8","block_type":"box","text":"bonds, judgment may play a greater role in valuing certain of a Fund’s portfolio securities than in","page_number":62,"box":{"x":150,"y":389,"width":720,"height":12}},{"id":"98ceffc9-7084-4725-a382-166c38f1ae2c","block_type":"box","text":"the case of securities trading in a more liquid market.","page_number":62,"box":{"x":150,"y":405,"width":398,"height":12}},{"id":"ea100c62-b614-443b-828d-871d67514d09","block_type":"box","text":"• The secondary markets for high yield securities are not as liquid as the secondary markets for","page_number":62,"box":{"x":117,"y":428,"width":734,"height":12}},{"id":"332ddb6c-edbe-43fa-a40a-a6e4aa009e1d","block_type":"box","text":"higher rated securities. The secondary markets for high yield securities are concentrated in","page_number":62,"box":{"x":150,"y":444,"width":680,"height":12}},{"id":"ef6c838c-7d6b-4879-a609-eb1bc7fe679e","block_type":"box","text":"relatively few market makers and participants in the markets are mostly institutional investors,","page_number":62,"box":{"x":150,"y":459,"width":699,"height":12}},{"id":"e6337488-f58c-4a53-ac9f-c06119a06a10","block_type":"box","text":"including insurance companies, banks, other financial institutions and mutual funds. In addition,","page_number":62,"box":{"x":150,"y":475,"width":712,"height":12}},{"id":"2a1fbf9a-ed43-414d-867c-8fd93e22b73f","block_type":"box","text":"the trading volume for high yield securities is generally lower than that for higher rated securities","page_number":62,"box":{"x":150,"y":490,"width":718,"height":12}},{"id":"692b8f90-c45f-4867-92cc-92fe0cb9c033","block_type":"box","text":"and the secondary markets could contract under adverse market or economic conditions","page_number":62,"box":{"x":150,"y":506,"width":662,"height":12}},{"id":"bd7387d8-d761-4ecf-8df7-bc44f11d16a9","block_type":"box","text":"independent of any specific adverse changes in the condition of a particular issuer. Under certain","page_number":62,"box":{"x":150,"y":521,"width":725,"height":12}},{"id":"0c99f017-0ebb-4f5f-ae7c-eb2eb151eb76","block_type":"box","text":"economic and/or market conditions, a Fund may have difficulty disposing of certain high yield","page_number":62,"box":{"x":150,"y":537,"width":695,"height":12}},{"id":"626d103a-9a3a-4280-9fba-c5b50218b0d4","block_type":"box","text":"securities due to the limited number of investors in that sector of the market. An illiquid secondary","page_number":62,"box":{"x":150,"y":552,"width":728,"height":12}},{"id":"42dd9e89-61fb-4ce0-acf0-8517ecc7e71a","block_type":"box","text":"market may adversely affect the market price of the high yield security, which may result in","page_number":62,"box":{"x":150,"y":568,"width":678,"height":12}},{"id":"33aa930e-2674-4954-b966-705bee962ae8","block_type":"box","text":"increased difficulty selling the particular issue and obtaining accurate market quotations on the","page_number":62,"box":{"x":150,"y":583,"width":706,"height":12}},{"id":"7c65af7d-bf4a-4c73-a996-1d46be3195fd","block_type":"box","text":"issue when valuing a Fund’s assets. Market quotations on high yield securities are available only","page_number":62,"box":{"x":150,"y":599,"width":722,"height":12}},{"id":"e7c5b39c-0652-43d3-9ef2-4f8044bbccc8","block_type":"box","text":"from a limited number of dealers, and such quotations may not be the actual prices available for a","page_number":62,"box":{"x":149,"y":614,"width":731,"height":12}},{"id":"d0571381-ebd6-47f6-8e22-fed42b22561e","block_type":"box","text":"purchase or sale. When the secondary market for high yield securities becomes more illiquid, or in","page_number":62,"box":{"x":150,"y":630,"width":734,"height":12}},{"id":"655c829b-ace0-462d-8a49-c2d9bf44f638","block_type":"box","text":"the absence of readily available market quotations for such securities, the relative lack of reliable","page_number":62,"box":{"x":150,"y":645,"width":723,"height":12}},{"id":"813f3d64-e6f0-4a37-81a3-ba422645e1db","block_type":"box","text":"objective data makes it more difficult to value a Fund’s securities, and judgment plays a more","page_number":62,"box":{"x":150,"y":661,"width":691,"height":12}},{"id":"4fdb736d-cd46-45a2-b53c-d0bdb1c776a4","block_type":"box","text":"important role in determining such valuations.","page_number":62,"box":{"x":150,"y":676,"width":337,"height":12}},{"id":"b204144b-5ea9-4a53-8602-5858ad08de27","block_type":"box","text":"• A Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate","page_number":62,"box":{"x":117,"y":699,"width":757,"height":13}},{"id":"06890f87-ed76-489e-8242-69e4ad981728","block_type":"box","text":"new terms with a defaulting issuer.","page_number":62,"box":{"x":150,"y":715,"width":256,"height":12}},{"id":"ef1a302b-6c0e-4a3a-9a6b-4f5f15b9ba54","block_type":"box","text":"• The junk bond markets may react strongly to adverse news about an issuer or the economy, or to","page_number":62,"box":{"x":117,"y":738,"width":756,"height":12}},{"id":"de04d505-ecc7-4480-bf8b-e212d38984d7","block_type":"box","text":"the perception or expectation of adverse news, whether or not it is based on fundamental analysis.","page_number":62,"box":{"x":150,"y":754,"width":731,"height":12}},{"id":"7381981a-8e4c-443c-8c12-603888f550dd","block_type":"box","text":"Additionally, prices for high yield securities may be affected by legislative and regulatory","page_number":62,"box":{"x":149,"y":769,"width":654,"height":12}},{"id":"2fb7bf1e-27a7-412a-a147-498bbf134029","block_type":"box","text":"developments. These developments could adversely affect a Fund’s NAV and investment","page_number":62,"box":{"x":150,"y":785,"width":664,"height":12}},{"id":"8287e73b-cbe6-4780-b4a3-b1a8630acd88","block_type":"box","text":"practices, the secondary market for high yield securities, the financial condition of issuers of these","page_number":62,"box":{"x":150,"y":800,"width":726,"height":12}},{"id":"9ce74218-1cb7-4a8c-8392-fd5492e40597","block_type":"box","text":"securities and the value and liquidity of outstanding high yield securities, especially in a thinly","page_number":62,"box":{"x":150,"y":816,"width":690,"height":12}},{"id":"84fee7cb-d76c-4fb1-8558-4264aec30c37","block_type":"box","text":"traded market. For example, federal legislation requiring the divestiture by federally insured","page_number":62,"box":{"x":150,"y":831,"width":681,"height":12}},{"id":"f6c47561-4617-4eac-95fe-ca0ab54c9b12","block_type":"box","text":"savings and loan associations of their investments in high yield bonds and limiting the deductibility","page_number":62,"box":{"x":150,"y":847,"width":733,"height":12}},{"id":"4af07f61-438a-4594-96fb-04dcbf78e37c","block_type":"box","text":"of interest by certain corporate issuers of high yield bonds adversely affected the market in the","page_number":62,"box":{"x":150,"y":862,"width":706,"height":12}},{"id":"4a701ed2-a9fe-4f4c-a3cb-732fe67b2c9f","block_type":"box","text":"past.","page_number":62,"box":{"x":150,"y":878,"width":41,"height":12}},{"id":"78d4aa69-e2b5-4821-9609-f3968f2f8e42","block_type":"box","text":"II-14","page_number":62,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"57a11909-cc3d-4fde-8f23-b98f14683ada","block_type":"box","text":"NM1026U-6033243-62/221","page_number":62,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8aebe55d-b9dc-42bd-a86f-487f0885728e","block_type":"box","text":"• The rating assigned by a rating agency evaluates the issuing agency’s assessment of the safety of","page_number":63,"box":{"x":117,"y":87,"width":770,"height":12}},{"id":"76c68827-68aa-4d74-97a7-a5f1f4990eac","block_type":"box","text":"a non-investment grade security’s principal and interest payments, but does not address market","page_number":63,"box":{"x":150,"y":103,"width":716,"height":12}},{"id":"9f2a17ee-fc14-43f4-8fe6-c12575b4e39a","block_type":"box","text":"value risk. Because such ratings of the ratings agencies may not always reflect current conditions","page_number":63,"box":{"x":150,"y":118,"width":728,"height":12}},{"id":"f0ab1094-158f-421c-9df1-0950cea1dce8","block_type":"box","text":"and events, in addition to using recognized rating agencies and other sources, the Manager or","page_number":63,"box":{"x":150,"y":134,"width":705,"height":12}},{"id":"a178d062-b7fd-4248-8416-ffffff01e29e","block_type":"box","text":"sub-adviser performs its own analysis of the issuers whose non-investment grade securities a","page_number":63,"box":{"x":150,"y":149,"width":700,"height":12}},{"id":"d2c9306c-1b66-4f72-8e68-304f5ed0b8cd","block_type":"box","text":"Fund holds. Because of this, the Fund’s performance may depend more on the Manager’s or","page_number":63,"box":{"x":151,"y":165,"width":693,"height":12}},{"id":"c52d4592-0fca-40d8-84b3-d4207ba7a79f","block_type":"box","text":"sub-adviser’s own credit analysis than in the case of mutual funds investing in higher-rated","page_number":63,"box":{"x":150,"y":180,"width":678,"height":12}},{"id":"ec1c4b15-982b-41b4-a47c-41fedad6ce4c","block_type":"box","text":"securities.","page_number":63,"box":{"x":150,"y":196,"width":80,"height":9}},{"id":"c3d7f61a-2729-4d44-8e85-a09be56cf3c0","block_type":"box","text":"In selecting non-investment grade securities, the Manager or sub-adviser considers factors such as","page_number":63,"box":{"x":117,"y":227,"width":742,"height":12}},{"id":"1ad51f4b-0b2a-4744-bce7-4d6032ce78ec","block_type":"box","text":"those relating to the creditworthiness of issuers, the ratings and performance of the securities, the","page_number":63,"box":{"x":116,"y":242,"width":731,"height":12}},{"id":"1b387bbd-8922-4c76-8650-9a5f58cbc8e5","block_type":"box","text":"protections afforded the securities and the diversity of the Fund. The Manager or sub-adviser","page_number":63,"box":{"x":117,"y":258,"width":694,"height":12}},{"id":"d7c75e9c-c5e8-49ae-9dbf-93bbdf39531b","block_type":"box","text":"continuously monitors the issuers of non-investment grade securities held by the Fund for their ability","page_number":63,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"f38dcb17-82db-42fa-8a0c-0944d1681326","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":63,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"780cb8a4-d4a2-42c0-8358-0ac4afc536b7","block_type":"box","text":"Fund so that it can meet redemption requests. If a security’s rating is reduced below the minimum","page_number":63,"box":{"x":117,"y":304,"width":729,"height":12}},{"id":"17a4d89f-d5bb-4cca-b6cd-8d41a0ebd316","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":63,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"f6efa5ed-6046-4f90-b3bf-a392016b01e1","block_type":"box","text":"Fund should continue to hold the security.","page_number":63,"box":{"x":117,"y":335,"width":315,"height":12}},{"id":"ef3880d6-838a-4088-bd9e-d6d889a803bb","block_type":"box","text":"In the event that a Fund investing in high yield securities experiences an unexpected level of net","page_number":63,"box":{"x":117,"y":366,"width":718,"height":12}},{"id":"09329df1-3928-4d2d-9ac7-0270427b8584","block_type":"box","text":"redemptions, the Fund could be forced to sell its holdings without regard to the investment merits,","page_number":63,"box":{"x":117,"y":382,"width":729,"height":12}},{"id":"9dfc237f-30c1-40db-8f23-d480df89c27a","block_type":"box","text":"thereby decreasing the assets upon which the Fund’s rate of return is based.","page_number":63,"box":{"x":116,"y":397,"width":575,"height":12}},{"id":"d2dcbf40-2229-4ef9-be00-fe4b9295e9bd","block_type":"box","text":"The costs attributable to investing in the junk bond markets are usually higher for several reasons,","page_number":63,"box":{"x":116,"y":428,"width":733,"height":12}},{"id":"4ac487bc-1be7-47a4-9743-3ae5dcccf42d","block_type":"box","text":"such as higher investment research costs and higher commission costs.","page_number":63,"box":{"x":116,"y":444,"width":540,"height":12}},{"id":"88bc727a-28cd-4d8a-ae49-65fa69889fbe","block_type":"box","text":"Mezzanine Investments.","page_number":63,"box":{"x":116,"y":475,"width":179,"height":9}},{"id":"f1bbe8ab-12a3-452d-b957-0ddcf4594af2","block_type":"box","text":"Certain Funds, consistent with their restrictions on investing in securities of a","page_number":63,"box":{"x":297,"y":475,"width":579,"height":12}},{"id":"ab42ad5d-3ba0-4a86-a44d-179a12f0bdb3","block_type":"box","text":"specific credit quality, may invest in certain high yield securities known as mezzanine investments,","page_number":63,"box":{"x":116,"y":490,"width":735,"height":12}},{"id":"49e42fb6-b7c4-486c-b292-03882305362d","block_type":"box","text":"which are subordinated debt securities which are generally issued in private placements in connection","page_number":63,"box":{"x":116,"y":506,"width":762,"height":12}},{"id":"862e3e21-23f9-4f76-a7dd-49224f5ca1bb","block_type":"box","text":"with an equity security (","page_number":63,"box":{"x":116,"y":521,"width":175,"height":12}},{"id":"bde4f2d4-a4c2-445b-a33b-cf0ac3110ffe","block_type":"box","text":"e.g.","page_number":63,"box":{"x":292,"y":524,"width":26,"height":9}},{"id":"be280282-5cd0-4b90-8a92-c50e94067b3e","block_type":"box","text":", with attached warrants). Such mezzanine investments may be issued with","page_number":63,"box":{"x":321,"y":521,"width":563,"height":12}},{"id":"3702c4b5-608f-4792-aa9b-ec0e47ce09d0","block_type":"box","text":"or without registration rights. Similar to other high yield securities, maturities of mezzanine investments","page_number":63,"box":{"x":116,"y":537,"width":767,"height":12}},{"id":"b08bbb46-da22-45a8-98e7-b13757fcddd4","block_type":"box","text":"are typically seven to ten years, but the expected average life is significantly shorter at three to five","page_number":63,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"06b15b8a-a7cd-4a82-a617-7fa3b0d744de","block_type":"box","text":"years. Mezzanine investments are usually unsecured and subordinate to other obligations of the","page_number":63,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"7ab44e42-7c4e-4926-a78e-ccc31383ca67","block_type":"box","text":"issuer.","page_number":63,"box":{"x":117,"y":583,"width":53,"height":10}},{"id":"805bb85d-0c32-4f06-a907-694c887c3e42","block_type":"box","text":"Pay-in-kind Bonds.","page_number":63,"box":{"x":116,"y":614,"width":139,"height":12}},{"id":"d811ebc2-ba4d-4755-a6dc-451491723465","block_type":"box","text":"Certain Funds may invest in pay-in-kind, or PIK, bonds. PIK bonds are bonds which","page_number":63,"box":{"x":257,"y":614,"width":631,"height":12}},{"id":"afa04ddf-c13f-4b1a-b79f-bb6e99a593ed","block_type":"box","text":"pay interest through the issuance of additional debt or equity securities. Similar to zero coupon","page_number":63,"box":{"x":117,"y":630,"width":706,"height":12}},{"id":"9994f486-faf8-4811-ab27-6d291022a57e","block_type":"box","text":"obligations, pay-in-kind bonds also carry additional risk as holders of these types of securities realize","page_number":63,"box":{"x":116,"y":645,"width":753,"height":12}},{"id":"d63970b9-b60c-43bd-a663-1f893758dcb4","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":63,"box":{"x":117,"y":661,"width":707,"height":12}},{"id":"d0f670b3-fac9-45e2-b842-5863b264325a","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":63,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"e4db49e6-10a6-436e-a085-afe304d808d5","block_type":"box","text":"affected by interest rate changes to a greater extent, and therefore tends to be more volatile, than that","page_number":63,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"c6f557cf-76e8-443d-aa44-83a085c7e07f","block_type":"box","text":"of securities which pay interest in cash. Additionally, current U.S. federal tax law requires the holder of","page_number":63,"box":{"x":116,"y":707,"width":759,"height":12}},{"id":"405b73d3-024e-408f-a9f6-3809df5950d4","block_type":"box","text":"pay-in-kind bonds to accrue income with respect to these securities prior to the receipt of cash","page_number":63,"box":{"x":117,"y":723,"width":698,"height":12}},{"id":"bfd5bcab-ced9-4e07-b4fc-f9b530a19e1e","block_type":"box","text":"payments. To maintain its qualification as a regulated investment company and avoid liability for U.S.","page_number":63,"box":{"x":117,"y":738,"width":747,"height":12}},{"id":"f4a3c3ad-3fa1-4c3b-8889-03c96114b338","block_type":"box","text":"federal income and excise taxes, each Fund may be required to distribute income accrued with respect","page_number":63,"box":{"x":116,"y":754,"width":765,"height":12}},{"id":"5c45d14d-4270-4837-b42a-59b21071d098","block_type":"box","text":"to these securities and may have to dispose of portfolio securities under disadvantageous","page_number":63,"box":{"x":116,"y":769,"width":665,"height":12}},{"id":"dc166f2c-c181-48fe-9d3f-adfc507dc238","block_type":"box","text":"circumstances in order to generate cash to satisfy these distribution requirements.","page_number":63,"box":{"x":116,"y":785,"width":608,"height":12}},{"id":"ba4b9dc3-e7b9-42be-8ba2-b29c2897880c","block_type":"box","text":"Supranational Entities.","page_number":63,"box":{"x":117,"y":816,"width":165,"height":12}},{"id":"72b83fa9-ca1b-4d2d-9f60-d84890d94da1","block_type":"box","text":"A Fund may invest in debt securities of supranational entities. Examples of","page_number":63,"box":{"x":289,"y":816,"width":555,"height":12}},{"id":"1bc13893-aade-456b-a6a3-9335a4cce0a1","block_type":"box","text":"such entities include the International Bank for Reconstruction and Development (the World Bank), the","page_number":63,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"7d6f9767-4d38-402f-b925-5af75735e7f8","block_type":"box","text":"European Steel and Coal Community, the Asian Development Bank and the Inter-American","page_number":63,"box":{"x":117,"y":847,"width":683,"height":12}},{"id":"d1b0463a-7b75-44cc-bb30-e2df64e40153","block_type":"box","text":"Development Bank. The government members, or “stockholders,” usually make initial capital","page_number":63,"box":{"x":117,"y":862,"width":691,"height":12}},{"id":"3fc0a7eb-d53c-44fe-9f07-818435a294ff","block_type":"box","text":"contributions to the supranational entity and in many cases are committed to make additional capital","page_number":63,"box":{"x":116,"y":878,"width":748,"height":12}},{"id":"264f106d-b891-4f5c-9edb-ed44c4758c74","block_type":"box","text":"II-15","page_number":63,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ba30f55c-454b-4aee-8d3b-3def7b54f0c1","block_type":"box","text":"NM1026U-6033243-63/221","page_number":63,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ab2fd5b6-581f-4d27-9a05-f95d99d42537","block_type":"box","text":"contributions if the supranational entity is unable to repay its borrowings. There is no guarantee that","page_number":64,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"f169d10b-67e0-4df0-85fa-c93d241c0ef7","block_type":"box","text":"one or more stockholders of a supranational entity will continue to make any necessary additional","page_number":64,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"dbb453b5-2a0d-4e44-ad39-b12c76540ac0","block_type":"box","text":"capital contributions. If such contributions are not made, the entity may be unable to pay interest or","page_number":64,"box":{"x":116,"y":118,"width":739,"height":12}},{"id":"6cc7cc64-bc8c-4ad1-9888-bdc7910e25e8","block_type":"box","text":"repay principal on its debt securities, and a Fund may lose money on such investments.","page_number":64,"box":{"x":117,"y":134,"width":655,"height":12}},{"id":"4b41a30e-9eca-4638-be73-f4e7dde837d0","block_type":"box","text":"Depositary Receipts (ADRs, EDRs and GDRs).","page_number":64,"box":{"x":116,"y":167,"width":367,"height":12}},{"id":"ba6e23ab-c9cc-487b-af4e-f5fec6b551bb","block_type":"box","text":"Certain Funds may invest in the securities of foreign","page_number":64,"box":{"x":484,"y":167,"width":397,"height":12}},{"id":"0663b0ab-f041-4e3b-af3e-058f2d06537a","block_type":"box","text":"issuers in the form of Depositary Receipts or other securities convertible into securities of foreign","page_number":64,"box":{"x":117,"y":182,"width":722,"height":12}},{"id":"84f9a527-bb44-4ba7-a2e2-91ff800cb94c","block_type":"box","text":"issuers. Depositary Receipts may not necessarily be denominated in the same currency as the","page_number":64,"box":{"x":117,"y":198,"width":707,"height":12}},{"id":"ce2fffcf-0102-41bf-93ef-63999f08511a","block_type":"box","text":"underlying securities into which they may be converted. The Fund may invest in both sponsored and","page_number":64,"box":{"x":117,"y":213,"width":749,"height":12}},{"id":"74af126f-0970-4afa-822f-aa5b7c1da4e7","block_type":"box","text":"unsponsored American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”), Global","page_number":64,"box":{"x":117,"y":229,"width":769,"height":12}},{"id":"5a795481-b770-4df3-97f5-31382a8438ed","block_type":"box","text":"Depositary Receipts (“GDRs”) and other similar global instruments. ADRs typically are issued by an","page_number":64,"box":{"x":117,"y":244,"width":743,"height":12}},{"id":"b7ed9508-75cd-4d70-8da2-be90fcc92b93","block_type":"box","text":"American bank or trust company and evidence ownership of underlying securities issued by a foreign","page_number":64,"box":{"x":116,"y":260,"width":756,"height":12}},{"id":"6e8e8d4e-1037-4d04-840f-758dd90e6cf1","block_type":"box","text":"corporation. EDRs, which are sometimes referred to as Continental Depositary Receipts, are receipts","page_number":64,"box":{"x":116,"y":275,"width":757,"height":12}},{"id":"e263e10c-cedd-4a82-bf5e-9af0775d6fb4","block_type":"box","text":"issued in Europe, typically by foreign banks and trust companies, that evidence ownership of either","page_number":64,"box":{"x":117,"y":291,"width":739,"height":12}},{"id":"5c8d21e2-bd88-494d-ab18-3438cbc65929","block_type":"box","text":"foreign or domestic underlying securities. GDRs are depositary receipts structured like global debt","page_number":64,"box":{"x":116,"y":306,"width":732,"height":12}},{"id":"d8970055-df70-4df5-8e08-54c639c25a67","block_type":"box","text":"issues to facilitate trading on an international basis. In addition to investment risks associated with the","page_number":64,"box":{"x":117,"y":322,"width":758,"height":12}},{"id":"da98d6ab-97eb-4707-a160-7608762ebd4f","block_type":"box","text":"underlying issuer, Depositary Receipts expose a Fund to additional risks associated with the","page_number":64,"box":{"x":117,"y":337,"width":689,"height":12}},{"id":"0643f73c-a7fd-4dc9-8477-28bb60b053da","block_type":"box","text":"non-uniform terms that apply to Depositary Receipt programs, credit exposure to the depository bank","page_number":64,"box":{"x":117,"y":353,"width":754,"height":12}},{"id":"3ac7a3c5-05cf-41dd-b39d-4162dd5787ae","block_type":"box","text":"and to the sponsors and other parties with whom the depository bank establishes the programs,","page_number":64,"box":{"x":116,"y":368,"width":716,"height":12}},{"id":"1cb1a2c1-5d90-4e2c-a9e4-da9e9101640d","block_type":"box","text":"currency risk and the risk of an illiquid market for Depositary Receipts. Unsponsored ADR, EDR and","page_number":64,"box":{"x":116,"y":384,"width":748,"height":12}},{"id":"555e2f3a-d13e-470a-bd81-925f7a8460fe","block_type":"box","text":"GDR programs are organized independently and without the cooperation of the issuer of the underlying","page_number":64,"box":{"x":117,"y":399,"width":771,"height":12}},{"id":"7e229da4-0b0f-4a44-893d-e834ae2a10f6","block_type":"box","text":"securities. Unsponsored programs generally expose investors to greater risks than sponsored","page_number":64,"box":{"x":116,"y":415,"width":701,"height":12}},{"id":"6d21ab0e-1844-48fd-9d58-09555a8b5de5","block_type":"box","text":"programs and do not provide holders with many of the shareholder benefits that come from investing in","page_number":64,"box":{"x":117,"y":430,"width":769,"height":12}},{"id":"1bb8ae8c-6d37-4381-8922-203d5b2111dd","block_type":"box","text":"a sponsored Depositary Receipt. Available information concerning the issuer may not be as current as","page_number":64,"box":{"x":116,"y":446,"width":764,"height":12}},{"id":"b189a8f7-ee4a-4413-9769-cf5d8cf4bcae","block_type":"box","text":"for sponsored ADRs, EDRs and GDRs, and the prices of unsponsored ADRs, EDRs and GDRs may","page_number":64,"box":{"x":116,"y":461,"width":750,"height":12}},{"id":"a95901b6-f1c2-4ba8-a254-9c83baebabc3","block_type":"box","text":"be more volatile than if such instruments were sponsored by the issuer. Depositary Receipts are","page_number":64,"box":{"x":117,"y":477,"width":718,"height":12}},{"id":"522cfb46-e10c-46ee-b990-c77fa9af2a35","block_type":"box","text":"generally subject to the same risks as the foreign securities that they evidence or into which they may","page_number":64,"box":{"x":116,"y":492,"width":759,"height":12}},{"id":"1ea05205-7bbf-4dd9-8963-2e461c827704","block_type":"box","text":"be converted. Investments in ADRs, EDRs and GDRs present additional investment considerations as","page_number":64,"box":{"x":117,"y":508,"width":763,"height":12}},{"id":"0037ad10-2015-44d3-90c4-06306bd7f068","block_type":"box","text":"described under “Foreign Investment Risks.”","page_number":64,"box":{"x":116,"y":523,"width":336,"height":12}},{"id":"1798a338-2f3c-4d0a-9927-973671e401b7","block_type":"box","text":"Derivatives.","page_number":64,"box":{"x":116,"y":557,"width":99,"height":9}},{"id":"1daf37da-7eb0-499a-826d-166ffd1d0ad5","block_type":"box","text":"General.","page_number":64,"box":{"x":117,"y":581,"width":68,"height":9}},{"id":"f6b3c4bc-cd78-4d59-8531-e2ef5f1dda55","block_type":"box","text":"Each Fund may use instruments referred to as derivatives, which are financial instruments","page_number":64,"box":{"x":186,"y":581,"width":675,"height":12}},{"id":"7251923d-8c89-4abb-9788-28e3b6839a12","block_type":"box","text":"that derive their value from one or more securities, commodities (such as gold or oil), currencies,","page_number":64,"box":{"x":116,"y":596,"width":722,"height":12}},{"id":"3372daf6-8d2a-4cdb-9bce-16cc455b38c6","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":64,"box":{"x":117,"y":612,"width":758,"height":12}},{"id":"abd927b0-c944-46c8-bb4f-3f885ced4dd5","block_type":"box","text":"prime lending rate) or other reference asset. Derivatives may allow a Fund to increase or decrease the","page_number":64,"box":{"x":117,"y":627,"width":765,"height":12}},{"id":"9d8c8601-2b3c-4437-93a8-85aefe4fdbe0","block_type":"box","text":"level of risk to which the Fund is exposed more quickly and efficiently than with other transactions.","page_number":64,"box":{"x":117,"y":643,"width":732,"height":12}},{"id":"367b636a-d214-4362-bdb0-de9edec7f8a0","block_type":"box","text":"Certain Funds may use derivatives to maintain a portion of their long and short positions. Unless","page_number":64,"box":{"x":117,"y":658,"width":719,"height":12}},{"id":"72f8ce4e-375d-4cad-abae-fc664b15ef3a","block_type":"box","text":"otherwise permitted, no Fund may use derivatives to gain exposure to an asset or asset class it is","page_number":64,"box":{"x":116,"y":674,"width":724,"height":12}},{"id":"60164d80-08ba-4b97-90c1-27c9f6a9860d","block_type":"box","text":"prohibited by its investment restrictions from purchasing directly. As described below, derivatives can","page_number":64,"box":{"x":117,"y":689,"width":748,"height":12}},{"id":"08d2527e-fe27-4bcd-acc6-8de8cd265ffd","block_type":"box","text":"be used for hedging or speculative purposes. Funds will engage in transaction-level payment netting,","page_number":64,"box":{"x":117,"y":705,"width":747,"height":12}},{"id":"b103bcdd-a05c-4b41-bf3a-2e5ba2bd6819","block_type":"box","text":"i.e.","page_number":64,"box":{"x":116,"y":721,"width":20,"height":9}},{"id":"dc39cefe-ff21-41cf-afab-ea4332579442","block_type":"box","text":", the payment obligations of derivatives contracts are netted against one another with the Fund","page_number":64,"box":{"x":140,"y":720,"width":701,"height":12}},{"id":"b253a322-8452-4465-9d3f-6eaca2e50fa6","block_type":"box","text":"receiving or paying, as the case may be, only the net amount of the two payment streams.","page_number":64,"box":{"x":117,"y":736,"width":667,"height":12}},{"id":"f212c4dd-59a9-4cbf-993b-9e7b7b995e9f","block_type":"box","text":"Hedging.","page_number":64,"box":{"x":116,"y":769,"width":65,"height":12}},{"id":"bb57eadf-09db-4f64-9dcd-675b3fad0ebc","block_type":"box","text":"Each Fund may use derivatives for hedging purposes, in which a derivative is used to offset","page_number":64,"box":{"x":189,"y":769,"width":680,"height":12}},{"id":"c1dde176-3a90-448e-b6d1-7db0862f79e5","block_type":"box","text":"the risks associated with other Fund holdings. Losses on other investments may be substantially","page_number":64,"box":{"x":116,"y":785,"width":716,"height":12}},{"id":"edcfb949-fcb4-4ad5-bf04-f0b096e50557","block_type":"box","text":"reduced by gains on a derivative that reacts in an opposite manner to market movements. Although","page_number":64,"box":{"x":117,"y":800,"width":737,"height":12}},{"id":"955d604b-d51e-4bf5-9b1b-ed9f2f260602","block_type":"box","text":"hedging may reduce losses, it may also reduce or eliminate gains. In addition, hedging may cause","page_number":64,"box":{"x":117,"y":816,"width":728,"height":12}},{"id":"aa107679-ead2-4e23-b432-0653f95dcf54","block_type":"box","text":"losses if the market moves in an unanticipated manner, or if the cost of the derivative outweighs the","page_number":64,"box":{"x":117,"y":831,"width":744,"height":12}},{"id":"294ec9f1-223b-490b-b571-396b62c58344","block_type":"box","text":"benefit of the hedge. The effectiveness of hedging may be reduced by correlation risk,","page_number":64,"box":{"x":117,"y":847,"width":643,"height":12}},{"id":"044cff01-e264-49ce-97cf-3d4151c98599","block_type":"box","text":"i.e.","page_number":64,"box":{"x":761,"y":847,"width":20,"height":9}},{"id":"8a6f0037-147b-465d-8e8b-ce2cf56e3684","block_type":"box","text":",","page_number":64,"box":{"x":784,"y":855,"width":2,"height":3}},{"id":"e19978e4-28d3-4564-bfae-8508efe3607f","block_type":"box","text":"the risk that","page_number":64,"box":{"x":793,"y":847,"width":91,"height":9}},{"id":"ed1ebcad-3c7c-4d61-932f-765c86386f33","block_type":"box","text":"changes in the value of the derivative will not match those of the holdings being hedged as expected","page_number":64,"box":{"x":116,"y":862,"width":751,"height":12}},{"id":"884a20b8-a60a-4c88-b7ae-3a38332546d3","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":64,"box":{"x":117,"y":878,"width":762,"height":12}},{"id":"a92c8908-f681-496c-afc1-b8f7aa531a6b","block_type":"box","text":"II-16","page_number":64,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1316707b-e18e-4f31-b173-4817fa9d3536","block_type":"box","text":"NM1026U-6033243-64/221","page_number":64,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"1d1f0590-eb5c-4417-9c52-86b9d12da634","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":65,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"7cbd23c5-6cbb-4d92-871e-d3e2880111bb","block_type":"box","text":"will be effective. No Fund is required to use derivatives to hedge.","page_number":65,"box":{"x":116,"y":102,"width":486,"height":13}},{"id":"ca3ca579-28d3-4ea6-b9fe-ad3c7a2589e6","block_type":"box","text":"Speculation.","page_number":65,"box":{"x":117,"y":132,"width":90,"height":12}},{"id":"a4e76cc6-b2f8-4f13-a5e2-ecb723f730d8","block_type":"box","text":"Certain Funds may also use derivatives for speculative purposes to seek to enhance","page_number":65,"box":{"x":208,"y":132,"width":638,"height":13}},{"id":"0b0f8236-5aa0-46c1-845d-8aa3d6059ea2","block_type":"box","text":"returns. The use of a derivative is speculative if the Fund is primarily seeking to achieve gains, rather","page_number":65,"box":{"x":117,"y":148,"width":753,"height":12}},{"id":"9361818b-606f-400e-9b53-5936df33544b","block_type":"box","text":"than offset the risk of other positions. To the extent a Fund invests in a derivative for speculative","page_number":65,"box":{"x":116,"y":163,"width":719,"height":12}},{"id":"b728f4e8-2b92-4de5-8557-b591ca139280","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":65,"box":{"x":117,"y":179,"width":769,"height":12}},{"id":"e02def74-3d5e-4048-820a-ff63004b15d2","block_type":"box","text":"greater than the derivative’s cost, and the potential for loss in certain cases may be unlimited.","page_number":65,"box":{"x":116,"y":194,"width":699,"height":13}},{"id":"a3c768de-847b-4b36-bf93-5e767e2d4a33","block_type":"box","text":"Regulation of Derivatives.","page_number":65,"box":{"x":116,"y":224,"width":196,"height":12}},{"id":"bb674862-2062-4fc7-95e0-d5b86523ac46","block_type":"box","text":"Rule 18f-4 Under the Investment Company Act.","page_number":65,"box":{"x":116,"y":247,"width":352,"height":12}},{"id":"b7d8c8bf-ff7d-4158-a9b7-8c22faa7e2f0","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits","page_number":65,"box":{"x":469,"y":247,"width":416,"height":12}},{"id":"9eb29167-8a48-4800-aff6-f4fa56bb5b60","block_type":"box","text":"a Fund to enter into Derivatives Transactions (as defined below) and certain other transactions","page_number":65,"box":{"x":116,"y":263,"width":708,"height":12}},{"id":"1a6e8ed6-2682-456a-980d-f1ae285336f1","block_type":"box","text":"notwithstanding the restrictions on the issuance of “senior securities” under Section 18 of the","page_number":65,"box":{"x":117,"y":278,"width":692,"height":12}},{"id":"303bcddd-8e72-4ba9-9c02-6d314c6c5ed2","block_type":"box","text":"Investment Company Act. Section 18 of the Investment Company Act, among other things, prohibits","page_number":65,"box":{"x":117,"y":294,"width":747,"height":12}},{"id":"4e3a9e6e-7b0c-4fc4-b25c-e020c77ace3f","block_type":"box","text":"open-end funds, including the Funds, from issuing or selling any “senior security,” other than borrowing","page_number":65,"box":{"x":116,"y":309,"width":769,"height":12}},{"id":"04a590ba-560f-4600-836f-95419400917e","block_type":"box","text":"from a bank (subject to a requirement to maintain 300% “asset coverage”).","page_number":65,"box":{"x":116,"y":325,"width":560,"height":12}},{"id":"86822689-01b2-40a5-87a7-7e1dfb0d9b8e","block_type":"box","text":"Under Rule 18f-4, “Derivatives Transactions” include the following: (1) any swap, security-based swap","page_number":65,"box":{"x":117,"y":354,"width":761,"height":13}},{"id":"47d5b34d-e37e-4f1f-9d53-0c220658c6ca","block_type":"box","text":"(including a contract for differences), futures contract, forward contract, option (excluding purchased","page_number":65,"box":{"x":117,"y":370,"width":747,"height":12}},{"id":"dd72bcd3-30ee-4605-92ca-9e555dd375b0","block_type":"box","text":"options), any combination of the foregoing, or any similar instrument, under which a Fund is or may be","page_number":65,"box":{"x":116,"y":385,"width":764,"height":13}},{"id":"02f9f6e5-79c9-4a20-982a-cc764eae0920","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":65,"box":{"x":117,"y":401,"width":763,"height":12}},{"id":"ff7e49ff-1daa-45aa-bfe7-411572ae31ec","block_type":"box","text":"maturity or early termination, whether as margin or settlement payment or otherwise; (2) any short sale","page_number":65,"box":{"x":117,"y":416,"width":767,"height":13}},{"id":"034fe278-7a3b-4eea-9d6b-5071d7069f4d","block_type":"box","text":"borrowing; (3) reverse repurchase agreements and similar financing transactions (e.g., recourse and","page_number":65,"box":{"x":117,"y":432,"width":750,"height":12}},{"id":"ce33588f-a403-4083-b3b9-a0b64cfdcf79","block_type":"box","text":"non-recourse tender option bonds, and borrowed bonds), if a Fund elects to treat all of these","page_number":65,"box":{"x":117,"y":447,"width":691,"height":13}},{"id":"091ea989-1482-47f8-8ed9-a6a24a547a2f","block_type":"box","text":"transactions as Derivatives Transactions under Rule 18f-4; and (4) when-issued or forward-settling","page_number":65,"box":{"x":116,"y":463,"width":738,"height":12}},{"id":"2af8c5b1-5f47-4b7e-8e70-5ae25336d431","block_type":"box","text":"securities (e.g., firm and standby commitments, including to-be-announced (“TBA”) commitments, and","page_number":65,"box":{"x":116,"y":478,"width":763,"height":13}},{"id":"f61c7064-c5be-4190-b8dd-8947eceaf3dc","block_type":"box","text":"dollar rolls) and non-standard settlement cycle securities, unless such transactions meet the Delayed","page_number":65,"box":{"x":116,"y":494,"width":755,"height":12}},{"id":"03be9e65-bffc-45f7-b908-d6cabfac31c4","block_type":"box","text":"Settlement Securities Provision (as defined below under “— When-Issued Securities, Delayed Delivery","page_number":65,"box":{"x":116,"y":509,"width":768,"height":13}},{"id":"c44fe41e-57ab-4325-b276-c599bdc26992","block_type":"box","text":"Securities and Forward Commitments”).","page_number":65,"box":{"x":116,"y":525,"width":302,"height":12}},{"id":"83bbef8f-8547-48e0-82bf-f2ad58ef472d","block_type":"box","text":"Unless a Fund is relying on the Limited Derivatives User Exception (as defined below), the Fund must","page_number":65,"box":{"x":117,"y":555,"width":759,"height":12}},{"id":"71de4fa2-86a1-437f-b09a-6f893695569e","block_type":"box","text":"comply with Rule 18f-4 with respect to its Derivatives Transactions. Rule 18f-4, among other things,","page_number":65,"box":{"x":116,"y":570,"width":744,"height":12}},{"id":"393fdb96-37b5-410d-8c0d-ff8bb54fee7d","block_type":"box","text":"requires a Fund to adopt and implement a comprehensive written derivatives risk management","page_number":65,"box":{"x":117,"y":586,"width":708,"height":12}},{"id":"34775c3e-67c7-46f3-a893-4c00609ba76f","block_type":"box","text":"program (“DRMP”) and comply with a relative or absolute limit on Fund leverage risk calculated based","page_number":65,"box":{"x":117,"y":601,"width":761,"height":13}},{"id":"5e742fb8-fca3-42e9-ab11-a72928ab98c5","block_type":"box","text":"on value-at-risk (“VaR”). The DRMP is administered by a “derivatives risk manager,” who is appointed","page_number":65,"box":{"x":116,"y":617,"width":760,"height":12}},{"id":"2d05248c-cf15-4a06-973e-f9dea182d2c2","block_type":"box","text":"by the Fund’s Board, including a majority of the independent Directors, and periodically reviews the","page_number":65,"box":{"x":117,"y":632,"width":739,"height":13}},{"id":"0e48259d-3c83-4cb9-a7b1-22803e71b734","block_type":"box","text":"DRMP and reports to the Fund’s Board.","page_number":65,"box":{"x":117,"y":648,"width":299,"height":12}},{"id":"fca6196c-ff37-4649-9d5e-e57280d7fde5","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":65,"box":{"x":117,"y":678,"width":758,"height":12}},{"id":"c199fed8-55e4-4854-9a93-f7af3bb75456","block_type":"box","text":"“derivatives exposure” is limited to 10% of its net assets (as calculated in accordance with Rule 18f-4)","page_number":65,"box":{"x":116,"y":693,"width":754,"height":12}},{"id":"f4508513-1de4-4275-87a0-53026db9adf7","block_type":"box","text":"and the Fund adopts and implements written policies and procedures reasonably designed to manage","page_number":65,"box":{"x":116,"y":709,"width":758,"height":12}},{"id":"233add7b-64ec-4b4f-a88f-33ed423d4ea4","block_type":"box","text":"its derivatives risks (the “Limited Derivatives User Exception”).","page_number":65,"box":{"x":117,"y":724,"width":459,"height":12}},{"id":"535a66af-e383-42fa-bdfc-ca7c3cfa7857","block_type":"box","text":"Dodd-Frank Regulations.","page_number":65,"box":{"x":116,"y":754,"width":185,"height":12}},{"id":"7f7c66c4-fdd2-45a1-bd9a-a830c11dd3b5","block_type":"box","text":"The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd","page_number":65,"box":{"x":308,"y":754,"width":555,"height":12}},{"id":"2359ee8e-124e-4df9-a04b-513f28f93688","block_type":"box","text":"Frank”), enacted in July 2010, includes provisions that comprehensively regulate the over-the-counter","page_number":65,"box":{"x":117,"y":770,"width":754,"height":12}},{"id":"1f146b0e-e06e-4d45-b5dc-356b03c06150","block_type":"box","text":"(“OTC”) derivatives markets for the first time. While the Commodity Futures Trading Commission","page_number":65,"box":{"x":117,"y":785,"width":716,"height":12}},{"id":"3e17f7d6-d2bc-480d-8eeb-2694aab51bc2","block_type":"box","text":"(“CFTC”) and other U.S. regulators have adopted many of the required Dodd-Frank regulations, certain","page_number":65,"box":{"x":117,"y":801,"width":764,"height":12}},{"id":"3b68a474-72ca-4269-9892-078c9c9a930c","block_type":"box","text":"regulations have only recently become effective and other regulations remain to be adopted. The full","page_number":65,"box":{"x":117,"y":816,"width":743,"height":12}},{"id":"5dc287bb-1795-49b0-8703-a466c6fe4383","block_type":"box","text":"impact of Dodd-Frank on the Funds remains uncertain.","page_number":65,"box":{"x":117,"y":832,"width":411,"height":12}},{"id":"1821ff19-ab52-42fb-a582-bd5ec66d09b4","block_type":"box","text":"Many OTC derivatives dealers are required to register with the CFTC as “swap dealers” and/or with the","page_number":65,"box":{"x":117,"y":862,"width":770,"height":12}},{"id":"c82881ee-7707-4a87-a200-85d216832ea7","block_type":"box","text":"SEC as “security-based swap dealers”. Registered swap dealers and security-based swap dealers are","page_number":65,"box":{"x":116,"y":877,"width":765,"height":12}},{"id":"2b25eeda-20d0-4f77-bb06-6bc0fb1726f2","block_type":"box","text":"II-17","page_number":65,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"081a6f20-b9e6-4ef8-9a23-4992a19cafe9","block_type":"box","text":"NM1026U-6033243-65/221","page_number":65,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"84d8fa59-b3b6-42b8-9b12-965d2201ffbc","block_type":"box","text":"subject to various regulatory requirements, including, but not limited to, margin, recordkeeping,","page_number":66,"box":{"x":116,"y":87,"width":708,"height":12}},{"id":"c272d863-49ef-4cc6-a693-00935b36f693","block_type":"box","text":"reporting, transparency, position limits, limitations on conflicts of interest, business conduct standards,","page_number":66,"box":{"x":117,"y":102,"width":761,"height":13}},{"id":"769eae51-3385-4843-aff5-74f3182f3456","block_type":"box","text":"minimum capital requirements and other regulatory requirements, which indirectly impact the Funds","page_number":66,"box":{"x":117,"y":118,"width":743,"height":12}},{"id":"d9df4b46-08a5-4022-9d38-49aae67638bb","block_type":"box","text":"that enter into transactions with them.","page_number":66,"box":{"x":116,"y":134,"width":284,"height":9}},{"id":"d2a41af2-2522-4168-bf18-fc2c3a119db8","block_type":"box","text":"The CFTC requires that certain interest rate swaps and certain credit default swaps must be executed","page_number":66,"box":{"x":116,"y":165,"width":761,"height":11}},{"id":"e40d44ea-6d4c-4092-8e31-15d15806fb36","block_type":"box","text":"in regulated markets and be submitted for clearing to regulated clearinghouses. The SEC is also","page_number":66,"box":{"x":117,"y":180,"width":719,"height":12}},{"id":"5b644001-79a5-4728-ba9a-9d306751e709","block_type":"box","text":"expected to impose similar requirements on certain security-based derivatives in the future. OTC","page_number":66,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"1ec9c3ba-c422-4e60-abdd-088ae76952f3","block_type":"box","text":"derivatives trades submitted for clearing are subject to minimum initial and variation margin","page_number":66,"box":{"x":116,"y":211,"width":681,"height":12}},{"id":"956a9bd6-a43d-4230-87b5-c632e1907875","block_type":"box","text":"requirements set by the relevant clearinghouse, as well as margin requirements mandated by the","page_number":66,"box":{"x":117,"y":227,"width":726,"height":12}},{"id":"4d1e718d-a9b9-4e8f-a666-ca0a63aee7f1","block_type":"box","text":"CFTC, SEC and/or federal prudential regulators. In addition, futures commission merchants (“FCMs”),","page_number":66,"box":{"x":117,"y":242,"width":760,"height":12}},{"id":"4f8482a4-2f93-4d58-aa4f-5da50c9a3b6d","block_type":"box","text":"who act as clearing members on behalf of customers for cleared OTC derivatives and futures","page_number":66,"box":{"x":116,"y":258,"width":697,"height":12}},{"id":"18599b5e-e239-4311-81b4-7b44d8b8dd47","block_type":"box","text":"contracts, also have discretion to increase a Fund’s margin requirements for these transactions beyond","page_number":66,"box":{"x":116,"y":273,"width":772,"height":12}},{"id":"753ded67-1559-4c03-a419-91bff983a67f","block_type":"box","text":"any regulatory and clearinghouse minimums subject to any restrictions on such discretion in the","page_number":66,"box":{"x":116,"y":289,"width":715,"height":12}},{"id":"96e72491-18c0-4aad-92fc-94ddcaf8af6a","block_type":"box","text":"documentation between the FCM and the customer. These regulatory requirements may make it more","page_number":66,"box":{"x":116,"y":304,"width":764,"height":12}},{"id":"f37ffbdb-ae70-4ce3-84c7-66673c7a870a","block_type":"box","text":"difficult and costly for the Funds to enter into highly tailored or customized transactions, potentially","page_number":66,"box":{"x":116,"y":320,"width":733,"height":12}},{"id":"c0e8d4ea-d37f-4caa-9151-76755557a6a5","block_type":"box","text":"rendering certain investment strategies impossible or not economically feasible. If a Fund decides to","page_number":66,"box":{"x":117,"y":335,"width":747,"height":12}},{"id":"d0dc8603-a80e-4794-bcf3-4c1d450a888c","block_type":"box","text":"execute and clear cleared OTC derivatives and/or futures contracts through execution facilities,","page_number":66,"box":{"x":116,"y":351,"width":712,"height":12}},{"id":"2b40195b-5ecd-41a6-8e62-d94e1f395a8d","block_type":"box","text":"exchanges or clearinghouses, either indirectly through an executing broker, clearing member FCM or","page_number":66,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"da469b38-8efa-4b28-a185-21f80d4692e4","block_type":"box","text":"as a direct member, a Fund would be required to comply with the rules of the execution facility,","page_number":66,"box":{"x":116,"y":382,"width":709,"height":12}},{"id":"ee194cd9-ed02-418a-8c55-dcbed07cf5d8","block_type":"box","text":"exchange or clearinghouse and other applicable law.","page_number":66,"box":{"x":116,"y":397,"width":397,"height":12}},{"id":"32abb41f-2d21-4a17-b470-c65ab30c70f6","block_type":"box","text":"With respect to cleared OTC derivatives and futures contracts and options on futures, a Fund will not","page_number":66,"box":{"x":116,"y":428,"width":753,"height":12}},{"id":"886be521-4fe7-4c37-bc6c-b127e7e21258","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":66,"box":{"x":116,"y":444,"width":759,"height":12}},{"id":"ba127757-8421-410a-b12d-6825a8a22abc","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":66,"box":{"x":116,"y":459,"width":759,"height":12}},{"id":"79291b4a-84a9-499c-96c7-f2f43f5c51f9","block_type":"box","text":"clearing member customer to meet its obligations to its clearing member. Such scenario could arise","page_number":66,"box":{"x":116,"y":475,"width":744,"height":12}},{"id":"104e95dc-fa5a-4b7a-9e13-84e83187a262","block_type":"box","text":"due to a default by the clearing member on its obligations to the clearinghouse simultaneously with a","page_number":66,"box":{"x":116,"y":490,"width":752,"height":12}},{"id":"811e293f-a5c4-4b6b-a890-2f2a5dcb2be5","block_type":"box","text":"customer’s failure to meet its obligations to the clearing member.","page_number":66,"box":{"x":116,"y":506,"width":485,"height":12}},{"id":"b0ec483f-d375-4be1-b534-fa7074d8b6e1","block_type":"box","text":"Clearing member FCMs are required to post initial margin to the clearinghouses through which they","page_number":66,"box":{"x":117,"y":537,"width":742,"height":12}},{"id":"091e1460-6b14-45db-9788-5b15542d920e","block_type":"box","text":"clear their customers’ cleared OTC derivatives and futures contracts, instead of using such initial","page_number":66,"box":{"x":116,"y":552,"width":722,"height":12}},{"id":"9e2b38a3-20ae-4bd3-bf1f-10de23f71bf3","block_type":"box","text":"margin in their businesses, as was widely permitted for OTC derivatives before Dodd-Frank. While an","page_number":66,"box":{"x":117,"y":568,"width":757,"height":12}},{"id":"e6361f99-35e8-4518-8bda-2c5495c5eabe","block_type":"box","text":"FCM may require its customer to post initial margin in excess of clearinghouse requirements, and","page_number":66,"box":{"x":117,"y":583,"width":727,"height":12}},{"id":"c8830396-aa0e-409a-afec-dd05a0b3f820","block_type":"box","text":"certain clearinghouses may share a portion of their earnings on initial margin with their clearing","page_number":66,"box":{"x":116,"y":599,"width":710,"height":12}},{"id":"73a894cf-0084-41b0-9521-e97beb581aa3","block_type":"box","text":"members, some portion of the initial margin that is passed through to the clearinghouse does not","page_number":66,"box":{"x":117,"y":614,"width":722,"height":12}},{"id":"c421f031-3568-4165-976a-2b9b377d3ee2","block_type":"box","text":"generate earnings for the FCM. The inability of FCMs to earn the same levels of returns on initial","page_number":66,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"76ce5e58-38a0-44c5-a672-9cf8fad10ce3","block_type":"box","text":"margin for cleared OTC derivatives as they could earn with respect to non-cleared OTC derivatives","page_number":66,"box":{"x":117,"y":645,"width":739,"height":12}},{"id":"04853e5d-356a-4cc2-8cdc-d51d2b42f34c","block_type":"box","text":"may cause FCMs to charge higher fees, or provide less favorable pricing on cleared OTC derivatives","page_number":66,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"4c005f5f-72f3-4363-bee7-de0ca026cc44","block_type":"box","text":"than swap dealers will provide for non-cleared OTC derivatives. Furthermore, customers, including the","page_number":66,"box":{"x":116,"y":676,"width":760,"height":12}},{"id":"6770204d-d27d-4c3c-8f7d-271e96d006f5","block_type":"box","text":"Funds, are subject to additional fees payable to FCMs with respect to cleared OTC derivatives, which","page_number":66,"box":{"x":117,"y":692,"width":751,"height":12}},{"id":"2b0e0354-33f9-45f9-8575-6f8f0dc7cc5d","block_type":"box","text":"may raise the cost to Funds of clearing as compared to trading non-cleared OTC derivatives bilaterally.","page_number":66,"box":{"x":117,"y":707,"width":763,"height":12}},{"id":"85f890d1-cb97-4f67-94fa-b992ab1aee5d","block_type":"box","text":"With respect to uncleared swaps, registered swap dealers and security-based swap dealers are","page_number":66,"box":{"x":116,"y":738,"width":710,"height":12}},{"id":"bf7a3f97-5ff9-4f8a-8c83-f10a4587a329","block_type":"box","text":"required to exchange variation margin with a Fund and may be required by applicable regulations to","page_number":66,"box":{"x":117,"y":754,"width":740,"height":12}},{"id":"24f76aec-170a-46d4-b092-5c3854780b93","block_type":"box","text":"collect (and in some cases exchange) initial margin with a Fund. Both initial and variation margin may","page_number":66,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"8a7a3a11-8fe5-4e9d-a12b-e1c5b8f8751e","block_type":"box","text":"be comprised of cash and/or securities, subject to applicable regulatory haircuts and other restrictions.","page_number":66,"box":{"x":117,"y":785,"width":757,"height":12}},{"id":"0febbf6b-15e1-492a-8f3e-15b982bcd87f","block_type":"box","text":"Shares of investment companies (other than certain money market funds) may not be posted as","page_number":66,"box":{"x":116,"y":800,"width":713,"height":12}},{"id":"f84ff5d5-8ca9-45b7-b12b-a3e81ba3d08b","block_type":"box","text":"collateral under applicable regulations.","page_number":66,"box":{"x":116,"y":816,"width":285,"height":12}},{"id":"df3b52a6-973b-4072-8dc6-5c311578b5d2","block_type":"box","text":"The CFTC, certain foreign regulators, and many futures exchanges have established (and continue to","page_number":66,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"5a67f3d1-6141-4b2a-9cf3-9b084e1ce884","block_type":"box","text":"evaluate and monitor) speculative position limits (“position limits”) on the maximum speculative position","page_number":66,"box":{"x":116,"y":862,"width":771,"height":12}},{"id":"02967a09-1cd2-4047-a8bd-2b9d0fe79a29","block_type":"box","text":"which any person, or group of persons acting in concert, may hold or control in particular contracts. In","page_number":66,"box":{"x":116,"y":878,"width":759,"height":12}},{"id":"c3485cd6-2feb-48b0-87d7-4d36a8ac18fa","block_type":"box","text":"II-18","page_number":66,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f7e1c53e-0ea4-4551-a388-0e9acc263ac3","block_type":"box","text":"NM1026U-6033243-66/221","page_number":66,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d22f50ff-81c3-4c6f-94c8-5d8bcd17dcfa","block_type":"box","text":"addition, U.S. federal position limits apply to swaps that are economically equivalent to futures","page_number":67,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"f70ddaa7-ee70-4056-b91d-2e3e005855cb","block_type":"box","text":"contracts on certain agricultural, metals and energy commodities. All positions owned or controlled by","page_number":67,"box":{"x":116,"y":103,"width":758,"height":12}},{"id":"59e6d258-70c5-478b-8198-8320a6a314a9","block_type":"box","text":"the same person or entity, even if in different accounts, must be aggregated for purposes of complying","page_number":67,"box":{"x":116,"y":118,"width":766,"height":12}},{"id":"d7445c09-d060-49be-9678-99638496074e","block_type":"box","text":"with the speculative limits. Thus, even if a Fund does not intend to exceed applicable position limits, it","page_number":67,"box":{"x":116,"y":134,"width":758,"height":11}},{"id":"e5c1f2f5-98fb-4687-9fdd-2ba0631b34f8","block_type":"box","text":"is possible that different clients managed by the Manager and its affiliates may be aggregated for this","page_number":67,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"c437bfbc-5f66-45b8-8968-fca294b6a634","block_type":"box","text":"purpose. Therefore, the trading decisions of the Manager may have to be modified and positions held","page_number":67,"box":{"x":117,"y":165,"width":757,"height":12}},{"id":"a0f2ac9b-83ed-4bd5-97d1-d95bde8c734f","block_type":"box","text":"by a Fund liquidated in order to avoid exceeding such limits. The modification of investment decisions","page_number":67,"box":{"x":117,"y":180,"width":757,"height":12}},{"id":"32f8e585-bfa6-4f76-bd00-580c5d4f5237","block_type":"box","text":"or the elimination of open positions, if it occurs, may adversely affect the profitability of a Fund. A","page_number":67,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"3bb9b252-f4ed-4fee-b1db-fbdc335491e1","block_type":"box","text":"violation of position limits could also lead to regulatory action materially adverse to a Fund’s investment","page_number":67,"box":{"x":116,"y":211,"width":770,"height":12}},{"id":"165a4ed9-4e86-4f56-9fb7-1753a6a586cf","block_type":"box","text":"strategy. A Fund may also be affected by other regimes, including those of the European Union and","page_number":67,"box":{"x":116,"y":227,"width":746,"height":12}},{"id":"5420b11f-9cda-43dc-a163-fad99808d5df","block_type":"box","text":"United Kingdom, and trading venues that impose position limits on commodity derivative contracts.","page_number":67,"box":{"x":117,"y":242,"width":737,"height":12}},{"id":"3c1f78d4-373f-45e8-bda8-e15abbe134ea","block_type":"box","text":"Additional Regulation of Derivatives.","page_number":67,"box":{"x":115,"y":275,"width":269,"height":12}},{"id":"0dbdba3b-1996-4a28-bc29-4e4dbcafe6f0","block_type":"box","text":"Regulatory bodies outside the U.S. have also passed, proposed,","page_number":67,"box":{"x":386,"y":275,"width":489,"height":12}},{"id":"f9f50e67-9457-406d-91c0-e8240d1a75c9","block_type":"box","text":"or may propose in the future, legislation similar to Dodd-Frank or other legislation that could increase","page_number":67,"box":{"x":116,"y":290,"width":753,"height":12}},{"id":"e94c69d6-9394-4c96-8c9b-130d2eca53f7","block_type":"box","text":"the costs of participating in, or otherwise adversely impact the liquidity of, participating in the","page_number":67,"box":{"x":116,"y":306,"width":689,"height":12}},{"id":"296e4d0f-d86a-492e-b4cb-3c765a13cb15","block_type":"box","text":"commodities markets. For example, the European Market Infrastructure Regulation (Regulation (EU)","page_number":67,"box":{"x":116,"y":321,"width":752,"height":12}},{"id":"ac626f6b-696f-4a18-90d3-cb48d73baa29","block_type":"box","text":"No 648/2012) (“EMIR”) introduced certain requirements in respect of OTC derivatives including: (i) the","page_number":67,"box":{"x":117,"y":337,"width":761,"height":12}},{"id":"b397597c-ffb8-4410-8bf2-37b89093c55b","block_type":"box","text":"mandatory clearing of OTC derivative contracts declared subject to the clearing obligation; (ii) risk","page_number":67,"box":{"x":117,"y":352,"width":728,"height":12}},{"id":"87a3d481-1dee-4ae8-9b0a-3b9768a76fa7","block_type":"box","text":"mitigation techniques in respect of uncleared OTC derivative contracts, including the mandatory","page_number":67,"box":{"x":117,"y":368,"width":714,"height":12}},{"id":"28f84168-d9d2-4911-8b0a-6e468902e509","block_type":"box","text":"margining of uncleared OTC derivative contracts; and (iii) reporting and recordkeeping requirements in","page_number":67,"box":{"x":117,"y":383,"width":765,"height":12}},{"id":"82ead503-e548-49d0-af33-b6400fbf78a0","block_type":"box","text":"respect of all derivatives contracts. By way of further example, the European Union Markets in","page_number":67,"box":{"x":117,"y":399,"width":703,"height":12}},{"id":"4e9bfa4f-5d06-45a8-8554-9a04db487380","block_type":"box","text":"Financial Instruments Directive (Directive 2014/65/EU) and Markets in Financial Instruments","page_number":67,"box":{"x":117,"y":414,"width":688,"height":12}},{"id":"2ff1da55-26de-4c82-b55c-0be4459b6973","block_type":"box","text":"Regulation (Regulation (EU) No 600/2014) (together “MiFID II”), which have applied since January 3,","page_number":67,"box":{"x":117,"y":430,"width":753,"height":12}},{"id":"d2908189-2a6f-4a7e-8e75-033f4ba741a5","block_type":"box","text":"2018, govern the provision of investment services and activities in relation to, as well as the organized","page_number":67,"box":{"x":116,"y":445,"width":762,"height":12}},{"id":"faba4f15-5230-475f-b3f2-c61daa34c621","block_type":"box","text":"trading of, financial instruments such as shares, bonds, units in collective investment schemes and","page_number":67,"box":{"x":116,"y":461,"width":738,"height":12}},{"id":"16154838-8f52-4b38-bcaf-8b73810c44ce","block_type":"box","text":"derivatives. In particular, MiFID II requires European Union Member States to apply position limits to","page_number":67,"box":{"x":116,"y":476,"width":749,"height":12}},{"id":"416a39b4-09ea-4c81-90ec-921aa1781318","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":67,"box":{"x":116,"y":492,"width":754,"height":12}},{"id":"3d40fcae-b530-428d-818e-a336f0f8497a","block_type":"box","text":"Union trading venues and in “economically equivalent” OTC contracts. If the requirements of EMIR and","page_number":67,"box":{"x":117,"y":507,"width":769,"height":12}},{"id":"6f9b6b49-4a0b-432f-8910-c1aa895a13dc","block_type":"box","text":"MiFID II apply, the cost of derivatives transactions is expected to increase.","page_number":67,"box":{"x":117,"y":523,"width":550,"height":12}},{"id":"a56aa90f-94a3-4afc-a7da-752eff65993f","block_type":"box","text":"In addition, regulations adopted by global prudential regulators that are now in effect require certain","page_number":67,"box":{"x":117,"y":555,"width":742,"height":13}},{"id":"6ad1624c-169b-44a8-8b95-868f60727343","block_type":"box","text":"prudentially regulated entities and certain of their affiliates and subsidiaries (including swap dealers) to","page_number":67,"box":{"x":117,"y":571,"width":764,"height":12}},{"id":"803e4337-f9e5-4c4b-9f02-3e26d6ebeea7","block_type":"box","text":"include in their derivatives contracts and certain other financial contracts, terms that delay or restrict","page_number":67,"box":{"x":117,"y":586,"width":745,"height":13}},{"id":"f6b76244-1bb9-4bae-add9-c94352c3cf51","block_type":"box","text":"the rights of counterparties (such as the Funds) to terminate such contracts, foreclose upon collateral,","page_number":67,"box":{"x":116,"y":602,"width":761,"height":12}},{"id":"e18dd0cf-659b-4dc2-882b-851e3e770d95","block_type":"box","text":"exercise other default rights or restrict transfers of credit support in the event that the prudentially","page_number":67,"box":{"x":116,"y":617,"width":725,"height":13}},{"id":"6ed62887-ce04-45dc-a784-e369b8ef8b3f","block_type":"box","text":"regulated entity and/or its affiliates are subject to certain types of resolution or insolvency proceedings.","page_number":67,"box":{"x":117,"y":633,"width":765,"height":12}},{"id":"290d7631-27c5-42cb-aa93-c3a16864c992","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":67,"box":{"x":116,"y":648,"width":746,"height":13}},{"id":"43e6c27f-c850-49a2-afc8-0eb525d985f4","block_type":"box","text":"counterparties located in those jurisdictions. In particular, in the United Kingdom and the European","page_number":67,"box":{"x":116,"y":664,"width":731,"height":12}},{"id":"a5ba62e9-c92d-4ff9-abd3-0a07bd8e9c9e","block_type":"box","text":"Union, governmental authorities could reduce, eliminate or convert to equity the liabilities to a Fund of","page_number":67,"box":{"x":117,"y":680,"width":753,"height":12}},{"id":"7aca710f-4b9c-48d9-ae86-fb1351ad0044","block_type":"box","text":"a counterparty experiencing financial difficulties (sometimes referred to as a “bail in”). It is possible that","page_number":67,"box":{"x":116,"y":695,"width":763,"height":12}},{"id":"56b7a0e2-ed94-4988-ab0e-0f1aeca2c97f","block_type":"box","text":"these requirements, as well as potential additional related government regulation, could adversely","page_number":67,"box":{"x":116,"y":711,"width":726,"height":12}},{"id":"1107a08d-e9ff-4bbf-97de-b6973c75e7b4","block_type":"box","text":"affect a Fund’s ability to terminate existing derivatives contracts, exercise default rights or satisfy","page_number":67,"box":{"x":116,"y":726,"width":716,"height":12}},{"id":"6b3686bf-db11-4ecd-a489-6803dfa3e459","block_type":"box","text":"obligations owed to it with collateral received under such contracts.","page_number":67,"box":{"x":116,"y":742,"width":496,"height":12}},{"id":"9f263631-5bee-4a09-bc2b-1da3e6b3df61","block_type":"box","text":"Risk Factors in Derivatives.","page_number":67,"box":{"x":116,"y":774,"width":202,"height":10}},{"id":"54273602-244e-4164-9760-3c8589a49a84","block_type":"box","text":"There are significant risks that apply generally to derivatives transactions, including:","page_number":67,"box":{"x":116,"y":798,"width":620,"height":12}},{"id":"4c635895-3002-42f9-9e55-37442bff77c5","block_type":"box","text":"Correlation Risk —","page_number":67,"box":{"x":117,"y":831,"width":123,"height":10}},{"id":"5d4df82e-54e0-4bba-a9f8-cc6add55e59b","block_type":"box","text":"— the risk that changes in the value of a derivative will not match the changes in the","page_number":67,"box":{"x":240,"y":831,"width":631,"height":12}},{"id":"7dd2f005-1b42-4d40-8703-88f2a7f477c6","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":67,"box":{"x":116,"y":846,"width":765,"height":13}},{"id":"7e63326f-f9db-411d-8dba-5b30ca3f8959","block_type":"box","text":"Fund seeks exposure. There are a number of factors which may prevent a derivative instrument from","page_number":67,"box":{"x":117,"y":862,"width":754,"height":12}},{"id":"cc3e2ee9-55ed-42ce-9cbd-81f90e86367f","block_type":"box","text":"achieving the desired correlation (or inverse correlation) with an underlying asset, rate or index, such","page_number":67,"box":{"x":116,"y":877,"width":753,"height":13}},{"id":"6a3a3e84-3d2b-4a2e-81a1-4685cf6a89f5","block_type":"box","text":"II-19","page_number":67,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6e499392-1d93-472f-8d73-bb3f505a14ac","block_type":"box","text":"NM1026U-6033243-67/221","page_number":67,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"07911f00-da78-44ed-a625-0c04e65fe567","block_type":"box","text":"as the impact of fees, expenses and transaction costs, the timing of pricing, and disruptions or illiquidity","page_number":68,"box":{"x":116,"y":87,"width":772,"height":12}},{"id":"290fbf52-a1dc-4511-8dd7-3e000bf760f6","block_type":"box","text":"in the markets for such derivative instrument.","page_number":68,"box":{"x":117,"y":102,"width":338,"height":10}},{"id":"95f2bd1e-88ba-4458-a75e-1d028f1265ac","block_type":"box","text":"Counterparty Risk —","page_number":68,"box":{"x":117,"y":134,"width":138,"height":12}},{"id":"26c9d4df-ebe6-4179-9318-df1807a1f4b8","block_type":"box","text":"—","page_number":68,"box":{"x":255,"y":139,"width":22,"height":4}},{"id":"4cd54d2f-deff-4ed1-afe7-6b6389af4a21","block_type":"box","text":"the risk that a derivatives transaction counterparty will be unable or unwilling to","page_number":68,"box":{"x":277,"y":134,"width":590,"height":12}},{"id":"70b5432e-8023-4653-81dd-0df69bab60d2","block_type":"box","text":"make payments or otherwise honor its obligations to a Fund and the related risks of having","page_number":68,"box":{"x":117,"y":149,"width":678,"height":12}},{"id":"1f17a360-4b7f-4b71-b75e-e67ce6e98d6d","block_type":"box","text":"concentrated exposure to such a counterparty. In particular, derivatives traded in OTC markets often","page_number":68,"box":{"x":116,"y":165,"width":751,"height":12}},{"id":"e24ae639-66aa-4ddb-8aa1-9bba43a650a9","block_type":"box","text":"are not guaranteed by an exchange or clearing corporation and often do not require payment of","page_number":68,"box":{"x":116,"y":180,"width":714,"height":12}},{"id":"83a4528b-a3d2-438e-bbc2-db62c6980f4d","block_type":"box","text":"margin, and to the extent that the Fund has unrealized gains in such instruments or has deposited","page_number":68,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"35e8aca0-19ad-4e3e-aae4-f4d05524acc2","block_type":"box","text":"collateral with its counterparties the Fund is at risk that its counterparties will become bankrupt or","page_number":68,"box":{"x":116,"y":211,"width":725,"height":12}},{"id":"8ec0efd0-2cf2-4f48-bc3e-0687d307d3ef","block_type":"box","text":"otherwise fail to honor their obligations. A Fund will typically attempt to minimize counterparty risk by","page_number":68,"box":{"x":116,"y":227,"width":750,"height":12}},{"id":"7257f9d6-c625-42d0-ab83-0484be6b31f9","block_type":"box","text":"engaging in OTC derivatives transactions only with creditworthy entities that have substantial capital or","page_number":68,"box":{"x":116,"y":242,"width":768,"height":12}},{"id":"56271482-5ddc-4814-aa34-71705d528c2f","block_type":"box","text":"that have provided the Fund with a third-party guaranty or other credit support. When a Fund enters","page_number":68,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"52a1ab72-cde2-433c-b45c-b46433b5cc5b","block_type":"box","text":"into a derivatives transaction that is centrally cleared (whether mandatorily or voluntarily), the Fund is","page_number":68,"box":{"x":117,"y":273,"width":754,"height":12}},{"id":"ce37b16d-8583-4a68-a9eb-6f052a3ea390","block_type":"box","text":"subject to the credit risk of the clearing house and the clearing member through which it holds its","page_number":68,"box":{"x":116,"y":289,"width":722,"height":12}},{"id":"02fbcfb8-751a-4517-98b2-cba364144d3a","block_type":"box","text":"cleared position. Credit risk of market participants with respect to derivatives that are centrally cleared","page_number":68,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"3483c428-efdd-4350-89c4-40a5d58e461d","block_type":"box","text":"is concentrated in a few clearing houses and increasingly fewer clearing members. It is not clear how","page_number":68,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"795db282-227d-4378-aaa7-5f1cded18078","block_type":"box","text":"an insolvency proceeding of a clearing house would be conducted and what impact an insolvency of a","page_number":68,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"86876432-7137-41ef-80d9-954fed7aa365","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":68,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"a65a7425-b9cf-4e06-aa60-830e1694a02f","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":68,"box":{"x":116,"y":366,"width":768,"height":12}},{"id":"15f4242e-8334-49f2-a4aa-7b5dab5ed0c4","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":68,"box":{"x":117,"y":382,"width":747,"height":12}},{"id":"7349236e-8e14-4afa-aed5-43d6eae3d9e3","block_type":"box","text":"cleared derivatives. Although a clearing member is required to segregate assets from customers with","page_number":68,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"613c7b03-a783-419b-9871-6ffe68a86889","block_type":"box","text":"respect to cleared derivatives positions from the clearing member’s proprietary assets, if a clearing","page_number":68,"box":{"x":117,"y":413,"width":736,"height":12}},{"id":"63a12cff-63b7-48f1-a174-8e64b6f15508","block_type":"box","text":"member does not comply with the applicable regulations, or in the event of fraud or misappropriation of","page_number":68,"box":{"x":117,"y":428,"width":768,"height":12}},{"id":"0f8cd3ca-b75c-4ade-a2eb-9488327bb44d","block_type":"box","text":"customer assets by a clearing member, a Fund could have only an unsecured creditor claim in an","page_number":68,"box":{"x":116,"y":444,"width":730,"height":12}},{"id":"e06246c1-83f0-4401-a9cb-f3f8420a4755","block_type":"box","text":"insolvency of the clearing member with respect to the assets held by the clearing member.","page_number":68,"box":{"x":117,"y":459,"width":675,"height":12}},{"id":"2e340a46-6e6c-4c1d-b16b-acf3c3ca0aad","block_type":"box","text":"Credit Risk —","page_number":68,"box":{"x":117,"y":490,"width":86,"height":10}},{"id":"299611b5-e88f-4ce9-b293-af194d4d6bbb","block_type":"box","text":"— the risk that the reference entity in a credit default swap or similar derivative will not be","page_number":68,"box":{"x":203,"y":490,"width":668,"height":12}},{"id":"a6c08773-9445-4427-885a-54248b915d30","block_type":"box","text":"able to honor its financial obligations.","page_number":68,"box":{"x":116,"y":506,"width":280,"height":12}},{"id":"4afbe7da-1f5b-48c6-99b1-ac98601ab157","block_type":"box","text":"Currency Risk —","page_number":68,"box":{"x":117,"y":537,"width":109,"height":12}},{"id":"474977c4-00b1-4d44-85ac-7c1cc791939e","block_type":"box","text":"— the risk that changes in the exchange rate between two currencies will adversely","page_number":68,"box":{"x":226,"y":537,"width":625,"height":12}},{"id":"bd883a91-3262-4da2-8b87-e805545f7d5a","block_type":"box","text":"affect the value (in U.S. dollar terms) of a derivative.","page_number":68,"box":{"x":116,"y":552,"width":392,"height":12}},{"id":"e2d373c4-8b9d-483c-8f6f-8a8a3ad33173","block_type":"box","text":"Illiquidity Risk —","page_number":68,"box":{"x":117,"y":583,"width":105,"height":12}},{"id":"8838aa5d-e09a-4a1b-96fa-57bf748a1fc2","block_type":"box","text":"— the risk that certain securities or instruments may be difficult or impossible to sell at","page_number":68,"box":{"x":222,"y":583,"width":644,"height":12}},{"id":"11422fd9-6364-46b6-829c-f5359645f4e8","block_type":"box","text":"the time or at the price desired by a Fund in connection with payments of margin, collateral, or","page_number":68,"box":{"x":116,"y":599,"width":704,"height":12}},{"id":"be096f9a-118c-4e7a-8a5f-43809e246b05","block_type":"box","text":"settlement payments. There can be no assurance that a Fund will be able to unwind or offset a","page_number":68,"box":{"x":116,"y":614,"width":708,"height":12}},{"id":"5c7fde88-8036-4ecc-a6af-5385dea9cab5","block_type":"box","text":"derivative at its desired price, in a secondary market or otherwise. It may, therefore, not be possible for","page_number":68,"box":{"x":116,"y":630,"width":768,"height":12}},{"id":"007c2532-124a-4586-a19a-35101a790ac0","block_type":"box","text":"the Fund to unwind its position in a derivative without incurring substantial losses (if at all). Certain","page_number":68,"box":{"x":116,"y":645,"width":733,"height":12}},{"id":"90443018-0906-4fbc-8113-ce878a43ef31","block_type":"box","text":"OTC derivatives, including swaps and OTC options, involve substantial illiquidity risk. Illiquidity may","page_number":68,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"5b732d18-2c0a-4141-bc7a-4544d9bf9e6c","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":68,"box":{"x":116,"y":676,"width":723,"height":11}},{"id":"28bb3902-bc70-4232-a57b-4156983aab1d","block_type":"box","text":"therefore, acquire illiquid OTC derivatives (i) if the agreement pursuant to which the instrument is","page_number":68,"box":{"x":116,"y":692,"width":719,"height":12}},{"id":"2a3b0c1b-b000-4a59-8cbb-57dd9a27b975","block_type":"box","text":"purchased contains a formula price at which the instrument may be terminated or sold, or (ii) for which","page_number":68,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"5989176f-bcd3-4f8d-ad20-54c7efc481ef","block_type":"box","text":"the Manager anticipates the Fund can receive on each business day at least two independent bids or","page_number":68,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"1d7f316b-5ce8-4e46-84dc-5634ffcdcc47","block_type":"box","text":"offers, unless a quotation from only one dealer is available, in which case that dealer’s quotation may","page_number":68,"box":{"x":116,"y":738,"width":751,"height":12}},{"id":"97643fba-6ffb-464f-a259-d1cccca67ca0","block_type":"box","text":"be used. The illiquidity of the derivatives markets may be due to various factors, including congestion,","page_number":68,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"dc5254a3-30ce-4faf-9b49-011c274aeaea","block_type":"box","text":"disorderly markets, limitations on deliverable supplies, the participation of speculators, government","page_number":68,"box":{"x":116,"y":769,"width":733,"height":12}},{"id":"0adb2044-29d1-4084-ae18-9f164d0af3ea","block_type":"box","text":"regulation and intervention, and technical and operational or system failures. In addition, the liquidity of","page_number":68,"box":{"x":117,"y":785,"width":763,"height":12}},{"id":"f75e0c03-688a-4952-aa60-216d74b2e9e8","block_type":"box","text":"a market in an exchange-traded derivative contract may be adversely affected by “daily price","page_number":68,"box":{"x":116,"y":800,"width":688,"height":12}},{"id":"cba468a3-b2dd-4d93-90b2-f623ae57af33","block_type":"box","text":"fluctuation limits” established by the exchanges which limit the amount of fluctuation in an exchange","page_number":68,"box":{"x":116,"y":816,"width":747,"height":12}},{"id":"d04e5903-ed88-4a6a-b480-0394d17879d4","block_type":"box","text":"traded contract price during a single trading day. Once the daily limit has been reached in the contract,","page_number":68,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"61e77254-93d8-4146-ae3c-e829035bc769","block_type":"box","text":"no trades may be entered into at a price beyond the limit, thus preventing the liquidation of open","page_number":68,"box":{"x":117,"y":847,"width":717,"height":12}},{"id":"d899e3a3-626e-4e15-94ce-91b85d74cc82","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":68,"box":{"x":117,"y":862,"width":768,"height":12}},{"id":"e6231ce4-53e4-4884-9a42-8cfefee315c6","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":68,"box":{"x":117,"y":878,"width":762,"height":12}},{"id":"8cc02837-19d9-49c9-bf54-5b642384d7cd","block_type":"box","text":"II-20","page_number":68,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"18fd5e5b-b624-4908-864e-b76746435efa","block_type":"box","text":"NM1026U-6033243-68/221","page_number":68,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8c13b050-65be-4931-8681-bd6c6ee47f4a","block_type":"box","text":"Fund would continue to be required to make daily cash payments of variation margin in the event of","page_number":69,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"85a60a14-686b-4031-9858-8903e4dca642","block_type":"box","text":"adverse price movements. In such a situation, if the Fund has insufficient cash, it may have to sell","page_number":69,"box":{"x":116,"y":102,"width":732,"height":13}},{"id":"4e3a7817-8f80-4c41-96ec-927cddf9c6ae","block_type":"box","text":"portfolio securities to meet daily variation margin requirements at a time when it may be","page_number":69,"box":{"x":117,"y":118,"width":654,"height":12}},{"id":"57126559-3605-4c37-9f10-59bc449149c0","block_type":"box","text":"disadvantageous to do so.","page_number":69,"box":{"x":116,"y":134,"width":201,"height":12}},{"id":"c4b1bbf1-191b-400f-8492-9788d1f9293e","block_type":"box","text":"Index Risk","page_number":69,"box":{"x":117,"y":166,"width":78,"height":9}},{"id":"42016e20-20b2-43ef-a6de-7aa83c76e048","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":69,"box":{"x":194,"y":166,"width":656,"height":12}},{"id":"195860f3-d57a-4da5-b900-9ca6369f4476","block_type":"box","text":"associated with changes in that index. If the index changes, the Fund could receive lower interest","page_number":69,"box":{"x":116,"y":181,"width":728,"height":12}},{"id":"87d2c07b-7999-4e32-a079-10de8d289eef","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":69,"box":{"x":117,"y":197,"width":762,"height":12}},{"id":"0af43b94-8bc3-485f-99a8-a0b5d68e4086","block_type":"box","text":"for such derivative.","page_number":69,"box":{"x":116,"y":212,"width":146,"height":10}},{"id":"9772fa2b-482f-46a1-b04b-c667d00058cc","block_type":"box","text":"Legal Risk","page_number":69,"box":{"x":116,"y":245,"width":79,"height":12}},{"id":"43a0d15c-2f69-49cf-a542-cdf6a8b4d35a","block_type":"box","text":"k — the risk of insufficient documentation, insufficient capacity or authority of counterparty, or","page_number":69,"box":{"x":194,"y":245,"width":689,"height":12}},{"id":"879fbfc9-0cfd-431f-ac4c-aa20b31d44dc","block_type":"box","text":"legality or enforceability of a contract.","page_number":69,"box":{"x":117,"y":260,"width":281,"height":12}},{"id":"3875a83a-df54-4558-959a-8de954c676af","block_type":"box","text":"Leverage Risk —","page_number":69,"box":{"x":116,"y":293,"width":112,"height":12}},{"id":"f5dc2b2d-28bf-4197-add2-c6e25b1d97ac","block_type":"box","text":"— the risk that a Fund’s derivatives transactions can magnify the Fund’s gains and","page_number":69,"box":{"x":228,"y":293,"width":619,"height":12}},{"id":"07c9a30d-34e5-40b6-abea-4992c393dc89","block_type":"box","text":"losses. Relatively small market movements may result in large changes in the value of a derivatives","page_number":69,"box":{"x":117,"y":308,"width":744,"height":12}},{"id":"6b220348-6d6e-47af-8adb-95ad7b3f39a7","block_type":"box","text":"position and can result in losses that greatly exceed the amount originally invested.","page_number":69,"box":{"x":117,"y":324,"width":621,"height":12}},{"id":"437fa6bd-0921-45cb-8c3a-93396af51a70","block_type":"box","text":"Market Risk —","page_number":69,"box":{"x":116,"y":356,"width":93,"height":10}},{"id":"140db1ae-18bc-41fc-8e76-ad23c0c21ecb","block_type":"box","text":"— the risk that changes in the value of one or more markets or changes with respect to","page_number":69,"box":{"x":209,"y":356,"width":653,"height":12}},{"id":"fd88ae51-d430-4108-b72f-da5bad6e5a5e","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":69,"box":{"x":116,"y":371,"width":719,"height":13}},{"id":"748fcb0e-ee24-4754-a9b0-411d19afbed5","block_type":"box","text":"adverse movement, a Fund may be required to pay substantial additional margin to maintain its","page_number":69,"box":{"x":116,"y":387,"width":713,"height":12}},{"id":"0c348e13-a975-4ac9-9241-a79b13b28846","block_type":"box","text":"position or the Fund’s returns may be adversely affected.","page_number":69,"box":{"x":117,"y":402,"width":427,"height":13}},{"id":"2a5e5b13-b943-4510-a4dc-4bfcf0b8ec94","block_type":"box","text":"Operational Risk","page_number":69,"box":{"x":117,"y":435,"width":124,"height":12}},{"id":"db4a5db8-b7be-417c-8ea0-7015d4939110","block_type":"box","text":"k — the risk related to potential operational issues, including documentation issues,","page_number":69,"box":{"x":240,"y":435,"width":616,"height":12}},{"id":"11886adc-7c6d-40ec-971a-0dee40d6cd3a","block_type":"box","text":"settlement issues, systems failures, inadequate controls and human error.","page_number":69,"box":{"x":116,"y":450,"width":555,"height":12}},{"id":"a15ed056-ec75-4504-8cf0-c60d728bcdc2","block_type":"box","text":"Valuation Risk —","page_number":69,"box":{"x":118,"y":483,"width":110,"height":9}},{"id":"4d39df0c-8a60-421c-96d9-da187baf1824","block_type":"box","text":"— the risk that valuation sources for a derivative will not be readily available in the","page_number":69,"box":{"x":228,"y":483,"width":614,"height":12}},{"id":"3778bcde-6c3f-457a-a591-5e6480d218bf","block_type":"box","text":"market. This is possible especially in times of market distress, since many market participants may be","page_number":69,"box":{"x":117,"y":498,"width":760,"height":12}},{"id":"a3ef6de9-0e42-473d-bc96-fe77806532c1","block_type":"box","text":"reluctant to purchase complex instruments or quote prices for them.","page_number":69,"box":{"x":117,"y":514,"width":507,"height":12}},{"id":"5266d36e-ba62-45e9-8723-05bcd55250ac","block_type":"box","text":"Volatility Risk —","page_number":69,"box":{"x":118,"y":546,"width":102,"height":12}},{"id":"a295ea27-29f0-4f52-b299-0209a8b17194","block_type":"box","text":"— the risk that the value of derivatives will fluctuate significantly within a short time","page_number":69,"box":{"x":220,"y":546,"width":619,"height":12}},{"id":"e363c07d-c229-45bc-9d52-09b81dd9948b","block_type":"box","text":"period.","page_number":69,"box":{"x":117,"y":562,"width":55,"height":12}},{"id":"e726da4b-f3f9-48d9-a8ea-46a84d9521a2","block_type":"box","text":"Types of Derivatives Transactions.","page_number":69,"box":{"x":118,"y":594,"width":261,"height":12}},{"id":"0da3ee10-6fe7-4d7a-ac4a-74acb051aa7e","block_type":"box","text":"A Fund may enter into derivatives transactions in accordance with its investment guidelines and","page_number":69,"box":{"x":116,"y":618,"width":715,"height":12}},{"id":"0bb15864-a1fd-4f79-acd4-c829ba1b05aa","block_type":"box","text":"restrictions, including the following:","page_number":69,"box":{"x":117,"y":633,"width":263,"height":12}},{"id":"cb3d964c-275e-478d-ba8b-0857f47b5298","block_type":"box","text":"Futures.","page_number":69,"box":{"x":116,"y":666,"width":60,"height":9}},{"id":"2842ee42-d41a-450e-97d7-fd0972723987","block_type":"box","text":"A Fund may enter into futures contracts (“futures”) and options on futures contracts. Futures are","page_number":69,"box":{"x":116,"y":690,"width":713,"height":12}},{"id":"b03f213b-297a-44f8-80e3-13a03c33431c","block_type":"box","text":"standardized, exchange-traded contracts that require a purchaser to take delivery, and a seller to make","page_number":69,"box":{"x":116,"y":705,"width":767,"height":12}},{"id":"7a8b4b17-8cc5-45ec-b559-02c776c95b9a","block_type":"box","text":"delivery, of a specified amount of an asset at a specified future date and price. Upon purchasing or","page_number":69,"box":{"x":116,"y":721,"width":734,"height":12}},{"id":"bf63bccd-26c0-41f1-9788-049e030f5fde","block_type":"box","text":"selling a futures contract, a Fund is required to deposit initial margin equal to a percentage of the","page_number":69,"box":{"x":116,"y":736,"width":718,"height":12}},{"id":"93cdd954-fa75-4308-b3cb-7f769babc182","block_type":"box","text":"contract value. Futures contracts are marked to market daily for the duration of the contract, and the","page_number":69,"box":{"x":116,"y":752,"width":743,"height":12}},{"id":"d0c72da8-e497-4a1f-a759-0de8820dbcf1","block_type":"box","text":"Fund will either post additional margin or be entitled to a payment, as applicable, based on the","page_number":69,"box":{"x":117,"y":767,"width":699,"height":12}},{"id":"6a2edb2e-905a-4bf5-a75b-0be1b95a698a","block_type":"box","text":"mark-to-market movement of the contract.","page_number":69,"box":{"x":117,"y":783,"width":311,"height":9}},{"id":"21858e9d-e428-4cda-9f1c-4b4866bb5876","block_type":"box","text":"A Fund may sell a futures contract prior to the completion","page_number":69,"box":{"x":116,"y":815,"width":425,"height":12}},{"id":"6fe66c32-88a6-44d5-8887-6e20b02db130","block_type":"box","text":"of its term to limit its risk of loss from a","page_number":69,"box":{"x":548,"y":815,"width":284,"height":10}},{"id":"2b1d0830-5523-4bf2-977a-1ce051efdb79","block_type":"box","text":"decline in the market value of portfolio holdings correlated with the futures contract. However, in the","page_number":69,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"56a7a958-e62b-4b5a-a978-939bdcc73b79","block_type":"box","text":"event the market value of the portfolio holdings correlated with the futures contract increases rather","page_number":69,"box":{"x":116,"y":846,"width":742,"height":12}},{"id":"46232b1e-cb0c-42d7-8037-9ece06b09dea","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":69,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"eefbc86e-95bc-41bd-a3b7-490fdbb2471f","block_type":"box","text":"holdings than would have been realized without the purchase of the futures contract.","page_number":69,"box":{"x":117,"y":877,"width":631,"height":12}},{"id":"4381012b-7da0-4e0c-b6f2-9a8c3971a626","block_type":"box","text":"II-21","page_number":69,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"73719d88-15fa-410c-acf8-09928aae1c01","block_type":"box","text":"NM1026U-6033243-69/221","page_number":69,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ae9a3671-225b-4988-8963-6ea3242b1e93","block_type":"box","text":"The purchase of a futures contract may provide a Fund a lower cost alternative to purchasing","page_number":70,"box":{"x":116,"y":87,"width":697,"height":12}},{"id":"e67d27ac-afe4-4aaa-b259-3af764011f1b","block_type":"box","text":"securities or commodities directly. In the event that such securities or commodities decline in value or a","page_number":70,"box":{"x":116,"y":103,"width":772,"height":12}},{"id":"1415a0b4-bec5-471f-bb35-4c8c9f5b5539","block_type":"box","text":"Fund determines not to complete an anticipatory hedge transaction relating to a futures contract,","page_number":70,"box":{"x":117,"y":118,"width":720,"height":12}},{"id":"233ce9c4-3dd9-4549-b007-5968c72f3387","block_type":"box","text":"however, the Fund may realize a loss relating to the futures position.","page_number":70,"box":{"x":117,"y":134,"width":512,"height":12}},{"id":"c03599ba-d6df-4c5d-904a-ca6b481e3189","block_type":"box","text":"Futures contracts are also subject to position limits. In order to comply with position limits, a Fund may","page_number":70,"box":{"x":117,"y":166,"width":763,"height":12}},{"id":"08289539-9933-422d-b44c-45048f299b8e","block_type":"box","text":"be required to liquidate positions or may not be able to fully implement trading instructions. Any such","page_number":70,"box":{"x":117,"y":181,"width":750,"height":12}},{"id":"b132eed4-94f3-4c47-bbb3-a2906e1f0dbb","block_type":"box","text":"liquidation or limited implementation could result in substantial costs to a Fund. See “— Regulation of","page_number":70,"box":{"x":117,"y":196,"width":754,"height":13}},{"id":"f207a31d-eb53-4055-a303-4303fa26462a","block_type":"box","text":"Derivatives — Dodd-Frank Regulations” above.","page_number":70,"box":{"x":117,"y":212,"width":356,"height":12}},{"id":"f545ecd4-7140-4b92-b9d9-313053fd1eb5","block_type":"box","text":"A Fund is also permitted to purchase or sell call and put options on futures contracts, including","page_number":70,"box":{"x":116,"y":244,"width":706,"height":12}},{"id":"3c489f8e-ffd1-49a3-b8e1-23b6a41f18ef","block_type":"box","text":"financial futures and stock indices. Generally, these strategies would be used under the same market","page_number":70,"box":{"x":116,"y":259,"width":757,"height":13}},{"id":"14ee0155-789b-49d1-bf85-891ac64d7d01","block_type":"box","text":"and market sector conditions (","page_number":70,"box":{"x":116,"y":275,"width":225,"height":12}},{"id":"008e1afa-6aeb-483a-bcf5-331fb630b03a","block_type":"box","text":"i.e.","page_number":70,"box":{"x":342,"y":275,"width":20,"height":10}},{"id":"f352e2f4-3960-4085-9027-fab745d69d49","block_type":"box","text":", conditions relating to specific types of investments) in which the","page_number":70,"box":{"x":365,"y":275,"width":485,"height":12}},{"id":"c77025de-9486-4751-b47b-bcd68d21bccb","block_type":"box","text":"Fund entered into futures transactions. A Fund may purchase put options or write call options on","page_number":70,"box":{"x":117,"y":290,"width":720,"height":13}},{"id":"56ab0a54-a446-450f-95f1-cc15c41684bb","block_type":"box","text":"futures contracts and stock indices in lieu of selling the underlying futures contract in anticipation of a","page_number":70,"box":{"x":116,"y":306,"width":754,"height":12}},{"id":"1b335f8b-c79d-4448-a262-6587708a9e67","block_type":"box","text":"decrease in the market value of its securities. Similarly, a Fund can purchase call options, or write put","page_number":70,"box":{"x":116,"y":321,"width":759,"height":13}},{"id":"1e6377ab-01f1-4d9b-b97e-36b984732272","block_type":"box","text":"options on futures contracts and stock indices, as a substitute for the purchase of such futures","page_number":70,"box":{"x":116,"y":337,"width":705,"height":12}},{"id":"8bee3c4a-d0c9-49a9-85fc-4203ab9a8901","block_type":"box","text":"contracts to hedge against the increased cost resulting from an increase in the market value of","page_number":70,"box":{"x":116,"y":352,"width":707,"height":13}},{"id":"f06d9acc-32ea-44b9-a059-bd55e8ae00a8","block_type":"box","text":"securities which the Fund intends to purchase.","page_number":70,"box":{"x":116,"y":368,"width":350,"height":12}},{"id":"548e64ea-0c47-4b98-905a-4aa3b54e5f05","block_type":"box","text":"To maintain greater flexibility, a Fund may invest in instruments which have characteristics similar to","page_number":70,"box":{"x":116,"y":400,"width":748,"height":12}},{"id":"2d091393-c023-4b74-9696-75ca417ff7ff","block_type":"box","text":"futures contracts. These instruments may take a variety of forms, such as debt securities with interest","page_number":70,"box":{"x":116,"y":415,"width":759,"height":13}},{"id":"7de3a120-3eff-4312-b741-aabd38e6ea8e","block_type":"box","text":"or principal payments determined by reference to the value of a security, an index of securities or a","page_number":70,"box":{"x":116,"y":431,"width":740,"height":12}},{"id":"ad8a9262-91ad-439a-8864-353d8efd0502","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":70,"box":{"x":116,"y":446,"width":764,"height":13}},{"id":"b74c9889-e643-4fde-ae0d-c19caf80ddd8","block_type":"box","text":"futures and securities, including volatility and illiquidity.","page_number":70,"box":{"x":116,"y":462,"width":410,"height":12}},{"id":"9b69d5bf-bd4c-4a89-92e3-f57315d7ded5","block_type":"box","text":"Futures contracts and options on futures contracts are subject to significant correlation risk, leverage","page_number":70,"box":{"x":117,"y":494,"width":751,"height":12}},{"id":"72e93c17-e2ee-49d4-a827-c4eab9224bdf","block_type":"box","text":"risk, illiquidity risk, market risk and counterparty risk with respect to a Fund’s futures broker or the","page_number":70,"box":{"x":117,"y":509,"width":726,"height":13}},{"id":"7171d462-12ec-4fd0-a8bd-cedb68ea4660","block_type":"box","text":"clearinghouse. See “— Risk Factors in Derivatives” above.","page_number":70,"box":{"x":116,"y":525,"width":440,"height":12}},{"id":"c05afe0f-aebf-41a8-a599-ab923fb37aa4","block_type":"box","text":"Certain Funds may invest in futures based on carbon “allowances.” Under certain regulatory regimes, a","page_number":70,"box":{"x":117,"y":557,"width":771,"height":12}},{"id":"26449076-453a-4296-9416-fed58013083c","block_type":"box","text":"limit is set by a regulator, such as a government entity, on the total amount of specific greenhouse","page_number":70,"box":{"x":117,"y":572,"width":732,"height":13}},{"id":"fd1899a2-7c2b-4182-b323-e3418fbc51c9","block_type":"box","text":"gases, such as CO2, that can be emitted by regulated entities, such as manufacturers or energy","page_number":70,"box":{"x":116,"y":588,"width":720,"height":12}},{"id":"5b68fd25-4f98-4d9e-853f-e793137a4069","block_type":"box","text":"producers. The regulator then may issue or sell individual “emission allowances” to regulated entities,","page_number":70,"box":{"x":117,"y":603,"width":756,"height":13}},{"id":"f578cc3c-8fd5-45d6-bf38-660c331e53e1","block_type":"box","text":"which can then be traded on the open market. Commodity futures contracts linked to the value of","page_number":70,"box":{"x":116,"y":619,"width":725,"height":12}},{"id":"47502d4c-2586-4a84-a9df-f8194f2f9e4f","block_type":"box","text":"emission allowances are known as “carbon futures.”","page_number":70,"box":{"x":116,"y":634,"width":392,"height":10}},{"id":"34b8cffb-5f0f-4e40-b9b9-27447ae3957c","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":70,"box":{"x":116,"y":666,"width":756,"height":13}},{"id":"4db488b8-6600-4b67-915b-36f411a2cc1f","block_type":"box","text":"demand for carbon futures contracts. Market conditions and expectations, position limits, collateral","page_number":70,"box":{"x":116,"y":682,"width":730,"height":12}},{"id":"86cc1c65-bef2-46fb-8fec-7220315fe578","block_type":"box","text":"requirements, and other factors each can impact the supply of and demand for carbon futures","page_number":70,"box":{"x":117,"y":697,"width":694,"height":13}},{"id":"2711cd29-0dac-4c3e-a4e0-3a9d061984ec","block_type":"box","text":"contracts. The market for carbon futures contracts is still developing and may be subject to periods of","page_number":70,"box":{"x":116,"y":713,"width":753,"height":12}},{"id":"a24c9173-c2fd-4494-88cb-00a350e0deff","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":70,"box":{"x":117,"y":728,"width":723,"height":13}},{"id":"68edf99f-c0b9-4891-81b9-541eed59a503","block_type":"box","text":"price. Market disruptions or volatility can also make it difficult to find a counterparty willing to transact at","page_number":70,"box":{"x":117,"y":744,"width":765,"height":12}},{"id":"486775ec-e2f1-4748-afe2-0769d15cde97","block_type":"box","text":"a reasonable price and sufficient size.","page_number":70,"box":{"x":116,"y":759,"width":280,"height":12}},{"id":"9f1da5eb-f5b0-48ca-a6b8-e6e99e8d4ab0","block_type":"box","text":"Swap Agreements.","page_number":70,"box":{"x":117,"y":791,"width":139,"height":13}},{"id":"9c8cf7b5-8296-401f-9469-491cc97efe7b","block_type":"box","text":"A Fund may enter into swap agreements for hedging purposes or speculative purposes. Swap","page_number":70,"box":{"x":116,"y":815,"width":699,"height":12}},{"id":"5674c66b-bcf8-4686-9d4d-a15075e55af5","block_type":"box","text":"agreements are OTC contracts entered into primarily by financial institutions and institutional investors","page_number":70,"box":{"x":116,"y":831,"width":764,"height":12}},{"id":"f91a64f8-8b1f-4c8e-8b04-1fc4112e82a6","block_type":"box","text":"which may or may not be cleared by a central clearinghouse. In a standard “swap” transaction, two","page_number":70,"box":{"x":116,"y":846,"width":738,"height":12}},{"id":"0b1a562a-0b62-4bd7-9b90-49ccd63ddfbf","block_type":"box","text":"parties agree to exchange the returns earned or realized from one or more underlying assets or rates","page_number":70,"box":{"x":117,"y":862,"width":755,"height":12}},{"id":"aa0ad265-d2ba-4f3d-a477-55beccbb2dce","block_type":"box","text":"of return, which may be adjusted for an interest factor. The gross returns to be exchanged or","page_number":70,"box":{"x":116,"y":877,"width":693,"height":12}},{"id":"9df00aee-be0f-468d-930c-ae1c4103ac2e","block_type":"box","text":"II-22","page_number":70,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"75a6fa14-36a8-4b08-aa6f-d3f24777026a","block_type":"box","text":"NM1026U-6033243-70/221","page_number":70,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ad0fc1a0-6d0f-4698-a965-600473babf72","block_type":"box","text":"“swapped” between the parties are generally calculated with respect to a “notional amount,”","page_number":71,"box":{"x":116,"y":87,"width":684,"height":12}},{"id":"512260bc-fbbe-46f8-94ff-1b5114fe17b7","block_type":"box","text":"e.g.","page_number":71,"box":{"x":801,"y":90,"width":26,"height":9}},{"id":"42b60214-93ea-4fec-9089-dd84fa8464a0","block_type":"box","text":", the","page_number":71,"box":{"x":830,"y":87,"width":36,"height":11}},{"id":"9a125ce0-9922-4368-bba2-396669986601","block_type":"box","text":"return or increase in value of a particular dollar amount invested at a particular interest rate, in a","page_number":71,"box":{"x":117,"y":102,"width":716,"height":12}},{"id":"77a0e1d8-d55d-47c9-b48e-d313303f273a","block_type":"box","text":"particular foreign currency, or in a “basket” of securities representing a particular index. The notional","page_number":71,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"5dc6d8e0-6ca6-42b2-9794-672fb943c024","block_type":"box","text":"amount of the swap agreement is only used to calculate the obligations that the parties to a swap","page_number":71,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"3a536841-eb7f-4ca5-b8ab-91de61726cd3","block_type":"box","text":"agreement have agreed to exchange. A Fund’s obligations (or rights) under a swap agreement will","page_number":71,"box":{"x":116,"y":149,"width":736,"height":12}},{"id":"f4b91cb4-5cb2-4748-80cb-fb841ac3de52","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":71,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"09b5f282-d755-4c34-9f43-a1b0af9e0e91","block_type":"box","text":"relative values of the positions held by each party to the agreement. Swaps that are not cleared involve","page_number":71,"box":{"x":117,"y":180,"width":770,"height":12}},{"id":"4706ed3b-086a-4b69-a002-8150edfffefa","block_type":"box","text":"substantial counterparty risk. A Fund will typically attempt to mitigate this counterparty risk by entering","page_number":71,"box":{"x":116,"y":196,"width":761,"height":12}},{"id":"e3542963-9e05-4003-ad4e-d76610fc778f","block_type":"box","text":"into swap agreements only with creditworthy entities that have substantial capital or that have provided","page_number":71,"box":{"x":117,"y":211,"width":767,"height":12}},{"id":"ebdc787a-b14a-4270-a753-457bbf10c2b9","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":71,"box":{"x":116,"y":227,"width":751,"height":12}},{"id":"47d66c43-93a6-4fee-8757-ce96d07b3930","block_type":"box","text":"may be restricted by the tax rules applicable to registered investment companies.","page_number":71,"box":{"x":117,"y":242,"width":607,"height":12}},{"id":"332fefb2-5e0a-4abe-904a-8a0d79a1a5ee","block_type":"box","text":"Credit Default Swaps and Similar Instruments.","page_number":71,"box":{"x":117,"y":273,"width":333,"height":12}},{"id":"bdbb6a47-42ac-41dc-a6c4-adabceb59bbf","block_type":"box","text":"Certain Funds may enter into credit default swaps and","page_number":71,"box":{"x":450,"y":273,"width":389,"height":12}},{"id":"75f65ed9-fce5-440b-bf2a-d6ac3286de59","block_type":"box","text":"similar instruments. Credit default swaps are standardi","page_number":71,"box":{"x":116,"y":289,"width":386,"height":12}},{"id":"6c966411-c487-4408-afe7-df5828970694","block_type":"box","text":"zed agreements in which the protection “buyer” pays","page_number":71,"box":{"x":503,"y":289,"width":378,"height":12}},{"id":"649e9d34-2c01-4d92-8958-bbaa3d75db8d","block_type":"box","text":"the protection “seller” an up-front payment, or a periodic","page_number":71,"box":{"x":116,"y":304,"width":400,"height":12}},{"id":"59fc4e89-2f7d-44ef-845f-deac20841a89","block_type":"box","text":"stream of payments, over the term of the contract,","page_number":71,"box":{"x":517,"y":304,"width":360,"height":12}},{"id":"d3b4d868-87f3-4167-bde0-c0d4679cea51","block_type":"box","text":"provided generally that no credit event on a reference ob","page_number":71,"box":{"x":117,"y":320,"width":401,"height":12}},{"id":"a1d862fb-7a18-4ec5-b0ff-74d9f3ab7cb7","block_type":"box","text":"ligation has occurred. If a credit event occurs, the","page_number":71,"box":{"x":520,"y":320,"width":353,"height":12}},{"id":"9c36c6f6-da8b-49eb-af88-3bd572734430","block_type":"box","text":"seller generally must pay the buyer the difference","page_number":71,"box":{"x":116,"y":335,"width":355,"height":12}},{"id":"22bcc96b-0971-4937-bf60-d31071f5064f","block_type":"box","text":"between the notional amount of the contract and the","page_number":71,"box":{"x":472,"y":335,"width":375,"height":10}},{"id":"4b078431-8097-41e9-9bef-6c2ce9f89fb1","block_type":"box","text":"value of a portfolio of securities issued by the refere","page_number":71,"box":{"x":116,"y":351,"width":357,"height":12}},{"id":"8fdc9dc7-8dc2-4bc5-92e5-3894ed5cd150","block_type":"box","text":"rence entity. A Fund may be either the buyer or seller in","page_number":71,"box":{"x":473,"y":351,"width":395,"height":12}},{"id":"b742a9c7-a596-427c-8eaa-d6295e09dfb9","block_type":"box","text":"the transaction. The Funds may enter into credit default","page_number":71,"box":{"x":116,"y":366,"width":398,"height":12}},{"id":"16b1f1e4-e775-405a-b812-655f5715c536","block_type":"box","text":"swaps that reference the obligations of a single","page_number":71,"box":{"x":515,"y":366,"width":338,"height":12}},{"id":"19ba30de-eae7-410b-b4dc-2dd174e96254","block_type":"box","text":"entity (“single-name CDS”) or the obli","page_number":71,"box":{"x":116,"y":382,"width":264,"height":12}},{"id":"4ef8d4c8-ed25-4ce7-bb81-046b4f299778","block_type":"box","text":"gations of entities that make up an index (“index CDS”). References to","page_number":71,"box":{"x":381,"y":382,"width":504,"height":12}},{"id":"cfa744e4-c611-459f-9020-ebf4459446c5","block_type":"box","text":"“credit default swaps” shall collectively refer to single-name CDS and index CDS.","page_number":71,"box":{"x":116,"y":397,"width":579,"height":12}},{"id":"c335377f-b51e-4368-8ae2-62761116a393","block_type":"box","text":"Credit default swaps have as reference obligations one or more securities or loans that are not","page_number":71,"box":{"x":117,"y":428,"width":706,"height":12}},{"id":"2da076a5-d15e-4b7c-b6e1-70424339584e","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":71,"box":{"x":116,"y":444,"width":749,"height":12}},{"id":"ffc8726e-c63c-4e2e-8292-5a8148564136","block_type":"box","text":"are deliverable under a credit default swap, the Fund is exposed to the risk that deliverable securities","page_number":71,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"837fbd7c-b861-451c-ad89-5539770909ab","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":71,"box":{"x":116,"y":475,"width":763,"height":12}},{"id":"0ae6aa44-5a2a-4683-bfa3-76782f9f6ca4","block_type":"box","text":"in a so-called “short squeeze.” In certain instances of issuer defaults or restructurings, it has been","page_number":71,"box":{"x":117,"y":490,"width":729,"height":12}},{"id":"6e5ec1e0-412f-408b-9b45-0ebd835653ba","block_type":"box","text":"unclear under the standard industry documentation for credit default swaps whether or not a “credit","page_number":71,"box":{"x":117,"y":506,"width":739,"height":12}},{"id":"4571d5f4-298f-4c0c-91ee-8c478a15d8dd","block_type":"box","text":"event” triggering the seller’s payment obligation had occurred. Certain initiatives adopted by derivatives","page_number":71,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"867ccd1b-1508-45a9-b6e9-c79bfca2f386","block_type":"box","text":"market participants, including the International Swaps and Derivatives Association (“ISDA”), are","page_number":71,"box":{"x":117,"y":537,"width":713,"height":12}},{"id":"84ccdf40-b05a-41d8-bbb7-95a9473b3f27","block_type":"box","text":"designed to implement uniform settlement terms into standard credit default swap documentation, as","page_number":71,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"cdef9ccd-5bb3-4990-836d-2095b4ee3e0f","block_type":"box","text":"well as refine the practices for the transparent conduct of the credit default swap market generally.","page_number":71,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"8053e497-5179-4e29-9986-cd6b3dc811e0","block_type":"box","text":"Among these initiatives are the ISDA Credit Derivatives Determination Committee and the","page_number":71,"box":{"x":116,"y":583,"width":672,"height":12}},{"id":"6266f66f-f23e-449b-81a9-dfce9c1e9f06","block_type":"box","text":"implementation of market-wide cash settlement protocols applicable to all market-standard credit","page_number":71,"box":{"x":117,"y":599,"width":722,"height":12}},{"id":"0bb298a5-6e5f-4a0d-81b1-84df23c5d7c1","block_type":"box","text":"default swaps. These initiatives are intended to reduce both the uncertainty as to the occurrence of","page_number":71,"box":{"x":116,"y":614,"width":739,"height":12}},{"id":"439103b0-710f-4e1b-8a15-e3e84e6977db","block_type":"box","text":"credit events and the risk of a “short squeeze” by providing that the ISDA Credit Derivatives","page_number":71,"box":{"x":116,"y":630,"width":684,"height":12}},{"id":"ef8e52f3-b146-486f-9a2e-99251ec046b2","block_type":"box","text":"Determinations Committee will make determinations as to whether a credit event has occurred,","page_number":71,"box":{"x":117,"y":645,"width":710,"height":11}},{"id":"af28656a-ad8c-4e1e-9f6c-8a2f858f24f4","block_type":"box","text":"establish an auction to determine a settlement price and identify the deliverable securities for purposes","page_number":71,"box":{"x":116,"y":661,"width":763,"height":12}},{"id":"ce69c4e6-4bd6-4c62-bf81-b86f00be6a9f","block_type":"box","text":"of the auction, although the ISDA Credit Derivatives Determinations Committee may in certain limited","page_number":71,"box":{"x":116,"y":676,"width":750,"height":12}},{"id":"9f378109-d4de-45fd-8b18-a6703eb6765e","block_type":"box","text":"circumstances refrain from doing so. In the event the ISDA Credit Derivatives Determinations","page_number":71,"box":{"x":116,"y":692,"width":691,"height":12}},{"id":"e3291415-5064-4882-8999-1684eff0a12e","block_type":"box","text":"Committee cannot reach a timely resolution with respect to a “credit event” or otherwise does not","page_number":71,"box":{"x":117,"y":707,"width":718,"height":12}},{"id":"86b696f4-255a-4f12-a20f-15e6dcc352ab","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":71,"box":{"x":116,"y":723,"width":713,"height":12}},{"id":"a1970417-02f4-436e-bd7b-fab3f090c6f9","block_type":"box","text":"default swap upon a default by the reference entity. Furthermore, a Fund may enter into certain credit","page_number":71,"box":{"x":116,"y":738,"width":753,"height":12}},{"id":"7073c77f-92f9-4e0d-97a2-81f48f8e2a8d","block_type":"box","text":"default swaps or similar instruments that may not be covered by these initiatives.","page_number":71,"box":{"x":116,"y":754,"width":598,"height":12}},{"id":"871e520f-8ccc-4b71-b506-b20e8f98c89c","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":71,"box":{"x":117,"y":785,"width":723,"height":12}},{"id":"702b50e8-e4d2-4f27-bebc-74f655a1f51b","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":71,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"5c38187b-62a8-458a-b599-22f7ed9cca0a","block_type":"box","text":"of any deliverable obligation received by the Fund or the amount of cash settlement received by the","page_number":71,"box":{"x":116,"y":816,"width":738,"height":12}},{"id":"73cf4cc8-7d79-4ae4-8b76-925db90ec058","block_type":"box","text":"Fund pursuant to the relevant cash settlement auction, together with the up-front or periodic payments","page_number":71,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"20ab4d34-fd6e-444c-8257-386baf6b4dc4","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":71,"box":{"x":117,"y":847,"width":770,"height":12}},{"id":"04addc48-b44b-4a8a-b653-ec5f6c533514","block_type":"box","text":"Fund. A Fund that sells credit default swaps incurs leveraged exposure to the credit of one or more","page_number":71,"box":{"x":117,"y":862,"width":739,"height":12}},{"id":"fa475581-ffe2-4915-9842-81e9c7e1f023","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":71,"box":{"x":117,"y":878,"width":703,"height":12}},{"id":"6356f502-ccf5-476a-849d-d672fe8fdf4c","block_type":"box","text":"II-23","page_number":71,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6ed12c3e-0cf7-4673-a43f-465a9ff650b4","block_type":"box","text":"NM1026U-6033243-71/221","page_number":71,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"bc5a41f3-9446-49f1-9e44-0009a4db58df","block_type":"box","text":"securities issued by the relevant reference entity. However, a Fund will not have any legal recourse","page_number":72,"box":{"x":116,"y":87,"width":742,"height":12}},{"id":"8dbdb980-f5b4-4e22-a562-4685640d021f","block_type":"box","text":"against any reference entity and will not benefit from any collateral securing the reference entity’s debt","page_number":72,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"9f7599c8-fc4a-463e-adb9-0ddfdc7f0632","block_type":"box","text":"obligations. In the event the ISDA Credit Derivatives Determinations Committee does not establish a","page_number":72,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"662e901e-42d1-4d50-91dd-b18a3e922df0","block_type":"box","text":"cash settlement auction and identify the relevant deliverable securities or loans, the credit default swap","page_number":72,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"cd9c840e-aba9-4a72-8aca-33671e7dd2cd","block_type":"box","text":"buyer will have broad discretion to select which of the reference entity’s debt obligations to deliver to","page_number":72,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"3c063fbd-7995-41d2-9220-47dd388d6d6a","block_type":"box","text":"the Fund following a credit event and will likely choose the obligations with the lowest market value in","page_number":72,"box":{"x":116,"y":165,"width":755,"height":12}},{"id":"c9b8b9a1-4775-43a2-9bd9-fb7388a964fc","block_type":"box","text":"order to maximize the payment obligations of the Fund. In addition, credit default swaps generally trade","page_number":72,"box":{"x":116,"y":180,"width":772,"height":12}},{"id":"87d2d905-c925-48a1-af1f-47da47516a33","block_type":"box","text":"on the basis of theoretical pricing and valuation models, which may not accurately value such swap","page_number":72,"box":{"x":116,"y":196,"width":742,"height":12}},{"id":"6fe9c569-23e2-4272-95cd-c10aa514a536","block_type":"box","text":"positions when established or when subsequently traded or unwound under actual market conditions.","page_number":72,"box":{"x":117,"y":211,"width":756,"height":12}},{"id":"747e0bff-e6a3-4dc7-ad91-bd8df86d3894","block_type":"box","text":"Dodd-Frank requires that certain index CDS be executed in regulated markets and submitted for","page_number":72,"box":{"x":117,"y":242,"width":719,"height":12}},{"id":"3b00bf67-0dc6-4fe2-abc9-c7fc88d2ecc7","block_type":"box","text":"clearing to regulated clearinghouses. See “— Derivatives — Regulation of Derivatives — Dodd-Frank","page_number":72,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"ca8d931d-5e76-4ee7-80ab-89a78d838404","block_type":"box","text":"Regulations” above. Other single-name CDS and index CDS are permitted, although not required, to","page_number":72,"box":{"x":117,"y":273,"width":750,"height":12}},{"id":"82a1cbe2-960c-4b9a-a764-5429fba164b4","block_type":"box","text":"be cleared through regulated clearinghouses. The Funds clear all credit default swaps that are subject","page_number":72,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"55ec3a0e-a30d-4967-b3fa-44b4597e766d","block_type":"box","text":"to mandatory clearing and may voluntarily clear some, but not all, of the other credit default swaps not","page_number":72,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"e3a6785b-2f10-476e-a17d-f6a6a85f26c9","block_type":"box","text":"subject to mandatory clearing. The Funds face counterparty risk with respect to the clearinghouse","page_number":72,"box":{"x":116,"y":320,"width":731,"height":12}},{"id":"24babb50-d3a4-47a3-94da-e356dcc4d62e","block_type":"box","text":"when entering into cleared single-name CDS and cleared index CDS. The Funds face significant","page_number":72,"box":{"x":116,"y":335,"width":722,"height":12}},{"id":"ba4f32ea-8931-4c6f-8904-7b2846d1e19b","block_type":"box","text":"counterparty risk with respect to their counterparties to non-cleared credit default swaps and similar","page_number":72,"box":{"x":116,"y":351,"width":743,"height":12}},{"id":"5c6157a6-57d0-4834-9289-57f807f42f8a","block_type":"box","text":"instruments. A Fund typically will enter into non-cleared credit default swaps and similar instruments","page_number":72,"box":{"x":117,"y":366,"width":746,"height":12}},{"id":"52f59b9c-c9b0-4f3e-bae6-b93d6f2db06a","block_type":"box","text":"with swap dealers and creditworthy entities that have substantial capital or that have provided the Fund","page_number":72,"box":{"x":116,"y":382,"width":771,"height":12}},{"id":"f4f66462-aead-448e-b3a0-794909795124","block_type":"box","text":"with a third-party guaranty or other credit support.","page_number":72,"box":{"x":116,"y":397,"width":373,"height":12}},{"id":"70e6f6a3-ac0c-41d7-bd6a-eb49491d30c7","block_type":"box","text":"In certain instances, a Fund may enter into bespoke credit default swaps or similar instruments either","page_number":72,"box":{"x":117,"y":428,"width":755,"height":12}},{"id":"6e2e40a7-4be2-451f-b163-29a2cbd150aa","block_type":"box","text":"as protection buyer or protection seller. While these contracts are similar in their operation to the","page_number":72,"box":{"x":116,"y":444,"width":720,"height":12}},{"id":"44be0e34-0799-4efe-8f23-35a674aa12cc","block_type":"box","text":"market-standard credit default swaps described above, they are less standardized and instead have","page_number":72,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"a292831f-af4b-4b58-884c-99be96b3a33d","block_type":"box","text":"bespoke or tailored features. For example, as compared to market-standard credit defaults, the range","page_number":72,"box":{"x":117,"y":475,"width":758,"height":12}},{"id":"0ab5770f-5fd7-49a0-b0c9-0413fa9d3baf","block_type":"box","text":"of “credit events” triggering settlement of such bespoke contracts may be narrower or broader, any","page_number":72,"box":{"x":116,"y":490,"width":737,"height":12}},{"id":"546d1572-c77d-4bc5-afea-310c4b1201ab","block_type":"box","text":"such triggered contracts are settled by physical delivery of the underlying security or loan to or by the","page_number":72,"box":{"x":116,"y":506,"width":755,"height":12}},{"id":"6947e9fe-52b0-4e77-86af-7e5a44009e96","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":72,"box":{"x":117,"y":521,"width":719,"height":12}},{"id":"e9719688-8103-4985-a80a-330b4122c964","block_type":"box","text":"reference obligations and/or deliverable obligations.","page_number":72,"box":{"x":117,"y":537,"width":388,"height":12}},{"id":"29088708-7915-4658-8ec5-96410b358b4d","block_type":"box","text":"In addition, credit default swaps and similar instruments generally involve greater risks than if a Fund","page_number":72,"box":{"x":117,"y":568,"width":752,"height":12}},{"id":"f1f05f4d-1cbe-4a97-9b47-5e53b8c00bbf","block_type":"box","text":"had invested in the reference obligation directly and are subject to significant credit risk, correlation","page_number":72,"box":{"x":117,"y":583,"width":738,"height":12}},{"id":"56f3d135-9db1-4687-8c58-9a58127a0796","block_type":"box","text":"risk, leverage risk, illiquidity risk and market risk. See “— Risk Factors in Derivatives” above.","page_number":72,"box":{"x":117,"y":599,"width":689,"height":12}},{"id":"252f9b1c-f0ee-4f24-b8b8-b7ecabc58524","block_type":"box","text":"Interest Rate Swaps, Floors and Caps.","page_number":72,"box":{"x":117,"y":630,"width":292,"height":12}},{"id":"bd7cc12f-7819-4a0c-bab4-712299e36554","block_type":"box","text":"Certain Funds may enter into OTC derivatives in the form of","page_number":72,"box":{"x":410,"y":630,"width":450,"height":12}},{"id":"67bde53b-bf29-4418-93be-24c1598e13b3","block_type":"box","text":"interest rate swaps and interest rate caps and floors. As described in further detail below, a Fund may","page_number":72,"box":{"x":117,"y":645,"width":760,"height":12}},{"id":"d70a43c5-a608-44e3-91a7-7227bff6ee4c","block_type":"box","text":"enter into these transactions primarily to preserve a return or spread on a particular investment or","page_number":72,"box":{"x":116,"y":661,"width":724,"height":12}},{"id":"ff728aa2-50b7-404f-a023-7773bc02f671","block_type":"box","text":"portion of its holdings, as a duration management technique, to protect against an increase in the price","page_number":72,"box":{"x":117,"y":676,"width":762,"height":12}},{"id":"759e4b5f-0bec-4b5e-aa41-f4226c8caac9","block_type":"box","text":"of securities a Fund anticipates purchasing at a later date, or for speculation to increase returns.","page_number":72,"box":{"x":116,"y":692,"width":712,"height":12}},{"id":"3ae74fb2-3eb3-44af-a8a4-819e940b7d4c","block_type":"box","text":"Dodd-Frank requires that certain interest rate swaps be executed in regulated markets and submitted","page_number":72,"box":{"x":117,"y":723,"width":750,"height":12}},{"id":"0f0427e2-2e75-4973-b1d5-6d8f93be7dd9","block_type":"box","text":"for clearing to regulated clearinghouses. See “— Regulation of Derivatives — Dodd-Frank Regulations”","page_number":72,"box":{"x":116,"y":738,"width":766,"height":12}},{"id":"1d7af514-a300-4737-a1e3-5312f99f565a","block_type":"box","text":"above. Other interest rate swaps are permitted, although not required, to be cleared. Most of the","page_number":72,"box":{"x":116,"y":754,"width":715,"height":12}},{"id":"d2ba3f61-dca2-49bb-a639-095c8a6653e2","block_type":"box","text":"interest rate swaps entered into by the Funds are cleared. The Funds face counterparty risk with","page_number":72,"box":{"x":117,"y":769,"width":714,"height":12}},{"id":"381dccad-e828-42e2-b533-7f5ed89075a0","block_type":"box","text":"respect to the clearinghouse when entering into cleared interest rate swaps.","page_number":72,"box":{"x":117,"y":785,"width":561,"height":12}},{"id":"28ed3677-4a1f-483f-b70f-ac2b13792969","block_type":"box","text":"The Funds face significant counterparty risk with respect to their counterparties to non-cleared interest","page_number":72,"box":{"x":116,"y":816,"width":759,"height":12}},{"id":"f2a6bac0-edbf-4b79-9d3c-3aa01b4034e6","block_type":"box","text":"rate swaps and interest rate caps and floors. The typical counterparties for a Fund’s non-cleared","page_number":72,"box":{"x":117,"y":831,"width":719,"height":12}},{"id":"ac6fee75-3256-4a88-ae15-7dd669938ea5","block_type":"box","text":"interest rate derivatives transactions are swap dealers and other creditworthy entities that have","page_number":72,"box":{"x":117,"y":847,"width":709,"height":12}},{"id":"d9e9e3aa-fc8d-497a-9845-7041f89aa3b3","block_type":"box","text":"substantial capital or that have provided the Fund with a third-party guaranty or other credit support. If","page_number":72,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"fea4ee74-c704-4115-a26f-0f3292896fab","block_type":"box","text":"the Fund’s counterparty defaults on such a transaction, a Fund will have contractual remedies with","page_number":72,"box":{"x":116,"y":878,"width":736,"height":12}},{"id":"b059de0c-a87a-4901-a5a5-23008d1f3967","block_type":"box","text":"II-24","page_number":72,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"cc808999-fe3b-4d20-aef8-90e7a4917546","block_type":"box","text":"NM1026U-6033243-72/221","page_number":72,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"28c891c7-8d58-4e26-baf8-523bc8ea657d","block_type":"box","text":"respect to the transaction, but there can be no guarantee that the Fund will be successful in enforcing","page_number":73,"box":{"x":117,"y":87,"width":758,"height":12}},{"id":"a2786e8e-dce3-4009-8ac6-16133b5c4d9c","block_type":"box","text":"such remedies. The market for interest rate swaps is relatively liquid in comparison with other similar","page_number":73,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"372f7ad9-b2d9-477f-9f55-f9c077321cc6","block_type":"box","text":"instruments traded in the interbank market. A Fund may be limited in its ability to enter into certain","page_number":73,"box":{"x":117,"y":118,"width":732,"height":12}},{"id":"4673a729-5a17-4e3a-b0c1-84dc8b783e25","block_type":"box","text":"interest rate derivatives due to applicable income tax requirements.","page_number":73,"box":{"x":117,"y":134,"width":503,"height":11}},{"id":"7afa9f71-328e-471d-9c90-aa620d8fb32e","block_type":"box","text":"Interest rate swaps are transactions in which each party makes periodic interest payments based on a","page_number":73,"box":{"x":117,"y":163,"width":762,"height":12}},{"id":"5c5f9a44-ddef-482d-a326-6d44519a5df8","block_type":"box","text":"fixed or variable interest rate, index or asset in return for periodic payments from its counterparty based","page_number":73,"box":{"x":116,"y":178,"width":772,"height":12}},{"id":"30380f92-3d23-4ca1-ad63-a9d75549b09e","block_type":"box","text":"on a different fixed or variable interest rate, index or asset.","page_number":73,"box":{"x":116,"y":194,"width":439,"height":11}},{"id":"7dba4992-4291-4b87-b781-38b5c992f8f4","block_type":"box","text":"The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls","page_number":73,"box":{"x":116,"y":223,"width":746,"height":12}},{"id":"3ee30638-5297-4a62-bc6e-ad7366df0a19","block_type":"box","text":"below a predetermined interest rate, to receive payments of interest on a notional principal amount","page_number":73,"box":{"x":117,"y":239,"width":736,"height":12}},{"id":"d5983d30-c179-44d3-9462-4e1be5a935f3","block_type":"box","text":"from the party selling such interest rate floor.","page_number":73,"box":{"x":116,"y":254,"width":337,"height":12}},{"id":"043e291d-6a1a-40f3-9650-18d64e6dda6e","block_type":"box","text":"The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index rises","page_number":73,"box":{"x":116,"y":283,"width":746,"height":12}},{"id":"659d4413-df72-4d3e-af0e-dd2ad0121fe4","block_type":"box","text":"above a predetermined interest rate, to receive payments of interest on a notional principal amount","page_number":73,"box":{"x":116,"y":299,"width":739,"height":12}},{"id":"6fe9a6a4-471e-424c-b854-db443d4a8ccb","block_type":"box","text":"from the party selling such interest rate cap.","page_number":73,"box":{"x":116,"y":314,"width":331,"height":12}},{"id":"147e1107-cfd9-42f0-966d-92e7db128e35","block_type":"box","text":"A Fund may enter into an interest rate swap to effectively exchange with another party their respective","page_number":73,"box":{"x":116,"y":344,"width":764,"height":12}},{"id":"eac4c0f7-95cf-47bc-9806-5be5d982d38e","block_type":"box","text":"commitments to pay or receive interest,","page_number":73,"box":{"x":116,"y":359,"width":298,"height":12}},{"id":"ddd10f93-3a1f-4e16-b0e7-a088e06a51f6","block_type":"box","text":"e.g.","page_number":73,"box":{"x":415,"y":362,"width":26,"height":9}},{"id":"05348845-861c-4ead-9cd5-847099a2c62b","block_type":"box","text":", an exchange of fixed rate payments for floating rate","page_number":73,"box":{"x":444,"y":359,"width":396,"height":12}},{"id":"790f8af0-b514-4ac4-adae-0a9ba87b0da7","block_type":"box","text":"payments. For example, if a Fund holds a mortgage-backed security with an interest rate that is reset","page_number":73,"box":{"x":117,"y":375,"width":755,"height":12}},{"id":"4f5fdcc1-5e60-4fe0-98a6-9800f2f09100","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":73,"box":{"x":116,"y":390,"width":748,"height":12}},{"id":"ac336f14-097b-4266-a5a1-c87bddc7e830","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":73,"box":{"x":117,"y":406,"width":755,"height":12}},{"id":"5128aee4-0ab4-4c38-af57-1827e42ae83c","block_type":"box","text":"the mortgage-backed security due to rising interest rates but would also limit its ability to benefit from","page_number":73,"box":{"x":116,"y":421,"width":753,"height":12}},{"id":"2489d4cf-5615-4dda-8ebb-606cb12fe971","block_type":"box","text":"falling interest rates. Conversely, if a Fund holds a mortgage-backed security with an interest rate that","page_number":73,"box":{"x":116,"y":437,"width":761,"height":12}},{"id":"f7b794b4-c67f-4946-93f7-ccbbabf93cc5","block_type":"box","text":"is reset every week and it would like to lock in what","page_number":73,"box":{"x":117,"y":452,"width":383,"height":12}},{"id":"15aa3c5d-2465-4022-a1c2-8a477319b499","block_type":"box","text":"it believes to be a high interest rate for one year, it","page_number":73,"box":{"x":501,"y":452,"width":377,"height":12}},{"id":"681f35c6-a174-49b2-ae36-c3fb523cb75d","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":73,"box":{"x":117,"y":468,"width":746,"height":12}},{"id":"0b318383-3e6b-4db9-aab7-5fa39ae05fd5","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":73,"box":{"x":117,"y":483,"width":733,"height":12}},{"id":"b956aaac-06da-48a6-aa0e-f6921ac2fec4","block_type":"box","text":"falling interest rates and may permit the Fund to enhance its income through the positive differential","page_number":73,"box":{"x":116,"y":499,"width":745,"height":12}},{"id":"90ba1180-aae7-4692-96c5-6ad16c9a66f8","block_type":"box","text":"between one week and one year interest rates, but would preclude it from taking full advantage of","page_number":73,"box":{"x":117,"y":514,"width":729,"height":12}},{"id":"b7ae44e2-2a8c-41c9-a482-f846a1801cf0","block_type":"box","text":"rising interest rates.","page_number":73,"box":{"x":117,"y":530,"width":150,"height":12}},{"id":"c72c1d20-9bc5-415b-991f-aff37d6f5ece","block_type":"box","text":"Gains from transactions in interest rate swaps distributed to shareholders will be taxable as ordinary","page_number":73,"box":{"x":117,"y":559,"width":746,"height":12}},{"id":"9bd3eddb-fbb6-4f37-a28e-0e3e0a677529","block_type":"box","text":"income or, in certain circumstances, as long term capital gains to shareholders.","page_number":73,"box":{"x":117,"y":575,"width":593,"height":12}},{"id":"8946fe03-92f8-4b60-97ff-3efcb9137ade","block_type":"box","text":"Interest rate swaps and interest rate caps and floors may be subject to correlation risk, leverage risk,","page_number":73,"box":{"x":117,"y":604,"width":751,"height":12}},{"id":"5b9eb8b0-bb08-44a1-ba18-127cda4e19a6","block_type":"box","text":"illiquidity risk and market risk. See “— Risk Factors in Derivatives” above.","page_number":73,"box":{"x":117,"y":619,"width":549,"height":12}},{"id":"ec445a8b-3272-4c35-bbb0-ec3e2fb743e5","block_type":"box","text":"Total Return Swaps.","page_number":73,"box":{"x":118,"y":648,"width":155,"height":12}},{"id":"77547a57-74cd-40a7-b68b-cb529f78939d","block_type":"box","text":"Total return swaps are contracts in which one party agrees to make periodic","page_number":73,"box":{"x":273,"y":649,"width":570,"height":12}},{"id":"7fb34508-20b1-435d-80ba-d075f9f85952","block_type":"box","text":"payments to the other party based on the return of the assets underlying the contract in exchange for","page_number":73,"box":{"x":117,"y":664,"width":750,"height":12}},{"id":"721e1ea8-b245-47d1-8b16-33e77abdfb68","block_type":"box","text":"periodic payments based on a fixed or variable interest rate or the total return from different underlying","page_number":73,"box":{"x":117,"y":679,"width":759,"height":13}},{"id":"508f0b8d-c997-4914-8ce9-efd5fb5a3ee0","block_type":"box","text":"assets. The return of the assets underlying the contract includes both the income generated by the","page_number":73,"box":{"x":116,"y":695,"width":732,"height":12}},{"id":"1ed4caae-7355-4de6-a8f5-3291a453efd7","block_type":"box","text":"asset and the change in market value of the asset. The asset underlying the contract may include a","page_number":73,"box":{"x":116,"y":710,"width":737,"height":13}},{"id":"12e32b72-0512-43ab-b473-a444e6143414","block_type":"box","text":"specified security, basket of securities or securities indices. Total return swaps on a specified security,","page_number":73,"box":{"x":116,"y":726,"width":757,"height":12}},{"id":"7ffb8005-8c52-4068-9935-cc0de21c41ad","block_type":"box","text":"basket of securities or securities indices may sometimes be referred to as “contracts for difference.”","page_number":73,"box":{"x":117,"y":741,"width":738,"height":13}},{"id":"225ee290-eb12-4db6-af16-ec2cc59fa584","block_type":"box","text":"Total return swaps may be used to obtain exposure to a security or market without owning or taking","page_number":73,"box":{"x":116,"y":771,"width":738,"height":12}},{"id":"683287db-5cd4-4a76-820e-1256cd1a111f","block_type":"box","text":"physical custody of such security or investing directly in such market. Upon entering into a total return","page_number":73,"box":{"x":117,"y":786,"width":752,"height":12}},{"id":"bb7932bf-8d47-4650-913b-a541fa7b8e11","block_type":"box","text":"swap, a Fund is required to deposit initial margin but the parties do not exchange the notional amount.","page_number":73,"box":{"x":116,"y":802,"width":757,"height":12}},{"id":"8ba0aedd-dcda-41aa-85a5-bd498aff927c","block_type":"box","text":"As a result, total return swaps may effectively add leverage to the Fund’s portfolio because the Fund","page_number":73,"box":{"x":116,"y":817,"width":744,"height":12}},{"id":"aff07323-e4dc-4328-9ce5-ac46f9f81a01","block_type":"box","text":"would be subject to investment exposure on the notional amount of the swap.","page_number":73,"box":{"x":116,"y":833,"width":580,"height":12}},{"id":"907abec9-053c-46a3-89c8-bb6de92da489","block_type":"box","text":"Total return swaps are subject to significant correlation risk, leverage risk, illiquidity risk, market risk","page_number":73,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"0a3a8327-f03d-4cdf-9666-35318f1e0e4d","block_type":"box","text":"and counterparty risk. See “— Risk Factors in Derivatives” above.","page_number":73,"box":{"x":116,"y":877,"width":493,"height":13}},{"id":"38a068d7-57f7-4574-845a-1813a4d2a2ed","block_type":"box","text":"II-25","page_number":73,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"253394c1-bf96-4720-942d-e649ab79d5f7","block_type":"box","text":"NM1026U-6033243-73/221","page_number":73,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e7a87150-fb5b-4069-a7a8-0bd44d72fe87","block_type":"box","text":"Options.","page_number":74,"box":{"x":117,"y":87,"width":66,"height":12}},{"id":"87383f1e-bb20-4b54-aeee-8a8b6d020d4f","block_type":"box","text":"Options on Securities and Securities Indices.","page_number":74,"box":{"x":117,"y":110,"width":337,"height":12}},{"id":"3ec9c766-6523-48eb-9ad7-bb49eca920d0","block_type":"box","text":"A Fund may engage in transactions in options on","page_number":74,"box":{"x":454,"y":110,"width":370,"height":12}},{"id":"c8f601bc-7125-4771-b36b-e807fc6d0c64","block_type":"box","text":"individual securities, baskets of securities or securities indices, or particular measurements of value or","page_number":74,"box":{"x":117,"y":126,"width":761,"height":12}},{"id":"ad6c9671-b000-4481-94b4-7fdb3d4531fe","block_type":"box","text":"rates, such as an index of the price of treasury securities or an index representative of short-term","page_number":74,"box":{"x":117,"y":141,"width":724,"height":12}},{"id":"40b2b201-07c7-4d1c-8f42-c9213b5cd3f3","block_type":"box","text":"interest rates. Such investments may be made on exchanges and in the OTC markets. In general,","page_number":74,"box":{"x":117,"y":157,"width":732,"height":12}},{"id":"a33df3a8-3996-4828-aece-b3199133565a","block_type":"box","text":"exchange-traded options have standardized exercise prices and expiration dates and require the","page_number":74,"box":{"x":116,"y":172,"width":723,"height":12}},{"id":"1d950344-b404-4fde-8de3-b59955bee675","block_type":"box","text":"parties to post margin against their obligations, and the performance of the parties’ obligations in","page_number":74,"box":{"x":117,"y":188,"width":720,"height":12}},{"id":"9cec9394-032e-4985-a772-704c0f29d29a","block_type":"box","text":"connection with such options is guaranteed by the exchange or a related clearing corporation. OTC","page_number":74,"box":{"x":116,"y":203,"width":742,"height":12}},{"id":"9a08e52f-3545-4cd4-869f-c9bb7aeda175","block_type":"box","text":"options have more flexible terms negotiated between the buyer and the seller, but are subject to","page_number":74,"box":{"x":116,"y":219,"width":717,"height":12}},{"id":"b3585e0d-f082-401e-8114-ae588db4b6ad","block_type":"box","text":"greater credit risk. OTC options also involve greater illiquidity risk.","page_number":74,"box":{"x":116,"y":234,"width":493,"height":12}},{"id":"ed51b3a5-d3fa-4275-8838-4b5905a6e878","block_type":"box","text":"A Fund may also engage in transactions in options which have additional features that result in","page_number":74,"box":{"x":116,"y":265,"width":709,"height":12}},{"id":"43abc1c1-949b-436d-a857-a6875a34bea5","block_type":"box","text":"different payment structures and/or expirations (commonly referred to as exotic options). For example,","page_number":74,"box":{"x":116,"y":281,"width":765,"height":12}},{"id":"feafedb6-6ff7-43da-921a-bcbb62721b94","block_type":"box","text":"barrier options are exotic options that can only be exercised (or automatically expire) if the price of the","page_number":74,"box":{"x":117,"y":296,"width":761,"height":12}},{"id":"ff0cee95-9a96-4bf5-956d-dced569ada85","block_type":"box","text":"underlying asset reaches one or more predetermined levels on or before expiration. Binary options are","page_number":74,"box":{"x":117,"y":312,"width":765,"height":12}},{"id":"7b5ceaa6-5cc2-4fbc-a85e-ce4ab248d19f","block_type":"box","text":"another example of exotic options which have a fixed all-or-nothing payout if one or more","page_number":74,"box":{"x":116,"y":327,"width":666,"height":12}},{"id":"15fd7bf8-8181-4604-893f-285845222d0c","block_type":"box","text":"predetermined conditions are met. Exotic options are typically traded in OTC markets.","page_number":74,"box":{"x":117,"y":343,"width":641,"height":12}},{"id":"e25c4dae-cfa7-4009-9ae1-39d4fd7b00bc","block_type":"box","text":"There are several risks associated with transactions in options on securities and indexes. For example,","page_number":74,"box":{"x":116,"y":374,"width":770,"height":12}},{"id":"123b70c3-b6ff-4a1c-aec3-e461e69bf318","block_type":"box","text":"there are significant differences between the securities and options markets that could result in an","page_number":74,"box":{"x":116,"y":389,"width":731,"height":12}},{"id":"bae396da-e0aa-457a-b444-88dee4dbc339","block_type":"box","text":"imperfect correlation between these markets, causing a given transaction not to achieve its objectives.","page_number":74,"box":{"x":117,"y":405,"width":763,"height":12}},{"id":"2de3a980-802e-43bd-ba57-33533f8c536b","block_type":"box","text":"In addition, a liquid market for particular options, whether traded OTC or on a national securities","page_number":74,"box":{"x":117,"y":420,"width":716,"height":12}},{"id":"c9fcbb79-5245-4e19-ab51-8f844ec5f484","block_type":"box","text":"exchange (“Exchange”) may be absent for reasons which include the following: there may be","page_number":74,"box":{"x":116,"y":436,"width":695,"height":12}},{"id":"5a77a206-f6c8-4840-9c65-feaeb4646dfd","block_type":"box","text":"insufficient trading interest in certain options; restrictions may be imposed by an Exchange on opening","page_number":74,"box":{"x":117,"y":451,"width":763,"height":12}},{"id":"7d6c4e2e-6589-4c47-ac23-f3c7dbd9df43","block_type":"box","text":"transactions or closing transactions or both; trading halts, suspensions or other restrictions may be","page_number":74,"box":{"x":116,"y":467,"width":737,"height":12}},{"id":"c0db3b29-fafe-4ff2-af6f-3954e8e3da4d","block_type":"box","text":"imposed with respect to particular classes or series of options or underlying securities; unusual or","page_number":74,"box":{"x":117,"y":482,"width":727,"height":12}},{"id":"6396d927-3f7c-4f0c-be56-6773cc4f3fd5","block_type":"box","text":"unforeseen circumstances may interrupt normal operations on an Exchange; the facilities of an","page_number":74,"box":{"x":117,"y":498,"width":708,"height":12}},{"id":"4d97e6ec-abeb-4c1a-85a2-73b3e8486081","block_type":"box","text":"Exchange or the Options Clearing Corporation may not at all times be adequate to handle current","page_number":74,"box":{"x":117,"y":513,"width":728,"height":12}},{"id":"8151abe0-2db0-4c3d-9681-57fd5ae03575","block_type":"box","text":"trading volume; or one or more Exchanges could, for economic or other reasons, decide or be","page_number":74,"box":{"x":116,"y":529,"width":703,"height":12}},{"id":"e320e6ae-ea2e-46e0-ac04-57828be055a3","block_type":"box","text":"compelled at some future date to discontinue the trading of options (or a particular class or series of","page_number":74,"box":{"x":116,"y":544,"width":746,"height":12}},{"id":"d59517c2-ae5a-4f31-98c9-c1720cc73aab","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":74,"box":{"x":116,"y":560,"width":770,"height":12}},{"id":"0483370a-35a2-48b6-be5c-17a9e39fbf30","block_type":"box","text":"to exist, although outstanding options that had been issued by the Options Clearing Corporation as a","page_number":74,"box":{"x":116,"y":575,"width":753,"height":12}},{"id":"2f800acf-b794-4cfd-9735-a22758defb02","block_type":"box","text":"result of trades on that Exchange would continue to be exercisable in accordance with their terms.","page_number":74,"box":{"x":117,"y":591,"width":732,"height":12}},{"id":"54d40e58-3101-4275-a33b-81758b111934","block_type":"box","text":"Each of the options exchanges has established limitations governing the maximum number of call or","page_number":74,"box":{"x":117,"y":622,"width":749,"height":12}},{"id":"d583ab12-3a5f-4189-b8bb-fe696203bce6","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":74,"box":{"x":117,"y":638,"width":764,"height":11}},{"id":"b6f30b30-40c7-4045-8da6-e90d5f788d17","block_type":"box","text":"or in concert with others (regardless of whether such options are written on the same or different","page_number":74,"box":{"x":116,"y":653,"width":720,"height":12}},{"id":"65d7b699-f83d-4da5-a202-b71b6aa980b4","block_type":"box","text":"exchanges or are held or written on one or more accounts or through one or more brokers). Under","page_number":74,"box":{"x":116,"y":668,"width":730,"height":12}},{"id":"ce3f7f91-221f-408e-bd8e-686f3c4edd0c","block_type":"box","text":"these limitations, option positions of all investment companies advised by the Manager are combined","page_number":74,"box":{"x":116,"y":684,"width":749,"height":12}},{"id":"cd2b1597-440a-4773-85c0-3aaf0c03cbda","block_type":"box","text":"for purposes of these limits. Pursuant to these limitations, an exchange may order the liquidation of","page_number":74,"box":{"x":116,"y":699,"width":736,"height":13}},{"id":"f6b20380-43e1-43a4-86b2-98c06261032d","block_type":"box","text":"positions and may impose other sanctions or restrictions. These position limits may restrict the number","page_number":74,"box":{"x":117,"y":715,"width":762,"height":12}},{"id":"70c07296-ba9f-49f0-aca0-a4e58988ddbb","block_type":"box","text":"of listed options that a Fund may buy or sell.","page_number":74,"box":{"x":116,"y":730,"width":328,"height":13}},{"id":"8ded0812-9ac8-4280-bf57-33e8d0cd1cb1","block_type":"box","text":"Call Options.","page_number":74,"box":{"x":117,"y":761,"width":93,"height":12}},{"id":"25d53e76-698b-4052-a49f-ff7735ce76e3","block_type":"box","text":"A Fund may purchase call options on any of the types of securities or instruments in","page_number":74,"box":{"x":217,"y":761,"width":623,"height":13}},{"id":"0f6bd075-57b3-400c-acb3-d27de6fda634","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":74,"box":{"x":116,"y":777,"width":743,"height":12}},{"id":"5af1d5d2-f3cc-45b8-8a98-2527dc11e7ac","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":74,"box":{"x":116,"y":793,"width":762,"height":12}},{"id":"1b4dda6f-9fe2-4d8d-ae60-0a0fa33ecc16","block_type":"box","text":"purchase and sell call options on indices. Index options are similar to options on securities except that,","page_number":74,"box":{"x":117,"y":808,"width":759,"height":12}},{"id":"bffa95d0-65b1-4479-8f28-afdd06c071cd","block_type":"box","text":"rather than taking or making delivery of securities underlying the option at a specified price upon","page_number":74,"box":{"x":117,"y":823,"width":712,"height":13}},{"id":"b7c2d8fd-0488-4a96-a4b7-a49a85f4adef","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":74,"box":{"x":116,"y":839,"width":745,"height":12}},{"id":"8f059252-8f5c-4807-ae44-f2c56a91c8bc","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":74,"box":{"x":117,"y":854,"width":716,"height":13}},{"id":"912afaf0-8ad6-4617-98e0-c427e8001dde","block_type":"box","text":"II-26","page_number":74,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0fdc1edf-8bc1-4be1-b5bb-22a89f56ed4e","block_type":"box","text":"NM1026U-6033243-74/221","page_number":74,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d8ef6abb-765a-44ba-a5d1-87fa9f8830b2","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":75,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"a351c023-372c-49dd-b957-71b82154b441","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":75,"box":{"x":116,"y":102,"width":765,"height":13}},{"id":"c0292910-c15c-4faa-b9b5-46b7d720ba73","block_type":"box","text":"or (ii) greater than the exercise price of the call written provided the difference is maintained by the","page_number":75,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"869f9dd0-491a-452f-b5e1-f21ebf0c28ff","block_type":"box","text":"Fund in assets which are not considered illiquid investments under the Funds’ Liquidity Program (as","page_number":75,"box":{"x":117,"y":134,"width":745,"height":12}},{"id":"ce025dbb-e5e4-49de-8f20-dcf9f79a1e75","block_type":"box","text":"defined below) (“liquid assets”) designated on the Manager’s or the sub-adviser’s books and records to","page_number":75,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"10d5aa25-913c-48e9-a2b1-7a64a2439223","block_type":"box","text":"the extent required by Commission guidelines.","page_number":75,"box":{"x":116,"y":165,"width":350,"height":12}},{"id":"ab843f3f-7ed5-43ee-851e-33875a6b1a1a","block_type":"box","text":"A Fund may write (","page_number":75,"box":{"x":116,"y":196,"width":140,"height":12}},{"id":"47ee5447-f9c9-4976-9aac-dd2369c3c98a","block_type":"box","text":"i.e.","page_number":75,"box":{"x":257,"y":196,"width":21,"height":9}},{"id":"d4408763-4492-47b7-9ab3-62f453e36043","block_type":"box","text":", sell) covered call options on the securities or instruments in which it may invest","page_number":75,"box":{"x":281,"y":196,"width":599,"height":12}},{"id":"802ffa83-6ba8-4f2b-9a50-a2c18d5c53b4","block_type":"box","text":"and to enter into closing purchase transactions with respect to certain of such options. A covered call","page_number":75,"box":{"x":116,"y":211,"width":754,"height":12}},{"id":"3bf4826f-3f88-426e-afb1-c9e82198f09b","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":75,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"755e991a-a69b-4e6c-9811-3836b241f612","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":75,"box":{"x":116,"y":242,"width":747,"height":12}},{"id":"8b8a42a3-ce0e-4b8e-9dd2-53407bab264a","block_type":"box","text":"principal reason for writing call options is the attempt to realize, through the receipt of premiums, a","page_number":75,"box":{"x":117,"y":258,"width":733,"height":12}},{"id":"38a365c9-58b9-4509-b9f2-bc2fad8e7734","block_type":"box","text":"greater return than would be realized on the securities alone. By writing covered call options, a Fund","page_number":75,"box":{"x":116,"y":273,"width":750,"height":12}},{"id":"30721f25-065b-4741-bf99-f3c424bb4357","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":75,"box":{"x":116,"y":289,"width":763,"height":12}},{"id":"7bf415ae-7585-4ded-95ff-0b5cad2b3e8e","block_type":"box","text":"security above the option exercise price. In addition, a Fund’s ability to sell the underlying security will","page_number":75,"box":{"x":116,"y":304,"width":758,"height":12}},{"id":"ab684197-853a-4121-9a21-fc12ecbde16c","block_type":"box","text":"be limited while the option is in effect unless the Fund enters into a closing purchase transaction. A","page_number":75,"box":{"x":117,"y":320,"width":738,"height":12}},{"id":"33ec294b-17b4-4839-8ce8-c164926bd7eb","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":75,"box":{"x":116,"y":335,"width":748,"height":12}},{"id":"3f91589d-cc15-441d-9f60-69f4b70791cb","block_type":"box","text":"offsetting purchase of an identical option prior to the expiration of the option it has written. Covered call","page_number":75,"box":{"x":116,"y":351,"width":768,"height":12}},{"id":"670b0df8-ed90-42bd-a944-0f4bd37fe49a","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":75,"box":{"x":116,"y":366,"width":736,"height":12}},{"id":"04b51b32-0614-4565-a5be-b4c76ff6be3b","block_type":"box","text":"underlying security declining.","page_number":75,"box":{"x":117,"y":382,"width":219,"height":12}},{"id":"d0dff92d-fbb0-4d3b-ba02-23d64461222d","block_type":"box","text":"A Fund may write (","page_number":75,"box":{"x":116,"y":413,"width":140,"height":12}},{"id":"e046c9d2-6da5-4b91-a97b-d832fd4240a5","block_type":"box","text":"i.e.","page_number":75,"box":{"x":257,"y":413,"width":21,"height":9}},{"id":"74ce24bf-1d19-4ff0-893e-028653182012","block_type":"box","text":", sell) uncovered call options on securities or instruments in which it may invest","page_number":75,"box":{"x":281,"y":413,"width":590,"height":12}},{"id":"936ba503-22e6-4b46-a319-982fc8869a95","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":75,"box":{"x":117,"y":428,"width":763,"height":12}},{"id":"a234be8f-a6b4-4126-b8f2-6e49b008bde0","block_type":"box","text":"realize income without committing capital to the ownership of the underlying securities or instruments.","page_number":75,"box":{"x":117,"y":444,"width":758,"height":12}},{"id":"8ac08d44-e991-4e6e-b6ea-ea530cf9e4f9","block_type":"box","text":"When writing uncovered call options, a Fund must deposit and maintain sufficient margin with the","page_number":75,"box":{"x":116,"y":459,"width":727,"height":12}},{"id":"ee48feb7-e41c-43fc-92ab-67e87f5212ba","block_type":"box","text":"broker-dealer through which it made the uncovered call option as collateral to ensure that the securities","page_number":75,"box":{"x":117,"y":475,"width":771,"height":12}},{"id":"7f7c1597-a92d-4e27-980d-b8c9cf765526","block_type":"box","text":"can be purchased for delivery if and when the option is exercised. During periods of declining","page_number":75,"box":{"x":116,"y":490,"width":697,"height":12}},{"id":"60d6b87a-f483-42e1-b182-90ed6b0eef8d","block_type":"box","text":"securities prices or when prices are stable, writing uncovered calls can be a profitable strategy to","page_number":75,"box":{"x":116,"y":506,"width":724,"height":12}},{"id":"06a7154e-5c0d-40b0-8d1e-1bd25b86c694","block_type":"box","text":"increase a Fund’s income with minimal capital risk. Uncovered calls are riskier than covered calls","page_number":75,"box":{"x":117,"y":521,"width":724,"height":12}},{"id":"c08911e1-d351-40bb-a141-3ede0210e8fc","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":75,"box":{"x":117,"y":537,"width":771,"height":12}},{"id":"7d70e24f-b75d-4797-8657-e405864cecab","block_type":"box","text":"have speculative characteristics and the potential for loss is unlimited. When an uncovered call is","page_number":75,"box":{"x":117,"y":552,"width":725,"height":12}},{"id":"d6e1b9de-1372-439a-b0bd-1d8ab5e5e456","block_type":"box","text":"exercised, a Fund must purchase the underlying security to meet its call obligation. There is also a risk,","page_number":75,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"58b7140e-329a-42e7-b6c2-94ffc9e06c92","block_type":"box","text":"especially with preferred and debt securities that lack sufficient liquidity, that the securities may not be","page_number":75,"box":{"x":116,"y":583,"width":760,"height":12}},{"id":"c6990aea-9b4d-40ff-9284-448f3e4ef5f7","block_type":"box","text":"available for purchase. If the purchase price exceeds the exercise price, a Fund will lose the difference.","page_number":75,"box":{"x":116,"y":599,"width":772,"height":12}},{"id":"a225bc0d-9c71-41ca-9ab4-95039aa464f7","block_type":"box","text":"Put Options.","page_number":75,"box":{"x":116,"y":630,"width":97,"height":12}},{"id":"8562e2ed-c3b7-4545-b90e-d58f45bc92c0","block_type":"box","text":"A Fund may purchase put options to seek to hedge against a decline in the value of its","page_number":75,"box":{"x":213,"y":630,"width":648,"height":12}},{"id":"099af236-9848-42ab-bff9-2e8eb0d26d5c","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":75,"box":{"x":116,"y":645,"width":770,"height":12}},{"id":"3a09d632-461e-4ac1-a226-b122266a7153","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":75,"box":{"x":116,"y":661,"width":754,"height":12}},{"id":"e7a460fe-217e-44a3-b15e-47f3982e02c5","block_type":"box","text":"the market value of the securities or instruments until the put option expires. The amount of any","page_number":75,"box":{"x":116,"y":676,"width":709,"height":12}},{"id":"6cdbc913-38eb-4a0f-b084-2bebd08c5213","block_type":"box","text":"appreciation in the value of the underlying securities or instruments will be partially offset by the","page_number":75,"box":{"x":116,"y":692,"width":708,"height":12}},{"id":"25d60928-3061-4eb5-9428-e841a6fcd368","block_type":"box","text":"amount of the premium paid for the put option and any related transaction costs. Prior to its expiration,","page_number":75,"box":{"x":116,"y":707,"width":758,"height":12}},{"id":"123a3fbe-63b8-44d5-a02b-39365f8880c5","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":75,"box":{"x":116,"y":723,"width":737,"height":12}},{"id":"d0b17dbc-ab96-4501-9b54-edb37b2fba4c","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":75,"box":{"x":116,"y":738,"width":753,"height":12}},{"id":"08f9daff-2e76-4290-aa16-b03ea433cc24","block_type":"box","text":"transaction costs. A closing sale transaction cancels out a Fund’s position as the purchaser of an","page_number":75,"box":{"x":116,"y":754,"width":719,"height":12}},{"id":"8516663e-d4e7-4f53-bb22-175381f93c4a","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":75,"box":{"x":116,"y":769,"width":737,"height":12}},{"id":"9f23d5ef-2c71-4502-9bac-b218c061b64b","block_type":"box","text":"purchased. A Fund also may purchase uncovered put options.","page_number":75,"box":{"x":117,"y":785,"width":460,"height":12}},{"id":"373ca515-7e08-4daa-a4b4-2dfb48af3e80","block_type":"box","text":"A Fund also may write (","page_number":75,"box":{"x":116,"y":816,"width":176,"height":12}},{"id":"e5827722-0531-41f6-bd2a-b522564f9a18","block_type":"box","text":"i.e.","page_number":75,"box":{"x":293,"y":816,"width":20,"height":9}},{"id":"4110b856-72a0-444b-8c00-d17636d15a0f","block_type":"box","text":", sell) put options on the types of securities or instruments that may be held","page_number":75,"box":{"x":316,"y":816,"width":557,"height":12}},{"id":"72090264-d1ca-4643-b2fd-b0385a08754b","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":75,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"d2e6ea38-2a65-44a3-ba63-ab55efd64d40","block_type":"box","text":"A Fund also may write (","page_number":75,"box":{"x":116,"y":862,"width":172,"height":12}},{"id":"7e0b20f6-a22f-40fd-955c-63adc08e14b3","block_type":"box","text":"i.e.","page_number":75,"box":{"x":289,"y":862,"width":20,"height":10}},{"id":"0c47f43a-9ebe-4572-a0ea-68a57acdc0c6","block_type":"box","text":", sell) uncovered put options on securities or instruments in which it may invest","page_number":75,"box":{"x":312,"y":862,"width":575,"height":12}},{"id":"a83358ab-b2f9-4beb-a257-ae4500fa904b","block_type":"box","text":"but with respect to which the Fund does not current","page_number":75,"box":{"x":117,"y":878,"width":372,"height":12}},{"id":"c03b7fbe-86b4-43a0-9bab-f3f07ff92415","block_type":"box","text":"ly have a corresponding short position or has not","page_number":75,"box":{"x":490,"y":878,"width":359,"height":12}},{"id":"e11601a3-cc1e-47d2-a627-2e678a8f47d2","block_type":"box","text":"II-27","page_number":75,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e9a9f475-7ed4-4a03-8cd5-d53b2064dc18","block_type":"box","text":"NM1026U-6033243-75/221","page_number":75,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"19b15b29-b6be-41af-936d-6e3eeb6c28fc","block_type":"box","text":"deposited as collateral cash equal to the exercise va","page_number":76,"box":{"x":116,"y":87,"width":380,"height":12}},{"id":"6b23a93c-9886-42fe-bd3c-d040d06e0895","block_type":"box","text":"lue of the put option with","page_number":76,"box":{"x":498,"y":87,"width":182,"height":12}},{"id":"8aebf399-68c1-4a42-8729-0dcdb7bf9d66","block_type":"box","text":"the broker-dealer through","page_number":76,"box":{"x":680,"y":87,"width":190,"height":12}},{"id":"4f2cab51-10ce-40e5-8975-b6db0130785b","block_type":"box","text":"which it made the uncovered put opt","page_number":76,"box":{"x":116,"y":103,"width":264,"height":11}},{"id":"12a674dd-5ac0-4c0e-b240-bd95ed05b363","block_type":"box","text":"ion. The principal reason for writing uncovered put options is to","page_number":76,"box":{"x":381,"y":102,"width":461,"height":13}},{"id":"b622e30c-d46d-40ce-bb42-cf52e4f49e2d","block_type":"box","text":"receive premium income and to acquire such securities","page_number":76,"box":{"x":117,"y":118,"width":400,"height":12}},{"id":"c1ca698c-8865-40cc-aea0-c2265293fdb9","block_type":"box","text":"or instruments at a net cost below the current","page_number":76,"box":{"x":517,"y":118,"width":339,"height":10}},{"id":"9d0fdf8c-48af-46d6-8cc0-7ce24018481c","block_type":"box","text":"market value. A Fund has the obligation to buy the","page_number":76,"box":{"x":117,"y":134,"width":370,"height":12}},{"id":"f6f1784d-5d7b-4ecb-9401-8a4d18a7a044","block_type":"box","text":"securities or instruments at an agreed upon price if","page_number":76,"box":{"x":488,"y":134,"width":373,"height":12}},{"id":"621e0f06-0790-4e82-aa4d-dd7e5f40bc3e","block_type":"box","text":"the price of the securities or instruments decreases bel","page_number":76,"box":{"x":116,"y":149,"width":397,"height":12}},{"id":"539b8765-fb02-41f9-9703-02126f6a1187","block_type":"box","text":"ow the exercise price. If the price of the securities","page_number":76,"box":{"x":515,"y":149,"width":364,"height":12}},{"id":"db995384-13b9-4d8e-855a-b41984af9c01","block_type":"box","text":"or instruments increases during the option period,","page_number":76,"box":{"x":116,"y":165,"width":360,"height":12}},{"id":"03afe04c-6083-4e77-bb40-eeb918cb3fa5","block_type":"box","text":"the option will expire worthless and a Fund will retain","page_number":76,"box":{"x":477,"y":165,"width":393,"height":11}},{"id":"2fa722ff-54de-4b6c-9d4d-037156218dbd","block_type":"box","text":"the premium and will not have to purchase the securiti","page_number":76,"box":{"x":116,"y":180,"width":392,"height":12}},{"id":"38dbb846-1cd0-4158-bc0a-d21957e4b80c","block_type":"box","text":"es or instruments at the exercise price.","page_number":76,"box":{"x":510,"y":180,"width":286,"height":12}},{"id":"61d228d7-08e6-4745-bf22-077a094935b1","block_type":"box","text":"Options on Government National Mortgage Association (“GNMA”) Certificates.","page_number":76,"box":{"x":117,"y":211,"width":586,"height":12}},{"id":"c8405dc8-723a-4325-9761-9addd26cd00b","block_type":"box","text":"The following","page_number":76,"box":{"x":704,"y":211,"width":103,"height":12}},{"id":"d9c1e3c9-4b5f-4893-9621-fe1b58d2e1da","block_type":"box","text":"information relates to the unique characteristics of options on GNMA Certificates. Since the remaining","page_number":76,"box":{"x":117,"y":227,"width":759,"height":12}},{"id":"a44c5779-1e47-4693-88bd-e40251b7d17c","block_type":"box","text":"principal balance of GNMA Certificates declines each month as a result of mortgage payments, a","page_number":76,"box":{"x":117,"y":242,"width":725,"height":12}},{"id":"f63a93c6-e855-4513-8496-389fe20f0f56","block_type":"box","text":"Fund, as a writer of a GNMA call holding GNMA Certificates as “cover” to satisfy its delivery obligation","page_number":76,"box":{"x":117,"y":258,"width":761,"height":12}},{"id":"381545bb-f800-4d9e-9f99-689ea10b3bf9","block_type":"box","text":"in the event of exercise, may find that the GNMA Certificates it holds no longer have a sufficient","page_number":76,"box":{"x":117,"y":273,"width":714,"height":12}},{"id":"7cbbe717-d2a5-4246-bda7-a240cef9e561","block_type":"box","text":"remaining principal balance for this purpose. Should this occur, a Fund will purchase additional GNMA","page_number":76,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"ed7fe993-ac94-4323-bada-839a3adf8fec","block_type":"box","text":"Certificates from the same pool (if obtainable) or other GNMA Certificates in the cash market in order","page_number":76,"box":{"x":117,"y":304,"width":754,"height":12}},{"id":"6211a78f-8b2c-47ce-b21c-e18ac5015766","block_type":"box","text":"to maintain its “cover.”","page_number":76,"box":{"x":116,"y":320,"width":170,"height":9}},{"id":"af574e8a-f8f7-4c6b-9679-e79d3b83fa41","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":76,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"ff62ac9b-9607-4d31-b6c1-609a9870f105","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":76,"box":{"x":117,"y":366,"width":724,"height":12}},{"id":"3e62479f-b7fb-4940-8b32-02faa4d34ba4","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":76,"box":{"x":116,"y":382,"width":765,"height":12}},{"id":"bb4afae0-8507-4079-9de1-593e9fb6dc08","block_type":"box","text":"occur, a Fund will no longer be covered, and the Fund will either enter into a closing purchase","page_number":76,"box":{"x":116,"y":397,"width":701,"height":12}},{"id":"ea3c5118-43bb-420b-9244-4c3e348d8a9d","block_type":"box","text":"transaction or replace such Certificate with a certificate that represents cover. When a Fund closes its","page_number":76,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"913aa05d-4f09-4584-af41-d7a48cc7aecd","block_type":"box","text":"position or replaces such Certificate, it may realize an unanticipated loss and incur transaction costs.","page_number":76,"box":{"x":117,"y":428,"width":751,"height":12}},{"id":"e394fcaa-340f-41d0-8b8c-f44384e658db","block_type":"box","text":"Options on Swaps (“Swaptions”).","page_number":76,"box":{"x":117,"y":459,"width":243,"height":12}},{"id":"6f488c08-047d-464e-b095-7abbf0afd121","block_type":"box","text":"A swaption gives a counterparty the option (but not the obligation) to","page_number":76,"box":{"x":362,"y":459,"width":517,"height":12}},{"id":"1adee89c-7610-43ba-9075-8cbc3c8a96b5","block_type":"box","text":"enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap","page_number":76,"box":{"x":116,"y":475,"width":750,"height":12}},{"id":"02ecaef0-7e94-406a-81f1-39f47172520b","block_type":"box","text":"agreement, at a designated future time on specified terms. A Fund may write (","page_number":76,"box":{"x":116,"y":490,"width":580,"height":12}},{"id":"291d0730-3467-48e3-887c-8b19bc793707","block_type":"box","text":"i.e.","page_number":76,"box":{"x":698,"y":490,"width":20,"height":10}},{"id":"a527307b-6991-4226-8093-e3e0aa896877","block_type":"box","text":", sell) and purchase","page_number":76,"box":{"x":721,"y":490,"width":150,"height":12}},{"id":"2e9e2487-9700-41be-8c46-ec6816b98921","block_type":"box","text":"put and call swaptions. Depending on the terms of the particular option agreement, a Fund will","page_number":76,"box":{"x":117,"y":506,"width":704,"height":12}},{"id":"08963f39-798e-4a00-b043-48855607fb2c","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":76,"box":{"x":116,"y":521,"width":758,"height":12}},{"id":"24fe81fb-1559-4515-aa70-ebdb3793523a","block_type":"box","text":"swaption. When a Fund purchases a swaption, it risks losing only the amount of the premium it has","page_number":76,"box":{"x":116,"y":537,"width":741,"height":12}},{"id":"fc16bda7-91b7-43ba-9954-6a12a420ccb2","block_type":"box","text":"paid should it decide to let the option expire unexercised. However, when a Fund writes a swaption,","page_number":76,"box":{"x":117,"y":552,"width":743,"height":12}},{"id":"dc42fbff-e967-426f-bcfa-de5110904b65","block_type":"box","text":"upon exercise of the option the Fund will become obligated according to the terms of the underlying","page_number":76,"box":{"x":117,"y":568,"width":743,"height":12}},{"id":"f36664e0-3117-4a75-92d7-310de25d47c5","block_type":"box","text":"agreement and the potential for loss may be unlimited. Certain swaptions are permitted, although not","page_number":76,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"19059245-3f34-4a34-9253-a8810b58aa1d","block_type":"box","text":"required, to be cleared.","page_number":76,"box":{"x":117,"y":599,"width":177,"height":12}},{"id":"97f31beb-b16f-4dc5-891a-49a00c76c036","block_type":"box","text":"A Fund will likely enter into these transactions to preserve a return or spread on a particular investment","page_number":76,"box":{"x":116,"y":630,"width":770,"height":12}},{"id":"55782742-a127-4a46-95b2-831e97608281","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":76,"box":{"x":116,"y":645,"width":772,"height":12}},{"id":"e90aad93-7fc6-4c6c-bfd1-2278c8dd67d6","block_type":"box","text":"purchasing at a later date. A Fund generally will use these transactions for hedging purposes, not for","page_number":76,"box":{"x":117,"y":661,"width":746,"height":12}},{"id":"4a0a3d62-1114-42c8-b64b-e8d663044971","block_type":"box","text":"speculation.","page_number":76,"box":{"x":116,"y":676,"width":88,"height":12}},{"id":"7bbd1d09-056b-4fc3-b38b-268bc2146033","block_type":"box","text":"Swaptions may be subject to correlation risk, leverage risk, illiquidity risk and market risk. See “— Risk","page_number":76,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"85975419-55d5-46bb-9a55-e926466cf3c9","block_type":"box","text":"Factors in Derivatives” above.","page_number":76,"box":{"x":117,"y":723,"width":220,"height":9}},{"id":"7c748bcf-a2a2-4f50-ac42-1941516f2d8e","block_type":"box","text":"FLEX Options.","page_number":76,"box":{"x":116,"y":754,"width":107,"height":12}},{"id":"7a975f7f-40ba-4b38-8158-d7e87245712c","block_type":"box","text":"FLEX Options are customized option contracts available through national securities","page_number":76,"box":{"x":231,"y":754,"width":617,"height":12}},{"id":"157ad1fe-28f0-4263-abc8-3f8988f7f73a","block_type":"box","text":"exchanges that are guaranteed for settlement by the Options Clearing Corporation (“OCC”). FLEX","page_number":76,"box":{"x":116,"y":769,"width":729,"height":12}},{"id":"b2758d85-ff79-42ab-8466-8a96c315e5d2","block_type":"box","text":"Options are listed on a U.S. national securities exchange. FLEX Options provide investors with the","page_number":76,"box":{"x":116,"y":785,"width":731,"height":12}},{"id":"699db767-7d2f-46e9-9035-9de393faae77","block_type":"box","text":"ability to customize assets referenced by the options, exercise prices, exercise styles (","page_number":76,"box":{"x":116,"y":800,"width":641,"height":12}},{"id":"a7143e7d-a68f-4c0d-8690-05a0db3bc859","block_type":"box","text":"i.e.","page_number":76,"box":{"x":758,"y":800,"width":20,"height":10}},{"id":"56d7629c-940e-4255-ab3f-a5d7811b66a4","block_type":"box","text":", American","page_number":76,"box":{"x":782,"y":800,"width":84,"height":11}},{"id":"d7ff4f2e-5e06-47d1-9b13-edac9fc95db8","block_type":"box","text":"style, exercisable any time prior to the expiration date, or European-style, exercisable only on the","page_number":76,"box":{"x":116,"y":816,"width":721,"height":12}},{"id":"e1703897-8353-452b-b38f-ff83b5548a30","block_type":"box","text":"option expiration date) and expiration dates, while achieving price discovery in competitive, transparent","page_number":76,"box":{"x":116,"y":831,"width":769,"height":12}},{"id":"6e71f972-1599-491c-999a-3e514c8afc6c","block_type":"box","text":"auctions markets and avoiding the counterparty exposure of OTC options positions. Each option","page_number":76,"box":{"x":116,"y":847,"width":719,"height":12}},{"id":"e24ae195-d4b9-4935-b1c0-c3c53b508dd4","block_type":"box","text":"contract entitles the holder thereof to purchase (for the","page_number":76,"box":{"x":116,"y":862,"width":410,"height":12}},{"id":"83ea38d8-1d89-4f41-b7b7-f8120ada4dc5","block_type":"box","text":"call options) or sell (for the put options) shares","page_number":76,"box":{"x":527,"y":862,"width":349,"height":12}},{"id":"a51133a5-c312-4d1a-a203-d1f960f7f2be","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":76,"box":{"x":116,"y":878,"width":772,"height":12}},{"id":"e250b3a1-455b-44c2-855c-bc32135b1616","block_type":"box","text":"II-28","page_number":76,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ef801be7-a86e-4ca9-86e6-3e2dbf816efb","block_type":"box","text":"NM1026U-6033243-76/221","page_number":76,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"0b33917d-698e-4238-aefb-b003d3aaf3ea","block_type":"box","text":"including both purchased and written put and call options (as further described below). The FLEX","page_number":77,"box":{"x":117,"y":87,"width":726,"height":12}},{"id":"44e36d31-fa54-498c-a718-18076a0885f9","block_type":"box","text":"Options are all European style options, which means that they are exercisable at a predetermined","page_number":77,"box":{"x":116,"y":102,"width":730,"height":13}},{"id":"5f93dba3-63d6-4170-8177-a063b6e97933","block_type":"box","text":"specified price (the “strike price”) only on the FLEX Option’s expiration date.","page_number":77,"box":{"x":116,"y":118,"width":569,"height":12}},{"id":"1de4eaac-df2b-4342-98e7-a80147578b6d","block_type":"box","text":"The OCC guarantees performance by each of the counterparties to the FLEX Options, becoming the","page_number":77,"box":{"x":116,"y":149,"width":752,"height":12}},{"id":"b159fb20-8fd1-4f33-898c-d86acc32f0ef","block_type":"box","text":"“buyer for every seller and the seller for every buyer”, reducing counterparty risk for clearing members","page_number":77,"box":{"x":116,"y":165,"width":762,"height":12}},{"id":"73994856-b7c3-4446-a35f-2b3b67b7ca93","block_type":"box","text":"and options traders. Although guaranteed for settlement by the OCC, FLEX Options are still subject to","page_number":77,"box":{"x":116,"y":180,"width":762,"height":12}},{"id":"8e2d35b6-6e06-49fd-a697-8aee854c3443","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":77,"box":{"x":116,"y":196,"width":760,"height":12}},{"id":"fe50e326-e74e-4643-b165-712c8c5d02b4","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":77,"box":{"x":116,"y":211,"width":759,"height":12}},{"id":"9b0361e5-da0e-43f3-89c2-82d96484cc7a","block_type":"box","text":"will be unable or unwilling to perform its obligations under the FLEX Options contracts.","page_number":77,"box":{"x":116,"y":227,"width":646,"height":12}},{"id":"9ebf9700-dc1c-43fb-84b6-8ddbc5b546a3","block_type":"box","text":"Subject to determination by the Securities Committee of the OCC, adjustments may be made to the","page_number":77,"box":{"x":116,"y":258,"width":744,"height":12}},{"id":"f7128859-af2c-4863-990c-628e479720cc","block_type":"box","text":"FLEX Options for certain events (collectively, “Corporate Actions”) specified in the OCC’s by-laws and","page_number":77,"box":{"x":117,"y":273,"width":760,"height":12}},{"id":"0ee71d31-9601-4ccd-870f-8a7571fa4cc4","block_type":"box","text":"rules: certain stock dividends or distributions, stock splits, reverse stock splits, rights offerings,","page_number":77,"box":{"x":117,"y":289,"width":702,"height":12}},{"id":"bd928c2b-0927-49f5-ad74-e34ad7d660cb","block_type":"box","text":"distributions, reorganizations, recapitalizations, or reclassifications with respect to an underlying","page_number":77,"box":{"x":116,"y":304,"width":715,"height":12}},{"id":"b4ef49fc-8d17-4752-abe9-be832ebd4f1d","block_type":"box","text":"security, or a merger, consolidation, dissolution or liquidation of the issuer of the underlying security.","page_number":77,"box":{"x":116,"y":320,"width":748,"height":12}},{"id":"33ae9f69-3824-42c0-995b-deca5aae7d11","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":77,"box":{"x":116,"y":335,"width":759,"height":12}},{"id":"5a1d1b84-b320-44d6-9730-e4d877955c84","block_type":"box","text":"the OCC’s Securities Committee, in light of the circumstances known to it at the time such","page_number":77,"box":{"x":116,"y":351,"width":673,"height":12}},{"id":"65bf1138-5a95-47e8-bd25-eef1b5ba0710","block_type":"box","text":"determination is made, based on its judgment as to what is appropriate for the protection of investors","page_number":77,"box":{"x":116,"y":366,"width":754,"height":12}},{"id":"ff20f8f3-7273-4584-8c9a-8050855d56e1","block_type":"box","text":"and the public interest, taking into account such factors as fairness to holders and writers (or","page_number":77,"box":{"x":116,"y":382,"width":691,"height":12}},{"id":"a8b11114-7779-4c9d-9af5-d4f72ac62772","block_type":"box","text":"purchasers and sellers) of the affected options, the maintenance of a fair and orderly market in the","page_number":77,"box":{"x":117,"y":397,"width":734,"height":12}},{"id":"1ec5e82f-f6f0-4d85-bd3e-3abb8e5272e9","block_type":"box","text":"affected options, consistency of interpretation and practice, efficiency of exercise settlement","page_number":77,"box":{"x":116,"y":413,"width":687,"height":12}},{"id":"40f3fd5f-f65d-4e84-9749-eac36c3f362b","block_type":"box","text":"procedures, and the coordination with other clearing agencies of the clearance and settlement of","page_number":77,"box":{"x":117,"y":428,"width":721,"height":12}},{"id":"2bbd1c19-a36b-4e17-8569-0f62dfa26529","block_type":"box","text":"transactions in the underlying interest.","page_number":77,"box":{"x":116,"y":444,"width":288,"height":12}},{"id":"2ce37863-b529-4c2d-833a-9ccf0b84038e","block_type":"box","text":"Certain Considerations Regarding Options","page_number":77,"box":{"x":151,"y":475,"width":314,"height":12}},{"id":"f0eda443-7dbf-4c52-9def-c4e03703f517","block_type":"box","text":". The FLEX Options in which each Fund may invest will","page_number":77,"box":{"x":467,"y":475,"width":414,"height":12}},{"id":"56f49152-e03a-4e9f-a2a1-81c85c87406d","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":77,"box":{"x":150,"y":490,"width":723,"height":12}},{"id":"b4ab26b6-93f8-4138-a3c4-5850324086d1","block_type":"box","text":"“Reference Asset”). As such, the value of a Fund’s FLEX Options will fluctuate with changes in the","page_number":77,"box":{"x":150,"y":506,"width":735,"height":12}},{"id":"97ff1f8c-6abf-47ee-a669-1962134c3b10","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":77,"box":{"x":150,"y":521,"width":726,"height":12}},{"id":"dab4a030-c4d5-4dfe-add9-08966635c15b","block_type":"box","text":"the ETF, the value of an option, in general, will reflect, among other things, the time remaining until","page_number":77,"box":{"x":150,"y":537,"width":738,"height":12}},{"id":"ef1be2c2-23a3-4c9f-b416-a0adabbf1267","block_type":"box","text":"expiration (the end of the Outcome Period), the relationship of the exercise price to the market","page_number":77,"box":{"x":150,"y":552,"width":704,"height":12}},{"id":"4d2bc833-b533-49c3-a2c6-9f1ad2c9cba7","block_type":"box","text":"price of the Reference Asset, and general market conditions. Options that expire unexercised","page_number":77,"box":{"x":150,"y":568,"width":698,"height":12}},{"id":"48317d5f-2ac1-4d18-9fbf-2a3adf50a993","block_type":"box","text":"have no value.","page_number":77,"box":{"x":150,"y":583,"width":113,"height":10}},{"id":"fc45a226-d421-4384-b93b-035f2c6ef80a","block_type":"box","text":"The puts and calls on the Reference Asset entitle the purchaser of the option the right to purchase","page_number":77,"box":{"x":150,"y":606,"width":734,"height":12}},{"id":"7fe002a2-b567-4be1-8108-a7214f51fab4","block_type":"box","text":"(for a call option) or sell (for a put option) the Reference Asset at a predetermined specified price","page_number":77,"box":{"x":150,"y":622,"width":723,"height":12}},{"id":"9e29509c-3efe-47ac-9c33-18f538f98353","block_type":"box","text":"(the “strike price”). When a Fund writes a call on the Reference Asset, it receives a premium and","page_number":77,"box":{"x":150,"y":637,"width":722,"height":12}},{"id":"99135bbf-072c-4872-9381-2093443a9a8f","block_type":"box","text":"agrees that the purchaser of the call, upon exercise of the call, will receive from the Fund the","page_number":77,"box":{"x":150,"y":653,"width":693,"height":12}},{"id":"ca4b2200-6205-45a6-996f-52c37fc9d7ba","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":77,"box":{"x":150,"y":668,"width":724,"height":12}},{"id":"f9182c81-0f8a-438f-b99d-fca437a0593f","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":77,"box":{"x":150,"y":684,"width":697,"height":12}},{"id":"5f5f797f-d32d-4064-8d03-b0bff9f6f517","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":77,"box":{"x":150,"y":699,"width":725,"height":13}},{"id":"d5f440bb-35dd-4b6d-9853-5cd57aa5e380","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":77,"box":{"x":150,"y":715,"width":704,"height":12}},{"id":"f25eab50-9bc1-4016-912c-5a346b6ba88b","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":77,"box":{"x":150,"y":730,"width":700,"height":13}},{"id":"c3bb5385-0b90-4734-9ce7-12449ce0b1ce","block_type":"box","text":"Reference Asset, it receives a premium and the purchaser of the put has the right to require the","page_number":77,"box":{"x":151,"y":746,"width":708,"height":12}},{"id":"d9f18190-73da-4bda-8a0d-e7413469e6d5","block_type":"box","text":"Fund to deliver the specified number of shares of the ETF in exchange for the strike price.","page_number":77,"box":{"x":151,"y":761,"width":665,"height":13}},{"id":"7f6118ef-b20c-4e16-bb50-cdc82754ccfd","block_type":"box","text":"Although each Fund will generally utilize FLEX Options that are physically settled, a Fund may","page_number":77,"box":{"x":149,"y":785,"width":701,"height":12}},{"id":"1dcad02a-08b3-4dd5-ae24-afca2d21080f","block_type":"box","text":"also utilize FLEX Options that are cash-settled. Cash-settled options give the holder the right to","page_number":77,"box":{"x":150,"y":800,"width":706,"height":12}},{"id":"7029c734-657d-44cb-bfc9-2a34c9f55d9d","block_type":"box","text":"receive an amount (or owe an amount) of cash upon the exercise of the option. Gain or loss","page_number":77,"box":{"x":150,"y":816,"width":681,"height":12}},{"id":"e73c8e2f-0b57-4b35-90a0-0c33ef3f5d17","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":77,"box":{"x":150,"y":831,"width":710,"height":12}},{"id":"b2caa481-0881-44f2-a494-7053c0ea62ae","block_type":"box","text":"option contract. The amount of cash is equal to the difference between the closing price of the","page_number":77,"box":{"x":150,"y":847,"width":702,"height":12}},{"id":"a697b581-a0c5-4000-902b-76724a2af318","block_type":"box","text":"ETF’s share price and the exercise price of the option contract times a specified multiple","page_number":77,"box":{"x":151,"y":862,"width":659,"height":12}},{"id":"21abc8b1-2824-4ec5-8fa4-20fcd62165b3","block_type":"box","text":"(“multiplier”), which determines the total value for each point of such difference.","page_number":77,"box":{"x":150,"y":878,"width":593,"height":12}},{"id":"56d68bc6-e304-49da-a123-3f7c6a0e0c63","block_type":"box","text":"II-29","page_number":77,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"031d5073-bd06-46f3-9dc3-fa5ba340d83b","block_type":"box","text":"NM1026U-6033243-77/221","page_number":77,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8eaa87a0-9372-4757-9924-6e708081c6a4","block_type":"box","text":"Risks of Options on the Reference Assets","page_number":78,"box":{"x":150,"y":87,"width":311,"height":12}},{"id":"9b9296ec-b1d4-408c-bd47-ec33c50a81e7","block_type":"box","text":". If a Fund has purchased an option and exercises it","page_number":78,"box":{"x":462,"y":87,"width":390,"height":12}},{"id":"580f3b61-bf17-4dd4-a643-fdd14840c70e","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":78,"box":{"x":150,"y":102,"width":702,"height":13}},{"id":"304b2425-cfa1-4bc7-9c0f-0bd6fdea964d","block_type":"box","text":"Asset may subsequently change. If such a change causes the exercised option to fall out of the","page_number":78,"box":{"x":149,"y":118,"width":714,"height":12}},{"id":"c3aeff17-2b8e-4300-b517-20c5097a317d","block_type":"box","text":"money, the applicable Fund will be required to pay the difference between the closing Reference","page_number":78,"box":{"x":150,"y":134,"width":721,"height":12}},{"id":"49b37cab-068c-424c-9b8f-ac37bb383698","block_type":"box","text":"Asset value and the exercise price of the option (times the applicable multiplier) to the assigned","page_number":78,"box":{"x":149,"y":149,"width":714,"height":12}},{"id":"09b82cd2-703f-437a-b69d-a89b142cc3b9","block_type":"box","text":"writer.","page_number":78,"box":{"x":149,"y":165,"width":51,"height":9}},{"id":"3e6186c4-e3ca-459b-ab48-a173bfac1a72","block_type":"box","text":"Foreign Exchange Transactions.","page_number":78,"box":{"x":116,"y":196,"width":247,"height":12}},{"id":"6ce5db99-51f3-4424-8d81-d53123b32fe6","block_type":"box","text":"A Fund may enter into spot foreign exchange transactions, forward foreign exchange transactions (“FX","page_number":78,"box":{"x":116,"y":219,"width":768,"height":12}},{"id":"73e675ce-51f7-4604-9063-210b11898a3b","block_type":"box","text":"forwards”) and currency swaps, purchase and sell currency options, currency futures and related","page_number":78,"box":{"x":116,"y":234,"width":723,"height":12}},{"id":"b2cce623-95c8-47fd-84b4-3706ecb4e225","block_type":"box","text":"options thereon (collectively, “Currency Instruments”) for purposes of hedging against the decline in the","page_number":78,"box":{"x":116,"y":250,"width":772,"height":12}},{"id":"8b2cabd7-b97c-4f60-aa85-81976ea064d6","block_type":"box","text":"value of currencies in which its portfolio holdings are denominated against the U.S. dollar or, with","page_number":78,"box":{"x":116,"y":265,"width":725,"height":12}},{"id":"1a2a4560-15cb-4062-896c-af268216f689","block_type":"box","text":"respect to certain Funds, to seek to enhance returns.","page_number":78,"box":{"x":117,"y":281,"width":397,"height":12}},{"id":"b31b8793-dfeb-4ace-ad5d-bcd1771a66b8","block_type":"box","text":"Such transactions could be effected to hedge with respect to foreign dollar denominated securities","page_number":78,"box":{"x":116,"y":312,"width":734,"height":12}},{"id":"6092056f-4115-43e3-b057-1585185e3680","block_type":"box","text":"owned by a Fund, sold by a Fund but not","page_number":78,"box":{"x":116,"y":327,"width":309,"height":12}},{"id":"cb0751d7-830b-463f-95aa-46ad3744b0f7","block_type":"box","text":"yet delivered, or committed or anticipated to be purchased by","page_number":78,"box":{"x":426,"y":327,"width":460,"height":12}},{"id":"20168237-4145-412c-980c-3fbc08139b0f","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":78,"box":{"x":116,"y":343,"width":768,"height":12}},{"id":"28eacba6-e114-4480-aca0-7685032e8814","block_type":"box","text":"an investment in a yen-denominated security. For example, the Fund may purchase a foreign currency","page_number":78,"box":{"x":116,"y":358,"width":767,"height":12}},{"id":"d7854aec-d1eb-42c2-81ae-52d8f56d4b39","block_type":"box","text":"put option enabling it to sell a specified amount of yen","page_number":78,"box":{"x":117,"y":374,"width":404,"height":12}},{"id":"398b76f7-8878-4be7-9ebe-0a98d1abcfb6","block_type":"box","text":"for dollars at a specified price by a future date.","page_number":78,"box":{"x":521,"y":374,"width":350,"height":12}},{"id":"c7c0fef4-84dc-417f-a997-f417a7731a59","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":78,"box":{"x":116,"y":389,"width":764,"height":12}},{"id":"e6144cb8-f49b-496d-bf06-43b0703dab1f","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":78,"box":{"x":116,"y":405,"width":753,"height":12}},{"id":"2ea6e0c4-33a4-44ab-9334-fe06d5ce5d8f","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":78,"box":{"x":116,"y":420,"width":764,"height":12}},{"id":"5dd981b9-1fad-4391-b625-c6239a7860bc","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":78,"box":{"x":116,"y":436,"width":727,"height":12}},{"id":"2b3dfd07-97db-42f4-ae1d-605c80180834","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":78,"box":{"x":116,"y":451,"width":767,"height":12}},{"id":"68cf693c-d149-4f09-818c-c9fe9ade7035","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":78,"box":{"x":117,"y":467,"width":742,"height":12}},{"id":"37708961-ebf9-419e-8683-ec72839e0bab","block_type":"box","text":"Fund are considered hedging transactions. Certain Funds have a fundamental investment restriction","page_number":78,"box":{"x":117,"y":482,"width":749,"height":12}},{"id":"98e5ddd7-c0e2-4a63-8c79-288607262ceb","block_type":"box","text":"that restricts currency option strategies.","page_number":78,"box":{"x":116,"y":498,"width":298,"height":12}},{"id":"69d2898c-05e1-409e-b67c-943aa3042f0e","block_type":"box","text":"Hedging transactions involving Currency Instruments involve substantial risks, including correlation","page_number":78,"box":{"x":117,"y":529,"width":737,"height":12}},{"id":"fd4cbf65-1df3-497a-9b61-543057fe6372","block_type":"box","text":"risk. A Fund’s use of Currency Instruments to effect hedging strategies is intended to reduce the","page_number":78,"box":{"x":117,"y":544,"width":718,"height":12}},{"id":"89f6ed7c-373c-40c4-979a-efcf63626e97","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":78,"box":{"x":116,"y":560,"width":763,"height":12}},{"id":"e9f453c4-3212-4f7d-a385-a43fa669a2d5","block_type":"box","text":"the NAV of the Fund’s shares from fluctuating. Moreover, although Currency Instruments will be used","page_number":78,"box":{"x":116,"y":575,"width":757,"height":12}},{"id":"7cbe5a02-fe08-49c6-b7d7-bed2c800f95b","block_type":"box","text":"with the intention of hedging against adverse currency movements, transactions in Currency","page_number":78,"box":{"x":116,"y":591,"width":689,"height":12}},{"id":"5bdee442-e822-494e-95aa-ad39629eae70","block_type":"box","text":"Instruments involve the risk that anticipated currency movements will not be accurately predicted and","page_number":78,"box":{"x":117,"y":607,"width":755,"height":11}},{"id":"68b326fd-aac1-4e2e-a54f-551c8c54a4a0","block_type":"box","text":"that the Fund’s hedging strategies will be ineffective. To the extent that a Fund hedges against","page_number":78,"box":{"x":116,"y":622,"width":706,"height":12}},{"id":"fe138c3d-7cdf-45d1-b54d-024d3a9b2095","block_type":"box","text":"anticipated currency movements that do not occur, the Fund may realize losses and decrease its total","page_number":78,"box":{"x":116,"y":638,"width":761,"height":11}},{"id":"258002c8-7544-4da8-8df5-7a1d0e3c2940","block_type":"box","text":"return. Furthermore, a Fund will only engage in hedging activities from time to time and may not be","page_number":78,"box":{"x":117,"y":653,"width":738,"height":12}},{"id":"57db4044-cb34-428f-9a27-22ba7b28e50a","block_type":"box","text":"engaging in hedging activities when movements in currency exchange rates actually occur.","page_number":78,"box":{"x":116,"y":669,"width":674,"height":11}},{"id":"f69ed362-0020-41b9-9e75-7d1c476baffe","block_type":"box","text":"In connection with its trading in forward foreign currency contracts, a Fund will contract with a foreign","page_number":78,"box":{"x":117,"y":699,"width":746,"height":13}},{"id":"5d1fedb2-06d7-419b-81b0-82724cbe3598","block_type":"box","text":"or domestic bank, or foreign or domestic securities dealer, to make or take future delivery of a specified","page_number":78,"box":{"x":116,"y":715,"width":766,"height":12}},{"id":"f7f6a23e-edd6-461e-b26b-0440220a5364","block_type":"box","text":"amount of a particular currency. There are no limitations on daily price moves in such forward","page_number":78,"box":{"x":116,"y":730,"width":693,"height":13}},{"id":"f9e8cc2b-7131-459b-874f-9ede7f09dd5d","block_type":"box","text":"contracts, and banks and dealers are not required to continue to make markets in such contracts.","page_number":78,"box":{"x":116,"y":746,"width":722,"height":12}},{"id":"9529b59c-99b4-4e63-a0aa-cb60924424f9","block_type":"box","text":"There have been periods during which certain banks or dealers have refused to quote prices for such","page_number":78,"box":{"x":116,"y":761,"width":751,"height":13}},{"id":"f5e3eb4f-4c65-49ea-ab96-e6430871d91f","block_type":"box","text":"forward contracts or have quoted prices with an unusually wide spread between the price at which the","page_number":78,"box":{"x":116,"y":777,"width":756,"height":12}},{"id":"3d093496-88f9-4720-81e4-79f6eff77452","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":78,"box":{"x":117,"y":792,"width":743,"height":13}},{"id":"2876facd-21f2-487f-b72c-bc3548aae7a0","block_type":"box","text":"currency controls might limit any such forward contract trading. With respect to its trading of forward","page_number":78,"box":{"x":116,"y":808,"width":740,"height":12}},{"id":"0e59bc28-e0da-4be9-829b-8cbf82eb405e","block_type":"box","text":"contracts, if any, a Fund will be subject to counterparty risk. Any such failure to perform by a","page_number":78,"box":{"x":116,"y":823,"width":683,"height":13}},{"id":"7b02e2f6-f752-48bc-87d7-2b3ff7de5fdf","block_type":"box","text":"counterparty would deprive the Fund of any profit potential or force the Fund to cover its commitments","page_number":78,"box":{"x":116,"y":839,"width":762,"height":12}},{"id":"1e216953-45a5-4563-baa8-c227a4a8e515","block_type":"box","text":"for resale, if any, at the then market price and could result in a loss to the Fund.","page_number":78,"box":{"x":116,"y":854,"width":595,"height":13}},{"id":"9e086538-7ae5-4c47-a8f6-a8e1b59f9598","block_type":"box","text":"II-30","page_number":78,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3763e472-3639-44dd-aee2-b21466ff8555","block_type":"box","text":"NM1026U-6033243-78/221","page_number":78,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d40bfa7f-ec0a-4bb2-82e5-16d055d011e7","block_type":"box","text":"It may not be possible for a Fund to hedge against currency exchange rate movements, even if","page_number":79,"box":{"x":117,"y":87,"width":709,"height":12}},{"id":"92a79caa-9e13-47a7-a90f-4621b27089b8","block_type":"box","text":"correctly anticipated, in the event that (i) the currency exchange rate movement is so generally","page_number":79,"box":{"x":116,"y":102,"width":707,"height":13}},{"id":"b506cdaa-f4a2-484a-a498-6a8edc7ea99c","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":79,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"4cf28564-4502-448b-a9b0-1841afdb74b6","block_type":"box","text":"currency exchange rate movement relates to a market with respect to which Currency Instruments are","page_number":79,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"df58f908-52c7-46bc-b9b8-94fbc5d5e474","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":79,"box":{"x":117,"y":149,"width":759,"height":12}},{"id":"0cfbff98-8670-4a28-8d5f-099fb4a31831","block_type":"box","text":"of engaging in foreign currency transactions varies with such factors as the currencies involved, the","page_number":79,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"55311676-0500-4261-910d-4b946b929083","block_type":"box","text":"length of the contract period and the market conditions then prevailing. Since transactions in foreign","page_number":79,"box":{"x":117,"y":180,"width":744,"height":12}},{"id":"2568f834-83cc-410e-9aed-59c7596a69aa","block_type":"box","text":"currency exchange usually are conducted on a principal basis, no fees or commissions are involved.","page_number":79,"box":{"x":116,"y":196,"width":750,"height":12}},{"id":"0efb5ab8-4f73-466c-afac-137fc1adbed7","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":79,"box":{"x":116,"y":227,"width":765,"height":12}},{"id":"2c69bafd-07f5-473e-867c-d176915bcc0b","block_type":"box","text":"(including receivables for unsettled securities sales), or has committed to purchase or anticipates","page_number":79,"box":{"x":117,"y":242,"width":724,"height":12}},{"id":"78078f5d-3dda-4871-b93c-46879f2ab030","block_type":"box","text":"purchasing, which are denominated in such currency.","page_number":79,"box":{"x":117,"y":258,"width":401,"height":12}},{"id":"0a973f91-5a1c-482b-a307-06f6d384b9ef","block_type":"box","text":"Spot Transactions and FX Forwards.","page_number":79,"box":{"x":117,"y":289,"width":271,"height":12}},{"id":"46ca6524-3010-4c8a-9cf7-9d3e69b9271b","block_type":"box","text":"FX forwards are OTC contracts to purchase or sell a specified","page_number":79,"box":{"x":390,"y":289,"width":470,"height":12}},{"id":"b08614d4-9888-4e07-b6b3-b854119dc7a6","block_type":"box","text":"amount of a specified currency or multinational currency unit at a specified price and specified future","page_number":79,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"c2be5e4d-5e48-4e05-a3e3-4478ea31ee8c","block_type":"box","text":"date. Spot foreign exchange transactions are similar but are settled in the current, or “spot”, market. A","page_number":79,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"61ace63a-d906-42cb-a065-b7fd0382ebc5","block_type":"box","text":"Fund will enter into foreign exchange transactions for purposes of hedging either a specific transaction","page_number":79,"box":{"x":117,"y":335,"width":764,"height":12}},{"id":"a846cb1a-f0a0-43d3-a57e-a1e69f4b92de","block_type":"box","text":"or a portfolio position, or, with respect to certain Funds, to seek to enhance returns. FX forwards","page_number":79,"box":{"x":116,"y":351,"width":719,"height":12}},{"id":"6c0c28bf-f17b-4193-b4ac-57f6d355df9b","block_type":"box","text":"involve substantial currency risk, credit risk and liquidity risk. A Fund may enter into a foreign exchange","page_number":79,"box":{"x":117,"y":366,"width":770,"height":12}},{"id":"1bc4b728-44f7-4815-a70a-8dfce32dddc8","block_type":"box","text":"transaction for purposes of hedging a specific transaction by, for example, purchasing a currency","page_number":79,"box":{"x":116,"y":382,"width":725,"height":12}},{"id":"ecea0e95-0677-4643-bc2c-f11e87f057eb","block_type":"box","text":"needed to settle a security transaction or selling a currency in which the Fund has received or","page_number":79,"box":{"x":117,"y":397,"width":699,"height":12}},{"id":"40f53d7a-1d1e-47f5-a7f3-3d4091eba10f","block_type":"box","text":"anticipates receiving a dividend or distribution. A Fund may enter into a foreign exchange transaction","page_number":79,"box":{"x":116,"y":413,"width":754,"height":12}},{"id":"7121b6bb-0e02-4206-91e0-ed2055164e12","block_type":"box","text":"for purposes of hedging a portfolio position by selling forward a currency in which a portfolio position of","page_number":79,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"95bcfa1d-d90a-48fb-9b50-a62ed14232fb","block_type":"box","text":"the Fund is denominated or by purchasing a currency in which the Fund anticipates acquiring a","page_number":79,"box":{"x":116,"y":444,"width":711,"height":12}},{"id":"c84f503c-5aec-42f2-83ed-34121296fbc4","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":79,"box":{"x":117,"y":459,"width":767,"height":12}},{"id":"d8b00ab8-11a8-467c-95db-ad68b474e54b","block_type":"box","text":"a Currency Instrument denominated in a currency other than the currency being hedged (a “cross","page_number":79,"box":{"x":116,"y":475,"width":729,"height":12}},{"id":"d8da5bbc-2db4-4715-bd43-971c570e5ea3","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":79,"box":{"x":117,"y":490,"width":680,"height":12}},{"id":"f3ebff25-961e-4ae2-9b06-973c6168169e","block_type":"box","text":"demonstrably high correlation between the currency in which the cross-hedge is denominated and the","page_number":79,"box":{"x":116,"y":506,"width":761,"height":12}},{"id":"8a6d9e3f-ab5f-4895-be8d-b1016a8aa2bb","block_type":"box","text":"currency being hedged, and (ii) executing a cross-hedge through the currency in which the cross","page_number":79,"box":{"x":116,"y":521,"width":722,"height":12}},{"id":"3f86ef67-0db1-40b7-a731-812c2de8ed5d","block_type":"box","text":"hedge is denominated will be significantly more cost-effective or provide substantially greater liquidity","page_number":79,"box":{"x":117,"y":537,"width":755,"height":12}},{"id":"f9a65f80-2619-465c-8de3-6f6f6d3adc75","block_type":"box","text":"than executing a similar hedging transaction by means of the currency being hedged.","page_number":79,"box":{"x":116,"y":552,"width":638,"height":12}},{"id":"08796d9e-762d-480f-8f08-d3417cf5aaaa","block_type":"box","text":"A Fund may also engage in proxy hedging transactions to reduce the effect of currency fluctuations on","page_number":79,"box":{"x":116,"y":583,"width":765,"height":12}},{"id":"6a79c3e3-5d99-4c83-8ff1-8fa4f9f3016a","block_type":"box","text":"the value of existing or anticipated holdings of portfolio securities. Proxy hedging is often used when","page_number":79,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"ec143bad-9952-4536-a124-0cd36a9d8ec1","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":79,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"7990bb28-5ad0-4bf9-a205-12fb779ae49a","block_type":"box","text":"Proxy hedging entails entering into a forward contract to sell a currency whose changes in value are","page_number":79,"box":{"x":117,"y":630,"width":746,"height":12}},{"id":"e3bd5118-64f5-40a0-a35a-066c2c39cb08","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":79,"box":{"x":116,"y":645,"width":709,"height":12}},{"id":"13ee8099-7473-446a-88d5-a72d1b0c6573","block_type":"box","text":"securities are, or are expected to be, denominated, and to buy U.S. dollars. Proxy hedging involves","page_number":79,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"8ade5314-a280-4714-b03e-63dfc8fb47cc","block_type":"box","text":"some of the same risks and considerations as other transactions with similar instruments. Currency","page_number":79,"box":{"x":116,"y":676,"width":737,"height":12}},{"id":"a3168f0d-ff2d-49f1-aeba-5201d3b5fe24","block_type":"box","text":"transactions can result in losses to the Fund if the currency being hedged fluctuates in value to a","page_number":79,"box":{"x":116,"y":692,"width":717,"height":12}},{"id":"3e11d399-8fa3-432f-ba1d-d297ab736614","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":79,"box":{"x":116,"y":707,"width":742,"height":12}},{"id":"6d489e7d-b432-4e7d-8472-3a624be00b9d","block_type":"box","text":"between various currencies may not be present, including during the particular time that a Fund is","page_number":79,"box":{"x":117,"y":723,"width":724,"height":12}},{"id":"fcef2ebf-d303-4aa2-b405-36bd6f8272a6","block_type":"box","text":"engaging in proxy hedging.","page_number":79,"box":{"x":116,"y":738,"width":200,"height":12}},{"id":"670149f6-d0e8-4e51-84d1-712c0061dcbd","block_type":"box","text":"A Fund may also cross-hedge currencies by entering into forward contracts to sell one or more","page_number":79,"box":{"x":116,"y":769,"width":703,"height":12}},{"id":"d24e8b20-894e-4418-981b-ee34fb96983c","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":79,"box":{"x":116,"y":785,"width":760,"height":12}},{"id":"1b24a00f-279f-4200-a515-322943cdfbd1","block_type":"box","text":"which the Fund expects to have portfolio exposure. For example, a Fund may hold both Canadian","page_number":79,"box":{"x":116,"y":800,"width":726,"height":12}},{"id":"a2f59bfa-9c35-4890-92d6-a8e61c0afba1","block_type":"box","text":"government bonds and Japanese government bonds, and the Manager or sub-adviser may believe","page_number":79,"box":{"x":116,"y":816,"width":736,"height":12}},{"id":"164a4e17-5454-4b4f-9b94-b18faf76f5f1","block_type":"box","text":"that Canadian dollars will deteriorate against Japanese yen. The Fund would sell Canadian dollars to","page_number":79,"box":{"x":116,"y":831,"width":754,"height":12}},{"id":"777da2b9-8c64-4346-8a5f-56971ecfbd6a","block_type":"box","text":"reduce its exposure to that currency and buy Japanese yen. This strategy would be a hedge against a","page_number":79,"box":{"x":117,"y":847,"width":761,"height":12}},{"id":"e78b910d-bf20-4379-b20f-78dc8a55d531","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":79,"box":{"x":116,"y":862,"width":758,"height":12}},{"id":"74e8266d-0d0f-4cd4-ba45-223339504b31","block_type":"box","text":"the Japanese yen relative to the U.S. dollar.","page_number":79,"box":{"x":116,"y":878,"width":331,"height":12}},{"id":"95a47f45-ccb0-42b3-9aa5-9b7ab6222929","block_type":"box","text":"II-31","page_number":79,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"fd2e76dd-f837-49b2-bb2a-f3e6d422d9e9","block_type":"box","text":"NM1026U-6033243-79/221","page_number":79,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8d80986e-8427-4b23-8698-8352bdf2f855","block_type":"box","text":"Some of the forward non-U.S. currency contracts entered into by the Funds are classified as","page_number":80,"box":{"x":116,"y":87,"width":690,"height":12}},{"id":"71972849-a0d5-4e92-8afa-90b4564dc31e","block_type":"box","text":"non-deliverable forwards (“NDFs”). NDFs are cash-settled, short-term forward contracts that may be","page_number":80,"box":{"x":117,"y":102,"width":748,"height":13}},{"id":"1975fa91-d9a6-49aa-aa59-e6747474f6c2","block_type":"box","text":"thinly traded or are denominated in non-convertible foreign currency, where the profit or loss at the","page_number":80,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"5b5edce2-4d24-430d-97e7-1799eb069c2d","block_type":"box","text":"time at the settlement date is calculated by taking the difference between the agreed upon exchange","page_number":80,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"5024ece5-6386-4bdf-8df3-cfa2bfbd3cd9","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":80,"box":{"x":117,"y":149,"width":765,"height":12}},{"id":"5421ed39-cda0-433e-aa4e-ec9a2d8f6322","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":80,"box":{"x":117,"y":165,"width":746,"height":12}},{"id":"42ef76a3-51bf-4ab3-9d7a-aefbbd0f9c9d","block_type":"box","text":"the prevailing market exchange rate and the agreed upon exchange rate is calculated. The settlement","page_number":80,"box":{"x":116,"y":180,"width":761,"height":12}},{"id":"5af84be3-df0d-4004-a145-900ba7c34a4b","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":80,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"02d245cb-c364-4699-9130-056959162d13","block_type":"box","text":"are commonly quoted for time periods of one month up to two years, and are normally quoted and","page_number":80,"box":{"x":116,"y":211,"width":733,"height":12}},{"id":"2f333700-6a5b-47a7-b1d8-113835d6f4ec","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":80,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"1bbbec6f-9b62-491e-866e-79dce63b4407","block_type":"box","text":"currencies that are not internationally traded.","page_number":80,"box":{"x":116,"y":242,"width":337,"height":12}},{"id":"17500d3b-3bc5-4240-807b-f1d5db69246f","block_type":"box","text":"Currency Futures.","page_number":80,"box":{"x":117,"y":273,"width":132,"height":12}},{"id":"9c896289-bf28-4f40-afe8-410bdf1c16d8","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a","page_number":80,"box":{"x":250,"y":273,"width":626,"height":12}},{"id":"88bf57f3-4da5-4e8f-aa82-65a71aba041c","block_type":"box","text":"currency through use of currency futures or options on currency futures. Currency futures are similar to","page_number":80,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"5328f203-df0b-4d41-9f66-77894ecbc78f","block_type":"box","text":"forward foreign exchange transactions except that futures are standardized, exchange-traded contracts","page_number":80,"box":{"x":116,"y":304,"width":772,"height":12}},{"id":"a32db7e1-73bf-4c5d-8672-c96f89553d60","block_type":"box","text":"while forward foreign exchange transactions are traded in the OTC market. Currency futures involve","page_number":80,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"41d2ac3f-3b58-4c2e-8fa1-6c34a791346a","block_type":"box","text":"substantial currency risk as well as the risks discussed above in “— Futures.”","page_number":80,"box":{"x":116,"y":335,"width":578,"height":12}},{"id":"201b7b35-1d03-4681-92b1-a96f2b81ab15","block_type":"box","text":"Currency Options.","page_number":80,"box":{"x":117,"y":366,"width":133,"height":12}},{"id":"aeec5ec0-24ca-4272-a0d2-53146bd8b92e","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a","page_number":80,"box":{"x":251,"y":366,"width":626,"height":12}},{"id":"14855d5f-9e3f-444e-8a0c-227e26eef4f6","block_type":"box","text":"currency through the use of currency options. Certain Funds have fundamental investment restrictions","page_number":80,"box":{"x":116,"y":382,"width":763,"height":12}},{"id":"c104d413-8fff-4b11-8f85-c86c2817194a","block_type":"box","text":"that permit the purchase of currency options, but prohibit the writing of currency options. Currency","page_number":80,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"77d0826f-b800-490f-879e-c3cbe4cb46c8","block_type":"box","text":"options are similar to options on securities. For example, in consideration for an option premium the","page_number":80,"box":{"x":116,"y":413,"width":745,"height":12}},{"id":"8170162f-202c-47e9-9f1f-7de398e29ef5","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":80,"box":{"x":116,"y":428,"width":765,"height":12}},{"id":"f69ee907-db8d-4a1b-a0eb-8d7d5b8a91fa","block_type":"box","text":"put option) a specified amount of a specified currency on or before the expiration date for a specified","page_number":80,"box":{"x":117,"y":444,"width":750,"height":12}},{"id":"5d58261d-887b-4bca-b728-42e5fb9a312d","block_type":"box","text":"amount of another currency. A Fund may engage in transactions in options on currencies either on","page_number":80,"box":{"x":116,"y":459,"width":737,"height":12}},{"id":"338313af-39da-44d4-b24b-d92d4f1390f8","block_type":"box","text":"exchanges or OTC markets. Such transactions in options may include exotic options on currencies,","page_number":80,"box":{"x":116,"y":475,"width":743,"height":12}},{"id":"3b918a90-2be2-46a1-8b50-95deb36ab32b","block_type":"box","text":"which are typically traded in OTC markets and have additional features that result in different payment","page_number":80,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"5a62e321-61e9-406f-b1ad-42de781b2607","block_type":"box","text":"structures and/or expirations. Where a Fund is permitted to write currency options, it may write covered","page_number":80,"box":{"x":116,"y":506,"width":771,"height":12}},{"id":"c0e75d03-fce6-4f15-b92a-bceb65c51950","block_type":"box","text":"call options on up to 100% of the currencies in its portfolio. See “— Options” above. Currency options","page_number":80,"box":{"x":116,"y":521,"width":757,"height":12}},{"id":"00d8fa41-0e4e-4777-889d-a06e8b811ab6","block_type":"box","text":"involve substantial currency risk, and may also involve credit, leverage or illiquidity risk.","page_number":80,"box":{"x":117,"y":537,"width":651,"height":12}},{"id":"86f4770a-8d18-4dfd-94c5-d9d26fd8fb66","block_type":"box","text":"Currency Swaps.","page_number":80,"box":{"x":117,"y":568,"width":131,"height":12}},{"id":"5d81356e-212e-47eb-ac5a-917efb731ebe","block_type":"box","text":"A Fund may enter into currency swaps in order to protect against currency","page_number":80,"box":{"x":248,"y":568,"width":557,"height":12}},{"id":"975deb6d-010b-455a-a9fd-5cd3c888ba0d","block_type":"box","text":"fluctuations or to hedge portfolio positions. Currency swaps are transactions in which one currency is","page_number":80,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"4d87fd96-5a41-4efe-9b7a-4fc7ead39bb2","block_type":"box","text":"simultaneously bought for a second currency on a spot basis and sold for the second currency on a","page_number":80,"box":{"x":116,"y":599,"width":743,"height":12}},{"id":"6ccd77cd-2234-457b-8c47-9a2e8aef4e2e","block_type":"box","text":"forward basis. Currency swaps involve the exchange of the rights of a Fund and another party to make","page_number":80,"box":{"x":116,"y":614,"width":767,"height":12}},{"id":"ae745245-af4a-400b-9e99-31f2e1790520","block_type":"box","text":"or receive payments in specified currencies, and typically require the delivery of the entire principal","page_number":80,"box":{"x":116,"y":630,"width":738,"height":12}},{"id":"7238f300-5a05-4724-825d-a10b88bf841c","block_type":"box","text":"value of one designated currency in exchange for the other designated currency. As a result, the entire","page_number":80,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"f0752c45-510b-4d8a-b663-0c9d5ad6e503","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":80,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"0d14d240-f3cc-496f-baef-cb00fabd50b3","block_type":"box","text":"its contractual delivery obligations.","page_number":80,"box":{"x":117,"y":676,"width":254,"height":12}},{"id":"bf4c8294-3b8f-43d0-90f6-d0d7f0dde4be","block_type":"box","text":"Distressed Securities.","page_number":80,"box":{"x":116,"y":707,"width":174,"height":10}},{"id":"af824881-a074-4a7c-aa94-34d7bbcc5cb3","block_type":"box","text":"A Fund may invest in securities, including loans purchased in the secondary","page_number":80,"box":{"x":296,"y":707,"width":565,"height":12}},{"id":"3b980572-ab83-4735-9b63-58447a0c44f7","block_type":"box","text":"market, that are the subject of bankruptcy proceedings or otherwise in default or in risk of being in","page_number":80,"box":{"x":117,"y":723,"width":724,"height":12}},{"id":"a6272f8f-839c-40c7-90f0-d8c3b7f17a10","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":80,"box":{"x":116,"y":738,"width":763,"height":12}},{"id":"21551746-19a1-441a-ab7a-7fb986ee2a8d","block_type":"box","text":"rated in the lower rating categories by one or more nationally recognized statistical rating organizations","page_number":80,"box":{"x":117,"y":754,"width":762,"height":12}},{"id":"f1298495-aa40-4d63-baf5-0ef508e4f950","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":80,"box":{"x":117,"y":769,"width":709,"height":12}},{"id":"21ed5683-92e6-4e68-8284-ea48615f5b61","block_type":"box","text":"judgment of the Manager of equivalent quality (“Distressed Securities”). Investment in Distressed","page_number":80,"box":{"x":115,"y":785,"width":719,"height":12}},{"id":"886eb3a3-059c-4de1-81a4-1856209b649e","block_type":"box","text":"Securities is speculative and involves significant risks.","page_number":80,"box":{"x":116,"y":800,"width":399,"height":12}},{"id":"d1679e08-f1b0-493d-bf64-0e9767e335a1","block_type":"box","text":"A Fund will generally make such investments only when the Manager believes it is reasonably likely","page_number":80,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"d1128c13-f8d0-499c-a434-9a83be0b15ae","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":80,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"25e8f02a-e7d1-4eae-8a18-935aaeb5e04c","block_type":"box","text":"of reorganization pursuant to which the Fund will receive new securities in return for the Distressed","page_number":80,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"e51c85d2-9d63-4dc8-ba5f-c001bdc44c45","block_type":"box","text":"Securities. However, there can be no assurance that such an exchange offer will be made or that such","page_number":80,"box":{"x":116,"y":878,"width":766,"height":12}},{"id":"45798aa8-1cbc-4583-aefc-5ce6784f06bf","block_type":"box","text":"II-32","page_number":80,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"608aee43-f4f9-41b6-ab2f-5b8db603df3a","block_type":"box","text":"NM1026U-6033243-80/221","page_number":80,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"be51ab57-fba2-4915-bd2c-f53b5ef6c654","block_type":"box","text":"a plan of reorganization will be adopted. In addition, a significant period of time may pass between the","page_number":81,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"ab6e7f77-f274-4ad0-972c-1b4a462d0854","block_type":"box","text":"time at which a Fund makes its investment in Distressed Securities and the time that any such","page_number":81,"box":{"x":116,"y":102,"width":704,"height":13}},{"id":"da0bf4e3-ba6d-4629-b0fd-fc729124fcff","block_type":"box","text":"exchange offer or plan of reorganization is completed. During this period, it is unlikely that a Fund will","page_number":81,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"676b9a03-0be7-4ae8-99f9-20d25417e4a3","block_type":"box","text":"receive any interest payments on the Distressed Securities, the Fund will be subject to significant","page_number":81,"box":{"x":117,"y":134,"width":725,"height":12}},{"id":"2857ce53-b712-4d44-abf1-26966b0dec7c","block_type":"box","text":"uncertainty as to whether or not the exchange offer or plan of reorganization will be completed and the","page_number":81,"box":{"x":117,"y":149,"width":764,"height":12}},{"id":"36672179-9842-43ff-bd62-38f8efc1c37f","block_type":"box","text":"Fund may be required to bear certain extraordinary expenses to protect and recover its investment.","page_number":81,"box":{"x":117,"y":165,"width":741,"height":12}},{"id":"c9ab0b4e-b18e-4815-9219-258ad9520ab8","block_type":"box","text":"Therefore, to the extent the Fund seeks capital appreciation through investment in distressed","page_number":81,"box":{"x":116,"y":180,"width":696,"height":12}},{"id":"16b5483f-7c75-4764-9f73-1dcf5dbaada9","block_type":"box","text":"securities, the Fund’s ability to achieve current income for its shareholders may be diminished. The","page_number":81,"box":{"x":116,"y":196,"width":740,"height":12}},{"id":"446d8bab-c124-4b85-bbbc-d49166d2e23c","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":81,"box":{"x":117,"y":211,"width":753,"height":12}},{"id":"fa0a427e-4eb5-485d-86a4-5f3eb3e34687","block_type":"box","text":"the obligations evidenced by the distressed securities will eventually be satisfied (","page_number":81,"box":{"x":116,"y":227,"width":605,"height":12}},{"id":"46c61a94-6c9a-4f2b-84c8-07ded3074f40","block_type":"box","text":"e.g.","page_number":81,"box":{"x":723,"y":229,"width":25,"height":10}},{"id":"9af56182-cac4-4aef-ae9c-2a39a705775e","block_type":"box","text":", through a","page_number":81,"box":{"x":751,"y":227,"width":84,"height":12}},{"id":"078e0dc6-4a1a-498d-b32a-93edad66b3b8","block_type":"box","text":"liquidation of the obligor’s assets, an exchange offer or plan of reorganization involving the distressed","page_number":81,"box":{"x":117,"y":242,"width":756,"height":12}},{"id":"e8670f51-1567-4b32-a521-ce23ddb16bf9","block_type":"box","text":"securities or a payment of some amount in satisfaction of the obligation). Even if an exchange offer is","page_number":81,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"2e6451db-1c1a-49fb-81bc-574fc6851cf1","block_type":"box","text":"made or plan of reorganization is adopted with respect to Distressed Securities held by a Fund, there","page_number":81,"box":{"x":117,"y":273,"width":754,"height":12}},{"id":"75f315ca-9c91-45f7-a206-67e1519b0d97","block_type":"box","text":"can be no assurance that the securities or other assets received by a Fund in connection with such","page_number":81,"box":{"x":116,"y":289,"width":740,"height":12}},{"id":"e34a2927-d6ae-4efa-aefd-f29deb8023e4","block_type":"box","text":"exchange offer or plan of reorganization will not have a lower value or income potential than may have","page_number":81,"box":{"x":116,"y":304,"width":765,"height":12}},{"id":"5a4478fe-92f2-46db-8c09-e4a4c7aedd3f","block_type":"box","text":"been anticipated when the investment was made or no value. Moreover, any securities received by a","page_number":81,"box":{"x":117,"y":320,"width":753,"height":12}},{"id":"8808f45b-13cb-4c2d-9de4-fb5b8aa127dd","block_type":"box","text":"Fund upon completion of an exchange offer or plan of reorganization may be restricted as to resale.","page_number":81,"box":{"x":117,"y":335,"width":745,"height":12}},{"id":"8eb30a35-e15b-49d0-ba7e-9dac69a3988e","block_type":"box","text":"Similarly, if a Fund participates in negotiations with respect to any exchange offer or plan of","page_number":81,"box":{"x":116,"y":351,"width":683,"height":12}},{"id":"c0516b41-e129-4ab6-a595-9184a9c8b41a","block_type":"box","text":"reorganization with respect to an issuer of Distressed Securities, the Fund may be restricted from","page_number":81,"box":{"x":117,"y":366,"width":726,"height":12}},{"id":"e4c8a744-6617-4a49-a502-141598f630b4","block_type":"box","text":"disposing of such securities. To the extent that a Fund becomes involved in such proceedings, the","page_number":81,"box":{"x":116,"y":382,"width":734,"height":12}},{"id":"e7fee9a6-918f-4f4d-8e03-7a9ac6912fde","block_type":"box","text":"Fund may have a more active participation in the affairs of the issuer than that assumed generally by","page_number":81,"box":{"x":117,"y":397,"width":752,"height":12}},{"id":"db196b23-5cd6-435d-a1ec-e2c04144c0dc","block_type":"box","text":"an investor. The Fund, however, will not make investments for the purpose of exercising day-to-day","page_number":81,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"dd18a9bd-f380-4259-8c5d-0dfd612bbb2f","block_type":"box","text":"management of any issuer’s affairs.","page_number":81,"box":{"x":117,"y":428,"width":269,"height":12}},{"id":"3ca46167-b229-4238-be22-f3118abc4250","block_type":"box","text":"Environmental, Social and Governance (“ESG”) Integration.","page_number":81,"box":{"x":116,"y":459,"width":476,"height":12}},{"id":"29f736d3-523d-437a-a4c5-d7228c137d77","block_type":"box","text":"Although a Fund does not seek to","page_number":81,"box":{"x":593,"y":459,"width":261,"height":12}},{"id":"17275296-70ad-4e17-b4c3-e215a4d5c3b7","block_type":"box","text":"implement a specific sustainability objective, strategy or process unless disclosed in its Prospectus,","page_number":81,"box":{"x":117,"y":475,"width":741,"height":12}},{"id":"7687a2ca-b356-4c6b-abb9-2b28372109c1","block_type":"box","text":"Fund management will consider ESG factors as part of the investment process for the Fund. Fund","page_number":81,"box":{"x":117,"y":490,"width":733,"height":12}},{"id":"cbef1577-dda7-4368-b5c1-60985f37fbba","block_type":"box","text":"management views ESG integration as the practice of incorporating financially material ESG data or","page_number":81,"box":{"x":117,"y":506,"width":747,"height":12}},{"id":"bd181fac-aea4-40e6-beaa-90bd2c4d877d","block_type":"box","text":"information into investment processes with the objective of enhancing risk-adjusted returns. These","page_number":81,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"b950197e-b118-47ef-8b59-6b4cfdf79739","block_type":"box","text":"ESG considerations will vary depending on a Fund’s particular investment strategies and may include","page_number":81,"box":{"x":117,"y":537,"width":757,"height":12}},{"id":"b07dde06-29fb-4302-b227-dd9017ad273b","block_type":"box","text":"consideration of third-party research as well as consideration of proprietary BlackRock research across","page_number":81,"box":{"x":116,"y":552,"width":770,"height":12}},{"id":"2d0297b8-05a3-4f62-a84e-66d8c2ae1e97","block_type":"box","text":"the ESG risks and opportunities regarding an issuer. The ESG characteristics utilized in a Fund’s","page_number":81,"box":{"x":116,"y":568,"width":725,"height":12}},{"id":"98e977d5-8bcd-41ee-8552-f6471f70d6bf","block_type":"box","text":"investment process are anticipated to evolve over time and one or more characteristics may not be","page_number":81,"box":{"x":117,"y":583,"width":738,"height":12}},{"id":"74926244-cada-4e25-b6e9-04096c86c494","block_type":"box","text":"relevant with respect to all issuers that are eligible for investment.","page_number":81,"box":{"x":117,"y":599,"width":490,"height":12}},{"id":"8b1ece28-2d8b-474c-bef0-bc498abc4b09","block_type":"box","text":"Certain of these considerations may affect a Fund’s exposure to certain companies or industries. 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The","page_number":81,"box":{"x":117,"y":769,"width":762,"height":12}},{"id":"b4c9750f-1475-4df7-9509-ceb1f4035681","block_type":"box","text":"value of equity securities purchased by the Fund could decline if the financial condition of the","page_number":81,"box":{"x":116,"y":785,"width":689,"height":12}},{"id":"4f631a85-3f7c-4124-8062-19a3a21546b7","block_type":"box","text":"companies the Fund invests in decline or if overall market and economic conditions deteriorate. They","page_number":81,"box":{"x":116,"y":800,"width":750,"height":12}},{"id":"2afe5e66-21c2-4bef-9cc9-349c1bc9def6","block_type":"box","text":"may also decline due to factors that affect a particular industry or industries, such as labor shortages or","page_number":81,"box":{"x":117,"y":816,"width":766,"height":12}},{"id":"0a6eb1e1-e528-4a32-9a59-9819655c878c","block_type":"box","text":"increase in production costs and competitive conditions within an industry. In addition, they may","page_number":81,"box":{"x":117,"y":831,"width":714,"height":12}},{"id":"88b0f563-d87e-454d-a518-401845cefb7d","block_type":"box","text":"decline due to general market conditions that are not specifically related to a company or industry,","page_number":81,"box":{"x":116,"y":847,"width":732,"height":12}},{"id":"2869bb96-26f0-483a-b000-72e555fee52e","block_type":"box","text":"such as real or perceived adverse economic conditions, changes in the general outlook for corporate","page_number":81,"box":{"x":116,"y":862,"width":753,"height":12}},{"id":"40c0f20b-2a7e-4b75-9ad2-e17bd9581e18","block_type":"box","text":"earnings, changes in interest or currency rates or generally adverse investor sentiment.","page_number":81,"box":{"x":116,"y":878,"width":654,"height":12}},{"id":"f3b2ede6-6cb1-472d-aa02-cd6d4770e2f1","block_type":"box","text":"II-33","page_number":81,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ef1dcce8-6862-46f9-8475-1eace06bd730","block_type":"box","text":"NM1026U-6033243-81/221","page_number":81,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"20ebeb0f-b4e6-4690-9215-2a9e1bffa40e","block_type":"box","text":"From time to time certain of the Funds may invest in","page_number":82,"box":{"x":117,"y":87,"width":368,"height":12}},{"id":"250949a0-b8bf-4322-a05e-4d4fc83fc06a","block_type":"box","text":"shares of companies through initial public offerings","page_number":82,"box":{"x":486,"y":87,"width":369,"height":12}},{"id":"60567c45-c3b9-4ad8-a55e-d84b6cd9d247","block_type":"box","text":"(“IPOs”). IPOs have the potential to produce, and have in fact produced, substantial gains for certain Funds.","page_number":82,"box":{"x":117,"y":102,"width":769,"height":13}},{"id":"7be64c2b-d293-4785-b25f-07608370d87d","block_type":"box","text":"There is no assurance that any Fund will have continued a","page_number":82,"box":{"x":116,"y":118,"width":415,"height":12}},{"id":"39176821-3333-4e24-a3ef-a0f9ad3c09fe","block_type":"box","text":"ccess to profitable IPOs and therefore investors","page_number":82,"box":{"x":532,"y":118,"width":343,"height":12}},{"id":"5dda0619-4335-49d1-9db3-51a471ff1dbb","block_type":"box","text":"should not rely on these past gains as an indication of future performance. The investment performance of","page_number":82,"box":{"x":116,"y":134,"width":759,"height":12}},{"id":"dd1115ed-d1a9-4fa6-a757-1f533de54d96","block_type":"box","text":"a Fund during periods when it is unable to invest signifi","page_number":82,"box":{"x":116,"y":149,"width":389,"height":12}},{"id":"f8e24572-e3b4-49be-b4d9-b53828d09a4f","block_type":"box","text":"cantly or at all in IPOs may be lower than during","page_number":82,"box":{"x":506,"y":149,"width":345,"height":12}},{"id":"d11fe3c9-b2af-4518-b55a-ce1e855a244a","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":82,"box":{"x":117,"y":165,"width":694,"height":11}},{"id":"3fc25bd8-d0ea-4bdb-95eb-990631dbe0aa","block_type":"box","text":"performance will generally decrease. Securities issued in IPOs are subject to many of the same risks as","page_number":82,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"9cea7dcd-8bb3-4aae-9247-62fabecb524d","block_type":"box","text":"investing in companies with smaller market capita","page_number":82,"box":{"x":117,"y":196,"width":351,"height":12}},{"id":"ba5410d1-5924-4248-88aa-cc191b234dee","block_type":"box","text":"lizations. Securities issued in IPOs have no trading","page_number":82,"box":{"x":470,"y":196,"width":364,"height":12}},{"id":"bd0fa196-fd4d-4163-9254-269f14b2cb8f","block_type":"box","text":"history, and information about the companies may be av","page_number":82,"box":{"x":117,"y":211,"width":399,"height":12}},{"id":"6827d8de-0075-42d3-a7cd-cec5d85fd016","block_type":"box","text":"ailable for very limited periods. In addition, the","page_number":82,"box":{"x":516,"y":211,"width":330,"height":12}},{"id":"44e1b3d2-5303-4f40-8949-1dfd692e35a8","block_type":"box","text":"prices of securities sold in IPOs may be highly volatile","page_number":82,"box":{"x":117,"y":227,"width":380,"height":12}},{"id":"cf23b6ce-b76c-4584-9599-9e0338c76352","block_type":"box","text":"or may decline shortly after the initial public offering.","page_number":82,"box":{"x":497,"y":227,"width":377,"height":12}},{"id":"d62e996f-fade-498a-8c10-0f1e057fb9c5","block_type":"box","text":"The Funds may invest in companies that have relatively small market capitalizations. These","page_number":82,"box":{"x":116,"y":258,"width":685,"height":12}},{"id":"cd772d0f-aecd-44a2-83a6-f3b2036c0a41","block_type":"box","text":"organizations will normally have more limited product lines, markets and financial resources and will be","page_number":82,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"418405d9-4a99-4742-a963-844e75f41e4e","block_type":"box","text":"dependent upon a more limited management group than larger capitalized companies. In addition, it is","page_number":82,"box":{"x":116,"y":289,"width":764,"height":12}},{"id":"f14a8c92-0b9f-4ae0-8809-cd63067089eb","block_type":"box","text":"more difficult to get information on smaller companies, which tend to be less well known, have shorter","page_number":82,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"7117073f-27ed-4b41-95e6-1eb967e395a4","block_type":"box","text":"operating histories, do not have significant ownership by large investors and are followed by relatively","page_number":82,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"41b35f98-7b11-4956-9dd5-6ed7941fab26","block_type":"box","text":"few securities analysts. The securities of smaller capitalized companies are often traded in the OTC","page_number":82,"box":{"x":116,"y":335,"width":744,"height":12}},{"id":"36bc4e6a-fb5e-4348-bf19-362109354288","block_type":"box","text":"markets and may have fewer market makers and wider price spreads. This may result in greater price","page_number":82,"box":{"x":117,"y":351,"width":760,"height":12}},{"id":"d221da76-f61e-4413-ab06-2a9e22ac77fc","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":82,"box":{"x":117,"y":366,"width":743,"height":12}},{"id":"302fafb7-381d-4bc5-b9eb-df67a08e61c7","block_type":"box","text":"more established companies.","page_number":82,"box":{"x":117,"y":382,"width":222,"height":12}},{"id":"1d629363-f3ce-4dfa-a087-9fbf1e1e2dbc","block_type":"box","text":"For a discussion of the types of equity securities in which your Fund may invest and the risks","page_number":82,"box":{"x":117,"y":413,"width":693,"height":12}},{"id":"fc7bec0b-3401-4b58-88cd-d6dd547ed62d","block_type":"box","text":"associated with investing in such equity securities, see your Fund’s Prospectus. Certain of the Funds","page_number":82,"box":{"x":116,"y":428,"width":754,"height":12}},{"id":"b39fe7d3-e02c-43d2-83c3-852096702c79","block_type":"box","text":"may also invest in shares of private companies, which are subject to the risks of “Illiquid Investments”","page_number":82,"box":{"x":117,"y":444,"width":756,"height":12}},{"id":"10f81262-0a45-415c-b298-c333415efec0","block_type":"box","text":"and “Restricted Securities” described below.","page_number":82,"box":{"x":116,"y":459,"width":334,"height":10}},{"id":"abdeca48-8f07-4b9a-8b5d-1496a60f52d9","block_type":"box","text":"Real Estate-Related Securities.","page_number":82,"box":{"x":116,"y":490,"width":232,"height":10}},{"id":"d8614a3f-8ae2-4894-93eb-99d8592af0dc","block_type":"box","text":"Although no Fund may invest directly in real estate, certain Funds may","page_number":82,"box":{"x":349,"y":490,"width":535,"height":12}},{"id":"0e8c7dbb-2160-4a4c-b77a-ea94bdcbc39b","block_type":"box","text":"invest in equity securities of issuers that are principally engaged in the real estate industry. Such","page_number":82,"box":{"x":117,"y":506,"width":719,"height":12}},{"id":"f96dc378-ee4b-4727-a666-58f4843da438","block_type":"box","text":"investments are subject to certain risks associated with the ownership of real estate and with the real","page_number":82,"box":{"x":117,"y":521,"width":753,"height":12}},{"id":"31715fe5-8ba8-48e6-bf7f-f69561c84000","block_type":"box","text":"estate industry in general. These risks include, among others: possible declines in the value of real","page_number":82,"box":{"x":116,"y":537,"width":738,"height":12}},{"id":"021f0394-17ed-40a0-920b-669233cc10e1","block_type":"box","text":"estate; risks related to general and local economic conditions; possible lack of availability of mortgage","page_number":82,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"93158b4b-6d6b-4163-a24b-3461a8d1264b","block_type":"box","text":"funds or other limitations on access to capital; overbuilding; risks associated with leverage; market","page_number":82,"box":{"x":116,"y":568,"width":734,"height":12}},{"id":"f3844737-ce0b-412c-8b37-3a8f276a1d5b","block_type":"box","text":"illiquidity; extended vacancies of properties; increase in competition, property taxes, capital","page_number":82,"box":{"x":117,"y":583,"width":679,"height":12}},{"id":"bbc0966f-2a4e-4055-8b01-1265d5f2e2d1","block_type":"box","text":"expenditures and operating expenses; changes in zoning laws or other governmental regulation; costs","page_number":82,"box":{"x":116,"y":599,"width":765,"height":12}},{"id":"85f46c14-2bb3-47db-8f23-9cedba4fffeb","block_type":"box","text":"resulting from the clean-up of, and liability to third parties for damages resulting from, environmental","page_number":82,"box":{"x":117,"y":614,"width":746,"height":12}},{"id":"ee1d1e85-a0de-4e3e-a542-57d78b1c29f8","block_type":"box","text":"problems; tenant bankruptcies or other credit problems; casualty or condemnation losses; uninsured","page_number":82,"box":{"x":117,"y":630,"width":748,"height":12}},{"id":"a1c486fe-14a2-4d42-a7c7-12cb58189454","block_type":"box","text":"damages from floods, earthquakes or other natural disasters; limitations on and variations in rents,","page_number":82,"box":{"x":116,"y":645,"width":736,"height":12}},{"id":"d5b39adf-0c54-437b-83be-37d189101802","block_type":"box","text":"including decreases in market rates for rents; investment in developments that are not completed or","page_number":82,"box":{"x":117,"y":661,"width":740,"height":12}},{"id":"5a138832-559c-4a8f-9215-c71468eb5b3a","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":83,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"408bf8e0-2447-449e-9a14-efea3ac1931a","block_type":"box","text":"erratic market movements than larger, more established companies or the market average in general.","page_number":83,"box":{"x":116,"y":103,"width":761,"height":12}},{"id":"366bd325-cd71-4c5c-8783-b27b06bcd323","block_type":"box","text":"These companies may have limited product lines, markets or financial resources, or they may be","page_number":83,"box":{"x":116,"y":118,"width":723,"height":12}},{"id":"b826eaaa-6082-42d3-acbb-5b9a03dfec3d","block_type":"box","text":"dependent on a limited management group.","page_number":83,"box":{"x":116,"y":134,"width":330,"height":12}},{"id":"42c8831b-f322-4cee-a9c4-8f777f0c8a09","block_type":"box","text":"Investments in smaller or emerging growth companies may involve greater risks and thus may be","page_number":83,"box":{"x":117,"y":163,"width":771,"height":12}},{"id":"7179a280-7068-4a4f-abf0-cdf2ff247beb","block_type":"box","text":"considered speculative. Full development of these companies and trends frequently takes time.","page_number":83,"box":{"x":116,"y":178,"width":713,"height":12}},{"id":"efc07274-42d6-4d43-981f-39a35fc68843","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":83,"box":{"x":116,"y":207,"width":762,"height":12}},{"id":"03712f40-6269-4368-811e-7892d55ab31e","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":83,"box":{"x":116,"y":223,"width":757,"height":12}},{"id":"13539c3c-e110-4165-89dd-cf19f6ba991f","block_type":"box","text":"securities exchange. As a result, the disposition by a Fund of portfolio securities to meet redemptions","page_number":83,"box":{"x":116,"y":238,"width":756,"height":12}},{"id":"42d4129d-f283-4b71-8d84-cc09042f3178","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":83,"box":{"x":116,"y":254,"width":749,"height":12}},{"id":"0eb0e263-2416-444c-91fd-cbeb47f8443c","block_type":"box","text":"these securities at a discount from market prices or during periods when, in Fund management’s","page_number":83,"box":{"x":116,"y":269,"width":722,"height":12}},{"id":"c6adcffb-7b23-4655-bd41-17898f8c3e77","block_type":"box","text":"judgment, such disposition is not desirable.","page_number":83,"box":{"x":115,"y":285,"width":326,"height":12}},{"id":"4cc0d2a0-3b43-44e4-8a04-c3059b86bd18","block_type":"box","text":"The process of selection and continuous supervision by Fund management does not guarantee","page_number":83,"box":{"x":116,"y":314,"width":714,"height":12}},{"id":"2bbc3bbd-05d1-49a3-b945-673a69ffee0f","block_type":"box","text":"successful investment results. Careful initial selection is particularly important in this area as many new","page_number":83,"box":{"x":116,"y":329,"width":770,"height":12}},{"id":"99aaca34-22a1-40fd-9ffd-b698c99a10cc","block_type":"box","text":"enterprises have promise but lack certain of the fundamental factors necessary to prosper. Investing in","page_number":83,"box":{"x":116,"y":345,"width":767,"height":12}},{"id":"e7aaa549-9cf4-4531-98ba-1598d9d9518b","block_type":"box","text":"small cap and emerging growth companies requires specialized research and analysis.","page_number":83,"box":{"x":116,"y":360,"width":651,"height":12}},{"id":"3a84f299-21c2-4bcd-b57c-61a7349188d8","block_type":"box","text":"Fund management believes that relatively small companies may have the opportunity to develop into","page_number":83,"box":{"x":117,"y":389,"width":753,"height":12}},{"id":"9dd6ad58-9952-4e49-8a78-a04f2faeb619","block_type":"box","text":"significant business enterprises. A Fund may invest in securities of small issuers in the relatively early","page_number":83,"box":{"x":116,"y":405,"width":759,"height":12}},{"id":"389c5e32-5dfd-4ed5-af73-9272a873a18b","block_type":"box","text":"stages of business development that have a new technology, a unique or proprietary product or","page_number":83,"box":{"x":116,"y":420,"width":714,"height":12}},{"id":"8850f1c3-acae-4517-b08d-c3b4c8fd1c20","block_type":"box","text":"service, or a favorable market position.","page_number":83,"box":{"x":116,"y":436,"width":294,"height":12}},{"id":"7bee147a-80ab-46c0-aaa9-b9eea442e72a","block_type":"box","text":"Equity securities of specific small cap issuers may present different opportunities for long-term capital","page_number":83,"box":{"x":117,"y":465,"width":757,"height":12}},{"id":"ed31edb5-ecaf-4022-b18b-aee097b1ef30","block_type":"box","text":"appreciation during varying portions of economic or securities market cycles, as well as during varying","page_number":83,"box":{"x":116,"y":480,"width":763,"height":13}},{"id":"e5fee21e-2b5c-43f4-976a-2e348ce24d22","block_type":"box","text":"stages of their business development. The market valuation of small cap issuers tends to fluctuate","page_number":83,"box":{"x":116,"y":496,"width":734,"height":12}},{"id":"b15ea557-398f-4502-abca-259d0d79f917","block_type":"box","text":"during economic or market cycles.","page_number":83,"box":{"x":116,"y":512,"width":260,"height":12}},{"id":"89c8c752-847b-4a38-9c86-085ccba96d3e","block_type":"box","text":"Tracking Stocks","page_number":83,"box":{"x":118,"y":540,"width":117,"height":13}},{"id":"bb3abe4a-9b4f-4cd2-b0c6-f3a7abc9234c","block_type":"box","text":". A tracking stock is a separate class of common stock whose value is linked to a","page_number":83,"box":{"x":237,"y":540,"width":604,"height":13}},{"id":"6ac0e122-3828-4c5c-ba37-618998bd91ca","block_type":"box","text":"specific business unit or operating division within a larger company and is designed to “track” the","page_number":83,"box":{"x":116,"y":556,"width":723,"height":12}},{"id":"1ef8171c-a852-4538-86c8-e908cd4b52a1","block_type":"box","text":"performance of such business unit or division. The tracking stock may pay dividends to shareholders","page_number":83,"box":{"x":117,"y":571,"width":751,"height":13}},{"id":"0dc491b5-da11-4f93-8744-ca6f0edd2f3a","block_type":"box","text":"independent of the parent company. The parent company, rather than the business unit or division,","page_number":83,"box":{"x":117,"y":587,"width":739,"height":12}},{"id":"fd8653f9-38e2-4cf3-a26b-c510ee95a674","block_type":"box","text":"generally is the issuer of tracking stock. However, holders of the tracking stock may not have the same","page_number":83,"box":{"x":116,"y":602,"width":768,"height":13}},{"id":"864e98b0-5f8e-4f6f-a803-bc6f4e4669fe","block_type":"box","text":"rights as holders of the company’s common stock.","page_number":83,"box":{"x":117,"y":618,"width":377,"height":12}},{"id":"75175989-4277-498f-a4ab-d2cbb7be7fab","block_type":"box","text":"Exchange-Traded Notes (“ETNs”).","page_number":83,"box":{"x":116,"y":647,"width":271,"height":12}},{"id":"e897173b-2fbb-4b49-8f9d-51e86fd6ff08","block_type":"box","text":"Certain Funds may invest in ETNs. ETNs are generally notes","page_number":83,"box":{"x":389,"y":647,"width":464,"height":12}},{"id":"d7246f11-6b44-4c02-8612-bed3168e235e","block_type":"box","text":"representing debt of the issuer, usually a financial institution. ETNs combine aspects of both bonds and","page_number":83,"box":{"x":117,"y":663,"width":765,"height":12}},{"id":"241496ae-b032-465e-8463-3a99311af22d","block_type":"box","text":"ETFs. An ETN’s returns are based on the performance of one or more underlying assets, reference","page_number":83,"box":{"x":117,"y":678,"width":737,"height":12}},{"id":"b2f51c64-b788-40d2-90b7-8c45f7b20ce2","block_type":"box","text":"rates or indexes, minus fees and expenses. Similar to ETFs, ETNs are listed on an exchange and","page_number":83,"box":{"x":117,"y":694,"width":724,"height":12}},{"id":"899e28ae-ec9c-4ae0-aa24-e6e51b9659dc","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":83,"box":{"x":116,"y":709,"width":761,"height":12}},{"id":"b77d06db-c289-4b4b-9b36-2eca6bf42a47","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":83,"box":{"x":116,"y":725,"width":748,"height":12}},{"id":"94ad1c5d-b395-4448-aaf3-709104456634","block_type":"box","text":"(“reference instrument”) to which the ETN is linked minus certain fees. Unlike regular bonds, ETNs do","page_number":83,"box":{"x":117,"y":740,"width":753,"height":12}},{"id":"5e367173-ffce-4d57-951a-cc069a01cd2c","block_type":"box","text":"not make periodic interest payments, and principal is not protected.","page_number":83,"box":{"x":117,"y":756,"width":497,"height":12}},{"id":"37d802db-5688-4f2f-840c-cd9c8d63f12a","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":83,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"1f3e0b8a-1ab4-4d41-80ed-0c80ca27e5c8","block_type":"box","text":"demand for the ETN, volatility and lack of liquidity in underlying markets, changes in the applicable","page_number":83,"box":{"x":116,"y":800,"width":731,"height":12}},{"id":"cf4d05f9-d5e4-40f0-83c7-22257e40333e","block_type":"box","text":"interest rates, the performance of the reference instrument, changes in the issuer’s credit rating and","page_number":83,"box":{"x":117,"y":816,"width":739,"height":12}},{"id":"475fa87a-4446-470c-bd1f-adcc431e1f57","block_type":"box","text":"economic, legal, political or geographic events that affect the reference instrument. ETNs are subject to","page_number":83,"box":{"x":116,"y":831,"width":772,"height":12}},{"id":"30216e1d-2cf9-4e0e-8ac3-3de5d5f75484","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":83,"box":{"x":116,"y":847,"width":755,"height":12}},{"id":"2a56556d-b418-4557-992a-288f30c4d7a7","block_type":"box","text":"the underlying reference instrument remaining unchanged. When a Fund invests in ETNs, it will bear","page_number":83,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"c2286b9b-73f1-4599-8763-94035c85c604","block_type":"box","text":"its proportionate share of any fees and expenses borne by the ETN.","page_number":83,"box":{"x":117,"y":878,"width":509,"height":12}},{"id":"f0b490c5-b714-47ae-bf66-b1f182150928","block_type":"box","text":"II-35","page_number":83,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"51e2a11a-ddd9-4354-99a3-80e29a7523c2","block_type":"box","text":"NM1026U-6033243-83/221","page_number":83,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"c62dc205-c267-4ce8-89d9-3964e330257e","block_type":"box","text":"An ETN that is tied to a reference instrument may not replicate the performance of the reference","page_number":84,"box":{"x":116,"y":87,"width":720,"height":12}},{"id":"bbc2dabf-0a41-4c8d-9248-8e30094d09a7","block_type":"box","text":"instrument. ETNs also incur certain expenses not incurred by their applicable reference instrument.","page_number":84,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"a094c1ed-39dd-4092-9d06-3d030ba60d65","block_type":"box","text":"Some ETNs that use leverage may, at times, be illiquid and","page_number":84,"box":{"x":116,"y":118,"width":446,"height":12}},{"id":"573e1b40-371f-4a40-8d9a-25e1a992e11f","block_type":"box","text":"may be difficult to purchase or sell at a fair","page_number":84,"box":{"x":563,"y":118,"width":319,"height":12}},{"id":"01fe3a11-6dbd-466e-a2f2-0ef4f052a5cc","block_type":"box","text":"price. Levered ETNs are subject to the same risk as other instruments that use leverage in any form.","page_number":84,"box":{"x":117,"y":134,"width":751,"height":12}},{"id":"0036e013-1eb3-4477-bb2d-c05b5f20c2c5","block_type":"box","text":"While leverage allows for greater potential return, the potential for loss is also greater. Finally,","page_number":84,"box":{"x":116,"y":149,"width":700,"height":12}},{"id":"a9bf7886-a0a5-45a4-a91a-a4e49cc66ab2","block_type":"box","text":"additional losses may be incurred if the investment loses value because, in addition to the money lost","page_number":84,"box":{"x":116,"y":165,"width":757,"height":12}},{"id":"97cc1d9f-ca98-4d64-9d64-4363809076b8","block_type":"box","text":"on the investment, the loan still needs to be repaid.","page_number":84,"box":{"x":116,"y":180,"width":384,"height":12}},{"id":"6183f7e7-e8c0-46fa-9dd4-e8a40735e687","block_type":"box","text":"Because the return on the ETN is dependent on the issuer’s ability or willingness to meet its","page_number":84,"box":{"x":117,"y":210,"width":685,"height":12}},{"id":"f84182b5-005a-4b27-ba7a-739fee2b575b","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":84,"box":{"x":116,"y":226,"width":757,"height":12}},{"id":"d20303d7-dd06-4750-b3f8-c36c213d2b3b","block_type":"box","text":"change in the underlying reference instrument. The market value of ETN shares may differ from the","page_number":84,"box":{"x":116,"y":241,"width":744,"height":12}},{"id":"e9b21e77-0713-464b-81c6-cc3a6667eef6","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":84,"box":{"x":116,"y":257,"width":748,"height":12}},{"id":"a6a26571-a262-4532-9615-a8ed2b6110e8","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":84,"box":{"x":116,"y":272,"width":732,"height":12}},{"id":"967b0180-2844-45f6-ba4a-c02821f28330","block_type":"box","text":"demand in the market for the assets underlying the reference instrument that the ETN seeks to track.","page_number":84,"box":{"x":116,"y":288,"width":755,"height":12}},{"id":"8936484b-1cc2-440a-a2e6-26650f17c19f","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":84,"box":{"x":116,"y":318,"width":761,"height":12}},{"id":"5831a1e5-5f21-4189-a9a9-66ac1d5b7744","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":84,"box":{"x":117,"y":333,"width":728,"height":12}},{"id":"11ce6fee-27c7-4690-918f-dd821a7c0ada","block_type":"box","text":"availability of a secondary market. An investor in an ETN could lose some or all of the amount","page_number":84,"box":{"x":116,"y":349,"width":701,"height":12}},{"id":"7221bc2f-3ce8-47f5-9834-4f905709aee9","block_type":"box","text":"invested.","page_number":84,"box":{"x":117,"y":364,"width":71,"height":10}},{"id":"c4411f8d-2da4-48cf-9a10-da0d2ed5b0fc","block_type":"box","text":"ETNs are also subject to tax risks. The Internal Revenue Service (the “IRS”) may not accept, and a","page_number":84,"box":{"x":117,"y":394,"width":739,"height":12}},{"id":"b4921d18-9289-4645-87bf-2adf5e243170","block_type":"box","text":"court may not uphold, how the Funds characterize and treat ETNs for tax purposes. The timing and","page_number":84,"box":{"x":116,"y":410,"width":742,"height":12}},{"id":"e0b9b461-3f65-4727-8c03-c61cbaec5c30","block_type":"box","text":"character of income and gains derived by a Fund from investments in ETNs may be affected by future","page_number":84,"box":{"x":116,"y":425,"width":762,"height":12}},{"id":"a774063b-00b4-4fe7-b5b0-c157226b5162","block_type":"box","text":"legislation.","page_number":84,"box":{"x":117,"y":441,"width":83,"height":12}},{"id":"9fea9c96-c0b3-419e-adc8-3cfaad65254c","block_type":"box","text":"Foreign Investments.","page_number":84,"box":{"x":116,"y":471,"width":174,"height":12}},{"id":"6cc960a7-3a7c-42ea-a923-d7adf15084f7","block_type":"box","text":"Foreign Investment Risks.","page_number":84,"box":{"x":116,"y":494,"width":193,"height":12}},{"id":"95fabb0e-e912-4bb0-9d57-d777b6bdb88a","block_type":"box","text":"Certain Funds may invest in foreign securities, including securities from","page_number":84,"box":{"x":310,"y":493,"width":540,"height":13}},{"id":"efd70822-4806-455e-9972-bf5945b9cbe8","block_type":"box","text":"issuers located in emerging market countries. These securities may be denominated in U.S. dollars or","page_number":84,"box":{"x":117,"y":509,"width":760,"height":12}},{"id":"833c2046-9184-4bab-b2ff-bdb0cc2d2240","block_type":"box","text":"in a foreign currency. Investing in foreign securities involves risks not typically associated with investing","page_number":84,"box":{"x":117,"y":524,"width":770,"height":13}},{"id":"66b9b4f0-7861-4d3f-98dd-37545eccbf80","block_type":"box","text":"in securities of companies organized and operated in the United States that can increase the chances","page_number":84,"box":{"x":117,"y":540,"width":759,"height":12}},{"id":"9269e8b9-6176-4993-b87d-0b1f3a46c896","block_type":"box","text":"that a Fund will lose money.","page_number":84,"box":{"x":116,"y":556,"width":213,"height":12}},{"id":"195f70fe-424e-4bab-89e8-94ed6a028763","block_type":"box","text":"Securities issued by certain companies organized outside the United States may not be deemed to be","page_number":84,"box":{"x":116,"y":586,"width":762,"height":12}},{"id":"2fa8fbf7-d6af-4852-8df0-4080bde4773d","block_type":"box","text":"foreign securities (but rather deemed to be U.S. securities) if (i) the company’s principal operations are","page_number":84,"box":{"x":116,"y":601,"width":766,"height":12}},{"id":"7fc7a705-ef41-4aa4-b0c3-ff20b95c45df","block_type":"box","text":"conducted from the U.S., (ii) the company’s equity securities trade principally on a U.S. stock","page_number":84,"box":{"x":116,"y":617,"width":694,"height":12}},{"id":"abab5a22-caa7-4716-bc16-a3d87bc7d001","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":84,"box":{"x":116,"y":632,"width":729,"height":12}},{"id":"b18516f7-e971-4f55-8cb2-ca46ca18541d","block_type":"box","text":"securities is included in the Fund’s primary U.S. benchmark index.","page_number":84,"box":{"x":116,"y":648,"width":496,"height":12}},{"id":"7021b606-48eb-42ad-b56b-5043f3b4e9b0","block_type":"box","text":"In addition to equity securities, foreign investments of the Funds may include: (a) debt obligations","page_number":84,"box":{"x":117,"y":678,"width":721,"height":12}},{"id":"05db7a81-1684-41dc-9f70-aa1d2ff989bb","block_type":"box","text":"issued or guaranteed by foreign sovereign governments or their agencies, authorities, instrumentalities","page_number":84,"box":{"x":117,"y":693,"width":762,"height":12}},{"id":"22a49872-90d4-44aa-a984-c9aa99a1e4b6","block_type":"box","text":"or political subdivisions, including a foreign state, province or municipality; (b) debt obligations of","page_number":84,"box":{"x":116,"y":709,"width":716,"height":12}},{"id":"b49dce44-b96c-4fba-8779-58c7b7b3386c","block_type":"box","text":"supranational organizations; (c) debt obligations of foreign banks and bank holding companies;","page_number":84,"box":{"x":116,"y":724,"width":703,"height":12}},{"id":"6d6c8211-d5ae-47f9-ad66-4b4916bf6c0e","block_type":"box","text":"(d) debt obligations of domestic banks and corporations issued in foreign currencies; (e) debt","page_number":84,"box":{"x":117,"y":740,"width":689,"height":12}},{"id":"80d2f303-7103-4418-927f-6641aabe155b","block_type":"box","text":"obligations denominated in the Euro; and (f) foreign corporate debt securities and commercial paper.","page_number":84,"box":{"x":116,"y":755,"width":746,"height":12}},{"id":"e192950f-ce98-4884-bcae-b6a443fb6b65","block_type":"box","text":"Such securities may include loan participations and assignments, convertible securities and","page_number":84,"box":{"x":116,"y":771,"width":678,"height":12}},{"id":"35b911fb-8836-455b-8ecc-b29cf4414cc4","block_type":"box","text":"zero-coupon securities.","page_number":84,"box":{"x":116,"y":786,"width":172,"height":12}},{"id":"7809ed2b-aa21-414d-bdec-0757c8d6cc55","block_type":"box","text":"Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to foreign","page_number":84,"box":{"x":117,"y":816,"width":723,"height":12}},{"id":"5804d0b9-e20f-424f-acd6-8337c93454c1","block_type":"box","text":"withholding taxes.","page_number":84,"box":{"x":116,"y":832,"width":138,"height":12}},{"id":"24cc9984-5c5a-4a4b-9323-75d6e80a6334","block_type":"box","text":"To the extent that the underlying securities or other instruments held by a Fund trade on foreign","page_number":84,"box":{"x":116,"y":862,"width":715,"height":12}},{"id":"73ca41e4-dbf3-447c-9cad-c8ff00b4dea8","block_type":"box","text":"exchanges or in foreign markets that are closed when the securities exchange on which the Fund’s","page_number":84,"box":{"x":116,"y":877,"width":740,"height":12}},{"id":"cbe2e189-16ae-41a0-890c-3cc0d61dc4e9","block_type":"box","text":"II-36","page_number":84,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e2968d45-ad49-434c-9c65-13de6d7a96eb","block_type":"box","text":"NM1026U-6033243-84/221","page_number":84,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"62a70422-7f1c-4d2c-ba33-94ca6c3dd7b2","block_type":"box","text":"shares trade is open, there are likely to be deviations between the current price of such an underlying","page_number":85,"box":{"x":116,"y":87,"width":758,"height":12}},{"id":"6cdc5d47-4892-4a55-be52-e9b71dfa11d8","block_type":"box","text":"security and the last quoted price for the underlying security (","page_number":85,"box":{"x":116,"y":102,"width":454,"height":13}},{"id":"8b1a3591-614c-4eab-a6fa-6f314bac9de1","block_type":"box","text":"i.e.","page_number":85,"box":{"x":571,"y":103,"width":20,"height":9}},{"id":"62bd2d7f-4f62-4a29-9111-93448bcc88b7","block_type":"box","text":", the Fund’s quote from the closed","page_number":85,"box":{"x":594,"y":102,"width":258,"height":12}},{"id":"e2b6e0dd-a3a3-4989-bcd4-7aac2e0dc502","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":85,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"699d2061-f17f-4f2d-9eee-8f0cdf3090f1","block_type":"box","text":"portion of the Fund’s underlying securities or other instruments trade on that closed foreign market or","page_number":85,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"6b74edf8-3859-4dba-aaa5-93bd36926398","block_type":"box","text":"when the foreign market is closed for unscheduled reasons. These deviations may result in premiums","page_number":85,"box":{"x":116,"y":149,"width":759,"height":12}},{"id":"c778b5b7-f938-40e2-8fb3-00bf53bf706f","block_type":"box","text":"or discounts to certain Funds’ NAVs that may be greater than those experienced by other ETFs.","page_number":85,"box":{"x":116,"y":165,"width":718,"height":12}},{"id":"060e3ea7-3bb0-4eaf-b04f-e9f07b8f12b4","block_type":"box","text":"Foreign Market Risk.","page_number":85,"box":{"x":116,"y":196,"width":152,"height":12}},{"id":"06d0354f-d9a9-4ab9-b0da-f50148ae0de7","block_type":"box","text":"Funds that may invest in foreign securities offer the potential for more","page_number":85,"box":{"x":269,"y":196,"width":521,"height":12}},{"id":"9b410b4e-3179-4a2d-bb5c-7ae2901f8440","block_type":"box","text":"diversification than a Fund that invests only in the United States because securities traded on foreign","page_number":85,"box":{"x":116,"y":211,"width":746,"height":12}},{"id":"a2faa17d-f654-493e-9264-892320195a83","block_type":"box","text":"markets have often (though not always) performed differently from securities traded in the United","page_number":85,"box":{"x":117,"y":227,"width":715,"height":12}},{"id":"bcb85aea-6940-4051-91fe-df91190adb0c","block_type":"box","text":"States. However, such investments often involve risks not present in U.S. investments that can increase","page_number":85,"box":{"x":116,"y":242,"width":769,"height":12}},{"id":"2526268b-6f70-40a0-bdc4-cb85ea74fcf1","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":85,"box":{"x":116,"y":258,"width":756,"height":12}},{"id":"fd9ed2f8-b311-40f5-8e00-079e8efe1734","block_type":"box","text":"are generally fewer investors on foreign exchanges and a smaller number of shares traded each day, it","page_number":85,"box":{"x":116,"y":273,"width":762,"height":12}},{"id":"bff98cca-ce91-4785-9912-13a6a7dda622","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":85,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"dd844b72-c35f-4e0d-86a8-230b2bd888ee","block_type":"box","text":"securities may fluctuate more than prices of securities traded in the United States. Investments in","page_number":85,"box":{"x":116,"y":304,"width":719,"height":12}},{"id":"e4c96548-af99-45b6-92d0-aedbe5f2f8b6","block_type":"box","text":"foreign markets may also be adversely affected by governmental actions such as the imposition of","page_number":85,"box":{"x":116,"y":320,"width":727,"height":12}},{"id":"2e25bcb5-4b25-4248-8a22-9e843ca13363","block_type":"box","text":"punitive taxes or tariffs. In addition, economic conditions, such as volatile currency exchange rates and","page_number":85,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"12bf5386-16ef-4c6b-a1a1-58afd338645f","block_type":"box","text":"interest rates, political events, military action and other conditions may, without prior warning, lead to the","page_number":85,"box":{"x":117,"y":351,"width":770,"height":12}},{"id":"c8a968a1-ae31-482b-a55a-ac46db88ffcc","block_type":"box","text":"governments of certain countries, or the U.S. Government with respect to certain countries, prohibiting","page_number":85,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"d7f0f755-b84c-4bd5-8b22-8d9d5eaebcff","block_type":"box","text":"or imposing substantial restrictions through capital controls and/or sanctions on foreign investing in the","page_number":85,"box":{"x":116,"y":382,"width":758,"height":12}},{"id":"2753569b-87ee-49aa-aad7-b9b169ab93a3","block_type":"box","text":"capital markets or certain industries in those countries. Capital controls and/or sanctions may include","page_number":85,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"4be362b7-1641-4b23-9706-4e1dfb7f42c2","block_type":"box","text":"the prohibition of, or restrictions on, the ability to own or transfer currency, securities, derivatives or","page_number":85,"box":{"x":116,"y":413,"width":730,"height":12}},{"id":"01c5f60d-75ed-4f85-8445-01e23f3a9609","block_type":"box","text":"other assets and may also include retaliatory actions of one government against another government,","page_number":85,"box":{"x":116,"y":428,"width":752,"height":12}},{"id":"056cdee3-59b4-44d2-885f-46a3853c470c","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":85,"box":{"x":116,"y":444,"width":758,"height":12}},{"id":"1675eed8-140d-419b-ae63-bcf84c17163e","block_type":"box","text":"transfer, receive, deliver or otherwise obtain exposure to foreign securities and assets, including the","page_number":85,"box":{"x":116,"y":459,"width":738,"height":12}},{"id":"76f31b36-c7c8-4e0f-9e9e-9c56a9469416","block_type":"box","text":"ability to transfer the Fund’s assets or income back into the United States, and could negatively impact","page_number":85,"box":{"x":116,"y":475,"width":758,"height":12}},{"id":"57ca6d38-4c6a-4ad0-825b-656b62ddba51","block_type":"box","text":"the value and/or liquidity of such assets or otherwise adversely affect a Fund’s operations, causing the","page_number":85,"box":{"x":116,"y":490,"width":757,"height":12}},{"id":"73b9a023-37bd-4cba-b6cf-b55da96e18c3","block_type":"box","text":"Fund to decline in value. Other potential foreign market risks include exchange controls, difficulties in","page_number":85,"box":{"x":117,"y":506,"width":745,"height":12}},{"id":"bb6823ac-e53a-477c-b2ec-5e03d96c8767","block_type":"box","text":"pricing securities, defaults on foreign government securities, difficulties in enforcing favorable legal","page_number":85,"box":{"x":117,"y":521,"width":727,"height":12}},{"id":"b8010039-63fb-42d8-b761-d92eaad2a108","block_type":"box","text":"judgments in foreign courts, and political and social conditions, such as diplomatic relations,","page_number":85,"box":{"x":115,"y":537,"width":680,"height":12}},{"id":"d32c85df-70c9-47a7-ae50-99c08bfa68f5","block_type":"box","text":"confiscatory taxation, expropriation, limitation on the removal of funds or assets, or imposition of (or","page_number":85,"box":{"x":116,"y":552,"width":735,"height":12}},{"id":"f81829a5-5051-4d26-880b-0e2b232fe48e","block_type":"box","text":"change in) exchange control regulations. Legal remedies available to investors in certain foreign","page_number":85,"box":{"x":116,"y":568,"width":711,"height":12}},{"id":"8e30b542-be89-465a-b208-34feb34df953","block_type":"box","text":"countries may be less extensive than those available to investors in the United States or other foreign","page_number":85,"box":{"x":116,"y":583,"width":751,"height":12}},{"id":"8d6c4a88-c4f4-4eb2-8ab5-a7628a08a7a6","block_type":"box","text":"countries. In addition, changes in government administrations or economic or monetary policies in the","page_number":85,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"398a68f5-10ef-4329-ab35-67e8b791e067","block_type":"box","text":"United States or abroad could result in appreciation or depreciation of portfolio securities and could","page_number":85,"box":{"x":117,"y":614,"width":731,"height":12}},{"id":"ab5b4ea8-aabf-4a0d-b44b-9a9392931922","block_type":"box","text":"favorably or adversely affect a Fund’s operations.","page_number":85,"box":{"x":116,"y":630,"width":368,"height":12}},{"id":"535ad295-2fff-4693-832f-1fec7f533b4e","block_type":"box","text":"Foreign Economy Risk.","page_number":85,"box":{"x":116,"y":661,"width":172,"height":12}},{"id":"5ae4a985-e0f4-41b7-b457-7fe359e80926","block_type":"box","text":"The economies of certain foreign markets often do not compare favorably with","page_number":85,"box":{"x":295,"y":661,"width":579,"height":12}},{"id":"91c492aa-5ab0-4ea9-9966-de521d457fcc","block_type":"box","text":"that of the United States with respect to such issues as growth of gross national product, reinvestment","page_number":85,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"a6e66a07-7e62-4ba6-9c19-94a92126511f","block_type":"box","text":"of capital, resources, and balance of payments position. Certain such economies may rely heavily on","page_number":85,"box":{"x":116,"y":692,"width":748,"height":12}},{"id":"9802a497-699d-4337-84fd-1096d013444a","block_type":"box","text":"particular industries or foreign capital and are more vulnerable to diplomatic developments, the","page_number":85,"box":{"x":117,"y":707,"width":702,"height":12}},{"id":"f06db174-ed0b-4f5d-9ca4-fbf04cdf4e5b","block_type":"box","text":"imposition of economic sanctions against a particular country or countries, changes in international","page_number":85,"box":{"x":117,"y":723,"width":731,"height":12}},{"id":"4cbe4a99-393f-4a0b-9d8b-88b7b56ba555","block_type":"box","text":"trading patterns, trade barriers, and other protectionist or retaliatory measures.","page_number":85,"box":{"x":116,"y":738,"width":582,"height":12}},{"id":"d4e028c8-1e14-46f1-8f76-5fd1b47c07b5","block_type":"box","text":"Currency Risk and Exchange Risk.","page_number":85,"box":{"x":117,"y":769,"width":257,"height":12}},{"id":"fa298b48-13d1-4903-93eb-319a7038f590","block_type":"box","text":"Because foreign securities generally are denominated and pay","page_number":85,"box":{"x":382,"y":769,"width":464,"height":12}},{"id":"fd288fec-7930-44c5-8634-57bd33d2d7ae","block_type":"box","text":"dividends or interest in foreign currencies, the value of a Fund that invests in foreign securities as","page_number":85,"box":{"x":116,"y":785,"width":721,"height":12}},{"id":"616c79ea-c071-4b04-8c66-a5d3411b0649","block_type":"box","text":"measured in U.S. dollars will be affected favorably or unfavorably by changes in exchange rates.","page_number":85,"box":{"x":117,"y":800,"width":715,"height":12}},{"id":"794476f0-c2e7-41cd-892e-d51d827cfdb2","block_type":"box","text":"Generally, when the U.S. dollar rises in value against a foreign currency, a security denominated in","page_number":85,"box":{"x":117,"y":816,"width":733,"height":12}},{"id":"23f4330e-1778-42d3-94d7-9374e521068b","block_type":"box","text":"that currency loses value because the currency is worth fewer U.S. dollars. Conversely, when the U.S.","page_number":85,"box":{"x":116,"y":831,"width":765,"height":12}},{"id":"65d91f2e-97cd-42ac-a902-be1c810c668c","block_type":"box","text":"dollar decreases in value against a foreign currency, a security denominated in that currency gains","page_number":85,"box":{"x":116,"y":847,"width":737,"height":12}},{"id":"5750c9c5-7d8f-4265-b555-818cb84b8fb8","block_type":"box","text":"value because the currency is worth more U.S. dollars. This risk, generally known as “currency risk,”","page_number":85,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"6301d6fa-ef35-44a4-a2d6-76f4f47f0225","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":85,"box":{"x":117,"y":878,"width":738,"height":12}},{"id":"1894d451-5905-434c-9e1e-289c3ec0c765","block_type":"box","text":"II-37","page_number":85,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"579d6500-7f35-4871-85e0-ae4c57fc02b3","block_type":"box","text":"NM1026U-6033243-85/221","page_number":85,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"14d55c35-225a-4bd3-91fc-174b1e2298b7","block_type":"box","text":"increase those returns. Currency exchange rates can also be affected unpredictably by intervention by","page_number":86,"box":{"x":117,"y":87,"width":764,"height":12}},{"id":"12735b01-db3d-4648-8b13-7d9a80c4fa7e","block_type":"box","text":"U.S. or foreign governments or central banks, or the failure to intervene, or buy currency controls or","page_number":86,"box":{"x":117,"y":102,"width":743,"height":13}},{"id":"b6ccb3a5-9eff-4b57-af31-6525269d300e","block_type":"box","text":"political developments in the United States or abroad.","page_number":86,"box":{"x":117,"y":118,"width":402,"height":12}},{"id":"094940c6-6737-4c7e-a3a6-b7c62f288f18","block_type":"box","text":"Governmental Supervision and Regulation/Accounting Standards. Many foreign governments","page_number":86,"box":{"x":117,"y":149,"width":697,"height":12}},{"id":"5913421f-5fec-4046-97e0-5691ecf2a903","block_type":"box","text":"supervise and regulate stock exchanges, brokers and the sale of securities less than does the United","page_number":86,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"5aa39e74-a3d0-4c50-b522-440d451f7b0e","block_type":"box","text":"States. Some countries may not have laws to protect investors comparable to the U.S. securities laws.","page_number":86,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"65f3d64c-82a1-4711-ab81-99972fac1a1a","block_type":"box","text":"For example, some foreign countries may have no laws or rules against insider trading. Insider trading","page_number":86,"box":{"x":117,"y":196,"width":762,"height":12}},{"id":"e60446bb-ff8d-4ac9-b10f-c4a0c5b79bbe","block_type":"box","text":"occurs when a person buys or sells a company’s securities based on nonpublic information about that","page_number":86,"box":{"x":116,"y":211,"width":760,"height":12}},{"id":"1b87f430-2122-45c5-b6ed-93a1ff0bb383","block_type":"box","text":"company. Accounting standards in other countries are not necessarily the same as in the United","page_number":86,"box":{"x":116,"y":227,"width":719,"height":12}},{"id":"ef2f5dc7-5f6b-44dc-9c7c-efa991b40fc9","block_type":"box","text":"States. If the accounting standards in another country do not require as much detail as U.S. accounting","page_number":86,"box":{"x":116,"y":242,"width":771,"height":12}},{"id":"0adbe7d7-b64f-495e-b668-8fd7b941a4fe","block_type":"box","text":"standards, it may be harder for Fund management to completely and accurately determine a","page_number":86,"box":{"x":116,"y":258,"width":691,"height":12}},{"id":"8ef87397-8a70-4af2-a4f7-7e020ade088a","block_type":"box","text":"company’s financial condition. In addition, the U.S. Government has from time to time in the past","page_number":86,"box":{"x":116,"y":273,"width":722,"height":12}},{"id":"b4324706-afea-4a9b-a285-8aad40057bbf","block_type":"box","text":"imposed restrictions, through penalties and otherwise, on foreign investments by U.S. investors such","page_number":86,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"66eaca73-a493-47f1-8df8-ec54e2da2924","block_type":"box","text":"as the Fund. If such restrictions should be reinstituted, it might become necessary for the Fund to","page_number":86,"box":{"x":116,"y":304,"width":727,"height":12}},{"id":"b2285757-b3ec-44c9-9554-87d10e7c0962","block_type":"box","text":"invest all or substantially all of its assets in U.S. securities. Also, brokerage commissions and other","page_number":86,"box":{"x":117,"y":320,"width":737,"height":12}},{"id":"5b1f71b8-28a5-490b-b5fa-99f4dba88b64","block_type":"box","text":"costs of buying or selling securities often are higher in foreign countries than they are in the United","page_number":86,"box":{"x":116,"y":335,"width":736,"height":12}},{"id":"06aeb25a-26fc-4ef4-b32f-43eb7b31e0d9","block_type":"box","text":"States. This reduces the amount the Fund can earn on its investments.","page_number":86,"box":{"x":116,"y":351,"width":532,"height":9}},{"id":"e88e086d-5f31-41c4-b59c-596169e2b2ec","block_type":"box","text":"Certain Risks of Holding Fund Assets Outside the United States.","page_number":86,"box":{"x":117,"y":382,"width":477,"height":12}},{"id":"fc43a4c7-10e8-495b-836f-12c91b9cbc01","block_type":"box","text":"A Fund generally holds its foreign","page_number":86,"box":{"x":596,"y":382,"width":259,"height":12}},{"id":"dd492334-3158-4e2c-979e-4471dff88c4d","block_type":"box","text":"securities and cash in foreign banks and securities depositories. Some foreign banks and securities","page_number":86,"box":{"x":116,"y":397,"width":743,"height":12}},{"id":"db7f6185-d220-4479-b990-561868e611f5","block_type":"box","text":"depositories may be recently organized or new to the foreign custody business. In addition, there may","page_number":86,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"7553b63f-945b-44e4-bf4b-e00bc27bbea4","block_type":"box","text":"be limited or no regulatory oversight over their operations. Also, the laws of certain countries may put","page_number":86,"box":{"x":117,"y":428,"width":754,"height":12}},{"id":"6babf56f-fc9a-491b-8075-e95898f48030","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":86,"box":{"x":117,"y":444,"width":747,"height":12}},{"id":"5a685626-2c4a-45fc-a11d-87d4e84f71e4","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":86,"box":{"x":116,"y":459,"width":741,"height":12}},{"id":"b5097812-fc30-414a-ba46-7240668a0142","block_type":"box","text":"hold securities in certain foreign markets than in the United States. The increased expense of investing","page_number":86,"box":{"x":117,"y":475,"width":768,"height":12}},{"id":"a1a4dc79-332d-45f4-8efd-02686f51a7f4","block_type":"box","text":"in foreign markets reduces the amount a Fund can earn on its investments and typically results in a","page_number":86,"box":{"x":117,"y":490,"width":741,"height":12}},{"id":"5c64d7d9-3a7f-451a-94fe-f7154a320eaf","block_type":"box","text":"higher operating expense ratio for the Fund as compared to investment companies that invest only in","page_number":86,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"24bdd6ab-ec63-4226-916d-12a0ef2b44b9","block_type":"box","text":"the United States.","page_number":86,"box":{"x":116,"y":521,"width":138,"height":10}},{"id":"059ba53d-a642-4a46-8607-ac52156a6618","block_type":"box","text":"Publicly Available Information.","page_number":86,"box":{"x":116,"y":552,"width":222,"height":12}},{"id":"7e5bc7f6-e510-47e2-8ae2-bbb99d8f64d7","block_type":"box","text":"In general, less information is publicly available with respect to foreign","page_number":86,"box":{"x":340,"y":552,"width":529,"height":12}},{"id":"fddbc02c-b9c2-4648-8628-5c17a19fefc2","block_type":"box","text":"issuers than is available with respect to U.S. companies. Most foreign companies are also not subject","page_number":86,"box":{"x":117,"y":568,"width":758,"height":12}},{"id":"7993e0d5-736d-43f1-b59e-dd201e7917e2","block_type":"box","text":"to the uniform accounting and financial reporting requirements applicable to issuers in the United","page_number":86,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"3283ac90-3e6d-4b9a-afca-f653444d651d","block_type":"box","text":"States. While the volume of transactions effected on foreign stock exchanges has increased in recent","page_number":86,"box":{"x":116,"y":599,"width":758,"height":12}},{"id":"b3837ed9-e6bd-4b36-ba79-f9654c3e384a","block_type":"box","text":"years, it remains appreciably below that of the New York Stock Exchange. Accordingly, a Fund’s","page_number":86,"box":{"x":116,"y":614,"width":721,"height":12}},{"id":"b594a1c9-8b4e-4b06-b1d2-35a68497d8da","block_type":"box","text":"foreign investments may be less liquid than, and their prices may be more volatile than, comparable","page_number":86,"box":{"x":116,"y":630,"width":745,"height":12}},{"id":"d0a4d4c0-3c77-4bb9-8abc-655fe4b78c93","block_type":"box","text":"investments in securities in U.S. companies. In addition, there is generally less government supervision","page_number":86,"box":{"x":117,"y":645,"width":771,"height":12}},{"id":"88fff345-0c86-4fb1-98dd-4a34712a90ae","block_type":"box","text":"and regulation of securities exchanges, brokers and issuers in foreign countries than in the United","page_number":86,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"1510b299-dbff-4860-924a-beb1e6c41b84","block_type":"box","text":"States.","page_number":86,"box":{"x":116,"y":676,"width":51,"height":10}},{"id":"2419c439-33e2-4668-85b7-f36e7f76715a","block_type":"box","text":"Settlement Risk.","page_number":86,"box":{"x":117,"y":707,"width":120,"height":10}},{"id":"e67de2d4-b037-4de1-8cb0-284d7607a413","block_type":"box","text":"Settlement and clearance procedures in certain foreign markets differ significantly","page_number":86,"box":{"x":244,"y":707,"width":606,"height":12}},{"id":"eb7bdacf-ddeb-495e-9019-a1e946b1fc92","block_type":"box","text":"from those in the United States. Supervisory authorities may also be unable to apply standards which","page_number":86,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"97ab4bbf-2e07-4c38-949c-a03d851946a4","block_type":"box","text":"are comparable with those in the United States. Foreign settlement procedures and trade regulations","page_number":86,"box":{"x":116,"y":738,"width":749,"height":12}},{"id":"7aa4e0e2-30dd-4bcc-8af6-f0e222c366fc","block_type":"box","text":"also may involve certain risks (such as delays in payment for or delivery of securities) not typically","page_number":86,"box":{"x":116,"y":754,"width":727,"height":12}},{"id":"a16ea7d8-26c0-4f50-8ed7-f8a0f4df2059","block_type":"box","text":"generated by the settlement of U.S. investments.","page_number":86,"box":{"x":116,"y":769,"width":362,"height":12}},{"id":"798d2656-90fa-43ec-9663-df53bb1ba646","block_type":"box","text":"Communications between the United States and emerging market countries may be unreliable,","page_number":86,"box":{"x":117,"y":800,"width":704,"height":12}},{"id":"c29acfff-fd05-4976-8dca-16ca0393898b","block_type":"box","text":"increasing the risk of delayed settlements or losses of security certificates in markets that still rely on","page_number":86,"box":{"x":117,"y":816,"width":744,"height":12}},{"id":"f645ab6b-47e8-4579-a151-4c99cee6be19","block_type":"box","text":"physical settlement. Settlements in certain foreign countries at times have not kept pace with the","page_number":86,"box":{"x":117,"y":831,"width":720,"height":12}},{"id":"f6cc9a2c-3a21-4004-a80f-6eb8e4ef2715","block_type":"box","text":"number of securities transactions; these problems may make it difficult for a Fund to carry out","page_number":86,"box":{"x":117,"y":847,"width":698,"height":12}},{"id":"a9aab51a-6ec3-4d2c-bf28-d31711a024bc","block_type":"box","text":"transactions. If a Fund cannot settle or is delayed in settling a purchase of securities, it may miss","page_number":86,"box":{"x":116,"y":862,"width":723,"height":12}},{"id":"d6452193-c505-486b-bd76-0f3b068c69e0","block_type":"box","text":"attractive investment opportunities and certain of its assets may be uninvested with no return earned","page_number":86,"box":{"x":116,"y":878,"width":751,"height":12}},{"id":"2eb989cb-fd03-489b-9889-dc3ae9a9e507","block_type":"box","text":"II-38","page_number":86,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"28cecd8c-010f-497b-8117-1831afa206e3","block_type":"box","text":"NM1026U-6033243-86/221","page_number":86,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"4eb61c9a-3c01-4d5a-8df4-8be273e09c3e","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":87,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"87996562-4f59-49bc-a113-b17adf6bd07d","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":87,"box":{"x":117,"y":102,"width":739,"height":13}},{"id":"abe14b4f-f8eb-4add-85e0-c52655f99471","block_type":"box","text":"party, the Fund could be liable to that party for any losses incurred.","page_number":87,"box":{"x":117,"y":118,"width":501,"height":12}},{"id":"7d5f852d-9335-4f56-8b3e-7587f3e5e3a8","block_type":"box","text":"Because of uncertainties in the operation of settlement systems in individual markets, competing","page_number":87,"box":{"x":117,"y":149,"width":720,"height":12}},{"id":"a45eb4b2-ce52-418e-8fc0-c40cf880972d","block_type":"box","text":"claims may arise in respect of securities held by or to be transferred to a Fund. 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The governmental entity","page_number":87,"box":{"x":527,"y":227,"width":353,"height":12}},{"id":"f5ca4a10-f608-4d00-914d-8e711b5c7286","block_type":"box","text":"that controls the repayment of sovereign debt ma","page_number":87,"box":{"x":116,"y":242,"width":357,"height":12}},{"id":"0d4e1ab0-0163-408d-aa5f-6d7794407fc9","block_type":"box","text":"y not be able or willing to repay the principal and/or","page_number":87,"box":{"x":474,"y":242,"width":375,"height":12}},{"id":"273f9bb3-8657-4c2a-b49a-e9e8eb428893","block_type":"box","text":"interest when due in accordance with the terms of","page_number":87,"box":{"x":117,"y":258,"width":362,"height":9}},{"id":"8e4244b5-d66f-4c54-b557-0c3a9446aa4c","block_type":"box","text":"f such debt. A governmental entity’s willingness or","page_number":87,"box":{"x":478,"y":258,"width":364,"height":12}},{"id":"b14d7490-531e-49f8-a7f0-ee01477a2702","block_type":"box","text":"ability to repay principal and interest due in a timely","page_number":87,"box":{"x":116,"y":273,"width":372,"height":12}},{"id":"bfcb391f-7bcb-45f5-9b52-db638fe2188f","block_type":"box","text":"y manner may be affected by, among other factors, its","page_number":87,"box":{"x":488,"y":273,"width":390,"height":12}},{"id":"cfb42ced-f817-490e-bcde-2ede1ac92f19","block_type":"box","text":"cash flow situation, the extent of its foreign rese","page_number":87,"box":{"x":116,"y":289,"width":346,"height":12}},{"id":"3389a18f-030d-485b-8ad0-0fcbd23c4603","block_type":"box","text":"rves, the availability of sufficient foreign exchange on the","page_number":87,"box":{"x":463,"y":289,"width":415,"height":12}},{"id":"750a674f-96ff-4cf8-88b2-66ebec14dca0","block_type":"box","text":"date a payment is due, the relative size of the","page_number":87,"box":{"x":116,"y":304,"width":335,"height":12}},{"id":"03a5a512-864c-44e5-a1af-4711bc21125e","block_type":"box","text":"debt service burden to the economy as a whole, the","page_number":87,"box":{"x":452,"y":304,"width":381,"height":12}},{"id":"3ef844c4-5985-416a-a056-94eb3b89bbcf","block_type":"box","text":"governmental entity’s policy towards the Internati","page_number":87,"box":{"x":116,"y":320,"width":354,"height":12}},{"id":"7ce91cbd-2853-4188-a42a-c0afe68eedec","block_type":"box","text":"onal Monetary Fund and the political constraints to","page_number":87,"box":{"x":472,"y":320,"width":372,"height":12}},{"id":"eb95805d-0db6-4d96-9bb0-27a6c409563d","block_type":"box","text":"which a governmental entity may be subject. Gove","page_number":87,"box":{"x":116,"y":335,"width":367,"height":12}},{"id":"13af4b15-74ba-494d-8b23-22c17567d420","block_type":"box","text":"rnmental entities may also be dependent on expected","page_number":87,"box":{"x":485,"y":335,"width":395,"height":12}},{"id":"9c18cd41-1dcb-42f6-8301-f1d2a4e4a7f8","block_type":"box","text":"disbursements from foreign governments, multila","page_number":87,"box":{"x":116,"y":351,"width":355,"height":12}},{"id":"26273880-e28a-4567-a01a-6a218cdfe088","block_type":"box","text":"teral agencies and others abroad to reduce principal","page_number":87,"box":{"x":472,"y":351,"width":384,"height":12}},{"id":"8e5ce9b2-8807-40c7-8bb8-c393220f8a6e","block_type":"box","text":"and interest arrearages on their debt. The commitment","page_number":87,"box":{"x":116,"y":366,"width":398,"height":12}},{"id":"ba94fc91-7d84-4dbf-a765-f7a142b16446","block_type":"box","text":"t on the part of these governments, agencies and","page_number":87,"box":{"x":514,"y":366,"width":358,"height":12}},{"id":"9dbcbe20-70ac-400d-9b57-aaa607531244","block_type":"box","text":"others to make such disbursements may be condi","page_number":87,"box":{"x":116,"y":382,"width":362,"height":12}},{"id":"8f8a0159-e51a-4979-bade-e421832a9d5d","block_type":"box","text":"tioned on the implementation of economic reforms and/","page_number":87,"box":{"x":479,"y":382,"width":402,"height":12}},{"id":"f2fd1254-6c4f-4360-89ad-89ca483ba1f8","block_type":"box","text":"or economic performance and the timely service of such","page_number":87,"box":{"x":116,"y":397,"width":407,"height":12}},{"id":"075ca0d3-39ea-4bd0-a0f0-7161135a7836","block_type":"box","text":"debtor’s obligations. Failure to implement such","page_number":87,"box":{"x":524,"y":397,"width":349,"height":12}},{"id":"c8f78625-c5e1-4afd-a0cd-8040ea3ed08c","block_type":"box","text":"reforms, achieve such levels of economic performance","page_number":87,"box":{"x":117,"y":413,"width":402,"height":12}},{"id":"9bc5c27c-9714-4057-9b51-76702673cb08","block_type":"box","text":"or repay principal or interest when due may result","page_number":87,"box":{"x":519,"y":413,"width":365,"height":12}},{"id":"cd8c1a3f-9ae9-48cb-a0fd-5ea75d0c0dae","block_type":"box","text":"in the cancellation of such third parties’ commitments","page_number":87,"box":{"x":117,"y":428,"width":389,"height":12}},{"id":"92b150ff-dff9-4fa2-8e15-2045264d60ea","block_type":"box","text":"to lend funds to the governmental entity, which may","page_number":87,"box":{"x":506,"y":428,"width":380,"height":12}},{"id":"390e2e3e-fb2d-4505-aa6d-8f19efaaf346","block_type":"box","text":"further impair such debtor’s ability or willingness to t","page_number":87,"box":{"x":116,"y":444,"width":372,"height":12}},{"id":"1f2fbfd2-b990-4337-b032-0102ac4e539b","block_type":"box","text":"timely service its debts. Consequently, governmental","page_number":87,"box":{"x":487,"y":444,"width":389,"height":12}},{"id":"501a1c98-236f-43fb-a005-fc62e3071028","block_type":"box","text":"entities may default on their sovereign debt.","page_number":87,"box":{"x":116,"y":459,"width":323,"height":12}},{"id":"4ad675c2-20cb-419e-bb0f-b0166fbc3b73","block_type":"box","text":"Holders of sovereign debt may be requested to participate in the rescheduling of such debt and to","page_number":87,"box":{"x":117,"y":490,"width":730,"height":12}},{"id":"591e64dd-41c5-4954-a6ca-7c628b81f535","block_type":"box","text":"extend further loans to governmental entities. 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A Fund may file claims to recover foreign withholding taxes on dividend","page_number":87,"box":{"x":344,"y":552,"width":530,"height":12}},{"id":"396facb7-c766-4b94-830a-13d491da5da7","block_type":"box","text":"and interest income (if any) received from issuers in","page_number":87,"box":{"x":116,"y":568,"width":381,"height":12}},{"id":"2ba4067e-1e9b-479e-9ce2-c3ec7c8ebee5","block_type":"box","text":"certain countries and capital gains on the disposition","page_number":87,"box":{"x":498,"y":568,"width":385,"height":12}},{"id":"ab71c320-7813-422a-914a-1d82946a9c9b","block_type":"box","text":"of stocks or securities where such withholding ta","page_number":87,"box":{"x":116,"y":583,"width":351,"height":12}},{"id":"e814430a-ae18-41c9-b771-c649bca1f634","block_type":"box","text":"x reclaim is possible. Whether or when a Fund will","page_number":87,"box":{"x":468,"y":583,"width":369,"height":12}},{"id":"9fe5ebad-5df4-470f-973c-4a59db4c828b","block_type":"box","text":"receive a withholding tax refund is within the control","page_number":87,"box":{"x":117,"y":599,"width":379,"height":12}},{"id":"efbd211d-5b1d-458f-a3c6-740afa7c9e9a","block_type":"box","text":"of the tax authorities in such countries. Where a","page_number":87,"box":{"x":496,"y":599,"width":352,"height":9}},{"id":"8e47fa78-d9ac-4299-8a2b-93550d546b31","block_type":"box","text":"Fund expects to recover withholding taxes, the net asset value of the Fund generally includes accruals","page_number":87,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"00e86f08-d2fb-47f6-8d02-c2a5d6de4249","block_type":"box","text":"for such tax refunds. Each Fund regularly evaluates","page_number":87,"box":{"x":116,"y":630,"width":375,"height":12}},{"id":"49922ceb-ff30-45f0-99a1-abe4160a7c9b","block_type":"box","text":"the probability of recovery. If the likelihood of","page_number":87,"box":{"x":492,"y":630,"width":334,"height":12}},{"id":"5f17e133-8727-4b0d-a18b-dc37473352fc","block_type":"box","text":"recovery materially decreases, due to, for example,","page_number":87,"box":{"x":117,"y":645,"width":377,"height":12}},{"id":"43a84ed3-3478-4f39-879c-d886d5ccb38e","block_type":"box","text":"a change in tax regulation or approach in the foreign","page_number":87,"box":{"x":494,"y":645,"width":385,"height":12}},{"id":"aab56dfe-de59-46f1-97b9-8baa6e94efae","block_type":"box","text":"country, accruals in a Fund’s net asset value for such","page_number":87,"box":{"x":116,"y":661,"width":387,"height":12}},{"id":"102b467c-4dd8-48ce-8076-7c3748a050cf","block_type":"box","text":"refunds may be written down partially or in full,","page_number":87,"box":{"x":509,"y":661,"width":336,"height":12}},{"id":"c3468819-5a40-4f45-83c9-61f0be7c6c14","block_type":"box","text":"which will adversely affect the Fund’s net asset value.","page_number":87,"box":{"x":116,"y":676,"width":389,"height":12}},{"id":"7ad43f5d-6a7e-4812-b2ba-b3795b31fe65","block_type":"box","text":"Shareholders in a Fund at the time an accrual is","page_number":87,"box":{"x":511,"y":676,"width":348,"height":10}},{"id":"38d89742-1ba9-4c26-abf5-c186ec78f0a1","block_type":"box","text":"written down will bear the impact of t","page_number":87,"box":{"x":116,"y":692,"width":265,"height":12}},{"id":"075ae640-b671-46c0-82ec-6f2aac92a67c","block_type":"box","text":"he resulting reduction in net asset","page_number":87,"box":{"x":382,"y":692,"width":244,"height":12}},{"id":"3a9bcc5d-d389-419f-9a7d-b8eca8caab73","block_type":"box","text":"value regardless of whether they","page_number":87,"box":{"x":631,"y":692,"width":238,"height":12}},{"id":"8fd39966-039e-40a5-a358-80d94ebb79f4","block_type":"box","text":"were shareholders during the accrual period. Converse","page_number":87,"box":{"x":116,"y":707,"width":400,"height":12}},{"id":"5173ea35-9ae2-41cc-9932-e755336ff887","block_type":"box","text":"ly, if a Fund receives a tax refund that has not","page_number":87,"box":{"x":518,"y":707,"width":331,"height":12}},{"id":"9ab9796d-4d90-41a7-a4c8-ec3a29c2c8d0","block_type":"box","text":"been previously accrued, shareholders in the Fund at t","page_number":87,"box":{"x":117,"y":723,"width":396,"height":12}},{"id":"c11606bf-8458-4b46-9350-415e8cb7cbe5","block_type":"box","text":"he time of the successful recovery will benefit from","page_number":87,"box":{"x":514,"y":723,"width":365,"height":12}},{"id":"9c93dfb8-0d15-4c4b-a10e-514ff5ab2728","block_type":"box","text":"the resulting increase in the Fund’s net asset value.","page_number":87,"box":{"x":116,"y":738,"width":373,"height":12}},{"id":"6c1ebbad-ce1f-4d94-a04e-b899b0fb8328","block_type":"box","text":"Shareholders who sold their shares prior to such","page_number":87,"box":{"x":496,"y":738,"width":351,"height":12}},{"id":"203b40d6-af6c-419f-948c-a4ee19c28f34","block_type":"box","text":"time will not benefit from such increase in the Fund’s net asset value.","page_number":87,"box":{"x":116,"y":754,"width":500,"height":9}},{"id":"9bb47f11-b6be-4a48-ba8e-65ca5f33bf7e","block_type":"box","text":"U.S. Economic Trading Partners Risk.","page_number":87,"box":{"x":117,"y":785,"width":280,"height":12}},{"id":"06fcc3fd-ac74-47ca-9b5d-fe967bfc31df","block_type":"box","text":"The United States is a significant, and in some cases the most","page_number":87,"box":{"x":404,"y":785,"width":464,"height":12}},{"id":"9e30c3f5-6271-4ba7-90c4-3973c285a759","block_type":"box","text":"significant, trading partner of, or foreign investor in, certain countries in which a Fund may invest. As a","page_number":87,"box":{"x":116,"y":800,"width":757,"height":12}},{"id":"95335ef6-ed41-4d0d-a306-a03155de172c","block_type":"box","text":"result, economic conditions of such countries may be particularly affected by changes in the U.S.","page_number":87,"box":{"x":117,"y":816,"width":717,"height":12}},{"id":"14613e9e-06e6-4ecb-99b9-c171d1107276","block_type":"box","text":"economy. A decrease in U.S. imports or exports, new trade and financial regulations or tariffs, changes","page_number":87,"box":{"x":116,"y":831,"width":770,"height":12}},{"id":"50014c2f-c120-4c1c-b957-07166a56c100","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":87,"box":{"x":117,"y":847,"width":745,"height":12}},{"id":"cbcd5e21-c803-4c98-96d0-785272f05b23","block_type":"box","text":"adverse effect on a country’s economic conditions and, as a result, securities to which the Fund has","page_number":87,"box":{"x":116,"y":862,"width":746,"height":12}},{"id":"5725aba4-795e-41c2-9838-84b0b34b7494","block_type":"box","text":"exposure. Circumstances could arise that could prevent the timely payment of interest or principal on","page_number":87,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"2553e058-cdc2-4b54-a680-c77247d78e64","block_type":"box","text":"II-39","page_number":87,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"11fe29da-ad89-4ba3-b9cb-ac20372a863c","block_type":"box","text":"NM1026U-6033243-87/221","page_number":87,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"484419de-82b3-4a59-bced-bb7ee19262e5","block_type":"box","text":"U.S. Government debt, such as reaching the legislative “debt ceiling.” Such non-payment would result","page_number":88,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"2a60fcda-6f81-41ac-b6e9-dfd7e3e7c15b","block_type":"box","text":"in substantial negative consequences for the U.S. economy and the global financial system.","page_number":88,"box":{"x":117,"y":102,"width":685,"height":13}},{"id":"407a17b1-bace-4817-bc28-60f4278bd2a5","block_type":"box","text":"There are strained relations between the United States and a number of foreign countries, including","page_number":88,"box":{"x":116,"y":135,"width":745,"height":12}},{"id":"cbf6cb1f-a6ad-4c9e-bbd4-d3ae85fa6c05","block_type":"box","text":"traditional allies, such as certain European countries, and historical adversaries, such as North Korea,","page_number":88,"box":{"x":116,"y":151,"width":761,"height":11}},{"id":"b8cfbd77-4418-41f3-b06a-81257e359258","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":88,"box":{"x":117,"y":166,"width":763,"height":12}},{"id":"331d850e-96d3-47cd-a1d4-341faa67e4ce","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":88,"box":{"x":116,"y":181,"width":748,"height":12}},{"id":"981c9c9d-656d-4c74-9498-ea687636c0bf","block_type":"box","text":"increased internal unrest and discord. If these trends were to continue, it may have an adverse impact","page_number":88,"box":{"x":117,"y":197,"width":761,"height":12}},{"id":"298cce37-72b4-45b3-b5b2-1d48afdb95c3","block_type":"box","text":"on the U.S. economy and many of the issuers in which a Fund may invest.","page_number":88,"box":{"x":116,"y":212,"width":557,"height":12}},{"id":"197267cb-ba6d-4dba-b954-914bab02f62c","block_type":"box","text":"Funding Agreements.","page_number":88,"box":{"x":116,"y":245,"width":171,"height":12}},{"id":"9ca6fc07-1740-4980-bb35-fafe862a4259","block_type":"box","text":"Certain Funds may invest in Guaranteed Investment Contracts and similar","page_number":88,"box":{"x":289,"y":245,"width":561,"height":12}},{"id":"eb973af2-8bb9-4681-9d6c-265dcbdbb636","block_type":"box","text":"funding agreements. In connection with these investments, a Fund makes cash contributions to a","page_number":88,"box":{"x":116,"y":260,"width":727,"height":12}},{"id":"40c49952-033c-41ca-9b4f-2aeb629f5232","block_type":"box","text":"deposit fund of an insurance company’s general account. The insurance company then credits to the","page_number":88,"box":{"x":116,"y":276,"width":753,"height":12}},{"id":"c0581c30-9e37-4156-b627-6eff82b9d2d5","block_type":"box","text":"Fund on a monthly basis guaranteed interest, which is based on an index. The funding agreements","page_number":88,"box":{"x":117,"y":291,"width":740,"height":12}},{"id":"e687826b-598d-4066-a225-0a2f68725307","block_type":"box","text":"provide that this guaranteed interest will not be less than a certain minimum rate. The purchase price","page_number":88,"box":{"x":117,"y":307,"width":753,"height":12}},{"id":"52318af1-647e-4e19-a0a4-b62e997107dc","block_type":"box","text":"paid for a funding agreement becomes part of the general assets of the insurance company, and the","page_number":88,"box":{"x":117,"y":322,"width":749,"height":12}},{"id":"9902d468-8da3-4f59-aa46-743687775de4","block_type":"box","text":"contract is paid from the general assets of the insurance company. Generally, funding agreements are","page_number":88,"box":{"x":116,"y":338,"width":764,"height":12}},{"id":"48ff22a1-ce3f-49d9-a232-ae97409d8a17","block_type":"box","text":"not assignable or transferable without the permission of the issuing insurance companies, and an","page_number":88,"box":{"x":117,"y":353,"width":726,"height":12}},{"id":"03eeef5e-fca7-4274-8848-a8e309bd4916","block_type":"box","text":"active secondary market in some funding agreements does not currently exist.","page_number":88,"box":{"x":116,"y":369,"width":586,"height":12}},{"id":"5c134968-e4cc-41d8-926f-1d70855ba958","block_type":"box","text":"Guarantees","page_number":88,"box":{"x":117,"y":401,"width":91,"height":10}},{"id":"fae443ea-5615-4560-9ac7-1e2bffe03561","block_type":"box","text":".","page_number":88,"box":{"x":209,"y":409,"width":3,"height":2}},{"id":"72e24f61-bb21-43e4-9bf7-146812a0171c","block_type":"box","text":"A Fund may purchase securities which contain guarantees issued by an entity separate","page_number":88,"box":{"x":213,"y":401,"width":660,"height":12}},{"id":"4de603a4-027c-43c5-a2fd-77e29487f29c","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":88,"box":{"x":116,"y":417,"width":771,"height":12}},{"id":"4ee535bb-f4e1-465c-a0c5-2f0053238208","block_type":"box","text":"fulfill an issuer’s payment obligations under a security if the issuer is unable to do so.","page_number":88,"box":{"x":116,"y":432,"width":634,"height":12}},{"id":"1b252e5f-f4b3-4557-95f9-c8c00909f100","block_type":"box","text":"Illiquid Investments.","page_number":88,"box":{"x":116,"y":465,"width":160,"height":11}},{"id":"618b7649-cb97-4431-a426-9aadd449670f","block_type":"box","text":"Each Fund may not acquire any illiquid investment if, immediately after the","page_number":88,"box":{"x":278,"y":465,"width":563,"height":12}},{"id":"f9e29e53-ef6b-498c-848c-bfe3eaa16830","block_type":"box","text":"acquisition, a Fund would have invested more than 15% of its net assets in illiquid investments. An","page_number":88,"box":{"x":116,"y":480,"width":737,"height":12}},{"id":"2499fb4d-5fe3-42e0-a15e-67b112e41742","block_type":"box","text":"illiquid investment is any investment that a Fund reasonably expects cannot be sold or disposed of in","page_number":88,"box":{"x":117,"y":496,"width":753,"height":12}},{"id":"4624337d-224c-4a2d-986e-e3b52f37602b","block_type":"box","text":"current market conditions in seven calendar days or less without the sale or disposition significantly","page_number":88,"box":{"x":116,"y":511,"width":742,"height":12}},{"id":"8663e385-3ec5-42a4-9c71-3df9fa4286ea","block_type":"box","text":"changing the market value of the investment. Liquid investments may become illiquid after purchase by","page_number":88,"box":{"x":116,"y":527,"width":771,"height":12}},{"id":"11f70b43-a3c6-4a23-81c3-e63c62f9e27a","block_type":"box","text":"a Fund, particularly during periods of market turmoil. There can be no assurance that a security or","page_number":88,"box":{"x":116,"y":542,"width":733,"height":12}},{"id":"f14d243d-105f-451c-a648-eb7192254e08","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":88,"box":{"x":117,"y":558,"width":766,"height":12}},{"id":"bef37e01-a703-4940-a7fc-8a5db6960b95","block_type":"box","text":"by a Fund, and any security or instrument held by the Fund may be deemed an illiquid investment","page_number":88,"box":{"x":117,"y":573,"width":729,"height":12}},{"id":"7b97b143-324d-4caf-b7b4-08abf5e0ba16","block_type":"box","text":"pursuant to the Fund’s liquidity risk management program. A Fund’s illiquid investments may reduce","page_number":88,"box":{"x":117,"y":589,"width":747,"height":12}},{"id":"9d60b1c4-7928-4314-a25d-d90fdefe6c24","block_type":"box","text":"the returns of the Fund because it may be difficult to sell the illiquid investments at an advantageous","page_number":88,"box":{"x":116,"y":604,"width":748,"height":12}},{"id":"204183bd-d4ff-493b-937f-87fe69590097","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":88,"box":{"x":116,"y":620,"width":713,"height":12}},{"id":"8a052c52-6cb0-4c14-a7b6-c2dc1bc1dd5a","block_type":"box","text":"periods when shareholders are redeeming or selling their shares or the Fund’s net assets otherwise","page_number":88,"box":{"x":117,"y":635,"width":744,"height":12}},{"id":"ea0df939-53dc-401f-8961-0fd77389aa97","block_type":"box","text":"shrink, the Fund will need to dispose of liquid securities to meet redemption requests and illiquid","page_number":88,"box":{"x":116,"y":651,"width":718,"height":12}},{"id":"b7b027a0-dbee-483d-b862-06a33b6fff4b","block_type":"box","text":"securities will become a larger portion of the Fund’s holdings. If illiquid investments exceed 15% of a","page_number":88,"box":{"x":116,"y":666,"width":745,"height":12}},{"id":"525f4870-a238-4a09-965f-bc58d4dbb92c","block_type":"box","text":"Fund’s net assets, the Liquidity Rule (as defined below) and the Liquidity Program (as defined below)","page_number":88,"box":{"x":117,"y":682,"width":749,"height":12}},{"id":"9e006827-bb1f-4237-84cc-e29a55f778f7","block_type":"box","text":"will require that certain remedial actions be taken. Illiquid investments may trade at a discount from","page_number":88,"box":{"x":116,"y":697,"width":733,"height":12}},{"id":"19ca9a7e-8bc7-4f42-8ccc-84461fe91eb9","block_type":"box","text":"comparable liquid investments. Investment of a Fund’s assets in illiquid investments may restrict the","page_number":88,"box":{"x":116,"y":713,"width":742,"height":12}},{"id":"3877ce6f-6223-4058-b4e6-2ee2beae8772","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":88,"box":{"x":116,"y":728,"width":728,"height":12}},{"id":"96edc13d-f7b8-4398-b19b-1d02ba776d40","block_type":"box","text":"ability to take advantage of market opportunities. The risks associated with illiquidity will be particularly","page_number":88,"box":{"x":116,"y":744,"width":760,"height":12}},{"id":"33cc4e56-4697-4a56-9634-650aec7972f2","block_type":"box","text":"acute where a Fund’s operations require cash, such as when the Fund redeems shares or pays","page_number":88,"box":{"x":116,"y":759,"width":709,"height":12}},{"id":"e00e01e4-3a08-489a-96d5-014ccc46bce6","block_type":"box","text":"dividends, and could result in the Fund borrowing to meet short-term cash requirements or incurring","page_number":88,"box":{"x":116,"y":775,"width":740,"height":12}},{"id":"d986c7e6-4e7f-4ccb-85b4-c8fd124e7c8e","block_type":"box","text":"capital losses on the sale of illiquid investments.","page_number":88,"box":{"x":116,"y":790,"width":355,"height":12}},{"id":"0202e4ec-4081-4509-80d7-6cd93db389b6","block_type":"box","text":"Index Funds.","page_number":88,"box":{"x":116,"y":823,"width":102,"height":9}},{"id":"0d116d91-24c8-41de-8c27-5bc21c7d9a5a","block_type":"box","text":"Cash Flows; Expenses.","page_number":88,"box":{"x":117,"y":846,"width":173,"height":12}},{"id":"27b07ae2-6334-4581-8b1f-8f06f0f8b11e","block_type":"box","text":"The ability of each Fund to satisfy its investment objective depends to some","page_number":88,"box":{"x":291,"y":846,"width":573,"height":12}},{"id":"ce54a5f0-c3d2-409f-94d7-136c756dceb5","block_type":"box","text":"extent on the Manager’s ability to manage cash flow (primarily from purchases and redemptions and","page_number":88,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"abef4cde-f20c-47d3-a1c4-d1961da3f4da","block_type":"box","text":"distributions from the Fund’s investments). The Manager will make investment changes to a Fund’s","page_number":88,"box":{"x":116,"y":877,"width":742,"height":12}},{"id":"a2dea6ea-625f-4edc-84e5-9afee14281c6","block_type":"box","text":"II-40","page_number":88,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5bd921b6-e8c6-4098-9721-d8f07d46d097","block_type":"box","text":"NM1026U-6033243-88/221","page_number":88,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d87f2a3e-b1e0-4e3d-80bc-8c6a1129ce1b","block_type":"box","text":"portfolio to accommodate cash flow while continuing to seek to replicate the total return of the Fund’s","page_number":89,"box":{"x":117,"y":87,"width":753,"height":12}},{"id":"1364a90f-aa9c-4a80-852d-4be5ec23fff5","block_type":"box","text":"target index. Investors should also be aware that the investment performance of each index is a","page_number":89,"box":{"x":116,"y":102,"width":716,"height":13}},{"id":"a7fcb68f-75d7-4602-b31f-3ab881266162","block_type":"box","text":"hypothetical number which does not take into account brokerage commissions and other transaction","page_number":89,"box":{"x":117,"y":118,"width":749,"height":12}},{"id":"58863d49-dde6-4740-9b78-32911daa2e36","block_type":"box","text":"costs, custody and other costs of investing, and any incremental operating costs (e.g., transfer agency","page_number":89,"box":{"x":116,"y":134,"width":765,"height":12}},{"id":"ac80df88-1030-456c-bc4f-a4f1be819967","block_type":"box","text":"and accounting costs) that will be borne by the Funds. Finally, since each Fund seeks to replicate the","page_number":89,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"adbdf6f7-3618-4f6b-951e-a7cc1c7e3d26","block_type":"box","text":"total return of its target index, the Manager generally will not attempt to judge the merits of any","page_number":89,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"f0d5dc44-3a95-4e19-b675-869d8c4effb5","block_type":"box","text":"particular security as an investment.","page_number":89,"box":{"x":117,"y":180,"width":272,"height":12}},{"id":"b71c9b98-9bfe-4e04-befb-85bacfe752fe","block_type":"box","text":"Tracking Error Risk","page_number":89,"box":{"x":118,"y":211,"width":143,"height":12}},{"id":"444ccc88-46af-41f3-b728-2792a0122c5b","block_type":"box","text":". A Fund may be subject to tracking error, which is the divergence of the Fund’s","page_number":89,"box":{"x":261,"y":211,"width":594,"height":12}},{"id":"c8088a3a-7d2b-4000-84f4-94252f6b4cd7","block_type":"box","text":"performance from that of the Underlying Index. Tracking error may occur because of differences","page_number":89,"box":{"x":117,"y":227,"width":718,"height":12}},{"id":"6a6738f6-829f-43e5-ab03-f83497f720bd","block_type":"box","text":"between the securities and other instruments held in the Fund’s portfolio and those included in the","page_number":89,"box":{"x":117,"y":242,"width":732,"height":12}},{"id":"b8ba89fc-175d-4efd-840c-851866a425ba","block_type":"box","text":"Underlying Index, pricing differences (including, as applicable, differences between a security’s price at","page_number":89,"box":{"x":117,"y":258,"width":768,"height":12}},{"id":"7741cfca-34e7-4cb3-b696-37a77354d050","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":89,"box":{"x":116,"y":273,"width":767,"height":12}},{"id":"2a0a1bfb-5d51-434e-aee4-3ade39d459fe","block_type":"box","text":"asset value), differences in transaction costs incurred by the Fund, the Fund’s holding of uninvested","page_number":89,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"12113c6b-d817-48bc-ad85-ff6a99532475","block_type":"box","text":"cash, differences in timing of the accrual of or the valuation of dividends or other distributions, interest,","page_number":89,"box":{"x":116,"y":304,"width":764,"height":12}},{"id":"04d371b3-83aa-4cfc-85d2-c82707a304c4","block_type":"box","text":"the requirements to maintain pass-through tax treatment, portfolio transactions carried out to minimize","page_number":89,"box":{"x":116,"y":320,"width":763,"height":12}},{"id":"abe7eadc-871c-4085-bee9-6d75a1b7718c","block_type":"box","text":"the distribution of capital gains to shareholders, changes to the Underlying Index or the costs to the","page_number":89,"box":{"x":116,"y":335,"width":741,"height":12}},{"id":"3970e5d3-a05b-4c96-aa1f-616dacc762a2","block_type":"box","text":"Fund of complying with various new or existing regulatory requirements. These risks may be","page_number":89,"box":{"x":117,"y":351,"width":689,"height":12}},{"id":"cbeade8c-2bb3-4d93-891d-01006569eee7","block_type":"box","text":"heightened during times of increased market volatility or other unusual market conditions. In addition,","page_number":89,"box":{"x":117,"y":366,"width":755,"height":12}},{"id":"eb391b39-5b35-49fc-845b-4f7c5f576d14","block_type":"box","text":"tracking error may result because the Fund incurs fees and expenses, while the Underlying Index does","page_number":89,"box":{"x":116,"y":382,"width":769,"height":12}},{"id":"a1689229-4eaf-4304-8cbf-795b159d0b4c","block_type":"box","text":"not.","page_number":89,"box":{"x":117,"y":397,"width":31,"height":10}},{"id":"2e3d3053-4fa5-4d69-af85-2e94acce98f1","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":89,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"e6e1d66d-7313-42ae-8de2-2b512738bd77","block_type":"box","text":"conduct an analysis on such issuer’s securities to identify and screen for outlier high risk behavior","page_number":89,"box":{"x":116,"y":444,"width":729,"height":12}},{"id":"61fae42b-5742-456e-8440-057e18409825","block_type":"box","text":"(such as rapid or unusual price growth that does not appear to be supported by publicly available","page_number":89,"box":{"x":117,"y":459,"width":724,"height":12}},{"id":"f37e8db0-f1c3-4a30-a568-10c0d18de2ea","block_type":"box","text":"information on the business and assets of the issuer, unusual or significant short interest or lending","page_number":89,"box":{"x":117,"y":475,"width":740,"height":12}},{"id":"6803275f-9311-4fe6-a5b0-d475fa0691a9","block_type":"box","text":"activity, negative sentiment, suspended trading or incorrect free-float calculations, which could be","page_number":89,"box":{"x":116,"y":490,"width":728,"height":12}},{"id":"3aa67051-9edd-4639-b343-b3ca38127a76","block_type":"box","text":"indicators of possible irregularities, miscalculations or even fraud). If it identifies such behavior, the","page_number":89,"box":{"x":117,"y":506,"width":735,"height":12}},{"id":"ffcd15b6-bf2a-4f95-aad3-cd0b295fe709","block_type":"box","text":"Manager may, where appropriate, alert the index provider as to the alleged issue. The index provider","page_number":89,"box":{"x":117,"y":521,"width":753,"height":12}},{"id":"c8454be9-2cee-4db1-9989-a3f20b097791","block_type":"box","text":"has sole discretion for the determination as to whether to continue to include the issuer’s securities in","page_number":89,"box":{"x":117,"y":537,"width":755,"height":9}},{"id":"759cf378-338d-464b-b89e-583e23658c8a","block_type":"box","text":"the rebalancing of its index. If the securities continue to be included in the index, the Manager may","page_number":89,"box":{"x":116,"y":552,"width":736,"height":12}},{"id":"9550cbef-6901-42a2-a22e-832dd24b28cb","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":89,"box":{"x":117,"y":568,"width":732,"height":12}},{"id":"9f0b2d2a-c802-443a-951e-8e97bd8319d2","block_type":"box","text":"subject to increased tracking error due to the divergence in the securities included in its portfolio from","page_number":89,"box":{"x":116,"y":583,"width":756,"height":12}},{"id":"b18bd012-8c24-4d5b-89f9-e220d14e9d31","block_type":"box","text":"its underlying index. The application of the abovementioned analysis and screening to a Fund and its","page_number":89,"box":{"x":117,"y":599,"width":753,"height":12}},{"id":"b17dc213-97b5-416b-8942-e6de0b16dce5","block_type":"box","text":"Underlying Index is in the sole discretion of the Manager and its affiliates (without any guarantees).","page_number":89,"box":{"x":117,"y":614,"width":738,"height":12}},{"id":"80daa202-b4fe-4fed-b634-deb6cfadd96d","block_type":"box","text":"The analysis and screening may not exclude any or all high risk securities from an Underlying Index or","page_number":89,"box":{"x":116,"y":630,"width":765,"height":12}},{"id":"52eaf623-415c-4587-b9c1-1292dd63f736","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":89,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"4ed7e2b8-e8e5-4a8e-9e73-9c779f847060","block_type":"box","text":"asset value if one or more such securities declines in value.","page_number":89,"box":{"x":116,"y":661,"width":442,"height":9}},{"id":"04623604-5958-45d5-8c93-91f1b85bb028","block_type":"box","text":"S&P 500","page_number":89,"box":{"x":117,"y":692,"width":65,"height":9}},{"id":"d216c368-e1fb-457c-99fd-26f528446fd5","block_type":"box","text":"®","page_number":89,"box":{"x":183,"y":691,"width":9,"height":7}},{"id":"bf1b24f3-6db5-4638-8e06-eefb6a356539","block_type":"box","text":"Index (“S&P 500”)","page_number":89,"box":{"x":197,"y":692,"width":133,"height":12}},{"id":"e23ab3ff-82f8-41b2-9f14-90d81d6a720a","block_type":"box","text":". “Standard & Poor’s","page_number":89,"box":{"x":332,"y":692,"width":150,"height":9}},{"id":"8b38c97e-850a-41aa-92e6-757b229e5a6f","block_type":"box","text":"®","page_number":89,"box":{"x":482,"y":691,"width":10,"height":7}},{"id":"0dcb120b-fe66-44f1-9759-ea64a3373478","block_type":"box","text":",” “S&P","page_number":89,"box":{"x":493,"y":692,"width":52,"height":11}},{"id":"f9b5d121-5834-4bc6-a530-153625390b97","block_type":"box","text":"®","page_number":89,"box":{"x":546,"y":691,"width":9,"height":7}},{"id":"03f7321c-a8a0-4c1f-be95-53b739b0c4e0","block_type":"box","text":",” “S&P 500","page_number":89,"box":{"x":557,"y":692,"width":85,"height":11}},{"id":"e02c575d-6ffa-43bb-b916-9f932c64a917","block_type":"box","text":"®","page_number":89,"box":{"x":642,"y":691,"width":10,"height":7}},{"id":"a224e8d7-11fb-4140-8150-89c7df37ddbc","block_type":"box","text":",” “Standard & Poor’s 500,”","page_number":89,"box":{"x":653,"y":692,"width":198,"height":11}},{"id":"7c532d03-bcdd-496a-9766-621d639f648b","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":89,"box":{"x":116,"y":707,"width":749,"height":12}},{"id":"b5813c2a-7e6d-44c0-a9dc-96cbdc08ff37","block_type":"box","text":"sponsored and advised by BlackRock or its affiliates (“BlackRock Funds”). No Fund is sponsored,","page_number":89,"box":{"x":116,"y":723,"width":723,"height":12}},{"id":"05675911-3e26-4d70-8926-d9b4edd97c5c","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":89,"box":{"x":116,"y":738,"width":715,"height":12}},{"id":"7a8c31f1-b0b9-40b6-9dbd-b3b5f1892e8b","block_type":"box","text":"regarding the advisability of investing in any Fund. S&P makes no representation or warranty, express","page_number":89,"box":{"x":117,"y":754,"width":757,"height":12}},{"id":"e49e046b-7d74-4a17-b363-daf4d193ec0d","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":89,"box":{"x":116,"y":769,"width":756,"height":12}},{"id":"fde64bdc-8817-4a5c-ae78-38676d6ce003","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":89,"box":{"x":117,"y":785,"width":745,"height":12}},{"id":"a4edefaf-1520-4dfe-9c5f-5b189a440956","block_type":"box","text":"stock market performance. S&P’s only relationship to certain Funds is the licensing of certain","page_number":89,"box":{"x":116,"y":800,"width":689,"height":12}},{"id":"47553889-22a8-471a-9c44-182ae7e14448","block_type":"box","text":"trademarks and trade names of S&P and of the S&P 500 which is determined, composed and","page_number":89,"box":{"x":116,"y":816,"width":695,"height":12}},{"id":"312df69b-0806-4c83-8e93-0296d04629a0","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":89,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"207a64d6-267c-41a0-bb63-d8c463b3e3e2","block_type":"box","text":"the owners of shares of a Fund into consideration in determining, composing or calculating the S&P","page_number":89,"box":{"x":116,"y":847,"width":744,"height":12}},{"id":"b2b43279-68fa-46ad-be83-e2eadf4fa1f4","block_type":"box","text":"500. 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A Fund may also invest in so-called “inverse floating obligations” or","page_number":91,"box":{"x":116,"y":878,"width":763,"height":12}},{"id":"0ea567fa-7ef9-476a-86fb-ccb6cebac658","block_type":"box","text":"II-43","page_number":91,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"520756f4-b2f6-4709-a463-95dec6b00c2a","block_type":"box","text":"NM1026U-6033243-91/221","page_number":91,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"58ec1c33-a7cf-43a1-92a5-ce31f69e7a90","block_type":"box","text":"“residual interest bonds” on which the interest rates vary inversely with a floating rate (which may be","page_number":92,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"b5227439-1388-4fe2-bb62-96fc88ff5979","block_type":"box","text":"reset periodically by a Dutch auction, a remarketing agent, or by reference to a short-term tax-exempt","page_number":92,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"7bcf6154-3d12-44e9-913a-db883dcb4533","block_type":"box","text":"interest rate index). A Fund may purchase synthetically-created inverse floating rate bonds evidenced","page_number":92,"box":{"x":117,"y":118,"width":759,"height":12}},{"id":"4fcfff73-023f-45c2-9a08-c760e16b5aac","block_type":"box","text":"by custodial or trust receipts. Generally, income on inverse floating rate bonds will decrease when","page_number":92,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"a1d51608-4ebd-429d-a2fa-023afdff0c32","block_type":"box","text":"interest rates increase, and will increase when interest rates decrease. Such securities have the effect","page_number":92,"box":{"x":117,"y":149,"width":762,"height":11}},{"id":"81a67070-f285-451c-bfe5-aecf79f1f3d7","block_type":"box","text":"of providing a degree of investment leverage, since they may increase or decrease in value in","page_number":92,"box":{"x":116,"y":165,"width":701,"height":12}},{"id":"66458fc3-ded2-4a09-9ea7-5ef2f1ab8703","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":92,"box":{"x":117,"y":180,"width":764,"height":12}},{"id":"e66024e3-1868-4e32-9621-bb66fcf1be7d","block_type":"box","text":"which fixed-rate securities increase or decrease in response to such changes. As a result, the market","page_number":92,"box":{"x":116,"y":196,"width":757,"height":12}},{"id":"0cb6e1f2-eed5-4719-9b35-20ab37831796","block_type":"box","text":"values of such securities will generally be more volatile than the market values of fixed-rate securities.","page_number":92,"box":{"x":116,"y":211,"width":761,"height":12}},{"id":"7d7d3190-d3ba-4c55-8ce5-a0b0f6837c12","block_type":"box","text":"To seek to limit the volatility of these securities, a Fund may purchase inverse floating obligations that","page_number":92,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"f3a7d021-6d46-4fcf-bac3-d1d79777cbe9","block_type":"box","text":"have shorter-term maturities or that contain limitations on the extent to which the interest rate may","page_number":92,"box":{"x":117,"y":242,"width":732,"height":12}},{"id":"f844031b-fe51-4ade-8fa4-81d2d173cd16","block_type":"box","text":"vary. Certain investments in such obligations may be illiquid. The Manager believes that indexed and","page_number":92,"box":{"x":116,"y":258,"width":754,"height":12}},{"id":"e03997b3-2000-4f79-a24e-74b7ab487526","block_type":"box","text":"inverse floating obligations represent flexible portfolio management instruments for a Fund that allow","page_number":92,"box":{"x":117,"y":273,"width":751,"height":12}},{"id":"dbe9e04b-0a45-421f-8744-0faff5238fc7","block_type":"box","text":"the Fund to seek potential investment rewards, hedge other portfolio positions or vary the degree of","page_number":92,"box":{"x":116,"y":289,"width":744,"height":12}},{"id":"7c4a1f5d-7f76-4f65-bcef-1f191d9fbb2f","block_type":"box","text":"investment leverage relatively efficiently under different market conditions. A Fund may invest in","page_number":92,"box":{"x":117,"y":304,"width":716,"height":12}},{"id":"5d1a1b9e-fec2-4cb8-8aac-5a3b002d4764","block_type":"box","text":"indexed and inverse securities for hedging purposes or to seek to increase returns. When used for","page_number":92,"box":{"x":117,"y":320,"width":734,"height":12}},{"id":"8d0acc5f-1900-4fa0-afa8-be25c82c7d5b","block_type":"box","text":"hedging purposes, indexed and inverse securities involve correlation risk. Furthermore, where such a","page_number":92,"box":{"x":117,"y":335,"width":755,"height":12}},{"id":"eb3b121b-50a0-44d4-807a-088c2f84b67c","block_type":"box","text":"security includes a contingent liability, in the event of an adverse movement in the underlying index or","page_number":92,"box":{"x":116,"y":351,"width":759,"height":12}},{"id":"7ec47567-8ffc-4105-9c1c-5c616a83f489","block_type":"box","text":"interest rate, a Fund may be required to pay substantial additional margin to maintain the position.","page_number":92,"box":{"x":117,"y":366,"width":731,"height":12}},{"id":"a63ddca7-40a8-485e-9f5a-506a82326a02","block_type":"box","text":"The Funds may invest up to 10% of their total assets in leveraged inverse floating rate debt","page_number":92,"box":{"x":116,"y":397,"width":682,"height":12}},{"id":"b83c5492-938a-4a48-9a99-c7b3a85868b9","block_type":"box","text":"instruments (“inverse floaters”). Inverse floaters are securities the potential of which is inversely related","page_number":92,"box":{"x":117,"y":413,"width":768,"height":12}},{"id":"f80c9aa5-b76f-458e-8ab3-f591780657c8","block_type":"box","text":"to changes in interest rates. In general, the return on inverse floaters will decrease when short-term","page_number":92,"box":{"x":116,"y":428,"width":743,"height":12}},{"id":"56587717-9542-4d74-98b3-68eafa38bc1b","block_type":"box","text":"interest rates increase and increase when short-term rates decrease. Municipal tender option bonds,","page_number":92,"box":{"x":117,"y":444,"width":751,"height":12}},{"id":"e5c306f7-d195-4b71-a482-8819daf48750","block_type":"box","text":"both taxable and tax-exempt, which may include inverse floating rate debt instruments, (including","page_number":92,"box":{"x":117,"y":459,"width":725,"height":12}},{"id":"eb785f72-3968-4567-8fb2-b0e6bf90f8c9","block_type":"box","text":"residual interests thereon) are excluded from this 10% limitation.","page_number":92,"box":{"x":117,"y":475,"width":483,"height":12}},{"id":"abc3487b-cb9d-4210-af37-356871420dd3","block_type":"box","text":"Inflation Risk.","page_number":92,"box":{"x":116,"y":506,"width":109,"height":9}},{"id":"49aafba1-d606-4fe4-b407-06f40c489ddd","block_type":"box","text":"Like all funds, the Funds are subject to inflation risk. Inflation risk is the risk that the","page_number":92,"box":{"x":226,"y":506,"width":627,"height":12}},{"id":"ef2a2c75-27bf-4e5c-a993-ac189444929a","block_type":"box","text":"present value of assets or income from investments will be less in the future as inflation decreases the","page_number":92,"box":{"x":117,"y":521,"width":763,"height":12}},{"id":"cefa2740-a052-4dd3-a2af-602c97380f95","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":92,"box":{"x":116,"y":537,"width":739,"height":12}},{"id":"81a1662f-8b51-4cd6-a29b-ba6cbb17e92d","block_type":"box","text":"value of a Fund’s distributions. Inflation rates may change frequently and significantly due to a number","page_number":92,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"56f47112-fb6e-4880-99c8-83fff208c90e","block_type":"box","text":"of potential factors, including, among others, unexpected economic shifts or changes in fiscal or","page_number":92,"box":{"x":116,"y":568,"width":716,"height":12}},{"id":"d361b526-fef9-419a-a93b-9a0811796e2b","block_type":"box","text":"monetary policies.","page_number":92,"box":{"x":117,"y":583,"width":139,"height":12}},{"id":"282ca53c-30fc-462a-841e-90e9a851368f","block_type":"box","text":"Initial Public Offering (“IPO”) Risk.","page_number":92,"box":{"x":116,"y":614,"width":275,"height":12}},{"id":"9479cdd8-f040-441c-9318-1aabd4360f70","block_type":"box","text":"The volume of IPOs and the levels at which the newly issued","page_number":92,"box":{"x":392,"y":614,"width":462,"height":12}},{"id":"2c39826b-4c47-47ee-a8f4-995303a41b97","block_type":"box","text":"stocks trade in the secondary market are affected by the performance of the stock market overall. If","page_number":92,"box":{"x":116,"y":630,"width":743,"height":12}},{"id":"2efe7533-88c3-4c31-9e7e-02bf3e314cf3","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":92,"box":{"x":117,"y":645,"width":732,"height":12}},{"id":"14e4847d-fcfd-4f7f-8819-79c1559f49a2","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":92,"box":{"x":116,"y":661,"width":744,"height":12}},{"id":"47959b96-dbfe-476a-8fe0-a5a4bbd397d4","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":92,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"207c4bd8-53fd-4a1d-b5d5-939bf6f2c2da","block_type":"box","text":"to greater and more unpredictable price changes than more established stocks. IPOs have the","page_number":92,"box":{"x":116,"y":692,"width":701,"height":12}},{"id":"73431a01-e36e-43ed-bf44-93b586c721c7","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":92,"box":{"x":117,"y":707,"width":751,"height":12}},{"id":"f355b75e-21b1-41f4-9900-7c11ed9f64ff","block_type":"box","text":"time given possible price volatility. This may result in increased portfolio turnover and expenses, such","page_number":92,"box":{"x":116,"y":723,"width":752,"height":12}},{"id":"1e1488ef-dadc-471f-882b-473d21a51bb1","block_type":"box","text":"as commissions and transaction costs, and potentially result in taxable gains that the Fund will","page_number":92,"box":{"x":116,"y":738,"width":699,"height":12}},{"id":"ae8ca54d-7cb8-49f2-b63e-c22752268775","block_type":"box","text":"subsequently distribute to shareholders. There is no assurance that any Fund will have access to","page_number":92,"box":{"x":116,"y":754,"width":720,"height":12}},{"id":"e889b182-b1b1-4694-b9af-3840a1f80096","block_type":"box","text":"profitable IPOs and therefore investors should not rely on any past gains from IPOs as an indication of","page_number":92,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"a9a5048d-1439-4202-8a2a-5938386d3987","block_type":"box","text":"future performance. The investment performance of a Fund during periods when it is unable to invest","page_number":92,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"9c51f8c4-cd0b-47a9-97d9-648402fff433","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":92,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"d0367bef-1347-4ada-a631-126a93133d6d","block_type":"box","text":"Fund increases in size, the impact of IPOs on its performance will generally decrease. Securities","page_number":92,"box":{"x":117,"y":816,"width":716,"height":12}},{"id":"22b59d94-b6ba-437d-b41b-1db62f053131","block_type":"box","text":"issued in IPOs are subject to many of the same risks as investing in companies with smaller market","page_number":92,"box":{"x":117,"y":831,"width":743,"height":12}},{"id":"8d9942ba-42d1-4298-9010-9451d80d71a0","block_type":"box","text":"capitalizations. Securities issued in IPOs have no trading history, and information about the companies","page_number":92,"box":{"x":116,"y":847,"width":768,"height":12}},{"id":"0b0c19c2-f4fa-49db-b286-f878968528b1","block_type":"box","text":"may be available for very limited periods.","page_number":92,"box":{"x":117,"y":862,"width":308,"height":12}},{"id":"110283e0-7c9a-4f83-8341-e90a9e914f85","block_type":"box","text":"II-44","page_number":92,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"35c578d6-d089-495d-ba91-2dddd61b5c6e","block_type":"box","text":"NM1026U-6033243-92/221","page_number":92,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"a95a17a8-0964-4e89-93bc-4995c2001a23","block_type":"box","text":"Investment in Emerging Markets.","page_number":93,"box":{"x":116,"y":87,"width":268,"height":12}},{"id":"41026bb5-aeba-439c-aed9-82f704882e57","block_type":"box","text":"General.","page_number":93,"box":{"x":117,"y":110,"width":68,"height":10}},{"id":"60e14fc4-fc9c-44b1-91e7-0a011bb2fac7","block_type":"box","text":"Certain Funds may invest in the securities of issuers domiciled in various countries with emerging","page_number":93,"box":{"x":117,"y":134,"width":727,"height":12}},{"id":"2bd278f3-caeb-4c28-94a5-2b91e0023c57","block_type":"box","text":"capital markets. Unless otherwise provided in a Fund’s Prospectus, a country with an emerging capital","page_number":93,"box":{"x":116,"y":149,"width":765,"height":12}},{"id":"89f1491d-4397-4350-b010-f7f2f0df7cad","block_type":"box","text":"market is any country that is (i) generally recognized to be an emerging market country by the","page_number":93,"box":{"x":117,"y":165,"width":700,"height":12}},{"id":"e626b2cf-a099-4b59-8394-d406f9af9a24","block_type":"box","text":"international financial community, such as the International Finance Corporation, or","page_number":93,"box":{"x":117,"y":180,"width":617,"height":12}},{"id":"823e3c56-4fc7-4016-a9a1-9b9171be6128","block_type":"box","text":"determined by the","page_number":93,"box":{"x":739,"y":180,"width":139,"height":12}},{"id":"13505788-e9f7-4e2d-92a2-c689861e1d93","block_type":"box","text":"World Bank to have a low, middle or middle upper income economy; (ii) classified by the United","page_number":93,"box":{"x":116,"y":196,"width":714,"height":12}},{"id":"d028623f-5d44-4328-bf12-db8418e2d8a4","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":93,"box":{"x":117,"y":211,"width":762,"height":12}},{"id":"ca9e5231-a2d8-4fff-b276-6383de60ae5c","block_type":"box","text":"representative of emerging markets. Countries with emerging markets can be found in regions such as","page_number":93,"box":{"x":117,"y":227,"width":766,"height":12}},{"id":"f894cbb8-2852-4db1-8ed6-037951ffd2b6","block_type":"box","text":"Asia, Latin America, Eastern Europe and Africa.","page_number":93,"box":{"x":116,"y":242,"width":361,"height":12}},{"id":"996d263f-9d22-4067-9f7e-938629da1f8d","block_type":"box","text":"Investments in the securities of issuers domiciled in countries with emerging capital markets involve","page_number":93,"box":{"x":117,"y":273,"width":743,"height":12}},{"id":"7767db00-8db7-41d5-a487-54a560478ecf","block_type":"box","text":"certain additional risks that do not generally apply to investments in securities of issuers in more","page_number":93,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"7b295652-ccfb-49df-afb8-3db6a9aaad47","block_type":"box","text":"developed capital markets, such as (i) low or non-existent trading volume, resulting in market illiquidity","page_number":93,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"b3591257-6be7-4ba2-a349-736e0beeef7d","block_type":"box","text":"and increased volatility in prices for such securities, as compared to securities of comparable issuers in","page_number":93,"box":{"x":116,"y":320,"width":771,"height":12}},{"id":"5b5d388e-81b5-428a-8efa-e451580bc22c","block_type":"box","text":"more developed capital markets; (ii) uncertain national policies and social, political and economic","page_number":93,"box":{"x":117,"y":335,"width":723,"height":12}},{"id":"effd7927-eeb7-4368-a1bd-59c553bca692","block_type":"box","text":"instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of","page_number":93,"box":{"x":117,"y":351,"width":718,"height":12}},{"id":"1d3ba498-c64e-425a-86bd-383adad9ce7f","block_type":"box","text":"inflation or unfavorable diplomatic developments; (iii) possible fluctuations in exchange rates, differing","page_number":93,"box":{"x":117,"y":366,"width":758,"height":12}},{"id":"dc91587e-b562-4564-8f8b-a06e2680496a","block_type":"box","text":"legal systems and the existence or possible imposition of exchange controls, custodial restrictions or","page_number":93,"box":{"x":117,"y":382,"width":750,"height":12}},{"id":"6625a52b-9b3d-48f0-a830-6aab74d026cd","block_type":"box","text":"other foreign or U.S. Governmental laws or restrictions applicable to such investments; (iv) national","page_number":93,"box":{"x":116,"y":397,"width":741,"height":12}},{"id":"974fa2b0-0ffb-46b5-ae63-01071a65cdbf","block_type":"box","text":"policies that may limit a Fund’s investment opportunities such as restrictions on investment in issuers","page_number":93,"box":{"x":117,"y":413,"width":754,"height":12}},{"id":"64b3254b-3fcf-43c4-a81c-d017c4cc18ee","block_type":"box","text":"or industries deemed sensitive to national interests; and (v) the lack or relatively early development of","page_number":93,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"66c572f3-a30f-4577-8e04-5cadf5879cf5","block_type":"box","text":"legal structures governing private and foreign investments and private property. In addition to","page_number":93,"box":{"x":117,"y":444,"width":695,"height":12}},{"id":"e04fde4b-e03e-4535-ab44-472a2fe8ac47","block_type":"box","text":"withholding taxes on investment income, some countries with emerging markets may impose","page_number":93,"box":{"x":116,"y":459,"width":695,"height":12}},{"id":"e45a36e5-23e1-4e5a-8f2e-66bd06b307c6","block_type":"box","text":"differential capital gains taxes on foreign investors.","page_number":93,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"5804a706-16f9-4429-b5b6-2955a2f755b4","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant","page_number":93,"box":{"x":117,"y":506,"width":699,"height":12}},{"id":"e32f7039-4dd1-4929-8cb7-589220b1ab39","block_type":"box","text":"evolution and rapid development, and these countries may lack the social, political and economic","page_number":93,"box":{"x":116,"y":521,"width":726,"height":12}},{"id":"687280d2-5722-419e-ac89-2703eae2b8b5","block_type":"box","text":"stability characteristic of more developed countries. In such a dynamic environment, there can be no","page_number":93,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"49816c00-45d6-4db5-9176-98169bd55b61","block_type":"box","text":"assurance that any or all of these capital markets will continue to present viable investment","page_number":93,"box":{"x":116,"y":552,"width":681,"height":12}},{"id":"01a9e39c-08b9-4d46-8f50-1dcc755114de","block_type":"box","text":"opportunities for a Fund. In the past, governments of such nations have expropriated substantial","page_number":93,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"3bb0b16d-d585-473b-8497-70a54ee2c17b","block_type":"box","text":"amounts of private property, and most claims of the property owners have never been fully settled.","page_number":93,"box":{"x":116,"y":583,"width":736,"height":12}},{"id":"1253999f-59c1-47ce-8dc1-e1557d512a7b","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":93,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"80cccc0c-269c-43f5-b100-8bd07f48bdd7","block_type":"box","text":"Fund could lose the entire value of its investments in the affected market. As a result the risks","page_number":93,"box":{"x":117,"y":614,"width":700,"height":10}},{"id":"13baca84-fce5-4175-a3b9-888ab81c55e6","block_type":"box","text":"described above, including the risks of nationalization or expropriation of assets, may be heightened. In","page_number":93,"box":{"x":116,"y":630,"width":772,"height":12}},{"id":"e10dbc10-656c-4e37-bc56-31fa96a15b3c","block_type":"box","text":"addition, unanticipated political or social developments may affect the value of investments in these","page_number":93,"box":{"x":116,"y":645,"width":742,"height":12}},{"id":"4f4db7a0-eceb-48ec-97f6-bac06b83ee84","block_type":"box","text":"countries and the availability to a Fund of additional investments. The small size and inexperience of","page_number":93,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"9ec18acf-b59f-4d18-9a21-baec3ed8273c","block_type":"box","text":"the securities markets in certain of these countries and the limited volume of trading in securities in","page_number":93,"box":{"x":116,"y":676,"width":732,"height":12}},{"id":"73f19196-c699-4a03-b1e6-0462c039344d","block_type":"box","text":"these countries may make investments in the countries illiquid and more volatile than investments in","page_number":93,"box":{"x":116,"y":692,"width":742,"height":12}},{"id":"6a855024-99a5-4bd2-b660-d8552c4c49e9","block_type":"box","text":"more established markets.","page_number":93,"box":{"x":117,"y":707,"width":195,"height":10}},{"id":"a912340d-ac37-4b5a-b83b-67b849bcf0f7","block_type":"box","text":"Also, there may be less publicly available information about issuers in emerging markets than would be","page_number":93,"box":{"x":116,"y":738,"width":765,"height":12}},{"id":"565b5e00-8007-4750-a02d-aa7817fad298","block_type":"box","text":"available about issuers in more developed capital markets, and such issuers may not be subject to","page_number":93,"box":{"x":116,"y":754,"width":732,"height":12}},{"id":"fcc8e359-d35a-42f5-8660-f603c5781c79","block_type":"box","text":"accounting, auditing and financial reporting standards and requirements comparable to those to which","page_number":93,"box":{"x":116,"y":769,"width":756,"height":12}},{"id":"3a5526ee-537e-4dcb-946b-5d83b84de4cb","block_type":"box","text":"U.S. companies are subject. In certain countries with emerging capital markets, reporting standards","page_number":93,"box":{"x":117,"y":785,"width":737,"height":12}},{"id":"9f005fa9-89e8-4af6-a44c-acf851014abf","block_type":"box","text":"vary widely. As a result, traditional investment measurements used in the United States, such as price/","page_number":93,"box":{"x":116,"y":800,"width":762,"height":12}},{"id":"0973b0d5-0e1e-44da-85da-346f8f17671b","block_type":"box","text":"earnings ratios, may not be applicable. Emerging market securities may be substantially less liquid","page_number":93,"box":{"x":116,"y":816,"width":731,"height":12}},{"id":"f069fcf3-db85-446f-a6a6-8911e01ca407","block_type":"box","text":"than, and more volatile than, those of mature markets, and company shares may be held by a limited","page_number":93,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"a22a7780-edd6-44ae-a5db-839fe431a585","block_type":"box","text":"number of persons. This may adversely affect the timing and pricing of the Fund’s acquisition or","page_number":93,"box":{"x":117,"y":847,"width":715,"height":12}},{"id":"48a40fc0-c92c-4cb5-a99e-59bbbb4682f7","block_type":"box","text":"disposal of securities.","page_number":93,"box":{"x":116,"y":862,"width":165,"height":12}},{"id":"f15818b5-6bce-4186-992e-746d8a92594d","block_type":"box","text":"II-45","page_number":93,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"78825def-0801-41cd-87a8-cc2efc12e85e","block_type":"box","text":"NM1026U-6033243-93/221","page_number":93,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3bdc1723-1e28-4a17-bc94-db9180e8fbc0","block_type":"box","text":"Practices in relation to settlement of securities transactions in emerging markets involve higher risks","page_number":94,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"e6bcd863-e5a8-4631-8dc0-e0d99b2c0ed3","block_type":"box","text":"than those in developed markets, in part because a Fund will need to use brokers and counterparties","page_number":94,"box":{"x":116,"y":103,"width":755,"height":11}},{"id":"979467e6-8d02-42ed-8060-022f4eb8376c","block_type":"box","text":"that are less well capitalized, and custody and registration of assets in some countries may be","page_number":94,"box":{"x":116,"y":118,"width":703,"height":12}},{"id":"05538c49-8049-4dd9-998c-dbeb69bb31c6","block_type":"box","text":"unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer or refusal","page_number":94,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"3f24966d-fbdc-4741-9743-59ee58b10a7b","block_type":"box","text":"to recognize ownership exists in some emerging markets, and, along with other factors, could result in","page_number":94,"box":{"x":116,"y":149,"width":762,"height":12}},{"id":"009f58e1-51e8-4cce-826d-9fa7a7e3ac83","block_type":"box","text":"ownership registration being completely lost. A Fund would absorb any loss resulting from such","page_number":94,"box":{"x":116,"y":165,"width":712,"height":12}},{"id":"13b0ed30-0b75-4c79-9ea9-63066f923dc6","block_type":"box","text":"registration problems and may have no successful claim for compensation.","page_number":94,"box":{"x":117,"y":180,"width":560,"height":12}},{"id":"2a0ea785-2328-467b-bda9-601fe936d469","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":94,"box":{"x":116,"y":211,"width":766,"height":12}},{"id":"8d3b3455-bab6-4d3b-a3a9-12adc0a1a8d4","block_type":"box","text":"those caused by environmental changes related to climate change, social issues (including relating to","page_number":94,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"0c7fabd4-b196-429e-b37c-c3988fc89d89","block_type":"box","text":"labor rights) and governance risk (including but not limited to risks around board independence,","page_number":94,"box":{"x":117,"y":242,"width":713,"height":12}},{"id":"c0b593df-8a74-4138-9865-b633afe62611","block_type":"box","text":"ownership and control, or audit and tax management). Additionally, disclosures or third-party data","page_number":94,"box":{"x":116,"y":258,"width":730,"height":12}},{"id":"daef3b62-3dce-46d0-94ea-be245398293a","block_type":"box","text":"coverage associated with sustainability risks is generally less available or transparent in these markets.","page_number":94,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"4f7666c3-74c3-4fa1-999b-d7b9f0d847c2","block_type":"box","text":"Investment in non-dollar denominated securities including securities from issuers located in emerging","page_number":94,"box":{"x":117,"y":304,"width":755,"height":12}},{"id":"aba33e0c-bc45-43ac-8791-40330a997700","block_type":"box","text":"market countries may be on either a currency hedged or unhedged basis, and the Funds may hold","page_number":94,"box":{"x":117,"y":320,"width":735,"height":12}},{"id":"f74f617c-7bd4-48ce-a084-dddb88c464c8","block_type":"box","text":"from time to time various foreign currencies pending investment or conversion into U.S. dollars. Some","page_number":94,"box":{"x":116,"y":335,"width":761,"height":12}},{"id":"0c1f2406-136a-4382-919d-848bd886d267","block_type":"box","text":"of these instruments may have the characteristics of futures contracts. In addition, certain Funds may","page_number":94,"box":{"x":116,"y":351,"width":757,"height":12}},{"id":"45e7e213-774d-43ec-bc71-b3a03b70e4b5","block_type":"box","text":"engage in foreign currency exchange transactions to seek to protect against changes in the level of","page_number":94,"box":{"x":116,"y":366,"width":742,"height":12}},{"id":"0d43ceef-1506-420b-818e-47d3dcade51f","block_type":"box","text":"future exchange rates which would adversely affect the Fund’s performance. These investments and","page_number":94,"box":{"x":116,"y":382,"width":752,"height":12}},{"id":"91371f7d-6ed1-418d-82b5-7e4df0c42522","block_type":"box","text":"transactions involving foreign securities, currencies, options (including options that relate to foreign","page_number":94,"box":{"x":116,"y":397,"width":738,"height":12}},{"id":"820fb983-06fa-4d53-9fdc-1b44e9db37f5","block_type":"box","text":"currencies), futures, hedging and cross-hedging are described under “Derivatives.”","page_number":94,"box":{"x":116,"y":413,"width":619,"height":12}},{"id":"933e8809-e0d0-465a-a73f-78ee59a4178d","block_type":"box","text":"Risks of Investing in Asia-Pacific Countries.","page_number":94,"box":{"x":116,"y":444,"width":328,"height":12}},{"id":"c0735202-d623-49f6-8dee-162e4354bdf0","block_type":"box","text":"In addition to the risks of foreign investing and the risks of","page_number":94,"box":{"x":445,"y":444,"width":432,"height":12}},{"id":"235df00b-2134-4306-8f29-ac6d3a4bd1ac","block_type":"box","text":"investing in developing markets, the developing market Asia-Pacific countries in which a Fund may","page_number":94,"box":{"x":117,"y":459,"width":738,"height":12}},{"id":"77993846-f1e4-416a-b5b0-e00e5c60b7f5","block_type":"box","text":"invest are subject to certain additional or specific risks. Certain Funds may make substantial","page_number":94,"box":{"x":117,"y":475,"width":687,"height":12}},{"id":"a17f0342-b21a-4b9f-bc60-d84a92943ef8","block_type":"box","text":"investments in Asia-Pacific countries. In many of these markets, there is a high concentration of market","page_number":94,"box":{"x":117,"y":490,"width":771,"height":12}},{"id":"ed440266-64cf-4fcb-a98b-a1d6d68de071","block_type":"box","text":"capitalization and trading volume in a small number of issuers representing a limited number of","page_number":94,"box":{"x":116,"y":506,"width":710,"height":12}},{"id":"2ea9af62-2813-4926-9861-0b247e42c8bd","block_type":"box","text":"industries, as well as a high concentration of investors and financial intermediaries. Many of these","page_number":94,"box":{"x":117,"y":521,"width":730,"height":12}},{"id":"8929aea9-6e31-4bc3-a203-e0c22d01f837","block_type":"box","text":"markets also may be affected by developments with respect to more established markets in the region","page_number":94,"box":{"x":117,"y":537,"width":763,"height":12}},{"id":"595ae2e5-b35f-4698-924b-a935a7c8c5d7","block_type":"box","text":"such as in Japan and Hong Kong. Brokers in developing market Asia-Pacific countries typically are","page_number":94,"box":{"x":116,"y":552,"width":739,"height":12}},{"id":"f158edba-e952-4619-badf-7909d49c1887","block_type":"box","text":"fewer in number and less well capitalized than brokers in the United States. These factors, combined","page_number":94,"box":{"x":116,"y":568,"width":754,"height":12}},{"id":"751d0072-f476-49ea-96c4-113381bbfd65","block_type":"box","text":"with the U.S. regulatory requirements for open-end investment companies and the restrictions on","page_number":94,"box":{"x":116,"y":583,"width":725,"height":12}},{"id":"88aa1c50-ed25-4c2d-9938-8ec29e318f54","block_type":"box","text":"foreign investment discussed below, result in potentially fewer investment opportunities for a Fund and","page_number":94,"box":{"x":116,"y":599,"width":766,"height":12}},{"id":"831512c8-11cc-4540-aec3-9d4731dc9bf0","block_type":"box","text":"may have an adverse impact on the investment performance of the Fund.","page_number":94,"box":{"x":117,"y":614,"width":550,"height":12}},{"id":"e148396b-2679-4ba6-81f5-e4cc4f1e069d","block_type":"box","text":"Many of the developing market Asia-Pacific countries may be subject to a greater degree of economic,","page_number":94,"box":{"x":117,"y":645,"width":757,"height":12}},{"id":"f5e1adfb-5c5f-40a1-add9-2eeeaea7f5e7","block_type":"box","text":"political and social instability than is the case in the United States and Western European countries.","page_number":94,"box":{"x":117,"y":661,"width":730,"height":12}},{"id":"4608d018-ad39-4d04-bb33-fccf9bfa5dd2","block_type":"box","text":"Such instability may result from, among other things: (i) authoritarian governments or military","page_number":94,"box":{"x":116,"y":676,"width":681,"height":12}},{"id":"35763484-54c9-4f82-9043-3ed3c008da4d","block_type":"box","text":"involvement in political and economic decision-making, including changes in government through extra","page_number":94,"box":{"x":117,"y":692,"width":759,"height":12}},{"id":"1fa92ae5-34d9-40c5-8fb2-28d54dba2815","block_type":"box","text":"constitutional means; (ii) popular unrest associated with demands for improved political, economic and","page_number":94,"box":{"x":116,"y":707,"width":751,"height":12}},{"id":"745e8870-b493-4405-a272-158a50de017d","block_type":"box","text":"social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and","page_number":94,"box":{"x":116,"y":723,"width":698,"height":12}},{"id":"034b7b06-00f3-4ff4-abad-9ee602fcd40d","block_type":"box","text":"(v) ethnic, religious and racial disaffection. In addition, the governments of many of such countries, such","page_number":94,"box":{"x":117,"y":738,"width":761,"height":12}},{"id":"480bcc3e-2ab4-4994-b429-2343238026d5","block_type":"box","text":"as Indonesia, have a substantial role in regulating and supervising the economy. Another risk common","page_number":94,"box":{"x":116,"y":754,"width":752,"height":12}},{"id":"02d6cf2c-225f-408d-a09b-5afe936e27f8","block_type":"box","text":"to most such countries is that the economy is heavily export oriented and, accordingly, is dependent","page_number":94,"box":{"x":116,"y":769,"width":735,"height":12}},{"id":"26c05228-6ac3-4160-b561-3c9d9df7c19f","block_type":"box","text":"upon international trade. The existence of overburdened infrastructure and obsolete financial systems","page_number":94,"box":{"x":117,"y":785,"width":745,"height":12}},{"id":"cda410e9-3962-446f-b21a-7c657d5f1ff4","block_type":"box","text":"also presents risks in certain countries, as do environmental problems. Certain economies also depend","page_number":94,"box":{"x":116,"y":800,"width":757,"height":12}},{"id":"57e39f9b-acc2-4324-8499-62792012a082","block_type":"box","text":"to a significant degree upon exports of primary commodities and, therefore, are vulnerable to changes in","page_number":94,"box":{"x":116,"y":816,"width":766,"height":12}},{"id":"11a78718-3622-4a81-8a5e-924eb1281b05","block_type":"box","text":"commodity prices that, in turn, may be affected by a variety of factors.","page_number":94,"box":{"x":116,"y":831,"width":517,"height":12}},{"id":"96aeef17-d0b3-4121-8a45-f657d908ca2f","block_type":"box","text":"The legal systems in certain developing market Asia-Pacific countries also may have an adverse","page_number":94,"box":{"x":116,"y":862,"width":722,"height":12}},{"id":"ec3cb3a7-5f5c-42b2-96cc-d7ae98509b9a","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":94,"box":{"x":117,"y":878,"width":769,"height":12}},{"id":"34d668f8-35c0-45c9-90f8-22ccfd01a9a8","block_type":"box","text":"II-46","page_number":94,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5654c2f2-1f85-40ba-be3f-892a42737f4b","block_type":"box","text":"NM1026U-6033243-94/221","page_number":94,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"5a2d9ac4-c35c-49dc-911b-24e6b81e729e","block_type":"box","text":"respect to acts of the corporation is generally limited to the amount of the shareholder’s investment, the","page_number":95,"box":{"x":117,"y":87,"width":771,"height":12}},{"id":"5bec83e6-ca05-4f17-9a44-a28ea2c2e0d0","block_type":"box","text":"notion of limited liability is less clear in certain emerging market Asia-Pacific countries. Similarly, the","page_number":95,"box":{"x":117,"y":102,"width":744,"height":13}},{"id":"db77b683-7987-4d55-aa0d-3c360ff28987","block_type":"box","text":"rights of investors in developing market Asia-Pacific companies may be more limited than those of","page_number":95,"box":{"x":117,"y":118,"width":732,"height":12}},{"id":"f1a0540c-a32e-496e-866d-f39877b52f15","block_type":"box","text":"shareholders of U.S. corporations. It may be difficult or impossible to obtain and/or enforce a judgment","page_number":95,"box":{"x":116,"y":134,"width":765,"height":12}},{"id":"2ee5d125-bd77-4152-a32d-0e4e7503cd29","block_type":"box","text":"in a developing market Asia-Pacific country.","page_number":95,"box":{"x":117,"y":149,"width":330,"height":12}},{"id":"aa2f551c-e471-4303-99e0-05d7b56c76fd","block_type":"box","text":"Governments of many developing market Asia-Pacific countries have exercised and continue to","page_number":95,"box":{"x":117,"y":180,"width":714,"height":12}},{"id":"1479f783-1e22-4137-96db-ffc537ae7288","block_type":"box","text":"exercise substantial influence over many aspects of the private sector. In certain cases, the","page_number":95,"box":{"x":116,"y":196,"width":683,"height":12}},{"id":"065c6b0b-323e-45a8-adb5-d2d4caef6929","block_type":"box","text":"government owns or controls many companies, including the largest in the country. Accordingly,","page_number":95,"box":{"x":116,"y":211,"width":718,"height":12}},{"id":"7a46b9b6-73be-4508-9bf4-9ae1cb047ce1","block_type":"box","text":"government actions in the future could have a significant effect on economic conditions in developing","page_number":95,"box":{"x":116,"y":227,"width":755,"height":12}},{"id":"9a185535-0e4e-4a4f-abed-e327021b8602","block_type":"box","text":"market Asia-Pacific countries, which could affect private sector companies and a Fund itself, as well as","page_number":95,"box":{"x":117,"y":242,"width":768,"height":12}},{"id":"438d05fa-29b0-42b3-9a1e-95970a2e0baa","block_type":"box","text":"the value of securities in the Fund’s portfolio. In addition, economic statistics of developing market","page_number":95,"box":{"x":116,"y":258,"width":731,"height":12}},{"id":"dbc7b7b7-021a-46f9-87e4-62cc216683fd","block_type":"box","text":"Asia-Pacific countries may be less reliable than economic statistics of more developed nations.","page_number":95,"box":{"x":116,"y":273,"width":710,"height":12}},{"id":"d811db72-4fcd-459b-96d4-4e6c827b3348","block_type":"box","text":"In addition to the relative lack of publicly available information about developing market Asia-Pacific","page_number":95,"box":{"x":117,"y":304,"width":741,"height":12}},{"id":"b9743535-926b-46d3-a5a1-a5f626e0cbe4","block_type":"box","text":"issuers and the possibility that such issuers may not be subject to the same accounting, auditing and","page_number":95,"box":{"x":117,"y":320,"width":752,"height":12}},{"id":"489b2ad0-1986-4f40-8d49-89dd377ada95","block_type":"box","text":"financial reporting standards as U.S. companies, inflation accounting rules in some developing market","page_number":95,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"bd444994-3e65-46c8-b74f-9e0fd9c8a0f6","block_type":"box","text":"Asia-Pacific countries require companies that keep accounting records in the local currency, for both","page_number":95,"box":{"x":116,"y":351,"width":750,"height":12}},{"id":"f1673dcd-3867-4b94-9397-8e210120fbd4","block_type":"box","text":"tax and accounting purposes, to restate certain assets and liabilities on the company’s balance sheet","page_number":95,"box":{"x":116,"y":366,"width":755,"height":12}},{"id":"88ecf1e8-3cfd-46ea-9b71-60696e9eb04b","block_type":"box","text":"in order to express items in terms of currency of constant purchasing power. Inflation accounting may","page_number":95,"box":{"x":117,"y":382,"width":756,"height":12}},{"id":"fb2058a3-b245-4bbd-8fbe-d2ca410e7908","block_type":"box","text":"indirectly generate losses or profits for certain developing market Asia-Pacific companies.","page_number":95,"box":{"x":117,"y":397,"width":669,"height":12}},{"id":"246e69d5-d7f7-4165-931c-7de04b6b659b","block_type":"box","text":"Satisfactory custodial services for investment securities may not be available in some developing Asia","page_number":95,"box":{"x":116,"y":428,"width":762,"height":12}},{"id":"d54a8b67-1697-44fc-bddc-1c98b14e168b","block_type":"box","text":"Pacific countries, which may result in the Fund incurring additional costs and delays in providing","page_number":95,"box":{"x":117,"y":444,"width":716,"height":12}},{"id":"5c2bceec-d887-422d-8478-0ef1ce052802","block_type":"box","text":"transportation and custody services for such securities outside such countries.","page_number":95,"box":{"x":116,"y":459,"width":586,"height":12}},{"id":"bc021997-f427-4ee8-a7c2-6cfec652261c","block_type":"box","text":"Certain developing Asia-Pacific countries, such as the Philippines, India and Turkey, are especially","page_number":95,"box":{"x":117,"y":490,"width":738,"height":12}},{"id":"1796f2ae-7ab7-4c2a-9ba4-51851772d78d","block_type":"box","text":"large debtors to commercial banks and foreign governments.","page_number":95,"box":{"x":117,"y":506,"width":456,"height":12}},{"id":"e74f3fa1-9f79-45df-bb7f-e463b02b71b4","block_type":"box","text":"Natural disasters in Asia-Pacific countries, and the resulting damage, could have a severe and","page_number":95,"box":{"x":117,"y":537,"width":705,"height":12}},{"id":"cbc72273-2a19-4cce-a728-c003b8fa430a","block_type":"box","text":"negative impact on a Fund’s investment portfolio and, in the longer term, could impair the ability of","page_number":95,"box":{"x":117,"y":552,"width":732,"height":12}},{"id":"565ee6f3-97be-4717-8eae-58abcca88f18","block_type":"box","text":"issuers in which the Fund invests to conduct their businesses in the manner normally conducted.","page_number":95,"box":{"x":117,"y":568,"width":722,"height":12}},{"id":"36750b2f-5228-4afc-97dc-0b221daa152f","block_type":"box","text":"Fund management may determine that, notwithstanding otherwise favorable investment criteria, it may","page_number":95,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"70027433-319d-4480-8743-9bbc04b2357a","block_type":"box","text":"not be practicable or appropriate to invest in a particular developing Asia-Pacific country. A Fund may","page_number":95,"box":{"x":117,"y":614,"width":757,"height":12}},{"id":"88f9a70d-5d52-4c05-880e-6a374d35d126","block_type":"box","text":"invest in countries in which foreign investors, including management of the Fund, have had no or","page_number":95,"box":{"x":117,"y":630,"width":722,"height":12}},{"id":"e00ed133-4295-40e0-8d92-46fd5ea7cf39","block_type":"box","text":"limited prior experience.","page_number":95,"box":{"x":117,"y":645,"width":182,"height":12}},{"id":"facfd159-d1a7-4aea-87df-2188959b29c3","block_type":"box","text":"Restrictions on Foreign Investments in Asia-Pacific Countries.","page_number":95,"box":{"x":116,"y":676,"width":458,"height":12}},{"id":"3506bd29-588b-413e-b4dc-09d1dbd02541","block_type":"box","text":"Some developing Asia-Pacific countries","page_number":95,"box":{"x":581,"y":676,"width":294,"height":12}},{"id":"4484ed0f-1dab-4d37-8d4e-c97a49eaf804","block_type":"box","text":"prohibit or impose substantial restrictions on investments in their capital markets, particularly their","page_number":95,"box":{"x":117,"y":692,"width":723,"height":12}},{"id":"d8fd677e-0b6b-48e1-b76a-6347729ff8df","block_type":"box","text":"equity markets, by foreign entities such as a Fund. As illustrations, certain countries may require","page_number":95,"box":{"x":116,"y":707,"width":714,"height":12}},{"id":"1af3ef08-0f12-4ac5-a181-d5ad350bb5ec","block_type":"box","text":"governmental approval prior to investments by foreign persons or limit the amount of investment by","page_number":95,"box":{"x":116,"y":723,"width":736,"height":12}},{"id":"87cdcc5e-bce3-4adf-83e7-904bb8dfa96f","block_type":"box","text":"foreign persons in a particular company or limit the investment by foreign persons to only a specific","page_number":95,"box":{"x":116,"y":738,"width":735,"height":12}},{"id":"27181641-0b63-4c03-92fa-da412948fb94","block_type":"box","text":"class of securities of a company which may have less advantageous terms (including price and","page_number":95,"box":{"x":116,"y":754,"width":705,"height":12}},{"id":"be667182-e162-4e13-9b7c-3e8101a3fa94","block_type":"box","text":"shareholder rights) than securities of the company available for purchase by nationals. There can be","page_number":95,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"c9f095c0-aeb9-4e62-80c9-c8222be5d68b","block_type":"box","text":"no assurance that a Fund will be able to obtain required governmental approvals in a timely manner. In","page_number":95,"box":{"x":117,"y":785,"width":762,"height":12}},{"id":"4e1bd69c-0ab2-425d-8c7d-c7a176f84cdb","block_type":"box","text":"addition, changes to restrictions on foreign ownership of securities subsequent to a Fund’s purchase of","page_number":95,"box":{"x":116,"y":800,"width":765,"height":12}},{"id":"8b90e759-5238-423f-9cdd-160cbb95bdd3","block_type":"box","text":"such securities may have an adverse effect on the value of such shares. Certain countries may restrict","page_number":95,"box":{"x":116,"y":816,"width":761,"height":12}},{"id":"13144f8c-daba-48aa-8933-b2c06bd88c7a","block_type":"box","text":"investment opportunities in issuers or industries deemed important to national interests.","page_number":95,"box":{"x":117,"y":831,"width":654,"height":12}},{"id":"e11b5894-3f4e-4d46-a1e0-1aa411748a7d","block_type":"box","text":"The manner in which foreign investors may invest in companies in certain developing Asia-Pacific","page_number":95,"box":{"x":116,"y":862,"width":729,"height":12}},{"id":"d0f273d3-7a9d-466a-b919-5b425d43618a","block_type":"box","text":"countries, as well as limitations on such investments, also may have an adverse impact on the","page_number":95,"box":{"x":116,"y":878,"width":705,"height":12}},{"id":"0d3835bf-3437-4261-84ab-ef0bc5393817","block_type":"box","text":"II-47","page_number":95,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1057f4b3-6e12-45b2-853c-88d01db66ece","block_type":"box","text":"NM1026U-6033243-95/221","page_number":95,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"551630f1-fcc6-41bf-a1f4-429911712b63","block_type":"box","text":"operations of a Fund. For example, a Fund may be required in certain of such countries to invest","page_number":96,"box":{"x":116,"y":87,"width":722,"height":12}},{"id":"034de734-6f27-43b6-b88f-a61027d16693","block_type":"box","text":"initially through a local broker or other entity and then have the shares purchased re-registered in the","page_number":96,"box":{"x":117,"y":103,"width":753,"height":12}},{"id":"26086288-e120-4caf-90f4-bdb9580a5f75","block_type":"box","text":"name of the Fund. Re-registration may in some instances not be able to occur on a timely basis,","page_number":96,"box":{"x":117,"y":118,"width":718,"height":12}},{"id":"48bf2d89-b9d8-46a0-9aa5-a0570f179207","block_type":"box","text":"resulting in a delay during which a Fund may be denied certain of its rights as an investor, including","page_number":96,"box":{"x":117,"y":134,"width":742,"height":12}},{"id":"1e1ce8c8-28d3-4552-b122-ceb7aea5d481","block_type":"box","text":"rights as to dividends or to be made aware of certain corporate actions. There also may be instances","page_number":96,"box":{"x":117,"y":149,"width":753,"height":12}},{"id":"02400519-5721-4fba-b42a-181cdfcbeaff","block_type":"box","text":"where a Fund places a purchase order but is subsequently informed, at the time of re-registration, that","page_number":96,"box":{"x":116,"y":165,"width":764,"height":12}},{"id":"01baa81a-accb-4dcc-9f7d-88fe84ac42a5","block_type":"box","text":"the permissible allocation of the investment to foreign investors has been filled, depriving the Fund of","page_number":96,"box":{"x":116,"y":180,"width":754,"height":12}},{"id":"a86bec3e-d35f-4796-9120-65532635692b","block_type":"box","text":"the ability to make its desired investment at that time.","page_number":96,"box":{"x":116,"y":196,"width":400,"height":12}},{"id":"e86c2b2d-4ec3-454c-8567-a74badddf954","block_type":"box","text":"Substantial limitations may exist in certain countries with respect to a Fund’s ability to repatriate","page_number":96,"box":{"x":116,"y":227,"width":714,"height":12}},{"id":"a19c9c21-e280-4e47-a5be-7985b12069af","block_type":"box","text":"investment income, capital or the proceeds of sales of securities by foreign investors. A Fund could be","page_number":96,"box":{"x":117,"y":242,"width":763,"height":12}},{"id":"d7b01956-4c3e-4f8f-99ac-b62d72383742","block_type":"box","text":"adversely affected by delays in, or a refusal to grant, any required governmental approval for","page_number":96,"box":{"x":116,"y":258,"width":693,"height":12}},{"id":"cb0155c1-fd87-4961-bae4-6cbbd0f55292","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":96,"box":{"x":117,"y":273,"width":759,"height":12}},{"id":"700910cd-bf64-4cc1-80dd-443c11dd2241","block_type":"box","text":"possible that certain countries may impose currency controls or other restrictions relating to their","page_number":96,"box":{"x":117,"y":289,"width":719,"height":12}},{"id":"42951879-f54d-4a35-9455-6aa158645605","block_type":"box","text":"currencies or to securities of issuers in those countries. To the extent that such restrictions have the","page_number":96,"box":{"x":116,"y":304,"width":746,"height":10}},{"id":"e8ceba54-ee9e-4c53-ae72-9fed045b8a13","block_type":"box","text":"effect of making certain investments illiquid, securities may not be available for sale to meet","page_number":96,"box":{"x":116,"y":320,"width":685,"height":12}},{"id":"629977ec-3e12-41e6-bc94-2dde365fc3d1","block_type":"box","text":"redemptions. Depending on a variety of financial factors, the percentage of a Fund’s portfolio subject to","page_number":96,"box":{"x":117,"y":335,"width":770,"height":12}},{"id":"a119372e-a86e-4e78-b243-b4596aaf7cef","block_type":"box","text":"currency controls may increase. In the event other countries impose similar controls, the portion of the","page_number":96,"box":{"x":116,"y":351,"width":763,"height":12}},{"id":"a8732842-5106-4147-b558-6e4b88955b23","block_type":"box","text":"Fund’s assets that may be used to meet redemptions may be further decreased. Even where there is","page_number":96,"box":{"x":117,"y":366,"width":754,"height":12}},{"id":"7b52fcff-4482-47d7-8ed0-e87d391427da","block_type":"box","text":"no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects","page_number":96,"box":{"x":117,"y":382,"width":771,"height":12}},{"id":"f55fd10f-21f7-44e7-9212-7554f3db7670","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":96,"box":{"x":116,"y":397,"width":751,"height":12}},{"id":"7b7899be-efdd-4fc4-a722-4c1cf67c32d2","block_type":"box","text":"only at an exchange rate established by the government).","page_number":96,"box":{"x":116,"y":413,"width":433,"height":12}},{"id":"3d58e105-4957-4aaa-a5d7-49cac66c2230","block_type":"box","text":"In certain countries, banks or other financial institutions may be among the leading companies or have","page_number":96,"box":{"x":117,"y":444,"width":763,"height":12}},{"id":"2b2bf328-f488-448c-b202-6cc1a62d4b69","block_type":"box","text":"actively traded securities available for investment. The Investment Company Act restricts a Fund’s","page_number":96,"box":{"x":116,"y":459,"width":734,"height":12}},{"id":"948b7247-1a62-442e-bfb3-b0b6faff688a","block_type":"box","text":"investments in any equity securities of an issuer that, in its most recent fiscal year, derived more than","page_number":96,"box":{"x":117,"y":475,"width":755,"height":12}},{"id":"da285859-7813-4d71-b906-ee17e6ed933f","block_type":"box","text":"15% of its revenues from “securities related activities,” as defined by the rules thereunder. These","page_number":96,"box":{"x":118,"y":490,"width":722,"height":12}},{"id":"457af934-bd1e-45a0-ae59-7a3f0c3ec543","block_type":"box","text":"provisions may restrict a Fund’s investments in certain foreign banks and other financial institutions.","page_number":96,"box":{"x":117,"y":506,"width":744,"height":12}},{"id":"8c599bff-18b5-4652-a7ee-a73fa0753a67","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant","page_number":96,"box":{"x":117,"y":537,"width":699,"height":12}},{"id":"802df5ca-d3d4-4252-b3dd-428e5c757be6","block_type":"box","text":"evolution and rapid development, and these countries may lack the social, political and economic","page_number":96,"box":{"x":116,"y":552,"width":726,"height":12}},{"id":"e6382627-61ed-4637-9342-f521c2e347d0","block_type":"box","text":"stability characteristic of more developed countries. Some of these countries may have in the past","page_number":96,"box":{"x":116,"y":568,"width":732,"height":12}},{"id":"717d2489-a3f0-4343-866d-663210654d77","block_type":"box","text":"failed to recognize private property rights and have at times nationalized or expropriated the assets of","page_number":96,"box":{"x":116,"y":583,"width":759,"height":12}},{"id":"5ec02613-f7a4-4d06-b006-91c608e75694","block_type":"box","text":"private companies. As a result the risks described above, including the risks of nationalization or","page_number":96,"box":{"x":117,"y":599,"width":718,"height":12}},{"id":"58265d48-e32a-4849-837c-e8b1205f39c8","block_type":"box","text":"expropriation of assets, may be heightened. In addition, unanticipated political or social developments","page_number":96,"box":{"x":116,"y":614,"width":760,"height":12}},{"id":"c46b0cc4-0a29-4cbc-8aec-5e2c15eacc47","block_type":"box","text":"may affect the value of investments in these countries and the availability to a Fund of additional","page_number":96,"box":{"x":117,"y":630,"width":718,"height":12}},{"id":"6047c293-c78a-4025-b9ee-3290da282133","block_type":"box","text":"investments in emerging market countries. The small size and inexperience of the securities markets in","page_number":96,"box":{"x":117,"y":645,"width":770,"height":12}},{"id":"50a2081a-4f7c-421e-b0a9-7fa96a65a5ec","block_type":"box","text":"certain of these countries and the limited volume of trading in securities in these countries may make","page_number":96,"box":{"x":116,"y":661,"width":748,"height":12}},{"id":"48de8af9-942e-4e66-9501-e271802945f3","block_type":"box","text":"investments in the countries illiquid and more volatile than investments in Japan or most Western","page_number":96,"box":{"x":117,"y":676,"width":719,"height":12}},{"id":"16dd0ac6-24f8-4f40-a5b4-50184acecdbd","block_type":"box","text":"European countries. There may be little financial or accounting information available with respect to","page_number":96,"box":{"x":117,"y":692,"width":736,"height":12}},{"id":"ed05659a-d093-4f50-a977-280d37c51891","block_type":"box","text":"issuers located in certain emerging market countries, and it may be difficult to assess the value or","page_number":96,"box":{"x":117,"y":707,"width":724,"height":12}},{"id":"649cab25-2b0c-46fd-b062-3745df95a4bb","block_type":"box","text":"prospects of an investment in such issuers.","page_number":96,"box":{"x":117,"y":723,"width":319,"height":12}},{"id":"308e5fe2-33f9-47de-af2b-fb61b6910e5c","block_type":"box","text":"The expense ratios of the Funds investing significantly in foreign securities can be expected to be","page_number":96,"box":{"x":116,"y":754,"width":723,"height":12}},{"id":"24f1c784-e158-410b-a798-58e9c93c4642","block_type":"box","text":"higher than those of Funds investing primarily in domestic securities. The costs attributable to investing","page_number":96,"box":{"x":117,"y":769,"width":763,"height":12}},{"id":"311a3836-8655-44ad-862b-571db0f14147","block_type":"box","text":"abroad are usually higher for several reasons, such as the higher cost of custody of foreign securities,","page_number":96,"box":{"x":116,"y":785,"width":755,"height":12}},{"id":"3e12a3c8-3f23-44a4-83e4-3d06c8e2d606","block_type":"box","text":"higher commissions paid on comparable transactions on foreign markets and additional costs arising","page_number":96,"box":{"x":117,"y":800,"width":746,"height":12}},{"id":"68953bbe-ba6c-4c6f-90dd-5300e4a025b1","block_type":"box","text":"from delays in settlements of transactions involving foreign securities.","page_number":96,"box":{"x":116,"y":816,"width":515,"height":12}},{"id":"299ba021-0f42-413f-84be-ece437e825f5","block_type":"box","text":"Risks of Investments in Russia.","page_number":96,"box":{"x":116,"y":847,"width":232,"height":9}},{"id":"44344573-8d4f-42ce-8294-4a910abda6e9","block_type":"box","text":"A Fund may invest a portion of its assets in securities issued by","page_number":96,"box":{"x":350,"y":847,"width":482,"height":12}},{"id":"fcc8dbc3-0fcb-4faf-8130-beee9d3c5b6c","block_type":"box","text":"companies located in Russia. The Russian securities market suffers from a variety of problems","page_number":96,"box":{"x":116,"y":862,"width":709,"height":12}},{"id":"19c23817-ea51-4793-a563-815e26346c23","block_type":"box","text":"described above in “Investment in Emerging Markets” not encountered in more developed markets.","page_number":96,"box":{"x":116,"y":878,"width":742,"height":12}},{"id":"65f340ec-def0-44ef-9a87-67721a71dc8c","block_type":"box","text":"II-48","page_number":96,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9e917759-76fc-40e4-aff5-f5d715c77079","block_type":"box","text":"NM1026U-6033243-96/221","page_number":96,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f91cb0d2-f36a-4a43-8501-bd4bfa13fca8","block_type":"box","text":"The Russian securities market is relatively new, and a substantial portion of securities transactions in","page_number":97,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"75b36a89-32a6-4b69-8aeb-933c6308ed84","block_type":"box","text":"Russia are privately negotiated outside of stock exchanges. The inexperience of the Russian securities","page_number":97,"box":{"x":117,"y":102,"width":769,"height":13}},{"id":"04de4fdf-a5e7-48fe-a485-743e00aeafc7","block_type":"box","text":"market and the limited volume of trading in securities in the market may make obtaining accurate","page_number":97,"box":{"x":117,"y":118,"width":723,"height":12}},{"id":"025ef7a9-dad1-48d6-a7e3-a9db8df0ab54","block_type":"box","text":"prices on portfolio securities from independent sources more difficult than in more developed markets.","page_number":97,"box":{"x":117,"y":134,"width":761,"height":11}},{"id":"bfc92dac-2bda-456a-96a8-a40484160ca7","block_type":"box","text":"Because of the underdeveloped state of Russia’s se","page_number":97,"box":{"x":117,"y":165,"width":378,"height":11}},{"id":"53dd1b26-0ac4-4822-8702-d057f8522823","block_type":"box","text":"curities markets and banking and telecommunication","page_number":97,"box":{"x":496,"y":165,"width":388,"height":12}},{"id":"854d23ab-6e17-4210-a291-427355f90166","block_type":"box","text":"systems, settlement, clearing and registration of securi","page_number":97,"box":{"x":116,"y":180,"width":396,"height":12}},{"id":"46d2e874-b5d9-4a60-86a6-4ec78f6a70dd","block_type":"box","text":"ties transactions are subject to additional risks.","page_number":97,"box":{"x":513,"y":180,"width":344,"height":12}},{"id":"c9021289-492f-4140-b225-0fd849623fba","block_type":"box","text":"Prior to 2013, there was no central registration","page_number":97,"box":{"x":117,"y":196,"width":341,"height":12}},{"id":"2121559e-b067-4b25-b691-93e077d09209","block_type":"box","text":"system for equity share registration in Russia and","page_number":97,"box":{"x":458,"y":196,"width":365,"height":12}},{"id":"7f9ba8c8-9945-4fa5-8d53-51dbf39799b2","block_type":"box","text":"registration was carried out either by the issuers them","page_number":97,"box":{"x":117,"y":211,"width":388,"height":12}},{"id":"b81fe1cc-1fd7-46ff-87ab-2318e6c6fca6","block_type":"box","text":"selves or by registrars located throughout Russia.","page_number":97,"box":{"x":507,"y":211,"width":365,"height":12}},{"id":"1463f3eb-e603-4f98-984a-94ef673d3a68","block_type":"box","text":"These registrars may not have been subject to effective state supervision or licensed with any","page_number":97,"box":{"x":116,"y":227,"width":686,"height":12}},{"id":"f6366588-4220-450f-9dbd-677f0e1b6318","block_type":"box","text":"governmental entity. In 2013, Russia established","page_number":97,"box":{"x":116,"y":242,"width":359,"height":12}},{"id":"be92faf6-8465-49f4-92f4-7488b591630d","block_type":"box","text":"the National Settlement Depository (“NSD”) as a","page_number":97,"box":{"x":475,"y":242,"width":356,"height":12}},{"id":"ea8b1b96-a8bf-47da-9bf6-12acbfcba165","block_type":"box","text":"recognized central securities depository, and title to Russian equities held through the NSD is now based","page_number":97,"box":{"x":117,"y":258,"width":766,"height":12}},{"id":"56d65a66-4eb9-43ae-b4c5-5dd86e8c6ec2","block_type":"box","text":"on the records of the NSD and not on the records of","page_number":97,"box":{"x":116,"y":273,"width":382,"height":10}},{"id":"d0e4070f-df43-41ab-9594-29ae9e080192","block_type":"box","text":"the local registrars. Alt","page_number":97,"box":{"x":499,"y":273,"width":162,"height":12}},{"id":"d1964650-85c5-48bd-b98e-52ee3959541e","block_type":"box","text":"hough the implementation of","page_number":97,"box":{"x":662,"y":273,"width":211,"height":12}},{"id":"0bed3969-f8c0-4686-a718-82b3348098a1","block_type":"box","text":"the NSD has enhanced the efficiency and transparency of the Russian securities market, loss still can","page_number":97,"box":{"x":116,"y":289,"width":743,"height":12}},{"id":"6891cc25-fc4e-4e48-bc9f-1dc264f6ab02","block_type":"box","text":"occur. 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A","page_number":97,"box":{"x":532,"y":413,"width":354,"height":9}},{"id":"a58e494b-fa4b-481b-a2f4-0d8ce6c2a562","block_type":"box","text":"Fund also may experience difficulty in obtai","page_number":97,"box":{"x":117,"y":428,"width":312,"height":12}},{"id":"b1a80135-a293-445b-a9dd-064b6ef2939b","block_type":"box","text":"ning and/or enforcing judgments in Russia.","page_number":97,"box":{"x":431,"y":428,"width":316,"height":12}},{"id":"49a03722-771c-4388-b064-531c2bbbdfbd","block_type":"box","text":"In addition, Russia continues to assert its influence in the region through economic and military","page_number":97,"box":{"x":117,"y":459,"width":708,"height":12}},{"id":"94f55a81-c725-47be-b382-9dc9767e0c6e","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":97,"box":{"x":117,"y":475,"width":735,"height":12}},{"id":"8955900b-1e96-4a7e-b32e-68260aae44fd","block_type":"box","text":"launched a large-scale invasion of Ukraine on February 24, 2022. The extent and duration of the","page_number":97,"box":{"x":117,"y":490,"width":720,"height":12}},{"id":"c759a3a2-e918-4bab-9712-cd54cd786f50","block_type":"box","text":"military action, resulting sanctions and resulting future market disruptions, including declines in its","page_number":97,"box":{"x":117,"y":506,"width":727,"height":12}},{"id":"647e2044-61e1-4775-bf42-b0b46baab91d","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":97,"box":{"x":116,"y":521,"width":744,"height":12}},{"id":"31055617-f0b5-41f5-99c4-63f41d2aa24e","block_type":"box","text":"disruptions caused by Russian military action or other actions (including cyberattacks and espionage)","page_number":97,"box":{"x":116,"y":537,"width":757,"height":12}},{"id":"077a0bda-a5a7-4a7f-8692-edbd9ecb4b77","block_type":"box","text":"or resulting actual and threatened responses to such activity, including purchasing and financing","page_number":97,"box":{"x":116,"y":552,"width":720,"height":12}},{"id":"41ccc5e7-c8ba-4dc1-b7e0-f3cfd07e97b2","block_type":"box","text":"restrictions, boycotts or changes in consumer or purchaser preferences, sanctions, tariffs or","page_number":97,"box":{"x":117,"y":568,"width":685,"height":12}},{"id":"59c3be0b-b00c-4443-9566-3a3ac1a717ec","block_type":"box","text":"cyberattacks on the Russian government, Russian companies or Russian individuals, including","page_number":97,"box":{"x":116,"y":583,"width":710,"height":12}},{"id":"6c92980d-e90c-4ae2-87a4-b799a859e2c9","block_type":"box","text":"politicians, may impact Russia’s economy and Russian issuers of securities in which the Fund invests.","page_number":97,"box":{"x":117,"y":599,"width":763,"height":12}},{"id":"0a27b1d6-92a9-4c4c-8b13-631a428f7e09","block_type":"box","text":"Actual and threatened responses to such activity, including purchasing restrictions, sanctions, tariffs or","page_number":97,"box":{"x":116,"y":614,"width":766,"height":12}},{"id":"5bddbd88-b251-487a-a4b8-72cc55c176a6","block_type":"box","text":"cyberattacks on the Russian government or Russian companies, may impact Russia’s economy and","page_number":97,"box":{"x":116,"y":630,"width":750,"height":12}},{"id":"49864b04-284e-4b2e-96e2-529e52beb543","block_type":"box","text":"Russian issuers of securities in which the Fund invests. Actual and threatened responses to such","page_number":97,"box":{"x":117,"y":645,"width":726,"height":12}},{"id":"17a8ec1d-2809-48e8-a283-e2429cfa2118","block_type":"box","text":"military action may also impact the markets for certain Russian commodities, such as oil and natural","page_number":97,"box":{"x":117,"y":661,"width":741,"height":12}},{"id":"54701b76-0471-4349-a243-18e77219ac02","block_type":"box","text":"gas, as well as other sectors of the Russian economy, and may likely have collateral impacts on such","page_number":97,"box":{"x":116,"y":676,"width":752,"height":12}},{"id":"50736a25-998d-416b-9cbf-7702db4f4ef8","block_type":"box","text":"sectors globally.","page_number":97,"box":{"x":116,"y":692,"width":119,"height":12}},{"id":"459f0b67-aded-46bb-b16d-059e6b425d5a","block_type":"box","text":"Governments in the United States and many other countries (collectively, the “Sanctioning Bodies”)","page_number":97,"box":{"x":117,"y":723,"width":735,"height":12}},{"id":"4430d47c-7539-4d9c-84f2-d4cca051ea3d","block_type":"box","text":"have imposed economic sanctions, which can consist of prohibiting certain securities trades, certain","page_number":97,"box":{"x":117,"y":738,"width":739,"height":12}},{"id":"99e18e8b-13e9-4b58-a4d6-7be0e36fb18b","block_type":"box","text":"private transactions in the energy sector, asset freezes and prohibition of all business, against certain","page_number":97,"box":{"x":117,"y":754,"width":751,"height":12}},{"id":"c8ade432-6f14-497f-9cd3-a90a694f242c","block_type":"box","text":"Russian individuals, including politicians, and Russian corporate and banking entities. The Sanctioning","page_number":97,"box":{"x":117,"y":769,"width":760,"height":12}},{"id":"3579980a-9fb3-4405-a6a6-5bbfe607b817","block_type":"box","text":"Bodies, or others, could also institute broader sanctions on Russia, including banning Russia from","page_number":97,"box":{"x":117,"y":785,"width":725,"height":12}},{"id":"aceac244-743d-4810-8766-fd74fd44e57d","block_type":"box","text":"global payments systems that facilitate cross-border payments. These sanctions, or even the threat of","page_number":97,"box":{"x":116,"y":800,"width":758,"height":12}},{"id":"b96b19ed-ca6f-4240-8813-9adb3a74ec82","block_type":"box","text":"further sanctions, may result in the decline of the value and liquidity of Russian securities, a weakening","page_number":97,"box":{"x":116,"y":816,"width":763,"height":12}},{"id":"86b8c0de-7dc5-4551-950c-d059c4aa6ce1","block_type":"box","text":"of the ruble or other adverse consequences to the Russian economy. These sanctions have resulted","page_number":97,"box":{"x":116,"y":831,"width":752,"height":12}},{"id":"01cb9856-7b42-4b34-9fe5-fc55caf8369d","block_type":"box","text":"and may continue to result in the immediate freeze of Russian securities and/or funds invested in","page_number":97,"box":{"x":116,"y":847,"width":725,"height":12}},{"id":"85214a73-4a85-4ffa-8d1e-24fdc099e211","block_type":"box","text":"prohibited assets, impairing the ability of a Fund to buy, sell, receive or deliver those securities and/or","page_number":97,"box":{"x":117,"y":862,"width":757,"height":12}},{"id":"ed478ab9-3793-47ce-b367-aee6961b0668","block_type":"box","text":"II-49","page_number":97,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"32b42999-922d-4950-bbe2-013a3cb56f4e","block_type":"box","text":"NM1026U-6033243-97/221","page_number":97,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f00c423b-cdb1-4c57-9907-4860d294c90b","block_type":"box","text":"assets. Sanctions could also result in Russia taking counter measures or retaliatory actions which may","page_number":98,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"effae94f-6094-42c6-be76-802de9458b2e","block_type":"box","text":"further impair the value and liquidity of Russian securities.","page_number":98,"box":{"x":116,"y":102,"width":435,"height":13}},{"id":"20a46587-2533-4290-a27c-c93f0cb4c5ce","block_type":"box","text":"Risks of Investing in Saudi Arabia.","page_number":98,"box":{"x":116,"y":134,"width":253,"height":12}},{"id":"da756269-fa80-420f-be05-c8db6b0942aa","block_type":"box","text":"The ability of foreign investors (such as a Fund) to invest in Saudi","page_number":98,"box":{"x":371,"y":134,"width":497,"height":12}},{"id":"3f0ea5fb-1fef-459f-8792-6b4d529dc617","block_type":"box","text":"Arabian issuers is new and untested. Such ability could be restricted or revoked by the Saudi Arabian","page_number":98,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"5e35fcf0-b68c-42c6-adf9-241d638b6f0f","block_type":"box","text":"government at any time, and unforeseen risks could materialize due to foreign ownership in such","page_number":98,"box":{"x":116,"y":165,"width":724,"height":12}},{"id":"e008d976-dc11-47b7-83ae-9027aab6ddf0","block_type":"box","text":"securities. In addition, the Capital Market Authority (“CMA”) places investment limitations on the","page_number":98,"box":{"x":116,"y":180,"width":715,"height":12}},{"id":"41da989e-248a-4bd5-8238-974b92749730","block_type":"box","text":"ownership of Saudi Arabian issuers by foreign investors, including a limitation on a Fund’s ownership","page_number":98,"box":{"x":116,"y":196,"width":753,"height":12}},{"id":"4b540fd9-1418-46b7-88e4-831d551d568e","block_type":"box","text":"of any single issuer listed on the Saudi Arabian Stock Exchange, which may prevent a Fund from","page_number":98,"box":{"x":116,"y":211,"width":726,"height":12}},{"id":"03dc05a7-69a7-4e8d-a516-d09f23a15bc1","block_type":"box","text":"investing in accordance with its strategy and contribute to tracking error against the Underlying Index.","page_number":98,"box":{"x":117,"y":227,"width":757,"height":12}},{"id":"2fd1cbe5-30b5-40c4-a916-a62b2a3c5140","block_type":"box","text":"These restrictions may be changed or new restrictions, such as licensing requirements, special","page_number":98,"box":{"x":116,"y":242,"width":710,"height":12}},{"id":"1419dd80-d72e-43a1-b27c-8670d4dbd9fb","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":98,"box":{"x":116,"y":258,"width":756,"height":12}},{"id":"003461d6-218a-49bb-9507-6581dd092cb2","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":98,"box":{"x":116,"y":273,"width":763,"height":12}},{"id":"f0541502-97cf-4831-916a-e39383910ef6","block_type":"box","text":"Major disruptions or regulatory changes could occur in the Saudi Arabian market, any of which could","page_number":98,"box":{"x":117,"y":289,"width":750,"height":12}},{"id":"4b93efdd-5be0-417a-a1d7-a65a1af1f69b","block_type":"box","text":"negatively impact a Fund. These risks may be exacerbated, compared to more developed markets,","page_number":98,"box":{"x":117,"y":304,"width":741,"height":12}},{"id":"bf0417b3-34ac-4215-9be9-01a478f273ae","block_type":"box","text":"given the limited history of foreign investment in the Saudi Arabian market. Investments in Saudi","page_number":98,"box":{"x":116,"y":320,"width":719,"height":12}},{"id":"18df64ac-135b-41d9-a789-3f2167949438","block_type":"box","text":"Arabia may also be subject to loss due to expropriation or nationalization of assets and property or the","page_number":98,"box":{"x":116,"y":335,"width":764,"height":12}},{"id":"4ee46010-4859-49ed-a2f1-fb121404600f","block_type":"box","text":"imposition of restrictions on additional foreign investments and repatriation of capital. Such heightened","page_number":98,"box":{"x":117,"y":351,"width":764,"height":12}},{"id":"9eaceb78-0c3a-4319-8ec3-7a0f4008a61c","block_type":"box","text":"risks may include, among others, restrictions on and government intervention in international trade,","page_number":98,"box":{"x":117,"y":366,"width":739,"height":12}},{"id":"ec8e32a7-65cb-4603-8790-3106e834e0d1","block_type":"box","text":"confiscatory taxation, political instability, including authoritarian and/or military involvement in","page_number":98,"box":{"x":116,"y":382,"width":694,"height":12}},{"id":"d40b59a2-4e45-43dd-8f75-f2096b393eec","block_type":"box","text":"governmental decision making, armed conflict, crime and instability as a result of religious, ethnic and/","page_number":98,"box":{"x":116,"y":397,"width":758,"height":12}},{"id":"413230a6-878f-4eb1-bffe-9511daad9420","block_type":"box","text":"or socioeconomic unrest. Saudi Arabia has privatized, or has begun the process of privatizing, certain","page_number":98,"box":{"x":116,"y":413,"width":759,"height":12}},{"id":"8749d88c-5fbb-4064-98ce-8a529f8f391b","block_type":"box","text":"entities and industries. Newly privatized companies may face strong competition from government","page_number":98,"box":{"x":116,"y":428,"width":733,"height":12}},{"id":"236448f3-be37-4d8b-873f-908f59e51235","block_type":"box","text":"sponsored competitors that have not been privatized. In some instances, investors in newly privatized","page_number":98,"box":{"x":116,"y":444,"width":760,"height":12}},{"id":"29d9aee5-97c1-49c7-90aa-6714633e23a2","block_type":"box","text":"entities have suffered losses due to the inability of the newly privatized entities to adjust quickly to a","page_number":98,"box":{"x":116,"y":459,"width":744,"height":12}},{"id":"b5a5ba02-c6c3-4631-b19a-0f0e7fc3980d","block_type":"box","text":"competitive environment or changing regulatory and legal standards or, in some cases, due to","page_number":98,"box":{"x":116,"y":475,"width":703,"height":12}},{"id":"4a62aa81-a99b-4171-bbba-9061c0cc7450","block_type":"box","text":"re-nationalization of such privatized entities. There is no assurance that similar losses will not recur.","page_number":98,"box":{"x":117,"y":490,"width":743,"height":12}},{"id":"74df173c-f8b1-4057-83d0-1d2e7273bdb4","block_type":"box","text":"Further, under income tax laws imposed by the Department of Zakat and Income Tax, dividends paid","page_number":98,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"5738ebac-5243-49f1-aee3-7446371dcbd5","block_type":"box","text":"by a Saudi Arabian company to foreign stockholders are generally subject to a 5% withholding tax","page_number":98,"box":{"x":117,"y":521,"width":730,"height":12}},{"id":"dfd0ef55-9db4-4651-93b7-83a19f49e4bb","block_type":"box","text":"(different tax rates may apply pursuant to an applicable treaty). Saudi Arabia is highly reliant on income","page_number":98,"box":{"x":117,"y":537,"width":770,"height":12}},{"id":"005e535a-8773-4ec4-9352-f0a903f1b3a8","block_type":"box","text":"from the sale of petroleum and trade with other countries involved in the sale of petroleum, and its","page_number":98,"box":{"x":116,"y":552,"width":732,"height":12}},{"id":"fb904a20-8c35-4cb7-b974-597207e89899","block_type":"box","text":"economy is therefore vulnerable to changes in foreign currency values and the market for petroleum.","page_number":98,"box":{"x":116,"y":568,"width":753,"height":12}},{"id":"fc97cf24-b40d-4664-b11e-dbc0f086068e","block_type":"box","text":"As global demand for petroleum fluctuates, Saudi Arabia may be significantly impacted.","page_number":98,"box":{"x":116,"y":583,"width":655,"height":12}},{"id":"11f944df-1024-4fe0-8356-52fd73d3a440","block_type":"box","text":"Like most Middle Eastern governments, the government of Saudi Arabia exercises substantial","page_number":98,"box":{"x":117,"y":614,"width":701,"height":12}},{"id":"0fce5f28-91ee-4b31-a5ed-28a1a7c9bc05","block_type":"box","text":"influence over many aspects of the private sector. Although liberalization in the wider economy is","page_number":98,"box":{"x":117,"y":630,"width":724,"height":12}},{"id":"151efd23-1f6d-45d6-b249-030745730ce4","block_type":"box","text":"underway, in many areas it has lagged significantly: restrictions on foreign ownership persist, and the","page_number":98,"box":{"x":117,"y":645,"width":755,"height":12}},{"id":"7a5a9570-7ac9-4a76-8201-374be79830cf","block_type":"box","text":"government has an ownership stake in many key industries. The situation is exacerbated by the fact","page_number":98,"box":{"x":116,"y":661,"width":743,"height":12}},{"id":"fdd5931a-4d0e-4713-8c1c-fcd2f1ca52ca","block_type":"box","text":"that Saudi Arabia is governed by an absolute monarchy. Saudi Arabia has historically experienced","page_number":98,"box":{"x":116,"y":676,"width":729,"height":12}},{"id":"a7853bce-a2b7-4605-b5e7-3ed215144bcd","block_type":"box","text":"strained relations with economic partners worldwide, including other countries in the Middle East due to","page_number":98,"box":{"x":116,"y":692,"width":766,"height":12}},{"id":"135f4f95-0241-4dfc-bb9a-1a5003d08bfa","block_type":"box","text":"geopolitical events. Incidents involving a Middle Eastern country’s or the region’s security, including","page_number":98,"box":{"x":116,"y":707,"width":737,"height":12}},{"id":"1d345b16-578e-44fd-99fc-a50cd247409f","block_type":"box","text":"terrorism, may cause uncertainty in their markets and may adversely affect its economy and a Fund’s","page_number":98,"box":{"x":116,"y":723,"width":752,"height":12}},{"id":"12073315-55c0-44da-9c97-9d2c4b9ae282","block_type":"box","text":"investments. Governmental actions in the future could have a significant effect on economic conditions","page_number":98,"box":{"x":117,"y":738,"width":761,"height":12}},{"id":"cad2c0c9-85a6-4030-ac12-488ff4a24711","block_type":"box","text":"in Saudi Arabia, which could affect private sector companies and a Fund, as well as the value of","page_number":98,"box":{"x":117,"y":754,"width":713,"height":12}},{"id":"48ed5ad5-a802-48f8-8a09-78844766eda6","block_type":"box","text":"securities in a Fund’s portfolio. Any economic sanctions on Saudi Arabian individuals or Saudi Arabian","page_number":98,"box":{"x":116,"y":769,"width":759,"height":12}},{"id":"4b4b5a0d-43c7-4da9-9790-57ee66f99888","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":98,"box":{"x":116,"y":785,"width":760,"height":12}},{"id":"03943e33-15c4-4d09-a27f-e920def712f1","block_type":"box","text":"Saudi Arabian securities, a weakening of the Saudi riyal or other adverse consequences to the Saudi","page_number":98,"box":{"x":116,"y":800,"width":749,"height":12}},{"id":"7729f232-1db5-4f58-9f42-98974af39846","block_type":"box","text":"Arabian economy. In addition, Saudi Arabia’s economy relies heavily on cheap, foreign labor, and","page_number":98,"box":{"x":116,"y":816,"width":723,"height":12}},{"id":"5309c6ea-0d57-44ec-9591-401d6539770b","block_type":"box","text":"changes in the availability of this labor supply could have an adverse effect on the economy.","page_number":98,"box":{"x":116,"y":831,"width":690,"height":12}},{"id":"403d9611-1803-42f3-b2d8-0ddc3518146e","block_type":"box","text":"The securities markets in Saudi Arabia may not be as developed as those in other countries. As a","page_number":98,"box":{"x":116,"y":862,"width":730,"height":12}},{"id":"0da435a4-5c76-478e-b295-1ab3add6d4f4","block_type":"box","text":"result, securities markets in Saudi Arabia are subject to greater risks associated with market volatility,","page_number":98,"box":{"x":117,"y":878,"width":757,"height":12}},{"id":"00ab8a8b-934a-4b91-aea9-5b64a0abdc9a","block_type":"box","text":"II-50","page_number":98,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0940e10a-f148-4db5-8afe-24a5a1874261","block_type":"box","text":"NM1026U-6033243-98/221","page_number":98,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"311f0bde-17cb-4ae1-8808-91f48b008ba5","block_type":"box","text":"lower market capitalization, lower trading volume, illiquidity, inflation, greater price fluctuations,","page_number":99,"box":{"x":117,"y":87,"width":705,"height":12}},{"id":"632f1c26-6a54-4b10-b565-e0b6403439bf","block_type":"box","text":"uncertainty regarding the existence of trading markets, governmental control and heavy regulation of","page_number":99,"box":{"x":117,"y":102,"width":751,"height":13}},{"id":"84f85b4b-ac8c-4b60-b71e-2c2c5c83e57b","block_type":"box","text":"labor and industry. Shares of certain Saudi Arabian companies tend to trade less frequently than those","page_number":99,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"5751d226-adc7-41c9-80c1-5f21bf402aed","block_type":"box","text":"of companies on exchanges in more developed markets. Such infrequent trading may adversely affect","page_number":99,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"d73d9ed9-8d2a-4853-a25b-cab3fe16e2af","block_type":"box","text":"the pricing of these securities and a Fund’s ability to sell these securities in the future. Current","page_number":99,"box":{"x":116,"y":149,"width":701,"height":12}},{"id":"9e9f3553-7976-4dc5-8804-19c92792dfaf","block_type":"box","text":"regulations in Saudi Arabian markets may require a Fund to execute trades of securities through a","page_number":99,"box":{"x":117,"y":165,"width":733,"height":12}},{"id":"4f084bd4-8be2-4b57-ae6d-081bc24b1686","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":99,"box":{"x":116,"y":180,"width":767,"height":12}},{"id":"9b2919b7-0690-4696-a22b-c24d4e5a2900","block_type":"box","text":"Fund than is typically the case for investment managers.","page_number":99,"box":{"x":117,"y":196,"width":424,"height":12}},{"id":"6907be3d-ab8c-4fd3-ad42-d93b68d253ea","block_type":"box","text":"Although the political situation in Saudi Arabia is largely stable, Saudi Arabia has historically","page_number":99,"box":{"x":116,"y":227,"width":687,"height":12}},{"id":"4e7e31f2-7dee-4681-9f3c-90cbbfd004b4","block_type":"box","text":"experienced political instability, and there remains the possibility that the stability will not hold in the","page_number":99,"box":{"x":116,"y":242,"width":741,"height":12}},{"id":"7eb545d1-9e3c-4106-a740-515ec4bb2182","block_type":"box","text":"future or that instability in the larger Middle East region could adversely impact the economy of Saudi","page_number":99,"box":{"x":116,"y":258,"width":755,"height":12}},{"id":"7576469b-ee70-49df-b061-59966d4eb614","block_type":"box","text":"Arabia. Instability may be caused by military developments, government interventions in the","page_number":99,"box":{"x":116,"y":273,"width":686,"height":12}},{"id":"67ac805a-01cc-45de-9251-8f91ff67e26a","block_type":"box","text":"marketplace, terrorism, extremist attitudes, attempted social or political reforms, religious differences,","page_number":99,"box":{"x":117,"y":289,"width":755,"height":12}},{"id":"20169da8-6c8c-4b8d-abf8-aa112d23c22f","block_type":"box","text":"or other factors. Additionally, anti-Western views held by certain groups in the Middle East may","page_number":99,"box":{"x":116,"y":304,"width":710,"height":12}},{"id":"595e47a7-5b84-496a-970d-5904849fed50","block_type":"box","text":"influence government policies regarding foreign investment. Further developments in U.S. relations","page_number":99,"box":{"x":117,"y":320,"width":740,"height":12}},{"id":"5c9bab63-ad8c-4d41-9d8b-20fe2e030b89","block_type":"box","text":"with Saudi Arabia and other Middle-Eastern countries may affect these attitudes and policies. The U.S.","page_number":99,"box":{"x":116,"y":335,"width":768,"height":12}},{"id":"25f446eb-6f7c-42d0-89dd-fd14ff4f3add","block_type":"box","text":"is a significant, and in some cases the most significant, trading partner of, or foreign investor in, Saudi","page_number":99,"box":{"x":117,"y":351,"width":760,"height":12}},{"id":"3f6aa2b3-5494-401a-9031-8120c23960e0","block_type":"box","text":"Arabia. As a result, economic conditions of Saudi Arabia may be particularly affected by changes in the","page_number":99,"box":{"x":116,"y":366,"width":771,"height":12}},{"id":"f99c3580-ac0a-41f2-9c39-cc59ec42898b","block_type":"box","text":"U.S. economy. A decrease in U.S. imports or exports, new trade and financial regulations or tariffs,","page_number":99,"box":{"x":117,"y":382,"width":738,"height":12}},{"id":"9148baa0-2138-460a-bb2a-676fb0907489","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":99,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"a84ca3d6-ecbf-43fb-835c-3f0ab01fb36c","block_type":"box","text":"adverse effect on the economic conditions of Saudi Arabia and, as a result, securities to which the","page_number":99,"box":{"x":116,"y":413,"width":733,"height":11}},{"id":"0980a52d-2713-4dc9-a590-3204c9b77d04","block_type":"box","text":"Fund has exposure. Political instability in North Africa and the larger Middle East region has caused","page_number":99,"box":{"x":117,"y":428,"width":743,"height":12}},{"id":"be1c1117-2468-4194-833d-7a0727d3e380","block_type":"box","text":"significant disruptions to many industries. Continued political and social unrest in these areas may","page_number":99,"box":{"x":116,"y":444,"width":732,"height":12}},{"id":"318fd705-f592-429f-85b9-c6fe605a4765","block_type":"box","text":"negatively affect the value of securities in a Fund’s portfolio.","page_number":99,"box":{"x":117,"y":459,"width":449,"height":12}},{"id":"0e4bb56a-7173-4d75-8692-cdf3e6db2789","block_type":"box","text":"Certain issuers located in Saudi Arabia may operate in, or have dealings with, countries subject to","page_number":99,"box":{"x":117,"y":490,"width":731,"height":12}},{"id":"2b78a5a2-a88e-436a-8491-7f509c81e490","block_type":"box","text":"sanctions and/or embargoes imposed by the U.S. Government and the United Nations and/or countries","page_number":99,"box":{"x":116,"y":506,"width":772,"height":12}},{"id":"0dd2dda7-3d05-4565-bb17-6f0461ac5a34","block_type":"box","text":"identified by the U.S. Government as state sponsors of terrorism. As a result, an issuer may sustain","page_number":99,"box":{"x":117,"y":521,"width":744,"height":12}},{"id":"538390a9-565a-4b74-b932-8d676847e136","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":99,"box":{"x":116,"y":537,"width":734,"height":12}},{"id":"176a1f96-18cc-4088-aff7-ae54c2dee510","block_type":"box","text":"countries. A Fund, as an investor in such issuers will be indirectly subject to those risks.","page_number":99,"box":{"x":116,"y":552,"width":655,"height":12}},{"id":"5ee93919-48db-4c89-95cc-09825e98cd64","block_type":"box","text":"Risks of Investing in Venezuela.","page_number":99,"box":{"x":116,"y":583,"width":237,"height":12}},{"id":"ea72e9fd-c306-4869-9b31-8d031d599d11","block_type":"box","text":"Investment in Venezuela may subject a Fund to legal, regulatory,","page_number":99,"box":{"x":354,"y":583,"width":493,"height":12}},{"id":"0c616d2d-3255-4202-8b7b-fba77bd47bc6","block_type":"box","text":"political, currency, security, expropriation and/or nationalization of assets and economic risk specific to","page_number":99,"box":{"x":117,"y":599,"width":764,"height":12}},{"id":"4f118239-ced1-428c-bb7b-e39c47237a4b","block_type":"box","text":"Venezuela. Venezuela is extremely well endowed with natural resources, including oil and natural gas,","page_number":99,"box":{"x":116,"y":614,"width":765,"height":12}},{"id":"786f4f29-f0c7-4622-ba55-8d26b91b662e","block_type":"box","text":"and its economy is heavily dependent on export of natural resources to key trading partners. Any act of","page_number":99,"box":{"x":116,"y":630,"width":770,"height":12}},{"id":"d00fb6f7-47cd-4e04-9f78-c1a1eb4b977a","block_type":"box","text":"terrorism, an armed conflict or a breakdown of a key trading relationship that disrupts the production or","page_number":99,"box":{"x":116,"y":645,"width":767,"height":12}},{"id":"4606f512-c3b9-47db-9bdc-0e0b389cebf7","block_type":"box","text":"export of natural resources will likely negatively affect the Venezuelan economy. The government","page_number":99,"box":{"x":116,"y":661,"width":723,"height":12}},{"id":"7fd0ade7-0c04-43db-88de-e31df6b5733f","block_type":"box","text":"continues to control key sectors of the economy, including upstream oil and gas production, and has","page_number":99,"box":{"x":116,"y":676,"width":744,"height":12}},{"id":"c102da3f-5bd7-4abb-8998-985dc3313548","block_type":"box","text":"sought to increase its role in key sectors, such as telecommunications and steel. Meanwhile,","page_number":99,"box":{"x":116,"y":692,"width":686,"height":12}},{"id":"f2c10e6b-f3cc-428e-a11f-3a2755914ce1","block_type":"box","text":"ambiguities in the investment environment remain, such as continued high levels of bureaucracy and","page_number":99,"box":{"x":116,"y":707,"width":747,"height":12}},{"id":"f16a5624-b5ce-4303-8ad5-7861a40dcd0e","block_type":"box","text":"corruption, large macroeconomic imbalances, and political and policy uncertainty. Friction continues","page_number":99,"box":{"x":116,"y":723,"width":741,"height":12}},{"id":"a16ba443-52a8-4eb6-8f75-0c6dc02b767d","block_type":"box","text":"between the governments of the U.S. and Venezuela. The U.S. has imposed economic sanctions,","page_number":99,"box":{"x":117,"y":738,"width":725,"height":12}},{"id":"1d987a64-81f4-4a79-92da-83a3bb68f289","block_type":"box","text":"which consist of asset freezes and sectoral sanctions, on certain Venezuelan individuals and","page_number":99,"box":{"x":116,"y":754,"width":687,"height":11}},{"id":"7579973d-feaa-4dae-9811-617dec057368","block_type":"box","text":"Venezuelan corporate entities, and on the Venezuelan government. The U.S. could also institute","page_number":99,"box":{"x":116,"y":769,"width":717,"height":12}},{"id":"197abd9c-8e49-4303-b8ff-ab9a7061e307","block_type":"box","text":"broader sanctions on Venezuela. The U.S. has also taken military action against Venezuela in an effort","page_number":99,"box":{"x":117,"y":785,"width":764,"height":12}},{"id":"5bfeb23e-a5ea-4ab2-b043-074e4334b124","block_type":"box","text":"to effect regime change. Military action, sanctions, or even the threat of further military action and","page_number":99,"box":{"x":116,"y":800,"width":721,"height":12}},{"id":"54fd142b-829e-481e-9874-af7dcf945eb9","block_type":"box","text":"sanctions, may result in the decline of the value and liquidity of Venezuelan securities, a weakening of","page_number":99,"box":{"x":116,"y":816,"width":758,"height":12}},{"id":"2b325868-a177-471e-8cc6-df3351668254","block_type":"box","text":"the bolivar or other adverse consequences to the Venezuelan economy. These sanctions impair the","page_number":99,"box":{"x":116,"y":831,"width":746,"height":12}},{"id":"559d90f0-a035-460f-a7b9-6ba04a7e4c08","block_type":"box","text":"ability of a Fund to buy, sell, receive or deliver those securities and/or assets. Additional sanctions","page_number":99,"box":{"x":116,"y":847,"width":732,"height":12}},{"id":"63d791aa-600a-4bff-9c69-b11146f83e0a","block_type":"box","text":"against Venezuela may in the future be imposed by the U.S. or other countries. These factors, among","page_number":99,"box":{"x":116,"y":862,"width":761,"height":12}},{"id":"a0233887-3425-4b0e-90d4-e7fa3f248640","block_type":"box","text":"others, can have a negative impact on a Fund’s investments.","page_number":99,"box":{"x":116,"y":878,"width":457,"height":12}},{"id":"26c6739f-b554-48e1-8c0f-64efd7893817","block_type":"box","text":"II-51","page_number":99,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"406bd5dc-ac66-46a2-96d9-90ae56a04826","block_type":"box","text":"NM1026U-6033243-99/221","page_number":99,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"533b7e9b-aebc-409f-b77d-a593e1912a79","block_type":"box","text":"Brady Bonds.","page_number":100,"box":{"x":116,"y":87,"width":99,"height":12}},{"id":"f82b260c-52ca-4250-bcbb-8ef4f96513ff","block_type":"box","text":"Certain Funds may invest in Brady Bonds. A Fund’s emerging market debt securities","page_number":100,"box":{"x":217,"y":87,"width":639,"height":12}},{"id":"f59ee6d5-68ff-4eab-9d54-b6df783a37a2","block_type":"box","text":"may include emerging market governmental debt obligations commonly referred to as Brady Bonds.","page_number":100,"box":{"x":117,"y":102,"width":745,"height":13}},{"id":"7ecdd4d3-27c9-41e6-b3ca-33f63f737dc9","block_type":"box","text":"Brady Bonds are securities created through the exchange of existing commercial bank loans to","page_number":100,"box":{"x":117,"y":118,"width":709,"height":12}},{"id":"2f9894d5-2178-436e-a8d9-70d9a55b5a18","block_type":"box","text":"sovereign entities for new obligations in connection with debt restructurings under a debt restructuring","page_number":100,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"51f85cb6-0a24-4c41-b048-ac57d9770976","block_type":"box","text":"plan introduced by former U.S. Secretary of the Treasury, Nicholas F. Brady (the “Brady Plan”). Brady","page_number":100,"box":{"x":117,"y":149,"width":760,"height":12}},{"id":"de215235-0665-45f7-b4c3-5e4bb1a76478","block_type":"box","text":"Plan debt restructurings have been implemented in a number of countries, including: Argentina,","page_number":100,"box":{"x":117,"y":165,"width":713,"height":12}},{"id":"112ec4f5-341f-465c-8710-1399d5661ed3","block_type":"box","text":"Bolivia, Brazil, Bulgaria, Costa Rica, the Dominican Republic, Ecuador, Jordan, Mexico, Niger, Nigeria,","page_number":100,"box":{"x":117,"y":180,"width":766,"height":12}},{"id":"c3bd1794-4bfb-4e15-8bae-1a0bce70baeb","block_type":"box","text":"Panama, Peru, the Philippines, Poland, Uruguay, Venezuela, and Vietnam. Beginning in the early","page_number":100,"box":{"x":117,"y":196,"width":728,"height":12}},{"id":"6c5857cb-3d00-454f-a041-2044fafa02ca","block_type":"box","text":"2000s, certain countries began retiring their Brady Bonds, including Brazil, Colombia, Mexico, the","page_number":100,"box":{"x":116,"y":211,"width":727,"height":12}},{"id":"390ca2be-d584-4c4a-bd8c-79474a4d9c29","block_type":"box","text":"Philippines, and Venezuela.","page_number":100,"box":{"x":117,"y":227,"width":211,"height":11}},{"id":"0b991b86-1000-419c-b516-90bc63f7471e","block_type":"box","text":"Brady Bonds may be collateralized or uncollateralized, are issued in various currencies (primarily the","page_number":100,"box":{"x":117,"y":259,"width":752,"height":12}},{"id":"b97cc553-59f7-4319-8626-b9976e46ab54","block_type":"box","text":"U.S. dollar) and are actively traded in the OTC secondary market. Brady Bonds are not considered to","page_number":100,"box":{"x":117,"y":275,"width":756,"height":12}},{"id":"4d5b83cf-5f5f-422e-a25d-587748500e05","block_type":"box","text":"be U.S. Government Securities. U.S. dollar-denominated, collateralized Brady Bonds, which may be","page_number":100,"box":{"x":117,"y":290,"width":747,"height":12}},{"id":"91b86ffe-012c-4d65-86c0-9e8b98eaa2fc","block_type":"box","text":"fixed rate par bonds or floating rate discount bonds, are generally collateralized in full as to principal by","page_number":100,"box":{"x":116,"y":306,"width":768,"height":12}},{"id":"260b8a19-09a7-4b76-9cfd-9ec2679cf001","block_type":"box","text":"U.S. Treasury zero-coupon bonds having the same maturity as the Brady Bonds. Interest payments on","page_number":100,"box":{"x":117,"y":321,"width":767,"height":12}},{"id":"b073c273-7a1a-4178-baf7-503595e6f888","block_type":"box","text":"these Brady Bonds generally are collateralized on a one-year or longer rolling-forward basis by cash or","page_number":100,"box":{"x":116,"y":337,"width":769,"height":12}},{"id":"3945cfd1-1775-49a8-ba61-09a4cca3f04b","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":100,"box":{"x":116,"y":352,"width":738,"height":12}},{"id":"9733ea8f-225a-414e-bd0a-c778dfe7a8bd","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":100,"box":{"x":117,"y":368,"width":769,"height":12}},{"id":"4b80b6d0-736e-4bcb-9c33-5104dcbfd8ad","block_type":"box","text":"based on the applicable interest rate at that time and is adjusted at regular intervals thereafter. Certain","page_number":100,"box":{"x":117,"y":383,"width":764,"height":12}},{"id":"de5d7ed9-70ff-451a-83d3-5d5f8bc7d079","block_type":"box","text":"Brady Bonds are entitled to “value recovery payments” in certain circumstances, which in effect","page_number":100,"box":{"x":117,"y":399,"width":711,"height":12}},{"id":"41482e56-a859-473a-8ba1-14ef9a5638c1","block_type":"box","text":"constitute supplemental interest payments but generally are not collateralized. Brady Bonds are often","page_number":100,"box":{"x":116,"y":414,"width":757,"height":12}},{"id":"14fb572b-3237-4c14-8314-d56894d082c9","block_type":"box","text":"viewed as having three or four valuation components: (i) the collateralized repayment of principal at","page_number":100,"box":{"x":116,"y":430,"width":743,"height":12}},{"id":"a3f4b116-79f1-4bec-92a2-f6e2fbc378b2","block_type":"box","text":"final maturity; (ii) the collateralized interest payments; (iii) the uncollateralized interest payments; and","page_number":100,"box":{"x":116,"y":445,"width":753,"height":12}},{"id":"09ad3515-df37-47e2-bedb-ed8678bc3076","block_type":"box","text":"(iv) any uncollateralized repayment of principal at maturity (the uncollateralized amounts constitute the","page_number":100,"box":{"x":117,"y":461,"width":763,"height":12}},{"id":"fb8c4491-35a6-4884-a2d5-81e924abd307","block_type":"box","text":"“residual risk”).","page_number":100,"box":{"x":116,"y":476,"width":116,"height":12}},{"id":"30c6c87b-7e40-406c-b107-73011213eb9e","block_type":"box","text":"Brady Bonds involve various risk factors described above associated with investing in foreign","page_number":100,"box":{"x":117,"y":509,"width":695,"height":12}},{"id":"f39e6e26-eef5-4cc9-b509-1fa98e93fdf4","block_type":"box","text":"securities, including the history of defaults with respect to commercial bank loans by public and private","page_number":100,"box":{"x":116,"y":524,"width":765,"height":13}},{"id":"f1e2654b-bc90-483c-8116-4aa1a8710dfd","block_type":"box","text":"entities of countries issuing Brady Bonds. In light of the residual risk of Brady Bonds and, among other","page_number":100,"box":{"x":116,"y":540,"width":764,"height":12}},{"id":"7f56dfe7-7cbd-4ca2-bd09-1040be1bc1d4","block_type":"box","text":"factors, the history of defaults, investments in Brady Bonds are considered speculative. There can be","page_number":100,"box":{"x":116,"y":555,"width":756,"height":13}},{"id":"3bfef52f-d482-4aca-bffa-9b2c103da8de","block_type":"box","text":"no assurance that Brady Bonds in which the Funds may invest will not be subject to restructuring","page_number":100,"box":{"x":117,"y":571,"width":723,"height":12}},{"id":"d68f2a0e-aecc-4d0a-8020-3ef31d632511","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":100,"box":{"x":116,"y":586,"width":752,"height":13}},{"id":"e4702ef6-9b59-4e87-b136-22186816367c","block_type":"box","text":"principal on any of its holdings.","page_number":100,"box":{"x":117,"y":602,"width":234,"height":12}},{"id":"1e438a1d-7d9b-496e-a949-8a645473de9d","block_type":"box","text":"China Investments Risk.","page_number":100,"box":{"x":117,"y":635,"width":185,"height":9}},{"id":"83c7a67d-f629-424e-9cdf-a370683f2c33","block_type":"box","text":"Investments in securities of companies domiciled in the People’s Republic of China (“China” or the","page_number":100,"box":{"x":117,"y":659,"width":734,"height":12}},{"id":"3007a271-f8ec-43a1-9580-fb854bf673fe","block_type":"box","text":"“PRC”), including certain Hong Kong-listed and U.S.-listed securities, involve a high degree of risk and","page_number":100,"box":{"x":116,"y":674,"width":758,"height":12}},{"id":"66fe8241-3d43-496c-a676-6ea714b0814c","block_type":"box","text":"special considerations not typically associated with investing in the U.S. securities markets. Such","page_number":100,"box":{"x":116,"y":690,"width":719,"height":12}},{"id":"6f2245ce-935f-45df-bc51-8bb464263276","block_type":"box","text":"heightened risks include, among others, an authoritarian government, popular unrest associated with","page_number":100,"box":{"x":117,"y":705,"width":747,"height":12}},{"id":"f9f94a14-f820-4718-af3b-6c3b0efc7f40","block_type":"box","text":"demands for improved political, economic and social conditions, the impact of regional conflict on the","page_number":100,"box":{"x":116,"y":721,"width":748,"height":12}},{"id":"a8f94117-8570-4ba5-81ad-f9020b6748f4","block_type":"box","text":"economy and hostile relations with other countries.","page_number":100,"box":{"x":116,"y":736,"width":376,"height":12}},{"id":"23096fb6-3bc8-435a-98ac-ec20d603f6e0","block_type":"box","text":"Military conflicts, either in response to internal social unrest or conflicts with other countries, could","page_number":100,"box":{"x":117,"y":769,"width":723,"height":12}},{"id":"08e23c36-11cb-4b3f-ab0c-5d3bf09a767f","block_type":"box","text":"disrupt economic development. The Chinese economy is vulnerable to the long-running disagreements","page_number":100,"box":{"x":116,"y":784,"width":764,"height":13}},{"id":"522d6fe9-d156-4c7d-9686-0c360dc9b15c","block_type":"box","text":"and religious and nationalist disputes with Tibet and the Xinjiang region. Since 1997, there have been","page_number":100,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"94c1bf7b-78e4-487e-a72e-03fa1b64de60","block_type":"box","text":"tensions between the Chinese government and many people in Hong Kong who perceive China as","page_number":100,"box":{"x":116,"y":815,"width":733,"height":13}},{"id":"a0ede4b5-1e8c-40aa-b8b4-ccd5d9bdb1f7","block_type":"box","text":"tightening control over Hong Kong’s semi-autonomous liberal political, economic, legal, and social","page_number":100,"box":{"x":116,"y":831,"width":731,"height":12}},{"id":"6d7e1c2a-5902-4181-b9da-fe657fd5cc9b","block_type":"box","text":"framework. Protests and unrest have increased tensions even further. 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Any escalation of hostility between China and Taiwan would likely have a","page_number":101,"box":{"x":117,"y":149,"width":759,"height":12}},{"id":"b768f356-b8ec-4dc1-add3-9ae66dbffd1a","block_type":"box","text":"significant adverse impact on the value of the Fund’s investments in both countries and the region. In","page_number":101,"box":{"x":116,"y":165,"width":755,"height":12}},{"id":"831c53f8-6381-4e23-9803-cd9ac2e9ec3f","block_type":"box","text":"addition, China has strained international relations with Japan, India, the Philippines and other","page_number":101,"box":{"x":116,"y":180,"width":703,"height":12}},{"id":"b47b2e54-9c82-439b-a909-a83f1de9f019","block_type":"box","text":"neighbors due to territorial disputes, historical animosities and other defense concerns. Frictions","page_number":101,"box":{"x":117,"y":196,"width":717,"height":12}},{"id":"16c055ce-3369-4bd4-8107-04fed988d035","block_type":"box","text":"between China and the Philippines in the South China Sea pose a risk of escalation potentially leading","page_number":101,"box":{"x":117,"y":211,"width":765,"height":12}},{"id":"e18391b0-8ee7-4e24-bedc-23f7146120dc","block_type":"box","text":"to military conflict. Additionally, China is alleged to have participated in state-sponsored cyberattacks","page_number":101,"box":{"x":116,"y":227,"width":752,"height":12}},{"id":"dcf66241-33d6-4b70-8b1c-3b8cff38f44d","block_type":"box","text":"against foreign companies and foreign governments. Actual and threatened responses to such activity","page_number":101,"box":{"x":116,"y":242,"width":763,"height":12}},{"id":"2e32a4a9-7597-4705-b208-ed6ce0787ebb","block_type":"box","text":"and strained international relations, including purchasing restrictions, sanctions, tariffs or cyberattacks","page_number":101,"box":{"x":116,"y":258,"width":760,"height":12}},{"id":"238c8e31-7980-430b-bf1f-0f432af56b4f","block_type":"box","text":"on the Chinese government or Chinese companies, may impact China’s economy and Chinese issuers","page_number":101,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"3ce79dd0-6395-487c-b6d1-8a52d541fa56","block_type":"box","text":"of securities in which a Fund invests. China could be affected by military events on the Korean","page_number":101,"box":{"x":116,"y":289,"width":705,"height":12}},{"id":"501bb043-3b01-4f22-9b35-b91731ff3039","block_type":"box","text":"peninsula or internal instability within North Korea. These situations may cause uncertainty in the","page_number":101,"box":{"x":117,"y":304,"width":723,"height":12}},{"id":"7034b689-2b0d-447e-855d-8d3acd32275b","block_type":"box","text":"Chinese market and may adversely affect the performance of the Chinese economy.","page_number":101,"box":{"x":117,"y":320,"width":631,"height":12}},{"id":"cbedc26b-002d-4018-978e-6c0392bd182e","block_type":"box","text":"The Chinese government has implemented economic reforms in order to liberalize trade policy,","page_number":101,"box":{"x":116,"y":347,"width":712,"height":13}},{"id":"5f9c42bd-6cbc-4189-9b08-ac6316a27334","block_type":"box","text":"promote foreign investment in the economy, reduce government control of the economy and develop","page_number":101,"box":{"x":117,"y":363,"width":752,"height":12}},{"id":"d343da59-1ae0-486f-a274-77f6d5766989","block_type":"box","text":"market mechanisms. However, the Chinese government still exercises substantial influence over many","page_number":101,"box":{"x":117,"y":378,"width":768,"height":13}},{"id":"bb530f36-77db-401c-98b3-db90045902c8","block_type":"box","text":"aspects of the private sector and may own or control many companies. Chinese companies, such as","page_number":101,"box":{"x":116,"y":394,"width":751,"height":12}},{"id":"9d16c412-b9d7-4783-ab03-beee08db30c8","block_type":"box","text":"those in the financial services or technology sectors, and potentially other sectors in the future, are","page_number":101,"box":{"x":116,"y":409,"width":736,"height":13}},{"id":"6eb79993-116d-444a-8754-3b88e5be8359","block_type":"box","text":"subject to the risk that Chinese authorities can intervene in their operations and structure. The Chinese","page_number":101,"box":{"x":116,"y":425,"width":769,"height":12}},{"id":"4071480d-0fdf-4e90-a7ca-5cf78b0ebfb2","block_type":"box","text":"government continues to maintain a major role in economic policymaking and investing in China","page_number":101,"box":{"x":116,"y":440,"width":717,"height":13}},{"id":"1e278564-9063-4b0a-89d7-923ae2a60848","block_type":"box","text":"involves risk of loss due to expropriation, nationalization, confiscation of assets and property or the","page_number":101,"box":{"x":117,"y":456,"width":736,"height":12}},{"id":"fc879f0a-0ca7-4d8b-b661-77c1600db92c","block_type":"box","text":"imposition of restrictions on foreign investments and on repatriation of capital invested.","page_number":101,"box":{"x":117,"y":471,"width":647,"height":13}},{"id":"6de98677-5ba7-48bd-ac20-7fb81edcf84e","block_type":"box","text":"The Chinese government may intervene in the Chinese financial markets, such as by the imposition of","page_number":101,"box":{"x":116,"y":499,"width":764,"height":13}},{"id":"87c3811e-0942-4b7c-94d3-82540f458c54","block_type":"box","text":"trading restrictions, a ban on “naked” short selling or the suspension of short selling for certain stocks.","page_number":101,"box":{"x":116,"y":515,"width":761,"height":12}},{"id":"858cf9de-162d-4e58-8393-13b369cdcfbd","block_type":"box","text":"This may affect market price and liquidity of these stocks, and may have an unpredictable impact on","page_number":101,"box":{"x":116,"y":530,"width":748,"height":13}},{"id":"0dbe38a4-3799-4bf7-b1e4-3dd5905016a2","block_type":"box","text":"the investment activities of the Funds. Furthermore, such market interventions may have a negative","page_number":101,"box":{"x":116,"y":546,"width":745,"height":12}},{"id":"33530a70-6d72-462b-8498-d376634a6f0e","block_type":"box","text":"impact on market sentiment which may in turn affect the performance of the securities markets and as","page_number":101,"box":{"x":117,"y":561,"width":762,"height":13}},{"id":"b2b76f30-b64c-4cdf-85ff-701eafc0ec24","block_type":"box","text":"a result the performance of the Funds.","page_number":101,"box":{"x":116,"y":577,"width":290,"height":12}},{"id":"78ef2c0f-0020-41ef-aece-2267f13d11a8","block_type":"box","text":"In addition, there is less regulation and monitoring of Chinese securities markets and the activities of","page_number":101,"box":{"x":117,"y":605,"width":749,"height":12}},{"id":"14160ebc-c877-44f2-bceb-e92f77f1b320","block_type":"box","text":"investors, brokers and other participants than in the United States. Accordingly, issuers of securities in","page_number":101,"box":{"x":117,"y":620,"width":763,"height":12}},{"id":"47fa9255-9887-4dca-a9f2-c84956a9ec74","block_type":"box","text":"China, including Chinese companies that are listed on U.S. exchanges, are not subject to the same","page_number":101,"box":{"x":117,"y":636,"width":741,"height":12}},{"id":"fd3198cc-20ab-41dd-a480-7e1c89d64d87","block_type":"box","text":"degree of regulation as are U.S. issuers with respect to such matters as insider trading rules, tender","page_number":101,"box":{"x":116,"y":651,"width":747,"height":12}},{"id":"16c1e96e-ba3f-4c16-8c40-6c7e082c199a","block_type":"box","text":"offer regulation, accounting standards or auditor oversight, stockholder proxy requirements and the","page_number":101,"box":{"x":116,"y":667,"width":735,"height":12}},{"id":"b3f51449-3331-4b09-803e-04bd77263408","block_type":"box","text":"requirements mandating timely and accurate disclosure of information. 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In","page_number":101,"box":{"x":116,"y":744,"width":743,"height":12}},{"id":"f9ca3a51-4e6d-4427-b1fc-0b0de744020b","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":101,"box":{"x":117,"y":760,"width":759,"height":12}},{"id":"19a21212-0c14-4685-841e-ed3beeee174b","block_type":"box","text":"behalf of the Fund by a subcustodian.","page_number":101,"box":{"x":117,"y":775,"width":278,"height":12}},{"id":"0fc83576-e0d4-49a5-b1b9-8dfa842d9e11","block_type":"box","text":"There may be significant obstacles to obtaining information necessary for investigations into or","page_number":101,"box":{"x":116,"y":803,"width":702,"height":12}},{"id":"1ceb3a85-8dab-48d9-833c-2481ead9e671","block_type":"box","text":"litigation against Chinese companies, and shareholders may have limited legal remedies. The Funds","page_number":101,"box":{"x":117,"y":819,"width":745,"height":12}},{"id":"84e1811c-fd70-4708-a146-058fba2e1c19","block_type":"box","text":"do not select investments based on investor protection considerations.","page_number":101,"box":{"x":116,"y":834,"width":528,"height":12}},{"id":"0ef14841-a60b-42af-83bd-bfa3970ab350","block_type":"box","text":"The Chinese government historically took positions that prevented the U.S. Public Company","page_number":101,"box":{"x":116,"y":862,"width":689,"height":12}},{"id":"1e9d3925-a095-49a1-b429-3390a4b1bf46","block_type":"box","text":"Accounting Oversight Board (“PCAOB”) from inspecting the audit work and practices of accounting","page_number":101,"box":{"x":116,"y":878,"width":738,"height":12}},{"id":"b72def84-a021-4bbd-97e1-4bbb35f3629a","block_type":"box","text":"II-53","page_number":101,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6865cf4b-aa7b-4775-a35c-25b214d942c7","block_type":"box","text":"NM1026U-6033243-101/221","page_number":101,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"6128bba1-270a-458b-bfb4-687b0bb66d4b","block_type":"box","text":"firms in mainland China and Hong Kong for compliance with U.S. law and professional standards. On","page_number":102,"box":{"x":116,"y":87,"width":756,"height":12}},{"id":"5c4cf262-3d65-4d12-96c7-d6d7407f50af","block_type":"box","text":"August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory","page_number":102,"box":{"x":116,"y":102,"width":734,"height":13}},{"id":"9c558a5b-2fc2-4a79-b7cb-001cb98bda6c","block_type":"box","text":"Commission and the Ministry of Finance of the PRC, which marked the first step toward opening","page_number":102,"box":{"x":117,"y":118,"width":719,"height":12}},{"id":"2872952e-98b4-40d5-9538-1d60aefbfc00","block_type":"box","text":"access for the PCAOB to inspect and investigate registered public accounting firms headquartered in","page_number":102,"box":{"x":116,"y":134,"width":755,"height":12}},{"id":"21c45a15-8924-4526-8caf-5fb916e97d38","block_type":"box","text":"mainland China and Hong Kong completely in accordance with U.S. law. However, as this","page_number":102,"box":{"x":117,"y":149,"width":672,"height":12}},{"id":"eea746ec-88d5-40f7-b742-e9659f1a6a1a","block_type":"box","text":"development is relatively recent, the implementation of the Statement of Protocol remains to be tested.","page_number":102,"box":{"x":116,"y":165,"width":767,"height":12}},{"id":"4c50a2b6-22a6-471b-855a-665eacd52735","block_type":"box","text":"Audits performed by PCAOB-registered accounting firms in mainland China and Hong Kong may be","page_number":102,"box":{"x":116,"y":180,"width":747,"height":12}},{"id":"a0fa2d96-d50d-42f9-8689-f02b4b1739bf","block_type":"box","text":"less reliable than those performed by firms subject to PCAOB inspection. Accordingly, information","page_number":102,"box":{"x":117,"y":196,"width":730,"height":12}},{"id":"483e5080-ce3d-4421-a619-865e8f5ff2dd","block_type":"box","text":"about the Chinese securities in which the Funds invest may be less reliable or complete. Under","page_number":102,"box":{"x":116,"y":211,"width":712,"height":12}},{"id":"b89bfefd-d63d-4ad6-a4d6-cad317ceec7c","block_type":"box","text":"amendments to the Sarbanes-Oxley Act enacted in December 2020, which requires that the PCAOB","page_number":102,"box":{"x":116,"y":227,"width":752,"height":12}},{"id":"a40e3cc4-24f3-476b-aa43-5687fcb066d1","block_type":"box","text":"be permitted to inspect the accounting firm of a U.S.-listed Chinese issuer, Chinese companies with","page_number":102,"box":{"x":117,"y":242,"width":743,"height":12}},{"id":"789e6303-fe2e-47a6-9135-02d6bfe2a821","block_type":"box","text":"securities listed on U.S. exchanges may be delisted if the PCAOB is unable to inspect the","page_number":102,"box":{"x":116,"y":258,"width":670,"height":12}},{"id":"c0edba09-b037-4f16-809b-0a47999b60d4","block_type":"box","text":"accounting firm.","page_number":102,"box":{"x":116,"y":273,"width":123,"height":12}},{"id":"fee900f1-0c84-4fa7-abe6-bab376d02e09","block_type":"box","text":"The Renminbi (“RMB”) is currently not a freely convertible currency and is subject to foreign exchange","page_number":102,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"a9f98f21-1bc9-4911-bb18-c844838cdbec","block_type":"box","text":"control policies and repatriation restrictions imposed by the Chinese government. The imposition of","page_number":102,"box":{"x":116,"y":320,"width":740,"height":12}},{"id":"4ffa51f2-1e47-48b3-83c6-dddfc1a433b7","block_type":"box","text":"currency controls may negatively impact performance and liquidity of the Funds as capital may become","page_number":102,"box":{"x":116,"y":335,"width":772,"height":12}},{"id":"acc321c8-b801-4103-8386-2028f758f329","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":102,"box":{"x":116,"y":351,"width":732,"height":12}},{"id":"3e2946e2-3b12-4d74-8658-133a7cbd7ea9","block_type":"box","text":"required governmental approval for repatriation of capital, as well as by the application to the Funds of","page_number":102,"box":{"x":117,"y":366,"width":762,"height":12}},{"id":"d4ae6410-7ca5-43f8-b2f3-0ba433856c86","block_type":"box","text":"any restrictions on investments. Investing in entities either in, or which have a substantial portion of","page_number":102,"box":{"x":116,"y":382,"width":740,"height":12}},{"id":"7be1d0d5-3c06-4bcb-8d8e-c96aee7a8409","block_type":"box","text":"their operations in, the PRC may require the Funds to adopt special procedures, seek local","page_number":102,"box":{"x":116,"y":397,"width":680,"height":12}},{"id":"9a375e13-07d0-40c7-a962-88ade713e434","block_type":"box","text":"government approvals or take other actions, each of which may involve additional costs and delays to","page_number":102,"box":{"x":116,"y":413,"width":759,"height":12}},{"id":"cebe16d0-4288-41ba-af8a-9d3d467fcb65","block_type":"box","text":"the Funds. The Fund may also incur costs in connection with conversions between U.S. dollars and","page_number":102,"box":{"x":116,"y":428,"width":743,"height":12}},{"id":"b96a1942-5c17-463b-a0eb-b9312986af93","block_type":"box","text":"RMB, as well as in connection with conversions between the two separate types of RMB, the onshore","page_number":102,"box":{"x":117,"y":444,"width":758,"height":12}},{"id":"dccb965b-e1c4-42f1-86de-3a0a018d179f","block_type":"box","text":"RMB (“CNY”) and the offshore RMB (“CNH”).","page_number":102,"box":{"x":117,"y":459,"width":340,"height":12}},{"id":"c73dae76-2cdb-4244-8fed-bb734cef3059","block_type":"box","text":"Many Chinese companies listed on U.S. exchanges use variable interest entities or “VIEs” in their","page_number":102,"box":{"x":117,"y":490,"width":727,"height":12}},{"id":"667b10dc-b1a1-400d-8899-9f5350028192","block_type":"box","text":"structure as a result of foreign ownership restrictions. In a VIE structure, a Chinese operating company","page_number":102,"box":{"x":116,"y":506,"width":767,"height":12}},{"id":"b093db4d-1e2a-407e-ab4a-d1ad7b2de3c1","block_type":"box","text":"establishes a shell company in another jurisdiction to issue stock to public shareholders. When a VIE","page_number":102,"box":{"x":116,"y":521,"width":754,"height":12}},{"id":"84a438d2-9ce8-4841-b151-011eafb44e68","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":102,"box":{"x":116,"y":537,"width":715,"height":12}},{"id":"b1d0885a-aa4d-4494-ae7f-fbe2f0f18db0","block_type":"box","text":"securities of the Chinese company, the U.S.-listed shell company directly or indirectly enters into","page_number":102,"box":{"x":116,"y":552,"width":721,"height":12}},{"id":"0a93564f-398b-4b91-9578-c1624576bce4","block_type":"box","text":"contracts with the Chinese operating company under Chinese law. These contracts provide the U.S.-","page_number":102,"box":{"x":116,"y":568,"width":749,"height":12}},{"id":"4944db6d-b176-4700-9a57-4383c2cf388c","block_type":"box","text":"listed shell company with only economic exposure to the Chinese company and do not represent","page_number":102,"box":{"x":117,"y":583,"width":722,"height":12}},{"id":"b97152e5-e00f-4d89-9797-a40b74452eed","block_type":"box","text":"equity ownership in the operating company.","page_number":102,"box":{"x":116,"y":599,"width":329,"height":12}},{"id":"132229e6-e99d-4d4b-bbb7-4b8bc389bb85","block_type":"box","text":"While VIEs are a longstanding practice that is well known to Chinese officials and regulators, they have","page_number":102,"box":{"x":116,"y":630,"width":770,"height":12}},{"id":"d88c8b98-b8d2-4d09-bd89-cec61da999a2","block_type":"box","text":"not been formally recognized under Chinese law. The Chinese government has provided guidance to","page_number":102,"box":{"x":117,"y":645,"width":754,"height":12}},{"id":"4b95ac4e-8fde-455b-8c60-0a75f0bf0795","block_type":"box","text":"and placed restrictions on Chinese-based companies raising capital offshore, including through VIEs.","page_number":102,"box":{"x":116,"y":661,"width":749,"height":12}},{"id":"a217482a-cbb0-40cd-959a-4a63a5133107","block_type":"box","text":"In 2023, the China Securities Regulatory Commission (“CSRC”) released new rules that permit the use","page_number":102,"box":{"x":117,"y":676,"width":762,"height":12}},{"id":"cfae373c-d4e2-4b77-bfa5-88e499f261c8","block_type":"box","text":"of VIE structures, provided they abide by Chinese laws and register with the CSRC. The rules,","page_number":102,"box":{"x":116,"y":692,"width":699,"height":12}},{"id":"f2515160-e65c-4643-9d90-8b59952af9c8","block_type":"box","text":"however, may cause Chinese companies to undergo greater scrutiny and add costs to VIE structures.","page_number":102,"box":{"x":117,"y":707,"width":753,"height":12}},{"id":"8fda8a37-ae44-4e85-9f74-8ef0aa769641","block_type":"box","text":"Intervention, rulemaking or guidance by the Chinese government with respect to VIE structures or the","page_number":102,"box":{"x":117,"y":723,"width":753,"height":12}},{"id":"5b93e0cd-6560-492c-a46d-6b8382da2a08","block_type":"box","text":"non-enforcement of VIE-related contractual rights could significantly affect the operating company’s","page_number":102,"box":{"x":117,"y":738,"width":736,"height":12}},{"id":"bc73f075-d68e-4b96-9cb9-0973365254b1","block_type":"box","text":"business in China, the enforceability of the U.S.-listed shell company’s contractual arrangements with","page_number":102,"box":{"x":117,"y":754,"width":751,"height":12}},{"id":"0710baa9-6a3e-47cb-9ec2-82e8e14ace79","block_type":"box","text":"the Chinese company and the value of the U.S.-listed stock. Further, the VIE contractual arrangement","page_number":102,"box":{"x":116,"y":769,"width":757,"height":12}},{"id":"ec289714-c483-4315-be36-568f93a98c36","block_type":"box","text":"would likely be subject to Chinese law and jurisdiction, and remedies available to the U.S.-listed shell","page_number":102,"box":{"x":116,"y":785,"width":748,"height":12}},{"id":"a6ab47c2-b33c-4b86-9651-7f682e9d6346","block_type":"box","text":"company are uncertain and could be ineffective. In addition to the risk of government intervention,","page_number":102,"box":{"x":116,"y":800,"width":724,"height":12}},{"id":"61ad37d4-9667-4b5f-8677-85a50bd992eb","block_type":"box","text":"investments through a VIE structure are subject to the risk that the China-based company (or its","page_number":102,"box":{"x":117,"y":816,"width":711,"height":12}},{"id":"9e5db3f4-4a46-4f83-9166-deaaa0d76b3d","block_type":"box","text":"officers, directors, or Chinese equity owners) may breach those contractual arrangements, or Chinese","page_number":102,"box":{"x":116,"y":831,"width":763,"height":12}},{"id":"53df62bd-2a32-41f8-af1f-cfa73b3093c7","block_type":"box","text":"law changes in a way that adversely affects the enforceability of these arrangements, or those","page_number":102,"box":{"x":117,"y":847,"width":703,"height":12}},{"id":"7010eb65-c02a-4c18-aaa8-4e395ea5fc46","block_type":"box","text":"contracts are otherwise not enforceable under Chinese law, in which case the Fund may suffer","page_number":102,"box":{"x":116,"y":862,"width":708,"height":12}},{"id":"5f0d9a0b-24e2-4865-97cc-1851207af4ae","block_type":"box","text":"significant losses on its investments through a VIE structure with little or no recourse available. Any","page_number":102,"box":{"x":116,"y":878,"width":741,"height":12}},{"id":"81f9d2e0-d730-4d59-b313-ff5fc5091bb8","block_type":"box","text":"II-54","page_number":102,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ba5509d6-2fec-479d-ae04-c792446011d9","block_type":"box","text":"NM1026U-6033243-102/221","page_number":102,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"747fe61c-d60c-4f21-b94d-341648bfe6a9","block_type":"box","text":"change in the operations of entities in a VIE structure, the status of VIE contractual arrangements or","page_number":103,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"b5816d9d-fdd9-42e8-9a6f-9e84448c9b04","block_type":"box","text":"the legal or regulatory environment in China, generally or with respect to specific industries, could","page_number":103,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"be70fea5-9dc9-4e0f-ade7-db88fd8831f4","block_type":"box","text":"result in significant, and possibly permanent and/or total, losses to a Fund.","page_number":103,"box":{"x":117,"y":118,"width":556,"height":12}},{"id":"bd66bb90-b8b6-48e4-bb35-65b2c2c1a9a4","block_type":"box","text":"While the Chinese economy has experienced past periods of rapid growth, there is no assurance that","page_number":103,"box":{"x":116,"y":151,"width":758,"height":12}},{"id":"5e9cf0ba-f25c-4014-88d7-c3f0e6aa1293","block_type":"box","text":"such growth rates will recur. Other economic challenges for China include indebtedness, weak","page_number":103,"box":{"x":116,"y":166,"width":706,"height":12}},{"id":"fead7398-c90c-46da-af69-14c84c16c70b","block_type":"box","text":"consumer demand, trade tensions, and an aging population. China continues to face pressure from its","page_number":103,"box":{"x":116,"y":182,"width":763,"height":12}},{"id":"35eaace6-3520-4c7b-ae81-8e87b2dc5cf4","block_type":"box","text":"trading partners over its exporting of its excess industrial capacity and overall approach to economic","page_number":103,"box":{"x":116,"y":197,"width":748,"height":12}},{"id":"a2bb8878-5181-4304-becb-ef4bbde6a44a","block_type":"box","text":"management. China’s economy is heavily dependent on export growth. Reduction in spending on","page_number":103,"box":{"x":117,"y":213,"width":727,"height":12}},{"id":"305fabe2-9f5c-4fa2-a7a5-6a776b7fa2aa","block_type":"box","text":"Chinese products and services, supply chain diversification, institution of additional tariffs, sanctions or","page_number":103,"box":{"x":117,"y":228,"width":765,"height":12}},{"id":"dce44cc1-9753-4bf1-bb6a-c4f000d93bdf","block_type":"box","text":"other trade barriers (including as a result of heightened trade tensions between China and the United","page_number":103,"box":{"x":116,"y":244,"width":755,"height":12}},{"id":"a95ea2e3-74c6-411f-8320-82e8ba164b82","block_type":"box","text":"States or in response to actual or alleged Chinese cyber activity) or a downturn in any of the","page_number":103,"box":{"x":116,"y":259,"width":688,"height":12}},{"id":"30ee14c1-8c1d-48d8-b8b2-7c8eff80f26f","block_type":"box","text":"economies of China’s key trading partners may have an adverse impact on the Chinese economy and","page_number":103,"box":{"x":116,"y":275,"width":762,"height":12}},{"id":"c669a8f9-afe8-4924-a023-e00e671d9071","block_type":"box","text":"the companies in which a Fund invests. Certain Chinese companies (which may change from time to","page_number":103,"box":{"x":116,"y":290,"width":753,"height":12}},{"id":"fd230d97-d8c0-4b99-a07a-e5ad085866fc","block_type":"box","text":"time) are directly or indirectly subject to economic or trade restrictions imposed by the U.S. or other","page_number":103,"box":{"x":116,"y":306,"width":741,"height":12}},{"id":"317ad3b0-011a-45f1-8798-11dee17856e1","block_type":"box","text":"governments due to national security, human rights or other concerns of such government. For","page_number":103,"box":{"x":116,"y":321,"width":709,"height":12}},{"id":"df9742a4-31c5-4fe3-9037-5ac862f83c18","block_type":"box","text":"example, certain foreign technology companies are subject to U.S. export controls as those companies","page_number":103,"box":{"x":116,"y":337,"width":769,"height":12}},{"id":"5feb7625-4734-41a5-99d0-6a7cf8fd1c11","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":103,"box":{"x":116,"y":352,"width":755,"height":12}},{"id":"156c9342-5d5c-4101-b507-9b30ee25ae04","block_type":"box","text":"regions of China or by certain Chinese companies due to concerns about forced labor. Such","page_number":103,"box":{"x":117,"y":368,"width":688,"height":12}},{"id":"1f4b16fd-46e7-489c-a94d-ba1febb8c689","block_type":"box","text":"restrictions may have unanticipated and adverse effects on the Chinese economy and companies. Any","page_number":103,"box":{"x":117,"y":383,"width":767,"height":12}},{"id":"ff6ca0db-7b62-4dc3-ad03-cd7aa6bd0f72","block_type":"box","text":"action that targets Chinese financial markets or securities exchanges could interfere with orderly","page_number":103,"box":{"x":116,"y":399,"width":719,"height":12}},{"id":"2b0fac3b-b6d3-47cc-b669-ba7d614f9c7c","block_type":"box","text":"trading, delay settlement or cause market disruptions. Certain companies may be subject to economic","page_number":103,"box":{"x":116,"y":414,"width":762,"height":12}},{"id":"19130200-5483-426d-b777-0a27b968fe4f","block_type":"box","text":"or trade restrictions (but not investment restrictions) imposed by the U.S. or other governments due to","page_number":103,"box":{"x":116,"y":430,"width":761,"height":12}},{"id":"db3891c6-af6c-49ec-931b-29981cd34dba","block_type":"box","text":"national security, human rights or other concerns of such government. So long as these restrictions do","page_number":103,"box":{"x":117,"y":445,"width":764,"height":12}},{"id":"17ffa464-e8c0-45ec-9f09-91314bbe0391","block_type":"box","text":"not include restrictions on investments, the Fund may invest in such companies.","page_number":103,"box":{"x":117,"y":461,"width":599,"height":12}},{"id":"da5cee30-5bdd-4921-954c-6a70c6677c08","block_type":"box","text":"The tax laws and regulations in the PRC are subject to change, including the issuance of authoritative","page_number":103,"box":{"x":116,"y":493,"width":760,"height":13}},{"id":"8f54a6bc-6278-406d-91a2-f89dd1eb4b8c","block_type":"box","text":"guidance or enforcement, possibly with retroactive effect. The interpretation, applicability and","page_number":103,"box":{"x":116,"y":509,"width":695,"height":12}},{"id":"32368af5-f302-4d2d-81f8-81b426f7d1e2","block_type":"box","text":"enforcement of such laws by PRC tax authorities are not as consistent and transparent as those of","page_number":103,"box":{"x":116,"y":524,"width":737,"height":13}},{"id":"8709c1ac-91a7-449a-8e88-05266da1b233","block_type":"box","text":"more developed nations, and may vary over time and from region to region. The application and","page_number":103,"box":{"x":117,"y":540,"width":716,"height":12}},{"id":"7c9ef9bc-4a22-411c-86fd-686e0400fe81","block_type":"box","text":"enforcement of PRC tax rules could have a significant adverse effect on a Fund and its investors,","page_number":103,"box":{"x":116,"y":555,"width":727,"height":13}},{"id":"97b34a9c-5290-4c8e-9fd7-9547a2d6cd54","block_type":"box","text":"particularly in relation to capital gains withholding tax imposed upon non-residents. In addition, the","page_number":103,"box":{"x":117,"y":571,"width":732,"height":12}},{"id":"fa5daa22-79a1-461b-85de-218c54226a03","block_type":"box","text":"accounting, auditing and financial reporting standards and practices applicable to Chinese companies","page_number":103,"box":{"x":116,"y":586,"width":759,"height":13}},{"id":"efa325c7-97ab-4030-b95f-caf7cc2a5073","block_type":"box","text":"may be less rigorous, and may result in significant differences between financial statements prepared","page_number":103,"box":{"x":117,"y":602,"width":757,"height":12}},{"id":"9858d4d1-9683-4a48-8395-4a7216cd2499","block_type":"box","text":"in accordance with PRC accounting standards and practice and those prepared in accordance with","page_number":103,"box":{"x":117,"y":617,"width":739,"height":13}},{"id":"61c7f188-099c-45bd-94d1-66bea18721c0","block_type":"box","text":"international accounting standards.","page_number":103,"box":{"x":117,"y":633,"width":264,"height":12}},{"id":"2fa34f12-08ad-41cf-9638-568b305797a0","block_type":"box","text":"From time to time and in recent years, China has experienced outbreaks of infectious illnesses and the","page_number":103,"box":{"x":117,"y":666,"width":762,"height":12}},{"id":"eb879bd9-37fa-42ae-a421-ed48f524ee6e","block_type":"box","text":"country may be subject to other public health threats, infectious illnesses, diseases or similar issues in","page_number":103,"box":{"x":116,"y":681,"width":757,"height":12}},{"id":"1822fb7a-66a9-4d9d-a28e-283312cc2555","block_type":"box","text":"the future. Any spread of an infectious illness, public health threat or similar issue could reduce","page_number":103,"box":{"x":116,"y":697,"width":704,"height":12}},{"id":"b3649903-a2f8-4bf7-8ec7-bb089bb456de","block_type":"box","text":"consumer demand or economic output, result in market closures, travel restrictions or quarantines, and","page_number":103,"box":{"x":116,"y":712,"width":764,"height":12}},{"id":"ed85f043-6816-4aa7-b3f3-8defee0dff3d","block_type":"box","text":"generally have a significant impact on the Chinese economy, which in turn could adversely affect a","page_number":103,"box":{"x":116,"y":728,"width":732,"height":12}},{"id":"c04b97cc-4d03-49d7-8df1-e9e7190ac9f4","block_type":"box","text":"Fund’s investments.","page_number":103,"box":{"x":117,"y":743,"width":147,"height":10}},{"id":"b196e760-59dd-431a-8767-4a2f2d549525","block_type":"box","text":"Risk of Investing through Stock Connect.","page_number":103,"box":{"x":116,"y":776,"width":302,"height":12}},{"id":"be4c60ae-c4db-4c52-8665-18d99331f101","block_type":"box","text":"General.","page_number":103,"box":{"x":117,"y":800,"width":62,"height":10}},{"id":"4c269e17-7234-47e4-a152-6e6c0572d3cf","block_type":"box","text":"China A-shares are equity securities of companies domiciled in China that trade on Chinese","page_number":103,"box":{"x":186,"y":800,"width":681,"height":12}},{"id":"7677433f-7c35-426f-8d70-5a126252d078","block_type":"box","text":"stock exchanges such as the Shanghai Stock Exchange (“SSE”), the Shenzhen Stock Exchange","page_number":103,"box":{"x":116,"y":815,"width":718,"height":13}},{"id":"f2ca53c3-45b7-41e1-a282-1fe5bfc7d700","block_type":"box","text":"(“SZSE”) and the Beijing Stock Exchange (“BSE”) (“A-shares”). Foreign investment in A-shares on the","page_number":103,"box":{"x":117,"y":831,"width":761,"height":12}},{"id":"5277d24e-de51-4687-8b15-64773a5236c3","block_type":"box","text":"SSE and SZSE is not permitted, other than pursuant to available exceptions, such as through a","page_number":103,"box":{"x":116,"y":846,"width":713,"height":13}},{"id":"c31492c7-e04f-4b0b-8570-aadff562848c","block_type":"box","text":"qualified foreign investor approved pursuant to the relevant mainland China laws and regulations as","page_number":103,"box":{"x":116,"y":862,"width":745,"height":12}},{"id":"3b3ac529-db7c-4ba4-b652-b0e3c9a7a9fc","block_type":"box","text":"may be promulgated and/or amended from time to time (“QFI”).","page_number":103,"box":{"x":117,"y":877,"width":474,"height":13}},{"id":"b22543db-5c33-45f0-9896-231826b67772","block_type":"box","text":"II-55","page_number":103,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0fcc5ca3-0317-4aa4-8fbe-fdb55fd4e5cd","block_type":"box","text":"NM1026U-6033243-103/221","page_number":103,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"36ba6b90-372b-4f69-bcb0-9bfc57a1099f","block_type":"box","text":"Investment in eligible exchange traded funds and A-shares listed and traded on the SSE or SZSE","page_number":104,"box":{"x":117,"y":87,"width":728,"height":12}},{"id":"161ae775-e7bd-44b2-869b-365e7f7dd513","block_type":"box","text":"(“Stock Connect Securities”) is also permitted through the Shanghai-Hong Kong Stock Connect","page_number":104,"box":{"x":117,"y":102,"width":711,"height":13}},{"id":"60b4f0e2-63d8-4106-8d4f-4b2c17f2f504","block_type":"box","text":"program or the Shenzhen-Hong Kong Stock Connect program, as applicable (each, a “Stock Connect”","page_number":104,"box":{"x":117,"y":118,"width":764,"height":12}},{"id":"e771b2f7-c5b1-4634-936a-2cf03be9175e","block_type":"box","text":"and collectively, “Stock Connects”). Each Stock Connect is a securities trading and clearing links","page_number":104,"box":{"x":116,"y":134,"width":722,"height":12}},{"id":"39625a16-18da-4db8-9ae0-c489f988599d","block_type":"box","text":"program established by The Stock Exchange of Hong Kong Limited (“SEHK”), the Hong Kong","page_number":104,"box":{"x":117,"y":149,"width":699,"height":12}},{"id":"5af2288a-2e57-4a49-8c0f-56fced4a4b07","block_type":"box","text":"Securities Clearing Company Limited (“HKSCC”), the SSE or SZSE, as applicable, and China","page_number":104,"box":{"x":116,"y":165,"width":700,"height":12}},{"id":"063d51bf-f8dc-44ea-8645-73593af4ebf4","block_type":"box","text":"Securities Depository and Clearing Corporation Limited (“CSDCC”) that aims to provide mutual stock","page_number":104,"box":{"x":116,"y":180,"width":753,"height":12}},{"id":"63f19e7c-6921-4007-861d-f9d191760500","block_type":"box","text":"market access between the PRC and Hong Kong by permitting investors to trade and settle shares on","page_number":104,"box":{"x":117,"y":196,"width":761,"height":12}},{"id":"f051cb91-88a4-4a13-b401-a72aee45e56a","block_type":"box","text":"each market through their local securities brokers. Under Stock Connects, a Fund’s trading of Stock","page_number":104,"box":{"x":116,"y":211,"width":746,"height":12}},{"id":"ceb93883-72a8-4868-ac12-b1a316bef0eb","block_type":"box","text":"Connect Securities listed on the SSE or SZSE, as applicable, would be effectuated through its Hong","page_number":104,"box":{"x":117,"y":227,"width":747,"height":12}},{"id":"e7065a2d-9192-43f2-888f-4eae3bfe0c6b","block_type":"box","text":"Kong broker and a securities trading service company established by SEHK.","page_number":104,"box":{"x":117,"y":242,"width":572,"height":12}},{"id":"099bf98c-d285-49de-aaca-fdc3621e927d","block_type":"box","text":"Although no individual investment quotas or licensing requirements apply to investors in Stock","page_number":104,"box":{"x":116,"y":273,"width":703,"height":12}},{"id":"11fbd056-7cb6-4906-99fe-33ac77af9277","block_type":"box","text":"Connect, trading through a Stock Connect’s Northbound Trading Link is subject to daily investment","page_number":104,"box":{"x":117,"y":289,"width":738,"height":12}},{"id":"15fe42c8-be26-4ad3-8f9c-28da5d3a6f52","block_type":"box","text":"quota limitations which require that buy orders for Stock Connect Securities be rejected once the daily","page_number":104,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"004a3b7c-60d5-4e2d-a52f-bc3ff02bc70e","block_type":"box","text":"quota is exceeded (although a Fund will be permitted to sell their Stock Connect Securities regardless","page_number":104,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"ba30e3e2-c5e3-4de4-b7b1-5a518a6a30d3","block_type":"box","text":"of the quota). These limitations may restrict a Fund from investing in Stock Connect Securities on a","page_number":104,"box":{"x":116,"y":335,"width":741,"height":12}},{"id":"ef4c0383-11e2-4157-a272-6883475ac55c","block_type":"box","text":"timely basis, which could affect the Fund’s ability to effectively pursue its investment strategy.","page_number":104,"box":{"x":116,"y":351,"width":698,"height":12}},{"id":"b29c4507-c0d8-422d-9a00-ac0685219e49","block_type":"box","text":"Investment quotas are also subject to change. Investment in Stock Connect Securities through a Stock","page_number":104,"box":{"x":117,"y":366,"width":767,"height":12}},{"id":"3817c53b-0911-4129-854d-3a230aa4b70b","block_type":"box","text":"Connect is subject to trading, clearance and settlement procedures that could pose risks to a Fund.","page_number":104,"box":{"x":117,"y":382,"width":741,"height":12}},{"id":"7419b7c9-b9ec-4c37-bb3a-0c8b16beb396","block_type":"box","text":"Stock Connect Securities purchased through Stock Connects generally may not be sold or otherwise","page_number":104,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"eddf4f74-38e2-4b07-b7ce-e5aec699c30b","block_type":"box","text":"transferred other than through Stock Connects in accordance with applicable rules. For example, the","page_number":104,"box":{"x":116,"y":413,"width":752,"height":12}},{"id":"38b3cb47-4a69-49c8-91a7-14189384c044","block_type":"box","text":"PRC regulations require that in order for an investor to sell any Stock Connect Securities on a certain","page_number":104,"box":{"x":117,"y":428,"width":755,"height":12}},{"id":"f52cdcc2-783f-428c-b60d-1b295abc9fc7","block_type":"box","text":"trading day, there must be sufficient Stock Connect Securities in the investor’s account before the","page_number":104,"box":{"x":116,"y":444,"width":730,"height":12}},{"id":"82428794-f8ce-4f30-932e-f06355f4926e","block_type":"box","text":"market opens on that day. If there are insufficient Stock Connect Securities in the investor’s account,","page_number":104,"box":{"x":117,"y":459,"width":751,"height":12}},{"id":"4fa9e591-f82b-43e8-a93b-3e62042919fb","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":104,"box":{"x":116,"y":475,"width":765,"height":12}},{"id":"c7e651c9-2aaa-486b-a877-ff642806968f","block_type":"box","text":"on sell orders of certain stocks listed on the SSE market (“SSE Securities”) or SZSE market (“SZSE","page_number":104,"box":{"x":116,"y":490,"width":746,"height":12}},{"id":"4af7925f-a199-406f-8ab0-73e3e27afad6","block_type":"box","text":"Securities”) of its participants (","page_number":104,"box":{"x":116,"y":506,"width":226,"height":12}},{"id":"dbe2c093-6291-4a46-b62a-9ceff94e6c18","block_type":"box","text":"i.e.","page_number":104,"box":{"x":343,"y":506,"width":20,"height":9}},{"id":"39d9fe86-bc42-4911-a668-27dfa3b64ab4","block_type":"box","text":", stock brokers) to ensure that this requirement is satisfied. While","page_number":104,"box":{"x":366,"y":506,"width":486,"height":12}},{"id":"cea2a2cf-dd17-464e-9bfd-d1537d7c7f26","block_type":"box","text":"shares must be designated as eligible to be traded under a Stock Connect, those shares may also lose","page_number":104,"box":{"x":116,"y":521,"width":770,"height":12}},{"id":"d6b2b214-d6a4-4b2a-b72e-a7f7378e4911","block_type":"box","text":"such designation, and if this occurs, such shares may be sold but cannot be purchased through a","page_number":104,"box":{"x":116,"y":537,"width":728,"height":12}},{"id":"e3927362-3d4e-4a00-9ac2-c4f0176b71e6","block_type":"box","text":"Stock Connect. In addition, Stock Connects will only operate on days when both the Chinese and Hong","page_number":104,"box":{"x":116,"y":552,"width":771,"height":12}},{"id":"463fc863-5474-4a71-9f97-dfeb5052fb78","block_type":"box","text":"Kong markets are open for trading, and banking services are available in both markets on the","page_number":104,"box":{"x":117,"y":568,"width":698,"height":12}},{"id":"563b4b75-3903-4e80-a976-e0def2b82ba3","block_type":"box","text":"corresponding settlement days. Therefore, an investment in Stock Connect Securities through a Stock","page_number":104,"box":{"x":116,"y":583,"width":763,"height":12}},{"id":"41b9cd88-65c9-4feb-ab49-68904c00e4c4","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":104,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"164882b2-328c-4e3b-9c26-d8b570d26d82","block_type":"box","text":"but a Stock Connect is not trading. Moreover, day (turnaround) trading is not permitted on the Stock","page_number":104,"box":{"x":117,"y":614,"width":745,"height":12}},{"id":"cfee1c70-0019-4f0a-b185-0adb5a4bda62","block_type":"box","text":"Connect Securities market. If an investor buys Stock Connect Securities on day “T,” the investor will","page_number":104,"box":{"x":117,"y":630,"width":746,"height":12}},{"id":"5e0c60ae-ad73-493c-aa61-21bf01100e6c","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":104,"box":{"x":116,"y":645,"width":763,"height":12}},{"id":"159a4c2c-4ff2-42b5-aeeb-06e841a3659e","block_type":"box","text":"Connect Securities must be settled in RMB, investors must have timely access to a reliable supply of","page_number":104,"box":{"x":117,"y":661,"width":748,"height":12}},{"id":"0c0c5149-2be6-47d8-9a43-92343f8a8ea4","block_type":"box","text":"offshore RMB, which cannot be guaranteed. There is also no assurance that RMB will not be subject to","page_number":104,"box":{"x":116,"y":676,"width":765,"height":12}},{"id":"1986b9d2-a869-42c3-aba6-653bf8c08853","block_type":"box","text":"devaluation. Any devaluation of RMB could adversely affect a Fund’s investments. If a Fund holds a","page_number":104,"box":{"x":116,"y":692,"width":741,"height":12}},{"id":"a861ce08-5d4b-41f5-87f5-6d6fd79ca3ab","block_type":"box","text":"class of shares denominated in a local currency other than RMB, the Fund will be exposed to currency","page_number":104,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"a09b2ac7-6b97-4068-a9a2-166e41917905","block_type":"box","text":"exchange risk if the Fund converts the local currency into RMB for investments in Stock Connect","page_number":104,"box":{"x":116,"y":723,"width":717,"height":12}},{"id":"8e9fc295-87bb-4661-be7f-70bbf0b7abaa","block_type":"box","text":"Securities. A Fund may also incur conversion costs.","page_number":104,"box":{"x":116,"y":738,"width":384,"height":12}},{"id":"96d4adf4-3100-4b74-8d2f-b5b5f22bc688","block_type":"box","text":"Stock Connect Securities held through the nominee structure under a Stock Connect will be held","page_number":104,"box":{"x":116,"y":769,"width":716,"height":12}},{"id":"8e10f888-7ab3-4c74-b811-22d25dd56d67","block_type":"box","text":"through HKSCC as nominee on behalf of investors. The precise nature and rights of a Fund as the","page_number":104,"box":{"x":116,"y":785,"width":731,"height":12}},{"id":"98327680-c132-4c9e-9c3c-71f1bfea056a","block_type":"box","text":"beneficial owner of the SSE Securities or SZSE Securities through HKSCC as nominee is not well","page_number":104,"box":{"x":117,"y":800,"width":725,"height":12}},{"id":"61cd82f6-da2a-4d6e-aa4c-f93dbe2d116f","block_type":"box","text":"defined under the PRC laws. There is a lack of a clear definition of, and distinction between, legal","page_number":104,"box":{"x":116,"y":816,"width":722,"height":12}},{"id":"a773dd98-b47e-4831-ac6d-c2b05dc9edbf","block_type":"box","text":"ownership and beneficial ownership under the PRC laws and there have been few cases involving a","page_number":104,"box":{"x":116,"y":831,"width":748,"height":12}},{"id":"94cca92d-d7af-4763-9566-0f0e6fefcda9","block_type":"box","text":"nominee account structure in the PRC courts. The exact nature and methods of enforcement of the","page_number":104,"box":{"x":117,"y":847,"width":740,"height":9}},{"id":"28e7974c-6429-4fa7-aefa-5050af7f2259","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":104,"box":{"x":117,"y":862,"width":757,"height":12}},{"id":"634757f3-2248-491a-9478-fb4e1cc24a69","block_type":"box","text":"becomes subject to winding up proceedings in Hong Kong, there is a risk that the SSE Securities or","page_number":104,"box":{"x":117,"y":878,"width":743,"height":12}},{"id":"c8033e21-5c12-4a88-a379-8717d0d7515f","block_type":"box","text":"II-56","page_number":104,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e36f16f6-05f9-4fdd-945f-49d84d56e082","block_type":"box","text":"NM1026U-6033243-104/221","page_number":104,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"fbcae25b-ca79-4cc0-b9a7-a49197be9ca2","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":105,"box":{"x":116,"y":87,"width":754,"height":12}},{"id":"d6a4660c-21da-4b9e-b972-ccafe8209b14","block_type":"box","text":"general assets of HKSCC available for general distribution to its creditors. Notwithstanding the fact that","page_number":105,"box":{"x":116,"y":102,"width":770,"height":13}},{"id":"05044992-538b-43e7-a14b-a63ad3cd3a38","block_type":"box","text":"HKSCC does not claim proprietary interests in the SSE Securities or SZSE Securities held in its","page_number":105,"box":{"x":117,"y":118,"width":714,"height":12}},{"id":"3dc70ab6-5e76-4bb4-b846-2bd8f1f7a379","block_type":"box","text":"omnibus stock account in the CSDCC, the CSDCC as the share registrar for SSE- or SZSE-listed","page_number":105,"box":{"x":116,"y":134,"width":729,"height":12}},{"id":"429d8346-12b1-4343-a5d9-8b8374c8d730","block_type":"box","text":"companies will still treat HKSCC as one of the shareholders when it handles corporate actions in","page_number":105,"box":{"x":116,"y":149,"width":722,"height":12}},{"id":"f3eb30a2-674b-4f04-8c67-7e68ab00e1a2","block_type":"box","text":"respect of such SSE Securities or SZSE Securities. HKSCC monitors the corporate actions affecting","page_number":105,"box":{"x":117,"y":165,"width":749,"height":12}},{"id":"5daacb4e-6242-4ab4-99d7-5ee64150b370","block_type":"box","text":"SSE Securities and SZSE Securities and keeps participants of Central Clearing and Settlement","page_number":105,"box":{"x":116,"y":180,"width":712,"height":12}},{"id":"f3e63e26-4dc1-4b87-8913-3fa68735fc75","block_type":"box","text":"System (“CCASS”) informed of all such corporate actions that require CCASS participants to take","page_number":105,"box":{"x":116,"y":196,"width":729,"height":12}},{"id":"a1590d34-4ff2-4823-93ef-1c3984f30023","block_type":"box","text":"steps in order to participate in them. Investors may only exercise their voting rights by providing their","page_number":105,"box":{"x":116,"y":211,"width":750,"height":12}},{"id":"954b89ec-a3ff-4ca6-b928-972c87ca6baa","block_type":"box","text":"voting instructions to HKSCC through participants of CCASS. All voting instructions from CCASS","page_number":105,"box":{"x":116,"y":227,"width":724,"height":12}},{"id":"392b10ab-78d2-46b3-bd72-b2960e8356ee","block_type":"box","text":"participants will be consolidated by HKSCC, who will then submit a combined single voting instruction","page_number":105,"box":{"x":117,"y":242,"width":757,"height":12}},{"id":"4cf12bee-2783-47d1-91e1-b713bd1dcf9e","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":105,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"d156fc57-bebe-4161-92de-cdc55e4e8879","block_type":"box","text":"enforcing its rights in SSE Securities or SZSE Securities.","page_number":105,"box":{"x":116,"y":273,"width":427,"height":12}},{"id":"94fdafe2-dd4f-4a5f-b586-de1945661a9e","block_type":"box","text":"Hong Kong’s Investor Compensation Fund is established to pay compensation to investors of any","page_number":105,"box":{"x":117,"y":304,"width":728,"height":12}},{"id":"ec3190f7-9d83-4b45-8620-4ce7e973983b","block_type":"box","text":"nationality who suffer pecuniary losses as a result of default of a licensed intermediary or authorized","page_number":105,"box":{"x":117,"y":320,"width":747,"height":12}},{"id":"dacaa1cf-e3fc-4563-9c72-acd4d7098488","block_type":"box","text":"financial institution in relation to exchange-traded products in Hong Kong. For defaults occurring on or","page_number":105,"box":{"x":116,"y":335,"width":760,"height":12}},{"id":"e113630e-a1a0-4b06-ba8f-f256dfa9d812","block_type":"box","text":"after January 1, 2020, Hong Kong’s Investor Compensation Fund covers investors’ losses in relation to","page_number":105,"box":{"x":116,"y":351,"width":769,"height":12}},{"id":"6ef6d437-bbf6-4bdc-923e-31606c32039c","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":105,"box":{"x":116,"y":366,"width":743,"height":12}},{"id":"2ec2c5a3-8846-4dc6-a318-3c7ec2b99b4c","block_type":"box","text":"purchase is permitted to be routed through the Northbound Trading Link of a Stock Connect. On the","page_number":105,"box":{"x":117,"y":382,"width":746,"height":12}},{"id":"11f0dac6-1ac8-4e2e-8bf5-2917124167b5","block_type":"box","text":"other hand, since a Fund carries out Northbound trading through securities brokers in Hong Kong but","page_number":105,"box":{"x":116,"y":397,"width":756,"height":12}},{"id":"5d8adc09-e36c-4b55-b326-95a8aeb7f62f","block_type":"box","text":"not PRC brokers, it is not protected by the China Securities Investor Protection Fund in the PRC.","page_number":105,"box":{"x":117,"y":413,"width":722,"height":12}},{"id":"78c7618f-9e70-4535-900a-b2f3a32bb736","block_type":"box","text":"Market participants are able to participate in Stock Connects subject to meeting certain information","page_number":105,"box":{"x":117,"y":444,"width":737,"height":12}},{"id":"f17d9035-692a-4ce1-b64d-c71eb21c05d2","block_type":"box","text":"technology capability, risk management and other requirements as may be specified by the relevant","page_number":105,"box":{"x":116,"y":459,"width":746,"height":12}},{"id":"1c170aa4-e3e7-4a4a-8765-fb011f53f879","block_type":"box","text":"exchange and/or clearing house. Further, the “connectivity” in Stock Connects requires routing of","page_number":105,"box":{"x":116,"y":475,"width":725,"height":12}},{"id":"cf3491b3-dcab-4bc0-ad4c-f86a85836ac5","block_type":"box","text":"orders across the border of Hong Kong and the PRC. This requires the development of new","page_number":105,"box":{"x":116,"y":490,"width":687,"height":12}},{"id":"deba6dae-8484-4256-984a-3250b3dc6b61","block_type":"box","text":"information technology systems on the part of SEHK and exchange participants. There is no assurance","page_number":105,"box":{"x":117,"y":506,"width":771,"height":12}},{"id":"15d4e03c-5952-4773-b673-78588b45482b","block_type":"box","text":"that the systems of SEHK and market participants will function properly or will continue to be adapted","page_number":105,"box":{"x":116,"y":521,"width":757,"height":12}},{"id":"8ce44784-5fec-4871-93ec-a198514b7c16","block_type":"box","text":"to changes and developments in both markets. In the event that the relevant systems fail to function","page_number":105,"box":{"x":116,"y":537,"width":747,"height":12}},{"id":"e6e883f0-7a95-404d-a07e-522ce2503b5f","block_type":"box","text":"properly, trading in Stock Connect Securities through Stock Connects could be disrupted.","page_number":105,"box":{"x":117,"y":552,"width":667,"height":12}},{"id":"f2c9fcc4-8adf-43eb-89e9-626b5f98d544","block_type":"box","text":"The Shanghai-Hong Kong Stock Connect program launched in November 2014 and the Shenzhen","page_number":105,"box":{"x":116,"y":583,"width":737,"height":12}},{"id":"54882a8f-6ce7-4a22-8298-ab30570514f8","block_type":"box","text":"Hong Kong Stock Connect program launched in December 2016. Each program does not have an","page_number":105,"box":{"x":117,"y":599,"width":733,"height":12}},{"id":"f22690a7-01b0-4466-b1ed-bb12e92be949","block_type":"box","text":"extensive operating history. New or revised regulations may be issued from time to time by the","page_number":105,"box":{"x":116,"y":614,"width":707,"height":12}},{"id":"6475b994-e690-40f5-b327-5d887e3b265b","block_type":"box","text":"regulators and stock exchanges in China and Hong Kong in connection with operations, legal","page_number":105,"box":{"x":117,"y":630,"width":695,"height":12}},{"id":"c6d9025a-b2d5-4116-b514-f9972a60ccb6","block_type":"box","text":"enforcement and cross-border trades under Stock Connects. In addition, there can be no assurance","page_number":105,"box":{"x":116,"y":645,"width":748,"height":11}},{"id":"3c43c7bc-dbd5-467a-9cd4-cbf144df95ce","block_type":"box","text":"that Stock Connect will not be discontinued. A Fund may be adversely affected as a result of such","page_number":105,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"ac870a78-f664-418b-8750-1a83dc8dbfc8","block_type":"box","text":"changes. Furthermore, the securities regimes and legal systems of China and Hong Kong differ","page_number":105,"box":{"x":116,"y":676,"width":709,"height":12}},{"id":"1d542426-208f-4b8b-aaca-65d4a9647657","block_type":"box","text":"significantly and issues may arise from the differences on an on-going basis. In the event that the","page_number":105,"box":{"x":116,"y":692,"width":722,"height":12}},{"id":"78462799-950e-49dd-a2c6-8487e4f55a2d","block_type":"box","text":"relevant systems fail to function properly, trading in both markets through Stock Connects could be","page_number":105,"box":{"x":117,"y":707,"width":732,"height":12}},{"id":"55fcec28-b9fe-4bb0-af22-3f7ec06c8a7a","block_type":"box","text":"disrupted and a Fund’s ability to achieve its investment objective may be adversely affected. In","page_number":105,"box":{"x":116,"y":723,"width":702,"height":12}},{"id":"bf3c2dd2-d6fd-4523-877a-77d20aeee0c0","block_type":"box","text":"addition, a Fund’s investments in Stock Connect Securities through Stock Connects are generally","page_number":105,"box":{"x":116,"y":738,"width":724,"height":12}},{"id":"43988646-56fa-401d-99b3-dcf94849e085","block_type":"box","text":"subject to Chinese securities regulations and listing rules, among other restrictions. Further, different","page_number":105,"box":{"x":116,"y":754,"width":746,"height":12}},{"id":"a8c03b05-2d6a-4498-a16d-28fb4c9e9e61","block_type":"box","text":"fees, costs and taxes are imposed on foreign investors acquiring Stock Connect Securities through","page_number":105,"box":{"x":116,"y":769,"width":733,"height":12}},{"id":"79aebe42-96d9-484c-9166-d22101be5117","block_type":"box","text":"Stock Connects, and these fees, costs and taxes may be higher than comparable fees, costs and","page_number":105,"box":{"x":116,"y":785,"width":722,"height":12}},{"id":"90911336-4e68-4ac8-a47c-7a06538622b9","block_type":"box","text":"taxes imposed on owners of other securities providing similar investment exposure.","page_number":105,"box":{"x":116,"y":800,"width":618,"height":12}},{"id":"28cd3981-b12c-48c8-93a0-72727bd288a5","block_type":"box","text":"Suspension Risk.","page_number":105,"box":{"x":117,"y":831,"width":127,"height":12}},{"id":"67efcf78-400f-4398-a964-cda157d36c46","block_type":"box","text":"SSE Securities and SZSE Securities may only be bought from, or sold to, a Fund at","page_number":105,"box":{"x":246,"y":831,"width":630,"height":12}},{"id":"444df616-0f02-479c-b268-19aa1274b2b4","block_type":"box","text":"times when the relevant SSE Securities and SZSE Securities may be sold or purchased on the","page_number":105,"box":{"x":116,"y":847,"width":709,"height":12}},{"id":"e5bc951f-ec93-45b8-91a0-d07ea6635eb1","block_type":"box","text":"relevant Chinese stock exchange. The SSE Securities and SZSE Securities markets have a higher","page_number":105,"box":{"x":117,"y":862,"width":738,"height":12}},{"id":"38dcb4b8-5294-4c4c-a689-1b2a1a6950eb","block_type":"box","text":"propensity for trading suspensions than many other global equity markets. Each of the SEHK, SSE and","page_number":105,"box":{"x":117,"y":878,"width":771,"height":12}},{"id":"9713151b-7463-435e-bf71-b2edc37ea0f5","block_type":"box","text":"II-57","page_number":105,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"db344dd0-47c3-47b4-afdd-1b4f6a482de2","block_type":"box","text":"NM1026U-6033243-105/221","page_number":105,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"dd366e10-8b00-49a6-b090-774022a426cf","block_type":"box","text":"SZSE reserves the right to suspend trading of SSE Securities and SZSE Securities purchased on the","page_number":106,"box":{"x":116,"y":87,"width":756,"height":12}},{"id":"24272d92-5d7d-40eb-babc-4774b944a49a","block_type":"box","text":"Stock Connects if necessary for ensuring an orderly and fair market and ensuring that risks are","page_number":106,"box":{"x":116,"y":102,"width":710,"height":13}},{"id":"89f01f27-edc1-49fe-bb92-4d1c1c56a770","block_type":"box","text":"managed prudently. Consent from the relevant regulator would be sought before a suspension of","page_number":106,"box":{"x":117,"y":118,"width":724,"height":12}},{"id":"257144a5-8cbb-45fd-95e6-060462d89491","block_type":"box","text":"Northbound trading is triggered. The relevant PRC government authority may also impose “circuit","page_number":106,"box":{"x":117,"y":134,"width":727,"height":12}},{"id":"bad112bd-4c7c-4412-a949-ed01c1378261","block_type":"box","text":"breakers” and other measures to halt or suspend Northbound trading. Where a suspension in the","page_number":106,"box":{"x":117,"y":149,"width":725,"height":12}},{"id":"99fbdbcc-ab02-4bb1-aed7-9abea907e662","block_type":"box","text":"Northbound trading through Stock Connect is effected, the Fund’s ability to access the PRC market will","page_number":106,"box":{"x":117,"y":165,"width":769,"height":12}},{"id":"dd621ca0-2675-4527-a03b-79704364c0b2","block_type":"box","text":"be adversely affected. Trading suspensions in certain stocks could lead to greater market execution","page_number":106,"box":{"x":117,"y":180,"width":745,"height":12}},{"id":"9716c7f8-1cfe-4018-a62e-20812425db70","block_type":"box","text":"risk and costs for a Fund. The SSE and SZSE currently","page_number":106,"box":{"x":117,"y":196,"width":415,"height":12}},{"id":"61350fc0-caff-4475-afd5-58de0166be8b","block_type":"box","text":"apply a daily price limit, generally set at 10%,","page_number":106,"box":{"x":533,"y":196,"width":340,"height":12}},{"id":"d2dd9513-68d6-4784-8edd-3e82e3650ce0","block_type":"box","text":"of the amount of fluctuation permitted in the prices of the relevant SSE Securities and SZSE Securities","page_number":106,"box":{"x":116,"y":211,"width":766,"height":12}},{"id":"72b51e21-4d66-4864-9d7a-f0a796e04bbb","block_type":"box","text":"during a single trading day. The daily price limit refers to price movements only and does not restrict","page_number":106,"box":{"x":116,"y":227,"width":747,"height":12}},{"id":"4826eac1-006d-4268-85b1-5af1c2d548cf","block_type":"box","text":"trading within the relevant limit. There can be no assurance that a liquid market on an exchange will","page_number":106,"box":{"x":116,"y":242,"width":744,"height":12}},{"id":"0396a2d7-9140-450a-ba57-b45b885b28d4","block_type":"box","text":"exist for any particular SSE Security or SZSE Security or for any particular time.","page_number":106,"box":{"x":116,"y":258,"width":598,"height":12}},{"id":"5eb94fa0-f470-44e1-8625-c7290b0ed004","block_type":"box","text":"Risk of Investing in the China Interbank Bond Market through Bond Connect.","page_number":106,"box":{"x":116,"y":289,"width":575,"height":12}},{"id":"b8812125-dc01-4128-87dd-153a5426bfd8","block_type":"box","text":"A Fund may invest","page_number":106,"box":{"x":691,"y":289,"width":144,"height":12}},{"id":"53029ef7-7bfc-45df-a9c9-8b190dac63d7","block_type":"box","text":"directly in the domestic bond market in the PRC (the “China Interbank Bond Market”) through the","page_number":106,"box":{"x":116,"y":304,"width":724,"height":12}},{"id":"08bc8527-955b-4ed5-a53e-a202cd39f032","block_type":"box","text":"northbound trading of Bond Connect (“Bond Connect”). Bond Connect is an initiative launched in July","page_number":106,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"9f8085f7-9f0a-4a8f-808e-e6292a4b13a8","block_type":"box","text":"2017 for mutual bond market access between the PRC and Hong Kong, established by the China","page_number":106,"box":{"x":116,"y":335,"width":729,"height":12}},{"id":"48c67f6c-92f7-47a0-85a9-f7bea6277041","block_type":"box","text":"Foreign Exchange Trade System & National Interbank Funding Centre (“CFETS”), China Central","page_number":106,"box":{"x":117,"y":351,"width":722,"height":12}},{"id":"505a0cec-a75f-4b70-b3f7-3548530907ad","block_type":"box","text":"Depository & Clearing Co., Ltd (“CDCC”), Shanghai Clearing House (“SCH”), Hong Kong Exchanges","page_number":106,"box":{"x":117,"y":366,"width":752,"height":12}},{"id":"9c1c2f84-a96e-4ad5-b268-f23c4b37d052","block_type":"box","text":"and Clearing Limited (“HKEX”) and Central Moneymarkets Unit (“CMU”). Under the prevailing","page_number":106,"box":{"x":116,"y":382,"width":699,"height":12}},{"id":"97fdc61d-ca80-486b-8730-fdcbcbbb527a","block_type":"box","text":"regulations in the PRC, eligible foreign investors are allowed to invest in the bonds circulated in the","page_number":106,"box":{"x":117,"y":397,"width":738,"height":12}},{"id":"297732c2-80a5-430c-b8c4-4dc79cd3b8a0","block_type":"box","text":"China Interbank Bond Market through Bond Connect. Eligible foreign investors may submit trade","page_number":106,"box":{"x":117,"y":413,"width":721,"height":12}},{"id":"a7a5ab7d-1f46-43bd-accd-0f71189fde39","block_type":"box","text":"requests for bonds circulated in the China Interbank Bond Market through offshore electronic bond","page_number":106,"box":{"x":117,"y":428,"width":735,"height":12}},{"id":"afbf46b7-d687-4fab-9d45-9fb22bd3c063","block_type":"box","text":"trading platforms (such as Tradeweb), which will in turn transmit their requests for quotation to CFETS.","page_number":106,"box":{"x":116,"y":444,"width":768,"height":12}},{"id":"ede32a6f-cf5b-4428-9bc9-75e5b8aacbcd","block_type":"box","text":"CFETS will send the requests for quotation to a number of approved onshore dealers (including market","page_number":106,"box":{"x":117,"y":459,"width":770,"height":12}},{"id":"15f0cb91-da5d-46dc-866b-f20b152dcd26","block_type":"box","text":"makers and others engaged in the market making business) in the PRC. The approved onshore","page_number":106,"box":{"x":117,"y":475,"width":715,"height":12}},{"id":"281124f3-78c7-47c6-a244-7bb71c86ba5a","block_type":"box","text":"dealer(s) will respond to the requests for quotation via CFETS and CFETS will send their responses to","page_number":106,"box":{"x":116,"y":490,"width":765,"height":12}},{"id":"ce593a29-0465-4888-8dd9-25b201044799","block_type":"box","text":"those eligible foreign investors through the same offshore electronic bond trading platforms. Once the","page_number":106,"box":{"x":116,"y":506,"width":759,"height":12}},{"id":"649c6478-482e-475d-ba42-16d07ab02d18","block_type":"box","text":"eligible foreign investor accepts the quotation, the trade is concluded on CFETS.","page_number":106,"box":{"x":116,"y":521,"width":603,"height":12}},{"id":"d195244f-1e7f-41bb-8fb3-13e64b5c7658","block_type":"box","text":"The settlement and custody of bonds traded in the China Interbank Bond Market under Bond Connect","page_number":106,"box":{"x":116,"y":552,"width":761,"height":12}},{"id":"9bb9cc16-da8e-4177-a51d-30c05246bbc7","block_type":"box","text":"will be effected through the settlement and custody link between CMU, as an offshore custody agent,","page_number":106,"box":{"x":116,"y":568,"width":755,"height":12}},{"id":"57476335-ff3d-4550-8aed-791fa25d3d17","block_type":"box","text":"and CDCC and SCH, as onshore custodians and clearing institutions in the PRC. Under the settlement","page_number":106,"box":{"x":116,"y":583,"width":768,"height":12}},{"id":"cb25c77d-413a-4544-a295-6fb144d52f9c","block_type":"box","text":"link, CDCC or SCH will effect gross settlement of confirmed trades onshore and CMU will process","page_number":106,"box":{"x":117,"y":599,"width":730,"height":12}},{"id":"22975c9e-c509-4f93-913e-7a53887c1ed5","block_type":"box","text":"bond settlement instructions from CMU members on behalf of eligible foreign investors in accordance","page_number":106,"box":{"x":117,"y":614,"width":757,"height":12}},{"id":"1af66b0b-9fe8-478b-8a75-c01510c7e53d","block_type":"box","text":"with its relevant rules. Since the introduction in August 2018 of delivery versus payment (DVP)","page_number":106,"box":{"x":116,"y":630,"width":705,"height":12}},{"id":"fc6cf618-d169-4275-a1e8-8b3cfa75186c","block_type":"box","text":"settlement in respect of Bond Connect, the movement of cash and securities is carried out","page_number":106,"box":{"x":116,"y":645,"width":675,"height":12}},{"id":"6c685561-ac9d-481c-a298-90fba3ad10bf","block_type":"box","text":"simultaneously on a real-time basis. Pursuant to the prevailing regulations in the PRC, CMU, as the","page_number":106,"box":{"x":116,"y":661,"width":738,"height":12}},{"id":"b020c311-dc5f-42c5-a46b-5083de377764","block_type":"box","text":"offshore custody agent recognized by the Hong Kong Monetary Authority, will open omnibus nominee","page_number":106,"box":{"x":116,"y":676,"width":754,"height":12}},{"id":"062cd10e-18bf-4716-89ca-29e9c71872d1","block_type":"box","text":"accounts with the onshore custody agent recognized by the People’s Bank of China (","page_number":106,"box":{"x":116,"y":692,"width":631,"height":12}},{"id":"af56ef6f-a669-4749-885f-195ea5bbeb9f","block_type":"box","text":"i.e.","page_number":106,"box":{"x":749,"y":692,"width":20,"height":9}},{"id":"71a4ee96-a8b5-4c44-8fa0-0ab4cb84132e","block_type":"box","text":", CDCC and","page_number":106,"box":{"x":772,"y":692,"width":88,"height":11}},{"id":"409e45dd-d5aa-40fa-9b24-e53c0a058ce2","block_type":"box","text":"SCH). All bonds traded by eligible foreign investors through Bond Connect will be registered in the","page_number":106,"box":{"x":116,"y":707,"width":729,"height":12}},{"id":"63979b28-7a16-4bf0-8b97-ebc748c25c9e","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":106,"box":{"x":117,"y":723,"width":748,"height":12}},{"id":"76be5c2b-0e1f-451a-9b9d-b2e6bd315f1e","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":106,"box":{"x":116,"y":738,"width":754,"height":12}},{"id":"3e4f5752-f963-48da-b07a-f8273bd0b9d1","block_type":"box","text":"Bond Connect bonds under its market contracts with clearing participants will be limited to assisting","page_number":106,"box":{"x":117,"y":754,"width":736,"height":12}},{"id":"25c49a25-5be7-40b4-9595-105adcd2b3fb","block_type":"box","text":"clearing participants in pursuing their claims against CDCC or SCH. The Fund may suffer delay in the","page_number":106,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"f7bc4a9f-6a4d-46c8-a17d-9605a061f559","block_type":"box","text":"recovery process or may not fully recover its losses from CDCC or SCH. In addition, as the relevant","page_number":106,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"03c0cbaf-2acb-4fda-a13f-9de674c9dd90","block_type":"box","text":"filings, registration with the People’s Bank of China, and account opening have to be carried out by","page_number":106,"box":{"x":116,"y":800,"width":733,"height":12}},{"id":"6a5a0e04-7aed-4c25-b9e6-79f13d03d026","block_type":"box","text":"third parties, including CMU, CDCC, SCH, and CFETS, a Fund is subject to the risks of default or","page_number":106,"box":{"x":116,"y":816,"width":723,"height":12}},{"id":"2da15acd-1cb3-44c2-af02-943d364d04ef","block_type":"box","text":"errors on the part of such third parties.","page_number":106,"box":{"x":116,"y":831,"width":290,"height":12}},{"id":"7f441e46-1195-4315-bcc2-fbf812e1e1e4","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":106,"box":{"x":116,"y":862,"width":720,"height":12}},{"id":"016194c9-5e21-4e5f-899a-af6cbd379ccb","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":106,"box":{"x":117,"y":878,"width":765,"height":12}},{"id":"994aa5db-4d31-4178-ba78-24b3c7fe9167","block_type":"box","text":"II-58","page_number":106,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"411c5acd-5055-40f4-9b67-a08f91e927e8","block_type":"box","text":"NM1026U-6033243-106/221","page_number":106,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"9ad4c7ff-9b8c-4ddf-a04b-864994a8ebfa","block_type":"box","text":"a clear definition of, and distinction between, legal ownership and beneficial ownership under PRC law","page_number":107,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"80e49bfa-5d55-4b84-9df3-615258814a2c","block_type":"box","text":"and there have been few cases involving a nominee account structure in the PRC courts. The exact","page_number":107,"box":{"x":116,"y":102,"width":745,"height":13}},{"id":"e70d6f09-2259-4838-8f90-c8a8cc2d8c00","block_type":"box","text":"nature and methods of enforcement of the rights and interests of a Fund under PRC law are also","page_number":107,"box":{"x":117,"y":118,"width":722,"height":12}},{"id":"e9d93a08-2a2c-4872-a56b-3423a527ad57","block_type":"box","text":"uncertain.","page_number":107,"box":{"x":117,"y":134,"width":77,"height":9}},{"id":"044ac799-89cf-4bcd-8aa6-10d10495a17c","block_type":"box","text":"Market volatility and potential lack of liquidity due to low trading volume of certain bonds in the China","page_number":107,"box":{"x":117,"y":165,"width":750,"height":13}},{"id":"37d5e642-7792-4a80-b736-0552542ece40","block_type":"box","text":"Interbank Bond Market may result in prices of certain bonds traded on such market fluctuating","page_number":107,"box":{"x":117,"y":181,"width":702,"height":12}},{"id":"6c50fdc2-5744-47be-92c0-0862faf5c9e5","block_type":"box","text":"significantly. A Fund investing in such market is therefore subject to liquidity and volatility risks. The","page_number":107,"box":{"x":116,"y":196,"width":742,"height":13}},{"id":"8eab24dc-66fa-4093-9227-719861603f11","block_type":"box","text":"bid-ask spreads of the prices of such securities may be large, and a Fund may therefore incur","page_number":107,"box":{"x":117,"y":212,"width":700,"height":12}},{"id":"7efefce2-381d-4468-aaaa-cd74b0df4171","block_type":"box","text":"significant costs and may suffer losses when selling such investments. The bonds traded in the China","page_number":107,"box":{"x":116,"y":227,"width":759,"height":13}},{"id":"464d28df-8128-42d1-a75b-eb2c17e99030","block_type":"box","text":"Interbank Bond Market may be difficult or impossible to sell, which may impact a Fund’s ability to","page_number":107,"box":{"x":117,"y":243,"width":722,"height":12}},{"id":"9cacdd46-3dfd-40f6-a70e-591f96d61c61","block_type":"box","text":"acquire or dispose of such securities at their expected prices.","page_number":107,"box":{"x":116,"y":259,"width":460,"height":11}},{"id":"c708013c-b8e0-4af0-a87f-23a40a041343","block_type":"box","text":"Investing in the China Interbank Bond Market through Bond Connect is also subject to regulatory risks.","page_number":107,"box":{"x":117,"y":290,"width":766,"height":13}},{"id":"88e9fa17-537f-4d08-aaef-902bd65d51bd","block_type":"box","text":"The relevant rules and regulations are subject to change, which may have potential retrospective","page_number":107,"box":{"x":116,"y":306,"width":724,"height":12}},{"id":"e6fe74e0-0d66-4328-aa1b-15f3d2500bee","block_type":"box","text":"effect, and there can be no assurance that Bond Connect will not be discontinued or abolished.","page_number":107,"box":{"x":116,"y":321,"width":711,"height":12}},{"id":"878321c8-3e27-48db-b0f8-84307fbafb7a","block_type":"box","text":"Furthermore, the securities regimes and legal systems of China and Hong Kong differ significantly and","page_number":107,"box":{"x":117,"y":337,"width":764,"height":12}},{"id":"73ae80ca-2ad0-4faa-839e-8c54cecba622","block_type":"box","text":"issues may arise based on these differences. In the event that the relevant authorities suspend","page_number":107,"box":{"x":117,"y":352,"width":709,"height":13}},{"id":"83f6f391-c943-4753-916b-0d13ae871a60","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":107,"box":{"x":116,"y":368,"width":762,"height":12}},{"id":"1d014c8e-f40a-4b74-b4b0-2f64a389fd21","block_type":"box","text":"Interbank Bond Market will be adversely affected and limited. In such event, the Fund’s ability to","page_number":107,"box":{"x":117,"y":384,"width":716,"height":12}},{"id":"9c8f7bd7-4934-43a2-809a-107088fac809","block_type":"box","text":"achieve its investment objective will be negatively affected and, after exhausting other trading","page_number":107,"box":{"x":116,"y":399,"width":699,"height":12}},{"id":"b63d3610-b3ce-437c-a3d3-f67767ccc859","block_type":"box","text":"alternatives, the Fund may suffer substantial losses as a result. Further, if Bond Connect is not","page_number":107,"box":{"x":116,"y":415,"width":707,"height":12}},{"id":"83abbf13-dd71-4561-9137-9f161865a734","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":107,"box":{"x":116,"y":430,"width":745,"height":12}},{"id":"e2e830b6-6e52-423a-880a-38d9e0de74b9","block_type":"box","text":"manner, which could adversely affect the Fund’s performance.","page_number":107,"box":{"x":117,"y":446,"width":467,"height":12}},{"id":"1591defd-8017-4c38-9e9c-4d5843e8cafa","block_type":"box","text":"Trading through Bond Connect is performed through newly developed trading platforms and","page_number":107,"box":{"x":116,"y":477,"width":687,"height":13}},{"id":"1bbcd66b-9242-4ffe-82e1-4202eeca0d64","block_type":"box","text":"operational systems. There is no assurance that such systems will function properly or will continue to","page_number":107,"box":{"x":116,"y":493,"width":761,"height":12}},{"id":"48bf93bb-0d56-4f5b-8502-66e59a2811df","block_type":"box","text":"be adapted to changes and developments in the market. In the event that the relevant systems fail to","page_number":107,"box":{"x":117,"y":509,"width":753,"height":12}},{"id":"e1a6d770-3bd7-4618-98a1-6c7bdc78e1ab","block_type":"box","text":"function properly, trading through Bond Connect may be disrupted. A Fund’s ability to trade through","page_number":107,"box":{"x":116,"y":524,"width":744,"height":12}},{"id":"508c8c3e-f6b0-4937-a072-a90a0e9b3475","block_type":"box","text":"Bond Connect (and hence to pursue its investment strategy) may therefore be adversely affected. In","page_number":107,"box":{"x":117,"y":540,"width":749,"height":12}},{"id":"8dc3339b-c992-4bcd-b2a7-e54256100049","block_type":"box","text":"addition, where a Fund invests in the China Interbank Bond Market through Bond Connect, it may be","page_number":107,"box":{"x":116,"y":555,"width":753,"height":12}},{"id":"914946ce-0f64-4c5a-ab86-f59b9083b3e1","block_type":"box","text":"subject to risks of delays inherent in the order placing and/or settlement systems.","page_number":107,"box":{"x":116,"y":571,"width":607,"height":12}},{"id":"fcca3e75-8f74-40bd-b2c7-156468983cec","block_type":"box","text":"Bond Connect trades are settled in Chinese currency, the RMB, which is currently restricted and not","page_number":107,"box":{"x":117,"y":602,"width":746,"height":13}},{"id":"414ea88a-4e58-49ac-9d94-d75a1752368b","block_type":"box","text":"freely convertible. As a result, a Fund will be exposed to currency risk, and it cannot be guaranteed","page_number":107,"box":{"x":116,"y":618,"width":740,"height":12}},{"id":"5b550f77-e542-4264-b76e-b156ba672617","block_type":"box","text":"that investors will have timely access to a reliable supply of RMB.","page_number":107,"box":{"x":116,"y":634,"width":490,"height":12}},{"id":"510ba4d9-fc1b-4023-a06f-2ac73215dd5d","block_type":"box","text":"Tax Risk — Withholding Income Tax Risk.","page_number":107,"box":{"x":118,"y":666,"width":310,"height":12}},{"id":"fc8e6f20-4d66-4067-83ce-a72455d2de64","block_type":"box","text":"According to PRC tax regulations, a 10% withholding income tax is imposed on PRC sourced","page_number":107,"box":{"x":116,"y":689,"width":692,"height":12}},{"id":"43517994-f42a-4682-a53c-7551ce780565","block_type":"box","text":"dividends and interests from non-government bonds paid to a non-PRC tax resident enterprise, unless","page_number":107,"box":{"x":116,"y":705,"width":760,"height":12}},{"id":"14248825-43bc-4e81-a8a6-4009604a56a2","block_type":"box","text":"the rate is reduced under an applicable tax treaty. From a technical perspective, withholding income","page_number":107,"box":{"x":116,"y":720,"width":741,"height":12}},{"id":"6fcee996-a24d-4c33-b174-df5545108356","block_type":"box","text":"tax is also applicable to capital gains realized by foreign investors on the disposal of PRC equity","page_number":107,"box":{"x":116,"y":736,"width":712,"height":12}},{"id":"74114110-716f-43a6-b05b-c461f162abc7","block_type":"box","text":"interests.","page_number":107,"box":{"x":117,"y":751,"width":65,"height":10}},{"id":"dab5d45d-d8de-4e98-8c18-b7d146b2918c","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":107,"box":{"x":116,"y":783,"width":729,"height":12}},{"id":"9ddfe768-6da6-47ff-8a0a-fe198bb1adc1","block_type":"box","text":"On November 14, 2014, the Ministry of Finance (“MoF”), China Securities Regulatory Commission and","page_number":107,"box":{"x":116,"y":815,"width":761,"height":12}},{"id":"ee79d00a-b14c-45a5-82c7-00db42f0c2d3","block_type":"box","text":"the State Taxation Administration (“STA”), acting with State Council’s approval, jointly released Circular","page_number":107,"box":{"x":116,"y":831,"width":771,"height":12}},{"id":"35287b1d-cbf0-40b7-a9e8-ebdc28699f07","block_type":"box","text":"79, which temporarily exempts Qualified Foreign Institutional Investors (“QFIIs”) and Renminbi","page_number":107,"box":{"x":116,"y":846,"width":704,"height":12}},{"id":"51190270-c5ad-45e9-892f-7c61a6365de3","block_type":"box","text":"Qualified Foreign Institutional Investors (“RQFIIs”) from tax on capital gains derived from the trading of","page_number":107,"box":{"x":116,"y":862,"width":764,"height":12}},{"id":"63922aef-993d-46b7-8a9f-527a2a1efb2d","block_type":"box","text":"shares and other equity interest investments on or after November 17, 2014. Subsequently, Circulars","page_number":107,"box":{"x":116,"y":877,"width":756,"height":12}},{"id":"17f4a4a7-bf42-44d6-84ef-72197d3fb3d4","block_type":"box","text":"II-59","page_number":107,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6e8aa23b-54a7-4898-ac03-82f2468d85a3","block_type":"box","text":"NM1026U-6033243-107/221","page_number":107,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"89fa34bf-8fd9-461f-934a-8f76fead5dbe","block_type":"box","text":"81 and 127 were issued to temporarily exempt tax on capital gains derived from trading of equity","page_number":108,"box":{"x":116,"y":87,"width":721,"height":12}},{"id":"d8329319-2af3-4650-a667-436ed4641fbd","block_type":"box","text":"securities of companies domiciled in the PRC that trade on Chinese stock exchanges (“A-Shares”)","page_number":108,"box":{"x":116,"y":102,"width":735,"height":13}},{"id":"a47b5b99-34cc-4d2e-9847-41a64e56cc4e","block_type":"box","text":"through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect","page_number":108,"box":{"x":116,"y":118,"width":769,"height":12}},{"id":"dea31c84-3598-48c9-a989-8547513d122a","block_type":"box","text":"program, as applicable (each, a “Stock Connect” and collectively, “Stock Connects”). The duration of","page_number":108,"box":{"x":117,"y":134,"width":750,"height":12}},{"id":"555d481d-bcf7-4d3a-9c77-3195c207c450","block_type":"box","text":"the temporary exemptions is not stated in the circulars and is subject to termination by the PRC tax","page_number":108,"box":{"x":116,"y":149,"width":740,"height":12}},{"id":"e34cd8ba-f1d1-47c2-8bee-995857fc91e5","block_type":"box","text":"authorities with or without notice.","page_number":108,"box":{"x":116,"y":165,"width":249,"height":9}},{"id":"c87fb9d2-d147-49dc-a451-658c53dcc832","block_type":"box","text":"On November 22, 2018, the MoF and STA jointly issued Circular 108 which states that foreign","page_number":108,"box":{"x":116,"y":196,"width":703,"height":12}},{"id":"43d00a17-6b76-4515-8ddf-77154a0407ca","block_type":"box","text":"institutional investors are temporarily exempt from withholding income tax with respect to interest","page_number":108,"box":{"x":117,"y":211,"width":723,"height":12}},{"id":"af56c17f-6faf-469f-8fd1-5ffbadc80d2b","block_type":"box","text":"income on bonds derived from the PRC bond market from November 7, 2018 to November 6, 2021.","page_number":108,"box":{"x":117,"y":227,"width":745,"height":11}},{"id":"8eda0aa3-2b7b-4d22-ab88-a56b788e8fa1","block_type":"box","text":"On November 22, 2021, the MoF and STA issued Public Notice 34 to extend the temporary exemption","page_number":108,"box":{"x":116,"y":242,"width":765,"height":12}},{"id":"838720f0-835d-4675-a38a-137c11eddc9a","block_type":"box","text":"from November 7, 2021 to December 31, 2025. On January 15, 2026, it was announced via Public","page_number":108,"box":{"x":116,"y":258,"width":736,"height":12}},{"id":"920c9bf2-8eb9-4489-a539-a0fcc3100523","block_type":"box","text":"Notice No. 5 of 2026 that the exemption was extended through December 31, 2027.","page_number":108,"box":{"x":117,"y":273,"width":628,"height":12}},{"id":"86a7ab2a-75e7-43ee-8004-c0acfeeb1fb6","block_type":"box","text":"Value Added Tax (“VAT”) Risk—","page_number":108,"box":{"x":118,"y":304,"width":225,"height":12}},{"id":"10006a52-442c-4eca-a996-c51a02e7bc4d","block_type":"box","text":"k—From May 1, 2016, VAT applies to certain income derived by the","page_number":108,"box":{"x":342,"y":304,"width":501,"height":12}},{"id":"ff0d1662-cf42-4a20-874d-7eafc226c009","block_type":"box","text":"Fund, including PRC sourced interest income on non-government bonds and trading gains.","page_number":108,"box":{"x":117,"y":320,"width":681,"height":12}},{"id":"396f0848-15ad-4dde-b9ab-68e76cdf4523","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":108,"box":{"x":116,"y":351,"width":735,"height":12}},{"id":"33ec56bd-c3b3-4dec-a1b9-6ca6f98bafcd","block_type":"box","text":"VAT exemptions currently apply to capital gains from trading of QFII and RQFII products, A-Shares","page_number":108,"box":{"x":116,"y":382,"width":741,"height":12}},{"id":"40d6ab62-4d0a-409d-9305-ad1f63dbf733","block_type":"box","text":"traded on the Stock Connects and debt securities traded in the China Interbank Bond Market.","page_number":108,"box":{"x":116,"y":397,"width":699,"height":10}},{"id":"576b1839-3ab8-4ed6-9756-dc14e50e8411","block_type":"box","text":"On November 7, 2018, the MoF and STA jointly issued Circular 108 which states that foreign","page_number":108,"box":{"x":116,"y":428,"width":694,"height":12}},{"id":"d17991a7-4c47-442b-b794-328f7194e415","block_type":"box","text":"institutional investors are temporarily exempt from VAT with respect to interest income on bonds","page_number":108,"box":{"x":117,"y":444,"width":718,"height":12}},{"id":"d4775c7a-c5ed-4e08-bec2-cc8ccfab1f71","block_type":"box","text":"derived from the PRC bond market from November 7, 2018 to November 6, 2021. On November 22,","page_number":108,"box":{"x":116,"y":459,"width":750,"height":11}},{"id":"65a8d715-b18b-46ce-a8f8-5f462787db7a","block_type":"box","text":"2021, the MoF and STA jointly issued Public Notice 34 to extend the temporary exemption from","page_number":108,"box":{"x":116,"y":475,"width":714,"height":12}},{"id":"c87dfbde-07f3-415d-b12a-50c11e0edcd8","block_type":"box","text":"November 7, 2021 to December 31, 2025. However, on July 31, 2025, the MoF and STA jointly issued","page_number":108,"box":{"x":117,"y":490,"width":764,"height":12}},{"id":"afb6bb31-cc30-453d-8041-f55c07d048d3","block_type":"box","text":"Public Notice No 4 of 2025, stating that VAT will apply with respect to interest income derived from","page_number":108,"box":{"x":117,"y":506,"width":735,"height":12}},{"id":"394aa2ba-8670-4c46-bcd6-66b459051618","block_type":"box","text":"treasury bonds, local government bonds and financial bonds issued on or after August 8, 2025. It is","page_number":108,"box":{"x":116,"y":521,"width":742,"height":12}},{"id":"7519ee90-ad5e-46ae-a85f-87569e6dcf5f","block_type":"box","text":"understood that Public Notice No 4 of 2025 does not supersede the afore-mentioned exemption for","page_number":108,"box":{"x":117,"y":537,"width":739,"height":12}},{"id":"158e6486-7a21-44d4-a4b9-0a819edcf4a0","block_type":"box","text":"foreign institutional investors. This exemption was extended through December 31, 2027.","page_number":108,"box":{"x":116,"y":552,"width":668,"height":12}},{"id":"4f72b3ed-d951-4b14-92fe-95441529c466","block_type":"box","text":"Any changes in PRC tax law, future clarifications thereof, and/or subsequent retroactive enforcement","page_number":108,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"639b599f-76a5-48fe-a942-12430346d055","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":108,"box":{"x":117,"y":599,"width":761,"height":12}},{"id":"847bc3c5-0db8-4863-86f7-3db88cd8561c","block_type":"box","text":"PRC tax authorities may withdraw the temporary tax exemptions in the future and seek to collect taxes","page_number":108,"box":{"x":117,"y":614,"width":765,"height":12}},{"id":"35e9ca81-eac4-4f8a-878a-d3daa2e03cef","block_type":"box","text":"realized on the sale of A-Shares or PCR sourced interest income on non-government bonds received","page_number":108,"box":{"x":117,"y":630,"width":756,"height":12}},{"id":"49dc44b1-47d4-467c-8e2f-8d1fb0b7ec62","block_type":"box","text":"by the Fund without giving any prior notice. If the temporary tax exemptions are withdrawn, any taxes","page_number":108,"box":{"x":117,"y":645,"width":755,"height":12}},{"id":"b52191d9-3638-421f-b0f3-b903c48124f2","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":108,"box":{"x":117,"y":661,"width":750,"height":12}},{"id":"6b8f79e3-968d-4278-929b-8f7e2f7ec2da","block_type":"box","text":"its net asset value. As with any net asset value adjustment, investors may be advantaged or","page_number":108,"box":{"x":117,"y":676,"width":683,"height":12}},{"id":"1a276380-9de5-4500-ade8-15a5de7c452f","block_type":"box","text":"disadvantaged depending on when the investors purchased and/or sold the shares of the Fund. There","page_number":108,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"4e4c3d16-79b9-41cb-8257-6e8adeac5f65","block_type":"box","text":"will be no retrospective restatement of the Fund’s net asset value.","page_number":108,"box":{"x":116,"y":707,"width":488,"height":12}},{"id":"5e6fdbec-0c87-47ad-8ff7-575e8e184f3e","block_type":"box","text":"BlackRock will keep the provisioning policy for tax liability under review and may, in its discretion from","page_number":108,"box":{"x":117,"y":738,"width":752,"height":12}},{"id":"3d5126bd-a13c-4d0d-b5d3-250c32718169","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":108,"box":{"x":116,"y":754,"width":751,"height":12}},{"id":"103a167c-05fa-442f-ad85-774f8203a724","block_type":"box","text":"as further clarified by the PRC in notifications.","page_number":108,"box":{"x":116,"y":769,"width":339,"height":12}},{"id":"8bbcdfa1-4b1d-40c1-a2bd-86c7a1ecc59c","block_type":"box","text":"Investment in Other Investment Companies.","page_number":108,"box":{"x":116,"y":800,"width":350,"height":12}},{"id":"8376f5eb-ed4a-488a-b7d0-1642e90f0208","block_type":"box","text":"Each Fund may, subject to applicable law, invest in","page_number":108,"box":{"x":474,"y":800,"width":378,"height":12}},{"id":"bfb50fb0-7fa9-4a6d-8f71-19738114ff4a","block_type":"box","text":"other investment companies (including investment companies managed by BlackRock and its","page_number":108,"box":{"x":116,"y":816,"width":694,"height":12}},{"id":"7a934f06-fb4f-4343-9c12-ab6b514642f2","block_type":"box","text":"affiliates), including money market funds and ETFs, which are typically open-end funds or unit","page_number":108,"box":{"x":116,"y":831,"width":701,"height":12}},{"id":"2956f726-a7a1-4e3c-903f-4879aa61318f","block_type":"box","text":"investment trusts listed on a stock exchange. Under Section 12(d)(1)(A) of the Investment Company","page_number":108,"box":{"x":117,"y":847,"width":748,"height":12}},{"id":"7d6b5a2e-2aa2-429c-9a7f-5a9d9d02c34d","block_type":"box","text":"Act, however, a Fund may invest up to 10% of its total assets in securities of other investment","page_number":108,"box":{"x":116,"y":862,"width":701,"height":12}},{"id":"cf55c16f-f1e9-4f89-891d-9b7149deaa81","block_type":"box","text":"companies (measured at the time of such investment). In addition, under Section 12(d)(1)(A) of the","page_number":108,"box":{"x":116,"y":878,"width":739,"height":12}},{"id":"3eecc85b-397c-4b47-b883-4714546e9eba","block_type":"box","text":"II-60","page_number":108,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2bf705c5-22d3-4ccf-84da-c25389e5eaf2","block_type":"box","text":"NM1026U-6033243-108/221","page_number":108,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"fe929b8c-b2e8-439b-901f-bd6901933324","block_type":"box","text":"Investment Company Act a Fund may not acquire securities of an investment company if such","page_number":109,"box":{"x":117,"y":87,"width":703,"height":12}},{"id":"0d10abc8-6eef-4258-adf1-7e1b60da8602","block_type":"box","text":"acquisition would cause the Fund to own more than 3% of the total outstanding voting stock of such","page_number":109,"box":{"x":116,"y":102,"width":745,"height":13}},{"id":"6a47185b-a8fc-4bd4-a0df-e7ce5742072b","block_type":"box","text":"investment company and a Fund may not invest in another investment company if such investment","page_number":109,"box":{"x":117,"y":118,"width":739,"height":12}},{"id":"490dc8c2-527b-40bf-a892-94f41ca7296a","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":109,"box":{"x":116,"y":134,"width":753,"height":9}},{"id":"972d2e79-cb0c-4c69-86fc-6fcf2b1a7feb","block_type":"box","text":"investment company. (These limits do not restrict a Feeder Fund from investing all of its assets in","page_number":109,"box":{"x":117,"y":149,"width":727,"height":12}},{"id":"43da6f08-7c4f-4b8a-a0fa-e306f6586353","block_type":"box","text":"shares of its Master Portfolio.) In addition to the restrictions on investing in other investment companies","page_number":109,"box":{"x":116,"y":165,"width":771,"height":12}},{"id":"d00a2c72-e6d5-4467-948f-8289ad3a3d56","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":109,"box":{"x":116,"y":180,"width":759,"height":12}},{"id":"0ae1adaa-e6b2-4d63-9901-8d87283ce4d4","block_type":"box","text":"a registered closed-end investment company if such investment would cause the Fund and other","page_number":109,"box":{"x":116,"y":196,"width":724,"height":12}},{"id":"97794726-1bf9-4378-a92c-8c0ae613d430","block_type":"box","text":"BlackRock-advised investment companies to own more than 10% of the total outstanding voting stock","page_number":109,"box":{"x":117,"y":211,"width":760,"height":12}},{"id":"ce6a3a24-9e07-4e69-ac49-0693bffc0d1d","block_type":"box","text":"of such closed-end investment company. Pursuant to Section 12(d)(1)(G) of the Investment Company","page_number":109,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"0b15b8b1-0d54-4199-a362-cd0ce01be2f8","block_type":"box","text":"Act, these percentage limitations do not apply to investments in affiliated investment companies,","page_number":109,"box":{"x":116,"y":242,"width":719,"height":12}},{"id":"600e89a3-5dde-4007-9965-c7f99243b8f6","block_type":"box","text":"including ETFs, subject to certain conditions. In addition, a Fund may be able to rely on certain rules","page_number":109,"box":{"x":117,"y":258,"width":747,"height":12}},{"id":"054a9973-4f7c-4d5f-a7a9-fc1a5211ebe8","block_type":"box","text":"under the Investment Company Act to invest in shares of money market funds or other investment","page_number":109,"box":{"x":117,"y":273,"width":733,"height":12}},{"id":"4ff7837e-2d1d-4130-8a78-861bd920e44c","block_type":"box","text":"companies beyond the statutory limits noted above, but subject to certain conditions.","page_number":109,"box":{"x":116,"y":289,"width":633,"height":12}},{"id":"2bf95de9-f11a-4b39-a08b-2d7b48a1bf7b","block_type":"box","text":"As with other investments, investments in other investment companies are subject to market and","page_number":109,"box":{"x":116,"y":320,"width":723,"height":12}},{"id":"46d5b5a6-34f6-44a3-907e-3e64d7afca4a","block_type":"box","text":"selection risk.","page_number":109,"box":{"x":116,"y":335,"width":106,"height":10}},{"id":"29a6a306-480c-4c94-889e-d1e480f441a2","block_type":"box","text":"Shares of investment companies, such as closed-end fund investment companies, that trade on an","page_number":109,"box":{"x":116,"y":366,"width":740,"height":12}},{"id":"f9eb420c-bda1-4177-b73f-0816ceed5230","block_type":"box","text":"exchange may at times be acquired at market prices representing premiums to their NAVs. In addition,","page_number":109,"box":{"x":116,"y":382,"width":767,"height":12}},{"id":"06258d79-e790-4754-bcb7-594ff32036b8","block_type":"box","text":"investment companies held by a Fund that trade on an exchange could trade at a discount from NAV,","page_number":109,"box":{"x":117,"y":397,"width":758,"height":12}},{"id":"9be3a929-1257-4484-b0c8-b411316a9eb5","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":109,"box":{"x":116,"y":413,"width":756,"height":12}},{"id":"7abb2831-93d5-468e-8c66-c9220f08fbb2","block_type":"box","text":"exchange-traded investment company decreases below the price that the Fund paid for the shares and","page_number":109,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"f8d65c27-7b35-4e2f-b8d2-af66a25c9a15","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":109,"box":{"x":116,"y":444,"width":757,"height":12}},{"id":"112d8520-01f1-4433-b69b-c534cdcd7bdf","block_type":"box","text":"than the price at which it purchased the shares, the Fund would experience a loss.","page_number":109,"box":{"x":116,"y":459,"width":617,"height":12}},{"id":"c25c6cc3-565e-4fdd-8b1a-446303ff8b9f","block_type":"box","text":"In addition, if a Fund acquires shares in investment companies, including affiliated investment","page_number":109,"box":{"x":117,"y":490,"width":698,"height":12}},{"id":"f9dd4d75-b924-4c4f-b128-73960a288891","block_type":"box","text":"companies, shareholders would bear both their proportionate share of expenses in the Fund and,","page_number":109,"box":{"x":116,"y":506,"width":727,"height":12}},{"id":"8b91e8a5-0947-4330-a0a3-0dca6fb6b939","block_type":"box","text":"indirectly, the expenses of such investment companies. Such expenses, both at the Fund level and","page_number":109,"box":{"x":117,"y":521,"width":739,"height":12}},{"id":"9aec17c0-5204-4fe3-933a-b9679e11576f","block_type":"box","text":"acquired investment company level, would include management and advisory fees, unless such fees","page_number":109,"box":{"x":116,"y":537,"width":753,"height":12}},{"id":"53df372c-791a-40ae-94c6-8f415b66177f","block_type":"box","text":"have been waived by BlackRock. Please see the relevant Fund’s Prospectus to determine whether any","page_number":109,"box":{"x":117,"y":552,"width":769,"height":12}},{"id":"4fb56a53-ba8e-4648-872b-d50caabd8237","block_type":"box","text":"such management and advisory fees have been waived by BlackRock. Investments by a Fund in","page_number":109,"box":{"x":116,"y":568,"width":724,"height":12}},{"id":"5243b731-b8c3-47fc-bb02-9c61a43f5328","block_type":"box","text":"wholly owned investment entities created under the laws of certain countries will not be deemed an","page_number":109,"box":{"x":116,"y":583,"width":740,"height":12}},{"id":"337c9cad-7105-453d-827d-96323d493209","block_type":"box","text":"investment in other investment companies. Pursuant to guidance issued by the staff of the","page_number":109,"box":{"x":117,"y":599,"width":674,"height":12}},{"id":"05cf653f-7bcc-40b4-8a33-6db0910adaf5","block_type":"box","text":"Commission, fees and expenses of money market funds used for the investment of cash collateral","page_number":109,"box":{"x":117,"y":614,"width":733,"height":12}},{"id":"bc5a9c5e-d8e1-4770-8a79-862454189f26","block_type":"box","text":"received in connection with loans of Fund securities are not treated as “acquired fund fees and","page_number":109,"box":{"x":117,"y":630,"width":706,"height":12}},{"id":"a3703f0e-a2e7-4fa9-882c-7e8b56f8123f","block_type":"box","text":"expenses,” which are fees and expenses charged by other investment companies and pooled","page_number":109,"box":{"x":116,"y":645,"width":701,"height":12}},{"id":"6d806ca3-8cb5-4fe9-b7aa-e3452944ea24","block_type":"box","text":"investment vehicles in which a Fund invests a portion of its assets.","page_number":109,"box":{"x":117,"y":661,"width":492,"height":12}},{"id":"094cffaa-5cc3-48be-a4c1-d3a565149bcf","block_type":"box","text":"To the extent shares of a Fund are held by another f","page_number":109,"box":{"x":116,"y":692,"width":380,"height":12}},{"id":"c4119ed1-827d-472d-b37e-d4497df3af8b","block_type":"box","text":"und, the ability of the Fund it","page_number":109,"box":{"x":497,"y":692,"width":205,"height":12}},{"id":"c85e78fb-ca52-4777-8f00-3f7e8816b6a2","block_type":"box","text":"self to purchase other","page_number":109,"box":{"x":702,"y":692,"width":158,"height":12}},{"id":"86ce986c-4009-4146-b8f5-4d4d5bb4cf0f","block_type":"box","text":"funds may be limited. In addition, a fund of funds (","page_number":109,"box":{"x":116,"y":707,"width":363,"height":12}},{"id":"897de30d-8284-4a34-9f99-f3ae19922216","block_type":"box","text":"e.g.","page_number":109,"box":{"x":480,"y":710,"width":25,"height":9}},{"id":"878f8b4f-56e8-425d-8778-4c8e21a01cd6","block_type":"box","text":", an investment company that seeks to meet its","page_number":109,"box":{"x":508,"y":707,"width":342,"height":12}},{"id":"20ed6f38-92c8-47e3-b46f-1e772fc43f00","block_type":"box","text":"investment objective by investing significantly in","page_number":109,"box":{"x":117,"y":723,"width":345,"height":12}},{"id":"6bb5fe61-9a0e-490d-bd96-6e3ce620a4f8","block_type":"box","text":"other investment companies)","page_number":109,"box":{"x":468,"y":723,"width":210,"height":12}},{"id":"28fe8105-f066-4b05-bc61-3f8a86ef57dd","block_type":"box","text":"may be limited in its ability","page_number":109,"box":{"x":684,"y":723,"width":190,"height":12}},{"id":"812e7558-46da-4e5f-b7ed-8adfd62ff98e","block_type":"box","text":"to purchase underlying funds if such underlying f","page_number":109,"box":{"x":116,"y":738,"width":353,"height":12}},{"id":"554c17f5-8738-4f92-b71f-86fc9b1bd254","block_type":"box","text":"unds themselves own shares of underlying funds.","page_number":109,"box":{"x":470,"y":738,"width":358,"height":12}},{"id":"63800bd0-4e25-4c33-ac06-616a3ea17a63","block_type":"box","text":"A number of publicly traded closed-end investment companies have been organized to facilitate","page_number":109,"box":{"x":116,"y":769,"width":710,"height":12}},{"id":"2414563a-d814-40fd-b5a2-941b82e67489","block_type":"box","text":"indirect foreign investment in developing countries, and certain of such countries, such as Thailand,","page_number":109,"box":{"x":117,"y":785,"width":736,"height":12}},{"id":"51434747-ccd9-4819-9ec8-f457ed8ba9e2","block_type":"box","text":"South Korea, Chile and Brazil, have specifically authorized such funds. There also are investment","page_number":109,"box":{"x":116,"y":800,"width":725,"height":12}},{"id":"8dfab3ed-13b7-49ac-b5e4-92f94b51f5d4","block_type":"box","text":"opportunities in certain of such countries in pooled vehicles that resemble open-end investment","page_number":109,"box":{"x":116,"y":816,"width":708,"height":12}},{"id":"4b7b4f1e-1889-44f1-b901-1245e3747d3f","block_type":"box","text":"companies. The restrictions on investments in securities of investment companies set forth above may","page_number":109,"box":{"x":116,"y":831,"width":765,"height":12}},{"id":"95effab3-ecaa-466d-8df5-ac3e11a37cec","block_type":"box","text":"limit opportunities for a Fund to invest indirectly in certain developing countries.","page_number":109,"box":{"x":117,"y":847,"width":591,"height":12}},{"id":"6dcf3634-3093-4436-ad98-7294e69aff51","block_type":"box","text":"II-61","page_number":109,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"b59c372f-7d15-46e5-a1e4-3e8601d14b67","block_type":"box","text":"NM1026U-6033243-109/221","page_number":109,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"7a0fb640-9891-4f09-9ca8-9990bcc6b2a2","block_type":"box","text":"Issuer Insolvency Risk.","page_number":110,"box":{"x":116,"y":87,"width":185,"height":12}},{"id":"eb492acf-b4ec-41e9-9213-6a418bd8b37d","block_type":"box","text":"Certain Funds’ potential exposure to financially or operationally troubled","page_number":110,"box":{"x":302,"y":87,"width":543,"height":12}},{"id":"af253107-5f09-453a-95c8-49c0749f95ad","block_type":"box","text":"issuers involves a high degree of credit and market risk, which may be heightened during an economic","page_number":110,"box":{"x":117,"y":102,"width":766,"height":13}},{"id":"fcdad102-b094-4348-9ffc-fe61496de619","block_type":"box","text":"downturn or recession. Should an issuer of securities held by a Fund become involved in a bankruptcy","page_number":110,"box":{"x":116,"y":118,"width":765,"height":12}},{"id":"54b20be5-7a50-4ce1-b5ca-b19e38ea6daa","block_type":"box","text":"proceeding, reorganization or financial restructuring, a wide variety of considerations make an","page_number":110,"box":{"x":117,"y":134,"width":700,"height":12}},{"id":"3630e4db-e02e-4326-9fae-0e372da56e52","block_type":"box","text":"evaluation of the outcome of the Fund’s exposure to the issuer uncertain.","page_number":110,"box":{"x":116,"y":149,"width":548,"height":12}},{"id":"24db9eeb-3784-440d-bd8f-b5b618aad706","block_type":"box","text":"During the period of a bankruptcy proceeding, reorganization or financial restructuring, it is unlikely that","page_number":110,"box":{"x":117,"y":177,"width":769,"height":12}},{"id":"f15af8e8-7eec-4b85-832f-3dc350a915bb","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":110,"box":{"x":116,"y":192,"width":728,"height":13}},{"id":"14d0cdc8-052b-40b8-8c72-f88ed1fe1f8a","block_type":"box","text":"significant uncertainty as to whether the reorganization or restructuring will be completed, and the Fund","page_number":110,"box":{"x":116,"y":208,"width":772,"height":12}},{"id":"8550825b-f6e4-4b30-a995-fdc44ddfa8e0","block_type":"box","text":"may bear certain extraordinary expenses to protect and recover its investment. A Fund will also be","page_number":110,"box":{"x":117,"y":224,"width":735,"height":12}},{"id":"d80ee46d-43a5-48a7-82cd-97cb3742a7dd","block_type":"box","text":"subject to significant uncertainty as to when and in what manner and for what value the obligations","page_number":110,"box":{"x":116,"y":239,"width":737,"height":12}},{"id":"034628a3-0853-47bb-8203-822f94a8e593","block_type":"box","text":"evidenced by the securities of the issuer held by the Fund will eventually be satisfied.","page_number":110,"box":{"x":116,"y":254,"width":637,"height":13}},{"id":"5c06b166-9758-4159-af6e-ff86f73ae92d","block_type":"box","text":"Even if a plan of reorganization or restructuring is adopted with respect to the securities of the issuer","page_number":110,"box":{"x":117,"y":282,"width":741,"height":12}},{"id":"30514c69-08aa-45cb-8a82-67df4d30361a","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":110,"box":{"x":117,"y":298,"width":748,"height":12}},{"id":"31e479ed-a2a0-42d4-ab29-92a570f0a8c1","block_type":"box","text":"connection with such plan of reorganization or restructuring will not have a lower value or income","page_number":110,"box":{"x":116,"y":313,"width":717,"height":12}},{"id":"b1edd7dd-973e-48c0-91d8-eb37bc0a6c8b","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":110,"box":{"x":117,"y":329,"width":742,"height":12}},{"id":"594f80e7-f757-4c30-9d03-32f46b696551","block_type":"box","text":"rights in any collateral or may have its claims or security interest in any collateral challenged, disallowed","page_number":110,"box":{"x":117,"y":345,"width":767,"height":11}},{"id":"88cc2af0-73ff-48cd-940d-5fe1d240d01a","block_type":"box","text":"or subordinated to the claims or security interests of other creditors. In addition, amendments to the U.S.","page_number":110,"box":{"x":116,"y":360,"width":772,"height":12}},{"id":"55c0aff4-f582-4e30-b646-8ac54ee933b8","block_type":"box","text":"Bankruptcy Code or other relevant laws could alter the expected outcome or introduce greater","page_number":110,"box":{"x":117,"y":375,"width":695,"height":12}},{"id":"a30658b7-dc14-4cd2-b7aa-df7514908477","block_type":"box","text":"uncertainty regarding the outcome of the Fund’s securities holdings in the issuer. In a bankruptcy","page_number":110,"box":{"x":117,"y":391,"width":716,"height":12}},{"id":"a5612844-a132-42a4-ac59-929b897ad0a5","block_type":"box","text":"proceeding, a reorganization or restructuring, the securities of the issuer held by a Fund could be","page_number":110,"box":{"x":117,"y":406,"width":716,"height":12}},{"id":"e84f3f32-3de4-47c9-a0ee-4b1c2190cfa3","block_type":"box","text":"re-characterized or a Fund may receive different securities or other assets, including equity securities.","page_number":110,"box":{"x":117,"y":422,"width":752,"height":12}},{"id":"79568dce-a62b-4168-b8a2-140d809a012b","block_type":"box","text":"These types of equity securities include, but are not limited to: common stock; preferred stock (including","page_number":110,"box":{"x":116,"y":437,"width":768,"height":12}},{"id":"e15b4619-ea84-4cf3-b564-487df60123cf","block_type":"box","text":"convertible preferred stock); bonds, notes and debentures convertible into common or preferred stock;","page_number":110,"box":{"x":116,"y":453,"width":756,"height":12}},{"id":"999a8ea7-6a0f-4b36-8529-945fe71c6cb2","block_type":"box","text":"stock purchase warrants and rights; equity interests in trusts; and depositary receipts. Equity securities","page_number":110,"box":{"x":116,"y":469,"width":759,"height":11}},{"id":"09fb158c-e018-4a17-a248-1c2e7774e28f","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":110,"box":{"x":116,"y":484,"width":764,"height":12}},{"id":"ac583c78-fe52-44e2-812b-bb3d91ef5b65","block_type":"box","text":"Holders of equity securities are subject to more risk than holders of debt securities because the status of","page_number":110,"box":{"x":117,"y":499,"width":771,"height":13}},{"id":"b367e89e-c5f7-4725-b744-6330bfa71229","block_type":"box","text":"equity holders is subordinate to debtholders in an issuer’s capital structure. The value of equity","page_number":110,"box":{"x":116,"y":515,"width":701,"height":12}},{"id":"6a3867ff-b6cf-4539-9a85-6f000cc9e6b4","block_type":"box","text":"securities received by a Fund could decline if the financial condition of the issuer deteriorates or if","page_number":110,"box":{"x":116,"y":530,"width":721,"height":13}},{"id":"092a2231-b37d-4659-9db5-57230e594c46","block_type":"box","text":"overall market and economic conditions, or conditions within the issuer’s region or industry, deteriorate.","page_number":110,"box":{"x":116,"y":546,"width":764,"height":12}},{"id":"f1149e5f-4038-40f2-b73a-db524b194179","block_type":"box","text":"To the extent that a Fund receives other assets in connection with a bankruptcy proceeding,","page_number":110,"box":{"x":116,"y":574,"width":681,"height":12}},{"id":"587013a7-b300-42de-956b-005e7c93db19","block_type":"box","text":"reorganization or financial restructuring, the Fund may also be subject to additional risks associated with","page_number":110,"box":{"x":117,"y":589,"width":770,"height":12}},{"id":"d127e210-d8d1-40f1-a5e6-d06cb2a7c959","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":110,"box":{"x":116,"y":605,"width":730,"height":12}},{"id":"3bff154c-b089-4ce2-858b-c55513283ab0","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":110,"box":{"x":117,"y":620,"width":756,"height":12}},{"id":"50501ddd-42e8-4538-ae66-26f4e6e6939e","block_type":"box","text":"the issuer. A Fund may receive such interests in loans to the extent permitted by the Investment","page_number":110,"box":{"x":116,"y":636,"width":710,"height":12}},{"id":"a10d5afd-02ac-459b-b130-b03748514f3f","block_type":"box","text":"Company Act.","page_number":110,"box":{"x":117,"y":651,"width":108,"height":12}},{"id":"5d183d07-a669-4549-a440-26643ac18ace","block_type":"box","text":"Securities or other assets received in a reorganization or restructuring typically entail a higher degree","page_number":110,"box":{"x":116,"y":679,"width":750,"height":12}},{"id":"c6142755-15ca-4985-aa72-94d5fbc90c54","block_type":"box","text":"of risk than investments in securities of issuers that have not undergone a reorganization or","page_number":110,"box":{"x":116,"y":695,"width":679,"height":12}},{"id":"8bf30519-555f-44de-8a8a-73f5023a0505","block_type":"box","text":"restructuring and may be subject to heavy selling or downward pricing pressure after completion of the","page_number":110,"box":{"x":117,"y":710,"width":760,"height":12}},{"id":"59f42357-4cfc-4f05-a245-7dca8d691793","block_type":"box","text":"reorganization or restructuring. The post-reorganization/restructuring assets and securities may also be","page_number":110,"box":{"x":117,"y":726,"width":766,"height":12}},{"id":"7836f1f5-a3c5-449d-bb05-6b1e880ddf80","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":110,"box":{"x":117,"y":741,"width":711,"height":12}},{"id":"56b9f9e2-c332-4306-a948-1679064749e7","block_type":"box","text":"reorganization or restructuring with respect to securities of the issuer held by a Fund, the Fund also","page_number":110,"box":{"x":117,"y":757,"width":736,"height":12}},{"id":"17e18d5e-4638-4ae5-8b76-615d33363aac","block_type":"box","text":"may be restricted from disposing such securities for a period of time. If a Fund becomes involved in","page_number":110,"box":{"x":117,"y":772,"width":735,"height":12}},{"id":"c3e0407e-43dd-42a4-8c22-026d62b8c6b4","block_type":"box","text":"such proceedings, the Fund may have more active participation in the affairs of the issuer than that","page_number":110,"box":{"x":116,"y":788,"width":735,"height":12}},{"id":"aca5c889-6960-43b6-aa33-2ce65a6c9ff6","block_type":"box","text":"assumed generally by an investor.","page_number":110,"box":{"x":116,"y":803,"width":254,"height":12}},{"id":"6df3e607-54a2-4915-a80d-29b50e088f75","block_type":"box","text":"Lease Obligations.","page_number":110,"box":{"x":116,"y":831,"width":148,"height":12}},{"id":"ad6f2815-7dc5-4a38-a8e7-6cbc94d3dd35","block_type":"box","text":"A Fund may hold participation certificates in a lease, an installment purchase","page_number":110,"box":{"x":265,"y":831,"width":581,"height":12}},{"id":"8b80d0cc-7202-4b0b-bbb9-4844aee8f701","block_type":"box","text":"contract, or a conditional sales contract (“lease obligations”). The Manager will monitor the credit","page_number":110,"box":{"x":116,"y":847,"width":721,"height":12}},{"id":"a5a3b206-4413-41ba-b0c4-79ba7d384ba8","block_type":"box","text":"standing of each borrower and each entity providing credit support and/or a put option relating to lease","page_number":110,"box":{"x":116,"y":862,"width":766,"height":12}},{"id":"627d63b1-e7c3-4cae-b7c2-27d6c8caef6b","block_type":"box","text":"obligations.","page_number":110,"box":{"x":116,"y":878,"width":89,"height":12}},{"id":"63af8522-a611-4353-9fea-7a32fec778ed","block_type":"box","text":"II-62","page_number":110,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"c8795469-4aaa-4e83-80ad-9cb380b9c669","block_type":"box","text":"NM1026U-6033243-110/221","page_number":110,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"8b3b67a0-8f64-4f12-89c4-19fef44f2d03","block_type":"box","text":"Life Settlement Investments.","page_number":111,"box":{"x":116,"y":87,"width":227,"height":10}},{"id":"05dd49a1-6ee8-407a-b628-49be7c6069f4","block_type":"box","text":"A Fund may invest in life settlements, which are sales to third parties,","page_number":111,"box":{"x":344,"y":87,"width":525,"height":12}},{"id":"6eee68d7-301f-48ba-9197-055b0093918b","block_type":"box","text":"such as the Fund, of existing life insurance contracts for more than their cash surrender value but less","page_number":111,"box":{"x":116,"y":102,"width":763,"height":13}},{"id":"67888afd-2755-4671-8c2d-d084e1349ceb","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":111,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"686a2999-0daf-4d01-b615-e63e2f6b0b08","block_type":"box","text":"policy premiums in return for the expected receipt of the net benefit as the beneficiary under the policy.","page_number":111,"box":{"x":117,"y":134,"width":767,"height":12}},{"id":"87d99042-7e57-4852-bf85-f2a7d016866f","block_type":"box","text":"Investments in these contracts involve certain risks, including liquidity risk, credit risk of the insurance","page_number":111,"box":{"x":117,"y":149,"width":756,"height":12}},{"id":"4f5227b5-b35c-418b-85ac-0c09dae2e036","block_type":"box","text":"company, and inaccurate estimations of life expectancy of the insured individuals (viators). These","page_number":111,"box":{"x":116,"y":165,"width":729,"height":12}},{"id":"4ee12ebe-fd42-4c07-bdaf-e462297a9554","block_type":"box","text":"policies may be considered illiquid because they are bought and sold in a secondary market through","page_number":111,"box":{"x":117,"y":180,"width":748,"height":12}},{"id":"e65aaa87-c3ce-4f7e-b60b-16565bd61a98","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":111,"box":{"x":117,"y":196,"width":760,"height":12}},{"id":"9b602e30-c240-4629-9d44-1beaa5e1d0ef","block_type":"box","text":"may receive reduced or no benefits under the contract. A Fund seeks to minimize credit risk by","page_number":111,"box":{"x":117,"y":211,"width":708,"height":12}},{"id":"aea7f338-af8a-45fd-8435-be2cb71e250c","block_type":"box","text":"investing in policies issued by a diverse range of highly-rated insurance carriers. Furthermore, a Fund","page_number":111,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"03d81f0a-8cec-4de5-bfa6-3bb352e69779","block_type":"box","text":"may encounter losses on its investments if there is an inaccurate estimation of the life expectancies of","page_number":111,"box":{"x":117,"y":242,"width":761,"height":12}},{"id":"092b5f8a-04c2-43df-94fe-2a29479a3bd5","block_type":"box","text":"viators. A Fund intends to reduce this life expectancy risk by investing only in contracts where the life","page_number":111,"box":{"x":116,"y":258,"width":754,"height":12}},{"id":"085234ec-5dfc-4649-9a01-933066730329","block_type":"box","text":"expectancy was reviewed by an experienced actuary, as well as by diversifying its investments across","page_number":111,"box":{"x":116,"y":273,"width":763,"height":12}},{"id":"ac0d8d63-7b30-42ec-91c9-d39c0b316ad7","block_type":"box","text":"viators of varying ages and medical profiles. In addition, it is unclear whether the income from life","page_number":111,"box":{"x":116,"y":289,"width":725,"height":12}},{"id":"f7c7bce9-bcca-4a91-b448-7c8fa83c63f8","block_type":"box","text":"settlements is qualifying income for purposes of the IRS 90% gross income test a Fund must satisfy","page_number":111,"box":{"x":116,"y":304,"width":746,"height":12}},{"id":"41adf955-c02a-4b30-a491-78e468cf9048","block_type":"box","text":"each year to qualify as a regulated investment company. A Fund intends to monitor its investments to","page_number":111,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"bfd2c9b0-e8d6-445e-a79d-cede964654f8","block_type":"box","text":"ensure that the Fund remains qualified as a regulated investment company.","page_number":111,"box":{"x":116,"y":335,"width":567,"height":12}},{"id":"17963770-8149-410d-b94a-4838a7f57500","block_type":"box","text":"Liquidity Risk Management.","page_number":111,"box":{"x":116,"y":366,"width":221,"height":12}},{"id":"24ee8881-4b34-44dc-b321-7c3367bb113f","block_type":"box","text":"Rule 22e-4 under the Investment Company Act (the “Liquidity Rule”)","page_number":111,"box":{"x":338,"y":366,"width":517,"height":12}},{"id":"1b5a9790-426e-4b6d-8e41-c2802ef6d08c","block_type":"box","text":"requires open-end funds, such as the Funds, to adopt a liquidity risk management program and","page_number":111,"box":{"x":117,"y":382,"width":712,"height":12}},{"id":"e31db6d7-664e-4d00-be50-261c07c6a8ea","block_type":"box","text":"enhance disclosures regarding fund liquidity. As required by the Liquidity Rule, the Funds have","page_number":111,"box":{"x":116,"y":397,"width":709,"height":12}},{"id":"fd6b0f94-0c91-480f-876a-9e40180cd5c7","block_type":"box","text":"implemented a liquidity risk management program (the “Liquidity Program”), and the Boards of","page_number":111,"box":{"x":117,"y":413,"width":704,"height":12}},{"id":"ac415ee5-b0f5-404f-a0b7-be3603f9f4d7","block_type":"box","text":"Directors of the Funds, including a majority of the independent Directors, have appointed the Manager","page_number":111,"box":{"x":117,"y":428,"width":762,"height":12}},{"id":"a9f7b4d4-f126-47c2-86a9-f0ad5c9b3e2d","block_type":"box","text":"as the liquidity risk program administrator of the Liquidity Program. Under the Liquidity Program, the","page_number":111,"box":{"x":116,"y":444,"width":745,"height":12}},{"id":"c72642e5-dbc0-4b07-ad9f-1bcde53ba305","block_type":"box","text":"Manager assesses, manages, and periodically reviews each Fund’s liquidity risk and classifies each","page_number":111,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"9376786a-9cb3-4dfc-b441-dfae17a3d601","block_type":"box","text":"investment held by a Fund as a “highly liquid investment,” “moderately liquid investment,” “less liquid","page_number":111,"box":{"x":117,"y":475,"width":750,"height":12}},{"id":"c9217dce-15c0-42fb-b6e0-7b2f67023aca","block_type":"box","text":"investment” or “illiquid investment.” The Liquidity Rule defines “liquidity risk” as the risk that a Fund","page_number":111,"box":{"x":117,"y":490,"width":736,"height":12}},{"id":"dfaa1170-4bcf-4cf5-9b7d-70dc6e9a575c","block_type":"box","text":"could not meet requests to redeem shares issued by the Fund without significant dilution of the","page_number":111,"box":{"x":116,"y":506,"width":709,"height":12}},{"id":"e560bdd9-56d8-4d56-9bf9-735ff6e507a5","block_type":"box","text":"remaining investors’ interests in the Fund. The liquidity of a Fund’s portfolio investments is determined","page_number":111,"box":{"x":117,"y":521,"width":762,"height":12}},{"id":"f2063cc2-04ae-4667-ab8d-05f428fecd86","block_type":"box","text":"based on relevant market, trading and investment-specific considerations under the Liquidity Program.","page_number":111,"box":{"x":117,"y":537,"width":764,"height":12}},{"id":"4028d675-3896-47dc-b9a8-d2e4be6d1827","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":111,"box":{"x":116,"y":552,"width":747,"height":12}},{"id":"2b918084-92a8-4183-8d81-5c2f6f13183f","block_type":"box","text":"Fund can expect to be exposed to greater liquidity risk.","page_number":111,"box":{"x":117,"y":568,"width":411,"height":12}},{"id":"e2be0aca-a415-4b6c-b2b4-7b5d483f017d","block_type":"box","text":"Master Limited Partnerships.","page_number":111,"box":{"x":116,"y":599,"width":230,"height":12}},{"id":"7768e71a-b220-4499-a3cf-5d911425813a","block_type":"box","text":"Certain Funds may invest in publicly traded master limited partnerships","page_number":111,"box":{"x":347,"y":599,"width":538,"height":12}},{"id":"5c8b21d0-b97b-41c4-9ef8-7197829f81c7","block_type":"box","text":"(“MLPs”) which are limited partnerships or limited liability companies taxable as partnerships. MLPs","page_number":111,"box":{"x":117,"y":614,"width":741,"height":12}},{"id":"c4c44d87-64da-4597-bd75-41fabff684c2","block_type":"box","text":"may derive income and gains from the exploration, development, mining or production, processing,","page_number":111,"box":{"x":117,"y":630,"width":739,"height":12}},{"id":"3b939b25-c46f-410f-b5db-d729113efca2","block_type":"box","text":"refining, transportation (including pipelines transporting gas, oil, or products thereof), or the marketing","page_number":111,"box":{"x":117,"y":645,"width":758,"height":12}},{"id":"de3ed8b5-8c27-4f29-8c55-22f7efefc8ee","block_type":"box","text":"of any mineral or natural resources. MLPs generally have two classes of owners, the general partner","page_number":111,"box":{"x":116,"y":661,"width":748,"height":12}},{"id":"a3721413-cce4-4645-8b8d-3bab5e88f5a0","block_type":"box","text":"and limited partners. When investing in an MLP, a Fund intends to purchase publicly traded common","page_number":111,"box":{"x":116,"y":676,"width":747,"height":12}},{"id":"a0d825bc-a03d-4d6d-ac0d-5c94ae9ed564","block_type":"box","text":"units issued to limited partners of the MLP. The general partner is typically owned by a major energy","page_number":111,"box":{"x":117,"y":692,"width":744,"height":12}},{"id":"5a3c5e75-ad66-48e8-8cd1-0eee30f63283","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":111,"box":{"x":116,"y":707,"width":764,"height":12}},{"id":"138cbfff-2636-4bf1-aee7-80931cf036e6","block_type":"box","text":"of such parties. The general partner may be structured as a private or publicly traded corporation or","page_number":111,"box":{"x":116,"y":723,"width":739,"height":12}},{"id":"01b2d5cf-3497-4d33-8e43-1a0b1e4debda","block_type":"box","text":"other entity. The general partner typically controls the operations and management of the MLP through","page_number":111,"box":{"x":116,"y":738,"width":762,"height":12}},{"id":"4bcd39fa-378d-4aac-bd4c-cc879010f597","block_type":"box","text":"an up to 2% equity interest in the MLP plus, in many cases, ownership of common units and","page_number":111,"box":{"x":116,"y":754,"width":683,"height":12}},{"id":"b911ae9d-b7ef-4709-9b1c-6a8f6233302c","block_type":"box","text":"subordinated units. Limited partners own the remainder of the partnership, through ownership of","page_number":111,"box":{"x":116,"y":769,"width":714,"height":12}},{"id":"c09e8125-b8a0-430c-b8e8-da44bb449d0c","block_type":"box","text":"common units, and have a limited role in the partnership’s operations and management.","page_number":111,"box":{"x":116,"y":785,"width":652,"height":12}},{"id":"0a0a88bb-0806-4546-8329-a914b5ad4e9d","block_type":"box","text":"MLPs are typically structured such that common units and general partner interests have first priority to","page_number":111,"box":{"x":117,"y":816,"width":764,"height":12}},{"id":"3956dc64-d39a-4301-ac0c-b5569b86bc3c","block_type":"box","text":"receive quarterly cash distributions up to an established minimum amount (“minimum quarterly","page_number":111,"box":{"x":117,"y":831,"width":706,"height":12}},{"id":"f96601ba-f5f0-4673-8ecc-a01bb599274c","block_type":"box","text":"distributions” or “MQD”). Common and general partner interests also accrue arrearages in distributions","page_number":111,"box":{"x":116,"y":847,"width":767,"height":12}},{"id":"6101e886-1c24-4676-96a8-8665b367dd8c","block_type":"box","text":"to the extent the MQD is not paid. Once common and general partner interests have been paid,","page_number":111,"box":{"x":116,"y":862,"width":714,"height":12}},{"id":"6b4cf464-6314-4cfa-ad72-811ed0aaa8b5","block_type":"box","text":"subordinated units receive distributions of up to the MQD; however, subordinated units do not accrue","page_number":111,"box":{"x":116,"y":878,"width":755,"height":12}},{"id":"99d59038-3d3a-4ea8-9be6-7e3e9c026547","block_type":"box","text":"II-63","page_number":111,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"4261108b-7eae-493e-a7ee-c0fd4457237c","block_type":"box","text":"NM1026U-6033243-111/221","page_number":111,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"8298601c-b30a-46f1-a9f5-c1a1ca05af35","block_type":"box","text":"arrearages. Distributable cash in excess of the MQD paid to both common and subordinated units is","page_number":112,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"a3ce9327-3b9e-42da-8eb8-eb4a5b145588","block_type":"box","text":"distributed to both common and subordinated units generally on a pro rata basis. The general partner","page_number":112,"box":{"x":116,"y":103,"width":757,"height":12}},{"id":"4808f0d0-1a7f-4279-9ea2-b628f2ff8a1d","block_type":"box","text":"is also eligible to receive incentive distributions if the general partner operates the business in a","page_number":112,"box":{"x":117,"y":118,"width":712,"height":12}},{"id":"d343303a-8f6a-43ac-9e86-566fca810501","block_type":"box","text":"manner which results in distributions paid per common unit surpassing specified target levels. As the","page_number":112,"box":{"x":117,"y":134,"width":751,"height":12}},{"id":"457eadf3-398d-46ab-93f8-a263381a28ff","block_type":"box","text":"general partner increases cash distributions to the limited partners, the general partner receives an","page_number":112,"box":{"x":116,"y":149,"width":739,"height":12}},{"id":"add416a5-1690-4224-b72f-3361747a7c24","block_type":"box","text":"increasingly higher percentage of the incremental cash distributions. A common arrangement provides","page_number":112,"box":{"x":117,"y":165,"width":764,"height":12}},{"id":"d897cb29-7eee-4528-b068-7dd0b7f9fab0","block_type":"box","text":"that the general partner can reach a tier where it receives 50% of every incremental dollar paid to","page_number":112,"box":{"x":116,"y":180,"width":727,"height":12}},{"id":"0f27679d-f04b-4b8c-a114-6c66e0a4ff5b","block_type":"box","text":"common and subordinated unit holders. These incentive distributions encourage the general partner to","page_number":112,"box":{"x":116,"y":196,"width":767,"height":12}},{"id":"2638903e-a38f-4247-912d-3ad118079abc","block_type":"box","text":"streamline costs, increase capital expenditures and acquire assets in order to increase the","page_number":112,"box":{"x":116,"y":211,"width":676,"height":12}},{"id":"ea5f3974-5904-4cb7-9981-e1415059eb7f","block_type":"box","text":"partnership’s cash flow and raise the quarterly cash distribution in order to reach higher tiers. Such","page_number":112,"box":{"x":117,"y":227,"width":736,"height":12}},{"id":"6bb09abc-2cdd-4186-bb45-15a0c35ca58e","block_type":"box","text":"results benefit all security holders of the MLP.","page_number":112,"box":{"x":117,"y":242,"width":343,"height":12}},{"id":"08d23d7e-7465-4159-8282-473b98d8ba50","block_type":"box","text":"MLP common units represent a limited partnership interest in the MLP. Common units are listed and","page_number":112,"box":{"x":117,"y":276,"width":748,"height":12}},{"id":"6100e44c-13e2-4851-9fe7-684cb67c20ca","block_type":"box","text":"traded on U.S. securities exchanges, with their value fluctuating predominantly based on prevailing","page_number":112,"box":{"x":116,"y":291,"width":739,"height":12}},{"id":"57ef9037-49dd-4b8d-981e-259b4c283f92","block_type":"box","text":"market conditions and the success of the MLP. Certain Funds intend to purchase common units in","page_number":112,"box":{"x":117,"y":307,"width":733,"height":12}},{"id":"a017245f-b4d5-4e00-8838-f38a43c83b13","block_type":"box","text":"market transactions. Unlike owners of common stock of a corporation, owners of common units have","page_number":112,"box":{"x":117,"y":322,"width":752,"height":12}},{"id":"d2cd9e01-043c-4a97-a94f-71ad63de3e24","block_type":"box","text":"limited voting rights and have no ability to annually elect directors. In the event of liquidation, common","page_number":112,"box":{"x":117,"y":338,"width":758,"height":12}},{"id":"2523289f-a120-4ba3-9df5-9fa0ee2f8024","block_type":"box","text":"units have preference over subordinated units, but not over debt or preferred units, to the remaining","page_number":112,"box":{"x":117,"y":353,"width":744,"height":12}},{"id":"b6b9c7a2-4b31-493b-94b3-e55c56d4188b","block_type":"box","text":"assets of the MLP.","page_number":112,"box":{"x":116,"y":369,"width":144,"height":9}},{"id":"4643f7e7-22f8-410e-bab3-4a9285a8422e","block_type":"box","text":"Merger Transaction Risk.","page_number":112,"box":{"x":116,"y":402,"width":200,"height":12}},{"id":"2fc3e3d5-da9a-49be-84a3-56ccb04c08df","block_type":"box","text":"A Fund may buy stock of the target company in an announced merger","page_number":112,"box":{"x":317,"y":402,"width":531,"height":12}},{"id":"03eaa5a4-4f14-4dca-9241-48a3ca6aa2a6","block_type":"box","text":"transaction prior to the consummation of such transaction. In that circumstance, a Fund would expect","page_number":112,"box":{"x":116,"y":418,"width":757,"height":12}},{"id":"7ebf2470-2314-4a41-8e25-767fa26f90a0","block_type":"box","text":"to receive an amount (whether in cash, stock of the acquiring company or a combination of both) in","page_number":112,"box":{"x":116,"y":433,"width":740,"height":12}},{"id":"c0b272bc-eb43-4599-bb1a-4d9b46b913da","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":112,"box":{"x":116,"y":449,"width":733,"height":12}},{"id":"b6c371d9-c580-455d-b7c6-926a834a5a8e","block_type":"box","text":"subject to the risk that the merger transaction may be canceled, delayed or restructured, in which case","page_number":112,"box":{"x":116,"y":464,"width":766,"height":12}},{"id":"35f9f4e5-cdf7-4568-ad97-99570ba8cc8e","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":112,"box":{"x":116,"y":480,"width":754,"height":12}},{"id":"99022ed9-5c2d-4024-bd94-3e7ba6c4d7cd","block_type":"box","text":"significant value.","page_number":112,"box":{"x":116,"y":495,"width":129,"height":12}},{"id":"5f3c6506-0b8e-41a5-ae5b-705cb5734c18","block_type":"box","text":"Money Market Obligations of Domestic Banks, Foreign Banks and Foreign Branches of U.S.","page_number":112,"box":{"x":116,"y":529,"width":737,"height":12}},{"id":"b4480037-3da4-42f5-9fa6-c84ca1d39795","block_type":"box","text":"Banks.","page_number":112,"box":{"x":116,"y":544,"width":54,"height":10}},{"id":"734d9617-a8e9-4f09-b8b7-1bad141224e6","block_type":"box","text":"Certain Funds may purchase bank obligations, such as certificates of deposit, notes, bankers’","page_number":112,"box":{"x":171,"y":544,"width":705,"height":12}},{"id":"e9a81f30-0400-4a3e-bf09-95be98395f6a","block_type":"box","text":"acceptances and time deposits, including instruments issued or supported by the credit of U.S. or","page_number":112,"box":{"x":116,"y":560,"width":728,"height":12}},{"id":"41b41025-b8cf-467a-97ea-ec2c03ee2d15","block_type":"box","text":"foreign banks or savings institutions having total assets at the time of purchase in excess of $1 billion.","page_number":112,"box":{"x":116,"y":574,"width":761,"height":13}},{"id":"e4583125-7ed1-4ebf-9b23-713123d02471","block_type":"box","text":"These obligations may be general obligations of the parent bank or may be limited to the issuing","page_number":112,"box":{"x":116,"y":591,"width":719,"height":12}},{"id":"b14def40-6a50-4c3c-b114-d7e3a326560d","block_type":"box","text":"branch or subsidiary by the terms of a specific obligation or by government regulation. The assets of a","page_number":112,"box":{"x":117,"y":606,"width":761,"height":12}},{"id":"c89f03bb-1a91-4e5b-9851-93b127d216e7","block_type":"box","text":"bank or savings institution will be deemed to include the assets of its domestic and foreign branches","page_number":112,"box":{"x":117,"y":622,"width":747,"height":12}},{"id":"449bafcc-08dd-481b-9faf-b47e6bb74e37","block_type":"box","text":"for purposes of a Fund’s investment policies. Investments in short-term bank obligations may include","page_number":112,"box":{"x":116,"y":637,"width":753,"height":12}},{"id":"124e6ac0-39b5-4130-b0cf-41656acf415a","block_type":"box","text":"obligations of foreign banks and domestic branches of foreign banks, and also foreign branches of","page_number":112,"box":{"x":116,"y":653,"width":734,"height":12}},{"id":"9587a399-0ad6-40af-a8c0-072e833427a3","block_type":"box","text":"domestic banks.","page_number":112,"box":{"x":116,"y":668,"width":120,"height":10}},{"id":"95344716-6f7c-48fe-a58f-16a18cb27db7","block_type":"box","text":"To the extent consistent with their investment objectives, a Fund may invest in debt obligations of","page_number":112,"box":{"x":116,"y":702,"width":723,"height":12}},{"id":"97ce5976-394a-4f6d-8c7e-5d1b903de97d","block_type":"box","text":"domestic or foreign corporations and banks, and may acquire commercial obligations issued by","page_number":112,"box":{"x":116,"y":717,"width":708,"height":12}},{"id":"b583fb64-829c-4ae7-ae75-e9568d5524a9","block_type":"box","text":"Canadian corporations and Canadian counterparts of U.S. corporations, as well as Europaper, which is","page_number":112,"box":{"x":117,"y":733,"width":764,"height":12}},{"id":"714d1e55-0ff8-4145-9bc0-c036dcea41f8","block_type":"box","text":"U.S. dollar-denominated commercial paper of a foreign issuer.","page_number":112,"box":{"x":117,"y":748,"width":460,"height":12}},{"id":"6273f38e-f5a9-47af-8828-fc2c15e99ba7","block_type":"box","text":"Money Market Securities.","page_number":112,"box":{"x":116,"y":782,"width":201,"height":12}},{"id":"373fbe27-4c18-4c1d-ad7e-c3a58caa1ee3","block_type":"box","text":"Certain Funds may invest in a broad range of short-term, high quality, U.S.","page_number":112,"box":{"x":323,"y":782,"width":553,"height":12}},{"id":"b53d3172-4724-47cc-b9ee-5c094a23a148","block_type":"box","text":"dollar-denominated instruments, such as government, bank, commercial and other obligations that are","page_number":112,"box":{"x":116,"y":797,"width":760,"height":12}},{"id":"c99b1fd3-dd24-4bac-acf6-86620bf1a224","block_type":"box","text":"available in the money markets. In particular, the Funds may invest in:","page_number":112,"box":{"x":116,"y":813,"width":519,"height":12}},{"id":"56079c6f-0e5a-454c-8edc-d4f4bfc7f0dc","block_type":"box","text":"(a) U.S. dollar-denominated obligations issued or supported by the credit of U.S. or foreign banks","page_number":112,"box":{"x":150,"y":846,"width":735,"height":12}},{"id":"009f34d8-0d51-4dc2-8800-58df4f568a02","block_type":"box","text":"or savings institutions with total assets in excess of $1 billion (including obligations of foreign","page_number":112,"box":{"x":184,"y":861,"width":690,"height":13}},{"id":"b1a57985-f69b-4ba0-8e37-08bc8ac53ba8","block_type":"box","text":"branches of such banks);","page_number":112,"box":{"x":184,"y":877,"width":192,"height":12}},{"id":"bca95ae1-18d6-457c-9547-cb07c1a0ed40","block_type":"box","text":"II-64","page_number":112,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"eebc45ba-1396-454b-9ce3-f11712d10306","block_type":"box","text":"NM1026U-6033243-112/221","page_number":112,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"54cb6a31-986d-410e-aca0-8313ad264944","block_type":"box","text":"(b) high quality commercial paper and other obligations issued or guaranteed by U.S. and foreign","page_number":113,"box":{"x":150,"y":87,"width":734,"height":12}},{"id":"8f27d09b-25e3-44e9-8932-de477273cf97","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":113,"box":{"x":184,"y":102,"width":692,"height":13}},{"id":"2b615097-00fc-420b-a272-8391139b922a","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":113,"box":{"x":184,"y":118,"width":687,"height":12}},{"id":"1a2bd63c-b173-485f-be21-e6da73e8ee98","block_type":"box","text":"(at the time of purchase) A or higher by those rating agencies;","page_number":113,"box":{"x":184,"y":134,"width":465,"height":12}},{"id":"1452e342-dabc-4120-b96b-f6a447ea0cfb","block_type":"box","text":"(c) unrated notes, paper and other instruments that are of comparable quality to the instruments","page_number":113,"box":{"x":150,"y":157,"width":726,"height":12}},{"id":"92ab5af6-41df-4f50-ade1-46644779c7ef","block_type":"box","text":"described in (b) above as determined by the Fund’s Manager;","page_number":113,"box":{"x":184,"y":172,"width":463,"height":12}},{"id":"2d6aeedf-81c4-4283-b01c-28a0a833a66c","block_type":"box","text":"(d) asset-backed securities (including interests in pools of assets such as mortgages, installment","page_number":113,"box":{"x":150,"y":196,"width":730,"height":12}},{"id":"4dc61c37-17ff-48a1-bf00-351c3dd2e8aa","block_type":"box","text":"purchase obligations and credit card receivables);","page_number":113,"box":{"x":184,"y":211,"width":374,"height":12}},{"id":"38504578-06c7-4516-89d7-a93771d996e7","block_type":"box","text":"(e) securities issued or guaranteed as to principal and interest by the U.S. Government or by its","page_number":113,"box":{"x":150,"y":234,"width":722,"height":12}},{"id":"2d1d5443-77cd-4ae8-8ced-be999557f6b1","block_type":"box","text":"agencies or authorities and related custodial receipts;","page_number":113,"box":{"x":184,"y":250,"width":401,"height":12}},{"id":"917322b8-dcc1-44a6-809e-6524d8e772c2","block_type":"box","text":"(f) dollar-denominated securities issued or guaranteed by foreign governments or their political","page_number":113,"box":{"x":150,"y":273,"width":719,"height":12}},{"id":"62169ddb-a5f7-4071-8ecc-13c9fda5d7d5","block_type":"box","text":"subdivisions, agencies or authorities;","page_number":113,"box":{"x":184,"y":289,"width":279,"height":12}},{"id":"849a70b1-1291-43bc-b395-222b239d7fed","block_type":"box","text":"(g) funding agreements issued by highly-rated U.S. insurance companies;","page_number":113,"box":{"x":150,"y":312,"width":561,"height":12}},{"id":"341503ea-da78-46e9-b6e3-d98378813897","block_type":"box","text":"(h) securities issued or guaranteed by state or local governmental bodies;","page_number":113,"box":{"x":150,"y":335,"width":560,"height":12}},{"id":"2c52bf71-d2d8-4ed3-abb5-01089539662c","block_type":"box","text":"(i) repurchase agreements relating to the above instruments;","page_number":113,"box":{"x":150,"y":358,"width":469,"height":12}},{"id":"cde238d9-e628-4ff5-a8b3-0620cbe71078","block_type":"box","text":"(j) municipal bonds and notes whose principal and interest payments are guaranteed by the U.S.","page_number":113,"box":{"x":150,"y":382,"width":736,"height":12}},{"id":"a904712f-ab62-4cc8-a7f1-ac9331d55479","block_type":"box","text":"Government or one of its agencies or authorities or which otherwise depend directly or","page_number":113,"box":{"x":184,"y":397,"width":646,"height":12}},{"id":"66386d3f-223d-4a67-9478-73e6a29f93d6","block_type":"box","text":"indirectly on the credit of the United States;","page_number":113,"box":{"x":184,"y":413,"width":325,"height":12}},{"id":"e6573445-bb96-4272-87f9-236b99a6b7c4","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":113,"box":{"x":150,"y":436,"width":730,"height":12}},{"id":"4d2f415c-6991-4582-95f8-9c0324f88e6a","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":113,"box":{"x":184,"y":451,"width":563,"height":12}},{"id":"6508e9e2-9847-4bab-a666-2d2bff594f00","block_type":"box","text":"(l) tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by","page_number":113,"box":{"x":150,"y":475,"width":675,"height":12}},{"id":"19aa4408-8308-49bf-ae54-f3a45046d380","block_type":"box","text":"Moody’s, A-2 or higher by S&P, or F-2 or higher by Fitch;","page_number":113,"box":{"x":184,"y":490,"width":428,"height":12}},{"id":"f439477c-4c1c-4029-8c2d-7d17e2817da8","block_type":"box","text":"(m) municipal bonds rated A or higher by Moody’s, S&P or Fitch;","page_number":113,"box":{"x":150,"y":513,"width":488,"height":12}},{"id":"86bebd05-470a-4a9e-b888-d46eb7c45784","block_type":"box","text":"(n) unrated notes, paper or other instruments that are of comparable quality to the instruments","page_number":113,"box":{"x":150,"y":537,"width":713,"height":12}},{"id":"6b6350e0-8c39-4303-9a9a-bd7066a0cd1d","block_type":"box","text":"described above, as determined by the Fund’s Manager under guidelines established by the","page_number":113,"box":{"x":184,"y":552,"width":688,"height":12}},{"id":"2ddc1e35-4c04-4389-bc1d-79b9ed4883c0","block_type":"box","text":"Board; and","page_number":113,"box":{"x":184,"y":568,"width":86,"height":11}},{"id":"5f946890-048f-451b-bec6-e983eec3dc91","block_type":"box","text":"(o) municipal bonds and notes which are guaranteed as to principal and interest by the U.S.","page_number":113,"box":{"x":150,"y":591,"width":693,"height":12}},{"id":"3ec571b1-65f7-47e0-825c-dc4d22891181","block_type":"box","text":"Government or an agency or instrumentality thereof or which otherwise depend directly or","page_number":113,"box":{"x":184,"y":606,"width":671,"height":12}},{"id":"8305e76a-4cce-4689-a899-ca847b1c7d57","block_type":"box","text":"indirectly on the credit of the United States.","page_number":113,"box":{"x":184,"y":622,"width":325,"height":12}},{"id":"8df9b77e-98e2-41ba-823b-c971e489eb3a","block_type":"box","text":"Mortgage-Related Securities.","page_number":113,"box":{"x":116,"y":653,"width":236,"height":12}},{"id":"e6ef5345-23a6-4687-b776-77728b5a9e20","block_type":"box","text":"Mortgage-Backed Securities.","page_number":113,"box":{"x":116,"y":676,"width":214,"height":12}},{"id":"7a67e9a6-5745-4834-976b-19e5d511b555","block_type":"box","text":"Mortgage-backed securities represent interests in pools of mortgages in","page_number":113,"box":{"x":338,"y":676,"width":532,"height":12}},{"id":"548e8425-3263-406b-92a5-8c44385ca171","block_type":"box","text":"which payments of both principal and interest on the securities are generally made monthly, in effect","page_number":113,"box":{"x":116,"y":692,"width":744,"height":12}},{"id":"087faee2-4f55-4c32-81e4-e871caa3dc8e","block_type":"box","text":"“passing through” monthly payments made by borrowers on the residential or commercial mortgage","page_number":113,"box":{"x":116,"y":707,"width":739,"height":12}},{"id":"3b8a4b94-afcd-4561-b14e-8b531e96ddcb","block_type":"box","text":"loans that underlie the securities (net of any fees paid to the issuer or guarantor of the securities).","page_number":113,"box":{"x":117,"y":723,"width":722,"height":12}},{"id":"d65000ed-2f8f-4ed7-b42d-3f74031e8cad","block_type":"box","text":"Mortgage-backed securities differ from other forms of debt securities, which normally provide for","page_number":113,"box":{"x":117,"y":738,"width":713,"height":12}},{"id":"9f2d4c12-ba32-48ed-a12b-6552b331b260","block_type":"box","text":"periodic payment of interest in fixed amounts with principal payments at maturity or specified call","page_number":113,"box":{"x":117,"y":754,"width":715,"height":12}},{"id":"e56ff57e-826c-4681-8c30-3ba266dac953","block_type":"box","text":"dates.","page_number":113,"box":{"x":116,"y":769,"width":44,"height":10}},{"id":"4537fe7a-1ecf-4a53-88be-abb8351dfc06","block_type":"box","text":"Mortgage-backed securities are subject to the general risks associated with investing in real estate","page_number":113,"box":{"x":117,"y":800,"width":731,"height":12}},{"id":"3e49bc1a-1309-403d-9f54-5dab8c19cee6","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":113,"box":{"x":116,"y":816,"width":718,"height":12}},{"id":"853f06fb-d46d-4c8a-98ad-6288684076b6","block_type":"box","text":"mortgages relates declines. In addition, investments in mortgage-backed securities involve certain","page_number":113,"box":{"x":117,"y":831,"width":732,"height":12}},{"id":"6c5abec6-d7ad-4182-b319-559301e990fd","block_type":"box","text":"specific risks. These risks include the failure of a party to meet its commitments under the related","page_number":113,"box":{"x":116,"y":847,"width":726,"height":12}},{"id":"443e0589-1476-467d-ac49-c3c27a34bf5c","block_type":"box","text":"operative documents, adverse interest rate changes and the effects of prepayments on mortgage cash","page_number":113,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"082bbab6-b28e-43e1-9474-31f95ddaa6b2","block_type":"box","text":"flows. Mortgage-backed securities are “pass-through” securities, meaning that principal and interest","page_number":113,"box":{"x":116,"y":878,"width":744,"height":12}},{"id":"836f9559-18b2-4cff-bb40-e250495c0d23","block_type":"box","text":"II-65","page_number":113,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"94178ef4-a8d9-492a-b61a-335169772106","block_type":"box","text":"NM1026U-6033243-113/221","page_number":113,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"a88e9c8e-fd7e-4847-ab2a-0bc011459492","block_type":"box","text":"payments made by the borrower on the underlying mortgages are passed through to a Fund.","page_number":114,"box":{"x":117,"y":87,"width":693,"height":12}},{"id":"3dc1bf57-5b9d-43b8-b442-baff26ea765b","block_type":"box","text":"Accordingly, the value of mortgage-backed securities in which a Fund invests may be particularly","page_number":114,"box":{"x":116,"y":102,"width":725,"height":13}},{"id":"6453dea4-9624-43f5-ab47-9538355a7a01","block_type":"box","text":"sensitive to changes in prevailing interest rates, and, like other fixed income investments, the ability of","page_number":114,"box":{"x":116,"y":118,"width":761,"height":12}},{"id":"9b77b90e-fe23-4075-87ad-c1846dc9075e","block_type":"box","text":"a Fund to utilize these instruments successfully may depend in part upon the ability of the Manager to","page_number":114,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"ef47253c-c0b5-4ddd-8621-9ba720563354","block_type":"box","text":"forecast interest rates and other economic factors correctly. The value of mortgage-backed securities,","page_number":114,"box":{"x":116,"y":149,"width":761,"height":12}},{"id":"2b364f52-2808-491e-839b-5e632445fbf9","block_type":"box","text":"like that of traditional fixed-income securities, typically increases when interest rates fall and decreases","page_number":114,"box":{"x":117,"y":165,"width":768,"height":12}},{"id":"2cde33e2-e1e0-43c2-98a6-614cbf1b5212","block_type":"box","text":"when interest rates rise. However, mortgage-backed securities differ from traditional fixed-income","page_number":114,"box":{"x":116,"y":180,"width":729,"height":12}},{"id":"eb53da94-a9c8-448e-85ec-245d024bb373","block_type":"box","text":"securities because of their potential for prepayment without penalty. The price paid by a Fund for its","page_number":114,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"5eb96b3b-89fd-4792-9a62-b1e05439af6c","block_type":"box","text":"mortgage-backed securities, the yield the Fund expects to receive from such securities and the","page_number":114,"box":{"x":117,"y":211,"width":709,"height":12}},{"id":"d0e0db28-d64c-4e7b-b8fb-1fca9a68e4d6","block_type":"box","text":"weighted average life of the securities are based on a number of factors, including the anticipated rate","page_number":114,"box":{"x":116,"y":227,"width":762,"height":12}},{"id":"4b742101-cd3a-44cf-8631-5d3f010bc588","block_type":"box","text":"of prepayment of the underlying mortgages. In a period of declining interest rates, borrowers may","page_number":114,"box":{"x":116,"y":242,"width":727,"height":12}},{"id":"5b73ea14-d8d3-4be6-9668-951e243573a8","block_type":"box","text":"prepay the underlying mortgages more quickly than anticipated, thereby reducing the yield to maturity","page_number":114,"box":{"x":117,"y":258,"width":757,"height":12}},{"id":"de806f13-cfbf-43d2-b962-3e05958b67b6","block_type":"box","text":"and the average life of the mortgage-backed securities. Moreover, when a Fund reinvests the proceeds","page_number":114,"box":{"x":116,"y":273,"width":772,"height":12}},{"id":"01332595-4cb0-4e83-b598-45aba7998ac2","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":114,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"03db44b9-c5fc-4ef3-9511-66f34cfe5f49","block_type":"box","text":"on the security that was prepaid.","page_number":114,"box":{"x":116,"y":304,"width":247,"height":12}},{"id":"4e317b9a-0945-4f82-90d5-45f9307cf483","block_type":"box","text":"To the extent that a Fund purchases mortgage-backed securities at a premium, mortgage foreclosures","page_number":114,"box":{"x":116,"y":335,"width":766,"height":12}},{"id":"e9510577-f4b9-4965-8937-89144bb69d5b","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":114,"box":{"x":116,"y":351,"width":758,"height":12}},{"id":"e021c0f8-b7d2-4403-899f-95764877e0a9","block_type":"box","text":"securities at a discount, both scheduled payments of principal and unscheduled prepayments will","page_number":114,"box":{"x":116,"y":366,"width":726,"height":12}},{"id":"96030511-1b92-4f72-8e6d-93b85ec89bfc","block_type":"box","text":"increase current and total returns and will accelerate the recognition of income, which, when distributed","page_number":114,"box":{"x":117,"y":382,"width":771,"height":12}},{"id":"37055ab7-1274-4fd3-83d6-34aa5d733852","block_type":"box","text":"to shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of","page_number":114,"box":{"x":116,"y":397,"width":762,"height":12}},{"id":"b6a3c6b7-5223-4297-86c3-f8fecac4ad23","block_type":"box","text":"the underlying mortgages may occur at a slower than expected rate, creating maturity extension risk.","page_number":114,"box":{"x":116,"y":413,"width":753,"height":12}},{"id":"0d5a7699-1189-4575-b525-a405bb9c7e84","block_type":"box","text":"This particular risk may effectively change a security that was considered short- or intermediate-term at","page_number":114,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"85df4dfe-3897-4ba4-97d5-f1cd1d244778","block_type":"box","text":"the time of purchase into a long-term security. Since the value of long-term securities generally","page_number":114,"box":{"x":116,"y":444,"width":709,"height":12}},{"id":"cdcf5093-f45f-422b-81e4-9e6d6415628d","block_type":"box","text":"fluctuates more widely in response to changes in interest rates than that of shorter-term securities,","page_number":114,"box":{"x":116,"y":459,"width":736,"height":12}},{"id":"436b155d-ed91-4b64-a344-b965ccd1b469","block_type":"box","text":"maturity extension risk could increase the inherent volatility of the Fund. Under certain interest rate and","page_number":114,"box":{"x":117,"y":475,"width":769,"height":12}},{"id":"4760c330-eaec-4ae9-aed1-c56f71c27c31","block_type":"box","text":"prepayment scenarios, a Fund may fail to recoup fully its investment in mortgage-backed securities","page_number":114,"box":{"x":117,"y":490,"width":740,"height":12}},{"id":"ba538777-4a02-4805-b3ea-c9fe313f258e","block_type":"box","text":"notwithstanding any direct or indirect governmental or agency guarantee.","page_number":114,"box":{"x":117,"y":506,"width":547,"height":12}},{"id":"77fe3cba-2e11-4ba8-ba42-59c653d12adc","block_type":"box","text":"There are currently three types of mortgage pass-through securities: (1) those issued by the U.S.","page_number":114,"box":{"x":116,"y":537,"width":725,"height":12}},{"id":"81a8936e-549b-4257-9a3d-c26dc957c2cf","block_type":"box","text":"Government or one of its agencies or instrumentalities, such as the Government National Mortgage","page_number":114,"box":{"x":117,"y":552,"width":742,"height":12}},{"id":"4611c39f-2804-4ccd-a3e0-4de8b12e8a6f","block_type":"box","text":"Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal","page_number":114,"box":{"x":116,"y":568,"width":770,"height":12}},{"id":"e6e925cb-99b7-41a0-952e-1e37e93d8531","block_type":"box","text":"Home Loan Mortgage Corporation (“Freddie Mac”); (2) those issued by private issuers that represent","page_number":114,"box":{"x":117,"y":583,"width":753,"height":12}},{"id":"9899cc39-5188-4b5f-a58e-c7af58a4f0f8","block_type":"box","text":"an interest in or are collateralized by pass-through securities issued or guaranteed by the U.S.","page_number":114,"box":{"x":116,"y":599,"width":704,"height":12}},{"id":"8e659701-df0c-4d2a-a911-6e80d1d049af","block_type":"box","text":"Government or one of its agencies or instrumentalities; and (3) those issued by private issuers that","page_number":114,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"c8a1721a-b77b-43a4-83b4-7c1b724e2058","block_type":"box","text":"represent an interest in or are collateralized by whole mortgage loans or pass-through securities","page_number":114,"box":{"x":117,"y":630,"width":717,"height":12}},{"id":"bf4a15ad-84a4-4f26-974f-e26e1382cf2c","block_type":"box","text":"without a government guarantee but that usually have some form of private credit enhancement.","page_number":114,"box":{"x":116,"y":645,"width":720,"height":12}},{"id":"b4e711f8-962b-4c70-8e58-427ac968b59b","block_type":"box","text":"Ginnie Mae is a wholly owned U.S. Government corporation within the Department of Housing and","page_number":114,"box":{"x":117,"y":676,"width":730,"height":12}},{"id":"3f9efdd7-a246-47e2-8c37-5bc5d098cc8c","block_type":"box","text":"Urban Development. Ginnie Mae is authorized to guarantee, with the full faith and credit of the U.S.","page_number":114,"box":{"x":117,"y":692,"width":735,"height":12}},{"id":"3e52bfc8-10ee-4de5-98b8-0efaa6ab8adb","block_type":"box","text":"Government, the timely payment of principal and interest on securities issued by the institutions","page_number":114,"box":{"x":117,"y":707,"width":707,"height":12}},{"id":"9bb67590-b886-4113-9128-476e14713fda","block_type":"box","text":"approved by Ginnie Mae (such as savings and loan institutions, commercial banks and mortgage","page_number":114,"box":{"x":116,"y":723,"width":720,"height":12}},{"id":"622cf55d-b248-4699-a24f-af663b04b487","block_type":"box","text":"banks), and backed by pools of Federal Housing Administration (“FHA”)-insured or Veterans’","page_number":114,"box":{"x":117,"y":738,"width":687,"height":12}},{"id":"f2af3901-a17a-4dec-babf-52ea77f553a0","block_type":"box","text":"Administration (“VA”)-guaranteed mortgages. Pass-through certificates guaranteed by Ginnie Mae","page_number":114,"box":{"x":116,"y":754,"width":728,"height":12}},{"id":"7e8fce50-0ecc-449c-85aa-1c158f52dc3b","block_type":"box","text":"(such certificates are also known as “Ginnie Maes”) are guaranteed as to the timely payment of","page_number":114,"box":{"x":117,"y":769,"width":707,"height":12}},{"id":"c0e1ba40-1b94-401a-bfcf-211712d8bb01","block_type":"box","text":"principal and interest by Ginnie Mae, whose guarantee is backed by the full faith and credit of the","page_number":114,"box":{"x":117,"y":785,"width":720,"height":12}},{"id":"db36f129-43a6-43d0-b902-5b191717ebb0","block_type":"box","text":"United States. Ginnie Mae certificates also are supported by the authority of Ginnie Mae to borrow","page_number":114,"box":{"x":117,"y":800,"width":729,"height":12}},{"id":"c621c1b7-8f7e-4cba-bc25-960ed397b630","block_type":"box","text":"funds from the U.S. Treasury Department to make payments under its guarantee. Mortgage-related","page_number":114,"box":{"x":116,"y":816,"width":737,"height":12}},{"id":"7b5b91b4-2d1a-4670-b258-9134dd5098a8","block_type":"box","text":"securities issued by Fannie Mae include Fannie Mae guaranteed Mortgage Pass-Through Certificates","page_number":114,"box":{"x":116,"y":831,"width":761,"height":12}},{"id":"e86eea91-489b-4f2c-a369-991132f1ccdb","block_type":"box","text":"(also known as “Fannie Maes”), which are guaranteed as to timely payment of principal and interest by","page_number":114,"box":{"x":117,"y":847,"width":766,"height":12}},{"id":"b2b94b62-b812-4447-95d0-8dd48a9972e0","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":114,"box":{"x":117,"y":862,"width":759,"height":12}},{"id":"16b40f1b-f7e2-4bfd-93c7-591276cec595","block_type":"box","text":"supported by the right of Fannie Mae to borrow from the U.S. Treasury Department. Fannie Mae was","page_number":114,"box":{"x":116,"y":878,"width":755,"height":12}},{"id":"e4e3f6d9-b8ae-48d0-b05a-aeb7364ad2d6","block_type":"box","text":"II-66","page_number":114,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3669c14b-b26a-479d-bdbf-f29a19cc9386","block_type":"box","text":"NM1026U-6033243-114/221","page_number":114,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"97fa6a4f-3eb0-4ace-87ef-2db2c190118d","block_type":"box","text":"established as a federal agency in 1938 and in 1968 was chartered by Congress as a private","page_number":115,"box":{"x":116,"y":87,"width":695,"height":12}},{"id":"9d5a84ed-0cc5-4b7d-ad67-a09c161121b6","block_type":"box","text":"shareholder-owned company. Mortgage-related securities issued by Freddie Mac include Freddie Mac","page_number":115,"box":{"x":116,"y":103,"width":765,"height":12}},{"id":"51102d75-6374-4226-981b-be93d44c7483","block_type":"box","text":"Mortgage Participation Certificates (also known as “Freddie Macs” or “PCs”). Freddie Mac is a","page_number":115,"box":{"x":117,"y":118,"width":702,"height":12}},{"id":"5608fe40-39cd-4f92-b6e0-f28c86c757c7","block_type":"box","text":"stockholder-owned corporation chartered by Congress in 1970. Freddie Macs are not guaranteed by","page_number":115,"box":{"x":116,"y":134,"width":750,"height":12}},{"id":"5bd1de53-c5e6-4aa3-a627-372b50408a90","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":115,"box":{"x":116,"y":149,"width":768,"height":12}},{"id":"2e477576-6cae-45d6-ab8c-96949baf01f1","block_type":"box","text":"United States or of any Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment of","page_number":115,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"b84c0e71-d35f-484b-b81e-d23e9edb69a1","block_type":"box","text":"interest, which is guaranteed by Freddie Mac. Freddie Mac guarantees either ultimate collection or","page_number":115,"box":{"x":117,"y":180,"width":735,"height":12}},{"id":"663d7eeb-f1b1-4a37-a3da-9b888d375040","block_type":"box","text":"timely payment of all principal payments on the underlying mortgage loans. While Freddie Mac","page_number":115,"box":{"x":116,"y":196,"width":707,"height":12}},{"id":"bc13bb81-49c2-4b94-a6fe-dc801ff19140","block_type":"box","text":"generally does not guarantee timely payment of principal, Freddie Mac may remit the amount due on","page_number":115,"box":{"x":116,"y":211,"width":753,"height":12}},{"id":"fa24c5e6-86ed-4650-b4e3-50db0678046f","block_type":"box","text":"account of its guarantee of ultimate payment of principal at any time after default on an underlying","page_number":115,"box":{"x":116,"y":227,"width":732,"height":12}},{"id":"a86655d8-1f6d-4b78-b2f5-41ccf13f6b1e","block_type":"box","text":"mortgage, but in no event later than one year after it becomes payable.","page_number":115,"box":{"x":117,"y":242,"width":532,"height":12}},{"id":"354b6997-fdb7-4c08-8a36-df8a83c97fb6","block_type":"box","text":"Private mortgage pass-through securities are structured similarly to Ginnie Mae, Fannie Mae, and","page_number":115,"box":{"x":117,"y":273,"width":730,"height":12}},{"id":"6f819223-7bf4-4957-aff1-6c7e68d53676","block_type":"box","text":"Freddie Mac mortgage pass-through securities and are issued by originators of and investors in","page_number":115,"box":{"x":117,"y":289,"width":714,"height":12}},{"id":"0b7d159b-6744-4543-b0bf-c1a6c942e7fe","block_type":"box","text":"mortgage loans, including depository institutions, mortgage banks, investment banks and special","page_number":115,"box":{"x":117,"y":304,"width":722,"height":12}},{"id":"b4a9ec37-008f-4478-9e4e-26f2a3e4aa28","block_type":"box","text":"purpose subsidiaries of the foregoing.","page_number":115,"box":{"x":117,"y":320,"width":284,"height":12}},{"id":"41df1a85-987e-4c91-ab40-7c280af1eaf3","block_type":"box","text":"Pools created by private mortgage pass-through issuers generally offer a higher rate of interest than","page_number":115,"box":{"x":117,"y":351,"width":747,"height":12}},{"id":"374cf274-17b3-4b80-b087-96b8bf4221a6","block_type":"box","text":"government and government-related pools because there are no direct or indirect government or","page_number":115,"box":{"x":116,"y":366,"width":723,"height":12}},{"id":"b0f1eda0-0c57-4e3a-88be-773d71b0014b","block_type":"box","text":"agency guarantees of payments in the private pools. However, timely payment of interest and principal","page_number":115,"box":{"x":116,"y":382,"width":767,"height":12}},{"id":"38f04703-31bc-4a8e-b4bf-401be836c9f3","block_type":"box","text":"of these pools may be supported by various forms of insurance or guarantees, including individual","page_number":115,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"5d12616a-172a-43b0-b59d-ad66fb28198d","block_type":"box","text":"loan, title, pool and hazard insurance and letters of credit. The insurance and guarantees are issued by","page_number":115,"box":{"x":117,"y":413,"width":769,"height":12}},{"id":"10e5b908-e6c3-4642-9c64-393efa5bbf55","block_type":"box","text":"governmental entities, private insurers and the mortgage poolers. The insurance and guarantees and","page_number":115,"box":{"x":116,"y":428,"width":756,"height":12}},{"id":"1b72cd92-f01f-45d0-ac25-03bf6e9bcb0d","block_type":"box","text":"the creditworthiness of the issuers thereof will be considered in determining whether a mortgage","page_number":115,"box":{"x":116,"y":444,"width":720,"height":12}},{"id":"82c02a24-6a59-42a9-b2b5-76c6c3dee27c","block_type":"box","text":"related security meets a Fund’s investment quality standards. There can be no assurance that the","page_number":115,"box":{"x":117,"y":459,"width":731,"height":12}},{"id":"af94d7e3-7dd8-4e38-96ae-f656734276a5","block_type":"box","text":"private insurers or guarantors can meet their obligations under the insurance policies or guarantee","page_number":115,"box":{"x":117,"y":475,"width":734,"height":12}},{"id":"2e56c43a-4ade-4a1f-aff2-3f45ea910559","block_type":"box","text":"arrangements. Private mortgage pass-through securities may be bought without insurance or","page_number":115,"box":{"x":116,"y":490,"width":696,"height":12}},{"id":"c89c928a-287b-4e78-8434-1f13f6497bba","block_type":"box","text":"guarantees if, through an examination of the loan experience and practices of the originator/servicers","page_number":115,"box":{"x":116,"y":506,"width":756,"height":12}},{"id":"023dde0f-f969-44a9-b1e8-f94ae9e86bd5","block_type":"box","text":"and poolers, the Manager determines that the securities meet a Fund’s quality standards. Any","page_number":115,"box":{"x":116,"y":521,"width":703,"height":12}},{"id":"9eea11ce-98fe-4338-a394-1eb7fee2c1b9","block_type":"box","text":"mortgage-related securities that are issued by private issuers have some exposure to subprime loans","page_number":115,"box":{"x":117,"y":537,"width":757,"height":12}},{"id":"738a74bb-be44-4bfa-808e-88d696a8ca2d","block_type":"box","text":"as well as to the mortgage and credit markets generally.","page_number":115,"box":{"x":116,"y":552,"width":422,"height":12}},{"id":"3fc3990a-a21e-4373-ac6e-08de572fe85e","block_type":"box","text":"In addition, mortgage-related securities that are issued by private issuers are not subject to the","page_number":115,"box":{"x":117,"y":583,"width":707,"height":12}},{"id":"ccc8465e-c370-4266-8cd4-96b86df1f52d","block_type":"box","text":"underwriting requirements for the underlying mortgages that are applicable to those mortgage-related","page_number":115,"box":{"x":117,"y":599,"width":757,"height":12}},{"id":"ddab5f9d-08fa-4d37-9367-4f2f7da8513c","block_type":"box","text":"securities that have a government or government-sponsored entity guarantee. As a result, the","page_number":115,"box":{"x":116,"y":614,"width":702,"height":12}},{"id":"a10e1d2c-67f5-4202-be9f-911328298c11","block_type":"box","text":"mortgage loans underlying private mortgage-related securities may, and frequently do, have less","page_number":115,"box":{"x":117,"y":630,"width":722,"height":12}},{"id":"764bc6a0-6345-4fb2-8245-44f239c0fd3f","block_type":"box","text":"favorable collateral, credit risk or other underwriting characteristics than government or government","page_number":115,"box":{"x":116,"y":645,"width":743,"height":12}},{"id":"975df609-1dd5-4540-ab05-84e83d5b268b","block_type":"box","text":"sponsored mortgage-related securities and have wider variances in a number of terms including","page_number":115,"box":{"x":116,"y":661,"width":712,"height":12}},{"id":"cc7fbae7-add7-4e7a-81c8-39087d56fd75","block_type":"box","text":"interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently","page_number":115,"box":{"x":117,"y":676,"width":750,"height":12}},{"id":"53523536-cfec-44f9-85ee-bb24aa9763f3","block_type":"box","text":"include second mortgages, high loan-to-value mortgages and manufactured housing loans. The","page_number":115,"box":{"x":117,"y":692,"width":709,"height":12}},{"id":"a43eccad-9fb6-42fb-8a1a-661035673845","block_type":"box","text":"coupon rates and maturities of the underlying mortgage loans in a private-label mortgage-related","page_number":115,"box":{"x":116,"y":707,"width":717,"height":12}},{"id":"642dd879-5f97-41df-a2a9-d30207f88b83","block_type":"box","text":"securities pool may vary to a greater extent than those included in a government guaranteed pool, and","page_number":115,"box":{"x":116,"y":723,"width":760,"height":12}},{"id":"86169770-e2e2-4aba-9de3-7c7ad25a2c27","block_type":"box","text":"the pool may include subprime mortgage loans. Subprime loans refer to loans made to borrowers with","page_number":115,"box":{"x":116,"y":738,"width":757,"height":12}},{"id":"2d648cf5-1289-4058-ae67-1c4a45849b72","block_type":"box","text":"weakened credit histories or with a lower capacity to make timely payments on their loans. For these","page_number":115,"box":{"x":116,"y":754,"width":746,"height":12}},{"id":"9f4dd7c8-4188-4360-812e-a21dc3fdcb21","block_type":"box","text":"reasons, the loans underlying these securities have had in many cases higher default rates than those","page_number":115,"box":{"x":117,"y":769,"width":758,"height":12}},{"id":"e34b4db0-2032-4df8-bae1-975f720854a1","block_type":"box","text":"loans that meet government underwriting requirements.","page_number":115,"box":{"x":117,"y":785,"width":410,"height":12}},{"id":"fde8866b-5c4f-49ab-ab5d-07abbe3cee17","block_type":"box","text":"The risk of non-payment is greater for mortgage-related securities that are backed by mortgage pools","page_number":115,"box":{"x":116,"y":816,"width":753,"height":12}},{"id":"59cd59e3-c5a2-4172-bd00-310c2114c4de","block_type":"box","text":"that contain subprime loans, but a level of risk exists for all loans. Market factors adversely affecting","page_number":115,"box":{"x":116,"y":831,"width":746,"height":12}},{"id":"56e53f96-ef65-4c32-82d7-8db939a8e7c3","block_type":"box","text":"mortgage loan repayments may include a general economic turndown, high unemployment, a general","page_number":115,"box":{"x":117,"y":847,"width":759,"height":12}},{"id":"84ac65b5-b897-4ed1-aa80-550225618a96","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":115,"box":{"x":116,"y":862,"width":768,"height":12}},{"id":"35c18336-de1f-4a5e-896a-796cdcf158b7","block_type":"box","text":"rates resulting in higher mortgage payments by holders of adjustable rate mortgages.","page_number":115,"box":{"x":117,"y":878,"width":637,"height":12}},{"id":"5e46a452-e580-41b7-8e20-42d01588b6a6","block_type":"box","text":"II-67","page_number":115,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"24d198de-2350-438c-93a8-a1026ff6a261","block_type":"box","text":"NM1026U-6033243-115/221","page_number":115,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"e574fa4e-0304-4808-873b-4b4ae2fe2861","block_type":"box","text":"Privately issued mortgage-related securities are not traded on an exchange and there may be a limited","page_number":116,"box":{"x":117,"y":87,"width":767,"height":12}},{"id":"a8f8fa21-d0d0-4967-8ec7-52be1e0285c3","block_type":"box","text":"market for the securities, especially when there is a perceived weakness in the mortgage and real","page_number":116,"box":{"x":117,"y":102,"width":729,"height":13}},{"id":"ebc1ead5-f763-4554-8618-043a6ac5ce49","block_type":"box","text":"estate market sectors. Without an active trading market, mortgage-related securities held in a Fund’s","page_number":116,"box":{"x":116,"y":118,"width":753,"height":12}},{"id":"9a09eff8-a69c-41a0-a6f0-a10c7c5e11bc","block_type":"box","text":"portfolio may be particularly difficult to value because of the complexities involved in assessing the","page_number":116,"box":{"x":117,"y":134,"width":734,"height":12}},{"id":"4f1ca21e-4f47-4af6-926a-dd40b7dfc0c9","block_type":"box","text":"value of the underlying mortgage loans.","page_number":116,"box":{"x":116,"y":149,"width":299,"height":12}},{"id":"a79bf506-70e8-4a2f-971d-da4001ad31ac","block_type":"box","text":"Collateralized Mortgage Obligations (“CMOs”).","page_number":116,"box":{"x":117,"y":180,"width":343,"height":12}},{"id":"7a25b2f1-39b3-4786-9d8c-f49adfa1de5d","block_type":"box","text":"CMOs are debt obligations collateralized by residential","page_number":116,"box":{"x":462,"y":180,"width":415,"height":12}},{"id":"db181beb-2908-49a9-83fe-7c5fe038dd43","block_type":"box","text":"or commercial mortgage loans or residential or commercial mortgage pass-through securities. Interest","page_number":116,"box":{"x":116,"y":196,"width":762,"height":12}},{"id":"7523ef7a-5717-45fc-a29e-e3d760753802","block_type":"box","text":"and prepaid principal are generally paid monthly. CMOs may be collateralized by whole mortgage","page_number":116,"box":{"x":116,"y":211,"width":729,"height":12}},{"id":"87effb56-5abc-4260-8726-073c087128e9","block_type":"box","text":"loans or private mortgage pass-through securities but are more typically collateralized by portfolios of","page_number":116,"box":{"x":117,"y":227,"width":755,"height":12}},{"id":"413975f0-59d6-4c16-b8fc-85a1181a8e4e","block_type":"box","text":"mortgage pass-through securities guaranteed by Ginnie Mae, Freddie Mac, or Fannie Mae. The issuer","page_number":116,"box":{"x":117,"y":242,"width":765,"height":12}},{"id":"5baac4c2-fe39-4d7c-bf3e-53c576d6d665","block_type":"box","text":"of a series of CMOs may elect to be treated as a Real Estate Mortgage Investment Conduit (“REMIC”).","page_number":116,"box":{"x":116,"y":258,"width":769,"height":12}},{"id":"30bdf26a-6611-4f80-933a-da56491ef4e7","block_type":"box","text":"All future references to CMOs also include REMICs.","page_number":116,"box":{"x":116,"y":273,"width":392,"height":10}},{"id":"501164fd-bf35-45be-b1da-52742353ad5b","block_type":"box","text":"CMOs are structured into multiple classes, often referred to as a “tranche,” each issued at a specific","page_number":116,"box":{"x":117,"y":304,"width":746,"height":12}},{"id":"4ffab9db-7b47-429d-9efa-be741f4be3ff","block_type":"box","text":"adjustable or fixed interest rate, and bearing a different stated maturity date and each must be fully","page_number":116,"box":{"x":116,"y":320,"width":738,"height":12}},{"id":"e02cb1a4-d191-4a9b-8c23-813988fdad12","block_type":"box","text":"retired no later than its final distribution date. Actual maturity and average life will depend upon the","page_number":116,"box":{"x":117,"y":335,"width":734,"height":12}},{"id":"5284dc93-3096-49d9-85ff-1fe302b8535c","block_type":"box","text":"prepayment experience of the collateral, which is ordinarily unrelated to the stated maturity date.","page_number":116,"box":{"x":117,"y":351,"width":719,"height":12}},{"id":"8b2f57e1-e629-45c0-820f-b5e0cd11e905","block_type":"box","text":"CMOs often provide for a modified form of call protection through a de facto breakdown of the","page_number":116,"box":{"x":117,"y":366,"width":700,"height":12}},{"id":"7d6a9a72-f3a5-46fd-915b-fa74a4b8bf01","block_type":"box","text":"underlying pool of mortgages according to how quickly the loans are repaid. Monthly payment of","page_number":116,"box":{"x":117,"y":382,"width":718,"height":12}},{"id":"01984a2f-3b87-49d3-91d0-cd98d00203e2","block_type":"box","text":"principal received from the pool of underlying mortgages, including prepayments, is first returned to","page_number":116,"box":{"x":117,"y":397,"width":740,"height":12}},{"id":"9dc0ed4b-d597-4247-91f1-5a38260839da","block_type":"box","text":"investors holding the shortest maturity class. Investors holding the longer maturity classes usually","page_number":116,"box":{"x":117,"y":413,"width":729,"height":12}},{"id":"f4446913-9aef-461b-95fd-5fe3eb4e6f76","block_type":"box","text":"receive principal only after the first class has been retired. An investor may be partially protected","page_number":116,"box":{"x":117,"y":428,"width":719,"height":12}},{"id":"07af4ec9-7e58-4a02-bbf5-d1e415185a0f","block_type":"box","text":"against a sooner than desired return of principal because of the sequential payments.","page_number":116,"box":{"x":116,"y":444,"width":640,"height":12}},{"id":"233a3878-3156-466d-a3ea-c8878c219d68","block_type":"box","text":"Certain issuers of CMOs are not considered investment companies pursuant to a rule adopted by the","page_number":116,"box":{"x":117,"y":475,"width":755,"height":12}},{"id":"31570938-f7be-4764-bb28-d4f49e9129c1","block_type":"box","text":"Commission, and a Fund may invest in the securities of such issuers without the limitations imposed by","page_number":116,"box":{"x":117,"y":490,"width":771,"height":12}},{"id":"79e72914-87d2-4f7f-b1bf-a89b1b05fd36","block_type":"box","text":"the Investment Company Act on investments by a Fund in other investment companies. In addition, in","page_number":116,"box":{"x":116,"y":506,"width":761,"height":12}},{"id":"7affb077-ea04-425d-b4f7-86a934e048d7","block_type":"box","text":"reliance on an earlier Commission interpretation, a Fund’s investments in certain other qualifying","page_number":116,"box":{"x":117,"y":521,"width":721,"height":12}},{"id":"b9f78bda-6835-4166-be13-522632d2257f","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":116,"box":{"x":117,"y":537,"width":753,"height":12}},{"id":"0230f6d3-1114-413c-8f7a-394d7b956cc5","block_type":"box","text":"Company Act on acquiring interests in other investment companies. In order to be able to rely on the","page_number":116,"box":{"x":117,"y":552,"width":750,"height":12}},{"id":"a21268d8-ff83-4552-8f4c-8c7fcf6593de","block_type":"box","text":"Commission’s interpretation, these CMOs must be unmanaged, fixed asset issuers, that: (1) invest","page_number":116,"box":{"x":117,"y":568,"width":736,"height":12}},{"id":"e0cba092-f703-4127-9abd-14c41db4a622","block_type":"box","text":"primarily in mortgage-backed securities; (2) do not issue redeemable securities; (3) operate under","page_number":116,"box":{"x":117,"y":583,"width":730,"height":12}},{"id":"4d5ccfe9-abf8-44f8-9279-6ba3fea16eb9","block_type":"box","text":"general exemptive orders exempting them from all provisions of the Investment Company Act; and","page_number":116,"box":{"x":116,"y":599,"width":736,"height":12}},{"id":"01bce93c-87be-470e-afcc-cc2f58ed670a","block_type":"box","text":"(4) are not registered or regulated under the Investment Company Act as investment companies. To","page_number":116,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"124115b5-f658-4861-8e42-df899146b66f","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":116,"box":{"x":116,"y":630,"width":674,"height":12}},{"id":"591b49b1-2d3e-44ad-a09e-046cffcaf90a","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":116,"box":{"x":117,"y":645,"width":738,"height":12}},{"id":"ca7f4351-70d6-40c6-9587-47b8760d391a","block_type":"box","text":"acquire more than 3% of the voting securities of any single such entity.","page_number":116,"box":{"x":116,"y":661,"width":524,"height":12}},{"id":"5784a5f0-597a-41fb-a576-20d1561396eb","block_type":"box","text":"A Fund may also invest in, among other things, parallel pay CMOs, sequential pay CMOs, and floating","page_number":116,"box":{"x":116,"y":692,"width":759,"height":12}},{"id":"daee4dbe-5917-41c8-836f-aa5603c7c851","block_type":"box","text":"rate CMOs. Parallel pay CMOs are structured to provide payments of principal on each payment date","page_number":116,"box":{"x":117,"y":707,"width":752,"height":12}},{"id":"55d706df-aa43-4256-8a58-3bfa58323b4b","block_type":"box","text":"to more than one class, concurrently on a proportionate or disproportionate basis. These simultaneous","page_number":116,"box":{"x":116,"y":723,"width":761,"height":12}},{"id":"09020290-97a9-4a1c-981c-33e1b93d2c35","block_type":"box","text":"payments are taken into account in calculating the final distribution date of each class. Sequential pay","page_number":116,"box":{"x":117,"y":738,"width":754,"height":12}},{"id":"aae058f0-3da5-4657-8269-8d24a24f5ed5","block_type":"box","text":"CMOs generally pay principal to only one class at a time while paying interest to several classes. A","page_number":116,"box":{"x":117,"y":754,"width":734,"height":12}},{"id":"28ceb6ed-ebc2-49a5-a26a-d752c38fa124","block_type":"box","text":"wide variety of REMIC Certificates may be issued in the parallel pay or sequential pay structures.","page_number":116,"box":{"x":116,"y":769,"width":719,"height":12}},{"id":"2a794bf8-8b82-4963-965e-894a55c4c96a","block_type":"box","text":"These securities include accrual certificates (also known as “Z-Bonds”), which only accrue interest at a","page_number":116,"box":{"x":116,"y":785,"width":761,"height":12}},{"id":"120356dc-bb39-4881-b2e3-cc0b6c859c2f","block_type":"box","text":"specified rate until all other certificates having an earlier final distribution date have been retired and","page_number":116,"box":{"x":116,"y":800,"width":740,"height":12}},{"id":"edaa9fb3-44f3-4ade-8694-203e33a5a561","block_type":"box","text":"are converted thereafter to an interest-paying security. Floating rate CMOs are securities whose","page_number":116,"box":{"x":116,"y":816,"width":712,"height":12}},{"id":"6493a21e-1bc6-47ee-b279-153981e7cb0f","block_type":"box","text":"coupon rate fluctuates according to some formula related to an existing market index or rate. Typical","page_number":116,"box":{"x":116,"y":831,"width":750,"height":12}},{"id":"e2eb582b-a704-4cd8-92e1-c10680a9435a","block_type":"box","text":"indices would include the eleventh district cost-of-funds index (“COFI”), one-year Treasury yields, and","page_number":116,"box":{"x":117,"y":847,"width":758,"height":12}},{"id":"5c8c48cb-7a3e-4c00-b3b6-249d64a9e6e7","block_type":"box","text":"ten-year Treasury yields.","page_number":116,"box":{"x":116,"y":862,"width":190,"height":12}},{"id":"abb2f771-2ad1-45c3-bdf0-47c1ce60c1a3","block_type":"box","text":"II-68","page_number":116,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7967267e-e11d-4c13-85f0-f882c3a1e00b","block_type":"box","text":"NM1026U-6033243-116/221","page_number":116,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"ab30ec03-bbd2-46ba-841c-cf381bcb0cca","block_type":"box","text":"Classes of CMOs also include planned amortization classes (“PACs”) and targeted amortization","page_number":117,"box":{"x":117,"y":87,"width":715,"height":12}},{"id":"9cd1b6ab-6798-4753-a657-ab41b5f4a17c","block_type":"box","text":"classes (“TACs”). PAC bonds generally require payments of a specified amount of principal on each","page_number":117,"box":{"x":116,"y":102,"width":747,"height":13}},{"id":"5277b64a-cd01-4479-817f-ab248461ddae","block_type":"box","text":"payment date. The scheduled principal payments for PAC Certificates generally have the highest","page_number":117,"box":{"x":117,"y":118,"width":724,"height":12}},{"id":"9fe2344d-3692-4dda-8c29-75ec80ce675d","block_type":"box","text":"priority on each payment date after interest due has been paid to all classes entitled to receive interest","page_number":117,"box":{"x":117,"y":134,"width":764,"height":12}},{"id":"cba73fbb-f621-4d2f-b87a-e54d438dc821","block_type":"box","text":"currently. Shortfalls, if any, are added to the amount payable on the next payment date. The PAC","page_number":117,"box":{"x":116,"y":149,"width":727,"height":12}},{"id":"cd297704-f96d-4d5c-baab-c132d4b4799e","block_type":"box","text":"Certificate payment schedule is taken into account in calculating the final distribution date of each class","page_number":117,"box":{"x":117,"y":165,"width":770,"height":12}},{"id":"7a53a109-fb75-4836-ae96-a9bf9bd94e21","block_type":"box","text":"of PAC. In order to create PAC tranches, one or more tranches generally must be created that absorb","page_number":117,"box":{"x":116,"y":180,"width":761,"height":12}},{"id":"f2b4339d-28d6-43c4-a1b5-4b75d7db97ac","block_type":"box","text":"most of the volatility in the underlying mortgage assets. These tranches (often called “supports” or","page_number":117,"box":{"x":117,"y":196,"width":731,"height":12}},{"id":"396d4cc6-7a76-4745-98be-2a51b2bc677d","block_type":"box","text":"“companion” tranches) tend to have market prices and yields that are more volatile than the PAC","page_number":117,"box":{"x":116,"y":211,"width":723,"height":12}},{"id":"711dfa9f-67a8-4096-b939-bfbae2976df2","block_type":"box","text":"classes.","page_number":117,"box":{"x":116,"y":227,"width":65,"height":9}},{"id":"baef01a3-a8c9-4ba2-bbe1-81fa3b75ee8c","block_type":"box","text":"TACs are similar to PACs in that they require that specified amounts of principal be applied on each","page_number":117,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"e78cb58c-ed59-4483-bfa4-2fa5914a2174","block_type":"box","text":"payment date to one or more classes of REMIC Certificates. A PAC’s payment schedule, however,","page_number":117,"box":{"x":117,"y":273,"width":738,"height":12}},{"id":"5670ab02-f3e4-4e16-a72a-66d52dc98407","block_type":"box","text":"remains in effect as long as prepayment rates on the underlying mortgages do not exceed certain","page_number":117,"box":{"x":117,"y":289,"width":728,"height":12}},{"id":"566b75cc-4dac-4d80-9067-e7645ed3e982","block_type":"box","text":"ranges. In contrast, a TAC provides investors with protection, to a certain level, against either faster","page_number":117,"box":{"x":117,"y":304,"width":743,"height":12}},{"id":"763a8647-0b26-437b-9ed8-ec46759dbc2a","block_type":"box","text":"than expected or slower than expected prepayment rates, but not both. TACs thus provide more cash","page_number":117,"box":{"x":116,"y":320,"width":759,"height":12}},{"id":"368d2dc7-e32d-4e35-a1ba-2f30d0457590","block_type":"box","text":"flow stability than a regular sequential paying class, but less than a PAC. TACs also tend to have","page_number":117,"box":{"x":116,"y":335,"width":725,"height":12}},{"id":"76a93224-6fa8-44bf-9ef0-2b307b5ecfab","block_type":"box","text":"market prices and yields that are more volatile than PACs.","page_number":117,"box":{"x":117,"y":351,"width":437,"height":12}},{"id":"b218eef9-1557-437d-a8ce-dbeb005db17e","block_type":"box","text":"Adjustable Rate Mortgage Securities.","page_number":117,"box":{"x":115,"y":382,"width":277,"height":12}},{"id":"55e46d61-db2a-4829-ac9c-5dcd627de83d","block_type":"box","text":"Adjustable rate mortgage securities (“ARMs”) are pass-through","page_number":117,"box":{"x":393,"y":382,"width":479,"height":12}},{"id":"9f562fa8-bc50-4b33-8212-5074465b7372","block_type":"box","text":"securities collateralized by mortgages with adjustable rather than fixed rates. ARMs eligible for","page_number":117,"box":{"x":116,"y":397,"width":706,"height":12}},{"id":"cc3c0219-eec8-497e-8403-46df8878a580","block_type":"box","text":"inclusion in a mortgage pool generally provide for a fixed initial mortgage interest rate for a set number","page_number":117,"box":{"x":117,"y":413,"width":764,"height":12}},{"id":"648b2bc0-460e-4522-8733-213a41959dad","block_type":"box","text":"of scheduled monthly payments. After that schedule of payments has been completed, the interest","page_number":117,"box":{"x":116,"y":428,"width":736,"height":12}},{"id":"af30ba18-79d9-46e8-9268-3b2de97fc300","block_type":"box","text":"rates are subject to periodic adjustment based on changes to a designated benchmark index.","page_number":117,"box":{"x":117,"y":444,"width":697,"height":12}},{"id":"92c06240-34a4-480b-b508-a47359dc4771","block_type":"box","text":"ARMs contain maximum and minimum rates beyond which the mortgage interest rate may not vary","page_number":117,"box":{"x":116,"y":475,"width":741,"height":12}},{"id":"d9bcac44-5ada-4282-b348-8ad0b9879db8","block_type":"box","text":"over the lifetime of the security. In addition, certain ARMs provide for additional limitations on the","page_number":117,"box":{"x":116,"y":490,"width":722,"height":12}},{"id":"217b74d2-356e-43f1-83a1-be7e220c556b","block_type":"box","text":"maximum amount by which the mortgage interest rate may adjust for any single adjustment period. In","page_number":117,"box":{"x":117,"y":506,"width":758,"height":12}},{"id":"98d8cc73-74b6-4328-b28f-068a6db2aa6e","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":117,"box":{"x":116,"y":521,"width":741,"height":12}},{"id":"6269934b-a5a7-43a4-9cd2-00e941816042","block_type":"box","text":"rate, the ARM’s coupon may represent a below market rate of interest. In these circumstances, the","page_number":117,"box":{"x":117,"y":537,"width":737,"height":12}},{"id":"a655ff92-3a16-4d9a-9a24-ae1f22514fcb","block_type":"box","text":"market value of the ARM security will likely have fallen.","page_number":117,"box":{"x":117,"y":552,"width":412,"height":12}},{"id":"651cb7e5-7b5a-45b8-ac5b-ad4f80c696bd","block_type":"box","text":"Certain ARMs contain limitations on changes in the required monthly payment. In the event that a","page_number":117,"box":{"x":117,"y":583,"width":728,"height":12}},{"id":"a38f9403-8868-4342-931a-23cca12c9eff","block_type":"box","text":"monthly payment is not sufficient to pay the interest accruing on an ARM, any such excess interest is","page_number":117,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"9b5853f9-b8dc-4ad4-bebf-87d7602db59c","block_type":"box","text":"added to the principal balance of the mortgage loan, which is repaid through future monthly payments.","page_number":117,"box":{"x":116,"y":614,"width":764,"height":12}},{"id":"f4f88b2e-e56d-4a23-925d-46fc3f873c14","block_type":"box","text":"If the monthly payment for such an instrument exceeds the sum of the interest accrued at the","page_number":117,"box":{"x":117,"y":630,"width":695,"height":12}},{"id":"920817fd-9a27-4350-bfc6-6da0710131a4","block_type":"box","text":"applicable mortgage interest rate and the principal payment required at such point to amortize the","page_number":117,"box":{"x":116,"y":645,"width":730,"height":12}},{"id":"2fd12ad0-7c76-4b32-ae6c-84bed76a3151","block_type":"box","text":"outstanding principal balance over the remaining term of the loan, the excess is then used to reduce","page_number":117,"box":{"x":116,"y":661,"width":743,"height":12}},{"id":"451567bb-b8a0-4b76-a8cf-1bdd8431dfb0","block_type":"box","text":"the outstanding principal balance of the ARM.","page_number":117,"box":{"x":116,"y":676,"width":338,"height":12}},{"id":"4837dcfb-6d89-45d1-a811-5e93bb6577da","block_type":"box","text":"CMO Residuals.","page_number":117,"box":{"x":117,"y":707,"width":120,"height":10}},{"id":"f41ff80d-3a78-463e-a67d-38a56d4f1ab7","block_type":"box","text":"CMO residuals are derivative mortgage securities issued by agencies or","page_number":117,"box":{"x":244,"y":707,"width":535,"height":12}},{"id":"4b53594a-c818-4892-9011-1ef859889f90","block_type":"box","text":"instrumentalities of the U.S. Government or by private originators of, or investors in, mortgage loans,","page_number":117,"box":{"x":117,"y":723,"width":744,"height":12}},{"id":"81e12660-b9b0-4f21-8c01-ab76b30a7f6d","block_type":"box","text":"including savings and loan associations, homebuilders, mortgage banks, commercial banks,","page_number":117,"box":{"x":117,"y":738,"width":682,"height":12}},{"id":"ab4223fd-5276-4708-a060-f11495b62085","block_type":"box","text":"investment banks, and special purpose entities of the foregoing. The cash flow generated by the","page_number":117,"box":{"x":117,"y":754,"width":713,"height":12}},{"id":"b920d0d1-48b2-4c10-a6cf-f70fc2d8ccf2","block_type":"box","text":"mortgage assets underlying a series of CMOs is applied first to make required payments of principal","page_number":117,"box":{"x":117,"y":769,"width":742,"height":12}},{"id":"d1f1e614-e853-4a7e-aa7b-5fc82887bb67","block_type":"box","text":"and interest on the CMOs and second to pay the related administrative expenses and any","page_number":117,"box":{"x":116,"y":785,"width":668,"height":12}},{"id":"4ef88f53-7203-4601-876a-0b69e12f231b","block_type":"box","text":"management fees of the issuer. The residual in a CMO structure generally represents the interest in","page_number":117,"box":{"x":117,"y":800,"width":740,"height":12}},{"id":"b25fb5f7-9ce5-4359-8b1c-5dd679992d64","block_type":"box","text":"any excess cash flow remaining after making the foregoing payments. Each payment of such excess","page_number":117,"box":{"x":116,"y":816,"width":748,"height":12}},{"id":"d9d37efe-29f2-44a0-aee7-6b303ca8b8c7","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":117,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"7a189cd7-6dab-4307-8505-457aab309fa6","block_type":"box","text":"amount of residual cash flow resulting from a CMO will depend on, among other things, the","page_number":117,"box":{"x":116,"y":847,"width":681,"height":12}},{"id":"c740f1c4-83ab-4e8a-86b2-b8449b805312","block_type":"box","text":"characteristics of the mortgage assets, the coupon rate of each class of CMO, prevailing interest rates,","page_number":117,"box":{"x":116,"y":862,"width":768,"height":12}},{"id":"fbc16159-6e67-434f-89cc-5a11fc09ae8d","block_type":"box","text":"the amount of administrative expenses and the prepayment experience on the mortgage assets. In","page_number":117,"box":{"x":116,"y":878,"width":738,"height":12}},{"id":"b6ed8f12-a578-4bbf-a2e6-9f35605392b0","block_type":"box","text":"II-69","page_number":117,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2d85439e-f640-4aaa-b7c6-588915d9e71d","block_type":"box","text":"NM1026U-6033243-117/221","page_number":117,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"4ed40605-12fc-43e0-8632-e1c25be13e00","block_type":"box","text":"part, the yield to maturity on the CMO residuals is extremely sensitive to prepayments on the related","page_number":118,"box":{"x":117,"y":87,"width":748,"height":12}},{"id":"cc4b3c3e-d5ce-492e-9b50-044c20294a37","block_type":"box","text":"underlying mortgage assets, in the same manner as an interest-only class of stripped mortgage-related","page_number":118,"box":{"x":117,"y":102,"width":770,"height":13}},{"id":"e27b0888-fa38-4ff4-b753-5b216b3544a9","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":118,"box":{"x":116,"y":118,"width":746,"height":12}},{"id":"351c4671-265f-4f6f-bf29-abd2af66f98c","block_type":"box","text":"the yield to maturity on the related CMO residual will also be extremely sensitive to changes in the","page_number":118,"box":{"x":116,"y":134,"width":733,"height":12}},{"id":"42eb99a6-5d82-40e5-a2e5-2e46a93953e6","block_type":"box","text":"level of the index upon which interest rate adjustments are based. In certain circumstances, a Fund","page_number":118,"box":{"x":117,"y":149,"width":741,"height":12}},{"id":"05a25452-9fbf-465b-9511-0c608527735d","block_type":"box","text":"may fail to recoup fully its initial investment in a CMO residual.","page_number":118,"box":{"x":117,"y":165,"width":466,"height":12}},{"id":"e0a548a3-f5dd-4958-b5e7-7e90ba7abb54","block_type":"box","text":"CMO residuals are generally purchased and sold by institutional investors through one or more","page_number":118,"box":{"x":117,"y":196,"width":709,"height":12}},{"id":"6c9c3862-e57b-4ac3-abc0-738fcd5f7c73","block_type":"box","text":"investment banking firms acting as brokers or dealers. Transactions in CMO residuals are generally","page_number":118,"box":{"x":117,"y":211,"width":744,"height":12}},{"id":"694da1ad-111f-427d-b335-89c8e2e2fcdb","block_type":"box","text":"completed only after careful review of the characteristics of the securities in question. In addition, CMO","page_number":118,"box":{"x":116,"y":227,"width":768,"height":12}},{"id":"b50e180b-34a4-43a8-b494-b5de346555ea","block_type":"box","text":"residuals may or, pursuant to an exemption therefrom, may not have been registered under the","page_number":118,"box":{"x":117,"y":242,"width":711,"height":12}},{"id":"882011dd-1fff-49a2-ab13-4a9aa2fb6622","block_type":"box","text":"Securities Act. Residual interests generally are junior to, and may be significantly more volatile than,","page_number":118,"box":{"x":116,"y":258,"width":748,"height":12}},{"id":"5dc9ec7f-3d55-4673-9f61-4437713c5e80","block_type":"box","text":"“regular” CMO and REMIC interests. CMO residuals, whether or not registered under the Securities","page_number":118,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"be3623ca-47a0-438a-8b39-80f57f62519f","block_type":"box","text":"Act, may be subject to certain restrictions on transferability.","page_number":118,"box":{"x":116,"y":289,"width":444,"height":12}},{"id":"935e64c2-d5c4-4fb5-8dc5-13d40acac14d","block_type":"box","text":"Stripped Mortgage-Backed Securities.","page_number":118,"box":{"x":117,"y":320,"width":280,"height":12}},{"id":"d8ab675c-4a26-4021-ae77-88cab81391f6","block_type":"box","text":"A Fund may invest in stripped mortgage-backed securities","page_number":118,"box":{"x":399,"y":320,"width":443,"height":12}},{"id":"0c4e88f3-31a0-46f8-8e1f-44c2b7b894b0","block_type":"box","text":"(“SMBSs”) issued by agencies or instrumentalities of the United States. SMBSs are derivative multi","page_number":118,"box":{"x":117,"y":335,"width":740,"height":12}},{"id":"4fe05540-1900-44d7-8861-28a492296645","block_type":"box","text":"class mortgage-backed securities. SMBS arrangements commonly involve two classes of securities","page_number":118,"box":{"x":116,"y":351,"width":744,"height":12}},{"id":"205909fb-4569-47b3-b7ac-51ae6897b152","block_type":"box","text":"that receive different proportions of the interest and principal distributions on a pool of mortgage","page_number":118,"box":{"x":116,"y":366,"width":716,"height":12}},{"id":"e73d8163-568a-4192-acf2-c6191682db46","block_type":"box","text":"assets. A common variety of SMBS is where one class (the principal only or PO class) receives some","page_number":118,"box":{"x":116,"y":382,"width":759,"height":12}},{"id":"e5dbd0cb-5df5-484e-bac9-c4270d5b459c","block_type":"box","text":"of the interest and most of the principal from the underlying assets, while the other class (the interest","page_number":118,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"ed755cbf-801d-4b89-bcac-f47db6aafbae","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":118,"box":{"x":116,"y":413,"width":755,"height":12}},{"id":"e32c5921-7eae-4250-a113-68fcf0f3bcc5","block_type":"box","text":"case, the IO class receives all of the interest, while","page_number":118,"box":{"x":116,"y":428,"width":382,"height":11}},{"id":"890b6eb1-b184-4b43-bc2b-478fe1be5383","block_type":"box","text":"the PO class receives all of the principal. While a","page_number":118,"box":{"x":498,"y":428,"width":368,"height":12}},{"id":"ebebeb81-9590-49a2-a228-53023ba024d8","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":118,"box":{"x":117,"y":444,"width":758,"height":12}},{"id":"070c8f07-4938-4ba0-9444-b17e5f417c9a","block_type":"box","text":"class. The yield to maturity of an IO class is extremely sensitive to the rate of principal payments","page_number":118,"box":{"x":116,"y":459,"width":720,"height":12}},{"id":"ee1ed854-7a8c-4a51-8f10-68af6422eeca","block_type":"box","text":"(including prepayments) on the related underlying assets, and a rapid rate of principal prepayments in","page_number":118,"box":{"x":117,"y":475,"width":759,"height":12}},{"id":"3654dfa2-4763-4920-aeda-a843e76e5feb","block_type":"box","text":"excess of that considered in pricing the securities will have a material adverse effect on an IO","page_number":118,"box":{"x":116,"y":490,"width":699,"height":12}},{"id":"df6a54ec-9820-49a8-83cc-1b277b2690ad","block_type":"box","text":"security’s yield to maturity. If the underlying mortgage assets experience greater than anticipated","page_number":118,"box":{"x":116,"y":506,"width":724,"height":12}},{"id":"a67b2454-a241-4d35-b198-6e376edcfdd2","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":118,"box":{"x":117,"y":521,"width":760,"height":12}},{"id":"6d8e0aa8-77dc-4a0b-9d53-943f6fa08f15","block_type":"box","text":"certain types of IOs that represent the interest portion of a particular class as opposed to the interest","page_number":118,"box":{"x":116,"y":537,"width":751,"height":12}},{"id":"2f6a48d0-e766-4bbb-b41f-d69397cd6af4","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":118,"box":{"x":117,"y":552,"width":768,"height":12}},{"id":"1313051f-1a6c-42d5-8719-b560c105f04d","block_type":"box","text":"because of the characteristics of the principal portion to which they relate. As a result of the above","page_number":118,"box":{"x":117,"y":568,"width":733,"height":12}},{"id":"95432298-ae15-4d2a-902d-653021519c01","block_type":"box","text":"factors, a Fund generally will purchase IOs only as a component of so called “synthetic” securities. This","page_number":118,"box":{"x":116,"y":583,"width":772,"height":12}},{"id":"fc97b46c-6291-4348-abfd-5d4046a83a70","block_type":"box","text":"means that purchases of IOs will be matched with certain purchases of other securities, such as POs,","page_number":118,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"8eb2483e-2924-49c0-bb54-e87b5c42c526","block_type":"box","text":"inverse floating rate CMOs or fixed rate securities; as interest rates fall, presenting a greater risk of","page_number":118,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"b1190347-8db3-490c-96ff-ab2211e88bf1","block_type":"box","text":"unanticipated prepayments of principal, the negative effect on a Fund because of its holdings of IOs","page_number":118,"box":{"x":117,"y":630,"width":744,"height":12}},{"id":"a9ec7319-2f8c-41db-9abf-0aa1f7549cb3","block_type":"box","text":"should be diminished somewhat because of the increased yield on the inverse floating rate CMOs or","page_number":118,"box":{"x":116,"y":645,"width":751,"height":12}},{"id":"bd9baca4-0156-4f80-9f5c-d33e04048d86","block_type":"box","text":"the increased appreciation on the POs or fixed rate securities.","page_number":118,"box":{"x":116,"y":661,"width":459,"height":12}},{"id":"54f2b841-31e4-409f-a41b-1c968d252818","block_type":"box","text":"Tiered Index Bonds.","page_number":118,"box":{"x":118,"y":692,"width":147,"height":9}},{"id":"8ba60c1c-ac84-4d1f-ba67-c74266f35eb9","block_type":"box","text":"Tiered index bonds are forms of mortgage-related securities. The interest rate on","page_number":118,"box":{"x":271,"y":692,"width":601,"height":12}},{"id":"a068e606-84ca-428e-afe2-70d45de949a1","block_type":"box","text":"a tiered index bond is tied to a specified index or","page_number":118,"box":{"x":116,"y":707,"width":360,"height":12}},{"id":"249b976d-d1bd-4877-a236-acbdd94ea35b","block_type":"box","text":"market rate. So long as this index or market rate is","page_number":118,"box":{"x":482,"y":707,"width":374,"height":12}},{"id":"a1f45767-e7ff-4127-bd1d-483615f8da10","block_type":"box","text":"below a predetermined “strike” rate, the interest rate on the tiered index bond remains fixed. If,","page_number":118,"box":{"x":117,"y":723,"width":698,"height":12}},{"id":"73034de6-041a-4142-8c68-8871ea49e5ed","block_type":"box","text":"however, the specified index or market rate rises above the “strike” rate, the interest rate of the tiered","page_number":118,"box":{"x":117,"y":738,"width":749,"height":12}},{"id":"ac238ba7-380f-4d53-a15a-f0a7d6f4f424","block_type":"box","text":"index bond will decrease. Thus, under these circumstances, the interest rate on a tiered index bond,","page_number":118,"box":{"x":117,"y":754,"width":741,"height":11}},{"id":"42873e9e-2cbc-46b1-abe8-4b2f52385d1e","block_type":"box","text":"like an inverse floater, will move in the opposite direction of prevailing interest rates, with the result that","page_number":118,"box":{"x":117,"y":769,"width":762,"height":12}},{"id":"423d7b68-1981-4270-ab13-944b73e3ce09","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":118,"box":{"x":116,"y":785,"width":727,"height":12}},{"id":"29521570-50b2-486a-98a6-8c9a66d9ba33","block_type":"box","text":"TBA Commitments.","page_number":118,"box":{"x":118,"y":816,"width":142,"height":9}},{"id":"dcf5c6cd-5373-48d8-b511-fdf5c2789c58","block_type":"box","text":"Certain Funds may enter into “to be announced” or “TBA” commitments. TBA","page_number":118,"box":{"x":267,"y":816,"width":573,"height":12}},{"id":"210f1249-6690-4082-949b-b3f7dcc0ab73","block_type":"box","text":"commitments are forward agreements for the purchase or sale of securities, including mortgage","page_number":118,"box":{"x":116,"y":831,"width":716,"height":12}},{"id":"d9657914-f8fa-4362-a6ee-ceb910b6694a","block_type":"box","text":"backed securities for a fixed price, with payment and delivery on an agreed upon future settlement","page_number":118,"box":{"x":117,"y":847,"width":733,"height":12}},{"id":"507437ea-a744-4645-be6a-3609a8eefcde","block_type":"box","text":"date. The specific securities to be delivered are not identified at the trade date. However, delivered","page_number":118,"box":{"x":116,"y":862,"width":737,"height":12}},{"id":"2c656ee9-3183-4159-8378-85b22bff2c28","block_type":"box","text":"securities must meet specified terms, including issuer, rate and mortgage terms. When the Fund enters","page_number":118,"box":{"x":116,"y":878,"width":772,"height":12}},{"id":"fad4256d-b564-44a8-9388-308ab5280aca","block_type":"box","text":"II-70","page_number":118,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"96d80f82-5c62-4b71-85aa-9e2bbb06027b","block_type":"box","text":"NM1026U-6033243-118/221","page_number":118,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"63442ed3-427b-47ef-9114-a5c77b78dcdb","block_type":"box","text":"into a TBA commitment for the sale of mortgage-backed securities for a fixed price, with payment and","page_number":119,"box":{"x":117,"y":87,"width":758,"height":12}},{"id":"4b3224ec-c963-4841-a994-1db7eddd5829","block_type":"box","text":"delivery on an agreed upon future settlement date (which may be referred to as having a short position","page_number":119,"box":{"x":116,"y":102,"width":767,"height":13}},{"id":"b4691f8f-36a0-49c1-a880-0b282ebeb4dc","block_type":"box","text":"in such TBA securities), the Fund may or may not hold the types of mortgage-backed securities","page_number":119,"box":{"x":117,"y":118,"width":712,"height":12}},{"id":"52a45b99-5cf7-46ea-a067-99d13b96b675","block_type":"box","text":"required to be delivered. See “— When-Issued Securities, Delayed Delivery Securities and Forward","page_number":119,"box":{"x":117,"y":134,"width":743,"height":12}},{"id":"4dfd9fc1-0545-42b2-afa9-5107e77bf3bb","block_type":"box","text":"Commitments” below.","page_number":119,"box":{"x":117,"y":149,"width":166,"height":10}},{"id":"cc89b326-8307-42b3-b856-c8218fff4d93","block_type":"box","text":"Mortgage Dollar Rolls.","page_number":119,"box":{"x":116,"y":180,"width":164,"height":12}},{"id":"60c1518a-3be7-45c2-ac19-429a9f34f62f","block_type":"box","text":"Certain Funds may invest in mortgage dollar rolls. In a mortgage dollar roll","page_number":119,"box":{"x":282,"y":180,"width":562,"height":12}},{"id":"4122851d-906a-4be2-947f-edc9979236ca","block_type":"box","text":"transaction, a Fund sells mortgage-backed securities for delivery in the current month and","page_number":119,"box":{"x":116,"y":196,"width":673,"height":12}},{"id":"04c6c61e-7216-413d-9526-90e719ffe385","block_type":"box","text":"simultaneously contracts to repurchase substantially similar securities on a specified future date. The","page_number":119,"box":{"x":116,"y":211,"width":755,"height":12}},{"id":"872dad7b-2522-451c-9b73-489cb6296394","block_type":"box","text":"securities that are repurchased will bear the same interest rate and a similar maturity as those sold, but","page_number":119,"box":{"x":116,"y":227,"width":771,"height":12}},{"id":"73867718-c3fe-424b-9c03-ebce701671e2","block_type":"box","text":"pools of mortgages collateralizing those securities may have different prepayment histories than those","page_number":119,"box":{"x":117,"y":242,"width":762,"height":12}},{"id":"1acc4f36-fb19-4708-bb80-3974cdd342d6","block_type":"box","text":"sold. During the period between the sale and repurchase, a Fund will not be entitled to receive interest","page_number":119,"box":{"x":116,"y":258,"width":765,"height":12}},{"id":"372fee96-3657-4e45-a2a3-f1a265df46b9","block_type":"box","text":"and principal payments on the securities sold. Proceeds of the sale will be invested in additional","page_number":119,"box":{"x":116,"y":273,"width":716,"height":12}},{"id":"724ae777-a302-44ae-85bc-b4401a53d01f","block_type":"box","text":"instruments for the Fund, and the income from these investments will generate income for the Fund. If","page_number":119,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"1aa56d2a-98e2-4148-acfd-499a9cd3d6d3","block_type":"box","text":"such income does not exceed the income, capital appreciation and gain or loss that would have been","page_number":119,"box":{"x":116,"y":304,"width":757,"height":12}},{"id":"3479f94d-d4a3-4c2f-84c2-5e5e91c05655","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":119,"box":{"x":117,"y":320,"width":715,"height":12}},{"id":"e3262ff2-0247-4889-94f5-21b305fe8c79","block_type":"box","text":"investment performance of a Fund compared with what the performance would have been without the","page_number":119,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"7eae9d24-f4be-4cf3-afbe-5266f96de179","block_type":"box","text":"use of dollar rolls.","page_number":119,"box":{"x":117,"y":351,"width":135,"height":9}},{"id":"29e0771d-068a-4055-bf09-c6d8203678e9","block_type":"box","text":"Each mortgage dollar roll transaction is accounted for as a sale or purchase of a portfolio security and","page_number":119,"box":{"x":117,"y":382,"width":760,"height":12}},{"id":"071857c9-6a3d-4b51-87ee-5970435be9a8","block_type":"box","text":"a subsequent purchase or sale of a substantially similar security in the forward market. Transactions in","page_number":119,"box":{"x":116,"y":397,"width":767,"height":12}},{"id":"3986ac7e-da42-48fb-a928-7e8423afad9a","block_type":"box","text":"mortgage dollar rolls may increase trading costs and portfolio turnover.","page_number":119,"box":{"x":117,"y":413,"width":529,"height":12}},{"id":"928fa350-60df-4564-9d86-3f9c951c8932","block_type":"box","text":"In the event the buyer of the securities under a mortgage dollar roll files for bankruptcy or becomes","page_number":119,"box":{"x":117,"y":444,"width":738,"height":12}},{"id":"820a864f-ea4b-4720-9e2b-67a003931497","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":119,"box":{"x":117,"y":459,"width":760,"height":12}},{"id":"eba4b473-817c-4bd6-a229-55c35a2555be","block_type":"box","text":"pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s","page_number":119,"box":{"x":117,"y":475,"width":738,"height":12}},{"id":"58221bc4-c3e7-4fc8-a1ca-b07a31791de4","block_type":"box","text":"obligation to purchase the similar securities in the forward transaction.","page_number":119,"box":{"x":116,"y":490,"width":525,"height":12}},{"id":"a86b8d28-a943-4981-82f8-f1d284a97f23","block_type":"box","text":"A Fund may engage in dollar roll transactions to enhance returns. Successful use of mortgage dollar","page_number":119,"box":{"x":116,"y":521,"width":750,"height":12}},{"id":"8343df87-ab59-4be6-b74e-b050e32244e5","block_type":"box","text":"rolls may depend upon the Manager’s ability to correctly predict interest rates and prepayments. Dollar","page_number":119,"box":{"x":117,"y":537,"width":765,"height":12}},{"id":"fe44e938-12d3-480f-9b08-03426330f13b","block_type":"box","text":"rolls involve the risk that the market value of the securities subject to a Fund’s forward purchase","page_number":119,"box":{"x":117,"y":552,"width":716,"height":12}},{"id":"8628ef89-2b81-44ed-aae7-f7ebf32b98ab","block_type":"box","text":"commitment may decline below, or the market value of the securities subject to a Fund’s forward sale","page_number":119,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"5f71ceab-8e14-4a7b-8b47-70fba47a99a7","block_type":"box","text":"commitment may increase above, the exercise price of the forward commitment. Dollar rolls are","page_number":119,"box":{"x":116,"y":583,"width":715,"height":12}},{"id":"95c4c3f2-3837-444b-a4aa-81ede71478a8","block_type":"box","text":"speculative techniques that can be deemed to involve leverage. There is no assurance that dollar rolls","page_number":119,"box":{"x":116,"y":599,"width":763,"height":12}},{"id":"5965861e-3638-45cd-aa67-8c0bd85fdf42","block_type":"box","text":"can be successfully employed.","page_number":119,"box":{"x":116,"y":614,"width":233,"height":12}},{"id":"247347a1-dc04-49d7-849c-d7b57aabfa10","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward","page_number":119,"box":{"x":117,"y":645,"width":740,"height":12}},{"id":"d9018081-1fb8-448c-87a3-31d6887c9505","block_type":"box","text":"settling securities (e.g., dollar rolls and firm and standby commitments, including TBA commitments)","page_number":119,"box":{"x":116,"y":661,"width":742,"height":12}},{"id":"9b435aca-551b-4649-9344-4265d78158f6","block_type":"box","text":"and non-standard settlement cycle securities notwithstanding the limitation on the issuance of senior","page_number":119,"box":{"x":116,"y":676,"width":746,"height":12}},{"id":"c330d0d9-1949-40ca-a1cc-c85134fc0eab","block_type":"box","text":"securities in Section 18 of the Investment Company Act, provided that the transaction meets the","page_number":119,"box":{"x":116,"y":692,"width":712,"height":12}},{"id":"c4272c1a-f751-4754-b747-2c81eb61733f","block_type":"box","text":"Delayed-Settlement Securities Provision (as defined below under “— When-Issued Securities, Delayed","page_number":119,"box":{"x":117,"y":707,"width":763,"height":12}},{"id":"2be6e2f0-8209-448b-88cd-4ff78067ca31","block_type":"box","text":"Delivery Securities and Forward Commitments”). If a when-issued, forward-settling or non-standard","page_number":119,"box":{"x":117,"y":723,"width":736,"height":12}},{"id":"7a1d338a-786f-4bfd-943e-32c1c3b0a814","block_type":"box","text":"settlement cycle security does not satisfy the Delayed-Settlement Securities Provision, then it is treated","page_number":119,"box":{"x":116,"y":738,"width":766,"height":12}},{"id":"e377914c-b7c5-4060-802f-cd7d3100afa5","block_type":"box","text":"as a Derivatives Transaction under Rule 18f-4. See “— Derivatives — Regulation of Derivatives —","page_number":119,"box":{"x":116,"y":754,"width":731,"height":12}},{"id":"815da535-d762-4868-9cc0-3c19e71d3407","block_type":"box","text":"Rule 18f-4 under the Investment Company Act” above.","page_number":119,"box":{"x":117,"y":769,"width":404,"height":12}},{"id":"b498f6dc-b35d-4e39-a96f-56a751a25d2a","block_type":"box","text":"Net Interest Margin (NIM) Securities.","page_number":119,"box":{"x":117,"y":800,"width":270,"height":12}},{"id":"941b61d3-d2cd-471f-bef2-759b22c686c7","block_type":"box","text":"A Fund may invest in net interest margin (“NIM”) securities.","page_number":119,"box":{"x":394,"y":800,"width":438,"height":12}},{"id":"75675238-7955-4286-ae18-6202af1a946c","block_type":"box","text":"These securities are derivative interest-only mortgage securities structured off home equity loan","page_number":119,"box":{"x":116,"y":816,"width":711,"height":12}},{"id":"f70881f4-2025-4d67-b9ac-1d82ec658af1","block_type":"box","text":"transactions. NIM securities receive any “excess” interest computed after paying coupon costs,","page_number":119,"box":{"x":116,"y":831,"width":710,"height":12}},{"id":"703bc156-3752-4196-8673-f14dd7f33156","block_type":"box","text":"servicing costs and fees and any credit losses associated with the underlying pool of home equity","page_number":119,"box":{"x":116,"y":847,"width":728,"height":12}},{"id":"c0d45a25-8b37-44a2-9535-5e6cc59cb130","block_type":"box","text":"loans. Like traditional stripped mortgage-backed securities, the yield to maturity on a NIM security is","page_number":119,"box":{"x":117,"y":862,"width":745,"height":12}},{"id":"1139796a-37fb-4526-ada2-fec04359c111","block_type":"box","text":"sensitive not only to changes in prevailing interest rates but also to the rate of principal payments","page_number":119,"box":{"x":116,"y":878,"width":725,"height":12}},{"id":"b0cb9759-48cf-4830-9175-2ea0d57f2186","block_type":"box","text":"II-71","page_number":119,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"28a9d45e-8454-4c41-b630-830b0a0624bf","block_type":"box","text":"NM1026U-6033243-119/221","page_number":119,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"825bb63a-3d7c-41a7-bfcf-f0fc3c56496d","block_type":"box","text":"(including prepayments) on the underlying home equity loans. NIM securities are highly sensitive to","page_number":120,"box":{"x":117,"y":87,"width":740,"height":12}},{"id":"904d2e16-d91e-4a8b-80d1-a8cdcfc2a5a6","block_type":"box","text":"credit losses on the underlying collateral and the timing in which those losses are taken.","page_number":120,"box":{"x":116,"y":103,"width":657,"height":12}},{"id":"b2e22fc2-20df-4a15-8022-e0acbe2eb4d9","block_type":"box","text":"Municipal Investments.","page_number":120,"box":{"x":116,"y":134,"width":177,"height":11}},{"id":"503b7406-cab2-4a32-b447-c1b67f5085e0","block_type":"box","text":"Certain Funds may invest in obligations issued by or on behalf of states, territories and possessions of","page_number":120,"box":{"x":117,"y":157,"width":763,"height":12}},{"id":"39b1a356-7f7a-4231-b2ea-4b714688edf3","block_type":"box","text":"the United States and the District of Columbia and their political subdivisions, agencies and","page_number":120,"box":{"x":116,"y":172,"width":681,"height":12}},{"id":"657ed0bd-316d-41a9-b53b-f661ac5d83d9","block_type":"box","text":"instrumentalities, the payments from which, in the opinion of bond counsel to the issuer, are excludable","page_number":120,"box":{"x":117,"y":188,"width":770,"height":12}},{"id":"7b8de83e-39f0-4e48-89bd-ab286807b099","block_type":"box","text":"from gross income for U.S. federal income tax purposes (“Municipal Bonds”). Certain of the Municipal","page_number":120,"box":{"x":116,"y":203,"width":758,"height":12}},{"id":"7d717d67-f2a8-4bf6-a511-014a3876e359","block_type":"box","text":"Funds may also invest in Municipal Bonds that pay interest excludable from gross income for purposes","page_number":120,"box":{"x":117,"y":219,"width":768,"height":12}},{"id":"d3ee5f12-81b0-492c-bf12-c8bb6cd4e016","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":120,"box":{"x":116,"y":234,"width":764,"height":12}},{"id":"ce19e90e-3d9f-4065-924e-9605b42b22f6","block_type":"box","text":"exempt from state and local taxes of the designated state (“State Municipal Bonds”). The Municipal","page_number":120,"box":{"x":116,"y":250,"width":740,"height":12}},{"id":"2a9e8498-3d2c-49bf-b744-88a4dac4616d","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":120,"box":{"x":117,"y":265,"width":762,"height":12}},{"id":"9855360f-00db-4747-9225-6735a64f4b47","block_type":"box","text":"instrumentality thereof, if the Manager believes such securities to pay interest excludable from gross","page_number":120,"box":{"x":117,"y":281,"width":748,"height":12}},{"id":"74823f6a-0616-4998-863d-968a7eafc987","block_type":"box","text":"income for purposes of U.S. federal income tax and state and local income taxes of the designated","page_number":120,"box":{"x":117,"y":296,"width":738,"height":12}},{"id":"8ccb4f1b-d79d-4dac-be2d-cd1b6d47dd68","block_type":"box","text":"state and/or state and local personal property taxes of the designated state (“Non-Municipal","page_number":120,"box":{"x":116,"y":312,"width":686,"height":12}},{"id":"b82098c3-fedd-4841-a239-9fb986533cf1","block_type":"box","text":"Tax-Exempt Securities”). Non-Municipal Tax-Exempt Securities could include trust certificates or other","page_number":120,"box":{"x":116,"y":327,"width":764,"height":12}},{"id":"f16f4820-e0a2-42cf-bfaa-0d640367304b","block_type":"box","text":"instruments evidencing interest in one or more long-term municipal securities. Non-Municipal","page_number":120,"box":{"x":117,"y":343,"width":693,"height":12}},{"id":"d7b3200e-5a03-4041-9835-94b2b44c14f4","block_type":"box","text":"Tax-Exempt Securities also may include securities issued by other investment companies that invest in","page_number":120,"box":{"x":116,"y":358,"width":770,"height":12}},{"id":"48da8049-7611-4e88-985d-28f0bc16bfe5","block_type":"box","text":"municipal bonds, to the extent such investments are permitted by applicable law. Non-Municipal","page_number":120,"box":{"x":117,"y":374,"width":715,"height":12}},{"id":"cedc5b49-76c8-4bde-a3d5-5e3de2bf2932","block_type":"box","text":"Tax-Exempt Securities that pay interest excludable from gross income for U.S. federal income tax","page_number":120,"box":{"x":116,"y":389,"width":731,"height":12}},{"id":"95c40b6e-a4da-430a-bd19-6455a522f657","block_type":"box","text":"purposes will be considered “Municipal Bonds” for purposes of a Municipal Fund’s investment objective","page_number":120,"box":{"x":117,"y":405,"width":769,"height":12}},{"id":"803b565e-f4f0-4af2-b46a-0f7d855c1013","block_type":"box","text":"and policies. Non-Municipal Tax-Exempt Securities that pay interest excludable from gross income for","page_number":120,"box":{"x":116,"y":420,"width":761,"height":12}},{"id":"3cd8df8c-53b0-48d1-86c1-4cf0a2fa1d62","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":120,"box":{"x":117,"y":436,"width":734,"height":12}},{"id":"c06c65f8-45df-4726-94c6-ac26084dc484","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":120,"box":{"x":116,"y":451,"width":745,"height":12}},{"id":"5fb75e1d-7ecc-40eb-8c4c-85fc67d8b4d0","block_type":"box","text":"state will be considered “State Municipal Bonds” for purposes of the investment objective and policies","page_number":120,"box":{"x":116,"y":467,"width":758,"height":12}},{"id":"e94d650d-3524-43bf-8430-a1bd2fc5cef2","block_type":"box","text":"of each of California Municipal Opportunities Fund, New Jersey Municipal Bond Fund, New York","page_number":120,"box":{"x":116,"y":482,"width":720,"height":12}},{"id":"94129531-5570-4b3f-b823-7edb996a785e","block_type":"box","text":"Municipal Opportunities Fund and Pennsylvania Municipal Bond Fund.","page_number":120,"box":{"x":117,"y":498,"width":527,"height":12}},{"id":"e602ce57-abda-487e-9a4a-632e45eddcee","block_type":"box","text":"Risk Factors and Special Considerations Relating to Municipal Bonds.","page_number":120,"box":{"x":116,"y":529,"width":519,"height":12}},{"id":"cf465e16-6691-41fe-bd2f-607db189105f","block_type":"box","text":"The risks and special","page_number":120,"box":{"x":636,"y":529,"width":168,"height":12}},{"id":"9aeaa8de-c5eb-4bbb-a32a-e9a7e76696db","block_type":"box","text":"considerations involved in investment in Municipal Bonds vary with the types of instruments being","page_number":120,"box":{"x":116,"y":544,"width":729,"height":12}},{"id":"8990608b-1f92-4e18-b588-884c6f576ffb","block_type":"box","text":"acquired. Investments in Non-Municipal Tax-Exempt Securities may present similar risks, depending","page_number":120,"box":{"x":116,"y":560,"width":751,"height":12}},{"id":"ac982ad1-789a-49a9-9a74-5a9180439611","block_type":"box","text":"on the particular product. Certain municipal instruments in which a Fund may invest may be","page_number":120,"box":{"x":116,"y":575,"width":685,"height":12}},{"id":"884307fa-00fb-4e82-bd6f-a3a55e8414cc","block_type":"box","text":"characterized as derivatives.","page_number":120,"box":{"x":116,"y":591,"width":218,"height":9}},{"id":"7c68eabb-91dc-4976-b0ae-f7d6fab08f0c","block_type":"box","text":"The value of Municipal Bonds generally may be affected by uncertainties in the municipal markets as a","page_number":120,"box":{"x":116,"y":622,"width":768,"height":12}},{"id":"35127d21-3090-44c1-b899-2049e5b0cb6a","block_type":"box","text":"result of legislation or litigation, including legislation or litigation that changes the taxation of Municipal","page_number":120,"box":{"x":117,"y":637,"width":757,"height":12}},{"id":"e910d879-c45c-43b7-bc66-0c39e7079b3a","block_type":"box","text":"Bonds or the rights of Municipal Bond holders in the event of a bankruptcy. Municipal bankruptcies are","page_number":120,"box":{"x":117,"y":653,"width":764,"height":12}},{"id":"2991427d-4550-40e9-aff9-0cd05ecfb209","block_type":"box","text":"rare and certain provisions of the U.S. Bankruptcy Code governing such bankruptcies are unclear.","page_number":120,"box":{"x":117,"y":668,"width":726,"height":12}},{"id":"fa339c51-9e14-47d1-984d-d93f41bb7a03","block_type":"box","text":"Further, the application of state law to Municipal Bond issuers could produce varying results among the","page_number":120,"box":{"x":117,"y":684,"width":764,"height":12}},{"id":"5577a34e-cc15-4dac-b5b1-fd39d01075ba","block_type":"box","text":"states or among Municipal Bond issuers within a state. These uncertainties could have a significant","page_number":120,"box":{"x":116,"y":699,"width":737,"height":13}},{"id":"3c8865c7-d95b-4ce4-a499-fd35aea81819","block_type":"box","text":"impact on the prices of the Municipal Bonds in which a Fund invests.","page_number":120,"box":{"x":117,"y":715,"width":507,"height":12}},{"id":"36829a92-318b-42a6-8d6a-b45ceeb79ad6","block_type":"box","text":"Description of Municipal Bonds.","page_number":120,"box":{"x":116,"y":746,"width":234,"height":12}},{"id":"5ad016de-61e4-48d7-a699-aaafe0721cec","block_type":"box","text":"Municipal Bonds include debt obligations issued to obtain funds for various public purposes, including","page_number":120,"box":{"x":117,"y":769,"width":751,"height":12}},{"id":"cce36362-6008-4779-84c5-a081925cce16","block_type":"box","text":"the construction of a wide range of public facilities, refunding of outstanding obligations and obtaining","page_number":120,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"82188dac-0fe0-45a0-a62f-87a5e7fc69e2","block_type":"box","text":"funds for general operating expenses and loans to other public institutions and facilities. In addition,","page_number":120,"box":{"x":116,"y":800,"width":737,"height":12}},{"id":"2014a822-8de1-435e-a6e5-2c73bdccea39","block_type":"box","text":"certain types of bonds are issued by or on behalf of public authorities to finance various privately","page_number":120,"box":{"x":116,"y":816,"width":716,"height":12}},{"id":"473390b2-9145-4570-a4e9-4937c8ae6524","block_type":"box","text":"owned or operated facilities, including certain facilities for the local furnishing of electric energy or gas,","page_number":120,"box":{"x":116,"y":831,"width":763,"height":12}},{"id":"2dc9e0c1-9d1c-4fb9-ba52-8a7e9471339e","block_type":"box","text":"sewage facilities, solid waste disposal facilities and other specialized facilities. Such obligations are","page_number":120,"box":{"x":116,"y":847,"width":740,"height":12}},{"id":"dd824275-0eba-41d9-ac74-ac68c8d64836","block_type":"box","text":"included within the term Municipal Bonds if the interest paid thereon is excluded from gross income for","page_number":120,"box":{"x":117,"y":862,"width":764,"height":12}},{"id":"df08c84d-44ac-4a30-be59-1c72d1b9dab9","block_type":"box","text":"U.S. federal income tax purposes and any applicable state and local taxes. Other types of private","page_number":120,"box":{"x":117,"y":878,"width":726,"height":12}},{"id":"6115fe88-407c-4871-9212-37eb6c9d34b5","block_type":"box","text":"II-72","page_number":120,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"87b325f7-e0f1-4adc-b01f-ada8645f7711","block_type":"box","text":"NM1026U-6033243-120/221","page_number":120,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"70888b6a-5c4f-4605-b83a-d39214b36267","block_type":"box","text":"activity bonds, the proceeds of which are used for the construction, equipment or improvement of","page_number":121,"box":{"x":116,"y":87,"width":726,"height":12}},{"id":"25261dd4-e75a-4352-817a-b5a8b1d35bfc","block_type":"box","text":"privately operated industrial or commercial facilities, may constitute Municipal Bonds, although the","page_number":121,"box":{"x":117,"y":102,"width":732,"height":13}},{"id":"21ec0605-3c50-4864-af6b-6bbf2f9d3b43","block_type":"box","text":"current U.S. federal tax laws place substantial limitations on the size of such issues. The interest on","page_number":121,"box":{"x":116,"y":118,"width":745,"height":12}},{"id":"bd6f15ab-a4b2-47f3-8368-5cd4c1ec8d86","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":121,"box":{"x":117,"y":134,"width":742,"height":12}},{"id":"061013d5-d175-408d-86fc-f5a4523c2d2c","block_type":"box","text":"classifications of Municipal Bonds are “general obligation” and “revenue” or “special obligation” bonds,","page_number":121,"box":{"x":116,"y":149,"width":762,"height":12}},{"id":"cf31ce0a-73d0-49ca-992c-74a941469d3d","block_type":"box","text":"which latter category includes private activity bonds (“PABs”) (or “industrial development bonds” under","page_number":121,"box":{"x":116,"y":165,"width":764,"height":12}},{"id":"4945c64c-26dd-447e-8519-534f7979bf71","block_type":"box","text":"pre-1986 law).","page_number":121,"box":{"x":117,"y":180,"width":111,"height":12}},{"id":"ea65861e-abf1-4cfd-9839-1f3c4bce02f5","block_type":"box","text":"General Obligation Bonds.","page_number":121,"box":{"x":117,"y":211,"width":194,"height":12}},{"id":"463c141d-0e3c-4a5e-a63b-d6f3de42f76b","block_type":"box","text":"General obligation bonds are secured by the issuer’s pledge of its full faith,","page_number":121,"box":{"x":313,"y":211,"width":565,"height":12}},{"id":"d5d25b43-9df8-4a6b-bfab-631bb9ef19f8","block_type":"box","text":"credit and taxing power for the payment of principal and interest. The taxing power of any","page_number":121,"box":{"x":116,"y":227,"width":668,"height":12}},{"id":"4d7b575d-b438-4401-af8a-49d064d9797f","block_type":"box","text":"governmental entity may be limited, however, by provisions of its state constitution or laws, and an","page_number":121,"box":{"x":116,"y":242,"width":735,"height":12}},{"id":"2cf22fcd-bdbc-4c77-a6d3-2306605b54c3","block_type":"box","text":"entity’s creditworthiness will depend on many factors, including potential erosion of its tax base due to","page_number":121,"box":{"x":116,"y":258,"width":760,"height":12}},{"id":"dd7e68ff-faec-47e3-a364-689a4c1f4eb3","block_type":"box","text":"population declines, natural disasters, declines in the state’s industrial base or inability to attract new","page_number":121,"box":{"x":117,"y":273,"width":750,"height":12}},{"id":"9b9a60e0-a4e7-4efd-aad3-368a18279905","block_type":"box","text":"industries, economic limits on the ability to tax without eroding the tax base, state legislative proposals","page_number":121,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"cc0230cc-3b66-4015-9ddc-441194c52f2b","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":121,"box":{"x":116,"y":304,"width":740,"height":12}},{"id":"12f62528-8ca1-4196-8730-12c4d1f9b80a","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":121,"box":{"x":116,"y":320,"width":738,"height":12}},{"id":"e006655c-792f-4e29-9e56-b92b292dde3e","block_type":"box","text":"Accordingly, the capacity of the issuer of a general obligation bond as to the timely payment of interest","page_number":121,"box":{"x":116,"y":335,"width":765,"height":12}},{"id":"d64437f0-3579-4036-8cd6-693c9301a823","block_type":"box","text":"and the repayment of principal when due is affected by the issuer’s maintenance of its tax base.","page_number":121,"box":{"x":116,"y":351,"width":717,"height":12}},{"id":"ea336dd1-0a6b-416b-9d57-11cab65faf7a","block_type":"box","text":"Revenue Bonds.","page_number":121,"box":{"x":116,"y":382,"width":122,"height":9}},{"id":"265b79ca-04b3-4ca4-9bf5-ccdf2dfc06d7","block_type":"box","text":"Revenue bonds are payable only from the revenues derived from a particular facility","page_number":121,"box":{"x":240,"y":382,"width":634,"height":12}},{"id":"3c8bbfbc-9d30-4953-bb22-808c77fe5d54","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":121,"box":{"x":116,"y":397,"width":720,"height":12}},{"id":"d37e2ff2-fe9e-4a72-9b05-3a658c5cbbb1","block_type":"box","text":"revenue source such as payments from the user of the facility being financed; accordingly, the timely","page_number":121,"box":{"x":117,"y":413,"width":752,"height":12}},{"id":"dae7da46-a86b-4d11-af3a-2bf187b5f280","block_type":"box","text":"payment of interest and the repayment of principal in accordance with the terms of the revenue or","page_number":121,"box":{"x":117,"y":428,"width":729,"height":12}},{"id":"19cd0173-913b-4f61-b8f3-19ca8149f602","block_type":"box","text":"special obligation bond is a function of the economic viability of such facility or such revenue source.","page_number":121,"box":{"x":116,"y":444,"width":749,"height":12}},{"id":"175c0222-b7f6-4c44-83e6-91697391fb4c","block_type":"box","text":"Revenue bonds issued by state or local agencies to finance the development of low-income, multi","page_number":121,"box":{"x":117,"y":475,"width":730,"height":12}},{"id":"1f7ea0b7-df5c-474e-92cb-b06a94cb1f36","block_type":"box","text":"family housing involve special risks in addition to those associated with municipal bonds generally,","page_number":121,"box":{"x":116,"y":490,"width":735,"height":12}},{"id":"8ca511f5-c21b-4654-ae18-4c263236bdf2","block_type":"box","text":"including that the underlying properties may not generate sufficient income to pay expenses and","page_number":121,"box":{"x":117,"y":506,"width":718,"height":12}},{"id":"6dfcfcbe-a322-4612-a380-a9194fbf774e","block_type":"box","text":"interest costs. Such bonds are generally non-recourse against the property owner, may be junior to the","page_number":121,"box":{"x":117,"y":521,"width":768,"height":12}},{"id":"4c27fef5-95c0-44f6-96b8-2ec8db00207a","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":121,"box":{"x":117,"y":537,"width":746,"height":12}},{"id":"75c4c557-2959-4a92-92ce-9408c4106904","block_type":"box","text":"financial performance of the property, may be prepayable without penalty and may be used to finance","page_number":121,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"2f56372f-8c69-4e42-83a4-cbf63b5be35c","block_type":"box","text":"the construction of housing developments which, until completed and rented, do not generate income","page_number":121,"box":{"x":116,"y":568,"width":757,"height":12}},{"id":"3167c538-1f0b-4fe4-82fe-0153a22b8854","block_type":"box","text":"to pay interest. Increases in interest rates payable on senior obligations may make it more difficult for","page_number":121,"box":{"x":116,"y":583,"width":755,"height":12}},{"id":"acc103b9-b90d-42a4-885b-c2761460f940","block_type":"box","text":"issuers to meet payment obligations on subordinated bonds.","page_number":121,"box":{"x":117,"y":599,"width":452,"height":12}},{"id":"c793e456-c40a-447f-9297-4df253bff520","block_type":"box","text":"PABs.","page_number":121,"box":{"x":116,"y":630,"width":45,"height":9}},{"id":"1d898df3-a989-4da4-84ac-c45f424706f9","block_type":"box","text":"PABs are, in most cases, tax-exempt securities issued by states, municipalities or public","page_number":121,"box":{"x":162,"y":630,"width":666,"height":12}},{"id":"f2f93d8c-2789-43ac-b400-1908172214e2","block_type":"box","text":"authorities to provide funds, usually through a loan or lease arrangement, to a private entity for the","page_number":121,"box":{"x":116,"y":645,"width":735,"height":12}},{"id":"7d0d1a21-1530-4651-a2dd-63db905c2cb2","block_type":"box","text":"purpose of financing construction or improvement of a facility to be used by the entity. Such bonds are","page_number":121,"box":{"x":117,"y":661,"width":757,"height":12}},{"id":"b7653717-ad10-43fb-a941-893c8269e847","block_type":"box","text":"secured primarily by revenues derived from loan repayments or lease payments due from the entity,","page_number":121,"box":{"x":116,"y":676,"width":741,"height":12}},{"id":"d5edfc34-081a-4529-a11c-bc36785bbe8d","block_type":"box","text":"which may or may not be guaranteed by a parent company or otherwise secured. PABs generally are","page_number":121,"box":{"x":116,"y":692,"width":752,"height":12}},{"id":"672a1e1b-19f6-4852-9880-16112d89b10f","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":121,"box":{"x":117,"y":707,"width":759,"height":12}},{"id":"d8ac4fae-f1e5-406b-908f-39b6778cfaf9","block_type":"box","text":"understand that repayment of such bonds generally depends on the revenues of a private entity and be","page_number":121,"box":{"x":117,"y":723,"width":766,"height":12}},{"id":"8585714a-0390-4882-8efe-80b8aff515cb","block_type":"box","text":"aware of the risks that such an investment may entail. The continued ability of an entity to generate","page_number":121,"box":{"x":116,"y":738,"width":736,"height":12}},{"id":"5be3e953-4eff-469b-bf4e-54db17c1a55f","block_type":"box","text":"sufficient revenues for the payment of principal and interest on such bonds will be affected by many","page_number":121,"box":{"x":116,"y":754,"width":739,"height":12}},{"id":"826a9c57-c832-4cf7-b858-22cee3157688","block_type":"box","text":"factors including the size of the entity, its capital structure, demand for its products or services,","page_number":121,"box":{"x":116,"y":769,"width":700,"height":12}},{"id":"483f4256-a29e-4e0d-89c0-87de41723ae5","block_type":"box","text":"competition, general economic conditions, government regulation and the entity’s dependence on","page_number":121,"box":{"x":116,"y":785,"width":723,"height":12}},{"id":"17f65f44-070e-4130-9817-7a1c79779903","block_type":"box","text":"revenues for the operation of the particular facility being financed.","page_number":121,"box":{"x":117,"y":800,"width":485,"height":12}},{"id":"869f5fd3-0696-4029-afef-7c650fa687eb","block_type":"box","text":"Moral Obligation Bonds.","page_number":121,"box":{"x":116,"y":831,"width":178,"height":12}},{"id":"277b1b12-177b-416c-b98f-2cd3c925e608","block_type":"box","text":"“Moral obligation” bonds are normally issued by special purpose public","page_number":121,"box":{"x":295,"y":831,"width":534,"height":12}},{"id":"dbae0d41-99ee-4f40-a773-59d86387264b","block_type":"box","text":"authorities. If an issuer of moral obligation bonds is unable to meet its obligations, the repayment of","page_number":121,"box":{"x":116,"y":847,"width":742,"height":12}},{"id":"9107a2ef-ddb4-4e00-a5f8-f5e709b9248b","block_type":"box","text":"such bonds becomes a moral commitment but not a legal obligation of the state or municipality that","page_number":121,"box":{"x":116,"y":862,"width":741,"height":12}},{"id":"7c9f9222-4137-4b6a-8787-9ba75376257c","block_type":"box","text":"created the special purpose public authority that issued the bonds.","page_number":121,"box":{"x":116,"y":878,"width":498,"height":12}},{"id":"5d4355a6-719e-4e0c-8cf0-74dc6fc1852c","block_type":"box","text":"II-73","page_number":121,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3c00fbe2-b0f9-46dd-8849-8d9a8a05a8cd","block_type":"box","text":"NM1026U-6033243-121/221","page_number":121,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"4d309859-b441-448c-950d-25f62ecb0516","block_type":"box","text":"Municipal Notes.","page_number":122,"box":{"x":116,"y":87,"width":122,"height":12}},{"id":"9f36131b-0509-48b1-8da9-af1c43022c59","block_type":"box","text":"Municipal notes are shorter term municipal debt obligations. They may provide interim","page_number":122,"box":{"x":240,"y":87,"width":647,"height":12}},{"id":"8a050324-6613-4893-a744-a4bb887f5bb0","block_type":"box","text":"financing in anticipation of tax collection, bond sales or revenue receipts. If there is a shortfall in the","page_number":122,"box":{"x":116,"y":102,"width":742,"height":13}},{"id":"a2e23cfe-86dd-4b01-b708-9aa7acaba647","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":122,"box":{"x":116,"y":118,"width":772,"height":12}},{"id":"0c4ca8cf-2f6a-4723-b90c-2c92d53b3d50","block_type":"box","text":"Fund may lose money.","page_number":122,"box":{"x":117,"y":134,"width":174,"height":12}},{"id":"92ace47d-0a7a-440f-8db9-8202c6adc6c0","block_type":"box","text":"Municipal Commercial Paper.","page_number":122,"box":{"x":116,"y":165,"width":218,"height":11}},{"id":"53939b95-b367-47b1-a174-bcebb950e3c3","block_type":"box","text":"Municipal commercial paper is generally unsecured and issued to meet","page_number":122,"box":{"x":335,"y":165,"width":539,"height":12}},{"id":"fc135627-93cd-46f9-9c5b-c2d85feac049","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":122,"box":{"x":116,"y":180,"width":728,"height":12}},{"id":"ae8f5178-74da-4512-97fb-e9f4d899911e","block_type":"box","text":"event of an issuer’s bankruptcy, unsecured creditors are repaid only after the secured creditors out of","page_number":122,"box":{"x":116,"y":196,"width":757,"height":12}},{"id":"db9f92eb-bde4-4494-a47e-29052063cc68","block_type":"box","text":"the assets, if any, that remain.","page_number":122,"box":{"x":116,"y":211,"width":229,"height":12}},{"id":"23f3bbdf-7515-4cb7-bc03-2a40ee52bf9a","block_type":"box","text":"Municipal Lease Obligations.","page_number":122,"box":{"x":116,"y":242,"width":213,"height":12}},{"id":"3ee49003-49eb-4955-8a9a-586d4ef5250a","block_type":"box","text":"Also included within the general category of Municipal Bonds are","page_number":122,"box":{"x":331,"y":242,"width":491,"height":12}},{"id":"515e66b5-5920-4e61-8232-b0918ec6d683","block_type":"box","text":"certificates of participation (“COPs”) issued by government authorities or entities to finance the","page_number":122,"box":{"x":116,"y":258,"width":706,"height":12}},{"id":"9e53a86a-9d36-48ab-aaf3-ba5db02cef1d","block_type":"box","text":"acquisition or construction of equipment, land and/or facilities. The COPs represent participations in a","page_number":122,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"dea6f104-f93b-4256-b0d2-c64acc21a0ae","block_type":"box","text":"lease, an installment purchase contract or a conditional sales contract (hereinafter collectively called","page_number":122,"box":{"x":117,"y":289,"width":748,"height":12}},{"id":"437d501a-3c81-4711-8f89-75226ca9d125","block_type":"box","text":"“lease obligations”) relating to such equipment, land or facilities. Municipal leases, like other municipal","page_number":122,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"4f3291d7-2313-4008-a3b5-cd60b4cbd072","block_type":"box","text":"debt obligations, are subject to the risk of non-payment. Although lease obligations do not constitute","page_number":122,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"437c675e-9002-4e28-ba10-30ab43d8d3a4","block_type":"box","text":"general obligations of the issuer for which the issuer’s unlimited taxing power is pledged, a lease","page_number":122,"box":{"x":116,"y":335,"width":721,"height":12}},{"id":"487688b4-4f94-4649-8859-46b34348c5c2","block_type":"box","text":"obligation is frequently backed by the issuer’s covenant to budget for, appropriate and make the","page_number":122,"box":{"x":116,"y":351,"width":716,"height":12}},{"id":"dcc22ca0-b221-4fb8-ad80-d3b58564cd27","block_type":"box","text":"payments due under the lease obligation. However, certain lease obligations contain","page_number":122,"box":{"x":117,"y":366,"width":631,"height":12}},{"id":"a4996413-d4b5-4249-9efe-982b8f4f5905","block_type":"box","text":"“non-appropriation” clauses, which provide that the issuer has no obligation to make lease or","page_number":122,"box":{"x":116,"y":382,"width":693,"height":12}},{"id":"9a6d9ac5-94f1-4555-ac28-ae39cbcb2448","block_type":"box","text":"installment purchase payments in future years unless money is appropriated for such purpose on a","page_number":122,"box":{"x":117,"y":397,"width":739,"height":12}},{"id":"9168b7d6-081d-4eca-8939-5e757569b6c0","block_type":"box","text":"yearly basis. Although “non-appropriation” lease obligations are secured by the leased property,","page_number":122,"box":{"x":116,"y":413,"width":716,"height":12}},{"id":"8cd78df4-6622-471f-af57-77493eec35c2","block_type":"box","text":"disposition of the property in the event of foreclosure might prove difficult. These securities represent a","page_number":122,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"76712ff2-b7d9-4ed2-b30a-023f31382319","block_type":"box","text":"type of financing that has not yet developed the depth of marketability associated with more","page_number":122,"box":{"x":116,"y":444,"width":685,"height":12}},{"id":"54d8e536-2f27-49b1-832e-acd3c6822367","block_type":"box","text":"conventional securities. Certain investments in lease obligations may be illiquid.","page_number":122,"box":{"x":116,"y":459,"width":596,"height":12}},{"id":"e135f8c0-fa15-4ae8-8a2d-3764e4ee2f1a","block_type":"box","text":"The ability of issuers of municipal leases to make timely lease payments may be adversely impacted in","page_number":122,"box":{"x":116,"y":490,"width":769,"height":12}},{"id":"45c3f7ac-ad1d-4e1d-8923-09c17eef92e6","block_type":"box","text":"general economic downturns and as relative governmental cost burdens are allocated and reallocated","page_number":122,"box":{"x":116,"y":506,"width":762,"height":12}},{"id":"679c4c54-5871-4548-a1e8-b1de069aaa29","block_type":"box","text":"among federal, state and local governmental units. Such non-payment would result in a reduction of","page_number":122,"box":{"x":116,"y":521,"width":746,"height":12}},{"id":"47db3303-ffd4-4949-8605-c025ab06f96d","block_type":"box","text":"income to a Fund, and could result in a reduction in the value of the municipal lease experiencing","page_number":122,"box":{"x":117,"y":537,"width":726,"height":12}},{"id":"22c93adc-e87d-4739-8998-35d16004ebee","block_type":"box","text":"non-payment and a potential decrease in the NAV of a Fund. Issuers of municipal securities might","page_number":122,"box":{"x":117,"y":552,"width":731,"height":12}},{"id":"e1ee930b-51c0-46fe-8c1e-f68dfbd77dff","block_type":"box","text":"seek protection under the bankruptcy laws. In the event of bankruptcy of such an issuer, a Fund could","page_number":122,"box":{"x":116,"y":568,"width":762,"height":12}},{"id":"c659ecff-154b-4cb1-bf96-7ade65a63672","block_type":"box","text":"experience delays and limitations with respect to the collection of principal and interest on such","page_number":122,"box":{"x":116,"y":583,"width":711,"height":12}},{"id":"5be59d47-76e5-415c-add6-0ad93efa9cc4","block_type":"box","text":"municipal leases and a Fund may not, in all circumstances, be able to collect all principal and interest","page_number":122,"box":{"x":117,"y":599,"width":755,"height":12}},{"id":"e28d90d8-b594-42e0-9403-e93f792c24c4","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":122,"box":{"x":116,"y":614,"width":740,"height":12}},{"id":"a112f52e-e5ce-4cf1-a6d1-58bd4dd8dcc6","block_type":"box","text":"take possession of and manage the assets securing the issuer’s obligations on such securities, which","page_number":122,"box":{"x":116,"y":630,"width":758,"height":12}},{"id":"6c1cd08e-8be8-4a0d-95c1-2342203e242e","block_type":"box","text":"may increase a Fund’s operating expenses and adversely affect the NAV of a Fund. When the lease","page_number":122,"box":{"x":117,"y":645,"width":749,"height":12}},{"id":"1d80a6d8-3aa6-4e39-841a-cb432d69d637","block_type":"box","text":"contains a non-appropriation clause, however, the failure to pay would not be a default and a Fund","page_number":122,"box":{"x":116,"y":661,"width":731,"height":12}},{"id":"78f721fd-6131-4a3f-8871-9dddb4028e33","block_type":"box","text":"would not have the right to take possession of the assets. Any income derived from a Fund’s","page_number":122,"box":{"x":116,"y":676,"width":687,"height":12}},{"id":"20ad1b87-2b75-474e-a812-a99fdba11ba8","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":122,"box":{"x":116,"y":692,"width":760,"height":12}},{"id":"074ecd3e-2ab1-4524-bea5-7b6dbd32f604","block_type":"box","text":"as a “regulated investment company” under the Code, may limit the extent to which a Fund may","page_number":122,"box":{"x":116,"y":707,"width":712,"height":12}},{"id":"7e6d0a6a-2274-42d7-8f03-21634116808a","block_type":"box","text":"exercise its rights by taking possession of such assets, because as a regulated investment company a","page_number":122,"box":{"x":116,"y":723,"width":760,"height":12}},{"id":"df97a35c-4a90-41cd-adf0-f4528a962106","block_type":"box","text":"Fund is subject to certain limitations on its investments and on the nature of its income.","page_number":122,"box":{"x":117,"y":738,"width":644,"height":12}},{"id":"de234f11-8197-4bdd-83f4-08e5dae44707","block_type":"box","text":"Tender Option Bonds.","page_number":122,"box":{"x":118,"y":769,"width":161,"height":12}},{"id":"7811f243-4255-4cc5-aea2-cd3e61c8d08b","block_type":"box","text":"Certain Funds may invest in residual inverse floating rate interest tender option","page_number":122,"box":{"x":286,"y":769,"width":585,"height":12}},{"id":"02875643-7838-445b-95e4-2235814279d4","block_type":"box","text":"bonds (“TOB Residuals”), which are derivative interests in Municipal Bonds. The TOB Residuals in","page_number":122,"box":{"x":117,"y":785,"width":730,"height":12}},{"id":"0d5e62fd-c91f-42d5-9149-bdc30b6e70a2","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":122,"box":{"x":116,"y":800,"width":710,"height":12}},{"id":"c54eabd2-6678-4ee9-a8fe-342bc68ccceb","block_type":"box","text":"exempt from regular U.S. federal income tax. BlackRock will not conduct its own analysis of the tax","page_number":122,"box":{"x":116,"y":816,"width":735,"height":12}},{"id":"2eb6bc72-cee1-47ef-8fbb-5b38d00e2d5c","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":122,"box":{"x":116,"y":831,"width":772,"height":12}},{"id":"167b732f-f0ba-4057-8ab9-d26aa8c18799","block_type":"box","text":"counsel to the issuer. Although volatile, TOB Residuals typically offer the potential for yields exceeding","page_number":122,"box":{"x":116,"y":847,"width":767,"height":12}},{"id":"a027daae-481b-40ed-a88b-331d261bd5c1","block_type":"box","text":"the yields available on fixed rate Municipal Bonds with comparable credit quality. The Funds may","page_number":122,"box":{"x":116,"y":862,"width":724,"height":12}},{"id":"b5e059db-d58b-4ade-b48c-7c074cd36005","block_type":"box","text":"invest in TOB Residuals for the purpose of using economic leverage.","page_number":122,"box":{"x":117,"y":878,"width":515,"height":12}},{"id":"419878b0-3eca-42a3-a2dd-eabb8c79ac52","block_type":"box","text":"II-74","page_number":122,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f97a3c96-0804-4876-9153-04f961a9568b","block_type":"box","text":"NM1026U-6033243-122/221","page_number":122,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"054e142e-bc73-4d5a-b801-3855e4ab9e2a","block_type":"box","text":"TOB Residuals represent beneficial interests in a special purpose trust formed for the purpose of","page_number":123,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"0788b583-8b1b-4b16-9e14-e4020ee0e6b2","block_type":"box","text":"holding Municipal Bonds contributed by one or more funds (a “TOB Trust”). A TOB Trust typically","page_number":123,"box":{"x":117,"y":102,"width":724,"height":13}},{"id":"67f2e439-286d-4af1-b607-b63c230752e1","block_type":"box","text":"issues two classes of beneficial interests: short-term floating rate interests (“TOB Floaters”), which are","page_number":123,"box":{"x":117,"y":118,"width":762,"height":12}},{"id":"65fb3215-9c46-40f2-aa4d-c351f5e2f54d","block_type":"box","text":"sold to third-party investors, and TOB Residuals, which are generally issued to the fund(s) that","page_number":123,"box":{"x":116,"y":134,"width":706,"height":12}},{"id":"33983496-65e4-4cab-b911-631f644ec117","block_type":"box","text":"transferred Municipal Bonds to the TOB Trust. The Funds may invest in both TOB Floaters and TOB","page_number":123,"box":{"x":116,"y":149,"width":750,"height":12}},{"id":"574642a0-f936-4854-9ab0-8607f6277179","block_type":"box","text":"Residuals. TOB Floaters may have first priority on the cash flow from the Municipal Bonds held by the","page_number":123,"box":{"x":117,"y":165,"width":759,"height":12}},{"id":"ad2c167b-f0c3-415c-ae9a-c6f8745915f6","block_type":"box","text":"TOB Trust and are enhanced with a liquidity support arrangement from a third-party Liquidity Provider","page_number":123,"box":{"x":116,"y":180,"width":760,"height":12}},{"id":"35e182f0-9c53-4a90-8034-8e4c3dcff474","block_type":"box","text":"(defined below) which allows holders to tender their position at par (plus accrued interest). A Fund, as","page_number":123,"box":{"x":117,"y":196,"width":758,"height":12}},{"id":"bac5bc83-c2c8-4be7-8c0e-673c99333f6a","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":123,"box":{"x":116,"y":211,"width":759,"height":12}},{"id":"50f0c47e-373f-45fa-80f7-d43c8e65c9b8","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":123,"box":{"x":116,"y":227,"width":757,"height":12}},{"id":"ac93fe6b-0d87-426c-8e77-2d114389821f","block_type":"box","text":"TOB Floaters, less certain transaction costs, and typically will invest the cash to purchase additional","page_number":123,"box":{"x":116,"y":242,"width":746,"height":12}},{"id":"bf583ba3-4482-4d47-9929-52ae19b488a2","block_type":"box","text":"Municipal Bonds or other investments permitted by its investment policies. If a Fund ever purchases all","page_number":123,"box":{"x":117,"y":258,"width":767,"height":12}},{"id":"183343fb-07b8-4591-8165-bd960f0e1581","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":123,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"57f702ff-26f3-4421-b113-f76e868fab0b","block_type":"box","text":"with a proportionate amount of TOB Residuals to the TOB Trust in exchange for a proportionate","page_number":123,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"25749fc7-94e3-42b5-a44a-2a7499f5a6f7","block_type":"box","text":"amount of the Municipal Bonds owned by the TOB Trust.","page_number":123,"box":{"x":116,"y":304,"width":427,"height":12}},{"id":"8e016c2d-ba5a-4798-94ef-5f6a2c7ffae0","block_type":"box","text":"Other BlackRock-advised funds may contribute Municipal Bonds to a TOB Trust into which a Fund has","page_number":123,"box":{"x":116,"y":335,"width":767,"height":12}},{"id":"e9b4d30c-87b9-4de9-9cd2-a42295dd34a7","block_type":"box","text":"contributed Municipal Bonds. If multiple BlackRock-advised funds participate in the same TOB Trust,","page_number":123,"box":{"x":116,"y":351,"width":752,"height":12}},{"id":"819ffb96-4b6e-4a94-9d75-94adc0170e69","block_type":"box","text":"the economic rights and obligations under the TOB Residual will generally be shared among the funds","page_number":123,"box":{"x":116,"y":366,"width":764,"height":12}},{"id":"d10a0d82-a7df-40f6-9252-cd1e550517e6","block_type":"box","text":"ratably in proportion to their participation in the TOB Trust.","page_number":123,"box":{"x":117,"y":382,"width":437,"height":12}},{"id":"c98631d1-787b-4eee-8b89-18073b675a0f","block_type":"box","text":"The Municipal Bonds transferred to a TOB Trust typically are high grade Municipal Bonds. In certain","page_number":123,"box":{"x":116,"y":413,"width":747,"height":12}},{"id":"4cc68116-3027-4df5-a0a4-4e63f7494c99","block_type":"box","text":"cases, when Municipal Bonds transferred are lower grade Municipal Bonds, the TOB Trust transaction","page_number":123,"box":{"x":116,"y":428,"width":764,"height":12}},{"id":"ca4b5f69-af47-470d-8c65-5ca0f15afca2","block_type":"box","text":"includes a credit enhancement feature that provides for the timely payment of principal and interest on","page_number":123,"box":{"x":117,"y":444,"width":762,"height":12}},{"id":"13e6c40a-aef5-49f6-a885-e6fc80933e3a","block_type":"box","text":"the bonds to the TOB Trust by a credit enhancement provider. The TOB Trust would be responsible for","page_number":123,"box":{"x":116,"y":459,"width":770,"height":12}},{"id":"d2d2ab20-c377-4acb-8ca5-2afb5d63e156","block_type":"box","text":"the payment of the credit enhancement fee and a Fund, as a TOB Residual holder, would be","page_number":123,"box":{"x":116,"y":475,"width":693,"height":12}},{"id":"4980e989-62b6-4e15-bcf8-50d4d1f67171","block_type":"box","text":"responsible for reimbursement of any payments of principal and interest made by the credit","page_number":123,"box":{"x":117,"y":490,"width":681,"height":12}},{"id":"7c2b4c7a-8f14-4513-a60e-b7bfd51cfe69","block_type":"box","text":"enhancement provider.","page_number":123,"box":{"x":116,"y":506,"width":176,"height":12}},{"id":"09a9dfac-1b80-4685-a4e5-83d4b75252a3","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":123,"box":{"x":116,"y":537,"width":760,"height":12}},{"id":"d42da66a-08c8-4515-923d-ee9b489e111b","block_type":"box","text":"proportional share of the TOB Floaters to tender their notes to the TOB Trust at par plus accrued","page_number":123,"box":{"x":117,"y":552,"width":722,"height":12}},{"id":"7d654e97-7290-44e4-a919-879a06d8978c","block_type":"box","text":"interest. Thereafter, the Fund may withdraw a corresponding share of the Municipal Bonds from the","page_number":123,"box":{"x":117,"y":568,"width":743,"height":12}},{"id":"a9fdb989-4639-4a85-9a04-e89ab4e1b0ed","block_type":"box","text":"TOB Trust. This transaction, in effect, creates exposure for the Fund to the entire return of the","page_number":123,"box":{"x":116,"y":583,"width":702,"height":12}},{"id":"fe636160-b7e9-4ad7-9f94-09fd356c222a","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":123,"box":{"x":117,"y":599,"width":770,"height":12}},{"id":"8e20b223-c9c1-413c-8c18-20df736ff56e","block_type":"box","text":"the Municipal Bonds in the TOB Trust. This multiplies the positive or negative impact of the Municipal","page_number":123,"box":{"x":116,"y":614,"width":755,"height":12}},{"id":"c2e54072-bcb6-413c-8501-96233a8a4a68","block_type":"box","text":"Bonds’ return within the Fund (thereby creating leverage). The leverage within a TOB Trust depends","page_number":123,"box":{"x":117,"y":630,"width":749,"height":12}},{"id":"2c631d56-ef98-41f0-b85b-d93f72dee314","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":123,"box":{"x":116,"y":645,"width":714,"height":12}},{"id":"fe1610f0-7144-46f7-9a15-659559b6c4be","block_type":"box","text":"Floaters it issues.","page_number":123,"box":{"x":117,"y":661,"width":128,"height":9}},{"id":"0cdc1901-d45e-4f2a-bdf4-72863318ec54","block_type":"box","text":"A Fund may invest in highly leveraged TOB Residuals. A TOB Residual generally is considered highly","page_number":123,"box":{"x":116,"y":692,"width":757,"height":12}},{"id":"fef044b8-9a3d-4ccb-b3b4-3fd9b31bcc26","block_type":"box","text":"leveraged if the principal amount of the TOB Floaters issued by the related TOB Trust exceeds 75% of","page_number":123,"box":{"x":117,"y":707,"width":761,"height":12}},{"id":"06902bd6-8095-4f2c-bfa0-799f6a63c661","block_type":"box","text":"the principal amount of the Municipal Bonds owned by the TOB Trust.","page_number":123,"box":{"x":116,"y":723,"width":516,"height":12}},{"id":"2b1ed224-86fd-4dcd-8bc2-b5bb88b3ffb3","block_type":"box","text":"The TOB Trust may be collapsed without the consent of a Fund upon the occurrence of tender option","page_number":123,"box":{"x":116,"y":754,"width":751,"height":12}},{"id":"a6887aa1-6e59-4fcf-9eb4-9f5d42da32ea","block_type":"box","text":"termination events (“TOTEs”) and mandatory termination events (“MTEs”), as defined in the TOB Trust","page_number":123,"box":{"x":116,"y":769,"width":763,"height":12}},{"id":"9d6a5c89-4432-4172-a73e-66d1ee2f21e2","block_type":"box","text":"agreements. TOTEs include the bankruptcy or default of the issuer of the Municipal Bonds held in the","page_number":123,"box":{"x":116,"y":785,"width":752,"height":12}},{"id":"f13bd830-af61-47f7-97d7-263de5f9624c","block_type":"box","text":"TOB Trust, a substantial downgrade in the credit quality of the issuer of the Municipal Bonds held in","page_number":123,"box":{"x":116,"y":800,"width":739,"height":12}},{"id":"de7ccdfe-3752-42d6-bf51-230dc4adfcd1","block_type":"box","text":"the TOB Trust, failure of any scheduled payment of principal or interest on the Municipal Bonds, and a","page_number":123,"box":{"x":116,"y":816,"width":758,"height":12}},{"id":"225fa281-5220-4780-891f-946179499889","block_type":"box","text":"judgment or ruling that interest on the Municipal Bonds is subject to U.S. federal income taxation.","page_number":123,"box":{"x":115,"y":831,"width":727,"height":12}},{"id":"747303bd-7f5d-40c0-81b4-16f3bdeac366","block_type":"box","text":"MTEs may include, among other things, a failed remarketing of the TOB Floaters, the inability of the","page_number":123,"box":{"x":117,"y":847,"width":745,"height":12}},{"id":"e869b503-ace0-4a05-88e2-69f4b89e4576","block_type":"box","text":"TOB Trust to obtain renewal of the liquidity support agreement, and a substantial decline in the market","page_number":123,"box":{"x":116,"y":862,"width":765,"height":12}},{"id":"005d7c15-8755-4d3b-99b4-c4a2ff0487af","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":123,"box":{"x":116,"y":878,"width":734,"height":12}},{"id":"f79f5022-d1c3-41e8-ba46-5a9723f97ac9","block_type":"box","text":"II-75","page_number":123,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"26e414f5-d392-4998-b324-0051a62ed144","block_type":"box","text":"NM1026U-6033243-123/221","page_number":123,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"8fe11624-7a3b-4e15-b2d3-f3d6ba907afd","block_type":"box","text":"TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee","page_number":124,"box":{"x":116,"y":87,"width":758,"height":12}},{"id":"738f553e-ded3-4f66-b599-be54f3a65ea0","block_type":"box","text":"of the TOB Trust, the remarketing agent of the TOB Floaters and the Liquidity Provider (defined","page_number":124,"box":{"x":116,"y":102,"width":714,"height":13}},{"id":"7f85aa30-d031-4e71-b9f1-b990886c1eb8","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":124,"box":{"x":117,"y":118,"width":739,"height":12}},{"id":"15b43434-cd5a-4ec4-acee-175bb4a36b8f","block_type":"box","text":"paid senior to the TOB Residual holders (","page_number":124,"box":{"x":117,"y":134,"width":307,"height":12}},{"id":"4c8ae2e2-727f-4900-bcfc-1c38e956b157","block_type":"box","text":"i.e.","page_number":124,"box":{"x":425,"y":134,"width":20,"height":9}},{"id":"ee15cd1b-85df-4d44-a912-4a692a12c82a","block_type":"box","text":", the Fund). In contrast, in the case of a TOTE, after","page_number":124,"box":{"x":448,"y":134,"width":389,"height":12}},{"id":"40de02a5-e84e-45a7-adc4-f67ce863f693","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":124,"box":{"x":117,"y":149,"width":759,"height":12}},{"id":"c13f716a-e044-4a65-941e-0867c1fb5a1a","block_type":"box","text":"proportion to the respective face values of their certificates.","page_number":124,"box":{"x":117,"y":165,"width":443,"height":11}},{"id":"e9e8218c-5de2-4e22-8e48-5a788df27af1","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":124,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"84902b9e-0362-4a41-9ae8-7e4503ae12cf","block_type":"box","text":"supported by a liquidity facility provided by a third-party bank or other financial institution (the “Liquidity","page_number":124,"box":{"x":116,"y":211,"width":766,"height":12}},{"id":"d41ea1de-391e-4358-8385-e9635b82ef62","block_type":"box","text":"Provider”) that allows the holders of the TOB Floaters to tender their TOB Floaters in exchange for","page_number":124,"box":{"x":117,"y":227,"width":734,"height":12}},{"id":"38a3e007-a69f-4686-ab9e-aa0406ca30e9","block_type":"box","text":"payment of par plus accrued interest on any business day (subject to the non-occurrence of a TOTE","page_number":124,"box":{"x":117,"y":242,"width":748,"height":12}},{"id":"451943a4-41c7-46d0-b70f-49e69feb6ff9","block_type":"box","text":"described above). Depending on the structure of the TOB Trust, the Liquidity Provider may purchase","page_number":124,"box":{"x":116,"y":258,"width":752,"height":12}},{"id":"98e25713-88e7-4edd-8075-6cb9078f8d11","block_type":"box","text":"the tendered TOB Floaters, or the TOB Trust may draw upon a loan from the Liquidity Provider to","page_number":124,"box":{"x":116,"y":273,"width":728,"height":12}},{"id":"7d5c7279-de65-4e05-ab60-1a15d7e3d620","block_type":"box","text":"purchase the tendered TOB Floaters.","page_number":124,"box":{"x":117,"y":289,"width":281,"height":12}},{"id":"037bfeb2-411a-4410-9ff8-14965451a5b5","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":124,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"74803a0a-0c39-450a-b958-2f28bd88b2c5","block_type":"box","text":"make a payment under the liquidity facility, the Liquidity Provider will typically liquidate all or a portion","page_number":124,"box":{"x":117,"y":335,"width":753,"height":12}},{"id":"89721931-f949-4e7c-8c63-b9715c48d7e0","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":124,"box":{"x":116,"y":351,"width":746,"height":12}},{"id":"a2d15e63-c052-4d0b-b718-4e852de8ea1e","block_type":"box","text":"under the liquidity facility over the liquidation proceeds (the “Liquidation Shortfall”). If a Fund invests in","page_number":124,"box":{"x":117,"y":366,"width":760,"height":12}},{"id":"655611e6-cc22-42a3-91cf-2c4ed75ea3a3","block_type":"box","text":"a TOB Trust on a recourse basis, it will typically enter into a reimbursement agreement with the","page_number":124,"box":{"x":116,"y":382,"width":712,"height":12}},{"id":"2931f66b-85d9-47c5-a80f-5897bfdde2c8","block_type":"box","text":"Liquidity Provider pursuant to which the Fund is required to reimburse the Liquidity Provider the","page_number":124,"box":{"x":117,"y":397,"width":712,"height":12}},{"id":"2eb7f119-30b5-4a12-b6c2-5a3d741e94f3","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":124,"box":{"x":116,"y":413,"width":759,"height":12}},{"id":"d7f9a51d-30d1-4bd3-80bf-ee888b672369","block_type":"box","text":"will bear the risk of loss with respect to any Liquidation Shortfall. If multiple BlackRock-advised funds","page_number":124,"box":{"x":116,"y":428,"width":751,"height":12}},{"id":"e7d0b10b-74d2-4541-991c-a202ae684e23","block_type":"box","text":"participate in any such TOB Trust, these losses will be shared ratably, in proportion to their","page_number":124,"box":{"x":117,"y":444,"width":678,"height":12}},{"id":"85591642-8275-4d04-a2ef-ad85b6056dae","block_type":"box","text":"participation in the TOB Trust.","page_number":124,"box":{"x":117,"y":459,"width":227,"height":12}},{"id":"e8ecd365-289c-4cff-b080-a281cb4b3674","block_type":"box","text":"Under accounting rules, Municipal Bonds of a Fund that are deposited into a TOB Trust are","page_number":124,"box":{"x":117,"y":490,"width":682,"height":12}},{"id":"1440028d-1637-4235-8053-72665421a4ef","block_type":"box","text":"investments of the Fund and are presented on the Fund’s Schedule of Investments and outstanding","page_number":124,"box":{"x":117,"y":506,"width":745,"height":12}},{"id":"063504c2-f54b-437a-9a41-c5fea0068c32","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":124,"box":{"x":116,"y":521,"width":765,"height":12}},{"id":"8eb37a67-03fc-4ad4-85f3-ffc8fa8ddfb1","block_type":"box","text":"Liabilities. Interest income from the underlying Municipal Bonds is recorded by a Fund on an accrual","page_number":124,"box":{"x":117,"y":537,"width":747,"height":12}},{"id":"80a2b12f-7f80-448f-9291-f4c355d56c4b","block_type":"box","text":"basis. Interest expense incurred on the","page_number":124,"box":{"x":117,"y":552,"width":288,"height":12}},{"id":"bba6fba2-9838-4784-b713-7adccdd71d83","block_type":"box","text":"TOB Floaters and other expenses related to remarketing,","page_number":124,"box":{"x":409,"y":552,"width":430,"height":12}},{"id":"f97c4a55-0795-49d0-a29f-627e852ac1d3","block_type":"box","text":"administration, trustee and other services to a TOB Trust are reported as expenses of a Fund. In","page_number":124,"box":{"x":116,"y":568,"width":722,"height":12}},{"id":"90a87ef4-d4f4-4bfa-b28a-7ce8dd5cb2dd","block_type":"box","text":"addition, under accounting rules, loans made to a TOB Trust sponsored by a Fund may be presented","page_number":124,"box":{"x":116,"y":583,"width":757,"height":12}},{"id":"2c684073-bf8c-4878-adad-b73e4572641f","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":124,"box":{"x":116,"y":599,"width":721,"height":9}},{"id":"31271105-301d-4340-a3e4-c5957747d771","block_type":"box","text":"assets.","page_number":124,"box":{"x":116,"y":614,"width":58,"height":10}},{"id":"b68d7166-1811-447c-ab9f-2326e77cc927","block_type":"box","text":"For TOB Floaters, generally, the interest rate earned will be based upon the market rates for Municipal","page_number":124,"box":{"x":117,"y":645,"width":765,"height":12}},{"id":"3da96e67-35bc-4ade-aad3-e6b3e36610cb","block_type":"box","text":"Bonds with maturities or remarketing provisions that are comparable in duration to the periodic interval","page_number":124,"box":{"x":117,"y":661,"width":758,"height":12}},{"id":"d54fa03c-2284-448d-8af3-536cbc582909","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":124,"box":{"x":116,"y":676,"width":743,"height":12}},{"id":"b1dd153f-e2cf-4222-a5e1-428ba5f1d47c","block_type":"box","text":"call date of the underlying Municipal Bonds deposited in the TOB Trust, the holder of the TOB Floaters","page_number":124,"box":{"x":116,"y":692,"width":761,"height":12}},{"id":"9253f56e-c5c1-4257-b0a0-828122cfcc50","block_type":"box","text":"relies upon the terms of the agreement with the financial institution furnishing the liquidity facility as","page_number":124,"box":{"x":117,"y":707,"width":732,"height":12}},{"id":"750a4aa5-473e-46ce-a09d-d33b9a5f2bbd","block_type":"box","text":"well as the credit strength of that institution. The risk associated with TOB Floaters, however, may be","page_number":124,"box":{"x":116,"y":723,"width":749,"height":12}},{"id":"7b16e586-cf96-4725-af1c-c647caba6ec3","block_type":"box","text":"increased in the current market environment as a result of recent downgrades to the credit ratings, and","page_number":124,"box":{"x":117,"y":738,"width":761,"height":12}},{"id":"55957ede-6c0b-4187-b20f-c7d517b23ec4","block_type":"box","text":"thus the perceived reliability and creditworthiness, of many major financial institutions, some of which","page_number":124,"box":{"x":116,"y":754,"width":749,"height":12}},{"id":"82021200-7c1c-4b0c-a6f1-3c99814fddb8","block_type":"box","text":"sponsor and/or provide liquidity support to TOB Trusts. This in turn may reduce the desirability of TOB","page_number":124,"box":{"x":116,"y":769,"width":758,"height":12}},{"id":"da197619-6a27-4562-80f2-08516487614f","block_type":"box","text":"Floaters as investments, which could impair the viability or availability of TOB Trusts.","page_number":124,"box":{"x":117,"y":785,"width":627,"height":12}},{"id":"65d066e7-63e7-436a-82e1-32e189b8bcd7","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into TOB Trust transactions,","page_number":124,"box":{"x":117,"y":816,"width":737,"height":12}},{"id":"cb00a4d1-fe62-4eec-9071-5431e565e5c6","block_type":"box","text":"reverse repurchase agreements and similar financing transactions (e.g., borrowed bonds)","page_number":124,"box":{"x":117,"y":831,"width":670,"height":12}},{"id":"fc5f4539-8d59-402b-9469-9b8b534ae7b8","block_type":"box","text":"notwithstanding the limitation on the issuance of senior securities in Section 18 of the Investment","page_number":124,"box":{"x":117,"y":847,"width":723,"height":12}},{"id":"ae32ee65-49a1-4a20-ba1d-9093f1458df6","block_type":"box","text":"Company Act, provided that the Fund either (i) complies with the 300% asset coverage ratio with","page_number":124,"box":{"x":117,"y":862,"width":721,"height":12}},{"id":"00e955be-6168-4996-8aa2-15b63d67ca18","block_type":"box","text":"respect to such transactions and any other borrowings in the aggregate, or (ii) treats such transactions","page_number":124,"box":{"x":117,"y":878,"width":764,"height":12}},{"id":"f680b0e6-d360-413b-944c-63ad275b684d","block_type":"box","text":"II-76","page_number":124,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"4c5dff0c-8485-4043-a3d1-c6da935b2733","block_type":"box","text":"NM1026U-6033243-124/221","page_number":124,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"b0b1923d-144e-4060-adf0-1445d41a858f","block_type":"box","text":"as Derivatives Transactions under Rule 18f-4. See “— Derivatives — Regulation of Derivatives —","page_number":125,"box":{"x":116,"y":87,"width":730,"height":12}},{"id":"bb09330b-9ca6-45c5-8b8c-89129a6ee659","block_type":"box","text":"Rule 18f-4 under the Investment Company Act” above.","page_number":125,"box":{"x":117,"y":102,"width":411,"height":13}},{"id":"cd971a85-7c69-4ec0-84a4-bb3e1bf7d245","block_type":"box","text":"Developments in the TOB Trust Market.","page_number":125,"box":{"x":116,"y":134,"width":301,"height":11}},{"id":"2f442843-eaef-43be-94dc-b102dc591d0b","block_type":"box","text":"In response to the restrictions imposed by section 619 of the","page_number":125,"box":{"x":419,"y":134,"width":452,"height":12}},{"id":"c7d11cbd-a0a2-4cdc-9a04-13c80caeefe1","block_type":"box","text":"Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”), market participants","page_number":125,"box":{"x":117,"y":149,"width":766,"height":12}},{"id":"3fbef9a9-7e7b-46c7-a2e0-8c9336d9a203","block_type":"box","text":"have developed a structure for TOB Trusts designed to ensure that no banking entity is sponsoring the","page_number":125,"box":{"x":117,"y":165,"width":766,"height":12}},{"id":"0df99116-f815-4c55-a4ce-3de7e96a0df0","block_type":"box","text":"TOB Trust for purposes of the Volcker Rule. Specifically, a Fund will establish, structure and “sponsor”","page_number":125,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"79e66572-5aab-40a1-8a3a-54be19223173","block_type":"box","text":"the TOB Trusts in which it holds TOB Residuals. In such a structure, certain responsibilities that","page_number":125,"box":{"x":116,"y":196,"width":715,"height":11}},{"id":"fa8f53ca-9cee-4b33-813a-8f923754886f","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":125,"box":{"x":117,"y":211,"width":740,"height":12}},{"id":"abf0d6c2-49c0-4d0f-a7ff-e46d01504ee7","block_type":"box","text":"utilize service providers in meeting these responsibilities. It is possible that regulators could take","page_number":125,"box":{"x":117,"y":227,"width":717,"height":12}},{"id":"1847b5ed-ff6a-4560-8810-d13889ea8f11","block_type":"box","text":"positions that could limit the market for such structured TOB Trust transactions or a Fund’s ability to","page_number":125,"box":{"x":117,"y":242,"width":744,"height":12}},{"id":"c1fc8db9-b716-4c73-aa41-9abbdcaa71b9","block_type":"box","text":"hold TOB Residuals. Under this TOB Trust structure, a Fund has certain additional duties and","page_number":125,"box":{"x":117,"y":258,"width":699,"height":11}},{"id":"30deb271-2bbf-4f81-a906-a9a7e19eafcd","block_type":"box","text":"responsibilities, which may give rise to certain additional risks including","page_number":125,"box":{"x":117,"y":273,"width":525,"height":12}},{"id":"0117ca42-8a61-4188-9d2f-0c85c44d752b","block_type":"box","text":",","page_number":125,"box":{"x":643,"y":281,"width":3,"height":3}},{"id":"41b31f63-9fe5-4110-973b-07c1a95097fb","block_type":"box","text":"but not limited to, compliance,","page_number":125,"box":{"x":648,"y":273,"width":232,"height":12}},{"id":"aa000a83-866b-4b4c-b4bf-c9627cd5e6f6","block_type":"box","text":"securities law and operational risks.","page_number":125,"box":{"x":116,"y":289,"width":270,"height":12}},{"id":"9397e03c-1019-4f7d-9265-49138f1b1be1","block_type":"box","text":"Under this structure, service providers to a TOB Trust, such as administrators, liquidity providers,","page_number":125,"box":{"x":117,"y":320,"width":724,"height":12}},{"id":"8a5f5271-502e-41fd-b12c-534418fa760f","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":125,"box":{"x":116,"y":335,"width":764,"height":12}},{"id":"de979e0f-2da0-4725-8184-a43debf67b7e","block_type":"box","text":"holder. Similar to the traditional tender option bond structure, a Fund deposits Municipal Bonds into the","page_number":125,"box":{"x":117,"y":351,"width":768,"height":12}},{"id":"314486a8-248a-4d28-93b3-e0f43d8b2a1b","block_type":"box","text":"TOB Trust in exchange for TOB Residuals, the TOB Trust then issues and sells TOB Floaters to third","page_number":125,"box":{"x":116,"y":366,"width":757,"height":12}},{"id":"63ef3928-31f5-4340-88cb-fd60a343e4bd","block_type":"box","text":"party investors, and the proceeds of the sale of the TOB Floaters is distributed to such TOB Residual","page_number":125,"box":{"x":117,"y":382,"width":754,"height":12}},{"id":"9a12b072-501e-4a88-a393-d3e342572d5c","block_type":"box","text":"holders (","page_number":125,"box":{"x":117,"y":397,"width":64,"height":12}},{"id":"082089bd-44e6-4728-8d8c-94b7db7a550a","block_type":"box","text":"i.e.","page_number":125,"box":{"x":182,"y":397,"width":20,"height":10}},{"id":"e63bd82b-374c-45e8-bdf7-f9a0aabccc61","block_type":"box","text":", the Fund). Tendered TOB Floaters continue to be supported by a remarketing agent and","page_number":125,"box":{"x":205,"y":397,"width":671,"height":12}},{"id":"cdd3b603-cf3a-487e-83da-0c7b229ed615","block_type":"box","text":"a liquidity facility. However, the remarketing agent does not purchase tendered TOB Floaters for its","page_number":125,"box":{"x":116,"y":413,"width":740,"height":12}},{"id":"f9d19d9b-b421-4f96-9a3a-9ebbf89b052a","block_type":"box","text":"own account in the event of a failed remarketing, which may increase the likelihood that a TOB Trust","page_number":125,"box":{"x":116,"y":428,"width":751,"height":12}},{"id":"6d760111-0b86-44d6-bcff-ca4962e58e40","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":125,"box":{"x":116,"y":444,"width":772,"height":12}},{"id":"17ecb1e1-5b04-4357-86c8-15bc7f8a200a","block_type":"box","text":"a failed remarketing of TOB Floaters, the Liquidity Provider, at its option, may advance a loan to the","page_number":125,"box":{"x":116,"y":459,"width":745,"height":12}},{"id":"0349e6b9-1dfa-4cc4-898d-f17a2dce47b2","block_type":"box","text":"TOB Trust the proceeds of which would be used by the TOB Trust to purchase the tendered TOB","page_number":125,"box":{"x":116,"y":475,"width":728,"height":12}},{"id":"1a230879-10eb-4f1e-a8ee-0b5605bbfb0a","block_type":"box","text":"Floaters. The Liquidity Provider is not obligated to advance such a loan. The TOB Trust would be the","page_number":125,"box":{"x":117,"y":490,"width":753,"height":12}},{"id":"004818e5-72cc-46c9-987f-5b5c1f7e29f0","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":125,"box":{"x":117,"y":506,"width":758,"height":12}},{"id":"280dd1c4-ea4f-4000-87be-09bcefbce0ff","block_type":"box","text":"purchased TOB Floaters held by the TOB Trust.","page_number":125,"box":{"x":117,"y":521,"width":361,"height":12}},{"id":"ed01d6a0-df75-4585-8c5a-2efd94cdfe91","block_type":"box","text":"Similar to the traditional structure for TOB Trusts, a Fund may hold either non-recourse TOB Residuals","page_number":125,"box":{"x":116,"y":552,"width":769,"height":12}},{"id":"2b8df277-d076-47cf-af3a-23449dff0f07","block_type":"box","text":"or recourse TOB Residuals under this structure. In the event of a Liquidation Shortfall, there would","page_number":125,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"d82d7058-d97a-4998-97c8-4e918ee1055c","block_type":"box","text":"generally be no contractual recourse to the Fund’s assets if the Fund holds a non-recourse TOB","page_number":125,"box":{"x":116,"y":583,"width":718,"height":12}},{"id":"7d48afa2-b811-4ab9-8783-bdf564a750e0","block_type":"box","text":"Residual. However, as described above, a Fund would bear the risk of loss with respect to any","page_number":125,"box":{"x":117,"y":599,"width":706,"height":12}},{"id":"fb01baea-2e6a-4af8-a53f-289c55e47704","block_type":"box","text":"Liquidation Shortfall if it holds a recourse TOB Residual.","page_number":125,"box":{"x":117,"y":614,"width":420,"height":12}},{"id":"73f06022-cfdd-4c0f-89ad-0b3b0e5124a2","block_type":"box","text":"The SEC and various federal banking and housing agencies adopted credit risk retention rules for","page_number":125,"box":{"x":116,"y":645,"width":730,"height":12}},{"id":"3f099702-f1f1-4cb6-9b2c-dc9427189a12","block_type":"box","text":"securitizations (the “Risk Retention Rules”), which took effect in December 2016. The Risk Retention","page_number":125,"box":{"x":116,"y":661,"width":747,"height":12}},{"id":"092082ff-5a77-4045-8583-1335e371764b","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":125,"box":{"x":117,"y":676,"width":766,"height":12}},{"id":"d1f4db2a-f355-4008-8ef9-ae2bea2bda82","block_type":"box","text":"supporting the TOB Trust’s Municipal Bonds. The Risk Retention Rules may adversely affect the","page_number":125,"box":{"x":116,"y":692,"width":716,"height":12}},{"id":"f79c6a13-f15d-40d1-bfaa-7d0315fffca9","block_type":"box","text":"Fund’s ability to engage in TOB Trust transactions or increase the costs of such transactions in certain","page_number":125,"box":{"x":117,"y":707,"width":758,"height":12}},{"id":"d7bfb634-8a2d-4346-87e8-b010d31793e8","block_type":"box","text":"circumstances.","page_number":125,"box":{"x":116,"y":723,"width":110,"height":9}},{"id":"633cd2f0-6136-4f03-b1f3-ac25ed58c72e","block_type":"box","text":"TOB Trust transactions constitute an important component of the municipal bond market. Accordingly,","page_number":125,"box":{"x":116,"y":754,"width":756,"height":12}},{"id":"e4e37987-e97e-4703-bea7-5d3e0918e086","block_type":"box","text":"implementation of the Volcker Rule may adversely impact the municipal market, including through","page_number":125,"box":{"x":117,"y":769,"width":723,"height":12}},{"id":"a426ba53-a70b-473a-85c5-dee83fd76030","block_type":"box","text":"reduced demand for and liquidity of municipal bonds and increased financing costs for municipal","page_number":125,"box":{"x":117,"y":785,"width":713,"height":12}},{"id":"b819e2b2-ac49-41aa-aac1-19d5671fdcb9","block_type":"box","text":"issuers. Any such developments could adversely affect the Funds. The ultimate impact of these rules","page_number":125,"box":{"x":117,"y":800,"width":749,"height":12}},{"id":"26675cd8-fcf0-4e2c-b688-eb3ea59674db","block_type":"box","text":"on the TOB market and the overall municipal market is not yet certain.","page_number":125,"box":{"x":116,"y":816,"width":520,"height":12}},{"id":"88c7e23c-9a74-41a2-a5c6-2e697a98aeea","block_type":"box","text":"Yields.","page_number":125,"box":{"x":118,"y":847,"width":47,"height":9}},{"id":"782e61c7-e813-420b-9bf8-fb356025c138","block_type":"box","text":"Yields on Municipal Bonds are dependent on a variety of factors, including the general","page_number":125,"box":{"x":166,"y":847,"width":650,"height":12}},{"id":"7515e997-6ea6-468d-a2b6-98dd3de46ef4","block_type":"box","text":"condition of the money market and of the municipal bond market, the size of a particular offering, the","page_number":125,"box":{"x":116,"y":862,"width":751,"height":12}},{"id":"979ff1df-aa9c-43d2-9d63-93fe1a10fb00","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":125,"box":{"x":116,"y":878,"width":759,"height":12}},{"id":"2b1e82f3-725a-4fa8-9c73-aef5e9af9703","block_type":"box","text":"II-77","page_number":125,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"486acf4e-f3ff-4f33-9f91-f8e030c3e8b0","block_type":"box","text":"NM1026U-6033243-125/221","page_number":125,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"5e0ef311-77ac-468f-81f7-1f4acb0c0d99","block_type":"box","text":"a Fund to achieve its investment objective is also dependent on the continuing ability of the issuers of","page_number":126,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"0510b423-5983-435b-b6a0-cd59a3f136e7","block_type":"box","text":"the securities in which the Fund invests to meet their obligations for the payment of interest and","page_number":126,"box":{"x":116,"y":102,"width":714,"height":13}},{"id":"07105e6c-6736-4912-af3a-8f5aa3026e76","block_type":"box","text":"principal when due. There are variations in the risks involved in holding Municipal Bonds, both within a","page_number":126,"box":{"x":117,"y":118,"width":763,"height":12}},{"id":"af5866c0-2af6-4afd-b522-26723626e79f","block_type":"box","text":"particular classification and between classifications, depending on numerous factors. Furthermore, the","page_number":126,"box":{"x":117,"y":134,"width":763,"height":12}},{"id":"53627ebf-0dea-48df-b74d-478f544651f1","block_type":"box","text":"rights of owners of Municipal Bonds and the obligations of the issuer of such Municipal Bonds may be","page_number":126,"box":{"x":117,"y":149,"width":758,"height":12}},{"id":"5b252b01-ae73-46c6-9192-1725bf55eefb","block_type":"box","text":"subject to applicable bankruptcy, insolvency and similar laws and court decisions affecting the rights of","page_number":126,"box":{"x":116,"y":165,"width":767,"height":12}},{"id":"3dc8cf06-b984-4a68-982e-6661d18bec6e","block_type":"box","text":"creditors generally and to general equitable principles, which may limit the enforcement of certain","page_number":126,"box":{"x":116,"y":180,"width":727,"height":12}},{"id":"b378bb2a-d039-4481-bfc5-0d4f041178d6","block_type":"box","text":"remedies.","page_number":126,"box":{"x":117,"y":196,"width":77,"height":9}},{"id":"24ff593a-ef79-4145-a954-7b5a5d5f4f28","block_type":"box","text":"Variable Rate Demand Obligations (“VRDOs”).","page_number":126,"box":{"x":118,"y":227,"width":344,"height":12}},{"id":"ca1c6a7d-7fa2-4c18-8c78-5e999096f212","block_type":"box","text":"VRDOs are tax-exempt obligations that contain a","page_number":126,"box":{"x":464,"y":227,"width":374,"height":12}},{"id":"3c23aa6f-a9f4-44af-ac31-c25aa0cd9108","block_type":"box","text":"floating or variable interest rate adjustment formula and a right of demand on the part of the holder","page_number":126,"box":{"x":116,"y":242,"width":736,"height":12}},{"id":"ab8718c8-d2a3-4eb9-94ea-a76cb288f34f","block_type":"box","text":"thereof to receive payment of the unpaid principal balance plus accrued interest upon a short notice","page_number":126,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"bdc6cd88-2a4f-4d6f-9b55-6ebd56145ddc","block_type":"box","text":"period not to exceed seven days.","page_number":126,"box":{"x":117,"y":273,"width":250,"height":12}},{"id":"f37a0fc8-f733-4a23-85f9-4843582c96c0","block_type":"box","text":"There is the possibility that because of default or insolvency the demand feature of VRDOs may not be","page_number":126,"box":{"x":116,"y":304,"width":768,"height":12}},{"id":"5cf9ea9a-64e9-4eb7-8b8f-e4ba60e3089d","block_type":"box","text":"honored. The interest rates are adjustable at periodic intervals to some prevailing market rate for","page_number":126,"box":{"x":117,"y":320,"width":721,"height":12}},{"id":"bc4d6d87-427b-4de7-bee5-802a4576bb1d","block_type":"box","text":"similar investments, such adjustment formula being calculated to maintain the market rate of the","page_number":126,"box":{"x":116,"y":335,"width":718,"height":12}},{"id":"94040b6f-b136-4bbb-98b3-e41552aecaf3","block_type":"box","text":"VRDOs at approximately the par value of the VRDOs on the adjustment date. The adjustments","page_number":126,"box":{"x":116,"y":351,"width":710,"height":12}},{"id":"aea1221e-d9b1-4866-95d3-ec03af58cb09","block_type":"box","text":"typically are based upon the Securities Industry and Financial Markets Association (“SIFMA”) Index.","page_number":126,"box":{"x":116,"y":366,"width":746,"height":12}},{"id":"93e0253d-6ad9-4d83-a0b6-c8b705f25024","block_type":"box","text":"Because of the interest rate adjustment formula on VRDOs, VRDOs are not comparable to fixed rate","page_number":126,"box":{"x":117,"y":397,"width":751,"height":12}},{"id":"a9f65347-ef8a-4fcb-9733-a9e0c3db7e97","block_type":"box","text":"securities. During periods of declining interest rates, a Fund’s yield on a VRDO will decrease and its","page_number":126,"box":{"x":116,"y":413,"width":746,"height":12}},{"id":"ee35ab0a-ceef-4938-85fd-692a7ded0790","block_type":"box","text":"shareholders will forego the opportunity for capital appreciation. During periods of rising interest rates,","page_number":126,"box":{"x":116,"y":428,"width":761,"height":12}},{"id":"ed293d4a-57fc-4f8d-964d-82b48f08bc9a","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":126,"box":{"x":117,"y":444,"width":764,"height":12}},{"id":"02555e2a-86d4-47e7-8708-256391091fb1","block_type":"box","text":"of capital depreciation.","page_number":126,"box":{"x":116,"y":459,"width":173,"height":12}},{"id":"953722d0-8572-457f-8ba0-c8bda81c4ecb","block_type":"box","text":"Transactions in Financial Futures Contracts on Municipal Indexes.","page_number":126,"box":{"x":118,"y":490,"width":488,"height":12}},{"id":"23a2e154-3016-4028-9c05-add9fee70f9b","block_type":"box","text":"The Municipal Funds and certain","page_number":126,"box":{"x":608,"y":490,"width":253,"height":12}},{"id":"62af9812-7188-44de-824f-75a1c389e7ca","block_type":"box","text":"other funds deal in financial futures contracts based on a long-term municipal bond index developed by","page_number":126,"box":{"x":116,"y":506,"width":770,"height":12}},{"id":"eb8e4b9f-38b0-499b-9cf8-d84cc5212098","block_type":"box","text":"the Chicago Board of Trade (“CBT”) and The Bond Buyer (the “Municipal Bond Index”). The Municipal","page_number":126,"box":{"x":116,"y":521,"width":761,"height":12}},{"id":"e4585e2f-5ca7-4b4c-9d59-5ce3b2888c32","block_type":"box","text":"Bond Index is comprised of 40 long-term, actively traded tax-exempt municipal revenue and general","page_number":126,"box":{"x":117,"y":537,"width":746,"height":12}},{"id":"57e85206-8644-4a05-9d06-8b733836d92e","block_type":"box","text":"obligation bonds. Each bond included in the Municipal Bond Index must be rated A or higher by","page_number":126,"box":{"x":116,"y":552,"width":712,"height":12}},{"id":"486ac1b8-fbd0-4311-ab2c-369db708b2c3","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":126,"box":{"x":117,"y":568,"width":754,"height":12}},{"id":"b3d17e28-adb7-4285-b049-09e9e15c9d39","block_type":"box","text":"satisfying the eligibility requirements are added to, and an equal number of old issues are deleted from,","page_number":126,"box":{"x":116,"y":583,"width":771,"height":12}},{"id":"4083805a-2ebd-4667-8e4b-7bd339ad9aef","block_type":"box","text":"the Municipal Bond Index. The value of the Municipal Bond Index is computed daily according to a","page_number":126,"box":{"x":116,"y":599,"width":734,"height":12}},{"id":"b945e067-5b89-465d-81f0-19704e7b9f04","block_type":"box","text":"formula based on the price of each bond in the Municipal Bond Index, as evaluated by six","page_number":126,"box":{"x":116,"y":614,"width":670,"height":12}},{"id":"91c48f96-5222-40c7-b1ae-10a953c5fbf8","block_type":"box","text":"dealer-to-dealer brokers.","page_number":126,"box":{"x":116,"y":630,"width":189,"height":9}},{"id":"3a6a8c66-a336-4354-9364-f75ca4c97faf","block_type":"box","text":"The Municipal Bond Index futures contract is traded only on the CBT. Like other contract markets, the","page_number":126,"box":{"x":116,"y":661,"width":755,"height":12}},{"id":"227452de-5203-45f2-93b9-359776ff6dcc","block_type":"box","text":"CBT assures performance under futures contracts through a clearing corporation, a nonprofit","page_number":126,"box":{"x":117,"y":676,"width":689,"height":12}},{"id":"39046ccf-ed7b-4e70-ba9a-bbcce62096cb","block_type":"box","text":"organization managed by the exchange membership that is also responsible for handling daily","page_number":126,"box":{"x":116,"y":692,"width":699,"height":12}},{"id":"d9ca52aa-5b1f-46d1-b94f-0fb69f3b82c6","block_type":"box","text":"accounting of deposits or withdrawals of margin.","page_number":126,"box":{"x":116,"y":707,"width":357,"height":12}},{"id":"de0c14cd-3ae6-466e-97db-9f4a02527e98","block_type":"box","text":"The particular municipal bonds comprising the index underlying the Municipal Bond Index financial","page_number":126,"box":{"x":116,"y":738,"width":729,"height":12}},{"id":"ef37ce70-0312-4083-a571-cdd0e2c3ecbe","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":126,"box":{"x":116,"y":754,"width":736,"height":12}},{"id":"2ecf3602-b3a8-4f7e-8d74-caffe3f87cef","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":126,"box":{"x":116,"y":769,"width":743,"height":12}},{"id":"5fa1b96f-f3b8-4916-a8ef-d7a2f8a00c1e","block_type":"box","text":"financial futures contracts will depend in part on the degree to which price movements in the index","page_number":126,"box":{"x":116,"y":785,"width":729,"height":12}},{"id":"bf67d468-65eb-45c2-a537-13ab9d424d27","block_type":"box","text":"underlying the financial futures contract correlate with the price movements of the Municipal Bonds","page_number":126,"box":{"x":117,"y":800,"width":732,"height":12}},{"id":"e7b513d6-0f5a-407f-b025-aa18c424db78","block_type":"box","text":"held by the Fund. The correlation may be affected by disparities in the average maturity, ratings,","page_number":126,"box":{"x":117,"y":816,"width":712,"height":12}},{"id":"777e67be-deac-4ef0-8fa3-9af4d0a527bf","block_type":"box","text":"geographical mix or structure of a Municipal Fund’s investments as compared to those comprising the","page_number":126,"box":{"x":116,"y":831,"width":760,"height":12}},{"id":"3fcbbb75-69b8-4f92-a314-6b069eb1c2ab","block_type":"box","text":"Municipal Bond Index and general economic or political factors. In addition, the correlation between","page_number":126,"box":{"x":117,"y":847,"width":741,"height":12}},{"id":"651df410-2329-471e-941a-c024960ba835","block_type":"box","text":"movements in the value of the Municipal Bond Index may be subject to change over time as additions","page_number":126,"box":{"x":117,"y":862,"width":759,"height":12}},{"id":"b8e84061-e281-4441-b679-42bf84637c3d","block_type":"box","text":"to and deletions from the Municipal Bond Index alter its structure. The correlation between futures","page_number":126,"box":{"x":116,"y":878,"width":731,"height":12}},{"id":"ec1706ad-fad6-4d67-852c-ea3599cd1e85","block_type":"box","text":"II-78","page_number":126,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"367c4feb-1243-4a69-a203-b551d9d4f751","block_type":"box","text":"NM1026U-6033243-126/221","page_number":126,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"180b7854-22f2-4ec3-8ab9-90706cc45067","block_type":"box","text":"contracts on U.S. Government Securities and the Municipal Bonds held by a Municipal Fund may be","page_number":127,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"03b84165-e21b-41e7-a4cc-9a6df67f6aef","block_type":"box","text":"adversely affected by similar factors and the risk of imperfect correlation between movements in the","page_number":127,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"d88adbab-7807-4a81-814a-1ba16df19a87","block_type":"box","text":"prices of such futures contracts and the prices of Municipal Bonds held by a Municipal Fund may be","page_number":127,"box":{"x":117,"y":118,"width":745,"height":12}},{"id":"d1ff239c-1713-4ca3-a6b8-503c1ec5804a","block_type":"box","text":"greater. Municipal Bond Index futures contracts were approved for trading in 1985. Trading in such","page_number":127,"box":{"x":116,"y":134,"width":738,"height":12}},{"id":"faf90264-5bda-4464-b746-8ff9875dd391","block_type":"box","text":"futures contracts may tend to be less liquid than trading in other futures contracts. The trading of","page_number":127,"box":{"x":116,"y":149,"width":721,"height":12}},{"id":"2e3e8983-e46a-4468-83af-0b7633c702cd","block_type":"box","text":"futures contracts also is subject to certain market risks, such as inadequate trading activity, which","page_number":127,"box":{"x":116,"y":165,"width":729,"height":12}},{"id":"f3473064-6f32-43d9-bf81-d72304f5424f","block_type":"box","text":"could at times make it difficult or impossible to liquidate existing positions.","page_number":127,"box":{"x":116,"y":180,"width":552,"height":12}},{"id":"d8abf180-8b1c-45fb-bc83-da52fea049a5","block_type":"box","text":"Call Rights.","page_number":127,"box":{"x":117,"y":211,"width":83,"height":12}},{"id":"ba16aea2-7915-42ee-a563-96c6dc418262","block_type":"box","text":"A Fund may purchase a Municipal Bond issuer’s right to call all or a portion of such","page_number":127,"box":{"x":202,"y":211,"width":626,"height":12}},{"id":"71a80104-aaf9-4870-b9ba-f4c10f1e61a2","block_type":"box","text":"Municipal Bond for mandatory tender for purchase (a “Call Right”). A holder of a Call Right may","page_number":127,"box":{"x":117,"y":227,"width":711,"height":12}},{"id":"ea33be0c-e87b-43f4-87da-a53bd61ea34c","block_type":"box","text":"exercise such right to require a mandatory tender for the purchase of related Municipal Bonds, subject","page_number":127,"box":{"x":116,"y":242,"width":763,"height":12}},{"id":"fd34bf40-7fbf-47c6-9f65-7f409ad9ebcc","block_type":"box","text":"to certain conditions. A Call Right that is not exercised prior to maturity of the related Municipal Bond","page_number":127,"box":{"x":116,"y":258,"width":751,"height":12}},{"id":"937d9a08-b572-4725-b5fa-22586a834bf7","block_type":"box","text":"will expire without value. The economic effect of holding both the Call Right and the related Municipal","page_number":127,"box":{"x":116,"y":273,"width":756,"height":12}},{"id":"fc643e4f-0342-42b8-aee8-6972b4ea11b2","block_type":"box","text":"Bond is identical to holding a Municipal Bond as a non-callable security. Certain investments in such","page_number":127,"box":{"x":117,"y":289,"width":748,"height":12}},{"id":"a1a6f24b-69a0-41f0-8846-973374a077a8","block_type":"box","text":"obligations may be illiquid.","page_number":127,"box":{"x":116,"y":304,"width":201,"height":12}},{"id":"453240cf-c96f-4dd7-9525-310aa734344b","block_type":"box","text":"Municipal Interest Rate Swap Transactions.","page_number":127,"box":{"x":116,"y":335,"width":323,"height":12}},{"id":"e5d944e3-cad6-4264-96f3-9e8c561f986e","block_type":"box","text":"In order to hedge the value of a Fund against interest rate","page_number":127,"box":{"x":440,"y":335,"width":439,"height":12}},{"id":"2f303658-0299-41f5-ad2e-b47b9271462c","block_type":"box","text":"fluctuations or to enhance a Fund’s income, a Fund may enter into interest rate swap transactions such","page_number":127,"box":{"x":116,"y":351,"width":772,"height":12}},{"id":"f0dcfe6a-2ac9-45d6-aab9-a2aa50b30a2d","block_type":"box","text":"as Municipal Market Data AAA Cash Curve swaps (“MMD Swaps”) or Securities Industry and Financial","page_number":127,"box":{"x":116,"y":366,"width":769,"height":12}},{"id":"a049d105-88e1-4091-bdbb-3191c61c9e31","block_type":"box","text":"Markets Association Municipal Swap Index swaps (“SIFMA Swaps”). To the extent that a Fund enters","page_number":127,"box":{"x":117,"y":382,"width":758,"height":12}},{"id":"3ed2d71a-da03-46aa-a734-27b9853d72d9","block_type":"box","text":"into these transactions, the Fund expects to do so primarily to preserve a return or spread on a","page_number":127,"box":{"x":117,"y":397,"width":708,"height":12}},{"id":"d24fd382-172a-49d8-ad19-06ba717fc807","block_type":"box","text":"particular investment or portion of its portfolio or to protect against any increase in the price of","page_number":127,"box":{"x":117,"y":413,"width":699,"height":12}},{"id":"4722189f-a24b-4500-be5b-34834695bc36","block_type":"box","text":"securities the Fund anticipates purchasing at a later date. A Fund intends to use these transactions","page_number":127,"box":{"x":116,"y":428,"width":741,"height":12}},{"id":"bd84c615-c247-4362-b11c-45f4f3723a96","block_type":"box","text":"primarily as a hedge rather than as a speculative investment. However, a Fund also may invest in","page_number":127,"box":{"x":117,"y":444,"width":729,"height":12}},{"id":"45d52910-3f87-4247-8574-b1fdbab25d6b","block_type":"box","text":"MMD Swaps and SIFMA Swaps to enhance income or gain or to increase the Fund’s yield, for","page_number":127,"box":{"x":117,"y":459,"width":704,"height":12}},{"id":"74ab7e28-0e22-4870-8d4c-77db398ce5a4","block_type":"box","text":"example, during periods of steep interest rate yield curves (","page_number":127,"box":{"x":116,"y":475,"width":441,"height":12}},{"id":"85c3cb86-0bee-4f50-ad48-92929750d94d","block_type":"box","text":"i.e.","page_number":127,"box":{"x":558,"y":475,"width":20,"height":9}},{"id":"e872df08-67e5-4e85-bda5-2fb01dc75a50","block_type":"box","text":", wide differences between short-term","page_number":127,"box":{"x":581,"y":475,"width":284,"height":11}},{"id":"d141753a-0967-4f78-a010-02709d1f5859","block_type":"box","text":"and long-term interest rates).","page_number":127,"box":{"x":116,"y":490,"width":221,"height":12}},{"id":"0a32b57d-43c9-456b-a248-ffcc23679b5f","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":127,"box":{"x":116,"y":521,"width":747,"height":12}},{"id":"f3f269b5-64a5-4305-849f-57de901f8ac1","block_type":"box","text":"exchanges with another party their respective commitments to pay or receive interest (","page_number":127,"box":{"x":116,"y":537,"width":642,"height":12}},{"id":"60e2f92f-4a6f-412d-8946-6fcf34b49653","block_type":"box","text":"e.g.","page_number":127,"box":{"x":760,"y":539,"width":25,"height":10}},{"id":"0296702a-2634-43cb-b37a-150ace92fc97","block_type":"box","text":", an","page_number":127,"box":{"x":788,"y":539,"width":32,"height":9}},{"id":"41d64658-6ada-49fc-96f2-7fd146124c2c","block_type":"box","text":"exchange of fixed rate payments for floating rate payments linked to the SIFMA Municipal Swap","page_number":127,"box":{"x":116,"y":552,"width":717,"height":12}},{"id":"fc33b29b-7ba9-420c-9715-bf0234160771","block_type":"box","text":"Index). Because the underlying index is a tax-exempt index, SIFMA Swaps may reduce cross-market","page_number":127,"box":{"x":117,"y":568,"width":755,"height":12}},{"id":"9005b826-b29c-4bda-bcad-098afcfc3fd1","block_type":"box","text":"risks incurred by a Fund and increase a Fund’s ability to hedge effectively. SIFMA Swaps are typically","page_number":127,"box":{"x":117,"y":583,"width":760,"height":12}},{"id":"eef420fc-7feb-46bb-9867-895a5930d9ca","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":127,"box":{"x":116,"y":599,"width":745,"height":12}},{"id":"2969b670-40c3-49af-a98d-63b2027a6772","block_type":"box","text":"duration of a SIFMA Swap is approximately equal to the duration of a fixed-rate Municipal Bond with","page_number":127,"box":{"x":116,"y":614,"width":747,"height":12}},{"id":"f81d82a3-935f-46e5-b495-e57cbb800fba","block_type":"box","text":"the same attributes as the swap (","page_number":127,"box":{"x":116,"y":630,"width":247,"height":12}},{"id":"f413005d-9ca0-4500-9c56-55a7baa1d120","block_type":"box","text":"e.g.","page_number":127,"box":{"x":365,"y":632,"width":25,"height":10}},{"id":"0247831e-9fca-461c-9309-f3563884dfd6","block_type":"box","text":", coupon, maturity, call feature).","page_number":127,"box":{"x":393,"y":630,"width":240,"height":12}},{"id":"6454e787-fec5-4d5d-a74f-580be2bee19d","block_type":"box","text":"A Fund may also purchase and sell MMD Swaps, also known as MMD rate locks. An MMD Swap","page_number":127,"box":{"x":116,"y":661,"width":721,"height":12}},{"id":"d3fff486-69b0-41fc-bf84-4f59a420fe8e","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":127,"box":{"x":117,"y":676,"width":738,"height":12}},{"id":"9b934e85-d575-467b-bd72-83a294e4db54","block_type":"box","text":"return on a particular investment or a portion of its portfolio as a duration management technique or to","page_number":127,"box":{"x":117,"y":692,"width":755,"height":12}},{"id":"72c5e3d5-398f-4074-8c7b-8a3ea67c9593","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":127,"box":{"x":117,"y":707,"width":765,"height":12}},{"id":"66df0f97-ced1-459c-9155-3dc537f5b70e","block_type":"box","text":"Swap, a Fund can create a synthetic long or short position, allowing the Fund to select the most","page_number":127,"box":{"x":116,"y":723,"width":711,"height":12}},{"id":"925a974a-cb76-447f-8482-a1f6b0177135","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":127,"box":{"x":116,"y":738,"width":724,"height":12}},{"id":"208c746c-c12c-4d00-954f-e245a060c10b","block_type":"box","text":"provider pursuant to which the parties agree to make payments to each other on a notional amount,","page_number":127,"box":{"x":117,"y":754,"width":738,"height":12}},{"id":"c0f3b37c-6cc1-488e-bb01-ddb92de0cba6","block_type":"box","text":"contingent upon whether the Municipal Market Data AAA General Obligation Scale is above or below a","page_number":127,"box":{"x":116,"y":769,"width":763,"height":12}},{"id":"c5f9c379-ea18-40dd-bcbc-e398436146c9","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":127,"box":{"x":116,"y":785,"width":748,"height":12}},{"id":"ecff269b-49de-44a1-a1a9-1260ab21656d","block_type":"box","text":"the Municipal Market Data AAA General Obligation Scale is below the specified level on the expiration","page_number":127,"box":{"x":116,"y":800,"width":757,"height":12}},{"id":"16150647-45e9-473b-823b-22d5b31ebc3b","block_type":"box","text":"date, the counterparty to the contract will make a payment to the Fund equal to the specified level","page_number":127,"box":{"x":116,"y":816,"width":724,"height":12}},{"id":"9b01e24d-3700-413b-bb31-4d734a85bdf0","block_type":"box","text":"minus the actual level, multiplied by the notional amount of the contract. If the Municipal Market Data","page_number":127,"box":{"x":117,"y":831,"width":751,"height":12}},{"id":"bf091ea2-c9ef-4593-9a63-7311ef094d08","block_type":"box","text":"AAA General Obligation Scale is above the specified level on the expiration date, a Fund will make a","page_number":127,"box":{"x":116,"y":847,"width":752,"height":12}},{"id":"3d01dfff-c4c6-4d79-afd3-498c925cae83","block_type":"box","text":"payment to the counterparty equal to the actual level minus the specified level, multiplied by the","page_number":127,"box":{"x":117,"y":862,"width":714,"height":12}},{"id":"35e6558f-0533-4b52-99d6-fbae10482bc4","block_type":"box","text":"notional amount of the contract.","page_number":127,"box":{"x":117,"y":878,"width":239,"height":9}},{"id":"a03caf64-50bc-4d8d-a4ad-d0e15439ad4c","block_type":"box","text":"II-79","page_number":127,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e589a957-c426-497e-950d-6f8f54b17dc7","block_type":"box","text":"NM1026U-6033243-127/221","page_number":127,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"ebb07db3-4ef7-4a58-98af-4e70157e9496","block_type":"box","text":"In connection with investments in SIFMA and MMD Swaps,","page_number":128,"box":{"x":117,"y":87,"width":444,"height":12}},{"id":"1bcfa067-644a-43e5-9134-33fefcfe9195","block_type":"box","text":"there is a risk that municipal yields will","page_number":128,"box":{"x":561,"y":87,"width":289,"height":12}},{"id":"80dffc60-8fcf-4a7d-bcca-8052208f2768","block_type":"box","text":"move in the opposite direction than anticipated by a Fund, which would cause the Fund to make","page_number":128,"box":{"x":117,"y":103,"width":716,"height":12}},{"id":"c1b4ff8c-49bd-41f8-8f9a-d863579aaa63","block_type":"box","text":"payments to its counterparty in the transaction that could adversely affect the Fund’s performance.","page_number":128,"box":{"x":117,"y":118,"width":735,"height":12}},{"id":"8a4f76f9-6904-414b-a319-97a89622ae01","block_type":"box","text":"Insured Municipal Bonds.","page_number":128,"box":{"x":117,"y":146,"width":186,"height":12}},{"id":"a60267a0-4a2d-4dda-85ce-e8ad5da910f6","block_type":"box","text":"Bonds purchased by a Fund may be covered by insurance that guarantees","page_number":128,"box":{"x":305,"y":146,"width":566,"height":12}},{"id":"001169d0-ee91-4f1b-b886-e783eb342981","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":128,"box":{"x":116,"y":162,"width":768,"height":12}},{"id":"e89b1d06-b2d0-4c60-abfa-5a5523ca09a3","block_type":"box","text":"matures. Either the issuer of the bond or the Fund purchases the insurance. Insurance is expected to","page_number":128,"box":{"x":117,"y":177,"width":755,"height":12}},{"id":"b8b8fab6-faf7-4bab-bbff-b9109c2d0fe2","block_type":"box","text":"protect the Fund against losses caused by a bond issuer’s failure to make interest or principal","page_number":128,"box":{"x":117,"y":192,"width":699,"height":13}},{"id":"a3949997-83f3-4e53-9a18-58f456cdf1fd","block_type":"box","text":"payments. However, insurance does not protect the Fund or its shareholders against losses caused by","page_number":128,"box":{"x":117,"y":208,"width":767,"height":12}},{"id":"6ac26a27-77e6-48ac-b867-ac23f7a0cea1","block_type":"box","text":"declines in a bond’s market value. Also, the Fund cannot be certain that any insurance company does","page_number":128,"box":{"x":116,"y":224,"width":761,"height":12}},{"id":"91bbfcb5-71db-4692-9599-e3143c4180e4","block_type":"box","text":"not make these payments. In addition, if the Fund purchases the insurance, it may pay the premiums,","page_number":128,"box":{"x":117,"y":239,"width":758,"height":12}},{"id":"d26e91fe-e349-4ea3-aaf4-3972f0d2b305","block_type":"box","text":"which will reduce the Fund’s yield. The Fund seeks to use only insurance companies with claims","page_number":128,"box":{"x":116,"y":255,"width":721,"height":12}},{"id":"760a9d4b-62b4-4d20-815b-ebab00a0c233","block_type":"box","text":"paying ability, financial strength, or equivalent ratings of at least investment grade. However, if","page_number":128,"box":{"x":117,"y":270,"width":703,"height":12}},{"id":"de8410fa-507a-48f1-9fc4-0585ce2666a1","block_type":"box","text":"insurance from insurers with these ratings is not available, the Fund may use insurance companies","page_number":128,"box":{"x":117,"y":285,"width":739,"height":13}},{"id":"37758d7b-0f23-46cd-9620-cd6a0b166d40","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":128,"box":{"x":116,"y":301,"width":742,"height":12}},{"id":"6578fd35-7b2b-4b97-a20c-f68b032de77a","block_type":"box","text":"obligations or loses its credit rating, the value of the bond could drop.","page_number":128,"box":{"x":116,"y":316,"width":517,"height":13}},{"id":"f0a0c38a-748b-455b-8f1d-c2e73aa32b44","block_type":"box","text":"Build America Bonds.","page_number":128,"box":{"x":116,"y":345,"width":159,"height":9}},{"id":"dee02acc-3e62-4496-aa01-c0a313af5af5","block_type":"box","text":"If a Fund holds Build America Bonds, the Fund may be eligible to receive a U.S.","page_number":128,"box":{"x":276,"y":344,"width":604,"height":12}},{"id":"c13bfca2-51c1-40e1-bc75-3ab4682d411f","block_type":"box","text":"federal income tax credit; however, the issuer of a Build America Bond may instead elect to receive a","page_number":128,"box":{"x":116,"y":360,"width":756,"height":12}},{"id":"1ea4e8cc-2cf9-4403-91e5-b86ad25e5e20","block_type":"box","text":"cash payment directly from the federal government in lieu of holders such as the fund receiving a tax","page_number":128,"box":{"x":116,"y":375,"width":752,"height":12}},{"id":"42a90a3d-36cd-4890-a774-b80d383c0ea9","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":128,"box":{"x":116,"y":391,"width":772,"height":12}},{"id":"bb0da4e5-f9dc-4202-b5c0-0bd26704d086","block_type":"box","text":"does receive tax credits from Build America Bonds or other tax credit bonds on one or more specified","page_number":128,"box":{"x":116,"y":406,"width":757,"height":12}},{"id":"c49eb435-53bb-4f9d-85fb-7b3dd865e93f","block_type":"box","text":"dates during the fund’s taxable year, and the Fund satisfies the minimum distribution requirement, the","page_number":128,"box":{"x":116,"y":422,"width":760,"height":12}},{"id":"6ecfb00e-0ae9-45fd-ae8d-9c082648b498","block_type":"box","text":"Fund may elect for U.S. federal income tax purposes to pass through to shareholders tax credits","page_number":128,"box":{"x":117,"y":437,"width":719,"height":12}},{"id":"027adb1b-879b-4a6a-b24d-ea758d38979c","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":128,"box":{"x":116,"y":453,"width":770,"height":12}},{"id":"ebdc7fc6-01a1-49bb-956d-25c7bb591c80","block_type":"box","text":"the Code as a “qualified tax credit bond” (which includes a qualified forestry conservation bond, a new","page_number":128,"box":{"x":116,"y":468,"width":761,"height":12}},{"id":"5e2ae260-93e9-4f0f-a2bc-23a24b747cd2","block_type":"box","text":"clean renewable energy bond, a qualified energy conservation bond, or a qualified zone academy","page_number":128,"box":{"x":116,"y":484,"width":729,"height":12}},{"id":"86b2478e-10f4-42c3-b77e-4032b27eac2e","block_type":"box","text":"bond, each of which must meet certain requirements specified in the Code), a “Build America Bond”","page_number":128,"box":{"x":117,"y":499,"width":744,"height":13}},{"id":"5ea48d68-e1eb-43e6-aa8c-ddc74312b028","block_type":"box","text":"(which includes certain qualified bonds issued before January 1, 2011) or certain other specified","page_number":128,"box":{"x":117,"y":515,"width":717,"height":12}},{"id":"8915ab50-35f7-4e10-9466-3e082298a480","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":128,"box":{"x":117,"y":530,"width":771,"height":12}},{"id":"86f7a196-9664-409d-83a7-ea217b9db58d","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":128,"box":{"x":116,"y":546,"width":735,"height":12}},{"id":"ed8d23c1-421e-48bb-a2f3-ea456f8eb28a","block_type":"box","text":"amount would be subject to withholding provisions of the Code. Certain limitations may apply on the","page_number":128,"box":{"x":116,"y":561,"width":746,"height":13}},{"id":"e89ce566-4f3c-430c-a9e6-504e16ff5462","block_type":"box","text":"extent to which the credit may be claimed.","page_number":128,"box":{"x":116,"y":577,"width":318,"height":12}},{"id":"51ec5a1f-ef4e-4bc7-bdfc-f103a5b3f5fc","block_type":"box","text":"Tax-Exempt Municipal Investments.","page_number":128,"box":{"x":118,"y":605,"width":263,"height":12}},{"id":"ac979adf-6a33-4d20-9da2-9c74723e0a49","block_type":"box","text":"Certain Funds may hold tax-exempt municipal investments which","page_number":128,"box":{"x":382,"y":605,"width":494,"height":12}},{"id":"546107e3-31ab-4c95-8792-f1390f238c50","block_type":"box","text":"may be in the form of tender option bonds, variable rate demand obligations, participations, beneficial","page_number":128,"box":{"x":117,"y":620,"width":757,"height":12}},{"id":"7d390a1f-437c-4b1f-ac9c-aae022a14809","block_type":"box","text":"interests in a trust, partnership interests or other forms. These investments are described in greater","page_number":128,"box":{"x":117,"y":636,"width":741,"height":12}},{"id":"171ffd95-6db9-4e24-ae89-48b5489373d5","block_type":"box","text":"detail above in this section. Some of the structures used by certain Funds include interests in long-term","page_number":128,"box":{"x":116,"y":651,"width":771,"height":12}},{"id":"bfab285f-d95a-4f61-b056-eb776401a145","block_type":"box","text":"fixed-rate municipal debt obligations, held by a trustee or custodian, that are coupled with tender","page_number":128,"box":{"x":116,"y":667,"width":716,"height":12}},{"id":"cdaa4a35-e3dc-434d-b2cd-85b616506fff","block_type":"box","text":"option, demand and other features when the tax-exempt municipal investments are created. Together,","page_number":128,"box":{"x":116,"y":682,"width":758,"height":12}},{"id":"3082fc2d-42f4-407d-a177-ab801606ddde","block_type":"box","text":"these features entitle the holder of the interest to tender (or put) the underlying municipal debt","page_number":128,"box":{"x":116,"y":698,"width":696,"height":12}},{"id":"2f9d87e7-c80d-4856-895a-e003d6ce9e9c","block_type":"box","text":"obligation to a third party at periodic intervals and to receive the principal amount thereof.","page_number":128,"box":{"x":116,"y":713,"width":661,"height":12}},{"id":"e4a570b2-2ebd-47b7-a679-016c273a7c82","block_type":"box","text":"In some cases, municipal debt obligations are represented by custodial receipts evidencing rights to","page_number":128,"box":{"x":117,"y":741,"width":740,"height":12}},{"id":"fc59bc7c-c583-474f-9e4d-5776d5debc9e","block_type":"box","text":"receive specific future interest payments, principal payments, or both, on the underlying securities held","page_number":128,"box":{"x":117,"y":757,"width":760,"height":12}},{"id":"2fa00885-babf-43c4-bcd5-cf37a87a23cd","block_type":"box","text":"by the custodian. Under such arrangements, the holder of the custodial receipt has the option to tender","page_number":128,"box":{"x":117,"y":772,"width":765,"height":12}},{"id":"f457a5b4-4115-4567-ae49-a7654420383b","block_type":"box","text":"the underlying securities at their face value to the sponsor (","page_number":128,"box":{"x":116,"y":788,"width":440,"height":12}},{"id":"ad5b2dd2-35ea-4693-af13-adfa3c6f1d18","block_type":"box","text":"e.g.","page_number":128,"box":{"x":557,"y":790,"width":26,"height":10}},{"id":"23ce692f-3ee0-40b4-8d93-6dbb157b6bba","block_type":"box","text":", a Fund, or a bank or broker-dealer or","page_number":128,"box":{"x":586,"y":788,"width":284,"height":11}},{"id":"831f8a79-cdcc-4934-8a34-6034b945f567","block_type":"box","text":"other financial institution), which is paid periodic fees equal to the difference between the securities’","page_number":128,"box":{"x":116,"y":803,"width":738,"height":12}},{"id":"8ec66c52-5a95-4e55-8d81-37b8e3b8525b","block_type":"box","text":"fixed coupon rate and the rate that would cause the securities, coupled with the tender option, to trade","page_number":128,"box":{"x":116,"y":819,"width":758,"height":12}},{"id":"81b020a6-30d3-477c-aee7-f5b29cedd4df","block_type":"box","text":"at par on the date of a rate adjustment.","page_number":128,"box":{"x":116,"y":834,"width":295,"height":12}},{"id":"edb372cf-7385-41db-acfe-187ff6384a96","block_type":"box","text":"A participation interest gives the Fund an undivided interest in a Municipal Bond in the proportion the","page_number":128,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"26880375-147c-4fba-8793-7ef65ea5f7b8","block_type":"box","text":"Fund’s participation bears to the total principal amount of the Municipal Bond, and typically provides for","page_number":128,"box":{"x":117,"y":878,"width":769,"height":12}},{"id":"92ab1b1d-e99f-4546-aa82-e993d2f254a1","block_type":"box","text":"II-80","page_number":128,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"75b61278-5857-4643-aa91-0a09b1d2feca","block_type":"box","text":"NM1026U-6033243-128/221","page_number":128,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"3c31917a-2c36-48e8-9367-f90aa338020b","block_type":"box","text":"a repurchase feature for all or any part of the full principal amount of the participation interest, plus","page_number":129,"box":{"x":116,"y":87,"width":735,"height":12}},{"id":"7226f4f6-3ebf-4de6-8114-f8734caf8a21","block_type":"box","text":"accrued interest. Trusts and partnerships are typically used to convert long-term fixed rate high quality","page_number":129,"box":{"x":116,"y":102,"width":763,"height":13}},{"id":"5eda2299-a36a-40de-9e9d-4c8805097746","block_type":"box","text":"bonds of a single state or municipal issuer into variable or floating rate demand instruments.","page_number":129,"box":{"x":117,"y":118,"width":686,"height":12}},{"id":"7c7e6d55-96fa-4a13-b2cb-6ce0e0f695d8","block_type":"box","text":"The Municipal Bond Funds may hold participation interests and custodial receipts for municipal debt","page_number":129,"box":{"x":116,"y":149,"width":746,"height":12}},{"id":"09801fed-aa00-4e0e-915b-8b0dd823b7cb","block_type":"box","text":"obligations which give the holder the right to receive payment of principal subject to the conditions","page_number":129,"box":{"x":116,"y":165,"width":731,"height":12}},{"id":"79caade6-012c-4bfb-ab17-7731fa54ad20","block_type":"box","text":"described above. The IRS has not ruled on whether the interest received on tax-exempt municipal","page_number":129,"box":{"x":116,"y":180,"width":732,"height":12}},{"id":"e03faffb-5ffd-457c-bcce-ab3adc962ff2","block_type":"box","text":"investments in the form of participation interests or custodial receipts is tax-exempt, and accordingly,","page_number":129,"box":{"x":117,"y":196,"width":751,"height":12}},{"id":"3e2f8599-27bf-4bc3-befc-7e80c483880d","block_type":"box","text":"purchases of any such interests or receipts are based on the opinions of counsel to the sponsors of","page_number":129,"box":{"x":117,"y":211,"width":742,"height":12}},{"id":"77d66dbd-5e1f-43e3-b2cc-53bf12384362","block_type":"box","text":"such derivative securities. Neither a Fund nor its investment adviser or sub-advisers will review the","page_number":129,"box":{"x":116,"y":227,"width":738,"height":9}},{"id":"2ee35e6a-1436-46a1-8885-dae6b7079c53","block_type":"box","text":"proceedings related to the creation of any tax-exempt municipal investments or the basis for such","page_number":129,"box":{"x":117,"y":242,"width":728,"height":12}},{"id":"7df15c7d-22d8-4590-b675-b50f3670fd68","block_type":"box","text":"opinions.","page_number":129,"box":{"x":116,"y":258,"width":72,"height":11}},{"id":"108e35bf-ece1-40d4-96f5-56e3525e8527","block_type":"box","text":"Operational and Technology Risks.","page_number":129,"box":{"x":117,"y":289,"width":279,"height":12}},{"id":"f409a397-ec36-4be9-92df-32d54f3edba6","block_type":"box","text":"The Fund and the entities with which it interacts directly or","page_number":129,"box":{"x":397,"y":289,"width":442,"height":12}},{"id":"2b41324d-db44-4c8f-b4e7-6935f8dfcea0","block_type":"box","text":"indirectly are susceptible to operational and technology risks, including those related to human errors,","page_number":129,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"27bebd57-4ece-4ed0-9f02-cc6df3386796","block_type":"box","text":"processing errors, communication errors, systems failures, cybersecurity incidents, and the use of","page_number":129,"box":{"x":117,"y":320,"width":731,"height":12}},{"id":"3c416f62-faec-4cdf-94e1-c07873a22e4b","block_type":"box","text":"artificial intelligence and machine learning (“AI”), which may result in losses for the Fund and its","page_number":129,"box":{"x":116,"y":335,"width":713,"height":12}},{"id":"0774b6bb-e0c8-4d61-9e77-7656dc40a54b","block_type":"box","text":"shareholders or impair the Fund’s operations. These entities include, but are not limited to, the Fund’s","page_number":129,"box":{"x":116,"y":351,"width":760,"height":12}},{"id":"eea10e96-a659-432c-baaa-c0658b315592","block_type":"box","text":"adviser, administrator, distributor, other service providers (e.g., index and benchmark providers,","page_number":129,"box":{"x":116,"y":366,"width":716,"height":12}},{"id":"66b016b2-320f-4eee-85f1-fe84bd3618c0","block_type":"box","text":"accountants, custodians, and transfer agents), financial intermediaries, counterparties, market makers,","page_number":129,"box":{"x":116,"y":382,"width":768,"height":12}},{"id":"b5e9adeb-c3ad-48dd-9cd3-5b294054ccbb","block_type":"box","text":"Authorized Participants, listing exchanges, other financial market operators, and governmental","page_number":129,"box":{"x":116,"y":397,"width":706,"height":12}},{"id":"b88feb05-50e4-4caf-880f-7509c455ac62","block_type":"box","text":"authorities. Operational and technology risks for the issuers in which the Fund invests could also result","page_number":129,"box":{"x":116,"y":413,"width":767,"height":12}},{"id":"aaaf2721-bf7c-46df-aa88-9d985e53ba09","block_type":"box","text":"in material adverse consequences for such issuers and may cause the Fund’s investments in such","page_number":129,"box":{"x":117,"y":428,"width":736,"height":12}},{"id":"eaf84f0f-ce52-4ffe-86d8-d79d0cb8069f","block_type":"box","text":"issuers to lose value. The Fund may incur substantial costs in order to mitigate operational and","page_number":129,"box":{"x":117,"y":444,"width":709,"height":12}},{"id":"3e7ef51e-e05e-4c71-9ba3-9e999faf6c3f","block_type":"box","text":"technology risks.","page_number":129,"box":{"x":116,"y":459,"width":130,"height":12}},{"id":"37cadb84-7ffb-4f29-9571-e8dc814561df","block_type":"box","text":"Cybersecurity incidents can result from deliberate attacks or unintentional events against an issuer in","page_number":129,"box":{"x":117,"y":490,"width":754,"height":12}},{"id":"365ff984-8fdc-407a-a5ea-fac287e38515","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":129,"box":{"x":116,"y":506,"width":746,"height":12}},{"id":"02c513b3-e7c9-4076-9aca-83d067d5a0aa","block_type":"box","text":"gaining unauthorized access to systems, misappropriating assets or sensitive information, corrupting or","page_number":129,"box":{"x":116,"y":521,"width":772,"height":12}},{"id":"35645605-45fe-45ae-a2fa-38d091438468","block_type":"box","text":"destroying data, and causing operational disruption. Geopolitical tension may increase the scale and","page_number":129,"box":{"x":116,"y":537,"width":751,"height":12}},{"id":"c95007a7-b8ef-469a-a2b4-9fde18e6cf23","block_type":"box","text":"sophistication of deliberate attacks, particularly those from nation states or from entities with nation","page_number":129,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"29e83cca-fbca-4d77-a5e3-25b3852b94d4","block_type":"box","text":"state backing. Cybersecurity incidents may result in any of the following: financial losses; interference","page_number":129,"box":{"x":116,"y":568,"width":757,"height":12}},{"id":"67bffb7d-916d-4210-8c91-e0d63d42e2ec","block_type":"box","text":"with the Fund’s ability to calculate its NAV; disclosure of confidential information; impediments to","page_number":129,"box":{"x":116,"y":583,"width":721,"height":12}},{"id":"da69996b-89b6-4782-8abd-929e1e216cd6","block_type":"box","text":"trading; submission of erroneous trades by the Fund or erroneous subscription or redemption orders;","page_number":129,"box":{"x":116,"y":599,"width":754,"height":12}},{"id":"18778c79-76ec-4a63-909f-3d1520fcf314","block_type":"box","text":"the inability of the Fund or its service providers to transact business; violations of applicable privacy","page_number":129,"box":{"x":116,"y":614,"width":743,"height":12}},{"id":"443973ce-a438-4047-87d1-89a1db844013","block_type":"box","text":"and other laws; regulatory fines; penalties; reputational damage; reimbursement or other compensation","page_number":129,"box":{"x":116,"y":630,"width":772,"height":12}},{"id":"703ba21b-b3fb-4cd5-b10c-b99bc451d815","block_type":"box","text":"costs; and other legal and compliance expenses. Furthermore, cybersecurity incidents may render","page_number":129,"box":{"x":116,"y":645,"width":735,"height":12}},{"id":"8c268056-73b0-4500-88a5-6953fa3de951","block_type":"box","text":"records of the Fund, including records relating to its assets and transactions, shareholder ownership of","page_number":129,"box":{"x":117,"y":661,"width":762,"height":12}},{"id":"ef5eadaf-6db6-457e-83ba-bc1086d41e38","block_type":"box","text":"Fund shares, and other data integral to the Fund’s functioning, inaccessible, inaccurate or incomplete.","page_number":129,"box":{"x":117,"y":676,"width":755,"height":12}},{"id":"ed1d3a84-360b-4d0b-9830-3e145fe29ea6","block_type":"box","text":"Power outages, natural disasters, equipment malfunctions and processing errors that threaten","page_number":129,"box":{"x":117,"y":692,"width":697,"height":12}},{"id":"8731c99d-58de-401c-bbd2-17414c9a7ce5","block_type":"box","text":"information and technology systems relied upon by the Fund or its service providers, as well as market","page_number":129,"box":{"x":117,"y":707,"width":761,"height":12}},{"id":"3ea054b5-9a1e-4455-8459-c325b2d6e2e2","block_type":"box","text":"events that occur at a pace that overloads these systems, may also disrupt business operations or","page_number":129,"box":{"x":116,"y":723,"width":731,"height":12}},{"id":"e5c4b5b6-f92c-4dd4-8e12-8e75357e2bc8","block_type":"box","text":"impact critical data.","page_number":129,"box":{"x":117,"y":738,"width":141,"height":12}},{"id":"aa3ec714-c4c1-465c-b606-4b1a07372132","block_type":"box","text":"AI refers to computer systems that can perform tasks that would otherwise require human intelligence","page_number":129,"box":{"x":116,"y":769,"width":755,"height":12}},{"id":"9871bfc1-f5a0-4417-9fe5-fb1f37903f76","block_type":"box","text":"and encompasses various different forms of artificial intelligence, including machine learning models.","page_number":129,"box":{"x":116,"y":785,"width":747,"height":12}},{"id":"5f4689b3-5934-4629-9554-dd8cbe159f49","block_type":"box","text":"AI is typically designed to analyze data, learn from patterns and experiences, make decisions, and","page_number":129,"box":{"x":116,"y":800,"width":729,"height":12}},{"id":"d59c66b0-20c2-40a7-9df9-1b6009def979","block_type":"box","text":"solve problems. The risks of increased use of AI technologies, such as machine learning, include data","page_number":129,"box":{"x":116,"y":816,"width":757,"height":12}},{"id":"c6669488-9a16-4024-a36a-b2f88d1550ac","block_type":"box","text":"risk, transparency risk, and operational risk. These AI technologies, which are generally highly reliant","page_number":129,"box":{"x":117,"y":831,"width":753,"height":12}},{"id":"f9a0c857-b265-4ae9-b1d9-872253252b1c","block_type":"box","text":"on the collection and analysis of large amounts of data, may incorporate biased or inaccurate data, and","page_number":129,"box":{"x":116,"y":847,"width":772,"height":12}},{"id":"8e5f8a1f-6ae7-48e0-a716-5cea50b790fc","block_type":"box","text":"it is not possible or practicable to incorporate all relevant data into such technologies. The output or","page_number":129,"box":{"x":117,"y":862,"width":741,"height":12}},{"id":"567512e2-21ba-4d1f-aec8-04e8a900cb2c","block_type":"box","text":"results of any such AI technologies may therefore be incomplete, erroneous, distorted or misleading.","page_number":129,"box":{"x":117,"y":878,"width":750,"height":12}},{"id":"a610d056-0ea1-4aaa-8bbf-4fd4ede39ffa","block_type":"box","text":"II-81","page_number":129,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"2c802e61-e522-43a8-9adf-90b3f98cdf40","block_type":"box","text":"NM1026U-6033243-129/221","page_number":129,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"c3542163-78f4-4bce-8b70-7bac84a833a0","block_type":"box","text":"Further, AI tools may lack transparency as to how data is utilized and how outputs are generated. AI","page_number":130,"box":{"x":117,"y":87,"width":747,"height":12}},{"id":"6687350b-8ef2-4723-9c03-b7212acc5c9c","block_type":"box","text":"technologies may also allow the unintended introduction of vulnerabilities into infrastructures and","page_number":130,"box":{"x":116,"y":102,"width":723,"height":13}},{"id":"f516b007-e96e-421d-9a41-c71ee3d94d49","block_type":"box","text":"applications. The Fund and its shareholders could be negatively impacted as a result of these risks","page_number":130,"box":{"x":116,"y":118,"width":739,"height":12}},{"id":"b6931c89-d808-460b-8467-45630657720c","block_type":"box","text":"associated with AI technologies. AI technologies and their current and potential future applications, and","page_number":130,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"81c8a065-3c48-4386-bf8c-04648a82acfc","block_type":"box","text":"the regulatory frameworks within which they operate, continue to quickly evolve, and it is impossible to","page_number":130,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"23258bbe-e624-449c-957a-138ed82af1af","block_type":"box","text":"anticipate the full scope of future AI capabilities or rules and the associated risks to the Fund.","page_number":130,"box":{"x":116,"y":165,"width":696,"height":11}},{"id":"d98cb66f-6400-4c51-a789-c30d0d6856b3","block_type":"box","text":"While the Fund’s service providers are required to have appropriate operational, information security","page_number":130,"box":{"x":116,"y":196,"width":750,"height":12}},{"id":"f8c45574-6965-4814-998b-dfbab2bcb610","block_type":"box","text":"and cybersecurity risk management policies and procedures, their methods of risk management may","page_number":130,"box":{"x":116,"y":211,"width":753,"height":12}},{"id":"39c1c33e-79f0-4f13-aff8-ba10cf48b3d0","block_type":"box","text":"differ from those of the Fund in the setting of priorities, the personnel and resources available or the","page_number":130,"box":{"x":116,"y":227,"width":745,"height":12}},{"id":"4dfa665e-4715-49c1-a9f9-3243259f3d63","block_type":"box","text":"effectiveness of relevant controls. The Fund and its adviser seek to reduce these risks through","page_number":130,"box":{"x":116,"y":242,"width":706,"height":12}},{"id":"e9a6143e-d610-4253-abde-89fe1e8db78e","block_type":"box","text":"controls, procedures and oversight, including establishing business continuity plans and risk","page_number":130,"box":{"x":116,"y":258,"width":687,"height":12}},{"id":"b02e541e-0785-4120-bde1-0ed52e4baaa9","block_type":"box","text":"management systems. However, there are inherent limitations in such plans and systems, including","page_number":130,"box":{"x":117,"y":273,"width":744,"height":12}},{"id":"d616a343-ef81-454b-983b-125daae768ce","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":130,"box":{"x":116,"y":289,"width":766,"height":12}},{"id":"0ca871c9-825f-49c8-8119-de4704b33787","block_type":"box","text":"future; that such plans and systems may not completely eliminate the occurrence or mitigate the","page_number":130,"box":{"x":116,"y":304,"width":719,"height":12}},{"id":"602c6c74-27a0-4775-aa60-51018ba0fd77","block_type":"box","text":"effects of operational or information security disruptions or failures or of cybersecurity incidents; or that","page_number":130,"box":{"x":116,"y":320,"width":766,"height":12}},{"id":"358f4221-2a8c-489e-8f7d-c1ea74745645","block_type":"box","text":"prevention and remediation efforts will not be successful or that incidents will go undetected. The Fund","page_number":130,"box":{"x":117,"y":335,"width":766,"height":12}},{"id":"9880d452-8507-4ed4-9cf2-8cb766454ba0","block_type":"box","text":"cannot control the systems, information security or other cybersecurity of the issuers in which it invests","page_number":130,"box":{"x":116,"y":351,"width":767,"height":12}},{"id":"34d4d758-9a01-4fb4-a167-814b5259f52d","block_type":"box","text":"or its service providers, counterparties, and other third parties whose activities affect the Fund.","page_number":130,"box":{"x":116,"y":366,"width":706,"height":12}},{"id":"a41ff96f-53f3-4934-8ea4-ea5a6a7470be","block_type":"box","text":"AI and its current and potential future applications, including in the investment and financial sectors, as","page_number":130,"box":{"x":116,"y":397,"width":767,"height":12}},{"id":"9f0af3b4-f807-4e0e-8c00-fcd7d0c84631","block_type":"box","text":"well as the regulatory frameworks within which they operate, continue to rapidly evolve, and it is","page_number":130,"box":{"x":116,"y":413,"width":715,"height":12}},{"id":"6855ccdb-bffb-4e63-8a7a-94eb313be23b","block_type":"box","text":"impossible to predict the full extent of future applications or regulations. Regulators continue to develop","page_number":130,"box":{"x":117,"y":428,"width":770,"height":12}},{"id":"b6dd57f3-8629-4367-a0ae-06c2154f5377","block_type":"box","text":"new rules and standards related to cybersecurity and data protection. Compliance with evolving","page_number":130,"box":{"x":117,"y":444,"width":713,"height":12}},{"id":"efcb0515-e62c-4d23-8431-8848dd2a8f39","block_type":"box","text":"regulations can be demanding and costly, requiring substantial resources to monitor and implement","page_number":130,"box":{"x":117,"y":459,"width":742,"height":12}},{"id":"3a99f039-f092-46e1-a514-11ab88d91eb0","block_type":"box","text":"required changes. Ongoing and future regulatory actions with respect to AI generally or artificial","page_number":130,"box":{"x":117,"y":475,"width":713,"height":12}},{"id":"13eb0606-9213-4f62-86da-40d804dc0340","block_type":"box","text":"intelligence’s use in any industry in particular may alter, perhaps to a materially adverse extent, the","page_number":130,"box":{"x":117,"y":490,"width":738,"height":12}},{"id":"d39ce9c6-1929-41dc-978e-3d13e5210e88","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":130,"box":{"x":116,"y":506,"width":759,"height":12}},{"id":"d66ec8eb-7160-419f-b77a-fceb87a01747","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":130,"box":{"x":117,"y":521,"width":738,"height":12}},{"id":"a489ff03-ba77-4b91-8254-9773646d24ae","block_type":"box","text":"service providers, as well as the Fund or the issuers in which it invests, service providers, or other","page_number":130,"box":{"x":116,"y":537,"width":731,"height":12}},{"id":"411c2e76-983e-4429-b85c-a7d17142d7c9","block_type":"box","text":"market participants to continue to operate as intended.","page_number":130,"box":{"x":117,"y":552,"width":410,"height":12}},{"id":"afb15885-728e-42ee-9f60-9a491d2c4ebc","block_type":"box","text":"Participation Notes.","page_number":130,"box":{"x":116,"y":583,"width":157,"height":12}},{"id":"9ea2828c-8d6f-4c9b-a2a2-5494552f4830","block_type":"box","text":"A Fund may buy participation notes from a bank or broker-dealer (“issuer”) that","page_number":130,"box":{"x":274,"y":583,"width":596,"height":12}},{"id":"efbaac9b-9dae-4d79-94d2-6f868aaed3f3","block_type":"box","text":"entitle the Fund to a return measured by the change in value of an identified underlying security or","page_number":130,"box":{"x":116,"y":599,"width":733,"height":12}},{"id":"e3716fcd-521e-4417-abad-6b88c1da3bf3","block_type":"box","text":"basket of securities (collectively, the “underlying security”). Participation notes are typically used when","page_number":130,"box":{"x":117,"y":614,"width":761,"height":12}},{"id":"4e2096cc-8d81-47c5-bd7d-3612c4de9e17","block_type":"box","text":"a direct investment in the underlying security is restricted due to country-specific regulations.","page_number":130,"box":{"x":116,"y":630,"width":692,"height":12}},{"id":"845c8e45-53df-4a19-8727-f29c4a3ac571","block_type":"box","text":"The Fund is subject to counterparty risk associated with each issuer. Investment in a participation note","page_number":130,"box":{"x":116,"y":661,"width":761,"height":12}},{"id":"1b0a8a2e-8aeb-4ebc-8ed6-9863decb56de","block_type":"box","text":"is not the same as investment in the constituent shares of the company. A participation note represents","page_number":130,"box":{"x":117,"y":676,"width":766,"height":12}},{"id":"0ebda9ec-aff1-455b-9de2-660d2f6e1124","block_type":"box","text":"only an obligation of the issuer to provide the Fund the economic performance equivalent to holding","page_number":130,"box":{"x":116,"y":692,"width":739,"height":12}},{"id":"064dff8f-286e-4b0a-8079-dbbcd09ee109","block_type":"box","text":"shares of an underlying security. A participation note does not provide any beneficial or equitable","page_number":130,"box":{"x":116,"y":707,"width":720,"height":12}},{"id":"db0917cf-34e9-4e59-b22c-418f219eaee8","block_type":"box","text":"entitlement or interest in the relevant underlying security. In other words, shares of the underlying","page_number":130,"box":{"x":116,"y":723,"width":721,"height":12}},{"id":"16d80f0b-7d62-4730-bc3f-f7ba16d3e70e","block_type":"box","text":"security are not in any way owned by the Fund. However, each participation note synthetically","page_number":130,"box":{"x":116,"y":738,"width":698,"height":12}},{"id":"55f97e75-7883-43ee-966c-f49cd58b94cb","block_type":"box","text":"replicates the economic benefit of holding shares in the underlying security. Because a participation","page_number":130,"box":{"x":117,"y":754,"width":738,"height":12}},{"id":"05e4ac69-9106-40ef-8bad-9086fdaaa7e1","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":130,"box":{"x":117,"y":769,"width":765,"height":12}},{"id":"d9d18311-45fe-4c68-868d-4da7aefd9db3","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":130,"box":{"x":117,"y":785,"width":740,"height":12}},{"id":"51674f0b-9ba6-473e-b7b8-a47f15316cd3","block_type":"box","text":"perform its obligations. A Fund attempts to mitigate that risk by purchasing only from issuers","page_number":130,"box":{"x":117,"y":800,"width":683,"height":12}},{"id":"45c335f4-eb82-4fc6-9c88-82527d45240b","block_type":"box","text":"determined to be creditworthy.","page_number":130,"box":{"x":116,"y":816,"width":225,"height":12}},{"id":"f010a882-977b-4dd7-8892-8764a423ddc4","block_type":"box","text":"The counterparty may, but is not required to, purchase the shares of the underlying security to hedge","page_number":130,"box":{"x":116,"y":847,"width":755,"height":12}},{"id":"bfb49243-5099-43e8-90c0-6d805d4324e9","block_type":"box","text":"its obligation. A Fund may, but is not required to, purchase credit protection against the default of the","page_number":130,"box":{"x":117,"y":862,"width":752,"height":12}},{"id":"14663761-ddb5-45ba-a9b5-2585b1109ee1","block_type":"box","text":"issuer. When the participation note expires or a Fund exercises the participation note and closes its","page_number":130,"box":{"x":117,"y":878,"width":742,"height":12}},{"id":"fefc0b5b-7a36-4691-82f9-2310da6e8cde","block_type":"box","text":"II-82","page_number":130,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"520f4340-11f4-4967-83c3-27c80250b885","block_type":"box","text":"NM1026U-6033243-130/221","page_number":130,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"f5d26a48-2700-41bd-9f4b-4056adf56957","block_type":"box","text":"position, the Fund receives a payment that is based upon the then-current value of the underlying","page_number":131,"box":{"x":117,"y":87,"width":728,"height":12}},{"id":"f1009b0d-400e-4a88-8c7e-6ae8a6069c51","block_type":"box","text":"security converted into U.S. dollars (less transaction costs). The price, performance and liquidity of a","page_number":131,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"22a5a08a-1f4d-426c-835e-754d94a37a69","block_type":"box","text":"participation note are all linked directly to the underlying security. A Fund’s ability to redeem or","page_number":131,"box":{"x":117,"y":118,"width":704,"height":12}},{"id":"4d190dd8-8c09-4cbf-a815-b31725792e89","block_type":"box","text":"exercise a participation note generally is dependent on the liquidity in the local trading market for the","page_number":131,"box":{"x":116,"y":134,"width":750,"height":12}},{"id":"cd0a02f1-5201-4273-973d-297e35a3d04a","block_type":"box","text":"security underlying the participation note.","page_number":131,"box":{"x":116,"y":149,"width":310,"height":12}},{"id":"2b29f463-66cf-4902-87d3-ab77a821b3bb","block_type":"box","text":"Portfolio Turnover Rates.","page_number":131,"box":{"x":116,"y":180,"width":201,"height":10}},{"id":"ae7273de-d686-4272-8226-f687b64888f0","block_type":"box","text":"A Fund’s annual portfolio turnover rate will not be a factor preventing a sale","page_number":131,"box":{"x":318,"y":180,"width":569,"height":12}},{"id":"44888401-ed4d-4acd-bf77-3f7858f93919","block_type":"box","text":"or purchase when the Manager believes investment considerations warrant such sale or purchase.","page_number":131,"box":{"x":116,"y":196,"width":738,"height":12}},{"id":"1b0d9514-afba-43bf-ba06-f8428aab0d85","block_type":"box","text":"Although certain Funds will use an approach to investing that is largely a passive, indexing approach,","page_number":131,"box":{"x":116,"y":211,"width":756,"height":12}},{"id":"25b0402b-ec71-45ba-9760-b62e21166697","block_type":"box","text":"such Funds may engage in a substantial number of portfolio transactions. With respect to these Funds,","page_number":131,"box":{"x":116,"y":227,"width":770,"height":12}},{"id":"aeee45e9-4e5d-4038-a7b0-11be0188a962","block_type":"box","text":"the rate of portfolio turnover will be a limiting factor when the Manager considers whether to purchase","page_number":131,"box":{"x":116,"y":242,"width":759,"height":12}},{"id":"820c22be-fb50-4230-aa25-6a7ef8857efa","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":131,"box":{"x":116,"y":258,"width":756,"height":12}},{"id":"0d3b07f4-c171-4e65-be92-efd778f48176","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":131,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"0bbea6f2-80cb-4078-88b1-36c052beb5d0","block_type":"box","text":"a particular year. High portfolio turnover (","page_number":131,"box":{"x":116,"y":289,"width":305,"height":12}},{"id":"408da55b-0ea1-4332-94f1-6f36410b928c","block_type":"box","text":"i.e.","page_number":131,"box":{"x":422,"y":289,"width":21,"height":9}},{"id":"88ccdb92-b5b5-4e8c-9241-eb6a053b6d60","block_type":"box","text":", 100% or more) may result in increased transaction costs","page_number":131,"box":{"x":446,"y":289,"width":433,"height":12}},{"id":"3ad7a36e-faed-481e-be54-82607ef24167","block_type":"box","text":"to a Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale","page_number":131,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"f1a0c348-2499-424b-8405-9ba8e4c1307c","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":131,"box":{"x":116,"y":320,"width":759,"height":12}},{"id":"bc0f2f6b-7a4a-4f92-a0cd-08cb470308d9","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":131,"box":{"x":117,"y":335,"width":743,"height":12}},{"id":"4a95ead7-774e-42bc-ac33-2cb92c330f21","block_type":"box","text":"term capital gain or loss. These effects of higher than normal portfolio turnover may adversely affect a","page_number":131,"box":{"x":116,"y":351,"width":761,"height":12}},{"id":"92f1ef6c-a2ca-4d5c-bf41-4dfe82f07071","block_type":"box","text":"Fund’s performance.","page_number":131,"box":{"x":117,"y":366,"width":158,"height":12}},{"id":"8bcf4bfd-d3c9-42a4-8fec-07e58f659c52","block_type":"box","text":"Preferred Stock.","page_number":131,"box":{"x":116,"y":397,"width":129,"height":10}},{"id":"8bd2ad97-6872-4d24-9295-0a36a1f7d88d","block_type":"box","text":"Certain Funds may invest in preferred stocks. Preferred stock has a preference over","page_number":131,"box":{"x":246,"y":397,"width":635,"height":12}},{"id":"f2399df9-1489-4332-b744-b5fe2c4ab4c2","block_type":"box","text":"common stock in liquidation (and generally dividends as well) but is subordinated to bond holders and","page_number":131,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"a3b8cb63-c2b6-41aa-8c89-23693e3590c2","block_type":"box","text":"other creditors in all respects. As a general rule,","page_number":131,"box":{"x":116,"y":428,"width":361,"height":12}},{"id":"81a4fa3c-2cd4-4226-bc9b-9299c12d3a57","block_type":"box","text":"the market value of preferred stock with a fixed","page_number":131,"box":{"x":477,"y":428,"width":354,"height":12}},{"id":"80b33689-0728-4884-b402-a8b0385587e6","block_type":"box","text":"dividend rate and no conversion element varies inversely with interest rates and perceived credit risk,","page_number":131,"box":{"x":116,"y":444,"width":757,"height":12}},{"id":"c442419f-7250-4cfe-9a1e-9dc4cd703bec","block_type":"box","text":"while the market price of convertible preferred stock generally also reflects some element of","page_number":131,"box":{"x":116,"y":459,"width":687,"height":12}},{"id":"3500078c-d3e3-4e33-beb5-cff55e3fa909","block_type":"box","text":"conversion value. Because preferred stock is junior to debt securities and other obligations of the","page_number":131,"box":{"x":116,"y":475,"width":725,"height":12}},{"id":"bb2eba30-9506-4cf0-b85a-def196cce092","block_type":"box","text":"issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a","page_number":131,"box":{"x":117,"y":490,"width":720,"height":12}},{"id":"388ebf4f-4a65-4a87-a8c4-c8b318f5d42d","block_type":"box","text":"preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike","page_number":131,"box":{"x":117,"y":506,"width":725,"height":12}},{"id":"41f8da10-4ae3-4e17-b573-358a686c804d","block_type":"box","text":"interest payments on debt securities, preferred stock dividends are payable only if declared by the","page_number":131,"box":{"x":117,"y":521,"width":731,"height":12}},{"id":"28f676da-55ad-472d-a138-4c38fa70fe60","block_type":"box","text":"issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption","page_number":131,"box":{"x":117,"y":537,"width":748,"height":12}},{"id":"9b684024-5553-42bb-9dfc-9061fb74a1a0","block_type":"box","text":"provisions.","page_number":131,"box":{"x":117,"y":552,"width":84,"height":12}},{"id":"a362884e-afcf-48cd-a277-febe034a65f6","block_type":"box","text":"Tax-Exempt Preferred Shares.","page_number":131,"box":{"x":118,"y":583,"width":224,"height":12}},{"id":"1236b840-0527-4e5b-89d0-1fdbc85de3c8","block_type":"box","text":"Certain Funds may invest in preferred interests of other investment","page_number":131,"box":{"x":344,"y":583,"width":507,"height":12}},{"id":"c83e2493-48e1-4b07-bf21-79f5383fdbc3","block_type":"box","text":"funds that pay dividends that are exempt from regular U.S. federal income tax. Such funds in turn","page_number":131,"box":{"x":116,"y":599,"width":728,"height":12}},{"id":"e64e0187-3ee8-4fdb-a174-d98369c0503f","block_type":"box","text":"invest in municipal bonds and other assets that pay interest or make distributions that are exempt from","page_number":131,"box":{"x":117,"y":614,"width":765,"height":12}},{"id":"b3d93527-465a-4c0d-8957-75b378dd1b1a","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":131,"box":{"x":117,"y":630,"width":751,"height":12}},{"id":"a8c4277e-4168-4b4e-a7db-13404f21471d","block_type":"box","text":"development of low-income, multi-family housing. Investment in such tax-exempt preferred shares","page_number":131,"box":{"x":116,"y":645,"width":733,"height":12}},{"id":"871670da-df85-4261-b26c-907ad95fa69d","block_type":"box","text":"involves many of the same issues as investing in other investment companies. These investments also","page_number":131,"box":{"x":117,"y":661,"width":763,"height":12}},{"id":"b9842341-41f0-499f-a88b-21caeca55a68","block_type":"box","text":"have additional risks, including illiquid investments risk, the absence of regulation governing","page_number":131,"box":{"x":117,"y":676,"width":679,"height":12}},{"id":"67de7ef1-1794-4aad-852a-a2b945d38103","block_type":"box","text":"investment practices, capital structure and leverage, affiliated transactions and other matters, and","page_number":131,"box":{"x":117,"y":692,"width":723,"height":12}},{"id":"ef984551-a2c8-4feb-9d1f-41446bfdeb85","block_type":"box","text":"concentration of investments in particular issuers or industries. The Municipal Bond Funds will treat","page_number":131,"box":{"x":116,"y":707,"width":736,"height":12}},{"id":"30bcf841-72a4-48f5-ba87-f09e08d96ec2","block_type":"box","text":"investments in tax-exempt preferred shares as investments in municipal bonds.","page_number":131,"box":{"x":117,"y":723,"width":587,"height":12}},{"id":"1ad3a3af-59b0-4239-92aa-4a12012a4eb0","block_type":"box","text":"Trust Preferred Securities.","page_number":131,"box":{"x":118,"y":754,"width":193,"height":9}},{"id":"0b204f19-d9cf-4593-8273-f6673e47ffa1","block_type":"box","text":"Certain Funds may invest in trust preferred securities. Trust preferred","page_number":131,"box":{"x":318,"y":754,"width":514,"height":12}},{"id":"ebf82c91-e2a8-42f0-bfc4-dd40b6c1661a","block_type":"box","text":"securities are typically issued by corporations, generally in the form of interest bearing notes with","page_number":131,"box":{"x":116,"y":769,"width":718,"height":12}},{"id":"ecc5cd71-b3db-41ec-8784-4fba4f355d8a","block_type":"box","text":"preferred securities characteristics, or by an affiliated business trust of a corporation, generally in the","page_number":131,"box":{"x":117,"y":785,"width":746,"height":12}},{"id":"9f94f207-4142-4827-bd52-ed78fbf97e6f","block_type":"box","text":"form of beneficial interests in subordinated debentures or similarly structured securities. The trust","page_number":131,"box":{"x":116,"y":800,"width":721,"height":12}},{"id":"437a5012-4f4b-473b-bffe-8410d7380796","block_type":"box","text":"preferred securities market consists of both fixed and adjustable coupon rate securities that are either","page_number":131,"box":{"x":117,"y":816,"width":753,"height":12}},{"id":"07139069-e966-430b-b740-1da5eb5baf93","block_type":"box","text":"perpetual in nature or have stated maturity dates.","page_number":131,"box":{"x":117,"y":831,"width":370,"height":12}},{"id":"090d9d14-383a-4d11-be58-e2789b5a0591","block_type":"box","text":"Trust preferred securities are typically junior and fully subordinated liabilities of an issuer and benefit","page_number":131,"box":{"x":116,"y":862,"width":748,"height":12}},{"id":"e9425662-c292-4553-8fdb-a4cc1e5871ad","block_type":"box","text":"from a guarantee that is junior and fully subordinated to the other liabilities of the guarantor. In addition,","page_number":131,"box":{"x":116,"y":878,"width":771,"height":12}},{"id":"fbd6258b-8eb6-44dc-a717-7e505136e738","block_type":"box","text":"II-83","page_number":131,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b47f116c-9e18-4187-9923-4465ac4bc036","block_type":"box","text":"NM1026U-6033243-131/221","page_number":131,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"84354080-2693-4b19-ac7e-885bf5d926de","block_type":"box","text":"trust preferred securities typically permit an issuer to defer the payment of income for five years or","page_number":132,"box":{"x":116,"y":87,"width":733,"height":12}},{"id":"a999a799-4698-4178-9a5c-db1b7c4a0025","block_type":"box","text":"more without triggering an event of default. Because of their subordinated position in the capital","page_number":132,"box":{"x":117,"y":102,"width":713,"height":13}},{"id":"e3f654c1-3e9e-411c-94b4-afa621e8f26e","block_type":"box","text":"structure of an issuer, the ability to defer payments for extended periods of time without default","page_number":132,"box":{"x":116,"y":118,"width":708,"height":12}},{"id":"72cacbb0-aadf-47d8-b52e-260e47274973","block_type":"box","text":"consequences to the issuer, and certain other features (such as restrictions on common dividend","page_number":132,"box":{"x":116,"y":134,"width":725,"height":12}},{"id":"bd4e61b4-0202-45cb-b96f-63ad8f59f793","block_type":"box","text":"payments by the issuer or ultimate guarantor when full cumulative payments on the trust preferred","page_number":132,"box":{"x":117,"y":149,"width":733,"height":12}},{"id":"e63d444a-ba16-4ff9-a5b5-b2904433404c","block_type":"box","text":"securities have not been made), these trust preferred securities are often treated as close substitutes","page_number":132,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"523fbe21-4baf-4c6b-a93b-ae0665eb9f2d","block_type":"box","text":"for traditional preferred securities, both by issuers and investors.","page_number":132,"box":{"x":116,"y":180,"width":483,"height":12}},{"id":"a7e92e13-9dd4-42d8-8b36-5519f078962e","block_type":"box","text":"Trust preferred securities include but are not limited to trust originated preferred securities (“TOPRS","page_number":132,"box":{"x":116,"y":211,"width":740,"height":12}},{"id":"d41e95c6-08eb-469d-b6f1-3d1b1f0bdfff","block_type":"box","text":"®","page_number":132,"box":{"x":857,"y":210,"width":9,"height":7}},{"id":"172fb867-be64-4df7-b90f-2866d8ce1e14","block_type":"box","text":"”);","page_number":132,"box":{"x":867,"y":211,"width":20,"height":12}},{"id":"6ebad969-5783-43d8-8f92-df3f3264a4a6","block_type":"box","text":"monthly income preferred securities (“MIPS","page_number":132,"box":{"x":117,"y":227,"width":322,"height":12}},{"id":"a1373893-3bba-414d-9be1-82a2fd1f1fc9","block_type":"box","text":"®","page_number":132,"box":{"x":439,"y":226,"width":10,"height":7}},{"id":"42a916bc-7ab1-4070-b88e-ffff20c4f9a4","block_type":"box","text":"”); quarterly income bond securities (“QUIBS","page_number":132,"box":{"x":449,"y":227,"width":330,"height":12}},{"id":"687fa2de-cd19-4f44-9ce4-c05a06425ca0","block_type":"box","text":"®","page_number":132,"box":{"x":780,"y":226,"width":9,"height":7}},{"id":"587e28fa-3349-48ea-bed5-0cfc1e3e27b4","block_type":"box","text":"” ); quarterly","page_number":132,"box":{"x":790,"y":227,"width":95,"height":12}},{"id":"cf61946f-405a-4dab-8fe7-d69f7693862d","block_type":"box","text":"income debt securities (“QUIDS","page_number":132,"box":{"x":117,"y":242,"width":234,"height":12}},{"id":"c0f8c9e9-4f7d-46a3-aae5-b9bc720e62ed","block_type":"box","text":"®","page_number":132,"box":{"x":352,"y":241,"width":10,"height":7}},{"id":"7af45eb5-8174-446f-8595-238f7631fe70","block_type":"box","text":"”); quarterly income preferred securities (“QUIPS","page_number":132,"box":{"x":362,"y":242,"width":361,"height":12}},{"id":"17c6ad17-7bdc-4a18-b671-95bddcc7a52f","block_type":"box","text":"SM","page_number":132,"box":{"x":724,"y":242,"width":16,"height":6}},{"id":"9e65425f-e45f-480d-94bc-5aaa5fab8757","block_type":"box","text":"”); corporate trust","page_number":132,"box":{"x":741,"y":242,"width":133,"height":12}},{"id":"2da526c0-6e0f-485e-95f6-15278ae61ab4","block_type":"box","text":"securities (“CORTS","page_number":132,"box":{"x":116,"y":258,"width":145,"height":12}},{"id":"5e1ac828-7cb4-46ea-8056-890dd2844259","block_type":"box","text":"®","page_number":132,"box":{"x":262,"y":257,"width":9,"height":7}},{"id":"a19caf43-42dc-4556-90f0-6e594f7f5bdc","block_type":"box","text":"”); public income notes (“PINES","page_number":132,"box":{"x":271,"y":258,"width":235,"height":12}},{"id":"c230f03a-1e9c-498b-b75d-29fb6388d020","block_type":"box","text":"®","page_number":132,"box":{"x":507,"y":257,"width":9,"height":7}},{"id":"8feb5ce4-d6ae-4ac8-a135-21e827ed7cb1","block_type":"box","text":"”); and other trust preferred securities.","page_number":132,"box":{"x":517,"y":258,"width":287,"height":12}},{"id":"4b12c6d1-6a60-40d8-abdf-1d15d07fceaa","block_type":"box","text":"Trust preferred securities are typically issued with a final maturity date, although some are perpetual in","page_number":132,"box":{"x":116,"y":289,"width":766,"height":12}},{"id":"984117ab-2847-4e57-b9f5-bcef361065b8","block_type":"box","text":"nature. In certain instances, a final maturity date may be extended and/or the final payment of principal","page_number":132,"box":{"x":117,"y":304,"width":767,"height":12}},{"id":"64b7cfa9-65e9-4a37-8f51-ee8e21addc51","block_type":"box","text":"may be deferred at the issuer’s option for a specified time without default. No redemption can typically","page_number":132,"box":{"x":117,"y":320,"width":760,"height":12}},{"id":"f6b45ba3-4325-4bb6-b292-b718593ec54a","block_type":"box","text":"take place unless all cumulative payment obligations have been met, although issuers may be able to","page_number":132,"box":{"x":116,"y":335,"width":758,"height":12}},{"id":"54200aea-ade5-47af-a73b-214c529a89b8","block_type":"box","text":"engage in open-market repurchases without regard to whether all payments have been paid.","page_number":132,"box":{"x":116,"y":351,"width":693,"height":12}},{"id":"a453a6dd-eec6-461f-ad2c-6812cc549640","block_type":"box","text":"Many trust preferred securities are issued by trusts or other special purpose entities established by","page_number":132,"box":{"x":117,"y":382,"width":737,"height":12}},{"id":"d90028e3-6c87-49be-becb-46f99b70f27d","block_type":"box","text":"operating companies and are not a direct obligation of an operating company. At the time the trust or","page_number":132,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"a0c8004c-20ef-4b8a-b85f-14f979c23ac1","block_type":"box","text":"special purpose entity sells such preferred securities to investors, it purchases debt of the operating","page_number":132,"box":{"x":116,"y":413,"width":745,"height":12}},{"id":"b3e59825-5e47-41f4-b6b7-bbfb9f2aff46","block_type":"box","text":"company (with terms comparable to those of the trust or special purpose entity securities), which","page_number":132,"box":{"x":116,"y":428,"width":722,"height":12}},{"id":"53cb0f61-bb8f-437a-81e0-0b1329d09b03","block_type":"box","text":"enables the operating company to deduct for tax purposes the interest paid on the debt held by the","page_number":132,"box":{"x":116,"y":444,"width":739,"height":12}},{"id":"f42eee71-1ad8-419e-9c4d-f7dbe10e2bf7","block_type":"box","text":"trust or special purpose entity. The trust or special purpose entity is generally required to be treated as","page_number":132,"box":{"x":116,"y":459,"width":765,"height":12}},{"id":"5ea87e79-60c0-4021-8af9-e105bd57b99f","block_type":"box","text":"transparent for U.S. federal income tax purposes such that the holders of the trust preferred securities","page_number":132,"box":{"x":116,"y":475,"width":762,"height":12}},{"id":"60602373-96ac-4282-8027-3559ca931d0f","block_type":"box","text":"are treated as owning beneficial interests in the underlying debt of the operating company. Accordingly,","page_number":132,"box":{"x":116,"y":490,"width":772,"height":12}},{"id":"d9357d85-126c-4ca0-acc6-40dddbc904da","block_type":"box","text":"payments on the trust preferred securities are treated as interest rather than dividends for U.S. federal","page_number":132,"box":{"x":117,"y":506,"width":763,"height":12}},{"id":"f0ac5402-650a-4ac3-94e3-fc95f8b6db57","block_type":"box","text":"income tax purposes. The trust or special purpose entity in turn would be a holder of the operating","page_number":132,"box":{"x":117,"y":521,"width":732,"height":12}},{"id":"1f30372e-76bf-443b-8105-2e8cfc3acf18","block_type":"box","text":"company’s debt and would have priority with respect to the operating company’s earnings and profits","page_number":132,"box":{"x":116,"y":537,"width":754,"height":12}},{"id":"2e42530c-6a64-4194-a789-09fdf22fcbdc","block_type":"box","text":"over the operating company’s common shareholders, but would typically be subordinated to other","page_number":132,"box":{"x":116,"y":552,"width":729,"height":12}},{"id":"4fa1442f-5ce0-46da-b65f-0d1b41033a11","block_type":"box","text":"classes of the operating company’s debt. Typically a preferred share has a rating that is slightly below","page_number":132,"box":{"x":116,"y":568,"width":760,"height":12}},{"id":"fd68159d-d535-4c2d-8453-bb45e14854e8","block_type":"box","text":"that of its corresponding operating company’s senior debt securities.","page_number":132,"box":{"x":116,"y":583,"width":512,"height":12}},{"id":"4fda7bb8-77ef-4dab-ab37-f132b6afdedb","block_type":"box","text":"Real Estate Investment Trusts (“REITs”).","page_number":132,"box":{"x":116,"y":614,"width":324,"height":12}},{"id":"f1ed7bd7-b144-4ac3-97b2-69b65ff4124f","block_type":"box","text":"In pursuing its investment strategy, a Fund may invest in","page_number":132,"box":{"x":441,"y":614,"width":430,"height":12}},{"id":"aab56f77-50cc-436c-9e99-4a51e67f8d69","block_type":"box","text":"shares of REITs. REITs possess certain risks which differ from an investment in common stocks.","page_number":132,"box":{"x":116,"y":630,"width":724,"height":12}},{"id":"69372a15-3788-4b92-a06c-d5f80b28fb9d","block_type":"box","text":"REITs are financial vehicles that pool investor’s capital to purchase or finance real estate. REITs may","page_number":132,"box":{"x":117,"y":645,"width":756,"height":12}},{"id":"283d9092-dab0-4465-9e63-dabd5a60f5cd","block_type":"box","text":"concentrate their investments in specific geographic areas or in specific property types,","page_number":132,"box":{"x":116,"y":661,"width":646,"height":12}},{"id":"1341c045-0018-4caf-9091-57b0336f5553","block_type":"box","text":"i.e.","page_number":132,"box":{"x":768,"y":661,"width":21,"height":9}},{"id":"5f18b776-c1ac-4a04-b489-e49481741d6d","block_type":"box","text":", hotels,","page_number":132,"box":{"x":792,"y":661,"width":56,"height":11}},{"id":"46cd7d79-3eef-4978-b5d8-c59c7c650291","block_type":"box","text":"shopping malls, residential complexes and office buildings.","page_number":132,"box":{"x":116,"y":676,"width":435,"height":12}},{"id":"9b1f6040-6712-4b0e-8b4c-39af5e6726a8","block_type":"box","text":"REITs are subject to management fees and other expenses, and so a Fund that invests in REITs will","page_number":132,"box":{"x":117,"y":707,"width":746,"height":12}},{"id":"2d2f1299-2c5c-43df-aaf5-0316664bdcfc","block_type":"box","text":"bear its proportionate share of the costs of the REITs’ operations. There are three general categories","page_number":132,"box":{"x":117,"y":723,"width":749,"height":12}},{"id":"4fecd2f5-be23-436a-8e63-8af9ddfedfc1","block_type":"box","text":"of REITs: Equity REITs, Mortgage REITs and Hybrid REITs. Equity REITs invest primarily in direct fee","page_number":132,"box":{"x":116,"y":738,"width":758,"height":12}},{"id":"f9406ca5-8306-4cde-8d9d-0917a1ac2050","block_type":"box","text":"ownership or leasehold ownership of real property, which derive most of their income from rents.","page_number":132,"box":{"x":116,"y":754,"width":715,"height":12}},{"id":"ece3d2c7-f083-463c-bbf5-b59294d47fd6","block_type":"box","text":"Mortgage REITs invest mostly in mortgages on real estate, which may secure construction,","page_number":132,"box":{"x":117,"y":769,"width":675,"height":12}},{"id":"7d69fb6e-1768-42c7-96a2-fde71c62c8b4","block_type":"box","text":"development or long-term loans; the main source of their income is mortgage interest payments.","page_number":132,"box":{"x":116,"y":785,"width":714,"height":12}},{"id":"559b67b8-1782-4d72-99ab-036260c067ff","block_type":"box","text":"Hybrid REITs hold both ownership and mortgage interests in real estate.","page_number":132,"box":{"x":117,"y":800,"width":535,"height":12}},{"id":"a7382abd-2686-4606-bc73-6e8f50a1a6e8","block_type":"box","text":"Investing in REITs involves certain unique risks in addition to those risks associated with investing in","page_number":132,"box":{"x":117,"y":831,"width":749,"height":12}},{"id":"167a7702-3c30-4652-a054-62b70ed01e7e","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":132,"box":{"x":116,"y":847,"width":735,"height":12}},{"id":"279edd96-bcb7-44b2-8d2d-b15939b2b3a4","block_type":"box","text":"distribute income may be adversely affected by several factors, including rising interest rates, changes","page_number":132,"box":{"x":116,"y":862,"width":765,"height":12}},{"id":"d547fc39-1083-4511-8117-3da4576e4d7c","block_type":"box","text":"in the national, state and local economic climate and real estate conditions, occupancy and rental","page_number":132,"box":{"x":117,"y":878,"width":727,"height":12}},{"id":"d7e0828a-aeb1-4daf-9ce1-f42b9d86afe9","block_type":"box","text":"II-84","page_number":132,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"af6a64fa-5970-4708-8d5e-3172cd060fb6","block_type":"box","text":"NM1026U-6033243-132/221","page_number":132,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"2401235d-b667-41ab-a4b2-5cf8ee9b369e","block_type":"box","text":"rates, perceptions of prospective tenants of the safety, convenience and attractiveness of the","page_number":133,"box":{"x":117,"y":87,"width":695,"height":12}},{"id":"7d29b404-8086-4664-9685-dd02f15c9492","block_type":"box","text":"properties, the ability of the owners to provide adequate management, maintenance and insurance, the","page_number":133,"box":{"x":117,"y":102,"width":770,"height":13}},{"id":"807a31cd-d641-4d83-a3dc-1f31b13b3b31","block_type":"box","text":"cost of complying with the Americans with Disabilities Act, increased competition from new properties,","page_number":133,"box":{"x":116,"y":118,"width":761,"height":12}},{"id":"409721b2-4845-428d-8a4b-7fc38eb6ae07","block_type":"box","text":"the impact of present or future environmental legislation and compliance with environmental laws,","page_number":133,"box":{"x":116,"y":134,"width":729,"height":12}},{"id":"f8194580-7bd3-4b90-b35c-895f1dd1b015","block_type":"box","text":"failing to maintain their exemptions from registration under the Investment Company Act, changes in","page_number":133,"box":{"x":116,"y":149,"width":749,"height":12}},{"id":"8d8a39cb-0a17-409f-a56f-df0d24e6326f","block_type":"box","text":"real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal","page_number":133,"box":{"x":117,"y":165,"width":733,"height":12}},{"id":"4cf99f7e-ec5a-4081-85ed-45d656842495","block_type":"box","text":"policies, adverse changes in zoning laws and other factors beyond the control of the issuers of the","page_number":133,"box":{"x":117,"y":180,"width":733,"height":12}},{"id":"7abe757f-2f48-4b95-a4b6-da5e98e863e4","block_type":"box","text":"REITs. To the extent that assets underlying a REIT are concentrated geographically, by property type,","page_number":133,"box":{"x":117,"y":196,"width":762,"height":12}},{"id":"ed0fd329-c11e-4219-8c66-58bdc86ff8d4","block_type":"box","text":"or in certain other respects, these risks may be heightened.","page_number":133,"box":{"x":116,"y":211,"width":446,"height":12}},{"id":"d5530852-39e5-40b8-b563-129bf407a007","block_type":"box","text":"In addition, distributions received by a Fund from REITs may consist of dividends, capital gains and/or","page_number":133,"box":{"x":117,"y":242,"width":761,"height":12}},{"id":"34b3b672-69a0-47e6-abfe-f3030e53999b","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":133,"box":{"x":117,"y":258,"width":760,"height":12}},{"id":"9df1ac3e-e749-4c31-9d42-b5ce4cfa572a","block_type":"box","text":"companies, to the extent application of the Fund’s investment strategy results in the Fund investing in","page_number":133,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"9d0be177-3642-4c24-8991-1e92a73edb42","block_type":"box","text":"REIT shares, the percentage of the Fund’s dividend income received from REIT shares will likely","page_number":133,"box":{"x":117,"y":289,"width":722,"height":12}},{"id":"db7ff96d-d734-4409-96d3-28180b09d43e","block_type":"box","text":"exceed the percentage of the Fund’s portfolio which is comprised of REIT shares. Ordinary REIT","page_number":133,"box":{"x":116,"y":304,"width":723,"height":12}},{"id":"a6e95c6a-9777-4792-bb26-5abcfc667302","block_type":"box","text":"dividends received by the Fund and distributed to the Fund’s shareholders will generally be taxable as","page_number":133,"box":{"x":116,"y":320,"width":762,"height":12}},{"id":"154a4361-9bc0-48da-a07a-404fb9d2e2e4","block_type":"box","text":"ordinary income and will not constitute “qualified dividend income.” However, a non-corporate taxpayer","page_number":133,"box":{"x":116,"y":335,"width":768,"height":12}},{"id":"12300396-388c-438d-865b-201cc105fbc5","block_type":"box","text":"who is a direct REIT shareholder may claim a 20% “qualified business income” deduction for ordinary","page_number":133,"box":{"x":116,"y":351,"width":757,"height":12}},{"id":"afc19b11-01c2-430a-aeaf-3b7afa65f861","block_type":"box","text":"REIT dividends, and a regulated investment company may report dividends as eligible for this","page_number":133,"box":{"x":117,"y":366,"width":698,"height":12}},{"id":"0a5909e7-9bc0-43e1-8cfd-35c2dac19ad2","block_type":"box","text":"deduction to the extent the regulated investment company’s income is derived from ordinary REIT","page_number":133,"box":{"x":116,"y":382,"width":731,"height":12}},{"id":"e175fab6-6940-46a9-b792-e7d64c610093","block_type":"box","text":"dividends (reduced by allocable regulated investment company expenses). A shareholder may treat","page_number":133,"box":{"x":116,"y":397,"width":745,"height":12}},{"id":"f35e306a-f475-4e53-b9f4-2ca7da21d61d","block_type":"box","text":"the dividends as such provided the regulated investment company and the shareholder satisfy","page_number":133,"box":{"x":116,"y":413,"width":704,"height":12}},{"id":"121921cc-692d-43ae-af06-2be592862808","block_type":"box","text":"applicable holding period requirements.","page_number":133,"box":{"x":116,"y":428,"width":298,"height":12}},{"id":"63df233c-8b80-401b-b4fa-62b491971e9c","block_type":"box","text":"REITs (especially mortgage REITs) are also subject to interest rate risk. Rising interest rates may","page_number":133,"box":{"x":117,"y":459,"width":728,"height":12}},{"id":"f3204b38-1327-402d-bbfb-d8093c32ffcc","block_type":"box","text":"cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the","page_number":133,"box":{"x":116,"y":475,"width":726,"height":12}},{"id":"bc174465-6014-4e5b-90e4-e19bb5be3f5d","block_type":"box","text":"market price of the equity securities issued by a REIT. Rising interest rates also generally increase the","page_number":133,"box":{"x":117,"y":490,"width":764,"height":12}},{"id":"d2c3cca2-35d6-43c5-a066-3e09852cc229","block_type":"box","text":"costs of obtaining financing, which could cause the value of a Fund’s REIT investments to decline.","page_number":133,"box":{"x":116,"y":506,"width":734,"height":12}},{"id":"98e08af9-1271-4359-b292-9682cad6ff0e","block_type":"box","text":"During periods when interest rates are declining, mortgages are often refinanced. Refinancing may","page_number":133,"box":{"x":117,"y":521,"width":738,"height":12}},{"id":"0a931b34-3330-4664-82b0-4fc4f8217043","block_type":"box","text":"reduce the yield on investments in mortgage REITs. In addition, since REITs depend on payment","page_number":133,"box":{"x":117,"y":537,"width":726,"height":12}},{"id":"0be1967d-1564-4cf9-b847-e6d54104e360","block_type":"box","text":"under their mortgage loans and leases to generate cash to make distributions to their shareholders,","page_number":133,"box":{"x":117,"y":552,"width":743,"height":12}},{"id":"607dcc43-c569-4efa-b1c4-62fec8968926","block_type":"box","text":"investments in REITs may be adversely affected by defaults on such mortgage loans or leases.","page_number":133,"box":{"x":117,"y":568,"width":712,"height":12}},{"id":"f13049c1-a8a8-4b8e-9ac0-485986f3dc6b","block_type":"box","text":"Investing in certain REITs, which often have small market capitalizations, may also involve the same","page_number":133,"box":{"x":117,"y":599,"width":741,"height":12}},{"id":"adc6db22-4674-4ec4-8978-4a759abd9dcc","block_type":"box","text":"risks as investing in other small capitalization companies. REITs may have limited financial resources","page_number":133,"box":{"x":117,"y":614,"width":749,"height":12}},{"id":"e9f72282-b6d4-4062-82ae-c0a2678119ca","block_type":"box","text":"and their securities may trade less frequently and in limited volume and may be subject to more abrupt","page_number":133,"box":{"x":116,"y":630,"width":758,"height":12}},{"id":"5179da0a-c71e-421a-aa5a-ccb9f851e3f3","block_type":"box","text":"or erratic price movements than larger company securities. Historically, small capitalization stocks, such","page_number":133,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"8b96893a-eee9-4425-8607-92c0a2cf3052","block_type":"box","text":"as REITs, have been more volatile in price than the larger capitalization stocks such as those included","page_number":133,"box":{"x":116,"y":661,"width":750,"height":12}},{"id":"248b2d1e-7920-4d8f-8fef-d4d5ede13f0d","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":133,"box":{"x":117,"y":676,"width":759,"height":12}},{"id":"33647d08-2599-41e9-b4dd-d549206d76a6","block_type":"box","text":"the operation of the business of the REIT and may be involved in real estate activities competitive with","page_number":133,"box":{"x":116,"y":692,"width":750,"height":12}},{"id":"d7f9c866-245e-449a-a22a-7ab4c7849a6c","block_type":"box","text":"the REIT. REITs may own properties through joint ventures or in other circumstances in which the REIT","page_number":133,"box":{"x":116,"y":707,"width":761,"height":12}},{"id":"816abe57-2441-463a-ad3f-66367b356085","block_type":"box","text":"may not have control over its investments. REITs may incur significant amounts of leverage.","page_number":133,"box":{"x":117,"y":723,"width":675,"height":12}},{"id":"87f11e38-885b-4210-a920-40431483b6c8","block_type":"box","text":"Market Risks/Recent Market Events.","page_number":133,"box":{"x":116,"y":754,"width":287,"height":9}},{"id":"f3a6ecca-050e-4bc3-b2b7-8943a14a19cf","block_type":"box","text":"Securities may decline in value due to factors affecting","page_number":133,"box":{"x":409,"y":754,"width":405,"height":12}},{"id":"fbb708e5-1f36-41b4-893d-65915202ab0a","block_type":"box","text":"securities markets generally or particular industries represented in the markets. The value of a security","page_number":133,"box":{"x":116,"y":769,"width":762,"height":12}},{"id":"ab591bd2-cde2-42b7-9a16-0df36a5f86a8","block_type":"box","text":"may decline due to general market conditions, economic trends or events that are not specifically","page_number":133,"box":{"x":117,"y":785,"width":720,"height":12}},{"id":"e4903819-ebef-4108-8fee-761c54c4a953","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":133,"box":{"x":117,"y":800,"width":748,"height":12}},{"id":"cf76ac9b-fd5f-4b88-b90e-71f6794afd73","block_type":"box","text":"particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of","page_number":133,"box":{"x":117,"y":816,"width":743,"height":12}},{"id":"4e5655c2-ae49-4cb0-afb0-e2ec90f94116","block_type":"box","text":"industries, sector or asset class. The success of a Fund’s activities could be affected by interest rates,","page_number":133,"box":{"x":117,"y":831,"width":761,"height":12}},{"id":"556d93a4-5758-48d6-9298-05fd8e76de84","block_type":"box","text":"availability of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, economic","page_number":133,"box":{"x":116,"y":847,"width":744,"height":12}},{"id":"8a8e0ea0-cee5-4241-9ff3-6578a9155e04","block_type":"box","text":"sanctions, currency exchange controls, and local, regional or global events such as war, acts of","page_number":133,"box":{"x":116,"y":862,"width":714,"height":12}},{"id":"c4e5adca-929a-401c-b533-d1f69cc08eab","block_type":"box","text":"terrorism, natural and environmental disasters, the spread of infectious illness or other public health","page_number":133,"box":{"x":116,"y":878,"width":744,"height":12}},{"id":"16f2d77c-77eb-41d9-805d-109a15871b34","block_type":"box","text":"II-85","page_number":133,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"8c85fb24-bda0-454b-a54f-8b77f70b1d7f","block_type":"box","text":"NM1026U-6033243-133/221","page_number":133,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"de2a0b24-7db4-4beb-a2df-6f4c2d35c0f7","block_type":"box","text":"issues, recessions, or other events could have a significant impact on a Fund and its investments.","page_number":134,"box":{"x":117,"y":87,"width":730,"height":12}},{"id":"2f6c6988-b36f-4714-9517-48834bf2d6f1","block_type":"box","text":"During a general economic downturn in the securities markets, multiple asset classes may be","page_number":134,"box":{"x":117,"y":103,"width":698,"height":12}},{"id":"64ba579f-9a39-48df-808d-766695fc5906","block_type":"box","text":"negatively affected. These factors may affect the level and volatility of securities prices and the liquidity","page_number":134,"box":{"x":117,"y":118,"width":768,"height":12}},{"id":"1e9b7a5a-fb40-4166-8c5c-c03e02523d8b","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":134,"box":{"x":116,"y":134,"width":734,"height":12}},{"id":"10f15bc9-4b90-4c75-9ec4-3160d3d25159","block_type":"box","text":"maintain substantial trading positions that can be adversely affected by the level of volatility in the","page_number":134,"box":{"x":117,"y":149,"width":728,"height":12}},{"id":"c262aeea-0990-4641-8b62-d0544c184052","block_type":"box","text":"financial markets; the larger the positions, the greater the potential for loss. Unpredictable or unstable","page_number":134,"box":{"x":116,"y":165,"width":758,"height":12}},{"id":"4c1b4264-5c14-4d6b-9af5-cd08fcbd58b6","block_type":"box","text":"market conditions may result in reduced opportunities to find suitable investments to deploy capital or","page_number":134,"box":{"x":117,"y":180,"width":756,"height":12}},{"id":"5b53a9da-3377-4d32-9198-6663392dca34","block_type":"box","text":"make it more difficult to exit and realize value","page_number":134,"box":{"x":117,"y":196,"width":339,"height":9}},{"id":"e01685dd-3994-450f-839f-e16c23b339f5","block_type":"box","text":"from a Fund’s existing investments. It is important to","page_number":134,"box":{"x":456,"y":196,"width":394,"height":12}},{"id":"130165ea-cc8a-4873-9dd9-8c26769629bc","block_type":"box","text":"understand that a Fund can incur material losses even if it reacts quickly to difficult market conditions","page_number":134,"box":{"x":117,"y":211,"width":754,"height":12}},{"id":"82c5f805-d653-4cec-a1cc-586c49a0ef64","block_type":"box","text":"and there can be no assurance that a Fund will not suffer material adverse effects from broad and","page_number":134,"box":{"x":116,"y":227,"width":732,"height":9}},{"id":"f9b910a3-0f89-46bc-97a6-ef0bcfb8daf5","block_type":"box","text":"rapid changes in market conditions.","page_number":134,"box":{"x":117,"y":242,"width":268,"height":12}},{"id":"7088a670-0ff0-4191-9fa2-b603153d5d31","block_type":"box","text":"Periods of unusually high volatility in the financial","page_number":134,"box":{"x":117,"y":273,"width":359,"height":12}},{"id":"9db8113c-e40e-4770-b659-4ff82978548f","block_type":"box","text":"markets and restrictive credit conditions, sometimes","page_number":134,"box":{"x":477,"y":273,"width":381,"height":11}},{"id":"a24456b5-901c-4e80-869a-285daf75c64b","block_type":"box","text":"limited to a particular sector or a geography, can o","page_number":134,"box":{"x":117,"y":289,"width":364,"height":12}},{"id":"82a6d83d-3413-4457-aa5b-591ab1e7d5b6","block_type":"box","text":"ccur. Some countries, including the United States,","page_number":134,"box":{"x":482,"y":289,"width":368,"height":12}},{"id":"126e0245-b393-436c-bfaa-82ed71f09a49","block_type":"box","text":"have adopted and/or are considering the adoption of more","page_number":134,"box":{"x":117,"y":304,"width":422,"height":12}},{"id":"58864518-1788-4624-a85d-70109ccb943a","block_type":"box","text":"protectionist trade policies, a move away from","page_number":134,"box":{"x":539,"y":304,"width":344,"height":12}},{"id":"675123b5-d7d3-4e33-9bf1-0f624df78678","block_type":"box","text":"the tighter financial industry regulations that follow","page_number":134,"box":{"x":116,"y":320,"width":363,"height":12}},{"id":"8b7e3638-0a1b-4ed2-9206-249964a09629","block_type":"box","text":"ed the financial crisis of","page_number":134,"box":{"x":480,"y":320,"width":174,"height":9}},{"id":"54138304-a470-4c11-8263-cd0d8e8522fa","block_type":"box","text":"2008, and/or substantially","page_number":134,"box":{"x":654,"y":320,"width":192,"height":12}},{"id":"0beb66ad-47dc-4577-beab-6660af8b0f8f","block_type":"box","text":"reducing corporate taxes. The exact shape of these","page_number":134,"box":{"x":117,"y":335,"width":379,"height":12}},{"id":"f4cd9833-ebc6-41da-8b90-9ec7199b6a36","block_type":"box","text":"policies is still being considered, but the equity and","page_number":134,"box":{"x":497,"y":335,"width":372,"height":12}},{"id":"619c8367-7f51-4eca-a695-586f7ea2c7fd","block_type":"box","text":"debt markets may react strongly to expectations of c","page_number":134,"box":{"x":116,"y":351,"width":381,"height":12}},{"id":"071df698-7237-4407-800e-95109b8871aa","block_type":"box","text":"hange, which could increase volatility, especially if","page_number":134,"box":{"x":498,"y":351,"width":367,"height":12}},{"id":"a2880a17-c874-470c-a8f6-3cd7eb5fddae","block_type":"box","text":"the market’s expectations are not borne out. A rise in","page_number":134,"box":{"x":116,"y":366,"width":384,"height":12}},{"id":"fca5179c-2072-45f4-b736-bd61f114160e","block_type":"box","text":"protectionist trade policies, and the possibility of","page_number":134,"box":{"x":501,"y":366,"width":357,"height":12}},{"id":"8a5f16e0-0815-4909-bfe7-972baa31f3a0","block_type":"box","text":"changes to some international trade agreements, coul","page_number":134,"box":{"x":116,"y":382,"width":392,"height":12}},{"id":"0c53e175-7b77-4663-8731-1659920ccae7","block_type":"box","text":"d affect the economies of many nations in ways","page_number":134,"box":{"x":509,"y":382,"width":350,"height":12}},{"id":"b44ca7f1-9d9e-416d-bbf8-5438f4d25112","block_type":"box","text":"that cannot necessarily be foreseen at the present","page_number":134,"box":{"x":116,"y":397,"width":370,"height":12}},{"id":"858d1373-72ed-47de-b0ce-bdc80a80dce1","block_type":"box","text":"time. In addition, geopolitical and other risks, including","page_number":134,"box":{"x":486,"y":397,"width":398,"height":12}},{"id":"ccb912a9-5cc0-46d6-bd01-7f831355d43d","block_type":"box","text":"environmental and public health, may add to instability in world economies and markets generally.","page_number":134,"box":{"x":116,"y":413,"width":716,"height":12}},{"id":"c7b82642-331d-404d-84f7-85fc11c7baa1","block_type":"box","text":"Economies and financial markets throughout the world","page_number":134,"box":{"x":117,"y":428,"width":400,"height":12}},{"id":"92946425-eceb-4b6b-87c0-03cb85e059cc","block_type":"box","text":"are increasingly interconnected. As a result,","page_number":134,"box":{"x":517,"y":428,"width":323,"height":12}},{"id":"41108f82-02c4-4dea-aec8-623263bb786b","block_type":"box","text":"whether or not a Fund invests in securities of issuers","page_number":134,"box":{"x":116,"y":444,"width":388,"height":9}},{"id":"3a4a52a4-66ea-431b-b562-68732a495fc4","block_type":"box","text":"located in or with significant exposure to countries","page_number":134,"box":{"x":504,"y":444,"width":367,"height":12}},{"id":"6e4d113f-b449-4185-9270-c1366c5a6896","block_type":"box","text":"experiencing economic, political and/or financial di","page_number":134,"box":{"x":116,"y":459,"width":364,"height":12}},{"id":"1eb37a72-e359-41c1-a9c8-d2358c0383e8","block_type":"box","text":"fficulties, the value and liquidity of the Fund’s","page_number":134,"box":{"x":481,"y":459,"width":330,"height":12}},{"id":"d7de373f-7fda-437f-8a29-8feefd795624","block_type":"box","text":"investments may be negatively affected by such events.","page_number":134,"box":{"x":117,"y":475,"width":411,"height":12}},{"id":"d89e7f46-6b2f-4d5e-97ad-e2ddc3331e61","block_type":"box","text":"Governments and regulators may take actions that affect the regulation of the Fund or the instruments","page_number":134,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"8d99cc6f-e209-4304-915f-afcc8876e7fc","block_type":"box","text":"in which the Fund invests, or the issuers of such instruments, in ways that are unforeseeable. Future","page_number":134,"box":{"x":117,"y":521,"width":742,"height":12}},{"id":"353b259f-9e8b-4d52-851f-19ef56b54156","block_type":"box","text":"legislation or regulation or other governmental actions could limit or preclude the Fund’s abilities to","page_number":134,"box":{"x":117,"y":537,"width":727,"height":12}},{"id":"01d0e7f4-a933-48b0-8e79-12c71fd05b4d","block_type":"box","text":"achieve its investment objectives or otherwise adversely impact an investment in the Fund. Recent","page_number":134,"box":{"x":116,"y":552,"width":730,"height":12}},{"id":"87ae195c-9985-4325-b2ec-30bbeced4b0f","block_type":"box","text":"policy initiatives undertaken by the U.S. government have the potential to impact international relations,","page_number":134,"box":{"x":117,"y":568,"width":763,"height":12}},{"id":"973b6b1c-94e2-49c7-9722-bd6ed4744af2","block_type":"box","text":"trade agreements and the overall regulatory environment in ways that could create uncertainty and","page_number":134,"box":{"x":116,"y":583,"width":730,"height":12}},{"id":"c44bd7a5-2f43-4d43-9753-12bd2705a7ba","block_type":"box","text":"instability in domestic and global markets, and could adversely affect the investment performance of the","page_number":134,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"c16a9c55-14f7-4e91-a5a6-a9bfd9906151","block_type":"box","text":"Fund. In particular, actions taken by the U.S. government in respect of international trade relations could","page_number":134,"box":{"x":117,"y":614,"width":770,"height":12}},{"id":"1bb0e733-5ec5-44aa-a3e8-01511ef1f008","block_type":"box","text":"lead to trade wars, increased costs for imported goods, disruptions in supply chains, reduced foreign","page_number":134,"box":{"x":117,"y":630,"width":742,"height":12}},{"id":"b0f21771-ac30-4921-8e17-282bdd71be99","block_type":"box","text":"investment, and instability in regions where the Fund invests. Political and diplomatic events within the","page_number":134,"box":{"x":117,"y":645,"width":755,"height":12}},{"id":"3877e995-ec93-4f5c-818a-8ccbbe3597f6","block_type":"box","text":"United States, including a contentious domestic political environment, changes in political party control","page_number":134,"box":{"x":117,"y":661,"width":750,"height":12}},{"id":"479080ea-f058-4635-94b0-d556327122c6","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":134,"box":{"x":116,"y":676,"width":764,"height":12}},{"id":"3bc26f50-19e5-4cc0-9de4-83791b7d8555","block_type":"box","text":"long-term budget and deficit reduction plan, the threat of a U.S. Government shutdown, and","page_number":134,"box":{"x":117,"y":692,"width":672,"height":12}},{"id":"83e7badb-0a4b-455e-8ec7-cf4023f4d955","block_type":"box","text":"disagreements over, or threats not to increase, the U.S. Government’s borrowing limit (or “debt ceiling”),","page_number":134,"box":{"x":116,"y":707,"width":763,"height":12}},{"id":"e8f94115-1e86-4640-9a61-2fd19eb96890","block_type":"box","text":"as well as political and diplomatic events abroad, may affect investor and consumer confidence and","page_number":134,"box":{"x":116,"y":723,"width":731,"height":12}},{"id":"a3a5d982-124e-4a0c-96f1-2d8ffbb88e77","block_type":"box","text":"may adversely impact financial markets and the broader economy, perhaps suddenly and to a","page_number":134,"box":{"x":117,"y":738,"width":689,"height":12}},{"id":"0c8919f2-7931-4604-ac64-8cbf9599f4c9","block_type":"box","text":"significant degree. A downgrade of the ratings of U.S. Government debt obligations, or concerns about","page_number":134,"box":{"x":116,"y":754,"width":754,"height":12}},{"id":"e202ff9d-ac44-4cd3-823f-3aaa5f232fbf","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":134,"box":{"x":116,"y":769,"width":764,"height":12}},{"id":"4bf3c40d-e935-4c9c-89a3-d8a923c29281","block_type":"box","text":"global economies. For example, concerns about the U.S. Government’s credit quality may cause","page_number":134,"box":{"x":116,"y":785,"width":710,"height":12}},{"id":"aec28beb-dd95-4f8e-a563-bd76e0b6002c","block_type":"box","text":"increased volatility in the stock and bond markets, higher interest rates, reduced prices and liquidity of","page_number":134,"box":{"x":117,"y":800,"width":748,"height":12}},{"id":"72ff3e53-04d5-41d2-a97e-a48459aa806a","block_type":"box","text":"U.S. Treasury securities, and/or increased costs of various kinds of debt. Moreover, although the U.S.","page_number":134,"box":{"x":117,"y":816,"width":745,"height":12}},{"id":"012488fe-5439-4650-9496-2bc57426100b","block_type":"box","text":"Government has honored its credit obligations, there remains a possibility that the United States could","page_number":134,"box":{"x":117,"y":831,"width":754,"height":12}},{"id":"a9327e19-9f44-4147-95cc-795c597d8d00","block_type":"box","text":"default on its obligations. The consequences of such an unprecedented event are impossible to predict,","page_number":134,"box":{"x":116,"y":847,"width":765,"height":12}},{"id":"19888a6a-acde-4eca-a3d9-5cfb5fef324c","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":134,"box":{"x":117,"y":862,"width":714,"height":12}},{"id":"bf7a2ea1-f100-4084-8c3b-40c904c27565","block_type":"box","text":"securities markets and could significantly impair the value of the Fund’s investments.","page_number":134,"box":{"x":116,"y":878,"width":627,"height":12}},{"id":"17b032c0-44d0-4327-8bd4-3eb62283a549","block_type":"box","text":"II-86","page_number":134,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"17f832a7-52df-4e7b-a4f3-591f529846c3","block_type":"box","text":"NM1026U-6033243-134/221","page_number":134,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"13d07930-0d3f-43c3-aca2-40472cc20314","block_type":"box","text":"The COVID-19 pandemic resulted in significant market volatility, exchange suspensions and closures,","page_number":135,"box":{"x":116,"y":87,"width":761,"height":12}},{"id":"62321e67-dadf-43c4-9c4e-f03dbde903d1","block_type":"box","text":"declines in global financial markets, higher default rates, supply chain disruptions, and a substantial","page_number":135,"box":{"x":116,"y":102,"width":743,"height":13}},{"id":"f0d71311-72bb-4aaf-9f8d-34e3de0fca90","block_type":"box","text":"economic downturn in economies throughout the world. The impact of this coronavirus, and other","page_number":135,"box":{"x":116,"y":118,"width":727,"height":12}},{"id":"88e16250-da38-4c58-af2a-b4db05c70209","block_type":"box","text":"epidemics and pandemics that may arise in the future, could affect the economies of many nations,","page_number":135,"box":{"x":116,"y":134,"width":741,"height":12}},{"id":"d7253212-069d-4b51-ac82-de926066e1ca","block_type":"box","text":"individual companies and the market in general in ways that cannot necessarily be foreseen at the","page_number":135,"box":{"x":117,"y":149,"width":733,"height":12}},{"id":"c90d3e05-f25c-4e15-8a92-af389ef8ad46","block_type":"box","text":"present time. These health crises may be short term or long term, and may exacerbate other pre","page_number":135,"box":{"x":117,"y":165,"width":721,"height":12}},{"id":"8219d285-7ae8-4fb3-a49a-daf6f89cb542","block_type":"box","text":"existing political, social and economic risks, disrupt normal market conditions and operations, and","page_number":135,"box":{"x":116,"y":180,"width":729,"height":12}},{"id":"1179929d-ef4f-457d-a3c0-a47f7a6e7330","block_type":"box","text":"negatively impact performance. In addition, the impact of infectious diseases in emerging developing or","page_number":135,"box":{"x":117,"y":196,"width":771,"height":12}},{"id":"57071f5f-70a2-44a6-961e-1b78a094edfc","block_type":"box","text":"emerging market countries may be greater due to less established health care systems.","page_number":135,"box":{"x":116,"y":211,"width":657,"height":12}},{"id":"379f37dc-c5ce-48d5-95b6-7e335ec3a03c","block_type":"box","text":"Legal and Regulatory Risks.","page_number":135,"box":{"x":116,"y":242,"width":208,"height":12}},{"id":"5b978345-eefb-4154-9d67-b9f3bb6ae6ec","block_type":"box","text":"The Manager is part of a larger firm with multiple business lines active in","page_number":135,"box":{"x":326,"y":242,"width":547,"height":12}},{"id":"0d316eec-da7d-450f-bbc5-3d564d6ec865","block_type":"box","text":"multiple jurisdictions that are governed by a multitude of legal systems and regulatory regimes, some","page_number":135,"box":{"x":117,"y":258,"width":753,"height":12}},{"id":"3bb12ed4-956f-48a2-953b-502943e45571","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":135,"box":{"x":116,"y":273,"width":761,"height":12}},{"id":"96ba3544-f2ab-48bb-97ec-37b4117be910","block_type":"box","text":"extensive and sophisticated legal, tax and regulatory risks, including changing laws and regulations,","page_number":135,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"7eea130f-26c2-4ca5-b170-36f0e018560f","block_type":"box","text":"developing interpretations of such laws and regulations, as well as existing laws, and increased","page_number":135,"box":{"x":116,"y":304,"width":712,"height":12}},{"id":"422f2d84-e8df-48ad-92f0-28884625ee37","block_type":"box","text":"scrutiny by regulators and law enforcement authorities. Unexpected economic, political, regulatory and","page_number":135,"box":{"x":116,"y":320,"width":766,"height":12}},{"id":"46d70ebf-c221-4611-bc07-eb379ac01a88","block_type":"box","text":"diplomatic events within the United States and abroad can trigger new and complex regulations that","page_number":135,"box":{"x":116,"y":335,"width":745,"height":12}},{"id":"28692bc0-f3e4-4d39-b85f-9b63c6917852","block_type":"box","text":"the Manager and/or the Funds may need to comply with. The implementation of changes to comply","page_number":135,"box":{"x":116,"y":351,"width":742,"height":12}},{"id":"622bab0b-4b14-4477-b5ae-a818345f95ee","block_type":"box","text":"with current and/or new regulations applicable to the Funds and/or the Manager could have a material","page_number":135,"box":{"x":116,"y":366,"width":761,"height":12}},{"id":"74c3cd59-1709-4be6-95cb-c5c8f0670328","block_type":"box","text":"adverse effect on the Funds (including by imposing material costs on the Funds, reducing profit","page_number":135,"box":{"x":116,"y":382,"width":712,"height":12}},{"id":"5b955781-d611-417e-9e27-1ed5fb06dd09","block_type":"box","text":"margins, reducing investment opportunities or by otherwise restricting the Funds and/or the Manager).","page_number":135,"box":{"x":117,"y":397,"width":762,"height":12}},{"id":"32703457-f29f-4ca1-bdad-0b6915a77d1d","block_type":"box","text":"Tariff and Trade Policy Risks","page_number":135,"box":{"x":118,"y":428,"width":213,"height":12}},{"id":"07854262-5db5-404a-ac5c-bec0e6f8d8fc","block_type":"box","text":".","page_number":135,"box":{"x":331,"y":436,"width":9,"height":1}},{"id":"0a931b89-6f8d-4dc3-9b28-18891ad783a5","block_type":"box","text":"Some countries, including the U.S., have adopted more protectionist","page_number":135,"box":{"x":341,"y":428,"width":512,"height":12}},{"id":"5b993fc9-91ff-4e5c-8229-ef675bd56452","block_type":"box","text":"trade policies. The U.S. government recently altered its approach to international trade policy, resulting","page_number":135,"box":{"x":116,"y":444,"width":768,"height":12}},{"id":"ec61236d-e2fe-4b8f-a0b1-f9e5ebe537f1","block_type":"box","text":"in significant impacts on international trade relations, certain tax and immigration policies, and other","page_number":135,"box":{"x":117,"y":459,"width":742,"height":12}},{"id":"b90307be-b2a4-4c82-a660-f87cf4b5df5d","block_type":"box","text":"aspects of the national and international political and financial landscape. The rise in protectionist trade","page_number":135,"box":{"x":116,"y":475,"width":769,"height":12}},{"id":"03a34652-2737-45cf-a62d-55ee83ff60a6","block_type":"box","text":"policies, slowing economic growth, changes to some major international trade agreements, risks","page_number":135,"box":{"x":117,"y":490,"width":718,"height":12}},{"id":"6e45ae2a-a639-4526-93e0-e4e106f6092a","block_type":"box","text":"associated with trade agreements between the U.S. and the European Union, and the risks associated","page_number":135,"box":{"x":116,"y":506,"width":767,"height":12}},{"id":"4d5cb8bc-e1b9-4d52-94d9-98f6004f5af5","block_type":"box","text":"with trade negotiations between the U.S. and China, could affect the economies of many nations in","page_number":135,"box":{"x":116,"y":521,"width":739,"height":12}},{"id":"099265fe-1499-4c5d-9519-9a2dae1a903b","block_type":"box","text":"ways that cannot necessarily be foreseen at the present time.","page_number":135,"box":{"x":116,"y":537,"width":462,"height":12}},{"id":"880795b5-d2c5-4ebe-a6af-2b2e2042a007","block_type":"box","text":"Global trade disruption, significant introductions of trade barriers, and bilateral trade frictions, together","page_number":135,"box":{"x":117,"y":568,"width":759,"height":12}},{"id":"cef45381-67fe-4597-8f74-90df1205ee78","block_type":"box","text":"with any future downturns in the global economy resulting therefrom, could adversely affect the","page_number":135,"box":{"x":116,"y":583,"width":710,"height":12}},{"id":"99526e01-4235-43e7-97bf-ebd42daff48f","block_type":"box","text":"financial performance of a Fund and its investments. Trade policy may be an ongoing source of","page_number":135,"box":{"x":116,"y":599,"width":713,"height":12}},{"id":"d9384a05-5779-407a-aa9e-f28d68644acd","block_type":"box","text":"instability, potentially resulting in significant currency fluctuations and/or having other adverse effects","page_number":135,"box":{"x":117,"y":614,"width":751,"height":12}},{"id":"7c9b6aad-2486-40dc-9f0b-2d7e0b61564b","block_type":"box","text":"on international markets, international trade agreements, and/or other existing cross-border","page_number":135,"box":{"x":116,"y":630,"width":683,"height":12}},{"id":"e9f4d1a1-6d89-4da0-adb0-944700d841e6","block_type":"box","text":"cooperation arrangements (whether economic, tax, fiscal, legal, regulatory, or otherwise). To the extent","page_number":135,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"a7f8fbcd-6418-498e-b28a-cb986b28dff9","block_type":"box","text":"trade disputes escalate globally, there could be additional significant impacts on the sectors or","page_number":135,"box":{"x":116,"y":661,"width":700,"height":12}},{"id":"c4b69a52-445e-4944-9126-ce3ff6860896","block_type":"box","text":"industries in which a Fund invests and other adverse impacts on a Fund’s overall performance.","page_number":135,"box":{"x":117,"y":676,"width":703,"height":12}},{"id":"63df1032-50f0-4896-87aa-20c6492511e7","block_type":"box","text":"Geographic Risks","page_number":135,"box":{"x":117,"y":707,"width":131,"height":12}},{"id":"787cfb92-83e7-4a33-b142-98032d9df5ee","block_type":"box","text":". Some of the companies in which the Fund invests may be located in, or otherwise","page_number":135,"box":{"x":250,"y":707,"width":616,"height":12}},{"id":"d804e6bd-5486-4393-b8da-a266751f7097","block_type":"box","text":"connected to, parts of the world affected by natural disasters such as severe heat, earthquakes,","page_number":135,"box":{"x":116,"y":723,"width":711,"height":12}},{"id":"d870697b-037e-4494-bf5e-8cfa5eee095e","block_type":"box","text":"tornadoes, volcanic eruptions, wildfires, droughts, floods, hurricanes or tsunamis, and are economically","page_number":135,"box":{"x":116,"y":738,"width":766,"height":12}},{"id":"5e30c920-1613-4313-ab2f-a640a751e3cf","block_type":"box","text":"sensitive to environmental events. In addition, issuers may be impacted by security concerns with","page_number":135,"box":{"x":116,"y":754,"width":723,"height":12}},{"id":"48969dec-77d6-41a2-9e7c-20fe5415f8e7","block_type":"box","text":"respect to a country or region, such as war and other types of conflict, terrorism, strained international","page_number":135,"box":{"x":117,"y":769,"width":754,"height":12}},{"id":"36744942-cd5d-4b5c-bb8e-4e0a2db26b3e","block_type":"box","text":"relations and territorial disputes. Any of these events may adversely affect the issuers, markets and","page_number":135,"box":{"x":117,"y":785,"width":736,"height":12}},{"id":"13c228db-e02d-45b5-806e-60ba63a2e8cc","block_type":"box","text":"economies to which a Fund is exposed, which may adversely affect the value of the Fund.","page_number":135,"box":{"x":116,"y":800,"width":667,"height":12}},{"id":"257c2faf-8738-41f5-bcba-a7c85bcc0564","block_type":"box","text":"Reference Rate Replacement Risk.","page_number":135,"box":{"x":116,"y":831,"width":275,"height":12}},{"id":"5a58f26e-6b56-4265-8982-89cc0671e863","block_type":"box","text":"The London Interbank Offered Rate (“LIBOR”) had historically","page_number":135,"box":{"x":393,"y":831,"width":469,"height":12}},{"id":"d8d6a95a-742f-4154-bab7-53689681f044","block_type":"box","text":"been used extensively in the U.S. and globally as a “benchmark” or “reference rate” for various","page_number":135,"box":{"x":117,"y":847,"width":707,"height":12}},{"id":"51043ee5-f749-482c-a98a-b43b2fcf2216","block_type":"box","text":"commercial and financial contracts, including corporate and municipal bonds, bank loans, asset","page_number":135,"box":{"x":116,"y":862,"width":714,"height":12}},{"id":"7ed790e8-99a9-4347-9fef-a1742aff31a2","block_type":"box","text":"backed and mortgage-related securities, interest rate swaps and other derivatives. Instruments in","page_number":135,"box":{"x":117,"y":878,"width":726,"height":12}},{"id":"62ba269e-dc9e-4d3a-b169-ef83d5ea3b52","block_type":"box","text":"II-87","page_number":135,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9dfd6a93-1284-455a-b94c-bdbce7227a51","block_type":"box","text":"NM1026U-6033243-135/221","page_number":135,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"1ed4a82c-f57c-4b59-988e-68e6f9638404","block_type":"box","text":"which a Fund may have historically paid interest at floating rates based on LIBOR or may have been","page_number":136,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"707dfb8a-e845-40cd-bf8c-3e80302faa88","block_type":"box","text":"subject to interest caps or floors based on LIBOR. The Funds and issuers of instruments in which a","page_number":136,"box":{"x":116,"y":102,"width":742,"height":13}},{"id":"a1f5875e-fa16-4d19-9ddb-a1c23b6e8bfe","block_type":"box","text":"Fund invests may have also historically obtained financing at floating rates based on LIBOR. In","page_number":136,"box":{"x":117,"y":118,"width":709,"height":12}},{"id":"348b87fa-bb76-48fd-b799-88f40fcabb12","block_type":"box","text":"connection with the global transition away from LIBOR led by regulators and market participants as a","page_number":136,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"2f42ea3f-3fe2-44b4-818c-15f381b88b63","block_type":"box","text":"result of benchmark reforms, LIBOR was last published on a representative basis at the end of June","page_number":136,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"f202166f-5850-4c3c-a2de-648f27dfa7ef","block_type":"box","text":"2023. Alternative reference rates to LIBOR have been established in most major currencies and","page_number":136,"box":{"x":116,"y":165,"width":717,"height":12}},{"id":"3b667cb8-928e-4c0a-9bdd-f74d1518a9aa","block_type":"box","text":"markets in these alternative rates are continuing to develop (","page_number":136,"box":{"x":117,"y":180,"width":449,"height":12}},{"id":"7872ad27-d6d3-4d4f-bb43-3cadf864c056","block_type":"box","text":"e.g.","page_number":136,"box":{"x":568,"y":183,"width":25,"height":9}},{"id":"72480505-2d52-4635-a1d9-899144896a38","block_type":"box","text":", the Secured Overnight Financing","page_number":136,"box":{"x":596,"y":180,"width":259,"height":12}},{"id":"8a6f6d54-dc97-4712-b06a-28f26f614f6e","block_type":"box","text":"Rate (“SOFR”) for USD-LIBOR). While the transition from LIBOR has gone relatively smoothly, residual","page_number":136,"box":{"x":117,"y":196,"width":771,"height":12}},{"id":"714011ad-a08b-48c0-bf2a-5caf8c60cf98","block_type":"box","text":"risks associated with the transition may remain that may impact markets or particular investments and,","page_number":136,"box":{"x":117,"y":211,"width":765,"height":12}},{"id":"c7f09d74-90bf-40ee-b2ea-c748e5551779","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":136,"box":{"x":116,"y":227,"width":749,"height":11}},{"id":"ee3ba8d6-179c-45df-b173-e3a330d9d3b7","block_type":"box","text":"invest cannot yet be fully determined.","page_number":136,"box":{"x":117,"y":242,"width":281,"height":12}},{"id":"82c4d73e-5eff-4272-a02b-71f11196278d","block_type":"box","text":"SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that","page_number":136,"box":{"x":116,"y":273,"width":757,"height":12}},{"id":"aa814b07-35ff-4954-b00a-edb127deb3f2","block_type":"box","text":"are collateralized by U.S. Treasury securities . SOFR is calculated based on transaction-level repo","page_number":136,"box":{"x":116,"y":289,"width":736,"height":12}},{"id":"73517c9b-8abf-46a7-914f-f1e1f5638f70","block_type":"box","text":"data collected from various sources. For each trading day, SOFR is calculated as a volume-weighted","page_number":136,"box":{"x":116,"y":304,"width":755,"height":12}},{"id":"8f64d9d6-6b20-44b0-8c96-b56576960b13","block_type":"box","text":"median rate derived from such data. Because SOFR is a financing rate based on overnight secured","page_number":136,"box":{"x":117,"y":320,"width":744,"height":12}},{"id":"98f90e5b-f109-422d-b844-1bb13e3965e2","block_type":"box","text":"funding transactions, it differs fundamentally from LIBOR. LIBOR is intended to be an unsecured rate","page_number":136,"box":{"x":116,"y":335,"width":755,"height":12}},{"id":"bb32b773-0bb8-419a-9dc2-fbc212c1c4cd","block_type":"box","text":"that represents interbank funding costs for different short-term maturities or tenors. It is a forward","page_number":136,"box":{"x":116,"y":351,"width":726,"height":12}},{"id":"1a4aaf91-7476-4bc6-ab64-e9d98b9d41b5","block_type":"box","text":"looking rate reflecting expectations regarding interest rates for the applicable tenor. Thus, LIBOR is","page_number":136,"box":{"x":117,"y":366,"width":740,"height":12}},{"id":"be8e7909-4bd3-46ac-86bf-55ac16305115","block_type":"box","text":"intended to be sensitive, in certain respects, to bank credit risk and to term interest rate risk. In","page_number":136,"box":{"x":117,"y":382,"width":706,"height":12}},{"id":"94df5127-3cf8-48d8-ad09-dfc8b1440f7f","block_type":"box","text":"contrast, SOFR is a secured overnight rate reflecting the credit of U.S. Treasury securities as","page_number":136,"box":{"x":116,"y":397,"width":696,"height":12}},{"id":"47b41aea-4df8-4942-acf5-d5b440ecd9e9","block_type":"box","text":"collateral. Thus, it is largely insensitive to credit-risk considerations and to short-term interest rate risks.","page_number":136,"box":{"x":116,"y":413,"width":771,"height":12}},{"id":"af4d719c-a5c8-4e0e-b9d4-d7e7288e2ea3","block_type":"box","text":"SOFR is a transaction-based rate, and it has been more volatile than other benchmark or market rates,","page_number":136,"box":{"x":116,"y":428,"width":770,"height":11}},{"id":"a544d568-c268-4eb0-83b8-3041ac3cb46b","block_type":"box","text":"such as three-month LIBOR, during certain periods. For these reasons, among others, there is no","page_number":136,"box":{"x":116,"y":444,"width":730,"height":12}},{"id":"5fae5a14-e4a2-4908-aa4c-d3ddd80191b8","block_type":"box","text":"assurance that SOFR, or rates derived from SOFR, will perform in the same or similar way as LIBOR","page_number":136,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"c3812533-d6c4-4ea9-8f5b-e2918ec931bf","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":136,"box":{"x":116,"y":475,"width":767,"height":12}},{"id":"7f0a26a0-e874-4185-956a-297c9ed07c12","block_type":"box","text":"substitute for LIBOR. SOFR has a relatively limited history, having been first published in April 2018.","page_number":136,"box":{"x":116,"y":490,"width":749,"height":12}},{"id":"9114a0ea-b5ae-4772-87a2-7bb438123188","block_type":"box","text":"The future performance of SOFR, and SOFR-based reference rates, cannot be predicted based on","page_number":136,"box":{"x":116,"y":506,"width":740,"height":12}},{"id":"f92eecf3-8ce9-411d-9c4e-d99b2185c9aa","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":136,"box":{"x":116,"y":521,"width":738,"height":12}},{"id":"0ca3efca-3f5d-40c8-b2e0-5cf9fc005235","block_type":"box","text":"levels of SOFR, LIBOR or other rates. There can also be no assurance that SOFR will not be","page_number":136,"box":{"x":117,"y":537,"width":695,"height":11}},{"id":"74ae6ef4-9a61-4f39-83ca-3b3ab023155f","block_type":"box","text":"discontinued or fundamentally altered in a manner that is materially adverse to the interests of the","page_number":136,"box":{"x":116,"y":552,"width":731,"height":12}},{"id":"d9eb4d85-59f9-44fe-9fbe-870279b5e79a","block_type":"box","text":"Fund.","page_number":136,"box":{"x":117,"y":568,"width":46,"height":9}},{"id":"e027caf5-bb91-4f8d-a391-f0b16806ee5d","block_type":"box","text":"In addition, interest rates or other types of rates and indices which are classified as “benchmarks” have","page_number":136,"box":{"x":117,"y":599,"width":768,"height":12}},{"id":"d595e4bf-3bc8-43c3-82b0-3e734ac9c0d2","block_type":"box","text":"been the subject of ongoing national and international regulatory reform, including under the European","page_number":136,"box":{"x":117,"y":614,"width":765,"height":12}},{"id":"04746d65-aecf-4fb2-8df6-60a0caeeca96","block_type":"box","text":"Union (“EU”) regulation on indices used as benchmarks in financial instruments and financial contracts","page_number":136,"box":{"x":117,"y":630,"width":765,"height":12}},{"id":"71ee71da-3616-4519-ac61-476444d1cdf7","block_type":"box","text":"(known as the “Benchmarks Regulation”). The Benchmarks Regulation has been enacted into United","page_number":136,"box":{"x":117,"y":645,"width":754,"height":12}},{"id":"8a6c893b-e39c-4e45-ba43-d0c2db07e743","block_type":"box","text":"Kingdom (“UK”) law by virtue of the EU (Withdrawal) Act 2018 (as amended), subject to amendments","page_number":136,"box":{"x":117,"y":661,"width":750,"height":12}},{"id":"7ab31c4d-9fea-443d-adff-884945e11d90","block_type":"box","text":"made by the Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (SI","page_number":136,"box":{"x":117,"y":676,"width":727,"height":12}},{"id":"000ba52f-32ad-4680-9c38-dceba41bbac9","block_type":"box","text":"2019/657) and other statutory instruments. Following the implementation of these reforms, the manner","page_number":136,"box":{"x":116,"y":692,"width":761,"height":12}},{"id":"957b2a15-b8af-486b-b9c4-a419102717e7","block_type":"box","text":"of administration of benchmarks has changed and may further change in the future, with the result that","page_number":136,"box":{"x":116,"y":707,"width":762,"height":12}},{"id":"24f04399-eceb-4c9c-ad76-c3a48963bab4","block_type":"box","text":"relevant benchmarks may perform differently than in the past, the use of benchmarks that are not","page_number":136,"box":{"x":117,"y":723,"width":721,"height":12}},{"id":"ce2f1ada-1dbf-463e-b9b1-af0860b31891","block_type":"box","text":"compliant with the new standards by certain supervised entities may be restricted, and certain","page_number":136,"box":{"x":116,"y":738,"width":696,"height":12}},{"id":"8b502931-a0d1-45ec-80ba-1a7484c7e392","block_type":"box","text":"benchmarks may be eliminated entirely. Such changes could cause increased market volatility and","page_number":136,"box":{"x":117,"y":754,"width":731,"height":12}},{"id":"5b30950a-1dc3-4f2a-a5fd-946f3c85d972","block_type":"box","text":"disruptions in liquidity for instruments that rely on or are impacted by such benchmarks. Additionally,","page_number":136,"box":{"x":116,"y":769,"width":743,"height":12}},{"id":"af8326a3-02c8-4c9c-9739-5d6878a4c1eb","block_type":"box","text":"there could be other consequences which cannot be predicted.","page_number":136,"box":{"x":116,"y":785,"width":466,"height":12}},{"id":"41d2cb14-4b6e-4c50-b4ec-a0a35ceb5776","block_type":"box","text":"Repurchase Agreements and Purchase and Sale Contracts.","page_number":136,"box":{"x":116,"y":816,"width":473,"height":12}},{"id":"17bec597-5c73-4154-b2c7-2682fc1680e8","block_type":"box","text":"Under repurchase agreements and","page_number":136,"box":{"x":597,"y":816,"width":258,"height":12}},{"id":"f4744fbb-d122-4ad5-b791-bf1e8035e10b","block_type":"box","text":"purchase and sale contracts, the other party agrees, upon entering into the contract with a Fund, to","page_number":136,"box":{"x":117,"y":831,"width":740,"height":12}},{"id":"b7aaf5ac-433d-45c2-8ce0-1a2e4b302c1a","block_type":"box","text":"repurchase a security sold to the Fund at a mutually agreed-upon time and price in a specified","page_number":136,"box":{"x":117,"y":847,"width":703,"height":12}},{"id":"8657d3f7-c0fb-4b4e-8c7b-f0674a8c8542","block_type":"box","text":"currency, thereby determining the yield during the term of the agreement.","page_number":136,"box":{"x":116,"y":862,"width":549,"height":12}},{"id":"ebd602e0-44b4-4c24-a761-198b76794b4e","block_type":"box","text":"II-88","page_number":136,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6ee15add-94ef-4db1-ac4f-a434a2df89e1","block_type":"box","text":"NM1026U-6033243-136/221","page_number":136,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"c4aa5e5c-b206-4e0e-8622-8232f5c84e0a","block_type":"box","text":"A purchase and sale contract differs from a repurchase agreement in that the contract arrangements","page_number":137,"box":{"x":116,"y":87,"width":751,"height":12}},{"id":"43e440e3-dbee-4805-bd5d-3a9e8536f78c","block_type":"box","text":"stipulate that securities are owned by the Fund and the purchaser receives any interest on the security","page_number":137,"box":{"x":116,"y":103,"width":766,"height":12}},{"id":"06a7d4b8-e5dd-4805-925e-89209c0d8034","block_type":"box","text":"paid during the period. In the case of repurchase agreements, the prices at which the trades are","page_number":137,"box":{"x":117,"y":118,"width":717,"height":12}},{"id":"6837a89f-9034-4619-b066-c6cf32cb644e","block_type":"box","text":"conducted do not reflect accrued interest on the underlying obligation; whereas, in the case of","page_number":137,"box":{"x":116,"y":134,"width":701,"height":12}},{"id":"34d63893-e7ae-439c-9c8d-aa66a051dd8f","block_type":"box","text":"purchase and sale contracts, the prices take into account accrued interest. A Fund may enter into","page_number":137,"box":{"x":117,"y":149,"width":728,"height":12}},{"id":"a191696d-79df-4402-9f01-8724c32c87b6","block_type":"box","text":"“tri-party” repurchase agreements. In “tri-party” repurchase agreements, an unaffiliated third-party","page_number":137,"box":{"x":116,"y":165,"width":729,"height":12}},{"id":"e2c036b3-b27a-426a-9a8e-67bcaddf2202","block_type":"box","text":"custodian maintains accounts to hold collateral for the Fund and its counterparties and, therefore, the","page_number":137,"box":{"x":116,"y":180,"width":756,"height":12}},{"id":"39ceeab9-3212-4b4e-96dc-4febb0c1fbe0","block_type":"box","text":"Fund may be subject to the credit risk of those custodians.","page_number":137,"box":{"x":117,"y":196,"width":438,"height":12}},{"id":"cb467971-bf8e-45b5-93e0-51ae3c168fe7","block_type":"box","text":"Some repurchase agreements and purchase and sale contracts are structured to result in a fixed rate","page_number":137,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"c5591daa-ebf9-449d-acf5-697d9ba58f6f","block_type":"box","text":"of return insulated from market fluctuations during the term of the agreement, although such return","page_number":137,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"cfd40397-5ad2-4cd2-8e9e-90316a66aff6","block_type":"box","text":"may be affected by currency fluctuations. However, in the event of a default under a repurchase","page_number":137,"box":{"x":117,"y":258,"width":716,"height":12}},{"id":"5a56f103-243f-4013-9b26-a5ac8f81da5a","block_type":"box","text":"agreement or under a purchase and sale contract, instead of the contractual fixed rate, the rate of","page_number":137,"box":{"x":116,"y":273,"width":730,"height":12}},{"id":"b8263556-db29-4378-97d1-47da87fa74f2","block_type":"box","text":"return to the Fund would be dependent upon intervening fluctuations of the market values of the","page_number":137,"box":{"x":117,"y":289,"width":716,"height":12}},{"id":"e234585c-afd8-42f1-aad3-110bad908ba9","block_type":"box","text":"securities underlying the contract and the accrued interest on those securities. In such event, the Fund","page_number":137,"box":{"x":116,"y":304,"width":766,"height":12}},{"id":"96bbbcfe-ff82-4d4d-9bcd-cf0e6ba6abe4","block_type":"box","text":"would have rights against the seller for breach of contract with respect to any losses arising from","page_number":137,"box":{"x":116,"y":320,"width":721,"height":12}},{"id":"e2d9867b-86c0-4d5c-bae6-aec26f691c51","block_type":"box","text":"market fluctuations following the default.","page_number":137,"box":{"x":117,"y":335,"width":303,"height":12}},{"id":"918fc0d0-153d-43f1-9a99-2846189e0f94","block_type":"box","text":"Both types of agreement usually cover short periods, such as less than one week, although they may","page_number":137,"box":{"x":117,"y":366,"width":747,"height":12}},{"id":"a38b07b8-f9fe-4291-b58f-10dca37dea52","block_type":"box","text":"have longer terms, and may be construed to be collateralized loans by the purchaser to the seller","page_number":137,"box":{"x":117,"y":382,"width":718,"height":12}},{"id":"c281e48e-e951-427a-ad39-c24ff89f56d9","block_type":"box","text":"secured by the securities transferred to the purchaser. In the case of a repurchase agreement, as a","page_number":137,"box":{"x":116,"y":397,"width":735,"height":12}},{"id":"9f136a65-e74a-4b9c-985e-9fd678596c0c","block_type":"box","text":"purchaser, a Fund’s Manager or sub-adviser will monitor the creditworthiness of the seller, and a Fund","page_number":137,"box":{"x":117,"y":413,"width":756,"height":12}},{"id":"13d92f0b-3c5a-48f4-a0a1-a5d6a849d1d8","block_type":"box","text":"will require the seller to provide additional collateral if the market value of the securities falls below the","page_number":137,"box":{"x":116,"y":428,"width":753,"height":12}},{"id":"81e381d0-2f4e-4dab-b30e-ee45422d7449","block_type":"box","text":"repurchase price at any time during the term of the repurchase agreement. The Fund does not have this","page_number":137,"box":{"x":117,"y":444,"width":769,"height":12}},{"id":"de95c318-6d98-4c9a-aa6b-3303594a3b33","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":137,"box":{"x":117,"y":459,"width":765,"height":12}},{"id":"9edd27e3-1fd0-4e51-bb01-20a66db205e5","block_type":"box","text":"Manager or sub-adviser will mark-to-market daily the value of the securities. Securities subject to","page_number":137,"box":{"x":117,"y":475,"width":715,"height":12}},{"id":"533400cd-ed3d-46b0-aa5e-79f99d835a31","block_type":"box","text":"repurchase agreements (other than tri-party repurchase agreements) and purchase and sale contracts","page_number":137,"box":{"x":117,"y":490,"width":757,"height":12}},{"id":"39d44224-2a31-4e86-af4c-ef80042bd898","block_type":"box","text":"will be held by the Fund’s custodian (or sub-custodian) in the Federal Reserve/Treasury book-entry","page_number":137,"box":{"x":116,"y":506,"width":733,"height":12}},{"id":"69ddb06f-9856-4737-8448-e59042bcbf8c","block_type":"box","text":"system or by another authorized securities depository.","page_number":137,"box":{"x":116,"y":521,"width":403,"height":12}},{"id":"e2c335c8-3886-43e7-968b-949b14258d40","block_type":"box","text":"In the event of default by the seller under a repurchase agreement construed to be a collateralized loan,","page_number":137,"box":{"x":117,"y":552,"width":750,"height":12}},{"id":"a0dcfa48-f518-4dec-858a-f1b9230a440a","block_type":"box","text":"the underlying securities are not owned by the Fund but only constitute collateral for the seller’s obligation","page_number":137,"box":{"x":116,"y":568,"width":763,"height":12}},{"id":"f9f9582d-d2e7-40ae-a528-b033c8844c5c","block_type":"box","text":"to pay the repurchase price. Therefore, the Fund may suffer time delays and incur costs or possible losses","page_number":137,"box":{"x":116,"y":583,"width":770,"height":12}},{"id":"6cc74a1a-de2a-45c0-b83b-3d00711ea94f","block_type":"box","text":"in connection with disposition of the collateral. If the seller becomes insolvent and subject to liquidation or","page_number":137,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"da24ee92-19f0-476a-ae6e-8cb7b7ff88ca","block_type":"box","text":"reorganization under applicable bankruptcy or other laws, a Fund’s ability to dispose of the underlying","page_number":137,"box":{"x":117,"y":614,"width":733,"height":12}},{"id":"98789225-19c1-4806-a6a3-aa87c51c56e8","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":137,"box":{"x":116,"y":630,"width":769,"height":12}},{"id":"64e7abd9-1b5d-4c27-b06e-1bcfe0769e66","block_type":"box","text":"the underlying securities. To minimize this risk, the securities underlying the repurchase agreement will be","page_number":137,"box":{"x":116,"y":645,"width":766,"height":12}},{"id":"db39e891-ba67-46c2-8e40-58f19da62766","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":137,"box":{"x":117,"y":661,"width":756,"height":12}},{"id":"43a4b9ec-63f2-4227-8cb7-93f3f676f9af","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":137,"box":{"x":116,"y":676,"width":723,"height":12}},{"id":"825834ec-b104-4b99-a908-7795388f0751","block_type":"box","text":"proceeds from the sale of the underlying securities are less than the repurchase price.","page_number":137,"box":{"x":117,"y":692,"width":616,"height":12}},{"id":"afd7112d-18f7-4948-8fce-b288a451bbca","block_type":"box","text":"In any repurchase transaction to which a Fund is a party, collateral for a repurchase agreement may","page_number":137,"box":{"x":117,"y":723,"width":743,"height":12}},{"id":"cd34f335-9c99-431a-a9bb-83524a2af2e5","block_type":"box","text":"include cash items and obligations issued by the U.S. Government or its agencies or instrumentalities.","page_number":137,"box":{"x":117,"y":738,"width":756,"height":12}},{"id":"243dc54b-6273-4a3d-b9f8-08a1267542a8","block_type":"box","text":"For certain Funds, however, collateral may include instruments other than cash items and obligations","page_number":137,"box":{"x":117,"y":754,"width":749,"height":12}},{"id":"9af0b96c-b279-4bcd-97d4-18e671ea145b","block_type":"box","text":"issued by the U.S. Government or its agencies or instrumentalities, including securities that the Fund","page_number":137,"box":{"x":117,"y":769,"width":746,"height":12}},{"id":"65862963-2ab7-476b-a1d3-101ffa2143a9","block_type":"box","text":"could not hold directly under its investment strategies without the repurchase obligation.","page_number":137,"box":{"x":116,"y":785,"width":650,"height":12}},{"id":"a786179b-7eec-4eed-8ac4-f101d4ed9841","block_type":"box","text":"The type of collateral underlying repurchase agreements may also pose certain risks for a Fund. Lower","page_number":137,"box":{"x":116,"y":816,"width":765,"height":12}},{"id":"aa880a7e-6042-442a-9174-c0be48fe3490","block_type":"box","text":"quality collateral and collateral with longer maturities may be subject to greater price fluctuations than","page_number":137,"box":{"x":116,"y":831,"width":757,"height":12}},{"id":"3e0a75b7-3da2-470c-862b-436f2f23a61b","block_type":"box","text":"higher quality collateral and collateral with shorter maturities. If the repurchase agreement counterparty","page_number":137,"box":{"x":117,"y":847,"width":769,"height":12}},{"id":"aa99dab8-ed36-4991-92da-2941fc2c0c6c","block_type":"box","text":"were to default, lower quality collateral may be more difficult to liquidate than higher quality collateral.","page_number":137,"box":{"x":116,"y":862,"width":755,"height":12}},{"id":"b587b08a-3c38-408f-8296-901b20d9e54c","block_type":"box","text":"Should the counterparty default and the amount of collateral not be sufficient to cover the","page_number":137,"box":{"x":116,"y":878,"width":666,"height":12}},{"id":"b47036e1-5c61-4d8c-86c3-facde724caec","block_type":"box","text":"II-89","page_number":137,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"75ebf119-669e-4ae9-808c-8ccc865ee4f6","block_type":"box","text":"NM1026U-6033243-137/221","page_number":137,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"9d30db3a-781d-4486-b0f7-ac781f918b40","block_type":"box","text":"counterparty’s repurchase obligation, a Fund would retain the status of an unsecured creditor of the","page_number":138,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"b70a7b42-cf81-45bd-ac49-bc20376145c6","block_type":"box","text":"counterparty (","page_number":138,"box":{"x":116,"y":102,"width":103,"height":13}},{"id":"b21793e4-addc-402d-9f40-0e100e873874","block_type":"box","text":"i.e.","page_number":138,"box":{"x":220,"y":103,"width":20,"height":9}},{"id":"4c41e02a-3a87-4752-9cdb-043d7f143eb6","block_type":"box","text":", the position the Fund would normally be in if it were to hold, pursuant to its","page_number":138,"box":{"x":244,"y":102,"width":565,"height":13}},{"id":"b59f9c1a-abf9-4047-a5c1-e2684cbb9548","block_type":"box","text":"investment policies, other unsecured debt securities of the defaulting counterparty) with respect to the","page_number":138,"box":{"x":117,"y":118,"width":760,"height":12}},{"id":"543670db-22ce-4d63-9407-11e0cbfe8232","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":138,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"66fe94e1-e645-442b-a668-c9f030dc8c57","block_type":"box","text":"principal and income involved in the transaction.","page_number":138,"box":{"x":117,"y":149,"width":361,"height":12}},{"id":"c611d8bf-5a0f-46b5-9585-54f16934bb1a","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":138,"box":{"x":117,"y":180,"width":761,"height":12}},{"id":"c17090f4-429b-4c9c-8cd4-832d809e133c","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many repurchase agreements","page_number":138,"box":{"x":116,"y":196,"width":771,"height":12}},{"id":"a8a70c0f-8789-4b71-8db4-d5c7303807f1","block_type":"box","text":"and purchase and sale contracts, terms that delay or restrict the rights of counterparties, such as a","page_number":138,"box":{"x":116,"y":211,"width":738,"height":12}},{"id":"8b093266-94b8-4d5d-b684-d07139900aa3","block_type":"box","text":"Fund, to terminate such agreements, take foreclosure action, exercise other default rights or restrict","page_number":138,"box":{"x":117,"y":227,"width":744,"height":12}},{"id":"29f7b8cc-e069-4aba-9ef8-34652445f487","block_type":"box","text":"transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain","page_number":138,"box":{"x":116,"y":242,"width":748,"height":12}},{"id":"b093d3aa-2819-4c58-827b-9f77c26ffb83","block_type":"box","text":"types of resolution or insolvency proceedings. It is possible that these requirements, as well as","page_number":138,"box":{"x":116,"y":258,"width":707,"height":12}},{"id":"d56cb139-1ff5-4c8d-966b-463e38627516","block_type":"box","text":"potential additional government regulation and other developments in the market, could adversely","page_number":138,"box":{"x":117,"y":273,"width":729,"height":12}},{"id":"be03be0b-1829-4c87-ab0d-d77fa8d3c2c5","block_type":"box","text":"affect a Fund’s ability to terminate existing repurchase agreements and purchase and sale contracts or","page_number":138,"box":{"x":116,"y":289,"width":768,"height":12}},{"id":"9d57a5c6-09f0-4183-9f85-30adc51b8b07","block_type":"box","text":"to realize amounts to be received under such agreements. The SEC has also finalized rules that will","page_number":138,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"cd2b301d-8f57-4801-9abe-f84d928d54ca","block_type":"box","text":"require certain transactions involving U.S. Treasuries, including repurchase agreements, to be centrally","page_number":138,"box":{"x":117,"y":320,"width":770,"height":12}},{"id":"9154d046-91ce-4577-97ad-3d21ea63d7ed","block_type":"box","text":"cleared. Compliance with these rules is expected to be required by the middle of 2027. Although the","page_number":138,"box":{"x":116,"y":335,"width":747,"height":12}},{"id":"de748e7a-dbeb-41d7-b6a4-a019f3a131a1","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":138,"box":{"x":117,"y":351,"width":770,"height":12}},{"id":"1c768016-9ddc-4a9a-a258-8583e3cee1a3","block_type":"box","text":"costs of such transactions and may adversely affect a Fund’s performance.","page_number":138,"box":{"x":116,"y":366,"width":563,"height":12}},{"id":"891c8dd4-6509-4a33-b3be-ec6e026071c3","block_type":"box","text":"Restricted Securities.","page_number":138,"box":{"x":116,"y":397,"width":177,"height":10}},{"id":"581ce4b0-710a-4091-a73a-ca694d7ac18e","block_type":"box","text":"A Fund may invest in or hold securities that are not registered under the","page_number":138,"box":{"x":293,"y":397,"width":539,"height":12}},{"id":"e7dd05e8-3c00-4ac8-885c-4bceb8776963","block_type":"box","text":"Securities Act (“restricted securities”), which may include securities in private companies and Rule","page_number":138,"box":{"x":116,"y":413,"width":733,"height":12}},{"id":"3dc2a211-f884-4d98-8dbd-7499bb1dc817","block_type":"box","text":"144A Securities. Restricted securities may be sold in private placement transactions between issuers","page_number":138,"box":{"x":118,"y":428,"width":754,"height":12}},{"id":"e8e46064-83f0-49c4-bf80-0fa962e60c02","block_type":"box","text":"and their purchasers, including through private negotiated transactions between the issuer and their","page_number":138,"box":{"x":116,"y":444,"width":745,"height":12}},{"id":"ca4187c1-d114-4500-b546-1b5f7171aa16","block_type":"box","text":"purchasers, such as the Funds, and may be neither listed on an exchange nor traded in other","page_number":138,"box":{"x":117,"y":459,"width":698,"height":12}},{"id":"bf29e248-b897-4c53-ae54-880cad55cb7e","block_type":"box","text":"established markets. In many cases, privately placed securities may not be freely transferable under","page_number":138,"box":{"x":116,"y":475,"width":749,"height":12}},{"id":"1e7fb7d8-585a-4314-abeb-2f373a5dd8d3","block_type":"box","text":"the laws of the applicable jurisdiction or due to contractual restrictions on resale. Some of these","page_number":138,"box":{"x":116,"y":490,"width":714,"height":12}},{"id":"26b83898-488c-4b39-856d-8178e3c49a26","block_type":"box","text":"securities are new and complex, and trade only among institutions; the markets for these securities are","page_number":138,"box":{"x":116,"y":506,"width":769,"height":12}},{"id":"d539fd8b-95b1-4c21-adf3-71044dc319b6","block_type":"box","text":"still developing and may not function as efficiently as established markets. Typically, investments in","page_number":138,"box":{"x":116,"y":521,"width":742,"height":12}},{"id":"d5122dc6-7e53-4c54-adce-0f29cf63c197","block_type":"box","text":"private companies are in restricted securities that are not traded in public markets and subject to","page_number":138,"box":{"x":117,"y":537,"width":719,"height":12}},{"id":"f3042f7b-b93c-46f4-991d-1d148d8646b0","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":138,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"342e2e0e-683d-4c64-b594-34688b8698d8","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":138,"box":{"x":117,"y":568,"width":769,"height":12}},{"id":"6fe076f9-23de-4a20-84f2-73b7acce0d16","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":138,"box":{"x":116,"y":583,"width":741,"height":12}},{"id":"79e7b5da-96e2-4f32-a1d4-87a0de19824c","block_type":"box","text":"trading market and the potential bespoke nature on certain transactions, restricted securities may be","page_number":138,"box":{"x":116,"y":599,"width":750,"height":12}},{"id":"054d8a2a-4aeb-4ef8-94bb-613df186d5d3","block_type":"box","text":"deemed to be illiquid investments or less liquid investments and may be more difficult to value than","page_number":138,"box":{"x":116,"y":614,"width":740,"height":12}},{"id":"c0e8840a-e408-44f3-8617-3973f60e5daf","block_type":"box","text":"publicly traded securities. To the extent that restricted securities may be resold in privately negotiated","page_number":138,"box":{"x":117,"y":630,"width":757,"height":12}},{"id":"619537a3-d690-471a-a57c-59bad84e99a3","block_type":"box","text":"transactions, the prices realized from the sales, due to lack of liquidity, could be less than those","page_number":138,"box":{"x":116,"y":645,"width":713,"height":12}},{"id":"f0225a88-a429-4659-9fd2-a1eb3f30fee2","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":138,"box":{"x":116,"y":661,"width":744,"height":12}},{"id":"21d3d6b6-c808-443a-a5d0-6b73e2aa701a","block_type":"box","text":"depending on the security type, the character of the issuer, which party (if any) will bear the expenses","page_number":138,"box":{"x":116,"y":676,"width":754,"height":12}},{"id":"1e15d130-34a4-4e3d-8dae-5983a551b652","block_type":"box","text":"of registering the restricted security, and prevailing market conditions. In addition, issuers whose","page_number":138,"box":{"x":116,"y":692,"width":715,"height":12}},{"id":"b83921b6-a6e4-46ac-aa69-ac8b2725b9e6","block_type":"box","text":"securities are not publicly traded or who are not otherwise publicly listed may not be subject to the","page_number":138,"box":{"x":116,"y":707,"width":727,"height":12}},{"id":"8c1cdd1d-71dc-42be-8e53-acd9a5844651","block_type":"box","text":"disclosure and other investor protection requirements that may be applicable if their securities were","page_number":138,"box":{"x":116,"y":723,"width":736,"height":12}},{"id":"3e7acd2f-5e2c-4df6-93f2-753c6d93d7a8","block_type":"box","text":"publicly traded. If any privately placed securities held by a Fund are required to be registered under the","page_number":138,"box":{"x":117,"y":738,"width":764,"height":12}},{"id":"f5fe62aa-cfdf-4301-9c5b-296f32b1aca5","block_type":"box","text":"securities laws of one or more jurisdictions before being resold, the Fund may be required to bear the","page_number":138,"box":{"x":116,"y":754,"width":751,"height":12}},{"id":"14f1fdc1-274d-4bc6-8665-226951a13826","block_type":"box","text":"expenses of registration. Where registration is required for restricted securities, a considerable time","page_number":138,"box":{"x":116,"y":769,"width":738,"height":12}},{"id":"efd39e14-b8ec-438d-bca3-7cd99d51316c","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":138,"box":{"x":117,"y":785,"width":731,"height":12}},{"id":"757c6245-5d37-4bc3-b8c9-88558fc2aea5","block_type":"box","text":"permitted to sell the security under an effective registration statement. If during such period, adverse","page_number":138,"box":{"x":117,"y":800,"width":744,"height":12}},{"id":"89c4b701-f0c1-4ec6-b25c-0181b9a71566","block_type":"box","text":"market conditions were to develop, the Fund might obtain less favorable pricing terms than when it","page_number":138,"box":{"x":117,"y":816,"width":731,"height":12}},{"id":"7c51a681-387f-412d-9c52-047d0c789f5f","block_type":"box","text":"decided to sell the security. In addition, the Fund may be deemed to be an “underwriter” for purposes","page_number":138,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"b015fea1-5904-4e09-b9d8-90975920c03d","block_type":"box","text":"of the Securities Act when selling restricted securities. If so, the Fund may be liable to purchasers of","page_number":138,"box":{"x":116,"y":847,"width":747,"height":12}},{"id":"e98ecf42-8d26-4be3-9194-f96a378799fa","block_type":"box","text":"the restricted securities if the registration statement prepared by the issuer, or the corresponding","page_number":138,"box":{"x":116,"y":862,"width":722,"height":12}},{"id":"d6ef9882-7154-438a-bb7b-b65cd6627759","block_type":"box","text":"prospectus, is materially inaccurate or misleading. Transactions in restricted securities may entail other","page_number":138,"box":{"x":117,"y":878,"width":769,"height":12}},{"id":"8e158d1b-ab89-4dfd-9de8-c2731b63d2ae","block_type":"box","text":"II-90","page_number":138,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5d9cb011-f8ba-4b83-a333-12c43458834e","block_type":"box","text":"NM1026U-6033243-138/221","page_number":138,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"6f07c869-fc09-4047-904d-78ddf2b1c52b","block_type":"box","text":"transaction costs that are higher than those for transactions in unrestricted securities. Certain of the","page_number":139,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"ce583e35-c8ca-4755-9cea-5237a935bef7","block_type":"box","text":"Fund’s investments in private placements may consist of direct investments and may include","page_number":139,"box":{"x":117,"y":102,"width":692,"height":13}},{"id":"7f328c17-5109-44ad-8a40-8998d2de1e77","block_type":"box","text":"investments in smaller, less seasoned issuers, which may involve greater risks. Issuers of restricted","page_number":139,"box":{"x":117,"y":118,"width":744,"height":12}},{"id":"cce11fb9-1f85-4976-8535-9a5f1a2c6870","block_type":"box","text":"securities may not be subject to SEC reporting requirements, may not be required to maintain their","page_number":139,"box":{"x":116,"y":134,"width":737,"height":12}},{"id":"57bfd1a2-6ff0-49a0-b659-2ede54561b12","block_type":"box","text":"accounting records in accordance with generally accepted accounting principles, and may not be","page_number":139,"box":{"x":116,"y":149,"width":724,"height":12}},{"id":"9409369d-8071-4296-a123-4c8178c4c8f9","block_type":"box","text":"required to maintain effective internal controls over financial reporting. As a result, BlackRock may not","page_number":139,"box":{"x":117,"y":165,"width":760,"height":12}},{"id":"ac316998-4d3d-4772-b6b2-66d37f750151","block_type":"box","text":"have timely or accurate information about the business, financial condition and results of operations of","page_number":139,"box":{"x":117,"y":180,"width":762,"height":12}},{"id":"c8d8464a-7b79-40ed-ad23-084af7f675c7","block_type":"box","text":"such issuers, and investments in securities of such issuers may involve a high degree of business and","page_number":139,"box":{"x":116,"y":196,"width":764,"height":12}},{"id":"5783d81f-f0c2-4ddf-9c41-ff0f70eaed15","block_type":"box","text":"financial risk and may result in substantial losses to the Fund. Such issuers may also have limited","page_number":139,"box":{"x":116,"y":211,"width":729,"height":12}},{"id":"d65d93ac-58d5-4cd4-96fd-005686826bdc","block_type":"box","text":"product lines, markets or financial resources, or they may be dependent on a limited management","page_number":139,"box":{"x":117,"y":227,"width":731,"height":12}},{"id":"396bcded-23bf-408f-a1d5-8376092052ba","block_type":"box","text":"group.","page_number":139,"box":{"x":116,"y":245,"width":52,"height":9}},{"id":"1103f7ad-6cf4-4d39-87f6-ccfa1aa3ee9b","block_type":"box","text":"Certain restricted securities may represent limited investment opportunities and each shareholder’s","page_number":139,"box":{"x":117,"y":273,"width":740,"height":12}},{"id":"8189e430-94ff-493a-9046-7adf7a6f8fb4","block_type":"box","text":"proportionate investment exposure to such limited investment opportunities may be reduced","page_number":139,"box":{"x":117,"y":289,"width":687,"height":12}},{"id":"13c88243-2d62-43c5-a627-b46fc5892450","block_type":"box","text":"proportionately as the Fund’s net assets grow from new or additional investments made in the Fund by","page_number":139,"box":{"x":117,"y":304,"width":766,"height":12}},{"id":"2b34984f-8ae8-429f-98f7-89809860cff7","block_type":"box","text":"other shareholders. The issuer of a private placement may later register those shares for public sale in","page_number":139,"box":{"x":116,"y":320,"width":765,"height":12}},{"id":"e0f5bb2c-3544-42cc-b4df-24dc939163c1","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":139,"box":{"x":116,"y":335,"width":766,"height":12}},{"id":"a7056756-de33-4864-a82d-520f0253b652","block_type":"box","text":"a limited trading market for securities of that issuer, including any direct investment by a Fund, or the","page_number":139,"box":{"x":116,"y":351,"width":752,"height":12}},{"id":"903ccad2-e988-4021-8aa1-7e3fb3d8838c","block_type":"box","text":"Fund may be subject to contractual limitations on its ability to resell its existing securities following an","page_number":139,"box":{"x":117,"y":366,"width":754,"height":12}},{"id":"755b5843-16d8-45b4-bcd1-7a726d62378e","block_type":"box","text":"IPO. The inability of an applicable issuer of a restricted security to complete an IPO or offer other","page_number":139,"box":{"x":117,"y":382,"width":723,"height":12}},{"id":"84a6e6e4-64ad-43a7-8fab-d489e1bb9b28","block_type":"box","text":"liquidity opportunities to the Fund and other investors will extend the holding period of a Fund’s","page_number":139,"box":{"x":117,"y":397,"width":708,"height":12}},{"id":"377f3ef8-eaf4-4075-ae0e-60339e1d3128","block_type":"box","text":"investments, potentially indefinitely, and may adversely affect the value of the investments. In making","page_number":139,"box":{"x":117,"y":413,"width":756,"height":12}},{"id":"f2fe03c3-3d98-40ac-befc-a03d4e22eec5","block_type":"box","text":"investments in such securities, a Fund may obtain access to material nonpublic information, which may","page_number":139,"box":{"x":117,"y":428,"width":770,"height":12}},{"id":"fc3a4944-84ee-4989-a1bc-385a37998f8f","block_type":"box","text":"restrict the Fund’s ability to conduct portfolio transactions in such securities. The activity of identifying,","page_number":139,"box":{"x":117,"y":444,"width":759,"height":12}},{"id":"3b558030-5f24-40b2-b67c-647cc245774b","block_type":"box","text":"completing, and realizing upon attractive investments in restricted securities is highly competitive and","page_number":139,"box":{"x":116,"y":459,"width":756,"height":12}},{"id":"c6ec596f-f3a6-4b16-8a51-f72e945c0954","block_type":"box","text":"involves a high degree of uncertainty. A Fund will be competing for investments against other similarly","page_number":139,"box":{"x":117,"y":475,"width":761,"height":12}},{"id":"0cd26c61-a4ec-4941-b31b-5620e5f4835a","block_type":"box","text":"situated investors. It is possible that competition for appropriate investment opportunities may increase,","page_number":139,"box":{"x":116,"y":490,"width":772,"height":12}},{"id":"0bd3314f-80f9-4b1a-bde2-80678f6b72f6","block_type":"box","text":"thus potentially reducing the number of investment opportunities available to a Fund and adversely","page_number":139,"box":{"x":116,"y":506,"width":738,"height":12}},{"id":"587e26a4-a2d9-4349-aa63-7eefa9761992","block_type":"box","text":"affecting the terms upon which investments can be made. There is no assurance that investment","page_number":139,"box":{"x":116,"y":521,"width":724,"height":12}},{"id":"a1c399aa-aded-4baf-b1e5-03f05e16db9b","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":139,"box":{"x":116,"y":537,"width":765,"height":12}},{"id":"03d02ff8-5940-4337-bf14-629422047b53","block_type":"box","text":"especially as that Fund grows in size.","page_number":139,"box":{"x":116,"y":552,"width":283,"height":12}},{"id":"82ff78f9-e752-4071-b273-69dadbc1b3b0","block_type":"box","text":"There may not be a readily available market value for a Fund’s restricted securities (in particular,","page_number":139,"box":{"x":116,"y":583,"width":722,"height":12}},{"id":"0c1b3e9e-f967-4a7e-bd38-3bdce816f760","block_type":"box","text":"restricted securities issued by private companies), and thus may be considered “illiquid.” Each Fund","page_number":139,"box":{"x":117,"y":599,"width":745,"height":12}},{"id":"99364a4d-6ba6-4494-9de9-bc59cf6fc891","block_type":"box","text":"values restricted securities in accordance with BlackRock’s valuation policies and procedures, which","page_number":139,"box":{"x":116,"y":614,"width":750,"height":12}},{"id":"75cf0725-bdc7-4401-89bf-5e6c9e538bad","block_type":"box","text":"are designed to value investments such that they accurately reflect fair value. Due to the inherent","page_number":139,"box":{"x":116,"y":630,"width":727,"height":12}},{"id":"72d1d196-55be-4c65-95b6-959ddd9a964d","block_type":"box","text":"uncertainty and subjectivity of determining the fair value of investments that do not have a readily","page_number":139,"box":{"x":117,"y":645,"width":725,"height":12}},{"id":"33320462-877c-41bf-b529-c6e0a37906b2","block_type":"box","text":"available market value, the fair value of a Fund’s private investments may differ significantly from the","page_number":139,"box":{"x":116,"y":661,"width":747,"height":12}},{"id":"bdae657f-421a-4070-8ff7-cb8685435918","block_type":"box","text":"values that would have been used had a readily available market value existed for such investments","page_number":139,"box":{"x":116,"y":676,"width":744,"height":12}},{"id":"049467b1-8ff2-4765-af69-8fd50bbfff0a","block_type":"box","text":"and may differ materially from the amounts the Fund may realize on any dispositions of such","page_number":139,"box":{"x":116,"y":692,"width":686,"height":12}},{"id":"2755dff7-b536-4f00-aab5-127c4458ea01","block_type":"box","text":"investments. Differences in the value of the Fund’s private investments could result in the Fund’s","page_number":139,"box":{"x":117,"y":707,"width":717,"height":12}},{"id":"8445c834-263a-40d7-ae3c-d58d1a2cdcef","block_type":"box","text":"shareholder transactions being effected at a NAV that does not accurately reflect the underlying value","page_number":139,"box":{"x":116,"y":723,"width":755,"height":12}},{"id":"5dd90af9-a014-4d09-8a4e-47c7f74ff141","block_type":"box","text":"of the Fund’s portfolio, potentially resulting in the dilution of shareholder interests and increasing","page_number":139,"box":{"x":116,"y":738,"width":712,"height":12}},{"id":"c304900e-2a25-4be1-b2e6-06f99efe902a","block_type":"box","text":"opportunities for shareholder arbitrage. The values used by the Fund to price its restricted securities","page_number":139,"box":{"x":116,"y":754,"width":742,"height":12}},{"id":"b42f6d0a-9cb5-4dc6-970a-511a3ed200d8","block_type":"box","text":"may also differ from those used by other investment companies and investors to price the same","page_number":139,"box":{"x":117,"y":769,"width":710,"height":12}},{"id":"cfa307c7-eb89-4150-9f30-f6566a4f832d","block_type":"box","text":"restricted securities. In addition, the impact of changes in the market environment and other events on","page_number":139,"box":{"x":117,"y":785,"width":757,"height":12}},{"id":"4a6817fe-f779-4839-9944-9c5195808062","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":139,"box":{"x":116,"y":800,"width":764,"height":12}},{"id":"4cf46603-6eb0-49b1-adc1-4926b6ac0356","block_type":"box","text":"impact of such changes on the readily available market values for the Fund’s other investments. A","page_number":139,"box":{"x":117,"y":816,"width":728,"height":12}},{"id":"e9731d4b-e93f-44ff-906e-6dda77dc865b","block_type":"box","text":"Fund’s NAV could be adversely affected if the Fund’s determinations regarding the fair value of the","page_number":139,"box":{"x":117,"y":831,"width":738,"height":12}},{"id":"bee29c95-0320-474b-ae04-2dd0a729158e","block_type":"box","text":"Fund’s investments were materially higher than the investment’s actual market or fair value or the","page_number":139,"box":{"x":117,"y":847,"width":728,"height":12}},{"id":"c2a0424f-58ed-4f9e-a3ff-47ed4604fed4","block_type":"box","text":"values that the Fund ultimately realizes upon the disposal of such investments.","page_number":139,"box":{"x":116,"y":862,"width":590,"height":12}},{"id":"5aab5c84-3bb0-49df-a01f-64ff15ef5f0e","block_type":"box","text":"II-91","page_number":139,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"22165872-7719-4f3d-a0fd-eceb95e0a2aa","block_type":"box","text":"NM1026U-6033243-139/221","page_number":139,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"71ac53f6-af98-42bc-bd03-3ac5f3db74b3","block_type":"box","text":"See also risks discussed under “Illiquid Investments.”","page_number":140,"box":{"x":116,"y":87,"width":400,"height":12}},{"id":"409cdeb3-3436-4fb6-a86d-440ce6f37114","block_type":"box","text":"Reverse Repurchase Agreements.","page_number":140,"box":{"x":116,"y":118,"width":271,"height":12}},{"id":"caada821-9b45-49aa-8fd5-768852d05dc8","block_type":"box","text":"A Fund may enter into reverse repurchase agreements with the","page_number":140,"box":{"x":389,"y":118,"width":481,"height":12}},{"id":"430415a3-5e66-4ce2-b30f-e69b2953e748","block_type":"box","text":"same parties with whom it may enter into repurchase agreements. Under a reverse repurchase","page_number":140,"box":{"x":116,"y":134,"width":711,"height":12}},{"id":"2e10c617-aae5-40b0-a3dc-f66a7dc01337","block_type":"box","text":"agreement, a Fund sells securities to another party and agrees to repurchase them at a particular date","page_number":140,"box":{"x":116,"y":149,"width":766,"height":12}},{"id":"f43c2338-36de-4388-adeb-cea1bbfebf4d","block_type":"box","text":"and price. A Fund may enter into a reverse repurchase agreement when it is anticipated that the","page_number":140,"box":{"x":116,"y":165,"width":719,"height":12}},{"id":"3853145a-20fa-44fb-97db-5c8009b02e13","block_type":"box","text":"interest income to be earned from the investment of the proceeds of the transaction is greater than the","page_number":140,"box":{"x":117,"y":180,"width":765,"height":12}},{"id":"b0a4bf17-9c55-4cc0-88a2-6a4e190946dd","block_type":"box","text":"interest expense of the transaction.","page_number":140,"box":{"x":117,"y":196,"width":265,"height":11}},{"id":"2cf2f6a6-73db-4625-aa4d-8563c578eb31","block_type":"box","text":"The use of reverse repurchase agreements may be regarded as leveraging and, therefore, speculative.","page_number":140,"box":{"x":116,"y":227,"width":772,"height":12}},{"id":"fbce4e35-5ef0-4b4f-9812-dd9bc9814f08","block_type":"box","text":"Furthermore, reverse repurchase agreements involve the risks that (i) the interest income earned in the","page_number":140,"box":{"x":117,"y":242,"width":771,"height":12}},{"id":"2b52a1dd-0166-49e4-89f4-017da44f62b3","block_type":"box","text":"investment of the proceeds will be less than the interest expense, (ii) the market value of the securities","page_number":140,"box":{"x":117,"y":258,"width":765,"height":12}},{"id":"719b456e-2ad5-4f62-9f2d-fd8195222386","block_type":"box","text":"retained in lieu of sale by a Fund may decline below","page_number":140,"box":{"x":117,"y":273,"width":390,"height":12}},{"id":"90051ac3-4f3d-4fb9-aa2f-99a941b41743","block_type":"box","text":"the price of the securities the Fund has sold but is","page_number":140,"box":{"x":507,"y":273,"width":375,"height":12}},{"id":"0786fb7a-4515-4fb3-a3b2-c548c57e2e9d","block_type":"box","text":"obligated to repurchase, (iii) the market value of the securities sold will decline below the price at which","page_number":140,"box":{"x":116,"y":289,"width":770,"height":12}},{"id":"a85e6bce-b1f1-4d4c-9998-88fb13c549a4","block_type":"box","text":"the Fund is required to repurchase them and (iv) the securities will not be returned to the Fund.","page_number":140,"box":{"x":116,"y":304,"width":710,"height":12}},{"id":"13ed90e9-2381-4102-9545-e52841f8d0e8","block_type":"box","text":"In addition, if the buyer of securities under a reverse repurchase agreement files for bankruptcy or","page_number":140,"box":{"x":117,"y":335,"width":731,"height":12}},{"id":"aa36f5db-61a9-4dfe-bf76-bb355622a0a7","block_type":"box","text":"becomes insolvent, such buyer or its trustee or receiver may receive an extension of time to determine","page_number":140,"box":{"x":117,"y":351,"width":765,"height":12}},{"id":"5f6d8464-6ee8-4efc-9cf1-0ece169067fb","block_type":"box","text":"whether to enforce a Fund’s obligations to repurchase the securities and the Fund’s use of the","page_number":140,"box":{"x":116,"y":366,"width":704,"height":12}},{"id":"b29ccbf9-8b62-46a4-97b3-1732bf3bb47d","block_type":"box","text":"proceeds of the reverse repurchase agreement may effectively be restricted pending such decision.","page_number":140,"box":{"x":117,"y":382,"width":744,"height":12}},{"id":"81bf909a-08d8-47b7-9531-1eee0559d60c","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into reverse repurchase","page_number":140,"box":{"x":117,"y":413,"width":710,"height":12}},{"id":"f5ff3164-d4d4-49d4-b6cf-c5164673968d","block_type":"box","text":"agreements and similar financing transactions (e.g., recourse and non-recourse tender option bonds,","page_number":140,"box":{"x":116,"y":428,"width":755,"height":12}},{"id":"d5770f61-802d-4e3e-b12b-24986073290e","block_type":"box","text":"borrowed bonds) notwithstanding the limitation on the issuance of senior securities in Section 18 of the","page_number":140,"box":{"x":117,"y":444,"width":767,"height":12}},{"id":"84948559-3726-47cb-912d-7a0bb72d3c3d","block_type":"box","text":"Investment Company Act, provided that the Fund either (i) complies with the 300% asset coverage","page_number":140,"box":{"x":117,"y":459,"width":736,"height":12}},{"id":"2e1f6e5f-020c-42c1-91e1-63f91fa0b672","block_type":"box","text":"ratio with respect to all such transactions and any","page_number":140,"box":{"x":117,"y":475,"width":371,"height":12}},{"id":"81b1eb86-69ec-4014-ac47-694a7240d980","block_type":"box","text":"other borrowings in the aggregate, or (ii) treats all","page_number":140,"box":{"x":489,"y":475,"width":372,"height":12}},{"id":"f567c36e-4e9c-40fb-b001-db237267e756","block_type":"box","text":"such transactions as Derivatives Transactions under Rule 18f-4. See “— Derivatives — Regulation of","page_number":140,"box":{"x":116,"y":490,"width":756,"height":12}},{"id":"01f2df89-bdcc-4965-b13c-20ddab27355f","block_type":"box","text":"Derivatives — Rule 18f-4 under the Investment Company Act” above. The SEC has also finalized rules","page_number":140,"box":{"x":117,"y":506,"width":768,"height":12}},{"id":"24651aba-301a-488c-8c5a-76c670e10d20","block_type":"box","text":"that will require certain transactions involving U.S. Treasuries, including reverse repurchase","page_number":140,"box":{"x":116,"y":521,"width":685,"height":12}},{"id":"ce4786c4-767b-4fc0-b503-69cfe3e20a72","block_type":"box","text":"agreements, to be centrally cleared. Compliance with these rules is expected to be required by the","page_number":140,"box":{"x":116,"y":537,"width":736,"height":12}},{"id":"ef44d520-c6d8-4717-9bba-e5c4a0cf9eaa","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":140,"box":{"x":117,"y":552,"width":762,"height":12}},{"id":"3f673086-0ab3-41d2-ae1b-8e6b71827439","block_type":"box","text":"the availability or increase the costs of such transactions and may adversely affect a Fund’s","page_number":140,"box":{"x":116,"y":568,"width":686,"height":12}},{"id":"f02b1c86-c53b-4727-a396-c04b35639e00","block_type":"box","text":"performance.","page_number":140,"box":{"x":117,"y":583,"width":103,"height":12}},{"id":"2f13f896-288b-462a-9fec-03a701270e7e","block_type":"box","text":"Additionally, regulations adopted by global prudential regulators require certain bank-regulated","page_number":140,"box":{"x":116,"y":614,"width":707,"height":12}},{"id":"a6538cb9-bbb8-4979-8a5e-966351200cd1","block_type":"box","text":"counterparties and certain of their affiliates to include in certain financial contracts, including many","page_number":140,"box":{"x":116,"y":630,"width":732,"height":12}},{"id":"304186a5-a0f4-41ce-812f-d3983cbc16d9","block_type":"box","text":"reverse repurchase agreements, terms that delay or restrict the rights of counterparties, such as a","page_number":140,"box":{"x":117,"y":645,"width":732,"height":12}},{"id":"aba6f30f-6f92-438e-ba26-d742a7dac50d","block_type":"box","text":"Fund, to terminate such agreements, take foreclosure action, exercise other default rights or restrict","page_number":140,"box":{"x":117,"y":661,"width":739,"height":12}},{"id":"57464b79-428c-4669-8fbc-60a302c976c3","block_type":"box","text":"transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain","page_number":140,"box":{"x":116,"y":676,"width":742,"height":12}},{"id":"87b3bb26-61ef-4b8e-abc0-121930ae2eb0","block_type":"box","text":"types of resolution or insolvency proceedings. It is possible that these requirements, as well as","page_number":140,"box":{"x":116,"y":692,"width":702,"height":12}},{"id":"d1de7361-f0b4-4fd1-8a21-219451d2c479","block_type":"box","text":"potential additional government regulation and other developments in the market, could adversely","page_number":140,"box":{"x":117,"y":707,"width":725,"height":12}},{"id":"bae86b89-dd9c-46d8-b0d5-4166f19f8f93","block_type":"box","text":"affect a Fund’s ability to terminate existing reverse repurchase agreements or to realize amounts to be","page_number":140,"box":{"x":116,"y":723,"width":760,"height":12}},{"id":"b25db52f-e478-4d46-a3dc-f492c1fdc8e3","block_type":"box","text":"received under such agreements.","page_number":140,"box":{"x":117,"y":738,"width":247,"height":12}},{"id":"8c1f28c0-43c8-4dab-8e4f-d2277c2a5f16","block_type":"box","text":"Rights Offerings and Warrants to Purchase.","page_number":140,"box":{"x":116,"y":769,"width":349,"height":12}},{"id":"23446edf-252d-4fb7-b46c-a4209422bb77","block_type":"box","text":"Certain Funds may participate in rights offerings and","page_number":140,"box":{"x":471,"y":769,"width":388,"height":12}},{"id":"3cf8783c-169d-4aa2-96a8-e94b92fbea57","block_type":"box","text":"may purchase warrants, which are privileges issued by corporations enabling the owners to subscribe","page_number":140,"box":{"x":117,"y":785,"width":754,"height":12}},{"id":"b261a585-b214-4722-b088-f82a3d36e2b5","block_type":"box","text":"to and purchase a specified number of shares of the corporation at a specified price during a specified","page_number":140,"box":{"x":116,"y":800,"width":758,"height":12}},{"id":"110d3989-2e73-4735-85ae-37213ff5f8a8","block_type":"box","text":"period of time. Subscription rights normally have a short life span to expiration. The purchase of rights","page_number":140,"box":{"x":117,"y":816,"width":754,"height":12}},{"id":"e4b5c801-f441-421e-bd8a-558786b05610","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":140,"box":{"x":116,"y":831,"width":760,"height":12}},{"id":"71a190f4-e66f-4eb7-a034-4a50a2a2cd9d","block_type":"box","text":"to subscribe to additional shares is not exercised prior to the rights’ and warrants’ expiration. Also, the","page_number":140,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"e9f7e49f-ba82-484f-83d7-06d71c3f8576","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":140,"box":{"x":117,"y":862,"width":732,"height":12}},{"id":"17d9163b-a75d-4ce0-9823-18b327e222f2","block_type":"box","text":"warrant added to the subscription price of the related security may exceed the value of the subscribed","page_number":140,"box":{"x":116,"y":878,"width":762,"height":12}},{"id":"976c418f-1ef3-4621-af1c-950370ae94a3","block_type":"box","text":"II-92","page_number":140,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"9c8a2219-c320-496a-9f6a-23b231aabb0c","block_type":"box","text":"NM1026U-6033243-140/221","page_number":140,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"6bfb8623-9df8-455d-bff5-43665d3e1209","block_type":"box","text":"security’s market price such as when there is no movement in the level of the underlying security.","page_number":141,"box":{"x":116,"y":87,"width":728,"height":12}},{"id":"53187e45-54dd-4509-b1b7-571b2024913d","block_type":"box","text":"Buying a warrant does not make the Fund a shareholder of the underlying stock. The warrant holder","page_number":141,"box":{"x":117,"y":102,"width":747,"height":13}},{"id":"4169ff37-5cc3-47b6-83d6-97c97676f95d","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":141,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"6482bc50-4ccd-4368-a8df-b887a6ffb07b","block_type":"box","text":"to assets of the issuer, and for this reason investments in warrants may be more speculative than other","page_number":141,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"6f0c256a-000d-45e6-bb07-78b2a7ccce17","block_type":"box","text":"equity-based investments.","page_number":141,"box":{"x":116,"y":149,"width":200,"height":12}},{"id":"6081c816-33f7-479a-85d9-bdd497b94e67","block_type":"box","text":"Rule 144A Securities.","page_number":141,"box":{"x":116,"y":180,"width":170,"height":10}},{"id":"13084500-1fc2-494f-8b1b-0ff929515047","block_type":"box","text":"A Fund may purchase securities that can be offered and sold only to “qualified","page_number":141,"box":{"x":287,"y":180,"width":590,"height":12}},{"id":"e4471093-a39d-46d4-8040-6c924781204d","block_type":"box","text":"institutional buyers” pursuant to Rule 144A under the Securities Act. See “Restricted Securities” above.","page_number":141,"box":{"x":117,"y":196,"width":769,"height":12}},{"id":"ac4527da-664c-4931-a9c3-95ee9280e05f","block_type":"box","text":"Securities Lending.","page_number":141,"box":{"x":117,"y":227,"width":153,"height":12}},{"id":"4ba14c97-2d19-43a3-8b18-c964ddb65b6a","block_type":"box","text":"Each Fund may lend portfolio securities to certain borrowers that BlackRock","page_number":141,"box":{"x":271,"y":227,"width":575,"height":12}},{"id":"6a924d0e-5be7-402f-ba7c-e14c4919dd25","block_type":"box","text":"determines to be creditworthy, including borrowers affiliated with BlackRock. The borrowers provide","page_number":141,"box":{"x":116,"y":242,"width":744,"height":12}},{"id":"52511dc8-01e1-4868-a2f7-87e74e7ed505","block_type":"box","text":"collateral that is maintained in an amount at least","page_number":141,"box":{"x":116,"y":258,"width":369,"height":9}},{"id":"2cdaa27e-5f33-41b3-99f4-1c16808c2bc3","block_type":"box","text":"equal to the current market value of the securities","page_number":141,"box":{"x":486,"y":258,"width":373,"height":11}},{"id":"801b9122-d759-42a3-a817-da9423bebd92","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":141,"box":{"x":117,"y":273,"width":755,"height":12}},{"id":"d73b8928-c414-48c9-8dfc-ae60e0e9ba4f","block_type":"box","text":"securities loans of the particular Fund exceeds one-third of the value of such Fund’s total assets","page_number":141,"box":{"x":116,"y":289,"width":718,"height":12}},{"id":"48201b78-d594-4d0c-a593-b4f1148b3d77","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":141,"box":{"x":117,"y":304,"width":765,"height":12}},{"id":"bcfc9aef-ecbc-4d7a-bf6e-fd8f7f802b26","block_type":"box","text":"return of the securities loaned. Each Fund receives, by way of substitute payment, the value of any","page_number":141,"box":{"x":117,"y":320,"width":738,"height":12}},{"id":"04990c13-4bab-4aad-a43f-c2908e76e359","block_type":"box","text":"interest or cash or non-cash distributions paid on the loaned securities that it would have otherwise","page_number":141,"box":{"x":117,"y":335,"width":738,"height":12}},{"id":"68f97e74-ba5e-49b3-b9d0-ccc506df896d","block_type":"box","text":"received if the securities were not on loan.","page_number":141,"box":{"x":117,"y":351,"width":318,"height":9}},{"id":"c866768a-e0b5-4512-b6fe-d2f793352fb0","block_type":"box","text":"With respect to loans that are collateralized by cash, the borrower may be entitled to receive a fee","page_number":141,"box":{"x":116,"y":382,"width":732,"height":12}},{"id":"aa2b4355-9fca-4bf9-80d6-03038a75b974","block_type":"box","text":"based on the amount of cash collateral. The Funds are compensated by any positive difference","page_number":141,"box":{"x":117,"y":397,"width":712,"height":12}},{"id":"212f2b23-dda6-44bb-b1a0-2577eeda96dd","block_type":"box","text":"between the amount earned on the reinvestment of cash collateral and the fee paid to the borrower. In","page_number":141,"box":{"x":117,"y":413,"width":763,"height":12}},{"id":"da9f83ed-692b-41cc-b195-d200ca788b6f","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":141,"box":{"x":116,"y":428,"width":765,"height":12}},{"id":"8ca9cad2-a4c8-4d4d-8205-075f55905438","block_type":"box","text":"percentage of the market value of the loaned securities. Any cash collateral received by the Fund for","page_number":141,"box":{"x":117,"y":444,"width":750,"height":12}},{"id":"4fb700ee-cffa-4de3-b34e-3459675d478f","block_type":"box","text":"such loans, and uninvested cash, may be reinvested in certain short-term instruments either directly on","page_number":141,"box":{"x":116,"y":459,"width":770,"height":12}},{"id":"a6df2684-0da4-4552-98c0-a7c13bd771f8","block_type":"box","text":"behalf of the Fund or through one or more joint accounts or money market funds, including those","page_number":141,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"affe7ccd-28b3-4a20-b5e1-215320b29a28","block_type":"box","text":"affiliated with BlackRock; such investments are subject to investment risk.","page_number":141,"box":{"x":116,"y":490,"width":553,"height":12}},{"id":"4c5065cf-726e-4cc4-a71b-3649353d27e1","block_type":"box","text":"Securities lending involves exposure to certain risks, including operational risk (","page_number":141,"box":{"x":116,"y":521,"width":589,"height":12}},{"id":"179e901e-5ad0-4413-a9d5-925e56389de7","block_type":"box","text":"i.e.","page_number":141,"box":{"x":706,"y":521,"width":21,"height":10}},{"id":"dc7a4dbe-2e0b-4d4b-b86a-41665968d339","block_type":"box","text":", the risk of losses","page_number":141,"box":{"x":730,"y":521,"width":138,"height":11}},{"id":"2be6f004-ecaf-45d4-84ee-8f2454a5237d","block_type":"box","text":"resulting from problems in the settlement and accounting process), “gap” risk (","page_number":141,"box":{"x":117,"y":537,"width":580,"height":12}},{"id":"f3bb0f10-2247-47f4-9668-c9ca42a50389","block_type":"box","text":"i.e.","page_number":141,"box":{"x":698,"y":537,"width":21,"height":9}},{"id":"aa0d1fdf-c6ce-416a-98c7-67ef079ce2e2","block_type":"box","text":", the risk of a","page_number":141,"box":{"x":722,"y":537,"width":100,"height":11}},{"id":"192b3d2b-eaec-42d0-b0e0-55a3e801907b","block_type":"box","text":"mismatch between the return on cash collateral reinvestments and the fees each Fund has agreed to","page_number":141,"box":{"x":117,"y":552,"width":755,"height":12}},{"id":"f71ec39a-a434-4f8f-9ce3-ffe733618b62","block_type":"box","text":"pay a borrower), foreign exchange risk (","page_number":141,"box":{"x":117,"y":568,"width":296,"height":12}},{"id":"8d48e88c-0b35-4508-baaf-180dbf15160d","block_type":"box","text":"i.e.","page_number":141,"box":{"x":414,"y":568,"width":20,"height":9}},{"id":"76daac24-19c9-4156-992a-8dd38d270f9d","block_type":"box","text":", the risk of a shortfall at default when a cash collateral","page_number":141,"box":{"x":437,"y":568,"width":409,"height":11}},{"id":"204ce5f3-320f-4da1-9d23-4ad13229fb23","block_type":"box","text":"investment is denominated in a currency other than the currency of the assets being loaned due to","page_number":141,"box":{"x":117,"y":583,"width":735,"height":12}},{"id":"807aaa44-1eb4-43a2-9e1b-f9c25ea1070b","block_type":"box","text":"movements in foreign exchange rates), and credit, legal, counterparty and market risks (including the","page_number":141,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"e82a5d9e-7481-420b-82d9-d3446f1160e1","block_type":"box","text":"risk that market events, including but not limited to corporate actions, could lead a Fund to lend","page_number":141,"box":{"x":117,"y":614,"width":709,"height":12}},{"id":"7a6df576-dbf4-4980-8527-e1408a786e63","block_type":"box","text":"securities that are trading at a premium due to increased demand, or to recall loaned securities or to","page_number":141,"box":{"x":116,"y":630,"width":748,"height":12}},{"id":"4d9f934a-a17f-4305-8ab4-68cbf56bb2dc","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":141,"box":{"x":117,"y":645,"width":754,"height":12}},{"id":"7c77f58e-d20c-47b1-8373-4205dbcdeec0","block_type":"box","text":"out securities that are subject to a corporate action and commit to the borrower a particular election as","page_number":141,"box":{"x":116,"y":661,"width":759,"height":12}},{"id":"836c0ec6-976c-4b76-ad80-9a1abc19fb5f","block_type":"box","text":"determined by the Fund’s investment adviser, the benefit the Fund would receive in respect of","page_number":141,"box":{"x":116,"y":676,"width":698,"height":12}},{"id":"dfe41eab-ce6b-4d2e-a66f-57cd7a85ffc2","block_type":"box","text":"committing to such election may or may not be less than the benefit the Fund would have received","page_number":141,"box":{"x":116,"y":692,"width":730,"height":12}},{"id":"cba1323a-2ea0-4d90-bcd7-1a276f2c9fbb","block_type":"box","text":"from making a different election in such corporate action. If a securities lending counterparty were to","page_number":141,"box":{"x":116,"y":707,"width":743,"height":12}},{"id":"65255b6e-bc99-474f-a514-2932c7cb9d34","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":141,"box":{"x":116,"y":723,"width":745,"height":12}},{"id":"0e6b2233-63e2-4e48-ba49-dbb5251eda11","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":141,"box":{"x":116,"y":738,"width":746,"height":12}},{"id":"cde8f2cc-0c64-4822-8e70-99a99a2d06ff","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":141,"box":{"x":117,"y":754,"width":743,"height":12}},{"id":"7ce78c50-e596-48b2-b49d-862db75e0044","block_type":"box","text":"be impacted, or the Fund may experience losses if the proceeds received from liquidating the collateral","page_number":141,"box":{"x":117,"y":769,"width":763,"height":12}},{"id":"5db81128-fb35-446d-8bd3-2ac3b214e7dc","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":141,"box":{"x":116,"y":785,"width":734,"height":12}},{"id":"6344cbbb-2f3f-42e8-a202-8429b5c20f74","block_type":"box","text":"transaction costs incurred in purchasing replacement securities. This latter event could trigger adverse","page_number":141,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"ea28787e-7012-4691-a0ab-e5df3ef0e694","block_type":"box","text":"tax consequences for a Fund. A Fund could lose money if its short-term investment of the collateral","page_number":141,"box":{"x":116,"y":816,"width":736,"height":12}},{"id":"449d8780-f601-4c47-9476-5f4b35b7f7da","block_type":"box","text":"declines in value over the period of the loan. Substitute payments received by a Fund representing","page_number":141,"box":{"x":116,"y":831,"width":737,"height":12}},{"id":"75001b2a-fd4f-47e0-9c40-4abbf3408eac","block_type":"box","text":"dividends paid on securities loaned out by the Fund will not be considered qualified dividend income,","page_number":141,"box":{"x":116,"y":847,"width":752,"height":12}},{"id":"ac697ba5-db91-482c-8a73-462ff94110cb","block_type":"box","text":"and distributions by the Fund of such substitute payments will not constitute qualified dividend income.","page_number":141,"box":{"x":116,"y":862,"width":765,"height":12}},{"id":"5500fd5e-d309-4cac-9201-52f31d37e6ba","block_type":"box","text":"Additionally, substitute payments received by a Fund representing qualified REIT dividends paid on","page_number":141,"box":{"x":116,"y":878,"width":741,"height":12}},{"id":"037dab3e-22fe-47b1-95b9-730cc7869dc7","block_type":"box","text":"II-93","page_number":141,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c1e7fb7b-1e6f-4024-825f-56c54f69642d","block_type":"box","text":"NM1026U-6033243-141/221","page_number":141,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"490fc135-10fb-4b48-a28b-bd91afd2e1e2","block_type":"box","text":"REIT securities loaned out by the Fund will not be considered qualified REIT dividends, and","page_number":142,"box":{"x":117,"y":87,"width":684,"height":12}},{"id":"79a02a2e-cf67-4f33-869e-10fb4d4c16f1","block_type":"box","text":"distributions by the Fund of such substitute payments will not be eligible for a 20% deduction currently","page_number":142,"box":{"x":116,"y":102,"width":761,"height":13}},{"id":"33ac0bb1-0653-4c06-9278-565ac7554192","block_type":"box","text":"available for ordinary REIT dividends paid to non-corporate shareholders provided certain other","page_number":142,"box":{"x":116,"y":118,"width":713,"height":12}},{"id":"a8d2d918-e780-4789-8bdd-e24eff6d2da3","block_type":"box","text":"requirements are satisfied. The securities lending agent will take into account the tax effects on","page_number":142,"box":{"x":117,"y":134,"width":710,"height":12}},{"id":"6424b379-f86f-4188-8fc8-79eedc7d5a57","block_type":"box","text":"shareholders caused by these differences in connection with a Fund’s securities lending program.","page_number":142,"box":{"x":116,"y":149,"width":730,"height":12}},{"id":"5bac5012-a12f-4911-ad53-2f5270a23a56","block_type":"box","text":"Substitute payments received on tax-exempt securities loaned out will not be tax-exempt income.","page_number":142,"box":{"x":116,"y":165,"width":727,"height":12}},{"id":"6a218b06-682b-4653-9572-a864c7b230f9","block_type":"box","text":"There could also be changes in the status of issuers under applicable laws and regulations, including","page_number":142,"box":{"x":116,"y":180,"width":755,"height":12}},{"id":"90c1d4f2-2dca-4a56-a03d-b6899930f61d","block_type":"box","text":"tax regulations, that may impact the regulatory or tax treatment of loaned securities and could, for","page_number":142,"box":{"x":116,"y":196,"width":729,"height":12}},{"id":"5c4c99f0-7bd8-416b-9c8e-9f26207d4a5d","block_type":"box","text":"example, result in a delay in the payment of dividend equivalent payments owed to a Fund (as","page_number":142,"box":{"x":116,"y":211,"width":704,"height":12}},{"id":"0fb5bdc5-b67d-44a0-9818-ef9a656da590","block_type":"box","text":"permitted by applicable law).","page_number":142,"box":{"x":117,"y":227,"width":217,"height":12}},{"id":"a589e186-c5dd-48dd-8028-c7ce9b67ba23","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":142,"box":{"x":117,"y":258,"width":761,"height":12}},{"id":"db3c965a-5134-453b-9c1a-bddd861f332d","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many securities lending","page_number":142,"box":{"x":116,"y":273,"width":723,"height":12}},{"id":"0d94c9b5-8e59-4dd1-8068-4ee53b97bbb3","block_type":"box","text":"agreements, terms that delay or restrict the rights of counterparties, such as the Fund, to terminate","page_number":142,"box":{"x":116,"y":289,"width":739,"height":12}},{"id":"185c6f2b-047f-4cbb-8f48-d26b7a81f38f","block_type":"box","text":"such agreements, foreclose upon collateral, exercise other default rights or restrict transfers of credit","page_number":142,"box":{"x":116,"y":304,"width":751,"height":12}},{"id":"09050194-c3c4-4f4f-814d-c011731dfb77","block_type":"box","text":"support in the event that the counterparty and/or its affiliates are subject to certain types of resolution","page_number":142,"box":{"x":116,"y":320,"width":754,"height":12}},{"id":"27717fdb-dcb5-43eb-aa28-eb9c6ce0c929","block_type":"box","text":"or insolvency proceedings. It is possible that these requirements, as well as potential additional","page_number":142,"box":{"x":116,"y":335,"width":711,"height":12}},{"id":"f325be3e-1c8d-449d-b50c-479673eb8d05","block_type":"box","text":"government regulation and other developments in the market, could adversely affect the Fund’s ability","page_number":142,"box":{"x":116,"y":351,"width":762,"height":12}},{"id":"ce5d04f6-eb6e-4422-892c-f699aaa16e0a","block_type":"box","text":"to terminate existing securities lending agreements or to realize amounts to be received under such","page_number":142,"box":{"x":116,"y":366,"width":744,"height":12}},{"id":"46bd01a3-49f1-4130-b0df-8e68042f7e5e","block_type":"box","text":"agreements. Prudential regulation may also favor lenders that can provide additional protections, such","page_number":142,"box":{"x":116,"y":382,"width":764,"height":12}},{"id":"4ed93cf6-e2d2-4869-98df-ea9bac1b4acf","block_type":"box","text":"as liens that are exercisable upon lender default, to bank borrowers. Certain Funds expect to provide","page_number":142,"box":{"x":116,"y":397,"width":754,"height":12}},{"id":"ce1aa565-b86b-4327-99d1-38a376138d20","block_type":"box","text":"additional protections to bank borrowers, where permitted pursuant to a Fund’s investment policies and","page_number":142,"box":{"x":116,"y":413,"width":771,"height":12}},{"id":"e20ea43d-5a9f-430a-9fdd-bf7ac8adfc32","block_type":"box","text":"if BlackRock believes doing so is in the best interest of the Fund.","page_number":142,"box":{"x":117,"y":428,"width":484,"height":12}},{"id":"ffb494a6-b4a7-49ee-b5e4-8161f2fd61f6","block_type":"box","text":"The SEC has adopted a rule that will require reporting and public disclosure of securities loan","page_number":142,"box":{"x":116,"y":459,"width":698,"height":12}},{"id":"9a08f8de-cd0e-4c55-8524-58c739f5f710","block_type":"box","text":"transaction","page_number":142,"box":{"x":116,"y":475,"width":81,"height":9}},{"id":"311954ac-2db5-4677-a3d3-d34c44b5276c","block_type":"box","text":"information (not including party names); this may include, but is not limited to, information","page_number":142,"box":{"x":204,"y":475,"width":667,"height":12}},{"id":"7671f0b9-f858-44bc-9dd0-31074000e612","block_type":"box","text":"about securities","page_number":142,"box":{"x":116,"y":490,"width":117,"height":10}},{"id":"96312769-1ed8-4312-8ca3-788da49e5e9c","block_type":"box","text":"loans entered into in connection with short sales. Compliance with this rule is expected","page_number":142,"box":{"x":239,"y":490,"width":648,"height":12}},{"id":"1cb574e2-ea91-4415-acc8-60a4f2f324c2","block_type":"box","text":"to be required in early 2026, although a legal challenge against the rules is currently pending.","page_number":142,"box":{"x":116,"y":506,"width":697,"height":12}},{"id":"a86b60cd-823e-4d31-b7bb-0f62671fd7ed","block_type":"box","text":"Short Sales.","page_number":142,"box":{"x":117,"y":537,"width":95,"height":9}},{"id":"570645f3-246b-4efc-9f25-181fccd00908","block_type":"box","text":"Certain Funds may make short sales of securities, either as a hedge against potential","page_number":142,"box":{"x":213,"y":537,"width":645,"height":12}},{"id":"f586be1c-0ed0-4c21-8130-5c288947667a","block_type":"box","text":"declines in value of a portfolio security or to realize appreciation when a security that the Fund does","page_number":142,"box":{"x":116,"y":552,"width":744,"height":12}},{"id":"12df3b43-6839-47c9-b71f-91e041c40bfa","block_type":"box","text":"not own declines in value. Certain Funds have a fundamental investment restriction prohibiting short","page_number":142,"box":{"x":117,"y":568,"width":747,"height":12}},{"id":"e9068b1c-a7dd-4302-a870-62a4f39dcf86","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":142,"box":{"x":116,"y":583,"width":771,"height":12}},{"id":"6ea3026b-c7f0-45d7-a7c5-b8ebd6ef36a2","block_type":"box","text":"sale, the Fund owns or has the immediate and unconditional right to acquire the identical security at no","page_number":142,"box":{"x":116,"y":599,"width":769,"height":12}},{"id":"b09766b8-4124-4e15-9021-21a9f10b6c1e","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":142,"box":{"x":116,"y":614,"width":746,"height":12}},{"id":"d128326d-4ed3-40d0-80f8-4fe63aae37c8","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":142,"box":{"x":116,"y":630,"width":717,"height":12}},{"id":"77063b30-9709-4a2b-8d87-d424225edaea","block_type":"box","text":"particular securities and is often obligated to turn over any payments received on such borrowed","page_number":142,"box":{"x":117,"y":645,"width":719,"height":12}},{"id":"c2ce7bcb-73e4-445a-8e3c-e11950163c1f","block_type":"box","text":"securities to the lender of the securities.","page_number":142,"box":{"x":116,"y":661,"width":295,"height":9}},{"id":"5697119b-3e8f-4fab-b7c3-ee9fa04cb618","block_type":"box","text":"A Fund secures its obligation to replace the borrowed security by depositing collateral with the broker","page_number":142,"box":{"x":116,"y":692,"width":756,"height":12}},{"id":"a10edef2-e05a-4bc9-beab-d58191894e99","block_type":"box","text":"dealer, usually in cash, U.S. Government Securities or other liquid securities similar to those borrowed.","page_number":142,"box":{"x":116,"y":707,"width":763,"height":12}},{"id":"9dd7e9b8-10af-412b-9946-a8f8501d0e38","block_type":"box","text":"With respect to uncovered short positions, a Fund is required to deposit similar collateral with its","page_number":142,"box":{"x":116,"y":723,"width":712,"height":12}},{"id":"2ef527e8-dfad-4d98-a0b8-b23ed0261761","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":142,"box":{"x":116,"y":738,"width":757,"height":12}},{"id":"4ea9168d-6a18-432d-8e37-5c5ee8f1ca41","block_type":"box","text":"times equal to at least 100% of the current market value of the security sold short. Depending on","page_number":142,"box":{"x":116,"y":754,"width":717,"height":12}},{"id":"0e703e26-ddc3-4397-b1b2-abeff7d7d564","block_type":"box","text":"arrangements made with the broker-dealer from which the Fund borrowed the security, regarding","page_number":142,"box":{"x":116,"y":769,"width":720,"height":12}},{"id":"9532b167-894a-45bc-a459-67a10b1aa898","block_type":"box","text":"payment received by the Fund on such security, a Fund may not receive any payments (including","page_number":142,"box":{"x":117,"y":785,"width":722,"height":12}},{"id":"f792eeb4-19da-4160-84f5-01c9f5d26bc1","block_type":"box","text":"interest) on its collateral deposited with such broker-dealer.","page_number":142,"box":{"x":117,"y":800,"width":437,"height":12}},{"id":"b4da46c1-1a60-461a-ac5c-8b3c4b3c635d","block_type":"box","text":"Because making short sales in securities that it does not own exposes a Fund to the risks associated","page_number":142,"box":{"x":117,"y":831,"width":754,"height":12}},{"id":"97e9202c-0215-4dd3-aa74-d4f9fb914dfd","block_type":"box","text":"with those securities, such short sales involve speculative exposure risk. A Fund will incur a loss as a","page_number":142,"box":{"x":116,"y":847,"width":755,"height":12}},{"id":"2a0a4409-116e-4c5a-9de7-3a292f60ab5d","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":142,"box":{"x":117,"y":862,"width":743,"height":12}},{"id":"97c74b81-ff07-4e4b-b0d0-3b656266698d","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":142,"box":{"x":116,"y":878,"width":735,"height":12}},{"id":"f9266c91-848b-4c02-8a8e-e3ace89eda62","block_type":"box","text":"II-94","page_number":142,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"cf03442a-c3dc-49cd-b743-a23790b1b150","block_type":"box","text":"NM1026U-6033243-142/221","page_number":142,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"dca46b5a-5f9b-4d9a-a812-d12bd336ec30","block_type":"box","text":"securities that increase in value, it will likely underperform similar mutual funds that do not make short","page_number":143,"box":{"x":116,"y":87,"width":759,"height":12}},{"id":"c097cb34-6031-4e3a-ad7c-506496f01a70","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":143,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"0dc2daf7-b138-4852-b870-16807084dd35","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":143,"box":{"x":116,"y":118,"width":747,"height":12}},{"id":"6ccc1967-dc27-43ef-a2ef-458c593018e8","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":143,"box":{"x":116,"y":134,"width":750,"height":12}},{"id":"99c0876f-ed9b-4172-b70b-a605a456c2e9","block_type":"box","text":"sold the security short, its potential loss is limited only by the maximum attainable price of the security,","page_number":143,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"223c2908-a5af-4cb4-9e3c-c085ff22de52","block_type":"box","text":"less the price at which the security was sold and may, theoretically, be unlimited.","page_number":143,"box":{"x":117,"y":165,"width":603,"height":12}},{"id":"22231da4-5f04-4a2a-8c1b-fc82766c5e2d","block_type":"box","text":"A Fund may also make short sales “against the box” without being subject to such limitations.","page_number":143,"box":{"x":116,"y":192,"width":698,"height":13}},{"id":"3e75ed1e-5f4a-44f6-970e-066afa1b442b","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":143,"box":{"x":116,"y":220,"width":756,"height":12}},{"id":"fda7fd2f-86bf-419a-b4b0-1f0d35277c02","block_type":"box","text":"borrowings, which are considered Derivatives Transactions under the Rule. See “— Derivatives —","page_number":143,"box":{"x":117,"y":236,"width":734,"height":12}},{"id":"0279c2b1-d986-4ee2-b704-f8e821e0cd0d","block_type":"box","text":"Regulation of Derivatives — Rule 18f-4 under the Investment Company Act” above.","page_number":143,"box":{"x":117,"y":251,"width":624,"height":12}},{"id":"4459931a-d5cd-4c44-bc94-439a5c57f78f","block_type":"box","text":"Short sales are also subject to certain SEC regulations and certain European Union and United","page_number":143,"box":{"x":116,"y":279,"width":712,"height":12}},{"id":"7efd1483-24a3-4df8-a8ec-962a9f57d38a","block_type":"box","text":"Kingdom regulations (under which there are restrictions on net short sales in certain securities). If the","page_number":143,"box":{"x":117,"y":295,"width":755,"height":12}},{"id":"5fdd3b03-dd3b-441b-8e4f-304082c0ee2f","block_type":"box","text":"SEC or regulatory authorities in other jurisdictions were to adopt additional restrictions regarding short","page_number":143,"box":{"x":116,"y":310,"width":761,"height":12}},{"id":"be6b4665-88b8-4f1d-b0d9-fecc6556a346","block_type":"box","text":"sales, they could restrict a Fund’s ability to engage in short sales in certain circumstances, and the","page_number":143,"box":{"x":116,"y":326,"width":736,"height":12}},{"id":"f40b15cb-a44e-4334-b892-5e089973188b","block_type":"box","text":"Fund may be unable to execute its investment strategy as a result. In response to market events, the","page_number":143,"box":{"x":117,"y":341,"width":753,"height":12}},{"id":"1b0b1498-2240-489b-89a1-945b07488d9d","block_type":"box","text":"SEC and regulatory authorities in other jurisdictions may adopt (and in certain cases, have adopted)","page_number":143,"box":{"x":116,"y":357,"width":747,"height":12}},{"id":"5c42c08f-10a1-4453-9bf0-eb09a3e54a4b","block_type":"box","text":"bans or other restrictions on short sales of certain securities or on derivatives and other hedging","page_number":143,"box":{"x":117,"y":372,"width":717,"height":12}},{"id":"47d935d3-b53b-4396-8866-04d41d02a2bf","block_type":"box","text":"instruments used to achieve a similar economic effect. Such bans or other restrictions may make it","page_number":143,"box":{"x":117,"y":388,"width":736,"height":12}},{"id":"827d64cc-760c-46da-9bde-b8f05e98b14f","block_type":"box","text":"impossible for a Fund to execute certain investment strategies and may have a material adverse effect","page_number":143,"box":{"x":117,"y":403,"width":765,"height":12}},{"id":"7d95b185-fca6-4c82-85eb-5e419d673ef5","block_type":"box","text":"on the Fund’s ability to generate returns.","page_number":143,"box":{"x":116,"y":419,"width":306,"height":12}},{"id":"7405508f-cf04-4414-95ae-843a8364b198","block_type":"box","text":"Special Purpose Acquisition Companies.","page_number":143,"box":{"x":117,"y":447,"width":325,"height":12}},{"id":"73ec75ed-37fd-4dd3-87c7-e9fd0ba9879f","block_type":"box","text":"A Fund may invest in stock, warrants, rights and other","page_number":143,"box":{"x":443,"y":447,"width":411,"height":12}},{"id":"864505ec-f5e5-4cc1-bfc5-dfa6a24dd015","block_type":"box","text":"interests issued by special purpose acquisition companies (“SPACs”) or similar special purpose entities","page_number":143,"box":{"x":117,"y":462,"width":770,"height":12}},{"id":"8db66221-396f-4138-b5c6-3620300af0ba","block_type":"box","text":"that pool funds to seek potential acquisition opportunities, including the “founder’s” shares and","page_number":143,"box":{"x":116,"y":478,"width":704,"height":12}},{"id":"8e074015-b579-46d2-8958-50980f49c2e9","block_type":"box","text":"warrants described below. A SPAC is a publicly traded company that raises investment capital via an","page_number":143,"box":{"x":116,"y":493,"width":755,"height":12}},{"id":"879abb59-bf26-4c49-8783-4a3116e15544","block_type":"box","text":"IPO for the purpose of identifying and acquiring one or more operating businesses or assets. In","page_number":143,"box":{"x":117,"y":509,"width":711,"height":12}},{"id":"d410f596-3317-44dc-a5ff-ea56a6e4547c","block_type":"box","text":"connection with forming a SPAC, the SPAC’s sponsors acquire “founder’s” shares, generally for","page_number":143,"box":{"x":116,"y":524,"width":716,"height":12}},{"id":"b4e04eac-d44b-4507-81fa-d72ddefa435c","block_type":"box","text":"nominal consideration, and warrants that will result in the sponsors owning a specified percentage","page_number":143,"box":{"x":117,"y":540,"width":731,"height":12}},{"id":"65888510-2efe-4533-9ba6-dcd3b3a2bbb6","block_type":"box","text":"(typically 20%) of the SPAC’s outstanding common stock upon completion of the IPO. At the time a","page_number":143,"box":{"x":117,"y":555,"width":740,"height":12}},{"id":"77bfb97b-61ca-4347-bb75-e21229011537","block_type":"box","text":"SPAC conducts an IPO, it has selected a management team but has not yet identified a specific","page_number":143,"box":{"x":116,"y":571,"width":718,"height":12}},{"id":"df1b8a59-91f5-4926-88b5-da5d690ae3b7","block_type":"box","text":"acquisition opportunity. Unless and until an acquisition is completed, a SPAC generally invests its","page_number":143,"box":{"x":116,"y":586,"width":728,"height":12}},{"id":"76a5ebe1-7715-486d-a6dc-09ab646a9af1","block_type":"box","text":"assets in U.S. Government securities, money market securities and cash. If an acquisition that meets","page_number":143,"box":{"x":116,"y":602,"width":756,"height":12}},{"id":"aec8166f-369b-4122-b821-e917af65a0ea","block_type":"box","text":"the requirements for the SPAC is not completed within a pre-established period of time, the invested","page_number":143,"box":{"x":116,"y":617,"width":749,"height":12}},{"id":"95fb862e-971f-4a8a-be8f-3c8ee080116c","block_type":"box","text":"funds are returned to the SPAC’s public shareholders, the warrants expire, and the “founder’s” shares","page_number":143,"box":{"x":116,"y":633,"width":761,"height":12}},{"id":"627e9e0f-09e6-49b9-861d-ba2700274934","block_type":"box","text":"and such warrants become worthless. Because SPACs and similar entities are in essence “blank","page_number":143,"box":{"x":116,"y":648,"width":725,"height":10}},{"id":"c13ebc9f-4e1a-4d31-afa0-7f20f826804b","block_type":"box","text":"check” companies without operating histories or ongoing business operations (other than identifying","page_number":143,"box":{"x":116,"y":664,"width":740,"height":12}},{"id":"72d7665d-c628-4844-85ec-2f2d0d99ba42","block_type":"box","text":"and pursuing acquisitions), the potential for the long-term capital appreciation of their securities is","page_number":143,"box":{"x":116,"y":679,"width":722,"height":12}},{"id":"61883c5c-cead-463c-9a2a-601562d428ad","block_type":"box","text":"particularly dependent on the ability of the SPAC’s management to identify and complete a profitable","page_number":143,"box":{"x":117,"y":695,"width":746,"height":12}},{"id":"60c54002-498d-490f-ba37-bc6e7aef8f7f","block_type":"box","text":"acquisition. There is no guarantee that the SPACs in which a Fund invests will complete an acquisition","page_number":143,"box":{"x":116,"y":710,"width":760,"height":12}},{"id":"1ab9bc3d-181d-41ae-831c-8e9fd7733302","block_type":"box","text":"or that any acquisitions completed by the SPACs in which the Fund invests will be profitable. Some","page_number":143,"box":{"x":116,"y":726,"width":735,"height":12}},{"id":"a7620b23-20f4-490b-90b0-416433270851","block_type":"box","text":"SPACs may pursue acquisitions only within certain industries or regions, which may ultimately lead to","page_number":143,"box":{"x":116,"y":741,"width":753,"height":12}},{"id":"eb5db896-6dfc-4d88-9959-cd6534750160","block_type":"box","text":"an increase in the volatility of their prices following the acquisition. In addition, some of these securities","page_number":143,"box":{"x":116,"y":757,"width":762,"height":12}},{"id":"aaffb240-ca04-450b-9cda-853f48b05f5d","block_type":"box","text":"may be considered illiquid and/or subject to restrictions on resale.","page_number":143,"box":{"x":117,"y":772,"width":485,"height":12}},{"id":"5a9f84d3-213a-4707-a4d2-a9fcbef6e556","block_type":"box","text":"Standby Commitment Agreements.","page_number":143,"box":{"x":117,"y":800,"width":278,"height":12}},{"id":"2ff2bc43-6395-4348-bd8c-4d27a2671b50","block_type":"box","text":"Standby commitment agreements commit a Fund, for a stated","page_number":143,"box":{"x":402,"y":800,"width":459,"height":12}},{"id":"a2592de8-fe78-4ad0-8493-2e7ec07a3b30","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":143,"box":{"x":117,"y":816,"width":746,"height":12}},{"id":"8e27e7c0-d257-46ed-9511-2b4383100e78","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":143,"box":{"x":116,"y":831,"width":756,"height":12}},{"id":"8ed1eaa1-4be0-41b8-9e02-ede0ab569c19","block_type":"box","text":"entering into the agreement, a Fund is paid a commitment fee, regardless of whether or not the","page_number":143,"box":{"x":116,"y":847,"width":711,"height":12}},{"id":"93e58438-a2db-4bdf-9ee4-be58ecbf9f18","block_type":"box","text":"security is ultimately issued. A Fund will enter into such agreements for the purpose of investing in the","page_number":143,"box":{"x":116,"y":862,"width":762,"height":12}},{"id":"e36a0315-44f1-4fd1-a561-f7713c609203","block_type":"box","text":"security underlying the commitment at a price that is considered advantageous to the Fund.","page_number":143,"box":{"x":116,"y":878,"width":685,"height":12}},{"id":"0695f9e2-5f5d-407e-99bc-a70eadbbd7e2","block_type":"box","text":"II-95","page_number":143,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"645b9a08-7c61-46e3-af50-a27e75934f96","block_type":"box","text":"NM1026U-6033243-143/221","page_number":143,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"25baf87b-5cc2-4279-bb2d-1778008e7d3d","block_type":"box","text":"There can be no assurance that the securities subject to a standby commitment will be issued, and the","page_number":144,"box":{"x":116,"y":87,"width":767,"height":12}},{"id":"a8b8a9bc-5c63-4e68-a624-84da80d8b098","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":144,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"b2171830-a4d3-4050-a8b2-53457ccd6484","block_type":"box","text":"the issuance of the security underlying the commitment is at the option of the issuer, the Fund may","page_number":144,"box":{"x":116,"y":118,"width":738,"height":12}},{"id":"a8b47055-935e-4ab8-acdd-b43dc9992c9a","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":144,"box":{"x":117,"y":134,"width":756,"height":12}},{"id":"80803b35-6364-4dd0-93f3-64435dadc007","block_type":"box","text":"value of the security during the commitment period.","page_number":144,"box":{"x":116,"y":149,"width":386,"height":12}},{"id":"8447e13f-d5aa-45f2-b722-5dddcb9c48f3","block_type":"box","text":"The purchase of a security pursuant to a standby commitment agreement and the related commitment","page_number":144,"box":{"x":116,"y":180,"width":756,"height":12}},{"id":"758a048e-860d-41de-8903-f6f6478794c9","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":144,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"e1da3fd6-95ac-4005-9fd6-c3a4b40a2d82","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":144,"box":{"x":116,"y":211,"width":765,"height":12}},{"id":"d7407a6e-856d-4a03-8a5a-9fff7c83c2f8","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":144,"box":{"x":116,"y":227,"width":748,"height":12}},{"id":"9dde328c-ae56-47e7-aad8-936157695b09","block_type":"box","text":"the commitment fee will be recorded as income on the expiration date of the standby commitment.","page_number":144,"box":{"x":116,"y":242,"width":727,"height":12}},{"id":"c8a86557-889a-4bb5-9676-46c8a6d95723","block_type":"box","text":"Standby commitments will only be entered into with dealers, banks and broker-dealers which, in the","page_number":144,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"d2c9571f-2a86-4939-8f7a-abf70d2f702d","block_type":"box","text":"Manager’s or sub-adviser’s opinion, present minimal credit risks. A Fund will acquire standby","page_number":144,"box":{"x":117,"y":289,"width":693,"height":12}},{"id":"e8465b1b-2312-417a-81fd-1eb1705d7a4d","block_type":"box","text":"commitments solely to facilitate portfolio liquidity and not to exercise its rights thereunder for trading","page_number":144,"box":{"x":116,"y":304,"width":744,"height":12}},{"id":"1e35b5c4-28e2-4d86-b0df-0a2d034afc91","block_type":"box","text":"purposes. Standby commitments will be valued at zero in determining NAV. Accordingly, where a Fund","page_number":144,"box":{"x":117,"y":320,"width":769,"height":12}},{"id":"bfeaaa43-4968-4cf7-a49b-65a32420a5f8","block_type":"box","text":"pays directly or indirectly for a standby commitment, its cost will be reflected as an unrealized loss for","page_number":144,"box":{"x":117,"y":335,"width":756,"height":12}},{"id":"73019cc4-7c53-45d6-8f54-126801768ea5","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":144,"box":{"x":116,"y":351,"width":771,"height":12}},{"id":"b0d882a0-ef1f-43a8-a3ce-310801102203","block_type":"box","text":"loss when the commitment is exercised or expires.","page_number":144,"box":{"x":117,"y":366,"width":380,"height":12}},{"id":"0818be58-fdb6-442c-82cf-ebf19cb387ef","block_type":"box","text":"Stripped Securities.","page_number":144,"box":{"x":117,"y":397,"width":156,"height":12}},{"id":"baf9976a-26a6-45ac-bdf9-9f119d2fa44c","block_type":"box","text":"Stripped securities are created when the issuer separates the interest and","page_number":144,"box":{"x":274,"y":397,"width":560,"height":12}},{"id":"6333705f-493f-4e05-9c3f-397b2330102c","block_type":"box","text":"principal components of an instrument and sells them as separate securities. In general, one security is","page_number":144,"box":{"x":117,"y":413,"width":771,"height":12}},{"id":"cfe6cc57-0845-4a6d-9ebf-0fe36544c8d3","block_type":"box","text":"entitled to receive the interest payments on the underlying assets (the interest only or “IO” security)","page_number":144,"box":{"x":116,"y":428,"width":740,"height":12}},{"id":"ad96c269-8f1a-44e9-a1b4-15a05c977c57","block_type":"box","text":"and the other to receive the principal payments (the principal only or “PO” security). Some stripped","page_number":144,"box":{"x":116,"y":444,"width":737,"height":12}},{"id":"33803203-ecf9-4e26-ad54-d49f263286db","block_type":"box","text":"securities may receive a combination of interest and principal payments. The yields to maturity on IOs","page_number":144,"box":{"x":116,"y":459,"width":760,"height":12}},{"id":"947b0df5-10e3-44da-8567-f2b17dff16e2","block_type":"box","text":"and POs are sensitive to the expected or anticipated rate of principal payments (including","page_number":144,"box":{"x":116,"y":475,"width":669,"height":12}},{"id":"68a82a0b-ae51-4b17-8b7a-c0f825ccb26e","block_type":"box","text":"prepayments) on the related underlying assets, and principal payments may have a material effect on","page_number":144,"box":{"x":117,"y":490,"width":758,"height":12}},{"id":"4a0f0aaa-5073-4a01-a00f-4c86a3ae4d95","block_type":"box","text":"yield to maturity. If the underlying assets experience greater than anticipated prepayments of principal,","page_number":144,"box":{"x":116,"y":506,"width":766,"height":12}},{"id":"5c4db2b1-a70e-4f47-bb53-88dd8c703a13","block_type":"box","text":"a Fund may not fully recoup its initial investment in IOs. Conversely, if the underlying assets","page_number":144,"box":{"x":116,"y":521,"width":686,"height":12}},{"id":"5902f5ba-adea-48a7-a1e1-6cb72d79a2de","block_type":"box","text":"experience less than anticipated prepayments of principal, the yield on POs could be adversely","page_number":144,"box":{"x":116,"y":537,"width":711,"height":12}},{"id":"432b982f-5638-4e6e-a727-6db2d4b450bd","block_type":"box","text":"affected. Stripped securities may be highly sensitive to changes in interest rates and rates of","page_number":144,"box":{"x":116,"y":552,"width":691,"height":12}},{"id":"2b94abe3-a347-41a9-9531-0448283b6955","block_type":"box","text":"prepayment.","page_number":144,"box":{"x":117,"y":568,"width":97,"height":12}},{"id":"5649ef86-bc7e-4250-bf8a-c0fb63d85b98","block_type":"box","text":"Structured Notes.","page_number":144,"box":{"x":117,"y":599,"width":139,"height":9}},{"id":"cc7b0342-541e-4502-a865-aac3ec7ba7e3","block_type":"box","text":"Structured notes and other related instruments purchased by a Fund are generally","page_number":144,"box":{"x":257,"y":599,"width":621,"height":12}},{"id":"3bcb68ef-ef9e-4d5f-8ec6-78c375893dc7","block_type":"box","text":"privately negotiated debt obligations where the principal and/or interest is determined by reference to","page_number":144,"box":{"x":117,"y":614,"width":753,"height":12}},{"id":"ae2c5458-c6aa-4a69-846a-e9e5ab0ae4c9","block_type":"box","text":"the performance of a specific asset, benchmark asset, market or interest rate (“reference measure”).","page_number":144,"box":{"x":116,"y":630,"width":751,"height":12}},{"id":"e2e144db-2163-4564-b3b4-677aa11e9570","block_type":"box","text":"Issuers of structured notes generally include corporations and banks. The interest rate or the principal","page_number":144,"box":{"x":117,"y":645,"width":760,"height":12}},{"id":"afe393d6-4df1-4f71-877e-5e9eb73f322f","block_type":"box","text":"amount payable upon maturity or redemption may increase or decrease, depending upon changes in","page_number":144,"box":{"x":116,"y":661,"width":748,"height":12}},{"id":"d28fe763-dded-4fd5-ac69-b72f36446384","block_type":"box","text":"the value of the reference measure. The terms of a structured note may provide that, in certain","page_number":144,"box":{"x":116,"y":676,"width":702,"height":12}},{"id":"58690799-8b9e-45be-8144-6fbc2ca78d2e","block_type":"box","text":"circumstances, no principal is due at maturity and, therefore, may result in a loss of invested capital by","page_number":144,"box":{"x":116,"y":692,"width":761,"height":12}},{"id":"b8891c30-3b78-4316-bfa1-ec50ae21a5fa","block_type":"box","text":"a Fund. The interest and/or principal payments that may be made on a structured product may vary","page_number":144,"box":{"x":116,"y":707,"width":738,"height":12}},{"id":"67222ca3-901d-44d3-be55-b6fcda6fb70c","block_type":"box","text":"widely, depending on a variety of factors, including the volatility of the reference measure.","page_number":144,"box":{"x":116,"y":723,"width":664,"height":12}},{"id":"8e9e2e3e-da63-4529-b13e-eaa0066ad732","block_type":"box","text":"Structured notes may be positively or negatively indexed, so the appreciation of the reference measure","page_number":144,"box":{"x":116,"y":754,"width":765,"height":12}},{"id":"34a842f3-baf3-4c96-af6a-af0ee0f99dd8","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":144,"box":{"x":117,"y":769,"width":763,"height":12}},{"id":"2a4be70d-ab6b-4094-b3ac-631d7079865d","block_type":"box","text":"rate of return on structured notes may be determined by applying a multiplier to the performance or","page_number":144,"box":{"x":117,"y":785,"width":735,"height":12}},{"id":"9e3fb332-4208-4d37-b189-53b0e12c1563","block_type":"box","text":"differential performance of reference measures. Application of a multiplier involves leverage that will","page_number":144,"box":{"x":116,"y":800,"width":741,"height":12}},{"id":"601d33f1-db4e-4a4a-84be-fd2966c24175","block_type":"box","text":"serve to magnify the potential for gain and the risk of loss.","page_number":144,"box":{"x":116,"y":816,"width":429,"height":12}},{"id":"89469c0d-3c50-494d-b0a1-4d9728913837","block_type":"box","text":"The purchase of structured notes exposes a Fund to the credit risk of the issuer of the structured","page_number":144,"box":{"x":116,"y":847,"width":722,"height":12}},{"id":"2d1ae405-d8e0-45b1-ac52-113d3bbf3e03","block_type":"box","text":"product. Structured notes may also be more volatile, less liquid, and more difficult to price accurately","page_number":144,"box":{"x":117,"y":862,"width":750,"height":12}},{"id":"9d14db77-89a7-401a-b390-09d75f499f06","block_type":"box","text":"than less complex securities and instruments or more traditional debt securities. The secondary market","page_number":144,"box":{"x":116,"y":878,"width":770,"height":12}},{"id":"7dfd469d-22b6-4d43-8b2b-17324867bde7","block_type":"box","text":"II-96","page_number":144,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"8923751e-d993-4785-a539-e858389605c5","block_type":"box","text":"NM1026U-6033243-144/221","page_number":144,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"3aadadbd-2013-481e-a18a-abfcb670cca5","block_type":"box","text":"for structured notes could be illiquid making them difficult to sell when the Fund determines to sell","page_number":145,"box":{"x":116,"y":87,"width":729,"height":12}},{"id":"081d037a-44cd-481d-b1a7-f48f56bb21c1","block_type":"box","text":"them. The possible lack of a liquid secondary market for structured notes and the resulting inability of","page_number":145,"box":{"x":116,"y":102,"width":755,"height":13}},{"id":"add0b25d-dcd0-4dde-83b5-814b049a85f9","block_type":"box","text":"the Fund to sell a structured note could expose the Fund to losses and could make structured notes","page_number":145,"box":{"x":116,"y":118,"width":746,"height":12}},{"id":"1011cd46-7143-4d2a-868f-e3772dae76b6","block_type":"box","text":"more difficult for the Fund to value accurately.","page_number":145,"box":{"x":117,"y":134,"width":344,"height":12}},{"id":"a11679ce-8b9b-4edc-aa0e-4884a717aaa3","block_type":"box","text":"Taxability Risk.","page_number":145,"box":{"x":118,"y":161,"width":119,"height":12}},{"id":"980fb0e4-f259-4fc8-8f1a-a1d98a66227c","block_type":"box","text":"Certain of the Funds intend to minimize the payment of taxable income to","page_number":145,"box":{"x":238,"y":161,"width":555,"height":12}},{"id":"9eab0b93-eee2-4b8a-8135-8823c4e37c41","block_type":"box","text":"shareholders by investing in tax-exempt or municipal securities in reliance at the time of purchase on","page_number":145,"box":{"x":116,"y":176,"width":753,"height":12}},{"id":"1fa73021-415e-454b-a983-2703c00451cf","block_type":"box","text":"an opinion of bond counsel to the issuer and, in the case of derivative securities, sponsors’ counsel,","page_number":145,"box":{"x":116,"y":192,"width":745,"height":12}},{"id":"2c0aa4d4-8073-4420-97be-13907ae9ea97","block_type":"box","text":"that the interest paid on those securities will be excludable from gross income for U.S. federal income","page_number":145,"box":{"x":116,"y":207,"width":759,"height":12}},{"id":"c7f588a4-b887-4803-a315-286dc35bc9f2","block_type":"box","text":"tax purposes. Such securities, however, may be determined to pay, or have paid, taxable income","page_number":145,"box":{"x":116,"y":223,"width":726,"height":12}},{"id":"1dde1167-25c3-46c3-a6c0-ba1f8705b860","block_type":"box","text":"subsequent to the Fund’s acquisition of the securities. In that event, the IRS may demand that the","page_number":145,"box":{"x":116,"y":238,"width":731,"height":12}},{"id":"38b2a928-343d-4c94-bbc1-5f157005b15d","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":145,"box":{"x":117,"y":254,"width":758,"height":12}},{"id":"3eda0ca9-555f-4bd6-8acf-2f0c87c28cee","block_type":"box","text":"the Fund’s yield could be adversely affected. In addition, the treatment of dividends previously paid or","page_number":145,"box":{"x":116,"y":269,"width":758,"height":12}},{"id":"67b6fe47-5d4b-40a8-880c-e471333dd23d","block_type":"box","text":"to be paid by the Fund as “exempt interest dividends” could be adversely affected, subjecting the","page_number":145,"box":{"x":116,"y":285,"width":724,"height":12}},{"id":"2b78caf8-77bf-4024-83a4-c1dc739f5a91","block_type":"box","text":"Fund’s shareholders to increased U.S. federal income tax liabilities. If the interest paid on any","page_number":145,"box":{"x":117,"y":300,"width":699,"height":12}},{"id":"3571a5d5-5cf9-4801-b90d-470507808608","block_type":"box","text":"tax-exempt or municipal security held by the Fund is subsequently determined to be taxable, the Fund","page_number":145,"box":{"x":116,"y":316,"width":762,"height":12}},{"id":"fa2cff2b-d141-4097-978b-3424cf143494","block_type":"box","text":"will dispose of that security as soon as reasonably practicable. In addition, future laws, regulations,","page_number":145,"box":{"x":116,"y":331,"width":738,"height":12}},{"id":"d0976b67-33bd-4358-abbf-73bf2f25bc51","block_type":"box","text":"rulings or court decisions may cause interest on municipal securities to be subject, directly or indirectly,","page_number":145,"box":{"x":117,"y":347,"width":769,"height":12}},{"id":"20360659-2896-4b34-9b9a-7e97d0305abd","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":145,"box":{"x":116,"y":362,"width":749,"height":12}},{"id":"0a0f5275-edc3-422d-9d68-173216a8cb8b","block_type":"box","text":"income taxation, or the value of state municipal securities to be subject to state or local intangible","page_number":145,"box":{"x":117,"y":378,"width":726,"height":12}},{"id":"633d552c-a5e0-483b-91a3-96633351c62d","block_type":"box","text":"personal property tax, or may otherwise prevent the Fund from realizing the full current benefit of the","page_number":145,"box":{"x":117,"y":393,"width":750,"height":12}},{"id":"1bdf3b8a-093f-4aaa-bf3a-8af40465667d","block_type":"box","text":"tax-exempt status of such securities. Any such change could also affect the market price of such","page_number":145,"box":{"x":116,"y":409,"width":721,"height":12}},{"id":"20581fac-03b0-4067-bc6e-0ce0fb44346a","block_type":"box","text":"securities, and thus the value of an investment in the Fund.","page_number":145,"box":{"x":116,"y":424,"width":444,"height":11}},{"id":"6c594fe3-9ec2-4704-9f0d-b52c0a4c2ee4","block_type":"box","text":"Temporary Defensive Measures.","page_number":145,"box":{"x":118,"y":451,"width":255,"height":12}},{"id":"40e8958b-c376-4819-a581-0d8303509cda","block_type":"box","text":"As a temporary defensive measure, including to respond to adverse","page_number":145,"box":{"x":374,"y":451,"width":514,"height":12}},{"id":"53a84a6e-db5f-46dd-b16f-5fc8c081b9e7","block_type":"box","text":"market, economic, political or other conditions, a Fund may depart from its principal investment","page_number":145,"box":{"x":117,"y":467,"width":709,"height":12}},{"id":"274c94c4-a028-4943-8251-11450c6d1074","block_type":"box","text":"strategies and may invest without limitation in cash, high quality money market instruments, or other","page_number":145,"box":{"x":116,"y":482,"width":747,"height":12}},{"id":"7f2c498d-784e-4007-b866-4b77e7987893","block_type":"box","text":"short term investments. Certain Funds may also invest in cash and other such instruments pending","page_number":145,"box":{"x":116,"y":498,"width":741,"height":12}},{"id":"7d484612-2167-4d9a-8e36-85b54966c98a","block_type":"box","text":"investment or to meet anticipated redemption requests. High quality money market instruments include","page_number":145,"box":{"x":117,"y":514,"width":768,"height":11}},{"id":"e7065cc2-e7d2-4007-8c9a-a2f8c35a8a4c","block_type":"box","text":"U.S. Government obligations, U.S. Government agency obligations, dollar denominated obligations of","page_number":145,"box":{"x":117,"y":529,"width":758,"height":12}},{"id":"d96959a1-eee0-4ec6-b9f1-6dd84355da3c","block_type":"box","text":"foreign issuers, bank obligations, including U.S. subsidiaries and branches of foreign banks, corporate","page_number":145,"box":{"x":116,"y":544,"width":763,"height":12}},{"id":"748311a6-383a-4a6f-814a-56814b2d9d0c","block_type":"box","text":"obligations, commercial paper, repurchase agreements and obligations of supranational organizations.","page_number":145,"box":{"x":116,"y":560,"width":767,"height":12}},{"id":"be9d5172-ce5c-4770-a2da-d8f29b7d2361","block_type":"box","text":"Generally, such obligations will mature within one year from the date of settlement but may mature","page_number":145,"box":{"x":117,"y":575,"width":735,"height":12}},{"id":"535f2571-107f-4368-aaf2-0f3561ac9bee","block_type":"box","text":"within two years from the date of settlement. Temporary defensive measures may affect a Fund’s","page_number":145,"box":{"x":116,"y":591,"width":727,"height":12}},{"id":"105dfb02-db17-47c0-9ac3-d61008bf338d","block_type":"box","text":"ability to achieve its investment objective.","page_number":145,"box":{"x":116,"y":607,"width":312,"height":11}},{"id":"925453bc-05f7-410d-9341-20cbee253706","block_type":"box","text":"U.S. Government Obligations.","page_number":145,"box":{"x":117,"y":634,"width":236,"height":12}},{"id":"c8a1fe2c-9c09-49ca-a0ca-b39e7006ad65","block_type":"box","text":"A Fund may purchase obligations issued or guaranteed by the U.S.","page_number":145,"box":{"x":354,"y":634,"width":510,"height":12}},{"id":"739ae26f-0c2a-474c-afcb-cf637e0f8689","block_type":"box","text":"Government and U.S. Government agencies and instrumentalities. Obligations of certain agencies and","page_number":145,"box":{"x":117,"y":649,"width":767,"height":12}},{"id":"3e2b265f-527d-4005-a138-db16039e0d5e","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":145,"box":{"x":117,"y":665,"width":761,"height":12}},{"id":"616e32ba-bd00-42fe-8698-85a52a1e1433","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":145,"box":{"x":116,"y":680,"width":740,"height":12}},{"id":"6dc1aff7-fbf8-4af4-bef9-ff2a4e3b01dc","block_type":"box","text":"supported only by the credit of the agency or instrumentality issuing the obligation. No assurance can","page_number":145,"box":{"x":116,"y":696,"width":751,"height":12}},{"id":"6cd62f56-8a23-423c-b965-c7d0620e4b2a","block_type":"box","text":"be given that the U.S. Government will provide financial support to U.S. Government-sponsored","page_number":145,"box":{"x":117,"y":711,"width":710,"height":12}},{"id":"be26e701-aa38-4cf2-9a52-4a1647619f83","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":145,"box":{"x":117,"y":727,"width":757,"height":12}},{"id":"111d86c4-5ca6-459c-a1d9-9db40a1388c1","block_type":"box","text":"be held by trusts that issue participation certificates (such as Treasury income growth receipts and","page_number":145,"box":{"x":117,"y":742,"width":728,"height":12}},{"id":"36e14a38-e557-4c0c-a0da-165f7fbef1c8","block_type":"box","text":"certificates of accrual on Treasury certificates). These certificates, as well as Treasury receipts and","page_number":145,"box":{"x":116,"y":758,"width":734,"height":12}},{"id":"64a8565b-f376-4f84-8f57-978631a278b4","block_type":"box","text":"other stripped securities, represent beneficial ownership interests in either future interest payments or","page_number":145,"box":{"x":116,"y":773,"width":754,"height":12}},{"id":"6eac6710-dc93-4cee-bed7-8990655cb73c","block_type":"box","text":"the future principal payments on U.S. Government obligations. These instruments are issued at a","page_number":145,"box":{"x":116,"y":789,"width":721,"height":12}},{"id":"ca476ca7-e0d8-48fd-9c6d-685566e08a4f","block_type":"box","text":"discount to their “face value” and may (particularly in the case of stripped mortgage-backed securities)","page_number":145,"box":{"x":116,"y":804,"width":758,"height":12}},{"id":"a27d0c0c-c0e3-4b3a-ab5e-b24dbd0d759e","block_type":"box","text":"exhibit greater price volatility than ordinary debt securities because of the manner in which their","page_number":145,"box":{"x":116,"y":820,"width":708,"height":12}},{"id":"54be7eb5-e6d4-4a60-a94a-94dc6f3a3f29","block_type":"box","text":"principal and interest are returned to investors.","page_number":145,"box":{"x":117,"y":835,"width":351,"height":12}},{"id":"3c122441-4a16-463c-985a-bd6d328fb307","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":145,"box":{"x":117,"y":862,"width":734,"height":12}},{"id":"4ab7f9e4-6ec5-4f8c-a5f8-8a5bcce916ed","block_type":"box","text":"Treasury Bills, Treasury Notes and Treasury Bonds and the obligations of the Federal Housing","page_number":145,"box":{"x":116,"y":878,"width":708,"height":12}},{"id":"2138026c-b282-46d6-ace9-76d7b13d0863","block_type":"box","text":"II-97","page_number":145,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"fc94ee9c-127c-4f39-8e79-c248f700f7ae","block_type":"box","text":"NM1026U-6033243-145/221","page_number":145,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"eecaeae1-8abf-4699-826e-6dd4ec55c275","block_type":"box","text":"Administration, Farmers Home Administration, Export-Import Bank of the United States, Small","page_number":146,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"80cb0bd4-e5c9-483b-85a0-167e91d0170d","block_type":"box","text":"Business Administration, Ginnie Mae, Fannie Mae, Federal Financing Bank, General Services","page_number":146,"box":{"x":117,"y":102,"width":702,"height":13}},{"id":"bfd84674-f215-4010-b300-b689beebcc1a","block_type":"box","text":"Administration, Student Loan Marketing Association, Central Bank for Cooperatives, Federal Home","page_number":146,"box":{"x":116,"y":118,"width":741,"height":12}},{"id":"0e6648cc-ed01-4346-a986-cb94393ca85a","block_type":"box","text":"Loan Banks, Freddie Mac, Federal Intermediate Credit Banks, Federal Land Banks, Farm Credit Banks","page_number":146,"box":{"x":117,"y":134,"width":771,"height":11}},{"id":"0a24bffb-bdf9-470b-92ba-6543933ec2b1","block_type":"box","text":"System, Maritime Administration, Tennessee Valley Authority and Washington D.C. Armory Board. The","page_number":146,"box":{"x":116,"y":149,"width":772,"height":12}},{"id":"a47091ed-b776-407d-b844-273e089383cd","block_type":"box","text":"Funds may also invest in mortgage-related securities issued or guaranteed by U.S. Government","page_number":146,"box":{"x":117,"y":165,"width":717,"height":12}},{"id":"85f94658-6cd2-4d6d-8e3b-bb2a823ed20d","block_type":"box","text":"agencies and instrumentalities, including such instruments as obligations of Ginnie Mae, Fannie Mae","page_number":146,"box":{"x":116,"y":180,"width":754,"height":12}},{"id":"3482bce4-6be6-4f30-90c0-e109761d343d","block_type":"box","text":"and Freddie Mac.","page_number":146,"box":{"x":116,"y":196,"width":135,"height":9}},{"id":"96f835ec-4196-44c7-8e0b-833618506b59","block_type":"box","text":"U.S. Treasury Obligations.","page_number":146,"box":{"x":117,"y":227,"width":194,"height":12}},{"id":"72df45f6-3b73-463f-8fd7-fd52d258e548","block_type":"box","text":"Treasury obligations may differ in their interest rates, maturities, times of","page_number":146,"box":{"x":313,"y":227,"width":548,"height":12}},{"id":"5bb9566d-2970-42c0-8a69-c110fdb2177f","block_type":"box","text":"issuance and other characteristics. Obligations of U.S. Government agencies and authorities are","page_number":146,"box":{"x":117,"y":242,"width":721,"height":12}},{"id":"01fcdfc4-0d9c-448f-b671-01da34ef2d00","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":146,"box":{"x":116,"y":258,"width":747,"height":12}},{"id":"49b2b7f0-7a13-46b3-a409-3849bb305788","block_type":"box","text":"U.S. Government. No assurance can be given that the U.S. Government will provide financial support","page_number":146,"box":{"x":117,"y":273,"width":758,"height":12}},{"id":"6eeea418-418f-4d82-b241-66fb1d3222f4","block_type":"box","text":"to its agencies and authorities if it is not obligated by law to do so.","page_number":146,"box":{"x":116,"y":289,"width":493,"height":12}},{"id":"a4fee949-4ed7-41dc-85b3-e94adc3b9a51","block_type":"box","text":"U.S. Treasury Rolls.","page_number":146,"box":{"x":117,"y":320,"width":153,"height":12}},{"id":"0f236766-831a-4724-adbe-809e0e620c22","block_type":"box","text":"Certain Funds may invest in U.S. Treasury","page_number":146,"box":{"x":271,"y":320,"width":320,"height":12}},{"id":"db183f24-60de-4e3d-ac02-94c3cd9f058d","block_type":"box","text":"rolls. In a U.S. Treasury roll transaction,","page_number":146,"box":{"x":592,"y":320,"width":292,"height":12}},{"id":"578d4665-012e-43d8-bb95-46ac054a4f64","block_type":"box","text":"the Fund sells a treasury security to a counterpa","page_number":146,"box":{"x":116,"y":335,"width":350,"height":12}},{"id":"510827ab-5d0a-4cc3-a5e6-10b8c253b280","block_type":"box","text":"rty with a simultaneous agreement to repurchase the","page_number":146,"box":{"x":468,"y":335,"width":387,"height":12}},{"id":"56149cae-72a2-4f29-8e1a-9fcc17832ff0","block_type":"box","text":"same security at an agreed upon price and future settl","page_number":146,"box":{"x":116,"y":351,"width":392,"height":12}},{"id":"b8cd2e29-ae9d-4a59-829f-7193f63f791a","block_type":"box","text":"ement date. U.S. Treasury roll transactions may","page_number":146,"box":{"x":510,"y":351,"width":353,"height":12}},{"id":"76129b39-edb0-4217-9c43-a0ea0c5531e1","block_type":"box","text":"incrementally adjust the average maturity of a Fund’","page_number":146,"box":{"x":117,"y":366,"width":376,"height":12}},{"id":"989a5289-0b9b-4f47-967c-a367a2218422","block_type":"box","text":"s portfolio and increase the interest yield on the","page_number":146,"box":{"x":494,"y":366,"width":348,"height":12}},{"id":"b93edadb-5df0-48fc-b1d2-b80ffeba3153","block_type":"box","text":"Fund’s portfolio by extending the average maturity of the portfolio in a normal yield curve environment.","page_number":146,"box":{"x":117,"y":382,"width":746,"height":12}},{"id":"b1775257-6181-4d1e-b119-35f697e9eba5","block_type":"box","text":"During the period before the settlement","page_number":146,"box":{"x":117,"y":397,"width":284,"height":12}},{"id":"28212caa-5a72-4a4b-a218-36b193862de2","block_type":"box","text":"date of a U.S. Treasury roll, a","page_number":146,"box":{"x":401,"y":397,"width":224,"height":12}},{"id":"160ea6b0-32e6-4197-ae9d-bb45848c7bed","block_type":"box","text":"Fund continues to earn interest on","page_number":146,"box":{"x":626,"y":397,"width":254,"height":10}},{"id":"2ffddfb3-6401-43c7-8988-a4cc000a7125","block_type":"box","text":"the securities it is selling; however, it does not earn in","page_number":146,"box":{"x":116,"y":413,"width":387,"height":12}},{"id":"07c1bce3-5221-411d-b3a1-1dca71aff717","block_type":"box","text":"terest on the securities it is purchasing until after the","page_number":146,"box":{"x":504,"y":413,"width":383,"height":12}},{"id":"79553e39-21e4-4463-a3af-f2b57a3c7398","block_type":"box","text":"settlement date. A Fund could suffer an opportunity loss","page_number":146,"box":{"x":116,"y":428,"width":412,"height":12}},{"id":"be0b3eb5-0ba7-44dd-9a2b-982270a5540f","block_type":"box","text":"if the counterparty to the U.S. Treasury roll","page_number":146,"box":{"x":528,"y":428,"width":314,"height":12}},{"id":"2d54644b-4e73-4da0-af1c-cf2ed10c2cfe","block_type":"box","text":"transaction failed to perform its obligations on the settlement date.","page_number":146,"box":{"x":116,"y":444,"width":484,"height":12}},{"id":"857afda6-2d1f-44fc-9933-40ae3d499f5a","block_type":"box","text":"The market value of the securities that a Fund is required to purchase may decline below the agreed","page_number":146,"box":{"x":116,"y":475,"width":751,"height":12}},{"id":"aebde158-34b5-4a83-a0a8-df2b245bf633","block_type":"box","text":"upon purchase price of those securities. U.S. Treasury rolls are speculative techniques that can be","page_number":146,"box":{"x":117,"y":490,"width":737,"height":12}},{"id":"e6900e4a-3c68-4390-8344-d9cc417c0711","block_type":"box","text":"deemed to involve leverage. There is no assurance that U.S. Treasury rolls can be successfully","page_number":146,"box":{"x":116,"y":506,"width":714,"height":12}},{"id":"4e2ef4e4-3cb5-45a2-9c4e-ba4040d7b1f4","block_type":"box","text":"employed.","page_number":146,"box":{"x":116,"y":521,"width":82,"height":12}},{"id":"f009c091-2542-428a-853b-f7d02f56738f","block_type":"box","text":"Utility Industries.","page_number":146,"box":{"x":117,"y":552,"width":140,"height":12}},{"id":"972e9934-c8d5-4ea5-877f-e0e17b74e641","block_type":"box","text":"Risks that are intrinsic to the utility industries include difficulty in obtaining an","page_number":146,"box":{"x":259,"y":552,"width":572,"height":12}},{"id":"661d8988-c0c0-4d35-9878-f037e3a6a872","block_type":"box","text":"adequate return on invested capital, difficulty in financing large construction programs during an","page_number":146,"box":{"x":116,"y":568,"width":715,"height":12}},{"id":"e0919d56-b773-4881-87ba-bf4ffa93aaf4","block_type":"box","text":"inflationary period, restrictions on operations and increased cost and delays attributable to","page_number":146,"box":{"x":117,"y":583,"width":672,"height":12}},{"id":"96f565e8-6746-496f-b59a-85f8bab31f7d","block_type":"box","text":"environmental considerations and regulation, difficulty in raising capital in adequate amounts on","page_number":146,"box":{"x":116,"y":599,"width":715,"height":12}},{"id":"8158c073-41af-4032-a6e8-8783f9985b2c","block_type":"box","text":"reasonable terms in periods of high inflation and unsettled capital markets, technological innovations","page_number":146,"box":{"x":117,"y":614,"width":750,"height":12}},{"id":"aa10a291-89d4-4ad2-8924-262359ad6886","block_type":"box","text":"that may render existing plants, equipment or products obsolete, the potential impact of natural or","page_number":146,"box":{"x":116,"y":630,"width":729,"height":12}},{"id":"40d2db18-d479-4067-aa78-58e220bc4c5a","block_type":"box","text":"man-made disasters, increased costs and reduced availability of certain types of fuel, occasional","page_number":146,"box":{"x":117,"y":645,"width":721,"height":12}},{"id":"1054d5c8-cac8-4de0-b582-5754a9248839","block_type":"box","text":"reduced availability and high costs of natural gas for resale, the effects of energy conservation, the","page_number":146,"box":{"x":117,"y":661,"width":731,"height":12}},{"id":"d91c5b49-6128-4595-9708-1e4fc55e1aa3","block_type":"box","text":"effects of a national energy policy and lengthy delays and greatly increased costs and other problems","page_number":146,"box":{"x":116,"y":676,"width":753,"height":12}},{"id":"03118750-e9e4-4bf5-8bc7-ba1ce2b4104a","block_type":"box","text":"associated with the design, construction, licensing, regulation and operation of nuclear facilities for","page_number":146,"box":{"x":116,"y":692,"width":730,"height":12}},{"id":"ebbbd589-300f-4029-af09-852dcb2edc94","block_type":"box","text":"electric generation, including, among other considerations, the problems associated with the use of","page_number":146,"box":{"x":116,"y":707,"width":736,"height":12}},{"id":"3495b9bb-8fda-4473-a6a2-4c040781366b","block_type":"box","text":"radioactive materials and the disposal of radioactive wastes. There are substantial differences among","page_number":146,"box":{"x":117,"y":723,"width":752,"height":12}},{"id":"d3b17965-efe8-4207-8073-7e4401a14c99","block_type":"box","text":"the regulatory practices and policies of various jurisdictions, and any given regulatory agency may","page_number":146,"box":{"x":116,"y":738,"width":727,"height":12}},{"id":"8fa72a9f-be58-473c-a301-a24955a77260","block_type":"box","text":"make major shifts in policy from time to time. There is no assurance that regulatory authorities will, in","page_number":146,"box":{"x":117,"y":754,"width":746,"height":12}},{"id":"35b8fa37-a904-4588-aebd-560208dd2171","block_type":"box","text":"the future, grant rate increases or that such increases will be adequate to permit the payment of","page_number":146,"box":{"x":116,"y":769,"width":712,"height":12}},{"id":"48117da6-df5e-4de7-8238-bc503aa5a247","block_type":"box","text":"dividends on common stocks issued by a utility company. Additionally, existing and possible future","page_number":146,"box":{"x":116,"y":785,"width":730,"height":12}},{"id":"4a7aeda6-bf23-4bee-8ed9-e50642e8c1d6","block_type":"box","text":"regulatory legislation may make it even more difficult for utilities to obtain adequate relief. Certain of the","page_number":146,"box":{"x":117,"y":800,"width":765,"height":12}},{"id":"8d09a385-302e-488e-a302-68b4f21cd7d2","block_type":"box","text":"issuers of securities held in the Fund’s portfolio may own or operate nuclear generating facilities.","page_number":146,"box":{"x":117,"y":816,"width":714,"height":12}},{"id":"72f46636-b58a-46ed-8a8d-778dab74ea4f","block_type":"box","text":"Governmental authorities may from time to time review existing policies and impose additional","page_number":146,"box":{"x":117,"y":831,"width":702,"height":12}},{"id":"867c1bbb-446d-4cf7-b14a-19dde434a9d6","block_type":"box","text":"requirements governing the licensing, construction and operation of nuclear power plants. Prolonged","page_number":146,"box":{"x":117,"y":847,"width":751,"height":12}},{"id":"821071f1-1cce-41fb-a9b6-0de6d71047e6","block_type":"box","text":"changes in climatic conditions can also have a significant impact on both the revenues of an electric","page_number":146,"box":{"x":116,"y":862,"width":746,"height":12}},{"id":"c712fe38-9fad-4277-969b-bfe5812a76c2","block_type":"box","text":"and gas utility as well as the expenses of a utility, particularly a hydro-based electric utility.","page_number":146,"box":{"x":116,"y":878,"width":675,"height":12}},{"id":"98cd03f9-1849-4ae9-abf1-21313d5db585","block_type":"box","text":"II-98","page_number":146,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ad5bbf77-c8af-4a17-9ba6-01f393da93d2","block_type":"box","text":"NM1026U-6033243-146/221","page_number":146,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"9e210fc7-8f65-4e26-a383-e7f9dee68f14","block_type":"box","text":"Companies in the utilities sector may be adversely affected by changes in exchange rates, domestic","page_number":147,"box":{"x":117,"y":87,"width":747,"height":12}},{"id":"7d002b74-6fe4-4d4f-9fe5-7610f0cfa17e","block_type":"box","text":"and international competition, and governmental limitations on rates charged to customers. The value","page_number":147,"box":{"x":116,"y":103,"width":759,"height":12}},{"id":"bf792e85-bc0a-4be0-af59-257997748fc5","block_type":"box","text":"of regulated utility debt securities and, to a lesser extent, equity securities, tends to have an inverse","page_number":147,"box":{"x":116,"y":118,"width":743,"height":12}},{"id":"4594ca91-9f1f-4987-8091-1bec6566638d","block_type":"box","text":"relationship to the movement of interest rates and therefore may lead to volatility in performance.","page_number":147,"box":{"x":117,"y":134,"width":723,"height":12}},{"id":"a38b4760-5530-4c5f-b8cc-11155aef7e4e","block_type":"box","text":"Utility companies in the United States and in foreign countries are generally subject to regulation. In the","page_number":147,"box":{"x":117,"y":165,"width":771,"height":12}},{"id":"27bf552d-bbe7-4911-9ce0-66e9b75d971b","block_type":"box","text":"United States, most utility companies are regulated by state and/or federal authorities. Such regulation","page_number":147,"box":{"x":117,"y":180,"width":764,"height":12}},{"id":"d4b13319-222c-468e-8fa6-1dbae96f3aa5","block_type":"box","text":"is intended to ensure appropriate standards of service and adequate capacity to meet public demand.","page_number":147,"box":{"x":117,"y":196,"width":759,"height":12}},{"id":"066f04fc-5642-4ba5-86bc-7ddf64a83051","block_type":"box","text":"Generally, prices are also regulated in the United States and in foreign countries with the intention of","page_number":147,"box":{"x":117,"y":211,"width":750,"height":12}},{"id":"5e265b01-e7ea-4533-8038-0b1a3bb3a59e","block_type":"box","text":"protecting the public while ensuring that the rate of return earned by utility companies is sufficient to","page_number":147,"box":{"x":117,"y":227,"width":744,"height":12}},{"id":"5428f138-c940-4a75-acd7-aa954d928885","block_type":"box","text":"allow them to attract capital in order to grow and continue to provide appropriate services. There can","page_number":147,"box":{"x":116,"y":242,"width":751,"height":12}},{"id":"37e830db-4a0f-4621-b6be-c3cb054b0d93","block_type":"box","text":"be no assurance that such pricing policies or rates of return will continue in the future.","page_number":147,"box":{"x":117,"y":258,"width":640,"height":12}},{"id":"36fc2f77-98be-4d8c-9f89-fbab663a7503","block_type":"box","text":"The nature of regulation of the utility industries continues to evolve both in the United States and in","page_number":147,"box":{"x":116,"y":289,"width":738,"height":12}},{"id":"065e45de-39f7-4c88-a0b4-ef6df7b48d92","block_type":"box","text":"foreign countries. In recent years, changes in regulation in the United States increasingly have allowed","page_number":147,"box":{"x":116,"y":304,"width":767,"height":12}},{"id":"e22c4012-5a14-411e-a24a-b0a00d02d943","block_type":"box","text":"utility companies to provide services and products outside their traditional geographic areas and lines","page_number":147,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"eb09722c-255d-46b8-81f1-e840307c3a55","block_type":"box","text":"of business, creating new areas of competition within the industries. In some instances, utility","page_number":147,"box":{"x":116,"y":335,"width":696,"height":12}},{"id":"43555823-5422-4d9b-bd6d-5edac0340cce","block_type":"box","text":"companies are operating on an unregulated basis. Because of trends toward deregulation and the","page_number":147,"box":{"x":116,"y":351,"width":732,"height":12}},{"id":"bf3bb654-0549-4e6f-b800-565e1f350d0b","block_type":"box","text":"evolution of independent power producers as well as new entrants to the field of telecommunications,","page_number":147,"box":{"x":116,"y":366,"width":757,"height":12}},{"id":"47588001-44ea-4c1b-9caa-c25da3948ba2","block_type":"box","text":"non-regulated providers of utility services have become a significant part of their respective industries.","page_number":147,"box":{"x":117,"y":382,"width":761,"height":12}},{"id":"0d9a8c7b-e8ba-4d8a-8372-b7c1ddfda31d","block_type":"box","text":"The Manager believes that the emergence of competition and deregulation will result in certain utility","page_number":147,"box":{"x":116,"y":397,"width":750,"height":12}},{"id":"0a00694f-02aa-49de-9bdd-f4f94e0caa95","block_type":"box","text":"companies being able to earn more than their traditional regulated rates of return, while others may be","page_number":147,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"4c1f67a3-6f5d-4549-9d28-eb12bd6da8ca","block_type":"box","text":"forced to defend their core business from increased competition and may be less profitable. Reduced","page_number":147,"box":{"x":116,"y":428,"width":757,"height":12}},{"id":"9f8a4a8d-0c1f-4be6-a0d6-7e00ddf46695","block_type":"box","text":"profitability, as well as new uses of funds (such as for expansion, operations or stock buybacks) could","page_number":147,"box":{"x":117,"y":444,"width":759,"height":12}},{"id":"698b54ac-f965-4ccf-b884-2752ce94b1d3","block_type":"box","text":"result in cuts in dividend payout rates. As deregulation allows utility companies to diversify outside of","page_number":147,"box":{"x":117,"y":459,"width":750,"height":12}},{"id":"bab1eaa1-f7e4-49b8-a6e1-042e5e576c08","block_type":"box","text":"their original geographic regions and their traditional lines of business, utilities companies may engage","page_number":147,"box":{"x":116,"y":475,"width":765,"height":12}},{"id":"bbb08cfe-8c61-4e8f-a099-b618daaf6927","block_type":"box","text":"in riskier ventures. Therefore, deregulation may eliminate restrictions on the maximum level of profits of","page_number":147,"box":{"x":117,"y":490,"width":771,"height":12}},{"id":"8aeaa0fc-8d10-4033-93d0-7a9856747299","block_type":"box","text":"certain utility companies, but may also subject these companies to greater risk of loss. The Manager","page_number":147,"box":{"x":116,"y":506,"width":749,"height":12}},{"id":"566aa8a9-db00-4647-b95c-f0d5f16eff26","block_type":"box","text":"seeks to take advantage of favorable investment opportunities that may arise from these structural","page_number":147,"box":{"x":116,"y":521,"width":735,"height":12}},{"id":"50dd476f-8d7a-4651-a377-feda8b56df96","block_type":"box","text":"changes. Of course, there can be no assurance that favorable developments will occur in the future.","page_number":147,"box":{"x":116,"y":537,"width":747,"height":12}},{"id":"0c12f2c3-b4df-4104-b391-6d83ce909806","block_type":"box","text":"Foreign utility companies are also subject to regulation, although such regulations may or may not be","page_number":147,"box":{"x":117,"y":568,"width":755,"height":12}},{"id":"e4e8bcc6-e965-425a-a84b-7db97d5e000b","block_type":"box","text":"comparable to those in the United States. Foreign utility companies may be more heavily regulated by","page_number":147,"box":{"x":116,"y":583,"width":761,"height":12}},{"id":"5e29bcfd-1bd4-4616-834e-18655b018d50","block_type":"box","text":"their respective governments than utilities in the United States and, as in the United States, generally","page_number":147,"box":{"x":116,"y":599,"width":755,"height":12}},{"id":"f19cf054-9053-4e27-b287-e62ee515f1b7","block_type":"box","text":"are required to seek government approval for rate increases. In addition, many foreign utilities use","page_number":147,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"aa28ac82-079d-4b73-96f6-bcf357a91c5e","block_type":"box","text":"fuels that may cause more pollution than those used in the United States, which may require such","page_number":147,"box":{"x":116,"y":630,"width":731,"height":12}},{"id":"d5981845-f271-4c5e-b1ac-cd6e69989ea6","block_type":"box","text":"utilities to invest in pollution control equipment to meet any proposed pollution restrictions. Foreign","page_number":147,"box":{"x":117,"y":645,"width":733,"height":12}},{"id":"2263706e-10d5-4e7b-af17-f94684e6b7d9","block_type":"box","text":"regulatory systems vary from country to country and may evolve in ways different from regulation in the","page_number":147,"box":{"x":117,"y":661,"width":765,"height":12}},{"id":"a0178d7b-0f8d-4db1-add1-bd50c7c9a999","block_type":"box","text":"United States.","page_number":147,"box":{"x":117,"y":676,"width":103,"height":10}},{"id":"daae3b38-1243-4d74-a267-f6b4ad4cae52","block_type":"box","text":"A Fund’s investment policies are designed to enable it to capitalize on evolving investment opportunities","page_number":147,"box":{"x":116,"y":707,"width":764,"height":12}},{"id":"7cb9eb90-337a-4206-9346-542a97565f59","block_type":"box","text":"throughout the world. For example, the rapid growth of certain foreign economies will necessitate","page_number":147,"box":{"x":116,"y":723,"width":712,"height":12}},{"id":"e517d531-e592-40b2-9d63-9c1ac42c50fa","block_type":"box","text":"expansion of capacity in the utility industries in those countries. Although many foreign utility companies","page_number":147,"box":{"x":116,"y":738,"width":762,"height":12}},{"id":"cb386f5e-5d6a-4182-b369-5f39207153bd","block_type":"box","text":"currently are government-owned, thereby limiting current investment opportunities for a Fund, the","page_number":147,"box":{"x":116,"y":754,"width":715,"height":12}},{"id":"5649984a-779f-4e20-9a6a-194067942aac","block_type":"box","text":"Manager believes that, in order to attract significant capital for growth, foreign governments are likely to","page_number":147,"box":{"x":117,"y":769,"width":757,"height":12}},{"id":"1bfed8c7-286b-42ac-9b9b-c503cc5364b8","block_type":"box","text":"seek global investors through the privatization of their utility industries. Privatization, which refers to the","page_number":147,"box":{"x":116,"y":785,"width":757,"height":12}},{"id":"1513b0c7-a49e-4b90-ace5-01ec54ded8c4","block_type":"box","text":"trend toward investor ownership of assets rather than government ownership, is expected to occur in","page_number":147,"box":{"x":116,"y":800,"width":739,"height":12}},{"id":"f38e3b5e-eb30-4b46-972d-dbac9c4f3d4f","block_type":"box","text":"newer, faster-growing economies and in mature economies. Of course, there is no assurance that such","page_number":147,"box":{"x":117,"y":816,"width":757,"height":12}},{"id":"5b5d3a84-ed32-427d-b8be-6996925b0332","block_type":"box","text":"favorable developments will occur or that investment opportunities in foreign markets will increase.","page_number":147,"box":{"x":116,"y":831,"width":728,"height":12}},{"id":"cdb4fd1a-a4ef-452e-960b-1c4149e4a62d","block_type":"box","text":"The revenues of domestic and foreign utility companies generally reflect the economic growth and","page_number":147,"box":{"x":116,"y":862,"width":732,"height":12}},{"id":"8c02789f-978a-4204-bc21-14862754dac1","block_type":"box","text":"development in the geographic areas in which they do business. The Manager will take into account","page_number":147,"box":{"x":116,"y":878,"width":747,"height":12}},{"id":"e012cb46-2236-492e-94ef-7974fdab4336","block_type":"box","text":"II-99","page_number":147,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"35c966e2-5059-4927-828b-8148a253fe20","block_type":"box","text":"NM1026U-6033243-147/221","page_number":147,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"3c2ed422-c3cf-4e2e-b867-184501c8aab4","block_type":"box","text":"anticipated economic growth rates and other economic developments when selecting securities of","page_number":148,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"d13b2f09-79ed-449f-8c2a-7261911d69cc","block_type":"box","text":"utility companies.","page_number":148,"box":{"x":117,"y":103,"width":132,"height":12}},{"id":"fc1aa573-116b-4c50-b1b0-e5d6f62c7d10","block_type":"box","text":"Electric.","page_number":148,"box":{"x":116,"y":134,"width":58,"height":9}},{"id":"ae47e8bc-5e09-481c-b27b-4ec4d52976e4","block_type":"box","text":"The electric utility industry consists of companies that are engaged principally in the","page_number":148,"box":{"x":176,"y":134,"width":630,"height":12}},{"id":"157f2a5c-116c-4179-8669-0b4823ada8a4","block_type":"box","text":"generation, transmission and sale of electric energy, although many also provide other energy-related","page_number":148,"box":{"x":116,"y":149,"width":760,"height":12}},{"id":"d6eb42fd-d3f3-4ef3-83b5-de4397856ee9","block_type":"box","text":"services. In the past, electric utility companies, in general, have been favorably affected by lower fuel","page_number":148,"box":{"x":116,"y":165,"width":754,"height":12}},{"id":"21d94241-5309-4ab1-847b-8d1a1b4492b9","block_type":"box","text":"and financing costs and the full or near completion of major construction programs. In addition, many","page_number":148,"box":{"x":116,"y":180,"width":754,"height":12}},{"id":"388c52d5-1cea-4490-b274-af3ea25560ac","block_type":"box","text":"of these companies have generated cash flows in excess of current operating expenses and","page_number":148,"box":{"x":116,"y":196,"width":690,"height":12}},{"id":"63ebe283-0ffc-4d97-bd11-78d82d932d45","block_type":"box","text":"construction expenditures, permitting some degree of diversification into unregulated businesses.","page_number":148,"box":{"x":116,"y":211,"width":727,"height":12}},{"id":"05e6f4b6-3fa2-4739-93e7-a891ab785b82","block_type":"box","text":"Some electric utilities have also taken advantage of the right to sell power outside of their traditional","page_number":148,"box":{"x":116,"y":227,"width":744,"height":12}},{"id":"72da7778-50cf-4754-b53f-3216765d0017","block_type":"box","text":"geographic areas. Electric utility companies have historically been subject to the risks associated with","page_number":148,"box":{"x":116,"y":242,"width":758,"height":12}},{"id":"5f1e32ee-43f6-484d-b307-6b717761256f","block_type":"box","text":"increases in fuel and other operating costs, high interest costs on borrowings needed for capital","page_number":148,"box":{"x":117,"y":258,"width":714,"height":12}},{"id":"0cb172f2-55b6-4192-88e4-004aaab021fd","block_type":"box","text":"construction programs, costs associated with compliance with environmental and safety regulations","page_number":148,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"385eda0c-b73d-4176-bfd6-ab4e31268f3d","block_type":"box","text":"and changes in the regulatory climate. As interest rates declined, many utilities refinanced high cost","page_number":148,"box":{"x":116,"y":289,"width":744,"height":12}},{"id":"9e4b2545-bb4e-44d3-8f44-a86e66de9c92","block_type":"box","text":"debt and in doing so improved their fixed charges coverage. Regulators, however, lowered allowed","page_number":148,"box":{"x":116,"y":304,"width":740,"height":12}},{"id":"854b8f5a-8d0d-436d-952c-a6f93a42887a","block_type":"box","text":"rates of return as interest rates declined and thereby caused the benefits of the rate declines to be","page_number":148,"box":{"x":117,"y":320,"width":734,"height":12}},{"id":"dedbfd1c-16e8-498c-9b2c-de687d798619","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":148,"box":{"x":116,"y":335,"width":754,"height":12}},{"id":"4023bd6e-28a6-4b05-81c1-d89eb93a027d","block_type":"box","text":"may not keep pace with the utilities’ increased costs. The construction and operation of nuclear power","page_number":148,"box":{"x":117,"y":351,"width":760,"height":12}},{"id":"56351400-2675-4642-98eb-2b6bd378f6e7","block_type":"box","text":"facilities are subject to strict scrutiny by, and evolving regulations of, the Nuclear Regulatory","page_number":148,"box":{"x":116,"y":366,"width":686,"height":12}},{"id":"cf9f8b1a-52ee-4e7b-924c-32d2582a269e","block_type":"box","text":"Commission and state agencies which have comparable jurisdiction. Strict scrutiny might result in","page_number":148,"box":{"x":117,"y":382,"width":727,"height":12}},{"id":"b590b4be-9024-49ef-9791-007c17ac8124","block_type":"box","text":"higher operating costs and higher capital expenditures, with the risk that the regulators may disallow","page_number":148,"box":{"x":117,"y":397,"width":747,"height":12}},{"id":"dd523b12-837a-49ac-af9a-9e5450879d4e","block_type":"box","text":"inclusion of these costs in rate authorizations or the risk that a company may not be permitted to","page_number":148,"box":{"x":117,"y":413,"width":719,"height":12}},{"id":"907f1b60-9814-48e2-898a-321352576859","block_type":"box","text":"operate or complete construction of a facility. In addition, operators of nuclear power plants may be","page_number":148,"box":{"x":116,"y":428,"width":740,"height":12}},{"id":"f62e55ec-ad4c-4fd7-98ac-e5760e471ecf","block_type":"box","text":"subject to significant costs for disposal of nuclear fuel and for decommissioning such plants.","page_number":148,"box":{"x":116,"y":444,"width":687,"height":12}},{"id":"2e5dac74-58c8-4ad3-889c-7e3626e3cf02","block_type":"box","text":"The rating agencies look closely at the business profile of utilities. Ratings for companies are expected","page_number":148,"box":{"x":116,"y":475,"width":766,"height":12}},{"id":"774183fb-9af2-46cd-8f86-029d4fc496ea","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":148,"box":{"x":116,"y":490,"width":711,"height":12}},{"id":"390607ef-9815-42e1-aa14-3d90e27bcd4d","block_type":"box","text":"companies that focus more on the generation of electricity may be assigned less favorable ratings as","page_number":148,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"234552a1-80fe-4d7b-8fa6-e714d64e5167","block_type":"box","text":"this business is expected to be competitive and the least regulated. On the other hand, companies that","page_number":148,"box":{"x":116,"y":521,"width":768,"height":12}},{"id":"9e8499b8-1768-49dc-b6ed-18758103ab67","block_type":"box","text":"focus on transmission and distribution, which is expected to be the least competitive and the more","page_number":148,"box":{"x":116,"y":537,"width":732,"height":12}},{"id":"682036ab-998e-4b34-85aa-2fe0d46ec3dc","block_type":"box","text":"regulated part of the business, may see higher ratings given the greater predictability of cash flow.","page_number":148,"box":{"x":117,"y":552,"width":732,"height":12}},{"id":"27fe4477-db7d-4e8b-9778-593ef1e598d9","block_type":"box","text":"A number of states are considering or have enacted deregulation proposals. The introduction of","page_number":148,"box":{"x":116,"y":583,"width":715,"height":12}},{"id":"c5a19b4c-aa59-420d-8500-65e36a6d4134","block_type":"box","text":"competition into the industry as a result of such deregulation has at times resulted in lower revenue,","page_number":148,"box":{"x":116,"y":599,"width":746,"height":12}},{"id":"406d2edc-f1c7-43e3-a548-e0bcce151b68","block_type":"box","text":"lower credit ratings, increased default risk, and lower electric utility security prices. Such increased","page_number":148,"box":{"x":117,"y":614,"width":734,"height":12}},{"id":"86f49b18-a792-4274-942a-d467f67f75a5","block_type":"box","text":"competition may also cause long-term contracts, which electric utilities previously entered into to buy","page_number":148,"box":{"x":116,"y":630,"width":752,"height":12}},{"id":"d0ca1093-f352-4271-ba3a-c20b1e8a1f99","block_type":"box","text":"power, to become “stranded assets” which have no economic value. Any loss associated with such","page_number":148,"box":{"x":117,"y":645,"width":739,"height":12}},{"id":"91b321a5-a343-46f3-a03b-e4f1ea4ae2e7","block_type":"box","text":"contracts must be absorbed by ratepayers and investors. In addition, some electric utilities have","page_number":148,"box":{"x":116,"y":661,"width":711,"height":12}},{"id":"86cf4426-a5bd-4f75-b544-8492b145e707","block_type":"box","text":"acquired electric utilities overseas to diversify, enhance earnings and gain experience in operating in a","page_number":148,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"d21ec502-8532-4e13-ab86-bcbb439d1470","block_type":"box","text":"deregulated environment. In some instances, such acquisitions have involved significant borrowings,","page_number":148,"box":{"x":116,"y":692,"width":746,"height":12}},{"id":"8854ca13-c33d-40df-a58e-0ddd7722f615","block_type":"box","text":"which have burdened the acquirer’s balance sheet. There is no assurance that current deregulation","page_number":148,"box":{"x":116,"y":707,"width":737,"height":12}},{"id":"7b61c7a2-754b-4d99-9b43-dccacf88e231","block_type":"box","text":"proposals will be adopted. However, deregulation in any form could significantly impact the electric","page_number":148,"box":{"x":117,"y":723,"width":731,"height":12}},{"id":"2d56b857-63a8-49d6-b42c-b42d51955d5e","block_type":"box","text":"utilities industry.","page_number":148,"box":{"x":117,"y":738,"width":117,"height":12}},{"id":"bfa390e6-9a1c-4c74-9ff0-fd7617a73972","block_type":"box","text":"Telecommunications.","page_number":148,"box":{"x":118,"y":769,"width":155,"height":10}},{"id":"0a685eda-9489-48c1-a77e-ec456168efc5","block_type":"box","text":"The telecommunications industry today includes both traditional telephone","page_number":148,"box":{"x":280,"y":769,"width":551,"height":12}},{"id":"42789a71-9c6e-4ed9-99bd-b0df9cd1dd63","block_type":"box","text":"companies, with a history of broad market coverage and highly regulated businesses, and cable","page_number":148,"box":{"x":116,"y":785,"width":712,"height":12}},{"id":"f7c93c69-b7e2-4c73-b83c-bb8608ecb7b3","block_type":"box","text":"companies, which began as small, lightly regulated businesses focused on limited markets. Today","page_number":148,"box":{"x":116,"y":800,"width":728,"height":12}},{"id":"103a6f52-5a30-4797-9451-35874fa272dc","block_type":"box","text":"these two historically different businesses are converging in an industry that is trending toward larger,","page_number":148,"box":{"x":116,"y":816,"width":751,"height":12}},{"id":"3532ae45-0c63-4fcb-ab95-a79cbafa8601","block_type":"box","text":"competitive national and international markets with an emphasis on deregulation. Companies that","page_number":148,"box":{"x":116,"y":831,"width":729,"height":12}},{"id":"0ae0a51c-142e-44f6-9584-4685978d2154","block_type":"box","text":"distribute telephone services and provide access to the telephone networks still comprise the greatest","page_number":148,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"80defc0c-6df2-4668-bcfc-63faeb963de7","block_type":"box","text":"portion of this segment, but non-regulated activities such as wireless telephone services, paging, data","page_number":148,"box":{"x":117,"y":862,"width":759,"height":12}},{"id":"108d3139-558f-4389-b31a-799dfbd76449","block_type":"box","text":"transmission and processing, equipment retailing, computer software and hardware and internet","page_number":148,"box":{"x":116,"y":878,"width":718,"height":12}},{"id":"ce6413fe-1fc8-48ef-90b7-37806831cdb9","block_type":"box","text":"II-100","page_number":148,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"d99f9934-be36-4a4b-becf-10c67d77d131","block_type":"box","text":"NM1026U-6033243-148/221","page_number":148,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"bb665318-91d0-4e6c-8bc7-af058b054c6d","block_type":"box","text":"services are becoming increasingly significant components as well. In particular, wireless and internet","page_number":149,"box":{"x":116,"y":87,"width":759,"height":12}},{"id":"89af6ca7-c536-4760-b3fb-b3099d575109","block_type":"box","text":"telephone services continue to gain market share at the expense of traditional telephone companies.","page_number":149,"box":{"x":116,"y":102,"width":752,"height":13}},{"id":"6e2e55b3-ea7b-4649-906c-03d8ba0fee52","block_type":"box","text":"The presence of unregulated companies in this industry and the entry of traditional telephone","page_number":149,"box":{"x":116,"y":118,"width":696,"height":12}},{"id":"c378e43e-130b-4c65-bfeb-ddbfa8c36844","block_type":"box","text":"companies into unregulated or less regulated businesses provide significant investment opportunities","page_number":149,"box":{"x":116,"y":134,"width":755,"height":12}},{"id":"ddf66340-2682-4b60-b1eb-9c8892795a2f","block_type":"box","text":"with companies that may increase their earnings at faster rates than had been allowed in traditional","page_number":149,"box":{"x":116,"y":149,"width":742,"height":12}},{"id":"bda3cd96-ca70-4720-83e4-93aa1eb19856","block_type":"box","text":"regulated businesses. Still, increasing competition, technological innovations and other structural","page_number":149,"box":{"x":117,"y":165,"width":722,"height":12}},{"id":"45a5e2ff-e213-41a5-8a05-d0bf5dbf107e","block_type":"box","text":"changes could adversely affect the profitability of such utilities and the growth rate of their dividends.","page_number":149,"box":{"x":116,"y":180,"width":750,"height":12}},{"id":"143f992f-50fb-4440-8c20-54c043f81ef8","block_type":"box","text":"Given mergers and proposed legislation and enforcement changes, it is likely that both traditional","page_number":149,"box":{"x":117,"y":196,"width":725,"height":12}},{"id":"93ed686a-a72a-404d-94b8-74970e8c0cd8","block_type":"box","text":"telephone companies and cable companies will continue to provide an expanding range of utility","page_number":149,"box":{"x":116,"y":211,"width":718,"height":12}},{"id":"3bba4910-02c8-4524-8a57-d3d7e7b91749","block_type":"box","text":"services to both residential, corporate and governmental customers.","page_number":149,"box":{"x":116,"y":227,"width":511,"height":12}},{"id":"bcadb7d7-ef1c-490a-ac61-5b070274293a","block_type":"box","text":"Gas.","page_number":149,"box":{"x":117,"y":261,"width":33,"height":9}},{"id":"eb2fed4d-5346-43a7-9ad2-11bd59964fd7","block_type":"box","text":"Gas transmission companies and gas distribution companies are undergoing significant changes.","page_number":149,"box":{"x":151,"y":261,"width":733,"height":12}},{"id":"24d44230-23a1-4843-a2df-4da700467ef8","block_type":"box","text":"In the United States, interstate transmission companies are regulated by the Federal Energy","page_number":149,"box":{"x":117,"y":276,"width":689,"height":12}},{"id":"2f569a0e-22e8-4171-9c69-bbf293b21842","block_type":"box","text":"Regulatory Commission, which is reducing its regulation of the industry. Many companies have","page_number":149,"box":{"x":117,"y":292,"width":709,"height":12}},{"id":"686d0313-976d-4ec0-beb0-1c6c8cfb73f3","block_type":"box","text":"diversified into oil and gas exploration and development, making returns more sensitive to energy","page_number":149,"box":{"x":116,"y":307,"width":728,"height":12}},{"id":"979129af-dc03-4cb3-bfa4-4973dd3d069b","block_type":"box","text":"prices. In the recent decade, gas utility companies have been adversely affected by disruptions in the","page_number":149,"box":{"x":117,"y":323,"width":756,"height":12}},{"id":"447fe843-f565-4475-bf6a-c45b8f8ba81f","block_type":"box","text":"oil industry and have also been affected by increased concentration and competition. In the opinion of","page_number":149,"box":{"x":116,"y":338,"width":759,"height":12}},{"id":"c625a65e-0976-4fce-bbc7-b76b2ce6cb81","block_type":"box","text":"the Manager, however, environmental considerations could improve the gas industry outlook in the","page_number":149,"box":{"x":116,"y":354,"width":738,"height":12}},{"id":"bc847a6f-d770-45c2-87a8-b31c4d22dd32","block_type":"box","text":"future. For example, natural gas is the cleanest of the hydrocarbon fuels, and this may result in","page_number":149,"box":{"x":116,"y":369,"width":709,"height":12}},{"id":"ca23e3b3-f6c2-4a7b-8a85-ab34e6f1b89f","block_type":"box","text":"incremental shifts in fuel consumption toward natural gas and away from oil and coal, even for","page_number":149,"box":{"x":117,"y":385,"width":702,"height":12}},{"id":"04e0c492-cadd-4bb2-96a9-094eb5e7f931","block_type":"box","text":"electricity generation. However, technological or regulatory changes within the industry may delay or","page_number":149,"box":{"x":116,"y":400,"width":750,"height":12}},{"id":"6ec31623-f57c-4673-b652-10a273bb6f6a","block_type":"box","text":"prevent this result.","page_number":149,"box":{"x":117,"y":416,"width":141,"height":12}},{"id":"26d2f067-7f98-48e5-b479-a53890c55a90","block_type":"box","text":"Water.","page_number":149,"box":{"x":118,"y":450,"width":46,"height":9}},{"id":"dbe219ab-4b20-4c49-a481-506ae9bbe04d","block_type":"box","text":"Water supply utilities are companies that collect, purify, distribute and sell water. In the United","page_number":149,"box":{"x":165,"y":450,"width":706,"height":12}},{"id":"6a1d2c54-6aff-444f-9b8e-b0d6b29de93f","block_type":"box","text":"States and around the world the industry is highly fragmented because most of the supplies are owned","page_number":149,"box":{"x":116,"y":465,"width":768,"height":12}},{"id":"630a5e31-6f27-4280-a581-798f7932a20c","block_type":"box","text":"by local authorities. Companies in this industry are generally mature and are experiencing little or no","page_number":149,"box":{"x":117,"y":481,"width":748,"height":12}},{"id":"70c52d62-6563-4935-bd91-ecd8c2ebfaf8","block_type":"box","text":"per capita volume growth. In the opinion of the Manager, there may be opportunities for certain","page_number":149,"box":{"x":117,"y":496,"width":708,"height":12}},{"id":"a2214546-3c36-4f65-8237-d4f6ac77b3c9","block_type":"box","text":"companies to acquire other water utility companies and for foreign acquisition of domestic companies.","page_number":149,"box":{"x":116,"y":512,"width":761,"height":12}},{"id":"d973dd14-7053-4dac-a29a-57483138c70e","block_type":"box","text":"The Manager believes that favorable investment opportunities may result from consolidation of this","page_number":149,"box":{"x":116,"y":527,"width":738,"height":12}},{"id":"1d6e2291-2f3f-495d-8c40-985e3af1d6bb","block_type":"box","text":"segment. As with other utilities, however, increased regulation, increased costs and potential","page_number":149,"box":{"x":116,"y":543,"width":693,"height":12}},{"id":"4639a92a-c50a-4283-a398-7446e1b08136","block_type":"box","text":"disruptions in supply may adversely affect investments in water supply utilities.","page_number":149,"box":{"x":116,"y":558,"width":588,"height":12}},{"id":"9f137900-4266-4ca3-8a1d-06fd3e47f2bd","block_type":"box","text":"Utility Industries Generally.","page_number":149,"box":{"x":117,"y":592,"width":197,"height":13}},{"id":"5b976b80-cb9c-4818-91a8-c88c98830c93","block_type":"box","text":"There can be no assurance that the positive developments noted above,","page_number":149,"box":{"x":316,"y":593,"width":548,"height":11}},{"id":"723ff08b-99ee-45d4-ab47-d66c853d4692","block_type":"box","text":"including those relating to privatization and changing regulation, will occur or that risk factors other than","page_number":149,"box":{"x":117,"y":608,"width":771,"height":12}},{"id":"4e49ec6e-f167-41a0-9b6d-12e412b3c8e7","block_type":"box","text":"those noted above will not develop in the future.","page_number":149,"box":{"x":116,"y":623,"width":361,"height":12}},{"id":"92448eed-dd68-4d1d-a7bd-ed8efb828e83","block_type":"box","text":"When-Issued Securities, Delayed Delivery Securities and Forward Commitments.","page_number":149,"box":{"x":118,"y":658,"width":643,"height":12}},{"id":"701feefd-0b7e-4f9b-8b22-f284236be54e","block_type":"box","text":"A Fund may","page_number":149,"box":{"x":762,"y":658,"width":100,"height":12}},{"id":"4184667b-5709-4c6b-8a80-6a0f895ee82f","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":149,"box":{"x":117,"y":673,"width":708,"height":12}},{"id":"3d60c6bd-1dc7-4c9b-a916-922afb51892d","block_type":"box","text":"purchase or sell securities on a delayed delivery basis or through a forward commitment (including on","page_number":149,"box":{"x":117,"y":689,"width":753,"height":12}},{"id":"d812e1c1-1e69-462e-b146-65e611366777","block_type":"box","text":"a TBA (to be announced) basis). These transactions involve the purchase or sale of securities by a","page_number":149,"box":{"x":116,"y":704,"width":734,"height":12}},{"id":"68abf98d-70d1-4631-b878-5f59498aaf02","block_type":"box","text":"Fund at an established price with payment and delivery taking place in the future. The Fund enters into","page_number":149,"box":{"x":117,"y":720,"width":762,"height":12}},{"id":"848bd698-e41f-431b-8768-81fd06ae5093","block_type":"box","text":"these transactions to obtain what is considered an advantageous price to the Fund at the time of","page_number":149,"box":{"x":116,"y":735,"width":717,"height":12}},{"id":"31970ddc-43f3-451f-9674-b295a793c0af","block_type":"box","text":"entering into the transaction.","page_number":149,"box":{"x":116,"y":751,"width":211,"height":12}},{"id":"8793cfec-7edb-4484-a805-6ca0b3b2006a","block_type":"box","text":"Pursuant to recommendations of the Treasury Market Practices Group, which is sponsored by the","page_number":149,"box":{"x":117,"y":785,"width":725,"height":12}},{"id":"5be55b35-1db9-4d36-91ef-90f6a1d968cc","block_type":"box","text":"Federal Reserve Bank of New York, a Fund or its counterparty generally will be required to post","page_number":149,"box":{"x":117,"y":800,"width":710,"height":12}},{"id":"26c6ab90-084d-4dd5-bdb5-7bb0b931a095","block_type":"box","text":"collateral when entering into certain forward-settling transactions, including without limitation TBA","page_number":149,"box":{"x":116,"y":816,"width":722,"height":12}},{"id":"8c61f607-cfd3-4a42-9af5-62fd1d6efd09","block_type":"box","text":"transactions. FINRA rules have also been implemented that include mandatory margin requirements","page_number":149,"box":{"x":116,"y":831,"width":750,"height":12}},{"id":"80c7c966-d676-44f3-a648-34bdd82006db","block_type":"box","text":"for the TBA market with limited exceptions. The collateralization of TBA trades is intended to mitigate","page_number":149,"box":{"x":116,"y":847,"width":754,"height":12}},{"id":"469f5f00-625b-4253-a936-114d58af644f","block_type":"box","text":"counterparty credit risk between trade and settlement, but could increase the cost of TBA transactions","page_number":149,"box":{"x":116,"y":862,"width":763,"height":12}},{"id":"fcf0fd46-ed44-4d22-95de-d8b73450ed38","block_type":"box","text":"and impose added operational complexity.","page_number":149,"box":{"x":116,"y":878,"width":320,"height":12}},{"id":"302c1614-6a28-4fb6-af1d-160ccbaa5263","block_type":"box","text":"II-101","page_number":149,"box":{"x":480,"y":909,"width":38,"height":9}},{"id":"29ba2364-c4ab-43cb-adb6-97464d032420","block_type":"box","text":"NM1026U-6033243-149/221","page_number":149,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"83013c50-87ac-4f8e-96fc-275a0e708ddf","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":150,"box":{"x":116,"y":87,"width":754,"height":12}},{"id":"e8dc8d78-a99e-46dc-bd4e-182876e59652","block_type":"box","text":"security purchased or sold on a delayed delivery basis or through a forward commitment will be","page_number":150,"box":{"x":116,"y":102,"width":713,"height":13}},{"id":"d3b92a19-97f5-4747-8d5c-36470be0a541","block_type":"box","text":"delivered. Also, the value of securities in these transactions on the delivery date may be more or less","page_number":150,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"3231cb8d-ba3f-43a9-9346-a261abd2ab90","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":150,"box":{"x":116,"y":134,"width":766,"height":12}},{"id":"dbf2f0e5-8aef-4ed6-baf4-fb3cb74e7ee0","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":150,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"e3613f90-4dd7-4186-b8c0-e376b1ba5b48","block_type":"box","text":"security appreciates above the sale price during the commitment period.","page_number":150,"box":{"x":116,"y":165,"width":542,"height":12}},{"id":"38727978-acb9-4e7c-a27b-c55ca6e4add3","block_type":"box","text":"If deemed advisable as a matter of investment strategy, a Fund may dispose of or renegotiate a","page_number":150,"box":{"x":117,"y":198,"width":715,"height":12}},{"id":"4cbd5be2-0fc4-46c8-8e89-f504e89873a8","block_type":"box","text":"commitment after it has been entered into, and may sell securities it has committed to purchase before","page_number":150,"box":{"x":116,"y":214,"width":767,"height":12}},{"id":"6af2a963-89f5-4865-b7d6-6822e39d73b7","block_type":"box","text":"those securities are delivered to the Fund on the settlement date. In these cases the Fund may realize","page_number":150,"box":{"x":116,"y":229,"width":764,"height":12}},{"id":"92b729e7-544b-404d-8534-6c10cce65402","block_type":"box","text":"a taxable capital gain or loss.","page_number":150,"box":{"x":116,"y":245,"width":221,"height":12}},{"id":"762e8abd-5014-4535-914f-d1541e609e28","block_type":"box","text":"When a Fund engages in when-issued, TBA or forward commitment transactions, it relies on the other","page_number":150,"box":{"x":116,"y":278,"width":763,"height":12}},{"id":"d8e84bf2-ac54-4641-8524-5afeacfac606","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":150,"box":{"x":117,"y":294,"width":760,"height":12}},{"id":"ed073a79-7827-494a-a0cb-9e0e691d9d8f","block_type":"box","text":"or missing an opportunity to obtain a price considered to be advantageous.","page_number":150,"box":{"x":116,"y":309,"width":561,"height":12}},{"id":"6fd1e4e6-c7e3-4af6-bd6b-1acea9f4140a","block_type":"box","text":"The market value of the securities underlying a commitment to purchase securities, and any","page_number":150,"box":{"x":116,"y":343,"width":688,"height":12}},{"id":"5d3a7c7a-fe60-44be-9304-fda788584534","block_type":"box","text":"subsequent fluctuations in their market value, is taken into account when determining the market value","page_number":150,"box":{"x":116,"y":358,"width":767,"height":12}},{"id":"fb949cf0-db8d-4a6d-82c5-5496f0f1b40f","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":150,"box":{"x":116,"y":374,"width":732,"height":12}},{"id":"afd8164e-de18-4f69-9824-5227b3b30065","block_type":"box","text":"interest on the securities it has committed to purchase until they are paid for and delivered on the","page_number":150,"box":{"x":117,"y":389,"width":725,"height":12}},{"id":"61896e7a-531f-4311-93bb-029e202e4621","block_type":"box","text":"settlement date.","page_number":150,"box":{"x":116,"y":405,"width":124,"height":9}},{"id":"f4aa40b6-68c1-4c84-ae27-0ab77b11066d","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward","page_number":150,"box":{"x":117,"y":438,"width":740,"height":12}},{"id":"4b97daab-d674-4581-8bc5-d80e343fd686","block_type":"box","text":"settling securities (e.g., firm and standby commitments, including TBA commitments, and dollar rolls)","page_number":150,"box":{"x":116,"y":454,"width":753,"height":12}},{"id":"dd75dfb9-608c-430d-b63d-9c36b82945c3","block_type":"box","text":"and non-standard settlement cycle securities notwithstanding the limitation on the issuance of senior","page_number":150,"box":{"x":116,"y":469,"width":750,"height":12}},{"id":"10a43af9-4e45-4171-972b-b1647fd5d4d2","block_type":"box","text":"securities in Section 18 of the Investment Company Act, provided that the Fund intends to physically","page_number":150,"box":{"x":116,"y":485,"width":750,"height":12}},{"id":"d3b49e38-fbca-4803-ada0-68e16c1fb4eb","block_type":"box","text":"settle the transaction and the transaction will settle within 35 days of its trade date (the “Delayed","page_number":150,"box":{"x":116,"y":500,"width":719,"height":12}},{"id":"84c3c9ef-93f6-4607-a218-6d626b9f3d3c","block_type":"box","text":"Settlement Securities Provision”). If a when-issued, forward-settling or non-standard settlement cycle","page_number":150,"box":{"x":116,"y":516,"width":754,"height":12}},{"id":"577e0ee1-b76b-49e8-a39d-871150549f09","block_type":"box","text":"security does not satisfy the Delayed-Settlement Securities Provision, then it is treated as a Derivatives","page_number":150,"box":{"x":116,"y":531,"width":771,"height":12}},{"id":"437b5ace-f4af-4555-a7fc-af5847ff6415","block_type":"box","text":"Transaction under Rule 18f-4. See “— Derivatives — Regulation of Derivatives — Rule 18f-4 under the","page_number":150,"box":{"x":116,"y":547,"width":770,"height":12}},{"id":"59a8729d-2729-4447-ab39-a58f1f7c849b","block_type":"box","text":"Investment Company Act” above.","page_number":150,"box":{"x":117,"y":562,"width":252,"height":12}},{"id":"a074b87f-7a94-4e54-b5d1-6633e2e81096","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":150,"box":{"x":117,"y":596,"width":761,"height":12}},{"id":"11883465-60ad-4b77-8d38-429b5f3d13c9","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many agreements with","page_number":150,"box":{"x":116,"y":611,"width":716,"height":12}},{"id":"6b0c65ab-ad83-4706-a213-6ab8495ecd92","block_type":"box","text":"respect to when-issued, TBA and forward commitment transactions, terms that delay or restrict the","page_number":150,"box":{"x":117,"y":627,"width":736,"height":12}},{"id":"81843dc7-20f8-4c73-b699-c43a6a87f8bf","block_type":"box","text":"rights of counterparties, such as a Fund, to terminate such agreements, foreclose upon collateral,","page_number":150,"box":{"x":117,"y":642,"width":728,"height":12}},{"id":"eba6e71c-f110-40b5-bd45-c3b7ec1478dc","block_type":"box","text":"exercise other default rights or restrict transfers of credit support in the event that the counterparty and/","page_number":150,"box":{"x":116,"y":658,"width":766,"height":12}},{"id":"852cb9b5-cc92-41ae-8588-f0c98ccc1034","block_type":"box","text":"or its affiliates are subject to certain types of resolution or insolvency proceedings. It is possible that","page_number":150,"box":{"x":116,"y":673,"width":739,"height":12}},{"id":"489e3fdb-2a0a-4396-aec3-48465c0c375d","block_type":"box","text":"these requirements, as well as potential additional government regulation and other developments in","page_number":150,"box":{"x":116,"y":689,"width":746,"height":12}},{"id":"e4e3fb45-e26d-41ff-869d-722b5f75c7b0","block_type":"box","text":"the market, could adversely affect a Fund’s ability to terminate existing agreements with respect to","page_number":150,"box":{"x":116,"y":704,"width":730,"height":12}},{"id":"93b62f0c-5dd2-4fd8-b80c-d6cc6517599b","block_type":"box","text":"these transactions or to realize amounts to be received under such agreements.","page_number":150,"box":{"x":116,"y":720,"width":593,"height":12}},{"id":"eeb73529-b914-4313-b00f-0bfcc6e74063","block_type":"box","text":"Yields and Ratings.","page_number":150,"box":{"x":118,"y":753,"width":152,"height":12}},{"id":"411912ad-4987-4d28-8fda-ff88c2d7f30b","block_type":"box","text":"The yields on certain obligations are dependent on a variety of factors, including","page_number":150,"box":{"x":276,"y":753,"width":594,"height":12}},{"id":"175410c6-0d3b-4b53-8a1f-82c337005424","block_type":"box","text":"general market conditions, conditions in the particular market for the obligation, the financial condition","page_number":150,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"dbc408eb-171b-4289-a2a9-7cf9278dadcf","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":150,"box":{"x":116,"y":784,"width":732,"height":12}},{"id":"32c0241d-096d-4955-b522-b8dd9966fb07","block_type":"box","text":"ratings of Moody’s, Fitch and S&P represent their respective opinions as to the quality of the","page_number":150,"box":{"x":117,"y":800,"width":683,"height":12}},{"id":"04e8ff94-060a-4e3d-8b68-69e9ae191a33","block_type":"box","text":"obligations they undertake to rate. Ratings, however, are general and are not absolute standards of","page_number":150,"box":{"x":116,"y":815,"width":739,"height":12}},{"id":"cc8b2d7f-47fa-474d-956f-4858fc884bfb","block_type":"box","text":"quality. Consequently, obligations with the same rating, maturity and interest rate may have different","page_number":150,"box":{"x":116,"y":831,"width":749,"height":12}},{"id":"d5cd8aee-be1a-428a-a4a9-52307adcbe5f","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":150,"box":{"x":117,"y":846,"width":769,"height":12}},{"id":"bed84774-aab3-4774-94e9-bb9aeb820205","block_type":"box","text":"Manager or sub-adviser will consider such an event in determining whether the Fund should continue","page_number":150,"box":{"x":117,"y":862,"width":755,"height":12}},{"id":"6e4bcf94-c88b-4e6c-b7b5-3e6001e39b94","block_type":"box","text":"to hold the security.","page_number":150,"box":{"x":116,"y":877,"width":150,"height":12}},{"id":"dc77c217-c02a-4a07-9c87-4b6da9541daa","block_type":"box","text":"II-102","page_number":150,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"fcdf6bd0-1a6d-43fc-9269-3cf4ee4bdee7","block_type":"box","text":"NM1026U-6033243-150/221","page_number":150,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"85780dcc-7ef9-42a6-9b4b-2f76ec03b404","block_type":"box","text":"Zero Coupon Securities.","page_number":151,"box":{"x":116,"y":87,"width":193,"height":12}},{"id":"3dc5c7cd-b6d6-4868-b5c1-1440995a2260","block_type":"box","text":"Zero coupon securities are securities that are sold at a discount to par value","page_number":151,"box":{"x":310,"y":87,"width":575,"height":12}},{"id":"fdc54d7a-7b8e-4cbd-a53f-8a3863a05f70","block_type":"box","text":"and do not pay interest during the life of the security. The discount approximates the total amount of","page_number":151,"box":{"x":116,"y":102,"width":747,"height":13}},{"id":"ee75db41-1ccc-4fc5-81a1-f4b2a86de71d","block_type":"box","text":"interest the security will accrue and compound over the period until maturity at a rate of interest","page_number":151,"box":{"x":117,"y":118,"width":711,"height":12}},{"id":"560f34d2-cd45-497c-a6a0-fcceda07f708","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":151,"box":{"x":117,"y":134,"width":741,"height":12}},{"id":"ec594ab0-8663-4d2d-80b5-17e1b0927fcc","block_type":"box","text":"coupon security is entitled to receive the par value of the security.","page_number":151,"box":{"x":116,"y":149,"width":492,"height":12}},{"id":"e2a1c6d7-be87-47f5-b4dc-00f7489dd17f","block_type":"box","text":"While interest payments are not made on such securities, holders of such securities are deemed to","page_number":151,"box":{"x":116,"y":180,"width":740,"height":12}},{"id":"423c543f-e6de-4a0c-9f33-b2c8d1e61712","block_type":"box","text":"have received income (“phantom income”) annually, notwithstanding that cash may not be received","page_number":151,"box":{"x":117,"y":196,"width":742,"height":12}},{"id":"9cf22278-1e82-45f7-a5ba-a18bde4673e7","block_type":"box","text":"currently. The effect of owning instruments that do not make current interest payments is that a fixed","page_number":151,"box":{"x":116,"y":211,"width":751,"height":12}},{"id":"acfa6ca3-a0f8-402e-ba5d-7216ae9fc517","block_type":"box","text":"yield is earned not only on the original investment but also, in effect, on all discount accretion during","page_number":151,"box":{"x":116,"y":227,"width":746,"height":12}},{"id":"c50407f5-0575-4475-aa7f-1861ce78e818","block_type":"box","text":"the life of the obligations. This implicit reinvestment of earnings at a fixed rate eliminates the risk of","page_number":151,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"6e1ff4a3-8a93-4a6f-a8be-949a2f1dd835","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":151,"box":{"x":117,"y":258,"width":757,"height":12}},{"id":"224d94df-c9d4-4882-9500-b0736fc8931d","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":151,"box":{"x":116,"y":273,"width":764,"height":12}},{"id":"a48d5274-e47e-4dee-8c2a-50093230bc83","block_type":"box","text":"some of these securities may be subject to substantially greater price fluctuations during periods of","page_number":151,"box":{"x":116,"y":289,"width":739,"height":12}},{"id":"5a0aa0c7-6ffe-43a0-885a-3078743e8042","block_type":"box","text":"changing market interest rates than are comparable securities that pay interest currently. Longer term","page_number":151,"box":{"x":116,"y":304,"width":760,"height":12}},{"id":"84402153-6661-4d98-8f4a-b009664ba918","block_type":"box","text":"zero coupon bonds are more exposed to interest rate risk than shorter term zero coupon bonds. These","page_number":151,"box":{"x":116,"y":320,"width":768,"height":12}},{"id":"de3aae4c-d688-4437-b863-81e53910e6f2","block_type":"box","text":"investments benefit the issuer by mitigating its need for cash to meet debt service, but also require a","page_number":151,"box":{"x":117,"y":335,"width":749,"height":12}},{"id":"c355d533-3e7c-417a-8ae4-66d0ce81a56a","block_type":"box","text":"higher rate of return to attract investors who are willing to defer receipt of cash.","page_number":151,"box":{"x":117,"y":351,"width":589,"height":12}},{"id":"945f7cdb-9a96-40ac-8ec2-e17290f4df29","block_type":"box","text":"A Fund accrues income with respect to these securities for U.S. federal income tax and accounting","page_number":151,"box":{"x":116,"y":382,"width":739,"height":12}},{"id":"5a7800c3-ca4f-4a88-8b0a-31f363e7a620","block_type":"box","text":"purposes prior to the receipt of cash payments. Zero coupon securities may be subject to greater","page_number":151,"box":{"x":117,"y":397,"width":724,"height":12}},{"id":"9b83953b-56b3-407e-a79e-ea293f368ec1","block_type":"box","text":"fluctuation in value and less liquidity in the event of adverse market conditions than comparably rated","page_number":151,"box":{"x":116,"y":413,"width":756,"height":12}},{"id":"19a1682a-d6cf-4c30-b073-f14901cc3717","block_type":"box","text":"securities that pay cash interest at regular intervals.","page_number":151,"box":{"x":116,"y":428,"width":388,"height":12}},{"id":"285151eb-6ce4-4c47-85a6-82d201dcf2b4","block_type":"box","text":"Further, to maintain its qualification for pass-through treatment under the U.S. federal tax laws, a Fund","page_number":151,"box":{"x":117,"y":459,"width":764,"height":12}},{"id":"5d823a2d-291d-4eaf-ad89-c8aff53a8890","block_type":"box","text":"is required to distribute income to its shareholders and, consequently, may have to dispose of other,","page_number":151,"box":{"x":117,"y":475,"width":746,"height":12}},{"id":"c22fbbc4-b619-457f-af7b-dd894f0ded44","block_type":"box","text":"more liquid portfolio securities under disadvantageous circumstances or may have to leverage itself by","page_number":151,"box":{"x":117,"y":490,"width":765,"height":12}},{"id":"8e9250c3-cbc4-43f7-bde4-6d7922cba5e2","block_type":"box","text":"borrowing in order to generate the cash to satisfy these distributions. The required distributions may","page_number":151,"box":{"x":117,"y":506,"width":744,"height":12}},{"id":"a34e02fb-d9b8-4bc1-8165-01ea1de6e591","block_type":"box","text":"result in an increase in a Fund’s exposure to zero coupon securities.","page_number":151,"box":{"x":117,"y":521,"width":511,"height":12}},{"id":"7decbc00-4e10-4e83-a07e-87428efc1303","block_type":"box","text":"In addition to the above-described risks, there are certain other risks related to investing in zero","page_number":151,"box":{"x":117,"y":552,"width":712,"height":12}},{"id":"36ab2e09-201b-4dd7-b956-3d84cd375702","block_type":"box","text":"coupon securities. During a period of severe market conditions, the market for such securities may","page_number":151,"box":{"x":116,"y":568,"width":736,"height":12}},{"id":"0ab1b820-6862-428d-be08-49063ecc9306","block_type":"box","text":"become even less liquid. In addition, as these securities do not pay cash interest, a Fund’s investment","page_number":151,"box":{"x":117,"y":583,"width":762,"height":12}},{"id":"5a7340bf-02a5-46e7-b33b-163b74edb420","block_type":"box","text":"exposure to these securities and their risks, including credit risk, will increase during the time these","page_number":151,"box":{"x":116,"y":599,"width":739,"height":12}},{"id":"500d6dc0-2763-42ae-adf1-37261b123e7b","block_type":"box","text":"securities are held in the Fund’s portfolio.","page_number":151,"box":{"x":116,"y":614,"width":311,"height":12}},{"id":"006afb8d-1bef-471b-90ab-e374be5cf008","block_type":"box","text":"Suitability. (All Funds)","page_number":151,"box":{"x":117,"y":645,"width":181,"height":12}},{"id":"d8f94dd8-ea64-416a-b49c-e4849b175f9e","block_type":"box","text":"The economic benefit of an investment in any Fund depends upon many factors beyond the control of","page_number":151,"box":{"x":116,"y":668,"width":756,"height":12}},{"id":"8778fd82-6411-45b9-a74f-4b8755a9db42","block_type":"box","text":"the Fund, the Manager and its affiliates. Each Fund should be considered a vehicle for diversification","page_number":151,"box":{"x":116,"y":684,"width":747,"height":12}},{"id":"8fd327c3-ca1b-4641-9796-0b4e43a768e0","block_type":"box","text":"and not as a balanced investment program. The suitability for any particular investor of a purchase of","page_number":151,"box":{"x":116,"y":699,"width":751,"height":13}},{"id":"181d214c-50ca-4061-b493-439a97cf21dd","block_type":"box","text":"shares in a Fund will depend upon, among other things, such investor’s investment objectives and","page_number":151,"box":{"x":116,"y":715,"width":727,"height":12}},{"id":"f97695d2-e942-4423-b977-2edcb4f5a048","block_type":"box","text":"such investor’s ability to accept the risks associated with investing in securities, including the risk of","page_number":151,"box":{"x":116,"y":730,"width":737,"height":13}},{"id":"2e2218d8-107b-4cdf-9d9f-9653539c0117","block_type":"box","text":"loss of principal.","page_number":151,"box":{"x":117,"y":746,"width":118,"height":12}},{"id":"066bb42f-6334-491b-bc5f-c1e696252e34","block_type":"box","text":"Investment Restrictions. (All Funds)","page_number":151,"box":{"x":116,"y":777,"width":287,"height":12}},{"id":"eea68898-4485-4547-baa3-d0740c33706a","block_type":"box","text":"See “Investment Restrictions” or “Investment Policies,” as applicable in each Fund’s SAI for the","page_number":151,"box":{"x":116,"y":800,"width":707,"height":12}},{"id":"84c7c3c9-7148-4495-a267-05cc716ddc39","block_type":"box","text":"specific fundamental and non-fundamental investment restrictions adopted by each Fund. In addition to","page_number":151,"box":{"x":116,"y":816,"width":766,"height":12}},{"id":"6fd63673-f4c6-4f0c-b3c7-39d201665cfc","block_type":"box","text":"those investment restrictions, each Fund is also subject to the restrictions discussed below.","page_number":151,"box":{"x":116,"y":831,"width":683,"height":12}},{"id":"a9e37e80-54f1-4f35-848d-a3867b00e866","block_type":"box","text":"Each Fund’s investments will be limited in order to","page_number":151,"box":{"x":117,"y":862,"width":376,"height":10}},{"id":"a37cfe27-bded-40b9-8d95-2ad9202a0a7f","block_type":"box","text":"allow the Fund to qualify as a “regulated investment","page_number":151,"box":{"x":494,"y":862,"width":389,"height":12}},{"id":"d44c7119-b8d6-4026-b868-7a9fb1b8cd8c","block_type":"box","text":"company” for purposes of the Code. See “Dividends and Taxes — Taxes” or “Taxes.” To qualify,","page_number":151,"box":{"x":116,"y":878,"width":721,"height":12}},{"id":"efebe5b9-0510-41d5-afb9-764e958810ad","block_type":"box","text":"II-103","page_number":151,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"5cd11537-3121-487a-8299-eb7bcf4b6da9","block_type":"box","text":"NM1026U-6033243-151/221","page_number":151,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"83c5e5f2-fa0f-44e4-9069-d37219d83e8a","block_type":"box","text":"among other requirements, each Fund will limit its investments so that, at the close of each quarter of","page_number":152,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"cf5130d6-7b0f-4d8c-ba6f-2cafdca96046","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":152,"box":{"x":116,"y":102,"width":741,"height":13}},{"id":"2ec83741-9d86-4f93-b4b4-fc6b5934c433","block_type":"box","text":"securities of other regulated investment companies, U.S. Government Securities and other securities,","page_number":152,"box":{"x":116,"y":118,"width":759,"height":12}},{"id":"5d2c924b-c1c7-4268-a0bc-f6a6cbb33ef0","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":152,"box":{"x":116,"y":134,"width":756,"height":12}},{"id":"4ae38843-2815-486a-97f8-38cf1ddaa2bc","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":152,"box":{"x":116,"y":149,"width":751,"height":12}},{"id":"1c64fddd-8557-45a2-95d7-82dc66cee91f","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":152,"box":{"x":116,"y":165,"width":718,"height":12}},{"id":"f0c9679b-00cf-40cc-a39b-9708a33929c6","block_type":"box","text":"Government Securities or securities of other regulated investment companies) of any one issuer, any","page_number":152,"box":{"x":117,"y":180,"width":754,"height":12}},{"id":"b8e0d214-8e20-4897-a850-a63ffeefca16","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":152,"box":{"x":116,"y":196,"width":726,"height":12}},{"id":"13f94c15-f6c7-4043-b232-b4287fa294e4","block_type":"box","text":"similar trades or businesses or related trades or businesses or in the securities of one or more qualified","page_number":152,"box":{"x":116,"y":211,"width":772,"height":12}},{"id":"2ec2e55e-9541-469c-9542-744c8deba234","block_type":"box","text":"publicly traded partnerships (","page_number":152,"box":{"x":117,"y":227,"width":214,"height":12}},{"id":"10440eb0-eb8f-4d4f-b486-9e410e709af0","block_type":"box","text":"i.e.","page_number":152,"box":{"x":332,"y":227,"width":21,"height":9}},{"id":"970132e8-67a7-4fe4-a19d-df5909a25d8e","block_type":"box","text":", partnerships that are traded on an established securities market or","page_number":152,"box":{"x":356,"y":227,"width":507,"height":11}},{"id":"da855797-5f1e-4e9a-b6f3-760c818b8193","block_type":"box","text":"tradable on a secondary market, other than partnerships that derive 90% of their income from interest,","page_number":152,"box":{"x":116,"y":242,"width":764,"height":12}},{"id":"d71e7304-49ab-4a6b-aad0-33bc38bb9e6d","block_type":"box","text":"dividends, capital gains and other traditionally permitted mutual fund income). For purposes of this","page_number":152,"box":{"x":116,"y":258,"width":734,"height":12}},{"id":"8bd957fc-79d5-4cdb-ae1c-e534248182b4","block_type":"box","text":"restriction, the Municipal Funds generally will regard each state and each of its political subdivisions,","page_number":152,"box":{"x":117,"y":273,"width":749,"height":12}},{"id":"eeed454d-342e-47ee-93c6-49cd298664a7","block_type":"box","text":"agencies or instrumentalities and each multi-state agency of which the state is a member as a","page_number":152,"box":{"x":116,"y":289,"width":703,"height":12}},{"id":"883d44b0-737e-48d9-9a61-fe2f45340c75","block_type":"box","text":"separate issuer. Each public authority that issues securities on behalf of a private entity generally will","page_number":152,"box":{"x":116,"y":304,"width":754,"height":12}},{"id":"25344760-b4c7-4d38-a65f-8a0e0a266c91","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":152,"box":{"x":116,"y":320,"width":731,"height":12}},{"id":"886c7337-018b-44f0-a2ad-84a22218654f","block_type":"box","text":"revenues of a non-government entity, then the entity with the ultimate responsibility for the payment of","page_number":152,"box":{"x":117,"y":335,"width":762,"height":12}},{"id":"2e678fbd-ce44-4403-b0d6-a5a7aa0b2ebb","block_type":"box","text":"interest and principal may be regarded as the sole issuer.","page_number":152,"box":{"x":117,"y":351,"width":431,"height":12}},{"id":"a599f365-5584-4091-9a8e-9b6e164cc07d","block_type":"box","text":"Foreign government securities (unlike U.S. Government Securities) are not exempt from the 5%, 10%","page_number":152,"box":{"x":117,"y":382,"width":759,"height":12}},{"id":"6e2c444f-8b7e-4184-a698-3c9d43a3f958","block_type":"box","text":"and 25% diversification requirements of the Code discussed above and the securities of each foreign","page_number":152,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"53932470-4749-4e63-9bf5-de772cc9c392","block_type":"box","text":"government issuer are considered to be obligations of a single issuer. These tax-related limitations","page_number":152,"box":{"x":116,"y":413,"width":737,"height":12}},{"id":"8746bf54-2b65-4b86-bb6b-670abd453415","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":152,"box":{"x":117,"y":428,"width":769,"height":12}},{"id":"b0c7f48d-3d37-4c99-9393-c885dd10e2a3","block_type":"box","text":"federal tax requirements. A Fund that is “diversified” under the Investment Company Act must satisfy","page_number":152,"box":{"x":116,"y":444,"width":753,"height":12}},{"id":"0da552fa-36e6-41c6-85fc-b2d503bbc749","block_type":"box","text":"the foregoing 5% and 10% requirements with respect to 75% of its total assets.","page_number":152,"box":{"x":116,"y":459,"width":592,"height":12}},{"id":"703dc709-3c1a-44fc-84bd-a5b18f2bdfcc","block_type":"box","text":"II-104","page_number":152,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"b30d5b22-ffde-440c-ba6e-74a01293164d","block_type":"box","text":"NM1026U-6033243-152/221","page_number":152,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"fe92f224-3f04-4171-b6ec-0dd596ca4836","block_type":"box","text":"Appendix A","page_number":153,"box":{"x":453,"y":87,"width":98,"height":12}},{"id":"02149624-ad40-4898-b4f9-2df5b77a82d1","block_type":"box","text":"Description of Bond Ratings","page_number":153,"box":{"x":387,"y":117,"width":231,"height":12}},{"id":"6ed388d3-0bb5-4866-9828-65798a8d330c","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":153,"box":{"x":116,"y":154,"width":722,"height":12}},{"id":"22421871-e9a2-4854-95f0-3221c92d1d49","block_type":"box","text":"agency designated as a nationally recognized statistical rating organization (“NRSRO”) by the SEC.","page_number":153,"box":{"x":116,"y":170,"width":744,"height":12}},{"id":"a6de60ca-be7e-4fde-bbb2-935e50a35d58","block_type":"box","text":"While NRSROs may from time to time revise such ratings, they undertake no obligation to do so, and","page_number":153,"box":{"x":116,"y":185,"width":755,"height":12}},{"id":"7e7f0674-a404-423b-9a89-b644e5d8df8a","block_type":"box","text":"the ratings given to securities at issuance do not necessarily represent ratings which would be given to","page_number":153,"box":{"x":116,"y":201,"width":767,"height":12}},{"id":"d734b55c-7c95-4858-bea9-e2eb2779221f","block_type":"box","text":"these securities on a particular subsequent date.","page_number":153,"box":{"x":116,"y":216,"width":366,"height":12}},{"id":"324b62ad-8572-4f13-80d6-b13f11ce36c9","block_type":"box","text":"NRSROs may rate specific investments (e.g., bonds), issuers (e.g., corporations, governments and","page_number":153,"box":{"x":117,"y":246,"width":740,"height":12}},{"id":"ed332ab9-a94f-41f2-b5cb-d8418d0d6139","block_type":"box","text":"financial institutions) and/or programs (e.g., commercial paper programs). However, certain types of","page_number":153,"box":{"x":116,"y":261,"width":747,"height":13}},{"id":"366d54fd-7da9-4b14-80a8-539a5a904d2f","block_type":"box","text":"investments may not be rated by NRSROs, such as certain government/sovereign obligations, US","page_number":153,"box":{"x":117,"y":277,"width":732,"height":12}},{"id":"4527c805-1662-4a0c-a40b-0b631913eff3","block_type":"box","text":"agency securities, commercial paper, time deposits at financial institutions, and derivative instruments","page_number":153,"box":{"x":116,"y":292,"width":761,"height":13}},{"id":"aa9fc94a-8b85-48a8-97c7-1cf9922f88f8","block_type":"box","text":"such as credit default swaps. For these types of investments, as well as US Treasury securities (some","page_number":153,"box":{"x":116,"y":308,"width":764,"height":12}},{"id":"f368a195-244c-489a-9db8-1b27f9026fd9","block_type":"box","text":"of which are not rated), where a NRSRO has not rated the specific investment but has rated the","page_number":153,"box":{"x":116,"y":323,"width":716,"height":13}},{"id":"622e90cd-80fc-4400-9dc5-e3fb51421f04","block_type":"box","text":"investment’s issuer, program, financial institution or underlying reference asset, BlackRock Advisors,","page_number":153,"box":{"x":117,"y":339,"width":751,"height":12}},{"id":"688dfcf0-0b9c-4f25-9788-461dbf996c9f","block_type":"box","text":"LLC, BlackRock Fund Advisors or their respective affiliates (“BlackRock”) may consider the investment","page_number":153,"box":{"x":117,"y":355,"width":766,"height":12}},{"id":"15d6df8d-f234-4669-b791-fb10d7837b19","block_type":"box","text":"to have the same NRSRO rating as its issuer, program, financial institution or underlying reference","page_number":153,"box":{"x":116,"y":370,"width":736,"height":12}},{"id":"7e8fc9ea-2f71-45d0-ade6-0b06adbe780e","block_type":"box","text":"asset, as applicable. In the case of municipal securities, where one NRSRO provides multiple ratings","page_number":153,"box":{"x":116,"y":386,"width":754,"height":12}},{"id":"bb7ca80a-2a09-4a6a-8bdd-141e260bbfce","block_type":"box","text":"for the same security (e.g., “underlying,” “insured” and/or “enhanced” ratings), BlackRock may consider","page_number":153,"box":{"x":116,"y":401,"width":770,"height":12}},{"id":"1bf6e534-9115-4018-b111-9d8e0c54fb5b","block_type":"box","text":"the security to have the highest of the multiple ratings.","page_number":153,"box":{"x":116,"y":417,"width":407,"height":12}},{"id":"76cf3f80-86dc-43d0-9456-f6676f74a96e","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":153,"box":{"x":117,"y":446,"width":722,"height":13}},{"id":"da139b51-ddee-49e9-8eb3-71f8decb4193","block_type":"box","text":"offering. Preliminary prospectuses or term sheets for new issue securities may include an expected","page_number":153,"box":{"x":116,"y":462,"width":742,"height":12}},{"id":"2270e85d-6d7d-48e4-8ec1-5ff701fdfc42","block_type":"box","text":"rating for the security (as determined by the underwriter and/or issuer) or a NRSRO rating for the","page_number":153,"box":{"x":117,"y":477,"width":723,"height":13}},{"id":"93e4301d-16e2-455d-98eb-16c3f48f2479","block_type":"box","text":"issuer of the security. If applicable, when deciding whether to purchase a new issue security that has","page_number":153,"box":{"x":117,"y":493,"width":752,"height":12}},{"id":"eead2607-ef78-4dd5-a6e4-6c52737e029a","block_type":"box","text":"not yet been rated by a NRSRO, BlackRock may attribute an expected rating to the security based on:","page_number":153,"box":{"x":117,"y":508,"width":763,"height":13}},{"id":"46829fa9-c402-47d3-b439-667e9999e624","block_type":"box","text":"(i) the expected rating of the security set forth in the preliminary prospectus or term sheet for the","page_number":153,"box":{"x":117,"y":524,"width":718,"height":12}},{"id":"4fd7ef96-5e4c-432f-b8f6-e2a3c61c9363","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":153,"box":{"x":116,"y":539,"width":760,"height":13}},{"id":"2e55517c-5f96-42d0-a091-48b0e29c48eb","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":153,"box":{"x":116,"y":555,"width":767,"height":12}},{"id":"c60ef17f-c2f2-48d3-a84f-d0f18232c3ab","block_type":"box","text":"having a similar structure or the same sponsor.","page_number":153,"box":{"x":117,"y":571,"width":353,"height":12}},{"id":"4478edee-5ee3-47bb-98d2-4f45a4f8cf19","block_type":"box","text":"Where the investment objective of a fund is to track the performance of an index that includes credit","page_number":153,"box":{"x":116,"y":600,"width":746,"height":12}},{"id":"94dcacaa-e583-4050-8ee2-2a6c73db6e77","block_type":"box","text":"ratings eligibility criteria as part of its index methodology, the fund may purchase any security within the","page_number":153,"box":{"x":117,"y":616,"width":771,"height":12}},{"id":"05458ca9-58a6-4b33-b956-ca6aedeb7852","block_type":"box","text":"index, such security having been determined by the index provider as meeting its credit ratings","page_number":153,"box":{"x":117,"y":632,"width":707,"height":11}},{"id":"7e3fc657-bd8e-4243-91fb-6a2c2f2fc69d","block_type":"box","text":"eligibility criteria. The credit ratings practices of an index provider may differ from BlackRock’s","page_number":153,"box":{"x":116,"y":647,"width":701,"height":12}},{"id":"2b6e3db0-8c7c-4f1d-aa96-e927b8ed518f","block_type":"box","text":"practices, as described above. Further, the fund may invest, directly or indirectly, in securities that are","page_number":153,"box":{"x":117,"y":662,"width":754,"height":12}},{"id":"40d59739-edc5-4c3e-a279-a11de2a27d7c","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":153,"box":{"x":117,"y":678,"width":757,"height":12}},{"id":"7efc0216-08ad-4027-b9e0-2d4340a9f104","block_type":"box","text":"in its index methodology in various circumstances, including where a security is downgraded but not","page_number":153,"box":{"x":117,"y":694,"width":741,"height":11}},{"id":"7369d5e8-a265-4833-a3a8-9ff1717e77fb","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":153,"box":{"x":116,"y":709,"width":733,"height":12}},{"id":"22c12264-0a2f-4c29-bab5-f715470ec8bb","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":153,"box":{"x":116,"y":724,"width":734,"height":13}},{"id":"720d1a1d-69dc-4996-8e23-f55886a10f75","block_type":"box","text":"fund.","page_number":153,"box":{"x":116,"y":740,"width":36,"height":9}},{"id":"66fe9bcd-fe34-4ec2-94d9-b6597ffebff0","block_type":"box","text":"Fixed-income securities which are unrated may expose the investor to risks with respect to capacity to","page_number":153,"box":{"x":117,"y":770,"width":757,"height":12}},{"id":"8c92e3b5-db78-444a-9834-6f5be9acc0d1","block_type":"box","text":"pay interest or repay principal which are similar to the risks of lower-rated speculative bonds.","page_number":153,"box":{"x":117,"y":785,"width":686,"height":12}},{"id":"94b70fb7-db00-4474-95ec-97d9a78862db","block_type":"box","text":"Evaluation of these securities is dependent on BlackRock’s judgment, analysis and experience in the","page_number":153,"box":{"x":117,"y":801,"width":747,"height":12}},{"id":"d59e7708-b437-4eb9-bd3c-871573634d4f","block_type":"box","text":"evaluation of such securities.","page_number":153,"box":{"x":116,"y":816,"width":214,"height":10}},{"id":"9bf21e97-3921-4133-9d10-4ffafbcb76c6","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":153,"box":{"x":117,"y":846,"width":745,"height":12}},{"id":"12dfa3b4-720f-4e5c-a039-fdb961fe59ea","block_type":"box","text":"effect of recent developments on the issuer’s ability to make interest and principal payments or on the","page_number":153,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"c86f2482-b753-4803-b517-180e95980690","block_type":"box","text":"likelihood of default.","page_number":153,"box":{"x":117,"y":877,"width":152,"height":10}},{"id":"94dd3098-a925-4e91-8ead-43aca2ab18ba","block_type":"box","text":"A-1","page_number":153,"box":{"x":486,"y":909,"width":24,"height":9}},{"id":"eda30c0b-d173-4a93-96b5-fa33bf254387","block_type":"box","text":"NM1026U-6033243-153/221","page_number":153,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"2f1480fc-1426-4ba3-9a1a-510a633dd586","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":154,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"b3f387d0-bea5-4c6a-8657-9473fb8ca68d","block_type":"box","text":"Ratings and Fitch.","page_number":154,"box":{"x":117,"y":103,"width":139,"height":12}},{"id":"ec04a147-5e8f-464a-8fcf-25253071cdee","block_type":"box","text":"The descriptions below relate to general long-term and short-term obligations of an issuer.","page_number":154,"box":{"x":116,"y":134,"width":674,"height":12}},{"id":"7570b539-36dc-4888-9071-59dab9c65174","block_type":"box","text":"A Description of Moody’s Investors Service, Inc.’s (“Moody’s”) Global Rating Scales","page_number":154,"box":{"x":116,"y":165,"width":677,"height":12}},{"id":"a021300b-630e-48aa-9113-076520ac3e5e","block_type":"box","text":"Ratings assigned on Moody’s global long-term and short-term rating scales are forward-looking","page_number":154,"box":{"x":117,"y":196,"width":711,"height":12}},{"id":"5a65512f-0e19-45d4-8648-7e24dc30bf3c","block_type":"box","text":"opinions of the relative credit risks of financial obligations issued by non-financial corporates, financial","page_number":154,"box":{"x":116,"y":211,"width":759,"height":12}},{"id":"eaac6c8f-ab4e-4391-8566-aaa6b580e7ed","block_type":"box","text":"institutions, structured finance vehicles, project finance vehicles, and public sector entities. Moody’s","page_number":154,"box":{"x":117,"y":227,"width":742,"height":12}},{"id":"88d4dde6-c05a-41e8-ae6f-c453ab5c4e13","block_type":"box","text":"defines credit risk as the risk that an entity may not meet its contractual financial obligations as they","page_number":154,"box":{"x":116,"y":242,"width":744,"height":12}},{"id":"2976c701-3cdb-483b-9852-e2f433c7bf90","block_type":"box","text":"come due and any estimated financial loss in the event of default or impairment. The contractual","page_number":154,"box":{"x":116,"y":258,"width":720,"height":12}},{"id":"b8eb61d7-493d-41cb-90b3-7353a8cfb374","block_type":"box","text":"financial obligations addressed by Moody’s ratings are those that call for, without regard to","page_number":154,"box":{"x":116,"y":273,"width":676,"height":12}},{"id":"f7555650-e934-482e-b506-b49fe9715a21","block_type":"box","text":"enforceability, the payment of an ascertainable amount, which may vary based upon standard sources","page_number":154,"box":{"x":116,"y":289,"width":765,"height":12}},{"id":"ce577170-4722-4bdd-a0b3-f5941c217428","block_type":"box","text":"of variation (e.g., floating interest rates), by an ascertainable date. Moody’s rating addresses the","page_number":154,"box":{"x":116,"y":304,"width":719,"height":12}},{"id":"b01cfd49-160f-4192-a67d-e39ad067e01f","block_type":"box","text":"issuer’s ability to obtain cash sufficient to service the obligation, and its willingness to pay. Moody’s","page_number":154,"box":{"x":117,"y":320,"width":738,"height":12}},{"id":"2a206db7-380f-411e-a6c9-13449d33165b","block_type":"box","text":"ratings do not address non-standard sources of variation in the amount of the principal obligation (e.g.,","page_number":154,"box":{"x":117,"y":335,"width":765,"height":12}},{"id":"5d1cf3ce-e34f-47c5-929d-988e67b9c9f3","block_type":"box","text":"equity indexed), absent an express statement to the contrary in a press release accompanying an","page_number":154,"box":{"x":116,"y":351,"width":731,"height":12}},{"id":"95ed68f6-8275-43f3-b5da-6d51001fd9e8","block_type":"box","text":"initial rating. Long-term ratings are assigned to issuers or obligations with an original maturity of one","page_number":154,"box":{"x":117,"y":366,"width":745,"height":12}},{"id":"9298f8ec-e9e9-4f66-9b7d-97e4bf4ff819","block_type":"box","text":"year or more and reflect both on the likelihood of a default or impairment on contractual financial","page_number":154,"box":{"x":116,"y":382,"width":719,"height":12}},{"id":"8defcd91-542d-4bd5-aacc-5f30d8b57367","block_type":"box","text":"obligations and the expected financial loss suffered in the event of default or impairment. Short-term","page_number":154,"box":{"x":116,"y":397,"width":747,"height":12}},{"id":"40c82b88-c3dd-42c3-95c5-594ff8468637","block_type":"box","text":"ratings are assigned for obligations with an original maturity of thirteen months or less and reflect both","page_number":154,"box":{"x":117,"y":413,"width":760,"height":12}},{"id":"22d25e7e-ae55-4399-ad74-fdf20aa9b1a5","block_type":"box","text":"on the likelihood of a default or impairment on contractual financial obligations and the expected","page_number":154,"box":{"x":116,"y":428,"width":717,"height":12}},{"id":"baa6e9bb-2732-493d-8986-ef149b22ab20","block_type":"box","text":"financial loss suffered in the event of default or impairment. Moody’s issues ratings at the issuer level","page_number":154,"box":{"x":116,"y":444,"width":755,"height":12}},{"id":"0ed88333-6c61-441b-8924-1d04012d0873","block_type":"box","text":"and instrument level on both the long-term scale and the short-term scale. Typically, ratings are made","page_number":154,"box":{"x":116,"y":459,"width":761,"height":12}},{"id":"2f350d09-ab89-4541-92b7-de21421c7d37","block_type":"box","text":"publicly available although private and unpublished ratings may also be assigned.","page_number":154,"box":{"x":117,"y":475,"width":610,"height":12}},{"id":"52d68378-cb0f-4ddb-a87b-de4611c87090","block_type":"box","text":"Moody’s differentiates structured finance ratings from fundamental ratings (i.e., ratings on nonfinancial","page_number":154,"box":{"x":117,"y":506,"width":763,"height":12}},{"id":"a716e5b1-789b-4a07-9751-da628f4a1d12","block_type":"box","text":"corporate, financial institution, and public sector entities) on the global long-term scale by adding (sf) to","page_number":154,"box":{"x":116,"y":521,"width":769,"height":12}},{"id":"39b12af0-c576-4b28-8db6-9c01e4ae01c7","block_type":"box","text":"all structured finance ratings. The addition of (sf) to structured finance ratings should eliminate any","page_number":154,"box":{"x":116,"y":537,"width":735,"height":12}},{"id":"61cc29a7-4114-4b7c-82cc-f969bb8d8b7c","block_type":"box","text":"presumption that such ratings and fundamental ratings at the same letter grade level will behave the","page_number":154,"box":{"x":117,"y":552,"width":747,"height":12}},{"id":"b639adc6-b555-4146-9848-ee5e53eabc47","block_type":"box","text":"same. The (sf) indicator for structured finance security ratings indicates that otherwise similarly rated","page_number":154,"box":{"x":116,"y":568,"width":751,"height":12}},{"id":"d11e2f1b-04b2-4f59-821a-a2d612477ac2","block_type":"box","text":"structured finance and fundamental securities may have different risk characteristics. Through its","page_number":154,"box":{"x":116,"y":583,"width":724,"height":12}},{"id":"acf0dcc3-cfcf-40d5-9a9c-8537f760b210","block_type":"box","text":"current methodologies, however, Moody’s aspires to achieve broad expected equivalence in structured","page_number":154,"box":{"x":116,"y":599,"width":769,"height":12}},{"id":"fd7e1b07-8e6f-4824-b8bc-7ab896e96e77","block_type":"box","text":"finance and fundamental rating performance when measured over a long period of time.","page_number":154,"box":{"x":116,"y":614,"width":658,"height":12}},{"id":"70797ce4-ed1e-41aa-a7a4-9662b22a3837","block_type":"box","text":"Description of Moody’s Global Long-Term Rating Scale","page_number":154,"box":{"x":117,"y":645,"width":445,"height":12}},{"id":"8a25e7ac-6491-4605-ba6a-0697b2ca05fa","block_type":"box","text":"Aaa Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level","page_number":154,"box":{"x":116,"y":676,"width":756,"height":12}},{"id":"9c28a02e-5b3a-4396-8e3e-bfabf1b4b7a7","block_type":"box","text":"of credit risk.","page_number":154,"box":{"x":226,"y":692,"width":93,"height":9}},{"id":"d9293b25-63ce-4569-84ca-40b2d09a38eb","block_type":"box","text":"Aa Obligations rated Aa are judged to be of high quality and are subject to very low credit","page_number":154,"box":{"x":116,"y":715,"width":747,"height":12}},{"id":"2d49dcf7-74da-4ba8-aac7-b29e8385ed2c","block_type":"box","text":"risk.","page_number":154,"box":{"x":226,"y":731,"width":28,"height":9}},{"id":"0b37b6d5-f621-4f6d-a22d-0ae5e11dc478","block_type":"box","text":"A Obligations rated A are judged to be upper-medium grade and are subject to low credit","page_number":154,"box":{"x":116,"y":754,"width":754,"height":12}},{"id":"45724438-7948-4d11-88cf-f973fe12a441","block_type":"box","text":"risk.","page_number":154,"box":{"x":226,"y":769,"width":28,"height":10}},{"id":"1ad6c641-f969-4c0c-9f71-1a31a1379185","block_type":"box","text":"Baa Obligations rated Baa are judged to be medium-grade and subject to moderate credit","page_number":154,"box":{"x":117,"y":792,"width":741,"height":13}},{"id":"63f2de92-b53a-48d6-9f6e-6fa6cd9e7369","block_type":"box","text":"risk and as such may possess certain speculative characteristics.","page_number":154,"box":{"x":226,"y":808,"width":483,"height":12}},{"id":"d9921c43-fb49-4ea9-b22d-461775e3f46d","block_type":"box","text":"Ba Obligations rated Ba are judged to be speculative and are subject to substantial credit","page_number":154,"box":{"x":117,"y":831,"width":750,"height":12}},{"id":"599d5e9f-5679-4f86-a8b7-bf0fb8cb060b","block_type":"box","text":"risk.","page_number":154,"box":{"x":226,"y":847,"width":35,"height":9}},{"id":"b03e0bd5-3329-4ae0-9102-aa7605a312f2","block_type":"box","text":"B Obligations rated B are considered speculative and are subject to high credit risk.","page_number":154,"box":{"x":117,"y":870,"width":717,"height":12}},{"id":"c778f287-abb4-4a76-963e-b73fc0300454","block_type":"box","text":"A-2","page_number":154,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"5f8c8a73-b918-404f-800a-9797e5e50e40","block_type":"box","text":"NM1026U-6033243-154/221","page_number":154,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"036399ca-dcaf-4ec3-b3a1-79918b21a04b","block_type":"box","text":"Caa Obligations rated Caa are judged to be speculative of poor standing and are subject to","page_number":155,"box":{"x":117,"y":87,"width":755,"height":12}},{"id":"5af4c2e0-6d6a-42b0-a344-8b7b96aac168","block_type":"box","text":"very high credit risk.","page_number":155,"box":{"x":225,"y":103,"width":154,"height":12}},{"id":"6871288e-ebb1-476d-975e-da192ecddeb0","block_type":"box","text":"Ca Obligations rated Ca are highly speculative and are likely in, or very near, default, with","page_number":155,"box":{"x":117,"y":126,"width":753,"height":12}},{"id":"a4cbc2a7-019a-4958-ba5d-21ae84e6aaa9","block_type":"box","text":"some prospect of recovery of principal and interest.","page_number":155,"box":{"x":226,"y":141,"width":386,"height":12}},{"id":"44e737db-313e-447a-a922-1df37a5c1df4","block_type":"box","text":"C Obligations rated C are the lowest rated and are typically in default, with little prospect","page_number":155,"box":{"x":117,"y":165,"width":752,"height":12}},{"id":"08785a61-38ec-45bc-9a43-146b8aeeedfc","block_type":"box","text":"for recovery of principal or interest.","page_number":155,"box":{"x":225,"y":180,"width":264,"height":12}},{"id":"8f347042-f5f4-4449-a0e1-3149a30fed61","block_type":"box","text":"Note:","page_number":155,"box":{"x":117,"y":210,"width":39,"height":9}},{"id":"0508784a-ce45-47b4-883a-6ced4e263148","block_type":"box","text":"Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa","page_number":155,"box":{"x":156,"y":210,"width":706,"height":12}},{"id":"aa5698c3-7111-4eb2-8c58-7f3d344a5539","block_type":"box","text":"through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating","page_number":155,"box":{"x":116,"y":225,"width":745,"height":12}},{"id":"42109904-13c3-462c-877a-f32f8dbcf0b3","block_type":"box","text":"category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the","page_number":155,"box":{"x":116,"y":241,"width":741,"height":12}},{"id":"6517ee8d-b02d-470d-9b8c-a32add72ac59","block_type":"box","text":"lower end of that generic rating category. Additionally, a “(hyb)” indicator is appended to all ratings of","page_number":155,"box":{"x":117,"y":256,"width":751,"height":12}},{"id":"e1423b1d-0d15-4ab3-a932-851f305ea91d","block_type":"box","text":"hybrid securities issued by banks, insurers, finance companies, and securities firms.","page_number":155,"box":{"x":117,"y":272,"width":628,"height":12}},{"id":"1a133e1b-e594-4802-b87c-05169988da98","block_type":"box","text":"By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal","page_number":155,"box":{"x":117,"y":301,"width":737,"height":12}},{"id":"7fd4a479-8415-460a-befb-5f53fa16ade7","block_type":"box","text":"payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may","page_number":155,"box":{"x":117,"y":317,"width":765,"height":12}},{"id":"0280729c-82eb-4a2b-a78f-6ff7f091369b","block_type":"box","text":"also be subject to contractually allowable write-downs of principal that could result in impairment.","page_number":155,"box":{"x":116,"y":332,"width":724,"height":12}},{"id":"e48de7db-509d-4597-9d68-731e1e1e3fce","block_type":"box","text":"Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an","page_number":155,"box":{"x":116,"y":348,"width":744,"height":12}},{"id":"cf6a2bdd-d864-4dc3-8ffe-83605f81bf45","block_type":"box","text":"expression of the relative credit risk associated with that security.","page_number":155,"box":{"x":116,"y":363,"width":488,"height":12}},{"id":"fe87cbb2-cbde-4ac7-bde2-990740112eff","block_type":"box","text":"Description of Moody’s Global Short-Term Rating Scale","page_number":155,"box":{"x":117,"y":393,"width":448,"height":12}},{"id":"6b14758c-09da-41e1-a66d-921a3a2ce5cf","block_type":"box","text":"P-1 Ratings of Prime-1 reflect a superior ability to repay short-term obligations.","page_number":155,"box":{"x":117,"y":422,"width":667,"height":13}},{"id":"e9e7a211-ffd5-47a5-8a46-70c48db1b587","block_type":"box","text":"P-2 Ratings of Prime-2 reflect a strong ability to repay short-term obligations.","page_number":155,"box":{"x":117,"y":446,"width":653,"height":12}},{"id":"5add3de2-2cab-4a02-a1c2-31afce71eff9","block_type":"box","text":"P-3 Ratings of Prime-3 reflect an acceptable ability to repay short-term obligations.","page_number":155,"box":{"x":117,"y":469,"width":697,"height":12}},{"id":"364b3da7-0cb3-4340-8331-11fac75f65c7","block_type":"box","text":"NP Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime","page_number":155,"box":{"x":117,"y":492,"width":741,"height":12}},{"id":"c8c2d638-1620-4e04-95fc-850d3263a33c","block_type":"box","text":"rating categories.","page_number":155,"box":{"x":226,"y":508,"width":133,"height":12}},{"id":"5462d323-e35d-4e93-b561-867d29feba67","block_type":"box","text":"Description of Moody’s U.S. Municipal Short-Term Debt and Demand Obligation Ratings","page_number":155,"box":{"x":117,"y":537,"width":707,"height":12}},{"id":"46c39866-8b4a-42b6-878b-9bfdeac0a02f","block_type":"box","text":"Description of Moody’s Short-Term Obligation Ratings","page_number":155,"box":{"x":117,"y":567,"width":439,"height":12}},{"id":"bd342cdb-1a53-4bce-8459-5a287734d64f","block_type":"box","text":"Moody’s uses the global short-term Prime rating scale for commercial paper issued by U.S.","page_number":155,"box":{"x":117,"y":596,"width":681,"height":13}},{"id":"fd61ed3f-8da9-4bdc-89c0-8f90d8179df7","block_type":"box","text":"municipalities and nonprofits. These commercial paper programs may be backed by external letters of","page_number":155,"box":{"x":117,"y":612,"width":761,"height":12}},{"id":"9977094e-4af3-4a75-80ec-84ba9e4dc4da","block_type":"box","text":"credit or liquidity facilities, or by an issuer’s self-liquidity.","page_number":155,"box":{"x":116,"y":627,"width":420,"height":13}},{"id":"cf4b3350-b47c-466f-b370-dbfe00022536","block_type":"box","text":"For other short-term municipal obligations, Moody’s uses one of two other short-term rating scales, the","page_number":155,"box":{"x":117,"y":657,"width":765,"height":12}},{"id":"a05c2d74-7c1f-45df-b724-d8ce31eb23ae","block_type":"box","text":"Municipal Investment Grade (“MIG”) and Variable Municipal Investment Grade (“VMIG”) scales","page_number":155,"box":{"x":117,"y":673,"width":703,"height":12}},{"id":"f4238336-13df-44d8-8bec-f728a859e4e0","block_type":"box","text":"discussed below.","page_number":155,"box":{"x":116,"y":688,"width":126,"height":10}},{"id":"129febb0-6ddb-41f3-8ec6-3d230ea12dcf","block_type":"box","text":"Moody’s uses the MIG scale for U.S. municipal cash flow notes, bond anticipation notes and certain","page_number":155,"box":{"x":117,"y":718,"width":738,"height":12}},{"id":"a040a356-f602-433d-9953-216312a1bb2f","block_type":"box","text":"other short-term obligations, which typically mature in three years or less. Under certain circumstances,","page_number":155,"box":{"x":116,"y":733,"width":766,"height":12}},{"id":"e97c3562-f802-4b57-bc58-391ce728e3ff","block_type":"box","text":"Moody’s uses the MIG scale for bond anticipation notes with maturities of up to five years.","page_number":155,"box":{"x":117,"y":749,"width":665,"height":12}},{"id":"eda707b2-e1d2-41ed-8fb6-d0c06daccbea","block_type":"box","text":"MIG Scale","page_number":155,"box":{"x":117,"y":778,"width":77,"height":10}},{"id":"34d64ae7-1727-456b-888b-368f5eef4dbb","block_type":"box","text":"MIG 1 This designation denotes superior credit quality. Excellent protection is afforded by","page_number":155,"box":{"x":117,"y":808,"width":722,"height":12}},{"id":"2075841e-377f-422f-bb66-771087b68144","block_type":"box","text":"established cash flows, highly reliable liquidity support, or demonstrated broad-based","page_number":155,"box":{"x":226,"y":823,"width":631,"height":12}},{"id":"8c25e392-9349-40c3-9c18-04eeb7d8e165","block_type":"box","text":"access to the market for refinancing.","page_number":155,"box":{"x":226,"y":839,"width":275,"height":12}},{"id":"63e1f547-975f-4093-ad51-ac87a78dd9f7","block_type":"box","text":"MIG 2 This designation denotes strong credit quality. Margins of protection are ample, although","page_number":155,"box":{"x":117,"y":862,"width":771,"height":12}},{"id":"1c8ed8ee-a2ba-478d-9d50-c25c9794fcec","block_type":"box","text":"not as large as in the preceding group.","page_number":155,"box":{"x":226,"y":878,"width":291,"height":12}},{"id":"38ddd4e0-3c2e-47ba-a520-45e468d9c5bb","block_type":"box","text":"A-3","page_number":155,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"7591c26b-33bf-4f00-b102-def7be2c4df7","block_type":"box","text":"NM1026U-6033243-155/221","page_number":155,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"92fddf62-cfce-4210-aea6-88a6d0b3011e","block_type":"box","text":"MIG 3 This designation denotes acceptable credit quality. Liquidity and cash-flow protection","page_number":156,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"b710f91f-3316-4f34-9f4a-9bc413907603","block_type":"box","text":"may be narrow, and market access for refinancing is likely to be less well-established.","page_number":156,"box":{"x":226,"y":102,"width":642,"height":13}},{"id":"35b37f75-a7e9-4b60-8fd7-c443e2b26db8","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Debt instruments in this","page_number":156,"box":{"x":116,"y":126,"width":723,"height":12}},{"id":"b05c0c8a-aed5-4c9f-b330-8ad1d2eca01a","block_type":"box","text":"category may lack sufficient margins of protection.","page_number":156,"box":{"x":226,"y":141,"width":377,"height":12}},{"id":"53d7c639-e721-4b6c-8cec-1d7c8d3a0508","block_type":"box","text":"Description of Moody’s Demand Obligation Ratings","page_number":156,"box":{"x":117,"y":172,"width":415,"height":12}},{"id":"01e24e94-12fd-4b41-a14d-bdc1189fab7f","block_type":"box","text":"In the case of variable rate demand obligations (“VRDOs”), a two-component rating is assigned. The","page_number":156,"box":{"x":117,"y":203,"width":749,"height":12}},{"id":"daf0080a-5b9b-4800-ba0e-d24a1218af92","block_type":"box","text":"components are a long-term rating and a short-term demand obligation rating. The long-term rating","page_number":156,"box":{"x":116,"y":219,"width":740,"height":12}},{"id":"dfd8bcbb-0195-4e0a-8a34-d20f389be91d","block_type":"box","text":"addresses the issuer’s ability to meet scheduled principal and interest payments. The short-term","page_number":156,"box":{"x":116,"y":234,"width":719,"height":12}},{"id":"8630ae09-a408-422d-a4f8-afce2ac81753","block_type":"box","text":"demand obligation rating addresses the ability of the issuer or the liquidity provider to make payments","page_number":156,"box":{"x":116,"y":250,"width":759,"height":12}},{"id":"878e1b34-75e8-4191-8e8a-be3ec4817a93","block_type":"box","text":"associated with the purchase-price-upon-demand feature (“demand feature”) of the VRDO. The short","page_number":156,"box":{"x":116,"y":265,"width":756,"height":12}},{"id":"6f51e960-e24b-4c2e-b677-b3615c4659c4","block_type":"box","text":"term demand obligation rating uses the VMIG scale. VMIG ratings with liquidity support use as an input","page_number":156,"box":{"x":116,"y":281,"width":770,"height":12}},{"id":"b87dfc84-aaa0-4c56-ad9b-95cd0cc5812c","block_type":"box","text":"the short-term Counterparty Risk Assessment of the support provider, or the long-term rating of the","page_number":156,"box":{"x":116,"y":296,"width":740,"height":12}},{"id":"e0e0bd49-eb8f-4cce-91f3-0a60086e4b4b","block_type":"box","text":"underlying obligor in the absence of third party liquidity support. Transitions of VMIG ratings of demand","page_number":156,"box":{"x":117,"y":312,"width":768,"height":12}},{"id":"25537318-9595-4e5d-a008-3d3dc9c52966","block_type":"box","text":"obligations with conditional liquidity support differ from transitions on the Prime scale to reflect the risk","page_number":156,"box":{"x":116,"y":327,"width":760,"height":12}},{"id":"596840d5-0372-4715-88bf-a5fedc44907d","block_type":"box","text":"that external liquidity support will terminate if the issuer’s long-term rating drops below investment","page_number":156,"box":{"x":116,"y":343,"width":729,"height":12}},{"id":"86c4e322-1bfb-4798-85f1-6a6c171b6173","block_type":"box","text":"grade.","page_number":156,"box":{"x":116,"y":358,"width":52,"height":12}},{"id":"1ae2859e-8571-47fd-aab5-241bda81e1c1","block_type":"box","text":"Moody’s typically assigns the VMIG short-term demand obligation rating if the frequency of the demand","page_number":156,"box":{"x":117,"y":389,"width":771,"height":12}},{"id":"44c8c6c3-47e5-4698-95b8-02ba75127f32","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":156,"box":{"x":116,"y":405,"width":753,"height":12}},{"id":"33300766-be80-4f34-8104-5566713986e0","block_type":"box","text":"but the purchase price is payable only with remarketing proceeds, the short-term demand obligation","page_number":156,"box":{"x":117,"y":420,"width":745,"height":12}},{"id":"0dbeae6a-4362-40a5-ba2d-394df2b290a1","block_type":"box","text":"rating is “NR”.","page_number":156,"box":{"x":117,"y":436,"width":107,"height":12}},{"id":"a3afc89e-fedf-4413-ab78-8c9cfb7d5674","block_type":"box","text":"VMIG Scale","page_number":156,"box":{"x":116,"y":467,"width":94,"height":9}},{"id":"8d1c52ef-0e0d-4f6a-9ccb-7e526a34b151","block_type":"box","text":"VMIG 1 This designation denotes superior credit quality. Excellent protection is afforded by the","page_number":156,"box":{"x":116,"y":498,"width":756,"height":12}},{"id":"d1ef0499-4476-43f6-89e7-de3c8964627f","block_type":"box","text":"superior short-term credit strength of the liquidity provider and structural and legal","page_number":156,"box":{"x":226,"y":513,"width":610,"height":12}},{"id":"569a7847-5936-4349-86e1-6915a630cea1","block_type":"box","text":"protections that ensure the timely payment of purchase price upon demand.","page_number":156,"box":{"x":226,"y":529,"width":567,"height":12}},{"id":"ca95b068-8bec-4a42-897c-994f88ddc54b","block_type":"box","text":"VMIG 2 This designation denotes strong credit quality. Good protection is afforded by the strong","page_number":156,"box":{"x":116,"y":552,"width":766,"height":12}},{"id":"e1a07353-7611-4a5e-bdb5-2905e7edc1f1","block_type":"box","text":"short-term credit strength of the liquidity provider and structural and legal protections","page_number":156,"box":{"x":226,"y":568,"width":632,"height":12}},{"id":"0f648819-8a38-4a84-a598-7495339e7a08","block_type":"box","text":"that ensure the timely payment of purchase price upon demand.","page_number":156,"box":{"x":225,"y":583,"width":481,"height":12}},{"id":"603c834c-5a1e-4204-b405-59f00eb60fce","block_type":"box","text":"VMIG 3 This designation denotes acceptable credit quality. Adequate protection is afforded by","page_number":156,"box":{"x":116,"y":606,"width":752,"height":12}},{"id":"a4bfe1bf-42bd-461d-81f3-f6219516a534","block_type":"box","text":"the satisfactory short-term credit strength of the liquidity provider and structural and","page_number":156,"box":{"x":225,"y":622,"width":624,"height":12}},{"id":"6e6dd7bf-ada8-454b-88eb-09f70313ab9b","block_type":"box","text":"legal protections that ensure the timely payment of purchase price upon demand.","page_number":156,"box":{"x":226,"y":637,"width":607,"height":12}},{"id":"0d0359cc-bbff-47a3-8384-9416dd7c4379","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Demand features rated in this","page_number":156,"box":{"x":116,"y":661,"width":762,"height":12}},{"id":"9a6ed570-f30f-4f74-b434-a3fec66d3e6a","block_type":"box","text":"category may be supported by a liquidity provider that does not have a sufficiently","page_number":156,"box":{"x":226,"y":676,"width":606,"height":12}},{"id":"f91064f0-eca5-45d8-b428-449215503789","block_type":"box","text":"strong short-term rating or may lack the structural or legal protections necessary to","page_number":156,"box":{"x":226,"y":692,"width":614,"height":12}},{"id":"b6db69f2-2795-4be0-9f0b-56487b63405b","block_type":"box","text":"ensure the timely payment of purchase price upon demand.","page_number":156,"box":{"x":226,"y":707,"width":441,"height":12}},{"id":"48f3ee72-4cdc-4bcc-b4c5-3bbd1e90b737","block_type":"box","text":"Description of S&P Global Ratings (“S&P”), a Division of S&P Global Inc., Issue Credit Ratings","page_number":156,"box":{"x":117,"y":738,"width":753,"height":12}},{"id":"583fdf24-f78c-4f64-acca-f7047e89ed99","block_type":"box","text":"An S&P issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with","page_number":156,"box":{"x":116,"y":769,"width":737,"height":12}},{"id":"71b23856-2dd6-4830-b14d-118ca68a9dd5","block_type":"box","text":"respect to a specific financial obligation, a specific class of financial obligations, or a specific financial","page_number":156,"box":{"x":117,"y":785,"width":748,"height":12}},{"id":"94b21c1c-7819-46ad-8ff3-52f5e8d8d32c","block_type":"box","text":"program (including ratings on medium-term note programs and commercial paper programs). It takes","page_number":156,"box":{"x":117,"y":800,"width":750,"height":12}},{"id":"e622a212-35bc-4e3c-b973-3663aa6d3be7","block_type":"box","text":"into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement","page_number":156,"box":{"x":117,"y":816,"width":744,"height":12}},{"id":"c145ce33-4e9b-40a5-8e9b-a48306fc8e71","block_type":"box","text":"on the obligation and takes into account the currency in which the obligation is denominated. The","page_number":156,"box":{"x":116,"y":831,"width":726,"height":12}},{"id":"9ddb1c37-fd0e-4b23-8be3-a5b154e7c412","block_type":"box","text":"opinion reflects S&P’s view of the obligor’s capacity and willingness to meet its financial commitments","page_number":156,"box":{"x":116,"y":847,"width":759,"height":12}},{"id":"74a5a31a-3f40-4885-a6fa-547c559887a3","block_type":"box","text":"as they come due, and this opinion may assess terms, such as collateral security and subordination,","page_number":156,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"349e0736-95ea-4f37-9b27-ba7c8602059d","block_type":"box","text":"which could affect ultimate payment in the event of default.","page_number":156,"box":{"x":116,"y":878,"width":441,"height":12}},{"id":"bcba0914-1c76-4d0e-86c9-e4a4a803b762","block_type":"box","text":"A-4","page_number":156,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"9d9545be-b33f-4d71-9870-494ada9f057f","block_type":"box","text":"NM1026U-6033243-156/221","page_number":156,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"8de041ee-ae2f-43ae-909f-903c085e5992","block_type":"box","text":"Issue credit ratings can be either long-term or short-term. Short-term issue credit ratings are generally","page_number":157,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"4f60c9aa-6918-4d5e-827f-42acf9899887","block_type":"box","text":"assigned to those obligations considered short-term in the relevant market, typically with an original","page_number":157,"box":{"x":116,"y":103,"width":743,"height":12}},{"id":"b09650b7-2bf0-4674-bf09-1feb4e848282","block_type":"box","text":"maturity of no more than 365 days. Short-term issue credit ratings are also used to indicate the","page_number":157,"box":{"x":117,"y":118,"width":708,"height":12}},{"id":"1df909e9-9f4c-4c19-8e87-410ddb0728e5","block_type":"box","text":"creditworthiness of an obligor with respect to put features on long-term obligations. S&P would typically","page_number":157,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"a5ab164e-9188-4af4-89c1-f4b5a6e2302c","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":157,"box":{"x":116,"y":149,"width":772,"height":12}},{"id":"cf777b9c-82f0-4c35-8428-2db9bde3b32b","block_type":"box","text":"However, the ratings S&P assigns to certain instruments may diverge from these guidelines based on","page_number":157,"box":{"x":117,"y":165,"width":758,"height":12}},{"id":"088b27fb-cecb-4472-a010-d73bb1d5f9ac","block_type":"box","text":"market practices. Medium-term notes are assigned long-term ratings.","page_number":157,"box":{"x":117,"y":180,"width":518,"height":12}},{"id":"a42e5a0c-380a-43fd-9e8e-23c5105ae76e","block_type":"box","text":"Issue credit ratings are based, in varying degrees, on S&P’s analysis of the following considerations:","page_number":157,"box":{"x":117,"y":208,"width":750,"height":12}},{"id":"e54e3019-bab0-486d-af35-731894e3295d","block_type":"box","text":"• The likelihood of payment — the capacity and willingness of the obligor to meet its financial","page_number":157,"box":{"x":117,"y":237,"width":714,"height":12}},{"id":"bf57ff2e-29da-4d27-9032-a1857d27551b","block_type":"box","text":"commitments on an obligation in accordance with the terms of the obligation;","page_number":157,"box":{"x":150,"y":252,"width":575,"height":12}},{"id":"c3079183-dfa2-41f6-b35a-d490b6e5592c","block_type":"box","text":"• The nature and provisions of the financial obligation, and the promise S&P imputes; and","page_number":157,"box":{"x":117,"y":274,"width":691,"height":12}},{"id":"0643be04-bba5-4d34-8bbc-8b9cb0c1358a","block_type":"box","text":"• The protection afforded by, and relative position of, the financial obligation in the event of a","page_number":157,"box":{"x":117,"y":296,"width":712,"height":12}},{"id":"c34832a8-843e-4443-9205-6ae7763f6a85","block_type":"box","text":"bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws","page_number":157,"box":{"x":150,"y":312,"width":704,"height":12}},{"id":"49abdc58-eccd-4e08-827b-fd85581bbedf","block_type":"box","text":"affecting creditors’ rights.","page_number":157,"box":{"x":150,"y":327,"width":191,"height":12}},{"id":"1392dd1a-b978-4fe4-b562-adf667dec204","block_type":"box","text":"An issue rating is an assessment of default risk but may incorporate an assessment of relative seniority","page_number":157,"box":{"x":116,"y":355,"width":772,"height":13}},{"id":"15de9b29-7f28-4050-b239-5ada8f2e4eb5","block_type":"box","text":"or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior","page_number":157,"box":{"x":116,"y":371,"width":728,"height":12}},{"id":"e4239e34-5ec7-42bf-90b5-2fda55a07e5d","block_type":"box","text":"obligations, to reflect lower priority in bankruptcy, as noted above. (Such differentiation may apply","page_number":157,"box":{"x":116,"y":386,"width":729,"height":13}},{"id":"449b4c2f-96ed-44ff-8038-e15e2b05cfb6","block_type":"box","text":"when an entity has both senior and subordinated obligations, secured and unsecured obligations, or","page_number":157,"box":{"x":116,"y":402,"width":747,"height":12}},{"id":"8d45276e-2472-4872-81ff-b7efd7dcb96b","block_type":"box","text":"operating company and holding company obligations.)","page_number":157,"box":{"x":116,"y":417,"width":407,"height":13}},{"id":"aa792c79-fda6-4e4e-97ea-e7968249d37d","block_type":"box","text":"Long-Term Issue Credit Ratings*","page_number":157,"box":{"x":117,"y":446,"width":265,"height":12}},{"id":"46b74fa9-bbd4-4827-8a76-3c6a831fba4c","block_type":"box","text":"AAA An obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity","page_number":157,"box":{"x":116,"y":474,"width":770,"height":12}},{"id":"8cc49820-7a48-4785-a56c-71e28f01eb99","block_type":"box","text":"to meet its financial commitments on the obligation is extremely strong.","page_number":157,"box":{"x":225,"y":490,"width":533,"height":12}},{"id":"0e9d8a54-5a89-40de-8726-302bbbee3e8b","block_type":"box","text":"AA An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree.","page_number":157,"box":{"x":116,"y":513,"width":768,"height":12}},{"id":"cbcdc3e6-b4ab-495a-ba37-131304044ba7","block_type":"box","text":"The obligor’s capacity to meet its financial commitments on the obligation is very strong.","page_number":157,"box":{"x":225,"y":528,"width":659,"height":13}},{"id":"37f37c05-2bd9-47e3-aa5f-3d32b58dec72","block_type":"box","text":"A An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes","page_number":157,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"a15ae88f-a950-405e-b41f-b3fd493ef818","block_type":"box","text":"in circumstances and economic conditions than obligations in higher-rated categories.","page_number":157,"box":{"x":226,"y":567,"width":642,"height":12}},{"id":"d88a5503-e9d7-48c1-8697-555918fa1eb4","block_type":"box","text":"However, the obligor’s capacity to meet its financial commitments on the obligation is","page_number":157,"box":{"x":226,"y":583,"width":635,"height":12}},{"id":"4694be7b-6c02-4c97-b1e1-1b89bf854368","block_type":"box","text":"still strong.","page_number":157,"box":{"x":226,"y":598,"width":84,"height":12}},{"id":"3736396e-7b72-4847-bc97-43f988a87027","block_type":"box","text":"BBB An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse","page_number":157,"box":{"x":117,"y":621,"width":749,"height":13}},{"id":"db608071-ba2b-43aa-aa7a-dd65ee0fdbeb","block_type":"box","text":"economic conditions or changing circumstances are more likely to weaken the obligor’s","page_number":157,"box":{"x":226,"y":637,"width":652,"height":12}},{"id":"8aad637b-75eb-41e4-bbf2-921ec473b090","block_type":"box","text":"capacity to meet its financial commitments on the obligation.","page_number":157,"box":{"x":226,"y":652,"width":452,"height":13}},{"id":"314f7571-7839-4ab3-a603-5131fc8b2ee7","block_type":"box","text":"BB, B,","page_number":157,"box":{"x":117,"y":676,"width":45,"height":11}},{"id":"dad2027e-8335-4e49-94b2-6e5baecaefd0","block_type":"box","text":"CCC, CC,","page_number":157,"box":{"x":117,"y":691,"width":72,"height":11}},{"id":"7673648c-cd25-4e86-a55b-6bdd90ed88e1","block_type":"box","text":"and C","page_number":157,"box":{"x":116,"y":707,"width":44,"height":9}},{"id":"8b97b92a-f33f-46bf-9c2d-4b9053ab5c2b","block_type":"box","text":"Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant","page_number":157,"box":{"x":226,"y":676,"width":602,"height":12}},{"id":"b16f6a0f-4cd5-40c5-89d9-7b470dd6a4b3","block_type":"box","text":"speculative characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the","page_number":157,"box":{"x":226,"y":691,"width":624,"height":12}},{"id":"5afce09f-f575-444b-a0a9-bb509c4166ce","block_type":"box","text":"highest. While such obligations will likely have some quality and protective","page_number":157,"box":{"x":226,"y":707,"width":550,"height":12}},{"id":"045aeefc-fca5-4339-bfed-8e798fbae6c1","block_type":"box","text":"characteristics, these may be outweighed by large uncertainties or major exposure to","page_number":157,"box":{"x":226,"y":722,"width":631,"height":12}},{"id":"c44c1249-7da2-4e58-af2e-d884a270596b","block_type":"box","text":"adverse conditions.","page_number":157,"box":{"x":226,"y":738,"width":143,"height":9}},{"id":"8fc7f5f9-e6e5-4da8-bb44-be80a9faf41e","block_type":"box","text":"BB An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues.","page_number":157,"box":{"x":117,"y":761,"width":758,"height":12}},{"id":"ceec04eb-4630-447c-b224-9cdeca87702c","block_type":"box","text":"However, it faces major ongoing uncertainties or exposure to adverse business,","page_number":157,"box":{"x":226,"y":776,"width":591,"height":13}},{"id":"3d1d4ba4-08a3-4801-8354-7b2d1c4d19c2","block_type":"box","text":"financial, or economic conditions that could lead to the obligor’s inadequate capacity to","page_number":157,"box":{"x":225,"y":792,"width":644,"height":12}},{"id":"5eda2e85-d8f1-421c-922d-a36f21fac1cf","block_type":"box","text":"meet its financial commitments on the obligation.","page_number":157,"box":{"x":226,"y":807,"width":361,"height":13}},{"id":"e40d7e94-8e75-40e7-beb8-5e87551700d8","block_type":"box","text":"B An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but","page_number":157,"box":{"x":117,"y":831,"width":767,"height":12}},{"id":"1c76a229-4611-40de-918d-c266f7e9768c","block_type":"box","text":"the obligor currently has the capacity to meet its financial commitments on the","page_number":157,"box":{"x":225,"y":846,"width":584,"height":12}},{"id":"c9266f1f-ddbb-4eb8-a1d8-d796ae3c1665","block_type":"box","text":"obligation. Adverse business, financial, or economic conditions will likely impair the","page_number":157,"box":{"x":226,"y":862,"width":619,"height":12}},{"id":"3229ac5b-31eb-4692-83c6-cdb5c448cdac","block_type":"box","text":"obligor’s capacity or willingness to meet its financial commitments on the obligation.","page_number":157,"box":{"x":226,"y":877,"width":625,"height":12}},{"id":"c7af3e8a-221e-4aa5-9074-33add2363841","block_type":"box","text":"A-5","page_number":157,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"008783b0-ce2e-4695-baf6-49484daff230","block_type":"box","text":"NM1026U-6033243-157/221","page_number":157,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"f2330d8a-1ca0-4338-a932-f75643119785","block_type":"box","text":"CCC An obligation rated ‘CCC’ is currently vulnerable to nonpayment and is dependent upon","page_number":158,"box":{"x":117,"y":87,"width":762,"height":12}},{"id":"2dcbf3ac-0dec-4238-badb-4feccaa9019f","block_type":"box","text":"favorable business, financial, and economic conditions for the obligor to meet its","page_number":158,"box":{"x":225,"y":102,"width":601,"height":13}},{"id":"b18ec75d-3ca2-446b-a54d-3540ace9144a","block_type":"box","text":"financial commitments on the obligation. In the event of adverse business, financial, or","page_number":158,"box":{"x":225,"y":118,"width":647,"height":12}},{"id":"51d9c1fc-9fee-47a6-a478-c58fc23ba7d3","block_type":"box","text":"economic conditions, the obligor is not likely to have the capacity to meet its financial","page_number":158,"box":{"x":226,"y":134,"width":634,"height":12}},{"id":"7912e2cd-61a2-4a75-88dc-01a4c8daa1bd","block_type":"box","text":"commitments on the obligation.","page_number":158,"box":{"x":226,"y":149,"width":237,"height":12}},{"id":"33ca7eed-f383-4fa1-90ec-a91dedbb0a41","block_type":"box","text":"CC An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. The ‘CC’ rating is","page_number":158,"box":{"x":117,"y":172,"width":761,"height":12}},{"id":"e2aeae72-cbbf-472d-8855-4dadedb86ac3","block_type":"box","text":"used when a default has not yet occurred but S&P expects default to be a virtual","page_number":158,"box":{"x":226,"y":188,"width":602,"height":12}},{"id":"606d8cd7-4029-4b9d-9222-d01a963a3df4","block_type":"box","text":"certainty, regardless of the anticipated time to default.","page_number":158,"box":{"x":226,"y":203,"width":404,"height":12}},{"id":"88914262-1a42-4310-a0a9-73c1941b7427","block_type":"box","text":"C An obligation rated ‘C’ is currently highly vulnerable to nonpayment, and the obligation is","page_number":158,"box":{"x":117,"y":227,"width":769,"height":12}},{"id":"d179c32a-f118-4e3f-a4f3-e77deeefd7a0","block_type":"box","text":"expected to have lower relative seniority or lower ultimate recovery compared with","page_number":158,"box":{"x":226,"y":242,"width":615,"height":12}},{"id":"6ec0bdb1-ddc7-44c9-8b91-c752b21c07c6","block_type":"box","text":"obligations that are rated higher.","page_number":158,"box":{"x":226,"y":258,"width":245,"height":12}},{"id":"38c0cf8c-7800-47f8-9476-cdb3086f78ad","block_type":"box","text":"D An obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid","page_number":158,"box":{"x":117,"y":281,"width":751,"height":12}},{"id":"e4e03fb0-d8bc-4294-b67b-e894599c8a07","block_type":"box","text":"capital instruments, the ‘D’ rating category is used when payments on an obligation are","page_number":158,"box":{"x":226,"y":296,"width":650,"height":12}},{"id":"a27e7b76-0f5d-4ce0-adcd-6b2eca20ec13","block_type":"box","text":"not made on the date due, unless S&P believes that such payments will be made within","page_number":158,"box":{"x":226,"y":312,"width":655,"height":12}},{"id":"4abee9d2-0f28-42b1-ae64-3ee40f54e4f7","block_type":"box","text":"five business days in the absence of a stated grace period or within the earlier of the","page_number":158,"box":{"x":225,"y":327,"width":632,"height":12}},{"id":"af6e4289-5236-44c1-aef3-50f9a4e64450","block_type":"box","text":"stated grace period or 30 calendar days. The ‘D’ rating also will be used upon the filing","page_number":158,"box":{"x":226,"y":343,"width":647,"height":12}},{"id":"5e766849-399b-4d9a-ba28-bd6d7b1995b8","block_type":"box","text":"of a bankruptcy petition or the taking of similar action and where default on an obligation","page_number":158,"box":{"x":226,"y":358,"width":659,"height":12}},{"id":"14a14e40-9324-4230-a159-fd9203344157","block_type":"box","text":"is a virtual certainty, for example due to automatic stay provisions. A rating on an","page_number":158,"box":{"x":226,"y":374,"width":605,"height":12}},{"id":"7a56962a-baa2-44be-bb5a-6532abbc9f53","block_type":"box","text":"obligation is lowered to ‘D’ if it is subject to a distressed debt restructuring.","page_number":158,"box":{"x":226,"y":389,"width":555,"height":12}},{"id":"5378ff60-6d05-4762-9323-da2bfcdb7a08","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":158,"box":{"x":143,"y":420,"width":705,"height":9}},{"id":"889fcd09-5d9a-4423-94d9-908409f643fb","block_type":"box","text":"within the rating categories.","page_number":158,"box":{"x":170,"y":433,"width":162,"height":9}},{"id":"89f66be4-71d0-43dc-84ed-7f69061b695d","block_type":"box","text":"Short-Term Issue Credit Ratings","page_number":158,"box":{"x":116,"y":462,"width":263,"height":12}},{"id":"f1d806ad-9975-4776-ad24-3857329c48ff","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":158,"box":{"x":116,"y":493,"width":765,"height":12}},{"id":"7848355e-7129-4e7f-9122-9ace24c567ce","block_type":"box","text":"capacity to meet its financial commitments on the obligation is strong. Within this","page_number":158,"box":{"x":226,"y":508,"width":603,"height":12}},{"id":"3aa0cc3d-2f3e-46a0-8325-32e5d6494527","block_type":"box","text":"category, certain obligations are designated with a plus sign (+). This indicates that the","page_number":158,"box":{"x":226,"y":524,"width":648,"height":12}},{"id":"ad669ecf-5906-4aba-98e2-6f7782079dba","block_type":"box","text":"obligor’s capacity to meet its financial commitments on these obligations is extremely","page_number":158,"box":{"x":226,"y":539,"width":635,"height":12}},{"id":"527292e6-42a8-492e-9cf5-d0925c6fa071","block_type":"box","text":"strong.","page_number":158,"box":{"x":226,"y":555,"width":55,"height":12}},{"id":"8fbf2ebe-ce9f-4dc9-b7da-3555cf053dea","block_type":"box","text":"A-2 A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects","page_number":158,"box":{"x":116,"y":578,"width":760,"height":12}},{"id":"f6c86535-a536-464f-ac63-7ce492845604","block_type":"box","text":"of changes in circumstances and economic conditions than obligations in higher rating","page_number":158,"box":{"x":226,"y":593,"width":644,"height":13}},{"id":"40075e56-4e46-477a-93ec-5f0522596ee2","block_type":"box","text":"categories. However, the obligor’s capacity to meet its financial commitments on the","page_number":158,"box":{"x":226,"y":609,"width":629,"height":12}},{"id":"4ddb7fbe-9ac9-4fef-9c81-6ea31683b364","block_type":"box","text":"obligation is satisfactory.","page_number":158,"box":{"x":226,"y":624,"width":187,"height":13}},{"id":"0da26955-e542-4465-a957-05ff188d7b55","block_type":"box","text":"A-3 A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However,","page_number":158,"box":{"x":116,"y":648,"width":750,"height":12}},{"id":"9f5cc97d-e0af-424d-b6b3-395aa7df83a1","block_type":"box","text":"adverse economic conditions or changing circumstances are more likely to weaken an","page_number":158,"box":{"x":226,"y":663,"width":639,"height":12}},{"id":"526092ee-aaa4-4417-b2b4-87893898e142","block_type":"box","text":"obligor’s capacity to meet its financial commitments on the obligation.","page_number":158,"box":{"x":226,"y":679,"width":513,"height":12}},{"id":"42016a9c-840a-479c-9be5-d0dfde3b3e76","block_type":"box","text":"B A short-term obligation rated ‘B’ is regarded as vulnerable and has significant","page_number":158,"box":{"x":117,"y":702,"width":681,"height":12}},{"id":"6969fc8c-fe35-4008-881f-ed211fcabc5b","block_type":"box","text":"speculative characteristics. The obligor currently has the capacity to meet its financial","page_number":158,"box":{"x":226,"y":717,"width":632,"height":13}},{"id":"9495aae0-41e1-4243-83a7-9678352377bf","block_type":"box","text":"commitments; however, it faces major ongoing uncertainties that could lead to the","page_number":158,"box":{"x":226,"y":733,"width":607,"height":12}},{"id":"7edecd11-749a-49d4-9be0-6f36ac869403","block_type":"box","text":"obligor’s inadequate capacity to meet its financial commitments.","page_number":158,"box":{"x":226,"y":748,"width":473,"height":13}},{"id":"3b301548-afa7-49c8-9d44-d6b52ca0b154","block_type":"box","text":"C A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent","page_number":158,"box":{"x":117,"y":772,"width":763,"height":12}},{"id":"3cee92b7-0be0-4867-8717-5094aeb84efb","block_type":"box","text":"upon favorable business, financial, and economic conditions for the obligor to meet its","page_number":158,"box":{"x":226,"y":787,"width":636,"height":12}},{"id":"3b98ee24-5b8d-4b1b-a64a-54de6da1410c","block_type":"box","text":"financial commitments on the obligation.","page_number":158,"box":{"x":225,"y":803,"width":298,"height":12}},{"id":"0e21292f-29a7-4bb8-8841-b48ea1882772","block_type":"box","text":"A-6","page_number":158,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"6feb6ab0-5dae-4f2c-9ae1-8a7f31806d1c","block_type":"box","text":"NM1026U-6033243-158/221","page_number":158,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"96eba52e-7ebb-40b6-9fb9-cc382e6bbbcf","block_type":"box","text":"D A short-term obligation rated ‘D’ is in default or in breach of an imputed promise. For","page_number":159,"box":{"x":117,"y":87,"width":739,"height":12}},{"id":"db545d55-5ec3-4409-8d7d-ed42c12584e1","block_type":"box","text":"non-hybrid capital instruments, the ‘D’ rating category is used when payments on an","page_number":159,"box":{"x":226,"y":102,"width":629,"height":13}},{"id":"8b6305e0-4ec9-4b97-ab86-916ba188066f","block_type":"box","text":"obligation are not made on the date due, unless S&P believes that such payments will","page_number":159,"box":{"x":226,"y":118,"width":643,"height":12}},{"id":"715c442f-b5b7-4319-92ad-74259e9ecb30","block_type":"box","text":"be made within any stated grace period. However, any stated grace period longer than","page_number":159,"box":{"x":226,"y":134,"width":648,"height":12}},{"id":"d7d28d98-bbe7-434a-9bb0-e8bfb32db765","block_type":"box","text":"five business days will be treated as five business days. The ‘D’ rating also will be used","page_number":159,"box":{"x":225,"y":149,"width":653,"height":12}},{"id":"13179d87-707e-423c-b5b3-17905d9dac94","block_type":"box","text":"upon the filing of a bankruptcy petition or the taking of a similar action and where default","page_number":159,"box":{"x":226,"y":165,"width":659,"height":12}},{"id":"f44e099e-1614-4551-82ee-35af6cd50c68","block_type":"box","text":"on an obligation is a virtual certainty, for example due to automatic stay provisions. A","page_number":159,"box":{"x":226,"y":180,"width":635,"height":12}},{"id":"a07cc708-f950-4a7d-b809-b0d8ec658d89","block_type":"box","text":"rating on an obligation is lowered to ‘D’ if it is subject to a distressed debt restructuring.","page_number":159,"box":{"x":226,"y":196,"width":648,"height":12}},{"id":"b5276514-807c-460e-a163-117dd0497f29","block_type":"box","text":"Description of S&P’s Municipal Short-Term Note Ratings","page_number":159,"box":{"x":117,"y":227,"width":456,"height":12}},{"id":"eaeb1f02-5d80-40e0-b255-87a154c22ef8","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":159,"box":{"x":116,"y":258,"width":766,"height":12}},{"id":"a49b8db9-d90a-442a-81fd-b0a5a1863325","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":159,"box":{"x":117,"y":273,"width":748,"height":12}},{"id":"4914ccc8-b060-43b9-b8bd-0e2b4f315efd","block_type":"box","text":"an original maturity of more than three years will most likely receive a long-term debt rating. In","page_number":159,"box":{"x":116,"y":289,"width":703,"height":12}},{"id":"04795a70-9f08-4924-9fd8-0c780df9bccd","block_type":"box","text":"determining which type of rating, if any, to assign, S&P’s analysis will review the following","page_number":159,"box":{"x":116,"y":304,"width":668,"height":12}},{"id":"9fba7bb3-e870-4ef2-befc-297faa38db5e","block_type":"box","text":"considerations:","page_number":159,"box":{"x":116,"y":320,"width":118,"height":9}},{"id":"195d67f6-40a5-469b-8a07-95320adbcfa7","block_type":"box","text":"• Amortization schedule — the larger the final maturity relative to other maturities, the more likely it","page_number":159,"box":{"x":125,"y":351,"width":750,"height":12}},{"id":"ae80659f-39e9-4df1-a02e-6b0262c0ed58","block_type":"box","text":"will be treated as a note; and","page_number":159,"box":{"x":149,"y":366,"width":220,"height":11}},{"id":"410cfd5e-1b8e-4d8a-95a5-4c93d6cb6b4a","block_type":"box","text":"• Source of payment — the more dependent the issue is on the market for its refinancing, the more","page_number":159,"box":{"x":125,"y":389,"width":753,"height":12}},{"id":"812cb3f2-ab47-44b7-8af2-a67c74782035","block_type":"box","text":"likely it will be treated as a note.","page_number":159,"box":{"x":150,"y":405,"width":242,"height":12}},{"id":"8d7472ac-cb94-42ac-9916-0799b48d848f","block_type":"box","text":"S&P’s municipal short-term note rating symbols are as follows:","page_number":159,"box":{"x":116,"y":436,"width":470,"height":12}},{"id":"355d1517-c28a-4b13-b0ef-f79bc4cad9ea","block_type":"box","text":"SP-1 Strong capacity to pay principal and interest. An issue determined to possess a very","page_number":159,"box":{"x":116,"y":467,"width":739,"height":12}},{"id":"500dfbb4-fc6f-401b-9758-43cf4fcb8904","block_type":"box","text":"strong capacity to pay debt service is given a plus (+) designation.","page_number":159,"box":{"x":226,"y":482,"width":496,"height":12}},{"id":"bdd04088-cc01-4cef-9dc7-378bcde2f734","block_type":"box","text":"SP-2 Satisfactory capacity to pay principal and interest, with some vulnerability to adverse","page_number":159,"box":{"x":116,"y":506,"width":741,"height":12}},{"id":"9432895f-2d4e-4cb0-bba8-9a6dcc825dce","block_type":"box","text":"financial and economic changes over the term of the notes.","page_number":159,"box":{"x":225,"y":521,"width":446,"height":12}},{"id":"8b5aabf3-2a98-4851-bf30-505a4ff6d9e4","block_type":"box","text":"SP-3 Speculative capacity to pay principal and interest.","page_number":159,"box":{"x":116,"y":544,"width":482,"height":12}},{"id":"276e56aa-630c-4936-a3c6-3cb5b8408b9d","block_type":"box","text":"D ‘D’ is assigned upon failure to pay the note when due, completion of a distressed debt","page_number":159,"box":{"x":117,"y":568,"width":750,"height":12}},{"id":"04ab82e2-8ab7-45aa-a8f3-1921d4051501","block_type":"box","text":"restructuring, or the filing of a bankruptcy petition or the taking of similar action and","page_number":159,"box":{"x":226,"y":583,"width":620,"height":12}},{"id":"852ba633-ea97-409a-b6d6-7d1b10ea1f62","block_type":"box","text":"where default on an obligation is a virtual certainty, for example due to automatic stay","page_number":159,"box":{"x":225,"y":599,"width":640,"height":12}},{"id":"64b800d0-4c20-4b2f-acc4-c6e0e115f7b0","block_type":"box","text":"provisions.","page_number":159,"box":{"x":226,"y":614,"width":84,"height":12}},{"id":"6126a863-7fb5-4934-bdd1-2aec2c0a8a55","block_type":"box","text":"Description of Fitch Ratings’ (“Fitch’s”) Credit Ratings Scales","page_number":159,"box":{"x":117,"y":645,"width":498,"height":12}},{"id":"c3dc6bb4-ba4b-4211-b4e0-0347387a1e8b","block_type":"box","text":"Fitch Ratings publishes opinions on a variety of scales. The most common of these are credit ratings,","page_number":159,"box":{"x":117,"y":676,"width":750,"height":12}},{"id":"01c226ee-755f-473e-94de-271524bbaace","block_type":"box","text":"but the agency also publishes ratings, scores and other relative opinions relating to financial or","page_number":159,"box":{"x":117,"y":692,"width":701,"height":12}},{"id":"77276950-0e1d-42de-b79c-ef05cf794a83","block_type":"box","text":"operational strength. For example, Fitch also provides specialized ratings of servicers of residential","page_number":159,"box":{"x":116,"y":707,"width":734,"height":12}},{"id":"572a08c7-94ac-4cbb-b1c4-0817dcf99af1","block_type":"box","text":"and commercial mortgages, asset managers and funds. In each case, users should refer to the","page_number":159,"box":{"x":116,"y":723,"width":706,"height":12}},{"id":"eb29330a-2dcb-45d0-9ab2-3d787fb0fdbb","block_type":"box","text":"definitions of each individual scale for guidance on the dimensions of risk covered in each assessment.","page_number":159,"box":{"x":116,"y":738,"width":763,"height":12}},{"id":"1245b336-b24e-42c6-a61d-8fede7cc23a2","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":159,"box":{"x":117,"y":769,"width":702,"height":12}},{"id":"d862d4bd-713e-47d5-9c72-2c8de8eeed92","block_type":"box","text":"financial commitments, such as interest, preferred dividends, repayment of principal, insurance claims","page_number":159,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"659507e1-ce3e-411b-9308-9fd201cc656c","block_type":"box","text":"or counterparty obligations. Credit ratings relating to securities and obligations of an issuer can include","page_number":159,"box":{"x":116,"y":800,"width":761,"height":12}},{"id":"cdf009b5-c11a-4292-b20a-1d309e085c82","block_type":"box","text":"a recovery expectation. Credit ratings are used by investors as indications of the likelihood of receiving","page_number":159,"box":{"x":116,"y":816,"width":761,"height":12}},{"id":"8e017d45-b39e-4aee-a2ea-ced0c78b1328","block_type":"box","text":"the money owed to them in accordance with the terms on which they invested. The agency’s credit","page_number":159,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"105d05d4-4d7d-4523-864e-940ed0bc9bb4","block_type":"box","text":"ratings cover the global spectrum of corporate, sovereign financial, bank, insurance, and public finance","page_number":159,"box":{"x":117,"y":847,"width":768,"height":12}},{"id":"1d8315a6-0dd7-4c96-bd77-96179ab7610d","block_type":"box","text":"entities (including supranational and sub-national entities) and the securities or other obligations they","page_number":159,"box":{"x":116,"y":862,"width":754,"height":12}},{"id":"9f8b1d75-a322-497b-aadd-0d656b9d7887","block_type":"box","text":"issue, as well as structured finance securities backed by receivables or other financial assets.","page_number":159,"box":{"x":117,"y":878,"width":698,"height":12}},{"id":"ee2ba792-a285-48b0-a838-0cd68cf865ed","block_type":"box","text":"A-7","page_number":159,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"d458b716-74fe-49b8-910e-1a0e2459530f","block_type":"box","text":"NM1026U-6033243-159/221","page_number":159,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"500e5dee-9743-477c-88f3-3670a04cb5fc","block_type":"box","text":"The terms “investment grade” and “speculative grade” have established themselves over time as","page_number":160,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"63540186-be0a-4e6d-9b6c-0de6719adb1f","block_type":"box","text":"shorthand to describe the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to ‘D’ (speculative","page_number":160,"box":{"x":116,"y":102,"width":737,"height":13}},{"id":"3249b12d-2ce2-400b-8a5e-a781ad06ae30","block_type":"box","text":"grade). The terms investment grade and speculative grade are market conventions and do not imply","page_number":160,"box":{"x":116,"y":118,"width":749,"height":12}},{"id":"c9740d3e-3954-4fb3-81e9-a5f2f663d903","block_type":"box","text":"any recommendation or endorsement of a specific security for investment purposes. Investment grade","page_number":160,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"705cc486-b360-4ac0-a940-53796f4e5156","block_type":"box","text":"categories indicate relatively low to moderate credit risk, while ratings in the speculative categories","page_number":160,"box":{"x":116,"y":149,"width":737,"height":12}},{"id":"2e4af5b5-d3cc-44e0-8fe1-ed1ba4e8a29d","block_type":"box","text":"either signal a higher level of credit risk or that a default has already occurred.","page_number":160,"box":{"x":116,"y":165,"width":584,"height":12}},{"id":"97f5520e-e193-4455-9e3a-e3b10a3afa2d","block_type":"box","text":"For the convenience of investors, Fitch may also include issues relating to a rated issuer that are not","page_number":160,"box":{"x":117,"y":196,"width":750,"height":12}},{"id":"cab8d50a-3f31-47af-8fd2-f9233e3e575b","block_type":"box","text":"and have not been rated on its web page. Such issues are also denoted as ‘NR’.","page_number":160,"box":{"x":116,"y":211,"width":603,"height":12}},{"id":"d37d1657-eaf3-46c8-82cb-0def35cfcfe0","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":160,"box":{"x":117,"y":242,"width":770,"height":12}},{"id":"78e3f8b8-4ff0-41c3-9b7e-5ba09858136a","block_type":"box","text":"and are not predictive of a specific frequency of default or loss. For information about the historical","page_number":160,"box":{"x":116,"y":258,"width":735,"height":12}},{"id":"d7b133e8-10f8-468d-ac9d-a5ea1ee67f5b","block_type":"box","text":"performance of ratings please refer to Fitch’s Ratings Transition and Default studies which detail the","page_number":160,"box":{"x":117,"y":273,"width":747,"height":12}},{"id":"ed5a4c64-9d06-4ffd-9c0c-887c8d4cf4b8","block_type":"box","text":"historical default rates and their meaning. The European Securities and Markets Authority also","page_number":160,"box":{"x":117,"y":289,"width":705,"height":12}},{"id":"b7fe1475-2e3e-43a8-bd82-7b96cb5a7ad3","block_type":"box","text":"maintains a central repository of historical default rates.","page_number":160,"box":{"x":117,"y":304,"width":415,"height":12}},{"id":"cd1db562-fc46-43a8-bff8-07ad5f4c9e9f","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":160,"box":{"x":117,"y":335,"width":756,"height":12}},{"id":"0fbaeac3-d123-4b54-a20e-16940b64e205","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":160,"box":{"x":116,"y":351,"width":747,"height":12}},{"id":"80cfed15-33b1-4540-ba15-598c10ae10b7","block_type":"box","text":"and other market considerations. However, in terms of payment obligation on the rated liability, market","page_number":160,"box":{"x":116,"y":366,"width":765,"height":12}},{"id":"641e1cff-2226-496f-8b4e-ae9955204f01","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":160,"box":{"x":117,"y":382,"width":674,"height":12}},{"id":"38e4bccf-d806-4039-9b56-8613d73b4f56","block_type":"box","text":"commitment.","page_number":160,"box":{"x":116,"y":397,"width":101,"height":10}},{"id":"7f5ff53e-d866-4f45-a38e-dd9521710eaa","block_type":"box","text":"Ratings nonetheless do not reflect market risk to the extent that they influence the size or other","page_number":160,"box":{"x":117,"y":428,"width":709,"height":12}},{"id":"b72f911d-d85b-47d5-b331-c350f26568b6","block_type":"box","text":"conditionality of the obligation to pay upon a commitment (for example, in the case of index-linked","page_number":160,"box":{"x":116,"y":444,"width":731,"height":12}},{"id":"519c92a8-e86f-4d54-a765-06e73171d53a","block_type":"box","text":"bonds).","page_number":160,"box":{"x":117,"y":459,"width":59,"height":12}},{"id":"b76304b9-fa37-427a-8dd3-3eb9f9abf04d","block_type":"box","text":"In the default components of ratings assigned to individual obligations or instruments, the agency","page_number":160,"box":{"x":117,"y":490,"width":725,"height":12}},{"id":"254fe7a3-b5bb-46ac-9129-07b291959ecb","block_type":"box","text":"typically rates to the likelihood of non-payment or default in accordance with the terms of that","page_number":160,"box":{"x":116,"y":506,"width":695,"height":12}},{"id":"42160ce1-77b5-4bae-a2ce-b09ae7fb186f","block_type":"box","text":"instrument’s documentation. In limited cases, Fitch may include additional considerations (","page_number":160,"box":{"x":117,"y":521,"width":670,"height":12}},{"id":"40523c22-ac05-4ffa-a9d9-877d94f2c6f8","block_type":"box","text":"i.e.","page_number":160,"box":{"x":788,"y":521,"width":20,"height":10}},{"id":"fcfa9778-2cab-4f1a-a18c-80e693ddca49","block_type":"box","text":"rate to a","page_number":160,"box":{"x":810,"y":521,"width":71,"height":10}},{"id":"615ccb45-cffd-4e63-86be-225e8806a0be","block_type":"box","text":"higher or lower standard than that implied in the obligation’s documentation).","page_number":160,"box":{"x":117,"y":537,"width":573,"height":12}},{"id":"3f0697ac-a00d-4a51-bf47-7cacc5ca2537","block_type":"box","text":"The primary credit rating scales can be used to provide a rating of privately issued obligations or","page_number":160,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"4d602791-d88c-4711-b0a7-2b2359b3266f","block_type":"box","text":"certain note issuance programs or for private ratings. In this case the rating is not published, but only","page_number":160,"box":{"x":116,"y":583,"width":753,"height":12}},{"id":"a1a24afd-7bec-45f3-8aef-78e31f06c462","block_type":"box","text":"provided to the issuer or its agents in the form of a rating letter.","page_number":160,"box":{"x":117,"y":599,"width":472,"height":12}},{"id":"81258569-088f-4b7a-ad5f-f0091e9169d4","block_type":"box","text":"The primary credit rating scales may also be used to provide ratings for a more narrow scope,","page_number":160,"box":{"x":116,"y":630,"width":702,"height":12}},{"id":"33a93ac0-b012-460c-84d4-10cfd2af08b9","block_type":"box","text":"including interest strips and return of principal or in other forms of opinions such as credit opinions or","page_number":160,"box":{"x":117,"y":645,"width":751,"height":12}},{"id":"05683c56-5864-46e4-8af1-f998372350b4","block_type":"box","text":"rating assessment services. Credit opinions are either a notch- or category-specific view using the","page_number":160,"box":{"x":117,"y":661,"width":726,"height":12}},{"id":"84dcfba4-bf37-4e3a-920e-caad52d79eed","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":160,"box":{"x":117,"y":676,"width":731,"height":12}},{"id":"b7a7d890-5474-496b-9f3a-b05eb2bcba7a","block_type":"box","text":"standard. Credit opinions will be indicated using a lower case letter symbol combined with either an ‘*’","page_number":160,"box":{"x":116,"y":692,"width":754,"height":12}},{"id":"a6745fd5-c07b-4bd7-8965-5da258df7872","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":160,"box":{"x":117,"y":707,"width":743,"height":12}},{"id":"4a65df24-d478-4811-9729-f04bb57ccde6","block_type":"box","text":"but may be monitored if the analytical group believes information will be sufficiently available. Rating","page_number":160,"box":{"x":117,"y":723,"width":742,"height":12}},{"id":"7a0f3ddc-6f7c-432f-abf0-7f8ecb49b9a3","block_type":"box","text":"assessment services are a notch-specific view using the primary rating scale of how an existing or","page_number":160,"box":{"x":116,"y":738,"width":729,"height":12}},{"id":"4aa8c730-46cd-4fef-974b-4d67a2b5d292","block_type":"box","text":"potential rating may be changed by a given set of hypothetical circumstances. While credit opinions","page_number":160,"box":{"x":117,"y":754,"width":736,"height":12}},{"id":"fc2aa345-d333-4e60-9d17-3da2cc4de5a8","block_type":"box","text":"and rating assessment services are point-in-time and are not monitored, they may have a directional","page_number":160,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"dc95e750-fd6f-4ad6-a4d9-4711605f4f15","block_type":"box","text":"watch or outlook assigned, which can signify the trajectory of the credit profile.","page_number":160,"box":{"x":116,"y":785,"width":579,"height":12}},{"id":"0b7e1397-e5dc-4f5f-b399-35bc1a91820e","block_type":"box","text":"Description of Fitch’s Long-Term Corporate Finance Obligations Rating Scales","page_number":160,"box":{"x":117,"y":816,"width":629,"height":12}},{"id":"3afb439e-33cb-4fd3-bc21-15bfadcb6ac5","block_type":"box","text":"Ratings of individual securities or financial obligations of a corporate issuer address relative","page_number":160,"box":{"x":117,"y":847,"width":682,"height":12}},{"id":"1d745e63-2388-4ca1-adcb-ae020a2bce9f","block_type":"box","text":"vulnerability to default on an ordinal scale. In addition, for financial obligations in corporate finance, a","page_number":160,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"8121c402-9f62-462d-9204-f9890a953c5b","block_type":"box","text":"measure of recovery given default on that liability is also included in the rating assessment. This","page_number":160,"box":{"x":117,"y":878,"width":716,"height":12}},{"id":"7d335906-d024-4872-89eb-ec5fce614b13","block_type":"box","text":"A-8","page_number":160,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"0be6a8bb-c64e-4209-80dc-9c0aee6e9104","block_type":"box","text":"NM1026U-6033243-160/221","page_number":160,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"91d60db2-ba82-48ee-8e42-e7183811dff8","block_type":"box","text":"notably applies to covered bonds ratings, which incorporate both an indication of the probability of","page_number":161,"box":{"x":117,"y":87,"width":729,"height":12}},{"id":"e9e8e0f9-2c34-4b9c-94ad-18fab0ecaf4e","block_type":"box","text":"default and of the recovery given a default of this debt instrument. On the contrary, Ratings of","page_number":161,"box":{"x":116,"y":102,"width":699,"height":13}},{"id":"73f124cb-190e-4ef1-92ef-49978bc64a69","block_type":"box","text":"debtor-in-possession (“DIP”) obligations incorporate the expectation of full repayment.","page_number":161,"box":{"x":116,"y":118,"width":642,"height":12}},{"id":"fcf474f1-065f-4e1d-b9f2-dc56143c4679","block_type":"box","text":"The relationship between the issuer scale and obligation scale assumes a generic historical average","page_number":161,"box":{"x":116,"y":149,"width":750,"height":12}},{"id":"d5cb9b4d-54c9-41c4-b074-647eca893ec0","block_type":"box","text":"recovery. Individual obligations can be assigned ratings higher, lower, or the same as that entity’s","page_number":161,"box":{"x":117,"y":165,"width":728,"height":12}},{"id":"c05c5473-2066-4599-a9a4-9f37595f5408","block_type":"box","text":"issuer rating or issuer default rating (“IDR”), based on their relative ranking, relative vulnerability to","page_number":161,"box":{"x":117,"y":180,"width":733,"height":12}},{"id":"a1a03cf5-44d1-4a41-907c-67625aa4b437","block_type":"box","text":"default or based on explicit Recovery Ratings.","page_number":161,"box":{"x":116,"y":196,"width":347,"height":12}},{"id":"ef9c187c-6421-4064-9e48-715f6b484cda","block_type":"box","text":"As a result, individual obligations of entities, such as corporations, are assigned ratings higher, lower,","page_number":161,"box":{"x":116,"y":227,"width":756,"height":12}},{"id":"4666f1b9-5b0d-45c3-ad18-0e6fbc27374f","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":161,"box":{"x":116,"y":242,"width":766,"height":12}},{"id":"180381ff-f7ed-44d6-9a76-d75680883039","block_type":"box","text":"IDR. At the lower end of the ratings scale, Fitch publishes explicit Recovery Ratings in many cases to","page_number":161,"box":{"x":117,"y":258,"width":756,"height":12}},{"id":"89cb4668-e587-4dd4-b23d-1bc1094d77ff","block_type":"box","text":"complement issuer and obligation ratings.","page_number":161,"box":{"x":116,"y":273,"width":315,"height":12}},{"id":"1f44da8d-a5b9-4346-82d5-12facf642540","block_type":"box","text":"Fitch long-term obligations rating scales are as follows:","page_number":161,"box":{"x":117,"y":304,"width":412,"height":12}},{"id":"42e2e800-d35f-4cbe-8971-dbd9e2718dd5","block_type":"box","text":"AAA Highest Credit Quality. ‘AAA’ ratings denote the lowest expectation of credit risk. They","page_number":161,"box":{"x":116,"y":335,"width":753,"height":12}},{"id":"1497c8e6-9568-4c59-a72f-d6c414543ad5","block_type":"box","text":"are assigned only in cases of exceptionally strong capacity for payment of financial","page_number":161,"box":{"x":226,"y":351,"width":619,"height":12}},{"id":"47dcffce-b145-430b-a23a-a613119ff4d9","block_type":"box","text":"commitments. This capacity is highly unlikely to be adversely affected by foreseeable","page_number":161,"box":{"x":226,"y":366,"width":636,"height":12}},{"id":"bee9ad3d-6eca-4619-b0b5-f680325e068e","block_type":"box","text":"events.","page_number":161,"box":{"x":226,"y":382,"width":58,"height":9}},{"id":"d876f7d5-bcc7-4b2f-bb17-758cfc472cbe","block_type":"box","text":"AA Very High Credit Quality. ‘AA’ ratings denote expectations of very low credit risk. They","page_number":161,"box":{"x":116,"y":405,"width":753,"height":12}},{"id":"5713e848-5930-4407-af18-2d45e2883efe","block_type":"box","text":"indicate very strong capacity for payment of financial commitments. This capacity is not","page_number":161,"box":{"x":226,"y":420,"width":652,"height":12}},{"id":"88e3be0f-a502-4749-8643-73f231169af6","block_type":"box","text":"significantly vulnerable to foreseeable events.","page_number":161,"box":{"x":226,"y":436,"width":343,"height":12}},{"id":"076563ea-2b8a-473e-9220-6b021d7a283f","block_type":"box","text":"A High Credit Quality. ‘A’ ratings denote expectations of low credit risk. The capacity for","page_number":161,"box":{"x":116,"y":459,"width":748,"height":12}},{"id":"735ada16-f83d-4d3e-bd43-398cabb37d6a","block_type":"box","text":"payment of financial commitments is considered strong. This capacity may,","page_number":161,"box":{"x":226,"y":475,"width":562,"height":12}},{"id":"0a63e5c3-8e8d-4b7c-987c-bcf72e2e98e2","block_type":"box","text":"nevertheless, be more vulnerable to adverse business or economic conditions than is","page_number":161,"box":{"x":226,"y":490,"width":638,"height":11}},{"id":"22649fa8-2f44-44b4-a332-f3f43f328716","block_type":"box","text":"the case for higher ratings.","page_number":161,"box":{"x":225,"y":506,"width":204,"height":12}},{"id":"b87d8f1d-9295-4a54-aaaa-468db0828837","block_type":"box","text":"BBB Good Credit Quality. ‘BBB’ ratings indicate that expectations of credit risk are currently","page_number":161,"box":{"x":117,"y":529,"width":755,"height":12}},{"id":"bb57a011-28cd-4344-bb1b-abed1d4a90bf","block_type":"box","text":"low. The capacity for payment of financial commitments is considered adequate, but","page_number":161,"box":{"x":226,"y":544,"width":629,"height":12}},{"id":"5e5c5b21-4302-4f28-ae66-f92188653db0","block_type":"box","text":"adverse business or economic conditions are more likely to impair this capacity.","page_number":161,"box":{"x":226,"y":560,"width":597,"height":12}},{"id":"5bff3a5e-9bca-4b24-a5a2-96aeffdf0e91","block_type":"box","text":"BB Speculative. ‘BB’ ratings indicate an elevated vulnerability to credit risk, particularly in","page_number":161,"box":{"x":117,"y":583,"width":746,"height":12}},{"id":"e00590fb-25f2-4ef9-b632-f7146a3a4bbc","block_type":"box","text":"the event of adverse changes in business or economic conditions over time; however,","page_number":161,"box":{"x":225,"y":599,"width":643,"height":12}},{"id":"e23441a5-1449-4c67-9f46-8f6648f56911","block_type":"box","text":"business or financial alternatives may be available to allow financial commitments to be","page_number":161,"box":{"x":226,"y":614,"width":653,"height":12}},{"id":"fffb8a5b-ec07-44b4-bc79-3ae451ee29d9","block_type":"box","text":"met.","page_number":161,"box":{"x":226,"y":630,"width":37,"height":9}},{"id":"3dbaaee4-a501-4cda-bc05-bae0ce48891b","block_type":"box","text":"B Highly Speculative. ‘B’ ratings indicate that material credit risk is present.","page_number":161,"box":{"x":117,"y":653,"width":653,"height":12}},{"id":"4b625c40-7d66-4cb4-932b-4b02fded108e","block_type":"box","text":"CCC Substantial Credit Risk. ‘CCC’ ratings indicate that substantial credit risk is present.","page_number":161,"box":{"x":117,"y":676,"width":725,"height":12}},{"id":"446e8975-e45e-4e73-b395-23a5d26d0bda","block_type":"box","text":"CC Very High Levels of Credit Risk. ‘CC’ ratings indicate very high levels of credit risk.","page_number":161,"box":{"x":117,"y":699,"width":719,"height":13}},{"id":"44fbcc42-81ac-408d-ab28-9ccda308e3ff","block_type":"box","text":"C Exceptionally High Levels of Credit Risk. ‘C’ indicates exceptionally high levels of credit","page_number":161,"box":{"x":117,"y":723,"width":756,"height":12}},{"id":"f9acd4cd-269d-464f-8d81-aca8b783dbcc","block_type":"box","text":"risk.","page_number":161,"box":{"x":226,"y":738,"width":28,"height":10}},{"id":"0f8f2cb2-2be6-4cc1-a86e-f6574a84869c","block_type":"box","text":"Within rating categories, Fitch may use modifiers. The modifiers “+” or “-” may be appended to a rating","page_number":161,"box":{"x":116,"y":769,"width":759,"height":12}},{"id":"3dbae921-43fc-459e-b23d-1e7fced4ca9b","block_type":"box","text":"to denote relative status within major rating categories.","page_number":161,"box":{"x":116,"y":785,"width":405,"height":12}},{"id":"1fec6c5a-2625-48a4-950e-36422a597873","block_type":"box","text":"For example, the rating category ‘AA’ has three notch-specific rating levels (‘AA+’; ‘AA’; ‘AA–’; each a","page_number":161,"box":{"x":117,"y":816,"width":750,"height":12}},{"id":"25c506ac-4b5d-4150-bc85-aeb5665abf19","block_type":"box","text":"rating level). Such suffixes are not added to ‘AAA’ ratings and ratings below the ‘CCC’ category. For","page_number":161,"box":{"x":117,"y":831,"width":745,"height":12}},{"id":"89a118a4-1145-4b1c-9ab8-541500478dd6","block_type":"box","text":"the short-term rating category of ‘F1’, a ‘+’ may be appended.","page_number":161,"box":{"x":116,"y":847,"width":461,"height":12}},{"id":"e4ab2c9f-c3c3-4430-8e12-08931181e4b1","block_type":"box","text":"A-9","page_number":161,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"275f79fd-e5bb-4f48-add4-cc70f7e71775","block_type":"box","text":"NM1026U-6033243-161/221","page_number":161,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"4c56ee47-4b1e-47f0-b4d5-e92dbc7ea55c","block_type":"box","text":"Description of Fitch’s Short-Term Ratings Assigned to Issuers and Obligations","page_number":162,"box":{"x":117,"y":87,"width":634,"height":12}},{"id":"7a74541c-d2e4-40ff-8eab-8b32184489f1","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":162,"box":{"x":116,"y":118,"width":764,"height":12}},{"id":"b2d15513-f489-4d65-b575-611932a30d8a","block_type":"box","text":"the rated entity and relates to the capacity to meet financial obligations in accordance with the","page_number":162,"box":{"x":116,"y":134,"width":701,"height":12}},{"id":"9cc9145c-8c1f-450c-80a1-bba17378020f","block_type":"box","text":"documentation governing the relevant obligation. Short-term deposit ratings may be adjusted for loss","page_number":162,"box":{"x":116,"y":149,"width":753,"height":12}},{"id":"fffef00d-9021-4e51-8f1c-accc7c82f938","block_type":"box","text":"severity. Short-term ratings are assigned to obligations whose initial maturity is viewed as “short term”","page_number":162,"box":{"x":116,"y":165,"width":760,"height":12}},{"id":"16593beb-5c49-433d-b27b-fa231dc0c35d","block_type":"box","text":"based on market convention. Typically, this means up to 13 months for corporate, sovereign, and","page_number":162,"box":{"x":117,"y":180,"width":726,"height":12}},{"id":"d22f6a36-4a02-4d1e-aabd-8dbc47413e83","block_type":"box","text":"structured obligations and up to 36 months for obligations in U.S. public finance markets.","page_number":162,"box":{"x":116,"y":196,"width":664,"height":12}},{"id":"985e41ee-0c67-4964-bc69-ccfa73f3ae51","block_type":"box","text":"Fitch short-term ratings are as follows:","page_number":162,"box":{"x":117,"y":227,"width":289,"height":12}},{"id":"30ce6901-1bda-4c1e-816a-20f2915757b8","block_type":"box","text":"F1 Highest Short-Term Credit Quality. Indicates the strongest intrinsic capacity for timely","page_number":162,"box":{"x":117,"y":258,"width":746,"height":12}},{"id":"ad73fe9c-af5c-43f6-b0d5-d8417ce3f23b","block_type":"box","text":"payment of financial commitments; may have an added “+” to denote any exceptionally","page_number":162,"box":{"x":226,"y":273,"width":650,"height":12}},{"id":"531d4b65-333a-4409-9ed2-8ab5a8c96f18","block_type":"box","text":"strong credit feature.","page_number":162,"box":{"x":226,"y":289,"width":158,"height":12}},{"id":"b6f9b55d-586b-4088-97f4-14ac50d41f20","block_type":"box","text":"F2 Good Short-Term Credit Quality. Good intrinsic capacity for timely payment of financial","page_number":162,"box":{"x":117,"y":312,"width":757,"height":12}},{"id":"b4445fae-8b72-4adc-ab92-eb2199d1818e","block_type":"box","text":"commitments.","page_number":162,"box":{"x":226,"y":327,"width":109,"height":10}},{"id":"275d3a11-4263-4194-bde5-3a92cb6c8acf","block_type":"box","text":"F3 Fair Short-Term Credit Quality. The intrinsic capacity for timely payment of financial","page_number":162,"box":{"x":117,"y":351,"width":732,"height":12}},{"id":"8a1d17b5-992d-466e-8912-513905fb9e77","block_type":"box","text":"commitments is adequate.","page_number":162,"box":{"x":226,"y":366,"width":200,"height":12}},{"id":"bce3d9fa-b82c-45ac-9617-2a32923ebfc9","block_type":"box","text":"B Speculative Short-Term Credit Quality. Minimal capacity for timely payment of financial","page_number":162,"box":{"x":117,"y":389,"width":758,"height":12}},{"id":"d329be1f-0d64-4379-a9c8-9d75d6c228b9","block_type":"box","text":"commitments, plus heightened vulnerability to near term adverse changes in financial","page_number":162,"box":{"x":226,"y":405,"width":638,"height":12}},{"id":"34b3602a-fed8-4a42-8275-897b6ccf000b","block_type":"box","text":"and economic conditions.","page_number":162,"box":{"x":226,"y":420,"width":194,"height":10}},{"id":"b5edadbb-ea63-4194-9ddf-10c07d425141","block_type":"box","text":"C High Short-Term Default Risk. Default is a real possibility.","page_number":162,"box":{"x":117,"y":444,"width":541,"height":12}},{"id":"e794dbee-31bb-40cf-99e3-c98901e008d8","block_type":"box","text":"RD Restricted Default. Indicates an entity that has defaulted on one or more of its financial","page_number":162,"box":{"x":117,"y":467,"width":756,"height":12}},{"id":"7d757120-09ba-4075-b669-b7519df32cea","block_type":"box","text":"commitments, although it continues to meet other financial obligations. Typically","page_number":162,"box":{"x":226,"y":482,"width":598,"height":12}},{"id":"623713b3-941d-4e30-9bb9-bd0cfb30b214","block_type":"box","text":"applicable to entity ratings only.","page_number":162,"box":{"x":226,"y":498,"width":239,"height":12}},{"id":"1d522eef-8da7-44eb-a678-da988607a774","block_type":"box","text":"D Default. Indicates a broad-based default event for an entity, or the default of a short","page_number":162,"box":{"x":117,"y":521,"width":733,"height":12}},{"id":"d46644e7-ad75-4219-bdc4-bcf1eba7e63b","block_type":"box","text":"term obligation.","page_number":162,"box":{"x":225,"y":537,"width":120,"height":12}},{"id":"59d70465-c31d-40a0-bf68-dc2e8bd441af","block_type":"box","text":"A-10","page_number":162,"box":{"x":482,"y":909,"width":35,"height":9}},{"id":"4b99e1aa-8104-4b1c-b628-dfd2144060dd","block_type":"box","text":"NM1026U-6033243-162/221","page_number":162,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"c26c57b6-7836-4d3b-bad6-8e0ddf2cd535","block_type":"box","text":"Open-End Active and Fixed Income Index Fund Proxy Voting Policy","page_number":163,"box":{"x":380,"y":87,"width":508,"height":12}},{"id":"5e74315c-ee84-4612-b2b8-03d2d376df11","block_type":"box","text":"APPENDIX B","page_number":163,"box":{"x":448,"y":118,"width":108,"height":9}},{"id":"ed3e94fa-15dc-46d7-8505-1700fe481bac","block_type":"box","text":"Open-End Active and Fixed Income Index Fund Proxy Voting Policy","page_number":163,"box":{"x":204,"y":146,"width":597,"height":14}},{"id":"97176433-9a48-4acc-85fa-dd9a565d66e7","block_type":"box","text":"Procedures Governing Delegation of Proxy Voting to Fund Advisers","page_number":163,"box":{"x":229,"y":175,"width":547,"height":13}},{"id":"f32dacb0-83f2-4818-98b7-ad6d3c68813f","block_type":"box","text":"Effective Date: January 1, 2025","page_number":163,"box":{"x":383,"y":204,"width":239,"height":12}},{"id":"3413a198-a1c6-453b-80f3-d066ee37c46f","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":168,"box":{"x":116,"y":304,"width":748,"height":12}},{"id":"491a665b-7953-47cc-b0b4-feca34af5ddc","block_type":"box","text":"voting policies that are applied to BlackRock’s index equity investments by a distinct and independent","page_number":168,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"bf87a661-93ed-444f-a0d5-267a46c7c1e3","block_type":"box","text":"function, BlackRock Investment Stewardship.","page_number":168,"box":{"x":116,"y":335,"width":341,"height":12}},{"id":"58c2b54c-12cb-4cc5-8485-2bedb743c617","block_type":"box","text":"1","page_number":168,"box":{"x":144,"y":789,"width":2,"height":5}},{"id":"60709f1b-e2af-4d62-9a3d-b7303732a034","block_type":"box","text":"This document includes BAIS’ benchmark policy, which covers nearly all active equity holdings in BlackRock’s","page_number":168,"box":{"x":170,"y":789,"width":653,"height":10}},{"id":"3cd97278-456e-41a9-8265-d272957e9152","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":169,"box":{"x":485,"y":118,"width":392,"height":12}},{"id":"004e4f2d-9f24-40e4-a301-5d9d4b74d63b","block_type":"box","text":"— it belongs to BlackRock’s clients, many of w","page_number":169,"box":{"x":116,"y":133,"width":339,"height":12}},{"id":"88935495-0545-49e2-b887-152daf56e016","block_type":"box","text":"hom make their own asset allocation and portfolio","page_number":169,"box":{"x":456,"y":133,"width":365,"height":12}},{"id":"9e9b9420-1295-4f86-9a25-822f4d066852","block_type":"box","text":"construction decisions. As a fiduciary, BlackRock in","page_number":169,"box":{"x":116,"y":149,"width":373,"height":12}},{"id":"6977583f-4cc0-47ec-b5ad-65eaa7c94513","block_type":"box","text":"vests on clients’ behalf to help them meet their","page_number":169,"box":{"x":490,"y":149,"width":342,"height":12}},{"id":"c82de4f0-528a-4b75-a912-395f66e6c3d9","block_type":"box","text":"investment objectives. The firm does this by underst","page_number":169,"box":{"x":117,"y":164,"width":378,"height":12}},{"id":"ae69e7b9-7022-4e74-a3ae-31ef6af2c4aa","block_type":"box","text":"anding clients’ long-term investment objectives and","page_number":169,"box":{"x":495,"y":164,"width":376,"height":12}},{"id":"9fe02aea-0c4b-4022-8384-c0c387ee65e5","block_type":"box","text":"offering choice on how and where they wish to invest","page_number":169,"box":{"x":116,"y":180,"width":385,"height":12}},{"id":"9bed24d4-78ba-45b3-a0a7-a42864911a9e","block_type":"box","text":"t their money. 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As stewards of our clients’ assets, we engage with companies to discuss the corporate","page_number":169,"box":{"x":116,"y":257,"width":706,"height":12}},{"id":"3fa93a42-5a8f-4a68-9d94-c73aa6c59bdc","block_type":"box","text":"governance and business practices that, in our experience, support companies in delivering durable,","page_number":169,"box":{"x":116,"y":272,"width":751,"height":12}},{"id":"b65aa438-74ed-4fcb-a85f-6703d3fb22b1","block_type":"box","text":"risk-adjusted financial returns over time. We are committed to building strong relationships through","page_number":169,"box":{"x":117,"y":288,"width":736,"height":12}},{"id":"6485c80f-247b-46fb-acab-931b9fb50616","block_type":"box","text":"constructive, ongoing dialogue with the boards and executive management of the companies in which","page_number":169,"box":{"x":116,"y":303,"width":760,"height":12}},{"id":"462cae5a-3217-4d78-9cfa-74c6c69522db","block_type":"box","text":"our clients are invested.","page_number":169,"box":{"x":116,"y":319,"width":182,"height":9}},{"id":"db06f5e9-1627-4833-a88e-c6fa6556cba9","block_type":"box","text":"About BlackRock Active Investment Stewardship","page_number":169,"box":{"x":303,"y":357,"width":398,"height":12}},{"id":"b7b6f66a-fea1-4601-b988-588d57f528b7","block_type":"box","text":"BlackRock Active Investment Stewardship (BAIS) is a specialist team within the Portfolio Management","page_number":169,"box":{"x":117,"y":388,"width":764,"height":12}},{"id":"8a57493a-7019-44b4-abb4-d9c77ca35637","block_type":"box","text":"Group and manages BlackRock’s stewardship engagement and voting on behalf of clients invested in","page_number":169,"box":{"x":117,"y":403,"width":758,"height":12}},{"id":"0705814d-4623-42e5-a738-f1791038dfcf","block_type":"box","text":"active strategies globally. BAIS is also responsible for engagement with issuers in index fixed income","page_number":169,"box":{"x":116,"y":419,"width":755,"height":12}},{"id":"c2a537e3-2f6a-45b4-affe-7afcd5c7838c","block_type":"box","text":"strategies, where appropriate. Our activities are informed by these Global Engagement and Voting","page_number":169,"box":{"x":116,"y":434,"width":735,"height":12}},{"id":"ea388fff-deb3-4289-8622-20fdb4b58ad7","block_type":"box","text":"Guidelines (the “Guidelines”) and insights from active investment analysts and portfolio managers, with","page_number":169,"box":{"x":117,"y":450,"width":768,"height":12}},{"id":"34019fa2-a585-414b-ab1f-086d395cbbc2","block_type":"box","text":"whom we work closely in engaging companies and voting at shareholder meetings.","page_number":169,"box":{"x":116,"y":465,"width":622,"height":12}},{"id":"d5b31db4-19d2-4ed9-bd0a-c27478d7147e","block_type":"box","text":"Engagement with public companies is the foundation of our approach to stewardship within","page_number":169,"box":{"x":117,"y":496,"width":680,"height":12}},{"id":"8c039117-07e1-402f-90cf-1044c961e2aa","block_type":"box","text":"fundamental active investing.","page_number":169,"box":{"x":116,"y":511,"width":215,"height":12}},{"id":"0433086b-33b1-482c-b8fa-e9c3e67642cf","block_type":"box","text":"3","page_number":169,"box":{"x":333,"y":511,"width":5,"height":6}},{"id":"8571808a-e7cb-4193-8240-bc6dd72836dd","block_type":"box","text":"Through direct dialogue with company leadership, we seek to","page_number":169,"box":{"x":339,"y":511,"width":466,"height":12}},{"id":"db1e45ba-4520-4ab9-b813-41f8fd483cd2","block_type":"box","text":"understand their businesses and how they manage risks and opportunities to deliver durable, risk","page_number":169,"box":{"x":117,"y":527,"width":727,"height":12}},{"id":"97f8303b-a02b-480e-8fb7-27047d19bf91","block_type":"box","text":"adjusted financial returns. Portfolio managers and stewardship specialists may engage jointly or","page_number":169,"box":{"x":116,"y":542,"width":716,"height":12}},{"id":"0893155e-8f09-4799-b3be-e92b855199d1","block_type":"box","text":"independently on material corporate governance matters. Our discussions focus on topics relevant to a","page_number":169,"box":{"x":117,"y":558,"width":769,"height":12}},{"id":"ba483c3a-8559-4c41-8f8b-2f86f0c814cd","block_type":"box","text":"company’s success over time, including governance and leadership, corporate strategy, capital","page_number":169,"box":{"x":116,"y":573,"width":711,"height":12}},{"id":"28411b0f-33de-4e8c-89c3-2034b4aa7e8d","block_type":"box","text":"structure and financial performance, operations and material sustainability-related risks, as well as","page_number":169,"box":{"x":116,"y":589,"width":734,"height":12}},{"id":"c5f1045c-4915-4506-99c8-8c551178876f","block_type":"box","text":"macro-economic, geopolitical and sector dynamics. We aim to be constructive investors and are","page_number":169,"box":{"x":117,"y":604,"width":717,"height":12}},{"id":"1afb978a-b030-425e-9713-7b16c32a9b16","block_type":"box","text":"generally supportive of management teams that have a track record of financial value creation. We aim","page_number":169,"box":{"x":116,"y":620,"width":770,"height":12}},{"id":"572c4ccb-a5ac-4b95-8004-8dc26335cf78","block_type":"box","text":"to build and maintain strong relationships with company leadership based on open dialogue and","page_number":169,"box":{"x":116,"y":635,"width":717,"height":12}},{"id":"f075d550-ecaf-4404-907e-417acaf710e6","block_type":"box","text":"mutual respect.","page_number":169,"box":{"x":117,"y":651,"width":118,"height":12}},{"id":"5dfe3129-7e5d-42f5-8d43-d5d4ffc6cc37","block_type":"box","text":"Different active equity strategies may implement these voting guidelines differently, as a result of the","page_number":169,"box":{"x":117,"y":681,"width":744,"height":12}},{"id":"f61e8df6-72ab-4c12-be50-208b08774ca6","block_type":"box","text":"latitude each portfolio manager has to make independent voting decisions on their holdings. For","page_number":169,"box":{"x":117,"y":697,"width":711,"height":12}},{"id":"26774451-90f4-4a49-bbdc-e8d2f988866d","block_type":"box","text":"example, BAIS will generally vote the holdings in Systematic Active Equity portfolios in accordance","page_number":169,"box":{"x":116,"y":712,"width":732,"height":12}},{"id":"09c1a321-7720-4c85-b155-71abab936209","block_type":"box","text":"with these guidelines. We provide voting recommendations to fundamental equity portfolio managers,","page_number":169,"box":{"x":116,"y":728,"width":751,"height":12}},{"id":"f37c71db-50b1-4e5d-b367-3efd1f5b763f","block_type":"box","text":"who may determine to vote differently based on each portfolio’s investment objectives and strategy.","page_number":169,"box":{"x":116,"y":743,"width":737,"height":12}},{"id":"e1b45755-49dc-494b-b1a9-635d7dddeb8d","block_type":"box","text":"These guidelines discuss BAIS’ views on corporate governance topics on which we may engage with","page_number":169,"box":{"x":116,"y":774,"width":749,"height":12}},{"id":"dc9e6661-8781-48b0-b2e1-2125cc7a819c","block_type":"box","text":"management teams and board directors","page_number":169,"box":{"x":117,"y":790,"width":297,"height":12}},{"id":"81f14f3f-b3c0-4c7c-aebb-a1b78a1bb80e","block_type":"box","text":"4","page_number":169,"box":{"x":414,"y":790,"width":6,"height":6}},{"id":"c2adf3bd-a3ca-4779-9d61-57d719c77a52","block_type":"box","text":"and on matters that routinely come to a shareholder vote. We","page_number":169,"box":{"x":424,"y":790,"width":456,"height":12}},{"id":"2159f4b6-8d68-4a53-8975-3f47cfb01f14","block_type":"box","text":"3","page_number":169,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"358ae7bb-5a4d-43d9-9fc1-b0e54dada8ec","block_type":"box","text":"On February 11, 2025, the U.S. Securities and Exchange Commission (SEC) staff issued updated guidance for","page_number":169,"box":{"x":170,"y":815,"width":660,"height":9}},{"id":"cec93322-2a05-4d63-b090-46c55dc3937f","block_type":"box","text":"shareholders to maintain their eligibility to report their beneficial ownership under Schedule 13G of the Exchange Act.","page_number":169,"box":{"x":170,"y":828,"width":695,"height":9}},{"id":"1abefd0b-caa7-4eb8-843e-c245ae9c6738","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":169,"box":{"x":170,"y":840,"width":707,"height":10}},{"id":"91d0e395-a35a-410e-9770-a8ec8936a8a0","block_type":"box","text":"of changing or influencing control of the company.","page_number":169,"box":{"x":170,"y":853,"width":295,"height":10}},{"id":"716a8bc2-eb36-4896-a52f-2841ce1932a2","block_type":"box","text":"4","page_number":169,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"b7951be9-93ba-41f3-a708-dab1d069c127","block_type":"box","text":"References to the board, board directors or non-executive directors should be understood to include supervisory boards","page_number":169,"box":{"x":171,"y":866,"width":710,"height":10}},{"id":"c4bf989a-0edc-473c-a775-d512bab66847","block_type":"box","text":"and their members, where relevant.","page_number":169,"box":{"x":170,"y":879,"width":210,"height":9}},{"id":"9451fa8f-05cd-45db-819f-0e478d8a0b91","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":169,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"346f6827-dc22-43d6-981e-6bdb81596303","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":169,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"6857c9a6-b0bb-4f19-a4eb-e9ebc5954a44","block_type":"box","text":"4","page_number":169,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"6bbf7a5d-fdf3-453a-83ae-e77c3effa016","block_type":"box","text":"NM1026U-6033243-169/221","page_number":169,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"785a0cc7-1090-4663-abe9-6522c76d6456","block_type":"box","text":"recognize that accepted corporate governance norms can differ across markets, and believe these","page_number":170,"box":{"x":117,"y":87,"width":736,"height":12}},{"id":"f7f840ac-5e64-466a-8c6d-b158004c414d","block_type":"box","text":"guidelines represent globally applicable elements of governance that support a company’s ability to","page_number":170,"box":{"x":116,"y":102,"width":741,"height":13}},{"id":"16763837-679d-4073-a2fb-99d35fa83640","block_type":"box","text":"manage material risks and opportunities and deliver financial returns to investors. Generally, we","page_number":170,"box":{"x":117,"y":118,"width":715,"height":12}},{"id":"57f5410e-090e-424a-b157-5d7eb27b1fca","block_type":"box","text":"believe companies should observe accepted corporate governance norms within their local markets or,","page_number":170,"box":{"x":117,"y":134,"width":768,"height":12}},{"id":"b3143f4c-0da2-4c7d-8385-118a86a8ec70","block_type":"box","text":"particularly in markets without well-established norms, aspire to widely recognized international best","page_number":170,"box":{"x":117,"y":149,"width":746,"height":12}},{"id":"e7dde07e-b212-410b-9f7d-7ba7b8820b6f","block_type":"box","text":"practices. As one of many minority shareholders, BlackRock cannot – and does not try to – direct a","page_number":170,"box":{"x":117,"y":165,"width":739,"height":12}},{"id":"c33877e9-c174-4b27-9202-20da8bd9256d","block_type":"box","text":"company’s strategy or its implementation. We look to companies to provide disclosures that explain","page_number":170,"box":{"x":116,"y":180,"width":743,"height":12}},{"id":"0ad5308a-25e7-4c7b-8acf-3eadbc04c7d7","block_type":"box","text":"how their approach to corporate governance best aligns with the financial interests of their investors.","page_number":170,"box":{"x":117,"y":196,"width":749,"height":12}},{"id":"0a404e47-7503-4a7b-9365-f11531920442","block_type":"box","text":"Our approach to stewardship within active equities","page_number":170,"box":{"x":296,"y":234,"width":412,"height":12}},{"id":"9d339de1-60c0-4982-9f9c-a25dbe01056c","block_type":"box","text":"Voting at a company’s shareholder meeting is a right of share ownership and a core principle of","page_number":170,"box":{"x":116,"y":265,"width":713,"height":12}},{"id":"3f5bdf27-0acd-4827-8d6a-abf01d886bb4","block_type":"box","text":"corporate governance. The voting rights attached to clients’ holdings are an important mechanism for","page_number":170,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"50baf616-3773-4985-9299-d32861b92da1","block_type":"box","text":"investors to express support for, or concern about, a company’s performance. As a fiduciary,","page_number":170,"box":{"x":117,"y":296,"width":692,"height":12}},{"id":"ab132762-450a-4e76-b470-824cffb2b43c","block_type":"box","text":"BlackRock is legally required to make proxy voting determinations, on behalf of clients who have","page_number":170,"box":{"x":117,"y":312,"width":720,"height":12}},{"id":"ab8b4ecd-7aa8-4d11-b8f6-eef72c57f852","block_type":"box","text":"delegated voting authority to us, in a manner consistent with BlackRock’s contractual arrangements","page_number":170,"box":{"x":116,"y":327,"width":743,"height":12}},{"id":"3a6b6fcf-128c-4530-a21b-6fcec3ba372a","block_type":"box","text":"with clients and funds.","page_number":170,"box":{"x":116,"y":343,"width":170,"height":9}},{"id":"63122bec-5956-4185-b2f5-ec0c7d46478a","block_type":"box","text":"In general, we tend to support the recommendations of the board of directors and management. As","page_number":170,"box":{"x":117,"y":374,"width":740,"height":12}},{"id":"7487389a-1ee0-4cf4-9256-ff515cc594b7","block_type":"box","text":"indicated below, we may vote against management recommendations when we have concerns about","page_number":170,"box":{"x":117,"y":389,"width":755,"height":12}},{"id":"98f4ebe9-f7d9-49bd-a183-cd1878b7d3bc","block_type":"box","text":"how companies are serving the financial interests of our clients as their shareholders. BAIS takes a","page_number":170,"box":{"x":117,"y":405,"width":740,"height":12}},{"id":"4d96dfb4-e1e0-4518-8106-09012aeb4a39","block_type":"box","text":"globally consistent approach to voting but considers the different corporate governance regulations and","page_number":170,"box":{"x":116,"y":420,"width":772,"height":12}},{"id":"abbed1bf-0677-441e-8c3c-7bb6af163f76","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":170,"box":{"x":117,"y":436,"width":753,"height":12}},{"id":"75b47244-469d-4439-baef-40dc9b4e75fc","block_type":"box","text":"situation and the investment mandate we have from clients. Please see page 19 for more information","page_number":170,"box":{"x":116,"y":451,"width":756,"height":12}},{"id":"5d1706b4-f72f-499f-b6c7-6545c978c07c","block_type":"box","text":"about how we fulfill and oversee our investment stewardship responsibilities for BlackRock’s non-index","page_number":170,"box":{"x":116,"y":467,"width":768,"height":12}},{"id":"c0c5867a-6f79-4108-a440-0cff1dc91350","block_type":"box","text":"equity strategies.","page_number":170,"box":{"x":116,"y":482,"width":125,"height":12}},{"id":"e922355a-de6a-4ea2-b079-f3b8044e8003","block_type":"box","text":"5","page_number":170,"box":{"x":243,"y":483,"width":6,"height":6}},{"id":"78a8d764-c944-446b-97c9-e97734d9b2df","block_type":"box","text":"Our approach to stewardship within fixed income","page_number":170,"box":{"x":303,"y":521,"width":399,"height":12}},{"id":"1970be9c-6106-4045-8ac2-c969c7e94dcc","block_type":"box","text":"Although fixed income investors do not have the right to vote at shareholder meetings, issuer","page_number":170,"box":{"x":116,"y":552,"width":695,"height":12}},{"id":"2c4b6cd0-0b3d-4674-a409-9f488646d753","block_type":"box","text":"engagement is a component of fixed income investment strategies at BlackRock, particularly for those","page_number":170,"box":{"x":116,"y":568,"width":762,"height":12}},{"id":"df4ad107-6e3e-49e0-9c1c-f9a76ae592d0","block_type":"box","text":"with sustainability objectives in addition to financial objectives. Most corporate governance-related","page_number":170,"box":{"x":116,"y":583,"width":732,"height":12}},{"id":"74fd0153-7e64-4e4f-8f53-848490c1f1b0","block_type":"box","text":"fixed income engagements are undertaken in conjunction with the active investment stewardship team,","page_number":170,"box":{"x":116,"y":599,"width":770,"height":12}},{"id":"a2e51c73-4fab-4e8d-873d-09515fc22422","block_type":"box","text":"and often active equity investors. In addition to the topics listed below, engagement with fixed income","page_number":170,"box":{"x":116,"y":614,"width":757,"height":12}},{"id":"08ebfbd6-0ac9-4e27-a8eb-aea15903664c","block_type":"box","text":"investment teams may help inform an issuer’s approach to structuring specialist issuances and the","page_number":170,"box":{"x":117,"y":630,"width":736,"height":12}},{"id":"32a5e4f2-65e5-4a67-93eb-18fc4ae76711","block_type":"box","text":"standard terms and information in bond documentation.","page_number":170,"box":{"x":116,"y":645,"width":417,"height":10}},{"id":"01de05e7-c461-49a7-b1d7-4be1b94de780","block_type":"box","text":"5","page_number":170,"box":{"x":143,"y":854,"width":4,"height":5}},{"id":"57c35b5f-7e63-4a37-8fd7-e9375671fd85","block_type":"box","text":"Non-index equity strategies include active equity holdings in BlackRock’s fundamental equity, systematic equity and","page_number":170,"box":{"x":171,"y":854,"width":685,"height":9}},{"id":"87646a53-d5f5-476c-941d-3d9ce9a668dc","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":170,"box":{"x":170,"y":867,"width":678,"height":9}},{"id":"c3dbf43e-b90f-41af-bbf0-078ebc99dbd1","block_type":"box","text":"extent those strategies hold voting securities or conduct issuer engagements.","page_number":170,"box":{"x":170,"y":880,"width":458,"height":9}},{"id":"b895be09-7a3a-4709-83ef-0d1e51675728","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":170,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"67e034f1-4075-427c-90e3-189099d3dc04","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":170,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"6677cbac-bb02-4603-a9b4-8a9fa778425a","block_type":"box","text":"5","page_number":170,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"19c53e6d-3847-478b-afcf-091bdd3c2724","block_type":"box","text":"NM1026U-6033243-170/221","page_number":170,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"e0b344ce-0ab8-4704-b49e-e532da14f509","block_type":"box","text":"Boards of Directors","page_number":171,"box":{"x":422,"y":113,"width":161,"height":9}},{"id":"39e04f59-0ec1-4897-b52d-a596e38aaed0","block_type":"box","text":"Roles and responsibilities","page_number":171,"box":{"x":117,"y":146,"width":212,"height":11}},{"id":"e344e67b-0ee3-4850-ad19-eec81e37ba7e","block_type":"box","text":"There is widespread consensus that the foundation of good corporate governance is an effective board","page_number":171,"box":{"x":116,"y":178,"width":770,"height":12}},{"id":"846651e5-3b3e-48af-8c70-f515e7b41a9c","block_type":"box","text":"of directors that is able to advise and supervise management in an independent and objective","page_number":171,"box":{"x":116,"y":194,"width":700,"height":12}},{"id":"031500c7-04cd-4ee8-9b9b-9276ff5140c1","block_type":"box","text":"manner.","page_number":171,"box":{"x":117,"y":212,"width":59,"height":7}},{"id":"e538a4bb-be5a-4ae9-975b-7dbe41cce4ab","block_type":"box","text":"6","page_number":171,"box":{"x":178,"y":209,"width":5,"height":6}},{"id":"436362a1-dab0-477a-aa5f-3535ec1fca03","block_type":"box","text":"We look to the board of directors (hereafter the “board”) to have an oversight role in the establishment","page_number":171,"box":{"x":116,"y":242,"width":762,"height":12}},{"id":"bc05a19c-73e8-4bc9-8936-3328e31dd473","block_type":"box","text":"and realization of a company’s strategy, purpose and culture. These constructs are interdependent","page_number":171,"box":{"x":116,"y":257,"width":738,"height":12}},{"id":"c8751158-2586-4b2f-9464-53a884399543","block_type":"box","text":"and, when aligned, can better position a company to be resilient in the face of a changing business","page_number":171,"box":{"x":116,"y":273,"width":739,"height":12}},{"id":"5b515aed-68dc-4a3d-aefd-0ec65c58dc3f","block_type":"box","text":"environment, help reduce the risks of corporate or employee misconduct, and attract and retain the","page_number":171,"box":{"x":116,"y":288,"width":740,"height":12}},{"id":"864f562f-9927-4efc-8518-b878c1ec589b","block_type":"box","text":"caliber of workers necessary to deliver financial performance over time.","page_number":171,"box":{"x":116,"y":304,"width":535,"height":12}},{"id":"40644345-98cf-42c3-a357-6c50a49d5ac2","block_type":"box","text":"In overseeing the management of the company, the board ensures the necessary resources, policies","page_number":171,"box":{"x":117,"y":337,"width":754,"height":12}},{"id":"43e8a3ba-3181-4f60-b77f-d3e74838382f","block_type":"box","text":"and procedures are in place to help management meet its strategic objectives within an agreed risk","page_number":171,"box":{"x":116,"y":352,"width":742,"height":12}},{"id":"4d02a9e1-8fd2-4cb8-8cfe-9af11a2d75a1","block_type":"box","text":"tolerance.","page_number":171,"box":{"x":116,"y":368,"width":78,"height":9}},{"id":"974f01d6-53c3-4564-8947-cace544d9ef5","block_type":"box","text":"One of the most important responsibilities of the board is to appoint, and remove as necessary, the","page_number":171,"box":{"x":116,"y":400,"width":739,"height":12}},{"id":"53f7af2f-a458-45ad-8893-6e2f63f01b90","block_type":"box","text":"chief executive officer (“CEO”). In addition, the board plays a meaningful role in monitoring the","page_number":171,"box":{"x":116,"y":416,"width":704,"height":12}},{"id":"60d192d4-67c9-45b8-9966-d49c30e3e517","block_type":"box","text":"performance of the CEO and other key executives, determining executive compensation, ensuring a","page_number":171,"box":{"x":117,"y":431,"width":747,"height":12}},{"id":"dc9db1d0-23cf-49aa-9ab4-525bc71b7314","block_type":"box","text":"rigorous audit, overseeing strategy execution and risk management and engaging with shareholders,","page_number":171,"box":{"x":117,"y":447,"width":753,"height":12}},{"id":"7cdc41e2-be55-480e-b668-38aa6de9b4cf","block_type":"box","text":"and other stakeholders, as necessary.","page_number":171,"box":{"x":116,"y":462,"width":289,"height":12}},{"id":"3366af95-8ad9-41e0-952d-c1c6c7f8f587","block_type":"box","text":"Composition and effectiveness","page_number":171,"box":{"x":116,"y":495,"width":253,"height":12}},{"id":"b6af1877-fa53-4836-8742-33716e514aa5","block_type":"box","text":"Appointment process","page_number":171,"box":{"x":116,"y":528,"width":177,"height":12}},{"id":"b6fbdf61-28cf-4461-a176-df5007b08d08","block_type":"box","text":"A formal and transparent process for identifying and appointing director candidates is critical to","page_number":171,"box":{"x":116,"y":560,"width":708,"height":12}},{"id":"250b37d8-b511-4e0f-b7a0-bc921193a2fa","block_type":"box","text":"ensuring the board is composed of directors with the appropriate mix of skills and experience.","page_number":171,"box":{"x":116,"y":576,"width":700,"height":12}},{"id":"701f00b6-e59e-4ed9-a404-84c71a480262","block_type":"box","text":"Generally, the board or a sub-committee determines the general criteria given the company’s","page_number":171,"box":{"x":117,"y":591,"width":695,"height":12}},{"id":"bd352a38-7f5e-4c47-88dc-6e330bc212c5","block_type":"box","text":"circumstances (e.g., sector, maturity, geographic footprint) and any additional criteria for a specific role","page_number":171,"box":{"x":116,"y":607,"width":767,"height":12}},{"id":"c1df9733-69d1-4baa-9276-3faac647a05f","block_type":"box","text":"being filled (e.g., financial expertise, industry track record). To inform the process, we encourage","page_number":171,"box":{"x":117,"y":622,"width":721,"height":12}},{"id":"aa40aa5f-67bd-4567-a668-ab8e1bd726c5","block_type":"box","text":"companies to review the skills and experience of incumbent directors to identify any gaps and whether","page_number":171,"box":{"x":116,"y":638,"width":764,"height":12}},{"id":"7ea99dc8-8c8c-4096-ac68-5b2e4db11546","block_type":"box","text":"the skills and experience of a director candidate would be additive. We welcome disclosures that","page_number":171,"box":{"x":116,"y":653,"width":722,"height":12}},{"id":"63b50b1b-6c43-4000-8268-f710f9c43876","block_type":"box","text":"explain how the board considered different skills and experience to ensure that the directors","page_number":171,"box":{"x":116,"y":669,"width":682,"height":12}},{"id":"86474dcc-93ea-4d10-b614-0fd65354a055","block_type":"box","text":"collectively can be effective in fulfilling their responsibilities. We assess a company’s board","page_number":171,"box":{"x":116,"y":684,"width":672,"height":12}},{"id":"d6042866-9a61-4f43-aac4-a0895813146d","block_type":"box","text":"composition against that of its peer group and local market requirements.","page_number":171,"box":{"x":116,"y":700,"width":542,"height":12}},{"id":"c8d7ae0f-37e3-446b-afac-e36f6d87000b","block_type":"box","text":"Shareholders periodically vote to elect directors to serve on the board. We do not prescribe any","page_number":171,"box":{"x":116,"y":733,"width":709,"height":12}},{"id":"882c5d76-fc19-4c58-8c73-fc71ebff739a","block_type":"box","text":"particular board composition in our engagements or voting but seek to understand how well placed a","page_number":171,"box":{"x":117,"y":748,"width":746,"height":12}},{"id":"c1976b8d-5d14-4ad8-b120-77ded59fb07f","block_type":"box","text":"board is to act in investors’ interests. We may vote against the election of the most senior independent","page_number":171,"box":{"x":117,"y":764,"width":760,"height":12}},{"id":"547ccb79-3937-4a49-98b7-ba6d59ecbbf0","block_type":"box","text":"director, or the chair of the relevant committee, where a company has not demonstrated it has an","page_number":171,"box":{"x":116,"y":779,"width":720,"height":12}},{"id":"2e0deb5a-4fa5-441c-a811-7362bec331bb","block_type":"box","text":"appointment process that results in a high functioning board with the appropriate complement of skills","page_number":171,"box":{"x":116,"y":795,"width":753,"height":12}},{"id":"a8aa1170-ad98-4877-b361-4ab5a2c45a20","block_type":"box","text":"and experience amongst the directors to support strong financial performance over time. We may vote","page_number":171,"box":{"x":116,"y":810,"width":759,"height":12}},{"id":"8341cfcb-8657-4131-a139-8e559d913464","block_type":"box","text":"against newly nominated directors who do not seem to have the appropriate skills or experience to","page_number":171,"box":{"x":116,"y":826,"width":736,"height":12}},{"id":"d637e139-26f4-4931-a053-4fa9b6922e07","block_type":"box","text":"contribute to the board’s effectiveness.","page_number":171,"box":{"x":116,"y":841,"width":293,"height":10}},{"id":"7b880360-0b56-4f10-b76a-26bb00b15b43","block_type":"box","text":"6","page_number":171,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"20539710-216e-416d-b5f8-6ae8b0da9a9c","block_type":"box","text":"See the Corporate Governance Codes of Germany, Japan, and the UK, as well as the corporate governance principles","page_number":171,"box":{"x":170,"y":866,"width":706,"height":10}},{"id":"33801b3f-830e-419a-a255-d786b9fcf03c","block_type":"box","text":"of the US Business Roundtable as examples.","page_number":171,"box":{"x":170,"y":879,"width":268,"height":10}},{"id":"d8f13c44-f956-4930-acbb-e982adec28a6","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":171,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"ed84fcdf-b3d2-420f-ba70-883795f5e825","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":171,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"f8e7ba7e-c585-478e-a66b-087179800e98","block_type":"box","text":"6","page_number":171,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"f865c6ff-d2d6-42ba-8f05-61b1988b57a4","block_type":"box","text":"NM1026U-6033243-171/221","page_number":171,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"7d645e1f-70c9-4249-87f0-3cafddbf02f4","block_type":"box","text":"Independence","page_number":172,"box":{"x":116,"y":87,"width":118,"height":12}},{"id":"559ca7fa-f203-437c-bd07-78383e4a259e","block_type":"box","text":"Director independence from management, significant shareholders or other stakeholders (e.g.,","page_number":172,"box":{"x":117,"y":116,"width":706,"height":12}},{"id":"5875fc75-17b6-4415-bc82-32f8d7d5caf9","block_type":"box","text":"government or employees) is of paramount importance to the protection of the interests of minority","page_number":172,"box":{"x":116,"y":132,"width":736,"height":12}},{"id":"ce397816-55b3-4f2b-83f7-6466fdcdc7bc","block_type":"box","text":"shareholders such as BlackRock’s clients. We consider it good practice for at least half the directors to","page_number":172,"box":{"x":116,"y":147,"width":766,"height":12}},{"id":"3e7b9612-e264-4a69-b449-504fd86e2a58","block_type":"box","text":"be independent and free from conflicts of interest or undue influence.","page_number":172,"box":{"x":117,"y":163,"width":510,"height":12}},{"id":"3360f202-1ac5-46ec-8451-d349da075dad","block_type":"box","text":"7","page_number":172,"box":{"x":629,"y":163,"width":5,"height":6}},{"id":"7e5a97c8-c05d-4757-bd1b-2988ac05bed3","block_type":"box","text":"This also helps to ensure that","page_number":172,"box":{"x":635,"y":163,"width":229,"height":12}},{"id":"dc25e101-dabf-4008-aee9-f8bffd73e738","block_type":"box","text":"board committees are composed of a sufficient number of independent directors. Companies domiciled","page_number":172,"box":{"x":117,"y":178,"width":770,"height":12}},{"id":"efb6fff6-8db3-4a62-a9a2-27d41714dcea","block_type":"box","text":"in markets with a higher threshold for board independence should meet those local requirements.","page_number":172,"box":{"x":117,"y":194,"width":727,"height":12}},{"id":"ee38f390-0705-458f-b0f7-d4789db8c51f","block_type":"box","text":"We may vote against the election of non-independent directors if the board does not have a sufficient","page_number":172,"box":{"x":116,"y":223,"width":756,"height":12}},{"id":"7dcf19c5-a690-4426-bbe7-52c7d372cda0","block_type":"box","text":"balance of independence. We may also vote against the election of the chair of the committee","page_number":172,"box":{"x":117,"y":239,"width":701,"height":12}},{"id":"50575b06-25b5-4840-bb3f-4d9bf5f43b1c","block_type":"box","text":"responsible for board composition if this is a perennial issue.","page_number":172,"box":{"x":117,"y":254,"width":453,"height":12}},{"id":"6d5ad229-9258-4b6b-b087-d3df1e70043a","block_type":"box","text":"Independent board leadership","page_number":172,"box":{"x":116,"y":283,"width":245,"height":12}},{"id":"e52b694d-ecd6-4c5c-b814-faee4d2038b0","block_type":"box","text":"Practices across markets differ, as do board structures, but we observe two main approaches to","page_number":172,"box":{"x":117,"y":312,"width":718,"height":12}},{"id":"db99585a-f051-43ad-9b6d-07af5ca4d196","block_type":"box","text":"independent board leadership. One is a non-executive, independent chair of the board who is","page_number":172,"box":{"x":117,"y":327,"width":697,"height":12}},{"id":"3ed83645-f0d9-41ef-a7fc-f33b2869807b","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":172,"box":{"x":117,"y":342,"width":738,"height":12}},{"id":"05f7a4e0-0fe5-40f8-ae48-35b7f9a77e90","block_type":"box","text":"independent director, who is responsible for coordinating with the other non-executive directors and","page_number":172,"box":{"x":117,"y":357,"width":742,"height":12}},{"id":"26640026-5fca-4915-b614-4ecb634dc294","block_type":"box","text":"working closely with the executive chair on the board agenda and other board procedures. In this case,","page_number":172,"box":{"x":116,"y":372,"width":770,"height":11}},{"id":"3142d974-cc76-4ffa-bf8a-962eb91b2483","block_type":"box","text":"the executive chair and the lead independent director work together to ensure the board is effectively","page_number":172,"box":{"x":116,"y":386,"width":754,"height":12}},{"id":"7ff347be-79b6-41fa-ba2a-33bee717101a","block_type":"box","text":"fulfilling its responsibilities. In our view, the independent leader of the board, and/or the chair of a","page_number":172,"box":{"x":116,"y":401,"width":723,"height":12}},{"id":"62783a1e-0667-4d4b-bffb-ff8ddd4e6869","block_type":"box","text":"relevant committee, should be available to investors to discuss governance matters such as CEO","page_number":172,"box":{"x":117,"y":416,"width":727,"height":12}},{"id":"16843507-0129-4987-9ba4-1d26fb8866eb","block_type":"box","text":"succession, executive pay, and board performance. We look to boards to explain their board","page_number":172,"box":{"x":116,"y":431,"width":691,"height":12}},{"id":"001a0296-329e-4ee2-8dae-f36229703082","block_type":"box","text":"leadership model and how it serves the interests of shareholders.","page_number":172,"box":{"x":117,"y":446,"width":489,"height":12}},{"id":"8ebfdb73-b194-43e9-9c03-e30b6bd12f16","block_type":"box","text":"We may vote against the election of the chair of the committee responsible for board composition if","page_number":172,"box":{"x":116,"y":475,"width":740,"height":12}},{"id":"fb0a8a4d-fd9c-4933-bdd9-aca2603575bf","block_type":"box","text":"there is not an identified independent leader of the board with clear responsibilities for board","page_number":172,"box":{"x":116,"y":490,"width":689,"height":12}},{"id":"1fc74463-c55f-471e-8466-407afec5c0ab","block_type":"box","text":"performance. We may vote against the most senior independent director if the board has a policy of","page_number":172,"box":{"x":117,"y":506,"width":744,"height":12}},{"id":"94e46e1b-4ab9-4dd9-b97d-fd8d07e9fd38","block_type":"box","text":"not engaging with shareholders.","page_number":172,"box":{"x":117,"y":522,"width":242,"height":12}},{"id":"61aad14c-137d-459f-ade6-b12940074268","block_type":"box","text":"Tenure and succession","page_number":172,"box":{"x":118,"y":551,"width":189,"height":9}},{"id":"bda611ce-44f8-43c6-b84c-330b587638df","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":172,"box":{"x":117,"y":580,"width":745,"height":12}},{"id":"2258d4d3-ef42-4793-b139-e10acc249db1","block_type":"box","text":"expected to serve, in line with market norms where those exist. We find it helpful when companies","page_number":172,"box":{"x":116,"y":595,"width":733,"height":12}},{"id":"c8cd8212-fc11-44f4-a1e0-bfe840a95af0","block_type":"box","text":"disclose their approach to director tenure particularly around the contributions of directors who have","page_number":172,"box":{"x":116,"y":611,"width":745,"height":12}},{"id":"d51916cf-3c0a-4204-99b7-94a4e252e6e8","block_type":"box","text":"served for longer periods than typically provided for under local practice. In our experience, long","page_number":172,"box":{"x":116,"y":626,"width":718,"height":13}},{"id":"12fe96a2-e4e6-423b-9578-a0ed216b777b","block_type":"box","text":"serving directors could become less independent given their long-term relationship with management","page_number":172,"box":{"x":116,"y":642,"width":755,"height":12}},{"id":"b993df98-980d-4370-b618-b49e518001be","block_type":"box","text":"and involvement in past board decisions.","page_number":172,"box":{"x":116,"y":658,"width":308,"height":11}},{"id":"86495cc2-ac02-4f86-8d48-ad4ee223d1b9","block_type":"box","text":"Succession planning for board roles helps achieve the appropriate cadence of turnover that balances","page_number":172,"box":{"x":116,"y":687,"width":750,"height":12}},{"id":"f9880456-8528-420e-b22e-200a77d8ec92","block_type":"box","text":"renewal through the regular introduction of directors with fresh perspectives and expertise with","page_number":172,"box":{"x":117,"y":702,"width":699,"height":12}},{"id":"d6e2d0c8-0fac-4512-8eb3-9b4d3c7aca9c","block_type":"box","text":"continuity through the retention of directors with long-term knowledge of the board and company.","page_number":172,"box":{"x":116,"y":718,"width":718,"height":12}},{"id":"6e4d0bcc-6b19-44b9-9b9d-672355919cc0","block_type":"box","text":"In markets where there is not specific director tenure guidance from regulation or corporate","page_number":172,"box":{"x":117,"y":746,"width":675,"height":12}},{"id":"79400a08-b181-4e2a-87cd-409167af5495","block_type":"box","text":"governance best practices, we may vote against the election of the chair of the committee responsible","page_number":172,"box":{"x":116,"y":760,"width":757,"height":12}},{"id":"74110a6c-107e-42b9-bb03-a8dbcc78c5ce","block_type":"box","text":"for board composition if a company does not clearly disclose its approach to director tenure and board","page_number":172,"box":{"x":116,"y":774,"width":757,"height":12}},{"id":"ae9bffbc-c919-4776-9fc7-f822d448677b","block_type":"box","text":"renewal. We may vote against the election of directors who have served for more years than is typical","page_number":172,"box":{"x":117,"y":788,"width":754,"height":12}},{"id":"6dbc3196-88d3-4d3a-9057-8004c77efa2e","block_type":"box","text":"in markets with specific guidance, where the case for their continued service is not evident.","page_number":172,"box":{"x":117,"y":803,"width":673,"height":12}},{"id":"910f365e-02bb-412b-89c1-63c7c4e28004","block_type":"box","text":"7","page_number":172,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"39ba65c6-cbf3-4898-9f91-fabcb9878ac7","block_type":"box","text":"Common impediments to independence may include but are not limited to: current or recent employment at the","page_number":172,"box":{"x":170,"y":828,"width":659,"height":9}},{"id":"92cb1ddc-13b4-48a1-8fbe-34c809ea3e31","block_type":"box","text":"company or a subsidiary; being, or representing, a shareholder with a substantial shareholding in the company;","page_number":172,"box":{"x":170,"y":841,"width":659,"height":9}},{"id":"a2a39e64-977e-49b0-8bec-77d82360243d","block_type":"box","text":"interlocking directorships; lengthy tenure, and having any other interest, business, or other relationship which could, or","page_number":172,"box":{"x":170,"y":854,"width":702,"height":9}},{"id":"fd802e16-6f0d-449d-b52a-3e9e06fbc0b8","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":172,"box":{"x":170,"y":866,"width":703,"height":10}},{"id":"2000e895-3123-4699-80b8-859ffbcccd43","block_type":"box","text":"and shareholders.","page_number":172,"box":{"x":170,"y":880,"width":106,"height":7}},{"id":"85ca928d-83ae-4cfe-acd8-ca512dafa7c2","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":172,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"4e42b3a0-e01b-49ec-89f4-393906494165","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":172,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"18f5f4a1-9ac5-43c9-886d-fbe1d093bc1b","block_type":"box","text":"7","page_number":172,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"990b5ae0-fa95-4769-9597-f6db3b6260b0","block_type":"box","text":"NM1026U-6033243-172/221","page_number":172,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"a2649470-de82-4f10-861a-e6fb7b935c64","block_type":"box","text":"Capacity","page_number":173,"box":{"x":117,"y":87,"width":74,"height":12}},{"id":"30ee00f6-e1ac-49cf-9288-91ef302bb7e6","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":173,"box":{"x":116,"y":118,"width":757,"height":13}},{"id":"012d44fb-4012-4c2a-bab2-b71e65c830d9","block_type":"box","text":"view, an effective board will assess the ability of its members to maintain an appropriate focus on","page_number":173,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"fdfa19d0-05b0-4fd3-9332-4da2b428ad8b","block_type":"box","text":"board matters and the company taking into consideration competing responsibilities. We recognize that","page_number":173,"box":{"x":117,"y":150,"width":770,"height":12}},{"id":"e671d011-3a5d-412d-8a3d-0f6f7aca9399","block_type":"box","text":"board leadership roles vary across markets in responsibilities and required time commitment but note","page_number":173,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"df17ad44-6eb3-423a-b433-e289c61021c3","block_type":"box","text":"that they are generally more intensive than a standard directorship. We will take local norms and","page_number":173,"box":{"x":116,"y":181,"width":721,"height":12}},{"id":"1238200c-e058-4745-a153-b0a246d92bba","block_type":"box","text":"practices into consideration when making our voting determinations across markets.","page_number":173,"box":{"x":117,"y":196,"width":628,"height":12}},{"id":"60586cee-a6e5-4159-a4f4-7c3ec52eb635","block_type":"box","text":"We may vote against the election of directors who do not seem to have sufficient capacity to effectively","page_number":173,"box":{"x":116,"y":227,"width":769,"height":13}},{"id":"818478bd-3459-492d-bf0f-e9e6f0c1c593","block_type":"box","text":"fulfil their duties to the board and company.","page_number":173,"box":{"x":116,"y":243,"width":326,"height":12}},{"id":"a53dfc4b-436f-4c3d-af71-a57d8234f843","block_type":"box","text":"Director elections","page_number":173,"box":{"x":116,"y":275,"width":147,"height":9}},{"id":"d323926e-469f-4a6e-bd93-fd01ab2019e6","block_type":"box","text":"Regular election of directors, ideally annually, supports director accountability to shareholders. A","page_number":173,"box":{"x":117,"y":306,"width":720,"height":12}},{"id":"adcfb171-f643-477f-b35c-9271fb0b7ac9","block_type":"box","text":"classified board structure","page_number":173,"box":{"x":116,"y":321,"width":186,"height":10}},{"id":"bf96c216-3d12-4bed-996d-2b1c531486c2","block_type":"box","text":"8","page_number":173,"box":{"x":303,"y":321,"width":5,"height":7}},{"id":"2c79a60b-31e2-41df-ba03-b7b7683e6ed7","block_type":"box","text":"may be justified by a company when it needs consistency and stability","page_number":173,"box":{"x":309,"y":321,"width":530,"height":12}},{"id":"b90b7f65-2c6a-4734-87d8-73933a09854a","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":173,"box":{"x":116,"y":337,"width":754,"height":12}},{"id":"48bcc7b8-40b8-43b8-9acd-74266df742fd","block_type":"box","text":"as closed-end funds).","page_number":173,"box":{"x":116,"y":352,"width":165,"height":12}},{"id":"7c704149-c03e-4e2b-90d5-b22f50e31704","block_type":"box","text":"Shareholders should have the opportunity to evaluate nominated directors individually rather than in","page_number":173,"box":{"x":116,"y":384,"width":746,"height":12}},{"id":"e945539c-56ef-45c6-8991-83dcb9df66dd","block_type":"box","text":"bundled slates. We look to companies to provide sufficient information on each director standing for","page_number":173,"box":{"x":117,"y":399,"width":743,"height":12}},{"id":"b711ed00-4377-4d15-aa42-aa6292e46b10","block_type":"box","text":"election so that shareholders can assess their capabilities and suitability. We will generally not support","page_number":173,"box":{"x":116,"y":415,"width":765,"height":12}},{"id":"b19dde99-c221-447b-aabf-f6530f4f192f","block_type":"box","text":"the election of directors whose names and biographical details have not been disclosed sufficiently in","page_number":173,"box":{"x":116,"y":430,"width":755,"height":12}},{"id":"b6309047-9af5-4670-9dca-937e333dcbb6","block_type":"box","text":"advance of the shareholder meeting.","page_number":173,"box":{"x":116,"y":446,"width":278,"height":12}},{"id":"6dc7c265-436a-463b-b92c-b629859bc155","block_type":"box","text":"Each director’s appointment should be dependent on receiving a simple majority of the votes cast at","page_number":173,"box":{"x":117,"y":477,"width":746,"height":12}},{"id":"c4e728b0-cd0a-4c28-879e-3151a23b1908","block_type":"box","text":"the shareholder meeting. Where a company’s practices differ, we look to the board to provide a","page_number":173,"box":{"x":116,"y":493,"width":712,"height":12}},{"id":"492c97af-7bde-4abe-bee1-7f7ba3350d18","block_type":"box","text":"detailed explanation as to how its approach best serves investors’ interests.","page_number":173,"box":{"x":116,"y":508,"width":567,"height":12}},{"id":"470b1350-9b86-4103-a0eb-a939dee2255a","block_type":"box","text":"We may vote for shareholder or management proposals seeking to establish annual election of","page_number":173,"box":{"x":116,"y":540,"width":710,"height":12}},{"id":"093f5daf-ef90-43f6-af34-fca26f77bb4a","block_type":"box","text":"directors and/or a simple majority vote standard for director elections. We may vote against all the","page_number":173,"box":{"x":116,"y":555,"width":732,"height":12}},{"id":"3ccee1dd-7402-41d9-8cef-871538810c73","block_type":"box","text":"directors standing for election as part of a single slate if we have concerns about the profile or","page_number":173,"box":{"x":116,"y":571,"width":701,"height":12}},{"id":"f2962841-7562-45bc-befa-ea747b0cf77d","block_type":"box","text":"performance of an individual director.","page_number":173,"box":{"x":117,"y":586,"width":280,"height":12}},{"id":"d5513f0f-9170-4015-85bd-6c8857601a78","block_type":"box","text":"Committees","page_number":173,"box":{"x":117,"y":618,"width":100,"height":9}},{"id":"36fb3451-da68-4c26-bbc9-5433f94a2882","block_type":"box","text":"Many boards establish committees to focus on specific responsibilities of the board such as audit and","page_number":173,"box":{"x":117,"y":649,"width":757,"height":12}},{"id":"a9fd2367-3983-463d-a071-64eedfdc293a","block_type":"box","text":"risk, governance and human capital, and executive compensation, amongst other matters. We do not","page_number":173,"box":{"x":117,"y":665,"width":751,"height":12}},{"id":"4e853624-e746-4949-b2f8-45de139452d0","block_type":"box","text":"prescribe to companies what committees they should establish, but we seek to understand the board’s","page_number":173,"box":{"x":117,"y":680,"width":760,"height":12}},{"id":"671c0865-8ab0-480e-b01e-8109ce13b823","block_type":"box","text":"rationale for the committee structure it determines is appropriate. We note that, in some markets,","page_number":173,"box":{"x":117,"y":696,"width":717,"height":12}},{"id":"61f9968d-6925-47b3-bc6a-ec0cceff4bab","block_type":"box","text":"regulation requires such committees. The responsibilities of each committee should be clear, and the","page_number":173,"box":{"x":117,"y":711,"width":748,"height":12}},{"id":"d1561278-25fd-498b-9579-90917c3b3bff","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":173,"box":{"x":117,"y":727,"width":706,"height":12}},{"id":"cc0edd6e-8b6b-4b90-9d69-4756f9c76054","block_type":"box","text":"committees. It is helpful to investor understanding when the board discloses the structure,","page_number":173,"box":{"x":116,"y":742,"width":665,"height":12}},{"id":"b3b3d442-0d01-4d7a-98a4-0c3b4b81175e","block_type":"box","text":"membership, proportion of independent directors, and responsibilities of each committee. The","page_number":173,"box":{"x":117,"y":758,"width":694,"height":12}},{"id":"8fa9eea7-1ea3-4605-8e28-a1cf4824b5da","block_type":"box","text":"responsibilities we typically see assigned to the three most common committees include:","page_number":173,"box":{"x":117,"y":773,"width":656,"height":12}},{"id":"d8703bf2-951f-48c9-ab61-a407fbeb51e4","block_type":"box","text":"• Audit and risk – oversight responsibilities for the integrity of financial reporting, risk management","page_number":173,"box":{"x":117,"y":805,"width":747,"height":12}},{"id":"4c3319bf-4088-4c6a-a835-af3581c4baaf","block_type":"box","text":"and compliance with legal and regulatory requirements; may also play an oversight role in relation","page_number":173,"box":{"x":150,"y":820,"width":725,"height":12}},{"id":"0a3ed025-a76e-4cfc-a67b-ce35e65d5561","block_type":"box","text":"to the internal audit function and whistleblowing mechanisms.","page_number":173,"box":{"x":150,"y":836,"width":460,"height":12}},{"id":"40229fe5-057f-4e67-a437-a15658dc9266","block_type":"box","text":"8","page_number":173,"box":{"x":116,"y":862,"width":5,"height":6}},{"id":"a6041547-fd2c-485f-b10a-bc25cf10b34c","block_type":"box","text":"A classified board divides the directors into classes with different overlapping terms. As a result,","page_number":173,"box":{"x":122,"y":862,"width":744,"height":12}},{"id":"a4e7f244-e451-4bcc-9a7f-c0987d404e63","block_type":"box","text":"only one class of directors stands for election in any one year.","page_number":173,"box":{"x":150,"y":877,"width":464,"height":12}},{"id":"b815c18d-1a09-4546-9a47-e6394435c13f","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":173,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"0ee744a5-fb11-4c75-b0a0-391db86e8108","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":173,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"53a43d08-bb16-4a46-ad41-c3d1ed74dab4","block_type":"box","text":"8","page_number":173,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"f2a544bb-79fd-44cf-a7ba-7456c35cfa4f","block_type":"box","text":"NM1026U-6033243-173/221","page_number":173,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"c9641a78-dd42-4664-b990-e87d4bd0bfcd","block_type":"box","text":"• Nominating, governance and human capital – oversight responsibilities for corporate governance","page_number":174,"box":{"x":117,"y":87,"width":756,"height":12}},{"id":"dd774097-8997-4789-aae0-0cb4959d85b5","block_type":"box","text":"principles and practices of the company, including the periodic review of board performance;","page_number":174,"box":{"x":150,"y":102,"width":691,"height":13}},{"id":"2f5d5b05-563d-44a0-88d7-cd002cdc02f5","block_type":"box","text":"responsibility for succession planning for CEO and key board roles, as well as the director","page_number":174,"box":{"x":150,"y":118,"width":672,"height":12}},{"id":"98006202-4792-440b-b20a-f1947e4cd66f","block_type":"box","text":"appointment process; may also have oversight responsibilities for human capital management","page_number":174,"box":{"x":150,"y":134,"width":703,"height":12}},{"id":"04cdf4a4-ccad-4bf1-9d16-799beb296b4e","block_type":"box","text":"strategies, including corporate culture and purpose.","page_number":174,"box":{"x":150,"y":149,"width":387,"height":12}},{"id":"85109f55-ad83-44a0-a739-6ecc82033625","block_type":"box","text":"• Executive compensation – determines the compensation policies and programs for the CEO and","page_number":174,"box":{"x":117,"y":174,"width":755,"height":12}},{"id":"a116deae-e0bd-4426-9daa-b5442aeb2e16","block_type":"box","text":"other executive officers, approves annual awards and payments under the policies; may also have","page_number":174,"box":{"x":150,"y":189,"width":735,"height":12}},{"id":"184fd5c4-6d80-456b-a4a2-783eaeb09707","block_type":"box","text":"oversight responsibilities for firm-wide compensation policies.","page_number":174,"box":{"x":150,"y":205,"width":460,"height":12}},{"id":"06759af4-c5e9-4327-a5fa-86496095b9a7","block_type":"box","text":"We may vote against the election of the chair of the committee or other directors serving as committee","page_number":174,"box":{"x":116,"y":239,"width":765,"height":12}},{"id":"b9ccb57a-edd1-4b55-bd35-fae7d1312728","block_type":"box","text":"members to convey concerns about how a committee has undertaken its responsibilities. We may vote","page_number":174,"box":{"x":117,"y":255,"width":767,"height":12}},{"id":"70215f86-85d0-4e4d-9274-750501c932d8","block_type":"box","text":"against the election of the most senior non-executive director if there is not a clearly disclosed","page_number":174,"box":{"x":116,"y":270,"width":702,"height":12}},{"id":"bc30bd18-ab55-445b-a6b8-2f89d88058ff","block_type":"box","text":"approach to board committees.","page_number":174,"box":{"x":116,"y":286,"width":236,"height":11}},{"id":"6d651267-3774-4931-92c5-1088c6a68b40","block_type":"box","text":"Board and director evaluation","page_number":174,"box":{"x":116,"y":320,"width":243,"height":9}},{"id":"7847ed0c-0ed3-4622-9170-cc9b36800214","block_type":"box","text":"We consider it best practice for companies to conduct an annual review of the performance of the","page_number":174,"box":{"x":116,"y":354,"width":729,"height":12}},{"id":"5a4f4ad2-82fa-4a82-b9da-619a18413414","block_type":"box","text":"board, the committees, the chair and individual directors. Periodically, this review could be undertaken","page_number":174,"box":{"x":117,"y":369,"width":762,"height":12}},{"id":"3015acfd-12a4-4dff-a9d0-cf80dae3635f","block_type":"box","text":"by an independent third party able to bring objective perspectives to the board on governance and","page_number":174,"box":{"x":117,"y":385,"width":732,"height":12}},{"id":"591451da-7ebc-402e-add4-1ab6597cd5f8","block_type":"box","text":"performance. We encourage companies to disclose their approach to and the objectives of","page_number":174,"box":{"x":117,"y":400,"width":677,"height":12}},{"id":"ac15ca55-e51b-4c3f-996a-1423aa3b955a","block_type":"box","text":"evaluations, including any changes made to the board’s approach as a result.","page_number":174,"box":{"x":116,"y":416,"width":581,"height":12}},{"id":"65231105-f962-46b1-b588-6d51298fcda7","block_type":"box","text":"Access to independent advice","page_number":174,"box":{"x":116,"y":450,"width":246,"height":12}},{"id":"58236f82-8af6-4500-a176-4d2d30a41b68","block_type":"box","text":"To support the directors in effectively fulfilling their duties to the company and shareholders, they","page_number":174,"box":{"x":116,"y":484,"width":723,"height":12}},{"id":"37e896d5-4b11-4054-844f-f4b35653cbd4","block_type":"box","text":"should have access to independent advice. In certain circumstances, it may be helpful to boards to","page_number":174,"box":{"x":116,"y":499,"width":738,"height":13}},{"id":"b3aad6ed-2147-416d-8171-d5beb29de3cd","block_type":"box","text":"retain independent third parties to advise on critical matters. These might include new industry","page_number":174,"box":{"x":117,"y":515,"width":703,"height":12}},{"id":"026b1036-6419-42e1-8edf-6c5218fb1a55","block_type":"box","text":"developments such as emergent and disruptive technology, operating events with material","page_number":174,"box":{"x":116,"y":531,"width":676,"height":12}},{"id":"71c91c05-4e13-4996-b7bf-1f80476bce91","block_type":"box","text":"consequences for the company’s reputation and/or performance, or significant transactions. Board","page_number":174,"box":{"x":116,"y":546,"width":735,"height":12}},{"id":"dc02ddaa-89e8-41ca-9a68-d4f144f5e821","block_type":"box","text":"committees may similarly retain third parties to advise them on specialist matters such as audit,","page_number":174,"box":{"x":116,"y":562,"width":713,"height":12}},{"id":"4f2ab901-919d-4dfb-8595-ae503865b106","block_type":"box","text":"compensation and succession planning.","page_number":174,"box":{"x":116,"y":577,"width":303,"height":12}},{"id":"419b2e28-eedb-4997-9c6e-ae66f695f162","block_type":"box","text":"Executive compensation","page_number":174,"box":{"x":402,"y":620,"width":201,"height":12}},{"id":"70da4ce7-c7bb-428e-820d-f62a2eedd661","block_type":"box","text":"Boards play an important role in establishing compensation arrangements that enable the company to","page_number":174,"box":{"x":117,"y":655,"width":760,"height":12}},{"id":"3ba93327-634c-43a3-9dff-9fe4b0a529a2","block_type":"box","text":"recruit, retain and reward the caliber of executive management necessary to lead and operate the","page_number":174,"box":{"x":117,"y":670,"width":724,"height":12}},{"id":"96e52904-4322-400f-a27f-b31820521c60","block_type":"box","text":"company to deliver superior financial returns over time. We focus on alignment between variable pay","page_number":174,"box":{"x":116,"y":685,"width":748,"height":13}},{"id":"5d9a6986-0954-418b-9b5c-507253da0f50","block_type":"box","text":"and a company’s financial performance.","page_number":174,"box":{"x":116,"y":701,"width":296,"height":12}},{"id":"629de892-1260-44f7-bb5c-f5c3e9895077","block_type":"box","text":"Generally, executive compensation arrangements have four components: base salary, annual bonus","page_number":174,"box":{"x":117,"y":735,"width":746,"height":12}},{"id":"1e298632-4ab7-4ae2-9d02-24fcb427a7fd","block_type":"box","text":"that rewards performance against short-term metrics, incentives—most often share-based- that reward","page_number":174,"box":{"x":116,"y":751,"width":762,"height":12}},{"id":"42ee0f30-530e-4f57-933a-93051f4421b1","block_type":"box","text":"performance against long-term metrics, and pensions and benefits. In our observation, base salary,","page_number":174,"box":{"x":117,"y":766,"width":736,"height":12}},{"id":"a8a11833-88bb-4ccc-9f60-af0ad07d2450","block_type":"box","text":"pensions and benefits are largely set relative to market norms and benchmarks. The annual bonus and","page_number":174,"box":{"x":117,"y":782,"width":763,"height":12}},{"id":"341bf899-fac9-4e3b-821b-40e87bc157ca","block_type":"box","text":"share-based incentive, or variable pay plans, tend to be tailored to the company, its sector and long","page_number":174,"box":{"x":116,"y":797,"width":744,"height":12}},{"id":"07fee560-3fac-4321-9f5a-4b55e31b6244","block_type":"box","text":"term strategy, as well as the individuals the board is seeking to recruit and motivate.","page_number":174,"box":{"x":116,"y":813,"width":622,"height":12}},{"id":"c7a83fcd-d579-4e46-8ef5-c9c6d7fbf5b0","block_type":"box","text":"Recognizing the unique circumstances of each company, we determine whether to support a","page_number":174,"box":{"x":117,"y":847,"width":693,"height":12}},{"id":"50c8b489-7a9b-44d6-a252-25fa10ff72c9","block_type":"box","text":"company’s approach to executive compensation on a case-by-case basis. We rely on companies","page_number":174,"box":{"x":116,"y":862,"width":726,"height":12}},{"id":"0bfa3304-2791-4524-98b7-da34daabfdc6","block_type":"box","text":"providing sufficient quantitative and qualitative information in their disclosures to enable shareholders","page_number":174,"box":{"x":117,"y":878,"width":754,"height":12}},{"id":"94e0e0f0-9487-489d-9bfb-37c984473b34","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":174,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"24788c3d-3434-436d-8179-f78ea2dbb7f9","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":174,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"ae303492-dc6b-4c2c-a5ce-fc8f219d185a","block_type":"box","text":"9","page_number":174,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"e0bb01b2-4657-4bd9-92b8-7c8a8365eea2","block_type":"box","text":"NM1026U-6033243-174/221","page_number":174,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"e0a84941-cdef-43b3-8dd4-6d09ecaf2032","block_type":"box","text":"to understand the compensation arrangements and assess the alignment with investors’ interests.","page_number":175,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"b97090e9-db7f-41c5-8032-2d8721e41d92","block_type":"box","text":"Features we look for in compensation arrangements include:","page_number":175,"box":{"x":117,"y":102,"width":454,"height":13}},{"id":"9b028323-013b-48a9-bb89-599bb6407e4f","block_type":"box","text":"• Fixed pay components, including base salary, benefits and prerequisites that are appropriate in","page_number":175,"box":{"x":117,"y":133,"width":744,"height":12}},{"id":"a3c15e9b-bfaf-40f6-9f5f-92f3f193fb4c","block_type":"box","text":"the context of the company’s size, sector and market.","page_number":175,"box":{"x":150,"y":148,"width":402,"height":12}},{"id":"69942f31-9644-458b-9eed-6d60f6e068ed","block_type":"box","text":"• Variable pay subject to performance metrics that are closely linked to the company’s short- and","page_number":175,"box":{"x":117,"y":171,"width":745,"height":12}},{"id":"bcf6f060-cfa5-4946-82d6-243d9a08bcdd","block_type":"box","text":"long-term strategic objectives.","page_number":175,"box":{"x":150,"y":187,"width":228,"height":12}},{"id":"75f8385b-8241-418d-a6cd-17f228e44bbb","block_type":"box","text":"• Long-term incentives that motivate sustained performance across a multi-year period.","page_number":175,"box":{"x":117,"y":210,"width":674,"height":12}},{"id":"d28e6559-7f26-4c49-a4d7-3953811710d4","block_type":"box","text":"• A balance between fixed and variable pay, short- and long-term incentives, and specific","page_number":175,"box":{"x":117,"y":233,"width":687,"height":12}},{"id":"c5b83fef-11aa-4ba2-a6fe-50bd5460ca6b","block_type":"box","text":"instruments (cash and equity awards) that promotes pay program durability and seldom","page_number":175,"box":{"x":150,"y":248,"width":654,"height":12}},{"id":"caa35332-333e-4c64-aa8f-315c69157715","block_type":"box","text":"necessitates one-off, discretionary payments.","page_number":175,"box":{"x":150,"y":264,"width":342,"height":12}},{"id":"d611f697-471c-44dd-8550-80f3d5325379","block_type":"box","text":"• Pay outcomes that are consistent with the returns to investors over the relevant time period.","page_number":175,"box":{"x":117,"y":287,"width":720,"height":12}},{"id":"cb6cf995-59e6-462f-81be-231216b633f6","block_type":"box","text":"• Board discretion, if allowed within the variable pay arrangements, to be used sparingly,","page_number":175,"box":{"x":117,"y":310,"width":683,"height":12}},{"id":"8591aa3d-eef1-45b0-851a-885e2caa2bf1","block_type":"box","text":"responsibly and transparently.","page_number":175,"box":{"x":150,"y":325,"width":228,"height":12}},{"id":"9f063bec-d116-4a0e-b24b-d5f68c39cdc7","block_type":"box","text":"• A requirement, that participants in long-term share-based incentive plans build a meaningful","page_number":175,"box":{"x":117,"y":348,"width":720,"height":12}},{"id":"b11192a9-be2c-4446-aafe-6aa58e24b63c","block_type":"box","text":"shareholding in the company within a defined time period, as determined by the board or relevant","page_number":175,"box":{"x":150,"y":363,"width":727,"height":13}},{"id":"8ef25c06-98ce-4a28-8265-e30a240f1bb2","block_type":"box","text":"board committee.","page_number":175,"box":{"x":150,"y":379,"width":134,"height":10}},{"id":"c06fa027-a60b-47c9-b3a7-2d3c23624529","block_type":"box","text":"• Change of control provisions that appropriately balance the interests of executives and","page_number":175,"box":{"x":117,"y":402,"width":681,"height":12}},{"id":"769b690f-d3cc-4900-a5ad-133bcae18b06","block_type":"box","text":"shareholders.","page_number":175,"box":{"x":150,"y":418,"width":106,"height":9}},{"id":"844c21cd-6b0c-4b47-a45d-4e8a6a0fcf8b","block_type":"box","text":"• Clawback or malus provisions that allow the company to recoup or hold back variable","page_number":175,"box":{"x":117,"y":440,"width":671,"height":12}},{"id":"697d4e77-bcf3-4b94-ab9e-a33ba0ffd5cd","block_type":"box","text":"compensation from individuals whose awards were based on fraudulent activities, misstated","page_number":175,"box":{"x":150,"y":456,"width":688,"height":12}},{"id":"22fc65cf-5ce7-4b47-8b37-2cbcbd34d98b","block_type":"box","text":"financial reports, or executive misconduct.","page_number":175,"box":{"x":149,"y":471,"width":318,"height":12}},{"id":"76c69d81-9721-4c1e-8eb5-fdee8d8768a3","block_type":"box","text":"• Severance arrangements that protect the company’s interests but do not cost more than is","page_number":175,"box":{"x":117,"y":494,"width":709,"height":12}},{"id":"08517025-33f9-4efb-83de-d8ebde4925a2","block_type":"box","text":"contractual.","page_number":175,"box":{"x":150,"y":510,"width":91,"height":9}},{"id":"65f6d039-93d0-4928-a1db-3657ad310a35","block_type":"box","text":"We may vote against proposals to introduce new share-based incentives, approve existing policies or","page_number":175,"box":{"x":116,"y":540,"width":757,"height":12}},{"id":"f8bb384f-65ff-4649-8871-d715a3e6e861","block_type":"box","text":"plans, or approve the compensation report where we do not see alignment between executive","page_number":175,"box":{"x":117,"y":556,"width":701,"height":12}},{"id":"2edc033c-2aff-46dc-8e02-79cc54dffe82","block_type":"box","text":"compensation arrangements and our clients’ financial interests. When there is not an alternative, or","page_number":175,"box":{"x":116,"y":571,"width":742,"height":12}},{"id":"9ffbf932-6dbd-4d00-84eb-cce43d6c7b71","block_type":"box","text":"where there have been multi-year issues with compensation misaligned with performance, we may","page_number":175,"box":{"x":116,"y":587,"width":738,"height":12}},{"id":"df767d33-38b0-4d8a-b68c-b47c3d05c27c","block_type":"box","text":"vote against the election of the chair of the responsible committee, or the most senior independent","page_number":175,"box":{"x":116,"y":602,"width":735,"height":12}},{"id":"5b67b6dc-e223-448b-be4b-e2523b18adc5","block_type":"box","text":"director.","page_number":175,"box":{"x":116,"y":618,"width":65,"height":9}},{"id":"d931bf92-9f53-4271-97db-7f141e57569a","block_type":"box","text":"Non-executive director compensation","page_number":175,"box":{"x":350,"y":656,"width":305,"height":11}},{"id":"ae904ccd-864e-4cc1-9917-4d43656b4ff0","block_type":"box","text":"Companies generally pay non-executive directors an annual retainer or fee in cash, shares or a","page_number":175,"box":{"x":117,"y":686,"width":706,"height":12}},{"id":"30b06813-ddc9-4f28-aef6-9aa636fcff78","block_type":"box","text":"combination of the two. Some companies also pay additional fees for service on board committees or","page_number":175,"box":{"x":116,"y":701,"width":752,"height":12}},{"id":"61660c22-6486-4e59-bc7c-fd28214638f0","block_type":"box","text":"in board leadership roles. We do not support non-executive directors participating in performance","page_number":175,"box":{"x":117,"y":717,"width":726,"height":12}},{"id":"951cfef5-b43b-4b17-9740-f45d1bbfceeb","block_type":"box","text":"based incentive plans as doing so may create a conflict of interest and undermine their independence","page_number":175,"box":{"x":117,"y":732,"width":753,"height":12}},{"id":"d04ee02e-4cf8-4489-a903-29a69abde65d","block_type":"box","text":"from management, whom they oversee.","page_number":175,"box":{"x":116,"y":748,"width":295,"height":12}},{"id":"a44fa609-a5d0-437b-8e1f-4b94955df49c","block_type":"box","text":"Capital structure","page_number":175,"box":{"x":433,"y":786,"width":133,"height":12}},{"id":"c16424c8-1ea9-44b8-97fe-c789e1ef5139","block_type":"box","text":"Boards are responsible for ensuring senior executive leadership has established a capital strategy that","page_number":175,"box":{"x":117,"y":816,"width":760,"height":12}},{"id":"8fa40c80-fb7d-4af8-851e-824a908d7c58","block_type":"box","text":"achieves appropriate capital allocation in support of long-term financial resilience.","page_number":175,"box":{"x":116,"y":832,"width":610,"height":12}},{"id":"7f163384-6627-4e47-8616-ed8fe9545d1b","block_type":"box","text":"Where company practices diverge from those set out below, we look for companies to disclose why","page_number":175,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"9f9897fb-ec93-49b4-bb7f-d6c626312a25","block_type":"box","text":"they view these practices to be aligned with shareholders’ interests. We may vote against management","page_number":175,"box":{"x":116,"y":878,"width":772,"height":11}},{"id":"b2a99dc5-0226-446d-b649-9fdbbe261428","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":175,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"65b3a5c9-459f-47d8-8bee-4571783aaa29","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":175,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"8db6d0f5-da2c-4638-b465-46fce1c1417a","block_type":"box","text":"10","page_number":175,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"4dc50ee0-b9ac-4afb-82cf-1fbd23f3a769","block_type":"box","text":"NM1026U-6033243-175/221","page_number":175,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"e4d82c1b-0b37-42cc-87cc-8af2d8fb27e7","block_type":"box","text":"proposals seeking capital-related authorities, or the election of the most senior independent director, if","page_number":176,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"143c1ab4-8627-4377-9b15-0f472a9afeb6","block_type":"box","text":"we have concerns about a company’s approach. We may also support a shareholder proposal seeking","page_number":176,"box":{"x":116,"y":103,"width":768,"height":12}},{"id":"dfefbcdb-da18-4725-9b3e-378aae6e56cb","block_type":"box","text":"conversion of shares with differentiated voting rights to a one-share, one-vote standard.","page_number":176,"box":{"x":116,"y":118,"width":655,"height":12}},{"id":"b4ea709e-83d9-418a-a9e2-f06b30bedf41","block_type":"box","text":"Share","page_number":176,"box":{"x":116,"y":148,"width":46,"height":10}},{"id":"1a7ddc43-6a25-4c07-bfba-d33515ea8ace","block_type":"box","text":"issuance","page_number":176,"box":{"x":168,"y":149,"width":76,"height":9}},{"id":"721d0375-70cb-4273-a2cd-e65b9373b8d9","block_type":"box","text":"We assess requests for share issuance for particular transactions on a case-by-case basis. We will","page_number":176,"box":{"x":116,"y":179,"width":741,"height":12}},{"id":"fad75a22-885a-42c4-8dfc-b7ac9e312ddd","block_type":"box","text":"generally support authorities to issue shares when subject to pre-emptive rights, and up to 20% absent","page_number":176,"box":{"x":116,"y":194,"width":768,"height":12}},{"id":"defbef7b-2894-451a-8c73-572d86b0bff4","block_type":"box","text":"pre-emptive rights. We consider it good practice for companies to seek regular approval of these","page_number":176,"box":{"x":117,"y":210,"width":720,"height":12}},{"id":"12c9f2c2-aa3d-4055-900d-7b1d4e54f1e6","block_type":"box","text":"authorities to allow shareholders to take into consideration how prior authorities were used, as well as","page_number":176,"box":{"x":116,"y":226,"width":759,"height":11}},{"id":"315bde9c-1bcf-4a4a-8593-8c3a60ca9d08","block_type":"box","text":"the current circumstances of the company and the market environment.","page_number":176,"box":{"x":116,"y":241,"width":536,"height":12}},{"id":"3f92d98f-c369-4628-9b2a-b0934afcfb13","block_type":"box","text":"Share buybacks","page_number":176,"box":{"x":116,"y":271,"width":133,"height":12}},{"id":"3028dfc6-bd9d-4479-ad9a-5c2752b66596","block_type":"box","text":"We assess share buyback proposals in the context of the company’s disclosed capital management","page_number":176,"box":{"x":116,"y":302,"width":746,"height":12}},{"id":"a050acb6-eb57-46d2-a8ed-135db7005964","block_type":"box","text":"strategy and management’s determination of the appropriate balance between investment that","page_number":176,"box":{"x":116,"y":317,"width":706,"height":12}},{"id":"4e213ce9-01d8-4cc8-99bc-5de52e7a9f84","block_type":"box","text":"supports the long-term growth of the company and returning cash to investors. We also take into","page_number":176,"box":{"x":116,"y":333,"width":721,"height":12}},{"id":"24486677-f1a9-4822-925f-049c9b08af29","block_type":"box","text":"consideration the effect of a buyback program on the company’s balance sheet and executive","page_number":176,"box":{"x":116,"y":348,"width":701,"height":12}},{"id":"caca32ec-d7fe-4314-a7ea-82f881bad232","block_type":"box","text":"compensation arrangements and the price at which shares are repurchased relative to market price.","page_number":176,"box":{"x":116,"y":364,"width":748,"height":12}},{"id":"d6cd709a-e0d1-4b4d-bf92-501681addd49","block_type":"box","text":"We consider it good practice for companies to seek regular approval of these authorities to allow","page_number":176,"box":{"x":116,"y":379,"width":721,"height":12}},{"id":"51952e7b-dd52-4cb9-984f-eb23edff403e","block_type":"box","text":"shareholders to take into consideration how prior authorities were used, as well as the current","page_number":176,"box":{"x":116,"y":395,"width":700,"height":12}},{"id":"7c1608e5-0c63-4232-8735-a8950bd78eab","block_type":"box","text":"circumstances of the company and the market environment.","page_number":176,"box":{"x":116,"y":410,"width":451,"height":12}},{"id":"8cbfbfc6-c2eb-4094-b15b-192af0f23116","block_type":"box","text":"Dividends","page_number":176,"box":{"x":117,"y":441,"width":84,"height":9}},{"id":"a4e6b9f9-efc1-4bc2-9642-964efd484976","block_type":"box","text":"We generally defer to management and the board on dividend policy but may engage to seek further","page_number":176,"box":{"x":116,"y":471,"width":752,"height":12}},{"id":"340da725-9dd8-457c-8da1-730b50855187","block_type":"box","text":"clarification where a proposed dividend appears out of line with the company’s financial position.","page_number":176,"box":{"x":116,"y":487,"width":720,"height":12}},{"id":"e7342658-93a0-4b78-acbc-ebee116c6679","block_type":"box","text":"Differentiated voting rights","page_number":176,"box":{"x":117,"y":517,"width":219,"height":12}},{"id":"1133b154-5f89-42b6-a4b4-6dfb875266bd","block_type":"box","text":"We prefer companies to adopt a one-share, one-vote structure for share classes with the same","page_number":176,"box":{"x":116,"y":547,"width":710,"height":12}},{"id":"4b50bbe5-1881-48c0-9f02-bf0207f21195","block_type":"box","text":"economic exposure. Certain companies, particularly those new to public markets, could make the case","page_number":176,"box":{"x":116,"y":563,"width":768,"height":12}},{"id":"4447ffab-61fa-4d3f-acf4-ee4f115b946e","block_type":"box","text":"to adopt a differentiated voting rights structure, or dual class stock. In those situations, we encourage","page_number":176,"box":{"x":116,"y":578,"width":755,"height":13}},{"id":"1387cf77-a49b-4ee5-b880-f2d64dfff3a4","block_type":"box","text":"companies to evaluate and seek approval for their capital structure on a periodic basis.","page_number":176,"box":{"x":116,"y":594,"width":650,"height":12}},{"id":"1f15e1fa-82f4-43c0-b963-de073d924523","block_type":"box","text":"Transactions and special situations","page_number":176,"box":{"x":357,"y":632,"width":290,"height":12}},{"id":"c05dbbb6-7e38-4b7f-8727-8a07fb5cea1e","block_type":"box","text":"We monitor developments in transactions and special situations closely and undertake our own","page_number":176,"box":{"x":116,"y":662,"width":706,"height":12}},{"id":"5fedb60e-634d-4286-8d79-c3009e496c06","block_type":"box","text":"detailed analyses of proposals.","page_number":176,"box":{"x":116,"y":678,"width":229,"height":12}},{"id":"f56eceac-c395-4e82-87e7-931a758a105e","block_type":"box","text":"Mergers and acquisitions","page_number":176,"box":{"x":117,"y":708,"width":201,"height":12}},{"id":"8cb22a8a-58cb-4d5d-baea-a7e62cfc508a","block_type":"box","text":"We evaluate proposed mergers or acquisitions by assessing the financial outcome for our clients as","page_number":176,"box":{"x":116,"y":739,"width":740,"height":12}},{"id":"82980323-6835-4189-84c3-7307cd883af2","block_type":"box","text":"minority shareholders. Management should provide an assessment of the proposed transaction’s","page_number":176,"box":{"x":117,"y":754,"width":719,"height":12}},{"id":"48a6d137-ef05-4cfd-89f5-fef3f72d8bb7","block_type":"box","text":"strategic and financial rationale, along with its execution and operational risks. We review each","page_number":176,"box":{"x":116,"y":770,"width":703,"height":12}},{"id":"5e5ae644-6c34-48b2-b5b5-66c3e5a7dd7c","block_type":"box","text":"transaction independently based on these factors and the degree to which the transaction enhances","page_number":176,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"d9fc80e1-8be6-4d4b-8aa8-dc70bb585ec7","block_type":"box","text":"shareholder value. The board might consider establishing an ad hoc transaction committee to","page_number":176,"box":{"x":116,"y":801,"width":693,"height":12}},{"id":"c9216b1e-03f0-49b5-bc4b-b6f2e44ffe81","block_type":"box","text":"undertake an independent assessment of a significant merger or acquisition, in advance of making its","page_number":176,"box":{"x":117,"y":816,"width":752,"height":12}},{"id":"fc8782be-96b0-4ec2-8643-21b5ea7fb0fc","block_type":"box","text":"recommendation to shareholders.","page_number":176,"box":{"x":117,"y":832,"width":254,"height":9}},{"id":"ddd5ed82-aebf-44f1-b27d-d7ab3077518a","block_type":"box","text":"We will vote against transactions that, in our assessment, do not advance our clients’ financial","page_number":176,"box":{"x":116,"y":862,"width":703,"height":12}},{"id":"3b2b4f3e-a37f-4ae0-a454-a7ed89af61d7","block_type":"box","text":"interests.","page_number":176,"box":{"x":117,"y":878,"width":72,"height":9}},{"id":"0628a376-251b-423a-aa8f-ccac7f4ee56c","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":176,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"2439ba2c-c7de-4668-8501-2776ed4506cf","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":176,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"1f0b77fa-a24e-41df-a759-3e23e4ce2938","block_type":"box","text":"11","page_number":176,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"361d2605-fe24-4e42-bd9b-ea5f21b184c3","block_type":"box","text":"NM1026U-6033243-176/221","page_number":176,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"ea99f2bf-7dd6-42ba-b461-3a4f2c6b0012","block_type":"box","text":"Anti-takeover defenses","page_number":177,"box":{"x":116,"y":87,"width":190,"height":10}},{"id":"5930270b-f3da-47f1-8979-3f8379e4b6c3","block_type":"box","text":"In principle, we do not support companies using anti-takeover defenses, also known as poison pills or","page_number":177,"box":{"x":117,"y":119,"width":757,"height":12}},{"id":"23bae3ed-3de7-4df8-a5ba-0d7c7cc8940f","block_type":"box","text":"shareholder rights plans, as they can entrench management and boards which have not delivered","page_number":177,"box":{"x":116,"y":134,"width":731,"height":12}},{"id":"fdbfeceb-6bc3-4453-b8d4-d09390f6ac86","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":177,"box":{"x":117,"y":150,"width":751,"height":12}},{"id":"a9832cba-744b-4601-8363-0bd8aeeb1cdb","block_type":"box","text":"takeover that is considered sub-optimal and enable management to seek an improved offer. Similarly,","page_number":177,"box":{"x":116,"y":165,"width":761,"height":12}},{"id":"57614837-8f79-40e4-831a-e353384cd68a","block_type":"box","text":"management could make the case to use a poison pill to block a shareholder activism campaign that","page_number":177,"box":{"x":117,"y":181,"width":751,"height":12}},{"id":"0f3fe125-08ca-4883-bd8a-064c3dd5ecb9","block_type":"box","text":"may be counter to the interests of other investors. Defense mechanisms introduced in these","page_number":177,"box":{"x":117,"y":196,"width":687,"height":12}},{"id":"cae5d619-5178-4dd6-97f2-b0c243d45cfb","block_type":"box","text":"circumstances should be limited in term and threshold, and also be closely monitored by the","page_number":177,"box":{"x":116,"y":212,"width":688,"height":12}},{"id":"a86cb4c0-cbd2-4e49-bd9d-722e88b579d7","block_type":"box","text":"independent members of the board. We consider it good practice for companies to put to a shareholder","page_number":177,"box":{"x":117,"y":227,"width":771,"height":12}},{"id":"f0260469-b594-4047-a139-813a7922d4f8","block_type":"box","text":"vote any mechanisms expected to be in place for more than 12 months.","page_number":177,"box":{"x":116,"y":243,"width":538,"height":12}},{"id":"59a18acf-d625-40aa-9443-50a94bee7420","block_type":"box","text":"Shareholder activism","page_number":177,"box":{"x":116,"y":274,"width":175,"height":10}},{"id":"ab2b259e-2e96-435e-badb-4243aeb68f8d","block_type":"box","text":"When companies are the focus of an activism campaign, we may communicate with the activist to","page_number":177,"box":{"x":116,"y":306,"width":732,"height":12}},{"id":"6055e36e-dc0d-41b4-8442-ac1b1809ac69","block_type":"box","text":"understand their analysis and objectives, once they have publicly disclosed their campaign. We may","page_number":177,"box":{"x":117,"y":322,"width":748,"height":12}},{"id":"c01ef309-9f82-483a-b5c0-3c1395a1c02b","block_type":"box","text":"also engage with company management and possibly board members, especially those the activist","page_number":177,"box":{"x":116,"y":337,"width":741,"height":12}},{"id":"e108e5ae-dc48-4cd4-bd7b-12be196a5790","block_type":"box","text":"may be seeking to replace. In our assessment, we evaluate various factors, including the concerns","page_number":177,"box":{"x":117,"y":353,"width":737,"height":12}},{"id":"53465414-f72e-4668-b516-e64403957f62","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":177,"box":{"x":117,"y":368,"width":728,"height":12}},{"id":"da48f51e-a312-43e8-bedd-27852e5bab50","block_type":"box","text":"plans; and the qualifications of each party’s candidates. We evaluate each contested situation by","page_number":177,"box":{"x":117,"y":384,"width":723,"height":12}},{"id":"2e34a190-bd71-49f2-b335-7bf1c5a82f89","block_type":"box","text":"assessing the potential financial outcome for our clients as minority shareholders.","page_number":177,"box":{"x":116,"y":399,"width":610,"height":12}},{"id":"cee43f91-b9d0-47fb-a275-9567b0335269","block_type":"box","text":"We may support board candidates nominated by a shareholder activist if BAIS, in its independent","page_number":177,"box":{"x":116,"y":431,"width":728,"height":12}},{"id":"f4cd8915-60c3-45f5-88a4-b0ecbd22e708","block_type":"box","text":"judgment, or the relevant portfolio manager has determined that there is a case for change to enhance","page_number":177,"box":{"x":115,"y":446,"width":767,"height":13}},{"id":"68d857e0-d0cb-4643-a089-7c0ce717274d","block_type":"box","text":"shareholder value, or if the incumbent board members do not demonstrate the relevant skills and","page_number":177,"box":{"x":116,"y":462,"width":725,"height":11}},{"id":"1fc83523-5066-42e2-911a-93f9a8de4839","block_type":"box","text":"expertise or have a poor track record of protecting shareholders’ interests.","page_number":177,"box":{"x":116,"y":477,"width":556,"height":13}},{"id":"8279e582-a6d2-4969-82af-d0a8bee6f53c","block_type":"box","text":"Significant shareholders and related party transactions","page_number":177,"box":{"x":116,"y":509,"width":446,"height":12}},{"id":"5995ca61-7709-40a2-a4de-e5a00a95a441","block_type":"box","text":"Boards of companies with affiliated shareholders or directors should give equitable consideration to the","page_number":177,"box":{"x":117,"y":541,"width":768,"height":12}},{"id":"b3a071fd-7a7d-4c36-8a26-d97f16fd54ef","block_type":"box","text":"interests of all shareholders when evaluating related party transactions.","page_number":177,"box":{"x":117,"y":556,"width":534,"height":12}},{"id":"76422abb-dbe9-4799-8488-96189a2b3e2c","block_type":"box","text":"We consider it good practice for transactions with related parties, such as significant shareholders or","page_number":177,"box":{"x":116,"y":588,"width":751,"height":12}},{"id":"00b25169-29cd-478e-96d7-d76101166840","block_type":"box","text":"companies affiliated with the public company, to be disclosed in detail and conducted on terms similar","page_number":177,"box":{"x":116,"y":604,"width":760,"height":12}},{"id":"c7a30dc8-f3fc-4bfb-a89f-1fdd0a3e4f83","block_type":"box","text":"to what would objectively have been agreed with a non-related party. In our view, such transactions","page_number":177,"box":{"x":116,"y":619,"width":743,"height":12}},{"id":"27bdba62-62fa-4dd1-9777-613add4ddc40","block_type":"box","text":"should be reviewed and approved by the independent members of the board, and if voted on, only","page_number":177,"box":{"x":116,"y":635,"width":734,"height":12}},{"id":"f460ff03-a1af-4994-8921-8dc20992b7a0","block_type":"box","text":"disinterested shareholders should vote.","page_number":177,"box":{"x":116,"y":650,"width":297,"height":10}},{"id":"72700bc3-6eac-42db-9ef0-5023a63731ae","block_type":"box","text":"Corporate reporting, risk management and audit","page_number":177,"box":{"x":307,"y":690,"width":385,"height":12}},{"id":"5feb352d-9414-4865-9c58-4f41fa568e95","block_type":"box","text":"Investors depend on corporate reporting, both regulatory and voluntary, to understand a company’s","page_number":177,"box":{"x":117,"y":722,"width":737,"height":12}},{"id":"3c9b7fcb-fc7a-4a98-a4b6-7d97f3d7c116","block_type":"box","text":"strategy, its implementation and financial performance, as well as to assess the quality of management","page_number":177,"box":{"x":116,"y":737,"width":765,"height":12}},{"id":"7cb22979-6697-46de-9e38-1d04c240fb94","block_type":"box","text":"and operations and potential for the company to create shareholder value over time. We consider it","page_number":177,"box":{"x":116,"y":753,"width":736,"height":12}},{"id":"71e5be8a-1ef5-4b76-bb87-ea07bb5eec51","block_type":"box","text":"good practice for the board to oversee corporate reporting and the policies and procedures","page_number":177,"box":{"x":116,"y":768,"width":674,"height":12}},{"id":"187c611f-2b6e-4000-ac2e-9b3c8eefcf21","block_type":"box","text":"underpinning the internal audit function and external audit.","page_number":177,"box":{"x":117,"y":784,"width":430,"height":12}},{"id":"5dc21fe0-6344-444e-a431-9bc2826ac360","block_type":"box","text":"A company’s financial reporting should provide decision-useful information for investors, and other","page_number":177,"box":{"x":116,"y":815,"width":730,"height":13}},{"id":"2dcafd96-d919-494d-a3c9-f35d546ec5da","block_type":"box","text":"stakeholders, on its financial performance and position. It should provide an accurate and balanced","page_number":177,"box":{"x":116,"y":831,"width":742,"height":12}},{"id":"278b0f7a-b77c-4b51-a764-90068381846a","block_type":"box","text":"assessment of the risks and opportunities the company faces in realizing its long-term strategy.","page_number":177,"box":{"x":116,"y":846,"width":712,"height":13}},{"id":"7889bf5e-e6fc-4fe6-95e2-d30052ea0f3a","block_type":"box","text":"Accordingly, the assumptions made by management and reviewed by the auditor in preparing the","page_number":177,"box":{"x":116,"y":862,"width":729,"height":12}},{"id":"b420612c-5600-4f5c-b9f7-a23084328dd5","block_type":"box","text":"financial statements should be reasonable and justified. Financial statements should be prepared in","page_number":177,"box":{"x":116,"y":877,"width":744,"height":13}},{"id":"3cc66465-60a2-4b6b-a3ad-8d330921527a","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":177,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"28022dff-a457-4f12-8d4e-3c73d03a9b0e","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":177,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"b68094a7-f0d7-4296-94ef-70aa63b234fc","block_type":"box","text":"12","page_number":177,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"52dafb5a-e463-4f1d-ace1-9ac9ca41094d","block_type":"box","text":"NM1026U-6033243-177/221","page_number":177,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"1ee8d99a-c709-49d8-b26e-f565df1a3b48","block_type":"box","text":"accordance with globally developed reporting standards and any divergence from generally accepted","page_number":178,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"6b9ad460-ec32-4a91-bc3d-f78f41a091ea","block_type":"box","text":"accounting principles should be explained in detail and justified. Accounting restatements should be","page_number":178,"box":{"x":116,"y":102,"width":745,"height":13}},{"id":"0556f3a2-27db-452f-915c-3f678d330d45","block_type":"box","text":"explained in detail and any remedial actions, and the implications of these, disclosed.","page_number":178,"box":{"x":116,"y":118,"width":638,"height":12}},{"id":"b6d60e71-4714-4924-977e-15a9d8e7b18d","block_type":"box","text":"In this context, audit committees play a vital role in a company’s financial reporting system by providing","page_number":178,"box":{"x":117,"y":149,"width":769,"height":12}},{"id":"1856a2ac-7b01-4162-abba-45ff4f3ab25c","block_type":"box","text":"independent oversight of the accounts, material financial and, where appropriate to the jurisdiction,","page_number":178,"box":{"x":117,"y":165,"width":737,"height":12}},{"id":"f376c3f0-be8e-4b63-9dab-57889bbe0310","block_type":"box","text":"non-financial information, internal control frameworks and Enterprise Risk Management systems. In","page_number":178,"box":{"x":117,"y":180,"width":743,"height":12}},{"id":"7c18b867-ed2c-4335-a153-ec9a903cb53b","block_type":"box","text":"our view, effective audit committee oversight strengthens the quality and reliability of a company’s","page_number":178,"box":{"x":116,"y":196,"width":730,"height":12}},{"id":"92787706-df14-4521-b46e-5803cdd22a24","block_type":"box","text":"financial statements and provides an important level of reassurance to shareholders. Audit committees","page_number":178,"box":{"x":116,"y":211,"width":767,"height":12}},{"id":"53fd877f-5c6a-4e5d-971f-46b16f55cced","block_type":"box","text":"should have a procedure in place for assessing the independence of the auditor and the quality of the","page_number":178,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"17a93b07-0b5f-4210-8222-ee19cf75b4f4","block_type":"box","text":"external audit process annually.","page_number":178,"box":{"x":116,"y":242,"width":241,"height":12}},{"id":"44fa977b-09be-4144-9eab-e1889cac74bd","block_type":"box","text":"Similarly, we encourage companies to disclose material sustainability-related factors that are integral to","page_number":178,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"0e314395-5afa-4340-aa04-cd7e7da3cb36","block_type":"box","text":"how a company manages risks or generates revenue. BAIS finds it helpful to our understanding when","page_number":178,"box":{"x":117,"y":289,"width":758,"height":12}},{"id":"36109e40-11e1-4628-8407-ced85087ce3a","block_type":"box","text":"companies provide robust, standardized disclosures on their material sustainability-related risks and","page_number":178,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"2cf174a2-01db-459c-93e2-b48474273737","block_type":"box","text":"opportunities. The International Sustainability Standards Board (ISSB) is one entity working to meet","page_number":178,"box":{"x":116,"y":320,"width":743,"height":12}},{"id":"f86c3666-9098-4200-833a-90d009c73c4c","block_type":"box","text":"these objectives through its reporting standards, which may be helpful to companies in preparing such","page_number":178,"box":{"x":116,"y":335,"width":763,"height":12}},{"id":"4f576b08-e680-40b3-aab4-56bb9896e82f","block_type":"box","text":"reports.","page_number":178,"box":{"x":117,"y":351,"width":54,"height":12}},{"id":"245e715f-4a53-448e-83d7-d18cfd352e4e","block_type":"box","text":"9","page_number":178,"box":{"x":173,"y":351,"width":5,"height":6}},{"id":"1aeaee60-05af-4cbf-a4d6-4fbb6f5dac8b","block_type":"box","text":"However, we do not mandate any specific disclosure framework, and note that companies in","page_number":178,"box":{"x":179,"y":351,"width":696,"height":12}},{"id":"b264e7ec-4732-4f67-875d-f6157634d440","block_type":"box","text":"certain jurisdictions are subject to mandatory reporting requirements under standards specified by","page_number":178,"box":{"x":116,"y":366,"width":731,"height":12}},{"id":"7e66d912-efbd-40b8-9017-4c1dc72ae120","block_type":"box","text":"policy makers.","page_number":178,"box":{"x":117,"y":382,"width":105,"height":12}},{"id":"a2b9870f-5a62-4a49-9af0-6e4df939ef99","block_type":"box","text":"10","page_number":178,"box":{"x":224,"y":382,"width":11,"height":6}},{"id":"d78f8da3-6ed9-45e6-bec3-491eec1f1bc1","block_type":"box","text":"Companies should establish robust risk management and internal control processes appropriate to the","page_number":178,"box":{"x":117,"y":413,"width":765,"height":12}},{"id":"edec9431-0d1e-4eef-98e6-e412dc87d40b","block_type":"box","text":"company’s business, risk tolerance, and regulatory environment. A credible whistleblowing system for","page_number":178,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"aba4e23a-1608-4d66-9edb-44ec49d93158","block_type":"box","text":"employees, and potentially other stakeholders, can be a useful mechanism for ensuring that senior","page_number":178,"box":{"x":116,"y":444,"width":738,"height":12}},{"id":"8353bab8-fe75-4a58-92ca-eee1ba72abe5","block_type":"box","text":"management and the board are aware of potential misconduct or breaches in risk management and","page_number":178,"box":{"x":117,"y":459,"width":745,"height":12}},{"id":"44ec9dbc-31f1-4f41-b187-ea7d0d8ebf68","block_type":"box","text":"internal control processes.","page_number":178,"box":{"x":117,"y":475,"width":200,"height":12}},{"id":"70c6d798-d6cd-4a67-aa94-4ba6e51cb172","block_type":"box","text":"A comprehensive audit conducted by an independent audit firm contributes to investor confidence in","page_number":178,"box":{"x":116,"y":506,"width":748,"height":12}},{"id":"a0727ca1-a777-476c-91bf-78d640ed8e29","block_type":"box","text":"the quality of corporate reporting. It is helpful when the audit report gives some insight into the scope","page_number":178,"box":{"x":116,"y":521,"width":752,"height":12}},{"id":"6590f3c8-36c1-41af-b508-8e6d4b107d2d","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":178,"box":{"x":116,"y":537,"width":751,"height":12}},{"id":"b3ecc32d-bc8f-405e-b014-f2cdbd2215a5","block_type":"box","text":"comprehensive and effective audit is time and resource intensive, and the audit fee should be","page_number":178,"box":{"x":116,"y":552,"width":700,"height":12}},{"id":"4ea5389f-4230-4775-b847-27a840a1bfd9","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":178,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"6445318f-1ddc-4be8-9005-f9e4fab41d2c","block_type":"box","text":"degree that may prompt concerns about the independence of the audit. The audit committee should","page_number":178,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"4bb4f01e-ce18-4be7-9016-61d34ddc62ef","block_type":"box","text":"explain its position on auditor tenure and how it confirmed that the auditor remained independent.","page_number":178,"box":{"x":116,"y":599,"width":728,"height":12}},{"id":"e9d51b81-b8eb-4272-9256-88e22c4a03bd","block_type":"box","text":"We may vote against the election of the responsible directors if corporate reporting is insufficient or","page_number":178,"box":{"x":116,"y":630,"width":740,"height":12}},{"id":"0ec8520b-d4b6-469c-b3cc-c8229dc30425","block_type":"box","text":"there are material misstatements in financial reports. In markets where relevant, we may vote against a","page_number":178,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"2f79b815-e78c-40d5-9cb6-3924e2f9b96b","block_type":"box","text":"proposal to approve the financial statements or the discharge of the board when we are concerned","page_number":178,"box":{"x":117,"y":661,"width":731,"height":12}},{"id":"74213272-69d8-4118-b2a8-847e45f76e39","block_type":"box","text":"about the quality of corporate reporting or the audit. We may vote against proposals to appoint the","page_number":178,"box":{"x":116,"y":676,"width":728,"height":12}},{"id":"096c7024-38af-4bb6-9df9-41454e045e02","block_type":"box","text":"auditor, ratify the audit report, or approve the audit fee if we are concerned about the auditor’s","page_number":178,"box":{"x":116,"y":692,"width":697,"height":12}},{"id":"b10c6442-9e6f-4f47-af80-39968d28d378","block_type":"box","text":"independence, the quality of the audit, or there are material misstatements in financial reports and the","page_number":178,"box":{"x":117,"y":707,"width":754,"height":12}},{"id":"75d46d4b-7416-40a6-ae41-f0107226b97f","block_type":"box","text":"board has not established reasonable remediation plans.","page_number":178,"box":{"x":117,"y":723,"width":420,"height":12}},{"id":"e11347c5-03b0-4d46-824a-78ed6dc895b9","block_type":"box","text":"9","page_number":178,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"3f4a3617-ac19-4e1c-8087-b02d50023d58","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":178,"box":{"x":170,"y":815,"width":666,"height":10}},{"id":"85e6d884-bd71-4338-a461-20bf05376eea","block_type":"box","text":"Foundation. Please refer to the IFRS website to learn more about the framework and standards S1 “General","page_number":178,"box":{"x":171,"y":828,"width":641,"height":8}},{"id":"932a8ada-ea18-4ee9-936f-464101401287","block_type":"box","text":"Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related Disclosures.”","page_number":178,"box":{"x":171,"y":841,"width":672,"height":9}},{"id":"5c72c7e9-f901-40b9-b017-6178bfadd0be","block_type":"box","text":"10","page_number":178,"box":{"x":144,"y":854,"width":8,"height":5}},{"id":"afc2f2b0-a222-418f-8b00-d940fa9d044d","block_type":"box","text":"See, for examples, https://www.ifrs.org/news-and-events/news/2025/06/ifrs-foundation-publishes-jurisdictional-profiles","page_number":178,"box":{"x":170,"y":854,"width":705,"height":9}},{"id":"b3c2cf89-2330-4f85-87b7-b26466f3d86d","block_type":"box","text":"issb-standards/ and https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company","page_number":178,"box":{"x":170,"y":867,"width":615,"height":9}},{"id":"15279e82-cf10-4fd5-84e0-493a2c28225e","block_type":"box","text":"reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en","page_number":178,"box":{"x":170,"y":880,"width":468,"height":9}},{"id":"baf3c231-face-426c-a5d5-1962f1ba830a","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":178,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"5b33a04d-eba9-4e8d-bd5f-c0c6d12f4692","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":178,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"b5bb7a42-ae99-4f7b-98d0-e0a2e695c023","block_type":"box","text":"13","page_number":178,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"48d8c8bb-e19b-46da-839f-aac91c14ad65","block_type":"box","text":"NM1026U-6033243-178/221","page_number":178,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"a1e6c0cd-190d-4c03-a163-bcd0618822ca","block_type":"box","text":"Shareholder rights and protections","page_number":179,"box":{"x":360,"y":87,"width":285,"height":12}},{"id":"b0fc5599-d539-4977-a941-7348edc73d3c","block_type":"box","text":"General shareholder meetings","page_number":179,"box":{"x":116,"y":116,"width":247,"height":12}},{"id":"6c4927e4-04cd-4c10-8297-f14e751a2313","block_type":"box","text":"Companies normally have an annual general meeting of shareholders at which routine and non-routine","page_number":179,"box":{"x":117,"y":144,"width":768,"height":13}},{"id":"135c62c9-3b23-4c31-a967-13c4e41b9fa2","block_type":"box","text":"items of business are discussed and voted on by shareholders in attendance or submitting proxy votes.","page_number":179,"box":{"x":117,"y":160,"width":771,"height":12}},{"id":"e0d78685-8807-4cae-888d-1d8cf69dd53a","block_type":"box","text":"Companies should disclose materials relevant to the shareholder meeting sufficiently in advance so","page_number":179,"box":{"x":117,"y":175,"width":742,"height":13}},{"id":"bb37061b-1de2-4c5f-88cc-af8093db05f7","block_type":"box","text":"that shareholders can take them into consideration in their voting decisions. Many companies offer","page_number":179,"box":{"x":116,"y":191,"width":736,"height":12}},{"id":"d9374dbd-42b0-4608-99fb-4abdef0950e0","block_type":"box","text":"shareholders the option of participating in the meeting virtually which, whilst welcome, should not limit","page_number":179,"box":{"x":116,"y":207,"width":758,"height":12}},{"id":"69070b54-5f5a-43a1-aa3f-a74c5fa5ebfc","block_type":"box","text":"the rights of shareholders to participate as they would during an in-person meeting.","page_number":179,"box":{"x":116,"y":222,"width":622,"height":12}},{"id":"c27035a5-1e7a-4c14-b2c8-1d70cc20f224","block_type":"box","text":"We may vote against directors when materials related to the business of the shareholder meeting are","page_number":179,"box":{"x":116,"y":251,"width":757,"height":12}},{"id":"bf197dfc-109f-4567-be82-29c5b70d700c","block_type":"box","text":"not provided in a timely manner or do not provide sufficient information for us to make an informed","page_number":179,"box":{"x":117,"y":266,"width":733,"height":12}},{"id":"8a692b61-29f9-4cc6-942f-ad415d4b33f8","block_type":"box","text":"voting decision. We may vote against directors if the format of the shareholder meeting does not","page_number":179,"box":{"x":116,"y":282,"width":719,"height":12}},{"id":"220db1a2-bd0c-41b7-92a1-68933bb9f4ef","block_type":"box","text":"accommodate reasonable shareholder participation.","page_number":179,"box":{"x":116,"y":297,"width":392,"height":12}},{"id":"4c2e1884-9cae-4c90-a307-ad570b48df75","block_type":"box","text":"Bylaw amendments","page_number":179,"box":{"x":117,"y":326,"width":161,"height":12}},{"id":"7422ffc2-9756-40bc-ac4e-9ada5abcb877","block_type":"box","text":"We review bylaw amendments proposed by management on a case-by-case basis and will generally","page_number":179,"box":{"x":116,"y":355,"width":753,"height":12}},{"id":"1fad3eed-518c-47e0-bbae-6feb446abc0a","block_type":"box","text":"support those that are aligned with the interests of minority shareholders. Any material changes to the","page_number":179,"box":{"x":116,"y":370,"width":761,"height":12}},{"id":"271cdb6f-0943-4448-a764-ab5e51c5d203","block_type":"box","text":"bylaws should be explained in detail and put to a shareholder vote.","page_number":179,"box":{"x":117,"y":386,"width":500,"height":12}},{"id":"e40c26b7-4d76-4a69-859c-c39a47c64274","block_type":"box","text":"We may vote against bylaw amendments that reduce shareholder rights and protections or introduce","page_number":179,"box":{"x":116,"y":415,"width":753,"height":12}},{"id":"2039ebb4-5046-4ff2-83df-cf4ada53899f","block_type":"box","text":"additional burdens. We may vote against directors if material changes are made to the bylaws without","page_number":179,"box":{"x":116,"y":430,"width":760,"height":12}},{"id":"5d3a1bc9-cd4c-47d4-9796-8135faa81ba5","block_type":"box","text":"shareholder approval.","page_number":179,"box":{"x":116,"y":446,"width":167,"height":11}},{"id":"eb31465a-91d0-410b-b9a6-2e62f1a400af","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders,","page_number":179,"box":{"x":117,"y":474,"width":688,"height":12}},{"id":"a9d31561-14d7-4c66-97b8-ccd9d00f7ef7","block_type":"box","text":"individually or as a group, with a meaningful shareholding, the right to call a special meeting of","page_number":179,"box":{"x":117,"y":490,"width":704,"height":12}},{"id":"e4f22167-7ebb-4298-9c3a-3bdbf775a78c","block_type":"box","text":"shareholders. The shareholding required to exercise this right should balance its utility with the cost to","page_number":179,"box":{"x":116,"y":505,"width":761,"height":12}},{"id":"6fc7cc67-8be9-4016-a714-5dcdc005b736","block_type":"box","text":"the company of holding special meetings.","page_number":179,"box":{"x":116,"y":521,"width":307,"height":12}},{"id":"b2f52a57-6d23-43b4-9e4a-faaaf269888e","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders,","page_number":179,"box":{"x":117,"y":550,"width":688,"height":12}},{"id":"f1cd8adc-d0e0-4d4a-af53-8835226d858c","block_type":"box","text":"individually or as a group, with a meaningful shareholding, the right to nominate directors to the","page_number":179,"box":{"x":117,"y":565,"width":710,"height":12}},{"id":"d5cff12d-0b0e-4cc8-990a-4de3ae2c89f4","block_type":"box","text":"company’s board. The threshold for this right should be set so that shareholders can exercise it without","page_number":179,"box":{"x":116,"y":581,"width":770,"height":12}},{"id":"76863e32-42ac-40b3-a7bc-0ab79df9b696","block_type":"box","text":"being unduly disruptive to the board’s own nomination process.","page_number":179,"box":{"x":117,"y":596,"width":473,"height":12}},{"id":"ff1fc3e4-495e-497c-afee-7f247599cc57","block_type":"box","text":"Whilst we would not use either of these rights ourselves, we see them as important accountability","page_number":179,"box":{"x":116,"y":625,"width":728,"height":12}},{"id":"3a660b85-9a10-478e-8f2f-afd799e198e3","block_type":"box","text":"mechanisms. We may vote for a shareholder proposal seeking the addition of either of these","page_number":179,"box":{"x":117,"y":640,"width":691,"height":12}},{"id":"dac82338-9736-429b-a737-04024bb269e9","block_type":"box","text":"provisions to a company’s bylaws.","page_number":179,"box":{"x":117,"y":656,"width":258,"height":12}},{"id":"32437711-cd3e-4715-9c59-d87d3d9f8594","block_type":"box","text":"Change of domicile","page_number":179,"box":{"x":116,"y":685,"width":154,"height":12}},{"id":"b0b529e6-700c-4083-9c3f-a71bba6b4623","block_type":"box","text":"We generally defer to management on proposals to change a company’s domicile as long as the","page_number":179,"box":{"x":116,"y":713,"width":717,"height":12}},{"id":"9b2301ea-9a16-448f-a0ed-821669c52fc0","block_type":"box","text":"rationale for doing so is consistent with the company’s long-term strategy and business model and the","page_number":179,"box":{"x":117,"y":729,"width":756,"height":12}},{"id":"4b06b852-9121-4dcf-a76e-71f39c29dbc6","block_type":"box","text":"related costs are immaterial.","page_number":179,"box":{"x":117,"y":744,"width":209,"height":10}},{"id":"59847e86-5145-46c1-906b-6e03d9de00ad","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":179,"box":{"x":116,"y":773,"width":751,"height":12}},{"id":"1e19db2a-e67a-4911-981c-b9e1351df466","block_type":"box","text":"aligned with our clients’ financial interests.","page_number":179,"box":{"x":116,"y":789,"width":311,"height":12}},{"id":"5990ca47-77a6-472d-bf71-3178c83c22d7","block_type":"box","text":"Changes to a company’s purpose or the nature of its business","page_number":179,"box":{"x":116,"y":817,"width":499,"height":12}},{"id":"78a903fd-82b7-41a9-916a-d0476d8200b4","block_type":"box","text":"Plans to materially change the nature of a company’s business or its purpose should be disclosed and","page_number":179,"box":{"x":117,"y":846,"width":762,"height":12}},{"id":"6d5d45aa-fb81-413f-a052-d113f46cb0cd","block_type":"box","text":"explained in the context of long-term strategy and business dynamics. Such changes may significantly","page_number":179,"box":{"x":116,"y":862,"width":764,"height":12}},{"id":"06ae1000-adfd-468e-8c9d-ac3f7ca75096","block_type":"box","text":"alter an investor’s views on the suitability of a company for their investment strategy or portfolio.","page_number":179,"box":{"x":116,"y":877,"width":716,"height":12}},{"id":"159217b5-f2bb-4008-bab8-06fe5a66bd21","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":179,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"15f5727c-e04a-41d4-be59-2e89c8554800","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":179,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"05089b3b-277c-4d03-ae4b-289a2ad06dd0","block_type":"box","text":"14","page_number":179,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"573e19c1-18dd-4351-8ca4-155bb42a976b","block_type":"box","text":"NM1026U-6033243-179/221","page_number":179,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"322e6f30-aa68-4871-bf48-9faa9c4b8673","block_type":"box","text":"Where relevant, we may vote against proposals to change a company’s purpose or the nature of its","page_number":180,"box":{"x":116,"y":87,"width":743,"height":12}},{"id":"815369ef-c5d5-46e5-97bd-14a9cc96d859","block_type":"box","text":"business if the board has not provided a credible argument for change.","page_number":180,"box":{"x":117,"y":102,"width":530,"height":13}},{"id":"30e02dd2-ead8-4722-9975-f7da2a87e64c","block_type":"box","text":"Shareholder proposals","page_number":180,"box":{"x":409,"y":141,"width":187,"height":12}},{"id":"9bfd6a89-070f-40ec-8e2e-cb3cbd209551","block_type":"box","text":"Shareholders in many markets, who meet certain eligibility criteria, have the right to submit proposals","page_number":180,"box":{"x":116,"y":172,"width":756,"height":12}},{"id":"b3c31e36-f42e-49d5-8408-cbc153145e2f","block_type":"box","text":"to the general shareholder meeting asking a company to take a particular course of action subject to","page_number":180,"box":{"x":116,"y":188,"width":749,"height":12}},{"id":"e4c67517-adc6-4593-a389-1607c21181c1","block_type":"box","text":"the proposal being supported by a majority of votes cast at the meeting. The topics raised can address","page_number":180,"box":{"x":116,"y":203,"width":767,"height":12}},{"id":"64668738-46c4-4018-a9b9-7778e40c331e","block_type":"box","text":"a range of matters that may be relevant to a company’s business.","page_number":180,"box":{"x":116,"y":219,"width":492,"height":12}},{"id":"77eccd86-4ec6-4b6c-9cab-6f9cf6f49b80","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":180,"box":{"x":116,"y":250,"width":767,"height":12}},{"id":"fa516f48-aa50-493f-8f7f-622ae7a78c3f","block_type":"box","text":"company’s business and its current approach, whether the actions sought are consistent with","page_number":180,"box":{"x":116,"y":265,"width":697,"height":12}},{"id":"9f1092f1-e674-48d0-a1fa-4730f66e198c","block_type":"box","text":"shareholders’ interests, and what impact the proposal being acted upon might have on financial","page_number":180,"box":{"x":116,"y":281,"width":714,"height":12}},{"id":"f13f0d01-8da0-4a7e-9f29-7d43a9cc59fb","block_type":"box","text":"performance.","page_number":180,"box":{"x":117,"y":296,"width":103,"height":12}},{"id":"f76d979f-1799-4051-8d73-9e12553471a4","block_type":"box","text":"Our general approach where we have concerns about","page_number":180,"box":{"x":116,"y":327,"width":393,"height":12}},{"id":"5f8fe7fa-31f6-4b50-a379-4cdbaf322aec","block_type":"box","text":"t a company’s governance, disclosures or","page_number":180,"box":{"x":509,"y":327,"width":303,"height":12}},{"id":"be19f3ed-f28e-4a49-a167-7845a26f053a","block_type":"box","text":"performance is to engage to understand the apparent diffe","page_number":180,"box":{"x":117,"y":343,"width":423,"height":12}},{"id":"7ff0626c-a23f-47bb-8da3-9c3937573e0c","block_type":"box","text":"rence in perspective. If we are concerned a","page_number":180,"box":{"x":541,"y":343,"width":319,"height":12}},{"id":"50c33948-cacc-49b4-871d-1b7b0b36ba01","block_type":"box","text":"company is not acting in shareholders’ financial interest","page_number":180,"box":{"x":116,"y":358,"width":403,"height":12}},{"id":"87bbd5f7-8a54-402f-a729-2090a78e55e3","block_type":"box","text":"s, we may vote against the election of directors.","page_number":180,"box":{"x":519,"y":358,"width":351,"height":12}},{"id":"203c62c3-a065-4d38-9b0d-a0e322cf40de","block_type":"box","text":"We may support a relevant shareholder proposal if doing","page_number":180,"box":{"x":116,"y":374,"width":418,"height":12}},{"id":"3e038d37-06be-4b99-ba32-9e044970baf5","block_type":"box","text":"so is aligned with our clients’ financial interests.","page_number":180,"box":{"x":534,"y":374,"width":348,"height":12}},{"id":"101bed16-6759-488b-93c1-0f1e1efde38d","block_type":"box","text":"We generally do not support shareholder proposals that","page_number":180,"box":{"x":116,"y":389,"width":410,"height":12}},{"id":"1bc95afa-94c2-433b-acd8-1353ea2bf92c","block_type":"box","text":"are legally binding on the company, seek to alter","page_number":180,"box":{"x":526,"y":389,"width":357,"height":12}},{"id":"3097aae1-ec39-495b-8fe9-bd3b4bcfc94e","block_type":"box","text":"a company’s strategy or direct its operations,","page_number":180,"box":{"x":116,"y":405,"width":331,"height":12}},{"id":"b4b9978c-f8f9-43b1-a76e-7a1093c50b96","block_type":"box","text":"or are unrelated to how a company manages risk or","page_number":180,"box":{"x":447,"y":405,"width":381,"height":12}},{"id":"7129e5f8-6095-4f34-b267-9f2b9c6a82e9","block_type":"box","text":"generates financial returns.","page_number":180,"box":{"x":116,"y":420,"width":203,"height":12}},{"id":"549938c1-aa40-4b61-ac6e-c929c36090f2","block_type":"box","text":"BlackRock is subject to rules, regulations, agency guidance and contractual agreements that place","page_number":180,"box":{"x":117,"y":451,"width":737,"height":12}},{"id":"f97677f6-9b45-465d-a547-134166f05374","block_type":"box","text":"restrictions and limitations on how we can interact with the companies in which we invest on behalf of","page_number":180,"box":{"x":117,"y":467,"width":755,"height":12}},{"id":"a3470267-5705-4946-abdb-bcdcc8ce77b5","block_type":"box","text":"our clients, including our ability to submit shareholder proposals. We do not submit shareholder","page_number":180,"box":{"x":116,"y":482,"width":712,"height":12}},{"id":"42dc65e7-dccb-4fb6-b572-dcabac625b3e","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":180,"box":{"x":117,"y":498,"width":770,"height":12}},{"id":"63d2e771-df58-47bb-9b7d-56ef855969c4","block_type":"box","text":"Corporate political activities","page_number":180,"box":{"x":387,"y":537,"width":230,"height":12}},{"id":"59100f70-0392-4a5e-b6df-e0a35faa1318","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":180,"box":{"x":116,"y":568,"width":733,"height":12}},{"id":"860cab03-19b9-441a-b944-218f93f5905b","block_type":"box","text":"jurisdictions in which they engage. When a corporation reports material financial risk related to policy","page_number":180,"box":{"x":115,"y":583,"width":754,"height":12}},{"id":"3c13b5bb-dca6-4895-926a-6a1d53ad939e","block_type":"box","text":"and or regulatory changes, BAIS may seek to understand how it is addressing the material risk","page_number":180,"box":{"x":116,"y":599,"width":708,"height":12}},{"id":"4d3ea73e-8cb0-41c6-991a-d258f5b635c6","block_type":"box","text":"identified. We seek to understand how companies engage in corporate political activities and ensure","page_number":180,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"c26683c0-6000-4569-82f8-7ff6750386f1","block_type":"box","text":"that their participation is consistent with their public statements on policy matters material to the","page_number":180,"box":{"x":116,"y":630,"width":714,"height":12}},{"id":"7aa728e0-697a-4032-95c9-1bf1002a04e4","block_type":"box","text":"company’s long-term strategy. The board should be aware of the approach taken by management on","page_number":180,"box":{"x":116,"y":645,"width":756,"height":12}},{"id":"3d9c76e7-0031-4864-a9e2-d43cb366113e","block_type":"box","text":"corporate political activities as there can be reputational risks arising from inconsistencies between a","page_number":180,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"ee8bd33a-1813-4b9d-8e2c-59cd1c90eb8b","block_type":"box","text":"company’s policy engagement and stated policy positions. Companies should, as a minimum, meet all","page_number":180,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"eef8c3a3-3411-4aab-bbd3-5fc3c9acb97b","block_type":"box","text":"regulatory disclosure requirements on political activities. We may engage a company where we would","page_number":180,"box":{"x":117,"y":692,"width":753,"height":12}},{"id":"3684b16f-2f14-4afd-aa98-9dc8b489d598","block_type":"box","text":"like to better understand its approach to policy engagement, where relevant.","page_number":180,"box":{"x":117,"y":707,"width":563,"height":12}},{"id":"92e9c1a2-c5bd-4d40-a924-b0846ac0dc58","block_type":"box","text":"To mitigate the risk of inconsistencies, companies may wish to assess the alignment between their","page_number":180,"box":{"x":116,"y":738,"width":732,"height":12}},{"id":"8a49d553-1195-4d7b-b93c-af6563686e2c","block_type":"box","text":"policy priorities and the policy positions of the trade associations of which they are active members and","page_number":180,"box":{"x":117,"y":754,"width":764,"height":12}},{"id":"705aeb3b-bd46-4639-8963-f8343552ee18","block_type":"box","text":"any engagements undertaken by trade associations on behalf of members.","page_number":180,"box":{"x":116,"y":769,"width":556,"height":12}},{"id":"f97c828b-06ad-4fe4-99a8-5adc88ee0e6b","block_type":"box","text":"We may support a relevant shareholder proposal, or vote against directors, where a company’s","page_number":180,"box":{"x":116,"y":800,"width":707,"height":12}},{"id":"5f752c52-a24d-4293-8867-d1814253d08e","block_type":"box","text":"disclosures are insufficient to address the material risk it has identified.","page_number":180,"box":{"x":116,"y":816,"width":524,"height":9}},{"id":"7fa2225a-657f-47ff-b27e-6f64803895f8","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":180,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"b16f0ecb-8ef8-43fc-9fb6-944647fa60d9","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":180,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"67d6b027-6594-4b34-9eb3-fe100ac1bb36","block_type":"box","text":"15","page_number":180,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"47ee3693-6c56-40da-9da2-43cc5644382a","block_type":"box","text":"NM1026U-6033243-180/221","page_number":180,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"92c391cc-7011-4e24-980b-3ac073b4ac33","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":181,"box":{"x":287,"y":87,"width":431,"height":12}},{"id":"d5fe25fa-48cb-474e-a290-f3d5cb5e68c0","block_type":"box","text":"We seek to understand how companies manage the material risks and opportunities inherent in their","page_number":181,"box":{"x":116,"y":118,"width":751,"height":12}},{"id":"f4b3a538-9467-401a-9be4-3d02d5455d3c","block_type":"box","text":"business operations. In our experience, sustainability-related factors","page_number":181,"box":{"x":117,"y":133,"width":505,"height":12}},{"id":"49a5c68b-1179-4fc1-b4fc-b8d37eb51fdb","block_type":"box","text":"11","page_number":181,"box":{"x":624,"y":133,"width":9,"height":6}},{"id":"c81b25e4-2951-43c1-83cd-c399e3616ed2","block_type":"box","text":"that are relevant to a company’s","page_number":181,"box":{"x":635,"y":133,"width":249,"height":12}},{"id":"617be7c9-eaed-4bc1-bb37-9ab1edd92c7a","block_type":"box","text":"business or material to its financial performance, are generally operational considerations embedded","page_number":181,"box":{"x":117,"y":149,"width":752,"height":12}},{"id":"65b46ceb-180e-484a-8ed1-592201d9ebed","block_type":"box","text":"into day-to-day management systems. Certain sustainability issues may also inform long-term strategic","page_number":181,"box":{"x":117,"y":164,"width":769,"height":12}},{"id":"2150fbab-cfc6-4701-a631-d6425cf97e28","block_type":"box","text":"planning, for example, investing in product innovation in anticipation of changing consumer demand or","page_number":181,"box":{"x":117,"y":180,"width":763,"height":12}},{"id":"cf37df69-a61a-44df-b354-633d7a8a5136","block_type":"box","text":"adapting supply chains in response to changing regulatory requirements.","page_number":181,"box":{"x":116,"y":195,"width":546,"height":12}},{"id":"bbdc8b2e-d2eb-41aa-aa3f-2c62044de069","block_type":"box","text":"We recognize that the specific sustainability-related factors that may be financially material or business","page_number":181,"box":{"x":116,"y":226,"width":769,"height":12}},{"id":"4582fda0-2f05-4884-88df-6ebf66908e6a","block_type":"box","text":"relevant will vary by company business model, sector, key markets, and time horizon, amongst other","page_number":181,"box":{"x":117,"y":241,"width":751,"height":12}},{"id":"ff7e9d41-2f25-49b3-9eb4-66faf92449cf","block_type":"box","text":"considerations. From company disclosures and our engagement, we aim to understand how","page_number":181,"box":{"x":116,"y":257,"width":689,"height":12}},{"id":"92f45436-721d-4535-afe4-08d73577e582","block_type":"box","text":"management is identifying, assessing and integrating material sustainability-related risks and","page_number":181,"box":{"x":117,"y":272,"width":694,"height":12}},{"id":"b1d40565-0884-4937-8e35-6dd6bedc0f33","block_type":"box","text":"opportunities into their business decision-making and practices. Doing so helps us undertake a more","page_number":181,"box":{"x":116,"y":288,"width":752,"height":12}},{"id":"d1bc5598-5cb8-405a-bfa6-5e7faf50bd8e","block_type":"box","text":"holistic assessment of a company’s potential financial performance and the likely risk-adjusted returns","page_number":181,"box":{"x":117,"y":303,"width":761,"height":12}},{"id":"0c1fd69b-517d-48ca-9150-d8e868a1b7e8","block_type":"box","text":"of an investment.","page_number":181,"box":{"x":116,"y":319,"width":133,"height":9}},{"id":"35a25090-d6f0-4f41-b8a6-9aafa1db4559","block_type":"box","text":"We may vote against directors or support a relevant shareholder proposal if we have concerns about","page_number":181,"box":{"x":116,"y":349,"width":753,"height":13}},{"id":"6fa9ed14-3946-4b30-96b5-b2e35ae2ef94","block_type":"box","text":"how a company is managing or disclosing its approach to material sustainability-related risks that may","page_number":181,"box":{"x":117,"y":365,"width":761,"height":12}},{"id":"10d0df3f-ade8-4480-9748-286f95ab4105","block_type":"box","text":"impact financial returns.","page_number":181,"box":{"x":117,"y":380,"width":181,"height":12}},{"id":"3db2005f-16d8-4d83-a72b-ecc061d83277","block_type":"box","text":"Key stakeholders","page_number":181,"box":{"x":431,"y":419,"width":143,"height":12}},{"id":"78c17208-47b3-4747-a09f-617b14804369","block_type":"box","text":"In our view, companies should understand and take into consideration the interests of the various","page_number":181,"box":{"x":117,"y":449,"width":727,"height":12}},{"id":"230e951c-7a94-450b-b14a-179917152d75","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":181,"box":{"x":117,"y":465,"width":766,"height":12}},{"id":"dac568ae-639e-49c4-8095-2406ed391534","block_type":"box","text":"stakeholders based on what is material to their business and long-term financial performance. For","page_number":181,"box":{"x":116,"y":480,"width":731,"height":12}},{"id":"8d59559d-ccc0-4d90-a816-a501a00ee811","block_type":"box","text":"many companies, key stakeholders include employees, business partners (such as suppliers and","page_number":181,"box":{"x":117,"y":496,"width":726,"height":12}},{"id":"d5cab865-b907-47c9-8544-e9a82c2ccefd","block_type":"box","text":"distributors), clients and consumers, regulators, and the communities in which they operate.","page_number":181,"box":{"x":116,"y":511,"width":687,"height":12}},{"id":"39f1c276-92c8-4d9e-8a61-6558868b77a2","block_type":"box","text":"Companies that appropriately balance the interests of investors and other stakeholders are, in our","page_number":181,"box":{"x":117,"y":527,"width":730,"height":12}},{"id":"4dedfac7-5c52-47ad-83a8-9ffe4af285be","block_type":"box","text":"experience, more likely to be financially resilient over time.","page_number":181,"box":{"x":116,"y":542,"width":438,"height":12}},{"id":"1306449c-2926-43d2-92a1-bf56a97b3709","block_type":"box","text":"Climate and decarbonization investment objectives","page_number":181,"box":{"x":295,"y":581,"width":414,"height":12}},{"id":"9bfe6e71-0dba-4fc0-b35f-39424b432f38","block_type":"box","text":"Certain active BlackRock funds have climate and decarbonization objectives in addition to financial","page_number":181,"box":{"x":117,"y":611,"width":737,"height":12}},{"id":"d4c59bb1-5ab6-4bef-8164-0e8d530a4b0f","block_type":"box","text":"objectives. Consistent with the objectives of those investment strategies, our stewardship activity in","page_number":181,"box":{"x":116,"y":627,"width":741,"height":12}},{"id":"7920788d-17a1-45c9-9d00-54f91387d750","block_type":"box","text":"relation to the holdings in those funds differs in some respects from BAIS’ benchmark guidelines, which","page_number":181,"box":{"x":117,"y":642,"width":771,"height":12}},{"id":"6f4fc58e-d01a-4c7d-a1f5-c0ec44752bbd","block_type":"box","text":"are described above. Specifically, for those funds’ holdings, we look to investee companies to","page_number":181,"box":{"x":116,"y":658,"width":699,"height":12}},{"id":"017013f7-3b09-4b7b-a96b-39d651e27677","block_type":"box","text":"demonstrate that they are aligned with a decarbonization pathway that means their business model","page_number":181,"box":{"x":116,"y":673,"width":736,"height":12}},{"id":"47ec53cd-0c98-407e-bec7-5c48c0362cd4","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":181,"box":{"x":116,"y":689,"width":754,"height":12}},{"id":"f8f3544b-5938-43b1-9d07-ba7f58df2832","block_type":"box","text":"above pre-industrial levels. In addition, clients in separately managed accounts may instruct BlackRock","page_number":181,"box":{"x":116,"y":704,"width":766,"height":12}},{"id":"94c3f474-9680-4b0d-b219-a75ccf016d14","block_type":"box","text":"to apply these guidelines to their holdings. Both in the case of funds and separately managed","page_number":181,"box":{"x":116,"y":720,"width":692,"height":12}},{"id":"a7b2f3ac-38be-46aa-8df3-0a7a0a4dee44","block_type":"box","text":"accounts, these guidelines are only implemented upon explicit selection and approval by the applicable","page_number":181,"box":{"x":116,"y":735,"width":765,"height":12}},{"id":"5ee80bbe-524c-4943-8998-ceea32fea2f9","block_type":"box","text":"fund board or client.","page_number":181,"box":{"x":116,"y":751,"width":147,"height":9}},{"id":"948039eb-1f63-43d8-bf69-0206781a815e","block_type":"box","text":"11","page_number":181,"box":{"x":144,"y":776,"width":7,"height":5}},{"id":"28d105bb-16d5-473e-924d-47db30e75776","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":181,"box":{"x":171,"y":776,"width":691,"height":10}},{"id":"e07cb887-ff08-4d32-8f4a-0953d49dbca0","block_type":"box","text":"company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":181,"box":{"x":170,"y":789,"width":686,"height":9}},{"id":"0349f9fc-0c5a-4847-9435-dba4bfd74750","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":181,"box":{"x":170,"y":802,"width":682,"height":9}},{"id":"bd5f782a-e27c-4b92-b461-b50133b55a77","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":181,"box":{"x":170,"y":815,"width":683,"height":9}},{"id":"16044b29-1f7c-4885-bfbf-2869ee1fe170","block_type":"box","text":"operates, customer loyalty, and relationships with regulators. It is our view that well-managed companies will effectively","page_number":181,"box":{"x":170,"y":828,"width":708,"height":9}},{"id":"244a992a-c233-4641-b5d6-9724e0dd7da1","block_type":"box","text":"evaluate and manage material sustainability-related risks and opportunities relevant to their businesses. Governance is","page_number":181,"box":{"x":170,"y":840,"width":707,"height":10}},{"id":"43a4b994-5a4c-45ba-8b19-ab7d4e81c9d3","block_type":"box","text":"the core means by which boards can oversee the creation of durable financial value over time. Appropriate risk","page_number":181,"box":{"x":170,"y":853,"width":658,"height":10}},{"id":"fea89a99-1b64-4215-8f23-6aca687d8d75","block_type":"box","text":"oversight of business-relevant and material sustainability-related considerations is a component of a sound governance","page_number":181,"box":{"x":170,"y":866,"width":708,"height":10}},{"id":"95fd4a6e-d114-4bea-ab3d-d94d3ebc8899","block_type":"box","text":"framework.","page_number":181,"box":{"x":170,"y":879,"width":65,"height":8}},{"id":"77dd9f58-9429-44f6-a421-3c516a4e2bd8","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":181,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"3b43e24f-716f-4538-a660-14eb3478b2ee","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":181,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"cb7f6cc2-a042-4430-b28a-c2c981709746","block_type":"box","text":"16","page_number":181,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"29208e0d-4bbc-4e77-98c4-db3e602fbe32","block_type":"box","text":"NM1026U-6033243-181/221","page_number":181,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"9e56599c-bf05-4502-8462-8c3107d5860b","block_type":"box","text":"These decarbonization stewardship guidelines focus on companies which produce goods and services","page_number":182,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"c3b1e025-367f-4342-99a9-2a78ebdc217f","block_type":"box","text":"that contribute to real world decarbonization or have a carbon intensive business model and face","page_number":182,"box":{"x":116,"y":102,"width":724,"height":10}},{"id":"e513a53c-01de-42f2-b3de-144ed8f9f85e","block_type":"box","text":"outsized impacts from the low carbon transition, based on reported and estimated scopes 1, 2, and 3","page_number":182,"box":{"x":116,"y":118,"width":754,"height":12}},{"id":"f8c25da6-20c6-43a8-bd74-7d697c9aab51","block_type":"box","text":"greenhouse gas emissions. These companies should provide disclosures that set out their","page_number":182,"box":{"x":116,"y":134,"width":675,"height":12}},{"id":"7342d791-849c-4ee9-b78c-38def915cd83","block_type":"box","text":"governance, strategy, risk management processes and metrics and targets relevant to","page_number":182,"box":{"x":116,"y":149,"width":646,"height":12}},{"id":"d8b6512c-2852-47aa-85c3-904327e8b54b","block_type":"box","text":"decarbonization. It is helpful to investors’ understanding when these disclosures include an explanation","page_number":182,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"1d3f6c84-79cf-44fb-b2ee-603363d685e8","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":182,"box":{"x":116,"y":180,"width":760,"height":12}},{"id":"4f00050d-2566-49dd-9164-f9dc568ad5c0","block_type":"box","text":"scope 1, scope 2 and material scope 3 greenhouse gas (GHG) emissions and reduction targets for","page_number":182,"box":{"x":116,"y":196,"width":739,"height":12}},{"id":"179edd30-bc10-492a-82e2-24e3088fbf3e","block_type":"box","text":"scope 1 and 2 emissions.","page_number":182,"box":{"x":116,"y":211,"width":194,"height":12}},{"id":"058d31a4-b8b0-44d0-8c2c-29afe83fce1b","block_type":"box","text":"Under these climate- and decarbonization-specific guidelines, BAIS may recommend a vote against","page_number":182,"box":{"x":117,"y":242,"width":744,"height":12}},{"id":"25ea71ad-dfa2-4f0e-b1c7-a9e5b7c83643","block_type":"box","text":"directors or support for a relevant shareholder proposal if a company does not appear to be adequately","page_number":182,"box":{"x":116,"y":258,"width":771,"height":12}},{"id":"22457bef-7658-452f-88d4-e0ca39e99190","block_type":"box","text":"acting to address or disclosing material climate-related risks, consistent with the parameters set out in","page_number":182,"box":{"x":116,"y":273,"width":761,"height":12}},{"id":"7b746367-a396-48e1-987f-be621277302b","block_type":"box","text":"these climate- and decarbonization-specific guidelines. We may recommend supporting shareholder","page_number":182,"box":{"x":116,"y":289,"width":749,"height":12}},{"id":"a9e5d198-8cb6-428b-aa34-2c398524124a","block_type":"box","text":"proposals seeking information relevant to a company’s stated low-carbon transition strategy or targets","page_number":182,"box":{"x":117,"y":304,"width":760,"height":12}},{"id":"8aa3e906-f35d-4c64-82c2-9c457fa7fd75","block_type":"box","text":"that the company does not currently provide and that would be helpful to investment decision-making.","page_number":182,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"b1bca5f1-57d8-4044-902f-9f67fcddddbc","block_type":"box","text":"We would not recommend support for shareholder proposals that seek to constrain board or","page_number":182,"box":{"x":116,"y":335,"width":689,"height":12}},{"id":"4f4a411a-828c-4571-8257-644330520ea8","block_type":"box","text":"management decision-making or direct specific business or strategic decisions. As under the BAIS","page_number":182,"box":{"x":117,"y":351,"width":736,"height":12}},{"id":"368e3d75-86d1-452e-a02c-ebe1c511a9f8","block_type":"box","text":"benchmark approach, the active portfolio managers are ultimately responsible for voting consistent","page_number":182,"box":{"x":117,"y":366,"width":737,"height":12}},{"id":"6e14a81b-fe9c-4ff8-b12d-75e2a5777bfd","block_type":"box","text":"with their investment mandate and fund objectives. For the funds and accounts in scope, voting on","page_number":182,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"7bf179e9-18a6-43fe-a47a-22d88a9e0079","block_type":"box","text":"matters not related to climate risk and the energy transition is undertaken in line with BAIS’ benchmark","page_number":182,"box":{"x":117,"y":397,"width":765,"height":12}},{"id":"84e5ee1f-5d96-474c-9af0-81e2154deae7","block_type":"box","text":"guidelines.","page_number":182,"box":{"x":116,"y":413,"width":85,"height":12}},{"id":"5e31dac1-a747-439a-b938-1dea787c3e80","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":182,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"de09c514-4d08-485a-8ca8-c542fdce30a8","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":182,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"3ca98850-c876-43dc-8662-0386dd6ae7f3","block_type":"box","text":"17","page_number":182,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"dd178971-d125-44e9-b23f-da11a47abee1","block_type":"box","text":"NM1026U-6033243-182/221","page_number":182,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"015c565e-863f-494f-86de-b09c18b95be1","block_type":"box","text":"Appendix 1: How we fulfil and oversee our investment stewardship responsibilities","page_number":183,"box":{"x":168,"y":87,"width":668,"height":12}},{"id":"211181e9-42bb-4335-b88f-e8ba0741c1c0","block_type":"box","text":"Oversight","page_number":183,"box":{"x":116,"y":118,"width":83,"height":12}},{"id":"2237914f-7ae7-4171-95ba-e05f9e442a66","block_type":"box","text":"The Global Head of BAIS has primary oversight of and responsibility for the team’s activities, including","page_number":183,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"e6a37097-7ad1-435f-bf71-4b4e4b9c6a09","block_type":"box","text":"voting in accordance with the BlackRock Active Investment Stewardship Global Engagement and","page_number":183,"box":{"x":116,"y":165,"width":726,"height":12}},{"id":"2676df71-cb86-4a03-9bf6-8ca4ab39fb67","block_type":"box","text":"Voting Guidelines (the “Guidelines”), which require the application of professional judgment and","page_number":183,"box":{"x":116,"y":180,"width":714,"height":12}},{"id":"14f86c75-46d8-4433-93a3-8e9b19154baa","block_type":"box","text":"consideration of each company’s unique circumstances, as well as input from active investors. BAIS is","page_number":183,"box":{"x":116,"y":196,"width":765,"height":12}},{"id":"ce41b345-eb6b-4451-a99c-a013f1733c4c","block_type":"box","text":"independent from BlackRock Investment Stewardship in our engagement and voting activities,","page_number":183,"box":{"x":117,"y":211,"width":704,"height":12}},{"id":"dd1f6927-99bb-47df-8719-bb8f303921d2","block_type":"box","text":"reporting lines, and oversight.","page_number":183,"box":{"x":117,"y":227,"width":224,"height":12}},{"id":"7a765c8b-c6fa-4f0d-ae78-e02d1239cdb8","block_type":"box","text":"The Stewardship Leaders Group, comprised of senior active investors and other relevant stakeholders","page_number":183,"box":{"x":116,"y":258,"width":765,"height":11}},{"id":"754a4641-8c7d-4908-9907-6b80e8b231c7","block_type":"box","text":"in BlackRock’s legal, public policy, sustainability and communications teams, helps shape the firm’s","page_number":183,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"22732c0d-32f0-48c9-9f96-cc831442a669","block_type":"box","text":"approach to investment stewardship on non-index equity investment strategies. The Group may advise","page_number":183,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"6507b123-2759-4ec8-8afb-16072bc167a7","block_type":"box","text":"on and review amendments to BAIS’ policies and practices. It does not determine voting decisions,","page_number":183,"box":{"x":116,"y":304,"width":739,"height":12}},{"id":"db7198a2-b303-4f18-b859-e7cc9858e9dd","block_type":"box","text":"which are the responsibility of BAIS and the relevant active equity investors.","page_number":183,"box":{"x":116,"y":320,"width":568,"height":12}},{"id":"fd8aa48b-6ac0-4e1a-8390-ae3c93db72a2","block_type":"box","text":"BAIS carries out engagement with companies in collaboration with active investment colleagues,","page_number":183,"box":{"x":117,"y":351,"width":721,"height":12}},{"id":"0388bcae-7658-4fe4-892e-261dd6a6cfe2","block_type":"box","text":"executes proxy votes, and conducts vote operations (including maintaining records of votes cast) in a","page_number":183,"box":{"x":116,"y":366,"width":757,"height":12}},{"id":"d3e6f31e-1623-474c-99ed-95e5d540308c","block_type":"box","text":"manner consistent with the Guidelines. BAIS also conducts research on corporate governance issues","page_number":183,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"5f8689c3-2387-4ae4-bf4b-4fa2cf508a0e","block_type":"box","text":"and participates in industry discussions to contribute to and keep abreast of important developments in","page_number":183,"box":{"x":116,"y":397,"width":768,"height":12}},{"id":"1abd7f3a-7d48-43e4-a099-b817ee74d218","block_type":"box","text":"the corporate governance field. BAIS may use third parties for certain of the foregoing activities and","page_number":183,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"6bb240f1-e630-46d9-986a-41b90cdfd8a8","block_type":"box","text":"performs oversight of those third parties (see “Use and oversight of third-party vote services providers”","page_number":183,"box":{"x":117,"y":428,"width":765,"height":12}},{"id":"ce3e51aa-5f24-4283-ae8b-b4bbc102bdb8","block_type":"box","text":"below).","page_number":183,"box":{"x":117,"y":444,"width":58,"height":12}},{"id":"3fd24f5c-1f9e-45e3-9c11-765567ef329d","block_type":"box","text":"Voting guidelines and vote execution","page_number":183,"box":{"x":116,"y":475,"width":302,"height":12}},{"id":"9b16f362-e384-43ef-9a7f-47bb8096ff60","block_type":"box","text":"BlackRock votes on proxy issues when our clients authorize us to do so. We carefully consider the","page_number":183,"box":{"x":117,"y":506,"width":735,"height":12}},{"id":"8ac50453-03ad-4427-8525-1e1175642419","block_type":"box","text":"voting items submitted to funds and other fiduciary account(s) (Fund or Funds) for which we have","page_number":183,"box":{"x":116,"y":521,"width":728,"height":12}},{"id":"dd795612-15ea-456d-b905-2523039fc744","block_type":"box","text":"voting authority. BlackRock votes (or refrains from voting) for each Fund for which we have voting","page_number":183,"box":{"x":116,"y":537,"width":730,"height":12}},{"id":"cc5c3d8e-bc8b-48d6-a5e3-9d9d73eb2a5d","block_type":"box","text":"authority based on our evaluation of the alignment of the voting items with the long-term economic","page_number":183,"box":{"x":116,"y":552,"width":734,"height":12}},{"id":"381fb638-973a-4250-af55-ccebfdef10c8","block_type":"box","text":"interests of our clients, in the exercise of our independent business judgment, and without regard to the","page_number":183,"box":{"x":117,"y":568,"width":771,"height":12}},{"id":"de32a053-58a9-4f81-bc1a-ac1dd4c48e43","block_type":"box","text":"relationship of the issuer (or any shareholder proponent or dissident shareholder) to the Fund, the","page_number":183,"box":{"x":117,"y":583,"width":730,"height":12}},{"id":"dda18c60-5986-4a4a-8b5f-8450eb9712a7","block_type":"box","text":"Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts","page_number":183,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"7de234b3-520f-4ac9-9122-fa409c224d12","block_type":"box","text":"management policies and procedures,” below).","page_number":183,"box":{"x":117,"y":614,"width":353,"height":12}},{"id":"2a3c656d-f363-48ae-9d56-4794ad6932ac","block_type":"box","text":"When exercising voting rights, BAIS will normally vote on specific proxy issues in accordance with the","page_number":183,"box":{"x":116,"y":645,"width":759,"height":12}},{"id":"04558e9b-a65d-476d-a416-bd1b5ba41181","block_type":"box","text":"Guidelines, although portfolio managers have the right to vote differently on their holdings if they","page_number":183,"box":{"x":117,"y":661,"width":713,"height":12}},{"id":"6975b303-9749-4e9b-bc55-dc41c8d2a806","block_type":"box","text":"determine doing so is more aligned with the investment objective and financial interests of clients","page_number":183,"box":{"x":116,"y":676,"width":719,"height":12}},{"id":"4732d785-5c4d-4f6a-a651-952685ecf42d","block_type":"box","text":"invested in the funds they manage.","page_number":183,"box":{"x":117,"y":692,"width":258,"height":12}},{"id":"5c50af08-3b6f-43db-b3c7-e14fd52d5895","block_type":"box","text":"The Guidelines are not intended to be exhaustive. BAIS applies the Guidelines on a case-by-case","page_number":183,"box":{"x":116,"y":723,"width":726,"height":12}},{"id":"4d256220-248c-4e58-adc9-233c4a8a332a","block_type":"box","text":"basis, in the context of the individual circumstances of each company and the specific issue under","page_number":183,"box":{"x":117,"y":738,"width":728,"height":12}},{"id":"88e0b424-d015-49cf-be5d-999d136b3f47","block_type":"box","text":"review. As such, the Guidelines do not indicate how BAIS will vote in every instance. Rather, they","page_number":183,"box":{"x":117,"y":754,"width":723,"height":12}},{"id":"f484e7a4-fbce-4fcf-8259-5332b50a98d1","block_type":"box","text":"reflect our view about corporate governance issues generally, and provide insight into how we typically","page_number":183,"box":{"x":117,"y":769,"width":761,"height":12}},{"id":"03f1b1f7-d7bc-4325-b4fe-34666565e2ff","block_type":"box","text":"approach issues that are commonly put to a shareholder vote. The Guidelines are reviewed annually","page_number":183,"box":{"x":116,"y":785,"width":747,"height":12}},{"id":"fd6c77bd-00fd-4df9-9b8c-6e7b99cdfe4c","block_type":"box","text":"and updated as necessary to reflect changes in market practices, developments in corporate","page_number":183,"box":{"x":116,"y":800,"width":688,"height":12}},{"id":"5a1066d4-c86b-47a7-9251-e3fac75c1c70","block_type":"box","text":"governance and feedback from companies and clients. In this way, BAIS aims to maintain policies that","page_number":183,"box":{"x":116,"y":816,"width":760,"height":12}},{"id":"52a572bb-080d-407e-97dd-99330be4f90f","block_type":"box","text":"explain our approach to governance practices most aligned with clients’ long-term financial interests.","page_number":183,"box":{"x":116,"y":831,"width":751,"height":12}},{"id":"7fd8f7d6-c136-428c-8872-0b6f812f3830","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BAIS’ ability to vote such","page_number":183,"box":{"x":117,"y":862,"width":740,"height":12}},{"id":"fc041361-08be-441b-8c5a-157f842e1685","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":183,"box":{"x":117,"y":878,"width":768,"height":12}},{"id":"e6dcf4cc-8fab-4b46-99ee-e4072e6d0035","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":183,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"4ea04930-d272-437b-a5ae-c8a9c8b29d71","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":183,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"4d3a0542-140f-4c44-9db1-32324601a4a2","block_type":"box","text":"18","page_number":183,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"604bc5a6-1926-4750-966c-5b40537c02f1","block_type":"box","text":"NM1026U-6033243-183/221","page_number":183,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"5e14422d-cf31-4ff5-b43d-fa158aa63742","block_type":"box","text":"untimely notice of shareholder meetings; ii) restrictions on a foreigner’s ability to exercise votes; iii)","page_number":184,"box":{"x":117,"y":87,"width":735,"height":12}},{"id":"4bf78a8a-4749-424d-ace3-1ba07755d4e1","block_type":"box","text":"requirements to vote proxies in person; iv) “share-blocking” (requirements that investors who exercise","page_number":184,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"3a7b92d1-68fe-4194-be9c-9f63aec369a4","block_type":"box","text":"their voting rights surrender the right to dispose of their holdings from the point at which votes are","page_number":184,"box":{"x":116,"y":118,"width":728,"height":12}},{"id":"51a55bd4-66fc-4c88-8346-11ac2e325271","block_type":"box","text":"submitted until after the after the shareholder meeting has occurred); v) potential difficulties in","page_number":184,"box":{"x":116,"y":134,"width":700,"height":12}},{"id":"501b4f7e-f7dd-4edf-b6c7-6565fedb29a2","block_type":"box","text":"translating the proxy; vi) regulatory constraints; and vii) requirements to provide local agents with","page_number":184,"box":{"x":116,"y":149,"width":723,"height":12}},{"id":"a83a249c-141b-4f96-a220-e8aa4af15f96","block_type":"box","text":"powers of attorney to facilitate voting instructions. We are not supportive of impediments to the","page_number":184,"box":{"x":117,"y":165,"width":706,"height":12}},{"id":"4f72095d-5dfe-414a-bd5a-58387e30a024","block_type":"box","text":"exercise of voting rights such as share-blocking or overly burdensome administrative requirements.","page_number":184,"box":{"x":116,"y":180,"width":742,"height":12}},{"id":"9edff570-3ebb-45e0-bc31-0d817df9b8ba","block_type":"box","text":"BlackRock votes proxies in these situations on a “best-efforts” basis. In addition, BAIS may determine","page_number":184,"box":{"x":117,"y":211,"width":759,"height":12}},{"id":"fbc073dd-268d-4694-a1c8-8b4a2821a931","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":184,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"e42e56af-8485-44ff-b0e6-df18875c3508","block_type":"box","text":"allocation) if the costs (including but not limited to opportunity costs associated with share-blocking","page_number":184,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"077ed861-d9be-40d5-ba97-c7b1c5058574","block_type":"box","text":"constraints) associated with exercising a vote are expected to outweigh the benefit the client would","page_number":184,"box":{"x":116,"y":258,"width":739,"height":12}},{"id":"5aa720af-55d5-4eef-8a14-fe86040424cd","block_type":"box","text":"derive by voting on the proposal.","page_number":184,"box":{"x":116,"y":273,"width":248,"height":12}},{"id":"a5ab356d-1d1c-42f5-93e4-c0f9469764e2","block_type":"box","text":"Voting Choice","page_number":184,"box":{"x":116,"y":304,"width":118,"height":12}},{"id":"7ee4a4e4-5a08-4b8c-bf62-2b5355a546f7","block_type":"box","text":"BlackRock offers Voting Choice, a program that provides eligible clients with more opportunities to","page_number":184,"box":{"x":117,"y":335,"width":733,"height":12}},{"id":"a8d1df92-303c-4086-81a5-3385e28176c1","block_type":"box","text":"participate in the proxy voting process where legally and operationally viable.","page_number":184,"box":{"x":117,"y":351,"width":575,"height":12}},{"id":"6b9a3efd-82a0-4935-8ef4-3fd37752bd55","block_type":"box","text":"Voting Choice is currently available for eligible clients invested in certain institutional pooled funds in","page_number":184,"box":{"x":116,"y":382,"width":748,"height":12}},{"id":"02f27877-eb18-460f-8311-e68a4f461e3c","block_type":"box","text":"the U.S., UK, and Canada that use systematic active equity (SAE) and multi-asset strategies. In","page_number":184,"box":{"x":116,"y":397,"width":716,"height":12}},{"id":"3da5b660-a82a-49c9-b205-230ffef7cee0","block_type":"box","text":"addition, institutional clients in separately managed accounts (SMAs) are eligible for BlackRock Voting","page_number":184,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"0b26acd1-565d-46a0-bc2f-f292b5eaa096","block_type":"box","text":"Choice regardless of their investment strategies.","page_number":184,"box":{"x":117,"y":428,"width":357,"height":12}},{"id":"b2d5ac45-9266-4e1c-aa94-540fd2c6cd48","block_type":"box","text":"12","page_number":184,"box":{"x":477,"y":428,"width":11,"height":6}},{"id":"65e1481c-f09a-477d-8725-6a25cac6895b","block_type":"box","text":"As a result, the shares attributed to BlackRock in company share registers may be voted differently","page_number":184,"box":{"x":116,"y":459,"width":740,"height":12}},{"id":"be4a200b-6e29-4886-8f70-44dff1867fd3","block_type":"box","text":"depending on whether our clients have authorized BAIS to vote on their behalf, have authorized","page_number":184,"box":{"x":116,"y":475,"width":715,"height":12}},{"id":"0664863b-42f9-49d5-b28b-92a65ac3c2b9","block_type":"box","text":"BlackRock to vote in accordance with a third-party policy, or have elected to vote shares in accordance","page_number":184,"box":{"x":117,"y":490,"width":769,"height":12}},{"id":"c5e8dff4-0434-474d-9c45-96dfdedd5c0b","block_type":"box","text":"with their own policy. Our clients have greater control over proxy voting because of Voting Choice.","page_number":184,"box":{"x":116,"y":506,"width":727,"height":12}},{"id":"fbfccd74-cffd-4f04-bb7e-ae7cda6e82be","block_type":"box","text":"13","page_number":184,"box":{"x":846,"y":506,"width":10,"height":6}},{"id":"6e422984-a761-4fd8-a6d9-7d3ac0386be3","block_type":"box","text":"Use and oversight of third-party vote services providers","page_number":184,"box":{"x":117,"y":537,"width":452,"height":12}},{"id":"9da073e3-4783-4401-a033-762f8eb7460c","block_type":"box","text":"Third-party vote services providers – or proxy research firms—provide research and recommendations","page_number":184,"box":{"x":116,"y":568,"width":767,"height":12}},{"id":"0aae8a92-509a-41dd-8dfe-e1b702f8c4d0","block_type":"box","text":"on proxy votes, as well as voting infrastructure. BlackRock contracts primarily with the vote services","page_number":184,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"ea4899b7-735b-41cb-8b5d-4bf74d88963c","block_type":"box","text":"provider ISS and leverages its online platform to supply research and support voting, record keeping,","page_number":184,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"72654bf7-611a-4d33-a46a-68b327d0905c","block_type":"box","text":"and reporting processes. We also use Glass Lewis’ research and analysis as an input into our voting","page_number":184,"box":{"x":116,"y":614,"width":752,"height":12}},{"id":"018cad00-289b-49a0-afe1-81dcbff9b335","block_type":"box","text":"process. It is important to note that, although proxy research firms provide important data and analysis,","page_number":184,"box":{"x":117,"y":630,"width":768,"height":12}},{"id":"f67c7fea-15bd-4612-b675-df8b8c09ecd7","block_type":"box","text":"BAIS does not rely solely on their information or follow their voting recommendations. A company’s","page_number":184,"box":{"x":117,"y":645,"width":738,"height":12}},{"id":"5a05e161-8a57-4916-96a4-50219f0460f6","block_type":"box","text":"disclosures, our engagements and voting, investment colleagues’ insights and our Guidelines are","page_number":184,"box":{"x":116,"y":661,"width":722,"height":12}},{"id":"a07b8e24-c9d2-4b85-8545-1830abdcc51b","block_type":"box","text":"important inputs into our voting decisions on behalf of clients.","page_number":184,"box":{"x":117,"y":676,"width":452,"height":12}},{"id":"3808d777-cdeb-449f-97f8-a3b02081c13f","block_type":"box","text":"Given the large universe of actively held companies, BAIS employs the proxy services provider to","page_number":184,"box":{"x":117,"y":707,"width":722,"height":12}},{"id":"c92a7937-55ec-4058-925e-fd5f5a4d4ea2","block_type":"box","text":"streamline the voting process by making voting recommendations based on BAIS’ Guidelines when the","page_number":184,"box":{"x":116,"y":723,"width":765,"height":12}},{"id":"cea61060-1054-409f-96e8-c87b3329611b","block_type":"box","text":"items on a shareholder meeting agenda are routine. Agenda items that are not routine are referred","page_number":184,"box":{"x":117,"y":738,"width":730,"height":12}},{"id":"7e3b061e-df6b-4376-bcd9-d1635b5cbb90","block_type":"box","text":"back to BAIS to assess, escalate as necessary to the relevant portfolio managers and vote. BAIS","page_number":184,"box":{"x":117,"y":754,"width":719,"height":12}},{"id":"74d2f311-f38d-46b5-b4d1-96562b1cab1b","block_type":"box","text":"reviews and can override the recommendations of the vote services provider at any time prior to the","page_number":184,"box":{"x":117,"y":769,"width":739,"height":12}},{"id":"de9ec214-16ee-4448-8265-b8a227e1a785","block_type":"box","text":"vote deadline. 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Our oversight of service providers includes regular meetings with client","page_number":185,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"8df77528-3821-44e6-a060-4d89aa28c08e","block_type":"box","text":"service teams, systematic monitoring of vendor operations, as well as annual due diligence meetings in","page_number":185,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"937285d7-6abe-4e30-8db4-4ed1724d6348","block_type":"box","text":"accordance with BlackRock’s firmwide policies.","page_number":185,"box":{"x":116,"y":149,"width":355,"height":12}},{"id":"08a383d3-68af-49c5-a4fc-e42d82e693b4","block_type":"box","text":"Conflicts management policies and procedures","page_number":185,"box":{"x":116,"y":181,"width":383,"height":12}},{"id":"0df8edcd-4db7-484a-b1a1-a1c8a49886f9","block_type":"box","text":"BlackRock maintains policies and procedures that seek to prevent undue influence on BAIS’ proxy","page_number":185,"box":{"x":117,"y":213,"width":734,"height":12}},{"id":"31f7acec-2b5e-4898-8ed8-4c936afcaada","block_type":"box","text":"voting activity. Such influence might stem from any relationship between the investee company (or any","page_number":185,"box":{"x":116,"y":228,"width":767,"height":12}},{"id":"fb3970d0-3fea-432a-8f7f-0ef93b089cf3","block_type":"box","text":"shareholder proponent or dissident shareholder) and BlackRock, BlackRock’s affiliates, a Fund or a","page_number":185,"box":{"x":116,"y":244,"width":743,"height":12}},{"id":"3d1fb98a-0653-4f9e-a258-eb2c2cb54f32","block_type":"box","text":"Fund’s affiliates, or BlackRock employees. 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In addition, BlackRock seeks to ensure that all","page_number":185,"box":{"x":150,"y":637,"width":682,"height":12}},{"id":"262568eb-61d5-4413-87d6-dc7f143e2333","block_type":"box","text":"engagements with corporate issuers, dissident shareholders or shareholder proponents are","page_number":185,"box":{"x":150,"y":653,"width":683,"height":11}},{"id":"182a99dd-dd05-40a8-86ee-bb55402bcb88","block_type":"box","text":"managed consistently and without regard to BlackRock’s relationship with such parties. Clients or","page_number":185,"box":{"x":150,"y":668,"width":723,"height":12}},{"id":"b04c2fee-b2f7-4278-95d4-a517f5b7cff0","block_type":"box","text":"business partners are not given preferential treatment or differentiated access. BAIS prioritizes","page_number":185,"box":{"x":150,"y":683,"width":702,"height":12}},{"id":"100f2bbd-d247-4829-9676-dfd41f2ce282","block_type":"box","text":"engagements based on factors including, but not limited to, our need for additional information to","page_number":185,"box":{"x":150,"y":699,"width":717,"height":12}},{"id":"24017910-cdff-4941-a4c3-0d39d90393f0","block_type":"box","text":"make a more informed voting decision or to better understand a company’s perspectives on","page_number":185,"box":{"x":150,"y":714,"width":680,"height":12}},{"id":"e5698729-52c3-444f-a03a-b78d5e6e09a2","block_type":"box","text":"financially material risks and opportunities. Within the normal course of business, BAIS may","page_number":185,"box":{"x":149,"y":730,"width":681,"height":12}},{"id":"ef8e45d9-461c-4aa9-9e77-7b31785c6606","block_type":"box","text":"engage directly with BlackRock clients, business partners and/or third parties, and/or with","page_number":185,"box":{"x":150,"y":746,"width":663,"height":11}},{"id":"854ff997-9901-4652-aa4e-b68f88fcdf41","block_type":"box","text":"employees with sales, vendor management, or business partnership roles, in discussions","page_number":185,"box":{"x":150,"y":761,"width":662,"height":12}},{"id":"d02cf87f-5ca2-400b-af5c-b782bda4aed4","block_type":"box","text":"regarding our approach to stewardship, general corporate governance matters, client reporting","page_number":185,"box":{"x":150,"y":777,"width":701,"height":12}},{"id":"40baf7fd-e100-48c8-9168-ab34e666f5a1","block_type":"box","text":"needs, and/or to otherwise ensure that proxy-related client service levels are met","page_number":185,"box":{"x":150,"y":792,"width":601,"height":12}},{"id":"225f7f4d-d150-4797-9fc9-713efb9fbb65","block_type":"box","text":"• Determined to engage, in certain instances, an independent third-party voting service provider to","page_number":185,"box":{"x":117,"y":816,"width":749,"height":12}},{"id":"1bb177d0-0dc3-4b2b-beea-ae3f27faefbf","block_type":"box","text":"make proxy voting recommendations as a further safeguard to avoid perceived or potential","page_number":185,"box":{"x":150,"y":831,"width":678,"height":12}},{"id":"a62dcda0-6b68-4b28-ba95-5528f1eeab4d","block_type":"box","text":"conflicts of interest, to satisfy regulatory requirements, or as may be otherwise required by","page_number":185,"box":{"x":150,"y":847,"width":674,"height":12}},{"id":"baf70139-64b7-41c9-88f2-bc0739b837e2","block_type":"box","text":"applicable law. In such circumstances, the independent third-party voting service provider provides","page_number":185,"box":{"x":150,"y":862,"width":737,"height":12}},{"id":"294ca1e4-2a1c-495f-a3b7-24717631e53a","block_type":"box","text":"BlackRock with recommendations, in accordance with the Guidelines, as to how to vote such","page_number":185,"box":{"x":151,"y":878,"width":693,"height":11}},{"id":"d360d512-e084-425e-9862-2eb4fc1e7473","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":185,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"c3c4c208-95da-486f-b99d-c2ae41e6dd66","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":185,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"a800dfcd-11e0-45cd-b0b8-7cf27274fb27","block_type":"box","text":"20","page_number":185,"box":{"x":865,"y":909,"width":18,"height":9}},{"id":"c21aa8e8-2463-4931-b1e4-0de09e5313d3","block_type":"box","text":"NM1026U-6033243-185/221","page_number":185,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"26184f0d-1a78-41a0-9f42-ff06bf1ad589","block_type":"box","text":"proxies. BlackRock uses an independent third-party voting service provider to make proxy voting","page_number":186,"box":{"x":150,"y":87,"width":722,"height":12}},{"id":"08b5be0f-a294-49cf-9d60-7673a6cbfe01","block_type":"box","text":"recommendations for shares of BlackRock, Inc. and companies affiliated with BlackRock, Inc.","page_number":186,"box":{"x":150,"y":102,"width":698,"height":12}},{"id":"b22ed4a8-e2f2-430e-93b3-9ae1781e01d3","block_type":"box","text":"BlackRock may also use an independent third-party voting service provider to make proxy voting","page_number":186,"box":{"x":151,"y":118,"width":721,"height":12}},{"id":"9a597a13-9d03-4357-b7b2-4bf2b344250e","block_type":"box","text":"recommendations for certain perceived or potential conflicts of interest, including:","page_number":186,"box":{"x":150,"y":134,"width":608,"height":12}},{"id":"e8304008-1d43-496b-9441-1a6b2f04965a","block_type":"box","text":"• public companies that include BlackRock employees on their boards of directors","page_number":186,"box":{"x":159,"y":156,"width":624,"height":12}},{"id":"9c1bf611-444f-4967-8637-5722d62a6961","block_type":"box","text":"• public companies of which a BlackRock, Inc. board member serves as a senior executive or a","page_number":186,"box":{"x":159,"y":178,"width":725,"height":12}},{"id":"828a1960-6146-432d-a450-176d64482add","block_type":"box","text":"member of the board of directors","page_number":186,"box":{"x":184,"y":193,"width":248,"height":10}},{"id":"68945575-30c3-41bb-b6ec-297615b0b43c","block_type":"box","text":"• public companies that are the subject of certain transactions involving BlackRock Funds","page_number":186,"box":{"x":159,"y":215,"width":682,"height":12}},{"id":"78274915-8703-4dff-86ad-a4105ec4e922","block_type":"box","text":"• public companies that are joint venture partners with BlackRock, and","page_number":186,"box":{"x":159,"y":238,"width":540,"height":11}},{"id":"7dc942f8-0515-48de-b07d-a4fbb2790a34","block_type":"box","text":"• public companies when legal or regulatory requirements compel BlackRock to use an","page_number":186,"box":{"x":159,"y":260,"width":663,"height":12}},{"id":"fc363006-b9bc-435a-871a-ad6f345cff66","block_type":"box","text":"independent third-party voting service provider","page_number":186,"box":{"x":184,"y":275,"width":350,"height":12}},{"id":"34f1dcb5-aa15-43d9-bf0a-780f6f33d16a","block_type":"box","text":"In selecting an independent third-party voting service provider, we assess several characteristics,","page_number":186,"box":{"x":117,"y":304,"width":727,"height":12}},{"id":"1dc789ee-5e1c-4424-a059-3791b708536b","block_type":"box","text":"including but not limited to: independence, an ability to analyze proxy issues and make","page_number":186,"box":{"x":117,"y":319,"width":647,"height":12}},{"id":"505e6eca-428d-44d3-8fa5-70ee41c080fa","block_type":"box","text":"recommendations in the economic interest of our clients in accordance with the Guidelines, reputation","page_number":186,"box":{"x":117,"y":335,"width":760,"height":12}},{"id":"2ce8671d-128e-4df6-aa2d-31f1aa9ae09a","block_type":"box","text":"for reliability and integrity, and operational capacity to accurately deliver the assigned","page_number":186,"box":{"x":116,"y":350,"width":637,"height":12}},{"id":"90d85a3c-c4a4-434d-86d9-3c6dd715c659","block_type":"box","text":"recommendations in a timely manner. We may engage more than one independent third-party voting","page_number":186,"box":{"x":117,"y":366,"width":752,"height":12}},{"id":"03ce521d-b07e-4ef2-89e9-5e3d8cbcc1d2","block_type":"box","text":"service provider, in part to mitigate potential or perceived conflicts of interest at a single voting service","page_number":186,"box":{"x":116,"y":381,"width":761,"height":12}},{"id":"0f363945-62ae-4587-981e-3806853cf345","block_type":"box","text":"provider.","page_number":186,"box":{"x":117,"y":397,"width":69,"height":12}},{"id":"0b066dd9-a0c5-44b2-9825-c0c71ec0dc6c","block_type":"box","text":"Securities lending","page_number":186,"box":{"x":116,"y":425,"width":149,"height":13}},{"id":"20ca8bd1-61f8-4ab6-8233-bb080328e5ba","block_type":"box","text":"If authorized, BlackRock acts as a securities lending agent on behalf of its clients. Securities lending is","page_number":186,"box":{"x":117,"y":454,"width":764,"height":12}},{"id":"9882707a-f5a9-45b1-a1fc-7f0e725c37ab","block_type":"box","text":"a well-regulated practice that contributes to capital market efficiency. It also enables funds to generate","page_number":186,"box":{"x":116,"y":470,"width":763,"height":12}},{"id":"cce51c42-19c3-40d7-b16f-5be79cd21bb8","block_type":"box","text":"additional returns which in turn may allow fund providers to offset fund expenses.","page_number":186,"box":{"x":116,"y":485,"width":607,"height":12}},{"id":"38d05488-61ee-4929-b9b9-5daf73a89cae","block_type":"box","text":"With regard to the relationship between securities lending and proxy voting, BlackRock cannot vote","page_number":186,"box":{"x":116,"y":514,"width":741,"height":12}},{"id":"282d254b-306c-434d-bb7f-c9a376004d5f","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":186,"box":{"x":116,"y":530,"width":736,"height":12}},{"id":"77d1d4d7-e2ad-4fbe-90d2-88a44f853cc2","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":189,"box":{"x":117,"y":211,"width":733,"height":12}},{"id":"c9240d41-1c89-4c9e-ab28-74e70cb34112","block_type":"box","text":"recalling securities on loan in connection with proxy voting.","page_number":189,"box":{"x":117,"y":227,"width":440,"height":12}},{"id":"2725cd0e-af99-4b35-912e-63909258df7e","block_type":"box","text":"Reports to the Board","page_number":189,"box":{"x":117,"y":258,"width":171,"height":11}},{"id":"3c2b2ccf-30c5-4d73-8c14-10407837fcd8","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":189,"box":{"x":117,"y":281,"width":767,"height":12}},{"id":"4a217a2e-9517-4fa2-92be-ce0b8e595f3d","block_type":"box","text":"as applicable to the Funds covered by this policy in the preceding year together with a 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Our role, on","page_number":193,"box":{"x":116,"y":654,"width":723,"height":12}},{"id":"2a7653f1-e996-416d-9f21-d2bda0fab2db","block_type":"box","text":"behalf of clients as long-term investors, is to better understand how corporate leadership is managing","page_number":193,"box":{"x":117,"y":669,"width":751,"height":12}},{"id":"a98ca4be-7819-4f5f-977e-7b6ca383247d","block_type":"box","text":"material risks and capitalizing on opportunities to help protect and enhance the company’s ability to","page_number":193,"box":{"x":117,"y":685,"width":735,"height":12}},{"id":"b4e9a873-52c0-420d-956e-2d1daa3e85ed","block_type":"box","text":"deliver long-term financial returns.","page_number":193,"box":{"x":116,"y":700,"width":252,"height":12}},{"id":"c9d3df0a-c8ff-4100-9a77-59760003313c","block_type":"box","text":"Stewardship in practice","page_number":193,"box":{"x":406,"y":734,"width":187,"height":12}},{"id":"30173b7c-5728-4a5c-8174-6c4a2670b1ba","block_type":"box","text":"The assets BlackRock manages belong to our clients, which include public and private pension","page_number":193,"box":{"x":116,"y":761,"width":705,"height":12}},{"id":"862ff6e0-334d-4c5b-b52c-4d70745cbd1e","block_type":"box","text":"plans, insurers, official institutions, endowments, universities, charities, family offices, wealth","page_number":193,"box":{"x":117,"y":777,"width":683,"height":12}},{"id":"3ce9744c-a24b-4c0c-a3d5-6d36bc9ae4d6","block_type":"box","text":"1","page_number":193,"box":{"x":144,"y":802,"width":2,"height":5}},{"id":"bc5fba1a-8d21-4fe8-aa90-fdaa4548b551","block_type":"box","text":"On February 11, 2025, the U.S. Securities and Exchange Commission (SEC) staff issued updated guidance for","page_number":193,"box":{"x":170,"y":802,"width":660,"height":9}},{"id":"a7fcaa0c-77e8-4441-baa8-e4e64fd5ba60","block_type":"box","text":"shareholders to maintain their eligibility to report their beneficial ownership under Schedule 13G of the Exchange Act.","page_number":193,"box":{"x":170,"y":815,"width":695,"height":9}},{"id":"7c05379d-c974-4402-a770-e25a4d9f77e3","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":193,"box":{"x":170,"y":828,"width":707,"height":9}},{"id":"3e5f1e27-245d-4848-a2d1-0edf8e0e76a8","block_type":"box","text":"of changing or influencing control of any company.","page_number":193,"box":{"x":170,"y":840,"width":298,"height":10}},{"id":"a29e002e-b056-4db2-b343-811a25db6eda","block_type":"box","text":"2","page_number":193,"box":{"x":143,"y":853,"width":4,"height":5}},{"id":"5b43b226-3d95-401c-9d27-42eb68ddfdb6","block_type":"box","text":"Alongside the Global Principles and regional voting guidelines, BIS publishes Engagement Priorities which reflect the","page_number":193,"box":{"x":170,"y":853,"width":695,"height":10}},{"id":"789dba2e-7092-4015-b7e7-e8fb02381812","block_type":"box","text":"five themes on which we most frequently engage companies, where they are relevant, as these can be a source of","page_number":193,"box":{"x":170,"y":866,"width":680,"height":10}},{"id":"e914c7d8-6d32-43fb-8593-d7b2df09dd48","block_type":"box","text":"material business risk or opportunity.","page_number":193,"box":{"x":170,"y":879,"width":218,"height":10}},{"id":"88c8a4f3-e924-41bb-800c-cbcb1dd0ed8b","block_type":"box","text":"BlackRock Investment Stewardship","page_number":193,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"0771bd66-2353-497d-8a3e-26d756a5928a","block_type":"box","text":"Global Principles |","page_number":193,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"a829da95-adb0-4a8f-b908-7742db533f11","block_type":"box","text":"3","page_number":193,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"ff0867bc-8b1f-4b53-94e7-c01b00d6d0c6","block_type":"box","text":"NM1026U-6033243-193/221","page_number":193,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"8fc027b8-8662-4590-ac16-886b94bf37cd","block_type":"box","text":"managers, and ultimately, the individual investors that they serve. Through stewardship, we assess","page_number":194,"box":{"x":117,"y":87,"width":741,"height":12}},{"id":"90711eab-234f-4c8f-a05d-6ac204520fef","block_type":"box","text":"how companies are creating long-term financial value to serve our clients, many of whom are saving","page_number":194,"box":{"x":117,"y":102,"width":748,"height":13}},{"id":"d71e9385-be24-47b3-b3a5-fe86a80a1f2e","block_type":"box","text":"for long-term goals, such as retirement. Our stewardship program – including when engaging with","page_number":194,"box":{"x":116,"y":118,"width":730,"height":12}},{"id":"947eb0a6-67a9-4ba8-b94b-418727fe0e51","block_type":"box","text":"companies and voting at shareholder meetings on behalf of clients – is conducted from a long-term","page_number":194,"box":{"x":116,"y":134,"width":740,"height":12}},{"id":"6af6b0b0-7f48-451c-8760-6f05983b8c35","block_type":"box","text":"investor perspective and takes a financial materiality-based approach, focused solely on advancing","page_number":194,"box":{"x":117,"y":149,"width":740,"height":12}},{"id":"b088bf4d-1c97-4340-b892-99a7ac8a4102","block_type":"box","text":"clients’ long-term financial interests.","page_number":194,"box":{"x":116,"y":165,"width":271,"height":12}},{"id":"3801b14e-5d6e-48b9-9993-259560c9fc63","block_type":"box","text":"BIS engages with the boards and management of companies in which clients are invested to deepen","page_number":194,"box":{"x":117,"y":192,"width":753,"height":13}},{"id":"c0d10d94-057b-4877-8386-6e923cb3f2a8","block_type":"box","text":"our understanding of a company’s business model, including how they are overseeing material","page_number":194,"box":{"x":116,"y":208,"width":708,"height":12}},{"id":"697d03e4-4fa7-4fd9-b8c7-1c93fb0c1b9f","block_type":"box","text":"business risks and opportunities over time, and to help inform our voting on behalf of clients.","page_number":194,"box":{"x":117,"y":223,"width":689,"height":13}},{"id":"34ed58e4-0f8a-4c45-9e47-acca74c55c51","block_type":"box","text":"Engagements provide companies with the opportunity to share their perspectives on topics that, in BIS’","page_number":194,"box":{"x":117,"y":239,"width":769,"height":12}},{"id":"6053379d-e199-4ff7-8d59-3a75e20e4fd0","block_type":"box","text":"experience, impact the long-term financial returns BlackRock’s clients depend on to meet their financial","page_number":194,"box":{"x":116,"y":254,"width":771,"height":13}},{"id":"29e1ffe6-b361-463e-9fd8-1acd3f1dc05d","block_type":"box","text":"goals.","page_number":194,"box":{"x":116,"y":270,"width":49,"height":12}},{"id":"f1231027-c951-47b0-bf9b-be37ea04800f","block_type":"box","text":"Voting at a company’s shareholder meeting is a right of share ownership and a core principle of","page_number":194,"box":{"x":116,"y":298,"width":713,"height":12}},{"id":"a0723f69-a1a5-4e6c-8c89-9688bab1da90","block_type":"box","text":"corporate governance. As a fiduciary, BlackRock is legally required to make proxy voting","page_number":194,"box":{"x":116,"y":313,"width":663,"height":12}},{"id":"5627fb02-e436-43cd-86e6-68a91a8de0a0","block_type":"box","text":"determinations in a manner that is consistent with the investment objectives of clients who have","page_number":194,"box":{"x":116,"y":329,"width":715,"height":12}},{"id":"190af6ad-f402-484e-a11d-db1ab6a39dd3","block_type":"box","text":"delegated voting authority to us. BIS’ Benchmark Policies, and the vote decisions made consistent with","page_number":194,"box":{"x":116,"y":344,"width":770,"height":12}},{"id":"2448c18f-890f-4c49-9384-e3e0fec267a7","block_type":"box","text":"those policies, reflect our reasonable and independent judgment of what is in the long-term financial","page_number":194,"box":{"x":116,"y":360,"width":746,"height":12}},{"id":"7bfae321-1df1-4d36-82f0-088b0e7a8968","block_type":"box","text":"interests of clients. Our vote decisions are often informed by several factors, including in-depth","page_number":194,"box":{"x":117,"y":375,"width":706,"height":12}},{"id":"14a25f1f-8526-4590-a6bc-4b0405370f5b","block_type":"box","text":"analysis of company disclosures, comparisons against industry peers, third-party research, and, where","page_number":194,"box":{"x":116,"y":391,"width":768,"height":12}},{"id":"bff40c50-63c8-4416-a019-d006ac01208c","block_type":"box","text":"appropriate, engagement with companies.","page_number":194,"box":{"x":116,"y":407,"width":318,"height":11}},{"id":"f91e09a7-3073-4fa6-a24e-41d6f971d1bd","block_type":"box","text":"Generally, BIS supports the vote recommendations of the board of directors and management at","page_number":194,"box":{"x":117,"y":434,"width":721,"height":12}},{"id":"1e72501f-49fe-4d4e-99a6-5b83ebc8f7b9","block_type":"box","text":"companies which have sound corporate governance and deliver strong financial returns over time.","page_number":194,"box":{"x":116,"y":450,"width":734,"height":12}},{"id":"dcfb4db9-43b9-4232-a6ee-9848176705c2","block_type":"box","text":"When we determine it is in our clients’ financial interests to convey concern to companies through","page_number":194,"box":{"x":116,"y":465,"width":729,"height":12}},{"id":"b6a21942-31d5-4c79-88a1-ee09f308994c","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":194,"box":{"x":116,"y":481,"width":768,"height":12}},{"id":"1a38fe99-04b8-4238-a03b-5f72ef65e15e","block_type":"box","text":"proposals, or we might not support management’s voting recommendation on a shareholder proposal.","page_number":194,"box":{"x":117,"y":496,"width":761,"height":12}},{"id":"2493879e-3442-459c-9cb8-7a90a52ffaf8","block_type":"box","text":"Shareholder 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to:","page_number":194,"box":{"x":163,"y":590,"width":468,"height":11}},{"id":"159a1441-9c88-435d-af58-d6299415fcf9","block_type":"box","text":"• Vote to elect, remove, and nominate directors, approve the appointment of the auditor, and","page_number":194,"box":{"x":159,"y":617,"width":705,"height":12}},{"id":"1a77b682-8692-4e03-9e22-442e3ca9202d","block_type":"box","text":"amend the corporate charter or bylaws.","page_number":194,"box":{"x":184,"y":633,"width":297,"height":12}},{"id":"507229d1-b8ad-4a3a-aeab-608a6a24b014","block_type":"box","text":"• Vote on key board decisions that are material to","page_number":194,"box":{"x":159,"y":655,"width":377,"height":12}},{"id":"04c58b9a-3502-43a3-9ae8-bbdd41df1ea4","block_type":"box","text":"the protection of their investment, including but","page_number":194,"box":{"x":536,"y":655,"width":345,"height":12}},{"id":"46853cea-d0d5-4d42-9727-a99caa92ab79","block_type":"box","text":"not limited to, changes to the purpose of the busi","page_number":194,"box":{"x":184,"y":670,"width":353,"height":12}},{"id":"bcbb0c79-57ed-4320-8577-337b7ca8af81","block_type":"box","text":"ness, dilution levels, and pre-emptive rights.","page_number":194,"box":{"x":539,"y":670,"width":317,"height":12}},{"id":"7db567c9-ea1b-4ddf-a7cc-52d6cbd91498","block_type":"box","text":"• Access sufficient and timely information on governance, strategic, and business matters –","page_number":194,"box":{"x":159,"y":692,"width":691,"height":12}},{"id":"88d3faac-06b5-4ab2-888c-a3afe04dd896","block_type":"box","text":"where such matters are material – to make informed decisions.","page_number":194,"box":{"x":183,"y":707,"width":468,"height":10}},{"id":"623b2680-f5d6-4bbc-9710-83576e6df2af","block_type":"box","text":"Key governance topics","page_number":194,"box":{"x":409,"y":742,"width":182,"height":11}},{"id":"633b472b-e260-4eaa-a261-b95a4daaf39e","block_type":"box","text":"In our experience, there are certain globally applicable elements of corporate governance that","page_number":194,"box":{"x":117,"y":769,"width":696,"height":12}},{"id":"ae206b5f-80e8-412e-8858-f6555dd3aed2","block_type":"box","text":"contribute to a company’s ability to create long-term financial value for shareholders. These are topics","page_number":194,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"74233450-2f26-4f1c-bda9-874c45af7c8b","block_type":"box","text":"that shareholders may have the ability to vote on at shareholder meetings. These areas include:","page_number":194,"box":{"x":116,"y":800,"width":711,"height":12}},{"id":"d78bd1f6-576a-47c0-b411-92c020363acd","block_type":"box","text":"• Boards and directors","page_number":194,"box":{"x":117,"y":828,"width":192,"height":10}},{"id":"3e2a462f-59d7-4588-8456-f988daf0f8de","block_type":"box","text":"3","page_number":194,"box":{"x":143,"y":853,"width":4,"height":5}},{"id":"790056c2-fe41-45d0-8279-deb220ccfd86","block_type":"box","text":"Examples include: Government of Canada, “Canada Business Corporations Act,” amended 2024; European Union,","page_number":194,"box":{"x":171,"y":853,"width":682,"height":10}},{"id":"0a0121e5-114a-4646-a180-96c7525a708f","block_type":"box","text":"“Shareholder Rights Directive II,” 2017; and the China Securities Regulatory Commission, “Code of Corporate","page_number":194,"box":{"x":170,"y":866,"width":651,"height":10}},{"id":"c3967ad5-c28d-4dbe-8cf4-84b64be1b779","block_type":"box","text":"Governance for Listed Companies in China,” 2001. Websites accessed in December 2025.","page_number":194,"box":{"x":170,"y":879,"width":538,"height":10}},{"id":"710bdc78-3648-4c83-b464-4d5f1b0435de","block_type":"box","text":"BlackRock Investment Stewardship","page_number":194,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"0622c69d-e7d5-41a5-8fc2-5d77d07b90ec","block_type":"box","text":"Global Principles |","page_number":194,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"b8efffd6-ea05-4c07-9eb0-3a2861e4063a","block_type":"box","text":"4","page_number":194,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"7316b9c0-e6ec-4a35-8557-2101a15b9572","block_type":"box","text":"NM1026U-6033243-194/221","page_number":194,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"1ac15f61-c08e-4bf9-85ac-cac2cb8b8f9d","block_type":"box","text":"• Auditors and audit-related issues","page_number":195,"box":{"x":117,"y":87,"width":282,"height":10}},{"id":"432a1963-a9e0-4da2-8025-b84551d52c26","block_type":"box","text":"• Capital structure, mergers, acquisitions, asset sales, and other special situations","page_number":195,"box":{"x":117,"y":109,"width":635,"height":12}},{"id":"61eaf2c1-a2f3-4ca2-9000-81a415e3d781","block_type":"box","text":"• Executive compensation","page_number":195,"box":{"x":117,"y":130,"width":219,"height":12}},{"id":"5c9298be-f71f-4e2f-8dc5-3e78dc8c40bb","block_type":"box","text":"• Shareholder protections and other significant corporate governance matters","page_number":195,"box":{"x":117,"y":152,"width":600,"height":12}},{"id":"e407bbd6-94e7-44e4-895b-fe9bfddb7fd1","block_type":"box","text":"• Shareholder proposals","page_number":195,"box":{"x":117,"y":173,"width":206,"height":12}},{"id":"8961beb7-2d95-4487-a9a4-0cf9ecb81871","block_type":"box","text":"The BIS Benchmark Policies are not prescriptive but rather are applied on a pragmatic basis, taking","page_number":195,"box":{"x":116,"y":201,"width":744,"height":12}},{"id":"b35448b6-24f4-4249-8f03-21090921bd43","block_type":"box","text":"into consideration a number of company-specific factors, including the sector, market, and business","page_number":195,"box":{"x":117,"y":216,"width":744,"height":12}},{"id":"a6c22300-91f2-4b0e-a2dc-17474fa89311","block_type":"box","text":"environment within which companies operate.","page_number":195,"box":{"x":116,"y":232,"width":345,"height":12}},{"id":"d23a7fa9-46c8-4a9e-b88b-3144d2a5fe96","block_type":"box","text":"At the regional level, it is our view that companies should observe the accepted corporate governance","page_number":195,"box":{"x":116,"y":259,"width":761,"height":12}},{"id":"51c9fea7-59b0-4ee4-a3cf-fa8468f784e6","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":195,"box":{"x":116,"y":275,"width":736,"height":12}},{"id":"e39e0e2c-f8de-4d67-9340-c6c49eaf22e3","block_type":"box","text":"their approach better supports durable, long-term financial value creation. Our regional voting","page_number":195,"box":{"x":116,"y":290,"width":698,"height":12}},{"id":"8d3dcc06-1180-4639-931b-341c7ba4e43d","block_type":"box","text":"guidelines explain how the BIS Global Principles inform our voting decisions in relation to common","page_number":195,"box":{"x":116,"y":306,"width":735,"height":12}},{"id":"37962b08-57d4-4af3-8b1b-d3f59408b1e4","block_type":"box","text":"ballot items for shareholder meetings in those markets.","page_number":195,"box":{"x":117,"y":321,"width":406,"height":12}},{"id":"d2161ccb-c9ff-4307-a18c-60d1941ed60f","block_type":"box","text":"4","page_number":195,"box":{"x":525,"y":321,"width":5,"height":6}},{"id":"d93e81b5-4942-4e77-9e6e-c74c680ccafe","block_type":"box","text":"Boards and directors","page_number":195,"box":{"x":416,"y":355,"width":173,"height":9}},{"id":"5e90430b-bb5b-49f1-a844-7b7028a5a988","block_type":"box","text":"Oversight role of the board","page_number":195,"box":{"x":117,"y":382,"width":220,"height":13}},{"id":"4ad6e123-bb46-4aa4-b7f4-42d62997c557","block_type":"box","text":"Companies whose boards are comprised of appropriately qualified, engaged directors with","page_number":195,"box":{"x":117,"y":410,"width":676,"height":12}},{"id":"1ba7f7f4-dde8-43f5-95c2-0c595f76e6df","block_type":"box","text":"professional characteristics relevant to a company’s business enhance the board’s ability to add long","page_number":195,"box":{"x":117,"y":426,"width":753,"height":12}},{"id":"3e88518a-c102-440e-8a61-86042b6158ba","block_type":"box","text":"term financial value and serve as the voice of shareholders in board discussions. In our view, a strong","page_number":195,"box":{"x":116,"y":441,"width":761,"height":12}},{"id":"3ef82ded-832f-4644-8d88-1627a3a7bdaf","block_type":"box","text":"board gives a company a competitive advantage, providing valuable oversight and contributing to the","page_number":195,"box":{"x":117,"y":457,"width":754,"height":12}},{"id":"c1ba5be9-60b6-43fe-8265-7223d7482e50","block_type":"box","text":"most important management decisions that support long-term financial performance.","page_number":195,"box":{"x":117,"y":472,"width":632,"height":12}},{"id":"94de3e49-eedb-4f80-b0a2-b3648312822a","block_type":"box","text":"For this reason, our investment stewardship efforts focus on the effectiveness of the board of directors.","page_number":195,"box":{"x":117,"y":500,"width":768,"height":12}},{"id":"a27ed5a1-cfbf-414f-8952-a4f98133ee08","block_type":"box","text":"We engage, as necessary, with members of the board’s nominating and/or governance committee to","page_number":195,"box":{"x":116,"y":515,"width":753,"height":12}},{"id":"cb2f1acd-114d-4969-bd93-a264db84fb2d","block_type":"box","text":"assess whether governance practices and board composition are effective given a company’s","page_number":195,"box":{"x":116,"y":531,"width":701,"height":12}},{"id":"12981377-f9ca-44c8-9da4-8c97f6b57e66","block_type":"box","text":"business model, sector, market, and the business environment in which a company is operating.","page_number":195,"box":{"x":117,"y":546,"width":719,"height":12}},{"id":"5f0cdc5f-a103-4ef7-a8a9-e8ca05f60440","block_type":"box","text":"We consider it good practice when the board establishes and maintains a framework of robust and","page_number":195,"box":{"x":116,"y":574,"width":736,"height":12}},{"id":"15809355-894a-443a-8d4e-bed6b4398cd5","block_type":"box","text":"effective governance mechanisms that supports its oversight of the company’s strategy and","page_number":195,"box":{"x":116,"y":589,"width":685,"height":12}},{"id":"12381dff-f5da-4e7e-914d-99077635f87b","block_type":"box","text":"operations, consistent with the long-term financial interests of investors. This includes having clear","page_number":195,"box":{"x":116,"y":605,"width":735,"height":12}},{"id":"482f904a-f2f4-4c0f-96ab-1f7036e9445e","block_type":"box","text":"descriptions of the role of the board and the committees of the board and how directors engage with","page_number":195,"box":{"x":116,"y":620,"width":748,"height":12}},{"id":"ab6e1cf6-217f-4bfb-99f1-de7d6f1e3bc6","block_type":"box","text":"and oversee management, as well as disclosure of material risks that may affect a company’s long","page_number":195,"box":{"x":116,"y":636,"width":738,"height":12}},{"id":"99ca9781-6463-45b6-b834-1f6042ca3fe5","block_type":"box","text":"term strategy and how management is effectively identifying, managing, and mitigating such risks.","page_number":195,"box":{"x":116,"y":651,"width":732,"height":12}},{"id":"54fe7bd5-de3d-4d33-a40e-971839cf044a","block_type":"box","text":"Understanding management’s long-term strategy and the milestones against which investors should","page_number":195,"box":{"x":117,"y":679,"width":741,"height":12}},{"id":"d9537bea-2c5e-4e62-83ce-8acb0e292c3b","block_type":"box","text":"assess its implementation is central to our approach. If any strategic targets are significantly missed or","page_number":195,"box":{"x":116,"y":694,"width":761,"height":12}},{"id":"8a134d97-7b34-4d48-9696-6407554a4cfb","block_type":"box","text":"materially restated, we find it helpful when company disclosures provide a detailed explanation of the","page_number":195,"box":{"x":117,"y":710,"width":747,"height":12}},{"id":"6e79ed92-e19e-4211-b594-17647b348ccb","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":195,"box":{"x":116,"y":725,"width":754,"height":12}},{"id":"3d69bf41-5135-4c78-8531-844bc558a7b5","block_type":"box","text":"articulate the effectiveness of these mechanisms in overseeing the management of business risks and","page_number":195,"box":{"x":116,"y":741,"width":759,"height":12}},{"id":"d523c809-a1d4-43d2-ae37-618aeb4bdd1d","block_type":"box","text":"opportunities and the fulfillment of the company’s strategy.","page_number":195,"box":{"x":116,"y":756,"width":432,"height":12}},{"id":"f9e215ca-db1b-400e-b6ff-64657939533e","block_type":"box","text":"Where a company has not adequately disclosed or demonstrated that its board has fulfilled these","page_number":195,"box":{"x":116,"y":784,"width":722,"height":12}},{"id":"33bae0e9-0271-4609-8167-f422b2e765d5","block_type":"box","text":"corporate governance and risk oversight responsibilities, we may consider not supporting the election","page_number":195,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"9c9b81f6-1237-4e49-ac8b-240028e8c225","block_type":"box","text":"of directors who, in our assessment, have particular responsibility for the issues.","page_number":195,"box":{"x":116,"y":815,"width":594,"height":12}},{"id":"fb2fc252-dcea-4103-820f-6921ead99241","block_type":"box","text":"4","page_number":195,"box":{"x":143,"y":840,"width":4,"height":5}},{"id":"6516d2b0-7691-4189-bc25-f5b668e5c3fc","block_type":"box","text":"Our regional voting guidelines reflect these different market standards and norms. Depending on the market, generally","page_number":195,"box":{"x":170,"y":840,"width":702,"height":10}},{"id":"a9de7b68-37fb-421c-9c98-ad1ce355b343","block_type":"box","text":"accepted practice is informed by corporate law, market regulation, best practices, and industry initiatives, amongst other","page_number":195,"box":{"x":170,"y":853,"width":712,"height":10}},{"id":"f6acd2bd-333c-4c51-b0ea-c2f4364bf01b","block_type":"box","text":"factors. BIS carries out engagement with companies, executes proxy votes, and conducts vote operations (including","page_number":195,"box":{"x":170,"y":866,"width":688,"height":10}},{"id":"cb5478bf-38f6-45ec-9cc4-1dccfc85aea2","block_type":"box","text":"maintaining records of votes cast) in a manner consistent with the relevant regional voting guidelines.","page_number":195,"box":{"x":170,"y":879,"width":600,"height":10}},{"id":"8576c6b6-71ac-406c-8001-a239dad1a84f","block_type":"box","text":"BlackRock Investment Stewardship","page_number":195,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"15eccb3b-bc9f-407e-85f4-ad435b79c403","block_type":"box","text":"Global Principles |","page_number":195,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"e3059b83-a38c-48df-928b-b30b0e16b0c5","block_type":"box","text":"5","page_number":195,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"81612193-6162-43c9-9ed5-123bc369cf4d","block_type":"box","text":"NM1026U-6033243-195/221","page_number":195,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"54e078b8-a248-4093-bf72-4d1472ca7a88","block_type":"box","text":"When casting vote decisions on behalf of clients on the election of directors, some of the factors that","page_number":196,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"0ba62c27-a966-46f9-82a9-ca38e54798e6","block_type":"box","text":"speak to the board’s effectiveness as a group include the relevance of individual directors’","page_number":196,"box":{"x":116,"y":102,"width":673,"height":13}},{"id":"ed1a7f37-897d-4d71-9cb7-3bd6aa3c6ba4","block_type":"box","text":"qualifications and skillsets, as well as directors’ capacity and other time commitments, and how these","page_number":196,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"420c3d4b-bded-421b-9c6b-f6dc74ba81be","block_type":"box","text":"factors may contribute to the company’s financial performance. We look to boards to establish formal","page_number":196,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"d2f6e568-5576-41a3-b1e8-f0efa55eefdc","block_type":"box","text":"and transparent processes for nominating directors that reflect the company’s long-term strategy and","page_number":196,"box":{"x":116,"y":149,"width":754,"height":12}},{"id":"dc5d2976-0fad-4274-97f0-b0632a678780","block_type":"box","text":"business model.","page_number":196,"box":{"x":117,"y":165,"width":125,"height":9}},{"id":"fe05b4cb-15fc-47ef-bb63-6f6a595d414b","block_type":"box","text":"In the section titled “Board quality and effectiveness” below, we provide more detail about our","page_number":196,"box":{"x":117,"y":193,"width":697,"height":12}},{"id":"59a69a88-323d-413b-963a-ab39716f399b","block_type":"box","text":"approach to board composition and how it underpins board effectiveness and long-term financial value","page_number":196,"box":{"x":116,"y":209,"width":766,"height":12}},{"id":"52f803ea-0995-4f16-9c13-10b93533595e","block_type":"box","text":"creation.","page_number":196,"box":{"x":116,"y":224,"width":69,"height":10}},{"id":"5d03e7d9-9c9d-4cda-9915-25293766aa1a","block_type":"box","text":"Regular accountability through director elections","page_number":196,"box":{"x":116,"y":253,"width":398,"height":12}},{"id":"6fe99206-ad75-45ad-ad07-6602b4c3237a","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":196,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"43b298b1-82ff-4b48-9f98-bf11840ad8b0","block_type":"box","text":"or concern about, the performance of the board in overseeing and advising management. To ensure","page_number":196,"box":{"x":116,"y":297,"width":749,"height":12}},{"id":"1a056caa-aa79-4253-97f8-312271857f2c","block_type":"box","text":"accountability for their decisions on behalf of shareholders, directors should stand for election on a","page_number":196,"box":{"x":116,"y":312,"width":736,"height":12}},{"id":"2913e765-5728-4076-a7b0-7d35e1d219ca","block_type":"box","text":"regular basis, ideally annually.","page_number":196,"box":{"x":117,"y":328,"width":223,"height":12}},{"id":"90da339a-b57e-4d1e-a022-70fa6d718ea3","block_type":"box","text":"5","page_number":196,"box":{"x":341,"y":328,"width":6,"height":6}},{"id":"7ef4deb8-f0e8-41ee-93f7-a85fc075e60a","block_type":"box","text":"Annual director elections allow shareholders to reaffirm their support","page_number":196,"box":{"x":347,"y":328,"width":517,"height":12}},{"id":"d3f8bd9e-e77a-46b0-b35f-39b05da61cab","block_type":"box","text":"for, or concerns about, board members’ decisions in a timely manner. When board members are not","page_number":196,"box":{"x":116,"y":343,"width":749,"height":12}},{"id":"28623d9a-54f6-4dd1-87c1-518a85a3de20","block_type":"box","text":"elected annually, we consider it good practice for boards to have a rotation policy to ensure that,","page_number":196,"box":{"x":116,"y":359,"width":719,"height":12}},{"id":"f1879cb4-bad1-4a8b-b2fa-5b23901bd7d3","block_type":"box","text":"through a board cycle, all directors have had their appointment re-confirmed, with a proportion of","page_number":196,"box":{"x":116,"y":374,"width":722,"height":12}},{"id":"02bdf645-10d8-4615-8b5b-37727eae56d0","block_type":"box","text":"directors being put forward for election at each shareholder meeting.","page_number":196,"box":{"x":116,"y":390,"width":513,"height":12}},{"id":"99e66b20-46a9-4ebf-ba68-cff3031a2b64","block_type":"box","text":"Board quality and effectiveness","page_number":196,"box":{"x":116,"y":418,"width":258,"height":12}},{"id":"17375e64-3c39-4191-ad46-e857c34979a8","block_type":"box","text":"Regular director elections also give boards the opportunity to adjust their composition in an orderly way","page_number":196,"box":{"x":117,"y":447,"width":770,"height":12}},{"id":"531d196f-c0c0-4603-9ec8-adc2b27b4438","block_type":"box","text":"to reflect developments in the company’s strategy and the market environment. In our view, it is","page_number":196,"box":{"x":116,"y":462,"width":714,"height":12}},{"id":"ec0428d0-a5de-4f54-a27e-67912bc8b282","block_type":"box","text":"beneficial for new directors to be brought onto the board periodically to refresh the group’s thinking,","page_number":196,"box":{"x":117,"y":478,"width":741,"height":12}},{"id":"ddaad5fd-1646-425a-b0cb-710ae03a5f9b","block_type":"box","text":"while supporting both continuity and appropriate succession planning. We consider the average overall","page_number":196,"box":{"x":116,"y":493,"width":768,"height":12}},{"id":"051b8345-ab20-43ec-902d-3d8ad5881a88","block_type":"box","text":"tenure of the board and seek a balance between the knowledge and experience of longer-serving","page_number":196,"box":{"x":116,"y":509,"width":728,"height":12}},{"id":"d934651f-518f-4ea4-aea7-44a3fbbac23a","block_type":"box","text":"directors and the fresh perspectives of directors who joined more recently.","page_number":196,"box":{"x":116,"y":524,"width":556,"height":12}},{"id":"16db3bff-26ab-42d2-965b-3fcff01e4a3f","block_type":"box","text":"We appreciate when companies regularly review and assess how directors nominated for election","page_number":196,"box":{"x":116,"y":553,"width":731,"height":12}},{"id":"3b20e056-bfd9-4b69-83a9-94eedc40eef5","block_type":"box","text":"contribute to the effectiveness of the board. In our view, the company’s assessment should consider a","page_number":196,"box":{"x":116,"y":568,"width":763,"height":12}},{"id":"f9f6bbf2-8785-4e73-8a03-b987c4b847cf","block_type":"box","text":"number of factors, including each director’s independence and time commitments, as well as the","page_number":196,"box":{"x":117,"y":584,"width":720,"height":12}},{"id":"8286aff6-4598-4275-9d37-a0a50852b6a4","block_type":"box","text":"breadth and relevance of director experiences and skillsets, and how these collectively contribute to","page_number":196,"box":{"x":117,"y":599,"width":744,"height":13}},{"id":"af647ef3-00d3-4708-bfbc-1f14c125bf9f","block_type":"box","text":"the board’s effectiveness in advising and overseeing management in delivering long-term financial","page_number":196,"box":{"x":116,"y":615,"width":734,"height":12}},{"id":"a3d9c777-d2aa-46a7-aff5-2a3ab5165d84","block_type":"box","text":"returns.","page_number":196,"box":{"x":117,"y":631,"width":60,"height":9}},{"id":"5a28ea19-b462-4baf-a3e3-33356ea39916","block_type":"box","text":"Director independence","page_number":196,"box":{"x":116,"y":659,"width":187,"height":12}},{"id":"39521606-acfe-4699-8021-b2b28e5bc9fa","block_type":"box","text":"Director independence – from management, significant shareholders, or other related parties – is a","page_number":196,"box":{"x":117,"y":688,"width":733,"height":12}},{"id":"045c71e1-3600-4b62-9284-a13e985fd1ed","block_type":"box","text":"central tenet of sound corporate governance across markets.","page_number":196,"box":{"x":116,"y":703,"width":452,"height":12}},{"id":"aa5e5a6f-ba4f-4650-9694-ff956a83b5ec","block_type":"box","text":"6","page_number":196,"box":{"x":570,"y":703,"width":5,"height":6}},{"id":"17b9c66d-f892-4479-8257-088f144da542","block_type":"box","text":"We look to boards to have a sufficient","page_number":196,"box":{"x":581,"y":703,"width":280,"height":10}},{"id":"a6ec3641-39cd-446f-bb5a-c8f8158335c2","block_type":"box","text":"number of independent directors, free from conflicts of interest or undue influence, to ensure objectivity","page_number":196,"box":{"x":117,"y":719,"width":763,"height":12}},{"id":"8ea86114-20e6-4b33-9aa9-0bc8ba07d28c","block_type":"box","text":"in the decision-making of the board and its ability to oversee management. We generally consider it","page_number":196,"box":{"x":117,"y":734,"width":738,"height":12}},{"id":"8a917f26-93d2-4751-ac4d-397ac6a1399c","block_type":"box","text":"good practice for independent directors to make a majority of the board, or in the case of controlled","page_number":196,"box":{"x":116,"y":750,"width":734,"height":12}},{"id":"131a1d7c-3a27-43ca-83c5-f6ff43a1d91e","block_type":"box","text":"companies, at least one-third.","page_number":196,"box":{"x":116,"y":765,"width":219,"height":12}},{"id":"d0a731bc-c9f6-4b74-88c2-4a13c08b02c7","block_type":"box","text":"Common impediments to independence may include but are not limited to:","page_number":196,"box":{"x":117,"y":794,"width":551,"height":12}},{"id":"0c288090-6ca5-46e6-b038-0e7654abf7d1","block_type":"box","text":"• Current or recent employment at the company or a subsidiary","page_number":196,"box":{"x":117,"y":816,"width":490,"height":12}},{"id":"7f265c30-8e29-4671-af3f-02a51adce02d","block_type":"box","text":"5","page_number":196,"box":{"x":143,"y":841,"width":4,"height":5}},{"id":"8089ff02-3a84-45c8-8006-dd119e5ee795","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":196,"box":{"x":171,"y":841,"width":703,"height":9}},{"id":"ae1a730c-2ae7-4372-9d8d-eaa22581671b","block_type":"box","text":"regulation or voluntary best practice.","page_number":196,"box":{"x":170,"y":854,"width":215,"height":9}},{"id":"5a7edd53-e9cc-405b-ab93-3f8091aa3f83","block_type":"box","text":"6","page_number":196,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"dac62e4a-7027-4d50-831a-70a0019469f9","block_type":"box","text":"For example, please see: Tokyo Stock Exchange, “Japan’s Corporate Governance Code,” June 11, 2021; Financial","page_number":196,"box":{"x":171,"y":867,"width":683,"height":9}},{"id":"99b3f853-e248-49af-a9d8-b649a0e8daf3","block_type":"box","text":"Reporting Council, “UK Corporate Governance Code,” January 2024, accessed in December 2025.","page_number":196,"box":{"x":171,"y":880,"width":587,"height":9}},{"id":"97c6a6de-da82-4e6b-b8a4-03926a3de5c7","block_type":"box","text":"BlackRock Investment Stewardship","page_number":196,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"7500d115-abd8-4279-b374-1ae9a9d972b0","block_type":"box","text":"Global Principles |","page_number":196,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"7ae8de67-6153-4db1-a85e-c11a25a4dfcc","block_type":"box","text":"6","page_number":196,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"274eecbe-8992-4afb-b7c2-03173d31969c","block_type":"box","text":"NM1026U-6033243-196/221","page_number":196,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"2a0dad15-18bd-43ce-b37a-b12b6f9e0a4c","block_type":"box","text":"• Being, or representing, a shareholder with a substantial shareholding in the company","page_number":197,"box":{"x":117,"y":87,"width":668,"height":12}},{"id":"ee2a7198-06b1-4592-8942-95b726fb2046","block_type":"box","text":"• Interlocking directorates","page_number":197,"box":{"x":117,"y":110,"width":216,"height":12}},{"id":"d1aac057-cd18-43d1-86c0-c79b93cbacbc","block_type":"box","text":"• Having any other interest, business, or other relationship which could, or could reasonably be","page_number":197,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"9317f7aa-ed2f-44a3-abcd-0392c6a165ff","block_type":"box","text":"perceived to, materially interfere with a director’s ability to act in the best interests of the company","page_number":197,"box":{"x":150,"y":149,"width":729,"height":12}},{"id":"ac8626b1-bcec-4b77-bb03-3cbf8921c5bf","block_type":"box","text":"and shareholders","page_number":197,"box":{"x":150,"y":165,"width":134,"height":9}},{"id":"fb2db63b-39b3-42a1-9d5f-ba31bdb4cc17","block_type":"box","text":"In our experience, boards are most effective at overseeing and advising management when there is a","page_number":197,"box":{"x":117,"y":196,"width":759,"height":12}},{"id":"76cca468-4944-4577-99c0-55dc8858f7d6","block_type":"box","text":"senior, independent board leader. This director may chair the board, or, where the chair is also the","page_number":197,"box":{"x":116,"y":211,"width":736,"height":12}},{"id":"fd55e84a-1a74-4521-bffc-d2b5fd2aff0a","block_type":"box","text":"CEO (or is otherwise not independent), be designated as a lead independent director. The role of this","page_number":197,"box":{"x":117,"y":227,"width":757,"height":12}},{"id":"9e923d35-3029-485b-96ee-c8fa68b1f682","block_type":"box","text":"director is to support independent board members in fulfilling their oversight responsibilities effectively","page_number":197,"box":{"x":116,"y":242,"width":760,"height":12}},{"id":"4ff81e3e-5d1b-4118-8a5f-7eb93123c7c2","block_type":"box","text":"by shaping the agenda, ensuring adequate information is provided to the board, and encouraging","page_number":197,"box":{"x":117,"y":258,"width":726,"height":12}},{"id":"8f197180-4386-47ab-b259-581c1d6b6a4c","block_type":"box","text":"independent director participation in board deliberations. We appreciate when the lead independent","page_number":197,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"23a072d6-262d-4aec-9875-b136c0926fea","block_type":"box","text":"director or another appropriate director is available to meet with shareholders to explain and","page_number":197,"box":{"x":116,"y":289,"width":687,"height":12}},{"id":"4c590783-4e41-4bc8-b9ef-6622ab9ff6bc","block_type":"box","text":"contextualize a company’s approach as a situation warrants.","page_number":197,"box":{"x":116,"y":304,"width":454,"height":12}},{"id":"363e418a-7ca4-4ef5-8650-5a6df1019263","block_type":"box","text":"Boards may face matters that could involve conflicts of interest for executives or affiliated directors, or","page_number":197,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"beef24b8-404c-4f2d-a486-25ce4fcdb206","block_type":"box","text":"that require additional focus. It is our view that objective oversight of such matters is best achieved","page_number":197,"box":{"x":116,"y":351,"width":736,"height":12}},{"id":"d56ff74d-6395-4d36-bd22-43e993b1806e","block_type":"box","text":"when the board forms committees with a majority of independent directors, depending on market","page_number":197,"box":{"x":116,"y":366,"width":723,"height":12}},{"id":"b637feee-17aa-4a88-800b-cba196cd81fe","block_type":"box","text":"norms and a company’s ownership structure. In many markets, these committees of the board","page_number":197,"box":{"x":117,"y":382,"width":704,"height":12}},{"id":"1dcfba0e-041e-4c41-9662-4c142944047a","block_type":"box","text":"specialize in audit, director nominations, and compensation matters, among others. An ad hoc","page_number":197,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"4ba04f7a-a4dc-4149-939e-ab5b4b8fd0dd","block_type":"box","text":"committee might also be formed to decide on a special transaction, particularly one involving a related","page_number":197,"box":{"x":116,"y":413,"width":762,"height":12}},{"id":"6bb12f25-4954-49ab-b7ec-27b3b98caf1a","block_type":"box","text":"party, or to investigate a significant adverse event.","page_number":197,"box":{"x":117,"y":428,"width":378,"height":12}},{"id":"9199a2e5-0dd2-447d-8f9a-506370e68d4b","block_type":"box","text":"Sufficient capacity","page_number":197,"box":{"x":117,"y":459,"width":152,"height":12}},{"id":"a4c54efc-ff7a-4b67-9a54-c15033c92e00","block_type":"box","text":"As the role and expectations of a director are increasingly demanding, directors must be able to","page_number":197,"box":{"x":116,"y":490,"width":715,"height":12}},{"id":"ce9982bd-ad48-4440-8e82-b0a527f6161c","block_type":"box","text":"commit an appropriate amount of time to board and committee matters. It is important that directors","page_number":197,"box":{"x":116,"y":506,"width":743,"height":12}},{"id":"3dec001a-0ca8-472b-b82b-b51f8d49457d","block_type":"box","text":"have the capacity to meet all of their responsibilities – including when there are unforeseen events –","page_number":197,"box":{"x":117,"y":521,"width":747,"height":12}},{"id":"f1fca655-2a5b-4e15-9c8f-b5bf630347ff","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":197,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"e5aad372-77a5-4bb6-a49c-41b57206a4a4","block_type":"box","text":"would impair their ability to fulfill their duties.","page_number":197,"box":{"x":116,"y":552,"width":333,"height":12}},{"id":"bd278213-cd72-4e99-a031-32d8894d7f61","block_type":"box","text":"Board composition","page_number":197,"box":{"x":116,"y":583,"width":158,"height":12}},{"id":"5b762739-96ea-4458-9ff7-18bfc0bb3870","block_type":"box","text":"In assessing board composition, we take into account a company’s board size, business model,","page_number":197,"box":{"x":117,"y":614,"width":714,"height":12}},{"id":"a4d3deb5-bcb6-4708-9498-914ef65247b5","block_type":"box","text":"strategy, market capitalization, and ownership structure, as well as the market in which the company","page_number":197,"box":{"x":116,"y":630,"width":750,"height":12}},{"id":"6f8bfc95-5294-4fb9-8cda-f648b8e86a4a","block_type":"box","text":"operates. We find it helpful when companies explain how their approach to board composition supports","page_number":197,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"40f5e29f-adb9-4397-ac67-236d23e6c9f8","block_type":"box","text":"the company’s governance practices.","page_number":197,"box":{"x":116,"y":661,"width":276,"height":12}},{"id":"9532a752-23c7-4fd1-9f67-7c53dda9dbb0","block_type":"box","text":"When nominating directors to the board, we look to companies to provide sufficient information on the","page_number":197,"box":{"x":116,"y":692,"width":754,"height":12}},{"id":"dd8332ab-ead7-44ac-b5c7-12797fb1fb91","block_type":"box","text":"individual candidates so that shareholders can assess the capabilities and suitability of each individual","page_number":197,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"865585c7-5a0b-48b0-98f7-174ec8730142","block_type":"box","text":"nominee and their fit within overall board composition. These disclosures should explain how the","page_number":197,"box":{"x":117,"y":723,"width":715,"height":12}},{"id":"86758b1a-93cf-47b6-9f3d-4675defe3661","block_type":"box","text":"collective experience and expertise of the board, as well as the particular skillsets of individual","page_number":197,"box":{"x":116,"y":738,"width":697,"height":12}},{"id":"3991cc25-97ce-40bd-8868-c8c0f62add57","block_type":"box","text":"directors, aligns with the company’s long-term strategy. Highly qualified, engaged directors with","page_number":197,"box":{"x":116,"y":754,"width":707,"height":12}},{"id":"9bc35c03-e7df-4fac-a483-942df4f5548b","block_type":"box","text":"professional characteristics relevant to a company’s business and strategy enhance the ability of the","page_number":197,"box":{"x":117,"y":769,"width":744,"height":12}},{"id":"18677239-63ad-49a7-b787-3905977de54c","block_type":"box","text":"board to add value and be the voice of shareholders in board discussions.","page_number":197,"box":{"x":117,"y":785,"width":547,"height":9}},{"id":"bb6018f9-c204-42f0-b40d-5edeb8c340d1","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":197,"box":{"x":117,"y":816,"width":750,"height":12}},{"id":"b7216710-1eef-4842-985f-2f8b2426113b","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":197,"box":{"x":117,"y":831,"width":659,"height":12}},{"id":"35808b72-8ec1-472a-b59a-aed6ded03aba","block_type":"box","text":"responsibilities to advise and oversee management. We note that in many markets, policymakers have","page_number":197,"box":{"x":117,"y":847,"width":768,"height":12}},{"id":"ea57706b-92f7-4d29-9729-3df1ff2a889c","block_type":"box","text":"set board gender diversity goals which we may discuss with companies, particularly if there is a risk","page_number":197,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"bec15282-29e0-4cd3-828d-df1735e47e64","block_type":"box","text":"their board composition may be misaligned.","page_number":197,"box":{"x":116,"y":878,"width":329,"height":12}},{"id":"38e27c33-ff80-4fcf-b89f-1fad59f5b37b","block_type":"box","text":"BlackRock Investment Stewardship","page_number":197,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"64935f8c-dca3-4286-b5af-607e1bca85e8","block_type":"box","text":"Global Principles |","page_number":197,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"52a37dab-77db-47bd-a32c-85cb8258d760","block_type":"box","text":"7","page_number":197,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"7b9d795c-e918-4f2e-91d3-646bf8c558fc","block_type":"box","text":"NM1026U-6033243-197/221","page_number":197,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"c05a4b3b-e953-4072-a731-5e98bc7cb14b","block_type":"box","text":"Auditors and audit-related issues","page_number":198,"box":{"x":366,"y":87,"width":272,"height":10}},{"id":"bab834cf-ce5e-4ca5-9941-15fc55791388","block_type":"box","text":"BIS recognizes the critical importance of financial statements to provide a complete and accurate","page_number":198,"box":{"x":117,"y":117,"width":725,"height":12}},{"id":"45f1ee00-0c49-4d2e-946a-378748d99409","block_type":"box","text":"portrayal of a company’s financial condition. Accordingly, we look for the assumptions made by","page_number":198,"box":{"x":117,"y":133,"width":709,"height":12}},{"id":"5e2c00a3-39d9-4c62-9683-54fb6e6fc1f0","block_type":"box","text":"management, and reviewed by the auditor in preparing the financial statements, to be reasonable and","page_number":198,"box":{"x":117,"y":148,"width":760,"height":12}},{"id":"53db62f3-11c6-40fb-b56b-bfe8087142b1","block_type":"box","text":"justified.","page_number":198,"box":{"x":115,"y":164,"width":67,"height":12}},{"id":"024e891b-04b0-40ec-8f18-354c341bb854","block_type":"box","text":"We view the audit committee, or its equivalent, as responsible for overseeing the management of the","page_number":198,"box":{"x":116,"y":194,"width":754,"height":12}},{"id":"f4ff5667-1ba6-4b11-bea1-e02a9cce1677","block_type":"box","text":"independent auditor and the internal audit function at a company. The committee plays an important","page_number":198,"box":{"x":117,"y":210,"width":746,"height":12}},{"id":"23730f7c-10f8-4bbf-bf9b-3b7c373f9c2d","block_type":"box","text":"role in a company’s financial reporting system by providing independent oversight of the accounts,","page_number":198,"box":{"x":117,"y":225,"width":733,"height":12}},{"id":"25aafa2b-014d-45f7-9aef-e46d1310644c","block_type":"box","text":"material financial, and, where appropriate to the jurisdiction, non-financial information and internal","page_number":198,"box":{"x":117,"y":241,"width":728,"height":12}},{"id":"c8d40f67-7e5c-4f2f-8598-a6f2c18fd633","block_type":"box","text":"control frameworks. Moreover, in the absence of a dedicated risk committee, these committees can","page_number":198,"box":{"x":116,"y":256,"width":743,"height":11}},{"id":"37712385-bde2-4c48-8001-46acce9b14d0","block_type":"box","text":"provide oversight of Enterprise Risk Management systems.","page_number":198,"box":{"x":117,"y":272,"width":437,"height":12}},{"id":"3ee9786d-b918-41d6-bac5-6bdd7cbd32b4","block_type":"box","text":"7","page_number":198,"box":{"x":556,"y":272,"width":5,"height":6}},{"id":"aeddbafd-a510-437c-b7fe-ca14ec567ba9","block_type":"box","text":"In our view, effective audit committee","page_number":198,"box":{"x":562,"y":272,"width":286,"height":11}},{"id":"87f29c0f-f913-4a36-86d2-57cc50cc5504","block_type":"box","text":"oversight strengthens the quality and reliability of a company’s financial statements and provides an","page_number":198,"box":{"x":116,"y":287,"width":745,"height":12}},{"id":"165cd09f-4868-4631-bc8e-27ac8c4b59c0","block_type":"box","text":"important level of reassurance to shareholders.","page_number":198,"box":{"x":117,"y":303,"width":354,"height":12}},{"id":"75bc93c7-a5e7-48d2-ad1c-097a9999830e","block_type":"box","text":"We look to audit committees, or their equivalent, to have clearly articulated charters that set out their","page_number":198,"box":{"x":116,"y":333,"width":750,"height":12}},{"id":"5e3e2227-bfeb-41c0-a8bf-dce818ec23d2","block_type":"box","text":"responsibilities. Additionally, having a rotation plan can periodically refresh the committee membership","page_number":198,"box":{"x":117,"y":349,"width":765,"height":12}},{"id":"2a8262e8-0e45-44c1-87da-ac424d1dc6d9","block_type":"box","text":"and introduce new perspectives. We recognize that audit committees will rely on management, internal","page_number":198,"box":{"x":116,"y":364,"width":769,"height":12}},{"id":"cc88b553-af48-46c2-a722-66970a5c58b4","block_type":"box","text":"audit, and the independent auditor to fulfill their responsibilities. However, we look to committee","page_number":198,"box":{"x":116,"y":380,"width":712,"height":12}},{"id":"e98daa18-f9c3-4bbb-a576-d7654d25242b","block_type":"box","text":"members to demonstrate they have relevant expertise to monitor and oversee the audit process and","page_number":198,"box":{"x":117,"y":395,"width":749,"height":12}},{"id":"257a9e8a-931d-4015-87e5-899fce34e229","block_type":"box","text":"related activities.","page_number":198,"box":{"x":117,"y":411,"width":129,"height":9}},{"id":"ef6b96f6-71d3-4d0b-8f3f-04b39c88eec6","block_type":"box","text":"We take particular note of unexplained changes in reporting methodology, cases involving significant","page_number":198,"box":{"x":116,"y":441,"width":753,"height":12}},{"id":"969ce4b5-3ba0-4a8f-8cea-83209f45166e","block_type":"box","text":"financial restatements, or ad hoc notifications of material financial weakness. In this respect, we look to","page_number":198,"box":{"x":116,"y":457,"width":770,"height":11}},{"id":"7fc067b6-acd9-4bcd-81eb-7d74cc790065","block_type":"box","text":"audit committees to provide timely disclosure on the remediation of key and critical audit matters","page_number":198,"box":{"x":116,"y":472,"width":720,"height":12}},{"id":"02237815-b082-4f04-86a7-d3afb7919e3d","block_type":"box","text":"identified either by the external auditor or internal audit function.","page_number":198,"box":{"x":117,"y":488,"width":478,"height":12}},{"id":"16a3e41a-2c85-4be1-814f-71e3c5cb310d","block_type":"box","text":"The integrity of financial statements depends on the auditor being free of any impediments that could","page_number":198,"box":{"x":116,"y":518,"width":754,"height":12}},{"id":"30dd0f05-14d3-4123-9b10-e0d225123ebb","block_type":"box","text":"compromise its ability to serve as an effective check on management. To that end, it is important that","page_number":198,"box":{"x":116,"y":533,"width":755,"height":12}},{"id":"f4e6684b-f1e8-409d-b7e5-ff31d8433528","block_type":"box","text":"auditors are, and are seen to be, independent. Where an audit firm provides services to the company","page_number":198,"box":{"x":116,"y":549,"width":756,"height":12}},{"id":"061426fa-cf62-4327-82eb-cf7517e01c6c","block_type":"box","text":"in addition to the audit, we look for the fees","page_number":198,"box":{"x":117,"y":564,"width":323,"height":12}},{"id":"64440d00-336f-4176-b6d2-e48d83c3599f","block_type":"box","text":"earned to be disclosed and explained. We look for audit","page_number":198,"box":{"x":441,"y":564,"width":419,"height":12}},{"id":"f3b671b9-8449-4aa2-b4f3-0d2f5888b1f2","block_type":"box","text":"committees to have in place a procedure for assessing the independence of the auditor and the quality","page_number":198,"box":{"x":116,"y":580,"width":767,"height":12}},{"id":"318b01ee-d657-4854-9e2d-85b11e5c15f6","block_type":"box","text":"of the external audit process on an annual basis.","page_number":198,"box":{"x":116,"y":595,"width":366,"height":12}},{"id":"fa13a6d8-d01d-4b7f-b3d2-4f6280218246","block_type":"box","text":"Comprehensive disclosure provides investors with an understanding of the company’s long-term","page_number":198,"box":{"x":117,"y":626,"width":719,"height":12}},{"id":"8bb3ef28-50dc-4c62-9291-b7fbac276325","block_type":"box","text":"operational risk management practices and, more broadly, the quality of the board’s oversight. We look","page_number":198,"box":{"x":116,"y":641,"width":770,"height":12}},{"id":"672c4adb-2383-44f0-804d-d333b0d94c6f","block_type":"box","text":"to the audit or risk committee to periodically review the company’s risk assessment and risk","page_number":198,"box":{"x":116,"y":657,"width":684,"height":12}},{"id":"411cb53d-f6af-4f59-b40c-43fd2b04a10c","block_type":"box","text":"management policies and the significant risks and exposures identified by management, the internal","page_number":198,"box":{"x":117,"y":672,"width":741,"height":12}},{"id":"aaa7cd00-0c67-4f67-a778-23eae90ba993","block_type":"box","text":"auditors or the independent auditors, and management’s steps to address them. In the absence of","page_number":198,"box":{"x":116,"y":688,"width":731,"height":12}},{"id":"d6473225-ddb4-4a0f-8130-cfb8b06717d3","block_type":"box","text":"detailed disclosures, we may conclude that companies are not adequately managing risk.","page_number":198,"box":{"x":116,"y":703,"width":662,"height":12}},{"id":"e49e4b0c-b5d2-4a05-ba38-8e7e57f55638","block_type":"box","text":"Capital structure, mergers, acquisitions, asset sales, and other special situations","page_number":198,"box":{"x":176,"y":741,"width":647,"height":12}},{"id":"fe0142dc-2c06-45f6-b19e-e5b8d94b3d1f","block_type":"box","text":"The capital structure of a company is critical to shareholders as it impacts the value of their investment","page_number":198,"box":{"x":116,"y":771,"width":761,"height":13}},{"id":"de15196c-0006-4fa2-bd10-86ab83fc9c63","block_type":"box","text":"and the priority of their interest in the company relative to that of other equity or debt investors.","page_number":198,"box":{"x":116,"y":787,"width":700,"height":12}},{"id":"dcebcb72-e07b-4d11-a3f1-612ac96a3293","block_type":"box","text":"Pre-emptive rights are a key protection for shareholders against the dilution of their interests.","page_number":198,"box":{"x":117,"y":802,"width":687,"height":13}},{"id":"fafedda8-8d7c-4928-bf44-8d6a4fac5c19","block_type":"box","text":"7","page_number":198,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"91e1a8bf-5586-47e2-9825-86134726ffba","block_type":"box","text":"Enterprise Risk Management is a process, effected by the entity’s board of directors, management, and other","page_number":198,"box":{"x":171,"y":828,"width":648,"height":9}},{"id":"e5f7a3d3-f26f-42e3-b7bf-2fe1d46fd978","block_type":"box","text":"personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the","page_number":198,"box":{"x":170,"y":840,"width":709,"height":10}},{"id":"0111e355-bf3c-4601-b0d8-06a26d81ddef","block_type":"box","text":"entity, and manage risk to be within the risk appetite, to provide reasonable assurance regarding the achievement of","page_number":198,"box":{"x":170,"y":853,"width":690,"height":10}},{"id":"1e33a592-24e9-42d8-8ede-436e9854284c","block_type":"box","text":"objectives. Please see: The Committee of Sponsoring Organizations of the Treadway Commission (COSO), “Enterprise","page_number":198,"box":{"x":170,"y":866,"width":710,"height":10}},{"id":"72619e16-69c7-4e60-8746-4f9f04065ba7","block_type":"box","text":"Risk Management,” 2023, accessed in December 2025.","page_number":198,"box":{"x":171,"y":879,"width":329,"height":10}},{"id":"71fe1caa-c4e1-4f4d-8711-f0edde4b611a","block_type":"box","text":"BlackRock Investment Stewardship","page_number":198,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"7db7a888-261a-4356-9633-b4c8a2196043","block_type":"box","text":"Global Principles |","page_number":198,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"c9262004-4deb-411d-96a6-e8f2d1984c11","block_type":"box","text":"8","page_number":198,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"d046068e-e98d-41a0-a58a-6776972d907a","block_type":"box","text":"NM1026U-6033243-198/221","page_number":198,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"72d4c8da-b019-4ada-9c16-64c115566a63","block_type":"box","text":"In principle, we have concerns with the creation of a share class with equivalent economic exposure","page_number":199,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"17e64912-a417-41b9-84fc-afcc433084b8","block_type":"box","text":"and differentiated voting rights. As a result, BIS generally supports bylaw amendments that introduce","page_number":199,"box":{"x":116,"y":102,"width":754,"height":13}},{"id":"4b8a70a5-e117-47e0-abf2-152ddf4696cc","block_type":"box","text":"the adoption of “one share, one vote” for registered shareholders.","page_number":199,"box":{"x":116,"y":118,"width":491,"height":12}},{"id":"b637ccc7-3e3b-478d-9921-c1e9cb61dc93","block_type":"box","text":"However, we recognize that in certain markets, at least for a period of time, companies may have a","page_number":199,"box":{"x":117,"y":149,"width":740,"height":13}},{"id":"a5fe2992-5dd4-43a4-809e-c4f14ae3aea3","block_type":"box","text":"valid reason for listing dual classes of shares with differentiated voting rights. In our view, such","page_number":199,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"f57ac237-4505-467e-808d-8a85af6c5fed","block_type":"box","text":"companies should review these share class structures on a regular basis or as company","page_number":199,"box":{"x":116,"y":181,"width":661,"height":12}},{"id":"cd863a4a-7db6-42be-9287-13fadb308146","block_type":"box","text":"circumstances change. Additionally, they should seek shareholder approval of their capital structure on","page_number":199,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"1e3be156-fb04-40fe-b23c-c8ca6c25c4a4","block_type":"box","text":"a periodic basis via a management proposal at the company’s shareholder meeting. The proposal","page_number":199,"box":{"x":116,"y":212,"width":731,"height":12}},{"id":"1e33efa1-e882-4c23-a0ea-a327051fcd90","block_type":"box","text":"should give unaffiliated shareholders the opportunity to affirm the current structure or establish","page_number":199,"box":{"x":116,"y":227,"width":705,"height":12}},{"id":"bd4504be-0c21-4990-98db-ca925513df82","block_type":"box","text":"mechanisms to end or phase out controlling structures at the appropriate time, while minimizing costs","page_number":199,"box":{"x":117,"y":243,"width":757,"height":12}},{"id":"79b86e22-fb40-4d98-a399-b5f4f05512da","block_type":"box","text":"to shareholders.","page_number":199,"box":{"x":116,"y":258,"width":125,"height":9}},{"id":"c4373923-e5cc-425c-924f-1732e85cdfde","block_type":"box","text":"In assessing mergers, asset sales, or other special situations, BIS’ primary consideration is the long","page_number":199,"box":{"x":117,"y":289,"width":745,"height":12}},{"id":"ce64b31f-25bc-44a8-904c-822f2fae4a25","block_type":"box","text":"term financial interests of our clients as shareholders, and so we will review any proposed transaction","page_number":199,"box":{"x":116,"y":305,"width":758,"height":12}},{"id":"418b4e07-e786-4f22-8c76-7d5356b9535f","block_type":"box","text":"with that objective in mind. Typically, we review factors such as whether the proposed transaction has","page_number":199,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"15da2ec3-a280-49e4-b336-cb063c3395b0","block_type":"box","text":"the unanimous support of the board and has been negotiated at arm’s length, and whether the board","page_number":199,"box":{"x":116,"y":336,"width":753,"height":12}},{"id":"958d38d3-cbf7-4a66-99f2-74ef27aed432","block_type":"box","text":"or management has clearly explained its economic and strategic rationale. We may also seek","page_number":199,"box":{"x":116,"y":351,"width":699,"height":12}},{"id":"9e34e2ed-632d-4c43-86b6-a961a9641840","block_type":"box","text":"reassurance from the board that the financial interests of executives and/or board members in a given","page_number":199,"box":{"x":117,"y":367,"width":761,"height":12}},{"id":"c6e368dd-eb4e-459c-8e45-48410ec34781","block_type":"box","text":"transaction have not adversely affected their ability to place shareholders’ interests before their own.","page_number":199,"box":{"x":116,"y":382,"width":750,"height":12}},{"id":"b2cea5a8-6250-4c3d-8d03-63d9d19171af","block_type":"box","text":"Where the transaction involves related parties, the recommendation to support should come from the","page_number":199,"box":{"x":116,"y":398,"width":755,"height":12}},{"id":"73c3d387-fc7d-448d-a368-1c08fb8b4ac1","block_type":"box","text":"independent directors, a best practice in most markets, and ideally, the terms should have been","page_number":199,"box":{"x":117,"y":414,"width":715,"height":11}},{"id":"cc50b36b-074e-4366-bf78-aa68def5b0a2","block_type":"box","text":"assessed through an independent appraisal process. In addition, it is good practice that it be approved","page_number":199,"box":{"x":116,"y":429,"width":766,"height":12}},{"id":"30f47702-7232-4959-a8ca-2beff0e3f5cf","block_type":"box","text":"by a separate vote of the non-conflicted parties.","page_number":199,"box":{"x":117,"y":444,"width":358,"height":12}},{"id":"f1e79971-1038-4258-8000-d200480d0b6a","block_type":"box","text":"As a matter of sound governance practice, shareholders should have a right to dispose of company","page_number":199,"box":{"x":116,"y":476,"width":743,"height":12}},{"id":"86f09292-8094-4d7a-893f-4dd9f1cb260d","block_type":"box","text":"shares in the open market without unnecessary restriction. In our view, corporate mechanisms","page_number":199,"box":{"x":116,"y":491,"width":705,"height":12}},{"id":"ebb5f781-7f8d-4856-ace0-cc449f9463c7","block_type":"box","text":"designed to limit shareholders’ ability to sell their shares are contrary to basic property rights. Such","page_number":199,"box":{"x":116,"y":507,"width":738,"height":12}},{"id":"591105fc-7ffe-4aa1-b206-0e7b8de801c6","block_type":"box","text":"mechanisms can serve to protect and entrench interests other than those of the shareholders. In our","page_number":199,"box":{"x":117,"y":522,"width":750,"height":12}},{"id":"4f622900-428b-43eb-be0c-228fad7b218f","block_type":"box","text":"view, shareholders are broadly capable of making decisions in their own best interests. We encourage","page_number":199,"box":{"x":116,"y":538,"width":764,"height":12}},{"id":"f7d4a3c4-7723-4039-b93e-8717ac8ac076","block_type":"box","text":"any shareholder rights plans proposed by a board to be subject to shareholder approval upon","page_number":199,"box":{"x":116,"y":553,"width":699,"height":12}},{"id":"0cb58a97-fd59-4bb8-95f7-3df2e4779c4c","block_type":"box","text":"introduction and periodically thereafter.","page_number":199,"box":{"x":117,"y":569,"width":293,"height":12}},{"id":"b9229b85-3a22-46d9-a259-fcbd3ea81912","block_type":"box","text":"Executive compensation and benefits","page_number":199,"box":{"x":350,"y":608,"width":305,"height":12}},{"id":"e7d629d7-61ce-403a-9983-c30461421b4d","block_type":"box","text":"Executive compensation is an important tool used by companies to support long-term financial value","page_number":199,"box":{"x":117,"y":640,"width":749,"height":12}},{"id":"f479b905-2ed2-416d-bde5-10201e19ad5d","block_type":"box","text":"creation. A well-structured compensation policy rewards the successful delivery of strategic,","page_number":199,"box":{"x":116,"y":655,"width":686,"height":12}},{"id":"0f885443-2247-43c8-90ef-96950aa26a23","block_type":"box","text":"operational, and/or financial goals; encourages an appropriate risk appetite; and aligns the interests of","page_number":199,"box":{"x":116,"y":671,"width":759,"height":12}},{"id":"613e50b9-b8e8-4934-bf58-d4f07707f621","block_type":"box","text":"shareholders and executives through equity ownership.","page_number":199,"box":{"x":116,"y":686,"width":410,"height":12}},{"id":"8ae8309c-305b-4fc7-b06c-1aeb9ae2cda4","block_type":"box","text":"8","page_number":199,"box":{"x":528,"y":686,"width":5,"height":6}},{"id":"d21f4fb0-6696-430f-a709-7adacf2c0fac","block_type":"box","text":"We look for a clear link between variable pay and operational and financial performance that support","page_number":199,"box":{"x":116,"y":717,"width":746,"height":13}},{"id":"587d48a2-1d90-44ae-9f86-8d8c2cf9cebc","block_type":"box","text":"sustained financial value creation for our clients as shareholders. We appreciate when performance","page_number":199,"box":{"x":116,"y":733,"width":739,"height":12}},{"id":"d6685eaf-0b8a-46f1-80f7-bac71029c5d9","block_type":"box","text":"targets incorporate ambitious objectives, and the corresponding metrics are aligned with the","page_number":199,"box":{"x":116,"y":749,"width":682,"height":12}},{"id":"184182d0-cbc4-4f3d-9d87-694ab84b4b81","block_type":"box","text":"company’s strategy and business model. BIS does not have a position on whether companies choose","page_number":199,"box":{"x":116,"y":764,"width":755,"height":12}},{"id":"f67e2ecb-31e6-4c0d-a3d6-ef521d1fb2d2","block_type":"box","text":"to use sustainability-related criteria in compensation structures, but, where they are included, we look","page_number":199,"box":{"x":116,"y":780,"width":752,"height":12}},{"id":"5bbc6cb2-a104-4b94-9537-b0d3f024d6c0","block_type":"box","text":"to companies to be as rigorous as they would be in setting other financial or operational targets. We","page_number":199,"box":{"x":116,"y":795,"width":740,"height":12}},{"id":"423ca6fc-3a95-4562-8b92-ab274c9848ce","block_type":"box","text":"appreciate when long-term incentive plans encompass timeframes that: 1) are distinct from annual","page_number":199,"box":{"x":116,"y":810,"width":730,"height":13}},{"id":"791b0b49-a2e7-47d4-b5c6-48fb9e0e1810","block_type":"box","text":"executive compensation structures and metrics, and 2) encourage the delivery of strong financial","page_number":199,"box":{"x":116,"y":826,"width":724,"height":12}},{"id":"5a86232a-ca2c-4cc7-a0cd-924bccb2bff2","block_type":"box","text":"results over a period of years.","page_number":199,"box":{"x":117,"y":841,"width":225,"height":13}},{"id":"f6c5be8d-09e7-47fc-bc48-7129ce27514d","block_type":"box","text":"8","page_number":199,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"a34bf8ef-f6de-4da4-94af-f47bd829f362","block_type":"box","text":"The terms “compensation,” “remuneration,” and “pay” are used interchangeably to describe the same concept in","page_number":199,"box":{"x":170,"y":867,"width":664,"height":9}},{"id":"7afecc08-a5d2-4925-99ec-37c236f5c6d5","block_type":"box","text":"different markets.","page_number":199,"box":{"x":170,"y":880,"width":102,"height":7}},{"id":"c5b99797-090a-410d-b172-35d703906337","block_type":"box","text":"BlackRock Investment Stewardship","page_number":199,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"7b1fe3e3-1f63-438d-8ae6-a5e99c7582f0","block_type":"box","text":"Global Principles |","page_number":199,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"421535f1-b241-4e26-bc2e-877056972910","block_type":"box","text":"9","page_number":199,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"57afdecc-fa82-41a0-8e92-86b732cc416c","block_type":"box","text":"NM1026U-6033243-199/221","page_number":199,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"4643df18-6d16-47f9-a851-2dfd695fbc82","block_type":"box","text":"We consider it best practice when board members responsible for designing and approving executive","page_number":200,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"96a86291-cf72-4992-bb84-022b0a6d2273","block_type":"box","text":"compensation carefully consider the company’s specific circumstances. Factors to consider may","page_number":200,"box":{"x":116,"y":102,"width":720,"height":13}},{"id":"696534df-613b-477a-a320-119f39416953","block_type":"box","text":"include the company’s risk profile, the environment it operates in, and the individuals the board is trying","page_number":200,"box":{"x":117,"y":118,"width":770,"height":12}},{"id":"7607002b-98bf-43e3-917e-7fb04261d9a1","block_type":"box","text":"to attract and retain. We look to the compensation committees to guard against contractual","page_number":200,"box":{"x":116,"y":134,"width":679,"height":12}},{"id":"a6d90cda-53be-454d-9e29-5f3f69723216","block_type":"box","text":"arrangements that would entitle executives to material compensation for early termination of their","page_number":200,"box":{"x":116,"y":149,"width":726,"height":12}},{"id":"2fccdd55-a6c5-473d-9df8-db47ad92641f","block_type":"box","text":"employment. Finally, we look for pension contributions and other deferred compensation arrangements","page_number":200,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"df547ad6-f52d-49db-b5a3-7a685811139a","block_type":"box","text":"to be reasonable in light of market practices or the company’s business and executive compensation","page_number":200,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"854b47ff-ce27-42e5-addc-a92673ca15f2","block_type":"box","text":"strategies.","page_number":200,"box":{"x":116,"y":196,"width":82,"height":12}},{"id":"e0b9c334-51b2-4702-9f23-de34f6dd9837","block_type":"box","text":"We are not supportive of one-off or special bonuses unrelated to company or individual performance.","page_number":200,"box":{"x":116,"y":227,"width":755,"height":12}},{"id":"0695f612-7d0a-4e67-bbc9-0569ce3573fb","block_type":"box","text":"Where discretion has been used by the compensation committee, or its equivalent, we appreciate","page_number":200,"box":{"x":116,"y":242,"width":730,"height":12}},{"id":"178267f2-6353-41a0-a161-6f044556edb7","block_type":"box","text":"disclosure relating to how and why the discretion was used, and how the adjusted outcome is aligned","page_number":200,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"589c61c6-003d-4f21-b7d9-f15b2e1caaa4","block_type":"box","text":"with the interests of shareholders. In addition, we acknowledge that the use of peer group evaluation","page_number":200,"box":{"x":116,"y":273,"width":751,"height":12}},{"id":"f088f60b-b789-4644-b101-cc87640c92af","block_type":"box","text":"by compensation committees can help ensure competitive pay. However, we encourage companies to","page_number":200,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"05ebfe5a-01ea-4794-a5eb-d69cc732148f","block_type":"box","text":"clearly explain how compensation outcomes have rewarded performance rather than solely base","page_number":200,"box":{"x":116,"y":304,"width":724,"height":12}},{"id":"d8a9bd47-19d9-48d6-9349-5748e33fd680","block_type":"box","text":"increases in total compensation on peer benchmarking.","page_number":200,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"4fe981ea-5f5a-42df-96c6-b41a0e8f3230","block_type":"box","text":"We consider the inclusion of building clawback provisions into incentive plans as good practice. Such","page_number":200,"box":{"x":116,"y":351,"width":755,"height":12}},{"id":"c8e1de08-4e68-407f-8346-98ac9c58b6d9","block_type":"box","text":"provisions could require executives to forgo awards when compensation was based on faulty financial","page_number":200,"box":{"x":117,"y":366,"width":760,"height":12}},{"id":"e69528c0-39c1-4abc-844b-5f231ccb5d61","block_type":"box","text":"statements or deceptive business practices, or when their behavior caused material financial harm to","page_number":200,"box":{"x":116,"y":382,"width":754,"height":12}},{"id":"4f66ce2a-442b-4a23-8611-fddb82c98bbb","block_type":"box","text":"shareholders, material reputational risk to the company, or resulted in a criminal investigation.","page_number":200,"box":{"x":116,"y":397,"width":701,"height":12}},{"id":"512e6098-644d-4c84-a924-1f4f2a060ef8","block_type":"box","text":"In our view, non-executive directors should be compensated in a manner that is commensurate with","page_number":200,"box":{"x":117,"y":428,"width":745,"height":12}},{"id":"b35ad64b-69c1-4f22-8187-5e3353b979d1","block_type":"box","text":"the time and effort expended in fulfilling their professional responsibilities. Additionally, these","page_number":200,"box":{"x":116,"y":444,"width":691,"height":12}},{"id":"3afbaa35-96fa-46dd-b312-012e8819a648","block_type":"box","text":"compensation arrangements should not risk compromising directors’ independence or aligning their","page_number":200,"box":{"x":116,"y":459,"width":743,"height":12}},{"id":"ad8ce9b2-8d1b-48c8-9426-bb434877642e","block_type":"box","text":"interests too closely with those of the management, whom they are charged with overseeing.","page_number":200,"box":{"x":117,"y":475,"width":693,"height":12}},{"id":"90857e4e-d1fe-4f0c-ac54-da758a4256cb","block_type":"box","text":"When assessing compensation proposals, BIS reviews companies’ disclosures to determine whether","page_number":200,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"efd2344b-1d30-4150-bc29-0567d4c89a7b","block_type":"box","text":"the board’s approach to executive compensation is rigorous in light of the company’s stated long-term","page_number":200,"box":{"x":116,"y":521,"width":760,"height":12}},{"id":"0096a8a3-9332-467b-9c30-9c5459ff89d9","block_type":"box","text":"corporate strategy and specific circumstances, as well as local market and policy developments.","page_number":200,"box":{"x":116,"y":537,"width":719,"height":12}},{"id":"25397125-36a8-41a7-8efa-4e3f84e574df","block_type":"box","text":"When our analysis indicates that executive compensation is misaligned with company performance,","page_number":200,"box":{"x":116,"y":568,"width":745,"height":12}},{"id":"7641f9b9-0a40-47ca-ae90-5d8877236210","block_type":"box","text":"BIS may not support management’s proposals to approve compensation, where they are on the","page_number":200,"box":{"x":117,"y":583,"width":715,"height":12}},{"id":"04d29039-5902-48e1-9cff-c46429e8f72f","block_type":"box","text":"agenda. We may also not support members of the compensation committee or equivalent board","page_number":200,"box":{"x":116,"y":599,"width":719,"height":12}},{"id":"c2e37f9a-afa9-42c8-bfbb-90189bde6fae","block_type":"box","text":"members for poor compensation practices or structures.","page_number":200,"box":{"x":117,"y":614,"width":421,"height":12}},{"id":"24fab551-4529-4188-b09d-a32e9debaaba","block_type":"box","text":"Shareholder protections and other corporate governance matters","page_number":200,"box":{"x":239,"y":653,"width":527,"height":12}},{"id":"d15df4ac-0c68-4787-9864-4a358a7c3b3d","block_type":"box","text":"Corporate form","page_number":200,"box":{"x":117,"y":684,"width":121,"height":12}},{"id":"592c1299-9997-4ed5-9674-72451d998c4a","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":200,"box":{"x":117,"y":715,"width":760,"height":12}},{"id":"e3fa834f-2683-4c59-9bf3-3912cc751054","block_type":"box","text":"given the company’s purpose and business model.","page_number":200,"box":{"x":116,"y":731,"width":376,"height":12}},{"id":"5a90be20-437e-492f-8234-c26a7fbca742","block_type":"box","text":"9","page_number":200,"box":{"x":494,"y":731,"width":5,"height":6}},{"id":"6106949b-f626-47f1-a826-f3233c089607","block_type":"box","text":"We look to companies proposing to change their","page_number":200,"box":{"x":504,"y":731,"width":361,"height":12}},{"id":"f2808ef7-3051-42e9-981b-df2ecccfd177","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":200,"box":{"x":116,"y":746,"width":726,"height":12}},{"id":"239eab4c-1de7-4c57-b21b-44e697164f10","block_type":"box","text":"already required to do so under applicable law. We appreciate when supporting documentation from","page_number":200,"box":{"x":116,"y":761,"width":742,"height":13}},{"id":"b9d56b3f-45e0-49b1-b30b-171b0896e5c6","block_type":"box","text":"companies or shareholders proposing to alter the corporate form clearly explains how the interests of","page_number":200,"box":{"x":116,"y":777,"width":751,"height":12}},{"id":"bfe2d5c8-33d6-4d8a-9fed-6f4c78486de7","block_type":"box","text":"shareholders and different stakeholders would be impacted as well as the accountability and voting","page_number":200,"box":{"x":116,"y":792,"width":735,"height":13}},{"id":"44ead78a-9b98-4f6d-9cd2-2cc49a7ceb1b","block_type":"box","text":"mechanisms that would be available to shareholders. We generally support management proposals if","page_number":200,"box":{"x":117,"y":808,"width":752,"height":12}},{"id":"014427e4-6dcf-4b50-b837-3c031312d716","block_type":"box","text":"our analysis indicates that shareholders’ financial interests are adequately protected. Corporate form","page_number":200,"box":{"x":116,"y":823,"width":746,"height":13}},{"id":"e6a74959-8434-4355-a177-c1cd4eae4f39","block_type":"box","text":"shareholder proposals are evaluated on a case-by-case basis.","page_number":200,"box":{"x":116,"y":839,"width":468,"height":12}},{"id":"5373e1be-67dc-408d-9ed6-1d5ee2c9daf2","block_type":"box","text":"9","page_number":200,"box":{"x":143,"y":880,"width":4,"height":5}},{"id":"97a86f6b-0a77-49cf-87ff-f1957a978b39","block_type":"box","text":"Corporate form refers to the legal structure by which a business is organized.","page_number":200,"box":{"x":170,"y":880,"width":457,"height":9}},{"id":"beb58974-485b-436c-89c6-a23491420564","block_type":"box","text":"BlackRock Investment Stewardship","page_number":200,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"6202d600-6e0b-454a-b6a6-97b1ae57cf8f","block_type":"box","text":"Global Principles |","page_number":200,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"1cfc93ef-db17-4b51-a464-c97958edd1db","block_type":"box","text":"10","page_number":200,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"cfa89b69-9eb1-4ded-bbcd-882e7d224e2e","block_type":"box","text":"NM1026U-6033243-200/221","page_number":200,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"2c9c8935-ab72-4063-9a2d-0a4196f990ed","block_type":"box","text":"Shareholder proposals","page_number":201,"box":{"x":409,"y":87,"width":187,"height":12}},{"id":"143e2eee-3291-4e0f-958e-4724104db947","block_type":"box","text":"In most markets, shareholders can submit proposals to be voted on at a company’s shareholder","page_number":201,"box":{"x":117,"y":120,"width":717,"height":11}},{"id":"0ae325ec-1d3d-4136-bab2-10014ca0e061","block_type":"box","text":"meeting, as long as certain requirements are met. Shareholder proposals span a wide range of topics,","page_number":201,"box":{"x":117,"y":135,"width":762,"height":12}},{"id":"7fbadd7d-5868-4b24-8185-ac62db77dbbf","block_type":"box","text":"including governance reforms, capital management, and changes in the management or disclosure of","page_number":201,"box":{"x":117,"y":150,"width":758,"height":12}},{"id":"e9938ec7-5990-4b2a-9eaf-60356b5b206a","block_type":"box","text":"sustainability-related risks. These proposals have a varying degree of relevance for companies across","page_number":201,"box":{"x":116,"y":166,"width":763,"height":12}},{"id":"00ba192e-9a2c-4c13-92e8-e2dd10673660","block_type":"box","text":"sectors, locations, and business models.","page_number":201,"box":{"x":116,"y":182,"width":307,"height":11}},{"id":"e83bd038-aa30-4169-8ada-91143cc47997","block_type":"box","text":"BIS takes a case-by-case approach to voting on shareholder proposals and maintains a singular focus","page_number":201,"box":{"x":117,"y":214,"width":764,"height":12}},{"id":"0672e781-8214-402b-8202-9d8c239b032f","block_type":"box","text":"on the proposal’s implications for long-term financial value creation for shareholders. Our analysis","page_number":201,"box":{"x":116,"y":229,"width":730,"height":12}},{"id":"e93733fd-76f0-4974-9489-b08b2179d7b1","block_type":"box","text":"considers whether a shareholder proposal addresses a material risk that may impact a company’s","page_number":201,"box":{"x":116,"y":245,"width":732,"height":12}},{"id":"66b8ad8a-89e6-4339-b52c-a0cf9da2010c","block_type":"box","text":"long-term financial performance. BIS may support shareholder proposals that request disclosures that","page_number":201,"box":{"x":117,"y":260,"width":760,"height":12}},{"id":"0c35c080-111b-40a9-8645-f407760635f8","block_type":"box","text":"help us, as long-term investors on behalf of our clients, better understand the material risks and","page_number":201,"box":{"x":117,"y":276,"width":713,"height":12}},{"id":"d0cb5983-0e43-47a9-a026-88b84f1c526d","block_type":"box","text":"opportunities companies face and how they are managing them, especially where this information is","page_number":201,"box":{"x":116,"y":291,"width":747,"height":12}},{"id":"9a676146-d294-47bb-9ac6-92bde1934d6c","block_type":"box","text":"additive given the company’s existing disclosures. We look for consistency between the specific","page_number":201,"box":{"x":116,"y":307,"width":715,"height":12}},{"id":"37e017ce-4338-4e4b-99b6-a344198f051e","block_type":"box","text":"request formally made in the proposal, the supporting documentation, and the proponents’ other","page_number":201,"box":{"x":117,"y":322,"width":717,"height":12}},{"id":"84cbf7f8-15b3-4887-89e9-57dc86fbe79e","block_type":"box","text":"communications on the issues. We also assess the company’s practices and disclosures and the costs","page_number":201,"box":{"x":116,"y":338,"width":769,"height":12}},{"id":"b9f91fbf-f3bb-4216-9b75-f2dd122d72fd","block_type":"box","text":"and benefits to the company of meeting the request made in the proposal. We take into consideration a","page_number":201,"box":{"x":116,"y":353,"width":772,"height":12}},{"id":"e530c8d5-7dea-46af-81a5-6a8cf76ad93f","block_type":"box","text":"company’s governance practices and disclosures against those of their peers.","page_number":201,"box":{"x":116,"y":369,"width":583,"height":12}},{"id":"c57fc8b4-44aa-4994-a8d4-ccbf1a25120f","block_type":"box","text":"BIS does not support shareholder proposals that we view as inconsistent with long-term financial value","page_number":201,"box":{"x":117,"y":401,"width":767,"height":12}},{"id":"282052a1-8310-4d29-a358-de87d4e4e601","block_type":"box","text":"or that seek to micromanage companies. We take into consideration the legal effect of the proposal, as","page_number":201,"box":{"x":116,"y":417,"width":769,"height":12}},{"id":"0fd172c5-a41c-404a-817c-1fb9d2daeb18","block_type":"box","text":"shareholder proposals may be advisory or legally binding depending on the jurisdiction, while others","page_number":201,"box":{"x":116,"y":432,"width":747,"height":12}},{"id":"3ba98b82-7b48-48dd-8830-ca1871a5de48","block_type":"box","text":"may make requests that would be deemed illegal in a given jurisdiction.","page_number":201,"box":{"x":117,"y":448,"width":534,"height":12}},{"id":"19de71e2-3026-4e5c-8a63-4b32548ce442","block_type":"box","text":"In our experience, it is helpful when companies disclose the names of the proponent or organization","page_number":201,"box":{"x":117,"y":480,"width":745,"height":12}},{"id":"4ac5dbba-da0d-4f61-af50-eb2d284bd563","block_type":"box","text":"that has submitted or advised on the proposal. We recognize that some shareholder proposals bundle","page_number":201,"box":{"x":116,"y":496,"width":762,"height":12}},{"id":"7726ec3e-dfab-4784-96a6-3e1ff241aaa3","block_type":"box","text":"topics and/or specific requests. Further, the proponent’s supporting statement may refer to topics that","page_number":201,"box":{"x":116,"y":511,"width":758,"height":12}},{"id":"342900c5-78a1-4c1b-91d0-31f4a669f53e","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":201,"box":{"x":116,"y":527,"width":767,"height":12}},{"id":"88d22d53-7889-4e7f-a064-3cff8edcb5a5","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":201,"box":{"x":116,"y":542,"width":720,"height":12}},{"id":"af207037-90c6-415b-b99d-028577965242","block_type":"box","text":"proposal, we are not necessarily endorsing every element of the proposal or the reasoning, objectives,","page_number":201,"box":{"x":117,"y":558,"width":765,"height":12}},{"id":"850d96b4-337c-4b70-a748-c29fcf05be16","block_type":"box","text":"or supporting statement of the proponent. We may support a proposal for different reasons than those","page_number":201,"box":{"x":116,"y":573,"width":762,"height":12}},{"id":"abbc7754-5457-49e2-a3a2-8f0c0eaba653","block_type":"box","text":"put forth by the proponent, when we believe that overall it may advance our clients’ long-term financial","page_number":201,"box":{"x":117,"y":589,"width":762,"height":12}},{"id":"c3b5cf17-48ba-4ee3-a6a9-8ba55e1a6e8e","block_type":"box","text":"interests.","page_number":201,"box":{"x":117,"y":604,"width":72,"height":10}},{"id":"a4377616-5249-49fc-9b78-8153211c1e1e","block_type":"box","text":"BlackRock is subject to certain rules, regulations, agency guidance, and contractual agreements that","page_number":201,"box":{"x":117,"y":637,"width":752,"height":12}},{"id":"9519f5da-a49f-432f-870b-8bf212366610","block_type":"box","text":"place restrictions and limitations on how BlackRock can interact with the companies in which we invest","page_number":201,"box":{"x":117,"y":652,"width":766,"height":12}},{"id":"eae8a257-8687-4e35-9e88-9ac7bbb6170e","block_type":"box","text":"on behalf of our clients. BlackRock does not nominate directors for board elections or submit","page_number":201,"box":{"x":116,"y":667,"width":687,"height":10}},{"id":"7e2ac393-560a-4f2e-9cb8-cd316c44a8c2","block_type":"box","text":"shareholder proposals to companies. Non-compliance with these requirements could adversely affect","page_number":201,"box":{"x":116,"y":683,"width":752,"height":12}},{"id":"ac96dea1-95a1-4f52-9864-fef27e7c6502","block_type":"box","text":"BlackRock’s ability to serve its clients’ interests.","page_number":201,"box":{"x":117,"y":699,"width":352,"height":12}},{"id":"60c4cf9d-8d49-4edf-809b-8e4a6a82f637","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":201,"box":{"x":287,"y":739,"width":426,"height":12}},{"id":"85278f27-ba97-4220-85d3-947dbe6422eb","block_type":"box","text":"Appropriate oversight of material risks and opportunities, including material sustainability-related risks","page_number":201,"box":{"x":116,"y":772,"width":753,"height":12}},{"id":"ca38d38a-c5e9-49ac-b7f4-68994b70f052","block_type":"box","text":"and opportunities, is an important component of having an effective governance framework that","page_number":201,"box":{"x":116,"y":787,"width":709,"height":12}},{"id":"5346be3f-41de-4976-ae59-1f22902fe80e","block_type":"box","text":"supports durable, long-term financial value creation.","page_number":201,"box":{"x":116,"y":803,"width":385,"height":12}},{"id":"a3913882-a0fe-4345-aad0-ecc77ea4d301","block_type":"box","text":"10","page_number":201,"box":{"x":503,"y":803,"width":11,"height":6}},{"id":"f26d5b34-31c1-482d-9de0-fec334db7d1d","block_type":"box","text":"10","page_number":201,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"50625b75-e261-4ae0-9e11-a1c9d42ec49c","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":201,"box":{"x":171,"y":828,"width":691,"height":9}},{"id":"7ec1c061-a640-40b6-b417-b0334efcc573","block_type":"box","text":"company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":201,"box":{"x":170,"y":841,"width":686,"height":9}},{"id":"64208cb0-2ac1-410d-99b2-32c0466d0495","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":201,"box":{"x":170,"y":854,"width":682,"height":9}},{"id":"4fde43cc-594b-4c78-be93-6b3c00ac9ff5","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":201,"box":{"x":170,"y":867,"width":683,"height":9}},{"id":"ffa43c59-f6bf-4a57-a3d8-8a788e16d8d4","block_type":"box","text":"operates, customer loyalty, and relationships with regulators.","page_number":201,"box":{"x":170,"y":880,"width":360,"height":9}},{"id":"56d2f811-f35d-4929-bcb6-1649cdf981bf","block_type":"box","text":"BlackRock Investment Stewardship","page_number":201,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"472a69f6-8553-433a-87ea-3f451254fad0","block_type":"box","text":"Global Principles |","page_number":201,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"5cd1a326-1650-4cd7-98dd-34b4da1a55f7","block_type":"box","text":"11","page_number":201,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"a6ec13e2-468c-4031-8e61-8d27e1d62da6","block_type":"box","text":"NM1026U-6033243-201/221","page_number":201,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"74c3486a-46e4-4f33-a184-9f0d8dccfb75","block_type":"box","text":"We look to companies to provide robust disclosure that allows investors to effectively evaluate","page_number":202,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"7a9c035c-1882-42f2-8fe1-f55abe67945c","block_type":"box","text":"companies’ strategy and business practices related to material sustainability-related risks and","page_number":202,"box":{"x":116,"y":103,"width":699,"height":12}},{"id":"88898209-1a52-4c4a-ac59-45cac8f06a4e","block_type":"box","text":"opportunities. We find it helpful when companies’ disclosures demonstrate that they have a resilient","page_number":202,"box":{"x":116,"y":118,"width":743,"height":12}},{"id":"247ff409-e496-4ef2-bb6f-c5d27fa7f035","block_type":"box","text":"business model that integrates material sustainability-related risks and opportunities into their strategy,","page_number":202,"box":{"x":117,"y":134,"width":766,"height":12}},{"id":"84e0e7bc-1b13-4e52-b7ee-4b16d266a7fb","block_type":"box","text":"risk management, and metrics and targets, including industry-specific metrics.","page_number":202,"box":{"x":117,"y":149,"width":583,"height":12}},{"id":"1099c233-7bf1-4e6e-95cd-156eabba340e","block_type":"box","text":"Standardized disclosure of sustainability-related data supports investors in making informed decisions.","page_number":202,"box":{"x":116,"y":177,"width":766,"height":12}},{"id":"76748092-e179-4c27-a430-d1a96747fc25","block_type":"box","text":"The International Sustainability Standards Board (ISSB) standards, IFRS S1 and S2, represent one","page_number":202,"box":{"x":116,"y":193,"width":743,"height":12}},{"id":"fda90fd1-b5c4-4e49-bd1f-f3024f668b2a","block_type":"box","text":"such approach to standardization that we find useful in our analysis.","page_number":202,"box":{"x":116,"y":208,"width":503,"height":12}},{"id":"04d685f8-fc53-4640-9a4a-8ecaf2eea4a1","block_type":"box","text":"11","page_number":202,"box":{"x":622,"y":209,"width":9,"height":6}},{"id":"f8f770e5-b6fa-4bca-838d-a941e86fd6d8","block_type":"box","text":"However, we do not mandate","page_number":202,"box":{"x":633,"y":209,"width":228,"height":11}},{"id":"def6659e-fcb5-4265-a433-8a95c3da1452","block_type":"box","text":"any specific disclosure framework companies should use, and recognize that companies may report","page_number":202,"box":{"x":116,"y":224,"width":747,"height":12}},{"id":"00c4d4dc-9abb-4085-9acb-b8942773b61f","block_type":"box","text":"using different standards, some of which may be required by regulation. In such cases, we ask that","page_number":202,"box":{"x":117,"y":239,"width":739,"height":12}},{"id":"2d226420-165b-4a78-80a8-bcc0829434ef","block_type":"box","text":"companies highlight the metrics that are industry- or company-specific.","page_number":202,"box":{"x":116,"y":255,"width":530,"height":12}},{"id":"82baae12-c80a-4b95-8902-ab1c33977deb","block_type":"box","text":"We also recognize that companies may be phasing in reporting over several years. We do not","page_number":202,"box":{"x":116,"y":283,"width":702,"height":12}},{"id":"cc60ea2c-7c49-420c-9e81-231b445848ca","block_type":"box","text":"prescribe timelines regarding when companies should make sustainability-related disclosures but","page_number":202,"box":{"x":117,"y":299,"width":725,"height":12}},{"id":"2f2b9e84-e2a8-473e-a181-7f1d53ee7523","block_type":"box","text":"appreciate it when companies produce them sufficiently in advance of their shareholder meeting, to the","page_number":202,"box":{"x":116,"y":314,"width":770,"height":12}},{"id":"c1557b2e-850a-4765-a191-2744840cdf92","block_type":"box","text":"best of their abilities, to provide investors with time to assess the data and make informed voting","page_number":202,"box":{"x":117,"y":330,"width":718,"height":12}},{"id":"16caf551-a753-4e5e-a5a2-18e52ca2234a","block_type":"box","text":"decisions.","page_number":202,"box":{"x":116,"y":345,"width":79,"height":10}},{"id":"9b9ed435-521d-4cdf-8b13-9c357ed74d12","block_type":"box","text":"Industry initiatives on managing specific operational risks may also provide useful guidance to","page_number":202,"box":{"x":117,"y":374,"width":700,"height":12}},{"id":"43deff94-589e-42d3-b0f1-6035dc3d53ed","block_type":"box","text":"companies on best practices and disclosures. While not a voting item, we find it helpful to our","page_number":202,"box":{"x":116,"y":389,"width":697,"height":12}},{"id":"a77836c2-6565-4b00-8a97-07da5730d147","block_type":"box","text":"understanding of investment risk when companies disclose any relevant global sustainability-related","page_number":202,"box":{"x":117,"y":405,"width":746,"height":12}},{"id":"83c19bb6-7357-430f-8d0c-b6502d29b474","block_type":"box","text":"standards adopted, the industry initiatives in which they participate, any peer group benchmarking","page_number":202,"box":{"x":116,"y":420,"width":731,"height":12}},{"id":"e647c08f-317d-418c-ae41-ed17e4265f05","block_type":"box","text":"undertaken, and any assurance processes to help investors understand their approach to sustainable","page_number":202,"box":{"x":117,"y":436,"width":758,"height":12}},{"id":"702fd90c-a86c-4d3e-9cb6-ab976456e534","block_type":"box","text":"and responsible business practices.","page_number":202,"box":{"x":116,"y":451,"width":271,"height":12}},{"id":"21081617-db75-4de6-9274-726f2d953d52","block_type":"box","text":"Climate and nature-related risk","page_number":202,"box":{"x":117,"y":480,"width":250,"height":9}},{"id":"6adc15e3-f0d9-4a8f-a70f-e6b0c748697c","block_type":"box","text":"Many companies are assessing how to navigate the low-carbon transition while delivering long-term","page_number":202,"box":{"x":117,"y":508,"width":745,"height":12}},{"id":"66cf4d55-809d-41a2-9bfc-b6138f436514","block_type":"box","text":"financial value to investors. For companies facing material climate-related risks, we find it helpful when","page_number":202,"box":{"x":116,"y":523,"width":766,"height":12}},{"id":"4834c750-f6be-4d08-aa08-b30c2b0257a3","block_type":"box","text":"they publicly disclose, consistent with their business model and sector, how they intend to deliver long","page_number":202,"box":{"x":116,"y":539,"width":762,"height":12}},{"id":"3e88ca04-af0e-41bc-8244-d8ed5ff0bcd9","block_type":"box","text":"term financial performance through the low-carbon transition, including where available, their transition","page_number":202,"box":{"x":116,"y":554,"width":766,"height":12}},{"id":"4c879270-6f0c-42a1-8244-293effbee78d","block_type":"box","text":"plan.","page_number":202,"box":{"x":117,"y":570,"width":34,"height":12}},{"id":"57cdade1-f366-4f4c-9256-5a61455a7ccc","block_type":"box","text":"12, 13","page_number":202,"box":{"x":153,"y":570,"width":29,"height":7}},{"id":"90e0784c-182c-47ea-b681-ccf0dee0af6c","block_type":"box","text":"From company disclosures and engagement, we seek to understand the strategies","page_number":202,"box":{"x":182,"y":570,"width":626,"height":12}},{"id":"7d03189c-3141-469d-97f6-bb07dc74e5ea","block_type":"box","text":"companies have in place to manage material risks to, and opportunities for, their long-term business","page_number":202,"box":{"x":116,"y":585,"width":748,"height":12}},{"id":"c9c1b025-c6cb-45a6-9c74-2e00e37151f0","block_type":"box","text":"model associated with a range of climate-related scenarios.","page_number":202,"box":{"x":117,"y":601,"width":446,"height":12}},{"id":"fb6ce4f8-f31c-4e9c-b93b-be135c139565","block_type":"box","text":"Recognizing the value of these disclosures, certain markets such as the European Union mandate","page_number":202,"box":{"x":117,"y":629,"width":734,"height":12}},{"id":"b75eb84f-d021-417e-b23d-9bc3be0db1e4","block_type":"box","text":"large companies to disclose such climate-related financial information, while in other jurisdictions these","page_number":202,"box":{"x":117,"y":645,"width":767,"height":12}},{"id":"35cb1bae-589c-4bf7-89a1-a3af508740a4","block_type":"box","text":"disclosures are viewed as best practice in the market.","page_number":202,"box":{"x":116,"y":660,"width":398,"height":12}},{"id":"791da5c7-7a2c-4b0e-8e5c-53282317d870","block_type":"box","text":"11","page_number":202,"box":{"x":144,"y":685,"width":7,"height":5}},{"id":"99cd335c-853a-4568-a076-75d09f75e343","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":202,"box":{"x":170,"y":685,"width":666,"height":10}},{"id":"2fa0c46b-b746-4003-9ccb-7062f4bc4e68","block_type":"box","text":"Foundation. The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework and the","page_number":202,"box":{"x":171,"y":698,"width":712,"height":10}},{"id":"f2cd01c3-af80-43f8-b2d2-3cc18a094235","block_type":"box","text":"standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":202,"box":{"x":170,"y":711,"width":649,"height":10}},{"id":"e7617045-6413-485f-b459-d4d8484414df","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":202,"box":{"x":170,"y":724,"width":674,"height":10}},{"id":"924d3183-061a-425c-b5e4-daab010439dd","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":202,"box":{"x":170,"y":737,"width":647,"height":10}},{"id":"a92e03b7-a5dc-45f8-b2f0-7f262b6346aa","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":202,"box":{"x":171,"y":750,"width":312,"height":8}},{"id":"0cf98840-e835-4919-a0b1-7f8e4ba1e23e","block_type":"box","text":"12","page_number":202,"box":{"x":144,"y":763,"width":8,"height":5}},{"id":"49b7bd42-aad2-49f7-9678-970a94e6c700","block_type":"box","text":"We have observed that more companies are developing such plans, and public policymakers in certain markets are","page_number":202,"box":{"x":170,"y":763,"width":685,"height":10}},{"id":"347f8532-5bcf-4473-93db-4cc4f2d1aba1","block_type":"box","text":"signaling their intentions to require them or already have requirements in place, such as Australia, Brazil, and the","page_number":202,"box":{"x":170,"y":776,"width":670,"height":10}},{"id":"ebe72231-fa55-489d-98a1-2871fa1e2fb8","block_type":"box","text":"European Union (please see the International Transition Plan Network for information). We view transition plans as a","page_number":202,"box":{"x":171,"y":789,"width":691,"height":9}},{"id":"75820a9c-aafe-4e75-b2d4-77a1bbf9bd99","block_type":"box","text":"method for a company to both internally assess and externally communicate its long-term strategy, ambition, objectives,","page_number":202,"box":{"x":170,"y":802,"width":710,"height":9}},{"id":"6f76d238-dd3a-4720-8ba2-c39d4c70d44c","block_type":"box","text":"and actions to create financial value through the global transition towards a low-carbon economy. Across the landscape","page_number":202,"box":{"x":170,"y":815,"width":709,"height":9}},{"id":"9520bc6e-aacb-4c04-8c2f-19248e174cdc","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":202,"box":{"x":170,"y":828,"width":710,"height":9}},{"id":"bd26a68f-ff25-423a-aed9-b17a160363ca","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":202,"box":{"x":170,"y":840,"width":684,"height":10}},{"id":"e9bc18c0-479e-43b8-850e-3653aa5ad4ba","block_type":"box","text":"engage companies that have chosen to publish a transition plan to understand their planned actions and resource","page_number":202,"box":{"x":170,"y":853,"width":675,"height":10}},{"id":"cdd6af99-95dc-4c84-9cfe-8b4c209d5e34","block_type":"box","text":"implications. Website accessed in December 2025.","page_number":202,"box":{"x":170,"y":866,"width":303,"height":10}},{"id":"0f955639-c768-4808-8d5c-b32e8c415d2b","block_type":"box","text":"13","page_number":202,"box":{"x":144,"y":879,"width":8,"height":5}},{"id":"9c83dc1a-0524-4477-85dd-14e281cb43ea","block_type":"box","text":"For more information, please see our commentary “Climate-related risks and a low-carbon transition,” December 2025.","page_number":202,"box":{"x":171,"y":879,"width":703,"height":10}},{"id":"11c14bca-eb78-4bd7-962d-a7d1c792a9d8","block_type":"box","text":"BlackRock Investment Stewardship","page_number":202,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"8c52f45f-3d81-49ef-8bda-0deea80010c0","block_type":"box","text":"Global Principles |","page_number":202,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"63ac4a44-e1c8-4a18-ba53-54476591a1fa","block_type":"box","text":"12","page_number":202,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"2db01c26-6020-4585-9be5-268bc381ea73","block_type":"box","text":"NM1026U-6033243-202/221","page_number":202,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"85207754-7584-48c6-96c0-5aff7a115be6","block_type":"box","text":"The ISSB standards provide one such framework that can assist investors in assessing company","page_number":203,"box":{"x":116,"y":87,"width":726,"height":12}},{"id":"47defba8-31ee-464e-8653-0730aedd2374","block_type":"box","text":"specific climate-related risks and opportunities, and informing investment decisions. Such disclosures","page_number":203,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"68a7dc15-dd2d-4d67-8ca1-3aad7b725be7","block_type":"box","text":"also provide investors with insights into how companies are managing the risks associated with a","page_number":203,"box":{"x":116,"y":118,"width":726,"height":12}},{"id":"692c2a63-7f3a-4fa2-bb0e-d5ac171d5dbc","block_type":"box","text":"transition to a low-carbon economy by managing their own carbon emissions or emissions intensities","page_number":203,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"acafd3b4-360b-4bb4-8315-1042d00115b3","block_type":"box","text":"to the extent financially practicable.","page_number":203,"box":{"x":116,"y":149,"width":266,"height":12}},{"id":"4a283d53-ae27-4efc-bce1-b751c92785bb","block_type":"box","text":"The ISSB standards, for example, contemplate disclosures on how companies are setting short-,","page_number":203,"box":{"x":116,"y":177,"width":723,"height":12}},{"id":"a2b9a4b3-6a0e-42ec-bf96-381f1cfcfae3","block_type":"box","text":"medium- and long-term targets, ideally science-based where these are available for their sector, for","page_number":203,"box":{"x":117,"y":193,"width":742,"height":12}},{"id":"8c207e2a-c9ce-4c56-9c98-5b373ca11bb5","block_type":"box","text":"scope 1 and 2 greenhouse gas emissions (GHG) reductions and to demonstrate how their targets are","page_number":203,"box":{"x":116,"y":208,"width":760,"height":12}},{"id":"bd3383a0-b65c-4b52-98ca-c93809a0a312","block_type":"box","text":"consistent with the long-term financial interests of their investors.","page_number":203,"box":{"x":116,"y":224,"width":486,"height":12}},{"id":"60d53bcc-5ffb-4473-9472-413ce37d04cd","block_type":"box","text":"While we recognize that regulators in some markets are moving to mandate certain disclosures, at this","page_number":203,"box":{"x":116,"y":252,"width":766,"height":12}},{"id":"1ee91485-a8c4-43fc-a1e0-6e0ce0b4a3ab","block_type":"box","text":"stage, we view scope 3 emissions differently from scopes 1 and 2, given methodological complexity,","page_number":203,"box":{"x":116,"y":268,"width":749,"height":12}},{"id":"25c6f0bc-363b-4052-bf62-d580c818b3bd","block_type":"box","text":"regulatory uncertainty, concerns about double-counting, and lack of direct control by companies. We","page_number":203,"box":{"x":117,"y":283,"width":749,"height":12}},{"id":"b5401e2a-843e-4c17-923a-a58d45df64fe","block_type":"box","text":"welcome disclosures and commitments that companies choose to make regarding material scope 3","page_number":203,"box":{"x":116,"y":299,"width":744,"height":12}},{"id":"cc8120a3-8ada-4607-89c1-b66d512df116","block_type":"box","text":"emissions and recognize that these are provided on a good-faith basis as methodology develops.","page_number":203,"box":{"x":116,"y":314,"width":728,"height":12}},{"id":"3b9dbdc0-4c94-42d1-92bd-d2d4b95fe89b","block_type":"box","text":"In addition to climate-related risks and opportunities, for companies whose strategies, operations or","page_number":203,"box":{"x":117,"y":343,"width":742,"height":12}},{"id":"c8d540be-4071-48cb-aae9-e98990a32dcb","block_type":"box","text":"supply chains are materially reliant on natural capital, nature-related risks and opportunities may affect","page_number":203,"box":{"x":116,"y":358,"width":765,"height":12}},{"id":"a73c8ddf-fb5a-49e8-ae07-5fb2b9494bd9","block_type":"box","text":"their ability to generate long-term financial returns.","page_number":203,"box":{"x":116,"y":374,"width":372,"height":12}},{"id":"64a88a85-246d-4d8d-9324-37d8e810cf6d","block_type":"box","text":"14","page_number":203,"box":{"x":491,"y":374,"width":11,"height":6}},{"id":"1ad3b961-563a-4e4d-9e4f-e7dc69c071f3","block_type":"box","text":"For these companies, we rely on disclosures to","page_number":203,"box":{"x":502,"y":374,"width":360,"height":12}},{"id":"2ccc91ea-9c5b-40b0-a399-f3cb877aba21","block_type":"box","text":"understand how their strategies consider nature-related impacts and dependencies and to assess how","page_number":203,"box":{"x":117,"y":389,"width":765,"height":12}},{"id":"02f5e63d-c82d-468a-ad65-ea9de7d60a13","block_type":"box","text":"the board oversees these risks.","page_number":203,"box":{"x":116,"y":405,"width":232,"height":9}},{"id":"14278268-7dfd-4fd3-8bed-c196bed4f8be","block_type":"box","text":"15","page_number":203,"box":{"x":351,"y":405,"width":10,"height":6}},{"id":"cd2b93cd-9b3d-4b91-844a-fd9221d026f5","block_type":"box","text":"Companies’ impact on their workforce, supply chains, and communities","page_number":203,"box":{"x":117,"y":433,"width":579,"height":12}},{"id":"036fa6f3-1b1e-4624-aaf7-fe993bbaeae6","block_type":"box","text":"Companies determine their key stakeholders based on what is material to their business and long-term","page_number":203,"box":{"x":117,"y":461,"width":768,"height":12}},{"id":"ab4d5026-4b8e-478a-812d-b8b37db3d9b8","block_type":"box","text":"financial performance. For many companies, key stakeholders include employees, business supply","page_number":203,"box":{"x":116,"y":477,"width":741,"height":12}},{"id":"40d17870-6c5b-4a8f-a3cc-de34e86a2a10","block_type":"box","text":"chains, clients and consumers, regulators, and the communities in which they operate.","page_number":203,"box":{"x":116,"y":493,"width":647,"height":11}},{"id":"6e2b3997-140a-4236-9c5f-dc0664f4585a","block_type":"box","text":"In our experience, companies that invest in the relationships that are critical to their strategic objectives","page_number":203,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"e4fc5fda-d78d-4b5d-b345-010f5d36f154","block_type":"box","text":"are more likely to deliver durable, long-term financial performance. By contrast, we have found that","page_number":203,"box":{"x":116,"y":536,"width":739,"height":12}},{"id":"c7beda67-5a50-4589-954f-0a64c95d737b","block_type":"box","text":"poor relationships may create adverse impacts that could expose companies to legal, regulatory,","page_number":203,"box":{"x":117,"y":552,"width":722,"height":12}},{"id":"61f7b3fb-e2c8-4b8d-a03b-ce75d85b3ada","block_type":"box","text":"operational, and reputational risks. This is particularly relevant to a company’s workforce, which is","page_number":203,"box":{"x":116,"y":567,"width":730,"height":12}},{"id":"7efe6b7f-200a-41a3-bd55-d6df789a5139","block_type":"box","text":"central to long-term financial value creation.","page_number":203,"box":{"x":116,"y":583,"width":324,"height":12}},{"id":"289e0836-fd99-45cb-97f1-e6a59750e0f2","block_type":"box","text":"16","page_number":203,"box":{"x":442,"y":583,"width":11,"height":6}},{"id":"3a6b3d13-bbe6-4a51-9cc2-6b670ddf7233","block_type":"box","text":"As a long-term shareholder on behalf of our clients, we find it helpful when companies disclose how","page_number":203,"box":{"x":116,"y":611,"width":743,"height":12}},{"id":"be1b398f-661f-4e2c-8955-c219e40c3f3f","block_type":"box","text":"they have identified their key stakeholders and considered their interests in business decision-making.","page_number":203,"box":{"x":116,"y":627,"width":763,"height":12}},{"id":"96933e73-a73e-4c42-8c68-5bf473246356","block_type":"box","text":"In addition to understanding broader stakeholder relationships, BIS finds it helpful when companies","page_number":203,"box":{"x":117,"y":642,"width":740,"height":12}},{"id":"5466ea7f-cd5f-4071-9991-c7d87cc23164","block_type":"box","text":"discuss how they consider the needs of their workforce today, and the skills required for their future","page_number":203,"box":{"x":116,"y":658,"width":742,"height":12}},{"id":"3d2a6038-47b2-4f29-9fac-5eff58d37bb4","block_type":"box","text":"business strategy. We are also interested in understanding how the board monitors and engages on","page_number":203,"box":{"x":117,"y":673,"width":741,"height":12}},{"id":"14c975fa-488f-4049-8803-dc46bde8b6d9","block_type":"box","text":"these matters, given it is well positioned to ensure that the approach taken by management is informed","page_number":203,"box":{"x":116,"y":689,"width":764,"height":12}},{"id":"e66805fd-b0c3-48f9-b49d-801307fabc5d","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":203,"box":{"x":117,"y":704,"width":765,"height":12}},{"id":"377a8980-c806-4cac-820b-4f2b9ee22aab","block_type":"box","text":"are the responsibility of management and the board.","page_number":203,"box":{"x":116,"y":720,"width":387,"height":12}},{"id":"89e625e8-d82b-4b38-abfd-4b5b4df65840","block_type":"box","text":"In addition, we find it helpful when companies disclose their approach to addressing material adverse","page_number":203,"box":{"x":117,"y":748,"width":749,"height":12}},{"id":"5412e692-cfd4-4cf0-8a41-1eacfb9b0322","block_type":"box","text":"impacts that could arise from their business practices and affect critical relationships with their","page_number":203,"box":{"x":117,"y":763,"width":697,"height":12}},{"id":"cf78a3f1-cf71-4bf8-ae95-6b814fc37c15","block_type":"box","text":"14","page_number":203,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"ddc91054-e733-4fb2-9ce7-c60f33527292","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on natural capital,” December 2025.","page_number":203,"box":{"x":171,"y":789,"width":697,"height":9}},{"id":"622257e2-ee32-45cd-9605-d7025f22b5bb","block_type":"box","text":"15","page_number":203,"box":{"x":144,"y":802,"width":8,"height":5}},{"id":"c848ab83-68d8-471b-af80-bbb7f86ed9db","block_type":"box","text":"Given the growing awareness of the materiality of these issues for certain businesses, enhanced reporting on a","page_number":203,"box":{"x":170,"y":802,"width":660,"height":9}},{"id":"898997f4-f914-4aba-9a5d-77a274ce843f","block_type":"box","text":"company’s natural capital dependencies and impacts would aid investors’ understanding. The recommendations of the","page_number":203,"box":{"x":170,"y":814,"width":704,"height":10}},{"id":"837aa0f4-c358-43f6-8fe1-cdf6e9f8e0e9","block_type":"box","text":"Taskforce on Nature-related Financial Disclosures (TNFD) may prove useful to some companies. We recognize that","page_number":203,"box":{"x":170,"y":827,"width":689,"height":10}},{"id":"24cedb31-b462-4227-b3b3-b61eb9fb1901","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":203,"box":{"x":170,"y":840,"width":680,"height":10}},{"id":"f5e89964-efd2-4a1f-811e-862fc72e04a3","block_type":"box","text":"other private sector standards. TNFD-aligned reporting is not a voting issue. Website accessed in December 2025.","page_number":203,"box":{"x":170,"y":853,"width":680,"height":10}},{"id":"3da6ef1d-19a3-4748-84fa-3a255a912d6d","block_type":"box","text":"16","page_number":203,"box":{"x":144,"y":866,"width":8,"height":5}},{"id":"ed17023b-971c-418f-b8a2-fef3bca40f70","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on human capital management,”","page_number":203,"box":{"x":171,"y":866,"width":677,"height":10}},{"id":"484d9aba-099c-4202-989c-618023883d64","block_type":"box","text":"December 2025.","page_number":203,"box":{"x":171,"y":879,"width":97,"height":8}},{"id":"6a9c5a1d-4699-4c2a-9bc2-206fe3149783","block_type":"box","text":"BlackRock Investment Stewardship","page_number":203,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"b6dda3a6-014d-4bf7-ac68-ee9200bf64de","block_type":"box","text":"Global Principles |","page_number":203,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"a99a9be1-367a-497b-ab55-99cde32d7d77","block_type":"box","text":"13","page_number":203,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"56bd2952-d6c2-4c36-90ff-d64f8cae7f4a","block_type":"box","text":"NM1026U-6033243-203/221","page_number":203,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"6f89c370-d2ae-477b-b7f4-b5654a4b2f62","block_type":"box","text":"stakeholders. We encourage companies to implement, to the extent appropriate, monitoring processes","page_number":204,"box":{"x":116,"y":87,"width":767,"height":12}},{"id":"15f99a96-a220-4b18-9b27-3d0ae4c1448c","block_type":"box","text":"(often referred to as due diligence) to identify and mitigate potential adverse impacts and grievance","page_number":204,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"f74e006b-fc50-41a1-8702-ecc91252eb1a","block_type":"box","text":"mechanisms to remediate any actual adverse material impacts.","page_number":204,"box":{"x":117,"y":118,"width":474,"height":12}},{"id":"cd84aa89-3f38-42e6-8742-60e2cea4ae98","block_type":"box","text":"We look to boards to oversee management’s approach to addressing material risks related to key","page_number":204,"box":{"x":116,"y":148,"width":729,"height":12}},{"id":"89cb7774-dc23-419d-b5d4-c65d98bcc195","block_type":"box","text":"stakeholders and may convey concerns about board oversight in our voting on director elections or","page_number":204,"box":{"x":116,"y":164,"width":739,"height":12}},{"id":"6caca8cf-6793-495a-aa2f-977ff0fcc7e5","block_type":"box","text":"supporting a business relevant shareholder proposal when, in our assessment, the board is not acting","page_number":204,"box":{"x":116,"y":179,"width":761,"height":12}},{"id":"753302e2-c834-4586-a17e-b0867cb5d7e7","block_type":"box","text":"in shareholders’ long-term financial interests.","page_number":204,"box":{"x":117,"y":195,"width":337,"height":12}},{"id":"f156e1ff-100a-4a88-bf82-4a1bbcbda900","block_type":"box","text":"BlackRock’s oversight of its investment stewardship activities","page_number":204,"box":{"x":251,"y":232,"width":503,"height":12}},{"id":"d6b7116a-168a-436a-b04a-1c73691b69f2","block_type":"box","text":"BIS’ governance structure supports oversight and accountability of stewardship-related activities on","page_number":204,"box":{"x":117,"y":262,"width":742,"height":12}},{"id":"b0d95ab1-88ef-426d-be0b-b9e0727091a3","block_type":"box","text":"behalf of clients at the global and regional level.","page_number":204,"box":{"x":117,"y":278,"width":358,"height":12}},{"id":"cd1c30bc-8795-4b04-b02f-d5bfb60b6f8a","block_type":"box","text":"At the top of this governance structure, the risk-focused BIS Global Oversight Committee (the","page_number":204,"box":{"x":116,"y":308,"width":699,"height":12}},{"id":"4cc8d0ca-535a-4687-beed-e65e72e14a17","block_type":"box","text":"Committee) supports BIS’ regulatory responsibilities in relation to proxy voting, including adherence to","page_number":204,"box":{"x":117,"y":324,"width":760,"height":12}},{"id":"ce4c9270-2e87-4a81-84d2-c1c930c9b05a","block_type":"box","text":"policies and procedures as well as market-level stewardship requirements. The Committee reviews","page_number":204,"box":{"x":117,"y":339,"width":740,"height":12}},{"id":"9dddf23e-5148-43d6-9f29-4ddc01a22004","block_type":"box","text":"and approves amendments to the Global Principles and regional voting guidelines. The Committee","page_number":204,"box":{"x":116,"y":355,"width":738,"height":12}},{"id":"ffbdd865-06e1-4ac9-ae47-17418abbb73b","block_type":"box","text":"also reviews periodic reports regarding the votes cast by BIS on behalf of clients, as well as updates","page_number":204,"box":{"x":116,"y":370,"width":749,"height":12}},{"id":"62ab3881-1e0d-4fe9-ab76-7e3e5c363c12","block_type":"box","text":"on material process issues, procedural changes, and other risk oversight considerations. The","page_number":204,"box":{"x":116,"y":386,"width":697,"height":12}},{"id":"298e023b-96f3-46c7-b33b-a40644cb0269","block_type":"box","text":"Committee is chaired by the Global Heads of the Investment Stewardship function and its members","page_number":204,"box":{"x":117,"y":401,"width":743,"height":12}},{"id":"c0c18f80-9d0b-4dbd-849b-2049986576ef","block_type":"box","text":"include senior BlackRock executives with legal, risk, and other experience relevant to team oversight","page_number":204,"box":{"x":117,"y":417,"width":752,"height":12}},{"id":"d80111de-ff86-44c0-a9dd-8448b2d83a58","block_type":"box","text":"who are independent from the investment stewardship function.","page_number":204,"box":{"x":116,"y":432,"width":477,"height":12}},{"id":"706d2dc5-07f3-4c50-913a-5977e16268dd","block_type":"box","text":"The Global Heads have primary oversight of BIS’ activities globally, including voting in accordance with","page_number":204,"box":{"x":116,"y":462,"width":769,"height":12}},{"id":"703dba2a-a423-473c-affe-7c5289f0b5c2","block_type":"box","text":"the Global Principles and regional voting guidelines. At the regional level, three regional Heads for the","page_number":204,"box":{"x":116,"y":478,"width":761,"height":12}},{"id":"6bba76d0-a44a-43aa-85ca-5fb92443ebc3","block_type":"box","text":"Americas, APAC, and EMEA oversee BIS’ activities for their specific markets.","page_number":204,"box":{"x":116,"y":493,"width":581,"height":12}},{"id":"b31de7b3-cebf-4131-91bb-b15aad355e8d","block_type":"box","text":"Vote execution","page_number":204,"box":{"x":118,"y":524,"width":122,"height":9}},{"id":"3de700fb-adef-4f48-94e8-93dbc5b6b3a6","block_type":"box","text":"BIS votes proxies on behalf of index equity funds and accounts when authorized by our clients. We","page_number":204,"box":{"x":117,"y":554,"width":739,"height":12}},{"id":"ac40e977-3547-4071-8004-296e51b92c4b","block_type":"box","text":"have processes in place to consider all proxies for which we have voting authority, and submit voting","page_number":204,"box":{"x":117,"y":569,"width":751,"height":12}},{"id":"15cd1d0d-4495-46ae-93d6-049e65de73b0","block_type":"box","text":"decisions, or refrain from voting when logistical issues arise (see below). The BIS Benchmark","page_number":204,"box":{"x":116,"y":585,"width":698,"height":12}},{"id":"5f03d5a2-454c-48f4-8b95-bda532f3a8b5","block_type":"box","text":"Policies – and the vote decisions made consistent with those policies – reflect our reasonable and","page_number":204,"box":{"x":117,"y":600,"width":730,"height":12}},{"id":"18afa876-5d6b-4391-ae82-0c65328ffcba","block_type":"box","text":"independent judgment and are made without regard to the relationship between the issuer of the proxy","page_number":204,"box":{"x":117,"y":616,"width":766,"height":12}},{"id":"c183dcbd-d7d1-4f2d-901d-b4660b3a5779","block_type":"box","text":"(or any shareholder proponent or dissident shareholder) and the Fund, the Fund’s affiliates (if any),","page_number":204,"box":{"x":117,"y":631,"width":739,"height":12}},{"id":"9be813ce-9a19-4891-b5ed-546c15addeec","block_type":"box","text":"BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts management policies and","page_number":204,"box":{"x":117,"y":647,"width":768,"height":12}},{"id":"60d30c4c-ca03-4e57-8de3-9fe5af1068c3","block_type":"box","text":"procedures,” below).","page_number":204,"box":{"x":117,"y":662,"width":151,"height":12}},{"id":"266c8aef-dfa4-40ca-89f2-a9464c5b29a6","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BIS’ ability to vote, as well","page_number":204,"box":{"x":117,"y":692,"width":743,"height":12}},{"id":"ba1767bd-4da8-4eb0-8acf-abf6b7f962e1","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":204,"box":{"x":116,"y":708,"width":754,"height":12}},{"id":"2c2c75f4-a58c-4c32-b2a2-4fea443b776b","block_type":"box","text":"1) untimely notice of shareholder meetings; 2) restrictions on a foreigner’s ability to exercise votes; 3)","page_number":204,"box":{"x":118,"y":723,"width":748,"height":12}},{"id":"a9668b7f-6852-4849-b62d-e828b7649e04","block_type":"box","text":"requirements to vote proxies in person; 4) “share-blocking” (requirements that investors who exercise","page_number":204,"box":{"x":117,"y":739,"width":751,"height":12}},{"id":"3278e806-b99a-4a75-9fab-b5b1f9150601","block_type":"box","text":"their voting rights surrender the right to dispose of their holdings from the point at which votes are","page_number":204,"box":{"x":116,"y":754,"width":723,"height":12}},{"id":"421d2a6d-b5ae-4464-b68a-05e2280561a9","block_type":"box","text":"submitted until after the after the shareholder meeting has occurred); 5) potential difficulties in","page_number":204,"box":{"x":116,"y":770,"width":695,"height":12}},{"id":"a0cad16c-24df-4c83-8e62-ddc11d0b316c","block_type":"box","text":"translating the proxy; 6) regulatory constraints; and 7) requirements to provide local agents with","page_number":204,"box":{"x":116,"y":785,"width":708,"height":12}},{"id":"6c6e34bc-e407-49e7-babf-a53bc1c7f7c7","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":205,"box":{"x":116,"y":676,"width":755,"height":12}},{"id":"97b123dd-bce7-454f-a32b-97051a2d1ac4","block_type":"box","text":"market at any given time are not out on loan.","page_number":205,"box":{"x":117,"y":692,"width":331,"height":12}},{"id":"9c2dace2-397f-46ac-9eb9-54e0c6eb725b","block_type":"box","text":"Periodically, BlackRock reviews our process for determining whether to recall securities on loan in","page_number":205,"box":{"x":117,"y":723,"width":725,"height":12}},{"id":"b0b5b993-971e-4900-baea-1910e3e8b21f","block_type":"box","text":"order to vote and may modify it as necessary.","page_number":205,"box":{"x":116,"y":738,"width":338,"height":12}},{"id":"76951569-ec2b-4a0c-8c6a-d35be3fdc4d0","block_type":"box","text":"17","page_number":205,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"de94d85f-a27c-4a5c-a2a3-3ca09862d992","block_type":"box","text":"Recalling securities on loan can be impacted by the timing of record dates. 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In addition, institutional clients in separately managed","page_number":206,"box":{"x":117,"y":211,"width":748,"height":12}},{"id":"76a7b4f2-4a0d-4c63-ab7d-27d233b46ba1","block_type":"box","text":"accounts (SMAs) continue to be eligible for BlackRock Voting Choice regardless of their investment","page_number":206,"box":{"x":116,"y":227,"width":743,"height":12}},{"id":"97c14de1-c450-4e4a-adf2-14c6a9d884b4","block_type":"box","text":"strategies.","page_number":206,"box":{"x":116,"y":242,"width":76,"height":12}},{"id":"7ee7207f-9166-46b8-86d4-d0b9b8785a12","block_type":"box","text":"19","page_number":206,"box":{"x":195,"y":242,"width":10,"height":6}},{"id":"af588371-ee4b-4be8-8b3f-52e34ce033a1","block_type":"box","text":"Voting Choice is also available for eligible U.S. retail shareholder accounts invested in","page_number":206,"box":{"x":205,"y":242,"width":648,"height":12}},{"id":"102222a7-2a35-4ac9-9b53-7f8ab6f11256","block_type":"box","text":"BlackRock’s largest U.S. exchange-traded fund.","page_number":206,"box":{"x":117,"y":258,"width":361,"height":12}},{"id":"a0b191e7-af03-4e34-a02f-b044505875e2","block_type":"box","text":"20","page_number":206,"box":{"x":478,"y":258,"width":11,"height":6}},{"id":"860f93c5-4a33-4279-9d20-7ca758047acb","block_type":"box","text":"As a result, the shares attributed to BlackRock portfolios in company share registers may be voted","page_number":206,"box":{"x":116,"y":289,"width":735,"height":12}},{"id":"a82f5179-0d1b-4881-8069-f9e2d78e38c8","block_type":"box","text":"differently depending on whether our clients have authorized BIS to vote on their behalf, have","page_number":206,"box":{"x":116,"y":304,"width":699,"height":12}},{"id":"417c77f5-3452-4981-aae3-654fe285e85a","block_type":"box","text":"authorized BIS to vote in accordance with a third-party policy, or have elected to vote shares in","page_number":206,"box":{"x":116,"y":320,"width":709,"height":12}},{"id":"0e11a8da-c901-4919-8212-2b9baa4db994","block_type":"box","text":"accordance with their own policy. Our clients have greater control over proxy voting because of Voting","page_number":206,"box":{"x":116,"y":335,"width":763,"height":12}},{"id":"a602c6d7-ef80-40d3-89f9-09372ee67035","block_type":"box","text":"Choice.","page_number":206,"box":{"x":117,"y":351,"width":54,"height":9}},{"id":"48e65f93-cd1d-4a01-a53d-826f02de371f","block_type":"box","text":"21","page_number":206,"box":{"x":173,"y":351,"width":10,"height":6}},{"id":"f7a604a3-f24b-484a-8e73-2ea4505f0063","block_type":"box","text":"Reporting and vote transparency","page_number":206,"box":{"x":369,"y":389,"width":267,"height":12}},{"id":"5f5a8834-3772-4c7c-a4e1-851502d066f9","block_type":"box","text":"We are committed to transparency of the stewardship work we do on behalf of clients. 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Engaging with the boards and management of companies","page_number":210,"box":{"x":151,"y":233,"width":494,"height":12}},{"id":"6b613000-f3ae-466c-b3a1-1c1a28fc73f3","block_type":"box","text":"in which clients are invested to","page_number":210,"box":{"x":645,"y":233,"width":238,"height":10}},{"id":"ac61caab-d7b6-415c-9a15-12dfdd867585","block_type":"box","text":"deepen our understanding of a company’s business model, including how they are overseeing","page_number":210,"box":{"x":184,"y":249,"width":703,"height":12}},{"id":"78ea0ad4-110b-4ae8-bdf2-83aec47e519d","block_type":"box","text":"material business risks and opportunities over time, and to help inform our voting on behalf of","page_number":210,"box":{"x":184,"y":264,"width":697,"height":12}},{"id":"fc60ae61-da14-4f08-93c0-de780770290e","block_type":"box","text":"clients.","page_number":210,"box":{"x":184,"y":280,"width":50,"height":9}},{"id":"d5fa924f-1c7c-46b9-8100-2f8f90969e71","block_type":"box","text":"1","page_number":210,"box":{"x":237,"y":280,"width":2,"height":6}},{"id":"be728e6c-ba2b-44e1-8023-9e997ff2da8b","block_type":"box","text":"2. 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The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework and the","page_number":213,"box":{"x":171,"y":569,"width":712,"height":10}},{"id":"7927f404-c696-49aa-8617-1e0c0df65068","block_type":"box","text":"standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":213,"box":{"x":170,"y":582,"width":649,"height":10}},{"id":"10ac0a64-8b70-4b4a-865d-ae9bab339ea5","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":213,"box":{"x":170,"y":595,"width":674,"height":10}},{"id":"3dc68e16-1c7c-4f5a-a78d-2bb74c9c67b6","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":213,"box":{"x":170,"y":608,"width":647,"height":10}},{"id":"3ec1c5e6-6cb4-4484-a887-0d1e4aada33a","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":213,"box":{"x":171,"y":621,"width":312,"height":8}},{"id":"758b62a6-3494-4c79-b01c-99cbee88c4dd","block_type":"box","text":"15","page_number":213,"box":{"x":144,"y":634,"width":8,"height":5}},{"id":"5064e82a-0dad-435e-a590-a20fb7aaa4a1","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":213,"box":{"x":170,"y":634,"width":694,"height":10}},{"id":"318f5b28-0280-47af-9dca-e88bbab39113","block_type":"box","text":"so. BIS does not mandate any specific disclosure framework companies should use, and recognize that some","page_number":213,"box":{"x":170,"y":647,"width":651,"height":10}},{"id":"bb455781-044a-42fd-ae7c-3f0de322f933","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":213,"box":{"x":170,"y":660,"width":698,"height":9}},{"id":"f1c3d82e-6b45-4b46-bbcc-48e1a9cbbbb0","block_type":"box","text":"that companies highlight the metrics that are industry- or company-specific. We also recognize that companies may be","page_number":213,"box":{"x":170,"y":673,"width":703,"height":9}},{"id":"cb17f252-e1b7-4323-9226-45841d764ce6","block_type":"box","text":"phasing in reporting over several years. We do not prescribe timelines regarding when companies should make","page_number":213,"box":{"x":170,"y":686,"width":661,"height":9}},{"id":"a0536372-bcfe-490c-b637-b679184d8517","block_type":"box","text":"sustainability-related disclosures but appreciate it when companies produce them sufficiently in advance of their","page_number":213,"box":{"x":170,"y":699,"width":664,"height":9}},{"id":"9db1ac23-b572-4614-9459-969eb347f252","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":213,"box":{"x":170,"y":711,"width":698,"height":10}},{"id":"0c97412d-355c-4395-ac01-7b12448b43be","block_type":"box","text":"voting decisions.","page_number":213,"box":{"x":170,"y":725,"width":98,"height":9}},{"id":"fac1df22-a251-4afd-9e6c-fb2e496f8e2e","block_type":"box","text":"16","page_number":213,"box":{"x":144,"y":737,"width":8,"height":5}},{"id":"ddc7bb1f-e9ee-47d2-84ca-9301e67f62c6","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":213,"box":{"x":171,"y":737,"width":685,"height":10}},{"id":"3ffd1800-f0e5-4403-b2b3-5a1c1d479612","block_type":"box","text":"paper: FTSE Russel, “Scope for improvement: Solving the Scope 3 conundrum,” January 2024, accessed in December","page_number":213,"box":{"x":170,"y":750,"width":708,"height":10}},{"id":"4936a324-e755-4e4c-be85-0ddbd69f6297","block_type":"box","text":"2025.","page_number":213,"box":{"x":170,"y":763,"width":32,"height":8}},{"id":"80b8dc6a-f047-4326-9e0b-d0f5120c14f7","block_type":"box","text":"17","page_number":213,"box":{"x":144,"y":776,"width":8,"height":5}},{"id":"ac48b7c8-2161-449c-a694-927e90aabdd6","block_type":"box","text":"Under this policy, the dedicated team looks for GHG emissions disclosures to be aligned with the Greenhouse Gas","page_number":213,"box":{"x":171,"y":776,"width":680,"height":10}},{"id":"940e1a8f-3437-45a6-99dc-fe920faf105c","block_type":"box","text":"Protocol (GHG Protocol). The Protocol Standards and Guidance are currently being updated to ensure they continue to","page_number":213,"box":{"x":171,"y":789,"width":706,"height":10}},{"id":"63633dfa-2cb6-475c-85bf-d411452a424d","block_type":"box","text":"provide “a rigorous and credible accounting foundation for businesses to measure, plan and track progress toward","page_number":213,"box":{"x":170,"y":802,"width":677,"height":10}},{"id":"a0ea43b3-3c75-45ce-bc5d-b359d172c1ca","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":213,"box":{"x":170,"y":815,"width":650,"height":10}},{"id":"e6d1bd4c-cfc8-4ff4-baab-5afa63b267f2","block_type":"box","text":"18","page_number":213,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"13f1e9c9-a00a-4553-8412-f31dda6420fc","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":213,"box":{"x":170,"y":828,"width":707,"height":9}},{"id":"1eb68196-7975-4fc2-8318-5ef15aaa5aff","block_type":"box","text":"companies into the role of enforcing emission reduction targets outside of their control. Given methodological","page_number":213,"box":{"x":170,"y":841,"width":645,"height":9}},{"id":"cb7c706c-550a-4218-92ad-8897a2c34e9a","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":213,"box":{"x":170,"y":854,"width":686,"height":9}},{"id":"608cc942-27eb-412b-ae46-f8a3c2c006d1","block_type":"box","text":"useful when companies focus their disclosures on those of the fifteen scope 3 GHG Protocol categories that are","page_number":213,"box":{"x":170,"y":867,"width":663,"height":9}},{"id":"cbf71e4d-e469-472f-a02e-c2bd8a217708","block_type":"box","text":"material to their business models.","page_number":213,"box":{"x":170,"y":880,"width":199,"height":7}},{"id":"b003eb5d-005c-4b09-891a-12c90204e314","block_type":"box","text":"BlackRock Investment Stewardship","page_number":213,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"d71901df-6897-49e3-a711-e1fb84f3e5cf","block_type":"box","text":"Climate and Decarbonization St","page_number":213,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"ed7e9f97-4095-4904-9593-10b40dbf64cc","block_type":"box","text":"ewardship Guidelines |","page_number":213,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"e9664361-f089-433d-abc6-3577d0d683e4","block_type":"box","text":"6","page_number":213,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"0df3e7c5-1447-4a79-83d7-b8b29203f429","block_type":"box","text":"NM1026U-6033243-213/221","page_number":213,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"26eb106b-f955-4c26-98de-721d09b2882f","block_type":"box","text":"However, the team recognizes that companies have varying ability to influence the emissions","page_number":214,"box":{"x":184,"y":87,"width":696,"height":12}},{"id":"608961ef-33d3-4d42-b856-bc409438cebe","block_type":"box","text":"across the different parts of their value chain and, therefore, it is helpful when disclosures","page_number":214,"box":{"x":184,"y":102,"width":667,"height":12}},{"id":"7b7c2685-9889-4cd8-a532-b5d4139a2481","block_type":"box","text":"explain the implications for the achievement of their decarbonization targets. For some","page_number":214,"box":{"x":184,"y":118,"width":647,"height":12}},{"id":"9f9cb6f4-f7fd-4609-97ea-347b91569844","block_type":"box","text":"companies that play an important role in the low-carbon transition, scope 3 may represent","page_number":214,"box":{"x":184,"y":134,"width":671,"height":12}},{"id":"0e8a2a3a-8975-4773-b518-440dd7b057a7","block_type":"box","text":"their only significant source of GHG emissions in the value chain. While we do not believe","page_number":214,"box":{"x":183,"y":149,"width":672,"height":12}},{"id":"5677e1f4-1f8b-4663-8c50-e030fcc75705","block_type":"box","text":"companies should be required to enforce emissions reduction targets outside of their control,","page_number":214,"box":{"x":184,"y":165,"width":693,"height":12}},{"id":"a84f6b5b-3de3-4c4e-88c1-d6c0d41bdc0e","block_type":"box","text":"where relevant, we look for disclosures on how the company approaches the low-carbon","page_number":214,"box":{"x":183,"y":180,"width":662,"height":12}},{"id":"00ddeb56-9a24-4eab-819b-9855928bfe5a","block_type":"box","text":"transition in these cases. This may include plans and targets to grow businesses that","page_number":214,"box":{"x":183,"y":196,"width":636,"height":12}},{"id":"99c3d1cd-8b53-44b7-b3ff-e395ed0215bc","block_type":"box","text":"contribute to real world decarbonization, forward-looking capital or procurement allocation","page_number":214,"box":{"x":184,"y":211,"width":670,"height":12}},{"id":"152591f4-1512-4c13-a3a1-cdd8d1663c46","block_type":"box","text":"plans to net-zero aligned activities or suppliers, and strategies to mitigate material transition","page_number":214,"box":{"x":184,"y":227,"width":684,"height":12}},{"id":"17917d55-fe98-47fe-bcc8-afee9ab42c26","block_type":"box","text":"risks.","page_number":214,"box":{"x":184,"y":242,"width":43,"height":10}},{"id":"a6126bf2-8459-4474-a300-d871861b87dd","block_type":"box","text":"(4) where relevant, disclosures that describe the company’s exposure to climate-related physical","page_number":214,"box":{"x":150,"y":265,"width":729,"height":12}},{"id":"db84ee42-d773-4e9a-b965-252fd1b4b64a","block_type":"box","text":"risks – such as acute risks from extreme weather events or chronic risks from long-term shifts","page_number":214,"box":{"x":184,"y":280,"width":699,"height":13}},{"id":"7986e755-1618-470a-ab51-e6cb6b5384bf","block_type":"box","text":"in climate patterns – and how these risks could reasonably be expected to affect the","page_number":214,"box":{"x":184,"y":296,"width":629,"height":12}},{"id":"2b8430a6-dd73-4755-a7a5-20bf2c3d70b8","block_type":"box","text":"company’s operations, assets, or supply chains.","page_number":214,"box":{"x":184,"y":312,"width":361,"height":12}},{"id":"e46bdc5f-b509-44cc-8f03-76a7850112d6","block_type":"box","text":"Transition plans","page_number":214,"box":{"x":150,"y":342,"width":134,"height":12}},{"id":"b9c410f6-5256-4d71-b624-108ae58cca01","block_type":"box","text":"Some companies have published transition plans outlining how they intend to implement their","page_number":214,"box":{"x":150,"y":372,"width":698,"height":12}},{"id":"0ec2b3b8-a12c-42b4-8680-80527a9de1f3","block_type":"box","text":"low-carbon transition strategies. As defined by the ISSB, a transition plan “lays out the entity’s","page_number":214,"box":{"x":150,"y":387,"width":701,"height":12}},{"id":"82b7024d-997b-4689-8a3a-16b4ddd9feb5","block_type":"box","text":"targets, actions or resources for its transition towards a lower-carbon economy, including actions","page_number":214,"box":{"x":150,"y":403,"width":722,"height":12}},{"id":"92e586cf-9070-4bb0-955a-22825f7293a1","block_type":"box","text":"such as reducing its greenhouse gas emissions” (see Appendix 1).","page_number":214,"box":{"x":150,"y":418,"width":494,"height":12}},{"id":"c4e946be-746b-4967-84f4-68ad3ca4d690","block_type":"box","text":"19","page_number":214,"box":{"x":646,"y":419,"width":11,"height":6}},{"id":"2def703c-3e4c-4abb-af53-1eefd3d70e83","block_type":"box","text":"Work is also underway in a number of jurisdictions on establishing a common approach in a","page_number":214,"box":{"x":150,"y":441,"width":685,"height":12}},{"id":"b682f8f2-13d0-473c-b9bb-d2da7bd4e98b","block_type":"box","text":"market to corporate transition plans.","page_number":214,"box":{"x":150,"y":457,"width":267,"height":12}},{"id":"2568a50f-6741-43ec-9ee4-60f9c7180726","block_type":"box","text":"20","page_number":214,"box":{"x":418,"y":457,"width":12,"height":6}},{"id":"481d489f-cc93-49f4-b0f0-dc6459345612","block_type":"box","text":"Recent guidance from the ISSB on disclosures about","page_number":214,"box":{"x":430,"y":457,"width":404,"height":12}},{"id":"376afa0c-29b1-4f09-9398-ec1bebd1cc23","block_type":"box","text":"transition plans highlights the convergence of reporting approaches.","page_number":214,"box":{"x":150,"y":472,"width":509,"height":12}},{"id":"85ecbbda-5650-4c25-a912-173e6f5e003f","block_type":"box","text":"While the preparation of a transition plan, or lack thereof, is not, in itself, a voting issue, these","page_number":214,"box":{"x":150,"y":495,"width":697,"height":12}},{"id":"81858e18-278b-4afd-9156-63dfef40c5ec","block_type":"box","text":"disclosures typically provide valuable insights that inform the dedicated team’s approach to","page_number":214,"box":{"x":150,"y":511,"width":679,"height":12}},{"id":"2949381d-77b9-4943-a2fe-eb4bb4ae231d","block_type":"box","text":"engaging and voting on matters related to climate and transition risks on behalf of in-scope funds","page_number":214,"box":{"x":150,"y":526,"width":725,"height":12}},{"id":"11ea3db5-6895-4f12-8f4f-fcdf1e095059","block_type":"box","text":"and accounts.","page_number":214,"box":{"x":150,"y":542,"width":109,"height":9}},{"id":"9476e1d3-1afa-458e-9893-1a9371818861","block_type":"box","text":"Boards and directors","page_number":214,"box":{"x":116,"y":572,"width":174,"height":9}},{"id":"58dbb663-dc1b-483a-9d08-b593d7f6a379","block_type":"box","text":"An effective and well-functioning board that has appropriate governance structures to facilitate","page_number":214,"box":{"x":116,"y":602,"width":704,"height":12}},{"id":"8c2c1517-6b65-4cfb-8e82-578c0fc0523a","block_type":"box","text":"oversight of a company’s management and strategic initiatives is critical to the company’s ability to","page_number":214,"box":{"x":116,"y":618,"width":736,"height":12}},{"id":"247fefcd-7b81-45f6-858f-386ac86deffb","block_type":"box","text":"deliver on its low-carbon transition strategy. In assessing the role and effectiveness of the board in this","page_number":214,"box":{"x":116,"y":633,"width":766,"height":12}},{"id":"1901bb5c-23aa-47f8-8547-44bddf845079","block_type":"box","text":"regard, the dedicated team seeks to understand whether:","page_number":214,"box":{"x":117,"y":649,"width":430,"height":12}},{"id":"31d56951-dcc2-42b9-95ad-4fba9f9495d3","block_type":"box","text":"• The board has clear oversight responsibilities for climate and low-carbon transition-related","page_number":214,"box":{"x":150,"y":679,"width":702,"height":12}},{"id":"ea3a0b26-2280-4b22-8720-a5f6fd1b99a4","block_type":"box","text":"risks and opportunities in the company’s business model. The Guidelines consider the whole","page_number":214,"box":{"x":184,"y":694,"width":687,"height":12}},{"id":"8791869c-9238-487f-a796-e8ce5252a70b","block_type":"box","text":"board to have responsibility for oversight of the company’s long-term strategy, including those","page_number":214,"box":{"x":184,"y":710,"width":695,"height":12}},{"id":"8de0fe1b-b5f5-4328-8166-f01e65802dbb","block_type":"box","text":"aspects related to the transition to a low-carbon economy.","page_number":214,"box":{"x":184,"y":726,"width":429,"height":11}},{"id":"bd9bab30-49aa-4e5c-9795-0f4aa80631d0","block_type":"box","text":"• Management has established a robust low-carbon transition framework and long-term","page_number":214,"box":{"x":150,"y":748,"width":669,"height":12}},{"id":"6918b4cf-0e71-4d5a-8d7a-730eb65c1b5f","block_type":"box","text":"strategy, with clear accountability for delivery by senior executives.","page_number":214,"box":{"x":184,"y":764,"width":493,"height":12}},{"id":"96ed945b-e50b-49ee-8db7-26261ad90d03","block_type":"box","text":"19","page_number":214,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"075a8ced-d3b8-46ea-8c9e-0683ca207b8d","block_type":"box","text":"International Financial Reporting Standards, “IFRS S2: Climate-related Disclosures,” June 2023, accessed in December","page_number":214,"box":{"x":171,"y":789,"width":712,"height":10}},{"id":"24384c08-4131-4077-97a4-41e3697bdd69","block_type":"box","text":"2025.","page_number":214,"box":{"x":170,"y":802,"width":32,"height":7}},{"id":"020dc128-e648-470e-a394-5a8cf38c8673","block_type":"box","text":"20","page_number":214,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"15c25b3e-5774-4b74-8d90-5c9cef590955","block_type":"box","text":"More companies are developing such plans, and public policymakers in certain markets are signaling their intentions to","page_number":214,"box":{"x":171,"y":815,"width":705,"height":9}},{"id":"3095d4e5-cef4-40f0-82bf-aee4cea80bbb","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":214,"box":{"x":170,"y":828,"width":704,"height":9}},{"id":"6b480685-4664-49bd-b104-016b3473034d","block_type":"box","text":"International Transition Plan Network for information). 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Given forthcoming regulatory requirements in certain jurisdictions,","page_number":215,"box":{"x":184,"y":299,"width":684,"height":12}},{"id":"9acff780-c534-496c-b427-e20592dfb2e2","block_type":"box","text":"some companies are voluntarily disclosing scope 3 emissions reductions targets and plans,","page_number":215,"box":{"x":184,"y":315,"width":683,"height":12}},{"id":"e56a8feb-63c8-4cd9-bd7d-3431dda1f1fd","block_type":"box","text":"setting out how they are working on decarbonization with the different constituents in their","page_number":215,"box":{"x":184,"y":330,"width":670,"height":12}},{"id":"deaf3d3c-cd00-48c4-9d07-b410cf29b88b","block_type":"box","text":"value chain.","page_number":215,"box":{"x":183,"y":346,"width":94,"height":9}},{"id":"8a2c5556-beb9-4cb4-a6b1-747e10d1003c","block_type":"box","text":"21","page_number":215,"box":{"x":278,"y":346,"width":10,"height":6}},{"id":"a0a27f4a-9ba1-483f-afa8-f0b98d2873a8","block_type":"box","text":"• The company’s governance and oversight processes for managing material risks associated","page_number":215,"box":{"x":150,"y":368,"width":723,"height":12}},{"id":"25a34eb2-96af-459c-99ba-9d89a21194e3","block_type":"box","text":"with corporate political activities including applicable policies and procedures where","page_number":215,"box":{"x":183,"y":383,"width":624,"height":12}},{"id":"a10e78b7-4a7f-48d6-ba29-66ea7a940b6c","block_type":"box","text":"relevant.","page_number":215,"box":{"x":184,"y":399,"width":62,"height":9}},{"id":"efc6f8c7-0479-4e64-9e29-a7e974c4774b","block_type":"box","text":"22","page_number":215,"box":{"x":248,"y":399,"width":11,"height":6}},{"id":"e9a52378-84e7-4aa2-a12b-23dac22543ff","block_type":"box","text":"The dedicated team looks for public policy engagement to be consistent with a","page_number":215,"box":{"x":260,"y":399,"width":592,"height":12}},{"id":"7035da0b-6095-4dc4-b386-db3e93d13533","block_type":"box","text":"company’s stated strategic policy objectives, including those related to the low-carbon","page_number":215,"box":{"x":184,"y":414,"width":642,"height":12}},{"id":"84d08d6b-5557-479c-81c1-0dad68f60bf2","block_type":"box","text":"transition.","page_number":215,"box":{"x":183,"y":430,"width":78,"height":9}},{"id":"1c49eb85-795b-4e2e-8fa0-6cbaedadbf6a","block_type":"box","text":"Voting against directors over concerns about climate risk","page_number":215,"box":{"x":118,"y":458,"width":424,"height":12}},{"id":"ce8c3ebb-bd7f-4bea-8ccc-0c0920b509ba","block_type":"box","text":"In implementing these Guidelines, the dedicated team generally supports non-executive directors","page_number":215,"box":{"x":117,"y":487,"width":726,"height":12}},{"id":"69742043-fd3f-4421-8ea4-1ef15dde7a79","block_type":"box","text":"standing for election where, in its assessment based on company disclosures and engagement, a","page_number":215,"box":{"x":116,"y":502,"width":729,"height":13}},{"id":"db238294-16bc-47a5-9ba4-2e3edd54a78f","block_type":"box","text":"company is executing on its commitment to align with the transition to a low-carbon economy, as","page_number":215,"box":{"x":116,"y":518,"width":722,"height":12}},{"id":"e6e69d38-494e-4b1c-bf8f-eca36dd5712b","block_type":"box","text":"defined above. Where the dedicated team determines this is not the case, it may vote against the","page_number":215,"box":{"x":116,"y":533,"width":727,"height":13}},{"id":"26c6c3f6-ab5f-4f6b-a5f2-caa3a336867f","block_type":"box","text":"election of one or more directors who the team identifies as having the most responsibility for the issue.","page_number":215,"box":{"x":116,"y":549,"width":772,"height":12}},{"id":"d2fdd3f4-06b6-441b-b247-6acea3ef0c92","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":215,"box":{"x":116,"y":564,"width":765,"height":13}},{"id":"fbfc3077-5055-42ce-a56f-b6357c666176","block_type":"box","text":"climate or sustainability risk oversight responsibilities, other members of the relevant committee, the","page_number":215,"box":{"x":116,"y":580,"width":746,"height":12}},{"id":"5b77dfa1-5a1a-40fb-90f3-9feca374b3be","block_type":"box","text":"lead independent director or the non-executive chair of the board. In certain markets, the team may","page_number":215,"box":{"x":117,"y":595,"width":741,"height":13}},{"id":"32e55dd6-5085-41be-ad9d-d7ad01b72a57","block_type":"box","text":"withhold support for the discharge of the supervisory board or equivalent and/or board reports.","page_number":215,"box":{"x":116,"y":611,"width":699,"height":12}},{"id":"51c40f27-37d6-4e5a-a7e7-c63e54b25ece","block_type":"box","text":"23","page_number":215,"box":{"x":817,"y":611,"width":11,"height":6}},{"id":"8f9eeb61-0b84-485d-89a8-b67b31d9c44c","block_type":"box","text":"Where the dedicated team has not supported director elections over climate concerns in a prior year,","page_number":215,"box":{"x":116,"y":640,"width":754,"height":12}},{"id":"676850f2-e594-47ee-8df2-d8b45f2d87fc","block_type":"box","text":"and the company has not subsequently made progress towards aligning with the transition to a","page_number":215,"box":{"x":116,"y":655,"width":709,"height":12}},{"id":"60f96d3e-4b8f-4d07-81de-1ffdf9338171","block_type":"box","text":"low-carbon economy, the team may escalate by not supporting the re-election of additional responsible","page_number":215,"box":{"x":117,"y":671,"width":764,"height":12}},{"id":"8e90378e-0ce1-4589-9e27-a9428090dfce","block_type":"box","text":"directors.","page_number":215,"box":{"x":116,"y":686,"width":67,"height":10}},{"id":"96b988cd-cf07-493d-be11-85c1274422d8","block_type":"box","text":"24","page_number":215,"box":{"x":185,"y":686,"width":12,"height":6}},{"id":"19127233-a03f-425f-b98d-0b4558425c9d","block_type":"box","text":"21","page_number":215,"box":{"x":143,"y":711,"width":8,"height":5}},{"id":"c1e107db-4426-4a92-819e-4043295b39e4","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":215,"box":{"x":171,"y":711,"width":685,"height":10}},{"id":"bdcd9f4e-a881-434c-b7c0-29d5f1e49c71","block_type":"box","text":"paper “Scope for improvement: Solving the Scope 3 conundrum.” Their research indicates that there are 2-3 material","page_number":215,"box":{"x":170,"y":724,"width":692,"height":10}},{"id":"b04408f4-657c-4c42-ab59-c7709aa07017","block_type":"box","text":"scope 3 GHG emissions categories by sector. The research uses a definition of materiality from the GHG Protocol,","page_number":215,"box":{"x":170,"y":737,"width":679,"height":10}},{"id":"5090fe57-5f7e-41f9-af4a-13492859a445","block_type":"box","text":"which “encourages companies to maintain a representative inventory of the “most significant GHG emissions, [that]","page_number":215,"box":{"x":170,"y":750,"width":682,"height":10}},{"id":"5dac0522-52da-47c0-a362-9e90d8f70ca7","block_type":"box","text":"offer the most significant GHG reduction opportunities and are most relevant to the company’s business goals.” Website","page_number":215,"box":{"x":170,"y":763,"width":712,"height":10}},{"id":"fa998d93-0291-4030-9c9d-eec25a106589","block_type":"box","text":"accessed in December 2025.","page_number":215,"box":{"x":170,"y":776,"width":173,"height":7}},{"id":"1c28a98b-94b3-47e8-9f6e-253d0b59c1b0","block_type":"box","text":"22","page_number":215,"box":{"x":143,"y":789,"width":9,"height":5}},{"id":"b9f4acc7-c05f-4863-805f-db02996d74dc","block_type":"box","text":"Corporate political activities may include lobbying as defined by local regulations, policy engagement (including trade","page_number":215,"box":{"x":170,"y":789,"width":694,"height":9}},{"id":"c3ec7798-bf49-45ca-9498-57704a092a29","block_type":"box","text":"association memberships), and corporate political contributions.","page_number":215,"box":{"x":170,"y":802,"width":378,"height":9}},{"id":"e4adb4ba-dc74-4a66-b0ff-9e8f9d8c851a","block_type":"box","text":"23","page_number":215,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"5261044c-90c4-4196-a70a-1389b7b82103","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":215,"box":{"x":171,"y":815,"width":661,"height":9}},{"id":"ee0bc4f6-dd57-4236-b746-4861b411d3be","block_type":"box","text":"information on a company’s sustainability efforts, operational resilience, or financial condition, among others.","page_number":215,"box":{"x":170,"y":828,"width":643,"height":9}},{"id":"ca549a2d-2b3f-415a-a2c6-34034e9b6881","block_type":"box","text":"24","page_number":215,"box":{"x":143,"y":841,"width":9,"height":4}},{"id":"eebd3316-f6d9-477b-a58b-203e42a0fe84","block_type":"box","text":"While the dedicated team may escalate voting by not supporting additional management proposals, principally director","page_number":215,"box":{"x":170,"y":841,"width":703,"height":9}},{"id":"7bfd53df-a47a-4d1d-a682-759787bfc258","block_type":"box","text":"elections, the team does not consider filing shareholder proposals, preannouncing voting intentions or using the media","page_number":215,"box":{"x":170,"y":853,"width":702,"height":10}},{"id":"00a6ef62-30c1-450b-95a5-8a92fc276d78","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":215,"box":{"x":170,"y":866,"width":708,"height":10}},{"id":"c20ec727-3c9d-4f39-bb7f-3ff72c2e33e6","block_type":"box","text":"focused approach, to engagement and voting on behalf of clients under these Guidelines.","page_number":215,"box":{"x":170,"y":879,"width":530,"height":10}},{"id":"6ae06a85-8b91-4b63-a472-9234fd9d2768","block_type":"box","text":"BlackRock Investment Stewardship","page_number":215,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"c3d402f9-3154-435f-85ee-47fbb542258b","block_type":"box","text":"Climate and Decarbonization St","page_number":215,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"ab1c4e70-0e0f-4278-aac4-07ee435aba6b","block_type":"box","text":"ewardship Guidelines |","page_number":215,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"79b49048-d9be-48ee-a07b-4fee0526e6da","block_type":"box","text":"8","page_number":215,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"b8cbe72b-379b-449e-bc96-01841ffa4201","block_type":"box","text":"NM1026U-6033243-215/221","page_number":215,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"8d584ee5-a70a-481a-a6ef-064e2aab5b3c","block_type":"box","text":"Management proposals to approve a climate strategy or progress report","page_number":216,"box":{"x":116,"y":87,"width":582,"height":12}},{"id":"e0cd6222-ede9-4f03-a414-8cb88d9b5557","block_type":"box","text":"In certain markets, company management may submit proposals – commonly referred to as “Say on","page_number":216,"box":{"x":117,"y":120,"width":749,"height":12}},{"id":"c3bb2c74-68f5-4735-a202-b4162c5ce4bb","block_type":"box","text":"Climate” – seeking shareholder approval of their climate action plans or progress reports. The","page_number":216,"box":{"x":117,"y":136,"width":700,"height":12}},{"id":"e682870a-2394-47e7-ad8b-78b4ceae72db","block_type":"box","text":"Guidelines consider these proposals as a valuable governance mechanism that can enhance","page_number":216,"box":{"x":117,"y":151,"width":696,"height":12}},{"id":"bec713c9-e98f-4fef-bb15-25cd97fb81a2","block_type":"box","text":"transparency, accountability, and investors’ understanding of a company’s climate strategy. The","page_number":216,"box":{"x":116,"y":167,"width":716,"height":12}},{"id":"f0e3ed78-dde5-419c-8e13-dfd49db84019","block_type":"box","text":"dedicated team generally supports management’s climate strategy proposal if, in the team’s","page_number":216,"box":{"x":116,"y":182,"width":687,"height":12}},{"id":"f203b45a-4d83-436f-8502-655985c1cda8","block_type":"box","text":"assessment based on these Guidelines, the strategy is aligned with the low-carbon transition. Similarly,","page_number":216,"box":{"x":116,"y":198,"width":772,"height":12}},{"id":"20064914-0126-4f2e-81c5-056e5c0678b7","block_type":"box","text":"the dedicated team generally supports management’s proposal on a progress report if the company","page_number":216,"box":{"x":116,"y":213,"width":745,"height":12}},{"id":"e80f4828-cc2a-496a-985d-bfda675237b6","block_type":"box","text":"has clearly explained its progress against, and any deviations from or changes to, its stated low-carbon","page_number":216,"box":{"x":117,"y":229,"width":770,"height":12}},{"id":"84e18a4d-6b0a-4a25-ac97-a3f7bbb013df","block_type":"box","text":"transition plan and targets.","page_number":216,"box":{"x":116,"y":245,"width":203,"height":11}},{"id":"320502d8-5530-4946-bb69-aad087bca7d2","block_type":"box","text":"Shareholder proposals on climate and low-carbon transition matters","page_number":216,"box":{"x":117,"y":278,"width":551,"height":12}},{"id":"c2bfccee-9f73-4a65-a662-7b70a96ab1f9","block_type":"box","text":"In most markets, shareholders can submit proposals to be voted on at a company’s shareholder","page_number":216,"box":{"x":117,"y":311,"width":717,"height":12}},{"id":"9e175b88-29e0-413d-8aa3-322222d23a8b","block_type":"box","text":"meeting, as long as certain requirements are met. Shareholder proposals span a wide range of topics","page_number":216,"box":{"x":117,"y":327,"width":758,"height":12}},{"id":"5df26708-ba4d-4d41-a816-55fe8a046a08","block_type":"box","text":"and have varying degrees of relevance for companies across sectors, locations, and business models.","page_number":216,"box":{"x":116,"y":342,"width":766,"height":12}},{"id":"2168e10d-4879-431e-8eb8-dff75bb508ba","block_type":"box","text":"Each shareholder proposal is evaluated on a case-by-case basis, focusing on its merit while","page_number":216,"box":{"x":117,"y":375,"width":687,"height":12}},{"id":"7cf9feaa-500e-450e-8b4c-041fc06709ef","block_type":"box","text":"considering the company’s individual circumstances. When the dedicated team votes in support of a","page_number":216,"box":{"x":116,"y":391,"width":748,"height":12}},{"id":"313efdb5-c308-45bc-93f6-28be001c74e6","block_type":"box","text":"proposal, it is not necessarily endorsing every element of the proposal or the reasoning, objectives, or","page_number":216,"box":{"x":117,"y":406,"width":759,"height":12}},{"id":"c3106fd9-9928-429d-b288-251a134c6805","block_type":"box","text":"supporting statement of the proponent.","page_number":216,"box":{"x":116,"y":422,"width":294,"height":12}},{"id":"6738d8a7-337f-4a33-98b2-d0773ea76480","block_type":"box","text":"In addition to financial materiality, the Guidelines consider the proposal’s relevance to the company’s","page_number":216,"box":{"x":117,"y":455,"width":752,"height":12}},{"id":"da1f9ce4-cc9d-409d-add2-7e432787ce73","block_type":"box","text":"low-carbon transition strategy and targets. 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Some companies, in light of their long-term","page_number":217,"box":{"x":117,"y":134,"width":703,"height":12}},{"id":"e6e6f13d-f863-4332-aebb-05a82b7eb77c","block_type":"box","text":"strategy, may decide to include relevant GHG emissions reduction targets or low-carbon transition","page_number":217,"box":{"x":116,"y":149,"width":734,"height":12}},{"id":"505b1978-b0a4-4618-ace8-345ec423321d","block_type":"box","text":"related metrics in their incentive plans. In such cases, the dedicated team would engage to understand","page_number":217,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"0c0ac48f-afe3-494b-9999-5ee09f924082","block_type":"box","text":"the alignment between those metrics and the company’s stated climate strategy. 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The team notes that assurance of","page_number":217,"box":{"x":116,"y":320,"width":744,"height":12}},{"id":"822c603c-cafd-4a81-bdca-431beba9f0d6","block_type":"box","text":"corporate disclosures related to climate risk and the transition to a low-carbon economy is still nascent.","page_number":217,"box":{"x":116,"y":335,"width":769,"height":12}},{"id":"24dff331-21b1-4194-815e-b3770f0d916f","block_type":"box","text":"Mergers, acquisitions, asset sales, and other special situations","page_number":217,"box":{"x":116,"y":366,"width":509,"height":12}},{"id":"88679f2f-ce8b-43d5-a3c8-4670bbe6d199","block_type":"box","text":"Special situations will be considered on their financial merits, but the dedicated team may engage on","page_number":217,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"bcfed38d-d17b-4c50-ac92-7079cd79c8db","block_type":"box","text":"climate-related factors under these Guidelines where a transaction may significantly alter a company’s","page_number":217,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"88af2441-c0a6-4462-bc3e-778b7846a519","block_type":"box","text":"climate strategy or a shareholder activist has proposed governance, strategic or operational changes","page_number":217,"box":{"x":116,"y":428,"width":754,"height":12}},{"id":"aa889020-cd52-4b70-9820-ceeb618f7b7d","block_type":"box","text":"that may impact its climate strategy. The dedicated team does not promote changes in corporate","page_number":217,"box":{"x":116,"y":444,"width":723,"height":12}},{"id":"14b0ccd5-9ccf-408a-acb9-cf0d5d6ee22e","block_type":"box","text":"control or engage in shareholder activism.","page_number":217,"box":{"x":116,"y":459,"width":317,"height":12}},{"id":"3b0e17dc-2707-4adf-a349-9ed950b0174c","block_type":"box","text":"Other business relevant sustainability-related risks and opportunities","page_number":217,"box":{"x":117,"y":490,"width":559,"height":12}},{"id":"b8e7e818-1a19-4d47-9a61-212f7a0b141b","block_type":"box","text":"Climate risk and the transition to a low-carbon economy are interconnected with a number of other","page_number":217,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"7e552a28-5665-478e-b166-f9bcab3a9b9f","block_type":"box","text":"material sustainability-related risks and opportunities that may be relevant to a company’s business","page_number":217,"box":{"x":117,"y":537,"width":741,"height":12}},{"id":"f222de35-40b8-4714-b3a8-d7b53e41109a","block_type":"box","text":"model and long-term financial performance. These include a company’s impacts or dependencies on","page_number":217,"box":{"x":117,"y":552,"width":752,"height":12}},{"id":"460214b8-d3f5-430d-9a75-f05c06db483f","block_type":"box","text":"natural capital and key stakeholders.","page_number":217,"box":{"x":117,"y":568,"width":270,"height":12}},{"id":"19519490-d6cb-431a-9fe0-21a466e0ac2f","block_type":"box","text":"26","page_number":217,"box":{"x":389,"y":568,"width":12,"height":6}},{"id":"40fa37b3-5d64-41f5-8b16-736b64775291","block_type":"box","text":"In the context of these Guidelines, the dedicated team may","page_number":217,"box":{"x":401,"y":568,"width":448,"height":12}},{"id":"ac8700a9-4b8d-4515-932f-65634ae8989d","block_type":"box","text":"engage companies to better understand how they are managing the impact on people (e.g.,","page_number":217,"box":{"x":116,"y":583,"width":686,"height":12}},{"id":"09a8fd2d-d5f3-4bf1-85b7-7f9e0653ecaa","block_type":"box","text":"employees, suppliers, customers and communities) of any strategic or operational changes they are","page_number":217,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"84f4e7f6-c055-4bd3-b8ba-79e9e786b83e","block_type":"box","text":"making in relation to their transition to a low-carbon economy. Similarly, the team may engage","page_number":217,"box":{"x":117,"y":614,"width":702,"height":12}},{"id":"d30218e0-1da3-491a-bffb-f81683dc5679","block_type":"box","text":"companies that face risks and opportunities related to land use and deforestation, access to fresh","page_number":217,"box":{"x":116,"y":630,"width":729,"height":12}},{"id":"e2905458-12ba-469b-9b04-cd67f01e7fc4","block_type":"box","text":"water, or the ability to secure scarce resources critical to the transition to a low-carbon economy.","page_number":217,"box":{"x":116,"y":645,"width":722,"height":12}},{"id":"638b89e6-7f2c-488e-92aa-e0bb647cab97","block_type":"box","text":"26","page_number":217,"box":{"x":143,"y":867,"width":9,"height":5}},{"id":"d099409e-743b-4d1d-b06f-1043f5c78eb9","block_type":"box","text":"Engagement with companies on these issues is informed by BIS’ commentaries on natural capital, human capital","page_number":217,"box":{"x":171,"y":867,"width":669,"height":9}},{"id":"5c725b19-219c-4836-b8f9-d87d1592c034","block_type":"box","text":"management, and corporate human rights risks, December 2025.","page_number":217,"box":{"x":170,"y":880,"width":387,"height":9}},{"id":"320fa1c9-a58b-4647-ac5c-81ce61e40229","block_type":"box","text":"BlackRock Investment Stewardship","page_number":217,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"93eff441-9f14-43e3-b5fa-c7c3cf409cf7","block_type":"box","text":"Climate and Decarbonization St","page_number":217,"box":{"x":496,"y":909,"width":212,"height":9}},{"id":"0d0ec1f2-d3e5-4cb7-9937-856110a11c21","block_type":"box","text":"ewardship Guidelines |","page_number":217,"box":{"x":709,"y":909,"width":152,"height":12}},{"id":"b6e7c7b1-6cbd-40f9-90f1-be4a9ef55241","block_type":"box","text":"10","page_number":217,"box":{"x":867,"y":909,"width":16,"height":9}},{"id":"a7dee7b2-c0e7-4326-bc90-dbdbe0ce4a84","block_type":"box","text":"NM1026U-6033243-217/221","page_number":217,"box":{"x":757,"y":969,"width":157,"height":7}},{"id":"e71d7f8b-1561-4a56-9ee6-d7bdd7cd6fe0","block_type":"box","text":"Appendix 1","page_number":218,"box":{"x":116,"y":87,"width":95,"height":12}},{"id":"88b720b2-8bbe-4a7b-8c45-19bc3c5f1ede","block_type":"box","text":"Terminology","page_number":218,"box":{"x":449,"y":117,"width":106,"height":12}},{"id":"ae48765e-dda3-492b-899d-fd2a011f8199","block_type":"box","text":"We understand the key concepts referred to within these Guidelines as follows:","page_number":218,"box":{"x":116,"y":147,"width":593,"height":12}},{"id":"7f327a59-e11d-43f6-bdda-182ffb324f8c","block_type":"box","text":"Climate risk","page_number":218,"box":{"x":116,"y":170,"width":95,"height":10}},{"id":"c118b8c2-571b-4a3a-a467-a0d4bab6927c","block_type":"box","text":": Includes physical risk, the increased risk to companies’ assets and activities caused by","page_number":218,"box":{"x":213,"y":170,"width":658,"height":12}},{"id":"de707941-188b-4737-9fed-f52fbe507095","block_type":"box","text":"the direct impact of changing weather patterns and natural catastrophes, and transition risk, the impact","page_number":218,"box":{"x":116,"y":186,"width":768,"height":12}},{"id":"0703e0b0-6cd1-48a9-98bd-e202fe924167","block_type":"box","text":"of the transition to a low-carbon economy on a company’s long-term profitability.","page_number":218,"box":{"x":116,"y":201,"width":601,"height":12}},{"id":"7e173787-d567-4c47-b5a3-e416f14abacb","block_type":"box","text":"Transition to a low-carbon economy (“low-carbon transition”)","page_number":218,"box":{"x":116,"y":224,"width":492,"height":12}},{"id":"66d6ff97-44d2-447f-ac6c-656c9d44e831","block_type":"box","text":": The global economic shift toward","page_number":218,"box":{"x":610,"y":224,"width":259,"height":12}},{"id":"2669cac8-1824-466b-a3f3-0d3655f0990d","block_type":"box","text":"lower emissions across many sectors and business models. The economic transformation is being","page_number":218,"box":{"x":117,"y":239,"width":735,"height":13}},{"id":"1ab3599e-da1d-4404-9c27-bc5a3b4058c2","block_type":"box","text":"driven by changes in government policy, technology, and consumer and investor preferences, as well","page_number":218,"box":{"x":116,"y":255,"width":758,"height":12}},{"id":"55df03a6-26f1-4920-9c4d-7cf36c821e53","block_type":"box","text":"as the physical effects of climate change (e.g., extreme weather), and can potentially have a material","page_number":218,"box":{"x":116,"y":270,"width":755,"height":13}},{"id":"66064d78-8e80-41d3-8be4-96f69644a216","block_type":"box","text":"impact on clients’ investments and portfolios.","page_number":218,"box":{"x":117,"y":286,"width":337,"height":12}},{"id":"bcbfc333-45c7-461b-b342-d05d5f0e71a2","block_type":"box","text":"Decarbonization","page_number":218,"box":{"x":117,"y":309,"width":128,"height":9}},{"id":"1a985557-a0f7-4958-af06-8f50ac960a5e","block_type":"box","text":": the process of reducing or eliminating emissions of carbon dioxide (CO","page_number":218,"box":{"x":248,"y":309,"width":535,"height":12}},{"id":"d5c2ef62-ab2f-454e-8586-9f7d34e26b6f","block_type":"box","text":"2","page_number":218,"box":{"x":784,"y":315,"width":5,"height":6}},{"id":"9da500ab-8ed5-482a-add4-47c373f54d67","block_type":"box","text":") from","page_number":218,"box":{"x":790,"y":309,"width":48,"height":12}},{"id":"88477a6f-db5d-4dc2-b86d-128ff873d437","block_type":"box","text":"human activity and removing carbon currently in the atmosphere. This can be carried out by countries,","page_number":218,"box":{"x":117,"y":324,"width":763,"height":12}},{"id":"ba5fc9b5-f91d-4021-863d-b543debc77e0","block_type":"box","text":"companies and even individual consumers. 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