ck0000898745-20231031
PRINCIPAL
FUNDS, INC.
("PFI"
or the "Registrant")
Statement
of Additional Information
Dated
March 1, 2024
This
Statement of Additional Information (“SAI”) is not a prospectus. It contains
information in addition to the information in the Registrant’s Prospectus. The
Prospectus, which may be amended from time to time, contains the basic
information you should know before investing in a Fund. You should read this SAI
together with the Prospectus dated March 1, 2024.
Incorporation
by Reference: The
audited financial statements, schedules of investments, and auditor’s report
included in the Registrant’s Annual
Report to Shareholders,
for the fiscal year ended October 31, 2023, are hereby incorporated by reference
into and are legally a part of this SAI.
For
a free copy of the current Prospectus, Semi-Annual Report, or Annual Report,
call 1-800-222-5852 or write:
Principal
Funds
P.O.
Box 219971
Kansas
City, MO 64121-9971
The
Prospectus may be viewed at www.PrincipalAM.com/Prospectuses.
The
ticker symbols for series and share classes begin on the next page.
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| Ticker
Symbols by Share Class |
Fund/Portfolio |
A |
C |
J |
Inst. |
R-1 |
R-3 |
R-4 |
R-5 |
R-6 |
California
Municipal |
SRCMX |
SRCCX |
| PCMFX |
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Core
Fixed Income |
CMPIX |
| PIOJX |
PIOIX |
PIOMX |
PIOOX |
PIOPX |
PIOQX |
PICNX |
Core
Plus Bond |
PRBDX |
| PBMJX |
PMSIX |
PBOMX |
PBMMX |
PBMSX |
PBMPX |
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Diversified
Income |
PGBAX |
PGDCX |
| PGDIX |
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| PGBLX |
Diversified
International |
PRWLX |
| PIIJX |
PIIIX |
PDVIX |
PINRX |
PINLX |
PINPX |
PDIFX |
Equity
Income |
PQIAX |
PEUCX |
PEIJX |
PEIIX |
PIEMX |
PEIOX |
PEIPX |
PEIQX |
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Finisterre
Emerging Markets Total Return Bond |
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| PFUMX |
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Global
Emerging Markets |
PRIAX |
| PIEJX |
PIEIX |
PIXEX |
PEAPX |
PESSX |
PEPSX |
PIIMX |
Global
Real Estate Securities |
POSAX |
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| POSIX |
| PGRKX |
PGRVX |
PGRUX |
PGRSX |
Government
& High Quality Bond |
CMPGX |
| PMRJX |
PMRIX |
PMGRX |
PRCMX |
PMRDX |
PMREX |
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Government
Money Market |
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| PGVXX |
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| PGWXX |
High
Income |
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| PYHIX |
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High
Yield |
CPHYX |
CCHIX |
| PHYTX |
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| PHYFX |
Inflation
Protection |
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| PIPJX |
PIPIX |
PISPX |
PIFPX |
PIFSX |
PBPPX |
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International
I |
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| PINIX |
PPISX |
PRPPX |
PUPPX |
PTPPX |
PIIDX |
LargeCap
Growth I |
PLGAX |
| PLGJX |
PLGIX |
PCRSX |
PPUMX |
PPUSX |
PPUPX |
PLCGX |
LargeCap
S&P 500 Index |
PLSAX |
| PSPJX |
PLFIX |
PLPIX |
PLFMX |
PLFSX |
PLFPX |
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LargeCap
Value III |
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| PLVJX |
PLVIX |
PESAX |
PPSFX |
PPSSX |
PPSRX |
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MidCap |
PEMGX |
PMBCX |
PMBJX |
PCBIX |
PMSBX |
PMBMX |
PMBSX |
PMBPX |
PMAQX |
MidCap
Growth |
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| PMGJX |
PGWIX |
PMSGX |
PFPPX |
PIPPX |
PHPPX |
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MidCap
Growth III |
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| PPQJX |
PPIMX |
PHASX |
PPQMX |
PPQSX |
PPQPX |
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MidCap
S&P 400 Index |
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| PMFJX |
MPSIX |
PMSSX |
PMFMX |
PMFSX |
PMFPX |
PMAPX |
MidCap
Value I |
PCMVX |
| PVEJX |
PVMIX |
PLASX |
PMPRX |
PABWX |
PABVX |
PCMSX |
Money
Market |
PCSXX |
| PMJXX |
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Overseas |
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| PINZX |
| PINTX |
PINUX |
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Principal
Capital Appreciation |
CMNWX |
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| PWCIX |
PCAMX |
PCAOX |
PCAPX |
PCAQX |
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Principal
LifeTime Strategic Income |
PALTX |
| PLSJX |
PLSIX |
PLAIX |
PLSMX |
PLSSX |
PLSPX |
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Principal
LifeTime 2015 |
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| LTINX |
LTSGX |
LTAPX |
LTSLX |
LTPFX |
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Principal
LifeTime 2020 |
PTBAX |
| PLFJX |
PLWIX |
PWASX |
PTBMX |
PTBSX |
PTBPX |
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Principal
LifeTime 2025 |
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| LTSTX |
LTSNX |
LTVPX |
LTEEX |
LTPDX |
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Principal
LifeTime 2030 |
PTCAX |
| PLTJX |
PMTIX |
PXASX |
PTCMX |
PTCSX |
PTCPX |
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Principal
LifeTime 2035 |
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| LTIUX |
LTANX |
LTAOX |
LTSEX |
LTPEX |
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Principal
LifeTime 2040 |
PTDAX |
| PTDJX |
PTDIX |
PYASX |
PTDMX |
PTDSX |
PTDPX |
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Principal
LifeTime 2045 |
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| LTRIX |
LTRGX |
LTRVX |
LTRLX |
LTRDX |
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Principal
LifeTime 2050 |
PPEAX |
| PFLJX |
PPLIX |
PZASX |
PTERX |
PTESX |
PTEFX |
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Principal
LifeTime 2055 |
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| LTFIX |
LTFGX |
LTFDX |
LTFLX |
LTFPX |
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Principal
LifeTime 2060 |
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| PLTAX |
PLTZX |
PLTRX |
PLTCX |
PLTMX |
PLTOX |
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Principal
LifeTime 2065 |
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| PLJIX |
PLJAX |
PLJCX |
PLJDX |
PLJEX |
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Principal
LifeTime 2070 |
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| PLTLX |
PLTGX |
PLTSX |
PLTDX |
PLTBX |
PLTFX |
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Principal
LifeTime Hybrid Income |
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| PHJFX |
PHTFX |
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| PLTYX |
Principal
LifeTime Hybrid 2015 |
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| PHJMX |
PHTMX |
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| PLRRX |
Principal
LifeTime Hybrid 2020 |
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| PHJTX |
PHTTX |
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| PLTTX |
Principal
LifeTime Hybrid 2025 |
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| PHJQX |
PHTQX |
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| PLFTX |
Principal
LifeTime Hybrid 2030 |
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| PHJNX |
PHTNX |
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| PLZTX |
Principal
LifeTime Hybrid 2035 |
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| PHJJX |
PHTJX |
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| PLRTX |
Principal
LifeTime Hybrid 2040 |
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| PHJEX |
PLTQX |
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| PLMTX |
Principal
LifeTime Hybrid 2045 |
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| PHJYX |
PHTYX |
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| PLNTX |
Principal
LifeTime Hybrid 2050 |
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| PHJUX |
PHTUX |
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| PLJTX |
Principal
LifeTime Hybrid 2055 |
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| PHJBX |
PLTNX |
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| PLHTX |
Principal
LifeTime Hybrid 2060 |
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| PHJGX |
PLTHX |
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| PLKTX |
Principal
LifeTime Hybrid 2065 |
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| PHJDX |
PLHHX |
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| PLHRX |
Principal
LifeTime Hybrid 2070 |
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| PLKJX |
PLKSX |
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| PLKRX |
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| Ticker
Symbols by Share Class |
Fund/Portfolio |
A |
C |
J |
Inst. |
R-1 |
R-3 |
R-4 |
R-5 |
R-6 |
Real
Estate Securities |
PRRAX |
PRCEX |
PREJX |
PIREX |
PRAEX |
PRERX |
PRETX |
PREPX |
PFRSX |
SAM
Balanced |
SABPX |
SCBPX |
PSAJX |
PSBIX |
PSBGX |
PBAPX |
PSBLX |
PSBFX |
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SAM
Conservative Balanced |
SAIPX |
SCIPX |
PCBJX |
PCCIX |
PCSSX |
PCBPX |
PCBLX |
PCBFX |
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SAM
Conservative Growth |
SAGPX |
SCGPX |
PCGJX |
PCWIX |
PCGGX |
PCGPX |
PCWSX |
PCWPX |
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SAM
Flexible Income |
SAUPX |
SCUPX |
PFIJX |
PIFIX |
PFIGX |
PFIPX |
PFILX |
PFIFX |
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SAM
Strategic Growth |
SACAX |
SWHCX |
PSWJX |
PSWIX |
PSGGX |
PSGPX |
PSGLX |
PSGFX |
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Short-Term
Income |
SRHQX |
STCCX |
PSJIX |
PSHIX |
PSIMX |
PSIOX |
PSIPX |
PSIQX |
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SmallCap |
PLLAX |
| PSBJX |
PSLIX |
PSABX |
PSBMX |
PSBSX |
PSBPX |
PSMLX |
SmallCap
Growth I |
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| PSIJX |
PGRTX |
PNASX |
PPNMX |
PPNSX |
PPNPX |
PCSMX |
SmallCap
S&P 600 Index |
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| PSSJX |
PSSIX |
PSAPX |
PSSMX |
PSSSX |
PSSPX |
PSPIX |
SmallCap
Value II |
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| PSMJX |
PPVIX |
PCPTX |
PJARX |
PSTWX |
PLARX |
PSMVX |
Tax-Exempt
Bond |
PTEAX |
PTBCX |
| PITEX |
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TABLE
OF CONTENTS |
HISTORY
OF THE FUNDS |
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DESCRIPTION
OF THE FUNDS’ INVESTMENTS AND RISKS |
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LEADERSHIP
STRUCTURE AND BOARD |
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INVESTMENT
ADVISORY AND OTHER SERVICES |
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MULTIPLE
CLASS STRUCTURE |
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INTERMEDIARY
COMPENSATION |
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BROKERAGE
ALLOCATION AND OTHER PRACTICES |
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PURCHASE
AND REDEMPTION OF SHARES |
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GOVERNMENT
MONEY MARKET AND MONEY MARKET FUNDS MATERIAL EVENTS |
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PRICING
OF FUND SHARES |
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TAX
CONSIDERATIONS |
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PORTFOLIO
HOLDINGS DISCLOSURE |
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PROXY
VOTING POLICIES AND PROCEDURES |
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FINANCIAL
STATEMENTS |
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INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM |
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GENERAL
INFORMATION |
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CONTROL
PERSONS AND PRINCIPAL HOLDERS OF SECURITIES |
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PORTFOLIO
MANAGER DISCLOSURE |
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APPENDIX
A — DESCRIPTION OF BOND RATINGS |
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APPENDIX
B — PRICE MAKE UP SHEET |
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APPENDIX
C — PROXY VOTING POLICIES |
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HISTORY
OF THE FUNDS
Principal
Funds, Inc. (“PFI” or the “Registrant”), a Maryland corporation, was organized
as Principal Special Markets Fund, Inc. on January 28, 1993. The Registrant
changed its name to Principal Investors Fund, Inc. effective September 14, 2000
and to Principal Funds, Inc. effective June 13, 2008.
On
January 12, 2007, the Registrant acquired WM Trust I, WM Trust II, and WM
Strategic Asset Management Portfolios, LLC.
Classes
offered by each series of the Registrant (each, a “Fund” and, together, the
“Funds”) are shown in the following table.
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| Share
Class |
Fund/Portfolio |
A |
C |
J |
Inst. |
R-1 |
R-3 |
R-4 |
R-5 |
R-6 |
California
Municipal |
X |
X |
| X |
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Core
Fixed Income |
X |
| X |
X |
X |
X |
X |
X |
X |
Core
Plus Bond |
X |
| X |
X |
X |
X |
X |
X |
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Diversified
Income |
X |
X |
| X |
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| X |
Diversified
International |
X |
| X |
X |
X |
X |
X |
X |
X |
Equity
Income |
X |
X |
X |
X |
X |
X |
X |
X |
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Finisterre
Emerging Markets Total Return Bond |
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| X |
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Global
Emerging Markets |
X |
| X |
X |
X |
X |
X |
X |
X |
Global
Real Estate Securities |
X |
|
| X |
| X |
X |
X |
X |
Government
& High Quality Bond |
X |
| X |
X |
X |
X |
X |
X |
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Government
Money Market |
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| X |
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| X |
High
Income |
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| X |
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High
Yield |
X |
X |
| X |
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| X |
Inflation
Protection |
|
| X |
X |
X |
X |
X |
X |
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International
I |
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| X |
X |
X |
X |
X |
X |
LargeCap
Growth I |
X |
| X |
X |
X |
X |
X |
X |
X |
LargeCap
S&P 500 Index |
X |
| X |
X |
X |
X |
X |
X |
|
LargeCap
Value III |
|
| X |
X |
X |
X |
X |
X |
|
MidCap |
X |
X |
X |
X |
X |
X |
X |
X |
X |
MidCap
Growth |
|
| X |
X |
X |
X |
X |
X |
|
MidCap
Growth III |
|
| X |
X |
X |
X |
X |
X |
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MidCap
S&P 400 Index |
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| X |
X |
X |
X |
X |
X |
X |
MidCap
Value I |
X |
| X |
X |
X |
X |
X |
X |
X |
Money
Market |
X |
| X |
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Overseas |
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| X |
| X |
X |
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Principal
Capital Appreciation |
X |
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| X |
X |
X |
X |
X |
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Principal
LifeTime Strategic Income |
X |
| X |
X |
X |
X |
X |
X |
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Principal
LifeTime 2015 |
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|
| X |
X |
X |
X |
X |
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Principal
LifeTime 2020 |
X |
| X |
X |
X |
X |
X |
X |
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Principal
LifeTime 2025 |
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|
| X |
X |
X |
X |
X |
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Principal
LifeTime 2030 |
X |
| X |
X |
X |
X |
X |
X |
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Principal
LifeTime 2035 |
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| X |
X |
X |
X |
X |
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Principal
LifeTime 2040 |
X |
| X |
X |
X |
X |
X |
X |
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Principal
LifeTime 2045 |
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|
| X |
X |
X |
X |
X |
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Principal
LifeTime 2050 |
X |
| X |
X |
X |
X |
X |
X |
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Principal
LifeTime 2055 |
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|
| X |
X |
X |
X |
X |
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Principal
LifeTime 2060 |
|
| X |
X |
X |
X |
X |
X |
|
Principal
LifeTime 2065 |
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|
| X |
X |
X |
X |
X |
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Principal
LifeTime 2070 |
|
| X |
X |
X |
X |
X |
X |
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| Share
Class |
Fund/Portfolio |
A |
C |
J |
Inst. |
R-1 |
R-3 |
R-4 |
R-5 |
R-6 |
Principal
LifeTime Hybrid Income |
|
| X |
X |
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| X |
Principal
LifeTime Hybrid 2015 |
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| X |
X |
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| X |
Principal
LifeTime Hybrid 2020 |
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| X |
X |
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| X |
Principal
LifeTime Hybrid 2025 |
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| X |
X |
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| X |
Principal
LifeTime Hybrid 2030 |
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| X |
X |
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| X |
Principal
LifeTime Hybrid 2035 |
|
| X |
X |
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| X |
Principal
LifeTime Hybrid 2040 |
|
| X |
X |
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| X |
Principal
LifeTime Hybrid 2045 |
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| X |
X |
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| X |
Principal
LifeTime Hybrid 2050 |
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| X |
X |
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| X |
Principal
LifeTime Hybrid 2055 |
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| X |
X |
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| X |
Principal
LifeTime Hybrid 2060 |
|
| X |
X |
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| X |
Principal
LifeTime Hybrid 2065 |
|
| X |
X |
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| X |
Principal
LifeTime Hybrid 2070 |
|
| X |
X |
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|
| X |
Real
Estate Securities |
X |
X |
X |
X |
X |
X |
X |
X |
X |
SAM
Balanced |
X |
X |
X |
X |
X |
X |
X |
X |
|
SAM
Conservative Balanced |
X |
X |
X |
X |
X |
X |
X |
X |
|
SAM
Conservative Growth |
X |
X |
X |
X |
X |
X |
X |
X |
|
SAM
Flexible Income |
X |
X |
X |
X |
X |
X |
X |
X |
|
SAM
Strategic Growth |
X |
X |
X |
X |
X |
X |
X |
X |
|
Short-Term
Income |
X |
X |
X |
X |
X |
X |
X |
X |
|
SmallCap
|
X |
| X |
X |
X |
X |
X |
X |
X |
SmallCap
Growth I |
|
| X |
X |
X |
X |
X |
X |
X |
SmallCap
S&P 600 Index |
|
| X |
X |
X |
X |
X |
X |
X |
SmallCap
Value II |
|
| X |
X |
X |
X |
X |
X |
X |
Tax-Exempt
Bond |
X |
X |
| X |
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Each
class has different expenses. Because of these different expenses, the
investment performance of the classes will vary. For more information, including
your eligibility to purchase certain classes of shares, call Principal Funds at
1-800-222-5852.
Principal
Global Investors, LLC (“PGI” or the “Manager”) may recommend to the Board of
Directors (the “Board”), and the Board may elect, to close certain Funds to new
investors or close certain Funds to new and existing investors. PGI may make
such a recommendation when a Fund approaches a size where additional investments
in the Fund have the potential to adversely impact Fund performance and make it
increasingly difficult to keep the Fund fully invested in a manner consistent
with its investment objective. PGI may also recommend to the Board, and the
Board may elect, to close certain share classes to new or new and existing
investors.
DESCRIPTION
OF THE FUNDS’ INVESTMENTS AND RISKS
The
Registrant is a registered, open-end management investment company, commonly
called a mutual fund. The Registrant consists of multiple investment portfolios,
which are referred to as “Funds.” Each Fund has its own investment objective,
strategies, and portfolio management team. As described below, each Fund has
adopted a fundamental policy regarding diversification, as that term is used in
the Investment Company Act of 1940, as amended (the “1940 Act”), and as
interpreted, modified, or otherwise permitted by regulatory authority having
jurisdiction, from time to time.
Fund
Policies
The
investment objective, principal investment strategies, and principal risks of
each Fund are described in the Prospectus. This SAI contains supplemental
information about those strategies and risks and the types of securities that
those managing the investments of each Fund can select. Additional information
is also provided about other strategies that each Fund may use to try to achieve
its objective.
The
composition of each Fund and the techniques and strategies that those managing a
Fund’s investments may use in selecting securities will vary over time. A Fund
is not required to use all of the investment techniques and strategies available
to it in seeking its goals.
Unless
otherwise indicated, with the exception of the percentage limitations on
borrowing, the restrictions apply at the time transactions are entered into.
Accordingly, any later increase or decrease beyond the specified limitation,
resulting from market fluctuations or in a rating by a rating service, does not
require elimination of any security from a Fund’s portfolio.
The
investment objective of each Fund and, except as described below as “fundamental
restrictions,” the investment strategies described in this SAI and the
Prospectus are not fundamental and may be changed by the Board without
shareholder approval.
With
the exception of the diversification test required by the Internal Revenue Code,
the Funds will not consider collateral held in connection with securities
lending activities when applying any of the following fundamental restrictions
or any other investment restriction set forth in the Prospectus or
SAI.
Fundamental
Restrictions
Except
as specifically noted, each Fund has adopted the following fundamental
restrictions. Each fundamental restriction is a matter of fundamental policy and
may not be changed without a vote of a majority of the outstanding voting
securities of the affected Fund, except as permitted by the 1940 Act or other
governing statute and the rules thereunder, the U.S. Securities and Exchange
Commission (the “SEC”), or other regulatory agency with authority over the
Funds. The 1940 Act provides that “a vote of a majority of the outstanding
voting securities” of a Fund means the affirmative vote of the lesser of (1)
more than 50% of the outstanding Fund shares or (2) 67% or more of the Fund
shares present at a meeting if more than 50% of the outstanding Fund shares are
represented at the meeting in person or by proxy. Each share has one vote, with
fractional shares voting proportionately. Shares of all classes of a Fund will
vote together as a single class, except when otherwise required by law or as
determined by the Board.
Each
Fund:
1) may
not issue senior securities, except as permitted under the 1940 Act, as amended,
and as interpreted, modified, or otherwise permitted by regulatory authority
having jurisdiction, from time to time.
2) has
adopted a commodities policy, as follows:
(a)The
California Municipal Fund may not purchase or sell commodities, except as
permitted under the 1940 Act, as amended, and as interpreted, modified, or
otherwise permitted by regulatory authority having jurisdiction, from time to
time.
(b)The
remaining Funds may not purchase or sell commodities, except as permitted by
applicable law, regulation or regulatory authority having
jurisdiction.
3) may
not purchase or sell real estate, which term does not include securities of
companies that deal in real estate or mortgages or investments secured by real
estate or interests therein, except that each Fund reserves freedom of action to
hold and to sell real estate acquired as a result of the Fund’s ownership of
securities.
4) may
not borrow money, except as permitted under the 1940 Act, as amended, and as
interpreted, modified, or otherwise permitted by regulatory authority having
jurisdiction, from time to time.
5) may
not make loans, except as permitted under the 1940 Act, as amended, and as
interpreted, modified, or otherwise permitted by regulatory authority having
jurisdiction, from time to time.
6) has
adopted a policy regarding diversification, as follows:
(a)The
LargeCap Growth I and Real Estate Securities Funds have elected to be
non-diversified.
(b)All
other Funds have elected to be treated as a “diversified” investment company, as
that term is used in the 1940 Act, as amended, and as interpreted, modified, or
otherwise permitted by regulatory authority having jurisdiction, from time to
time.
7) has
adopted a concentration policy, as follows:
(a)The
Global Real Estate Securities and Real Estate Securities Funds will concentrate
their investments in a particular industry or group of industries as described
in the Prospectus.
(b)The
LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600
Index Funds will not concentrate their investments in a particular industry or
group of industries, except to the extent that their related Index is also so
concentrated.
(c)The
remaining Funds may not concentrate, as that term is used in the 1940 Act, as
amended, and as interpreted, modified, or otherwise permitted by regulatory
authority having jurisdiction, from time to time, its investments in a
particular industry or group of industries.
8) may
not act as an underwriter of securities, except to the extent that the Fund may
be deemed to be an underwriter in connection with the sale of securities held in
its portfolio.
Non-Fundamental
Restrictions
Except
as specifically noted, each Fund has also adopted the following non-fundamental
restrictions. Non-fundamental restrictions are not fundamental policies and may
be changed without shareholder approval. It is contrary to each Fund’s present
policy to:
1) Invest
more than 15% of its net assets in illiquid securities and in repurchase
agreements maturing in more than seven days, except to the extent permitted by
applicable law or regulatory authority having jurisdiction, from time to time;
however:
(a)The
Government Money Market and Money Market Funds may each not invest more than 5%
of its net assets in illiquid securities and in repurchase agreements maturing
in more than seven days, except to the extent permitted by applicable law or
regulatory authority having jurisdiction, from time to time.
(b)International
Fund I, the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and the
Strategic Asset Management (SAM) Portfolios have not adopted this
non-fundamental restriction.
2) Pledge,
mortgage, or hypothecate its assets, except to secure permitted
borrowings.
(a)With
respect to the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and
Strategic Asset Management (SAM) Portfolios, the deposit of underlying
securities and other assets in escrow and other collateral arrangements in
connection with transactions that involve any future payment obligation, as
permitted under the 1940 Act, as amended, and as interpreted, modified, or
otherwise permitted by any regulatory authority having jurisdiction, from time
to time, by the underlying funds are not deemed to be pledges, mortgages,
hypothecations, or other encumbrances.
(b)For
all Funds, the deposit of underlying securities and other assets in escrow and
other collateral arrangements in connection with transactions that involve any
future payment obligation, as permitted under the 1940 Act, as amended, and as
interpreted, modified, or otherwise permitted by any regulatory authority having
jurisdiction, from time to time, are not deemed to be pledges, mortgages,
hypothecations, or other encumbrances.
(c)International
Fund I has not adopted this non-fundamental restriction.
3)
Invest in companies for the purpose of exercising
control or management.
(a)International
Fund I has not adopted this non-fundamental restriction.
4) Invest
more than 25% of its assets in foreign securities; however:
(a)The
High Yield Fund may not invest more than 35% of its assets in foreign
securities;
(b)The
Diversified Income, Diversified International, Finisterre Emerging Markets Total
Return Bond, Global Emerging Markets, Global Real Estate Securities, Money
Market, and Overseas Funds each may invest up to 100% of its assets in foreign
securities;
(c)The
LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600
Index Funds each may invest in foreign securities to the extent that the
relevant index is so invested;
(d)The
California Municipal, Government & High Quality Bond, Government Money
Market, and Tax-Exempt Bond Funds may not invest in foreign securities;
and
(e)International
Fund I, the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and the
Strategic Asset Management (SAM) Portfolios have not adopted this
non-fundamental restriction.
5) Invest
more than 5% of its total assets in real estate limited partnership
interests.
(a)
The Diversified Income, Global Real Estate Securities, International I, and Real
Estate Securities Funds and the Principal LifeTime Funds, Principal LifeTime
Hybrid Funds, and the Strategic Asset Management (SAM) Portfolios have not
adopted this non-fundamental restriction.
6) Acquire
securities of other investment companies in reliance on Section 12(d)(1)(F) or
(G) of the 1940 Act, invest more than 10% of its total assets in securities of
other investment companies, invest more than 5% of its total assets in the
securities of any one investment company, or acquire more than 3% of the
outstanding voting securities of any one investment company, except in
connection with a merger, consolidation, or plan of reorganization and except as
permitted by the 1940 Act, SEC Rules adopted under the 1940 Act, or exemptions
granted by the SEC. The Fund may purchase securities of closed-end investment
companies in the open market where no underwriter or dealer’s commission or
profit, other than a customary broker’s commission, is involved.
(a)
The Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and the Strategic
Asset Management (SAM) Portfolios have not adopted this non-fundamental
restriction.
International
Fund I has adopted additional non-fundamental restrictions as noted below. The
Fund:
1) may
not purchase securities on margin, except that the Fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that margin payments in connection with futures contracts and options
on futures contracts shall not constitute purchasing securities on
margin.
2) may
not purchase any security if, as a result, more than 15% of its net assets would
be invested in securities that are deemed to be illiquid because they are
subject to legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at approximately the
prices at which they are valued.
Non-Fundamental
Policy - Rule 35d-1 under the 1940 Act - Investment Company Names
Except
as specifically noted, each Fund has also adopted a non-fundamental policy,
pursuant to SEC Rule 35d-1, which requires it, under normal circumstances, to
invest at least 80% of its net assets, plus any borrowings for investment
purposes, in the type of investments, industry, or geographic region (as
described in the Prospectus) as suggested by the name of the Fund.
This
policy applies at the time of purchase. A Fund will provide 60 days’ notice to
shareholders prior to implementing a change in this policy for the Fund. For
purposes of this non-fundamental policy, each Fund tests market capitalization
ranges monthly.
For
purposes of testing this requirement with respect to:
•Forward
foreign currency contracts and other investments that have economic
characteristics similar to foreign currency:
the value of such contracts and investments may include the Fund’s investments
in cash and/or cash equivalents to the extent such cash and/or cash equivalents
are maintained with respect to the Fund’s exposure under its forward foreign
currency contracts and similar investments.
•Derivatives
instruments:
each Fund will typically count the mark-to-market value of such derivatives.
However, a Fund may use a derivative contract’s notional value when it
determines that notional value is an appropriate measure of the Fund’s exposure
to investments. For example, with respect to single-name equity swaps that are
“fully paid” (equity swaps in which cash and/or cash equivalents are posted as
collateral for the purpose of covering the full notional value of the swap),
each Fund will count the value of such cash and/or cash
equivalents.
•Investments
in underlying funds (including ETFs):
each Fund will count all investments in an underlying fund toward the
requirement as long as 80% of the value of such underlying fund’s holdings focus
on the particular type of investment suggested by the Fund name.
The
California Municipal, Diversified Income, Diversified International, High
Income, Inflation Protection, International I, Principal Capital Appreciation,
Short-Term Income, and Tax-Exempt Bond Funds, Principal LifeTime Funds,
Principal LifeTime Hybrid Funds, and Strategic Asset Management (SAM) Portfolios
have not adopted this non-fundamental policy.
The
Money Market Fund has also not adopted this non-fundamental policy as it is
subject to Rule 2a-7 of the 1940 Act. The Government Money Market Fund has
adopted a non-fundamental investment policy to invest under normal circumstances
at least 80% of its nets assets, plus any borrowings for investment purposes, in
government securities and repurchase agreements that are collateralized by
government securities. As a government money market fund, the Government Money
Market Fund must also meet a separate requirement, pursuant to Rule 2a-7 of the
1940 Act, to invest at least 99.5% of its total assets in cash, government
securities, and or repurchase agreements that are collateralized
fully.
The
Tax-Exempt Bond Fund has also adopted a fundamental policy that requires it,
under normal circumstances, to invest at least 80% of its net assets in
investments, the income from which is exempt from federal income tax or so that
at least 80% of the income the Fund distributes will be exempt from federal
income tax.
The
California Municipal Fund has adopted a fundamental policy that requires it,
under normal circumstances, to invest at least 80% of its net assets in
investments, the income from which is exempt from federal income tax and
California state personal income tax or so that at least 80% of the income the
Fund distributes will be exempt from federal income tax and California state
personal income tax. The Fund also has adopted a non-fundamental policy that
requires it, under normal circumstances, to invest at least 80% of its net
assets in municipal obligations.
Investment
Strategies and Risks Related to Borrowing and Senior Securities,
Commodity-Related Investments, Industry Concentration, and Loans
Borrowing
and Senior Securities
Under
the 1940 Act, a fund that borrows money is required to maintain continuous asset
coverage (that is, total assets including borrowings, less liabilities exclusive
of borrowings) of 300% of the amount borrowed, with an exception for borrowings
not in excess of 5% of the fund’s total assets made for temporary or emergency
purposes. If a fund invests the proceeds of borrowing, borrowing will tend to
exaggerate the effect on net asset value of any increase or decrease in the
market value of a fund’s portfolio. If a fund invests the proceeds of borrowing,
money borrowed will be subject to interest costs that may or may not be
recovered by earnings on the securities purchased. A fund also may be required
to maintain minimum average balances in connection with a borrowing or to pay a
commitment or other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest
rate.
Commodity-Related
Investments
All
Funds Except the Finisterre Emerging Markets Total Return Bond Fund
Under
the 1940 Act, a fund’s registration statement must recite the fund’s policy with
regard to investing in commodities. Each Fund may invest in commodities to the
extent permitted by applicable law and under its fundamental and non-fundamental
policies and restrictions. Pursuant to a claim for exclusion filed with the
Commodity Futures Trading Commission (“CFTC”) on behalf of each of the Funds
under Rule 4.5, PGI is not deemed to be a “commodity pool operator” under the
Commodity Exchange Act (“CEA”) as it specifically relates to PGI’s operations
with respect to the Funds, and the Funds, therefore, are not considered
regulated commodity pools and are not subject to registration or regulation
under the CEA. The CFTC amended Rule 4.5 exclusions for certain otherwise
regulated persons from the definition of the term “commodity pool operator.”
Rule 4.5 provides that an investment company does not meet the definition of
“commodity pool operator” if its use of futures contracts, options on futures
contracts, and swaps is sufficiently limited that the fund can fall within one
of two exclusions set out in Rule 4.5. Each Fund intends to limit its use of
futures contracts, options on futures contracts, and swaps to the degree
necessary to fall within one of the two exclusions. If a Fund is unable to do
so, it may incur expenses that are necessary to comply with the CEA and rules
the CFTC has adopted under it.
Finisterre
Emerging Markets Total Return Bond Fund
Based
on its current investment strategies, the Finisterre Emerging Markets Total
Return Bond Fund is deemed to be a “commodity pool” under the CEA, and PGI is
considered a “commodity pool operator” with respect to the Fund. PGI is,
therefore, subject to dual regulation by the SEC and the CFTC. The CFTC or the
SEC could alter the regulatory requirements governing the use of commodity
futures (which include futures on broad-based securities indexes, interest rate
futures, and currency futures) or options on commodity futures or swaps
transactions by investment companies, including this Fund.
Industry
Concentration
Concentration”
means a fund invests more than 25% of its net assets in a particular industry or
group of industries. To monitor compliance with the policy regarding industry
concentration, the Funds may use the industry classifications provided by
Bloomberg, L.P., the Morgan Stanley Capital International (MSCI)/Standard &
Poor’s Global Industry Classification Standard (GICS), the Directory of
Companies Filing Annual Reports with the SEC, or any other reasonable industry
classification system.
•Each
Fund interprets its policy with respect to concentration in a particular
industry to apply only to direct investments in the securities of issuers in a
particular industry. To the extent a Fund invests its assets in underlying
investment companies, 25% or more of such Fund’s total assets may be indirectly
exposed to a particular industry or group of related industries through its
investments in one or more underlying investment companies.
•For
purposes of this restriction, government securities (such as treasury securities
or mortgage-backed securities that are issued or guaranteed by the U.S.
government, its agencies, or instrumentalities) are not subject to the Funds’
industry concentration restrictions.
•Each
Fund views its investments in tax-exempt municipal securities as not
representing interests in any particular industry or group of industries. For
information about municipal securities, see the Municipal Obligations
section.
Loans
A
Fund may not make loans to other persons, except (i) as permitted by the 1940
Act and the Rules and Regulations thereunder, or other successor law governing
the regulation of registered investment companies, or interpretations or
modifications thereof by the SEC, SEC Staff, or other authority of competent
jurisdiction, or (ii) pursuant to exemptive or other relief or permission from
the SEC, SEC Staff, or other authority of competent jurisdiction. Generally,
this means the Funds are typically permitted to make loans but must take into
account potential issues such as liquidity, valuation, and avoidance of
impermissible transactions. Examples of permissible loans include (a) the
lending of its portfolio securities, (b) the purchase of debt securities, loan
participations, and/or engaging in direct corporate loans in accordance with the
Fund’s investment objective and policies, (c) the entry into a repurchase
agreement (to the extent such entry is deemed to be a loan), and (d) loans to
affiliated investment companies to the extent permitted by the 1940 Act or any
exemptions therefrom that may be granted by the SEC.
Other
Investment Strategies and Risks
Commodity
Index-Linked Notes
A
commodity index-linked note is a type of structured note that is a derivative
instrument. Over the long term, the returns on a fund’s investments in commodity
index-linked notes are expected to exhibit low or negative correlation with
stocks and bonds, which means the prices of commodity-linked notes may move in a
different direction than investments in traditional equity and debt securities.
As an example, during periods of rising inflation, debt securities have
historically tended to decrease in value and the prices of certain commodities,
such as oil and metals, have historically tended to increase. The reverse may be
true during “bull markets,” when the value of traditional securities such as
stocks and bonds is increasing. Under such economic conditions, a fund’s
investments in commodity index-linked notes may be expected not to perform as
well as investments in traditional securities. There can be no assurance,
however, that derivative instruments will perform in that manner in the future
and, at certain times in the past, the price movements of commodity-linked
investments have been parallel to debt and equity securities. If commodities
prices move in tandem with the prices of financial assets, they may not provide
overall portfolio diversification benefits.
Convertible
Securities
A
convertible security is a bond, debenture, note, preferred stock, or other
security that entitles the holder to acquire common stock or other equity
securities of the same or a different issuer. A convertible security generally
entitles the holder to receive interest paid or accrued until the convertible
security matures or is redeemed, converted or exchanged. Before conversion,
convertible securities have characteristics similar to non-convertible debt or
preferred securities, as applicable. Convertible securities rank senior to
common stock in a corporation’s capital structure and, therefore, generally
entail less risk than the corporation’s common stock, although the extent to
which such risk is reduced depends in large measure upon the degree to which the
convertible security sells above its value as a fixed income security.
Convertible securities are subordinate in rank to any senior debt obligations of
the issuer, and, therefore, an issuer’s convertible securities entail more risk
than its debt obligations. Convertible securities generally offer lower interest
or dividend yields than non-convertible debt securities of similar credit
quality because of the potential for capital appreciation. In addition,
convertible securities are often lower-rated securities.
Because
of the conversion feature, the price of the convertible security will normally
fluctuate in some proportion to changes in the price of the underlying asset,
and as such is subject to risks relating to the activities of the issuer and/or
general market and economic conditions. The income component of a convertible
security may tend to cushion the security against declines in the price of the
underlying asset. However, the income component of convertible securities causes
fluctuations based upon changes in interest rates and the credit quality of the
issuer.
If
the conversion value of a convertible security increases to a point that
approximates or exceeds its investment value, the value of the security will be
principally influenced by its conversion value. A convertible security will sell
at a premium over its conversion value to the extent investors place value on
the right to acquire the underlying common stock while holding an
income-producing security.
A
convertible security may be subject to redemption at the option of the issuer at
a predetermined price. If a convertible security held by a fund is called for
redemption, the fund would be required to permit the issuer to redeem the
security and convert it to underlying common stock, or would sell the
convertible security to a third party, which may have an adverse effect on the
fund’s ability to achieve its investment objective.
Synthetic
Convertibles
A
“synthetic” convertible security may be created by combining separate securities
that possess the two principal characteristics of a traditional convertible
security, i.e., an income-producing security (“income-producing component”) and
the right to acquire an equity security (“convertible component”). The
income-producing component is achieved by investing in non-convertible,
income-producing securities such as bonds, preferred stocks and money market
instruments, which may be represented by derivative instruments. The convertible
component is achieved by investing in securities or instruments such as warrants
or options to buy common stock at a certain exercise price, or options on a
stock index. Unlike a traditional convertible security, which is a single
security having a single market value, a synthetic convertible comprises two or
more separate securities, each with its own market value. Therefore, the “market
value” of a synthetic convertible security is the sum of the values of its
income-producing component and its convertible component. For this reason, the
values of a synthetic convertible security and a traditional convertible
security may respond differently to market fluctuations.
More
flexibility is possible in the assembly of a synthetic convertible security than
in the purchase of a convertible security. Although synthetic convertible
securities may be selected where the two components are issued by a single
issuer, thus making the synthetic convertible security similar to the
traditional convertible security, the character of a synthetic convertible
security allows the combination of components representing distinct issuers,
when such a combination may better achieve a fund’s investment objective. A
synthetic convertible security also is a more flexible investment in that its
two components may be purchased separately. For example, a fund may purchase a
warrant for inclusion in a synthetic convertible security but temporarily hold
short-term investments while postponing the purchase of a corresponding bond
pending development of more favorable market conditions.
A
holder of a synthetic convertible security faces the risk of a decline in the
price of the security or the level of the index involved in the convertible
component, causing a decline in the value of the security or instrument, such as
a call option or warrant, purchased to create the synthetic convertible
security. Should the price of the stock fall below the exercise price and remain
there throughout the exercise period, the entire amount paid for the call option
or warrant would be lost. Because a synthetic convertible security includes the
income-producing component as well, the holder of a synthetic convertible
security also faces the risk that interest rates will rise, causing a decline in
the value of the income-producing instrument.
A
fund also may purchase synthetic convertible securities created by other
parties, including convertible structured notes. Convertible structured notes
are income-producing debentures linked to equity and are typically issued by
investment banks. Convertible structured notes have the attributes of a
convertible security; however, the investment bank that issues the convertible
note, rather than the issuer of the underlying common stock into which the note
is convertible, assumes credit risk associated with the underlying investment,
and the fund in turn assumes credit risk associated with the convertible
note.
Corporate
Reorganizations
Funds
may invest in securities for which a tender or exchange offer has been made or
announced and in securities of companies for which a merger, consolidation,
liquidation, or reorganization proposal has been announced if, in the judgment
of those managing the fund’s investments, there is a reasonable prospect of
capital appreciation significantly greater than the brokerage and other
transaction expenses involved. The primary risk of such investments is that if
the contemplated transaction is abandoned, revised, delayed, or becomes subject
to unanticipated uncertainties, including, for example, new or revised laws or
regulations, the market price of the securities may decline below the purchase
price paid by a fund.
In
general, securities that are the subject of such an offer or proposal sell at a
premium to their historic market price immediately prior to the announcement of
the offer or proposal. However, the increased market price of such securities
may discount what the stated or appraised value of the security would be if the
contemplated transaction were approved or consummated. Such investments may be
advantageous when the discount: significantly overstates the risk of the
contingencies involved; significantly undervalues the securities, assets, or
cash to be received by shareholders of the prospective company as a result of
the contemplated transaction; or fails adequately to recognize the possibility
that the offer or proposal may be replaced or superseded by an offer or proposal
of greater value. The evaluation of such contingencies requires unusually broad
knowledge and experience on the part of those managing the fund’s investments,
which must appraise not only the value of the issuer and its component
businesses, but also the financial resources and business motivation of the
offer or proposal as well as the dynamics of the business climate when the offer
or proposal is in process.
Cyber
Security Issues
Each
Fund and its service providers may be subject to cyber security risks. Those
risks include, among others, theft, misuse or corruption of data maintained
online or digitally; denial of service attacks on websites; the loss or
unauthorized release of confidential and proprietary information; operational
disruption; or various other forms of cyber security breaches. Cyber-attacks
against or security breakdowns of a Fund or its service providers may harm the
Fund and its shareholders, potentially resulting in, among other things,
financial losses, the inability of Fund shareholders to transact business,
inability to calculate a fund’s NAV, violations of applicable privacy and other
laws, regulatory fines, penalties, reputational damage, reimbursement or other
compensation costs, and/or additional compliance and remediation costs. Cyber
security risks may also affect issuers of securities in which a fund invests,
potentially causing the fund’s investment in such issuers to lose value. Despite
risk management processes, there can be no guarantee that a fund will avoid
losses relating to cyber security risks or other information security
breaches.
Derivatives
Options
on Securities and Securities Indices
Funds
may write (sell) and purchase call and put options on securities and on
securities indices. Funds may engage in these transactions to hedge against a
decline in the value of securities owned or an increase in the price of
securities that the Fund plans to purchase, or to generate additional
revenue.
•Exchange-Traded
Options. An exchange-traded option may be closed out only on an exchange that
generally provides a liquid secondary market for an option of the same series.
If a liquid secondary market for an exchange-traded option does not exist, it
might not be possible to effect a closing transaction with respect to a
particular option, with the result that a Fund would have to exercise the option
in order to consummate the transaction.
•Over
the Counter (“OTC”) Options. OTC options differ from exchange-traded options in
that they are two-party contracts, with price and other terms negotiated between
buyer and seller, and generally do not have as much market liquidity as
exchange-traded options. An OTC option (an option not traded on an established
exchange) may be closed out only by agreement with the other party to the
original option transaction. With OTC options, a Fund is at risk that the other
party to the transaction will default on its obligations or will not permit the
Fund to terminate the transaction before its scheduled maturity. While a Fund
will seek to enter into OTC options only with dealers who agree to or are
expected to be capable of entering into closing transactions with a Fund, there
can be no assurance that a Fund will be able to liquidate an OTC option at a
favorable price at any time prior to its expiration. OTC options are not subject
to the protections afforded purchasers of listed options by the Options Clearing
Corporation or other clearing organizations.
•FLexible
EXchange Options (“FLEX Options”). FLEX Options are customized options contracts
available through national securities exchanges that are guaranteed for
settlement by the Options Clearing Corporation (“OCC”), a market clearinghouse.
FLEX Options provide investors with the ability to customize terms of an option,
including exercise prices, exercise styles (European-style options, which are
exercisable only at the expiration date, versus American-style options, which
are exercisable any time prior to the expiration date), and expiration dates,
while achieving price discovery in competitive, transparent auction markets and
avoiding the counterparty exposure of the OTC option positions.
There
is no assurance that a liquid secondary market on an options exchange will exist
for any particular option, or at any particular time, and for some options no
secondary market on an exchange or elsewhere may exist. If a Fund is unable to
close out a call option on securities that it has written before the option is
exercised, the Fund may be required to purchase the optioned securities in order
to satisfy its obligation under the option to deliver such securities. If the
Fund is unable to effect a closing sale transaction with respect to options on
securities that it has purchased, it would have to exercise the option in order
to realize any profit and would incur transaction costs upon the purchase and
sale of the underlying securities. The writing and purchasing of options is a
highly specialized activity that involves investment techniques and risks
different from those associated with ordinary portfolio securities transactions.
Imperfect correlation between the options and securities markets may detract
from the effectiveness of attempted hedging. Options transactions may result in
significantly higher transaction costs and portfolio turnover for a
Fund.
Writing
Call and Put Options. When
a Fund writes a call option, it gives the purchaser of the option the right to
buy a specific security at a specified price at any time before the option
expires. When a Fund writes a put option, it gives the purchaser of the option
the right to sell to the Fund a specific security at a specified price at any
time before the option expires. In both situations, the Fund receives a premium
from the purchaser of the option.
The
premium received by a Fund reflects, among other factors, the current market
price of the underlying security, the relationship of the exercise price to the
market price, the time period until the expiration of the option and interest
rates. The premium generates additional income for the Fund if the option
expires unexercised or is closed out at a profit. By writing a call, a Fund
limits its opportunity to profit from any increase in the market value of the
underlying security above the exercise price of the option, but it retains the
risk of loss if the price of the security should decline. By writing a put, a
Fund assumes the risk that it may have to purchase the underlying security at a
price that may be higher than its market value at time of exercise.
A
Fund usually owns the underlying security covered by any outstanding call
option. With respect to an outstanding put option, a Fund deposits and maintains
with its custodian or segregates on the Fund’s records, cash, or other liquid
assets with a value at least equal to the market value of the option that was
written.
Once
a Fund has written an option, it may terminate its obligation before the option
is exercised. The Fund executes a closing transaction by purchasing an option of
the same series as the option previously written. The Fund has a gain or loss
depending on whether the premium received when the option was written exceeds
the closing purchase price plus related transaction costs.
Purchasing
Call and Put Options. When
a Fund purchases a call option, it receives, in return for the premium it pays,
the right to buy from the writer of the option the underlying security at a
specified price at any time before the option expires. A Fund purchases call
options in anticipation of an increase in the market value of securities that it
intends ultimately to buy. During the life of the call option, the Fund is able
to buy the underlying security at the exercise price regardless of any increase
in the market price of the underlying security. For a call option to result in a
gain, the market price of the underlying security must exceed the sum of the
exercise price, the premium paid, and transaction costs.
When
a Fund purchases a put option, it receives, in return for the premium it pays,
the right to sell to the writer of the option the underlying security at a
specified price at any time before the option expires. A Fund purchases put
options in anticipation of a decline in the market value of the underlying
security. During the life of the put option, the Fund is able to sell the
underlying security at the exercise price regardless of any decline in the
market price of the underlying security. In order for a put option to result in
a gain, the market price of the underlying security must decline, during the
option period, below the exercise price enough to cover the premium and
transaction costs.
Once
a Fund purchases an option, it may close out its position by selling an option
of the same series as the option previously purchased. The Fund has a gain or
loss depending on whether the closing sale price exceeds the initial purchase
price plus related transaction costs.
Options
on Securities Indices. Each
Fund may purchase and sell put and call options on any securities index based on
securities in which the Fund may invest. Securities index options are designed
to reflect price fluctuations in a group of securities or segment of the
securities market rather than price fluctuations in a single security. Options
on securities indices are similar to options on securities, except that the
exercise of securities index options requires cash payments and does not involve
the actual purchase or sale of securities. Each Fund engages in transactions in
put and call options on securities indices for the same purposes as they engage
in transactions in options on securities. When a Fund writes call options on
securities indices, it holds in its portfolio underlying securities which, in
the judgment of those managing the fund’s investments, correlate closely with
the securities index and which have a value at least equal to the aggregate
amount of the securities index options.
Index
Warrants. A
Fund may purchase put warrants and call warrants whose values vary depending on
the change in the value of one or more specified securities indices (“index
warrants”). Index warrants are generally issued by banks or other financial
institutions and give the holder the right, at any time during the term of the
warrant, to receive upon exercise of the warrant a cash payment from the issuer
based on the value of the underlying index at the time of exercise. In general,
if the value of the underlying index rises above the exercise price of the index
warrant, the holder of a call warrant will be entitled to receive a cash payment
from the issuer upon exercise based on the difference between the value of the
index and the exercise price of the warrant; if the value of the underlying
index falls, the holder of a put warrant will be entitled to receive a cash
payment from the issuer upon exercise based on the difference between the
exercise price of the warrant and the value of the index. The holder of a
warrant would not be entitled to any payments from the issuer at a time when, in
the case of a call warrant, the exercise price is more than the value of the
underlying index, or in the case of a put warrant, the exercise price is less
than the value of the underlying index. If a Fund were not to exercise an index
warrant prior to its expiration, then a Fund would lose the amount of the
purchase price paid by it for the warrant. A Fund will normally use index
warrants in a manner similar to its use of options on securities
indices.
Risks
Associated with Option Transactions. An
option position may be closed out only on an exchange that provides a secondary
market for an option of the same series. A Fund generally purchases or writes
only those options for which there appears to be an active secondary market.
However, there is no assurance that a liquid secondary market on an exchange
exists for any particular option, or at any particular time. If a Fund is unable
to effect closing sale transactions in options it has purchased, it has to
exercise its options in order to realize any profit and may incur transaction
costs upon the purchase or sale of underlying securities. If the Fund is unable
to effect a closing purchase transaction for a covered option that it has
written, it is not able to sell the underlying securities until the option
expires or is exercised. A Fund’s ability to terminate option positions
established in the over-the-counter market may be more limited than for
exchange-traded options and may also involve the risk that broker-dealers
participating in such transactions might fail to meet their
obligations.
Futures
Contracts and Options on Futures Contracts
Funds
may purchase and sell futures contracts of many types, including for example,
futures contracts covering indexes, financial instruments, and foreign
currencies. Funds may purchase and sell financial futures contracts and options
on those contracts. Financial futures contracts are commodities contracts based
on financial instruments such as U.S. Treasury bonds or bills or on securities
indices such as the S&P 500 Index. The Commodity Futures Trading Commission
regulates futures contracts, options on futures contracts, and the commodity
exchanges on which they are traded. Through the purchase and sale of futures
contracts and related options, a Fund may seek to hedge against a decline in the
value of securities owned by the Fund or an increase in the price of securities
that the Fund plans to purchase. Funds may also purchase and sell futures
contracts and related options to maintain cash reserves while simulating full
investment in securities and to keep substantially all of its assets exposed to
the market. Funds may enter into futures contracts and related options
transactions both for hedging and non-hedging purposes.
Futures
Contracts. Funds
may purchase or sell a futures contract to gain exposure to a particular market
asset without directly purchasing that asset. When a Fund sells a futures
contract based on a financial instrument, the Fund is obligated to deliver that
kind of instrument at a specified future time for a specified price. When a Fund
purchases that kind of contract, it is obligated to take delivery of the
instrument at a specified time and to pay the specified price. In most
instances, these contracts are closed out by entering into an offsetting
transaction before the settlement date. The Fund realizes a gain or loss
depending on whether the price of an offsetting purchase plus transaction costs
are less or more than the price of the initial sale or on whether the price of
an offsetting sale is more or less than the price of the initial purchase plus
transaction costs. Although the Fund usually liquidates futures contracts on
financial instruments, by entering into an offsetting transaction before the
settlement date, they may make or take delivery of the underlying securities
when it appears economically advantageous to do so.
A
futures contract based on a securities index provides for the purchase or sale
of a group of securities at a specified future time for a specified price. These
contracts do not require actual delivery of securities but result in a cash
settlement. The amount of the settlement is based on the difference in value of
the index between the time the contract was entered into and the time it is
liquidated (at its expiration or earlier if it is closed out by entering into an
offsetting transaction).
When
a Fund purchases or sells a futures contract, it pays a commission to the
futures commission merchant through which the Fund executes the transaction.
When entering into a futures transaction, the Fund does not pay the execution
price, as it does when it purchases a security, or a premium, as it does when it
purchases an option. Instead, the Fund deposits an amount of cash or other
liquid assets (generally about 5% of the futures contract amount) with its
futures commission merchant. This amount is known as “initial margin.” In
contrast to the use of margin account to purchase securities, the Fund’s deposit
of initial margin does not constitute the borrowing of money to finance the
transaction in the futures contract. The initial margin represents a good faith
deposit that helps assure the Fund’s performance of the transaction. The futures
commission merchant returns the initial margin to the Fund upon termination of
the futures contract if the Fund has satisfied all its contractual
obligations.
Subsequent
payments to and from the futures commission merchant, known as “variation
margin,” are required to be made on a daily basis as the price of the futures
contract fluctuates, a process known as “marking to market.” The fluctuations
make the long or short positions in the futures contract more or less valuable.
If the position is closed out by taking an opposite position prior to the
settlement date of the futures contract, a final determination of variation
margin is made. Any additional cash is required to be paid to or released by the
broker and the Fund realizes a loss or gain.
In
using futures contracts, a Fund may seek to establish with more certainty than
would otherwise be possible the effective price of or rate of return on
portfolio securities or securities that the Fund proposes to acquire. A Fund,
for example, sells futures contracts in anticipation of a rise in interest rates
that would cause a decline in the value of its debt investments. When this kind
of hedging is successful, the futures contract increases in value when the
Fund’s debt securities decline in value and thereby keeps the Fund’s net asset
value from declining as much as it otherwise would. A Fund may also sell futures
contracts on securities indices in anticipation of or during a stock market
decline in an endeavor to offset a decrease in the market value of its equity
investments. When a Fund is not fully invested and anticipates an increase in
the cost of securities it intends to purchase, it may purchase financial futures
contracts.
When
increases in the prices of equities are expected, a Fund may purchase futures
contracts on securities indices in order to gain rapid market exposure that may
partially or entirely offset increases in the cost of the equity securities it
intends to purchase.
Options
on Futures Contracts. Funds
may also purchase and write call and put options on futures contracts. A call
option on a futures contract gives the purchaser the right, in return for the
premium paid, to purchase a futures contract (assume a long position) at a
specified exercise price at any time before the option expires. A put option
gives the purchaser the right, in return for the premium paid, to sell a futures
contract (assume a short position), for a specified exercise price, at any time
before the option expires.
Upon
the exercise of a call, the writer of the option is obligated to sell the
futures contract (to deliver a long position to the option holder) at the option
exercise price, which will presumably be lower than the current market price of
the contract in the futures market. Upon exercise of a put, the writer of the
option is obligated to purchase the futures contract (deliver a short position
to the option holder) at the option exercise price, which will presumably be
higher than the current market price of the contract in the futures market.
However, as with the trading of futures, most options are closed out prior to
their expiration by the purchase or sale of an offsetting option at a market
price that reflects an increase or a decrease from the premium originally paid.
Options on futures can be used to hedge substantially the same risks addressed
by the direct purchase or sale of the underlying futures contracts. For example,
if a Fund anticipates a rise in interest rates and a decline in the market value
of the debt securities in its portfolio, it might purchase put options or write
call options on futures contracts instead of selling futures
contracts.
If
a Fund purchases an option on a futures contract, it may obtain benefits similar
to those that would result if it held the futures position itself. But in
contrast to a futures transaction, the purchase of an option involves the
payment of a premium in addition to transaction costs. In the event of an
adverse market movement, however, the Fund is not subject to a risk of loss on
the option transaction beyond the price of the premium it paid plus its
transaction costs.
When
a Fund writes an option on a futures contract, the premium paid by the purchaser
is deposited with the Fund’s custodian. The Fund must maintain with its futures
commission merchant all or a portion of the initial margin requirement on the
underlying futures contract. It assumes a risk of adverse movement in the price
of the underlying futures contract comparable to that involved in holding a
futures position. Subsequent payments to and from the futures commission
merchant, similar to variation margin payments, are made as the premium and the
initial margin requirements are marked to market daily. The premium may
partially offset an unfavorable change in the value of portfolio securities, if
the option is not exercised, or it may reduce the amount of any loss incurred by
the Fund if the option is exercised.
Risks
Associated with Futures Transactions. There
are many risks associated with transactions in futures contracts and related
options. The value of the assets that are the subject of the futures contract
may not move in the anticipated direction. A Fund’s successful use of futures
contracts is subject to the ability of those managing the fund’s investments to
predict correctly the factors affecting the market values of the Fund’s
portfolio securities. For example, if a Fund is hedged against the possibility
of an increase in interest rates which would adversely affect debt securities
held by the Fund and the prices of those debt securities instead increases, the
Fund loses part or all of the benefit of the increased value of its securities
it hedged because it has offsetting losses in its futures positions. Other risks
include imperfect correlation between price movements in the financial
instrument or securities index underlying the futures contract, on the one hand,
and the price movements of either the futures contract itself or the securities
held by the Fund, on the other hand. If the prices do not move in the same
direction or to the same extent, the transaction may result in trading
losses.
Prior
to exercise or expiration, a position in futures may be terminated only by
entering into a closing purchase or sale transaction. This requires a secondary
market on the relevant contract market. A Fund enters into a futures contract or
related option only if there appears to be a liquid secondary market. There can
be no assurance, however, that such a liquid secondary market exists for any
particular futures contract or related option at any specific time. Thus, it may
not be possible to close out a futures position once it has been established.
Under such circumstances, the Fund continues to be required to make daily cash
payments of variation margin in the event of adverse price movements. In such
situations, if the Fund has insufficient cash, it may be required to sell
portfolio securities to meet daily variation margin requirements at a time when
it may be disadvantageous to do so. In addition, the Fund may be required to
perform under the terms of the futures contracts it holds. The inability to
close out futures positions also could have an adverse impact on the Fund’s
ability effectively to hedge its portfolio.
Most
United States futures exchanges limit the amount of fluctuation permitted in
futures contract prices during a single trading day. This daily limit
establishes the maximum amount that the price of a futures contract may vary
either up or down from the previous day’s settlement price at the end of a
trading session. Once the daily limit has been reached in a particular type of
contract, no more trades may be made on that day at a price beyond that limit.
The daily limit governs only price movements during a particular trading day and
therefore does not limit potential losses because the limit may prevent the
liquidation of unfavorable positions. Futures contract prices have occasionally
moved to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures positions and
subjecting some futures traders to substantial losses.
Debt-Linked
and Equity-Linked Securities
Each
Fund may invest in debt-linked and equity-linked securities. The investment
results of such instruments are intended to correspond generally to the
performance of one or more specified equity or debt securities, or of a specific
index or analogous “basket” of equity or debt securities. Therefore, investing
in these instruments involves risks similar to the risks of investing in the
underlying stocks or bonds directly. In addition, a Fund bears the risk that the
issuer of an equity- or debt-linked security may default on its obligations
under the instrument. Equity- and debt-linked securities are often used for many
of the same purposes as, and share many of the same risks with, other derivative
instruments as well as structured notes. Like many derivatives and structured
notes, equity- and debt-linked securities may be considered illiquid,
potentially limiting a Fund’s ability to dispose of them.
Hybrid
Instruments
A
hybrid instrument is a type of derivative that combines a traditional stock or
bond with an option or forward contract. Generally, the principal amount, amount
payable upon maturity or redemption, or interest rate of a hybrid is tied
(positively or negatively) to the price of some currency or securities index or
another interest rate or some other economic factor (each a “benchmark”). The
interest rate or (unlike most fixed income securities) the principal amount
payable at maturity of a hybrid security may be increased or decreased,
depending on changes in the value of the benchmark. An example of a hybrid could
be a bond issued by an oil company that pays a small base level of interest with
additional interest that accrues in correlation to the extent to which oil
prices exceed a certain predetermined level. Such a hybrid instrument would be
economically similar to a combination of a bond and a call option on
oil.
Hybrids
can be used as an efficient means of pursuing a variety of investment goals,
including currency hedging, duration management and increased total return.
Hybrids may not bear interest or pay dividends. The value of a hybrid or its
interest rate may be a multiple of a benchmark and, as a result, may be
leveraged and move (up or down) more steeply and rapidly than the benchmark.
These benchmarks may be sensitive to economic and political events, such as
currency devaluations, which cannot be readily foreseen by the purchaser of a
hybrid. Under certain conditions, the redemption value of a hybrid could be
zero. Thus, an investment in a hybrid may entail significant market risks that
are not associated with a similar investment in a traditional, U.S.
dollar-denominated bond that has a fixed principal amount and pays a fixed rate
or floating rate of interest. The purchase of hybrids also exposes the Fund to
the credit risk of the issuer of the hybrids. These risks may cause significant
fluctuations in the NAV of a Fund.
Certain
hybrid instruments may provide exposure to the commodities markets. These are
derivative securities with one or more commodity-linked components that have
payment features similar to commodity futures contracts, commodity options or
similar instruments. Commodity-linked hybrid instruments may be either equity or
debt securities, leveraged or unleveraged, and are considered hybrid instruments
because they have both security and commodity-like characteristics. A portion of
the value of these instruments may be derived from the value of a commodity,
futures contract, index or other economic variable and therefore are subject to
many of the same risks as investments in those underlying securities,
instruments or commodities.
Certain
issuers of structured products such as hybrid instruments may be deemed to be
investment companies as defined in the 1940 Act. As a result, a Fund’s
investments in these products may be subject to limits applicable to investments
in investment companies and may be subject to restrictions contained in the 1940
Act.
Spread
Transactions
Funds
may engage in spread trades, which typically represent a simultaneous purchase
and sale of two different contracts designed to capture the change in the
relationship in price between the two contracts. Spread transactions are
typically accompanied by lower margin requirements and lower volatility than an
outright purchase. Funds may purchase spread options. The purchase of a covered
spread option gives the Fund the right to put, or sell, a security that it owns
at a fixed dollar spread or fixed yield spread in relationship to another
security that the Fund does not own, but which is used as a benchmark. The risk
to the Fund in purchasing covered spread options is the cost of the premium paid
for the spread option and any transaction costs. In addition, there is no
assurance that closing transactions will be available. The security covering the
spread option is maintained in segregated accounts either with the Fund’s
custodian or on the Fund’s records. The Funds do not consider a security covered
by a spread option to be “pledged” as that term is used in the Fund’s policy
limiting the pledging or mortgaging of assets. The purchase of spread options
can be used to protect Funds against adverse changes in prevailing credit
quality spreads, i.e., the yield spread between high quality and lower quality
securities.
Swap
Agreements and Options on Swap Agreements
Funds
may engage in swap transactions, including, but not limited to, swap agreements
on interest rates, security or commodity indexes, specific securities and
commodities, and credit and event-linked swaps, to the extent permitted by its
investment restrictions. To the extent a Fund may invest in foreign
currency-denominated securities, it may also invest in currency swap agreements
and currency exchange rate swap agreements. Funds may also enter into options on
swap agreements (“swap options”).
Funds
may enter into swap transactions for any legal purpose consistent with its
investment objectives and policies, such as for the purpose of attempting to
obtain or preserve a particular return or spread at a lower cost than obtaining
a return or spread through purchases and/or sales of instruments in other
markets; to protect against currency fluctuations; as a duration management
technique; to protect against any increase in the price of securities a Fund
anticipates purchasing at a later date; to gain exposure to one or more
securities, currencies, or interest rates; to take advantage of perceived
mispricing in the securities markets; or to gain exposure to certain markets in
the most economical way possible.
Swap
agreements are two party contracts entered into primarily by institutional
investors for periods ranging from a few weeks to more than one year. In a
standard “swap” transaction, two parties agree to exchange the returns (or
differentials in rates of return) earned or realized on particular predetermined
investments or instruments, which may be adjusted for an interest factor. The
gross returns to be exchanged or “swapped” between the parties are generally
calculated with respect to a “notional amount,” i.e., the return on or increase
in value of a particular dollar amount invested at a particular interest rate,
in a particular foreign currency, or in a “basket” of securities or commodities
representing a particular index.
•Interest
Rate Swaps. Interest rate swaps involve the exchange by a Fund with another
party of their respective commitments to pay or receive interest (for example,
an exchange of floating rate payments for fixed rate payments with respect to a
notional amount of principal). Forms of swap agreements also include interest
rate caps, under which, in return for a premium, one party agrees to make
payments to the other to the extent that interest rates exceed a specified rate,
or “cap”; interest rate floors, under which, in return for a premium, one party
agrees to make payments to the other to the extent that interest rates fall
below a specified rate, or “floor”; and interest rate collars, under which a
party sells a cap and purchases a floor or vice versa in an attempt to protect
itself against interest rate movements exceeding given minimum or maximum
levels.
•Currency
Swaps. A currency swap is an agreement to exchange cash flows on a notional
amount based on changes in the relative values of the specified
currencies.
•Index
Swaps. An index swap is an agreement to make or receive payments based on the
different returns that would be achieved if a notional amount were invested in a
specified basket of securities (such as the S&P 500 Index) or in some other
investment (such as U.S. Treasury Securities).
•Total
Return Swaps. A total return swap is an agreement to make payments of the total
return from a specified asset or instrument (or a basket of such instruments)
during the specified period, in return for payments equal to a fixed or floating
rate of interest or the total return from another specified asset or instrument.
Alternatively, a total return swap can be structured so that one party will make
payments to the other party if the value of the relevant asset or instrument
increases, but receive payments from the other party if the value of that asset
or instrument decreases.
•Commodity
Swap Agreements. Consistent with a Fund’s investment objectives and general
investment policies, certain of the Funds may invest in commodity swap
agreements. For example, an investment in a commodity swap agreement may involve
the exchange of floating-rate interest payments for the total return on a
commodity index. In a total return commodity swap, a Fund will receive the price
appreciation of a commodity index, a portion of the index, or a single commodity
in exchange for paying an agreed-upon fee. If the commodity swap is for one
period, a Fund may pay a fixed fee, established at the outset of the swap.
However, if the term of the commodity swap is for more than one period, with
interim swap payments, a Fund may pay an adjustable or floating fee. With a
“floating” rate, the fee may be pegged to a base rate, such as the Secured
Overnight Financing Rate (SOFR) or a similar reference rate, and is adjusted
each period. Therefore, if interest rates increase over the term of the swap
contract, a Fund may be required to pay a higher fee at each swap reset
date.
•Credit
Default Swap Agreements. The “buyer” in a credit default contract is obligated
to pay the “seller” a periodic stream of payments over the term of the contract
provided that no event of default on an underlying reference obligation has
occurred. If an event of default occurs, the seller must pay the buyer the full
notional value, or “par value,” of the reference obligation in exchange for the
reference obligation. A Fund may be either the buyer or seller in a credit
default swap transaction. If a Fund is a buyer and no event of default occurs,
the Fund will lose its investment and recover nothing. However, if an event of
default occurs, the Fund (if the buyer) will receive the full notional value of
the reference obligation that may have little or no value. As a seller, a Fund
receives a fixed rate of income throughout the term of the contract, which
typically is between six months and five years, provided that there is no
default event. If an event of default occurs, the seller must pay the buyer the
full notional value of the reference obligation. In addition, collateral posting
requirements are individually negotiated and there is no regulatory requirement
that a counterparty post collateral to secure its obligations or a specified
amount of cash, depending upon the terms of the swap, under a credit default
swap. Furthermore, there is no requirement that a party be informed in advance
when a credit default swap agreement is sold. Accordingly, a Fund may have
difficulty identifying the party responsible for payment of its claims. The
notional value of credit default swaps with respect to a particular investment
is often larger than the total par value of such investment outstanding and, in
event of a default, there may be difficulties in making the required deliveries
of the reference investments, possibly delaying payments.
Funds
may invest in derivative instruments that provide exposure to one or more credit
default swaps. For example, a Fund may invest in a derivative instrument known
as the Loan-Only Credit Default Swap Index (“LCDX”), a tradable index with 100
equally-weighted underlying single-name loan-only credit default swaps (“LCDS”).
Each underlying LCDS references an issuer whose loans trade in the secondary
leveraged loan market. A Fund can either buy the index (take on credit exposure)
or sell the index (pass credit exposure to a counterparty). While investing in
these types of derivatives will increase the universe of debt securities to
which a Fund is exposed, such investments entail additional risks that are not
typically associated with investments in other debt securities. Credit default
swaps and other derivative instruments related to loans are subject to the risks
associated with loans generally, as well as the risks of derivative
transactions.
•Investment
Pools. Funds may invest in publicly or privately issued interests in investment
pools whose underlying assets are credit default, credit-linked, interest rate,
currency exchange, equity-linked or other types of swap contracts and related
underlying securities or securities loan agreements. The pools’ investment
results may be designed to correspond generally to the performance of a
specified securities index or “basket” of securities, or sometimes a single
security. These types of pools are often used to gain exposure to multiple
securities with a smaller investment than would be required to invest directly
in the individual securities. They also may be used to gain exposure to foreign
securities markets without investing in the foreign securities themselves and/or
the relevant foreign market. To the extent that a Fund invests in pools of swaps
and related underlying securities or securities loan agreements whose return
corresponds to the performance of a foreign securities index or one or more
foreign securities, investing in such pools will involve risks similar to the
risks of investing in foreign securities. In addition to the risks associated
with investing in swaps generally, a Fund bears the risks and costs generally
associated with investing in pooled investment vehicles, such as paying the fees
and expenses of the pool and the risk that the pool or the operator of the pool
may default on its obligations to the holder of interests in the pool, such as a
Fund. Interests in privately offered investment pools of swaps may be considered
illiquid.
•Contracts
for Differences. “Contracts for differences” are swap arrangements in which a
Fund may agree with a counterparty that its return (or loss) will be based on
the relative performance of two different groups or “baskets” of securities. For
example, as to one of the baskets, a Fund’s return is based on theoretical long
futures positions in the securities comprising that basket, and as to the other
basket, a Fund’s return is based on theoretical short futures positions in the
securities comprising that other basket. The notional sizes of the baskets will
not necessarily be the same, which can give rise to investment leverage. Funds
may also use actual long and short futures positions to achieve the market
exposure(s) as contracts for differences. Funds may enter into swaps and
contracts for differences for investment return, hedging, risk management and
for investment leverage.
•Swaptions.
A swap option (also known as “swaptions”) is a contract that gives a
counterparty the right (but not the obligation) in return for payment of a
premium, to enter into a new swap agreement or to shorten, extend, cancel, or
otherwise modify an existing swap agreement, at some designated future time on
specified terms. The buyer and seller of the swap option agree on the strike
price, length of the option period, the term of the swap, notional amount,
amortization and frequency of settlement. Funds may engage in swap options for
hedging purposes or in an attempt to manage and mitigate credit and interest
rate risk. Funds may write (sell) and purchase put and call swap options. The
use of swap options involves risks, including, among others, imperfect
correlation between movements of the price of the swap options and the price of
the securities, indices or other assets serving as reference instruments for the
swap option, reducing the effectiveness of the instrument for hedging
or
investment
purposes.
Obligations
under Swap Agreements. The
swap agreements a Fund enters into settle in cash and, therefore, provide for
calculation of the obligations of the parties to the agreement on a “net basis.”
Consequently, a Fund's current obligations (or rights) under such a swap
agreement will generally be equal only to the net amount to be paid or received
under the agreement based on the relative values of the positions held by each
party to the agreement (the “net amount”). A Fund's current obligations under
such a swap agreement will be accrued daily (offset against any amounts owed to
the Fund).
Risks
Associated with Swap Agreements. Swaps
can be highly volatile and may have a considerable impact on a Fund’s
performance, as the potential gain or loss on any swap transaction is not
subject to any fixed limit. Whether a Fund’s use of swap agreements or swap
options will be successful in furthering its investment objective of total
return will depend on the ability of those managing the fund’s investments to
predict correctly whether certain types of investments are likely to produce
greater returns than other investments. Because they are two party contracts and
because they may have terms of greater than seven days, swap agreements may be
considered to be illiquid. Moreover, a Fund bears the risk of loss of the amount
expected to be received under a swap agreement in the event of the default or
bankruptcy of a swap agreement counterparty. The Funds will enter into swap
agreements only with counterparties that present minimal credit risks, as
determined by those managing the fund’s investments. Certain restrictions
imposed on each Fund by the Internal Revenue Code may limit a Fund’s ability to
use swap agreements.
Depending
on the terms of the particular option agreement, a Fund will generally incur a
greater degree of risk when it writes a swap option than it will incur when it
purchases a swap option. When a Fund purchases a swap option, it risks losing
only the amount of the premium it has paid should it decide to let the option
expire unexercised. However, when a Fund writes a swap option, upon exercise of
the option the Fund will become obligated according to the terms of the
underlying agreement.
Liquidity
of Swap Agreements. Some
swap markets have grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, these swap markets have
become relatively liquid. The liquidity of swap agreements will be determined by
those managing the fund’s investments based on various factors,
including:
•the
frequency of trades and quotations,
•the
number of dealers and prospective purchasers in the marketplace,
•dealer
undertakings to make a market,
•the
nature of the security (including any demand or tender features),
and
•the
nature of the marketplace for trades (including the ability to assign or offset
a portfolio's rights and obligations relating to the investment).
Such
determination will govern whether a swap will be deemed to be within each Fund’s
restriction on investments in illiquid securities.
Valuing
Swap Agreements. For
purposes of applying a fund’s investment policies and restrictions (as stated in
the Prospectuses and this SAI) swap agreements are generally valued by the funds
at market value. In the case of a credit default swap, however, in applying
certain of the funds’ investment policies and restrictions the fund will value
the credit default swap at its notional value or its full exposure value (i.e.,
the sum of the notional amount for the contract plus the market value), but may
value the credit default swap at market value for purposes of applying certain
of the funds’ other investment policies and restrictions. For example, a fund
may value credit default swaps at full exposure value for purposes of the fund’s
credit quality guidelines because such value reflects the fund’s actual economic
exposure during the term of the credit default swap agreement. In this context,
both the notional amount and the market value may be positive or negative
depending on whether the fund is selling or buying protection through the credit
default swap. The manner in which certain securities or other instruments are
valued by a fund for purposes of applying investment policies and restrictions
may differ from the manner in which those investments are valued by other types
of investors.
Permissible
Uses of Futures and Options on Futures Contracts
Each
Fund may enter into futures contracts and related options transactions, for
hedging purposes and for other appropriate risk management purposes, and to
modify the Fund’s exposure to various currency, commodity, equity, or
fixed-income markets. Each Fund may engage in futures trading in an effort to
generate returns. When using futures contracts and options on futures contracts
for hedging or risk management purposes, each Fund determines that the price
fluctuations in the contracts and options are substantially related to price
fluctuations in securities held by the Fund or which it expects to purchase. In
pursuing traditional hedging activities, each Fund may sell futures contracts or
acquire puts to protect against a decline in the price of securities that the
Fund owns. Each Fund may purchase futures contracts or calls on futures
contracts to protect the Fund against an increase in the price of securities the
Fund intends to purchase before it is in a position to do so.
Limitations
on the Use of Futures, Options on Futures Contracts, and Swaps
All
Funds except the Finisterre Emerging Markets Total Return Bond
Fund. CFTC
Rule 4.5 provides that an investment company does not meet the definition of
“commodity pool operator” under the CEA if its use of futures contracts, options
on futures contracts, and swaps is sufficiently limited that the fund can fall
within one of two exclusions set out in Rule 4.5. Each Fund intends to limit its
use of futures contracts, options on futures contracts, and swaps to the degree
necessary to fall within one of the two exclusions. If a Fund is unable to do
so, it may incur expenses that are necessary to comply with the CEA and the
rules the CFTC has adopted under it
Finisterre
Emerging Markets Total Return Bond Fund. The
Finisterre Emerging Markets Total Return Bond Fund is deemed to be a regulated
“commodity pool” under the CEA and, as a result, may invest in futures
contracts, options on futures contracts, and swaps in excess of the limitations
imposed by the CFTC under Rule 4.5.
Risk
of Potential Government Regulation of Derivatives
It
is possible that additional government regulation of various types of derivative
instruments, including futures, options and swap agreements, may limit or
prevent a fund from using such instruments as a part of its investment strategy,
and could ultimately prevent a fund from being able to achieve its investment
objective. It is difficult to predict the effects future legislation and
regulation in this area, but the effects could be substantial and adverse. It is
possible that legislative and regulatory activity could limit or restrict the
ability of a fund to use certain instruments as a part of its investment
strategy.
Limits
or restrictions applicable to the counterparties with which the funds engage in
derivative transactions could also prevent the funds from using certain
instruments.
Environmental,
Social, and Governance Factors in the Selection of Portfolio
Securities
(Applicable
to all Funds or portions of the Funds, other than Government & High Quality
Bond Fund, Government Money Market Fund, the portion of High Income Fund managed
by Insight North America, LLC, Inflation Protection Fund, LargeCap S&P 500
Index Fund, Midcap S&P 400 Index Fund, the portion of MidCap Value I Fund
managed by Victory Capital Management Inc., Money Market Fund, and SmallCap
S&P 600 Index Fund.)
The
portfolio managers of the Funds consider one or more environmental, social,
and/or governance (“ESG”) factors along with other, non-ESG factors in making
investment decisions. The consideration of ESG factors is intended to further
the stated objective of the particular Funds. These ESG factors are generally no
more significant than other factors in the investment selection process, such
that ESG factors may not be determinative in deciding to include or exclude any
particular investment in the portfolio. By way of example, environmental factors
can include one or more of the following: climate change, natural resources,
pollution and waste, and environmental opportunities. Social factors can include
one or more of the following: human capital, product liability, stakeholder
opposition, and social opportunities. Governance factors can include corporate
governance and/or corporate behavior. Integration of ESG factors is qualitative
and subjective by nature. There is no guarantee that the criteria used, or
judgment exercised, will reflect the beliefs or values of any particular
investor. Further, there is no assurance that any strategy or integration of ESG
factors will be successful or profitable.
Further,
the portfolio managers of the Finisterre Emerging Markets Total Return Bond Fund
and a portion of the emerging market debt investments in the Diversified Income
Fund use filtering techniques based on ESG criteria, which can result in the
exclusion of companies that have exposures to certain controversial sectors. The
exclusion of companies from the investable universe may, under certain
circumstances, detract from investment performance.
Environmental,
Social, and Governance Factors in the Selection of Investment Advisors and Asset
Classes
The
Diversified Income Fund is structured as an asset allocation fund, in which PGI
is responsible for selecting sub-advisors and investment teams within PGI that,
in turn, are responsible for selecting underlying investments. In selecting
sub-advisors, investment teams, and asset classes, the PGI asset allocation team
considers ESG factors. ESG factors are generally no more significant than other
factors in the selection process, such that ESG factors may not be determinative
in deciding to include or exclude any particular sub-advisor, investment team,
or asset class in the portfolio. Integration of ESG factors is qualitative and
subjective by nature. There is no guarantee that the criteria used, or judgment
exercised, will reflect the beliefs or values of any particular investor.
Further, there is no assurance that any strategy or integration of ESG factors
will be successful or profitable.
Fixed-Income
Securities
ETNs
Certain
funds may invest in, or sell short, exchange-traded notes (“ETNs”). ETNs are
typically senior, unsecured, unsubordinated debt securities whose returns are
linked to the performance of a particular market index less applicable fees and
expenses. ETNs are listed on an exchange and traded in the secondary market. The
fund may hold the ETN until maturity, at which time the issuer is obligated to
pay a return linked to the performance of the relevant market index. ETNs do not
make periodic interest payments and principal is not protected.
ETNs
are subject to credit risk and the value of the ETN may drop due to a downgrade
in the issuer’s credit rating, despite the underlying market benchmark or
strategy remaining unchanged. The value of an ETN may also be influenced by time
to maturity, level of supply and demand for the ETN, volatility and lack of
liquidity in underlying assets, changes in the applicable interest rates,
changes in the issuer’s credit rating, and economic, legal, political, or
geographic events that affect the referenced underlying asset. When a Fund
invests in ETNs, it will bear their proportionate share of any fees and expenses
borne by the ETN. The Fund’s decision to sell its ETN holdings may be limited by
the availability of a secondary market. ETNs are also subject to tax risk. The
Internal Revenue Service (“IRS”) and Congress are considering proposals that
would change the timing and character of income and gains from ETNs. There may
also be times when an ETN share trades at a premium or discount to its market
benchmark or strategy.
Funding
Agreements
Some
Funds may invest in Guaranteed Investment Contracts (“GICs”) and similar funding
agreements. In connection with these investments, a Fund makes cash
contributions to a deposit fund of an insurance company’s general account. The
insurance company then credits to a Fund on a monthly basis guaranteed interest,
which is based on an index (such as SOFR or a similar reference rate). The
funding agreements provide that this guaranteed interest will not be less than a
certain minimum rate. The purchase price paid for a funding agreement becomes
part of the general assets of the insurance company. GICs are considered
illiquid securities and will be subject to any limitations on such investments,
unless there is an active and substantial secondary market for the particular
instrument and market quotations are readily available.
Generally,
funding agreements are not assignable or transferable without the permission of
the issuing company, and an active secondary market in some funding agreements
does not currently exist. Investments in GICs are subject to the risks
associated with fixed-income instruments generally, and are specifically subject
to the credit risk associated with an investment in the issuing insurance
company.
Inflation-Indexed
Bonds
Some
Funds may invest in inflation-indexed bonds or inflation protected debt
securities, which are fixed income securities whose value is periodically
adjusted according to the rate of inflation. Two structures are common. The U.S.
Treasury and some other issuers utilize a structure that accrues inflation into
the principal value of the bond. Most other issuers pay out the Consumer Price
Index accruals as part of a semi-annual coupon. Inflation-indexed securities
issued by the U.S. Treasury (Treasury Inflation Protected Securities or TIPS)
have maturities of approximately five, ten or thirty years, although it is
possible that securities with other maturities will be issued in the future. The
U.S. Treasury securities pay interest on a semi-annual basis equal to a fixed
percentage of the inflation-adjusted principal amount. If the periodic
adjustment rate measuring inflation falls, the principal value of
inflation-indexed bonds will be adjusted downward, and consequently the interest
payable on these securities (calculated with respect to a smaller principal
amount) will be reduced. The value of inflation-indexed bonds is expected to
change in response to changes in real interest rates. Real interest rates in
turn are tied to the relationship between nominal interest rates and the rate of
inflation. Therefore, if the rate of inflation rises at a faster rate than
nominal interest rates, real interest rates might decline, leading to an
increase in value of inflation-indexed bonds. In contrast, if nominal interest
rates increase at a faster rate than inflation, real interest rates might rise,
leading to a decrease in value of inflation-indexed bonds. While these
securities are expected to be protected from long-term inflationary trends,
short-term increases in inflation may lead to a decline in value. If interest
rates rise due to reasons other than inflation (for example, due to changes in
currency exchange rates), investors in these securities may not be protected to
the extent that the increase is not reflected in the bond’s inflation
measure.
The
periodic adjustment of U.S. inflation-indexed bonds is tied to the Consumer
Price Index for Urban Consumers (CPI-U), which is calculated monthly by the U.S.
Bureau of Labor Statistics. The CPI-U is a measurement of changes in the cost of
living, made up of components such as housing, food, transportation and energy.
Inflation-indexed bonds issued by a foreign government are generally adjusted to
reflect a comparable inflation index calculated by that government. Any increase
in the principal amount of an inflation-indexed bond will be considered taxable
ordinary income, even though investors do not receive their principal until
maturity.
Step-Coupon
Securities
Each
Fund may invest in step-coupon securities. Step-coupon securities trade at a
discount from their face value and pay coupon interest. The coupon rate is low
for an initial period and then increases to a higher coupon rate thereafter.
Market values of these types of securities generally fluctuate in response to
changes in interest rates to a greater degree than conventional interest-paying
securities of comparable term and quality. Under many market conditions,
investments in such securities may be illiquid, making it difficult for a Fund
to dispose of them or determine their current value.
“Stripped”
Securities
Each
Fund may invest in stripped securities, which are usually structured with two or
more classes that receive different proportions of the interest and principal
distribution on a pool of U.S. government or foreign government securities or
mortgage assets. In some cases, one class will receive all of the interest (the
interest-only or “IO” class), while the other class will receive all of the
principal (the principal-only or “PO” class). Stripped securities commonly have
greater market volatility than other types of fixed-income securities. In the
case of stripped mortgage securities, if the underlying mortgage assets
experience greater than anticipated payments of principal, a Fund may fail to
recoup fully its investments in IOs. Stripped securities may be illiquid.
Stripped securities may be considered derivative securities.
Structured
Notes
Some
Funds may invest in a broad category of instruments known as “structured notes.”
These instruments are debt obligations issued by industrial corporations,
financial institutions or governmental or international agencies. Traditional
debt obligations typically obligate the issuer to repay the principal plus a
specified rate of interest. Structured notes, by contrast, obligate the issuer
to pay amounts of principal or interest that are determined by reference to
changes in some external factor or factors, or the principal and interest rate
may vary from the stated rate because of changes in these factors. For example,
the issuer’s obligations could be determined by reference to changes in the
value of a foreign currency, an index of securities (such as the S&P 500
Index) or an interest rate (such as the U.S. Treasury bill rate). In some cases,
the issuer’s obligations are determined by reference to changes over time in the
difference (or “spread”) between two or more external factors (such as the U.S.
prime lending rate and the total return of the stock market in a particular
country, as measured by a stock index). In some cases, the issuer’s obligations
may fluctuate inversely with changes in an external factor or factors (for
example, if the U.S. prime lending rate goes up, the issuer’s interest payment
obligations are reduced). In some cases, the issuer’s obligations may be
determined by some multiple of the change in an external factor or factors (for
example, three times the change in the U.S. Treasury bill rate). In some cases,
the issuer’s obligations remain fixed (as with a traditional debt instrument) so
long as an external factor or factors do not change by more than the specified
amount (for example, if the value of a stock index does not exceed some
specified maximum), but if the external factor or factors change by more than
the specified amount, the issuer’s obligations may be sharply
reduced.
Structured
notes can serve many different purposes in the management of a fund. For
example, they can be used to increase a fund’s exposure to changes in the value
of assets that a fund would not ordinarily purchase directly (such as stocks
traded in a market that is not open to U.S. investors). They also can be used to
hedge the risks associated with other investments a fund holds. For example, if
a structured note has an interest rate that fluctuates inversely with general
changes in a country’s stock market index, the value of the structured note
would generally move in the opposite direction to the value of holdings of
stocks in that market, thus moderating the effect of stock market movements on
the value of a fund’s portfolio as a whole. The cash flow on the underlying
instruments may be apportioned among the newly issued structured notes to create
securities with different investment characteristics such as varying maturities,
payment priorities or interest rate provisions; the extent of the payments made
with respect to structured notes is dependent on the extent of the cash flow on
the underlying instruments.
Structured
notes involve special risks. As with any debt obligation, structured notes
involve the risk that the issuer will become insolvent or otherwise default on
its payment obligations. This risk is in addition to the risk that the issuer’s
obligations (and thus the value of a fund’s investment) will be reduced because
of adverse changes in the external factor or factors to which the obligations
are linked. The value of structured notes will in many cases be more volatile
(that is, will change more rapidly or severely) than the value of traditional
debt instruments. Volatility will be especially high if the issuer’s obligations
are determined by reference to some multiple of the change in the external
factor or factors. Structured notes also may be more difficult to accurately
price than less complex securities and instruments or more traditional debt
securities. Many structured notes have limited or no liquidity, so that a fund
would be unable to dispose of the investment prior to maturity. As with all
investments, successful use of structured notes depends in significant part on
the accuracy of the analysis of those managing the fund’s investments of the
issuer’s creditworthiness and financial prospects, and of their forecast as to
changes in relevant economic and financial market conditions and factors. In
instances where the issuer of a structured note is a foreign entity, the usual
risks associated with investments in foreign securities apply. Structured notes
may be considered derivative securities.
Zero-Coupon
Securities
Each
Fund may invest in zero-coupon securities. Zero-coupon securities have no stated
interest rate and pay only the principal portion at a stated date in the future.
They usually trade at a substantial discount from their face (par) value.
Zero-coupon securities are subject to greater market value fluctuations in
response to changing interest rates than debt obligations of comparable
maturities that make distributions of interest in cash.
Foreign
Currency Transactions
Options
on Foreign Currencies
A
Fund may buy and write options on foreign currencies in a manner similar to that
in which futures or forward contracts on foreign currencies will be utilized.
Each Fund may use options on foreign currencies to hedge against adverse changes
in foreign currency conversion rates. For example, a decline in the U.S. dollar
value of a foreign currency in which portfolio securities are denominated will
reduce the U.S. dollar value of such securities, even if their value in the
foreign currency remains constant. In order to protect against such diminutions
in the value of the portfolio securities, a Fund may buy put options on the
foreign currency. If the value of the currency declines, a Fund will have the
right to sell such currency for a fixed amount in U.S. dollars, thereby
offsetting, in whole or in part, the adverse effect on its portfolio.
Conversely, when a rise in the U.S. dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, a Fund may buy call options on the foreign currency.
The purchase of such options could offset, at least partially, the effects of
the adverse movements in exchange rates. As in the case of other types of
options, however, the benefit to a Fund from purchases of foreign currency
options will be reduced by the amount of the premium and related transaction
costs. In addition, if currency exchange rates do not move in the direction or
to the extent desired, a Fund could sustain losses or lesser gains on
transactions in foreign currency options that would require a Fund to forgo a
portion or all of the benefits of advantageous changes in those
rates.
Each
Fund also may write options on foreign currencies. For example, to hedge against
a potential decline in the U.S. dollar due to adverse fluctuations in exchange
rates, a Fund could, instead of purchasing a put option, write a call option on
the relevant currency. If the decline expected by a Fund occurs, the option will
most likely not be exercised and the diminution in value of portfolio securities
will be offset at least in part by the amount of the premium received.
Similarly, instead of purchasing a call option to hedge against a potential
increase in the U.S. dollar cost of securities to be acquired, a Fund could
write a put option on the relevant currency which, if rates move in the manner
projected by a Fund, will expire unexercised and allow a Fund to hedge the
increased cost up to the amount of the premium. If exchange rates do not move in
the expected direction, the option may be exercised and a Fund would be required
to buy or sell the underlying currency at a loss, which may not be fully offset
by the amount of the premium. Through the writing of options on foreign
currencies, a Fund also may lose all or a portion of the benefits that might
otherwise have been obtained from favorable movements in exchange
rates.
Futures
on Currency
A
foreign currency future provides for the future sale by one party and purchase
by another party of a specified quantity of foreign currency at a specified
price and time. A public market exists in futures contracts covering a number of
foreign currencies. Currency futures contracts are exchange-traded and change in
value to reflect movements of a currency or a basket of currencies. Settlement
must be made in a designated currency.
Forward
Foreign Currency Exchange Contracts
Each
Fund may, but is not obligated to, enter into forward foreign currency exchange
contracts. Currency transactions include forward currency contracts and exchange
listed or over-the-counter options on currencies. A forward currency contract
involves a privately negotiated obligation to purchase or sell a specific
currency at a specified future date at a price set at the time of the
contract.
The
typical use of a forward contract is to “lock in” the price of a security in
U.S. dollars or some other foreign currency which a Fund is holding in its
portfolio. By entering into a forward contract for the purchase or sale, for a
fixed amount of dollars or other currency, of the amount of foreign currency
involved in the underlying security transactions, a Fund may be able to protect
itself against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar or other currency which is being used for
the security purchase and the foreign currency in which the security is
denominated in or exposed to during the period between the date on which the
security is purchased or sold and the date on which payment is made or
received.
Those
managing the fund’s investments also may from time to time utilize forward
contracts for other purposes. For example, they may be used to hedge a foreign
security held in the portfolio or a security which pays out principal tied to an
exchange rate between the U.S. dollar and a foreign currency, against a decline
in value of the applicable foreign currency. They also may be used to lock in
the current exchange rate of the currency in which those securities anticipated
to be purchased are denominated in or exposed to. At times, each Fund may enter
into “cross-currency” hedging transactions involving currencies other than those
in which securities are held or proposed to be purchased are
denominated.
It
should be noted that the use of forward foreign currency exchange contracts does
not eliminate fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange between the currencies that can be achieved at
some future point in time. Additionally, although such contracts tend to
minimize the risk of loss due to a decline in the value of the hedged currency,
they also tend to limit any potential gain that might result if the value of the
currency increases.
Foreign
Securities
Investing
in foreign securities carries political and economic risks distinct from those
associated with investing in the United States. Investments in foreign
securities also involve the risk of possible adverse changes in investment or
exchange control regulations, expropriation or confiscatory taxation, limitation
on or delays in the removal of funds or other assets of a fund, political or
financial instability, or diplomatic and other developments that could affect
such investments. Foreign investments may be affected by actions of foreign
governments adverse to the interests of U.S. investors, including the
possibility of expropriation or nationalization of assets, confiscatory
taxation, restrictions on U.S. investment, or on the ability to repatriate
assets or to convert currency into U.S. dollars. There may be a greater
possibility of default by foreign governments or foreign-government sponsored
enterprises. Investments in foreign countries also involve a risk of local
political, economic, or social instability; military action or unrest; or
adverse diplomatic developments.
Asia-Pacific
Countries
In
addition to the risks of foreign investing and the risks of investing in
emerging markets, the developing market Asia-Pacific countries in which a Fund
may invest are subject to certain additional or specific risks. In the
Asia-Pacific markets, there is a high concentration of market capitalization and
trading volume in a small number of issuers representing a limited number of
industries, as well as a high concentration of investors and financial
intermediaries. Many of these markets also may be affected by developments with
respect to more established markets in the region, such as Japan and Hong Kong.
Brokers in developing market Asia-Pacific countries typically are fewer in
number and less well capitalized than brokers in the United States.
Many
of the developing market Asia-Pacific countries may be subject to a greater
degree of economic, political and social instability than is the case in the
United States and Western European countries. Such instability may result from,
among other things: (i) authoritarian governments or military involvement in
political and economic decision- making, including changes in government through
extra-constitutional means; (ii) popular unrest associated with demands for
improved political, economic and social conditions; (iii) internal insurgencies;
(iv) hostile relations with neighboring countries; and/or (v) ethnic, religious
and racial disaffection. In addition, the governments of many of such countries,
such as Indonesia, have a heavy role in regulating and supervising the
economy.
An
additional risk common to most such countries is that the economy is heavily
export-oriented and, accordingly, is dependent upon international trade. The
existence of overburdened infrastructure and obsolete financial systems also
present risks in certain countries, as do environmental problems. Certain
economies also depend to a significant degree upon exports of primary
commodities and, therefore, are vulnerable to changes in commodity prices that,
in turn, may be affected by a variety of factors. The legal systems in certain
developing market Asia-Pacific countries also may have an adverse impact on a
Fund. The rights of investors in developing market Asia-Pacific companies may be
more limited than those of shareholders of U.S. corporations. It may be
difficult or impossible to obtain and/or enforce a judgment in a developing
market Asia-Pacific country.
China
Investing
in China involves special considerations, including: the risk of nationalization
or expropriation of assets or confiscatory taxation; greater governmental
involvement in and control over the economy, interest rates and currency
exchange rates; controls on foreign investment and limitations on repatriation
of invested capital; greater social, economic and political uncertainty;
dependency on exports and the corresponding importance of international trade;
and currency exchange rate fluctuations. The government of China maintains
strict currency controls in support of economic, trade and political objectives
and regularly intervenes in the currency market. The government’s actions in
this respect may not be transparent or predictable. Furthermore, it is difficult
for foreign investors to directly access money market securities in China
because of investment and trading restrictions. These and other factors may
decrease the value and liquidity of a fund’s investments.
A
fund may obtain exposure to companies based or operated in China by investing
through legal structures known as variable interest entities (“VIEs”). VIEs are
not formally recognized under Chinese law and are subject to risks, such as the
risk that China could cease to allow VIEs, could impose new restrictions on
VIEs, or could deem the contractual arrangements of VIEs unenforceable. These
risks could limit or eliminate the remedies and rights available to VIEs and
their investors, such as a fund. If these risks materialize, the value of a
fund’s investments in VIEs could be adversely affected, and a fund could incur
significant losses with no available recourse.
Investments
in Stock Connect and Bond Connect
Funds
may invest in China A shares, which are shares of certain Chinese companies
listed and traded through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong
Kong Stock Connect programs (“Stock Connect”). Stock Connect is a securities
trading and clearing program established by Hong Kong Exchanges and Clearing
Limited, the Shanghai Stock Exchange (“SSE”), the Shenzhen Stock Exchange
(“SZSE”) and China Securities Depository and Clearing Corporation Limited, which
seeks to provide mutual stock market access between Mainland China and Hong
Kong. Trading through Stock Connect is subject to numerous restrictions and
risks that could impair the Fund’s ability to invest in or sell China A shares
and adversely affect the Fund’s performance, such as the following:
•China
A shares generally may not be sold, purchased or otherwise transferred other
than through Stock Connect in accordance with applicable rules, regulations, and
restrictions. Such securities may lose their eligibility, in which case they
presumably could be sold but could no longer be purchased through Stock Connect.
Market volatility and settlement difficulties in the China A share markets may
result in significant fluctuations in the prices and liquidity of the securities
traded on such markets. Further regulations or restrictions, such as limitations
on redemptions or suspension of trading, may adversely impact the
Fund.
•Stock
Connect is generally only available on business days when both the China and
Hong Kong markets are open and when banking services are available in both
markets on the corresponding settlement days. As a result, a Fund may not be
able trade when it would be otherwise attractive to do so, and the Fund may not
be able to dispose of its China A shares in a timely manner.
•Investing
in China A shares is subject to Stock Connect’s clearance and settlement
procedures, which could pose risks to the Fund. Certain requirements must be
completed before the market opening, or a Fund cannot sell the shares on that
trading day. Stock Connect also imposes quotas that limit aggregate net
purchases on an exchange on a particular day, and an investor cannot purchase
and sell the same security through Stock Connect on the same trading day. Once
the daily quota is reached, orders to purchase additional China A shares through
Stock Connect will be rejected. Such restrictions could limit a Fund’s ability
to sell its China A shares in a timely manner, or to sell them at
all.
•If
a Fund holds 5% or more of a China A share issuer’s total shares through Stock
Connect investments, the Fund must return any profits obtained from the purchase
and sale of those shares if both transactions occur within a six-month period.
All accounts managed by the Funds’ Advisor and/or its affiliates will be
aggregated for purposes of this 5% limitation, which makes it more likely that a
Fund’s profits may be subject to these limitations.
•Stock
Connect uses an omnibus clearing structure, and the Fund’s shares will be
registered in its custodian’s name on the Central Clearing and Settlement
System. This may limit the ability of the Fund’s advisor to effectively manage a
Fund, and may expose the Fund to the credit risk of its custodian or to greater
risk of expropriation. Investment in China A shares through Stock Connect may be
available only through a single broker that is an affiliate of the Fund’s
custodian, which may affect the quality of execution provided by such
broker.
•China
A shares purchased through Stock Connect will be held via a book entry omnibus
account in the name of Hong Kong Securities Clearing Company Limited (“HKSCC”),
Hong Kong’s clearing entity, and not the Fund’s name as the beneficial owner.
Therefore, a Fund’s ability to exercise its rights as a shareholder and to
pursue claims against the issuer of China A shares may be limited. While Chinese
regulations and the Hong Kong Stock Exchange have issued clarifications and
guidance supporting the concept of beneficial ownership through Stock Connect,
the interpretation of beneficial ownership in China by regulators and courts may
continue to evolve.
•The
Fund’s investments in China A shares through Stock Connect are generally subject
to Chinese securities regulations and listing rules, among other restrictions.
The Fund will not benefit from access to Hong Kong investor compensation funds,
which are set up to protect against defaults of trades, when investing through
Stock Connect. Investments in China A shares may not be covered by the
securities investor protection programs of the exchanges and, without the
protection of such programs, will be subject to the risk of default by the
broker. If the depository of the SSE and the SZSE defaulted, a Fund may not be
able to recover fully its losses from the depository or may be delayed in
receiving proceeds as part of any recovery process.
•Fees,
costs and taxes imposed on foreign investors (such as the Fund) may be higher
than comparable fees, costs and taxes imposed on owners of other securities that
provide similar investment exposure. Trades using Stock Connect may also be
subject to various fees, taxes and market charges imposed by Chinese market
participants and regulatory authorities. Uncertainties in China’s tax rules
related to the taxation of income and gains from investments in China A shares
could result in unexpected tax liabilities for the Fund, and the withholding tax
treatment of dividends and capital gains payable to overseas investors currently
is unsettled.
•Because
trades of eligible China A shares on Stock Connect must be settled in Renminbi
(RMB), the Chinese currency, Funds investing through Stock Connect will be
exposed to RMB currency risks. The ability to hedge RMB currency risks may be
limited. The RMB is subject to exchange control restrictions, and the Fund could
be adversely affected by delays in converting currencies into RMB and vice
versa.
•Because
Stock Connect is in its early stages, the effect on the market for trading China
A shares with the introduction of numerous foreign investors is currently
unknown. Stock Connect is relatively new and may be subject to further
interpretation and guidance. There can be no assurance as to Stock Connect’s
continued existence or whether future developments regarding the program may
restrict or adversely affect the Fund’s investments or returns.
Funds
may also invest in China Interbank bonds traded on the China Interbank Bond
Market (“CIBM”) through the China - Hong Kong Bond Connect program (“Bond
Connect”). In China, the Hong Kong Monetary Authority Central Money Markets Unit
holds Bond Connect securities on behalf of investors (such as the Fund) in
accounts maintained with maintained with a China-based custodian (either the
China Central Depository & Clearing Co. or the Shanghai Clearing House).
Investments using Bond Connect are subject to risks similar to those described
above with respect to Stock Connect.
Europe
The
economies and markets of European countries are often closely connected and
interdependent, and events in one European country can have an adverse impact on
other European countries. Certain funds may invest in securities of issuers that
are domiciled in, or have significant operations in, member countries of the
Economic and Monetary Union of the European Union (the “EU”), which requires
member countries to comply with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls. Decreasing imports
or exports, changes in governmental or EU regulations on trade, changes in the
exchange rate of the euro (the common currency of certain EU countries), the
default or threat of default by an EU member country on its sovereign debt,
and/or an economic recession in an EU member country may have a significant
adverse effect on the economies of EU member countries and their trading
partners, including some or all of the emerging markets countries. Although
certain European countries do not use the euro, many of these countries are
obliged to meet the criteria for joining the euro zone. Consequently, these
countries must comply with many of the restrictions noted above. The European
financial markets have experienced volatility and adverse trends in recent years
due to concerns about economic downturns, rising government debt levels and the
possible default of government debt in several European countries. Further
defaults or restructurings by governments and other entities of their debt could
have additional adverse effects on economies, financial markets and asset
valuations around the world. In addition, one or more countries may abandon the
euro and/or withdraw from the EU. The United Kingdom (the "UK") departed the EU
on January 31, 2020 (commonly referred to as "Brexit"). As a result of Brexit,
the UK may be less stable than it had been in prior years, and investments in
the UK may be more volatile due to economic uncertainty and currency exchange
rate fluctuations. The impact of these actions by European countries, especially
if they occur in a disorderly fashion, is not clear but could be significant and
far-reaching and could adversely impact the value of investments in the
region.
Japan
Japanese
investments may be significantly affected by events influencing Japan’s economy
and the exchange rate between the Japanese yen and the U.S. dollar. Japan’s
economy fell into a long recession in the 1990s. After a few years of mild
recovery in the mid-2000s, Japan’s economy fell into another recession as a
result of the recent global economic crisis. Japan is heavily dependent on
exports and foreign oil. Japan is located in a seismically active area, and in
2011 experienced an earthquake of a sizable magnitude and a tsunami that
significantly affected important elements of its infrastructure and resulted in
a nuclear crisis. Since these events, Japan’s financial markets have fluctuated
dramatically. The full extent of the impact of these events on Japan’s economy
and on foreign investment in Japan is difficult to estimate. Japan’s economic
prospects may be affected by the political and military situations of its near
neighbors, notably North and South Korea, China, and Russia.
Latin
America
Most
Latin American countries have experienced, at one time or another, severe and
persistent levels of inflation, including, in some cases, hyperinflation. This
has, in turn, led to high interest rates, extreme measures by governments to
keep inflation in check, and a generally debilitating effect on economic growth.
Although inflation in many countries has lessened, there is no guarantee it will
remain at lower levels. In addition, the political history of certain Latin
American countries has been characterized by political uncertainty, intervention
by the military in civilian and economic spheres, and political corruption. Such
developments, if they were to reoccur, could reverse favorable trends toward
market and economic reform, privatization, and removal of trade barriers, and
result in significant disruption in securities markets. Certain Latin American
countries may also have managed currencies, which are maintained at artificial
levels to the U.S. dollar rather than at levels determined by the market. This
type of system can lead to sudden and large adjustments in the currency which,
in turn, can have a disruptive and negative effect on foreign investors. There
is no significant foreign exchange market for many currencies and it would, as a
result, be difficult for the Fund to engage in foreign currency transactions
designed to protect the value of the Fund’s interests in securities denominated
in such currencies. Finally, a number of Latin American countries are among the
largest debtors of developing markets. There have been moratoria on, and
reschedulings of, repayment with respect to these debts. Such events can
restrict the flexibility of these debtor nations in the international markets
and result in the imposition of onerous conditions on their
economies.
High
Yield Securities
Each
Fund may invest a portion of its assets in bonds that are rated below investment
grade (sometimes called “high yield bonds” or “junk bonds”), which are rated at
the time of purchase Ba1 or lower by Moody’s and BB+ or lower by S&P Global
Ratings. If the bond has been rated by only one of the rating agencies, that
rating will determine the bond's rating; if the bond is rated differently by the
rating agencies, the highest rating will be used; and if the bond has not been
rated by either of the rating agencies, those selecting such investments will
determine the bond's quality. Lower-rated bonds involve a higher degree of
credit risk, which is the risk that the issuer will not make interest or
principal payments when due. In the event of an unanticipated default, a fund
would experience a reduction in its income and could expect a decline in the
market value of the bonds so affected. Issuers of high yield securities may be
involved in restructurings or bankruptcy proceedings that may not be successful.
If an issuer defaults, it may not be able to pay all or a portion of interest
and principal owed to the fund, it may exchange the high yield securities owned
by the fund for other securities, including equities, and/or the fund may incur
additional expenses while seeking recovery of its investment. Some funds may
also invest in unrated bonds of foreign and domestic issuers. Unrated bonds,
while not necessarily of lower quality than rated bonds, may not have as broad a
market. Because of the size and perceived demand of the issue, among other
factors, certain municipalities may not incur the expense of obtaining a rating.
Those managing the fund’s investments will analyze the creditworthiness of the
issuer, as well as any financial institution or other party responsible for
payments on the bond, in determining whether to purchase unrated bonds. Unrated
bonds will be included in the limitation each fund has with regard to high yield
bonds unless those managing the fund’s investments deem such securities to be
the equivalent of investment-grade bonds. Some of the high yield securities
consist of Rule 144A securities. High yield securities may contain any type of
interest rate payment or reset terms, including fixed rate, adjustable rate,
zero coupon, contingent, deferred, payment-in-kind, and those with auction rate
features.
Initial
Public Offerings (“IPOs”)
An
IPO is a company’s first offering of stock to the public. IPO risk is that the
market value of IPO shares will fluctuate considerably due to factors such as
the absence of a prior public market, unseasoned trading, the small number of
shares available for trading, and limited information about the issuer. The
purchase of IPO shares may involve high transaction costs. IPO shares are
subject to market risk and liquidity risk. In addition, the market for IPO
shares can be speculative and/or inactive for extended periods. The limited
number of shares available for trading in some IPOs may make it more difficult
for a fund to buy or sell significant amounts of shares without an unfavorable
impact on prevailing prices. Investors in IPO shares can be affected by
substantial dilution in the value of their shares by sales of additional shares
and by concentration of control in existing management and principal
shareholders.
When
a fund’s asset base is small, a significant portion of the fund’s performance
could be attributable to investments in IPOs because such investments would have
a magnified impact on the fund. As the fund’s assets grow, the effect of the
fund’s investments in IPOs on the fund’s performance probably will decline,
which could reduce the fund’s performance. Because of the price volatility of
IPO shares, a fund may choose to hold IPO shares for a very short period. This
may increase the turnover of the fund’s portfolio and lead to increased expenses
to the fund, such as commissions and transaction costs. By selling IPO shares,
the fund may realize taxable gains it will subsequently distribute to
shareholders.
Interfund
Lending and Borrowing
The
SEC has granted an exemption permitting Principal Funds to borrow money from and
lend money to each other for temporary or emergency purposes. The loans are
subject to a number of conditions designed to ensure fair and equitable
treatment of all participating funds, including the following: (1) no fund may
borrow money through the program unless it receives a more favorable interest
rate than a rate approximating the lowest interest rate at which bank loans
would be available to any of the participating funds under a loan agreement; and
(2) no fund may lend money through the program unless it receives a more
favorable return than that available from an investment in overnight repurchase
agreements. In addition, a fund may participate in the program only if and to
the extent that such participation is consistent with a fund’s investment
objectives and policies. Interfund loans and borrowings have a maximum duration
of seven days. Loans may be called on one day’s notice. A fund may have to
borrow from a bank at a higher interest rate if an interfund loan is called or
not renewed. Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional costs. The Board is responsible for
overseeing and periodically reviewing the interfund lending
program.
Inverse
Floating Rate and Other Variable and Floating Rate Instruments
Each
Fund may purchase variable and floating rate instruments. These instruments may
include variable amount master demand notes that permit the indebtedness
thereunder to vary in addition to providing for periodic adjustments in the
interest rate. These instruments may also include leveraged inverse floating
rate debt instruments, or “inverse floaters”. The interest rate of an inverse
floater resets in the opposite direction from the market rate of interest on a
security or interest to which it is related. An inverse floater may be
considered to be leveraged to the extent that its interest rate varies by a
magnitude that exceeds the magnitude of the change in the index rate of interest
and is subject to many of the same risks as derivatives. The higher degree of
leverage inherent in inverse floaters is associated with greater volatility in
their market values. Certain of these investments may be illiquid. The absence
of an active secondary market with respect to these investments could make it
difficult for a Fund to dispose of a variable or floating rate note if the
issuer defaulted on its payment obligation or during periods that a Fund is not
entitled to exercise its demand rights, and a Fund could, for these or other
reasons, suffer a loss with respect to such instruments.
Investment
Company Securities
Securities
of other investment companies, including shares of closed-end investment
companies (including interval funds), unit investment trusts, various
exchange-traded funds (“ETFs”), and other open-end investment companies,
represent interests in professionally managed portfolios that may invest in a
variety of instruments. Certain types of investment companies, such as certain
closed-end investment companies, do not continuously offer their shares for sale
(like open-end investment companies) but instead issue a fixed number of shares
that trade on a stock exchange or over-the-counter at a premium or a discount to
their net asset value. An interval fund is a type of closed-end investment
company that is continuously offered at net asset value, is not listed on an
exchange, and only periodically offers to repurchase a limited amount of
outstanding shares from its shareholders. Investing in interval funds involves
liquidity risk, and the liquidity risk is even greater in interval funds that
invest in securities of companies with smaller market capitalizations,
derivatives, securities with substantial market and/or credit risk, or
securities that are themselves illiquid. Other types of investment companies,
such as ETFs, are continuously offered at net asset value but may also be traded
in the secondary market. ETFs are often structured to perform in a similar
fashion to a broad-based securities index. Investing in ETFs involves generally
the same risks as investing directly in the underlying instruments. Investing in
ETFs involves the risk that they will not perform in exactly the same fashion,
or in response to the same factors, as the index or underlying instruments.
Shares of ETFs may trade at prices other than NAV.
A
fund that invests in another investment company is subject to the risks
associated with direct ownership of the securities in which such investment
company invests. Fund shareholders indirectly bear their proportionate share of
the expenses of each such investment company, including its advisory and
administrative fees. The fund would also continue to pay its own advisory fees
and other expenses. Consequently, the fund and its shareholders would, in
effect, absorb two levels of fees with respect to investments in other
investment companies.
A
fund may invest in affiliated underlying funds, and those who manage such fund's
investments and their affiliates may earn different fees from different
underlying funds and may have an incentive to allocate more fund assets to
underlying funds from which they receive higher fees.
Master
Limited Partnerships (“MLPs”)
An
MLP is an entity that is generally taxed as a partnership for federal income tax
purposes and that derives each year at least 90% of its gross income from
“Qualifying Income”. Qualifying Income includes interest, dividends, real estate
rents, gain from the sale or disposition of real property, income and gain from
commodities or commodity futures, and income and gain from mineral or natural
resources activities that generate Qualifying Income. MLP interests (known as
units) are traded on securities exchanges or over-the-counter. An MLP’s
organization as a partnership and compliance with the Qualifying Income rules
generally eliminates federal tax at the entity level.
An
MLP has one or more general partners (who may be individuals, corporations, or
other partnerships) which manage the partnership, and limited partners, which
provide capital to the partnership but have no role in its management.
Typically, the general partner is owned by company management or another
publicly traded sponsoring corporation. When an investor buys units in an MLP,
the investor becomes a limited partner. Holders of MLP units have limited
control and voting rights on matters affecting the partnership and are exposed
to a remote possibility of liability for all of the obligations of that MLP in
the event that a court determines that the rights of the holders of MLP units to
vote to remove or replace the general partner of that MLP, to approve amendments
to that MLP’s partnership agreement, or to take other action under the
partnership agreement of that MLP would constitute “control” of the business of
that MLP, or a court or governmental agency determines that the MLP is
conducting business in a state without complying with the partnership statute of
that state. Holders of MLP units are also exposed to the risk that they will be
required to repay amounts to the MLP that are wrongfully distributed to
them.
The
business of certain MLPs is affected by supply and demand for energy commodities
because such MLPs derive revenue and income based upon the volume of the
underlying commodity produced, transported, processed, distributed, and/ or
marketed. Pipeline MLPs have indirect commodity exposure to oil and gas price
volatility because, although they do not own the underlying energy commodity,
the general level of commodity prices may affect the volume of the commodity the
MLP delivers to its customers and the cost of providing services such as
distributing natural gas liquids. The costs of natural gas pipeline MLPs to
perform services may exceed the negotiated rates under “negotiated rate”
contracts. Processing MLPs may be directly affected by energy commodity prices.
Propane MLPs own the underlying energy commodity, and therefore have direct
exposure to energy commodity prices. The MLP industry in general could be hurt
by market perception that MLP’s performance and valuation are directly tied to
commodity prices.
Pipeline
MLPs are common carrier transporters of natural gas, natural gas liquids
(primarily propane, ethane, butane and natural gasoline), crude oil or refined
petroleum products (gasoline, diesel fuel and jet fuel). Pipeline MLPs also may
operate ancillary businesses such as storage and marketing of such products.
Pipeline MLPs derive revenue from capacity and transportation fees.
Historically, pipeline output has been less exposed to cyclical economic forces
due to its low-cost structure and government-regulated nature. In addition, most
pipeline MLPs have limited direct commodity price exposure because they do not
own the product being shipped.
Processing
MLPs are gatherers and processors of natural gas as well as providers of
transportation, fractionation and storage of natural gas liquids (“NGLs”).
Processing MLPs derive revenue from providing services to natural gas producers,
which require treatment or processing before their natural gas commodity can be
marketed to utilities and other end user markets. Revenue for the processor is
fee based, although it is not uncommon to have some participation in the prices
of the natural gas and NGL commodities for a portion of revenue.
Propane
MLPs are distributors of propane to homeowners for space and water heating.
Propane MLPs derive revenue from the resale of the commodity on a margin over
wholesale cost. The ability to maintain margin is a key to profitability.
Propane serves approximately 3% of the household energy needs in the United
States, largely for homes beyond the geographic reach of natural gas
distribution pipelines. Approximately 70% of annual cash flow is earned during
the winter heating season (October through March). Accordingly, volumes are
weather dependent, but have utility type functions similar to electricity and
natural gas.
MLPs
operating interstate pipelines and storage facilities are subject to substantial
regulation by the Federal Energy Regulatory Commission (“FERC”), which regulates
interstate transportation rates, services and other matters regarding natural
gas pipelines including: the establishment of rates for service; regulation of
pipeline storage and liquified natural gas facility construction; issuing
certificates of need for companies intending to provide energy services or
constructing and operating interstate pipeline and storage facilities; and
certain other matters. FERC also regulates the interstate transportation of
crude oil, including: regulation of rates and practices of oil pipeline
companies; establishing equal service conditions to provide shippers with equal
access to pipeline transportation; and establishment of reasonable rates for
transporting petroleum and petroleum products by pipeline. Certain MLPs
regulated by the FERC have the right, but are not obligated, to redeem common
units held by an investor who is not subject to U.S. federal income taxation.
The financial condition and results of operations of an MLP that redeems its
common units could be adversely impacted.
MLPs
are subject to various federal, state and local environmental laws and health
and safety laws as well as laws and regulations specific to their particular
activities. These laws and regulations address: health and safety standards for
the operation of facilities, transportation systems and the handling of
materials; air and water pollution requirements and standards; solid waste
disposal requirements; land reclamation requirements; and requirements relating
to the handling and disposition of hazardous materials. MLPs are subject to the
costs of compliance with such laws applicable to them, and changes in such laws
and regulations may adversely affect their results of operations.
MLPs
may be subject to liability relating to the release of substances into the
environment, including liability under federal “Superfund” and similar state
laws for investigation and remediation of releases and threatened releases of
hazardous materials, as well as liability for injury and property damage for
accidental events, such as explosions or discharges of materials causing
personal injury and damage to property. Such potential liabilities could have a
material adverse effect upon the financial condition and results of operations
of MLPs.
MLPs
are subject to numerous business related risks, including: deterioration of
business fundamentals reducing profitability due to development of alternative
energy sources, consumer sentiment with respect to global warming, changing
demographics in the markets served, unexpectedly prolonged and precipitous
changes in commodity prices and increased competition that reduces the MLP’s
market share; the lack of growth of markets requiring growth through
acquisitions; disruptions in transportation systems; the dependence of certain
MLPs upon the energy exploration and development activities of unrelated third
parties; availability of capital for expansion and construction of needed
facilities; a significant decrease in natural gas production due to depressed
commodity prices or otherwise; the inability of MLPs to successfully integrate
recent or future acquisitions; and the general level of the
economy.
Municipal
Obligations and AMT-Subject Bonds
Municipal
Obligations are obligations issued by or on behalf of states, territories, and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, including municipal
utilities, or multi-state agencies or authorities. The interest on Municipal
Obligations is exempt from federal income tax in the opinion of bond counsel to
the issuer. Three major classifications of Municipal Obligations are: Municipal
Bonds, that generally have a maturity at the time of issue of one year or more;
Municipal Notes, that generally have a maturity at the time of issue of six
months to three years; and Municipal Commercial Paper, that generally has a
maturity at the time of issue of 30 to 270 days.
The
term “Municipal Obligations” includes debt obligations issued to obtain funds
for various public purposes, including the construction of a wide range of
public facilities such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets, water and sewer works, and electric utilities.
Other public purposes for which Municipal Obligations are issued include
refunding outstanding obligations, obtaining funds for general operating
expenses, and lending such funds to other public institutions and facilities. To
the extent that a fund invests a significant portion of its assets in municipal
obligations issued in connection with a single project, the fund likely will be
affected by the economic, business or political environment of the
project.
AMT-Subject
Bonds are industrial development bonds issued by or on behalf of public
authorities to obtain funds to provide for the construction, equipment, repair
or improvement of privately operated housing facilities, sports facilities,
convention or trade show facilities, airport, mass transit, industrial, port or
parking facilities, air or water pollution control facilities, and certain local
facilities for water supply, gas, electricity, or sewage or solid waste
disposal. They are considered to be Municipal Obligations if the interest paid
thereon qualifies as exempt from federal income tax in the opinion of bond
counsel to the issuer, even though the interest may be subject to the federal
individual alternative minimum tax.
Municipal
Bonds
Municipal
Bonds may be either “general obligation” or “revenue” issues. General obligation
bonds are secured by the issuer’s pledge of its faith, credit, and taxing power
for the payment of principal and interest. Revenue bonds are payable from the
revenues derived from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise tax or other specific revenue
source (e.g., the user of the facilities being financed), but not from the
general taxing power. Industrial development bonds and pollution control bonds
in most cases are revenue bonds and generally do not carry the pledge of the
credit of the issuing municipality. The payment of the principal and interest on
industrial revenue bonds depends solely on the ability of the user of the
facilities financed by the bonds to meet its financial obligations and the
pledge, if any, of real and personal property so financed as security for such
payment. Funds may also invest in “moral obligation” bonds that are normally
issued by special purpose public authorities. If an issuer of moral obligation
bonds is unable to meet its obligations, the repayment of the bonds becomes a
moral commitment but not a legal obligation of the state or municipality in
question.
Municipal
Commercial Paper
Municipal
Commercial Paper refers to short-term obligations of municipalities that may be
issued at a discount and may be referred to as Short-Term Discount Notes.
Municipal Commercial Paper is likely to be used to meet seasonal working capital
needs of a municipality or interim construction financing. Generally they are
repaid from general revenues of the municipality or refinanced with long-term
debt. In most cases Municipal Commercial Paper is backed by letters of credit,
lending agreements, note repurchase agreements or other credit facility
agreements offered by banks or other institutions.
Municipal
Notes
Municipal
Notes usually are general obligations of the issuer and are sold in anticipation
of a bond sale, collection of taxes, or receipt of other revenues. Payment of
these notes is primarily dependent upon the issuer’s receipt of the anticipated
revenues. Other notes include “Construction Loan Notes” issued to provide
construction financing for specific projects, and “Bank Notes” issued by local
governmental bodies and agencies to commercial banks as evidence of borrowings.
Some notes (“Project Notes”) are issued by local agencies under a program
administered by the U.S. Department of Housing and Urban Development. Project
Notes are secured by the full faith and credit of the United
States.
•Bank
Notes are notes issued by local governmental bodies and agencies such as those
described above to commercial banks as evidence of borrowings. The purposes for
which the notes are issued are varied but they are frequently issued to meet
short-term working-capital or capital-project needs. These notes may have risks
similar to the risks associated with TANs and RANs.
•Bond
Anticipation Notes (“BANs”) are usually general obligations of state and local
governmental issuers which are sold to obtain interim financing for projects
that will eventually be funded through the sale of long-term debt obligations or
bonds. The ability of an issuer to meet its obligations on its BANs is primarily
dependent on the issuer’s access to the long-term municipal bond market and the
likelihood that the proceeds of such bond sales will be used to pay the
principal and interest on the BANs.
• Construction
Loan Notes are issued to provide construction financing for specific projects.
Permanent financing, the proceeds of which are applied to the payment of
construction loan notes, is sometimes provided by a commitment by the Government
National Mortgage Association (“GNMA”) to purchase the loan, accompanied by a
commitment by the Federal Housing Administration to insure mortgage advances
thereunder. In other instances, permanent financing is provided by commitments
of banks to purchase the loan. The California Municipal and Tax-Exempt Bond
Funds will only purchase construction loan notes that are subject to GNMA or
bank purchase commitments.
•Revenue
Anticipation Notes (“RANs”) are issued by governments or governmental bodies
with the expectation that future revenues from a designated source will be used
to repay the notes. In general they also constitute general obligations of the
issuer. A decline in the receipt of projected revenues, such as anticipated
revenues from another level of government, could adversely affect an issuer’s
ability to meet its obligations on outstanding RANs. In addition, the
possibility that the revenues would, when received, be used to meet other
obligations could affect the ability of the issuer to pay the principal and
interest on RANs.
•Tax
Anticipation Notes (“TANs”) are issued by state and local governments to finance
the current operations of such governments. Repayment is generally to be derived
from specific future tax revenues. TANs are usually general obligations of the
issuer. A weakness in an issuer’s capacity to raise taxes due to, among other
things, a decline in its tax base or a rise in delinquencies, could adversely
affect the issuer’s ability to meet its obligations on outstanding
TANs.
Other
Municipal Obligations
Other
kinds of Municipal Obligations are occasionally available in the marketplace,
and the fund may invest in such other kinds of obligations to the extent
consistent with its investment objective and limitations. Such obligations may
be issued for different purposes and with different security than those
mentioned.
Stand-By
Commitments
Funds
may acquire stand-by commitments with respect to municipal obligations held in
their respective portfolios. Under a stand-by commitment, a broker-dealer,
dealer, or bank would agree to purchase, at the relevant funds’ option, a
specified municipal security at a specified price. Thus, a stand-by commitment
may be viewed as the equivalent of a put option acquired by a fund with respect
to a particular municipal security held in the fund’s portfolio.
The
amount payable to a fund upon its exercise of a stand-by commitment normally
would be 1) the acquisition cost of the municipal security (excluding any
accrued interest that the fund paid on the acquisition), less any amortized
market premium or plus any amortized market or original issue discount during
the period the fund owned the security, plus, 2) all interest accrued on the
security since the last interest payment date during the period the security was
owned by the fund. Absent unusual circumstances, the fund would value the
underlying municipal security at amortized cost. As a result, the amount payable
by the broker-dealer, dealer or bank during the time a stand-by commitment is
exercisable would be substantially the same as the value of the underlying
municipal obligation.
A
fund’s right to exercise a stand-by commitment would be unconditional and
unqualified. Although a fund could not transfer a stand-by commitment, it could
sell the underlying municipal security to a third party at any time. It is
expected that stand-by commitments generally will be available to the funds
without the payment of any direct or indirect consideration. The funds may,
however, pay for stand-by commitments if such action is deemed necessary. In any
event, the total amount paid for outstanding stand-by commitments held in a
fund’s portfolio would not exceed 0.50% of the value of a fund’s total assets
calculated immediately after each stand-by commitment is acquired.
The
funds intend to enter into stand-by commitments only with broker-dealers,
dealers, or banks that those managing the fund’s investments believe present
minimum credit risks. A fund’s ability to exercise a stand-by commitment will
depend upon the ability of the issuing institution to pay for the underlying
securities at the time the stand-by commitment is exercised. The credit of each
institution issuing a stand-by commitment to a fund will be evaluated on an
ongoing basis by those managing the fund’s investments.
A
fund intends to acquire stand-by commitments solely to facilitate portfolio
liquidity and does not intend to exercise its right thereunder for trading
purposes. The acquisition of a stand-by commitment would not affect the
valuation of the underlying municipal security. Each stand-by commitment will be
valued at zero in determining net asset value. Should a fund pay directly or
indirectly for a stand-by commitment, its costs will be reflected in realized
gain or loss when the commitment is exercised or expires. The maturity of a
municipal security purchased by a fund will not be considered shortened by any
stand-by commitment to which the obligation is subject. Thus, stand-by
commitments will not affect the dollar-weighted average maturity of a fund’s
portfolio.
Variable
and Floating Rate Obligations
Certain
Municipal Obligations, obligations issued or guaranteed by the U.S. government
or its agencies or instrumentalities, and debt instruments issued by domestic
banks or corporations may carry variable or floating rates of interest. Such
instruments bear interest at rates which are not fixed, but which vary with
changes in specified market rates or indices, such as a bank prime rate or
tax-exempt money market index. Variable rate notes are adjusted to current
interest rate levels at certain specified times, such as every 30 days. A
floating rate note adjusts automatically whenever there is a change in its base
interest rate adjustor, e.g., a change in the prime lending rate or specified
interest rate indices. Typically such instruments carry demand features
permitting the fund to redeem at par.
The
fund’s right to obtain payment at par on a demand instrument upon demand could
be affected by events occurring between the date the fund elects to redeem the
instrument and the date redemption proceeds are due which affects the ability of
the issuer to pay the instrument at par value. Those managing the fund’s
investments monitor on an ongoing basis the pricing, quality, and liquidity of
such instruments and similarly monitor the ability of an issuer of a demand
instrument, including those supported by bank letters of credit or guarantees,
to pay principal and interest on demand. Although the ultimate maturity of such
variable rate obligations may exceed one year, the fund treats the maturity of
each variable rate demand obligation as the longer of a) the notice period
required before the fund is entitled to payment of the principal amount through
demand or b) the period remaining until the next interest rate adjustment.
Floating rate instruments with demand features are deemed to have a maturity
equal to the period remaining until the principal amount can be recovered
through demand.
Funds
may purchase participation interests in variable rate Municipal Obligations
(such as industrial development bonds). A participation interest gives the
purchaser an undivided interest in the Municipal Obligation in the proportion
that its participation interest bears to the total principal amount of the
Municipal Obligation. A fund has the right to demand payment on seven days’
notice, for all or any part of the fund’s participation interest in the
Municipal Obligation, plus accrued interest. Each participation interest is
backed by an irrevocable letter of credit or guarantee of a bank. Banks will
retain a service and letter of credit fee and a fee for issuing repurchase
commitments in an amount equal to the excess of the interest paid on the
Municipal Obligations over the negotiated yield at which the instruments were
purchased by the fund.
Risks
of Municipal Obligations
The
yields on Municipal Obligations are dependent on a variety of factors, including
general economic and monetary conditions, money market factors, conditions in
the Municipal Obligations market, size of a particular offering, maturity of the
obligation, and rating of the issue. The fund’s ability to achieve its
investment objective also depends on the continuing ability of the issuers of
the Municipal Obligations in which it invests to meet their obligation for the
payment of interest and principal when due.
Municipal
Obligations are subject to the provisions of bankruptcy, insolvency, and other
laws affecting the rights and remedies of creditors, such as the Federal
Bankruptcy Act. They are also subject to federal or state laws, if any, which
extend the time for payment of principal or interest, or both, or impose other
constraints upon enforcement of such obligations or upon municipalities to levy
taxes. The power or ability of issuers to pay, when due, principal of and
interest on Municipal Obligations may also be materially affected by the results
of litigation or other conditions.
From
time to time, proposals have been introduced before Congress for the purpose of
restricting or eliminating the federal income tax exemption for interest on
Municipal Obligations. It may be expected that similar proposals will be
introduced in the future. If such a proposal was enacted, the ability of the
fund to pay “exempt interest” dividends may be adversely affected. The fund
would reevaluate its investment objective and policies and consider changes in
its structure.
Special
Considerations Relating to California Municipal Obligations
The
California Municipal Fund concentrates its investments in California municipal
obligations, and therefore may be significantly impacted by political, economic,
or regulatory developments that affect issuers in California and their ability
to pay principal and interest on their obligations. The ability of issuers to
pay interest on, and repay principal of, California municipal obligations may be
affected by 1) amendments to the California Constitution and related statutes
that limit the taxing and spending authority of California government entities,
2) voter initiatives, 3) a wide variety of California laws and regulations,
including laws related to the operation of health care institutions and laws
related to secured interests in real property, and 4) the general financial
condition of the State of California and the California economy. The Tax-Exempt
Bond Fund also invests in California municipal obligations.
Taxable
Investments of the Municipal Funds
The
California Municipal and Tax-Exempt Bond Funds may invest a portion of their
assets, as described in the Prospectus, in taxable short-term investments
consisting of: Obligations issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, domestic bank certificates of deposit and
bankers’ acceptances, short-term corporate debt securities such as commercial
paper, and repurchase agreements (“Taxable Investments”). These investments must
have a stated maturity of one year or less at the time of purchase and must meet
the following standards: banks must have assets of at least $1 billion;
commercial paper must be rated at least “A” by S&P Global or “Prime” by
Moody’s or, if not rated, must be issued by companies having an outstanding debt
issue rated at least “A” by S&P Global or Moody’s; corporate bonds and
debentures must be rated at least “A” by S&P Global or Moody’s. Interest
earned from Taxable Investments is taxable to investors. When, in the opinion of
the Fund’s Manager, it is advisable to maintain a temporary “defensive” posture,
the California Municipal and Tax-Exempt Bond Funds may invest without limitation
in Taxable Investments. At other times, the following investments will not
exceed 20% of the Fund’s total assets: Taxable Investments; Municipal
Obligations that do not meet quality standards required for the 80% portion of
the portfolio; and Municipal Obligations, the interest on which is treated as a
tax preference item for purposes of the federal individual alternative minimum
tax.
Insurance
The
insured municipal obligations in which the California Municipal and Tax-Exempt
Bond Funds may invest are insured under insurance policies that relate to the
specific municipal obligation in question. This insurance is generally
non-cancelable and will continue in force so long as the municipal obligations
are outstanding, and the insurer remains in business.
The
insured municipal obligations are generally insured as to the scheduled payment
of all installments of principal and interest as they fall due. The insurance
covers only credit risk and therefore does not guarantee the market value of the
obligations in a Fund’s investment portfolio or a Fund’s NAV. The Fund’s NAV
will continue to fluctuate in response to fluctuations in interest rates. A
Fund’s investment policy requiring investment in insured municipal obligations
will not affect the Fund’s ability to hold its assets in cash or to invest in
escrow-secured and defeased bonds or in certain short-term tax-exempt
obligations, or affect its ability to invest in uninsured taxable obligations
for temporary or liquidity purposes or on a defensive basis.
Pay-in-Kind
Securities
Each
Fund may invest in pay-in-kind securities. Pay-in-kind securities pay dividends
or interest in the form of additional securities of the issuer, rather than in
cash. These securities are usually issued and traded at a discount from their
face amounts. The amount of the discount varies depending on various factors,
such as the time remaining until maturity of the securities, prevailing interest
rates, the liquidity of the security, and the perceived credit quality of the
issuer. The market prices of pay-in-kind securities generally are more volatile
than the market prices of securities that pay interest periodically and are
likely to respond to changes in interest rates to a greater degree than are
other types of securities having similar maturities and credit
quality.
Portfolio
Turnover (Active Trading)
Portfolio
turnover is a measure of how frequently a portfolio’s securities are bought and
sold. The portfolio turnover rate is generally calculated as the dollar value of
the lesser of a portfolio’s purchases or sales of shares of securities during a
given year, divided by the monthly average value of the portfolio securities
during that year (excluding securities whose maturity or expiration at the time
of acquisition were less than one year). For example, a portfolio reporting a
100% portfolio turnover rate would have purchased and sold securities worth as
much as the monthly average value of its portfolio securities during the
year.
It
is not possible to predict future turnover rates with accuracy. Many variable
factors are outside the control of a portfolio manager. The investment outlook
for the securities in which a portfolio may invest may change as a result of
unexpected developments in securities markets, economic or monetary policies, or
political relationships. High market volatility may result in a portfolio
manager using a more active trading strategy than might otherwise be employed.
Each portfolio manager considers the economic effects of portfolio turnover but
generally does not treat the portfolio turnover rate as a limiting factor in
making investment decisions.
Sale
of shares by investors may require the liquidation of portfolio securities to
meet cash flow needs. In addition, changes in a particular portfolio’s holdings
may be made whenever the portfolio manager considers that a security is no
longer appropriate for the portfolio or that another security represents a
relatively greater opportunity. Such changes may be made without regard to the
length of time that a security has been held.
Higher
portfolio turnover rates generally increase transaction costs that are expenses
of the Fund. Active trading may generate short-term gains (losses) for taxable
shareholders.
The
following Funds had significant variation in portfolio turnover rates over the
two most recently completed fiscal years:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund/Portfolio |
2023 Turnover |
2022 Turnover |
| Comments |
Government
& High Quality Bond |
128.0% |
352.1% |
| Turnover
decreased in 2023 relative to 2022 due to a decrease in flows and trading
as well as a change in portfolio allocation. |
Principal
LifeTime Strategic Income |
11.8% |
33.6% |
| Turnover
decreased in 2023 due to fewer strategic trades placed compared to
2022. |
Principal
LifeTime 2015 |
14.5% |
29.2% |
| Turnover
decreased in 2023 due to fewer strategic trades placed compared to
2022. |
Principal
LifeTime 2020 |
9.8% |
25.2% |
| Turnover
decreased in 2023 due to fewer strategic trades placed compared to
2022. |
Principal
LifeTime 2030 |
11.2% |
31.1% |
| Turnover
decreased in 2023 due to fewer strategic trades placed compared to
2022. |
Principal
LifeTime 2045 |
11.4% |
23.8% |
| Turnover
decreased in 2023 due to fewer strategic trades placed compared to
2022. |
Principal
LifeTime 2050 |
10.6% |
26.9% |
| Turnover
decreased in 2023 due to fewer strategic trades placed compared to
2022. |
Principal
LifeTime 2055 |
10.3% |
22.6% |
| Turnover
decreased in 2023 due to fewer strategic trades placed compared to
2022. |
Principal
LifeTime 2060 |
10.6% |
21.7% |
| Turnover
decreased in 2023 due to fewer strategic trades placed compared to
2022. |
SAM
Conservative Balanced |
25.5% |
55.3% |
| Turnover
was lower in 2023 relative to 2022 due to a strategic asset allocation
change in 2022. Turnover in 2023 is in line with the advisor’s
expectations. |
SAM
Conservative Growth |
25.6% |
52.4% |
| Turnover
was lower in 2023 relative to 2022 due to a strategic asset allocation
change in 2022. Turnover in 2023 is in line with the advisor’s
expectations. |
SAM
Flexible Income |
20.8% |
57.3% |
| Turnover
was lower in 2023 relative to 2022 due to a strategic asset allocation
change in 2022. Turnover in 2023 is in line with the advisor’s
expectations. |
Preferred
Securities
Preferred
securities can include: traditional preferred securities, hybrid-preferred
securities, $25 par hybrid preferred securities, baby bonds, U.S. dividend
received deduction (“DRD”) preferred stock, fixed rate and floating rate
adjustable preferred securities, step-up preferred securities, public and 144A
$1000 par capital securities including U.S. agency subordinated debt issues,
trust originated preferred securities, monthly income preferred securities,
quarterly income bond securities, quarterly income debt securities, quarterly
income preferred securities, corporate trust securities, public income notes,
and other trust preferred securities.
•Traditional
Preferred Securities. Traditional preferred securities may be issued by an
entity taxable as a corporation and pay fixed or floating rate dividends.
However, these claims are subordinated to more senior creditors, including
senior debt holders. “Preference” means that a company must pay dividends on its
preferred securities before paying any dividends on its common stock, and the
claims of preferred securities holders are ahead of common stockholders’ claims
on assets in a corporate liquidation. Holders of preferred securities usually
have no right to vote for corporate directors or on other matters. Preferred
securities share many investment characteristics with both common stock and
bonds.
•Hybrid
or Trust Preferred Securities. Hybrid-preferred securities are debt instruments
that have characteristics similar to those of traditional preferred securities
(characteristics of both subordinated debt and preferred stock). Hybrid
preferred securities may be issued by corporations, generally in the form of
interest-bearing instruments with preferred securities characteristics, or by an
affiliated trust or partnership of the corporation, generally in the form of
preferred interests in subordinated business trusts or similarly structured
securities. The hybrid-preferred securities market consists of both fixed and
adjustable coupon rate securities that are either perpetual in nature or have
stated maturity dates. Hybrid preferred holders generally have claims to assets
in a corporate liquidation that are senior to those of traditional preferred
securities but subordinate to those of senior debt holders. Certain subordinated
debt and senior debt issues that have preferred characteristics are also
considered to be part of the broader preferred securities market.
Preferred
securities may be issued by trusts (likely one that is wholly-owned by a
financial institution or other corporate entity, typically a bank holding
company) or other special purpose entities established by operating companies,
and are therefore not direct obligations of operating companies. The financial
institution creates the trust and owns the trust’s common securities. The trust
uses the sale proceeds of its preferred securities to purchase, for example,
subordinated debt issued by the financial institution. The financial institution
uses the proceeds from the subordinated debt sale to increase its capital while
the trust receives periodic interest payments from the financial institution for
holding the subordinated debt. The trust uses the funds received to make
dividend payments to the holders of the trust preferred securities. The primary
advantage of this structure may be that the trust preferred securities are
treated by the financial institution as debt securities for tax purposes and as
equity for the calculation of capital requirements.
Trust
preferred securities typically bear a market rate coupon comparable to interest
rates available on debt of a similarly rated issuer. Typical characteristics
include long-term maturities, early redemption by the issuer, periodic fixed or
variable interest payments, and maturities at face value. Holders of trust
preferred securities have limited voting rights to control the activities of the
trust and no voting rights with respect to the financial institution. The market
value of trust preferred securities may be more volatile than those of
conventional debt securities. Trust preferred securities may be issued in
reliance on Rule 144A under the 1933 Act and subject to restrictions on resale.
There can be no assurance as to the liquidity of trust preferred securities and
the ability of holders, such as a fund, to sell their holdings. The condition of
the financial institution can be looked to identify the risks of trust preferred
securities as the trust typically has no business operations other than to issue
the trust preferred securities. If the financial institution defaults on
interest payments to the trust, the trust will not be able to make dividend
payments to holders of its securities, such as a fund.
•Floating
Rate Preferred Securities. Floating rate preferred securities provide for a
periodic adjustment in the interest rate paid on the securities. The terms of
such securities provide that interest rates are adjusted periodically based upon
an interest rate adjustment index. The adjustment intervals may be regular, and
range from daily up to annually, or may be event-based, such as a change in the
short-term interest rate. Because of the interest rate reset feature, floating
rate securities provide the Fund with a certain degree of protection against
rising interest rates, although the interest rates of floating rate securities
will participate in any declines in interest rates as well.
If
a portion of a fund’s income consists of dividends paid by U.S. corporations, a
portion of the dividends paid by the fund may be eligible for the corporate
dividends-received deduction for corporate shareholders. In addition,
distributions reported by a fund as derived from qualified dividend income
(“QDI”) will be taxed in the hands of individuals at the reduced rates
applicable to net capital gains, provided certain holding period and other
requirements are met by both the shareholder and the fund. Dividend income that
a fund receives from REITs, if any, will generally not be treated as QDI and
will not qualify for the corporate dividends-received deduction. It is unclear
the extent to which distributions a fund receives from investments in certain
preferred securities will be eligible for treatment as QDI or for the corporate
dividends-received deduction. A fund cannot predict at this time what portion,
if any, of its dividends will qualify for the corporate dividends-received
deduction or be eligible for the reduced rates of taxation applicable to
QDI.
Real
Estate Investment Trusts (“REITs”)
REITs
are pooled investment vehicles that invest in income producing real estate, real
estate related loans, or other types of real estate interests. U.S. REITs are
allowed to eliminate corporate level federal tax so long as they meet certain
requirements of the Internal Revenue Code. Foreign REITs (“REIT-like”) entities
may have similar tax treatment in their respective countries. Equity real estate
investment trusts own real estate properties, while mortgage real estate
investment trusts make and/or invests in construction, development, and
long-term mortgage loans. Their value may be affected by changes in the
underlying property of the trusts, the creditworthiness of the issuer, property
taxes, interest rates, and tax and regulatory requirements, such as those
relating to the environment. Both types of trusts are not diversified, are
dependent upon management skill, are subject to heavy cash flow dependency,
defaults by borrowers, self-liquidation, and the possibility of failing to
qualify for tax-free status of income under the Internal Revenue Code and
failing to maintain exemption from the 1940 Act. In addition, foreign REIT-like
entities will be subject to foreign securities risks. (See “Foreign
Securities”).
Repurchase
and Reverse Repurchase Agreements, Mortgage Dollar Rolls and
Sale-Buybacks
Each
Fund may invest in repurchase and reverse repurchase agreements. Repurchase
agreements typically involve the purchase of debt securities from a financial
institution such as a bank, savings and loan association, or broker-dealer. A
repurchase agreement provides that the fund sells back to the seller and that
the seller repurchases the underlying securities at a specified price on a
specific date. Repurchase agreements may be viewed as loans by a fund
collateralized by the underlying securities. This arrangement results in a fixed
rate of return that is not subject to market fluctuation while the fund holds
the security. In the event of a default or bankruptcy by a selling financial
institution, the affected fund bears a risk of loss. To minimize such risks, the
fund enters into repurchase agreements only with parties those managing the
fund’s investments deem creditworthy (those that are large, well-capitalized,
and well-established financial institutions). In addition, the value of the
securities collateralizing the repurchase agreement is, and during the entire
term of the repurchase agreement remains, at least equal to the acquisition
price the Funds pay to the seller of the securities.
In
a repurchase agreement, a Fund purchases a security and simultaneously commits
to resell that security to the seller at an agreed upon price on an agreed upon
date within a number of days (usually not more than seven) from the date of
purchase. The resale price consists of the purchase price plus an amount that is
unrelated to the coupon rate or maturity of the purchased security. A repurchase
agreement involves the obligation of the seller to pay the agreed upon price,
which obligation is in effect secured by the value (at least equal to the amount
of the agreed upon resale price and marked-to-market daily) of the underlying
security or “collateral.” A risk associated with repurchase agreements is the
failure of the seller to repurchase the securities as agreed, which may cause a
Fund to suffer a loss if the market value of such securities declines before
they can be liquidated on the open market. In the event of bankruptcy or
insolvency of the seller, a Fund may encounter delays and incur costs in
liquidating the underlying security. Repurchase agreements that mature in more
than seven days are subject to each Fund’s limit on illiquid investments. While
it is not possible to eliminate all risks from these transactions, it is the
policy of the Fund to limit repurchase agreements to those parties whose
creditworthiness has been reviewed and found satisfactory by those managing the
fund’s investments.
Each
Fund may use reverse repurchase agreements, mortgage dollar rolls, and
economically similar transactions to obtain cash to satisfy unusually heavy
redemption requests or for other temporary or emergency purposes without the
necessity of selling portfolio securities, or to earn additional income on
portfolio securities, such as Treasury bills or notes. In a reverse repurchase
agreement, a Fund sells a portfolio security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument at a
particular price and time. A Fund will enter into reverse repurchase agreements
only with parties that those managing the fund's investments deem creditworthy.
Using reverse repurchase agreements to earn additional income involves the risk
that the interest earned on the invested proceeds is less than the expense of
the reverse repurchase agreement transaction. This technique may also have a
leveraging effect on the Fund.
A
“mortgage dollar roll” is similar to a reverse repurchase agreement in certain
respects. In a “dollar roll” transaction a Fund sells a mortgage-related
security, such as a security issued by the Government National Mortgage
Association, to a dealer and simultaneously agrees to repurchase a similar
security (but not the same security) in the future at a pre-determined price. A
dollar roll can be viewed, like a reverse repurchase agreement, as a
collateralized borrowing in which a Fund pledges a mortgage-related security to
a dealer to obtain cash. Unlike in the case of reverse repurchase agreements,
the dealer with which a Fund enters into a dollar roll transaction is not
obligated to return the same securities as those originally sold by the Fund,
but only securities which are “substantially identical.” To be considered
“substantially identical,” the securities returned to a Fund generally must: 1)
be collateralized by the same types of underlying mortgages; 2) be issued by the
same agency and be part of the same program; 3) have a similar original stated
maturity; 4) have identical net coupon rates; 5) have similar market yields (and
therefore price); and 6) satisfy “good delivery” requirements, meaning that the
aggregate principal amounts of the securities delivered and received back must
be within 0.01% of the initial amount delivered.
Each
Fund also may effect simultaneous purchase and sale transactions that are known
as “sale-buybacks.” A sale-buyback is similar to a reverse repurchase agreement,
except that in a sale-buyback, the counterparty who purchases the security is
entitled to receive any principal or interest payments made on the underlying
security pending settlement of the Fund’s repurchase of the underlying security.
Restricted
and Illiquid Securities
A
Fund may experience difficulty in valuing and selling illiquid securities and,
in some cases, may be unable to value or sell certain illiquid securities for an
indefinite period of time. Illiquid securities may include a wide variety of
investments, such as (1) repurchase agreements maturing in more than seven days
(unless the agreements have demand/redemption features), (2) OTC options
contracts and certain other derivatives (including certain swap agreements), (3)
fixed time deposits that are not subject to prepayment or do not provide for
withdrawal penalties upon prepayment (other than overnight deposits), (4) loan
interests and other direct debt instruments, (5) certain municipal lease
obligations, (6) commercial paper issued pursuant to Section 4(a)(2) of the 1933
Act, (7) thinly-traded securities, and (8) securities whose resale is restricted
under the federal securities laws or contractual provisions (including
restricted, privately placed securities that, under the federal securities laws,
generally may be resold only to qualified institutional buyers). Generally,
restricted securities may be sold only in a public offering for which a
registration statement has been filed and declared effective or in a transaction
that is exempt from the registration requirements of the Securities Act of 1933.
When registration is required, a Fund that owns restricted securities may be
obligated to pay all or part of the registration expenses and a considerable
period may elapse between the time of the decision to sell and the time the Fund
may be permitted to sell a restricted security. If adverse market conditions
were to develop during such a period, the Fund might obtain a less favorable
price than existed when it decided to sell.
Illiquid
and restricted securities are priced at fair value as determined in good faith
by PGI as the Funds’ valuation designee, subject to the Board’s oversight. As
described above, some of the Funds have adopted investment restrictions that
limit investments in illiquid securities.
Royalty
Trusts
A
royalty trust generally acquires an interest in natural resource or chemical
companies and distributes the income it receives to its investors. A sustained
decline in demand for natural resource and related products could adversely
affect royalty trust revenues and cash flows. Such a decline could result from a
recession or other adverse economic conditions, an increase in the market price
of the underlying commodity, higher taxes or other regulatory actions that
increase costs, or a shift in consumer demand. Rising interest rates could harm
the performance and limit the capital appreciation of royalty trusts because of
the increased availability of alternative investments at more competitive
yields. Fund shareholders will indirectly bear their proportionate share of the
royalty trusts’ expenses.
Securitized
Products - Mortgage- and Asset-Backed Securities
The
yield characteristics of the mortgage- and asset-backed securities in which a
Fund may invest differ from those of traditional debt securities. Among the
major differences are that the interest and principal payments are made more
frequently on mortgage- and asset-backed securities (usually monthly) and that
principal may be prepaid at any time because the underlying mortgage loans or
other assets generally may be prepaid at any time. As a result, if a Fund
purchases those securities at a premium, a prepayment rate that is faster than
expected will reduce their yield, while a prepayment rate that is slower than
expected will have the opposite effect of increasing yield. If the Fund
purchases these securities at a discount, faster than expected prepayments will
increase their yield, while slower than expected prepayments will reduce their
yield. Amounts available for reinvestment by a Fund are likely to be greater
during a period of declining interest rates and, as a result, are likely to be
reinvested at lower interest rates than during a period of rising interest
rates.
In
general, the prepayment rate for mortgage-backed securities decreases as
interest rates rise and increases as interest rates fall. However, rising
interest rates will tend to decrease the value of these securities. In addition,
an increase in interest rates may affect the volatility of these securities by
effectively changing a security that was considered a short-term security at the
time of purchase into a long-term security. Long-term securities generally
fluctuate more widely in response to changes in interest rates than short- or
medium-term securities.
The
market for privately issued mortgage- and asset-backed securities is smaller and
less liquid than the market for U.S. government mortgage-backed securities. A
collateralized mortgage obligation (“CMO”) may be structured in a manner that
provides a wide variety of investment characteristics (yield, effective
maturity, and interest rate sensitivity). As market conditions change, and
especially during periods of rapid market interest rate changes, the ability of
a CMO to provide the anticipated investment characteristics may be greatly
diminished. Increased market volatility and/or reduced liquidity may
result.
Each
Fund may invest in each of collateralized bond obligations (“CBOs”),
collateralized loan obligations (“CLOs”), other collateralized debt obligations
(“CDOs”), and other similarly structured securities. CBOs, CLOs, and other CDOs
are types of asset-backed securities. A CBO is a trust that is often backed by a
diversified pool of high risk, below-investment-grade fixed-income securities.
The collateral can be from many different types of fixed-income securities, such
as high yield debt, residential privately issued mortgage-related securities,
commercial privately issued mortgage-related securities, trust preferred
securities, and emerging market debt. A CLO is a trust typically collateralized
by a pool of loans, which may include, among others, domestic and foreign senior
secured loans, senior unsecured loans, and subordinate corporate loans,
including loans that may be rated below investment grade or equivalent unrated
loans. Other CDOs are trusts backed by other types of assets representing
obligations of various parties. CBOs, CLOs, and other CDOs may charge management
fees and administrative expenses.
Short
Sales
A
short sale involves the sale by a fund of a security that it does not own with
the expectation of covering settlement by purchasing the same security at a
later date at a lower price. A fund may also enter into a short position by
using a derivative instrument, such as a future, forward, or swap agreement. If
the price of the security or derivative increases prior to the time the fund is
required to replace the borrowed security, then the fund will incur a loss equal
to the increase in price from the time that the short sale was entered into plus
any premiums and interest paid to the broker. Therefore, short sales involve the
risk that losses may be exaggerated, potentially losing more money than the
value of the investment.
A
“short sale against the box” is a technique that involves selling either a
security owned by a fund, or a security equivalent in kind and amount to the
security sold short that the fund has the right to obtain, at no additional
cost, for delivery at a specified date in the future. Each fund may enter into a
short sale against the box to hedge against anticipated declines in the market
price of portfolio securities. If the value of the securities sold short against
the box increases prior to the scheduled delivery date, a fund will lose
money.
Special
Purpose Acquisition Companies (“SPACs”)
Each
Fund may invest in securities of special purpose acquisition companies (“SPACs”)
or similar special purpose entities that pool funds to seek potential
acquisition opportunities. Unless and until an acquisition is completed, a SPAC
or similar entity generally maintains assets (less a portion retained to cover
expenses) in a trust account comprised of U.S. government securities, money
market securities, and cash, and similar investments whose returns or yields may
be significantly lower than those of the Fund’s other investments. Because SPACs
and similar entities are in essence blank-check companies without an operating
history or ongoing business other than seeking acquisitions, the value of their
securities is particularly dependent on the ability of the entity’s management
to identify and complete a profitable acquisition, which may not occur. For
example, even if an acquisition or merger target is identified, the Fund may
elect not to participate in, or vote to approve, the proposed transaction.
Moreover, an acquisition or merger once effected may prove unsuccessful and an
investment in the SPAC may lose value.
SPACs
are also subject to the following additional risks:
•The
risk that, in the case of SPACs used as an opportunity for startups to go public
without going through the traditional IPO process, such startups may become
publicly traded with potentially less due diligence than what is typical in a
traditional IPO through an underwriter and may not be experienced in facing the
challenges, expenses and risks of being a public company, including the
increased regulatory and financial scrutiny and the need to comply with
applicable governance and accounting requirements.
•SPAC
sponsors may have a potential conflict of interest to complete a deal that may
be unfavorable for other investors in the SPAC. For example, SPAC sponsors often
own warrants to acquire additional shares of the company at a fixed price, and
the exercise by the SPAC sponsor of its warrants may dilute the value of the
equity interests of other investors in the SPAC.
•Some
SPACs may pursue acquisitions only within certain industries or regions, which
may increase the volatility of their prices.
•Only
a thinly traded market for shares of or interests in a SPAC may develop, or
there may be no market at all, leaving the Fund unable to sell its interest in a
SPAC or to sell its interest only at a lower price. Investments in SPACs may
include private placements, including PIPEs, and, accordingly, may be considered
illiquid and/or be subject to restrictions on resale.
•Values
of investments in SPACs may be highly volatile and may depreciate significantly
over time.
Supranational
Entities
Each
Fund may invest in obligations of supranational entities. A supranational entity
is an entity designated or supported by national governments to promote economic
reconstruction, development or trade amongst nations. Examples of supranational
entities include the International Bank for Reconstruction and Development (also
known as the World Bank) and the European Investment Bank. Obligations of
supranational entities are subject to the risk that the governments on whose
support the entity depends for its financial backing or repayment may be unable
or unwilling to provide that support. Obligations of a supranational entity that
are denominated in foreign currencies will also be subject to the risks
associated with investments in foreign currencies.
Synthetic
Securities
Incidental
to other transactions in fixed income securities and/or for investment purposes,
a Fund also may combine options on securities with cash, cash equivalent
investments or other fixed income securities in order to create “synthetic”
securities which approximate desired risk and return profiles. This may be done
where a “non-synthetic” security having the desired risk/return profile either
is unavailable (e.g., short-term securities of certain non-U.S. governments) or
possesses undesirable characteristics (e.g., interest payments on the security
would be subject to non-U.S. withholding taxes). A Fund also may purchase
forward non-U.S. exchange contracts in conjunction with U.S. dollar-denominated
securities in order to create a synthetic non-U.S. currency denominated security
which approximates desired risk and return characteristics where the
non-synthetic securities either are not available in non-U.S. markets or possess
undesirable characteristics. The use of synthetic bonds and other synthetic
securities may involve risks different from, or potentially greater than, risks
associated with direct investments in securities and other assets. Synthetic
securities may increase other Fund risks, including market risk, liquidity risk,
and credit risk, and their value may or may not correlate with the value of the
relevant underlying asset.
Temporary
Defensive Measures/Money Market Instruments
The
Government Money Market and Money Market Funds invest all of their available
assets in money market instruments maturing in 397 days or less, with certain
exceptions permitted by applicable regulations. In addition, each Fund may make
money market investments (cash equivalents), without limit, pending other
investment or settlement, for liquidity, or in adverse market conditions.
Following are descriptions of the types of money market instruments that each
Fund may purchase:
•U.S.
Government Securities - Securities issued or guaranteed by the U.S. government,
including treasury bills, notes, and bonds.
•U.S.
Government Agency Securities - Obligations issued or guaranteed by agencies or
instrumentalities of the U.S. government.
•U.S.
agency obligations include, but are not limited to, the Bank for Cooperatives,
Federal Home Loan Banks, and Federal Intermediate Credit Banks.
•U.S.
instrumentality obligations include, but are not limited to, the Export-Import
Bank, Federal Home Loan Mortgage Corporation, and Federal National Mortgage
Association.
Some
obligations issued or guaranteed by U.S. government agencies and
instrumentalities are supported by the full faith and credit of the U.S.
Treasury. Others, such as those issued by the Federal National Mortgage
Association, are supported by discretionary authority of the U.S. government to
purchase certain obligations of the agency or instrumentality. Still others,
such as those issued by the Student Loan Marketing Association, are supported
only by the credit of the agency or instrumentality.
•Bank
Obligations - Certificates of deposit, time deposits and bankers’ acceptances of
U.S. commercial banks having total assets of at least one billion dollars and
overseas branches of U.S. commercial banks and foreign banks, which in the
opinion of those managing the fund’s investments, are of comparable quality. A
Fund may acquire obligations of U.S. banks that are not members of the Federal
Reserve System or of the Federal Deposit Insurance Corporation.
Certificates
of deposit are negotiable certificates issued against funds deposited in a
commercial bank for a definite period of time and earning a specified return.
Bankers’ acceptances are negotiable drafts or bills of exchange, normally drawn
by an importer or exporter to pay for specific merchandise, which are “accepted”
by a bank, meaning, in effect, that the bank unconditionally agrees to pay the
face value of the instrument on maturity. Fixed time deposits are bank
obligations payable at a stated maturity date and bearing interest at a fixed
rate. Fixed time deposits may be withdrawn on demand by the investor, but may be
subject to early withdrawal penalties which vary depending upon market
conditions and the remaining maturity of the obligation. There are no
contractual restrictions on the right to transfer a beneficial interest in a
fixed time deposit to a third party, although there is no market for such
deposits.
Obligations
of foreign banks and obligations of overseas branches of U.S. banks are subject
to somewhat different regulations and risks than those of U.S. domestic banks.
For example, an issuing bank may be able to maintain that the liability for an
investment is solely that of the overseas branch which could expose a Fund to a
greater risk of loss. In addition, obligations of foreign banks or of overseas
branches of U.S. banks may be affected by governmental action in the country of
domicile of the branch or parent bank. Examples of adverse foreign governmental
actions include the imposition of currency controls, the imposition of
withholding taxes on interest income payable on such obligations, interest
limitations, seizure or nationalization of assets, or the declaration of a
moratorium. Deposits in foreign banks or foreign branches of U.S. banks are not
covered by the Federal Deposit Insurance Corporation and that the selection of
those obligations may be more difficult because there may be less publicly
available information concerning foreign banks or the accounting, auditing and
financial reporting standards, practices and requirements applicable to foreign
banks may differ from those applicable to United States banks. Foreign banks are
not generally subject to examination by any United States Government agency or
instrumentality. A Fund only buys short-term instruments where the risks of
adverse governmental action are believed by those managing the fund’s
investments to be minimal. A Fund considers these factors, along with other
appropriate factors, in making an investment decision to acquire such
obligations. It only acquires those which, in the opinion of management, are of
an investment quality comparable to other debt securities bought by the
Fund.
A
certificate of deposit is issued against funds deposited in a bank or savings
and loan association for a definite period of time, at a specified rate of
return. Normally they are negotiable. However, a Fund occasionally may invest in
certificates of deposit which are not negotiable. Such certificates may provide
for interest penalties in the event of withdrawal prior to their maturity. A
bankers’ acceptance is a short-term credit instrument issued by corporations to
finance the import, export, transfer, or storage of goods. They are termed
“accepted” when a bank guarantees their payment at maturity and reflect the
obligation of both the bank and drawer to pay the face amount of the instrument
at maturity.
•Commercial
Paper - Short-term promissory notes issued by U.S. or foreign
corporations.
•Short-term
Corporate Debt - Corporate notes, bonds, and debentures that at the time of
purchase have 397 days or less remaining to maturity, with certain exceptions
permitted by applicable regulations.
•Repurchase
Agreements - Instruments under which securities are purchased from a bank or
securities dealer with an agreement by the seller to repurchase the securities
at the same price plus interest at a specified rate.
•Taxable
Municipal Obligations - Short-term obligations issued or guaranteed by state and
municipal issuers which generate taxable income.
U.S.
Government and U.S. Government-Sponsored Securities
U.S.
government securities refers to a variety of debt securities issued by or
guaranteed by the U.S. Treasury, such as Treasury bills, notes, and bonds and
mortgage-backed securities guaranteed by the Government National Mortgage
Association (Ginnie Mae), and are supported by the full faith and credit of the
United States meaning that the U.S. government is required to repay the
principal in the event of default. Others are supported by the right of the
issuer to borrow from the U.S. Treasury; others are supported by the
discretionary authority of the U.S. government to purchase the agency’s
obligations; and still others are supported only by the credit of the issuing
agency, instrumentality, or enterprise. The U.S. government does not guarantee
the market price of any U.S. government security.
Although
U.S. government-sponsored enterprises such as the Federal Home Loan Mortgage
Corporation (Freddie Mac) and the Federal National Mortgage Association
(Fannie Mae) may be chartered or sponsored by Congress, they are not funded by
Congressional appropriations, and their securities are not issued by the U.S.
Treasury nor supported by the full faith and credit of the U.S.
government.
U.S.
government securities and U.S. government-sponsored securities may be adversely
impacted by changes in interest rates or a default by or decline in the credit
rating of the applicable government-sponsored entity. There is no assurance that
the U.S. government would provide financial support to its agencies and
instrumentalities if not required to do so. In addition, certain
governmental entities have been subject to regulatory scrutiny regarding their
accounting policies and practices and other concerns that may result in
legislation, changes in regulatory oversight, and/or other consequences that
could adversely affect the credit quality, availability, or investment character
of securities issued by these entities. The value and liquidity of U.S.
government securities may be affected adversely by changes in the ratings of
those securities.
Warrants
and Rights
The
Funds may invest in warrants and rights. A warrant is an instrument that gives
the holder a right to purchase a given number of shares of a particular security
at a specified price until a stated expiration date. Buying a warrant generally
can provide a greater potential for profit or loss than an investment of
equivalent amounts in the underlying common stock. The market value of a warrant
does not necessarily move with the value of the underlying securities. If a
holder does not sell the warrant, it risks the loss of its entire investment if
the market price of the underlying security does not, before the expiration
date, exceed the exercise price of the warrant. Investment in warrants is a
speculative activity. Warrants pay no dividends and confer no rights (other than
the right to purchase the underlying securities) with respect to the assets of
the issuer. A right is a privilege granted to existing shareholders of a
corporation to subscribe for shares of a new issue of common stock before it is
issued. Rights normally have a short life, usually two to four weeks, are freely
transferable and entitle the holder to buy the new common stock at a lower price
than the public offering price.
When-Issued,
Delayed Delivery, and Forward Commitment Transactions
Each
of the Funds may purchase or sell securities on a when-issued, delayed delivery,
or forward commitment basis. Typically, no income accrues on securities a Fund
has committed to purchase prior to the time delivery of the securities is
made.
When
purchasing a security on a when-issued, delayed delivery, or forward commitment
basis, the Fund assumes the rights and risks of ownership of the security,
including the risk of price and yield fluctuations, and takes such fluctuations
into account when determining its net asset value. Because the Fund is not
required to pay for the security until the delivery date, these risks are in
addition to the risks associated with the Fund’s other investments. If the Fund
remains substantially fully invested at a time when when-issued, delayed
delivery, or forward commitment purchases are outstanding, the purchases may
result in a form of leverage.
When
the Fund has sold a security on a when-issued, delayed delivery, or forward
commitment basis, the Fund does not participate in future gains or losses with
respect to the security. If the other party to a transaction fails to deliver or
pay for the securities, the Fund could miss a favorable price or yield
opportunity or could suffer a loss. A Fund may dispose of or renegotiate a
transaction after it is entered into, and may sell when-issued, delayed
delivery, or forward commitment securities before they are delivered, which may
result in a capital gain or loss. There is no percentage limitation on the
extent to which the Funds may purchase or sell securities on a when-issued,
delayed delivery, or forward commitment basis.
LEADERSHIP
STRUCTURE AND BOARD
PFI's
Board has overall responsibility for overseeing PFI's operations in accordance
with the 1940 Act, other applicable laws, and PFI's charter. Each Board Member
serves on the Boards of the following investment companies: Principal Funds,
Inc. (“PFI”), Principal Variable Contracts Funds, Inc. (“PVC”), Principal
Exchange-Traded Funds (“PETF”), and Principal Real Asset Fund (“PRA”), which are
collectively referred to in this SAI as the “Fund Complex.” Board Members who
are affiliated persons of any investment advisor, the principal distributor, or
the principal underwriter of the Fund Complex are considered “interested
persons” of the Funds (as defined in the 1940 Act) and are referred to in this
SAI as “Interested Board Members.” Board Members who are not Interested Board
Members are referred to as “Independent Board Members.”
Each
Board Member generally serves until the next annual meeting of shareholders or
until such Board Member’s earlier death, resignation, or removal. Independent
Board Members have a 72-year age limit and, for Independent Board Members
elected on or after September 14, 2021, a 72-year age limit or a 15-year term
limit, whichever occurs first. The Board may waive the age or term limits in the
Board’s discretion. The Board elects officers to supervise the day-to-day
operations of the Fund Complex. Officers serve at the pleasure of the Board, and
each officer has the same position with each investment company in the Fund
Complex.
The
Board meets in regularly scheduled meetings eight times throughout the year.
Board meetings may occur in-person, by telephone, or virtually. In addition, the
Board holds special meetings or informal conference calls to discuss specific
matters that may arise or require action between regular meetings. Independent
Board Members also meet annually to consider renewal of advisory
contracts.
The
Chairman of the Board is an interested person of the Fund Complex. The
Independent Board Members have appointed a Lead Independent Board Member whose
role is to review and approve, with the Chairman, each Board meeting’s agenda
and to facilitate communication between and among the Independent Board Members,
management, and the full Board. The Board’s leadership structure is appropriate
for the Fund Complex given its characteristics and circumstances, including the
number of portfolios, variety of asset classes, net assets, and distribution
arrangements. The appropriateness of this structure is enhanced by the
establishment and allocation of responsibilities among the following Committees,
which report their activities to the Board on a regular basis.
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Committee
and Independent Board Members |
Primary
Purpose and Responsibilities |
Meetings
Held During the Last Fiscal Year |
15(c)
Committee Karen
McMillan, Chair
Katharin
S. Dyer Fritz S. Hirsch Padelford L. Lattimer |
The
Committee’s primary purpose is to assist the Board in performing the
annual review of the Funds’ advisory and sub-advisory agreements pursuant
to Section 15(c) of the 1940 Act. The Committee is responsible for
requesting and reviewing related materials. |
6 |
Audit
Committee Victor
L. Hymes, Chair
Craig
Damos Frances P. Grieb Elizabeth A. Nickels
|
The
Committee’s primary purpose is to assist the Board by serving as an
independent and objective party to monitor the Fund Complex’s accounting
policies, financial reporting, and internal control system, as well as the
work of the independent registered public accountants. The Audit Committee
assists Board oversight of 1) the integrity of the Fund Complex’s
financial statements; 2) the Fund Complex’s compliance with certain legal
and regulatory requirements; 3) the independent registered public
accountants’ qualifications and independence; and 4) the performance of
the Fund Complex’s independent registered public accountants. The Audit
Committee also facilitates communication among the independent registered
public accountants, PGI’s internal auditors, Fund Complex management, and
the Board. |
9 |
Executive
Committee Kamal
Bhatia, Chair Craig Damos Patrick G. Halter
|
The
Committee’s primary purpose is to exercise certain powers of the Board
when the Board is not in session. When the Board is not in session, the
Committee may exercise all powers of the Board in the management of the
Fund Complex’s business except the power to 1) issue stock, except as
permitted by law; 2) recommend to the shareholders any action that
requires shareholder approval; 3) amend the bylaws; or 4) approve any
merger or share exchange that does not require shareholder
approval. |
None |
Nominating
and
Governance
Committee Elizabeth
A. Nickels, Chair Craig Damos Fritz S. Hirsch Victor L.
Hymes
Karen
McMillan
|
The
Committee’s primary purpose is to oversee the structure and efficiency of
the Board and the committees. The Committee is responsible for evaluating
Board membership and functions, committee membership and functions,
insurance coverage, and legal matters. The Committee’s nominating
functions include selecting and nominating Independent Board Member
candidates for election to the Board. Generally, the Committee requests
nominee suggestions from Board Members and management. In addition, the
Committee considers candidates recommended by shareholders of the Fund
Complex. Recommendations should be submitted in writing to the Principal
Funds Complex Secretary, in care of the Principal Funds Complex, 711 High
Street, Des Moines, IA 50392. Such recommendations must include all
information specified in the Committee’s charter and must conform with the
procedures set forth in Appendix A thereto, which can be found at
https://secure02.principal.com/publicvsupply/GetFile?fm=MM13013&ty=VOP&EXT=.VOP.
Examples of such information include the nominee’s biographical
information; relevant educational and professional background of the
nominee; the number of shares of each Fund owned of record and
beneficially by the nominee and by the recommending shareholder; any other
information regarding the nominee that would be required to be disclosed
in a proxy statement or other filing required to be made in connection
with the solicitation of proxies for the election of board members;
whether the nominee is an “interested person” of the Funds as defined in
the 1940 Act; and the written consent of the nominee to be named as a
nominee and serve as a board member if elected. When evaluating a
potential nominee for Independent Board Member, the Committee may
consider, among other factors: educational background; relevant business
and industry experience; whether the person is an “interested person” of
the Funds as defined in the 1940 Act; and whether the person is willing to
serve, and willing and able to commit the time necessary to attend
meetings and perform the duties of an Independent Board Member. In
addition, the Committee may consider whether a candidate’s background,
experience, skills and views would complement the background, experience,
skills and views of other Board Members and would contribute to the
diversity of the Board. The final decision is based on a combination of
factors, including the strengths and the experience an individual may
bring to the Board. The Board does not regularly use the services of
professional search firms to identify or evaluate potential candidates or
nominees. |
5 |
Operations
Committee Padelford
L. Lattimer, Chair Katharin S. Dyer Karen McMillan |
The
Committee’s primary purpose is to review and oversee the provision of
administrative and distribution services to the Fund Complex,
communications with the Fund Complex’s shareholders, and the Fund
Complex’s operations. |
4 |
Risk
oversight forms part of the Board’s general oversight of the Fund Complex. The
Board has appointed a Chief Compliance Officer who oversees the implementation
and testing of the Funds' compliance program and reports to the Board regarding
compliance matters for the Funds and principal service providers. As part of its
regular oversight functions, the Board, directly or through a committee,
interacts with and reviews reports from, among others: Fund Complex management,
sub-advisors, the Chief Compliance Officer, the independent registered public
accounting firm, and internal auditors for PGI or its affiliates, as
appropriate. The Board, with the assistance of management and PGI, reviews
investment policies and risks in connection with its review of Fund Complex
performance. In addition, as part of the Board’s periodic review of advisory,
sub-advisory, and other service provider agreements, the Board may consider risk
management aspects of their operations and the functions for which they are
responsible. With respect to valuation, the Board has designated PGI as the
Funds’ valuation designee, as permitted by SEC Rule 2a-5, where PGI is
responsible for the day-to-day valuation and oversight responsibilities of the
Funds, subject to the Board’s oversight. PGI has established a Valuation
Committee to fulfill its oversight responsibilities as the Funds’ valuation
designee.
Each
Board Member has significant prior senior management and/or board experience.
Board Members are selected and retained based upon their skills, experience,
judgment, analytical ability, diligence, and ability to work effectively with
other Board Members, a commitment to the interests of shareholders, and, for
each Independent Board Member, a demonstrated willingness to take an independent
and questioning view of management. In addition to these general qualifications,
the Board seeks members who build upon the Board’s diversity. Below is a brief
discussion of the specific education, experience, qualifications, or skills that
led to the conclusion that each person identified below should serve as a Board
Member. As required by rules adopted under the 1940 Act, the Independent Board
Members select and nominate all candidates for Independent Board Member
positions.
Independent
Board Members
Craig
Damos. Mr.
Damos has served as an Independent Board Member of the Fund Complex since 2008.
Since 2011, Mr. Damos has served as the President of C.P. Damos Consulting, LLC
(doing business as Craig Damos Consulting). He has also served as a director of
the employees’ stock ownership plan of the Baker Group since 2020. Mr. Damos
served as President and Chief Executive Officer of Weitz Company from 2006 to
2010; Vertical Growth Officer of Weitz Company from 2004 to 2006; and Chief
Financial Officer of Weitz Company from 2000 to 2004. From 2005 to 2008, Mr.
Damos served as a director of West Bank. Through his education, employment
experience, and experience as a board member, Mr. Damos is experienced with
financial, accounting, regulatory, and investment matters.
Katharin
S. Dyer. Ms.
Dyer has served as an Independent Board Member of the Fund Complex since 2023.
She is the founder and Chief Executive Officer of PivotWise, a firm providing
strategic advice focused on digital transformation. Ms. Dyer currently serves as
a director of Liquidity Services and the Grameen Foundation. She was formerly
employed by IBM Global Services as a Global Partner and a member of the senior
leadership team from 2016 to 2018. Ms. Dyer was a member of the Global
Management Team at American Express Company from 2013 to 2015. Through her
education, employment experience, and experience as a board member, Ms. Dyer is
experienced with financial, information and digital technology, investment, and
regulatory matters.
Frances
P. Grieb. Ms.
Grieb has served as an Independent Board Member of the Fund Complex since 2023.
Ms. Grieb currently serves as a director of First Interstate BancSystem, Inc.
and the National Advisory Board of the College of Business at the University of
Nebraska at Omaha. She is a member of the American Institute of Certified Public
Accountants and the National Association of Corporate Directors. From 2014 to
2022, she served as a director of Great Western Bancorp, Inc. Ms. Grieb is a
retired partner having served in various leadership roles at Deloitte LLP from
1982 to 2010. Ms. Grieb is a retired Certified Public Accountant. Through her
education, employment experience, and experience as a board member, Ms. Grieb is
experienced with financial, accounting, investment, and regulatory
matters.
Fritz
S. Hirsch. Mr.
Hirsch has served as an Independent Board Member of the Fund Complex since 2005.
From 2011 to 2015, Mr. Hirsch served as CEO of MAM USA. He served as President
and Chief Executive Officer of Sassy, Inc. from 1986 to 2009, and Chief
Financial Officer of Sassy, Inc. from 1983 to 1985. Through his education,
employment experience, and experience as a board member, Mr. Hirsch is
experienced with financial, accounting, regulatory, and investment
matters.
Victor
L. Hymes. Mr.
Hymes has served as an Independent Board Member of the Fund Complex since 2020.
He currently serves as Founder, Chief Executive Officer, and Chief Investment
Officer of Legato Capital Management, LLC. Over the past thirty years, Mr. Hymes
has served in the roles of CEO, COO, CIO, portfolio manager, and other senior
management positions with investment management firms, including Zurich Scudder
Investments, Inc., Goldman, Sachs & Co., and Kidder, Peabody & Co. Mr.
Hymes has served on numerous boards and has chaired four investment committees
over the past two decades. Through his education, employment experience, and
experience as a board member, Mr. Hymes is experienced with financial,
accounting, regulatory, and investment matters.
Padelford
L. Lattimer. Mr.
Lattimer has served as an Independent Board Member of the Fund Complex since
2020. He currently serves as Managing Partner for TBA Management Consulting LLC.
For more than twenty years, Mr. Lattimer served in various capacities at
financial services companies, including as a senior managing director for TIAA
Cref Asset Management (2004-2010), First Vice President at Mellon Financial
Corporation (2002-2004), and in product management roles at Citibank
(2000-2002). Through his education, employment experience, and experience as a
board member, Mr. Lattimer is experienced with financial, regulatory, and
investment matters.
Karen
McMillan. Ms.
McMillan has served as an Independent Board Member of the Fund Complex since
2014. Ms. McMillan is the founder and owner of Tyche Consulting LLC. She served
as a Managing Director of Patomak Global Partners, LLC from 2014 to 2021. From
2007 to 2014, Ms. McMillan served as general counsel to the Investment Company
Institute. Prior to that (from 1999-2007), she worked as an attorney in private
practice, specializing in the mutual fund industry. From 1991 to 1999, she
served in various roles as counsel at the SEC, Division of Investment
Management, including as Assistant Chief Counsel. Through her professional
education, experience as an attorney, and experience as a board member, Ms.
McMillan is experienced in financial, investment, and regulatory
matters.
Elizabeth
A. Nickels. Ms.
Nickels has served as an Independent Board Member of the Fund Complex since
2015. From 2000 to 2022, Ms. Nickels served as a director of SpartanNash. From
2008 to 2017, she served as a director of the not-for-profit Spectrum Health
System; from 2014 to 2016, she served as a director of Charlotte Russe; from
2014 to 2015, she served as a director of Follet Corporation; and from 2013 to
2015, she served as a director of PetSmart. Ms. Nickels was formerly employed by
Herman Miller, Inc. in several capacities: from 2012 to 2014, as the Executive
Director of the Herman Miller Foundation; from 2007 to 2012, as President of
Herman Miller Healthcare; and from 2000 to 2007, as Chief Financial Officer.
Through her education, employment experience, and experience as a board member,
Ms. Nickels is experienced with financial, accounting, and regulatory
matters.
Interested
Board Members
Kamal
Bhatia. Mr.
Bhatia has served as Chair of the Fund Complex since 2023. He has also served as
President and Chief Executive Officer of the Fund Complex since 2019. Since
February 2024, Mr. Bhatia has served as the President Chief Executive Officer
for Principal Asset Management. He served as Senior Executive Managing Director
- Global Head of Investments for Principal Asset ManagementSM
in
2023 and a Senior Executive Director and Chief Operating Officer of Principal
Asset ManagementSM
from
2019 to 2023. Mr. Bhatia joined Principal®
in 2019 and serves as a director of numerous Principal®
affiliates.
From 2011 to 2019, he was a Senior Vice President for Oppenheimer Funds. Mr.
Bhatia is a CFA®
charter holder. Through his education and experience, Mr. Bhatia is experienced
with financial, marketing, regulatory, and investment matters.
Patrick
G. Halter. Mr.
Halter has served as a Board Member of the Fund Complex since 2017. Mr. Halter
is the interim Division President of Principal Asset ManagementSM.
He previously served as President and Chief Executive Officer for Principal
Asset ManagementSM.
He also serves as a director of numerous Principal®
affiliates. Mr. Halter joined Principal®
in 1984 and has held various other positions since joining Principal®.
Through his education and employment experience, Mr. Halter is experienced with
financial, accounting, regulatory, and investment matters.
Kenneth
A. McCullum. Mr.
McCullum has served as a Board Member of the Fund Complex since 2023. Mr.
McCullum has served as Executive Vice President and Chief Risk Officer for
Principal®
since 2023. Prior to that, he served as Senior Vice President and Chief Risk
Officer for Principal®
from 2020 to 2023 and Vice President and Chief Actuary for Principal®
from 2015 to 2020. From 2013 to 2015, Mr. McCullum was an Executive Vice
President responsible for business development at Delaware Life Insurance
Company. He served as a Senior Vice President for the life annuity business at
Sun Life from 2010 to 2013. Mr. McCullum is a Fellow of the Society of Actuaries
and is a Member of the American Academy of Actuaries. Through his education and
experience, Mr. McCullum is experienced with financial, accounting, regulatory,
and investment matters.
Additional
Information Regarding Board Members and Officers
The
following tables present additional information regarding the Board Members and
Fund Complex officers, including their principal occupations, which, unless
specific dates are shown, are of more than five years duration. For each Board
Member, the tables also include information concerning other directorships held
in reporting companies under the Securities Exchange Act of 1934 or registered
investment companies under the 1940 Act.
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INDEPENDENT
BOARD MEMBERS |
Name,
Address, and Year of Birth |
Board
Positions Held with Fund Complex |
Principal
Occupation(s) During Past 5 Years |
Number
of Portfolios Overseen in Fund Complex |
Other Directorships Held
During Past 5 Years |
Craig
Damos 711 High Street Des Moines, IA 50392 1954 |
Lead
Independent Board Member (since 2020) Director, PFI and
PVC (since 2008) Trustee, PETF (since 2014) Trustee, PRA (since
2019) |
President,
C.P. Damos Consulting, LLC (consulting services)
|
126 |
None |
Katharin
S. Dyer 711 High Street Des Moines, IA 50392 1957 |
Director,
PFI and PVC (since 2023) Trustee, PETF and PRA (since 2023) |
Founder
and Chief Executive Officer, PivotWise (consulting services);
|
126 |
Liquidity
Services, Inc. (2020-present) |
Frances
P. Grieb 711 High Street Des Moines, IA 50392 1960 |
Director,
PFI and PVC (since 2023) Trustee, PETF and PRA (since 2023) |
Retired |
126 |
First
Interstate BancSystem, Inc. (2022-present); Great
Western Bancorp, Inc. and Great Western Bank
(2014-2022) |
Fritz
S. Hirsch 711 High Street Des Moines, IA 50392 1951 |
Director,
PFI and PVC (since 2005) Trustee, PETF (since 2014) Trustee, PRA
(since 2019) |
Interim
CEO, MAM USA (manufacturer of infant and juvenile products) from February
2020-October 2020 |
126 |
MAM
USA (2011-present)
|
Victor
L. Hymes 711 High Street Des Moines, IA 50392 1957 |
Director,
PFI and PVC (since 2020) Trustee, PETF and PRA (since 2020) |
Founder,
CEO, CIO, Legato Capital Management, LLC (investment management
company) |
126 |
None |
Padelford
L. Lattimer 711 High Street Des Moines, IA 50392 1961 |
Director,
PFI and PVC (since 2020) Trustee, PETF and PRA (since 2020) |
Managing
Partner, TBA Management Consulting LLC (management consulting and staffing
company) |
126 |
None |
Karen
McMillan 711 High Street Des Moines, IA 50392 1961 |
Director,
PFI and PVC (since 2014) Trustee, PETF (since 2014) Trustee, PRA
(since 2019) |
Founder/Owner,
Tyche Consulting LLC (consulting services); Managing
Director, Patomak Global Partners, LLC (financial
services consulting) from 2014-2021 |
126 |
None |
Elizabeth
A. Nickels 711 High Street Des Moines, IA 50392 1962 |
Director,
PFI and PVC (since 2015) Trustee, PETF (since 2015) Trustee, PRA
(since 2019) |
Retired |
126 |
SpartanNash
(2000-2022) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
INTERESTED
BOARD MEMBERS |
Name,
Address, and Year of Birth |
Board
Positions Held with Fund Complex |
Principal
Occupation(s) During Past 5 Years |
Number
of Portfolios Overseen in Fund Complex |
Other Directorships Held
During Past 5 Years |
Kamal
Bhatia 711 High Street Des Moines, IA 50392 1972 |
Director
and Chair, PFI and PVC (since 2023) Trustee and Chair,
PETF and PRA (since 2023) Chief Executive Officer and
President (since 2019) |
Principal
Financial Group*
President
and Chief Executive Officer – Principal Asset ManagementSM
(since
2024)
Senior
Executive Managing Director - Global Head of Investments – Principal Asset
ManagementSM
(2023)
Senior
Executive Director and Chief
Operating
Officer – Principal Asset
ManagementSM
(2019-2023)
President
– Principal Funds (2019-2020)
OppenheimerFunds,
Inc.
Senior
Vice President (2011-2019) |
126 |
None |
Patrick
G. Halter 711 High Street Des Moines, IA 50392 1959 |
Director,
PFI and PVC (since 2017) Trustee, PETF (since 2017) Trustee, PRA
(since 2019) |
Principal
Financial Group*
Interim
Division President – Principal Asset ManagementSM
(since
2024)
President
and Chief Executive Officer – Principal Asset ManagementSM
(2022-2024)
President
– Principal Global Asset Management (2020-2022)
Chief
Executive Officer and President – Principal Global Investors, LLC
(2018-2020) |
126 |
None |
Kenneth
A. McCullum 711 High Street Des Moines, IA 50392 1964 |
Director,
PFI and PVC (since 2023) Trustee, PETF and PRA (since 2023) |
Principal
Financial Group*
Executive
Vice President and Chief Risk
Officer
(since 2023)
Senior
Vice President and Chief Risk Officer (2020-2023)
Vice
President and Chief Actuary (2015-2020) |
126 |
None |
|
|
|
|
|
|
|
| |
FUND
COMPLEX OFFICERS |
Name,
Address, and Year of Birth |
Position(s)
Held with Fund Complex |
Principal
Occupation(s)
During
Past 5 Years |
George
Djurasovic
711
High Street Des Moines, IA 50392
1971 |
Vice
President and General Counsel (since 2023) |
Principal
Financial Group*
Vice
President and General Counsel – Principal Asset ManagementSM
(since 2022)
Artisan
Partners Limited Partnership
Global
Chief Compliance Officer (2013-2022) |
Calvin
Eib
711
High Street Des Moines, IA 50392
1963 |
Assistant
Tax Counsel (since 2023) |
Principal
Financial Group*
Counsel
(since 2021)
Transamerica
Tax
Counsel (2016-2021) |
Beth
Graff 711 High Street Des Moines, IA 50392 1968 |
Vice
President and Assistant Controller
(since
2021) |
Principal
Financial Group*
Senior
Director – Fund Accounting (since 2024)
Director
– Fund Accounting (2016-2024)
|
Gina
L. Graham 711 High Street Des Moines, IA
50392 1965 |
Treasurer
(since 2016) |
Principal
Financial Group*
Vice
President and Treasurer (since 2016)
|
|
|
|
|
|
|
|
| |
FUND
COMPLEX OFFICERS |
Name,
Address, and Year of Birth |
Position(s)
Held with Fund Complex |
Principal
Occupation(s)
During
Past 5 Years |
Megan
Hoffmann 711 High Street Des Moines, IA
50392 1979 |
Vice
President and Controller (since 2021) |
Principal
Financial Group*
Senior
Director – Fund Administration (since 2024)
Director
– Accounting (2020-2024)
Assistant
Director – Accounting (2017-2020) |
Laura
B. Latham 711 High Street Des Moines, IA
50392 1986 |
Counsel
and Assistant Secretary (since 2023)
Assistant
Counsel and Assistant Secretary
(2018-2023) |
Principal
Financial Group*
Counsel
(since 2018)
|
Diane
K. Nelson 711 High Street Des Moines, IA
50392 1965 |
AML
Officer (since 2016) |
Principal
Financial Group*
Director
– Compliance (since 2024)
Chief
Compliance Officer/AML Officer (2015-2024)
|
Tara
Parks 711 High Street Des Moines, IA 50392 1983 |
Vice
President and Assistant Controller
(since
2021) |
Principal
Financial Group*
Senior
Director – Fund Tax (since 2024)
Director
– Accounting (2019-2024)
ALPS
Fund Services
Tax
Manager (2011-2019) |
Deanna
Y. Pellack 711 High Street Des Moines, IA
50392 1987 |
Counsel
and Assistant Secretary (since 2023)
Assistant
Counsel and Assistant Secretary
(2022-2023) |
Principal
Financial Group*
Counsel
(since 2022)
The
Northern Trust Company
Vice
President (2019-2022) |
Sara
L. Reece 711 High Street Des Moines, IA
50392 1975 |
Vice
President and Chief Operating Officer
(since
2021)
Vice
President and Controller (2016-2021) |
Principal
Financial Group*
Managing
Director – Global Fund Ops (since 2021)
Director
– Accounting (2015-2021)
|
Teri
R. Root 711 High Street Des Moines, IA 50392 1979 |
Chief
Compliance Officer (since 2018)
|
Principal
Financial Group*
Chief
Compliance Officer – Funds (since 2018)
Vice
President (since 2015)
|
Michael
Scholten 711 High Street Des Moines, IA
50392 1979 |
Chief
Financial Officer (since 2021) |
Principal
Financial Group*
Assistant
Vice President and Actuary (since 2021)
Chief
Financial Officer – Funds/Platforms (2015-2021)
|
Adam
U. Shaikh
711
High Street
Des
Moines, IA 50392
1972 |
Vice
President and Assistant General Counsel
(since
2023)
Assistant
Secretary (since 2022)
Assistant
Counsel (2006-2023) |
Principal
Financial Group*
Assistant
General Counsel (since 2018) |
John
L. Sullivan 711 High Street
Des
Moines, IA 50392 1970 |
Counsel
and Assistant Secretary (since 2023)
Assistant
Counsel and Assistant Secretary
(2019-2023) |
Principal
Financial Group*
Assistant
General Counsel (since 2023)
Counsel
(2019-2023) |
Dan
L. Westholm 711 High Street Des Moines, IA
50392 1966 |
Assistant
Treasurer (since 2006) |
Principal
Financial Group*
Assistant
Vice President – Treasury (since 2013)
|
|
|
|
|
|
|
|
| |
FUND
COMPLEX OFFICERS |
Name,
Address, and Year of Birth |
Position(s)
Held with Fund Complex |
Principal
Occupation(s)
During
Past 5 Years |
Beth
C. Wilson 711 High Street Des Moines, IA
50392 1956 |
Vice
President and Secretary (since 2007) |
Principal
Financial Group*
Director
and Secretary – Funds (since 2007)
|
Jared
A. Yepsen 711 High Street Des Moines, IA
50392 1981 |
Assistant
Tax Counsel (since 2017) |
Principal
Financial Group*
Assistant
General Counsel (since 2023)
Counsel
(2015-2023)
|
*The
reference to Principal Financial Group includes positions held by the Interested
Board Member / Fund Complex Officer, including as an officer, employee, and/or
director, with affiliates or subsidiaries of Principal Financial Group. The
titles set forth in this SAI are each Interested Board Member's / Fund Complex
Officer’s title with Principal Workforce, LLC.
Board
Member Ownership of Securities
The
following tables set forth the dollar range of the equity securities of Funds
included in this SAI, and aggregate dollar range of the equity securities of the
funds in the Fund Complex, that were beneficially owned by the Board Members as
of December 31, 2023. As of that date, Board Members did not own shares of the
Funds included in this SAI that are not listed.
For
the purpose of these tables, beneficial ownership means a direct or indirect
pecuniary interest. Only Interested Board Members are eligible to participate in
an employee benefit program that invests in the Fund Complex. Board Members who
beneficially owned shares of the series of PVC did so through variable life
insurance and variable annuity contracts. Please note that exact dollar amounts
of securities held are not listed. Rather, ownership is listed based on the
following dollar ranges:
|
|
|
|
| |
A |
$0 |
B |
$1
up to and including $10,000 |
C |
$10,001
up to and including $50,000 |
D |
$50,001
up to and including $100,000 |
E |
$100,001
or more |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Independent
Board Members |
Fund/Portfolio |
Damos |
Dyer(1) |
Grieb(1) |
Hirsch |
Hymes |
Lattimer |
McMillan |
Nickels |
Core
Fixed Income |
A |
A |
A |
A |
E |
A |
A |
A |
Core
Plus Bond |
E |
A |
A |
C |
A |
B |
A |
A |
Diversified
Income |
A |
A |
A |
D |
A |
A |
C |
A |
Diversified
International |
A |
A |
A |
D |
A |
A |
A |
A |
Equity
Income |
E |
A |
A |
A |
A |
A |
A |
A |
Global
Emerging Markets |
A |
A |
A |
C |
A |
A |
A |
A |
Global
Real Estate Securities |
A |
A |
A |
C |
E |
A |
A |
A |
High
Yield |
A |
A |
A |
C |
C |
B |
A |
A |
LargeCap
S&P 500 Index |
A |
A |
A |
E |
E |
A |
A |
A |
MidCap |
E |
A |
A |
A |
A |
A |
A |
E |
Principal
LifeTime 2030 |
A |
A |
A |
E |
A |
A |
A |
A |
SAM
Conservative Growth |
E |
A |
A |
A |
A |
A |
A |
A |
SmallCap |
D |
A |
A |
A |
A |
A |
A |
A |
Total
Fund Complex |
E |
E |
A |
E |
E |
C |
E |
E |
(1)
Appointment effective January 26, 2023.
|
|
|
|
|
|
|
|
|
|
| |
Interested
Board Members |
Fund |
Bhatia(1) |
Halter |
McCullum(1) |
Diversified
International |
E(2) |
A |
D(2) |
Equity
Income |
E(2) |
E |
E(2) |
Finisterre
Emerging Markets Total Return Bond |
A |
E |
A |
Government
& High Quality Bond |
A |
C |
A |
High
Yield |
A |
E |
A |
Inflation
Protection |
A |
A |
D(2) |
LargeCap
Growth I |
A |
E |
D(2) |
LargeCap
S&P 500 Index |
E(2) |
E(2) |
E(2) |
LargeCap
Value III |
E(2) |
A |
A |
MidCap |
A |
E |
D(2) |
MidCap
Growth |
E(2) |
A |
A |
Money
Market |
A |
B |
A |
Principal
LifeTime Hybrid 2030 |
A |
A |
E(2) |
Real
Estate Securities |
A |
E |
A |
SmallCap |
E(2) |
E |
A |
Total
Fund Complex |
E |
E |
E |
(1)Appointment
Effective April 26, 2023
(2)Ownership
through participation in an Employee Benefit Plan
Board
Member and Officer Compensation
The
Fund Complex does not pay any remuneration to its officers or to any Board
Members listed above as Interested Board Members. The Board annually considers a
proposal to reimburse PGI for certain expenses, including a portion of the Chief
Compliance Officer’s compensation. If the proposal is adopted, these amounts are
allocated across all Funds based on relative net assets of each
portfolio.
Each
Independent Board Member received compensation for service as a member of the
Boards of all investment companies in the Fund Complex based on a schedule that
takes into account an annual retainer amount, the number of meetings attended,
and expenses incurred. Board Member compensation and related expenses are
allocated to each of the Funds based on the net assets of each relative to
combined net assets of the Fund Complex.
The
following table provides information regarding the compensation received by the
Independent Board Members from the Funds included in this SAI and from the Fund
Complex during the fiscal year ended October 31, 2023. On that date, there were
4 investment companies in the Fund Complex. The Fund Complex does not provide
retirement benefits or pensions to any of the Board Members.
|
|
|
|
|
|
|
| |
Board
Member |
Funds
in this SAI |
Fund
Complex |
Craig
Damos |
$302,110 |
$398,000 |
Katharin
S. Dyer(1) |
$235,394 |
$311,000 |
Frances
P. Grieb(1) |
$236,908 |
$313,000 |
Fritz
S. Hirsch |
$256,560 |
$338,000 |
Victor
L. Hymes |
$269,845 |
$355,500 |
Padelford
L. Lattimer |
$267,948 |
$353,000 |
Karen
McMillan |
$267,948 |
$353,000 |
Elizabeth
A. Nickels |
$269,845 |
$355,500 |
|
| |
(1)
Appointment effective January 26,
2023. |
INVESTMENT
ADVISORY AND OTHER SERVICES
Investment
Advisors
Principal
Global Investors, LLC (doing business as Principal Asset ManagementSM)
(“PGI”), an indirect subsidiary of Principal Financial Group, Inc.
(“Principal®”),
serves as the investment advisor for the Funds. Principal Management
Corporation, previously an affiliate of PGI, served as the investment advisor to
the Funds prior to its merger with and into PGI on May 1, 2017.
PGI
directly makes decisions to purchase or sell securities for each Fund, except
for those Funds or portions of Funds for which PGI has retained a sub-advisor to
provide such services, as described below.
Affiliated
Persons of the Registrant Who are Affiliated Persons of the Advisor
For
information about affiliated persons of the Registrant who are also affiliated
persons of PGI or affiliated advisors, see the Interested Board Members and Fund
Complex Officers tables in the “Leadership Structure and Board”
section.
Sub-Advisors
PGI
has executed agreements with various sub-advisors. Under those sub-advisory
agreements, the sub-advisor agrees to assume the obligations of PGI to provide
investment advisory services for a specific Fund. For these services, PGI pays
each sub-advisor a fee, which is set forth in greater detail below in the
“Sub-Advisory Agreements for the Funds” section.
|
|
|
|
| |
Sub-Advisor: |
AllianceBernstein
L.P. (“AllianceBernstein”)
is a Delaware limited partnership, the majority limited partnership units
in which are held, directly and indirectly, by its parent company
Equitable Holdings, Inc. (“EQH”), a publicly traded holding company for a
diverse group of financial services companies. AllianceBernstein
Corporation, an indirect wholly-owned subsidiary of EQH, is the general
partner of both AllianceBernstein and AllianceBernstein Holding L.P.
(“ABH”), a publicly traded partnership. As of September 30, 2023, ABH
owned approximately 39.0% of the issued and outstanding AllianceBernstein
Units; EQH and its subsidiaries had an approximate 60.3% economic interest
in AllianceBernstein (including both the general partnership and limited
partnership interests in ABH and AllianceBernstein); and unaffiliated
holders 0.7%. |
| |
Fund(s): |
a
portion of the assets of SmallCap Growth I |
| |
Sub-Advisor: |
Barrow,
Hanley, Mewhinney & Strauss, LLC (doing
business as Barrow Hanley Global Investors)
(“Barrow Hanley”)
is majority owned by Perpetual Limited (Perpetual Group) (ASX: PPT), a
global financial services firm operating a multi-boutique asset management
business, as well as wealth management and trustee services
businesses. |
| |
Fund(s): |
a
portion of the assets of LargeCap Value III and a portion of the assets of
Overseas |
| |
Sub-Advisor: |
BlackRock
Financial Management, Inc. (“BlackRock”) is
an indirect wholly-owned subsidiary of BlackRock, Inc. |
|
Sub-Sub-Advisor:
BlackRock
International Limited
is an indirect wholly-owned subsidiary of BlackRock,
Inc. |
Fund(s): |
Inflation
Protection and a portion of Diversified Income |
| |
Sub-Advisor: |
Brown
Advisory, LLC (“Brown”)
is a wholly-owned subsidiary of Brown Advisory Management,
LLC. |
| |
Fund(s): |
a
portion of the assets of LargeCap Growth I and a portion of the assets of
SmallCap Growth I |
| |
Sub-Advisor: |
Causeway
Capital Management LLC (“Causeway”)
is wholly owned by Causeway Capital Holdings LLC. |
| |
Fund(s): |
a
portion of the assets of Overseas |
| |
Sub-Advisor: |
Eagle
Asset Management, Inc.
is a wholly-owned subsidiary of Carillon Tower Advisers, Inc., which is a
wholly-owned subsidiary of Raymond James Financial,
Inc. |
| |
Fund(s): |
a
portion of the assets of MidCap Growth III |
| |
|
|
|
|
| |
Sub-Advisor: |
Emerald
Advisers, LLC (“Emerald”)
is a wholly-owned subsidiary of Emerald Asset Management PA, LLC, which is
51% owned by a subsidiary of 1251 Capital Group, Inc., a financial
services holding company. |
| |
Fund(s): |
SmallCap
Growth I |
| |
Sub-Advisor: |
Grantham,
Mayo, Van Otterloo & Co. LLC (“GMO”),
is organized as a Massachusetts limited liability company that is owned by
active and retired partners. |
| |
Fund(s): |
a
portion of Diversified Income (opportunistic securitized investment
sleeve) |
| |
Sub-Advisor: |
Hotchkis
and Wiley Capital Management, LLC
is a limited liability company, the primary members of which are HWCap
Holdings, LLC, a limited liability company whose members are current and
former employees, and Stephens-H&W, LLC, a limited liability company
whose primary member is SF Holding Corp., a diversified holding
company. |
| |
Fund(s): |
a
portion of the assets of SmallCap Value II |
| |
Sub-Advisor: |
Insight
North America LLC (“INA”)
is a wholly-owned subsidiary of The Bank of New York Mellon Corporation, a
banking and financial services company. INA is a registered investment
advisor under the Investment Advisers Act of 1940, is regulated by the
U.S. Securities and Exchange Commission, and is organized as a New York
State limited liability company. |
| |
Fund(s): |
a
portion of the assets of High Income |
| |
Sub-Advisor: |
Los
Angeles Capital Management LLC (“Los Angeles Capital”)
is a California limited liability company. It is owned by key employees
through its parent holding companies, LACM Holdings Inc. and LACM Equity
LLC (collectively, the “Parent Company”). Thomas D. Stevens, Chairman,
holds a controlling equity interest in the Parent
Company. |
| |
Fund(s): |
a
portion of the assets of MidCap Value I |
| |
Sub-Advisor: |
Nuveen
Asset Management, LLC (“Nuveen Asset Management”)
is an investment advisor registered with the SEC, whose sole managing
member is Nuveen Fund Advisors, LLC. Nuveen Asset Management is an
indirect subsidiary of Teachers Insurance and Annuity Association of
America, which constitutes the ultimate principal owner of Nuveen Asset
Management. |
| |
Fund(s): |
a
portion of the assets of Diversified Income |
| |
Sub-Advisor: |
Origin
Asset Management LLP (doing
business as Principal Origin)
(“Origin”)
is an indirect majority-owned subsidiary of Principal Financial Services,
Inc., an affiliate of PGI, and a member of Principal®. |
| |
Fund(s): |
International
Fund I |
| |
Sub-Advisor: |
PineBridge
Investments LLC (“PineBridge”)
is a wholly-owned subsidiary of PineBridge Investments Holdings US LLC,
which is a wholly-owned subsidiary of PineBridge Investments, L.P., a
company owned by Pacific Century Group, an Asia-based private investment
group. Pacific Century Group is majority owned by Mr. Richard Li Tzar
Kai. |
| |
Fund(s): |
a
portion of the assets of Diversified Income |
| |
Sub-Advisor: |
Polen
Capital Credit, LLC (f/k/a
DDJ Capital Management, LLC) (“Polen
Credit”)
is a private Massachusetts limited liability company that is wholly owned
by Polen Capital Management, LLC. Polen Capital Management, LLC, which
controls Polen Credit, is controlled by its Management Committee, which
consists of Stan C. Moss, CEO; Daniel Davidowitz, Portfolio Manager and
Analyst; and Damon Ficklin, Head of Team, Portfolio Manager, and Analyst.
The Management Committee is controlled by Messrs. Moss and
Davidowitz. |
| |
Fund(s): |
a
portion of the assets of Diversified Income and a portion of the assets of
High Income |
| |
|
|
|
|
| |
Sub-Advisor: |
Post
Advisory Group, LLC (“Post”)
is an indirect majority-owned subsidiary of Principal Financial Group,
Inc. |
| |
Fund(s): |
a
portion of the assets of Diversified Income and a portion of the assets of
High Income |
| |
Sub-Advisor: |
Principal
Real Estate Investors, LLC (doing
business as Principal Real Estate)
(“Principal - REI”)
is an indirect subsidiary of Principal Financial Group,
Inc. |
| |
Fund(s): |
Global
Real Estate Securities, Real Estate Securities, and a portion of the
assets of Diversified Income |
| |
Sub-Advisor: |
Robert
W. Baird & Co. Incorporated (“Baird”)
is owned directly by Baird Financial Corporation (“BFC”). BFC is, in turn,
owned by Baird Financial Group, Inc. (“BFG”), which is the ultimate parent
company of Baird. Employees of Baird own substantially all of the
outstanding stock of BFG. |
| |
Fund(s): |
a
portion of the assets of MidCap Growth III |
| |
Sub-Advisor: |
Spectrum
Asset Management, Inc. (“Spectrum”)
is an indirect subsidiary of Principal Financial Group,
Inc. |
| |
Fund(s): |
a
portion of the assets of Diversified Income |
| |
Sub-Advisor: |
T.
Rowe Price Associates, Inc. (“T. Rowe Price”)
is a wholly-owned subsidiary of T. Rowe Price Group, Inc., a financial
services holding company. |
| |
Fund(s): |
a
portion of the assets of LargeCap Growth I |
| |
Sub-Advisor: |
Vaughan
Nelson Investment Management, L.P. (“Vaughan Nelson”)
is a subsidiary of Natixis Investment Managers, LLC. |
| |
Fund(s): |
a
portion of the assets of SmallCap Value II |
| |
Sub-Advisor: |
Victory
Capital Management Inc. (“Victory Capital”)
is an indirect wholly-owned subsidiary of Victory Capital Holdings, Inc.
(“VCH”), a publicly traded Delaware corporation. |
| |
Fund(s): |
a
portion of the assets of MidCap Value I |
| |
Sub-Advisor: |
Westwood
Management Corp. (“Westwood”),
a New York corporation, is a wholly-owned subsidiary of Westwood Holdings
Group, Inc., a publicly held company traded on the New York Stock
Exchange. |
| |
Fund(s): |
a
portion of the assets of LargeCap Value
III |
Codes
of Ethics
The
Registrant, PGI, PFD, and each of the sub-advisors have adopted Codes of Ethics
(“Codes”) under Rule 17j-1 of the 1940 Act. PGI and the sub-advisors have each
also adopted such a Code under Rule 204A-1 of the Investment Advisers Act of
1940. These Codes are designed to prevent, among other things, persons with
access to information regarding the portfolio trading activity of the Funds from
using that information for their personal benefit. Except in limited
circumstances, the Code for PGI and the Registrant prohibits portfolio managers
from personally trading securities that are held or traded in the actively
managed portfolios for which they are responsible. Certain sub-advisors have
adopted Codes that do not permit personnel subject to such Code to invest in
securities that may be purchased or held by a Fund. However, other sub-advisors’
Codes do permit, subject to conditions, personnel subject to the Code to invest
in securities that may be purchased or held by a Fund. The Registrant’s Board
reviews reports at least annually regarding the operation of the Code of Ethics
of the Registrant, PGI, PFD, and each sub-advisor. A copy of the Registrant’s
Code will be provided upon request, which may be made by contacting the
Registrant.
Management
Agreement
Under
the terms of the Management Agreement with the Registrant, PGI, the investment
advisor, is entitled to receive a fee computed and accrued daily and payable
monthly, at the following annual rates, for providing investment advisory
services and specified other services. The management fee schedule for each Fund
is as follows (expressed as a percentage of average net assets).
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Fund |
First
$500
million |
Next
$500
million |
Next
$500
million |
Over
$1.5
billion |
California
Municipal |
0.40% |
0.38% |
0.36% |
0.35% |
Finisterre
Emerging Markets Total Return Bond |
0.75 |
0.74 |
0.73 |
0.72 |
Government
& High Quality Bond |
0.49 |
0.47 |
0.45 |
0.44 |
MidCap
Growth |
0.65 |
0.63 |
0.61 |
0.60 |
MidCap
Growth III |
0.82 |
0.80 |
0.78 |
0.77 |
SmallCap |
0.75 |
0.73 |
0.71 |
0.70 |
Tax-Exempt
Bond |
0.40 |
0.38 |
0.36 |
0.35 |
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Fund |
All
Assets |
Principal
LifeTime Strategic Income |
0.00% |
Principal
LifeTime 2015 |
0.00 |
Principal
LifeTime 2020 |
0.00 |
Principal
LifeTime 2025 |
0.00 |
Principal
LifeTime 2030 |
0.00 |
Principal
LifeTime 2035 |
0.00 |
Principal
LifeTime 2040 |
0.00 |
Principal
LifeTime 2045 |
0.00 |
Principal
LifeTime 2050 |
0.00 |
Principal
LifeTime 2055 |
0.00 |
Principal
LifeTime 2060 |
0.00 |
Principal
LifeTime 2065 |
0.00 |
Principal
LifeTime 2070 |
0.00 |
Principal
LifeTime Hybrid Income |
0.00 |
Principal
LifeTime Hybrid 2015 |
0.00 |
Principal
LifeTime Hybrid 2020 |
0.00 |
Principal
LifeTime Hybrid 2025 |
0.00 |
Principal
LifeTime Hybrid 2030 |
0.00 |
Principal
LifeTime Hybrid 2035 |
0.00 |
Principal
LifeTime Hybrid 2040 |
0.00 |
Principal
LifeTime Hybrid 2045 |
0.00 |
Principal
LifeTime Hybrid 2050 |
0.00 |
Principal
LifeTime Hybrid 2055 |
0.00 |
Principal
LifeTime Hybrid 2060 |
0.00 |
Principal
LifeTime Hybrid 2065 |
0.00 |
Principal
LifeTime Hybrid 2070 |
0.00 |
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| |
Fund |
First $500
million |
Next $500
million |
Next $500
million |
Next $500
million |
Next
$1
billion |
Over
$3
billion |
Core
Plus Bond |
0.42% |
0.40% |
0.38% |
0.37% |
0.36% |
0.35% |
Diversified
Income |
0.69 |
0.67 |
0.65 |
0.64 |
0.63 |
0.62 |
Global
Emerging Markets |
0.99 |
0.97 |
0.95 |
0.94 |
0.93 |
0.92 |
Global
Real Estate Securities |
0.90 |
0.88 |
0.86 |
0.85 |
0.84 |
0.83 |
High
Income |
0.65 |
0.63 |
0.61 |
0.60 |
0.59 |
0.58 |
Inflation
Protection |
0.40 |
0.38 |
0.36 |
0.35 |
0.34 |
0.33 |
International
I |
0.65 |
0.63 |
0.61 |
0.60 |
0.59 |
0.58 |
LargeCap
Value III |
0.80 |
0.78 |
0.76 |
0.75 |
0.73 |
0.70 |
MidCap
Value I |
0.68 |
0.66 |
0.64 |
0.63 |
0.62 |
0.61 |
Money
Market |
0.40 |
0.39 |
0.38 |
0.37 |
0.36 |
0.35 |
Overseas |
0.90 |
0.88 |
0.86 |
0.85 |
0.84 |
0.83 |
SmallCap
Growth I |
0.88 |
0.86 |
0.84 |
0.83 |
0.82 |
0.81 |
SmallCap
Value II |
0.95 |
0.93 |
0.91 |
0.90 |
0.89 |
0.88 |
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| |
Fund |
First $500
million |
Next $500
million |
Next $500
million |
Next $500
million |
Next $1
billion |
Next $9
billion |
Over $12
billion |
LargeCap
Growth I |
0.66% |
0.64% |
0.62% |
0.61% |
0.60% |
0.59% |
0.58% |
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| |
Fund |
First $500
million |
Next $500
million |
Next $500
million |
Next $500
million |
Next $1
billion |
Next $2
billion |
Next $2
billion |
Next $3
billion |
Next $10
billion |
Real
Estate Securities |
0.85% |
0.83% |
0.81% |
0.80% |
0.79% |
0.78% |
0.77% |
0.76% |
0.75% |
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| |
Fund |
First $500
million |
Next $500
million |
Next $500
million |
Next $500
million |
Next $1
billion |
Next $7
billion |
Over $10
billion |
Core
Fixed Income |
0.39% |
0.37% |
0.35% |
0.34% |
0.33% |
0.32% |
0.31% |
Diversified
International |
0.80% |
0.78% |
0.76% |
0.75% |
0.73% |
0.70% |
0.69% |
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| |
Fund |
First $250
million |
Next $250
million |
Next $6.5
billion |
Next $3
billion |
Next $2
billion |
Next $3
billion |
Over $15
billion |
Equity
Income |
0.60% |
0.55% |
0.50% |
0.49% |
0.48% |
0.46% |
0.44% |
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| |
Fund |
First $250
million |
Over $250
million |
High
Yield |
0.625% |
0.50% |
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Fund |
First $3
billion |
Next $3
billion |
Over $6
billion |
LargeCap
S&P 500 Index |
0.11% |
0.09% |
0.05% |
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| |
Fund |
First $500
million |
Next $500
million |
Next $500
million |
Next $500
million |
Next $1
billion |
Next $9.5
billion |
Next $2.5
billion |
Next $3
billion |
Next $4
billion |
Next $3
billion |
Over $25
billion |
MidCap |
0.65% |
0.63% |
0.61% |
0.60% |
0.59% |
0.58% |
0.57% |
0.56% |
0.55% |
0.53% |
0.51% |
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Fund |
All
Assets |
Government
Money Market |
0.15% |
MidCap
S&P 400 Index |
0.15 |
SmallCap
S&P 600 Index |
0.15 |
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Fund |
First $500
million |
Next $500
million |
Over $1
billion |
Principal
Capital Appreciation |
0.625% |
0.50% |
0.375% |
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Portfolio |
First $3
billion |
Next $4
billion |
Next $4
billion |
Next $4
billion |
Over $15
billion |
SAM
Balanced* |
0.35% |
0.30% |
0.25% |
0.20% |
0.18% |
SAM
Conservative Balanced* |
0.35 |
0.30 |
0.25 |
0.20 |
0.18 |
SAM
Conservative Growth* |
0.35 |
0.30 |
0.25 |
0.20 |
0.18 |
SAM
Flexible Income* |
0.35 |
0.30 |
0.25 |
0.20 |
0.18 |
SAM
Strategic Growth* |
0.35 |
0.30 |
0.25 |
0.20 |
0.18 |
*Breakpoints
are based on aggregate SAM Portfolio net assets. |
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Fund |
First $2
billion |
Next $2
billion |
Over $4
billion |
Short-Term
Income |
0.38% |
0.36% |
0.33% |
Fund
Operating Expenses
Each
Fund pays all of its operating expenses. Under the terms of the Management
Agreement, PGI is responsible for paying the expenses associated with the
organization of each Fund, including the expenses incurred in the initial
registration of each Fund with the SEC; compensation of personnel, officers, and
Board Members who are affiliated with PGI; and expenses and compensation
associated with furnishing office space and all necessary office facilities and
equipment and personnel necessary to perform the general corporate functions of
the Funds. Accounting services customarily required by investment companies are
provided to each Fund by PGI, under the terms of the Management Agreement.
Contractual
Limits on Total Annual Fund Operating Expenses
PGI
has contractually agreed to limit Fund expenses (excluding interest expense,
expenses related to fund investments, acquired fund fees and expenses, and tax
reclaim recovery expenses and other extraordinary expenses) on certain share
classes of certain of the Funds. The reductions and reimbursements are in
amounts that maintain total operating expenses at or below certain limits. The
limits are expressed as a percentage of average daily net assets attributable to
each respective class on an annualized basis. Subject to applicable expense
limits, the Funds may reimburse PGI for expenses incurred during the current
fiscal year.
In
addition, PGI has contractually agreed to reduce the Government Money Market
Fund's management fees in an amount equal to all Acquired Fund Fees and Expenses
through the period ending February 28, 2025.
The
operating expense limits and the agreement terms are as follows:
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Contractual
Limits on Total Annual Fund Operating Expenses |
Fund |
A |
J |
Inst. |
Expiration |
California
Municipal |
N/A |
N/A |
0.46% |
2/28/2025 |
Core
Fixed Income |
N/A |
N/A |
0.43% |
2/28/2025 |
Core
Plus Bond |
0.80% |
N/A |
0.48% |
2/28/2025 |
Diversified
Income |
N/A |
N/A |
0.68% |
2/28/2025 |
Diversified
International |
N/A |
N/A |
0.85% |
2/28/2025 |
Equity
Income |
N/A |
N/A |
0.52% |
2/28/2025 |
Finisterre
Emerging Markets Total Return Bond |
N/A
|
N/A |
0.85% |
2/28/2025 |
Global
Emerging Markets |
1.45% |
1.30% |
1.10% |
2/28/2025 |
Global
Real Estate Securities |
N/A |
N/A |
0.94% |
2/28/2025 |
Government
& High Quality Bond |
N/A |
N/A |
0.53% |
2/28/2025 |
Government
Money Market |
N/A |
N/A |
0.20% |
2/28/2025 |
High
Yield |
N/A |
N/A |
0.61% |
2/28/2025 |
International
I |
N/A |
N/A |
0.79% |
2/28/2025 |
MidCap
Growth |
N/A |
N/A |
0.75% |
2/28/2025 |
MidCap
Value I |
N/A |
N/A |
0.69% |
2/28/2025 |
Money
Market |
0.50% |
N/A |
N/A |
2/28/2025 |
Principal
LifeTime 2040 |
0.38% |
N/A |
N/A |
2/28/2025 |
Principal
LifeTime 2050 |
0.38% |
N/A |
N/A |
2/28/2025 |
Principal
LifeTime 2060 |
N/A |
0.38% |
N/A |
2/28/2025 |
Principal
LifeTime 2070 |
N/A |
0.30% |
0.05% |
2/28/2025 |
Principal
LifeTime Strategic Income |
0.38% |
N/A |
0.00% |
2/28/2025 |
Principal
LifeTime Hybrid 2015 |
N/A |
N/A |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2020 |
N/A |
N/A |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2025 |
N/A |
N/A |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2030 |
N/A |
N/A |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2035 |
N/A |
N/A |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2040 |
N/A |
N/A |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2045 |
N/A |
N/A |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2050 |
N/A |
N/A |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2055 |
N/A |
0.30% |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2060 |
N/A |
0.30% |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2065 |
N/A |
0.30% |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid 2070 |
N/A |
0.30% |
0.05% |
2/28/2025 |
Principal
LifeTime Hybrid Income |
N/A |
N/A |
0.05% |
2/28/2025 |
Real
Estate Securities |
N/A |
N/A |
0.86% |
2/28/2025 |
SmallCap |
N/A |
N/A |
0.85% |
2/28/2025 |
SmallCap
S&P 600 Index |
N/A |
N/A |
0.21% |
2/28/2025 |
SmallCap
Value II |
N/A |
N/A |
0.96% |
2/28/2025 |
Tax-Exempt
Bond |
N/A |
N/A |
0.45% |
2/28/2025 |
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Contractual
Limits on Total Annual Fund Operating Expenses |
Fund |
R-1 |
R-3 |
R-4 |
R-5 |
Expiration |
Government
& High Quality Bond |
1.29% |
0.98% |
0.79% |
0.67% |
2/28/2025 |
Principal
LifeTime 2070 |
0.93% |
0.62% |
0.43% |
0.31% |
2/28/2025 |
Contractual
Limits on Other Expenses
PGI
has contractually agreed to limit the expenses identified as “Other Expenses”
related to certain share classes of certain of the Funds by paying, if
necessary, expenses normally payable by the Fund (excluding interest expense,
expenses related to fund investments, acquired fund fees and expenses, and tax
reclaim recovery expenses and other extraordinary expenses) to maintain “Other
Expenses” (expressed as a percent of average net assets on an annualized basis)
at or below certain limits.
The
other expenses limits and the agreement terms are as follows:
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Contractual
Limits on Other Expenses |
Fund |
R-6 |
Expiration |
Diversified
Income |
0.02% |
2/28/2025 |
Global
Emerging Markets |
0.04% |
2/28/2025 |
Government
Money Market |
0.00% |
2/28/2025 |
International
I |
0.04% |
2/28/2025 |
Principal
LifeTime Hybrid Income |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2015 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2020 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2025 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2030 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2035 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2040 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2045 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2050 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2055 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2060 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2065 |
0.02% |
2/28/2025 |
Principal
LifeTime Hybrid 2070 |
0.02% |
2/28/2025 |
SmallCap |
0.02% |
2/28/2025 |
SmallCap
Growth I |
0.01% |
2/28/2025 |
Contractual
Management Fee Waivers
PGI
has contractually agreed to waive a portion of certain Fund’s management fees.
The fee waiver will reduce the Fund’s management fees by the amounts listed
below:
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| |
Contractual
Management Fee Waivers |
Fund |
Waiver |
Expiration |
High
Income |
0.015% |
2/28/2025 |
LargeCap
Growth I |
0.016% |
2/28/2025 |
LargeCap
Value III |
0.065% |
2/28/2025 |
MidCap
Growth III |
0.020% |
2/28/2025 |
MidCap
Value I |
0.020% |
2/28/2025 |
Overseas |
0.020% |
2/28/2025 |
SmallCap
Growth I |
0.020% |
2/28/2025 |
SmallCap
Value II |
0.020% |
2/28/2025 |
Voluntary
Expense Limit
PGI
has voluntarily agreed to limit the Government Money Market and Money Market
Funds’ expenses to the extent necessary to maintain a 0% yield. The voluntary
expense limit may be revised or terminated at any time without notice to the
shareholders.
Management
Fees Paid
Management
fees paid for investment management services (before any waivers/reimbursements
from PGI) during the periods indicated were as follows:
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| |
Management
Fees Paid for Periods Ended October 31 (amounts in
thousands) |
Fund |
2023 |
| 2022 |
| 2021 |
|
California
Municipal |
$2,290
|
| $2,609 |
| $3,131 |
|
Core
Fixed Income |
37,053
|
| 37,559 |
| 42,275 |
|
Core
Plus Bond |
3,047
|
| 3,577 |
| 3,807 |
|
Diversified
Income |
19,900
|
|
27,267
(1) |
| 34,945 |
|
Diversified
International |
34,977
|
| 36,027 |
| 64,677 |
|
Equity
Income |
45,385
|
| 50,039 |
| 50,710 |
|
Finisterre
Emerging Markets Total Return Bond |
3,290
|
| 4,574 |
|
4,255
(2) |
|
Global
Emerging Markets |
2,253
|
|
2,634
(3) |
| 3,248 |
|
Global
Real Estate Securities |
18,639
|
| 25,456 |
| 31,046 |
|
Government
& High Quality Bond |
3,177
|
| 5,709 |
| 6,299 |
|
Government
Money Market |
4,936
|
| 6,011 |
| 5,744 |
|
High
Income |
19,133
|
| 20,221 |
| 21,522 |
|
High
Yield |
11,665
|
| 12,994 |
| 15,327 |
|
Inflation
Protection |
5,925
|
| 5,707 |
| 6,099 |
|
International
I |
1,987
|
| 2,229 |
| 2,562 |
|
LargeCap
Growth I |
62,188
|
| 69,781 |
| 79,586 |
|
LargeCap
S&P 500 Index |
8,429
|
| 8,732 |
| 8,942 |
|
LargeCap
Value III |
20,849
|
| 24,738 |
| 22,166 |
|
MidCap |
110,525
|
| 119,959 |
| 129,006 |
|
MidCap
Growth |
1,481
|
| 1,768 |
| 1,829 |
|
MidCap
Growth III |
9,644
|
| 9,616 |
| 10,240 |
|
MidCap
S&P 400 Index |
1,952
|
| 1,948 |
| 1,987 |
|
MidCap
Value I |
23,972
|
| 22,016 |
| 17,373 |
|
Money
Market |
3,809
|
| 3,246 |
| 2,933 |
|
Overseas |
19,919
|
| 21,032 |
| 27,536 |
|
Principal
Capital Appreciation |
14,430
|
| 13,307 |
| 9,848 |
|
Principal
LifeTime Strategic Income |
— |
| — |
| — |
|
Principal
LifeTime 2015 |
— |
| — |
| — |
|
Principal
LifeTime 2020 |
— |
| — |
| — |
|
Principal
LifeTime 2025 |
— |
| — |
| — |
|
Principal
LifeTime 2030 |
— |
| — |
| — |
|
Principal
LifeTime 2035 |
— |
| — |
| — |
|
Principal
LifeTime 2040 |
— |
| — |
| — |
|
Principal
LifeTime 2045 |
— |
| — |
| — |
|
Principal
LifeTime 2050 |
— |
| — |
| — |
|
Principal
LifeTime 2055 |
— |
| — |
| — |
|
Principal
LifeTime 2060 |
— |
| — |
| — |
|
Principal
LifeTime 2065 |
— |
| — |
| — |
|
Principal
LifeTime 2070 |
—
(4) |
| — |
| — |
|
Principal
LifeTime Hybrid Income |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2015 |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2020 |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2025 |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2030 |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2035 |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2040 |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2045 |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2050 |
— |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Management
Fees Paid for Periods Ended October 31 (amounts in
thousands) |
Fund |
2023 |
| 2022 |
| 2021 |
|
Principal
LifeTime Hybrid 2055 |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2060 |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2065 |
— |
| — |
| — |
|
Principal
LifeTime Hybrid 2070 |
—
(4) |
| — |
| — |
|
Real
Estate Securities |
44,271
|
| 52,836 |
| 44,740 |
|
SAM
Balanced |
11,766
|
| 12,439 |
| 13,123 |
|
SAM
Conservative Balanced |
4,726
|
| 4,928 |
| 4,968 |
|
SAM
Conservative Growth |
7,970
|
| 8,497 |
| 8,999 |
|
SAM
Flexible Income |
6,864
|
| 7,679 |
| 7,863 |
|
SAM
Strategic Growth |
5,376
|
| 5,541 |
| 5,850 |
|
Short-Term
Income |
11,754
|
| 14,435 |
| 21,762 |
|
SmallCap |
8,841
|
| 9,556 |
| 8,827 |
|
SmallCap
Growth I |
19,376
|
| 21,565 |
| 24,764 |
|
SmallCap
S&P 600 Index |
1,725
|
| 1,898 |
| 2,100 |
|
SmallCap
Value II |
11,005
|
| 11,701 |
| 11,863 |
|
Tax-Exempt
Bond |
2,315
|
| 2,991 |
| 3,192 |
|
|
| |
(1)
Effective March 1, 2022, Global Diversified Income Fund changed its name
to Diversified Income Fund. |
(2)
Effective February 1, 2021, Finisterre Unconstrained Emerging Markets Bond
Fund changed its name to Finisterre Emerging Markets Total Return Bond
Fund. |
(3)
Effective
January 1, 2022, International Emerging Markets Fund changed its name to
Global Emerging Markets Fund. |
(4)
Period
from March 1, 2023, date operations commenced, through October 31,
2023. |
Management
Fees Waived
For
the following Funds, PGI waived a portion of the management fee during the
periods indicated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Management
Fees Waived for Periods Ended October 31 (amounts in
thousands) |
Fund |
2023 |
| 2022 |
| 2021 |
|
Core
Plus Bond |
$120
|
| $393 |
| $420 |
|
Diversified
Income |
418
|
|
1,868
(1) |
| 3,794 |
|
Government
Money Market |
278
|
| 371 |
| 396 |
|
High
Income |
471
|
| 498 |
| 532 |
|
LargeCap
Growth I |
1,661
|
| 1,868 |
| 2,136 |
|
LargeCap
Value III |
1,781
|
| 2,136 |
| 1,904 |
|
MidCap
Growth III |
237
|
| 224 |
| 234 |
|
MidCap
Value I |
755
|
| 691 |
| 539 |
|
Overseas |
487
|
| 784 |
| 1,034 |
|
SmallCap
Growth I |
457
|
| 510 |
| 588 |
|
SmallCap
Value II |
235
|
| 251 |
| 254 |
|
|
| |
(1)
Effective
March 1, 2022, Global Diversified Income Fund changed its name to
Diversified Income Fund. |
Expenses
Reimbursed
For
the following Funds, PGI reimbursed certain expenses during the periods
indicated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
Reimbursed for Periods Ended October 31 (amounts in
thousands) |
Fund |
2023 |
| 2022 |
| 2021 |
|
California
Municipal |
$99
|
| $42 |
| $60 |
|
Core
Fixed Income |
439
|
| 260 |
| — |
|
Core
Plus Bond |
504
|
| 403 |
| 347 |
|
Diversified
Income |
1,330
|
|
1,643
(1) |
| 2,042 |
|
Diversified
International |
199
|
| 155 |
| 83 |
|
Equity
Income |
1,679
|
| 1,724 |
| 1,494 |
|
Finisterre
Emerging Markets Total Return Bond |
193
|
| 6 |
|
64
(2) |
|
Global
Emerging Markets |
503
|
|
272
(3) |
| 218 |
|
Global
Real Estate Securities |
912
|
| 877 |
| 756 |
|
Government
& High Quality Bond |
71
|
| 36 |
| 44 |
|
Government
Money Market |
224
|
| 240 |
| 3,887 |
|
High
Income |
— |
| — |
| 8 |
|
High
Yield |
445
|
| 259 |
| 226 |
|
International
I |
132
|
| 50 |
| 70 |
|
LargeCap
S&P 500 Index |
11
|
| — |
| — |
|
MidCap
Growth |
51
|
| 32 |
| 22 |
|
MidCap
Value I |
534
|
| 316 |
| 116 |
|
Money
Market |
— |
| 122 |
| 3,005 |
|
Principal
Capital Appreciation |
— |
| — |
| 106 |
|
Principal
LifeTime Strategic Income |
16
|
| 19 |
| 19 |
|
Principal
LifeTime 2040 |
25
|
| 3 |
| — |
|
Principal
LifeTime 2050 |
79
|
| 49 |
| 36 |
|
Principal
LifeTime 2060 |
9
|
| 5 |
| 5 |
|
Principal
LifeTime 2065 |
— |
| — |
| 4 |
|
Principal
LifeTime 2070 |
66
(4) |
| — |
| — |
|
Principal
LifeTime Hybrid Income |
40
|
| 36 |
| 42 |
|
Principal
LifeTime Hybrid 2015 |
34
|
| 32 |
| 34 |
|
Principal
LifeTime Hybrid 2020 |
27
|
| 16 |
| 21 |
|
Principal
LifeTime Hybrid 2025 |
24
|
| 16 |
| 22 |
|
Principal
LifeTime Hybrid 2030 |
18
|
| 18 |
| 26 |
|
Principal
LifeTime Hybrid 2035 |
27
|
| 14 |
| 22 |
|
Principal
LifeTime Hybrid 2040 |
27
|
| 15 |
| 21 |
|
Principal
LifeTime Hybrid 2045 |
36
|
| 26 |
| 33 |
|
Principal
LifeTime Hybrid 2050 |
38
|
| 29 |
| 34 |
|
Principal
LifeTime Hybrid 2055 |
63
|
| 61 |
| 66 |
|
Principal
LifeTime Hybrid 2060 |
99
|
| 79 |
| 79 |
|
Principal
LifeTime Hybrid 2065 |
93
|
| 74 |
| 79 |
|
Principal
LifeTime Hybrid 2070 |
93
(4) |
| 0 |
| 0 |
|
Real
Estate Securities |
1,731
|
| 1,276 |
| 0 |
|
Short-Term
Income |
— |
| 36 |
| 144 |
|
SmallCap |
230
|
| 53 |
| 19 |
|
SmallCap
Growth I |
69
|
| 9 |
| 1 |
|
SmallCap
S&P 600 Index |
85
|
| 67 |
| 52 |
|
SmallCap
Value II |
190
|
| 194 |
| 182 |
|
Tax-Exempt
Bond |
201
|
| 177 |
| 73 |
|
|
| |
(1)
Effective
March 1, 2022, Global Diversified Income Fund changed its name to
Diversified Income Fund. |
(2)
Effective
February 1, 2021, Finisterre Unconstrained Emerging Markets Bond Fund
changed its name to Finisterre Emerging Markets Total Return Bond
Fund. |
(3)
Effective January 1, 2022, International Emerging Markets Fund changed its
name to Global Emerging Markets Fund. |
(4)
Period from March 1, 2023, date operations commenced, through October 31,
2023. |
Sub-Advisory
Agreements for the Funds
PGI
(and not the Funds) pays the sub-advisors fees determined pursuant to a
sub-advisory agreement with each sub-advisor, including those sub-advisors that
are at least 95% owned, directly or indirectly, by PGI or its affiliates
(“Wholly-Owned Sub-Advisors”) and the sub-advisors for the Funds listed in the
tables below. Fees paid to sub-advisors are individually negotiated between PGI
and each sub-advisor and may vary.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Aggregate
Fees Paid to Sub-Advisors (other than Wholly-Owned Sub-Advisors, Origin
and Post)
for
Fiscal Years Ended October 31 (dollar amounts in
thousands) |
| 2023 |
2022 |
2021 |
Fund |
Dollar Amount |
Percent
of Average Daily Net Assets |
Dollar Amount |
Percent
of Average Daily Net Assets |
Dollar Amount |
Percent
of Average Daily Net Assets |
Diversified
Income |
$3,125 |
0.40% |
$3,998 |
0.37% |
$4,188 |
0.34% |
High
Income |
3,912
|
0.21 |
4,289
|
0.21 |
4,902 |
0.22 |
Inflation
Protection |
972
|
0.06 |
935
|
0.06 |
997 |
0.06 |
LargeCap
Growth I |
20,002
|
0.22 |
23,602
|
0.23 |
27,296 |
0.23 |
LargeCap
Value III |
4,705
|
0.20 |
5,486
|
0.20 |
4,974 |
0.20 |
MidCap
Growth III |
3,569
|
0.35 |
3,506
|
0.36 |
3,769 |
0.36 |
MidCap
Value I |
8,767
|
0.27 |
8,005
|
0.27 |
6,477 |
0.27 |
Overseas |
6,523
|
0.34 |
6,875
|
0.35 |
8,887 |
0.34 |
SmallCap
Growth I |
9,077
|
0.42 |
9,720
|
0.42 |
11,138 |
0.42 |
SmallCap
Value II |
3,856
|
0.37 |
4,229
|
0.37 |
4,289 |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fees
Paid to Origin and Post for Fiscal Years Ended October 31 (dollar
amounts in thousands) |
| 2023 |
2022 |
2021 |
Fund |
Dollar Amount |
Percent
of Average Daily Net Assets |
Dollar Amount |
Percent
of Average Daily Net Assets |
Dollar Amount |
Percent
of Average Daily Net Assets |
Diversified
Income (Post) |
$1,198 |
0.29% |
$1,629 |
0.29% |
$1,798 |
0.29% |
High
Income (Post) |
3,651
|
0.29 |
3,789 |
0.29 |
3,816 |
0.28 |
International
I (Origin) |
918
|
0.30 |
1,048 |
0.34 |
1,176 |
0.34 |
Principal
Underwriter
The
distributor and principal underwriter in the continuous offering of the Fund’s
shares is Principal Funds Distributor, Inc. (“PFD” or the “Distributor”). PFD's
address is 711 High Street, Des Moines, IA 50392. The table below shows the
aggregate dollar amount of underwriting commissions and the amount retained by
PFD for the last three fiscal years ended October 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Underwriting
Fees for Periods Ended October 31 (amounts in
thousands) |
| 2023 |
2022 |
2021 |
Fund/Portfolio |
Total Underwriting Commissions |
Amount Retained by
PFD |
Total Underwriting Commissions |
Amount Retained by
PFD |
Total Underwriting Commissions |
Amount Retained by
PFD |
California
Municipal |
$61 |
$18 |
$77 |
$59 |
$94 |
$31 |
Core
Fixed Income |
93 |
22 |
87 |
28 |
249 |
77 |
Core
Plus Bond |
45 |
13 |
48 |
14 |
72 |
21 |
Diversified
Income |
226 |
60 |
267
(1) |
73 |
411 |
114 |
Diversified
International |
130 |
27 |
161 |
33 |
214 |
37 |
Equity
Income |
461 |
95 |
682 |
133 |
895 |
159 |
Finisterre
Emerging Markets Total Return Bond |
— |
— |
3 |
1 |
17
(2) |
5 |
Global
Emerging Markets |
63 |
13 |
76
(3) |
15 |
117 |
23 |
Global
Real Estate Securities |
22 |
5 |
100 |
18 |
62 |
11 |
Government
& High Quality Bond |
49 |
10 |
71 |
23 |
103 |
32 |
High
Income |
— |
— |
— |
— |
1 |
<1 |
High
Yield |
103 |
29 |
139 |
39 |
169 |
44 |
Inflation
Protection |
4 |
4 |
5 |
5 |
3 |
1 |
International
I |
— |
— |
— |
— |
3 |
1 |
LargeCap
Growth I |
230 |
44 |
273 |
59 |
409 |
80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Underwriting
Fees for Periods Ended October 31 (amounts in
thousands) |
| 2023 |
2022 |
2021 |
Fund/Portfolio |
Total Underwriting Commissions |
Amount Retained by
PFD |
Total Underwriting Commissions |
Amount Retained by
PFD |
Total Underwriting Commissions |
Amount Retained by
PFD |
LargeCap
S&P 500 Index |
466 |
140 |
516 |
139 |
557 |
141 |
LargeCap
Value III |
<1 |
<1 |
2 |
2 |
<1 |
<1 |
MidCap |
537 |
93 |
574 |
106 |
838 |
152 |
MidCap
Growth |
3 |
3 |
6 |
6 |
8 |
8 |
MidCap
Growth III |
<1 |
<1 |
<1 |
<1 |
1 |
1 |
MidCap
S&P 400 Index |
8 |
8 |
4 |
4 |
6 |
6 |
MidCap
Value I |
93 |
17 |
130 |
25 |
132 |
22 |
Money
Market |
225 |
225 |
175 |
175 |
103 |
103 |
Principal
Capital Appreciation |
403 |
70 |
376 |
66 |
456 |
74 |
Principal
Lifetime Strategic Income |
19 |
16 |
33 |
18 |
27 |
6 |
Principal
LifeTime 2020 |
75 |
32 |
104 |
50 |
140 |
60 |
Principal
LifeTime 2030 |
298 |
57 |
335 |
84 |
387 |
82 |
Principal
LifeTime 2040 |
336 |
65 |
342 |
74 |
368 |
81 |
Principal
LifeTime 2050 |
482 |
78 |
506 |
90 |
462 |
79 |
Principal
LifeTime 2060 |
1 |
1 |
4 |
4 |
6 |
6 |
Principal
LifeTime 2070 |
<1
(4) |
<1
(4) |
N/A |
N/A |
N/A |
N/A |
Principal
LifeTime Hybrid Income |
38 |
38 |
22 |
22 |
4 |
4 |
Principal
LifeTime Hybrid 2015 |
57 |
57 |
45 |
45 |
7 |
7 |
Principal
LifeTime Hybrid 2020 |
96 |
96 |
103 |
103 |
57 |
57 |
Principal
LifeTime Hybrid 2025 |
207 |
207 |
157 |
157 |
76 |
76 |
Principal
LifeTime Hybrid 2030 |
151 |
151 |
92 |
92 |
46 |
46 |
Principal
LifeTime Hybrid 2035 |
99 |
99 |
85 |
85 |
43 |
43 |
Principal
LifeTime Hybrid 2040 |
116 |
116 |
77 |
77 |
37 |
37 |
Principal
LifeTime Hybrid 2045 |
68 |
68 |
57 |
57 |
20 |
20 |
Principal
LifeTime Hybrid 2050 |
74 |
74 |
51 |
51 |
23 |
23 |
Principal
LifeTime Hybrid 2055 |
33 |
33 |
28 |
28 |
9 |
9 |
Principal
LifeTime Hybrid 2060 |
21 |
21 |
11 |
11 |
3 |
3 |
Principal
LifeTime Hybrid 2065 |
7 |
7 |
3 |
3 |
1 |
1 |
Principal
LifeTime Hybrid 2070 |
<1
(4) |
<1
(4) |
N/A |
N/A |
N/A |
N/A |
Real
Estate Securities |
135 |
28 |
280 |
55 |
243 |
46 |
SAM
Balanced |
1,628 |
512 |
2,044 |
542 |
2,277 |
444 |
SAM
Conservative Balanced |
693 |
301 |
844 |
311 |
1,098 |
260 |
SAM
Conservative Growth |
1,438 |
332 |
1,791 |
396 |
1,858 |
379 |
SAM
Flexible Income |
666 |
319 |
918 |
399 |
1,172 |
375 |
SAM
Strategic Growth |
1,206 |
247 |
1,447 |
283 |
1,465 |
262 |
Short-Term
Income |
323 |
100 |
469 |
137 |
553 |
159 |
SmallCap |
190 |
37 |
247 |
56 |
380 |
61 |
SmallCap
Growth I |
2 |
2 |
2 |
2 |
10 |
10 |
SmallCap
S&P 600 Index |
7 |
7 |
4 |
4 |
4 |
4 |
SmallCap
Value II |
<1 |
<1 |
1 |
1 |
6 |
2 |
Tax-Exempt
Bond |
47 |
22 |
155 |
85 |
164 |
56 |
|
|
|
|
| |
(1) |
Effective
March 1, 2022, Global Diversified Income Fund changed its name to
Diversified Income Fund. |
(2) |
Effective
February 1, 2021, Finisterre Unconstrained Emerging Markets Bond Fund
changed its name to Finisterre Emerging Markets Total Return Bond
Fund. |
(3) |
Effective
January 1, 2022, International Emerging Markets Fund changed its name to
Global Emerging Markets Fund. |
(4) |
Period
from March 1, 2023, date operations commenced, through October 31,
2023. |
PFD
does not charge fees on redemptions or repurchases of Fund shares. The amounts
in the table above for Total Underwriting Commissions include any applicable
contingent deferred sales charges and front-end sales charges.
Rule
12b-1 Fees / Distribution Plans and Agreements
In
addition to the management and service fees, certain of the Funds’ share classes
are subject to a Rule 12b-1 Distribution Plan and Agreement (each, a “Plan” and,
together, the “Plans”). The Board and initial shareholders of Classes A, C, J,
R-1, R-3, and R-4 shares have approved and entered into a Plan. In adopting the
Plans, the Board (including a majority of board members who are not interested
persons of the Funds, as defined in the Investment Company Act of 1940, as
amended) determined that there was a reasonable likelihood that the Plans would
benefit the Funds and the shareholders of the affected classes. Among the
possible benefits of the Plans include the potential for building and retaining
Fund assets, as well as the ability to offer an incentive for registered
representatives to provide ongoing servicing to shareholders.
The
Plans provide that each Fund makes payments to the Fund’s Distributor from
assets of each share class that has a Plan to compensate the Distributor and
other selling dealers, various banks, broker-dealers, and other financial
intermediaries, for providing certain services to the Fund. Such services may
include, but are not limited to:
• formulation
and implementation of marketing and promotional activities;
• preparation,
printing, and distribution of sales literature;
• preparation,
printing, and distribution of prospectuses and the Fund reports to
other-than-existing shareholders;
• obtaining
such information with respect to marketing and promotional activities as the
Distributor deems advisable;
• making
payments to dealers and others engaged in the sale of shares or who engage in
shareholder support services; and
• providing
training, marketing, and support with respect to the sale of
shares.
Each
Fund pays the Distributor a fee after the end of each month at an annual rate as
a percentage of the daily net asset value of the assets attributable to each
share class as follows:
|
|
|
|
|
|
|
| |
Share
Class |
Maximum
Annualized Rule 12b-1 Fee |
|
A
(1)(2) |
0.25%
(3) |
|
C
(2) |
1.00% |
|
J
(2) |
0.15% |
|
R-1 |
0.35% |
|
R-3 |
0.25% |
|
R-4 |
0.10% |
|
(1)
Class A shares of the Money Market Fund are not subject to Rule 12b-1
fees. |
(2)
The Distributor also receives the proceeds of any CDSC
imposed. |
(3)
The maximum annualized 12b-1 fee for Class A shares of the Government
& High Quality Bond, LargeCap S&P 500 Index, and Short-Term Income
Funds is 0.15%. |
Effective
December 31, 2015, the Distributor has contractually agreed to limit the
distribution fees attributable to Class J normally payable by the Money Market
Fund. This waiver is in place through February 28, 2025 and will reduce the
Money Market Fund’s distribution fees by 0.15%. It is expected that the fee
waiver will continue to the period disclosed; however, PFI and the Distributor,
the parties to the agreement, may agree to terminate the fee waiver prior to the
end of the period.
Effective
January 1, 2021, the Distributor has voluntarily agreed to limit the
distribution fees attributable to Class J, reducing the Funds’ distribution fees
for Class J shares by 0.020%.* This voluntary waiver may be revised or
terminated at any time without notice to shareholders.
* For
the period from December 31, 2016 to December 31, 2020, the voluntary waiver was
0.030%.
The
Distributor may remit on a continuous basis all of these sums to its investment
representatives and other financial intermediaries as a trail fee in recognition
of their services and assistance.
Currently,
the Distributor makes payments to dealers on accounts for which such dealer is
designated dealer of record. Payments are based on the average net asset value
of the accounts invested in Classes A, C, J, R-1, R-3, or R-4
shares.
Under
the Plans, the Funds have no legal obligation to pay any amount that exceeds the
compensation limit. The Funds do not pay, directly or indirectly, interest,
carrying charges, or other financing costs in association with these Plans. All
fees paid under a Fund’s Plan are paid to the Distributor, which is entitled to
retain such fees paid by the Fund without regard to the expenses that it
incurs.
For
the fiscal year ended October 31, 2023, each Fund made the following 12b-1
payments to PFD, and PFD, from these 12b-1 payments, made the following payments
to financial intermediaries that distribute and/or service the Fund’s shares.
The “Retained by PFD” column reflects the difference between the amount paid by
the Fund to PFD and the amount of that 12b-1 fee paid by PFD to financial
intermediaries. That difference/remainder is then used by PFD to pay for other
12b-1-eligible expenses. For the fiscal year ended October 31, 2023, the
12b-1-eligible expenses for each Fund were greater than the amount of the Fund’s
12b-1 payments to PFD.
|
|
|
|
|
|
|
|
|
|
| |
Fund/Portfolio |
Paid
by Fund to PFD (amounts in thousands) |
Paid
by PFD to Financial Intermediaries (amounts in
thousands) |
Retained
by PFD (amounts in thousands) |
California
Municipal |
$1,063 |
$1,026 |
$37 |
Core
Fixed Income |
789
|
789 |
— |
Core
Plus Bond |
365
|
365 |
— |
Diversified
Income |
5,005
|
5,005 |
— |
Diversified
International |
753
|
753 |
— |
Equity
Income |
4,056
|
4,033 |
23 |
Finisterre
Emerging Markets Total Return Bond |
— |
— |
— |
Global
Emerging Markets |
283
|
283 |
— |
Global
Real Estate Securities |
188
|
188 |
— |
Government
& High Quality Bond |
368
|
368 |
— |
Government
Money Market |
— |
— |
— |
High
Income |
— |
— |
— |
High
Yield |
1,439
|
1,425 |
14 |
Inflation
Protection |
42
|
42 |
— |
International
I |
8
|
8 |
— |
LargeCap
Growth I |
1,678
|
1,678 |
— |
LargeCap
S&P 500 Index |
2,786
|
2,786 |
— |
LargeCap
Value III |
140
|
140 |
— |
MidCap |
5,404
|
5,404 |
— |
MidCap
Growth |
158
|
158 |
— |
MidCap
Growth III |
67
|
67 |
— |
MidCap
S&P 400 Index |
402
|
402 |
— |
MidCap
Value I |
398
|
398 |
— |
Money
Market |
— |
— |
— |
Overseas |
3
|
2 |
1 |
Principal
Capital Appreciation |
2,929
|
2,865 |
64 |
Principal
LifeTime Strategic Income |
295
|
295 |
— |
Principal
LifeTime 2015 |
61
|
61 |
— |
Principal
LifeTime 2020 |
1,366
|
1,366 |
— |
Principal
LifeTime 2025 |
300
|
300 |
— |
Principal
LifeTime 2030 |
2,172
|
2,172 |
— |
Principal
LifeTime 2035 |
288
|
288 |
— |
Principal
LifeTime 2040 |
1,610
|
1,610 |
— |
Principal
LifeTime 2045 |
216
|
216 |
— |
Principal
LifeTime 2050 |
836
|
836 |
— |
Principal
LifeTime 2055 |
134
|
134 |
— |
Principal
LifeTime 2060 |
97
|
97 |
— |
Principal
LifeTime 2065 |
17 |
17 |
— |
Principal
LifeTime 2070(1) |
— |
— |
— |
Principal
LifeTime Hybrid Income |
76
|
76 |
— |
Principal
LifeTime Hybrid 2015 |
179
|
179 |
— |
Principal
LifeTime Hybrid 2020 |
320
|
320 |
— |
Principal
LifeTime Hybrid 2025 |
473
|
473 |
— |
Principal
LifeTime Hybrid 2030 |
340
|
340 |
— |
Principal
LifeTime Hybrid 2035 |
256
|
256 |
— |
Principal
LifeTime Hybrid 2040 |
251
|
251 |
— |
Principal
LifeTime Hybrid 2045 |
142
|
142 |
— |
|
|
|
|
|
|
|
|
|
|
| |
Fund/Portfolio |
Paid
by Fund to PFD (amounts in thousands) |
Paid
by PFD to Financial Intermediaries (amounts in
thousands) |
Retained
by PFD (amounts in thousands) |
Principal
LifeTime Hybrid 2050 |
116
|
116 |
— |
Principal
LifeTime Hybrid 2055 |
59
|
59 |
— |
Principal
LifeTime Hybrid 2060 |
29
|
29 |
— |
Principal
LifeTime Hybrid 2065 |
9
|
9 |
— |
Principal
LifeTime Hybrid 2070(1) |
123
|
— |
123 |
Real
Estate Securities |
1,173
|
1,173 |
— |
SAM
Balanced |
8,348
|
8,348 |
— |
SAM
Conservative Balanced |
3,086
|
3,086 |
— |
SAM
Conservative Growth |
6,007
|
6,007 |
— |
SAM
Flexible Income |
5,197
|
5,197 |
— |
SAM
Strategic Growth |
4,089
|
4,077 |
12 |
Short-Term
Income |
927
|
921 |
6 |
SmallCap |
1,077
|
1,077 |
— |
SmallCap
Growth I |
133
|
133 |
— |
SmallCap
S&P 600 Index |
463
|
463 |
— |
SmallCap
Value II |
46
|
46 |
— |
Tax-Exempt
Bond |
929
|
915 |
14 |
|
|
|
|
| |
(1) |
Period
from March 1, 2023, date operations commenced, through October 31,
2023. |
Custodian
The
custodian of the portfolio securities and cash assets of the Funds is The Bank
of New York Mellon, One Wall Street, New York, NY 10286. The custodian performs
no managerial or policy-making functions for the Funds.
Service
Agreement and Administrative Services Agreement
The
Service Agreement (for classes R-1, R-3, R-4, and R-5 Shares) provides for PGI
to provide certain personal services to shareholders (plan sponsors) and
beneficial owners (plan members) of those classes. These personal services
include:
• responding
to plan sponsor and plan member inquiries;
• providing
information regarding plan sponsor and plan member investments; and
• providing
other similar personal services or services related to the maintenance of
shareholder accounts as contemplated by National Association of Securities
Dealers (NASD) Rule 2830 (or any successor thereto).
As
compensation for these services, Principal Funds will pay PGI service fees equal
to 0.25% of the average daily net assets attributable to each of the R-1, R-3,
R-4, and R-5 Classes. The service fees are calculated and accrued daily and paid
monthly to PGI (or at such other intervals as Principal Funds and PGI may
agree).
The
Administrative Services Agreement (for classes R-1, R-3, R-4, and R-5 Shares)
provides for PGI to provide services to beneficial owners of Fund shares. Such
services include:
• receiving,
aggregating, and processing purchase, exchange, and redemption requests from
plan shareholders;
• providing
plan shareholders with a service that invests the assets of their accounts in
shares pursuant to pre-authorized instructions submitted by plan
members;
• processing
dividend payments from the Funds on behalf of plan shareholders and changing
shareholder account designations;
• acting
as shareholder of record and nominee for plans;
• maintaining
account records for shareholders and/or other beneficial owners;
• providing
notification to plan shareholders of transactions affecting their
accounts;
• forwarding
prospectuses, financial reports, tax information, and other communications from
the Fund to beneficial owners;
• distributing,
receiving, tabulating, and transmitting proxy ballots of plan shareholders;
and
• other
similar administrative services.
As
compensation for these services, Principal Funds will pay PGI service fees equal
to 0.28% of the average daily net assets attributable to the R-1 Class, 0.07% of
the average daily net assets of the R-3 Class, 0.03% of the average daily net
assets of the R-4 Class, and 0.01% of the average daily net assets of the R-5
Class. The service fees are calculated and accrued daily and paid monthly to PGI
(or at such other intervals as Principal Funds and PGI may agree).
PGI
will generally, at its discretion, appoint (and may at any time remove) other
parties, including companies affiliated with PGI, as its agent to carry out the
provisions of the Service Agreement and/or the Administrative Services
Agreement. However, the appointment of an agent shall not relieve PGI of any of
its responsibilities or liabilities under those agreements. Any fees paid to
agents under these agreements shall be the sole responsibility of
PGI.
Transfer
Agent
The
Transfer Agency Agreement provides for Principal Shareholder Services, Inc.
(“PSS”) (711 High Street, Des Moines, IA 50392), an affiliate of PGI, to act as
transfer and shareholder servicing agent for the Classes A, C, J, Institutional,
R-1, R-3, R-4, R-5, and R-6.
•For
Classes A, C, and R-6, and Institutional Class shares, the Registrant pays PSS a
fee for the services provided pursuant to the Transfer Agency Agreement in an
amount equal to the costs incurred by PSS for providing such
services.
•For
Class J shares, the Registrant pays PSS a fee for the services provided pursuant
to the Transfer Agency Agreement in an amount that includes profit.
The
Registrant pays PSS for the following services for Classes A, C, J, and R-6, and
Institutional Class shares:
•issuance,
transfer, conversion, cancellation, and registry of ownership of Fund shares,
and maintenance of open account system;
•preparation
and distribution of dividend and capital gain payments to
shareholders;
•delivery,
redemption, and repurchase of shares, and remittances to
shareholders;
•the
tabulation of proxy ballots and the preparation and distribution to shareholders
of notices, proxy statements and proxies, reports, confirmation of transactions,
prospectuses, and tax information;
•communication
with shareholders concerning the above items; and
•use
of its best efforts to qualify the capital stock of the Funds for sale in states
and jurisdictions as directed by the Funds.
The
Registrant does not pay for these services for Classes R-1, R-3, R-4, and R-5
shares. PSS will pay operating expenses attributable to Classes R-1, R-3, R-4,
and R-5 shares related to (a) the cost of meetings of shareholders and (b) the
costs of initial and ongoing qualification of the capital stock of the Funds for
sale in states and jurisdictions.
Securities
Lending Agent
The
Bank of New York Mellon serves as the securities lending agent for the Funds.
Information regarding securities lending during the Funds’ fiscal year ended
October 31, 2023 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund |
Gross
income (including from cash collateral reinvestment) |
Fees
paid to securities lending agent from a revenue split |
Fees
paid for any cash collateral management service that are not included in
revenue split |
Administrative
fees not included in revenue split |
Indemnification
fees not included in revenue split |
Net
rebate paid to borrower |
Other
fees not included in revenue split |
Aggregate
fees/ compensation |
Net
income from securities lending |
Core
Fixed Income |
$706,372 |
| $21,008 |
| $— |
| $— |
| $— |
| $496,275 |
| $— |
| $517,283 |
| $189,089 |
|
Core
Plus Bond |
278,464 |
| 14,711 |
| — |
| — |
| — |
| 131,334 |
| — |
| 146,045 |
| 132,419 |
|
Diversified
Income |
1,602,521 |
| 53,437 |
| — |
| — |
| — |
| 1,068,075 |
| — |
| 1,121,512 |
| 481,009 |
|
Diversified
International |
1,600,864 |
| 17,743 |
| — |
| — |
| — |
| 1,423,426 |
| — |
| 1,441,169 |
| 159,695 |
|
Equity
Income |
1,987,976 |
| 124,166 |
| — |
| — |
| — |
| 746,314 |
| — |
| 870,480 |
| 1,117,496 |
|
Finisterre
Emerging Markets Total Return Bond |
— |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Global
Emerging Markets |
25,480 |
| 1,196 |
| — |
| — |
| — |
| 13,515 |
| — |
| 14,711 |
| 10,769 |
|
Global
Real Estate Securities |
203,821 |
| 3,217 |
| — |
| — |
| — |
| 171,647 |
| — |
| 174,863 |
| 28,958 |
|
Government
& High Quality Bond |
64,228 |
| 4,040 |
| — |
| — |
| — |
| 23,831 |
| — |
| 27,870 |
| 36,358 |
|
High
Income |
3,294,696 |
| 117,371 |
| — |
| — |
| — |
| 2,120,816 |
| — |
| 2,238,186 |
| 1,056,510 |
|
High
Yield |
759,847 |
| 52,674 |
| — |
| — |
| — |
| 233,073 |
| — |
| 285,747 |
| 474,100 |
|
Inflation
Protection |
72,996 |
| 3,126 |
| — |
| — |
| — |
| 41,736 |
| — |
| 44,862 |
| 28,134 |
|
International
I |
100,478 |
| 1,737 |
| — |
| — |
| — |
| 83,102 |
| — |
| 84,839 |
| 15,639 |
|
LargeCap
Growth I |
371,620 |
| 7,827 |
| — |
| — |
| — |
| 293,321 |
| — |
| 301,148 |
| 70,472 |
|
LargeCap
S&P 500 Index |
80,992 |
| 8,292 |
| — |
| — |
| — |
| (1,929) |
| — |
| 6,363 |
| 74,629 |
|
LargeCap
Value III |
111,286 |
| 17,346 |
| — |
| — |
| — |
| (62,203) |
| — |
| (44,858) |
| 156,144 |
|
MidCap
|
128,110 |
| 2,562 |
| — |
| — |
| — |
| 102,490 |
| — |
| 105,052 |
| 23,058 |
|
MidCap
Growth |
184,618 |
| 13,102 |
| — |
| — |
| — |
| 53,594 |
| — |
| 66,695 |
| 117,922 |
|
MidCap
Growth III |
105,979 |
| 4,828 |
| — |
| — |
| — |
| 57,677 |
| — |
| 62,505 |
| 43,474 |
|
MidCap
S&P 400 Index |
178,172 |
| 23,126 |
| — |
| — |
| — |
| (53,094) |
| — |
| (29,968) |
| 208,140 |
|
MidCap
Value I |
149,036 |
| 28,504 |
| — |
| — |
| — |
| (136,060) |
| — |
| (107,555) |
| 256,591 |
|
Overseas
|
1,285,115 |
| 21,356 |
| — |
| — |
| — |
| 1,071,527 |
| — |
| 1,092,883 |
| 192,232 |
|
Principal
Capital Appreciation |
55,541 |
| 1,374 |
| — |
| — |
| — |
| 41,805 |
| — |
| 43,179 |
| 12,363 |
|
Short-Term
Income |
209,722 |
| 3,025 |
| — |
| — |
| — |
| 179,462 |
| — |
| 182,487 |
| 27,235 |
|
SmallCap
|
337,096 |
| 13,917 |
| — |
| — |
| — |
| 197,907 |
| — |
| 211,824 |
| 125,272 |
|
SmallCap
Growth I |
1,320,638 |
| 61,847 |
| — |
| — |
| — |
| 701,950 |
| — |
| 763,797 |
| 556,841 |
|
SmallCap
S&P 600 Index |
217,357 |
| 9,946 |
| — |
| — |
| — |
| 117,880 |
| — |
| 127,826 |
| 89,531 |
|
SmallCap
Value II |
416,266 |
| 22,318 |
| — |
| — |
| — |
| 192,884 |
| — |
| 215,202 |
| 201,064 |
|
The
services provided by The Bank of New York Mellon, as securities lending agent
for the Funds, include: coordinating, with the Funds, the selection of
securities to be loaned; negotiating loan terms; monitoring the value of
securities loaned and corresponding collateral, marking to market daily;
coordinating collateral movements; monitoring dividends; and transferring,
recalling, and arranging the return of loaned securities to the Funds upon loan
termination.
MULTIPLE
CLASS STRUCTURE
The
Board has adopted a multiple class plan (the “Multiple Class Plan”) pursuant to
U.S. Securities and Exchange Commission (“SEC”) Rule 18f-3. The share classes
each Fund offers are identified in the chart included under the heading “History
of the Funds.” The share classes offered under the Multiple Class Plan include:
Classes A, C, J, Institutional, R-1, R-3, R-4, R-5, and R-6.
Contingent
Deferred Sales Charges (“CDSC”)
Class
A shares are generally sold with a sales charge that is a variable percentage
based on the amount of the purchase, as described in the Prospectus. Certain
redemptions of Class A shares within 12 months of purchase may be subject to a
“CDSC”, as described in the Prospectus.
Class
C shares are not subject to a sales charge at the time of purchase but are
subject to a 1% CDSC on shares redeemed within 12 months of purchase, as
described in the Prospectus.
Class
J shares are sold without any front-end sales charge. A CDSC of 1% is imposed if
Class J shares are redeemed within 18 months of purchase, as described in the
Prospectus.
Sales
charge waivers and reductions may be available depending on whether shares are
purchased directly from the Fund or through a financial intermediary, as
described in the Prospectus and Appendix B to the Prospectus, titled
“Intermediary-Specific Sales Charge Waivers and Reductions.”
For
Classes A, C, and J shares purchased from the Fund or through an intermediary
not identified on Appendix B to the Prospectus, the CDSC is waived on
shares:
•redeemed
within 90 days after an account is re-registered due to a shareholder's
death;
•redeemed
to pay surrender fees;
•redeemed
to pay retirement plan fees;
•redeemed
involuntarily from accounts with small balances;
•redeemed
due to the shareholder's disability (as defined by the Internal Revenue Code)
provided the shares were purchased prior to the disability;
•redeemed
from retirement plans to satisfy minimum distribution rules under the Internal
Revenue Code;
•redeemed
from a retirement plan to assure the plan complies with the Internal Revenue
Code;
•redeemed
from retirement plans qualified under Section 401(a) of the Internal Revenue
Code due to the plan participant's death, disability, retirement, or separation
from service after attaining age 55;
•redeemed
from retirement plans to satisfy excess contribution rules under the Internal
Revenue Code; or
•redeemed
using a systematic withdrawal plan (up to 1% per month (measured cumulatively
with respect to non-monthly plans) of the value of the fund account at the time,
and beginning on the date, the systematic withdrawal plan begins). (The free
withdrawal privilege not used in a calendar year is not added to the free
withdrawal privileges for any following year.)
For
Class J shares purchased from the Fund or through an intermediary not identified
on Appendix B to the Prospectus, the CDSC also is waived on shares:
•redeemed
that were purchased pursuant to the Small Amount Force Out program (SAFO);
or
•of
the Money Market Fund redeemed within 30 days of the initial purchase if the
redemption proceeds are transferred to another Principal IRA, defined as either
a fixed or variable annuity issued by Principal Life Insurance Company to fund
an IRA, a Principal Bank IRA product, or a WRAP account IRA sponsored by
Principal Securities, Inc. (PSI).
Institutional
Class and Classes R-1, R-3, R-4, R-5, and R-6 shares are available without any
front-end sales charge or CDSC. Classes R-1, R-3, R-4, and R-5 shares are
available through employer-sponsored retirement plans. Such plans may impose
fees in addition to those charged by the Funds. Classes R-1, R-3, R-4, and R-5
shares are subject to asset-based charges (described below). Class R-6 shares
are generally available through the defined contribution investment only
channel.
INTERMEDIARY
COMPENSATION
Additional
Payments to Intermediaries.
Shares
of the Funds are sold primarily through intermediaries, such as brokers,
dealers, investment advisors, banks, trust companies, pension plan consultants,
retirement plan administrators, and insurance companies.
In
addition to payments pursuant to 12b-1 plans, PGI or its affiliates enter into
agreements with some intermediaries pursuant to which the intermediaries receive
payments for providing services relating to Fund shares. Examples of such
services are administrative, networking, recordkeeping, sub-transfer agency,
and/or shareholder services. In some situations, the Funds will reimburse PGI or
its affiliates for making such payments; in others, the Funds make such payments
directly to intermediaries.
For
Classes R-1, R-3, R-4, and R-5 shares, such compensation is generally paid out
of the Service Fees and Administrative Services Fees that are disclosed in the
Prospectus as Other Expenses. Such compensation is generally based on the
average asset value of Fund shares for the relevant share class held by clients
of the intermediary.
In
addition, PGI or its affiliates pay, without reimbursement from the Funds,
compensation from their own resources, to certain intermediaries that support
the distribution of shares of the Funds or provide services to Fund
shareholders. In addition, PGI or its affiliates pay, without reimbursement from
the Funds, compensation from their own resources to certain large plan sponsors
to help cover the cost of providing educational materials to plan
participants.
The
amounts paid to intermediaries vary by share class and by Fund.
Principal
Life Insurance Company is one such intermediary that provides services relating
to Fund shares held in employee benefit plans, and it is typically paid all of
the Service Fees and Administrative Services Fees pertaining to such
plans.
Plan
recordkeepers, who may have affiliated financial intermediaries that sell shares
of the Funds, may be paid additional amounts. In addition, some financial
intermediaries or their affiliates receive compensation from PGI or its
affiliates for maintaining retirement plan platforms that facilitate trading by
affiliated and non-affiliated financial intermediaries and recordkeeping for
retirement plans.
A
number of factors may be considered in determining the amount of these
additional payments, including each financial intermediary’s Fund sales and
assets, as well as the willingness and ability of the financial intermediary to
give the Distributor access to its Financial Professionals for educational and
marketing purposes. In some cases, intermediaries will include the Funds on a
preferred list. The Distributor’s goals include making the Financial
Professionals who interact with current and prospective investors and
shareholders more knowledgeable about the Funds so that they can provide
suitable information and advice about the Funds and related investor services.
The amounts paid to intermediaries vary by Fund and by share class.
Additionally,
in some cases, the Distributor and its affiliates will provide payments or
reimbursements in connection with the costs of conferences, educational
seminars, training, and marketing efforts related to the Funds. Such activities
may be sponsored by intermediaries or the Distributor. The costs associated with
such activities may include travel, lodging, entertainment, and meals. In some
cases, the Distributor will also provide payment or reimbursement for expenses
associated with transactions (“ticket”) charges and general marketing expenses.
Other compensation may be paid to the extent not prohibited by applicable laws,
regulations, or the rules of any self-regulatory agency, such as
FINRA.
The
payments described in this SAI may create a conflict of interest by influencing
your Financial Professional or your intermediary to recommend a Fund over
another investment, or to recommend one share class of a Fund over another share
class. Ask your Financial Professional or visit your intermediary’s website for
more information about the total amounts paid to them by PGI and its affiliates,
and by sponsors of other investment companies your Financial Professional may
recommend to you.
Your
intermediary may charge you additional fees other than those disclosed in the
Prospectus. Ask your Financial Professional about any fees and commissions they
charge.
Although
a Fund may use brokers who sell shares of the Funds to effect portfolio
transactions, the sale of shares is not considered as a factor by the Fund’s
sub-advisors when selecting brokers to effect portfolio
transactions.
As
of December 1, 2023, the Distributor anticipates that the firms that will
receive additional payments as described in the Additional Payments to
Intermediaries section above (other than sales charges, Rule 12b-1 fees, and
expense reimbursement) include, but are not necessarily limited to, the
following:
|
|
|
|
|
|
|
| |
Acclaim
Benefits, Inc. |
G.A.
Repple & Company |
Private
Client Services LLC |
ADP
Broker Dealer Inc |
GBM
International Inc |
Procyon
Advisors, LLC |
AIG
SunAmerica |
Global
Retirement Partners LLC |
Prudential
Retirement Services |
Alight
Financial Solutions LLC |
Goldman
Sachs & Co. |
Purshe
Kaplan Sterling Investments, Inc. |
American
Century Investments |
ICMA-Retirement
Corp. |
Putnam
Investors Services |
American
United Life Insurance Co. |
Insight
Wealth Partners LLC |
Raymond
James & Associates, Inc. |
Ameriprise
Financial Services |
J.P.
Morgan Securities, Inc. |
Raymond
James Financial Services, Inc. |
Ameritas
Investments Corp |
Janney
Montgomery Scott |
RBC
Capital Markets Corp. |
Ascensus |
John
Hancock Life Insurance Company of New York |
Reliance
Trust Company |
AXOS
Clearing LLC |
John
Hancock Life Insurance Company USA |
Retirement
Clearinghouse |
Baird |
John
Hancock Trust Co. |
Robert
W. Baird & Co. |
Benefit
Plan Administrators |
July
Business Services LLC |
Rockefeller
Financial LLC |
Benefit
Solutions |
Kestra
Investment Services, LLC |
Sammons
Institutional Group |
Benefit
Trust Company |
Lincoln
Retirement Services Co. |
Sanctuary
Securities, Inc |
Bolton
Global Capital |
LPL
Financial Corporation |
Standard
Insurance Company |
BNY
Mellon NA |
Massachusetts
Mutual Life Insurance Company |
Stifel
Nicolaus & Company, Inc. |
Broadridge
Business Process Outsourcing, LLC |
Mercer
HR Services, LLC |
T.
Rowe Price Retirement Plan Services |
California
Capital Management |
Merrill
Lynch |
TD
Ameritrade Inc |
Cambridge
Investment Research Inc. |
Merrill
Lynch, Pierce, Fenner & Smith, Inc. |
TD
Ameritrade Trust Company |
Canterbury
Consulting Inc |
Merrill
Lynch, Retirement Group |
Ten
Capital Wealth Advisors, LLC |
Cetera
Advisor Networks LLC |
MidAtlantic
Capital Corporation |
Thrivent
Financial for Lutherans |
Charles
Schwab & Co., Inc. |
Midland
National Life Insurance Company |
TIAA-CREF |
Charles
Schwab Trust Bank |
Minnesota
Life Insurance Company |
Total
Administrative Services Corporation |
Citigroup
Global Markets Inc. |
Morgan
Stanley Smith Barney LLC |
Triad
Advisors, Inc. |
Columbia
Management Investment |
National
Financial Services |
UBS
Financial Services, Inc. |
Advisers,
LLC |
Nationwide
Financial Services, Inc. |
US
Bancorp Investments |
Commonwealth
Financial Network |
Nationwide
Investment Services Corp |
VALIC
Retirement Services Company |
Concentrum
Wealth Management |
Newport
Group, The |
Vanguard
Brokerage Services |
CPI
Qualified Consultants |
NFP
Retirement Inc |
Vanguard
Group, The |
Edward
Jones |
Northwestern
Mutual Investment Services |
Voya
Institutional Plan Services, LLC |
Empower
Annuity Insurance Company |
OneDigital
Investment Advisors |
Voya
Institutional Trust Co. |
of
America |
Oppenheimer
& Co. |
Wealth
Enhancement Advisory Svcs LLC |
Empower
Financial Services Inc |
Osaic,
Inc. |
Wells
Fargo Advisors, LLC |
ePlan
Services, Inc. |
Pensionmark
Financial Group LLC |
Wells
Fargo Bank, N.A. |
Equitable
Financial Life Insurance Co |
Pershing
LLC |
Wells
Fargo Clearing Services LLC |
Fidelity
Investment Institutional Operations Co. |
Plan
Administrators, Inc. |
Wells
Fargo Community Bank Advisors |
Fortem
Financial Group LLC |
Principal
Bank |
Western
International Securities Inc |
Four
Peaks Planning And Investments |
Principal
Life Insurance Company |
Woodbury
Financial Services |
FSC
Securities Corporation |
Principal
Securities, Inc. |
|
The
preceding list is subject to change at any time without notice. Any additions,
modifications, or deletions to the financial intermediaries identified in this
list that have occurred since the date noted above are not reflected. To obtain
a current list, call 1-800-222-5852.
BROKERAGE
ALLOCATION AND OTHER PRACTICES
Brokerage
on Purchases and Sales of Securities
All
orders for the purchase or sale of portfolio securities are placed on behalf of
a Fund by PGI or by the Fund’s sub-advisor pursuant to the terms of the
applicable sub-advisory agreement. In distributing brokerage business arising
out of the placement of orders for the purchase and sale of securities for any
Fund, the objective of PGI and of each Fund’s sub-advisor is to obtain the best
overall terms. In pursuing this objective, PGI or the sub-advisor considers all
matters it deems relevant, including the breadth of the market in the security,
the price of the security, the financial condition and executing capability of
the broker or dealer, confidentiality, including trade anonymity, and the
reasonableness of the commission, if any (for the specific transaction and on a
continuing basis). This may mean in some instances that PGI or a sub-advisor
will pay a broker commissions that are in excess of the amount of commissions
another broker might have charged for executing the same transaction when PGI or
the sub-advisor believes that such commissions are reasonable in light of a) the
size and difficulty of the transaction, b) the quality of the execution
provided, and c) the level of commissions paid relative to commissions paid by
other institutional investors. Such factors are viewed both in terms of that
particular transaction and in terms of all transactions that broker executes for
accounts over which PGI or the sub-advisor exercises investment discretion. The
Board has also adopted a policy and procedure designed to prevent each of the
Funds from compensating a broker/dealer for promoting or selling Fund shares by
directing brokerage transactions to that broker/dealer for the purpose of
compensating the broker/dealer for promoting or selling Fund shares. Therefore,
PGI or a sub-advisor may not compensate a broker/dealer for promoting or selling
Fund shares by directing brokerage transactions to that broker/dealer for the
purpose of compensating the broker/dealer for promoting or selling Fund shares.
PGI or a sub-advisor may purchase securities in the over-the-counter market,
utilizing the services of principal market makers unless better terms can be
obtained by purchases through brokers or dealers, and may purchase securities
listed on the NYSE from non-Exchange members in transactions off the
Exchange.
PGI
or a sub-advisor may give consideration in the allocation of business to
services performed by a broker (e.g., the furnishing of statistical data and
research generally consisting of, but not limited to, information of the
following types: analyses and reports concerning issuers, industries, economic
factors, and trends; portfolio strategy; performance of client accounts; and
access to research analysts, corporate management personnel, and industry
experts). If any such allocation is made, the primary criteria used will be to
obtain the best overall terms for such transactions or terms that are reasonable
in relation to the research or brokerage services provided by the broker or
dealer when viewed in terms of either a particular transaction or a
sub-advisor’s overall responsibilities to the accounts under its management. PGI
or a sub-advisor generally pays additional commission amounts for such research
services. Statistical data and research information received from brokers or
dealers as described above may be useful in varying degrees and PGI or a
sub-advisor may use it in servicing some or all of the accounts it
manages.
PGI
and the sub-advisors allocated portfolio transactions for the Funds indicated in
the following table to certain brokers for the year ended October 31, 2023 due
to research services provided by such brokers. The table also indicates the
commissions paid to such brokers as a result of these portfolio
transactions.
|
|
|
|
|
|
|
| |
Fund |
Amount
of
Transactions
because
of
Research
Services
Provided |
Related
Commissions Paid |
Diversified
International |
$1,958,824,028 |
$1,124,296 |
Equity
Income |
2,411,075,733 |
933,592 |
Global
Emerging Markets |
43,012,198 |
26,274 |
Global
Real Estate Securities |
697,052,477 |
429,678 |
International
I |
300,570,509 |
60,378 |
LargeCap
Growth I |
1,659,968,583 |
389,958 |
LargeCap
S&P 500 Index |
73,489,247 |
43,824 |
LargeCap
Value III |
1,769,205,468 |
679,357 |
MidCap |
3,480,012,597 |
1,033,572 |
MidCap
Growth |
523,976,546 |
202,327 |
MidCap
Growth III |
598,134,523 |
192,094 |
MidCap
S&P 400 Index |
42,910,144 |
16,574 |
MidCap
Value I |
3,255,286,500 |
1,042,071 |
Overseas |
1,219,928,742 |
1,440,355 |
Principal
Capital Appreciation |
1,964,436,796 |
588,027 |
Real
Estate Securities |
926,578,299 |
514,631 |
SmallCap |
42,358,714,100 |
20,316,894 |
SmallCap
Growth I |
1,042,762,780 |
754,020 |
SmallCap
S&P 600 Index |
70,019,038 |
61,369 |
SmallCap
Value II |
563,967,465 |
1,009,603 |
Subject
to the rules promulgated by the SEC, as well as other regulatory requirements,
the Board has approved procedures whereby a Fund may purchase securities that
are offered in underwritings in which an affiliate of a sub‑advisor, or PGI,
participates. These procedures prohibit a Fund from directly or indirectly
benefiting a sub‑advisor affiliate or PGI affiliate in connection with such
underwritings. In addition, for underwritings where a sub-advisor affiliate or
PGI participates as a principal underwriter, certain restrictions may apply that
could, among other things, limit the amount of securities that a Fund could
purchase in the underwritings. The sub-advisor shall determine the amounts and
proportions of orders allocated to the sub-advisor or affiliate. The Board will
receive quarterly reports on these transactions.
The
Board has approved procedures that permit a Fund to effect a purchase or sale
transaction between the Fund and any other affiliated investment company or
between a Fund and affiliated persons of the Fund under limited circumstances
prescribed by SEC Rules. Any such transaction must be effected without any
payment other than a cash payment for the securities, for which a market
quotation is readily available, at the current market price; must be consistent
with the investment objective, investment strategy, and risk profile of the
Fund; and no brokerage commission or fee (except for customary transfer fees),
or other remuneration may be paid in connection with the transaction. The Board
will receive quarterly reports on these transactions.
The
Board has also approved procedures that permit a Fund’s sub-advisor(s) to place
portfolio trades with an affiliated broker under circumstances prescribed by SEC
Rules 17e-1 and 17a-10. The procedures require that total commissions, fees, or
other remuneration received or to be received by an affiliated broker must be
reasonable and fair compared to the commissions, fees, or other remuneration
received by other brokers in connection with comparable transactions involving
similar securities being purchased or sold on a securities exchange during a
comparable time period. The Board will receive quarterly reports on these
transactions.
Purchases
and sales of debt securities and money market instruments usually are principal
transactions; portfolio securities are normally purchased directly from the
issuer or from an underwriter or marketmakers for the securities. Such
transactions are usually conducted on a net basis with a Fund paying no
brokerage commissions. Purchases from underwriters include a commission or
concession paid by the issuer to the underwriter, and the purchases from dealers
serving as marketmakers include the spread between the bid and asked
prices.
The
following table shows the brokerage commissions paid during the periods
indicated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total
Brokerage Commissions Paid for Periods Ended October 31 |
Fund/Portfolio |
2023 |
| 2022 |
| 2021 |
|
California
Municipal |
$ |
772 |
|
| $ |
1,587 |
|
| $ |
801 |
| |
Core
Fixed Income |
1,702 |
|
| 1,516 |
|
| — |
| |
Core
Plus Bond |
88 |
|
| 9,048 |
|
| 15,956 |
| |
Diversified
Income |
153,698 |
|
| 547,346 |
|
| 1,637,794 |
| |
Diversified
International |
3,538,818 |
|
| 4,146,318 |
|
| 7,756,328 |
| |
Equity
Income |
1,644,750 |
|
| 1,806,331 |
|
| 1,399,777 |
| |
Global
Emerging Markets |
167,018 |
|
| 160,353 |
|
| 252,012 |
| |
Global
Real Estate Securities |
1,206,464 |
|
| 1,289,510 |
|
| 1,385,168 |
| |
High
Income |
23 |
|
| — |
|
| 23 |
| |
High
Yield |
— |
|
| — |
|
| 3,132 |
| |
Inflation
Protection |
49,403 |
|
| 24,931 |
|
| 7,576 |
| |
International
I |
150,543 |
|
| 138,673 |
|
| 149,981 |
| |
LargeCap
Growth I |
1,152,400 |
|
| 969,005 |
|
| 823,663 |
| |
LargeCap
S&P 500 Index |
117,105 |
|
| 131,460 |
|
| 199,065 |
| |
LargeCap
Value III |
847,153 |
|
| 993,907 |
|
| 954,086 |
| |
MidCap |
2,248,485 |
|
| 2,293,609 |
|
| 2,734,986 |
| |
MidCap
Growth |
409,799 |
|
| 474,068 |
|
| 257,783 |
| |
MidCap
Growth III |
333,127 |
|
| 276,555 |
|
| 231,154 |
| |
MidCap
S&P 400 Index |
49,991 |
|
| 77,050 |
|
| 39,848 |
| |
MidCap
Value I |
1,225,482 |
|
| 1,398,096 |
|
| 949,168 |
| |
Overseas |
2,178,421 |
|
| 2,161,059 |
|
| 1,825,373 |
| |
Principal
Capital Appreciation |
1,224,424 |
|
| 1,257,461 |
|
| 356,313 |
| |
Real
Estate Securities |
1,268,659 |
|
| 1,950,816 |
|
| 1,501,016 |
| |
SAM
Balanced |
46,400 |
|
| 181,918 |
|
| 105,330 |
| |
SAM
Conservative Balanced |
14,280 |
|
| 60,359 |
|
| 35,810 |
| |
SAM
Conservative Growth |
28,720 |
|
| 150,440 |
|
| 75,010 |
| |
SAM
Flexible Income |
22,740 |
|
| 207,037 |
|
| 11,390 |
| |
SAM
Strategic Growth |
22,620 |
|
| 79,019 |
|
| 18,910 |
| |
Short-Term
Income |
— |
|
| — |
|
| — |
| |
SmallCap |
594,044 |
|
| 522,311 |
|
| 855,323 |
| |
SmallCap
Growth I |
1,484,968 |
|
| 1,488,070 |
|
| 1,572,443 |
| |
SmallCap
S&P 600 Index |
148,439 |
|
| 81,994 |
|
| 49,801 |
| |
SmallCap
Value II |
1,308,934 |
|
| 1,169,210 |
|
| 1,365,112 |
| |
Tax-Exempt
Bond |
— |
|
| 8,664 |
|
| 4,111 |
| |
Primary
reasons for changes in brokerage commissions for those Funds with relatively
greater variations for the three years were changes in commission rates; changes
in Fund size; changes in market conditions; changes in money managers of certain
Funds; and implementation of investment strategies. In some cases, such events
required substantial portfolio restructurings, resulting in increased securities
transactions and brokerage commissions.
Brokerage
commissions from the portfolio transactions effected for the Funds were paid to
brokers affiliated with PGI or such Fund’s sub-advisors for the fiscal years
ended October 31 as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund |
Sub-Advisor
Employed by the Fund Complex |
Affiliated
Broker Receiving Commissions |
2023 Commissions
Paid to Affiliated Broker |
%
of Fund's Total Commissions |
%
of Dollar Amount of
Fund's Commissionable Transactions |
Diversified
Income |
| Principal
Financial Group |
SAMI
Brokerage LLC |
14,022 |
| 9.12 |
% |
1.48 |
% |
Total |
$ |
14,022 |
| 9.12 |
% |
1.48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund |
Sub-Advisor
Employed by the Fund Complex |
Affiliated
Broker Receiving Commissions |
2022 Commissions
Paid to Affiliated Broker |
%
of Fund's Total Commissions |
%
of Dollar Amount of
Fund's Commissionable Transactions |
Diversified
Income |
| Principal
Financial Group |
SAMI
Brokerage LLC |
10,719 |
| 1.96 |
% |
0.72 |
% |
Total |
$ |
10,719 |
| 1.96 |
% |
0.72 |
% |
MidCap
Growth III |
| Eagle
Asset Management, Inc. |
Raymond
James Financial Services |
8,250 |
| 2.98 |
% |
8.42 |
% |
Total |
$ |
8,250 |
| 2.98 |
% |
8.42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund |
Sub-Advisor
Employed by the Fund Complex |
Affiliated
Broker Receiving Commissions |
2021
Commissions Paid to Affiliated Broker |
%
of Fund's Total Commissions |
%
of Dollar Amount of
Fund's Commissionable Transactions |
Diversified
Income |
| Principal
Financial Group |
SAMI
Brokerage LLC |
13,294 |
| 0.81 |
% |
0.37 |
% |
Total |
$ |
13,294 |
| 0.81 |
% |
0.37 |
% |
Material
differences, if any, between the percentage of a Fund’s brokerage commissions
paid to a broker and the percentage of transactions effected through that broker
reflect the commission rates the sub-advisor has negotiated with the broker.
Commission rates a sub-advisor pays to brokers may vary and reflect such factors
as the trading volume placed with a broker, the type of security, the market in
which a security is traded and the trading volume of that security, the types of
services provided by the broker (i.e., execution services only or additional
research services), and the quality of a broker’s execution.
The
following table indicates the value of each Fund’s aggregate holdings, in
thousands, of the securities of its regular brokers or dealers for the fiscal
year ended October 31, 2023.
|
|
|
|
|
|
|
| |
Holdings
of Securities of Principal Funds, Inc. Regular Brokers and
Dealers |
Fund |
Broker
or Dealer |
Holdings
(in
thousands) |
Core
Fixed Income |
Bank
of America |
$ |
78,655 |
|
| Bank
of New York Mellon Corp/The |
88,671 |
| Citigroup
Inc |
80,411 |
| Goldman
Sachs Group Inc/The |
64,681 |
| Jefferies
Group LLC |
55,577 |
| JPMorgan
Chase & Co |
75,535 |
| Morgan
Stanley |
96,246 |
Core
Plus Bond |
Bank
of America |
8,555 |
| Bank
of New York Mellon Corp/The |
785 |
| Barclays
PLC |
2,400 |
| BNP
Paribas SA |
747 |
| Citigroup
Inc |
3,888 |
| Goldman
Sachs Group Inc/The |
4,461 |
| HSBC
Holdings PLC |
832 |
| JPMorgan
Chase & Co |
5,364 |
| Morgan
Stanley |
9,085 |
| UBS
Group AG |
1,407 |
|
|
|
|
|
|
|
| |
Holdings
of Securities of Principal Funds, Inc. Regular Brokers and
Dealers |
Fund |
Broker
or Dealer |
Holdings
(in
thousands) |
Diversified
Income |
Bank
of America |
$ |
26,960 |
|
| Bank
of New York Mellon Corp/The |
8,816 |
| Barclays
PLC |
2,984 |
| BNP
Paribas SA |
10,731 |
| Citigroup
Inc |
16,400 |
| Goldman
Sachs Group Inc/The |
16,412 |
| HSBC
Holdings PLC |
12,223 |
| Jefferies
Group LLC |
1,132 |
| JPMorgan
Chase & Co |
24,925 |
| Mizuho
Financial Group Inc |
6,102 |
| Morgan
Stanley |
15,007 |
| Stifel
Financial Corp |
35 |
| UBS
Group AG |
11,560 |
Diversified
International |
HSBC
Holdings PLC |
36,334 |
Equity
Income |
Bank
of America |
135,169 |
| JPMorgan
Chase & Co |
250,246 |
| Morgan
Stanley |
199,848 |
Finisterre
Emerging Markets Total Return Bond |
HSBC
Holdings PLC |
5,536 |
High
Yield |
Barclays
PLC |
9,515 |
| JPMorgan
Chase & Co |
10,844 |
Inflation
Protection |
Citigroup
Inc |
2,157 |
| Goldman
Sachs Group Inc/The |
2,146 |
| JPMorgan
Chase & Co |
2,164 |
| Morgan
Stanley |
2,158 |
International
I |
HSBC
Holdings PLC |
2,802 |
|
| UBS
Group AG |
2,749 |
LargeCap
S&P 500 Index |
Bank
of America |
30,921 |
| Bank
of New York Mellon Corp/The |
5,620 |
| Citigroup
Inc |
12,913 |
| Goldman
Sachs Group Inc/The |
16,996 |
| JPMorgan
Chase & Co |
68,621 |
| Morgan
Stanley |
15,343 |
LargeCap
Value III |
Bank
of America |
35,732 |
| Bank
of New York Mellon Corp/The |
618 |
| Citigroup
Inc |
1,429 |
| Goldman
Sachs Group Inc/The |
28,417 |
| Jefferies
Group LLC |
114 |
| JPMorgan
Chase & Co |
35,709 |
| Morgan
Stanley |
1,584 |
| Stifel
Financial Corp |
109 |
MidCap
S&P 400 Index |
Jefferies
Group LLC |
3,134 |
| Stifel
Financial Corp |
3,280 |
MidCap
Value I |
Bank
of New York Mellon Corp/The |
36,429 |
| Jefferies
Group LLC |
344 |
| Stifel
Financial Corp |
329 |
Money
Market |
Barclays
PLC |
23,866 |
| Citigroup
Inc |
5,675 |
| Goldman
Sachs Group Inc/The |
22,383 |
| HSBC
Holdings PLC |
5,469 |
|
|
|
|
|
|
|
| |
Holdings
of Securities of Principal Funds, Inc. Regular Brokers and
Dealers |
Fund |
Broker
or Dealer |
Holdings
(in
thousands) |
Overseas
|
Barclays
PLC |
$ |
24,434 |
|
| BNP
Paribas SA |
7,662 |
| HSBC
Holdings PLC |
30,259 |
| Mizuho
Financial Group Inc |
1,341 |
| UBS
Group AG |
7,424 |
Principal
Capital Appreciation |
JPMorgan
Chase & Co |
77,292 |
| Morgan
Stanley |
29,598 |
Short-Term
Income |
Bank
of America |
69,165 |
| Barclays
PLC |
13,471 |
| BNP
Paribas SA |
8,032 |
| Citigroup
Inc |
37,584 |
| Goldman
Sachs Group Inc/The |
43,919 |
| HSBC
Holdings PLC |
8,917 |
| JPMorgan
Chase & Co |
36,826 |
| Morgan
Stanley |
38,135 |
| UBS
Group AG |
29,800 |
SmallCap
|
Stifel
Financial Corp |
8,043 |
SmallCap
Growth I |
Piper
Sandler Cos |
197 |
| Stifel
Financial Corp |
7,966 |
SmallCap
S&P 600 Index |
Piper
Sandler Cos |
2,305 |
SmallCap
Value II |
Piper
Sandler Cos |
62 |
Allocation
of Trades
By
the Manager (PGI).
PGI has its own trading platform and personnel that perform trade-related
functions. Where applicable, PGI trades on behalf of its own clients. Such
transactions are executed in accordance with PGI’s trading policies and
procedures, including, but not limited to, trade allocations and order
aggregation, purchase of new issues, and directed brokerage. PGI acts as
discretionary investment advisor for a variety of individual accounts, ERISA
accounts, registered investment companies, insurance company separate accounts,
and public employee retirement plans and places orders to trade portfolio
securities for each of these accounts. Managing multiple accounts may give rise
to potential conflicts of interest including, for example, conflicts among
investment strategies and conflicts in the allocation of investment
opportunities. PGI has adopted and implemented policies and procedures that it
believes address the potential conflicts associated with managing accounts for
multiple clients and are designed to ensure that all clients are treated fairly
and equitably. These procedures include allocation policies and procedures and
internal review processes.
If,
in carrying out the investment objectives of its respective clients, occasions
arise in which PGI deems it advisable to purchase or sell the same equity
securities for two or more client accounts at the same or approximately the same
time, PGI may submit the orders to purchase or sell to a broker/dealer for
execution on an aggregate or “bunched” basis. PGI will not aggregate orders
unless it believes that aggregation is consistent with (1) its duty to seek best
execution and (2) the terms of its investment advisory agreements. In
distributing the securities purchased or the proceeds of sale to the client
accounts participating in a bunched trade, no advisory account will be favored
over any other account and each account that participates in an aggregated order
will participate at the average share price for all transactions of PGI relating
to that aggregated order on a given business day, with all transaction costs
relating to that aggregated order shared on a pro rata basis.
Because
of PGI’s role as investment advisor to each of the Funds and discretionary
advisor to funds of funds and some underlying funds, conflicts may arise in
connection with the services PGI provides to funds of funds with respect to
asset class and target weights for each asset class and investments made in
underlying funds. PGI also provides advisory services to funds that have
multiple investment advisors (“Multi-Managed Funds”). These services include
determining the portion of a Multi-Managed Fund’s portfolio to be allocated to
an advisor. Conflicts may arise in connection with the services PGI provides to
the funds of funds that it manages, in connection with the services PGI provides
to other funds of funds and Multi-Managed Funds, for the following
reasons:
•PGI
serves as the investment advisor to the underlying funds in which the funds of
funds invest, sometimes as the discretionary advisor, and an affiliated
investment advisor may serve as sub-advisor to the funds in which a fund of
funds may invest. This raises a potential conflict because PGI’s or an
affiliated company’s profit margin may vary depending upon the underlying fund
in which the funds of funds invest.
•PGI
or an affiliated person may serve as investment advisor to a portion of a
Multi-Managed Fund. In addition, PGI might recommend that an affiliated person
serve as sub-advisor to a portion of a Multi-Managed Fund. This raises a
potential conflict because PGI’s or an affiliated investment advisor’s profit
margin may vary depending on the extent to which a Multi-Managed Fund’s assets
are managed by PGI or allocated to an affiliated advisor.
•A
sub-advisor may determine that the asset class PFI has hired it to manage (for
example, small capitalization growth stocks) can be managed effectively only by
limiting the amount of money devoted to the purchase of securities in the asset
class. In such a case, a sub-advisor may impose a limit on the amount of money
PFI may place with the sub-advisor for management. When a sub-advisor for two or
more PFI Funds imposes such a limit, PGI and/or the sub-advisor may need to
determine which Fund will be required to limit its investment in the asset class
and the degree to which the Fund will be so limited. PGI and the sub-advisor may
face a conflict of interest in making its determination.
PGI
implements the following in an effort to limit the appearance of conflicts of
interest and the opportunity for events that could trigger an actual conflict of
interest:
•PGI
implements a process for selecting underlying funds that emphasizes the
selection of funds within the Principal Funds Complex that are determined to be
consistent with the fund of fund’s objective and principal investment
strategies. However, PGI will select an unaffiliated underlying fund managed by
an unaffiliated sub-advisor when deemed necessary or appropriate based upon a
consideration of the Fund’s objective and investment strategies and available
expertise and resources within the Principal organization.
•PGI
uses a process to select investment advisors that emphasizes the selection of
PGI or Principal-affiliated sub-advisors that are determined to be qualified
under PGI’s due diligence process. However, PGI will select an unaffiliated
sub-advisor to manage all or a portion of a Fund’s portfolio when deemed
necessary or appropriate based upon a consideration of the Fund’s objective and
investment strategies and available expertise and resources within the Principal
organization.
•PGI
provides ongoing oversight of the Funds’ investments to monitor adherence to
their investment program.
By
the Sub-Advisors. The
portfolio managers of each sub-advisor manage a number of accounts other than
the Funds’ portfolios, including in some instances proprietary or personal
accounts. Managing multiple accounts may give rise to potential conflicts of
interest, including, for example, conflicts among investment strategies,
allocating time and attention to account management, allocation of investment
opportunities, knowledge of and timing of fund trades, selection of brokers and
dealers, and compensation for the account. Each has adopted and implemented
policies and procedures that it believes address the potential conflicts
associated with managing accounts for multiple clients and personal accounts and
are designed to ensure that all clients and client accounts are treated fairly
and equitably. These procedures include allocation policies and procedures,
personal trading policies and procedures, internal review processes, and, in
some cases, review by independent third parties.
Investments
the sub-advisor deems appropriate for a Fund’s portfolio may also be deemed
appropriate by it for other accounts. Therefore, the same security may be
purchased or sold at or about the same time for both the Fund’s portfolio and
other accounts. In such circumstances, the sub-advisor may determine that orders
for the purchase or sale of the same security for the Fund’s portfolio and one
or more other accounts should be combined. In this event, the transactions will
be priced and allocated in a manner deemed by the sub-advisor to be equitable
and in the best interests of the Fund’s portfolio and such other accounts. While
in some instances combined orders could adversely affect the price or volume of
a security, the Fund believes that its participation in such transactions on
balance will produce better overall results for the Fund.
PURCHASE
AND REDEMPTION OF SHARES
Purchase
of Shares
Participating
insurance companies and certain other designated organizations are authorized to
receive purchase orders on the Funds’ behalf, and those organizations are
authorized to designate their agents and affiliates as intermediaries to receive
purchase orders. Purchase orders are deemed received by a Fund when authorized
organizations, their agents, or affiliates receive the order. The Funds are not
responsible for the failure of any designated organization or its agents or
affiliates to carry out its obligations to its customers. Class A shares of the
Funds are purchased at their public offering price, and other share classes of
the Funds are purchased at the net asset value (“NAV”) per share, as determined
at the close of the regular trading session of the NYSE next occurring after a
purchase order is received and accepted by an authorized agent of a Fund. In
order to receive a day’s price, an order must be received in good order by the
close of the regular trading session of the NYSE as described below in “Pricing
of Fund Shares.”
All
income dividends and capital gains distributions, if any, on a Fund’s
Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 shares are
reinvested automatically in additional shares of the same class of the same
Fund. Dividends and capital gains distributions, if any, on a Fund’s Classes A,
C, and J shares are reinvested automatically in additional shares of the same
Class of shares of the same Fund unless the shareholder elects to take dividends
in cash. The reinvestment will be made at the NAV determined on the first
business day following the record date.
The
Fund, at its discretion, may permit the purchase of shares using securities as
consideration (a purchase in-kind).
MidCap
Fund
For
retail investors (i.e., non-employer sponsored retirement plan investors),
effective as of the close of the NYSE on June 14, 2013, and for
employer-sponsored retirement plan investors, effective as of the close of the
NYSE on August 15, 2013, the MidCap Fund (the “Fund”) is no longer
available for purchases from new investors except in limited circumstances, such
as the following:
•Shareholders,
including those in omnibus accounts, who own shares of the Fund as of June 14,
2013 (for retail investors, i.e., non-employer sponsored retirement plan
investors) or August 15, 2013 (for employer-sponsored retirement plan
investors), may continue to make purchases, exchanges, and dividend or capital
gains reinvestment in existing accounts.
•Registered
Investment Advisor (RIA) and bank trust firms that have an investment allocation
to the MidCap Strategy (i.e., investments in the same strategy used in
collective investment trust, separately managed accounts, individually managed
accounts, or insurance separate accounts) in a fee-based, wrap, or advisory
account, may continue to add new clients, purchase shares, and exchange into the
Fund. The Fund will not be available to new RIA and bank trust
firms.
•Shareholders
through accounts at private banks may continue to purchase shares and exchange
into the Fund. Private banks that have an investment allocation to the MidCap
Strategy may add new clients to the Fund. The Fund will not be available to
private bank or private bank platforms not already investing in the MidCap
Strategy.
•Shareholders
in broker/dealer wrap or fee-based programs that have an investment allocation
to the Fund may continue to purchase shares and exchange into the Fund. Existing
broker/dealer wrap or fee-based programs may add new participants.
•Shareholders
in certain types of retirement plans (including 401(k)s, SEPs, SIMPLEs, 403(b)s,
etc.) may continue to purchase shares and exchange into the Fund. New
participants in these plans may elect to purchase shares of the
Fund.
•Shareholders
within brokerage accounts may continue to purchase shares of the Fund; however,
new brokerage accounts will not be permitted to begin investing in the Fund
after June 14, 2013.
•529
plans that include the Fund within their investment options may continue to
purchase shares and exchange into the Fund.
•Investors
who have a direct investment in the MidCap Strategy may, subject to the approval
of the Distributor, purchase shares in the Fund.
•Shareholders
that invest through accounts with Principal Securities, Inc.
At
the sole discretion of the Distributor, the Fund may permit certain types of
investors to open new accounts, impose further restrictions on purchases, or
reject any purchase orders, all without prior notice.
Money
Market Fund
Effective
as of the close of the NYSE January 18, 2018, Class C and Institutional Class
Shares of the Fund are no longer available for purchases or for exchanges from
other series of the Principal Funds, Inc.
Class
R-1 Shares
Effective
January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase
from new retirement plans, except in limited circumstances. However, if a
retirement plan currently offers Class R-1 shares, such plan will be allowed to
continue to invest in this share class through Funds it currently offers in its
plans or Funds it adds to its plans.
Abandoned
or Orphaned Accounts
In
order to invest in shares of Principal Funds, a shareholder’s account must have
a registered broker-dealer on file with us when the account is established. If
an active account does not have a registered broker-dealer on file, we consider
the account to be an “abandoned or orphaned account”. If we determine in our
discretion that an account is abandoned or orphaned, we will take the following
actions:
•Notify
the shareholder in writing as to the account’s status and request that the
account(s) be moved to another registered broker-dealer;
•Remove
the broker/dealer from the account. If the shareholder does not request
another registered broker/dealer to be added to the account, Principal
Shareholder Services, Inc. (“PSS”), the Funds’ Transfer Agent, will hold the
accounts until another registered broker/dealer is added to the account.
PSS is not a broker-dealer and does not offer investment advice;
and
•No
initial sales charge will apply to purchases of Fund shares while PSS is holding
the account.
Sales
of Shares
Payment
for shares tendered for redemption is ordinarily made in cash. The Fund may
determine, however, that it would be detrimental to the remaining shareholders
to make payment of a redemption order wholly or partly in cash. The Fund may,
therefore, pay the redemption proceeds in whole or in part by a distribution “in
kind” of securities from the Fund’s portfolio in lieu of cash. If the Fund pays
the redemption proceeds in kind, the redeeming shareholder might incur brokerage
or other costs in selling the securities for cash. The Fund will value
securities used to pay redemptions in kind using the same method the Fund uses
to value its portfolio securities as described below in “Pricing of Fund
Shares.”
The
right to require the Funds to redeem their shares may be suspended, or the date
of payment may be postponed, whenever: 1) trading on the NYSE is restricted, as
determined by the SEC, or the NYSE is closed except for holidays and weekends;
2) the SEC permits such suspension and so orders; or 3) an emergency exists as
determined by the SEC so that disposal of securities or determination of NAV is
not reasonably practicable.
Certain
designated organizations are authorized to receive sell orders on the Fund’s
behalf and those organizations are authorized to designate their agents and
affiliates as intermediaries to receive redemption orders. Redemption orders are
deemed received by the Fund when authorized organizations, their agents, or
affiliates receive the order. The Fund is not responsible for the failure of any
designated organization or its agents or affiliates to carry out its obligations
to its customers.
Exchanges
Between Classes of Shares
Through
your financial intermediary, in certain limited circumstances, you may become
eligible to exchange shares of a Fund you own for shares of a different class of
the same Fund, if you become eligible to purchase shares of such different class
of the same Fund through your account with your financial intermediary. The
following shows the permitted exchanges, subject to the conditions described
herein:
|
|
|
|
| |
Exchange
From Class |
Exchange
To Class |
A |
Institutional |
C |
A,
Institutional |
Institutional |
A,
C, R-6 |
R-6 |
Institutional |
Such
same-Fund exchanges between share classes are permitted, subject to conditions
including, but not limited to, the following:
•You
or your retirement plan sponsor must be eligible to purchase shares of the class
into which the exchange is to occur;
•Your
financial intermediary or the retirement plan sponsor's financial intermediary
must have an agreement with the underwriter or transfer agent of Principal Funds
allowing the purchase of such share class for you;
•The
Fund must offer shares of such class of such Fund in your state or the state of
the retirement plan sponsor;
•In
order to exchange into Class A shares, you must be eligible to: (i) purchase
Class A shares with no initial sales charge; or (ii) exchange into Class A
shares through your financial intermediary with no initial sales
charge;
•Depending
on the circumstances, for exchanges from Classes A and C, shares there may be a
contingent deferred sales charge in connection with the exchange;
•Any
such exchange must be requested by your financial intermediary or retirement
plan sponsor (with approval by the Distributor) and, except as otherwise
approved by the Distributor, must result from either (i) the financial
intermediary seeking to have shares of the Funds on their platform held in a
particular share class, (ii) the share class becoming available to your
financial intermediary or Financial Professional through a new relationship, or
(iii) your retirement plan sponsor electing to have shares of the Funds offered
as part of the plan investment options held in a particular share class;
and
•The
Government Money Market Fund does not permit exchanges.
If,
after purchasing Institutional Class shares, you become ineligible to invest in
Institutional Class shares, you may be permitted to exchange from Institutional
Class shares into other share classes issued by the same Fund if your financial
intermediary determines you qualify for such an exchange.
You
should check with your financial intermediary to see if the exchange you wish to
complete will satisfy the conditions. Your ability to exchange between share
classes of the same Fund may be limited by the operational limitations of your
financial intermediary. Please consult your Financial Professional for more
information.
While
such an exchange may not be considered a taxable event for income tax purposes,
you should consult with your tax advisor regarding possible federal, state,
local, and foreign tax consequences.
Money
Market Fund - Investor Transaction Considerations Regarding Liquidity
Fees*
•If
the Money Market Fund received, but has not yet processed, a purchase order
prior to notifying investors of the imposition of liquidity fees, such
purchase order will be considered a valid purchase and will be processed
normally.
•If
a liquidity fee is imposed during the day, an intermediary that receives both
purchase and redemption orders from a single underlying accountholder will
not apply the liquidity fee to the net amount of redemptions made by that
same accountholder, because the purchase order was received before the time
the liquidity fee was implemented.
•If
a redemption request was verifiably submitted to the Money Market Fund’s agent
before a liquidity fee is imposed but is received by the Money Market Fund after
a liquidity fee is imposed, the Fund will pay the proceeds of the
redemption request and will not impose a liquidity fee on the
redemption request.
•A
checkwriting redemption request that is verifiably submitted to the Money Market
Fund’s agent before a liquidity fee is imposed will be considered a valid
redemption and will be processed normally.
*
This does not apply to the Government Money Market
Fund.
GOVERNMENT
MONEY MARKET AND MONEY MARKET FUNDS MATERIAL EVENTS
Imposition
of Liquidity Fees
Since
October 14, 2016, there has not been any occasion on which the Money Market Fund
has instituted a liquidity fee.
Financial
Support Provided to the Government Money Market Fund or Money Market
Fund
Since
October 14, 2016 (or, for the Government Money Market Fund, since inception),
there has not been any occasion on which the Government Money Market Fund or
Money Market Fund has: (i) been provided financial support from an affiliated
person, promoter, or principal underwriter of the Fund, or an affiliated person
of such a person, and/or (ii) participated in one or more mergers with another
investment company.
Form
N-CR
If
applicable, the Fund was required to disclose additional information about this
event (or these events, as appropriate) on Form N-CR and to file this form with
the SEC. Any Form N-CR filing submitted by the Fund is available on the EDGAR
Database on the SEC’s Internet site at www.sec.gov.
PRICING
OF FUND SHARES
Each
Fund’s shares are bought and sold at the current net asset value (“NAV”) per
share. The
NAV for each class of each Fund (other than the Government Money Market Fund) is
calculated each day the New York Stock Exchange (“NYSE”) is open, as of the
close of business of the NYSE (normally 3:00 p.m. Central Time). The NAV for
each class of the Government Money Market Fund is calculated each day the New
York Stock Exchange (“NYSE”) is open, normally at 4:00 p.m. Central Time.
The
NAV of Fund shares is not determined on days the NYSE is closed (generally, New
Year’s Day; Martin Luther King, Jr. Day; Washington’s Birthday/Presidents’ Day;
Good Friday; Memorial Day; Juneteenth, Independence Day; Labor Day; Thanksgiving
Day; and Christmas). When an order to buy or sell shares is received, the share
price used to fill the order is the next price calculated after the order is
received in proper form.
The
Funds will not treat an intraday unscheduled disruption in NYSE trading as a
closure of the NYSE and will price shares as of 3:00 p.m. Central Time or, in
the case of the Government Money Market Fund, 4:00 p.m. Central Time, if the
particular disruption directly affects only the NYSE.
For
all Funds except the Government Money Market and Money Market Funds, the share
price is calculated by:
• taking
the current market value of the total assets of the Fund,
•subtracting
liabilities of the Fund,
•dividing
the remainder proportionately into the classes of the Fund,
•subtracting
the liability of each class, and
•dividing
the remainder by the total number of shares owned in that class.
In
determining NAV, securities listed on an Exchange, the Nasdaq National Market,
and any foreign markets within the Western Hemisphere are valued at the closing
prices on such markets, or if such price is lacking for the trading period
immediately preceding the time of determination, such securities are valued at
their current bid price.
Municipal
securities held by the Funds are traded primarily in the over-the-counter
market. Valuations of such securities are furnished by one or more pricing
services employed by the Funds and are based upon appraisals obtained by a
pricing service, in reliance upon information concerning market transactions and
quotations from recognized municipal securities dealers.
Other
securities that are traded on the over-the-counter market are valued at their
closing bid prices. Each Fund will determine the market value of individual
securities held by it, by using prices provided by one or more professional
pricing services that may provide market prices to other funds, or, as needed,
by obtaining market quotations from independent broker-dealers. Debt securities
with remaining maturities of sixty days or less for which market quotations and
information furnished by a third-party pricing service are not readily available
will be valued at amortized cost, which approximates current value. Securities
for which quotations are not readily available, and other assets, are valued at
fair value determined in good faith under procedures established by and under
the supervision of the Board.
A
Fund’s securities may be traded on foreign securities markets that close each
day prior to the time the NYSE closes. In addition, foreign securities trading
generally or in a particular country or countries may not take place on all
business days in New York. The Fund has adopted policies and procedures to “fair
value” some or all securities held by a Fund. These fair valuation procedures
are intended to discourage shareholders from investing in the Fund for the
purpose of engaging in market timing or arbitrage transactions. The values of
foreign securities used in computing share price are determined at the time the
foreign market closes. Foreign securities and currencies are converted to U.S.
dollars using the exchange rate in effect at the close of the NYSE.
Occasionally, events affecting the value of foreign securities occur when the
foreign market is closed and the NYSE is open. The NAV of a Fund investing in
foreign securities may change on days when shareholders are unable to purchase
or redeem shares. If the Manager believes that the market value is materially
affected, the share price will be calculated using the policy adopted by the
Fund.
Certain
securities issued by companies in emerging markets may have more than one quoted
valuation at any point in time, sometimes referred to as a “local” price and a
“premium” price. The premium price is often a negotiated price that may not
consistently represent a price at which a specific transaction can be effected.
It is the policy of the Funds to value such securities at prices at which it is
expected those shares may be sold, and PGI is authorized to make such
determinations subject to the oversight of the Board as may from time to time be
necessary.
Appendix
B provides a specimen price-make-up sheet showing how the Fund calculates the
total offering price per share.
Government
Money Market and Money Market Funds (the "Money Market Funds")
The
share price of each class of shares of the Money Market Fund is determined at
the same time and on the same days as the Funds described above. The
share price of each class of shares of the Government Money Market Fund is
determined normally at 4:00 p.m. Central Time and on the same days as the Funds
described above.
All securities held by the Money Market Funds are valued on an amortized cost
basis. Under this method of valuation, a security is initially valued at cost;
thereafter, the Money Market Funds assume a constant proportionate amortization
in value until maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the security. While this
method provides certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the price that
would be received upon sale of the security.
Use
of the amortized cost valuation method by the Money Market Funds requires the
Funds to maintain a dollar weighted average maturity of 60 days or less and to
purchase only obligations that have remaining maturities of 397 days or less,
with certain exceptions permitted by applicable regulations, or have a variable
or floating rate of interest. In addition, the Funds invest only in obligations
determined by the Board to be of high quality with minimal credit
risks.
The
Board has established procedures for the Money Market Funds designed to
stabilize, to the extent reasonably possible, the Funds’ price per share as
computed for the purpose of sales and redemptions at $1.00. Such procedures
include a directive to PGI to test price the portfolio or specific securities on
a weekly basis using a mark-to-market method of valuation to determine possible
deviations in the net asset value from $1.00 per share. If such deviation
exceeds ½ of 1%, the Board promptly considers what action, if any, will be
initiated. In the event the Board determines that a deviation exists that may
result in material dilution or other unfair results to shareholders, it takes
such corrective action as it regards as appropriate, including: sale of
portfolio instruments prior to maturity; the withholding of dividends;
redemptions of shares in kind; the establishment of a net asset value per share
based upon available market quotations; or splitting, combining, or otherwise
recapitalizing outstanding shares. The Funds may also reduce the number of
shares outstanding by redeeming proportionately from shareholders, without the
payment of any monetary compensation, such number of full and fractional shares
as is necessary to maintain the net asset value at $1.00 per share.
TAX
CONSIDERATIONS
Qualification
as a Regulated Investment Company
Each
Fund intends to qualify annually to be treated as a regulated investment company
(“RIC”) under the Internal Revenue Code of 1986, as amended (the “IRC”), by
satisfying certain requirements prescribed by Subchapter M of the IRC. To
qualify as a RIC, a Fund must invest in assets that produce types of income
specified in the IRC (“Qualifying Income”). Whether the income from derivatives,
swaps, commodity-linked derivatives, and other commodity/natural
resource-related securities is Qualifying Income is unclear under current law.
Accordingly, a Fund’s ability to invest in certain derivatives, swaps,
commodity-linked derivatives, and other commodity/natural resource-related
securities may be restricted. Further, if a Fund does invest in these types of
securities and the income is not determined to be Qualifying Income, it may
cause the Fund to fail to qualify as a RIC under the IRC for a given year. In
addition, a Fund must satisfy certain diversification tests under the IRC to
qualify as a RIC. If a Fund fails to qualify as a RIC, it will be liable for
taxes, significantly reducing its distributions to shareholders and eliminating
shareholders’ ability to treat distributions (as long- or short-term capital
gains or qualifying dividends) of the Fund in the manner they were received by
the Fund.
Futures
Contracts and Options
As
previously discussed, some of the Funds invest in futures contracts or options
thereon, index options, or options traded on qualified exchanges. For federal
income tax purposes, capital gains and losses on futures contracts or options
thereon, index options, or options traded on qualified exchanges are generally
treated as 60% long-term and 40% short-term. In addition, the Funds must
recognize any unrealized gains and losses on such positions held at the end of
the fiscal year. A Fund may elect out of such tax treatment, however, for a
futures or options position that is part of an “identified mixed straddle” such
as a put option purchased with respect to a portfolio security. Gains and losses
on futures and options included in an identified mixed straddle are considered
100% short-term, and unrealized gains or losses on such positions are not
realized at year-end. The straddle provisions of the IRC may require the
deferral of realized losses to the extent that a Fund has unrealized gains in
certain offsetting positions at the end of the fiscal year. The IRC may also
require recharacterization of all or a part of losses on certain offsetting
positions from short-term to long-term, as well as adjustment of the holding
periods of straddle positions.
International
Funds
Some
foreign securities purchased by the Funds may be subject to foreign withholding
taxes that could reduce the yield on such securities. The amount of such foreign
taxes is expected to be insignificant. Shareholders of the Funds that invest in
foreign securities may be entitled to claim a credit or deduction with respect
to foreign taxes. The Funds may from year to year make an election to pass
through such taxes to shareholders. If such election is not made, any foreign
taxes paid or accrued will represent an expense to each affected Fund that will
reduce its investment company taxable income. Certain Funds may purchase
securities of certain foreign corporations considered to be passive foreign
investment companies by the IRS. In order to avoid taxes and interest that must
be paid by the Funds if these instruments appreciate in value, the Funds may
make various elections permitted by the tax laws. However, these elections could
require that the Funds recognize additional taxable income, which in turn must
be distributed. In addition, the Fund’s investments in foreign securities or
foreign currencies may increase or accelerate the Fund’s recognition of ordinary
income and may affect the timing or amount of the Fund’s
distributions.
Under
the Foreign Account Tax Compliance Act (“FATCA”), a Fund may be required to
withhold a 30% tax on (a) dividends paid by the Fund, and (b) certain capital
gain distributions and/or the proceeds arising from the sale of Fund shares paid
by the Fund after December 31, 2018, to certain foreign entities, referred to as
foreign financial institutions or non-financial foreign entities, that fail to
comply (or be deemed compliant) with extensive new reporting and withholding
requirements designed to inform the U.S. Department of the Treasury of
U.S.-owned foreign investment accounts. The IRS recently issued proposed
regulations indicating its intent to eliminate the 30% withholding tax on gross
proceeds. A Fund may disclose the information that it receives from its
shareholders to the IRS, non-U.S. taxing authorities or other parties as
necessary to comply with FATCA. Withholding also may be required if a foreign
entity that is a shareholder of a Fund fails to provide the Fund with
appropriate certifications or other documentation concerning its status under
FATCA.
Special
Tax Considerations for the California Municipal and Tax-Exempt Bond Funds
(collectively the “Municipal Funds” or singly the “Fund”)
The
Municipal Funds also intend to qualify to pay “exempt-interest dividends” to its
shareholders. An exempt-interest dividend is that part of dividend distributions
made by the Fund that consist of interest received by that Fund on tax-exempt
municipal obligations. Shareholders incur no federal income taxes on
exempt-interest dividends. However, these exempt-interest dividends may be
taxable under state or local law. Exempt-interest dividends that derive from
certain private activity bonds must be included by individuals as a preference
item in determining whether they are subject to the alternative minimum tax. The
Fund may also pay ordinary income dividends and distribute capital gains from
time to time. Ordinary income dividends and distributions of capital gains, if
any, are taxable for federal purposes.
If
a shareholder receives an exempt-interest dividend with respect to shares of the
Fund held for six months or less, then any loss on the sale or exchange of such
shares, to the extent of the amount of such dividend, is disallowed. If a
shareholder receives a capital gain dividend with respect to shares held for six
months or less, then any loss on the sale or exchange of such shares is treated
as a long-term capital loss to the extent the loss exceeds any exempt-interest
dividend received with respect to such shares, and is disallowed to the extent
of such exempt-interest dividend.
Interest
on indebtedness incurred or continued by a shareholder to purchase or carry
shares of this Fund is not deductible. Furthermore, entities or persons who are
“substantial users” (or related persons) under Section 147(a) of the IRC of
facilities financed by private activity bonds should consult their tax advisors
before purchasing shares of the Fund.
From
time to time, proposals have been introduced before Congress for the purpose of
restricting or eliminating the federal income tax exemption for interest on
municipal obligations. If legislation is enacted that eliminates or
significantly reduces the availability of municipal obligations, it could
adversely affect the ability of the Fund to continue to pursue its investment
objective and policies. In such event, the Fund would reevaluate its investment
objective and policies.
PORTFOLIO
HOLDINGS DISCLOSURE
The
portfolio holdings of any Fund that is a fund of funds are shares of underlying
mutual funds; holdings of any fund of funds may be made available upon request.
In addition, the Funds may publish month-end portfolio holdings information for
each Fund’s portfolio on the www.PrincipalAM.com website on the thirteenth
business day of the following month. The Funds may also occasionally publish
information on the websites relating to specific events, such as the impact of a
natural disaster, corporate debt default, or similar events on portfolio
holdings. The Funds may also occasionally publish information on the websites
concerning the removal, addition, or change in weightings of underlying funds in
which the funds of funds invest. The Government Money Market and Money Market
Funds also publish on the website www.principal.com, within five business days
after the end of each month, certain information required to be made publicly
available by SEC rule. It is the Funds’ policy to disclose only public
information regarding portfolio holdings (i.e., information published on the
websites or filed with the SEC), except as described below.
Non-Specific
Information. Under
the Portfolio Holdings Disclosure Policy, the Funds may distribute non-specific
information about the Funds and/or summary information about the Funds as
requested. Such information will not identify any specific portfolio holding,
but may reflect, among other things, the quality, character, or sector
distribution of a Fund’s holdings. This information may be made available at any
time (or without delay).
Policy.
The
Funds and PGI have adopted a policy of disclosing non-public portfolio holdings
information to third parties only to the extent required by federal law, and to
the following third parties, so long as such third party has agreed, or is
legally obligated, to maintain the confidentiality of the information and to
refrain from using such information to engage in securities
transactions:
1)Daily
to the Funds’ portfolio pricing services, Bloomberg LP, ICE Data Services, J.P.
Morgan PricingDirect, Inc., and IHS Markit Partners, to obtain prices for
portfolio securities;
2)Upon
proper request to government regulatory agencies or to self-regulatory
organizations;
3)As
needed to Ernst & Young LLP, the independent registered public accounting
firm, in connection with the performance of the services provided by Ernst &
Young LLP to the Funds;
4)To
the sub-advisors’ proxy service providers (Broadridge Financial Solutions, LLC,
Glass Lewis & Co., and Institutional Shareholder Services (ISS)) to
facilitate voting of proxies;
5)To
the Funds’ custodian, The Bank of New York Mellon, in connection with the
custodial services it provides to the Funds; and
6)Kessler,
Topaz,
Meltzer
&
Check,
LLP,
in
connection
with
legal
services
it
provides
to
the
Funds.
The
Funds are also permitted to enter into arrangements to disclose portfolio
holdings to other third parties in connection with the performance of a
legitimate business purpose if such third party agrees in writing to maintain
the confidentiality of the information prior to the information being disclosed.
Any such written agreement must be approved by an officer of the Funds, PGI, or
the Fund’s sub-advisor. Approval must be based on a reasonable belief that
disclosure to such other third party is in the best interests of the Fund’s
shareholders. If a conflict of interest is identified in connection with
disclosure to any such third party, the Fund’s or PGI’s Chief Compliance Officer
(“CCO”) must approve such disclosure, in writing, before it occurs. The Funds
currently have disclosure agreements with the following:
|
|
|
|
|
|
|
| |
Abacus
Group LLC |
Clearpar
(Markit) |
LiquidNet |
Abel
Noser |
Confluence
Technologies |
Loomis,
Sayles & Company, LP |
ACA
Compliance Alpha |
Deutsche
Bank |
Markit
WSO Services |
ACA
Market Abuse Surveillance Module |
DTCC
OASYS |
Microsoft
Azure |
Accenture |
Dynamo
Software |
Morgan
Stanley |
Advent
Axys |
Eagle |
Morningstar,
Inc. |
Advent
APX |
Eagle
Investment Systems Corp. |
MSCI |
Advent
Geneva |
Electra |
MSCI
ESG Risk Metrics |
Allvue
Systems |
Electra
Information Systems |
MSCI
- Risk Metrics |
Ashland
Partners |
Essentia
Analytics |
Natixis
Investment Managers |
Askia,
LLC |
Everest
(Allvue Systems) |
Northern
Trust |
Assette |
FactSet |
Northern
Trust Integrated Trading Solutions |
Bank
of America |
FactSet
Research Systems Inc. |
Omgeo
LLC |
Barra |
Financial
Recovery Technologies (FRT) |
PORTIA
(SS&C Technologies) |
BlackRock
Aladdin |
Financial
Tracking Technologies LLC |
Qontigo
(Axioma Risk System) |
BlackRock
Institutional Trust Company, N.A. |
FIS
Global Asset Management |
Russell
Investments Implementation |
Bloomberg
AIM |
FIS
PTA |
Services,
LLC |
Bloomberg
LP |
Global
Trading Analytics |
S3 |
Bloomberg
Port |
Goldman
Sachs |
SEI
Global Services, Inc. |
Bloomberg
Professional Services |
Gresham
Technologies |
SEI
Investments Co |
BNY
Mellon |
ICE
Data Pricing & Reference Data |
SS&C
Advent |
Broadridge
Business Process Outsourcing |
ICE
Liquidity |
SS&C
(Evare) |
Solutions,
LLC |
IHS
Markit LTD |
SS&C
Eze |
Broadridge
Financial Solutions Inc. / |
INDATA |
SS&C
Vision FI |
Proxy
Edge |
Indus
Valley Partners (IVP) |
State
Street Bank & Trust |
Brown
Brothers Harriman |
InvestCloud
Inc |
SWIFT |
Charles
River |
Investment
Company Institute (ICI) |
TSI
(Virtus) |
Charles
River Development |
JP
Morgan |
Virtu
Americas LLC |
Charles
River Trading System |
LexisNexis |
Virtus
Shared Services |
Any
agreement by which any Fund or any party acting on behalf of the Fund agrees to
provide Fund portfolio information to a third party, other than a third party
identified in the policy described above, must be approved prior to information
being provided to the third party, unless the third party is a regulator or has
a duty to maintain the confidentiality of such information and to refrain from
using such information to engage in securities transactions. A written record of
approval will be made by the person granting approval.
The
Funds’ non-public portfolio holdings information policy applies without
variation to individual investors, institutional investors, intermediaries that
distribute the Funds’ shares, third-party service providers, rating and ranking
organizations, and affiliated persons of the Funds. Neither the Funds nor PGI
nor any other party receives compensation in connection with the disclosure of
Fund portfolio information. The Funds’ CCO will periodically, but no less
frequently than annually, review the Funds’ portfolio holdings disclosure policy
and recommend changes the CCO believes are appropriate, if any, to the Board. In
addition, the Board must approve any change in the Funds’ portfolio holdings
disclosure policy that would expand the distribution of such
information.
PROXY
VOTING POLICIES AND PROCEDURES
The
Board has delegated responsibility for decisions regarding proxy voting for
securities held by each Fund to PGI or to the Fund’s sub-advisor, as
appropriate. PGI and each sub-advisor will vote such proxies in accordance with
its proxy policies and procedures, which have been reviewed by the Board, and
which are found in Appendix C to this SAI. Any material changes to the proxy
policies and procedures will be submitted to the Board for
approval.
Funds
that operate as funds of funds invest in shares of other Funds of PFI and PETF.
PGI is authorized to vote proxies related to the underlying funds. If an
underlying fund holds a shareholder meeting, in order to avoid any potential
conflict of interest, PGI will vote shares of such fund on any proposal
submitted to the fund's shareholders in the same proportion as the votes of
other shareholders of the underlying fund.
For
Funds that participate in a securities lending program, the voting rights for
securities that are loaned are transferred to the borrower. Therefore, the
lender (i.e., a Fund) is not entitled to vote the loaned securities, unless it
recalls those securities. Those managing the Fund’s investments may recall
securities for voting purposes when they reasonably believe the ability to vote
such securities outweighs the additional revenue received if such securities
were not recalled.
Information
regarding how the Funds voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30, 2023, is available, without
charge, upon request, by calling 1-800-222-5852 or by accessing the Funds’ most
recently filed Form N-PX on the SEC website at www.sec.gov.
FINANCIAL
STATEMENTS
The
financial statements of the Funds at October 31, 2023, are incorporated herein
by reference to the Funds' most recent Annual
Report to Shareholders
filed with the SEC on Form N-CSR.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Ernst
& Young LLP (700 Nicollet Mall, Suite 500, Minneapolis, MN 55402) is the
independent registered public accounting firm for the Fund Complex.
GENERAL
INFORMATION
Midcap
S&P 400 Index Fund, LargeCap S&P 500 Index Fund, and SmallCap S&P
600 Index Fund
The
Funds are not sponsored, endorsed, sold, or promoted by S&P Global (“S&P
Global”). S&P Global makes no representation or warranty, express or
implied, to Fund shareholders or any member of the public regarding the
advisability of investing in securities generally or in these Funds particularly
or the ability of the S&P 500 Index, S&P MidCap 400 Index, or S&P
SmallCap 600 Index to track general stock market performance. S&P Global’s
only relationship to Principal Life Insurance Company and PGI is the licensing
of certain trademarks and trade names of S&P Global and the S&P 500
Index, S&P MidCap 400 Index, or S&P SmallCap 600 Index which are
determined, composed, and calculated by S&P Global without regard to
Principal Life Insurance Company, PGI, or the Funds. S&P Global has no
obligation to take the needs of Principal Life Insurance Company, PGI or Fund
shareholders into consideration in determining, composing or calculating the
S&P 500 Index, S&P MidCap 400 Index, or S&P SmallCap 600 Index.
S&P Global is not responsible for and has not participated in the
determination of the prices of the Funds or the timing of the issuance or sale
of the Funds or in the determination or calculation of the equation by which the
Funds are to be converted into cash. S&P Global has no obligation or
liability in connection with the administration, marketing, or trading of the
Funds.
S&P
GLOBAL DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 INDEX, THE S&P MIDCAP 400 INDEX, OR THE S&P SMALLCAP 600 INDEX OR
ANY DATA CONTAINED THEREIN AND S&P GLOBAL SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P GLOBAL MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY PRINCIPAL LIFE INSURANCE
COMPANY, PRINCIPAL, FUND SHAREHOLDERS, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE S&P 500 INDEX, THE S&P MIDCAP 400 INDEX, OR THE S&P
SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN. S&P GLOBAL MAKES NO EXPRESS
OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500
INDEX, THE S&P MIDCAP 400 INDEX, OR THE S&P SMALLCAP 600 INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
S&P GLOBAL HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
CONTROL
PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
The
following list identifies shareholders who own more than 25% of the voting
securities of a Fund as of January 31, 2024. It is presumed that a person
who owns more than 25% of the voting securities of a Fund controls the Fund. A
control person could control the outcome of proposals presented to shareholders
for approval. The information is listed in alphabetical order by
Fund.
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund |
Percent of Ownership |
Shareholder
Name and Address |
Jurisdiction Under Which
Control Person is Organized (when control person is
a company) |
Parent
of Control Person (when control person is a company) |
CALIFORNIA
MUNICIPAL |
25.34% |
WELLS
FARGO CLEARING SERVICES LLC |
CALIFORNIA |
WELLS
FARGO & |
|
| SPECIAL
CUSTODY ACCT FOR THE |
| COMPANY |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
| |
|
| 2801
MARKET ST |
| |
|
| SAINT
LOUIS MO 63103-2523 |
| |
|
|
|
| |
CORE
PLUS BOND |
48.61% |
NATIONAL
FINANCIAL SERVICES LLC |
DELAWARE |
FIDELITY
GLOBAL |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
| BROKERAGE
GROUP, |
|
| CUSTOMERS |
| INC.
a wholly owned |
|
| 499
WASHINGTON BLVD |
| subsidiary
of FMR, LLC |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
| |
|
| JERSEY
CITY NJ 07310-1995 |
| |
|
|
|
| |
GLOBAL
EMERGING MARKETS |
34.59% |
NATIONAL
FINANCIAL SERVICES LLC |
DELAWARE |
FIDELITY
GLOBAL |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
| BROKERAGE
GROUP, |
|
| CUSTOMERS |
| INC.
a wholly owned |
|
| 499
WASHINGTON BLVD |
| subsidiary
of FMR, LLC |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
| |
|
| JERSEY
CITY NJ 07310-1995 |
| |
|
|
|
| |
GOVERNMENT
& HIGH |
29.48% |
NATIONAL
FINANCIAL SERVICES LLC |
DELAWARE |
FIDELITY
GLOBAL |
QUALITY
BOND |
| FOR
EXCLUSIVE BENEFIT OF OUR |
| BROKERAGE
GROUP, |
|
| CUSTOMERS |
| INC.
a wholly owned |
|
| 499
WASHINGTON BLVD |
| subsidiary
of FMR, LLC |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
| |
|
| JERSEY
CITY NJ 07310-1995 |
| |
|
|
|
| |
HIGH
INCOME |
56.00% |
PRINCIPAL
GLOBAL INVESTORS TRUST CO |
DELAWARE |
PRINCIPAL
HOLDING |
|
| PRINCIPAL
LIFETIME HYBRID |
| COMPANY,
LLC (1) |
|
| COLLECTIVE
INVESTMENT FUNDS |
| |
|
| 1300
SW 5TH AVE STE 3300 |
| |
|
| PORTLAND
OR 97201-5640 |
| |
|
|
|
| |
INFLATION
PROTECTION |
37.35% |
PRINCIPAL
GLOBAL INVESTORS TRUST CO |
DELAWARE |
PRINCIPAL
HOLDING |
|
| PRINCIPAL
LIFETIME HYBRID |
|
COMPANY,
LLC (1) |
|
| COLLECTIVE
INVESTMENT FUNDS |
| |
|
| 1300
SW 5TH AVE STE 3300 |
| |
|
| PORTLAND
OR 97201-5640 |
| |
|
|
|
| |
INTERNATIONAL
I |
51.03% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund |
Percent of Ownership |
Shareholder
Name and Address |
Jurisdiction Under Which
Control Person is Organized (when control person is
a company) |
Parent
of Control Person (when control person is a company) |
INTERNATIONAL
I |
29.16% |
NATIONAL
FINANCIAL SERVICES LLC |
DELAWARE |
FIDELITY
GLOBAL |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
| BROKERAGE
GROUP, |
|
| CUSTOMERS |
| INC.
a wholly owned |
|
| 499
WASHINGTON BLVD |
| subsidiary
of FMR, LLC |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
| |
|
| JERSEY
CITY NJ 07310-1995 |
| |
|
|
|
| |
LARGECAP
GROWTH I |
38.37% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
MIDCAP
GROWTH III |
34.09% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
MIDCAP
VALUE I |
31.45% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME |
52.58% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
STRATEGIC
INCOME |
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2015 |
72.05% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2015 |
25.63% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| OMNIBUS |
| |
|
| ATTN
NPIO TRADE DESK |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund |
Percent of Ownership |
Shareholder
Name and Address |
Jurisdiction Under Which
Control Person is Organized (when control person is
a company) |
Parent
of Control Person (when control person is a company) |
PRINCIPAL
LIFETIME 2020 |
53.07% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2025 |
74.22% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2030 |
61.20% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2035 |
75.24% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2040 |
62.25% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2045 |
72.72% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2045 |
25.01% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| OMNIBUS |
| |
|
| ATTN
NPIO TRADE DESK |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund |
Percent of Ownership |
Shareholder
Name and Address |
Jurisdiction Under Which
Control Person is Organized (when control person is
a company) |
Parent
of Control Person (when control person is a company) |
PRINCIPAL
LIFETIME 2050 |
67.74% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2055 |
73.01% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2060 |
78.95% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2065 |
79.47% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME 2070 |
86.90% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME |
32.49% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2020 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| ATTN
NPIO TRADE DESK OMNIBUS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME |
26.45% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2025 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| OMNIBUS |
| |
|
| ATTN
NPIO TRADE DESK |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund |
Percent of Ownership |
Shareholder
Name and Address |
Jurisdiction Under Which
Control Person is Organized (when control person is
a company) |
Parent
of Control Person (when control person is a company) |
PRINCIPAL
LIFETIME |
36.49% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2030 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| ATTN
NPIO TRADE DESK OMNIBUS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME |
38.84% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2035 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| ATTN
NPIO TRADE DESK OMNIBUS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME |
41.16% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2040 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| ATTN
NPIO TRADE DESK OMNIBUS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME |
48.46% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2045 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| OMNIBUS |
| |
|
| ATTN
NPIO TRADE DESK |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME |
53.01% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2050 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| OMNIBUS |
| |
|
| ATTN
NPIO TRADE DESK |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME |
55.75% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2055 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| OMNIBUS |
| |
|
| ATTN
NPIO TRADE DESK |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME |
51.40% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2060 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| OMNIBUS |
| |
|
| ATTN
NPIO TRADE DESK |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
PRINCIPAL
LIFETIME |
54.75% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2065 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| OMNIBUS |
| |
|
| ATTN
NPIO TRADE DESK |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Fund |
Percent of Ownership |
Shareholder
Name and Address |
Jurisdiction Under Which
Control Person is Organized (when control person is
a company) |
Parent
of Control Person (when control person is a company) |
|
|
|
| |
PRINCIPAL
LIFETIME |
50.89% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2070 |
| FBO
PLIC VARIOUS RETIREMENT PLANS |
| COMPANY,
LLC (1) |
|
| OMNIBUS |
| |
|
| ATTN
NPIO TRADE DESK |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
SMALLCAP |
27.01% |
NATIONAL
FINANCIAL SERVICES LLC |
DELAWARE |
FIDELITY
GLOBAL |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
| BROKERAGE
GROUP, |
|
| CUSTOMERS |
| INC.
a wholly owned |
|
| 499
WASHINGTON BLVD |
| subsidiary
of FMR, LLC |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
| |
|
| JERSEY
CITY NJ 07310-1995 |
| |
|
|
|
| |
SMALLCAP
GROWTH I |
39.46% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
SMALLCAP
VALUE II |
40.49% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
|
| FBO
PFG OMNIBUS WRAPPED |
| SERVICES,
INC. (1) |
|
| AND
CUSTOM |
| |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
| |
|
| 711
HIGH ST |
| |
|
| DES
MOINES IA 50392-0001 |
| |
|
|
|
| |
TAX-EXEMPT
BOND |
25.31% |
NATIONAL
FINANCIAL SERVICES LLC |
DELAWARE |
FIDELITY
GLOBAL |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
| BROKERAGE
GROUP, |
|
| CUSTOMERS |
| INC.
a wholly owned |
|
| 499
WASHINGTON BLVD |
| subsidiary
of FMR, LLC |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
| |
|
| JERSEY
CITY NJ 07310-1995 |
| |
|
|
|
| |
(1)
Principal Financial Group, Inc. is the parent of control for Principal
Financial Services, Inc.; Principal Financial Services, Inc. is the parent
of control for Principal Life Insurance Company and Principal Global
Investors, LLC; Principal Life Insurance Company is the parent of control
for Principal Holding Company, LLC. |
The
Board Members and officers of the Funds, member companies of the Principal
Financial Group, and certain other persons may purchase shares of the Funds
without the payment of any sales charge. The sales charge is waived on these
transactions because there are either no distribution costs or only minimal
distribution costs associated with the transactions. For a description of the
persons entitled to a waiver of sales charge in connection with their purchase
of shares of the Funds, see the discussion of the waiver of sales charges under
the caption “Choosing a Share Class and the Costs of Investing” in the
Prospectus.
Funds
that operate as funds of funds and Principal Life Insurance Company will vote in
the same proportion as shares of the Funds owned by other shareholders.
Therefore, neither the funds of funds nor Principal Life Insurance Company
exercise voting discretion.
A
quorum must be present at a meeting of shareholders for business to be
transacted. PFI's Bylaws state that a quorum is the presence in person or by
proxy of the holders of one-third of the shares of capital stock of PFI or, when
the meeting relates to a certain Fund, that Fund, issued and outstanding and
entitled to vote on the record date.
Certain
proposals presented to shareholders for approval require the vote of a “majority
of the outstanding voting securities,” which is a term defined in the 1940 Act
to mean, with respect to a Fund, the affirmative vote of the lesser of 1) 67% or
more of the voting securities of the Fund present at the meeting of that Fund,
if the holders of more than 50% of the outstanding voting securities of the Fund
are present in person or by proxy, or 2) more than 50% of the outstanding voting
securities of the Fund).
Principal
Holders of Securities
The
Registrant is unaware of any persons who own beneficially (but are not
shareholders of record) 5% or more of any class of the Funds’ outstanding
shares. The following list identifies the shareholders of record who own 5% or
more of any class of the Funds’ outstanding shares as of January 31, 2024. The
list is presented in alphabetical order by Fund.
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
CALIFORNIA
MUNICIPAL (A) |
28.80% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
CALIFORNIA
MUNICIPAL (A) |
21.81% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
CALIFORNIA
MUNICIPAL (A) |
10.87% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
CALIFORNIA
MUNICIPAL (A) |
8.17% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
CALIFORNIA
MUNICIPAL (A) |
6.69% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
CALIFORNIA
MUNICIPAL (A) |
5.87% |
MLPF&S
FOR THE SOLE BENEFIT OF ITS CUSTOMERS |
|
| ATTN
FUND ADMINISTRATION |
|
| 4800
DEER LAKE DR EAST |
|
| BUILDING
ONE, 2ND FLOOR |
|
| JACKSONVILLE
FL 32246-6484 |
|
| |
CALIFORNIA
MUNICIPAL (C) |
47.19% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
CALIFORNIA
MUNICIPAL (C) |
13.66% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
CALIFORNIA
MUNICIPAL (C) |
8.79% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
CALIFORNIA
MUNICIPAL (C) |
7.70% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
CALIFORNIA
MUNICIPAL (C) |
7.06% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
CALIFORNIA
MUNICIPAL (I) |
22.61% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
CALIFORNIA
MUNICIPAL (I) |
19.73% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
CALIFORNIA
MUNICIPAL (I) |
12.34% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
| FBO
#41999970 |
|
| 707
2ND AVE S |
|
| MINNEAPOLIS
MN 55402-2405 |
|
| |
CALIFORNIA
MUNICIPAL (I) |
9.43% |
MLPF&S
FOR THE SOLE |
|
| BENEFIT
OF ITS CUSTOMERS |
|
| ATTN
FUND ADMINISTRATION |
|
| 4800
DEER LAKE DR E FL 2 |
|
| JACKSONVILLE
FL 32246-6484 |
|
| |
CALIFORNIA
MUNICIPAL (I) |
8.63% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
CALIFORNIA
MUNICIPAL (I) |
8.11% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
CALIFORNIA
MUNICIPAL (I) |
6.57% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
CORE
FIXED INCOME (A) |
27.56% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
CORE
FIXED INCOME (A) |
8.33% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
CORE
FIXED INCOME (A) |
5.50% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
CORE
FIXED INCOME (I) |
49.41% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
CORE
FIXED INCOME (I) |
14.64% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
| FBO
#41999970 |
|
| 707
2ND AVE S |
|
| MINNEAPOLIS
MN 55402-2405 |
|
| |
CORE
FIXED INCOME (I) |
8.34% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 211
MAIN STREET |
|
| SAN
FRANCISCO CA 94105-1901 |
|
| |
CORE
FIXED INCOME (R1) |
95.72% |
VOYA
INSTITUTIONAL TRUST COMPANY |
|
| 1
ORANGE WAY |
|
| WINDSOR
CT 06095-4773 |
|
| |
CORE
FIXED INCOME (R3) |
65.48% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
FIXED INCOME (R3) |
17.41% |
SAMMONS
INSTITUTIONAL GROUP |
|
| 8300
MILLS CIVIC PKWY |
|
| WDM
IA 50266-3833 |
|
| |
CORE
FIXED INCOME (R4) |
84.90% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
CORE
FIXED INCOME (R5) |
89.56% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
FIXED INCOME (R5) |
6.28% |
RELIANCE
TRUST COMPANY FBO |
|
| T
ROWE PRICE RETIREMENT |
|
| PLAN
CLIENTS |
|
| PO
BOX 78446 |
|
| ATLANTA
GEORGIA 30357 |
|
| |
CORE
FIXED INCOME (R6) |
19.66% |
LIFETIME
2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
FIXED INCOME (R6) |
16.65% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
FIXED INCOME (R6) |
8.51% |
LIFETIME
2020 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING H-221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
FIXED INCOME (R6) |
7.83% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
FIXED INCOME (R6) |
7.23% |
LIFETIME
2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
FIXED INCOME (R6) |
6.83% |
SAM
BALANCED PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
FIXED INCOME (R6) |
5.12% |
LIFETIME
2025 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
CORE
FIXED INCOME (R6) |
5.06% |
LIFETIME
2035 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
PLUS BOND (A) |
12.96% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
CORE
PLUS BOND (I) |
77.68% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
CORE
PLUS BOND (I) |
9.26% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
PLUS BOND (R1) |
88.86% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
PLUS BOND (R1) |
11.13% |
MID
ATLANTIC TRUST COMPANY FBO |
|
| UNITED
STATES SQUASH RACQUETS 401(K |
|
| 1251
WATERFRONT PLACE SUITE 525 |
|
| PITTSBURGH
PA 15222-4228 |
|
| |
CORE
PLUS BOND (R3) |
67.80% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
PLUS BOND (R3) |
7.45% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
SCOTT CONTRACTING CASH |
|
| BALANCE
PLAN |
|
| 702
OLD PEACHTREE RD NW STE 100 |
|
| SUWANEE
GA 30024-4923 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
CORE
PLUS BOND (R4) |
56.93% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
PLUS BOND (R4) |
10.98% |
RANGER
PIPELINES INCORPORATED |
|
| FBO
RANGER PIPELINES INC NQ EXCESS |
|
| PLAN |
|
| ATTN
PLAN TRUSTEE |
|
| 1790
YOSEMITE AVE |
|
| SAN
FRANCISCO CA 94124-2622 |
|
| |
CORE
PLUS BOND (R4) |
8.60% |
NOMURA
HOLDING AMERICA INC |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
NOMURA SUPP RET SAVINGS |
|
| 309
W 49TH ST |
|
| NEW
YORK NY 10019-9102 |
|
| |
CORE
PLUS BOND (R4) |
6.35% |
BRISTOL
BAY NATIVE CORPORATION |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
BBNC NQ DEF COMP PLAN |
|
| 111
W 16TH AVE |
|
| ANCHORAGE
AK 99501-6299 |
|
| |
CORE
PLUS BOND (R5) |
82.92% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
CORE
PLUS BOND (R5) |
5.45% |
NORTHWEST
ADMINISTRATORS |
|
| FBO
NQ EXCESS OF NW ADMINISTRATORS |
|
| ATTN
GAYLE BUSHNELL |
|
| 2323
EASTLAKE AVE E |
|
| SEATTLE
WA 98102-3305 |
|
| |
DIVERSIFIED
INCOME (A) |
15.18% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
DIVERSIFIED
INCOME (A) |
11.37% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
DIVERSIFIED
INCOME (A) |
11.11% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
DIVERSIFIED
INCOME (A) |
10.85% |
MLPF&S
FOR THE SOLE |
|
| BENEFIT
OF ITS CUSTOMERS |
|
| ATTN
FUND ADMINISTRATION |
|
| 4800
DEER LAKE DR E FL 3 |
|
| JACKSONVILLE
FL 32246-6484 |
|
| |
DIVERSIFIED
INCOME (A) |
6.11% |
UBS
WM USA |
|
| 0O0
11011 6100 |
|
| OMNI
ACCOUNT M/F |
|
| SPEC
CDY A/C EBOC UBSFSI |
|
| 1000
HARBOR BLVD |
|
| WEEHAWKEN
NJ 07086-6761 |
|
| |
DIVERSIFIED
INCOME (A) |
6.11% |
RAYMOND
JAMES |
|
| OMNIBUS
FOR MUTUAL FUNDS |
|
| HOUSE
ACCT FIRM 92500015 |
|
| ATTN:
COURTNEY WALLER |
|
| 880
CARILLON PKWY |
|
| ST
PETERSBURG FL 33716-1102 |
|
| |
DIVERSIFIED
INCOME (A) |
5.05% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 211
MAIN STREET |
|
| SAN
FRANCISCO CA 94105-1901 |
|
| |
DIVERSIFIED
INCOME (C) |
32.11% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
DIVERSIFIED
INCOME (C) |
12.69% |
RAYMOND
JAMES |
|
| OMNIBUS
FOR MUTUAL FUNDS |
|
| HOUSE
ACCT FIRM 92500015 |
|
| ATTN:
COURTNEY WALLER |
|
| 880
CARILLON PKWY |
|
| ST
PETERSBURG FL 33716-1102 |
|
| |
DIVERSIFIED
INCOME (C) |
7.90% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
DIVERSIFIED
INCOME (C) |
6.26% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
DIVERSIFIED
INCOME (C) |
5.82% |
CHARLES
SCHWAB & CO INC |
|
| FBO
SPECIAL CUSTODY ACCOUNTS |
|
| ATTN
MUTUAL FUNDS |
|
| 211
MAIN ST |
|
| SAN
FRANCISCO CA 94105-1901 |
|
| |
DIVERSIFIED
INCOME (C) |
5.19% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
DIVERSIFIED
INCOME (I) |
15.57% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
DIVERSIFIED
INCOME (I) |
14.50% |
MLPF&S
FOR THE SOLE |
|
| BENEFIT
OF ITS CUSTOMERS |
|
| ATTN
FUND ADMINISTRATION |
|
| 4800
DEER LAKE DR E FL 3 |
|
| JACKSONVILLE
FL 32246-6484 |
|
| |
DIVERSIFIED
INCOME (I) |
10.60% |
UBS
WM USA |
|
| 0O0
11011 6100 |
|
| OMNI
ACCOUNT M/F |
|
| SPEC
CDY A/C EBOC UBSFSI |
|
| 1000
HARBOR BLVD |
|
| WEEHAWKEN
NJ 07086-6761 |
|
| |
DIVERSIFIED
INCOME (I) |
9.98% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
DIVERSIFIED
INCOME (I) |
9.42% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
DIVERSIFIED
INCOME (I) |
8.32% |
RAYMOND
JAMES |
|
| OMNIBUS
FOR MUTUAL FUNDS |
|
| HOUSE
ACCT FIRM 92500015 |
|
| ATTN:
COURTNEY WALLER |
|
| 880
CARILLON PKWY |
|
| ST
PETERSBURG FL 33716-1102 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
DIVERSIFIED
INCOME (I) |
7.43% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
DIVERSIFIED
INCOME (I) |
5.28% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
DIVERSIFIED
INCOME (R6) |
88.23% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY ACCT FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 211
MAIN STREET |
|
| SAN
FRANCISCO CA 94105-1901 |
|
| |
DIVERSIFIED
INTERNATIONAL (A) |
13.02% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
DIVERSIFIED
INTERNATIONAL (I) |
60.51% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
DIVERSIFIED
INTERNATIONAL (I) |
9.05% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 211
MAIN STREET |
|
| SAN
FRANCISCO CA 94105-1901 |
|
| |
DIVERSIFIED
INTERNATIONAL (I) |
7.95% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
DIVERSIFIED
INTERNATIONAL (R1) |
85.31% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
DIVERSIFIED
INTERNATIONAL (R1) |
10.81% |
STATE
STREET BANK CUST |
|
| FBO
ADP ACCESS LARGE MARKET |
|
| 401(K)
PLAN |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
DIVERSIFIED
INTERNATIONAL (R3) |
58.94% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
DIVERSIFIED
INTERNATIONAL (R4) |
70.65% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
DIVERSIFIED
INTERNATIONAL (R4) |
13.19% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
CRST INTL NQ PLAN |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
DIVERSIFIED
INTERNATIONAL (R4) |
5.54% |
BRISTOL
BAY NATIVE CORPORATION |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
BBNC NQ DEF COMP PLAN |
|
| 111
W 16TH AVE |
|
| ANCHORAGE
AK 99501-6299 |
|
| |
DIVERSIFIED
INTERNATIONAL (R5) |
68.00% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
DIVERSIFIED
INTERNATIONAL (R5) |
6.61% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
DIVERSIFIED
INTERNATIONAL (R6) |
12.78% |
LIFETIME
2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
DIVERSIFIED
INTERNATIONAL (R6) |
11.61% |
LIFETIME
2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
DIVERSIFIED
INTERNATIONAL (R6) |
10.35% |
LIFETIME
2050 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
EQUITY
INCOME (A) |
16.37% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
EQUITY
INCOME (A) |
13.02% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
EQUITY
INCOME (A) |
9.82% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FOR THE |
|
| BENIFIT
OF CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
EQUITY
INCOME (C) |
23.24% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
EQUITY
INCOME (C) |
12.74% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
EQUITY
INCOME (C) |
8.56% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
EQUITY
INCOME (C) |
7.50% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
EQUITY
INCOME (C) |
6.97% |
MLPF&S
FOR THE SOLE |
|
| BENEFIT
OF ITS CUSTOMERS |
|
| ATTN
FUND ADMINISTRATION |
|
| 4800
DEER LAKE DR EAST 3RD FL |
|
| JACKSONVILLE
FL 32246-6484 |
|
| |
EQUITY
INCOME (C) |
6.11% |
STIFEL
NICOLAUS & CO INC |
|
| EXCLUSIVE
BENEFIT OF CUSTOMERS |
|
| 501
N BROADWAY |
|
| SAINT
LOUIS MO 63102-2188 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
EQUITY
INCOME (C) |
5.89% |
RAYMOND
JAMES |
|
| OMNIBUS
FOR MUTUAL FUNDS |
|
| HOUSE
ACCT FIRM 92500015 |
|
| ATTN:
COURTNEY WALLER |
|
| 880
CARILLON PKWY |
|
| ST
PETERSBURG FL 33716-1102 |
|
| |
EQUITY
INCOME (I) |
29.04% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
EQUITY
INCOME (I) |
10.96% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
EQUITY
INCOME (R1) |
83.90% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
EQUITY
INCOME (R1) |
15.70% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
CONCORP CONCRETE INC DEFINED |
|
| BENEFIT
PENSION PLAN |
|
| 2485
ASHCROFT AVE |
|
| CLOVIS
CA 93611-6001 |
|
| |
EQUITY
INCOME (R3) |
55.64% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
EQUITY
INCOME (R3) |
20.41% |
SAMMONS
INSTITUTIONAL GROUP |
|
| 8300
MILLS CIVIC PKWY |
|
| WDM
IA 50266-3833 |
|
| |
EQUITY
INCOME (R4) |
54.80% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
EQUITY
INCOME (R4) |
27.74% |
PIMS/PRUDENTIAL
RETIREMENT |
|
| AS
NOMINEE FOR THE TTEE/CUST PL 764 |
|
| NYSA-ILA
MONEY PURCHASE PENSION |
|
| 10
EXCHANGE PL STE 1400 |
|
| JERSEY
CITY NJ 07302-4931 |
|
| |
EQUITY
INCOME (R5) |
89.54% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
FINISTERRE
EMERGING MARKETS |
16.48% |
NATIONAL
FINANCIAL SERVICES LLC |
TOTAL
RETURN BOND (I) |
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
FINISTERRE
EMERGING MARKETS |
12.48% |
MORGAN
STANLEY SMITH BARNEY LLC |
TOTAL
RETURN BOND (I) |
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
FINISTERRE
EMERGING MARKETS |
11.95% |
SAM
BALANCED PORTFOLIO PIF |
TOTAL
RETURN BOND (I) |
| ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
FINISTERRE
EMERGING MARKETS |
11.87% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
TOTAL
RETURN BOND (I) |
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
FINISTERRE
EMERGING MARKETS |
9.58% |
CHARLES
SCHWAB & CO INC |
TOTAL
RETURN BOND (I) |
| SPECIAL
CUSTODY ACCT |
|
| FBO
CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 211
MAIN ST |
|
| SAN
FRANCISCO CA 94105-1901 |
|
| |
FINISTERRE
EMERGING MARKETS |
9.31% |
RAYMOND
JAMES |
TOTAL
RETURN BOND (I) |
| OMNIBUS
FOR MUTUAL FUNDS |
|
| HOUSE
ACCT FIRM 92500015 |
|
| ATTN:
COURTNEY WALLER |
|
| 880
CARILLON PKWY |
|
| ST
PETERSBURG FL 33716-1102 |
|
| |
FINISTERRE
EMERGING MARKETS |
8.05% |
SAM
CONS BALANCED PORTFOLIO PIF |
TOTAL
RETURN BOND (I) |
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
GLOBAL
EMERGING MARKETS (A) |
19.56% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
GLOBAL
EMERGING MARKETS (I) |
84.95% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
GLOBAL
EMERGING MARKETS (R1) |
81.26% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GLOBAL
EMERGING MARKETS (R1) |
6.39% |
STATE
STREET BANK CUST |
|
| FBO
ADP ACCESS LARGE MARKET |
|
| 401(K)
PLAN |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
GLOBAL
EMERGING MARKETS (R1) |
5.69% |
MID
ATLANTIC TRUST COMPANY FBO |
|
| CREATIVE
CHOICE HOMES LLP 401 K |
|
| PROFIT
SHARING PLAN & TRUST |
|
| 1251
WATERFRONT PL STE 525 |
|
| PITTSBURGH
PA 15222-4228 |
|
| |
GLOBAL
EMERGING MARKETS (R3) |
57.93% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GLOBAL
EMERGING MARKETS (R3) |
6.47% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
SCOTT CONTRACTING CASH |
|
| BALANCE
PLAN |
|
| 702
OLD PEACHTREE RD NW STE 100 |
|
| SUWANEE
GA 30024-4923 |
|
| |
GLOBAL
EMERGING MARKETS (R4) |
70.73% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
GLOBAL
EMERGING MARKETS (R4) |
18.68% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
CRST INTL NQ PLAN |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
GLOBAL
EMERGING MARKETS (R5) |
61.23% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GLOBAL
EMERGING MARKETS (R5) |
6.13% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
NIPPON LIFE INS CO EXEC NQ |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
GLOBAL
EMERGING MARKETS (R5) |
5.21% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
NQ DB OF AAA ARIZONA |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
GLOBAL
EMERGING MARKETS (R6) |
75.72% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
GLOBAL
EMERGING MARKETS (R6) |
19.27% |
BANKERS
TRUST COMPANY |
|
| FBO
DEF COMP FOR SELECT INV |
|
| PROFESSIONALS
OF PFG AND ITS |
|
| ATTN
PLAN TRUSTEE |
|
| 453
7TH ST |
|
| DES
MOINES IA 50309-4110 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (A) |
19.26% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY STREET |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (A) |
15.56% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
GLOBAL
REAL ESTATE SECURITIES (A) |
10.47% |
RAYMOND
JAMES |
|
| OMNIBUS
FOR MUTUAL FUNDS |
|
| HOUSE
ACCT FIRM 92500015 |
|
| ATTN:
COURTNEY WALLER |
|
| 880
CARILLON PKWY |
|
| ST
PETERSBURG FL 33716-1102 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (A) |
9.27% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (I) |
20.83% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FOR THE |
|
| BENIFIT
OF CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (I) |
20.23% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (I) |
18.30% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (I) |
8.24% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R3) |
33.90% |
SAMMONS
INSTITUTIONAL GROUP |
|
| 8300
MILLS CIVIC PKWY |
|
| WDM
IA 50266-3833 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R3) |
29.38% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R3) |
28.40% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
BLUE ROCK REFINISHING SOLUTIONS |
|
| LLC
CASH BALANCE PLAN |
|
| 2974
CLEVELAND AVE N |
|
| SAINT
PAUL MN 55113-1101 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
GLOBAL
REAL ESTATE SECURITIES (R4) |
74.27% |
VOYA
INSTITUTIONAL TRUST COMPANY |
|
| 1
ORANGE WAY |
|
| WINDSOR
CT 06095-4773 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R4) |
24.38% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R5) |
84.80% |
PIMS/PRUDENTIAL
RETIREMENT |
|
| AS
NOMINEE FOR THE TTEE/CUST PL 002 |
|
| CITY
OF JERSEY CITY |
|
| 280
GROVE STREET ROOM 106 |
|
| JERSEY
CITY NJ 07302-3610 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R5) |
10.61% |
MID
ATLANTIC TRUST COMPANY FBO |
|
| MATC
OMNIBUS DIV REINVEST |
|
| 1251
WATERFRONT PL STE 525 |
|
| PITTSBURGH
PA 15222-4228 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R6) |
18.03% |
UBATCO
& CO |
|
| FBO
COLLEGE SAVINGS GROUP |
|
| PO
BOX 82535 |
|
| LINCOLN
NE 68501-2535 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R6) |
10.63% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| 499
WASHINGTON BLVD |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R6) |
8.99% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R6) |
7.59% |
NATIONWIDE
TRUST COMPANY FSB |
|
| C/O
IPO PORTFOLIO ACCOUNTING |
|
| PO
BOX 182029 |
|
| COLUMBUS
OH 43218-2029 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R6) |
7.19% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| 499
WASHINGTON BLVD |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
GLOBAL
REAL ESTATE SECURITIES (R6) |
7.08% |
MAC
& CO A/C 681885 |
|
| ATTN
MUTUAL FUND OPS |
|
| 500
GRANT STREET ROOM 151-1010 |
|
| PITTSBURGH
PA 15219-2502 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
GOVERNMENT
& HIGH QUALITY BOND (A) |
21.45% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (A) |
12.37% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (I) |
37.91% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (I) |
24.10% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (I) |
14.37% |
SAM
BALANCED PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (I) |
9.85% |
SAM
CONS BALANCED PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (R1) |
95.25% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (R3) |
39.36% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (R3) |
10.52% |
ASCENSUS
TRUST COMPANY FBO |
|
| STRUCTURAL
ENGINEERING CENTER INC |
|
| 70069 |
|
| PO
BOX 10758 |
|
| FARGO
ND 58106-0758 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
GOVERNMENT
& HIGH QUALITY BOND (R3) |
8.84% |
USIC |
|
| FBO
USIC EXEC BENEFIT PLAN |
|
| ATTN
CARYN HILDRETH |
|
| 9045
RIVER RD STE 300 |
|
| INDIANAPOLIS
IN 46240-6400 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (R4) |
60.88% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (R4) |
22.74% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
CRST INTL NQ PLAN |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (R5) |
30.76% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (R5) |
23.58% |
BANKERS
TRUST COMPANY |
|
| FBO
II-VI, INC DEFERRED |
|
| COMPENSATION
PLAN |
|
| ATTN
DEBBIE WILLIAMS |
|
| 453
7TH ST |
|
| DES
MOINES IA 50309-4110 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (R5) |
17.69% |
NORTHWEST
ADMINISTRATORS |
|
| FBO
NQ EXCESS OF NW ADMINISTRATORS |
|
| ATTN
GAYLE BUSHNELL |
|
| 2323
EASTLAKE AVE E |
|
| SEATTLE
WA 98102-3305 |
|
| |
GOVERNMENT
& HIGH QUALITY BOND (R5) |
14.46% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| 499
WASHINGTON BLVD |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
GOVERNMENT
MONEY MARKET (I) |
99.91% |
PRINCIPAL
BANK |
|
| 222
S 9TH ST |
|
| MINNEAPOLIS
MN 55402-3389 |
|
| |
GOVERNMENT
MONEY MARKET (R6) |
16.70% |
BNY
MELLON AS AGENT FOR VARIOUS |
|
| PRINCIPAL
FUNDS |
|
| 500
GRANT ST |
|
| PITTSBURGH
PA 15219-2502 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
GOVERNMENT
MONEY MARKET (R6) |
9.86% |
LARGECAP
S&P 500 INDEX FUND |
|
| FBO
PGI |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GOVERNMENT
MONEY MARKET (R6) |
7.20% |
LARGECAP
GROWTH FUND I |
|
| FBO
BROWN |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
GOVERNMENT
MONEY MARKET (R6) |
6.26% |
EQUITY
INCOME FUND |
|
| FBO
PGI |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
HIGH
INCOME (I) |
56.00% |
PRINCIPAL
GLOBAL INVESTORS TRUST CO |
|
| PRINCIPAL
LIFETIME HYBRID |
|
| COLLECTIVE
INVESTMENT FUNDS |
|
| 1300
SW 5TH AVE STE 3300 |
|
| PORTLAND
OR 97201-5640 |
|
| |
HIGH
INCOME (I) |
8.40% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
HIGH
INCOME (I) |
7.39% |
LIFETIME
2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
HIGH
YIELD (A) |
14.76% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
HIGH
YIELD (A) |
9.32% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
HIGH
YIELD (A) |
5.86% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FOR THE |
|
| BENIFIT
OF CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
HIGH
YIELD (A) |
5.19% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
HIGH
YIELD (C) |
16.11% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
HIGH
YIELD (C) |
16.03% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
HIGH
YIELD (C) |
11.64% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
HIGH
YIELD (C) |
7.19% |
CHARLES
SCHWAB & CO INC |
|
| FBO
SPECIAL CUSTODY ACCOUNTS |
|
| ATTN
MUTUAL FUNDS |
|
| 211
MAIN ST |
|
| SAN
FRANCISCO CA 94105-1901 |
|
| |
HIGH
YIELD (C) |
7.06% |
RAYMOND
JAMES |
|
| OMNIBUS
FOR MUTUAL FUNDS |
|
| HOUSE
ACCT FIRM 92500015 |
|
| ATTN:
COURTNEY WALLER |
|
| 880
CARILLON PKWY |
|
| ST
PETERSBURG FL 33716-1102 |
|
| |
HIGH
YIELD (C) |
6.33% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
HIGH
YIELD (I) |
31.01% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
HIGH
YIELD (I) |
13.98% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
HIGH
YIELD (I) |
11.16% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
HIGH
YIELD (I) |
6.63% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FOR THE |
|
| BENIFIT
OF CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
HIGH
YIELD (I) |
6.05% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
HIGH
YIELD (I) |
5.74% |
UBS
WM USA |
|
| 0O0
11011 6100 |
|
| OMNI
ACCOUNT M/F |
|
| SPEC
CDY A/C EBOC UBSFSI |
|
| 1000
HARBOR BLVD |
|
| WEEHAWKEN
NJ 07086-6761 |
|
| |
HIGH
YIELD (R6) |
22.02% |
SAM
BALANCED PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
HIGH
YIELD (R6) |
14.88% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
HIGH
YIELD (R6) |
10.96% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
HIGH
YIELD (R6) |
9.85% |
SAM
CONS BALANCED PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
HIGH
YIELD (R6) |
6.25% |
WELLS
FARGO BANK NA |
|
| PO
BOX 1533 |
|
| MINNEAPOLIS
MN 55480-1533 |
|
| |
HIGH
YIELD (R6) |
6.11% |
SAM
CONS GROWTH PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INFLATION
PROTECTION (I) |
37.92% |
PRINCIPAL
GLOBAL INVESTORS TRUST CO |
|
| PRINCIPAL
LIFETIME HYBRID |
|
| COLLECTIVE
INVESTMENT FUNDS |
|
| 1300
SW 5TH AVE STE 3300 |
|
| PORTLAND
OR 97201-5640 |
|
| |
INFLATION
PROTECTION (I) |
10.99% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
INFLATION
PROTECTION (I) |
8.83% |
LIFETIME
2020 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INFLATION
PROTECTION (I) |
8.63% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INFLATION
PROTECTION (I) |
5.07% |
SAM
BALANCED PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INFLATION
PROTECTION (J) |
6.12% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| IRA
JAMES KATZ |
|
| 8432
HIGH DRIVE |
|
| LEAWOOD
KS 66206-1526 |
|
| |
INFLATION
PROTECTION (R1) |
99.78% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
INFLATION
PROTECTION (R3) |
41.21% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INFLATION
PROTECTION (R3) |
30.96% |
DSL
CONSTRUCTION CORP |
|
| FBO
EXEC NQ EXCESS OF DSL |
|
| CONSTRUCTION |
|
| ATTN
PLAN TRUSTEE |
|
| 11300
W OLYMPIC BLVD STE 770 |
|
| LOS
ANGELES CA 90064-1644 |
|
| |
INFLATION
PROTECTION (R3) |
7.81% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
DUPAGE INTERNAL MEDICINE LLC |
|
| 228
OXFORD AVE |
|
| CLARENDON
HLS IL 60514-2807 |
|
| |
INFLATION
PROTECTION (R4) |
72.78% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INFLATION
PROTECTION (R4) |
15.70% |
GREATER
MODESTO MEDICAL SURGICAL AS |
|
| FBO
FIRST CHOICE PHYS PTRS DEF COMP |
|
| ATTN
CHRISTINA ALCANTARA |
|
| 1541
FLORIDA AVE STE 200 |
|
| MODESTO
CA 95350-4438 |
|
| |
INFLATION
PROTECTION (R5) |
77.05% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INFLATION
PROTECTION (R5) |
13.18% |
COMANCHE
COUNTY HOSPITAL AUTHORITY |
|
| FBO
COMANCHE COUNTY HOSPITAL |
|
| AUTHORITY
EMPLOYEE EXCESS PLAN |
|
| ATTN
DONNA WADE |
|
| 3401
W GORE BLVD |
|
| LAWTON
OK 73505-6300 |
|
| |
INTERNATIONAL
I (I) |
74.87% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
INTERNATIONAL
I (I) |
10.34% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
INTERNATIONAL
I (R1) |
100.00% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INTERNATIONAL
I (R3) |
86.05% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INTERNATIONAL
I (R3) |
5.07% |
STRATACOR |
|
| FBO
STRATACOR 457B |
|
| ATTN
TAMERA ROBINSON |
|
| 500
WASHINGTON AVE SOUTH |
|
| MINNEAPOLIS
MN 55415-1149 |
|
| |
INTERNATIONAL
I (R4) |
88.82% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INTERNATIONAL
I (R4) |
11.14% |
INTL
UNION AGAINST TB & LUNG DIS |
|
| FBO
INTL UNION AGAINST TB&LD VITAL |
|
| ATTN
PLAN TRUSTEE |
|
| STRATEGIES
457B |
|
| 61
BROADWAY STE 1010 |
|
| NEW
YORK NY 10006-2738 |
|
| |
INTERNATIONAL
I (R5) |
97.53% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
INTERNATIONAL
I (R6) |
77.36% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
INTERNATIONAL
I (R6) |
9.49% |
C/O
BANKERS TRUST |
|
| 1
FREEDOM VALLEY DR |
|
| OAKS
PA 19456-9989 |
|
| |
LARGECAP
GROWTH I (A) |
13.55% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
LARGECAP
GROWTH I (A) |
8.46% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
LARGECAP
GROWTH I (I) |
79.22% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
LARGECAP
GROWTH I (I) |
8.87% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
GROWTH I (R1) |
97.01% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
GROWTH I (R3) |
71.37% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
GROWTH I (R4) |
45.91% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
LARGECAP
GROWTH I (R4) |
23.70% |
EMPOWER
TRUST FBO |
|
| EMPLOYEE
BENEFITS CLIENTS 401K |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
LARGECAP
GROWTH I (R4) |
5.84% |
NOMURA
HOLDING AMERICA INC |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
NOMURA SUPP RET SAVINGS |
|
| 309
W 49TH ST |
|
| NEW
YORK NY 10019-9102 |
|
| |
LARGECAP
GROWTH I (R5) |
75.81% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
GROWTH I (R5) |
7.85% |
STATE
STREET BANK CUST |
|
| FBO
ADP ACCESS LARGE MARKET |
|
| 401(K)
PLAN |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
LARGECAP
GROWTH I (R6) |
57.69% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
GROWTH I (R6) |
5.69% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
GROWTH I (R6) |
5.01% |
LIFETIME
2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
S&P 500 INDEX (A) |
18.95% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
LARGECAP
S&P 500 INDEX (A) |
6.27% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
LARGECAP
S&P 500 INDEX (I) |
7.94% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
S&P 500 INDEX (I) |
7.93% |
LIFETIME
2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
S&P 500 INDEX (I) |
6.99% |
LIFETIME
2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
S&P 500 INDEX (I) |
6.34% |
LIFETIME
2050 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
S&P 500 INDEX (I) |
5.22% |
LIFETIME
HYBRID 2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
S&P 500 INDEX (R1) |
65.40% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
S&P 500 INDEX (R1) |
6.27% |
ASCENSUS
TRUST COMPANY FBO |
|
| MALCOLM
& CISNEROS, A LAW CORP. 401 |
|
| 590528 |
|
| ASCENSUS
TRUST COMPANY |
|
| PO
BOX 10577 |
|
| FARGO
ND 58106-0577 |
|
| |
LARGECAP
S&P 500 INDEX (R3) |
58.96% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
S&P 500 INDEX (R4) |
43.20% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
LARGECAP
S&P 500 INDEX (R4) |
7.26% |
NOMURA
HOLDING AMERICA INC |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
NOMURA SUPP RET SAVINGS |
|
| 309
W 49TH ST |
|
| NEW
YORK NY 10019-9102 |
|
| |
LARGECAP
S&P 500 INDEX (R4) |
6.35% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
LARGECAP
S&P 500 INDEX (R5) |
73.09% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
VALUE III (I) |
11.95% |
LIFETIME
2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
VALUE III (I) |
10.99% |
LIFETIME
2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
VALUE III (I) |
9.80% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
VALUE III (I) |
9.69% |
LIFETIME
2050 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
VALUE III (I) |
6.99% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
LARGECAP
VALUE III (I) |
5.74% |
SAM
BALANCED PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
LARGECAP
VALUE III (I) |
5.38% |
SAM
CONS GROWTH PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
VALUE III (R1) |
91.66% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
VALUE III (R1) |
7.39% |
STATE
STREET BANK CUST |
|
| FBO
ADP ACCESS LARGE MARKET |
|
| 401(K)
PLAN |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
LARGECAP
VALUE III (R3) |
81.36% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
VALUE III (R4) |
45.31% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
VALUE III (R4) |
25.20% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
CRST INTL NQ PLAN |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
LARGECAP
VALUE III (R4) |
11.91% |
NEW
LONDON HOSPITAL ASSOC INC |
|
| FBO
NEW LONDON HOSP ASSOC INC 457B |
|
| ATTN
TINA NAIMIE |
|
| 273
COUNTY RD |
|
| NEW
LONDON NH 03257-7700 |
|
| |
LARGECAP
VALUE III (R4) |
5.33% |
THE
OHIO MANUFACTURERS ASSOCIATION |
|
| FBO
THE OHIO MANUFACTURERS ASSN DEF |
|
| ATTN
PLAN TRUSTEE |
|
| COMP |
|
| 33
NORTH HIGH STREET STE 600 |
|
| COLUMBUS
OH 43215-3005 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
LARGECAP
VALUE III (R5) |
45.24% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
LARGECAP
VALUE III (R5) |
15.70% |
DELAWARE
CHARTER GUAR & TRUST CO |
|
| FBO
PRINCIPAL TRUST COMPANY |
|
| VEBA
TRUST IBEW HEALTH SAVING PLAN |
|
| SOUTHWEST
SCHOOL CORPORATION |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
LARGECAP
VALUE III (R5) |
9.79% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
NIPPON LIFE INS CO EXEC NQ |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
LARGECAP
VALUE III (R5) |
8.50% |
APPALACHIAN
REGIONAL HEALTHCARE |
|
| SYSTEM |
|
| FBO
EXECUTIVE 457B OF ARHS INC |
|
| ATTN
AMY CRABBE |
|
| PO
BOX 2600 |
|
| BOONE
NC 28607-2600 |
|
| |
MIDCAP
(A) |
14.39% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
MIDCAP
(A) |
7.05% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY ACCOUNT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
MIDCAP
(C) |
37.57% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
MIDCAP
(C) |
21.42% |
CHARLES
SCHWAB & CO INC |
|
| FBO
SPECIAL CUSTODY ACCOUNTS |
|
| ATTN
MUTUAL FUNDS |
|
| 211
MAIN ST |
|
| SAN
FRANCISCO CA 94105-1901 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
(C) |
7.58% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
MIDCAP
(I) |
16.45% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
MIDCAP
(I) |
13.45% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
MIDCAP
(I) |
11.23% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
MIDCAP
(I) |
10.11% |
RAYMOND
JAMES |
|
| OMNIBUS
FOR MUTUAL FUNDS |
|
| HOUSE
ACCT FIRM 92500015 |
|
| ATTN:
COURTNEY WALLER |
|
| 880
CARILLON PKWY |
|
| ST
PETERSBURG FL 33716-1102 |
|
| |
MIDCAP
(I) |
6.98% |
MLPF&S
FOR THE SOLE |
|
| BENEFIT
OF ITS CUSTOMERS |
|
| ATTN
FUND ADMINISTRATION |
|
| 4800
DEER LAKE DR E FL 3 |
|
| JACKSONVILLE
FL 32246-6484 |
|
| |
MIDCAP
(I) |
6.45% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FOR THE |
|
| BENIFIT
OF CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
MIDCAP
(I) |
5.61% |
UBS
WM USA |
|
| 0O0
11011 6100 |
|
| OMNI
ACCOUNT M/F |
|
| SPEC
CDY A/C EBOC UBSFSI |
|
| 1000
HARBOR BLVD |
|
| WEEHAWKEN
NJ 07086-6761 |
|
| |
MIDCAP
(I) |
5.14% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
| FBO
#41999970 |
|
| 707
2ND AVE S |
|
| MINNEAPOLIS
MN 55402-2405 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
(I) |
5.11% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
MIDCAP
(I) |
5.00% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
MIDCAP
(R1) |
96.49% |
VOYA
INSTITUTIONAL TRUST COMPANY |
|
| 1
ORANGE WAY |
|
| WINDSOR
CT 06095-4773 |
|
| |
MIDCAP
(R3) |
44.51% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
MIDCAP
(R3) |
15.62% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
(R4) |
30.23% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
MIDCAP
(R4) |
19.32% |
LINCOLN
RETIREMENT SERVICES CO |
|
| FBO
UT SYSTEM ORP |
|
| PO
BOX 7876 |
|
| FORT
WAYNE IN 46801-7876 |
|
| |
MIDCAP
(R4) |
13.85% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
(R4) |
7.69% |
LINCOLN
RETIREMENT SERVICES CO |
|
| FBO
UT SYSTEM TSA |
|
| PO
BOX 7876 |
|
| FORT
WAYNE IN 46801-7876 |
|
| |
MIDCAP
(R4) |
7.37% |
JOHN
HANCOCK TRUST COMPANY LLC |
|
| 200
BERKELEY ST STE 7 |
|
| BOSTON
MA 02116-5038 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
(R5) |
23.39% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
MIDCAP
(R5) |
22.58% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
MIDCAP
(R5) |
8.71% |
TIAA
TRUST, N.A. AS CUST/TTEE |
|
| OF
RETIREMENT PLANS |
|
| RECORDKEPT
BY TIAA |
|
| ATTN:
FUND OPERATIONS |
|
| 8500
ANDREW CARNEGIE BLVD |
|
| CHARLOTTE
NC 28262-8500 |
|
| |
MIDCAP
(R6) |
35.32% |
EDWARD
D JONES & CO |
|
| FOR
THE BENEFIT OF CUSTOMERS |
|
| 12555
MANCHESTER RD |
|
| SAINT
LOUIS MO 63131-3710 |
|
| |
MIDCAP
(R6) |
16.32% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 211
MAIN STREET |
|
| SAN
FRANCISCO CA 94105-1901 |
|
| |
MIDCAP
(R6) |
11.33% |
MLPF&S
FOR THE SOLE |
|
| BENEFIT
OF ITS CUSTOMERS |
|
| ATTN
FUND ADMINISTRATION |
|
| 4800
DEER LAKE DR E FL 2 |
|
| JACKSONVILLE
FL 32246-6484 |
|
| |
MIDCAP
(R6) |
6.11% |
WELLS
FARGO BANK NA |
|
| FBO
OMNIBUS CASH CASH |
|
| XXXX0 |
|
| PO
BOX 1533 |
|
| MINNEAPOLIS
MN 55480-1533 |
|
| |
MIDCAP
GROWTH (I) |
25.49% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
MIDCAP
GROWTH (I) |
12.61% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
GROWTH (I) |
11.34% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
MIDCAP
GROWTH (I) |
6.80% |
NATIONWIDE
TRUST COMPANY FSB |
|
| C/O
IPO PORTFOLIO ACCOUNTING |
|
| PO
BOX 182029 |
|
| COLUMBUS
OH 43218-2029 |
|
| |
MIDCAP
GROWTH (R1) |
82.19% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
GROWTH (R1) |
10.03% |
MID
ATLANTIC TRUST COMPANY FBO |
|
| BRAINLINK
INTERNATIONAL INC 401(K) |
|
| 1251
WATERFRONT PLACE SUITE 525 |
|
| PITTSBURGH
PA 15222-4228 |
|
| |
MIDCAP
GROWTH (R3) |
36.06% |
SAMMONS
INSTITUTIONAL GROUP |
|
| 8300
MILLS CIVIC PKWY |
|
| WDM
IA 50266-3833 |
|
| |
MIDCAP
GROWTH (R3) |
17.62% |
EMPOWER
TRUST FBO |
|
| EMPLOYEE
BENEFIT CLIENTS 401K |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
MIDCAP
GROWTH (R3) |
14.37% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
GROWTH (R3) |
6.36% |
FIIOC |
|
| FBO |
|
| DEFOE
CORP 401K EMPLOYEE SAVINGS |
|
| PLAN |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1987 |
|
| |
MIDCAP
GROWTH (R4) |
75.54% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
GROWTH (R4) |
9.63% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
FIRST COUNTY BANK NQ DEF COMP |
|
| AND
SERP |
|
| ATTN
PLAN TRUSTEE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
MIDCAP
GROWTH (R5) |
46.96% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
GROWTH (R5) |
12.97% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
GRIMMWAY FARMS EXEC DEFERRED |
|
| ATTN
PLAN TRUSTEE |
|
| COMP |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
MIDCAP
GROWTH (R5) |
7.02% |
MID
ATLANTIC TRUST COMPANY FBO |
|
| MATC
OMNIBUS DIV REINVEST |
|
| 1251
WATERFRONT PL STE 525 |
|
| PITTSBURGH
PA 15222-4228 |
|
| |
MIDCAP
GROWTH (R5) |
6.16% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
NQ DB OF AAA ARIZONA |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
MIDCAP
GROWTH III (I) |
35.57% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
GROWTH III (I) |
12.97% |
LIFETIME
2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
GROWTH III (I) |
12.78% |
LIFETIME
2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
GROWTH III (I) |
10.42% |
LIFETIME
2050 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
GROWTH III (R1) |
85.42% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
GROWTH III (R1) |
10.21% |
STATE
STREET BANK CUST |
|
| FBO
ADP ACCESS LARGE MARKET |
|
| 401(K)
PLAN |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
MIDCAP
GROWTH III (R3) |
82.52% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
GROWTH III (R4) |
87.91% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
GROWTH III (R5) |
78.00% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
GROWTH III (R5) |
8.83% |
CAMPUS
USA CREDIT UNION |
|
| FBO
457F OF CAMPUS CREDIT UNION |
|
| ATTN
JILL HARPER |
|
| PO
BOX 147029 |
|
| GAINESVILLE
FL 32614-7029 |
|
| |
MIDCAP
GROWTH III (R5) |
5.11% |
PROVIA
DOOR INC |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
NQ DEF COMP OF PROVIA DOOR |
|
| 2150
SR 39 WEST |
|
| SUGARCREEK
OH 44681-9201 |
|
| |
MIDCAP
S&P 400 INDEX (I) |
13.08% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
S&P 400 INDEX (I) |
12.32% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
S&P 400 INDEX (I) |
9.02% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 211
MAIN STREET |
|
| SAN
FRANCISCO CA 94105-1901 |
|
| |
MIDCAP
S&P 400 INDEX (I) |
8.91% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
MIDCAP
S&P 400 INDEX (I) |
7.02% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
MIDCAP
S&P 400 INDEX (I) |
6.62% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
MIDCAP
S&P 400 INDEX (R1) |
51.17% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
S&P 400 INDEX (R1) |
8.45% |
ASCENSUS
TRUST COMPANY FBO |
|
| GXM
CONSULTING 401K PLAN |
|
| 213950 |
|
| PO
BOX 10758 |
|
| FARGO
ND 58106-0758 |
|
| |
MIDCAP
S&P 400 INDEX (R3) |
39.73% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
S&P 400 INDEX (R4) |
32.97% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
S&P 400 INDEX (R4) |
21.10% |
VOYA
INSTITUTIONAL TRUST COMPANY |
|
| 1
ORANGE WAY |
|
| WINDSOR
CT 06095-4773 |
|
| |
MIDCAP
S&P 400 INDEX (R4) |
5.92% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
MIDCAP
S&P 400 INDEX (R5) |
54.13% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
S&P 400 INDEX (R5) |
5.24% |
EMPOWER
TRUST FBO |
|
| ANNE
ARUNDEL MEDICAL CENTER EMP SAL |
|
| C/O
FASCORE LLC |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
MIDCAP
S&P 400 INDEX (R6) |
17.56% |
DIVERSIFIED
GROWTH ACCOUNT |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
S&P 400 INDEX (R6) |
11.68% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
S&P 400 INDEX (R6) |
8.20% |
DIVERSIFIED
GROWTH VOLATILITY |
|
| CONTROL
ACCOUNT |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
S&P 400 INDEX (R6) |
7.24% |
LIFETIME
HYBRID 2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
S&P 400 INDEX (R6) |
6.87% |
LIFETIME
HYBRID 2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
S&P 400 INDEX (R6) |
5.88% |
LIFETIME
HYBRID 2035 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
S&P 400 INDEX (R6) |
5.55% |
LIFETIME
HYBRID 2025 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
S&P 400 INDEX (R6) |
5.13% |
LIFETIME
HYBRID 2045 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
VALUE I (A) |
21.89% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
MIDCAP
VALUE I (I) |
71.96% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
MIDCAP
VALUE I (I) |
9.13% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
MIDCAP
VALUE I (R1) |
93.19% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
VALUE I (R3) |
76.16% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
VALUE I (R4) |
60.15% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
VALUE I (R4) |
9.61% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY ACCT |
|
| FBO
CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
MIDCAP
VALUE I (R4) |
8.51% |
VRSCO |
|
| FBO
AIGFSB CUST TTEE FBO |
|
| SLIDELL
MEMORIAL 457 DEF COMP PLAN |
|
| 2727-A
ALLEN PARKWAY 4-D1 |
|
| HOUSTON
TX 77019-2107 |
|
| |
MIDCAP
VALUE I (R4) |
5.65% |
VRSCO |
|
| FBO
AIGFSB CUST TTEE FBO |
|
| SLIDELL
MEMORIAL HOSPITAL 401A |
|
| 2727-A
ALLEN PARKWAY 4-D1 |
|
| HOUSTON
TX 77019-2107 |
|
| |
MIDCAP
VALUE I (R5) |
59.13% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
VALUE I (R5) |
5.19% |
COUNSEL
TRUST DBA MATC FBO |
|
| TRADITION
AMERICA HOLDINGS INC. |
|
| 1251
WATERFRONT PLACE SUITE 525 |
|
| PITTSBURGH
PA 15222-4228 |
|
| |
MIDCAP
VALUE I (R6) |
51.05% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
VALUE I (R6) |
9.75% |
LIFETIME
2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
MIDCAP
VALUE I (R6) |
8.95% |
LIFETIME
2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
MIDCAP
VALUE I (R6) |
7.93% |
LIFETIME
2050 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
OVERSEAS
(I) |
18.66% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM FUNDS |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
OVERSEAS
(I) |
11.92% |
LIFETIME
2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
OVERSEAS
(I) |
11.05% |
LIFETIME
2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
OVERSEAS
(I) |
9.60% |
LIFETIME
2050 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
OVERSEAS
(I) |
7.76% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
OVERSEAS
(I) |
5.22% |
SAM
BALANCED PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
OVERSEAS
(R3) |
68.84% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
DUPAGE INTERNAL MEDICINE LLC |
|
| 228
OXFORD AVE |
|
| CLARENDON
HLS IL 60514-2807 |
|
| |
OVERSEAS
(R3) |
17.98% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
OVERSEAS
(R3) |
5.17% |
BEHLER-YOUNG
COMPANY |
|
| FBO
BEHLER-YOUNG COMPANY DEF COMP |
|
| ATTN
PLAN TRUSTEE |
|
| 4900
CLYDE PARK AVE SW |
|
| GRAND
RAPIDS MI 49509-5118 |
|
| |
OVERSEAS
(R3) |
5.12% |
D
P ELECTRIC INC |
|
| FBO
D P ELECTRIC NQ RET PLAN |
|
| ATTN
DAN PUENTE |
|
| 6002
S ASH AVE |
|
| TEMPE
AZ 85283-2873 |
|
| |
OVERSEAS
(R4) |
99.92% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (A) |
33.81% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (A) |
8.09% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (I) |
21.31% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (I) |
15.40% |
SAM
BALANCED PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (I) |
13.77% |
SAM
CONS GROWTH PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (I) |
12.27% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
| FBO
#41999970 |
|
| 707
2ND AVE S |
|
| MINNEAPOLIS
MN 55402-2405 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
CAPITAL APPRECIATION (I) |
11.47% |
SAM
STRATEGIC GROWTH PORTFOLIO PIF |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (R1) |
99.99% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (R3) |
55.27% |
SAMMONS
INSTITUTIONAL GROUP |
|
| 8300
MILLS CIVIC PKWY |
|
| WDM
IA 50266-3833 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (R3) |
37.68% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (R4) |
80.84% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (R4) |
13.27% |
EMPOWER
TRUST FBO |
|
| EMPLOYEE
BENEFITS CLIENTS 401K |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
PRINCIPAL
CAPITAL APPRECIATION (R5) |
85.46% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME STRATEGIC INC (A) |
19.87% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME STRATEGIC INC (I) |
87.30% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME STRATEGIC INC (I) |
8.54% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME STRATEGIC INC (R1) |
99.45% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME STRATEGIC INC (R3) |
87.96% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME STRATEGIC INC (R4) |
57.01% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME STRATEGIC INC (R4) |
17.70% |
RANGER
PIPELINES INCORPORATED |
|
| FBO
RANGER PIPELINES INC NQ EXCESS |
|
| PLAN |
|
| ATTN
PLAN TRUSTEE |
|
| 1790
YOSEMITE AVE |
|
| SAN
FRANCISCO CA 94124-2622 |
|
| |
PRINCIPAL
LIFETIME STRATEGIC INC (R4) |
5.52% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
CRST INTL NQ PLAN |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
PRINCIPAL
LIFETIME STRATEGIC INC (R5) |
72.20% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME STRATEGIC INC (R5) |
12.74% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
EXEC 457B OF SANFORD HEALTH |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2015 (I) |
86.86% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2015 (I) |
11.31% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2015 (R1) |
99.99% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2015 (R3) |
98.08% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2015 (R4) |
97.60% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2015 (R5) |
90.46% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2015 (R5) |
6.10% |
MAPS
CREDIT UNION |
|
| ATTN
BARBARA CECIL |
|
| FBO
457B DEF COMP OF MAPS CU |
|
| 1900
HINES STREET NW PO BOX 12398 |
|
| SALEM
OR 97309-0398 |
|
| |
PRINCIPAL
LIFETIME 2020 (A) |
16.94% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2020 (I) |
87.04% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2020 (I) |
10.06% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2020 (R1) |
97.75% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2020 (R3) |
90.48% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2020 (R4) |
91.30% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2020 (R5) |
83.71% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2020 (R5) |
8.10% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
EXEC 457B OF SANFORD HEALTH |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
PRINCIPAL
LIFETIME 2025 (I) |
86.54% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2025 (I) |
12.08% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2025 (R1) |
99.99% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2025 (R3) |
94.06% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2025 (R4) |
79.76% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2025 (R5) |
91.38% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2030 (A) |
16.52% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME 2030 (I) |
88.19% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2030 (I) |
8.70% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2030 (R1) |
92.61% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2030 (R3) |
90.58% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2030 (R4) |
77.94% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2030 (R5) |
83.93% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2030 (R5) |
6.15% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
EXEC 457B OF SANFORD HEALTH |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
PRINCIPAL
LIFETIME 2035 (I) |
86.21% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2035 (I) |
11.64% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2035 (R1) |
99.99% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2035 (R3) |
97.25% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2035 (R4) |
82.93% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2035 (R4) |
5.02% |
OCEANSIDE
AUTO COUNTRY INC |
|
| FBO
OCEANSIDE AUTO COUNTRY INC DEF |
|
| ATTN
PLAN TRUSTEE |
|
| COMP
PLAN |
|
| 6030
AVENIDA ENCINIAS STE 200 |
|
| CARLSBAD
CA 92011-1062 |
|
| |
PRINCIPAL
LIFETIME 2035 (R5) |
92.35% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2040 (A) |
13.67% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME 2040 (I) |
87.25% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2040 (I) |
9.78% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2040 (R1) |
91.15% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2040 (R1) |
6.75% |
STATE
STREET BANK CUST |
|
| FBO
ADP ACCESS LARGE MARKET |
|
| 401(K)
PLAN |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
PRINCIPAL
LIFETIME 2040 (R3) |
93.29% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2040 (R4) |
88.21% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2040 (R5) |
84.25% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2040 (R5) |
9.83% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
EXEC 457B OF SANFORD HEALTH |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
PRINCIPAL
LIFETIME 2045 (I) |
82.95% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2045 (I) |
14.93% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2045 (R1) |
99.58% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2045 (R3) |
98.52% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2045 (R4) |
92.75% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2045 (R5) |
95.73% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2050 (A) |
14.18% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME 2050 (I) |
85.13% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2050 (I) |
12.02% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2050 (R1) |
92.68% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2050 (R1) |
6.99% |
STATE
STREET BANK CUST |
|
| FBO
ADP ACCESS LARGE MARKET |
|
| 401(K)
PLAN |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2050 (R3) |
97.31% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2050 (R4) |
90.48% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
PRINCIPAL
LIFETIME 2050 (R4) |
5.39% |
PRINCIPAL
TRUST COMPANY |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
SANFORD 2017 SUPP EXEC RET PLAN |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
PRINCIPAL
LIFETIME 2050 (R5) |
87.05% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2050 (R5) |
6.84% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
EXEC 457B OF SANFORD HEALTH |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
PRINCIPAL
LIFETIME 2055 (I) |
82.46% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2055 (I) |
14.22% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2055 (R1) |
94.72% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2055 (R1) |
5.27% |
MID
ATLANTIC TRUST COMPANY FBO |
|
| UNITED
STATES SQUASH RACQUETS 401(K |
|
| 1251
WATERFRONT PLACE SUITE 525 |
|
| PITTSBURGH
PA 15222-4228 |
|
| |
PRINCIPAL
LIFETIME 2055 (R3) |
98.66% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2055 (R4) |
98.15% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2055 (R5) |
93.12% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2060 (I) |
86.91% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2060 (I) |
10.03% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2060 (R1) |
91.14% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2060 (R1) |
8.85% |
STATE
STREET BANK CUST |
|
| FBO
ADP ACCESS LARGE MARKET |
|
| 401(K)
PLAN |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2060 (R3) |
97.89% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2060 (R4) |
94.08% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2060 (R5) |
88.64% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2065 (I) |
87.86% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2065 (I) |
9.67% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2065 (R1) |
100.00% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2065 (R3) |
95.87% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2065 (R4) |
95.32% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2065 (R5) |
94.93% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2070 (I) |
91.95% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| FUNDS |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2070 (I) |
7.92% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2070 (J) |
23.70% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| IRA
ALEXANDER TITUS |
|
| 3924
CANDIA AVE |
|
| NORTH
PORT FL 34286-7471 |
|
| |
PRINCIPAL
LIFETIME 2070 (J) |
20.39% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| IRA
JUSTIN KAYNES |
|
| 15062
HUDSON BLVD |
|
| STILLWATER
MN 55082-2018 |
|
| |
PRINCIPAL
LIFETIME 2070 (J) |
10.09% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| ROTH
IRA FBO DOUGLAS S DANIELSEN |
|
| 1319
W 6TH ST |
|
| CEDAR
FALLS IA 50613-2334 |
|
| |
PRINCIPAL
LIFETIME 2070 (J) |
8.18% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| ROTH
IRA NORA R ZIMMERMAN |
|
| 3000
CONNECTICUT AVE NW APT 222 |
|
| WASHINGTON
DC 20008-2554 |
|
| |
PRINCIPAL
LIFETIME 2070 (J) |
7.87% |
PRINCIPAL
GLOBAL INVESTORS LLC |
|
| ATTN
SEAN CLINES 801-9A08 |
|
| 801
GRAND AVE |
|
| DES
MOINES IA 50309-8000 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2070 (J) |
7.61% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| IRA
COREY P FARRELL |
|
| 784
FAIRFIELD DR |
|
| WARMINSTER
PA 18974-4339 |
|
| |
PRINCIPAL
LIFETIME 2070 (J) |
5.29% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| IRA
FERNANDO A RIVAS |
|
| 15
CARLS LN |
|
| NEW
MILFORD CT 06776-5136 |
|
| |
PRINCIPAL
LIFETIME 2070 (R1) |
79.91% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2070 (R1) |
20.08% |
PRINCIPAL
GLOBAL INVESTORS LLC |
|
| ATTN
SEAN CLINES 801-9A08 |
|
| 801
GRAND AVE |
|
| DES
MOINES IA 50309-8000 |
|
| |
PRINCIPAL
LIFETIME 2070 (R3) |
94.44% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2070 (R3) |
5.55% |
PRINCIPAL
GLOBAL INVESTORS LLC |
|
| ATTN
SEAN CLINES 801-9A08 |
|
| 801
GRAND AVE |
|
| DES
MOINES IA 50309-8000 |
|
| |
PRINCIPAL
LIFETIME 2070 (R4) |
85.11% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME 2070 (R4) |
14.88% |
PRINCIPAL
GLOBAL INVESTORS LLC |
|
| ATTN
SEAN CLINES 801-9A08 |
|
| 801
GRAND AVE |
|
| DES
MOINES IA 50309-8000 |
|
| |
PRINCIPAL
LIFETIME 2070 (R5) |
94.07% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2070 (R5) |
5.92% |
PRINCIPAL
GLOBAL INVESTORS LLC |
|
| ATTN
SEAN CLINES 801-9A08 |
|
| 801
GRAND AVE |
|
| DES
MOINES IA 50309-8000 |
|
| |
PRINCIPAL
LIFETIME HYBRID INCOME (I) |
59.37% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID INCOME (I) |
18.41% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME HYBRID INCOME (I) |
15.93% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
FBL FINANCIAL GROUP DEF COMP |
|
| ATTN
SUSAN SAGGIONE |
|
| PLAN |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
PRINCIPAL
LIFETIME HYBRID INCOME (R6) |
77.50% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID INCOME (R6) |
7.38% |
BANKERS
TRUST COMPANY |
|
| FBO
PRIN SELECT SVNG EXCESS PLAN |
|
| ATTN
MARK HARRISON |
|
| FOR
EES |
|
| 453
7TH ST PO BOX 897 |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2015 (I) |
78.09% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2015 (I) |
10.66% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2015 (I) |
6.73% |
MINNESOTA
LIFE INSURANCE COMPANY |
|
| 400
ROBERT ST N STE A |
|
| SAINT
PAUL MN 55101-2099 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2015 (R6) |
85.55% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2020 (I) |
58.13% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2020 (I) |
26.93% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2020 (I) |
6.90% |
MINNESOTA
LIFE INSURANCE COMPANY |
|
| 400
ROBERT ST N STE A |
|
| SAINT
PAUL MN 55101-2099 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2020 (R6) |
87.18% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2025 (I) |
58.38% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2025 (I) |
23.79% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2025 (I) |
6.27% |
FIIOC |
|
| FBO |
|
| BRADY
TRANE SERVICE INC 401K PLAN |
|
| AND
TRUST |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1987 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2025 (R6) |
87.24% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2030 (I) |
55.80% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2030 (I) |
22.71% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2030 (I) |
10.21% |
FIIOC |
|
| FBO |
|
| BRADY
TRANE SERVICE INC 401K PLAN |
|
| AND
TRUST |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1987 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2030 (R6) |
82.54% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2030 (R6) |
7.13% |
BANKERS
TRUST COMPANY |
|
| FBO
PRIN SELECT SVNG EXCESS PLAN |
|
| ATTN
MARK HARRISON |
|
| FOR
EES |
|
| 453
7TH ST PO BOX 897 |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2030 (R6) |
5.30% |
TIAA
TRUST, N.A. AS CUST/TTEE |
|
| OF
RETIREMENT PLANS |
|
| RECORDKEPT
BY TIAA |
|
| ATTN:
FUND OPERATIONS |
|
| 8500
ANDREW CARNEGIE BLVD |
|
| CHARLOTTE
NC 28262-8500 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2035 (I) |
56.03% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2035 (I) |
24.16% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2035 (I) |
7.99% |
FIIOC |
|
| FBO |
|
| BRADY
TRANE SERVICE INC 401K PLAN |
|
| AND
TRUST |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1987 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2035 (I) |
5.46% |
MINNESOTA
LIFE INSURANCE COMPANY |
|
| 400
ROBERT ST N STE A |
|
| SAINT
PAUL MN 55101-2099 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2035 (R6) |
81.40% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2035 (R6) |
7.54% |
TIAA
TRUST, N.A. AS CUST/TTEE |
|
| OF
RETIREMENT PLANS |
|
| RECORDKEPT
BY TIAA |
|
| ATTN:
FUND OPERATIONS |
|
| 8500
ANDREW CARNEGIE BLVD |
|
| CHARLOTTE
NC 28262-8500 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2040 (I) |
58.07% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2040 (I) |
20.72% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2040 (I) |
7.99% |
MINNESOTA
LIFE INSURANCE COMPANY |
|
| 400
ROBERT ST N STE A |
|
| SAINT
PAUL MN 55101-2099 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2040 (I) |
5.93% |
FIIOC |
|
| FBO |
|
| BRADY
TRANE SERVICE INC 401K PLAN |
|
| AND
TRUST |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1987 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2040 (R6) |
83.79% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2040 (R6) |
8.22% |
TIAA
TRUST, N.A. AS CUST/TTEE |
|
| OF
RETIREMENT PLANS |
|
| RECORDKEPT
BY TIAA |
|
| ATTN:
FUND OPERATIONS |
|
| 8500
ANDREW CARNEGIE BLVD |
|
| CHARLOTTE
NC 28262-8500 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2045 (I) |
58.73% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2045 (I) |
23.84% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2045 (I) |
8.62% |
FIIOC |
|
| FBO |
|
| BRADY
TRANE SERVICE INC 401K PLAN |
|
| AND
TRUST |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1987 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2045 (I) |
5.36% |
MINNESOTA
LIFE INSURANCE COMPANY |
|
| 400
ROBERT ST N STE A |
|
| SAINT
PAUL MN 55101-2099 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2045 (R6) |
87.58% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2045 (R6) |
8.06% |
TIAA
TRUST, N.A. AS CUST/TTEE |
|
| OF
RETIREMENT PLANS |
|
| RECORDKEPT
BY TIAA |
|
| ATTN:
FUND OPERATIONS |
|
| 8500
ANDREW CARNEGIE BLVD |
|
| CHARLOTTE
NC 28262-8500 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2050 (I) |
59.18% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2050 (I) |
25.63% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2050 (I) |
7.06% |
MINNESOTA
LIFE INSURANCE COMPANY |
|
| 400
ROBERT ST N STE A |
|
| SAINT
PAUL MN 55101-2099 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2050 (I) |
5.32% |
FIIOC |
|
| FBO |
|
| BRADY
TRANE SERVICE INC 401K PLAN |
|
| AND
TRUST |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1987 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2050 (R6) |
91.59% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2055 (I) |
58.15% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2055 (I) |
27.38% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2055 (I) |
7.15% |
MINNESOTA
LIFE INSURANCE COMPANY |
|
| 400
ROBERT ST N STE A |
|
| SAINT
PAUL MN 55101-2099 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2055 (I) |
5.72% |
FIIOC |
|
| FBO |
|
| BRADY
TRANE SERVICE INC 401K PLAN |
|
| AND
TRUST |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1987 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2055 (R6) |
93.89% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2060 (I) |
48.25% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2060 (I) |
30.02% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2060 (I) |
9.70% |
MINNESOTA
LIFE INSURANCE COMPANY |
|
| 400
ROBERT ST N STE A |
|
| SAINT
PAUL MN 55101-2099 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2060 (I) |
9.70% |
FIIOC |
|
| FBO |
|
| BRADY
TRANE SERVICE INC 401K PLAN |
|
| AND
TRUST |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1987 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2060 (R6) |
90.10% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2065 (I) |
72.54% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2065 (I) |
16.15% |
MINNESOTA
LIFE INSURANCE COMPANY |
|
| 400
ROBERT ST N STE A |
|
| SAINT
PAUL MN 55101-2099 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2065 (R6) |
91.54% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2070 (I) |
76.57% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2070 (I) |
23.42% |
PRINCIPAL
GLOBAL INVESTORS LLC |
|
| ATTN
SEAN CLINES 801-9A08 |
|
| 801
GRAND AVE |
|
| DES
MOINES IA 50309-8000 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2070 (J) |
32.50% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| IRA
AFROZE ASHRAF |
|
| 4718
JAYMAR DR |
|
| SUGAR
LAND TX 77479-5232 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2070 (J) |
19.09% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| ROTH
IRA ANTONIO JACKSON |
|
| 1050
KINAU ST APT 1004 |
|
| HONOLULU
HI 96814-1020 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2070 (J) |
15.35% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| IRA
KISHA DANIELS |
|
| 5097
CUTTY LN |
|
| WARREN
MI 48092-6324 |
|
| |
PRINCIPAL
LIFETIME HYBRID 2070 (J) |
5.87% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| IRA
MICHAEL D HAUSCHEL |
|
| 12100
E KILLENWOOD CT |
|
| WICHITA
KS 67206-4119 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2070 (R6) |
92.52% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
REAL
ESTATE SECURITIES (A) |
14.89% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
REAL
ESTATE SECURITIES (A) |
9.01% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
REAL
ESTATE SECURITIES (A) |
6.73% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
REAL
ESTATE SECURITIES (C) |
27.34% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
REAL
ESTATE SECURITIES (C) |
17.71% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
REAL
ESTATE SECURITIES (C) |
13.61% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
REAL
ESTATE SECURITIES (C) |
7.43% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
REAL
ESTATE SECURITIES (I) |
31.19% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
REAL
ESTATE SECURITIES (I) |
20.80% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
REAL
ESTATE SECURITIES (I) |
13.20% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FOR THE |
|
| BENIFIT
OF CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
REAL
ESTATE SECURITIES (R1) |
62.39% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
REAL
ESTATE SECURITIES (R1) |
12.92% |
MG
TRUST COMPANY CUST |
|
| FBO
LIOKAREAS CONSTRUCTION CO |
|
| 717
17TH ST STE 1300 |
|
| DENVER
CO 80202-3304 |
|
| |
REAL
ESTATE SECURITIES (R1) |
10.54% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
REAL
ESTATE SECURITIES (R1) |
6.67% |
ASCENSUS
TRUST COMPANY FBO |
|
| BROADMOOR
GOLF CLUB 401K RETIREME |
|
| PO
BOX 10758 |
|
| FARGO
ND 58106-0758 |
|
| |
REAL
ESTATE SECURITIES (R3) |
24.76% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
REAL
ESTATE SECURITIES (R3) |
17.38% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
REAL
ESTATE SECURITIES (R3) |
10.41% |
SAMMONS
INSTITUTIONAL GROUP |
|
| 8300
MILLS CIVIC PKWY |
|
| WDM
IA 50266-3833 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
REAL
ESTATE SECURITIES (R3) |
5.61% |
TIAA
TRUST, N.A. AS CUST/TTEE |
|
| OF
RETIREMENT PLANS |
|
| RECORDKEPT
BY TIAA |
|
| ATTN:
FUND OPERATIONS |
|
| 8500
ANDREW CARNEGIE BLVD |
|
| CHARLOTTE
NC 28262-8500 |
|
| |
REAL
ESTATE SECURITIES (R4) |
36.59% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
REAL
ESTATE SECURITIES (R4) |
11.71% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
REAL
ESTATE SECURITIES (R4) |
9.48% |
EMPOWER
TRUST FBO |
|
| EMPOWER
BENEFIT PLANS |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
REAL
ESTATE SECURITIES (R4) |
9.24% |
EMPOWER
TRUST FBO |
|
| EMPLOYEE
BENEFITS CLIENTS 401K |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
REAL
ESTATE SECURITIES (R5) |
36.45% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
REAL
ESTATE SECURITIES (R5) |
9.13% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
REAL
ESTATE SECURITIES (R5) |
6.94% |
EMPOWER
TRUST FBO |
|
| EMPOWER
BENEFIT PLANS |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
REAL
ESTATE SECURITIES (R5) |
6.66% |
MATRIX
TRUST COMPANY CUST FBO |
|
| SOUTHERN
CALIFORNIA SHEET METAL WOR |
|
| PO
BOX 52129 |
|
| PHOENIX
AZ 85072-2129 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
REAL
ESTATE SECURITIES (R6) |
19.86% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
REAL
ESTATE SECURITIES (R6) |
7.50% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| 499
WASHINGTON BLVD |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
REAL
ESTATE SECURITIES (R6) |
5.97% |
LIFETIME
2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
BALANCED PORTFOLIO (A) |
17.15% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
SAM
BALANCED PORTFOLIO (A) |
15.64% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SAM
BALANCED PORTFOLIO (A) |
5.17% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
SAM
BALANCED PORTFOLIO (C) |
24.60% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SAM
BALANCED PORTFOLIO (C) |
11.70% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
SAM
BALANCED PORTFOLIO (C) |
6.48% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
SAM
BALANCED PORTFOLIO (I) |
80.66% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SAM
BALANCED PORTFOLIO (I) |
6.17% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
BALANCED PORTFOLIO (R1) |
83.17% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
BALANCED PORTFOLIO (R1) |
8.92% |
STIFEL
NICOLAUS & CO INC |
|
| EXCLUSIVE
BENEFIT OF CUSTOMERS |
|
| 501
N BROADWAY |
|
| SAINT
LOUIS MO 63102-2188 |
|
| |
SAM
BALANCED PORTFOLIO (R3) |
65.96% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
BALANCED PORTFOLIO (R3) |
6.61% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
SOUTHEASTERN PLUMBING AND |
|
| HEATING
INC CASH BALANCE PLAN |
|
| 300
W 23RD ST |
|
| CHARLOTTE
NC 28206-3107 |
|
| |
SAM
BALANCED PORTFOLIO (R3) |
6.37% |
PRINCIPAL
TRUST COMPANY |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
V K KNOWLTON DEF COMP PLAN |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
SAM
BALANCED PORTFOLIO (R3) |
6.14% |
CBNA
AS CUSTODIAN FBO |
|
| CITY
OF OCOEE VEBA HEALTH SAVINGS P |
|
| 6
RHOADS DR STE 7 |
|
| UTICA
NY 13502-6317 |
|
| |
SAM
BALANCED PORTFOLIO (R4) |
56.59% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
BALANCED PORTFOLIO (R4) |
36.21% |
MATRIX
TRUST CO AS AGENT FBO |
|
| PRO-SET
INC FINANCIAL SECURITY TRUS |
|
| PO
BOX 52129 |
|
| PHOENIX
AZ 85072-2129 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SAM
BALANCED PORTFOLIO (R5) |
93.22% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (A) |
18.80% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (A) |
7.53% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (A) |
6.24% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (C) |
19.75% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
SAM
CONSERVATIVE BALANCED PORT (C) |
18.77% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (C) |
5.70% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (I) |
79.25% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (R1) |
52.27% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SAM
CONSERVATIVE BALANCED PORT (R1) |
43.47% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
DEV MEDICAL ASSOCIATES SC CASH |
|
| BALANCE
PENSION PLAN |
|
| 5600
W ADDISON ST STE 400 |
|
| CHICAGO
IL 60634-4400 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (R3) |
62.02% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (R3) |
8.85% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
DANCKER, SELLEW & DOUGLAS INC |
|
| SUPP
EXEC RET PLAN |
|
| ATTN
PLAN TRUSTEE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (R3) |
5.77% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
KIDS UNLIMITED OF OREGON 457F |
|
| PLAN |
|
| ATTN
PLAN TRUSTEE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (R4) |
43.49% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (R4) |
39.69% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
B&G AND AFFILIATES EXEC RET PLA |
|
| N |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (R5) |
76.63% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
CONSERVATIVE BALANCED PORT (R5) |
16.16% |
KGP
TELECOMMUNICATIONS LLC |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
KGPCO PHANTOM UNITS PLAN |
|
| 3305
HIGHWAY 60 WEST |
|
| FAIRBAULT
MN 55021-4869 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SAM
CONSERVATIVE GROWTH PORT (A) |
12.80% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SAM
CONSERVATIVE GROWTH PORT (A) |
11.36% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
SAM
CONSERVATIVE GROWTH PORT (A) |
5.17% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
SAM
CONSERVATIVE GROWTH PORT (C) |
18.02% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SAM
CONSERVATIVE GROWTH PORT (C) |
7.12% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
|
| |
SAM
CONSERVATIVE GROWTH PORT (I) |
80.68% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
CONSERVATIVE GROWTH PORT (R1) |
99.99% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
CONSERVATIVE GROWTH PORT (R3) |
71.24% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
CONSERVATIVE GROWTH PORT (R3) |
5.62% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
EXEC NQ OF FOND DU LAC BAND |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SAM
CONSERVATIVE GROWTH PORT (R4) |
71.56% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
CONSERVATIVE GROWTH PORT (R4) |
14.44% |
WALSER
AUTOMOTIVE GROUP LLC |
|
| FBO
WALSER AUTO GROUP NQ LONG TERM |
|
| ATTN
PLAN TRUSTEE |
|
| INCENTIVE
PLAN |
|
| 7700
FRANCE AVENUE S SUITE 410N |
|
| EDINA
MN 55435-5869 |
|
| |
SAM
CONSERVATIVE GROWTH PORT (R5) |
93.44% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (A) |
25.89% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (A) |
7.96% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (C) |
33.57% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (C) |
6.61% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (C) |
5.23% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (I) |
69.01% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SAM
FLEXIBLE INCOME PORTFOLIO (I) |
6.73% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (I) |
5.66% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (I) |
5.48% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (R1) |
60.40% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
CONCORP CONCRETE INC DEFINED |
|
| BENEFIT
PENSION PLAN |
|
| 2485
ASHCROFT AVE |
|
| CLOVIS
CA 93611-6001 |
|
| |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (R1) |
24.24% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
DEV MEDICAL ASSOCIATES SC CASH |
|
| BALANCE
PENSION PLAN |
|
| 5600
W ADDISON ST STE 400 |
|
| CHICAGO
IL 60634-4400 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (R1) |
12.80% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (R3) |
73.35% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (R3) |
11.87% |
MID
ATLANTIC TRUST COMPANY FBO |
|
| BUFFALO
ULTRASOUND INC 401 K |
|
| PROFIT
SHARING PLAN & TRUST |
|
| 1251
WATERFRONT PLACE SUITE 525 |
|
| PITTSBURGH
PA 15222-4228 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (R3) |
9.47% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
RVVS CASH BALANCE PLAN |
|
| 15900
JORDAN AVE SE |
|
| PRIOR
LAKE MN 55372-2051 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SAM
FLEXIBLE INCOME PORTFOLIO (R4) |
60.02% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
SCHENECTADY PULMONARY & |
|
| CRITICAL
CARE |
|
| 124
ROSA RD STE 382 |
|
| SCHENECTADY
NY 12308-2144 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (R4) |
15.78% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (R4) |
8.86% |
BRISTOL
BAY NATIVE CORPORATION |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
BBNC NQ DEF COMP PLAN |
|
| 111
W 16TH AVE |
|
| ANCHORAGE
AK 99501-6299 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (R4) |
5.78% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
BURWELL DC PLAN |
|
| ATTN
PLAN TRUSTEE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
SAM
FLEXIBLE INCOME PORTFOLIO (R5) |
92.44% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (A) |
10.46% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (A) |
10.33% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (C) |
13.79% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (I) |
80.22% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SAM
STRATEGIC GROWTH PORTFOLIO (I) |
6.10% |
FIRST
COMMAND FINANCIAL SERVICES |
|
| INC |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
FIRST COMMAND DEF CAREER |
|
| 1
FIRSTCOMM PLAZA |
|
| FORT
WORTH TX 76109-4978 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (R1) |
83.42% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (R1) |
16.57% |
MG
TRUST COMPANY CUST FBO |
|
| PAULDING
EXEMPTED VILLAGE SC 403 B |
|
| 717
17TH ST STE 1300 |
|
| DENVER
CO 80202-3304 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (R3) |
78.31% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (R3) |
6.54% |
UBS
WM USA |
|
| 0O0
11011 6100 |
|
| OMNI
ACCOUNT M/F |
|
| SPEC
CDY A/C EBOC UBSFSI |
|
| 1000
HARBOR BLVD |
|
| WEEHAWKEN
NJ 07086-6761 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (R4) |
45.48% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
BURWELL DC PLAN |
|
| ATTN
PLAN TRUSTEE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (R4) |
38.86% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SAM
STRATEGIC GROWTH PORTFOLIO (R4) |
8.26% |
MATRIX
TRUST CO AS AGENT FBO |
|
| PRO-SET
INC FINANCIAL SECURITY TRUS |
|
| PO
BOX 52129 |
|
| PHOENIX
AZ 85072-2129 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SAM
STRATEGIC GROWTH PORTFOLIO (R5) |
91.71% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SHORT-TERM
INCOME (A) |
34.18% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SHORT-TERM
INCOME (A) |
9.72% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
SHORT-TERM
INCOME (C) |
20.40% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
SHORT-TERM
INCOME (C) |
19.16% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SHORT-TERM
INCOME (I) |
13.00% |
LIFETIME
2020 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SHORT-TERM
INCOME (I) |
12.64% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY ACCOUNT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
SHORT-TERM
INCOME (I) |
10.60% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SHORT-TERM
INCOME (I) |
7.30% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SHORT-TERM
INCOME (I) |
6.66% |
MAC
& CO A/C 135602 |
|
| MUTUAL
FUND OPERATIONS |
|
| 500
GRANT STREET ROOM 151-1010 |
|
| PITTSBURGH
PA 15219-2502 |
|
| |
SHORT-TERM
INCOME (I) |
5.83% |
LIFETIME
STRATEGIC INCOME FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SHORT-TERM
INCOME (I) |
5.42% |
LIFETIME
2025 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SHORT-TERM
INCOME (R1) |
50.52% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SHORT-TERM
INCOME (R1) |
49.47% |
EWR,
INC |
|
| FBO
EXEC RETIREMENT PLAN OF EWR, |
|
| INC |
|
| ATTN
JOSEPH WYRICK |
|
| 6055
PRIMACY PKWY STE 100 |
|
| MEMPHIS
TN 38119-5514 |
|
| |
SHORT-TERM
INCOME (R3) |
46.55% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SHORT-TERM
INCOME (R3) |
13.79% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
DUPAGE INTERNAL MEDICINE LLC |
|
| 228
OXFORD AVE |
|
| CLARENDON
HLS IL 60514-2807 |
|
| |
SHORT-TERM
INCOME (R3) |
6.67% |
DSL
CONSTRUCTION CORP |
|
| FBO
EXEC NQ EXCESS OF DSL |
|
| CONSTRUCTION |
|
| ATTN
PLAN TRUSTEE |
|
| 11300
W OLYMPIC BLVD STE 770 |
|
| LOS
ANGELES CA 90064-1644 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SHORT-TERM
INCOME (R3) |
5.01% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
SSP AMERICAN DEF COMP PLAN |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
SHORT-TERM
INCOME (R4) |
58.13% |
NOMURA
HOLDING AMERICA INC |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
NOMURA SUPP RET SAVINGS |
|
| 309
W 49TH ST |
|
| NEW
YORK NY 10019-9102 |
|
| |
SHORT-TERM
INCOME (R4) |
13.47% |
BRISTOL
BAY NATIVE CORPORATION |
|
| ATTN
PLAN TRUSTEE |
|
| FBO
BBNC NQ DEF COMP PLAN |
|
| 111
W 16TH AVE |
|
| ANCHORAGE
AK 99501-6299 |
|
| |
SHORT-TERM
INCOME (R4) |
8.34% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SHORT-TERM
INCOME (R4) |
6.35% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
LESLIE GABER ASSOC INC |
|
| CASH
BALANCE PLAN |
|
| 24
HILLCREST DR |
|
| COLTS
NECK NJ 07722-2227 |
|
| |
SHORT-TERM
INCOME (R4) |
6.04% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
B&G AND AFFILIATES EXEC RET PLAN |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
SHORT-TERM
INCOME (R5) |
41.91% |
CHURCHILL
MORTGAGE CORPORATION |
|
| FBO
CHURCHILL MORTGAGE CORPORATION |
|
| INCENTIVE
BONUS PLAN |
|
| ATTN
SHEREE BARLETT |
|
| 761
OLD HICKORY BLVD STE 400 |
|
| BRENTWOOD
TN 37027-4519 |
|
| |
SHORT-TERM
INCOME (R5) |
13.36% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
GUEST SERVICES EMPLOYEE SAVINGS |
|
| ATTN
SUSAN SAGGIONE |
|
| PLAN |
|
| 1013
CENTRE ROAD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
SHORT-TERM
INCOME (R5) |
9.89% |
NORTHWEST
ADMINISTRATORS |
|
| ATTN
GAYLE BUSHNELL |
|
| FBO
NQ EXCESS OF NW ADMINISTRATORS |
|
| 2323
EASTLAKE AVE E |
|
| SEATTLE
WA 98102-3305 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SHORT-TERM
INCOME (R5) |
9.05% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| 499
WASHINGTON BLVD |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SHORT-TERM
INCOME (R5) |
6.37% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
(A) |
17.01% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SMALLCAP
(A) |
5.80% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
SMALLCAP
(I) |
27.37% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
| FBO
#41999970 |
|
| 707
2ND AVE S |
|
| MINNEAPOLIS
MN 55402-2405 |
|
| |
SMALLCAP
(I) |
24.02% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SMALLCAP
(I) |
8.37% |
RBC
CAPITAL MARKETS LLC |
|
| MUTUAL
FUND OMNIBUS PROCESSING |
|
| OMNIBUS |
|
| ATTN
MUTUAL FUND OPS MANAGER |
|
| 250
NICOLLET MALL SUITE 1400 |
|
| MINNEAPOLIS
MN 55401-7554 |
|
| |
SMALLCAP
(I) |
7.51% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
SMALLCAP
(I) |
6.46% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SMALLCAP
(I) |
6.29% |
UBS
WM USA |
|
| 0O0
11011 6100 |
|
| OMNI
ACCOUNT M/F |
|
| SPEC
CDY A/C EBOC UBSFSI |
|
| 1000
HARBOR BLVD |
|
| WEEHAWKEN
NJ 07086-6761 |
|
| |
SMALLCAP
(R1) |
70.78% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
(R1) |
12.19% |
FIIOC |
|
| FBO |
|
| ATLANTIC
TOYOTA GROUP INC 401K PLAN |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1987 |
|
| |
SMALLCAP
(R1) |
5.34% |
STATE
STREET BANK CUST |
|
| FBO
ADP ACCESS LARGE MARKET |
|
| 401(K)
PLAN |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
SMALLCAP
(R1) |
5.09% |
FIDELITY
INVESTMENTS INST OPER CO |
|
| INC
FBO |
|
| NATIONAL
NURSING & REHAB 401K |
|
| 100
MAGELLAN WAY (KW1C) |
|
| COVINGTON
KY 41015-1999 |
|
| |
SMALLCAP
(R3) |
42.36% |
SAMMONS
INSTITUTIONAL GROUP |
|
| 8300
MILLS CIVIC PKWY |
|
| WDM
IA 50266-3833 |
|
| |
SMALLCAP
(R3) |
11.58% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
(R4) |
94.29% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| 499
WASHINGTON BLVD |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SMALLCAP
(R5) |
40.86% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| 499
WASHINGTON BLVD |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SMALLCAP
(R5) |
25.84% |
PIMS/PRUDENTIAL
RETIREMENT |
|
| AS
NOMINEE FOR THE TTEE/CUST PL 002 |
|
| CITY
OF JERSEY CITY |
|
| 280
GROVE STREET ROOM 106 |
|
| JERSEY
CITY NJ 07302-3610 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SMALLCAP
(R5) |
17.40% |
VANGUARD
FIDUCIARY TRUST CO CUST |
|
| FBO
401K CLIENTS 401(K) PLAN |
|
| PO
BOX 2600 |
|
| VALLEY
FORGE PA 19482-2600 |
|
| |
SMALLCAP
(R5) |
6.56% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
(R6) |
53.98% |
NFS
LLC FEBO |
|
| FIIOC
AS AGENT FOR |
|
| QUALIFIED
EMPLOYEE BENEFIT |
|
| PLANS
(401K) FINOPS-IC FUNDS |
|
| 100
MAGELLAN WAY # KW1C |
|
| COVINGTON
KY 41015-1987 |
|
| |
SMALLCAP
(R6) |
21.26% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
GROWTH I (I) |
45.32% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SMALLCAP
GROWTH I (I) |
12.54% |
MLPF&S
FOR THE SOLE |
|
| BENEFIT
OF ITS CUSTOMERS |
|
| ATTN
FUND ADMINISTRATION |
|
| 4800
DEER LAKE DR E FL 3 |
|
| JACKSONVILLE
FL 32246-6484 |
|
| |
SMALLCAP
GROWTH I (I) |
12.34% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
GROWTH I (R1) |
89.44% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SMALLCAP
GROWTH I (R1) |
5.77% |
MATRIX
TRUST COMPANY TRUSTEE FBO |
|
| EPLAN
SVCS GROUP TRUST |
|
| PO
BOX 52129 |
|
| PHOENIX
AZ 85072-2129 |
|
| |
SMALLCAP
GROWTH I (R3) |
49.22% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
GROWTH I (R3) |
16.87% |
EMPOWER
TRUST FBO |
|
| EMPLOYEE
BENEFIT CLIENTS 401K |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
SMALLCAP
GROWTH I (R4) |
42.76% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
GROWTH I (R4) |
25.72% |
JOHN
HANCOCK TRUST COMPANY LLC |
|
| 200
BERKELEY ST STE 7 |
|
| BOSTON
MA 02116-5038 |
|
| |
SMALLCAP
GROWTH I (R4) |
11.29% |
LINCOLN
RETIREMENT SERVICES COMPANY |
|
| FBO
SCHOOL BD OF RICHMOND 403B |
|
| PO
BOX 7876 |
|
| FORT
WAYNE IN 46801-7876 |
|
| |
SMALLCAP
GROWTH I (R4) |
7.07% |
PRINCIPAL
TRUST COMPANY |
|
| FBO
CRST INTL NQ PLAN |
|
| ATTN
SUSAN SAGGIONE |
|
| 1013
CENTRE RD |
|
| WILMINGTON
DE 19805-1265 |
|
| |
SMALLCAP
GROWTH I (R5) |
53.15% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
GROWTH I (R5) |
13.88% |
TIAA
TRUST, N.A. AS CUST/TTEE |
|
| OF
RETIREMENT PLANS |
|
| RECORDKEPT
BY TIAA |
|
| ATTN:
FUND OPERATIONS |
|
| 8500
ANDREW CARNEGIE BLVD |
|
| CHARLOTTE
NC 28262-8500 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SMALLCAP
GROWTH I (R5) |
7.82% |
RELIANCE
TRUST COMPANY TRUSTEE |
|
| FBO
RITE SOLUTIONS SAVINGS & INVEST |
|
| 185
S BROAD ST STE 303 |
|
| PAWCATUCK
CT 06379-1997 |
|
| |
SMALLCAP
GROWTH I (R6) |
44.75% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
GROWTH I (R6) |
9.47% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| 499
WASHINGTON BLVD |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SMALLCAP
S&P 600 INDEX (I) |
18.51% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
SMALLCAP
S&P 600 INDEX (I) |
13.45% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
S&P 600 INDEX (I) |
9.16% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
SMALLCAP
S&P 600 INDEX (I) |
6.07% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
SMALLCAP
S&P 600 INDEX (I) |
6.04% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SMALLCAP
S&P 600 INDEX (I) |
5.06% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SMALLCAP
S&P 600 INDEX (R1) |
39.74% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
S&P 600 INDEX (R1) |
5.39% |
COUNSEL
TRUST DBA MATC FBO |
|
| HIRSCH
INTERNATIONAL CORP 401 K |
|
| PROFIT
SHARING PLAN & TRUST |
|
| 1251
WATERFRONT PL STE 525 |
|
| PITTSBURGH
PA 15222-4228 |
|
| |
SMALLCAP
S&P 600 INDEX (R3) |
33.29% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
S&P 600 INDEX (R3) |
12.34% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
SMALLCAP
S&P 600 INDEX (R3) |
6.03% |
PIMS/PRUDENTIAL
RETIREMENT |
|
| AS
NOMINEE FOR THE TTEE/CUST PL 007 |
|
| 403(B)(7)
TAX DEFERRED MUTUAL |
|
| C/O
PARADIGM EQUITIES INC |
|
| 1216
KENDALE BLVD |
|
| EAST
LANSING MI 48823-2008 |
|
| |
SMALLCAP
S&P 600 INDEX (R4) |
49.00% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
S&P 600 INDEX (R4) |
6.06% |
CHARLES
SCHWAB & CO INC |
|
| SPECIAL
CUSTODY ACCT |
|
| FBO
CUSTOMERS |
|
| ATTN
MUTUAL FUNDS |
|
| 101
MONTGOMERY ST |
|
| SAN
FRANCISCO CA 94104-4151 |
|
| |
SMALLCAP
S&P 600 INDEX (R4) |
5.44% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SMALLCAP
S&P 600 INDEX (R5) |
51.84% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
S&P 600 INDEX (R6) |
25.82% |
DIVERSIFIED
GROWTH ACCOUNT |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
S&P 600 INDEX (R6) |
15.97% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| ATTN
NPIO TRADE DESK |
|
| OMNIBUS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
S&P 600 INDEX (R6) |
12.06% |
DIVERSIFIED
GROWTH VOLATILITY |
|
| CONTROL
ACCOUNT |
|
| ATTN
MUTUAL FUND ACCOUNTING H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
VALUE II (I) |
49.97% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
SMALLCAP
VALUE II (I) |
10.90% |
TIAA
TRUST, N.A. AS CUST/TTEE |
|
| OF
RETIREMENT PLANS |
|
| RECORDKEPT
BY TIAA |
|
| ATTN:
FUND OPERATIONS |
|
| 8500
ANDREW CARNEGIE BLVD |
|
| CHARLOTTE
NC 28262-8500 |
|
| |
SMALLCAP
VALUE II (I) |
7.48% |
EMPOWER
TRUST FBO |
|
| EMPLOYEE
BENEFIT CLIENTS 401K |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
SMALLCAP
VALUE II (I) |
5.67% |
EMPOWER
TRUST FBO |
|
| EMPLOYEE
BENEFITS CLIENTS 401K |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
SMALLCAP
VALUE II (J) |
5.77% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
| IRA
RONALD L HUGHES |
|
| 1101
BELVEDERE DR |
|
| HANAHAN
SC 29410-2203 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SMALLCAP
VALUE II (R1) |
88.61% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
VALUE II (R1) |
11.34% |
STATE
STREET BANK CUST |
|
| FBO
ADP ACCESS LARGE MARKET |
|
| 401(K)
PLAN |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
SMALLCAP
VALUE II (R3) |
61.48% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
VALUE II (R3) |
13.93% |
STATE
STREET BANK AND TRUST COMPANY |
|
| TRUSTEE
AND/OR CUSTODIAN |
|
| FBO
ADP ACCESS PRODUCT |
|
| 1
LINCOLN ST |
|
| BOSTON
MA 02111-2901 |
|
| |
SMALLCAP
VALUE II (R4) |
75.61% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
VALUE II (R4) |
14.79% |
EMPOWER
TRUST FBO |
|
| EMPLOYEE
BENEFITS CLIENTS 401K |
|
| 8515
E ORCHARD RD 2T2 |
|
| GREENWOOD
VILLAGE CO 80111-5002 |
|
| |
SMALLCAP
VALUE II (R5) |
94.53% |
DCGT
AS TTEE AND/OR CUST |
|
| FBO
PLIC VARIOUS RETIREMENT PLANS |
|
| OMNIBUS |
|
| ATTN
NPIO TRADE DESK |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
VALUE II (R6) |
51.61% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
| FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
| ATTN
PLIC PROXY COORDINATOR |
|
| FUNDS |
|
| 711
HIGH STREET |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
VALUE II (R6) |
6.77% |
LIFETIME
2040 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
SMALLCAP
VALUE II (R6) |
6.36% |
LIFETIME
2030 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
SMALLCAP
VALUE II (R6) |
5.50% |
LIFETIME
2050 FUND |
|
| ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
| 711
HIGH ST |
|
| DES
MOINES IA 50392-0001 |
|
| |
TAX-EXEMPT
BOND (A) |
15.88% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
TAX-EXEMPT
BOND (A) |
14.27% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
TAX-EXEMPT
BOND (A) |
7.89% |
J.
P. MORGAN SECURITIES LLC |
|
| FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
| 4
CHASE METROTECH CTR |
|
| BROOKLYN
NY 11245-0003 |
|
| |
TAX-EXEMPT
BOND (A) |
7.42% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
TAX-EXEMPT
BOND (A) |
5.41% |
STIFEL
NICOLAUS & CO INC |
|
| EXCLUSIVE
BENEFIT OF CUSTOMERS |
|
| 501
N BROADWAY |
|
| SAINT
LOUIS MO 63102-2188 |
|
| |
TAX-EXEMPT
BOND (C) |
25.52% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
TAX-EXEMPT
BOND (C) |
10.68% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
THE EXCL BENE OF OUR CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
TAX-EXEMPT
BOND (C) |
9.43% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
TAX-EXEMPT
BOND (C) |
7.83% |
UBS
WM USA |
|
| 0O0
11011 6100 |
|
| OMNI
ACCOUNT M/F |
|
| SPEC
CDY A/C EBOC UBSFSI |
|
| 1000
HARBOR BLVD |
|
| WEEHAWKEN
NJ 07086-6761 |
|
| |
TAX-EXEMPT
BOND (C) |
7.12% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
TAX-EXEMPT
BOND (C) |
6.33% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
| FBO
#41999970 |
|
| 707
2ND AVE S |
|
| MINNEAPOLIS
MN 55402-2405 |
|
| |
TAX-EXEMPT
BOND (C) |
6.23% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
TAX-EXEMPT
BOND (I) |
35.38% |
NATIONAL
FINANCIAL SERVICES LLC |
|
| FOR
EXCLUSIVE BENEFIT OF OUR |
|
| CUSTOMERS |
|
| 499
WASHINGTON BLVD |
|
| ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
| JERSEY
CITY NJ 07310-1995 |
|
| |
TAX-EXEMPT
BOND (I) |
14.37% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
| FBO
#41999970 |
|
| 707
2ND AVE S |
|
| MINNEAPOLIS
MN 55402-2405 |
|
| |
TAX-EXEMPT
BOND (I) |
9.39% |
WELLS
FARGO CLEARING SERVICES LLC |
|
| SPECIAL
CUSTODY ACCT FOR THE |
|
| EXCLUSIVE
BENEFIT OF CUSTOMER |
|
| 2801
MARKET ST |
|
| SAINT
LOUIS MO 63103-2523 |
|
| |
TAX-EXEMPT
BOND (I) |
6.64% |
LPL
FINANCIAL |
|
| OMNIBUS
CUSTOMER ACCOUNT |
|
| ATTN
MUTUAL FUND TRADING |
|
| 4707
EXECUTIVE DR |
|
| SAN
DIEGO CA 92121-3091 |
|
| |
|
|
|
|
|
|
|
| |
Fund/Class |
Percent
of Ownership |
Name
and Address of Owner |
TAX-EXEMPT
BOND (I) |
6.63% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
| FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
| 1
NEW YORK PLZ FL 12 |
|
| NEW
YORK NY 10004-1965 |
|
| |
TAX-EXEMPT
BOND (I) |
5.37% |
UBS
WM USA |
|
| 0O0
11011 6100 |
|
| OMNI
ACCOUNT M/F |
|
| SPEC
CDY A/C EBOC UBSFSI |
|
| 1000
HARBOR BLVD |
|
| WEEHAWKEN
NJ 07086-6761 |
|
| |
TAX-EXEMPT
BOND (I) |
5.24% |
PERSHING
LLC |
|
| 1
PERSHING PLZ |
|
| JERSEY
CITY NJ 07399-0001 |
|
| |
TAX-EXEMPT
BOND (I) |
5.19% |
RBC
CAPITAL MARKETS LLC |
|
| MUTUAL
FUND OMNIBUS PROCESSING |
|
| OMNIBUS |
|
| ATTN
MUTUAL FUND OPS MANAGER |
|
| 250
NICOLLET MALL SUITE 1400 |
|
| MINNEAPOLIS
MN 55401-7554 |
Management
Ownership
As
of January 31, 2024, the Board Members and officers of the Funds, as a group,
owned less than 1% of the outstanding shares of any class of any of the
Funds.
PORTFOLIO
MANAGER DISCLOSURE
(as
provided by the Investment Advisors)
This
section contains information about portfolio managers and the other accounts
they manage, their compensation, and their ownership of securities. The
“Ownership of Securities” tables reflect the portfolio managers’ beneficial
ownership, which means a direct or indirect pecuniary interest. For some
portfolio managers, this includes beneficial ownership of Fund shares through
participation in an employee benefit program that invests in Principal Funds,
Inc. For information about potential material conflicts of interest, see
Brokerage Allocation and Other Practices - Allocation of Trades.
This
section lists information about PGI’s portfolio managers first. Next, the
section includes information about the sub-advisors’ portfolio managers
alphabetically by sub-advisor.
Information
in this section is as of October 31, 2023, unless otherwise noted.
Advisor:
Principal Global Investors, LLC (Principal Asset Allocation Portfolio
Managers)
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Other
Accounts Managed |
|
Total
Number
of
Accounts |
Total
Assets
in
the
Accounts |
Number
of Accounts that base the Advisory Fee on Performance |
Total
Assets of the Accounts that base the Advisory Fee on
Performance |
Jessica
S. Bush:
Diversified Income Fund |
Registered
investment companies |
0 |
$0 |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$10.8 billion |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
Brody
Dass:
SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM
Flexible Income, and SAM Strategic Growth Portfolios |
Registered
investment companies |
0 |
$0 |
0 |
$0 |
Other
pooled investment vehicles |
5 |
$1.5 billion |
0 |
$0 |
Other
accounts |
3 |
$77.6
million |
0 |
$0 |
James
W. Fennessey:
High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III;
MidCap Value I; Overseas; Principal LifeTime Strategic Income, 2015, 2020,
2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; Principal
LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050,
2055, 2060, 2065, and 2070; SmallCap Growth I; and SmallCap Value II
Funds |
Registered
investment companies |
0 |
$0 |
0 |
$0 |
Other
pooled investment vehicles |
40 |
$58.2 billion |
0 |
$0 |
Other
accounts |
33 |
$3.0 billion |
0 |
$0 |
Todd
A. Jablonski:
SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM
Flexible Income, and SAM Strategic Growth Portfolios |
Registered
investment companies |
0 |
$0 |
0 |
$0 |
Other
pooled investment vehicles |
7 |
$1.6 billion |
0 |
$0 |
Other
accounts |
9 |
$168.8 million |
0 |
$0 |
Benjamin
E. Rotenberg:
Diversified Income Fund |
Registered
investment companies |
0 |
$0 |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$10.8 billion |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
Scott
Smith:
Principal LifeTime Strategic Income, 2015, 2020, 2025, 2030, 2035, 2040,
2045, 2050, 2055, 2060, 2065, and 2070; and Principal LifeTime Hybrid
Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065,
and 2070 Funds |
Registered
investment companies |
0 |
$0 |
0 |
$0 |
Other
pooled investment vehicles |
30 |
$52.8 billion |
0 |
$0 |
Other
accounts |
22 |
$3.1
billion |
0 |
$0 |
Yesim
Tokat-Acikel:
SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM
Flexible Income, and SAM Strategic Growth Portfolios |
Registered
investment companies |
0 |
$0 |
0 |
$0 |
Other
pooled investment vehicles |
6 |
$1.5
billion |
0 |
$0 |
Other
accounts |
3 |
$77.6
million |
0 |
$0 |
May
Tong:
Diversified Income Fund |
Registered
investment companies |
0 |
$0 |
0 |
$0 |
Other
pooled investment vehicles |
5 |
$16.0 billion |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
Randy
L. Welch:
High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III;
MidCap Value I; Overseas; Principal LifeTime Strategic Income, 2015, 2020,
2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; Principal
LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050,
2055, 2060, 2065, and 2070; SmallCap Growth I; and SmallCap Value II
Funds |
Registered
investment companies |
0 |
$0 |
0 |
$0 |
Other
pooled investment vehicles |
40 |
$58.2 billion |
0 |
$0 |
Other
accounts |
33 |
$3.0 billion |
0 |
$0 |
Compensation
PGI
offers the Funds’ investment team a competitive compensation structure that is
evaluated annually relative to other global asset management firms to ensure its
continued competitiveness and alignment with industry best practices. The
objective of the structure is to offer market competitive compensation that
aligns individual and team contributions with firm and client performance
objectives in a manner that is consistent with industry standards and business
results.
Compensation
for each Fund’s investment team is comprised of base salary and variable
incentive components. As team members advance in their careers, the variable
component increases in its proportion commensurate with responsibility levels.
The variable component is designed to reinforce investment performance, firm
performance, team collaboration, regulatory compliance, operational excellence,
client retention, and client satisfaction. Investment performance is measured on
a pre-tax basis against relative client benchmarks and peer groups over
one-year, three-year, and five-year periods, calculated quarterly, reinforcing a
longer-term orientation.
Payments
under the variable incentive plan may be in the form of cash or a combination of
cash and deferred compensation. The amount of variable compensation delivered in
the form of deferred compensation depends on the size of an individual’s
incentive award as it relates to a tiered deferral scale. Deferred compensation
is required to be invested into Principal Financial Group (“PFG”) restricted
stock units and funds managed by the team via a co-investment program. Both
payment vehicles are subject to a three-year vesting schedule. The overall
measurement framework and the deferred component are well aligned with our
desired focus on clients’ objectives (e.g., co-investment), alignment with PFG
stakeholders, and talent retention.
In
addition to deferred compensation obtained through their compensation
programming, team members have investments acquired through their participation
in the PFG employee stock purchase plan, retirement plans, and direct personal
investments. It should be noted that PFG’s retirement plans and deferred
compensation plans generally utilize its non-registered group separate accounts
or commingled vehicles rather than the traditional mutual funds. However, in
each instance these vehicles are managed in lockstep alignment with the mutual
funds (i.e., “clones”).
Ownership
of Securities
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Jessica
S. Bush |
Diversified
Income |
$100,001
- $500,000 |
Brody
Dass |
SAM
Balanced |
$1
- $10,000 |
Brody
Dass |
SAM
Conservative Balanced |
None |
Brody
Dass |
SAM
Conservative Growth |
None |
Brody
Dass |
SAM
Flexible Income |
None |
Brody
Dass |
SAM
Strategic Growth |
None |
James
W. Fennessey |
High
Income |
$1
- $10,000 |
James
W. Fennessey |
LargeCap
Growth I |
$100,001
- $500,000 |
James
W. Fennessey |
LargeCap
Value III |
$10,001
- $50,000 |
James
W. Fennessey |
MidCap
Growth III |
$1
- $10,000 |
James
W. Fennessey |
MidCap
Value I |
$1
- $10,000 |
James
W. Fennessey |
Overseas |
None |
James
W. Fennessey |
Principal
LifeTime Strategic Income |
None |
James
W. Fennessey |
Principal
LifeTime 2015 |
None |
James
W. Fennessey |
Principal
LifeTime 2020 |
None |
James
W. Fennessey |
Principal
LifeTime 2025 |
None |
James
W. Fennessey |
Principal
LifeTime 2030 |
None |
James
W. Fennessey |
Principal
LifeTime 2035 |
None |
James
W. Fennessey |
Principal
LifeTime 2040 |
$10,001
- $50,000 |
James
W. Fennessey |
Principal
LifeTime 2045 |
None |
James
W. Fennessey |
Principal
LifeTime 2050 |
None |
James
W. Fennessey |
Principal
LifeTime 2055 |
None |
James
W. Fennessey |
Principal
LifeTime 2060 |
None |
James
W. Fennessey |
Principal
LifeTime 2065 |
None |
James
W. Fennessey |
Principal
LifeTime 2070 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid Income |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2015 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2020 |
None |
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
James
W. Fennessey |
Principal
LifeTime Hybrid 2025 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2030 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2035 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2040 |
$100,001
- $500,000 |
James
W. Fennessey |
Principal
LifeTime Hybrid 2045 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2050 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2055 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2060 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2065 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2070 |
None |
James
W. Fennessey |
SmallCap
Growth I |
$100,001
- $500,000 |
James
W. Fennessey |
SmallCap
Value II |
$100,001
- $500,000 |
Todd
A. Jablonski |
SAM
Balanced |
over
$1,000,000 |
Todd
A. Jablonski |
SAM
Conservative Balanced |
None |
Todd
A. Jablonski |
SAM
Conservative Growth |
None |
Todd
A. Jablonski |
SAM
Flexible Income |
None |
Todd
A. Jablonski |
SAM
Strategic Growth |
$500,001
- $1,000,000 |
Benjamin
E. Rotenberg |
Diversified
Income |
$100,001
- $500,000 |
Scott
Smith |
Principal
LifeTime Strategic Income |
None |
Scott
Smith |
Principal
LifeTime 2015 |
None |
Scott
Smith |
Principal
LifeTime 2020 |
None |
Scott
Smith |
Principal
LifeTime 2025 |
None |
Scott
Smith |
Principal
LifeTime 2030 |
None |
Scott
Smith |
Principal
LifeTime 2035 |
None |
Scott
Smith |
Principal
LifeTime 2040 |
None |
Scott
Smith |
Principal
LifeTime 2045 |
None |
Scott
Smith |
Principal
LifeTime 2050 |
None |
Scott
Smith |
Principal
LifeTime 2055 |
None |
Scott
Smith |
Principal
LifeTime 2060 |
None |
Scott
Smith |
Principal
LifeTime 2065 |
None |
Scott
Smith |
Principal
LifeTime 2070 |
None |
Scott
Smith |
Principal
LifeTime Hybrid Income |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2015 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2020 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2025 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2030 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2035 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2040 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2045 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2050 |
$50,001
- $100,000 |
Scott
Smith |
Principal
LifeTime Hybrid 2055 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2060 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2065 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2070 |
None |
Yesim
Tokat-Acikel |
SAM
Balanced |
$100,001
- $500,000 |
Yesim
Tokat-Acikel |
SAM
Conservative Balanced |
None |
Yesim
Tokat-Acikel |
SAM
Conservative Growth |
None |
Yesim
Tokat-Acikel |
SAM
Flexible Income |
None |
Yesim
Tokat-Acikel |
SAM
Strategic Growth |
None |
May
Tong |
Diversified
Income |
$100,001
- $500,000 |
Randy
L. Welch |
High
Income |
$1
- $10,000 |
Randy
L. Welch |
LargeCap
Growth I |
$100,001
- $500,000 |
Randy
L. Welch |
LargeCap
Value III |
$1
- $10,000 |
Randy
L. Welch |
MidCap
Growth III |
$1
- $10,000 |
Randy
L. Welch |
MidCap
Value I |
$1
- $10,000 |
Randy
L. Welch |
Overseas |
None |
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Randy
L. Welch |
Principal
LifeTime Strategic Income |
None |
Randy
L. Welch |
Principal
LifeTime 2015 |
None |
Randy
L. Welch |
Principal
LifeTime 2020 |
None |
Randy
L. Welch |
Principal
LifeTime 2025 |
None |
Randy
L. Welch |
Principal
LifeTime 2030 |
None |
Randy
L. Welch |
Principal
LifeTime 2035 |
None |
Randy
L. Welch |
Principal
LifeTime 2040 |
None |
Randy
L. Welch |
Principal
LifeTime 2045 |
None |
Randy
L. Welch |
Principal
LifeTime 2050 |
None |
Randy
L. Welch |
Principal
LifeTime 2055 |
None |
Randy
L. Welch |
Principal
LifeTime 2060 |
None |
Randy
L. Welch |
Principal
LifeTime 2065 |
None |
Randy
L. Welch |
Principal
LifeTime 2070 |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid Income |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid 2015 |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid 2020 |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid 2025 |
$100,001
- $500,000 |
Randy
L. Welch |
Principal
LifeTime Hybrid 2030 |
$100,001
- $500,000 |
Randy
L. Welch |
Principal
LifeTime Hybrid 2035 |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid 2040 |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid 2045 |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid 2050 |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid 2055 |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid 2060 |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid 2065 |
None |
Randy
L. Welch |
Principal
LifeTime Hybrid 2070 |
None |
Randy
L. Welch |
SmallCap
Growth I |
$50,001
- $100,000 |
Randy
L. Welch |
SmallCap
Value II |
$50,001
- $100,000 |
Advisor:
Principal Global Investors, LLC (Principal Edge Portfolio Managers)
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Other
Accounts Managed |
|
Total
Number
of
Accounts |
Total
Assets
in
the
Accounts |
Number
of Accounts that base the Advisory Fee on Performance |
Total
Assets of the Accounts that base the Advisory Fee on
Performance |
Daniel
R. Coleman:
Equity Income and Principal Capital Appreciation Funds |
Registered
investment companies |
5 |
$2.0 billion |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$294.4
million |
0 |
$0 |
Other
accounts |
45 |
$3.1 billion |
0 |
$0 |
Theodore
Jayne:
Principal Capital Appreciation Fund |
Registered
investment companies |
2 |
$230.9
million |
0 |
$0 |
Other
pooled investment vehicles |
0 |
$0 |
0 |
$0 |
Other
accounts |
9 |
$192.3 million |
0 |
$0 |
Sarah
E. Radecki:
Equity Income Fund |
Registered
investment companies |
3 |
$1.8 billion |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$294.4 million |
0 |
$0 |
Other
accounts |
35 |
$2.8 billion |
0 |
$0 |
Nedret
Vidinli:
Equity Income Fund |
Registered
investment companies |
2 |
$626.5 million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$202.2 million |
0 |
$0 |
Other
accounts |
9 |
$321.4 million |
0 |
$0 |
Compensation
PGI
offers the Funds’ investment team a competitive compensation structure that is
evaluated annually relative to other global asset management firms to ensure its
continued competitiveness and alignment with industry best practices. The
objective of the structure is to offer market competitive compensation that
aligns individual and team contributions with firm and client performance
objectives in a manner that is consistent with industry standards and business
results.
Compensation
for each Fund’s investment team is comprised of base salary and variable
incentive components. As team members advance in their careers, the variable
component increases in its proportion commensurate with responsibility levels.
The variable component is designed to reinforce delivery of investment
performance, firm performance, team collaboration, regulatory compliance,
operational excellence, client retention, and client satisfaction. Investment
performance is measured on a pre-tax basis against relative client benchmarks
and peer groups over one-year, three-year, and five-year periods, calculated
quarterly, reinforcing a longer-term orientation.
Payments
under the variable incentive plan may be in the form of cash or a combination of
cash and deferred compensation. The amount of variable compensation delivered in
the form of deferred compensation depends on the size of an individual’s
incentive award as it relates to a tiered deferral scale. Deferred compensation
is required to be invested into Principal Financial Group (“PFG”) restricted
stock units and funds managed by the team via a co-investment program. Both
payment vehicles are subject to a three-year vesting schedule. The overall
measurement framework and the deferred component are well aligned with our
desired focus on clients’ objectives (e.g., co-investment), alignment with PFG
stakeholders, and talent retention.
In
addition to deferred compensation obtained through their compensation
programming, team members have investments acquired through their participation
in the PFG employee stock purchase plan, retirement plans, and direct personal
investments. It should be noted that PFG’s retirement plans and deferred
compensation plans generally utilize its non-registered group separate accounts
or commingled vehicles rather than the traditional mutual funds. However, in
each instance these vehicles are managed in lockstep alignment with the mutual
funds (i.e., “clones”).
Ownership
of Securities
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Daniel
R. Coleman |
Equity
Income |
over
$1,000,000 |
Daniel
R. Coleman |
Principal
Capital Appreciation |
$500,001
- $1,000,000 |
Theodore
Jayne |
Principal
Capital Appreciation |
$100,001
- $500,000 |
Sarah
E. Radecki |
Equity
Income |
over
$1,000,000 |
Nedret
Vidinli |
Equity
Income |
$500,001
- $1,000,000 |
Advisor:
Principal Global Investors, LLC (Principal Equities Portfolio
Managers)
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Other
Accounts Managed |
| Total Number of
Accounts |
Total
Assets in the Accounts |
Number
of Accounts that base the Advisory Fee on Performance |
Total
Assets of the Accounts that base the Advisory Fee on
Performance |
Paul
H. Blankenhagen:
Diversified International Fund |
Registered
investment companies |
3 |
$574.4 million |
0 |
$0 |
Other
pooled investment vehicles |
3 |
$10.6 billion |
0 |
$0 |
Other
accounts |
11 |
$1.2 billion |
1 |
$289.3 million |
Juliet
Cohn:
Diversified International Fund |
Registered
investment companies |
3 |
$574.4 million |
0 |
$0 |
Other
pooled investment vehicles |
3 |
$10.6 billion |
0 |
$0 |
Other
accounts |
11 |
$1.2 billion |
1 |
$289.3 million |
Christopher
T. Corbett:
MidCap Growth Fund |
Registered
investment companies |
1 |
$254.2 million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$344.3 million |
0 |
$0 |
Other
accounts |
14 |
$241.4 million |
0 |
$0 |
Jeffrey
Kilkenny:
Global Emerging Markets Fund |
Registered
investment companies |
1 |
$62.1
million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$183.4 million |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
George
Maris:
Diversified International Fund |
|
|
| |
Registered
investment companies |
1 |
$227.9
million |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$10.5
billion |
0 |
$0 |
Other
accounts |
10 |
$824.2
million |
1 |
$289.3 million |
K.
William Nolin:
MidCap Fund |
Registered
investment companies |
6 |
$10.6 billion |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$2.7 billion |
0 |
$0 |
Other
accounts |
69 |
$12.2 billion |
0 |
$0 |
Phil
Nordhus:
SmallCap Fund |
Registered
investment companies |
5 |
$195.0 million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$545.5 million |
0 |
$0 |
Other
accounts |
28 |
$2.6 billion |
2 |
$424.8 million |
Tyler
O’Donnell:
LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P
600 Index Funds |
Registered
investment companies |
18 |
$7.1
billion |
0 |
$0 |
Other
pooled investment vehicles |
3 |
$40.4
billion |
0 |
$0 |
Other
accounts |
6 |
$2.0
billion |
0 |
$0 |
Brian
W. Pattinson:
SmallCap Fund |
Registered
investment companies |
7 |
$836.2 million |
0 |
$0 |
Other
pooled investment vehicles |
3 |
$1.9
billion |
0 |
$0 |
Other
accounts |
40 |
$3.9 billion |
2 |
$424.8 million |
Tom
Rozycki:
MidCap Fund |
Registered
investment companies |
6 |
$10.6 billion |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$2.7 billion |
0 |
$0 |
Other
accounts |
69 |
$12.2 billion |
0 |
$0 |
Marc
R. Shapiro:
MidCap Growth Fund |
Registered
investment companies |
1 |
$254.2 million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$344.3 million |
0 |
$0 |
Other
accounts |
11 |
$177.6
million |
0 |
$0 |
Aaron
J. Siebel:
LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P
600 Index Funds |
Registered
investment companies |
25 |
$9.9 billion |
0 |
$0 |
Other
pooled investment vehicles |
3 |
$40.4 billion |
0 |
$0 |
Other
accounts |
6 |
$2.0 billion |
0 |
$0 |
Compensation
PGI
offers the Funds’ investment team a competitive compensation structure that is
evaluated annually relative to other global asset management firms to ensure its
continued competitiveness and alignment with industry best practices. The
objective of the structure is to offer market competitive compensation that
aligns individual and team contributions with firm and client performance
objectives in a manner that is consistent with industry standards and business
results.
Compensation
for each Fund’s investment team is comprised of base salary and variable
incentive components. As team members advance in their careers, the variable
component increases in its proportion commensurate with responsibility levels.
The variable component is designed to reinforce delivery of investment
performance, firm performance, team collaboration, regulatory compliance,
operational excellence, client retention, and client satisfaction. Investment
performance is measured on a pre-tax basis against relative client benchmarks
and peer groups over one-year, three-year, and five-year periods, calculated
quarterly, reinforcing a longer-term orientation.
Payments
under the variable incentive plan may be in the form of cash or a combination of
cash and deferred compensation. The amount of variable compensation delivered in
the form of deferred compensation depends on the size of an individual’s
incentive award as it relates to a tiered deferral scale. Deferred compensation
is required to be invested into Principal Financial Group (“PFG”) restricted
stock units and funds managed by the team via a co-investment program. Both
payment vehicles are subject to a three-year vesting schedule. The overall
measurement framework and the deferred component are well aligned with our
desired focus on clients’ objectives (e.g., co-investment), alignment with PFG
stakeholders, and talent retention.
In
addition to deferred compensation obtained through their compensation
programming, team members have investments acquired through their participation
in the PFG employee stock purchase plan, retirement plans, and direct personal
investments. It should be noted that PFG’s retirement plans and deferred
compensation plans generally utilize its non-registered group separate accounts
or commingled vehicles rather than the traditional mutual funds. However, in
each instance these vehicles are managed in lockstep alignment with the mutual
funds (i.e., “clones”).
Ownership
of Securities
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Paul
H. Blankenhagen |
Diversified
International |
over
$1,000,000 |
Juliet
Cohn |
Diversified
International |
$100,001
- $500,000 |
Christopher
T. Corbett |
MidCap
Growth |
$500,001
- $1,000,000 |
Jeffrey
Kilkenny |
Global
Emerging Markets |
$100,001
- $500,000 |
George
Maris |
Diversified
International |
over
$1,000,000 |
K.
William Nolin |
MidCap |
over
$1,000,000 |
Phil
Nordhus |
SmallCap |
over
$1,000,000 |
Tyler
O’Donnell |
LargeCap
S&P 500 Index |
None |
Tyler
O’Donnell |
MidCap
S&P 400 Index |
None |
Tyler
O’Donnell |
SmallCap
S&P 600 Index |
None |
Brian
Pattinson |
SmallCap |
over
$1,000,000 |
Tom
Rozycki |
MidCap |
over
$1,000,000 |
Marc
R. Shapiro |
MidCap
Growth |
$100,001
- $500,000 |
Aaron
J. Siebel |
LargeCap
S&P 500 Index |
None |
Aaron
J. Siebel |
MidCap
S&P 400 Index |
None |
Aaron
J. Siebel |
SmallCap
S&P 600 Index |
None |
Advisor:
Principal Global Investors, LLC (Principal Finisterre Portfolio
Managers)
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Other
Accounts Managed |
| Total Number of
Accounts |
Total
Assets in the Accounts |
Number
of Accounts that base the Advisory Fee on Performance |
Total
Assets of the Accounts that base the Advisory Fee on
Performance |
Damien
Buchet:
Finisterre Emerging Markets Total Return Bond Fund |
Registered
Investment Companies |
3 |
$496.5 million |
0 |
$0 |
Other
Pooled Investment Vehicles |
5 |
$2.1 billion |
0 |
$0 |
Other
accounts |
2 |
$425.8 million |
0 |
$0 |
Christopher
Watson:
Finisterre Emerging Markets Total Return Bond Fund |
Registered
Investment Companies |
3 |
$496.5 million |
0 |
$0 |
Other
Pooled Investment Vehicles |
5 |
$2.1 billion |
0 |
$0 |
Other
accounts |
2 |
$425.8 million |
0 |
$0 |
Compensation
PGI
offers the Funds’ investment team a competitive compensation structure that is
evaluated annually relative to other global asset management firms to ensure its
continued competitiveness and alignment with industry best practices. The
objective of the structure is to offer market competitive compensation that
aligns individual and team contributions with firm and client performance
objectives in a manner that is consistent with industry standards and business
results.
Compensation
for each Funds’ investment team is comprised of base salary and variable
incentive components. As team members advance in their careers, the variable
component increases in its proportion commensurate with responsibility levels.
The variable component is designed to reinforce delivery of investment
performance, firm performance, team collaboration, regulatory compliance,
operational excellence, client retention, and client satisfaction. Investment
performance is measured on a pre-tax basis against relative client benchmarks
and peer groups over one-year, three-year, and five-year periods, calculated
quarterly, reinforcing a longer-term orientation.
Payments
under the variable incentive plan may be in the form of cash or a combination of
cash and deferred compensation. The amount of variable compensation delivered in
the form of deferred compensation depends on the size of an individual’s
incentive award as it relates to a tiered deferral scale. Deferred compensation
is required to be invested into funds managed by the team via a co-investment
program and is subject to a three-year vesting schedule. The overall measurement
framework and the deferred component are well aligned with our desired focus on
clients’ objectives (e.g., co-investment) and talent retention.
Ownership
of Securities
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Damien
Buchet |
Finisterre
Emerging Markets Total Return Bond |
None |
Christopher
Watson |
Finisterre
Emerging Markets Total Return Bond |
None |
Advisor:
Principal Global Investors, LLC (Principal Fixed Income Portfolio
Managers)
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Other
Accounts Managed |
| Total Number of
Accounts |
Total
Assets in the Accounts |
Number
of Accounts that base the Advisory Fee
on Performance |
Total
Assets of the Accounts that base the Advisory Fee
on Performance |
William
C. Armstrong:
Core Plus Bond Fund |
Registered
investment companies |
4 |
$1.6 billion |
0 |
$0 |
Other
pooled investment vehicles |
3 |
$2.8 billion |
0 |
$0 |
Other
accounts |
33 |
$1.3 billion |
2 |
$364.5
million |
Bryan
C. Davis:
Core Plus Bond and Government & High Quality Bond
Funds |
Registered
investment companies |
10 |
$2.9 billion |
0 |
$0 |
Other
pooled investment vehicles |
10 |
$7.6 billion |
0 |
$0 |
Other
accounts |
14 |
$4.1 billion |
2 |
$7.8 million |
Mark
P. Denkinger:
High Yield Fund |
Registered
investment companies |
7 |
$248.7 million |
0 |
$0 |
Other
pooled investment vehicles |
9 |
$496.8 million |
0 |
$0 |
Other
accounts |
35 |
$3.1 billion |
1 |
$247,563 |
John
R. Friedl:
Core Fixed Income and Short-Term Income Funds |
Registered
investment companies |
1 |
$135.8 million |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$1.7 billion |
0 |
$0 |
Other
accounts |
10 |
$209.6 million |
0 |
$0 |
Zach
Gassmann:
Government & High Quality Bond Fund |
Registered
investment companies |
9 |
$561.9 million |
0 |
$0 |
Other
pooled investment vehicles |
8 |
$1.2 billion |
0 |
$0 |
Other
accounts |
10 |
$359.4
million |
3 |
$2.7
million |
Michael
Goosay:
Core Fixed Income, Core Plus Bond and Short-Term Income
Funds |
Registered
investment companies |
2 |
$319.9
million |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$4.4
billion |
0 |
$0 |
Other
accounts |
13 |
$1.2
billion |
2 |
$364.5
million |
Allison
Hitchings:
Government Money Market and Money Market Funds |
Registered
investment companies |
0 |
$0
|
0 |
$0 |
Other
pooled investment vehicles |
1 |
$1.3
billion |
0 |
$0 |
Other
accounts |
3 |
$8.1
million |
0 |
$0 |
James
Noble:
California Municipal and Tax-Exempt Bond Funds |
Registered
investment companies |
2 |
$140.1 million |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$63.0 million |
0 |
$0 |
Other
accounts |
13 |
$660.8 million |
0 |
$0 |
Scott
J. Peterson:
Core Fixed Income and Short-Term Income Funds |
Registered
investment companies |
1 |
$135.8 million |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$1.7 billion |
0 |
$0 |
Other
accounts |
10 |
$209.6
million |
0 |
$0 |
Josh
Rank:
High Yield Fund |
Registered
investment companies |
7 |
$248.7 million |
0 |
$0 |
Other
pooled investment vehicles |
9 |
$496.8 million |
0 |
$0 |
Other
accounts |
35 |
$3.1 billion |
1 |
$247,563 |
Tracy
Reeg:
Government Money Market and Money Market Funds |
Registered
investment companies |
0 |
$0
|
0 |
$0 |
Other
pooled investment vehicles |
1 |
$1.3 billion |
0 |
$0 |
Other
accounts |
3 |
$8.1
million |
0 |
$0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Other
Accounts Managed |
| Total Number of
Accounts |
Total
Assets in the Accounts |
Number
of Accounts that base the Advisory Fee
on Performance |
Total
Assets of the Accounts that base the Advisory Fee
on Performance |
Darrin
E. Smith:
High Yield Fund |
Registered
investment companies |
7 |
$248.7 million |
0 |
$0 |
Other
pooled investment vehicles |
9 |
$496.8 million |
0 |
$0 |
Other
accounts |
35 |
$3.1 billion |
1 |
$247,563 |
James
Welch:
California Municipal and Tax-Exempt Bond Funds |
Registered
investment companies |
2 |
$140.1 million |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$63.0 million |
0 |
$0 |
Other
accounts |
13 |
$660.8 million |
0 |
$0 |
Compensation
PGI
offers the Funds’ investment team a competitive compensation structure that is
evaluated annually relative to other global asset management firms to ensure its
continued competitiveness and alignment with industry best practices. The
objective of the structure is to offer market competitive compensation that
aligns individual and team contributions with firm and client performance
objectives in a manner that is consistent with industry standards and business
results.
Compensation
for each Fund’s investment team is comprised of base salary and variable
incentive components. As team members advance in their careers, the variable
component increases in its proportion commensurate with responsibility levels.
The variable component is designed to reinforce delivery of investment
performance, firm performance, team collaboration, regulatory compliance,
operational excellence, client retention, and client satisfaction. Investment
performance is measured on a pre-tax basis against relative client benchmarks
and peer groups over one-year, three-year, and five-year periods, calculated
quarterly, reinforcing a longer-term orientation.
Payments
under the variable incentive plan may be in the form of cash or a combination of
cash and deferred compensation. The amount of variable compensation delivered in
the form of deferred compensation depends on the size of an individual’s
incentive award as it relates to a tiered deferral scale. Deferred compensation
is required to be invested into Principal Financial Group (“PFG”) restricted
stock units and funds managed by the team via a co-investment program. Both
payment vehicles are subject to a three-year vesting schedule. The overall
measurement framework and the deferred component are well aligned with our
desired focus on clients’ objectives (e.g., co-investment), alignment with PFG
stakeholders, and talent retention.
In
addition to deferred compensation obtained through their compensation
programming, team members have investments acquired through their participation
in the PFG employee stock purchase plan, retirement plans, and direct personal
investments. It should be noted that PFG’s retirement plans and deferred
compensation plans generally utilize its non-registered group separate accounts
or commingled vehicles rather than the traditional mutual funds. However, in
each instance these vehicles are managed in lockstep alignment with the mutual
funds (i.e., “clones”).
Ownership
of Securities
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
William
C. Armstrong |
Core
Plus Bond |
over
$1,000,000 |
Bryan
C. Davis |
Core
Plus Bond |
$100,001
- $500,000 |
Bryan
C. Davis |
Government
& High Quality Bond |
over
$1,000,000 |
Mark
P. Denkinger |
High
Yield |
over
$1,000,000 |
John
R. Friedl |
Core
Fixed Income |
$100,001
- $500,000 |
John
R. Friedl |
Short-Term
Income |
$1
- $10,000 |
Zach
Gassmann |
Government
& High Quality Bond |
$100,001
- $500,000 |
Michael
Goosay |
Core
Fixed Income |
$100,001
- $500,000 |
Michael
Goosay |
Core
Plus Bond |
$100,001
- $500,000 |
Michael
Goosay |
Short-Term
Income |
$100,001
- $500,000 |
Allison
Hitchings |
Government
Money Market |
None |
Allison
Hitchings |
Money
Market |
None |
James
Noble |
California
Municipal |
$1
- $10,000 |
James
Noble |
Tax-Exempt
Bond |
$100,001
- $500,000 |
Scott
J. Peterson |
Core
Fixed Income |
$1
- $10,000 |
Scott
J. Peterson |
Short-Term
Income |
$500,001
- $1,000,000 |
Josh
Rank |
High
Yield |
$500,001
- $1,000,000 |
Tracy
Reeg |
Government
Money Market |
None |
Tracy
Reeg |
Money
Market |
$1
- $10,000 |
Darrin
E. Smith |
High
Yield |
$500,001
- $1,000,000 |
James
Welch |
California
Municipal |
$1
- $10,000 |
James
Welch |
Tax-Exempt
Bond |
$100,001
- $500,000 |
Sub-Advisor:
BlackRock Financial Management, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Other
Accounts Managed |
|
Total
Number
of
Accounts |
Total
Assets
in
the
Accounts |
Number
of Accounts that base the Advisory Fee on Performance |
Total
Assets of the Accounts that base the Advisory Fee on
Performance |
David
Rogal:
Inflation Protection Fund |
|
|
| |
Registered
investment companies |
21 |
$73.3 billion |
0 |
$0 |
Other
pooled investment vehicles |
10 |
$16.8 billion |
0 |
$0 |
Other
accounts |
19 |
$8.4 billion |
0 |
$0 |
Harrison
Segall:
Inflation Protection Fund |
|
|
| |
Registered
investment companies |
7 |
$7.5 billion |
0 |
$0 |
Other
pooled investment vehicles |
6 |
$2.8 billion |
0 |
$0 |
Other
accounts |
86 |
$36.8 billion |
2 |
$74.2
million |
Compensation
for Sub-Advisor and Sub-Sub-Advisor
Portfolio
Manager Compensation Overview
BlackRock’s
financial arrangements with its portfolio managers, its competitive compensation
and its career path emphasis at all levels reflect the value senior management
places on key resources. Compensation may include a variety of components and
may vary from year to year based on a number of factors. The principal
components of compensation include a base salary, a performance-based
discretionary bonus, participation in various benefits programs and one or more
of the incentive compensation programs established by BlackRock.
Base
Compensation. Generally,
portfolio managers receive base compensation based on their position with the
firm.
Discretionary
Incentive Compensation
Discretionary
incentive compensation is a function of several components: the performance of
BlackRock, Inc., the performance of the portfolio manager’s group within
BlackRock, the investment performance, including risk-adjusted returns, of the
firm’s assets under management or supervision by that portfolio manager relative
to predetermined benchmarks, and the individual’s performance and contribution
to the overall performance of these portfolios and BlackRock. In most cases,
these benchmarks are the same as the benchmark or benchmarks against which the
performance of the Funds or other accounts managed by the portfolio managers are
measured. Among other things, BlackRock’s Chief Investment Officers make a
subjective determination with respect to each portfolio manager’s compensation
based on the performance of the Funds and other accounts managed by each
portfolio manager relative to the various benchmarks. Performance of fixed
income funds is measured on a pre-tax and/or after-tax basis over various time
periods including 1-, 3- and 5- year periods, as applicable. With respect to
these portfolio managers, such benchmarks for the Fund and other accounts
are:
|
|
|
|
| |
Portfolio
Manager |
Benchmarks |
Christopher
Allen |
Varied
Euro-Based Benchmarks and global inflation benchmark. |
David
Rogal Harrison Segall
|
A
combination of market-based indices (e.g., Bloomberg U.S. Aggregate Bond
Index), certain customized indices and certain fund industry peer
groups. |
Distribution
of Discretionary Incentive Compensation. Distribution
of Discretionary Incentive Compensation. Discretionary incentive compensation is
distributed to portfolio managers in a combination of cash, deferred BlackRock,
Inc. stock awards, and/or deferred cash awards that notionally track the return
of certain BlackRock investment products.
Portfolio
managers receive their annual discretionary incentive compensation in the form
of cash. Portfolio managers whose total compensation is above a specified
threshold also receive deferred BlackRock, Inc. stock awards annually as part of
their discretionary incentive compensation. Paying a portion of discretionary
incentive compensation in the form of deferred BlackRock, Inc. stock puts
compensation earned by a portfolio manager for a given year “at risk” based on
BlackRock’s ability to sustain and improve its performance over future periods.
In some cases, additional deferred BlackRock, Inc. stock may be granted to
certain key employees as part of a long-term incentive award to aid in
retention, align interests with long-term shareholders and motivate performance.
Deferred BlackRock, Inc. stock awards are generally granted in the form of
BlackRock, Inc. restricted stock units that vest pursuant to the terms of the
applicable plan and, once vested, settle in BlackRock, Inc. common stock. The
portfolio managers of this Fund have deferred BlackRock, Inc. stock
awards.
For
certain portfolio managers, a portion of the discretionary incentive
compensation is also distributed in the form of deferred cash awards that
notionally track the returns of select BlackRock investment products they
manage, which provides direct alignment of portfolio manager discretionary
incentive compensation with investment product results. Deferred cash awards
vest ratably over a number of years and, once vested, settle in the form of
cash. Only portfolio managers who manage specified products and whose total
compensation is above a specified threshold are eligible to participate in the
deferred cash award program.
Other
Compensation Benefits. In
addition to base salary and discretionary incentive compensation, portfolio
managers may be eligible to receive or participate in one or more of the
following:
Incentive
Savings Plans — BlackRock,
Inc. has created a variety of incentive savings plans in which BlackRock
employees are eligible to participate, including a 401(k) plan, the BlackRock
Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan
(ESPP). The employer contribution components of the RSP include a company match
equal to 50% of the first 8% of eligible pay contributed to the plan capped at
$5,000 per year, and a company retirement contribution equal to 3-5% of eligible
compensation up to the Internal Revenue Service limit ($330,000 for 2023). The
RSP offers a range of investment options, including registered investment
companies and collective investment funds managed by the firm. BlackRock
contributions follow the investment direction set by participants for their own
contributions or, absent participant investment direction, are invested into a
target date fund that corresponds to, or is closest to, the year in which the
participant attains age 65. The ESPP allows for investment in BlackRock common
stock at a 5% discount on the fair market value of the stock on the purchase
date. Annual participation in the ESPP is limited to the purchase of 1,000
shares of common stock or a dollar value of $25,000 based on its fair market
value on the purchase date. Messrs. Rogal and Segall are eligible to participate
in these plans.
United
Kingdom-based portfolio managers are also eligible to participate in broad-based
plans offered generally to BlackRock employees, including broad-based
retirement, health and other employee benefit plans. For example, BlackRock has
created a variety of incentive savings plans in which BlackRock employees are
eligible to participate, including the BlackRock Retirement Savings Plan (RSP)
and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution
to the RSP is between 10% and 15% of eligible pay capped at £160,000 per annum.
The RSP offers a range of investment options, including several collective
investment funds managed by the firm. BlackRock contributions follow the
investment direction set by participants for their own contributions or, in the
absence of an investment election being made, are invested into a target date
fund that corresponds to, or is closest to, the year in which the participant
attains age 65. The ESPP allows for investment in BlackRock common stock at a 5%
discount on the fair market value of the stock on the purchase date. Annual
participation in the ESPP is limited to the purchase of 1,000 shares of common
stock or a US dollar value of $25,000 based on its fair market value on the
purchase date. Mr. Allen is eligible to participate in these plans.
Portfolio
Manager Potential Material Conflicts of Interest
BlackRock
has built a professional working environment, firm-wide compliance culture and
compliance procedures and systems designed to protect against potential
incentives that may favor one account over another. BlackRock has adopted
policies and procedures that address the allocation of investment opportunities,
execution of portfolio transactions, personal trading by employees and other
potential conflicts of interest that are designed to ensure that all client
accounts are treated equitably over time. Nevertheless, BlackRock furnishes
investment management and advisory services to numerous clients in addition to
the Fund, and BlackRock may, consistent with applicable law, make investment
recommendations to other clients or accounts (including accounts which are hedge
funds or have performance or higher fees paid to BlackRock, or in which
portfolio managers have a personal interest in the receipt of such fees), which
may be the same as or different from those made to the Fund. In addition,
BlackRock, its affiliates and significant shareholders and any officer,
director, shareholder or employee may or may not have an interest in the
securities whose purchase and sale BlackRock recommends to the Fund. BlackRock,
or any of its affiliates or significant shareholders, or any officer, director,
shareholder, employee or any member of their families may take different actions
than those recommended to the Fund by BlackRock with respect to the same
securities. Moreover, BlackRock may refrain from rendering any advice or
services concerning securities of companies of which any of BlackRock’s (or its
affiliates’ or significant shareholders’) officers, directors or employees are
directors or officers, or companies as to which BlackRock or any of its
affiliates or significant shareholders or the officers, directors and employees
of any of them has any substantial economic interest or possesses material
non-public information. Certain portfolio managers also may manage accounts
whose investment strategies may at times be opposed to the strategy utilized for
a fund. It should also be noted that Messrs. Rogal and Segall may be managing
hedge fund and/or long only accounts, or may be part of a team managing hedge
fund and/or long only accounts, subject to incentive fees. Messrs. Rogal and
Segall may therefore be entitled to receive a portion of any incentive fees
earned on such accounts.
As
a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each
client fairly. When BlackRock purchases or sells securities for more than one
account, the trades must be allocated in a manner consistent with its fiduciary
duties. BlackRock attempts to allocate investments in a fair and equitable
manner among client accounts, with no account receiving preferential treatment.
To this end, BlackRock has adopted policies that are intended to ensure
reasonable efficiency in client transactions and provide BlackRock with
sufficient flexibility to allocate investments in a manner that is consistent
with the particular investment discipline and client base, as
appropriate.
Ownership
of Securities
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
David
Rogal |
Inflation
Protection |
None |
Harrison
Segall |
Inflation
Protection |
None |
Sub-Sub-Advisor:
BlackRock International Limited
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Other
Accounts Managed |
| Total Number of
Accounts |
Total
Assets in the Accounts |
Number
of Accounts that base the Advisory Fee on Performance |
Total
Assets of the Accounts that base the Advisory Fee on
Performance |
Christopher
Allen: Inflation
Protection Fund |
Registered
investment companies |
5 |
$4.1 billion |
0 |
$0 |
Other
pooled investment vehicles |
12 |
$19.9 billion |
0 |
$0 |
Other
accounts |
23 |
$9.2 billion |
0 |
$0 |
Compensation
For
compensation information, reference the Compensation for Sub-Advisor and
Sub-Sub-Advisor section under Sub-Advisor: BlackRock Financial Management,
Inc.
Ownership
of Securities
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Christopher
Allen |
Inflation
Protection |
None |
Sub-Advisor:
Origin Asset Management LLP
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Other
Accounts Managed |
|
Total
Number
of
Accounts |
Total
Assets
in
the
Accounts |
Number
of Accounts that base the Advisory Fee on Performance |
Total
Assets of the Accounts that base the Advisory Fee on
Performance |
Chris
Carter:
International Fund I |
Registered
investment companies |
1 |
$2.4 billion |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$77.0 million |
0 |
$0 |
Other
accounts |
10 |
$1.4 billion |
1 |
$108.0
million |
Tarlock
Randhawa:
International Fund I |
Registered
investment companies |
1 |
$2.4 billion |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$77.0 million |
0 |
$0 |
Other
accounts |
10 |
$1.4 billion |
1 |
$108.0
million |
Nerys
Weir:
International Fund I |
Registered
investment companies |
1 |
$2.4 billion |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$77.0 million |
0 |
$0 |
Other
accounts |
10 |
$1.4 billion |
1 |
$108.0
million |
Compensation
Origin
Asset Management LLP offers investment professionals a competitive compensation
structure that is evaluated relative to other asset management firms to ensure
its continued competitiveness and alignment with industry best practices. The
objective of the structure is to align team contributions in a manner that is
consistent with industry standards and business results. Compensation of
Origin’s portfolio managers is formed of a competitive fixed salary and a share
of a bonus pool, which is a function of the annual profitability of the firm.
Select members of the investment team further share in the firm’s profits based
on their overall partner ownership.
Ownership
of Securities
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Chris
Carter |
International
I |
None |
Tarlock
Randhawa |
International
I |
None |
Nerys
Weir |
International
I |
None |
Sub-Advisor:
Principal Real Estate Investors, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Other
Accounts Managed |
|
Total
Number
of
Accounts |
Total
Assets
in
the
Accounts |
Number
of Accounts that base the Advisory Fee on Performance |
Total
Assets of the Accounts that base the Advisory Fee on
Performance |
Keith
Bokota:
Real Estate Securities Fund |
Registered
investment companies |
3 |
$443.8 million |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$1.1 billion |
0 |
$0 |
Other
accounts |
43 |
$2.8 billion |
1 |
$90.1 million |
Simon
Hedger:
Global Real Estate Securities Fund |
Registered
investment companies |
6 |
$963.9 million |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$1.2 billion |
0 |
$0 |
Other
accounts |
39 |
$5.0 billion |
4 |
$332.5
million |
Anthony
Kenkel:
Global Real Estate Securities and Real Estate Securities
Funds |
Registered
investment companies |
9 |
$1.4 billion |
0 |
$0 |
Other
pooled investment vehicles |
5 |
$2.3 billion |
0 |
$0 |
Other
accounts |
84 |
$7.8
billion |
5 |
$422.6 million |
Kelly
D. Rush:
Global Real Estate Securities and Real Estate Securities
Funds |
Registered
investment companies |
9 |
$1.4 billion |
0 |
$0 |
Other
pooled investment vehicles |
5 |
$2.3 billion |
0 |
$0 |
Other
accounts |
84 |
$7.8
billion |
5 |
$422.6 million |
Compensation
Principal
Real Estate Investors, LLC offers the Funds’ investment team a competitive
compensation structure that is evaluated annually relative to other global asset
management firms to ensure its continued competitiveness and alignment with
industry best practices. The objective of the structure is to offer market
competitive compensation that aligns individual and team contributions with firm
and client performance objectives in a manner that is consistent with industry
standards and business results.
Compensation
for each Fund’s investment team is comprised of base salary and variable
incentive components. As team members advance in their careers, the variable
component increases in its proportion commensurate with responsibility levels.
The variable component is designed to reinforce delivery of investment
performance, firm performance, team collaboration, regulatory compliance,
operational excellence, client retention, and client satisfaction. Investment
performance is measured on a pre-tax basis against relative client benchmarks
and peer groups over one-year, three-year, and five-year periods, calculated
quarterly, reinforcing a longer-term orientation.
Payments
under the variable incentive plan may be in the form of cash or a combination of
cash and deferred compensation. The amount of variable compensation delivered in
the form of deferred compensation depends on the size of an individual’s
incentive award as it relates to a tiered deferral scale. Deferred compensation
is required to be partially invested in Principal Financial Group (“PFG”)
restricted stock units. The remaining portion will be awarded in deferred cash.
Both payment vehicles are subject to a three-year vesting schedule. The overall
measurement framework and the deferred component are well aligned with our
desired focus on clients’ objectives, alignment with PFG stakeholders, and
talent retention.
In
addition to deferred compensation obtained through their compensation
programming, team members have investments acquired through their participation
in PFG’s employee stock purchase plan, retirement plans, and direct personal
investments. It should be noted that PFG’s retirement plans and deferred
compensation plans generally utilize its non-registered group separate accounts
or commingled vehicles rather than the traditional mutual funds. However, in
each instance these vehicles are managed in lockstep alignment with the mutual
funds (i.e., “clones”).
Ownership
of Securities
|
|
|
|
|
|
|
| |
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Keith
Bokota |
Real
Estate Securities |
over
$1,000,000 |
Simon
Hedger |
Global
Real Estate Securities |
$500,001
- $1,000,000 |
Anthony
Kenkel |
Global
Real Estate Securities |
over
$1,000,000 |
Anthony
Kenkel |
Real
Estate Securities |
over
$1,000,000 |
Kelly
D. Rush |
Global
Real Estate Securities |
over
$1,000,000 |
Kelly
D. Rush |
Real
Estate Securities |
over
$1,000,000 |
APPENDIX
A – DESCRIPTION OF BOND RATINGS
Moody’s
Investors Service, Inc. Rating Definitions:
Long-Term
Obligation Ratings
Ratings
assigned on Moody’s global long-term obligation rating scales are
forward-looking opinions of the relative credit risk of financial obligations
issued by non-financial corporates, financial institutions, structured finance
vehicles, project finance vehicles, and public sector entities. Long-term
ratings are assigned to issuers or obligations with an original maturity of one
year or more and reflect both on the likelihood of a default or impairment on
contractual financial obligations and the expected financial loss suffered in
the event of default or impairment.1
1
For
certain structured finance, preferred stock and hybrid securities in which
payment default events are either not defined or do not match investor’s
expectations for timely payment, the ratings reflect the likelihood of
impairment and the expected financial loss in the event of
impairment.
|
|
|
|
| |
Aaa: |
Obligations
rated Aaa are judged to be of the highest quality, subject to the lowest
level of credit risk. |
Aa: |
Obligations
rated Aa are judged to be of high quality and are subject to very low
credit risk. |
A: |
Obligations
rated A are considered upper-medium grade and are subject to low credit
risk. |
Baa: |
Obligations
rated Baa are subject to moderate credit risk. They are considered
medium-grade and as such may possess certain speculative
characteristics. |
Ba: |
Obligations
rated Ba are judged to be speculative and are subject to substantial
credit risk. |
B: |
Obligations
rated B are considered speculative and are subject to high credit
risk. |
Caa: |
Obligations
rated Caa are judged to be speculative of poor standing and are subject to
very high credit risk. |
Ca: |
Obligations
rated Ca are highly speculative and are likely in, or very near, default,
with some prospect of recovery of principal and
interest. |
C: |
Obligations
rated C are the lowest rated class of bonds and are typically in default,
with little prospect for recovery of principal or
interest. |
|
|
|
|
| |
NOTE: |
Moody’s
appends numerical modifiers, 1, 2, and 3 to each generic rating
classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category, the
modifier 2 indicates a mid-range ranking, and the modifier 3 indicates a
ranking in the lower end of that generic rating category. Additionally, a
“(hyb)” indicator is appended to all ratings of hybrid securities issued
by banks, issuers, financial companies, and securities
firms.* |
*By
their terms, hybrid securities allow for the omission of scheduled dividends,
interest, or principal payments, which can potentially result in impairment if
such an omission occurs. Hybrid securities may also be subject to contractually
allowable write-downs of principal that could result in impairment. Together the
hybrid indicator, the long-term obligation rating assigned to a hybrid security
is an expression of the relative credit risk associated with that
security.
SHORT-TERM
NOTES: Short-term ratings are assigned to obligations with an original maturity
of thirteen months or less and reflect both on the likelihood of a default or
impairment on contractual financial obligations and the expected financial loss
suffered in the event of default. Moody’s employs the following three
designations, all judged to be investment grade, to indicate the relative
repayment ability of rated issuers:
Issuers
rated Prime-1 (or related supporting institutions) have a superior ability to
repay short-term debt obligations.
Issuers
rated Prime-2 (or related supporting institutions) have a strong ability to
repay short-term debt obligations.
Issuers
rated Prime-3 (or related supporting institutions) have an acceptable ability to
repay short-term obligations.
Issuers
rated Not Prime do not fall within any of the Prime rating
categories.
US
MUNICIPAL SHORT-TERM DEBT: The Municipal Investment Grade (MIG) scale is used to
rate US municipal bonds of up to three years maturity. MIG ratings are divided
into three levels - MIG 1 through MIG 3 - while speculative grade short-term
obligations are designated SG.
MIG
1 denotes superior credit quality, afforded excellent protection from
established cash flows, highly reliable liquidity support, or demonstrated
broad-based access to the market for refinancing.
MIG
2 denotes strong credit quality with ample margins of protection, although not
as large as in the preceding group.
MIG
3 notes are of acceptable credit quality. Liquidity and cash-flow protection may
be narrow and market access for refinancing is likely to be less
well-established.
SG
denotes speculative-grade credit quality and may lack sufficient margins of
protection.
Description
of S&P Global Ratings’ Credit Rating Definitions:
S&P
Global’s credit rating, both long-term and short-term, is a forward-looking
opinion of the creditworthiness of an obligor with respect to a specific
obligation. This assessment takes into consideration the creditworthiness of
guarantors, insurers, or other forms of credit enhancement on the
obligation.
The
credit rating is not a recommendation to purchase, sell or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.
The
ratings are statements of opinion as of the date they are expressed furnished by
the issuer or obtained by S&P Global Ratings from other sources S&P
Global Ratings considers reliable. S&P Global Ratings does not perform an
audit in connection with any rating and may, on occasion, rely on unaudited
financial information. The ratings may be changed, suspended, or withdrawn as a
result of changes in, or unavailability of, such information, or for other
circumstances.
The
ratings are based, in varying degrees, on the following
considerations:
•Likelihood
of payment - capacity and willingness of the obligor to meet its financial
commitment on an obligation in accordance with the terms of the
obligation;
•Nature
of and provisions of the financial obligation;
•Protection
afforded by, and relative position of, the financial obligation in the event of
bankruptcy, reorganization, or other arrangement under the laws of bankruptcy
and other laws affecting creditor’s rights.
LONG-TERM
CREDIT RATINGS:
|
|
|
|
| |
AAA: |
Obligations
rated ‘AAA’ have the highest rating assigned by S&P Global Ratings.
The obligor’s capacity to meet its financial commitment on the obligation
is extremely strong. |
AA: |
Obligations
rated ‘AA’ differ from the highest-rated issues only in small degree. The
obligor’s capacity to meet its financial commitment on the obligation is
very strong. |
A:
|
Obligations
rated ‘A’ have a strong capacity to meet financial commitment on the
obligation although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
obligations in higher-rated categories. |
BBB: |
Obligations
rated ‘BBB’ exhibit adequate protection parameters; however, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to meet financial commitment on the
obligation. |
BB,
B, CCC,
CC
and C: |
Obligations
rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded, on balance, as having
significant speculative characteristics. ‘BB’ indicates the lowest degree
of speculation and ‘C’ the highest degree of speculation. While such
obligations will likely have some quality and protective characteristics,
these may be outweighed by large uncertainties or major risk exposures to
adverse conditions. |
BB: |
Obligations
rated ‘BB’ are less vulnerable to nonpayment than other speculative
issues. However it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
the obligor’s inadequate capacity to meet its financial commitment on the
obligation. |
B: |
Obligations
rated ‘B’ are more vulnerable to nonpayment than ‘BB’ but the obligor
currently has the capacity to meet its financial commitment on the
obligation. Adverse business, financial, or economic conditions will
likely impair this capacity. |
CCC: |
Obligations
rated ‘CCC’ are currently vulnerable to nonpayment and is dependent upon
favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. If adverse business,
financial, or economic conditions occur, the obligor is not likely to have
the capacity to meet its financial commitment on the
obligation. |
CC: |
Obligations
rated ‘CC’ are currently highly vulnerable to nonpayment. The ‘CC’ rating
is used when a default has not yet occurred but S&P Global Ratings
expects default to be a virtual certainty, regardless of anticipated time
to default. |
C:
|
The
rating ‘C’ is highly vulnerable to nonpayment, the obligation is expected
to have lower relative seniority or lower ultimate recovery compared to
higher rated obligations. |
D:
|
Obligations
rated ‘D’ are in default, or in breach of an imputed promise. For
non-hybrid capital instruments, the ‘D’ rating category is used when
payments on an obligation are not made on the date due, unless S&P
Global Ratings believes that such payments will be made within five
business days in the absence of a stated grace period or within the
earlier of the stated grace period or 30 calendar days. The rating will
also be used upon filing for bankruptcy petition or the taking of similar
action and where default is a virtual certainty. If an obligation is
subject to a distressed exchange offer the rating is lowered to
‘D’. |
Plus
(+) or Minus (-): The ratings from ‘AA’ to ‘CCC’ may be modified by the addition
of a plus or minus sign to show relative standing within the major rating
categories.
|
|
|
|
| |
NR: |
Indicates
that no rating has been requested, that there is insufficient information
on which to base a rating or that S&P Global Ratings does not rate a
particular type of obligation as a matter of
policy. |
SHORT-TERM
CREDIT RATINGS: Ratings are graded into four categories, ranging from ‘A-1’ for
the highest quality obligations to ‘D’ for the lowest.
|
|
|
|
| |
A-1:
|
This
is the highest category. The obligor’s capacity to meet its financial
commitment on the obligation is strong. Within this category, certain
obligations are designated with a plus sign (+). This indicates that the
obligor’s capacity to meet its financial commitment on these obligations
is extremely strong. |
A-2:
|
Issues
carrying this designation are somewhat more susceptible to the adverse
effects of the changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor’s capacity
to meet its financial commitment on the obligation is
satisfactory. |
A-3:
|
Issues
carrying this designation exhibit adequate capacity to meet their
financial obligations. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the
obligor to meet it financial commitment on the
obligation. |
B:
|
Issues
rated ‘B’ are regarded as vulnerable and have significant speculative
characteristics. The obligor has capacity to meet financial commitments;
however, it faces major ongoing uncertainties which could lead to
obligor’s inadequate capacity to meet its financial
obligations. |
C:
|
This
rating is assigned to short-term debt obligations that are currently
vulnerable to nonpayment and is dependent upon favorable business,
financial, and economic conditions to meet its financial commitment on the
obligation. |
D:
|
This
rating indicates that the issue is either in default or in breach of an
imputed promise. For non-hybrid capital instruments, the ‘D’ rating
category is used when payments on an obligation are not made on the date
due, unless S&P Global Ratings believes that such payments will be
made within any stated grace period. However, any stated grace period
longer than five business days will be treated as five business days. The
rating will also be used upon filing for bankruptcy petition or the taking
of similar action and where default is a virtual certainty. If an
obligation is subject to a distressed debt restructuring the rating is
lowered to ‘D’. |
MUNICIPAL
SHORT-TERM NOTE RATINGS: S&P Global Ratings rates U.S. municipal notes with
a maturity of less than three years as follows:
|
|
|
|
| |
SP-1:
|
A
strong capacity to pay principal and interest. Issues that possess a very
strong capacity to pay debt service is given a “+”
designation. |
SP-2:
|
A
satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the terms of
the notes. |
SP-3:
|
A
speculative capacity to pay principal and interest. |
D: |
Assigned
upon failure to pay the note when due, completion of a distressed debt
restructuring, or the filing of a bankruptcy petition or the taking of
similar action and where default on an obligation is a virtual certainty.
|
APPENDIX
B – PRICE MAKE UP SHEET
|
|
|
|
|
|
|
|
|
|
| |
Class
A |
Maximum
Offering Price Calculation |
(as
of October 31, 2023) |
|
|
| |
| NAV |
= |
Maximum
Offering Price |
| (1-Sales
Charge Percentage) |
|
|
| |
Fund/Portfolio |
|
| |
|
|
| |
California
Municipal |
$9.30 |
= |
$9.66 |
| (1-.0375) |
|
|
| |
Core
Fixed Income |
$7.95 |
= |
$8.13 |
| (1-.0225) |
|
|
| |
Core
Plus Bond |
$8.51 |
= |
$8.84 |
| (1-.0375) |
|
|
| |
Diversified
Income |
$11.26 |
| $11.70 |
| (1-.0375) |
|
|
| |
Diversified
International |
$11.87 |
= |
$12.56 |
| (1-.0550) |
|
|
| |
Equity
Income |
$33.09 |
= |
$35.02 |
| (1-.0550) |
|
|
| |
Global
Emerging Markets |
$22.69 |
= |
$24.01 |
| (1-.0550) |
|
|
| |
Global
Real Estate Securities |
$7.25 |
= |
$7.67 |
| (1-.0550) |
|
|
| |
Government
& High Quality Bond |
$8.26 |
= |
$8.45 |
| (1-.0225) |
|
|
| |
High
Yield |
$6.31 |
= |
$6.56 |
| (1-.0375) |
|
|
| |
LargeCap
Growth I |
$14.77 |
= |
$15.63 |
| (1-.0550) |
|
|
| |
LargeCap
S&P 500 Index |
$21.25 |
= |
$21.57 |
| (1-.0150) |
|
|
| |
MidCap
|
$31.74 |
= |
$33.59 |
| (1-.0550) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
Class
A |
Maximum
Offering Price Calculation |
(as
of October 31, 2023) |
|
|
| |
| NAV |
= |
Maximum
Offering Price |
| (1-Sales
Charge Percentage) |
|
|
| |
Fund/Portfolio |
|
| |
MidCap
Value I |
$14.89 |
= |
$15.76 |
| (1-.0550) |
|
|
| |
Money
Market |
$1.00
|
= |
$1.00 |
| (1-.0000) |
|
|
| |
Principal
Capital Appreciation |
$58.41 |
= |
$61.81 |
| (1-.0550) |
|
|
| |
Principal
LifeTime 2020 |
$11.52 |
= |
$11.97 |
| (1-.0375) |
|
|
| |
Principal
LifeTime 2030 |
$12.50 |
= |
$12.99 |
| (1-.0375) |
|
|
| |
Principal
LifeTime 2040 |
$13.54 |
= |
$14.33 |
| (1-.0550) |
|
|
| |
Principal
LifeTime 2050 |
$14.54 |
= |
$15.39 |
| (1-.0550) |
|
|
| |
Principal
LifeTime Strategic Income |
$10.31 |
= |
$10.71 |
| (1-.0375) |
|
|
| |
Real
Estate Securities |
$23.39 |
= |
$24.75 |
| (1-.0550) |
|
|
| |
SAM
Balanced |
$13.81 |
= |
$14.61 |
| (1-.0550) |
|
|
| |
SAM
Conservative Balanced |
$10.73 |
= |
$11.35 |
| (1-.0550) |
|
|
| |
SAM
Conservative Growth |
$15.91 |
= |
$16.84 |
| (1-.0550) |
|
|
| |
SAM
Flexible Income |
$10.75 |
= |
$11.17 |
| (1-.0375) |
|
|
| |
SAM
Strategic Growth |
$18.11 |
= |
$19.16 |
| (1-.0550) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
Class
A |
Maximum
Offering Price Calculation |
(as
of October 31, 2023) |
|
|
| |
| NAV |
= |
Maximum
Offering Price |
| (1-Sales
Charge Percentage) |
|
|
| |
Fund/Portfolio |
|
| |
Short-Term
Income |
$11.57 |
= |
$11.84 |
| (1-.0225) |
|
|
| |
SmallCap
|
$20.93 |
= |
$22.15 |
| (1-.0550) |
|
|
| |
Tax-Exempt
Bond |
$6.34 |
= |
$6.59 |
| (1-.0375) |
APPENDIX
C – PROXY VOTING POLICIES
The
proxy voting policies applicable to each Fund appear in the following
order:
The
proxy voting policy for the Fund Complex is first, followed by PGI’s proxy
voting policy, and followed by the proxy voting policies for the sub-advisors,
alphabetically.
Proxy
Voting Policies and Procedures For
Principal
Funds, Inc.
Principal
Variable Contracts Funds, Inc.
Principal
Exchange-Traded Funds
Principal
Diversified Select Real Asset Fund (and other Principal interval
funds)
(each
a “Fund” and together “the Funds”)
(March
9, 2015)
Revised
June 11, 2019
It
is each Fund's policy to delegate authority to its advisor or sub-advisor, as
appropriate, to vote proxy ballots relating to the Fund's portfolio securities
in accordance with the adviser's or sub-adviser's voting policies and
procedures.
The
adviser or sub-adviser must provide, on a quarterly basis:
1.Written
affirmation that all proxies voted during the preceding calendar quarter, other
than those specifically identified by the adviser or sub-adviser, were voted in
a manner consistent with the adviser's or sub-adviser's voting policies and
procedures. In order to monitor the potential effect of conflicts of interest of
an adviser or sub-adviser, the adviser or sub-adviser will identify any proxies
the adviser or sub-adviser voted in a manner inconsistent with its policies and
procedures. The adviser or sub-adviser shall list each vote, explain why the
adviser or sub-adviser voted in a manner contrary to its policies and
procedures, state whether the adviser or sub-adviser’s vote was consistent with
the recommendation to the adviser or sub-adviser of a third-party and, if so,
identify the third-party; and
2.Written
notification of any material changes to the adviser's or sub-adviser's proxy
voting policies and procedures made during the preceding calendar
quarter.
The
adviser or sub-adviser must provide, no later than July 31 of each year, the
following information regarding each proxy vote cast during the 12-month period
ended June 30 for each Fund portfolio or portion of Fund portfolio for which it
serves as investment adviser, in a format acceptable to Fund
management:
1.Identification
of the issuer of the security;
2.Exchange
ticker symbol of the security;
3.CUSIP
number of the security;
4.The
date of the shareholder meeting;
5.A
brief description of the subject of the vote;
6.Whether
the proposal was put forward by the issuer or a shareholder;
7.Whether
and how the vote was cast; and
8.Whether
the vote was cast for or against management of the issuer.
PRINCIPAL
GLOBAL INVESTORS, LLC
Proxy
Voting Policies and Procedures
Introduction
Principal
Global Investors1
(“PGI”) is an investment adviser registered with the U.S. Securities and
Exchange Commission (“SEC”) pursuant to the Investment Advisers Act of 1940 (the
“Advisers Act”). As a registered investment adviser, PGI has a fiduciary duty to
act in the best interests of its clients. PGI recognizes that this duty requires
it to vote client securities, for which it has voting power on the applicable
record date, in a timely manner and make voting decisions that are in the best
interests of its clients. This document, Principal Global Investors’ Proxy
Voting Policies and Procedures (the “Policy”) is intended to comply with the
requirements of the Investment Advisers Act of 1940, the Investment Company Act
of 1940 and the Employee Retirement Income Security Act of 1974 applicable to
the voting of the proxies of both US and non-US issuers on behalf of PGI’s
clients who have delegated such authority and discretion.
Effective
January 1, 2021 Finisterre Investment Teams adopted the policies and procedures
in the Adviser’s compliance manual except for the following proxy policies and
procedures. Finisterre Investment Teams will continue to follow the previously
adopted proxy policies and procedures until amended. Please see the Appendix to
the compliance manual for Finisterre specific proxy policies and
procedures.
Relationship
between Investment Strategy, ESG and Proxy Voting
PGI
has a fiduciary duty to make investment decisions that are in its clients’ best
interests by maximizing the value of their shares. Proxy voting is an important
part of this process through which PGI can support strong corporate governance
structures, shareholder rights and transparency. PGI also believes a company’s
positive environmental, social and governance (“ESG”) practices may influence
the value of the company, leading to long-term shareholder value. PGI may take
these factors into considerations when voting proxies in its effort to seek the
best outcome for its clients. PGI believes that the integration of consideration
of ESG practices in PGI’s investment process helps identify sources of risk that
could erode the long-term investment results it seeks on behalf of its clients.
From time to time, PGI may work with various ESG-related organizations to engage
issuers or advocate for greater levels of disclosure.
Roles
and Responsibilities
Role
of the Proxy Voting Committee
PGI’s
Proxy Voting Committee (the “Proxy Voting Committee”) shall (i) oversee the
voting of proxies and the Proxy Advisory Firm, (ii) where necessary, make
determinations as to how to instruct the vote on certain specific proxies, (iii)
verify ongoing compliance with the Policy, (iv) review the business practices of
the Proxy Advisory Firm and (v) evaluate, maintain, and review the Policy on an
annual basis.
The
Proxy Voting Committee is comprised of representatives of each investment team
and a representative from PGI Risk, Legal, Operations, and Compliance will be
available to advise the Proxy Voting Committee but are non-voting members. The
Proxy Voting Committee may designate one or more of its members to oversee
specific, ongoing compliance with respect to the Policy and may designate
personnel to instruct the vote on proxies on behalf the PGI’s clients
(collectively, “Authorized Persons”).
The
Proxy Voting Committee shall meet at least four times per year, and as necessary
to address special situations.
1
These policies and procedures apply to Principal Global Investors, LLC,
Principal Real Estate Investors, LLC, Principal Global Investors (Hong Kong)
Limited and any affiliates which have entered into participating affiliate
agreements with the aforementioned managers.
Principal
Global Investors, LLC
Role
of Portfolio Management
While
the Proxy Voting Committee establishes the Guidelines and Procedures, the Proxy
Voting Committee does not direct votes for any client except in certain cases
where a conflict of interest exists. Each investment team is responsible for
determining how to vote proxies for those securities held in the portfolios
their team manages. While investment teams generally vote consistently with the
Guidelines, there may be instances where their vote deviates from the
Guidelines. In those circumstances, the investment team will work within the
Exception Process. In some instances, the same security may be held by more than
one investment team. In these cases, PGI may vote differently on the same matter
for different accounts as determined by each investment team.
Proxy
Voting Guidelines
The
Proxy Voting Committee, on an annual basis, or more frequently as needed, will
direct each investment team to review draft proxy voting guidelines recommended
by the Committee (“Draft Guidelines”). The Proxy Voting Committee will collect
the reviews of the Draft Guidelines to determine whether any investment teams
have positions on issues that deviate from the Draft Guidelines. Based on this
review, PGI will adopt proxy voting guidelines. Where an investment team has a
position which deviates from the Draft Guidelines, an alternative set of
guidelines for that investment team may be created. Collectively, these
guidelines will constitute PGI’s current Proxy Voting Guidelines and may change
from time to time (the “Guidelines”). The Proxy Voting Committee has the
obligation to determine that, in general, voting proxies pursuant to the
Guidelines is in the best interests of clients. Exhibit A (Base) and Exhibit B
(Sustainable) to the Policy sets forth the current Guidelines.
There
may be instances where proxy votes will not be in accordance with the
Guidelines. Clients may instruct PGI to utilize a different set of guidelines,
request specific deviations, or directly assume responsibility for the voting of
proxies. In addition, PGI may deviate from the Guidelines on an exception basis
if the investment team or PGI has determined that it is the best interest of
clients in a particular strategy to do so, or where the Guidelines do not direct
a particular response and instead list relevant factors. Any such a deviation
will comply with the Exception Process which shall include a written record
setting out the rationale for the deviation.
The
subject of the proxy vote may not be covered in the Guidelines. In situations
where the Guidelines do not provide a position, PGI will consider the relevant
facts and circumstances of a particular vote and then vote in a manner PGI
believes to be in the clients’ bests interests. In such circumstance, the
analysis will be documented in writing and periodically presented to the Proxy
Voting Committee. To the extent that the Guidelines do not cover potential
voting issues, PGI may consider the spirit of the Guidelines and instruct the
vote on such issues in a manner that PGI believes would be in the best interests
of the client.
Use
of Proxy Advisory Firms
PGI
has retained one or more third-party proxy service provider(s) (the “Proxy
Advisory Firm”) to provide recommendations for proxy voting guidelines,
information on shareholder meeting dates and proxy materials, translate proxy
materials printed in a foreign language, provide research on proxy proposals,
operationally process votes in accordance with the Guidelines on behalf of the
clients for whom PGI has proxy voting responsibility, and provide reports
concerning the proxies voted (“Proxy Voting Services”). Although PGI has
retained the Proxy Advisory Firm for Proxy Voting Services, PGI remains
responsible for proxy voting decisions. PGI has designed the Policy to oversee
and evaluate the Proxy Advisory Firm, including with respect to the matters
described below, to support the PGI’s voting in accordance with this Policy.
Principal
Global Investors, LLC
Oversight
of Proxy Advisory Firms
Prior
to the selection of any new Proxy Advisory Firm and annually thereafter or more
frequently if deemed necessary by PGI, the Proxy Voting Committee will consider
whether the Proxy Advisory Firm: (a) has the capacity and competency to
adequately analyze proxy issues and provide the Proxy Voting Services the Proxy
Advisory Firm has been engaged to provide and (b) can make its recommendations
in an impartial manner, in consideration of the best interests of PGI’s clients,
and consistent with the PGI’s voting policies. Such considerations may include,
depending on the Proxy Voting Services provided, the following: (i) periodic
sampling of votes pre-populated by the Proxy Advisory Firm’s systems as well as
votes cast by the Proxy Advisory Firm to review that the Guidelines adopted by
PGI are being followed; (ii) onsite visits to the Proxy Advisory Firm office
and/or discussions with the Proxy Advisory Firm to determine whether the Proxy
Advisory Firm continues to have the capacity and competency to carry out its
proxy obligations to PGI; (iii) a review of those aspects of the Proxy Advisory
Firm’s policies, procedures, and methodologies for formulating voting
recommendations that PGI consider material to Proxy Voting Services provided to
PGI, including factors considered, with a particular focus on those relating to
identifying, addressing and disclosing potential conflicts of interest
(including potential conflicts related to the provision of Proxy Voting
Services, activities other than Proxy Voting Services, and those presented by
affiliation such as a controlling shareholder of the Proxy Advisory Firm) and
monitoring that materially current, accurate, and complete information is used
in creating recommendations and research; (iv) requiring the Proxy Advisory Firm
to notify PGI if there is a substantive change in the Proxy Advisory Firm’s
policies and procedures or otherwise to business practices, including with
respect to conflicts, information gathering and creating voting recommendations
and research, and reviewing any such change(s); (v) a review of how and when the
Proxy Advisory Firm engages with, and receives and incorporates input from,
issuers, the Proxy Advisory Firm’s clients and other third-party information
sources; (vi) assessing how the Proxy Advisory Firm considers factors unique to
a specific issuer or proposal when evaluating a matter subject to a shareholder
vote; (vii) in case of an error made by the Proxy Advisory Firm, discussing the
error with the Proxy Advisory Firm and determining whether appropriate
corrective and preventive action is being taken; and (viii) assessing whether
the Proxy Advisory Firm appropriately updates its methodologies, guidelines, and
voting recommendations on an ongoing basis and incorporates input from issuers
and Proxy Advisory Firm clients in the update process. In evaluating the Proxy
Advisory Firm, PGI may also consider the adequacy and quality of the Proxy
Advisory Firm’s staffing, personnel, and/or technology.
Procedures
for Voting Proxies
To
increase the efficiency of the voting process, PGI utilizes the Proxy Advisory
Firm to act as its voting agent for its clients’ holdings. Issuers initially
send proxy information to the clients’ custodians. PGI instructs these
custodians to direct proxy related materials to the Proxy Advisory Firm. The
Proxy Advisory Firm provides PGI with research related to each resolution.
PGI
analyzes relevant proxy materials on behalf of their clients and seek to
instruct the vote (or refrain from voting) proxies in accordance with the
Guidelines. A client may direct PGI to vote for such client’s account
differently than what would occur in applying the Policy and the Guidelines. PGI
may also agree to follow a client’s individualized proxy voting guidelines or
otherwise agree with a client on particular voting considerations.
PGI
seeks to vote (or refrain from voting) proxies for its clients in a manner that
PGI determines is in the best interests of its clients, which may include both
considering both the effect on the value of the client’s investments and ESG
factors. In some cases, PGI may determine that it is in the best interests of
clients to refrain from exercising the clients’ proxy voting rights. PGI may
determine that voting is not in the best interests of a client and refrain from
voting if the costs, including the opportunity costs, of voting would, in the
view of PGI, exceed the expected benefits of voting to the client.
Principal
Global Investors, LLC
Procedures
for Proxy Issues within the Guidelines
Where
the Guidelines address the proxy matter being voted on, the Proxy Advisor Firm
will generally process all proxy votes in accordance with the Guidelines. The
applicable investment team may provide instructions to vote contrary to the
Guidelines in their discretion and with sufficient rationale documented in
writing to seek to maximize the value of the client’s investments or is
otherwise in the client’s best interest. This rationale will be submitted to PGI
Compliance to approve and once approved administered by PGI Operations. This
process will follow the Exception Process. The Proxy Voting Committee will
receive and review a quarterly report summarizing all proxy votes for securities
for which PGI exercises voting authority. In certain cases, a client may have
elected to have PGI administer a custom policy which is unique to the Client. If
PGI is also responsible for the administration of such a policy, in general,
except for the specific policy differences, the procedures documented here will
also be applicable, excluding reporting and disclosure procedures.
Procedures
for Proxy Issues Outside the Guidelines
To
the extent that the Guidelines do not cover potential voting issues, the Proxy
Advisory Firm will seek direction from PGI. PGI may consider the spirit of the
Guidelines and instruct the vote on such issues in a manner that PGI believes
would be in the best interests of the client. Although this not an exception to
the Guidelines, this process will also follow the Exception Process. The Proxy
Voting Committee will receive and review a quarterly report summarizing all
proxy votes for securities for which PGI exercises voting discretion, which
shall include instances where issues fall outside the Guidelines.
Securities
Lending
Some
clients may have entered into securities lending arrangements with agent lenders
to generate additional revenue. If a client participates in such lending, the
client will need to inform PGI as part of their contract with PGI if they
require PGI to take actions in regard to voting securities that have been lent.
If not commemorated in such agreement, PGI will not recall securities and as
such, they will not have an obligation to direct the proxy voting of lent
securities.
In
the case of lending, PGI maintains one share for each company security out on
loan by the client. PGI will vote the remaining share in these circumstances.
In
cases where PGI does not receive a solicitation or enough information within a
sufficient time (as reasonably determined by PGI) prior to the proxy-voting
deadline, PGI or the Proxy Advisory Firm may be unable to vote.
Regional
Variances in Proxy Voting
PGI
utilizes the Policy and Guidelines for both US and non-US clients, and there are
some significant differences between voting U.S. company proxies and voting
non-U.S. company proxies. For U.S. companies, it is usually relatively easy to
vote proxies, as the proxies are typically received automatically and may be
voted by mail or electronically. In most cases, the officers of a U.S. company
soliciting a proxy act as proxies for the company’s shareholders.
With
respect to non-U.S. companies, we make reasonable efforts to vote most proxies
and follow a similar process to those in the U.S. However, in some cases it may
be both difficult and costly to vote proxies due to local regulations, customs
or other requirements or restrictions, and such circumstances and expected costs
may outweigh any anticipated economic benefit of voting. The major difficulties
and costs may include: (i) appointing a proxy; (ii) obtaining reliable
information about the time and location of a meeting; (iii) obtaining relevant
information about voting procedures for foreign shareholders; (iv) restrictions
on trading securities that are subject to proxy votes (share-blocking periods);
(v) arranging for a proxy to vote locally in person; (vi) fees charged by
custody banks for providing certain services with regard to voting proxies; and
(vii) foregone income from securities lending programs. In certain instances, it
may be determined by PGI that the anticipated economic benefit outweighs the
expected cost of voting. PGI intends to make their determination on whether to
vote proxies of non-U.S. companies on a case-by-case basis. In doing so, PGI
shall evaluate market requirements and impediments, including the difficulties
set forth above, for voting proxies of companies in each country. PGI
periodically reviews voting logistics, including costs and other voting
difficulties, on a client by client and country by country basis, in order to
determine if there have been any material changes that would affect PGI’s
determinations and procedures.
Principal
Global Investors, LLC
Conflicts
of Interest
PGI
recognizes that, from time to time, potential conflicts of interest may exist.
In order to avoid any perceived or actual conflict of interest, the procedures
set forth below have been established for use when PGI encounters a potential
conflict to ensure that PGI’s voting decisions are based on maximizing
shareholder value and are not the product of a conflict.
Addressing
Conflicts of Interest – Exception Process
Prior
to voting contrary to the Guidelines, the relevant investment team must complete
and submit a report to PGI Compliance setting out the name of the security, the
issue up for vote, a summary of the Guidelines’ recommendation, the vote changes
requested and the rational for voting against the Guidelines’ recommendation.
The member of the investment team requesting the exception must attest to
compliance with Principal’s Code of Conduct and the has an affirmative
obligation to disclose any known personal or business relationship that could
affect the voting of the applicable proxy. PGI Compliance will approve or deny
the exception in consultation, if deemed necessary, with the Legal.
If
PGI Compliance determines that there is no potential material conflict exists,
the Guidelines may be overridden. If PGI Compliance determines that there exists
or may exist a material conflict, it will refer the issue to the Proxy Voting
Committee. The Proxy Voting Committee will consider the facts and circumstances
of the pending proxy vote and the potential or actual material conflict and
decide by a majority vote as to how to vote the proxy – i.e., whether to permit
or deny the exception.
In
considering the proxy vote and potential material conflict of interest, the
Proxy Voting Committee may review the following factors:
•The
percentage of outstanding securities of the issuer held on behalf of clients by
PGI;
•The
nature of the relationship of the issuer with the PGI, its affiliates or its
executive officers;
•Whether
there has been any attempt to directly or indirectly influence the investment
team’s decision;
•Whether
the direction of the proposed vote would appear to benefit PGI or a related
party; and/or
•Whether
an objective decision to vote in a certain way will still create a strong
appearance of a conflict.
In
the event that the Proxy Advisor Firm itself has a conflict and thus is unable
to provide a recommendation, the investment team may vote in accordance with the
recommendation of another independent service provider, if available. If a
recommendation from an independent service provider other than the Proxy Advisor
Firm is not available, the investment team will follow the Exception Process.
PGI Compliance will review the form and if it determines that there is no
potential material conflict mandating a voting recommendation from the Proxy
Voting Committee, the investment team may instruct the Proxy Advisory Firm to
vote the proxy issue as it determines is in the best interest of clients. If PGI
Compliance determines that there exists or may exist a material conflict, it
will refer the issue to the Proxy Voting Committee for consideration as outlined
above.
Principal
Global Investors, LLC
Availability
of Proxy Voting Information and Recordkeeping
Disclosure
On
a quarterly basis, PGI publicly discloses on our website https://www.principalglobal.com/eu/about-us/responsible-investing
a
voting report setting forth the manner in which votes were cast, including
details related to (i) votes against management, and (ii)
abstentions.
Form
more information, Clients may contact PGI for more information related to how
PGI has voted with respect to securities held in the Client’s
account.
On
request, PGI will provide clients with a summary of PGI’s proxy voting
guidelines, process and policies and will inform the clients how they can obtain
a copy of the complete Proxy Voting Policies and Procedures upon request. PGI
will also include such information described in the preceding two sentences in
Part 2A of its Form ADV.
Recordkeeping
PGI
will keep records of the following items: (i) the Guidelines, (ii) the Proxy
Voting Policies and Procedures; (iii) proxy statements received regarding client
securities (unless such statements are available on the SEC’s Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) system); (iv) records of votes they
cast on behalf of clients, which may be maintained by a Proxy Advisory Firm if
it undertakes to provide copies of those records promptly upon request; (v)
records of written client requests for proxy voting information and PGI’s
responses (whether a client’s request was oral or in writing); (vi) any
documents prepared by PGI that were material to making a decision how to vote,
or that memorialized the basis for the decision; (vii) a record of any testing
conducted on any Proxy Advisory Firm’s votes; (viii) materials collected and
reviewed by PGI as part of its due diligence of the Proxy Advisory Firm; (ix) a
copy of each version of the Proxy Advisory Firm’s policies and procedures
provided to PGI; and (x) the minutes of the Proxy Voting Committee meetings. All
of the records referenced above will be kept in an easily accessible place for
at least the length of time required by local regulation and custom, and, if
such local regulation requires that records are kept for less than six years
from the end of the fiscal year during which the last entry was made on such
record, we will follow the US rule of six years. If the local regulation
requires that records are kept for more than six years, we will comply with the
local regulation. We maintain the vast majority of these records electronically.
Principal
Global Investors, LLC
Appendix
- Proxy Voting Policy and Procedures
I.STATEMENT
OF POLICY
Proxy
voting is an important right of investors and reasonable care and diligence must
be undertaken to ensure that such rights are properly and timely exercised. The
Firm generally retains proxy-voting authority with respect to securities
purchased for its clients. Under such circumstances, the Firm votes proxies in
the best interest of its clients and in accordance with these policies and
procedures.
II.USE
OF THIRD-PARTY PROXY VOTING SERVICE
The
Firm has entered into an agreement with Broadridge Investor Communication
Solutions, Inc. (referred to as “Broadridge” and the “Proxy Voting Service”)
acting with Glass Lewis & Co, to enable it to fulfill its proxy voting
obligations.
Broadridge
executes, monitors and records the proxies according to the instructions of the
Firm. The Firm relies on the recommendations of Glass Lewis & Co, LLC to
provide recommendations as to how any proxy should be voted in the best
interests of the Clients. These recommendations are integrated into the voting
platform set up by the Proxy Voting Service, and the Firm has instructed the
Proxy Voting Service to execute all proxies in accordance with such
recommendation unless instructed otherwise by the Firm.
The
SEC has expressed its view that although the voting of proxies remains the duty
of a registered adviser, an adviser may contract with service providers to
perform certain functions with respect to proxy voting so long as the adviser is
comfortable that the proxy voting service is independent from the issuer
companies on which it completes its proxy research. In assessing whether a proxy
voting service is independent (as defined by the SEC), the SEC counsels
investment advisers that they should not follow the recommendations of an
independent proxy voting service without first determining, among other things,
that the proxy voting service (a) has the capacity and competence to analyze
proxy issues and (b) is in fact independent and can make recommendations in an
impartial manner in the best interests of the adviser's clients.
At
a minimum annually, or more frequently as deemed necessary, Compliance will
ensure that a review of the independence and impartiality of the Proxy Voting
Service is carried out, including obtaining certification or other information
from the Proxy Voting Service to enable the Firm to make such an assessment.
Compliance will also monitor any new SEC interpretations regarding the voting of
proxies and the uses of third-party proxy voting services and revise the Firm’s
policies and procedures as necessary.
Proxies
relating to securities held in client accounts will be sent directly to the
Proxy Voting Service. If a proxy is received by anyone in the Firm, they must
immediately inform the Compliance and work with Compliance to ensure that it is
promptly forwarded to the Proxy Voting Service. In the event that the Proxy
Voting Service is unable to complete/provide its research regarding a security
on a timely basis or the Firm has made a determination that it is in the best
interests of the Firm’s clients for the Firm to vote the proxy, the Firm’s
general proxy-voting procedures are required to be followed, as follows.
Compliance
will require that:
1.the
recipient of the proxy will forward a copy to Compliance, who will keep a copy
of each proxy received;
2.if
the recipient is not the Portfolio Manager responsible for voting the proxy on
behalf of the Firm, s/he will forward a copy to such Portfolio
manager;
3.the
Portfolio Manager will determine how to vote the proxy promptly in order to
allow enough time for the completed proxy to be returned to the issuer prior to
the vote taking place; and provide evidence of such to Compliance;
4.Absent
material conflicts (see Section V), the Portfolio Manager will determine whether
the Firm will follow the Proxy Voting Service’s recommendation or vote the proxy
directly. The Portfolio Manager will send his/her decision on how the Firm
should vote a proxy to the Proxy Voting Service, in a timely and appropriate
manner. It is desirable to have the Proxy Voting Service complete the actual
voting so there exists one central source for the documentation of the Firm’s
proxy voting records.
Principal
Global Investors, LLC
III.VOTING
GUIDELINES
To
the extent that the Firm is voting a proxy itself and not utilizing the Proxy
Voting Service, the Firm will consider the proxy on a case by case basis and
require that the relevant investment professional vote the proxy in a manner
consistent with the Firm’s duty. Investment professionals of the Firm each have
the duty to vote proxies in a way that, in their best judgment, is in the best
interest of the Firm’s clients.
IV.DISCLOSURE
A.The
Firm will disclose in its Form ADV Part 2 that clients may contact the Chief
Compliance Officer via e-mail or telephone in order to obtain information on how
the Firm voted such client’s proxies, and to request a copy of these policies
and procedures. If a client requests this information, the Chief Compliance
Officer will prepare a written response to the client that lists, with respect
to each voted proxy that the client has inquired about, (1) the name of the
issuer; (2) the proposal voted upon and (3) how the Firm voted the client’s
proxy.
B.A
concise summary of these Proxy Voting Policies and Procedures will be included
in the Firm’s Form ADV Part 2 and will be updated whenever these policies and
procedures are updated. Compliance will arrange for a copy of this summary to be
sent to all existing clients.
V.POTENTIAL
CONFLICTS OF INTEREST
A.In
the event that the Firm is directly voting a proxy, Compliance will examine
conflicts that exist between the interests of the Firm and its clients. This
examination will include a review of the relationship of the Firm, its personnel
and its affiliates with the issuer of each security and any of the issuer’s
affiliates to determine if the issuer is a client of the Firm or an affiliate of
the Firm or has some other relationship with the Firm, its personnel or a client
of the Firm.
B.If,
as a result of Compliance’s examination, a determination is made that a material
conflict of interest exists, the Firm will determine whether voting in
accordance with the voting guidelines and factors described above is in the best
interests of the client. If the proxy involves a matter covered by the voting
guidelines and factors described above, the Firm will generally vote the proxy
as specified above. Alternatively, the Firm may vote the proxy in accordance
with the recommendation of the Proxy Voting Service.
The
Firm may disclose the conflict to the affected clients and, except in the case
of clients that are subject to the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), give the clients the opportunity to vote their
proxies themselves In the case of ERISA clients, if the Investment Management
Agreement reserves to the ERISA client the authority to vote proxies when the
Firm determines it has a material conflict that affects its best judgment as an
ERISA fiduciary, the Firm will give the ERISA client the opportunity to vote the
proxies themselves.
Absent
the client reserving voting rights, the Firm will either vote the proxies in
accordance with the policies outlined in Section III “Voting Guidelines” above
or vote the proxies in accordance with the recommendation of the Proxy Voting
Service.
Principal
Global Investors, LLC
VI.PROXY
RECORDKEEPING
Compliance
will maintain files relating to the Firm’s proxy voting procedures in an easily
accessible place. (Under the services contract between the Firm and its Proxy
Voting Service, the Proxy Voting Service will maintain the Firm’s proxy-voting
records). Records will be maintained and preserved for five years from the end
of the fiscal year during which the last entry was made on a record, with
records for the most recent two years kept in the offices of the Firm. Records
of the following will be included in the files:
1.Copies
of these proxy voting policies and procedures, and any amendments
thereto;
2.A
copy of each proxy statement that the Firm receives regarding client securities
(the Firm may rely on third parties or EDGAR);
3.A
record of each vote that the Firm casts;
4.A
copy of any document the Firm created that was material to making a decision how
to vote proxies, or that memorializes that decision. (For votes that are
inconsistent with the Firm’s general proxy voting polices, the reason/rationale
for such an inconsistent vote is required to be briefly documented and
maintained); and
5.A
copy of each written client request for information on how the Firm voted such
client’s proxies, and a copy of any written response to any (written or oral)
client request for information on how the Firm voted its proxies.
Principal
Global Investors, LLC
AllianceBernstein
L.P.
Proxy
Voting and Governance Policy
March
2023
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TABLE
OF CONTENTS |
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1. |
INTRODUCTION |
3 |
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2. |
RESEARCH
UNDERPINS DECISION MAKING |
3 |
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3. |
PROXY
VOTING GUIDELINES |
4 |
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| 3.1 |
BOARD
AND DIRECTOR PROPOSALS |
4 |
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| 3.2 |
COMPENSATION
PROPOSALS |
7 |
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| 3.3 |
CAPITAL
CHANGES AND ANTI-TAKEOVER PROPOSALS |
10 |
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| 3.4 |
AUDITOR
PROPOSALS |
13 |
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| 3.5 |
SHAREHOLDER
ACCESS AND VOTING PROPOSALS |
14 |
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| 3.6 |
ENVIRONMENTAL,
SOCIAL AND DISCLOSURE PROPOSALS |
16 |
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4. |
CONFLICTS
OF INTEREST |
19 |
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| 4.1 |
INTRODUCTION |
19 |
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| 4.2 |
ADHERENCE
TO STATED PROXY VOTING POLICIES |
19 |
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| 4.3 |
DISCLOSURE
OF CONFLICTS |
19 |
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| 4.4 |
POTENTIAL
CONFLICTS LIST |
19 |
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| 4.5 |
DETERMINE
EXISTENCE OF CONFLICT OF INTEREST |
20 |
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| 4.6 |
REVIEW
OF THIRD PARTY RESEARCH SERVICE CONFLICTS OF INTEREST |
20 |
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| 4.7 |
CONFIDENTIAL
VOTING |
20 |
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| 4.8 |
A
NOTE REGARDING AB’S STRUCTURE |
21 |
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5. |
VOTING
TRANSPARENCY |
21 |
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6. |
RECORDKEEPING |
22 |
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| 6.1 |
PROXY
VOTING POLICY |
22 |
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| 6.2 |
PROXY
STATEMENTS RECEIVED REGARDING CLIENT SECURITIES |
22 |
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| 6.3 |
RECORDS
OF VOTES CAST ON BEHALF OF CLIENTS |
22 |
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| 6.4 |
PRE-DISCLOSRE
OF VOTE INTENTIONS ON SELECT PROPOSALS |
22 |
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| 6.5 |
RECORDS
OF CLIENTS REQUESTS FOR PROXY VOTING INFORMATION |
22 |
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| 6.6 |
DOCUMENTS
PREPARED BY AB THAT ARE MATERIAL TO VOTING DECISIONS |
22 |
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7. |
PROXY
VOTING PROCEDURES |
22 |
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| 7.1 |
VOTE
ADMINISTRATION |
22 |
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| 7.2 |
SHARE
BLOCKING AND ABSTAINING FROM VOTING CLIENT SECURITIES |
22 |
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| 7.3 |
LOANED
SECURITIES |
23 |
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EXHIBITS
•Proxy
Voting Guideline Summary
•Proxy
Voting Conflict of Interest Form
1.INTRODUCTION
AllianceBernstein
L.P.’s (“AB,” “we,” “us,” “our” and similar terms) mission is to work in our
clients’ best interests to deliver better investment outcomes through
differentiated research insights and innovative portfolio solutions. As a
fiduciary and investment adviser, we place the interests of our clients first
and treat all our clients fairly and equitably, and we have an obligation to
responsibly allocate, manage and oversee their investments to seek sustainable,
long-term shareholder value.
AB
has authority to vote proxies relating to securities in certain client
portfolios and, accordingly, AB’s fiduciary obligations extend to AB’s exercise
of such proxy voting authority for each client AB has agreed to exercise that
duty. AB’s general policy is to vote proxy proposals, amendments, consents or
resolutions relating to client securities, including interests in private
investment funds, if any (collectively, "proxies"), in a manner that serves the
best interests of each respective client as determined by AB in its discretion,
after consideration of the relevant clients' investment strategies, and in
accordance with this Proxy Voting and Governance Policy (“Proxy Voting and
Governance Policy” or “Policy”) and the operative agreements governing the
relationship with each respective client (“Governing Agreements”). This Policy
outlines our principles for proxy voting, includes a wide range of issues that
often appear on voting ballots, and applies to all of AB’s internally managed
assets, globally. It is intended for use by those involved in the proxy voting
decision-making process and those responsible for the administration of proxy
voting (“members of Responsibility team”), in order to ensure that this Policy
and its procedures are implemented consistently.
To
be effective stewards of our client’s investments and maximize shareholder
value, we need to vote proxies on behalf of our clients responsibly. This Policy
forms part of a suite of policies and frameworks beginning with AB’s Stewardship
Statement that outline our approach to Responsibility, stewardship, engagement,
climate change, human rights, global slavery and human trafficking, and
controversial investments. Proxy voting is an integral part of this process,
enabling us to support strong corporate governance structures, shareholder
rights, transparency, and disclosure, and encourage corporate action on material
environmental, social and governance (“ESG”) and climate issues.
This
Policy is overseen by the Proxy Voting and Governance Committee (“Proxy Voting
and Governance Committee” or “Committee”), which provides oversight and includes
senior representatives from Equities, Fixed Income, Responsibility, Legal and
Operations. It is the responsibility of the Committee to evaluate and maintain
proxy voting procedures and guidelines, to evaluate proposals and issues not
covered by these guidelines, to consider changes in the Policy, and to review
the Policy no less frequently than annually. In addition, the Committee meets at
least three times a year and as necessary to address special
situations.
2.RESEARCH
UNDERPINS DECISION MAKING
As
a research-driven firm, we approach our proxy voting responsibilities with the
same commitment to rigorous research and engagement that we apply to all our
investment activities. The different investment philosophies utilized by our
investment teams may occasionally result in different conclusions being drawn
regarding certain proposals. In turn, our votes on some proposals may vary by
issuer, while maintaining the goal of maximizing the value of the securities in
client portfolios.
We
sometimes manage accounts where proxy voting is directed by clients or newly
acquired subsidiary companies. In these cases, voting decisions may deviate from
this Policy. Where we have agreed to vote proxies on behalf of our clients, we
have an obligation to vote proxies in a timely manner and we apply the
principles in this Policy to our proxy decisions. To the extent there are any
inconsistencies between this Policy and a client’s Governing Agreements, the
Governing Agreements shall supersede this Policy.
RESEARCH
SERVICES
We
subscribe to the corporate governance and proxy research services of vendors
such as Institutional Shareholder Services Inc. (“ISS”) and Glass Lewis at
different levels.This research includes proxy voting recommendations distributed
by ISS and Glass Lewis. All our investment professionals can access these
materials via the members of the Responsibility team and/or the Committee. ISS
and Glass Lewis’s research services serve as supplementary data sources in
addition to the company filings and reports. AB considers additional disclosures
provided by issuers into its vote decisions, if we are notified of such updates
by the companies themselves, or by one of the proxy research services we
subscribe to, ahead of the vote cut off date.
ENGAGEMENT
In
evaluating proxy issues and determining our votes, we welcome and seek
perspectives of various parties. Internally, members of Responsibility team may
consult the Committee, Chief Investment Officers, Portfolio Managers, and/or
Research Analysts across our equities platforms, and Portfolio Managers who
manage accounts in which a stock is held.
Externally,
we may engage with companies in advance of their Annual General Meeting, and
throughout the year. We believe engagement provides the opportunity to share our
philosophy, our corporate governance values, and more importantly, affect
positive change that we believe will drive shareholder value. Also, these
meetings often are joint efforts between the investment professionals, who are
best positioned to comment on company-specific details, and members of
Responsibility team, who offer a more holistic view of ESG and climate practices
and relevant trends. In addition, we engage with shareholder proposal proponents
and other stakeholders to understand different viewpoints and
objectives.
3.PROXY
VOTING GUIDELINES
Our
proxy voting guidelines are both principles-based and rules-based. We adhere to
a core set of principles that are described in this Policy. We assess each proxy
proposal in light of these principles. Our proxy voting “litmus test” will
always be guided by what we view as most likely to maximize long-term
shareholder value. We believe that authority and accountability for setting and
executing corporate policies, goals and compensation generally should rest with
a company's board of directors and senior management. In return, we support
strong investor rights that allow shareholders to hold directors and management
accountable if they fail to act in the best interests of
shareholders.
With
this as a backdrop, our proxy voting guidelines pertaining to specific issues
are set forth below. We generally vote proposals in accordance with these
guidelines but, consistent with our “principles-based” approach to proxy voting,
we may deviate from these guidelines if we believe that deviating from our
stated Policy is necessary to help maximize long-term shareholder value) or as
otherwise warranted by the specific facts and circumstances of an investment. In
addition, these guidelines are not intended to address all issues that may
appear on all proxy ballots. We will evaluate on a case-by-case basis any
proposal not specifically addressed by these guidelines, whether submitted by
management or shareholders, always keeping in mind our fiduciary duty to make
voting decisions that, by maximizing long-term shareholder value, are in our
clients’ best interests.
SHAREHOLDER
PROPOSAL ASSESSMENT FRAMEWORK
AB’s
commitment to maximize the long-term value of clients’ portfolios drives how we
analyze shareholder proposals (each an “SHP”). We believe ESG and climate
considerations are important elements that help improve the accuracy of our
valuation of companies. We think it is in our clients’ best interests to
incorporate a more comprehensive set of risks and opportunities, such as ESG and
climate issues, from a long-term shareholder value perspective. Rather than
opting to automatically support all shareholder proposals that mention an ESG or
climate issue, we evaluate whether or not each shareholder proposal promotes
genuine improvement in the way a company addresses an ESG or climate issue,
thereby enhancing shareholder value for our clients in managing a more
comprehensive set of risks and opportunities for the company’s business. The
evaluation of a proposal that addresses an ESG or climate issue will consider
(among other things) the following core factors, as necessary:
+Materiality
of the mentioned ESG or climate issue for the company’s business
+The
company’s current practice, policy, and framework
+Prescriptiveness
of the proposal – does the shareholder demand unreasonably restrict management
from conducting its business?
+Context
of the shareholder proposal – is the proponent tied to any particular interest
group(s)? Does the proposal aim to promote the interest of the shareholders or
group that they are associated with?
+How
does the proposal add value for the shareholders?
This
shareholder proposal framework applies to all proposal items labeled “SHP”
throughout the Policy and any shareholder proposals that aren’t discussed in the
Policy but appear in our voting universe.
ESCALATION
STRATEGIES
Proxy
voting and engagements work in conjunction to raise and escalate investor
concerns to companies. However, we may encounter circumstances where continued
voting against management or engagement dialogues are no longer productive or
helpful in driving progress. In cases where we feel that the issuer’s behavior
isn’t aligned with our clients’ best interests, we can escalate our voting and
engagement by taking actions including, but not limited to, as outlined in
AB
Stewardship Statement.
The materiality of the issue and the response of management will drive our
approach.
3.1BOARD
AND DIRECTOR PROPOSALS
1.Board
Oversight and Director Accountability on Material Environmental and Social
Topics Impacting Shareholder Value: Climate Risk Management and Human Rights
Oversight CASE-BY-CASE
AB
believes that board oversight and director accountability are critical elements
of corporate governance. Companies demonstrate effective governance through
proactive monitoring of material risks and opportunities, including ESG related
risks and opportunities. In evaluating investee companies’ adaptiveness to
evolving climate risks and human rights oversight, AB engages its significant
holdings on climate strategy through a firmwide campaign. Based on each
company’s response, AB will hold respective directors accountable as defined by
the committee charter of the company.
2.Establish
New Board Committees and Elect Board Members with Specific Expertise (SHP)
CASE-BY-CASE
We
believe that establishing committees should be the prerogative of a
well-functioning board of directors. However, we may support shareholder
proposals to establish additional board committees to address specific
shareholder issues, including ESG and climate issues. In some cases, oversight
for material ESG issues can be managed effectively by existing committees of the
board of directors, depending on the expertise of the directors assigned to such
committees. We consider on a case-by-case basis proposals that require the
addition of a board member with a specific area of expertise.
3.Changes
in Board Structure and Amending the Articles of Incorporation FOR
Companies
may propose various provisions with respect to the structure of the board of
directors, including changing the manner in which board vacancies are filled,
directors are nominated and the number of directors. Such proposals may require
amending the charter or by-laws or may otherwise require shareholder approval.
When these proposals are not controversial or meant as an anti-takeover device,
which is generally the case, we vote in their favor. However, if we believe a
proposal is intended as an anti-takeover device and diminishes shareholder
rights, we generally vote against.
We
may vote against directors for amending by-laws without seeking shareholder
approval and/or restricting or diminishing shareholder rights.
4.Classified
Boards AGAINST
A
classified board typically is divided into three separate classes. Each class
holds office for a term of two or three years. Only a portion of the board can
be elected or replaced each year. Because this type of proposal has fundamental
anti-takeover implications, we generally oppose the adoption of classified
boards unless there is a justifiable financial reason or an adequate sunset
provision. We may also vote against directors that fail to implement shareholder
approved proposals to declassify boards that we previously
supported.
5.Director
Liability and Indemnification
CASE-BY-CASE
Some
companies argue that increased indemnification and decreased liability for
directors are important to ensure the continued availability of competent
directors. However, others argue that the risk of such personal liability
minimizes the propensity for corruption and recklessness.
We
generally support indemnification provisions that are consistent with the local
jurisdiction in which the company has been formed. “With respect to acts
conducted in the normal course of business, we vote in favor of proposals
adopting i) indemnification for directors or ii) exculpation of officers.” We
also vote in favor of proposals that expand coverage for directors and officers
where, despite an unsuccessful legal defense, we believe the director or officer
acted in good faith and in the best interests of the company. We oppose
proposals to indemnify directors for gross negligence.
6.Disclose
CEO Succession Plan (SHP) FOR
Proposals
like these are often suggested by shareholders of companies with long-tenured
CEOs and/or high employee turnover rates. Even though some markets might not
require the disclosure of a CEO succession plan, we do think it is good business
practice and will support these proposals.
7.Election
of Directors FOR
The
election of directors is an important vote. We expect directors to represent
shareholder interests at the company and maximize shareholder value. We
generally vote in favor of the management-proposed slate of directors while
considering a number of factors, including local market best practice. We
believe companies should have a majority of independent directors and
independent key committees. However, we will incorporate local market regulation
and corporate governance codes into our decision making. We may support
requirements that surpass market regulation and corporate governance codes
implemented in a local market if we believe heightened requirements may improve
corporate governance practices. We will generally regard a director as
independent if the director satisfies the criteria for independence either (i)
espoused by the primary exchange on which the company’s shares are traded, or
(ii) set forth in the code we determine to be best practice in the country where
the subject company is domiciled. We may also take into account affiliations,
related-party transactions and prior service to the company. We consider the
election of directors who are “bundled” on a single slate to be a poor
governance practice and vote on a case-by-case basis considering the amount of
information available and an assessment of the group’s
qualifications.
In
addition:
We
believe that directors have a duty to respond to shareholder actions that have
received significant shareholder support. We may vote against directors (or
withhold votes for directors if plurality voting applies) who fail to act on key
issues. We oppose directors who fail to attend at least 75% of board meetings
within a given year without a reasonable excuse.
We
may abstain or vote against (depending on a company’s history of disclosure in
this regard) directors of issuers where there is insufficient information about
the nominees disclosed in the proxy statement.
We
may vote against directors for poor compensation, audit, or governance practices
including the lack of a formal key committee.
We
may vote against directors for unilateral bylaw amendments that diminish
shareholder rights.
We
also may consider engaging company management (by phone, in writing and in
person), until any issues have been satisfactorily resolved.
a.Controlled
Company Exemption CASE-BY-CASE
In
certain markets, a different standard for director independence may be
applicable for controlled companies, which are companies where more than 50% of
the voting power is held by an individual, group or another company, or as
otherwise defined by local market standards. We may take these local standards
into consideration when determining the appropriate level of independence
required for the board and key committees.
Exchanges
in certain jurisdictions do not have a controlled company exemption (or
something similar). In such a jurisdiction, if a company has a majority
shareholder or group of related majority shareholders with a majority economic
interest, we generally will not oppose that company’s directors simply because
the board does not include a majority of independent members, although we may
take local standards into consideration when determining the appropriate level
of independence required for the board and key committees. We will, however,
consider these directors in a negative light if the company has a history of
violating the rights of minority shareholders.
b.Voting
for Director Nominees in a Contested
Election
CASE-BY-CASE
Votes
in a contested election of directors are evaluated on a case-by-case basis with
the goal of maximizing shareholder value.
8.Board
Capacity
We
believe that incorporating an assessment of each director’s capacity into
consideration for a director election is essential to promote meaningful board
oversight of the management. Director effectiveness aside, a social externality
arises when the practice of directors serving on many public company boards
becomes widespread, as this limits the opportunities for other board candidates.
AB currently votes against the appointment of directors who occupy, or would
occupy following the vote: four (4) or more total public company board seats for
non-CEOs, three (3) or more total public company board seats for the sitting CEO
of the company in question and two (2) or more total public company board seats
for sitting CEOs of companies other than the company under consideration. We may
also exercise flexibility on occasions where the “over-boarded” director
nominee’s presence on the board is critical, based on company specific contexts
in absence of any notable accountability concerns.
9.Board
Diversity
Diversity
is an important element of assessing the board’s quality, as it promotes wider
range of perspectives to be considered for companies to both strategize and
mitigate risks. In line with this view, several European countries legally
require a quota of female directors. Other European countries have a
comply-or-explain policy. In the US, California requires corporations
headquartered in the State of California to have at least one female director on
board.
We
believe that boards should develop, as part of their refreshment process, a
framework for identifying diverse candidates for all open board positions. We
believe diversity is broader than gender and should also take into consideration
factors such as business experience, ethnicity, tenure, and nationality. As
such, we generally vote in favor of proposals that encourage the adoption of a
diverse search policy, so-called “Rooney Rules”, assuring that each director
search includes at least one woman, and in the US, at least one underrepresented
person of color, in the slate of nominees. Our views on board diversity
translate to the following two voting approaches:
a.Gender
Diversity: AB will generally vote against the nominating/governance committee
chair, or a relevant incumbent member in case of classified boards, when the
board has no female members. In Japan, we will vote against the top management.
This approach applies globally.
Ethnic
and Racial Diversity: AB will escalate the topic of board level ethnic/racial
diversity and engage with its significant holdings that lack a minority
ethnic/racial representation on the board through 2021. Based on the outcome of
such engagements, AB will begin voting against the nominating/governance
committee chair or a relevant incumbent member for classified boards of
companies that lack minority ethnic/racial representation on their board in 2022
without a valid explanation.
10.Independent
Lead Director (SHP) FOR
We
support shareholder proposals that request a company to amend its by-laws to
establish an independent lead director if the position of chairman is
non-independent. We view the existence of a strong independent lead director,
whose role is robust and includes clearly defined duties and responsibilities,
such as the authority to call meetings and approve agendas, as a good example of
the sufficient counter-balancing governance. If a company has such an
independent lead director in place, we will generally oppose a proposal to
require an independent board chairman, barring any additional board leadership
concerns.
11.Limit
Term of Directorship (SHP) CASE-BY-CASE
These
proposals seek to limit the term during which a director may serve on a board to
a set number of years.
Accounting
for local market practice, we generally consider a number of factors, such as
overall level of board independence, director qualifications, tenure, board
diversity and board effectiveness in representing our interests as shareholders,
in assessing whether limiting directorship terms is in shareholders’ best
interests. Accordingly, we evaluate these items case-by-case.
12.Majority
Independent1
Directors (SHP)
FOR
Each
company’s board of directors has a duty to act in the best interest of the
company’s shareholders at all times. We believe that these interests are best
served by having directors who bring objectivity to the company and are free
from potential conflicts of interests. Accordingly, we support proposals seeking
a majority of independent directors on the board while taking into consideration
local market regulation and corporate governance codes.
13.Majority
of Independent Directors on Key Committees (SHP) FOR
In
order to ensure that those who evaluate management’s performance, recruit
directors and set management’s compensation are free from conflicts of
interests, we believe that the audit2,
nominating/governance, and compensation committees should be composed of a
majority of independent directors, considering the local market regulation and
corporate governance codes as well as controlled company status.
14.Majority
Votes for Directors (SHP)
FOR
We
believe that good corporate governance requires shareholders to have a
meaningful voice in the affairs of the company. This objective is strengthened
if directors are elected by a majority of votes cast at an annual meeting rather
than by the plurality method commonly used. With plurality voting a director
could be elected by a single affirmative vote even if the rest of the votes were
withheld.
We
further believe that majority voting provisions will lead to greater director
accountability. Therefore, we support shareholder proposals that companies amend
their by-laws to provide that director nominees be elected by an affirmative
vote of a majority of the votes cast, provided the proposal includes a carve-out
to provide for plurality voting in contested elections where the number of
nominees exceeds the number of directors to be elected.
15.Removal
of Directors Without Cause (SHP) FOR
Company
by-laws sometimes define cause very narrowly, including only conditions of
criminal indictment, final adverse adjudication that fiduciary duties were
breached or incapacitation, while also providing shareholders with the right to
remove directors only upon “cause”.
We
believe that the circumstances under which shareholders have the right to remove
directors should not be limited to those traditionally defined by companies as
“cause”. We also believe that shareholders should have the right to conduct a
vote to remove directors who fail to perform in a manner consistent with their
fiduciary duties or representative of shareholders’ best interests. And, while
we would prefer shareholder proposals that seek to broaden the definition of
“cause” to include situations like these, we generally support proposals that
would provide shareholders with the right to remove directors without
cause.
16.Require
Independent Board Chairman (SHP)
CASE-BY-CASE
We
believe there can be benefits to an executive chairman and to having the
positions of chairman and CEO combined as well as split. When the chair is
non-independent the company, must have sufficient counter-balancing governance
in place, generally through a strong independent lead director. Also, for
companies with smaller market capitalizations, separate chairman and CEO
positions may not be practical.
1
For purposes of this Policy, generally, we will consider a director independent
if the director satisfies the independence definition set forth in the listing
standards of the exchange on which the common stock is listed. However, we may
deem local independence classification criteria insufficient.
2
Pursuant to the SEC rules, adopted pursuant to the Sarbanes-Oxley Act of 2002,
as of October 31, 2004, each U.S. listed issuer must have a fully independent
audit committee.
17.Cross-Shareholding
(Japan) AGAINST
Independent
oversight at the board level can be disrupted if top management representatives
or directors of the board hold notable amount of shares of another entity for
purposes other than meeting the share holding requirement as an executive. Such
practice can result in misalignment between the shareholders and their board and
management. This has historically been a widely-debated concern in Japan.
Accordingly, we will vote against the top management on ballot, if 20% or
greater of the company’s net asset is identified to be under cross-shareholding
practice.
3.2COMPENSATION
PROPOSALS
18.Pro
Rata Vesting of Equity Compensation Awards-Change in Control (SHP) CASE-BY-CASE
We
examine proposals on the treatment of equity awards in the event of a change in
control on a case-by-case basis. If a change in control is accompanied by
termination of employment, often referred to as a double-trigger, we generally
support accelerated vesting of equity awards. If, however, there is no
termination agreement in connection with a change in control, often referred to
as a single-trigger, we generally prefer pro rata vesting of outstanding equity
awards.
19.Adopt
Policies to Prohibit any Death Benefits to Senior Executives (SHP)
AGAINST
We
view these bundled proposals as too restrictive and conclude that blanket
restrictions on any and all such benefits, including the payment of life
insurance premiums for senior executives, could put a company at a competitive
disadvantage.
20.Advisory
Vote to Ratify Directors’ Compensation (SHP) FOR
Similar
to advisory votes on executive compensation, shareholders may request a
non-binding advisory vote to approve compensation given to board members. We
generally support this item.
21.Amend
Executive Compensation Plan Tied to Performance (Bonus Banking) (SHP)
AGAINST
These
proposals seek to force a company to amend executive compensation plans such
that compensation awards tied to performance are deferred for shareholder
specified and extended periods of time. As a result, awards may be adjusted
downward if performance goals achieved during the vesting period are not
sustained during the added deferral period.
We
believe that most companies have adequate vesting schedules and clawbacks in
place. Under such circumstances, we will oppose these proposals. However, if a
company does not have what we believe to be adequate vesting and/or clawback
requirements, we decide these proposals on a case-by-case basis.
22.Approve
Remuneration for Directors and Auditors CASE-BY-CASE
We
will vote on a case-by-case basis where we are asked to approve remuneration for
directors or auditors. We will generally oppose performance-based remuneration
for non-executive directors as this may compromise independent oversight. In
addition, where disclosure relating to the details of such remuneration is
inadequate or provided without sufficient time for us to consider our vote, we
may abstain or vote against, depending on the adequacy of the company’s prior
disclosures in this regard and the local market practice.
23.Approve
Retirement Bonuses for Directors (Japan and South Korea)
CASE-BY-CASE
Retirement
bonuses are customary in Japan and South Korea. Companies seek approval to give
the board authority to grant retirement bonuses for directors and/or auditors
and to leave the exact amount of bonuses to the board’s discretion. We will
analyze such proposals on a case-by-case basis, considering management’s
commitment to maximizing long-term shareholder value. However, when the details
of the retirement bonus are inadequate or undisclosed, we may abstain or vote
against.
24.Approve
Special Payments to Continuing Directors and Auditors (Japan) CASE-BY-CASE
In
conjunction with the abolition of a company’s retirement allowance system, we
will generally support special payment allowances for continuing directors and
auditors if there is no evidence of their independence becoming impaired.
However, when the details of the special payments are inadequate or undisclosed,
we may abstain or vote against.
25.Disclose
Executive and Director Pay (SHP) CASE-BY-CASE
The
United States Securities and Exchange Commission (“SEC”) has adopted rules
requiring increased and/or enhanced compensation-related and corporate
governance-related disclosure in proxy statements and Forms 10-K. Similar steps
have been taken by regulators in foreign jurisdictions. We believe the rules
enacted by the SEC and various foreign regulators generally ensure more complete
and transparent disclosure. Therefore, while we will consider them on a
case-by-case basis (analyzing whether there are any relevant disclosure
concerns), we generally vote against shareholder proposals seeking additional
disclosure of executive and director compensation, including proposals that seek
to specify the measurement of performance-based compensation, if the company is
subject to SEC rules or similar rules espoused by a regulator in a foreign
jurisdiction. Similarly, we generally support proposals seeking additional
disclosure of executive and director compensation if the company is not subject
to any such rules.
26.Executive
and Employee Compensation Plans, Policies and Reports CASE-BY-CASE
Compensation
plans usually are complex and are a major corporate expense, so we evaluate them
carefully and on a case-by-case basis. In all cases, however, we assess each
proposed Compensation Plan within the framework of four guiding principles, each
of which ensures a company’s Compensation Plan helps to align the long-term
interests of management with shareholders:
Valid
measures of business performance tied to the firm’s strategy and shareholder
value creation, which are clearly articulated and incorporate appropriate time
periods, should be utilized;
Compensation
costs should be managed in the same way as any other expense;
Compensation
should reflect management’s handling, or failure to handle, any recent social,
environmental, governance, ethical or legal issue that had a significant adverse
financial or reputational effect on the company and;
In
granting compensatory awards, management should exhibit a history of integrity
and decision-making based on logic and well thought out processes.
We
may oppose plans which include, and directors who establish, compensation plan
provisions deemed to be poor practice such as automatic acceleration of equity,
or single-triggered, in the event of a change in control. Although votes on
compensation plans are by nature only broad indications of shareholder views,
they do lead to more compensation-related dialogue between management and
shareholders and help ensure that management and shareholders meet their common
objective: maximizing shareholder value.
In
markets where votes on compensation plans are not required for all companies, we
will support shareholder proposals asking the board to adopt such a vote on an
advisory basis.
Where
disclosure relating to the details of Compensation Plans is inadequate or
provided without sufficient time for us to consider our vote, we may abstain or
vote against, depending on the adequacy of the company’s prior disclosures in
this regard. Where appropriate, we may raise the issue with the company directly
or take other steps.
27.Limit
Executive Pay (SHP) CASE-BY-CASE
We
believe that management and directors, within reason, should be given latitude
in determining the mix and types of awards offered to executive officers. We
vote against shareholder proposals seeking to limit executive pay if we deem
them too restrictive. Depending on our analysis of the specific circumstances,
we are generally against requiring a company to adopt a policy prohibiting tax
gross up payments to senior executives.
28.Mandatory
Holding Periods (SHP) AGAINST
We
generally vote against shareholder proposals asking companies to require a
company’s executives to hold stock for a specified period of time after
acquiring that stock by exercising company-issued stock options (i.e.,
precluding “cashless” option exercises), unless we believe implementing a
mandatory holding period is necessary to help resolve underlying problems at a
company that have hurt, and may continue to hurt, shareholder value. We are
generally in favor of reasonable stock ownership guidelines for executives.
29.Performance-Based
Stock Option Plans (SHP) CASE-BY-CASE
These
shareholder proposals require a company to adopt a policy that all or a portion
of future stock options granted to executives be performance-based.
Performance-based options usually take the form of indexed options (where the
option sale price is linked to the company’s stock performance versus an
industry index), premium priced options (where the strike price is significantly
above the market price at the time of the grant) or performance vesting options
(where options vest when the company’s stock price exceeds a specific target).
Proponents argue that performance-based options provide an incentive for
executives to outperform the market as a whole and prevent management from being
rewarded for average performance. We believe that management, within reason,
should be given latitude in determining the mix and types of awards it offers.
However, we recognize the benefit of linking a portion of executive compensation
to certain types of performance benchmarks. While we will not support proposals
that require all options to be performance-based, we will generally support
proposals that require a portion of options granted to senior executives be
performance-based. However, because performance-based options can also result in
unfavorable tax treatment and the company may already have in place an option
plan that sufficiently ties executive stock option plans to the company’s
performance, we will consider such proposals on a case-by-case
basis.
30.Prohibit
Relocation Benefits to Senior Executives (SHP) AGAINST
We
do not consider such perquisites to be problematic pay practices as long as they
are properly disclosed. Therefore, we will vote against shareholder proposals
asking to prohibit relocation benefits.
31.Recovery
of Performance-Based Compensation (SHP) FOR
We
generally support shareholder proposals requiring the board to seek recovery of
performance-based compensation awards to senior management and directors in the
event of a fraud or other reasons that resulted in the detriment to shareholder
value and/or company reputation due to gross ethical lapses. In deciding how to
vote, we consider the adequacy of the existing company clawback policy, if
any.
32.Submit
Golden Parachutes/Severance Plans to a Shareholder Vote (SHP) FOR
Golden
Parachutes assure key officers of a company lucrative compensation packages if
the company is acquired and/or if the new owners terminate such officers. We
recognize that offering generous compensation packages that are triggered by a
change in control may help attract qualified officers. However, such
compensation packages cannot be so excessive that they are unfair to
shareholders or make the company unattractive to potential bidders, thereby
serving as a constructive anti-takeover mechanism. Accordingly, we support
proposals to submit severance plans (including supplemental retirement plans),
to a shareholder vote, and we review proposals to ratify or redeem such plans
retrospectively on a case-by-case basis.
33.Submit
Golden Parachutes/Severance Plans to a Shareholder Vote Prior to Their Being
Negotiated by Management (SHP)
CASE-BY-CASE
We
believe that in order to attract qualified employees, companies must be free to
negotiate compensation packages without shareholder interference. However,
shareholders must be given an opportunity to analyze a compensation plan’s
final, material terms in order to ensure it is within acceptable limits.
Accordingly, we evaluate proposals that require submitting severance plans
and/or employment contracts for a shareholder vote prior to being negotiated by
management on a case-by-case basis.
34.Submit
Survivor Benefit Compensation Plan to Shareholder Vote (SHP)
FOR
Survivor
benefit compensation plans, or “golden coffins”, can require a company to make
substantial payments or awards to a senior executive’s beneficiaries following
the death of the senior executive. The compensation can take the form of
unearned salary or bonuses, accelerated vesting or the continuation in force of
unvested equity grants, perquisites and other payments or awards. This
compensation would not include compensation that the senior executive chooses to
defer during his or her lifetime.
We
recognize that offering generous compensation packages that are triggered by the
passing of senior executives may help attract qualified officers. However, such
compensation packages cannot be so excessive that they are unfair to
shareholders or make the company unattractive to potential bidders, thereby
serving as a constructive anti-takeover mechanism.
3.3CAPITAL
CHANGES AND ANTI-TAKEOVER PROPOSALS
35.Amend
Exclusive Forum Bylaw (SHP) AGAINST
We
will generally oppose proposals that ask the board to repeal the company’s
exclusive forum bylaw. Such bylaws require certain legal action against the
company to take place in the state of the company’s incorporation. The courts
within the state of incorporation are considered best suited to interpret that
state’s laws.
36.Amend
Net Operating Loss (“NOL”) Rights Plans FOR
NOL
Rights Plans are established to protect a company’s net operating loss carry
forwards and tax credits, which can be used to offset future income. We believe
this is a reasonable strategy for a company to employ. Accordingly, we will vote
in favor of NOL Rights Plans unless we believe the terms of the NOL Rights Plan
may provide for a long-term anti-takeover device.
37.Authorize
Share Repurchase
FOR
We
generally support share repurchase proposals that are part of a well-articulated
and well-conceived capital strategy. We assess proposals to give the board
unlimited authorization to repurchase shares on a case-by-case basis.
Furthermore, we would generally support the use of derivative instruments (e.g.,
put options and call options) as part of a share repurchase plan absent a
compelling reason to the contrary. Also, absent a specific concern at the
company, we will generally support a repurchase plan that could be continued
during a takeover period.
38.Blank
Check Preferred Stock AGAINST
Blank
check preferred stock proposals authorize the issuance of certain preferred
stock at some future point in time and allow the board to establish voting,
dividend, conversion, and other rights at the time of issuance. While blank
check preferred stock can provide a corporation with the flexibility needed to
meet changing financial conditions, it also may be used as the vehicle for
implementing a “poison pill” defense or some other entrenchment
device.
We
are concerned that, once this stock has been authorized, shareholders have no
further power to determine how or when it will be allocated. Accordingly, we
generally oppose this type of proposal.
39.Corporate
Restructurings, Merger Proposals and Spin-Offs CASE-BY-CASE
Proposals
requesting shareholder approval of corporate restructurings, merger proposals
and spin-offs are determined on a case-by-case basis. In evaluating these
proposals and determining our votes, we are singularly focused on meeting our
goal of maximizing long-term shareholder value.
40.Elimination
of Preemptive Rights CASE-BY-CASE
Preemptive
rights allow the shareholders of the company to buy newly issued shares before
they are offered to the public in order to maintain their percentage ownership.
We believe that, because preemptive rights are an important shareholder right,
careful scrutiny must be given to management’s attempts to eliminate them.
However, because preemptive rights can be prohibitively expensive to widely held
companies, the benefit of such rights will be weighed against the economic
effect of maintaining them.
41.Expensing
Stock Options (SHP) FOR
US
generally accepted accounting principles require companies to expense stock
options, as do the accounting rules in many other jurisdictions (including those
jurisdictions that have adopted IFRS - international financial reporting
standards). If a company is domiciled in a jurisdiction where the accounting
rules do not already require the expensing of stock options, we will support
shareholder proposals requiring this practice and disclosing information about
it.
42.Fair
Price Provisions
CASE-BY-CASE
A
fair price provision in the company's charter or by laws is designed to ensure
that each shareholder's securities will be purchased at the same price if the
corporation is acquired under a plan not agreed to by the board. In most
instances, the provision requires that any tender offer made by a third party
must be made to all shareholders at the same price.
Fair
pricing provisions attempt to prevent the “two-tiered front-loaded offer” where
the acquirer of a company initially offers a premium for a sufficient percentage
of shares of the company to gain control and subsequently makes an offer for the
remaining shares at a much lower price. The remaining shareholders have no
choice but to accept the offer. The two-tiered approach is coercive as it
compels a shareholder to sell his or her shares immediately in order to receive
the higher price per share. This type of tactic has caused many states to adopt
fair price provision statutes to restrict this practice.
We
consider fair price provisions on a case-by-case basis. We oppose any provision
where there is evidence that management intends to use the provision as an
anti-takeover device as well as any provision where the shareholder vote
requirement is greater than a majority of disinterested shares (i.e., shares
beneficially owned by individuals other than the acquiring party).
43.Increase
Authorized Common Stock
CASE-BY-CASE
In
general we regard increases in authorized common stock as serving a legitimate
corporate purpose when used to: implement a stock split, aid in a
recapitalization or acquisition, raise needed capital for the firm, or provide
for employee savings plans, stock option plans or executive compensation plans.
That said, we may oppose a particular proposed increase if we consider the
authorization likely to lower the share price (this would happen, for example,
if the firm were proposing to use the proceeds to overpay for an acquisition, to
invest in a project unlikely to earn the firm’s cost of capital, or to
compensate employees well above market rates). We oppose increases in authorized
common stock where there is evidence that the shares are to be used to implement
a “poison pill” or another form of anti-takeover device, or if the issuance of
new shares would, in our judgment, excessively dilute the value of the
outstanding shares upon issuance. In addition, a satisfactory explanation of a
company's intentions—going beyond the standard “general corporate purposes”—must
be disclosed in the proxy statement for proposals requesting an increase of
greater than 100% of the shares outstanding. We view the use of derivatives,
particularly warrants, as legitimate capital-raising instruments and apply these
same principles to their use as we do to the authorization of common stock.
Under certain circumstances where we believe it is important for shareholders to
have an opportunity to maintain their proportional ownership, we may oppose
proposals requesting shareholders approve the issuance of additional shares if
those shares do not include preemptive rights.
In
Hong Kong, it is common for companies to request board authority to issue new
shares up to 20% of outstanding share capital. The authority typically lapses
after one year. We may vote against plans that do not prohibit issuing shares at
a discount, taking into account whether a company has a history of doing
so.
44.Issuance
of Equity Without Preemptive Rights
FOR
We
are generally in favor of issuances of equity without preemptive rights of up to
30% of a company’s outstanding shares unless there is concern that the issuance
will be used in a manner that could hurt shareholder value (e.g., issuing the
equity at a discount from the current market price or using the equity to help
create a “poison pill” mechanism).
45.Multi
Class Equity Structure AGAINST
The
one share, one vote principle — stating that voting power should be proportional
to an investor’s economic ownership— is generally preferred in order to hold the
board accountable to shareholders. AB’s general expectation of companies with
multi class equity structures is to attach safeguards for minority shareholders
when appropriate and in a cost-effective manner, which may include measures such
as sunset provisions or requiring periodic shareholder reauthorizations. We
expect boards to routinely review existing multi-class vote structures and share
their current view.
With
that backdrop, we acknowledge that multi-class structures may be beneficial for
a period of time, allowing management to focus on longer-term value creation
which benefits all shareholders. Accordingly, AB recommends companies that had
an initial public offering (IPO) in the past two (2) years to institute a
time-based sunset to be triggered seven (7) years from the year of the IPO. In
2021, we will engage with companies in our significant holdings universe that
fall under this category. We may vote against the relevant board member of
companies that remain unresponsive starting 2022 AGM, unless there is a valid
case to apply an exemption.
For
companies that instituted a multi-class share structure unrelated to an IPO
event or had an IPO two (2) or more years ago, sunset should be seven (7) years
from the year when the issuer implemented the multi-class structure. If the
structure was adopted greater than seven (7) years ago, we will expect the
issuer to consider the shortest sunset plan that makes sense based on the
issuer’s context. In 2021, we will engage with our portfolio companies in scope.
We may vote against the respective board member if we don’t see any progress
starting 2022 AGM, unless there is a valid case to apply an exemption.
46.Net
Long Position Requirement FOR
We
support proposals that require the ownership level needed to call a special
meeting to be based on the net long position of a shareholder or shareholder
group. This standard ensures that a significant economic interest accompanies
the voting power.
47.Reincorporation
CASE-BY-CASE
There
are many valid business reasons a corporation may choose to reincorporate in
another jurisdiction. We perform a case-by-case review of such proposals, taking
into consideration management’s stated reasons for the proposed
move.
Careful
scrutiny also will be given to proposals that seek approval to reincorporate in
countries that serve as tax havens. When evaluating such proposals, we consider
factors such as the location of the company’s business, the statutory
protections available in the country to enforce shareholder rights and the tax
consequences of the reincorporation to shareholders.
48.Reincorporation
to Another Jurisdiction to Permit Majority Voting or Other Changes in Corporate
Governance (SHP) CASE-BY-CASE
If
a shareholder proposes that a company move to a jurisdiction where majority
voting (among other shareholder-friendly conditions) is permitted, we will
generally oppose the move notwithstanding the fact that we favor majority voting
for directors. Our rationale is that the legal costs, taxes, other expenses, and
other factors, such as business disruption, in almost all cases would be
material and outweigh the benefit of majority voting. If, however, we should
find that these costs are not material and/or do not outweigh the benefit of
majority voting, we may vote in favor of this kind of proposal. We will evaluate
similarly proposals that would require reincorporation in another state to
accomplish other changes in corporate governance.
49.Stock
Splits FOR
Stock
splits are intended to increase the liquidity of a company’s common stock by
lowering the price, thereby making the stock seem more attractive to small
investors. We generally vote in favor of stock split proposals.
50.Submit
Company’s Shareholder Rights Plan to Shareholder Vote (SHP) FOR
Most
shareholder rights plans (also known as “poison pills”) permit the shareholders
of a target company involved in a hostile takeover to acquire shares of the
target company, the acquiring company, or both, at a substantial discount once a
“triggering event” occurs. A triggering event is usually a hostile tender offer
or the acquisition by an outside party of a certain percentage of the target
company's stock. Because most plans exclude the hostile bidder from the
purchase, the effect in most instances is to dilute the equity interest and the
voting rights of the potential acquirer once the plan is triggered. A
shareholder rights plan is designed to discourage potential acquirers from
acquiring shares to make a bid for the issuer. We believe that measures that
impede takeovers or entrench management not only infringe on the rights of
shareholders but also may have a detrimental effect on the value of the
company.
We
support shareholder proposals that seek to require the company to submit a
shareholder rights plan to a shareholder vote. We evaluate on a case-by-case
basis proposals to implement or eliminate a shareholder rights
plan.
51.Transferrable
Stock Options CASE-BY-CASE
In
cases where a compensation plan includes a transferable stock option program, we
will consider the plan on a case-by-case basis.
These
programs allow stock options to be transferred to third parties in exchange for
cash or stock. In effect, management becomes insulated from the downside risk of
holding a stock option, while the ordinary shareholder remains exposed to
downside risk. This insulation may unacceptably remove management’s exposure to
downside risk, which significantly misaligns management and shareholder
interests. Accordingly, we generally vote against these programs if the transfer
can be executed without shareholder approval, is available to executive officers
or non-employee directors, or we consider the available disclosure relating to
the mechanics and structure of the program to be insufficient to determine the
costs, benefits, and key terms of the program.
3.4AUDITOR
PROPOSALS
52.Appointment
of Auditors
FOR
We
believe that the company is in the best position to choose its accounting firm,
and we generally support management's recommendation.
We
recognize that there may be inherent conflicts when a company’s independent
auditors perform substantial non-audit related services for the company.
Therefore, in reviewing a proposed auditor, we will consider the amount of fees
paid for non-audit related services performed compared to the total audit fees
paid by the company to the auditing firm, and whether there are any other
reasons for us to question the independence or performance of the firm’s auditor
such as, for example, tenure. We generally will deem as excessive the non-audit
fees paid by a company to its auditor if those fees account for 50% or more of
total fees paid. In the UK market, which utilizes a different calculation, we
adhere to a non-audit fee cap of 100% of audit fees. Under these circumstances,
we generally vote against the auditor and the directors, in particular the
members of the company’s audit committee. In addition, we generally vote against
authorizing the audit committee to set the remuneration of such auditors. We
exclude from this analysis non-audit fees related to IPOs, bankruptcy emergence,
and spin-offs and other extraordinary events. We may vote against or abstain due
to a lack of disclosure of the name of the auditor while taking into account
local market practice.
53.Approval
of Financial Statements
FOR
In
some markets, companies are required to submit their financial statements for
shareholder approval. This is generally a routine item and, as such, we will
vote for the approval of financial statements unless there are appropriate
reasons to vote otherwise. We may vote against if the information is not
available in advance of the meeting.
54.Approval
of Internal Statutory Auditors
FOR
Some
markets (e.g., Japan) require the annual election of internal statutory
auditors. Internal statutory auditors have a number of duties, including
supervising management, ensuring compliance with the articles of association,
and reporting to a company’s board on certain financial issues. In most cases,
the election of internal statutory auditors is a routine item, and we will
support management’s nominee provided that the nominee meets the regulatory
requirements for serving as internal statutory auditors. However, we may vote
against nominees who are designated independent statutory auditors who serve as
executives of a subsidiary or affiliate of the issuer or if there are other
reasons to question the independence of the nominees.
55.Limitation
of Liability of External Statutory Auditors (Japan) CASE-BY-CASE
In
Japan, companies may limit the liability of external statutory auditors in the
event of a shareholder lawsuit through any of three mechanisms: (i) submitting
the proposed limits to shareholder vote; (ii) setting limits by modifying the
company’s articles of incorporation; and (iii) setting limits in contracts with
outside directors, outside statutory auditors and external audit firms (requires
a modification to the company’s articles of incorporation). A vote by 3% or more
of shareholders can nullify a limit set through the second mechanism. The third
mechanism has historically been the most prevalent.
We
review proposals to set limits on auditor liability on a case-by-case basis,
considering whether such a provision is necessary to secure appointment and
whether it helps to maximize long-term shareholder value.
56.Separating
Auditors and Consultants (SHP)
CASE-BY-CASE
We
believe that a company serves its shareholders’ interests by avoiding potential
conflicts of interest that might interfere with an auditor’s independent
judgment. SEC rules adopted as a result of the Sarbanes-Oxley Act of 2002
attempted to address these concerns by prohibiting certain services by a
company’s independent auditors and requiring additional disclosure of other
non-audit related services.
We
evaluate on a case-by-case basis proposals that go beyond the SEC rules or other
local market standards by prohibiting auditors from performing other non-audit
services or calling for the board to adopt a policy to ensure auditor
independence.
We
take into consideration the policies and procedures the company already has in
place to ensure auditor independence and non-audit fees as a percentage of total
fees paid to the auditor are not excessive.
3.5SHAREHOLDER
ACCESS AND VOTING PROPOSALS
57.A
Shareholder’s Right to Call Special Meetings (SHP)
FOR
Most
state corporation statutes (though not Delaware, where many US issuers are
domiciled) allow shareholders to call a special meeting when they want to take
action on certain matters that arise between regularly scheduled annual
meetings. This right may apply only if a shareholder, or a group of
shareholders, owns a specified percentage as defined by the relevant company
bylaws.
We
recognize the importance of the right of shareholders to remove poorly
performing directors, respond to takeover offers and take other actions without
having to wait for the next annual meeting. However, we also believe it is
important to protect companies and shareholders from nuisance proposals. We
further believe that striking a balance between these competing interests will
maximize shareholder value. We believe that encouraging active share ownership
among shareholders generally is beneficial to shareholders and helps maximize
shareholder value. Accordingly, we will generally support a proposal to
establish shareholders’ right to call a special meeting unless we see a
potential abuse of the right based on the company’s current share ownership
structure.
58.Adopt
Cumulative Voting (SHP) CASE-BY-CASE
Cumulative
voting is a method of electing directors that enables each shareholder to
multiply the number of his or her shares by the number of directors being
considered. A shareholder may then cast the total votes for any one director or
a selected group of directors. For example, a holder of 10 shares normally casts
10 votes for each of 12 nominees to the board thus giving the shareholder 120
(10 × 12) votes. Under cumulative voting, the shareholder may cast all 120 votes
for a single nominee, 60 for two, 40 for three, or any other combination that
the shareholder may choose.
We
believe that encouraging activism among shareholders generally is beneficial to
shareholders and helps maximize shareholder value. Cumulative voting supports
the interests of minority shareholders in contested elections by enabling them
to concentrate their votes and dramatically increase their chances of electing a
dissident director to a board.
Accordingly,
we generally will support shareholder proposals to restore or provide for
cumulative voting and we generally will oppose management proposals to eliminate
cumulative voting. However, we may oppose cumulative voting if a company has in
place both proxy access, which allows shareholders to nominate directors to the
company’s ballot, and majority voting (with a carve-out for plurality voting in
situations where there are more nominees than seats), which requires each
director to receive the affirmative vote of a majority of votes cast and, we
believe, leads to greater director accountability to shareholders.
Also,
we support cumulative voting at controlled companies regardless of any other
shareholder protections that may be in place.
59.Adopt
Cumulative Voting in Dual Shareholder Class Structures (SHP) FOR
In
dual class structures (such as A and B shares) where the shareholders with a
majority economic interest have a minority voting interest, we generally vote in
favor of cumulative voting for those shareholders.
60.Early
Disclosure of Voting Results (SHP)
AGAINST
These
proposals seek to require a company to disclose votes sooner than is required by
the local market. In the US, the SEC requires disclosure in the first periodic
report filed after the company’s annual meeting which we believe is reasonable.
We do not support requests that require disclosure earlier than the time
required by the local regulator.
61.Limiting
a Shareholder’s Right to Call Special Meetings AGAINST
Companies
contend that limitations on shareholders’ rights to call special meetings are
needed to prevent minority shareholders from taking control of the company's
agenda. However, such limits also have anti-takeover implications because they
prevent a shareholder or a group of shareholders who have acquired a significant
stake in the company from forcing management to address urgent issues, such as
the potential sale of the company. Because most states prohibit shareholders
from abusing this right, we see no justifiable reason for management to
eliminate this fundamental shareholder right. Accordingly, we generally will
vote against such proposals.
In
addition, if the board of directors, without shareholder consent, raises the
ownership threshold a shareholder must reach before the shareholder can call a
special meeting, we will vote against those directors.
62.Permit
a Shareholder’s Right to Act by Written Consent (SHP) CASE-BY-CASE
Action
by written consent enables a large shareholder or group of shareholders to
initiate votes on corporate matters prior to the annual meeting. We believe this
is a fundamental shareholder right and, accordingly, will generally support
shareholder proposals seeking to restore this right. However, in cases where a
company has a majority shareholder or group of related majority shareholders
with majority economic interest, we will oppose proposals seeking to restore
this right as there is a potential risk of abuse by the majority shareholder or
group of majority shareholders. We may also vote against the proposal if the
company provides shareholders a right to call special meetings with an ownership
threshold of 15% or below in absence of material restrictions, as we believe
that shareholder access rights should be considered from a holistic view rather
than promoting all possible access rights that may impede one another in
contrast to long-term shareholder value.
63.Proxy
Access for Annual Meetings (SHP) (Management)
FOR
These
proposals allow “qualified shareholders” to nominate directors. We generally
vote in favor of management and shareholder proposals for proxy access that
employ guidelines reflecting the SEC framework for proxy access (adopted by the
SEC in 2010,
but
vacated by the US District of Columbia Circuit Court of Appeals in 2011), which
would have allowed a single shareholder, or group of shareholders, who hold at
least 3% of the voting power for at least three years continuously to nominate
up to 25% of the current board seats, or two directors, for inclusion in the
subject company’s annual proxy statement alongside management
nominees.
We
may vote against proposals that use requirements that are stricter than the
SEC’s framework including implementation restrictions and against individual
board members, or entire boards, who exclude from their ballot properly
submitted shareholder proxy access proposals or compete against shareholder
proxy access proposals with stricter management proposals on the same ballot We
will generally vote in favor of proposals that seek to amend an existing right
to more closely align with the SEC framework.
We
will evaluate on a case-by-case basis proposals with less stringent requirements
than the vacated SEC framework.
From
time to time we may receive requests to join with other shareholders to support
a shareholder action. We may, for example, receive requests to join a voting
block for purposes of influencing management. If the third parties requesting
our participation are not affiliated with us and have no business relationships
with us, we will consider the request on a case-by-case basis. However, where
the requesting party has a business relationship with us (e.g., the requesting
party is a client or a significant service provider), agreeing to such a request
may pose a potential conflict of interest. As a fiduciary we have an obligation
to vote proxies in the best interest of our clients (without regard to our own
interests in generating and maintaining business with our other clients) and
given our desire to avoid even the appearance of a conflict, we will generally
decline such a request.
64.Reduce
Meeting Notification from 21 Days to 14 Days (UK) FOR
Companies
in the United Kingdom may, with shareholder approval, reduce the notice period
for extraordinary general meetings from 21 days to 14 days.
A
reduced notice period expedites the process of obtaining shareholder approval of
additional financing needs and other important matters. Accordingly, we support
these proposals.
65.Shareholder
Proponent Engagement Process (SHP) FOR
We
believe that proper corporate governance requires that proposals receiving
support from a majority of shareholders be considered and implemented by the
company. Accordingly, we support establishing an engagement process between
shareholders and management to ensure proponents of majority-supported
proposals, have an established means of communicating with
management.
66.Supermajority
Vote Requirements AGAINST
A
supermajority vote requirement is a charter or by-law requirement that, when
implemented, raises the percentage (higher than the customary simple majority)
of shareholder votes needed to approve certain proposals, such as mergers,
changes of control, or proposals to amend or repeal a portion of the Articles of
Incorporation.
In
most instances, we oppose these proposals and support shareholder proposals that
seek to reinstate the simple majority vote requirement. However we may support
supermajority vote requirements at controlled companies as a protection to
minority shareholders from unilateral action of the controlling
shareholder.
67.Authorize
Virtual-Only Shareholder
Meetings CASE-BY-CASE
COVID-19
has called for a need to authorize companies in holding virtual-only shareholder
meetings. While recognizing technology has enabled shareholders to remain
connected with the board and management, AB acknowledges that virtual only
shareholder meetings have resulted in certain companies abusing their authority
by limiting shareholders from raising questions and demanding onerous
requirements to be able to read their questions during the meeting. Because such
practice varies by company and jurisdiction with different safeguard provisions,
we will consider—among other things—a company’s disclosure on elements such as
those below when voting on management or shareholder proposals for authorizing
the company to hold virtual-only shareholder meetings:
+Explanation
for eliminating the in-person meeting;
+Clear
description of which shareholders are qualified to participate in virtual-only
shareholder meetings and how attendees can join the meeting;
+How
to submit and ask questions;
+How
the company plans to mimic a real-time in-person question and answer session;
and
+List
of questions received from shareholders in their entirety, both prior to and
during the meeting, as well as associated responses from the
company
3.6ENVIRONMENTAL,
SOCIAL AND DISCLOSURE PROPOSALS
68.Animal
Welfare (SHP) CASE-BY-CASE
These
proposals may include reporting requests or policy adoption on items such as pig
gestation crates and animal welfare in the supply chain For proposals requesting
companies to adopt a policy, we will carefully consider existing policies and
the company’s incorporation of national standards and best practices. In
addition, we will evaluate the potential enactment of new regulations, as well
as any investment risk related to the specific issue.
We
generally support shareholder proposals calling for reports and disclosure while
taking into account existing policies and procedures of the company and whether
the proposed information is of added benefit to shareholders.
69.Climate
Change (SHP) CASE-BY-CASE, Generally FOR (on proposals
described below)
Proposals
addressing climate change concerns are plentiful and their scope varies. Climate
change increasingly receives investor attention as a potentially critical and
material risk to the sustainability of a wide range of business-specific
activities. These proposals may include emissions standards or reduction
targets, quantitative goals, and impact assessments. We generally support these
proposals, while taking into account the materiality of the issue and whether
the proposed information is of added benefit to shareholders.
For
proposals requesting companies to adopt a policy, we will carefully consider
existing policies and the company’s incorporation of national standards and best
practices. In addition, we will evaluate the potential enactment of new
regulations, as well as any investment risk related to the specific
issue.
We
generally support shareholder proposals calling for reports and disclosure,
while taking into account existing policies and procedures of the company and
whether the proposal is of added benefit to shareholders.
70.Say
on Climate
Say
on Climate is an advisory vote mechanism that seeks to obtain shareholder
approval on the company’s existing climate risk management related efforts. We
recognize both the benefits of having an opportunity to review the company’s
climate program, but also the risks entailed in formally approving the
plan.3
Accordingly, we are generally unsupportive of shareholder proposals that require
management to establish a say on climate mechanism.
In
assessing the climate risk management strategy of issuers, AllianceBernstein
considers factors such as following, but not limited to:
Emissions
Metrics and Targets
•Does
the company have emissions metrics and targets in place for Scopes 1 and 2
emissions in alignment with the Paris Agreement?
Climate
Risk Management
•Does
the company perform scenario analysis that includes the use of a widely
recognized, scientifically-based 1.5 degree scenario?
Governance
•Does
the Board provide oversight on the issuer’s climate change
strategy?
•Has
the company incurred any recent material failures, or been involved in any
controversies, related to managing climate-related risk?
3
https://www.unpri.org/stewardship/climate-transition-plan-votes-investor-briefing/9096.article
Disclosure
•Does
the company disclose its exposure to climate risk via the framework developed by
the Taskforce on Climate- related Financial Disclosure?
While
Say on Climate (“SOC”) vote offers us an additional opportunity to express our
view of the company’s relevant risk management, AllianceBernstein’s engagement
and fundamental research processes drive our integration of climate related
risks and opportunities apart from the SOC mechanism.
71.Charitable
Contributions (SHP) (Management) CASE-BY-CASE
Proposals
relating to charitable contributions may be sponsored by either management or
shareholders.
Management
proposals may ask to approve the amount for charitable
contributions.
We
generally support shareholder proposals calling for reports and disclosure while
taking into account existing policies and procedures of the company and whether
the proposed information is of added benefit to shareholders.
72.Environmental
Proposals (SHP)
CASE-BY-CASE
These
proposals can include reporting and policy adoption requests in a wide variety
of areas, including, but not limited to, (nuclear) waste, deforestation,
biodiversity, packaging and recycling, renewable energy, toxic material, palm
oil and water.
We
consider company specific contexts as well as our ongoing research and
engagements for evaluating the company’s existing policies and practices.
National standards, best practices and the potential enactment of new
regulations in addition to any investment risk regarding the specific issue are
also incorporated into our assessments.
We
generally support shareholder proposals calling for reports and disclosure while
taking into account existing policies and procedures of the company and whether
the proposed information is of added benefit to shareholders.
73.Genetically
Altered or Engineered Food and Pesticides (SHP)
CASE-BY-CASE
These
proposals may include reporting requests on pesticides monitoring/use and
Genetically Modified Organism (GMO) as well as GMO labeling.
For
proposals requesting companies to adopt a policy, we will carefully consider
existing policies and the company’s incorporation of national standards and best
practices. In addition, we will evaluate the potential enactment of new
regulations, as well as any investment risk related to the specific
issue.
We
generally support shareholder proposals calling for reports and disclosure while
taking into account existing policies and procedures of the company and whether
the proposed information is of added benefit to shareholders.
74.Health
Proposals (SHP) CASE-BY-CASE
These
proposals may include reports on pharmaceutical pricing, antibiotic use in the
meat supply, and tobacco products. We generally support shareholder proposals
calling for reports and disclosure while taking into account the current
reporting policies of the company and whether the proposed information is of
added benefit to shareholders.
For
proposals requesting companies to adopt a policy, we will carefully consider
existing policies and the company’s incorporation of national standards and best
practices. In addition, we will evaluate the potential enactment of new
regulations, as well as any investment risk related to the specific issue. We
generally support shareholder proposals calling for reports and disclosure while
taking into account existing policies and procedures of the company and whether
the proposal is of added benefit to shareholders.
75.Human
Rights Policies and Reports (SHP)
CASE-BY-CASE
These
proposals may include reporting requests on human rights risk assessments
(“HRIA”), humanitarian engagement and mediation policies, working conditions,
adopting policies on supply chain oversight, and expanding existing policies in
these areas. We recognize that many companies have complex supply chains which
have led to increased awareness of supply chain issues as an investment
risk.
For
proposals requesting companies to adopt a policy, we will carefully consider
existing policies and the company’s incorporation of national standards and best
practices. In addition, we will evaluate the potential enactment of new
regulations, as well as any investment risk related to the specific
issue.
For
proposals addressing forced labor and supply chain management from the human
rights perspective, AB assesses the proposal based on its proprietary framework.
The framework considers factors such as oversight of the issue, risk
identification process, action plan to mitigate risks, the effectiveness of the
action plan, and future improvement.
We
generally support shareholder proposals calling for reports and disclosure while
taking into account existing policies and procedures of the company and whether
the proposed information is of added benefit to shareholders.
76.Include
Sustainability as a Performance Measure (SHP) CASE-BY-CASE
We
believe management and directors should be given latitude in determining
appropriate performance measurements. While doing so, consideration should be
given to how long-term sustainability issues might affect future company
performance. Therefore, we will evaluate on a case-by-case basis proposals
requesting companies to consider incorporating specific, measurable, practical
goals consisting of sustainability principles and environmental impacts as
metrics for incentive compensation and how they are linked with our objectives
as long-term shareholders.
77.Lobbying
and Political Spending (SHP) FOR
We
generally vote in favor of proposals requesting increased disclosure of
political contributions and lobbying expenses, including those paid to trade
organizations and political action committees, whether at the federal, state, or
local level. These proposals may increase transparency.
78.Other
Business
AGAINST
In
certain jurisdictions, these proposals allow management to act on issues that
shareholders may raise at the annual meeting. Because it is impossible to know
what issues may be raised, we will vote against these proposals.
79.Reimbursement
of Shareholder Expenses (SHP) AGAINST
These
shareholder proposals would require companies to reimburse the expenses of
shareholders who submit proposals that receive a majority of votes cast or the
cost of proxy contest expenses. We generally vote against these proposals,
unless reimbursement occurs only in cases where management fails to implement a
majority passed shareholder proposal, in which case we may vote in
favor.
80.Sustainability
Report (SHP)
FOR
We
generally support shareholder proposals calling for reports and disclosure
related to sustainability while taking into account existing policies and
procedures of the company and whether the proposed information is of added
benefit to shareholders.
81.Workplace:
Diversity (SHP)
FOR
We
generally support shareholder proposals calling for reports and disclosure
surrounding workplace diversity while taking into account existing policies and
procedures of the company and whether the proposed information is of added
benefit to shareholders.
We
generally support proposals requiring a company to amend its Equal Employment
Opportunity policies to prohibit workplace discrimination based on sexual
orientation and gender identity.
82.Workplace:
Gender Pay Equity(SHP) FOR
A
report on pay disparity between genders typically compares the difference
between male and female median earnings expressed as a percentage of male
earnings and may include, (i) statistics and rationale explanation pertaining to
changes in the size of the gap, (ii) recommended actions, and (iii) information
on whether greater oversight is needed over certain aspects of the company’s
compensation policies. In the U.S., we are generally supportive of proposals to
require companies to make similar assessments and disclosure related to the pay
disparity between different gender and ethnic/racial groups. Shareholder
requests to place a limit on a global median ethnic/racial pay gap will be
assessed based on the cultural and the legal context of markets to which the
company is exposed.
The
SEC requires US issuers with fiscal years ending on or after January 1, 2017, to
contrast CEO pay with median employee pay. This requirement, however, does not
specifically address gender pay equity issues in such pay disparity
reports.
Accordingly,
we will generally support proposals requiring gender pay metrics, taking into
account the specific metrics and scope of the information requested and whether
the SEC’s requirement renders the proposal unnecessary.
4.CONFLICTS
OF INTEREST
4.1INTRODUCTION
As
a fiduciary, we always must act in our clients’ best interests. We strive to
avoid even the appearance of a conflict that may compromise the trust our
clients have placed in us, and we insist on strict adherence to fiduciary
standards and compliance with all applicable federal and state securities laws.
We have adopted a comprehensive Code of Business Conduct and Ethics (“Code”) to
help us meet these obligations. As part of this responsibility and as expressed
throughout the Code, we place the interests of our clients first and attempt to
avoid any perceived or actual conflicts of interest.
AB
recognizes that potentially material conflicts of interest arise when we engage
with a company or vote a proxy solicited by an issuer that sponsors a retirement
plan we manage (or administer), that distributes AB-sponsored mutual funds, or
with which AB or one or more of our employees have another business or personal
relationship, and that such conflicts could affect how we vote on the issuer’s
proxy. Similarly, potentially material conflicts of interest arise when engaging
with and deciding how to vote on a proposal sponsored or supported by a
shareholder group that is a client. In order to address any perceived or actual
conflict of interest, the procedures set forth below in sections 4.2 through 4.8
have been established for use when we encounter a potential conflict to ensure
that our engagement activities and voting decisions are in our clients’ best
interest consistent with our fiduciary duties and seek to maximize shareholder
value.
4.2ADHERENCE
TO STATED PROXY VOTING POLICIES
Votes
generally are cast in accordance with this Policy4.
In situations where our Policy involves a case-by-case assessment, the following
sections provide criteria that will guide our decision. In situations where our
Policy on a particular issue involves a case-by-case assessment and the vote
cannot be clearly decided by an application of our stated Policy, a member of
the Committee or his/her designee will make the voting decision in accordance
with the basic principle of our Policy to vote proxies with the intention of
maximizing the value of the securities in our client accounts. In these
situations, the voting rationale must be documented either on the voting
platform of our proxy services vendor, by retaining relevant emails or another
appropriate method. Where appropriate, the views of investment professionals are
considered. All votes cast contrary to our stated voting Policy on specific
issues must be documented. If a proxy vote involves a potential conflict of
interest, the voting decision will be determined in accordance with the
processes outlined in section 4.5 of the Policy. On an annual basis, the
Committee will receive and review a report of all such votes so as to confirm
adherence with the Policy.
4.3DISCLOSURE
OF CONFLICTS
When
considering a proxy proposal, members of the Committee or investment
professionals involved in the decision-making process must disclose to the
Committee any potential conflict (including personal relationships) of which
they are aware and any substantive contact that they have had with any
interested outside party (including the issuer or shareholder group sponsoring a
proposal) regarding the proposal. Any previously unknown conflict will be
recorded on the Potential Conflicts List (discussed below). If a member of the
Committee has a material conflict of interest, he or she generally must recuse
himself or herself from the decision-making process.
4.4POTENTIAL
CONFLICTS LIST
No
less frequently than annually, a list of companies and organizations whose
engagement and proxies may pose potential conflicts of interest is compiled by
the Legal and Compliance Department (the “Potential Conflicts List”). The
Potential Conflicts List generally includes:
+Publicly-traded
clients of AB;
+Publicly-traded
companies that distribute AB mutual funds;
+Bernstein
private clients who are directors, officers, or 10% shareholders of publicly
traded companies;
+Publicly-traded
companies that are sell-side clients of our affiliated broker-dealer,
SCB&Co.;
+Companies
where an employee of AB or Equitable Holdings, Inc., the parent company of AB,
has identified an interest;
+Publicly-traded
affiliated companies;
+Clients
who sponsor, publicly support or have material interest in a proposal upon which
we will be eligible to vote;
+Publicly-traded
companies targeted by the AFL-CIO for engagement and voting; and
+Any
other company subject to a material conflict of which a Committee member becomes
aware5.
We
determine our votes for all meetings of companies that may present a conflict by
applying the processes described in Section 4.5 below. We document all instances
when the Conflicts Officer determines our vote.
4
From time to time a client may request that we vote their proxies consistent
with AFL-CIO guidelines or the policy of the National Association of Pension
Funds. In those situations, AB reserves the right to depart from those policies
if we believe it to be in the client’s best interests.
5
The Committee must notify the Legal and Compliance Department promptly of any
previously unknown conflict.
4.5DETERMINE
EXISTENCE OF CONFLICT OF INTEREST
When
we encounter a potential conflict of interest, we review our proposed vote using
the following analysis to ensure our voting decision is in the best interest of
our clients:
+If
our proposed vote is explicitly addressed by and consistent with the Policy, no
further review is necessary.
+If
our proposed vote is contrary to the Policy (i.e., requires a case-by-case
assessment or is not covered by the Policy), the vote will be presented to the
Conflicts Officer. The Conflicts Officer’s review will be documented using a
Proxy Voting Conflict of Interest Form (a copy of which is attached hereto). The
Conflicts Officer will determine whether the proposed vote is reasonable. If the
Conflicts Officer cannot determine that the proposed vote is reasonable, the
Conflicts Officer may instruct AB to refer the votes back to the client(s) or
take other actions as the Conflicts Officer deems appropriate in light of the
facts and circumstances of the particular potential conflict. The Conflicts
Officer may take or recommend that AB take the following steps:
+Recuse
or “wall-off” certain personnel from the proxy voting process;
+Confirm
whether AB’s proposed vote is consistent with the voting recommendations of our
proxy research services vendor; or
+Take
other actions as the Conflicts Officer deems appropriate.
4.6REVIEW
OF THIRD-PARTY PROXY SERVICE VENDORS
AB
engages one or more Proxy Service Vendors to provide voting recommendations and
voting execution services. From time to time, AB will evaluate each Proxy
Service Vendor’s services to assess that they are consistent with this Policy
and the best interest of our clients. This evaluation may include: (i) a review
of pre-populated votes on the Proxy Service
Vendor’s
electronic voting platform before such votes are cast, and (ii) a review of
policies that address the consideration of additional information that becomes
available regarding a proposal before the vote is cast. AB will also
periodically review whether Proxy Service Vendors have the capacity and
competency to adequately analyze proxy issues and provide the necessary services
to AB. AB will consider, among other things, the adequacy and quality of the
Proxy Service Vendor’s staffing, personnel and/or technology, as well as whether
the Proxy Service Vendor has adequate disclosures regarding its methodologies in
formulating voting recommendations. If applicable, we will also review whether
any potential factual errors, incompleteness or methodological weaknesses
materially affected the Proxy Service Vendor’s services and the effectiveness of
the Proxy Service Vendor’s procedures for obtaining current and accurate
information relevant to matters included in its research.
The
Committee also takes reasonable steps to review the Proxy Service Vendor’s
policies and procedures addressing conflicts of interest and verify that the
Proxy Service Vendor(s) to which we have a full- level subscription is, in fact,
independent based on all of the relevant facts and circumstances. This includes
reviewing each Proxy Service Vendor’s conflict management procedures on an
annual basis. When reviewing these conflict management procedures, we will
consider, among other things, (i) whether the Proxy Service Vendor has adequate
policies and procedures to identify, disclose, and address actual and potential
conflicts of interest; and (ii) whether the Proxy Service Vendor provides
adequate disclosure of actual and potential conflicts of interest with respect
to the services provided to AB by the Proxy Service Vendor and (iii) whether the
Proxy Service Vendor’s policies and procedures utilize technology in delivering
conflicts disclosure; and (iv) can offer research in an impartial manner and in
the best interests of our clients.
4.7CONFIDENTIAL
VOTING
It
is AB’s policy to support confidentiality before the actual vote has been cast.
Employees are prohibited from revealing how we intend to vote except to (i)
members of the Committee; (ii) Portfolio Managers who hold the security in their
managed accounts; (iii) the Research Analyst(s) who cover(s) the security; (iv)
clients, upon request, for the securities held in their portfolios; (v) clients
who do not hold the security or for whom AB does not have proxy voting
authority, but who provide AB with a signed a Non-Disclosure Agreement; or (vi)
declare our stance on an ESG related shareholder proposal(s) that is (are)
deemed material for the issuer’s business for generating long-term value in our
clients’ best interests. Once the votes have been cast for our mutual fund
clients, they are made public in accordance with mutual fund proxy vote
disclosures required by the SEC, and we generally post all votes to our public
website one business day after the meeting date.
We
may participate in proxy surveys conducted by shareholder groups or consultants
so long as such participation does not compromise our confidential voting
policy. Specifically, prior to our required SEC disclosures each year, we may
respond to surveys asking about our proxy voting policies, but not any specific
votes. After our mutual fund proxy vote disclosures required by the SEC each
year have been made public and/or votes have been posted to our public website,
we may respond to surveys that cover specific votes in addition to our voting
policies.
On
occasion, clients for whom we do not have proxy voting authority may ask us how
AB’s Policy would be implemented. A member of the Committee or one or more
members of Responsibility team may provide the results of a potential
implementation of the AB policy to the client’s account subject to an
understanding with the client that the implementation shall remain
confidential.
Any
substantive contact regarding proxy issues from the issuer, the issuer’s agent
or a shareholder group sponsoring a proposal must be reported to the Committee
if such contact was material to a decision to vote contrary to this
Policy.
Routine
administrative inquiries from proxy solicitors need not be
reported.
4.8A
NOTE REGARDING AB'S STRUCTURE
AB
and AllianceBernstein Holding L.P. (“AB Holding”) are Delaware limited
partnerships. As limited partnerships, neither company is required to produce an
annual proxy statement or hold an annual shareholder meeting. In addition, the
general partner of AB and AB Holding, AllianceBernstein Corporation is an
indirect wholly owned subsidiary of Equitable Holdings, Inc.
As
a result, most of the positions we express in this Proxy Voting Policy are
inapplicable to our business. For example, although units in AB Holding are
publicly traded on the New York Stock Exchange (“NYSE”), the NYSE Listed Company
Manual exempts limited partnerships and controlled companies from compliance
with various listing requirements, including the requirement that our board have
a majority of independent directors.
5.VOTING
TRANSPARENCY
We
publish our voting records on our website (http://vds.issproxy.com/SearchPage.php?CustomerID=447)
one business day after the shareholder meeting date for each issuer company.
Many clients have requested that we provide them with periodic reports on how we
voted their proxies. Clients may obtain information about how we voted proxies
on their behalf by contacting their Advisor.
6.RECORDKEEPING
All
of the records referenced below will be kept in an easily accessible place for
at least the length of time required by local regulation and custom, and, if
such local regulation requires that records are kept for less than six (6) years
from the end of the fiscal year during which the last entry was made on such
record, we will follow the US rule of six (6) or more years. If the local
regulation requires that records are kept for more than six (6) or more years,
we will comply with the local regulation. We maintain the vast majority of these
records electronically.
6.1PROXY
VOTING AND GOVERNANCE POLICY
The
Policy shall be maintained in the Legal and Compliance Department and posted on
our company intranet and on the AB website: (https://www.alliancebernstein.com/content/dam/corporate/corporate-pdfs/AB-Proxy-Voting-and-Governance-Policy.pdf).
6.2PROXY
STATEMENTS RECEIVED REGARDING CLIENT SECURITIES
For
US Securities6,
AB relies on the SEC to maintain copies of each proxy statement we receive
regarding client securities. For Non-US Securities, we rely on ISS, our proxy
voting agent, to retain such proxy statements.
6.3RECORDS
OF VOTES CAST ON BEHALF OF CLIENTS
Records
of votes cast by AB are retained electronically by our proxy research service
vendor.
6.4PRE-DISCLOSURE
OF VOTE INTENTIONS ON SELECT PROPOSALS
As
part of our engagement and stewardship efforts, AB publishes our vote intentions
on certain proposals in advance of select shareholder meetings, with an emphasis
on issuers where our discretionary managed accounts have significant economic
exposure. The selected proposals are chosen because they impact a range of key
topics where AB may have expressed our viewpoints publicly, through prior
engagement or proxy voting. We do not pre-disclose our vote intentions on
mergers and acquisition activity. The published vote intentions are available on
our RI webpage (https://www.alliancebernstein.com/corporate/en/corporate-responsibility/data-disclosures/predisclosed-vote-intention.html).
6.5RECORDS
OF CLIENTS REQUESTS FOR PROXY VOTING INFORMATION
Copies
of written requests from clients for information on how AB voted their proxies
shall be maintained by the Legal and Compliance Department. Responses to written
and oral requests for information on how we voted clients’ proxies will be kept
in the Client Group.
6
US securities are defined as securities of issuers required to make reports
pursuant to §12 of the Securities Exchange Act of 1934, as amended. Non-US
securities are defined as all other securities.
6.6DOCUMENTS
PREPARED BY AB THAT ARE MATERIAL TO VOTING DECISIONS
The
Committee is responsible for maintaining documents prepared by the Committee or
any AB employee that were material to a voting decision. Therefore, where an
investment professional’s opinion is essential to the voting decision, the
recommendation from investment professionals must be made in writing to a member
of Responsibility team.
7.PROXY
VOTING PROCEDURES
7.1VOTE
ADMINISTRATION
In
an effort to increase the efficiency of voting proxies, AB currently uses ISS to
submit votes electronically for our clients’ holdings globally.
Issuers
initially send proxy information to the custodians of our client accounts. We
instruct these custodian banks to direct proxy related materials to ISS’s
offices. ISS provides us with research related to each resolution and
pre-populates certain ballots based on the guidelines contained in this Policy.
Members of Responsibility team assess the proposals via ISS’s web platform,
ProxyExchange, and submit all votes electronically. ISS then returns the proxy
ballot forms to the designated returnee for tabulation. In addition, AB’s proxy
votes are double-checked in a two-tiered approach. Votes for significant
holdings, as defined by our stake, are reviewed real-time by an offshore team to
verify that the executed votes are in-line with our Policy. Votes outside of the
significant holdings universe are sampled and reviewed on a monthly basis by the
members of Responsibility team to ensure their compliance with our
Policy.
If
necessary, any paper ballots we receive will be voted online using ProxyVote or
via mail or fax.
7.2SHARE
BLOCKING AND ABSTAINING FROM VOTING CLIENT SECURITIES
Proxy
voting in certain countries requires “share blocking.” Shareholders wishing to
vote their proxies must deposit their shares shortly before the date of the
meeting (usually one week) with a designated depositary. During this blocking
period, shares that will be voted at the meeting cannot be sold until the
meeting has taken place and the shares are returned to the clients’ custodian
banks. We may determine that the value of exercising the vote is outweighed by
the detriment of not being able to sell the shares during this period. In cases
where we want to retain the ability to trade shares, we may determine to not
vote those shares.
We
seek to vote all proxies for securities held in client accounts for which we
have proxy voting authority. However, in some markets administrative issues
beyond our control may sometimes prevent us from voting such proxies. For
example, we may receive meeting notices after the cut-off date for voting or
without enough time to fully consider the proxy. Similarly, proxy materials for
some issuers may not contain disclosure sufficient to arrive at a voting
decision, in which cases we may abstain from voting. Some markets outside the US
require periodic renewals of powers of attorney that local agents must have from
our clients prior to implementing our voting instructions.
AB
will abstain from voting (which generally requires submission of a proxy voting
card) or affirmatively decide not to vote if AB determines that abstaining or
not voting would be in the applicable client's best interest. In making such a
determination, AB will consider various factors, including, but not limited to:
(i) the costs associated with exercising the proxy (e.g., translation or travel
costs); (ii) any legal restrictions on trading resulting from the exercise of a
proxy (e.g., share-blocking jurisdictions); (iii) whether AB’s clients have sold
the underlying securities since the record date for the proxy; and (iv) whether
casting a vote would not reasonably be expected to have a material effect on the
value of the client’s investment.
7.3LOANED
SECURITIES
Many
of our clients have entered into securities lending arrangements with agent
lenders to generate additional revenue. We will not be able to vote securities
that are on loan under these types of arrangements. However, for AB managed
funds, the agent lenders have standing instructions to recall all securities on
loan systematically in a timely manner on a best effort basis in order for AB to
vote the proxies on those previously loaned shares.
If
you have questions or desire additional information about this Policy, please
contact [email protected].
PROXY
VOTING GUIDELINE SUMMARY
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Board
and Director Proposals |
| Board
Diversity |
|
| + |
+ |
Establish
New Board Committees and Elect Board Members with Specific
Expertise |
|
| + |
| Changes
in Board Structure and Amending the Articles of Incorporation |
+ |
| |
| Classified
Boards |
| + |
|
| Director
Liability and Indemnification |
|
| + |
+ |
Disclose
CEO Succession Plan |
+ |
| |
| Election
of Directors |
+ |
| |
| Controlled
Company Exemption |
|
| + |
| Voting
for Director Nominees in a Contested Election |
|
| + |
+ |
Independent
Lead Director |
+ |
| |
+ |
Limit
Term of Directorship |
|
| + |
+ |
Majority
of Independent Directors |
+ |
| |
+ |
Majority
of Independent Directors on Key Committees |
+ |
| |
+ |
Majority
Votes for Directors |
+ |
| |
+ |
Removal
of Directors Without Cause |
+ |
| |
+ |
Require
Independent Board Chairman |
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| + |
+ |
Require
Two Candidates for Each Board Seat |
| + |
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| Cross-Shareholding
(Japan) |
| + |
|
Compensation
Proposals |
+ |
Elimination
of Single Trigger Change-in-Control Agreements |
+ |
| |
+ |
Pro
Rata Vesting of Equity Compensation Awards-Change of Control |
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| + |
+ |
Adopt
Policies to Prohibit any Death Benefits to Senior Executives |
| + |
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+ |
Advisory
Vote to Ratify Directors’ Compensation |
+ |
| |
+ |
Amend
Executive Compensation Plan Tied to Performance (Bonus Banking) |
| + |
|
| Approve
Remuneration for Directors and Auditors |
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| + |
| Approve
Remuneration Reports |
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| + |
| Approve
Retirement Bonuses for Directors (Japan and South Korea) |
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| + |
| Approve
Special Payments to Continuing Directors and Auditors (Japan) |
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| + |
+ |
Disclose
Executive and Director Pay |
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| + |
+ |
Exclude
Pension Income from Performance-Based Compensation |
+ |
| |
| Executive
and Employee Compensation Plans |
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| + |
+ |
Limit
Dividend Payments to Executives |
| + |
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+ |
Limit
Executive Pay |
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| + |
+ |
Mandatory
Holding Periods |
| + |
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+ |
Performance-Based
Stock Option Plans |
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| + |
+ |
Prohibit
Relocation Benefits to Senior Executives |
| + |
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+ |
Recovery
of Performance-Based Compensation |
+ |
| |
+ |
Submit
Golden Parachutes/Severance Plans to a Shareholder Vote |
| + |
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+ |
Submit
Golden Parachutes/Severance Plans to a Shareholder Vote prior to their
being Negotiated by Management |
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| + |
+ |
Submit
Survivor Benefit Compensation Plans to a Shareholder Vote |
+ |
| |
Capital
Changes and Anti-Take Over Proposals |
+ |
Amend
Exclusive Forum Bylaw |
| + |
|
| Amend
Net Operating Loss (“NOL”) Rights Plans |
+ |
| |
| Authorize
Share Repurchase |
+ |
| |
| Blank
Check Preferred Stock |
| + |
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| Corporate
Restructurings, Merger Proposals and Spin-Offs |
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| + |
| Elimination
of Preemptive Rights |
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| + |
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+ |
Expensing
Stock Options |
+ |
| |
| Fair
Price Provisions |
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| + |
| Increase
Authorized Common Stock |
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| + |
| Issuance
of Equity without Preemptive Rights |
+ |
| |
| Issuance
of Stock with Unequal Voting Rights |
|
| + |
| Net
Long Position Requirement |
+ |
| |
| Reincorporation |
|
| + |
+ |
Reincorporation
to Another jurisdiction to Permit Majority Voting or Other Changes in
Corporate Governance |
|
| + |
| Stock
Splits |
+ |
| |
+ |
Submit
Company’s Shareholder Rights Plan to a Shareholder Vote |
+ |
| |
| Transferrable
Stock Options |
|
| + |
Auditor
Proposals |
| Appointment
of Auditors |
+ |
| |
| Approval
of Financial Statements |
+ |
| |
| Approval
of Internal Statutory Auditors |
+ |
| |
+ |
Limit
Compensation Consultant Services |
| + |
|
| Limitation
of Liability of External Statutory Auditors (Japan) |
|
| + |
+ |
Separating
Auditors and Consultants |
|
| + |
Shareholder
Access & Voting Proposals |
+ |
A
Shareholder’s Right to Call Special Meetings |
+ |
| |
+ |
Adopt
Cumulative Voting |
|
| + |
+ |
Adopt
Cumulative Voting in Dual Shareholder Class Structures |
+ |
| |
+ |
Early
Disclosure of Voting Results |
| + |
|
+ |
Implement
Confidential Voting |
+ |
| |
| Limiting
a Shareholder’s Right to Call Special Meetings |
| + |
|
+ |
Permit
a Shareholder’s Right to Act by Written Consent |
|
| + |
+ |
Proxy
Access for Annual Meetings |
+ |
| |
| Reduce
Meeting Notification from 21 Days to 14 Days (UK) |
+ |
| |
+ |
Rotation
of Locale for Annual Meeting |
| + |
|
+ |
Shareholder
Proponent Engagement Process |
+ |
| |
| Supermajority
Vote Requirements |
| + |
|
Environmental
& Social, Disclosure Proposals |
+ |
Animal
Welfare |
|
| + |
+ |
Climate
Change |
|
| + |
+ |
Say
on Climate |
|
| + |
+ |
Charitable
Contributions |
|
| + |
+ |
Environmental
Proposals |
|
| + |
+ |
Genetically
Altered or Engineered Food and Pesticides |
|
| + |
+ |
Health
Proposals |
|
| + |
+ |
Pharmaceutical
Pricing (US) |
|
| + |
+ |
Human
Rights Policies and Reports |
|
| + |
+ |
Include
Sustainability as a Performance Measure (SHP) |
|
| + |
+ |
Lobbying
and Political Spending |
+ |
| |
+ |
Other
Business |
| + |
|
+ |
Reimbursement
of Shareholder Expenses |
| + |
|
+ |
Sustainability
Report |
|
| + |
+ |
Workplace:
Diversity |
+ |
| |
+ |
Workplace:
Pay Disparity |
|
| + |
PROXY
VOTING CONFLICT OF INTEREST FORM
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Name
of Security |
| Date
of Shareholder Meeting |
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Short
Description of the conflict (client, mutual fund distributor,
etc.): |
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1. |
Is
our proposed vote on all issues explicitly addressed by, and consistent
with our stated proxy voting policy? |
☐
Yes |
☐
No |
| If
yes, stop here and sign below as no further review is necessary. |
| |
2. |
Is
our proposed vote on consistent with our client's recommended vote
? |
☐
Yes |
☐
No |
| Leave
blank if not applicable; if yes, continue to question 3; if no, provide a
memo reflecting the guidelines provided below. |
| |
3. |
Is
our proposed vote consistent with the views of Institutional Shareholder
Services? |
☐
Yes |
☐
No |
| Leave
blank if not applicable. |
| |
Please
attach a memo containing the following information and documentation supporting
the proxy voting decision:
ª A
list of the issue(s) where our proposed vote is contrary to our stated
Policy
(director election, cumulative voting, compensation)
ª A
description of any substantive contact with any interested outside party and a
proxy voting and governance committee or an AB investment professional that was
material to our voting decision. Please include date, attendees, titles,
organization they represent and topics discussed. If there was no such contact,
please note as such.
ª If
the Independent Compliance Officer has NOT determined that the proposed vote is
reasonable, please explain and indicate what action has been, or will be
taken.
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AB
Conflicts Officer Approval (if necessary. Email approval is
acceptable.): |
| Prepared
by: |
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I
hereby confirm that the proxy voting decision referenced on this form is
reasonable. |
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| Print
Name: |
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AB
Conflicts Officer |
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| Date: |
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Date: |
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| |
Please
return this completed form and all supporting documentation to the Conflicts
Officer in the Legal and Compliance Department and keep a copy for your
records.
BARROW
HANLEY
Global
Investors®
Proxy
Voting Policy
Proxy
Voting Policy & Guidelines
Barrow
Hanley has accepted authority to vote proxies for our clients who have delegated
this responsibility to us. It is the Firm’s Policy to vote our clients’ proxies
in the best economic interests of our clients, the beneficial owners of the
shares. The Firm has adopted this Proxy Voting Policy and procedures for
handling research, voting, reporting, and disclosing proxy votes, and this set
of Guidelines (“Guidelines”) that provide a framework for assessing proxy
proposals.
Barrow
Hanley votes all clients’ proxies the same based on the Firm’s Policy and
Guidelines. If or when additional costs for voting proxies are identified, the
Firm will determine whether such costs exceed the expected economic benefit of
voting the proxy and may abstain from voting proxies for ERISA Plan clients.
However, if/when such voting costs are borne by Barrow Hanley and not by the
client, all proxies will be voted for all clients.
Disclosure
information about the Firm’s Proxy Voting Policy & Guidelines is provided in
the Firm’s Form ADV Part 2.
To
assist in the proxy voting process, at its own expense, Barrow Hanley retains
Glass Lewis & Co. (“Glass Lewis”) as proxy service provider. Glass Lewis
provides:
•Research
on corporate governance, financial statements, business, legal and accounting
risks,
•Proxy
voting recommendations, including environmental, social, and governance (“ESG”)
voting Guidelines,
•Portfolio
accounting and reconciliation of shareholdings for voting purposes,
•Proxy
voting execution, record keeping, and reporting services.
Proxy
Oversight Committee, Proxy Coordinators, and Proxy Voting Committee
•Barrow
Hanley’s Proxy Oversight Committee is responsible for implementing and
monitoring this proxy voting Policy, procedures, disclosures, and recordkeeping.
•The
Proxy Oversight Committee conducts periodic reviews of proxy votes to ensure
that the Policy is observed, implemented properly, and amended or updated, as
appropriate.
•The
Proxy Oversight Committee is comprised of the CCO, the Responsible Investing
Committee Lead, the Head of Investment Operations, the ESG Research Coordinator,
and an At-Large Portfolio Manager.
•Proxy
Coordinators are responsible for organizing and reviewing the data and
recommendations of Glass Lewis.
•Proxy
Coordinators are responsible for ensuring that the proxy ballots are routed to
the appropriate research analyst based on industry sector coverage.
•Research
Analysts are responsible for review and evaluate proposals and make
recommendations to the Proxy Voting Committee to ensure that votes are
consistent with the Firm’s analysis.
•Equity
Portfolio Managers are members of the Proxy Voting Committee.
•Equity
Portfolio Managers vote proposals based on our Guidelines, internal research
recommendations, and the research from Glass Lewis. Proxy votes must be approved
by the Proxy Voting Committee before submitting to Glass Lewis.
BARROW
HANLEY GLOBAL INVESTORS
2200
Ross Avenue, 31st
Floor | Dallas, TX 75201 | (214) 665-1900
DALLAS
| HONG KONG | LONDON | SINGAPORE | SYDNEY
Revised
December 31, 2022 1
BARROW
HANLEY
Global
Investors®
•Proxies
for the Diversified Small Cap Value accounts are voted in accordance with the
Glass Lewis’ recommendations for the following reasons:
oInvestment
selection is based on a quantitative model,
oThe
holding period is too short to justify the time for analysis necessary to
vote.
Conflicts
of Interest
Potential
conflicts may arise when:
•Clients
elect to participate in securities lending arrangements; in such cases, the
votes follow the shares. Barrow Hanley is not a party to the client’s lending
arrangement and typically does not have information about shares on loan. Under
these circumstances the proxies for those shares may not be voted.
•If/when
a proxy voting issue is determined to be financially material, the Firm makes a
best-efforts attempt to alert clients and their custodial bank to recall shares
from loan to be voted. In this context, Barrow Hanley defines a financially
material issue to be issues deemed by our investment team to have significant
economic impact. The ultimate decision on whether to recall shares is the
responsibility of the client.
•Barrow
Hanley invests in equity securities of corporations who are also clients of the
Firm. In such cases, the Firm seeks to mitigate potential conflicts
by:
oMaking
voting decisions for the benefit of the shareholder(s), our clients,
oUniformly
voting every proxy based on Barrow Hanley’s internal research and consideration
of Glass Lewis’ recommendations, and
oDocumenting
the votes of companies who are also clients of the Firm.
•If
a material conflict of interest exists, members from the Proxy Voting and
Oversight Committees will determine if the affected clients should have an
opportunity to vote their proxies themselves, or whether Barrow Hanley will
address the specific voting issue through other objective means, such as voting
the proxies in a manner consistent with a predetermined voting policy or
accepting the voting recommendation of Glass Lewis.
Other
Policies and Procedures
•A
proxy card or voting instruction form contains a list of voting options,
including For, Against, Abstain, and/or Withhold. A vote to Abstain or Withhold
is effectively a vote against the proposal. Barrow Hanley assesses each vote,
the intended impact of our vote, and the rule(s) that apply to the vote and may
select any of these options when casting the vote. Barrow Hanley sends a daily
electronic transfer of equity positions to Glass Lewis.
•Glass
Lewis identifies accounts eligible to vote for each security and posts the
proposals and research on its secure, proprietary online system.
•Barrow
Hanley sends a proxy report to clients at least annually and/or as requested by
client, listing the number of shares voted and disclosing how proxies were
voted.
•Barrow
Hanley retains voting records in accordance with the Firm’s Books and Records
Policy. Glass Lewis retains the Firm’s voting records for seven
years.
•Proxy
Coordinators are responsible for retaining the following proxy
records:
oThese
policies, procedures, and amendments;
oProxy
statements regarding our clients’ securities;
oA
record of each proxy voted;
oProxy
voting reports that are sent to clients annually;
oInternal
documents related to voting decisions; and
oRecords
of clients’ requests for proxy voting information and/or correspondence about
votes.
BARROW
HANLEY
Global
Investors®
Voting
Debt and/or Bank Loan Securities
Barrow
Hanley’s proxy voting responsibilities may include voting on proposals,
amendments, consents, or resolutions solicited by or in respect to securities
related to bank loan investments.
Exceptions
Limited
exceptions to this Policy may be permitted based on a client’s circumstances,
such as, foreign regulations that create a conflict with U.S. practices,
expenses to facilitate voting when the costs outweigh the benefit of voting the
proxies, or other circumstances.
Guidelines
Barrow
Hanley’s set of proxy voting Guidelines is a framework for assessing proposals.
Each proposal is evaluated based on its facts and circumstances. The Firm
reviews and considers ESG issues along with other financially material factors
to assess the financially material impact on the long-term value of the shares.
Our Guidelines address the following issues:
•Board
of Directors
•Independent
Auditors
•Compensation
Issues
•Corporate
Structure and Shareholder Rights
•Shareholder
Proposals and ESG Issues
•Voting
of Non-U.S./Foreign Shares
Issues
that do not conform to these Guidelines are evaluated by the Proxy Voting
Committee and voted in the best interest of our clients.
Board
of Directors
Election
of Directors
Barrow
Hanley believes that good corporate governance begins with a board of
majority-independent directors and committees, including independent directors
who serve on Audit, Compensation, and Nominating committees.
Barrow
Hanley will generally approve:
•A
slate of nominees comprised of a two-thirds majority of independent
directors.
•Nominees
for Audit, Compensation and/or Nominating committees who are independent of
management.
•Nominees
who we believe have the required skills and diverse backgrounds to make informed
judgments about the subject matter for which the committee is responsible.
•We
attempt to target board diversity of at least 30%.
Barrow
Hanley will generally not approve:
•A
slate of nominees that results in a majority non-independent
directors.
•Nominees
for Audit, Compensation and/or Nominating committees who are not independent of
management.
BARROW
HANLEY
Global
Investors®
•Incumbent
board members who failed to attend at least 75% of board and applicable
committee meetings.
•Nominees
who have served on boards or as executives of companies with records of poor
performance, inadequate risk oversight, excessive compensation, audit, or
accounting-related problems and/or other indicators of mismanagement or actions
against the interests of shareholders.
•Nominees
whose actions on other committees demonstrate serious failures of governance,
which may include acting to significantly reduce shareholder rights, or failure
to respond to previous vote requests for directors and shareholder
proposals.
•An
independent director who has in the past three years, had a material financial,
familial, or other relationship with the company or its executives.
•Members
of a Nominating committee where the board has an average tenure of over ten
years and has not appointed a new member to the board in at least five
years
•Members
of a Nominating committee where the board lacks diversity.
Combined
Chairman / CEO Role
When
the roles of a board’s chair and CEO are combined a strong lead independent
director is necessary. If a lead director is not appointed, Barrow Hanley
supports proposals to separate the roles.
Contested
Elections of Directors
Barrow
Hanley evaluates a nominee’s qualifications, the incumbent board’s performance,
and the rationale behind dissident campaigns, and votes based on maximizing
shareholder value.
Classified
Boards
Barrow
Hanley supports proposals to declassify existing boards, whether proposed by
management or shareholders. In most cases we vote against proposals for
classified board structures where only part of the board is elected each
year.
If
a board does not have a committee responsible for governance oversight and the
board has not implement a proposal that received the requisite support, we vote
against the entire board. If a proposal requests the board adopt a declassified
structure, we vote against all directors and nominees up for
election.
Board
Diversity
Barrow
Hanley supports boards with diverse backgrounds and nominees with relevant
experience. Nominating and governance committees should consider diversity
within the context of the company and industry. Shareholders are best served
when boards make an effort to ensure a constituency that is not only reasonably
diverse based on age, race, gender, and ethnicity, but also based on geographic
knowledge, industry experience, board tenure and culture. Board diversity is one
of many factors considered on a case-by-case basis when reviewing board
elections.
Board
Tenure
Barrow
Hanley believes that independent directors are an important part of good
governance. Long term service diminishes a member’s independence. Directors
serving on a board for 10 years or more are not considered to be
independent.
We
recognize that in some cases, a director’s tenure and experience on the board is
beneficial to shareholders. Nominees’ tenure on the board is evaluated to
determine independence.
BARROW
HANLEY
Global
Investors®
Overboarding
Barrow
Hanley reviews a nominee’s board commitments on a case-by-case basis and
generally votes against nominees who are executives of public company while
serving on two or more public boards or a non-executive who sits on four or more
public boards.
Proxy
Access
Shareholders’
participation in electing directors enhances a board’s accountability and
responsiveness. Long-term investors can benefit from shareholder rights to
nominate directors. Such rights should require a minimum percentage ownership
(at least 5%) of outstanding shares held for a minimum period (at least three
years) to nominate a maximum percentage of (up to 20%) for the board.
Approval
of Independent Auditors
Independent
auditors are a critical element of good governance. A company’s relationship
with its independent auditor should be limited to its audit. Barrow Hanley votes
against auditor ratification proposals when the auditor has changed for 15 or
more years. Auditor’s fees should be limited to the audit work. Other, closely
related activities that do not appear to impair the auditor’s independence may
be approved. Barrow Hanley evaluates the circumstances of auditors who have a
substantial non-auditing relationship with the company on a case-by-case
basis.
Compensation
Issues
Compensation
Plans should align the interests of long-term shareholders with the interests of
management, employees, and directors.
Stock-Based
Compensation Plans
Stock-based
compensation plans should be administered by an independent committee of the
board and approved by shareholders. Barrow Hanley opposes compensation plans
that substantially dilute a shareholder’s ownership interest, provides
participants with excessive awards, and/or have other objectionable features.
Compensation proposals are evaluated on a case-by-case basis using the following
factors:
•The
company’s industry group, market capitalization, and competitors’ compensation
plans.
•Requirements
for senior executives to hold a minimum amount/percentage of company stock.
•Requirements
for minimum holding periods for stock acquired through equity
awards.
•Performance-vesting
awards, indexed options, and/or other grants linked to the company’s
performance.
•Requirements
that limit the concentration of equity grants to senior executives and provide
for a broad-based plan.
•Requirements
for stock-based compensation plans as a substitute for cash compensation to
deliver market-competitive total compensation.
Bonus
Plans
Bonus
based compensation plans should include the following features:
•Periodic
shareholder approval to properly qualify for deductions under Internal Revenue
Code Section 162(m).
•Performance
measures relating to key value drivers of the company’s business.
BARROW
HANLEY
Global
Investors®
•Maximum
award amounts expressed in dollar amounts.
Bonus
plans should not include excessive awards in both absolute and relative
terms.
Executive
Compensation Plans (Say on Pay)
Say
on Pay type of executive compensation programs can effectively link pay and
performance and provide competitive compensation opportunities. Say on Pay type
plans should state the amount of compensation at risk and the amount of
equity-based compensation linked to the company’s performance and include
adequate disclosure about the overall compensation structure. Say on Pay type
plans should not include significant compensation guarantees and/or compensation
that is not sufficiently linked to performance.
Recoupment
Provisions (Clawbacks)
Executive
compensation programs should be clearly tied to performance and include the
following:
•Detailed
bonus recoupment policies to prevent executives from retaining performance-based
awards that were not truly earned.
•Clawback
triggers in the event of a restatement of financial results or similar revision
of performance indicators upon which bonuses were based.
•Policies
allowing board reviews of performance-related bonuses and awards paid to senior
executives during the period covered by a restatement that allows the company to
recoup such bonuses if performance goals were not actually achieved.
•Clawback
policies that limit discretion and ensure the integrity of such
policies.
Executive
Severance Agreement (Golden Parachutes)
Executive
compensation should be designed as an incentive for continued employment and
include reasonable severance benefits, and the executive’s termination should be
limited to three times salary and bonus, referred to as double-trigger
plans.
Guaranteed
severance benefits that exceed three times salary and bonus should be disclosed
and should require shareholder approval.
Barrow
Hanley does not support guaranteed severance benefits without a change in
control or arrangements that does not require the executive’s termination,
referred to as single-trigger
plans.
Employee
Stock Purchase Plans
Employee
stock purchase plans are effective ways to increase employees’ ownership in the
company’s stock. Such plans should not allow for purchases below 85% of current
market value and should limit shares reserved under the plan to 5% or less of
the outstanding shares of the company.
Corporate
Structure and Shareholder Rights
Barrow
Hanley supports market-based corporate control functions without undue
interference from artificial barriers. Shareholders’ rights are a fundamental
privilege of equity ownership and should be proportional to economic ownership.
Appropriate limits include a shareholder’s ability to act by corporate charter,
bylaw provisions, or adoption of certain takeover provisions.
BARROW
HANLEY
Global
Investors®
Shareholder
Right Plans (Poison Pills)
Poison
pill plans can erode shareholder value by limiting a potential acquirer’s
ability to purchase a controlling interest in the company without the approval
of its board of directors, and/or can serve to entrench incumbent management and
directors.
Shareholder
rights plans should be designed to enables the board to take appropriate to
defensive actions, and should require the following:
•Shareholder
approval within a year of its adoption.
•Timing
limited to 3-5 years.
•Requirement
for shareholder approval for renewal.
•Reviews
by a committee of independent directors at least every three years, referred to
as TIDE
provisions.
•Permitted
bid or qualified offer features requiring shareholder votes under specific
conditions referred to as chewable
pills.
•Reasonable
ownership triggers of 15-20%.
•Highly
independent, non-classified boards.
Shareholder
rights plans should avoid the following:
•Long-term
defensive features of 5 or more years.
•Automatic
renewals without shareholder approval.
•Ownership
triggers of less than 15%.
•Classified
boards.
•Boards
with limited independence.
Political
Contributions and Lobbying
Barrow
Hanley evaluates an issuer’s policy and procedures governing political spending
and lobbying. Proposals demonstrating insufficient or absent policies and
disclosure are opposed.
An
Increase in Authorized Shares
Proposals
for increases in authorized share amounts should not expose shareholders to
excessive dilution and should be limited to increases of up to 20% of the
current share authorization.
Cumulative
Voting
Cumulative
voting should be proportional to the shareholders’ economic investment in the
company.
Supermajority
Vote Requirements
Shareholders’
rights to approve or reject proposals should be based on a simple majority.
Confidential
Voting
Shareholder
voting should be conducted in a confidential manner.
Dual
Classes of Stock
Barrow
Hanley opposes dual-class capitalization structures that provide disparate
voting rights to shareholders with similar economic interests. Proposals to
create separate share classes with different voting rights are opposed.
Proposals to dissolve separate share classes are approved.
BARROW
HANLEY
Global
Investors®
Shareholder
Proposals and ESG Issues
Proposals
relating to ESG issues are usually initiated by shareholders seeking disclosure
about certain business practices or amendments to certain policies. Barrow
Hanley’s Policy and Guidelines are designed to provide a framework for assessing
the financial materiality of corporate governance, environmental, and social
issues. Barrow Hanley supports proposals that improve transparency on issues
that can be clearly tied to sustainable resource development, environmental
compliance, and workplace safety.
Barrow
Hanley subscribes to third party ESG research and scoring databases, including
MSCI, Sustainalytics, and IFRS as a tool for rating the financial materiality of
ESG factors to support our internal research. Some investments may have a low
corporate ranking based on a third party’s profile. Investment in low ranked
companies is based on our belief that shareholder engagement is the best way to
engage with management and use our influence toward sustainable improvements.
Our fundamental analysis identifies areas and issues for engagement with
management to improve policies and disclosure.
Barrow
Hanley evaluates climate risk and disclosure standards for the companies and
industries most exposed to climate change and engages with management and boards
to understand the company’s risks and opportunities and where necessary, seeks
additional disclosure.
Barrow
Hanley considers issues related to human capital to be a company’s most
significant risks and opportunities. Boards should disclose and communicate
plans to instill inclusive, attractive, and high-retention environments in the
company. Barrow Hanley supports inclusive working environments and diversity
among employees and supports shareholder proposals that contain comprehensive
equal opportunity and anti-discrimination provisions, and reporting on
gender-based discrepancies in compensation.
Voting
of Non-U.S./Foreign Shares
Although
corporate governance standards, disclosure requirements, and voting mechanisms
vary greatly among the markets outside the U.S., proposals are evaluated under
these Guidelines and consideration of the local market’s standards and best
practices.
Exceptions
Reasonable
and limited exceptions to these Guidelines are permitted based on the facts,
circumstances, and best economic interests of our clients. Exceptions are
documented and retained in the Firm’s proxy voting records.
BlackRock
Investment Stewardship
Global
Principles
Effective
as of January 2024
BlackRock
Investment Stewardship Global
Principles | 1
|
|
|
|
| |
Contents |
|
|
|
Introduction
to BlackRock |
3 |
|
Philosophy
on investment stewardship |
3 |
|
Shareholder
rights |
3 |
|
Key
themes |
5 |
|
Boards
and directors |
6 |
|
Auditors
and audit-realted issues |
8 |
|
Capital
structure, mergers, asset sales and other special transactions |
9 |
|
Executive
compensation |
10 |
|
Material
sustainability-related risks and opportunities |
10 |
|
Other
corporate governance matters and shareholder protections |
13 |
|
Shareholder
proposals |
13 |
|
BlackRock’s
oversight of our investment stewardship activities |
14 |
|
Vote
execution |
15 |
|
Voting
Choice |
15 |
|
Conflicts
management policies and procedures |
16 |
|
Securities
Lending |
17 |
|
Voting
guidelines |
18 |
|
Reporting
and vote transparency |
18 |
|
The
purpose of this document is to provide an overarching explanation of BlackRock’s
approach globally to our responsibilities as a shareholder on behalf of our
clients, our expectations of companies, and our commitments to clients in terms
of our own governance and transparency.
BlackRock
Investment Stewardship Global
Principles | 2
Introduction
to BlackRock
BlackRock’s
purpose is to help more and more people experience financial well-being. We
manage assets on behalf of institutional and individual clients, across a full
spectrum of investment strategies, asset classes, and regions. Our client base
includes pension plans, endowments, foundations, charities, official
institutions, insurers, and other financial institutions, as well as individuals
around the world.
Philosophy
on investment stewardship
As
part of our fiduciary duty to our clients, we consider it one of our
responsibilities to promote sound corporate governance as an informed, engaged
shareholder on their behalf. At BlackRock, this is the responsibility of the
BlackRock Investment Stewardship (BIS) team.
In
our experience, sound governance is critical to the success of a company, the
protection of investors’ interests, and long-term financial value creation. We
take a constructive, long-term approach with companies and seek to understand
how they are managing the drivers of risk and financial value creation in their
business models. We have observed that well-managed companies will effectively
evaluate and address risks and opportunities relevant to their businesses, which
supports durable, long-term financial value creation. As one of many minority
shareholders, BlackRock cannot – and does not try to – direct a company’s
strategy or its implementation.
Shareholder
rights
We
believe that there are certain fundamental rights attached to shareholding.
Shareholders should have the right to:
•Elect,
remove, and nominate directors, approve the appointment of the auditor, and
amend the corporate charter or by-laws.
•Vote
on key board decisions that are material to the protection of their investment,
including but not limited to, changes to the purpose of the business, dilution
levels and pre-emptive rights, and the distribution of income and capital
structure.
•Access
sufficient and timely information on material governance, strategic, and
business matters to make informed decisions.
In
our view, shareholder voting rights should be proportionate to economic
ownership—the principle of “one share, one vote” helps to achieve this
balance.
Consistent
with these shareholder rights, BlackRock monitors and provides feedback to
companies in our role as stewards of our clients’ assets. Investment stewardship
is how we use our voice as an investor to promote sound corporate governance and
business practices that support the ability of companies to deliver long-term
financial performance for our clients. We do this through engagement with
companies, proxy voting on behalf of those clients who have given us
authority,
and
participating in market-level dialogue to improve corporate governance
standards.
Engagement
is an important mechanism for providing feedback on company practices and
disclosures, particularly where our observations indicate that they could be
enhanced to support a company’s ability to deliver financial performance.
Similarly, it provides us with an opportunity to hear directly from company
boards and management on how they believe their actions are aligned with the
long-term economic interests of shareholders. Engagement with companies may also
inform our proxy voting decisions.
BlackRock
Investment Stewardship Global
Principles | 3
As
a fiduciary, we vote in the long-term economic interests of our clients.
Generally, we support the recommendations of the board of directors and
management. However, there may be instances where we vote against the election
of directors or other management proposals, or support shareholder proposals.
For instance, we may vote against management recommendations where we are
concerned that the board may not be acting in the long-term economic interests
of shareholders, or disclosures do not provide sufficient information to assess
how material, strategic risks and opportunities are being managed. Our regional
proxy voting guidelines are informed by our market-specific approach and
standards of corporate governance best practices.
BlackRock
Investment Stewardship Global
Principles | 4
Key
themes
While
accepted standards and norms of corporate governance can differ between markets,
in our experience, there are certain globally-applicable fundamental elements of
governance that contribute to a company’s ability to create long-term financial
value for shareholders. These global themes are set out in this overarching set
of principles (the “Principles”), which are anchored in transparency and
accountability. At a minimum, it is our view that companies should observe the
accepted corporate governance standards in their domestic market and we ask
that, if they do not, they explain how their approach better supports durable,
long-term financial value creation.
These
Principles cover seven key subjects:
●Boards
and directors
●Auditors
and audit-related issues
●Capital
structure, mergers, asset sales, and other special transactions
●Executive
compensation
●Material
sustainability-related risks and opportunities
●Other
corporate governance matters and shareholder protections
●Shareholder
proposals
Our
regional and market-specific voting
guidelines
explain how these Principles inform our voting decisions in relation to common
ballot items for shareholder meetings in those markets. Alongside the Principles
and regional voting guidelines, BIS publishes our engagement
priorities
which reflect the five
themes
on which we most frequently engage companies, where they are relevant, as these
can be a source of material business risk or opportunity. Collectively, these
BIS policies set out the core elements of corporate governance that guide our
investment stewardship efforts globally and within each market, including when
engaging with companies and voting at shareholder meetings. The BIS policies are
applied on a case-by-case basis, taking into consideration the context within
which a company is operating.
BlackRock
Investment Stewardship Global
Principles | 5
Boards
and directors
We
believe that an effective and well-functioning board that has appropriate
governance structures to facilitate oversight of a company's management and
strategic initiatives is critical to the long-term financial success of a
company and the protection of shareholders’ economic interests. In our view, a
strong board can be a competitive advantage to a company, providing valuable
oversight of and perspectives to management on the most important decisions in
support of long-term financial performance. As part of their responsibilities,
board members have a fiduciary duty to shareholders to oversee the strategic
direction, operations, and risk management of a company. For this reason, BIS
sees engagement with and the election of directors as one of our most important
responsibilities. Disclosure of material risks that may affect a company’s
long-term strategy and financial value creation, including material
sustainability-related factors when relevant, is essential for shareholders to
appropriately understand and assess how effectively management is identifying,
managing, and mitigating such risks.
The
board should establish and maintain a framework of robust and effective
governance mechanisms to support its oversight of the company’s strategy and
operations consistent with the long-term economic interests of investors. There
should be clear descriptions of the role of the board and the committees of the
board and how directors engage with and oversee management. We look to the board
to articulate the effectiveness of these mechanisms in overseeing the management
of business risks and opportunities and the fulfillment of the company’s purpose
and strategy.
Where
a company has not adequately disclosed and demonstrated that its board has
fulfilled these corporate governance and risk oversight responsibilities, we
will consider voting against the election of directors who, on our assessment,
have particular responsibility for the issues. We assess director performance on
a case-by-case basis and in light of each company’s circumstances, taking into
consideration their governance, business practices that support durable,
long-term financial value creation, and performance. Set out below are ways in
which boards and directors can demonstrate a commitment to acting in the
long-term economic interests of all shareholders.
Regular
accountability through director elections
It
is our view that directors should stand for election on a regular basis, ideally
annually. In our experience, annual director elections allow shareholders to
reaffirm their support for board members and/or hold them accountable for their
decisions in a timely manner. When board members are not elected annually, in
our experience, it is good practice for boards to have a rotation policy to
ensure that, through a board cycle, all directors have had their appointment
re-confirmed, with a proportion of directors being put forward for election at
each annual general meeting.
Effective
board composition
Regular
director elections also give boards the opportunity to adjust their composition
in an orderly way to reflect developments in the company’s strategy and the
market environment. In our view, it is beneficial for new directors to be
brought onto the board periodically to refresh the group’s thinking, while
supporting both continuity and appropriate succession planning. We consider the
average overall tenure of the board, and seek a balance between the knowledge
and experience of longer-serving directors and the fresh perspectives of
directors who joined more recently. We encourage companies to regularly review
the effectiveness of their board (including its size), and assess directors
nominated for election in the context of the composition of the board as a
whole. In our view, the company’s assessment should consider a number of
factors, including each director’s independence and time commitments, as well as
the diversity and relevance of director experiences and skillsets, and how these
factors may contribute to the financial performance of the company.
BlackRock
Investment Stewardship Global
Principles | 6
Similarly,
there should be a sufficient number of independent directors, free from
conflicts of interest or undue influence from connected parties, to ensure
objectivity in the decision-making of the board and its ability to oversee
management. Common impediments to independence may include but are not limited
to:
●Current
or recent employment at the company or a subsidiary
●Being,
or representing, a shareholder with a substantial shareholding in the
company
●Interlocking
directorships
●Having
any other interest, business, or other relationship which could, or could
reasonably be perceived to, materially interfere with a director’s ability to
act in the best interests of the company and shareholders.
In
our experience, boards are most effective at overseeing and advising management
when there is a senior, independent board leader. This director may chair the
board, or, where the chair is also the CEO (or is otherwise not independent), be
designated as a lead independent director. The role of this director is to
enhance the effectiveness of the independent members of the board through
shaping the agenda, ensuring adequate information is provided to the board, and
encouraging independent director participation in board deliberations. The lead
independent director or another appropriate director should be available to meet
with shareholders in those situations where an independent director is best
placed to explain and contextualize a company’s approach.
There
are matters for which the board has responsibility that may involve a conflict
of interest for executives or for affiliated directors, or require additional
focus. It is our view that objective oversight of such matters is best achieved
when the board forms committees comprised entirely of independent directors. In
many markets, these committees of the board specialize in audit, director
nominations, and compensation matters. An ad hoc committee might also be formed
to decide on a special transaction, particularly one involving a related party,
or to investigate a significant adverse event.
When
nominating directors to the board, we look to companies to provide sufficient
information on the individual candidates so that shareholders can assess
the capabilities and suitability of each individual nominee and their
fit within overall board composition. These disclosures should give an
understanding of how the collective experience and expertise of the board, as
well as the particular skill-sets of individual directors, aligns with the
company’s long-term strategy and business model. Highly qualified, engaged
directors with professional characteristics relevant to a company’s business and
strategy enhance the ability of the board to add value and be the voice of
shareholders in board discussions.
It
is in this context that we are interested in diversity in the board room. We see
it as a means to promoting diversity of thought and avoiding “group think” when
the board advises and oversees management. This position is based on our view
that diversity of perspective and thought – in the board room, in the management
team, and throughout the company – leads to better long-term economic outcomes
for companies. Academic research has revealed correlations between specific
dimensions of diversity and effects on decision-making processes and
outcomes.1
In our experience, greater diversity in the board room can contribute to more
robust discussions and more innovative and resilient decisions. Over time,
greater diversity in the board room can also promote greater diversity and
resilience in the leadership team, and the workforce more broadly. That
diversity can enable companies to develop businesses that better address the
needs of the customers and communities they serve.
We
ask boards to disclose how diversity is considered in board composition,
including professional characteristics, such as a director’s industry
experience, specialist areas of expertise and geographic location; as well as
demographic characteristics such as gender, race/ethnicity, and age.
1
For
a discussion on the different impacts of diversity see: McKinsey Diversity Wins:
How Inclusion Matters,” May 2022;
Harvard
Business Review, “Diverse Teams Feel Less Comfortable – and That’s Why They
Perform Better,” September 2016; “Do Diverse Directors Influence DEI Outcomes,”
September 2022.
BlackRock
Investment Stewardship Global
Principles | 7
We
look to understand a board’s diversity in the context of a company’s domicile,
market capitalization, business model, and strategy. Increasingly, we see the
most effective boards nominating directors from diverse backgrounds which helps
ensure boards can more effectively understand the company's customers,
employees, and communities. We note that in many markets, policymakers have set
board gender diversity goals which we may discuss with companies, particularly
if there is a risk their board composition may be misaligned. Self-identified
board demographic diversity can usefully be disclosed in aggregate, consistent
with local law. We encourage boards to aspire to meaningful diversity of
membership, while recognizing that building a strong, diverse board can take
time.
Sufficient
capacity
As
the role and expectations of a director are increasingly demanding, directors
must be able to commit an appropriate amount of time to board and committee
matters. It is important that directors have the capacity to meet all of their
responsibilities - including when there are unforeseen events – and therefore,
they should not take on an excessive number of roles that would impair their
ability to fulfill their duties.
Auditors
and audit-related issues
BlackRock
recognizes the critical importance of financial statements, which should provide
a true and fair picture of a company’s financial condition. Accordingly, the
assumptions made by management and reviewed by the auditor in preparing the
financial statements should be reasonable and justified.
The
accuracy of financial statements, inclusive of financial and non-financial
information as required or permitted under market-specific accounting rules, is
of paramount importance to BlackRock. Investors increasingly recognize that a
broader range of risks and opportunities have the potential to materially impact
financial performance. Over time, we anticipate investors and other users of
company reporting will increasingly seek to understand and scrutinize the
assumptions underlying financial statements, particularly those that pertain to
the impact of the transition to a low-carbon economy on a company’s business
model and asset mix. We recognize that this is an area of evolving practice and
note that international standards setters, such asthe International Financial
Reporting Standards (IFRS) Board and the International Auditing and Assurance
Standards Board (IAASB), continue to develop their guidance to
companies.2
In
this context, audit committees, or equivalent, play a vital role in a company’s
financial reporting system by providing independent oversight of the accounts,
material financial and, where appropriate to the jurisdiction, non-financial
information and internal control frameworks. Moreover, in the absence of a
dedicated risk committee, these committees can provide oversight of Enterprise
Risk Management systems.3
In our view, effective audit committee oversight strengthens the quality and
reliability of a company’s financial statements and provides an important level
of reassurance to shareholders.
We
hold members of the audit committee or equivalent responsible for overseeing the
management of the audit function. Audit committees or equivalent should have
clearly articulated charters that set out their responsibilities and have a
rotation plan in place that allows for a periodic refreshment of the committee
membership to introduce fresh perspectives to audit oversight. We recognize that
audit committees will rely on management, internal audit, and the independent
auditor in fulfilling their responsibilities but look to committee members to
demonstrate they have relevant expertise to monitor and oversee the audit
process and related activities.
2
IFRS,
“IFRS S1 General Requirements for Disclosure of Sustainability-related Financial
Information”, June 2023, and IAASB, “IAASB Launches Public Consultation on
Landmark Proposed Global Sustainability Assurance Standard”, August 2023.
3Enterprise
risk management is a process, effected by the entity’s board of directors,
management, and other personnel, applied in strategy setting and across the
enterprise, designed to identify potential events that may affect the entity,
and manage risk to be within the risk appetite, to provide reasonable assurance
regarding the achievement of objectives. (Committee of Sponsoring Organizations
of the Treadway Commission (COSO), Enterprise Risk Management — Integrated
Framework, September 2004, New York, NY, updated in 2017. Please see:
https://www.coso.org/SitePages/Home.aspx).
BlackRock
Investment Stewardship Global
Principles | 8
We
take particular note of unexplained changes in reporting methodology, cases
involving significant financial restatements, or ad hoc notifications of
material financial weakness. In this respect, audit committees should provide
timely disclosure on the remediation of Key and Critical Audit Matters
identified either by the external auditor or internal audit
function.
The
integrity of financial statements depends on the auditor being free of any
impediments to being an effective check on management. To that end, it is
important that auditors are, and are seen to be, independent. Where an audit
firm provides services to the company in addition to the audit, the fees earned
should be disclosed and explained. Audit committees should have in place a
procedure for assessing annually the independence of the auditor and the quality
of the external audit process.
Comprehensive
disclosure provides investors with a sense of the company’s long-term
operational risk management practices and, more broadly, the quality of the
board’s oversight. The audit or risk committee, should periodically review the
company’s risk assessment and risk management policies and the significant risks
and exposures identified by management, the internal auditors or the independent
auditors and management’s steps to address them. In the absence of detailed
disclosures, we may reasonably conclude that companies are not adequately
managing risk.
Capital
structure, mergers, asset sales, and other special transactions
The
capital structure of a company is critical to shareholders as it impacts the
value of their investment and the priority of their interest in the company
relative to that of other equity or debt investors. Pre-emptive rights are a key
protection for shareholders against the dilution of their
interests.
Effective
voting rights are basic rights of share ownership and a core principle of
effective governance. Shareholders, as the residual claimants, have the
strongest interest in protecting the financial value of the company, and voting
rights should match economic exposure, i.e. one share, one vote.
In
principle, we disagree with the creation of a share class with equivalent
economic exposure and preferential, differentiated voting rights. In our view,
this structure violates the fundamental corporate governance principle of
proportionality and results in a concentration of power in the hands of a few
shareholders, thus disenfranchising other shareholders and amplifying any
potential conflicts of interest. However, we recognize that in certain markets,
at least for a period of time, companies may have a valid argument for listing
dual classes of shares with differentiated voting rights. In our view, such
companies should review these share class structures on a regular basis or as
company circumstances change. Additionally, they should seek shareholder
approval of their capital structure on a periodic basis via a management
proposal at the company’s shareholder meeting. The proposal should give
unaffiliated shareholders the opportunity to affirm the current structure or
establish mechanisms to end or phase out controlling structures at the
appropriate time, while minimizing costs to shareholders.
In
assessing mergers, asset sales, or other special transactions, BlackRock’s
primary consideration is the long-term economic interests of our clients as
shareholders. Boards proposing a transaction should clearly explain the economic
and strategic rationale behind it. We will review a proposed transaction to
determine the degree to which it can enhance long-term shareholder value. We
find long-term investors like our clients typically benefit when proposed
transactions have the unanimous support of the board and have been negotiated at
arm’s length. We may seek reassurance from the board that the financial
interests of executives and/or board members in a given transaction have not
adversely affected their ability to place shareholders’ interests before their
own. Where the transaction involves related parties, the recommendation to
support should come from the independent directors, a best practice in most
markets, and ideally, the terms should have been assessed through an independent
appraisal process. In addition, it is good practice that it be approved by a
separate vote of the non-conflicted parties.
BlackRock
Investment Stewardship Global
Principles | 9
As
a matter of sound governance practice, shareholders should have a right to
dispose of company shares in the open market without unnecessary restriction. In
our view, corporate mechanisms designed to limit shareholders’ ability to sell
their shares are contrary to basic property rights. Such mechanisms can serve to
protect and entrench interests other than those of the shareholders. In our
view, shareholders are broadly capable of making decisions in their own best
interests. We encourage any so-called “shareholder rights plans” proposed by a
board to be subject to shareholder approval upon introduction and periodically
thereafter.
Executive
compensation
In
most markets, one of the most important roles for a company’s board of directors
is to put in place a compensation structure that incentivizes and rewards
executives appropriately. There should be a clear link between variable pay and
operational and financial performance. Performance metrics should be stretching
and aligned with a company’s strategy and business model. BIS does not have a
position on the use of sustainability-related criteria in compensation
structures, but in our view, where companies choose to include these components,
they should be adequately disclosed, material to the company’s strategy, and as
rigorous as other financial or operational targets. Long-term incentive plans
should encompass timeframes that 1) are distinct from annual executive
compensation structures and metrics, and 2) encourage the delivery of strong
financial results over a period of years. Compensation committees should guard
against contractual arrangements that would entitle executives to material
compensation for early termination of their employment. Finally, pension
contributions and other deferred compensation arrangements should be reasonable,
in light of market practices.
We
are not supportive of one-off or special bonuses unrelated to company or
individual performance. Where discretion has been used by the compensation
committee or its equivalent, we expect disclosure relating to how and why the
discretion was used, and how the adjusted outcome is aligned with the interests
of shareholders. We acknowledge that the use of peer group evaluation by
compensation committees can help ensure competitive pay; however, we are
concerned when the rationale for increases in total compensation at a company is
solely based on peer benchmarking, rather than a rigorous measure of
outperformance. We encourage companies to clearly explain how compensation
outcomes have rewarded performance.
We
encourage boards to consider building clawback provisions into incentive plans
such that companies could clawback compensation or require executives to forgo
awards when compensation was based on faulty financial statements or deceptive
business practices. We also favor recoupment from or the foregoing of the grant
of any awards by any senior executive whose behavior caused material financial
harm to shareholders, material reputational risk to the company, or resulted in
a criminal investigation, even if such actions did not ultimately result in a
material restatement of past results.
Non-executive
directors should be compensated in a manner that is commensurate with the time
and effort expended in fulfilling their professional responsibilities.
Additionally, these compensation arrangements should not risk compromising
directors’ independence or aligning their interests too closely with those of
the management, whom they are charged with overseeing.
We
use third party research, in addition to our own analysis, to evaluate existing
and proposed compensation structures. BIS may signal concerns through not
supporting management’s proposals to approve compensation, where they are on the
agenda. We may also vote against members of the compensation committee or
equivalent board members for poor compensation practices or structures.
Material
sustainability-related risks and opportunities
It
is our view that well-managed companies will effectively evaluate and manage
material sustainability-related risks and opportunities relevant to their
businesses. As with all risks and opportunities in a company's business model,
appropriate oversight of material sustainability considerations is a core
component of having an effective governance framework, which supports durable,
long-term financial value creation.
BlackRock
Investment Stewardship Global
Principles | 10
Robust
disclosure is essential for investors to effectively evaluate companies’
strategy and business practices related to material sustainability-related risks
and opportunities. Long-term investors like our clients can benefit when
companies demonstrate that they have a resilient business model through
disclosures that cover governance, strategy, risk management, and metrics and
targets, including industry-specific metrics. The International Sustainability
Standards Board (ISSB) standards, IFRS S1 and S2,4
provide companies with a useful guide to preparing this disclosure. The
standards build on the Task Force on Climate-related Financial Disclosures
(TCFD) framework and the standards and metrics developed by the Sustainability
Accounting Standards Board (SASB), which have converged under the ISSB. We
recognize that companies may phase in reporting aligned with the ISSB standards
over several years. We also recognize that some companies may report using
different standards, which may be required by regulation, or one of a number of
voluntary standards. In such cases, we ask that companies highlight the metrics
that are industry- or company-specific.
We
note that climate and other sustainability-related disclosures often require
companies to collect and aggregate data from various internal and external
sources. We recognize that the practical realities of data collection and
reporting may not line up with financial reporting cycles and companies may
require additional time after their fiscal year-end to accurately collect,
analyze, and report this data to investors. That said, to give investors time to
assess the data, we encourage companies to produce climate and other
sustainability-related disclosures sufficiently in advance of their annual
meeting, to the best of their abilities.
Companies
may also choose to adopt or refer to guidance on sustainable and responsible
business conduct issued by supranational organizations such as the United
Nations or the Organization for Economic Cooperation and Development. Further,
industry initiatives on managing specific operational risks may provide useful
guidance to companies on best practices and disclosures. We find it helpful to
our understanding of investment risk when companies disclose any relevant global
climate and other sustainability-related standards adopted, the industry
initiatives in which they participate, any peer group benchmarking undertaken,
and any assurance processes to help investors understand their approach to
sustainable and responsible business practices. We will express any concerns
through our voting where a company’s actions or disclosures do not seem adequate
in light of the materiality of the business risks.
Climate
and nature-related risk
While
companies in various sectors and geographies may be affected differently by
climate-related risks and opportunities, the low-carbon transition is an
investment factor that can be material for many companies and economies around
the globe.
We
seek to understand, from company disclosures and engagement, the strategies
companies have in place to manage material risks to, and opportunities for,
their long-term business model associated with a range of climate-related
scenarios, including a scenario in which global warming is limited to well below
2°C, considering global ambitions to achieve a limit of 1.5°C. As one of many
shareholders, and typically a minority one, BlackRock does not tell companies
what to do. It is the role of the board and management to set and implement a
company's long-term strategy to deliver long-term financial returns.
Our
research shows that the low-carbon transition is a structural shift in the
global economy that will be shaped by changes in government policies,
technology, and consumer preferences, which may be material for many
companies.5
Yet the path to a low-carbon economy is deeply uncertain and uneven, with
different parts of the economy moving at different speeds. BIS recognizes that
it can be challenging for companies to predict the impact of climate-related
risk and opportunity on their businesses and operating environments. Many
companies are assessing how to navigate the low-carbon transition while
delivering long-term value to investors. In this context, we encourage companies
to publicly disclose, consistent with their business model and sector, how they
inte
4
The objective of IFRS S1 General Requirements for Disclosure of
Sustainability-related Financial Information is to require an entity to disclose
information about its sustainability-related risks and opportunities that is
useful to primary users of general-purpose financial reports in making decisions
relating to providing resources to the entity. The objective of IFRS S2
Climate-related Disclosures is to require an entity to disclose information
about its climate-related risks and opportunities that is useful to primary
users of general-purpose financial reports in making decisions relating to
providing resources to the entity.
5
BlackRock
Investment Institute, “Tracking the low-carbon transition”, July
2023.
BlackRock
Investment Stewardship Global
Principles | 11
nd
to deliver long-term financial performance through the transition to a
low-carbon economy. Where available, we appreciate companies publishing their
transition plan.6
Consistent
with the ISSB standards, we are better able to assess preparedness for the
low-carbon transition when companies disclose short-, medium- and long-term
targets, ideally science-based where these are available for their sector, for
scope 1 and 2 greenhouse gas emissions (GHG) reductions and to demonstrate how
their targets are consistent with the long-term financial interests of their
investors.
While
we recognize that regulators in some markets are moving to mandate certain
disclosures, at this stage, we view scope 3 emissions differently from scopes 1
and 2, given methodological complexity, regulatory uncertainty, concerns about
double-counting, and lack of direct control by companies. We welcome disclosures
and commitments companies choose to make regarding scope 3 emissions and
recognize these are provided on a good-faith basis as methodology develops. Our
publicly available commentary
provides more information on our approach to climate-related risks and
opportunities.
In
addition to climate-related risks and opportunities, the management of
nature-related factors is increasingly a component of some companies’ ability to
generate durable, long-term financial returns for shareholders, particularly
where a company’s strategy is heavily reliant on the availability of natural
capital, or whose supply chains are exposed to locations with nature-related
risks. We look for such companies to disclose how they manage any reliance and
impact on, as well as use of, natural capital, including appropriate risk
oversight and relevant metrics and targets, to understand how these factors are
integrated into strategy. We will evaluate these disclosures to inform our view
of how a company is managing material nature-related risks and opportunities, as
well as in our assessment of relevant shareholder proposals. Our publicly
available commentary
provides more information on our approach to natural capital.7
Key
stakeholder interests
In
order to advance long-term shareholders’ interests, companies should consider
the interests of the various parties on whom they depend for their success over
time. It is for each company to determine their key stakeholders based on what
is material to their business and long-term financial performance. For many
companies, key stakeholders include employees, business partners (such as
suppliers and distributors), clients and consumers, regulators, and the
communities in which they operate.
As
a long-term shareholder on behalf of our clients, we find it helpful when
companies disclose how they have identified their key stakeholders and
considered their interests in business decision-making. In addition to
understanding broader stakeholder relationships, BIS finds it helpful when
companies consider the needs of their workforce today, and the skills required
for their future business strategy. We are also interested to understand the
role of the board, which is well positioned to ensure that the approach taken is
informed by and aligns with the company’s strategy and purpose.
Companies
should articulate how they address material adverse impacts that could arise
from their business practices and affect critical relationships with their
stakeholders. We encourage companies to implement, to the extent appropriate,
monitoring processes (often referred to as due diligence) to identify and
mitigate potential adverse impacts and grievance mechanisms to remediate any
actual adverse material impacts. In our view, maintaining trust within these
relationships can contribute to a company’s long-term success.
6
We have observed that more companies are developing such plans, and public
policy makers in a number of markets are signaling their intentions to require
them. We view transition plans (TPs) as a method for a company to both
internally assess and externally communicate long-term strategy, ambition,
objectives, and actions to create financial value through the global transition
towards a low-carbon economy. While many initiatives across jurisdictions
outline a framework for TPs, there is no consensus on the key elements these
plans should contain. We view useful disclosure as that which communicates a
company’s approach to managing financially material, business relevant risks and
opportunities – including climate-related risks – to deliver long-term financial
performance, thus enabling investors to make more informed
decisions.
7
Given the growing awareness of the materiality of these issues for certain
businesses, enhanced reporting on a company's natural capital dependencies and
impacts would aid investors’ understanding. In our view, the final
recommendations of the Taskforce
on Nature-related Financial Disclosures
may prove useful to some companies. We recognize that some companies may report
using different standards, which may be required by regulation, or one of a
number of other private sector standards.
BlackRock
Investment Stewardship Global
Principles | 12
Other
corporate governance matters and shareholder protections
In
our view, shareholders have a right to material and timely information on the
financial performance and viability of the companies in which they invest. In
addition, companies should publish information on the governance structures in
place and the rights of shareholders to influence these structures. The
reporting and disclosure provided by companies help shareholders assess the
effectiveness of the board’s oversight of management and whether investors’
economic interests have been protected. We believe shareholders should have the
right to vote on key corporate governance matters, including changes to
governance mechanisms, to submit proposals to the shareholders’ meeting, and to
call special meetings of shareholders.
Corporate
form
In
our view, it is the responsibility of the board to determine the corporate form
that is most appropriate given the company's purpose and business
model.8
Companies proposing to change their corporate form to a public benefit
corporation or similar entity should put it to a shareholder vote if
not already required to do so under applicable law. Supporting documentation
from companies or shareholder proponents proposing to alter the corporate form
should clearly articulate how the interests of shareholders and different
stakeholders would be impacted as well as the accountability and voting
mechanisms that would be available to shareholders. As a fiduciary on behalf of
clients, we generally support management proposals if our analysis indicates
that shareholders’ economic interests are adequately protected. Relevant
shareholder proposals are evaluated on a case-by-case basis.
Shareholder
proposals
In
most markets in which BlackRock invests on behalf of clients, shareholders have
the right to submit proposals to be voted on by shareholders at a company’s
annual or extraordinary meeting, as long as eligibility and procedural
requirements are met. The matters that we see put forward by shareholders
address a wide range of topics, including governance reforms, capital
management, and improvements in the management or disclosure of
sustainability-related risks.
BlackRock
is subject to legal and regulatory requirements in the U.S. that place
restrictions and limitations on how BlackRock can interact with the companies in
which we invest on behalf of our clients, including our ability to submit
shareholder proposals. We can vote, on behalf of clients who authorize us to do
so, on proposals put forth by others.
When
assessing shareholder proposals, we evaluate each proposal on its merit, with a
singular focus on its implications for long-term financial value creation by
that company. We believe it is helpful for companies to disclose the names of
the proponent or organization that has submitted or advised on the proposal. We
consider the business and economic relevance of the issue raised, as well as its
materiality and the urgency with which our experience indicates it should be
addressed. We would not support proposals that we believe would result in
over-reaching into the basic business decisions of the company. We take into
consideration the legal effect of the proposal, as shareholder proposals may be
advisory or legally binding depending on the jurisdiction, while others may make
requests that would be deemed illegal in a given jurisdiction.
Where
a proposal is focused on a material business risk that we agree needs to be
addressed and the intended outcome is consistent with long-term financial value
creation, we will look to the board and management to demonstrate that the
company has met the intent of the request made in the shareholder proposal.
Where our analysis and/or engagement indicate an opportunity for improvement in
the company’s approach to the issue, we may support shareholder proposals that
are reasonable and not unduly prescriptive or constraining on management.
8
Corporate form refers to the legal structure by which a business is
organized.
BlackRock
Investment Stewardship Global
Principles | 13
We
recognize that some shareholder proposals bundle topics and/or specific requests
and include supporting statements that explain the reasoning or objectives of
the proponent. In voting on behalf of clients, we do not submit or edit
proposals or the supporting statements – we must vote yes or no on the proposal
as phrased by the proponent. Therefore, when we vote in support of a proposal,
we are not necessarily endorsing every element of the proposal or the reasoning,
objectives, or supporting statement of the proponent. We may support a
proposal for different reasons from those put forth by the proponent, when we
believe that, overall, it can advance our clients' long-term financial
interests. We would normally explain to the company our rationale for supporting
such proposals.
Alternatively,
or in addition, we may vote against the election of one or more directors if, in
our assessment, the board has not responded sufficiently or with an appropriate
sense of urgency. We may also support a proposal if management is on track, but
we believe that voting in favor might accelerate efforts to address a material
risk.
BlackRock’s
oversight of its investment
stewardship activities
Oversight
BlackRock
maintains three regional advisory committees (Stewardship Advisory Committees)
for a) the Americas; b) Europe, the Middle East and Africa; and c) Asia-Pacific,
generally consisting of senior BlackRock investment professionals and/or senior
employees with practical boardroom experience. The regional Stewardship Advisory
Committees review and advise on amendments to BIS regional proxy voting
guidelines (the Guidelines) covering markets within each respective region. The
advisory committees do not determine voting decisions, which are the
responsibility of BIS.
In
addition to the regional Stewardship Advisory Committees, the Investment
Stewardship Global Oversight Committee (Global Oversight Committee) is a
risk-focused committee, comprised of senior representatives from various
BlackRock investment teams, a senior legal representative, the Global Head of
Investment Stewardship (Global Head), and other senior executives with relevant
experience and team oversight. The Global Committee does not determine voting
decisions, which are the responsibility of BIS.
The
Global Head has primary oversight of the activities of BIS, including voting in
accordance with the Guidelines, which require the application of professional
judgment and consideration of each company’s unique circumstances. The Global
Committee reviews and approves amendments to these Principles. The Global
Committee also reviews and approves amendments to the regional Guidelines, as
proposed by the regional Stewardship Advisory Committees.
In
addition, the Global Committee receives and reviews periodic reports regarding
the votes cast by BIS, as well as updates on material process issues, procedural
changes, and other risk oversight considerations. The Global Committee reviews
these reports in an oversight capacity as informed by the
Guidelines.
BIS
carries out engagement with companies, executes proxy votes, and conducts vote
operations (including maintaining records of votes cast) in a manner consistent
with the relevant Guidelines. BIS also conducts research on corporate governance
issues and participates in industry discussions to contribute to and keep
abreast of important developments in the corporate governance field. BIS may
utilize third parties for certain of the foregoing activities and performs
oversight of those third parties. BIS may raise complicated or particularly
controversial matters for internal discussion with the relevant investment teams
and governance specialists for discussion and guidance prior to making a voting
decision.
BlackRock
Investment Stewardship Global
Principles | 14
Vote
execution
BlackRock
votes on proxy issues when our clients authorize us to do so. When BlackRock has
been authorized to vote on behalf of our clients, we carefully consider proxies
submitted to funds and other fiduciary account(s) (Fund or Funds) for which we
have voting authority. BlackRock votes (or refrains from voting) proxies for
each Fund for which we have voting authority based on our evaluation of the
alignment of the voting items with the long-term economic interests of our
clients, in the exercise of our independent business judgment, and without
regard to the relationship of the issuer of the proxy (or any shareholder
proponent or dissident shareholder) to the Fund, the Fund’s affiliates (if any),
BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts
management policies and procedures,” below).
When
exercising voting rights, BIS will normally vote on specific proxy issues in
accordance with the Guidelines for the relevant market, as well as the Global
Principles. The Guidelines are reviewed annually and are amended consistent with
changes in the local market practice, as developments in corporate governance
occur, or as otherwise deemed advisable by the applicable Stewardship Advisory
Committees. BIS analysts may, in the exercise of their professional judgment,
conclude that the Guidelines do not cover the specific matter upon which a proxy
vote is required or that an exception to the Guidelines would be in the
long-term economic interests of BlackRock’s clients.
In
the uncommon circumstance of there being a vote with respect to fixed income
securities or the securities of privately held issuers, the decision generally
will be made by a Fund's portfolio managers and/or BIS based on an assessment of
the particular transactions or other matters at issue.
In
certain markets, proxy voting involves logistical issues which can affect BIS’
ability to vote such proxies, as well as the desirability of voting such
proxies. These issues include, but are not limited to: i) untimely notice of
shareholder meetings; ii) restrictions on a foreigner’s ability to exercise
votes; iii) requirements to vote proxies in person; iv) “share-blocking”
(requirements that investors who exercise their voting rights surrender the
right to dispose of their holdings for some specified period in proximity to the
shareholder meeting); v) potential difficulties in translating the proxy; vi)
regulatory constraints; and vii) requirements to provide local agents with
unrestricted powers of attorney to facilitate voting instructions. We are not
supportive of impediments to the exercise of voting rights such as
share-blocking or overly burdensome administrative requirements.
As
a consequence, BlackRock votes proxies in these situations on a “best-efforts”
basis. In addition, BIS may determine that it is generally in the interests of
BlackRock’s clients not to vote proxies (or not to vote our full allocation) if
the costs (including but not limited to opportunity costs associated with
share-blocking constraints) associated with exercising a vote are expected to
outweigh the benefit the client would derive by voting on the
proposal.
Active
portfolio managers have full discretion to vote the shares in the Funds they
manage based on their analysis of the economic impact of a particular ballot
item on their investors. Portfolio managers may, from time to time, reach
differing views on how to maximize economic value with respect to a particular
investment. Therefore, portfolio managers may, and sometimes do, vote shares in
the Funds under their management differently from BIS or from one another.
However, because BlackRock’s clients are mostly long-term investors with
long-term economic goals, ballots are generally cast in a uniform manner.
Voting
Choice
BlackRock
offers a Voting
Choice
program, which provides eligible clients with more opportunities to participate
in the proxy voting process where legally and operationally viable. BlackRock
Voting Choice aims to make proxy voting easier and more accessible for eligible
clients.
Voting
Choice is currently available for eligible clients invested in certain
institutional pooled funds in the U.S., UK, Ireland, and Canada that utilize
equity index investment strategies, as well as eligible clients in certain
institutional pooled funds in the U.S., UK, and Canada that use systematic
active equity (SAE) strategies. Currently, this includes over 650 pooled
investment funds, including equity index funds and SAE investment
BlackRock
Investment Stewardship Global
Principles | 15
funds.
In addition, institutional clients in separately managed accounts (SMAs)
continue to be eligible for BlackRock Voting Choice regardless of their
investment strategies.9
As
a result, the shares attributed to BlackRock in company share registers may be
voted differently depending on whether our clients have authorized BIS to vote
on their behalf, have authorized BIS to vote in accordance with a third-party
policy, or have elected to vote shares in accordance with their own
policy. Agreements with our clients to allow them greater control over
their voting, including which policies they have selected, will be treated
confidentially consistent with our treatment of similar client
agreements.
Conflicts
management policies and procedures
BIS
maintains policies and procedures that seek to prevent undue influence on
BlackRock’s proxy voting activity. Such influence might stem from any
relationship between the investee company (or any shareholder proponent or
dissident shareholder) and BlackRock, BlackRock’s affiliates, a Fund or a Fund’s
affiliates, or BlackRock employees. The following are examples of sources of
perceived or potential conflicts of interest:
●BlackRock
clients who may be issuers of securities or proponents of shareholder
resolutions
●BlackRock
business partners or third parties who may be issuers of securities or
proponents of shareholder resolutions
●BlackRock
employees who may sit on the boards of public companies held in Funds managed by
BlackRock
●Significant
BlackRock, Inc. investors who may be issuers of securities held in Funds managed
by BlackRock
●Securities
of BlackRock, Inc. or BlackRock investment funds held in Funds managed by
BlackRock
●BlackRock,
Inc. board members who serve as senior executives or directors of public
companies held in Funds managed by BlackRock
BlackRock
has taken certain steps to mitigate perceived or potential conflicts including,
but not limited to, the following:
●Adopted
the Guidelines which are designed to advance our clients’ long-term economic
interests in the companies in which BlackRock invests on their
behalf
●Established
a reporting structure that separates BIS from employees with sales, vendor
management, or business partnership roles. In addition, BlackRock seeks to
ensure that all engagements with corporate issuers, dissident shareholders or
shareholder proponents are managed consistently and without regard to
BlackRock’s relationship with such parties. Clients or business partners are not
given special treatment or differentiated access to BIS. BIS prioritizes
engagements based on factors including, but not limited to, our need for
additional information to make a voting decision or our view on the likelihood
that an engagement could lead to positive outcome(s) over time for the economic
value of the company. Within the normal course of business, BIS may engage
directly with BlackRock clients, business partners and/or third parties, and/or
with employees with sales, vendor management, or business partnership roles, in
discussions regarding our approach to stewardship, general corporate governance
matters, client reporting needs, and/or to otherwise ensure that proxy-related
client service levels are met
9
Read more about BlackRock Voting Choice on our website.
BlackRock
Investment Stewardship Global
Principles | 16
●Determined
to engage, in certain instances, an independent third-party voting service
provider to make proxy voting recommendations as a further safeguard to avoid
potential conflicts of interest, to satisfy regulatory compliance requirements,
or as may be otherwise required by applicable law. In such circumstances, the
independent third-party voting service provider provides BlackRock with
recommendations, in accordance with the Guidelines, as to how to vote such
proxies. BlackRock uses an independent third-party voting service provider to
make proxy voting recommendations for shares of BlackRock, Inc. and companies
affiliated with BlackRock, Inc. BlackRock may also use an independent
third-party voting service provider to make proxy voting recommendations
for:
opublic
companies that include BlackRock employees on their boards of directors
opublic
companies of which a BlackRock, Inc. board member serves as a senior executive
or a member of the board of directors
opublic
companies that are the subject of certain transactions involving BlackRock
Funds
opublic
companies that are joint venture partners with BlackRock, and
opublic
companies when legal or regulatory requirements compel BlackRock to use an
independent third-party voting service provider
In
selecting an independent third-party voting service provider, we assess several
characteristics, including but not limited to: independence, an ability to
analyze proxy issues and make recommendations in the economic interest of our
clients in accordance with the Guidelines, reputation for reliability and
integrity, and operational capacity to accurately deliver the assigned
recommendations in a timely manner. We may engage more than one independent
third-party voting service provider, in part to mitigate potential or perceived
conflicts of interest at a single voting service provider. The Global Committee
appoints and reviews the performance of the independent third-party voting
service providers, generally on an annual basis.
Securities
lending
When
so authorized, BlackRock acts as a securities lending agent on behalf of Funds.
Securities lending is a well-regulated practice that contributes to capital
market efficiency. It also enables funds to generate additional returns while
allowing fund providers to keep fund expenses lower.
With
regard to the relationship between securities lending and proxy voting,
BlackRock cannot vote shares on loan and may determine to recall them for
voting, as guided by our fiduciary responsibility to act in our clients’
financial interests. While this has occurred in a limited number of cases, the
decision to recall securities on loan as part of BlackRock’s securities lending
program in order to vote is based on an evaluation of various factors that
include, but are not limited to, assessing potential securities lending revenue
alongside the potential long-term financial value to clients of voting those
securities (based on the information available at the time of recall
consideration).10
BIS works with colleagues in the Securities Lending and Risk and Quantitative
Analysis teams to evaluate the costs and benefits to clients of recalling shares
on loan.
In
almost all instances , BlackRock anticipates that the potential long-term
financial value to the Fund of voting shares would be less than the potential
revenue the loan may provide the Fund. However, in certain instances, BlackRock
may determine, in our independent business judgment as a fiduciary, that the
value of voting outweighs the securities lending revenue loss to clients and
would therefore recall shares to be voted in those instances.
10
Recalling securities on loan can be impacted by the timing of record dates. In
the U.S., for example, the record date of a shareholder meeting typically falls
before the proxy statements are released. Accordingly, it is not practicable to
evaluate a proxy statement, determine that a vote has a material impact on a
fund and recall any shares on loan in advance of the record date for the annual
meeting. As a result, managers must weigh independent business judgement as a
fiduciary, the benefit to a fund’s shareholders of recalling loaned shares in
advance of an estimated record date without knowing whether there will be a vote
on matters which have a material impact on the fund (thereby forgoing potential
securities lending revenue for the fund’s shareholders) or leaving shares on
loan to potentially earn revenue for the fund (thereby forgoing the opportunity
to vote).
BlackRock
Investment Stewardship Global
Principles | 17
Periodically,
BlackRock reviews our process for determining whether to recall securities on
loan in order to vote and may modify it as necessary.
Voting
guidelines
The
voting guidelines published for each region/country in which we vote are
intended to summarize BlackRock’s general philosophy and approach to issues that
may commonly arise in the proxy voting context in each market where we invest.
The Guidelines are not intended to be exhaustive. BIS applies the Guidelines on
a case-by-case basis, in the context of the individual circumstances of each
company and the specific issue under review. As such, the Guidelines do not
indicate how BIS will vote in every instance. Rather, they reflect our view
about corporate governance issues generally, and provide insight into how we
typically approach issues that commonly arise on corporate ballots. As
previously discussed, the Guidelines should be read in conjunction with the
Principles and engagement priorities. Collectively, these “BIS policies” set out
the core elements of corporate governance that guide our investment stewardship
efforts globally and within each market, including when engaging with companies
and voting at shareholder meetings. The BIS policies are applied on a
case-by-case basis, taking into consideration the context within which a company
is operating.
Reporting
and vote transparency
We
are committed to transparency in the stewardship work we do on behalf of
clients. We inform clients about our engagement and voting policies and
activities through direct communication and through disclosure on our
website.
Each year we publish an annual report that provides a global overview of our
investment stewardship engagement and voting activities and a voting spotlight
that summarizes our voting over a proxy year.11
Additionally, we make public our regional proxy voting guidelines for the
benefit of clients and the companies in which we invest on their behalf. We also
publish commentaries to share our perspective on market developments and
emerging key themes.
At
a more granular level, on a quarterly basis, we publish our vote record for each
company that held a shareholder meeting during the period, showing how BIS voted
on each proposal and providing our rationale for any votes against management
proposals or on shareholder proposals. For shareholder meetings where a vote
might be high profile or of significant interest to clients, we may publish a
vote bulletin after the meeting, disclosing and explaining our vote on key
proposals. We also publish a quarterly list of all companies with which we
engaged and the key topics addressed in the engagement meeting.
In
this way, we help inform our clients about the work we do on their behalf in
promoting the governance and business practices that support durable, long-term
financial value creation.
11
The proxy year runs from July 1 to June 30.
BlackRock
Investment Stewardship Global
Principles | 18
Want
to know more?
This
document is provided for information and educational purposes only. Investing
involves risk, including the loss of principal.
Prepared
by BlackRock, Inc.
©2024
BlackRock, Inc. All rights reserved. BLACKROCK
is a trademark of BlackRock, Inc., or its subsidiaries in the United States and
elsewhere. All other trademarks are those of their respective
owners.
BROWN
ADVISORY
Proxy
Voting Policy
March
2022
Discussion
of Brown Advisory’s proxy voting policies and procedures, including specific
approaches for integrating ESG principles into our voting decisions for
sustainable investment strategies
Proxy
voting is the process by which equity shareholders of a company vote, typically
on an annual basis, on various matters pertaining to the governance of that
company. Most proposals are submitted by management, and votes on management
proposals are binding—the equivalent of a binding referendum vote on a ballot
question in a statewide election. Additionally, a growing number of shareholder
proposals are submitted each year for consideration at annual general meetings,
many of which seek to address various environmental, social and governance
issues. These votes are nonbinding, but the vote totals on these proposals can
nonetheless influence corporate behavior.
As
a fiduciary and as a sustainable investor, Brown Advisory considers proxy voting
to be an important responsibility. It is an important mechanism for voicing our
preferences as owners and stakeholders in the companies we hold in our
strategies. This document contains an overview of the principles and processes
that guide our proxy voting on securities—including differences between our
process for institutional strategies and for advisory clients—followed by our
full Proxy Voting Policy, developed in consultation with Institutional
Shareholder Services Inc. (ISS).
Proxy
Voting Principles for Securities Held within our Institutional
Strategies
The
following principles serve as a foundation of our approach to proxy voting for
securities held within our institutional strategies. For these securities, Brown
Advisory’s equity research team has researched the company and generally is
well-informed of any issues material to the company’s business model and
practices. As such, we believe we are in a position to engage with companies on
these issues both through proxy voting and other engagement practices. Proxy
voting is a democratic process that offers shareholders the opportunity to have
their voice heard and express their sentiment as owners. For this reason, we
believe that the rights of shareholders with regard to these resolutions should
be protected by regulators to ensure that investors’ perspectives can always be
heard in a public forum. We seek to participate in industry-wide activities that
express support for these rights, such as sign-on letters and other initiatives
to communicate views to the SEC, FINRA and other regulatory bodies.
▪Proxy
voting is our fiduciary duty. We hold ourselves responsible for aligning our
investment decision-making process and our proxy voting, in order to be
consistent about what we seek from companies we hold in our institutional
portfolios. We seek investments that are building and protecting long-term
shareholder value, and we believe this is reflected in all of our proxy voting
decisions. Responsible management of ESG issues is one input to achieving
long-term shareholder value, and as such, we are likely to support those
shareholder proposals that encourage company action on what we believe are
material ESG risks or opportunities.
▪Transparency
is essential. Brown Advisory is committed to providing proxy reporting and
standardized disclosure of our voting history, as well as publishing N-PX
filings for our mutual funds as required by law. Transparency is an important
step in helping our clients evaluate whether we uphold our stated principles
within our Sustainable and ESG strategies.
▪Bottom-up
due diligence should inform voting decisions. We review each proposal that comes
up for vote. Our analysts seek to dive below the surface and fully understand
the implications of especially complex and material proposals. The
recommendations of our proxy voting partner, ISS, are taken into consideration
but do not determine our final decisions.
▪Collaboration
with other stakeholders can inform our voting choice and amplify the signal of
our vote. We collaborate on voting research, through dialogue between our
analysts and portfolio managers. Where additive and practicable, we also
collaborate with external stakeholders including company management, ISS, issue
experts, ESG research networks and other stakeholders. We believe this
collaboration leads to better-informed decisions, and in certain instances,
collaboration can help to send a stronger message to a company about how the
investment community views a given issue.
▪Proxy
voting can be a part of a larger program to encourage positive changes. Proxy
voting is just one way to communicate with companies on risks and opportunities.
To complement our proxy voting process, and sometimes as result of it, our
investment team might choose to pursue an extended engagement with a company as
it relates to any information found during the due-diligence process for
determining the vote.
Institutional
Proxy Voting Process
▪Proxy
voting for our institutional investment strategies is overseen by a Proxy Voting
Committee made up of equity research analysts, ESG research analysts, trading
operations team members, the Head of Sustainable Investing, our Director of
Equity Research and our General Counsel (among others).
▪The
Committee is responsible for overseeing the proxy voting process. Responsibility
for determining how a vote is cast, however, rests with our investment and ESG
research teams and, ultimately, with the portfolio managers for each Brown
Advisory equity investment strategy. While we use the recommendations of ISS as
a baseline for our voting, especially for routine management proposals, we vote
each proposal after consideration on a case-by-case basis.
▪Our
customized Proxy Voting Policy, developed in consultation with ISS, is reviewed
each year.
▪For
more detail on our Institutional Proxy Voting process, please see pp. 5-6 of
this document.
Advisory
Client Proxy Voting Process
▪Proxy
voting for our Advisory clients (meaning clients for whom we manage customized
accounts in a discretionary relationship according to their goals). is
facilitated and monitored by our Proxy Voting Operations team. The team is
responsible for arrangements with all custodial partners to have accounts set to
electronic omnibus ballot distribution to our proxy voting agency, ISS. When
omnibus ballot distribution is not supported, individualized account set up and
distribution will be arranged.
▪Unless
otherwise agreed with a client, Brown Advisory’s Proxy Voting Policy is assigned
by default to our Advisory client accounts.
▪For
more detail on our Advisory Client Proxy Voting process, please see pp. 6-7 of
this document.
General
Proxy Voting Positions
Below
is a summary of the general positions that guide our voting for clients and
accounts where we have discretion to cast proxy votes. While we approach each
vote proposal on a case-by-case basis, we have a baseline set of “for” and
“against” positions that serve as a starting point for our consideration of both
management and shareholder proposals. For more detail on these positions, please
see pp. 8-11 of this document.
We
consider this baseline framework to be especially important in the realm of
ESG-related shareholder proposals. There are a variety of ESG principles and
ESG-related actions that we believe, by default, can lead to better investment
performance and positive impact on society, and we generally encourage and
support proposals that encourage these principles and actions. As noted above,
there are often tradeoffs we need to consider when voting—for example, our
desire for management to pay attention broadly to a salient issue, vs. specific
details in a proposal that we may not support—to help ensure that our voting
decisions are thoughtful and reflect the interests of all relevant
stakeholders.
|
|
|
|
|
|
|
| |
We
broadly support environmental proposals that encourage |
We
broadly support social proposals that encourage |
We
broadly support governance proposals that encourage |
▪Climate
change and emissions reporting, goal setting, and action |
▪Social
justice |
▪Executive
compensation measures that are linked to ESG metrics |
▪Water
quality, accessibility, and management |
▪Human
rights and responsible labor management |
▪Diverse
and inclusive board composition |
▪Responsible
and effective waste management |
▪Data
privacy and AI ethics |
▪Transparency
with regard to political spending |
▪Energy
efficiency and renewable, lower-carbon energy sourcing |
| |
Reporting
and Transparency
Brown
Advisory publishes its proxy voting activity annually on its website at a
firmwide level, and for each of our mutual funds.
BROWN
ADVISORY PROXY VOTING POLICY ON SECURITIES
The
firm receives proxy ballots on behalf of clients and shall vote such proxies
consistent with this Policy, which sets forth the firm’s standard approach to
voting on common proxy questions. In general, this Policy is designed to ensure
that the firm votes proxies in the best interest of clients, so as to promote
the long-term economic value of the underlying securities. These votes are
informed by both financial and extra-financial data, including material ESG
factors.
Clients
may, at any time, opt to change their proxy voting authorization. Upon notice
that a client has revoked the firm’s authority to vote proxies, the firm will
have the client account removed from omnibus voting and have the proxy setting
updated accordingly. This update at the custodian routes all ballots and annual
reports to the legal address on record of the account holder.
To
facilitate the proxy voting process, the firm has engaged Institutional
Shareholder Services Inc. (“ISS”), an unaffiliated, third-party proxy voting
service, to provide proxy research and voting recommendations. In addition, the
firm subscribes to ISS’s proxy vote management system, which provides a means to
receive and vote proxies, as well as services for record-keeping, auditing,
reporting and disclosure regarding votes. However, securities held within
institutional equity strategies are voted on a case-by-case basis, meaning, we
do not rely exclusively on the proxy policy, and complement our proxy provider’s
research with our own proprietary research to arrive at independent decisions,
when needed. The firm will regularly review our relationship with ISS in order
to assess its capacity and competency to provide services to the firm and to
review certain of its significant policies and procedures, including those
governing conflicts of interests, error identification and correction and
processes to evaluate additional information received during the proxy
process.
On
a regular basis, a list of upcoming proxies issued for companies held within the
institutional strategies are provided to the institutional portfolio managers.
Except in situations identified as presenting material conflicts of interest,
the institutional portfolio manager responsible for the institutional strategy
that holds the security may make the final voting decision based on a variety of
considerations. In circumstances where the securities are not held within an
institutional strategy, proxies will be voted according to Brown Advisory’s
policy, unless the client-specific guidelines provided by Brown Advisory to ISS
specify otherwise. Generally, Brown Advisory’s proxy voting philosophy is
aligned with ISS recommendations.
In
keeping with its fiduciary obligations to clients, the firm considers each proxy
voting proposal related to holdings in the firm’s institutional strategies on
its own merits and an independent determination is made based on the relevant
facts and circumstances, including both fundamental and ESG factors. Proxy
proposals include a wide range of routine and non-routine matters. The firm
generally votes with management on routine matters and takes a more case-by-case
approach regarding non-routine matters.
Voting
preferences of clients may differ based on their values. The firm seeks to
provide clients with the opportunity to have proxies voted in line with these
values. From time to time, clients may prefer to select alternative voting
guidelines that better align with their values. In these cases, the firm will
work with ISS to identify an appropriate alternative policy. Where no
appropriate alternative policy is available, the firm will endeavor to work with
the client to set up appropriate guidelines and procedures to vote
case-by-case
Proxy
Voting Principles for Securities Held within our Institutional
Strategies
▪The
following principles serve as a foundation of our approach to proxy voting for
securities held within our institutional strategies. For these securities, Brown
Advisory’s equity research team has researched the company and generally is
well-informed of any issues material to the company’s business model and
practices. As such, we believe we are in a position to engage with companies on
these issues both through proxy voting and other engagement practices. Proxy
voting is a democratic process that offers shareholders the opportunity to have
their voice heard and express their sentiment as owners. For this reason, we
believe that the rights of shareholders with regard to these resolutions should
be protected by regulators to ensure that investors’ perspectives can always be
heard in a public forum. We seek to participate in industry-wide activities that
express support for these rights, such as sign-on letters and other initiatives
to communicate views to the SEC, FINRA and other regulatory bodies.
▪Proxy
voting is our fiduciary duty. We hold ourselves responsible for aligning our
investment decision-making process and our proxy voting, in order to be
consistent about what we seek from companies we hold in our institutional
portfolios. We seek investments that are building and protecting long-term
shareholder value, and we believe this is reflected in all of our proxy voting
decisions. Responsible management of ESG issues is one input to achieving
long-term shareholder value, and as such, we are likely to support those
shareholder proposals that encourage company action on what we believe are
material ESG risks or opportunities.
▪Transparency
is essential. Brown Advisory is committed to providing proxy reporting and
standardized disclosure of our voting history, as well as publishing N-PX
filings for our mutual funds as required by law. Transparency is an important
step in helping our clients evaluate whether we uphold our stated principles
within our Sustainable and ESG strategies.
▪Bottom-up
due diligence should inform voting decisions. We review each proposal that comes
up for vote. Our analysts seek to dive below the surface and fully understand
the implications of especially complex and material proposals. The
recommendations of our proxy voting partner, ISS, are taken into consideration
but do not determine our final decisions.
▪Collaboration
with other stakeholders can inform our voting choice and amplify the signal of
our vote. We collaborate on voting research, through dialogue between our
analysts and portfolio managers. Where additive and practicable, we also
collaborate with external stakeholders including company management, ISS, issue
experts, ESG research networks and other stakeholders. We believe this
collaboration leads to better-informed decisions, and in certain instances,
collaboration can help to send a stronger message to a company about how the
investment community views a given issue.
▪Proxy
voting can be a part of a larger program to encourage positive changes. Proxy
voting is just one way to communicate with companies on risks and opportunities.
To complement our proxy voting process, and sometimes as result of it, our
investment team might choose to pursue an extended engagement with a company as
it relates to any information found during the due-diligence process for
determining the vote.
Institutional
Proxy Voting Process
▪Proxy
voting for our institutional investment strategies is overseen by a Proxy Voting
Committee made up of equity research analysts, ESG research analysts, trading
operations team members, the Head of Sustainable Investing, our Director of
Equity Research and our General Counsel (among others).
▪The
Committee is responsible for overseeing the proxy voting process. Responsibility
for determining how a vote is cast, however, rests with our investment and ESG
research teams and, ultimately, with the portfolio managers for each Brown
Advisory equity investment strategy. While we use the recommendations of ISS as
a baseline for our voting, especially for routine management proposals, we vote
each proposal after consideration on a case-by-case basis.
▪Our
customized Proxy Voting Policy, developed in consultation with ISS, is reviewed
each year and aims to reflect our fundamental and ESG thinking, so as to achieve
as much alignment between recommendations and execution as possible, while still
enabling our case-by-case approach.
▪A
30-day outlook of upcoming proposals is circulated to our full equity investment
research team each week. Fundamental analysts guide vote recommendations on
management proposals, and ESG analysts guide vote recommendations on shareholder
proposals, with both groups working together to think through the relevant
issues.
▪Proposals
may require additional due diligence and benefit from collaborative
investigation, and this is determined on a case-by-case basis. Where necessary,
our analysts will conduct research on each proposal, which may include
information contained in public filings, policy recommendations and management
conversations. When additional proxy materials become available after a voting
determination is made, we will seek to consider such filings when they are made
sufficiently in advance and where we believe such information would reasonably
be expected to affect our voting determination. To enhance our analysis, we may
collaborate with our internal and external networks, the resolution filer and/or
associated coalition, ISS analysts about their recommendation, the company
itself and relevant industry experts. If our additional due diligence
uncovers factual errors, incompleteness or inaccuracies in the analysis or
recommendation underpinning our vote, the firm will bring this to the attention
of ISS.
▪The
majority of voting recommendations are in line with our Proxy Voting Policy, and
in these cases the vote is automatically cast accordingly.
▪When
our recommendation diverges from the Policy, the responsible analyst will
contact the portfolio managers who own the name and who have final
decision-making power. In most cases, the portfolio managers agree with the
analyst’s recommendation, in rare cases they may overrule. In either case, the
final recommendation is provided to Brown Advisory’s operations team, which
documents the rationale for the vote and ensures vote execution. All votes cast
against policy require approval from the firm’s General Counsel.
▪In
the event that portfolio managers of different strategies disagree on the vote
recommendation for a name they all own, a split vote may be conducted. In
general, this disagreement is due to portfolio managers having unique views on
an issue. A split vote divides all of the company’s shares held by Brown
Advisory and splits the vote in accordance with the strategy’s share ownership
to reflect the individual preferences of each strategy’s portfolio manager(s).
Split votes trigger a review from the Proxy Voting Committee, and such votes
must be approved by the firm’s General Counsel.
Advisory
Client Voting Process
▪Proxy
voting for our Advisory clients is facilitated and monitored by our Proxy Voting
Operations team. The team is responsible for arrangements with all custodial
partners to have accounts set to electronic omnibus ballot distribution to our
proxy voting agency, ISS. When omnibus ballot distribution is not supported,
individualized account set up and distribution will be arranged.
▪Unless
otherwise agreed with a client, Brown Advisory’s Proxy Voting Policy is assigned
by default to our Advisory client accounts.
▪The
following exceptions can apply to standard voting for Advisory
clients:
◦Client
Directed:
A client will always retain her or his authority to request verbally and confirm
in writing their request to:
•Attend
a meeting and vote
•Vote
in line with account owner request
•Request
a take no action or abstention
◦No
Voting:
A client, during on-boarding, will have the ability to request accounts to be
set to have voting ballots mailed directly to the account owner’s
address.
◦Holdings
in Mutual Funds:
All holdings owned by our Advisory client base also held in our mutual fund
complexes may be overseen and governed by the voting practices detailed in the
Institutional section.
◦Client-specific
Guidelines:
Whereas we have a standard policy default, we have the capability to provide our
Advisory clients with the option to customize their voting preferences. Should a
client desire a customized approach, the Brown Advisory client team will work
directly with the client, Brown Advisory Operations, and ISS to establish and
implement client-specific guidelines.
▪The
following voting practices are applied to separately managed
portfolios:
◦Brown
Advisory institutional strategies held in a separately managed account
(SMA):
Holdings within Brown Advisory SMAs are overseen and governed by the Proxy
Voting Committee and follow all protocols detailed in the Institutional
section.
◦Externally
managed strategies held in a SMA:
Holdings within an externally managed strategy held as a SMA are set up with the
delegated and/or appointed manager for voting. In other terms, Brown Advisory
yields voting authority to the appointed manager.
▪Please
note the following voting practices are applied to corporate action events
whereby the voting matter has a direct financial impact on the Advisory client
account holder:
◦Such
corporate action events with a direct financial impact on the Advisory client
account holder will default to a case-by-case determination within our voting
platform at ISS.
◦Customized
reporting and service alerts will be distributed to our Proxy Voting Operations
team.
◦The
Proxy Voting Operations team will identify the account holders and Portfolio
Management teams to take action on the event. A request with supporting detail
and documentation will be sent to the Portfolio Management team to review and
provide the voting recommendation.
◦When
appropriate, our Portfolio Management team may engage the client on specific
events, to discuss a proposed action.
GENERAL
POSITIONS
Below
is a summary of Brown Advisory’s general positions for voting on common proxy
questions when Brown Advisory is authorized to vote shares at its discretion
rather than by a client’s specific guidelines. Given the dynamic and
wide-ranging nature of corporate governance issues that may arise, this summary
is not intended to be exhaustive.
Management
Recommendations
Since
the quality and depth of management is a primary factor considered when
investing in an issuer, the recommendation of the issuer’s management on any
issue will be given substantial weight. Furthermore, Brown Advisory runs
concentrated equity portfolios which we believe generally results in holding
high quality companies that have strong and trustworthy management teams. This
quality bias results in our portfolio managers generally supporting management
proposals. Although proxies with respect to most issues are voted in line with
the recommendation of the issuer’s management, the firm will not blindly vote in
favor of management. The firm will not support proxy proposals or positions that
it believes compromise clients’ best interests or that the firm determines may
be detrimental to the underlying value of client positions.
Election
of Directors
Although
proxies will typically be voted for a management-proposed slate of directors,
the firm may vote against (or withhold votes for) such directors if there are
compelling corporate governance reasons for doing so. Some of these reasons may
include where a director: attends less than 75% of board and relevant committee
meetings; is the CEO of a company where a serious restatement occurred after the
CEO certified the financial statements; served at a time when a poison pill was
adopted without shareholder approval within the prior year; is the CFO of the
company; has an interlocking directorship; has a perceived conflict of interest
(or the director’s immediate family member has a perceived conflict of
interest); or serves on an excessive number of boards.
The
firm seeks to support independent boards of directors comprised of members with
diverse backgrounds (including gender and race), a breadth and depth of relevant
experience (including sustainability), and a track record of positive, long-term
performance. The firm may vote against any boards that do not have the following
levels of diversity (i.e. directors who are women or other underrepresented
groups):
▪For
boards consisting of six or fewer directors, the firm may vote against the
Nominating Committee Chair where the board does not have one diverse director by
2022, and two diverse directors by 2024.
▪For
boards consisting of more than six directors, the firm may vote against the
Nominating Committee Chair where the board does not have 20% diverse board
members by 2022, and 30% diverse directors by 2024.
▪In
cases where the Nominating Committee Chair is not up for re-election, the firm
may vote against other board members including the Chair of the
board
Separation
of the roles of Chairman and CEO is generally supported, but the firm will not
typically vote against a CEO who serves as chairman or director. In the absence
of an independent chairman, however, the firm generally supports the appointment
of a lead director with authority to conduct sessions outside the presence of
the insider chairman.
The
firm will typically vote against any inside director seeking appointment to a
key committee (audit, compensation, nominating or governance), since the firm
believes that the service of independent directors on such committees best
protects and enhances the interests of shareholders. Where insufficient
information is provided regarding performance metrics, or where pay is not tied
to performance (e.g., where management has excessive discretion to alter
performance terms or previously defined targets), the firm will typically vote
against the chair of the compensation committee.
Appointment
and Rotation of Auditors
Management
recommendations regarding selection of an auditor shall generally be supported,
but the firm will not support the ratification of an auditor when there appears
to be a hindrance on auditor independence, intentional accounting irregularity
or negligence by the auditor. Some examples include: when an auditing firm has
other relationships with the company that may suggest a conflict of interest;
when the auditor bears some responsibility for a restatement by the company;
when a company has aggressive accounting policies or lack of transparency in
financial statements; and when a company changes auditors as a result of
disagreement between the company and the auditor regarding accounting principles
or disclosure issues. The firm will generally support proposals for voluntary
auditor rotation with reasonable frequency and/or rationale.
Changes
in State of Incorporation or Capital Structure
Management
recommendations about reincorporation are generally supported unless the new
jurisdiction in which the issuer is reincorporating has laws that would dilute
the rights of shareholders of the issuer. The firm will generally vote against
reincorporation where it believes the financial benefits are minimal and there
is a decrease in shareholder rights. Shareholder proposals to change the
company’s place of incorporation generally will only be supported in exceptional
circumstances.
Proposals
to increase the number of authorized shares will be evaluated on a case-by-case
basis. Because adequate capital stock is important to the operation of a
company, the firm will generally support the authorization of additional shares,
unless the issuer has not disclosed a detailed plan for use of the shares, or
where the number of shares far exceeds those needed to accomplish a detailed
plan. Additionally, if the issuance of new shares will limit shareholder rights
or could excessively dilute the value of outstanding shares, then such proposals
will be supported only if they are in the best interest of the
client.
Corporate
Restructurings, Mergers and Acquisitions
These
proposals should be examined on a case-by-case basis, as they are an extension
of an investment decision.
Proposals
Affecting Shareholder Rights
The
firm generally favors proposals that are likely to promote shareholder rights
and/or increase shareholder value. Proposals that seek to limit shareholder
rights, such as the creation of dual classes of stock, generally will not be
supported.
Anti-takeover
Issues
Measures
that impede takeovers or entrench management will be evaluated on a case-by-case
basis, taking into account the rights of shareholders, since the financial
interest of shareholders regarding buyout offers is so substantial.
Although
the firm generally opposes anti-takeover measures because they tend to diminish
shareholder rights and reduce management accountability, the firm generally
supports proposals that allow shareholders to vote on whether to implement a
“poison pill” plan (shareholder rights plan). In certain circumstances, the firm
may support a limited poison pill to accomplish a particular objective, such as
the closing of an important merger, or a pill that contains a reasonable
‘qualifying offer’ provision. The firm generally supports anti-greenmail
proposals, which prevent companies from buying back company stock at significant
premiums from a large shareholder.
Shareholder
Action
The
firm generally supports proposals that allow shareholders to call special
meetings, with a minimum threshold of shareholders requesting such a meeting.
The firm believes that best practice for a minimum threshold of shareholders
required to call a special meeting is generally considered to be between 20-25%,
however the firm assesses this on a company-by-company basis. Proposals that
allow shareholders to act by written consent are also generally supported, if
there is a threshold of the minimum number of votes that would be necessary to
authorize the action at a meeting at which all shareholders entitled to vote
were present and voting. The firm believes that best practice for a minimum
threshold of shareholders required to act by written consent is generally
considered to be between 20-25%, however the firm assesses this on a
company-by-company basis. In order to assess the appropriateness of special
meeting and written consent provisions the firm would, for example, consider the
make-up of the existing investor base/ownership, to determine whether a small
number of investors could easily achieve the required threshold, as well as what
other mechanisms or governance provisions already exist for shareholders to
access management.
Proxy
Access
The
firm believes that shareholders should, under reasonable conditions, have the
right to nominate directors of a company. The firm believes that it is generally
in the best interest of shareholders for companies to provide shareholders with
reasonable opportunity to exercise this right, while also ensuring that
short-term investors or investors without substantial investment in the company
cannot abuse this right. In general, we believe that the appropriate threshold
for proxy access should permit up to 20 shareholders that collectively own 3% or
more of the company’s outstanding shares for 3 or more years to nominate the
greater of 2 directors or 20% of the board’s directors, however the firm
assesses this on a case-by-case basis.
Executive
Compensation
Although
management recommendations should be given substantial weight, proposals
relating to executive compensation plans, including stock option plans and other
equity-based compensation, should be examined on a case-by- case basis to ensure
that the long-term interests of management and shareholders are properly
aligned. This alignment includes assessing whether compensation is tied to both
ESG and financial KPIs. Share count and voting power dilution should be
limited.
The
firm generally favors the grant of restricted stock units (RSUs) to executives,
since RSUs are an important component of compensation packages that link
executives’ compensation with their performance and that of the company. The
firm typically opposes caps on executive stock RSUs, since tying an executive’s
compensation to the performance of the company provides incentive to maximize
share value. The firm also supports equity grants to directors, which help align
the interests of outside directors with those of shareholders, although such
awards should not be performance-based, so that directors are not incentivized
in the same manner as executives.
Proposals
to reprice or exchange RSUs are reviewed on a case-by-case basis, but are
generally opposed. The firm generally will support a repricing only in limited
circumstances, such as if the stock decline mirrors the market or industry price
decline in terms of timing and magnitude and the exchange is not value
destructive to shareholders.
Although
matters of executive compensation should generally be left to the board’s
compensation committee, proposals to limit executive compensation will be
evaluated on a case-by-case basis.
The
firm generally supports shareholder proposals to allow shareholders an advisory
vote on compensation. Absent a compelling reason, companies should submit
say-on-pay votes to shareholders every year, since such votes promote valuable
communication between the board and shareholders regarding compensation. Where
there is an issue involving egregious or excessive bonuses, equity awards or
severance payments (including golden parachutes), the firm will generally vote
against a say-on-pay proposal. The firm may oppose the election of compensation
committee members at companies that do not satisfactorily align executive
compensation with the interests of shareholders.
Environmental,
Social and Governance Issues
Shareholder
proposals regarding environmental, social and governance issues, in general, are
supported, especially when they would have a clear and direct positive financial
effect on shareholder value and would not be burdensome or impose unnecessary or
excessive costs on the issuer. The environmental, social and governance
proposals we generally support often result in increased reporting and
disclosure, which deepens our understanding of the risks and opportunities
pertaining to a specific company. Although policy decisions are typically better
left to management and the board, in cases where the firm believes a company has
not adequately mitigated significant ESG risks, the firm may vote against
directors.
Brown
Advisory broadly supports proposals that encourage the following considerations
that we believe are in the best long-term economic interest of our
clients:
Environment
▪Climate
change and emissions reporting, goal setting, and action
▪Water
quality, accessibility, and management
▪Responsible
and effective waste management
▪Energy
efficiency and renewable, lower-carbon energy sourcing
Social
▪Social
justice
▪Human
rights and responsible labor management
▪Data
privacy and AI ethics
Governance
▪Executive
compensation measures that are linked to ESG metrics
▪Diverse
and inclusive board composition
▪Transparency
with regard to political spending
Non-U.S.
Proxy Proposals
For
actively recommended issuers domiciled outside the United States, the firm may
follow ISS’s international proxy voting guidelines, including, in certain
circumstances, country-specific guidelines.
Conflicts
of Interest
A
“conflict of interest” means any circumstance when the firm or one of its
affiliates (including officers, directors and employees), or in the case where
the firm serves as investment adviser to a Brown Advisory Fund, when the Fund or
the principal underwriter, or one or more of their affiliates (including
officers, directors and employees), knowingly does a material amount of business
with, receives material compensation from, or sits on the board of, a particular
issuer or closely affiliated entity and, therefore, may appear to have a
conflict of interest between its own interests and the interests of clients or
Fund shareholders in how proxies of that issuer are voted. For example, a
perceived conflict of interest may exist if an employee of the firm serves as a
director of an actively recommended issuer, or if the firm is aware that a
client serves as an officer or director of an actively recommended issuer.
Conflicts of interest will be resolved in a manner the firm believes is in the
best interest of the client.
The
firm should vote proxies relating to such issuers in accordance with the
following procedures:
Routine
Matters and Immaterial Conflicts: The firm may vote proxies for routine matters,
and for non-routine matters that are considered immaterial conflicts of
interest, consistent with this Policy. A conflict of interest will be considered
material to the extent that it is determined that such conflict has the
potential to influence the firm’s decision-making in voting a proxy. Materiality
determinations will be made by the Chief Compliance Officer or designee based
upon an assessment of the particular facts and circumstances.
Material
Conflicts and Non-Routine Matters: If the firm believes that (a) it has a
material conflict and (b) that the issue to be voted upon is non-routine or is
not covered by this Policy, then to avoid any potential conflict of
interest:
▪In
the case of a Fund, the firm shall contact the Fund board for a review and
determination.
▪In
the case of all other conflicts or potential conflicts, the firm may “echo vote”
such shares, if possible, which means the firm will vote the shares in the same
proportion as the vote of all other holders of the issuer’s shares; OR in cases
when echo voting is not possible, the firm may defer to ISS recommendations,
abstain or vote in a manner that the firm, in consultation with the General
Counsel, believes to be in the best interest of the client.
▪If
the aforementioned options would not address or ameliorate the conflict or
potential conflict, then the firm may abstain from voting, as described
below.
Abstention
In
recognition of its fiduciary obligations, the firm generally endeavors to vote
the proxies it receives. However, the firm may abstain from voting proxies in
certain circumstances. For example, the firm may determine that abstaining from
voting is appropriate if voting is not in the best interest of the client. In
addition to abstentions due to material conflicts of interest, situations in
which we would not vote proxies might include:
▪Circumstances
where the cost of voting the proxy exceeds the expected benefits to the
client
▪Circumstances
where there are significant impediments to an efficient voting process,
including with respect to non-US issuers where the vote requires translations or
other burdensome conditions
▪Circumstances
where the vote would not reasonably be expected to have a material effect on the
value of the client’s investment.
Client-Specific
Guidelines
From
time to time, clients may prefer to elect alternative voting guidelines in cases
where the guidelines previously outlined in this document do not align with the
client’s investment or value objectives. The firm seeks to provide clients with
the opportunity to have proxies voted in line with their values and objectives.
Where a client desires to elect alternative voting guidelines, the firm will
work with the client and ISS to identify appropriate alternative voting
guidelines. Where no appropriate pre-defined alternative guidelines are
available, the firm will endeavor to work with the client to define and set up
guidelines to vote proxies on a case-by-case basis. If the firm has not
previously implemented the alternative guidelines, members of the firm’s proxy
voting committee will review the policy to ensure alignment with our fiduciary
duty. The firm may recommend a departure from specific aspects of the selected
policy’s guidelines when it deems such a departure to be in the client’s best
interest.
The
views expressed are those of the author and Brown Advisory as of the date
referenced and are subject to change at any time based on market or other
conditions. These views are not intended to be and should not be relied upon as
investment advice and are not intended to be a forecast of future events or a
guarantee of future results. Past performance is not a guarantee of future
performance and you may not get back the amount invested.
The
information provided in this material is not intended to be and should not be
considered to be a recommendation or suggestion to engage in or refrain from a
particular course of action or to make or hold a particular investment or pursue
a particular investment strategy, including whether or not to buy, sell, or hold
any of the securities mentioned. It should not be assumed that investments in
such securities have been or will be profitable. To the extent specific
securities are mentioned, they have been selected by the author on an objective
basis to illustrate views expressed in the commentary and do not represent all
of the securities purchased, sold or recommended for advisory clients. The
information contained herein has been prepared from sources believed reliable
but is not guaranteed by us as to its timeliness or accuracy, and is not a
complete summary or statement of all available data. This piece is intended
solely for our clients and prospective clients, is for informational purposes
only, and is not individually tailored for or directed to any particular client
or prospective client.
ESG
considerations that are material will vary by investment style, sector/industry,
market trends and client objectives. ESG strategies seek to identify companies
that they believe may have desirable ESG outcomes, but investors may differ in
their views of what constitutes positive or negative ESG outcomes. As a result,
the strategies may invest in companies that do not reflect the beliefs and
values of any particular investor. The strategies may also invest in companies
that would otherwise be screened out of other ESG oriented funds. Security
selection will be impacted by the combined focus on ESG assessments and
forecasts of return and risk.
The
strategies intend to invest in companies with measurable ESG outcomes, as
determined by Brown Advisory, and seeks to screen out particular companies and
industries. Brown Advisory relies on third parties to provide data and screening
tools. There is no assurance that this information will be accurate or complete
or that it will properly exclude all applicable securities. Investments selected
using these tools may perform differently than as forecasted due to the factors
incorporated into the screening process, changes from historical trends, and
issues in the construction and implementation of the screens (including, but not
limited to, software issues and other technological issues). There is no
guarantee that Brown Advisory’s use of these tools will result in effective
investment decisions.
www.brownadvisory.com
CAUSEWAY
CAPITAL MANAGEMENT LLC
Proxy
Voting Policies and Procedures
June
30, 2021
Overview
As
an investment adviser with fiduciary responsibilities to its clients, Causeway
Capital Management LLC (“Causeway”) votes the proxies of companies owned by
investment vehicles managed and sponsored by Causeway, and institutional and
private clients who have granted Causeway such voting authority. Causeway has
adopted these Proxy Voting Policies and Procedures to govern how it performs and
documents its fiduciary duty regarding the voting of proxies.
Proxies
are voted solely in what Causeway believes is the best interests of the client,
a fund’s shareholders or, where employee benefit assets are involved, plan
participants and beneficiaries (collectively “clients”). Causeway’s intent is to
vote proxies, wherever possible to do so, in a manner consistent with its
fiduciary obligations. Practicalities involved in international investing may
make it impossible at times, and at other times disadvantageous, to vote proxies
in every instance.
The
Chief Operating Officer of Causeway supervises the proxy voting process. Proxy
voting staff monitor upcoming proxy votes, review proxy research, identify
potential conflicts of interest and escalate such issues to the Chief Operating
Officer, receive input from portfolio managers, and ultimately submit proxy
votes in accordance with these Proxy Voting Policies and Procedures. The Chief
Operating Officer and President have final decision-making authority over
case-by-case votes. To assist in fulfilling its responsibility for voting
proxies, Causeway currently uses Institutional Shareholder Services Inc. (“ISS”)
for proxy research, which assists the decision-making process, and for proxy
voting services, which include organizing and tracking pending proxies,
communicating voting decisions to custodian banks, and maintaining records.
Causeway will conduct periodic due diligence on ISS and its capacity and
competency to provide proxy research and the proxy voting services provided to
Causeway.
Proxy
Voting Guidelines
Causeway
generally votes on specific matters in accordance with the proxy voting
guidelines set forth below. However, Causeway reserves the right to vote proxies
on behalf of clients on a case-by-case basis if the facts and circumstances so
warrant.
Causeway’s
proxy voting guidelines are designed to cast votes consistent with certain basic
principles: (i) increasing shareholder value; (ii) maintaining or increasing
shareholder influence over the board of directors and management; (iii)
establishing and enhancing strong and independent boards of directors; (iv)
maintaining or increasing the rights of shareholders; and (v) aligning the
interests of management and employees with those of shareholders with a view
toward the reasonableness of executive compensation and shareholder dilution.
Causeway’s guidelines also recognize that a company’s management is charged with
day-to-day operations and, therefore, Causeway generally votes on routine
business matters in favor of management’s proposals or positions.
Causeway
generally votes for:
•distributions
of income
•appointment
of auditors
•director
compensation, unless deemed excessive
•boards
of directors – Causeway generally votes for management’s slate of director
nominees. However, it votes against incumbent nominees with poor attendance
records, or who have otherwise acted in a manner Causeway believes is not in the
best interests of shareholders. Causeway recognizes that, in certain
jurisdictions, local law or regulation may influence Board
composition.
•financial
results/director and auditor reports
•share
repurchase plans
•changing
corporate names and other similar matters
Causeway
generally votes the following matters on a case-by-case
basis:
•amendments
to articles of association or other governing documents
•changes
in board or corporate governance structure
•changes
in authorized capital including proposals to issue shares
•compensation
– Causeway believes that it is important that a company’s equity-based
compensation plans, including stock option or restricted stock plans, are
aligned with the interests of shareholders, including Causeway’s clients, and
focus on observable long-term returns. Causeway evaluates compensation plans on
a case-by-case basis, with due consideration of potential consequences of a
particular compensation plan. Causeway generally opposes packages that it
believes provide excessive awards or create excessive shareholder dilution.
Causeway generally opposes proposals to reprice options because the underlying
stock has fallen in value.
•social
and environmental issues – Causeway believes that it is generally management's
responsibility to address such issues within the context of increasing long-term
shareholder value. To the extent that management's position on a social or
environmental issue is inconsistent with increasing long-term shareholder value,
Causeway may vote against management or abstain. Causeway may also seek to
engage in longer-term dialogue with management on these issues, either
separately or in connection with proxy votes on the issue.
•debt
issuance requests
•mergers,
acquisitions and other corporate reorganizations or restructurings
•changes
in state or country of incorporation
•related
party transactions
Causeway
generally votes against:
•anti-takeover
mechanisms – Causeway generally opposes anti-takeover mechanisms including
poison pills, unequal voting rights plans, staggered boards, provisions
requiring supermajority approval of a merger and other matters that are designed
to limit the ability of shareholders to approve merger
transactions.
Conflicts
of Interest
Causeway’s
interests may, in certain proxy voting situations, be in conflict with the
interests of clients. Causeway may have a conflict if a company that is
soliciting a proxy is a client of Causeway or is a major business partner or
vendor for Causeway. Causeway may also have a conflict if Causeway personnel
have significant business or personal relationships with participants in proxy
contests, corporate directors or director candidates.
The
Chief Operating Officer determines the issuers with which Causeway may have a
significant business relationship. For this purpose, a “significant business
relationship” is one that: (1) represents 1.5% or more of Causeway’s prior
calendar year gross revenues; (2) represents $2,000,000 or more in payments from
a sponsored vehicle during the prior calendar year; or (3) may not directly
involve revenue to Causeway or payments from its sponsored vehicles, but is
otherwise determined by the Chief Operating Officer to be significant to
Causeway or its affiliates or sponsored vehicles, such as a primary service
provider of a fund or vehicle managed and sponsored by Causeway, or a
significant relationship with the company that might create an incentive for
Causeway to vote in favor of management.
The
Chief Operating Officer will identify issuers with which Causeway’s employees
who are involved in the proxy voting process may have a significant personal or
family relationship. For this purpose, a “significant personal or family
relationship” is one that would be reasonably likely to influence how Causeway
votes proxies.
Proxy
voting staff will seek to identify potential conflicts of interest in the first
instance and escalate relevant information to the Chief Operating Officer. The
Chief Operating Officer will reasonably investigate information relating to
conflicts of interest. For purposes of identifying conflicts under this policy,
the Chief Operating Officer will rely on publicly available information about
Causeway and its affiliates, information about Causeway and its affiliates that
is generally known by Causeway’s employees, and other information actually known
by the Chief Operating Officer. Absent actual knowledge, the Chief Operating
Officer is not required to investigate possible conflicts involving Causeway
where the information is (i) non-public, (ii) subject to information blocking
procedures, or (iii) otherwise not readily available to the Chief Operating
Officer.
Proxy
voting staff will maintain a list of issuers with which there may be a conflict
and will monitor for potential conflicts of interest on an ongoing
basis.
Proxy
proposals that are “routine,” such as uncontested elections of directors or
those not subject to a vote withholding campaign, meeting formalities, and
approvals of annual reports/financial statements are presumed not to involve
material conflicts of interest. For non-routine proposals, the Chief Operating
Officer in consultation with Causeway’s General Counsel/Chief Compliance Officer
decides if they involve a material conflict of interest.
If
a proposal is determined to involve a material conflict of interest, Causeway
may, but is not required to, obtain instructions from the client on how to vote
the proxy or obtain the client’s consent for Causeway’s vote. If Causeway does
not seek the client’s instructions or consent, Causeway will vote as
follows:
•If
a “for” or “against” or “with management” guideline applies to the proposal,
Causeway will vote in accordance with that guideline.
•If
a “for” or “against” or “with management” guideline does not apply to the
proposal, Causeway will follow the recommendation of an independent third party
such as ISS. If Causeway seeks to follow the recommendation of a third party,
the Chief Operating Officer will assess the third party’s capacity and
competency to analyze the issue, as well as the third party’s ability to
identify and address conflicts of interest it may have with respect to the
recommendation.
To
monitor potential conflicts of interest regarding the research and
recommendations of independent third parties, such as ISS, proxy voting staff
will review the third party’s disclosures of significant relationships. The
Chief Operating Officer will review proxy votes involving issuers where a
significant relationship has been identified by the proxy research provider.
Practical
Limitations Relating to Proxy Voting
While
the proxy voting process is well established in the United States and other
developed markets with numerous tools and services available to assist an
investment manager, voting proxies of non-US companies located in certain
jurisdictions may involve a number of problems that may restrict or prevent
Causeway’s ability to vote such proxies. These problems include, but are not
limited to: (i) proxy statements and ballots being written in a language other
than English; (ii) untimely and/or inadequate notice of shareholder meetings
relative to deadlines required to submit votes; (iii) restrictions on the
ability of holders outside the issuer’s jurisdiction of organization to exercise
votes; (iv) requirements to vote proxies in person; (v) restrictions on the sale
of the securities for a period of time prior to the shareholder meeting; and
(vi) requirements to provide local agents with powers of attorney (which
Causeway will typically rely on clients to maintain) to facilitate Causeway’s
voting instructions. As a result, Causeway will only use its best efforts to
vote clients’ non-US proxies and Causeway may decide not to vote a proxy if it
determines that it would be impractical or disadvantageous to do
so.
In
addition, regarding US and non-US companies, Causeway will not vote proxies if
it does not receive adequate information from the client’s custodian in
sufficient time to cast the vote.
For
clients with securities lending programs, Causeway may not be able to vote
proxies for securities that a client has loaned to a third party. Causeway
recognizes that clients manage their own securities lending programs. Causeway
may, but is not obligated to, notify a client that Causeway is being prevented
from voting a proxy due to the securities being on loan. There can be no
assurance that such notice will be received in time for the client, if it so
chooses, to recall the security.
EAGLE
ASSET MANAGEMENT, INC.
Proxy
Voting Guidelines
March
2023
|
| |
Table
of Contents |
|
Part
I: POLICY AND PROCEDURES |
|
Guiding
Principles |
The
Proxy Voting Process Implementation |
Conflicts
of Interest |
|
Part
II: EAM PROXY VOTING GUIDELINES SUMMARY |
|
U.S.
Proxy Items |
Non-U.S.
Proxy Items |
Eagle
Asset Management, Inc.
Eagle
Asset Management, Inc.
(Collectively
“EAM”)
POLICY
AND PROCEDURES ON PROXY VOTING
FOR
INVESTMENT ADVISORY CLIENTS
|
| |
Part
I: POLICY AND PROCEDURES |
Guiding
Principles
Proxy
voting and the analysis of corporate governance issues in general are important
elements of the portfolio management services we provide to our advisory clients
who have authorized us to address these matters on their behalf. Our guiding
principles in performing proxy voting are to make decisions that favor
proposals, which in EAM’s view, maximize a company’s shareholder value and are
not influenced by conflicts of interest. These principles reflect EAM’s belief
that sound corporate governance will create a framework within which a company
can be managed in the interests of its shareholders.
EAM
has adopted the policies and procedures set out below regarding the voting of
proxies (the “Policy”). EAM periodically reviews this Policy, in conjunction
with the parent company Raymond James Investment Management Stewardship
committee, to ensure it continues to be consistent with our guiding principles.
The
Proxy Voting Process Public Equity
Investments
To
implement these guiding principles for investments in publicly traded equities
for which we have voting power on any record date, we follow customized proxy
voting guidelines that have been developed by EAM portfolio management (the “EAM
Guidelines”). The EAM Guidelines embody the positions and factors EAM considers
important in casting proxy votes. They address a wide variety of individual
topics, including, among other matters, shareholder voting rights, anti-takeover
defenses, board structures, the election of directors, executive and director
compensation, reorganizations, mergers, issues of corporate social
responsibility and various shareholder proposals. Recognizing the complexity and
fact-specific nature of many corporate governance issues, the EAM Guidelines
identify factors we consider in determining how the vote should be cast. A
summary of the EAM Guidelines is enclosed as Part II.
The
principles and positions reflected in this Policy are designed to guide us in
voting proxies, and not necessarily in making investment decisions. EAM
portfolio management teams (each a “Portfolio Management Team”) base their
determinations of whether to invest in a particular company on a variety of
factors, and while corporate governance may be one such factor, it may not be
the primary consideration.
Implementation
EAM
has retained a third-party proxy voting service (the “Proxy Service”) to assist
in the implementation of certain proxy voting-related functions, including,
without limitation, operational, recordkeeping and reporting services. The Proxy
Service transmits votes for each proxy based upon the application of the EAM
Guidelines to the particular proxy issues. EAM retains the responsibility for
proxy voting decisions. All proxy votes are done so on a best efforts basis.
Clients
of EAM may retain their voting rights; delegate the responsibility to EAM or to
a third party of their choosing. In certain instances, EAM may still be required
to transmit vote proxies for those custodians who do not have a relationship
with the Proxy Service.
EAM’s
Portfolio Management Teams generally cast proxy votes consistently with the EAM
Guidelines. On certain proxy votes, each Portfolio Management Team may diverge
from the EAM Guidelines based on new information, but bearing in mind that the
override decisions are not influenced by any conflict of interest. Because of
the override process, different Portfolio Management Teams may vote differently
for particular votes for the same company.
From
time to time, EAM’s ability to vote proxies may be affected by regulatory
requirements and compliance, legal or logistical considerations. As a result,
EAM, from time to time, may determine that it is not practicable or desirable to
vote proxies.
Eagle
Asset Management, Inc.
Conflicts
of Interest
In
instances when a Portfolio Management Team is interested in voting in a manner
that diverges from the initial Recommendation based on the EAM Guidelines, EAM
has implemented processes designed to prevent conflicts of interest from
influencing its proxy voting decisions. These processes include information
barriers, the use of the EAM Guidelines and the override review described above.
|
| |
Part
II: EAM PROXY VOTING GUIDELINES SUMMARY |
The
following is a summary of the material EAM Proxy Voting Guidelines (the
“Guidelines”), which form the substantive basis of EAM’s Policy and Procedures
on Proxy Voting for Investment Advisory Clients (the “Policy”). As described in
the main body of the Policy, one or more EAM Portfolio Management Teams may
diverge from the Guidelines and a related Recommendation on any particular proxy
vote or in connection with any individual investment decision in accordance with
the Policy.
U.S.
Proxy Items
The
EAM proxy voting guidelines will be based on the ISS Benchmark Policy (US), with
the following customization:
◦All
shareholder proposals will be voted Case-By-Case (“REFER”).
◦Advisory
Vote on Executive Compensation (“Say on Pay”) will go to Case-By-Case (“REFER”)
in the event ISS has an “AGAINST” recommendation.
◦Restructuring
proposals, including M&A activity, bankruptcy, etc. will be voted
Case-By-Case (“REFER”).
◦Special
Meetings will be voted Case-By-Case (“REFER”).
◦Vote(s)
for director(s) will go to Case-By-Case (“REFER”) in the event ISS recommends
WITHHOLD votes.
All
Case-By-Case (“REFER”) votes would go to chair of Stewardship Committee who
would then convene a meeting with portfolio managers involved for discussion and
vote.
Unified
EAM guidelines as well as any updates to the ISS Benchmark Policy (US) will be
reviewed by the Stewardship Committee at least annually.
Non-U.S
Proxy Items
For
international holdings, ISS country-specific benchmark guidelines will be
used.
Eagle
Asset Management, Inc.
EMERALD
ADVISERS, LLC.
EMERALD
MUTUAL FUND ADVISERS TRUST
EMERALD
SEPARATE ACCOUNT MANAGEMENT
PROXY
VOTING POLICY
The
voting policies set forth below apply to all proxies which Emerald Advisers,
LLC. and subsidiaries are entitled to vote. It is Emerald’s policy to vote all
such proxies. Corporate governance through the proxy process is solely concerned
with the accountability and responsibility for the assets entrusted to
corporations. The role of institutional investors in the governance process is
the same as the responsibility due all other aspects of the fund’s management.
First and foremost, the investor is a fiduciary and secondly, an owner.
Fiduciaries and owners are responsible
for their investments. These responsibilities include:
1)selecting
proper directors
2)insuring
that these directors have properly supervised management
3)resolve
issues of natural conflict between shareholders and managers
a.Compensation
b.Corporate
Expansion
c.Dividend
Policy
d.Free
Cash Flow
e.Various
Restrictive Corporate Governance Issues, Control Issues, etc.
f.Preserving
Integrity
In
voting proxies, Emerald will consider those factors which would affect the value
of the investment and vote in the manner, which in its view, will best serve the
economic interest of its clients. Consistent with this objective, Emerald will
exercise its vote in a activist pro-shareholder manner in accordance with the
following policies.
I.
BOARDS OF DIRECTORS
In
theory, the board represents shareholders, in practice, all too often Board
members are selected by management. Their allegiance is therefore owed to
management in order to maintain their very favorable retainers and prestigious
position. In some cases, corporations never had a nominating process, let alone
criteria for the selection of Board members. Shareholders have begun to focus on
the importance of the independence of the Board of Directors and the nominating
process for electing these Board members. Independence is an important criterium
to adequately protect shareholders’ ongoing financial interest and to properly
conduct a board member’s oversight process. Independence though, is only the
first criteria for a Board. Boards need to be responsible fiduciaries in their
oversight and decision making on behalf of the owners and corporations. Too many
companies are really ownerless.
Boards who have failed to perform their duties, or do not act in the best
interests of the shareholders should be voted out. A clear message is sent when
a no confidence vote is given to a set of directors or to a full
Board.
A.Election
of Directors,
a Board of Directors, or any number of Directors. In order to assure Boards are
acting solely for the shareholders they represent, the following resolutions
will provide a clear message to underperforming companies and Boards who have
failed to fulfill duties assigned to them.
•Votes
should be cast in favor of shareholder proposals asking that boards be comprised
of a majority of outside directors.
•
Votes should be cast in favor of shareholder proposals asking that board audit,
compensation and nominating committees be comprised exclusively of outside
directors.
•Votes
should be cast against management proposals to re-elect the board if the board
has a majority of inside directors.
•Votes
should be withheld for directors who may have an inherent conflict of interest
by virtue of receiving consulting fees from a corporation (affiliated
outsiders).
•Votes
should be withheld, on a case by case basis, for those directors of the
compensation committees responsible for particularly egregious compensation
plans.
•Votes
should be withheld for directors who have failed to attend 75% of board or
committee meetings in cases where management does not provide adequate
explanation for the absences.
•Votes
should be withheld for incumbent directors of poor performing companies;
defining poor performing companies as those companies who have below average
stock performance (vs. peer group/Wilshire 5000) and below average return on
assets and operating margins.
•Votes
should be cast in favor of proposals to create shareholder advisory committees.
These committees will represent shareholders’ views, review management, and
provide oversight of the board and their directors.
B.Board
Diversity:
Emerald will generally support and votes should be cast
in favor of proposals requiring diversity among a company’s Board of Directors.
Using NASDAQ’s proposed rule 560(f)(2) as a guide, a diverse board should have
two or more directors who self-identify as: (i) Female, (ii) an Underrepresented
Minority, or (iii) LGBTQ+. Emerald will generally support and votes should be
cast in favor of proposals seeking an explanation why a company does not meet
this requirement.
•For
purposes of this section I.B, the following terms shall have the following
meanings: “Female” shall mean an individual who self-identifies her gender as a
woman, without regard to the individual’s designated sex at birth.
“Underrepresented Minority” shall mean an individual who self-identifies as one
or more of the following: Black or African American, Hispanic or Latinx, Asian,
Native American or Alaska Native, Native Hawaiian or Pacific Islander, or two or
more races or ethnicities. “LGBTQ+” shall mean an individual who self-identifies
as any of the following: lesbian, gay, bisexual, transgender or a member of the
queer community.
C.Selection
of Accountants:
Emerald will generally support a rotation of accountants to provide a truly
independent audit. This rotation should generally occur every 4-5
years.
D.Incentive
Stock Plans.
Emerald will generally vote against all excessive compensation and incentive
stock plans which are not performance related.
E.Corporate
restructuring plans
or company name changes, will generally be evaluated on a case by case
basis.
F.Annual
Meeting Location. This
topic normally is brought forward by minority shareholders, requesting
management to hold the annual meeting somewhere other than where management
desires. Resolution.
Emerald normally votes with management, except in those cases where management
seeks a location to avoid their shareholders.
G.Preemptive
Rights.
This is usually a shareholder request enabling shareholders to participate first
in any new offering of common stock. Resolution:
We do not feel that preemptive rights would add value to shareholders, we would
vote against such shareholder proposals.
H.Mergers
and/or Acquisitions.
Each merger and/or acquisition has numerous ramifications for long term
shareholder value. Resolution:
After in-depth valuation Emerald will vote its shares on a case by case
basis.
II.
CORPORATE
GOVERNANCE ISSUES
These
issues include those areas where voting with management may not be in the best
interest of the institutional investor. All proposals should be examined on a
case by case basis.
A.Provisions
Restricting Shareholder Rights.
These provisions would hamper shareholders ability to vote on certain corporate
actions, such as changes in the bylaws, greenmail, poison pills,
recapitalization plans, golden parachutes, and on any item that would limit
shareholders’ right to nominate, elect, or remove directors. These items can
change the course of the corporation overnight and shareholders should have the
right to vote on these critical issues. Resolution:
Vote
Against
management proposals to implement such restrictions and vote For
shareholder proposals to eliminate them.
B.Anti-Shareholder
Measures.
These are measures designed to entrench management so as to make it more
difficult to effect a change in control of the corporation. They are normally
not in the best interests of shareholders since they do not allow for the most
productive use of corporate assets.
1.
Classification of the Board of Directors:
A
classified Board is one in which directors are not elected in the same year
rather their terms of office are staggered. This eliminates the possibility of
removing entrenched management at any one annual election of directors.
Resolution:
Vote
Against
proposals to classify the Board and support proposals (usually shareholder
initiated) to implement annual election of the Board.
2.
Shareholder Rights Plans (Poison Pills):
Anti-acquisition
proposals of this sort come in a variety of forms. In general, issuers confer
contingent benefits of some kind on their common stockholders. The most
frequently used benefit is the right to buy shares at discount prices in the
event of defined changes in corporate control. Resolution:
Vote
Against
proposals to adopt Shareholder Rights Plans, and vote For
Shareholder proposals eliminating such plans.
3.
Unequal Voting Rights:
A
takeover defense, also known as superstock, which gives holders disproportionate
voting rights. Emerald adheres to the One Share, One Vote philosophy, as all
holders of common equity must be treated fairly and equally. Resolution:
Vote
Against
proposals creating different classes of stock with unequal voting
privileges.
4.
Supermajority Clauses:
These
are implemented by management requiring that an overly large amount of
shareholders (66-95% of shareholders rather than a simple majority) approve
business combinations or mergers, or other measures affecting control. This is
another way for management to make changes in control of the company more
difficult. Resolution:
Vote
Against
management proposals to implement supermajority clauses and support shareholder
proposals to eliminate them.
5.
Fair Price Provisions:
These
provisions allow management to set price requirements that a potential bidder
would need to satisfy in order to consummate a merger. The pricing formulas
normally used are so high that the provision makes any tender offer
prohibitively expensive. Therefore, their existence can foreclose the
possibility of tender offers and hence, the opportunity to secure premium prices
for holdings. Resolution:
Vote
Against
management proposals to implement fair price provisions and vote For
shareholder proposals to eliminate them.
Caveat:
Certain fair price provisions are legally complex and require careful analysis
and advice before concluding whether or not their adoption would serve
stockholder interest.
6.
Increases in authorized shares and/or creation of new classes of common and
preferred stock:
a.Increasing
authorized shares.
Emerald
will support management if they have a stated purpose for increasing the
authorized number of common and preferred stock. Under normal circumstances,
this would include stock splits, stock dividends, stock option plans, and for
additional financing needs. However, in certain circumstances, it is apparent
that management is proposing these increases as an anti-takeover measure. When
used in this manner, share increases could inhibit or discourage stock
acquisitions by a potential buyer, thereby negatively affecting a fair price
valuation for the company.
Resolution:
On
a case by case basis, vote Against
management if they attempt to increase the amount of shares that they are
authorized to issue if their intention is to use the excess shares to discourage
a beneficial business combination. One way to determine if management intends to
abuse its right to issue shares is if the amount of authorized shares requested
is double the present amount of authorized shares.
b.Creation
of new classes of stock.
Managements
have proposed authorizing shares of new classes of stock, usually preferreds,
which the Board would be able to issue at their discretion. The Board would also
be granted the discretion to determine the dividend rate, voting privileges,
redemption provisions, conversion rights, etc. without approval of the
shareholders. These “blank check” issues are designed specifically to inhibit a
takeover, merger, or accountability to its shareholders.
Resolution:
Emerald
would vote AGAINST management in allowing the Board the discretion to issue any
type of “blank check” stock without shareholder approval.
c.Directors
and Management Liability and Indemnification.
These
proposals are a result of the increasing cost of insuring directors and top
management against lawsuits. Generally, managements propose that the liability
of directors and management be either eliminated or limited. Shareholders must
have some recourse for losses that are caused by negligence on the part of
directors and management. Therefore directors and management should be
responsible for their fiduciary duty of care towards the company. The Duty of
Care is defined as the obligation of directors and management to be diligent in
considering a transaction or in taking or refusing to take a corporate
action.
Resolution:
On
a case by case basis, Emerald votes Against
attempts by management to eliminate directors and management liability for their
duty of care.
d.Compensation
Plans (Incentive Plans)
Management
occasionally will propose to adopt an incentive plan which will become effective
in the event of a takeover or merger. These plans are commonly known as “golden
parachutes” or “tin parachutes” as they are specifically designed to grossly or
unduly benefit a select few in management who would most likely lose their jobs
in an acquisition. Shareholders should be allowed to vote on all plans of this
type.
Resolution:
On
a case by case basis, vote Against
attempts by management to adopt proposals that are specifically designed to
grossly or unduly benefit members of executive management in the event of an
acquisition.
e.Greenmail
Emerald
would not support management in the payment of greenmail.
Resolution:
Emerald
would vote FOR
any shareholder resolution that would eliminate the possibility of the payment
of greenmail.
f.Cumulative
Voting
Cumulative
voting entitles stockholders to as many votes as equal the number of shares they
own multiplied by the number of directors being elected. According to this set
of rules, a shareholder can cast all votes towards a single director, or any two
or more. This is a proposal usually made by a minority shareholder seeking to
elect a director to the Board who sympathizes with a special interest. It also
can be used by management that owns a large percentage of the company to ensure
that their appointed directors are elected.
Resolution:
Cumulative
voting tends to serve special interests and not those of shareholders, therefore
Emerald will vote Against
any proposals establishing cumulative voting and For
any proposal to eliminate it.
g.Proposals
Designed to Discourage Mergers & Acquisitions In Advance
These
provisions direct Board members to weigh socioeconomic and legal as well as
financial factors when evaluating takeover bids. This catchall apparently means
that the perceived interests of customers, suppliers, managers, etc., would have
to be considered along with those of the shareholder. These proposals may be
worded: “amendments to instruct the Board to consider certain factors when
evaluating an acquisition proposal”. Directors are elected primarily to promote
and protect the shareholder interests. Directors should not allow other
considerations to dilute or deviate from those interests. Resolution:
Emerald
will vote Against
proposals that would discourage the most productive use of corporate assets in
advance.
h.Confidential
Voting
A
company that does not have a ballot provision has the ability to see the proxy
votes before the annual meeting. In this way, management is able to know before
the final outcome how their proposals are being accepted. If a proposal is not
going their way, management has the ability to call shareholders to attempt to
convince them to change their votes. Elections should take place in normal
democratic process which includes the secret ballot. Elections without the
secret ballot can lead to coercion of shareholders, employees, and other
corporate partners. Resolution:
Vote
For
proposals to establish secret ballot voting.
i.Disclosure
Resolution:
Emerald
will vote Against
proposals that would require any kind of unnecessary disclosure of business
records. Emerald will vote For
proposals that require disclosure of records concerning unfair labor practices
or records dealing with the public safety.
j.Sweeteners
Resolution:
Emerald
will vote Against
proposals that include what are called “sweeteners” used to entice shareholders
to vote for a proposal that includes other items that may not be in the
shareholders best interest. For instance, including a stock split in the same
proposal as a classified Board, or declaring an extraordinary dividend in the
same proposal installing a shareholders rights plan (Poison Pill).
k.Changing
the State of Incorporation
If
management sets forth a proposal to change the State of Incorporation, the
reason for change is usually to take advantage of another state’s liberal
corporation laws, especially regarding mergers, takeovers, and anti-shareholder
measures. Many companies view the redomestication in another jurisdiction as an
opportune time to put new anti-shareholder measures on the books or to purge
their charter and bylaws of inconvenient shareholder rights, written consent,
cumulative voting, etc. Resolution:
On
a case-by-case basis, Emerald will vote Against
proposals changing the State of Incorporation for the purpose of their
anti-shareholder provisions and will support shareholder proposals calling for
reincorporation into a jurisdiction more favorable to shareholder
democracy.
l.Equal
Access to Proxy Statements
Emerald
supports stockholders right to equal access to the proxy statement, in the same
manner that management has access. Stockholders are the owners of a corporation
and should not be bound by timing deadlines and other obstacles that presently
shareholders must abide by in sponsoring proposals in a proxy statement. The
Board should not have the ability to arbitrarily prevent a shareholder proposal
from appearing in the proxy statement. Resolution:
Emerald
will support any proposal calling for equal access to proxy
statements.
m.Abstention
Votes
Emerald
supports changes in the method of accounting for abstention votes. Abstention
votes should not
be considered as shares “represented” or “cast” at an annual meeting. Only those
shares cast favoring
or opposing
a proposal should be included in the total votes cast to determine if a majority
vote has been achieved. Votes cast abstaining should not be included in total
votes cast. Resolution:
Emerald
will support any proposal to change a company’s by-laws or articles of
incorporation to reflect the proper accounting for abstention
votes.
III.
Other Issues
On
other major issues involving questions of community interest, moral and social
concern, fiduciary trust and respect for the law such as:
A.Human
Rights
B.Nuclear
Issues
C.Defense
Issues
D.Social
Responsibility
Emerald,
in general supports the position of management. Exceptions to this policy
Include:
1.South
Africa
Emerald
will actively encourage those corporations that have South African interests to
adopt and adhere to the Statement of Principles for South Africa, formerly known
as the Sullivan Principles, and to take further actions to promote responsible
corporate activity.
2.Northern
Ireland
Emerald
will actively encourage U.S. companies in Northern Ireland to adopt and adhere
to the MacBride Principles, and to take further actions to promote responsible
corporate activity.
IV.
Other Potential Conflicts of Interest
Emerald
may manage a variety of corporate accounts that are publicly traded.
GRANTHAM,
MAYO, VAN OTTERLOO & CO. LLC (“GMO”)
Proxy
Voting Policy
Adoption:
August 6, 2003
Last
Revision: January 10, 2022
GMO
LLC and related entities1
(collectively,
“GMO”)
I.Statement
of Policy
Proxy
voting is an important right of shareholders and reasonable care and diligence
must be undertaken to seek to ensure that such rights are properly and timely
exercised. Grantham, Mayo, Van Otterloo & Co. LLC (“GMO”) manages a variety
of products and GMO’s proxy voting authority may vary depending on the type of
product or specific client preferences. GMO retains full proxy voting discretion
for accounts comprised of comingled client assets. However, GMO’s proxy voting
authority may vary for accounts that GMO manages on behalf of individual
clients. These clients may retain full proxy voting authority for themselves,
grant GMO full discretion to vote proxies on their behalf, or provide GMO with
proxy voting authority along with specific instructions and/or custom proxy
voting guidelines. Where GMO has been granted discretion to vote proxies on
behalf of managed account clients this authority must be explicitly defined in
the relevant Investment Management Agreement, or other document governing the
relationship between GMO and the client.
In
exercising its proxy voting authority, GMO is mindful of the fact that the value
of proxy voting to a client’s investments may vary depending on the nature of an
individual voting matter and the strategy in which a client is invested. Some
GMO strategies follow a systematic, research- driven investment approach,
applying quantitative tools to process fundamental information and manage risk.
Some proxy votes may have heightened value for certain clients, such as votes on
corporate events (e.g., mergers and acquisitions, dissolutions, conversions, or
consolidations) for those clients invested in GMO strategies involving the
purchase of securities around corporate events. These differences may result in
varying levels of GMO engagement in proxy votes, but in all cases where GMO
retains proxy voting authority, it will seek to vote proxies in the best
interest of its clients and in accordance with this Proxy Voting Policy and
Procedures (the “Policy”).
GMO’s
Stewardship and Corporate Leadership Subcommittee, a sub-committee of the GMO
ESG Oversight Committee, is responsible for the implementation of this Policy,
including the oversight and use of third-party proxy advisers, the manner in
which GMO votes its proxies, and fulfilling GMO’s obligation voting proxies in
the best interest of its clients.
II.Use
of Third-Party Proxy Advisors
GMO
has retained an independent third-party Proxy Advisory firm for a variety of
services including, but not limited to, receiving proxy ballots, proxy voting
research and recommendations, and executing votes. GMO may also engage other
Proxy Advisory firms as appropriate for proxy voting research and other
services.
III.Considerations
When Assessing or Considering a Proxy Advisory Firm
When
considering the engagement of a new, or the performance and retention of an
existing, Proxy Advisory firm to provide research, voting recommendations, or
other proxy voting related services, GMO will, as part of its assessment,
consider:
▪The
capacity and competency of the Proxy Advisory firm to adequately analyze the
matters up for a vote;
▪The
ability of the Proxy Advisory firm to provide information supporting its
recommendations in a timely manner;
▪The
ability of the Proxy Advisory firm to respond to ad hoc requests from
GMO;
▪Whether
the Proxy Advisory firm has an effective process for obtaining current and
accurate information including from issuers and clients (e.g., engagement with
issuers, efforts to correct deficiencies, disclosure about sources of
information and methodologies, etc.);
1
Grantham,
Mayo,
Van
Otterloo
&
Co.
LLC,
GMO
Australia
Limited,
and
GMO Singapore
Pte.
Ltd.
▪How
the Proxy Advisory firm incorporates appropriate input in formulating its
methodologies and construction of issuer peer groups, including unique
characteristics regarding an issuer;
▪Whether
the Proxy Advisory firm has adequately disclosed its methodologies and
application in formulating specific voting recommendations;
▪The
nature of third-party information sources used as a basis for voting
recommendations;
▪When
and how the Proxy Advisory firm would expect to engage with issuers and other
third parties;
▪Whether
the Proxy Advisory firm has established adequate policies and procedures on how
it identifies, discloses and addresses conflicts of interests that arise from
providing proxy voting recommendations and related services, from activities
other than providing proxy voting recommendations and services, and from Proxy
Advisory firm affiliations;
▪Whether
the Proxy Advisory firm has established adequate diversity and inclusion
practices;
▪Information
regarding any errors, deficiencies, or weaknesses that may materially affect the
Proxy Advisory firm’s research or ultimate recommendation;
▪Whether
the Proxy Advisory firm appropriately and regularly updates methodologies,
guidelines, and recommendations, including in response to feedback from issuers
and their shareholders;
▪Whether
the Proxy Advisory firm adequately discloses any material business changes
taking into account any potential conflicts of interests that may arise from
such changes.
GMO
also undertakes periodic sampling of proxy votes as part of its assessment of a
Proxy Advisory firm and in order to reasonably determine that proxy votes are
being cast on behalf of its clients consistent with this Policy.
IV.Potential
Conflicts of Interest of the Proxy Advisor
GMO
requires any Proxy Advisory firm it engages with to identify and provide
information regarding any material business changes or conflicts of interest on
an ongoing basis. Where a conflict of interest may exist, GMO requires
information on how said conflict is being addressed. If GMO determines that a
material conflict of interest exists and is not sufficiently mitigated, GMO’s
Stewardship and Corporate Leadership Subcommittee will determine whether the
conflict has an impact on the Proxy Advisory firm’s voting recommendations,
research, or other services and determine if any action should be
taken.
V.Voting
Procedures and Approach
In
relation to stocks held in GMO funds and accounts where GMO has proxy voting
discretion, GMO will, as a general rule, seek to vote in accordance with this
Policy and the applicable guidelines GMO has developed to govern voting
recommendations from its Proxy Advisory firm (“GMO Voting Guidelines”). In
instances where a separate account client has provided GMO with specific
instructions and/or custom proxy voting guidelines, GMO will seek to vote
proxies in line with such instructions or custom guidelines.
GMO
may refrain from voting in certain situations unless otherwise agreed to with a
client. These situations include, but are not limited to, when:
1.The
cost of voting a proxy outweighs the benefit of voting;
2.GMO
does not have enough time to process and submit a vote due to the timing of
proxy information transfer or other related logistical or administrative
issues;
3.GMO
has an outstanding sell order or intends to sell the applicable security prior
to the voting date;
4.There
are restrictions on trading resulting from the exercise of a proxy;
5.Voting
would cause an undue burden to GMO (e.g., votes occurring in jurisdictions with
beneficial ownership disclosure and/or Power of Attorney requirements);
or
6.GMO
has agreed with the client in advance of the vote not to vote in certain
situations or on specific issues.
GMO
generally does not notify clients of non-voted proxy ballots.
Some
of GMO’s strategies primarily focus on portfolio management and research related
to macro trading strategies which are implemented through the use of
derivatives. These strategies typically do not hold equity securities with
voting rights.
Grantham,
Mayo,
Van
Otterloo
&
Co.
LLC
("GMO")
VI.Voting
Guidelines
GMO
seeks to vote proxies in a manner that encourages and rewards behavior that
supports the creation of sustainable long‐term growth, and in a way consistent
with the investment mandate of the assets we manage for our clients.
Accordingly, GMO’s Voting Guidelines aim to promote sustainable best practices
in portfolio companies, which includes advocating for environmental protection,
human rights, fair labor, and anti-discrimination practices. When evaluating and
adopting these guidelines and to encourage best sustainability practices, we
take into account generally accepted frameworks such as those defined by the
United Nations Principles for Responsible Investment and United Nations Global
Compact.2
VII.Issuer
Specific Ballot Evaluations
GMO
may review individual ballots (for example, in relation to specific corporate
events such as mergers and acquisitions) using a more detailed analysis than is
generally applied through the GMO Voting Guidelines. This analysis may, but does
not always, result in deviation from the voting recommendation that would result
from the GMO Voting Guidelines assigned to a given GMO fund or managed account.
When determining whether to conduct an issuer-specific analysis, GMO will
consider the potential effect of the vote on the value of the investment. To the
extent that issuer-specific analysis results in a voting recommendation that
deviates from a recommendation produced by the GMO Voting Guidelines, GMO will
be required to vote proxies in a way that, in GMO’s reasonable judgment, is in
the best interest of GMO’s clients.
VIII.Potential
Conflicts of Interest of the Advisor
GMO
mitigates potential conflicts of interest by generally voting in accordance with
the GMO Voting Guidelines and/or specific voting guidelines provided by clients.
However, from time to time, GMO may determine to vote contrary to GMO Voting
Guidelines with respect to GMO funds or accounts for which GMO has voting
discretion, which itself could give rise to potential conflicts of
interest.
In
addition, if GMO is aware that one of the following conditions exists with
respect to a proxy, GMO shall consider such event a potential material conflict
of interest:
1.GMO
has a material business relationship or potential relationship with the
issuer;
2.GMO
has a material business relationship with the proponent of the proxy proposal;
or
3.GMO
members, employees or consultants have a personal or other material business
relationship with the participants in the proxy contest, such as corporate
directors or director candidates.
In
the event of a potential material conflict of interest, GMO will (i) vote such
proxy according to the GMO Voting Guidelines; (ii) seek instructions from the
client or request that the client votes such proxy, or (iii) abstain. All such
instances shall be reported to GMO’s Compliance Department at least
quarterly.
IX.Ballot
Materials and Processing
The
Proxy Advisory firm is responsible for coordinating with GMO’s clients’
custodians to seek to ensure that proxy materials received by custodians
relating to a client’s securities are processed in a timely fashion. Proxies
relating to securities held in client accounts will typically be sent directly
to the Proxy Advisory firm. In the event that proxy materials are sent to GMO
directly instead of the Proxy Advisory firm, GMO will use reasonable efforts to
coordinate with the Proxy Advisory firm for processing.
X.Disclosure
Upon
request, GMO will provide clients with a copy of this Policy and how the
relevant client’s proxies have been voted. In relation to the latter, GMO will
prepare a written response that lists, with respect to each voted
proxy:
1.The
name of the issuer;
2.The
proposal voted upon; and
3.The
election made for the proposal.
2
Attached
as
Appendix
I
is
a
summary
of
key
topics
covered
in
GMO’s
Voting
Guidelines
for
U.S.
companies.
Grantham,
Mayo,
Van
Otterloo
&
Co.
LLC
("GMO")
XI.GMO
Mutual Funds
GMO’s
responsibility and authority to vote proxies on behalf of its clients for shares
of GMO Trust, a family of registered mutual funds for which GMO serves as the
investment adviser, may give rise to conflicts of interest. Accordingly, GMO
will (i) vote such proxies in the best interests of its clients with respect to
routine matters, including proxies relating to the election of Trustees; and
(ii) with respect to matters where a conflict of interest exists between GMO and
GMO Trust, such as proxies relating to a new or amended investment management
contract between GMO Trust and GMO, or a re-organization of a series of GMO
Trust, GMO will either (a) vote such proxies in the same proportion as the votes
cast with respect to that proxy, (b) seek instructions from its clients and vote
on accordance with those instructions, or (c) take such other action as GMO
deems appropriate in consultation with the Trust’s Chief Compliance
Officer.
On
an annual basis, GMO will provide, or cause the Proxy Advisory firm to provide,
to the GMO Trust administrator or other designee on a timely basis, any and all
reports and information necessary to prepare and file Form N-PX, which is
required by Rule 30b1-4 under the Investment Company Act of 1940.
XII.Proxy
Recordkeeping
GMO
and its Proxy Advisory firm (where applicable) will maintain records with
respect to this Policy for a period of no less than five (5) years as required
by SEC Rule 204-2 under the Investment Advisers Act of 1940, including the
following:
1.A
copy of the Policy, and any amendments thereto;
2.A
copy of any document that was material to making a decision how to vote proxies,
or that memorializes that decision; and
3.A
record of each vote cast by GMO or the Proxy Advisory firm on behalf of GMO
clients.
XIII.Review
of Policy and Procedures
As
a general principle, the Stewardship and Corporate Leadership Subcommittee, with
the involvement from the Compliance Department, reviews, on an annual basis, the
adequacy of this Policy to reasonably ensure it has been implemented
effectively, including whether it continues to be reasonably designed to ensure
that GMO’s approach to voting proxies is in the best interests of its
clients.
Grantham,
Mayo,
Van
Otterloo
&
Co.
LLC
("GMO")
APPENDIX
I
Summary
of GMO’s Proxy Voting Guidelines for U.S. Companies
Below
is a summary of the key components of the GMO Proxy Voting Guidelines for U.S.
Companies:
Director
Elections
We
consider the following principles when determining votes on director
nominees:
▪Accountability:
Boards should be sufficiently accountable to shareholders, including through
transparency of the company's governance practices and regular board
elections.
▪Responsiveness:
Directors should respond to investor input, such as that expressed through
significant opposition to management proposals, significant support for
shareholder proposals (whether binding or non-binding), and tender offers where
a majority of shares are tendered.
▪Composition:
Companies should seek directors who can add value to the board through specific
skills or expertise and who can devote sufficient time and commitment to serve
effectively. Boards should be of a size appropriate to accommodate diversity,
expertise, and independence, while ensuring active and collaborative
participation by all members. Boards should be sufficiently diverse to ensure
consideration of a wide range of perspectives.
▪Independence:
Boards should be sufficiently independent from management (and significant
shareholders) so as to ensure that they are able and motivated to effectively
supervise management's performance for the benefit of all shareholders,
including in setting and monitoring the execution of corporate strategy, with
appropriate use of shareholder capital, and in setting and monitoring executive
compensation programs that support that strategy.
Executive
Compensation
▪We
consider the following principles when evaluating executive and director
compensation programs:
▪Maintain
appropriate pay-for-performance alignment, with emphasis on long-term
shareholder value.
▪Avoid
arrangements that risk “pay for failure”
▪Provide
shareholders with clear, comprehensive compensation disclosures
▪Avoid
inappropriate pay to non-executive directors
ESG-Related
Proposals
▪We
generally support standards-based ESG shareholder proposals that enhance
long-term shareholder and stakeholder value while aligning the interests of the
company with those of society at large.
Climate
Change-Related Proposals
▪Vote
for shareholder proposals seeking information on the financial, physical, or
regulatory risks the company faces related to climate change on its operations
and investments, or on how the company identifies, measures, and manage such
risks.
▪Vote
for shareholder proposals calling for the reduction of Green House Gas (“GHG”)
emissions.
▪Vote
for shareholder proposals seeking reports on responses to regulatory and public
pressures surrounding climate change, and for disclosure of research that aided
in setting company policies around climate change.
Energy-Related
Proposals
▪Generally
vote for proposals requesting that a company report on its energy efficiency
policies.
▪Generally
vote for requests for reports on the feasibility of developing renewable energy
resources.
▪Generally
vote for proposals requesting that the company invest in renewable energy
resources.
Grantham,
Mayo,
Van
Otterloo
&
Co.
LLC
("GMO")
Board
Diversity Proposals
▪Generally
vote for requests for reports on a company's efforts to diversify the board,
unless:
▪The
gender and racial minority representation of the company’s board is reasonably
inclusive in relation to companies of similar size and business;
and
▪The
board already reports on its nominating procedures and gender and racial
minority initiatives on the board and within the company.
Gender
Identity, Sexual Orientation, and Domestic Partner Benefits
▪Generally
vote for proposals seeking to amend a company’s Equal Employment Opportunity
(“EEO”) statement or diversity policies to prohibit discrimination based on
sexual orientation and/or gender identity, unless the change would be unduly
burdensome.
▪Generally
vote for proposals to extend company benefits to domestic partners.
Equality
of Opportunity Proposals
▪Generally
vote for proposals requesting a company disclose its diversity policies or
initiatives, or proposals requesting disclosure of a company’s comprehensive
workforce diversity data, including requests for EEO-1 data.
▪Generally
vote for proposals seeking information on the diversity efforts of suppliers and
service providers.
Facility
and Workplace Safety Proposals
▪Vote
case-by-case on resolutions requesting that a company report on safety and/or
security risks associated with its operations and/or facilities,
considering:
–The
company’s compliance with applicable regulations and guidelines;
–The
company’s current level of disclosure regarding its security and safety
policies, procedures, and compliance monitoring; and
–The
existence of recent, significant violations, fines, or controversy regarding the
safety and security of the company’s operations and/or facilities.
Sustainability
Reporting
▪Vote
for shareholder proposals seeking greater disclosure on the company’s
environmental and social practices, and/or associated risks and
liabilities.
▪Vote
for shareholder proposals asking companies to report in accordance with the
Global Reporting Initiative (GRI).
▪Vote
for shareholder proposals to prepare a sustainability report
Water
Issues Sustainability
▪Generally
vote for on proposals requesting a company to report on, or to adopt a new
policy on, water-related risks and concerns, taking into account:
–The
company's current disclosure of relevant policies, initiatives, oversight
mechanisms, and water usage metrics;
–Whether
or not the company's existing water-related policies and practices are
consistent with relevant internationally recognized standards and national/local
regulations;
–The
potential financial impact or risk to the company associated with water-related
concerns or issues; and recent, significant company controversies, fines, or
litigation regarding water use by the company and its suppliers.
Grantham,
Mayo,
Van
Otterloo
&
Co.
LLC
("GMO")
ESG
Compensation-Related Proposals
▪Generally
vote for proposals to link, or report on linking, executive compensation to
environmental and social criteria (such as corporate downsizings, customer or
employee satisfaction, community involvement, human rights, environmental
performance, or predatory lending)
Human
Rights Proposals
▪Generally
vote for proposals requesting a report on company or company supplier labor
and/or human rights standards and policies.
▪Vote
for shareholder proposals to implement human rights standards and workplace
codes of conduct.
▪Vote
for shareholder proposals calling for the implementation and reporting on
international labor standards of the International Labour Organization, SA 8000
Standards, or the Global Sullivan Principles.
▪Vote
for shareholder proposals that call for the adoption and/or enforcement of
principles or codes relating to countries in which there are systematic
violations of human rights.
▪Vote
for shareholder proposals that call for independent monitoring programs in
conjunction with local and respected religious and human rights groups to
monitor supplier and licensee compliance with codes.
▪Vote
for shareholder proposals that seek publication of a “Code of Conduct” to the
company’s foreign suppliers and licensees, requiring they satisfy all applicable
standards and laws protecting employees’ wages, benefits, working conditions,
freedom of association, and other rights.
▪Vote
for shareholder proposals seeking reports on, or the adoption of, vendor
standards including: reporting on incentives to encourage suppliers to raise
standards rather than terminate contracts and providing public disclosure of
contract supplier reviews on a regular basis.
▪Vote
for shareholder proposals to adopt labor standards for foreign and domestic
suppliers to ensure that the company will not do business with foreign suppliers
that manufacture products for sale using forced labor, child labor, or that fail
to comply with applicable laws protecting employee’s wages and working
conditions.
▪Vote
for proposals requesting that a company conduct an assessment of the human
rights risks in its operations or in its supply chain, or report on its human
rights risk assessment process.
Grantham,
Mayo,
Van
Otterloo
&
Co.
LLC
("GMO")
HOTCHKIS
& WILEY
PROXY
POLICY
OUR
MANDATE
Our
primary responsibility is to act as a fiduciary for our clients when voting
proxies. We evaluate and vote each proposed proxy in a manner that encourages
sustainable business practices which in turn maximizes long-term shareholder
value.
There
are instances such as unique client guidelines, regulatory requirements, share
blocking, securities lending, or other technical limitations where we are unable
to vote a particular proxy. In those instances where we do not have voting
responsibility, we will generally forward our recommendation to such person our
client designates.
OUR
PROCESS
Analyst
Role
To
the extent we are asked to vote a client’s proxy, our investment analysts are
given the final authority on how to vote a particular proposal as these
analysts’ understanding of the company makes them the best person to apply our
policy to a particular company’s proxy ballot.
Voting
Resources
To
assist our analysts in their voting, we provide them with a report that compares
the company’s board of directors’ recommendation against H&W’s proxy policy
guideline recommendation and with third-party proxy research (Institutional
Shareholder Services “ISS” sustainability and climate benchmarks) and
third-party ESG analysis (Morgan Stanley Capital International “MSCI”).
Engagement
As
part of our normal due diligence and monitoring of investments, we engage
management, board members, or their representatives on material business issues
including environmental, social, and governance (“ESG”) matters. Each proxy to
be voted is an opportunity to give company management and board members formal
feedback on these important matters.
If
our policy recommendation is contrary to management’s recommendation, our
analyst is expected, but not required, to engage management. If the ballot issue
is a materially important issue (i.e., the issue impacts the intrinsic value of
the company), the analyst is required to engage with the company. Based on the
engagement and the analyst’s investment judgment, the analyst will submit a vote
instruction to the Managing Director of Portfolio Services via email.
Collaboration
We
are not “activists” and we do not form ”groups” as defined by the SEC. However,
we do engage with other institutional shareholders on important ESG proxy
matters.
Exceptions
To Policy
Any
deviation from the H&W policy recommendation requires a written statement
from the analyst that summarizes their decision to deviate from policy. Typical
rationales include the issue raised is not material, the proposal is moot (e.g.,
the company already complies with proposal), the company has a credible plan to
improve, policy does not fit unique circumstances of company, analyst’s
assessment of the issue is in-line with intent of policy, or the proposal usurps
management's role in managing the company.
Exceptions
to policy are reviewed annually by the ESG Investment Oversight
Group.
Administration
The
Managing Director of Portfolio Services coordinates the solicitation of
analysts’ votes, the collection of exception rationales, and the implementation
of those votes by our third-party proxy advisor, ISS.
CONFLICTS
OF INTEREST
All
conflicts of interest are adjudicated based on what is deemed to be in the best
interest of our clients and their beneficiaries. Our Proxy Oversight Committee
(“POC”) is responsible for reviewing proxies voted by the firm to determine that
the vote was consistent with established guidelines in situations where
potential conflicts of interests may exist when voting proxies. In general, when
a conflict presents itself, we will follow the recommendation of our third-party
proxy advisor, ISS.
OVERSIGHT
AND ROLES
ESG
Investment Oversight Group
The
ESG Investment Oversight Group is responsible for overseeing all ESG investment
related issues. This mandate includes oversight of proxy voting policies and
procedures as they relate to investment activity including the monitoring of
proxy engagements, review of proxy voting exceptions and rationales, assessment
of proxy voting issues, determination of ESG proxy goals, and education of
investment staff on proxy matters. The group is staffed by members of the
investment team and reports to the firm’s Chief Executive Officer.
Proxy
Oversight Committee
The
Proxy Oversight Committee is responsible for overseeing proxy administration and
conflicts of interest issues. The committee is comprised of the Chief Operating
Officer, Chief Compliance Officer, the chair of the ESG Investment Oversight
Group, and Managing Director of Portfolio Services. This group oversees
H&W’s proxy voting policies and procedures by providing an administrative
framework to facilitate and monitor the exercise of such proxy voting and to
fulfill the obligations of reporting and recordkeeping under the federal
securities laws. This committee manages our third-party proxy advisory
relationship.
Investment
Analyst
The
investment analyst is responsible for analyzing and voting all proxies. The
investment analyst has the final authority on individual proxy votes. The ESG
Investment Oversight Group has final authority on creating and amending the
proxy policy.
VOTING
GUIDELINES
This
section summarizes our stance on important issues that are commonly found on
proxy ballots, though each vote is unique and there will be occasional
exceptions to these guidelines. The purpose of our proxy guidelines is to ensure
decision making is consistent with our responsibilities as a
fiduciary.
These
guidelines are divided into seven categories based on issues that frequently
appear on proxy ballots.
•Boards
and Directors
•Environmental
and Social Matters
•Auditors
and Related Matters
•Shareholder
Rights
•Capital
and Restructuring
•Executive
and Board Compensation
•Routine
and Miscellaneous Matters
Boards
and Directors
Board
Independence
We
believe an independent board is crucial to protecting and serving the interests
of public shareholders. We will generally withhold from or vote against any
insiders when such insider sits on the audit, compensation, or nominating
committees; or if independent directors comprise less than 50% of the board.
Insiders are non- independent directors who may have inherent conflicts of
interest that could prevent them from acting in the best interest of
shareholders. Examples of non-independent directors include current and former
company executives, persons with personal or professional relationships with the
company and or its executives, and shareholders with large ownership
positions.
Board
Composition
We
believe directors should attend meetings, be focused on the company, be
responsive to shareholders, and be accountable for their decisions.
We
will generally withhold from or vote against directors who attend less than 75%
of meetings held during their tenure without just cause, sit on more than 5
public company boards (for CEOs only 2 outside boards), support measures that
limit shareholder rights, or fail to act on shareholder proposals that passed
with a majority of votes.
Board
Diversity
Boards
should consider diversity when nominating new candidates, including gender,
race, ethnicity, age, and professional experience. We encourage companies to
have at least one female and one diverse (e.g., race, ethnicity) director or
have a plan to do so.
Board
Size
We
do not see a standard number of directors that is ideal for all companies. In
general, we do not want to see board sizes changed without shareholder approval
as changing board size can be abused in the context of a takeover
battle.
Board
Tenure
In
general, we will evaluate on a case-by-case basis whether the board is
adequately refreshed with new talent and the proposed changes are not designed
to reduce board independence.
Classified
Boards
We
oppose classified boards because, among other things, it can make change in
control more difficult to achieve and limit shareholder rights by reducing board
accountability.
Cumulative
Voting
Generally,
we oppose cumulative voting because we believe that economic interests and
voting interests should be aligned in most circumstances.
Independent
Board Chair
Generally,
we favor a separate independent chair that is not filled by an insider. If the
CEO is also the board chair, we require 2/3 of the board to be independent, a
strong independent director (i.e., has formal input on board agendas and can
call/preside over meetings of independent directors), and the CEO cannot serve
on the nominating or compensation committees.
Proxy
Contests
Proxy
contests are unusual events that require a case-by-case assessment of the unique
facts and circumstances of each contested proxy campaign. Our policy is to defer
to the judgement of our analysts on what best serves our clients’ interests. Our
analysts will evaluate the validity of the dissident’s concerns, the likelihood
that the dissident plan will improve shareholder value, the qualifications of
the dissident’s candidates, and management’s historical record of creating or
destroying shareholder value.
Risk
Oversight
Generally,
companies should have established processes for managing material threats to
their businesses, including ESG risks. We encourage transparency and vote to
improve transparency to help facilitate appropriate risk oversight.
Environmental
and Social Matters
We
believe the oversight of ESG risks is an important responsibility of the board
of directors and is a prerequisite for a well-managed company. Transparent
disclosures are necessary to identify and evaluate environmental and social
risks and opportunities. A lack of transparency will increase the likelihood
that environmental and social risks are not being sufficiently
managed/limited/mitigated. In general, we will engage companies with substandard
disclosure to encourage them to provide adequate disclosure on E&S risks
that typically align with Sustainability Accounting Standards Board (“SASB”)
recommendations.
In
general, we support proposals that encourage disclosure of risks provided they
are not overly burdensome or disclose sensitive competitive information balanced
against the materiality of the risk. We also consider whether the proposal is
more effectively addressed through other means, like legislation or
regulation.
Environmental
Issues
Climate
Change and Green House Gas Emissions
Climate
change has become an important factor in companies’ long-term sustainability.
Understanding a company’s strategy in managing these risks and opportunities is
necessary in evaluating an investment’s prospects. We support disclosures
related to the risks and/or opportunities a company faces related to climate
change, including information on how the company identifies and manages such
risks/opportunities.
Energy
Efficiency
We
generally support proposals requesting that a company report on its energy
efficiency policies. Exceptions may include a request that is overly burdensome
or provides unrealistic deadlines.
Renewable
Energy
We
support requests for reports on renewable energy accomplishments and future
plans. Exceptions may include duplicative, irrelevant, or otherwise unreasonable
requests.
Social
Issues
Equal
Opportunity
We
support proposals requesting disclosures of companies’ policies and/or future
initiatives related to diversity, including current data regarding the diversity
of its workforce.
Gender
Identity and Sexual Orientation
We
support proposals to revise diversity policies to prohibit discrimination based
on sexual orientation and/or gender identity.
Human
Rights Proposals
We
support proposals requesting disclosure related to labor and/or human rights
policies.
Political
Activities
We
support the disclosure of a company’s policies and procedures related to
political contributions and lobbying activities.
Sexual
Harassment
We
vote on a case-by-case basis regarding proposals seeking reports on company
actions related to sexual harassment. We evaluate the company’s current
policies, oversight, and disclosures. We also consider the company’s history and
any related litigation or regulatory actions related to sexual harassment, and
support proposals we believe will prevent such behavior when systemic issues are
suspected.
Auditors
and Related Matters
Generally,
we will support the board’s recommendation of auditors provided that the
auditors are independent, non-audit fees are less than the sum of all audit and
tax related fees, and there are no indications of fraud or misleading audit
opinions.
Shareholder
Rights
We
do not support proposals that limit shareholder rights. When a company
chronically underperforms minimal expectations due to poor execution, poor
strategic decisions, or poor capital allocation, there may arise the need for
shareholders to effect change at the board level. Proposals that have the effect
of entrenching boards or managements, thwarting the will of the majority of
shareholders, or advantaging one class of shareholders at the expense of other
shareholders will not be supported.
Amendment
to Charter/Articles/Bylaws
We
do not support proposals that give the board exclusive authority to amend the
bylaws. We believe amendments to charter/articles/bylaws should be approved by a
vote of the majority of shareholders.
One
Share, One Vote
Generally,
we do not support proposals to create dual class voting structures that give one
set of shareholders super voting rights that are disproportionate from their
economic interest in the company. Generally, we will support proposals to
eliminate dual class structures.
Poison
Pills
In
general, we do not support anti-takeover measures such as poison pills. Such
actions can lead to outcomes that are not in shareholders’ bests interests and
impede maximum shareholder returns. It can also lead to management entrenchment.
We may support poison pills intended to protect NOL assets.
Proxy
Access
Generally,
we support proposals that enable shareholders with an ownership level of 3% for
a period of three years or more, or an ownership level of 10% and a holding
period of one year or more.
Right
to Act by Written Consent
We
believe that shareholders should have the right to solicit votes by written
consent in certain circumstances. These circumstances generally include but are
not limited to situations where more than a narrow group of shareholders support
the cause to avoid unnecessary resource waste, the proposal does not exclude
minority shareholders to the benefit of a large/majority shareholder, and
shareholders receive more than 50% support to set up action by written
consent.
Special
Meetings
Generally,
we support proposals that enable shareholders to call a special meeting provided
shareholders own at least 15% of the outstanding shares.
Virtual
Meetings
We
believe shareholders should have the opportunity to participate in the annual
and special meetings, as current communications technology such as video
conferencing is broadly available to facilitate such interactions. This improves
shareholders’ ability to hear directly from management and the board of the
directors, and to provide feedback as needed.
Capital
and Restructuring
Events
such as takeover offers, buyouts, mergers, asset purchases and sales, corporate
restructuring, recapitalizations, dilutive equity issuance, or other major
corporate events are considered by our analysts on a case-by-case basis. Our
policy is to vote for transactions that maximize the long-term risk adjusted
return to shareholders considering management’s historical record of creating
shareholder value, the likelihood of success, and the risk of not supporting the
proposal.
Dual
Class Shares
We
do not support dual class shares unless the economic and voting interests are
equal.
Issuance
of Common Stock
In
general, we will consider the issuance of additional shares in light of the
stated purpose, the magnitude of the increase, the company’s historical
shareholder value creation, and historical use of shares. We are less likely to
support issuance when discounts or re-pricing of options has been an issue in
the past.
Executive
and Board Compensation
We
expect the board of directors to design, implement, and monitor pay practices
that promote pay-for-performance, alignment of interest with long-term
shareholder value creation, retention and attraction of key employees. In
general, we will evaluate executive compensation in light of historical value
creation, peer group pay practices, and our view on management’s stewardship of
the company.
We
expect the board of directors to maintain an independent and effective
compensation committee that has members with the appropriate skills, knowledge,
experience, and ability to access third-party advice.
We
expect the board of directors to provide shareholders with clear and
understandable compensation disclosures that enable shareholders to evaluate the
effectiveness and fairness of executive pay packages.
And
finally, we expect the board of directors’ own compensation to be reasonable and
not set at a level that undermines their independence from
management.
Golden
Parachutes
Golden
parachutes can serve as encouragement to management to consider transactions
that benefit shareholders; however, substantial payouts may present a conflict
of interest where management is incentivized to support a suboptimal deal. We
view cash severance greater than 3x base salary and bonus to be excessive unless
approved by a majority of shareholders in a say-on-pay advisory
vote.
Incentive
Options and Repricing
We
generally support long-term incentive programs tied to pay-for-performance. In
general, we believe 50% or more of top executive pay should be tied to long-term
performance goals and that those goals should be tied to shareholder value
creation metrics. We do not support plans that reset when management fails to
attain goals or require more than 10% of outstanding shares to be issued. In
general, we do not support the exchange or repricing of options.
Say-on-Pay
We
believe annual say-on-pay votes are an effective mechanism to provide feedback
to the board on executive pay and performance. We support non-binding proposals
that are worded in a manner such that the actual implementation of the plan is
not restricted. In general, we will vote against plans where there is a serious
misalignment of CEO pay and performance or the company maintains problematic pay
practices. In general, we will withhold votes from members of the compensation
committee if there is no say-on-pay on the ballot, the board fails to respond to
a previous say-on-pay proposal that received less than 70% support, the company
has implemented problematic pay practices such as repricing options or its pay
plans are egregious.
Routine
and Miscellaneous Matters
We
generally support routine board proposals such as updating bylaws (provided they
are of a housekeeping nature), change of the corporate name or change of the
time or location of the annual meeting.
Adjournment
of Meeting
We
do not support proposals that give management the authority to adjourn a special
meeting absent compelling reasons to support the proposal.
Amend
Quorum Requirements
We
do not support proposals to reduce quorum requirements for shareholder meetings
without support from a majority of the shares outstanding without compelling
justification.
Other
Business
We
do not support proposals on matters where we have not been provided sufficient
opportunity to review the matters at hand.
March
2023
FOR
PROFESSIONAL CLIENTS, QUALIFIED INVESTORS, INSTITUTIONAL INVESTORS AND
WHOLESALE
INVESTORS
ONLY.
NOT
TO
BE
REPRODUCED
WITHOUT
PRIOR
WRITTEN
APPROVAL.
PLEASE
REFER
TO
THE
IMPORTANT
INFORMATION
AT
THE
BACK
OF
THIS
DOCUMENT.
Insight
Investment
PROXY
VOTING
POLICY
FEBRUARY
2023
CONTENTS
1.INTRODUCTION
//
3
2.POLICY
STATEMENT
//
3
3.SCOPE
//
3
4.PROXY
VOTING
PROCESS
//
3
5.CONFLICTS
OF
INTEREST
//
4
6.PROXY
VOTING
GROUP
//
5
7.DISCLOSURE
AND
RECORD
KEEPING
//
5
8.PROXY
VOTING
POLICY
REVIEW
//
5
1.INTRODUCTION
Insight
seeks
to
actively
exercise
its
rights
and
responsibilities
in
regard
to
proxy
voting
on
behalf
of
Clients
and
is
an
essential
part
of
maximising
shareholder
value,
ensuring
good
governance
and
delivering
investment
performance
aligned
with
our
Clients’
long-term
economic
interests.
The
Insight
Proxy
Voting
Policy
(“Policy”)
sets
out
the
arrangements
employed
by
Insight
Investment
Management
(Global)
Limited,
Insight
Investment
Management
(Europe)
Limited,
Insight
North
America
LLC
and
Insight
Investment
International
Limited
(collectively
“Insight”).
2.POLICY
STATEMENT
Insight
is
committed
to
supporting
good
governance
practices
and
also
voting
all
our
proxies
where
it
is
deemed
appropriate
and
responsible
to
do
so
for
the
relevant
asset
class.
In
such
cases,
Insight’s
objective
is
to
vote
proxies
in
the
best
interests
of
its
Clients.
3.SCOPE
This
Policy
applies
to
financial
instruments
with
voting
rights
where
Insight
has
discretionary
voting
authority.
Alternatively
where
a
Client
retains
control
over
the
voting
decision,
Insight
will
only
lodge
votes
in
instances
where
the
client
agreement
hands
responsibility
to
Insight
to
cast
the
votes
on
their
behalf.
4.PROXY
VOTING
PROCESS
Insight’s
proxy
voting
activity
adheres
to
best-practice
standards
and
is
a
component
of
Insight’s
Stewardship
and
Responsible
Investment
Policies.
In
implementing
its
Proxy
Voting
Policy,
Insight
will
take
into
account
a
number
of
factors
used
to
provide
a
framework
for
voting
each
proxy.
These
include:
Leadership:
Every company should be led by an effective
board
whose
approach
is
consistent
with
creating
sustainable long-term growth.
•Strategy:
Company
leadership
should
define
a
clear
purpose
and
set
long
term
objectives
for
delivering
value
to
shareholders.
•Culture:
The
board
should
promote
a
diverse
and
inclusive
culture
which
strongly
aligns
to
the
values
of
the
company.
It
should
seek
to
monitor
culture
and
ensure
that
it
is
regularly
engaging
with its workforce.
•Engagement
with Shareholders: The board and senior management
should
be
transparent
and
engaged
with
existing
shareholders.
The
board
should
have
a
clear
understanding
of
the
views
of
shareholders.
The
board
should
seek
to
minimize
unnecessary
dilution
of
equity
and
preserve
the
rights
of
existing
shareholders.
•Sustainability:
The board should aim to take account of environmental,
social
and
governance
risks
and
opportunities
when
setting
strategy
and
in
their
company
monitoring
role.
Structure:
The
board
should
have
clear
division
of
responsibilities.
•The
Chair:
The
independent
Chair,
or
Lead
Independent
Director,
of
the
board
should
demonstrate
objective
judgment
and
promote
transparency
and
facilitate
constructive
debate
to
promote
overall
effectiveness.
•The
Board: There
should
be
an
appropriate
balance
of
executive
and
non-executive
directors.
Non-executive
directors
should
be
evaluated
for
independence.
No
one
individual
should
have
unfettered
decision-making
powers.
There
should
be
a
clear
division
of
responsibilities,
between
the
independent
board
members
and
the
executive
leadership
of
the
company.
•Resources:
The
board
should
ensure
it
has
sufficient
governance
policies,
influence
and
resources
to
function
effectively.
Non-executive
directors
should
have
sufficient
time
to
fulfil
their
obligations
to
the
company
as
directors.
Effectiveness:
The
board
should
seek
to
build
strong
institutional
knowledge
to
ensure
long
term
efficient
and
sustainable operations.
•Appointment:
There
should
be
a
formal
appointment
process,
which
ensures
that
the
most
qualified
individuals
are
selected
for
the
board.
This
process
should
be
irrespective
of
bias
to
ensure appropriate diversity of the board.
•Knowledge:
The
board
should
be
comprised
of
those
with
the
knowledge,
skills
and
experience
to
effectively
discharge
their
duties.
The
board
should
have
sufficient
independence
to
serve
as
an
effective
check
on
company
management
and
ensure
the
best outcomes for shareholders.
•Evaluation:
The
board
should
be
evaluated
for
effectiveness
on
a
regular
basis.
Board
member’s
contributions
should
be
considered
individually.
Independence:
The board should present a fair and balanced
view
of
the
company’s
position
and
prospects.
•Integrity:
The
board
should
ensure
that
all
reports
produced
accurately
reflect
the
financial
position,
prospects
and
risks
relevant
to
the
company.
The
board
should
ensure
the
independence
and
effectiveness
of
internal
and
external
audit
functions.
•Audit:
The
board
should
ensure
that
clear,
uncontentious
accounts
are
produced.
These
should
conform
to
the
relevant
best
accountancy practices and accurately represent the financial
position
of
the
company.
Deviations
from
standard
accounting
practices
should
be
clearly
documented
with
a
corresponding
rationale.
•Risk:
The
board
should
ensure
the
company
has
sound
risk
management
and
internal
control
systems.
There
should
be
a
regular
assessment and communication of the company’s emerging and principal
risks.
Remuneration:
Levels
of
remuneration
should
be
sufficient
to
attract,
retain
and
motivate
talent
of
the
quality
required to run the company successfully.
•Goal
Based: The
board
should
base
remuneration
on
goal-
based,
qualitative,
discretionary
cash
incentives.
Remuneration
should
consider
underlying
industry
and
macroeconomic
conditions
and
not
be
structured
in
a
tax
oriented
manner.
•Transparent:
Remuneration
arrangements
should
be
transparent
and should avoid complexity.
•Sustainable:
Remuneration should not be excessively share based
and
should
be
accurately
represented
and
controlled
as
an
operational
cost.
The
remuneration
of
executives
should
promote
long
term
focus
and
respect
the
interests
of
existing
shareholders.
The
relevant
factors
are
used
by
Insight
to
develop
Voting
Guidelines
enabling
a
consistent
approach
to
proxy
voting,
which
are
reviewed
annually
by
the
Proxy
Voting
Group
(“PVG”)
–
(see
section
6).
Voting
activity
is
most
usually
performed
by
the
Chair
of
the
PVG,
a
senior
portfolio
manager
with
no
day
to
day
investment
discretion.
This
creates
an
independent
governance
structure
for
voting,
helping
to
mitigate
actual
and
potential
conflicts
of
interest
(see
section
5).
The
Chair
of
the
PVG
can
seek
support
from
portfolio
managers,
who
have
active
discretion
over
the
securities,
to
provide
additional
input
into
the
voting
decision
such
as
company
background.
However
the
vote
will
be
cast
by
the
Chair
of
the
PVG
or
their
delegate.
Insight
seeks
to
vote
on
all
holdings
with
associated
voting
rights
in
one
of
three
ways:
in
support
of,
against,
or
in
abstention.
If
the
chair
is
unable
to
cast
a
vote,
the
decision
will
be
cast
by
the
deputy
chair.
Insight
uses
a
Voting
Agent
to
assist
in
the
analysis
and
administration
of
the
vote
(see
section
4.1).
The
rationale
for
voting
for,
against,
or
abstaining
is
retained
on
a
case-by-case
basis
as
appropriate
and
reviewed
by
the
PVG
on
a
regular
basis.
4.1
VOTING
AGENT
To
assist
Insight
professionals
with
implementing
its
proxy
voting
strategy,
Insight
retains
the
services
of
an
independent
proxy
voting
service,
namely
Minerva
(“Voting
Agent”).
The
Voting
Agent’s
responsibilities
include,
but
are
not
limited
to,
monitoring
company
meeting
agendas
and
items
to
be
voted
on,
reviewing
each
vote
against
Insight’s
Voting
Guidelines
and
providing
a
voting
analysis
based
upon
the
Voting
Guidelines.
The
Voting
Agent
also
identifies
resolutions
that
require
specific
shareholder
judgement
–
often
relating
to
corporate
transactions
or
shareholder
resolutions.
This
enables
Insight
to
review
situations
where
the
Voting
Guidelines
require
additional
consideration
or
assist
in
the
identification
of
potential
conflicts
of
interest
impacting
the
proxy
vote
decision.
The
Chair
of
the
PVG
will
review
for
contentious
resolutions
and
in
the
event
of
one
will
determine
if
an
actual
or
potential
conflict
exists
in
which
case
the
resolution
will
be
escalated
to
the
PVG
voting
committee
(see
section
5.1).
Voting
decisions
are
communicated
by
Insight
to
the
Voting
Agent
and
submitted
to
shareholder
meetings
through
a
specific
proxy.
On
a
monthly
basis,
the
Voting
Agent
provides
reports
on
voting
activity
to
Insight.
Voting
data
is
available
to
Clients
upon
request
and
is
posted
on
its
website
(see
section
7).
Insight
conducts
an
annual
due
diligence
to
review
the
Voting
Guidelines
and
the
Voting
Agent’s
related
services.
5.CONFLICTS
OF
INTEREST
Effective
stewardship
requires
protecting
our
Clients
against
any
potential
conflicts
of
interest
and
managing
them
with
appropriate
governance.
To
comply
with
applicable
legal
and
regulatory
requirements,
Insight
believes
managing
perceived
conflicts
is
as
important
as
managing
actual
conflicts.
In
the
course
of
normal
business,
Insight
and
its
personnel
may
encounter
situations
where
it
faces
a
conflict
of
interest
or
a
conflict
of
interest
could
be
perceived.
A
conflict
of
interest
occurs
whenever
the
interests
of
Insight
or
its
personnel
could
diverge
from
those
of
a
Client
or
when
Insight
or
its
personnel
could
have
obligations
to
more
than
one
party
whose
interests
are
different
to
each
other
or
those
of
Insight’s
Clients.
In
identifying
a
potential
conflict
situation,
as
a
minimum,
consideration
will
be
made
as
to
whether
Insight,
or
a
member
of
staff,
is
likely
to:
•make
a
financial
gain
or
avoid
a
financial
loss
at
the
expense
of
the
Client
•present
material
differences
in
the
thoughts
of
two
PM’s
who
own
the same security
•benefit
if
it
puts
the
interest
of
one
Client
over
the
interests
of
another
Client
•gain
an
interest
from
a
service
provided
to,
or
transaction
carried
out
on
behalf
of
a
Client
which
may
not
be
in,
or
which
may
be
different
from,
the
Client’s
interest
•obtain
a
higher
than
usual
benefit
from
a
third
party
in
relation
to
a
service
provided
to
the
Client
•receive
an
inducement
in
relation
to
a
service
provided
to
the
Client,
in
the
form
of
monies,
goods
or
services
other
than
standard
commission
or
fee
for
that
service;
or
•have
a
personal
interest
that
could
be
seen
to
conflict
with
their
duties
at
Insight
•create
a
conflict
where
Insight
invests
in
firms
which
are
Clients
or
potential
Clients
of
Insight.
Insight
might
give
preferential
treatment
in
its
research
(including
external
communication
of
the
same)
and/or
investment
management
to
issuers
of
publicly
traded
debt
or
equities
which
are
also
clients
or
closely
related
to
clients
(e.g.
sponsors
of
pension
schemes).
This
includes
financial and ESG considerations.
•create
a
conflict
between
investment
teams
with
fixed
income
holdings
in
publicly
listed
firms
or
material
differences
in
the
thoughts
of
two
PM’s
who
own
the
same
security
5.1
ESCALATION
OF
CONTENTIOUS
VOTING
ISSUE
When
a
contentious
voting
issue
is
identified,
the
PVG
chairman
or
delegate
will
review,
evaluate
and
determine
whether
an
actual
material
conflict
of
interest
exists
and,
if
so,
will
escalate
the
matter
to
the
PVG
voting
committee.
Depending
upon
the
nature
of
the
material
conflict
of
interest,
Insight
may
elect
to
take
one
or
more
of
the
following
measures:
•removing
certain
Insight
personnel
from
the
proxy
voting
process
•walling
off
personnel
with
knowledge
of
the
material
conflict
to
ensure
that
such
personnel
do
not
influence
the
relevant
proxy
vote
•voting
in
accordance
with
the
applicable
Voting
Guidelines,
if
any,
if
the
application
of
the
Voting
Guidelines
would
objectively
result
in
the
casting
of
a
proxy
vote
in
a
predetermined
manner
and
An
unconflicted
contentious
resolution
will
be
voted
by
the
Chair
or
their
delegate.
Where
a
conflict
is
deemed
to
exist
the
vote,
widened
to
the
PVG
voting
committee,
will
be
determined
by
majority
vote.
The
resolution
of
all
contentious
voting
issues,
will
be
documented
in
order
to
demonstrate
that
Insight
acted
in
the
best
interests
of
its
Clients.
Any
voting
decision
not
resolved
by
the
PVG
will
be
escalated
to
the
Insight
Chief
Investment
Officer
(“CIO”)
or
their
delegate
for
additional
input.
6.PROXY
VOTING
GROUP
The
PVG
is
responsible
for
overseeing
the
implementation
of
voting
decisions
where
Insight
has
voting
authority
on
behalf
of
Clients.
The
PVG
meets
at
least
quarterly,
or
more
frequently
as
required.
In
ensuring
that
votes
casted
are
in
the
best
interest
of
Clients,
the
PVG
will
oversee
the
following
proxy
voting
activities:
•Casting
votes
on
behalf
of
Clients
•Voting
Policy:
Oversee
and
set
the
Proxy
Voting
Policy
•Voting
Guidelines:
Oversee
and
set
the
Voting
Guidelines
which
are reviewed and approved on an annual basis
•Stewardship
Code & Engagement Policy: Review for consistency
with
Proxy
Voting
Policy
and
Voting
Guidelines
•Conflicts
of
interest:
Manage
conflicts
when
making
voting
instructions
in
line
with
Insight’s
Conflict
of
Interest
Policy
•Resolution
Assessment:
Review
upcoming
votes
that
cannot
be
made
using
Voting
Guidelines
and
make
voting
decisions
•Voting
Agent:
Appoint
and
monitor
third-party
proxy
agencies,
including
the
services
they
perform
for
Insight
in
implementing
its voting strategy and
•Reporting:
Ensure
voting
activity
aligns
with
local
regulations
and
standards
The
PVG
is
chaired
by
a
Senior
Portfolio
Manager
(who
has
no
direct
day
to
day
investment
discretion)
and
attended
by
portfolio
management
personnel,
the
Senior
Stewardship
Analyst
(Deputy
Chair),
Corporate
Risk,
Compliance
and
Operations
personnel.
The
PVG
is
accountable
to
and
provides
quarterly
updates
to
the
Investment
Management
Group
(“IMG”).
7.
DISCLOSURE
AND
RECORDING
KEEPING
In
certain
foreign
jurisdictions,
the
voting
of
proxies
can
result
in
additional
restrictions
that
have
an
economic
impact
to
the
security,
such
as
“share-blocking.”
If
Insight
votes
on
the
proxy,
share-
blocking
may
prevent
Insight
from
selling
the
shares
of
the
security
for
a
period
of
time.
In
determining
whether
to
vote
proxies
subject
to
such
restrictions,
Insight,
in
consultation
with
the
PVG,
considers
whether
the
vote,
either
in
itself
or
together
with
the
votes
of
other
shareholders
is
expected
to
affect
the
value
of
the
security
that
outweighs
the
cost
of
voting.
If
Insight
votes
on
a
proxy
and
during
the
“share-blocking
period”,
Insight
would
like
to
sell
the
affected
security,
Insight
in
consultation
with
the
PVG,
will
attempt
to
recall
the
shares
(as
allowable
within
the
market
time-frame
and
practices).
Insight
publishes
its
voting
activity
in
full
on
its
website.
This
can
be
found
at
www.insightinvestment.com/ri.
8.
PROXY
VOTING
POLICY
REVIEW
Insight
will
review
its
Proxy
Voting
arrangements
regularly
through
the
PVG.
Insight
reviews
this
Policy
at
least
annually
or
whenever
a
material
change
occurs
and
will
notify
Clients
of
any
material
change
that
affects
our
ability
to
vote
in
line
with
the
best
interests
of
its
Clients.
A
material
change
shall
be
a
significant
event
that
could
impact
Insight’s
ability
to
vote
proxies
such
as
a
change
in
voting
agent.
IMPORTANT
INFORMATION
Material
in
this
publication
is
for
general
information
only.
This
material
is
not
intended
to
be
relied
upon
as
a
forecast,
research
or
investment
advice,
and
is
not
a
recommendation,
offer
or
solicitation
to
buy
or
sell
any
securities
or
to
adopt
any
investment
strategy.
This
document
must
not
be
used
for
the
purpose
of
an
offer
or
solicitation
in
any
jurisdiction
or
in
any
circumstances
in
which
such
offer
or
solicitation
is
unlawful
or
otherwise
not
permitted.
This
document
should
not
be
duplicated,
amended
or
forwarded
to
a
third
party
without
consent from Insight Investment.
This
material
may
contain
’forward
looking’
information
that
is
not
purely
historical
in
nature.
Such
information
may
include,
among
other
things,
projections
and
forecasts.
Forecasts
are
not
guarantees.
Past
performance
is
not
indicative
of
future
results.
Investment
in
any
strategy
involves
a
risk
of
loss
which
may
partly
be
due
to
exchange
rate
fluctuations.
Index
returns
are
for
illustrative
purposes
only
and
are
used
in
the
context
of
our
macro-economic
models
and
analysis
only.
Returns
cannot
be
linked
to
any
fund
or
investment
strategy
and
results
do
not
represent
or
infer
any
links
to
actual
fund
or
strategy
performance.
Index
performance
returns
do
not
reflect
any
management
fees,
transaction
costs
or
expenses.
Indices
are
unmanaged
and
one
cannot
invest directly in an index.
Insight
does
not
provide
tax
or
legal
advice
to
its
clients
and
all
investors
are
strongly
urged
to
seek
professional
advice
regarding
any
potential
strategy or investment.
References
to
future
returns
are
not
promises
or
even
estimates
of
actual
returns
a
client
portfolio
may
achieve.
Assumptions,
opinions
and
estimates
are
provided
for
illustrative
purposes
only.
They
should
not
be
relied
upon
as
recommendations
to
buy
or
sell
securities.
Forecasts
of
financial
market
trends
that
are
based
on
current
market
conditions
constitute
our
judgment
and
are
subject
to
change
without
notice.
The
information
and
opinions
are
derived
from
proprietary
and
non-proprietary
sources
deemed
by
Insight
Investment
to
be
reliable,
are
not
necessarily
all-inclusive
and
are
not
guaranteed
as
to
accuracy.
As
such,
no
warranty
of
accuracy
or
reliability
is
given
and
no
responsibility
arising
in
any
other
way
for
errors
and
omissions
(including
responsibility
to
any
person
by
reason
of
negligence)
is
accepted
by
Insight
Investment,
its
officers,
employees
or
agents.
Reliance
upon
information
in
this
material
is
at
the
sole
discretion
of
the
reader.
Telephone
conversations
may be recorded in accordance with applicable laws.
For
clients and prospects of Insight Investment Management (Global) Limited:
Issued
by
Insight
Investment
Management
(Global)
Limited.
Registered
in
England
and
Wales.
Registered
office
160
Queen
Victoria
Street,
London
EC4V
4LA;
registered
number
00827982.
For
clients
and
prospects
of
Insight
Investment
Funds
Management
Limited:
Issued
by
Insight
Investment
Funds
Management
Limited.
Registered in England and Wales. Registered office 160 Queen Victoria Street,
London EC4V 4LA; registered number 01835691.
For
clients
and
prospects
of
Insight
Investment
Management
(Europe)
Limited:
Issued
by
Insight
Investment
Management
(Europe)
Limited.
Registered
office
Riverside
Two,
43-49
Sir
John
Rogerson’s
Quay,
Dublin,
D02
KV60.
Registered
in
Ireland.
Registered
number
581405.
Insight
Investment
Management
(Europe)
Limited
is
regulated
by
the
Central
Bank
of
Ireland.
CBI
reference
number
C154503.
For
clients
and
prospects
of
Insight
Investment
International
Limited:
Issued
by
Insight
Investment
International
Limited.
Registered
in
England
and
Wales.
Registered
office
160
Queen
Victoria
Street,
London
EC4V
4LA;
registered
number
03169281.
Insight
Investment
Management
(Global)
Limited,
Insight
Investment
Funds
Management
Limited
and
Insight
Investment
International
Limited
are
authorised
and
regulated
by
the
Financial
Conduct
Authority
in
the
UK.
Investment
Management
(Global)
Limited
and
Insight
Investment
International
Limited
may
operate
in
certain
European
countries
in
accordance
with
local
regulatory
requirements.
For
clients
and
prospects
based
in
Australia
and
New
Zealand:
This
material
is
for
wholesale
investors
only
(as
defined
under
the
Corporations
Act
in
Australia
or
under
the
Financial
Markets
Conduct
Act
in
New
Zealand)
and
is
not
intended
for
distribution
to,
nor
should
it
be
relied
upon
by,
retail
investors.
Both
Insight
Investment
Management
(Global)
Limited
and
Insight
Investment
International
Limited
are
exempt
from
the
requirement
to
hold
an
Australian
financial
services
licence
under
the
Corporations
Act
2001
in
respect
of
the
financial
services;
and
both
are
authorised
and
regulated
by
the
Financial
Conduct
Authority
(FCA)
under
UK
laws,
which
differ
from
Australian
laws.
If
this
document
is
used
or
distributed
in
Australia,
it
is
issued
by
Insight
Investment
Australia
Pty
Ltd
(ABN
69
076
812
381,
AFS
License
No.
230541)
located
at
Level
2,
1-7
Bligh
Street,
Sydney,
NSW
2000.
For
clients
and
prospects
of
Insight
North
America
LLC:
Insight
North
America
LLC
is
a
registered
investment
adviser
under
the
Investment
Advisers
Act
of
1940
and
regulated
by
the
US
Securities
and
Exchange
Commission.
INA
is
part
of
‘Insight’
or
‘Insight
Investment’,
the
corporate
brand
for
certain
asset
management
companies
operated
by
Insight
Investment
Management
Limited
including,
among
others,
Insight
Investment
Management
(Global)
Limited,
Insight
Investment
International
Limited
and
Insight
Investment
Management
(Europe)
Limited
(IIMEL).
©
2023
Insight
Investment.
All
rights
reserved.
Los
Angeles Capital Management LLC
LOS
ANGELES CAPITAL
Proxy
Policy
Rev.
August 23, 2022
|
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| |
Table
of Contents |
|
|
| |
I. |
| Introduction |
3 |
II. |
| Proxy
Policy Statement |
3 |
| A. |
Proxy
Voting Guidelines |
3 |
| B. |
Limitations |
4 |
| C. |
Special
Considerations |
4 |
III. |
| Responsibility
and Oversight |
5 |
IV. |
| Proxy
Voting Procedures |
5 |
|
A. |
Materiality |
5 |
| B. |
Conflicts
of Interest |
5 |
| C. |
Disclosure |
6 |
| D. |
Recordkeeping |
6 |
I.Introduction
Los
Angeles Capital Management LLC (“Los Angeles Capital” or the “Firm”) has adopted
and implemented policies and procedures that are reasonably designed to ensure
that proxies are voted in the best interest of clients, in accordance with U.S.
Securities and Exchange Commission (“SEC”) Rule 206(4) ‐ 6 under the Investment
Advisers Act of 1940 (the “Advisers Act”) and its obligations under the Employee
Retirement Income Security Act of 1974 (“ERISA”). Los Angeles Capital provides
investment advisory or sub-advisory services to various types of institutional
clients. When clients give Los Angeles Capital the authority to vote proxies
held in their client accounts such authority is specified in the advisory
contract or other governing agreement.
II.Proxy
Policy Statement
Los
Angeles Capital has retained Glass Lewis & Co., LLC (“Glass Lewis”) an
unaffiliated third‐party, to act as an independent proxy voting agent. Glass
Lewis provides proxy analysis, voting recommendations, recordkeeping, and
manages other operational matters of the proxy voting process. If at any time a
material conflict arises, it would be resolved in the best interest of the
client.
When
Los Angeles Capital is given proxy voting authority together with a client’s
voting policy, the Firm oversees compliance with such policy. When the client
elects to use the Firm’s standard proxy guidelines, the Firm will vote in
accordance with the guidelines approved by the Firm’s Proxy Committee
(“Committee”). The Committee has approved the use of Glass Lewis’ U.S. and
Global guidelines, as may be modified from time to time (the “Firm’s
Guidelines”).
A.Proxy
Voting Guidelines
On
an annual basis, the Committee reviews the Firm’s Guidelines. The Committee also
selectively reviews a sampling of the voting recommendations and the related
proxy materials in determining whether to continue or modify the approved Firm
Guidelines.
The
Firm ultimately retains the right to cast each vote on a case‐by‐case basis,
taking into consideration the applicable proxy guidelines including any
contractual obligations or custom voting policy of the particular portfolio as
well as all relevant facts and circumstances including information that might be
gathered from sources beyond Glass Lewis. In the event there is a disagreement
with the Glass Lewis analysis as to a particular vote, the Committee will
determine whether it is appropriate to vote contrary to the Glass Lewis analysis
provided that such decision is consistent with the approved guideline. In the
rare circumstance that the Committee believes it is in the best interest of a
client to vote contrary to an approved guideline, the Committee will seek client
consent prior to placing a vote that is contrary to an approved guideline.
Los
Angeles Capital recognizes that a client may issue specific directives regarding
how particular proxy issues are to be voted for the client’s portfolio holdings.
The Firm requires that the advisory or sub‐advisory contract specify such
instructions, including instructions as to how those votes will be managed,
particularly where they differ from the Firm’s Guidelines.
It
is unlikely that serious conflicts of interest will arise in the context of the
Firm’s proxy voting because the Firm does not engage in other financial
businesses such as brokerage, managing or advising public companies,
underwriting, or investment banking. Nevertheless, should a conflict of interest
arise in connection with proxy voting or Glass Lewis, such conflict will be
handled as described below under Section IV B, “Conflicts of Interest.” As a
matter of policy, the Firm and its employees are required to put the interests
of clients ahead of their own.
B.Limitations
In
limited circumstances, the Firm may elect to abstain from voting or may be
unable to vote a client’s proxy. These circumstances include:
•Where
the Firm concludes that the effect on shareholder’s economic interests or the
value of the portfolio holding is indeterminable or insignificant.
•Where
the securities related to the vote participate in a securities
lending program and
are out on loan. In many cases, where a client directs the securities lending,
Los Angeles Capital may not be aware when the security is out on loan and thus
may not be able to recall the security before the record date. Where Los Angeles
Capital deems a holding materially significant or is directing the securities
lending, the Firm may recall securities, if operationally feasible, so that they
can be voted where the Firm determines it has a fiduciary obligation to do
so.
•Where
the related securities are issued in a country that participates in share
blocking
because it is disruptive to the management of the portfolio.
•Where
multiple global custodian accounts roll up into one omnibus
sub-custodian account.
In the specific markets where this may occur, the account managed by Los Angeles
Capital is not registered individually. Therefore, if ballots are voted
differently for the underlying accounts, the omnibus vote is considered split
and is rejected.
•Where
in the Firm’s judgement the unjustifiable
costs1
or disadvantages of voting the proxy would exceed the anticipated benefit of
voting (e.g., certain non‐U.S. securities).
•Where
a required Power
of Attorney is
not on file.
C.Special
Considerations
Certain
accounts may warrant specialized treatment in voting proxies. Contractual
stipulations and individual client direction will dictate how voting will be
done in these cases.
Mutual
Funds
Where
the Firm votes proxies for a mutual fund that it sub-advises, the proxies will
be voted in accordance with the Fund’s stated guidelines and requirements of
securities laws. Proxies of portfolio companies voted may be subject to
investment restrictions of the fund and voted in accordance with any resolutions
or other instructions approved by authorized persons of the fund.
ERISA
Accounts
Responsibilities
for voting ERISA accounts include: the duty of loyalty, prudence, compliance
with the plan, as well as a duty to avoid prohibited transactions.
Issuer
Supplemental Information
Management
of issuers, as well as other interested parties, will sometimes release
supplemental information (after the proxy statement) that relates to a pending
proxy vote. Glass Lewis and the Firm will not always be able to consider that
additional information depending on when it is released.
1
The DOL has indicated that such costs include, but are not limited to,
expenditures related to developing proxy resolutions, proxy voting services and
the analysis of the likely net effect of a particular issue on the economic
value of the plan’s investment. Fiduciaries must take into consideration whether
the exercise of its rights to vote a proxy is expected to have an effect on the
economic value of the plan’s investment that will outweigh the costs of
exercising such rights. With respect to proxies for shares of foreign
corporations, a fiduciary, in deciding whether to purchase shares of a foreign
corporation, should consider whether any additional difficulty and expense in
voting such shares is reflected in their market price.
III.Responsibility
and Oversight
The
Committee was established to provide oversight to the proxy voting process and
is responsible for developing, implementing, and updating the Firm’s proxy
policy, reviewing approving, and/or formulating the Firm’s Guidelines, selecting
and overseeing the third‐party proxy vendor, identifying any conflicts of
interest, determining the votes for issues it elects to vote independently from,
or that cannot be voted by, Glass Lewis, monitoring legislative and corporate
governance developments surrounding proxy issues, and meeting to discuss any
material issues regarding the proxy voting process. The Committee meets annually
and as necessary to fulfill its obligations.
As
part of the Committee’s ongoing oversight of its third-party proxy vendor, the
Committee considers (i) the adequacy and quality of the proxy vendor’s staffing
and personnel; (ii) the presence of conflicts and processes to address those
conflicts; (iii) the robustness of the proxy vendor’s policies and procedures
for ensuring that its recommendations are based on current and accurate
information; and (iv) any other appropriate considerations as to the nature and
quality of the proxy vendor’s services. In addition, Compliance conducts
periodic reviews of ballots voted by the proxy vendor to ensure they are in line
with proxy voting procedures.
In
cases where the Committee votes a proxy ballot it may conduct research
internally and/or use the resources of an independent research consultant or use
information from any of the following sources: legislative materials, studies of
corporate governance and other proxy voting issues, reports by issuers’
management on pending proxy votes, and/or published analyses of shareholder and
management proposals. In all voting circumstances, two votes from voting members
of the Committee or one voting member of the Committee and an internal legal
counsel are required.
Los
Angeles Capital’s Operations Department handles the day-to-day administration of
the proxy voting process.
IV.Proxy
Voting Procedures
Glass
Lewis provides for the timely execution of specified proxy votes on the Firm’s
behalf, which includes complete account set‐up, vote execution, reporting,
recordkeeping, and compliance with ERISA.
Los
Angeles Capital’s responsibility for voting proxies is generally determined by
the obligations set forth under each client’s Investment Management Agreement,
Limited Partnership Agreement, Prospectus, or other legal documentation
governing the account. Voting ERISA client proxies is a fiduciary act of plan
asset management that must be performed by the adviser unless the voting right
is retained by a named fiduciary of the plan. If an advisory or sub‐advisory
contract or similar document states that Los Angeles Capital does not have the
authority to vote client proxies, then voting is the responsibility of some
other named fiduciary.
While
Los Angeles Capital will accept direction from clients on specific proxy issues
for their account, the Firm reserves the right to maintain its standard position
on all other client accounts for which the Firm has proxy
authority.
A.Materiality
The
Committee has designated certain materiality thresholds for situations in which
the Committee may vote independently from Glass Lewis or may take separate
actions in regard to securities lending limitations. Materiality thresholds are
monitored daily and are escalated to the Committee for review.
B.Conflicts
of Interest
Los
Angeles Capital attempts to minimize the risks of conflicts and reviews the
Conflict of Interest Statement prepared by Glass Lewis on an annual
basis.
If
Glass Lewis identifies a potential conflict of interest between it and a
publicly held company, it will disclose the relationship on the relevant
research report. If an unforeseen conflict requires specialized treatment,
alternate measures may be taken, up to and including having Glass Lewis refrain
from writing a Proxy Paper report on the company. In this scenario Glass Lewis
would procure a substitute research report from an alternative qualified
provider and the Committee may be required to research and vote the
proxy.
If,
during this process, the Committee identifies a potential material conflict of
interest between Los Angeles Capital or an affiliated person of the Firm and the
issuer whose ballot is being voted, the client will be notified. If no directive
is issued by the client, the Committee will vote in such a way that, in the
Committee’s opinion, fairly addresses the conflict in the best interest of the
client.
C.Disclosure
Los
Angeles Capital will provide all clients with a copy of the Firm’s current proxy
policies and procedures upon request. In addition, clients may request, at any
time, a copy of the Firm’s voting records for their respective account(s) by
making a formal request to Los Angeles Capital. Los Angeles Capital will make
this information available to a client upon its request within a reasonable
time. For further information, please contact a member of Operations at Los
Angeles Capital at 310‐479‐9998 or [email protected].
Los
Angeles Capital generally will not disclose how it intends to vote on behalf of
a client account except as required by applicable law but may disclose such
information to a client regarding their portfolio who itself may decide or may
be required to make public such information. Los Angeles Capital will not
disclose past votes or share amounts voted except (i) for a valid business
purpose as determined in the discretion of the Chief Compliance Officer or Chief
Legal Officer, (ii) to the respective client, or (iii) as required by
law.
D.Recordkeeping
All
proxy records pursuant to Section 204‐2 of the Advisers Act are retained by
either Glass Lewis or Los Angeles Capital. Glass Lewis retains (1) records of
proxy statements received regarding client securities and (2) records of each
vote cast. Los Angeles Capital retains (1) copies of its proxy policies,
procedures, and Firm Guidelines; (2) copies of any document created by Los
Angeles Capital that was material to making a decision how to vote proxies on
behalf of a client or that memorializes the basis for that decision; (3) each
written client request for information on how the adviser voted proxies on
behalf of the client; and (4) a copy of any written response by Los Angeles
Capital to any (written or oral) client request for information on how the
adviser voted proxies on behalf of the requesting client.
ERISA
Accounts
Los
Angeles Capital’s maintains access to proxy voting records (both procedures and
actions taken in individual situations) to enable the named fiduciary to
determine whether Los Angeles Capital is fulfilling its obligations. Such
records may be maintained via Glass Lewis’ electronic system. Retention may
include: (1) issuer name and meeting; (2) issues voted on and record of the
vote; (3) number of shares eligible to be voted on the record date; (4) number
of shares voted; and (5) where appropriate, cost‐benefit analyses.
Duration
Proxy
voting books and records will be maintained in an easily accessible place for at
least five years from the end of the fiscal year during which the last entry was
made on such records. For the first two years, the records are fully accessible
in Los Angeles Capital’s office and electronically.
Nuveen
Proxy
Voting
Conflicts
of
Interest Policy and Procedures
Policy
Purpose
and
Statement
Proxy
voting by investment advisers is subject to U.S. Securities and Exchange
Commission
(“SEC”)
rules
and
regulations
and,
for
accounts
subject
to
ERISA,
U.S.
Department of Labor (“DOL”) requirements.
These
rules and regulations require
policies
and
procedures
reasonably
designed
to
ensure
proxies
are
voted
in the best interest of clients and that such procedures set forth how the
adviser addresses material conflicts that may arise between the Adviser’s
interests and those of its clients.
The
purpose of this Proxy Voting Conflicts of Interest Policy and
Procedures
(“Policy”)
is
to
describe
how
the
Advisers
monitor
and
address
the
risks associated with Material Conflicts of Interest arising out of business and
personal relationships that could affect proxy voting decisions.
Nuveen’s
Stewardship
Group
is
responsible
for
providing
vote
recommendations,
based on the Nuveen Proxy Voting Guidelines (the “Guidelines”), to the Advisers
and for administering the voting of proxies on behalf of the
Advisers.
When
determining how to vote proxies, the Nuveen Stewardship Group adheres to the
Guidelines, which are reasonably designed to ensure that the Advisers vote
proxies in the best interests of the Advisers’ clients.
Advisers
may face certain potential Material Conflicts of Interest when voting
proxies.
The
procedures
set
forth
below
have
been
reasonably
designed
to
identify,
monitor, and address potential Material Conflicts of Interest to ensure that the
Advisers’
voting
decisions
are
based
on
the
best
interest
of
their
clients
and
are
not
the product of a conflict.
Applicability
This
Policy applies to employees of Nuveen (“Nuveen”) acting on behalf of Nuveen
Asset Management,
LLC
(“NAM”),
Teachers
Advisors,
LLC
(“TAL”)
and
TIAA-CREF
Investment
Management, LLC (“TCIM”), each an “Adviser” and collectively
referred
to
as
the
“Advisers”
Policy
Statement
The
Advisers have a fiduciary duty to vote proxies in the best interests of their
clients and must not subrogate the interests of their clients to their
own.
Enforcement
As
provided in the TIAA Code of Business Conduct, all employees are expected to
comply with applicable laws and regulations, as well as the relevant policies,
procedures and compliance manuals that apply to Nuveen’s business
activities.
Violation of this Policy may result in disciplinary action up to and including
termination of employment.
Terms
and
Definitions
Advisory
Personnel
includes
the
Adviser’s
portfolio
managers
and
research
analysts.
Conflicts
Watch
List
(“Watch
List”)
refers
to
a
list
maintained
by
the
Stewardship
Group
based
on
the
following:
1.The
positions
and
relationships
of
the
following
categories
of
individuals
are
evaluated
to
assist
in
identifying a potential Material Conflict with a Portfolio Company:
i.The
TIAA
CEO,
ii.The
Nuveen
Executive
Leadership
Team
and
the
Nuveen
Senior
Leadership
Team,
iii.The
Stewardship
Group
members
who
provide
proxy
voting
recommendations
on
behalf
of
the
Advisers,
iv.Advisory
Personnel,
and
v.Household
Members
of
the
parties
listed
above
in
Nos.
1(i)
–
1(iv).
The
following
criteria
constitute
a
potential
Material
Conflict:
•Any
individual
identified
above
in
1(i)
–
1(v)
who
serves
on
a
Portfolio
Company’s
board
of
directors; and/or
•Any
individual
identified
above
in
1(v)
who
serves
as
a
senior
executive1
of
a
Portfolio
Company.
2.In
addition,
the
following
circumstances
have
been
determined
to
constitute
a
potential
Material
Conflict:
i.Voting
proxies
for
Funds
sponsored
by
any
Adviser
and/or
a
Nuveen
Affiliated
Entity
(i.e.,
registered
investment funds and other funds that require proxy voting) held in client
accounts,
ii.Voting
proxies for Portfolio Companies that are direct advisory clients of the Advisers
and/or the Nuveen Affiliated Entities,
iii.Voting
proxies
for
Portfolio
Companies
that
have
a
material
distribution
relationship2
with
regard
to
the products or strategies of the Advisers and/or the Nuveen Affiliated
Entities,
iv.Voting
proxies for Portfolio Companies that
are
institutional
investment
consultants
with
which
the
Advisers
and/or
the
Nuveen
Affiliated
Entities
have
engaged
for
any
material
business
opportunity1
and
v.Any
other circumstance where the Stewardship Group, the Nuveen Proxy Voting
Committee (the “Committee”), the Advisers, Nuveen Legal or Nuveen Compliance are
aware of in which the Adviser’s duty to serve its clients’ interests could be
materially compromised.
1
Senior executives are defined as “C-suite” positions such as CEO, CFO, COO, CAO,
CMO, CIO, CTO, etc.
2
Such criteria are defined in a separate standard operating
procedure.
In
addition, certain conflicts may arise when a Proxy Service Provider or their
affiliate(s), have determined and/or disclosed that a relationship exists with
i) a Portfolio Company ii) an entity acting as a primary shareholder
proponent
with
respect
to
a
Portfolio
Company
or
iii)
another
party.
Such
relationships
include,
but
are
not
limited
to,
the
products and
services
provided
to,
and
the
revenue
obtained from,
such
Portfolio Company or its affiliates. The Proxy Service Provider is required to
disclose such relationships to the Advisers,
and
the
Stewardship
Group
reviews
and
evaluates
the
Proxy
Service
Provider’s
disclosed
conflicts
of interest and associated controls annually and reports its assessment to the
Committee.
Household
Member includes
any of the following who reside or are expected to reside in your household for
at least 90 days a
year:
i)
spouse or Domestic Partner, ii) sibling, iii) child,
stepchild,
grandchild, parent, grandparent, stepparent, and in-laws (mother, father, son,
daughter, brother, sister).
Domestic
Partner is
defined as an individual who is neither a relative of, or legally married to, a
Nuveen employee but shares a residence and is in a mutual commitment similar to
marriage with such Nuveen employee.
Material
Conflicts of Interest (“Material Conflict”) A
conflict of interest that reasonably could have the potential to influence a
recommendation based on the criteria described in this Policy.
Nuveen
Affiliated
Entities
refers
to
TIAA
and
entities
that
are
under
common
control
with
the
Advisers
and
that
provide
investment
advisory
services.
TIAA
and
the
Advisers
will
undertake
reasonable
efforts
to
identify
and manage any potential TIAA-related conflicts of interest.
Portfolio
Company
refers
to
any
publicly
traded
company
held
in
an
account
that
is
managed
by
an
Adviser
or a Nuveen Affiliated Entity.
Proxy
Service Provider(s) refers
to any independent third-party vendor(s) who provides proxy voting
administrative, research and/or recordkeeping services to Nuveen.
Proxy
Voting
Guidelines
(the
“Guidelines’’)
are
a
set
of
pre-determined
principles
setting
forth
the
manner
in which the Advisers generally intend to vote on specific voting categories and
serve to assist clients, Portfolio
Companies,
and
other
interested
parties
in
understanding
how
the
Advisers
generally
intend
to
vote
proxy-related matters. The Guidelines are not exhaustive and do not necessarily
dictate how the Advisers will ultimately vote with respect to any proposal or
resolution.
Proxy
Voting
Conflicts
of
Interest
Escalation
Form
(“Escalation
Form”)
Used
in
limited
circumstances
as described below to formally document certain requests to deviate from the
Guidelines, the rationale supporting the request, and the ultimate
resolution.
Policy
Requirements
The
Advisers
have
a
fiduciary
duty
to
vote
proxies
in
the
best
interests
of
their
clients
and
must
not
subrogate
the interests of their clients to their own.
The
Stewardship Group and Advisory Personnel are prohibited from being influenced in
their proxy voting decisions by any individual outside the established proxy
voting process.
The
Stewardship Group and Advisory Personnel are required to report to Nuveen
Compliance any individuals or parties seeking to influence proxy votes outside
the established proxy voting process.
The
Stewardship
Group generally seeks to vote proxies in
adherence
to the Guidelines. In the event that a potential Material Conflict has been
identified, the Committee, the Stewardship Group, Advisory Personnel and Nuveen
Compliance are required to comply with the following:
Proxies
are generally voted in accordance with the Guidelines. In instances where a
proxy is issued by a Portfolio
Company
on the
Watch
List,
and
the Stewardship
Group’s
vote
direction
is
in support
of
company
management and either contrary to the Guidelines or the Guidelines require a
case-by-case review, then the
Stewardship
Group
vote
recommendation
is
evaluated using established criteria3
to
determine
whether a potential conflict exists. In instances where it is determined a
potential conflict exists, the vote direction shall default to the
recommendation of an independent third-party Proxy Service Provider based on
such provider’s benchmark policy. To the extent the Stewardship Group believes
there is a justification to vote contrary to the Proxy Service Provider’s
benchmark recommendation in such an instance, then such requests are evaluated
and mitigated pursuant to an Escalation Form review process as described in the
Roles and Responsibilities section below.
In
all cases votes are intended to be in line with the Guidelines and in the best
interests of clients.
The
Advisers are required to adhere to the baseline standards and guiding principles
governing client and personnel
conflicts
as
outlined
in
the
TIAA
Conflicts
of
Interest
Policy
to
assist
in
identifying,
escalating
and
addressing proxy voting conflicts in a timely manner.
Roles
and
Responsibilities
Nuveen
Proxy
Voting
Committee
1.Annually,
review and approve the criteria constituting a Material Conflict involving the
individuals and entities named on the Watch List.
2.Review
and
approve
the
Policy
annually,
or
more
frequently
as
required.
3.Review
Escalation
Forms
as
described
above
to
determine
whether
the
rationale
of
the
recommendation
is clearly articulated and reasonable relative to the potential Material
Conflict.
4.Review
Stewardship
Group
Material
Conflicts
reporting.
5.Review
and consider any other matters involving the Advisers’ proxy voting activities
that are brought to the Committee.
Nuveen
Stewardship
Group
1.Promptly
disclose
Stewardship
Group
members’
Material
Conflicts
to
Nuveen
Compliance.
2.Stewardship
Group
members
must
recuse
themselves
from
all
decisions
related
to
proxy
voting
for
the
Portfolio Company seeking the proxy for which they personally have disclosed, or
are required to disclose, a Material Conflict.
3.Compile,
administer and update the Watch List promptly based on the Watch List criteria
described herein as necessary.
4.Evaluate
vote recommendations for Portfolio Companies on the Watch List, based on
established criteria to determine whether a vote shall default to the
third-party Proxy Service Provider, or whether an Escalation Form is
required.
3
Such
criteria are defined in a separate standard operating procedure.
5.In
instances
where
an
Escalation
Form
is
required
as
described
above,
the
Stewardship
Group
member
responsible
for
the
recommendation
completes
and
submits
the
form
to
a
Stewardship
Group
manager
and the Committee.
The
Stewardship Group will specify a response due date from the Committee
typically
no
earlier
than
two
business
days
from
when
the
request
was
delivered.
While
the
Stewardship
Group will make reasonable efforts to provide a two-business- day notification
period, in certain instances
the
required
response
date
may
be
shortened.
The
Committee
reviews
the
Escalation
Form
to determine whether a Material Conflict exists and whether the rationale of the
recommendation is clearly articulated and reasonable relative to the existing
conflict.
The
Committee will then provide its response in writing to the Stewardship Group
member who submitted the Escalation Form.
6.Provide
Nuveen
Compliance
with
established
reporting.
7.Prepare
Material
Conflicts
reporting
to
the
Committee
and
other
parties,
as
applicable.
8.Retain
Escalation Forms and responses thereto and all other relevant documentation in
conformance with Nuveen’s Record Management program.
Advisory
Personnel
1.Promptly
disclose
Material
Conflicts
to
Nuveen
Compliance.
2.Provide
input and/or vote recommendations to the Stewardship Group upon request.
Advisory Personnel are prohibited from providing the Stewardship Group with
input and/or recommendations for any Portfolio Company for which they have
disclosed, or are required to disclose, a Material Conflict.
3.From
time
to
time
as
part
of
the
Adviser’s
normal
course
of
business,
Advisory
Personnel
may
initiate
an
action
to override the Guidelines
for
a particular proposal.
For
a proxy vote issued by a Portfolio Company
on
the
Watch
List,
if
Advisory
Personnel
request
a
vote
against
the
Guidelines
and
in
favor
of Portfolio Company management, then the request will be evaluated by the
Stewardship Group in accordance
with
their
established
criteria
and
processes
described
above.
To
the
extent
an
Escalation
Form is required, the Committee reviews the Escalation Form to determine whether
the rationale of the recommendation is clearly articulated and reasonable
relative to the potential Material Conflict.
Nuveen
Compliance
1.Determine
criteria constituting a Material Conflict involving the individuals and entities
named on the Watch List.
2.Determine
parties
responsible
for
collection
of,
and
providing
identified
Material
Conflicts
to,
the
Stewardship Group for inclusion on the Watch List.
3.Perform
periodic
reviews
of
votes
where
Material
Conflicts
have
been
identified
to
determine
whether
the votes were cast in accordance with this Policy.
4.Develop
and
maintain,
in
consultation
with
the
Stewardship
Group,
standard
operating
procedures
to
support the Policy.
5.Perform
periodic
monitoring
to
determine
adherence
to
the
Policy.
6.Administer
training to the Advisers and the Stewardship Group, as applicable, to ensure
applicable personnel understand Material Conflicts and disclosure
responsibilities.
7.Assist
the
Committee
with
the
annual
review
of
this
Policy.
Nuveen
Legal
1.Provide
legal
guidance
as
requested.
Governance
Review
and
Approval
This
Policy will be reviewed at least annually and will be updated sooner if changes
are necessary. The Policy Owner, the Committee and the NEFI Compliance Committee
are responsible for the review and approval of this Policy.
Implementation
Nuveen
has
established
the
Committee
to
provide
centralized
management
and
oversight
of
the
proxy
voting
process administered by the Stewardship Group for the Advisers in accordance
with its Proxy Voting Committee Charter and this Policy.
Exceptions
Any
request
for
a
proposed
exception
or
variation
to
this
Policy
will
be
submitted
to
the
Committee
for
approval and reported to the appropriate governance committee(s), where
appropriate.
Related
Documents
•Nuveen
Proxy
Voting
Committee
Charter
•Nuveen
Proxy
Voting
Guidelines
•Nuveen
Proxy
Voting
Policy
•Nuveen
Policy
Statement
on
Responsible
Investing
|
|
|
|
| |
| |
Policy
Adoption |
February
3,
2020 |
Effective
Date of Current Version/Last
Date
Reviewed |
December
18,
2023 |
Governance |
NEFI
Compliance
Committee |
Policy
Owner |
Nuveen
Proxy
Voting
Committee |
Policy
Leader |
Nuveen
Compliance |
G-3250871P-E1123W
ORIGIN
ASSET MANAGEMENT
Procedures
and Control Processes
Proxy
voting
December
2022
This
document draws on the Advisers Act of 1940, a United States federal law, and
subsequent Securities and Exchange Commission guidance IA-5325; IC-33605, 17 CFR
Parts 271 and 276 (effective date 10th September 2019) and provides an outline
of the policies in place to ensure Origin LLP (‘the Firm’) meets its obligation
to vote on proxies in the best interest of its clients.
Origin
reviews and documents the adequacy of its proxy voting policies at least
annually.
The
Firm has engaged a third-party international corporate governance research and
proxy voting service provider (‘third party proxy voting service provider’) to
provide voting recommendations and research relating to upcoming proxy votes.
Origin sets its voting policy annually, and once set, uses the Broadridge proxy
voting platform service to execute that policy. The Firm has chosen to actively
vote proxies for all clients according to its voting policy, unless a client
does not wish or require us to do so. Any proxy voting arrangements shall be
approved by the Stewardship Committee. Origin has elected to follow the Glass
Lewis standard Proxy Voting Guidelines (the ‘Guidelines’), which embody the
positions and factors that the Firm’s investment team generally consider
important in casting proxy votes.
The
Firm must:
(a)Adopt
and implement written policies and procedures that are reasonably designed to
ensure that the Firm votes client securities in the best interest of
clients.
(b)Disclose
to clients how they may obtain information from the Firm about votes with
respect to securities; and
(c)Describe
to clients the proxy voting policies and procedures and, upon request, provide
the clients with a copy of these policies and procedures.
(d)Take
steps to demonstrate that it is making voting determinations in a client’s best
interests.
(e)Consider
factors such as the third-party proxy voting service provider’s capacity and
competency when deciding whether to use a proxy advisory firm.
(f)Take
steps to ensure that its voting determinations are not based on materially
inaccurate or incomplete information. This can take the form of scrutinising the
third- party proxy service provider firm’s procedures.
The
duty of care requires the Firm to monitor corporate actions and vote client
proxies. This does not necessarily mean that a failure to vote every proxy would
necessarily violate fiduciary obligations. Due to the nature of some of the
holdings, how they are registered, and our strategies, there will be many times
when refraining from voting a proxy will be in the client's best interest. This
will mainly be when it is determined that the cost of voting a proxy exceeds the
expected benefit to a client. It is not mandatory to vote proxies on behalf of a
client where this has been covered by a prior agreement with the
client.
Origin’s
use of Third-Party Proxy Voting Advisory Providers
Origin
engages with their clients to assess particular themes of interest around
governance and corporate behaviour. The Origin Proxy Voting Policy will be set
to reflect both the clients’ wishes and industry best practice. The Origin team
will work together with the team at Glass Lewis to ensure that the GL voting
recommendations are tailored to meet the objectives of the Origin Proxy Voting
Policy as far as is possible.
The
Firm believes that the third-party proxy voting provider has the necessary
resources, in- depth knowledge and expertise to provide recommendations that are
in the best interests of our clients. As mentioned above, Origin sets a voting
policy annually, and once set, uses the Broadridge proxy voting service to
execute that policy. At present, Origin has elected to follow the Glass Lewis
standard Proxy Voting Guidelines (the ‘Guidelines’). The Firm may deviate from
these guidelines on the basis of a client request or where it believes it do be
in the client’s best interest to do so. A Stewardship committee has been
established to evaluate and review the services provided by the third-party
proxy voting provider and voting platform. This committee shall also develop and
maintain the Firm’s Proxy Voting Policy and consider any requests to override
the chosen voting guidelines.
Voting
Procedure Summary
The
Firm shall obtain from the third-party proxy voting service provider a
notification of all pending proxy vote opportunities. The Custodian will provide
a list of all proxy voting requests relevant to the Firm’s holdings to the
third-party proxy voting service provider. The third- party proxy voting service
provider shall then issue the recommendations corresponding to this list. These
are then returned to the Custodian for instruction and votes are cast via a
voting platform in accordance with the voting policy. Prior to the votes being
returned to the Custodian to be cast, the Firm’s operations team access the
voting platform and confirm the voting decisions. This will usually be in line
with the recommendations provided by the third- party proxy voting service
provider, but the Firm does have the option to override these recommendations at
this stage, should the client request this or should the Firm deem it to be in
the client’s best interest.
The
rationale for disagreeing with a guideline proxy voting recommendation as per
the Origin Proxy Voting Policy must be discussed, recorded and agreed with
Compliance before the override is enacted. A record of all voting decisions is
maintained by the Firm and the Custodian.
Conflicts
of Interests in respect of voting Proxies
When
the Firm has, or may have, a conflict of interest between it and its clients, or
between one client and another, it must pay due regard to the interests of each
customer and manage the conflict of interest fairly.
Where
a conflict arises, or may arise, the Firm must not knowingly advise or deal in
the exercise of discretion, in relation to that transaction unless it takes
reasonable steps to ensure fair treatment for the client. The Firm’s client
agreements make a formal disclosure that such conflicts could arise (i.e.
non-exclusivity), and by doing so puts the customer on notice of the
possibility. This keeps the Firm within the strict letter of the rules and
principles, but it is an overriding policy of the Firm that all such conflicts
should be brought to the attention of the Compliance Officer in order that they
may be sure that the Firm’s procedures are adequate.
If
an investment decision is made for any client that departs from previous advice
or recorded strategy for that client or which may result in an increased risk
profile for the client's portfolio, the Firm must record the reasons behind the
decision. If the reasons are the same for a number of clients or transactions,
only one record needs to be made. These records must be made in writing and be
kept in the relevant client files.
The
Firm will notify clients of how they may obtain a copy of how the Firm voted
free of charge and will provide a contact for that purpose.
Compliance
Monitoring and Policy Review
An
investment adviser that retains a third party proxy advisory service provider to
provide voting recommendations or voting execution services also should consider
additional steps to evaluate whether the investment adviser’s voting
determinations are consistent with its voting policies and procedures and in the
client’s best interest before the votes are cast. The operations and investment
teams view all “pre-populated” vote recommendation by the third-party proxy
advisory firm before they are cast via the electronic voting
platform.
The
Firm’s ongoing compliance monitoring program will include;
1)An
annual review of the Firm’s internal compliance monitoring procedures and
policies with respect to proxy voting.
2)An
annual review of the adequacy of service provided by the third-party proxy
voting service provider and its compliance with the SEC guidelines and federal
law with respect to proxy voting.
3)A
quarterly review of the ongoing communication of voting intentions to the
investment team to ensure that these are visible to the investment
team.
4)A
quarterly sample test of pre-populated voting intentions focused on votes that
are likely to impact the client, such as those for corporate events or contested
elections of directors, to ensure the voting rationales and relevant background
information supplied by the third party proxy voting service provider is
available and of adequate quality.
5)Ad-hoc
reviews of company-specific voting intentions where the Firm considers this
appropriate based on the above sample testing.
The
Firm is in compliance with the Financial Reporting Council’s UK Stewardship Code
and Shareholders Rights Directive II regarding corporate governance and
engagement. The latest disclosure response to the UK Stewardship Code and
Shareholders Rights Directive II is available on the Origin website
(https://www.originam.com/)
ORIGIN
ASSET MANAGEMENT
Procedures
and Control Processes Proxy voting
December
2022
Control
objective 8: Responsibility for generating proxy voting instructions is clearly
established.
Proxy
voting instructions are generated and recorded and carried out accurately and in
a timely manner.
Whilst
Origin has full oversight responsibilities, the generation of proxy voting
instructions and ensuring that they are recorded and carried out accurately and
in a timely manner has been outsourced to the international governance research
and voting specialist Glass Lewis and the Broadridge ProxyEdge voting platform
with monitoring and oversight undertaken by Origin.
Glass
Lewis is an independent global voting and governance specialist and is currently
used by institutional investors representing over $15 trillion in assets. Its
team of approximately 200 full time researchers provides contextual, objective
governance analysis and proxy voting recommendations on shareholder votes on
over 23,000 companies in 100 markets worldwide.
For
clients that require us to vote proxies the firm’s default policy is to set up
standing instructions for all global markets where Origin is invested with
Broadridge via their web based online system ProxyEdge to vote in line with the
Glass Lewis proxy guidelines. These are available at www.glasslewis.com.
The
proxy guidelines specifically address key governance issues such as board
composition, remuneration, the appointment of auditors, dividend distributions
and Long Term Incentive Plans.
Access
to our online ProxyEdge log in is restricted to the members of the operations
team. Having set up standing instructions for all client accounts that require
us to vote proxies as detailed above, the operations team also receive regular
email notifications from ProxyEdge whenever a shareholder meeting has been
announced providing brief details of the company, meeting date and vote
instruction deadline.
The
operations team on at least a monthly basis log in to ProxyEdge to check and
review that all meetings have been voted in accordance with the Glass Lewis
recommendations mentioned above.
On
a bi-monthly basis, the Operations Team will download a report and circulate
this to the Investment Team (cc: Compliance) of all impending votes for the next
two months together with recommendations from Glass Lewis. This gives the
Investment Team visibility and the option to amend on any
proposals.
The
Operations Team also has access to the Glass Lewis recommendations and rationale
via a link within ProxyEdge. This link opens the Glass Lewis website (a specific
log-in and password are required) and directs the user to the reports for the
specific company vote which can be downloaded if required. There is also a
search function to check recommendations for historic meetings.
A
summary of meetings held and shares voted is produced on a quarterly basis as
part of our client reporting to both segregated and pooled fund clients by
generating and downloading Vote Audit and Vote Summary reports from ProxyEdge
for the period.
The
downloaded reports in both Excel and PDF formats are saved to the shared drive
K:\ Operations \ Proxy Voting \ Reports and then reformatted and edited
accordingly in Excel prior to being cut and pasted into the client reports. The
edited reports produced by a member of the operations team are subsequently
checked and reviewed by a senior member of the operations team.
The
collation and production of all monthly and quarterly client reporting is
covered in detail under Procedure 4 – Client Reporting.
The
firm is in compliance with the Financial Reporting Council’s UK Stewardship Code
and Shareholders Rights Directive II regarding corporate governance and
engagement.
A
copy of Origin’s latest disclosure response to the UK Stewardship Code and
Shareholders Rights Directive II is stored in the shared drive K:\ Policies
& Procedures
Compliance
Monitoring and Policy Review
An
investment adviser that retains a third party proxy advisory service provider to
provide voting recommendations or voting execution services also should consider
additional steps to evaluate whether the investment adviser’s voting
determinations are consistent with its voting policies and procedures and in the
client’s best interest before the votes are cast. The operations and investment
teams view all “pre-populated” vote recommendation by the third party proxy
advisory firm before they are cast via the electronic voting
platform.
Compliance
will conduct the following reviews:
1)An
annual review of the Firm’s internal compliance monitoring procedures and
policies with respect to proxy voting.
2)An
annual review of the adequacy of service provided by the third party proxy
voting service provider and its compliance with the SEC guidelines and federal
law with respect to proxy voting. Compliance will review the Glass Lewis
documentation under the Compliance section of their website (https://www.glasslewis.com/due_diligence_resources/).
The object is to ensure that Glass Lewis processes and procedures are in line
with relevant SEC guidance as well as the SRDII.
3)A
quarterly review of the ongoing communication of voting intentions to the
investment team to ensure that these are visible to the investment team. As part
of the monthly compliance monitoring plan, compliance currently check that the
operations team have shared the voting recommendations from Glass Lewis for
upcoming votes with the compliance and investment teams. There is an automatic
Proxy Edge email alert containing corporate events alerts and one from Operation
with a summary of all upcoming proxy votes.
The
emails look like this:
4)A
quarterly sample test of pre-populated voting intentions focused on votes that
are likely to impact the client, such as those for corporate events or contested
elections of directors, to ensure the voting rationales and relevant background
information supplied by the third party proxy voting service provider is
available and of adequate quality.
5)Ad-hoc
reviews of company-specific voting intentions where the Firm considers this
appropriate based on the above sample testing.
PineBridge
Investments LLC
Proxy
Voting Policies and Procedures
January
2023
The
information contained herein is the property of PineBridge Investments and may
not be copied, used, or disclosed, in whole or in part, stored in a retrieval
system, or transmitted in any form or by any means (electronic, mechanical,
reprographic, recording, or otherwise) without the prior written permission of
PineBridge Investments.
Proxy
Voting Policies and
Procedures PineBridge
Investments
I.Introduction
Proxy
voting is an important right of shareholders, such as PineBridge Clients, for
which PineBridge must take reasonable care and diligence to ensure such rights
are properly and timely exercised. PineBridge, as a fiduciary for its Clients,
must vote proxies in their best interest. We believe considering forward looking
improvement in ESG issues is in the economic interest of our Clients. Please
refer to the PineBridge Stewardship and Engagement Policy for details on how
PineBridge interacts with companies, entities or other market participants on
Environmental, Social and Governance (ESG) issues.
II.Policy
Statement
Proxy
Procedures
As
a registered investment adviser that votes (or delegates the voting of)
securities held in Client portfolios, PineBridge has implemented proxy voting
procedures that are reasonably designed to help ensure that a) PineBridge votes
proxies in the best interest of its Clients; b) describes its proxy voting
procedures to its Clients, and c) discloses to Clients how they may obtain
information on how PineBridge voted their proxies. These procedures are designed
to help enable PineBridge to manage material conflicts of interest. While
PineBridge must disclose its votes upon request to Clients, no public disclosure
is required. (Note that disclosure is required for any mutual funds advised by
PineBridge, on Form N-PX.)
Record-Keeping
PineBridge
must retain (i) these proxy voting policies and procedures; (ii) proxy
statements received regarding Client securities; (iii) records of votes it casts
on behalf of Clients; (iv) records of Client requests for proxy voting
information, and; (v) any documents prepared by PineBridge that were material to
making a decision how to vote, or that memorialized the basis for the decision.
PineBridge may rely on proxy statements filed on EDGAR instead of keeping its
own copies and rely on proxy statements and records of proxy votes cast by
PineBridge that are maintained by contract with a third-party proxy voting
service or other third party.
Proxies
of Shares of Non-U.S. Corporations
PineBridge
has implemented general voting policies with respect to non-U.S. shares owned by
Clients. However, although U.S. companies must give shareholders at least 20
days’ advance notice to vote proxies, some non-U.S. companies may provide
considerably shorter notice or none at all. PineBridge is not required to “rush”
voting decisions in order to meet an impractical deadline, and as a result,
PineBridge or PineBridge affiliates’ regional designees under certain
circumstances may not vote certain proxies. In addition, certain non-U.S.
regulations impose additional costs to a Portfolio that votes proxies, and
PineBridge will take that into consideration when determining whether or not to
vote.
In
the case of a material conflict between the interests of PineBridge and those of
its Clients, PineBridge will take steps to address such conflicts (which may
include consulting with counsel) and will attempt to resolve all conflicts in
the Client’s best interest.
Proxy
Voting Policies and
Procedures PineBridge
Investments
III.Procedures
•Compliance
is responsible for ensuring that the PineBridge ADV includes the appropriate
language summarizing PineBridge’s proxy voting procedures and for updating the
summary in the ADV whenever the procedures are updated. Compliance is also
responsible for consulting with Legal to ensure that PineBridge’s proxy voting
policy is kept up to date and in a form appropriate for transmission to
Clients.
•If
a Client or potential Client requests a copy of the Proxy Voting Policy from
Client Relations or Sales, Compliance should be contacted for the most recent
version, or it may be obtained from the intranet. Client Relations will send to
such Client a copy of the current version of the voting procedures within 7 days
and will ensure that Compliance receives a log of each Client’s request and the
action taken.
•If
a Client requests access to the records of how PineBridge voted its proxies, the
Client should be assured that this will be provided, and Operations should be
consulted. Operations has access to these proxy voting records.
•PineBridge
has established a Stewardship Committee (the “Committee”), which is responsible
for defining and monitoring PineBridge’s proxy voting strategy and process. The
Committee is comprised of members of senior management, portfolio management,
Compliance, Legal, Product and Operations.
•The
Committee conducts an annual review of the proxy voting guidelines for domestic
and non-U.S. Portfolios. Guidelines are reviewed to ensure that the interests of
PineBridge’s Clients are best served.
•Issues
not addressed in the voting guidelines are determined on a case-by-case basis
with input from the Committee and portfolio managers.
•PineBridge
has engaged a third-party vendor to administer proxy voting on its behalf. The
vendor receives, in a majority of cases, proxies directly from the Client’s
custodian and votes them based on PineBridge’ s voting guidelines.
•In
circumstances where PineBridge receives proxies directly, these proxies must be
sent to the vendor promptly. The vendor then votes them in accordance with
PineBridge’s voting guidelines. The vendor maintains a listing of all votes cast
on behalf of PineBridge Clients.
Polen
Capital Credit, LLC Proxy
Voting
Policies
and
Procedures
Updated
May
3,
2022
Overview
In
accordance
with
the
fiduciary
duties
owed
to
our
clients
and
Rule
206(4)-6
promulgated
by
the
Securities
and
Exchange
Commission
(the
“SEC”)
under
the
Investment
Advisers
Act
of
1940
(the
“Advisers
Act”),
Polen
Capital
Credit,
LLC
(“Polen
Credit”)
has adopted and
implemented
these
Proxy Voting Policies and Procedures (the “Policies”)
that
we
believe
are
reasonably
designed to ensure that proxies are voted in the best interests of our clients
that have delegated proxy voting authority to us.
Proxy
Voting
Guidelines
and
Procedures
Given
the credit-oriented focus of Polen Credit’s investment strategies, Polen Credit
primarily manages investments in high yield fixed income, rather than equity
securities. As a result, equity investments,
in
particular
in
public
companies
that
regularly
disseminate
proxy
voting
materials
to
their
shareholders,
typically
constitute
a
very
small
percentage
of
the
total
assets
managed
by
Polen
Credit. Proxy voting in publicly-traded equities therefore is typically not a
material element of Polen Credit’s significant investment
strategies.
When
a client grants Polen Credit proxy voting authority, we will vote such proxies
in the best interests
and
for
the
benefit
of
such
client
in
accordance
with
our
fiduciary
duty
and
all
applicable
laws
and
regulations.
We
believe
that
this
approach
means
voting
in
accordance
with
our
judgment
as
to
what
voting
decision
is
most
likely
to
maximize
total
return
to
the
client
as
an
investor
in
the
company whose securities are being voted, including, where applicable, returns
to the client on positions held in non-voting securities of that issuer or
securities of other issuers that may be materially affected by the outcome of
the vote.
Normally,
voting decisions are made by the research analyst (or portfolio manager)
responsible at the time of the vote for monitoring the corporate events of the
particular
issuer
of
the
securities
to
be
voted.
Polen
Credit
believes
that
it
is not appropriate, in most cases, to vote proxies with respect to the
securities of such issuers in accordance with fixed, pre-determined guidelines.
Accordingly, Polen Credit generally reviews and makes a voting decision on each
matter presented in such proxy on an individual, case-by- case
basis.
These
Policies are intended to support good corporate governance, including those
corporate practices
that
address
environmental
and
social
issues,
in
all
cases
with
the
objective
of
protecting
shareholder interests and maximizing shareholder value.
Accordingly,
to the extent that Polen Credit identifies a material ESG (environmental,
social, or governance) issue with respect to a particular company, it factors
such information into its decision-making process with respect to
proxy
voting
and
exercises
discretion
that
it
deems
appropriate
and
in
the
best
interests
of
its
clients
in a manner consistent with the firm’s Responsible Investment
Policy.
Polen
Credit
utilizes
a
third
party
service
provider,
Institutional
Shareholder
Services
(“ISS”)
for
research
and recommendations with respect to certain proxy issues, and for facilitating
the processing of Polen Credit’s selections for each proxy vote.
In
voting proxies pursuant to these Policies,
Polen
Credit
may
consult
ISS’s
Sustainability
Voting
Guidelines,
but
in
all
instances,
we
will
make
an
independent
decision
for
each
vote
on
a
case-by-case
basis.
Additional
information
about ISS and the ISS Sustainability Voting Guidelines is available at
http://www.issgovernance.com/policy.
The
Polen Credit operations department has designated an internal proxy
administrator, who is responsible
for
coordinating
the
review
and
voting
of
client
proxies,
including,
without
limitation,
circulating the proxy with respect to the applicable research analyst (or
portfolio manager) responsible for the voting the proxy and subsequently
submitting any applicable proxy vote on behalf of Polen Credit clients within
the ISS platform prior to any applicable deadlines.1
In
certain
circumstances,
Polen
Credit
may
elect
to
not
vote
a
proxy
with
respect
to
securities
held
in client accounts, including, but not limited to, situations where (a) the
securities are no longer held in a client’s account; (b) the proxy or related
materials are not received in sufficient time to allow Polen Credit to analyze
the material or cast an informed vote by the voting deadline; or (c) Polen
Credit concludes that the costs of voting a proxy outweigh any potential
benefits to its clients.
In
addition, Polen Credit may seek voting instructions from some or all of the
clients holding the securities to be voted, and, as a result, client
instructions may cause Polen Credit to vote differently for different clients on
the same matter.
1
Notwithstanding
the
foregoing,
from
time
to
time,
Polen
Credit
clients
may
hold
private
equity
positions
(typically,
in
connection
with
the
restructuring
of
a
prior
fixed
income
position).
To
the
extent
applicable,
these
Policies
also
set
forth
Polen
Credit’s
approach
with
respect
to
any
shareholder
voting
of
private
equity
holdings
in
such
client
accounts.
However,
a
member
of
the
investment
team
(typically,
the
Associate
General
Counsel)
will
assume
responsibility
for
reviewing and processing such votes on behalf of Polen Credit’s
clients.
Material
Conflicts
of
Interest
If
the
research
analyst
(or
portfolio
manager)
responsible
for
recommending
a
proxy
vote
identifies
a material
conflict
of
interest
between our interests and the interest of our clients, such individual
(and/or
the
internal
proxy
administrator)
will
notify
the
firm’s
general
counsel
&
chief
compliance
officer.
If
the
general
counsel
&
chief
compliance
officer
agrees
that
a
material
conflict
of
interest
exists, Polen Credit generally will request a waiver of the conflict of interest
or otherwise seek to obtain voting instructions from the affected client(s), or
an authorized representative of the client(s) (or, in limited circumstances, an
appropriate independent third party).
In
the event that the
client(s),
client
representative(s),
or
other
third
party,
as
the
case
may
be,
do
not
desire
to
direct
the vote of the proxy matter in question, Polen Credit may, as circumstances
warrant, take other steps,
such
as
consulting
with
its
outside
legal
counsel
or
an
independent
third
party
service,
which
steps are designed to result in a decision that is demonstrably based on the
clients’ best interests and not the product of the conflict.
If
a material conflict cannot be resolved as described above, Polen Credit will not
vote the proxy on behalf of such client(s).
Maintenance
of
Proxy
Voting
Records
As
required
by
Rule
204-2
under
the
Advisers
Act,
Polen
Credit
maintains
records
of
proxies
that
it has voted on behalf of its clients.
These
records include:
•a
copy of Polen Credit’s internal policies and procedures with respect to proxy
voting, as updated from time to time;
•copies
of
proxy
statements
received
regarding
securities
held
in
client
accounts,
unless
the
materials are available electronically through the SEC’s EDGAR
system;
•a
record
of
each
vote
cast
on
behalf
of
our
clients;
•a
copy
of
any
internal
documents
created
by
Polen
Credit
that
were
material
to
making
the
decision how to vote proxies on behalf of its clients; and
•each
written
client
request
for
proxy
voting
records
and
Polen
Credit’s
written
response
to
any (written or oral) client request for such records.
Polen
Credit will maintain these
proxy
voting
books and records for a
period
of
not
less than five years.
Disclosure
Polen
Credit
will
provide
each
client
with
either
a
copy
of
these
Policies
or
a
summary
thereof.
In
addition, upon the request of any client, Polen Credit will provide each client
with information with respect to how Polen Credit voted any proxies on behalf of
such client.
Proxy
and Corporate Action Voting Policy
Dated
March 2020
Policy
When
voting proxies or acting on corporate actions for clients, Post will decide
based on the best interests of its clients. Post shall act in a prudent and
diligent manner and make voting decisions Post believes enhance the value of the
assets of client accounts. With respect to ERISA accounts, plan beneficiaries
and participants, voting will be in accordance with ERISA and the U.S.
Department of Labor (“DOL”) guidance thereunder. Unless a client specifically
reserves the right to vote its own proxies or to take shareholder action in
other corporate actions, Post will vote proxies or act on other actions received
in sufficient time prior to their deadlines as part of its discretionary
authority over the assets. Corporate actions may include, for example and
without limitation, tender offers or exchanges, bankruptcy proceedings, and
class actions.
Background
Post
Advisory Group, LLC (“Post”) acts as discretionary investment adviser for
various clients, including clients governed by the Employee Retirement Income
Security Act of 1974 (“ERISA”) and registered open-ended investment companies
(“mutual funds”). While Post primarily manages fixed income securities, it does
occasionally hold a limited amount of voting securities or securities for which
shareholder action is solicited in a client account.
Responsibility
The
Chief Compliance Officer (CCO) is responsible for establishing this policy,
ensuring that this policy is consistent with applicable federal securities laws
and regulations, updating this policy based on changes to federal securities
laws and regulations and providing effective disclosure of this policy as
applicable. Additionally, the Compliance Department (Compliance) is responsible
for evaluating this policy no less frequently than annually. Compliance is also
responsible for restricting securities with pending corporate actions in Charles
River.
Post’s
Operations Department is responsible for voting proxies in a timely manner and
consistently across portfolios as well as handling clients’ corporate
actions.
Proxy
Voting Procedures
Operations
will consider each proxy issue individually and vote in a manner which Post
believes enhances the value of client accounts overall. Where a proxy proposal
raises a material conflict of interest between Post’s interests and the
client’s, Post will disclose the conflict to the relevant clients and obtain
their consent to the proposed vote prior to voting the securities. When a client
does not respond to such a conflict disclosure request or denies the request,
Post will abstain from voting the securities held by that client’s account.
Corporate
Actions Procedures
The
following procedures are following in addressing corporate actions:
•Operations
will receive notifications of corporate actions from StateStreet.
•Operations
will request and receive instructions from the relevant PM or Analyst covering
the security.
•Operations
will vote consistent with the instructions in State Street’s CApTAIN system and
send confirmatory documentation back to the relevant PM or Analyst.
•For
mandatory calls, Operations will add the positions to the cash sheet and
Compliance will add those securities to a restricted list in Charles
River.
•State
Street will automatically execute exchanges due to standing instructions from
Post.
Record
Retention
All
records associated with this policy that require retention shall be maintained
according to the record retention obligations enumerated in the attached
Recordkeeping Policy.
Proxy
and Corporate Action Voting Policy 1
BAIRD
EQUITY ASSET MANAGEMENT
BAIRD
EQUITY AM’S PROXY VOTING POLICIES AND PROCEDURES
Revised
Effective November 18, 2020
I.
BACKGROUND
Rule
206(4)-6 under the Investment Advisers Act of 1940 (the “Advisers Act”) requires
that, for an investment adviser to exercise voting authority with respect to
client securities, the adviser must:
•adopt
and implement written policies and procedures that are reasonably designed to
ensure that the adviser votes clients securities in the best interest of
clients, which procedures must include how the adviser addresses material
conflicts that may arise between the adviser’s interests and those of the
adviser’s clients;
•disclose
to clients how they may obtain information from the adviser about how the
adviser voted with respect to their securities; and
•describe
to clients the adviser’s proxy voting policies and procedures and, upon request,
furnish a copy of the policies and procedures to the requesting
client.
Rule
204-2 of the Advisers Act requires that registered investment advisers maintain
records of its proxy voting policies and procedures; proxy statements received;
votes cast on behalf of clients; client requests for proxy voting information;
and documents prepared by the investment adviser that were material to making a
voting decision.
II.
POLICY
The
Baird Equity Asset Management department (“Baird Equity AM”) of Robert W. Baird
& Co. Incorporated (the “Advisor” or “Baird”) exercises voting authority
with respect to securities held by advisory clients that have executed advisory
agreements with Baird and that have delegated proxy voting authority to Baird.
Baird owes these clients duties of care and loyalty. Baird’s duty of loyalty
requires Baird to vote the proxies in a manner consistent with the best
interests of advisory clients. While Baird uses its best efforts to vote
proxies, there are instances when voting is not practical or is not, in Baird or
the portfolio manager’s view, in the best interest of clients.
As
a fiduciary, Baird will ascertain whether the independent proxy voting service
has the capacity and competency to analyze proxy issues, which may include
considering: the adequacy and quality of the independent proxy voting service’s
staffing and personnel; the robustness of its policies and procedures regarding
its ability to (i) ensure that its proxy voting recommendations are based on
current and accurate information and (ii) identify and address any conflicts of
interest. Further, Baird should ensure that these voting guidelines or
recommendation policies are generally appropriate for the clients whose proxies
are being voted.
Baird
Equity Asset Management of
Robert
W. Baird & Co. Incorporated
III.PROXY
VOTING COMMITTEE
Baird
has established a Proxy Voting Committee (the “Committee”) to oversee Baird’s
proxy voting practices, including oversight of the independent proxy voting
service. The Committee has established a Proxy Committee Charter to describe its
responsibilities under these policies and procedures. The Committee will review,
at least annually, these Proxy Voting Policies and Procedures and its Charter.
Further, the Committee will appoint a Sub-Committee for Baird’s Asset Management
groups to consider proxy voting challenges made by its portfolio
managers.
IV.PROXY
VOTING GUIDELINES
Baird
utilizes an independent provider of proxy voting and corporate governance
service to analyze proxy materials and votes and make independent voting
recommendations (the “independent proxy voting service”). Baird’s independent
proxy voting service is currently Institutional Shareholder Services Inc.
(“ISS”).The independent proxy voting service provides proxy voting guidelines
regarding its position on various matters presented by companies to their
shareholders for consideration. Baird will typically vote shares in accordance
with the recommendations made by the independent proxy voting service. However,
the independent proxy voting service’s guidelines are not exhaustive, do not
address all potential voting issues, and do not necessarily correspond with the
opinions of the portfolio managers.
In
the event the portfolio manager believes the independent proxy voting service
recommendation is not in the best interest of the client, he/she will bring the
issue (a “proxy challenge”) to the Sub- Committee by completing a Proxy Vote
Challenge Form, which describes, among other things, the issue(s) up for vote
and the portfolio manager’s rationale for voting against the voting
recommendation of the independent proxy voting service. The Sub-Committee will
consider what is in the best interest of clients when evaluating the proxy
challenge, including an evaluation of the portfolio manager’s rationale and any
potential conflicts of interest. The decision made by the Sub- Committee on the
proxy challenge will apply to all advisory accounts managed by the portfolio
manager (or team of portfolio managers) that submitted the Proxy Voting
Challenge Form, unless the client has directed Baird to utilize specific voting
guidelines (e.g., Taft-Hartley guidelines).
For
those matters for which the independent proxy voting service does not provide a
specific voting recommendation, the portfolio manager will be responsible for
casting the vote in a manner he/she believes is in the best interest of
clients.
V.PROXY
VOTING EXCEPTIONS
There
are instances when voting is not practical or is not, in Baird or the portfolio
manager’s view, in the best interest of clients. Some examples of these types of
situations are described below:
Certain
Foreign Companies.
Voting proxies of companies located in some jurisdictions may involve several
issues that can restrict or prevent the ability to vote such proxies or entail
additional costs, including, but not limited to: (i) requirements to vote
proxies in person; (ii) restrictions on the sale of the securities for a period
of time in proximity to the shareholder meeting; (iii) proxy statements and
ballots being written in a language other than English; (iv) untimely notice of
shareholder meetings; (v) restrictions on a foreigner’s ability to exercise
votes; and (vi) requirements to provide local agents with a power of attorney to
facilitate voting instructions. Baird will use a best efforts basis to vote
proxies in these situations after weighing the costs and benefits of voting such
proxies.
Baird
Equity Asset Management of
Robert
W. Baird & Co. Incorporated
Securities
Lending Program.
The voting rights for shares that are out on loan are transferred to the
borrower and therefore the lender is not entitled to vote the lent shares at the
shareholder meeting. In general, Baird believes the revenue received from the
lending program outweighs the ability to vote. Therefore, when a client has
entered into a securities lending program, Baird generally will not seek to
recall the securities on loan for the purpose of voting the securities; however,
Baird reserves the right to recall the shares on loan on a best efforts basis if
the portfolio manager becomes aware of a proxy proposal where the proxy vote is
materially important to the client’s account.
VI.
CONFLICTS OF INTEREST
There
may be instances where Baird’s interests conflict, or appear to conflict, with
advisory client interests. For example, Baird (or a Baird affiliate) may manage
a pension plan, administer employee benefit plans, or provide brokerage,
underwriting, insurance or banking services to a company whose management is
soliciting proxies. Or, for example, Baird (or Baird’s senior executive
officers) may have business or personal relationships with corporate directors
or candidates for directorship. There may be a concern that we would vote in
favor of management because of our relationship with the company.
We
generally believe a material conflict exists if a portfolio manager (or team of
portfolio managers) (i) manages or is pursuing management of accounts that are
affiliated with the company soliciting proxies, (ii) is aware of investment
banking or other relationships that the Advisor has or is pursuing with the
company soliciting proxies (or its senior officers) that may give Baird an
incentive to vote as recommended by the company, or (iii) has been asked or
directed by persons associated with the Advisor or the company soliciting
proxies to vote proxies in a certain manner in order to maintain or develop a
relationship between the Advisor and the company. The Sub-Committee may also
determine a material conflict of interest exists for other reasons.
Baird’s
duty is to vote proxies in the best interests of advisory clients. As noted
above under the Proxy Voting Guidelines section, Baird will typically vote
shares in accordance with the recommendations made by the independent proxy
voting service, which generally mitigates conflicts. However, in situations
where there is a conflict of interest and the independent proxy voting service
does not provide a recommendation or there is a proxy challenge, the
Sub-Committee will determine the nature and materiality of the
conflict.
•If
the conflict is determined to not be material, the Sub-Committee will vote the
proxy in a manner the Sub-Committee believes is in the best interests of the
client and without consideration of any benefit to the Advisor or its
affiliates.
•If
the conflict is determined to be material, the Sub-Committee will take one of
the following steps to resolve the conflict:
1.Vote
the securities in accordance with the recommendations of an independent third
party, such as ISS;
2.Refer
the proxy to the advisory client or to a fiduciary of the advisory client for
voting purposes;
3.Suggest
that the advisory client engage another party to determine how the proxy should
be voted;
4.If
the matter is not addressed by the independent proxy voting service, vote in
accordance with management’s recommendation; or
Baird
Equity Asset Management of
Robert
W. Baird & Co. Incorporated
5.Abstain
from voting.
VII.
PROCEDURES
Baird
uses ISS’s electronic voting management system (“proxy voting system”) to assist
with executing proxy votes on behalf of clients. Baird Equity Asset Management’s
voting instructions for clients are typically pre-populated in the proxy voting
system with the ISS voting recommendation shortly after such recommendation is
made available by ISS. The vote instruction may be changed in the proxy voting
system until the voting cut-off time (e.g., due to a portfolio manager challenge
approved by the Committee).
The
portfolio managers (or portfolio manager team) are responsible for:
•casting
the vote in a manner he/she believes is in the best interest of
clients;
•being
familiar with the proxy voting guidelines of the independent proxy voting
services; and
•completing
the Proxy Voting Challenge Form and submitting on a timely basis to the Proxy
Voting Sub-Committee when he/she believes the independent proxy voting service
recommendation is not in the best interest of the client.
Baird
Equity AM Operations is responsible for:
•ensuring
a copy of the proxy voting guidelines (and/or changes made to such guidelines)
established by the independent proxy voting service are distributed, at least
annually, to the portfolio managers (or portfolio management
teams);
•distributing
periodic reports to the portfolio managers (or portfolio management teams) on
upcoming shareholder meetings to assist the portfolio managers in identifying
proposals that may not necessarily correspond with the opinions of the portfolio
managers (e.g., recommendations against management);
•coordinating
with the portfolio manager (or portfolio manager team) the voting recommendation
for those matters for which the independent proxy voting service does not
provide a specific voting recommendation;
•coordinating,
with the assistance of the Compliance Department as needed, any Proxy Voting
Sub-Committee meetings;
•ensuring
a conflicts check is performed in situations where there is a proxy challenge or
the independent proxy voting service does not provide a recommendation or there
is a proxy challenge;
•ensuring
the results of any Sub-Committee meetings are communicated to the portfolio
manager (or portfolio manager teams) and, if the proxy challenge is approved by
the Sub- Committee, notifying Baird’s Proxy Support team to cast the votes in
accordance with the Sub-Committee’s instructions;
•confirming,
when possible prior to the voting cut-off date, that Baird’s Proxy Support team
properly recorded into the voting instructions into the proxy voting system
(currently, ISS) for any approved proxy challenge or for any matters where the
independent proxy voting service did not provide a recommendation;
and
•notifying
the Proxy Support area of Baird’s Operations group when advisory client request
for information on how Baird voted proxies on the advisory client’s
behalf.
Baird
Equity Asset Management of
Robert
W. Baird & Co. Incorporated
The
Proxy Support area of Baird’s Operations group is responsible for:
•sending
to the Baird Equity AM Operations any proposals in which the third party proxy
voting services has not provided a recommendation, and
•recording
or updating, based on the instructions received, the voting instructions in the
proxy voting system for (i) any approved proxy voting challenges and (ii) any
matters where the proxy voting service did not provide
instructions.
VIII.DISCLOSURE
TO CLIENTS
Baird
will disclose to clients how they can obtain information from us on how client
portfolio securities were voted. At the same time, we will provide a summary of
these proxy voting policies and procedures to clients and, upon request, will
provide them with a copy of the same. These disclosures will be made in Baird’s
Form ADV Part 2A (Brochure).
IX.RECORDKEEPING
The
applicable department or department unit will maintain the following records
with respect to proxy voting:
•a
copy of the proxy voting policies and procedures is maintained by the Compliance
Department;
•a
copy of all proxy statements received is maintained through the proxy voting
system (currently, ISS), the SEC’s EDGAR system or by the Proxy Support
team;
•a
record of each vote cast on behalf of an advisory client is maintained through
the proxy voting system (currently, ISS) or by the Proxy Support
team;
•a
copy of any document prepared by Baird that was material to making a voting
decision or that memorializes the basis for that decision is maintained as part
of the records of the Proxy Voting Sub-Committee;
•a
copy of each written advisory client request for information on how Baird voted
proxies on the advisory client’s behalf is maintained by Baird Equity AM
Operations; and
•a
copy of any written response to any advisory client request (written or oral)
for information on how proxies were voted on behalf of the requesting advisory
client is maintained by Baird Equity AM Operations.
These
books and records shall be made and maintained in accordance with the
requirements and time periods provided in Rule 204-2 of the Advisers
Act.
Baird
Equity Asset Management of
Robert
W. Baird & Co. Incorporated
SPECTRUM
ASSET MANAGEMENT, INC.
Policy
on Proxy Voting
For
Investment Advisory Clients
2023
GENERAL
POLICY
Spectrum,
an investment adviser registered with the Securities and Exchange Commission,
acts as investment advisor for various types of client accounts (e.g. employee
benefit plans, governmental plans, mutual funds, insurance company separate
accounts, corporate pension plans, endowments and foundations). While
Spectrum receives few proxies for the preferred shares it manages, Spectrum
nonetheless will, when delegated the authority by a client, vote these shares
per the following policy voting standards and processes:
STANDARDS:
Spectrum’s
standards aim to ensure the following in keeping with the best interests of its
clients:
•That
Spectrum act solely in the interest of its clients in providing for ultimate
long-term stockholder value.
•That
Spectrum act without undue influence from individuals or groups who may have an
economic interest in the outcome of a proxy vote.
•That
the custodian bank is aware of our fiduciary duty to vote proxies on behalf of
others – Spectrum relies on the best efforts of the custodian bank to deliver
all proxies we are entitled to vote.
•That
Spectrum will exercise its right to vote all proxies on behalf of its clients
(or permit clients to vote their interest, as the case(s) may be).
•That
Spectrum will implement a reasonable and sound basis to vote
proxies.
PROCESSES:
A.Following
ISS’ Recommendations
Spectrum
has selected Institutional Shareholder Services (ISS) to assist it with its
proxy voting responsibilities. Spectrum follows ISS Standard Proxy
Voting guidelines (the “Guidelines”). The Guidelines embody the
positions and factors Spectrum generally considers important in casting proxy
votes. They address a wide variety of individual topics, including, among other
matters, shareholder voting rights, anti-takeover defenses, board structures,
the election of directors, executive and director compensation, reorganizations,
mergers, and various shareholder proposals. Recognizing the complexity and
fact-specific nature of many corporate governance issues, the Guidelines often
do not direct a particular voting outcome, but instead identify factors ISS
considers in determining how the vote should be cast.
In
connection with each proxy vote, ISS prepares a written analysis and
recommendation (an "ISS Recommendation") that reflects ISS's application of
Guidelines to the particular proxy issues. Where the Guidelines do not direct a
particular response and instead list relevant factors, the ISS Recommendation
will reflect ISS's own evaluation of the factors. Spectrum may on any particular
proxy vote decide to diverge from the Guidelines or an ISS Recommendation. In
such cases, our procedures require: (i) the requesting Portfolio Manager to set
forth the reasons for their decision; (ii) the approval of the Chief Investment
Officer; (iii) notification to the Compliance Department and other appropriate
Principal Global Investors personnel; (iv) a determination that the decision is
not influenced by any conflict of interest; and (v) the creation of a written
record reflecting the process.
Spectrum
generally votes proxies in accordance with ISS’ recommendations. When
Spectrum follows ISS’ recommendations, it need not follow the conflict of
interest procedures in Section B, below.
From
time to time ISS may have a business relationship or affiliation with one or
more issuers held in Spectrum client accounts, while also providing voting
recommendations on these issuers’ securities. Because this practice
may present a conflict of interest for ISS, Spectrum’s Chief Compliance Officer
will require from ISS at least annually additional information, or a
certification that ISS has adopted policies and procedures to detect and
mitigate such conflicts of interest in issuing voting
recommendations. Spectrum may obtain voting recommendations from two
proxy voting services as an additional check on the independence of the ISS’
voting recommendations.
B.Disregarding
ISS’ Recommendations
Should
Spectrum determine not to follow ISS’ recommendation for a particular proxy,
Spectrum will use the following procedures for identifying and resolving a
material conflict of interest and will use the Proxy Voting Guidelines (below)
in determining how to vote. The Report for Proxy Vote(s) against ISS
Recommendation(s), Exhibit A hereto, shall be completed in each such
instance.
Spectrum
will classify proxy vote issues into three broad categories: Routine
Administrative Items, Special Interest Issues, and Issues Having the Potential
for Significant Economic Impact. Once the Senior Portfolio Manager
has analyzed and identified each issue as belonging in a particular category and
disclosed the conflict of interests to affected clients and obtained their
consents prior to voting, Spectrum will cast the client’s vote(s) in accordance
with the philosophy and decision guidelines developed for that
category. New and unfamiliar issues are constantly appearing in the
proxy voting process. As new issues arise, we will make every effort
to classify them among the three categories below. If we believe it
would be informative to do so, we may revise this document to reflect how we
evaluate such issues.
Due
to timing delays, logistical hurdles and high costs associated with procuring
and voting international proxies, Spectrum has elected to approach international
proxy voting on the basis of achieving “best efforts at a reasonable
cost.”
As
a fiduciary, Spectrum owes its clients an undivided duty of
loyalty. We strive to avoid even the appearance of a conflict that
may compromise the trust our clients have placed in it. This is true
with respect to proxy voting and thus Spectrum has adopted the following
procedures for addressing potential or actual conflicts of
interest.
Identifying
a Conflict of Interest. There
may be a material conflict of interest when Spectrum votes a proxy solicited by
an issuer whose retirement plan or fund we manage or with whom Spectrum, an
affiliate, or an officer or director of Spectrum or of an affiliate has any
other material business or personal relationship that may affect how we vote the
issuer’s proxy. To avoid any perceived material conflict of interest,
the following procedures have been established for use when Spectrum encounters
a potential material conflict to ensure that voting decisions are based on a
clients’ best interest and are not the product of a material
conflict.
Monitoring
for Conflicts of Interest. All
employees of Spectrum are responsible for monitoring for conflicts of interest
and referring any that may be material to the CCO for resolution. At
least annually, the CCO will take reasonable steps to evaluate the nature of
Spectrum’s material business relationships (and those of its affiliates) with
any company whose preferred securities are held in client accounts (a “portfolio
company”) to assess which, if any, could give rise to a conflict of
interest. CCO’s review will focus on the following three
categories:
•Business
Relationships – The CCO will consider whether Spectrum (or an affiliate) has a
substantial business relationship with a portfolio company or a proponent of a
proxy proposal relating to the portfolio company (e.g., an employee group), such
that failure to vote in favor of management (or the proponent) could harm the
adviser’s relationship with the company (or proponent). For example,
if Spectrum manages money for the portfolio company or an employee group,
manages pension assets, leases office space from the company, or provides other
material services to the portfolio company, the CCO will review whether such
relationships may give rise to a conflict of interest.
•Personal
Relationships – The CCO will consider whether any senior executives or portfolio
managers (or similar persons at Spectrum’s affiliates) have a personal
relationship with other proponents of proxy proposals, participants in proxy
contests, corporate directors, or candidates for directorships that might give
rise to a conflict of interest.
•Familial
Relationships – The CCO will consider whether any senior executives or portfolio
managers (or similar persons at Spectrum’s affiliates) have a familial
relationship relating to a portfolio company (e.g., a spouse or other relative
who serves as a director of a portfolio company, is a candidate for such a
position, or is employed by a portfolio company in a senior
position).
Spectrum
Asset Management, Inc.
In
monitoring for conflicts of interest, the CCO will consider all information
reasonably available to it about any material business, personal, or familial
relationship involving Spectrum (and its affiliates) and a portfolio company,
including the following:
•A
list of clients that are also public companies, which is prepared and updated by
the Operations Department and retained in the Compliance
Department.
•Publicly
available information.
•Information
generally known within Spectrum.
•Information
actually known by senior executives or portfolio managers. When considering a
proxy proposal, investment professionals involved in the decision-making process
must disclose any potential material conflict that they are aware of to the CCO
prior to any substantive discussion of a proxy matter.
•Information
obtained periodically from those persons whom the CCO reasonably believes could
be affected by a conflict arising from a personal or familial relationship
(e.g., portfolio managers, senior management).
The
CCO may, at his discretion, assign day-to-day responsibility for monitoring for
conflicts to a designated person. With respect to monitoring of
affiliates, the CCO in conjunction with PGI’s CCO may rely on information
barriers between Spectrum and its affiliates in determining the scope of its
monitoring of conflicts involving affiliates.
Determining
Whether a Conflict of Interest is “Material”
– On a regular basis, CCO will monitor conflicts of interest to determine
whether any may be “material” and therefore should be referred to PGI for
resolution. The SEC has not provided any specific guidance as to what
types of conflicts may be “material” for purposes of proxy voting, so therefore
it would be appropriate to look to the traditional materiality analysis under
the federal securities laws, i.e., that a “material” matter is one that is
reasonably likely to be viewed as important by the average
shareholder.
Whether
a conflict may be material in any case will, of course, depend on the facts and
circumstances. However, in considering the materiality of a conflict, Spectrum
will use the following two-step approach:
1.Financial
Materiality – The most likely indicator of materiality in most cases will be the
dollar amount involved with the relationship in question. For
purposes of proxy voting, it will be presumed that a conflict is not material
unless it involves at least 5% of Spectrum’s annual revenues or a minimum dollar
amount of $1,000,000. Different percentages or dollar amounts may be
used depending on the nature and degree of the conflict (e.g., a higher number
if the conflict arises through an affiliate rather than directly with
Spectrum).
2.Non-Financial
Materiality – A non-financial conflict of interest might be material (e.g.,
conflicts involving personal or familial relationships) and should be evaluated
based on the facts and circumstances of each case.
If
the CCO has any question as to whether a particular conflict is material, it
should presume the conflict to be material and refer it to the PGI’s CCO for
resolution. As in the case of monitoring conflicts, the CCO may
appoint a designated person or subgroup of Spectrum’s investment team to
determine whether potential conflicts of interest may be material.
Resolving
a Material Conflict of Interest
– When an employee of Spectrum refers a potential material conflict of interest
to the CCO, the CCO will determine whether a material conflict of interest
exists based on the facts and circumstances of each particular
situation. If the CCO determines that no material conflict of
interest exists, no further action is necessary and the CCO will notify
management accordingly. If the CCO determines that a material
conflict exists, CCO must disclose the conflict to affected clients and obtain
consent from each as to the manner in which Spectrum proposes to
vote.
Clients
may obtain information about how we voted proxies on their behalf by contacting
Spectrum’s Compliance Department.
Spectrum
Asset Management, Inc.
PROXY
VOTING GUIDELINES
CATEGORY
I: Routine
Administrative Items
Philosophy: Spectrum
is willing to defer to management on matters of a routine administrative nature.
We feel management is best suited to make those decisions which are essential to
the ongoing operation of the company and which do not have a major economic
impact on the corporation and its shareholders. Examples of issues on which
we will normally defer to management’s recommendation
include:
1.selection
of auditors
2.increasing
the authorized number of common shares
3.election
of unopposed directors
CATEGORY
II: Special
Interest Issues
Philosophy: While
there are many social, political, environmental and other special interest
issues that are worthy of public attention, we do not believe the corporate
proxy process is the appropriate arena in which to achieve gains in these
areas. Our primary responsibility in voting proxies is to provide for
the greatest long-term value for Spectrum’s clients. We are opposed
to proposals which involve an economic cost to the corporation, or which
restrict the freedom of management to operate in the best interest of the
corporation and its shareholders. However, in general we will abstain
from voting on shareholder social, political and environmental proposals because
their long-term impact on share value cannot be calculated with any reasonable
degree of confidence.
CATEGORY
III: Issues
Having the Potential for Significant Economic Impact
Philosophy: Spectrum
is not willing to defer to management on proposals which have the potential for
major economic impact on the corporation and the value of its
shares. We believe such issues should be carefully analyzed and
decided by the owners of the corporation. Presented below are
examples of issues which we believe have the potential for significant economic
impact on shareholder value.
1.Classification
of Board of Directors.
Rather than electing all directors annually, these provisions
stagger a board, generally into three annual classes, and call for only
one-third to be elected each year. Staggered boards may help to
ensure leadership continuity, but they also serve as defensive
mechanisms. Classifying the board makes it more difficult to change
control of a company through a proxy contest involving election of
directors. In general, we vote on a case by case basis on proposals
for staggered boards, but generally favor annual elections of all
directors.
2.Cumulative
Voting of Directors. Most
corporations provide that shareholders are entitled to cast one vote for each
director for each share owned - the one share, one vote standard. The
process of cumulative voting, on the other hand, permits shareholders to
distribute the total number of votes they have in any manner they wish when
electing directors. Shareholders may possibly elect a minority
representative to a corporate board by this process, ensuring representation for
all sizes of shareholders. Outside shareholder involvement can
encourage management to maximize share value. We generally support
cumulative voting of directors.
3.Prevention
of Greenmail. These
proposals seek to prevent the practice of “greenmail”, or targeted share
repurchases by management of company stock from individuals or groups seeking
control of the company. Since only the hostile party receives
payment, usually at a substantial premium over the market value of its shares,
the practice discriminates against all other shareholders. By making
greenmail payments, management transfers significant sums of corporate cash to
one entity, most often for the primary purpose of saving their
jobs. Shareholders are left with an asset-depleted and often less
competitive company. We think that if a corporation offers to buy
back its stock, the offer should be made to all shareholders, not just to a
select group or individual. We are opposed to greenmail and will
support greenmail prevention proposals.
Spectrum
Asset Management, Inc.
4.Supermajority
Provisions. These
corporate charter amendments generally require that a very high percentage of
share votes (70-81%) be cast affirmatively to approve a merger, unless the board
of directors has approved it in advance. These provisions have the
potential to give management veto power over merging with another company, even
though a majority of shareholders favor the merger. In most cases we
believe requiring supermajority approval of mergers places too much veto power
in the hands of management and other minority shareholders, at the expense of
the majority shareholders, and we oppose such provisions.
5.Defensive
Strategies. These
proposals will be analyzed on a case by case basis to determine the effect on
shareholder value. Our decision will be based on whether the proposal
enhances long-term economic value.
6.Business
Combinations or Restructuring. These
proposals will be analyzed on a case by case basis to determine the effect on
shareholder value. Our decision will be based on whether the proposal
enhances long-term economic value.
7.Executive
and Director Compensation. These
proposals will be analyzed on a case by case basis to determine the effect on
shareholder value. Our decision will be based on whether the proposal
enhances long-term economic value.
Spectrum
Asset Management, Inc.
|
| |
Exhibit
A to Proxy Policy |
|
Report
for Proxy Vote(s) Against ISS Recommendation(s) |
|
This
form should be completed in instances in which Spectrum Portfolio
Manager(s) decide to vote against ISS recommendations. |
|
1.
Security Name / Symbol: |
|
|
| |
3.
Summary of ISS recommendation (see attached full ISS
recommendation: |
|
|
|
| |
4.
Reasons for voting against ISS recommendation (supporting documentation
may be attached): |
|
|
|
| |
5.
Determination of potential conflicts (if any): |
|
|
|
|
|
|
|
|
|
| |
6.
Contacted Compliance Department: Yes / No |
Name
of individual contacted: |
| |
Date: |
| |
|
|
|
|
|
|
|
| |
7.
Contacted other Spectrum portfolio managers who have position in same
security: Yes / No |
Name
of individual contacted: |
| |
Date: |
| |
|
|
|
|
|
|
|
|
|
|
| |
8.
Portfolio Manager Signature: |
|
Date: |
| |
Portfolio
Manager Name: |
| |
|
| |
Portfolio
Manager Signature*: |
| |
Date: |
| |
Portfolio
Manager Name: |
| |
*Note:
All Portfolio Managers who manage portfolios that hold relevant security must
sign.
Spectrum
Asset Management, Inc.
T.
ROWE
PRICE
ASSOCIATES,
INC.
AND
CERTAIN
OF
ITS
INVESTMENT ADVISER AFFILIATES
PROXY
VOTING
POLICIES
AND
PROCEDURES
RESPONSIBILITY
TO
VOTE
PROXIES
T.
Rowe
Price
Associates,
Inc.
and
certain
of
its
investment
adviser
affiliates1
(collectively,
“T.
Rowe Price”)
have adopted these Proxy Voting Policies and Procedures (“Policies
and Procedures”)
for the purpose of establishing formal policies and procedures for performing
and documenting their fiduciary duty with regard to the voting of client
proxies. This document is reviewed at least annually and updated as
necessary.
T.
Rowe
Price
recognizes
and
adheres
to
the
principle
that
one
of
the
privileges
of
owning
stock in a company is the right to vote in the election of the company’s
directors and on matters affecting
certain
important
aspects
of
the
company’s
structure
and
operations
that
are
submitted
to
shareholder vote. The U.S.-registered investment companies which T. Rowe Price
sponsors and serves
as
investment
adviser
(the
“Price
Funds”)
as
well
as
other
investment
advisory
clients
have
delegated
to
T.
Rowe
Price
certain
proxy
voting
powers.
As
an
investment
adviser,
T.
Rowe
Price
has a fiduciary responsibility to such clients when exercising its voting
authority with respect to securities held in their portfolios. T. Rowe Price
reserves the right to decline to vote proxies in accordance with client-specific
voting guidelines.
Fiduciary
Considerations.
It
is
the
policy
of
T.
Rowe
Price
that
decisions
with
respect
to
proxy issues will be made in light of the anticipated impact of the issue on the
desirability of investing in the portfolio company from the viewpoint of the
particular advisory client or Price Fund. Proxies are voted solely in the
interests of the client, Price Fund shareholders or, where employee benefit plan
assets are involved, in the interests of plan participants and beneficiaries.
Our intent has always been to vote proxies, where possible to do so, in a manner
consistent with our fiduciary obligations and responsibilities.
One
of the primary factors T. Rowe Price considers when determining the desirability
of investing
in
a
particular
company
is
the
quality
and
depth
of
its
management.
We
recognize
that
a
company’s
management
is
entrusted
with
the
day-to-day
operations
of
the
company,
as
well
as
its
long-term direction and strategic planning, subject to the oversight of the
company’s board of directors.
Accordingly,
our
proxy
voting
guidelines
are
not
intended
to
substitute
our
judgment
for
management’s with respect to the company’s day-to-day operations. Rather, our
proxy voting guidelines are designed to promote accountability of a company’s
management and board of directors
to
its
shareholders;
to
align
the
interests
of
management
with
those
of
shareholders;
and
1This
document is not applicable to T. Rowe Price Investment Management, Inc.
(“TRPIM”).
TRPIM
votes proxies
independently
from
the
other
T.
Rowe
Price-related
investment
advisers
and
has
adopted
its
own
proxy
voting policy.
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Proxy
Voting
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and
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to
encourage companies to adopt best practices in terms of their corporate
governance and disclosure. In addition to our proxy voting guidelines, we rely
on a company’s public filings, its board recommendations, its track record,
country-specific best practices codes, our research providers and – most
importantly – our investment professionals’ views in making voting
decisions.
T.
Rowe
Price
investment
personnel
do
not
coordinate
with
investment
personnel
of
its
affiliated investment adviser, TRPIM, with respect to proxy voting
decisions.
T.
Rowe Price seeks to vote all of its clients’ proxies.
In
certain circumstances, T. Rowe Price
may
determine
that
refraining
from
voting
a
proxy
is
in
a
client’s
best
interest,
such
as
when
the
cost
of
voting
outweighs
the
expected
benefit
to
the
client.
For
example,
the
practicalities
and
costs involved with international investing may make it impossible at times, and
at other times disadvantageous, to vote proxies in every instance.
ADMINISTRATION
OF
POLICIES
AND
PROCEDURES
Environmental,
Social and Governance Investing Committee.
T. Rowe Price’s Environmental, Social and Governance Investing Committee
(“TRPA
ESG Investing Committee” or
the “Committee)
is responsible for establishing positions with respect to corporate governance
and other proxy issues. Certain delegated members of the Committee also
review
questions
and
respond
to
inquiries
from
clients
and
mutual
fund
shareholders
pertaining
to
proxy issues. While the Committee sets voting guidelines and serves as a
resource for T. Rowe Price
portfolio
management,
it
does
not
have
proxy
voting
authority
for
any
Price
Fund
or
advisory
client. Rather, voting authority and responsibility is held by the Chairperson
of the Price Fund’s Investment Advisory Committee or the advisory client’s
portfolio manager.
The
Committee is also responsible for the oversight of third-party proxy services
firms that T. Rowe Price engages to facilitate the proxy voting
process.
Global
Proxy Operations Team. The
Global Proxy Operations team is responsible for administering the proxy voting
process as set forth in the Policies and Procedures.
Governance
Team.
Our
Governance
team
is
responsible
for
reviewing
the
proxy
agendas
for
all
upcoming
meetings
and
making
company-specific
recommendations
to
our
global
industry
analysts and portfolio managers with regard to the voting decisions in their
portfolios.
Responsible
Investment Team.
Our Responsible Investment team oversees the integration
of
environmental
and
social
factors
into
our
investment
processes
across
asset
classes.
In formulating vote recommendations for matters of an environmental or social
nature, the Governance team frequently consults with the appropriate sector
analyst from the Responsible Investment team.
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TRPA
2023
Proxy
Voting
Policies
and
Procedures.doc
Updated: February 2023 |
HOW
PROXIES
ARE
REVIEWED,
PROCESSED
AND
VOTED
In
order to facilitate the proxy voting process, T. Rowe Price has retained
Institutional Shareholder
Services
(“ISS”)
as
an
expert
in
the
proxy
voting
and
corporate
governance
area.
ISS
specializes in providing a variety of fiduciary-level proxy advisory and voting
services. These services include
custom
vote
recommendations,
research, vote
execution,
and reporting. Services provided by ISS do not include automated processing of
votes on our behalf using the ISS Benchmark Policy recommendations. Instead, in
order to reflect T. Rowe Price’s issue-by-issue voting guidelines as approved
each year by the TRPA ESG Investing Committee, ISS maintains and implements
custom voting policies for the Price Funds and other advisory client
accounts.
Meeting
Notification
T.
Rowe Price utilizes ISS’ voting agent services to notify us of upcoming
shareholder meetings for portfolio companies held in client accounts and to
transmit votes to the various custodian banks of our clients. ISS tracks and
reconciles our clients’ holdings against incoming proxy ballots. If ballots do
not arrive on time, ISS procures them from the appropriate custodian
or
proxy
distribution
agent.
Meeting
and
record
date
information
is
updated
daily
and
transmitted
to T. Rowe Price through ProxyExchange, an ISS application.
Vote
Determination
Each
day, ISS delivers into T. Rowe Price’s customized ProxyExchange environment a
comprehensive summary of upcoming meetings, proxy proposals, publications
discussing key proxy voting issues, and custom vote recommendations to assist us
with proxy research and processing.
The
final
authority
and
responsibility
for
proxy
voting
decisions
remains
with
T.
Rowe
Price.
Decisions
with
respect
to
proxy
matters
are
made
primarily
in
light
of
the
anticipated
impact
of the issue on the desirability of investing in the company from the
perspective of our clients.
Portfolio
managers execute their responsibility to vote proxies in different ways. Some
have decided to vote their proxies generally in line with the guidelines as set
by the TRPA ESG Investing Committee. Others review the customized vote
recommendations and approve them before
the
votes
are
cast.
Portfolio
managers
have
access
to
current
reports
summarizing
all
proxy
votes
in
their
client
accounts.
Portfolio
managers
who
vote
their
proxies
inconsistent
with
T.
Rowe
Price guidelines are required to document the rationale for their votes. The
Global Proxy Operations
team
is
responsible
for
maintaining
this
documentation
and
assuring
that
it
adequately
reflects the basis for any vote which is contrary to our proxy voting
guidelines.
T.
Rowe
Price
Voting
Guidelines
Specific
proxy voting guidelines have been adopted by the TRPA ESG Investing
Committee
for
all
regularly
occurring
categories
of
management
and
shareholder
proposals.
A
detailed set of proxy voting guidelines is available on the T. Rowe Price
website, www.troweprice.com/esgpolicy.
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TRPA
2023
Proxy
Voting
Policies
and
Procedures.doc
Updated: February 2023 |
Global
Portfolio
Companies
The
TRPA ESG Investing Committee has developed custom international proxy voting
guidelines based on our proxy advisor’s general global policies, regional codes
of corporate governance, and our own views as investors in these
markets.
We
apply a two-tier approach to determining and applying global proxy voting
policies. The first tier establishes baseline policy guidelines
for
the
most
fundamental
issues,
which
span
the
corporate
governance
spectrum
without
regard to a company’s domicile. The second tier takes into account various
idiosyncrasies of different
countries,
making
allowances
for
standard
market
practices,
as
long
as
they
do
not
violate
the fundamental goals of good corporate governance. The goal is to enhance
shareholder value through effective use of the shareholder franchise,
recognizing that application of a single set of policies is not appropriate for
all markets.
Fixed
Income
and
Passively
Managed
Strategies
Proxy
voting for our fixed income and indexed portfolios is administered by the Global
Proxy Operations team using T.
Rowe
Price’s guidelines as set by the TRPA ESG Investing Committee. Indexed
strategies generally vote in line with the T. Rowe Price guidelines. Fixed
income
strategies
generally
follow
the
proxy
vote
determinations
on
security
holdings
held
by
our
equity
accounts
unless
the
matter
is
specific
to
a
particular
fixed
income
security
such
as
consents,
restructurings, or reorganization proposals.
Shareblocking
Shareblocking
is
the
practice
in
certain
countries
of
“freezing”
shares
for
trading
purposes
in order to vote proxies relating to those shares. In markets where
shareblocking applies, the custodian or sub-custodian automatically freezes
shares prior to a shareholder meeting once a proxy has been voted. T. Rowe
Price’s policy is generally to refrain from voting shares in shareblocking
countries unless the matter has compelling economic consequences that outweigh
the loss of liquidity in the blocked shares.
Securities
on
Loan
The
Price
Funds
and
our
institutional
clients
may
participate
in
securities
lending
programs
to
generate
income
for
their
portfolios.
Generally,
the
voting
rights
pass
with
the
securities
on
loan;
however, lending agreements give the lender the right to terminate the loan and
pull back the loaned
shares
provided
sufficient
notice
is
given
to
the
custodian
bank
in
advance
of
the
applicable
deadline. T. Rowe Price’s policy is generally not to vote securities on loan
unless we determine there is a material voting event that could affect the value
of the loaned securities. In this event, we have the discretion to pull back the
loaned securities in order to cast a vote at an upcoming shareholder meeting. A
monthly monitoring process is in place to review securities on loan and how they
may affect proxy voting.
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TRPA
2023
Proxy
Voting
Policies
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Procedures.doc
Updated: February 2023 |
Monitoring
and
Resolving
Conflicts
of
Interest
The
TRPA ESG Investing Committee is also responsible for monitoring and resolving
potential material conflicts between the interests of T. Rowe Price and those of
its clients with respect to proxy voting. We have adopted safeguards to ensure
that our proxy voting is not influenced by interests other than those of our
fund shareholders and other investment advisory clients. While membership on the
Committee is diverse, it does not include individuals whose primary
duties
relate
to
client
relationship
management,
marketing,
or
sales.
Since
T.
Rowe
Price’s
voting guidelines are predetermined by the Committee, application of the
guidelines by portfolio managers
to
vote
client
proxies
should
in
most
instances
adequately
address
any
potential
conflicts
of interest. However, consistent with the terms of the Policies and Procedures,
which allow portfolio
managers
to
vote
proxies
opposite
our
general
voting
guidelines,
the
Committee
regularly
reviews all such proxy votes that are inconsistent with the proxy voting
guidelines to determine whether
the
portfolio
manager’s
voting
rationale
appears
reasonable.
The
Committee
also
assesses
whether any business or other material relationships between T. Rowe Price and a
portfolio company
(unrelated
to
the
ownership
of
the
portfolio
company’s
securities)
could
have
influenced
an inconsistent vote on that company’s proxy. Issues raising potential conflicts
of interest are referred to designated members of the Committee for immediate
resolution prior to the time T. Rowe Price casts its vote.
With
respect
to
personal
conflicts
of
interest,
T.
Rowe
Price’s
Code
of
Ethics
and
Conduct
requires all employees to avoid placing themselves in a “compromising position”
in which their interests
may
conflict
with
those
of
our
clients
and
restrict
their
ability
to
engage
in
certain
outside
business
activities.
Portfolio
managers
or
Committee
members
with
a
personal
conflict
of
interest
regarding
a
particular
proxy
vote
must
recuse
themselves
and
not
participate
in
the
voting
decisions
with respect to that proxy.
Specific
Conflict of Interest Situations - Voting
of T. Rowe Price Group, Inc. common stock (sym: TROW) by certain T. Rowe Price
Index Funds will be done in all instances in accordance with T. Rowe Price
voting guidelines and votes inconsistent with the guidelines will
not
be
permitted.
In
the
event
that
there
is
no
previously
established
guideline
for
a
specific
voting
issue appearing on the T. Rowe Price Group proxy, the Price Funds will abstain
on that voting item.
In
addition, T. Rowe Price has voting authority for proxies of the holdings of
certain Price Funds that invest in other Price Funds. In cases where the
underlying fund of an investing Price Fund,
including
a
fund-of-funds,
holds
a
proxy
vote,
T.
Rowe
Price
will
mirror
vote
the
fund
shares
held by the upper-tier fund in the same proportion as the votes cast by the
shareholders of the underlying funds (other than the T. Rowe Price Reserve
Investment Fund).
Limitations
on
Voting
Proxies
of
Banks
T.
Rowe
Price
has
obtained
relief
from
the
U.S.
Federal
Reserve
Board
(the
“FRB
Relief”)
which permits, subject to a number of conditions, T. Rowe Price to acquire in
the aggregate on behalf of its clients, 10% or more of the total voting stock of
a bank, bank holding company, savings
and
loan
holding
company
or
savings
association
(each
a
“Bank”),
not
to
exceed
a
15%
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TRPA
2023
Proxy
Voting
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and
Procedures.doc
Updated: February 2023 |
aggregate
beneficial ownership maximum in such Bank.
One
such condition affects the manner in
which
T.
Rowe
Price
will
vote
its
clients’
shares
of
a
Bank
in
excess
of
10%
of
the
Bank’s
total
voting stock (“Excess
Shares”).
The
FRB Relief requires that T. Rowe Price use its best efforts to vote the Excess
Shares in the same proportion as all other shares voted, a practice generally
referred to as “mirror voting,” or in the event that such efforts to mirror vote
are unsuccessful, Excess
Shares
will
not
be
voted.
With
respect
to
a
shareholder
vote
for
a
Bank
of
which
T.
Rowe
Price has aggregate beneficial ownership of greater than 10% on behalf of its
clients, T. Rowe Price
will
determine
which
of
its
clients’
shares
are
Excess
Shares
on
a
pro
rata
basis
across
all
of
its clients’ portfolios for which T. Rowe Price has the power to vote
proxies.2
REPORTING,
RECORD
RETENTION
AND
OVERSIGHT
The
TRPA ESG Investing Committee, and certain personnel under the direction of the
Committee,
perform
the
following
oversight
and
assurance
functions,
among
others,
over
T.
Rowe
Price’s proxy voting: (1) periodically samples proxy votes to ensure that they
were cast in compliance with T.
Rowe
Price’s proxy voting guidelines; (2) reviews, no less frequently than annually,
the adequacy of the Policies and Procedures to make sure that they have been
implemented
effectively,
including
whether
they
continue
to
be
reasonably
designed
to
ensure
that
proxies are voted in the best interests of our clients; (3) performs due
diligence on whether a retained
proxy
advisory
firm
has
the
capacity
and
competency
to
adequately
analyze
proxy
issues,
including the adequacy and quality of the proxy advisory firm’s staffing and
personnel and its policies; and (4) oversees any retained proxy advisory firms
and their procedures regarding their capabilities
to
(i)
produce
proxy
research
that
is
based
on
current
and
accurate
information
and
(ii)
identify and address any conflicts of interest and any other considerations that
we believe would be
appropriate
in
considering
the
nature
and
quality
of
the
services
provided
by
the
proxy
advisory
firm.
T.
Rowe
Price
will
furnish
Vote
Summary
Reports,
upon
request,
to
its
institutional
clients
that
have
delegated
proxy
voting
authority.
The
report
specifies
the
portfolio
companies,
meeting
dates, proxy proposals, and votes which have been cast for the client during the
period and the position taken with respect to each issue. Reports normally
cover
quarterly
or annual periods and are provided to such clients upon request.
T.
Rowe Price retains proxy solicitation materials, memoranda regarding votes cast
in opposition to the position of a company’s management, and documentation on
shares voted differently.
In
addition,
any
document
which
is
material
to
a
proxy
voting
decision
such
as
the
T.
Rowe
Price
proxy
voting
guidelines,
Committee
meeting
materials,
and
other
internal
research
relating to voting decisions are maintained in accordance with applicable
requirements.
2The
FRB
Relief
and
the
process
for
voting
of
Excess
Shares
described
herein
apply
to
the
aggregate
beneficial
ownership of T. Rowe Price and TRPIM.
|
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TRPA
2023
Proxy
Voting
Policies
and
Procedures.doc
Updated: February 2023 |
Vaughan
Nelson
Investment
Management,
LP
PROXY
VOTING
POLICIES
AND
PROCEDURES
September
12, 2022
|
| |
Proxy
Voting
Policies
and
Procedures |
Introduction
Rule
206(4)-6
under
the
Investment
Advisers
Act
of
1940
addresses
an
investment
adviser’s
duty
with regard to the voting of proxies for clients.
Under
the rule an adviser must:
a)Adopt
and
implement
written
policies
and
procedures
that
are
reasonably
designed
to
ensure that client securities are voted in the client’s best interest and to
address procedures
to
be
undertaken
in
the
event
a
material
conflict
arises
between
the
firm’s
interest and that of our clients as to how a particular security or proxy issue
is voted;
b)Disclose
to
clients
how
they
may
obtain
information
regarding
how
the
firm
voted
with
respect to the client’s securities; and
c)Describe
the
firm’s
policies
and
procedures
to
clients
and,
upon
request,
furnish
a
copy
of
the policies and procedures to the requesting client.
Vaughan
Nelson Investment Management, LP (“Vaughan Nelson”) has created a Proxy Voting
Policy, Procedures and Guideline which are reasonably designed to ensure proxies
are voted in the
best
interest
of
our
clients,
are
in
compliance
with
Rule
206(4)-6
and
address
the
areas
noted
by the U.S. Securities and Exchange Commission (“SEC”) in Staff Legal Bulletin
20 as well as guidance issued from time to time by the SEC.
Our
authority to vote proxies for our clients is established through either the
advisory contract (if the contract is silent, implied by the overall delegation
of discretionary authority), or our fiduciary responsibility to ERISA clients
under Department of Labor regulations.
A.Proxy
Voting
Policy
Vaughan
Nelson Investment Management, LP (“Vaughan Nelson”) will vote proxies of the
securities held in its clients’ portfolios on behalf of each client that has
delegated proxy voting authority to Vaughan Nelson as investment
adviser.
Vaughan
Nelson has adopted and implemented Proxy Voting Policies and Procedures (“Policy
and Procedures”) to ensure that, where it has voting authority, proxy matters
are handled in the best interests of clients, in accordance with Vaughan
Nelson’s fiduciary duty, and all applicable law and regulations. The
Policy
and
Procedures,
as
implemented
by
the
Vaughan
Nelson
Proxy
Voting
Committee
(PVC),
are intended to support good corporate governance, including those corporate
practices that address environmental and social issues (“ESG Matters”), in all
cases with the objective of protecting shareholder interests and maximizing
shareholder value.
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Proxy
Voting
Policies
and
Procedures |
Vaughan
Nelson has also created a Proxy Voting Guideline (the “Guideline”) reasonably
believed
to
be
in
the
best
interest
of
clients
relating
to
common
and
recurring
issues
found
within
proxy voting material.
In
drafting this guideline, the firm considered the nature of the firm’s business
and the types of securities being managed.
The
firm created the Guideline to help ensure
voting
consistency
on
issues
common
amongst
issuers
and
to
help
serve
as
evidence
that
a
vote
was
not
the
product
of
a
conflict
of
interest
but
rather
a
vote
in
accordance
with
a
pre-
determined policy.
Vaughan
Nelson uses the services of third parties to provide research, analysis, voting
recommendations, and to administer the process of voting proxies for those
clients for which Vaughan Nelson has voting authority (collectively the “Proxy
Voting Services”). Vaughan Nelson
will
generally
follow
its
express
policy
with
input
from
the
Proxy
Voting
Service
that
provides
research,
analysis
and
voting
recommendations
to
Vaughan
Nelson
unless
the
Proxy
Voting Committee determines that the client’s best interests are served by
voting otherwise.
B.General
Guidelines
The
following
general
guidelines
will
apply
when
voting
proxies
on
behalf
of
accounts
for
which
Vaughan Nelson has voting authority.
1.Client’s
Best Interests. The
Policy and Procedures are designed and implemented in a way
that
is
reasonably
expected
to
ensure
that
proxy
matters
are
conducted
in
the
best
interests
of
clients. When considering the best interests of clients, Vaughan Nelson has
determined that this means the best investment interest of its clients as
shareholders of the issuer. In evaluating our clients’ best interests, Vaughan
Nelson has integrated the consideration of ESG Matters into its investment
process. The Procedures are intended to reflect the incorporation and impact of
these factors in cases where they are material to the growth and sustainability
of an issuer. Vaughan Nelson has established its Policy and Procedures to assist
it in making its proxy voting decisions with
a
view
toward
enhancing
the
value
of
its
clients’
interests
in
an
issuer
over
the
period
during
which
it
expects
its
clients
to
hold
their
investments.
Vaughan
Nelson
will
vote
against
proposals
that it believes could negatively impact the current or future market value of
the issuer’s securities during the expected holding period.
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Proxy
Voting
Policies
and
Procedures |
2.Client
Proxy Voting Authority. Rather
than delegating proxy voting authority to Vaughan
Nelson,
a
client
may
retain
the
authority
to
vote
proxies
for
securities
in
its
account
(or
delegate voting authority to another party).
Vaughan
Nelson will honor this instruction as included within the investment management
agreement or separately authorized document.
3.Stated
Proxy
Guideline.
In
the
interest
of
consistency
in
voting
proxies
on
behalf
of
its
clients,
Vaughan
Nelson
has
adopted
a
Proxy
Guideline
that
identifies
issues
where
Vaughan Nelson will (a) generally vote in favor of a proposal; (b) generally
vote against a proposal; or
(c)
specifically
consider
its
vote
for
or
against
a
proposal.
However, each vote
may
be cast differently than the stated guideline, taking into consideration all
relevant facts and circumstances at the time of the vote. In cases where the
recommendation of the issuer’s management and the Proxy Voting Service are the
same, the vote will generally be cast as recommended and will not be reviewed on
a case-by-case basis by the Proxy Committee.
4.Abstentions,
Limitations
and
Other
Exceptions.
Vaughan
Nelson’s
general
policy
is to vote rather than abstain from voting on issues presented. However, in the
following circumstances Vaughan Nelson may not vote a client’s
proxy:
•Mutual
Funds
–
where
voting
may
be
controlled
by
restrictions
within
the
fund
or
the
actions of authorized persons
•International
Securities
–
where
the
perceived
benefit
of
voting
an
international
proxy
does not outweigh the anticipated costs of doing so
•New
Accounts
–
instances
where
security
holdings
assumed
will
be
sold
in
the
near
term
thereby limiting any benefit to be obtained by a vote of proxy
material
•Unsupervised
Securities
–
where
the
firm
does
not
have
a
basis
on
which
to
offer
advice
•Unjustifiable
Costs – for example, the firm may abstain from voting a client proxy in a
specific instance if, in our good faith determination, the costs involved in
voting such proxy cannot be justified (e.g. total client holdings less than
10,000 shares and not held
by
a mutual fund; costs associated with obtaining translations of relevant proxy
materials for non-U.S. securities) in light of the benefits to the client of
voting.
In
accordance with the firm’s fiduciary duties, the firm shall, in appropriate
cases, weigh the costs and benefits of voting proxy proposals and shall make an
informed decision with respect to whether
voting
a
given
proxy
proposal
is
prudent.
The
decision
will
take
into
account
the
effect the vote is expected to have on the value of a client’s investment and
whether this expected effect would outweigh the cost of voting.
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Proxy
Voting
Policies
and
Procedures |
•Administrative
requirements for voting proxies in certain foreign jurisdictions such as
providing
a
power
of
attorney
to
the
client’s
local
sub-custodian,
cannot
be
fulfilled
due
to timing of the requirement, or the costs required to fulfill the
administrative requirements appear to outweigh the benefits to the client of
voting the proxy.
•Securities
Not
Held
on
Meeting
Date
–
securities
held
on
‘record
date’
but
divested
prior
to the ‘meeting date’
•The
client,
as
of
the
record
date,
has
loaned
the
securities
to
which
the
proxy
relates
and
Vaughan
Nelson
has
concluded
that
it
is
not
in
the
best
interest
of
the
client
to
recall
the
loan or is unable to recall the loan in order to vote the
securities.
•ERISA
accounts – with respect to ERISA clients for whom we have accepted the
responsibility
for
proxy
voting,
we
vote
proxies
in
accordance
with
our
duty
of
loyalty
and prudence, compliance with the plan documents, and the firm’s duty to avoid
prohibited transactions.
5.Oversight.
All
issues presented for shareholder vote are subject to the oversight of the Proxy
Voting Committee, either directly or by application of this Policy and
Guideline. All non- routine
issues
will
generally
be
considered
directly
by
the
Proxy
Voting
Committee
and/or,
when
necessary, the investment professionals responsible for an account holding the
security and will be voted in the best investment interests of the client. All
routine “for” and “against” issues will be voted according to the Guideline
unless special factors require that they be considered by the PVC and/or the
investment professionals responsible for an account holding the
security.
6.Availability
of
Procedures.
Vaughan
Nelson
includes
a
description
of
its
Proxy
Voting
Procedures in Part 2A of its Form ADV. Upon request, Vaughan Nelson also
provides clients with a copy of its Proxy Voting Procedures.
7.Disclosure
of
Vote.
Vaughan
Nelson
will,
upon
request
by
a
client,
provide
information
about
how
each
proxy
was
voted
with
respect
to
the
securities
in
that
client’s
account.
Vaughan
Nelson’s policy is not to disclose a client’s proxy voting records to third
parties except as required by applicable law and regulations.
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Proxy
Voting
Policies
and
Procedures |
C.Proxy
Voting
Committee
(PVC)
1.Proxy
Voting
Committee
Composition.
The
Proxy
Voting
Committee
will
be
composed
of a Compliance team member, an Investment team member and other employees of
Vaughan Nelson as needed.
In
the event that any member is unable to participate in a meeting of the Proxy
Voting Committee, the member may designate another individual to act on the
member’s behalf. Each portfolio manager of an account that holds voting
securities of an issuer or the analyst covering the issuer or its securities may
be an ad hoc member of the Proxy Voting Committee in connection with voting
proxies of that issuer. Voting determinations made by the Proxy Voting Committee
will be memorialized electronically.
2.Duties.
The
Proxy
Voting
Committee’s
specific
responsibilities
include
the
following:
•Annually
reviewing
the
Proxy
Voting
Policies
and
Procedures
to
ensure
they
continue
to be reasonably designed to ensure proxy votes are cast in the clients’ best
interest.
•Annually
reviewing,
updating
and
modifying
the
Guidelines
•overseeing
the
vote
on
proposals
according
to
the
predetermined Guideline,
•directing
the
vote
on
proposals
where
there
is
reason
not
to
vote
according
to
the
predetermined Guideline or where proposals require special
consideration,
•consulting
with
the
portfolio
managers
and
analysts
for
the
accounts
holding
the
security when necessary or appropriate.
D.Proxy
Voting
Service
(PVS)
Vaughan
Nelson intends to use a PVS in a limited capacity to assist the firm with its
proxy voting
responsibilities
and
to
obtain
supplemental
research
information
which
will
assist
the
firm
in voting some proxy items (i.e. ESG related items, items not addressed in the
firm’s proxy voting guideline).
The
PVS will be used primarily to collect proxy ballots for our clients,
provide
the
firm
a
platform
in
which
to
indicate
our
vote,
provide
company
research
as
a
point
of
information to assist our firm with voting and assist our firm in generating
proxy voting reports.
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Proxy
Voting
Policies
and
Procedures |
Given
the
different
business
lines
of
a
PVS,
there
will
be
instances
where
the
research
received from
the
PVS
might
be
influenced
by
a
conflict
of
interest
resulting
from
the
PVS’s
affiliations
or other relationships/engagements the PVS has with an issuer. Vaughan Nelson
will become informed of these conflicts by:
1)Periodically
obtaining
an
updated
list
of
the
PVS’s
affiliates
and
a
list
of
its
significant
relationships with publicly traded issuers that are clients.
Vaughan
Nelson
will
use
these
lists
along
with
any
available
on-line
tools
made
available
by the PVS to determine if an upcoming proxy vote may present a conflict of
interest for the PVS and take that information into consideration if we intend
to use the PVS’s research to vote a proxy item that is not addressed in our
firm’s recurring Proxy Voting Guideline.
2)Obtaining
a copy of the PVS’s Code of Ethics and Policies and Procedures (or similar
document)
to
ensure
they
address
the
topic
of
conflicts
of
interest
with
their
employees
and have processes in place to mitigate any issues.
3)Reviewing
for
indications
of
conflict
for each
proxy
to
be
voted.
Vaughan
Nelson will perform a third party service provider review of the PVS on an
annual
basis
to determine whether the PVS: a) has been the subject of any inquiries,
subpoenas, investigations
or
penalties
by
the
SEC
or
any
other
regulator;
b)
has
the
capacity
and
competency
(i.e. staffing, technology) to adequately analyze matters and provide its
services; c)
has
appropriate disclosure regarding the source of information and methodologies
used in formulating recommendations; d)
has
an effective process for seeking timely input from issuers and clients regarding
its voting policies, methodologies, peer group construction, identifying and
addressing conflicts of interest; e) has a process to correct material
deficiencies in the issuer information or research it has provided
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Proxy
Voting
Policies
and
Procedures |
E.Conflicts
of
Interest
Vaughan
Nelson
has
established
policies
and
procedures
to
ensure
that
proxy
votes
are
voted
in
its clients’ best interests and are not affected by any possible conflicts of
interest.
When
determining the vote on any proposal, the Proxy Committee will not consider any
benefit to Vaughan Nelson, any of its affiliates, any of its or their clients or
service providers, other than benefits to the owner of the securities to be
voted.
Vaughan
Nelson envisions only rare situations where a conflict of interest would exist
or potentially exist between our firm and our clients given the nature of our
business, clients, relationship
and
the
types
of
securities
being
managed.
Notwithstanding,
an
actual
or
potential
conflict may be resolved in either of the following manners:
•If
the
proposal
that
gives
rise
to
an
actual
or
potential
conflict
is
specifically
addressed
in
the Guideline, the firm may vote the proxy in accordance with the pre-determined
Guideline (provided that the pre-determined Guideline involves little or no
discretion on the firm’s part);
•Otherwise,
the firm will follow the recommendations of the PVS as to how the proxy
should
be
voted.
However,
if
the
conflict
of
interest
is
a
result
of
the
PVS’
affiliations
or
other lines of business, then the firm will take that information into
consideration if the firm intends to use the PVS’s research to vote a proxy item
that is not addressed in our firm’s recurring Proxy Voting
Guideline.
Vaughan
Nelson,
as
an
indirect
subsidiary
of
a
Bank
Holding
Company
(Natixis),
is
restricted
from voting the shares it has invested in banking entities on behalf of its
clients in instances where the aggregate ownership of all the Bank Holding
Company’s investment management subsidiaries exceed 5% of the outstanding voting
shares of a bank.
Where
the aggregate ownership
described
exceeds
the
5%
threshold,
the
firm
will
instruct
the
PVS,
an
independent
third party, to vote the proxies in line with their recommendation.
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Proxy
Voting
Policies
and
Procedures |
F.Recordkeeping
Vaughan
Nelson or the Proxy Voting Service will maintain records of proxies voted
pursuant to Rule 204-2 under the Advisers Act. The records include: (1) a copy
of its Proxy Voting Procedures; (2) proxy statements received regarding client
securities; (3) a record of each vote cast; (4) a copy of any document created
by Vaughan Nelson that is material to making a decision
how
to
vote
proxies
on
behalf
of
a
client
or
that
memorializes
the
basis
for
that
decision;
and (5) each written client request for proxy voting records and Vaughan
Nelson’s written response to any (written or oral) client request for such
records. Proxy voting books and records are maintained in an easily accessible
place for a period of five years, the first two in an appropriate office of
Vaughan Nelson.
G.Proxy
Voting
Procedures
The
procedures to be performed by a Compliance Individual (CI), a Portfolio
Administrator (PA)
and,
as
needed,
the
Proxy
Voting
Committee
(or
representative
thereof)
in
the
execution
of
our proxy voting duty to clients will be as follows:
Client
account
Setup/Reconciliation
1.New
clients will receive a copy of the “Description of Proxy Voting Policies and
Procedures” as part of information provided in connection with the firm’s New
Client Checklist.
This
document details the proposed scope of Vaughan Nelson’s proxy voting
responsibilities
and
summarizes
the
processes
used
to
vote
proxies
on
behalf
of
a
client
if
the client delegates the proxy voting responsibility to Vaughan
Nelson.
2.At
the time a contract is entered into a determination will be made as to whether
the client
will
retain
proxy
voting
responsibilities.
A
separate
acknowledgement
will
be
obtained
where the client elects to retain proxy voting responsibilities, if
so
desired.
3.The
PA
will
arrange
for
client
proxy
material
to
be
forwarded
to
the
PVS
for
voting.
4.Vaughan
Nelson uploads an automated FTP position file each day (on a settlement date
basis)
detailing
all
the
securities
held
on
behalf
of
our
clients.
The
PVS
will
reconcile
the
daily file uploaded against their records and inform us if there are any account
discrepancies.
VN
will research the reason for any account discrepancies in a timely manner.
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Proxy
Voting
Policies
and
Procedures |
5.The
PVS will match the proxy material they receive for the accounts listed in the
daily FTP
position
file
and
follow
up
with
any
custodian
that
has
not
forwarded
proxies
within
a reasonable time.
Securities
Lending
In
many cases Vaughan Nelson’s clients participate in securities lending programs
whereby the legal right to vote
a
proxy
is transferred to the
borrower
as a
result
of
the
lending
process.
From
time to time, circumstances may arise where Vaughan Nelson desires to vote
shares in an upcoming proxy (i.e. acquisition, contested election, etc.) if it
is determined that it is in the client’s best interest.
In
these cases, Vaughan Nelson, if the record date has not passed, will
request
the
client
to
‘recall’
the
security
in
question
from
loan
until
the
proxy
record
date
in
order
for the client (and thereby Vaughan Nelson) to be the holder of record in order
to cast the proxy vote.
Voting
Process
1.The
CI
will
log
into
the
PVS
system
daily
to
review
the
proxy
meetings
that
need
to
be
voted.
The
CI has developed a desk top procedure help track the upcoming proxy meetings to
ensure that all proxies are voted in a timely manner and none are
missed.
2.While
the
PVS
system
provides
a
monthly
view
of
upcoming
proxy
meetings,
sometimes
the research materials are not immediately available.
Through
web access and the PVS system, the CI is able to determine for each security its
record date, meeting date and whether the PVS has completed proxy research on
the security.
3.Once
the PVS research reports are available for a proxy meeting, the meeting is ready
to be
voted.
At
such
time,
the
CI
will
review
our
internal
positions/holdings
report
detailing
the shares held of the security for our clients and compare it for
reasonableness to the positions/holdings report provided by the PVS.
Sometimes,
share discrepancies exist because a client might have shares on loan or because
clients have opted to retain the responsibility to vote their own
proxies.
Although
Vaughan Nelson relies mainly on account reconciliations (instead of share
reconciliations) to ensure proxies are being voted, the CI will research certain
share discrepancies as detailed in the CI’s desk top procedures.
4.Download
the
PVS
proxy
research
for
each
security
and
save
it
to
a
shared
drive
to
be
used by the CI if needed.
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Proxy
Voting
Policies
and
Procedures |
5.The
CI
will
review
any
conflict
of
interest
that
is
flagged
by
the
PVS
system
and/or
any
conflict of interest our firm may have in voting the proxy to determine if a
material conflict exists.
Any
material conflict of
interest
will be
noted
on the
proxy
voting form and taken into consideration for the proxy vote.
6.The
CI
will
review
the
proxy
issues
against
the
firm’s
Guideline
and
cast
each
vote
on
the
voting form, if able, and sign off on having voted those issues.
a)If
all
issues
are
able
to
be
voted
using
the
firm’s
Proxy
Voting
Guideline,
the
CI
will
make the vote online in the PVS system and save a vote confirmation to evidence
how the vote was cast.
b)If
issues exist for which a case-by-case review must be made the package is
forwarded
to
the
PVC.
The
PVC
will
review
the
information
within
the
package
and
any other necessary information in order to formulate the vote to be
cast.
If
necessary, the proxy item(s) will be forwarded to the appropriate Portfolio
Manager for input.
The
rationale for any departures from the firm’s Guideline will be
documented
within
the
package.
All
votes
will
be
indicated
on
the
voting
form
and
a
member
of
the
PVC
or
the
Portfolio
Manager
will
sign
off
as
to
having
voted
those
issues.
The
package will then be returned to the CI for voting.
c)As
described
under
“Conflicts
of
Interests”,
where
a
material
conflict
exists
the
firm
may vote the issue 1) in accordance with the Guideline if the application of
such policy to the issue at hand involves little or no discretion on the part of
the firm, or 2) as indicated by the independent third-party research firm (if
the PVS has no conflict), or 3) If both VN and the PVS have a conflict of
interest, then this will be documented
and
taken
into
consideration
when
determining
how
the
vote
will
be
cast
in the client’s best interest.
By
voting conflicts in accordance with the indication of an independent
third-party, the firm will be able to demonstrate that the vote was not a
product of a conflict of interest.
An
indication that this was the approach taken to vote the issue will noted on the
proxy vote documentation that is maintained by the CI.
7.Through
the
software
interface
with
the
PVS,
the
CI
will
indicate,
review
and
submit
our
vote
on
individual
securities.
The
CI
is
able
to
re-submit
our
vote
up
until
the
day
before
the meeting which can accommodate cases where new information may come to
light.
8.The
PVS
will
then
process
the
vote
with
the
issuer
on
behalf
of
the
firm.
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Compliance
Policy Executive Summary |
Policy
Name: |
H-12
Proxy Voting Policy |
Applicability: |
Victory
Capital Managemenet Inc. ("Victory Capital") |
Category: |
Investments-
General |
Compliance
owner: |
Chief
Compliance Officer, Victory Capital |
Business
Owner: |
Director
Responsible Investment, Victory Capital |
Effective
Date: |
June
1, 2022 |
Executive
Summary: |
Policy
and procedures governing the voting of client
securities |
BACKGROUND
AND RISKS
Voting
rights associated with security ownership are closely related to the
discretionary asset management services Victory Capital provides to its clients.
Therefore, Victory Capital should be capable of accepting and exercising voting
authority on behalf of clients with the same standard of care, skill, prudence,
and diligence it is subject to when exercising its investment authority on
behalf of clients. Further, in order to exercise voting authority on behalf of
clients, Victory Capital must comply with Rule 206(4)-6 (the “proxy rule”) which
requires Victory Capital to adopt and implement written policies and procedures
designed to ensure it votes securities in the best interest of clients including
managing material conflicts of interest between Victory Capital and its clients.
The proxy rule also requires Victory Capital to disclose to clients a summary of
its proxy voting policies and procedures, how they may obtain a copy of these
procedures, and information about how Victory Capital voted their
securities.
Inability
to accept and exercise voting authority on behalf of clients or failure to
comply with the proxy rule could result in violations of securities law, breach
of fiduciary duty, client harm, or damage to Victory Capital’s
reputation.
POLICY
Victory
Capital will establish policies and procedures and retain resources necessary to
ensure it is capable of exercising voting authority on behalf of clients
according to the same standard of care with which it exercises investment
authority. Because Victory Capital will exercise voting authority, it will
comply with the proxy rule and must vote securities in the best interest of
clients.
For
purposes of this policy, voting in the best interest of clients means using
complete and accurate information to vote with the objective of increasing the
long-term economic value of client assets. Similar to investment decision
making, voting decisions are qualitative in nature and Victory Capital will
consider a variety of factors to arrive at vote decisions. Further a voting
decision in the same security may be different between clients for the same
reasons Victory Capital clients are invested in different securities. For
example, client agreements, investment strategies, or specific investment
franchise views on ballot proposals may cause the same security to be voted in a
different manner across Victory Capital’s client base.
Victory
Capital will vote all securities over which it has authority, provided the
client has voting rights and there is sufficient time and information available
to make informed decisions. Victory Capital will take reasonable steps to obtain
appropriate and timely information. In situations where voting may impact the
ability to trade a security (e.g., shareblocking), Victory Capital will not vote
unless it determines that voting is in a client’s best interest.
For
a copy of the guidelines (as defined below) please visit Victory Capital’s
website at https://investor.vcm.com/policies. To obtain information on specific
proxies voted by Victory Capital, clients may contact their Victory Capital
client manager or email an inquiry to [email protected].
Victory
Capital will create, maintain, and retain appropriate records related to voting
client securities.
LIST
OF REQUIRED CONTROLS
•Proxy
Voting Committee (the “committee”)
•Client
Investment Management Agreements (“IMAs”)
•Third-party
proxy firm (“proxy firm”)
•M-19
Vendor Due Diligence and Oversight (“vendor oversight policy”)
•Proxy
voting guidelines
•Annual
committee guideline review
•Form
ADV, Part 2A
•M-13
Record Retention and Destruction, Appendix A (“recordkeeping
requirements”)
CONTROL
IMPLEMENTATION PROCEDURES
•The
committee will consist of members with experience related to the functional
areas applicable to voting client securities including responsible investing,
investment management, operations, and compliance. The committee is responsible
for exercising Victory Capital’s fiduciary responsibilities related to voting
client securities including voting in the best interests of clients and
identifying and managing conflicts of interest. The committee will be active,
keep a charter, and maintain records that demonstrate adequate execution of its
responsibilities.
•When
a client enters into an advisory relationship with Victory Capital, proxy voting
roles and responsibilities between the client and Victory Capital will be fully
disclosed. Responsibilities delegated to Victory Capital will be communicated to
the committee and the committee will be responsible for implementing voting
requirements in accordance with each IMA.
•In
order to support its fiduciary duty related to voting client securities, Victory
Capital will retain, and the committee will oversee a third-party proxy advisory
firm (“proxy firm”) to provide both administrative and advisory services related
to voting client securities. Selection and ongoing oversight of the proxy firm
will be conducted in accordance with the vendor oversight policy. The Sponsor,
as defined in the vendor oversight policy, must be a member of the committee.
Currently, Victory Capital retains Institutional Shareholder Services Inc. as
its proxy firm.
•The
committee will adopt written proxy voting guidelines authored by the proxy firm
(“guidelines”). These guidelines can be used as standing instructions on how the
proxy firm must vote ballots provided that the committee must:
◦Have
the ability to customize the guidelines.
◦Retain
the ability to override the guidelines on individual ballot proposals at the
client level.
◦Review
the guidelines at least annually, implement customizations based on this review,
and submit a written memo to the compliance committee documenting the results of
the annual review that includes the name of the proxy firm, links to the
specific guidelines adopted, and a description of customizations
made.
◦Make
the memo available to clients upon request.
•The
purpose of the guidelines is 1) to benefit from the specialized expertise
related to voting securities provided by the proxy firm and to provide an
independent source to resolve conflicts of interest identified between Victory
Capital and its clients. For the first purpose, the committee will take into
account the guidelines but will have ultimate responsibility for voting
decisions. The committee will, in its discretion, rely on additional sources
such as portfolio manager input to ensure the voting decisions it makes are in
the best interest of specific clients. If the guidelines are silent on any
pending ballot proposal, the committee will exercise its voting responsibility
with due care and document the rationale for the vote decision. For the second
purpose, if the committee identifies a conflict of interest between Victory
Capital and clients, the committee must vote in accordance with the guidelines
unless the rationale for deviating from guidelines has unanimous consent from
the committee and is put in writing, including an analysis of how the conflict
of interest is eliminated, mitigated, or disclosed.
•The
proxy firm will provide technology-based platform that provides operational
controls over voting securities that include, at minimum, ballot reconciliation,
casting complete ballots in a timely manner and in accordance with adopted
written guidelines, ability to adjust or override a vote based on committee
input, and reporting. The committee is responsible for ensuring these controls
are operating as intended though must, at minimum, develop reporting designed to
ensure all eligible client accounts are properly set up and configured on the
proxy firm’s platform and that the proxy firm is voting securities in accordance
with the guidelines and this policy. Such reports should be reviewed by the
committee at regular intervals and any exceptions should be referred to the LCR
department.
•The
disclosures required under the proxy rule will be contained in Victory Capital’s
Form ADV, Part 2A and will be delivered to clients at the time and frequency
required by regulation.
•The
committee will be familiar with the recordkeeping requirements related to voting
client securities and will maintain records and ensure the proxy firm maintains
records for the required periods.
INVESTMENT
ADVISER
PROXY
VOTING
POLICIES
&
PROCEDURES
WESTWOOD
HOLDINGS
GROUP,
INC.
Updated
March
31,
2023
PROXY
VOTING
27.1.
Policy.
Westwood,
as a matter of policy and as a fiduciary to our clients, has a responsibility
for voting proxies for portfolio securities in a manner that is consistent with
the best economic interests of the clients. Our Firm maintains written policies
and procedures as to the handling, research, voting and reporting of proxy
voting and makes appropriate disclosures about our Firm’s proxy policies and
practices. Our policy and practice includes the responsibility to monitor
corporate actions, receive and vote client proxies and disclose any potential
conflicts of interest. In addition, our policy and practice is to make
information available to clients about the voting of proxies for their portfolio
securities and to maintain relevant and required records.
27.2.
Firm Specific Policy.
Westwood
has engaged Broadridge for assistance with the proxy voting process for our
clients. Broadridge is a leading provider of full-service proxy voting services
to the global financial industry. Westwood has also engaged Glass Lewis for
assistance with proxy research and analysis. Glass Lewis provides complete
analysis and voting recommendations on all proposals and is designed to assist
investors in mitigating risk and improving long-term value. In most cases,
Westwood agrees with Glass Lewis’s recommendations; however, ballots are
reviewed bi-monthly by our analysts and we may choose to vote differently than
Glass Lewis if we believe it to be in the client’s best interest. In addition,
Westwood will implement “echo voting” (voting pro rata with all other
shareholders) for investment company clients relying on Investment Company Act
§12(d)(1)(F) and Rule 12d1-3 in order to allow certain purchases of other
investment companies in excess of limits that would otherwise apply.
27.3.
Responsibility.
Westwood’s
Operations Team has the responsibility for the implementation and monitoring of
our proxy voting policy, practices, disclosures and record keeping, including
outlining our voting guidelines in our procedures.
27.4.
Background.
Proxy
voting is an important right of shareholders, and reasonable care and diligence
must be taken to ensure that such rights are properly and timely exercised.
Investment
advisers who are registered with the SEC, and who exercise voting authority with
respect to client securities, are required by Rule 206(4)-6 of the Advisers Act
to (a) adopt and implement written policies and procedures that are reasonably
designed to ensure that client securities are voted in the best interests of
clients, which must include how an adviser addresses material conflicts that may
arise between an adviser's interests and those of its clients, (b) disclose to
clients how they may obtain information from the adviser with respect to the
voting of proxies for their securities, (c) describe a summary of its proxy
voting policies and procedures and, upon request, to furnish a copy to its
clients, and (d) to maintain certain records relating to the adviser's proxy
voting activities when the adviser does have proxy voting authority.
27.5.
Procedure.
Westwood
has adopted the following procedures to implement the Firm’s proxy voting
policy, in addition to adopting the Glass Lewis Proxy Voting Guidelines (general
guidelines attached as Exhibit H, guidelines specific to Taft Hartley are
attached as Exhibit J). Westwood conducts reviews to monitor and ensure the
Firm’s policy is observed, implemented properly and amended or updated, as
appropriate:
27.5.1.
Proxy Voting Records.
With
respect to proxy record keeping, the Operations Team maintains complete files
for all clients. These files include a listing of all proxy materials sent on
behalf of our clients along with individual copies of each response. Client
access to these files can be arranged upon request. A voting summary will be
furnished upon request.
27.5.2.
Voting Procedures.
a.All
employees forward proxy materials received on behalf of clients to Broadridge.
Westwood has engaged Broadridge for assistance with the proxy voting process for
our clients and Glass Lewis provides voting recommendations;
b.Broadridge
has access to holders’ records and determines which client accounts hold the
security to which the proxy relates;
c.Absent
material conflicts, Broadridge, with the vote recommendations from Glass Lewis,
determines how Westwood should vote the proxy in accordance with applicable
voting guidelines;
d.Westwood’s
analysts review the Glass Lewis proxy voting recommendations on a bi-monthly
basis. The analysts may choose to vote differently than Glass Lewis if they
believe it is in the best interest of the client or where a different vote is
warranted in light of the respective investment strategy;
e.If
Westwood chooses to vote differently than Glass Lewis, then Westwood overwrites
the Glass Lewis recommendation on the ProxyEdge platform. If Westwood agrees
with the Glass Lewis recommendations, no action is necessary; and,
f.Broadridge
completes the proxy in a timely and appropriate manner.
g.For
certain investment companies managed by Westwood and approved by the CCO (each a
“Westwood 12d1F Fund”), Westwood will implement echo voting for shares of other
investment companies (each an “Acquired Fund”) held by a Westwood 12d1F Fund.
The Data Management Team will override any Glass Lewis proxy voting
recommendations with respect to shares of an Acquired Funds held by a Westwood
12d1F Fund, and will instead, vote all such Acquired Fund shares pro rata with
all other shareholders of each respective Acquired Fund. The Data Management
Team will record any votes made with echo voting as overrides to the Glass Lewis
recommendations.
27.5.3.
Disclosure.
a.Westwood
provides required disclosures in Form ADV Part 2A, which summarizes these proxy
voting policies and procedures and includes information whereby clients may
request information regarding how Westwood voted the client’s proxies;
b.Westwood’s
disclosure summary includes a description of how clients may obtain a copy of
the Firm's proxy voting policies and procedures. Westwood’s proxy voting
practice is disclosed in the Firm's advisory agreements.
27.5.4.
Client Requests for Information.
a.All
client requests for information regarding proxy votes, or regarding policies and
procedures that are received by any supervised person should be forwarded to the
Operations Team; and
b.In
response to any request, the Data Management Team prepares a written response
with the information requested, and as applicable, includes the name of the
issuer, the proposal voted upon, and how Westwood voted the client’s proxy with
respect to each proposal about which the client inquired.
27.5.5.
Voting Guidelines.
a.Westwood
has engaged Broadridge and Glass Lewis for assistance with the proxy voting
process for our clients. The Glass Lewis Proxy Voting Guidelines are attached as
Exhibit H (general) and Exhibit J (Taft Hartley); and
b.Westwood
analysts review
the Glass
Lewis proxy
voting recommendations using the following guidelines:
i.In
the absence of specific voting guidelines from the client, Westwood votes
proxies in the best interests of each client;
ii.Westwood’s
policy is to vote all proxies from a specific issuer the same way for each
client absent qualifying restrictions or other mandates from a client;
iii.Clients
are permitted to place reasonable restrictions and mandates on Westwood’s voting
authority in the same manner that they may place such restrictions on the actual
selection of account securities;
iv.Westwood
generally votes in favor of routine corporate housekeeping proposals such as the
election of directors and selection of auditors absent conflicts of interest
raised by an auditor’s non-audit services;
v.Westwood
generally votes against proposals that cause board members to become entrenched
or cause unequal voting rights; and
vi.In
reviewing proposals, Westwood further considers the opinion of management, the
effect on management, and the effect on shareholder value and the issuer's
business practices.
27.5.6.
Conflicts of Interest.
a.Westwood
attempts to identify any conflicts that exist between the interests of the Firm
and the client by (i) reviewing the relationship of Westwood with the issuer of
each security, and (ii) determining if Westwood or any of its supervised persons
has any financial, business or personal relationship with the issuer;
b.If
a material conflict of interest exists, Westwood will determine whether it is
appropriate to disclose the conflict to the affected clients, to give the
clients an opportunity to vote the proxies themselves, or to address the voting
issue through other objective means, such as voting in a manner consistent with
a predetermined voting policy or receiving an independent third-party voting
recommendation; and
c.Westwood
will maintain a record of the voting resolution of any conflict of interest.
27.5.7.
Recordkeeping.
The
Operations Team retains the following proxy records in accordance with the SEC’s
five-year retention requirement:
a.These
policies and procedures and any amendments;
b.Each
proxy statement that Westwood receives;
c.A
record of each vote that Westwood casts;
d.Any
document Westwood created that was material to making a decision how to vote
proxies, or that memorializes that decision, including periodic reports to the
Data Management Team or proxy committee, if applicable; e. A copy of each
written request from a client for information on how Westwood voted such
client’s proxies and a copy of any written response; f. Copies of materials used
in conduct due diligence on proxy voting service providers; and
e.Records
documenting audits and other periodic reviews of proxy voting recommendations.
27.5.8.
Proxy Voting Vendor Oversight
Westwood
conducts initial and ongoing oversight of proxy voting vendors with
participation by the Client Service, Compliance, Operations and Investment
teams.
In
addition to conducting initial due diligence, Westwood monitors and reviews all
third-party proxy services to evaluate any conflicts of interest, consistency of
voting with guidelines, fees and disclosures, and technical and operational
capabilities, among other things.
At
least annually, Westwood audits on a sampling basis the recommendations received
from Glass Lewis to assess the consistency of its recommendations with Glass
Lewis’ published guidelines.
For
Broadmark’s Proxy Policy see Appendix VI in Policies and Procedures.