PRINCIPAL
FUNDS, INC. ("PFI" or the "Fund")
Statement
of Additional Information
dated
March 1, 2021
This
Statement of Additional Information (SAI) is not a prospectus. It contains
information in addition to the information in the Fund's prospectus. The
prospectus, which we may amend from time to time, contains the basic information
you should know before investing in the Fund. You should read this SAI together
with the Fund's prospectus dated March 1, 2021.
Incorporation
by Reference: The
audited financial statements, schedules of investments and auditor's report
included in the Fund's Annual
Report to Shareholders,
for the fiscal year ended October 31, 2020, are hereby incorporated by reference
into and are legally a part of this SAI.
For
a free copy of the current prospectus, semiannual 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.principalfunds.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 |
A |
C |
J |
Inst. |
R-1 |
R-3 |
R-4 |
R-5 |
R-6 |
California
Municipal |
SRCMX |
SRCCX |
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PCMFX |
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Core
Fixed Income |
CMPIX |
CNMCX |
PIOJX |
PIOIX |
PIOMX |
PIOOX |
PIOPX |
PIOQX |
PICNX |
Core
Plus Bond |
PRBDX |
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PBMJX |
PMSIX |
PBOMX |
PBMMX |
PBMSX |
PBMPX |
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Diversified
International |
PRWLX |
PDNCX |
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 |
PFUEX |
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PFUMX |
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Global
Diversified Income |
PGBAX |
PGDCX |
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PGDIX |
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PGBLX |
Global
Real Estate Securities |
POSAX |
POSCX |
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POSIX |
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PGRKX |
PGRVX |
PGRUX |
PGRSX |
Government
& High Quality Bond |
CMPGX |
CCUGX |
PMRJX |
PMRIX |
PMGRX |
PRCMX |
PMRDX |
PMREX |
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Government
Money Market |
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PGVXX |
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High
Income |
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PYHIX |
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High
Yield |
CPHYX |
CCHIX |
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PHYTX |
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PHYFX |
Inflation
Protection |
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PIPJX |
PIPIX |
PISPX |
PIFPX |
PIFSX |
PBPPX |
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International
Emerging Markets |
PRIAX |
PMKCX |
PIEJX |
PIEIX |
PIXEX |
PEAPX |
PESSX |
PEPSX |
PIIMX |
International
I |
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PINIX |
PPISX |
PRPPX |
PUPPX |
PTPPX |
PIIDX |
LargeCap
Growth I |
PLGAX |
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PLGJX |
PLGIX |
PCRSX |
PPUMX |
PPUSX |
PPUPX |
PLCGX |
LargeCap
S&P 500 Index |
PLSAX |
PLICX |
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 |
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PVEJX |
PVMIX |
PLASX |
PMPRX |
PABWX |
PABVX |
PCMSX |
Money
Market |
PCSXX |
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PMJXX |
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Overseas |
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PINZX |
PINQX |
PINTX |
PINUX |
PINGX |
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Principal
Capital Appreciation |
CMNWX |
CMNCX |
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PWCIX |
PCAMX |
PCAOX |
PCAPX |
PCAQX |
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Principal
LifeTime Strategic Income |
PALTX |
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PLSJX |
PLSIX |
PLAIX |
PLSMX |
PLSSX |
PLSPX |
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Principal
LifeTime 2010 |
PENAX |
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PTAJX |
PTTIX |
PVASX |
PTAMX |
PTASX |
PTAPX |
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Principal
LifeTime 2015 |
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LTINX |
LTSGX |
LTAPX |
LTSLX |
LTPFX |
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Principal
LifeTime 2020 |
PTBAX |
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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 |
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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 |
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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 |
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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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Ticker
Symbols by Share Class |
Fund |
A |
C |
J |
Inst. |
R-1 |
R-3 |
R-4 |
R-5 |
R-6 |
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 |
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 |
PSMCX |
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 |
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PITEX |
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TABLE
OF CONTENTS |
FUND
HISTORY |
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MULTIPLE
CLASS STRUCTURE |
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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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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 FUND AND MONEY MARKET FUND 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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FUND
HISTORY
Principal
Funds, Inc. (“PFI” or the "Fund") was organized as Principal Special Markets
Fund, Inc. on January 28, 1993 as a Maryland corporation. The Fund changed its
name to Principal Investors Fund, Inc. effective September 14, 2000. The Fund
changed its name to Principal Funds, Inc. effective June 13, 2008.
On
January 12, 2007, the Fund acquired WM Trust I, WM Trust II, and WM Strategic
Asset Management Portfolios, LLC.
Classes
offered by each Fund 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 |
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X |
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Core
Fixed Income |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Core
Plus Bond |
X |
|
X |
X |
X |
X |
X |
X |
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Diversified
International |
X |
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 |
X |
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X |
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Global
Diversified Income |
X |
X |
|
X |
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X |
Global
Real Estate Securities |
X |
X |
|
X |
|
X |
X |
X |
X |
Government
& High Quality Bond |
X |
X |
X |
X |
X |
X |
X |
X |
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Government
Money Market |
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X |
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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
Emerging Markets |
X |
X |
X |
X |
X |
X |
X |
X |
X |
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 |
X |
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LargeCap
Value III |
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X |
X |
X |
X |
X |
X |
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MidCap |
X |
X |
X |
X |
X |
X |
X |
X |
X |
MidCap
Growth |
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X |
X |
X |
X |
X |
X |
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MidCap
Growth III |
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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 |
X |
X |
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Principal
Capital Appreciation |
X |
X |
|
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 2010 |
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 |
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|
X |
X |
X |
X |
X |
X |
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Principal
LifeTime 2065 |
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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 |
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|
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 |
|
|
X |
X |
|
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|
X |
Principal
LifeTime Hybrid 2030 |
|
|
X |
X |
|
|
|
|
X |
Principal
LifeTime Hybrid 2035 |
|
|
X |
X |
|
|
|
|
X |
Principal
LifeTime Hybrid 2040 |
|
|
X |
X |
|
|
|
|
X |
Principal
LifeTime Hybrid 2045 |
|
|
X |
X |
|
|
|
|
X |
Principal
LifeTime Hybrid 2050 |
|
|
X |
X |
|
|
|
|
X |
Principal
LifeTime Hybrid 2055 |
|
|
X |
X |
|
|
|
|
X |
Principal
LifeTime Hybrid 2060 |
|
|
X |
X |
|
|
|
|
X |
Principal
LifeTime Hybrid 2065 |
|
|
X |
X |
|
|
|
|
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 |
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.
MULTIPLE
CLASS STRUCTURE
The
Board has adopted a multiple class plan (the Multiple Class Plan) pursuant to
SEC Rule 18f-3. The share classes that are offered by each Fund are identified
in the chart included under the heading "Fund History." The share classes
offered under the plan include: Classes A, C, J, Institutional, R-1, R-3, R-4,
R-5, and R-6.
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
contingent deferred sales charge ("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 contingent deferred sales charge. 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.
PGI
receives a fee for providing investment advisory and certain corporate
administrative services under the terms of the Management Agreement. In addition
to the management fee, the Fund's Classes R-1, R-3, R-4, and R-5 shares pay PGI
a service fee and an administrative services fee under the terms of a Service
Agreement and an Administrative Services Agreement.
Service
Agreement (Classes R-1, R-3, R-4, and R-5 Shares)
The
Service Agreement 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, the Fund 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 the Fund and PGI may
agree).
Administrative
Service Agreement (Classes R-1, R-3, R-4, and R-5 Shares)
The
Administrative Service Agreement 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, the Fund 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 the Fund 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 Service 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.
Rule
12b-1 Fees / Distribution Plans and Agreements
The
Distributor for the Funds is Principal Funds Distributor, Inc. (“PFD”). The
address for PFD is as follows: 620 Coolidge Drive, Suite 300, Folsom, CA
95630.
In
addition to the management and service fees, certain of the Fund's share classes
are subject to a Rule 12b-1 Distribution Plan and Agreement (a “Plan”). 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 directors who are not interested persons of the Fund (as defined in
the 1940 Act)) 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.
The
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
12b-1
Fee |
A
(1)(2)
(0.15%
Government & High Quality Bond, LargeCap S&P 500 Index and
Short-Term Income Funds) |
0.25% |
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. |
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, 2022 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, Principal Funds, Inc. 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 Fund’s 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 Rule 12b-1 Plan are paid to the Distributor, which is
entitled to retain such fees paid by the Fund without regard to the expenses
which it incurs.
The
Funds made the following Distribution/12b-1 payments for the year ended October
31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
Distribution/12b-1
Payments
(amounts
in thousands) |
|
Fund |
Distribution/12b-1
Payments
(amounts
in thousands) |
California
Municipal |
$ |
1,528 |
|
|
Principal
LifeTime 2040 |
$ |
1,767 |
|
Core
Fixed Income |
1,538 |
|
|
Principal
LifeTime 2045 |
240 |
|
Core
Plus Bond |
537 |
|
|
Principal
LifeTime 2050 |
834 |
|
Diversified
International |
903 |
|
|
Principal
LifeTime 2055 |
118 |
|
Equity
Income |
4,369 |
|
|
Principal
LifeTime 2060 |
70 |
|
Finisterre
Emerging Markets Total Return Bond |
6 |
|
|
Principal
LifeTime 2065 |
7 |
|
Global
Diversified Income |
14,402 |
|
|
Principal
LifeTime Hybrid 2015 |
37 |
|
Global
Real Estate Securities |
545 |
|
|
Principal
LifeTime Hybrid 2020 |
94 |
|
Government
& High Quality Bond |
916 |
|
|
Principal
LifeTime Hybrid 2025 |
106 |
|
Government
Money Market |
— |
|
|
Principal
LifeTime Hybrid 2030 |
88 |
|
High
Income |
13 |
|
|
Principal
LifeTime Hybrid 2035 |
69 |
|
High
Yield |
2,758 |
|
|
Principal
LifeTime Hybrid 2040 |
59 |
|
Inflation
Protection |
67 |
|
|
Principal
LifeTime Hybrid 2045 |
34 |
|
International
Emerging Markets |
413 |
|
|
Principal
LifeTime Hybrid 2050 |
30 |
|
International
I |
42 |
|
|
Principal
LifeTime Hybrid 2055 |
10 |
|
LargeCap
Growth I |
1,945 |
|
|
Principal
LifeTime Hybrid 2060 |
3 |
|
LargeCap
S&P 500 Index |
3,038 |
|
|
Principal
LifeTime Hybrid 2065 |
2 |
|
LargeCap
Value III |
133 |
|
|
Principal
LifeTime Hybrid Income |
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
Distribution/12b-1
Payments
(amounts
in thousands) |
|
Fund |
Distribution/12b-1
Payments
(amounts
in thousands) |
MidCap |
7,134 |
|
|
Principal
LifeTime Strategic Income |
196 |
|
MidCap
Growth |
161 |
|
|
Real
Estate Securities |
1,642 |
|
MidCap
Growth III |
83 |
|
|
SAM
Balanced |
10,443 |
|
MidCap
S&P 400 Index |
436 |
|
|
SAM
Conservative Balanced |
3,873 |
|
MidCap
Value I |
319 |
|
|
SAM
Conservative Growth |
7,121 |
|
Money
Market |
553 |
|
|
SAM
Flexible Income |
6,866 |
|
Overseas |
2 |
|
|
SAM
Strategic Growth |
4,454 |
|
Principal
Capital Appreciation |
2,868
|
|
Short-Term
Income |
1,335 |
|
Principal
LifeTime 2010 |
473 |
|
|
SmallCap |
1,058 |
|
Principal
LifeTime 2015 |
119 |
|
|
SmallCap
Growth I |
166 |
|
Principal
LifeTime 2020 |
1,992 |
|
|
SmallCap
S&P 600 Index |
528 |
|
Principal
LifeTime 2025 |
440 |
|
|
SmallCap
Value II |
57 |
|
Principal
LifeTime 2030 |
2,653 |
|
|
Tax-Exempt
Bond |
1,324 |
|
Principal
LifeTime 2035 |
319 |
|
|
|
|
Transfer
Agency Agreement (Classes A, C, J, Institutional, R-1, R-3, R-4, R-5, and R-6
shares)
The
Transfer Agency Agreement provides for Principal Shareholder Services, Inc.
(“PSS”) (620 Coolidge Drive, Suite 300, Folsom, CA 95630), 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 shares.
•For
Classes A and C, and Institutional Class shares, the Fund 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 Fund pays PSS a fee for the services provided pursuant to
the Transfer Agency Agreement in an amount that includes profit.
The
Fund pays PSS for the following services for Classes A, C and J, 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 Fund for sale in states
and jurisdictions as directed by the Fund.
The
Fund does not pay for these services for Classes R-1, R-3, R-4, R-5, and R-6
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 Fund for
sale in states and jurisdictions.
DESCRIPTION
OF THE FUNDS’ INVESTMENTS AND RISKS
The
Fund is a registered, open-end management investment company, commonly called a
mutual fund. The Fund consists of multiple investment portfolios which are
referred to as "Funds." Each portfolio operates for many purposes as if it were
an independent mutual fund. Each portfolio has its own investment objective,
strategy, and management team. Each of the Funds is diversified, 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, except the Finisterre Emerging Markets Total
Return Bond, LargeCap Growth I and Real Estate Securities Funds, which are
non-diversified.
Fund
Policies
The
investment objective, principal investment strategies and principal risks of
each Fund are described in the Prospectus. This Statement of Additional
Information 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 the 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
the 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 the portfolio.
The
investment objective of each Fund and, except as described below as "Fundamental
Restrictions," the investment strategies described in this Statement of
Additional Information 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 each Fund's prospectus or
Statement of Additional Information.
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. 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 which 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
Finisterre Emerging Markets Total Return Bond, 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 the 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
the 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 other 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 International, Finisterre Emerging Markets Total Return Bond, Global
Diversified Income, Global Real Estate Securities, International Emerging
Markets, 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 Global 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 the 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. The 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 restriction, the Fund tests market
capitalization ranges monthly.
For
purposes of testing this requirement with respect to:
•foreign
currency investments, each Fund will count forward foreign currency contracts
and other investments that have economic characteristics similar to foreign
currency; the value of such contracts and investments will include the Fund’s
investments in cash and/or cash equivalents to the extent such instruments are
used to cover 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, the 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
which are “fully paid” (equity swaps in which cash and/or cash equivalents are
specifically segregated on the Fund’s books 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 International, Global Diversified Income, 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
Tax-Exempt Bond Fund has also adopted a fundamental policy which 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.
Pursuant
to SEC staff interpretations of the 1940 Act, a fund that purchases securities
or makes other investments that have a leveraging effect on the fund (for
example, reverse repurchase agreements) must segregate assets to render
them not available for sale or other disposition in an amount equal to the
amount the fund owes pursuant to the terms of the security or other
investment.
Commodity-Related
Investments
All
Funds Except the Finisterre Emerging Markets Total Return Bond Fund
Pursuant
to a claim for exclusion filed with the Commodity Futures Trading Commission
(“CFTC”) on behalf of the Funds under Rule 4.5, the Funds are not deemed to be
“commodity pools” or “commodity pool operators” under the Commodity Exchange Act
(“CEA”). The Funds are therefore not subject to registration under the CEA.
The CFTC recently amended Rule 4.5 “Exclusion 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” or “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. The Funds intend to limit
their use of futures contracts, options on futures contracts and swaps to the
degree necessary to fall within one of the two exclusions. If any of the Funds
is unable to do so, it may incur expenses 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 Unconstrained Emerging
Markets 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 and 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 Securities and Exchange Commission or
any other reasonable industry classification system.
•The
Funds interpret their 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.
•The
Funds view their 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 as permitted by (i) 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 U.S. Securities and Exchange Commission (“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 its investment objectives
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, the market price of the securities may decline
below the purchase price paid by a fund.
In
general, securities which 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
The
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
The
Funds (except the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and
SAM Portfolios) may each write (sell) and purchase call and put options on
securities in which it invests and on securities indices based on securities in
which the Fund invests. The 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 which 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.
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 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.
The
Funds usually own the underlying security covered by any outstanding call
option. With respect to an outstanding put option, each 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. The Funds engage 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. Funds
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. The Funds generally purchase
or write 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 a 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, or dispose of the
assets held in a segregated account, 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
The
Funds (except the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and
SAM Portfolios) may each purchase and sell futures contracts of many types,
including for example, futures contracts covering indexes, financial
instruments, and foreign currencies. Each Fund 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. Each Fund
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. Each Fund may enter into
futures contracts and related options transactions both for hedging and
non-hedging purposes.
Futures
Contracts.
A Fund 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 Funds usually liquidate 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, the 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.
With
respect to futures contracts that settle in cash, a Fund will cover (and
mark-to-market on a daily basis) liquid assets that, when added to the amounts
deposited with a futures commission merchant as margin, are equal to the market
value of the futures contract. When entering into futures contracts that do not
settle in cash (physically-settled futures contracts), a Fund will maintain with
its custodian (and mark-to-market on a daily basis) liquid assets that, when
added to the amounts deposited with a futures commission merchant as margin, are
equal to the full notional value of the contract. Physically-settled derivatives
contracts (and written options on such contracts) will be treated like
cash-settled contracts when a Fund has entered into a contractual arrangement
with a third party futures commission merchant or other counterparty to offset
the Fund’s exposure under the contract and, failing that, to assign its delivery
obligation under the contract to the counterparty.
Options
on Futures Contracts.
The 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. The 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
The
Funds 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
The
Funds (except the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and
SAM Portfolios) may each 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. Each Fund 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 each Fund 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
Each
Fund (except the Government Money Market and Money Market 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. A Fund may also enter into options on swap agreements
(“swap options”).
A
Fund 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 London
Interbank Offered 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.
The
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. The 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. A Fund
may also use actual long and short futures positions to achieve the market
exposure(s) as contracts for differences. A Fund 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. A Fund may engage in swap options for
hedging purposes or in an attempt to manage and mitigate credit and interest
rate risk. Each Fund (except the Government Money Market and Money Market 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 the Funds enter 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) and any accrued but unpaid net amounts owed to a swap counterparty
will be covered by the segregation of assets determined to be liquid by those
managing the fund's investments in accordance with procedures established by the
Board, to avoid any potential leveraging of the Fund's portfolio. In cases where
a Fund is a seller of a credit default swap contract, the Fund will segregate
liquid assets equal to the notional amount of the contract. Obligations under
swap agreements for which the Fund segregates assets will not be construed to be
“senior securities” for purposes of the Fund's investment restriction concerning
senior securities.
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 the Funds by the Internal Revenue
Code may limit the Funds' 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 the funds’ investment policies and restrictions (as stated
in the Prospectuses and this Statement of Additional Information) 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 the funds 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. When a Fund
purchases a futures contract, or writes a call option on a futures contract, it
segregates liquid assets that, when added to the value of assets deposited with
the futures commission merchant as margin, are equal to the market value of the
contract.
Limitations
on the Use of Futures, Options on Futures Contracts, and Swaps
All
Funds except the Finisterre Emerging Markets Total Return Bond Fund.
Pursuant
to a claim for exclusion filed with the Commodity Futures Trading Commission
(“CFTC”) on behalf of the Funds under Rule 4.5, the Funds are not deemed to be
“commodity pools” or “commodity pool operators” under the Commodity Exchange Act
(“CEA”). The Funds are therefore not subject to registration under the CEA.
Rule 4.5 provides that an investment company does not meet the definition of
“commodity pool” or “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. The Funds intend to limit
their use of futures contracts, options on futures contracts and swaps to the
degree necessary to fall within one of the two exclusions.
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. For instance, in December 2015, the SEC proposed new regulations
applicable to a mutual fund's use of derivatives and related
instruments.
If
adopted as proposed, these regulations could significantly limit or impact a
fund's ability to invest in derivatives and related instruments, limit a fund's
ability to employ certain strategies that use derivatives and/or adversely
affect the fund's performance, efficiency in implementing strategies, and
ability to pursue their investment objectives. Limits or restrictions applicable
to the counterparties with which the funds engage in derivative transactions
could also prevent the funds from using certain instruments.
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
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 LIBOR). 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
The
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
The
Funds 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
The
Funds 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
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
The
Funds 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. A
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.
A
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
The
Funds may, but are 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, a 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.
A
Fund segregates liquid assets in an amount equal to (1) at least its daily
marked-to-market (net) obligation (i.e., its daily net liability, if any) with
respect to forward currency contracts that are cash settled and (2) the net
notional value with respect to forward currency contracts that are not cash
settled. 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.
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. 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, including, with respect to the latter, the United Kingdom
(the "UK"), which is a significant market in the global economy. The impact of
these actions, 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.
The
UK’s departure from the EU (referred to as "Brexit") continues to cause
significant uncertainty and may adversely impact the financial results and
operations of various European companies and economies. The effects of Brexit
will largely depend on any agreements the UK makes to retain access to EU
markets. Brexit may result in legal and tax uncertainty and divergent national
laws and regulations as the UK determines which EU laws to replace or replicate.
The UK may be less stable than it has been in recent years and investments in
the UK may be more volatile. Additionally, Brexit could lead to global economic
uncertainty and result in significant volatility in the global stock markets and
currency exchange rate fluctuations. Any of these effects of Brexit, and other
consequences that are difficult to predict at this time, could adversely affect
the value of a fund’s investments.
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
Some
funds invest a portion of their 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
(if the bond has been rated by only one of those agencies, that rating will
determine whether the bond is below investment grade; if the bond has not been
rated by either of those agencies, those managing the fund's investments will
determine whether the bond is of a quality comparable to those rated below
investment grade). 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
The
Funds 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.
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
The
Funds 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 |
2020 Turnover |
2019 Turnover |
|
Comments |
Government
& High Quality Bond Fund |
84.3% |
23.2% |
|
Turnover
increased as a result of reducing exposure to out-of-benchmark positions
and increasing mortgage exposure. |
International
Emerging Markets Fund |
53.9% |
148.3% |
|
Turnover
decreased due to a change in the portfolio management team. |
Principal
LifeTime 2040 Fund |
32.8% |
14.6% |
|
Turnover
varies from year-to-year due to the aging of the glidepath and asset
allocation decisions. |
Principal
LifeTime Hybrid 2050 Fund |
26.5% |
12.6% |
|
Turnover
varies from year-to-year due to the aging of the glidepath and asset
allocation decisions. |
Principal
LifeTime Hybrid 2065 Fund |
65.7% |
143.3% |
|
Turnover
varies from year-to-year due to the aging of the glidepath and asset
allocation decisions. |
SAM
Flexible Income Portfolio |
35.9% |
11.1% |
|
Turnover
increased due to increased tactical
trading. |
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
The
Funds 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.
A
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. While a reverse repurchase agreement is outstanding,
a Fund will maintain cash or appropriate liquid assets to cover its obligation
under the agreement. The 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, although the Fund's intent to segregate assets in
the amount of the reverse repurchase obligation minimizes this
effect.
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.
A
Fund's obligations under a dollar roll agreement must be covered by segregated
liquid assets equal in value to the securities subject to repurchase by the
Fund.
A
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.
A Fund's obligations under a sale-buyback typically would be segregated by
liquid assets equal in value to the amount of the Fund's forward commitment to
repurchase the subject 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(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 or under the direction of the Directors. As described above, some of the
Funds have adopted investment restrictions that limit investments in illiquid
securities. The Directors have adopted procedures to determine the liquidity of
Rule 4(2) short-term paper and of restricted securities that may be resold under
Rule 144A. Securities determined to be liquid under these procedures are
excluded from the preceding investment restriction.
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 the
Funds 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 the 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 the 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.
The
Funds 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 which 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 the 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. The 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 the 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. A 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.
Supranational
Entities
The
Funds 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, all of the Funds
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 the
Funds 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. The
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.
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. When such purchases are outstanding, the Fund will
segregate until the settlement date assets determined to be liquid by those
managing the fund's investments in accordance with procedures established by the
Board, in an amount sufficient to meet the purchase price. Typically, no income
accrues on securities a Fund has committed to purchase prior to the time
delivery of the securities is made, although a Fund may earn income on
securities it has segregated.
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 sponsored by
Principal Life Insurance Company: Principal Funds, Inc. ("PFI"), Principal
Variable Contracts Funds, Inc. ("PVC"), Principal Exchange-Traded Funds
("PETF"), and Principal Diversified Select Real Asset Fund ("PDSRA"), which are
collectively referred to in this SAI as the "Fund Complex." Each Board Member
generally holds office for an indefinite term until the Board Member reaches age
72 (unless such mandatory retirement age is waived by the Board). 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.
Board
Members that are affiliated persons of any investment advisor, the principal
distributor, or the principal underwriter of the Fund Complex are considered
“interested persons” of the Fund (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."
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
Fritz
S. Hirsch, Chair
John
D. Kenney
Padel
L. Lattimer
Meg
VanDeWeghe |
The
Committee’s primary purpose is to assist the Board in performing the
annual review of the Fund’s 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
Elizabeth
A. Nickels, Chair
Leroy
T. Barnes, Jr.
Victor
Hymes
Meg
VanDeWeghe |
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 provides an open avenue of communication among the
independent registered public accountants, PGI's internal auditors, Fund
Complex management, and the Board. |
9 |
Executive
Committee
Timothy
M. Dunbar, 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 stockholders any action which
requires stockholder approval; 3) amend the bylaws; or 4) approve any
merger or share exchange which does not require stockholder
approval. |
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Committee
and Independent Board Members |
Primary
Purpose and Responsibilities |
Meetings
Held During the Last Fiscal Year |
Nominating
and Governance Committee
Elizabeth
Ballantine, Chair
Leroy
T. Barnes, Jr.
Craig
Damos
Elizabeth
A. Nickels |
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 Committee members and management. In
addition, the Committee considers candidates recommended by shareholders
of the Fund Complex. Recommendations should be submitted in writing to
Principal Funds, Inc., 711 High Street, Des Moines, IA 50392. When
evaluating a potential nominee for Independent Board Member, the Committee
generally considers, among other factors: age; education; relevant
business experience; geographical factors; whether the person is
"independent" and otherwise qualified under applicable laws and
regulations to serve as an Independent Board Member; 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. The Committee meets personally with nominees and
conducts a reference check. The final decision is based on a combination
of factors, including the strengths and the experience an individual may
bring to the Board. The Committee believes the Board generally
benefits from diversity of background, experience and views among its
members, and considers these factors in evaluating the Board's
composition. The Board does not regularly use the services of
professional search firms to identify or evaluate potential candidates or
nominees. |
6 |
Operations
Committee
Karrie
McMillan, Chair
Fritz
S. Hirsch
John
D. Kenney
Padel
L. Lattimer |
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 Fund's compliance program and reports to the Board regarding
compliance matters for the Fund and its principal service providers. As part of
its regular risk 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, independent registered
public accounting firm, and internal auditors for PGI or its affiliates, as
appropriate. The Board, with the assistance of Fund 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 oversees a PGI valuation
committee and has approved and periodically reviews valuation policies
applicable to valuing Fund shares.
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
Elizabeth
Ballantine.
Ms. Ballantine has served as an Independent Board Member of the Fund Complex
since 2004. Through her professional training, experience as an attorney, and
experience as a board member and investment consultant, Ms. Ballantine is
experienced in financial, investment and regulatory matters.
Leroy
T. Barnes, Jr.
Mr. Barnes has served as an Independent Board Member of the Fund Complex since
2012. From 2001-2005, Mr. Barnes served as Vice President and Treasurer of
PG&E Corporation. From 1997-2001, Mr. Barnes served as Vice President and
Treasurer of Gap, Inc. Through his education, employment experience, and
experience as a board member, Mr. Barnes is experienced with financial,
accounting, regulatory and investment matters.
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 The Damos Company
(consulting services). Mr. Damos served as President and Chief Executive Officer
of Weitz Company from 2006-2010; Vertical Growth Officer of Weitz Company from
2004-2006; and Chief Financial Officer of Weitz Company from 2000-2004. From
2005-2008, 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.
Fritz
S. Hirsch.
Mr. Hirsch has served as an Independent Board Member of the Fund Complex since
2005. From 2011-2015, Mr. Hirsch served as CEO of MAM USA. He served as
President and Chief Executive Officer of Sassy, Inc. from 1986-2009, and Chief
Financial Officer of Sassy, Inc. from 1983-1985. Through his education,
employment experience, and experience as a board member, Mr. Hirsch is
experienced with financial, accounting, regulatory and investment
matters.
Victor
Hymes.
Mr. Hymes has served as an Independent Board Member of the Fund Complex since
2020. He currently serves as Founder and Managing Member of Legato Capital
Management, LLC, an investment management company. Over the past thirty years,
Mr. Hymes has served in the roles of CEO, CIO, portfolio manager and other
senior management positions with investment management firms. At Zurich Scudder
Investments, Inc., Mr. Hymes was responsible for leading their $80 billion
institutional business. Prior to this, he held positions with 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, regulatory and investment matters.
John
D. Kenney. Mr.
Kenney has served as an Independent Board Member of the Fund Complex since 2020.
From 2011 to January 2020, Mr. Kenney served in various capacities at Legg Mason
Global Asset Management, including most recently as Executive Vice President,
Global Head of Affiliate Strategic Initiatives. Prior to that, from 2002 to
2011, he served in various roles in the fixed income and capital markets
business of Legg Mason and its related entities. Through his employment
experience and experience as a board member, Mr. Kenney is experienced with
financial, accounting, regulatory and investment matters.
Padelford
("Padel") 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,
a financial services-focused management consulting and staffing company. 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
("Karrie”) McMillan.
Ms. McMillan has served as an
Independent Board Member of the Fund Complex since
2014. From 2007-2014, 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 1991-1999, she
served in various roles as counsel at the Securities and Exchange Commission,
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. Ms. Nickels currently serves 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.
Mary
M. (“Meg”) VanDeWeghe. Ms.
VanDeWeghe has served as an Independent Board Member of the Fund Complex since
2018. She is CEO and President of Forte Consulting, Inc., a management and
financial consulting firm, and was previously employed as a Finance Professor at
Georgetown University from 2009-2016, Senior Vice President - Finance at
Lockheed Martin Corporation from 2006-2009, a Finance Professor at the
University of Maryland from 1996-2006, and in various positions at J.P. Morgan
from 1983-1996. Ms. VanDeWeghe served as a director of Brown Advisory from
2003-2018, B/E Aerospace from 2014-2017, WP Carey from 2014-2017, and Nalco (and
its successor Ecolab) from 2009-2014. Through her education, employment
experience, and experience as a board member, Ms. VanDeWeghe is experienced with
financial, investment and regulatory matters.
Interested
Board Members
Timothy
M. Dunbar. Mr.
Dunbar has served as Chair of the Fund Complex since 2019. From 2018 through
November 2020, Mr. Dunbar served as President of Global Asset Management for
Principal®,
overseeing all of Principal’s asset management capabilities, including with
respect to PGI, PLIC, and PFSI, among others. He also has served on numerous
boards of directors of Principal®
affiliates, including PGI and Post, and in various other positions since joining
Principal®
in 1986 through his retirement in January 2021. Through his education and
employment experience, Mr. Dunbar is experienced with financial, accounting,
regulatory and investment matters.
Patrick
G. Halter. Mr.
Halter has served as a Board Member of the Fund Complex since 2017. Mr. Halter
also serves as President for Global Asset Management for Principal®
and as Chief Executive Officer, President and Chair of PGI, and Chief Executive
Officer, President and Chair of Principal Real Estate Investors ("Principal -
REI"). He serves on numerous boards of directors of Principal®
affiliates and has served in various other positions since joining
Principal®
in 1984. Through his education and employment experience, Mr. Halter 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 |
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Elizabeth
Ballantine
711
High Street
Des
Moines, IA 50392
1948 |
Director,
PFI and PVC (since 2004) Trustee, PETF (since 2014)
Trustee,
PDSRA (since 2019) |
Principal,
EBA Associates
(consulting
and investments) |
123 |
Durango
Herald, Inc.;
McClatchy
Newspapers, Inc. |
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Leroy
T. Barnes, Jr.
711
High Street
Des
Moines, IA 50392
1951 |
Director,
PFI and PVC (since 2012) Trustee, PETF (since 2014)
Trustee,
PDSRA (since 2019) |
Retired
|
123 |
McClatchy
Newspapers, Inc.; Frontier Communications, Inc.; formerly, Herbalife
Ltd. |
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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,
PDSRA (since 2019) |
President,
C.P. Damos Consulting LLC |
123 |
None |
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Fritz
S. Hirsch
711
High Street
Des
Moines, IA 50392
1951 |
Director,
PFI and PVC (since 2005) Trustee, PETF (since 2014)
Trustee,
PDSRA (since 2019)
|
February
2020 to October 2020, Interim CEO, MAM USA (manufacturer of infant and
juvenile products) |
123 |
MAM
USA |
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Victor
Hymes
711
High Street
Des
Moines, IA 50392
1957 |
Director,
PFI and PVC (since 2020) Trustee, PETF (since 2020)
Trustee,
PDSRA (since 2020) |
Founder
and Managing Member of Legato Capital Management, LLC |
123 |
Formerly,
Montgomery Street Income Securities Inc. |
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John
D. Kenney 711 High Street Des Moines, IA 50392 1965 |
Director,
PFI and PVC (since 2020) Trustee, PETF (since 2020) Trustee, PDSRA
(since 2020) |
Formerly,
Legg Mason Global Asset Management |
123 |
Formerly:
Legg Mason Investment Management Affiliates: Brandywine Global; Clarion
Partners; ClearBridge Investments; Entrust Global; Legg Mason Poland;
Martin Currie Investment Management; Permal Group (merged into Entrust);
QS Investors; RARE Infrastructure; Royce and Associates; and Western Asset
Management |
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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 |
Padelford
("Padel") L. Lattimer
711
High Street
Des
Moines, IA 50392
1961 |
Director,
PFI and PVC (since 2020) Trustee, PETF (since 2020)
Trustee,
PDSRA (since 2020) |
TBA
Management Consulting LLC |
123 |
None |
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Karen
(“Karrie”) McMillan 711 High Street Des Moines, IA
50392 1961 |
Director,
PFI and PVC (since 2014) Trustee, PETF (since 2014) Trustee, PDSRA
(since 2019) |
Founder/Owner,
Tyche Consulting LLC Formerly, Managing Director, Patomak Global
Partners, LLC (financial services consulting) |
123 |
None |
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Elizabeth
A. Nickels 711 High Street Des Moines, IA 50392 1962 |
Director,
PFI and PVC (since 2015) Trustee, PETF (since 2015) Trustee, PDSRA
(since 2019) |
Retired |
123 |
SpartanNash;
Formerly: Charlotte Russe; Follet Corporation; PetSmart; Spectrum Health
System |
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Mary
M. (“Meg”) VanDeWeghe 711 High Street Des Moines, IA
50392 1959 |
Director,
PFI and PVC (since 2018) Trustee, PETF (since 2018) Trustee, PDSRA
(since 2019) |
CEO
and President, Forte Consulting, Inc. (financial and management
consulting) |
123 |
Helmerich
& Payne; Formerly: B/E Aerospace; Brown Advisory; Denbury
Resources Inc.; Nalco (and its successor Ecolab); and WP
Carey |
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INTERESTED
BOARD MEMBERS |
Name,
Address, and Year of Birth |
Board
Positions Held
with
Fund Complex |
Positions
with PGI
and
its affiliates;
Principal
Occupation(s)
During
Past 5 Years**
(unless
noted otherwise) |
Number
of Portfolios Overseen in Fund Complex |
Other
Directorships Held During Past 5 Years |
Timothy
M. Dunbar 711 High Street Des Moines, IA 50392 1957 |
Chair
(since 2019) Director, PFI and PVC (since 2019) Trustee, PETF
(since 2019) Trustee, PDSRA (since 2019) |
President-PGAM,
PGI (since 2018) Director, PGI (2018-2020) Division President,
PFSI and PLIC (2020-2021) Executive Vice President and Chief
Investment Officer, PFSI and PLIC (2014-2018) President-PGAM, PFSI
and PLIC (2018-2020) Director, Post (2018-2020) Chair and
Executive Vice President, RobustWealth, Inc. (2018-2020) |
123 |
None |
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Patrick
G. Halter 711 High Street Des Moines, IA 50392 1959 |
Director,
PFI and PVC (since 2017) Trustee, PETF (since 2017) Trustee, PDSRA
(since 2019) |
Chair,
PGI (since 2018)
Chief
Executive Officer and
President,
PGI (since 2018)
Chief
Operating Officer,
PGI
(2017-2018)
Director,
PGI (2003-2018)
Director,
Origin (2018-2019)
President–PGAM,
PFSI and
PLIC
(since 2020)
Chair,
Post (2017-2020)
Director,
Post (since 2017)
Chair,
Principal–REI (since 2004)
President
and Chief Executive Officer - PGI, Principal-REI
(since
2018)
Chief
Executive Officer,
Principal–REI
(2005-2018)
Chair,
Spectrum (since 2017) |
123 |
None |
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FUND
COMPLEX OFFICERS |
Name,
Address
and
Year of Birth |
Position(s)
Held
with
Fund Complex |
Positions
with PGI and its Affiliates;
Principal
Occupations During Past 5 Years** |
|
|
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Kamal
Bhatia 711 High Street Des Moines, IA 50392 1972 |
President
and Chief Executive Officer (since 2019) |
Director,
PGI (since 2019) President-Principal Funds, PGI (since
2019) Principal Executive Officer, OPC Private Capital
(2017-2019) Senior Vice President, Oppenheimer Funds
(2011-2019) Director, PFD (since 2019) Senior Executive Director and
Chief Operating Officer, PFSI and PLIC (since 2020) President, PFSI
and PLIC (2019-2020) Director, Post (since 2020) Director,
Principal���REI (since 2020) Chair and Executive Vice President, PSS
(since 2019) |
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Randy
D. Bolin 711 High Street Des Moines, IA 50392 1961 |
Assistant
Tax Counsel (since 2020) |
Vice
President and Associate General Counsel, PGI (since 2016)
Vice
President and Associate General Counsel, PFSI (since 2013)
Vice
President and Associate General Counsel, PLIC (since
2013) |
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Tracy
W. Bollin 711 High Street Des Moines, IA 50392 1970 |
Chief
Financial Officer (since 2014)
|
Managing
Director - Fund Operations, PGI (since 2016) Senior Vice President, PFD
(since 2016) Chief Operating Officer and Senior Vice President, PMC
(2015-2017) Director, PMC (2014-2017) Director, PSS (since 2014)
President, PSS (since 2015) |
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Gina
L. Graham 711 High Street Des Moines, IA 50392 1965 |
Treasurer
(since 2016) |
Vice
President and Treasurer, PGI (since 2016) Vice President and Treasurer,
PFD (since 2016) Vice President and Treasurer, PFSI (since
2016) Vice President and Treasurer, PLIC (since 2016) Vice President
and Treasurer, Principal - REI (since 2017) Vice President and
Treasurer, PSI (since 2016) Vice President and Treasurer, PSS (since
2016) Vice President and Treasurer, RobustWealth, Inc. (since
2018) |
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Laura
B. Latham 711 High Street Des Moines, IA 50392 1986 |
Assistant
Counsel and Assistant Secretary (since 2018) |
Counsel,
PGI (since 2018) Counsel, PLIC (since 2018) Prior thereto, Attorney
in Private Practice |
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Diane
K. Nelson 711 High Street Des Moines, IA 50392 1965 |
AML
Officer (since 2016) |
Chief
Compliance Officer/AML Officer, PSS (since 2015) |
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Sara
L. Reece 711 High Street Des Moines, IA 50392 1975 |
Vice
President and Controller (since 2016) |
Director
- Accounting, PLIC (since 2015) |
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Teri
R. Root 711 High Street Des Moines, IA 50392 1979 |
Chief
Compliance Officer (since 2018) Interim Chief Compliance Officer
(2018) Deputy Chief Compliance Officer (2015-2018) |
Chief
Compliance Officer - Funds, PGI (since 2018) Deputy Chief Compliance
Officer, PGI (2017-2018) Vice President and Chief Compliance Officer,
PMC (2015-2017) Vice President, PSS (since 2015) |
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Britney
L. Schnathorst 711 High Street Des Moines, IA
50392 1981 |
Assistant
Secretary (since 2017) Assistant Counsel (since 2014) |
Counsel,
PGI (since 2018) Counsel, PLIC (since 2013) |
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Adam
U. Shaikh 711 High Street Des Moines, IA 50392 1972 |
Assistant
Counsel (since 2006) |
Assistant
General Counsel, PGI (since 2018) Counsel, PGI (2017-2018) Counsel,
PLIC (since 2006) Counsel, PMC (2007-2017) |
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John
L. Sullivan 711 High Street Des Moines, IA 50392 1970 |
Assistant
Counsel and Assistant Secretary (since 2019) |
Counsel,
PGI (since 2020) Counsel, PLIC (since 2019) Prior thereto, Attorney
in Private Practice |
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Dan
L. Westholm 711 High Street Des Moines, IA 50392 1966 |
Assistant
Treasurer (since 2006) |
Assistant
Vice President-Treasury, PGI (since 2013) Assistant Vice
President-Treasury, PFD (since 2013) Assistant Vice President-Treasury,
PLIC (since 2014) Assistant Vice President-Treasury, PSI (since
2013) Assistant Vice President-Treasury, PSS (since 2013) |
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FUND
COMPLEX OFFICERS |
Name,
Address
and
Year of Birth |
Position(s)
Held
with
Fund Complex |
Positions
with PGI and its Affiliates;
Principal
Occupations During Past 5 Years** |
Beth
C. Wilson 711 High Street Des Moines, IA 50392 1956 |
Vice
President and Secretary (since 2007) |
Director
and Secretary-Funds, PLIC (since 2007) |
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Clint
L. Woods 711 High Street Des Moines, IA 50392 1961 |
Vice
President, Counsel and Assistant Secretary (since 2018) Of Counsel
(2017-2018) Vice President (2016-2017) Counsel (2015-2017) |
Vice
President, Associate General Counsel and Secretary
PGI
(since 2020)
Vice
President, Associate General Counsel, Governance Officer and
Assistant
Corporate Secretary, PGI (2018-2020)
Vice
President, Associate General Counsel and
Assistant
Corporate Secretary, PFD (since 2019)
Vice
President, Associate General Counsel, Governance Officer and
Assistant
Corporate Secretary, PFSI (since 2015)
Vice
President, Associate General Counsel, Governance Officer and
Assistant
Corporate Secretary, PLIC (since 2015)
Secretary,
Post (since 2020)
Vice
President, Associate General Counsel, Governance Officer and
Secretary,
Principal-REI (since 2020)
Vice
President, Associate General Counsel, Governance Officer and
Assistant
Corporate Secretary, Principal-REI (2020)
Vice
President, Associate General Counsel and
Assistant
Corporate Secretary, PSI (since 2019)
Vice
President, Associate General Counsel and
Assistant
Corporate Secretary, PSS (since 2019)
Vice
President, Associate General Counsel and
Assistant
Secretary, RobustWealth, Inc. (since 2019)
Secretary,
Spectrum (since 2020) |
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Jared
A. Yepsen 711 High Street Des Moines, IA 50392 1981 |
Assistant
Tax Counsel (since 2017) |
Counsel,
PGI (2017-2019) Counsel, PLIC (since
2015) |
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**Abbreviations
used: |
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Origin
Asset Management LLP (Origin) |
Principal
Life Insurance Company (PLIC) |
Post
Advisory Group, LLC (Post) |
Principal
Management Corporation (PMC), now PGI |
Principal
Financial Services, Inc. (PFSI) |
Principal
Real Estate Investors, LLC (Principal - REI) |
Principal
Funds Distributor, Inc. (PFD) |
Principal
Securities, Inc. (PSI) |
Principal
Global Asset Management (PGAM) |
Principal
Shareholder Services, Inc. (PSS) |
Principal
Global Investors, LLC (PGI) |
Spectrum
Asset Management, Inc. (Spectrum) |
Board
Member Ownership of Securities
The
following tables set forth the dollar range of the equity securities of the
Funds included in this SAI, and the aggregate dollar range of equity securities
in the Fund Complex, which were beneficially owned by the Board Members as of
December 31, 2020. As of that date, Board Members did not own shares of
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 which invests in the Fund Complex. Board Members who
beneficially owned shares of 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
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Independent
Board Members |
Fund
|
Ballantine |
Barnes |
Damos |
Hirsch |
Hymes(1) |
Kenney(2) |
Lattimer(1) |
McMillan |
Nickels |
VanDeWeghe |
Core
Plus Bond |
A |
A |
E |
D |
A |
A |
A |
A |
A |
A |
Diversified
International |
C |
A |
A |
D |
A |
A |
A |
A |
A |
A |
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|
|
Independent
Board Members |
Fund
|
Ballantine |
Barnes |
Damos |
Hirsch |
Hymes(1) |
Kenney(2) |
Lattimer(1) |
McMillan |
Nickels |
VanDeWeghe |
Equity
Income |
A |
A |
E |
A |
A |
A |
A |
A |
A |
A |
Global
Diversified Income |
A |
E |
A |
D |
A |
A |
A |
D |
A |
A |
Global
Real Estate Securities |
A |
A |
A |
C |
C |
A |
A |
A |
A |
A |
High
Income |
A |
A |
A |
A |
A |
E |
A |
A |
A |
A |
High
Yield |
A |
A |
A |
C |
A |
A |
A |
A |
A |
A |
Inflation
Protection |
A |
A |
A |
C |
A |
A |
A |
A |
A |
A |
International
Emerging Markets |
A |
A |
A |
C |
A |
A |
A |
A |
A |
A |
LargeCap
S&P 500 Index |
A |
A |
A |
D |
A |
A |
A |
A |
A |
A |
MidCap |
A |
A |
E |
A |
A |
A |
A |
A |
E |
A |
Principal
LifeTime 2030 |
A |
A |
A |
E |
A |
A |
A |
A |
A |
A |
SAM
Conservative Growth |
A |
A |
E |
A |
A |
A |
A |
A |
A |
A |
SmallCap
|
C |
A |
E |
A |
A |
A |
A |
A |
A |
A |
SmallCap
Value Fund II |
A |
A |
A |
C |
A |
A |
A |
A |
A |
A |
Total
Fund Complex |
D |
E |
E |
E |
C |
E |
A |
E |
E |
E |
(1)
Director's appointment effective December 15, 2020.
(2)
Director’s appointment effective September 15, 2020.
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|
Interested
Board Members |
Fund |
Dunbar |
Halter |
Equity
Income |
A |
E |
LargeCap
Growth I |
D |
E |
Money
Market |
A |
B |
Principal
Capital Appreciation |
D |
A |
|
|
|
Principal
Funds, Inc. (through participation in an Employee benefit plan) |
Dunbar |
Halter |
LargeCap
S&P 500 Index |
A |
E |
Principal
LifeTime Hybrid 2015 |
E |
A |
Principal
LifeTime Hybrid 2020 |
E |
A |
Principal
LifeTime Hybrid 2030 |
E |
A |
Total
Fund Complex |
E |
E |
Mr.
Kenney was a member of the Executive Committee at Legg Mason, Inc. (“Legg
Mason”) until January 1, 2020, and served on the board of each Legg Mason
affiliate, including ClearBridge RARE Infrastructure (North America) Pty
Limited, a sub-advisor to the Principal Fund Complex. Mr. Kenney’s compensation
from Legg Mason, including securities liquidated following his employment there,
exceeded $120,000. Mr. Kenney remains subject to Legg Mason (now Franklin
Resources, Inc.) deferred compensation plans that are invested in mutual funds
sponsored and/or advised by Legg Mason and/or Franklin Templeton.
Board
Member and Officer Compensation
The
Fund Complex does not pay any remuneration to its Board Members or officers who
are employed by PGI or its affiliates. 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, 2020. On that date, there were
4 investment companies in the Fund Complex. The Fund does not provide retirement
benefits or pensions to any of the Board Members.
|
|
|
|
|
|
|
|
|
Board
Member |
Funds
in this SAI |
Fund
Complex |
Elizabeth
Ballantine |
$222,047 |
$291,533 |
Leroy
T. Barnes, Jr. |
$230,400 |
$302,500 |
Craig
Damos |
$270,729 |
$355,500 |
Fritz
S. Hirsch |
$235,349 |
$309,000 |
Victor
Hymes (1) |
$0 |
$0 |
John
D. Kenney (2) |
$57,101 |
$75,667 |
Padelford
("Padel") L. Lattimer (1) |
$0 |
$0 |
Karen
("Karrie") McMillan |
$233,826 |
$307,000 |
Elizabeth
A. Nickels |
$234,969 |
$308,500 |
Mary
M. (“Meg”) VanDeWeghe |
$221,638 |
$291,000 |
|
|
|
(1)
Director's appointment effective December 15, 2020. |
(2)
Director's appointment effective September 15,
2020. |
INVESTMENT
ADVISORY AND OTHER SERVICES
Investment
Advisors
Principal
Global Investors, LLC (“PGI”), an indirect subsidiary of Principal Financial
Group, Inc. ("Principal®"),
serves as the manager for the Fund. Principal Management Corporation, previously
an affiliate of PGI, served as manager to the Fund 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.
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.
|
|
|
|
|
|
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, 2020, ABH
owned approximately 35.5% of the issued and outstanding AllianceBernstein
Units; EQH and its subsidiaries had an approximate 63.8% 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 ("Barrow Hanley") is
an indirect subsidiary of Perpetual Limited ("Perpetual") (ASX:PPT), an
Australian financial services firm. |
|
|
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. BlackRock and
its affiliates manage investment company and other portfolio
assets. |
|
|
|
Sub-Sub-Advisor:
BlackRock
International Limited is
an indirect wholly-owned subsidiary of BlackRock, Inc. |
|
|
Fund(s): |
Inflation
Protection |
|
|
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: |
DDJ
Capital Management, LLC (“DDJ”)
is a privately-owned Massachusetts limited liability company. David
Breazzano, DDJ’s co-founder, president and chief investment officer, is
the largest equity owner and holds 100% voting control of the
firm. |
|
|
Fund(s): |
a
portion of the assets of Global Diversified Income and a portion of the
assets of High Income |
|
|
|
|
|
|
|
|
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: |
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: |
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, and
Hal W. Reynolds, Chief Investment Officer, hold a controlling equity
interest in the Parent Company. |
|
|
Fund(s): |
a
portion of the assets of MidCap Value I and a portion of the assets of
SmallCap Value II |
|
|
Sub-Advisor: |
Mellon
Investments Corporation (“Mellon”)
is an independently operated indirect subsidiary of The Bank of New York
Mellon Corporation, a banking and financial services company. Employees of
Mellon own a small minority interest of the company. Mellon is a
registered investment advisor and organized as a corporation in the state
of Delaware. |
|
|
Fund(s): |
a
portion of the assets of High Income |
|
|
Sub-Advisor: |
MetLife
Investment Management, LLC (“MIM”)
is a wholly-owned indirect subsidiary of MetLife, Inc.
|
|
|
Fund(s): |
a
portion of the assets of Global Diversified Income |
|
|
Sub-Advisor: |
Origin
Asset Management LLP (“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: |
Post
Advisory Group, LLC (“Post”)
is an indirect majority-owned subsidiary of Principal Financial Group,
Inc. |
|
|
Fund(s): |
a
portion of the assets of Global Diversified Income and a portion of the
assets of High Income |
|
|
|
|
|
|
|
|
|
|
|
|
Sub-Advisor: |
Principal
Real Estate Investors, LLC ("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 Global 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 Global 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, LP ("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: |
W.
H. Reaves & Co., Inc. (doing business as Reaves Asset
Management)
is employee owned and no employee owns 25% or more of the
firm. |
|
|
Fund(s): |
a
portion of the assets of Global Diversified Income |
|
|
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 |
Affiliated
Persons of the Fund Who are Affiliated Persons of the Advisor
For
information about affiliated persons of the Fund 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.
Codes
of Ethics
The
Fund, PGI, each of the Sub-Advisors, and PFD 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 a Fund from
using that information for their personal benefit. Except in limited
circumstances, the Code for PGI and the Fund 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 the 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 the Fund.
The
Fund’s Board reviews reports at least annually regarding the operation of the
Code of Ethics of the Fund, PGI, PFD, and each Sub-Advisor. A copy of the Fund’s
Code will be provided upon request, which may be made by contacting the
Fund.
Management
Agreement
Under
the terms of the Management Agreement for the Fund, 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 schedules for the Funds are as
follows (expressed as a percentage of average net assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
First
$500
million |
Next
$500
million |
Next
$500
million |
Over
$1.5
billion |
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 |
0.90 |
0.86 |
0.84 |
0.82 |
SmallCap |
0.75 |
0.73 |
0.71 |
0.70 |
Tax-Exempt
Bond |
0.45 |
0.43 |
0.41 |
0.40 |
|
|
|
|
|
|
Fund |
All
Assets |
Principal
LifeTime Strategic Income |
0.00% |
Principal
LifeTime 2010 |
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 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
First
$500 million |
Next
$500 million |
Next
$500 million |
Next
$500 million |
Next
$1 billion |
Over
$3 billion |
Core
Plus Bond |
0.55% |
0.53% |
0.51% |
0.50% |
0.48% |
0.45% |
Global
Diversified Income |
0.80 |
0.78 |
0.76 |
0.75 |
0.73 |
0.70 |
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 |
0.75 |
0.73 |
0.71 |
0.70 |
0.69 |
0.68 |
International
Emerging Markets |
1.05 |
1.03 |
1.01 |
1.00 |
0.99 |
0.98 |
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 |
0.97 |
0.95 |
0.93 |
0.92 |
0.91 |
0.90 |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
First $500
million |
Next $500
million |
Next $500
million |
Next $500
million |
Next $1
billion |
Next $2
billion |
Over $5
billion |
Real
Estate Securities |
0.85% |
0.83% |
0.81% |
0.80% |
0.79% |
0.78% |
0.77% |
|
|
|
|
|
|
|
|
|
Fund |
First
$1
billion |
Over
$1 billion |
California
Municipal |
0.45% |
0.40% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
First
$1 billion |
Next $4
billion |
Next $2
billion |
Over $7
billion |
Core
Fixed Income |
0.43% |
0.41% |
0.40% |
0.38% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
First
$500 million |
Next
$500 million |
Next
$500 million |
Next
$500 million |
Next
$1 billion |
Next
$7 billion |
Over
$10 billion |
Diversified
International |
0.80% |
0.78% |
0.76% |
0.75% |
0.73% |
0.70% |
0.69% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
First $250
million |
Next $250
million |
Next
$6.5 billion |
Over
$7 billion |
Equity
Income |
0.60% |
0.55% |
0.50% |
0.49% |
|
|
|
|
|
|
|
|
|
Fund |
First
$250
million |
Over
$250 million |
High
Yield |
0.625% |
0.50% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
Over $18
billion |
MidCap |
0.65% |
0.63% |
0.61% |
0.60% |
0.59% |
0.58% |
0.57% |
0.56% |
0.55% |
|
|
|
|
|
|
Fund |
All
Assets |
Government
Money Market |
0.15% |
LargeCap
S&P 500 Index |
0.15 |
MidCap
S&P 400 Index |
0.15 |
SmallCap
S&P 600 Index |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
First
$500
million |
Next
$500
million |
Over
$1
billion |
Principal
Capital Appreciation |
0.625% |
0.50% |
0.375% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
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. |
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
First $1
billion |
Next $4
billion |
Over $5
billion |
Short-Term
Income |
0.42% |
0.40% |
0.35% |
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 the Funds with the SEC, compensation of personnel, officers and
directors who are also 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 Fund. Accounting services customarily required by investment companies are
provided to each Fund by PGI, under the terms of the Management Agreement.
Principal Shareholder Services, Inc., an affiliate of PGI, provides transfer
agent services for Classes A, C, J, Institutional, R-1, R-3, R-4, R-5, and R-6
shares, including qualifying shares of the Fund for sale in states and other
jurisdictions. PGI is also responsible for providing certain shareholder and
administrative services to Classes R-1, R-3, R-4 and R-5 shares pursuant to a
Service Agreement and an Administrative Services Agreement.
Contractual
Limits on Total Annual Fund Operating Expenses
PGI
has contractually agreed to limit the Fund's expenses (excluding interest
expense, expenses related to fund investments, acquired fund fees and 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, 2022.
The
operating expense limits and the agreement terms are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual
Limits on Total Annual Fund Operating Expenses |
Fund |
A |
C |
J |
Inst. |
Expiration |
California
Municipal |
N/A |
N/A |
N/A |
0.51% |
2/28/2022 |
Core
Plus Bond |
0.84% |
N/A |
N/A |
0.56% |
2/28/2022 |
Diversified
International |
N/A |
1.98% |
N/A |
0.85% |
2/28/2022 |
Equity
Income |
N/A |
N/A |
N/A |
0.52% |
2/28/2022 |
Finisterre
Emerging Markets Total Return Bond |
1.20% |
N/A |
N/A |
0.85% |
2/28/2022 |
Global
Diversified Income |
N/A |
N/A |
N/A |
0.68% |
2/28/2022 |
Global
Real Estate Securities |
N/A |
N/A |
N/A |
0.94% |
2/28/2022 |
Government
& High Quality Bond |
N/A |
1.63% |
N/A |
0.53% |
2/28/2022 |
Government
Money Market |
N/A |
N/A |
N/A |
0.15% |
2/28/2022 |
High
Yield |
N/A |
N/A |
N/A |
0.61% |
2/28/2022 |
Inflation
Protection |
N/A |
N/A |
1.15% |
N/A |
2/28/2022 |
International
I |
N/A |
N/A |
N/A |
0.90% |
2/28/2022 |
International
Emerging Markets |
1.55% |
2.51% |
1.37% |
1.20% |
2/28/2022 |
LargeCap
S&P 500 Index |
N/A |
1.30% |
N/A |
N/A |
2/28/2022 |
MidCap |
N/A |
N/A |
N/A |
0.70% |
2/28/2022 |
MidCap
Growth |
N/A |
N/A |
N/A |
0.75% |
2/28/2022 |
MidCap
Value I |
N/A |
N/A |
N/A |
0.72% |
2/28/2022 |
Money
Market |
0.50% |
N/A |
N/A |
N/A |
2/28/2022 |
Principal
LifeTime 2010 |
0.38% |
N/A |
N/A |
N/A |
2/28/2022 |
Principal
LifeTime 2020 |
0.38% |
N/A |
N/A |
N/A |
2/28/2022 |
Principal
LifeTime 2030 |
0.38% |
N/A |
N/A |
N/A |
2/28/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual
Limits on Total Annual Fund Operating Expenses |
Fund |
A |
C |
J |
Inst. |
Expiration |
Principal
LifeTime 2040 |
0.38% |
N/A |
N/A |
N/A |
2/28/2022 |
Principal
LifeTime 2050 |
0.38% |
N/A |
N/A |
N/A |
2/28/2022 |
Principal
LifeTime 2060 |
N/A |
N/A |
0.38% |
N/A |
2/28/2022 |
Principal
LifeTime 2065 |
N/A |
N/A |
N/A |
0.08% |
2/28/2022 |
Principal
LifeTime Strategic Income |
0.38% |
N/A |
N/A |
N/A |
2/28/2022 |
Principal
LifeTime Hybrid 2015 |
N/A |
N/A |
0.30% |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid 2020 |
N/A |
N/A |
N/A |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid 2025 |
N/A |
N/A |
N/A |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid 2030 |
N/A |
N/A |
N/A |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid 2035 |
N/A |
N/A |
N/A |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid 2040 |
N/A |
N/A |
0.30% |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid 2045 |
N/A |
N/A |
0.30% |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid 2050 |
N/A |
N/A |
0.30% |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid 2055 |
N/A |
N/A |
0.30% |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid 2060 |
N/A |
N/A |
0.30% |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid 2065 |
N/A |
N/A |
0.30% |
0.05% |
2/28/2022 |
Principal
LifeTime Hybrid Income |
N/A |
N/A |
0.30% |
0.05% |
2/28/2022 |
Real
Estate Securities |
N/A |
N/A |
N/A |
0.91% |
2/28/2022 |
Short-Term
Income |
N/A |
N/A |
N/A |
0.43% |
2/28/2022 |
SmallCap |
N/A |
N/A |
N/A |
0.85% |
2/28/2022 |
SmallCap
S&P 600 Index |
N/A |
N/A |
N/A |
0.21% |
2/28/2022 |
SmallCap
Value II |
N/A |
N/A |
N/A |
0.96% |
2/28/2022 |
Tax-Exempt
Bond |
N/A |
1.60% |
N/A |
0.52% |
2/28/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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% |
2/28/2022 |
Principal
LifeTime 2065 |
0.93% |
0.62% |
0.43% |
0.31% |
2/28/2022 |
Short-Term
Income |
N/A |
N/A |
0.79% |
N/A |
2/28/2022 |
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 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:
|
|
|
|
|
|
|
|
|
Contractual
Limits on Other Expenses |
Fund |
R-6 |
Expiration |
Diversified
International |
0.04% |
2/28/2022 |
Global
Diversified Income |
0.02% |
2/28/2022 |
Global
Real Estate Securities |
0.02% |
2/28/2022 |
International
I |
0.04% |
2/28/2022 |
International
Emerging Markets |
0.04% |
2/28/2022 |
MidCap |
0.02% |
2/28/2022 |
MidCap
S&P 400 Index |
0.02% |
2/28/2022 |
MidCap
Value I |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid Income |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2015 |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2020 |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2025 |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2030 |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2035 |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2040 |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2045 |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2050 |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2055 |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2060 |
0.02% |
2/28/2022 |
Principal
LifeTime Hybrid 2065 |
0.02% |
2/28/2022 |
SmallCap |
0.02% |
2/28/2022 |
SmallCap
Growth I |
0.01% |
2/28/2022 |
SmallCap
S&P 600 Index |
0.02% |
2/28/2022 |
SmallCap
Value II |
0.02% |
2/28/2022 |
Contractual
Management Fee Waivers
PGI
has contractually agreed to limit certain of the Funds' management fees. The
expense limit will reduce the Fund's management fees by the amounts listed
below:
|
|
|
|
|
|
|
|
|
Contractual
Fee Waivers |
Fund |
Waiver |
Expiration |
Core
Plus Bond |
0.060% |
2/28/2022 |
Global
Diversified Income |
0.080% |
2/28/2022 |
High
Income |
0.015% |
2/28/2022 |
LargeCap
Growth I |
0.016% |
2/28/2022 |
LargeCap
Value III |
0.065% |
2/28/2022 |
MidCap
Growth III |
0.020% |
2/28/2022 |
MidCap
Value I |
0.020% |
2/28/2022 |
Overseas |
0.035% |
2/28/2022 |
SmallCap
Growth I |
0.020% |
2/28/2022 |
SmallCap
Value II |
0.020% |
2/28/2022 |
Limits
on Distribution Fees and/or Service (12b-1) Fees
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, 2022 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, Principal Funds, Inc. 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, Principal Funds Distributor, Inc. ("the Distributor") has
voluntarily agreed to limit the Distribution Fees attributable to Class J,
reducing the Fund’s 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%.
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
Fees
paid for investment management services (before any waivers/reimbursements from
PGI) during the periods indicated were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management
Fees for Periods Ended October 31 (amounts in thousands) |
Fund |
2020 |
|
2019 |
|
2018 |
|
California
Municipal |
$2,845 |
|
$2,084 |
|
$1,874 |
|
Core
Fixed Income |
36,919 |
|
16,042 |
(1) |
14,879 |
|
Core
Plus Bond |
3,450 |
|
15,494 |
|
16,470 |
|
Diversified
International |
89,822 |
|
92,912 |
|
100,063 |
|
Equity
Income |
38,888 |
|
36,623 |
|
34,621 |
|
Finisterre
Emerging Markets Total Return Bond |
1,742 |
(2) |
1,004 |
|
297 |
|
Global
Diversified Income |
45,991 |
|
55,947 |
|
84,958 |
|
Global
Real Estate Securities |
25,893 |
|
29,700 |
|
24,302 |
|
Government
& High Quality Bond |
8,297 |
|
7,512 |
|
7,544 |
|
Government
Money Market |
5,474 |
|
4,714 |
|
4,323 |
(3) |
High
Income |
18,032 |
|
20,720 |
(4) |
8,635 |
|
High
Yield |
14,861 |
|
14,617 |
|
16,867 |
|
Inflation
Protection |
6,413 |
|
6,102 |
|
5,924 |
|
International
Emerging Markets |
3,113 |
|
6,956 |
|
11,286 |
|
International
I |
2,562 |
|
3,173 |
|
4,264 |
|
LargeCap
Growth I |
64,062 |
|
51,967 |
|
50,789 |
|
LargeCap
S&P 500 Index |
8,950 |
|
8,578 |
|
8,399 |
|
LargeCap
Value III |
15,252 |
|
16,084 |
|
16,917 |
|
MidCap |
104,065 |
|
91,161 |
|
92,492 |
|
MidCap
Growth |
1,109 |
|
1,144 |
|
1,205 |
|
MidCap
Growth III |
9,880 |
|
10,372 |
|
10,891 |
|
MidCap
S&P 400 Index |
1,619 |
|
1,972 |
|
2,140 |
|
MidCap
Value I |
14,640 |
|
12,785 |
|
9,864 |
|
Money
Market |
2,634 |
|
2,035 |
|
1,927 |
|
Overseas |
24,669 |
|
29,657 |
|
35,777 |
|
Principal
Capital Appreciation |
8,454 |
|
8,447 |
|
9,307 |
|
Real
Estate Securities |
38,244 |
|
34,712 |
|
29,328 |
|
SAM
Balanced |
12,100 |
|
12,374 |
|
13,053 |
|
SAM
Conservative Balanced |
4,606 |
|
4,637 |
|
4,827 |
|
SAM
Conservative Growth |
8,045 |
|
8,245 |
|
8,746 |
|
SAM
Flexible Income |
7,443 |
|
7,229 |
|
7,363 |
|
SAM
Strategic Growth |
5,015 |
|
5,069 |
|
5,398 |
|
Short-Term
Income |
22,102 |
|
19,743 |
|
17,959 |
|
SmallCap |
4,750 |
|
4,880 |
|
4,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management
Fees for Periods Ended October 31 (amounts in thousands) |
Fund |
2020 |
|
2019 |
|
2018 |
|
SmallCap
Growth I |
17,309 |
|
19,383 |
|
18,832 |
|
SmallCap
S&P 600 Index |
1,671 |
|
1,926 |
|
2,036 |
|
SmallCap
Value II |
8,425 |
|
10,223 |
|
11,808 |
|
Tax-Exempt
Bond |
2,752 |
|
2,018 |
|
1,596 |
|
|
|
|
(1)
Effective December 30, 2019, Income Fund changed its name to Core Fixed
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)
Period from December 20, 2017, date operations commenced, through October
31, 2018. |
(4)
Effective July 1, 2019, High Yield Fund I changed its name to High Income
Fund. |
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 |
2020 |
|
2019 |
|
2018 |
|
Core
Plus Bond |
$379 |
|
$1,835 |
|
$1,963 |
|
Diversified
International |
4,122 |
|
9,641 |
|
— |
|
Finisterre
Emerging Markets Total Return Bond |
— |
(1) |
15 |
|
— |
|
Global
Diversified Income |
5,056 |
|
5,249 |
|
1,189 |
|
Government
Money Market |
304 |
|
310 |
|
323 |
(2) |
High
Income |
442 |
|
158 |
(3) |
— |
|
International
Emerging Markets |
162 |
|
684 |
|
— |
|
International
I |
178 |
|
439 |
|
— |
|
LargeCap
Growth I |
1,714 |
|
1,387 |
|
1,352 |
|
LargeCap
Value III |
1,285 |
|
1,348 |
|
1,365 |
|
MidCap
Growth III |
333 |
|
851 |
|
893 |
|
MidCap
Value I |
452 |
|
765 |
|
1,196 |
|
Overseas |
1,035 |
|
1,814 |
|
2,198 |
|
SmallCap
Growth I |
620 |
|
1,664 |
|
1,611 |
|
SmallCap
Value II |
291 |
|
417 |
|
459 |
|
|
|
|
(1)
Effective February 1, 2021, Finisterre Unconstrained Emerging Markets Bond
Fund changed its name to Finisterre Emerging Markets Total Return Bond
Fund. |
(2)
Period from December 20, 2017, date operations commenced, through October
31, 2018. |
(3)
Effective July 1, 2019, High Yield Fund I changed its name to High Income
Fund. |
Expense
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 |
2020 |
|
2019 |
|
2018 |
|
California
Municipal |
$55 |
|
$59 |
|
$46 |
|
Core
Fixed Income |
— |
|
91 |
(1) |
43 |
|
Core
Plus Bond |
263 |
|
110 |
|
81 |
|
Diversified
International |
24 |
|
28 |
|
19 |
|
Equity
Income |
1,317 |
|
709 |
|
423 |
|
Finisterre
Emerging Markets Total Return Bond |
195 |
(2) |
89 |
|
75 |
|
Global
Diversified Income |
2,934 |
|
3,714 |
|
3,528 |
|
Global
Real Estate Securities |
1,550 |
|
3,410 |
|
2,582 |
|
Government
& High Quality Bond |
225 |
|
273 |
|
93 |
|
Government
Money Market |
993 |
|
177 |
|
141 |
(3) |
High
Income |
32 |
|
33 |
(4) |
27 |
|
High
Yield |
356 |
|
704 |
|
168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
Reimbursed for Periods Ended October 31 (amounts in
thousands) |
Fund |
2020 |
|
2019 |
|
2018 |
|
Inflation
Protection |
13 |
|
38 |
|
38 |
|
International
Emerging Markets |
408 |
|
561 |
|
472 |
|
International
I |
57 |
|
146 |
|
163 |
|
LargeCap
Growth I |
— |
|
— |
|
148 |
|
LargeCap
S&P 500 Index |
— |
|
16 |
|
7 |
|
MidCap
Growth |
18 |
|
31 |
|
13 |
|
MidCap
Value I |
166 |
|
92 |
|
— |
|
Money
Market |
861 |
|
247 |
|
257 |
|
Principal
Capital Appreciation |
288 |
|
305 |
|
204 |
|
Principal
LifeTime Strategic Income |
24 |
|
25 |
|
21 |
|
Principal
LifeTime 2010 |
11 |
|
17 |
|
15 |
|
Principal
LifeTime 2020 |
— |
|
— |
|
2 |
|
Principal
LifeTime 2030 |
— |
|
22 |
|
31 |
|
Principal
LifeTime 2040 |
17 |
|
47 |
|
40 |
|
Principal
LifeTime 2050 |
57 |
|
83 |
|
78 |
|
Principal
LifeTime 2060 |
19 |
|
22 |
|
15 |
|
Principal
LifeTime 2065 |
21 |
|
31 |
|
30 |
|
Principal
LifeTime Hybrid Income |
53 |
|
70 |
|
72 |
|
Principal
LifeTime Hybrid 2015 |
34 |
|
54 |
|
65 |
|
Principal
LifeTime Hybrid 2020 |
15 |
|
10 |
|
49 |
|
Principal
LifeTime Hybrid 2025 |
17 |
|
29 |
|
49 |
|
Principal
LifeTime Hybrid 2030 |
11 |
|
22 |
|
40 |
|
Principal
LifeTime Hybrid 2035 |
25 |
|
49 |
|
58 |
|
Principal
LifeTime Hybrid 2040 |
21 |
|
40 |
|
56 |
|
Principal
LifeTime Hybrid 2045 |
37 |
|
66 |
|
66 |
|
Principal
LifeTime Hybrid 2050 |
48 |
|
66 |
|
66 |
|
Principal
LifeTime Hybrid 2055 |
71 |
|
83 |
|
75 |
|
Principal
LifeTime Hybrid 2060 |
79 |
|
86 |
|
79 |
|
Principal
LifeTime Hybrid 2065 |
83 |
|
84 |
|
79 |
|
Real
Estate Securities |
273 |
|
428 |
|
76 |
|
SAM
Conservative Balanced |
— |
|
18 |
|
60 |
|
SAM
Flexible Income |
— |
|
51 |
|
8 |
|
SAM
Strategic Growth |
— |
|
— |
|
11 |
|
Short-Term
Income |
177 |
|
102 |
|
24 |
|
SmallCap |
33 |
|
57 |
|
52 |
|
SmallCap
Growth I |
46 |
|
124 |
|
65 |
|
SmallCap
Value II |
172 |
|
124 |
|
87 |
|
Tax-Exempt
Bond |
92 |
|
97 |
|
51 |
|
|
|
|
(1)
Effective December 30, 2019, Income Fund changed its name to Core Fixed
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)
Period from December 20, 2017, date operations commenced, through October
31, 2018. |
(4)
Effective July 1, 2019, High Yield Fund I changed its name to High Income
Fund. |
Sub-Advisory
Agreements for the Funds
PGI
(and not the Fund) 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) |
|
2020 |
2019 |
2018 |
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 |
Global
Diversified Income |
$5,463 |
0.33% |
$10,249 |
0.34% |
$20,886 |
0.35% |
High
Income |
4,285 |
0.24 |
8,158 |
0.26 |
3,670 |
0.27 |
Inflation
Protection |
1,258 |
0.07 |
1,292 |
0.08 |
1,251 |
0.08 |
LargeCap
Growth I |
21,933 |
0.23 |
19,166 |
0.25 |
19,055 |
0.26 |
LargeCap
Value III |
3,543 |
0.21 |
3,802 |
0.21 |
3,812 |
0.21 |
MidCap
Growth III |
3,579 |
0.37 |
3,528 |
0.38 |
3,503 |
0.37 |
MidCap
Value I |
5,594 |
0.28 |
4,469 |
0.29 |
2,709 |
0.30 |
Overseas |
7,938 |
0.36 |
9,061 |
0.36 |
10,438 |
0.35 |
SmallCap
Growth I |
7,828 |
0.43 |
7,674 |
0.46 |
7,203 |
0.46 |
SmallCap
Value II |
3,177 |
0.41 |
3,801 |
0.40 |
4,332 |
0.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees
Paid to Origin and Post for Fiscal Years Ended October 31 (dollar
amounts in thousands) |
|
2020 |
2019 |
2018 |
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 |
International
I (Origin) |
$1,115 |
0.35% |
$1,253 |
0.36% |
$1,670 |
0.35% |
High
Income (Post) |
3,283 |
0.28 |
912 |
0.28 |
— |
— |
Global
Diversified Income (Post) |
2,919 |
0.29 |
3,178 |
0.30 |
1,871 |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
Fees for Periods Ended October 31, (amounts in thousands) |
Fund |
2020 |
|
2019 |
|
2018 |
|
California
Municipal |
$ |
197 |
|
|
$ |
41 |
|
|
$ |
49 |
|
|
Core
Fixed Income |
122 |
|
|
67 |
|
(1) |
104 |
|
|
Core
Plus Bond |
75 |
|
|
38 |
|
|
35 |
|
|
Diversified
International |
87 |
|
|
91 |
|
|
147 |
|
|
Equity
Income |
344 |
|
|
347 |
|
|
270 |
|
|
Finisterre
Emerging Markets Total Return Bond |
3 |
|
(2) |
— |
|
|
2 |
|
|
Global
Diversified Income |
266 |
|
|
317 |
|
|
679 |
|
|
Global
Real Estate Securities |
30 |
|
|
41 |
|
|
41 |
|
|
Government
& High Quality Bond |
95 |
|
|
64 |
|
|
84 |
|
|
High
Income |
6 |
|
|
9 |
|
(3) |
10 |
|
|
High
Yield |
84 |
|
|
82 |
|
|
111 |
|
|
Inflation
Protection |
8 |
|
|
3 |
|
|
4 |
|
|
International
Emerging Markets |
50 |
|
|
63 |
|
|
111 |
|
|
International
I |
16 |
|
|
41 |
|
|
36 |
|
|
LargeCap
Growth I |
184 |
|
|
93 |
|
|
83 |
|
|
LargeCap
S&P 500 Index |
260 |
|
|
272 |
|
|
268 |
|
|
LargeCap
Value III |
1 |
|
|
— |
|
|
1 |
|
|
MidCap |
285 |
|
|
212 |
|
|
236 |
|
|
MidCap
Growth |
4 |
|
|
2 |
|
|
3 |
|
|
MidCap
Growth III |
1 |
|
|
1 |
|
|
1 |
|
|
MidCap
S&P 400 Index |
10 |
|
|
6 |
|
|
8 |
|
|
MidCap
Value I |
61 |
|
|
32 |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
Fees for Periods Ended October 31, (amounts in thousands) |
Fund |
2020 |
|
2019 |
|
2018 |
|
Money
Market |
76 |
|
|
50 |
|
|
49 |
|
|
Principal
Capital Appreciation |
159 |
|
|
193 |
|
|
236 |
|
|
Principal
Lifetime Strategic Income |
13 |
|
|
9 |
|
|
19 |
|
|
Principal
LifeTime 2010 |
15 |
|
|
14 |
|
|
29 |
|
|
Principal
LifeTime 2020 |
99 |
|
|
166 |
|
|
178 |
|
|
Principal
LifeTime 2030 |
253 |
|
|
287 |
|
|
351 |
|
|
Principal
LifeTime 2040 |
240 |
|
|
265 |
|
|
284 |
|
|
Principal
LifeTime 2050 |
271 |
|
|
280 |
|
|
275 |
|
|
Principal
LifeTime 2060 |
2 |
|
|
2 |
|
|
2 |
|
|
Principal
LifeTime Hybrid Income |
— |
|
|
1 |
|
|
— |
|
|
Principal
LifeTime Hybrid 2015 |
9 |
|
|
3 |
|
|
— |
|
|
Principal
LifeTime Hybrid 2020 |
26 |
|
|
41 |
|
|
2 |
|
|
Principal
LifeTime Hybrid 2025 |
34 |
|
|
28 |
|
|
6 |
|
|
Principal
LifeTime Hybrid 2030 |
23 |
|
|
20 |
|
|
2 |
|
|
Principal
LifeTime Hybrid 2035 |
36 |
|
|
14 |
|
|
3 |
|
|
Principal
LifeTime Hybrid 2040 |
31 |
|
|
19 |
|
|
— |
|
|
Principal
LifeTime Hybrid 2045 |
21 |
|
|
10 |
|
|
1 |
|
|
Principal
LifeTime Hybrid 2050 |
12 |
|
|
4 |
|
|
1 |
|
|
Principal
LifeTime Hybrid 2055 |
4 |
|
|
3 |
|
|
— |
|
|
Real
Estate Securities |
124 |
|
|
135 |
|
|
138 |
|
|
SAM
Balanced |
936 |
|
|
1,026 |
|
|
1,285 |
|
|
SAM
Conservative Balanced |
434 |
|
|
525 |
|
|
521 |
|
|
SAM
Conservative Growth |
724 |
|
|
903 |
|
|
989 |
|
|
SAM
Flexible Income |
637 |
|
|
785 |
|
|
1,116 |
|
|
SAM
Strategic Growth |
660 |
|
|
682 |
|
|
747 |
|
|
Short-Term
Income |
280 |
|
|
185 |
|
|
306 |
|
|
SmallCap |
98 |
|
|
138 |
|
|
186 |
|
|
SmallCap
Growth I |
4 |
|
|
2 |
|
|
2 |
|
|
SmallCap
S&P 600 Index |
3 |
|
|
5 |
|
|
6 |
|
|
SmallCap
Value II |
11 |
|
13 |
|
27 |
|
Tax-Exempt
Bond |
82 |
|
59 |
|
92 |
|
|
|
|
(1)
Effective December 30, 2019, Income Fund changed its name to Core Fixed
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 July 1, 2019, High Yield Fund I changed its name to High Income
Fund. |
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.
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' most recently ended
fiscal year 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 |
$ |
45,908 |
|
$ |
4,690 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
(997) |
|
$ |
— |
|
$ |
3,693 |
|
$ |
42,215 |
|
Core
Plus Bond |
15,335 |
|
1,951 |
|
— |
|
— |
|
— |
|
(4,185) |
|
— |
|
(2,234) |
|
17,569 |
|
Diversified
International |
369,404 |
|
141,107 |
|
— |
|
— |
|
— |
|
(1,041,674) |
|
— |
|
(900,567) |
|
1,269,972 |
|
Equity
Income |
207,313 |
|
35,949 |
|
— |
|
— |
|
— |
|
(152,190) |
|
— |
|
(116,241) |
|
323,554 |
|
Finisterre
Emerging Markets Total Return Bond |
4,555 |
|
391 |
|
— |
|
— |
|
— |
|
642 |
|
— |
|
1,033 |
|
3,522 |
|
Global
Diversified Income |
480,144 |
|
79,363 |
|
— |
|
— |
|
— |
|
(313,617) |
|
— |
|
(234,254) |
|
714,397 |
|
Global
Real Estate Securities |
20,896 |
|
11,805 |
|
— |
|
— |
|
— |
|
(97,154) |
|
— |
|
(85,349) |
|
106,245 |
|
Government
& High Quality Bond |
23,723 |
|
841 |
|
— |
|
— |
|
— |
|
15,316 |
|
— |
|
16,156 |
|
7,567 |
|
High
Income |
49,413 |
|
20,865 |
|
— |
|
— |
|
— |
|
(159,333) |
|
— |
|
(138,458) |
|
187,871 |
|
High
Yield |
144,709 |
|
11,843 |
|
— |
|
— |
|
— |
|
26,254 |
|
— |
|
38,097 |
|
106,612 |
|
Inflation
Protection |
11,804 |
|
414 |
|
— |
|
— |
|
— |
|
7,659 |
|
— |
|
8,073 |
|
3,730 |
|
International
Emerging Markets |
718 |
|
142 |
|
— |
|
— |
|
— |
|
(702) |
|
— |
|
(560) |
|
1,278 |
|
International
I |
5,936 |
|
889 |
|
— |
|
— |
|
— |
|
(2,957) |
|
— |
|
(2,068) |
|
8,004 |
|
LargeCap
Growth I |
89,600 |
|
25,369 |
|
— |
|
— |
|
— |
|
(164,134) |
|
— |
|
(138,765) |
|
228,365 |
|
LargeCap
S&P 500 Index |
15,069 |
|
9,633 |
|
— |
|
— |
|
— |
|
(81,279) |
|
— |
|
(71,645) |
|
86,714 |
|
LargeCap
Value III |
4,298 |
|
2,066 |
|
— |
|
— |
|
— |
|
(16,394) |
|
— |
|
(14,328) |
|
18,626 |
|
MidCap
|
560,960 |
|
71,752 |
|
— |
|
— |
|
— |
|
(156,595) |
|
— |
|
(84,843) |
|
645,803 |
|
MidCap
Growth |
2,519 |
|
76 |
|
— |
|
— |
|
— |
|
1,760 |
|
— |
|
1,836 |
|
683 |
|
MidCap
Growth III |
35,933 |
|
4,405 |
|
— |
|
— |
|
— |
|
(8,149) |
|
— |
|
(3,745) |
|
39,677 |
|
MidCap
S&P 400 Index |
49,011 |
|
11,190 |
|
— |
|
— |
|
— |
|
(62,926) |
|
— |
|
(51,736) |
|
100,747 |
|
MidCap
Value I |
10,382 |
|
3,542 |
|
— |
|
— |
|
— |
|
(25,077) |
|
— |
|
(21,535) |
|
31,917 |
|
Overseas
|
103,945 |
|
49,225 |
|
— |
|
— |
|
— |
|
(388,307) |
|
— |
|
(339,082) |
|
443,027 |
|
Principal
Capital Appreciation |
34,453 |
|
951 |
|
— |
|
— |
|
— |
|
24,937 |
|
— |
|
25,889 |
|
8,565 |
|
Short-Term
Income |
31,695 |
|
3,019 |
|
— |
|
— |
|
— |
|
1,499 |
|
— |
|
4,518 |
|
27,177 |
|
SmallCap
|
95,076 |
|
45,279 |
|
— |
|
— |
|
— |
|
(357,766) |
|
— |
|
(312,487) |
|
407,563 |
|
SmallCap
Growth I |
292,050 |
|
136,575 |
|
— |
|
— |
|
— |
|
(1,074,167) |
|
— |
|
(937,592) |
|
1,229,642 |
|
SmallCap
S&P 600 Index |
143,725 |
|
103,041 |
|
— |
|
— |
|
— |
|
(886,804) |
|
— |
|
(783,764) |
|
927,489 |
|
SmallCap
Value II |
73,255 |
|
32,237 |
|
— |
|
— |
|
— |
|
(249,401) |
|
— |
|
(217,164) |
|
290,419 |
|
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.
INTERMEDIARY
COMPENSATION
Additional
Payments to Intermediaries.
Shares
of the Fund 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 Fund will reimburse PGI or
its affiliates for making such payments; in others the Fund makes 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 Service 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 Fund,
compensation from their own resources, to certain intermediaries that support
the distribution of shares of the Fund or provide services to Fund shareholders.
In addition, PGI or its affiliates pay, without reimbursement from the Fund,
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 Service 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 the Fund over
another investment, or to recommend one share class of the 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, 2020, 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:
|
|
|
|
|
|
|
|
|
Advisor
Group |
FSC
Securities Corporation |
Putnam
Investors Services |
Advisory
Services Network, LLC |
Goldman
Sachs & Co. |
Raymond
James & Associates, Inc. |
Alight
Financial Solutions LLC |
Great
West Life & Annuity |
Raymond
James Financial Services, Inc. |
American
Century Investments |
GWFS
Equities, Inc. |
RBC
Capital Markets Corp. |
American
Enterprise Investment Services Inc. |
H.
Beck, Inc. |
RBC
Correspondent Services |
American
General Life Insurance Co. |
HighTower
Securities, LLC |
Reliance
Trust Company |
American
United Life Insurance Co. |
ICMA-Retirement
Corp. |
Retirement
Clearinghouse |
Ameriprise
Financial Services |
Investacorp
Inc. |
Robert
W. Baird & Co. |
Ameritas
Investments Corp |
Janney
Montgomery Scott |
Rowling
& Associates Accountancy Corporation |
Ascensus |
John
Hancock Trust Co. |
Royal
Alliance Associates, Inc. |
Ascensus
College Savings Record Keeping Services, LLC |
Kestra
Investment Services, LLC |
SagePoint
Financial, Inc. |
AXA
Advisors, LLC |
KMS
Financial Services, Inc. |
SBC
Wealth Management |
AXA
Equitable Life Insurance Co. |
Lara
May & Associates LLC |
Securities
America, Inc. |
Baird |
Legacy
Consulting Group |
Securities
Service Network, Inc. |
Benefit
Plan Administrators |
Lincoln
Retirement Services Co. |
Sierra
Asset Management |
Benefit
Solutions |
LLBH
Private Wealth Management LLC |
Standard
Insurance Company |
Benefit
Trust Company |
LPL
Financial Corporation |
Standard
Retirement Services |
BNY
Mellon NA |
Massachusetts
Mutual Life Insurance Company |
Stifel
Nicolaus & Company, Inc. |
Broadridge
Business Process Outsourcing, LLC |
McDonald
Partners, LLC |
Suntrust
Investment Services, Inc. |
Cadaret,
Grant & Company, Inc. |
Mercer
HR Services |
T.
Rowe Price Retirement Plan Services |
Caitlin
John LLC |
Merrill
Lynch |
TD
Ameritrade Inc. |
Cambridge
Investment Research Inc. |
MidAtlantic
Capital Corporation |
TD
Ameritrade Trust Company |
Cetera
Advisor Networks LLC |
Minnesota
Life Insurance Company |
The
Prudential Insurance Company of America |
Charles
Schwab Trust Company |
MML
Investors Services Inc. |
Thrivent
Financial for Lutherans |
Citi
International Financial Services LLC |
Morgan
Stanley Smith Barney LLC |
TIAA-CREF |
Citibank
N.A. Sucursal Uruguay |
National
Financial Services LLC |
Total
Administrative Services Corporation |
Citigroup
Global Markets Inc. |
Newport
Group Retirement Plan Services |
Triad
Advisors, Inc. |
Columbia
Management Investment Advisers, LLC |
Next
Financial Group |
UBS
Financial Services, Inc. |
Commonwealth
Financial Network |
Northwestern
Mutual Investment Services |
US
Bancorp Investments |
Concentrum
Wealth Management, LLC |
NYLIFE
Securities, LLC |
VALIC
Retirement Services Company |
Concert
Wealth Management Inc. |
Oppenheimer
& Co. |
Vanguard
Brokerage Services |
Concord
Wealth Partners |
Pensionmark
Securities LLC |
Vanguard
Group, The |
Corient
Capital Partners LLC |
Pershing
LLC |
Voya
Financial Advisors, Inc. |
CPI
Qualified Consultants |
Plan
Administrators, Inc. |
Voya
Institutional Plan Services, LLC |
David
A Noyes & Co. |
Platinum
Wealth Partners, Inc. |
Voya
Institutional Trust Co. |
Digital
Retirement Solutions |
Plan
Administrators, Inc. |
Wave
Wealth Management, LLC |
EFG
Capital International Corp |
Principal
Life Insurance Company |
Wells
Fargo Advisors FINET, LLC |
ePlan
Services, Inc. |
Principal
Securities, Inc. |
Wells
Fargo Bank, N.A. |
ETRADE
Savings Bank |
Principal
Wealth Partners LLC |
Wells
Fargo Clearing Services LLC |
Fidelity
Investment Institutional Operations Co. |
Private
Client Services, LLC |
Western
International Securities, Inc. |
Financial
Data Services LLC |
Prudential
Retirement Services |
Woodbury
Financial Services |
First
Republic Securities Co., LLC |
Purshe
Kaplan Sterling Investments |
|
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 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 the
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 the
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, 2020 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 |
$4,027,061,441 |
$2,397,404 |
Equity
Income |
1,586,613,542 |
781,646 |
Global
Diversified Income |
547,235,564 |
438,050 |
Global
Real Estate Securities |
1,009,678,043 |
634,156 |
International
Emerging Markets |
64,095,120 |
38,183 |
International
I |
491,750,023 |
152,216 |
LargeCap
Growth I |
955,835,187 |
238,011 |
LargeCap
S&P 500 Index |
73,893,888 |
16,405 |
LargeCap
Value III |
1,476,077,098 |
705,068 |
MidCap |
3,512,924,956 |
1,204,678 |
MidCap
Growth |
89,300,512 |
78,404 |
MidCap
Growth III |
496,510,051 |
165,284 |
MidCap
S&P 400 Index |
26,330,700 |
18,244 |
MidCap
Value I |
2,267,950,745 |
910,073 |
Overseas
|
1,424,969,263 |
1,320,544 |
Principal
Capital Appreciation |
828,060,535 |
274,150 |
Real
Estate Securities |
1,785,009,118 |
1,176,803 |
|
|
|
|
|
|
|
|
|
Fund |
Amount
of
Transactions
because
of
Research
Services
Provided |
Related
Commissions Paid |
SmallCap |
165,447,224 |
217,762 |
SmallCap
Growth I |
980,772,479 |
455,727 |
SmallCap
S&P 600 Index |
23,667,609 |
37,614 |
SmallCap
Value II |
595,124,826 |
1,083,496 |
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 a Manager affiliate in connection with
such underwritings. In addition, for underwritings where a Sub-Advisor affiliate
or a Manager participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities that the
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 receives 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 the 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
receives quarterly reports of all such 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 receives quarterly reports of all transactions
completed pursuant to the Fund's procedures.
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 the 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 |
2020 |
|
2019 |
|
2018 |
|
California
Municipal Fund |
$ |
3,290 |
|
|
$ |
6,088 |
|
|
$ |
1,010 |
|
|
Core
Fixed Income Fund |
— |
|
|
1,378 |
|
|
42,976 |
|
|
Core
Plus Bond |
16,172 |
|
|
28,375 |
|
|
2,634 |
|
|
Diversified
International |
8,382,170 |
|
|
10,964,605 |
|
|
11,284,826 |
|
|
Equity
Income |
1,334,450 |
|
|
1,684,442 |
|
|
856,826 |
|
|
Global
Diversified Income |
1,492,047 |
|
|
2,033,406 |
|
(1) |
8,091,363 |
|
(1) |
Global
Real Estate Securities |
1,766,085 |
|
|
2,224,162 |
|
|
2,199,177 |
|
|
High
Income |
1,888 |
|
|
2,625 |
|
|
11,083 |
|
|
High
Yield |
47,036 |
|
|
6,208 |
|
|
20,467 |
|
|
Inflation
Protection |
4,106 |
|
|
7,443 |
|
(1) |
4,928 |
|
(1) |
International
Emerging Markets |
314,253 |
|
|
2,748,447 |
|
|
3,621,567 |
|
|
International
I |
152,478 |
|
|
203,032 |
|
|
242,427 |
|
|
LargeCap
Growth I |
1,319,454 |
|
|
1,180,004 |
|
|
1,412,463 |
|
|
LargeCap
S&P 500 Index |
153,014 |
|
|
29,646 |
|
|
163,213 |
|
|
LargeCap
Value III |
881,284 |
|
|
741,357 |
|
|
767,568 |
|
|
MidCap |
2,183,860 |
|
|
3,181,548 |
|
|
7,772,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Brokerage Commissions Paid
For
Periods Ended October 31 |
MidCap
Growth |
234,942 |
|
|
215,909 |
|
|
264,644 |
|
|
MidCap
Growth III |
320,801 |
|
|
377,887 |
|
|
425,677 |
|
|
MidCap
S&P 400 Index |
121,143 |
|
|
70,217 |
|
|
58,460 |
|
|
MidCap
Value I |
1,126,888 |
|
|
815,770 |
|
|
566,541 |
|
|
Overseas |
2,280,378 |
|
|
1,796,336 |
|
|
2,227,686 |
|
|
Principal
Capital Appreciation |
521,687 |
|
|
856,827 |
|
|
779,776 |
|
|
Real
Estate Securities |
2,473,748 |
|
|
1,417,735 |
|
|
1,750,752 |
|
|
SAM
Balanced Portfolio |
77,184 |
|
|
110,984 |
|
|
113,929 |
|
|
SAM
Conservative Balanced Portfolio |
14,242 |
|
|
63,891 |
|
|
28,038 |
|
|
SAM
Conservative Growth Portfolio |
37,530 |
|
|
167,250 |
|
|
97,284 |
|
|
SAM
Flexible Income Portfolio |
162,488 |
|
|
110,368 |
|
|
41,608 |
|
|
SAM
Strategic Growth Portfolio |
61,420 |
|
|
346,583 |
|
|
56,995 |
|
|
Short-Term
Income |
— |
|
|
— |
|
|
85,374 |
|
|
SmallCap |
538,900 |
|
|
373,121 |
|
|
613,034 |
|
|
SmallCap
Growth I |
1,218,085 |
|
|
1,214,616 |
|
|
1,296,379 |
|
|
SmallCap
S&P 600 Index |
167,498 |
|
|
24,974
|
|
68,788
|
|
SmallCap
Value II |
1,362,063 |
|
|
1,212,061
|
|
1,153,648
|
|
Tax-Exempt
Bond |
3,300 |
|
|
6,439
|
|
— |
|
|
(1)
Previous
amounts have been restated using the methodology used for reporting similar data
in Form N-CEN, which results in higher amounts than previously
stated.
Primary
reasons for changes in brokerage commissions for those Funds with relatively
greater variations for the three years were:
•for
the LargeCap S&P 500 Index, MidCap S&P 400 Index, MidCap Value I, Real
Estate Securities, and SmallCap S&P 600 Index Funds: changes in trading
volumes, with higher volumes resulting in higher commissions, and changes in the
allocation and payment of research costs in response to the adoption of the
Markets in Financial Instruments Directive (MiFID II); and
•for
the High Yield Fund and the SAM Flexible Income Portfolio: increased trading in
exchange-traded funds, with such increases resulting in higher
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 |
2020
Fund's Total Commissions Paid |
%
of Fund's Total Commissions |
%
of Dollar Amount of
Fund's Commissionable Transactions |
Global
Diversified Income |
|
Principal
Financial Group |
SAMI
Brokerage LLC |
38,686 |
|
2.59 |
% |
1.26 |
% |
Total |
$ |
38,686 |
|
2.59 |
% |
1.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
Sub-Advisor
Employed by the Fund Complex |
Affiliated
Broker Receiving Commissions |
2019
Fund's Total Commissions Paid |
%
of Fund's Total Commissions |
%
of Dollar Amount of
Fund's Commissionable Transactions |
Global
Diversified Income(1) |
|
Principal
Financial Group |
SAMI
Brokerage LLC |
5,645 |
|
0.28 |
% |
0.18 |
% |
Total |
$ |
5,645 |
|
0.28 |
% |
0.18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
Sub-Advisor
Employed by the Fund Complex |
Affiliated
Broker Receiving Commissions |
2018
Fund's Total Commissions Paid |
%
of Fund's Total Commissions |
%
of Dollar Amount of
Fund's Commissionable Transactions |
Global
Diversified Income(1) |
|
Columbus
Circle Investors Finisterre Capital LLP Origin Asset Management
LLP Post Advisory Group, LLC Principal Global Investors,
LLC Principal Real Estate Investors, LLC Spectrum Asset Management,
Inc. |
SAMI
Brokerage LLC |
5,676 |
|
0.07 |
% |
0.05 |
% |
Total |
$ |
5,676 |
|
0.07 |
% |
0.05 |
% |
(1)
Previous
amounts have been restated using the methodology used for reporting similar data
in Form N-CEN, which results in higher amounts than previously
stated.
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 of the
securities of its regular brokers or dealers for the fiscal year ended October
31, 2020.
|
|
|
|
|
|
|
|
|
Holdings
of Securities of Principal Funds, Inc. Regular Brokers and
Dealers |
Fund |
Broker
or Dealer |
Holdings
(in
thousands) |
Core
Fixed Income Fund |
Citigroup
Inc |
$ |
103,595 |
|
|
Goldman
Sachs Group Inc/The |
85,724 |
|
Jefferies
Group LLC |
46,466 |
|
JPMorgan
Chase & Co |
85,824 |
|
Morgan
Stanley |
91,093 |
|
Wells
Fargo & Co |
84,296 |
Core
Plus Bond Fund |
Barclays
PLC |
1,716 |
|
Citigroup
Inc |
4,191 |
|
Credit
Suisse Group AG |
6,882 |
|
Goldman
Sachs Group Inc/The |
2,415 |
|
HSBC
Holdings PLC |
2,569 |
|
JPMorgan
Chase & Co |
2,571 |
|
Morgan
Stanley |
6,327 |
|
UBS
Group AG |
2,300 |
|
Wells
Fargo & Co |
2,497 |
|
|
|
|
|
|
|
|
|
Holdings
of Securities of Principal Funds, Inc. Regular Brokers and
Dealers |
Fund |
Broker
or Dealer |
Holdings
(in
thousands) |
Equity
Income Fund |
JPMorgan
Chase & Co |
191,550 |
|
Morgan
Stanley |
90,788 |
Global
Diversified Income Fund |
Barclays
PLC |
19,494 |
|
Citigroup
Inc |
12,543 |
|
Credit
Suisse Group AG |
22,229 |
|
Goldman
Sachs Group Inc/The |
21,258 |
|
HSBC
Holdings PLC |
2,021 |
|
JPMorgan
Chase & Co |
19,123 |
|
Morgan
Stanley |
5,563 |
|
UBS
Group AG |
3,308 |
|
Wells
Fargo & Co |
15,277 |
High
Income Fund |
Morgan
Stanley |
319 |
High
Yield Fund |
Barclays
PLC |
20,548 |
|
Citigroup
Inc |
9,943 |
|
JPMorgan
Chase & Co |
21,697 |
LargeCap
Growth Fund I |
Goldman
Sachs Group Inc/The |
24,000 |
LargeCap
S&P 500 Index Fund |
Citigroup
Inc |
18,055 |
|
Goldman
Sachs Group Inc/The |
13,619 |
|
JPMorgan
Chase & Co |
62,561 |
|
Morgan
Stanley |
14,407 |
|
Wells
Fargo & Co |
18,504 |
LargeCap
Value Fund III |
Citigroup
Inc |
10,545 |
|
Goldman
Sachs Group Inc/The |
19,525 |
|
Jefferies
Group LLC |
85 |
|
JPMorgan
Chase & Co |
49,143 |
|
Morgan
Stanley |
1,237 |
|
Wells
Fargo & Co |
15,261 |
MidCap
S&P 400 Index Fund |
Jefferies
Group LLC |
2,455 |
MidCap
Value Fund I |
Jefferies
Group LLC |
198 |
Money
Market Fund |
Barclays
PLC |
16,998 |
|
Citigroup
Inc |
8,999 |
|
HSBC
Holdings PLC |
3,999 |
Overseas
Fund |
Barclays
PLC |
28,283 |
|
Credit
Suisse Group AG |
648 |
|
HSBC
Holdings PLC |
27,007 |
|
Nomura
Holdings Inc |
613 |
|
UBS
Group AG |
1,858 |
Principal
Capital Appreciation Fund |
JPMorgan
Chase & Co |
38,206 |
Short-Term
Income Fund |
Citigroup
Inc |
96,394 |
|
Credit
Suisse Group AG |
34,511 |
|
Goldman
Sachs Group Inc/The |
55,068 |
|
HSBC
Holdings PLC |
20,230 |
|
JPMorgan
Chase & Co |
74,904 |
|
Morgan
Stanley |
80,968 |
|
UBS
Group AG |
30,918 |
|
Wells
Fargo & Co |
75,510 |
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 as discretionary
advisor for funds of funds as well as some of the 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 the Manager’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 Fund's 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 the 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 New York Stock Exchange on June 14, 2013, and
for employer-sponsored retirement plan investors, effective as of the close of
the New York Stock Exchange 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 New York Stock Exchange 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
For
retirement plan investors, effective as of the close of the New York Stock
Exchange on January 31, 2017, Class R-1 shares are no longer available for
purchase from new retirement plans except in limited circumstances. However, if
a retirement plan currently offers Class R-1, such plans will be allowed to
continue to invest in that share class through Funds they currently offer in
their plans or Funds they add to their 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 |
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 and
Redemption Gates*
•
If a shareholder submits a redemption order while a
redemption gate is in effect, the redemption order is invalid and a shareholder
must submit a new redemption order after the gate is lifted.
•
If the Money Market Fund received, but has not yet
processed, a purchase order prior to notifying investors of the imposition of
liquidity fees or redemption gates, 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, since 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 or redemption gate is imposed
but is received by the Money Market Fund after a liquidity fee or redemption
gate is imposed, the fund will pay the proceeds of the redemption request
despite the gate and will not impose a liquidity fee on the redemption
request.
•
A checkwriting redemption request which is verifiably
submitted to the Money Market Fund’s agent before a liquidity fee or redemption
gate 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 and Temporary Suspensions of Fund Redemptions
Since
October 14, 2016, there has not been any occasion on which the Money Market Fund
has: (i) invested less than ten percent, and/or (ii) invested less than thirty
percent, but more than ten percent, of its total assets in weekly liquid assets.
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 Securities and Exchange Commission. Any Form N-CR filing submitted by the
Fund is available on the EDGAR Database on the Securities and Exchange
Commission’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. Each Fund's NAV for each class is calculated each day the New York Stock
Exchange ("NYSE") is open, as of the close of business of the Exchange (normally
3:00 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; 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 its shares as of 3:00 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
• 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 which 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 Advisor 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 which 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 the Advisor 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 Funds is determined at
the same 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 Directors 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 which 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.
The
Board has approved policies and procedures for PGI to conduct monthly stress
testing of the Money Market Funds' ability to maintain a stable net asset value
per share and a weekly liquid asset level of at least 10%.
TAX
CONSIDERATIONS
Qualification
as a Regulated Investment Company
The
Funds intend to qualify annually to be treated as regulated investment companies
(RICs) 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 RICs, the Funds must invest in assets which 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, the
Funds’ ability to invest in certain derivatives, swaps, commodity-linked
derivatives and other commodity/natural resource-related securities may be
restricted. Further, if the Funds invest in these types of securities and the
income is not determined to be Qualifying Income, it may cause such Fund to fail
to qualify as a RIC under the IRC for a given year. If a Fund fails to qualify
as a regulated investment company for a particular year, 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 Code 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 Code 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 Internal Revenue Service. 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 which 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 Internal
Revenue Code 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
objectives and policies. In such event, the Fund would reevaluate its investment
objectives 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 Fund may publish month-end portfolio holdings information for
each Fund’s portfolio on the www.principal.com website and on the
www.principalfunds.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 Fund's 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 Fund 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 Fund's 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 Fund;
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 Fund's custodian, The Bank of New York Mellon, in connection with the
custodial services it provides to the Fund; and
6) Kessler,
Topaz, Meltzer & Check, LLP, in connection with legal services it provides
to the Fund.
The
Fund is 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 Fund, 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 Fund
currently has disclosure agreements with the following:
|
|
|
|
|
|
|
|
|
Abacus
Group LLC |
DTCC
OASYS |
Merrill
Corporation |
Abel
Noser |
DTI
Global |
Moody's
Analytics |
Accenture |
Eagle
Investment Systems Corp. |
Morgan
Stanley |
Adobe |
Electra
Information Systems |
Morningstar,
Inc. |
Advent |
Electra-Reconciliation |
MSCI
Inc. |
Advent
Custodial Data (ACD) |
ESG
Manager (MSCI) |
Nomura
International |
Advent
Portfolio Exchange |
eVestment
Alliance |
Northern
Trust |
Algorithmics |
Eze
(Castle) Software Group |
Omgeo
LLC |
Ascendant
Compliance Manager |
FactSet |
Portware,
LLC |
Ashland
Partners |
FactSet
Research Systems Inc. |
PricewaterhouseCoopers,
LLP |
Axioma |
Financial
Recovery Technologies (FRT) |
Refinitiv |
Barclays |
Financial
Tracking Technologies LLC |
RR
Donnelley and Sons |
Barra |
FIS
Global Asset Management |
Russell
Investments Implementation Services, LLC |
Black
Mountain Systems |
FIS
PTA |
SAP |
Bloomberg
AIM |
FTSE
Fixed Income LLC |
SDL |
Bloomberg
LP |
FX
Transparency |
SEI
Global Services, Inc. |
Bloomberg
Port |
Global
Trading Analytics |
SEI
Manager Dashboard |
Bloomberg
Professional Services |
Goldman
Sachs |
Serena |
BNY
Mellon |
IHS
Markit LTD |
SmartStream
Technologies |
Broadridge |
INDATA |
Solvency
Analytics AG |
Broadridge
Business Process Outsourcing Solutions, LLC |
Indus
Valley Partners (IVP) |
SS&C
(Evare) |
Broadridge
Financial Solutions, Inc. |
Intercontinental
Exchange, Inc. |
SS&C
Hedge Fund Services, North America, Inc. |
Broadridge
Systems |
InvestCloud
Inc |
SS&C
Technologies |
Brown
Brothers Harriman |
Investment
Company Institute (ICI) |
SS&C
Technologies Holdings |
Capital
Confirmation, Inc. |
Investor
Tools, Inc. |
SS&C
Vision FI |
Charles
River |
Iron
Mountain |
State
Street Bank & Trust |
Charles
River Systems, Inc. |
ITG |
State
Street Corporation |
Charles
River Trading System |
JPMorgan
Chase |
Style
Research |
Clearpar
(Markit) |
JW
Boarman |
SWIFT |
Confluence
Technologies |
KPMG |
Sybase
Inc. |
COR-FS
Ltd. |
Lend
Amend |
Tegra118 |
Corporate
Communication Group |
LexisNexis |
Trade
Informatics |
Credit
Suisse |
Linedata |
TriOptima |
Deutsche
Bank |
Lionbridge |
TSI
(Virtus) |
DG3 |
LiquidNet |
UBS |
Donnelley
Financial Solutions |
London
Stock Exchange Group |
Veritas |
DST
Systems |
Markit
WSO Services |
Veritext
Global |
DTCC
Derivatives Repository Ltd. |
MBI
Solutions, LLC |
WCI
Consulting |
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
Fund's non-public portfolio holdings information policy applies without
variation to individual investors, institutional investors, intermediaries that
distribute the Fund's shares, third party service providers, rating and ranking
organizations, and affiliated persons of the Fund. Neither the Fund nor PGI nor
any other party receives compensation in connection with the disclosure of Fund
portfolio information. The Fund's CCO will periodically, but no less frequently
than annually, review the Fund's portfolio holdings disclosure policy and
recommend changes the CCO believes are appropriate, if any, to the Fund's Board.
In addition, the Fund's Board must approve any change in the Fund's 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 that 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. 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 Fund voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30, 2020, is available, without charge,
upon request, by calling 1-800-222-5852 or by accessing the Fund’s most recently
filed Form N-PX on the SEC website at www.sec.gov.
FINANCIAL
STATEMENTS
The
financial statements of the Fund at October 31, 2020, are incorporated herein by
reference to the Fund’s most recent Annual
Report to Shareholders
filed with the SEC on Form N-CSR.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Ernst
& Young LLP (220 South Sixth Street, Suite 1400, 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 Only. 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, and 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, the S&P MidCap 400 Index, or the 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, S&P MIDCAP 400 INDEX, OR 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 the Fund as of February 4, 2021. 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 |
25.76% |
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 |
60.22% |
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 |
|
|
|
|
|
|
|
CORE
PLUS BOND |
25.70% |
DELAWARE
CHARTER GUAR & TRUST CO |
DELAWARE |
PRINCIPAL
HOLDING |
|
|
D/B/A
PRINCIPAL TRUST COMPANY |
|
COMPANY,
LLC (1) |
|
|
EVANSTON
FIRE DEPARTMENT RETIREE |
|
|
|
|
FUNDED
HRA TRUST |
|
|
|
|
1013
CENTRE RD |
|
|
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
|
|
|
|
DIVERSIFIED
|
53.13% |
PRINCIPAL
GLOBAL INVESTORS TRUST CO |
DELAWARE |
PRINCIPAL
HOLDING |
INTERNATIONAL |
|
PRINCIPAL
LIFETIME HYBRID |
|
COMPANY,
LLC (1) |
|
|
COLLECTIVE
INVESTMENT FUNDS |
|
|
|
|
1300
SW 5TH AVE STE 3300 |
|
|
|
|
PORTLAND
OR 97201-5640 |
|
|
|
|
|
|
|
FINISTERRE
EMERGING |
36.87% |
NATIONAL
FINANCIAL SERVICES LLC |
DELAWARE |
FIDELITY
GLOBAL |
MARKETS
TOTAL |
|
FOR
EXCLUSIVE BENEFIT OF OUR |
|
BROKERAGE
GROUP, |
RETURN
BOND |
|
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 QUALITY |
26.30% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
MARYLAND |
PRINCIPAL
FUNDS, |
BOND |
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
INC |
|
|
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) |
HIGH
INCOME |
48.48% |
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 |
36.43% |
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 |
59.33% |
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 |
|
|
|
|
|
|
|
LARGECAP
GROWTH I |
42.70% |
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 |
50.66% |
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 |
45.76% |
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
CAPITAL |
26.91% |
PRINCIPAL
LIFE INS. COMPANY CUST |
IOWA |
PRINCIPAL
FINANCIAL |
APPRECIATION |
|
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) |
PRINCIPAL
LIFETIME |
65.95% |
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 2010 |
51.25% |
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 2015 |
68.73% |
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 |
28.66% |
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 |
|
|
|
|
|
|
|
PRINCIPAL
LIFETIME 2020 |
56.73% |
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 |
69.97% |
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 |
27.86% |
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 2030 |
60.06% |
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 |
70.65% |
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 |
27.22% |
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 |
|
|
|
|
|
|
|
PRINCIPAL
LIFETIME 2040 |
60.64% |
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 |
67.43% |
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 |
31.14% |
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 |
65.46% |
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 |
|
|
|
|
|
|
|
PRINCIPAL
LIFETIME 2055 |
67.96% |
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 |
29.59% |
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 |
|
|
|
|
|
|
|
PRINCIPAL
LIFETIME 2060 |
76.40% |
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 |
73.96% |
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 |
53.13% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
INCOME |
|
FBO
PLIC VARIOUS RETIREMENT PLANS |
|
COMPANY,
LLC (1) |
|
|
ATTN
NPIO TRADE DESK OMNIBUS |
|
|
|
|
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 |
56.74% |
DCGT
AS TTEE AND/OR CUST |
DELAWARE |
PRINCIPAL
HOLDING |
HYBRID
2015 |
|
FBO
PLIC VARIOUS RETIREMENT PLANS |
|
COMPANY,
LLC (1) |
|
|
ATTN
NPIO TRADE DESK OMNIBUS |
|
|
|
|
711
HIGH ST |
|
|
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
PRINCIPAL
LIFETIME |
58.66% |
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 |
51.51% |
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 |
|
|
|
|
|
|
|
PRINCIPAL
LIFETIME |
54.19% |
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 |
52.45% |
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 |
56.21% |
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 |
58.18% |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
61.86% |
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 |
66.40% |
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 |
61.09% |
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 |
|
|
|
|
|
|
|
SMALLCAP
GROWTH I |
51.92% |
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 |
41.02% |
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 |
|
|
|
|
|
|
|
(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
Directors and Officers of the Fund, 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.
The
By-laws of PFI set the quorum requirement (a quorum must be present at a meeting
of shareholders for business to be transacted). The By-laws of PFI 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 (a "Majority of the Outstanding Voting
Securities").
Principal
Holders of Securities
The
Fund is unaware of any persons who own beneficially (but are not shareholders of
record) more than 5% of the Fund's outstanding shares. The following list
identifies the shareholders of record who own 5% or more of any class of the
Fund's outstanding shares as of February 4, 2021. The list is presented in
alphabetical order by fund.
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
CALIFORNIA
MUNICIPAL (A) |
24.99% |
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) |
24.24% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
CALIFORNIA
MUNICIPAL (A) |
13.39% |
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 |
|
|
|
CALIFORNIA
MUNICIPAL (A) |
8.14% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
CALIFORNIA
MUNICIPAL (A) |
6.18% |
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 (A) |
5.54% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1932 |
|
|
|
CALIFORNIA
MUNICIPAL (C) |
36.69% |
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) |
17.41% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
CALIFORNIA
MUNICIPAL (C) |
12.97% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
CALIFORNIA
MUNICIPAL (C) |
9.16% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1901 |
|
|
|
CALIFORNIA
MUNICIPAL (I) |
25.29% |
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) |
17.69% |
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) |
9.29% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
|
FBO
#41999970 |
|
|
707
2ND AVE S |
|
|
MINNEAPOLIS
MN 55402-2405 |
|
|
|
CALIFORNIA
MUNICIPAL (I) |
9.17% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1932 |
|
|
|
CALIFORNIA
MUNICIPAL (I) |
8.19% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
CALIFORNIA
MUNICIPAL (I) |
6.15% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
CALIFORNIA
MUNICIPAL (I) |
6.05% |
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 (I) |
5.44% |
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 |
CORE
FIXED INCOME (A) |
27.09% |
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 |
|
|
|
CORE
FIXED INCOME (A) |
8.23% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
CORE
FIXED INCOME (A) |
7.31% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
|
FBO
#41999970 |
|
|
707
2ND AVE S |
|
|
MINNEAPOLIS
MN 55402-2405 |
|
|
|
CORE
FIXED INCOME (C) |
23.57% |
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 |
|
|
|
CORE
FIXED INCOME (C) |
14.40% |
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 (C) |
9.10% |
RAYMOND
JAMES |
|
|
OMNIBUS
FOR MUTUAL FUNDS |
|
|
HOUSE
ACCT FIRM 92500015 |
|
|
ATTN:
COURTNEY WALLER |
|
|
880
CARILLON PKWY |
|
|
ST
PETERSBURG FL 33716-1102 |
|
|
|
CORE
FIXED INCOME (C) |
5.07% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
CORE
FIXED INCOME (I) |
50.57% |
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 |
CORE
FIXED INCOME (I) |
9.95% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
FIXED INCOME (I) |
6.73% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
|
FBO
#41999970 |
|
|
707
2ND AVE S |
|
|
MINNEAPOLIS
MN 55402-2405 |
|
|
|
CORE
FIXED INCOME (I) |
6.58% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
CORE
FIXED INCOME (I) |
5.90% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
CORE
FIXED INCOME (R1) |
94.51% |
VOYA
INSTITUTIONAL TRUST COMPANY |
|
|
1
ORANGE WAY |
|
|
WINDSOR
CT 06095-4773 |
|
|
|
CORE
FIXED INCOME (R3) |
87.15% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
FIXED INCOME (R4) |
95.72% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
FIXED INCOME (R5) |
89.98% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
FIXED INCOME (R5) |
6.14% |
T
ROWE PRICE RETIREMENT PLAN SERVICES INC |
|
|
FBO
RETIREMENT PLAN CLIENTS |
|
|
4515
PAINTERS MILL RD |
|
|
OWINGS
MILLS MD 21117-4903 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
CORE
FIXED INCOME (R6) |
17.14% |
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) |
16.31% |
LIFETIME
2030 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
FIXED INCOME (R6) |
12.93% |
LIFETIME
2020 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING H-221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
FIXED INCOME (R6) |
7.15% |
LIFETIME
2040 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
FIXED INCOME (R6) |
6.13% |
SAM
BALANCED PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
FIXED INCOME (R6) |
5.35% |
MAC
& CO A/C 135590 |
|
|
MUTUAL
FUND OPERATIONS |
|
|
500
GRANT STREET ROOM 151-1010 |
|
|
PITTSBURGH
PA 15219-2502 |
|
|
|
CORE
FIXED INCOME (R6) |
5.09% |
LIFETIME
2025 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
PLUS BOND (A) |
8.83% |
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) |
73.47% |
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 |
CORE
PLUS BOND (I) |
13.26% |
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) |
88.39% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
PLUS BOND (R1) |
9.04% |
MID
ATLANTIC TRUST COMPANY FBO |
|
|
UNITED
STATES SQUASH RACQUETS 401(K |
|
|
1251
WATERFRONT PLACE SUITE 525 |
|
|
PITTSBURGH
PA 15222-4228 |
|
|
|
CORE
PLUS BOND (R3) |
76.80% |
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 (R4) |
83.35% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
PLUS BOND (R4) |
5.06% |
RANGER
PIPELINES INCORPORATED |
|
|
FBO
RANGER PIPELINES INC NQ EXCESS PLAN |
|
|
ATTN
PLAN TRUSTEE |
|
|
1790
YOSEMITE AVE |
|
|
SAN
FRANCISCO CA 94124-2622 |
|
|
|
CORE
PLUS BOND (R5) |
79.18% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
CORE
PLUS BOND (R5) |
5.86% |
NORTHWEST
ADMINISTRATORS |
|
|
FBO
NQ EXCESS OF NW ADMINISTRATORS |
|
|
ATTN
GAYLE BUSHNELL |
|
|
2323
EASTLAKE AVE E |
|
|
SEATTLE
WA 98102-3963 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
CORE
PLUS BOND (R5) |
5.74% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
GRIMMWAY FARMS EXEC DEFERRED |
|
|
ATTN
PLAN TRUSTEE COMP |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
DIVERSIFIED
INTERNATIONAL (A) |
10.23% |
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 (C) |
21.30% |
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 (C) |
9.26% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
DIVERSIFIED
INTERNATIONAL (I) |
55.23% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
DIVERSIFIED
INTERNATIONAL (I) |
13.23% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
DIVERSIFIED
INTERNATIONAL (I) |
5.80% |
ATTN
MUTUAL FUND OPERATIONS |
|
|
MAC
& CO A/C 298116 |
|
|
500
GRANT STREET ROOM 151-1010 |
|
|
PITTSBURGH
PA 15219-2502 |
|
|
|
DIVERSIFIED
INTERNATIONAL (R1) |
88.78% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
DIVERSIFIED
INTERNATIONAL (R1) |
5.16% |
RELIANCE
TRUST CO TTEE |
|
|
FBO
ADP ACCESS LARGE MARKET |
|
|
401(K)
PLAN |
|
|
201
17TH ST NW STE 1000 |
|
|
ATLANTA
GA 30363-1195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
DIVERSIFIED
INTERNATIONAL (R3) |
62.65% |
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) |
79.67% |
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) |
83.05% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
DIVERSIFIED
INTERNATIONAL (R5) |
5.06% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
DIVERSIFIED
INTERNATIONAL (R6) |
57.54% |
PRINCIPAL
GLOBAL INVESTORS TRUST CO |
|
|
PRINCIPAL
LIFETIME HYBRID |
|
|
COLLECTIVE
INVESTMENT FUNDS |
|
|
1300
SW 5TH AVE STE 3300 |
|
|
PORTLAND
OR 97201-5640 |
|
|
|
DIVERSIFIED
INTERNATIONAL (R6) |
5.30% |
LIFETIME
2030 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
EQUITY
INCOME (A) |
16.75% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
EQUITY
INCOME (A) |
11.07% |
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) |
10.52% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FOR THE BENEFIT OF CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
EQUITY
INCOME (C) |
25.32% |
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) |
12.21% |
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) |
6.04% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
EQUITY
INCOME (C) |
5.94% |
RAYMOND
JAMES |
|
|
OMNIBUS
FOR MUTUAL FUNDS |
|
|
HOUSE
ACCT FIRM 92500015 |
|
|
ATTN:
COURTNEY WALLER |
|
|
880
CARILLON PKWY |
|
|
ST
PETERSBURG FL 33716-1102 |
|
|
|
EQUITY
INCOME (C) |
5.36% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
EQUITY
INCOME (I) |
27.09% |
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) |
9.00% |
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 (I) |
8.43% |
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 |
EQUITY
INCOME (I) |
7.13% |
SAM
CONS GROWTH PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
EQUITY
INCOME (R1) |
88.96% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
EQUITY
INCOME (R1) |
6.44% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
CONCORP CONCRETE INC DEFINED |
|
|
BENEFIT
PENSION PLAN |
|
|
4687
E CORTLAND AVE |
|
|
FRESNO
CA 93726-6310 |
|
|
|
EQUITY
INCOME (R3) |
62.59% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
EQUITY
INCOME (R4) |
84.21% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
EQUITY
INCOME (R5) |
90.17% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
FINISTERRE
EMERG MKTS TOTAL RT BD (A) |
45.24% |
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 |
|
|
|
FINISTERRE
EMERG MKTS TOTAL RT BD (A) |
6.65% |
RBC
CAPITAL MARKETS LLC |
|
|
MUTUAL
FUND OMNIBUS PROCESS OMNIBUS |
|
|
ATTN
MUTAL FUND OPS MANAGER |
|
|
60
SOUTH SIXTH STREET - P08 |
|
|
MINNEAPOLIS
MN 55402-4413 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
FINISTERRE
EMERG MKTS TOTAL RT BD (A) |
5.10% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
FINISTERRE
EMERG MKTS TOTAL RT BD (I) |
36.71% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
FINISTERRE
EMERG MKTS TOTAL RT BD (I) |
23.47% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
FINISTERRE
EMERG MKTS TOTAL RT BD (I) |
13.89% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY ACCT |
|
|
FBO
CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
211
MAIN ST |
|
|
SAN
FRANCISCO CA 94105-1905 |
|
|
|
FINISTERRE
EMERG MKTS TOTAL RT BD (I) |
13.70% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1932 |
|
|
|
FINISTERRE
EMERG MKTS TOTAL RT BD (I) |
5.80% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (A) |
14.24% |
MLPF&S
FOR THE SOLE BENEFIT OF ITS CUSTOMERS |
|
|
ATTN
FUND ADMINISTRATION |
|
|
4800
DEER LAKE DR E FL 3 |
|
|
JACKSONVILLE
FL 32246-6484 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (A) |
12.81% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1932 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (A) |
12.10% |
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 |
GLOBAL
DIVERSIFIED INCOME (A) |
11.13% |
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
DIVERSIFIED INCOME (A) |
5.63% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
211
MAIN STREET |
|
|
SAN
FRANCISCO CA 94105-1905 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (A) |
5.35% |
UBS
WM USA |
|
|
0O0
11011 6100 |
|
|
OMNI
ACCOUNT M/F |
|
|
SPEC
CDY A/C EBOC UBSFSI |
|
|
1000
HARBOR BLVD |
|
|
WEEHAWKEN
NJ 07086-6761 |
|
|
|
GLOBAL
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 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (C) |
9.64% |
UBS
WM USA |
|
|
0O0
11011 6100 |
|
|
OMNI
ACCOUNT M/F |
|
|
SPEC
CDY A/C EBOC UBSFSI |
|
|
1000
HARBOR BLVD |
|
|
WEEHAWKEN
NJ 07086-6761 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (C) |
8.56% |
RAYMOND
JAMES |
|
|
OMNIBUS
FOR MUTUAL FUNDS |
|
|
HOUSE
ACCT FIRM 92500015 |
|
|
ATTN:
COURTNEY WALLER |
|
|
880
CARILLON PKWY |
|
|
ST
PETERSBURG FL 33716-1102 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (C) |
6.85% |
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
DIVERSIFIED INCOME (C) |
6.44% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (C) |
6.01% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1901 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (C) |
5.68% |
CHARLES
SCHWAB & CO INC |
|
|
FBO
SPECIAL CUSTODY ACCOUNTS |
|
|
ATTN
MUTUAL FUNDS |
|
|
211
MAIN ST |
|
|
SAN
FRANCISCO CA 94105-1905 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (C) |
5.32% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (I) |
14.35% |
MLPF&S
FOR THE SOLE |
|
|
BENEFIT
OF ITS CUSTOMERS |
|
|
ATTN
FUND ADMINISTRATION |
|
|
4800
DEER LAKE DR E FL 3 |
|
|
JACKSONVILLE
FL 32246-6484 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (I) |
13.13% |
WELLS
FARGO CLEARING SERVICES LLC |
|
|
SPECIAL
CUSTODY ACCT FOR THE |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMER |
|
|
2801
MARKET ST |
|
|
SAINT
LOUIS MO 63103-2523 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (I) |
11.38% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1901 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (I) |
9.80% |
UBS
WM USA |
|
|
0O0
11011 6100 |
|
|
OMNI
ACCOUNT M/F |
|
|
SPEC
CDY A/C EBOC UBSFSI |
|
|
1000
HARBOR BLVD |
|
|
WEEHAWKEN
NJ 07086-6761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
GLOBAL
DIVERSIFIED INCOME (I) |
8.55% |
RAYMOND
JAMES |
|
|
OMNIBUS
FOR MUTUAL FUNDS |
|
|
HOUSE
ACCT FIRM 92500015 |
|
|
ATTN:
COURTNEY WALLER |
|
|
880
CARILLON PKWY |
|
|
ST
PETERSBURG FL 33716-1102 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (I) |
7.30% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
211
MAIN STREET |
|
|
SAN
FRANCISCO CA 94105-1905 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (I) |
7.18% |
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
DIVERSIFIED INCOME (I) |
6.70% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (I) |
6.16% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (R6) |
32.67% |
SAM
BALANCED PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (R6) |
21.45% |
SAM
CONS BALANCED PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GLOBAL
DIVERSIFIED INCOME (R6) |
12.17% |
ATTN
MUTUAL FUND OPERATIONS |
|
|
MAC
& CO A/C 798042 |
|
|
500
GRANT STREET ROOM 151-1010 |
|
|
PITTSBURGH
PA 15219-2502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
GLOBAL
DIVERSIFIED INCOME (R6) |
9.47% |
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
DIVERSIFIED INCOME (R6) |
6.36% |
ATTN
MUTUAL FUNDS OPERATIONS |
|
|
MAC
& CO A/C 798018 |
|
|
500
GRANT STREET ROOM 151-1010 |
|
|
PITTSBURGH
PA 15219-2502 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (A) |
13.88% |
MLPF&S
FOR THE SOLE |
|
|
BENEFIT
OF ITS CUSTOMERS |
|
|
ATTN
FUND ADMINISTRATION |
|
|
4800
DEER LAKE DR E FL 3 |
|
|
JACKSONVILLE
FL 32246-6484 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (A) |
13.72% |
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
REAL ESTATE SECURITIES (A) |
12.95% |
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) |
10.86% |
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) |
7.20% |
PIMS/PRUDENTIAL
RETIREMENT |
|
|
AS
NOMINEE FOR THE TTEE/CUST PL 002 |
|
|
CITY
OF JERSEY CITY |
|
|
394
CENTRAL AVENUE |
|
|
2ND
FLOOR |
|
|
JERSEY
CITY NJ 07307-2871 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (C) |
29.34% |
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 |
GLOBAL
REAL ESTATE SECURITIES (C) |
13.45% |
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 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (C) |
12.77% |
WELLS
FARGO CLEARING SERVICES LLC |
|
|
SPECIAL
CUSTODY ACCT FOR THE |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMER |
|
|
2801
MARKET ST |
|
|
SAINT
LOUIS MO 63103-2523 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (C) |
10.50% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1901 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (C) |
5.85% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (I) |
28.35% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (I) |
13.75% |
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) |
13.63% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FOR THE |
|
|
BENEFIT
OF CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (I) |
7.59% |
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 |
GLOBAL
REAL ESTATE SECURITIES (I) |
6.86% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1932 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R3) |
49.52% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
BLUE ROCK REFINISHING SOLUTIONS |
|
|
LLC
CASH BALANCE PLAN |
|
|
2974
CLEVELAND AVE N |
|
|
SAINT
PAUL MN 55113-1101 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R3) |
34.15% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R3) |
6.71% |
STATE
STREET BANK CUSTODIAN CUST |
|
|
FBO
ACCESS ADP 401(K) PLAN |
|
|
1
LINCOLN STREET |
|
|
BOSTON
MA 02111-2901 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R3) |
6.08% |
FIDELITY
INVESTMENTS INST OPER CO INC |
|
|
FBO
BACON FARMER WORKMAN ENGINEERING & |
|
|
TESTING
INC 401K |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1999 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R4) |
67.40% |
VOYA
INSTITUTIONAL TRUST COMPANY |
|
|
1
ORANGE WAY |
|
|
WINDSOR
CT 06095-4773 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R4) |
32.59% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R5) |
80.99% |
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 |
GLOBAL
REAL ESTATE SECURITIES (R5) |
13.98% |
FIIOC |
|
|
FBO
MEYER BORGMAN & JOHNSON INC |
|
|
RETIREMENT
PLAN |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R6) |
17.27% |
UBATCO
& CO |
|
|
FBO
COLLEGE SAVINGS GROUP |
|
|
PO
BOX 82535 |
|
|
LINCOLN
NE 68501-2535 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R6) |
14.64% |
SAM
BALANCED PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R6) |
8.10% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R6) |
7.86% |
SAM
CONS GROWTH PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R6) |
6.94% |
SAM
CONS BALANCED PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R6) |
6.36% |
MAC
& CO A/C 681885 |
|
|
ATTN
MUTUAL FUND OPS |
|
|
500
GRANT STREET ROOM 151-1010 |
|
|
PITTSBURGH
PA 15219-2502 |
|
|
|
GLOBAL
REAL ESTATE SECURITIES (R6) |
5.71% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
|
FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
|
ATTN
PLIC PROXY COORDINATOR FUNDS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (A) |
20.14% |
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 |
GOVERNMENT
& HIGH QUALITY BOND (A) |
11.02% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (C) |
27.32% |
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 (C) |
13.64% |
WELLS
FARGO CLEARING SERVICES LLC |
|
|
SPECIAL
CUSTODY ACCT FOR THE |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMER |
|
|
2801
MARKET ST |
|
|
SAINT
LOUIS MO 63103-2523 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (C) |
5.03% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (I) |
37.18% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (I) |
20.62% |
SAM
BALANCED PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (I) |
12.90% |
SAM
CONS BALANCED PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (I) |
10.33% |
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) |
34.95% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
MEUSER LAW OFFICE, P.A. CASH |
|
|
BALANCE
PLAN |
|
|
10400
VIKING DR STE 250 |
|
|
EDEN
PRAIRIE MN 55344-7267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
GOVERNMENT
& HIGH QUALITY BOND (R1) |
34.25% |
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 (R1) |
29.85% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
KANE HANDEL DEFINED BENEFIT PLAN |
|
|
3525
DEL MAR HEIGHTS ROAD STE 231 |
|
|
SAN
DIEGO CA 92130-2199 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (R3) |
60.68% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (R3) |
10.80% |
USIC |
|
|
FBO
USIC EXEC BENEFIT PLAN |
|
|
ATTN
CARYN HILDRETH |
|
|
9045
RIVER RD STE 300 |
|
|
INDIANAPOLIS
IN 46240-6400 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (R3) |
6.36% |
STATE
STREET BANK AND TRUST COMPANY |
|
|
TRUSTEE
AND/OR CUSTODIAN |
|
|
FBO
ADP ACCESS PRODUCT |
|
|
1
LINCOLN ST |
|
|
BOSTON
MA 02111-2901 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (R4) |
73.45% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (R4) |
6.87% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
NQ BENEFIT FOR HCES OF MIECO |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (R5) |
60.31% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (R5) |
14.14% |
NORTHWEST
ADMINISTRATORS |
|
|
FBO
NQ EXCESS OF NW ADMINISTRATORS |
|
|
2323
EASTLAKE AVE E |
|
|
SEATTLE
WA 98102-3963 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
GOVERNMENT
& HIGH QUALITY BOND (R5) |
6.38% |
RELIANCE
TRUST CO CUST |
|
|
FBO
ADP ACCESS LARGE MARKET |
|
|
401(K)
PLAN |
|
|
201
17TH ST NW STE 1000 |
|
|
ATLANTA
GA 30363-1195 |
|
|
|
GOVERNMENT
& HIGH QUALITY BOND (R5) |
5.80% |
MATRIX
TRUST COMPANY CUST |
|
|
FBO
RUEN DRILLING INC 401K PLAN |
|
|
717
17TH ST STE 1300 |
|
|
DENVER
CO 80202-3304 |
|
|
|
GOVERNMENT
MONEY MARKET (I) |
18.11% |
INCOME
FUND |
|
|
FBO
PGI |
|
|
ATTN
MUTUAL FUND ACCOUNTING H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GOVERNMENT
MONEY MARKET (I) |
8.68% |
BNY
MELLON AS AGENT FOR VARIOUS |
|
|
PRINCIPAL
FUNDS |
|
|
500
GRANT ST |
|
|
PITTSBURGH
PA 15219-2502 |
|
|
|
GOVERNMENT
MONEY MARKET (I) |
6.86% |
BOND
MARKET INDEX ACCOUNT |
|
|
FBO
PGI |
|
|
ATTN
MUTUAL FUND ACCOUNTING H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GOVERNMENT
MONEY MARKET (I) |
5.92% |
GOVERNMENT
& HIGH QUALITY BOND FUND |
|
|
FBO
PGI |
|
|
ATTN
MUTUAL FUND ACCOUNTING H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
GOVERNMENT
MONEY MARKET (I) |
5.85% |
EQUITY
INCOME FUND |
|
|
FBO
PGI |
|
|
ATTN
MUTUAL FUND ACCOUNTING H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
HIGH
INCOME (I) |
48.54% |
PRINCIPAL
GLOBAL INVESTORS TRUST CO |
|
|
PRINCIPAL
LIFETIME HYBRID |
|
|
COLLECTIVE
INVESTMENT FUNDS |
|
|
1300
SW 5TH AVE STE 3300 |
|
|
PORTLAND
OR 97201-5640 |
|
|
|
HIGH
INCOME (I) |
14.53% |
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) |
7.09% |
LIFETIME
2030 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
HIGH
INCOME (I) |
5.68% |
LIFETIME
2020 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
HIGH
YIELD (A) |
13.09% |
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 |
|
|
|
HIGH
YIELD (A) |
7.95% |
WELLS
FARGO CLEARING SERVICES LLC |
|
|
SPECIAL
CUSTODY ACCT FOR THE |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMER |
|
|
2801
MARKET ST |
|
|
SAINT
LOUIS MO 63103-2523 |
|
|
|
HIGH
YIELD (A) |
5.88% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FOR THE |
|
|
BENEFIT
OF CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
HIGH
YIELD (A) |
5.32% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
HIGH
YIELD (C) |
30.16% |
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 (C) |
13.86% |
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) |
10.36% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
HIGH
YIELD (C) |
6.87% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
HIGH
YIELD (I) |
31.46% |
WELLS
FARGO CLEARING SERVICES LLC |
|
|
SPECIAL
CUSTODY ACCT FOR THE |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMER |
|
|
2801
MARKET ST |
|
|
SAINT
LOUIS MO 63103-2523 |
|
|
|
HIGH
YIELD (I) |
12.25% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
HIGH
YIELD (I) |
10.76% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
|
|
|
|
|
|
|
|
|
HIGH
YIELD (I) |
6.50% |
C/O
UNION BANK ID 797 |
|
|
SEI
PRIVATE TRUST COMPANY |
|
|
ONE
FREEDOM VALLEY DRIVE |
|
|
OAKS
PA 19456-9989 |
|
|
|
HIGH
YIELD (I) |
6.45% |
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) |
49.84% |
WELLS
FARGO BANK NA FBO |
|
|
OMNIBUS
CASH XXXX0 |
|
|
PO
BOX 1533 |
|
|
MINNEAPOLIS
MN 55480-1533 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
HIGH
YIELD (R6) |
10.20% |
SAM
BALANCED PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
HIGH
YIELD (R6) |
9.54% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
|
FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
|
ATTN
PLIC PROXY COORDINATOR FUNDS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
HIGH
YIELD (R6) |
8.24% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING -H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
HIGH
YIELD (R6) |
6.08% |
SAM
CONS BALANCED PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INFLATION
PROTECTION (I) |
37.24% |
PRINCIPAL
GLOBAL INVESTORS TRUST CO |
|
|
PRINCIPAL
LIFETIME HYBRID |
|
|
COLLECTIVE
INVESTMENT FUNDS |
|
|
1300
SW 5TH AVE STE 3300 |
|
|
PORTLAND
OR 97201-5640 |
|
|
|
INFLATION
PROTECTION (I) |
12.15% |
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) |
9.82% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INFLATION
PROTECTION (I) |
8.27% |
LIFETIME
2020 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INFLATION
PROTECTION (I) |
7.13% |
LIFETIME
2030 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INFLATION
PROTECTION (J) |
10.66% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
|
IRA
DONALD A LASSUS |
|
|
9615
RAVENSWORTH DR |
|
|
HOUSTON
TX 77031-3119 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
INFLATION
PROTECTION (R1) |
98.67% |
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) |
66.62% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INFLATION
PROTECTION (R3) |
11.79% |
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 (R4) |
77.52% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
INFLATION
PROTECTION (R4) |
8.34% |
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 (R4) |
5.28% |
BRIDGES
INC |
|
|
FBO
EXEC 457F OF BRIDGES INC |
|
|
ATTN
CHRISTY KNUTSON |
|
|
3600
POWER INN RD STE C |
|
|
SACRAMENTO
CA 95826-3826 |
|
|
|
INFLATION
PROTECTION (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 |
|
|
|
INFLATION
PROTECTION (R5) |
13.35% |
COMANCHE
COUNTY HOSPITAL AUTHORITY |
|
|
FBO
COMANCHE COUNTY HOSPITAL |
|
|
AUTHORITY
EMPLOYEE EXCESS PLAN |
|
|
ATTN
DONNA WADE |
|
|
3401
W GORE BLVD |
|
|
LAWTON
OK 73505-6300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
INTERNATIONAL
EMERGING MARKETS (A) |
16.96% |
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 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (C) |
31.07% |
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 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (I) |
76.48% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (I) |
9.39% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (R1) |
89.15% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (R3) |
55.91% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (R3) |
5.90% |
SMP
HEALTH SYSTEM |
|
|
FBO
EXEC NQ EXCESS OF SMP HEALTH |
|
|
ATTN
AARON ALTON |
|
|
PO
BOX 10007 |
|
|
FARGO
ND 58106-0007 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (R3) |
5.42% |
THE
COUNCIL OF INS AGENTS & BROKERS |
|
|
FBO
EXEC 457B PLAN THE COUNCIL |
|
|
OF
INSURANCE AGENTS AND BROKERS |
|
|
ATTN
CE HARRISON |
|
|
701
PENNSYLVANIA AVE NW STE 750 |
|
|
WASHINGTON
DC 20004-2661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
INTERNATIONAL
EMERGING MARKETS (R4) |
79.72% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (R4) |
8.60% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
CRST INTL NQ PLAN |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (R5) |
82.30% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (R6) |
92.73% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS |
|
|
ATTN
NPIO TRADE DESK OMNIBUS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INTERNATIONAL
EMERGING MARKETS (R6) |
6.37% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
PAN-AMERICAN LIFE INSURANCE CO |
|
|
ATTN
PLAN TRUSTEE 6784 |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
INTERNATIONAL
I (I) |
53.13% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
INTERNATIONAL
I (I) |
31.21% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1901 |
|
|
|
INTERNATIONAL
I (I) |
7.58% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FOR THE BENEFIT OF CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
INTERNATIONAL
I (R1) |
99.66% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
INTERNATIONAL
I (R3) |
79.92% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INTERNATIONAL
I (R3) |
5.01% |
DELAWARE
CHARTER GUAR & TRUST CO |
|
|
D/B/A
PRINCIPAL TRUST COMPANY |
|
|
EVANSTON
FIRE DEPARTMENT RETIREE |
|
|
FUNDED
HRA TRUST |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
INTERNATIONAL
I (R4) |
96.60% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INTERNATIONAL
I (R5) |
92.88% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
INTERNATIONAL
I (R5) |
5.21% |
WELLS
FARGO INST TRUST SERVICES |
|
|
FBO
WORLD INSURANCE CO. EXECUTIVE SERP PLAN |
|
|
ATTN
KATE MEYER |
|
|
733
MARQUETTE AVENUE |
|
|
MINNEAPOLIS
MN 55402-2309 |
|
|
|
INTERNATIONAL
I (R6) |
98.23% |
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 |
LARGECAP
GROWTH I (A) |
13.86% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
LARGECAP
GROWTH I (A) |
8.25% |
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) |
72.88% |
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) |
10.15% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
GROWTH I (R1) |
95.33% |
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) |
76.19% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
GROWTH I (R4) |
64.23% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
GROWTH I (R4) |
15.14% |
GREAT-WEST
TRUST COMPANY LLC FBO |
|
|
EMPLOYEE
BENEFITS CLIENTS 401K |
|
|
8515
E ORCHARD RD 2T2 |
|
|
GREENWOOD
VILLAGE CO 80111-5002 |
|
|
|
LARGECAP
GROWTH I (R4) |
5.06% |
CHARLES
SCHWAB & CO INC |
|
|
FBO
CHARLES SCHWAB & CO INC |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
LARGECAP
GROWTH I (R5) |
78.05% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
GROWTH I (R6) |
66.87% |
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) |
5.30% |
LIFETIME
2030 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
S&P 500 INDEX (A) |
13.90% |
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 |
|
|
|
LARGECAP
S&P 500 INDEX (A) |
7.76% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
LARGECAP
S&P 500 INDEX (C) |
17.37% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
LARGECAP
S&P 500 INDEX (C) |
15.25% |
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 (C) |
15.18% |
WELLS
FARGO CLEARING SERVICES LLC |
|
|
SPECIAL
CUSTODY ACCT FOR THE |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMER |
|
|
2801
MARKET ST |
|
|
SAINT
LOUIS MO 63103-2523 |
|
|
|
LARGECAP
S&P 500 INDEX (C) |
7.22% |
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 |
LARGECAP
S&P 500 INDEX (I) |
11.63% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
S&P 500 INDEX (I) |
11.60% |
LIFETIME
2030 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
S&P 500 INDEX (I) |
9.76% |
LIFETIME
2040 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
S&P 500 INDEX (I) |
6.67% |
LIFETIME
2050 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
S&P 500 INDEX (I) |
5.34% |
LIFETIME
2020 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
S&P 500 INDEX (R1) |
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 |
|
|
|
LARGECAP
S&P 500 INDEX (R3) |
64.12% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
S&P 500 INDEX (R4) |
54.67% |
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) |
12.71% |
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 |
LARGECAP
S&P 500 INDEX (R4) |
5.28% |
RELIANCE
TRUST CO CUST |
|
|
FBO
ADP ACCESS LARGE MARKET |
|
|
401(K)
PLAN |
|
|
201
17TH ST NW STE 1000 |
|
|
ATLANTA
GA 30363-1195 |
|
|
|
LARGECAP
S&P 500 INDEX (R5) |
79.81% |
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
VALUE III (I) |
17.68% |
LIFETIME
2030 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
VALUE III (I) |
14.93% |
LIFETIME
2040 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
VALUE III (I) |
12.57% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
|
FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
|
ATTN
PLIC PROXY COORDINATOR FUNDS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
VALUE III (I) |
10.19% |
LIFETIME
2050 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
VALUE III (I) |
8.14% |
LIFETIME
2020 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING H-221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
VALUE III (R1) |
93.17% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
VALUE III (R1) |
6.70% |
RELIANCE
TRUST CO TTEE |
|
|
FBO
ADP ACCESS LARGE MARKET |
|
|
401(K)
PLAN |
|
|
201
17TH ST NW STE 1000 |
|
|
ATLANTA
GA 30363-1195 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
LARGECAP
VALUE III (R3) |
75.17% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
VALUE III (R4) |
83.64% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
VALUE III (R4) |
5.80% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
CRST INTL NQ PLAN |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
LARGECAP
VALUE III (R4) |
5.48% |
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 (R5) |
74.93% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
LARGECAP
VALUE III (R5) |
11.16% |
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) |
5.15% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
NIPPON LIFE INS CO EXEC NQ |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
MIDCAP
(A) |
10.70% |
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 |
MIDCAP
(A) |
6.45% |
MLPF&S
FOR THE SOLE |
|
|
BENEFIT
OF ITS CUSTOMERS |
|
|
ATTN
FUND ADMINISTRATION |
|
|
4800
DEER LAKE DR E FL 3 |
|
|
JACKSONVILLE
FL 32246-6484 |
|
|
|
MIDCAP
(A) |
5.75% |
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) |
22.55% |
WELLS
FARGO CLEARING SERVICES LLC |
|
|
SPECIAL
CUSTODY ACCT FOR THE |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMER |
|
|
2801
MARKET ST |
|
|
SAINT
LOUIS MO 63103-2523 |
|
|
|
MIDCAP
(C) |
14.63% |
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) |
11.66% |
CHARLES
SCHWAB & CO INC |
|
|
FBO
SPECIAL CUSTODY ACCOUNTS |
|
|
ATTN
MUTUAL FUNDS |
|
|
211
MAIN ST |
|
|
SAN
FRANCISCO CA 94105-1905 |
|
|
|
MIDCAP
(C) |
9.87% |
UBS
WM USA |
|
|
0O0
11011 6100 |
|
|
OMNI
ACCOUNT M/F |
|
|
SPEC
CDY A/C EBOC UBSFSI |
|
|
1000
HARBOR BLVD |
|
|
WEEHAWKEN
NJ 07086-6761 |
|
|
|
MIDCAP
(C) |
8.05% |
RAYMOND
JAMES |
|
|
OMNIBUS
FOR MUTUAL FUNDS |
|
|
HOUSE
ACCT FIRM 92500015 |
|
|
ATTN:
COURTNEY WALLER |
|
|
880
CARILLON PKWY |
|
|
ST
PETERSBURG FL 33716-1102 |
|
|
|
MIDCAP
(C) |
5.68% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
MIDCAP
(C) |
5.30% |
RBC
CAPITAL MARKETS, LLC |
|
|
MUTUAL
FUND OMNIBUS PROCESS OMNIBUS |
|
|
ATTN
MUTAL FUND OPS MANAGER |
|
|
60
SOUTH SIXTH STREET - P08 |
|
|
MINNEAPOLIS
MN 55402-4413 |
|
|
|
MIDCAP
(C) |
5.02% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
MIDCAP
(I) |
16.68% |
WELLS
FARGO CLEARING SERVICES LLC |
|
|
SPECIAL
CUSTODY ACCT FOR THE |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMER |
|
|
2801
MARKET ST |
|
|
SAINT
LOUIS MO 63103-2523 |
|
|
|
MIDCAP
(I) |
15.67% |
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) |
11.08% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1932 |
|
|
|
MIDCAP
(I) |
9.31% |
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) |
7.73% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
211
MAIN STREET |
|
|
SAN
FRANCISCO CA 94105-1905 |
|
|
|
MIDCAP
(I) |
6.73% |
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 |
MIDCAP
(I) |
5.08% |
UBS
WM USA |
|
|
0O0
11011 6100 |
|
|
OMNI
ACCOUNT M/F |
|
|
SPEC
CDY A/C EBOC UBSFSI |
|
|
1000
HARBOR BLVD |
|
|
WEEHAWKEN
NJ 07086-6761 |
|
|
|
MIDCAP
(R1) |
92.62% |
VOYA
INSTITUTIONAL TRUST COMPANY |
|
|
1
ORANGE WAY |
|
|
WINDSOR
CT 06095-4773 |
|
|
|
MIDCAP
(R3) |
30.64% |
STATE
STREET BANK AND TRUST COMPANY |
|
|
TRUSTEE
AND/OR CUSTODIAN |
|
|
FBO
ADP ACCESS PRODUCT |
|
|
1
LINCOLN ST |
|
|
BOSTON
MA 02111-2901 |
|
|
|
MIDCAP
(R3) |
18.12% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
(R3) |
5.71% |
GREAT-WEST
TRUST COMPANY LLC FBO |
|
|
EMPLOYEE
BENEFITS CLIENTS 401K |
|
|
8515
E ORCHARD RD 2T2 |
|
|
GREENWOOD
VILLAGE CO 80111-5002 |
|
|
|
MIDCAP
(R4) |
26.00% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
MIDCAP
(R4) |
15.02% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
(R4) |
13.22% |
LINCOLN
RETIREMENT SERVICES CO |
|
|
FBO
UT SYSTEM ORP |
|
|
PO
BOX 7876 |
|
|
FORT
WAYNE IN 46801-7876 |
|
|
|
MIDCAP
(R4) |
11.25% |
JOHN
HANCOCK TRUST COMPANY LLC |
|
|
690
CANTON ST STE 100 |
|
|
WESTWOOD
MA 02090-2324 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
MIDCAP
(R5) |
22.03% |
MID
ATLANTIC TRUST COMPANY FBO |
|
|
MATC
OMNIBUS DIV REINVEST |
|
|
1251
WATERFRONT PL STE 525 |
|
|
PITTSBURGH
PA 15222-4228 |
|
|
|
MIDCAP
(R5) |
15.78% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FBO CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
MIDCAP
(R5) |
14.45% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
(R5) |
8.17% |
TIAA,
FSB CUST/TTEE FBO: |
|
|
RETIREMENT
PLANS FOR WHICH |
|
|
TIAA
ACTS AS RECORDKEEPER |
|
|
ATTN:
TRUST OPERATIONS |
|
|
211
N BROADWAY STE 1000 |
|
|
SAINT
LOUIS MO 63102-2748 |
|
|
|
MIDCAP
(R6) |
27.81% |
EDWARD
D JONES & CO |
|
|
FOR
THE BENEFIT OF CUSTOMERS |
|
|
12555
MANCHESTER RD |
|
|
SAINT
LOUIS MO 63131-3710 |
|
|
|
MIDCAP
(R6) |
16.75% |
WELLS
FARGO BANK NA FBO |
|
|
OMNIBUS
CASH XXXX0 |
|
|
PO
BOX 1533 |
|
|
MINNEAPOLIS
MN 55480-1533 |
|
|
|
MIDCAP
(R6) |
7.17% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
499
WASHINGTON BLVD |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
MIDCAP
GROWTH (I) |
16.03% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
GROWTH (I) |
14.89% |
NATIONWIDE
TRUST COMPANY FSB |
|
|
C/O
IPO PORTFOLIO ACCOUNTING |
|
|
PO
BOX 182029 |
|
|
COLUMBUS
OH 43218-2029 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
MIDCAP
GROWTH (I) |
9.04% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
MIDCAP
GROWTH (I) |
6.87% |
PIMS/PRUDENTIAL
RETIREMENT |
|
|
AS
NOMINEE FOR THE TTEE/CUST PL 007 |
|
|
PBC
MANAGEMENT LLC |
|
|
2360
5TH ST |
|
|
MANDEVILLE
LA 70471-1861 |
|
|
|
MIDCAP
GROWTH (I) |
5.77% |
RBC
CAPITAL MARKETS LLC |
|
|
MUTUAL
FUND OMNIBUS PROCESS OMNIBUS |
|
|
ATTN
MUTAL FUND OPS MANAGER |
|
|
60
SOUTH SIXTH STREET - P08 |
|
|
MINNEAPOLIS
MN 55402-4413 |
|
|
|
MIDCAP
GROWTH (R1) |
81.39% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
GROWTH (R1) |
11.89% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
ETERNAL HEALTH ACUPUNCTURE |
|
|
PC
PENSION PLAN |
|
|
1066
SARATOGA AVE #100 |
|
|
SAN
JOSE CA 95129-3432 |
|
|
|
MIDCAP
GROWTH (R3) |
25.45% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
GROWTH (R3) |
14.52% |
FIIOC |
|
|
FBO
DEFOE CORP 401K EMPLOYEE SAVINGS PLAN |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
MIDCAP
GROWTH (R3) |
14.19% |
PIMS/PRUDENTIAL
RETIREMENT |
|
|
AS
NOMINEE FOR THE TTEE/CUST PL 900 |
|
|
DEFINED
CONTRIBUTION PENSION |
|
|
23
MAIN STREET SUITE D1 |
|
|
HOLMDEL
NJ 07733-2136 |
|
|
|
MIDCAP
GROWTH (R3) |
11.41% |
PIMS/PRUDENTIAL
RETIREMENT |
|
|
AS
NOMINEE FOR THE TTEE/CUST PL 900 |
|
|
TAX
DEFERRED ANNUITY PLAN OF |
|
|
23
MAIN STREET SUITE D1 |
|
|
HOLMDEL
NJ 07733-2136 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
MIDCAP
GROWTH (R4) |
90.36% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
GROWTH (R5) |
90.96% |
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 III (I) |
54.19% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
|
FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
|
ATTN
PLIC PROXY COORDINATOR FUNDS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
GROWTH III (I) |
16.89% |
LIFETIME
2040 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
GROWTH III (I) |
11.54% |
LIFETIME
2050 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
GROWTH III (I) |
5.34% |
LIFETIME
2035 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
GROWTH III (R1) |
87.77% |
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) |
6.71% |
RELIANCE
TRUST CO TTEE |
|
|
FBO
ADP ACCESS LARGE MARKET |
|
|
401(K)
PLAN |
|
|
201
17TH ST NW STE 1000 |
|
|
ATLANTA
GA 30363-1195 |
|
|
|
MIDCAP
GROWTH III (R1) |
5.51% |
MID
ATLANTIC TRUST COMPANY |
|
|
FBO
GELLNER ENTERPRISES LLC 401K |
|
|
PROFIT
SHARING PLAN & TRUST |
|
|
1251
WATERFRONT PLACE SUITE 525 |
|
|
PITTSBURGH
PA 15222-4228 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
MIDCAP
GROWTH III (R3) |
71.75% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
GROWTH III (R3) |
5.10% |
NORSELAND
INC |
|
|
FBO
EXECUTIVE NQ PLAN OF NORSELAND INC |
|
|
ATTN
MICHAEL ALBANO |
|
|
3
PARKLANDS DR STE 203 |
|
|
DARIEN
CT 06820-3652 |
|
|
|
MIDCAP
GROWTH III (R4) |
89.51% |
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) |
91.28% |
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) |
20.62% |
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
S&P 400 INDEX (I) |
14.33% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
MIDCAP
S&P 400 INDEX (I) |
7.48% |
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) |
6.20% |
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 (R1) |
53.13% |
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 (R3) |
47.43% |
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) |
48.24% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
S&P 400 INDEX (R4) |
17.42% |
VOYA
INSTITUTIONAL TRUST COMPANY |
|
|
1
ORANGE WAY |
|
|
WINDSOR
CT 06095-4773 |
|
|
|
MIDCAP
S&P 400 INDEX (R4) |
5.24% |
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) |
58.64% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
S&P 400 INDEX (R6) |
30.56% |
DIVERSIFIED
GROWTH ACCOUNT |
|
|
ATTN
MUTUAL FUND ACCOUNTING H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
S&P 400 INDEX (R6) |
13.82% |
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) |
8.04% |
DIVERSIFIED
GROWTH VOLATILITY |
|
|
CONTROL
ACCOUNT |
|
|
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) |
6.44% |
DIVERSIFIED
BALANCED ACCOUNT |
|
|
ATTN
MUTUAL FUND ACCOUNTING H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
VALUE I (A) |
21.44% |
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 (A) |
5.14% |
RBC
CAPITAL MARKETS, LLC |
|
|
MUTUAL
FUND OMNIBUS PROCESS OMNIBUS |
|
|
ATTN
MUTAL FUND OPS MANAGER |
|
|
60
SOUTH SIXTH STREET - P08 |
|
|
MINNEAPOLIS
MN 55402-4413 |
|
|
|
MIDCAP
VALUE I (A) |
5.07% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
MIDCAP
VALUE I (I) |
64.69% |
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 (I) |
9.96% |
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
VALUE I (R1) |
94.31% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
VALUE I (R3) |
75.30% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
VALUE I (R4) |
57.18% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
MIDCAP
VALUE I (R4) |
9.65% |
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) |
9.53% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY ACCT |
|
|
FBO
CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
MIDCAP
VALUE I (R4) |
7.18% |
VRSCO |
|
|
FBO
AIGFSB CUST TTEE FBO |
|
|
SLIDELL
MEMORIAL HOSPITAL 401A |
|
|
2727-A
ALLEN PARKWAY 4-D1 |
|
|
HOUSTON
TX 77019-2107 |
|
|
|
MIDCAP
VALUE I (R5) |
74.32% |
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
VALUE I (R6) |
56.79% |
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) |
10.28% |
LIFETIME
2030 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
VALUE I (R6) |
8.68% |
LIFETIME
2040 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
MIDCAP
VALUE I (R6) |
5.93% |
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 |
OVERSEAS
(I) |
23.10% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
|
FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
|
ATTN
PLIC PROXY COORDINATOR FUNDS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
OVERSEAS
(I) |
15.13% |
LIFETIME
2030 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
OVERSEAS
(I) |
13.38% |
LIFETIME
2040 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
OVERSEAS
(I) |
12.34% |
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) |
9.11% |
LIFETIME
2050 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
OVERSEAS
(I) |
7.03% |
LIFETIME
2020 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
OVERSEAS
(R1) |
82.97% |
PRINCIPAL
GLOBAL INVESTORS LLC |
|
|
ATTN
SEAN CLINES 801-9A08 |
|
|
801
GRAND AVE |
|
|
DES
MOINES IA 50309-8000 |
|
|
|
OVERSEAS
(R1) |
17.02% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
OVERSEAS
(R3) |
65.24% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
DUPAGE INTERNAL MEDICINE LLC |
|
|
228
OXFORD AVE |
|
|
CLARENDON
HLS IL 60514-2807 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
OVERSEAS
(R3) |
14.64% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
OVERSEAS
(R3) |
10.78% |
DELAWARE
CHARTER GUAR & TRUST CO |
|
|
D/B/A
PRINCIPAL TRUST COMPANY |
|
|
EVANSTON
FIRE DEPARTMENT RETIREE |
|
|
FUNDED
HRA TRUST |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
OVERSEAS
(R3) |
7.03% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
PRO-CALIBRATION CASH BALANCE |
|
|
PENSION
PLAN |
|
|
480
HARWICH RD |
|
|
BREWSTER
MA 02631-2539 |
|
|
|
OVERSEAS
(R4) |
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 |
|
|
|
OVERSEAS
(R5) |
89.53% |
FIIOC
|
|
|
FBO
INTEGRAL AEROSPACE RETIREMENT PLAN |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
OVERSEAS
(R5) |
10.46% |
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
CAPITAL APPRECIATION (A) |
34.31% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
PRINCIPAL
CAPITAL APPRECIATION (A) |
7.07% |
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 (C) |
19.96% |
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 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
CAPITAL APPRECIATION (C) |
11.21% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
PRINCIPAL
CAPITAL APPRECIATION (C) |
6.90% |
WELLS
FARGO CLEARING SERVICES LLC |
|
|
SPECIAL
CUSTODY ACCT FOR THE |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMER |
|
|
2801
MARKET ST |
|
|
SAINT
LOUIS MO 63103-2523 |
|
|
|
PRINCIPAL
CAPITAL APPRECIATION (I) |
68.36% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
|
FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
|
ATTN
PLIC PROXY COORDINATOR FUNDS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
CAPITAL APPRECIATION (I) |
6.73% |
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
CAPITAL APPRECIATION (R1) |
90.20% |
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
CAPITAL APPRECIATION (R1) |
6.51% |
LAKEWOOD
RESOURCE & REFERRAL CENTER |
|
|
FBO
457B OF LAKEWOOD RESOURCE & REFERRAL |
|
|
ATTN
MIRIAM MILSTEIN |
|
|
1771
MADISON AVE |
|
|
LAKEWOOD
NJ 08701-1242 |
|
|
|
PRINCIPAL
CAPITAL APPRECIATION (R3) |
86.56% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
CAPITAL APPRECIATION (R4) |
90.65% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
CAPITAL APPRECIATION (R4) |
5.16% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
NQ BENEFIT FOR HCES OF MIECO |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
CAPITAL APPRECIATION (R5) |
90.19% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2010 (A) |
13.13% |
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 2010 (A) |
6.64% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
|
IRA
WILLIAM J HENNESSEY |
|
|
31
LOWER HUDSON AVE |
|
|
GREEN
ISLAND NY 12183-1014 |
|
|
|
PRINCIPAL
LIFETIME 2010 (I) |
88.41% |
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 2010 (I) |
7.23% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2010 (R1) |
99.67% |
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 2010 (R3) |
88.65% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2010 (R3) |
5.54% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
G&W ELECTRIC CO DEF COMP PLAN |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
PRINCIPAL
LIFETIME 2010 (R4) |
72.86% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2010 (R4) |
14.89% |
RANGER
PIPELINES INCORPORATED |
|
|
FBO
RANGER PIPELINES INC NQ EXCESS PLAN |
|
|
ATTN
PLAN TRUSTEE |
|
|
1790
YOSEMITE AVE |
|
|
SAN
FRANCISCO CA 94124-2622 |
|
|
|
PRINCIPAL
LIFETIME 2010 (R5) |
88.62% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2015 (I) |
87.46% |
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 2015 (I) |
10.93% |
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 2015 (R1) |
98.91% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2015 (R3) |
94.67% |
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) |
94.76% |
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 2015 (R5) |
90.39% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2020 (A) |
11.42% |
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 2020 (I) |
88.72% |
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) |
8.30% |
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 (R1) |
97.94% |
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 2020 (R3) |
93.32% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2020 (R4) |
92.81% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2020 (R5) |
87.34% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2025 (I) |
86.94% |
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) |
11.81% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2025 (R1) |
93.28% |
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) |
94.71% |
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 2025 (R4) |
90.51% |
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) |
93.85% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2030 (A) |
15.48% |
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) |
89.72% |
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) |
7.64% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2030 (R1) |
95.36% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2030 (R3) |
91.35% |
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 2030 (R4) |
88.94% |
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) |
87.53% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2035 (I) |
86.29% |
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) |
12.13% |
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 2035 (R1) |
99.53% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2035 (R3) |
96.81% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2035 (R4) |
92.69% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2035 (R5) |
94.31% |
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 2040 (A) |
11.80% |
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 |
|
|
|
PRINCIPAL
LIFETIME 2040 (I) |
88.62% |
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) |
8.64% |
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 2040 (R1) |
93.49% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2040 (R3) |
94.15% |
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 2040 (R4) |
93.42% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2040 (R5) |
90.07% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2040 (R5) |
5.43% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
EXEC 457B OF SANFORD HEALTH |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
PRINCIPAL
LIFETIME 2045 (I) |
82.62% |
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) |
16.15% |
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 2045 (R1) |
97.16% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2045 (R3) |
97.96% |
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 2045 (R4) |
96.00% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2045 (R5) |
96.59% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2050 (A) |
14.93% |
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) |
86.29% |
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) |
10.52% |
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 2050 (R1) |
96.51% |
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 (R3) |
97.27% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2050 (R4) |
93.63% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2050 (R5) |
92.69% |
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 (I) |
82.90% |
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 2055 (I) |
14.78% |
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 2055 (R1) |
94.45% |
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 2055 (R3) |
97.37% |
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 2055 (R4) |
98.68% |
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 2055 (R5) |
95.85% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2060 (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 2060 (I) |
8.64% |
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 2060 (R1) |
98.30% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME 2060 (R3) |
95.52% |
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 2060 (R4) |
96.25% |
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 2060 (R5) |
94.27% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2065 (I) |
89.31% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
PLIC PROXY COORDINATOR FUNDS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME 2065 (I) |
9.14% |
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) |
94.99% |
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 (R4) |
95.35% |
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 (R5) |
99.79% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS |
|
|
ATTN
NPIO TRADE DESK OMNIBUS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2015 (I) |
75.42% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2015 (I) |
16.80% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2015 (R6) |
85.39% |
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 2015 (R6) |
5.91% |
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 2020 (I) |
55.91% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2020 (I) |
31.99% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2020 (R6) |
87.12% |
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 2025 (I) |
64.42% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2025 (I) |
24.35% |
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 2025 (I) |
5.30% |
FIIOC |
|
|
FBO
BRADY TRANE SERVICE INC |
|
|
401K
PLAN AND TRUST |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2025 (R6) |
83.28% |
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 (R6) |
5.02% |
TIAA,
FSB CUST/TTEE FBO: |
|
|
RETIREMENT
PLANS FOR WHICH |
|
|
TIAA
ACTS AS RECORDKEEPER |
|
|
ATTN:
TRUST OPERATIONS |
|
|
211
N BROADWAY STE 1000 |
|
|
SAINT
LOUIS MO 63102-2748 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2030 (I) |
59.06% |
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 HYBRID 2030 (I) |
24.21% |
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) |
9.99% |
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 2030 (R6) |
77.29% |
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) |
9.35% |
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 2030 (R6) |
7.32% |
TIAA,
FSB CUST/TTEE FBO: |
|
|
RETIREMENT
PLANS FOR WHICH |
|
|
TIAA
ACTS AS RECORDKEEPER |
|
|
ATTN:
TRUST OPERATIONS |
|
|
211
N BROADWAY STE 1000 |
|
|
SAINT
LOUIS MO 63102-2748 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2035 (I) |
59.80% |
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 2035 (I) |
22.42% |
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) |
8.38% |
FIIOC |
|
|
FBO
BRADY TRANE SERVICE INC |
|
|
401K
PLAN AND TRUST |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2035 (R6) |
77.18% |
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 2035 (R6) |
11.44% |
TIAA,
FSB CUST/TTEE FBO: |
|
|
RETIREMENT
PLANS FOR WHICH |
|
|
TIAA
ACTS AS RECORDKEEPER |
|
|
ATTN:
TRUST OPERATIONS |
|
|
211
N BROADWAY STE 1000 |
|
|
SAINT
LOUIS MO 63102-2748 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2040 (I) |
66.36% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2040 (I) |
20.20% |
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) |
6.27% |
FIIOC |
|
|
FBO
BRADY TRANE SERVICE INC |
|
|
401K
PLAN AND TRUST |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2040 (R6) |
74.36% |
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) |
12.47% |
TIAA,
FSB CUST/TTEE FBO: |
|
|
RETIREMENT
PLANS FOR WHICH |
|
|
TIAA
ACTS AS RECORDKEEPER |
|
|
ATTN:
TRUST OPERATIONS |
|
|
211
N BROADWAY STE 1000 |
|
|
SAINT
LOUIS MO 63102-2748 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2040 (R6) |
6.04% |
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 2045 (I) |
64.79% |
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) |
22.68% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2045 (I) |
8.38% |
FIIOC |
|
|
FBO
BRADY TRANE SERVICE INC |
|
|
401K
PLAN AND TRUST |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2045 (R6) |
78.06% |
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) |
11.97% |
TIAA,
FSB CUST/TTEE FBO: |
|
|
RETIREMENT
PLANS FOR WHICH |
|
|
TIAA
ACTS AS RECORDKEEPER |
|
|
ATTN:
TRUST OPERATIONS |
|
|
211
N BROADWAY STE 1000 |
|
|
SAINT
LOUIS MO 63102-2748 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2050 (I) |
69.50% |
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) |
21.28% |
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 (R6) |
84.27% |
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 2050 (R6) |
7.98% |
TIAA,
FSB CUST/TTEE FBO: |
|
|
RETIREMENT
PLANS FOR WHICH |
|
|
TIAA
ACTS AS RECORDKEEPER |
|
|
ATTN:
TRUST OPERATIONS |
|
|
211
N BROADWAY STE 1000 |
|
|
SAINT
LOUIS MO 63102-2748 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2055 (I) |
63.59% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2055 (I) |
25.90% |
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) |
6.05% |
FIIOC |
|
|
FBO
BRADY TRANE SERVICE INC |
|
|
401K
PLAN AND TRUST |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2055 (R6) |
90.23% |
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 (R6) |
5.55% |
TIAA,
FSB CUST/TTEE FBO: |
|
|
RETIREMENT
PLANS FOR WHICH |
|
|
TIAA
ACTS AS RECORDKEEPER |
|
|
ATTN:
TRUST OPERATIONS |
|
|
211
N BROADWAY STE 1000 |
|
|
SAINT
LOUIS MO 63102-2748 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2060 (I) |
57.52% |
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 HYBRID 2060 (I) |
25.27% |
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) |
9.26% |
FIIOC |
|
|
FBO
BRADY TRANE SERVICE INC |
|
|
401K
PLAN AND TRUST |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2060 (J) |
12.52% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
|
IRA
VENER PADILLA |
|
|
475
WINTER CREEK WAY |
|
|
MORGAN
HILL CA 95037-3562 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2060 (R6) |
82.63% |
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 (R6) |
6.29% |
TIAA,
FSB CUST/TTEE FBO: |
|
|
RETIREMENT
PLANS FOR WHICH |
|
|
TIAA
ACTS AS RECORDKEEPER |
|
|
ATTN:
TRUST OPERATIONS |
|
|
211
N BROADWAY STE 1000 |
|
|
SAINT
LOUIS MO 63102-2748 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2065 (I) |
79.78% |
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) |
14.01% |
MINNESOTA
LIFE INSURANCE COMPANY |
|
|
400
ROBERT ST N STE A |
|
|
SAINT
PAUL MN 55101-2099 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2065 (J) |
11.65% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
|
IRA
MATHEW T DONOVAN |
|
|
21420
ROUTE 187 |
|
|
TOWANDA
PA 18848-7988 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2065 (J) |
9.81% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
|
IRA
ERICA K CICHOWSKI |
|
|
6816
RIDGEWOOD DR |
|
|
PAPILLION
NE 68133-2116 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2065 (J) |
9.60% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
|
IRA
TRACEY LEWIS |
|
|
157
CASABELLA DR |
|
|
SONOMA
CA 95476-3391 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2065 (J) |
7.53% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
|
IRA
AUSTIN M DOUGLASS |
|
|
9028
ROSEWALL CT |
|
|
SPRINGFIELD
VA 22152-2191 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2065 (J) |
7.27% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
|
IRA
RODNEY D ABRAHAMSON |
|
|
1606
ASH PL |
|
|
WEST
FARGO ND 58078-3417 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME HYBRID 2065 (J) |
6.18% |
PRINCIPAL
LIFE INSURANCE CO CUST |
|
|
IRA
HOLLY D SOMMERLAND |
|
|
1009
LONERGAN CIR |
|
|
SPRING
HILL TN 37174-3289 |
|
|
|
PRINCIPAL
LIFETIME HYBRID 2065 (R6) |
88.11% |
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 (R6) |
5.92% |
BANKERS
TRUST COMPANY |
|
|
FBO
PRINCIPAL ADVISOR NETWORK DEF COMP PLAN |
|
|
ATTN
PLAN TRUSTEE |
|
|
453
7TH ST |
|
|
DES
MOINES IA 50309-4110 |
|
|
|
PRINCIPAL
LIFETIME HYBRID INCOME (I) |
68.04% |
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) |
23.76% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
PRINCIPAL
LIFETIME HYBRID INCOME (R6) |
82.91% |
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) |
5.63% |
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 STRATEGIC INC (A) |
13.09% |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME STRATEGIC INC (A) |
6.31% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
PRINCIPAL
LIFETIME STRATEGIC INC (I) |
91.42% |
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 STRATEGIC INC (R1) |
99.67% |
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) |
85.41% |
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) |
80.42% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
PRINCIPAL
LIFETIME STRATEGIC INC (R4) |
6.22% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
CRST INTL NQ PLAN |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
PRINCIPAL
LIFETIME STRATEGIC INC (R5) |
74.64% |
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 STRATEGIC INC (R5) |
6.61% |
PRINCIPAL
TRUST COMPANY |
|
|
ATTN
PLAN TRUSTEE |
|
|
FBO
WORLEYPARSONS EXEC DEF PLAN |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
PRINCIPAL
LIFETIME STRATEGIC INC (R5) |
5.30% |
BANKERS
TRUST COMPANY |
|
|
FBO
EXEC DEF PLAN OF ALION SCIENCE & TECH |
|
|
ATTN
DEBBIE WILLIAMS |
|
|
453
7TH ST |
|
|
DES
MOINES IA 50309-4110 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
REAL
ESTATE SECURITIES (A) |
26.85% |
MLPF&S
FOR THE SOLE |
|
|
BENEFIT
OF ITS CUSTOMERS |
|
|
ATTN
FUND ADMINISTRATION |
|
|
4800
DEER LAKE DR EAST 3RD FL |
|
|
JACKSONVILLE
FL 32246-6484 |
|
|
|
REAL
ESTATE SECURITIES (A) |
11.70% |
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) |
6.12% |
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) |
29.30% |
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) |
16.58% |
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) |
7.11% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
REAL
ESTATE SECURITIES (C) |
5.74% |
CHARLES
SCHWAB & CO INC |
|
|
FBO
SPECIAL CUSTODY ACCOUNTS |
|
|
ATTN
MUTUAL FUNDS |
|
|
211
MAIN ST |
|
|
SAN
FRANCISCO CA 94105-1905 |
|
|
|
REAL
ESTATE SECURITIES (I) |
29.57% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
REAL
ESTATE SECURITIES (I) |
17.99% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
REAL
ESTATE SECURITIES (I) |
7.63% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FOR THE BENEFIT OF CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
REAL
ESTATE SECURITIES (I) |
7.08% |
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 (I) |
5.95% |
MLPF&S
FOR THE SOLE |
|
|
BENEFIT
OF ITS CUSTOMERS |
|
|
ATTN
FUND ADMINISTRATION |
|
|
4800
DEER LAKE DR E FL 3 |
|
|
JACKSONVILLE
FL 32246-6484 |
|
|
|
REAL
ESTATE SECURITIES (R1) |
66.46% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
REAL
ESTATE SECURITIES (R1) |
7.97% |
MG
TRUST COMPANY CUST |
|
|
FBO
LIOKAREAS CONSTRUCTION CO |
|
|
717
17TH ST STE 1300 |
|
|
DENVER
CO 80202-3304 |
|
|
|
REAL
ESTATE SECURITIES (R1) |
6.92% |
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) |
32.42% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
REAL
ESTATE SECURITIES (R3) |
17.05% |
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 |
REAL
ESTATE SECURITIES (R3) |
9.06% |
TIAA,
FSB CUST/TTEE FBO: |
|
|
RETIREMENT
PLANS FOR WHICH |
|
|
TIAA
ACTS AS RECORDKEEPER |
|
|
ATTN:
TRUST OPERATIONS |
|
|
211
N BROADWAY STE 1000 |
|
|
SAINT
LOUIS MO 63102-2748 |
|
|
|
REAL
ESTATE SECURITIES (R4) |
29.59% |
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) |
22.79% |
JOHN
HANCOCK TRUST COMPANY LLC |
|
|
690
CANTON ST STE 100 |
|
|
WESTWOOD
MA 02090-2324 |
|
|
|
REAL
ESTATE SECURITIES (R4) |
13.57% |
RELIANCE
TRUST COMPANY FBO |
|
|
MASSMUTUAL
REGISTERED PRODUCT |
|
|
PO
BOX 28004 |
|
|
ATLANTA
GA 30358-0004 |
|
|
|
REAL
ESTATE SECURITIES (R4) |
5.16% |
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) |
5.01% |
GREAT-WEST
TRUST COMPANY LLC FBO |
|
|
EMPLOYEE
BENEFITS CLIENTS 401K |
|
|
8515
E ORCHARD RD 2T2 |
|
|
GREENWOOD
VILLAGE CO 80111-5002 |
|
|
|
REAL
ESTATE SECURITIES (R5) |
43.65% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
REAL
ESTATE SECURITIES (R5) |
7.29% |
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) |
5.94% |
MATRIX
AS TTEE FBO SOUTHERN |
|
|
SHEET
METAL WORKERS 401(A) PLAN |
|
|
AGGRESSIVE
PORTFOLIO |
|
|
PO
BOX 52129 |
|
|
PHOENIX
AZ 85072-2129 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
REAL
ESTATE SECURITIES (R5) |
5.30% |
RELIANCE
TRUST COMPANY FBO |
|
|
MASSMUTUAL
REGISTERED PRODUCT |
|
|
PO
BOX 28004 |
|
|
ATLANTA
GA 30358-0004 |
|
|
|
REAL
ESTATE SECURITIES (R6) |
25.41% |
PRINCIPAL
GLOBAL INVESTORS TRUST CO |
|
|
PRINCIPAL
LIFETIME HYBRID |
|
|
COLLECTIVE
INVESTMENT FUNDS |
|
|
1300
SW 5TH AVE STE 3300 |
|
|
PORTLAND
OR 97201-5640 |
|
|
|
REAL
ESTATE SECURITIES (R6) |
21.12% |
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) |
10.67% |
WELLS
FARGO BANK NA FBO |
|
|
OMNIBUS
CASH XXXX0 |
|
|
PO
BOX 1533 |
|
|
MINNEAPOLIS
MN 55480-1533 |
|
|
|
SAM
BALANCED PORTFOLIO (A) |
18.41% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
SAM
BALANCED PORTFOLIO (A) |
12.99% |
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) |
5.74% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
SAM
BALANCED PORTFOLIO (C) |
21.84% |
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 |
SAM
BALANCED PORTFOLIO (C) |
9.43% |
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) |
7.43% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
SAM
BALANCED PORTFOLIO (I) |
83.32% |
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
BALANCED PORTFOLIO (I) |
5.15% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
BALANCED PORTFOLIO (R1) |
85.35% |
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
BALANCED PORTFOLIO (R1) |
6.17% |
STIFEL
NICOLAUS & CO INC |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMERS |
|
|
501
N BROADWAY |
|
|
SAINT
LOUIS MO 63102-2188 |
|
|
|
SAM
BALANCED PORTFOLIO (R1) |
6.03% |
MG
TRUST COMPANY CUST FBO |
|
|
PAULDING
EXEMPTED VILLAGE SC 403 B |
|
|
717
17TH ST STE 1300 |
|
|
DENVER
CO 80202-3304 |
|
|
|
SAM
BALANCED PORTFOLIO (R3) |
76.89% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SAM
BALANCED PORTFOLIO (R3) |
5.41% |
PRINCIPAL
TRUST COMPANY |
|
|
ATTN
PLAN TRUSTEE |
|
|
FBO
V K KNOWLTON DEF COMP PLAN |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
SAM
BALANCED PORTFOLIO (R4) |
65.62% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
BALANCED PORTFOLIO (R4) |
24.33% |
MATRIX
TRUST CO AS AGENT FBO |
|
|
PRO-SET
INC FINANCIAL SECURITY TRUS |
|
|
PO
BOX 52129 |
|
|
PHOENIX
AZ 85072-2129 |
|
|
|
SAM
BALANCED PORTFOLIO (R5) |
93.65% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
CONSERVATIVE BALANCED PORT (A) |
17.23% |
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) |
8.68% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
SAM
CONSERVATIVE BALANCED PORT (A) |
6.95% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
SAM
CONSERVATIVE BALANCED PORT (C) |
17.86% |
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) |
17.05% |
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) |
5.67% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
SAM
CONSERVATIVE BALANCED PORT (I) |
79.33% |
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 (I) |
6.08% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
CONSERVATIVE BALANCED PORT (R1) |
59.81% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
CONSERVATIVE BALANCED PORT (R1) |
27.50% |
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 (R1) |
9.58% |
PAI
TRUST COMPANY INC |
|
|
PARAMOUNT
CONSTRUCTION GROUP INC 40 |
|
|
1300
ENTERPRISE DRIVE |
|
|
DE
PERE WI 54115-4934 |
|
|
|
SAM
CONSERVATIVE BALANCED PORT (R3) |
70.31% |
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
CONSERVATIVE BALANCED PORT (R4) |
67.61% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
CONSERVATIVE BALANCED PORT (R4) |
26.90% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
B&G AND AFFILIATES EXEC RET PLAN |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SAM
CONSERVATIVE BALANCED PORT (R5) |
94.42% |
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
CONSERVATIVE GROWTH PORT (A) |
11.73% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
SAM
CONSERVATIVE GROWTH PORT (A) |
11.27% |
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) |
5.35% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
SAM
CONSERVATIVE GROWTH PORT (C) |
15.97% |
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) |
8.92% |
RAYMOND
JAMES |
|
|
OMNIBUS
FOR MUTUAL FUNDS |
|
|
HOUSE
ACCT FIRM 92500015 |
|
|
ATTN:
COURTNEY WALLER |
|
|
880
CARILLON PKWY |
|
|
ST
PETERSBURG FL 33716-1102 |
|
|
|
SAM
CONSERVATIVE GROWTH PORT (C) |
5.61% |
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) |
80.70% |
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 (I) |
8.62% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SAM
CONSERVATIVE GROWTH PORT (R1) |
98.20% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
CONSERVATIVE GROWTH PORT (R3) |
82.91% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
CONSERVATIVE GROWTH PORT (R4) |
85.63% |
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 GROWTH PORT (R4) |
7.95% |
KINGS
DAUGHTERS HEALTH |
|
|
FBO
KINGS DAUGHTERS HEALTH 457B |
|
|
ATTN
STEVE MEACHAM |
|
|
1373
E STATE RD 62 |
|
|
MADISON
IN 47250-7328 |
|
|
|
SAM
CONSERVATIVE GROWTH PORT (R5) |
92.73% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (A) |
25.16% |
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 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (A) |
9.08% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (C) |
24.13% |
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) |
6.76% |
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 |
SAM
FLEXIBLE INCOME PORTFOLIO (C) |
5.75% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (I) |
66.59% |
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
FLEXIBLE INCOME PORTFOLIO (I) |
7.92% |
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) |
5.88% |
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) |
5.08% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (R1) |
47.44% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
CONCORP CONCRETE INC DEFINED |
|
|
BENEFIT
PENSION PLAN |
|
|
2485
ASHCROFT AVE |
|
|
CLOVIS
CA 93611-6001 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (R1) |
27.15% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS |
|
|
OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (R1) |
22.63% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
DEV MEDICAL ASSOCIATES SC CASH |
|
|
BALANCE
PENSION PLAN |
|
|
5600
W ADDISON ST STE 400 |
|
|
CHICAGO
IL 60634-4400 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SAM
FLEXIBLE INCOME PORTFOLIO (R3) |
64.01% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (R3) |
14.30% |
EQUIPMENT
DEVELOPMENT CO INC |
|
|
ATTN
PLAN TRUSTEE |
|
|
FBO
EDCO NQ DEF COMP PLAN |
|
|
100
THOMAS JOHNSON DR |
|
|
FREDERICK
MD 21702-4600 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (R3) |
8.79% |
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) |
6.42% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
RVVS CASH BALANCE PLAN |
|
|
15900
JORDAN AVE SE |
|
|
PRIOR
LAKE MN 55372-2051 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (R4) |
37.56% |
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
FLEXIBLE INCOME PORTFOLIO (R4) |
23.69% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
EXCESS PLAN OF TURTLE & HUGHES |
|
|
ATTN
PLAN TRUSTEE INC |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (R4) |
22.17% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
SCHENECTADY PULMONARY & CRITICAL CARE |
|
|
124
ROSA RD STE 382 |
|
|
SCHENECTADY
NY 12308-2144 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (R4) |
8.96% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
BRAILSFORD & DUNLAVEY CASH BALANCE PLAN |
|
|
1140
CONNECTICUT AVE NW STE 400 |
|
|
WASHINGTON
DC 20036-4014 |
|
|
|
SAM
FLEXIBLE INCOME PORTFOLIO (R5) |
93.34% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SAM
STRATEGIC GROWTH PORTFOLIO (A) |
10.87% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
SAM
STRATEGIC GROWTH PORTFOLIO (A) |
9.99% |
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) |
15.12% |
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) |
81.70% |
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
STRATEGIC GROWTH PORTFOLIO (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 |
|
|
|
SAM
STRATEGIC GROWTH PORTFOLIO (R1) |
86.74% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
STRATEGIC GROWTH PORTFOLIO (R1) |
13.25% |
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) |
84.12% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SAM
STRATEGIC GROWTH PORTFOLIO (R3) |
7.91% |
UBS
WM USA |
|
|
0O0
11011 6100 |
|
|
OMNI
ACCOUNT M/F |
|
|
SPEC
CDY A/C EBOC UBSFSI |
|
|
1000
HARBOR BLVD |
|
|
WEEHAWKEN
NJ 07086-6761 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SAM
STRATEGIC GROWTH PORTFOLIO (R4) |
7.31% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY ACCT |
|
|
FBO
CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
SAM
STRATEGIC GROWTH PORTFOLIO (R5) |
92.23% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SHORT-TERM
INCOME (A) |
26.62% |
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) |
13.47% |
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 (A) |
8.38% |
MLPF&S
FOR THE SOLE |
|
|
BENEFIT
OF ITS CUSTOMERS |
|
|
ATTN
FUND ADMINISTRATION |
|
|
4800
DEER LAKE DR EAST 3RD FL |
|
|
JACKSONVILLE
FL 32246-6484 |
|
|
|
SHORT-TERM
INCOME (A) |
6.10% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1901 |
|
|
|
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 (C) |
11.77% |
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 |
SHORT-TERM
INCOME (C) |
5.70% |
RAYMOND
JAMES |
|
|
OMNIBUS
FOR MUTUAL FUNDS |
|
|
HOUSE
ACCT FIRM 92500015 |
|
|
ATTN:
COURTNEY WALLER |
|
|
880
CARILLON PKWY |
|
|
ST
PETERSBURG FL 33716-1102 |
|
|
|
SHORT-TERM
INCOME (I) |
24.98% |
PRINCIPAL
GLOBAL INVESTORS TRUST CO |
|
|
PRINCIPAL
LIFETIME HYBRID |
|
|
COLLECTIVE
INVESTMENT FUNDS |
|
|
1300
SW 5TH AVE STE 3300 |
|
|
PORTLAND
OR 97201-5640 |
|
|
|
SHORT-TERM
INCOME (I) |
8.89% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
|
FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
|
ATTN
PLIC PROXY COORDINATOR FUNDS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SHORT-TERM
INCOME (I) |
6.87% |
LIFETIME
2020 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SHORT-TERM
INCOME (I) |
6.77% |
SAM
FLEXIBLE INCOME PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SHORT-TERM
INCOME (I) |
5.59% |
SAM
BALANCED PORTFOLIO PIF |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SHORT-TERM
INCOME (R1) |
57.41% |
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) |
41.11% |
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) |
62.37% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SHORT-TERM
INCOME (R3) |
5.29% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
DUPAGE INTERNAL MEDICINE LLC |
|
|
228
OXFORD AVE |
|
|
CLARENDON
HLS IL 60514-2807 |
|
|
|
SHORT-TERM
INCOME (R3) |
5.21% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
SSP AMERICAN DEF COMP PLAN |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
SHORT-TERM
INCOME (R4) |
34.27% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SHORT-TERM
INCOME (R4) |
22.07% |
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) |
11.17% |
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) |
10.76% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
NQ BENEFIT FOR HCES OF MIECO |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
SHORT-TERM
INCOME (R4) |
5.58% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
LESLIE GABER ASSOC INC |
|
|
CASH
BALANCE PLAN |
|
|
24
HILLCREST DR |
|
|
COLTS
NECK NJ 07722-2227 |
|
|
|
SHORT-TERM
INCOME (R5) |
23.80% |
WACHOVIA
BANK NATIONAL ASSOCIATION |
|
|
FBO
DEF COMP PLAN OF CED INC (PS |
|
|
ATTN
SHELLEY ANDERSON DEF |
|
|
ONE
WEST FOURTH STREET |
|
|
WINSTON-SALEM
NC 27101-3818 |
|
|
|
SHORT-TERM
INCOME (R5) |
21.63% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SHORT-TERM
INCOME (R5) |
17.93% |
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) |
10.64% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
FAIRMONT-SCOTTSDALE NQ PLAN |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE RD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
SHORT-TERM
INCOME (R5) |
5.87% |
PRINCIPAL
TRUST COMPANY |
|
|
FBO
GUEST SERVICES EMPLOYEE SAVINGS PLAN |
|
|
ATTN
SUSAN SAGGIONE |
|
|
1013
CENTRE ROAD |
|
|
WILMINGTON
DE 19805-1265 |
|
|
|
SMALLCAP
(A) |
13.22% |
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) |
6.85% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
SMALLCAP
(C) |
24.26% |
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
(C) |
10.92% |
WELLS
FARGO CLEARING SERVICES LLC |
|
|
SPECIAL
CUSTODY ACCT FOR THE |
|
|
EXCLUSIVE
BENEFIT OF CUSTOMER |
|
|
2801
MARKET ST |
|
|
SAINT
LOUIS MO 63103-2523 |
|
|
|
SMALLCAP
(I) |
23.54% |
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 |
SMALLCAP
(I) |
12.37% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY ACCT |
|
|
FBO
CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
SMALLCAP
(I) |
11.19% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
|
FBO
#41999970 |
|
|
707
2ND AVE S |
|
|
MINNEAPOLIS
MN 55402-2405 |
|
|
|
SMALLCAP
(I) |
10.46% |
RAYMOND
JAMES |
|
|
OMNIBUS
FOR MUTUAL FUNDS |
|
|
HOUSE
ACCT FIRM 92500015 |
|
|
ATTN:
COURTNEY WALLER |
|
|
880
CARILLON PKWY |
|
|
ST
PETERSBURG FL 33716-1102 |
|
|
|
SMALLCAP
(I) |
6.92% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
SMALLCAP
(I) |
5.37% |
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
(I) |
5.05% |
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) |
60.07% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
(R1) |
23.50% |
FIIOC |
|
|
FBO
VRMC OF NEW YORK 401K PLAN |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
SMALLCAP
(R1) |
7.75% |
ASCENSUS
TRUST COMPANY |
|
|
FBO
THE MOVEMENT SCIENCE CENTER |
|
|
401K
2 # 2409 |
|
|
PO
BOX 10758 |
|
|
FARGO
ND 58106-0758 |
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SMALLCAP
(R3) |
25.52% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
(R3) |
8.15% |
FIDELITY
INVESTMENTS INST OPER CO INC |
|
|
FBO
U S FACILITIES INC 401K RETIREMENT PLAN |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1999 |
|
|
|
SMALLCAP
(R4) |
93.72% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
499
WASHINGTON BLVD |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
SMALLCAP
(R5) |
71.18% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
499
WASHINGTON BLVD |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
SMALLCAP
(R5) |
13.22% |
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
(R6) |
37.94% |
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) |
20.84% |
WELLS
FARGO BANK FBO |
|
|
VARIOUS
RETIREMENT PLANS 9888888836 |
|
|
1525
WEST WT HARRIS BLVD |
|
|
CHARLOTTE
NC 28288-1076 |
|
|
|
SMALLCAP
(R6) |
12.46% |
MAC
& CO A/C 298116 |
|
|
ATTN
MUTUAL FUND OPERATIONS |
|
|
500
GRANT STREET ROOM 151-1010 |
|
|
PITTSBURGH
PA 15219-2502 |
|
|
|
SMALLCAP
(R6) |
10.14% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
499
WASHINGTON BLVD |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
SMALLCAP
(R6) |
6.87% |
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 |
SMALLCAP
GROWTH I (I) |
30.88% |
CHARLES
SCHWAB & CO INC |
|
|
SPECIAL
CUSTODY A/C FOR THE |
|
|
BENEFIT
OF CUSTOMERS |
|
|
ATTN
MUTUAL FUNDS |
|
|
101
MONTGOMERY ST |
|
|
SAN
FRANCISCO CA 94104-4151 |
|
|
|
SMALLCAP
GROWTH I (I) |
18.70% |
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) |
13.42% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
GROWTH I (I) |
11.91% |
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 (R1) |
94.62% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
GROWTH I (R3) |
67.31% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
GROWTH I (R4) |
38.94% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
GROWTH I (R4) |
16.91% |
JOHN
HANCOCK TRUST COMPANY LLC |
|
|
690
CANTON ST STE 100 |
|
|
WESTWOOD
MA 02090-2324 |
|
|
|
SMALLCAP
GROWTH I (R4) |
13.49% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
499
WASHINGTON BLVD |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SMALLCAP
GROWTH I (R4) |
6.89% |
LINCOLN
RETIREMENT SERVICES COMPANY |
|
|
FBO
SCHOOL BD OF RICHMOND 403B |
|
|
PO
BOX 7876 |
|
|
FORT
WAYNE IN 46801-7876 |
|
|
|
SMALLCAP
GROWTH I (R5) |
61.38% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
GROWTH I (R5) |
6.38% |
RELIANCE
TRUST COMPANY TRUSTEE |
|
|
FBO
RITE SOLUTIONS SAVINGS & INVEST |
|
|
185
S BROAD ST STE 303 |
|
|
PAWCATUCK
CT 06379-1997 |
|
|
|
SMALLCAP
GROWTH I (R5) |
5.71% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
499
WASHINGTON BLVD |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
SMALLCAP
GROWTH I (R6) |
62.98% |
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) |
7.16% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
499
WASHINGTON BLVD |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
SMALLCAP
S&P 600 INDEX (I) |
19.19% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
S&P 600 INDEX (I) |
10.52% |
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) |
7.93% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
|
|
|
SMALLCAP
S&P 600 INDEX (I) |
7.82% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SMALLCAP
S&P 600 INDEX (I) |
6.20% |
JOHN
HANCOCK TRUST COMPANY LLC |
|
|
690
CANTON ST STE 100 |
|
|
WESTWOOD
MA 02090-2324 |
|
|
|
SMALLCAP
S&P 600 INDEX (R1) |
35.28% |
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) |
5.06% |
FIIOC |
|
|
FBO
SKIN CANCER SPECIALISTS PC 401K PLAN |
|
|
100
MAGELLAN WAY (KW1C) |
|
|
COVINGTON
KY 41015-1987 |
|
|
|
SMALLCAP
S&P 600 INDEX (R3) |
39.70% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
S&P 600 INDEX (R3) |
8.83% |
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 (R4) |
53.56% |
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
S&P 600 INDEX (R4) |
6.71% |
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 (R5) |
62.12% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
S&P 600 INDEX (R6) |
33.52% |
DIVERSIFIED
GROWTH ACCOUNT |
|
|
ATTN
MUTUAL FUND ACCOUNTING H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SMALLCAP
S&P 600 INDEX (R6) |
17.75% |
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) |
8.82% |
DIVERSIFIED
GROWTH VOLATILITY |
|
|
CONTROL
ACCOUNT |
|
|
ATTN
MUTUAL FUND ACCOUNTING H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
S&P 600 INDEX (R6) |
7.06% |
DIVERSIFIED
BALANCED ACCOUNT |
|
|
ATTN
MUTUAL FUND ACCOUNTING H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
VALUE II (I) |
42.10% |
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) |
16.42% |
PIMS/PRUDENTIAL
RETIREMENT |
|
|
AS
NOMINEE FOR THE TTEE/CUST PL 763 |
|
|
ESSILOR
OF AMERICA RETIREMENT |
|
|
13555
N STEMMONS FWY |
|
|
DALLAS
TX 75234-5765 |
|
|
|
SMALLCAP
VALUE II (I) |
12.32% |
PIMS/PRUDENTIAL
RETIREMENT |
|
|
AS
NOMINEE FOR THE TTEE/CUST PL 767 |
|
|
BT
U.S. RETIREMENT SAVINGS PLAN |
|
|
8951
CYPRESS WATERS BLVD STE 200 |
|
|
DALLAS
TX 75019-4763 |
|
|
|
SMALLCAP
VALUE II (I) |
9.08% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
VALUE II (I) |
5.43% |
GREAT-WEST
TRUST COMPANY LLC FBO |
|
|
EMPLOYEE
BENEFITS CLIENTS 401K |
|
|
8515
E ORCHARD RD 2T2 |
|
|
GREENWOOD
VILLAGE CO 80111-5002 |
|
|
|
SMALLCAP
VALUE II (R1) |
90.62% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
SMALLCAP
VALUE II (R1) |
9.33% |
RELIANCE
TRUST CO TTEE |
|
|
FBO
ADP ACCESS LARGE MARKET |
|
|
401(K)
PLAN |
|
|
201
17TH ST NW STE 1000 |
|
|
ATLANTA
GA 30363-1195 |
|
|
|
SMALLCAP
VALUE II (R3) |
75.67% |
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) |
5.00% |
RELIANCE
TRUST CO CUST |
|
|
FBO
ADP ACCESS LARGE MARKET |
|
|
401(K)
PLAN |
|
|
201
17TH ST NW STE 1000 |
|
|
ATLANTA
GA 30363-1195 |
|
|
|
SMALLCAP
VALUE II (R4) |
82.56% |
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
VALUE II (R4) |
10.40% |
GREAT-WEST
TRUST COMPANY LLC FBO |
|
|
EMPLOYEE
BENEFITS CLIENTS 401K |
|
|
8515
E ORCHARD RD 2T2 |
|
|
GREENWOOD
VILLAGE CO 80111-5002 |
|
|
|
SMALLCAP
VALUE II (R5) |
89.31% |
DCGT
AS TTEE AND/OR CUST |
|
|
FBO
PLIC VARIOUS RETIREMENT PLANS OMNIBUS |
|
|
ATTN
NPIO TRADE DESK |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
VALUE II (R6) |
50.57% |
PRINCIPAL
LIFE INS COMPANY CUST |
|
|
FBO
PFG OMNIBUS WRAPPED AND CUSTOM |
|
|
ATTN
PLIC PROXY COORDINATOR FUNDS |
|
|
711
HIGH STREET |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
VALUE II (R6) |
11.30% |
LIFETIME
2030 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING- H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
VALUE II (R6) |
9.55% |
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) |
6.52% |
LIFETIME
2050 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
SMALLCAP
VALUE II (R6) |
5.20% |
LIFETIME
2020 FUND |
|
|
ATTN
MUTUAL FUND ACCOUNTING-H221 |
|
|
711
HIGH ST |
|
|
DES
MOINES IA 50392-0001 |
|
|
|
TAX-EXEMPT
BOND (A) |
23.96% |
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) |
12.25% |
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) |
7.56% |
J.
P. MORGAN SECURITIES LLC |
|
|
FBO
EXCLUSIVE BENEFIT OF OUR CUST |
|
|
4
CHASE METROTECH CTR |
|
|
BROOKLYN
NY 11245-0003 |
|
|
|
TAX-EXEMPT
BOND (A) |
5.57% |
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 (A) |
5.47% |
MLPF&S
FOR THE SOLE |
|
|
BENEFIT
OF ITS CUSTOMERS |
|
|
ATTN
FUND ADMINISTRATION |
|
|
4800
DEER LAKE DR E FL 3 |
|
|
JACKSONVILLE
FL 32246-6484 |
|
|
|
TAX-EXEMPT
BOND (C) |
34.81% |
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) |
7.89% |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
TAX-EXEMPT
BOND (C) |
7.87% |
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) |
7.65% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
|
FBO
#41999970 |
|
|
707
2ND AVE S |
|
|
MINNEAPOLIS
MN 55402-2405 |
|
|
|
TAX-EXEMPT
BOND (C) |
7.40% |
MORGAN
STANLEY SMITH BARNEY LLC |
|
|
FOR
THE EXCLUSIVE BENE OF ITS CUST |
|
|
1
NEW YORK PLZ FL 12 |
|
|
NEW
YORK NY 10004-1901 |
|
|
|
TAX-EXEMPT
BOND (C) |
6.85% |
MLPF&S
FOR THE SOLE |
|
|
BENEFIT
OF ITS CUSTOMERS |
|
|
ATTN
FUND ADMINISTRATION |
|
|
4800
DEER LAKE DR E FL 3 |
|
|
JACKSONVILLE
FL 32246-6484 |
|
|
|
TAX-EXEMPT
BOND (I) |
21.08% |
NATIONAL
FINANCIAL SERVICES LLC |
|
|
FOR
EXCLUSIVE BENEFIT OF OUR CUSTOMERS |
|
|
499
WASHINGTON BLVD |
|
|
ATTN
MUTUAL FUNDS DEPT 4TH FL |
|
|
JERSEY
CITY NJ 07310-1995 |
|
|
|
TAX-EXEMPT
BOND (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 |
|
|
|
TAX-EXEMPT
BOND (I) |
12.47% |
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) |
11.52% |
PERSHING
LLC |
|
|
1
PERSHING PLZ |
|
|
JERSEY
CITY NJ 07399-0001 |
|
|
|
TAX-EXEMPT
BOND (I) |
10.30% |
AMERICAN
ENTERPRISE INVESTMENT SVC |
|
|
FBO
#41999970 |
|
|
707
2ND AVE S |
|
|
MINNEAPOLIS
MN 55402-2405 |
|
|
|
|
|
|
|
|
|
|
|
|
Fund/Class |
Percent of Ownership |
Name
and Address of Owner |
TAX-EXEMPT
BOND (I) |
7.12% |
MLPF&S
FOR THE SOLE |
|
|
BENEFIT
OF ITS CUSTOMERS |
|
|
ATTN
FUND ADMINISTRATION |
|
|
4800
DEER LAKE DR E FL 2 |
|
|
JACKSONVILLE
FL 32246-6484 |
|
|
|
TAX-EXEMPT
BOND (I) |
6.53% |
LPL
FINANCIAL |
|
|
OMNIBUS
CUSTOMER ACCOUNT |
|
|
ATTN
MUTUAL FUND TRADING |
|
|
4707
EXECUTIVE DR |
|
|
SAN
DIEGO CA 92121-3091 |
Management
Ownership
As
of February 4, 2021, the Officers and Directors of the Fund 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 which 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 Principal Global Investors, LLC'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, 2020, unless otherwise noted.
Advisor:
Principal Global Investors, LLC (Columbus Circle 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 |
Christopher
T. Corbett:
MidCap Growth Fund |
|
|
|
|
Registered
investment companies |
3 |
$588.6
million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$29.8
million |
0 |
$0 |
Other
accounts |
27 |
$1.5
billion |
0 |
$0 |
Michael
Iacono: MidCap
Growth Fund |
Registered
investment companies |
3 |
$588.6
million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$29.8
million |
0 |
$0 |
Other
accounts |
27 |
$1.5
billion |
0 |
$0 |
Marc
R. Shapiro: MidCap
Growth Fund |
|
|
|
|
Registered
investment companies |
3 |
$588.6
million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$29.8
million |
0 |
$0 |
Other
accounts |
27 |
$1.5
billion |
0 |
$0 |
Compensation
Compensation
for equity investment professionals at all levels and across all strategies 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. Variable compensation takes the form of
a profit share plan with funding based on operating earnings generated by the
Columbus Circle Investors team. The plan is designed to provide line-of-sight to
investment professionals, enabling them to share in current and future business
growth while reinforcing delivery of investment performance, collaboration,
regulatory compliance, client retention and client satisfaction.
The
variable component is well aligned with client goals and objectives, with the
largest determinant being pre-tax investment performance relative to appropriate
client benchmarks and peer groups. Relative performance metrics are measured
over rolling one-year, three-year and five-year periods, calculated quarterly.
Weightings intentionally place a greater emphasis on three and five year
results, reinforcing a longer term orientation. In addition to investment
performance, other discretionary factors such as team and individual results
also contribute to the quantum of incentive compensation. The structure is
uniformly applied among all investment professionals, including portfolio
managers, research analysts, traders and team leaders.
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. Sixty percent of total
deferred compensation is required to be invested into equity funds managed by
the team, via a co-investment program, with the remaining forty percent in the
form of restricted stock of Principal Financial Group. All deferred compensation
agreements are subject to a minimum three year vesting schedule.
The
benefits of this incentive structure are threefold. First, the emphasis on
investment performance as the largest driver of variable compensation allocation
provides strong alignment of interests with client objectives. Second, the
discretionary element is intended to balance the allocation of the funded profit
pool and rewards individual and team contributions that deliver on longer term
business strategies including asset retention and growth, firm wide
collaboration and team development. Third, 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.
Ownership
of Securities
|
|
|
|
|
|
|
|
|
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Christopher
T. Corbett |
MidCap
Growth |
$50,001
- $100,000 |
Michael
Iacono |
MidCap
Growth |
$100,001
- $500,000 |
Marc
R. Shapiro |
MidCap
Growth |
$100,001
- $500,000 |
Advisor:
Principal Global Investors, LLC (Edge Asset Management 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 |
12 |
$3.6
billion |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$116.4
million |
0 |
$0 |
Other
accounts |
38 |
$2.8
billion |
0 |
$0 |
Theodore
Jayne: Principal
Capital Appreciation Fund |
Registered
investment companies |
4 |
$1.0
billion |
0 |
$0 |
Other
pooled investment vehicles |
0 |
$0 |
0 |
$0 |
Other
accounts |
9 |
$588.8
million |
0 |
$0 |
Sarah
E. Radecki (1):
Equity
Income Fund |
Registered
investment companies |
2 |
$1.6
billion |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$68.3
million |
0 |
$0 |
Other
accounts |
22 |
$2.4
billion |
0 |
$0 |
Nedret
Vidinli: Equity
Income Fund |
Registered
investment companies |
3 |
$757.7
million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$56.7
million |
0 |
$0 |
Other
accounts |
6 |
$71.7
million |
0 |
$0 |
(1)
Information as of November 30, 2020
Compensation
Principal
Global Investors, LLC offers investment professionals 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 investment professionals at all levels 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 are delivered in the form of cash or a
combination of cash and deferred compensation. The amount of incentive 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
Principal 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’s employee stock purchase plan, retirement plans and direct personal
investments. It should be noted that the Company’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 |
$100,001
- $500,000 |
Theodore
Jayne |
Principal
Capital Appreciation |
$100,001
- $500,000 |
Sarah
E. Radecki (1) |
Equity
Income |
$500,001
- $1,000,000 |
Nedret
Vidinli |
Equity
Income |
$100,001
- $500,000 |
(1)
Information as of December 31, 2020
Advisor:
Principal Global Investors, LLC (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 |
1 |
$127.7
million |
0 |
$0 |
Other
Pooled Investment Vehicles |
0 |
$0 |
0 |
$0 |
Other
accounts |
3 |
$1.2
billion |
0 |
$0 |
|
|
|
|
|
Arthur
Duchon-Doris: Finisterre
Emerging Markets Total Return Bond Fund |
Registered
Investment Companies |
1 |
$127.7
million |
0 |
$0 |
Other
Pooled Investment Vehicles |
0 |
$0 |
0 |
$0 |
Other
accounts |
3 |
$1.2
billion |
0 |
$0 |
|
|
|
|
|
Christopher
Watson: Finisterre
Emerging Markets Total Return Bond Fund |
Registered
Investment Companies |
1 |
$127.7
million |
0 |
$0 |
Other
Pooled Investment Vehicles |
0 |
$0 |
0 |
$0 |
Other
accounts |
3 |
$1.2
billion |
0 |
$0 |
Compensation
Principal
Global Investors, LLC offers investment professionals 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 investment professionals at all levels 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. Relative
performance metrics are measured on a pre-tax basis over rolling one-year,
three-year and five-year periods, calculated quarterly, reinforcing a longer
term orientation.
Payments
under the variable incentive plan are delivered in the form of cash or a
combination of cash and deferred compensation. The amount of incentive 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 |
Arthur
Duchon-Doris |
Finisterre
Emerging Markets Total Return Bond |
None |
Christopher
Watson |
Finisterre
Emerging Markets Total Return Bond |
None |
Advisor:
Principal Global Investors, LLC (Equity 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 and International Emerging Markets Funds |
Registered
investment companies |
4 |
$620.9
million |
0 |
$0 |
Other
pooled investment vehicles |
5 |
$3.8
billion |
0 |
$0 |
Other
accounts |
11 |
$1.4
billion |
1 |
$252.6
million |
Juliet
Cohn: Diversified
International Fund |
Registered
investment companies |
3 |
$539.8
million |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$3.6
billion |
0 |
$0 |
Other
accounts |
9 |
$1.2
billion |
1 |
$252.6
million |
Jeffrey
Kilkenny: International
Emerging Markets Fund |
Registered
investment companies |
1 |
$81.2
million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$275.8
million |
0 |
$0 |
Other
accounts |
2 |
$264.7
million |
0 |
$0 |
K.
William Nolin: MidCap
Fund |
Registered
investment companies |
3 |
$8.7
billion |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$2.6
billion |
0 |
$0 |
Other
accounts |
53 |
$7.7
billion |
0 |
$0 |
Phil
Nordhus: SmallCap
Fund |
Registered
investment companies |
7 |
$359.7
million |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$606.7
million |
0 |
$0 |
Other
accounts |
14 |
$908.1
million |
0 |
$0 |
Brian
W. Pattinson: SmallCap
Fund |
Registered
investment companies |
9 |
$1.4
billion |
0 |
$0 |
Other
pooled investment vehicles |
3 |
$2.8
billion |
0 |
$0 |
Other
accounts |
31 |
$3.1
billion |
1 |
$158.9
million |
Tom
Rozycki: MidCap
Fund |
Registered
investment companies |
3 |
$8.7
billion |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$2.6
billion |
0 |
$0 |
Other
accounts |
53 |
$7.7
billion |
0 |
$0 |
Jeffrey
A. Schwarte: LargeCap
S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600
Index Funds |
Registered
investment companies |
30 |
$10.4
billion |
0 |
$0 |
Other
pooled investment vehicles |
7 |
$35.3
billion |
0 |
$0 |
Other
accounts |
9 |
$56.5
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 |
27 |
$9.6
billion |
0 |
$0 |
Other
pooled investment vehicles |
6 |
$35.3
billion |
0 |
$0 |
Other
accounts |
6 |
$19.4
million |
0 |
$0 |
Alan
Wang: International
Emerging Markets Fund |
Registered
investment companies |
7 |
$3.5
billion |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$275.8
million |
0 |
$0 |
Other
accounts |
9 |
$2.1
billion |
1 |
$254.6
million |
Compensation
Principal
Global Investors, LLC offers investment professionals 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 investment professionals at all levels 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 pretax 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 are delivered in the form of cash or a
combination of cash and deferred compensation. The amount of incentive 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
Principal 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’s employee stock purchase plan, retirement plans and direct personal
investments. It should be noted that the Company’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 |
Paul
H. Blankenhagen |
International
Emerging Markets |
None |
Juliet
Cohn |
Diversified
International |
$500,001
- $1,000,000 |
Jeffrey
Kilkenny |
International
Emerging Markets |
$50,001
- $100,000 |
K.
William Nolin |
MidCap |
over
$1,000,000 |
Phil
Nordhus |
SmallCap |
over
$1,000,000 |
Brian
Pattinson |
SmallCap |
over
$1,000,000 |
Tom
Rozycki |
MidCap |
over
$1,000,000 |
Jeffrey
A. Schwarte |
LargeCap
S&P 500 Index |
$1
- $10,000 |
Jeffrey
A. Schwarte |
MidCap
S&P 400 Index |
None |
Jeffrey
A. Schwarte |
SmallCap
S&P 600 Index |
$1
- $10,000 |
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 |
Alan
Wang |
International
Emerging Markets |
$100,001
- $500,000 |
Advisor:
Principal Global Investors, LLC (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 |
2 |
$612.2
million |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$3.5
billion |
0 |
$0 |
Other
accounts |
6 |
$2.1
billion |
2 |
$1.2
billion |
Bryan
C. Davis: Government
& High Quality Bond Fund |
Registered
investment companies |
17 |
$3.4
billion |
0 |
$0 |
Other
pooled investment vehicles |
18 |
$6.6
billion |
0 |
$0 |
Other
accounts |
30 |
$3.4
billion |
7 |
$483.5
million |
Mark
P. Denkinger: High
Yield Fund |
Registered
investment companies |
7 |
$214.7
million |
0 |
$0 |
Other
pooled investment vehicles |
8 |
$650.0
million |
0 |
$0 |
Other
accounts |
41 |
$5.5
billion |
2 |
$131.8
million |
John
R. Friedl: Core
Fixed Income and Short-Term Income Funds |
Registered
investment companies |
6 |
$382.6
million |
0 |
$0 |
Other
pooled investment vehicles |
3 |
$285.9
million |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
Zach
Gassmann: Government
& High Quality Bond Fund |
Registered
investment companies |
11 |
$2.1
billion |
0 |
$0 |
Other
pooled investment vehicles |
8 |
$1.4
billion |
0 |
$0 |
Other
accounts |
17 |
$2.6
billion |
4 |
$286.1
million |
Erika
Isley: Government
Money Market and Money Market Funds |
Registered
investment companies |
3 |
$1.8
million |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$1.4
billion |
0 |
$0 |
Other
accounts |
7 |
$487.1
million |
2 |
$39.6
million |
James
Noble: California
Municipal and Tax-Exempt Bond Funds |
Registered
investment companies |
2 |
$152.5
million |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$141.7
million |
0 |
$0 |
Other
accounts |
7 |
$820.1
million |
0 |
$0 |
Scott
J. Peterson: Core
Fixed
Income
and Short-Term Income Funds |
Registered
investment companies |
6 |
$382.6
million |
0 |
$0 |
Other
pooled investment vehicles |
3 |
$285.9
million |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
Josh
Rank: High
Yield Fund |
Registered
investment companies |
7 |
$214.7
million |
0 |
$0 |
Other
pooled investment vehicles |
8 |
$650.0
million |
0 |
$0 |
Other
accounts |
41 |
$5.5
billion |
2 |
$131.8
million |
Tracy
Reeg: Government
Money Market and Money Market Funds |
Registered
investment companies |
0 |
$0 |
|
0 |
$0 |
Other
pooled investment vehicles |
1 |
$1.4
billion |
0 |
$0 |
Other
accounts |
1 |
$30.0
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 |
$214.7
million |
0 |
$0 |
Other
pooled investment vehicles |
8 |
$650.0
million |
0 |
$0 |
Other
accounts |
41 |
$5.5
billion |
2 |
$131.8
million |
James
Welch: California
Municipal and Tax-Exempt Bond Funds |
Registered
investment companies |
2 |
$152.5
million |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$141.7
million |
0 |
$0 |
Other
accounts |
7 |
$820.1
million |
0 |
$0 |
|
|
|
|
|
Randy
R. Woodbury: Core
Plus Bond Fund |
Registered
investment companies |
11 |
$6.9
billion |
0 |
$0 |
Other
pooled investment vehicles |
10 |
$16.9
billion |
0 |
$0 |
Other
accounts |
14 |
$4.2
billion |
3 |
$1.6
billion |
Compensation
Principal
Global Investors offers investment professionals 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 fixed income investment professionals at all levels 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. Variable compensation takes the form of a profit share
plan with funding based on a percentage of pre-tax, pre-bonus operating earnings
of Principal Global Fixed Income. The plan is designed to provide line-of-sight
to investment professionals, enabling them to share in current and future
business growth while reinforcing delivery of investment performance,
collaboration, regulatory compliance, operational excellence, client retention
and client satisfaction.
The
variable component is well aligned with client goals and objectives, with the
largest determinant being investment performance relative to appropriate client
benchmarks and peer groups. Relative performance metrics are measured over
rolling one-year, three-year and five-year periods, calculated quarterly,
reinforcing a longer term orientation. In addition to investment performance,
other discretionary factors such as team and individual results also contribute
to the quantum of incentive compensation. Discretionary compensation metrics are
specifically aligned with the results of the Fixed Income group. The structure
is uniformly applied among all investment professionals, including portfolio
managers, research analysts, traders and team leaders.
Payments
under the variable incentive plan are delivered in the form of cash or a
combination of cash and deferred compensation. The amount of incentive 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
Principal stakeholders, and talent retention.
In
addition to deferred compensation obtained through their compensation
programming, all senior team members have substantial investments in funds
managed by the group, including deferred compensation, retirement plans and
direct personal investments. It should be noted that the Company’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 |
$100,001
- $500,000 |
Bryan
C. Davis |
Government
& High Quality Bond |
$500,001
- $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 |
$50,001
- $100,000 |
Erika
Isley |
Government
Money Market |
None |
Erika
Isley |
Money
Market |
None |
James
Noble |
California
Municipal |
$1
- $10,000 |
James
Noble |
Tax-Exempt
Bond |
$50,001
- $100,000 |
Scott
J. Peterson |
Core
Fixed Income |
$10,001
- $50,000 |
Scott
J. Peterson |
Short-Term
Income |
over
$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 |
None |
James
Welch |
Tax-Exempt
Bond |
$100,001
- $500,000 |
Randy
R. Woodbury |
Core
Plus Bond |
$100,001
- $500,000 |
Advisor:
Principal Global Investors, LLC (Principal®
Global 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: Global
Diversified Income Fund |
Registered
investment companies |
3 |
$7.8
billion |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$2.6
billion |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
Marcus
W. Dummer: Global
Diversified Income Fund |
Registered
investment companies |
3 |
$7.8
billion |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$2.6
billion |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
James
W. Fennessey: High
Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap
Value I; Overseas; Principal LifeTime Strategic Income, 2010, 2015, 2020,
2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060 and 2065; Principal
LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050,
2055, 2060 and 2065; SmallCap Growth I; and SmallCap Value II
Funds |
Registered
investment companies |
7 |
$1.7
billion |
0 |
$0 |
Other
pooled investment vehicles |
26 |
$42.8
billion |
0 |
$0 |
Other
accounts |
25 |
$4.3
billion |
0 |
$0 |
Kelly
Grossman: Global
Diversified Income Fund |
Registered
investment companies |
2 |
$7.6
billion |
0 |
$0 |
Other
pooled investment vehicles |
1 |
$2.6
billion |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
Todd
A. Jablonski: SAM
Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible
Income and
SAM
Strategic Growth Portfolios |
Registered
investment companies |
7 |
$2.4
billion |
0 |
$0 |
Other
pooled investment vehicles |
0 |
$0 |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
Benjamin
E. Rotenberg: Global
Diversified Income Fund |
Registered
investment companies |
3 |
$7.8
billion |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$2.6
billion |
0 |
$0 |
Other
accounts |
0 |
$0 |
0 |
$0 |
|
|
|
|
|
Scott
Smith: Principal
LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045,
2050, 2055, 2060 and 2065; and Principal LifeTime Hybrid Income, 2015,
2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060 and 2065
Funds |
Registered
investment companies |
14 |
$6.7
billion |
0 |
$0 |
Other
pooled investment vehicles |
26 |
$42.8
billion |
0 |
$0 |
Other
accounts |
28 |
$4.6
billion |
0 |
$0 |
Gregory
L. Tornga: SAM
Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible
Income and
SAM
Strategic Growth Portfolios |
Registered
investment companies |
7 |
$2.4
billion |
0 |
$0 |
Other
pooled investment vehicles |
0 |
$0 |
0 |
$0 |
Other
accounts |
3 |
$32.5
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 |
Randy
L. Welch: High
Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap
Value I; Overseas; Principal LifeTime Strategic Income, 2010, 2015, 2020,
2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060 and 2065; Principal
LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050,
2055, 2060 and 2065; SmallCap Growth I; and
SmallCap
Value II Funds |
Registered
investment companies |
8 |
$1.7
billion |
0 |
$0 |
Other
pooled investment vehicles |
26 |
$42.8
billion |
0 |
$0 |
Other
accounts |
25 |
$4.3
billion |
0 |
$0 |
Compensation
Principal
Global Investors, LLC ("PGI") offers investment professionals 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 all team members 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 are delivered in the form of cash or a
combination of cash and deferred compensation. The amount of incentive 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
Principal 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’s employee stock purchase plan, retirement plans, and direct personal
investments. It should be noted that the Company’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 |
Global
Diversified Income |
$100,001
- $500,000 |
Marcus
W. Dummer |
Global
Diversified Income |
$100,001
- $500,000 |
James
W. Fennessey |
High
Income |
None |
James
W. Fennessey |
LargeCap
Growth I |
$50,001
- $100,000 |
James
W. Fennessey |
LargeCap
Value III |
None |
James
W. Fennessey |
MidCap
Growth III |
None |
James
W. Fennessey |
MidCap
Value I |
None |
James
W. Fennessey |
Overseas |
None |
James
W. Fennessey |
Principal
LifeTime Strategic Income |
None |
James
W. Fennessey |
Principal
LifeTime 2010 |
None |
James
W. Fennessey |
Principal
LifeTime 2015 |
None |
James
W. Fennessey |
Principal
LifeTime 2020 |
None |
|
|
|
|
|
|
|
|
|
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
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 Hybrid Income |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2015 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2020 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2025 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2030 |
$10,001
- $50,000 |
James
W. Fennessey |
Principal
LifeTime Hybrid 2035 |
None |
James
W. Fennessey |
Principal
LifeTime Hybrid 2040 |
$50,001
- $100,000 |
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 |
SmallCap
Growth I |
$50,001
- $100,000 |
James
W. Fennessey |
SmallCap
Value II |
$50,001
- $100,000 |
Kelly
Grossman |
Global
Diversified Income |
$10,001
- $50,000 |
Todd
A. Jablonski |
SAM
Balanced |
over
$1,000,000 |
Todd
A. Jablonski |
SAM
Conservative Balanced |
None |
Todd
A. Jablonski |
SAM
Conservative Growth |
$100,001
- $500,000 |
Todd
A. Jablonski |
SAM
Flexible Income |
$10,001
- $50,000 |
Todd
A. Jablonski |
SAM
Strategic Growth |
$50,001
- $100,000 |
Benjamin
E. Rotenberg |
Global
Diversified Income |
$100,001
- $500,000 |
Scott
Smith |
Principal
LifeTime Strategic Income |
None |
Scott
Smith |
Principal
LifeTime 2010 |
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 Hybrid Income |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2015 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2020 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2025 |
None |
|
|
|
|
|
|
|
|
|
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Scott
Smith |
Principal
LifeTime Hybrid 2030 |
$10,001
- $50,000 |
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 |
$10,001
- $50,000 |
Scott
Smith |
Principal
LifeTime Hybrid 2055 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2060 |
None |
Scott
Smith |
Principal
LifeTime Hybrid 2065 |
None |
Gregory
L. Tornga |
SAM
Balanced |
$100,001
- $500,000 |
Gregory
L. Tornga |
SAM
Conservative Balanced |
None |
Gregory
L. Tornga |
SAM
Conservative Growth |
None |
Gregory
L. Tornga |
SAM
Flexible Income |
$10,001
- $50,000 |
Gregory
L. Tornga |
SAM
Strategic Growth |
$10,001
- $50,000 |
Randy
L. Welch |
High
Income |
None |
Randy
L. Welch |
LargeCap
Growth I |
$100,001
- $500,000 |
Randy
L. Welch |
LargeCap
Value III |
None |
Randy
L. Welch |
MidCap
Growth III |
None |
Randy
L. Welch |
MidCap
Value I |
None |
Randy
L. Welch |
Overseas |
None |
Randy
L. Welch |
Principal
LifeTime Strategic Income |
None |
Randy
L. Welch |
Principal
LifeTime 2010 |
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 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 |
SmallCap
Growth I |
$50,001
- $100,000 |
Randy
L. Welch |
SmallCap
Value II |
$10,001
- $50,000 |
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 |
Akiva
Dickstein: Inflation
Protection Fund |
Registered
investment companies |
24 |
$26.8
billion |
0 |
$0 |
Other
pooled investment vehicles |
28 |
$9.7
billion |
0 |
$0 |
Other
accounts |
260 |
$101.5
billion |
6 |
$2.2
billion |
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:
Varied Euro-Based Benchmarks, a combination of market-based indices (e.g.
Bloomberg Barclays US Aggregate Index, Bloomberg Barclays US Universal Index and
Bloomberg Barclays Intermediate Aggregate Index), certain customized indices and
certain fund industry peer groups.
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 manager of this Fund has 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 ($285,000
for 2020). 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. Mr. Dickstein is 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.
Ownership
of Securities
|
|
|
|
|
|
|
|
|
Portfolio
Manager |
PFI
Funds Managed by Portfolio Manager |
Dollar
Range of Securities Owned by the Portfolio Manager |
Akiva
Dickstein |
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 |
Chris
Allen: Inflation
Protection Fund |
Registered
investment companies |
7 |
$4.9
billion |
0 |
$0 |
Other
pooled investment vehicles |
13 |
$15.1
billion |
0 |
$0 |
Other
accounts |
23 |
$9.5
billion |
2 |
$775.2
million |
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 |
Chris
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 |
$1.7
billion |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$203.0
million |
0 |
$0 |
Other
accounts |
8 |
$2.0
billion |
2 |
$288.0
million |
Nigel
Dutson: International
Fund I |
Registered
investment companies |
1 |
$1.7
billion |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$203.0
million |
0 |
$0 |
Other
accounts |
8 |
$2.0
billion |
2 |
$288.0
million |
Tarlock
Randhawa: International
Fund I |
Registered
investment companies |
1 |
$1.7
billion |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$203.0
million |
0 |
$0 |
Other
accounts |
8 |
$2.0
billion |
2 |
$288.0
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
Fund I |
None |
Nigel
Dutson |
International
Fund I |
None |
Tarlock
Randhawa |
International
Fund 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 |
$597.7
million |
0 |
$0 |
Other
pooled investment vehicles |
2 |
$112.8
million |
0 |
$0 |
Other
accounts |
32 |
$1.8
billion |
0 |
$0 |
Simon
Hedger: Global
Real Estate Securities Fund |
Registered
investment companies |
6 |
$852.2
million |
0 |
$0 |
Other
pooled investment vehicles |
4 |
$1.4
billion |
0 |
$0 |
Other
accounts |
32 |
$5.8
billion |
5 |
$588.9
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 |
$1.5
billion |
0 |
$0 |
Other
accounts |
66 |
$7.9
billion |
5 |
$588.9
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 |
$1.5
billion |
0 |
$0 |
Other
accounts |
67 |
$8.0
billion |
5 |
$588.9
million |
Compensation
Principal
Real Estate Investors, LLC offers investment professionals 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 investment professionals at all levels 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.
Variable
compensation takes the form of a profit share plan with funding based on a
percentage of pre-tax, pre-bonus operating earnings of the boutique (e.g. REIT,
CMBS). The plan is designed to provide line-of-sight to investment
professionals, enabling them to share in current and future business growth
while reinforcing delivery of investment performance, collaboration, regulatory
compliance, operational excellence, client retention and client satisfaction.
The variable component is well aligned with client goals and objectives, with
the largest determinant being investment performance relative to appropriate
client benchmarks and peer groups. Relative performance metrics are measured
over rolling one-year and three-year periods, calculated quarterly, reinforcing
a longer term orientation. In addition to investment performance, other
discretionary factors such as team and individual results also contribute to the
quantum of incentive compensation. Discretionary compensation metrics are
specifically aligned with the results of the Real Estate group. The structure is
uniformly applied among all investment professionals, including portfolio
managers, research analysts, traders and team leaders.
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 in 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.
In
addition to deferred compensation obtained through their compensation
programming, all senior team members have substantial investments in funds
managed by the group, including deferred compensation, retirement plans and
direct personal investments. It should be noted that the Company’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 |
$500,001
- $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 five 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 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, Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and
‘C’ are regarded, on balance, as having significant
CC,
and C: 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 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’.
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.
APPENDIX
B – PRICE MAKE UP SHEET
|
|
|
|
|
|
|
|
|
|
|
|
Class
A |
|
|
|
Maximum
Offering Price Calculation |
|
|
|
(as
of October 31, 2020) |
|
|
|
|
NAV |
= |
Maximum
Offering Price |
|
(1-Sales
Charge Percentage) |
|
|
|
|
Fund |
|
|
|
|
|
|
|
California
Municipal Fund |
$10.85 |
= |
$11.27 |
|
(1-.0375) |
|
|
|
|
Core
Fixed Income Fund |
$10.17 |
= |
$10.40 |
|
(1-.0225) |
|
|
|
|
Core
Plus Bond Fund |
$11.57 |
= |
$12.02 |
|
(1-.0375) |
|
|
|
|
Diversified
International Fund |
$12.74 |
= |
$13.48 |
|
(1-.0550) |
|
|
|
|
Equity
Income Fund |
$30.66 |
= |
$32.44 |
|
(1-.0550) |
|
|
|
|
Finisterre
Emerging Markets Total Return Bond |
$10.20 |
= |
$10.60 |
Fund |
(1-.0375) |
|
|
|
|
Global
Diversified Income Fund |
$12.57 |
= |
$13.06 |
|
(1-.0375) |
|
|
|
|
Global
Real Estate Securities Fund |
$7.98 |
= |
$8.44 |
|
(1-.0550) |
|
|
|
|
Government
& High Quality Bond Fund |
$10.59 |
= |
$10.83 |
|
(1-.0225) |
|
|
|
|
High
Yield Fund |
$7.01 |
= |
$7.28 |
|
(1-.0375) |
|
|
|
|
International
Emerging Markets Fund |
$26.98 |
= |
$28.55 |
|
(1-.0550) |
|
|
|
|
LargeCap
Growth Fund I |
$18.39 |
= |
$19.46 |
|
(1-.0550) |
|
|
|
|
LargeCap
S&P 500 Index Fund |
$20.14 |
= |
$20.45 |
|
(1-.0150) |
|
|
|
|
MidCap
Fund |
$30.19 |
= |
$31.95 |
|
(1-.0550) |
|
|
|
|
|
|
|
|
|
|
|
|
Class
A |
|
|
|
Maximum
Offering Price Calculation |
|
|
|
(as
of October 31, 2020) |
|
|
|
|
NAV |
= |
Maximum
Offering Price |
|
(1-Sales
Charge Percentage) |
|
|
|
|
Fund |
|
|
|
|
|
|
|
|
|
|
|
MidCap
Value Fund I |
$12.76 |
= |
$13.50 |
|
(1-.0550) |
|
|
|
|
Money
Market Fund |
$1.00 |
= |
$1.00 |
|
(1-.0000) |
|
|
|
|
Principal
Capital Appreciation Fund |
$51.31 |
= |
$54.30 |
|
(1-.0550) |
|
|
|
|
Principal
LifeTime 2010 Fund |
$13.36 |
= |
$13.88 |
|
(1-.0375) |
|
|
|
|
Principal
LifeTime 2020 Fund |
$14.07 |
= |
$14.89 |
|
(1-.0550) |
|
|
|
|
Principal
LifeTime 2030 Fund |
$14.76 |
= |
$15.62 |
|
(1-.0550) |
|
|
|
|
Principal
LifeTime 2040 Fund |
$15.20 |
= |
$16.08 |
|
(1-.0550) |
|
|
|
|
Principal
LifeTime 2050 Fund |
$15.63 |
= |
$16.54 |
|
(1-.0550) |
|
|
|
|
Principal
LifeTime Strategic Income Fund |
$12.51 |
= |
$13.00 |
|
(1-.0375) |
|
|
|
|
Real
Estate Securities Fund |
$23.53 |
= |
$24.90 |
|
(1-.0550) |
|
|
|
|
SAM
Balanced Portfolio |
$15.64 |
= |
$16.55 |
|
(1-.0550) |
|
|
|
|
SAM
Conservative Balanced Portfolio |
$12.17 |
= |
$12.88 |
|
(1-.0550) |
|
|
|
|
SAM
Conservative Growth Portfolio |
$17.41 |
= |
$18.42 |
|
(1-.0550) |
|
|
|
|
SAM
Flexible Income Portfolio |
$12.38 |
= |
$12.86 |
|
(1-.0375) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
A |
|
|
|
Maximum
Offering Price Calculation |
|
|
|
(as
of October 31, 2020) |
|
|
|
|
NAV |
= |
Maximum
Offering Price |
|
(1-Sales
Charge Percentage) |
|
|
|
|
Fund |
|
|
|
|
|
|
|
SAM
Strategic Growth Portfolio |
$18.57 |
= |
$19.65 |
|
(1-.0550) |
|
|
|
|
Short-Term
Income Fund |
$12.54 |
= |
$12.83 |
|
(1-.0225) |
|
|
|
|
SmallCap
Fund |
$20.37 |
= |
$21.56 |
|
(1-.0550) |
|
|
|
|
Tax-Exempt
Bond Fund |
$7.40 |
= |
$7.69 |
|
(1-.0375) |
APPENDIX
C – PROXY VOTING POLICIES
The
proxy voting policies applicable to each Fund appear in the following order:
The
Fund's proxy voting policy is first, followed by PGI’s proxy voting policy, and
followed by 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.
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Proxy
Voting and Class Action Monitoring |
Rule
206(4)-6 |
Background
Rule
206(4)-6 under the Advisers Act requires every investment adviser who exercises
voting authority with respect to client securities to adopt and implement
written policies and procedures, reasonably designed to ensure that the adviser
votes proxies in the best interest of its clients. The procedures must address
material conflicts that may arise in connection with proxy voting. The Rule
further requires the adviser to provide a concise summary of the adviser’s proxy
voting process and offer to provide copies of the complete proxy voting policy
and procedures to clients upon request. Lastly, the Rule requires that the
adviser disclose to clients how they may obtain information on how the adviser
voted their proxies.
Policy
The
Advisers believe that proxy voting and the analysis of corporate governance
issues, in general, are important elements of the portfolio management services
provided to advisory clients. The Advisers’ guiding principles in performing
proxy voting are to make decisions that (i) favor proposals that tend to
maximize a company's shareholder value and (ii) are not influenced by conflicts
of interest. These principles reflect the Advisers’ belief that sound corporate
governance creates a framework within which a company can be managed in the
interests of its shareholders.
In
addition, as a fiduciary, the Advisers also monitor certain Clients’ ability to
participate in class action events through the regular portfolio management
process. Accordingly, the Advisers have adopted the policies and procedures set
out below, which are designed to ensure that the Advisers comply with legal,
fiduciary, and contractual obligations with respect to proxy voting and class
actions.
Proxy
Voting Procedures
The
Advisers have implemented these procedures with the premise that portfolio
management personnel base their determinations of whether to invest in a
particular company on a variety of factors, and while corporate governance is
one such factor, it may not be the primary consideration. As such, the
principles and positions reflected in the procedures are designed to guide in
the voting of proxies, and not necessarily in making investment
decisions.
The
Investment Accounting Department has assigned a Proxy Voting Team to manage the
proxy voting process. The Investment Accounting Department has delegated the
handling of class action activities to a Senior Investment Accounting
Leader.
Institutional
Shareholder Services
Based
on the Advisers’ investment philosophy and approach to portfolio construction,
and given the complexity of the issues that may be raised in connection with
proxy votes, the Advisers have retained the services of Institutional
Shareholder Services (“ISS”). ISS is a leading global provider of investment
decision support tools. ISS offers proxy voting solutions to institutional
clients globally. The services provided to the Advisers include in-depth
research, voting recommendations, vote execution, recordkeeping, and
reporting.
Principal
Global Investors - PGI Global Compliance Manual
The
Advisers have elected to follow the ISS Standard Proxy Voting Guidelines (the
“Guidelines”), which embody the positions and factors that the Advisers’
Portfolio Management Teams (“PM Teams”) generally consider important in casting
proxy votes.1
The
Guidelines 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. In connection with each proxy vote,
ISS prepares a written analysis and recommendation (“ISS Recommendation”) that
reflects ISS’s application of the Guidelines to the particular proxy issues. ISS
Proxy Voting Guidelines Summaries are accessible to all PM Teams on the ISS
system. They are also available from the Proxy Voting Team.
Voting
Against ISS Recommendations
On
any particular proxy vote, Portfolio Managers may decide to diverge from the
Guidelines. 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.
If
the Portfolio Manager’s judgment differs from that of ISS, a written record is
created reflecting the process (See Appendix titled “Report
for Proxy Vote(s) Against the ISS Recommendation(s)”), including:
1. The
requesting PM Team’s reasons for the decision;
2. The
approval of the lead Portfolio Manager for the requesting PM Team;
3. Notification
to the Proxy Voting Team and other appropriate personnel (including other
Advisers Portfolio Managers who may own the particular security);
4. A
determination that the decision is not influenced by any conflict of interest;
and review and
approval
by the Compliance Department.
(In
certain cases, Portfolio Managers may not be allowed to vote against ISS
recommendations due to a perceived conflict of interest. For example, Portfolio
Managers will vote with ISS recommendations in circumstances where PGI is an
adviser to the PGI CITs and those CITs invest in Principal mutual
funds.)
Conflicts
of Interest
The
Advisers have implemented procedures designed to prevent conflicts of interest
from influencing proxy voting decisions. These procedures include our use of the
Guidelines and ISS Recommendations. Proxy votes cast by the Advisers in
accordance with the Guidelines and ISS Recommendations are generally not viewed
as being the product of any conflicts of interest because the Advisers cast such
votes pursuant to a pre-determined policy based upon the recommendations of an
independent third party.
Our
procedures also prohibit the influence of conflicts of interest where a PM Team
decides to vote against an ISS Recommendation, as described above. In
exceptional circumstances, the approval process may also include consultation
with the Advisers’ senior management, the Law Department, Outside Counsel,
and/or the Client whose account may be affected by the conflict. The Advisers
maintain records of the resolution of any proxy voting conflict of
interest.
Proxy
Voting Instructions and New Accounts
Institutional
Accounts
As
part of the new account opening process for discretionary institutional Clients
that require the Adviser to vote proxies, the Advisers’ Investment Accounting
Department is responsible for sending a proxy letter to the Client’s custodian.
This letter instructs the custodian to send the Client’s proxy materials to ISS
for voting. The custodian must complete the letter and provide it to ISS, with a
copy to the Advisers’ Investment Accounting Department. This process is designed
to ensure and document that the custodian is aware of its responsibility to send
proxies to ISS.
The
Investment Accounting Department is responsible for maintaining this proxy
instruction letter in the Client’s file and for scanning it into the Advisers’
OnBase system. These steps are part of the Advisers’ Account Opening
Process.
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1.The
Advisers have various Portfolio Manager Teams organized by asset classes
and investment strategies. |
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SMA
- Wrap Accounts
The
Advisers’ SMA Operations Department is responsible for servicing wrap accounts,
which includes providing instructions to the relevant wrap sponsor for setting
up accounts with ISS.
Fixed
Income and Private Investments
Voting
decisions with respect to Client investments in fixed income securities and the
securities of privately-held issuers will generally be made by the relevant
Portfolio Managers based on their assessment of the particular transactions or
other matters at issue.
Client
Direction
Clients
may choose to vote proxies themselves, in which case they must arrange for their
custodians to send proxy materials directly to them. Clients may provide
specific vote instructions for their own ballots. Upon request, the Advisers may
be able to accommodate individual Clients that have developed their own
guidelines. Clients may also discuss with the Advisers the possibility of
receiving individualized reports or other individualized services regarding
proxy voting conducted on their behalf. Such requests should be centralized
through the Advisers’ Proxy Voting Team.
Securities
Lending
At
times, neither the Advisers nor ISS will be allowed to vote proxies on behalf of
Clients when those Clients have adopted a securities lending program. Typically,
Clients who have adopted securities lending programs have made a general
determination that the lending program provides a greater economic benefit than
retaining the ability to vote proxies. Notwithstanding this fact, in the event
that a proxy voting matter has the potential to materially enhance the economic
value of the Client’s position and that position is lent out, the Advisers will
make reasonable efforts to inform the Client that neither the Advisers nor ISS
is able to vote the proxy until the lent security is recalled.
Abstaining
from Voting Certain Proxies
The
Advisers shall at no time ignore or neglect their proxy voting responsibilities.
However, there may be times when refraining from voting is in the Client’s best
interest, such as when the Advisers’ analysis of a particular proxy issue
reveals that the cost of voting the proxy may exceed the expected benefit to the
Client. Such proxies may be voted on a best-efforts basis. These issues may
include, but are not limited to:
•Restrictions
for share blocking countries;2
•Casting
a vote on a foreign security may require that the adviser engage a
translator;
•Restrictions
on foreigners’ ability to exercise votes;
•Requirements
to vote proxies in person;
•Requirements
to provide local agents with power of attorney to facilitate the voting
instructions;
•Untimely
notice of shareholder meeting;
•Restrictions
on the sale of securities for a period of time in proximity to the shareholder
meeting.
Proxy
Solicitation
Employees
should inform the Advisers’ Proxy Voting Team of the receipt of any solicitation
from any person related to Clients’ proxies. As a matter of practice, the
Advisers do not reveal or disclose to any third party how the Advisers may have
voted (or intend to vote) on a particular proxy until after such proxies have
been counted at a shareholder’s meeting. However, the Proxy Voting Team may
disclose that it is the Advisers’ general policy to follow the ISS Guidelines.
At no time may any Employee accept any remuneration in the solicitation of
proxies.
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2.
In certain markets where share blocking occurs, shares must be “frozen”
for trading purposes at the custodian or sub- custodian in order to vote.
During the time that shares are blocked, any pending trades will not
settle. Depending on the market, this period can last from one day to
three weeks. Any sales that must be executed will settle late and
potentially be subject to interest charges or other punitive
fees. |
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Handling
of Information Requests Regarding Proxies
Employees
may be contacted by various entities that request or provide information related
to particular proxy issues. Specifically, investor relations, proxy
solicitation, and corporate/financial communications firms (e.g., Ipreo, DF
King, Georgeson Shareholder) may contact the Advisers to ask questions regarding
total holdings of a particular stock across advisory Clients, or how the
Advisers intends to vote on a particular proxy. In addition, issuers may call
(or hire third parties to call) with intentions to influence the Advisers’ votes
(i.e., to vote against ISS).
Employees
that receive information requests related to proxy votes should forward such
communications (e.g., calls, e-mails, etc.) to the Advisers’ Proxy Voting Team.
The Proxy Voting Team will take steps to verify the identity of the caller and
his/her firm prior to exchanging any information. In addition, the Proxy Voting
Team may consult with the appropriate Portfolio Manager(s) and/or the CCO with
respect to the type of information that can be disclosed. Certain information
may have to be provided pursuant to foreign legal requirements (e.g., Section
793 of the UK Companies Act).
External
Managers
Where
Client assets are placed with managers outside of the Advisers, whether through
separate accounts, funds-of-funds or other structures, such external managers
are responsible for voting proxies in accordance with the managers’ own
policies. The Advisers may, however, retain such responsibilities where deemed
appropriate.
Proxy
Voting Errors
In
the event that any Employee becomes aware of an error related to proxy voting,
he/she must promptly report that matter to the Advisers’ Proxy Voting Team. The
Proxy Voting Team will take immediate steps to determine whether the impact of
the error is material and to address the matter. The Proxy Voting Team, with the
assistance of the CCO (or designee), will generally prepare a memo describing
the analysis and the resolution of the matter. Supporting documentation (e.g.,
correspondence with ISS, Client, Portfolio Managers/ analysts, etc.) will be
maintained by the Compliance Department. Depending on the severity of the issue,
the Law Department, Outside Counsel, and/or affected Clients may be contacted.
However, the Advisers may opt to refrain from notifying non-material de minimis
errors to Clients.
Recordkeeping
The
Advisers must maintain the documentation described in the following section for
a period of not less than five (5) years, the first two (2) years at the
principal place of business. The Proxy Voting Team, in coordination with ISS, is
responsible for the following procedures and for ensuring that the required
documentation is retained.
Client
request to review proxy votes:
•Any
request, whether written (including e-mail) or oral, received by any Employee of
the Advisers, must be promptly reported to the Proxy Voting Team. All written
requests must be retained in the Client’s permanent file.
•The
Proxy Voting Team records the identity of the Client, the date of the request,
and the disposition (e.g., provided a written or oral response to Client’s
request, referred to third party, not a proxy voting client, other dispositions,
etc.) in a suitable place.
•The
Proxy Voting Team furnishes the information requested to the Client within a
reasonable time period (generally within 10 business days). The Advisers
maintain a copy of the written record provided in response to Client’s written
(including e-mail) or oral request. A copy of the written response should be
attached and maintained with the Client’s written request, if applicable and
maintained in the permanent file.
•Clients
are permitted to request the proxy voting record for the 5 year period prior to
their request.
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Proxy
statements received regarding client securities:
•Upon
inadvertent receipt of a proxy, the Advisers forward the proxy to ISS for
voting, unless the client has instructed otherwise.
Note:
The
Advisers are permitted to rely on proxy statements filed on the SEC’s EDGAR
system instead of keeping their own copies.
Proxy
voting records:
•The
Advisers’ proxy voting record is maintained by ISS. The Proxy Voting Team, with
the assistance of the Investment Accounting and SMA Operations Departments,
periodically ensures that ISS has complete, accurate, and current records of
Clients who have instructed the Advisers to vote proxies on their
behalf.
•The
Advisers maintain documentation to support the decision to vote against the ISS
recommendation.
•The
Advisers maintain documentation or any communications received from third
parties, other industry analysts, third party service providers, company’s
management discussions, etc. that were material in the basis for any voting
decision.
Procedures
for Class Actions
In
general, it is the Advisers’ policy not to file class action claims on behalf of
Clients. The Advisers specifically do not act on behalf of former Clients who
may have owned the affected security but subsequently terminated their
relationship with the Advisers. The Advisers only file class actions on behalf
of Clients if that responsibility is specifically stated in the advisory
contract, as it is the Advisers’ general policy not to act as lead plaintiff in
class actions.
The
process of filing class action claims is carried out by the Investment
Accounting Department. In the event the Advisers opt out of a class action
settlement, the Advisers will maintain documentation of any cost/benefit
analysis to support that decision.
The
Advisers are mindful that they have a duty to avoid and detect conflicts of
interest that may arise in the class action claim process. Where actual,
potential or apparent conflicts are identified regarding any material matter,
the Advisers manage the conflict by seeking instruction from the Law Department
and/or outside counsel.
Disclosure
The
Advisers ensure that Part 2A of Form ADV is updated as necessary to reflect: (i)
all material changes to this policy; and (ii) regulatory
requirements.
Responsibility
Various
individuals and departments are responsible for carrying out the Advisers’ proxy
voting and class action practices, as mentioned throughout these policies and
procedures. The Investment Accounting Department has assigned a Proxy Voting
Team to manage the proxy voting process. The Investment Accounting Department
has delegated the handling of class action activities to a Senior Investment
Accounting Leader.
In
general, the Advisers’ CCO (or designee) oversees the decisions related to proxy
voting, class actions, conflicts of interest, and applicable record keeping and
disclosures. In addition, the Compliance Department periodically reviews the
voting of proxies to ensure that all such votes - particularly those diverging
from the judgment of ISS - were voted in a manner consistent with the Advisers’
fiduciary duties.
Revised 9/2013 ♦ Supersedes 12/2012
AllianceBernstein
L.P MAY
2018
PROXY
VOTING AND GOVERNANCE POLICY
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 |
3 |
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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 |
9 |
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3.4 |
AUDITOR
PROPOSALS |
12 |
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3.5 |
SHAREHOLDER
ACCESS AND VOTING PROPOSALS |
13 |
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3.6 |
ENVIRONMENTAL,
SOCIAL AND DISCLOSURE PROPOSALS |
15 |
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4. |
CONFLICTS
OF INTEREST |
18 |
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4.1 |
INTRODUCTION |
18 |
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4.2 |
ADHERENCE
TO STATED PROXY VOTING POLICIES |
18 |
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4.3 |
DISCLOSURE
OF CONFLICTS |
18 |
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4.4 |
POTENTIAL
CONFLICTS LIST |
18 |
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4.5 |
DETERMINE
EXISTENCE OF CONFLICT OF INTEREST |
19 |
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4.6 |
REVIEW
OF THIRD PARTY RESEARCH SERVICE CONFLICTS OF INTEREST |
19 |
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4.7 |
CONFIDENTIAL
VOTING |
19 |
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4.8 |
A
NOTE REGARDING AB’S STRUCTURE |
19 |
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5. |
VOTING
TRANSPARENCY |
20 |
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6. |
RECORDKEEPING |
20 |
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6.1 |
PROXY
VOTING POLICY |
20 |
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6.2 |
PROXY
STATEMENTS RECEIVED REGARDING CLIENT SECURITIES |
20 |
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6.3 |
RECORDS
OF VOTES CAST ON BEHALF OF CLIENTS |
20 |
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6.4 |
RECORDS
OF CLIENTS REQUESTS FOR PROXY VOTING INFORMATION |
20 |
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6.5 |
DOCUMENTS
PREPARED BY AB THAT ARE MATERIAL TO VOTING DECISIONS |
20 |
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7. |
PROXY
VOTING PROCEDURES |
20 |
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7.1 |
VOTE
ADMINISTRATION |
20 |
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7.2 |
SHARE
BLOCKING |
21 |
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7.3 |
LOANED
SECURITIES |
21 |
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EXHIBITS
+
Proxy Voting and Governance Committee Members
+
Proxy Voting Guideline Summary
+
Proxy Voting Conflict of Interest Form
+
Statement of Policy Regarding Responsible Investment
1. INTRODUCTION
As
an investment adviser, we are shareholder advocates and have a fiduciary duty to
make investment decisions that are in our clients’ best interests by maximizing
the value of their shares. Proxy voting is an integral part of this process,
through which we support strong corporate governance structures, shareholder
rights, and transparency.
We
have an obligation to vote proxies in a timely manner and we apply the
principles in this policy to our proxy decisions. We believe a company’s
environmental, social and governance (“ESG”)
practices may have a significant effect on the value of the company, and we take
these factors into consideration when voting. For additional information
regarding our ESG policies and practices, please refer to our firm’s Statement
of Policy Regarding Responsible Investment (“RI
Policy”).
This
Proxy Voting and Governance Policy (“Proxy
Voting and Governance Policy”
or “Policy”),
which outlines our policies for proxy voting and includes a wide range of issues
that often appear on proxies, applies to all of AB’s investment management
subsidiaries and investment services groups investing on behalf of clients
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
(“Proxy
Managers”),
in order to ensure that our proxy voting policies and procedures are implemented
consistently.
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.
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 of our
investment activities. The different investment philosophies utilized by our
investment teams may occasionally result in different conclusions being drawn
regarding certain proposals and, in turn, may result in the Proxy Manager making
different voting decisions on the same proposal. Nevertheless, the Proxy Manager
votes proxies with the goal of maximizing the value of the securities in client
portfolios.
In
addition to our firm-wide proxy voting policies, we have a Proxy Voting and
Governance Committee (“Proxy
Voting and Governance Committee” or
“Committee”),
which provides oversight and includes senior investment professionals from
Equities, Legal personnel and Operations personnel. 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 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.
RESEARCH
SERVICES
We
subscribe to the corporate governance and proxy research services of
Institutional Shareholder Services Inc. (“ISS”).
All our investment professionals can access these materials via the Proxy
Manager and/or the Committee.
ENGAGEMENT
In
evaluating proxy issues and determining our votes, we welcome and seek out the
points of view of various parties. Internally, the Proxy Manager may consult the
Committee, Chief Investment Officers, Portfolio Managers, and/or Research
Analysts across our equities platforms, and Portfolio Managers in who’s managed
accounts 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. Also, these meetings often
are joint efforts between the investment professionals, who are best positioned
to comment on company-specific details, and the Proxy Manager(s), who offer a
more holistic view of governance 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 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 the 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 the guidelines if warranted by the specific facts and
circumstances of the situation (i.e., if, under the circumstances, we believe
that deviating from our stated policy is necessary to help maximize long-term
shareholder value). 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.
3.1 BOARD
AND DIRECTOR PROPOSALS
1.Board
Diversity (SHP): CASE-BY-CASE
Board
diversity is increasingly an important topic. In a number of European countries,
legislation requires a quota of female directors. Other European countries have
a comply-or-explain policy. We believe boards should develop, as a part of their
refreshment and refreshment process, a framework for identifying diverse
candidates. We believe diversity is broader than gender and should also take
into consideration factors such as business experience, background, ethnicity,
tenure and nationality. We evaluate these proposals on a case-by-case basis
while examining a board’s current diversity profile and approach, and if there
are other general governance concerns.
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 issues. 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 exists. However, where a classified board already exists, we will not
oppose directors who sit on such boards for that reason. 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. We vote in favor of proposals
adopting indemnification for directors with respect to acts conducted in the
normal course of business. 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 indemnification 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 more
progressive requirements than those implemented in a local market if we believe
more progressive requirements may improve corporate governance practices. We
will generally regard a director as independent if the director satisfies the
criteria for independence (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 and may 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 consider the number of boards on which a director sits and/or their length
of service on a particular board.
•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.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.
9.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.
10.Majority
of 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.
11.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 while taking into consideration local market
regulation, corporate governance codes, and controlled company
status.
12.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.
13.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.
14.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.
3.2 COMPENSATION
PROPOSALS
15. 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.
16. 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.
17. 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.
18. 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.
19. 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.
However, 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.
20. 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.
21. 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.
22. Disclose
Executive and Director Pay (SHP): CASE-BY-CASE
The
United States Securities and Exchange Commissions (“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.
23. Executive
and Employee Compensation Plans, Policies and Reports: CASE-BY-CASE
Compensation
plans (“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.
24. 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.
25. 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.
26. 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.
27. 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.
28. 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 existing company clawback policy, if
any.
29. 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.
30. 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.
31. 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.
3.3 CAPITAL
CHANGES AND ANTI-TAKEOVER PROPOSALS
32. 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.
33. 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.
34. 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.
35. 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.
36. 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.
37. 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.
38. 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.
39. 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).
40. 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.
41. 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).
42. Multi
Class Equity Structures: CASE-BY-CASE
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.
Multi-class structures, however, may be beneficial, for a period of time,
allowing management to focus on longer-term value creation, which benefits all
shareholders. In these instances, we evaluate proposals of share issuances to
perpetuate the structure on a case-by-case basis and expect the company to
attach provisions that will either eliminate or phase out existing multi-class
vote structures when appropriate and in a cost-effective manner (often referred
to as “Sunset Provisions), or require periodic shareholder reauthorization. We
expect Board’s to routinely review existing multi-class vote structures and
share their current view. If the above criteria is not met, we may vote against
the board.
43. 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.
44. 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.
45. 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.
46. 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.
47. 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.
48. 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.
3.4 AUDITOR
PROPOSALS
49. 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.
50. 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.
51. 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.
52. 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.
53. 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 others
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.
3.5 SHAREHOLDER
ACCESS AND VOTING PROPOSALS
54. 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, often 10% of the outstanding
shares.
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 call a
special meeting if the proposing shareholder owns, or the proposing shareholders
as a group own, 5% or more of the outstanding voting equity of the
company.
55. 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.
56. Adopt
Cumulative Voting in Dual Shareholder Class Structures (SHP): FOR
In
dual class structures (such as A&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.
57. 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.
58. 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.
59. Permit
a Shareholder’s Right to Act by Written Consent (SHP): FOR
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 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.
60. 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 DC 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.
61. 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.
62. 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.
63. 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.
3.6 ENVIRONMENTAL,
SOCIAL AND DISCLOSURE PROPOSALS
64. 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.
65. Climate
Change (SHP): FOR
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 proposed information is of added benefit to shareholders.
66. Charitable
Contributions (SHP) (MGMT): 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.
67. 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,
packaging and recycling, renewable energy, toxic material, palm oil and
water.
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 while taking into
account existing policies and procedures of the company and whether the proposed
information is of added benefit to shareholders.
68. 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 while taking into
account existing policies and procedures of the company and whether the proposed
information is of added benefit to shareholders.
69. 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 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 proposed information is of added benefit to shareholders.
70. Human
Rights Policies and Reports (SHP): CASE-BY-CASE
These
proposals may include reporting requests on human rights risk assessment,
humanitarian engagement and mediation policies, working conditions, adopting
policies on supply chain worker fees 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.
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.
71. 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.
72. 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.
73. 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.
74. 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.
75. Sustainability
Report (SHP): FOR
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. Work
Place: 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 ID.
77. Work
Place: 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
earningsand may include, statistics and rationale pertaining to changes in the
size of the gap, recommended actions, and information on whether greater
oversight is needed over certain aspects of the company’s compensation
policies.
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
4.1 INTRODUCTION
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.
AllianceBernstein
L.P. (“AB””)
recognizes that there may be a potential material conflict of interest when we
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 that
may affect how we vote on the issuer’s proxy. Similarly, we may have a potential
material conflict of interest when deciding how to vote on a proposal sponsored
or supported by a shareholder group that is a client. In order to avoid 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 voting decisions are based on our clients’
best interests and are not the product of a conflict.
4.2 ADHERENCE
TO STATED PROXY VOTING POLICIES
Votes
generally are cast in accordance with this policy3.
In situations where our policy is case-by-case, this Manual often provides
criteria that will guide our decision. In situations where our policy on a
particular issue is case-by-case 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 ISS, 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. On an annual basis, the Committee
will receive a report of all such votes so as to confirm adherence of the
policy.
4.3 DISCLOSURE
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 conflict of interest, he or she must also remove himself or
herself from the decision-making process.
4.4 POTENTIAL
CONFLICTS LIST
No
less frequently than annually, a list of companies and organizations whose
proxies may pose potential conflicts of interest is compiled by the Legal and
Compliance Department (the “Potential
Conflicts List”).
The Potential Conflicts List includes:
•Publicly-traded
Clients from the Russell 3000 Index, the Morgan Stanley Capital International
(“MSCI”)
Europe Australia Far East Index (MSCI EAFE), the MSCI Canada Index and the MSCI
Emerging Markets Index;
•Publicly-traded
companies that distribute AB mutual funds;
•Bernstein
private clients who are directors, officers or 10% shareholders of publicly
traded companies;
•Clients
who sponsor, publicly support or have material interest in a proposal upon which
we will be eligible to vote;
•Publicly-traded
affiliated companies;
•Companies
where an employee of AB or AXA Financial, Inc., a parent company of AB, has
identified an interest;
•Any
other conflict of which a Committee member becomes aware4.
We
determine our votes for all meetings of companies on the Potential Conflicts
List by applying the tests described in Section 4.5 below. We document all
instances when the independent compliance officer determines our
vote.
3
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.
4
The Committee must notify the Legal and Compliance Department promptly of any
previously unknown conflict.
4.5 DETERMINE
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 does not generate a
conflict of interest:
•If
our proposed vote is consistent with our Proxy Voting Policy, no further review
is necessary.
•If
our proposed vote is contrary to our Proxy Voting Policy and our client’s
position on the proposal, no further review is necessary.
•If
our proposed vote is contrary to our Proxy Voting Policy or is not covered
herein, is consistent with our client’s position, and is also consistent with
the views of ISS, no further review is necessary.
•If
our proposed vote is contrary to our Proxy Voting Policy or is not covered
herein, is consistent with our client’s position and is contrary to the views of
ISS, the vote will be presented to an independent compliance officer
(“ICO”).
The ICO will determine whether the proposed vote is reasonable. If the ICO
cannot determine that the proposed vote is reasonable, the ICO may instruct AB
to refer the votes back to the client(s) or take other actions as the ICO deems
appropriate. The ICO’s review will be documented using a Proxy Voting Conflict
of Interest Form (a copy of which is attached hereto).
4.6 REVIEW
OF THIRD PARTY RESEARCH SERVICE CONFLICTS OF INTEREST
We
consider the research of ISS, so the Committee takes reasonable steps to verify
that ISS is, in fact, independent based on all of the relevant facts and
circumstances. This includes reviewing ISS’s conflict management procedures on
an annual basis. When reviewing these conflict management procedures, we will
consider, among other things, whether ISS (i) has the capacity and competency to
adequately analyze proxy issues; and (ii) can offer research in an impartial
manner and in the best interests of our clients.
4.7 CONFIDENTIAL
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; and (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. Once the
votes have been cast, 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 the quarter after the vote has been cast.
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 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 for
advice on proxy votes that they cast. A member of the Committee or a Proxy
Manager may offer such advice subject to an understanding with the client that
the advice 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.
4.8 A
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 a wholly-owned subsidiary of AXA, a French
holding company for an international group of insurance and related financial
services companies.
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 quarterly, 30 days after the end of
the previous quarter. 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.
Alternatively, clients may make a written request to the Chief Compliance
Officer.
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 five 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 five years. We maintain the vast majority
of these records electronically. We will keep paper records, if any, in one of
our offices for at least two years.
6.1 PROXY
VOTING AND GOVERNANCE POLICY
The
Proxy Voting and Governance Policy shall be maintained in the Legal and
Compliance Department and posted on our company intranet and the AB website
(https://www.abglobal.com).
6.2 PROXY
STATEMENTS RECEIVED REGARDING CLIENT SECURITIES
For
US Securities5,
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.
6.3 RECORDS
OF VOTES CAST ON BEHALF OF CLIENTS
Records
of votes cast by AB are retained electronically by our proxy voting agent,
ISS.
6.4 RECORDS
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.
6.5 DOCUMENTS
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 the
Proxy Manager.
7. PROXY
VOTING PROCEDURES
7.1 VOTE
ADMINISTRATION
In
an effort to increase the efficiency of voting proxies, AB uses ISS to act as
its voting agent 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. A Proxy
Manager reviews the ballots via ISS’s web platform, ProxyExchange. Using
ProxyExchange, the Proxy Manager submits our voting decision. ISS then returns
the proxy ballot forms to the designated returnee for tabulation. Clients may
request that, when voting their proxies, we utilize an ISS recommendation or
ISS’s Taft-Hartley Voting Policy.
If
necessary, any paper ballots we receive will be voted online using ProxyVote or
via mail or fax.
5
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.
7.2 SHARE
BLOCKING
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 abstain from voting
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.
7.3 LOANED
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, under rare
circumstances, for voting issues that may have a significant impact on the
investment, we may request that clients or custodians recall securities that are
on loan if we determine that the benefit of voting outweighs the costs and lost
revenue to the client or fund and the administrative burden of retrieving the
securities.
EXHIBIT
PROXY
VOTING AND GOVERNANCE COMMITTEE MEMBERS
The
members of the Committee establish general proxy policies for AB and consider
specific proxy voting matters as necessary. Members include senior investment
personnel and representatives of the Legal and Compliance Department and the
Operations Department. The Proxy Committee is chaired by Linda Giuliano, Senior
Vice President, Chief Administrative Officer-Equities, and Head of Responsible
Investment. If you have questions or desire additional information about this
Policy, please contact the Proxy Team at: [email protected].
PROXY
VOTING AND GOVERNANCE COMMITTEE
•Vincent
DuPont, SVP-Equities
•Linda
Giuliano, SVP-Equities
•Saskia
Kort-Chick, VP-Equities
•Telmo
Martins, VP - Compliance
•Rajeev
Eyunni, SVP - Equities
•James
MacGregor, SVP-Equities
•Mark
Manley, SVP-Legal
•Ryan
Oden, AVP-Equities
•Neil
Ruffell, VP-Operations
EXHIBIT
PROXY
VOTING GUIDELINE SUMMARY
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Shareholder
Proposal |
Board
and Director Proposals |
For |
Against |
Case-by-Case |
+ |
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 |
|
|
+ |
+ |
Require
Two Candidates for Each Board Seat |
|
+ |
|
|
Compensation
Proposals |
|
|
|
+ |
Elimination
of Single Trigger Change-in-Control
Agreements |
+ |
|
|
+ |
Pro
Rata Vesting of Equity Compensation Awards-Change of Control |
|
|
+ |
+ |
Adopt
Policies to Prohibit any Death Benefits to Senior Executives |
|
+ |
|
+ |
Advisory
Vote to Ratify Directors’ Compensation |
+ |
|
|
+ |
Amend
Executive Compensation Plan Tied to Performance (Bonus Banking) |
|
+ |
|
|
Approve
Remuneration for Directors and Auditors |
|
|
+ |
|
Approve
Remuneration Reports |
|
|
+ |
|
Approve
Retirement Bonuses for Directors (Japan and South Korea) |
|
|
+ |
|
Approve
Special Payments to Continuing Directors and Auditors (Japan) |
|
|
+ |
+ |
Disclose
Executive and Director Pay |
|
|
+ |
+ |
Exclude
Pension Income from Performance-Based Compensation |
+ |
|
|
|
Executive
and Employee Compensation Plans |
|
|
+ |
+ |
Limit
Dividend Payments to Executives |
|
+ |
|
+ |
Limit
Executive Pay |
|
|
+ |
|
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|
|
|
|
|
|
|
Shareholder
Proposal |
|
For |
Against |
Case-by-
Case |
+ |
Mandatory
Holding Periods |
|
+ |
|
+ |
Performance-Based
Stock Option Plans |
|
|
+ |
+ |
Prohibit
Relocation Benefits to Senior Executives |
|
+ |
|
+ |
Recovery
of Performance-Based Compensation |
+ |
|
|
+ |
Submit
Golden Parachutes/Severance Plans to a Shareholder Vote |
|
+ |
|
+ |
Submit
Golden Parachutes/Severance Plans to a Shareholder Vote prior to their
being Negotiated by Management |
|
|
+ |
+ |
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 |
|
+ |
|
|
Corporate
Restructurings, Merger Proposals and Spin-Offs |
|
|
+ |
|
Elimination
of Preemptive Rights |
|
|
+ |
+ |
Expensing
Stock Options |
+ |
|
|
|
Fair
Price Provisions |
|
|
+ |
|
Increase
Authorized Common Stock |
|
|
+ |
|
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 |
+ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder
Proposal |
|
For |
Against |
Case-by-
Case |
+ |
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 |
|
|
+ |
+ |
Carbon
Accounting |
+ |
|
|
+ |
Carbon
Risk |
+ |
|
|
+ |
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 |
|
|
+ |
+ |
Work
Place: Diversity |
+ |
|
|
+ |
Work
Place: Pay Disparity |
|
|
+ |
EXHIBIT
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 consistent with our stated proxy voting
policy?
If
yes, stop here and sign below as no further review is
necessary. |
¨Yes |
oNo |
|
|
|
|
2 |
Is
our proposed vote contrary to our client’s position?
If
yes, stop here and sign below as no further review is
necessary. |
oYes |
oNo |
|
|
|
|
3 |
Is
our proposed vote consistent with the views of Institutional Shareholder
Services?
If
yes, stop here and sign below as no further review is
necessary. |
oYes |
oNo |
Please
attach a memo containing the following information and documentation supporting
the proxy voting decision:
•A
list of the issue(s) where our proposed vote is contrary to our stated policy
(director election, cumulative voting, compensation)
•A
description of any substantive contact with any interested outside party and a
proxy voting 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.
•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.
|
|
|
|
|
|
AB
Conflicts Officer Approval (if necessary. Email approval is
acceptable.): |
Prepared
by: |
|
|
I
hereby confirm that the proxy voting decision referenced on this form is
reasonable. |
|
|
|
Print
Name: _________________________________ |
AB
Conflicts Officer |
Date:
______________________________________ |
|
|
Date:
____________________________________ |
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.
EXHIBIT
STATEMENT
OF POLICY REGARDING RESPONSIBLE INVESTMENT
PRINCIPLES
FOR RESPONSIBLE INVESTMENT, ESG AND SOCIALLY RESPONSIBLE INVESTMENT
1.Introduction
AllianceBernstein
L.P. (“AB”
or “we”)
is appointed by our clients as an investment manager with a fiduciary
responsibility to help them achieve their investment objectives over the long
term. Generally, our clients’ objective is to maximize the financial return of
their portfolios within appropriate risk parameters. AB has long recognized that
environmental, social and governance (“ESG”)
issues can impact the performance of investment portfolios. Accordingly, we have
sought to integrate ESG factors into our investment process to the extent that
the integration of such factors is consistent with our fiduciary duty to help
our clients achieve their investment objectives and protect their economic
interests.
Our
policy draws a distinction between how the Principles for Responsible Investment
(“PRI”
or “Principles”),
and Socially Responsible Investing (“SRI”)
incorporate ESG factors. PRI is based on the premise that, because ESG issues
can affect investment performance, appropriate consideration of ESG issues and
engagement regarding them is firmly within the bounds of a mainstream investment
manager’s fiduciary duties to its clients. Furthermore, PRI is intended to be
applied only in ways that are consistent with those mainstream fiduciary
duties.
SRI,
which refers to a spectrum of investment strategies that seek to integrate
ethical, moral, sustainability and other non- financial factors into the
investment process, generally involves exclusion and/or divestment, as well as
investment guidelines that restrict investments. AB may accept such guideline
restrictions upon client request.
2.Approach
to ESG
Our
long-standing policy has been to include ESG factors in our extensive
fundamental research and consider them carefully when we believe they are
material to our forecasts and investment decisions. If we determine that these
aspects of an issuer’s past, current or anticipated behavior are material to its
future expected returns, we address these concerns in our forecasts, research
reviews, investment decisions and engagement. In addition, we have
well-developed proxy voting policies that incorporate ESG issues and
engagement.
3.Commitment
to the PRI
In
recent years, we have gained greater clarity on how the PRI initiative, based on
information from PRI Advisory Council members and from other signatories,
provides a framework for incorporating ESG factors into investment research and
decision-making. Furthermore, our industry has become, over time, more aware of
the importance of ESG factors. We acknowledge these developments and seek to
refine what has been our process in this area.
After
careful consideration, we determined that becoming a PRI signatory would enhance
our current ESG practices and align with our fiduciary duties to our clients as
a mainstream investment manager. Accordingly, we became a signatory, effective
November 1, 2011.
In
signing the PRI, AB as an investment manager publicly commits to adopt and
implement all six Principles, where consistent with our fiduciary
responsibilities, and to make progress over time on implementation of the
Principles.
The
six Principles are:
a.We
will incorporate ESG issues into investment research and decision-making
processes.
AB
Examples:
ESG issues are included in the research analysis process. In some cases,
external service providers of ESG-related tools are utilized; we have conducted
proxy voting training and will have continued and expanded training for
investment professionals to incorporate ESG issues into investment analysis and
decision- making processes across our firm.
b.We
will be active owners and incorporate ESG issues into our ownership policies and
practices.
AB
Examples:
We are active owners through our proxy voting process (for additional
information, please refer to our Statement
of Policies and Procedures for Proxy Voting Manual);
we engage issuers on ESG matters in our investment research process (we define
“engagement” as discussions with management about ESG issues when they are, or
we believe they are reasonably likely to become, material).
EXHIBIT
c.We
will seek appropriate disclosure on ESG issues by the entities in which we
invest.
AB
Examples:
Generally, we support transparency regarding ESG issues when we conclude the
disclosure is reasonable. Similarly, in proxy voting, we will support
shareholder initiatives and resolutions promoting ESG disclosure when we
conclude the disclosure is reasonable.
d.We
will promote acceptance and implementation of the Principles within the
investment industry.
AB
Examples:
By signing the PRI, we have taken an important first step in promoting
acceptance and implementation of the six Principles within our
industry.
e.We
will work together to enhance our effectiveness in implementing the
Principles.
AB
Examples:
We will engage with clients and participate in forums with other PRI signatories
to better understand how the PRI are applied in our respective businesses. As a
PRI signatory, we have access to information, tools and other signatories to
help ensure that we are effective in our endeavors to implement the
PRI.
f.We
will report on our activities and progress towards implementing the
Principles.
AB
Examples:
We will respond to the 2012 PRI questionnaire and disclose PRI scores from the
questionnaire in response to inquiries from clients and in requests for
proposals; we will provide examples as requested concerning active ownership
activities (voting, engagement or policy dialogue).
4. RI
Committee
Our
firm’s RI Committee provides AB stakeholders, including employees, clients,
prospects, consultants and service providers alike, with a resource within our
firm on which they can rely for information regarding our approach to ESG issues
and how those issues are incorporated in different ways by the PRI and SRI.
Additionally, the RI Committee is responsible for assisting AB personnel to
further implement our firm’s RI policies and practices, and, over time, to make
progress on implementing all six Principles.
The
RI Committee has a diverse membership, including senior representatives from
investments, distribution/sales and legal. The Committee is chaired by Linda
Giuliano, Senior Vice President and Chief Administrative Officer-
Equities.
If
you have questions or desire additional information about this Policy, we
encourage you to contact the RI Committee at
Proxy
Voting Policy
Barrow
Hanley has the responsibility to vote proxies for equity securities for its
clients who have delegated this responsibility to us, and under Barrow Hanley’s
fiduciary duty, the Firm’s policy is to vote our clients’ proxies in the best
economic interests of our clients, the beneficial owners of the shares. Barrow
Hanley has adopted this Proxy Voting Policy, and maintains written procedures
for the handling of research, voting, and reporting of the proxy votes, and
making appropriate disclosures about proxy voting on behalf of our clients.
Disclosure information about the Firm’s Proxy Voting is included in Barrow
Hanley’s Form ADV Part 2.
To
assist in the proxy voting process, Barrow Hanley retains the services of Glass
Lewis & Co. Glass Lewis provides:
•Research
on corporate governance, financial statements, business, legal and accounting
risks;
•Proxy
voting recommendations, including 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 Barrow Hanley’s proxy voting policy, procedures, disclosures and
recordkeeping, including outlining our voting guidelines in our procedures. The
Proxy Oversight Committee conducts periodic reviews to monitor and ensure that
the Firm’s policy is observed, implemented properly, and amended or updated, as
appropriate. The Proxy Oversight Committee is made up of the CCO/CRO, the
Responsible Investing Committee lead, the director of investment operations, the
ESG research coordinator, and an at-large portfolio manager.
•Barrow
Hanley’s proxy coordinators review and organize the data and recommendations
provided by the proxy service. The proxy coordinators are responsible for
ensuring that the proxy ballots are routed to the appropriate research analyst
based on industry sector coverage. Proxy coordinators are assigned from the
operations department.
•Barrow
Hanley’s research analysts review and evaluate proxy proposals and make written
recommendations to the Proxy Voting Committee to ensure that votes are
consistent with the Firm’s analysis and are in the best interest of the
shareholders, our clients.
•Barrow
Hanley’s equity portfolio managers are members of the Proxy Voting Committee.
Equity portfolio managers vote proxy proposals based on share ownership after
giving consideration to Barrow Hanley’s Proxy Voting Guidelines, internal
research recommendations, and the opinion of Glass Lewis. Proxy votes must be
approved by the Proxy Voting Committee before submitting to the proxy service
provider.
•Proxies
for the Diversified Small Cap Value accounts are voted in accordance with the
proxy service provider’s recommendations for the following reasons:
BARROW,
HANLEY, MEWHINNEY & STRAUSS, LLC
As
of December 31, 2019
◦Investments
are based on a quantitative model. Fundamental research is not performed for the
holdings.
◦The
holding period is too short to justify the time for analysis 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, and because Barrow Hanley has no information about
clients’ shares on loan, the proxies for those shares may not be
voted.
•Barrow
Hanley invests in equity securities of corporations who are also clients of the
Firm; in such cases, Barrow Hanley seeks to mitigate potential conflicts
by:
◦Making
voting decisions for the benefit of the shareholder(s), our
clients;
◦Uniformly
voting every proxy based on Barrow Hanley’s internal research and consideration
of Glass Lewis’ recommendations; and
◦Documenting
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
•Barrow
Hanley sends a daily electronic transfer of equity positions to the proxy
service provider.
•The
proxy service provider 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 (or as requested by
client), listing the number of shares voted and disclosing how proxies were
voted.
•Voting
records are retained on the network, which is backed up daily. The proxy service
provider retains records for seven years.
•Barrow
Hanley’s Proxy Voting Guidelines are available upon request by calling: (214)
665-1900, or by e-mailing: [email protected].
•The
proxy coordinators retain the following proxy records for at least seven
years:
◦These
policies and procedures and any amendments;
◦Proxy
statements received regarding our clients’ securities;
◦A
record of each proxy voted;
◦Proxy
voting reports that are sent to clients annually;
◦Any
document Barrow Hanley created that was material to making a decision on how to
vote proxies, or that memorializes that decision; and
◦Records
of any client’s request for proxy voting information.
BARROW,
HANLEY, MEWHINNEY & STRAUSS, LLC
As
of December 31, 2019
Voting
Debt and/or Bank Loan Securities
Barrow
Hanley has the responsibility to vote proxies and related interests for its
clients who have delegated this responsibility to the Firm, which may include
voting on proposals, amendments, consents, or resolutions solicited by or in
respect to the issuers of securities, including Bank Loan debt instruments.
Barrow Hanley votes proxies and related interests in the best interest of the
securities’ owners, its clients.
Exceptions
Limited
exceptions may be permitted based on a client’s circumstances, such as foreign
regulations that create a conflict with U.S. practices, expenses to facilitate
the that outweigh the benefit of proxy voting, or other
circumstances.
BARROW,
HANLEY, MEWHINNEY & STRAUSS, LLC
As
of December 31, 2019
BlackRock
Investment
Stewardship
Global
Corporate Governance &
Engagement
Principles
January
2020
BlackRock
|
|
|
|
|
|
Contents |
|
|
|
Introduction
to BlackRock |
3 |
|
Philosophy
on corporate governance |
3 |
|
Corporate
governance, engagement and voting |
4 |
|
Boards
and directors |
5 |
|
Auditors
and audit-realted issues |
6 |
|
Capital
structure, mergers, asset sales and other special transactions |
6 |
|
Compensation
and benefits |
7 |
|
Environmental
and social issues |
7 |
|
General
corporate governance matters and shareholder protections |
9 |
|
BlackRock’s
oversight of our investment stewardship activities |
9 |
|
Vote
execution |
10 |
|
Conflicts
management policies and procecdures |
10 |
|
Voting
guidelines |
11 |
|
Reporting
and vote transparency |
12 |
|
If
you would like additional information, please contact
Introduction
to BlackRock
BlackRock’s
purpose is to help more and more people experience financial well-being. As a
fiduciary to our clients, we provide the investment and technology solutions
they need when planning for their most important goals. 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 corporate governance
BlackRock
Investment Stewardship (“BIS”) activities are focused on maximizing long-term
value for our clients. BIS does this through engagement with boards and
management of investee companies and, for those clients who have given us
authority, through voting at shareholder meetings.
We
believe that there are certain fundamental rights attached to shareholding.
Companies and their boards should be accountable to shareholders and structured
with appropriate checks and balances to ensure that they operate in
shareholders’ best interests. Effective voting rights are central to the rights
of ownership and there should be one vote for one share. Shareholders should
have the right to elect, remove and nominate directors, approve the appointment
of the auditor and to amend the corporate charter or by-laws. Shareholders
should be able to vote on matters 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. In order to make informed decisions, we believe that
shareholders have the right to sufficient and timely information.
Our
primary focus is on the performance of the board of directors. As the agent of
shareholders, the board should set the company’s strategic aims within a
framework of prudent and effective controls, which enables risk to be assessed
and managed. The board should provide direction and leadership to management and
oversee management’s performance. Our starting position is to be supportive of
boards in their oversight efforts on shareholders’ behalf and we would generally
expect to support the items of business they put to a vote at shareholder
meetings. Votes cast against or withheld from resolutions proposed by the board
are a signal that we are concerned that the directors or management have either
not acted in the best interests of shareholders or have not responded adequately
to shareholder concerns. We assess voting matters on a case-by-case basis and in
light of each company’s unique circumstances taking into consideration regional
best practices and long-term value creation.
These
principles set out our approach to engaging with companies, provide guidance on
our position on corporate governance and outline how our views might be
reflected in our voting decisions. Corporate governance practices can vary
internationally, so our expectations in relation to individual companies are
based on the legal and regulatory framework of each local market. However, we
believe there are overarching principles of corporate governance that apply
globally and provide a framework for more detailed, market-specific assessments.
We
believe BlackRock has a responsibility in relation to monitoring and providing
feedback to companies, sometimes known as “stewardship.” These ownership
responsibilities include engaging with management or board members on corporate
governance matters, voting proxies in the best long-term economic interests of
our clients, and engaging with regulatory bodies to ensure a sound policy
framework consistent with promoting long-term shareholder value creation. We
also believe in the responsibility to our clients to have appropriate resources
and oversight structures. Our approach is set out in the section below titled
“BlackRock’s oversight of its investment stewardship activities” and is further
detailed in a team
profile on our website.
Corporate
governance, engagement and voting
We
recognize that accepted standards of corporate governance differ between
markets, but we believe there are sufficient common threads globally to identify
an overarching set of principles. The objective of our investment stewardship
activities is the protection and enhancement of the value of our clients’
investments in public corporations. Thus, these principles focus on practices
and structures that we consider to be supportive of long-term value creation. We
discuss below the principles under six key themes. In our regional and
market-specific voting guidelines we explain how these principles inform our
voting decisions in relation to specific resolutions that may appear on the
agenda of a shareholder meeting in the relevant market.
The
six key themes are:
•Boards
and directors
•Auditors
and audit-related issues
•Capital
structure, mergers, asset sales and other special transactions
•Compensation
and benefits
•Environmental
and social issues
•General
corporate governance matters and shareholder protections
At
a minimum, we expect companies to observe the accepted corporate governance
standards in their domestic market or to explain why doing so is not in the
interests of shareholders. Where company reporting and disclosure is inadequate
or the approach taken is inconsistent with our view of what is in the best
interests of shareholders, we will engage with the company and/or use our vote
to encourage a change in practice. In making voting decisions, we perform
independent research and analysis, such as reviewing relevant information
published by the company and apply our voting guidelines to achieve the outcome
we believe best protects our clients’ long-term economic interests. We also work
closely with our active portfolio managers, and may take into account internal
and external research.
BlackRock
views engagement as an important activity; engagement provides us with the
opportunity to improve our understanding of the challenges and opportunities
that investee companies are facing and their governance structures. Engagement
also allows us to share our philosophy and approach to investment and corporate
governance with companies to enhance their understanding of our objectives. Our
engagements often focus on providing our feedback on company disclosures,
particularly where we believe they could be enhanced. There are a range of
approaches we may take in engaging companies depending on the nature of the
issue under consideration, the company and the market.
BlackRock’s
engagements emphasize direct dialogue with corporate leadership on the
governance issues identified in these principles that have a material impact on
financial performance. These engagements enable us to cast informed votes
aligned with clients’ long-term economic interests. We generally prefer to
engage in the first instance where we have concerns and give management time to
address or resolve the issue. As a long-term investor, we are patient and
persistent in working with our portfolio companies to have an open dialogue and
develop mutual understanding of governance matters, to promote the adoption of
best practices and to assess the merits of a company’s approach to its
governance. We monitor the companies in which we invest and engage with them
constructively and privately where we believe doing so helps protect
shareholders’ interests. We do not try to micro-manage companies, or tell
management and boards what to do. We present our views as a long-term
shareholder and listen to companies’ responses. The materiality and immediacy of
a given issue will generally determine the level of our engagement and whom we
seek to engage at the company, which could be management representatives or
board directors.
Boards
and directors
The
performance of the board is critical to the economic success of the company and
to the protection of shareholders’ interests. Board members serve as agents of
shareholders in overseeing the strategic direction and operation of the company.
For this reason, BlackRock focuses on directors in many of our engagements and
sees the election of directors as one of our most important responsibilities in
the proxy voting context.
We
expect the board of directors to promote and protect shareholder interests
by:
•establishing
an appropriate corporate governance structure
•supporting
and overseeing management in setting long-term strategic goals, applicable
measures of value-creation and milestones that will demonstrate progress, and
steps taken if any obstacles are anticipated or incurred
•ensuring
the integrity of financial statements
•making
independent decisions regarding mergers, acquisitions and disposals
•establishing
appropriate executive compensation structures
•addressing
business issues, including environmental and social issues, when they have the
potential to materially impact company reputation and performance
There
should be clear definitions of the role of the board, the committees of the
board and senior management such that the responsibilities of each are well
understood and accepted. Companies should report publicly the approach taken to
governance (including in relation to board structure) and why this approach is
in the best interest of shareholders. We will seek to engage with the
appropriate directors where we have concerns about the performance of the board
or the company, the broad strategy of the company, or the performance of
individual board members. We believe that when a company is not effectively
addressing a material issue, its directors should be held
accountable.
BlackRock
believes that directors should stand for re-election on a regular basis. We
assess directors nominated for election or re-election in the context of the
composition of the board as a whole. There should be detailed disclosure of the
relevant credentials of the individual directors in order for shareholders to
assess the caliber of an individual nominee. We expect there to be a sufficient
number of independent directors on the board to ensure the protection of the
interests of all shareholders. Common impediments to independence may include
but are not limited to:
•current
or former employment at the company or a subsidiary within the past several
years
•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 the director’s ability to
act in the best interests of the company
BlackRock
believes that the operation of the board is enhanced when there is a clearly
independent, senior non-executive director to chair it or, where the chairman is
also the CEO (or is otherwise not independent), an independent lead 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 participation in board
deliberations. The lead independent board director should be available to
shareholders in those situations where a director is best placed to explain and
justify a company’s approach.
To
ensure that the board remains effective, regular reviews of board performance
should be carried out and assessments made of gaps in skills or experience
amongst the members. BlackRock believes it is beneficial for new directors to be
brought onto the board periodically to refresh the group’s thinking and to
ensure both continuity and adequate succession planning. In identifying
potential candidates, boards should take into consideration the multiple
dimensions of diversity, including personal factors such as gender, ethnicity,
and age; as well as professional characteristics, such as a director’s industry,
area of expertise, and geographic location. The board should review these
dimensions of the current directors and how they might be augmented by incoming
directors. We believe that directors are in the best position to assess the
optimal size for the board, but we would be concerned if a board seemed too
small to have an appropriate balance of directors or too large to be
effective.
There
are matters for which the board has responsibility that may involve a conflict
of interest for executives or for affiliated directors. BlackRock believes that
shareholders’ interests are best served when the board forms committees of fully
independent directors to deal with such matters. 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 with a related party or to investigate a
significant adverse event.
Auditors
and audit-related issues
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. In the absence of robust disclosures, we may reasonably
conclude that companies are not adequately managing risk.
BlackRock
recognizes the critical importance of financial statements, which should provide
a true and fair picture of a company’s financial condition. We will hold the
members of the audit committee or equivalent responsible for overseeing the
management of the audit function. We take particular note of cases involving
significant financial restatements or ad hoc notifications of material financial
weakness.
The
integrity of financial statements depends on the auditor being free of any
impediments to being an effective check on management. To that end, we believe
it is important that auditors are, and are seen to be, independent. Where the
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.
Capital
structure, mergers, asset sales and other special transactions
The
capital structure of a company is critical to its owners, the 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 central to the rights of ownership and we believe strongly in
one vote for one share as a guiding principle that supports good corporate
governance. Shareholders, as the residual claimants, have the strongest interest
in protecting company value, and voting power should match economic exposure.
We
are concerned that the creation of a dual share class may result in an
over-concentration of power in the hands of a few shareholders, thus
disenfranchising other shareholders and amplifying the potential conflict of
interest, which the one share, one vote principle is designed to mitigate.
However, we recognize that in certain circumstances, companies may have a valid
argument for dual-class listings, at least for a limited period of time. We
believe that such companies should review these dual-class structures on a
regular basis or as company circumstances change. Additionally, they should
receive shareholder approval of their capital structure on a periodic basis via
a management proposal in the company’s proxy. 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 shareholders.
Boards proposing a transaction need to clearly explain the economic and
strategic rationale behind it. We will review a proposed transaction to
determine the degree to which it enhances long-term shareholder value. We would
prefer that 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 executives’ and/or board members’ financial interests in a given
transaction have not adversely affected their ability to place shareholders’
interests before their own. Where the transaction involves related parties, we
would expect the recommendation to support it to come from the independent
directors and it is good practice to be approved by a separate vote of the
non-conflicted shareholders.
BlackRock
believes that shareholders 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. We believe that shareholders are
broadly capable of making decisions in their own best interests. We expect any
so-called ‘shareholder rights plans’ proposed by a board to be subject to
shareholder approval upon introduction and periodically thereafter for
continuation.
Compensation
and benefits
BlackRock
expects a company’s board of directors to put in place a compensation structure
that incentivizes and rewards executives appropriately and is aligned with
shareholder interests, particularly generating sustainable long-term shareholder
returns. We would expect the compensation committee to take into account the
specific circumstances of the company and the key individuals the board is
trying to incentivize. We encourage companies to ensure that their compensation
plans incorporate appropriate and challenging performance conditions consistent
with corporate strategy and market practice. We use third party research, in
addition to our own analysis, to evaluate existing and proposed compensation
structures. We hold members of the compensation committee or equivalent board
members accountable for poor compensation practices or structures.
BlackRock
believes that there should be a clear link between variable pay and company
performance that drives shareholder returns. We are not supportive of one-off or
special bonuses unrelated to company or individual performance. We acknowledge
that the use of peer group evaluation by compensation committees can help ensure
competitive pay; however, we are concerned when increases in total compensation
at a company are justified solely on peer benchmarking rather than
outperformance. We support incentive plans that foster the sustainable
achievement of results relative to competitors. The vesting timeframes
associated with incentive plans should facilitate a focus on long-term value
creation. We believe consideration should be given to building claw back
provisions into incentive plans such that executives would be required to forgo
rewards when they are not justified by actual performance. Compensation
committees should guard against contractual arrangements that would entitle
executives to material compensation for early termination of their contract.
Finally, pension contributions and other deferred compensation arrangements
should be reasonable in light of market practice.
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 their
independence or aligning their interests too closely with those of the
management, whom they are charged with overseeing.
Environmental
and social issues
Our
fiduciary duty to clients is to protect and enhance their economic interest in
the companies in which we invest on their behalf. It is within this context that
we undertake our corporate governance activities. We believe that well-managed
companies will deal effectively with the material environmental and social
(“E&S”) factors relevant to their businesses. Robust disclosure is essential
for investors to effectively gauge companies’ business practices and planning
related to E&S risks and opportunities.
BlackRock
expects companies to issue reports aligned with the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD) and the standards put
forward by the Sustainability Accounting Standards Board (SASB). We view the
SASB and TCFD frameworks as complementary in achieving the goal of disclosing
more financially material information, particularly as it relates to
industry-specific metrics and target setting. TCFD’s recommendations provide an
overarching framework for disclosure on the business implications of climate
change, and potentially other E&S factors. We find SASB’s industry-specific
guidance (as identified in its materiality map) beneficial in helping companies
identify and discuss their governance, risk assessments, and performance against
these key performance indicators (KPIs). Any global standards adopted, peer
group benchmarking undertaken, and verification processes in place should also
be disclosed and discussed in this context.
BlackRock
has been engaging with companies for several years on disclosure of material
E&S factors. Given the increased understanding of sustainability risks and
opportunities, and the need for better information to assess them, we
specifically ask companies to:
1)publish
a disclosure in line with industry-specific SASB guidelines by year-end, if they
have not already done so, or disclose a similar set of data in a way that is
relevant to their particular business; and
2)disclose
climate-related risks in line with the TCFD’s recommendations, if they have not
already done so. This should include the company’s plan for operating under a
scenario where the Paris Agreement’s goal of limiting global warming to less
than two degrees is fully realized, as expressed by the TCFD
guidelines.
See
our commentary on our approach to engagement on TCFD and SASB aligned reporting
for greater detail of our expectations.
We
will use these disclosures and our engagements to ascertain whether companies
are properly managing and overseeing these risks within their business and
adequately planning for the future. In the absence of robust disclosures,
investors, including BlackRock, will increasingly conclude that companies are
not adequately managing risk.
We
believe that when a company is not effectively addressing a material issue, its
directors should be held accountable. We will generally engage directly with the
board or management of a company when we identify issues. We may vote against
the election of directors where we have concerns that a company might not be
dealing with E&S factors appropriately. Sometimes we may reflect such
concerns by supporting a shareholder proposal on the issue, where there seems to
be either a significant potential threat or realized harm to shareholders’
interests caused by poor management of material E&S factors.
In
deciding our course of action, we will assess the company’s disclosures and the
nature of our engagement with the company on the issue over time, including
whether:
•The
company has already taken sufficient steps to address the concern
•The
company is in the process of actively implementing a response
•There
is a clear and material economic disadvantage to the company in the near-term if
the issue is not addressed in the manner requested by the shareholder
proposal
We
do not see it as our role to make social or political judgments on behalf of
clients. Our consideration of these E&S factors is consistent with
protecting the long-term economic interest of our clients’ assets. We expect
investee companies to comply, at a minimum, with the laws and regulations of the
jurisdictions in which they operate. They should explain how they manage
situations where local laws or regulations that significantly impact the
company’s operations are contradictory or ambiguous to global
norms.
Climate
risk
Within
the framework laid out above, as well as our guidance on “How
BlackRock Investment Stewardship engages on climate risk,”
we believe that climate presents significant investment risks and opportunities
that may impact the long-term financial sustainability of companies. We believe
that the reporting frameworks developed by TCFD and SASB provide useful guidance
to companies on identifying, managing, and reporting on climate-related risks
and opportunities.
We
expect companies to help their investors understand how the company may be
impacted by climate risk, in the context of its ability to realize a long-term
strategy and generate value over time. We expect companies to convey their
governance around this issue through their corporate disclosures aligned with
TCFD and SASB. For companies in sectors that are significantly exposed to
climate-related risk, we expect the whole board to have demonstrable fluency in
how climate risk affects the business and how management approaches assessing,
adapting to, and mitigating that risk.
Where
a company receives a shareholder proposal related to climate risk, in addition
to the factors laid out above, our assessment will take into account the
robustness of the company’s existing disclosures as well as our understanding of
its management of the issues as revealed through our engagements with the
company and board members over time. In certain instances, we may disagree with
the details of a climate-related shareholder proposal but agree that the company
in question has not made sufficient progress on climate-related disclosures. In
these instances, we may not support the proposal, but may vote against the
election of relevant directors.
General
corporate governance matters and shareholder protections
BlackRock
believes that shareholders have a right to timely and detailed information on
the financial performance and viability of the companies in which they invest.
In addition, companies should also publish information on the governance
structures in place and the rights of shareholders to influence these. The
reporting and disclosure provided by companies help shareholders assess whether
their economic interests have been protected and the quality of the board’s
oversight of management. 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.
BlackRock’s
oversight of our investment
stewardship
activities
Oversight
We
hold ourselves to a very high standard in our investment stewardship activities,
including proxy voting. This function is executed by a team called BlackRock
Investment Stewardship (“BIS”) which is comprised of BlackRock employees who do
not have other responsibilities other than their roles in BIS. BIS is considered
an investment function. The team does not have sales responsibilities.
BlackRock
maintains three regional advisory committees (“Stewardship Advisory Committees”)
for (a) the Americas; (b) Europe, the Middle East and Africa (“EMEA”); 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 the proxy
voting guidelines covering markets within each respective region (“Guidelines”).
In
addition to the regional Stewardship Advisory Committees, the Investment
Stewardship Global Oversight Committee (“Global Committee”) is a risk-focused
committee, comprised of senior representatives from various BlackRock investment
teams, BlackRock’s Deputy General Counsel, the Global Head of Investment
Stewardship (“Global Head”), and other senior executives with relevant
experience and team oversight.
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 Global Corporate Governance
& Engagement 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 regular 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 BIS corporate
governance engagement program and Guidelines.
BIS
carries out engagement with companies, monitors and 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 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/or refer such matters to the appropriate regional Stewardship Advisory
Committees for review, discussion and guidance prior to making a voting
decision.
Vote
execution
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 best long-term economic interests of
shareholders, 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, BlackRock will normally vote on specific proxy issues
in accordance with the Guidelines for the relevant market. The Guidelines are
reviewed regularly and are amended consistent with changes in the local market
practice, as developments in corporate governance occur, or as otherwise deemed
advisable by BlackRock’s Stewardship Advisory Committees. BIS 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 best 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 their assessment
of the particular transactions or other matters at issue.
In
certain markets, proxy voting involves logistical issues which can affect
BlackRock’s 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 shareblocking
or overly burdensome administrative requirements.
As
a consequence, BlackRock votes proxies on a “best-efforts” basis. In addition,
BIS may determine that it is generally in the best interests of BlackRock’s
clients not to vote proxies if the costs (including but not limited to
opportunity costs associated with shareblocking constraints) associated with
exercising a vote are expected to outweigh the benefit the client would derive
by voting on the proposal.
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. Portfolio
managers may from time to time reach differing views on how best 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 one another. However, because BlackRock’s clients are mostly
long-term investors with long-term economic goals, ballots are frequently cast
in a uniform manner.
Conflicts
management policies and procedures
BIS
maintains the following 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 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 protect and enhance the economic value of
the companies in which BlackRock invests on behalf of clients.
•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.
•Determined
to engage, in certain instances, an independent fiduciary to vote proxies 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 fiduciary provides
BlackRock’s proxy voting agent with instructions, in accordance with the
Guidelines, as to how to vote such proxies, and BlackRock’s proxy voting agent
votes the proxy in accordance with the independent fiduciary’s determination.
BlackRock uses an independent fiduciary to vote proxies of (i) any company that
is affiliated with BlackRock, Inc., (ii) any public company that includes
BlackRock employees on its board of directors, (iii) The PNC Financial Services
Group, Inc., (iv) any public company of which a BlackRock, Inc. board member
serves as a senior executive, and (v) companies when legal or regulatory
requirements compel BlackRock to use an independent fiduciary. In selecting an
independent fiduciary, we assess several characteristics, including but not
limited to: independence, an ability to analyze proxy issues and vote in the
best economic interest of our clients, reputation for reliability and integrity,
and operational capacity to accurately deliver the assigned votes in a timely
manner. We may engage more than one independent fiduciary, in part in order to
mitigate potential or perceived conflicts of interest at an independent
fiduciary. The Global Committee appoints and reviews the performance of the
independent fiduciar(ies), generally on an annual basis.
When
so authorized, BlackRock acts as a securities lending agent on behalf of Funds.
With regard to the relationship between securities lending and proxy voting,
BlackRock’s approach is driven by our clients’ economic interests. The decision
whether to recall securities on loan to vote is based on a formal analysis of
the revenue producing value to clients of loans, against the assessed economic
value of casting votes. Generally, we expect that the likely economic value to
clients of casting votes would be less than the securities lending income,
either because, in our assessment, the resolutions being voted on will not have
significant economic consequences or because the outcome would not be affected
by BlackRock recalling loaned securities in order to vote. BlackRock also may,
in our discretion, determine that the value of voting outweighs the cost of
recalling shares, and thus recall shares to vote in that instance.
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
issue-specific 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.
These 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, these Guidelines do not
indicate how BIS will vote in every instance. Rather, they share our view about
corporate governance issues generally, and provide insight into how we typically
approach issues that commonly arise on corporate ballots.
Reporting
and vote transparency
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, an annual engagement and voting statistics report, and our
full voting record to our website. On a quarterly basis, we publish regional
reports which provide an overview of our investment stewardship engagement and
voting activities during the quarter, including market developments, speaking
engagements, and engagement and voting statistics. Additionally, we make public
our market-specific voting guidelines for the benefit of clients and companies
with whom we engage.
This
document is provided for information purposes only and must not be relied upon
as a forecast, research, or investment advice. BlackRock is not making any
recommendation or soliciting any action based upon the information contained
herein and nothing in this document should be construed as constituting an offer
to sell, or a solicitation of any offer to buy, securities in any jurisdiction
to any person. This information provided herein does not constitute financial,
tax, legal or accounting advice, you should consult your own advisers on such
matters.
The
information and opinions contained in this document are as of January 2020
unless it is stated otherwise and may change as subsequent conditions vary. The
information and opinions contained in this material are derived from proprietary
and non-proprietary sources deemed by BlackRock to be reliable, are not
necessarily all-inclusive and are not guaranteed as to accuracy. Although such
information is believed to be reliable for the purposes used herein, BlackRock
does not assume any responsibility for the accuracy or completeness of such
information. Reliance upon information in this material is at the sole
discretion of the reader. Certain information contained herein represents or is
based upon forward-looking statements or information. BlackRock and its
affiliates believe that such statements and information are based upon
reasonable estimates and assumptions. However, forward-looking statements are
inherently uncertain, and factors may cause events or results to differ from
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forward-looking statements and information.
Prepared
by BlackRock, Inc.
©2020
BlackRock, Inc. All rights reserved.
BlackRock
B
BrownADVISORY
Thoughtful
Investing.
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.20
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.
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
forward any relevant research the firm obtains to the party that will assume
proxy voting authority, as identified by the client.
To
facilitate the proxy voting process, the firm has engaged Institutional
Shareholder Services Inc. (“ISS”), an unbiased, 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.
On
a regular basis, the firm’s portfolio managers are supplied with a list of
upcoming proxies issued for companies that are actively recommended by the firm.
Except in situations identified as presenting material conflicts of interest,
the portfolio manager who follows an issuer may make the final voting decision
based on a variety of considerations, including their review of relevant
materials, their knowledge of the company, and ISS recommendations. In
circumstances where the firm’s managers do not provide a vote recommendation,
proxies will be voted according to ISS recommendations, unless specific
guidelines provided to ISS by the firm specify otherwise. Proxies are generally
voted in accordance with ISS recommendations for all client types, as described
further herein.
In
keeping with its fiduciary obligations to clients, the firm considers each proxy
voting proposal on its own merits and an independent determination is made based
on the relevant facts and circumstances. Proxy proposals include a wide range of
matters. The firm generally votes with management on routine matters and takes a
more case-by-case approach regarding non-routine matters. For socially
responsible investing (“SRI” or “green”) clients, the firm follows ISS
guidelines that focus on enhanced environmental, social and governance practices
(“ESG Guidelines”). For Taft-Hartley clients, the firm follows the ISS
Taft-Hartley Guidelines. Although ISS guidelines are generally followed, the
firm may depart from these guidelines when it deems such departure necessary in
the best interest of the client.
____________________________
20
The
firm votes proxies on behalf of separate account clients, firm-managed mutual
fund shareholders, and, where applicable, employee benefit plan participants and
beneficiaries.
Below
is a summary of guidelines, based on the ISS approach, for voting on common
proxy questions. 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. 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 compromise clients’ best interests or that the
firm determines may be detrimental to the underlying value of client
positions.
Routine
Matters
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
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 generally supports independent boards of directors comprised of members
with diverse backgrounds, a breadth and depth of relevant experience, and a
track record of positive performance. Management proposals to limit director
liability consistent with state laws and director indemnification provisions
will be supported because it is important for companies to be able to attract
qualified candidates.
Separation
of the roles of Chairman and CEO is 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 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 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.
Voting
The
firm generally supports proposals to require a majority vote standard for the
election of directors, rather than plurality voting. Proposals seeking to allow
cumulative voting will be supported where the issuer does not have majority
voting for the election of directors. Annual election of directors is supported,
whereas the firm will vote against efforts to created staggered or classified
boards. The firm supports a simple majority voting structure, since
supermajority vote requirements impede shareholder action on important ballot
items.
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 is a
lack of independence, 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 mandatory auditor rotation with reasonable
frequency (usually not less than five to seven years).
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 the financial benefits are minimal and there is a decrease
in shareholder rights. Shareholder proposals to change the company’s place of
incorporation 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.
Non-Routine
Matters
Corporate
Restructurings, Mergers and Acquisitions
These
proposals should be examined on a case-by-case basis because they are an
extension of an investment decision.
Proposals
Affecting Shareholder Rights
The
firm 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 supports
proposals that allow shareholders to vote on whether to implement a “poison
pill” plan (shareholder rights plan). In certain circumstances, the firm will
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 supports anti- greenmail proposals, which prevent
companies from buying back company stock at significant premiums from a large
shareholder.
Shareholder
Action
The
firm supports proposals that allow shareholders to call special meetings, with a
minimum threshold of shareholders (e.g., 10-15%) requesting such a meeting.
Proposals that allow shareholders to act by written consent are also 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.
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. Share count and voting power dilution should be limited.
The
firm generally favors the grant of options to executives, since options 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 options, 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 options are reviewed on a case-by-case basis, but are
generally opposed. The firm 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 typically opposes caps on executive
stock options, since tying an executive’s compensation to the performance of the
company provides incentive to maximize share value.
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 are evaluated on
a case-by-case basis. In general, such proposals will not be supported if they
are not supported by management, unless 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.
Although
policy decisions are typically better left to management and the board, the firm
may vote in favor of a reasonable shareholder proposal if supporting the
proposal will mitigate significant risk to long-term shareholder value stemming
from governance practices, environmental regulation, or legal and reputational
issues. Companies should disclose such risks and efforts to mitigate them. In
egregious cases where a company has not adequately mitigated such risks, the
firm may vote against directors. Given that the firm’s SRI clients may approach
environmental, social and governance issues from a different perspective, the
firm follows ISS ESG Guidelines when voting proxies for SRI
clients.
Taft-Hartley
Clients and Socially Responsible Investing (“SRI”) Clients For
Taft-Hartley clients, the firm follows the ISS Taft-Hartley Guidelines, which
entail an additional level of analysis relevant to the fiduciary responsibility
of Taft-Hartley investors. These guidelines comply with the fiduciary duties
imposed by the Taft Hartley Labor Act and ERISA, and the guidelines are
consistent with American Federation of Labor and Congress of Industrial
Organizations (“AFL-CIO”) guidelines and annual Key Vote Survey. Similarly, for
SRI clients, the firm follows the ISS ESG Guidelines, which focus on disclosure
and mitigation of company risk with regard to environmental, social and
governance issues. Both sets of guidelines generally support proposals relating
to compliance with environmental laws, health and safety regulations,
nondiscrimination laws, and international labor or human rights standards,
including proposals that tie executive compensation to such issues. For example,
the ESG guidelines recognize that environmental, social and governance
performance factors should be an important component in evaluating executive
performance and compensation.
Companies’
labor practices, including compliance with Equal Employment Opportunity
Commission (“EEOC”) requirements and treatment of union members, are considered
when evaluating director performance for Taft- Hartley clients and determining
whether to support various shareholder proposals. Increased diversity in board
membership is also generally supported. For SRI clients, proposals that seek to
evaluate overall director performance based on environmental and social criteria
are generally supported, including evaluating directors’ commitment to
establishing broad sustainable business practices with regard to reporting on
and mitigating environmental, social and governance risks.
For
both types of clients, International Labor Organization standards are supported
and companies are encouraged to adopt such standards. Where a company has
violated international human rights standards, review of director performance
and oversight is warranted. Further, if directors have not provided adequate
oversight to ensure that basic human rights standards are met, or if a company
is subject to regulatory or legal action due to human rights violations, the
firm will consider voting against certain directors on behalf of its Taft
Hartley and SRI clients.
Proposed
mergers or acquisitions are examined somewhat differently for Taft Hartley
clients and SRI clients than for other clients. Whereas the firm generally
examines whether a transaction is likely to maximize shareholder return, for
Taft Hartley clients and SRI clients, the firm will support shareholder
proposals seeking the company to consider effects of the transaction on the
company’s stakeholders.
Further,
for SRI clients and Taft Hartley clients, consideration is given to a company’s
impact on the environment, so the firm will consider withholding votes from, or
voting against, directors who do not exercise their fiduciary duty as it relates
to environmental risk. Indeed, any proposal requesting that a company adopt a
policy concerning these matters will be scrutinized to ensure it seeks enhanced
environmental disclosure or practices and does not limit environmental
disclosure or consideration. For SRI clients, proposals are scrutinized if they
request that a company adopt a policy concerning bioengineering or
nanotechnology. Further, consideration is given to a company’s impact on the
environment, as well as the regulatory risk a company may face by not adopting
environmentally responsible policies.
For
both Taft Hartley clients and SRI clients, proposals requesting the following
actions will generally be supported:
Governance
& Business Ethics
•increased
disclosure of a company’s business ethics and code of conduct, as well as of its
activities that relate to social welfare;
•development
of sustainable business practices, such as animal welfare policies, human rights
policies, and fair lending policies; and
•disclosure
of a company’s lobbying practices and political and charitable
spending.
Labor
Standards & Human Rights
•enhanced
rights of workers, and consideration of the communities and broader constituents
in the areas in which companies do business;
•increased
disclosure regarding impact on local stakeholders, workers’ rights and human
rights;
•adherence
to codes of conduct relating to labor standards, human rights conventions and
corporate responsibility; and
•independent
verification of a company’s contractors’ compliance with labor and human rights
standards.
Environment,
Health & Safety
•adoption
of the Equator Principles – a benchmark regarding social and environmental risk
in project financing;
•improved
sustainability reporting and disclosure about company practices which impact the
environment;
•increased
disclosure of environmental risk, compliance with international environmental
conventions and adherence to environmental principles;
•development
of greenhouse gas emissions reduction goals, recycling programs, and other
proactive means to mitigate a company’s environmental impact;
•consideration
of energy efficiency and renewable energy sources in a company’s development and
business strategy;
•increased
disclosure regarding health and safety issues, including the labeling of the use
of genetically modified organisms, the elimination or reduction of toxic
emissions and use of toxic chemicals in manufacturing, and the prohibition of
tobacco sales to minors;
•reporting
on a company’s drug re-importation guidelines, as well as on ethical
responsibilities relating to drug distribution and manufacture; and
•additional
safety standards regarding these matters.
International
Corporate Governance
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 business with, receives
compensation from, or sits on the board of, a particular issuer or closely
affiliated entity (including officers and directors thereof), 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 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, in consultation with counsel, 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:
i)in
the case of a Fund, the firm shall contact the Fund board for a review and
determination;
ii)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
iii)in
cases when echo voting is not possible, the firm may defer to ISS
recommendations or confer with counsel to ensure that the proxy is voted in the
best interest of the client.
If
the aforementioned options would not 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
all 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 may be unduly burdensome or expensive, or
otherwise not in the best economic interest of the clients, such as (by example
and without limitation) when foreign proxy issuers impose unreasonable or
expensive voting or holding requirements or when the costs to effect a vote
would be uneconomic relative to the value of the client’s investment in the
issuer.
____________________________
The
information contained herein is the property of Brown Advisory and may not be
disclosed in whole or part to anyone outside the firm without the prior approval
of Compliance.
CAUSEWAY
CAPITAL MANAGEMENT LLC
PROXY
VOTING POLICIES AND PROCEDURES
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 has 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
Capital Management LLC
December
31, 2019
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.
•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.
Causeway evaluates compensation plans on a case-by-case basis. 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.
•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.
Causeway
Capital Management LLC
December
31, 2019
Causeway
generally votes with
management
regarding:
•social
issues – Causeway believes that it is management’s responsibility to handle such
issues, and generally votes with management on these types of issues, or
abstains. Causeway will oppose social proposals that it believes will be a
detriment to the investment performance of a portfolio company.
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 and Chief Compliance
Officer decides if they involve a material conflict of interest.
Causeway
Capital Management LLC
December
31, 2019
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;
(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.
Causeway
Capital Management LLC
December
31, 2019
DD
J CAPITAL MANAGEMENT, LLC
PROXY
VOTING POLICIES AND PROCEDURES Updated March 13, 2012
I.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"),
DDJ Capital Management, LLC ("DDI"), a registered investment adviser, 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. Because our authority to vote proxies on behalf
of our clients is established by our advisory contracts with such clients, the
Policies have been tailored to reflect these specific contractual
obligations.1
The Policies also reflect the long-standing fiduciary standards and
responsibilities for ERISA accounts set out in Department of Labor Bulletin
94-2, 29 C.F.R. 2509.94-2 (July 29, 1994).
II.Statement
of Proxy Voting Policy
It
is the policy of DDJ to vote all proxies in the best interests and for the
benefit of its clients. We believe that this 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.
DDJ
primarily manages investments in high-yield and distressed debt, rather than
equity, securities. As a result, DDJ does not receive proxies in connection with
most of our clients' investment positions. However, certain of our client
accounts do hold equity securities. Many of the proxies received by DDJ with
respect to securities held in client accounts relate to special situations, such
as the restructuring of an issuer that is emerging or recently emerged from
bankruptcy, that is in financial distress or that has significant debt
obligations but improving fundamentals. DDJ 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, DDJ generally
reviews and makes a voting decision on each matter presented in such proxy on an
individual, case-by-case basis. DDJ generally gives similar, case-by-case
treatment to proxies with respect to securities of other issuers, with the
exception of routine matters noted below. Normally, voting decisions are made by
the portfolio manager or research analyst responsible at the time of the vote
for monitoring the corporate events of the particular
issuer
of the securities to be voted. DDJ believes such individualized consideration of
proxy voting decisions best serves our clients' interests. For certain more
routine matters that are commonly presenting to shareholders for vote and that
do not involve issuers in special situations or other circumstances requiring
individual analysis, DDJ has established general voting guidelines that are set
forth in Section VJJ of these Policies. However, with respect to any particular
proxy, DDJ is not obligated to follow these general voting
guidelines.
In
certain circumstances, DDJ may elect to not vote proxies 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 DDJ to analyze
the material or cast an informed vote by the voting deadline; or (c) DDJ
concludes that the costs of voting a proxy outweigh any potential benefits to
its clients.
III.
Proxy Voting Procedures
DDJ
has designated an internal proxy administrator (the "Administrator").
The Administrator is responsible for coordinating the review and voting of
client proxies. With respect to pending proxy matters, the Administrator reviews
on a regular basis the information provided to us electronically by the
custodians for our clients (generally, in whose name (or nominee name) the
security has been registered).2
Upon concluding that a proxy has been distributed to shareholders by an issuer
in which a client has a long position, the Administrator monitors incoming
regular mail for paper copies of such proxies. The Administrator follows up
directly with the custodian, issuer and/or Automatic Data Processing, Inc.
("ADP")
in the event that the issuer (or other shareholder service) has not timely
delivered such paper proxy to DDJ.
Following
receipt of a proxy, the Administrator reviews the proxy and the matters to be
voted therein. The Administrator also cross-checks the shareholdings information
contained in the proxy with the applicable client holdings report to confirm
that the ownership information on file with ADP, the custodian and/or the issuer
matches our internal records; to the extent that it does not, the Administrator
will attempt to reconcile the discrepancy directly with the applicable
custodian. Furthermore, any material conflicts of interest identified by the
Administrator are resolved as described in Section IV below. The Administrator
then distributes the proxy to the applicable portfolio manager or research
analyst so that s/he can review the proxy in accordance with the procedures
outlined in Section II above. If the portfolio manager or research analyst is
aware of any matter that may constitute a material conflict of interest, s/he
will contact the Administrator such that the conflict may be addressed in
accordance with the procedures described in Section IV below. Otherwise, the
portfolio manager or research analyst will return the completed proxy to the
Administrator. The Administrator then provides the Chief Compliance Officer (or
a designee) with a copy of the completed proxy for review. If the Chief
Compliance Officer is aware of any material conflict of interest, s/he will
contact the Administrator such that the conflict may be addressed in accordance
with the procedures described in Section IV below. Otherwise, the Administrator
votes the proxy in accordance with the instructions provided by the portfolio
manager or research analyst typically either
electronically
(typically via www.proxyvote.com)
or via paper ballot, as applicable.3
After the Administrator has voted the proxy, the Administrator keeps a copy of
the proxy, together with a completed internal checklist of proxy procedures
maintained by DDJ (the form of which is attached hereto as Exhibit
A),
for record keeping purposes.
In
the event that the Administrator is out of the office, the DDJ Head Trader
assumes responsibility for the timely internal distribution and voting of
proxies.
IV.
Conflicts of Interest
From
time to time, DDJ (and/or its affiliates) may have a material conflict of
interest with respect to a matter to be voted. For example, it is possible that
DDJ (or one of its affiliates) may have a very significant business relationship
with either the company whose stock is being voted, the person soliciting the
proxy or a third party that has a material interest in the outcome of the proxy
vote. If the Administrator identifies or is notified of a potential material
conflict of interest, the Administrator will convene a meeting of DDJ's internal
proxy committee, which has been created to address situations when such
conflicts arise. The internal proxy committee, which consists of one or more
members of the DDJ legal department and such other DDJ personnel as may be
designated to serve on the committee from time to time, will then meet to
determine whether voting on such proxy matter presents a material conflict of
interest. In the event that the internal committee concludes that there is a
material conflict of interest, DDJ generally will request a waiver of the
conflict or voting instructions from the client, a representative of the client
or an appropriate independent third party. Specifically:
•for
investment fund clients of DDJ that have established an independent board of
advisors, DDJ will disclose the conflict to such board of advisers of the
applicable investment fund, and either vote the proxy as instructed by the
applicable board or obtain a waiver for DDJ to vote the proxy;
•for
investment fund clients of DDJ that have not established a board of advisors,
DDJ will disclose the conflict (a) to such fund's independent accountants or
another unaffiliated third party advisor selected by DDJ, and vote the proxy in
accordance with the instructions of such proxy advisor, or (b) to the underlying
investors (e.g., limited partners) of such investment fund and seek either
voting instructions or a waiver of the conflict directly from a majority in
interest with respect to such investors;
•for
any commingled vehicle established as a trust, DDJ will disclose the conflict to
the trustee of such entity (provided that the trustee is unaffiliated with DDJ),
and seek either voting instructions or a waiver of the conflict from such
trustee;
•for
ERISA accounts, DDJ will disclose the conflict to the plan sponsor, trustee or
other named fiduciary for the plan and seek either voting instructions or a
waiver of the conflict from such fiduciary; and
•for
other non-ERISA separate accounts, DDJ will disclose the conflict to the
underlying client and seek either voting instructions or a waiver of the
conflict directly from such client.
In
certain cases, depending on the voting authority provided to DDJ by the
underlying client, DDJ may instruct the client's custodian to vote the proxy in
accordance with DDJ's direction.
In
the event that the client, client representative or other third party, as the
case may be, does not desire to direct the vote of the proxy matter in question,
DDJ 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, DDJ will not vote the proxy.
V.Maintenance
of Proxy Voting Records
As
required by Rule 204-2 under the Advisers Act, DDJ maintains records of proxies
that it has voted on behalf of its clients. These records include:
(i)a
copy of DDJ's internal policies and procedures with respect to proxy voting, as
updated from time to time;
(ii)copies
of proxy statements received regarding securities held in client accounts,
unless the materials are available electronically through the SEC's EDGAR
system;
(iii)a
record of each vote cast on behalf of our clients;
(iv)a
copy of any internal documents created by DDJ that were material to making the
decision how to vote proxies on behalf of its clients; and
(v)each
written client request for proxy voting records and DDJ's written response to
any (written or oral) client request for such records.
With
respect to accounts managed on behalf of any plan subject to ERISA, DDJ also
maintains accurate proxy voting records to enable the named fiduciary of such
accounts to determine whether DDJ is fulfilling its ERISA obligations with
respect to a particular account. DDJ will maintain these proxy voting books and
records for a period of six years. These records will be maintained for at least
the first two years in DDJ's office.
VI.Disclosure
DDJ
will provide each client a summary of these Policies. Alternatively, or upon the
request of any client, DDJ will provide such client copies of its full Policies
as well as information with respect to how DDJ voted proxies on behalf of such
client.
VII.
Proxy Voting Guidelines
The
following guidelines are not exhaustive and do not include all potential voting
issues. Because proxy voting issues and the circumstances of individual
portfolio companies are so varied, there may be instances when DDJ will not vote
in strict adherence to these guidelines. In addition, votes on matters not
covered by these guidelines will be determined in accordance with the policies
and procedures principles set forth above. For example, proxy votes that present
company-specific issues of a non-routine nature may be more appropriately
handled on a case-by-case basis, as described above. At any time, DDJ 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 DDJ to vote differently
for different clients on the same matter.
I.
The Board of Directors
A.Director
Nominees in Uncontested Elections
Vote
for
director
nominees, examining the following factors:
•long-term
corporate performance record of the company's stock relative to a market index;
and
•composition
of board and key board committees.
In
certain cases, and when information is readily available, we may also
review:
•corporate
governance provisions and takeover activity;
•board
decisions regarding executive pay;
•board
decisions regarding majority-supported shareholder proposals in back-to-back
years;
•director
compensation; and
•number
of other board seats held by nominee.
B.Majority
of Independent Directors
Vote
for
proposals
that the board be comprised of a majority of independent directors.
Vote
for
proposals
that request that the board audit, compensation and/or nominating committees
include independent directors exclusively.
C.Director
and Officer Indemnification and Liability Protection
Vote
on a case-by-case
basis
proposals concerning director and officer indemnification and liability
protection.
Vote
against
proposals
to limit or eliminate entirely director and officer liability for monetary
damages for violating the duty of care.
Vote
against
indemnification
proposals that would expand coverage beyond just legal expenses to include
coverage for acts or omissions, such as gross negligence or worse, that are more
serious violations of fiduciary obligations than mere carelessness.
Vote
for
only
those proposals that provide such expanded coverage in cases when a director's
or officer's legal defense was unsuccessful if: (1) the director or officer was
found to have acted in good faith and in a manner that he reasonably believed
was in the best interests of the company, and
(2)
only if the director's legal expenses would be covered.
II.Proxy
Contests
A.
Director Nominees in Contested Elections
Vote
on a case-by-case
basis
when the election of directors is contested, examining some or all of the
following factors:
•long-term
financial performance of the company relative to its industry;
•management's
track record;
•background
to the proxy contest;
•qualifications
of director nominees (both slates);
•evaluation
of what each side is offering shareholders, as well as the likelihood that the
proposed objectives and goals can be met; and
•stock
ownership positions of director nominees.
III.Auditors
Ratifying Auditors
Vote
for
proposals
to ratify auditors, unless it appears that: an auditor has a financial interest
in or association with the company that impairs the auditor's independence; or
there is reason to believe that the independent auditor has rendered an opinion
which is neither accurate nor indicative of the company's financial
position.
IV.Proxy
Contest Defenses
A.
Shareholder Ability to Call Special Meetings
Vote
against
proposals
to restrict or prohibit shareholder ability to call special
meetings.
Vote
for
proposals
that remove restrictions on the right of shareholders to act independently of
management.
B.Shareholder
Ability to Act by Written Consent
Vote
against
proposals
to restrict or prohibit shareholder ability to take action by written
consent.
Vote
for
proposals
to allow or make easier shareholder action by written consent.
C.Shareholder
Ability to Alter the Size of the Board
Vote
for
proposals
that seek to fix the size of the board.
Vote
against
proposals
that give management the ability to alter the size of the board without
shareholder approval.
V.Capital
Structure
Common
Stock Authorization
Vote
on a case-by-case
basis
proposals to increase the number of shares of common stock authorized for
issue.
B.Stock
Distributions: Splits and Dividends
Vote
for
management
proposals to increase common share authorization for a stock split, provided
that the split does not result in an increase of authorized but unissued shares
of more than 100% after giving effect to the shares needed for the
split.
C.Reverse
Stock Splits
Vote
against
management
proposals to implement a reverse stock split.
D.Share
Repurchase Programs
Vote
for
management
proposals to institute open-market share repurchase plans in which all
shareholders may participate on equal terms.
VI.Executive
and Director Compensation
In
general, we vote on a case-by-case
basis
on executive and director compensation plans, with the view that viable
compensation programs reward the creation of stockholder wealth by having a high
payout sensitivity to increases in shareholder value.
In
evaluating a pay plan, we may consider its dilutive effect both on shareholder
wealth and on voting power. We may consider equity-based compensation along with
cash components of pay. Administrative features may also be factored into our
vote. For example, our policy is
that
the plan should generally be overseen by a committee of independent directors;
insiders should not generally serve on compensation committees.
Other
factors, such as repricing underwater stock options without shareholder
approval, may cause us to vote against a plan. Additionally, in some cases we
would vote against a plan deemed unnecessary.
A.Proposals
to Limit Executive and Director Pay
Vote
on a case-by-case
basis
all proposals that seek additional disclosure of executive and director pay
information.
Vote
on a case-by-case
basis
all other proposals that seek to limit executive and director pay.
Vote
for
proposals
to expense options, unless the company has already publicly committed to
expensing options by a specific date.
B.Employee
Stock Ownership Plans (ESOPs)
Vote
for
proposals
that request shareholder approval in order to implement an ESOP or to increase
authorized shares for existing ESOPs, except in cases when the number of shares
allocated to the ESOP is "excessive" (i.e., generally greater than 5% of
outstanding shares).
C.401(k)
Employee Benefit Plans
Vote
for
proposals
to implement a 401(k) savings plan for employees. VII.
Mergers and Corporate Restructurings
Vote
on a case-by-case
basis
proposals related to mergers and acquisitions, taking into account some or all
of the following factors:
•anticipated
financial and operating benefits;
•offer
price (cost vs. premium);
•prospects
of the combined companies;
•how
the deal was negotiated; and
•changes
in corporate governance and their impact on shareholder rights.
Exhibit
A
Proxy
Checklist
Name
of Issuer:
Date
proxy required to be voted: Record
Datej
Cross-check proxy ownership disclosure with internal DDJ holdings
report
Deliver checklist and proxy to Responsible Analyst:
Receive completed proxy from Responsible Analyst
Deliver
completed proxy to Legal Department
Receive completed proxy from Legal Department
Confirm
with CFO, DDJ Head Trader, Responsible Analyst and Legal Department that
no
material
conflicts were identified.
If
any of the addressees or copied persons believes that there may be a potential
material conflict of interest with respect to a proxy matter to be voted, please
notify me so that I may convene a meeting of the DDJ Internal Proxy Committee in
accordance with the Policies.
Either:
Vote proxy via on
in
accordance
with
instructions provided by the Responsible Analyst.
or
Convene DDJ Internal Proxy Committee and vote proxy accordingly
File
proxy in accordance with internal record-keeping procedures
Comments:
Initialed:
Chris
Kaminski Administrator
Proxy
Voting Guidelines
Eagle
Asset Management, Inc.
May
2020
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Table
of Contents |
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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.
2020
Proxy Voting Guidelines
|
|
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Part
I: POLICY AND PROCEDURES |
Eagle
Asset Management, Inc.
(Collectively
“EAM”)
POLICY
AND PROCEDURES ON PROXY VOTING
FOR
INVESTMENT ADVISORY CLIENTS
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 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 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, issues of corporate social
responsibility and various shareholder proposals. Recognizing the complexity and
factspecific 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.
Eagle
Asset Management, Inc.
2020
Proxy Voting Guidelines
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.
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 research or 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.
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.
|
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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. 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.
Appendix
A, which details Eagle’s proxy voting guidelines for Routine and Non-Routine
Shareholder proposals, intentionally omitted.
Eagle
Asset Management, Inc.
2020
Proxy Voting Guidelines
Eagle
Asset Management, Inc.
2020
Proxy Voting Guidelines
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 to 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.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.
C.Incentive
Stock Plans.
Emerald will generally vote against all excessive compensation and incentive
stock plans which are not performance related.
D.Corporate
restructuring plans
or company name changes, will generally be evaluated on a case by case
basis.
E.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.
Emerald
Advisers, LLC
October
1, 2018
F.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.
G.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.
Emerald
Advisers, LLC
October
1, 2018
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.
Emerald
Advisers, LLC
October
1, 2018
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, Emerlad 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.
Emerald
Advisers, LLC
October
1, 2018
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.
Emerald
Advisers, LLC
October
1, 2018
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.
Emerald
Advisers, LLC
October
1, 2018
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 publically traded. Emerald
will use Glass-Lewis recommendations to avoid any appearance of a conflict of
interest when voting proxies of its clients that are publically traded
companies.
Emerald
Advisers, LLC
October
1, 2018
Appendix
5-A
Hotchkis
& Wiley Capital Management
Proxy
Voting Policies and Procedures
PURPOSE
The
purpose of these Proxy Voting Policies and Procedures is to memorialize the
procedures and policies adopted by Hotchkis and Wiley Capital Management
(“H&W”) to enable the firm to comply with its accepted responsibilities and
the requirements of Rule 206(4)-6 under the Investment Advisers Act of 1940, as
amended (“Advisers Act”). It is H&W’s duty to vote proxies in the best
interests of its clients (which may involve affirmatively deciding that voting
the proxies may not be in the best interests of certain clients on certain
matters).
POLICY
H&W
acts as discretionary investment adviser for various clients, including clients
governed by the Employee Retirement Income Security Act of 1974 (“ERISA”).
Unless a client (including a “named fiduciary” under ERISA) specifically
reserves the right to vote its own proxies, H&W will vote client proxies and
act on all other corporate actions. A number of clients have notified H&W
that they will vote the proxies for their accounts. H&W does not take any
action with respect to proxy voting for these clients.
H&W’s
Proxy Oversight Committee (“POC”) (consisting of the Chief Operating Officer,
Chief Compliance Officer, and Managing Director of Portfolio Services) 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.
Under
the proxy voting guidelines, H&W generally votes on routine business matters
in favor of management’s positions. To vote client proxies, H&W utilizes
Institutional Shareholder Services, Inc. ("ISS"), a leading national provider of
proxy voting administrative and research services.
In
certain situations as permitted under the investment management agreement,
H&W may consider written direction from a client on how to vote on a
specific proxy proposal that would be applicable only to shares specifically
owned by the respective client. In this situation, the shares voted under client
direction may not be consistent with proxies voted by H&W for other clients
or with the established guidelines contained in these Proxy Voting Policies and
Procedures.
When
voting proxies for clients, H&W’s primary concern is that all decisions be
made solely in the best interest of the shareholder (and for ERISA accounts,
plan beneficiaries and participants, in accordance with the letter and spirit of
ERISA). H&W will act in a manner it deems prudent and diligent and which is
intended to enhance the economic value of the assets of the account, including
the consideration of environmental, social, and governance (“ESG”) items when
economically material.
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& Wiley Capital Management
5
- Portfolio Management Process
2018-10
GUIDELINES
Each
proxy issue will be considered individually. The following guidelines are a
partial list to be used in voting on proposals often contained in proxy
statements, but will not be used as rigid rules. The voting policies below are
subject to modification in certain circumstances and will be reexamined from
time to time. With respect to matters that do not fit in the categories stated
below, H&W will exercise its best judgment as a fiduciary to vote in the
manner which will most enhance shareholder value.
Management
Proposals
H&W
recognizes that a company’s management is charged with day-to-day operations and
long-term direction of the company and, therefore, generally votes on routine
business matters in favor of management’s positions. Generally, in the absence
of any unusual or non-routine information, the following items if recommended by
management are likely to be supported:
•Ratification
of appointment of independent auditors
•General
updating/corrective amendments to charter
•Increase
in common share authorization for a stock split or share dividend
•Stock
option plans that are incentive based and not excessive
•Election
of directors
The
following items will always require company specific and case-by-case review and
analysis when submitted by management to a shareholder vote:
•Directors'
liability and indemnity proposals
•Executive
compensation plans
•Mergers,
acquisitions, and other restructurings submitted to a shareholder
vote
•Anti-takeover
and related provisions
Shareholder
Proposals
Under
ERISA standards, it is inappropriate to use (vote) plan assets to carry out
social agendas or purposes. Certain ESG proposals, however, could be
economically meaningful to shareholders and we will vote in their best interest
accordingly. Thus, shareholder proposals are examined closely for their
relationship to the best interest of beneficiaries, and economic impact. In
general, H&W will vote in accordance with the recommendation of the
company’s board of directors on all shareholder proposals. However, H&W will
support shareholder proposals that are consistent with H&W’s proxy voting
guidelines for board-approved proposals. For example, H&W will generally
support a proposal requiring a majority vote for the election of
directors.
Hotchkis
& Wiley Capital Management
5
- Portfolio Management Process
2018-10
Generally,
shareholder proposals related to the following items are not
supported:
•Declassification
of the board
•Cumulative
voting
•Restrictions
related to social, political, or special interest issues that impact the ability
of the company to do business or be competitive and that have a significant
financial or vested interest impact.
•Reports
which are costly to provide or expenditures which are of a non-business nature
or would provide no pertinent information from the perspective of
shareholders.
Conflict
of Interest
Conflicts
between H&W’s interests and its client’s interests may arise in the proxy
decision process due to significant business or personal relationships between
H&W or its managers, members, employees or affiliates and the company or its
management. If a potential conflict of interest arises, it will typically
involve a proxy for a company that is also H&W’s client. In the event that
any proxies raise a conflict of interest, a member of the POC will review
H&W’s proposed votes to ensure that they are consistent with established
guidelines and not prompted by any conflict of interest.
H&W
employees may own the same securities held by client accounts. The employees
vote their securities independently from H&W’s proxy voting
policy.
PROCEDURES
H&W’s
Portfolio Services Department monitors ISS to review upcoming shareholder
meetings and other corporate actions. H&W’s Portfolio Services Department is
responsible for ensuring that proxies and corporate actions received by H&W
are voted in a timely manner, voted in a manner consistent with the proxy voting
policies and voted consistently across all portfolios. As a general matter, the
Portfolio Services Department will vote client shares based on the guidelines
set forth above, unless directed otherwise by the analyst.
The
proxy will be routed to the analyst responsible for that holding. The analyst
will review the proxy statement and, as deemed necessary, any reports from ISS
or such other third-party proxy research firm engaged by H&W with respect to
the company. An H&W analyst may vote against management if he/she determines
that it is for the best interest of our clients, and will document reasons for
such “against management votes”. In the event an analyst is proposing to vote
against management’s recommendations or against its established guidelines, the
proposed vote will be reviewed by a member of POC to determine that H&W’s
vote is not prompted by any conflict of interests. All determinations by POC
will be documented.
LIMITATIONS
If
H&W is authorized to exercise proxy voting rights for a client account,
H&W will vote the proxies for securities beneficially held by the custodian
for the client portfolio as of the record date of the shareholder meetings
(settlement date). Securities not held by the custodian as of the record date
(e.g., due to an unsettled purchase or securities
lending (see
additional information below)) will not be voted by H&W. In addition,
H&W will not vote proxies if it does not receive adequate information from a
client’s custodian in sufficient time to cast the vote.
Hotchkis
& Wiley Capital Management
5
- Portfolio Management Process
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H&W
may determine not to vote proxies in respect of securities of any company (i) if
H&W determines that it would be in the client’s overall best interest not to
vote under the circumstances, such as when (a) the cost of voting exceeds the
expected benefit to the client, (b) voting the client’s proxies will not have an
effect on the outcome of the matter up for vote or (c) the matter up for vote
will not impact the client’s economic interests, or (ii) if the security is no
longer held in the clients’ portfolios by the proxy meeting date. For example,
to the extent that H&W receives proxies for securities that are transferred
into a client’s portfolio that were not recommended or selected by H&W and
have been sold or are expected to be sold promptly in an orderly manner (“legacy
securities”), H&W will generally refrain from voting such proxies. In such
circumstances, since legacy securities have been sold or are expected to be sold
promptly, H&W may determine that voting proxies on such securities would not
further a client’s interest in maximizing the value of its investments. H&W
may consider an institutional client’s special request to vote a legacy security
proxy and, if agreed, would vote such proxy in accordance with H&W’s
guidelines.
Proxies
received after the termination date of a client account generally will not be
voted. An exception will be made if the record date is for a period in which an
account was under management or if a separately managed account custodian failed
to remove the account’s holdings from its aggregated voting list.
Non-U.S.
proxies (and particularly those in emerging markets) may involve a number of
problems that restrict or prevent H&W’s ability to vote. As a result, a
client account’s non-U.S. proxies will be voted on a best efforts basis only.
Fixed-income
securities normally do not provide voting rights; however, special circumstances
may occur that permit voting or responding to another type of corporate
action.
Certain
clients retain the responsibility for receiving and voting proxies for any and
all securities maintained in client portfolios and receive their proxies or
other solicitations directly from their custodian. H&W will not vote the
proxies for these securities in this case, but may provide advice to clients
regarding the clients’ voting of proxies.
Securities
Lending
In
order to generate incremental revenue, some clients may participate in a
securities lending program. As noted above, if a client has elected to
participate in the lending program then it will not have the right to vote the
proxies of any securities that are on loan as of the shareholder meeting record
date. A client, or a Portfolio Manager (PM), may place restrictions on loaning
securities and/or recall a security on loan at any time. Such actions must be
affected prior to the record date for a meeting if the purpose for the
restriction or recall is to secure the vote.
PM
and/or analysts who become aware of upcoming proxy issues relating to any
securities in portfolios they manage, or issuers they follow, will consider the
desirability of recalling the affected securities that are on loan or
restricting the affected securities prior to the record date for the matter. If
the proxy issue is determined to be material, and the determination is made
prior to the shareholder meeting record date the PM(s) will contact the
securities lending agent to recall securities on loan or restrict the loaning of
any security held in any portfolio they manage, if they determine that it is in
the best interest of shareholders to do so.
Hotchkis
& Wiley Capital Management
5
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RECORD
KEEPING
H&W
or ISS, on H&W’s behalf, maintains records of proxy statements received;
votes cast on behalf of clients; client requests for proxy voting information;
and documents prepared by H&W that were material to making a voting
decision. Such records are maintained in an easily accessible place for a period
of not less than 5 years in an appropriate office of H&W or ISS. In the
event that ISS maintains such records, ISS will provide such records to H&W
promptly upon H&W’s request.
H&W
will describe in its Part 2A of Form ADV (or other brochure fulfilling the
requirement of Rule 204-3) its proxy voting policies and procedures and advise
clients how they may obtain information about how H&W voted their
securities. Clients may obtain information about how their securities were voted
or a copy of H&W’s Proxy Voting Policies and Procedures free of charge by
written request addressed to H&W. For its mutual fund clients, H&W will
provide information about how H&W voted each mutual fund’s securities within
the appropriate time frame for the public filing of Form N-PX within 60 days of
June 30th. Form N-PX for each mutual fund will be available without charge, upon
request, by calling toll-free (866) 236-0050 and on the SEC’s website at
www.sec.gov.
Amended:
September 21, 2012
Amended:
August 16, 2016
Amended:
October 1, 2018
Hotchkis
& Wiley Capital Management
5
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LOS
ANGELES CAPITAL
Proxy
Policy
Rev.
September 30, 2019
Los
Angeles Capital Management and Equity Research, Inc.
Table
of Contents
I. Introduction
3
II. Proxy
Policy Statement 3
A.
Limitations 4
B. Special
Considerations 4
C. Disclosures 4
III.
Responsibility and Oversight 5
IV.
Proxy Procedures 5
A. Conflicts
of Interest 5
B. Recordkeeping 5
Los
Angeles Capital
September
30, 2019
I.Introduction
Los
Angeles Capital Management and Equity Research, Inc. (“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 clients. These clients frequently give Los Angeles
Capital the authority to vote proxies relating to the underlying securities that
are held on behalf of such clients. Such authority is established by advisory
contracts or comparable documents, and the proxy voting guidelines have been
tailored to reflect these specific contractual obligations.
In
addition to SEC requirements governing advisers, the proxy voting policies
reflect the long‐standing fiduciary standards and responsibilities for ERISA
accounts set out in Department of Labor Interpretive Bulletins including
2016‐01. Los Angeles Capital believes that this Proxy Policy is reasonably
designed to meet its goal of ensuring that the Firm endeavors to vote (or
refrain from voting) proxies in a manner consistent with the best interests of
its clients, as understood by the Firm at the time of the vote.
II.Proxy
Policy Statement
Los
Angeles Capital has retained Glass Lewis & Co., LLC (“Glass Lewis”) an
unaffiliated third‐party, to act as an independent voting agent on its behalf.
Glass Lewis provides objective 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.
Los
Angeles Capital has adopted Glass Lewis’ U.S. and International Proxy Paper
Guidelines for those accounts where proxy voting authority has been granted to
the Firm. Although the Firm has adopted Glass Lewis’ established guidelines and
has a pre‐determined voting policy, the Firm retains the right to ultimately
cast each vote on a case‐by‐case basis, taking into consideration the
contractual obligations under the advisory or sub-advisory agreement and all
other relevant facts and circumstances at the time of the vote. In doing so, the
Firm may incorporate information gathered from other sources beyond Glass Lewis.
The Firm may conduct research internally and/or use the resources of an
independent research consultant, or the Firm may use information from any of the
following sources: legislative materials, studies of corporate governance and
other proxy voting issues, and/or analyses of shareholder and management
proposals by a certain sector of companies (e.g.,
Fortune 500 companies).
Los
Angeles Capital
September
30, 2019
The
Proxy Committee (the “Committee”) may also be called on to vote a proxy that its
third‐party provider cannot. In these circumstances, two votes from members of
the Committee or one member of the Committee and an internal counsel are
required.
Los
Angeles Capital recognizes that a client may issue directives regarding how
particular proxy issues are to be voted for the client’s portfolio holdings. Los
Angeles Capital requires that the advisory or sub‐advisory contract provides for
such direction, including instructions as to how those votes will be managed,
particularly where they differ from Los Angeles Capital’s policies.
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 managing or advising
public companies, underwriting, or investment banking. Further, as a matter of
policy, the employees, officers, or principals of Los Angeles Capital will not
be influenced by outside sources whose interests conflict with the interests of
its clients.
A.Limitations
Circumstances
may arise, where subject to contractual obligations established by the client,
Los Angeles Capital will take a limited role in voting proxies:
•Los
Angeles Capital may abstain from voting a client proxy if it concludes that the
value of the portfolio holding is indeterminable or insignificant, or if the
costs of voting such proxy are unjustifiable.
•Los
Angeles Capital abstains from voting proxies for securities that 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 it may recall securities, if operationally feasible, so that they can be
voted where the Firm determines it has a fiduciary obligation to do
so.
•Los
Angeles Capital abstains from voting shares of securities in a country that
participates in share
blocking because
it is disruptive to the management of the portfolio.
•Los
Angeles Capital may be unable to vote proxies in instances 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.
•Los
Angeles Capital may abstain from voting shares of securities where in the Firm’s
judgement the unjustifiable
costs or
disadvantages of voting the proxy would exceed the anticipated benefit of voting
(e.g., certain non‐U.S. securities).
•The
Firm does not actively engage in shareholder
activism,
such as dialogue with management with respect to pending proxy voting
issues.
Los
Angeles Capital
September
30, 2019
•The
Firm is unable to vote proxies where a required Power
of Attorney is
not on file.
B.
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
Proxies
will be voted in accordance with the 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.
C.
Disclosure
Los
Angeles Capital will provide all clients with a copy of the Firm’s current
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 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 to the respective client or as required by
law.
III.Responsibility
and Oversight
The
Firm’s Proxy Committee (the “Committee”) was established to provide oversight to
the proxy voting process. The Committee is responsible for developing,
implementing, and updating the Firm’s proxy policy, reviewing and approving all
proxy paper guidelines, overseeing the third‐party proxy vendor, identifying any
conflicts of interest, and meeting to discuss any material issues regarding the
proxy voting process. The Committee meets annually and as necessary to fulfill
its obligations.
Los
Angeles Capital
September
30, 2019
Los
Angeles Capital’s Operations Department handles the day to day administration of
the proxy voting process.
IV.Proxy
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.
A
client may issue directives regarding how particular proxy issues are to be
voted for the client’s account. Los Angeles Capital requires that the advisory
or sub‐advisory contract provides for such direction, including instructions as
to how those votes will be managed, particularly where they differ from the
Firm’s policies. 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.
A.
Conflicts of Interest
Los
Angeles Capital attempts to minimize the risks of conflicts by adopting the
policies of an independent third party. Los Angeles Capital 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 the Firm may
be required to 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
that of one of its clients or prospects, the client will be notified. If no
directive is issued by the client, the Committee will vote in such a way that,
in the Firm’s opinion, fairly addresses the conflict in the best interest of the
client.
B.
Recordkeeping
Los
Angeles Capital
September
30, 2019
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 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 maintains 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 will be maintained in
Los Angeles Capital’s office.
Los
Angeles Capital
September
30, 2019
THIS
PAGE INTENTIONALLY LEFT BLANK
Los
Angeles Capital
September
30, 2019
Mellon
Category:
Portfolio Management
It
is the policy of Mellon to fully meet its fiduciary obligations in exercising
the power, discretion and responsibility to vote proxies where clients have
delegated such authority.
Registered
Investment Advisers have a number of responsibilities regarding voting of
proxies for client securities that are under its management and that are
governed by the Advisers Act. Rule 206(4)-6 requires investments advisers to (a)
adopt and implement written policies and procedures that are reasonably designed
to ensure that the adviser votes client securities in the best interests of
clients, which procedures must include how material conflicts that may arise
between an adviser's interests and those of its clients are addressed; (b)
disclose to clients how they may obtain information from the adviser with
respect to the voting of proxies for their securities; and (c) describe to
clients its proxy voting policies and procedures and, upon request, furnish a
copy to its clients. Rule 204-2 further requires an investment adviser to retain
certain records relating to the exercise of its proxy voting
authority.
As
a registered Investment Advisor, Mellon is often entrusted with the fiduciary
responsibility to vote proxies for shares of corporate stock held on behalf of
our clients. Proxy voting is an integral part of the management of the
investment in those shares. In voting proxies, Mellon takes into account long
term economic value as we evaluate issues relating to corporate governance,
including structures and practices, the nature of long-term business plans,
including sustainability policies and practices to address environmental and
social factors that are likely to have an impact on shareholder value, and other
financial and non-financial measures of corporate performance.
For
clients that have delegated proxy authority, Mellon will make every reasonable
effort to ensure that proxies are received and are voted in accordance with this
policy and related procedures. To assist us in that process, Mellon retains
Institutional Shareholder Services (“ISS”) to provide various services related
to proxy voting, such as research, analysis, voting services, proxy vote
tracking, recordkeeping, and reporting. In addition, Mellon also retains Glass
Lewis for research services only.
Mellon
seeks to avoid potential material conflicts of interest through its
participation on The Bank of New York Mellon Corporation’s (“BNY Mellon”) Proxy
Voting and Governance Committee (“Committee”). As such, Mellon has adopted and
implemented BNY Mellon’s Proxy Voting Policy and proxy voting guidelines. The
guidelines are applied to all client accounts for which Mellon has been
delegated the authority to vote in a consistent manner and without consideration
of any client relationship factors.
Under
this policy, the Committee permits member firms (such as Mellon) to consider
specific interests and issues and cast votes differently from the collective
vote of the Committee where the member firm determines that a different vote is
in the best interests of the affected account(s).
Mellon
will furnish a copy of its Proxy Voting Policy and its proxy voting guidelines
upon request to each advisory client that has delegated voting
authority.
Voting
BNY Mellon Stock
It
is the policy of Mellon not to vote or make recommendations on how to vote
shares of BNY Mellon stock, even where Mellon has the legal power to do so under
the relevant governing instrument. In order to avoid any appearance of conflict
relating to voting BNY Mellon stock, Mellon has contracted with an independent
fiduciary (ISS) to direct all voting of BNY Mellon Stock held by any Mellon
accounts on any matter in which shareholders of BNY Mellon Stock are required or
permitted to vote.
Proxy
Voting Disclosure
Clients
who have delegated proxy voting authority to Mellon may obtain the proxy voting
records for their account upon written or verbal request.
Oversight
Activities
Mellon
performs periodic oversight of the operational and voting processes implemented
on behalf of clients to ensure that proxy ballots are voted in accordance with
established guidelines. These activities may include, but are not limited to,
monthly account reconciliation between the voting agent and Mellon records and
forensic testing of the application of vote instruction in relation to policy
vote recommendations at the ballot level. These efforts are completed as
component of our Rule 206(4) -7 compliance program.
Appropriate
disciplinary action will be taken for failure to comply with the requirements of
this policy, which could include termination of employment.
Rules
206(4)-6 and 204-2 under The Investment Advisers Act of 1940
BNY
Mellon Policy II-G-051 (“Proxy Voting and Governance Committee Voting Policy”)
BNY
Mellon Policy II-G-052 (“Proxy Voting and Governance Committee”)
Compliance
February
2018 (Original)
BNY
MELLON | INVESTMENT MANAGEMENT
PROXY
VOTING POLICY AND PROCEDURES
MetLife
Investment Management, LLC (“MIM”) has established these proxy voting procedures
with respect to MIM client accounts (referred to as “client” in this policy)
where MIM has been delegated discretionary proxy voting authority. It is MIM’s
policy to vote client proxies (“proxies”) for the benefit of and in the best
interests of its clients in accordance with its fiduciary duty, Rule 206(4)-6
under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and
other applicable laws (including the fiduciary standards and responsibilities
for ERISA accounts set out in Department of Labor Bulletin 94-2).
This
policy does not apply where MIM has not been delegated proxy voting authority by
a client (i.e. the client has retained the authority or designated someone other
than MIM to vote proxies on its behalf).
These
proxy voting policies and procedures are available to all clients upon request,
with the understanding that they are subject to change at any time without
notice.
Procedures
for Proxy Voting
MIM
has adopted these policies and procedures based on the guiding principle that
any proxy vote must be done in the best interest of the client and with the
intent to maximize the economic value of a particular security. These procedures
are designed to ensure that material conflicts of interest on the part of MIM or
its affiliates do not affect voting decisions on behalf of clients. All MIM
personnel who are involved in the voting of proxies are required to adhere to
these policies and procedures.
MIM
generally votes every proxy. However, MIM may abstain on any particular vote or
otherwise withhold its vote on any matter if, in the judgment of MIM, the costs
associated with voting a particular proxy outweigh the benefits to clients or if
the circumstances make such an abstention or withholding otherwise advisable and
in the best interest of clients.
Once
a client has delegated its proxy voting rights to MIM, MIM does not generally
accept any subsequent direction on matters presented to shareholders for vote,
regardless of whether such subsequent directions are from the client itself or a
third party acting on behalf of the client. MIM views the delegation of
discretionary voting authority as an “all-or-nothing” choice for its
clients.
MIM
has adopted proxy voting guidelines (the “Guidelines”) that set forth how MIM
plans to vote on specific matters presented for shareholder vote. These
Guidelines are periodically reviewed and updated by MIM’s Proxy Voting Committee
(the “Proxy Committee”) and maintained by the Proxy Committee. The Guidelines
are intended to address most material conflicts of interest. MIM, however,
reserves the right to override the Guidelines (an “Override”) with respect to a
particular shareholder vote when an Override is consistent with the guiding
principle of seeking the maximization of economic value to clients, taking into
consideration all relevant facts and circumstances at the time of the vote.
MIM’s procedures for determining an Override are set forth herein.
Absent
any legal or regulatory requirement to the contrary, it is generally the policy
of MIM to maintain the confidentiality of the particular votes that it casts on
behalf of clients. MIM will furnish to a particular client details of how MIM
has voted the securities in its account; clients can request this information by
contacting MIM. MIM does not, however, generally disclose the results of voting
decisions to third parties (other than those that may have participated in the
voting process, as described below).
MetLife
Investment Management, LLC
January
1, 2020
1.Proxy
Voting Committee
Certain
aspects of the administration of these proxy voting policies and procedures are
governed by the Proxy Committee. The Proxy Committee may change its structure or
composition from time to time, but at all times shall consist of at least three
members, including at least one representative from MIM’s Index Strategies unit,
MIM Legal, and MIM Compliance. A member of MIM’s Index Strategies Unit attends
all meetings of the Proxy Committee and is responsible for keeping records of
the Proxy Committee’s meetings.
The
Proxy Committee shall hold at least two regular meetings during each calendar
year, at which the Proxy Committee reviews the proxy voting record data with
respect to votes taken in accordance with these policies and procedures since
the previous meeting. The Proxy Committee shall also meet: whenever there is a
recommendation that the Proxy Committee authorize an Override; in the event of a
proxy vote where a material conflict of interest has been identified; or at such
other times as the Proxy Committee may determine. Proxy Committee meetings may
be held in person, via teleconference or through communication by
email.
On
all matters, the Proxy Committee makes its decisions by a vote of a majority of
the members of the Proxy Committee present at the meeting. At any meeting of the
Proxy Committee, a majority of the members of the Proxy Committee then in office
constitutes a quorum.
2.Proxy
Voting Service Vendor
MIM
has retained Institutional Shareholder Services (“ISS”) to vote proxies on MIM’s
behalf. ISS prepares analyses of most matters submitted to a shareholder vote
and also provides voting services to institutions such as MIM. ISS receives a
daily electronic feed of all holdings in relevant MIM client voting accounts,
and monitors the client accounts and their holdings to ensure that all proxies
are received. MIM has directed ISS to vote proxies in accordance with the
Guidelines approved by the Proxy Committee. A member of MIM accesses ISS’ secure
website on a periodic basis to monitor the matters presented for shareholder
vote and track- the voting of the proxies.
The
Proxy Committee shall annually review the services provided by ISS or any other
proxy voting and recording service provider retained by MIM, to assess whether
the proxy service provider is capable of making impartial proxy voting
recommendations in the best interests of MIM’s clients.
In
making such an assessment the review may consider:
•The
proxy service provider’s conflict management procedures and assessment of the
effectiveness of the implementation of such procedures;
•The
proxy service provider’s Form ADV, if applicable, and other disclosure made by a
proxy service provider regarding its products, services and methods of
addressing conflicts of interest; and/or;
•Inquiries
to, and discussions with, representatives of a proxy service provider regarding
its products, services and methods of addressing conflicts of
interest.
No
less than annually, MIM shall obtain from each proxy service provider a copy of
its conflict management procedures and request that the proxy service provider
provide an update of any material revision to such procedures.
MetLife
Investment Management, LLC
January
1, 2020
3.Overriding
the Guidelines
MIM
may Override the Guidelines when such an Override is consistent with this policy
and the guiding principle of seeking the maximization of economic value to
clients, taking into consideration all relevant facts and circumstances at the
time of the vote, as further described below.
If
any MIM investment professional or a member of MIM Legal or MIM Compliance
believes that MIM should vote in a manner inconsistent with the Guidelines, such
person must notify MIM’s Chief Compliance Officer (“CCO”). MIM’s CCO will work
with MIM Legal to make a determination as to whether the situation presents a
material conflict of interest.
The
term “conflict of interest” refers to a situation in which MIM or its affiliates
have a financial interest in the proxy matter, other than the obligation MIM
incurs as investment adviser, which may compromise MIM’s freedom of judgment and
action with respect to the voting of the proxy.
A.No
Material Conflict of Interest
If
MIM Legal determines that there is no material conflict of interest, MIM will
present the matter to the Proxy Committee for a vote. If the Proxy Committee
approves the Override, the appropriate member of MIM will instruct ISS to vote
accordingly prior to the voting deadline. MIM will retain records of documents
material to any such determination and the voting of any such
proxy.
B.Material
Conflict of Interest
If,
however, MIM Legal determines that there is a material conflict of interest with
respect to the relevant shareholder vote, a special meeting of the Proxy
Committee will be required to override the guidelines. As part of its
deliberations, the Proxy Committee will consider, as applicable, the
following:
•a
description of the proposed vote, together with copies of the relevant proxy
statement and other solicitation material;
•data
regarding client holdings in the relevant issuer;
•pertinent
information related to a material conflict of interest, together with all
relevant materials;
•the
vote indicated by the Guidelines, together with any relevant information
provided by ISS; and
•the
rationale for the request for an Override, together with all relevant
information.
After
review, the Proxy Committee will arrive at a decision based on the guiding
principle of seeking the maximization of the economic value of clients’
holdings. The Proxy Committee may vote to authorize an Override with respect to
such a vote notwithstanding the presence of a material conflict of interest only
if the Proxy Committee determines that such an Override would be in the best
interests of clients. Whether or not the committee authorizes an Override, the
Proxy Committee’s deliberations and decisions will be appropriately documented
and such records will be maintained by the group responsible for keeping records
of the Proxy Committee’s meetings.
MetLife
Investment Management, LLC
January
1, 2020
4.Votes
Not Governed by Guidelines
In
the event that there is a matter presented for a proxy vote that is not governed
by the Guidelines, the Proxy Committee will follow a process similar to that set
forth in Section 3 above for overriding the Guidelines. In such a scenario, the
relevant portfolio management team will make a recommendation to the Proxy
Committee as to how such proxy should be voted, based on the portfolio
management team’s assessment of the particular matter(s) at issue and what they
believe to be in the best interest of the client, with the intent to maximize
the economic value of the particular security. Unless MIM Legal determines that
the situation presents a material conflict of interest, the Proxy Committee
shall approve the portfolio management team’s recommendation, and a member of
MIM will instruct ISS to vote in accordance with the recommendation. In the
event that MIM Legal determines that there is a material conflict of interest
with respect to the relevant shareholder vote, a special meeting of the Proxy
Committee will be required to arrive at a voting decision, following the
applicable considerations and documentation requirements set forth in the
“Material Conflict of Interest” section above.
5.No
Undue Influence
If
at any time any MIM associate is pressured or lobbied with respect to overriding
the Guidelines for a particular shareholder vote, such person should provide
information regarding such activity to MIM’s CCO who will notify MIM Legal and
the Proxy Committee and maintain a record of this information. The Proxy
Committee will consider this information in evaluating any proposed Override
with respect to such a vote.
Books
and Records Retention
MIM
(or ISS on behalf of MIM) maintains records of all proxies voted in accordance
with Section 204-2 of the Advisers Act. As required and permitted by Rule
204-2(c) under the Advisers Act, the following records are
maintained:
•a
copy of these policies and procedures;
•proxy
statements received regarding client securities are maintained by
ISS;
•a
record of each vote cast is maintained by ISS, and such records are accessible
to MIM;
•a
copy of any document created by MIM that was material to making a decision how
to vote proxies on behalf of a client or that memorializes the basis for that
decision; and
•each
written client request for proxy voting records and MIM’s written response to
any (written or oral) client request for such records.
Adopted:
2006
Amended:
July 1, 2019
Amended:
January 1, 2020
MetLife
Investment Management, LLC
January
1, 2020
|
|
|
Origin
Asset Management LLP |
(‘Origin’
or the ‘Firm’) |
|
Proxy
Voting Policy – December 2019 |
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.
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’). The
Firm’s policy is to actively vote proxies for all clients by adopting the
provider’s proxy voting policy, unless a client does not wish or require us to
do so. Any proxy voting arrangements shall be approved by the Investment Team
and the Compliance Officer.
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.
The
Firm has engaged a third party proxy voting service provider to enable the firm
to vote stock on portfolios managed for its clients. The Firm believes that the
third party proxy voting service provider has the necessary resources, in-depth
knowledge and expertise to vote in the best interests of our clients and thus
enables the firm to meet this key objective of its Proxy Voting Policy. The Firm
can override the guideline proxy voting recommendation of the third party proxy
voting service provider on the basis of a client request or where the Firm
disagrees with the guideline proxy voting recommendation.
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 third party proxy voting service
recommendations. 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 of the
international governance provider must be discussed, recorded and agreed with
Compliance before the override instruction is communicated to the third party
proxy voting service provider. 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.
Origin
Asset Management LLP
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. A copy of Origin’s latest disclosure response to the UK Stewardship
Code and Shareholders Rights Directive II is available for download on the
origin website at https://www.originam.com/library.
Origin
Asset Management LLP
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 State Street.
•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
March
2020
BAIRD
EQUITY ASSET MANAGEMENT
BAIRD
EQUITY AM’S PROXY VOTING POLICIES AND PROCEDURES
Revised
Effective January 22, 2018
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
January
22, 2018
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). The decision on the issue will be
communicated to the portfolio manager and, if the proxy challenge is approved,
the Baird’s Proxy Support team will be notified to cast the votes in accordance
with the Sub-Committee’s instructions.
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;
Baird
Equity Asset Management of
Robert
W. Baird & Co. Incorporated
January
22, 2018
(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.
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 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:
Baird
Equity Asset Management of
Robert
W. Baird & Co. Incorporated
January
22, 2018
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
5.Abstain
from voting.
VII.
PROCEDURES
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 the Proxy
Voting Challenge Form 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;
Baird
Equity Asset Management of
Robert
W. Baird & Co. Incorporated
January
22, 2018
•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.
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 provided in Rule 204-2 of the Advisers Act.
Baird
Equity Asset Management of
Robert
W. Baird & Co. Incorporated
January
22, 2018
POLICY
ON PROXY VOTING
SPECTRUM
ASSET MANAGEMENT, INC.
FOR
INVESTMENT ADVISORY CLIENTS:
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).
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.
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.
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.
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:
2.
Issue up for vote:
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: |
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7.
Contacted other Spectrum portfolio managers who have position in same
security:
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Yes
/ No |
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Name
of individual contacted: |
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Date: |
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8.
Portfolio Manager Signature: |
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Date: |
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Portfolio
Manager Name: |
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Portfolio
Manager Signature*: |
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Date: |
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Portfolio
Manager Name: |
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*Note:
All Portfolio Managers who manage portfolios that hold relevant security must
sign.
T.
ROWE PRICE ASSOCIATES, INC. AND ITS INVESTMENT ADVISER
AFFILIATES
PROXY
VOTING POLICIES AND PROCEDURES
RESPONSIBILITY
TO VOTE PROXIES
T.
Rowe Price Associates, Inc., and its affiliated investment advisers
(collectively,
“T. Rowe Price”)
recognize and adhere 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.
T.
Rowe Price has adopted these Proxy Voting Policies and Procedures (“Policies
and Procedures”)
for the purpose of establishing formal policies and procedures for performing
and documenting its fiduciary duty with regard to the voting of client proxies.
This document is reviewed at least annually and updated as
necessary.
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 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 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 to the client of voting outweigh 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.
TRP
2020 Proxy Voting Policies and Procedures.doc
Updated:
February 2020
ADMINISTRATION
OF POLICIES AND PROCEDURES
Environmental,
Social and Governance Committee.
T. Rowe Price’s Environmental, Social and Governance Committee (“ESG
Committee”)
is responsible for establishing positions with respect to corporate governance
and other proxy issues. Certain delegated members of the ESG Committee also
review questions and respond to inquiries from clients and mutual fund
shareholders pertaining to proxy issues. While the ESG 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 ESG Committee is also responsible for the oversight of third-party
proxy services firms that T. Rowe Price engages to facilitate the proxy voting
process.
Proxy
Voting Team. The
Proxy Voting team is responsible for administering the proxy voting process as
set forth in the Policies and Procedures.
Corporate
Governance Team. Our
Corporate 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.
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. In order
to reflect T. Rowe Price’s issue-by-issue voting guidelines as approved each
year by the ESG Committee, ISS maintains and implements a custom voting policy
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 T. Rowe Price 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.
TRP
2020 Proxy Voting Policies and Procedures.doc
Updated:
February 2020
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 ESG Committee. Others review the customized vote recommendations and
approve them before the votes are cast. In all cases, portfolio managers receive
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 Proxy Voting 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 Policies
Specific
proxy voting guidelines have been adopted by the ESG 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. The following is a summary of our guidelines on the most
significant proxy voting topics:
Election
of Directors
– For most companies, T. Rowe Price generally expects boards to maintain a
majority of independent directors. T. Rowe Price may vote against outside
directors who do not meet our criteria relating to their independence,
particularly when they serve on key board committees, such as compensation and
nominating committees, for which we believe that all directors should be
independent. In certain markets where majority-independent boards are uncommon,
we expect companies to adhere to the minimum independence standard established
by regional corporate governance codes. At a minimum, however, we believe boards
in all regions should include a blend of executive and non-executive members,
and we are likely to vote against senior executives at companies with
insufficient representation by independent directors. We also vote against
directors who are unable to dedicate sufficient time to their board duties due
to their commitments to other boards. We may vote against certain directors who
have served on company boards where we believe there has been a gross failure in
governance or oversight. In certain markets, a lack of diversity on the board
may cause us to oppose the members of the board’s Nominating Committee.
Additionally, we may vote against compensation committee members who approve
excessive executive compensation or severance arrangements. We support efforts
to elect all board members annually because boards with staggered terms lessen
directors’ accountability to shareholders and act as deterrents to takeover
proposals. To strengthen boards’ accountability, T. Rowe Price supports
proposals calling for a majority vote threshold for the election of directors
and we may withhold votes from an entire board if they fail to implement
shareholder proposals that receive majority support.
Anti-Takeover,
Capital Structure and Corporate Governance Issues
– T. Rowe Price generally opposes anti-takeover measures since they adversely
impact shareholder rights and limit the ability of shareholders to act on
potential value-enhancing transactions. Such anti-takeover mechanisms include
classified boards, supermajority voting requirements, dual share classes, and
poison pills. When voting on capital structure proposals, T. Rowe Price will
consider the dilutive impact to shareholders and the effect on shareholder
rights.
TRP
2020 Proxy Voting Policies and Procedures.doc
Updated:
February 2020
Executive
Compensation Issues
– T. Rowe Price’s goal is to assure that a company’s equity-based compensation
plan is aligned with shareholders’ long-term interests. We evaluate plans on a
case-by-case basis, using a number of factors, including dilution to
shareholders, problematic plan features, burn rate, and the equity compensation
mix. Plans that are constructed to effectively and fairly align executives’ and
shareholders’ incentives generally earn our approval. Conversely, we oppose
compensation packages that provide what we view as excessive awards to few
senior executives or contain the potential for excessive dilution relative to
the company’s peers. We also may oppose equity plans at any company where we
deem the overall compensation practices to be problematic. We generally oppose
efforts to reprice options in the event of a decline in value of the underlying
stock unless such plans appropriately balance shareholder and employee
interests. For companies with particularly egregious pay practices such as
excessive severance packages, executives with outsized pledged/hedged stock
positions, executive perks, and bonuses that are not adequately linked to
performance, we may vote against members of the board’s Compensation Committee.
We analyze management proposals requesting ratification of a company’s executive
compensation practices (“Say-on-Pay” proposals) on a case-by-case basis, using a
screen that assesses the long-term linkage between executive compensation and
company performance as well as the presence of objectionable structural features
in compensation plans. Finally, we may oppose Compensation Committee members or
even the entire board if we have cast votes against a company’s “Say-on-Pay”
vote in consecutive years.
Mergers
and Acquisitions
– T. Rowe Price considers takeover offers, mergers, and other extraordinary
corporate transactions on a case-by-case basis to determine if they are
beneficial to shareholders’ current and future earnings stream and to ensure
that our Price Funds and advisory clients are receiving fair consideration for
their securities. We oppose a high proportion of proposals for the ratification
of executive severance packages (“Say on Golden Parachute” proposals) in
conjunction with merger transactions if we conclude these arrangements reduce
the alignment of executives’ incentives with shareholders’ interests.
Corporate
Social Responsibility Issues
– Vote recommendations for corporate responsibility issues are generated by the
Corporate Governance team in consultation with our Responsible Investment team.
T. Rowe Price takes into consideration a company’s existing level of disclosure
on matters of a social, environmental, or corporate responsibility nature. If
the proposal addresses an issue with substantial investment implications for the
company’s business or operations, and those issues have not been adequately
addressed by management, T. Rowe Price generally supports calls for additional
disclosure.
Global
Portfolio Companies
– The ESG Committee has developed custom international proxy voting guidelines
based on ISS’ general global policies, regional codes of corporate governance,
and our own views as investors in these markets. ISS applies 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 policies developed for U.S. corporate governance
issues are not appropriate for all markets.
TRP
2020 Proxy Voting Policies and Procedures.doc
Updated:
February 2020
Fixed
Income and Passively Managed Strategies
– Proxy voting for our fixed income and indexed portfolios is administered by
the Proxy Voting team using T. Rowe Price’s guidelines as set by the ESG
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 foreign 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.
Monitoring
and Resolving Conflicts of Interest
The
ESG 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 ESG
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 ESG 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 ESG
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 ESG 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 ESG
Committee for immediate resolution prior to the time T. Rowe Price casts its
vote.
TRP
2020 Proxy Voting Policies and Procedures.doc
Updated:
February 2020
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 ESG 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% 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.
REPORTING,
RECORD RETENTION AND OVERSIGHT
The
ESG Committee, and certain personnel under the direction of the ESG 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
TRP
2020 Proxy Voting Policies and Procedures.doc
Updated:
February 2020
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, ESG Committee
meeting materials, and other internal research relating to voting decisions are
maintained in accordance with applicable requirements.
TRP
2020 Proxy Voting Policies and Procedures.doc
Updated:
February 2020
Vaughan
Nelson Investment Management, L.P.
Description
of Proxy Voting Policy and Procedures
Policy
Vaughan
Nelson undertakes to vote all client proxies in a manner reasonably expected to
ensure the client’s best interest is upheld and in a manner that does not
subrogate the client’s best interest to that of the firm’s in instances where a
material conflict exists.
Approach
Vaughan
Nelson has created a Proxy Voting Guideline (“Guideline”) believed to be in the
best interest of clients relating to common and recurring issues found within
proxy voting material.
The
Guideline, reviewed annually, is the work product of Vaughan Nelson’s Investment
Team and it considers the nature of it’s business, the types of securities being
managed and other sources of information including, but not limited to, research
provided by an independent research firm Institutional Shareholder Services
(ISS), internal research, published information on corporate governance and
experience.
The
Guideline helps to ensure voting consistency on issues common amongst issuers
and to 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. However,
in many recurring and common proxy issues a “blanket voting approach” cannot be
applied.
In
these instances, the Guideline indicates that such issues will be addressed on a
case-by-case basis in consultation with a portfolio manager to determine how to
vote the issue in the client’s best interest.
Vaughan
Nelson uses ISS in a limited capacity to collect proxy ballots for clients,
provide a platform in which to indicate our vote, provide company research as a
point of information and assist our firm in generating proxy voting
reports.
Vaughan
Nelson, in executing its duty to vote proxies, may encounter a material conflict
of interest.
Vaughan
Nelson does not envision a large number of situations where a conflict of
interest would exist, if any, given the nature of Vaughan Nelson’s business,
client base, relationships, and the types of securities managed.
Notwithstanding,
if a conflict of interest arises, we will undertake to vote the proxy or proxy
issue in the client’s continued best interest. This will be accomplished by
either casting the vote in accordance with the Guideline, if the application of
such policy to the issue at hand involves little discretion on Vaughan Nelson’s
part or casting the vote as indicated by the independent third-party research
firm, ISS.
If
a conflict involves ISS, Vaughan Nelson will take that into consideration when
evaluating a proxy item that is not addressed in the firm’s recurring Proxy
Voting Guideline.
Vaughan
Nelson, as an indirect subsidiary of a Bank Holding Company, is restricted from
voting the shares it has invested in banking entities on the fund’s behalf in
instances where the aggregate ownership of
all
the Bank Holding Company’s investment management subsidiaries exceed 5% of the
outstanding share class of a bank.
Where
the aggregate ownership described exceeds the 5% threshold, the firm will
instruct ISS, an independent third party, to vote the proxies in line with ISS’s
recommendation.
Finally,
there may be circumstances or situations that may preclude or limit the manner
in which a proxy is voted.
These
may include:
1)
Mutual funds – whereby voting may be controlled by restrictions within the fund
or the actions of authorized persons, 2) International Securities – whereby the
perceived benefit of voting an international proxy does not outweigh the
anticipated costs of doing so, 3) 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, 4) Small Combined Holdings /
Unsupervised Securities – where the firm does not have a significant holding or
basis on which to offer advice, 5) a security is out on loan (voting rights have
been passed to the borrower) or 6) securities held on record date but not held
on meeting date.
In
summary, Vaughan Nelson’s goal is to vote proxy material in a manner that is
believed to assist in maximizing the value of a portfolio.
Proxy
Voting Policy
When
Victory Capital Management Inc. (“Victory”) client accounts hold stock and
Victory has an obligation to vote proxies for the stock, the voting authority
will be exercised in accordance with:
•The
direction and guidance, if any, provided by the document establishing the
account relationship
•Principles
of fiduciary law and Rule 206(4)-6 under the Investment Advisers Act of 1940, as
amended. Both require Victory to act in the best interests of the account. In
voting such stock, Victory will exercise the care, skill, prudence and diligence
a prudent person would use, considering the aims, objectives, and guidance
provided by the documents governing the account
•The
guidelines listed in this policy, including the ISS Taft Hartley guidelines in
Appendix A and the Victory public company guidelines in Appendix B
Victory
votes client securities in the best interests of the client. In general, this
entails voting client proxies with the objective of increasing the long-term
economic value of client assets. In determining the best interests of the
account, Victory considers, among other things, the effect of the proposal on
the underlying value of the securities (including the effect on marketability of
the securities and the effect of the proposal on future prospects of the
issuer), the composition and effectiveness of the issuer's board of directors,
the issuer’s corporate governance practices, and the quality of communications
from the issuer to its shareholders.
Where
Victory has an obligation to vote client proxies:
•Reasonable
efforts will be made to monitor and keep abreast of corporate
actions
•All
stock, whether by proxy or in person, will be voted, provided there is
sufficient time and information available
•A
written record of such voting will be maintained by Victory
•Non-routine
proposals not covered by the guidelines or involving other special circumstances
will be evaluated on a case-by-case basis with input from the appropriate
Victory analyst(s) or portfolio manager(s).
•Victory’s
Proxy Committee (the “Proxy Committee”) will supervise the voting of client
securities. In all cases, the ultimate voting decision and responsibility rests
with the members of the Proxy Committee.
•Voting
rights for securities that have been placed on loan by a client or a client’s
custodian generally pass to the borrower, which interferes with Victory’s
ability to vote on shareholder matters. In these circumstances Victory generally
will be unable to act on specific proxy matters.
•Victory
will not necessarily vote all client proxies for a particular company meeting in
a uniform manner. Depending on client objectives, as well as the opinions of
Victory’s various investment teams, Victory will split votes when appropriate in
order to help ensure that Victory is acting in the best interest of all of its
clients.
Statement
of Corporate Governance
The
voting rights associated with stock ownership are as valuable as any other
financial assets. As such, they must be managed in the same manner. Victory has
established voting guidelines that seek to protect these rights while attempting
to maximize the value of the underlying securities.
Proxy
Voting Procedure
The
Proxy Committee determines how proxies will be voted. Decisions are based
exclusively with the best interest of the client in mind.
Voting
may be executed through administrative screening per established guidelines with
oversight by the Proxy Committee or upon vote by a quorum of the Proxy
Committee.
Victory’s
portfolio managers opinions concerning the management and prospects of the
issuer may be taken into account in determining whether a vote for or against a
proposal is in the client’s best interests. Therefore, Victory will not
necessarily vote all client proxys for a particular company meeting in a uniform
manner. Insufficient information, onerous requests or vague, ambiguous wording
may indicate that a vote against a proposal is appropriate, even when the
general principal appears to be reasonable.
The
Proxy Committee is comprised of Victory employees who represent vital areas
within the company and can provide a range of knowledge which enhances the
committee’s decision making capabilities. Quorum exists when three voting
committee members are either in attendance or participate remotely via video or
teleconference. Approval is based on a majority of votes cast.
Victory
has engaged ISS (Institutional Shareholder Services) to perform the
administrative tasks of receiving proxies, proxy statements, and voting proxies
in accordance with the Victory Proxy Policy. In no circumstances shall ISS have
the authority to vote proxies except in accordance with standing or specific
instructions given to it by Victory. Victory will perform annual testing of
actual votes cast versus these policy guidelines to help insure that ballots are
being voted per policy. ISS also performs regular proxy ballot reconciliations
which compare client holdings to actual ballots received. ISS then provides
Victory with periodic reports of any discrepancies identified during the
reconciliation process. Victory is responsible for working with ISS and client
custodians to resolve any discrepancies and insure that all client proxy ballots
are voted.
Voting
Guidelines
The
following guidelines are intended to assist in voting proxies and are not to be
considered rigid rules. The Proxy Committee is directed to apply these
guidelines as appropriate. On occasion, however, a contrary vote may be
warranted when such action is in the best interests of the account or if it is
required under the documents governing the account.
The
committee may also take into account independent third party, general industry
guidance or other governance board review sources when making decisions. The
committee may additionally seek guidance from other internal sources with
special expertise on a given topic, where appropriate.
All
Proxy Committee voting decisions will be documented.
The
following is a discussion of selected proxy proposals which are considered
periodically at annual meetings. Victory’s general position with regard to such
proposals is also included.
International
Proxy Voting
Victory
will attempt to vote every proxy it receives for all international foreign
proxies. However, there may be situations in which Victory may vote against,
withhold a vote or cannot vote at all. For example, Victory may not receive a
meeting notice in enough time to vote or Victory may not be able to obtain
enough information to make a fully informed decision, in which case we will vote
against.
In
certain foreign jurisdictions, voting of proxies will result in the lockup of
shares due to issues such as shareblocking or re-registration, impairing
Victory's ability to trade those shares for several days. This could result in
significant loss to the investor. Consequently, in those foreign jurisdictions
which engage in this practice, Victory will generally refrain from proxy voting.
Specifically, for shareblocking and re-registration, Victory will automatically
Take No Action through a Do Not Vote instruction for ballots that would
immobilize the shares. Victory has the option to override the automation if we
become aware of a situation where we wish to vote and are not concerned with the
short term inability to trade out of the position. In re-registration or
shareblocking markets, where shares are not immobilized by voting instructions,
ballots are voted per policy.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
In
other foreign jurisdictions, the determination by the Proxy Committee to vote,
or refrain from voting proxys will take into consideration any additional costs
to investors which may be incurred from the research and voting process.
Finally, these guidelines will be applied in foreign markets taking into account
local regulatory requirements, local corporate governance codes and local market
best practices.
Additional
Topics
Any
issue not covered within the guidelines will be evaluated by the Proxy Committee
on a case-by-case basis.
Material
Conflicts of Interest
In
the event a material conflict of interest arises between Victory’s interests and
those of a client during the course of voting client’s proxies, the Proxy
Committee shall:
•Vote
the proxy in accordance with the Proxy Voting Guidelines unless such guidelines
are judged by the Proxy Committee to be inapplicable to the proxy matter at
issue
•In
the event that the Proxy Voting Guidelines are inapplicable, determine whether a
vote for, or against, the proxy is in the best interest of the client’s
account
•Document
the nature of the conflict and the rationale for the recommended
vote
•Solicit
the opinions of Victory’s Chief Compliance Officer, and if necessary the Chief
Legal Officer, or their designee, or consult an internal or external,
independent adviser
•Report
to the Victory Capital Management Board any proxy votes that took place with a
material conflict situation present, including the nature of the conflict and
the basis or rationale for the voting decision made
If
a member of the Proxy Committee has a personal conflict (e.g. family member on
board of company) he/she will recuse themselves from voting.
Recordkeeping
In
accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940, as
amended, Victory will retain the following records with respect to proxy
voting:
•Copies
of all policies and procedures required by Rule 206(4)-6
•A
written record of votes cast on behalf of clients
•Any
documents prepared by Victory or the Proxy Committee germane to the voting
decision
•A
copy of each written client request for information on how Victory voted proxies
on such client’s behalf
•A
copy of any written response by Victory to any written or verbal client request
for information on how Victory voted such client’s proxies
Routine/Miscellaneous
Adjourn
Meeting
Generally
vote AGAINST proposals to provide management with the authority to adjourn an
annual or special meeting absent compelling reasons to support the proposal.
Vote
FOR proposals that relate specifically to soliciting votes for a merger or
transaction if supporting that merger or transaction. Vote AGAINST proposals if
the wording is too vague or if the proposal includes "other
business."
Amend
Quorum Requirements
Vote
AGAINST proposals to reduce quorum requirements for shareholder meetings below a
majority of the shares outstanding unless there are compelling reasons to
support the proposal.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Amend
Minor Bylaws
Vote
FOR bylaw or charter changes that are of a housekeeping nature (updates or
corrections).
Change
Company Name
Vote
FOR proposals to change the corporate name.
Change
Date, Time, or Location of Annual Meeting
Vote
FOR management proposals to change the date, time, and/or location of the annual
meeting unless the proposed change is unreasonable.
Vote
AGAINST shareholder proposals to change the date, time, and/or location of the
annual meeting unless the current scheduling or location is
unreasonable.
Other
Business
Vote
AGAINST proposals to approve other business when it appears as voting
item.
Audit-Related
Auditor
Indemnification and Limitation of Liability
Consider
the issue of auditor indemnification and limitation of liability CASE-BY-CASE.
Factors to be assessed include, but are not limited to:
•The
terms of the auditor agreement, the degree to which these agreements impact
shareholders' rights
•Motivation
and rationale for establishing the agreements
•Quality
of disclosure
•Historical
practices in the audit area
WTHHOLD
or vote AGAINST members of an audit committee in situations where there is
persuasive evidence that the audit committee entered into an inappropriate
indemnification agreement with its auditor that limits the ability of the
company, or its shareholders, to pursue legitimate legal recourse against the
audit firm.
Auditor
Ratification
Victory
expects a company to have completed its due diligence on the auditors;
therefore, selection is approved. However, in cases where auditors have failed
to render accurate financial statements, votes are withheld. A favorable
position is given to auditors who receive more compensation from their audit
engagement than other services with the company.
Vote
FOR the ratification of auditors.
However,
vote AGAINST in cases where auditors have failed to render accurate financial
statements or where non-audit fees exceed audit fees. Non-audit fees are
excessive if:
•Non-audit
(“other”) fees >audit fees + audit-related fees + tax compliance/preparation
fees
Tax
compliance and preparation include the preparation of original and amended tax
returns, refund claims and tax payment planning. All other services in the tax
category, such as tax advice, planning or consulting should be added to “Other”
fees. If the breakout of tax fees cannot be determined, add all tax fees to
“Other” fees.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
In
circumstances where "Other" fees include fees related to significant one-time
capital structure events: initial public offerings, bankruptcy emergence, and
spin-offs; and the company makes public disclosure of the amount and nature of
those fees which are an exception to the standard "non-audit fee" category, then
such fees may be excluded from the non-audit fees considered in determining the
ratio of non-audit to audit/audit-related fees/tax compliance and preparation
for purposes of determining whether non-audit fees are excessive.
Receiving
and/or Approving Financial Reports (This is a non-US issue)
Vote
FOR approval of financial statements and director and auditor reports, unless:
•There
are concerns about the accounts presented or audit procedures used
•The
company is not responsive to shareholder questions about specific items that
should be publicly disclosed
Shareholder
Proposals Limiting Non-Audit Services
Vote
CASE-BY-CASE on shareholder proposals asking companies to prohibit or limit
their auditors from engaging in non-audit services.
Shareholder
Proposals on Audit Firm Rotation
Vote
CASE-BY-CASE on shareholder proposals asking for audit firm rotation, taking
into account:
•The
tenure of the audit firm
•The
length of rotation specified in the proposal
•Any
significant audit-related issues at the company
•The
number of Audit Committee meetings held each year
•The
number of financial experts serving on the committee
•Whether
the company has a periodic renewal process where the auditor is evaluated for
both audit quality and competitive price
Board
of Directors
Voting
on Director Nominees in Uncontested Elections
Votes
on director nominees should be determined CASE-BY-CASE.
Four
fundamental principles apply when determining votes on director nominees:
1.Board
Accountability:
Practices that promote accountability include: transparency into a company’s
governance practices; annual board elections; and providing shareholders the
ability to remove problematic directors and to vote on takeover defenses or
other charter/bylaw amendments. These practices help reduce the opportunity for
management entrenchment.
2.Board
Responsiveness:
Directors should be responsive to shareholders, particularly in regard to
shareholder proposals that receive a majority vote and to tender offers where a
majority of shares are tendered. Furthermore, shareholders should expect
directors to devote sufficient time and resources to oversight of the
company.
3.Director
Independence:
Without independence from management, the board may be unwilling or unable to
effectively set company strategy and scrutinize performance or executive
compensation.
4.Director
Competence:
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. While directors should not be constrained by arbitrary limits such
as age or term limits, directors who are unable to attend board and committee
meetings and/or who are overextended (i.e. serving on too many boards) raise
concern on the director’s ability to effectively serve in shareholders’ best
interests.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Board
Accountability
VOTE
WITHHOLD/AGAINST1
the entire board of directors (except new nominees2,
who should be considered CASE-BY-CASE), for the following:
Problematic
Takeover Defenses:
Classified
board structure:
The
board is classified, and a continuing director responsible for a problematic
governance issue at the board/committee level that would warrant a
withhold/against vote recommendation is not up for election -- any or all
appropriate nominees (except new) may be held accountable.
Director
Performance Evaluation:
The
board lacks accountability and oversight, coupled with sustained poor
performance relative to peers. Sustained poor performance is measured by one-,
three- and five-year total shareholder returns in the bottom half of a company’s
four-digit GICS industry group (Russell 3000 companies only). Take into
consideration the company’s operational metrics and other factors as warranted.
Problematic
provisions include but are not limited to:
•A
classified board structure
•A
supermajority vote requirement
•Either
a plurality vote standard in uncontested director elections or a majority vote
standard with no plurality carve-out for contested elections
•The
inability of shareholders to call special meetings
•The
inability of shareholders to act by written consent
•A
dual-class capital structure
•A
non–shareholder-approved poison pill
Poison
Pills:
The
company has a poison pill that was not approved by shareholders. However, vote
case-by-case on nominees if the board adopts an initial pill with a term of one
year or less, depending on the disclosed rationale for the adoption, and other
factors as relevant (such as a commitment to put any renewal to a shareholder
vote).
The
board makes a material adverse modification to an existing pill, including, but
not limited to, extension, renewal, or lowering the trigger, without shareholder
approval.
Restricting
Binding Shareholder Proposals:
Generally
vote against or withhold from the members of the governance committee if:
•The
company’s governing documents impose undue restrictions on shareholders’ ability
to amend the bylaws. Such restrictions include but are not limited to: outright
prohibition on the submission of binding shareholder proposals or share
ownership requirements, subject matter restrictions, or time holding
requirements in excess of SEC Rule 14a-8. Vote against or withhold on an ongoing
basis.
1
In general, companies with a plurality vote standard use "Withhold" as the valid
contrary vote option in director elections; companies with a majority vote
standard use "Against". However, it will vary by company and the proxy must be
checked to determine the valid contrary vote option for the particular
company.
2
A “new nominee” is any current nominee who has not already been elected by
shareholders and who joined the board after the problematic action in question
transpired. If Victory cannot determine whether the nominee joined the board
before or after the problematic action transpired, the nominee will be
considered a “new nominee” if he or she joined the board within the 12 months
prior to the upcoming shareholder meeting.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Submission
of management proposals to approve or ratify requirements in excess of SEC Rule
14a-8 for the submission of binding bylaw amendments will generally be viewed as
an insufficient restoration of shareholders' rights. Generally continue to vote
against or withhold on an ongoing basis until shareholders are provided with an
unfettered ability to amend the bylaws or a proposal providing for such
unfettered right is submitted for shareholder approval.
Problematic
Audit-Related Practices
Generally,
vote AGAINST or WITHHOLD from the members of the Audit Committee
if:
•The
non-audit fees paid to the auditor are excessive (see discussion under
“Auditor
Ratification”)
•The
company receives an adverse opinion on the company’s financial statements from
its auditor
•There
is persuasive evidence that the audit committee entered into an inappropriate
indemnification agreement with its auditor that limits the ability of the
company, or its shareholders, to pursue legitimate legal recourse against the
audit firm
Vote
CASE-BY-CASE on members of the Audit Committee and/or the full board if poor
accounting practices are identified that rise to a level of serious concern,
such as: fraud; misapplication of GAAP; and material weaknesses identified in
Section 404 disclosures. Examine the severity, breadth, chronological sequence
and duration, as well as the company’s efforts at remediation or corrective
actions, in determining whether WITHHOLD/AGAINST votes are
warranted.
Problematic
Compensation Practices
In
the absence of an Advisory Vote on Executive Compensation (Say on Pay) ballot
item or in egregious situations, vote against or withhold from the members of
the Compensation Committee and potentially the full board if:
•There
is a significant misalignment between CEO pay and company performance
•The
company maintains significant problematic pay practices
•The
board exhibits a significant level of poor communication and responsiveness to
shareholders
•The
company fails to include a Say on Pay ballot item when required under SEC
provisions, or under the company’s declared frequency of say on pay
or
•The
company fails to include a Frequency of Say on Pay ballot item when required
under SEC provisions
Generally
vote against members of the board committee responsible for approving/setting
non-employee director compensation if there is a pattern (i.e. two or more
years) of awarding excessive non-employee director compensation without
disclosing a compelling rationale or other mitigating factors.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Unilateral
Bylaw/Charter Amendments
Generally
vote against or withhold from directors individually, committee members, or the
entire board (except new nominees, who should be considered case-by-case) if the
board amends the company's bylaws or charter without shareholder approval in a
manner that materially diminishes shareholders' rights or that could adversely
impact shareholders, considering the following factors:
•The
board's rationale for adopting the bylaw/charter amendment without shareholder
ratification
•Disclosure
by the company of any significant engagement with shareholders regarding the
amendment
•The
level of impairment of shareholders' rights caused by the board's unilateral
amendment to the bylaws/charter
•The
board's track record with regard to unilateral board action on bylaw/charter
amendments or other entrenchment provisions
•The
company's ownership structure
•The
company's existing governance provisions
•The
timing of the board's amendment to the bylaws/charter in connection with a
significant business development and,
•Other
factors, as deemed appropriate, that may be relevant to determine the impact of
the amendment on shareholders
For
newly public companies, generally vote against or withhold from directors
individually, committee members, or the entire board (except new nominees, who
should be considered case-by-case) if, prior to or in connection with the
company's public offering, the company or its board adopted the following bylaw
or charter provisions that are considered to be materially adverse to
shareholder rights:
•Supermajority
vote requirements to amend the bylaws or charter;
•A
classified board structure; or
•Other
egregious provisions.
A
reasonable sunset provision will be considered a mitigating factor.
Unless
the adverse provision is reversed or removed, vote case-by-case on director
nominees in subsequent years.
For
newly public companies, generally vote against or withhold from the entire board
(except new nominees, who should be considered case-by-case) if, prior to or in
connection with the company's public offering, the company or its board
implemented a multi-class capital structure in which the classes have unequal
voting rights without subjecting the multi-class capital structure to a
reasonable time-based sunset. In assessing the reasonableness of a time-based
sunset provision, consideration will be given to the company’s lifespan, its
post-IPO ownership structure and the board’s disclosed rationale for the sunset
period selected. No sunset period of more than seven years from the date of the
IPO will be considered to be reasonable. Continue to vote against or withhold
from incumbent directors in subsequent years, unless the problematic capital
structure is reversed or removed.
Governance
Failures
Under
extraordinary circumstances, vote AGAINST or WITHHOLD from directors
individually, committee members, or the entire board, due to:
•Material
failures of governance, stewardship, or fiduciary responsibilities at the
company
•Failure
to replace management as appropriate or
•Egregious
actions related to the director(s)’ service on other boards that raise
substantial doubt about his or her ability to effectively oversee management and
serve the best interests of shareholders at any company
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Management
Proposals to Ratify Existing Charter or Bylaw Provisions
Vote
against/withhold from individual directors, members of the governance committee,
or the full board, where boards ask shareholders to ratify existing charter or
bylaw provisions considering the following factors:
•The
presence of a shareholder proposal addressing the same issue on the same
ballot;
•The
board's rationale for seeking ratification;
•Disclosure
of actions to be taken by the board should the ratification proposal
fail;
•Disclosure
of shareholder engagement regarding the board’s ratification
request;
•The
level of impairment to shareholders' rights caused by the existing provision;
•The
history of management and shareholder proposals on the provision at the
company’s past meetings;
•Whether
the current provision was adopted in response to the shareholder
proposal;
•The
company's ownership structure; and
•Previous
use of ratification proposals to exclude shareholder proposals.
Generally
vote against management proposals to ratify provisions of the company’s existing
charter or bylaws, unless these governance provisions align with best practice.
In addition, voting against/withhold from individual directors, members of the
governance committee, or the full board may be warranted,
considering:
•The
presence of a shareholder proposal addressing the same issue on the same
ballot;
•The
board's rationale for seeking ratification;
•Disclosure
of actions to be taken by the board should the ratification proposal
fail;
•Disclosure
of shareholder engagement regarding the board’s ratification
request;
•The
level of impairment to shareholders' rights caused by the existing provision;
•The
history of management and shareholder proposals on the provision at the
company’s past meetings;
•Whether
the current provision was adopted in response to the shareholder
proposal;
•The
company's ownership structure; and
•Previous
use of ratification proposals to exclude shareholder proposals.
Board
Responsiveness
Vote
case-by-case on individual directors, committee members, or the entire board of
directors as appropriate if:
The
board failed to act on a shareholder proposal that received the support of a
majority of the shares cast in the previous year or failed to act on a
management proposal seeking to ratify an existing charter/bylaw provision that
received opposition of a majority of the shares cast in the previous year.
Factors that will be considered are:
•Disclosed
outreach efforts by the board to shareholders in the wake of the vote
•Rationale
provided in the proxy statement for the level of implementation
•The
subject matter of the proposal
•The
level of support for and opposition to the resolution in past meetings
•Actions
taken by the board in response to the majority vote and its engagement with
shareholders
•The
continuation of the underlying issue as a voting item on the ballot (as either
shareholder or management proposals) and
•Other
factors as appropriate
The
board failed to act on takeover offers where the majority of shares are tendered
At
the previous board election, any director received more than 50 percent
withhold/against votes of the shares cast and the company has failed to address
the issue(s) that caused the high withhold/against vote
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
The
board implements an advisory vote on executive compensation on a less frequent
basis than the frequency that received the majority of votes cast at the most
recent shareholder meeting at which shareholders voted on the say-on-pay
frequency or
The
board implements an advisory vote on executive compensation on a less frequent
basis than the frequency that received a plurality, but not a majority, of the
votes cast at the most recent shareholder meeting at which shareholders voted on
the say-on-pay frequency, taking into account
•The
board's rationale for selecting a frequency that is different from the frequency
that received a plurality
•The
company's ownership structure and vote results
•Analysis
of whether there are compensation concerns or a history of problematic
compensation practices and
•The
previous year's support level on the company's say-on-pay proposal
Director
Independence
Vote
WITHHOLD/AGAINST Inside Directors and Affiliated Outside Directors (per the
current Categorization of Directors) when:
•The
inside or affiliated outside director serves on any of the three key committees:
audit, compensation, or nominating
•The
company lacks an audit, compensation, or nominating committee so that the full
board functions as that committee
•The
company lacks a formal nominating committee, even if the board attests that the
independent directors fulfill the functions of such a committee
•The
full board is less than majority independent
Director
Competence
Attendance
at Board and Committee Meetings
Generally
vote AGAINST or WITHHOLD from directors (except new nominees3)
who attend less than 75 percent of the aggregate of their board and committee
meetings for the period for which they served, unless an acceptable reason for
absences is disclosed in the proxy or another SEC filing. Acceptable reasons for
director absences are generally limited to the following:
•Medical
issues/illness
•Family
emergencies
•Missing
only one meeting (when the total of all meetings is three or fewer)
In
cases of chronic poor attendance without reasonable justification, in addition
to voting against the director(s) with poor attendance, generally vote against
or withhold from appropriate members of the nominating/governance committees or
the full board.
If
the proxy disclosure is unclear and insufficient to determine whether a director
attended at least 75 percent of the aggregate of his/her board and committee
meetings during his/her period of service, vote AGAINST or WITHHOLD from the
director(s) in question.
3
New nominees who served for only part of the fiscal year are generally exempted
from the attendance policy.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Overboarded
Directors
Vote
AGAINST or WITHHOLD from individual directors who:
•Sit
on more than five public company boards
•Are
CEOs of public companies who sit on the boards of more than two public companies
besides their own-- withhold only at their outside boards
Other
Board-Related Proposals
Age/Term
Limits
Vote
AGAINST management and shareholder proposals to limit the tenure of outside
directors through mandatory retirement ages.
Vote
AGAINST management proposals to limit the tenure of outside directors through
term limits. However, scrutinize boards where the average tenure of all
directors exceeds 15 years for independence from management and for sufficient
turnover to ensure that new perspectives are being added to the board.
Board
Size
Vote
FOR proposals seeking to fix the board size or designate a range for the board
size.
Vote
AGAINST proposals that give management the ability to alter the size of the
board outside of a specified range without shareholder approval.
Classification/Declassification
of the Board
Vote
AGAINST proposals to classify (stagger) the board.
Vote
FOR proposals to repeal classified boards and to elect all directors
annually.
CEO
Succession Planning
Generally
vote FOR proposals seeking disclosure on a CEO succession planning policy,
considering at a minimum, the following factors:
•The
reasonableness/scope of the request; and
•The
company’s existing disclosure on its current CEO succession planning
process.
Cumulative
Voting
Generally
vote FOR proposals to eliminate cumulative voting.
Generally
vote AGAINST shareholder proposals to restore or provide for cumulative voting.
Director
and Officer Indemnification and Liability Protection
Vote
CASE-BY-CASE on proposals on director and officer indemnification and liability
protection using Delaware law as the standard.
Vote
AGAINST proposals that would:
•Eliminate
entirely directors' and officers' liability for monetary damages for violating
the duty of care
•Expand
coverage beyond just legal expenses to liability for acts, such as negligence,
that are more serious violations of fiduciary obligation than mere
carelessness
•Expand
the scope of indemnification to provide for mandatory indemnification of company
officials in connection with acts that previously the company was permitted to
provide indemnification for, at the discretion of the company's board (i.e.,
"permissive indemnification"), but that previously the company was not required
to indemnify
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Vote
FOR only those proposals providing such expanded coverage in cases when a
director’s or officer’s legal defense was unsuccessful if both of the following
apply:
•If
the director was found to have acted in good faith and in a manner that he
reasonably believed was in the best interests of the company
•If
only the director’s legal expenses would be covered
Establish/Amend
Nominee Qualifications
Vote
CASE-BY-CASE on proposals that establish or amend director qualifications. Votes
should be based on the reasonableness of the criteria and to what degree they
may preclude dissident nominees from joining the board.
Vote
CASE-BY-CASE on shareholder resolutions seeking a director nominee candidate who
possesses a particular subject matter expertise, considering:
•The
company’s board committee structure, existing subject matter expertise, and
board nomination provisions relative to that of its peers
•The
company’s existing board and management oversight mechanisms regarding the issue
for which board oversight is sought
•The
company disclosure and performance relating to the issue for which board
oversight is sought and any significant related controversies
•The
scope and structure of the proposal
Establish
other Board Committee Proposals
Generally
vote AGAINST shareholder proposals to establish a new board
committee.
Filling
Vacancies/Removal of Directors
Vote
AGAINST proposals that provide that directors may be removed only for
cause.
Vote
FOR proposals to restore shareholders’ ability to remove directors with or
without cause.
Vote
AGAINST proposals that provide that only continuing directors may elect
replacements to fill board vacancies.
Vote
FOR proposals that permit shareholders to elect directors to fill board
vacancies.
Independent
Chair (Separate Chair/CEO)
Generally
vote for shareholder proposals requiring that the board chair position be filled
by an independent director, taking into consideration the
following:
•The
scope and rationale of the proposal;
•The
company's current board leadership structure;
•The
company's governance structure and practices;
•Company
performance; and
•Any
other relevant factors that may be applicable.
The
following factors will increase the likelihood of a “for”
recommendation:
•A
majority non-independent board and/or the presence of non-independent directors
on key board committees;
•A
weak or poorly-defined lead independent director role that fails to serve as an
appropriate counterbalance to a combined CEO/chair role;
•The
presence of an executive or non-independent chair in addition to the CEO, a
recent recombination of the role of CEO and chair, and/or departure from a
structure with an independent chair;
•Evidence
that the board has failed to oversee and address material risks facing the
company;
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
•A
material governance failure, particularly if the board has failed to adequately
respond to shareholder concerns or if the board has materially diminished
shareholder rights; or evidence that the board has failed to intervene when
management’s interests are contrary to shareholders' interests.
•Evidence
that the board has failed to intervene when management’s interests are contrary
to shareholders’ interests.
Majority
of Independent Directors/Establishment of Independent Committees
Vote
FOR shareholder proposals asking that a majority or more of directors be
independent unless the board composition already meets the proposed threshold by
Victory’s definition of independent outsider.
Vote
FOR shareholder proposals asking that board audit, compensation, and/or
nominating committees be composed exclusively of independent directors if they
currently do not meet that standard.
Majority
Vote Standard for the Election of Directors
Vote
AGAINST if the company already has a Resignation Policy in place, otherwise vote
with stated policy
Generally
vote FOR management proposals to adopt a majority of votes cast standard for
directors in uncontested elections. Vote AGAINST if no carve-out for plurality
in contested elections is included.
Generally
vote FOR precatory and binding shareholder resolutions requesting that the board
change the company’s bylaws to stipulate that directors need to be elected with
an affirmative majority of votes cast, provided it does not conflict with the
state law where the company is incorporated. Binding resolutions need to allow
for a carve-out for a plurality vote standard when there are more nominees than
board seats.
Companies
are strongly encouraged to also adopt a post-election policy (also known as a
director resignation policy) that will provide guidelines so that the company
will promptly address the situation of a holdover director.
Proxy
Access (Open Access)
Vote
CASE-BY-CASE on shareholder proposals asking for open or proxy access, taking
into account:
•The
ownership threshold proposed in the resolution;
•The
proponent’s rationale for the proposal at the targeted company in terms of board
and director conduct.
In
the case of candidates nominated pursuant to proxy access, vote case-by-case
considering any applicable factors listed below, with reference to contested
director elections, or additional factors which may be relevant, including those
that are specific to the company, to the nominee(s) and/or to the nature of the
election (such as whether or not there are more candidates than board
seats).
•Long-term
financial performance of the target company relative to its
industry
•Management’s
track record
•Background
to the contested election
•Nominee
qualifications and any compensatory arrangements
•Strategic
plan of dissident slate and quality of critique against management
•Likelihood
that the proposed goals and objectives can be achieved (both
slates)
•Stock
ownership positions
Require
More Nominees than Open Seats
Vote
AGAINST shareholder proposals that would require a company to nominate more
candidates than the number of open board seats.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Shareholder
Engagement Policy (Shareholder Advisory Committee)
Generally
vote FOR shareholders proposals requesting that the board establish an internal
mechanism/process, which may include a committee, in order to improve
communications between directors and shareholders, unless the company has the
following features, as appropriate:
•Established
a communication structure that goes beyond the exchange requirements to
facilitate the exchange of information between shareholders and members of the
board
•Effectively
disclosed information with respect to this structure to its shareholders
•Company
has not ignored majority-supported shareholder proposals or a majority withhold
vote on a director nominee
•The
company has an independent chairman or a lead director, according to Victory’s
definition This individual must be made available for periodic consultation and
direct communication with major shareholders
Proxy
Contests- Voting for Director Nominees in Contested Elections
Internally
reviewed on a CASE-BY-CASE basis.
Vote
No Campaigns
In
cases where companies are targeted in connection with public “vote no”
campaigns, evaluate director nominees under the existing governance policies for
voting on director nominees in uncontested elections. Take into consideration
the arguments submitted by shareholders and other publicly available
information.
Takeover
Defenses and Related Actions
Anti-takeover
statutes generally increase management's potential for insulating itself and
warding off hostile takeovers that may be beneficial to shareholders. While it
may be true that some boards use such devices to obtain higher bids and to
enhance shareholder value, it is more likely that such provisions are used to
entrench management.
Advance
Notice Requirements for Shareholder Proposals/Nominations
Vote
CASE-BY-CASE on advance notice proposals, giving support to those proposals
which allow shareholders to submit proposals/nominations as close to the meeting
date as reasonably possible and within the broadest window possible, recognizing
the need to allow sufficient notice for company, regulatory and shareholder
review.
To
be reasonable, the company’s deadline for shareholder notice of a proposal/
nominations must not be more than 60 days prior to the meeting, with a submittal
window of at least 30 days prior to the deadline. The submittal window is the
period under which a shareholder must file his proposal/nominations prior to the
deadline.
In
general, support additional efforts by companies to ensure full disclosure in
regard to a proponent’s economic and voting position in the company so long as
the informational requirements are reasonable and aimed at providing
shareholders with the necessary information to review such
proposals.
Amend
Bylaws without Shareholder Consent
Vote
AGAINST proposals giving the board exclusive authority to amend the
bylaws.
Vote
FOR proposals giving the board the ability to amend the bylaws in addition to
shareholders.
Confidential
Vote Tabulation/Confidential Voting
Victory
Capital will evaluate shareholder proposals requesting confidential running vote
tally proposals on a case-by-case basis taking into account the following
factors:
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Whether
the policy allows the company to monitor the number of votes cast for purposes
of achieving a quorum or to conduct solicitations for other proper purposes
Whether
the enhanced confidential voting requirement applies to contested elections of
directors or to contested proxy solicitations, which would put the company at a
disadvantage relative to dissidents
Generally,
vote FOR shareholder proposals requesting that corporations adopt confidential
voting, use independent vote tabulators, and use independent inspectors of
election, as long as the proposal includes a provision for proxy contests as
follows: In the case of a contested election, management should be permitted to
request that the dissident group honor its confidential voting policy. If the
dissidents agree, the policy remains in place. If the dissidents will not agree,
the confidential voting policy is waived.
Vote
FOR management proposals to adopt confidential voting.
Control
Share Acquisition Provisions
Control
share acquisition statutes function by denying shares their voting rights when
they contribute to ownership in excess of certain thresholds. Voting rights for
those shares exceeding ownership limits may only be restored by approval of
either a majority or supermajority of disinterested shares. Thus, control share
acquisition statutes effectively require a hostile bidder to put its offer to a
shareholder vote or risk voting disenfranchisement if the bidder continues
buying up a large block of shares.
Vote
FOR proposals to opt out of control share acquisition statutes unless doing so
would enable the completion of a takeover that would be detrimental to
shareholders.
Vote
AGAINST proposals to amend the charter to include control share acquisition
provisions.
Vote
FOR proposals to restore voting rights to the control shares.
Control
Share Cash-Out Provisions
Control
share cash-out statutes give dissident shareholders the right to "cash-out" of
their position in a company at the expense of the shareholder who has taken a
control position. In other words, when an investor crosses a preset threshold
level, remaining shareholders are given the right to sell their shares to the
acquirer, who must buy them at the highest acquiring price.
Vote
FOR proposals to opt out of control share cash-out statutes.
Disgorgement
Provisions
Disgorgement
provisions require an acquirer or potential acquirer of more than a certain
percentage of a company's stock to disgorge, or pay back, to the company any
profits realized from the sale of that company's stock purchased 24 months
before achieving control status. All sales of company stock by the acquirer
occurring within a certain period of time (between 18 months and 24 months)
prior to the investor's gaining control status are subject to these
recapture-of-profits provisions.
Vote
FOR proposals to opt out of state disgorgement provisions.
Equal
Access Proposals
Vote
FOR proposals seeking equal access to proxies.
Fair
Price Provisions
Vote
CASE-BY-CASE on proposals to adopt fair price provisions (provisions that
stipulate that an acquirer must pay the same price to acquire all shares as it
paid to acquire the control shares), evaluating factors such as the vote
required to approve the proposed acquisition, the vote required to repeal the
fair price provision, and the mechanism for determining the fair
price.
Generally,
vote AGAINST fair price provisions with shareholder vote requirements greater
than a majority of disinterested shares.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Freeze-Out
Provisions
Vote
FOR proposals to opt out of state freeze-out provisions. Freeze-out provisions
force an investor who surpasses a certain ownership threshold in a company to
wait a specified period of time before gaining control of the
company.
Greenmail
Greenmail
payments are 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.
Vote
FOR proposals to adopt anti-greenmail charter or bylaw amendments or otherwise
restrict a company’s ability to make greenmail payments.
Vote
CASE-BY-CASE on anti-greenmail proposals when they are bundled with other
charter or bylaw amendments.
Litigation
Rights (including Exclusive Venue and Fee-Shifting Bylaw
Provisions)
Bylaw
provisions impacting shareholders' ability to bring suit against the company may
include exclusive venue provisions, which provide that the state of
incorporation shall be the sole venue for certain types of litigation, and
fee-shifting provisions that
require
a shareholder who sues a company unsuccessfully to pay all litigation expenses
of the defendant corporation.
General
Recommendation: Vote
case-by-case on bylaws which impact shareholders' litigation rights, taking into
account factors such as:
•The
company's stated rationale for adopting such a provision
•Disclosure
of past harm from shareholder lawsuits in which plaintiffs were unsuccessful or
shareholder lawsuits outside the jurisdiction of incorporation
•The
breadth of application of the bylaw, including the types of lawsuits to which it
would apply and the definition of key terms
•Governance
features such as shareholders' ability to repeal the provision at a later date
(including the vote standard applied when shareholders attempt to amend the
bylaws) and their ability to hold directors accountable through annual director
elections and a majority vote standard in uncontested elections
Generally
vote against bylaws that mandate fee-shifting whenever plaintiffs are not
completely successful on the merits (i.e., in cases where the plaintiffs are
partially successful).
Net
Operating Loss (NOL) Protective Amendments
Vote
AGAINST proposals to adopt a protective amendment for the stated purpose of
protecting a company's net operating losses (“NOLs”) if the effective term of
the protective amendment would exceed the shorter of three years and the
exhaustion of the NOL.
Vote
CASE-BY-CASE, considering the following factors, for management proposals to
adopt an NOL protective amendment that would remain in effect for the shorter of
three years (or less) and the exhaustion of the NOL:
•The
ownership threshold (NOL protective amendments generally prohibit stock
ownership transfers that would result in a new 5-percent holder or increase the
stock ownership percentage of an existing 5-percent holder)
•The
value of the NOLs
•Shareholder
protection mechanisms (sunset provision or commitment to cause expiration of the
protective amendment upon exhaustion or expiration of the NOL)
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
•The
company's existing governance structure including: board independence, existing
takeover defenses, track record of responsiveness to shareholders, and any other
problematic governance concerns
•Any
other factors that may be applicable
Poison
Pills (Shareholder Rights Plans)
Shareholder
Proposals to Put Pill to a Vote and/or Adopt a Pill Policy
Vote
FOR shareholder proposals requesting that the company submit its poison pill to
a shareholder vote or redeem it UNLESS the company has: (1) A shareholder
approved poison pill in place; or (2) The company has adopted a policy
concerning the adoption of a pill in the future specifying that the board will
only adopt a shareholder rights plan if either:
•Shareholders
have approved the adoption of the plan, or
•The
board, in its exercise of its fiduciary responsibilities, determines that it is
in the best interest of shareholders under the circumstances to adopt a pill
without the delay in adoption that would result from seeking stockholder
approval (i.e., the “fiduciary out” provision). A poison pill adopted under this
fiduciary out will be put to a shareholder ratification vote within 12 months of
adoption or expire. If the pill is not approved by a majority of the votes cast
on this issue, the plan will immediately terminate.
If
the shareholder proposal calls for a time period of less than 12 months for
shareholder ratification after adoption, vote FOR the proposal, but add the
caveat that a vote within 12 months would be considered sufficient
implementation.
Management
Proposals to Ratify a Poison Pill
Vote
CASE-BY-CASE on management proposals on poison pill ratification, focusing on
the features of the shareholder rights plan. Rights plans should contain the
following attributes:
•No
lower than a 20% trigger, flip-in or flip-over
•A
term of no more than three years
•No
dead-hand, slow-hand, no-hand or similar feature that limits the ability of a
future board to redeem the pill
•Shareholder
redemption feature (qualifying offer clause); if the board refuses to redeem the
pill 90 days after a qualifying offer is announced, 10 percent of the shares may
call a special meeting or seek a written consent to vote on rescinding the pill
In
addition, the rationale for adopting the pill should be thoroughly explained by
the company. In examining the request for the pill, take into consideration the
company’s existing governance structure, including: board independence, existing
takeover defenses, and any problematic governance concerns.
Management
Proposals to Ratify a Pill to Preserve Net Operating Losses (NOLs)
Vote
AGAINST proposals to adopt a poison pill for the stated purpose of protecting a
company's net operating losses (“NOLs”) if the term of the pill would exceed the
shorter of three years and the exhaustion of the NOL.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Vote
CASE-BY-CASE on management proposals for poison pill ratification, considering
the following factors, if the term of the pill would be the shorter of three
years (or less) and the exhaustion of the NOL:
•The
ownership threshold to transfer (NOL pills generally have a trigger slightly
below 5 percent)
•The
value of the NOLs
•Shareholder
protection mechanisms (sunset provision, or commitment to cause expiration of
the pill upon exhaustion or expiration of NOLs)
•The
company's existing governance structure including: board independence, existing
takeover defenses, track record of responsiveness to shareholders, and any other
problematic governance concerns
•Any
other factors that may be applicable
Reimbursing
Proxy Solicitation Expenses
Vote
CASE-BY-CASE on proposals to reimburse proxy solicitation expenses. When voting
in conjunction with support of a dissident slate, vote FOR the reimbursement of
all appropriate proxy solicitation expenses associated with the
election.
Generally
vote FOR shareholder proposals calling for the reimbursement of reasonable costs
incurred in connection with nominating one or more candidates in a contested
election where the following apply:
•The
election of fewer than 50% of the directors to be elected is contested in the
election
•One
or more of the dissident’s candidates is elected
•Shareholders
are not permitted to cumulate their votes for directors
•The
election occurred, and the expenses were incurred, after the adoption of this
bylaw.
Reincorporation
Proposals
Management
or shareholder proposals to change a company's state of incorporation should be
evaluated CASE-BY-CASE, giving consideration to both financial and corporate
governance concerns including the following:
•Reasons
for reincorporation
•Comparison
of company's governance practices and provisions prior to and following the
reincorporation
•Comparison
of corporation laws of original state and destination state
Vote
FOR reincorporation when the economic factors outweigh any neutral or negative
governance changes.
Shareholder
Ability to Act by Written Consent
Generally
vote AGAINST management and shareholder proposals to restrict or prohibit
shareholders' ability to act by written consent.
Generally
vote FOR management and shareholder proposals that provide shareholders with the
ability to act by written consent, taking into account the following factors:
•Shareholders'
current right to act by written consent
•The
consent threshold
•The
inclusion of exclusionary or prohibitive language
•Investor
ownership structure
•Shareholder
support of, and management's response to, previous shareholder
proposals
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Vote
CASE-BY-CASE on shareholder proposals if, in addition to the considerations
above, the company has the following governance and antitakeover
provisions:
•An
unfettered 4right
for shareholders to call special meetings at a 10 percent threshold
•A
majority vote standard in uncontested director elections
•No
non-shareholder-approved pill
•An
annually elected board
Shareholder
Ability to Call Special Meetings
Vote
AGAINST proposals restricting or eliminating shareholders' right to call special
meetings.
Vote
FOR proposals allowing shareholders to call special meetings unless the company
currently provides the right to call special meetings at a threshold of 25
percent, upon which Victory votes AGAINST.
Stakeholder
Provisions
Vote
AGAINST proposals that ask the board to consider non-shareholder constituencies
or other non-financial effects when evaluating a merger or business
combination.
State
Antitakeover Statutes
Vote
CASE-BY-CASE on proposals to opt in or out of state takeover statutes (including
fair price provisions, stakeholder laws, poison pill endorsements, severance pay
and labor contract provisions, and anti-greenmail provisions).
Supermajority
Vote Requirements
Vote
CASE-BY-CASE on proposals that request either the elimination/adoption of
supermajority vote requirements or a decrease/increase in the supermajority
threshold.
Generally,
vote AGAINST proposals to require a supermajority shareholder vote.
Generally,
vote FOR management or shareholder proposals to reduce supermajority vote
requirements. However, for companies with shareholder(s) who have significant
ownership levels, the proposal shall be further examined, taking into
account:
•Ownership
structure
•Quorum
requirements
•Vote
requirements
CAPITAL/RESTRUCTURING
The
stewardship of a corporation's capital structure involves a number of important
issues, including dividend policy, taxes, types of assets, opportunities for
growth, ability to finance new projects internally, and the cost of obtaining
additional capital. For the most part, these decisions are best left to the
board and senior management of the firm. However, while a company's value
depends more on its capital investment and operations than on how it is
financed, many financing decisions have a significant impact on shareholders,
particularly when they involve the issuance of additional common stock,
preferred stock, or the assumption of additional debt. Additional equity
financing, for example, may reduce an existing shareholder's ownership interest
and can dilute the value of his investment. Shareholders must also be alert to
potential anti-takeover mechanisms, which are often embedded in management's
chosen financing vehicles.
4
"Unfettered" means no restrictions on agenda items, no restrictions on the
number of shareholders who can group together to reach the 10 percent threshold,
and only reasonable limits on when a meeting can be called: no greater than 30
days after the last annual meeting and no greater than 90 prior to the next
annual meeting.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Capital
Adjustments
to Par Value of Common Stock
Vote
FOR management proposals to reduce the par value of common stock unless the
action is being taken to facilitate an anti-takeover device or some other
negative corporate governance action
Vote
FOR management proposals to eliminate par value.
Common
Stock Authorization
Vote
FOR proposals to increase the number of authorized common shares where the
primary purpose of the increase is to issue shares in connection with a
transaction on the same ballot that warrants support.
Vote
AGAINST proposals at companies with more than one class of common stock to
increase the number of authorized shares of the class of common stock that has
superior voting rights.
Vote
AGAINST proposals to increase the number of authorized common shares if a vote
for a reverse stock split on the same ballot is warranted despite the fact that
the authorized shares would not be reduced proportionally.
Vote
FOR increases in authorized common stock, unless the increase is being used to
thwart a takeover, upon which Victory votes AGAINST.
Vote
AGAINST proposals that seek to permanently revoke or remove preemptive rights
from shareholders.
Vote
CASE-BY-CASE on all other proposals to increase the number of shares of common
stock authorized for issuance. Take into account company-specific factors that
include, at a minimum, the following:
•Past
Board Performance:
–The
company's use of authorized shares during the last three years
•The
Current Request:
–Disclosure
in the proxy statement of the specific purposes of the proposed
increase
–Disclosure
in the proxy statement of specific and severe risks to shareholders of not
approving the request
–The
dilutive impact of the request as determined by an allowable increase calculated
by Victory (typically 100 percent of existing authorized shares) that reflects
the company's need for shares and total shareholder returns
Issue
Stock for Use with Rights Plan
Vote
AGAINST proposals that increase authorized common stock for the explicit purpose
of implementing a non-shareholder- approved shareholder rights plan (poison
pill).
Authority
to Issue Additional Debt (This is a non-US issue)
Vote
non-convertible debt issuance requests on a CASE-BY-CASE basis, with or without
preemptive rights.
Vote
FOR the creation/issuance of convertible debt instruments as long as the maximum
number of common shares that could be issued upon conversion is reasonable.
Vote
FOR proposals to restructure existing debt arrangements unless the terms of the
restructuring would adversely affect the rights of shareholders.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Preemptive
Rights
Vote
CASE-BY-CASE on shareholder proposals that seek preemptive rights, taking into
consideration:
•The
size of the company
•The
shareholder base
•The
liquidity of the stock
Preferred
Stock Authorization
Vote
FOR proposals to increase the number of authorized preferred shares where the
primary purpose of the increase is to issue shares in connection with a
transaction on the same ballot that warrants support.
Vote
AGAINST proposals at companies with more than one class or series of preferred
stock to increase the number of authorized shares of the class or series of
preferred stock that has superior voting rights.
Vote
CASE-BY-CASE on all other proposals to increase the number of shares of
preferred stock authorized for issuance. Take into account company-specific
factors that include, at a minimum, the following:
•Past
Board Performance:
–The
company's use of authorized preferred shares during the last three
years
•The
Current Request:
–Disclosure
in the proxy statement of the specific purposes for the proposed
increase
–Disclosure
in the proxy statement of specific and severe risks to shareholders of not
approving the request
–In
cases where the company has existing authorized preferred stock, the dilutive
impact of the request as determined by an allowable increase calculated by
Victory (typically 100 percent of existing authorized shares) that reflects the
company's need for shares and total shareholder returns
–Whether
the shares requested are blank check preferred shares that can be used for
antitakeover purposes
Recapitalization
Plans
Vote
CASE-BY-CASE on recapitalizations (reclassifications of securities), taking into
account the following:
•More
simplified capital structure
•Enhanced
liquidity
•Fairness
of conversion terms
•Impact
on voting power and dividends
•Reasons
for the reclassification
•Conflicts
of interest
•Other
alternatives considered
•Reverse
Stock Splits
Vote
FOR management proposals to implement a reverse stock split when the number of
authorized shares will be proportionately reduced or the effective increase in
authorized shares is equal to or less than the allowable increase calculated in
accordance common stock authorization guidelines
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Vote
AGAINST proposals when there is not a proportionate reduction of authorized
shares, unless:
•A
stock exchange has provided notice to the company of a potential
delisting
•The
effective increase in authorized shares is equal to or less than the allowable
increase calculated in accordance with Victory's Common Stock Authorization
policy
Share
Repurchase Programs
For
U.S.-incorporated companies, and foreign-incorporated U.S. Domestic Issuers that
are traded solely on U.S. exchanges, vote for management proposals to institute
open-market share repurchase plans in which all shareholders may participate on
equal terms, or to grant the board authority to conduct open-market repurchases,
in the absence of company-specific concerns regarding:
•Greenmail,
•The
use of buybacks to inappropriately manipulate incentive compensation metrics,
•Threats
to the company's long-term viability, or
•Other
company-specific factors as warranted.
Vote
case-by-case on proposals to repurchase shares directly from specified
shareholders, balancing the stated rationale against the possibility for the
repurchase authority to be misused, such as to repurchase shares from insiders
at a premium to market price.
Stock
Distributions: Splits and Dividends
Vote
FOR management proposals to increase the common share authorization for a stock
split or share dividend, provided that the increase in authorized shares equal
to or less than the allowable increase calculated in accordance with Victory's
Common Stock Authorization policy.
Tracking
Stock
Vote
CASE-BY-CASE on the creation of tracking stock, weighing the strategic value of
the transaction against such factors as:
•Adverse
governance changes
•Excessive
increases in authorized capital stock
•Unfair
method of distribution
•Diminution
of voting rights
•Adverse
conversion features
•Negative
impact on stock option plans
•Alternatives
such as spin-off
Restructuring
Appraisal
Rights
Vote
FOR proposals to restore or provide shareholders with rights of
appraisal.
Asset
Purchases
Vote
CASE-BY-CASE on asset purchase proposals, considering the following
factors:
•Purchase
price
•Fairness
opinion
•Financial
and strategic benefits
•How
the deal was negotiated
•Conflicts
of interest
•Other
alternatives for the business
•Non-completion
risk
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Asset
Sales
Vote
CASE-BY-CASE on asset sales, considering the following factors:
•Impact
on the balance sheet/working capital
•Potential
elimination of diseconomies
•Anticipated
financial and operating benefits
•Anticipated
use of funds
•Value
received for the asset
•Fairness
opinion
•How
the deal was negotiated
•Conflicts
of interest
Bundled
Proposals
Vote
CASE-BY-CASE on bundled or “conditional” proxy proposals. In the case of items
that are conditioned upon each other, examine the benefits and costs of the
packaged items. In instances when the joint effect of the conditioned items is
not in shareholders’ best interests, vote AGAINST the proposals. If the combined
effect is positive, support such proposals.
Conversion
of Securities
Vote
CASE-BY-CASE on proposals regarding conversion of securities. When evaluating
these proposals the investor should review the dilution to existing
shareholders, the conversion price relative to market value, financial issues,
control issues, termination penalties, and conflicts of interest.
Vote
FOR the conversion if it is expected that the company will be subject to onerous
penalties or will be forced to file for bankruptcy if the transaction is not
approved.
Corporate
Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged
Buyouts/Wrap Plans
Vote
CASE-BY- CASE on proposals to increase common and/or preferred shares and to
issue shares as part of a debt restructuring plan, after evaluating:
•Dilution
to existing shareholders' positions
•Terms
of the offer - discount/premium in purchase price to investor, including any
fairness opinion; termination penalties; exit strategy
•Financial
issues - company's financial situation, degree of need for capital, use of
proceeds, effect of the financing on the company's cost of capital
•Management's
efforts to pursue other alternatives
•Control
issues - change in management, change in control, guaranteed board and committee
seats, standstill provisions, voting agreements, veto power over certain
corporate actions
•Conflict
of interest - arm's length transaction, managerial incentives
Vote
FOR the debt restructuring if it is expected that the company will file for
bankruptcy if the transaction is not approved.
Formation
of Holding Company
Vote
CASE-BY-CASE on proposals regarding the formation of a holding company, taking
into consideration the following:
•The
reasons for the change
•Any
financial or tax benefits
•Regulatory
benefits
•Increases
in capital structure
•Changes
to the articles of incorporation or bylaws of the company
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Absent
compelling financial reasons to recommend the transaction, vote AGAINST the
formation of a holding company if the transaction would include either of the
following:
•Increases
in common or preferred stock in excess of the allowable maximum (see discussion
under “Capital”)
•Adverse
changes in shareholder rights
Going
Private and Going Dark Transactions (LBOs and Minority
Squeeze-outs)
Vote
CASE-BY-CASE on going private transactions, taking into account the following:
•Offer
price/premium
•Fairness
opinion
•How
the deal was negotiated
•Conflicts
of interest
•Other
alternatives/offers considered
•Non-completion
risk
Vote
CASE-BY-CASE on going dark transactions, determining whether the transaction
enhances shareholder value by taking into consideration:
•Whether
the company has attained benefits from being publicly-traded (examination of
trading volume, liquidity, and market research of the stock)
•Balanced
interests of continuing vs. cashed-out shareholders, taking into account the
following:
–Are
all shareholders able to participate in the transaction
–Will
there be a liquid market for remaining shareholders following the transaction
–Does
the company have strong corporate governance
–Will
insiders reap the gains of control following the proposed
transaction
–Does
the state of incorporation have laws requiring continued reporting that may
benefit shareholders
Joint
Ventures
Vote
CASE-BY-CASE on proposals to form joint ventures, taking into account the
following:
•Percentage
of assets/business contributed
•Percentage
ownership
•Financial
and strategic benefits
•Governance
structure
•Conflicts
of interest
•Other
alternatives
•Non-completion
risk
Liquidations
Vote
CASE-BY-CASE on liquidations, taking into account the following:
•Management’s
efforts to pursue other alternatives
•Appraisal
value of assets
•The
compensation plan for executives managing the liquidation
Vote
FOR the liquidation if the company will file for bankruptcy if the proposal is
not approved.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Mergers
and Acquisitions
Vote
CASE –BY- CASE on mergers and acquisitions. Review and evaluate the merits and
drawbacks of the proposed transaction, balancing various and sometimes
countervailing factors including:
•Valuation
- Is the value to be received by the target shareholders (or paid by the
acquirer) reasonable? While the fairness opinion may provide an initial starting
point for assessing valuation reasonableness, emphasis is placed on the offer
premium, market reaction and strategic rationale.
•Market
reaction
- How has the market responded to the proposed deal? A negative market reaction
should cause closer scrutiny of a deal.
•Strategic
rationale
- Does the deal make sense strategically? From where is the value derived? Cost
and revenue synergies should not be overly aggressive or optimistic, but
reasonably achievable. Management should also have a favorable track record of
successful integration of historical acquisitions.
•Negotiations
and process
- Were the terms of the transaction negotiated at arm's-length? Was the process
fair and equitable? A fair process helps to ensure the best price for
shareholders. Significant negotiation "wins" can also signify the deal makers'
competency. The comprehensiveness of the sales process (e.g., full auction,
partial auction, no auction) can also affect shareholder value.
•Conflicts
of interest
- Are insiders benefiting from the transaction disproportionately and
inappropriately as compared to non-insider shareholders? As the result of
potential conflicts, the directors and officers of the company may be more
likely to vote to approve a merger than if they did not hold these interests.
Consider whether these interests may have influenced these directors and
officers to support or recommend the merger.
•Governance
- Will the combined company have a better or worse governance profile than the
current governance profiles of the respective parties to the transaction? If the
governance profile is to change for the worse, the burden is on the company to
prove that other issues (such as valuation) outweigh any deterioration in
governance.
Private
Placements/Warrants/Convertible Debentures
Vote
CASE-BY-CASE on proposals regarding private placements, warrants, and
convertible debentures taking into consideration:
•Dilution
to existing shareholders' position: The amount and timing of shareholder
ownership dilution should be weighed against the needs and proposed shareholder
benefits of the capital infusion. Although newly issued common stock, absent
preemptive rights, is typically dilutive to existing shareholders, share price
appreciation is often the necessary event to trigger the exercise of "out of the
money" warrants and convertible debt. In these instances from a value
standpoint, the negative impact of dilution is mitigated by the increase in the
company's stock price that must occur to trigger the dilutive
event.
•Terms
of the offer (discount/premium in purchase price to investor, including any
fairness opinion, conversion features, termination penalties, exit strategy):
•The
terms of the offer should be weighed against the alternatives of the company and
in light of company's financial condition. Ideally, the conversion price for
convertible debt and the exercise price for warrants should be at a premium to
the then prevailing stock price at the time of private placement.
•When
evaluating the magnitude of a private placement discount or premium, consider
factors that influence the discount or premium, such as, liquidity, due
diligence costs, control and monitoring costs, capital scarcity, information
asymmetry and anticipation of future performance.
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•Financial
issues:
•The
company's financial condition;
•Degree
of need for capital;
•Use
of proceeds;
•Effect
of the financing on the company's cost of capital;
•Current
and proposed cash burn rate;
•Going
concern viability and the state of the capital and credit markets.
•Management's
efforts to pursue alternatives and whether the company engaged in a process to
evaluate alternatives: A fair, unconstrained process helps to ensure the best
price for shareholders. Financing alternatives can include joint ventures,
partnership, merger or sale of part or all of the company.
•
Control issues:
•Change
in management;
•Change
in control;
•Guaranteed
board and committee seats;
•Standstill
provisions;
•Voting
agreements;
•Veto
power over certain corporate actions; and
•Minority
versus majority ownership and corresponding minority discount or majority
control premium
•Conflicts
of interest:
•Conflicts
of interest should be viewed from the perspective of the company and the
investor.
•Were
the terms of the transaction negotiated at arm's length? Are managerial
incentives aligned with shareholder interests?
•Market
reaction:
•The
market's response to the proposed deal. A negative market reaction is a cause
for concern. Market reaction may be addressed by analyzing the one day impact on
the unaffected stock price.
Vote
FOR
the private placement, or FOR the issuance of warrants and/or convertible
debentures in a private placement, if it is expected that the company will file
for bankruptcy if the transaction is not approved.
Reorganization/Restructuring
Plan (Bankruptcy)
Vote
CASE-BY-CASE on proposals to common shareholders on bankruptcy plans of
reorganization, considering the following factors including, but not limited
to:
•Estimated
value and financial prospects of the reorganized company;
•Percentage
ownership of current shareholders in the reorganized company;
•Whether
shareholders are adequately represented in the reorganization process
(particularly through the existence of an Official Equity
Committee);
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•The
cause(s) of the bankruptcy filing, and the extent to which the plan of
reorganization addresses the cause(s);
•Existence
of a superior alternative to the plan of reorganization; and
•Governance
of the reorganized company.
Special
Purpose Acquisition Corporations (SPACs)
Vote
CASE-BY-CASE on SPAC mergers and acquisitions taking into account the
following:
•Valuation
– Is the value being paid by the SPAC reasonable? SPACs generally lack an
independent fairness opinion and the financials on the target may be limited.
Compare the conversion price with the intrinsic value of the target company
provided in the fairness opinion. Also, evaluate the proportionate value of the
combined entity attributable to the SPAC IPO shareholders versus the pre-merger
value of SPAC. Additionally, a private company discount may be applied to the
target, if it is a private entity.
•Market
reaction – How has the market responded to the proposed deal? A negative market
reaction may be a cause for concern. Market reaction may be addressed by
analyzing the one-day impact on the unaffected stock price.
•Deal
timing – A main driver for most transactions is that the SPAC charter typically
requires the deal to be complete within 18 to 24 months, or the SPAC is to be
liquidated. Evaluate the valuation, market reaction, and potential conflicts of
interest for deals that are announced close to the liquidation date.
•Negotiations
and process – What was the process undertaken to identify potential target
companies within specified industry or location specified in charter? Consider
the background of the sponsors.
•Conflicts
of interest – How are sponsors benefiting from the transaction compared to IPO
shareholders? Potential conflicts could arise if a fairness opinion is issued by
the insiders to qualify the deal rather than a third party or if management is
encouraged to pay a higher price for the target because of an 80% rule (the
charter requires that the fair market value of the target is at least equal to
80% of net assets of the SPAC). Also, there may be sense of urgency by the
management team of the SPAC to close the deal since its charter typically
requires a transaction to be completed within the 18-24 month
timeframe.
•Voting
agreements – Are the sponsors entering into enter into any voting agreements/
tender offers with shareholders who are likely to vote AGAINST the proposed
merger or exercise conversion rights?
•Governance
– What is the impact of having the SPAC CEO or founder on key committees
following the proposed merger?
Special
Purpose Acquisition Corporations (SPACs) – Proposals for Extensions
Vote
case-by-case on SPAC extension proposals taking into account the length of the
requested extension, the status of any pending transaction(s) or progression of
the acquisition process, any added incentive for non-redeeming shareholders, and
any prior extension requests.
•Length
of request: Typically, extension requests range from two to six months,
depending on the progression of the SPAC's acquistion process.
•Pending
transaction(s) or progression of the acquisition process: Sometimes an intial
business combination was already put to a shareholder vote, but, for varying
reasons, the transaction could not be consummated by the termination date and
the SPAC is requesting an extension. Other times, the SPAC has entered into a
definitive transaction agreement, but needs additional time to consummate or
hold the shareholder meeting.
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•Added
incentive for non-redeeming shareholders: Sometimes the SPAC sponsor (or other
insiders) will contribute, typically as a loan to the company, additional funds
that will be added to the redemption value of each public share as long as such
shares are not redeemed in connection with the extension request. The purpose of
the "equity kicker" is to incentivize shareholders to hold their shares through
the end of the requested extension or until the time the transaction is put to a
shareholder vote, rather than electing redeemption at the extension proposal
meeting.
•Prior
extension requests: Some SPACs request additional time beyond the extension
period sought in prior extension requests.
Spin-offs
Vote
CASE-BY-CASE on spin-offs, considering:
•Tax
and regulatory advantages;
•Planned
use of the sale proceeds;
•Valuation
of spinoff;
•Fairness
opinion;
•Benefits
to the parent company;
•Conflicts
of interest;
•Managerial
incentives;
•Corporate
governance changes;
•Changes
in the capital structure.
Value
Maximization Shareholder Proposals
Vote
CASE-BY-CASE on shareholder proposals seeking to maximize shareholder value
by:
•Hiring
a financial advisor to explore strategic alternatives;
•Selling
the company; or
•Liquidating
the company and distributing the proceeds to shareholders.
These
proposals should be evaluated based on the following factors:
•Prolonged
poor performance with no turnaround in sight;
•Signs
of entrenched board and management (such as the adoption of takeover
defenses);
•Strategic
plan in place for improving value;
•Likelihood
of receiving reasonable value in a sale or dissolution; and
•The
company actively exploring its strategic options, including retaining a
financial advisor.
COMPENSATION
Executive
Pay Evaluation
Executive
pay remains a perennial hot button issue for shareholders, who want assurance
that top management’s compensation is primarily performance-based, fair, and
reasonable. Any evaluation of executive pay must recognize two underlying
forces: an executive labor market, where executive pay packages result from
negotiations in a war for talent, and an agency problem, where boards and
shareholders try to align pay incentives with shareholder value
creation.
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Underlying
all evaluations are five global principles that most investors expect
corporations to adhere to in designing and administering executive and director
compensation programs:
1.Maintain
appropriate pay-for-performance alignment, with emphasis on long-term
shareholder value: This principle encompasses overall executive pay practices,
which must be designed to attract, retain, and appropriately motivate the key
employees who drive shareholder value creation over the long term. It will take
into consideration, among other factors, the link between pay and performance;
the mix between fixed and variable pay; performance goals; and equity-based plan
costs;
2.Avoid
arrangements that risk “pay for failure”: This principle addresses the
appropriateness of long or indefinite contracts, excessive severance packages,
and guaranteed compensation;
3.Maintain
an independent and effective compensation committee: This principle promotes
oversight of executive pay programs by directors with appropriate skills,
knowledge, experience, and a sound process for compensation decision-making
(e.g., including access to independent expertise and advice when
needed);
4.Provide
shareholders with clear, comprehensive compensation disclosures: This principle
underscores the importance of informative and timely disclosures that enable
shareholders to evaluate executive pay practices fully and fairly;
5.Avoid
inappropriate pay to non-executive directors: This principle recognizes the
interests of shareholders in ensuring that compensation to outside directors
does not compromise their independence and ability to make appropriate judgments
in overseeing managers’ pay and performance. At the market level, it may
incorporate a variety of generally accepted best practices.
Advisory
Votes on Executive Compensation- Management Proposals (Management
Say-on-Pay)
Evaluate
executive pay and practices, as well as certain aspects of outside director
compensation CASE-BY-CASE.
Vote
AGAINST management say on pay (MSOP) proposals, AGAINST/WITHHOLD on compensation
committee members (or, in rare cases where the full board is deemed responsible,
all directors including the CEO), and/or AGAINST an equity-based incentive plan
proposal if:
•There
is a misalignment between CEO pay and company performance (pay for
performance)
•The
company maintains problematic pay practices
•The
board exhibits poor communication and responsiveness to
shareholders.
Voting
Alternatives
In
general, the management say on pay (MSOP) ballot item is the primary focus of
voting on executive pay practices-- dissatisfaction with compensation practices
can be expressed by voting against MSOP rather than withholding or voting
against the compensation committee. However, if there is no MSOP on the ballot,
then the negative vote will apply to members of the compensation committee. In
addition, in egregious cases, or if the board fails to respond to concerns
raised by a prior MSOP proposal, then vote withhold or against compensation
committee members (or, if the full board is deemed accountable, all directors).
If the negative factors involve equity-based compensation, then vote AGAINST an
equity-based plan proposal presented for shareholder approval.
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Additional
CASE-BY-CASE considerations for the management say on pay (MSOP)
proposals:
•Evaluation
of performance metrics in short-term and long-term plans, as discussed and
explained in the Compensation Discussion & Analysis (CD&A). Consider the
measures, goals, and target awards reported by the company for executives’
short- and long-term incentive awards: disclosure, explanation of their
alignment with the company’s business strategy, and whether goals appear to be
sufficiently challenging in relation to resulting payouts
•Evaluation
of peer group benchmarking used to set target pay or award opportunities.
Consider the rationale stated by the company for constituents in its pay
benchmarking peer group, as well as the benchmark targets it uses to set or
validate executives’ pay (e.g., median, 75th percentile, etc.,) to ascertain
whether the benchmarking process is sound or may result in pay “ratcheting” due
to inappropriate peer group constituents (e.g., much larger companies) or
targeting (e.g., above median)
•Balance
of performance-based versus non-performance-based pay. Consider the ratio of
performance-based (not including plain vanilla stock options) vs.
non-performance-based pay elements reported for the CEO’s latest reported fiscal
year compensation, especially in conjunction with concerns about other factors
such as performance metrics/goals, benchmarking practices, and
pay-for-performance disconnects.
Primary
Evaluation Factors for Executive Pay
Pay
for Performance
Evaluate
the alignment of the CEO’s pay with performance over time, focusing particularly
on companies that have underperformed their peers over a sustained period. From
a shareholders’ perspective, performance is predominantly gauged by the
company’s stock performance over time. Even when financial or operational
measures are utilized in incentive awards, the achievement related to these
measures should ultimately translate into superior shareholder returns in the
long-term.
Focus
on companies with sustained underperformance relative to peers, considering the
following key factors:
•Whether
a company’s one-year and three-year total shareholder returns (“TSR”) are in the
bottom half of its industry group (i.e., four-digit GICS – Global Industry
Classification Group)
•Whether
the total compensation of a CEO who has served at least two consecutive fiscal
years is aligned with the company’s total shareholder return over time,
including both recent and long-term periods
If
a company falls in the bottom half of its four-digit GICS, further analysis of
the CD&A is required to better understand the various pay elements and
whether they create or reinforce shareholder alignment. Also assess the CEO’s
pay relative to the company’s TSR over a time horizon of at least five years.
The most recent year-over-year increase or decrease in pay remains a key
consideration, but there will be additional emphasis on the long term trend of
CEO total compensation relative to shareholder return. Also consider the mix of
performance-based compensation relative to total compensation. In general,
standard stock options or time-vested restricted stock are not considered to be
performance-based. If a company provides performance-based incentives to its
executives, the company is highly encouraged to provide the complete disclosure
of the performance measure and goals (hurdle rate) so that shareholders can
assess the rigor of the performance program. The use of non-GAAP financial
metrics also makes it very challenging for shareholders to ascertain the rigor
of the program as shareholders often cannot tell the type of adjustments being
made and if the adjustments were made consistently. Complete and transparent
disclosure helps shareholders to better understand the company’s pay for
performance linkage.
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Problematic
Pay Practices
If
the company maintains problematic pay practices, generally vote:
•AGAINST
management "say on pay" (MSOP) proposals;
•AGAINST/WITHHOLD
on compensation committee members (or in rare cases where the full board is
deemed responsible, all directors including the CEO):
–In
egregious situations;
–
When no MSOP item is on the ballot; or
–
When the board has failed to respond to concerns raised in prior MSOP
evaluations; and/or
•AGAINST
an equity incentive plan proposal if excessive non-performance-based equity
awards are the major contributors to a pay-for-performance
misalignment.
The
focus is on executive compensation practices that contravene the global pay
principles, including:
•Problematic
practices related to non-performance-based compensation elements;
•Incentives
that may motivate excessive risk-taking; and
•Options
Backdating.
Problematic
Pay Practices related to Non-Performance-Based Compensation
Elements
Pay
elements that are not directly based on performance are generally evaluated
CASE-BY-CASE considering the context of a company's overall pay program and
demonstrated pay-for-performance philosophy. The list below highlights the
problematic practices that carry significant weight in this overall
consideration and may result in adverse vote recommendations:
•Repricing
or replacing of underwater stock options/SARS without prior shareholder approval
(including cash buyouts and voluntary surrender of underwater
options);
•Excessive
perquisites or tax gross-ups, including any gross-up related to a secular trust
or restricted stock vesting;
•New
or extended agreements that provide for:
–CIC
payments exceeding 3 times base salary and average/target/most recent bonus
–CIC
severance payments without involuntary job loss or substantial diminution of
duties ("single" or "modified single" triggers)
–CIC
payments with excise tax gross-ups (including "modified" gross-ups)
Insufficient
Executive Compensation Disclosure by Externally Managed Issuers
(EMIs)
For
externally-managed issuers (EMIs), generally vote against the say-on-pay
proposal when insufficient compensation disclosure precludes a reasonable
assessment of pay programs and practices applicable to the EMI's executives.
Incentives
that may Motivate Excessive Risk-Taking
Assess
company policies and disclosure related to compensation that could incentivize
excessive risk-taking, for example:
•Multi-year
guaranteed bonuses
•A
single performance metric used for short- and long-term plans
•Lucrative
severance packages
•High
pay opportunities relative to industry peers;
•Disproportionate
supplemental pensions
•Mega
annual equity grants that provide unlimited upside with no downside
risk
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Factors
that potentially mitigate the impact of risky incentives include rigorous
claw-back provisions and robust stock ownership/holding guidelines.
Options
Backdating
Vote
CASE-BY-CASE on options backdating issues. Generally, when a company has
recently
practiced options backdating, WITHHOLD from or vote AGAINST the compensation
committee, depending on the severity of the practices and the subsequent
corrective actions on the part of the board. When deciding on votes on
compensation committee members who oversaw questionable options grant practices
or current compensation committee members who fail to respond to the issue
proactively, consider several factors, including, but not limited to, the
following:
•Reason
and motive for the options backdating issue, such as inadvertent vs. deliberate
grant date changes;
•Duration
of options backdating;
•Size
of restatement due to options backdating;
•Corrective
actions taken by the board or compensation committee, such as canceling or
re-pricing backdated options, the recouping of option gains on backdated grants;
and
•Adoption
of a grant policy that prohibits backdating, and creates a fixed grant schedule
or window period for equity grants in the future.
A
CASE-BY-CASE analysis approach allows distinctions to be made between companies
that had “sloppy” plan administration versus those that acted deliberately
and/or committed fraud, as well as those companies that subsequently took
corrective action. Cases where companies have committed fraud are considered
most egregious.
Board
Communications and Responsiveness
Consider
the following factors CASE-BY-CASE when evaluating ballot items related to
executive pay:
•Poor
disclosure practices, including:
–Unclear
explanation of how the CEO is involved in the pay setting process
–Retrospective
performance targets and methodology not discussed
–Methodology
for benchmarking practices and/or peer group not disclosed and
explained
•Board’s
responsiveness to investor input and engagement on compensation issues, for
example:
–Failure
to respond to majority-supported shareholder proposals on executive pay
topics
–Failure
to respond to concerns raised in connection with significant opposition to MSOP
proposals
Frequency
of Advisory Vote on Executive Compensation ("Say When on Pay")
Vote
FOR annual advisory votes on compensation, which provide the most consistent and
clear communication channel for shareholder concerns about companies' executive
pay programs.
Voting
on Golden Parachutes in an Acquisition, Merger, Consolidation, or Proposed Sale
Vote
CASE-BY-CASE on say on Golden Parachute proposals, including consideration of
existing change-in-control arrangements maintained with named executive officers
rather than focusing primarily on new or extended arrangements.
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Features
that may result in an AGAINST recommendation include one or more of the
following, depending on the number, magnitude, and/or timing of
issue(s):
•Single-
or modified-single-trigger cash severance
•Single-trigger
acceleration of unvested equity awards
•Excessive
cash severance (>3x base salary and bonus)
•Excise
tax gross-ups triggered and payable (as opposed to a provision to provide excise
tax gross-ups)
•Excessive
golden parachute payments (on an absolute basis or as a percentage of
transaction equity value)
•Recent
amendments that incorporate any problematic features (such as those above) or
recent actions (such as extraordinary equity grants) that may make packages so
attractive as to influence merger agreements that may not be in the best
interests of shareholders
•The
company's assertion that a proposed transaction is conditioned on shareholder
approval of the golden parachute advisory vote
Recent
amendment(s) that incorporate problematic features will tend to carry more
weight on the overall analysis. However, the presence of multiple legacy
problematic features will also be closely scrutinized.
In
cases where the golden parachute vote is incorporated into a company's advisory
vote on compensation (management say-on-pay), Victory Capital will evaluate the
say-on-pay proposal in accordance with these guidelines, which may give higher
weight to that component of the overall evaluation.
Equity-Based
and Other Incentive Plans
General
Recommendation: Vote
case-by-case on certain equity-based compensation plans depending on a
combination of certain plan features and equity grant practices, where positive
factors may counterbalance negative factors, and vice versa, as evaluated using
an "equity plan scorecard" (EPSC) approach with three pillars:
•Plan
Cost:
The total estimated cost of the company’s equity plans relative to
industry/market cap peers, measured by the company's estimated Shareholder Value
Transfer (SVT) in relation to peers and considering both:
–SVT
based on new shares requested plus shares remaining for future grants, plus
outstanding unvested/unexercised grants
–SVT
based only on new shares requested plus shares remaining for future
grants
•Plan
Features:
–Quality
of disclosure around vesting upon a change in control (CIC)
–Discretionary
vesting authority
–Liberal
share recycling on various award types
–Lack
of minimum vesting period for grants made under the plan
–Dividends
payable prior to award vesting
•Grant
Practices:
–The
company’s three year burn rate relative to its industry/market cap peers
–Vesting
requirements in most recent CEO equity grants (3-year look-back)
–The
estimated duration of the plan (based on the sum of shares remaining available
and the new shares requested, divided by the average annual shares granted in
the prior three years)
–The
proportion of the CEO's most recent equity grants/awards subject to performance
conditions
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–Whether
the company maintains a sufficient claw-back policy
–Whether
the company maintains suficient post exercise/vesting share-holding
requirements
Generally
vote against the plan proposal if the combination of above factors indicates
that the plan is not, overall, in shareholders' interests, or if any of the
following egregious factors (“overriding factors”) apply:
•Awards
may vest in connection with a liberal change-of-control definition
•The
plan would permit repricing or cash buyout of underwater options without
shareholder approval (either by expressly permitting it – for NYSE and Nasdaq
listed companies -- or by not prohibiting it when the company has a history of
repricing – for non-listed companies)
•The
plan is a vehicle for problematic pay practices or a significant
pay-for-performance disconnect under certain circumstances
•The
plan contains an evergreen (automatic share replenishment) feature,
or
•Any
other plan features are determined to have a significant negative impact on
shareholder interests
Plan
Cost
General
Recommendation: Generally
vote against equity plans if the cost is unreasonable. For non-employee director
plans, vote for the plan if certain factors are met (see Director Compensation
section).
Shareholder
Value Transfer (SVT)
The
cost of the equity plans is expressed as Shareholder Value Transfer (SVT), which
is measured using a binomial option pricing model that assesses the amount of
shareholders’ equity flowing out of the company to employees and directors. SVT
is expressed as both a dollar amount and as a percentage of market value, and
includes the new shares proposed, shares available under existing plans, and
shares granted but unexercised (using two measures, in the case of plans subject
to the Equity Plan Scorecard evaluation, as noted above). All award types are
valued. For omnibus plans, unless limitations are placed on the most expensive
types of awards (for example, full value awards), the assumption is made that
all awards to be granted will be the most expensive types. See discussion of
specific types of awards.
Except
for proposals subject to Equity Plan Scorecard evaluation, Shareholder Value
Transfer is reasonable if it falls below a company-specific benchmark. The
benchmark is determined as follows: The top quartile performers in each industry
group (using the Global Industry Classification Standard: GICS) are identified.
Benchmark SVT levels for each industry are established based on these top
performers’ historic SVT. Regression analyses are run on each industry group to
identify the variables most strongly correlated to SVT. The benchmark industry
SVT level is then adjusted upwards or downwards for the specific company by
plugging the company-specific performance measures, size and cash compensation
into the industry cap equations to arrive at the company’s benchmark.
5
Grant
Practices
Three-Year
Burn Rate
Burn
rate benchmarks (utilized in Equity Plan Scorecard evaluations) are calculated
as the greater of: (1) the mean (μ) plus one standard deviation (σ) of the
company's GICS group segmented by S&P 500, Russell 3000 index (less the
S&P500) and non-Russell 3000 index; and (2) two percent of weighted common
shares outstanding. In addition, year-over-year burn-rate benchmark changes will
be limited to a maximum of two (2) percentage points plus or minus the prior
year's burn-rate benchmark.
5
For plans evaluated under the Equity Plan Scorecard policy, the company's SVT
benchmark is considered along with other factors.
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Egregious
Factors
Liberal
Change in Control Definition
Generally
vote against equity plans if the plan has a liberal definition of change in
control and the equity awards could vest upon such liberal definition of
change-in-control, even though an actual change in control may not occur.
Examples of such a definition include, but are not limited to, announcement or
commencement of a tender offer, provisions for acceleration upon a “potential”
takeover, shareholder approval of a merger or other transactions, or similar
language.
Repricing
Provisions
Vote
against plans that expressly permit the repricing or exchange of underwater
stock options/stock appreciate rights (SARs) without prior shareholder approval.
"Repricing" includes the ability to do any of the following:
•Amend
the terms of outstanding options or SARs to reduce the exercise price of such
outstanding options or SARs
•Cancel
outstanding options or SARs in exchange for options or SARs with an exercise
price that is less than the exercise price of the original options or
SARs
Also,
vote against or withhold from members of the Compensation Committee who approved
and/or implemented a repricing or an option/SAR exchange program, by buying out
underwater options/SARs for stock, cash or other consideration or canceling
underwater options/SARs and regranting options/SARs with a lower exercise price,
without prior shareholder approval, even if such repricings are allowed in their
equity plan.
Vote
against plans if the company has a history of repricing without shareholder
approval, and the applicable listing standards would not preclude them from
doing so.
Problematic
Pay Practices or Significant Pay-for-Performance Disconnect
If
the equity plan on the ballot is a vehicle for
problematic pay practices,
vote against the plan.
If
a significant portion of the CEO’s misaligned pay is attributed to
non-performance-based equity awards, and there is an equity plan on the ballot
with the CEO as one of the participants, Victory vote against the equity plan.
Considerations in voting against the equity plan may include, but are not
limited to:
•Magnitude
of pay misalignment
•Contribution
of non–performance-based equity grants to overall pay
•The
proportion of equity awards granted in the last three fiscal years concentrated
at the named executive officer level
Specific
Treatment of Certain Award Types in Equity Plan Evaluations:
Dividend
Equivalent Rights
Options
that have Dividend Equivalent Rights (DERs) associated with them will have a
higher calculated award value than those without DERs under the binomial model,
based on the value of these dividend streams. The higher value will be applied
to new shares, shares available under existing plans, and shares awarded but not
exercised per the plan specifications. DERS transfer more shareholder equity to
employees and non-employee directors and this cost should be
captured.
Operating
Partnership (OP) units in Equity Plan analysis of Real Estate Investment Trusts
(REITs)
For
Real Estate Investment Trusts (REITS), include the common shares issuable upon
conversion of outstanding Operating Partnership (OP) units in the share count
for the purposes of determining: (1) market capitalization in the Shareholder
Value Transfer (SVT) analysis and (2) shares outstanding in the burn rate
analysis.
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Other
Compensation Plans
401(k)
Employee Benefit Plans
Vote
FOR proposals to implement a 401(k) savings plan for employees.
Employee
Stock Ownership Plans (ESOPs)
Vote
FOR proposals to implement an ESOP or increase authorized shares for existing
ESOPs, unless the number of shares allocated to the ESOP is excessive (more than
five percent of outstanding shares).
Employee
Stock Purchase Plans-- Qualified Plans
Vote
CASE-BY-CASE on qualified employee stock purchase plans. Vote FOR employee stock
purchase plans where all of the following apply:
•Purchase
price is at least 85 percent of fair market value
•Offering
period is 27 months or less
•The
number of shares allocated to the plan is ten percent or less of the outstanding
shares
Vote
AGAINST qualified employee stock purchase plans where any of the following
apply:
•Purchase
price is less than 85 percent of fair market value
•Offering
period is greater than 27 months
•The
number of shares allocated to the plan is more than ten percent of the
outstanding shares
Employee
Stock Purchase Plans-- Non-Qualified Plans
Vote
CASE-BY-CASE on nonqualified employee stock purchase plans. Vote FOR
nonqualified employee stock purchase plans with all the following
features:
•Broad-based
participation (i.e., all employees of the company with the exclusion of
individuals with 5 percent or more of beneficial ownership of the
company)
•Limits
on employee contribution, which may be a fixed dollar amount or expressed as a
percent of base salary
•Company
matching contribution up to 25 percent of employee’s contribution, which is
effectively a discount of 20 percent from market value
•No
discount on the stock price on the date of purchase since there is a company
matching contribution
Vote
AGAINST nonqualified employee stock purchase plans when any of the plan features
do not meet the above criteria. If the company matching contribution exceeds 25
percent of employee’s contribution, evaluate the cost of the plan against its
allowable cap.
Incentive
Bonus Plans and Tax Deductibility Proposals (OBRA-Related Compensation
Proposals)
Vote
FOR proposals that simply amend shareholder-approved compensation plans to
include administrative features or place a cap on the annual grants any one
participant may receive to comply with the provisions of Section 162(m) of the
Internal Revenue Code.
Vote
FOR proposals to add performance goals to existing compensation plans to comply
with the provisions of Section 162(m) unless they are clearly inappropriate.
Votes
to amend existing plans to increase shares reserved and to qualify for favorable
tax treatment under the provisions of Section 162(m) are considered
CASE-BY-CASE.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Generally
vote FOR cash or cash and stock bonus plans that are submitted to shareholders
for the purpose of exempting compensation from taxes under the provisions of
Section 162(m) if no increase in shares is requested.
Vote
AGAINST proposals if the compensation committee does not fully consist of
independent outsiders, or if the plan contains excessive problematic
provisions.
Option
Exchange Programs/Repricing Options
Vote
AGAINST proposals seeking the authority to reprice options.
Vote
AGAINST proposals seeking to approve an option exchange program.
Stock
Plans in Lieu of Cash
Vote
CASE-BY-CASE on plans that provide participants with the option of taking all or
a portion of their cash compensation in the form of stock.
Vote
FOR non-employee director-only equity plans that provide a dollar-for-dollar
cash-for-stock exchange.
Vote
CASE-BY-CASE on plans which do not provide a dollar-for-dollar cash for stock
exchange. In cases where the exchange is not dollar-for-dollar, the request for
new or additional shares for such equity program will be considered using the
binomial option pricing model. In an effort to capture the total cost of total
compensation, Victory will not make any adjustments to carve out the in-lieu-of
cash compensation.
Shareholder
Ratification of Director Pay Programs
Vote
case-by-case on management proposals seeking ratification of non-employee
director compensation, based on the following factors:
•If
the equity plan under which non-employee director grants are made is on the
ballot, whether or not it warrants support; and
•An
assessment of the following qualitative factors:
–The
relative magnitude of director compensation as compared to companies of a
similar profile
–The
presence of problematic pay practices relating to director compensation
–Director
stock ownership guidelines and holding requirements
–Equity
award vesting schedules
–The
mix of cash and equity-based compensation
–Meaningful
limits on director compensation
–The
availability of retirement benefits or perquisites
–The
quality of disclosure surrounding director compensation
Transfer
Stock Option (TSO) Programs
One-time
Transfers: Vote AGAINST or WITHHOLD from compensation committee members if they
fail to submit one-time transfers to shareholders for approval.
Vote
CASE-BY-CASE on one-time transfers. Vote FOR if:
•Executive
officers and non-employee directors are excluded from participating
•Stock
options are purchased by third-party financial institutions at a discount to
their fair value using option pricing models such as Black-Scholes or a Binomial
Option Valuation or other appropriate financial models
•There
is a two-year minimum holding period for sale proceeds (cash or stock) for all
participants
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Additionally,
management should provide a clear explanation of why options are being
transferred to a third-party institution and whether the events leading up to a
decline in stock price were beyond management's control. A review of the
company's historic stock price volatility should indicate if the options are
likely to be back “in-the-money” over the near term.
Ongoing
TSO program: Vote AGAINST equity plan proposals if the details of ongoing TSO
programs are not provided to shareholders. Since TSOs will be one of the award
types under a stock plan, the ongoing TSO program, structure and mechanics must
be disclosed to shareholders. The specific criteria to be considered in
evaluating these proposals include, but not limited, to the following:
•Eligibility
•Vesting
•Bid-price
•Term
of options
•Cost
of the program and impact of the TSOs on company’s total option
expense
•Option
repricing policy
Amendments
to existing plans that allow for introduction of transferability of stock
options should make clear that only options granted post-amendment shall be
transferable.
Director
Compensation
Equity
Plans for Non-Employee Directors
Vote
CASE-BY-CASE on compensation plans for non-employee directors, based on the
following factors:
•The
total estimated cost of the company’s equity plans relative to industry/market
cap peers, measured by the company’s estimated Shareholder Value Transfer (SVT)
based on new shares requested plus shares remaining for future grants, plus
outstanding unvested/unexercised grants
•The
company’s three-year burn rate relative to its industry/market cap
peers
•The
presence of any egregious plan features (such as an option repricing provision
or liberal CIC vesting risk).
On
occasion, director stock plans will exceed the plan cost or burn rate benchmarks
when combined with employee or executive stock plans. In such cases, vote
case-by-case on the plan taking into consideration the following qualitative
factors:
•The
relative magnitude of director compensation as compared to companies of a
similar profile
•The
presence of problematic pay practices relating to director
compensation
•Director
stock ownership guidelines and holding requirements
•Equity
award vesting schedules
•The
mix of cash and equity-based compensation
•Meaningful
limits on director compensation
•The
availability of retirement benefits or perquisites
•The
quality of disclosure surrounding director compensation
Director
Retirement Plans
Vote
AGAINST retirement plans for non-employee directors.
Vote
FOR shareholder proposals to eliminate retirement plans for non-employee
directors.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Shareholder
Proposals on Compensation
Advisory
Vote on Executive Compensation (Say-on-Pay)
Generally,
vote FOR shareholder proposals that call for non-binding shareholder
ratification of the compensation of the Named Executive Officers and the
accompanying narrative disclosure of material factors provided to understand the
Summary Compensation Table.
Adopt
Anti-Hedging/Pledging/Speculative Investments Policy
Generally
vote FOR proposals seeking a policy that prohibits named executive officers from
engaging in derivative or speculative transactions involving company stock,
including hedging, holding stock in a margin account, or pledging stock as
collateral for a loan. However, the company’s existing policies regarding
responsible use of company stock will be considered.
Bonus
Banking/Bonus Banking “Plus”
Vote
CASE-BY-CASE on proposals seeking deferral of a portion of annual bonus pay,
with ultimate payout linked to sustained results for the performance metrics on
which the bonus was earned (whether for the named executive officers or a wider
group of employees), taking into account the following factors:
•The
company’s past practices regarding equity and cash compensation;
•Whether
the company has a holding period or stock ownership requirements in place, such
as a meaningful retention ratio (at least 50 percent for full tenure);
and
•Whether
the company has a rigorous claw-back policy in place.
Compensation
Consultants- Disclosure of Board or Company’s Utilization
Generally
vote FOR shareholder proposals seeking disclosure regarding the Company, Board,
or Compensation Committee’s use of compensation consultants, such as company
name, business relationship(s) and fees paid.
Disclosure/Setting
Levels or Types of Compensation for Executives and Directors
Generally,
vote FOR shareholder proposals seeking additional disclosure of executive and
director pay information, provided the information requested is relevant to
shareholders' needs, would not put the company at a competitive disadvantage
relative to its industry, and is not unduly burdensome to the
company.
Vote
AGAINST shareholder proposals seeking to set absolute levels on compensation or
otherwise dictate the amount or form of compensation.
Vote
AGAINST shareholder proposals seeking to eliminate stock options or any other
equity grants to employees or directors.
Vote
AGAINST shareholder proposals requiring director fees be paid in stock
only.
Generally
vote AGAINST shareholder proposals that mandate a minimum amount of stock that
directors must own in order to qualify as a director or to remain on the
board.
Vote
CASE-BY-CASE on all other shareholder proposals regarding executive and director
pay, taking into account company performance, pay level versus peers, pay level
versus industry, and long-term corporate outlook.
Golden
Coffins/Executive Death Benefits
Generally
vote FOR proposals calling companies to adopt a policy of obtaining shareholder
approval for any future agreements and corporate policies that could oblige the
company to make payments or awards following the death of a senior executive in
the form of unearned salary or bonuses, accelerated vesting or the continuation
in force of unvested equity grants, perquisites and other payments or awards
made in lieu of compensation. This would not apply to any benefit programs or
equity plan proposals that the broad-based employee population is eligible.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Hold
Equity Past Retirement or for a Significant Period of Time
Vote
CASE-BY-CASE on shareholder proposals asking companies to adopt policies
requiring senior executive officers to retain all or a significant portion of
the shares acquired through compensation plans, either:
•while
employed and/or for two years following the termination of their employment
•for
a substantial period following the lapse of all other vesting requirements for
the award (“lock-up period”), with ratable release of a portion of the shares
annually during the lock-up period
The
following factors will be taken into account:
•Whether
the company has any holding period, retention ratio, or officer ownership
requirements in place. These should consist of:
–Rigorous
stock ownership guidelines
–A
holding period requirement coupled with a significant long-term ownership
requirement
–A
meaningful retention ratio
•Actual
officer stock ownership and the degree to which it meets or exceeds the
proponent’s suggested holding period/retention ratio or the company’s own stock
ownership or retention requirements;
•Post-termination
holding requirement policies or any policies aimed at mitigating risk taking by
senior executives;
•Problematic
pay practices, current and past, which may promote a short-term versus a
long-term focus.
A
rigorous stock ownership guideline should be at least 10x base salary for the
CEO, with the multiple declining for other executives. A meaningful retention
ratio should constitute at least 50 percent of the stock received from equity
awards (on a net proceeds basis) held on a long-term basis, such as the
executive’s tenure with the company or even a few years past the executive’s
termination with the company.
Vote
CASE-BY-CASE on shareholder proposals asking companies to adopt policies
requiring Named Executive Officers to retain 75% of the shares acquired through
compensation plans while employed and/or for two years following the termination
of their employment, and to report to shareholders regarding this policy. The
following factors will be taken into account:
•Whether
the company has any holding period, retention ratio, or officer ownership
requirements in place. These should consist of:
–Rigorous
stock ownership guidelines
–A
holding period requirement coupled with a significant long-term ownership
requirement
–A
meaningful retention ratio
•Actual
officer stock ownership and the degree to which it meets or exceeds the
proponent’s suggested holding period/retention ratio or the company’s own stock
ownership or retention requirements.
•Problematic
pay practices, current and past, which may promote a short-term versus a
long-term focus.
A
rigorous stock ownership guideline should be at least 10x base salary for the
CEO, with the multiple declining for other executives. A meaningful retention
ratio should constitute at least 50 percent of the stock received from equity
awards (on a net proceeds basis) held on a long-term basis, such as the
executive’s tenure with the company or even a few years past the executive’s
termination with the company.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Generally
vote AGAINST shareholder proposals that mandate a minimum amount of stock that
directors must own in order to qualify as a director or to remain on the board.
While Victory favors stock ownership on the part of directors, the company
should determine the appropriate ownership requirement.
Non-Deductible
Compensation
Generally
vote FOR proposals seeking disclosure of the extent to which the company paid
non-deductible compensation to senior executives due to Internal Revenue Code
Section 162(m), while considering the company’s existing disclosure
practices.
Pay
for Performance
Performance-Based
Awards
Vote
CASE-BY-CASE on shareholder proposal requesting that a significant amount of
future long-term incentive compensation awarded to senior executives shall be
performance-based and requesting that the board adopt and disclose challenging
performance metrics to shareholders, based on the following analytical
steps:
•First,
vote FOR shareholder proposals advocating the use of performance-based equity
awards, such as performance contingent options or restricted stock, indexed
options or premium-priced options, unless the proposal is overly restrictive or
if the company has demonstrated that it is using a “substantial” portion of
performance-based awards for its top executives. Standard stock options and
performance-accelerated awards do not meet the criteria to be considered as
performance-based awards. Further, premium-priced options should have a premium
of at least 25 percent and higher to be considered performance-based awards.
•Second,
assess the rigor of the company’s performance-based equity program. If the bar
set for the performance-based program is too low based on the company’s
historical or peer group comparison, generally vote FOR the proposal.
Furthermore, if target performance results in an above target payout, vote FOR
the shareholder proposal due to program’s poor design. If the company does not
disclose the performance metric of the performance-based equity program, vote
FOR the shareholder proposal regardless of the outcome of the first step to the
test.
In
general, vote FOR the shareholder proposal if the company does not meet both of
the above two steps.
Pay
for Superior Performance
Generally
vote AGAINST, if a majority of pay is already linked to performance than
proposal is redundant.
Pre-Arranged
Trading Plans (10b5-1 Plans)
Generally
vote FOR shareholder proposals calling for certain principles regarding the use
of prearranged trading plans (10b5-1 plans) for executives. These principles
include:
•Adoption,
amendment, or termination of a 10b5-1 Plan must be disclosed within two business
days in a Form 8-K
•Amendment
or early termination of a 10b5-1 Plan is allowed only under extraordinary
circumstances, as determined by the board
•Ninety
days must elapse between adoption or amendment of a 10b5-1 Plan and initial
trading under the plan
•Reports
on Form 4 must identify transactions made pursuant to a 10b5-1 Plan
•An
executive may not trade in company stock outside the 10b5-1 Plan
•Trades
under a 10b5-1 Plan must be handled by a broker who does not handle other
securities transactions for the executive
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Prohibit
CEOs from serving on Compensation Committees
Generally
vote AGAINST proposals seeking a policy to prohibit any outside CEO from serving
on a company’s compensation committee, unless the company has demonstrated
problematic pay practices that raise concerns about the performance and
composition of the committee.
Recoup
Bonuses
Vote
CASE-BY-CASE on proposals to recoup unearned incentive bonuses or other
incentive payments made to senior executives if it is later determined that the
figures upon which incentive compensation is earned later turn out to have been
in error. This is line with the clawback provision in the Trouble Asset Relief
Program. Many companies have adopted policies that permit recoupment in cases
where fraud, misconduct, or negligence significantly contributed to a
restatement of financial results that led to the awarding of unearned incentive
compensation. Victory will take into consideration:
•If
the company has adopted a formal recoupment bonus policy
•If
the company has chronic restatement history or material financial
problems
•If
the company’s policy substantially addresses the concerns raised by the
proponent
Severance
Agreements for Executives/Golden Parachutes
Vote
FOR shareholder proposals requiring that golden parachutes or executive
severance agreements be submitted for shareholder ratification, unless the
proposal requires shareholder approval prior
to entering into employment contracts.
Vote
CASE-BY-CASE on proposals to ratify or cancel golden parachutes. An acceptable
parachute should include, but is not limited to, the following:
•The
triggering mechanism should be beyond the control of management
•The
amount should not exceed three times base amount (defined as the average annual
taxable W-2 compensation during the five years prior to the year in which the
change of control occurs
•Change-in-control
payments should be double-triggered, i.e., (1) after a change in control has
taken place, and (2) termination of the executive as a result of the change in
control. Change in control is defined as a change in the company ownership
structure.
Share
Buyback Holding Periods
Generally
vote AGAINST shareholder proposals prohibiting executives from selling shares of
company stock during periods in which the company has announced that it may or
will be repurchasing shares of its stock. Vote FOR the proposal when there is a
pattern of abuse by executives exercising options or selling shares during
periods of share buybacks.
Stock
Retention/Holding Period
Vote
AGAINST shareholder proposals asking companies to adopt holding periods or
retention ratios for their executives.
Supplemental
Executive Retirement Plans (SERPs)
Generally
vote FOR shareholder proposals requesting to put extraordinary benefits
contained in SERP agreements to a shareholder vote unless the company’s
executive pension plans do not contain excessive benefits beyond what is offered
under employee-wide plans.
Generally
vote FOR shareholder proposals requesting to limit the executive benefits
provided under the company’s supplemental executive retirement plan (SERP) by
limiting covered compensation to a senior executive’s annual salary and
excluding of all incentive or bonus pay from the plan’s definition of covered
compensation used to establish such benefits.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Tax
Gross-Up Proposals
Generally
vote FOR proposals calling for companies to adopt a policy of not providing tax
gross-up payments to executives, except in situations where gross-ups are
provided pursuant to a plan, policy, or arrangement applicable to management
employees of the company, such as a relocation or expatriate tax equalization
policy.
Termination
of Employment Prior to Severance Payment and Eliminating Accelerated Vesting of
Unvested Equity
Vote
CASE-BY-CASE on shareholder proposals seeking a policy requiring termination of
employment prior to severance payment, and eliminating accelerated vesting of
unvested equity. Change-in-control payouts without loss of job or substantial
diminution of job duties (single-triggered) are consider a poor pay practice
under Victory policy, and may even result in withheld votes from compensation
committee members. The second component of this proposal –- related to the
elimination of accelerated vesting – requires more careful consideration. The
following factors will be taken into regarding this policy.
•The
company’s current treatment of equity in change-of-control situations (i.e. is
it double triggered, does it allow for the assumption of equity by acquiring
company, the treatment of performance shares.
•Current
employment agreements, including potential poor pay practices such as gross-ups
embedded in those agreements.
Generally
vote FOR proposals seeking a policy that prohibits acceleration of the vesting
of equity awards to senior executives in the event of a change in control
(except for pro rata vesting considering the time elapsed and attainment of any
related performance goals between the award date and the change in
control).
Social/Environmental
Issues
Overall
Approach
When
evaluating social and environmental shareholder proposals, Victory considers the
following factors:
•Whether
adoption of the proposal is likely to enhance or protect shareholder
value
•Whether
the information requested concerns business issues that relate to a meaningful
percentage of the company's business as measured by sales, assets, and
earnings
•The
degree to which the company's stated position on the issues raised in the
proposal could affect its reputation or sales, or leave it vulnerable to a
boycott or selective purchasing
•Whether
the issues presented are more appropriately/effectively dealt with through
governmental or company-specific action
•Whether
the company has already responded in some appropriate manner to the request
embodied in the proposal
•Whether
the company's analysis and voting recommendation to shareholders are
persuasive
•What
other companies have done in response to the issue addressed in the
proposal
•Whether
the proposal itself is well framed and the cost of preparing the report is
reasonable
•Whether
implementation of the proposal’s request would achieve the proposal’s
objectives
•Whether
the subject of the proposal is best left to the discretion of the
board
•Whether
the requested information is available to shareholders either from the company
or from a publicly available source
•Whether
providing this information would reveal proprietary or confidential information
that would place the company at a competitive disadvantage
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Diversity
Board
Diversity
Generally
vote AGAINST requests for reports on the company's efforts to diversify the
board, if the company has a Board & Nominating Committee that has a practice
of selecting candidates based on knowledge, experience, and skills regardless of
gender or race.
For
companies in the Russell 3000 or S&P 1500 indices, generally vote against or
withhold from the chair of the nominating committee (or other directors on a
case-by-case basis) at companies where there are no women on the company's
board. Mitigating factors include:
a.Until
Feb. 1, 2021, a firm commitment, as stated in the proxy statement, to appoint at
least one woman to the board within a year;
b.The
presence of a woman on the board at the preceding annual meeting and a firm
commitment to appoint at least one woman to the board within a year;
or
c.Other
relevant factors as applicable.
Equality
of Opportunity
Generally
vote AGAINST 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, if the company
already has a policy in place.
Political
Contributions
Generally
vote for proposals requesting greater disclosure of a company's political
contributions and trade association spending policies and activities,
considering:
•The
company's policies, and management and board oversight related to its direct
political contributions and payments to trade associations or other groups that
may be used for political purposes
•The
company's disclosure regarding its support of, and participation in, trade
associations or other groups that may make political contributions
•Recent
significant controversies, fines, or litigation related to the company's
political contributions or political activities
Generally
vote against proposals asking a company to affirm political nonpartisanship in
the workplace, so long as:
•There
are no recent, significant controversies, fines, or litigation regarding the
company’s political contributions or trade association spending
•The
company has procedures in place to ensure that employee contributions to
company-sponsored political action committees (PACs) are strictly voluntary and
prohibit coercion.
Vote
against proposals asking for a list of company executives, directors,
consultants, legal counsels, lobbyists, or investment bankers that have prior
government service and whether such service had a bearing on the business of the
company. Such a list would be burdensome to prepare without providing any
meaningful information to shareholders
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Lobbying
Vote
case-by-case on proposals requesting information on a company’s lobbying
(including direct, indirect, and grassroots lobbying) activities, policies, or
procedures, considering:
•The
company’s current disclosure of relevant lobbying policies, and management and
board oversight
•The
company’s disclosure regarding trade associations or other groups that it
supports, or is a member of, that engage in lobbying activities
•Recent
significant controversies, fines, or litigation regarding the company’s
lobbying-related activities
General
Sustainability Reporting Proposals
Generally
vote FOR proposals requesting the company to report on its policies,
initiatives, and oversight mechanisms related to social, economic, and
environmental sustainability, unless:
•The
company already discloses similar information through existing reports or
policies such as an Environment, Health, and Safety (EHS) report; a
comprehensive Code of Corporate Conduct; and/or a Diversity Report
•The
company has formally committed to the implementation of a reporting program
based on Global Reporting Initiative (GRI) guidelines or a similar standard
within a specified time frame
Climate
Change/ Greenhouse Gas (GHG) Emissions
Generally
vote FOR resolutions requesting that a company disclose information on the
impact of climate change on the company’s operations and investments
considering:
•The
company already provides current, publicly-available information on the impacts
that climate change may have on the company as well as associated company
policies and procedures to address related risks and/or
opportunities
•The
company’s level of disclosure is at least comparable to that of industry
peers
•There
are no significant, controversies, fines, penalties, or litigation associated
with the company’s environmental performance
Generally
vote FOR proposals requesting a report on greenhouse gas (GHG) emissions from
company operations and/or products and operations, unless:
•The
company already provides current, publicly-available information on the impacts
that GHG emissions may have on the company as well as associated company
policies and procedures to address related risks and/or opportunities
•The
company's level of disclosure is comparable to that of industry peers
•There
are no significant, controversies, fines, penalties, or litigation associated
with the company's GHG emissions
Proposals
that call for the adoption of GHG reduction goals from products and operations
shall be evaluated based on the long-term economic interests of the advisory
clients, taking into account:
•Overly
prescriptive requests for the reduction in GHG emissions by specific amounts or
within a specific time frame
•Whether
company disclosure lags behind industry peers
•Whether
the company has been the subject of recent, significant violations, fines,
litigation, or controversy related to GHG emissions
•The
feasibility of reduction of GHGs given the company’s product line and current
technology
•Whether
the company already provides meaningful disclosure on GHG emissions from its
products and operations
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Human
Rights Risk Assessment
Vote
case-by-case on 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, considering:
•The
degree to which existing relevant policies and practices are disclosed,
including information on the implementation of these policies and any related
oversight mechanisms
•The
company’s industry and whether the company or its suppliers operate in countries
or areas where there is a history of human rights concerns
•Recent,
significant controversies, fines, or litigation regarding human rights involving
the company or its suppliers, and whether the company has taken remedial steps
•Whether
the proposal is unduly burdensome or overly prescriptive
Gender
Pay Gaps
Generally
vote case-by-case on requests for reports on a company's pay data by gender,
race or ethnicity or a report on a company’s policies and goals to reduce any
gender, race or ethnicity pay gap, taking into account:
•The
company's current policies and disclosure related to both its diversity and
inclusion policies and practices and its compensation philosophy and fair and
equitable compensation practices
•Whether
the company has been the subject of recent controversy, litigation, or
regulatory actions related to gender, race or ethnicity pay gap
issues
•Whether
the company's reporting regarding gender, race or ethnicity pay gap policies or
initiatives is lagging its peers
Mutual
Fund Proxies
Election
of Directors
Vote
CASE-BY-CASE on the election of directors and trustees, following the same
guidelines for uncontested directors for public company shareholder meetings.
However, mutual fund boards do not usually have compensation committees, so do
not withhold for the lack of this committee.
Converting
Closed-end Fund to Open-end Fund
Vote
CASE-BY-CASE on conversion proposals, considering the following factors:
•Past
performance as a closed-end fund
•Market
in which the fund invests
•Measures
taken by the board to address the discount
•Past
shareholder activism, board activity, and votes on related
proposals
Proxy
Contests
Vote
CASE-BY-CASE on proxy contests, considering the following factors:
•Past
performance relative to its peers
•Market
in which fund invests
•Measures
taken by the board to address the issues
•Past
shareholder activism, board activity, and votes on related
proposals
•Strategy
of the incumbents versus the dissidents
•Independence
of directors
•Experience
and skills of director candidates
•Governance
profile of the company
•Evidence
of management entrenchment
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Investment
Advisory Agreements
Vote
CASE-BY-CASE on investment advisory agreements, considering the following
factors:
•Proposed
and current fee schedules
•Fund
category/investment objective
•Performance
benchmarks
•Share
price performance as compared with peers
•Resulting
fees relative to peers
•Assignments
(where the advisor undergoes a change of control)
Approving
New Classes or Series of Shares
Vote
FOR the establishment of new classes or series of shares.
Preferred
Stock Proposals
Vote
CASE-BY-CASE on the authorization for or increase in preferred shares,
considering the following factors:
•Stated
specific financing purpose
•Possible
dilution for common shares
•Whether
the shares can be used for antitakeover purposes
1940
Act Policies
Vote
CASE-BY-CASE on policies under the Investment Advisor Act of 1940, considering
the following factors:
•Potential
competitiveness
•Regulatory
developments
•Current
and potential returns
•Current
and potential risk
Generally
vote FOR these amendments as long as the proposed changes do not fundamentally
alter the investment focus of the fund and do comply with the current SEC
interpretation.
Changing
a Fundamental Restriction to a Nonfundamental Restriction
Vote
CASE-BY-CASE on proposals to change a fundamental restriction to a
non-fundamental restriction, considering the following factors:
•The
fund's target investments
•The
reasons given by the fund for the change
•The
projected impact of the change on the portfolio
Change
Fundamental Investment Objective to Nonfundamental
Vote
AGAINST proposals to change a fund’s fundamental investment objective to
non-fundamental.
Name
Change Proposals
Vote
CASE-BY-CASE on name change proposals, considering the following factors:
•Political/economic
changes in the target market
•Consolidation
in the target market
•Current
asset composition
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Change
in Fund's Subclassification
Vote
CASE-BY-CASE on changes in a fund's sub-classification, considering the
following factors:
•Potential
competitiveness
•Current
and potential returns
•Risk
of concentration
•Consolidation
in target industry
Disposition
of Assets/Termination/Liquidation
Vote
CASE-BY-CASE on proposals to dispose of assets, to terminate or liquidate,
considering the following factors:
•Strategies
employed to salvage the company
•The
fund’s past performance
•The
terms of the liquidation
Changes
to the Charter Document
Vote
CASE-BY-CASE on changes to the charter document, considering the following
factors:
•The
degree of change implied by the proposal
•The
efficiencies that could result
•The
state of incorporation
•Regulatory
standards and implications
Vote
AGAINST any of the following changes:
•Removal
of shareholder approval requirement to reorganize or terminate the trust or any
of its series
•Removal
of shareholder approval requirement for amendments to the new declaration of
trust
•Removal
of shareholder approval requirement to amend the fund's management contract,
allowing the contract to be modified by the investment manager and the trust
management, as permitted by the 1940 Act
•Allow
the trustees to impose other fees in addition to sales charges on investment in
a fund, such as deferred sales charges and redemption fees that may be imposed
upon redemption of a fund's shares
•Removal
of shareholder approval requirement to engage in and terminate subadvisory
arrangements
•Removal
of shareholder approval requirement to change the domicile of the
fund
Changing
the Domicile of a Fund
Vote
CASE-BY-CASE on re-incorporations, considering the following factors:
•Regulations
of both states
•Required
fundamental policies of both states
•The
increased flexibility available
Authorizing
the Board to Hire and Terminate Subadvisors Without Shareholder
Approval
Vote
AGAINST proposals authorizing the board to hire/terminate subadvisors without
shareholder approval.
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
Distribution
Agreements
Vote
CASE-BY-CASE on distribution agreement proposals, considering the following
factors:
•Fees
charged to comparably sized funds with similar objectives
•The
proposed distributor’s reputation and past performance
•The
competitiveness of the fund in the industry
•The
terms of the agreement
Master-Feeder
Structure
Vote
FOR the establishment of a master-feeder structure.
Mergers
Vote
CASE-BY-CASE on merger proposals, considering the following factors:
•Resulting
fee structure
•Performance
of both funds
•Continuity
of management personnel
•Changes
in corporate governance and their impact on shareholder rights
Shareholder
Proposals for Mutual Funds
Establish
Director Ownership Requirement
Generally
vote AGAINST shareholder proposals that mandate a specific minimum amount of
stock that directors must own in order to qualify as a director or to remain on
the board.
Reimburse
Shareholder for Expenses Incurred
Vote
CASE-BY-CASE on shareholder proposals to reimburse proxy solicitation expenses.
When supporting the dissidents, vote FOR the reimbursement of the proxy
solicitation expenses.
Terminate
the Investment Advisor
Vote
CASE-BY-CASE on proposals to terminate the investment advisor, considering the
following factors:
•Performance
of the fund’s Net Asset Value (NAV)
•The
fund’s history of shareholder relations
•The
performance of other funds under the advisor’s management
Scope
This
policy applies to Victory Capital Management Inc. The entity and its employees
are responsible for complying with this policy. The Legal, Compliance and Risk
Department owns this policy.
Exception
/ Escalation Policy
All
material exceptions to this policy will be reported to the Compliance Committee
and Victory Capital Management Inc. board members. If needed, exceptions may
also be presented to the Victory Capital Holdings Inc. board
members.
Last
Updated: February 1, 2019
Effective
Date: February 1, 2020
Victory
Capital Management Inc.
Proxy
Policy / Policy H-12
W.
H. Reaves & Company, Inc.
PROXY
VOTING POLICIES AND PROCEDURES
1.BACKGROUND
The
act of managing assets of clients may include the voting of proxies related to
such managed assets. Where the power to vote in person or by proxy has been
delegated, directly or indirectly, to the investment adviser, the investment
adviser has the fiduciary responsibility for (a) voting in a manner that is in
the best interests of the client, and (b) properly dealing with potential
conflicts of interest arising from proxy proposals being voted upon.
The
policies and procedures of W. H. Reaves & Company, Inc. (“WHR”) ("the
Adviser") for voting proxies received for accounts managed by the Adviser are
set forth below and are applicable if:
•The
underlying advisory agreement entered into with the client expressly provides
that the Adviser shall be responsible to vote proxies received in connection
with the client’s account; or
•The
underlying advisory agreement entered into with the client is silent as to
whether or not the Adviser shall be responsible to vote proxies received in
connection with the client’s account and
the Adviser has discretionary authority over investment decisions for the
client’s account; or
•In
case of an employee benefit plan, the client (or any plan trustee or other
fiduciary) has
not
reserved the power to vote proxies in either the underlying advisory agreement
entered into with the client or in the client’s plan documents.
These
Proxy Voting Policies and Procedures are designed to ensure that proxies are
voted in an appropriate manner and should complement the Adviser’s investment
policies and procedures regarding its general responsibility to monitor the
performance and/or corporate events of companies which are issuers of securities
held in managed accounts. Any questions about these policies and procedures
should be directed to WHR’s Compliance Department.
PROXY
VOTING POLICIES
In
the absence of specific voting guidelines from a client, WHR will vote proxies
in a manner that is in the best interest of the client, which may result in
different voting results for proxies for the same issuer. The Adviser shall
consider only those factors that relate to the client's investment or dictated
by the client’s written instructions, including how its vote will economically
impact and affect the value of the client's investment (keeping in mind that,
after conducting an appropriate cost-benefit analysis, not voting at all on a
presented proposal may be in the best interest of the client). WHR believes that
voting proxies in accordance with the following policies is in the best
interests of its clients.
A.Specific
Voting Policies
1.Routine
Items:
The
Adviser will generally vote for the election of directors (where no corporate
governance issues are implicated).
•The
Adviser will generally vote for the selection of independent
auditors.
The
Adviser will generally vote for increases in or reclassification of common
stock.
The
Adviser will generally vote for management recommendations adding or amending
indemnification provisions in charter or by-laws.
The
Adviser will generally vote for changes in the board of directors.
The
Adviser will generally vote for outside director compensation.
•The
Adviser will generally vote for proposals that maintain or strengthen the shared
interests of shareholders and management
The
Adviser will generally vote for proposals that increase shareholder
value
The
Adviser will generally vote for proposals that will maintain or increase
shareholder influence over the issuer's board of directors and
management
The
Adviser will generally vote for proposals that maintain or increase the rights
of shareholders
2.Non-Routine
and Conflict of Interest Items:
The
Adviser will generally vote for management proposals for merger or
reorganization if the transaction appears to offer fair value.
The
Adviser will generally vote against shareholder resolutions that consider only
non-financial impacts of mergers
The
Adviser will generally vote against anti-greenmail provisions.
B.General
Voting Policy
If
the proxy includes a Routine Item that implicates corporate governance changes,
a Non-Routine Item where no specific policy applies or a Conflict of Interest
Item where no specific policy applies, then the Adviser may engage an
independent third party to determine how the proxies should be voted.
In
voting on each and every issue, the Adviser and its employees shall vote in a
prudent and timely fashion and only after a careful evaluation of the issue(s)
presented on the ballot.
In
exercising its voting discretion, the Adviser and its employees shall avoid any
direct or indirect conflict of interest raised by such voting decision. The
Adviser will provide adequate disclosure to the client if any substantive aspect
or foreseeable result of the subject matter to be voted upon raises an actual or
potential conflict of interest to the Adviser or:
•any
affiliate of the Adviser. For purposes of these Proxy Voting Policies and
Procedures, an affiliate means:
(i)any
person directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with the Adviser;
(ii)any
officer, director, principal, partner, employer, or direct or indirect
beneficial owner of any 10% or greater equity or voting interest of the Adviser;
or
(iii)any
other person for which a person described in clause (ii) acts in any such
capacity;
any
issuer of a security for which the Adviser (or any affiliate of the Adviser)
acts as a sponsor, advisor, manager, custodian, distributor, underwriter,
broker, or other similar capacity; or
•any
person with whom the Adviser (or any affiliate of the Adviser) has an existing,
material contract or business relationship that was not entered into in the
ordinary course of the Adviser’s (or its affiliate’s) business.
After
informing the client of any potential conflict of interest, the Adviser will
take other appropriate action as required under these Proxy Voting Policies and
Procedures, as provided below.
The
Adviser shall keep certain records required by applicable law in connection with
its proxy voting activities for clients and shall provide proxy-voting
information to clients upon their written or oral request.
3.PROXY
VOTING PROCEDURES
A.The
Account Representative or the Portfolio Manager the “Responsible Party”) shall
be designated by the Adviser to make discretionary investment decisions for the
client's account will be responsible for voting the proxies related to that
account. The Responsible Party should assume that he or she has the power to
vote all proxies related to the client’s account if any one of the three
circumstances set forth in Section 1 above regarding proxy voting powers is
applicable.
B.All
proxies and ballots received by WHR will be forwarded to the Responsible Party
and then logged in upon receipt in the “Receipt of Proxy Voting Material” log.
C.Prior
to voting, the Responsible Party will verify whether his or her voting power is
subject to any limitations or guidelines issued by the client (or in the case of
an employee benefit plan, the plan's trustee or other fiduciaries).
D.Prior
to voting, the Responsible Party will verify whether an actual or potential
conflict of interest with the Adviser or any Interested Person exists in
connection with the subject proposal(s) to be voted upon. The determination
regarding the presence or absence of any actual or potential conflict of
interest shall be adequately documented by the Responsible Party (i.e.,
comparing the apparent parties affected by the proxy proposal being voted upon
against the Adviser’s internal list of Interested Persons and, for any matches
found, describing the process taken to determine the anticipated magnitude and
possible probability of any conflict of interest being present), which shall be
reviewed and signed off on by the Responsible Party’s direct supervisor (and if
none, by the board of directors or a committee of the board of directors of the
Adviser).
E.If
an actual or potential conflict is found to exist, written notification of the
conflict (the “Conflict Notice”) shall be given to the client or the client’s
designee (or in the case of an employee benefit plan, the plan's trustee or
other fiduciary) in sufficient detail and with sufficient time to reasonably
inform the client (or in the case of an employee benefit plan, the plan's
trustee or other fiduciary) of the actual or potential conflict involved.
Specifically,
the Conflict Notice should describe:
•the
proposal to be voted upon;
•the
actual or potential conflict of interest involved;
•the
Adviser’s vote recommendation (with a summary of material factors supporting the
recommended vote); and
•if
applicable, the relationship between the Adviser and any Interested
Person.
The
Conflict Notice will either request the client’s consent to the Adviser’s vote
recommendation or may request the client to vote the proxy directly or through
another designee of the client. The Conflict Notice and consent thereto may be
sent or received, as the case may be, by mail, fax, electronic transmission or
any other reliable form of communication that may be recalled, retrieved,
produced, or printed in accordance with the recordkeeping policies and
procedures of the Adviser. If the client (or in the case of an employee benefit
plan, the plan's trustee or other fiduciary) is unreachable or has not
affirmatively responded before the response deadline for the matter being voted
upon, the Adviser may:
engage
a non-Interested Party to independently review the Adviser’s vote recommendation
if the vote recommendation would fall in favor of the Adviser’s interest (or the
interest of an Interested Person) to confirm that the Adviser’s vote
recommendation is in the best interest of the client under the circumstances;
cast
its vote as recommended if the vote recommendation would fall against the
Adviser’s interest (or the interest of an Interested Person) and such vote
recommendation is in the best interest of the client under the circumstances;
or
abstain
from voting if such action is determined by the Adviser to be in the best
interest of the client under the circumstances.
F.The
Responsible Party will promptly vote proxies received in a manner consistent
with the Proxy Voting Policies and Procedures stated above and guidelines (if
any) issued by client (or in the case of an employee benefit plan, the plan's
trustee or other fiduciaries if such guidelines are consistent with ERISA).
G.In
accordance with SEC Rule 204-2(c)(2), as amended, the Responsible Party shall
retain in the respective client’s file, the following:
A
copy of the proxy statement received (unless retained by a third party for the
benefit of the Adviser or
the proxy statement is available from the SEC’s Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
•A
record of the vote cast (unless this record is retained by a third party for the
benefit of the Adviser and
the third party is able to promptly provide the Adviser with a copy of the
voting record upon its request);
•A
record memorializing the basis for the vote cast;
A
copy of any document created by the Adviser or its employees that was material
in making the decision on how to vote the subject proxy; and,
A
copy of any Conflict Notice, conflict consent or any other written communication
(including emails or other electronic communications) to or from the client (or
in the case of an employee benefit plan, the plan's trustee or other
fiduciaries) regarding the subject proxy vote cast by, or the vote
recommendation of, the Adviser.
The
above copies and records shall be retained in the client’s file for a period not
less than five (5) years (or in the case of an employee benefit plan, no less
than six (6) years), which shall be maintained at the appropriate office of the
Adviser.
H.Periodically,
but no less than annually, the Adviser will:
1.Verify
that all annual proxies for the securities held in the client’s account have
been received;
2.Verify
that each proxy received has been voted in a manner consistent with the Proxy
Voting Policies and Procedures and the guidelines (if any) issued by the client
(or in the case of an employee benefit plan, the plan's trustee or other
fiduciaries);
3.Review
the files to verify that records of the voting of the proxies have been properly
maintained;
4.Prepare
a written report for each client regarding compliance with the Proxy Voting
Policies and Procedures; and
5.Maintain
an internal list of Interested Persons.
Proxies
and Class Action Lawsuits
WHR
will be required to take action and render advice with respect to voting of
proxies solicited by or with respect to the issuers of securities in which
assets of the Account may be invested from time to time. However, WHR will
not
take any action or render any advice with respect to any securities held in the
Account, which are named in or subject to class action lawsuits. WHR may, only
at the client’s request, offer clients advice regarding corporate
actions
INVESTMENT
ADVISER
PROXY
VOTING
POLICIES
& PROCEDURES
WESTWOOD
HOLDINGS
GROUP,
INC.
Updated
March 31, 2020
27. 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
Data Management 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.
Westwood
Holdings Group, Inc.
March
31, 2020
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 Data Management 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.
Westwood
Holdings Group, Inc.
March
31, 2020
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
Data Management 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.
Westwood
Holdings Group, Inc.
March
31, 2020
27.5.6.
Conflicts of Interest.
a.Westwood
conducts periodic reviews 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
Data Management 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
g.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, Data Management 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.
Westwood
Holdings Group, Inc.
March
31, 2020