SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO. 33-82366)
UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective
Amendment No. 83
and
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
Investment Company Act File No. 811-08690
Amendment No. 85
MASSMUTUAL
PREMIER FUNDS
(Exact Name of Registrant as Specified in Declaration
of Trust)
1295 State Street
Springfield, MA 01111-0001
(413) 744-1000
Name and Address of Agent for Service
Andrew M. Goldberg, Esq.
Vice President, Secretary, and Chief Legal Officer
MassMutual Premier Funds
1295 State Street
Springfield, MA 01111-0001
Copy to:
Timothy W. Diggins, Esq.
Ropes & Gray LLP
The Prudential Tower
800 Boylston Street
Boston, MA 02199-3600
It is proposed
that this filing become effective on February
1, 2022 pursuant to paragraph (b) of rule 485.
TO THE SECURITIES AND EXCHANGE COMMISSION:
Registrant submits
this Post-Effective Amendment No. 83 to its Registration Statement No. 33-82366 under the Securities Act of 1933, as amended, and this
Amendment No. 85 to its Registration Statement No. 811-08690 under the Investment Company Act of 1940, as amended. This Post-Effective
Amendment relates to each series of the Registrant.
MASSMUTUAL FUNDS
This Prospectus describes the following Funds:
Fund Name
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Class I
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Class R5
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Service Class
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Administrative Class
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Class A
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Class R4
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Class R3
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MassMutual U.S. Government
Money Market Fund |
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MKSXX
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MassMutual Inflation-Protected
and Income Fund |
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MIPZX
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MIPSX
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MIPYX
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MIPLX
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MPSAX
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MIPRX
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MIPNX
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MassMutual Core Bond Fund
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MCZZX
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MCBDX
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MCBYX
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MCBLX
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MMCBX
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MCZRX
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MCBNX
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MassMutual Diversified
Bond Fund |
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MDBZX
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MDBSX
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MDBYX
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MDBLX
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MDVAX
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MDBFX
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MDBRX
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MassMutual Balanced Fund
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MBBIX
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MBLDX
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MBAYX
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MMBLX
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MMBDX
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MBBRX
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MMBRX
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MassMutual Disciplined
Value Fund |
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MPIVX
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MEPSX
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DENVX
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MPILX
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MEPAX
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MPIRX
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MPINX
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MassMutual Main Street
Fund |
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MSZIX
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MMSSX
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MMSYX
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MMSLX
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MSSAX
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MSSRX
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MMSNX
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MassMutual Disciplined
Growth Fund |
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MPDIX
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MPGSX
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DEIGX
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MPGLX
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MPGAX
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MPDGX
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MPDRX
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MassMutual Small Cap Opportunities
Fund |
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MSOOX
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MSCDX
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MSVYX
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MSCLX
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DLBMX
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MOORX
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MCCRX
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MassMutual Global Fund
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MGFZX
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MGFSX
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MGFYX
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MGFLX
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MGFAX
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MGFRX
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MGFNX
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MassMutual International
Equity Fund |
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MIZIX
|
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MIEDX
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MYIEX
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MIELX
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MMIAX
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MEIRX
|
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MEERX
|
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MassMutual Strategic Emerging
Markets Fund |
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MPZSX
|
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MPSMX
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MPEYX
|
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MPLSX
|
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MPASX
|
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MPRSX
|
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MPZRX
|
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The Securities and Exchange Commission has not approved
or disapproved these securities or passed upon the adequacy of this Prospectus. Any statement to the contrary is a crime.
PROSPECTUS
February 1,
2022
Table Of Contents
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Page |
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About the Funds |
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3
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7
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14 |
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21
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29 |
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38
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42 |
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47
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51
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56 |
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61
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67
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Management of the Funds |
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96 |
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96 |
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MassMutual
U.S. Government Money Market Fund (formerly known as MassMutual Premier U.S. Government Money Market Fund)
INVESTMENT
OBJECTIVE
This Fund seeks current income consistent with preservation of capital and
liquidity.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy, hold,
and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which are not reflected in the
tables and examples below.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class R5
|
|
Maximum Sales Charge (Load) Imposed on Purchases
(as a % of offering price) |
|
|
None
|
|
Maximum Deferred Sales Charge (Load) (as a % of
the lower of the original offering price or redemption proceeds) |
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class R5
|
|
Management Fees
|
|
|
0.35%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
Other Expenses
|
|
|
0.16%
|
|
Total Annual Fund Operating Expenses |
|
|
0.51%
|
|
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in Class R5 shares of the Fund for the
time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment earns
a 5% return each year and that the Fund’s operating expenses are exactly as described in the preceding table. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class R5 |
|
|
|
$ |
52 |
|
|
|
|
$ |
164 |
|
|
|
|
$ |
285 |
|
|
|
|
$ |
640 |
|
|
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
The Fund normally invests at least 99.5% of its total assets in cash, U.S.
Government securities, and/or repurchase agreements fully collateralized by cash or U.S. Government securities.
In managing the Fund, the Fund’s subadviser, Barings
LLC (“Barings”), intends to comply with Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940
Act”), which sets forth the requirements for money market funds regarding credit quality, diversification, liquidity, and maturity.
The Fund seeks to maintain, but does not guarantee, a stable $1.00 share price.
Under normal circumstances, the Fund invests at least 80% of its net assets
in U.S. Government securities and repurchase agreements that are fully collateralized by U.S. Government securities. U.S. Government
securities are high-quality securities issued or guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S. Government.
U.S. Government securities may be backed by the full faith and credit of the U.S. Treasury, the right to borrow from the U.S. Treasury,
or the agency or instrumentality issuing or guaranteeing the security. Certain issuers of U.S. Government securities, including Fannie
Mae, Freddie Mac, and the Federal Home Loan Banks, are sponsored or chartered by Congress but their securities are neither issued nor
guaranteed by the U.S. Treasury.
Principal
Risks
You
could lose money by investing in the Fund. Although
the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An
investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The Fund’s sponsor has no legal obligation
to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any
time.
Certain risks relating to instruments and strategies used in the management
of the Fund are placed first. The significance of any specific risk to an investment in the Fund will vary over time, depending on the
composition of the Fund’s portfolio, market conditions, and other factors. You should read all of the risk information presented
below carefully, because any one or more of these risks may result in losses to the Fund.
Money Market Instruments
Risk The value of a money market instrument typically will decline during periods of rising interest rates, and can also
decline in response to changes in the financial condition of the issuer, borrower, counterparty, or
underlying collateral assets, or changes in market, economic, industry, political, regulatory,
public health, and other conditions affecting a particular type of security or issuer or fixed income securities generally. Certain events,
such as changes in the financial condition of the issuer or borrower, specific market or economic developments, regulatory or government
actions, natural disasters, pandemics, terrorist attacks, war, and other geopolitical events can have a dramatic adverse effect on the
debt market and the overall liquidity of the market for money market instruments.
U.S. Government Securities
Risk Obligations of certain U.S. Government agencies and instrumentalities are not backed by the full faith and credit of
the U.S. Government, and there can be no assurance that the U.S. Government would provide financial support to such agencies and instrumentalities.
Repurchase Agreement
Risk These transactions must be fully collateralized, but involve credit risk to a Fund if the other party should default
on its obligation and the Fund is delayed or prevented from recovering the collateral.
Credit
Risk Credit risk is the risk that an issuer, guarantor, or liquidity provider of a fixed income security held by the Fund
may be unable or unwilling, or may be perceived (whether by market participants, ratings agencies, pricing services or otherwise) as unable
or unwilling, to make timely principal and/or interest payments, or to otherwise honor its obligations. The Fund may also be exposed to
the credit risk of its counterparty to repurchase agreements, reverse repurchase agreements, swap transactions, and other derivatives
transactions, and to the counterparty’s ability or willingness to perform in accordance with the terms of the transaction. The value
of such transactions to the Fund will depend on the willingness and ability of the counterparty to perform its obligations, including
among other things the obligation to return collateral or margin to the Fund. If a counterparty becomes bankrupt or otherwise fails to
perform its obligations under a derivative contract due to financial difficulties, the Fund may experience significant delays in obtaining
any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. The Fund may obtain only a limited recovery
or may obtain no recovery in such circumstances.
Inflation Risk The
value of assets or income from the Fund’s investments will be less in the future
as inflation decreases the value of money. As inflation increases, the value of the Fund’s
assets can decline as can the value of the Fund’s distributions.
LIBOR Risk Certain
instruments in which the Fund may invest rely in some fashion upon the London-Interbank Offered Rate (“LIBOR”). The United
Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced plans to phase out the use of LIBOR by the end of 2021.
There remains uncertainty regarding the future utilization of LIBOR, including an extension by the ICE Benchmark Administration to postpone
certain aspects of the LIBOR transition to June 2023, and the nature of any replacement rate, and any potential effects of the transition
away from LIBOR on the Fund or on certain instruments in which the Fund invests are not known. The transition process may involve, among
other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR. Uncertainty and volatility
arising from the transition may result in a reduction in the value of certain LIBOR-based instruments held by the Fund or reduce the effectiveness
of related transactions such as hedges. Any such effects of the transition away from LIBOR, as well as other unforeseen effects, could
result in losses to the Fund.
Liquidity Risk Certain
securities may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price,
and the Fund may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid
investments at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject
to restrictions on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time.
The Fund may not receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market Risk The
value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable market-induced
changes affecting particular industries,
sectors, or issuers. Stock and bond markets can decline significantly
in response to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as
investor perceptions of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage,
industry problems, and reduced demand for goods or services.
Prepayment Risk Prepayment
risk is the risk that principal of a debt obligation will be repaid at a faster rate than anticipated. In such a case, a Fund may lose
the benefit of a favorable interest rate for the remainder of the term of the security in question, and may only be able to reinvest the
amount of the prepayment at a less favorable rate.
Valuation Risk The
Fund is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are
fair valued.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class R5 shares. The table shows how the Fund’s average annual returns
for 1, 5, and 10 years compare with those of a broad measure of market performance. The Fund’s name, investment objective,
and investment strategy changed on May 1, 2016 when the Fund changed from a money market fund to a government money market fund.
Performance results shown were achieved when the Fund could invest in types of securities that it is no longer able to hold. Future performance
of the Fund may be lower as a result. Past performance (before
and after taxes) is not necessarily an indication of how the Fund will perform in the future. More up-to-date performance
information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Class R5 Shares
|
Highest
Quarter: |
|
|
2Q ’19,
|
|
|
|
|
0.49% |
|
|
|
Lowest
Quarter: |
|
|
1Q ’12 thru 3Q ’12; 1Q ’13 thru 3Q ’14; 1Q ’15
thru 4Q ’16; 2Q ’20 thru 4Q ’21, 0.00% |
|
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class R5
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
0.00 |
% |
|
|
|
|
0.74 |
% |
|
|
|
|
0.37 |
% |
FTSE
3 Month US T Bill Index (reflects no deduction for
fees, expenses, or taxes) |
|
|
|
|
|
0.05 |
% |
|
|
|
|
1.11 |
% |
|
|
|
|
0.60 |
% |
MANAGEMENT
Investment Adviser: MML Investment
Advisers, LLC (“MML Advisers”)
Subadviser(s): Barings LLC (“Barings”)
Portfolio Manager(s):
Scott Simler is
a Director and portfolio manager for Barings’ Investment Grade Fixed Income Group. He has managed the Fund since July 2009.
PURCHASE AND SALE
OF FUND SHARES
Shares of the Fund are generally available to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request, telephone, or internet
(available to certain customers).
TAX INFORMATION
The Fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS AND OTHER
FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other financial intermediary,
the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates, or others for the sale of
Fund shares or continuing shareholder services provided by the intermediary.
These payments may create a conflict of interest by influencing the broker-dealer or other
intermediary to recommend the Fund over another investment. You should contact your intermediary to obtain more information about the
compensation it may receive in connection with your investment.
MassMutual
Inflation-Protected and Income Fund (formerly known as MassMutual Premier Inflation-Protected and Income Fund)
INVESTMENT
OBJECTIVE
This Fund seeks to achieve as high a total rate of real return on an annual
basis as is considered consistent with prudent investment risk and the preservation of capital.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you
may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A shares,
you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
4.25%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Admini- strative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
0.38%
|
|
|
0.38%
|
|
|
0.38%
|
|
|
0.38%
|
|
|
0.38%
|
|
|
0.38%
|
|
|
0.38%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.09%
|
|
|
0.19%
|
|
|
0.29%
|
|
|
0.39%
|
|
|
0.39%
|
|
|
0.29%
|
|
|
0.29%
|
|
Total Annual Fund Operating Expenses
|
|
|
0.47%
|
|
|
0.57%
|
|
|
0.67%
|
|
|
0.77%
|
|
|
1.02%
|
|
|
0.92%
|
|
|
1.17%
|
|
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in each share class of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial
sales charge. The example also assumes that your
investment earns a 5% return each year and that the Fund’s operating expenses are
exactly as described in the preceding table. Although your actual costs may be higher or lower, based on these assumptions your costs
would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
48 |
|
|
|
|
$ |
151 |
|
|
|
|
$ |
263 |
|
|
|
|
$ |
591 |
|
|
Class R5 |
|
|
|
$ |
58 |
|
|
|
|
$ |
183 |
|
|
|
|
$ |
318 |
|
|
|
|
$ |
714 |
|
|
Service Class |
|
|
|
$ |
68 |
|
|
|
|
$ |
214 |
|
|
|
|
$ |
373 |
|
|
|
|
$ |
835 |
|
|
Administrative Class |
|
|
|
$ |
79 |
|
|
|
|
$ |
246 |
|
|
|
|
$ |
428 |
|
|
|
|
$ |
954 |
|
|
Class A |
|
|
|
$ |
525 |
|
|
|
|
$ |
736 |
|
|
|
|
$ |
964 |
|
|
|
|
$ |
1,620 |
|
|
Class R4 |
|
|
|
$ |
94 |
|
|
|
|
$ |
293 |
|
|
|
|
$ |
509 |
|
|
|
|
$ |
1,131 |
|
|
Class R3 |
|
|
|
$ |
119 |
|
|
|
|
$ |
372 |
|
|
|
|
$ |
644 |
|
|
|
|
$ |
1,420 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 100%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
Under normal circumstances, the Fund invests at least 80% of its net assets
(plus the amount of any borrowings for investment purposes) in inflation-indexed bonds and other income-producing securities. Inflation-indexed
bonds are instruments indexed or otherwise linked to general measures of inflation because their principal is typically adjusted to reflect
general movements of inflation in the country of issue. The Fund may invest in securities of any maturity. The Fund may invest in inflation-indexed
bonds issued by the U.S. and non-U.S. governments or their agencies or instrumentalities, by government-sponsored enterprises, or by corporations.
The Fund expects to enter into total return swaps based on one or more inflation indexes or on inflation-indexed bonds or other inflation
derivatives, as a substitute for purchasing certain inflation-indexed bonds or otherwise to adjust the inflation-sensitivity of the portfolio.
Use of total return swaps will create leverage in the Fund.
The Fund may also invest in other income-producing securities of any kind (including, but
not limited to, corporate bonds and notes, Rule 144A securities, U.S. and non-U.S. government and agency or instrumentality bonds,
money market instruments, and mortgage-related and asset-backed securities, including collateralized bond and loan obligations). The Fund
may enter into repurchase agreement transactions. The Fund may at times have significant exposure to one or more industries or sectors.
The Fund may hold a portion of its assets in cash or cash equivalents. The Fund may invest up to 15% of its total assets in securities
that are not denominated in U.S. dollars. The Fund may purchase and sell securities on a when-issued, delayed delivery, to-be-announced,
or forward commitment basis.
The Fund may invest in (i) securities denominated in currencies of
emerging market countries, (ii) fixed income securities or debt instruments issued by emerging market entities or sovereign nations and/or
(iii) debt instruments denominated in or based on the currencies, interest rates, or issues of emerging market countries. Emerging market
countries are defined to include any country that did not become a member of the Organization for Economic Cooperation and Development
(O.E.C.D.) prior to 1975 and Turkey.
The Fund may invest in other investment companies,
including investment companies that are advised by the Fund’s investment adviser, subadviser, sub-subadviser, or its affiliates,
or by unaffiliated parties.
The Fund generally intends to maintain a dollar-weighted
average credit quality of A or better (determined on the basis of the highest credit rating of the Fund’s investments at the time
of their purchase or, if unrated, determined to be of comparable quality by the Fund’s subadviser, Barings
LLC (“Barings”), or sub-subadviser, Baring International Investment Limited
(“BIIL”)). The Fund will invest primarily in assets rated investment grade at the time of purchase (rated Baa3 or higher by
Moody’s, BBB- or higher by Standard & Poor’s or the equivalent by any nationally recognized statistical rating organization
(“NRSRO”), or, if unrated, determined to be of comparable quality by Barings or BIIL) but not in assets rated below Ba3 by
Moody’s, below BB- by Standard & Poor’s and the equivalent by any NRSRO. In the event that a security is downgraded after
its purchase by the Fund, the Fund may continue to hold the security if Barings or BIIL
considers that doing so would be consistent with the Fund’s investment
objective. The Fund invests in a portfolio of securities that Barings or BIIL expects to provide an attractive rate of real return. Barings
or BIIL defines “real return” as the portfolio’s total return (before expenses) less the estimated rate of inflation,
measured using the Consumer Price Index for All Urban Consumers (the “CPI-U”).
In addition to the total return swaps and other derivatives referred to above,
the Fund may (but is not obligated to) use a wide variety of exchange-traded and over-the-counter derivative transactions, including,
but not limited to, total return swaps (for hedging purposes or to adjust various portfolio characteristics, including the duration (interest
rate volatility) of the Fund’s portfolio, or as a substitute for direct investments), interest rate swaps (for hedging purposes,
to adjust various portfolio characteristics, including the duration (interest rate volatility) of the Fund’s portfolio, or as a
substitute for direct investments), credit default swaps (for hedging purposes or as a substitute for direct investments), and futures
contracts, foreign currency futures and forward contracts, including derivatives thereof (for hedging purposes, to adjust various
portfolio characteristics, including the duration (interest rate volatility) of the Fund’s portfolio, or as a substitute for direct
investments or to gain market exposure). The Fund may also enter into forward commitment transactions. The Fund may invest in common stocks,
exchange-traded funds (“ETFs”), or other equity securities and derivatives thereof for hedging purposes or to enhance total
return. The use of such techniques may have the effect of creating investment leverage in the Fund.
In selecting investments for the Fund, Barings or BIIL
seeks to construct a portfolio of inflation-indexed and other income-producing securities and other financial instruments, including derivatives,
designed to meet the real return objective of the Fund. Barings or BIIL may choose to sell securities with deteriorating credit or limited
upside potential compared to other securities.
Principal
Risks
The following are the Principal Risks of the Fund. The
value of your investment in the Fund could go down as well as up. You can lose
money by investing in the Fund. References in this section to the Fund’s subadviser may include any sub-subadvisers
as applicable. Certain risks relating to instruments and strategies used in the
management of the Fund are placed first. The significance of any specific risk to an investment
in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market conditions, and other factors. You
should read all of the risk information presented below carefully, because any one or more of these risks may result in losses to the
Fund.
Fixed
Income Securities Risk The values of fixed income securities typically will decline during periods of rising interest rates,
and can also decline in response to changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral
assets, or changes in market, economic, industry, political, regulatory, public health, and other conditions affecting a particular type
of security or issuer or fixed income securities generally. Certain events, such as market or economic developments, regulatory or government
actions, natural disasters, pandemics, terrorist attacks, war, and other geopolitical events can have a dramatic adverse effect on the
debt market and the overall liquidity of the market for fixed income securities. During those periods, the Fund may experience high levels
of shareholder redemptions, and may have to sell securities at times when the Fund would otherwise not do so, and potentially at unfavorable
prices. Certain securities may be difficult to value during such periods. Fixed income securities are subject to interest rate risk (the
risk that the value of a fixed income security will fall when interest rates rise), extension risk (the risk that the average life of
a security will be extended through a slowing of principal payments), prepayment risk (the risk that a security will be prepaid and the
Fund will be required to reinvest at a less favorable rate), duration risk (the risk that longer-term securities may be more sensitive
to interest rate changes), and credit risk.
Inflation-Linked Securities
Risk Such securities may change in value in response to actual or anticipated changes in inflation rates in a manner unanticipated
by the Fund’s portfolio manager or investors generally. Inflation-linked securities are subject to fixed income securities risks.
When inflation is low, declining, or negative, the Fund’s performance could lag the performance of more conventional bond funds.
Credit Risk Credit
risk is the risk that an issuer, guarantor, or liquidity provider of a fixed income security held by the Fund may be unable or unwilling,
or may be perceived (whether by market participants, ratings agencies, pricing services or
otherwise) as unable or unwilling, to make timely principal and/or
interest payments, or to otherwise honor its obligations. The Fund may also be exposed to the credit risk of its counterparty to repurchase
agreements, reverse repurchase agreements, swap transactions, and other derivatives transactions, and to the counterparty’s ability
or willingness to perform in accordance with the terms of the transaction. The value of such transactions to the Fund will depend on the
willingness and ability of the counterparty to perform its obligations, including among other things the obligation to return collateral
or margin to the Fund. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due
to financial difficulties, the Fund may experience significant delays in obtaining any recovery under the derivative contract in a bankruptcy
or other reorganization proceeding. The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.
Derivatives Risk Derivatives
can be highly volatile and involve risks different from, and potentially greater than, direct investments, including risks of imperfect
correlation between the value of derivatives and underlying assets, counterparty default, potential losses that partially or completely
offset gains, and illiquidity. Derivatives can create investment leverage. Losses from derivatives can be substantially greater than the
derivatives’ original cost and can sometimes be unlimited. If the value of a derivative does not correlate well with the particular
market or asset class the derivative is designed to provide exposure to, the derivative may not have the effect or benefit anticipated.
Derivatives can also reduce the opportunity for gains or result in losses by offsetting positive returns in other investments. Many derivatives
are traded in the over-the-counter market and not on exchanges.
Foreign Investment Risk;
Emerging Markets Risk; Currency Risk Investments in securities of foreign issuers, securities of companies with significant
foreign exposure, and foreign currencies can involve additional risks relating to market, industry, political, regulatory, public health,
and other conditions. Political, social, diplomatic, and economic developments, U.S. and foreign government action such as the imposition
of currency or capital blockages, controls, or tariffs, economic and trade sanctions or embargoes, security suspensions, entering or exiting
trade or other intergovernmental agreements, or the
expropriation or nationalization of assets in a particular country, can cause dramatic declines
in certain or all securities with exposure to that country and other countries. In the event of nationalization, expropriation, or other
confiscation, the Fund could lose its entire foreign investment in a particular country. There may be quotas or other limits on the ability
of the Fund (or clients of the Fund’s investment adviser or subadviser) to invest or maintain investments in securities of issuers
in certain countries. Enforcing legal rights can be more difficult, costly, and limited in certain foreign countries, and can be particularly
difficult against foreign governments. Because non-U.S. securities are normally denominated and traded in currencies other than the U.S.
dollar, the value of the Fund’s assets may be affected favorably or unfavorably by changes in currency exchange rates, exchange
control regulations, and restrictions or prohibitions on the repatriation of non-U.S. currencies. Income and gains with respect to investments
in certain countries may be subject to withholding and other taxes. There may be less information publicly available about a non-U.S.
company than about a U.S. company, and many non-U.S. companies are not subject to accounting, auditing, and financial reporting standards,
regulatory framework and practices comparable to those in the U.S. The securities of some non-U.S. companies, especially those in emerging
markets, are less liquid and at times more volatile than securities of comparable U.S. companies. Emerging markets securities are subject
to greater risks than securities issued in developed foreign markets, including less liquidity, less stringent investor protection and
disclosure standards, greater price volatility, higher relative rates of inflation, greater political, economic, and social instability,
greater custody and operational risks, and greater volatility in currency exchange rates, and are more susceptible to environmental problems.
Many emerging market countries are highly reliant on international trade and exports, including the export of commodities. Their economies
may be significantly impacted by fluctuations in commodity prices and the global demand for certain commodities. In addition, many emerging
market countries with less established health care systems have experienced outbreaks of pandemics or contagious diseases from time to
time. Frontier markets, a subset of emerging markets, generally have smaller economies and less mature capital markets than emerging markets.
As a result, the risks of investing in emerging market countries are
magnified in frontier market countries. Frontier markets are more susceptible to having
abrupt changes in currency values, less mature markets and settlement practices, and lower trading volumes that could lead to greater
price volatility and illiquidity. Non-U.S. transaction costs, such as brokerage commissions and custody costs, may be higher than in the
United States. In addition, foreign markets can react differently to market, economic, industry, political, regulatory, geopolitical,
public health, and other conditions than the U.S. market.
Mortgage- and Asset-Backed
Securities Risk Investments in mortgage- and asset-backed securities subject the Fund to credit risk, interest rate risk,
extension risk, and prepayment risk, among other risks. Mortgage-backed and asset-backed securities not issued by a government agency
generally involve greater credit risk than securities issued by government agencies. Payment of principal and interest generally depends
on the cash flows generated by the underlying assets and the terms of the security. The types of mortgages (for example, residential or
commercial mortgages) underlying securities held by the Fund may differ and be affected differently by market factors. Investments that
receive only the interest portion or the principal portion of payments on the underlying assets may be highly volatile. Litigation with
respect to the representations and warranties given in connection with the issuance of mortgage-backed securities can be an important
consideration in investing in such securities, and the outcome of any such litigation could significantly impact the value of the Fund’s
mortgage-backed investments.
Cash Position Risk If
the Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the
Fund may not achieve its investment objective.
Hedging Risk The
Fund’s attempts at hedging and taking long and short positions in currencies may not be successful and could cause the Fund to lose
money or fail to get the benefit of a gain on a hedged position. If expected changes to securities prices, interest rates, currency values,
and exchange rates, or the creditworthiness of an issuer are not accurately predicted, the Fund could be in a worse position than if it
had not entered into such transactions.
Leveraging Risk Instruments
and transactions, including derivatives transactions, that create
leverage may cause the value of an investment in the Fund to be more volatile, could result
in larger losses than if they were not used, and tend to compound the effects of other risks.
LIBOR Risk Certain
instruments in which the Fund may invest rely in some fashion upon the London-Interbank Offered Rate (“LIBOR”). The United
Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced plans to phase out the use of LIBOR by the end of 2021.
There remains uncertainty regarding the future utilization of LIBOR, including an extension by the ICE Benchmark Administration to postpone
certain aspects of the LIBOR transition to June 2023, and the nature of any replacement rate, and any potential effects of the transition
away from LIBOR on the Fund or on certain instruments in which the Fund invests are not known. The transition process may involve, among
other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR. Uncertainty and volatility
arising from the transition may result in a reduction in the value of certain LIBOR-based instruments held by the Fund or reduce the effectiveness
of related transactions such as hedges. Any such effects of the transition away from LIBOR, as well as other unforeseen effects, could
result in losses to the Fund.
Liquidity Risk Certain
securities may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price,
and the Fund may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid
investments at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject
to restrictions on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time.
The Fund may not receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market Risk The
value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable market-induced
changes affecting particular industries,
sectors, or issuers. Stock and bond markets can decline significantly
in response to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as
investor perceptions of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage,
industry problems, and reduced demand for goods or services.
Reinvestment
Risk Income from the Fund’s portfolio will decline if and when the Fund invests the proceeds from matured, traded,
or called debt obligations at market interest rates that are below the portfolio’s current earnings rate. A decline in income could
affect the Fund’s overall return.
Repurchase Agreement
Risk These transactions must be fully collateralized, but involve credit risk to a Fund if the other party should default
on its obligation and the Fund is delayed or prevented from recovering the collateral.
Risk
of Investment in Other Funds or Pools The Fund is indirectly exposed to all of the risks of the underlying funds, including
ETFs, in which it invests, including the risk that the underlying funds will not perform as expected. ETFs are subject to additional risks,
including secondary market trading risks and the risk that an ETF’s shares may trade above or below net asset value. The Fund indirectly
pays a portion of the expenses incurred by the underlying funds.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
Sovereign Debt Obligations
Risk Investments in debt securities issued by governments or by government agencies and instrumentalities involve the risk
that the governmental entities responsible for repayment may be unable or unwilling to pay interest and repay principal when due. Many
sovereign debt obligations may be rated below investment grade (“junk” or “high yield” bonds). Any restructuring
of a sovereign debt obligation held by the Fund will likely have a significant adverse effect on the value of the obligation. In the event
of default of sovereign debt, the Fund may be unable to pursue legal action against the sovereign issuer or to realize on collateral securing
the debt.
U.S. Government Securities Risk Obligations
of certain U.S. Government agencies and instrumentalities are not backed by the full faith and credit of the U.S. Government, and there
can be no assurance that the U.S. Government would provide financial support to such agencies and instrumentalities.
Valuation Risk The
Fund is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are
fair valued.
When-Issued, Delayed
Delivery, TBA, and Forward Commitment Transaction Risk These transactions may create leverage and involve a risk of loss
if the value of the securities declines prior to settlement.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class R5 shares. The table shows how the Fund’s average annual returns for
1, 5, and 10 years compare with those of a broad measure of market performance. Performance for Class R4 shares of the Fund for periods
prior to its inception date (04/01/14) is based on the performance of Class R5 shares, adjusted for Class R4 expenses. Performance
for Class A shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Class R5 Shares
|
Highest Quarter:
|
|
|
2Q ’20,
|
|
|
|
|
6.20 |
% |
|
Lowest Quarter:
|
|
|
2Q ’13,
|
|
|
–7.15%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual
after-tax returns depend on an
investor’s
tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold Fund shares through tax-advantaged
arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Class R5 only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class R5
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
6.34 |
% |
|
|
|
|
5.45 |
% |
|
|
|
|
3.14 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
3.46 |
% |
|
|
|
|
3.75 |
% |
|
|
|
|
1.73 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares |
|
|
|
|
|
3.84 |
% |
|
|
|
|
3.47 |
% |
|
|
|
|
1.82 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
6.45 |
% |
|
|
|
|
5.56 |
% |
|
|
|
|
3.25 |
% |
Service
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
6.14 |
% |
|
|
|
|
5.34 |
% |
|
|
|
|
3.04 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
6.10 |
% |
|
|
|
|
5.23 |
% |
|
|
|
|
2.93 |
% |
Class A
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
1.39 |
% |
|
|
|
|
4.07 |
% |
|
|
|
|
2.24 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
5.95 |
% |
|
|
|
|
5.08 |
% |
|
|
|
|
2.80 |
% |
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
5.74 |
% |
|
|
|
|
4.82 |
% |
|
|
|
|
2.50 |
% |
Bloomberg
U.S. Treasury Inflation Protected Securities (TIPS) Index (Series – L) (reflects
no deduction for fees, expenses, or taxes)
|
|
|
|
|
|
5.96 |
% |
|
|
|
|
5.34 |
% |
|
|
|
|
3.09 |
% |
MANAGEMENT
Investment Adviser: MML Investment
Advisers, LLC (“MML Advisers”)
Subadviser(s): Barings LLC (“Barings”)
Sub-subadviser(s):
Baring International Investment Limited (“BIIL”)
Portfolio Manager(s):
Yulia Alekseeva, CFA is
a Managing Director, the Head of Securitized Credit Research, and a portfolio manager for Barings’ Investment Grade Fixed Income
Group. She has managed the Fund since February 2020.
Douglas
Trevallion, II, CFA is a Managing Director, the Head of Global Securitized and Liquid Products, and a portfolio manager for
Barings’ Investment Grade Fixed Income
Group. He has managed the Fund since October 2008.
PURCHASE AND SALE
OF FUND SHARES
Shares of the Fund are generally available to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request, telephone, or internet
(available to certain customers).
TAX INFORMATION
The Fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS AND
OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other financial intermediary,
the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates, or others for the sale of
Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict of interest by influencing
the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your intermediary to obtain
more information about the compensation it may receive in connection with your investment.
MassMutual
Core Bond Fund (formerly known as MassMutual Premier Core Bond Fund)
INVESTMENT
OBJECTIVE
This Fund seeks to achieve a high total rate of return consistent with prudent
investment risk and the preservation of capital by investing primarily in a diversified portfolio of investment grade fixed income securities.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you
may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A shares,
you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
4.25%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
0.38%
|
|
|
0.38%
|
|
|
0.38%
|
|
|
0.38%
|
|
|
0.38%
|
|
|
0.38%
|
|
|
0.38%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.04%
|
|
|
0.14%
|
|
|
0.24%
|
|
|
0.34%
|
|
|
0.34%
|
|
|
0.24%
|
|
|
0.24%
|
|
Total Annual Fund Operating Expenses
|
|
|
0.42%
|
|
|
0.52%
|
|
|
0.62%
|
|
|
0.72%
|
|
|
0.97%
|
|
|
0.87%
|
|
|
1.12%
|
|
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in each share class of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial
sales charge. The example also assumes that your investment earns a 5% return each year
and that the Fund’s operating expenses are exactly as described in the preceding table. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
43 |
|
|
|
|
$ |
135 |
|
|
|
|
$ |
235 |
|
|
|
|
$ |
530 |
|
|
Class R5 |
|
|
|
$ |
53 |
|
|
|
|
$ |
167 |
|
|
|
|
$ |
291 |
|
|
|
|
$ |
653 |
|
|
Service Class |
|
|
|
$ |
63 |
|
|
|
|
$ |
199 |
|
|
|
|
$ |
346 |
|
|
|
|
$ |
774 |
|
|
Administrative Class |
|
|
|
$ |
74 |
|
|
|
|
$ |
230 |
|
|
|
|
$ |
401 |
|
|
|
|
$ |
894 |
|
|
Class A |
|
|
|
$ |
520 |
|
|
|
|
$ |
721 |
|
|
|
|
$ |
938 |
|
|
|
|
$ |
1,564 |
|
|
Class R4 |
|
|
|
$ |
89 |
|
|
|
|
$ |
278 |
|
|
|
|
$ |
482 |
|
|
|
|
$ |
1,073 |
|
|
Class R3 |
|
|
|
$ |
114 |
|
|
|
|
$ |
356 |
|
|
|
|
$ |
617 |
|
|
|
|
$ |
1,363 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 256%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
Under normal circumstances, the Fund invests at least
80% of its net assets (plus the amount of any borrowings for investment purposes) in investment grade fixed income securities (rated Baa3
or higher by Moody’s, BBB- or higher by Standard & Poor’s or the equivalent by any nationally recognized statistical rating
organization, or, if unrated, determined to be of comparable quality by the Fund’s subadviser, Barings
LLC (“Barings”), or sub-subadviser, Baring International Investment Limited
(“BIIL”)). These typically include U.S. dollar-denominated corporate obligations, securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, U.S. and foreign issuer dollar-denominated bonds including, but not limited to, corporate
obligations, government and agency issues, private placement bonds, securities subject to resale pursuant to Rule 144A, and mortgage-backed
and other asset-backed securities,
including collateralized bond and loan obligations. In the event that
a security is downgraded after its purchase by the Fund, the Fund may continue to hold the security if Barings or BIIL considers that
doing so would be consistent with the Fund’s investment objective.
In pursuing its investment objective, the Fund may (but is not obligated
to) use a wide variety of exchange-traded and over-the-counter derivatives, including, but not limited to, futures contracts and forward
contracts, including derivatives thereof (for hedging purposes, to adjust various portfolio characteristics, including the duration (interest
rate volatility) of the Fund’s portfolio, or as a substitute for direct investments); interest rate swaps (for hedging purposes
or as a substitute for direct investments); total return swaps (for hedging purposes or to gain exposure to securities or markets in which
it might not be able to invest directly); and credit default swaps (for hedging purposes or as a substitute for direct investments). The
Fund may invest in common stocks, exchange-traded funds (“ETFs”), or other equity securities and derivatives thereof for hedging
purposes or to enhance total return. Use of derivatives by the Fund may create investment leverage.
The Fund may invest in money market securities, including commercial paper.
The Fund may enter into repurchase agreement transactions. The Fund may at times have significant exposure to one or more industries or
sectors. The Fund may hold a portion of its assets in cash or cash equivalents. The Fund may purchase and sell securities on a when-issued,
delayed delivery, to-be-announced, or forward commitment basis, and may enter into dollar roll or reverse repurchase agreement transactions.
The Fund may invest in other investment companies, including
investment companies that are advised by the Fund’s investment adviser, subadviser, sub-subadviser, or its affiliates, or by unaffiliated
parties.
Barings or BIIL intends for the Fund’s portfolio
dollar-weighted average duration generally to match (within 10%) the average duration of the Bloomberg U.S. Aggregate Bond Index (as of
December 31, 2021, the average duration of the Index was 6.78 years). Duration measures the price sensitivity of a bond to changes
in interest rates. Duration is the dollar weighted average time to maturity of a bond utilizing the present value of all future cash flows.
Barings or BIIL selects the Fund’s investments based on its analysis
of opportunities and risks of various fixed income securities and market sectors. Currently, Barings or BIIL may consider the following
factors (which may change over time and in particular cases): the perceived potential for high income offered by different types of corporate
and government obligations (including mortgage-backed and other asset-backed securities); diversification among industries and issuers,
credit ratings, and sectors; and the relative values offered by different securities. Barings or BIIL may choose to sell securities with
deteriorating credit or limited upside potential compared to other securities.
The Fund expects that it will engage in active and frequent trading and
so will typically have a relatively high portfolio turnover rate.
Principal
Risks
The following are the Principal Risks of the Fund.
The value of your investment in the Fund could go down as well as up. You can
lose money by investing in the Fund. References in this section to the Fund’s subadviser may include any sub-subadvisers
as applicable. Certain risks relating to instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market
conditions, and other factors. You should read all of the risk information presented below carefully, because any one or more of these
risks may result in losses to the Fund.
Fixed Income Securities
Risk The values of fixed income securities typically will decline during periods of rising interest rates, and can also decline
in response to changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral assets, or changes in
market, economic, industry, political, regulatory, public health, and other conditions affecting a particular type of security or issuer
or fixed income securities generally. Certain events, such as market or economic developments, regulatory or government actions, natural
disasters, pandemics, terrorist attacks, war, and other geopolitical events can have a dramatic adverse effect on the debt market and
the overall liquidity of the market for fixed income securities. During those periods, the Fund may experience high levels of shareholder
redemptions, and may have to sell securities at times when the Fund would otherwise not do so, and potentially at
unfavorable prices. Certain securities may be difficult to value during
such periods. Fixed income securities are subject to interest rate risk (the risk that the value of a fixed income security will fall
when interest rates rise), extension risk (the risk that the average life of a security will be extended through a slowing of principal
payments), prepayment risk (the risk that a security will be prepaid and the Fund will be required to reinvest at a less favorable rate),
duration risk (the risk that longer-term securities may be more sensitive to interest rate changes), and credit risk.
Mortgage- and Asset-Backed
Securities Risk Investments in mortgage- and asset-backed securities subject the Fund to credit risk, interest rate risk,
extension risk, and prepayment risk, among other risks. Mortgage-backed and asset-backed securities not issued by a government agency
generally involve greater credit risk than securities issued by government agencies. Payment of principal and interest generally depends
on the cash flows generated by the underlying assets and the terms of the security. The types of mortgages (for example, residential or
commercial mortgages) underlying securities held by the Fund may differ and be affected differently by market factors. Investments that
receive only the interest portion or the principal portion of payments on the underlying assets may be highly volatile. Litigation with
respect to the representations and warranties given in connection with the issuance of mortgage-backed securities can be an important
consideration in investing in such securities, and the outcome of any such litigation could significantly impact the value of the Fund’s
mortgage-backed investments.
Bank Loans Risk Many
of the risks associated with bank loans are similar to the risks of investing in below investment grade debt securities. Changes in the
financial condition of the borrower or economic conditions or other circumstances may reduce the capacity of the borrower to make principal
and interest payments on such instruments and may lead to defaults. Senior secured bank loans are typically supported by collateral; however
the value of the collateral may be insufficient to cover the amount owed to the Fund, or the Fund may be prevented or delayed from realizing
on the collateral. Some loans may be unsecured; unsecured loans generally present a greater risk of loss to the Fund if the issuer defaults.
If the Fund relies on a third party to administer a loan, the Fund is subject to the risk that the third party will fail to perform its
obligations. In addition, if the Fund holds only a participation interest
in a loan made by a third party, the Fund’s receipt of payments on the loan will depend on the third party’s willingness and
ability to make those payments to the Fund. The settlement time for certain loans is longer than the settlement time for many other types
of investments, and the Fund may not receive the payment for a loan sold by it until well after the sale; that cash would be unavailable
for payment of redemption proceeds or for reinvestment. Interests in some bank loans may not be readily marketable and may be subject
to restrictions on resale. In some cases, negotiations involved in disposing of indebtedness may require weeks to complete. Consequently,
some indebtedness may be difficult or impossible to dispose of readily at what the Fund believes to be a fair price. Some loans may not
be considered “securities” for certain purposes under the federal securities laws, and purchasers, such as the Fund, therefore
may not be entitled to rely on the anti-fraud protections of the federal securities laws.
Credit
Risk Credit risk is the risk that an issuer, guarantor, or liquidity provider of a fixed income security held by the Fund
may be unable or unwilling, or may be perceived (whether by market participants, ratings agencies, pricing services or otherwise) as unable
or unwilling, to make timely principal and/or interest payments, or to otherwise honor its obligations. The Fund may also be exposed to
the credit risk of its counterparty to repurchase agreements, reverse repurchase agreements, swap transactions, and other derivatives
transactions, and to the counterparty’s ability or willingness to perform in accordance with the terms of the transaction. The value
of such transactions to the Fund will depend on the willingness and ability of the counterparty to perform its obligations, including
among other things the obligation to return collateral or margin to the Fund. If a counterparty becomes bankrupt or otherwise fails to
perform its obligations under a derivative contract due to financial difficulties, the Fund may experience significant delays in obtaining
any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. The Fund may obtain only a limited recovery
or may obtain no recovery in such circumstances.
Derivatives Risk Derivatives
can be highly volatile and involve risks different from, and potentially greater than, direct investments, including risks of imperfect
correlation between the value of
derivatives and underlying assets, counterparty default, potential losses that partially
or completely offset gains, and illiquidity. Derivatives can create investment leverage. Losses from derivatives can be substantially
greater than the derivatives’ original cost and can sometimes be unlimited. If the value of a derivative does not correlate well
with the particular market or asset class the derivative is designed to provide exposure to, the derivative may not have the effect or
benefit anticipated. Derivatives can also reduce the opportunity for gains or result in losses by offsetting positive returns in other
investments. Many derivatives are traded in the over-the-counter market and not on exchanges.
Foreign Investment Risk;
Emerging Markets Risk; Currency Risk Investments in securities of foreign issuers, securities of companies with significant
foreign exposure, and foreign currencies can involve additional risks relating to market, industry, political, regulatory, public health,
and other conditions. Political, social, diplomatic, and economic developments, U.S. and foreign government action such as the imposition
of currency or capital blockages, controls, or tariffs, economic and trade sanctions or embargoes, security suspensions, entering or exiting
trade or other intergovernmental agreements, or the expropriation or nationalization of assets in a particular country, can cause dramatic
declines in certain or all securities with exposure to that country and other countries. In the event of nationalization, expropriation,
or other confiscation, the Fund could lose its entire foreign investment in a particular country. There may be quotas or other limits
on the ability of the Fund (or clients of the Fund’s investment adviser or subadviser) to invest or maintain investments in securities
of issuers in certain countries. Enforcing legal rights can be more difficult, costly, and limited in certain foreign countries, and can
be particularly difficult against foreign governments. Because non-U.S. securities are normally denominated and traded in currencies other
than the U.S. dollar, the value of the Fund’s assets may be affected favorably or unfavorably by changes in currency exchange rates,
exchange control regulations, and restrictions or prohibitions on the repatriation of non-U.S. currencies. Income and gains with respect
to investments in certain countries may be subject to withholding and other taxes. There may be less information publicly available about
a non-U.S. company than about a U.S. company, and many non-U.S. companies are not subject to accounting, auditing, and
financial reporting standards, regulatory framework and practices comparable to those in the
U.S. The securities of some non-U.S. companies, especially those in emerging markets, are less liquid and at times more volatile than
securities of comparable U.S. companies. Emerging markets securities are subject to greater risks than securities issued in developed
foreign markets, including less liquidity, less stringent investor protection and disclosure standards, greater price volatility, higher
relative rates of inflation, greater political, economic, and social instability, greater custody and operational risks, and greater volatility
in currency exchange rates, and are more susceptible to environmental problems. Many emerging market countries are highly reliant on international
trade and exports, including the export of commodities. Their economies may be significantly impacted by fluctuations in commodity prices
and the global demand for certain commodities. In addition, many emerging market countries with less established health care systems have
experienced outbreaks of pandemics or contagious diseases from time to time. Frontier markets, a subset of emerging markets, generally
have smaller economies and less mature capital markets than emerging markets. As a result, the risks of investing in emerging market countries
are magnified in frontier market countries. Frontier markets are more susceptible to having abrupt changes in currency values, less mature
markets and settlement practices, and lower trading volumes that could lead to greater price volatility and illiquidity. Non-U.S. transaction
costs, such as brokerage commissions and custody costs, may be higher than in the United States. In addition, foreign markets can react
differently to market, economic, industry, political, regulatory, geopolitical, public health, and other conditions than the U.S. market.
Cash Position Risk If
the Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the
Fund may not achieve its investment objective.
Defaulted
and Distressed Securities Risk Because the issuer of such securities is in default and is likely to be in distressed financial
condition, repayment of defaulted securities and obligations of distressed issuers (including insolvent issuers or issuers in payment
or covenant default, in workout or restructuring, or in bankruptcy or insolvency proceedings) is uncertain. To the extent the Fund is
invested in distressed securities, its ability to achieve current income for its shareholders may be diminished.
Dollar Roll and Reverse Repurchase Agreement
Transaction Risk These transactions generally create leverage and subject the Fund to the credit risk of the counterparty.
Frequent Trading/Portfolio
Turnover Risk Portfolio turnover generally involves some expense to the Fund and may result in the realization of taxable
capital gains (including short-term gains). The trading costs and tax effects associated with portfolio turnover may adversely affect
the Fund’s performance.
Hedging Risk The
Fund’s attempts at hedging and taking long and short positions in currencies may not be successful and could cause the Fund to lose
money or fail to get the benefit of a gain on a hedged position. If expected changes to securities prices, interest rates, currency values,
and exchange rates, or the creditworthiness of an issuer are not accurately predicted, the Fund could be in a worse position than if it
had not entered into such transactions.
Inflation Risk The
value of assets or income from the Fund’s investments will be less in the future as inflation decreases the value of money. As inflation
increases, the value of the Fund’s assets can decline as can the value of the Fund’s distributions.
Leveraging Risk Instruments
and transactions, including derivatives, dollar roll, and reverse repurchase agreement transactions, that create leverage may cause the
value of an investment in the Fund to be more volatile, could result in larger losses than if they were not used, and tend to compound
the effects of other risks.
LIBOR Risk Certain
instruments in which the Fund may invest rely in some fashion upon the London-Interbank Offered Rate (“LIBOR”). The United
Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced plans to phase out the use of LIBOR by the end of 2021.
There remains uncertainty regarding the future utilization of LIBOR, including an extension by the ICE Benchmark Administration to postpone
certain aspects of the LIBOR transition to June 2023, and the nature of any replacement rate, and any potential effects of the transition
away from LIBOR on the Fund or on certain instruments in which the Fund invests are not known. The transition process may involve, among
other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR. Uncertainty and volatility
arising from the
transition may result in a reduction in the value of certain LIBOR-based instruments held
by the Fund or reduce the effectiveness of related transactions such as hedges. Any such effects of the transition away from LIBOR, as
well as other unforeseen effects, could result in losses to the Fund.
Liquidity Risk Certain
securities may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price,
and the Fund may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid
investments at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject
to restrictions on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time.
The Fund may not receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable
market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline significantly in response
to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as investor perceptions
of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage, industry problems,
and reduced demand for goods or services.
Reinvestment
Risk Income from the Fund’s portfolio will decline if and when the Fund invests the proceeds from matured, traded,
or called debt obligations at market interest rates that are below the portfolio’s current earnings rate. A decline in income could
affect the Fund’s overall return.
Repurchase Agreement
Risk These transactions must be fully collateralized, but involve credit risk to a Fund if the other party should default
on its obligation and the Fund is delayed or prevented from recovering the collateral.
Restricted Securities
Risk The Fund may hold securities that are restricted as to resale under the
U.S. federal securities laws, such as securities in certain privately held companies.
Such securities may be highly illiquid and their values may experience significant volatility. Restricted securities may be difficult
to value.
Risk
of Investment in Other Funds or Pools The Fund is indirectly exposed to all of the risks of the underlying funds, including
ETFs, in which it invests, including the risk that the underlying funds will not perform as expected. ETFs are subject to additional risks,
including secondary market trading risks and the risk that an ETF’s shares may trade above or below net asset value. The Fund indirectly
pays a portion of the expenses incurred by the underlying funds.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
U.S. Government Securities
Risk Obligations of certain U.S. Government agencies and instrumentalities are not backed by the full faith and credit of
the U.S. Government, and there can be no assurance that the U.S. Government would provide financial support to such agencies and instrumentalities.
Valuation Risk The
Fund is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are
fair valued.
When-Issued, Delayed
Delivery, TBA, and Forward Commitment Transaction Risk These transactions may create leverage and involve a risk of loss
if the value of the securities declines prior to settlement.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class R5 shares. The table shows how the Fund’s average annual returns for
1, 5, and 10 years compare with those of a broad measure of market performance. Performance for Class R4 shares of the Fund for periods
prior to its inception date (04/01/14) is based on the performance of Class R5 shares, adjusted for Class R4 expenses. Performance
for Class A shares of
the
Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Class R5 Shares
|
Highest Quarter:
|
|
|
2Q ’20,
|
|
|
|
|
6.65 |
% |
|
Lowest Quarter:
|
|
|
1Q ’20,
|
|
|
–3.26%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After- tax returns are not relevant to investors who hold
Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-
tax returns are shown for Class R5 only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class R5
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
0.64 |
% |
|
|
|
|
4.48 |
% |
|
|
|
|
3.47 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
-0.63 |
% |
|
|
|
|
2.93 |
% |
|
|
|
|
1.98 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares |
|
|
|
|
|
0.64 |
% |
|
|
|
|
2.81 |
% |
|
|
|
|
2.04 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
0.67 |
% |
|
|
|
|
4.57 |
% |
|
|
|
|
3.59 |
% |
Service
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
0.43 |
% |
|
|
|
|
4.35 |
% |
|
|
|
|
3.37 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
0.46 |
% |
|
|
|
|
4.28 |
% |
|
|
|
|
3.28 |
% |
Class A
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
-4.10 |
% |
|
|
|
|
3.11 |
% |
|
|
|
|
2.58 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
0.27 |
% |
|
|
|
|
4.12 |
% |
|
|
|
|
3.12 |
% |
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
0.02 |
% |
|
|
|
|
3.86 |
% |
|
|
|
|
2.84 |
% |
Bloomberg
U.S. Aggregate Bond Index (reflects
no deduction for fees, expenses, or taxes)
|
|
|
|
|
|
-1.54 |
% |
|
|
|
|
3.57 |
% |
|
|
|
|
2.90 |
% |
MANAGEMENT
Investment Adviser: MML Investment
Advisers, LLC (“MML Advisers”)
Subadviser(s): Barings LLC (“Barings”)
Sub-subadviser(s):
Baring International Investment Limited (“BIIL”)
Portfolio Manager(s):
Yulia Alekseeva, CFA is
a Managing Director, the Head of Securitized Credit Research, and a portfolio manager for Barings’ Investment Grade Fixed Income
Group. She has managed the Fund since December 2020.
Stephen Ehrenberg, CFA is
a Managing Director and portfolio manager for Barings’ Investment Grade Fixed Income Group. He has managed the Fund since February
2019.
Charles
Sanford is a Managing Director and the Head of, and a portfolio manager for, Barings’ Investment Grade Fixed Income
Group. He has managed the Fund since December 2020. He previously managed the Fund from June 2006 to November 2017.
Douglas
Trevallion, II, CFA is a Managing Director, the Head of Global Securitized and
Liquid Products, and a portfolio manager for Barings’ Investment
Grade Fixed Income Group. He has managed the Fund since October 2008.
PURCHASE AND SALE
OF FUND SHARES
Shares of the Fund are generally available to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request, telephone, or internet
(available to certain customers).
TAX INFORMATION
The Fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other financial intermediary,
the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates, or others for the sale of
Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict of interest by influencing
the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your intermediary to obtain
more information about the compensation it may receive in connection with your investment.
MassMutual
Diversified Bond Fund (formerly known as MassMutual Premier Diversified Bond Fund)
INVESTMENT
OBJECTIVE
This Fund seeks a superior total rate of return by investing in fixed income
instruments.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you
may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A shares,
you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
4.25%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Admini- strative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
0.37%
|
|
|
0.37%
|
|
|
0.37%
|
|
|
0.37%
|
|
|
0.37%
|
|
|
0.37%
|
|
|
0.37%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.15%
|
|
|
0.25%
|
|
|
0.35%
|
|
|
0.45%
|
|
|
0.45%
|
|
|
0.35%
|
|
|
0.35%
|
|
Total Annual Fund Operating Expenses
|
|
|
0.52%
|
|
|
0.62%
|
|
|
0.72%
|
|
|
0.82%
|
|
|
1.07%
|
|
|
0.97%
|
|
|
1.22%
|
|
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in each share class of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial
sales charge. The example also assumes that your investment earns a 5% return each year and that the Fund’s operating expenses are
exactly as
described in the preceding table. Although your actual costs may be higher or lower, based
on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
53 |
|
|
|
|
$ |
167 |
|
|
|
|
$ |
291 |
|
|
|
|
$ |
653 |
|
|
Class R5 |
|
|
|
$ |
63 |
|
|
|
|
$ |
199 |
|
|
|
|
$ |
346 |
|
|
|
|
$ |
774 |
|
|
Service Class |
|
|
|
$ |
74 |
|
|
|
|
$ |
230 |
|
|
|
|
$ |
401 |
|
|
|
|
$ |
894 |
|
|
Administrative Class |
|
|
|
$ |
84 |
|
|
|
|
$ |
262 |
|
|
|
|
$ |
455 |
|
|
|
|
$ |
1,014 |
|
|
Class A |
|
|
|
$ |
529 |
|
|
|
|
$ |
751 |
|
|
|
|
$ |
990 |
|
|
|
|
$ |
1,675 |
|
|
Class R4 |
|
|
|
$ |
99 |
|
|
|
|
$ |
309 |
|
|
|
|
$ |
536 |
|
|
|
|
$ |
1,190 |
|
|
Class R3 |
|
|
|
$ |
124 |
|
|
|
|
$ |
387 |
|
|
|
|
$ |
670 |
|
|
|
|
$ |
1,477 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 192%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
Under normal circumstances, the Fund invests at least 80% of its net assets
(plus the amount of any borrowings for investment purposes) in fixed income securities. These typically include: U.S. dollar-denominated
corporate obligations and bank loans, securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, U.S.
and foreign issuer dollar-denominated bonds including, but not limited to, corporate obligations, government and agency issues, private
placement bonds, securities subject to resale pursuant to Rule 144A, convertible bonds, and mortgage-backed and other asset-backed
securities, including collateralized bond and loan obligations.
The Fund may invest up to 25% of its total assets in securities that are not
denominated in U.S. dollars including, but not limited to, corporate obligations, government and agency issues, private placement bonds,
convertible bonds, and mortgage-backed and other asset-backed securities, including collateralized bond and loan obligations.
The Fund may also invest in non-dollar denominated high yield bonds, including bank loans,
and may invest in securities subject to legal restrictions on resale, some of which may be subject to resale pursuant to Rule 144A.
The Fund may, but will not necessarily, engage in foreign currency futures
and forward contracts, including derivatives thereof, for hedging purposes or to gain market exposure. In pursuing its investment objective,
the Fund may (but is not obligated to) use a wide variety of exchange-traded and over-the-counter derivatives, including, but not limited
to, futures contracts (for hedging purposes, to adjust various portfolio characteristics, including the duration (interest rate volatility)
of the Fund’s portfolio, or as a substitute for direct investments); interest rate swaps (for hedging purposes or as a substitute
for direct investments); total return swaps (for hedging purposes or to gain exposure to securities or markets in which it might not be
able to invest directly); and credit default swaps (for hedging purposes or as a substitute for direct investments). The Fund may invest
in common stocks, exchange-traded funds (“ETFs”), or other equity securities and derivatives thereof for hedging purposes
or to enhance total return. Use of derivatives by the Fund may create investment leverage.
The Fund may invest in money market securities, including commercial paper.
The Fund may enter into repurchase agreement transactions. The Fund may at times have significant exposure to one or more industries or
sectors. The Fund may hold a portion of its assets in cash or cash equivalents. The Fund may purchase and sell securities on a when-issued,
delayed delivery, to-be-announced, or forward commitment basis, and may enter into dollar roll or reverse repurchase agreement transactions.
The Fund may invest in (i) securities denominated in currencies of
emerging market countries, (ii) fixed income securities or debt instruments issued by emerging market entities or sovereign nations and/or
(iii) debt instruments denominated in or based on the currencies, interest rates, or issues of emerging market countries. Emerging market
countries are defined to include any country that did not become a member of the Organization for Economic Cooperation and Development
(O.E.C.D.) prior to 1975 and Turkey.
The Fund may invest in other investment companies,
including investment companies that are advised by the Fund’s investment adviser, subadviser, sub-subadviser, or its affiliates,
or by unaffiliated parties.
The dollar-weighted average credit quality of the Fund is generally
not expected to be less than BBB-/Baa3. The Fund may, however, invest up to 25% of its net assets in below investment grade debt securities
(“junk” or “high yield” bonds), including securities in default, and including bank loans, or their unrated equivalent,
as determined by the Fund’s subadviser, Barings LLC (“Barings”), or sub-subadviser,
Baring International Investment Limited (“BIIL”). Investments in such securities will
vary based upon Barings’ or BIIL’s assessment of market conditions and the amount of additional yield offered in relation
to the risk of the instruments. In the event that a security is downgraded after its purchase by the Fund, the Fund may continue to hold
the security if Barings or BIIL considers that doing so would be consistent with the Fund’s investment objective. Barings or BIIL
expects for the Fund’s portfolio dollar-weighted average duration generally to match (plus or minus 2.5 years) the average
duration of the Bloomberg U.S. Aggregate Bond Index (as of December 31, 2021, the average duration of the Index was 6.78 years).
Duration measures the price sensitivity of a bond to changes in interest rates. Duration is the dollar weighted average time to maturity
of a bond utilizing the present value of all future cash flows.
Barings or BIIL selects the Fund’s investments
based on its analysis of opportunities and risks of various fixed income securities and market sectors. Currently, Barings or BIIL may
consider the following factors (which may change over time and in particular cases): the perceived potential for high income offered by
different types of corporate and government obligations (including mortgage-backed and other asset-backed securities); diversification
among industries and issuers, credit ratings, and sectors; and the relative values offered by different securities. Barings or BIIL may
choose to sell securities with deteriorating credit or limited upside potential compared to other securities.
The Fund expects that it will engage in active and frequent trading and so
will typically have a relatively high portfolio turnover rate.
Principal
Risks
The following are the Principal Risks of the Fund. The
value of your investment in the Fund could go down as well as up. You can lose
money by investing in the Fund. References in this section to the Fund’s subadviser may include any sub-subadvisers
as applicable. Certain risks relating
to instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market
conditions, and other factors. You should read all of the risk information presented below carefully, because any one or more of these
risks may result in losses to the Fund.
Fixed
Income Securities Risk The values of fixed income securities typically will decline during periods of rising interest rates,
and can also decline in response to changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral
assets, or changes in market, economic, industry, political, regulatory, public health, and other conditions affecting a particular type
of security or issuer or fixed income securities generally. Certain events, such as market or economic developments, regulatory or government
actions, natural disasters, pandemics, terrorist attacks, war, and other geopolitical events can have a dramatic adverse effect on the
debt market and the overall liquidity of the market for fixed income securities. During those periods, the Fund may experience high levels
of shareholder redemptions, and may have to sell securities at times when the Fund would otherwise not do so, and potentially at unfavorable
prices. Certain securities may be difficult to value during such periods. Fixed income securities are subject to interest rate risk (the
risk that the value of a fixed income security will fall when interest rates rise), extension risk (the risk that the average life of
a security will be extended through a slowing of principal payments), prepayment risk (the risk that a security will be prepaid and the
Fund will be required to reinvest at a less favorable rate), duration risk (the risk that longer-term securities may be more sensitive
to interest rate changes), and credit risk.
Mortgage- and Asset-Backed
Securities Risk Investments in mortgage- and asset-backed securities subject the Fund to credit risk, interest rate risk,
extension risk, and prepayment risk, among other risks. Mortgage-backed and asset-backed securities not issued by a government agency
generally involve greater credit risk than securities issued by government agencies. Payment of principal and interest generally depends
on the cash flows generated by the underlying assets and the terms of the security. The types of mortgages (for example, residential or
commercial mortgages) underlying securities held by the Fund may differ and be affected differently by market
factors. Investments that receive only the interest portion or the principal portion of
payments on the underlying assets may be highly volatile. Litigation with respect to the representations and warranties given in connection
with the issuance of mortgage-backed securities can be an important consideration in investing in such securities, and the outcome of
any such litigation could significantly impact the value of the Fund’s mortgage-backed investments.
Bank
Loans Risk Many of the risks associated with bank loans are similar to the risks of investing in below investment grade debt
securities. Changes in the financial condition of the borrower or economic conditions or other circumstances may reduce the capacity of
the borrower to make principal and interest payments on such instruments and may lead to defaults. Senior secured bank loans are typically
supported by collateral; however the value of the collateral may be insufficient to cover the amount owed to the Fund, or the Fund may
be prevented or delayed from realizing on the collateral. Some loans may be unsecured; unsecured loans generally present a greater risk
of loss to the Fund if the issuer defaults. If the Fund relies on a third party to administer a loan, the Fund is subject to the risk
that the third party will fail to perform its obligations. In addition, if the Fund holds only a participation interest in a loan made
by a third party, the Fund’s receipt of payments on the loan will depend on the third party’s willingness and ability to make
those payments to the Fund. The settlement time for certain loans is longer than the settlement time for many other types of investments,
and the Fund may not receive the payment for a loan sold by it until well after the sale; that cash would be unavailable for payment of
redemption proceeds or for reinvestment. Interests in some bank loans may not be readily marketable and may be subject to restrictions
on resale. In some cases, negotiations involved in disposing of indebtedness may require weeks to complete. Consequently, some indebtedness
may be difficult or impossible to dispose of readily at what the Fund believes to be a fair price. Some loans may not be considered “securities”
for certain purposes under the federal securities laws, and purchasers, such as the Fund, therefore may not be entitled to rely on the
anti-fraud protections of the federal securities laws.
Below Investment Grade
Debt Securities Risk Below investment grade debt securities, commonly known as “junk” or “high yield”
bonds, have speculative characteristics and involve greater volatility of price
and yield, greater risk of loss of principal and interest, and generally reflect a greater
possibility of an adverse change in financial condition that could affect an issuer’s ability to honor its obligations.
Credit
Risk Credit risk is the risk that an issuer, guarantor, or liquidity provider of a fixed income security held by the Fund
may be unable or unwilling, or may be perceived (whether by market participants, ratings agencies, pricing services or otherwise) as unable
or unwilling, to make timely principal and/or interest payments, or to otherwise honor its obligations. The Fund may also be exposed to
the credit risk of its counterparty to repurchase agreements, reverse repurchase agreements, swap transactions, and other derivatives
transactions, and to the counterparty’s ability or willingness to perform in accordance with the terms of the transaction. The value
of such transactions to the Fund will depend on the willingness and ability of the counterparty to perform its obligations, including
among other things the obligation to return collateral or margin to the Fund. If a counterparty becomes bankrupt or otherwise fails to
perform its obligations under a derivative contract due to financial difficulties, the Fund may experience significant delays in obtaining
any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. The Fund may obtain only a limited recovery
or may obtain no recovery in such circumstances.
Derivatives Risk Derivatives
can be highly volatile and involve risks different from, and potentially greater than, direct investments, including risks of imperfect
correlation between the value of derivatives and underlying assets, counterparty default, potential losses that partially or completely
offset gains, and illiquidity. Derivatives can create investment leverage. Losses from derivatives can be substantially greater than the
derivatives’ original cost and can sometimes be unlimited. If the value of a derivative does not correlate well with the particular
market or asset class the derivative is designed to provide exposure to, the derivative may not have the effect or benefit anticipated.
Derivatives can also reduce the opportunity for gains or result in losses by offsetting positive returns in other investments. Many derivatives
are traded in the over-the-counter market and not on exchanges.
Foreign Investment Risk;
Emerging Markets Risk; Currency Risk Investments in securities of foreign issuers, securities of companies with significant
foreign exposure, and foreign currencies can involve additional risks relating to market,
industry, political, regulatory, public health, and other conditions. Political, social, diplomatic, and economic developments, U.S. and
foreign government action such as the imposition of currency or capital blockages, controls, or tariffs, economic and trade sanctions
or embargoes, security suspensions, entering or exiting trade or other intergovernmental agreements, or the expropriation or nationalization
of assets in a particular country, can cause dramatic declines in certain or all securities with exposure to that country and other countries.
In the event of nationalization, expropriation, or other confiscation, the Fund could lose its entire foreign investment in a particular
country. There may be quotas or other limits on the ability of the Fund (or clients of the Fund’s investment adviser or subadviser)
to invest or maintain investments in securities of issuers in certain countries. Enforcing legal rights can be more difficult, costly,
and limited in certain foreign countries, and can be particularly difficult against foreign governments. Because non-U.S. securities are
normally denominated and traded in currencies other than the U.S. dollar, the value of the Fund’s assets may be affected favorably
or unfavorably by changes in currency exchange rates, exchange control regulations, and restrictions or prohibitions on the repatriation
of non-U.S. currencies. Income and gains with respect to investments in certain countries may be subject to withholding and other taxes.
There may be less information publicly available about a non-U.S. company than about a U.S. company, and many non-U.S. companies are not
subject to accounting, auditing, and financial reporting standards, regulatory framework and practices comparable to those in the U.S.
The securities of some non-U.S. companies, especially those in emerging markets, are less liquid and at times more volatile than securities
of comparable U.S. companies. Emerging markets securities are subject to greater risks than securities issued in developed foreign markets,
including less liquidity, less stringent investor protection and disclosure standards, greater price volatility, higher relative rates
of inflation, greater political, economic, and social instability, greater custody and operational risks, and greater volatility in currency
exchange rates, and are more susceptible to environmental problems. Many emerging market countries are highly reliant on international
trade and exports, including the export of commodities. Their economies may be
significantly impacted by fluctuations in commodity prices and the global demand for certain
commodities. In addition, many emerging market countries with less established health care systems have experienced outbreaks of pandemics
or contagious diseases from time to time. Frontier markets, a subset of emerging markets, generally have smaller economies and less mature
capital markets than emerging markets. As a result, the risks of investing in emerging market countries are magnified in frontier market
countries. Frontier markets are more susceptible to having abrupt changes in currency values, less mature markets and settlement practices,
and lower trading volumes that could lead to greater price volatility and illiquidity. Non-U.S. transaction costs, such as brokerage commissions
and custody costs, may be higher than in the United States. In addition, foreign markets can react differently to market, economic, industry,
political, regulatory, geopolitical, public health, and other conditions than the U.S. market.
Cash Position Risk If
the Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the
Fund may not achieve its investment objective.
Convertible Securities
Risk Convertible securities are subject to the risks of both debt instruments and equity securities. The price of a convertible
security may change in response to changes in price of the underlying equity security, the credit quality of the issuer, and interest
rates. In general, the values of convertible securities tend to decline as interest rates rise and to rise when interest rates fall. A
convertible security generally has less potential for gain or loss than the underlying equity security.
Defaulted
and Distressed Securities Risk Because the issuer of such securities is in default and is likely to be in distressed financial
condition, repayment of defaulted securities and obligations of distressed issuers (including insolvent issuers or issuers in payment
or covenant default, in workout or restructuring, or in bankruptcy or insolvency proceedings) is uncertain. To the extent the Fund is
invested in distressed securities, its ability to achieve current income for its shareholders may be diminished.
Dollar Roll and Reverse
Repurchase Agreement Transaction Risk These transactions generally create leverage and subject the Fund to the credit risk
of the counterparty.
Frequent Trading/Portfolio
Turnover Risk Portfolio turnover generally involves some expense to the
Fund and may result in the realization of taxable capital gains (including short-term gains).
The trading costs and tax effects associated with portfolio turnover may adversely affect the Fund’s performance.
Hedging Risk The
Fund’s attempts at hedging and taking long and short positions in currencies may not be successful and could cause the Fund to lose
money or fail to get the benefit of a gain on a hedged position. If expected changes to securities prices, interest rates, currency values,
and exchange rates, or the creditworthiness of an issuer are not accurately predicted, the Fund could be in a worse position than if it
had not entered into such transactions.
Inflation Risk The
value of assets or income from the Fund’s investments will be less in the future as inflation decreases the value of money. As inflation
increases, the value of the Fund’s assets can decline as can the value of the Fund’s distributions.
Leveraging Risk Instruments
and transactions, including derivatives, dollar roll, and reverse repurchase agreement transactions, that create leverage may cause the
value of an investment in the Fund to be more volatile, could result in larger losses than if they were not used, and tend to compound
the effects of other risks.
LIBOR Risk Certain
instruments in which the Fund may invest rely in some fashion upon the London-Interbank Offered Rate (“LIBOR”). The United
Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced plans to phase out the use of LIBOR by the end of 2021.
There remains uncertainty regarding the future utilization of LIBOR, including an extension by the ICE Benchmark Administration to postpone
certain aspects of the LIBOR transition to June 2023, and the nature of any replacement rate, and any potential effects of the transition
away from LIBOR on the Fund or on certain instruments in which the Fund invests are not known. The transition process may involve, among
other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR. Uncertainty and volatility
arising from the transition may result in a reduction in the value of certain LIBOR-based instruments held by the Fund or reduce the effectiveness
of related transactions such as hedges. Any such effects of the transition away from LIBOR, as well as other unforeseen effects, could
result in losses to the Fund.
Liquidity Risk Certain securities
may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price, and the Fund
may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid investments
at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject to restrictions
on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time. The Fund may not
receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable
market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline significantly in response
to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as investor perceptions
of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage, industry problems,
and reduced demand for goods or services.
Reinvestment
Risk Income from the Fund’s portfolio will decline if and when the Fund invests the proceeds from matured, traded,
or called debt obligations at market interest rates that are below the portfolio’s current earnings rate. A decline in income could
affect the Fund’s overall return.
Repurchase Agreement
Risk These transactions must be fully collateralized, but involve credit risk to a Fund if the other party should default
on its obligation and the Fund is delayed or prevented from recovering the collateral.
Restricted Securities
Risk The Fund may hold securities that are restricted as to resale under the U.S. federal securities laws, such as securities
in certain privately held companies. Such securities may be highly illiquid and their values may experience significant volatility. Restricted
securities may be difficult to value.
Risk of Investment in
Other Funds or Pools The Fund is indirectly exposed to all of the risks of the
underlying funds, including ETFs, in which it invests, including the
risk that the underlying funds will not perform as expected. ETFs are subject to additional risks, including secondary market trading
risks and the risk that an ETF’s shares may trade above or below net asset value. The Fund indirectly pays a portion of the expenses
incurred by the underlying funds.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
Sovereign Debt Obligations
Risk Investments in debt securities issued by governments or by government agencies and instrumentalities involve the risk
that the governmental entities responsible for repayment may be unable or unwilling to pay interest and repay principal when due. Many
sovereign debt obligations may be rated below investment grade (“junk” or “high yield” bonds). Any restructuring
of a sovereign debt obligation held by the Fund will likely have a significant adverse effect on the value of the obligation. In the event
of default of sovereign debt, the Fund may be unable to pursue legal action against the sovereign issuer or to realize on collateral securing
the debt.
U.S. Government Securities
Risk Obligations of certain U.S. Government agencies and instrumentalities are not backed by the full faith and credit of
the U.S. Government, and there can be no assurance that the U.S. Government would provide financial support to such agencies and instrumentalities.
Valuation Risk The
Fund is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are
fair valued.
When-Issued, Delayed
Delivery, TBA, and Forward Commitment Transaction Risk These transactions may create leverage and involve a risk of loss
if the value of the securities declines prior to settlement.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class R5 shares. The table shows how the Fund’s average annual returns for
1, 5, and 10 years compare with those of a broad measure of market performance. Performance for Class R4 and Class R3 shares of the Fund
for periods prior to their inception date (04/01/14) is based on the performance of Class R5 shares, adjusted to reflect Class R4 and
Class R3 expenses, respectively. Performance for Class
A shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Class R5 Shares
|
Highest Quarter:
|
|
|
2Q ’20,
|
|
|
|
|
7.22 |
% |
|
Lowest Quarter:
|
|
|
1Q ’20,
|
|
|
–5.44%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold
Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Class R5 only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class R5
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
2.06 |
% |
|
|
|
|
4.93 |
% |
|
|
|
|
4.09 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
0.57 |
% |
|
|
|
|
3.18 |
% |
|
|
|
|
2.53 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares |
|
|
|
|
|
1.46 |
% |
|
|
|
|
3.09 |
% |
|
|
|
|
2.52 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
2.16 |
% |
|
|
|
|
5.01 |
% |
|
|
|
|
4.34 |
% |
Service
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
1.85 |
% |
|
|
|
|
4.80 |
% |
|
|
|
|
3.99 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
1.78 |
% |
|
|
|
|
4.70 |
% |
|
|
|
|
3.90 |
% |
Class A
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
-2.80 |
% |
|
|
|
|
3.54 |
% |
|
|
|
|
3.19 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
1.70 |
% |
|
|
|
|
4.57 |
% |
|
|
|
|
3.74 |
% |
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
1.53 |
% |
|
|
|
|
4.31 |
% |
|
|
|
|
3.48 |
% |
Bloomberg
U.S. Aggregate Bond Index (reflects
no deduction for fees, expenses, or taxes)
|
|
|
|
|
|
-1.54 |
% |
|
|
|
|
3.57 |
% |
|
|
|
|
2.90 |
% |
MANAGEMENT
Investment Adviser: MML Investment
Advisers, LLC (“MML Advisers”)
Subadviser(s): Barings LLC (“Barings”)
Sub-subadviser(s):
Baring International Investment Limited (“BIIL”)
Portfolio Manager(s):
Yulia Alekseeva, CFA is
a Managing Director, the Head of Securitized Credit Research, and a portfolio manager for Barings’ Investment Grade Fixed Income
Group. She has managed the Fund since December 2020.
Stephen Ehrenberg, CFA is
a Managing Director and portfolio manager for Barings’ Investment Grade Fixed Income Group. He has managed the Fund since November
2017.
Charles
Sanford is a Managing Director and the Head of, and a portfolio manager for, Barings’ Investment Grade Fixed Income
Group. He has managed the Fund since December 2020. He previously managed the Fund from June 2006 to November 2017.
Douglas
Trevallion, II, CFA is a Managing Director, the Head of Global Securitized and
Liquid Products, and a portfolio manager for Barings’ Investment
Grade Fixed Income Group. He has managed the Fund since June 2018.
PURCHASE AND SALE
OF FUND SHARES
Shares of the Fund are generally available to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request, telephone, or internet
(available to certain customers).
TAX INFORMATION
The Fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS AND
OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other financial intermediary,
the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates, or others for the sale of
Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict of interest by influencing
the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your intermediary to obtain
more information about the compensation it may receive in connection with your investment.
MassMutual
Balanced Fund (formerly known as MassMutual Premier Balanced Fund)
INVESTMENT
OBJECTIVE
The Fund seeks a high total return.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you
may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A shares,
you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Admini- strative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
5.50%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Admini- strative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
0.48%
|
|
|
0.48%
|
|
|
0.48%
|
|
|
0.48%
|
|
|
0.48%
|
|
|
0.48%
|
|
|
0.48%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.21%
|
|
|
0.31%
|
|
|
0.41%
|
|
|
0.51%
|
|
|
0.51%
|
|
|
0.41%
|
|
|
0.41%
|
|
Total Annual Fund Operating Expenses
|
|
|
0.69%
|
|
|
0.79%
|
|
|
0.89%
|
|
|
0.99%
|
|
|
1.24%
|
|
|
1.14%
|
|
|
1.39%
|
|
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in each share class of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial
sales charge. The example also assumes that your investment earns a 5% return each year and that the Fund’s operating expenses are
exactly as described in the preceding table. Although your
actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
70 |
|
|
|
|
$ |
221 |
|
|
|
|
$ |
384 |
|
|
|
|
$ |
859 |
|
|
Class R5 |
|
|
|
$ |
81 |
|
|
|
|
$ |
252 |
|
|
|
|
$ |
439 |
|
|
|
|
$ |
978 |
|
|
Service Class |
|
|
|
$ |
91 |
|
|
|
|
$ |
284 |
|
|
|
|
$ |
493 |
|
|
|
|
$ |
1,096 |
|
|
Administrative Class |
|
|
|
$ |
101 |
|
|
|
|
$ |
315 |
|
|
|
|
$ |
547 |
|
|
|
|
$ |
1,213 |
|
|
Class A |
|
|
|
$ |
669 |
|
|
|
|
$ |
922 |
|
|
|
|
$ |
1,194 |
|
|
|
|
$ |
1,967 |
|
|
Class R4 |
|
|
|
$ |
116 |
|
|
|
|
$ |
362 |
|
|
|
|
$ |
628 |
|
|
|
|
$ |
1,386 |
|
|
Class R3 |
|
|
|
$ |
142 |
|
|
|
|
$ |
440 |
|
|
|
|
$ |
761 |
|
|
|
|
$ |
1,669 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 343%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
The Fund seeks its investment objective by investing
across different asset classes (U.S. equity securities and fixed income securities) each represented by a different segment of the Fund’s
portfolio. Under normal market conditions, the Fund’s subadviser, Invesco Advisers, Inc.,
and sub-subadviser, Invesco Capital Management LLC (together with Invesco Advisers, Inc., “Invesco”),
expect that 55%-75% of the Fund’s net assets will be invested in U.S. equity securities (the “U.S. Equity Segment”)
and 25%-45% of the Fund’s net assets will be invested in fixed income securities (the “Bond Segment”) that meet certain
environmental, social, and governance (“ESG”) criteria as described below. The Fund will target a long term strategic allocation
of 65% to the U.S. Equity Segment and 35% to the Bond Segment. Invesco will periodically rebalance the portfolio back to these strategic
weights. The Fund may at times have significant exposure to one or more industries or sectors. The Fund may purchase and sell securities
on a when-issued, delayed delivery, to-be-announced, or forward commitment basis. The Fund may hold a portion of its assets in cash or
cash equivalents.
Using an indexing strategy, Invesco generally will invest at least
80% of the Fund’s assets allocated to the U.S. Equity Segment in the equity securities of companies included within the Invesco
US Large Cap Total Balanced Multi-Factor ESG Index* (the “Invesco
Index”). Invesco Indexing LLC, an affiliate of Invesco, serves as the index provider for the Invesco Index.
The Invesco Index employs a factor-based model and is
designed to select equity securities of U.S. large-capitalization companies that meet high ESG standards. The Invesco Index includes constituents
of the Invesco Indexing Investable Universe (the “Investable Universe”) that are designated as U.S. large-capitalization securities
in accordance with the Investable Universe methodology. Each eligible security is categorized by sector and assigned a score using a system
established by Sustainalytics US Inc. (“Sustainalytics”), a third-party research
*
The
“Invesco US Large Cap Total Balanced Multi-Factor ESG Index” and “Invesco Indexing” are the property of Invesco
Indexing LLC and have been licensed for use by Invesco Capital Management LLC (“ICM”).
The
shares (“Shares”) of the Fund (the “Product”) are not sponsored, endorsed, sold or promoted by Invesco Indexing
LLC (“Licensor”). Licensor makes no representation or warranty, express or implied, to the owners of the Shares or any member
of the public regarding the advisability of investing in securities generally or in the Shares particularly or the ability of the Invesco
US Large Cap Total Balanced Multi-Factor ESG Index to track general stock market performance. Licensor is an affiliate of ICM and Invesco
Advisers, Inc. (“Invesco Advisers”) and its relationship to ICM and Invesco Advisers includes the licensing of certain trademarks
and trade names of Licensor and of the Invesco US Large Cap Total Balanced Multi-Factor ESG Index which is determined, composed and calculated
by Licensor without regard to ICM, Invesco Advisers, the Product or the Shares. Licensor has no obligation to take the needs of the Licensee
or the owners of the Shares into consideration in determining, composing or calculating the Invesco US Large Cap Total Balanced Multi-Factor
ESG Index. Licensor is not responsible for and has not participated in any determination or calculation made with respect to issuance
or redemption of the Shares. Licensor has no obligation or liability in connection with the administration, marketing or trading of the
Shares.
Licensor
does not guarantee the accuracy and/or the completeness of the Invesco US Large Cap Total Balanced Multi-Factor ESG Index and/or any data
included therein. Licensor makes no warranty, express or implied, as to results to be obtained by ICM, Invesco Advisers, the Product or
any owner of the Shares, or any other person or entity from the use of the Invesco US Large Cap Total Balanced Multi-Factor ESG Index
or any data included therein in connection with the rights licensed hereunder or for any other use.
Licensor
makes no express or implied warranties, and hereby expressly disclaims all warranties of merchantability or fitness for a particular purpose
with respect to the Invesco US Large Cap Total Balanced Multi-Factor ESG Index or any data included therein. Without limiting any of the
foregoing, in no event shall Licensor have any liability for any special, punitive, indirect, or consequential damages (including lost
profits), even if notified of the possibility of such damages.
provider that measures the strength of each pillar of ESG practices
(the “ESG Score”). The top 75% of companies based on their ESG Scores within each sector are selected, while those in the
tobacco, aerospace, coal, and pipeline industries, those in the bottom 10% by overall ESG Score, or those with a detrimental score for
controversies, are excluded from the Invesco Index. The remaining securities are assigned a factor-based model score (the “Model
Score”), which is computed by equal weighting the following individual factor scores:
Quality. A company’s quality factor score is based
on an equally-weighted composite of three metrics: management quality (measured by the average quarterly percentage change in shares outstanding
over the previous three years), earnings quality (measured by dividing the most recent year’s operating cash flow by the most recent
year’s earnings), and operating quality (measured by dividing the most recent year’s aggregate gross income by the most recent
year’s average total assets).
Value. A company’s value factor
score is generally based on an equally-weighted composite of free cash flow yield, earnings yield, and book value of equity yield generally.
For banks the value score is based on earnings yield and book value of equity yield and for real estate companies it is based on earnings
yield, book value of equity yield, and funds from operations yield. Free cash flow, funds from operations, and earnings are measured over
the previous year while book value is based on the most recent financial statement.
Price Momentum. A company’s price momentum factor
score is based on the average monthly total return over the past nine months, excluding the most recent month, divided by the standard
error of those total returns.
Low Volatility. A company’s low volatility factor
score is based on the standard deviation of monthly total returns to a company’s stock price for the most recent 36-month period.
The Invesco Index constituents generally are weighted
based on their market capitalizations and Model Scores.These weights are adjusted to ensure that each constituent and the Invesco Index
as a whole satisfy certain constraints with respect to sector exposure, maximum security weights, and minimum security weights, as compared
to a float-adjusted, market-capitalization weighted benchmark comprised of all of the U.S. large-capitalization securities of the Investable
Universe.
The Invesco Index is rebalanced effective the third Friday in June
and December. In addition, Invesco Index maintenance is performed effective the third Friday in March and September, during which constituents
may be removed if they are no longer constituents of the Investable Universe, are within the tobacco, aerospace, coal, and pipeline industries,
are in the bottom 10% by ESG Score, or have a detrimental score for controversies. The U.S. Equity Segment is rebalanced and maintained
in accordance with the Invesco Index, meaning that it will buy and sell securities in response to changes in the Invesco Index.
Although the U.S. Equity Segment generally will invest in substantially all
of the securities comprising the Invesco Index in proportion to their weightings in the Invesco Index, under various circumstances it
may not be possible or practicable to purchase all of those securities in those same weightings. In those circumstances, the U.S. Equity
Segment may hold cash or purchase a sample of the securities in the Invesco Index. When it relies on a “sampling” methodology,
Invesco uses quantitative analysis to select securities from the Invesco Index universe to obtain a representative sample of securities
that has, overall, investment characteristics similar to the Invesco Index in terms of key risk factors, performance attributes, and other
characteristics such as industry weightings, market capitalization, return variability, earnings valuation, yield, and other financial
characteristics of securities. When employing a sampling methodology, Invesco bases the number of the holdings in the U.S. Equity Segment
on a number of factors, including asset size of the U.S. Equity Segment, and generally expects the U.S. Equity Segment to hold fewer than
the total number of securities in the Invesco Index. However, Invesco reserves the right to invest in as many securities as it believes
necessary to achieve the Fund’s investment objective. The U.S. Equity Segment may invest in common stocks, preferred stocks, exchange-traded
funds (“ETFs”), or other equity securities. The U.S. Equity Segment may use futures contracts, a type of derivative, to seek
performance that corresponds to the Invesco Index and/or to manage cash flows. Use of futures contracts by the U.S. Equity Segment may
create investment leverage.
Fixed income securities in which the Bond Segment invests primarily include
U.S. dollar-denominated debt securities that are rated investment grade at the time of purchase, meaning that they will be rated Baa3
or higher by Moody’s,
BBB- or higher by Standard & Poor’s or the equivalent by any nationally recognized
statistical rating organization (“NRSRO”). Debt securities in which the Bond Segment invests may include domestic and foreign
corporate debt obligations, domestic and foreign government debt obligations, including U.S. Government securities, mortgage-related securities,
asset-backed securities, and other debt obligations. The Bond Segment may also invest in unrated securities in which case Invesco may
internally assign ratings to certain of those securities, after assessing their credit quality, in investment grade categories similar
to those of NRSROs. There can be no assurance, nor is it intended, that Invesco’s credit analysis is consistent or comparable with
the credit analysis process used by an NRSRO. In the event that a security receives different ratings from different NRSROs, the Bond
Segment will treat the security as being rated in the highest rating category received from an NRSRO. The Bond Segment may invest in illiquid
or thinly traded securities. The Bond Segment may also invest in securities that are subject to resale restrictions such as those contained
in Rule 144A. The Bond Segment may invest up to 5% its assets in securities below investment grade (“junk” or “high
yield” bonds), including securities in default. In the event that a security is downgraded after its purchase by the Bond Segment,
the Bond Segment may continue to hold the security if Invesco considers that doing so would be consistent with the Fund’s investment
objective. The Bond Segment may also enter into dollar roll transactions.
The Bond Segment may invest a portion of its assets in foreign debt securities,
including securities issued by foreign governments or companies in both developed and emerging markets. The Bond Segment may not invest
more than 20% of its net assets in foreign debt securities.
The Bond Segment has no limitations on the range of
maturities of the debt securities in which it can invest and may hold securities with short-, medium-, or long-term maturities. The maturity
of a security differs from its effective duration, which attempts to measure the expected volatility of a security’s price to interest
rate changes. The Bond Segment may engage in treasury futures contracts in order to seek to enhance the Fund’s investment return
or to try to manage investment risks. Use of treasury futures contracts by the Bond Segment may create investment leverage.
Invesco selects investments for the Bond Segment based on its analysis of
opportunities and risks of various fixed income securities and market
sectors by focusing on business cycle analysis and relative values between corporate and
government sectors. The Bond Segment mainly seeks income earnings on its investments plus capital appreciation that may arise from decreases
in interest rates, from improving credit fundamentals for a particular sector or security, or from other investment techniques. Invesco
may sell securities that it believes no longer meet the above criteria.
Additionally, as part of the credit selection and portfolio construction
process, Invesco employs a proprietary framework for evaluating each issuer based on ESG criteria that, with respect to the Bond Segment,
it has determined to be important in the investment selection process. Invesco has developed an ESG risk evaluation that is integrated
into its core fundamental credit research process. As part of this process, corporate and government issuers are evaluated and assigned
an overall ESG score based on separate “E,” “S,” and “G” factor scores, which are derived using a
proprietary scoring system that involves a quantitative and qualitative assessment of “E,” S,” and “G”
factors. As part of this research process, Invesco may use third-party ESG ratings, company reporting, and engagement with management.
If an issuer is determined by Invesco to have an overall ESG score that meets the applicable threshold that Invesco has established for
that type of issuer, securities issued by it will be considered as a potential investment for the Bond Segment.
The ESG evaluation process for the Bond Segment also includes some exclusionary
screening criteria which are intended to avoid investing in companies that are non-compliant with the UN Global Compact as well as companies
that derive a significant portion of their revenue from: tobacco product manufacturing or distribution; extraction of fossil fuels from
oil sands; mining or distribution of thermal coal; alcohol manufacturing or distribution; military contracting; manufacture of small arms
including civilian firearms; provision of gambling products or services; or the provision of adult entertainment products or services.
Additionally, companies involved in the following at any threshold are excluded: manufacture of nonconventional weapons including landmines
and cluster munitions; or manufacture of nuclear, biological, or chemical weapons.
Invesco will monitor the “E,” “S,” and “G”
factors of the Bond Segment’s holdings. If Invesco determines that a security’s overall ESG score has ceased to meet its threshold
for inclusion in the Bond Segment, Invesco may sell that security,
provided it can do so in an orderly manner given then-prevailing market conditions.
The Fund expects that it will engage in active and frequent trading and so
will typically have a relatively high portfolio turnover rate.
Principal
Risks
The following are the Principal Risks of the Fund. The value of your investment
in the Fund could go down as well as up. You can lose money by investing in the
Fund. References in this section to the Fund’s subadviser may include any sub-subadvisers as applicable. Certain
risks relating to instruments and strategies used in the management of the Fund are placed first. The significance of any specific risk
to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market conditions, and other
factors. You should read all of the risk information presented below carefully, because any one or more of these risks may result in losses
to the Fund.
Equity Securities Risk Although
stocks may have the potential to outperform other asset classes over the long term, their prices tend to fluctuate more dramatically over
the shorter term. These movements may result from factors affecting individual companies, or from broader influences like changes in interest
rates, market conditions, or investor confidence, or announcements of economic, political, or financial information.
Fixed Income Securities
Risk The values of fixed income securities typically will decline during periods of rising interest rates, and can also decline
in response to changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral assets, or changes in
market, economic, industry, political, regulatory, public health, and other conditions affecting a particular type of security or issuer
or fixed income securities generally. Certain events, such as market or economic developments, regulatory or government actions, natural
disasters, pandemics, terrorist attacks, war, and other geopolitical events can have a dramatic adverse effect on the debt market and
the overall liquidity of the market for fixed income securities. During those periods, the Fund may experience high levels of shareholder
redemptions, and may have to sell securities at times when the Fund would otherwise not do so, and potentially at unfavorable prices.
Certain securities may be difficult to value during such periods. Fixed income securities are subject to interest rate risk (the risk
that the value of a fixed income security will fall when interest rates
rise), extension risk (the risk that the average life of a security will be extended through a slowing of principal payments), prepayment
risk (the risk that a security will be prepaid and the Fund will be required to reinvest at a less favorable rate), duration risk (the
risk that longer-term securities may be more sensitive to interest rate changes), and credit risk.
Derivatives Risk Derivatives
can be highly volatile and involve risks different from, and potentially greater than, direct investments, including risks of imperfect
correlation between the value of derivatives and underlying assets, counterparty default, potential losses that partially or completely
offset gains, and illiquidity. Derivatives can create investment leverage. Losses from derivatives can be substantially greater than the
derivatives’ original cost and can sometimes be unlimited. If the value of a derivative does not correlate well with the particular
market or asset class the derivative is designed to provide exposure to, the derivative may not have the effect or benefit anticipated.
Derivatives can also reduce the opportunity for gains or result in losses by offsetting positive returns in other investments. Many derivatives
are traded in the over-the-counter market and not on exchanges.
Foreign Investment Risk;
Emerging Markets Risk; Currency Risk Investments in securities of foreign issuers, securities of companies with significant
foreign exposure, and foreign currencies can involve additional risks relating to market, industry, political, regulatory, public health,
and other conditions. Political, social, diplomatic, and economic developments, U.S. and foreign government action such as the imposition
of currency or capital blockages, controls, or tariffs, economic and trade sanctions or embargoes, security suspensions, entering or exiting
trade or other intergovernmental agreements, or the expropriation or nationalization of assets in a particular country, can cause dramatic
declines in certain or all securities with exposure to that country and other countries. In the event of nationalization, expropriation,
or other confiscation, the Fund could lose its entire foreign investment in a particular country. There may be quotas or other limits
on the ability of the Fund (or clients of the Fund’s investment adviser or subadviser) to invest or maintain investments in securities
of issuers in certain countries. Enforcing legal rights can be more difficult, costly, and limited in certain foreign countries, and can
be
particularly difficult against foreign governments. Because non-U.S. securities are normally
denominated and traded in currencies other than the U.S. dollar, the value of the Fund’s assets may be affected favorably or unfavorably
by changes in currency exchange rates, exchange control regulations, and restrictions or prohibitions on the repatriation of non-U.S.
currencies. Income and gains with respect to investments in certain countries may be subject to withholding and other taxes. There may
be less information publicly available about a non-U.S. company than about a U.S. company, and many non-U.S. companies are not subject
to accounting, auditing, and financial reporting standards, regulatory framework and practices comparable to those in the U.S. The securities
of some non-U.S. companies, especially those in emerging markets, are less liquid and at times more volatile than securities of comparable
U.S. companies. Emerging markets securities are subject to greater risks than securities issued in developed foreign markets, including
less liquidity, less stringent investor protection and disclosure standards, greater price volatility, higher relative rates of inflation,
greater political, economic, and social instability, greater custody and operational risks, and greater volatility in currency exchange
rates, and are more susceptible to environmental problems. Many emerging market countries are highly reliant on international trade and
exports, including the export of commodities. Their economies may be significantly impacted by fluctuations in commodity prices and the
global demand for certain commodities. In addition, many emerging market countries with less established health care systems have experienced
outbreaks of pandemics or contagious diseases from time to time. Frontier markets, a subset of emerging markets, generally have smaller
economies and less mature capital markets than emerging markets. As a result, the risks of investing in emerging market countries are
magnified in frontier market countries. Frontier markets are more susceptible to having abrupt changes in currency values, less mature
markets and settlement practices, and lower trading volumes that could lead to greater price volatility and illiquidity. Non-U.S. transaction
costs, such as brokerage commissions and custody costs, may be higher than in the United States. In addition, foreign markets can react
differently to market, economic, industry, political, regulatory, geopolitical, public health, and other conditions than the U.S. market.
Below Investment Grade
Debt Securities Risk Below investment grade debt securities, commonly known
as “junk” or “high yield” bonds, have speculative characteristics
and involve greater volatility of price and yield, greater risk of loss of principal and interest, and generally reflect a greater possibility
of an adverse change in financial condition that could affect an issuer’s ability to honor its obligations.
Cash Position Risk If
the Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the
Fund may not achieve its investment objective.
Credit
Risk Credit risk is the risk that an issuer, guarantor, or liquidity provider of a fixed income security held by the Fund
may be unable or unwilling, or may be perceived (whether by market participants, ratings agencies, pricing services or otherwise) as unable
or unwilling, to make timely principal and/or interest payments, or to otherwise honor its obligations. The Fund may also be exposed to
the credit risk of its counterparty to repurchase agreements, reverse repurchase agreements, swap transactions, and other derivatives
transactions, and to the counterparty’s ability or willingness to perform in accordance with the terms of the transaction. The value
of such transactions to the Fund will depend on the willingness and ability of the counterparty to perform its obligations, including
among other things the obligation to return collateral or margin to the Fund. If a counterparty becomes bankrupt or otherwise fails to
perform its obligations under a derivative contract due to financial difficulties, the Fund may experience significant delays in obtaining
any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. The Fund may obtain only a limited recovery
or may obtain no recovery in such circumstances.
Defaulted
and Distressed Securities Risk Because the issuer of such securities is in default and is likely to be in distressed financial
condition, repayment of defaulted securities and obligations of distressed issuers (including insolvent issuers or issuers in payment
or covenant default, in workout or restructuring, or in bankruptcy or insolvency proceedings) is uncertain. To the extent the Fund is
invested in distressed securities, its ability to achieve current income for its shareholders may be diminished.
Dollar Roll Transaction
Risk Dollar roll transactions generally create leverage and subject the Fund to the credit risk of the counterparty.
ESG Risk Because
the Invesco Index and the Bond Segment use ESG factors to assess and exclude certain investments for non-financial reasons, the Fund may
forgo some market opportunities available to funds that do not use these factors. The securities of companies with favorable ESG scores
may underperform similar companies that do not score as well or may underperform the stock market as a whole. As a result, the Fund may
underperform funds that do not screen or score companies based on ESG factors or funds that use a different ESG methodology. Information
used to evaluate such ESG factors may not be readily available, complete, or accurate, which could negatively impact the Fund’s
performance. In addition, a company’s ESG score may differ from that assigned by other funds or an investor. As a result, the companies
deemed eligible for inclusion in the Fund’s portfolio may not reflect the beliefs or values of any particular investor and may not
be deemed to exhibit positive or favorable ESG characteristics if different metrics were used to evaluate them.
Frequent Trading/Portfolio
Turnover Risk Portfolio turnover generally involves some expense to the Fund and may result in the realization of taxable
capital gains (including short-term gains). The trading costs and tax effects associated with portfolio turnover may adversely affect
the Fund’s performance.
Indexing Risk The
U.S. Equity Segment’s performance may not track the performance of the Invesco Index due to a number of factors, including fees
and expenses of the Fund, the Fund’s cash positions, and differences between securities held by the U.S. Equity Seqment and the
securities comprising the Invesco Index which may result from legal restrictions, costs, or liquidity constraints, especially during times
when a sampling methodology is used.
Large Company Risk Large-capitalization
stocks as a group could fall out of favor with the market, causing the Fund’s investments in large-capitalization stocks to underperform
investments that focus on small- or medium-capitalization stocks. Larger, more established companies may be slow to respond to challenges
and may grow more slowly than smaller companies.
Leveraging
Risk Instruments and transactions, including derivatives and dollar roll transactions, that create leverage may cause the
value of an investment in the Fund to be more volatile, could result in larger losses than if they were not used, and tend to compound
the effects of other risks.
Liquidity Risk Certain securities
may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price, and the Fund
may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid investments
at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject to restrictions
on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time. The Fund may not
receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable
market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline significantly in response
to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as investor perceptions
of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage, industry problems,
and reduced demand for goods or services.
Mortgage- and Asset-Backed
Securities Risk Investments in mortgage- and asset-backed securities subject the Fund to credit risk, interest rate risk,
extension risk, and prepayment risk, among other risks. Mortgage-backed and asset-backed securities not issued by a government agency
generally involve greater credit risk than securities issued by government agencies. Payment of principal and interest generally depends
on the cash flows generated by the underlying assets and the terms of the security. The types of mortgages (for example, residential or
commercial mortgages) underlying securities held by the Fund may differ and be affected differently by market factors. Investments that
receive only the interest portion or the principal portion of payments on the underlying assets may be highly volatile. Litigation with
respect to the representations and warranties given in connection with the issuance of mortgage-backed securities can be an important
consideration in investing in such securities, and the outcome of any such litigation could
significantly impact the value of the Fund’s mortgage-backed investments.
Passive
Management Risk With an indexing strategy, there is no attempt to seek returns in excess of a benchmark index, to use defensive
strategies, or to reduce the effects of any long-term poor investment performance. Therefore, with respect to the U.S. Equity Segment,
the Fund would not necessarily buy or sell a security unless that security is added to, or removed from, the Invesco Index, even if that
security generally is underperforming.
Preferred
Stock Risk Like other equity securities, preferred stock is subject to the risk that its value may decrease based on actual
or perceived changes in the business or financial condition of the issuer. In addition, changes in interest rates may adversely affect
the value of a preferred stock that pays a fixed dividend. Preferred stocks are also subject to additional risks, such as potentially
greater volatility and risks related to deferral, non-cumulative dividends, subordination, liquidity, limited voting rights, and special
redemption rights.
Restricted Securities
Risk The Fund may hold securities that are restricted as to resale under the U.S. federal securities laws, such as securities
in certain privately held companies. Such securities may be highly illiquid and their values may experience significant volatility. Restricted
securities may be difficult to value.
Risk
of Investment in Other Funds or Pools The Fund is indirectly exposed to all of the risks of the underlying funds, including
ETFs, in which it invests, including the risk that the underlying funds will not perform as expected. ETFs are subject to additional risks,
including secondary market trading risks and the risk that an ETF’s shares may trade above or below net asset value. The Fund indirectly
pays a portion of the expenses incurred by the underlying funds.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
U.S. Government Securities
Risk Obligations of certain U.S. Government agencies and
instrumentalities are not backed by the full faith and credit of the U.S. Government, and
there can be no assurance that the U.S. Government would provide financial support to such agencies and instrumentalities.
Valuation Risk The
Fund is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are
fair valued.
When-Issued, Delayed
Delivery, TBA, and Forward Commitment Transaction Risk These transactions may create leverage and involve a risk of loss
if the value of the securities declines prior to settlement.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class R5 shares. The
table shows how the Fund’s average annual returns for 1, 5, and 10 years compare with those of a broad measure of market performance
and three additional indexes, including an index that provides a comparison relevant to the Fund’s allocation to fixed income investments
(Bloomberg U.S. Aggregate Bond Index), an index of funds with similar investment objectives (Lipper Balanced Fund Index), and a hypothetical
custom index which comprises the S&P 500® (65%) and Bloomberg
U.S. Aggregate Bond (35%) Indexes (Custom Balanced Index). The Fund’s investment objective and investment strategy
changed on November 18, 2020. The performance results shown below would not necessarily have been achieved had the Fund’s current
investment strategy been in effect for the entire period for which performance results are presented. Performance for Class I, Class R4,
and Class R3 shares of the Fund for periods prior to their inception date (04/01/14) is based on the performance of Class R5 shares, adjusted
for Class R4 and Class R3 shares to reflect Class R4 and Class R3 expenses, respectively. Performance
for Class A shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Class R5 Shares
|
Highest Quarter:
|
|
|
2Q ’20,
|
|
|
|
|
14.65 |
% |
|
Lowest Quarter:
|
|
|
1Q ’20,
|
|
|
–14.74%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold
Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Class R5 only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class R5
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
19.93 |
% |
|
|
|
|
11.86 |
% |
|
|
|
|
10.37 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
11.32 |
% |
|
|
|
|
8.77 |
% |
|
|
|
|
7.85 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares |
|
|
|
|
|
14.19 |
% |
|
|
|
|
8.54 |
% |
|
|
|
|
7.60 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
20.04 |
% |
|
|
|
|
11.97 |
% |
|
|
|
|
10.46 |
% |
Service
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
19.82 |
% |
|
|
|
|
11.74 |
% |
|
|
|
|
10.24 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
19.69 |
% |
|
|
|
|
11.62 |
% |
|
|
|
|
10.11 |
% |
Class A
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
12.86 |
% |
|
|
|
|
10.11 |
% |
|
|
|
|
9.23 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
19.48 |
% |
|
|
|
|
11.46 |
% |
|
|
|
|
9.97 |
% |
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
19.19 |
% |
|
|
|
|
11.17 |
% |
|
|
|
|
9.71 |
% |
S&P
500 Index (reflects
no deduction for fees, expenses, or taxes)
|
|
|
|
|
|
28.71 |
% |
|
|
|
|
18.47 |
% |
|
|
|
|
16.55 |
% |
Bloomberg
U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes)
|
|
|
|
|
|
-1.54 |
% |
|
|
|
|
3.57 |
% |
|
|
|
|
2.90 |
% |
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Lipper
Balanced Fund Index (reflects no deduction for taxes) |
|
|
|
|
|
13.18 |
% |
|
|
|
|
10.80 |
% |
|
|
|
|
9.55 |
% |
Custom
Balanced Index (reflects no deduction for fees, expenses, or taxes) |
|
|
|
|
|
17.41 |
% |
|
|
|
|
13.36 |
% |
|
|
|
|
11.82 |
% |
MANAGEMENT
Investment Adviser: MML Investment
Advisers, LLC (“MML Advisers”)
Subadviser(s): Invesco
Advisers, Inc. (“Invesco Advisers”)
Sub-subadviser(s): Invesco
Capital Management LLC (“ICM”)
Portfolio Manager(s):
Jacob
Borbidge, CFA, CAIA is a Senior Portfolio Manager and Head of Investment Research at Invesco Advisers. He has managed the
Fund since November 2020.
Matt
Brill, CFA is Head of North America Investment Grade for Invesco Fixed Income at Invesco Advisers. He has managed the Fund
since November 2020.
Pratik
Doshi, CFA is a Portfolio Manager at ICM. He has managed the Fund since November 2020.
Peter
Hubbard is a Director of Portfolio Management at ICM. He has managed the Fund since November 2020.
Michael
D. Hyman is Chief Investment Officer, Global Investment Grade & Emerging Markets for Invesco Fixed Income at Invesco
Advisers. He has managed the Fund since November 2020.
Michael
Jeanette is a Senior Portfolio Manager at ICM. He has managed the Fund since November 2020.
Duy Nguyen, CFA, CAIA
is Chief Investment Officer and a Senior Portfolio Manager, Invesco Investment Solutions at Invesco Advisers. He has managed the Fund
since November 2020.
Todd
Schomberg, CFA is a Senior Portfolio Manager at Invesco Advisers. He has managed the Fund since November 2020.
Tony
Seisser is a Portfolio Manager at ICM. He has managed the Fund since November 2020.
PURCHASE AND SALE
OF FUND SHARES
Shares of the Fund are generally available to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request, telephone, or internet
(available to certain customers).
TAX INFORMATION
The Fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other financial intermediary,
the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates, or others for the sale of
Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict of interest by influencing
the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your intermediary to obtain
more information about the compensation it may receive in connection with your investment.
MassMutual
Disciplined Value Fund (formerly known as MassMutual Premier Disciplined Value Fund)
INVESTMENT
OBJECTIVE
The Fund seeks long-term total return.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may
pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A shares,
you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Admini- strative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
5.50%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Admini- strative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
0.45%
|
|
|
0.45%
|
|
|
0.45%
|
|
|
0.45%
|
|
|
0.45%
|
|
|
0.45%
|
|
|
0.45%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.29%
|
|
|
0.39%
|
|
|
0.49%
|
|
|
0.59%
|
|
|
0.59%
|
|
|
0.49%
|
|
|
0.49%
|
|
Total Annual Fund Operating Expenses
|
|
|
0.74%
|
|
|
0.84%
|
|
|
0.94%
|
|
|
1.04%
|
|
|
1.29%
|
|
|
1.19%
|
|
|
1.44%
|
|
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in each share class of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial
sales charge. The example also assumes that your investment earns a 5% return each year and that the Fund’s operating expenses are
exactly as described in the preceding table. Although your
actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
76 |
|
|
|
|
$ |
237 |
|
|
|
|
$ |
411 |
|
|
|
|
$ |
918 |
|
|
Class R5 |
|
|
|
$ |
86 |
|
|
|
|
$ |
268 |
|
|
|
|
$ |
466 |
|
|
|
|
$ |
1,037 |
|
|
Service Class |
|
|
|
$ |
96 |
|
|
|
|
$ |
300 |
|
|
|
|
$ |
520 |
|
|
|
|
$ |
1,155 |
|
|
Administrative Class |
|
|
|
$ |
106 |
|
|
|
|
$ |
331 |
|
|
|
|
$ |
574 |
|
|
|
|
$ |
1,271 |
|
|
Class A |
|
|
|
$ |
674 |
|
|
|
|
$ |
936 |
|
|
|
|
$ |
1,219 |
|
|
|
|
$ |
2,021 |
|
|
Class R4 |
|
|
|
$ |
121 |
|
|
|
|
$ |
378 |
|
|
|
|
$ |
654 |
|
|
|
|
$ |
1,443 |
|
|
Class R3 |
|
|
|
$ |
147 |
|
|
|
|
$ |
456 |
|
|
|
|
$ |
787 |
|
|
|
|
$ |
1,724 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 189%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
The Fund invests primarily in equity securities of U.S.
large- and mid-cap companies. The Fund currently invests substantially all of its assets in companies represented in the Russell 1000®
Value Index at the time of purchase, although the Fund is actively managed and is not an index fund or a passively managed investment.
Constituents of the Russell 1000 Value Index are companies that exhibit certain value characteristics, as defined by the index providers,
such as lower price-to-book ratios, lower prices relative to forecasted earnings, and higher dividend yields. As of December 31, 2021,
the market capitalization range of companies included in the Russell 1000 Value Index was $594.18 million to $1,921.85 billion.
Equity securities in which the Fund invests may include common stocks, preferred
stocks, securities convertible into common or preferred stock, rights, and warrants. The Fund may hold a portion of its assets in unlisted
securities. The Fund may invest in exchange-traded funds and may use equity index futures contracts as a substitute for direct investments
in order to help manage cash flows.
Use of derivatives by the Fund may create investment leverage. The Fund may at times have
significant exposure to one or more industries or sectors. The Fund may hold a portion of its assets in cash or cash equivalents.
The Fund’s subadviser, Wellington
Management Company LLP (“Wellington Management”), manages the Fund’s assets using a proprietary, dynamic multi-factor
approach that is based on quantitative and qualitative research and analysis. In selecting securities, Wellington Management seeks to
allocate the Fund’s assets to equity securities that it believes share complementary factor exposures. Factors are characteristics
that are important in explaining the returns and risks of a group of securities. Wellington Management selects securities for the Fund
based on their factor characteristics and diversification benefits; typically this will mean that securities demonstrate one of the following:
(1) mean-reversion (e.g., stocks that are inexpensive relative to their historical fundamentals); (2) trend following (e.g., strong momentum
and higher growth potential); or (3) risk aversion (e.g., financially healthy, stable, and lower volatility companies). Securities are
typically sold as a byproduct of the factor selection, allocation, and rebalancing processes. In exceptional circumstances, Wellington
Management may exclude or remove an issuer or security from the Fund where it believes the data available does not accurately reflect
current events.
The Fund expects that it will engage in active and frequent trading and
so will typically have a relatively high portfolio turnover rate.
Principal
Risks
The following are the Principal Risks of the Fund. The value of your investment
in the Fund could go down as well as up. You can lose money by investing in the
Fund. Certain risks relating to instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market
conditions, and other factors. You should read all of the risk information presented below carefully, because any one or more of these
risks may result in losses to the Fund.
Equity Securities Risk Although
stocks may have the potential to outperform other asset classes over the long term, their prices tend to fluctuate more dramatically over
the shorter term. These movements may result from factors affecting
individual companies, or from broader influences like changes in interest rates, market
conditions, or investor confidence, or announcements of economic, political, or financial information.
Value Company Risk The
value investment approach entails the risk that the market will not recognize a security’s intrinsic value for a long time, or that
a stock the investment adviser or subadviser judges to be undervalued may actually be appropriately priced.
Large Company Risk Large-capitalization
stocks as a group could fall out of favor with the market, causing the Fund’s investments in large-capitalization stocks to underperform
investments that focus on small- or medium-capitalization stocks. Larger, more established companies may be slow to respond to challenges
and may grow more slowly than smaller companies.
Small and Mid-Cap Company
Risk Market risk and liquidity risk are particularly pronounced for securities of small and medium-sized companies, which
may trade less frequently and in smaller volumes than more widely-held securities, and may fluctuate in price more than other securities.
Their shares can be less liquid than those of larger companies, especially during market declines. Small and medium-sized companies may
have limited product lines, markets, or financial resources and may be dependent on a limited management group; they may have been recently
organized and have little or no track record of success.
Cash Position Risk If
the Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the
Fund may not achieve its investment objective.
Derivatives Risk Derivatives
can be highly volatile and involve risks different from, and potentially greater than, direct investments, including risks of imperfect
correlation between the value of derivatives and underlying assets, counterparty default, potential losses that partially or completely
offset gains, and illiquidity. Derivatives can create investment leverage. Losses from derivatives can be substantially greater than the
derivatives’ original cost and can sometimes be unlimited. If the value of a derivative does not correlate well with the particular
market or asset class the derivative is designed to provide exposure to, the derivative may not have the effect or benefit anticipated.
Derivatives can also reduce the opportunity for gains or result in losses by offsetting positive
returns in other investments. Many derivatives are traded in the over-the-counter market
and not on exchanges.
Frequent Trading/Portfolio
Turnover Risk Portfolio turnover generally involves some expense to the Fund and may result in the realization of taxable
capital gains (including short-term gains). The trading costs and tax effects associated with portfolio turnover may adversely affect
the Fund’s performance.
Liquidity Risk Certain
securities may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price,
and the Fund may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid
investments at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject
to restrictions on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time.
The Fund may not receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable
market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline significantly in response
to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as investor perceptions
of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage, industry problems,
and reduced demand for goods or services.
Quantitative Models Risk The
portfolio managers use quantitative models as part of the idea generation process. Quantitative models are based upon many factors that
measure individual securities relative to each other. Such models may not produce the intended results and can be adversely affected by
errors or imperfections in the factors or the data on which measurements are based, changing sources of market return or
market risk, or any technical issues with the design, construction, implementation, or maintenance
of the models.
Risk
of Investment in Other Funds or Pools The Fund is indirectly exposed to all of the risks of the underlying funds, including
ETFs, in which it invests, including the risk that the underlying funds will not perform as expected. ETFs are subject to additional risks,
including secondary market trading risks and the risk that an ETF’s shares may trade above or below net asset value. The Fund indirectly
pays a portion of the expenses incurred by the underlying funds.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
Valuation Risk The
Fund is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are
fair valued.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Service Class shares. The table shows how the Fund’s average annual returns
for 1, 5, and 10 years compare with those of a broad measure of market performance. The Fund’s investment objective and investment
strategy changed on November 18, 2020. The performance results shown below would not necessarily have been achieved had the Fund’s
current investment strategy been in effect for the entire period for which performance results are presented. Performance for Class I
and Class R4 shares of the Fund for periods prior to their inception date (04/01/14) is based on the performance of Class R5 shares, adjusted
for Class R4 shares to reflect Class R4 expenses. Performance
for Class A shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Service Class Shares
|
Highest Quarter:
|
|
|
4Q ’20,
|
|
|
|
|
14.39 |
% |
|
Lowest Quarter:
|
|
|
1Q ’20,
|
|
|
–27.53%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold
Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Service Class only. After-tax returns for other classes will vary.
Average Annual Total Returns
(for the periods ended
December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Service Class
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
30.61 |
% |
|
|
|
|
10.02 |
% |
|
|
|
|
12.02 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
22.54 |
% |
|
|
|
|
6.45 |
% |
|
|
|
|
9.81 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares |
|
|
|
|
|
18.45 |
% |
|
|
|
|
6.70 |
% |
|
|
|
|
9.23 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
31.00 |
% |
|
|
|
|
10.26 |
% |
|
|
|
|
12.22 |
% |
Class R5
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
30.81 |
% |
|
|
|
|
10.15 |
% |
|
|
|
|
12.15 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
30.49 |
% |
|
|
|
|
9.91 |
% |
|
|
|
|
11.90 |
% |
Class A
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
23.02 |
% |
|
|
|
|
8.42 |
% |
|
|
|
|
11.00 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
30.43 |
% |
|
|
|
|
9.77 |
% |
|
|
|
|
11.75 |
% |
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
29.99 |
% |
|
|
|
|
9.49 |
% |
|
|
|
|
11.43 |
% |
Russell
1000 Value Index (reflects
no deduction for fees, expenses, or taxes)
|
|
|
|
|
|
25.16 |
% |
|
|
|
|
11.16 |
% |
|
|
|
|
12.97 |
% |
MANAGEMENT
Investment Adviser: MML
Investment Advisers, LLC (“MML Advisers”)
Subadviser(s): Wellington
Management Company LLP (“Wellington Management”)
Portfolio Manager(s):
Matt J.
Kyller, CFA is a Managing Director and Research Manager at Wellington Management. He has managed the Fund since February
2021.
Tom S.
Simon, CFA, FRM is a Senior Managing Director and Portfolio Manager at Wellington Management. He has managed the Fund since
November 2020.
PURCHASE
AND SALE OF FUND SHARES
Shares of the Fund are generally available to retirement
plans, other institutional investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request,
telephone, or internet (available to certain customers).
TAX
INFORMATION
The Fund intends to make distributions that may be taxed
as ordinary income, qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other
financial intermediary, the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates,
or others for the sale of Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict
of interest by influencing the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your
intermediary to obtain more information about the compensation it may receive in connection with your investment.
MassMutual
Main Street Fund (formerly known as MassMutual Premier Main Street Fund)
INVESTMENT
OBJECTIVE
The Fund seeks a high total return.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you
may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A shares,
you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
5.50%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
0.55%
|
|
|
0.55%
|
|
|
0.55%
|
|
|
0.55%
|
|
|
0.55%
|
|
|
0.55%
|
|
|
0.55%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.20%
|
|
|
0.30%
|
|
|
0.40%
|
|
|
0.50%
|
|
|
0.50%
|
|
|
0.40%
|
|
|
0.40%
|
|
Total Annual Fund Operating Expenses
|
|
|
0.75%
|
|
|
0.85%
|
|
|
0.95%
|
|
|
1.05%
|
|
|
1.30%
|
|
|
1.20%
|
|
|
1.45%
|
|
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in each share class of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial
sales charge. The example also assumes that your investment earns a 5% return each year and that the Fund’s operating expenses are
exactly as described in the preceding table. Although your
actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
77 |
|
|
|
|
$ |
240 |
|
|
|
|
$ |
417 |
|
|
|
|
$ |
930 |
|
|
Class R5 |
|
|
|
$ |
87 |
|
|
|
|
$ |
271 |
|
|
|
|
$ |
471 |
|
|
|
|
$ |
1,049 |
|
|
Service Class |
|
|
|
$ |
97 |
|
|
|
|
$ |
303 |
|
|
|
|
$ |
525 |
|
|
|
|
$ |
1,166 |
|
|
Administrative Class |
|
|
|
$ |
107 |
|
|
|
|
$ |
334 |
|
|
|
|
$ |
579 |
|
|
|
|
$ |
1,283 |
|
|
Class A |
|
|
|
$ |
675 |
|
|
|
|
$ |
939 |
|
|
|
|
$ |
1,224 |
|
|
|
|
$ |
2,032 |
|
|
Class R4 |
|
|
|
$ |
122 |
|
|
|
|
$ |
381 |
|
|
|
|
$ |
660 |
|
|
|
|
$ |
1,455 |
|
|
Class R3 |
|
|
|
$ |
148 |
|
|
|
|
$ |
459 |
|
|
|
|
$ |
792 |
|
|
|
|
$ |
1,735 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 46%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
The Fund invests primarily in common stocks of U.S.
companies of different capitalization ranges. The Fund’s subadviser, Invesco Advisers, Inc.
(“Invesco Advisers”), currently focuses on “large capitalization” issuers, which are considered to be companies
with market capitalizations at the time of purchase within the market capitalization range of companies included within the Russell 1000®
Index (as of December 31, 2021, $594.18 million to $2,913.28 billion), although it may purchase stocks of companies with any market
capitalization. The Fund typically invests most of its assets in equity securities of U.S. companies, but may invest in foreign securities.
Equity securities may include common stocks, preferred stocks, securities convertible into common or preferred stock, rights, and warrants.
The Fund generally will not invest more than 15% of its total assets in foreign securities. The Fund may at times have significant exposure
to one or more industries or sectors. The Fund may hold a portion of its assets in cash or cash equivalents.
Invesco Advisers uses fundamental research to select securities for
the Fund’s portfolio, which is comprised of both growth and value stocks. While the process may change over time or vary in particular
cases, in general the selection process currently uses a fundamental approach in analyzing issuers on factors such as a company’s
financial performance, company strength and prospects, industry position, and business model and management strength. Industry outlook,
market trends, and general economic conditions may also be considered. The portfolio is constructed and regularly monitored based upon
several analytical tools, including quantitative investment models. Quantitative models are used as part of the idea generation process
to rank securities within each sector to identify potential buy and sell candidates for further fundamental analysis.
The Fund aims to maintain a broadly diversified portfolio
across major economic sectors by applying investment parameters for both sector and position size. Invesco Advisers uses the following
sell criteria: the stock price is approaching its target, deterioration in the company’s competitive position, poor execution by
the company’s management, or identification of more attractive alternative investment ideas.
Principal
Risks
The following are the Principal Risks of the Fund. The value of your investment
in the Fund could go down as well as up. You can lose money by investing in the
Fund. Certain risks relating to instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market
conditions, and other factors. You should read all of the risk information presented below carefully, because any one or more of these
risks may result in losses to the Fund.
Equity Securities Risk Although
stocks may have the potential to outperform other asset classes over the long term, their prices tend to fluctuate more dramatically over
the shorter term. These movements may result from factors affecting individual companies, or from broader influences like changes in interest
rates, market conditions, or investor confidence, or announcements of economic, political, or financial information.
Foreign Investment Risk;
Emerging Markets Risk; Currency Risk Investments in securities of foreign issuers, securities of companies with significant
foreign exposure, and foreign currencies can involve additional risks relating to market,
industry, political, regulatory, public health, and other conditions. Political, social, diplomatic, and economic developments, U.S. and
foreign government action such as the imposition of currency or capital blockages, controls, or tariffs, economic and trade sanctions
or embargoes, security suspensions, entering or exiting trade or other intergovernmental agreements, or the expropriation or nationalization
of assets in a particular country, can cause dramatic declines in certain or all securities with exposure to that country and other countries.
In the event of nationalization, expropriation, or other confiscation, the Fund could lose its entire foreign investment in a particular
country. There may be quotas or other limits on the ability of the Fund (or clients of the Fund’s investment adviser or subadviser)
to invest or maintain investments in securities of issuers in certain countries. Enforcing legal rights can be more difficult, costly,
and limited in certain foreign countries, and can be particularly difficult against foreign governments. Because non-U.S. securities are
normally denominated and traded in currencies other than the U.S. dollar, the value of the Fund’s assets may be affected favorably
or unfavorably by changes in currency exchange rates, exchange control regulations, and restrictions or prohibitions on the repatriation
of non-U.S. currencies. Income and gains with respect to investments in certain countries may be subject to withholding and other taxes.
There may be less information publicly available about a non-U.S. company than about a U.S. company, and many non-U.S. companies are not
subject to accounting, auditing, and financial reporting standards, regulatory framework and practices comparable to those in the U.S.
The securities of some non-U.S. companies, especially those in emerging markets, are less liquid and at times more volatile than securities
of comparable U.S. companies. Emerging markets securities are subject to greater risks than securities issued in developed foreign markets,
including less liquidity, less stringent investor protection and disclosure standards, greater price volatility, higher relative rates
of inflation, greater political, economic, and social instability, greater custody and operational risks, and greater volatility in currency
exchange rates, and are more susceptible to environmental problems. Many emerging market countries are highly reliant on international
trade and exports, including the export of commodities. Their economies may be
significantly impacted by fluctuations in commodity prices and the global demand for certain
commodities. In addition, many emerging market countries with less established health care systems have experienced outbreaks of pandemics
or contagious diseases from time to time. Frontier markets, a subset of emerging markets, generally have smaller economies and less mature
capital markets than emerging markets. As a result, the risks of investing in emerging market countries are magnified in frontier market
countries. Frontier markets are more susceptible to having abrupt changes in currency values, less mature markets and settlement practices,
and lower trading volumes that could lead to greater price volatility and illiquidity. Non-U.S. transaction costs, such as brokerage commissions
and custody costs, may be higher than in the United States. In addition, foreign markets can react differently to market, economic, industry,
political, regulatory, geopolitical, public health, and other conditions than the U.S. market.
Growth Company Risk The
prices of growth securities are often highly sensitive to market fluctuations because of their heavy dependence on future earnings or
cash flow expectations, and can be more volatile than the market in general.
Large Company Risk Large-capitalization
stocks as a group could fall out of favor with the market, causing the Fund’s investments in large-capitalization stocks to underperform
investments that focus on small- or medium-capitalization stocks. Larger, more established companies may be slow to respond to challenges
and may grow more slowly than smaller companies.
Small and Mid-Cap Company
Risk Market risk and liquidity risk are particularly pronounced for securities of small and medium-sized companies, which
may trade less frequently and in smaller volumes than more widely-held securities, and may fluctuate in price more than other securities.
Their shares can be less liquid than those of larger companies, especially during market declines. Small and medium-sized companies may
have limited product lines, markets, or financial resources and may be dependent on a limited management group; they may have been recently
organized and have little or no track record of success.
Value Company Risk The
value investment approach entails the risk that the market will not recognize a security’s intrinsic value for a long time, or that
a stock the investment adviser or subadviser judges to be undervalued may actually be appropriately priced.
Cash Position Risk If the
Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the Fund
may not achieve its investment objective.
Convertible Securities
Risk Convertible securities are subject to the risks of both debt instruments and equity securities. The price of a convertible
security may change in response to changes in price of the underlying equity security, the credit quality of the issuer, and interest
rates. In general, the values of convertible securities tend to decline as interest rates rise and to rise when interest rates fall. A
convertible security generally has less potential for gain or loss than the underlying equity security.
Liquidity Risk Certain
securities may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price,
and the Fund may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid
investments at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject
to restrictions on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time.
The Fund may not receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable
market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline significantly in response
to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as investor perceptions
of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage, industry problems,
and reduced demand for goods or services.
Preferred Stock Risk Like
other equity securities, preferred stock is subject to the risk that its value may decrease based on actual or perceived changes in the
business or financial condition of the issuer.
In addition, changes in interest rates may adversely affect the value
of a preferred stock that pays a fixed dividend. Preferred stocks are also subject to additional risks, such as potentially greater volatility
and risks related to deferral, non-cumulative dividends, subordination, liquidity, limited voting rights, and special redemption rights.
Quantitative Models Risk The
portfolio managers use quantitative models as part of the idea generation process. Quantitative models are based upon many factors that
measure individual securities relative to each other. Such models may not produce the intended results and can be adversely affected by
errors or imperfections in the factors or the data on which measurements are based, changing sources of market return or market risk,
or any technical issues with the design, construction, implementation, or maintenance of the models.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
Valuation Risk The
Fund is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are
fair valued.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class R5 shares. The table shows how the Fund’s average annual returns for
1, 5, and 10 years compare with those of a broad measure of market performance. Performance for Class I and Class R4 shares of the Fund
for periods prior to their inception date (04/01/14) is based on the performance of Class R5 shares, adjusted for Class R4 shares to reflect
Class R4 expenses. Performance for Class A shares of the
Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Class R5 Shares
|
Highest Quarter:
|
|
|
2Q ’20,
|
|
|
|
|
18.53 |
% |
|
Lowest Quarter:
|
|
|
1Q ’20,
|
|
|
–19.98%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold
Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Class R5 only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class R5
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
27.60 |
% |
|
|
|
|
15.73 |
% |
|
|
|
|
15.05 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
21.19 |
% |
|
|
|
|
12.75 |
% |
|
|
|
|
12.36 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares |
|
|
|
|
|
20.06 |
% |
|
|
|
|
12.02 |
% |
|
|
|
|
11.81 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
27.70 |
% |
|
|
|
|
15.86 |
% |
|
|
|
|
15.15 |
% |
Service
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
27.56 |
% |
|
|
|
|
15.60 |
% |
|
|
|
|
14.95 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
27.37 |
% |
|
|
|
|
15.50 |
% |
|
|
|
|
14.82 |
% |
Class A
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
19.98 |
% |
|
|
|
|
13.90 |
% |
|
|
|
|
13.89 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
27.20 |
% |
|
|
|
|
15.34 |
% |
|
|
|
|
14.66 |
% |
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
26.90 |
% |
|
|
|
|
15.05 |
% |
|
|
|
|
14.34 |
% |
S&P
500®
Index (reflects
no deduction for fees, expenses, or taxes)
|
|
|
|
|
|
28.71 |
% |
|
|
|
|
18.47 |
% |
|
|
|
|
16.55 |
% |
MANAGEMENT
Investment Adviser: MML Investment
Advisers, LLC (“MML Advisers”)
Subadviser(s): Invesco
Advisers, Inc. (“Invesco Advisers”)
Portfolio Manager(s):
Manind
Govil, CFA is a Portfolio Manager at Invesco Advisers. He has managed the Fund since May 2009.
Paul
Larson is a Portfolio Manager at Invesco Advisers. He has managed the Fund since February 2014.
Benjamin
Ram is a Portfolio Manager at Invesco Advisers. He has managed the Fund since May 2009.
PURCHASE AND SALE
OF FUND SHARES
Shares of the Fund are generally available to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are
redeemable on any business day by written request, telephone, or internet (available to
certain customers).
TAX INFORMATION
The Fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other financial intermediary,
the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates, or others for the sale of
Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict of interest by influencing
the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your intermediary to obtain
more information about the compensation it may receive in connection with your investment.
MassMutual
Disciplined Growth Fund (formerly known as MassMutual Premier Disciplined Growth Fund)
INVESTMENT
OBJECTIVE
The Fund seeks long-term total return.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you
may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A shares,
you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
5.50%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
0.45%
|
|
|
0.45%
|
|
|
0.45%
|
|
|
0.45%
|
|
|
0.45%
|
|
|
0.45%
|
|
|
0.45%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.12%
|
|
|
0.22%
|
|
|
0.32%
|
|
|
0.42%
|
|
|
0.42%
|
|
|
0.32%
|
|
|
0.32%
|
|
Total Annual Fund Operating Expenses
|
|
|
0.57%
|
|
|
0.67%
|
|
|
0.77%
|
|
|
0.87%
|
|
|
1.12%
|
|
|
1.02%
|
|
|
1.27%
|
|
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in each share class of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial
sales charge. The example also assumes that your investment earns a 5% return each year and that the Fund’s operating expenses are
exactly as described in the preceding table. Although your
actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
58 |
|
|
|
|
$ |
183 |
|
|
|
|
$ |
318 |
|
|
|
|
$ |
714 |
|
|
Class R5 |
|
|
|
$ |
68 |
|
|
|
|
$ |
214 |
|
|
|
|
$ |
373 |
|
|
|
|
$ |
835 |
|
|
Service Class |
|
|
|
$ |
79 |
|
|
|
|
$ |
246 |
|
|
|
|
$ |
428 |
|
|
|
|
$ |
954 |
|
|
Administrative Class |
|
|
|
$ |
89 |
|
|
|
|
$ |
278 |
|
|
|
|
$ |
482 |
|
|
|
|
$ |
1,073 |
|
|
Class A |
|
|
|
$ |
658 |
|
|
|
|
$ |
886 |
|
|
|
|
$ |
1,133 |
|
|
|
|
$ |
1,838 |
|
|
Class R4 |
|
|
|
$ |
104 |
|
|
|
|
$ |
325 |
|
|
|
|
$ |
563 |
|
|
|
|
$ |
1,248 |
|
|
Class R3 |
|
|
|
$ |
129 |
|
|
|
|
$ |
403 |
|
|
|
|
$ |
697 |
|
|
|
|
$ |
1,534 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 110%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
The Fund invests primarily in equity securities of U.S.
large- and mid-cap companies. The Fund currently invests substantially all of its assets in companies represented in the Russell 1000®
Growth Index at the time of purchase, although the Fund is actively managed and is not an index fund or a passively managed investment.
Constituents of the Russell 1000 Growth Index are companies that exhibit certain growth characteristics, as defined by the index providers,
such as historical and predicted future earnings per share growth rates and trends, historical sales per share growth trends, and internal
growth rate. As of December 31, 2021, the market capitalization range of companies included in the Russell 1000 Growth Index was $594.18
million to $2,913.28 billion.
Equity securities in which the Fund invests may include common stocks, preferred
stocks, securities convertible into common or preferred stock, rights, and warrants. The Fund may hold a portion of its assets in unlisted
securities. The Fund may invest in exchange-traded funds and may use equity index futures contracts as a substitute for direct
investments in order to help manage cash flows. Use of derivatives by the Fund may create
investment leverage. The Fund may at times have significant exposure to one or more industries or sectors. The Fund may hold a portion
of its assets in cash or cash equivalents.
The Fund’s subadviser, Wellington
Management Company LLP (“Wellington Management”), manages the Fund’s assets using a proprietary, dynamic multi-factor
approach that is based on quantitative and qualitative research and analysis. In selecting securities, Wellington Management seeks to
allocate the Fund’s assets to equity securities that it believes share complementary factor exposures. Factors are characteristics
that are important in explaining the returns and risks of a group of securities. Wellington Management selects securities for the Fund
based on their factor characteristics and diversification benefits; typically this will mean that securities demonstrate one of the following:
(1) mean-reversion (e.g., stocks that are inexpensive relative to their historical fundamentals); (2) trend following (e.g., strong momentum
and higher growth potential); or (3) risk aversion (e.g., financially healthy, stable, and lower volatility companies). Securities are
typically sold as a byproduct of the factor selection, allocation, and rebalancing processes. In exceptional circumstances, Wellington
Management may exclude or remove an issuer or security from the Fund where it believes the data available does not accurately reflect
current events.
The Fund expects that it will engage in active and frequent trading and
so will typically have a relatively high portfolio turnover rate.
Principal
Risks
The following are the Principal Risks of the Fund. The value of your investment
in the Fund could go down as well as up. You can lose money by investing in the
Fund. Certain risks relating to instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market
conditions, and other factors. You should read all of the risk information presented below carefully, because any one or more of these
risks may result in losses to the Fund.
Equity Securities Risk Although
stocks may have the potential to outperform other asset classes over the long term, their prices tend to fluctuate more dramatically over
the shorter term. These
movements may result from factors affecting individual companies, or from broader influences
like changes in interest rates, market conditions, or investor confidence, or announcements of economic, political, or financial information.
Growth Company Risk The
prices of growth securities are often highly sensitive to market fluctuations because of their heavy dependence on future earnings or
cash flow expectations, and can be more volatile than the market in general.
Large Company Risk Large-capitalization
stocks as a group could fall out of favor with the market, causing the Fund’s investments in large-capitalization stocks to underperform
investments that focus on small- or medium-capitalization stocks. Larger, more established companies may be slow to respond to challenges
and may grow more slowly than smaller companies.
Small and Mid-Cap Company
Risk Market risk and liquidity risk are particularly pronounced for securities of small and medium-sized companies, which
may trade less frequently and in smaller volumes than more widely-held securities, and may fluctuate in price more than other securities.
Their shares can be less liquid than those of larger companies, especially during market declines. Small and medium-sized companies may
have limited product lines, markets, or financial resources and may be dependent on a limited management group; they may have been recently
organized and have little or no track record of success.
Cash Position Risk If
the Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the
Fund may not achieve its investment objective.
Derivatives Risk Derivatives
can be highly volatile and involve risks different from, and potentially greater than, direct investments, including risks of imperfect
correlation between the value of derivatives and underlying assets, counterparty default, potential losses that partially or completely
offset gains, and illiquidity. Derivatives can create investment leverage. Losses from derivatives can be substantially greater than the
derivatives’ original cost and can sometimes be unlimited. If the value of a derivative does not correlate well with the particular
market or asset class the derivative is designed to provide exposure to, the derivative may not have the effect or benefit anticipated.
Derivatives can also reduce the opportunity for gains or result in losses by offsetting positive
returns in other investments. Many derivatives are traded in the over-the-counter market
and not on exchanges.
Frequent Trading/Portfolio
Turnover Risk Portfolio turnover generally involves some expense to the Fund and may result in the realization of taxable
capital gains (including short-term gains). The trading costs and tax effects associated with portfolio turnover may adversely affect
the Fund’s performance.
Liquidity Risk Certain
securities may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price,
and the Fund may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid
investments at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject
to restrictions on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time.
The Fund may not receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable
market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline significantly in response
to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as investor perceptions
of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage, industry problems,
and reduced demand for goods or services.
Quantitative Models Risk The
portfolio managers use quantitative models as part of the idea generation process. Quantitative models are based upon many factors that
measure individual securities relative to each other. Such models may not produce the intended results and can be adversely affected by
errors or imperfections in the factors or the data on which measurements are based, changing sources of market return or
market risk, or any technical issues with the design, construction, implementation, or maintenance
of the models.
Risk
of Investment in Other Funds or Pools The Fund is indirectly exposed to all of the risks of the underlying funds, including
ETFs, in which it invests, including the risk that the underlying funds will not perform as expected. ETFs are subject to additional risks,
including secondary market trading risks and the risk that an ETF’s shares may trade above or below net asset value. The Fund indirectly
pays a portion of the expenses incurred by the underlying funds.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
Valuation Risk The
Fund is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are
fair valued.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Service Class shares. The table shows how the Fund’s average annual returns
for 1, 5, and 10 years compare with those of a broad measure of market performance. The Fund’s investment objective and investment
strategy changed on November 18, 2020. The performance results shown below would not necessarily have been achieved had the Fund’s
current investment strategy been in effect for the entire period for which performance results are presented. Performance for Class I,
Class R4, and Class R3 shares of the Fund for periods prior to their inception date (04/01/14) is based on the performance of Class R5
shares, adjusted for Class R4 and Class R3 shares to reflect Class R4 and Class R3 expenses, respectively. Performance
for Class A shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Service Class Shares
|
Highest Quarter:
|
|
|
2Q ’20,
|
|
|
|
|
26.42 |
% |
|
Lowest Quarter:
|
|
|
4Q ’18,
|
|
|
–16.47%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold
Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Service Class only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Service Class
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
27.89 |
% |
|
|
|
|
22.44 |
% |
|
|
|
|
18.34 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
14.81 |
% |
|
|
|
|
16.40 |
% |
|
|
|
|
13.66 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares |
|
|
|
|
|
22.02 |
% |
|
|
|
|
16.31 |
% |
|
|
|
|
13.51 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
28.13 |
% |
|
|
|
|
22.69 |
% |
|
|
|
|
18.56 |
% |
Class R5
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
28.05 |
% |
|
|
|
|
22.58 |
% |
|
|
|
|
18.47 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
27.73 |
% |
|
|
|
|
22.32 |
% |
|
|
|
|
18.22 |
% |
Class A
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
20.40 |
% |
|
|
|
|
20.64 |
% |
|
|
|
|
17.25 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
27.50 |
% |
|
|
|
|
22.13 |
% |
|
|
|
|
18.05 |
% |
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
27.18 |
% |
|
|
|
|
21.82 |
% |
|
|
|
|
17.75 |
% |
Russell
1000 Growth Index (reflects
no deduction for fees, expenses, or taxes)
|
|
|
|
|
|
27.60 |
% |
|
|
|
|
25.32 |
% |
|
|
|
|
19.79 |
% |
MANAGEMENT
Investment Adviser: MML
Investment Advisers, LLC (“MML Advisers”)
Subadviser(s): Wellington
Management Company LLP (“Wellington Management”)
Portfolio Manager(s):
Matt J.
Kyller, CFA is a Managing Director and Research Manager at Wellington Management. He has managed the Fund since February
2021.
Tom S.
Simon, CFA, FRM is a Senior Managing Director and Portfolio Manager at Wellington Management. He has managed the Fund since
November 2020.
PURCHASE
AND SALE OF FUND SHARES
Shares of the Fund are generally available to retirement
plans, other institutional investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request,
telephone, or internet (available to certain customers).
TAX
INFORMATION
The Fund intends to make distributions that may be taxed
as ordinary income, qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other
financial intermediary, the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates,
or others for the sale of Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict
of interest by influencing the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your
intermediary to obtain more information about the compensation it may receive in connection with your investment.
MassMutual
Small Cap Opportunities Fund (formerly known as MassMutual Premier Small Cap Opportunities Fund)
INVESTMENT
OBJECTIVE
This Fund seeks capital appreciation.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you
may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A shares,
you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
5.50%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
0.57%
|
|
|
0.57%
|
|
|
0.57%
|
|
|
0.57%
|
|
|
0.57%
|
|
|
0.57%
|
|
|
0.57%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.08%
|
|
|
0.18%
|
|
|
0.28%
|
|
|
0.38%
|
|
|
0.38%
|
|
|
0.28%
|
|
|
0.28%
|
|
Total Annual Fund Operating Expenses
|
|
|
0.65%
|
|
|
0.75%
|
|
|
0.85%
|
|
|
0.95%
|
|
|
1.20%
|
|
|
1.10%
|
|
|
1.35%
|
|
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in each share class of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial
sales charge. The example also assumes that your investment earns a 5% return each year and that the Fund’s operating expenses are
exactly as described in the preceding table. Although your
actual costs may be higher or lower, based on these assumptions your costs would be at the
end of each period:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
66 |
|
|
|
|
$ |
208 |
|
|
|
|
$ |
362 |
|
|
|
|
$ |
810 |
|
|
Class R5 |
|
|
|
$ |
77 |
|
|
|
|
$ |
240 |
|
|
|
|
$ |
417 |
|
|
|
|
$ |
930 |
|
|
Service Class |
|
|
|
$ |
87 |
|
|
|
|
$ |
271 |
|
|
|
|
$ |
471 |
|
|
|
|
$ |
1,049 |
|
|
Administrative Class |
|
|
|
$ |
97 |
|
|
|
|
$ |
303 |
|
|
|
|
$ |
525 |
|
|
|
|
$ |
1,166 |
|
|
Class A |
|
|
|
$ |
666 |
|
|
|
|
$ |
910 |
|
|
|
|
$ |
1,173 |
|
|
|
|
$ |
1,925 |
|
|
Class R4 |
|
|
|
$ |
112 |
|
|
|
|
$ |
350 |
|
|
|
|
$ |
606 |
|
|
|
|
$ |
1,340 |
|
|
Class R3 |
|
|
|
$ |
137 |
|
|
|
|
$ |
428 |
|
|
|
|
$ |
739 |
|
|
|
|
$ |
1,624 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 40%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
The Fund invests primarily in common stocks of small-capitalization
U.S. companies that the Fund’s subadviser, Invesco Advisers, Inc. (“Invesco Advisers”),
believes have favorable business trends or prospects based on fundamental analysis. Under normal circumstances, the Fund invests at least
80% of its net assets (plus the amount of any borrowings for investment purposes) in securities of small-cap companies. Invesco Advisers
currently considers “small-cap” companies to be those whose market capitalizations at the time of purchase are within the
market capitalization range of companies included in the Russell 2000®
Index (as of December 31, 2021, between $31.57 million and $13.98 billion). The Fund typically invests most of its assets in equity
securities of U.S. companies, but may invest in foreign securities, including emerging market securities. The Fund generally will not
invest more than 15% of its total assets in foreign securities. The Fund may at times have significant exposure to one or more industries
or sectors. The Fund may hold a portion of its assets in cash or cash equivalents.
The portfolio is constructed and regularly monitored based upon several analytical tools,
including quantitative investment models. Quantitative models are used as part of the idea generation process to rank securities within
each sector to identify potential buy and sell candidates for further fundamental analysis. The Fund aims to maintain a broadly diversified
portfolio across major economic sectors by applying investment parameters for both sector and position size.
In constructing the portfolio, the Fund seeks to limit
exposure to so-called “top-down” or “macro” risks, such as overall stock market movements, economic cycles, and
interest rate or currency fluctuations. Instead, Invesco Advisers seeks to add value by selecting individual securities with superior
company-specific fundamental attributes or relative valuations that they expect to outperform their industry and sector peers. This is
commonly referred to as a “bottom-up” approach to portfolio construction. Invesco Advisers considers stock rankings, benchmark
weightings, and capitalization outlooks in determining security weightings for individual issuers.
Invesco Advisers may consider selling a security if,
for example, in its judgment, a stock’s price is approaching its target, a company’s competitive position deteriorates, a
company’s management is executing strategy poorly, or more attractive alternative investment ideas have been identified.
Principal
Risks
The following are the Principal Risks of the Fund. The value of your investment
in the Fund could go down as well as up. You can lose money by investing in the
Fund. Certain risks relating to instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market
conditions, and other factors. You should read all of the risk information presented below carefully, because any one or more of these
risks may result in losses to the Fund.
Equity Securities Risk Although
stocks may have the potential to outperform other asset classes over the long term, their prices tend to fluctuate more dramatically over
the shorter term. These movements may result from factors affecting individual companies, or from broader influences like changes in interest
rates, market conditions, or investor confidence, or announcements of economic, political, or financial information.
Small and Mid-Cap Company Risk Market
risk and liquidity risk are particularly pronounced for securities of small and medium-sized companies, which may trade less frequently
and in smaller volumes than more widely-held securities, and may fluctuate in price more than other securities. Their shares can be less
liquid than those of larger companies, especially during market declines. Small and medium-sized companies may have limited product lines,
markets, or financial resources and may be dependent on a limited management group; they may have been recently organized and have little
or no track record of success.
Foreign Investment Risk;
Emerging Markets Risk; Currency Risk Investments in securities of foreign issuers, securities of companies with significant
foreign exposure, and foreign currencies can involve additional risks relating to market, industry, political, regulatory, public health,
and other conditions. Political, social, diplomatic, and economic developments, U.S. and foreign government action such as the imposition
of currency or capital blockages, controls, or tariffs, economic and trade sanctions or embargoes, security suspensions, entering or exiting
trade or other intergovernmental agreements, or the expropriation or nationalization of assets in a particular country, can cause dramatic
declines in certain or all securities with exposure to that country and other countries. In the event of nationalization, expropriation,
or other confiscation, the Fund could lose its entire foreign investment in a particular country. There may be quotas or other limits
on the ability of the Fund (or clients of the Fund’s investment adviser or subadviser) to invest or maintain investments in securities
of issuers in certain countries. Enforcing legal rights can be more difficult, costly, and limited in certain foreign countries, and can
be particularly difficult against foreign governments. Because non-U.S. securities are normally denominated and traded in currencies other
than the U.S. dollar, the value of the Fund’s assets may be affected favorably or unfavorably by changes in currency exchange rates,
exchange control regulations, and restrictions or prohibitions on the repatriation of non-U.S. currencies. Income and gains with respect
to investments in certain countries may be subject to withholding and other taxes. There may be less information publicly available about
a non-U.S. company than about a U.S. company, and many non-U.S. companies are not subject to accounting, auditing, and financial reporting
standards, regulatory framework and practices comparable to those in
the U.S. The securities of some non-U.S. companies, especially those in emerging markets,
are less liquid and at times more volatile than securities of comparable U.S. companies. Emerging markets securities are subject to greater
risks than securities issued in developed foreign markets, including less liquidity, less stringent investor protection and disclosure
standards, greater price volatility, higher relative rates of inflation, greater political, economic, and social instability, greater
custody and operational risks, and greater volatility in currency exchange rates, and are more susceptible to environmental problems.
Many emerging market countries are highly reliant on international trade and exports, including the export of commodities. Their economies
may be significantly impacted by fluctuations in commodity prices and the global demand for certain commodities. In addition, many emerging
market countries with less established health care systems have experienced outbreaks of pandemics or contagious diseases from time to
time. Frontier markets, a subset of emerging markets, generally have smaller economies and less mature capital markets than emerging markets.
As a result, the risks of investing in emerging market countries are magnified in frontier market countries. Frontier markets are more
susceptible to having abrupt changes in currency values, less mature markets and settlement practices, and lower trading volumes that
could lead to greater price volatility and illiquidity. Non-U.S. transaction costs, such as brokerage commissions and custody costs, may
be higher than in the United States. In addition, foreign markets can react differently to market, economic, industry, political, regulatory,
geopolitical, public health, and other conditions than the U.S. market.
Growth Company Risk The
prices of growth securities are often highly sensitive to market fluctuations because of their heavy dependence on future earnings or
cash flow expectations, and can be more volatile than the market in general.
Value Company Risk The
value investment approach entails the risk that the market will not recognize a security’s intrinsic value for a long time, or that
a stock the investment adviser or subadviser judges to be undervalued may actually be appropriately priced.
Cash Position Risk If
the Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the
Fund may not achieve its investment objective.
Liquidity Risk Certain securities
may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price, and the Fund
may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid investments
at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject to restrictions
on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time. The Fund may not
receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable
market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline significantly in response
to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as investor perceptions
of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage, industry problems,
and reduced demand for goods or services.
Quantitative Models Risk The
portfolio managers use quantitative models as part of the idea generation process. Quantitative models are based upon many factors that
measure individual securities relative to each other. Such models may not produce the intended results and can be adversely affected by
errors or imperfections in the factors or the data on which measurements are based, changing sources of market return or market risk,
or any technical issues with the design, construction, implementation, or maintenance of the models.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
Valuation Risk The Fund
is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are fair
valued.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class A shares. The
returns in the bar chart do not reflect the deduction of any applicable Class A sales charge. If these charges were reflected, returns
would be lower than those shown. The table shows how the Fund’s average annual returns for 1, 5, and 10 years
compare with those of a broad measure of market performance. The Fund expanded its investment universe to include investing in mid cap
companies in May of 2011. In April of 2013 the Fund returned to focusing on small cap companies. The performance results shown below would
not necessarily have been achieved had the Fund’s current investment strategy been in effect for the entire period for which performance
results are presented. Performance for Class I, Class R4, and Class R3 shares of the Fund for periods prior to their inception
date (04/01/14) is based on the performance of Class R5 shares, adjusted for Class R4 and Class R3 shares to reflect Class R4
and Class R3 expenses, respectively. Performance
for Class A shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Class A Shares
|
Highest Quarter:
|
|
|
2Q ’20,
|
|
|
|
|
28.30 |
% |
|
Lowest Quarter:
|
|
|
1Q ’20,
|
|
|
–30.90%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual
after-tax returns depend on an
investor’s
tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold Fund shares through tax-advantaged
arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Class A only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class A
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
15.04 |
% |
|
|
|
|
11.87 |
% |
|
|
|
|
13.60 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
12.15 |
% |
|
|
|
|
9.57 |
% |
|
|
|
|
11.61 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares |
|
|
|
|
|
10.46 |
% |
|
|
|
|
8.82 |
% |
|
|
|
|
10.72 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
22.42 |
% |
|
|
|
|
13.76 |
% |
|
|
|
|
14.84 |
% |
Class R5
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
22.28 |
% |
|
|
|
|
13.64 |
% |
|
|
|
|
14.75 |
% |
Service
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
22.21 |
% |
|
|
|
|
13.53 |
% |
|
|
|
|
14.63 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
22.03 |
% |
|
|
|
|
13.42 |
% |
|
|
|
|
14.52 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
21.90 |
% |
|
|
|
|
13.25 |
% |
|
|
|
|
14.36 |
% |
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
21.61 |
% |
|
|
|
|
12.96 |
% |
|
|
|
|
14.07 |
% |
Russell
2000 Index (reflects
no deduction for fees, expenses, or taxes)
|
|
|
|
|
|
14.82 |
% |
|
|
|
|
12.02 |
% |
|
|
|
|
13.23 |
% |
MANAGEMENT
Investment Adviser: MML Investment
Advisers, LLC (“MML Advisers”)
Subadviser(s): Invesco
Advisers, Inc. (“Invesco Advisers”)
Portfolio Manager(s):
Joy
Budzinski is a Portfolio Manager at Invesco Advisers. She has managed the Fund since April 2013.
Kristin
Ketner Pak is a Portfolio Manager at Invesco Advisers. She has managed the Fund since April 2013.
Magnus
Krantz is a Portfolio Manager at Invesco Advisers. He has managed the Fund since April 2013.
Raman Vardharaj,
CFA is a Portfolio Manager at Invesco Advisers. He has managed the Fund since May 2009.
Adam
Weiner is a Portfolio Manager at Invesco Advisers. He has managed the Fund since April 2013.
Matthew
P. Ziehl, CFA is a Portfolio Manager at Invesco Advisers. He has managed the Fund since May 2009.
PURCHASE AND SALE
OF FUND SHARES
Shares of the Fund are generally available to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request, telephone, or internet
(available to certain customers).
TAX INFORMATION
The Fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS AND
OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other financial intermediary,
the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates, or others for related to
the sale of Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict of interest
by influencing the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your intermediary
to obtain more information about the compensation it may receive in connection with your investment.
MassMutual
Global Fund (formerly known as MassMutual Premier Global Fund)
INVESTMENT
OBJECTIVE
The Fund seeks long-term capital appreciation.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you
may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A shares,
you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
5.50%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
0.75%
|
|
|
0.75%
|
|
|
0.75%
|
|
|
0.75%
|
|
|
0.75%
|
|
|
0.75%
|
|
|
0.75%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.09%
|
|
|
0.19%
|
|
|
0.29%
|
|
|
0.39%
|
|
|
0.39%
|
|
|
0.29%
|
|
|
0.29%
|
|
Total Annual Fund Operating Expenses
|
|
|
0.84%
|
|
|
0.94%
|
|
|
1.04%
|
|
|
1.14%
|
|
|
1.39%
|
|
|
1.29%
|
|
|
1.54%
|
|
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in each share class of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial
sales charge. The example also assumes that your investment earns a 5% return each year and that the Fund’s operating expenses are
exactly as described in the preceding table. Although your
actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
86 |
|
|
|
|
$ |
268 |
|
|
|
|
$ |
466 |
|
|
|
|
$ |
1,037 |
|
|
Class R5 |
|
|
|
$ |
96 |
|
|
|
|
$ |
300 |
|
|
|
|
$ |
520 |
|
|
|
|
$ |
1,155 |
|
|
Service Class |
|
|
|
$ |
106 |
|
|
|
|
$ |
331 |
|
|
|
|
$ |
574 |
|
|
|
|
$ |
1,271 |
|
|
Administrative Class |
|
|
|
$ |
116 |
|
|
|
|
$ |
362 |
|
|
|
|
$ |
628 |
|
|
|
|
$ |
1,386 |
|
|
Class A |
|
|
|
$ |
684 |
|
|
|
|
$ |
966 |
|
|
|
|
$ |
1,269 |
|
|
|
|
$ |
2,127 |
|
|
Class R4 |
|
|
|
$ |
131 |
|
|
|
|
$ |
409 |
|
|
|
|
$ |
708 |
|
|
|
|
$ |
1,556 |
|
|
Class R3 |
|
|
|
$ |
157 |
|
|
|
|
$ |
486 |
|
|
|
|
$ |
839 |
|
|
|
|
$ |
1,834 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 10%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
The Fund invests primarily in common stocks of companies in the U.S. and
foreign countries. The Fund can invest without limit in foreign securities, including American Depositary Receipts (“ADRs”),
and can invest in any country, including developing or emerging market countries. However, the Fund currently emphasizes investments in
developed markets such as the United States, Western European countries, and Japan. The Fund is not required to allocate its investments
in any set percentages to any particular countries. As a fundamental policy, the Fund normally will invest in at least three countries
(one of which may be the United States). Typically, the Fund invests in a number of different countries. The Fund does not limit its investments
to companies in a particular market capitalization range, but currently focuses on common stocks of mid- and large-cap companies. The
Fund may purchase exchange-traded options for hedging purposes or to take long or short positions on equity securities or indexes of equity
securities. Use of derivatives by the Fund may create investment leverage. The Fund may at times have significant exposure to
one or more industries or sectors. The Fund may hold a portion of its assets in cash or
cash equivalents.
The Fund’s subadviser, Invesco
Advisers, Inc. (“Invesco Advisers”), primarily looks for quality companies, regardless of domicile, that have sustainable
growth. Invesco Advisers’ investment approach combines a thematic approach to idea generation with bottom-up, fundamental company
analysis. Invesco Advisers seeks to identify secular changes in the world and looks for pockets of durable change that it believes will
drive global growth for the next decade. These large scale structural themes are referred to collectively as MANTRA®:
Mass Affluence, New Technology, Restructuring, and Aging. Invesco Advisers does not target a fixed allocation with regard to any particular
theme, and may choose to focus on various sub-themes within each theme. Within each sub-theme, Invesco Advisers employs fundamental company
analysis to select investments for the Fund’s portfolio. The economic characteristics Invesco Advisers seeks include a combination
of high return on invested capital, good cash flow characteristics, high barriers to entry, dominant market share, a strong competitive
position, talented management, and balance sheet strength that Invesco Advisers believes will enable the company to fund its own growth.
These criteria may vary. Invesco Advisers also considers how industry dynamics, market trends, and general economic conditions may affect
a company’s earnings outlook.
Invesco Advisers has a long-term investment horizon of
typically three to five years. Invesco Advisers also has a contrarian buy discipline; Invesco Advisers buys high quality companies
that fit its investment criteria when their valuations underestimate their long-term earnings potential. For example, a company’s
stock price may dislocate from its fundamental outlook due to a short-term earnings glitch or negative, short-term market sentiment, which
can give rise to an investment opportunity. Invesco Advisers monitors individual issuers for changes in earnings potential or other effects
of changing market conditions that may trigger a decision to sell a security, but do not require a decision to do so.
Principal
Risks
The following are the Principal Risks of the Fund. The value of your investment
in the Fund could go down as well as up. You can lose money by investing in the
Fund. Certain risks relating to
instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market
conditions, and other factors. You should read all of the risk information presented below carefully, because any one or more of these
risks may result in losses to the Fund.
Equity Securities Risk Although
stocks may have the potential to outperform other asset classes over the long term, their prices tend to fluctuate more dramatically over
the shorter term. These movements may result from factors affecting individual companies, or from broader influences like changes in interest
rates, market conditions, or investor confidence, or announcements of economic, political, or financial information.
Derivatives Risk Derivatives
can be highly volatile and involve risks different from, and potentially greater than, direct investments, including risks of imperfect
correlation between the value of derivatives and underlying assets, counterparty default, potential losses that partially or completely
offset gains, and illiquidity. Derivatives can create investment leverage. Losses from derivatives can be substantially greater than the
derivatives’ original cost and can sometimes be unlimited. If the value of a derivative does not correlate well with the particular
market or asset class the derivative is designed to provide exposure to, the derivative may not have the effect or benefit anticipated.
Derivatives can also reduce the opportunity for gains or result in losses by offsetting positive returns in other investments. Many derivatives
are traded in the over-the-counter market and not on exchanges.
Foreign Investment Risk;
Emerging Markets Risk; Currency Risk Investments in securities of foreign issuers, securities of companies with significant
foreign exposure, and foreign currencies can involve additional risks relating to market, industry, political, regulatory, public health,
and other conditions. Political, social, diplomatic, and economic developments, U.S. and foreign government action such as the imposition
of currency or capital blockages, controls, or tariffs, economic and trade sanctions or embargoes, security suspensions, entering or exiting
trade or other intergovernmental agreements, or the expropriation or nationalization of assets in a particular country, can cause dramatic
declines in certain or all securities with exposure to that
country and other countries. In the event of nationalization, expropriation, or other confiscation,
the Fund could lose its entire foreign investment in a particular country. There may be quotas or other limits on the ability of the Fund
(or clients of the Fund’s investment adviser or subadviser) to invest or maintain investments in securities of issuers in certain
countries. Enforcing legal rights can be more difficult, costly, and limited in certain foreign countries, and can be particularly difficult
against foreign governments. Because non-U.S. securities are normally denominated and traded in currencies other than the U.S. dollar,
the value of the Fund’s assets may be affected favorably or unfavorably by changes in currency exchange rates, exchange control
regulations, and restrictions or prohibitions on the repatriation of non-U.S. currencies. Income and gains with respect to investments
in certain countries may be subject to withholding and other taxes. There may be less information publicly available about a non-U.S.
company than about a U.S. company, and many non-U.S. companies are not subject to accounting, auditing, and financial reporting standards,
regulatory framework and practices comparable to those in the U.S. The securities of some non-U.S. companies, especially those in emerging
markets, are less liquid and at times more volatile than securities of comparable U.S. companies. Emerging markets securities are subject
to greater risks than securities issued in developed foreign markets, including less liquidity, less stringent investor protection and
disclosure standards, greater price volatility, higher relative rates of inflation, greater political, economic, and social instability,
greater custody and operational risks, and greater volatility in currency exchange rates, and are more susceptible to environmental problems.
Many emerging market countries are highly reliant on international trade and exports, including the export of commodities. Their economies
may be significantly impacted by fluctuations in commodity prices and the global demand for certain commodities. In addition, many emerging
market countries with less established health care systems have experienced outbreaks of pandemics or contagious diseases from time to
time. Frontier markets, a subset of emerging markets, generally have smaller economies and less mature capital markets than emerging markets.
As a result, the risks of investing in emerging market countries are magnified in frontier market countries. Frontier markets are more
susceptible to having abrupt changes in currency values, less mature markets and
settlement practices, and lower trading volumes that could lead to greater price volatility
and illiquidity. Non-U.S. transaction costs, such as brokerage commissions and custody costs, may be higher than in the United States.
In addition, foreign markets can react differently to market, economic, industry, political, regulatory, geopolitical, public health,
and other conditions than the U.S. market.
Growth Company Risk The
prices of growth securities are often highly sensitive to market fluctuations because of their heavy dependence on future earnings or
cash flow expectations, and can be more volatile than the market in general.
Large Company Risk Large-capitalization
stocks as a group could fall out of favor with the market, causing the Fund’s investments in large-capitalization stocks to underperform
investments that focus on small- or medium-capitalization stocks. Larger, more established companies may be slow to respond to challenges
and may grow more slowly than smaller companies.
Small and Mid-Cap Company
Risk Market risk and liquidity risk are particularly pronounced for securities of small and medium-sized companies, which
may trade less frequently and in smaller volumes than more widely-held securities, and may fluctuate in price more than other securities.
Their shares can be less liquid than those of larger companies, especially during market declines. Small and medium-sized companies may
have limited product lines, markets, or financial resources and may be dependent on a limited management group; they may have been recently
organized and have little or no track record of success.
Cash Position Risk If
the Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the
Fund may not achieve its investment objective.
Focused
Portfolio Risk Because the Fund tends to invest its assets in a relatively small number of stocks, rather than hundreds,
a decline in the market value of a particular security may affect the Fund’s value more than if the Fund invested in a larger number
of securities.
Geographic
Focus Risk When the Fund focuses investments on a particular country, group of countries, or geographic region, its performance
will be closely tied to the market, currency, economic, political, or regulatory conditions and
developments in those countries or that region, and could be more volatile
than the performance of more geographically diversified funds.
Hedging Risk The
Fund’s attempts at hedging and taking long and short positions in currencies may not be successful and could cause the Fund to lose
money or fail to get the benefit of a gain on a hedged position. If expected changes to securities prices, interest rates, currency values,
and exchange rates, or the creditworthiness of an issuer are not accurately predicted, the Fund could be in a worse position than if it
had not entered into such transactions.
LIBOR Risk Certain
instruments in which the Fund may invest rely in some fashion upon the London-Interbank Offered Rate (“LIBOR”). The United
Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced plans to phase out the use of LIBOR by the end of 2021.
There remains uncertainty regarding the future utilization of LIBOR, including an extension by the ICE Benchmark Administration to postpone
certain aspects of the LIBOR transition to June 2023, and the nature of any replacement rate, and any potential effects of the transition
away from LIBOR on the Fund or on certain instruments in which the Fund invests are not known. The transition process may involve, among
other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR. Uncertainty and volatility
arising from the transition may result in a reduction in the value of certain LIBOR-based instruments held by the Fund or reduce the effectiveness
of related transactions such as hedges. Any such effects of the transition away from LIBOR, as well as other unforeseen effects, could
result in losses to the Fund.
Liquidity Risk Certain
securities may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price,
and the Fund may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid
investments at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject
to restrictions on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time.
The Fund may not receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of
investments to achieve its investment objective. There can be no assurance that the Fund
will achieve the intended results and the Fund may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable
market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline significantly in response
to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as investor perceptions
of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage, industry problems,
and reduced demand for goods or services.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
Special
Situations Risk At times, the Fund may seek to benefit from what it considers to be “special situations,” such
as mergers, reorganizations, restructurings or other unusual events that are expected to affect a particular issuer. There is a risk that
the expected change or event might not occur, which could cause the price of the security to fall, perhaps sharply. In that case, the
investment might not produce the expected gains or might cause a loss. This is an aggressive investment technique that may be considered
speculative.
Valuation Risk The
Fund is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are
fair valued.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class R5 shares. The table shows how the Fund’s average annual returns for
1, 5, and 10 years compare with those of a broad measure of market performance. Performance for Class I and Class R4 shares of the Fund
for periods prior to their inception date (04/01/14) is based on the performance of Class R5 shares, adjusted for Class R4 shares to reflect
Class R4
expenses. Performance
for Class A shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Class R5 Shares
|
Highest Quarter:
|
|
|
2Q ’20,
|
|
|
|
|
25.58 |
% |
|
Lowest Quarter:
|
|
|
1Q ’20,
|
|
|
–21.69%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold
Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Class R5 only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class R5
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
15.23 |
% |
|
|
|
|
17.94 |
% |
|
|
|
|
14.03 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
12.35 |
% |
|
|
|
|
15.20 |
% |
|
|
|
|
12.17 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares |
|
|
|
|
|
11.08 |
% |
|
|
|
|
13.89 |
% |
|
|
|
|
11.27 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
15.35 |
% |
|
|
|
|
18.04 |
% |
|
|
|
|
14.11 |
% |
Service
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
15.14 |
% |
|
|
|
|
17.82 |
% |
|
|
|
|
13.90 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
15.01 |
% |
|
|
|
|
17.69 |
% |
|
|
|
|
13.79 |
% |
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class A
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
8.39 |
% |
|
|
|
|
16.09 |
% |
|
|
|
|
12.85 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
14.88 |
% |
|
|
|
|
17.54 |
% |
|
|
|
|
13.63 |
% |
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
14.49 |
% |
|
|
|
|
17.22 |
% |
|
|
|
|
13.34 |
% |
MSCI
ACWI (reflects
no deduction for fees or expenses)
|
|
|
|
|
|
18.54 |
% |
|
|
|
|
14.40 |
% |
|
|
|
|
11.85 |
% |
MANAGEMENT
Investment Adviser: MML Investment
Advisers, LLC (“MML Advisers”)
Subadviser(s): Invesco
Advisers, Inc. (“Invesco Advisers”)
Portfolio Manager(s):
John
Delano, CFA is a Senior Portfolio Manager at Invesco Advisers. He has managed the Fund since March 2017.
PURCHASE AND SALE
OF FUND SHARES
Shares of the Fund are generally available to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request, telephone, or internet
(available to certain customers).
TAX INFORMATION
The Fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other financial intermediary,
the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates, or others for the sale of
Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict of interest by influencing
the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your intermediary to obtain
more information about the compensation it may receive in connection with your investment.
MassMutual
International Equity Fund (formerly known as MassMutual Premier International Equity Fund)
INVESTMENT
OBJECTIVE
This Fund seeks to achieve long-term capital appreciation by investing primarily
in common stock of foreign companies.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you
may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A
shares, you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
5.50%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
0.83%
|
|
|
0.83%
|
|
|
0.83%
|
|
|
0.83%
|
|
|
0.83%
|
|
|
0.83%
|
|
|
0.83%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.19%
|
|
|
0.29%
|
|
|
0.39%
|
|
|
0.49%
|
|
|
0.49%
|
|
|
0.39%
|
|
|
0.39%
|
|
Total Annual Fund Operating Expenses
|
|
|
1.02%
|
|
|
1.12%
|
|
|
1.22%
|
|
|
1.32%
|
|
|
1.57%
|
|
|
1.47%
|
|
|
1.72%
|
|
Fee
Waiver |
|
|
(0.05%)
|
|
|
(0.05%)
|
|
|
(0.05%)
|
|
|
(0.05%)
|
|
|
(0.05%)
|
|
|
(0.05%)
|
|
|
(0.05%)
|
|
Total Annual
Fund Operating Expenses after Fee Waiver(1)
|
|
|
0.97%
|
|
|
1.07%
|
|
|
1.17%
|
|
|
1.27%
|
|
|
1.52%
|
|
|
1.42%
|
|
|
1.67%
|
|
(1)
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that
you invest $10,000 in each share class of the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial sales charge. The example
also assumes that your investment earns a 5% return each year and that the Fund’s operating expenses are exactly as described in
the preceding table. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
99 |
|
|
|
|
$ |
320 |
|
|
|
|
$ |
558 |
|
|
|
|
$ |
1,243 |
|
|
Class R5 |
|
|
|
$ |
109 |
|
|
|
|
$ |
351 |
|
|
|
|
$ |
612 |
|
|
|
|
$ |
1,359 |
|
|
Service Class |
|
|
|
$ |
119 |
|
|
|
|
$ |
382 |
|
|
|
|
$ |
666 |
|
|
|
|
$ |
1,473 |
|
|
Administrative Class |
|
|
|
$ |
129 |
|
|
|
|
$ |
413 |
|
|
|
|
$ |
719 |
|
|
|
|
$ |
1,586 |
|
|
Class A |
|
|
|
$ |
696 |
|
|
|
|
$ |
1,014 |
|
|
|
|
$ |
1,354 |
|
|
|
|
$ |
2,311 |
|
|
Class R4 |
|
|
|
$ |
145 |
|
|
|
|
$ |
460 |
|
|
|
|
$ |
798 |
|
|
|
|
$ |
1,753 |
|
|
Class R3 |
|
|
|
$ |
170 |
|
|
|
|
$ |
537 |
|
|
|
|
$ |
929 |
|
|
|
|
$ |
2,026 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 30%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
The Fund invests primarily in the common stock of companies that are domiciled
or that have their primary operations outside of the United States. The Fund is managed by two subadvisers, Wellington
Management Company LLP (“Wellington Management”) and Thompson, Siegel & Walmsley
LLC (“TSW”), each being responsible for a portion of the portfolio, although they may manage different amounts of the
Fund’s assets. Under normal circumstances, the Fund invests at least 80% of its net assets (plus the amount of any borrowings for
investment purposes) in securities of foreign companies. The Fund may invest up to 100% of its total assets in such securities. The Fund
may invest in emerging markets as well as in developed markets throughout
the world. From time to time, the Fund may place greater emphasis on investing in one or
more particular regions (such as Asia, Europe, or Latin America). Under normal market conditions, the Fund will:
•
invest at least 65% of its total
assets in common and preferred stocks of issuers in at least three different countries outside of the United States, and
•
emphasize investments in common
stock of issuers that a subadviser believes to have good prospects for growth and/or to be undervalued.
The Fund does not limit its investments to companies in a particular market
capitalization range, but currently focuses on common stocks of mid- and large-cap companies. Equity securities in which the Fund invests
may include common stocks, depositary receipts, preferred stocks, securities convertible into common or preferred stock, rights, and warrants.
The Fund may but will not necessarily engage in foreign currency forward contracts to take long or short positions in foreign currencies
in order to seek to enhance the Fund’s investment return or to seek to hedge or to attempt to protect against adverse changes in
currency exchange rates. The Fund may use equity index futures contracts for hedging or investment purposes as a substitute for investing
directly in securities. Use of derivatives by the Fund may create investment leverage. The Fund may invest in real estate investment trusts
(“REITs”) and exchange-traded funds. The Fund may at times have significant exposure to one or more industries or sectors
or to one or more countries or geographic regions. The Fund may hold a portion of its assets in cash or cash equivalents.
Wellington Management seeks long-term total returns in excess of the broad
market with lower volatility by investing principally in a select number of high quality, large-cap companies that have the potential
to sustainably compound returns over time and a willingness to consistently return value to shareholders in the form of a growing dividend.
The investment process stresses security selection based on bottom-up fundamental research to identify high-quality companies that are
reasonably valued relative to their long-term return potentials. Wellington Management’s investment philosophy is based on the premise
that sustainable growth in dividends is an effective and often overlooked indicator of high-quality, shareholder-oriented companies that
are able to produce and compound consistent, above-average returns over the long term. Wellington Management typically sells a
security when the underlying business no longer exhibits superior upside return potential
versus downside risk, when the sustainability of long term returns is put in question, or to redeploy assets into more promising opportunities.
TSW currently anticipates investing in at least 12
countries other than the United States. TSW emphasizes established companies in individual foreign markets and attempts to stress companies
and markets that it believes are undervalued. TSW expects capital growth to be the predominant component of the Fund’s total return.
In selecting investments for the Fund, TSW employs a relative value process
utilizing a combination of quantitative and qualitative methods based on a four factor valuation screen designed to outperform the MSCI
EAFE Index. TSW’s analysts also perform rigorous fundamental analysis. A portfolio composed of approximately 80-110 stocks is selected
as a result of this process. TSW generally limits its investment universe to companies with a minimum of three years of operating history.
TSW employs a consistent sell discipline which includes a significant negative earnings revision, a stock being sold when the catalyst
is no longer valid or another stock presents a more attractive opportunity.
Principal
Risks
The following are the Principal Risks of the Fund. The value of your investment
in the Fund could go down as well as up. You can lose money by investing in the
Fund. Certain risks relating to instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market
conditions, and other factors. You should read all of the risk information presented below carefully, because any one or more of these
risks may result in losses to the Fund.
Equity Securities Risk Although
stocks may have the potential to outperform other asset classes over the long term, their prices tend to fluctuate more dramatically over
the shorter term. These movements may result from factors affecting individual companies, or from broader influences like changes in interest
rates, market conditions, or investor confidence, or announcements of economic, political, or financial information.
Foreign Investment Risk;
Emerging Markets Risk; Currency Risk Investments in securities of foreign issuers, securities of companies with significant
foreign exposure, and foreign currencies can involve additional risks relating to market,
industry, political, regulatory, public health, and other conditions. Political, social, diplomatic, and economic developments, U.S. and
foreign government action such as the imposition of currency or capital blockages, controls, or tariffs, economic and trade sanctions
or embargoes, security suspensions, entering or exiting trade or other intergovernmental agreements, or the expropriation or nationalization
of assets in a particular country, can cause dramatic declines in certain or all securities with exposure to that country and other countries.
In the event of nationalization, expropriation, or other confiscation, the Fund could lose its entire foreign investment in a particular
country. There may be quotas or other limits on the ability of the Fund (or clients of the Fund’s investment adviser or subadviser)
to invest or maintain investments in securities of issuers in certain countries. Enforcing legal rights can be more difficult, costly,
and limited in certain foreign countries, and can be particularly difficult against foreign governments. Because non-U.S. securities are
normally denominated and traded in currencies other than the U.S. dollar, the value of the Fund’s assets may be affected favorably
or unfavorably by changes in currency exchange rates, exchange control regulations, and restrictions or prohibitions on the repatriation
of non-U.S. currencies. Income and gains with respect to investments in certain countries may be subject to withholding and other taxes.
There may be less information publicly available about a non-U.S. company than about a U.S. company, and many non-U.S. companies are not
subject to accounting, auditing, and financial reporting standards, regulatory framework and practices comparable to those in the U.S.
The securities of some non-U.S. companies, especially those in emerging markets, are less liquid and at times more volatile than securities
of comparable U.S. companies. Emerging markets securities are subject to greater risks than securities issued in developed foreign markets,
including less liquidity, less stringent investor protection and disclosure standards, greater price volatility, higher relative rates
of inflation, greater political, economic, and social instability, greater custody and operational risks, and greater volatility in currency
exchange rates, and are more susceptible to environmental problems. Many emerging market countries are highly reliant on international
trade and exports, including the export of commodities. Their economies may be
significantly impacted by fluctuations in commodity prices and the global demand for certain
commodities. In addition, many emerging market countries with less established health care systems have experienced outbreaks of pandemics
or contagious diseases from time to time. Frontier markets, a subset of emerging markets, generally have smaller economies and less mature
capital markets than emerging markets. As a result, the risks of investing in emerging market countries are magnified in frontier market
countries. Frontier markets are more susceptible to having abrupt changes in currency values, less mature markets and settlement practices,
and lower trading volumes that could lead to greater price volatility and illiquidity. Non-U.S. transaction costs, such as brokerage commissions
and custody costs, may be higher than in the United States. In addition, foreign markets can react differently to market, economic, industry,
political, regulatory, geopolitical, public health, and other conditions than the U.S. market.
Derivatives Risk Derivatives
can be highly volatile and involve risks different from, and potentially greater than, direct investments, including risks of imperfect
correlation between the value of derivatives and underlying assets, counterparty default, potential losses that partially or completely
offset gains, and illiquidity. Derivatives can create investment leverage. Losses from derivatives can be substantially greater than the
derivatives’ original cost and can sometimes be unlimited. If the value of a derivative does not correlate well with the particular
market or asset class the derivative is designed to provide exposure to, the derivative may not have the effect or benefit anticipated.
Derivatives can also reduce the opportunity for gains or result in losses by offsetting positive returns in other investments. Many derivatives
are traded in the over-the-counter market and not on exchanges.
Growth Company Risk The
prices of growth securities are often highly sensitive to market fluctuations because of their heavy dependence on future earnings or
cash flow expectations, and can be more volatile than the market in general.
Large Company Risk Large-capitalization
stocks as a group could fall out of favor with the market, causing the Fund’s investments in large-capitalization stocks to underperform
investments that focus on small- or medium-capitalization stocks. Larger, more established companies may be slow to respond to challenges
and may grow more slowly than smaller companies.
Small and Mid-Cap Company Risk Market
risk and liquidity risk are particularly pronounced for securities of small and medium-sized companies, which may trade less frequently
and in smaller volumes than more widely-held securities, and may fluctuate in price more than other securities. Their shares can be less
liquid than those of larger companies, especially during market declines. Small and medium-sized companies may have limited product lines,
markets, or financial resources and may be dependent on a limited management group; they may have been recently organized and have little
or no track record of success.
Value Company Risk The
value investment approach entails the risk that the market will not recognize a security’s intrinsic value for a long time, or that
a stock the investment adviser or subadviser judges to be undervalued may actually be appropriately priced.
Cash Position Risk If
the Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the
Fund may not achieve its investment objective.
Convertible Securities
Risk Convertible securities are subject to the risks of both debt instruments and equity securities. The price of a convertible
security may change in response to changes in price of the underlying equity security, the credit quality of the issuer, and interest
rates. In general, the values of convertible securities tend to decline as interest rates rise and to rise when interest rates fall. A
convertible security generally has less potential for gain or loss than the underlying equity security.
Geographic Focus Risk When
the Fund focuses investments on a particular country, group of countries, or geographic region, its performance will be closely tied to
the market, currency, economic, political, or regulatory conditions and developments in those countries or that region, and could be more
volatile than the performance of more geographically diversified funds.
Hedging Risk The
Fund’s attempts at hedging and taking long and short positions in currencies may not be successful and could cause the Fund to lose
money or fail to get the benefit of a gain on a hedged position. If expected changes to securities prices, interest rates, currency values,
and exchange rates, or the creditworthiness of an issuer are not accurately predicted, the Fund could be in a worse position than if it
had not entered into such transactions.
Liquidity Risk Certain securities
may be difficult (or impossible) to sell or certain positions may be difficult to close out at a desirable time and price, and the Fund
may be required to hold an illiquid investment that is declining in value, or it may be required to sell certain illiquid investments
at a price or time that is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject to restrictions
on resale. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time. The Fund may not
receive the proceeds from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable
market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline significantly in response
to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as investor perceptions
of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage, industry problems,
and reduced demand for goods or services.
Preferred
Stock Risk Like other equity securities, preferred stock is subject to the risk that its value may decrease based on actual
or perceived changes in the business or financial condition of the issuer. In addition, changes in interest rates may adversely affect
the value of a preferred stock that pays a fixed dividend. Preferred stocks are also subject to additional risks, such as potentially
greater volatility and risks related to deferral, non-cumulative dividends, subordination, liquidity, limited voting rights, and special
redemption rights.
Quantitative Models Risk The
portfolio managers use quantitative models as part of the idea generation process. Quantitative models are based upon many factors that
measure individual securities relative to each other. Such models may not produce the intended results and can be adversely affected by
errors or imperfections in the factors or the data on which measurements are
based, changing sources of market return or market risk, or any technical issues with the
design, construction, implementation, or maintenance of the models.
REIT Risk Investments
in REITs may be subject to risks similar to those associated with direct investment in real estate, as well as additional risks associated
with equity investments. As a shareholder in a REIT, the Fund, and indirectly the Fund’s shareholders, would bear its ratable share
of the REIT’s expenses and would at the same time continue to pay its own fees and expenses.
Risk
of Investment in Other Funds or Pools The Fund is indirectly exposed to all of the risks of the underlying funds, including
ETFs, in which it invests, including the risk that the underlying funds will not perform as expected. ETFs are subject to additional risks,
including secondary market trading risks and the risk that an ETF’s shares may trade above or below net asset value. The Fund indirectly
pays a portion of the expenses incurred by the underlying funds.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
Valuation Risk The
Fund is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are
fair valued.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class R5 shares. The table shows how the Fund’s average annual returns for
1, 5, and 10 years compare with those of a broad measure of market performance. Performance for Class I, Class R4, and Class R3 shares
of the Fund for periods prior to their inception date (04/01/14) is based on the performance of Class R5 shares, adjusted for Class R4
and Class R3 shares to reflect Class R4 and Class R3 expenses, respectively. Performance
for Class A shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will
perform
in the future. More up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Class R5 Shares
|
Highest Quarter:
|
|
|
2Q ’20,
|
|
|
|
|
20.17 |
% |
|
Lowest Quarter:
|
|
|
1Q ’20,
|
|
|
–19.74%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax
returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who
hold Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Class R5 only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class R5
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
7.92 |
% |
|
|
|
|
9.86 |
% |
|
|
|
|
8.61 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
3.69 |
% |
|
|
|
|
6.54 |
% |
|
|
|
|
6.05 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares |
|
|
|
|
|
5.66 |
% |
|
|
|
|
7.25 |
% |
|
|
|
|
6.53 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
8.05 |
% |
|
|
|
|
9.99 |
% |
|
|
|
|
8.74 |
% |
Service
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
7.82 |
% |
|
|
|
|
9.76 |
% |
|
|
|
|
8.52 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
7.64 |
% |
|
|
|
|
9.63 |
% |
|
|
|
|
8.39 |
% |
Class A
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
1.54 |
% |
|
|
|
|
8.13 |
% |
|
|
|
|
7.51 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
7.50 |
% |
|
|
|
|
9.48 |
% |
|
|
|
|
8.22 |
% |
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
7.29 |
% |
|
|
|
|
9.21 |
% |
|
|
|
|
7.96 |
% |
MSCI
ACWI ex USA (reflects
no deduction for fees or expenses)
|
|
|
|
|
|
7.82 |
% |
|
|
|
|
9.61 |
% |
|
|
|
|
7.28 |
% |
MANAGEMENT
Investment Adviser: MML Investment
Advisers, LLC (“MML Advisers”)
Subadviser(s): Wellington
Management Company LLP (“Wellington Management”)
Thompson, Siegel & Walmsley LLC (“TSW”)
Portfolio Manager(s):
Peter C. Fisher is
a Senior Managing Director and Equity Portfolio Manager at Wellington Management. He has managed the Fund since August 2020.
Brandon H. Harrell, CFA is
a Portfolio Manager at TSW. He has managed the Fund since August 2020.
PURCHASE AND SALE
OF FUND SHARES
Shares of the Fund are generally available to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request, telephone, or internet
(available to certain customers).
TAX INFORMATION
The Fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other financial intermediary,
the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates, or others for the sale of
Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict of interest by influencing
the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your intermediary to obtain
more information about the compensation it may receive in connection with your investment.
MassMutual
Strategic Emerging Markets Fund (formerly known as MassMutual Premier Strategic Emerging Markets Fund)
INVESTMENT
OBJECTIVE
The Fund seeks long-term capital growth.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you
may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions and other fees to financial intermediaries which
are not reflected in the tables and examples below. For Class A
shares, you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 104 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid directly from your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Maximum Sales
Charge (Load) Imposed on Purchases (as a % of offering price) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
5.50%
|
|
|
None
|
|
|
None
|
|
Maximum Deferred
Sales Charge (Load) (as a % of the lower of the original offering price or redemption proceeds)
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Adminis- trative Class
|
|
|
Class A
|
|
|
Class R4
|
|
|
Class R3
|
|
Management
Fees |
|
|
1.00%
|
|
|
1.00%
|
|
|
1.00%
|
|
|
1.00%
|
|
|
1.00%
|
|
|
1.00%
|
|
|
1.00%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses |
|
|
0.22%
|
|
|
0.32%
|
|
|
0.42%
|
|
|
0.52%
|
|
|
0.52%
|
|
|
0.42%
|
|
|
0.42%
|
|
Total Annual Fund Operating Expenses
|
|
|
1.22%
|
|
|
1.32%
|
|
|
1.42%
|
|
|
1.52%
|
|
|
1.77%
|
|
|
1.67%
|
|
|
1.92%
|
|
Expense Reimbursement
|
|
|
(0.07%)
|
|
|
(0.07%)
|
|
|
(0.07%)
|
|
|
(0.07%)
|
|
|
(0.07%)
|
|
|
(0.07%)
|
|
|
(0.07%)
|
|
Total Annual
Fund Operating Expenses after Expense Reimbursement(1)
|
|
|
1.15%
|
|
|
1.25%
|
|
|
1.35%
|
|
|
1.45%
|
|
|
1.70%
|
|
|
1.60%
|
|
|
1.85%
|
|
(1)
The expenses in the above table reflect a written agreement by MML Advisers to cap the fees and expenses
of the Fund (other than extraordinary legal and other expenses, Acquired Fund Fees and Expenses, interest expense, expenses related to
borrowings, securities lending, leverage, taxes, and brokerage, short sale dividend and loan expense, or other non-recurring or unusual
expenses such as organizational expenses and shareholder meeting expenses, as applicable) through January
31, 2023, to the extent that Total Annual Fund Operating Expenses after Expense Reimbursement would otherwise exceed 1.15%,
1.25%, 1.35%, 1.45%, 1.70%,
1.60%, and 1.85% for
Classes I, R5, Service, Administrative, A, R4, and R3, respectively. The Total Annual Fund Operating Expenses after Expense Reimbursement
shown in the above table may exceed these amounts, because, as noted in the previous sentence, certain fees and expenses are excluded
from the cap. The agreement can only be terminated by mutual consent of the Board of Trustees on behalf of the Fund and MML Advisers.
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in each share class of the Fund for the time
periods indicated and then redeem all of your shares at the end of those periods. For Class A shares, the example includes the initial
sales charge. The example also assumes that your investment earns a 5% return each year and that the Fund’s operating expenses are
exactly as described in the preceding table. Although your actual costs may be higher or lower, based on these assumptions your costs
would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
117 |
|
|
|
|
$ |
380 |
|
|
|
|
$ |
664 |
|
|
|
|
$ |
1,471 |
|
|
Class R5 |
|
|
|
$ |
127 |
|
|
|
|
$ |
411 |
|
|
|
|
$ |
717 |
|
|
|
|
$ |
1,584 |
|
|
Service Class |
|
|
|
$ |
137 |
|
|
|
|
$ |
442 |
|
|
|
|
$ |
770 |
|
|
|
|
$ |
1,696 |
|
|
Administrative Class |
|
|
|
$ |
148 |
|
|
|
|
$ |
473 |
|
|
|
|
$ |
822 |
|
|
|
|
$ |
1,807 |
|
|
Class A |
|
|
|
$ |
713 |
|
|
|
|
$ |
1,070 |
|
|
|
|
$ |
1,450 |
|
|
|
|
$ |
2,514 |
|
|
Class R4 |
|
|
|
$ |
163 |
|
|
|
|
$ |
520 |
|
|
|
|
$ |
901 |
|
|
|
|
$ |
1,970 |
|
|
Class R3 |
|
|
|
$ |
188 |
|
|
|
|
$ |
596 |
|
|
|
|
$ |
1,030 |
|
|
|
|
$ |
2,238 |
|
|
Portfolio
Turnover
The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio
turnover rate was 48%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment Strategies
The Fund mainly invests in common stocks of issuers in developing and emerging
markets throughout the world and at times it may invest up to 100% of its total assets in foreign securities. Under normal market conditions,
the Fund will
invest at least 80% of its net assets (plus the amount of any borrowings for investment purposes)
in equity securities of issuers whose principal activities are in a developing (or emerging) market, i.e. are in a developing market or
are economically tied to a developing market country. The Fund will invest in at least three developing markets. The Fund focuses on companies
with above-average earnings growth. The Fund may at times have significant exposure to one or more industries or sectors. The Fund may
hold a portion of its assets in cash or cash equivalents.
In general, countries may be considered developing or emerging markets if
they are included in any one of the MSCI emerging markets indexes, classified as a developing or emerging market, or classified under
a similar or corresponding classification, by organizations such as the World Bank and the International Monetary Fund, or have economies,
industries, and stock markets with similar characteristics. For purposes of the Fund’s investments, a determination that an issuer
is economically tied to a developing market country is based on factors including, but not limited to, geographic location of its primary
trading markets, location of its assets, its domicile or its principal offices, or whether it receives revenues from a developing market.
Such a determination can also be based, in whole or in part, on inclusion of an issuer or its securities in an index representative of
developing or emerging markets.
The Fund may purchase American Depositary Shares (“ADS”) as part
of American Depositary Receipt (“ADR”) issuances, which are negotiable certificates issued by a U.S. bank representing a specified
number of shares in a foreign stock traded on a U.S. exchange. In addition to common stocks, the Fund can invest in other equity or “equity
equivalents” securities such as preferred stocks or convertible securities. The Fund may use derivatives, including futures contracts,
forward contracts, and options, to seek to enhance the Fund’s investment return or for hedging purposes. The Fund is not required
to use derivatives in seeking its investment objective or for hedging and might not do so. Use of derivatives by the Fund may create investment
leverage.
The Fund may invest directly in certain eligible China
A Shares through Stock Connect (a securities trading and clearing program designed to achieve mutual stock market access between the People’s
Republic of China (“PRC”) and Hong Kong).
In selecting investments for the Fund, the Fund’s subadviser,
Invesco Advisers, Inc. (“Invesco Advisers”), evaluates investment opportunities on
a company-by-company basis. This approach includes fundamental analysis of a company’s financial statements, management record,
capital structure, operations, product development, and competitive position in its industry. Invesco Advisers also looks for newer or
established businesses that are entering into a growth cycle, have the potential for accelerating earnings growth or cash flow, and possess
reasonable valuations. Invesco Advisers considers the effect of worldwide trends on the growth of particular business sectors and looks
for companies that may benefit from those trends and seeks a diverse mix of industries and countries to help reduce the risks of foreign
investing, such as currency fluctuations and stock market volatility. Invesco Advisers may invest in growth companies of different capitalization
ranges in any developing market country. Invesco Advisers monitors individual issuers for changes in the factors above, which may trigger
a decision to sell a security.
As part of Invesco Advisers’ investment process
to implement the Fund’s investment strategy in pursuit of its investment objective, Invesco Advisers also considers both qualitative
and quantitative environmental, social, and governance (“ESG”) factors it believes to be material to understanding an issuer’s
fundamentals, and assesses whether any ESG factors pose a material financial risk or opportunity to the issuer and determines whether
such risks are appropriately reflected in the issuer’s valuation. This analysis may involve the use of third-party research as well
as proprietary research. Consideration of ESG factors is just one component of Invesco Advisers’ assessment of issuers eligible
for investment and Invesco Advisers may still invest in securities of issuers that may be viewed as having a high ESG risk profile. The
ESG factors considered by Invesco Advisers may change over time and one or more factors may not be relevant with respect to all issuers
eligible for investment.
Principal
Risks
The following are the Principal Risks of the Fund. The value of your investment
in the Fund could go down as well as up. You can lose money by investing in the
Fund. Certain risks relating to instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition
of the Fund’s portfolio, market conditions, and other factors. You should read all
of the risk information presented below carefully, because any one or more of these risks may result in losses to the Fund.
Equity Securities Risk Although
stocks may have the potential to outperform other asset classes over the long term, their prices tend to fluctuate more dramatically over
the shorter term. These movements may result from factors affecting individual companies, or from broader influences like changes in interest
rates, market conditions, or investor confidence, or announcements of economic, political, or financial information.
Foreign Investment Risk;
Emerging Markets Risk; Currency Risk Investments in securities of foreign issuers, securities of companies with significant
foreign exposure, and foreign currencies can involve additional risks relating to market, industry, political, regulatory, public health,
and other conditions. Political, social, diplomatic, and economic developments, U.S. and foreign government action such as the imposition
of currency or capital blockages, controls, or tariffs, economic and trade sanctions or embargoes, security suspensions, entering or exiting
trade or other intergovernmental agreements, or the expropriation or nationalization of assets in a particular country, can cause dramatic
declines in certain or all securities with exposure to that country and other countries. In the event of nationalization, expropriation,
or other confiscation, the Fund could lose its entire foreign investment in a particular country. There may be quotas or other limits
on the ability of the Fund (or clients of the Fund’s investment adviser or subadviser) to invest or maintain investments in securities
of issuers in certain countries. Enforcing legal rights can be more difficult, costly, and limited in certain foreign countries, and can
be particularly difficult against foreign governments. Because non-U.S. securities are normally denominated and traded in currencies other
than the U.S. dollar, the value of the Fund’s assets may be affected favorably or unfavorably by changes in currency exchange rates,
exchange control regulations, and restrictions or prohibitions on the repatriation of non-U.S. currencies. Income and gains with respect
to investments in certain countries may be subject to withholding and other taxes. There may be less information publicly available about
a non-U.S. company than about a U.S. company, and many non-U.S. companies are not subject to accounting, auditing, and
financial reporting standards, regulatory framework and practices comparable to those in the
U.S. The securities of some non-U.S. companies, especially those in emerging markets, are less liquid and at times more volatile than
securities of comparable U.S. companies. Emerging markets securities are subject to greater risks than securities issued in developed
foreign markets, including less liquidity, less stringent investor protection and disclosure standards, greater price volatility, higher
relative rates of inflation, greater political, economic, and social instability, greater custody and operational risks, and greater volatility
in currency exchange rates, and are more susceptible to environmental problems. Many emerging market countries are highly reliant on international
trade and exports, including the export of commodities. Their economies may be significantly impacted by fluctuations in commodity prices
and the global demand for certain commodities. In addition, many emerging market countries with less established health care systems have
experienced outbreaks of pandemics or contagious diseases from time to time. Frontier markets, a subset of emerging markets, generally
have smaller economies and less mature capital markets than emerging markets. As a result, the risks of investing in emerging market countries
are magnified in frontier market countries. Frontier markets are more susceptible to having abrupt changes in currency values, less mature
markets and settlement practices, and lower trading volumes that could lead to greater price volatility and illiquidity. Non-U.S. transaction
costs, such as brokerage commissions and custody costs, may be higher than in the United States. In addition, foreign markets can react
differently to market, economic, industry, political, regulatory, geopolitical, public health, and other conditions than the U.S. market.
China
Investment Risk Investments in Chinese companies involve certain risks and considerations not typically associated with investments
in U.S. companies, such as greater government control over the economy, political and legal uncertainty, currency fluctuations or blockages,
the risk that the Chinese government may decide not to continue to support economic reform programs, and the risk of nationalization or
expropriation of assets. Additionally, the Chinese securities markets are emerging markets subject to the special risks applicable to
emerging market countries.
Derivatives Risk Derivatives
can be highly volatile and involve risks different from, and potentially greater than, direct investments, including risks of imperfect
correlation between the value of
derivatives and underlying assets, counterparty default, potential losses that partially
or completely offset gains, and illiquidity. Derivatives can create investment leverage. Losses from derivatives can be substantially
greater than the derivatives’ original cost and can sometimes be unlimited. If the value of a derivative does not correlate well
with the particular market or asset class the derivative is designed to provide exposure to, the derivative may not have the effect or
benefit anticipated. Derivatives can also reduce the opportunity for gains or result in losses by offsetting positive returns in other
investments. Many derivatives are traded in the over-the-counter market and not on exchanges.
Growth Company Risk The
prices of growth securities are often highly sensitive to market fluctuations because of their heavy dependence on future earnings or
cash flow expectations, and can be more volatile than the market in general.
Large Company Risk Large-capitalization
stocks as a group could fall out of favor with the market, causing the Fund’s investments in large-capitalization stocks to underperform
investments that focus on small- or medium-capitalization stocks. Larger, more established companies may be slow to respond to challenges
and may grow more slowly than smaller companies.
Small and Mid-Cap Company
Risk Market risk and liquidity risk are particularly pronounced for securities of small and medium-sized companies, which
may trade less frequently and in smaller volumes than more widely-held securities, and may fluctuate in price more than other securities.
Their shares can be less liquid than those of larger companies, especially during market declines. Small and medium-sized companies may
have limited product lines, markets, or financial resources and may be dependent on a limited management group; they may have been recently
organized and have little or no track record of success.
Stock Connect Risk The
Fund may invest in China A Shares through Stock Connect, which is subject to sudden changes in quota limitations, application of trading
suspensions, price fluctuations during times when Stock Connect is not trading, operational risk, clearing and settlement risk, and regulatory
and taxation risk.
Cash Position Risk If
the Fund holds a significant portion of its assets in cash or cash equivalents, its investment returns may be adversely affected and the
Fund may not achieve its investment objective.
Convertible Securities Risk Convertible
securities are subject to the risks of both debt instruments and equity securities. The price of a convertible security may change in
response to changes in price of the underlying equity security, the credit quality of the issuer, and interest rates. In general, the
values of convertible securities tend to decline as interest rates rise and to rise when interest rates fall. A convertible security generally
has less potential for gain or loss than the underlying equity security.
ESG
Considerations Risk The ESG considerations assessed as part of the investment process to implement the Fund’s investment
strategy in pursuit of its investment objective may vary across types of eligible investments and issuers, and not every ESG factor may
be identified or evaluated for every investment. The Fund’s portfolio will not be solely based on ESG considerations, and therefore
the issuers in which the Fund invests may not be considered ESG-focused companies. The incorporation of ESG factors may affect the Fund’s
exposure to certain issuers or industries and may not work as intended. The Fund may underperform other funds that do not assess an issuer’s
ESG factors or that use a different methodology to identify and/or incorporate ESG factors. Information used by the Fund to evaluate such
factors may not be readily available, complete or accurate, and may vary across providers and issuers as ESG is not a uniformly defined
characteristic. There is no guarantee that the evaluation of ESG considerations will be additive to the Fund’s performance.
Geographic Focus Risk When
the Fund focuses investments on a particular country, group of countries, or geographic region, its performance will be closely tied to
the market, currency, economic, political, or regulatory conditions and developments in those countries or that region, and could be more
volatile than the performance of more geographically diversified funds.
Hedging Risk The
Fund’s attempts at hedging and taking long and short positions in currencies may not be successful and could cause the Fund to lose
money or fail to get the benefit of a gain on a hedged position. If expected changes to securities prices, interest rates, currency values,
and exchange rates, or the creditworthiness of an issuer are not accurately predicted, the Fund could be in a worse position than if it
had not entered into such transactions.
Liquidity Risk Certain
securities may be difficult (or impossible) to sell or certain positions may be
difficult to close out at a desirable time and price, and the Fund may be required to hold
an illiquid investment that is declining in value, or it may be required to sell certain illiquid investments at a price or time that
is not advantageous in order to meet redemptions or other cash needs. Some securities may be subject to restrictions on resale. There
can be no assurance that there will be a liquid market for instruments held by the Fund at any time. The Fund may not receive the proceeds
from the sale of certain investments for an extended period.
Management Risk The
Fund relies on the manager’s investment analysis and its selection of investments to achieve its investment objective. There can
be no assurance that the Fund will achieve the intended results and the Fund may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable
market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline significantly in response
to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions, as well as investor perceptions
of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial leverage, industry problems,
and reduced demand for goods or services.
Preferred
Stock Risk Like other equity securities, preferred stock is subject to the risk that its value may decrease based on actual
or perceived changes in the business or financial condition of the issuer. In addition, changes in interest rates may adversely affect
the value of a preferred stock that pays a fixed dividend. Preferred stocks are also subject to additional risks, such as potentially
greater volatility and risks related to deferral, non-cumulative dividends, subordination, liquidity, limited voting rights, and special
redemption rights.
Sector Risk The
Fund may allocate more of its assets to particular industries or to particular economic, market, or industry sectors than to others. This
could increase the volatility of the Fund’s portfolio, and the Fund’s performance may be more susceptible to developments
affecting issuers in those industries or sectors than if the Fund invested more broadly.
Valuation Risk The Fund
is subject to the risk of mispricing or improper valuation of its investments, in particular to the extent that its securities are fair
valued.
Performance
Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class R5 shares. The table shows how the Fund’s average annual returns for
1, 5, and 10 years compare with those of a broad measure of market performance. Performance for Class I, Class R4, and Class R3 shares
of the Fund for periods prior to their inception date (04/01/14) is based on the performance of Class R5 shares, adjusted for Class R4
and Class R3 shares to reflect Class R4 and Class R3 expenses, respectively. Performance
for Class A shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual Performance
Class R5 Shares
|
Highest Quarter:
|
|
|
4Q ’20,
|
|
|
|
|
19.14 |
% |
|
Lowest Quarter:
|
|
|
1Q ’20,
|
|
|
–22.67%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax
returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who
hold Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Class R5 only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for
the periods ended December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
|
Five Years |
|
|
|
Ten Years |
|
Class R5
|
|
|
|
Return Before Taxes
|
|
|
|
|
|
-8.02 |
% |
|
|
|
|
9.68 |
% |
|
|
|
|
4.30 |
% |
|
Return
After Taxes on Distributions |
|
|
|
|
|
-10.90 |
% |
|
|
|
|
8.50 |
% |
|
|
|
|
3.69 |
% |
|
Return
After Taxes on Distributions and sales of Fund Shares
|
|
|
|
|
|
-2.39 |
% |
|
|
|
|
7.77 |
% |
|
|
|
|
3.49 |
% |
Class I
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
-7.90 |
% |
|
|
|
|
9.79 |
% |
|
|
|
|
4.44 |
% |
Service
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
-8.04 |
% |
|
|
|
|
9.57 |
% |
|
|
|
|
4.21 |
% |
Administrative
Class |
|
|
|
Return
Before Taxes |
|
|
|
|
|
-8.16 |
% |
|
|
|
|
9.47 |
% |
|
|
|
|
4.10 |
% |
Class A
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
-13.39 |
% |
|
|
|
|
7.97 |
% |
|
|
|
|
3.25 |
% |
Class R4
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
-8.31 |
% |
|
|
|
|
9.30 |
% |
|
|
|
|
3.95 |
% |
Class R3
|
|
|
|
Return
Before Taxes |
|
|
|
|
|
-8.54 |
% |
|
|
|
|
9.03 |
% |
|
|
|
|
3.68 |
% |
MSCI
Emerging Markets Index (reflects
no deduction for fees or expenses)
|
|
|
|
|
|
-2.54 |
% |
|
|
|
|
9.87 |
% |
|
|
|
|
5.49 |
% |
MANAGEMENT
Investment Adviser: MML
Investment Advisers, LLC (“MML Advisers”)
Subadviser(s): Invesco
Advisers, Inc. (“Invesco Advisers”)
Portfolio Manager(s):
Justin
Leverenz, CFA is a Portfolio Manager at Invesco Advisers. He has managed the Fund since October 2013.
PURCHASE
AND SALE OF FUND SHARES
Shares of the Fund are generally available to retirement plans,
other institutional investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request,
telephone, or internet (available to certain customers).
TAX
INFORMATION
The Fund intends to make distributions that may be taxed as
ordinary income, qualified dividend income, or capital gains, unless you are an investor eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through a broker-dealer or other
financial intermediary, the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers or its affiliates,
or others for the sale of Fund shares or continuing shareholder services provided by the intermediary. These payments may create a conflict
of interest by influencing the broker-dealer or other intermediary to recommend the Fund over another investment. You should contact your
intermediary to obtain more information about the compensation it may receive in connection with your investment.
Additional Information
Regarding Investment Objectives and Principal Investment Strategies
Changes to Investment Objectives and Strategies. Each
Fund’s investment objective and strategies are non-fundamental and may be changed by the Board of Trustees (the “Trustees”)
of the MassMutual Premier Funds (the “Trust”) without shareholder approval.
Note Regarding Percentage Limitations. All
percentage limitations on investments in this Prospectus will apply at the time of investment, and will not be considered violated unless
an excess or deficiency occurs or exists immediately after and as a result of the investment. (As a result, the actual investments making
up a Fund’s portfolio may not at a particular time comport with any such limitation due to increases or decreases in the values
of securities held by the Fund.) However, if, through a change in values, net assets, or other circumstances, a Fund were in a position
where more than 15% of its net assets was invested in illiquid securities, the Fund would take appropriate orderly steps, as deemed necessary,
to protect liquidity. With respect to a Fund whose name suggests that the Fund focuses its investments in a particular type of investment
or investments, or in investments in a particular industry or group of industries, and that has adopted a policy under Rule 35d-1 under
the 1940 Act, such Fund’s policy to invest at least 80% of its net assets in certain investments may be changed by the Trustees
upon at least 60 days’ prior written notice to shareholders.
Credit Ratings. Security ratings
are determined at the time of investment based on ratings published by nationally recognized statistical rating organizations; if a security
is not rated, it will be deemed to have the same rating as a security determined by the investment adviser or subadviser to be of comparable
quality. Unless otherwise stated, if a security is rated by more than one nationally recognized statistical rating organization, the highest
rating is used. The Fund may retain any security whose rating has been downgraded after purchase.
Duration. Duration is a measure
of the expected life of a debt security that is used to determine the sensitivity of the security’s value to changes in interest
rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. For example, if interest rates
rise by 1%, the
value of a debt security with a duration of two years would be expected to decline 2% and
the value of a debt security with a duration of four years would be expected to decline 4%. Unlike the maturity of a debt security, which
measures only the time until final payment is due, duration takes into account the time until all payments of interest and principal on
a security are expected to be made, including how these payments are affected by prepayments and by changes in interest rates. Determining
duration may involve estimates of future economic parameters, which may vary from actual future values.
Leverage. Leverage generally
has the effect of increasing the amount of loss or gain a Fund might realize, and may increase volatility in the value of a Fund’s
investments. Adverse changes in the value or level of the underlying asset, rate, or index may result in a loss substantially greater
than the amount invested in the derivative itself.
Temporary Defensive Positions. At
times, a Fund’s investment adviser or subadviser may determine that market conditions make pursuing a Fund’s basic investment
strategy inconsistent with the best interests of its shareholders. At such times, the investment adviser or subadviser may (but will not
necessarily), without notice, temporarily use alternative strategies primarily designed to reduce fluctuations in the values of a Fund’s
assets. In implementing these defensive strategies, a Fund may hold assets without limit in cash and cash equivalents and in other investments
that the investment adviser or subadviser believes to be consistent with the Fund’s best interests. If such a temporary defensive
strategy is implemented, a Fund may not achieve its investment objective.
Portfolio Turnover. Changes
are made in a Fund’s portfolio whenever the investment adviser or subadviser believes such changes are desirable. Portfolio turnover
rates are generally not a factor in making buy and sell decisions. A high portfolio turnover rate will result in higher costs from brokerage
commissions, dealer-mark-ups, bid-ask spreads, and other transaction costs and may also result in a higher percentage of short-term capital
gains and a lower percentage of long-term capital gains as compared to a fund that trades less frequently (short-term capital gains generally
receive less favorable tax treatment in the hands
of shareholders than do long-term capital gains). Such costs are not reflected in the Funds’
Total Annual Fund Operating Expenses set forth in the fee tables but do have the effect of reducing a Fund’s investment return.
Non-Principal Investments; Use of Derivatives;
Securities Loans; Repurchase Agreements. A Fund may hold investments that are not included in its principal investment strategies.
These non-principal investments are described in the Statement of Additional Information (“SAI”) or below under “Additional
Information Regarding Principal Risks.” A Fund also may choose not to invest in certain securities described in this Prospectus
and in the SAI, even though it has the ability to do so. Certain Funds may engage in transactions involving derivatives as part of their
principal investment strategies; the disclosures of the principal investment strategies of those Funds include specific references to
those derivatives transactions. Any of the other Funds may engage in derivatives transactions not as part of their principal investment
strategies, and Funds that may use certain derivatives as part of their principal investment strategies may use other derivatives (not
as part of their principal investment strategies), as well. A Fund may use derivatives for hedging purposes, as a substitute for direct
investment, to earn additional income, to adjust portfolio characteristics, including duration (interest rate volatility), to gain exposure
to securities or markets in which it might not be able to invest directly, to provide asset/liability management, or to take long or short
positions on one or more indexes, securities, or foreign currencies. If a Fund takes a short position with respect to a particular index,
security, or currency, it will lose money if the index, security, or currency appreciates in value, or an expected credit or other event
that might affect the value of the index, security, or currency fails to occur. Losses could be significant. Derivatives transactions
may include, but are not limited to, foreign currency exchange transactions, options, futures contracts, interest rate swaps, interest
rate futures contracts, forward contracts, total return swaps, credit default swaps, and hybrid instruments. A Fund may use derivatives
to create investment leverage. See “Additional Information Regarding Principal Risks,” below, and the SAI for more information
regarding those transactions.
A Fund, with the exception of the U.S. Government Money Market Fund, may
make loans of portfolio securities to broker-dealers and other financial intermediaries of up to 33% of
its total assets, and may enter into repurchase agreements. These transactions must be fully
collateralized at all times, but involve some risk to a Fund if the other party should default on its obligation and the Fund is delayed
or prevented from recovering the collateral, or if the Fund is required to return collateral to a borrower at a time when it may realize
a loss on the investment of that collateral. Any losses from the investment of cash collateral received by the Fund will be for the Fund’s
account and may exceed any income the Fund receives from its securities lending activities. A repurchase agreement is a transaction in
which a Fund purchases a security from a seller, subject to the obligation of the seller to repurchase that security from the Fund at
a higher price. A Fund may enter into securities loans and repurchase agreements as a non-principal investment strategy.
Foreign Securities. The globalization
and integration of the world economic system and related financial markets have made it increasingly difficult to define issuers geographically.
Accordingly, the Funds intend to construe geographic terms such as “foreign,” “non-U.S.,” “European,”
“Latin American,” “Asian,” and “emerging markets” in the manner that affords to the Funds the greatest
flexibility in seeking to achieve the investment objective(s) of the relevant Fund. Specifically, unless otherwise stated, in circumstances
where the investment objective and/or strategy is to invest (a) exclusively in “foreign securities,” “non-U.S.
securities,” “European securities,” “Latin American securities,” “Asian securities,” or “emerging
markets” (or similar directions) or (b) at least some percentage of the Fund’s assets in foreign securities,
etc., the Fund will take the view that a security meets this description so long as the issuer of a security is tied economically to the
particular country or geographic region indicated by words of the relevant investment objective and/or strategy (the “Relevant Language”).
For these purposes the issuer of a security is deemed to have that tie if:
(i) the issuer is organized under the laws of the country or a country within
the geographic region suggested by the Relevant Language or maintains its principal place of business in that country or region; or
(ii) the securities are traded principally in the country or region suggested
by the Relevant Language; or
(iii) the issuer, during its most recent fiscal year, derived at least 50%
of its revenues or profits from goods produced or sold, investments made, or
services performed in the country or region suggested by the Relevant Language or has at least
50% of its assets in that country or region.
In addition, the Funds intend to treat derivative securities (e.g., call
options) for this purpose by reference to the underlying security. Conversely, if the investment objective and/or strategy of a Fund limits
the percentage of assets that may be invested in “foreign securities,” etc. or prohibits such investments altogether,
a Fund intends to categorize securities as “foreign,” etc. only if the security possesses all of the attributes described
above in clauses (i), (ii), and (iii).
U.S. Government Money Market Fund. The
Fund’s 7-day yield on December 31, 2021 was 0.00%. To obtain the Fund’s current 7-day yield information, please call
1-888-309-3539. MML Advisers has agreed to voluntarily waive some or all of its fees in an attempt to allow the Fund to avoid a negative
yield. There is no guarantee that the Fund will be able to avoid a negative yield. Payments made to intermediaries will be unaffected.
MML Advisers may amend or discontinue this waiver at any time without advance notice.
Disclosure of Portfolio Holdings
A description of the Funds’ policies and procedures with respect to
the disclosure of each Fund’s portfolio securities is available in the Funds’ SAI.
Additional Information
Regarding Principal Risks
A Fund, by itself, generally is not intended to provide a complete investment
program. Investment in the Funds is intended to serve as part of a diversified portfolio of investments. An investment in a Fund is not
a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The value of your investment in a Fund changes with the values of the investments
in the Fund’s portfolio. Many things can affect those values. Factors that may have an important or significant effect on a particular
Fund’s portfolio as a whole are called “Principal Risks.” The Principal Risks of each Fund are identified in the foregoing
Fund Summaries and are described in this section. Certain Funds may be more susceptible to some risks than others. Although the Funds
strive to reach their stated goals, they cannot offer guaranteed results. The value of your investment in a Fund could go down as well
as up. You can lose money by investing in the Funds. References in this section to a Fund’s subadviser may include any sub-subadvisers
as applicable.
The SAI contains further information about the Funds, their investments and
their related risks.
•
Bank Loans Risk
Many of the risks associated with bank loans are similar
to the risks of investing in below investment grade debt securities, although bank loans are typically (though not always) senior and
secured, while below investment grade debt securities or investments are often subordinated and unsecured. Changes in the financial condition
of the borrower or economic conditions or other circumstances may reduce the capacity of the borrower to make principal and interest payments
on such instruments and may lead to defaults. The value of any collateral securing a bank loan may decline after a Fund invests, and there
is a risk that the value of the collateral may not be sufficient to cover the amount owed to the Fund. In addition, collateral securing
a loan
may be found invalid, may be used to pay other outstanding
obligations of the borrower under applicable law, or may be difficult to sell. In the event that a borrower defaults, a Fund’s access
to the collateral may be limited by bankruptcy and other insolvency laws. There is also the risk that the collateral may be difficult
to liquidate, or that a majority of the collateral may be illiquid. In addition, some loans may be unsecured. Unsecured loans generally
present a greater risk of loss to the Fund if the issuer defaults. In some cases, the Fund may rely on a third party to administer its
interest in a loan, and so is subject to the risk that the third party will be unwilling or unable to perform its obligations. The Fund
may invest in a loan by purchasing an indirect interest in the loan held by a third party. In that case, the Fund will be subject to both
the credit risk of the borrower and of the third party, and the Fund may be unable to realize some or all of the value of its interest
in the loan in the event of the insolvency of the third party. The settlement time for certain loans is longer than the settlement time
for many other types of investments, and the Fund may not receive the payment for a loan sold by it until well after the sale; that cash
would be unavailable for payment of redemption proceeds or for reinvestment. Interests in some bank loans may not be readily marketable
and may be subject to restrictions on resale. In some cases, negotiations involved in disposing of indebtedness may require weeks to complete.
Consequently, some indebtedness may be difficult or impossible to dispose of readily at what the Fund believes to be a fair price. Some
bank loans may be illiquid, and bank loans generally tend to be less liquid than many other debt securities. The lack of a liquid secondary
market may make it more difficult for the Fund to assign a value to such instruments for purposes of valuing the Fund’s portfolio
and calculating its net asset value (“NAV”). Some loans may not be considered “securities” for certain purposes
under the federal securities laws, and purchasers, such as the Fund, therefore may not be entitled to rely on the anti-fraud protections
of the federal securities laws.
•
Below Investment
Grade Debt Securities Risk
Below investment grade debt securities, which are also
known as “junk” or “high yield” bonds, and comparable unrated securities in which a Fund may invest, have speculative
characteristics, and changes in economic conditions, the financial condition
of the issuer, and/or an unanticipated rise in interest rates or other circumstances are more likely to lead to a weakened capacity to
make principal and interest payment than in the case of higher grade securities. Below investment grade debt securities involve greater
volatility of price and yield and greater risk of loss of principal and interest than do higher quality securities. In the past, economic
downturns or increases in interest rates have, under certain circumstances, resulted in a higher incidence of default by the issuers of
these instruments and are likely to do so in the future, especially in the case of highly leveraged issuers. The prices for these instruments
may be affected by legislative and regulatory developments. Some below investment grade debt securities are issued in connection with
management buy-outs and other highly leveraged transactions, and may entail substantial risk of delays in payments of principal or interest
or of defaults. The inability (or perceived inability) of issuers to make timely payment of interest and principal would likely make the
values of securities held by the Fund more volatile and could limit the Fund’s ability to sell its securities at prices approximating
the values the Fund has placed on such securities. In the absence of a liquid trading market for securities held by it, a Fund at times
may be unable to establish the fair value of such securities. To the extent a Fund invests in securities in the lower rating categories,
the achievement of the Fund’s goals is more dependent on the Fund investment adviser’s or subadviser’s investment analysis
than would be the case if the Fund were investing in securities in the higher rating categories. Securities that are rated CCC or below
by Standard & Poor’s or Caa or below by Moody’s Investors Service, Inc. are generally regarded by the rating agencies
as having extremely poor prospects of ever attaining any real investment standing.
•
Cash Position Risk
A Fund may hold a significant portion of its assets in cash
or cash equivalents at the sole discretion of the Fund’s investment adviser or subadviser, based on such factors as it may consider
appropriate under the circumstances. The portion of a Fund’s assets invested in cash and cash equivalents may at times exceed
25% of the Fund’s net assets. To the extent
a Fund holds a significant portion of its assets in cash or cash equivalents, its investments returns may be adversely affected and the
Fund may not achieve its investment objective.
•
China Investment
Risk
Investments in Chinese companies
involve certain risks and considerations not typically associated with investments in U.S. companies, including, among others, greater
government control over the economy, political and legal uncertainty, currency fluctuations or blockages, the risk that the Chinese government
may decide not to continue to support economic reform programs, the risk of nationalization or expropriation of assets, more frequent
trading suspensions and government interventions, limits on the use of brokers and on foreign ownership, higher dependence on exports
and international trade, potential for increased trade tariffs, embargoes and other trade limitations, and custody risks associated with
programs used to access Chinese securities. Additionally, the Chinese securities markets are emerging markets subject to the special risks
applicable to emerging market countries. Significant portions of the Chinese securities markets may become rapidly illiquid, as Chinese
issuers have the ability to suspend the trading of their equity securities, and have shown a willingness to exercise that option in response
to market volatility and other events. U.S. sanctions or other investment restrictions could preclude a Fund from investing in certain
Chinese issuers or cause a Fund to sell investments at a disadvantageous time.
The Chinese economy is generally
considered an emerging and volatile market. Although China has experienced a relatively stable political environment in recent years,
there is no guarantee that such stability will be maintained in the future. Political, regulatory, and diplomatic events, such as the
U.S.-China “trade war” that intensified in 2018, could have an adverse effect on the Chinese or Hong Kong economies and on
investments made through China Connect programs.
•
Convertible Securities
Risk
Convertible securities are bonds, debentures, notes or
other debt securities that may be converted at either a stated price or stated rate into shares of common or preferred stock
(or cash or other securities of equivalent value), and so are subject
to the risks of investments in both debt securities and equity securities. The price of a convertible security may change in response
to changes in price of the underlying equity security, the credit quality of the issuer, and interest rates. Due to the conversion feature,
convertible debt securities generally yield less than non-convertible securities of similar credit quality and maturity. The values of
convertible securities may be interest-rate sensitive and tend to decline as interest rates rise and to rise when interest rates fall.
A Fund may invest at times in securities that have a mandatory conversion feature, pursuant to which the securities convert automatically
into stock at a specified date and conversion ratio, or that are convertible at the option of the issuer. When conversion is not at the
option of the holder, a Fund may be required to convert the security into the underlying stock even at times when the value of the underlying
common stock has declined substantially or it would otherwise be disadvantageous to do so.
•
Credit Risk
Credit risk is the risk that an issuer, guarantor, or liquidity
provider of a fixed income security held by a Fund may be unable or unwilling, or may be perceived (whether by market participants, ratings
agencies, pricing services or otherwise) as unable or unwilling, to make timely principal and/or interest payments, or to otherwise honor
its obligations. It includes the risk that the security will be downgraded by a credit rating agency; generally, lower credit quality
issuers present higher credit risks. An actual or perceived decline in creditworthiness of an issuer of a fixed income security held by
the Fund may result in a decrease in the value of the security. It is possible that the ability of an issuer to meet its obligations will
decline substantially during the period when the Fund owns securities of the issuer or that the issuer will default on its obligations
or that the obligations of the issuer will be limited or restructured. The credit rating assigned to any particular investment does not
necessarily reflect the issuer’s current financial condition and does not reflect an assessment of an investment’s volatility
or liquidity. Securities rated in the lowest category of investment grade are considered to have speculative characteristics. In addition,
below investment
grade debt securities (i.e., “junk” or “high yield”
bonds) involve greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic
downturn than investment grade securities. If a security held by the Fund loses its rating or its rating is downgraded, the Fund may nonetheless
continue to hold the security in the discretion of the investment adviser or subadviser. In the case of asset-backed or mortgage-related
securities, changes in the actual or perceived ability of the obligors on the underlying assets or mortgages may affect the values of
those securities.
The Fund may also be exposed to the
credit risk of its counterparty to repurchase agreements, reverse repurchase agreements, swap transactions, and other derivatives transactions,
and to the counterparty’s ability or willingness to perform in accordance with the terms of the transaction. The value of such transactions
to the Fund will depend on the willingness and ability of the counterparty to perform its obligations, including among other things the
obligation to return collateral or margin to the Fund. If a counterparty becomes bankrupt or otherwise fails to perform its obligations
under a derivative contract due to financial difficulties, the Fund may experience significant delays in obtaining any recovery under
the derivative contract in a bankruptcy or other reorganization proceeding. The Fund may obtain only a limited recovery or may obtain
no recovery in such circumstances. In the event of a counterparty’s (or its affiliate’s) insolvency, the possibility exists
that a Fund’s ability to exercise remedies, such as the termination of transactions, netting of obligations, and realization on
collateral, could be stayed or eliminated under special resolution regimes adopted in the United States, the European Union, and various
other jurisdictions. Among other things, such regimes provide government authorities with broad authority to intervene when a financial
institution is experiencing financial difficulty.
•
Currency Risk
Because foreign securities normally are denominated and
traded in foreign currencies, the value of a Fund’s assets may be affected favorably or unfavorably by changes in currency exchange
rates, currency exchange control regulations, intervention (or failure to
intervene) by the U.S. or foreign governments in currency markets, foreign
withholding taxes, and restrictions or prohibitions on the repatriation of foreign currencies. A Fund may, but will not necessarily, engage
in foreign currency transactions in order to protect against fluctuations in the values of holdings denominated in or exposed to other
currencies, or, for certain Funds, to generate additional returns. Derivatives transactions providing exposure to foreign currencies may
create investment leverage. A Fund’s investment in foreign currencies may increase the amount of ordinary income recognized by the
Fund.
Officials in foreign countries may from time to time take
actions in respect of their currencies which could significantly affect the value of a Fund’s assets denominated in those currencies
or the liquidity of such investments. For example, a foreign government may unilaterally devalue its currency against other currencies,
which would typically have the effect of reducing the U.S. dollar value of investments denominated in that currency. A foreign government
may also limit the convertibility or repatriation of its currency or assets denominated in its currency, which would adversely affect
the U.S. dollar value and liquidity of investments denominated in that currency. In addition, although at times most of a Fund’s
income may be received or realized in foreign currencies, the Fund will be required to compute and distribute its income in U.S. dollars.
As a result, if the exchange rate for any such currency declines after the Fund’s income has been earned and translated into U.S.
dollars but before payment to shareholders, the Fund could be required to sell portfolio investments to make such distributions. Similarly,
if a Fund incurs an expense in a foreign currency and the exchange rate changes adversely to the Fund before the expense is paid, the
Fund would have to convert a greater amount of U.S. dollars to pay for the expense at that time than it would have had to convert at the
time the Fund incurred the expense. Investments in foreign currencies themselves (directly or through derivatives transactions) may be
highly volatile and may create investment leverage.
•
Cyber Security and Technology Risk
The Funds and their service providers (including the Funds’
investment adviser, subadvisers, custodian, and transfer agent) are subject to operational and information security risks, including those
resulting from cyber-attacks and other technological issues. Technological issues or failures, or interference or attacks by “hackers”
or others, may have the effect of disabling or hindering the Funds’ operations or the operations of a service provider to the Funds.
There are inherent limitations in business continuity plans and technology systems designed to prevent cyber-attacks and avoid operational
incidents, including the possibility that certain risks have not been identified. The Funds’ investment adviser does not control
the cyber security plans and systems put in place by third-party service providers, and such third-party service providers may have limited
indemnification obligations to the Funds’ investment adviser or the Funds, each of whom could be negatively impacted as a result.
Similar risks also are present for issuers of securities in which the Funds invest, which could result in material adverse consequences
for such issuers, and may cause a Fund’s investment in such securities to lose value.
•
Defaulted and
Distressed Securities Risk
Defaulted securities risk refers
to the uncertainty of repayment of defaulted securities and obligations of distressed issuers. Because the issuer of such securities is
in default and is likely to be in distressed financial condition, repayment of defaulted securities and obligations of distressed issuers
(including insolvent issuers or issuers in payment or covenant default, in workout or restructuring, or in bankruptcy or insolvency proceedings)
is subject to significant uncertainties. The market will likely be less liquid for distressed or defaulted securities than for other types
of securities. Reduced liquidity can affect the valuations of distressed or defaulted securities, make their valuation and sale more difficult,
and result in greater volatility. Insolvency laws and practices in foreign countries are different than those in the U.S. and the effect
of these laws and practices cannot be predicted with certainty. Investments in defaulted securities and obligations of distressed issuers
are considered speculative. To the extent a Fund is invested in distressed securities, its ability to
achieve current income for its shareholders may be
diminished.
•
Derivatives Risk
Derivatives are financial contracts whose values depend
upon, or are derived from, the value of an underlying asset, reference rate, or index. Derivatives may relate to stocks, bonds, interest
rates, currencies, credit exposures, currency exchange rates, commodities, related indexes, or other assets. The use of derivative instruments
may involve risks different from, or greater than, the risks associated with investing directly in securities and other more traditional
investments. Derivatives can be highly volatile and are subject to a number of potential risks described in this Prospectus, including
market risk, credit risk, management risk, liquidity risk, and leveraging risk. Derivative products are highly specialized instruments
that may require investment techniques and risk analyses different from those associated with stocks and bonds. The use of a derivative
requires an understanding not only of the underlying instrument or index but also of the derivative itself, often without the benefit
of observing the performance of the derivative under all possible market conditions. (For example, successful use of a credit default
swap may require, among other things, an understanding of both the credit of the company to which it relates and of the way the swap is
likely to respond to changes in various market conditions and to factors specifically affecting the company.) The use of derivatives involves
the risk that a loss may be sustained as a result of the failure of another party to the contract (typically referred to as a “counterparty”)
to make required payments or otherwise to comply with the contract’s terms. Derivative transactions can create investment leverage.
Losses from derivatives can be substantially greater than the derivatives’ original cost and can sometimes be unlimited. Since the
values of derivatives are calculated and derived from the values of other assets, reference rates, or indexes, there is greater risk that
derivatives will be improperly valued. Derivatives also involve the risk that changes in the value of a derivative may not correlate perfectly
with changes in the value of its underlying asset, rate, or index, and the risk that a derivative transaction may not have the effect
or benefit the Fund’s investment adviser or subadviser
anticipated. Also, suitable derivative transactions may not be available
in all circumstances, and there can be no assurance that a Fund will engage in these transactions when that would be beneficial. A liquid
secondary market may not always exist for a Fund’s derivative positions at any time. If a derivative transaction is particularly
large or if the relevant market is illiquid (as is the case with many privately negotiated derivatives), it may not be possible to initiate
a transaction or liquidate a position at an advantageous price or at all. Although the use of derivatives is intended to enhance a Fund’s
performance, it may instead reduce returns and increase volatility.
Recent U.S. and non-U.S. legislative
and regulatory reforms, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, have resulted in, and
may in the future result in, new regulation of derivative instruments and the Funds’ use of such instruments. Such regulations can,
among other things, restrict a Fund’s ability to engage in derivative transactions (for example, by making certain types of derivative
instruments or transactions no longer available to a Fund), establish additional margin requirements and/or increase the costs of derivatives
transactions, and a Fund may as a result be unable to execute its investment strategies in a manner its investment adviser or subadviser
might otherwise choose. Counterparty risk with respect to derivatives has been and may continue to be affected by rules and regulations
concerning the derivatives market. Some derivatives transactions are centrally cleared, and a party to a cleared derivatives transaction
is subject to the credit risk of the clearing house and the clearing member through which it holds the position. Credit risk of market
participants with respect to derivatives that are centrally cleared is concentrated in a few clearing houses and clearing members, and
it is not clear how an insolvency proceeding of a clearing house or clearing member would be conducted, what effect the insolvency proceeding
would have on any recovery by a Fund, and what impact an insolvency of a clearing house or clearing member would have on the financial
system more generally.
•
Futures
Contract Risk. A Fund may enter into futures contracts, in which the Fund agrees to buy or sell certain financial instruments
or index units or other assets on a specified
future date at a specified price or rate. A Fund may
also enter into contracts to deliver in the future an amount of one currency in return for an amount of another currency. If a Fund’s
investment adviser or subadviser misjudges the direction of interest rates, markets, or foreign exchange rates, a Fund’s overall
performance could suffer. The risk of loss could be far greater than the investment made because a futures contract requires only a small
deposit to take a large position. A small change in a futures contract could have a substantial impact on a Fund, favorable or unfavorable.
An investor could also suffer losses if it is unable to close out a futures contract because of an illiquid market. Futures are subject
to the creditworthiness of the futures commission merchants or brokers and clearing organizations involved in the transactions. In the
event of the insolvency of its futures commission merchant or broker, a Fund may be delayed or prevented from recovering some or all of
the margin it has deposited with the merchant or broker, or any increase in the value of its futures positions held through that merchant
or broker.
•
Dollar Roll and
Reverse Repurchase Agreement Transaction Risk
In a dollar roll transaction, a Fund sells mortgage-backed
securities for delivery to the buyer in the current month and simultaneously contracts to purchase similar securities on a specified future
date from the same party. In a reverse repurchase agreement transaction, a Fund sells securities to a bank or securities dealer and agrees
to repurchase them at an agreed time and price; a reverse repurchase agreement is similar to a secured borrowing by a Fund. Both types
of transactions generally create leverage (see “Leveraging Risk” below). It may be difficult or impossible for a Fund to exercise
its rights under a dollar roll transaction or reverse repurchase agreement in the event of the insolvency or bankruptcy of the counterparty,
and the Fund may not be able to purchase the securities or other assets subject to the transaction and may be required to return any collateral
it holds.
•
Emerging Markets
Risk
Investing in emerging market securities poses risks different
from, and/or greater than, risks of investing in domestic securities or in the securities of foreign, developed countries.
These risks may include, for example, smaller market-capitalizations of
securities markets; significant price volatility; illiquidity; limits on foreign investment; and possible limits on repatriation of investment
income and capital. Future economic or political events or crises could lead to price controls, forced mergers, expropriation or confiscatory
taxation, seizure, nationalization, or the creation of government monopolies. The currencies of emerging market countries may experience
significant declines against the U.S. dollar, and devaluation may occur subsequent to investments in those currencies by a Fund. Inflation
and rapid fluctuations in inflation rates have had, and may continue to have, negative effects on the economies and securities markets
of certain emerging market countries. Although many of the emerging market securities in which a Fund may invest are traded on securities
exchanges, they may trade in limited volume, and the exchanges may not provide all of the conveniences or protections provided by securities
exchanges in more developed markets.
Additional risks of emerging market securities may include
greater social, economic, and political uncertainty and instability; more substantial governmental involvement in the economy; less governmental
supervision and regulation; greater custody and operational risks; unavailability of currency hedging techniques; less stringent investor
protection and disclosure standards; companies that are newly organized and small; differences in auditing and financial reporting standards,
which may result in unavailability or unreliability of material information about issuers; less developed legal, regulatory, and accounting
systems; and greater environmental risk. Many emerging market countries are highly reliant on international trade and exports, including
the export of commodities. Their economies may be significantly impacted by fluctuations in commodity prices and the global demand for
certain commodities. In addition, many emerging market countries with less established health care systems have experienced outbreaks
of pandemics or contagious diseases from time to time. In addition, emerging securities markets may have different clearance and settlement
procedures, which may be unable to keep pace with the volume of securities transactions or otherwise make it difficult to engage in such
transactions.
Settlement of securities transactions in emerging
markets may be subject to risk of loss and may be delayed more often than transactions settled in the United States, in part because a
Fund will need to use brokers and counterparties that are less well capitalized, and custody and registration of assets in some countries
may be unreliable compared to more developed countries. Settlement problems may cause a Fund to miss attractive investment opportunities,
hold a portion of its assets in cash pending settlement, or be delayed in disposing of a portfolio security. It may be more difficult
to obtain and/or enforce a judgment in a court outside the U.S., and a judgment against a foreign government may be unenforceable.
Frontier markets, a subset of emerging markets, generally
have smaller economies and less mature capital markets than emerging markets. As a result, the risks of investing in emerging market countries
are magnified in frontier market countries. Frontier markets are more susceptible to having abrupt changes in currency values, less mature
markets and settlement practices, and lower trading volumes that could lead to greater price volatility and illiquidity.
•
Equity Securities
Risk
Although stocks may have the potential to outperform other
asset classes over the long term, their prices tend to fluctuate more dramatically over the shorter term. These movements may result from
factors affecting individual companies, or from broader influences like changes in interest rates, market conditions, or investor confidence,
or announcements of economic, political, or financial information.
•
ESG
Considerations Risk
With respect to the Strategic Emerging
Markets Fund, the ESG considerations assessed as part of the investment process to implement the Fund’s investment strategy in pursuit
of its investment objective may vary across types of eligible investments and issuers, and not every ESG factor may be identified or evaluated
for every investment. The Fund’s portfolio will not be solely based on ESG considerations, and therefore the issuers in which the
Fund invests may not be considered ESG-focused companies. The incorporation of ESG factors may affect the Fund’s exposure
to certain issuers or industries and may not work
as intended. The Fund may underperform other funds that do not assess an issuer’s ESG factors or that use a different methodology
to identify and/or incorporate ESG factors. Information used by the Fund to evaluate such factors may not be readily available, complete
or accurate, and may vary across providers and issuers as ESG is not a uniformly defined characteristic. There is no guarantee that the
evaluation of ESG considerations will be additive to the Fund’s performance.
•
ESG Risk
With respect to the Balanced Fund,
because the Invesco Index and the Bond Segment use ESG factors to assess and exclude certain investments for non-financial reasons, the
Fund may forgo some market opportunities available to funds that do not use these factors. The securities of companies with favorable
ESG scores may underperform similar companies that do not score as well or may underperform the stock market as a whole. As a result,
the Fund may underperform funds that do not screen or score companies based on ESG factors or funds that use a different ESG methodology.
Information used to evaluate such ESG factors may not be readily available, complete, or accurate, which could negatively impact the Fund’s
performance. In addition, a company’s ESG score may differ from that assigned by other funds or an investor. As a result, the companies
deemed eligible for inclusion in the Fund’s portfolio may not reflect the beliefs or values of any particular investor and may not
be deemed to exhibit positive or favorable ESG characteristics if different metrics were used to evaluate them.
•
Fixed Income Securities
Risk
The values of debt securities change in response to interest
rate changes. In general, as interest rates rise, the value of a debt security is likely to fall. This risk is generally greater for obligations
with longer maturities or for debt securities that do not pay current interest (such as zero-coupon securities). Debt securities with
variable and floating interest rates can be less sensitive to interest rate changes, although, to the extent a Fund’s income is
based on short-term interest rates that fluctuate over short periods of time, income received by the Fund may decrease as
a result of a decline in interest rates. The value
of a debt security also depends on the issuer’s actual or perceived credit quality or ability to pay principal and interest when
due. The value of a debt security is likely to fall if an issuer or the guarantor of a security is unable or unwilling (or is perceived
to be unable or unwilling) to make timely principal and/or interest payments or otherwise to honor its obligations or if the debt security’s
rating is downgraded by a credit rating agency. The value of a debt security can also decline in response to changes in market, economic,
industry, political, regulatory, public health, and other conditions that affect a particular type of debt security or issuer or debt
securities generally. Certain events, such as market or economic developments, regulatory or government actions, natural disasters, pandemics,
terrorist attacks, war, and other geopolitical events can have a dramatic adverse effect on the debt market and the overall liquidity
of the market for fixed income securities.
•
Extension
Risk. During periods of rising interest rates, the average life of certain types of securities may be extended because of
slower than expected principal payments. This may lock in a below-market interest rate, increase the security’s duration, and reduce
the value of the security.
•
Prepayment
Risk. Prepayment risk is the risk that principal of a debt obligation will be repaid at a faster rate than anticipated. In
such a case, a Fund may lose the benefit of a favorable interest rate for the remainder of the term of the security in question, and may
only be able to reinvest the amount of the prepayment at a less favorable rate.
•
Interest
Rate Risk. The values of bonds and other debt instruments usually rise and fall in response to changes in interest rates.
The values of debt instruments generally increase in response to declines in interest rates and decrease in response to rises in interest
rates. Interest rate risk is generally greater for fixed-rate instruments than floating-rate instruments and for investments with longer
durations or maturities. Some investments give the issuer the option to call or redeem an investment before its maturity date. If an issuer
calls or redeems an investment during a time of declining interest rates, a Fund might have
to reinvest the proceeds in an investment offering
a lower yield, and therefore might not benefit from any increase in value as a result of declining interest rates. Negative or very low
interest rates could magnify the risks associated with changes in interest rates. In general, changing interest rates, including rates
that fall below zero, could have unpredictable effects on markets and may expose fixed income and related markets to heightened volatility.
•
Focused
Portfolio Risk
The Global Fund’s portfolio tends
to be invested in a relatively small number of stocks, rather than hundreds. As a result, for the Global Fund, an increase or decrease
in the value of the securities of a single issuer may have a greater impact on the Fund’s NAV and the Fund’s performance could
be more volatile than the performance of funds invested in larger numbers of securities.
•
Foreign Investment
Risk
Investments in securities of foreign
issuers, securities of companies with significant foreign exposure, and foreign currencies can involve additional risks relating to market,
industry, political, regulatory, public health, and other conditions. Political, social, diplomatic, and economic developments, U.S. and
foreign government action such as the imposition of currency or capital blockages, controls, or tariffs, economic and trade sanctions
or embargoes, security suspensions, entering or exiting trade or other intergovernmental agreements, or the expropriation or nationalization
of assets in a particular country, can cause dramatic declines in certain or all securities with exposure to that country and other countries.
Economic or other sanctions imposed on a foreign country or issuer by the U.S., or on the U.S. by a foreign country, could impair a Fund’s
ability to buy, sell, hold, receive, deliver, or otherwise transact in certain securities. In the event of nationalization, expropriation,
or other confiscation, a Fund could lose its entire foreign investment in a particular country. There may be quotas or other limits on
the ability of a Fund (or clients of a Fund’s investment adviser or subadviser) to invest or maintain investments in securities
of issuers in certain countries. Enforcing legal rights can be more difficult, costly, and limited in certain foreign countries, and can
be particularly
difficult against foreign governments. Because non-U.S. securities are
normally denominated and traded in currencies other than the U.S. dollar, the value of a Fund’s assets may be affected favorably
or unfavorably by changes in currency exchange rates, exchange control regulations, and restrictions or prohibitions on the repatriation
of non-U.S. currencies. Income and gains with respect to investments in certain countries may be subject to withholding and other taxes.
There may be less information publicly available about a non-U.S. company than about a U.S. company, and many non-U.S. companies are not
subject to accounting, auditing, and financial reporting standards, regulatory framework and practices comparable to those in the United
States. The securities of some non-U.S. companies are less liquid and at times more volatile than securities of comparable U.S. companies.
Non-U.S. transaction costs, such as brokerage commissions and custody costs may be higher than in the United States. In addition, foreign
markets can perform differently from U.S. markets and can react differently to market, economic, industry, political, regulatory, geopolitical,
public health, and other conditions than the U.S. market.
The willingness and ability of foreign governmental entities
to pay principal and interest on government securities depends on various economic factors, including for example the issuer’s balance
of payments, overall debt level, and cash-flow considerations related to the availability of tax or other revenues to satisfy the issuer’s
obligations. If a foreign governmental entity defaults on its obligations on the securities, a Fund may have limited recourse available
to it. The laws of some foreign countries may limit a Fund’s ability to invest in securities of certain issuers located in those
countries. Special tax considerations apply to a Fund’s investments in foreign securities. A Fund’s investments in foreign
securities or foreign currencies may increase or accelerate the Fund’s recognition of ordinary income and may affect the amount,
timing, or character of the Fund’s distributions.
A Fund may invest in foreign securities known as depositary
receipts, in the form of American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”), Global
Depositary Receipts (“GDRs”), or other
similar securities. An ADR is a U.S. dollar-denominated security issued
by a U.S. bank or trust company that represents, and may be converted into, a foreign security. An EDR or a GDR is generally similar but
is issued by a non-U.S. bank. Depositary receipts are subject to the same risks as direct investment in foreign securities. Depositary
receipts may not necessarily be denominated in the same currency as the underlying securities into which they may be converted, and changes
in currency exchange rates may affect the value of an ADR investment in ways different from direct investments in foreign securities.
Funds may invest in both sponsored and unsponsored depositary receipts. Unsponsored depositary receipts are organized independently and
without the cooperation of the issuer of the underlying securities. As a result, available information concerning the issuers may not
be as current for unsponsored depositary receipts and the prices of unsponsored depositary receipts may be more volatile than if such
instruments were sponsored by the issuer. An investment in an ADR is subject to the credit risk of the issuer of the ADR.
•
Frequent Trading/Portfolio
Turnover Risk
The length of time a Fund has held a particular security
is not generally a consideration in investment decisions. The investment policies of a Fund may lead to frequent changes in the Fund’s
investments, particularly in periods of volatile market movements, in order to take advantage of what the Fund’s investment adviser
or subadviser believes to be temporary investment opportunities. A change in the securities held by a Fund is known as “portfolio
turnover.” Portfolio turnover generally involves some expense to a Fund, including brokerage commissions, bid-asked spreads, dealer
mark-ups, and other transaction costs on the sale of securities and reinvestments in other securities, and may result in the realization
of taxable capital gains (including short-term gains, which are generally treated as ordinary income when distributed to shareholders).
The trading costs and tax effects associated with portfolio turnover may adversely affect a Fund’s performance. Consult your tax
adviser regarding the effect of a Fund’s portfolio turnover rate on your investments.
•
Geographic Focus Risk
When a Fund invests a relatively large percentage of its
assets in issuers located in a single country, a small number of countries, or a particular geographic region, the Fund’s performance
could be closely tied to the market, currency, economic, political, or regulatory conditions and developments in those countries or that
region, and could be more volatile than the performance of more geographically diversified funds.
•
Growth Company
Risk
Growth company securities tend to be more volatile in
terms of price swings and trading volume than many other types of equity securities. Growth companies, especially technology related companies,
have seen dramatic rises and falls in stock valuations. Funds that invest in growth companies are subject to the risk that the market
may deem these companies’ stock prices over-valued, which could cause steep and/or volatile price swings. Also, since investors
buy these stocks because of their expected superior earnings growth, earnings disappointments often result in sharp price declines.
•
Hedging Risk
There can be no assurance that a Fund’s
hedging transactions will be effective. If a Fund takes a short position in a particular currency, security, or bond market, it will lose
money if the currency, security, or bond market appreciates in value, or an expected credit event fails to occur. Any efforts at buying
or selling currencies could result in significant losses for the Fund. Further, foreign currency transactions that are intended to hedge
the currency risk associated with investing in foreign securities and minimize the risk of loss that would result from a decline in the
value of the hedged currency may also limit any potential gain that might result should the value of such currency increase.
•
Indexing Risk
There are several reasons why the performance of the U.S.
Equity Segment of the Balanced Fund may not track the performance of the Invesco Index. For example, the Fund incurs a number of operating
expenses not applicable to the Invesco Index, and incurs costs in buying and selling securities. The U.S. Equity Segment may not be fully
invested at times,
either as a result of cash flows into the Fund or reserves of cash held
by the Fund to meet redemptions. The return on the sample of securities purchased by the investment adviser or subadviser, or futures
or other derivative positions taken by the investment adviser or subadviser, to replicate the performance of the Invesco Index may not
correlate precisely with the return on the Invesco Index. Differences between securities held by the U.S. Equity Segment and the securities
comprising the Invesco Index may result from legal restrictions, costs, or liquidity constraints, especially during times when a sampling
methodology is used.
•
Inflation Risk
The value of assets or income from a Fund’s investments
will be less in the future as inflation decreases the value of money. As inflation increases, the value of a Fund’s assets can decline
as can the value of the Fund’s distributions. The market prices of debt securities generally fall as inflation increases because
the purchasing power of the future income and repaid principal is expected to be worth less when received by the Fund. Debt securities
that pay a fixed rather than variable interest rate are especially vulnerable to inflation risk because variable-rate debt securities
may be able to participate, over the long term, in rising interest rates which have historically accompanied long-term inflationary trends.
•
Inflation-Linked
Securities Risk
Inflation-linked securities are typically fixed income
securities whose principal values are periodically adjusted according to a measure of inflation. If the index measuring inflation falls,
the principal value of an inflation-linked security will be adjusted downward, and consequently the interest payable on the security (calculated
with respect to a smaller principal amount) will be reduced. Repayment of the original principal of the security upon maturity (as adjusted
for inflation) is guaranteed in the case of U.S. Treasury inflation-linked securities. For securities that do not provide a similar guarantee,
the adjusted principal value of the security repaid at maturity may be less than the original principal.
Alternatively, the interest rates payable on certain inflation-linked
securities may be
adjusted according to a measure of inflation. As a result, the principal
values of such securities do not adjust according to the rate of inflation, although the interest payable on such securities may decline
during times of falling inflation.
The values of inflation-linked securities are expected
to change in response to changes in real interest rates. Real interest rates are tied to the relationship between nominal interest rates
and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, leading to
a decrease in value of inflation-linked securities. Inflation-linked securities may cause a potential cash flow mismatch to investors,
because an increase in the principal amount of an inflation-linked security will be treated as interest income currently subject to tax
at ordinary income rates even though investors will not receive repayment of principal until maturity. If a Fund invests in such securities,
it will be required to distribute such interest income in order to qualify for treatment as a regulated investment company and eliminate
the Fund-level tax, without a corresponding receipt of cash, and therefore may be required to dispose of portfolio securities at a time
when it may not be advantageous to do so in order to make such distributions.
•
Large Company
Risk
Large-capitalization stocks as a group could fall out
of favor with the market, causing a Fund’s investments in large-capitalization stocks to underperform investments that focus on
small- or medium-capitalization stocks. Larger, more established companies may be slow to respond to challenges, including changes to
technology or consumer tastes, and may grow more slowly than smaller companies, especially during market cycles corresponding to periods
of economic expansion. Market capitalizations of companies change over time.
•
Leveraging
Risk
The use of leverage has the potential to increase returns
to shareholders, but also involves additional risks. A Fund may create leverage by borrowing money (through traditional borrowings or
by means of so-called reverse repurchase agreements); certain transactions, including, for example, when-issued, delayed-delivery, to-be-announced,
and forward commitment
purchases, loans of portfolio securities, dollar roll transactions, and
the use of some derivatives, can also result in leverage. Leverage will increase the volatility of the Fund’s investment portfolio
and could result in larger losses than if it were not used. The use of leverage is considered to be a speculative investment practice
and may result in losses to a Fund. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment.
A Fund will typically pay interest or incur other borrowing costs in connection with leverage transactions.
•
LIBOR Risk
Certain instruments in which a Fund
may invest rely in some fashion upon LIBOR. LIBOR is an average interest rate, determined by the ICE Benchmark Administration, that banks
charge one another for the use of short-term money. The United Kingdom’s Financial Conduct Authority (the “FCA”), which
regulates LIBOR, has announced plans to phase out the use of LIBOR by the end of 2021. The FCA and LIBOR’s administrator, ICE Benchmark
Administration, have also announced that most LIBOR settings will no longer be published after the end of 2021 and a majority of U.S.
dollar LIBOR settings will no longer be published after June 30, 2023. Actions by regulators have resulted in the establishment of alternative
reference rates to LIBOR in most major currencies. Various financial industry groups have been planning for transition away from LIBOR,
but there are obstacles to converting certain securities and transactions to new reference rates. Markets are developing but questions
around liquidity in these rates and how to appropriately adjust these rates to mitigate any economic value transfer at the time of transition
remain a significant concern. It is difficult to predict the full impact of the transition away from LIBOR on a Fund. The transition process
may involve, among other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR, particularly
insofar as the documentation governing such instruments does not include “fall back” provisions addressing the transition
from LIBOR. With respect to most LIBOR-based instruments in which a Fund may invest, the pricing and other terms governing the adoption
of any successor rate are expected to limit or eliminate
the direct effect of the transition to a successor rate on the value of
such instruments. However, uncertainty and volatility arising from the transition may result in a reduction in the value of certain LIBOR-based
instruments held by a Fund or reduce the effectiveness of related transactions such as hedges. Any such effects of the transition away
from LIBOR, as well as other unforeseen effects, could result in losses to a Fund.
•
Liquidity Risk
Liquidity risk is the risk that particular investments
may be difficult to sell or terminate at approximately the price at which the Fund is carrying the investments. The ability of a Fund
to dispose of illiquid positions at advantageous prices may be greatly limited, and a Fund may have to continue to hold such positions
during periods when the investment adviser or subadviser otherwise would have sold them. Some securities held by a Fund may be restricted
as to resale, may trade in the over-the-counter (“OTC”) market, or may not have an active trading market due to adverse market,
economic, industry, political, regulatory, geopolitical, public health, or other conditions. In addition, a Fund, by itself or together
with other accounts managed by the investment adviser or subadviser, may hold a position in a security that is large relative to the typical
trading volume for that security, which can make it difficult for the Fund to dispose of the position at an advantageous time or price.
Market values for illiquid securities may not be readily
available, and there can be no assurance that any fair value assigned to an illiquid security at any time will accurately reflect the
price a Fund might receive upon the sale of that security. It is possible that, during periods of extreme market volatility or unusually
high and unanticipated levels of redemptions, a Fund may be forced to sell large amounts of securities or terminate outstanding transactions
at a price or time that is not advantageous in order to meet redemptions or other cash needs. In such a case, the sale proceeds received
by a Fund may be substantially less than if the Fund had been able to sell the securities or terminate the transactions in more orderly
transactions, and the sale price may be substantially lower than the price previously used by the Fund to value the securities for purposes
of determining
the Fund’s NAV. To the extent a Fund holds illiquid securities,
it may be more likely to pay redemption proceeds in kind.
•
Management
Risk
Each Fund is subject to management risk because it relies
on the investment adviser’s and/or subadviser’s investment analysis and its selection of investments to achieve its investment
objective. A Fund’s investment adviser or subadviser manages the Fund based on its assessment of economic, financial, and market
factors and its investment judgment. The investment adviser or subadviser may fail to ascertain properly the appropriate mix of securities
for any particular economic cycle. A Fund’s investment adviser or subadviser applies its investment techniques and risk analyses
in making investment decisions for the Fund, but there can be no guarantee that they will produce the intended result. Management risk
includes the risk that poor security selection will cause a Fund to underperform relative to other funds with similar investment objectives,
or that the timing of movements from one type of security to another could have a negative effect on the overall investment performance
of the Fund. There can be no assurance that there will be a liquid market for instruments held by the Fund at any time.
•
Market Risk
The values of a Fund’s portfolio
securities may decline, at times sharply and unpredictably, as a result of unfavorable broad market developments, which may affect securities
markets generally or particular industries, sectors, or issuers. The values of a Fund’s investments may decline as a result of a
number of such factors, including actual or perceived changes in general economic and market conditions, industry, political, regulatory,
geopolitical, public health, and other developments, including the imposition of tariffs or other protectionist actions, changes in interest
rates, currency rates, or other rates of exchange, and changes in economic and competitive industry conditions. Likewise, terrorism, war,
natural and environmental disasters, and epidemics or pandemics may be highly disruptive to economies and markets. For example, the global
pandemic outbreak of the novel coronavirus known as COVID-19 and efforts to contain its spread have produced, and
will likely continue to produce, substantial market
volatility, severe market dislocations and liquidity constraints in many markets, exchange trading suspensions and closures, higher default
rates, and global business disruption, and they may result in future significant adverse effects, such as declines in global financial
markets and a substantial economic downturn or recession throughout the world. Such factors may have a significant adverse effect on a
Fund’s performance and have the potential to impair the ability of a Fund’s investment adviser, subadviser, or other service
providers to serve the Fund and could lead to disruptions that negatively impact the Fund. Different parts of the market and different
types of securities can react differently to these conditions. The possibility that security prices in general will decline over short
or even extended periods subjects a Fund to unpredictable declines in the value of its shares, as well as potentially extended periods
of poor performance. In addition, the increasing popularity of passive index-based investing may have the potential to increase security
price correlations and volatility. As passive strategies generally buy or sell securities based simply on inclusion and representation
in an index, securities’ prices will have an increasing tendency to rise or fall based on whether money is flowing into or out of
passive strategies rather than based on an analysis of the prospects and valuation of individual securities. This may result in increased
market volatility as more money is invested through passive strategies.
Federal, state, and other governments, their regulatory
agencies, or self-regulatory organizations may take actions that affect the regulation of the securities in which a Fund invests or the
issuers of such securities in ways that are unforeseeable. The uncertainty surrounding the sovereign debt of a significant number of European
Union countries, as well as the status of the Euro, the European Monetary Union, and the European Union itself, has disrupted and may
continue to disrupt markets in the U.S. and around the world. The risks associated with investments in Europe may be heightened due to
the United Kingdom’s exit from the European Union on January 31, 2020. An agreement between the United Kingdom and the European
Union governing their future trade relationship became effective on January 1, 2021.
Significant uncertainty remains in the market regarding the ramifications
of that development and the arrangements that will apply to the United Kingdom’s relationship with the European Union and other
countries following its withdrawal; the range and potential implications of possible political, regulatory, economic, and market outcomes
are difficult to predict. There is the potential for decreased trade, capital outflows from the United Kingdom, devaluation of the pound
sterling, decreased business and consumer spending and decreased foreign investment in the United Kingdom, and negative effects on the
value of a Fund’s investments and/or on a Fund’s ability to enter into certain transactions or value certain investments.
If one or more additional countries leave the European Union, or the European Union partially or completely dissolves, the world’s
economies and securities markets may be significantly disrupted and adversely affected. Legislation or regulation also may change the
way in which a Fund, the investment adviser, or subadviser is regulated. Such legislation, regulation, or other government action could
limit or preclude a Fund’s ability to achieve its investment objective and affect the Fund’s performance.
•
Mortgage- and
Asset-Backed Securities Risk
Investments in mortgage-related and other asset-backed securities
are subject to the risk of severe credit downgrades, illiquidity and defaults to a greater extent than many other types of fixed income
investments. Mortgage-backed securities, including collateralized mortgage obligations and certain stripped mortgage-backed securities,
represent a participation in, or are secured by, mortgage loans. Asset-backed securities are generally structured like mortgage-backed
securities, but instead of mortgage loans or interests in mortgage loans, the underlying assets may include such items as motor vehicle
installment sale or installment loan contracts, leases of various types of real and personal property, receivables from credit card agreements,
and student loan payments. Asset-backed securities also may be backed by pools of corporate or sovereign bonds, loans made to corporations,
or a combination of these bonds and loans, commonly referred to as “collateralized debt obligations,” including collateralized
bond obligations (“CBOs”) and collateralized loan
obligations (“CLOs”). The assets backing collateralized debt
obligations may consist in part or entirely of high risk, below investment grade debt obligations (or comparable unrated obligations).
In the case of CBOs and certain other collateralized debt obligations, those may include, by way of example, high yield debt, residential
privately issued mortgage-related securities, commercial privately issued mortgage-related securities, trust preferred securities, and
emerging market debt. In the case of CLOs, they may include, among other things, domestic and foreign senior secured loans, senior unsecured
loans, and subordinate corporate loans, any or all of which may be rated below investment grade or may be comparable unrated obligations.
Traditional debt investments typically pay a fixed rate
of interest until maturity, when the entire principal amount is due. By contrast, payments on mortgage-backed and many asset-backed investments
typically include both interest and partial payment of principal. Principal may also be prepaid voluntarily, or as a result of refinancing
or foreclosure. The Fund may have to invest the proceeds from prepaid investments in other investments with less attractive terms and
yields. As a result, these securities may have less potential for capital appreciation during periods of declining interest rates than
other securities of comparable maturities, although they may have a similar risk of decline in market value during periods of rising interest
rates. Because the prepayment rate generally declines as interest rates rise, an increase in interest rates will likely increase the duration,
and thus the volatility, of mortgage-backed and asset-backed securities. (Duration is a measure of the expected life of a fixed income
security that is used to determine the sensitivity of the security’s price to changes in interest rates. Unlike the maturity of
a fixed income security, which measures only the time until final payment is due, duration takes into account the time until all payments
of interest and principal on a security are expected to be made, including how these payments are affected by prepayments and by changes
in interest rates.) Prepayment rates are difficult to predict and the potential impact of prepayments on the value of a mortgage-related
or other asset-backed security depends on the terms of the instrument and can result in significant volatility. In addition to interest
rate risk (as
described under “Interest Rate Risk”), investments in mortgage-backed
securities composed of subprime mortgages and investments in CDOs and CLOs backed by pools of high-risk, below investment grade debt securities
may be subject to a higher degree of credit risk, valuation risk, and liquidity risk (as described under “Credit Risk,” “Valuation
Risk,” and “Liquidity Risk”). Litigation with respect to the representations and warranties given in connection with
the issuance of mortgage-backed securities can be an important consideration in investing in such securities, and the outcome of any such
litigation could significantly impact the value of the Fund’s mortgage-backed investments.
The types of mortgages underlying securities held by the
Fund may differ and may be affected differently by market factors. For example, the Fund’s investments in residential mortgage-backed
securities will likely be affected significantly by factors affecting residential real estate markets and mortgages generally; similarly,
investments in commercial mortgage-backed securities will likely be affected significantly by factors affecting commercial real estate
markets and mortgages generally.
Some mortgage-backed and asset-backed investments receive
only the interest portion (“IOs”) or the principal portion (“POs”) of payments on the underlying assets. The yields
and values of these investments are extremely sensitive to changes in interest rates and in the rate of principal payments on the underlying
assets. IOs tend to decrease in value if interest rates decline and rates of repayment (including prepayment) on the underlying mortgages
or assets increase; it is possible that the Fund may lose the entire amount of its investment in an IO due to a decrease in interest rates.
Conversely, POs tend to decrease in value if interest rates rise and rates of repayment decrease. Moreover, the market for IOs and POs
may be volatile and limited, which may make them difficult for the Fund to buy or sell. The values of mortgage-related and other asset-backed
securities may be substantially dependent on the servicing of the underlying asset pools, and are therefore subject to risks associated
with the negligence or malfeasance by their servicers and to the credit risk of their servicers. In certain
situations, the mishandling of related documentation may also affect the
rights of securities holders in and to the benefits of the underlying collateral. There may be legal and practical limitations on the
enforceability of any security interest granted with respect to underlying assets, or the value of the underlying assets, if any, may
be insufficient if the issuer defaults.
The Fund may gain investment exposure to mortgage-backed
and asset-backed investments by entering into agreements with financial institutions to buy the investments at a fixed price at a future
date. The Fund may or may not take delivery of the investments at the termination date of such an agreement, but will nonetheless be exposed
to changes in value of the underlying investments during the term of the agreement. These transactions may create investment leverage.
•
Passive Management
Risk
Unlike many investment companies that
are “actively managed,” the U.S. Equity Segment of the Balanced Fund is a “passive” investor and therefore does
not utilize an investing strategy that seeks returns in excess of the Invesco Index. Therefore, the U.S. Equity Segment would not necessarily
buy or sell a security unless that security is added to, or removed from, the Invesco Index, even if that security generally is underperforming.
If a specific security is removed from the Invesco Index, the Fund may be forced to sell such security at an inopportune time. The Invesco
Index may not contain the appropriate mix of securities for any particular economic cycle. Additionally, the U.S. Equity Segment rebalances
its portfolio in accordance with the Invesco Index, and, therefore, any changes to the Invesco Index’s rebalance schedule will result
in corresponding changes to the U.S. Equity Segment’s rebalance schedule. Further, unlike with an actively managed fund, Invesco
does not use techniques or defensive strategies designed to lessen the impact of periods of market volatility or market decline. This
means that, based on certain market and economic conditions, the U.S. Equity Segment’s performance could be lower than other types
of funds with investment advisers that actively manage their portfolio assets to take advantage of market opportunities or defend against
market events.
•
Preferred Stock Risk
Like other equity securities, preferred
stock is subject to the risk that its value may decrease based on actual or perceived changes in the business or financial condition of
the issuer. In addition, if interest rates rise, the dividends on preferred stocks may be less attractive, causing the prices of preferred
stocks to decline. Preferred stock may have mandatory sinking fund provisions or call/redemption provisions that can negatively affect
its value. In addition, in the event of liquidation of a corporation’s assets, the rights of preferred stock generally are subordinate
to the rights associated with a corporation’s debt securities. Preferred stocks are also subject to additional risks, such as potentially
greater volatility and risks related to deferral, non-cumulative dividends, subordination, liquidity, limited voting rights, and special
redemption rights.
•
Quantitative
Models Risk
Certain portfolio managers use quantitative models as
part of the idea generation process. Quantitative models are based upon many factors that measure individual securities relative to each
other. Such models may not produce the intended results and can be adversely affected by errors or imperfections in the factors or the
data on which measurements are based, changing sources of market return or market risk, or any technical issues with or errors in the
design, construction, implementation, or maintenance of the models.
•
Redemptions
by Affiliated Funds and by Other Significant Investors
A Fund may be an investment option for other MassMutual
Funds that are managed as “funds of funds” and for other investors who may make substantial investments in the Fund. As a
result, from time to time, a Fund may experience a relatively large redemption and could be required to liquidate assets at inopportune
times or at a loss or depressed value, which could cause the value of your investment to decline. Similarly, large Fund share purchases
may adversely affect a Fund’s performance to the extent that the Fund is delayed in investing new cash and is required to maintain
a larger cash position than it ordinarily would, or if the Fund is unable to invest the cash in portfolio securities that it considers
as desirable as the Fund’s portfolio securities.
•
Reinvestment Risk
Income from a Fund’s portfolio
will decline if and when the Fund invests the proceeds from matured, traded, or called debt obligations at market interest rates that
are below the portfolio’s current earnings rate. A decline in income could affect a Fund’s overall return.
•
REIT Risk
An investment in a REIT may be subject to risks similar
to those associated with direct ownership of real estate, including losses from casualty, condemnation or natural disasters, and changes
in local and general economic conditions, supply and demand, interest rates, zoning laws, environmental regulations and other governmental
action, regulatory limitations on rents, property taxes, and operating expenses. In addition, an investment in a REIT may be subject to
additional risks, such as poor performance by the manager of the REIT, adverse changes to the tax laws or failure by the REIT to qualify
for favorable tax treatment under the Internal Revenue Code of 1986, as amended (the “Code”), and to the risk of general declines
in stock prices. In addition, some REITs have limited diversification because they invest in a limited number of properties, a narrow
geographic area, or a single type of property. A “mortgage” REIT that invests most or all of its assets in mortgages will
be subject to many of the risks described above in respect of mortgage-backed securities. Also, the organizational documents of a REIT
may contain provisions that make changes in control of the REIT difficult and time-consuming. As a shareholder in a REIT a Fund, and indirectly
the Fund’s shareholders, would bear its ratable share of the REIT’s expenses and would at the same time continue to pay its
own fees and expenses. Real estate-related investments may entail leverage and may be highly volatile. The securities of small real-estate
issuers can be more volatile and less liquid than securities of larger issuers and their issuers can have more limited financial resources.
•
Repurchase Agreement
Risk
A Fund may enter into repurchase agreements. These transactions
must be fully collateralized, but involve credit risk to a Fund if the other party should default on its obligation and the Fund is delayed
or prevented from recovering
the collateral, or if the Fund is required to return collateral to a borrower
at a time when it may realize a loss on the investment of that collateral.
•
Restricted
Securities Risk
A Fund may hold securities that are restricted as to resale
under the U.S. federal securities laws, such as securities in certain privately held companies. There can be no assurance that a trading
market will exist at any time for any particular restricted security. Limitations on the resale of these securities may prevent the Fund
from disposing of them promptly at reasonable prices or at all. Restricted securities may be highly illiquid. A Fund may have to bear
the expense of registering the securities for resale and the risk of substantial delays in effecting the registration. Restricted securities
may be difficult to value because market quotations may not be readily available, and there may be little publicly available information
about the securities or their issuers. The values of restricted securities may be highly volatile.
•
Risk of Investment
in other Funds or Pools
A Fund may invest in other investment companies or pooled
vehicles, including closed-end funds, trusts, and exchange-traded funds (“ETFs”), that are advised by the Fund’s investment
adviser or subadviser, as applicable, their affiliates, or by unaffiliated parties, to the extent permitted by applicable law. As a shareholder
in an investment company or other pool, the Fund, and indirectly that Fund’s shareholders, bear a ratable share of the investment
company’s or pool’s expenses, including, but not limited to, advisory and administrative fees, and the Fund at the same time
continues to pay its own fees and expenses. Investment companies or pools in which the Funds may invest may change their investment objectives
or policies without the approval of a Fund, in which case a Fund may be forced to withdraw its investment from the investment company
or pool at a disadvantageous time. Private investment pools in which the Funds may invest are not registered under the 1940 Act, and so
will not offer all of the protections provided by the 1940 Act (including, among other things, independent oversight, protections against
certain conflicts of interest, and custodial risks). A Fund is exposed
indirectly to all of the risks applicable to any other investment company
or pool in which it invests, including that the investment company or pool will not perform as expected. Investments in other investment
companies or private pools may be illiquid, may be leveraged, and may be highly volatile.
Investing in other investment companies or private investment
vehicles sponsored or managed by the investment adviser or subadviser, as applicable, or affiliates of the investment adviser or subadviser,
as applicable, involves potential conflicts of interest. For example, the investment adviser or subadviser, as applicable, or their affiliates
may receive fees based on the amount of assets invested in such other investment vehicles, which fees may be higher than the fees the
investment adviser or subadviser, as applicable, receives for managing the investing Fund. Investment by a Fund in those other vehicles
may be beneficial in the management of those other vehicles, by helping to achieve economies of scale or enhancing cash flows. Due to
this and other factors, the investment adviser or subadviser, as applicable, will have an incentive to invest a portion of a Fund’s
assets in investment vehicles sponsored or managed by the investment adviser or subadviser, as applicable, or their affiliates in lieu
of investments by the Fund directly in portfolio securities, and will have an incentive to invest in such investment vehicles over non-affiliated
investment companies. The investment adviser or subadviser, as applicable, will have no obligation to select the least expensive or best
performing funds available to serve as an underlying investment vehicle. Similarly, the investment adviser or subadviser, as applicable,
will have an incentive to delay or decide against the sale of interests held by the Fund in investment vehicles sponsored or managed by
the investment adviser or subadviser, as applicable, or their affiliates.
ETFs are subject to many of the same
risks applicable to investments in mutual funds generally, including that an ETF will not perform as anticipated, that a Fund will bear
its proportionate share of the ETF’s fees and expenses, and that the ETF will lose money. ETFs are also subject to additional risks,
including, among others, the risk that the market price of an ETF’s shares may trade above or below its NAV, the risk that an active
trading market for an ETF’s shares may not develop
or be maintained, the risk that trading of an ETF’s shares may be halted, and the risk that the ETF’s shares may be delisted
from the listing exchange. Many ETFs engage in derivatives strategies and use leverage, and as a result their values can be highly volatile.
It is possible that an ETF’s performance will diverge from the performance of any index or indexes it seeks to replicate. Because
shares of ETFs are actively traded, their values may be affected in unanticipated ways by the effects of supply and demand in the market,
activities of short sellers, or unusual speculative activity in their shares. Some ETFs may experience periods of reduced liquidity due
to restrictions on trading activity or due to a general lack of investor interest in the asset class represented by the ETF. Unlike shares
of a mutual fund, which can be bought and redeemed from the issuing fund by all shareholders at a price based on NAV, shares of an ETF
may be purchased or redeemed directly from the ETF solely by Authorized Participants (“APs”) and only in aggregations of a
specified number of shares (“Creation Units”). ETFs may have a limited number of financial institutions that act as APs. To
the extent that those APs exit the business, or are unable to or choose not to process creation and/or redemption orders for Creation
Units, and no other AP steps forward to create and redeem ETF shares, the ETF’s shares may be more likely to trade at a premium
or discount to NAV and possibly face trading halts or delisting.
•
Sector Risk
If a Fund allocates a substantial amount of its assets to
one or more particular industries or to particular economic, market, or industry sectors, then economic, business, regulatory, or other
developments affecting issuers in those industries or sectors may affect the Fund adversely to a greater extent than if the Fund had invested
more broadly. Examples might include investments in the technology, health care, or financial sectors or in one or more industries within
those sectors. A substantial investment in one or more such industries or sectors has the potential to increase the volatility of a Fund’s
portfolio, and may cause the Fund to underperform other mutual funds.
•
Small and Mid-Cap Company Risk
Small and medium-sized companies may have limited product
lines, markets, or financial resources or they may depend on a few key employees. Such companies may have been recently organized and
have little or no track record of success. Also, a Fund’s investment adviser or subadviser may not have had an opportunity to evaluate
such newer companies’ performance in adverse or fluctuating market conditions. Market risk and liquidity risk are particularly pronounced
for stocks of small and medium-sized companies. The securities of small and medium-sized companies may trade less frequently and in smaller
volume than more widely held securities. The prices of these securities may fluctuate more sharply than those of other securities, and
a Fund may experience some difficulty in establishing or closing out positions in these securities at prevailing market prices. There
may be less publicly available information about the issuers of these securities or less market interest in such securities than in the
case of larger companies, both of which can cause significant price volatility. Some securities of small and medium-sized issuers may
be illiquid or may be restricted as to resale.
•
Sovereign Debt
Obligations Risk
Investments in debt securities issued by governments or
by government agencies and instrumentalities involve the risk that the governmental entities responsible for repayment may be unable or
unwilling to pay interest and repay principal when due. A governmental entity’s willingness or ability to pay interest and repay
principal in a timely manner may be affected by a variety of factors, including its cash flow, the size of its reserves, its access to
foreign exchange, the relative size of its debt service burden to its economy as a whole, and political constraints. A governmental entity
may default on its obligations or may require renegotiation or rescheduling of debt payments. Any restructuring of a sovereign debt obligation
held by the Fund will likely have a significant adverse effect on the value of the obligation. In the event of default of sovereign debt,
the Fund may be unable to pursue legal action against the sovereign issuer or to realize on collateral securing the debt. The sovereign
debt of many non-U.S. governments, including their sub-divisions and instrumentalities, is
rated below investment grade (“junk” or “high yield”
bonds). Sovereign debt risk may be greater for debt securities issued or guaranteed by emerging and/or frontier market countries. At times,
certain emerging and frontier market countries have declared moratoria on the payment of principal and interest on external debt. Certain
emerging and frontier market countries have experienced difficulty in servicing their sovereign debt on a timely basis, which has led
to defaults and the restructuring of certain indebtedness to the detriment of debtholders.
•
Special
Situations Risk
At times, a Fund may seek to benefit
from what it considers to be “special situations,” such as mergers, reorganizations, restructurings or other unusual events
that are expected to affect a particular issuer. There is a risk that the expected change or event might not occur, which could cause
the price of the security to fall, perhaps sharply. In that case, the investment might not produce the expected gains or might cause a
loss. This is an aggressive investment technique that may be considered speculative.
•
Stock Connect Risk
A Fund may invest in China A Shares,
which are equity securities of companies domiciled in China that are denominated and traded in Renminbi on the Shanghai or Shenzhen Stock
Exchanges. A Fund may invest in A Shares listed and traded on the Shanghai Stock Exchange or Shenzhen Stock Exchange through the Stock
Connect program. A Fund’s investments in Stock Connect A Shares are generally subject to Chinese securities regulations and listing
rules, among other restrictions that may affect the Fund’s investments and returns, including transfer restrictions, trading suspensions,
and daily limits on net purchases, which are subject to change. Such investments are also subject to heightened operational, tax, and
settlement risk and the risk of price fluctuations of A Shares during times when Stock Connect is not trading. Stock Connect is a relatively
new program. Further developments are likely and there can be no assurance as to the program’s continued existence or whether future
developments regarding the program may restrict or adversely affect the Fund’s investments or returns.
•
U.S. Government Securities Risk
U.S. Government securities include a variety of securities
that differ in their interest rates, maturities, and dates of issue. While securities issued or guaranteed by some agencies or instrumentalities
of the U.S. Government (such as the Government National Mortgage Association) are supported by the full faith and credit of the United
States, securities issued or guaranteed by certain other agencies or instrumentalities of the U.S. Government (such as Federal Home
Loan Banks) are supported only by the right of the issuer to borrow from the U.S. Government. Securities issued or guaranteed by
certain other agencies and instrumentalities of the U.S. Government (such as Fannie Mae and Freddie Mac) are not supported by the full
faith and credit of the U.S. Government and are supported only by the credit of the issuer itself. There is no assurance that the U.S.
Government would provide financial support to its agencies and instrumentalities if not required to do so. For securities not backed by
the full faith and credit of the United States, a Fund must look principally to the agency or instrumentality issuing or guaranteeing
the securities for repayment and may not be able to assert a claim against the United States if the agency or instrumentality does not
meet its commitment. Such securities may involve increased risk of loss of principal and interest compared to government debt securities
that are backed by the full faith and credit of the United States. In addition, certain governmental entities have been subject to regulatory
scrutiny regarding their accounting policies and practices and other concerns that may result in legislation, changes in regulatory oversight
and/or other consequences that could adversely affect the credit quality, availability, or investment character of securities issued by
these entities. Investments in these securities are also subject to, among other things, interest rate risk, prepayment risk, extension
risk, and the risk that the value of the securities will fluctuate in response to political, market, or economic developments.
•
Valuation Risk
A portion of a Fund’s assets may be valued at fair
value pursuant to guidelines that have been approved by the Trustees. A Fund’s assets may be valued using prices provided by a pricing
service or, alternatively, a broker-dealer
or other market intermediary (sometimes just one broker-dealer or other
market intermediary) when other reliable pricing sources may not be available. The Fund, or persons acting on its behalf, may determine
a fair value of a security based on such other information as may be available to them. There can be no assurance that any fair valuation
of an investment held by a Fund will in fact approximate the price at which the Fund might sell the investment at the time. Technological
issues or other service disruption issues involving third-party service providers may limit the ability of the Fund to value its investment
accurately or timely. To the extent a Fund sells a security at a price lower than the price it has been using to value the security, its
NAV will be adversely affected. If a Fund has overvalued securities it holds, you may pay too much for the Fund’s shares when you
buy into the Fund. If a Fund underestimates the price of its portfolio securities, you may not receive the full market value for your
Fund shares when you sell.
•
Value Company Risk
A Fund may purchase some equity securities at prices below
what the investment adviser or subadviser considers to reflect their actual or potential fundamental values. The Fund bears the risk that
the prices of these securities may not increase to reflect what the investment adviser or subadviser believes to be their fundamental
value or that the investment adviser or subadviser may have overestimated the securities’ fundamental value or that it may take
a substantial period of time to realize that value.
•
When-Issued, Delayed
Delivery, TBA, and Forward Commitment Transaction Risk
A Fund may purchase securities on a when-issued, delayed
delivery, to-be-announced, or forward commitment basis. These transactions involve a commitment by a Fund to purchase securities for a
predetermined price or yield, with payments and delivery taking place more than seven days in the future, or after a period longer than
the customary settlement period for that type of security. These transactions involve a risk of loss if the value of the securities declines
prior to the settlement date. These transactions may create investment leverage. Recently finalized rules of the Financial Industry
Regulatory Authority impose mandatory margin requirements for certain types
of when-issued, TBA, or forward commitment transactions, with limited exceptions. Such transactions historically have not been required
to be collateralized, and mandatory collateralization could increase the
cost of such transactions and impose added operational complexity and may increase the credit risk of such transactions to a Fund.
Management of the Funds
Investment Adviser
MML Investment Advisers,
LLC (“MML Advisers”), a Delaware limited liability company, located at 1295 State Street, Springfield, Massachusetts
01111-0001, is the Funds’ investment adviser and is responsible for providing all necessary investment management and administrative
services. MML Advisers, formed in 2013, is a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company (“MassMutual”).
Founded in 1851, MassMutual is a mutual life insurance company that provides a broad range of insurance, money management, retirement,
and asset accumulation products and services for individuals and businesses. As of September 30, 2021, MML Advisers had assets under management
of approximately $61.2 billion.
In 2021, each Fund paid MML Advisers an investment
management fee based on a percentage of each Fund’s average daily net assets as follows: 0.35% for the U.S. Government Money
Market Fund, 0.38% for the Inflation-Protected and Income Fund, 0.38% for the Core Bond Fund, 0.37% for the Diversified Bond Fund, 0.48%
for the Balanced Fund, 0.45% for the Disciplined Value Fund, 0.55% for the Main Street Fund, 0.45% for the Disciplined Growth Fund, 0.57%
for the Small Cap Opportunities Fund, 0.75% for the Global Fund, 0.83% for the International Equity Fund, and 1.00% for the Strategic
Emerging Markets Fund.
A discussion regarding the basis for the Trustees approving
any investment advisory contract of the Funds is available in the Funds’ annual report to shareholders dated September 30, 2021
and the Funds’ semiannual report to shareholders dated March 31, 2021.
Each Fund also pays MML Advisers an administrative
and shareholder services fee to compensate it for providing general administrative services to the Funds and for providing or causing
to be provided ongoing shareholder servicing to direct and indirect investors in the Funds. MML Advisers pays substantially all of the
fee to third parties who provide shareholder servicing and investor recordkeeping services. The fee is calculated and paid based on the
average daily net assets attributable to each share class of the Fund separately, and is paid at the following annual rates: 0.10% for
Class R5 shares; 0.20% for Service Class shares; 0.30% for Administrative Class shares and Class A shares; and 0.20% for Class R4
shares and Class R3 shares. Class I shares do not pay any administrative and shareholder services fee.
Subadvisers and Portfolio Managers
MML Advisers contracts with the following subadvisers to help manage the
Funds. Subject to the oversight of the Trustees, MML Advisers has the ultimate responsibility to oversee subadvisers and recommend their
hiring, termination, and replacement. This responsibility includes, but is not limited to, analysis and review of subadviser performance,
as well as assistance in the identification and vetting of new or replacement subadvisers. In addition, MML Advisers maintains responsibility
for a number of other important obligations, including, among other things, board reporting, assistance in the annual advisory contract
renewal process, and, in general, the performance of all obligations not delegated to a subadviser. MML Advisers also provides advice
and recommendations to the Trustees, and performs such review and oversight functions as the Trustees may reasonably request, as to the
continuing appropriateness of the investment objective, strategies, and policies of each Fund, valuations of portfolio securities, and
other matters relating generally to the investment program of each Fund.
Barings LLC (“Barings”),
an indirect, wholly-owned subsidiary of MassMutual, with principal offices located at 300 South Tryon Street, Charlotte, North Carolina
28202, manages the investments of the U.S. Government Money Market Fund,
Inflation-Protected and Income Fund,
Core Bond Fund, and Diversified Bond
Fund. In addition, Baring International Investment Limited (“BIIL”) serves
as sub-subadviser for the Inflation-Protected and Income Fund,
Core Bond Fund, and Diversified
Bond Fund and, subject to the supervision of Barings, is authorized to conduct securities transactions on behalf of the Funds.
BIIL is a wholly-owned subsidiary of Barings and its address is 20 Old Bailey, London, EC4M 7BF, United Kingdom. Barings has provided
investment advice to individual and institutional investors for more than 75 years and, with its subsidiaries, had assets under management
as of September 30, 2021 of approximately $387.2 billion.
is a Managing Director, the Head of Securitized Credit Research, and a
portfolio manager for Barings’ Investment Grade Fixed Income Group. Ms. Alekseeva shares primary responsibility for the day-to-day
management of the Inflation-Protected
and Income Fund, the Core Bond Fund, and the Diversified
Bond Fund. Ms. Alekseeva has worked in the industry since 2005. Prior to re-joining Barings in 2019, Ms. Alekseeva was employed
at Canada Pension Plan Investment Board as a Principal in the Structured Credit department, following positions at Bank of America Merrill
Lynch and PricewaterhouseCoopers.
is a Managing Director and portfolio manager for
Barings’ Investment Grade Fixed Income Group. Mr. Ehrenberg shares primary responsibility for the day-to-day management of the Core
Bond Fund and the Diversified Bond Fund. Mr. Ehrenberg has worked
in the industry since 2002 and his experience has encompassed portfolio management and credit analysis for both investment grade and high
yield corporate credit. Prior to joining Barings in 2004, Mr. Ehrenberg worked in capital markets at MassMutual as part of the firm’s
executive development program.
is a Managing Director and the Head of, and a portfolio
manager for, Barings’ Investment Grade Fixed Income Group. Mr. Sanford shares primary responsibility for the day-to-day management
of the Core Bond Fund and the Diversified
Bond Fund. Mr. Sanford is also responsible for the portfolio management of Barings’ multi-asset insurance client mandates
as well as the investment grade corporate bond strategies. Mr. Sanford has worked in the industry since 1994. Prior to joining Barings
in 2004, Mr. Sanford was employed at Booz, Allen and Hamilton as a management consultant and Bell South where he worked on mergers and
acquisitions and internal consulting projects.
is a Director and portfolio manager for Barings’
Investment Grade Fixed Income Group. Mr. Simler shares primary responsibility for the day-to-day management of the U.S.
Government Money Market Fund. Mr. Simler has worked in the industry since 1988. Prior to joining Barings in 2005, Mr. Simler was
employed at Citigroup Investments, CIGNA Investments, and Phoenix Equity Planning Corp.
Douglas Trevallion,
II, CFA |
|
is a Managing Director, the Head of Global Securitized
and Liquid Products, and a portfolio manager for Barings’ Investment Grade Fixed Income Group. Mr. Trevallion shares primary responsibility
for the day-to-day management of the Inflation-Protected and Income Fund,
the Core Bond Fund, and the Diversified
Bond Fund. Mr. Trevallion is also responsible for the portfolio management of Barings’ securitized and multi-asset portfolio
strategies. Mr. Trevallion has worked in the industry since 1987. Prior to joining Barings in 2000, Mr. Trevallion was employed at MassMutual,
where he established fixed income analytical and risk capabilities.
Invesco Advisers,
Inc. (“Invesco Advisers”), located at 1555 Peachtree Street, N.E., Atlanta, Georgia 30309, manages the investments
of the Balanced Fund, Main Street Fund, Small Cap Opportunities Fund, Global Fund,
and Strategic Emerging Markets Fund.
Invesco Advisers, as successor in interest to multiple investment advisers, is an indirect wholly-owned subsidiary of Invesco Ltd., a
publicly traded company that, through its subsidiaries, engages in the business of investment management on an international basis. In
addition, Invesco Capital Management LLC (“ICM”) serves as sub-subadviser for the Balanced
Fund and, subject to the supervision of Invesco Advisers, is authorized to trade securities and make discretionary investment decisions
on behalf of the Fund. ICM is a wholly-owned subsidiary of Invesco Ltd. and its address is 3500 Lacey Road, Suite 700, Downers Grove,
Illinois 60515. As of September 30, 2021, Invesco Advisers had approximately $734.7 billion in assets under management.
Jacob Borbidge, CFA, CAIA |
|
is a co-portfolio manager of the Balanced
Fund. Mr. Borbidge is a portfolio manager at Invesco Advisers. He has been associated with Invesco Advisers and/or its affiliates
since 2004. Prior to 2004, he was a mechanical engineer at ExxonMobil.
is a co-portfolio manager of the Balanced
Fund. Mr. Brill is Head of North America Invesment Grade for Invesco Fixed Income at Invesco Advisers. He has been associated with
Invesco Advisers and/or its affiliates since 2013. Prior to 2013, he was a portfolio manager and vice president at ING Investment Management,
where he specialized in investment grade credit and commercial mortgage-backed securities. Prior to that he was a portfolio analyst at
Wells Real Estate Funds. He entered the industry in 2002.
is a co-portfolio manager of the Small
Cap Opportunities Fund. Ms. Budzinski is a portfolio manager at Invesco Advisers. She has
been associated with Invesco Advisers and/or its affiliates since 2019. Prior to 2019, she was a Vice President of OppenheimerFunds, Inc.
(“OFI”) since May 2009 and a portfolio manager of OFI Global Institutional, Inc. since November 2012. She has served as sector
manager for healthcare for OFI’s Main Street Investment Team since May 2009. Prior to joining OFI, Ms. Budzinski was a healthcare
sector manager at RS Investments and Guardian Life Insurance Company. Ms. Budzinski joined Guardian Life Insurance Company in August 2006
and transitioned to RS Investments in October 2006 in connection with Guardian Life Insurance Company’s acquisition of an interest
in RS Investments.
is the portfolio manager of the Global
Fund. Mr. Delano is a portfolio manager at Invesco Advisers. He has been associated with
Invesco Advisers and/or its affiliates since 2019. Prior to 2019, he was a senior portfolio manager of OppenheimerFunds, Inc. (“OFI”)
since March 2017. Previously, he was a senior research analyst of OFI from May 2007 to March 2017. Prior to joining the firm,
Mr. Delano worked at Putnam Investments as an analyst covering large-cap growth focusing on hardware, software, and telecommunications.
is a co-portfolio manager of the Balanced
Fund. Mr. Doshi is a portfolio manager for ETFs and indexed strategies at ICM. He has been associated with ICM and/or its affiliates
since 2018 where he implemented active and passive-based strategies across Invesco’s commodity, alternatives, and equity ETF lineup.
Prior to 2018, he held roles at Saltspring Capital and Gofen and Glossberg. Prior to that, he was a vice president at Bank of America
Merrill Lynch. Mr. Doshi entered the financial services industry in 2005 as an analyst at UBS Investment Bank.
is a co-portfolio manager of the Main
Street Fund. Mr. Govil is a portfolio manager at Invesco Advisers. He has been associated
with Invesco Advisers and/or its affiliates since 2019. Prior to 2019, he was the Main Street Team Leader and a portfolio manager of OFI
Global Institutional, Inc. (“OFI Global”) since May 2009. Prior to joining OFI Global, Mr. Govil was a portfolio manager
with RS Investment Management Co. LLC from October 2006 until March 2009. He served as the head of equity investments at The
Guardian Life Insurance Company of America from August 2005 to October 2006 when Guardian Life Insurance acquired an interest
in RS Investment Management Co. LLC.
is a co-portfolio manager of the Balanced
Fund. Mr. Hubbard is a portfolio manager for ETFs and indexed strategies at ICM. He has been associated with ICM and/or its affiliates
since 2005. Prior to 2005, he was a research analyst at Ritchie Capital, a hedge fund operator.
is a co-portfolio manager of the Balanced
Fund. Mr. Hyman is Chief Investment Officer, Global Investment Grade & Emerging Markets for Invesco Fixed Income at Invesco
Advisers. He has been associated with Invesco Advisers and/or its affiliates since 2013. Prior to 2013, he was with ING Investment Management
and ING Institutional Markets for 12 years as the head of investment grade corporate credit. Prior to joining ING, Mr. Hyman was a director
of capital markets for GE Capital and held trading and risk-management positions at various global banks. He entered the industry in 1991.
is a co-portfolio manager of the Balanced
Fund. Mr. Jeanette is a portfolio manager for ETFs and indexed strategies at ICM. He has been associated with ICM and/or its affiliates
since 2008. Prior to 2008, he held a management position with a trust advisory firm in the private sector. Prior to this, he managed the
retail investment business for several US Bancorp (formerly First Bank System) locations in Minneapolis. He began his career as a financial
adviser with Shearson Lehman Brothers and Morgan Stanley Smith Barney (formerly Smith Barney).
is a co-portfolio manager of the Small
Cap Opportunities Fund. Ms. Ketner is a portfolio manager at Invesco Advisers. She has
been associated with Invesco Advisers and/or its affiliates since 2019. Prior to
2019, she was a Vice President of OppenheimerFunds, Inc. (“OFI”)
since May 2009 and a portfolio manager of OFI Global Institutional, Inc. since November 2012. She has served as sector manager for consumer
discretionary and consumer staples for OFI’s Main Street Investment Team since May 2009. Prior to joining OFI, Ms. Ketner was a
sector manager at RS Investments and Guardian Life Insurance Company. Ms. Ketner joined Guardian Life Insurance Company in February 2006
and transitioned to RS Investments in October 2006 in connection with Guardian Life Insurance Company’s acquisition of an interest
in RS Investments.
is a co-portfolio manager of the Small
Cap Opportunities Fund. Mr. Krantz is a portfolio manager at Invesco Advisers. He has been
associated with Invesco Advisers and/or its affiliates since 2019. Prior to 2019, he was a Vice President of OppenheimerFunds, Inc. (“OFI”)
since May 2009 and a portfolio manager of OFI Global Institutional, Inc. since November 2012. He has served as sector manager for technology
for OFI’s Main Street Investment Team since May 2009. Prior to joining OFI, Mr. Krantz was a sector manager at RS Investments and
Guardian Life Insurance Company. Mr. Krantz joined Guardian Life Insurance Company in December 2005 and transitioned to RS Investments
in October 2006 in connection with Guardian Life Insurance Company’s acquisition of an interest in RS Investments.
is a co-portfolio manager of the Main
Street Fund. Mr. Larson is a portfolio manager at Invesco Advisers. He has been associated
with Invesco Advisers and/or its affiliates since 2019. Prior to 2019, he was a portfolio manager of OFI Global Institutional, Inc. since
February 2014. Prior to joining OppenheimerFunds, Inc. in January 2013, he was a portfolio manager and Chief Equity Strategist at Morningstar.
He was also editor of Morningstar’s StockInvestor newsletter, which tracked Mr. Larson’s recommendations. Mr. Larson
was previously an analyst at Morningstar covering the energy sector and oversaw the firm’s natural resources analysts. Before joining
Morningstar in 2002, he was an analyst with The Motley Fool.
is the lead portfolio manager of the Strategic
Emerging Markets Fund. Mr. Leverenz is a portfolio manager at Invesco Advisers. He has
been associated with Invesco Advisers and/or its affiliates since 2019. Prior to 2019, he was Director of Emerging Markets Equities of
OppenheimerFunds, Inc. (“OFI”) since January 2013. He has been a portfolio manager of OFI Global Institutional, Inc. and OFI since
May 2007, a Senior Vice President of OFI since November 2009, and was a Vice President of OFI from July 2004 to October 2009. Mr. Leverenz
was the Head of Research for Goldman Sachs in Taiwan and Director of Pan-Asian Technology Research from 2002 to 2004. He was an Analyst
and Head of Equity Research for Barclays de Zoete Wedd from 1993 to 1995 and from 1997 to 2000, respectively. He was a Fund Manager at
Martin Currie Investment Management from 1995 to 1997.
is a co-portfolio manager of the Balanced
Fund. Mr. Nguyen is Chief Investment Officer and a portfolio manager of the Invesco Investment Solutions team at Invesco Advisers,
which provides customized multi-asset investment strategies for institutional and retail clients. He has been associated with Invesco
Advisers and/or its affiliates since 2000. Prior to 2000, Mr. Nguyen served as assistant vice president and quantitative equity analyst
for Van Kampen American Capital, as well as vice president and director of quantitative services of FactSet Research Systems, Inc.
is a co-portfolio manager of the Main
Street Fund. Mr. Ram is a portfolio manager at Invesco Advisers. He has been associated
with Invesco Advisers and/or its affiliates since 2019. Prior to 2019, he was a portfolio manager of OFI Global Institutional, Inc. (“OFI
Global”) since May 2009. Prior to joining OFI Global, Mr. Ram was sector manager for financial investments and a co-portfolio
manager for mid-cap portfolios with the RS Core Equity Team of RS Investment Management Co. LLC from October 2006 to May 2009.
He served as Portfolio Manager Mid Cap Strategies, Sector Manager Financials at The Guardian Life Insurance Company of America from January 2006
to October 2006 when Guardian Life Insurance acquired an interest in RS Investment Management Co. LLC.
is a co-portfolio manager of the Balanced
Fund. Mr. Schomberg is a portfolio manager at Invesco Advisers. He has been associated with Invesco Advisers and/or its affiliates
since 2016. Prior to 2016, Mr. Schomberg was a portfolio manager and vice president for Voya Investment Management. Before joining Voya
Investment Management, he was a senior fixed income analyst with Wells Capital Management.
is a co-portfolio manager of the Balanced
Fund. Mr. Seisser is an equity portfolio manager for ETFs and indexed strategies at ICM. He has been associated with ICM and/or
its affiliates since 2013. Prior to 2013, he was employed by Guggenheim Funds Distributors, Inc. as a global ETF trader. Before that,
he was a compliance investigator at the Chicago Board Options Exchange and CBOE Futures Exchange. Prior to that, Mr. Seisser had a career
as a single-stock and ETF market maker on the floor of the Chicago Stock Exchange. He entered the industry in 1990.
is a co-portfolio manager of the Small
Cap Opportunities Fund. Mr. Vardharaj is a portfolio manager at Invesco Advisers. He has
been associated with Invesco Advisers and/or its affiliates since 2019. Prior to 2019, he was a Vice President of OppenheimerFunds, Inc.
(“OFI”) and a portfolio manager of OFI Global Institutional, Inc. since May 2009. Prior to joining OFI, Mr. Vardharaj was
sector manager and a senior quantitative analyst creating stock selection models, monitoring portfolio risks, and analyzing portfolio
performance across the RS Core Equity Team of RS Investment Management Co. LLC from October 2006 to May 2009. He served as quantitative
analyst at The Guardian Life Insurance Company of America from 1998 to October 2006 when Guardian Life Insurance acquired an interest
in RS Investment Management Co. LLC.
is a co-portfolio manager of the Small
Cap Opportunities Fund. Mr. Weiner is a portfolio manager at Invesco Advisers. He has been
associated with Invesco Advisers and/or its affiliates since 2019. Prior to 2019, he was a Vice President of OppenheimerFunds, Inc. (“OFI”)
since May 2009 and a portfolio manager of OFI Global Institutional, Inc. since November 2012. He has served as sector manager for industrials
and materials for OFI’s Main Street Investment Team since May 2009. Prior to joining OFI, Mr. Weiner was a sector manager at RS
Investments for industrials and materials. Prior to joining RS Investments in January 2007, Mr. Weiner was a Director and senior equity
analyst at Credit Suisse Asset Management (CSAM).
is a co-portfolio manager of the Small
Cap Opportunities Fund. Mr. Ziehl is a portfolio manager at Invesco Advisers. He has been
associated with Invesco Advisers and/or its affiliates since 2019. Prior to 2019, he was a Vice President and senior portfolio manager
of OppenheimerFunds, Inc. (“OFI”) since May 2009. Prior to joining OFI, Mr. Ziehl was a portfolio manager with RS Investment
Management Co. LLC from October 2006 to May 2009 and served as a managing director at The Guardian Life Insurance Company of America from
December 2001 to October 2006 when Guardian Life Insurance acquired an interest in RS Investment Management Co. LLC.
Thompson, Siegel &
Walmsley LLC (“TSW”), a Delaware limited liability company located at 6641 West Broad Street, Suite 600, Richmond,
Virginia 23230, manages a portion of the portfolio of the International Equity Fund.
TSW is an indirect wholly-owned subsidiary of Pendal Group Limited and a direct subsidiary of Pendal (USA) Inc. Since 1970, TSW has provided
investment management services to corporations, pensions and profit-sharing plans, 401(k) and thrift plans, trusts, estates, and other
institutions and individuals. As of September 30, 2021, TSW managed approximately $23.8 billion in assets.
Brandon H. Harrell, CFA |
|
is a portfolio manager of a portion of the International
Equity Fund. Mr. Harrell has been a portfolio manager with TSW since he joined the firm in 1996.
Wellington Management Company LLP (“Wellington
Management”), a Delaware limited liability partnership with principal offices located at 280 Congress Street, Boston, Massachusetts
02210, manages the investments of the Disciplined Value Fund and Disciplined
Growth Fund, and a portion of the portfolio of the International Equity Fund.
Wellington Management is a professional investment counseling firm which provides investment services to investment companies, employee
benefit plans, endowments, foundations, and other institutions. Wellington Management and its predecessor organizations have provided
investment advisory services for over 90 years. Wellington Management is owned by the partners of Wellington Management Group LLP,
a Massachusetts limited liability partnership. As of September 30, 2021, Wellington Management and its investment advisory affiliates
had investment management authority with respect to approximately $1,384.5 billion in assets.
has served as a portfolio manager of a portion of the International
Equity Fund since 2020. Mr. Fisher is a Senior Managing Director and Equity Portfolio Manager of Wellington Management and joined
the firm as an investment professional in 2005.
has served as a portfolio manager of the Disciplined
Value Fund and Disciplined Growth Fund since 2021. Mr. Kyller is a Managing
Director and Research Manager of Wellington Management and joined the firm as an investment professional in 2015.
has served as a portfolio manager of the Disciplined
Value Fund and Disciplined Growth Fund since 2020. Mr. Simon is a Senior
Managing Director and Portfolio Manager of Wellington Management and joined the firm as an investment professional in 2009.
The Funds’ SAI provides additional information about each portfolio
manager’s compensation, other accounts managed by the portfolio managers, and each portfolio manager’s ownership of securities
in the relevant Fund.
MML Advisers has received exemptive relief from the Securities and Exchange
Commission (“SEC”) to permit it to change subadvisers or hire new subadvisers for a number of the series of the Trust from
time to time without obtaining shareholder approval. (In the absence of that exemptive relief, shareholder approval might otherwise be
required.) Several other mutual fund companies have received similar relief. MML Advisers believes having this authority is important,
because it allows MML Advisers to remove and replace a subadviser in a quick, efficient, and cost-effective fashion when, for example,
the subadviser’s performance is inadequate or the subadviser no longer is able to meet a Trust series’ investment objective
and strategies. Pursuant to the exemptive relief, MML Advisers will provide to a Fund’s shareholders, within 90 days of the
hiring of a new subadviser, an information statement describing the new subadviser. MML Advisers will not rely on this authority for any
Fund unless the Fund’s shareholders have approved this arrangement. As of the date of this Prospectus, this exemptive relief is
available to each Fund.
Other Information
On December 7, 2010, the Trust was named as a defendant
and putative member of the proposed defendant class of shareholders named in an adversary proceeding brought by The Official Committee
of Unsecured Creditors of Tribune Company (the “Official Committee”) in the U.S. Bankruptcy Court for the District of Delaware,
in connection with Tribune Company’s Chapter 11 bankruptcy proceeding (In re Tribune Company). The proceeding relates to a leveraged
buyout (“LBO”) transaction by which Tribune Company converted to a privately-held company in 2007, and the putative defendant
class is comprised of beneficial owners of shares of Tribune Company who received proceeds (the “Proceeds”) of the LBO. The
Official Committee seeks to recover payments of those Proceeds. On April 5, 2012, the adversary proceeding was transferred to the Southern
District of New York for consolidated pretrial proceedings. The action is now being prosecuted by the litigation trustee (“Trustee”)
for the Tribune Litigation Trust. This case has been dismissed by the district court and dismissal was affirmed by the Second Circuit
Court of Appeals. The Trustee has filed a petition for a writ of certiorari with the United States Supreme Court.
The potential amounts sought to be recovered from the Balanced Fund, Disciplined
Value Fund, and Small Cap Opportunities Fund are approximately $44,200, $299,880, and $414,800, respectively, plus interest and the Official
Committee’s court costs.
In addition, on June 2, 2011, the Disciplined Value Fund and Small Cap
Opportunities Fund were named as defendants in a closely related, parallel adversary proceeding brought in connection with the Tribune
Company’s LBO by Deutsche Bank Trust Company Americas, in its capacity as successor indenture trustee for a certain series of Senior
Notes, Law Debenture Trust Company of New York, in its capacity as successor indenture trustee for a certain series of Senior Notes, and
Wilmington Trust Company, in its capacity as successor indenture trustee for the PHONES Notes (together, the “Plaintiffs”),
in the United States District Court for the District of Massachusetts. The Plaintiffs also seek to recover payments of the Proceeds. On
December 20, 2011, this action was transferred to the Southern District of New York for consolidated pretrial proceedings. This case also
has been dismissed. The district court’s dismissal of the case was affirmed by the Second Circuit Court of Appeals, and the Plaintiffs’
petition for certiorari was denied by the United States Supreme Court.
The Funds cannot predict the outcome of these proceedings. If the proceedings
were to be decided in a manner adverse to the Funds, or if the Funds were to enter into a settlement agreement with the Trustee or the
Plaintiffs, as applicable, the payment of such judgment or settlement could potentially have a material adverse effect on the Funds’
NAVs depending on the net assets of each applicable Fund at the time of such judgment or settlement.
About the Classes of Shares
– I, R5, Service, Administrative, A, R4, and R3 Shares
Each Fund (other than the U.S. Government Money Market Fund) offers seven Classes of shares.
The U.S. Government Money Market Fund only offers Class R5 shares. The only differences among the various Classes are that (a) each
Class is subject to different expenses specific to that Class, including any expenses under a Rule 12b-1 Plan and administrative
and shareholder service expenses; (b) each Class has a different Class designation; (c) each Class has exclusive voting rights
with respect to matters solely affecting such Class; and (d) each Class has different exchange privileges. Not all of the Classes
of a Fund are available in every state.
Shares of all Classes, except Class I shares, are
subject to an administrative and shareholder services fee described above under “Management of the Funds – Investment Adviser.”
In addition, Class A, Class R4, and Class R3 shares are subject to servicing or distribution fees paid under a Rule 12b-1
Plan. Different fees and expenses of a Class will affect performance of that Class. For actual past expenses of each share Class, see
the “Financial Highlights” tables later in this Prospectus. Investors may receive different levels of service in connection
with investments in different Classes of shares, and intermediaries may receive different levels of compensation in connection with each
share Class. For additional information, call us toll free at 1-888-309-3539 or contact a sales representative or financial intermediary
who offers the Classes.
Class I, Class R5, Service Class, and Administrative Class shares
are offered primarily to institutional investors through institutional distribution channels, such as employer-sponsored retirement plans
or through broker-dealers, financial institutions, or insurance companies. Class A, Class R4, and Class R3 shares are offered
primarily through other distribution channels, such as broker-dealers or financial institutions. All Classes of shares are available for
purchase by insurance company separate investment accounts, qualified plans under Section 401(a) of the Code, Code Section 403(b)
plans, Code Section 457 plans, non-qualified deferred compensation plans, and other institutional investors.
Mutual funds and collective trust funds may purchase Class I, Class R5,
and Service Class shares. Class A, Class R3, Class R4, and Class R5
shares may be purchased by voluntary employees’ beneficiary associations described in
Code Section 501(c)(9). Class A shares of any Fund, and Class R5 shares of the U.S. Government Money Market Fund, may be
purchased by individual retirement accounts described in Code Section 408.
Class I and Class A shares (and Class R5 shares of the U.S. Government Money
Market Fund only) may also be purchased by individual investors through a financial intermediary or through a product sponsored by a financial
intermediary.
Shareholders of the Core Bond Fund who held shares of
that Fund prior to October 31, 2004 may buy Class R5 shares of that Fund. Shareholders of the Disciplined Growth Fund, or the
Disciplined Value Fund who held shares of those Funds prior to October 31, 2004 may purchase Service Class shares of such Funds.
Shareholders of the Small Cap Opportunities Fund who held shares of that Fund prior to October 31, 2004 may purchase Class A
shares of that Fund.
Additional Information.
A plan or institutional investor will be permitted to
purchase shares of a class based upon the expected size (over time), servicing needs, or distribution or servicing costs for the plan
or institutional investor as determined by MML Distributors LLC (the “Distributor”) or a financial intermediary, as applicable.
A financial intermediary may, by agreement with the Distributor or MML Advisers, make available to its plan or institutional clients shares
of one class or a limited number of classes of the Funds. An investor should consult its financial intermediary for information (including
expense information) regarding the share class(es) the intermediary will make available for purchase by the investor.
Present and former officers, directors, trustees, and
employees (and their eligible family members) of each Fund, MassMutual and its affiliates, and retirement plans established for the benefit
of such individuals, are also permitted to purchase Class A shares of each Fund.
Initial Sales Charges
Class A shares are sold at their offering price, which is normally NAV
plus an initial sales charge. However, in some cases, as described below, purchases are not subject to an initial sales charge, and the
offering price will be the NAV. In other cases, reduced sales charges may be available, as described below. Out of the amount you invest,
the Fund receives the NAV to invest for your account.
The sales charge varies depending on the amount of your purchase. A portion
of the sales charge may be retained by the Distributor or allocated to your dealer as a concession. The Distributor reserves the right
to reallow the entire sales charge as a concession to dealers. The current sales charge rates and concessions paid to dealers and brokers
are as follows:
Front-End Sales Charge (As a Percentage of Offering Price)/
Front-End Sales Charge (As a Percentage of Net Amount Invested)/ Concession (As a Percentage of Offering Price) for Different Purchase
Amounts:
Price Breakpoints
|
|
|
General Equity |
|
|
General Taxable Bond |
|
|
Shorter- Term Bond |
|
Less than $25,000
|
|
|
|
|
5.50 |
%/ |
|
|
|
4.25 |
%/ |
|
|
|
2.50 |
%/ |
|
|
|
|
|
5.82 |
%/ |
|
|
|
4.44 |
%/ |
|
|
|
2.56 |
%/ |
|
|
|
|
|
4.50 |
% |
|
|
|
3.50 |
% |
|
|
|
2.00 |
% |
$25,000 – $49,999
|
|
|
|
|
5.25 |
%/ |
|
|
|
4.25 |
%/ |
|
|
|
2.25 |
%/ |
|
|
|
|
|
5.54 |
%/ |
|
|
|
4.44 |
%/ |
|
|
|
2.30 |
%/ |
|
|
|
|
|
4.25 |
% |
|
|
|
3.50 |
% |
|
|
|
1.75 |
% |
$50,000 – $99,999 |
|
|
|
|
4.50 |
%/ |
|
|
|
4.00 |
%/ |
|
|
|
2.00 |
%/ |
|
|
|
|
|
4.71 |
%/ |
|
|
|
4.17 |
%/ |
|
|
|
2.04 |
%/ |
|
|
|
|
|
3.50 |
% |
|
|
|
3.25 |
% |
|
|
|
1.50 |
% |
$100,000 – $249,999
|
|
|
|
|
3.50 |
%/ |
|
|
|
3.00 |
%/ |
|
|
|
1.75 |
%/ |
|
|
|
|
|
3.63 |
%/ |
|
|
|
3.09 |
%/ |
|
|
|
1.78 |
%/ |
|
|
|
|
|
2.50 |
% |
|
|
|
2.25 |
% |
|
|
|
1.25 |
% |
$250,000 – $499,999
|
|
|
|
|
2.25 |
%/ |
|
|
|
1.75 |
%/ |
|
|
|
1.25 |
%/ |
|
|
|
|
|
2.30 |
%/ |
|
|
|
1.78 |
%/ |
|
|
|
1.27 |
%/ |
|
|
|
|
|
1.75 |
% |
|
|
|
1.50 |
% |
|
|
|
0.75 |
% |
$500,000 – $999,999
|
|
|
|
|
1.75 |
%/ |
|
|
|
1.00 |
%/ |
|
|
|
0.75 |
%/ |
|
|
|
|
|
1.78 |
%/ |
|
|
|
1.01 |
%/ |
|
|
|
0.76 |
%/ |
|
|
|
|
|
1.10 |
% |
|
|
|
0.75 |
% |
|
|
|
0.50 |
% |
$1,000,000 or more
|
|
|
|
|
None/ |
|
|
|
|
None/ |
|
|
|
|
None/ |
|
|
|
|
|
|
None/ |
|
|
|
|
None/ |
|
|
|
|
None/ |
|
|
|
|
|
|
0.75 |
% |
|
|
|
0.50 |
% |
|
|
|
0.50 |
% |
A reduced sales charge may be obtained for Class A shares under
the Funds’ “Rights of Accumulation” because of the economies of sales efforts and reduction in expenses realized by
the Distributor, dealers, and brokers making such sales.
To qualify for the lower sales charge rates that apply to larger purchases of Class A
shares, you can add together:
•
Current purchases of Class A
shares of more than one Fund subject to an initial sales charge to reduce the sales charge rate that applies to current purchases of Class A
shares; and
•
Class A shares of Funds you
previously purchased subject to an initial or contingent deferred sales charge to reduce the sales charge rate for current purchases of
Class A shares, provided that you still hold your investment in the previously purchased Funds.
The Distributor will add the value, at current offering
price, of the Class A shares you previously purchased and currently own to the value of current purchases to determine the sales
charge rate that applies. The reduced sales charge will apply only to current purchases. You must request the reduced sales charge when
you buy Class A shares and inform your broker-dealer or other financial intermediary of Class A shares of any other Funds that
you own. Information regarding reduced sales charges can be found on the MassMutual website at https://www.massmutual.com/funds.
Contingent Deferred Sales Charges
There is no initial sales charge on purchases of Class A
shares of any one or more of the Funds aggregating $1 million or more. The Distributor pays dealers of record concessions in an amount
equal to 0.75%, or 0.50% of purchases of $1 million or more, as shown in the above table. The concession will not be paid on purchases
of shares by exchange or that were previously subject to a front-end sales charge and dealer concession.
If you redeem any of those shares within a holding period of 18 months
from the date of their purchase, a contingent deferred sales charge of 1.0% will be deducted from the redemption proceeds (unless you
are eligible for a waiver of that sales charge based on the categories listed below and you advise the transfer agent or another intermediary
of your eligibility for the waiver when you place your redemption request).
All contingent deferred sales charges will be based on the lesser of the NAV of the redeemed
shares at the time of redemption or the original NAV. A contingent deferred sales charge is not imposed on:
•
the amount of your account value
represented by an increase in NAV over the initial purchase price,
•
shares purchased by the reinvestment
of dividends or capital gains distributions, or
•
shares redeemed in the special
circumstances described below.
To determine whether a contingent deferred sales charge applies to a redemption,
the Fund redeems shares in the following order:
1.
shares acquired by reinvestment
of dividends and capital gains distributions, and
2.
shares held the longest.
Contingent deferred sales charges are not charged when you exchange shares
of the Fund for shares of any other Fund. However, if you exchange them within the applicable contingent deferred sales charge holding
period, the holding period will carry over to the Fund whose shares you acquire. Similarly, if you acquire shares of a Fund by exchanging
shares of another Fund that are still subject to a contingent deferred sales charge holding period, that holding period will carry over
to the acquired Fund.
Sales Charge Waivers by Class
Waivers of Class A Initial Sales Charges
The Class A sales charges will be waived for shares purchased in the
following types of transactions:
•
Purchases into insurance company
separate investment accounts.
•
Purchases into retirement plans
or other employee benefit plans.
•
Purchases of Class A shares
aggregating $1 million or more of any one or more of the Funds.
•
Purchases into accounts for which
the broker-dealer of record has entered into a special agreement with the Distributor allowing this waiver.
•
Purchases into accounts for which
no sales concession is paid to any broker-dealer or other financial intermediary at the time of sale.
•
Shares sold to MassMutual or
its affiliates.
•
Shares sold to registered management
investment companies or separate accounts of insurance companies having an agreement with MassMutual, MML Advisers, or the Distributor
for that purpose.
•
Shares issued in plans of reorganization
to which the Fund is a party.
•
Shares sold to present or former
officers, directors, trustees, or employees (and their
“immediate families(1)”)
of the Fund, MassMutual, and its affiliates.
•
Shares sold to a portfolio manager
of the Fund.
•
Class A shares of the Small
Cap Opportunities Fund sold to shareholders of the Small Cap Opportunities Fund who held shares of that Fund prior to October 31,
2004.
Waivers of Class A Contingent Deferred
Sales Charges
The Class A contingent deferred sales charges will not be applied to
shares purchased in certain types of transactions or redeemed in certain circumstances described below.
A. Waivers for Redemptions in Certain Cases.
The Class A contingent deferred sales charges will be waived for redemptions
of shares in the following cases:
•
Redemptions from insurance company
separate investment accounts.
•
Redemptions from retirement plans
or other employee benefit plans.
•
Redemptions from accounts other
than retirement plans following the death or disability of the last surviving shareholder, including a trustee of a grantor trust or
(1)
The
term “immediate family” refers to one’s spouse, children, grandchildren, grandparents, parents, parents-in-law, brothers
and sisters, sons- and daughters-in-law, a sibling’s spouse, a spouse’s siblings, aunts, uncles, nieces, and nephews; relatives
by virtue of a remarriage (step-children, step-parents, etc.) are included.
revocable living trust for which the trustee is also the sole beneficiary.
The death or disability must have occurred after the account was established, and for disability you must provide evidence of a determination
of disability by the Social Security Administration.
•
Redemptions from accounts for
which the broker-dealer of record has entered into a special agreement with the Distributor allowing this waiver.
•
Redemptions from accounts for
which no sales concession was paid to any broker-dealer or other financial intermediary at the time of sale.
•
Redemptions of Class A shares
under an automatic withdrawal plan from an account other than a retirement plan if the aggregate value of the redeemed shares does not
exceed 10% of the account’s value annually.
•
In the case of an IRA, to make
distributions required under a divorce or separation agreement described in Section 71(b) of the Code.
•
Redemptions of Class A shares
of the Small Cap Opportunities Fund by shareholders of
the Small Cap Opportunities Fund who held shares of that Fund prior to
October 31, 2004.
B. Waivers for Shares Sold or Issued in Certain Transactions.
The contingent deferred sales charge is also waived on Class A shares
sold or issued in the following cases:
•
Shares sold to MassMutual or its
affiliates.
•
Shares sold to registered management
investment companies or separate accounts of insurance companies having an agreement with MassMutual, MML Advisers, or the Distributor
for that purpose.
•
Shares issued in plans of reorganization
to which the Fund is a party.
•
Shares sold to present or former
officers, directors, trustees, or employees (and their “immediate families(1)”)
of the Fund, MassMutual, and its affiliates.
•
Shares sold to a present or
former portfolio manager of the Fund.
Distribution Plan, Shareholder Servicing,
and Payments to Intermediaries
Shares of all classes of the Funds, other than Class A shares, are sold without a front-end
sales charge, and none of the Funds’ shares are subject to a deferred sales charge. Class A shares are sold at NAV per share plus
an initial sales charge.
Rule 12b-1 fees. The
Funds have adopted a Rule 12b-1 Plan (the “Plan”). Under the Plan, a Fund may make payments at an annual rate of up to 0.25%
of the average daily net assets attributable to its Class A shares and Class R4 shares, and up to 0.50% of the average daily net assets
attributable to its Class R3 shares. The Plan is a compensation plan, under which the Funds make payments to the Distributor for the services
it provides and for the expenses it bears in connection with the distribution of Class A, Class R4, and Class R3 shares, and for the servicing
of Class A, Class R4, and Class R3 shareholders. Because Rule 12b-1 fees are paid out of the Funds’ Class A, Class R4, and Class
R3 assets on an ongoing basis, they will increase the cost of your investment and may cost you more than paying other types of sales loads.
All Class A, Class R4, and Class R3 shareholders share in the expense of Rule 12b-1 fees paid by those classes. A Fund may pay
distribution fees and other amounts described in this Prospectus at a time when shares of
that Fund are unavailable for purchase.
Shareholder servicing payments. MML
Advisers pays all or a portion of the administrative and shareholder services fee it receives from each Fund, as described above under
“Management of the Funds – Investment Adviser,” to intermediaries as compensation for, or reimbursement of expenses
relating to, services provided to shareholders of the Funds.
Payments to intermediaries. The
Distributor and MML Advisers may make payments to financial intermediaries for distribution and/or shareholder services provided by them.
Financial intermediaries are firms that, for compensation, sell shares of mutual funds, including the Funds, and/or provide certain administrative
and account maintenance services to mutual fund shareholders. Financial intermediaries may include, among others, brokers, financial planners
or advisers, banks, and insurance companies. In some cases, a financial intermediary may hold its clients’ Fund shares in nominee
or street name. Shareholder services provided by a
financial intermediary may (though they will not necessarily) include, among other things:
processing and mailing trade confirmations, periodic statements, prospectuses, annual reports, semiannual reports, shareholder notices,
and other SEC-required communications; capturing and processing tax data; issuing and mailing dividend checks to shareholders who have
selected cash distributions; preparing record date shareholder lists for proxy solicitations; collecting and posting distributions to
shareholder accounts; and establishing and maintaining systematic withdrawals and automated investment plans and shareholder account registrations.
The Distributor and MML Advisers may retain a portion of the Rule 12b-1
payments and/or shareholder servicing payments received by them, or they may pay the full amount to intermediaries. Rule 12b-1 fees
may be paid to financial intermediaries in advance for the first year after Class A, Class R4, and Class R3 shares are
sold. After the first year, those fees will be paid on a quarterly basis.
The compensation paid to a financial intermediary is typically paid continually
over time, during the period when the intermediary’s clients hold investments in the Funds. The amount of continuing compensation
paid to different financial intermediaries for distribution and/or shareholder services varies. The compensation is typically a percentage
of the value of the financial intermediary’s clients’ investments in the Funds or a per account fee. The variation in compensation
may, but will not necessarily, reflect enhanced or additional services provided by the intermediary.
Additional information. The
Distributor may directly, or through an affiliate, pay a sales concession of up to 1.00% of the purchase price of Service Class, Administrative
Class, Class A, Class R4, and Class R3 shares to broker-dealers or other financial intermediaries at the time of sale. However, the total
amount paid to broker-dealers or other financial intermediaries at the time of sale, including any advance of Rule 12b-1 service fees
or shareholder services fees, may not be more than 1.00% of the purchase price.
In addition to the various payments described above,
MML Advisers in its discretion may directly, or through an affiliate, pay up to 0.35% of the amount invested to intermediaries who provide
services on behalf of shareholders of the Funds. This compensation is paid by MML Advisers from
its own assets. The payments will be based on criteria established by
MML Advisers and will be paid quarterly, in arrears.
MassMutual, the parent company of MML Advisers, pays to an affiliate of Empower
Retirement, LLC (“Empower”) an amount equal to the profit realized by MML Advisers with respect to shares beneficially owned
by retirement plans through recordkeeping platforms maintained by Empower or an affiliate.
The Distributor, MML Advisers, or MassMutual may also directly, or through
an affiliate, make payments, out of its own assets, to intermediaries, including broker-dealers, insurance agents, and other service providers,
that relate to the sale of shares of the Funds or certain of MassMutual’s variable annuity contracts for which the Funds are underlying
investment options. This compensation may take the form of:
•
Payments to administrative service
providers that provide enrollment, recordkeeping, and other services to pension plans;
•
Cash and non-cash benefits, such
as bonuses and allowances or prizes and awards, for certain broker-dealers, administrative service providers, and MassMutual insurance
agents;
•
Payments to intermediaries for,
among other things, training of sales personnel, conference support, marketing, or other services provided to promote awareness of MassMutual’s
products;
•
Payments to broker-dealers and
other intermediaries that enter into agreements providing the Distributor with access to representatives of those firms or with other
marketing or administrative services; and
•
Payments under agreements with
MassMutual not directly related to the sale of specific variable annuity contracts or the Funds, such as educational seminars and training
or pricing services.
In some instances, compensation may be made available only to certain financial
intermediaries whose representatives have sold or are expected to sell significant amounts of shares. Dealers may not use sales of the
Funds’ shares to qualify for this compensation to the extent prohibited by the laws or rules of any state or any self-regulatory
agency, such as the Financial Industry Regulatory Authority.
These compensation arrangements are not offered to all intermediaries and the terms of the
arrangements may differ among intermediaries. These arrangements may provide an intermediary with an incentive to recommend one mutual
fund over another, one share class over another, or one insurance or annuity contract over another. You
may want to take these compensation arrangements into account when evaluating any recommendations
regarding the Funds or any contract using the Funds as investment options. You may contact your intermediary to find out more information
about the compensation they may receive in connection with your investment.
Buying, Redeeming, and Exchanging Shares
The Funds sell their shares at a price equal to their NAV plus any initial sales charge that
applies (see “Determining Net Asset Value” below). The Funds have authorized one or more broker-dealers or other intermediaries
to receive purchase orders on their behalf. Such broker-dealers or other intermediaries may themselves designate other intermediaries
to receive purchase orders on the Funds’ behalf. Your purchase order will be priced at the next NAV calculated after your order
is received in good order by the transfer agent, MML Advisers, such a broker-dealer, or another intermediary authorized for this purpose.
If you purchase shares through a broker-dealer or other intermediary, then, in order for your purchase to be based on a Fund’s next
determined NAV, the broker-dealer or other intermediary must receive your request before the close of regular trading on the New York
Stock Exchange (“NYSE”) (normally, 4:00 p.m. Eastern time), and the broker-dealer or other intermediary must subsequently
communicate the request properly to the Funds. Shares purchased through a broker-dealer or other intermediary may be subject to transaction
and/or other fees. The Funds will suspend selling their shares during any period when the determination of NAV is suspended. The Funds
can reject any purchase order and can suspend purchases if they believe it is in their best interest.
The Funds have authorized one or more broker-dealers or other intermediaries
to receive redemption requests on their behalf. Such broker-dealers or other intermediaries may themselves designate other intermediaries
to receive redemption requests on the Funds’ behalf. The Funds redeem their shares at their next NAV computed after your redemption
request is received by the transfer agent, MML Advisers, such a broker-dealer, or another intermediary. If you redeem shares through a
broker-dealer or other intermediary, then, in order for your redemption price to be based on a Fund’s next determined NAV, the broker-dealer
or other intermediary must receive your request before the close of regular trading on the NYSE, and the broker-dealer or other intermediary
must subsequently communicate the request properly to the Funds. Shares redeemed through a broker-dealer or other intermediary may be
subject to transaction and/or other fees. You will usually receive payment for your shares within seven days after your redemption
request is received in good order. If,
however, you request redemption of shares recently purchased by check, you may not receive
payment until the check has been collected, which may take up to 15 days from time of purchase. Under unusual circumstances, the
Funds can also suspend or postpone payment, when permitted by applicable law and regulations. The Funds’ transfer agent may temporarily
delay for more than seven days the disbursement of redemption proceeds from the Fund account of a “Specified Adult” (as
defined in Financial Industry Regulatory Authority Rule 2165) based on a reasonable belief that financial exploitation of the Specified
Adult has occurred, is occurring, has been attempted, or will be attempted, subject to certain conditions. Under normal circumstances,
each Fund expects to meet redemption requests by using cash or cash equivalents in its portfolio and/or selling portfolio assets to generate
cash. Under stressed market conditions, a Fund may pay redemption proceeds using cash obtained through borrowing arrangements that may
be available from time to time. To the extent consistent with applicable laws and regulations, the Funds reserve the right to satisfy
all or a portion of a redemption request by distributing securities or other property in lieu of cash (“in-kind” redemptions),
under both normal and stressed market conditions. Some Funds may be limited in their ability to use assets other than cash to meet redemption
requests due to restrictions on ownership of their portfolio assets. The securities distributed in an in-kind redemption will be valued
in the same manner as they are valued for purposes of computing the Fund’s NAV. These securities are subject to market risk until
they are sold and may increase or decrease in value prior to converting them into cash. You may incur brokerage and other transaction
costs, and could incur a taxable gain or loss for income tax purposes when converting the securities to cash.
Risk of Substantial Redemptions. If
substantial numbers of shares in a Fund were to be redeemed at the same time or at approximately the same time, the Fund might be required
to liquidate a significant portion of its investment portfolio quickly to meet the redemptions. A Fund might be forced to sell portfolio
securities at prices or at times when it would otherwise not have sold them, resulting in a reduction in the Fund’s NAV; in addition,
a substantial reduction in the size of a
Fund may make it difficult for the investment adviser or subadviser to execute its investment
program successfully for the Fund for a period following the redemptions. Similarly, the prices of the portfolio securities of a Fund
might be adversely affected if one or more other investment accounts managed by the investment adviser or subadviser in an investment
style similar to that of the Fund were to experience substantial redemptions and those accounts were required to sell portfolio securities
quickly or at an inopportune time.
Exchanges
Generally, you can exchange shares of one Fund for the
same class of shares of another MassMutual Fund, except in the case of the U.S. Government Money Market Fund, MassMutual Total Return
Bond Fund, and MM S&P 500® Index Fund and, with respect
to certain series of the Trust, in those cases when exchanges are not permitted, as described in the applicable Prospectus under “Placing
Transaction Orders—For Shareholders holding shares of the Trust prior to November 1, 2004.” Any share class of another
series may be exchanged for Class R5 shares of the U.S. Government Money Market Fund. If Class R5 shares of the U.S. Government Money
Market Fund are exchanged for Class A shares of another series, any sales charge applicable to those Class A shares will typically apply.
For individual retirement accounts described in Code Section 408, Class R5 shares of the U.S. Government Money Market Fund may only be
exchanged for Class A shares of another series (in which case any sales charge applicable to those Class A shares will typically apply),
Class R4 shares of the MassMutual Total Return Bond Fund and MM S&P 500 Index Fund may only be exchanged for Class A shares of another
series (in which case any sales charge applicable to those Class A shares will typically apply), and Class A shares of any other series
may only be exchanged for Class R4 shares of the MassMutual Total Return Bond Fund and MM S&P 500 Index Fund. An exchange is treated
as a sale of shares in one series and a purchase of shares in another series at the NAV next determined after the exchange request is
received and accepted by the transfer agent, MML Advisers, a broker-dealer, or another intermediary authorized for this purpose. You can
only exchange into shares of another series if you meet any qualification requirements of the series into which you seek to exchange (for
example, shares of some
series are not available to purchasers through certain investment channels,
and some may be available only to certain types of shareholders). In addition, in limited circumstances, such as those described above,
for certain series the share class available for exchange may not be the same share class as the series from which you are exchanging.
Exchange requests involving a purchase into any series (except the U.S. Government Money Market Fund, Inflation-Protected and Income Fund,
Core Bond Fund, Diversified Bond Fund, MassMutual Short-Duration Bond Fund, MassMutual High Yield Fund, MassMutual Strategic Bond Fund,
MassMutual Global Floating Rate Fund, MassMutual Global Credit Income Opportunities Fund, and MassMutual Emerging Markets Debt Blended
Total Return Fund), however, will not be accepted if you have already made a purchase followed by a redemption involving the same series
within the last 60 days. This restriction does not apply to rebalancing trades executed by any of the MassMutual RetireSMARTSM
by JPMorgan Funds, MassMutual Select T. Rowe Price Retirement Funds, and MassMutual Target Allocation Funds. This restriction also does
not apply to exchanges made pursuant to certain asset allocation programs, systematic exchange programs, and dividend exchange programs.
If you place an order to exchange shares of one series for another through a broker-dealer or other intermediary then, in order for your
exchange to be effected based on the series’ next determined NAVs, the broker-dealer or other intermediary must receive your request
before the close of regular trading on the NYSE, and the broker-dealer or other intermediary must subsequently communicate the request
properly to the MassMutual Funds.
Your right to exchange shares is subject to applicable regulatory requirements
or contractual obligations. The Funds may limit, restrict, or refuse exchange purchases, if, in the opinion of MML Advisers:
•
you have engaged in excessive
trading;
•
a Fund receives or expects simultaneous
orders affecting significant portions of the Fund’s assets;
•
a pattern of exchanges occurs
which coincides with a market timing strategy; or
•
the Fund would be unable to invest
the funds effectively based on its investment objectives and policies or if the Fund would be adversely affected.
The Funds reserve the right to modify or terminate the exchange privilege as described above
on 60 days written notice.
The Funds do not accept purchase, redemption, or exchange orders or compute
their NAVs on days when the NYSE is closed. This includes: weekends, Good Friday, and all federal holidays other than Columbus Day and
Veterans Day. Certain foreign markets may be open on days when the Funds do not accept orders or price their shares. As a result, the
NAV of a Fund’s shares may change on days when you will not be able to buy or sell shares.
How to Invest
When you buy shares of a Fund through an agreement with MML Advisers, your
agreement will describe how you need to submit buy, sell, and exchange orders. Purchase orders must be accompanied by sufficient funds.
You can pay by check or Federal Funds wire transfer. You must submit any buy, sell, or exchange orders in “good order” as
described in your agreement.
Placing Transaction Orders–For Shareholders
holding shares of the Trust prior to November 1, 2004
Shareholders of the Trust who held their shares prior to November 1,
2004 (when the Trust’s name changed from The DLB Fund Group) and who previously placed transaction orders directly with the
Trust through a DLB Fund Coordinator, will place trades by telephone or in writing directly with State Street Bank and Trust Company
(“State Street”), the Trust’s Transfer Agent. With respect to shares received on November 1, 2004 by former DLB
Fund Group investors, transaction orders are limited to purchases and redemptions. These shares may not be exchanged for shares of
another Fund of the Trust.
Transaction Orders by Telephone
Transaction orders placed by telephone will only be accepted if an Application
for Telephone Trading Privileges has been completed and returned to State Street. You may obtain an Application
for Telephone Trading Privileges by contacting Shareholder Servicing at 877-766-0014. Persons electing to place transaction orders
by telephone are able to do so through the following dedicated telephone number: MassMutual Premier Funds Transaction Line, 800-860-2232.
Transaction Orders in Writing
If you do not want to utilize telephone privileges, you may place your shareholder
trades by sending written instructions to State Street. Transaction orders placed in writing should be addressed to State
Street Bank and Trust Company, Attn: Transfer Agency Operations, PO Box 5493, Boston, MA 02206 and should include the following
information:
•
A letter of instruction signed
by an authorized signer of the account detailing the fund name, account number, and trade details; including the trade type (purchase
or redemption), and the dollar or share amount. The trade will be processed upon receiving the request in good order.
•
The signature on the letter of
instructions must be guaranteed by an acceptable financial institution (such as a bank, broker, or savings and loan association) as defined
under Rule 17Ad-15 of the Securities Exchange Act of 1934. If your financial institution belongs to one of the medallion guarantee
programs, it must use the actual “Medallion Guaranteed” stamp.
•
If applicable, a corporate resolution
which states that the extract of the by-laws is true and complete and is in full force and effect.
•
The resolution must be signed
by the secretary. It must have a corporate seal or state that no seal exists. If there is no seal, the corporate resolution must be signed
by an authorized signer with a medallion guaranteed stamp and must be dated within sixty (60) days of presentment to State Street.
In the case of individuals holding shares in a Fund (other than the U.S. Government Money
Market Fund) directly, upon the redemption or exchange of shares in a Fund, the Fund or, if a shareholder purchased shares through a financial
intermediary, the financial intermediary generally will be required to provide the shareholder and the Internal Revenue Service (“IRS”)
with cost basis and certain other related tax information about the
Fund shares redeemed or exchanged. Please contact the Funds by calling 1-888-309-3539 or consult
your financial intermediary, as appropriate, for more information regarding available methods for cost basis reporting and how to select
or change a particular method.
Please consult your tax adviser to determine which available cost basis method
is best for you.
Frequent Trading Policies
Purchases and exchanges of shares of the Funds should be made for investment purposes only.
The Funds discourage, and do not accommodate, excessive trading and/or market timing activity. Excessive trading and/or market timing
activity involving the Funds can disrupt the management of the Funds. These disruptions, in turn, can result in increased expenses and
can have an adverse effect on Fund performance.
The Trustees, on behalf of the Funds, have approved the policies and procedures
adopted by MML Advisers to help identify those individuals or entities MML Advisers determines may be engaging in excessive trading and/or
market timing activities. MML Advisers monitors trading activity to uniformly enforce its procedures. However, those who engage in such
activities may employ a variety of techniques to avoid detection. Therefore, despite MML Advisers’ efforts to prevent excessive
trading and/or market timing trading activities, there can be no assurance that MML Advisers will be able to identify all those who trade
excessively or employ a market timing strategy and curtail their trading in every instance.
The monitoring process involves scrutinizing transactions in fund shares that
exceed certain monetary thresholds or numerical limits within a specified period of time. Trading activity identified by either, or a
combination, of these factors, or as a result of any other information actually available at the time, will be evaluated to determine
whether such activity might constitute excessive trading and/or market timing activity. When trading activity is determined by a Fund
or MML Advisers, in their sole discretion, to be excessive in nature, certain account-related privileges, such as the ability to place
purchase, redemption, and
exchange orders over the internet, may be suspended for such account.
Omnibus Account Limitations. Omnibus
accounts, in which shares are held in the name of an intermediary on behalf of multiple investors, are a common form of holding shares
among retirement plans and other financial intermediaries such as broker-dealers, advisers, and third-party administrators. Not all omnibus
accounts apply the policies and procedures adopted by the Funds and MML Advisers. Some omnibus accounts may have different or less restrictive
policies and procedures regarding frequent trading, or no trading restrictions at all. If you hold your Fund shares through an omnibus
account, that financial intermediary may impose its own restrictions or limitations to discourage excessive trading and/or market timing
activity. You should consult your financial intermediary to find out what trading restrictions, including limitations on exchanges, may
apply. The Funds’ ability to identify and deter excessive trading and/or market timing activities through omnibus accounts is limited,
and the Funds’ success in accomplishing the objectives of the policies concerning frequent trading of Fund shares in this context
depends significantly upon the cooperation of the financial intermediaries. Because the Funds receive these orders on an aggregated basis
and because the omnibus accounts may trade with numerous fund families with differing frequent trading policies, the Funds are limited
in their ability to identify or deter those individuals or entities that may be engaging in excessive trading and/or market timing activities.
While the Funds and MML Advisers encourage those financial intermediaries to apply the Funds’ policies to their customers who invest
indirectly in the Funds, the Funds and MML Advisers may need to rely on those intermediaries to monitor trading in good faith in accordance
with its or the
Funds’ policies, since individual trades in omnibus accounts are often not disclosed
to the Funds. While the Funds will generally monitor trading activity at the omnibus account level to attempt to identify excessive trading
and/or market timing activity, reliance on intermediaries increases the risk that excessive trading and/or market timing activity may
go undetected. If evidence of possible
excessive trading and/or market timing activity is observed by the Funds, the financial intermediary
that is the registered owner will be asked to review the account activity, and to confirm to the Funds that appropriate action has been
taken to limit any excessive trading and/or market timing activity.
Determining Net Asset Value
The NAV of each Fund’s shares is determined once daily as of the
close of regular trading on the NYSE, on each Business Day. A “Business Day” is every day the NYSE is open. The NYSE normally
closes at 4:00 p.m. Eastern Time, but may close earlier on some days. If the NYSE is scheduled to close early, the Business Day will
be considered to end as of the time of the NYSE’s scheduled close. A Fund will not treat an intraday disruption in NYSE trading
or other event that causes an unscheduled closing of the NYSE as a close of business of the NYSE for these purposes and will instead fair
value securities in accordance with procedures approved annually by the Trustees, and under the general oversight of the Trustees. The
NYSE currently is not open for trading on New Year’s Day, Martin Luther King, Jr. Day, President’s Day, Good Friday, Memorial
Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Each Fund calculates the
NAV of each of its classes of shares by dividing the total value of the assets attributable to that class, less the liabilities attributable
to that class, by the number of shares of that class that are outstanding. On holidays and other days when the NYSE is closed, each Fund’s
NAV generally is not calculated and the Funds do not anticipate accepting buy or sell orders. However, the value of each Fund’s
assets may still be affected on such days to the extent that a Fund holds foreign securities that trade on days that foreign securities
markets are open. It is the intention of the U.S. Government Money Market Fund to maintain a stable NAV per share of $1.00, although
this cannot be assured.
Equity securities and derivative contracts that are actively traded on a national
securities exchange or contract market are valued on the basis of information furnished by a pricing service, which provides the last
reported sale price, or, in the case of futures contracts, the settlement price, for securities or derivatives listed on the exchange
or contract market or the official closing price on the NASDAQ National Market System (“NASDAQ System”), or in the case of
OTC securities for which an official closing price is unavailable or not reported on the NASDAQ System, the last reported bid price. Portfolio
securities traded on more than one national securities exchange are valued at the last price at the close of the exchange representing
the principal market for such securities. Debt securities (with
the exception of debt securities held by the U.S. Government Money Market Fund) are valued
on the basis of valuations furnished by a pricing service, which generally determines valuations taking into account factors such as institutional-size
trading in similar securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. The
U.S. Government Money Market Fund’s debt securities are typically valued at amortized cost, but may be valued using a vendor quote
if the Fund’s investment adviser determines it more closely approximates current market value, in accordance with Rule 2a-7
under the 1940 Act pursuant to which the U.S. Government Money Market Fund must adhere to certain conditions. Shares of other open-end
mutual funds are valued at their closing NAVs as reported on each Business Day.
Investments for which market quotations are readily available
are marked to market daily based on those quotations. Market quotations may be provided by third-party vendors or market makers, and may
be determined on the basis of a variety of factors, such as broker quotations, financial modeling, and other market data, such as market
indexes and yield curves, counterparty information, and foreign exchange rates. U.S. Government and agency securities may be valued on
the basis of market quotations or using a model that may incorporate market observable data such as reported sales of similar securities,
broker quotes, yields, bids, offers, quoted market prices, and reference data. The fair values of OTC derivative contracts, including
forward, swap, and option contracts related to interest rates, foreign currencies, credit standing of reference entities, equity prices,
or commodity prices, may be based on market quotations or may be modeled using a series of techniques, including simulation models, depending
on the contract and the terms of the transaction. The fair values of asset-backed securities and mortgage-backed securities are estimated
based on models that consider the estimated cash flows of each debt tranche of the issuer, established benchmark yield, and estimated
tranche-specific spread to the benchmark yield based on the unique attributes of the tranche including, but not limited to, prepayment
speed assumptions and attributes of the collateral.
Investments for which market quotations are not available or for which a pricing service or
vendor does not provide a value, or for which such market quotations or values are considered by the investment adviser or subadviser
to be unreliable (including, for example, certain foreign securities, thinly-traded securities, certain restricted securities, certain
initial public offerings, or securities whose values may have been affected by a significant event) are stated at fair valuations determined
in good faith by the Funds’ Valuation Committee in accordance with procedures approved annually by the Trustees, and under the general
oversight of the Trustees. It is possible that fair value prices will be used by the Funds to a significant extent. The value determined
for an investment using the Funds’ fair value procedures may differ from recent market prices for the investment and may be significantly
different from the value realized upon the sale of such investment.
The Funds may invest in securities that are traded principally in foreign
markets and that trade on weekends and other days when the Funds do not price their shares. As a result, the values of the Funds’
portfolio securities may change on days
when the prices of the Funds’ shares are not calculated. The prices of the Funds’
shares will reflect any such changes when the prices of the Funds’ shares are next calculated, which is the next Business Day. The
Funds may use fair value pricing more frequently for securities primarily traded in foreign markets because, among other things, most
foreign markets close well before the Funds value their securities. The earlier close of these foreign markets gives rise to the possibility
that significant events, including broad market moves, may have occurred in the interim. The Funds’ investments may be priced based
on fair values provided by a third-party vendor, based on certain factors and methodologies applied by such vendor, in the event that
there is movement in the U.S. market, between the close of the foreign market and the time the Funds calculate their NAVs. All assets
and liabilities expressed in foreign currencies are converted into U.S. dollars at the mean between the buying and selling rates of such
currencies against the U.S. dollar at the end of each Business Day.
The Funds’ valuation methods are also described in the SAI.
Taxation and Distributions
Each Fund intends to qualify each year for treatment as a regulated investment company under
Subchapter M of the Code. As a regulated investment company, a Fund will not be subject to Federal income taxes on its ordinary income
and net realized capital gains that are distributed in a timely manner to its shareholders. A Fund’s failure to qualify as a regulated
investment company would result in corporate level taxation, and consequently, a reduction in income available for distribution to shareholders.
In addition, a Fund that fails to distribute at least 98% of its ordinary income for a calendar year plus 98.2% of its capital gain net
income recognized during the one-year period ending October 31 plus any retained amount from the prior year generally will be subject
to a non-deductible 4% excise tax on the undistributed amount.
Certain investors, including most tax-advantaged plan investors, may be eligible
for preferential Federal income tax treatment on distributions received from a Fund and dispositions of Fund shares. This Prospectus does
not attempt to describe such preferential tax treatment. Any prospective investor that is a trust or other entity eligible for special
tax treatment under the Code
that is considering purchasing shares of a Fund, including either directly or in connection
with a life insurance company separate investment account, should consult its tax advisers about the Federal, state, local, and foreign
tax consequences particular to it, as should persons considering whether to have amounts held for their benefit by such trusts or other
entities in shares of a Fund.
Investors are generally subject to Federal income taxes on distributions received
in respect of their shares. Distributions are taxed to investors in the manner described herein whether distributed in cash or additional
shares. Taxes on distributions of capital gains are determined by how long the Fund owned (or is deemed to have owned) the investments
that generated them, rather than by how long the shareholder held the shares. Distributions of a Fund’s ordinary income and short-term
capital gains (i.e., gains from capital assets held for one year or less) are taxable to a shareholder as ordinary income. Certain dividends
may be eligible for the dividends-received deduction for corporate shareholders to the extent they are reported as such. Dividends properly
reported as capital gain dividends (relating to gains from the sale of capital assets held by a Fund for more than
one year) are taxable in the hands of an investor as long-term capital gain includible in
net capital gain and taxed to individuals at reduced rates. Distributions of investment income reported by a Fund as derived from “qualified
dividend income” will be taxed in the hands of individuals at the rates applicable to long-term capital gain, provided that holding
period and other requirements are met at both the shareholder and Fund level. Distributions from REITs generally do not qualify as qualified
dividend income. Funds investing primarily in fixed income instruments generally do not expect a significant portion of their distributions
to be derived from qualified dividend income.
The Code generally imposes a 3.8% Medicare contribution tax on the net investment
income of certain individuals, trusts, and estates to the extent their income exceeds certain threshold amounts. For this purpose “net
investment income” generally includes: (i) dividends paid by a Fund, including any capital gain dividends, and (ii) net capital
gains recognized on the sale, redemption, exchange, or other taxable disposition of shares of a Fund. Shareholders are advised to consult
their tax advisers regarding the possible implications of this additional tax on their investment in a Fund.
The nature of each Fund’s distributions will be affected by its investment
strategies. A Fund whose investment return consists largely of interest, dividends, and capital gains from short-term holdings will distribute
largely ordinary income. A Fund whose return comes largely from the sale of long-term holdings will distribute largely capital gain dividends.
Distributions are taxable to a shareholder even though they are paid from income or gains earned by a Fund prior to the shareholder’s
investment and thus were included in the price paid by the shareholder for his or her shares.
Each Fund intends to pay out as dividends substantially all of its net investment
income (which comes from dividends and any interest it receives from its investments). Each Fund also intends to distribute substantially
all of its net realized long- and short-term capital gains, if any, after giving effect to any available capital loss carryforwards. For
each Fund, distributions, if any, are declared and paid at least annually. Distributions may be taken either in cash or in additional
shares of the respective Fund at the Fund’s NAV on the first Business Day after the
record date for the distribution, at the option of the shareholder. A shareholder that itself
qualifies as a regulated investment company is permitted to report a portion of its distributions as “qualified dividend income,”
provided certain requirements are met.
The net income of the U.S. Government Money Market Fund, as defined below,
is determined as of the normal close of trading on the NYSE on each day the Exchange is open. All the net income is declared as a dividend
to shareholders of record as of that time. Dividends are distributed promptly after the end of each calendar month in additional shares
of the U.S. Government Money Market Fund at the then current NAV, or in cash, at the option of the shareholder. For this purpose the net
income of the U.S. Government Money Market Fund consists of all interest income accrued on its portfolio, plus realized gains and minus
realized losses, and less all expenses and liabilities chargeable against income. Interest income includes discount earned (including
both original issue and market discount) on paper purchased at a discount, less amortization of premium, accrued to the date of maturity.
Expenses, including the compensation payable to MML Advisers, are accrued each day.
If the U.S. Government Money Market Fund incurs or anticipates any unusual
expense, loss or depreciation that would adversely affect its NAV per share or income for a particular period, the Fund would consider
whether to adhere to the dividend policy described above or to revise it in light of the then prevailing circumstances. For example, if
the U.S. Government Money Market Fund’s NAV per share were reduced, or were anticipated to be reduced, below $1.00, the Fund might
suspend further dividend payments until the NAV returned to $1.00. Thus, such expenses, losses, or depreciation might result in an investor
receiving no dividends for the period during which the shares were held and in receiving upon redemption a price per share lower than
the purchase price.
Any gain resulting from an exchange or redemption of an investor’s shares
in a Fund will generally be subject to tax as long-term or short-term capital gain. A loss incurred with respect to shares of a Fund held
for six months or less will be treated as a long-term capital loss to the extent of long-term capital gains dividends received with
respect to such shares.
A Fund’s investments in foreign securities may be subject to foreign withholding or
other taxes. In that case, the Fund’s yield on those securities would be decreased. Shareholders of a Fund, other than a Fund that
makes the election referred to below, generally will not be entitled to claim a credit or deduction with respect to such foreign taxes.
If more than 50% of a Fund’s assets at taxable year end consists of the securities of foreign corporations, the Fund may be able
to elect to “pass through” to its shareholders foreign income taxes that it pays directly or, under certain circumstances,
indirectly through its investments in ETFs or other investment companies that are regulated investment companies for U.S. federal income
tax purposes. If any Fund makes this election, a shareholder of the Fund must include its share of those taxes in gross income as a distribution
from the Fund and the shareholder will be allowed to claim a credit (or a deduction, if the shareholder itemizes deductions) for such
amounts on its federal tax return subject to certain limitations. Shareholders that are not subject to U.S. federal income tax, and those
who invest in a Fund through tax-advantaged accounts (including those who invest through individual retirement accounts or other tax-advantaged
retirement plans), generally will receive no benefit from any tax credit or deduction passed through by a Fund. A shareholder that itself
qualifies for treatment as a regulated investment company and that qualifies as a “qualified fund of funds” may elect to pass
through to its shareholders a tax credit or deduction passed through by a Fund.
In addition, a Fund’s investments in foreign securities, fixed income
securities, derivatives, or foreign currencies may increase or accelerate the Fund’s recognition of ordinary income and may affect
the timing, amount, or character of the Fund’s distributions.
Certain of a Fund’s investments, including certain debt instruments, could cause the
Fund to recognize taxable income in excess of the cash generated by such investments; a Fund could be required to sell other investments,
including when not otherwise advantageous to do so, in order to make required distributions.
Distributions by a Fund to shareholders that are not “United States
persons” within the meaning of the Code (“foreign persons”) properly reported by the Fund as (i) capital gain dividends,
(ii) “interest-related dividends” (i.e., U.S.-source interest income that, in general, would not be subject to U.S.
federal income tax if earned directly by an individual foreign person), and (iii) “short-term capital gain dividends” (i.e.,
net short-term capital gains in excess of net long-term capital losses), in each case to the extent such distributions were properly reported
as such by the Fund generally are not subject to withholding of U.S. federal income tax. Distributions by a Fund to foreign persons other
than capital gain dividends, interest-related dividends, and short-term capital gain dividends generally are subject to withholding of
U.S. federal income tax at a rate of 30% (or lower applicable treaty rate). Foreign persons should refer to the SAI for further information,
and should consult their tax advisors as to the tax consequences to them of owning Fund shares.
The discussion above is very general. Shareholders should consult their tax
advisers for more information about the effect that an investment in a Fund could have on their own tax situations, including possible
federal, state, local, and foreign taxes. Also, as noted above, this discussion does not apply to Fund shares held through tax-advantaged
retirement plans.
Financial Highlights
The financial highlights tables are intended to help you understand
the Funds’ financial performance for the past 5 years (or shorter periods for newer Funds). Certain information reflects financial
results for a single Fund share. The total returns in the tables represent the rate that an investor would have earned on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This information has been audited by Deloitte & Touche LLP,
an independent registered public accounting firm, whose reports, along with each Fund’s financial statements, are included in the
Trust’s Annual Report, and are incorporated by reference into the SAI, and are available on request.
MASSMUTUAL
U.S. GOVERNMENT MONEY MARKET FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c,j |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets before expense waivers |
Ratio
of expenses to average daily net assets after expense waiversj |
Net
investment income (loss) to average daily net assets |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
1.00 |
$
(0.00)d |
$
0.00d |
$
0.00d |
$
— |
$
— |
$
— |
$
1.00 |
0.00%e |
$
235,578 |
0.51% |
0.07% |
0.00%e |
9/30/20 |
1.00 |
0.01 |
0.00d |
0.01 |
(0.01) |
— |
(0.01) |
1.00 |
0.56% |
277,991 |
0.51% |
0.40% |
0.59% |
9/30/19 |
1.00 |
0.02 |
0.00d |
0.02 |
(0.02) |
(0.00)d |
(0.02) |
1.00 |
1.85% |
333,574 |
0.52% |
N/A |
1.83% |
9/30/18 |
1.00 |
0.01 |
0.00d |
0.01 |
(0.01) |
(0.00)d |
(0.01) |
1.00 |
1.08% |
339,551 |
0.50% |
N/A |
1.04% |
9/30/17 |
1.00 |
0.00d |
0.00d |
0.00d |
(0.00)d |
— |
(0.00)d |
1.00 |
0.23% |
352,317 |
0.52% |
0.51% |
0.22% |
c
|
Per
share amount calculated on the average shares method. |
d
|
Amount
is less than $0.005 per share. |
e
|
Amount
is less than 0.005%. |
j
|
Computed
after giving effect to an agreement by MML Advisers to waive certain fees and expenses of the Fund. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
MASSMUTUAL
INFLATION-PROTECTED AND INCOME FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c,j |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets before expense waivers (including interest
expense)p |
Ratio
of expenses to average daily net assets after expense waivers (including interest
expense)j,p |
Ratio
of expenses to average daily net assets after expense waivers (excluding interest
expense)j |
Net
investment income (loss) to average daily net assets (including interest expense)p |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.40 |
$
0.19 |
$
0.48 |
$
0.67 |
$
(0.12) |
$
(0.49) |
$
(0.61) |
$
11.46 |
6.12% |
$
187,579 |
0.47% |
0.47%n |
0.47%n |
1.73% |
9/30/20 |
10.59 |
0.20 |
0.83 |
1.03 |
(0.22) |
— |
(0.22) |
11.40 |
9.93% |
176,809 |
0.47% |
0.47%n |
0.47%n |
1.86% |
9/30/19 |
10.24 |
0.25 |
0.42 |
0.67 |
(0.32) |
— |
(0.32) |
10.59 |
6.80% |
154,260 |
0.50% |
0.49% |
0.46% |
2.40% |
9/30/18 |
10.46 |
0.34 |
(0.26) |
0.08 |
(0.30) |
— |
(0.30) |
10.24 |
0.74% |
133,153 |
1.74% |
1.71% |
0.45% |
3.33% |
9/30/17 |
10.79 |
0.23 |
(0.27) |
(0.04) |
(0.29) |
— |
(0.29) |
10.46 |
(0.32%) |
98,194 |
1.26% |
1.23% |
0.45% |
2.24% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.41 |
$
0.18 |
$
0.48 |
$
0.66 |
$
(0.11) |
$
(0.49) |
$
(0.60) |
$
11.47 |
6.01% |
$
93,318 |
0.57% |
0.57%n |
0.57%n |
1.63% |
9/30/20 |
10.59 |
0.19 |
0.84 |
1.03 |
(0.21) |
— |
(0.21) |
11.41 |
9.92% |
86,369 |
0.57% |
0.57%n |
0.57%n |
1.75% |
9/30/19 |
10.24 |
0.24 |
0.42 |
0.66 |
(0.31) |
— |
(0.31) |
10.59 |
6.68% |
73,365 |
0.60% |
0.59% |
0.56% |
2.30% |
9/30/18 |
10.46 |
0.34 |
(0.27) |
0.07 |
(0.29) |
— |
(0.29) |
10.24 |
0.63% |
60,121 |
1.84% |
1.81% |
0.55% |
3.29% |
9/30/17 |
10.80 |
0.22 |
(0.28) |
(0.06) |
(0.28) |
— |
(0.28) |
10.46 |
(0.51%) |
60,155 |
1.36% |
1.33% |
0.55% |
2.07% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.37 |
$
0.17 |
$
0.47 |
$
0.64 |
$
(0.10) |
$
(0.49) |
$
(0.59) |
$
11.42 |
5.84% |
$
55,836 |
0.67% |
0.67%n |
0.67%n |
1.53% |
9/30/20 |
10.55 |
0.18 |
0.84 |
1.02 |
(0.20) |
— |
(0.20) |
11.37 |
9.82% |
54,729 |
0.67% |
0.67%n |
0.67%n |
1.66% |
9/30/19 |
10.20 |
0.22 |
0.43 |
0.65 |
(0.30) |
— |
(0.30) |
10.55 |
6.60% |
50,873 |
0.71% |
0.70% |
0.67% |
2.17% |
9/30/18 |
10.42 |
0.32 |
(0.27) |
0.05 |
(0.27) |
— |
(0.27) |
10.20 |
0.51% |
50,449 |
1.94% |
1.91% |
0.65% |
3.16% |
9/30/17 |
10.76 |
0.21 |
(0.29) |
(0.08) |
(0.26) |
— |
(0.26) |
10.42 |
(0.63%) |
57,719 |
1.46% |
1.43% |
0.65% |
2.00% |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.49 |
$
0.16 |
$
0.48 |
$
0.64 |
$
(0.09) |
$
(0.49) |
$
(0.58) |
$
11.55 |
5.74% |
$
14,073 |
0.77% |
0.77%n |
0.77%n |
1.42% |
9/30/20 |
10.66 |
0.17 |
0.85 |
1.02 |
(0.19) |
— |
(0.19) |
11.49 |
9.70% |
15,288 |
0.77% |
0.77%n |
0.77%n |
1.56% |
9/30/19 |
10.30 |
0.21 |
0.44 |
0.65 |
(0.29) |
— |
(0.29) |
10.66 |
6.53% |
16,168 |
0.80% |
0.79% |
0.76% |
2.03% |
9/30/18 |
10.53 |
0.31 |
(0.28) |
0.03 |
(0.26) |
— |
(0.26) |
10.30 |
0.31% |
14,744 |
2.04% |
2.01% |
0.75% |
3.02% |
9/30/17 |
10.86 |
0.20 |
(0.27) |
(0.07) |
(0.26) |
— |
(0.26) |
10.53 |
(0.58%) |
14,519 |
1.56% |
1.53% |
0.75% |
1.94% |
Class
A |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.19 |
$
0.12 |
$
0.48 |
$
0.60 |
$
(0.07) |
$
(0.49) |
$
(0.56) |
$
11.23 |
5.54% |
$
13,244 |
1.02% |
1.02%n |
1.02%n |
1.12% |
9/30/20 |
10.39 |
0.14 |
0.82 |
0.96 |
(0.16) |
— |
(0.16) |
11.19 |
9.42% |
22,018 |
1.02% |
1.02%n |
1.02%n |
1.30% |
9/30/19 |
10.05 |
0.18 |
0.42 |
0.60 |
(0.26) |
— |
(0.26) |
10.39 |
6.16% |
16,136 |
1.06% |
1.05% |
1.02% |
1.78% |
9/30/18 |
10.27 |
0.28 |
(0.26) |
0.02 |
(0.24) |
— |
(0.24) |
10.05 |
0.16% |
20,582 |
2.29% |
2.26% |
1.00% |
2.80% |
9/30/17 |
10.60 |
0.17 |
(0.27) |
(0.10) |
(0.23) |
— |
(0.23) |
10.27 |
(0.92%) |
22,180 |
1.81% |
1.78% |
1.00% |
1.67% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.12 |
$
0.14 |
$
0.47 |
$
0.61 |
$
(0.08) |
$
(0.49) |
$
(0.57) |
$
11.16 |
5.65% |
$
5,234 |
0.92% |
0.92%n |
0.92%n |
1.31% |
9/30/20 |
10.33 |
0.15 |
0.82 |
0.97 |
(0.18) |
— |
(0.18) |
11.12 |
9.51% |
4,358 |
0.92% |
0.92%n |
0.92%n |
1.40% |
9/30/19 |
10.00 |
0.19 |
0.42 |
0.61 |
(0.28) |
— |
(0.28) |
10.33 |
6.27% |
6,949 |
0.96% |
0.95% |
0.92% |
1.95% |
9/30/18 |
10.22 |
0.29 |
(0.26) |
0.03 |
(0.25) |
— |
(0.25) |
10.00 |
0.31% |
6,840 |
2.19% |
2.16% |
0.90% |
2.87% |
9/30/17 |
10.57 |
0.18 |
(0.28) |
(0.10) |
(0.25) |
— |
(0.25) |
10.22 |
(0.84%) |
6,231 |
1.71% |
1.68% |
0.90% |
1.78% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.12 |
$
0.11 |
$
0.47 |
$
0.58 |
$
(0.04) |
$
(0.49) |
$
(0.53) |
$
11.17 |
5.40% |
$
2,940 |
1.17% |
1.17%n |
1.17%n |
1.02% |
9/30/20 |
10.33 |
0.12 |
0.82 |
0.94 |
(0.15) |
— |
(0.15) |
11.12 |
9.20% |
3,256 |
1.17% |
1.17%n |
1.17%n |
1.16% |
9/30/19 |
9.99 |
0.17 |
0.41 |
0.58 |
(0.24) |
— |
(0.24) |
10.33 |
6.03% |
4,297 |
1.21% |
1.20% |
1.17% |
1.68% |
9/30/18 |
10.22 |
0.27 |
(0.27) |
0.00d |
(0.23) |
— |
(0.23) |
9.99 |
0.03% |
4,569 |
2.44% |
2.41% |
1.15% |
2.69% |
9/30/17 |
10.57 |
0.16 |
(0.27) |
(0.11) |
(0.24) |
— |
(0.24) |
10.22 |
(1.00%) |
4,686 |
1.97% |
1.94% |
1.16% |
1.54% |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
100% |
110% |
42% |
62% |
25% |
c
|
Per
share amount calculated on the average shares method. |
d
|
Amount
is less than $0.005 per share. |
j
|
Computed
after giving effect to an agreement by MML Advisers to waive certain fees and expenses of the Fund. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
n
|
Expenses
incurred during the period fell under the expense cap. |
p
|
Interest
expense incurred as a result of entering into reverse repurchase agreements and Treasury roll transactions is included in the Fund’s
net expenses in the Statements of Operations. Income earned on investing proceeds from reverse repurchase agreements and Treasury roll
transactions is included in interest income in the Statements of Operations. |
MASSMUTUAL
CORE BOND FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets |
Net
investment income (loss) to average daily net assets |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.64 |
$
0.27 |
$
0.11 |
$
0.38 |
$
(0.43) |
$
(0.26) |
$
(0.69) |
$
11.33 |
3.31% |
$
679,036 |
0.42% |
2.39% |
9/30/20 |
11.33 |
0.37 |
0.32 |
0.69 |
(0.38) |
— |
(0.38) |
11.64 |
6.28% |
786,360 |
0.42% |
3.27% |
9/30/19 |
10.66 |
0.37 |
0.66 |
1.03 |
(0.36) |
— |
(0.36) |
11.33 |
9.98% |
847,736 |
0.43% |
3.42% |
9/30/18 |
11.04 |
0.34 |
(0.39) |
(0.05) |
(0.33) |
— |
(0.33) |
10.66 |
(0.46%) |
695,501 |
0.42% |
3.19% |
9/30/17 |
11.26 |
0.29 |
(0.15) |
0.14 |
(0.36) |
— |
(0.36) |
11.04 |
1.41% |
546,975 |
0.42% |
2.70% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.68 |
$
0.26 |
$
0.11 |
$
0.37 |
$
(0.42) |
$
(0.26) |
$
(0.68) |
$
11.37 |
3.19% |
$
306,648 |
0.52% |
2.29% |
9/30/20 |
11.37 |
0.36 |
0.32 |
0.68 |
(0.37) |
— |
(0.37) |
11.68 |
6.16% |
316,359 |
0.52% |
3.17% |
9/30/19 |
10.69 |
0.36 |
0.67 |
1.03 |
(0.35) |
— |
(0.35) |
11.37 |
9.92% |
317,805 |
0.53% |
3.32% |
9/30/18 |
11.07 |
0.33 |
(0.39) |
(0.06) |
(0.32) |
— |
(0.32) |
10.69 |
(0.57%) |
294,370 |
0.52% |
3.07% |
9/30/17 |
11.29 |
0.28 |
(0.15) |
0.13 |
(0.35) |
— |
(0.35) |
11.07 |
1.30% |
358,319 |
0.52% |
2.58% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.60 |
$
0.25 |
$
0.10 |
$
0.35 |
$
(0.39) |
$
(0.26) |
$
(0.65) |
$
11.30 |
3.11% |
$
58,047 |
0.62% |
2.19% |
9/30/20 |
11.29 |
0.35 |
0.31 |
0.66 |
(0.35) |
— |
(0.35) |
11.60 |
6.06% |
83,876 |
0.62% |
3.08% |
9/30/19 |
10.63 |
0.35 |
0.64 |
0.99 |
(0.33) |
— |
(0.33) |
11.29 |
9.67% |
86,988 |
0.63% |
3.22% |
9/30/18 |
11.01 |
0.32 |
(0.39) |
(0.07) |
(0.31) |
— |
(0.31) |
10.63 |
(0.66%) |
101,502 |
0.62% |
2.98% |
9/30/17 |
11.22 |
0.27 |
(0.15) |
0.12 |
(0.33) |
— |
(0.33) |
11.01 |
1.24% |
100,903 |
0.62% |
2.51% |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.51 |
$
0.24 |
$
0.10 |
$
0.34 |
$
(0.40) |
$
(0.26) |
$
(0.66) |
$
11.19 |
2.97% |
$
55,178 |
0.72% |
2.11% |
9/30/20 |
11.21 |
0.33 |
0.32 |
0.65 |
(0.35) |
— |
(0.35) |
11.51 |
5.94% |
76,597 |
0.72% |
2.97% |
9/30/19 |
10.55 |
0.33 |
0.66 |
0.99 |
(0.33) |
— |
(0.33) |
11.21 |
9.65% |
67,239 |
0.73% |
3.13% |
9/30/18 |
10.92 |
0.31 |
(0.38) |
(0.07) |
(0.30) |
— |
(0.30) |
10.55 |
(0.70%) |
69,478 |
0.72% |
2.88% |
9/30/17 |
11.14 |
0.26 |
(0.15) |
0.11 |
(0.33) |
— |
(0.33) |
10.92 |
1.11% |
71,425 |
0.72% |
2.38% |
Class
A |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.40 |
$
0.21 |
$
0.09 |
$
0.30 |
$
(0.35) |
$
(0.26) |
$
(0.61) |
$
11.09 |
2.70% |
$
57,351 |
0.97% |
1.83% |
9/30/20 |
11.10 |
0.30 |
0.32 |
0.62 |
(0.32) |
— |
(0.32) |
11.40 |
5.70% |
58,572 |
0.97% |
2.72% |
9/30/19 |
10.45 |
0.30 |
0.65 |
0.95 |
(0.30) |
— |
(0.30) |
11.10 |
9.32% |
97,070 |
0.98% |
2.87% |
9/30/18 |
10.82 |
0.28 |
(0.38) |
(0.10) |
(0.27) |
— |
(0.27) |
10.45 |
(1.00%) |
106,562 |
0.97% |
2.63% |
9/30/17 |
11.03 |
0.23 |
(0.15) |
0.08 |
(0.29) |
— |
(0.29) |
10.82 |
0.87% |
114,317 |
0.97% |
2.13% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.33 |
$
0.21 |
$
0.10 |
$
0.31 |
$
(0.37) |
$
(0.26) |
$
(0.63) |
$
11.01 |
2.82% |
$
8,557 |
0.87% |
1.95% |
9/30/20 |
11.04 |
0.31 |
0.31 |
0.62 |
(0.33) |
— |
(0.33) |
11.33 |
5.80% |
10,444 |
0.87% |
2.80% |
9/30/19 |
10.39 |
0.31 |
0.64 |
0.95 |
(0.30) |
— |
(0.30) |
11.04 |
9.47% |
14,011 |
0.88% |
2.98% |
9/30/18 |
10.78 |
0.29 |
(0.39) |
(0.10) |
(0.29) |
— |
(0.29) |
10.39 |
(0.97%) |
10,624 |
0.87% |
2.72% |
9/30/17 |
11.00 |
0.24 |
(0.14) |
0.10 |
(0.32) |
— |
(0.32) |
10.78 |
1.03% |
14,811 |
0.87% |
2.23% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.63 |
$
0.19 |
$
0.10 |
$
0.29 |
$
(0.32) |
$
(0.26) |
$
(0.58) |
$
11.34 |
2.54% |
$
352 |
1.12% |
1.70% |
9/30/20 |
11.34 |
0.29 |
0.32 |
0.61 |
(0.32) |
— |
(0.32) |
11.63 |
5.54% |
867 |
1.12% |
2.57% |
9/30/19 |
10.67 |
0.29 |
0.67 |
0.96 |
(0.29) |
— |
(0.29) |
11.34 |
9.24% |
1,225 |
1.13% |
2.72% |
9/30/18 |
11.02 |
0.27 |
(0.39) |
(0.12) |
(0.23) |
— |
(0.23) |
10.67 |
(1.13%) |
803 |
1.12% |
2.49% |
9/30/17 |
11.25 |
0.22 |
(0.16) |
0.06 |
(0.29) |
— |
(0.29) |
11.02 |
0.64% |
828 |
1.12% |
1.99% |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
256% |
231% |
261% |
140% |
213% |
c
|
Per
share amount calculated on the average shares method. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
MASSMUTUAL
DIVERSIFIED BOND FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c,j |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets before expense waivers |
Ratio
of expenses to average daily net assets after expense waiversj |
Net
investment income (loss) to average daily net assets |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.51 |
$
0.32 |
$
0.33 |
$
0.65 |
$
(0.46) |
$
(0.37) |
$
(0.83) |
$
11.33 |
5.89% |
$
111,411 |
0.52% |
N/A |
2.85% |
9/30/20 |
11.28 |
0.39 |
0.20 |
0.59 |
(0.36) |
(0.00)d |
(0.36) |
11.51 |
5.43% |
97,183 |
0.51% |
N/A |
3.54% |
9/30/19 |
10.59 |
0.38 |
0.64 |
1.02 |
(0.33) |
— |
(0.33) |
11.28 |
9.98% |
60,965 |
0.55% |
0.55%n |
3.54% |
9/30/18 |
10.97 |
0.35 |
(0.41) |
(0.06) |
(0.32) |
— |
(0.32) |
10.59 |
(0.55%) |
21,746 |
0.50% |
0.50%n |
3.33% |
9/30/17 |
11.01 |
0.31 |
(0.09) |
0.22 |
(0.26) |
— |
(0.26) |
10.97 |
2.16% |
27,548 |
0.51% |
0.51%n |
2.87% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
10.58 |
$
0.28 |
$
0.31 |
$
0.59 |
$
(0.45) |
$
(0.37) |
$
(0.82) |
$
10.35 |
5.79% |
$
80,079 |
0.62% |
N/A |
2.75% |
9/30/20 |
10.40 |
0.35 |
0.18 |
0.53 |
(0.35) |
(0.00)d |
(0.35) |
10.58 |
5.30% |
78,289 |
0.61% |
N/A |
3.46% |
9/30/19 |
9.78 |
0.34 |
0.60 |
0.94 |
(0.32) |
— |
(0.32) |
10.40 |
9.99% |
109,659 |
0.65% |
0.65%n |
3.46% |
9/30/18 |
10.16 |
0.32 |
(0.39) |
(0.07) |
(0.31) |
— |
(0.31) |
9.78 |
(0.69%) |
98,402 |
0.60% |
0.60%n |
3.24% |
9/30/17 |
10.22 |
0.28 |
(0.09) |
0.19 |
(0.25) |
— |
(0.25) |
10.16 |
2.02% |
88,740 |
0.61% |
0.61%n |
2.76% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
10.73 |
$
0.28 |
$
0.31 |
$
0.59 |
$
(0.44) |
$
(0.37) |
$
(0.81) |
$
10.51 |
5.71% |
$
11,853 |
0.72% |
N/A |
2.66% |
9/30/20 |
10.54 |
0.35 |
0.18 |
0.53 |
(0.34) |
(0.00)d |
(0.34) |
10.73 |
5.20% |
12,067 |
0.71% |
N/A |
3.36% |
9/30/19 |
9.91 |
0.33 |
0.61 |
0.94 |
(0.31) |
— |
(0.31) |
10.54 |
9.80% |
12,976 |
0.75% |
0.75%n |
3.35% |
9/30/18 |
10.28 |
0.31 |
(0.38) |
(0.07) |
(0.30) |
— |
(0.30) |
9.91 |
(0.69%) |
18,946 |
0.70% |
0.70%n |
3.14% |
9/30/17 |
10.34 |
0.27 |
(0.09) |
0.18 |
(0.24) |
— |
(0.24) |
10.28 |
1.89% |
16,047 |
0.71% |
0.71%n |
2.65% |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
10.71 |
$
0.27 |
$
0.30 |
$
0.57 |
$
(0.42) |
$
(0.37) |
$
(0.79) |
$
10.49 |
5.52% |
$
12,621 |
0.82% |
N/A |
2.57% |
9/30/20 |
10.52 |
0.34 |
0.18 |
0.52 |
(0.33) |
(0.00)d |
(0.33) |
10.71 |
5.10% |
17,108 |
0.81% |
N/A |
3.25% |
9/30/19 |
9.88 |
0.32 |
0.62 |
0.94 |
(0.30) |
— |
(0.30) |
10.52 |
9.79% |
21,870 |
0.85% |
0.85%n |
3.25% |
9/30/18 |
10.25 |
0.30 |
(0.38) |
(0.08) |
(0.29) |
— |
(0.29) |
9.88 |
(0.83%) |
27,039 |
0.80% |
0.80%n |
3.03% |
9/30/17 |
10.31 |
0.26 |
(0.09) |
0.17 |
(0.23) |
— |
(0.23) |
10.25 |
1.78% |
26,601 |
0.81% |
0.81%n |
2.54% |
Class
A |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
10.69 |
$
0.24 |
$
0.30 |
$
0.54 |
$
(0.37) |
$
(0.37) |
$
(0.74) |
$
10.49 |
5.23% |
$
9,381 |
1.07% |
N/A |
2.33% |
9/30/20 |
10.48 |
0.31 |
0.20 |
0.51 |
(0.30) |
(0.00)d |
(0.30) |
10.69 |
4.96% |
14,756 |
1.06% |
N/A |
2.99% |
9/30/19 |
9.85 |
0.30 |
0.60 |
0.90 |
(0.27) |
— |
(0.27) |
10.48 |
9.45% |
28,973 |
1.10% |
1.10%n |
3.01% |
9/30/18 |
10.23 |
0.28 |
(0.40) |
(0.12) |
(0.26) |
— |
(0.26) |
9.85 |
(1.17%) |
32,456 |
1.05% |
1.05%n |
2.78% |
9/30/17 |
10.28 |
0.23 |
(0.07) |
0.16 |
(0.21) |
— |
(0.21) |
10.23 |
1.63% |
34,137 |
1.06% |
1.06%n |
2.30% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
10.57 |
$
0.25 |
$
0.29 |
$
0.54 |
$
(0.41) |
$
(0.37) |
$
(0.78) |
$
10.33 |
5.35% |
$
5,253 |
0.97% |
N/A |
2.42% |
9/30/20 |
10.38 |
0.32 |
0.19 |
0.51 |
(0.32) |
(0.00)d |
(0.32) |
10.57 |
5.05% |
6,233 |
0.96% |
N/A |
3.10% |
9/30/19 |
9.78 |
0.31 |
0.59 |
0.90 |
(0.30) |
— |
(0.30) |
10.38 |
9.49% |
6,925 |
1.00% |
1.00%n |
3.12% |
9/30/18 |
10.16 |
0.28 |
(0.38) |
(0.10) |
(0.28) |
— |
(0.28) |
9.78 |
(1.01%) |
4,730 |
0.95% |
0.95%n |
2.87% |
9/30/17 |
10.22 |
0.24 |
(0.07) |
0.17 |
(0.23) |
— |
(0.23) |
10.16 |
1.77% |
5,032 |
0.96% |
0.96%n |
2.41% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
10.53 |
$
0.22 |
$
0.30 |
$
0.52 |
$
(0.38) |
$
(0.37) |
$
(0.75) |
$
10.30 |
5.14% |
$
3,255 |
1.22% |
N/A |
2.16% |
9/30/20 |
10.34 |
0.29 |
0.17 |
0.46 |
(0.27) |
(0.00)d |
(0.27) |
10.53 |
4.61% |
3,881 |
1.21% |
N/A |
2.85% |
9/30/19 |
9.72 |
0.28 |
0.60 |
0.88 |
(0.26) |
— |
(0.26) |
10.34 |
9.35% |
3,553 |
1.25% |
1.25%n |
2.85% |
9/30/18 |
10.10 |
0.26 |
(0.38) |
(0.12) |
(0.26) |
— |
(0.26) |
9.72 |
(1.24%) |
4,530 |
1.20% |
1.20%n |
2.64% |
9/30/17 |
10.19 |
0.22 |
(0.09) |
0.13 |
(0.22) |
— |
(0.22) |
10.10 |
1.41% |
3,869 |
1.21% |
1.21%n |
2.18% |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
192% |
186% |
236% |
142% |
207% |
c
|
Per
share amount calculated on the average shares method. |
d
|
Amount
is less than $0.005 per share. |
j
|
Computed
after giving effect to an agreement by MML Advisers to waive certain fees and expenses of the Fund. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
n
|
Expenses
incurred during the period fell under the expense cap. |
MASSMUTUAL
BALANCED FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c,j |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets before expense waivers |
Ratio
of expenses to average daily net assets after expense waiversj |
Net
investment income (loss) to average daily net assets |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.40 |
$
0.16 |
$
2.21 |
$
2.37 |
$
(0.21) |
$
(0.22) |
$
(0.43) |
$
14.34 |
19.60% |
$
54,692 |
0.69% |
N/A |
1.21% |
9/30/20 |
12.07 |
0.21 |
0.90 |
1.11 |
(0.27) |
(0.51) |
(0.78) |
12.40 |
9.49% |
42,455 |
0.71% |
N/A |
1.75% |
9/30/19 |
12.86 |
0.24 |
(0.09)aa |
0.15 |
(0.22) |
(0.72) |
(0.94) |
12.07 |
1.91% |
31,567 |
0.76% |
0.74% |
2.06% |
9/30/18 |
12.53 |
0.22 |
1.02 |
1.24 |
(0.24) |
(0.67) |
(0.91) |
12.86 |
10.21% |
11,637 |
0.70% |
0.60% |
1.79% |
9/30/17 |
11.32 |
0.21 |
1.28 |
1.49 |
(0.22) |
(0.06) |
(0.28) |
12.53 |
13.39% |
8,270 |
0.68% |
0.60% |
1.76% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.39 |
$
0.15 |
$
2.22 |
$
2.37 |
$
(0.20) |
$
(0.22) |
$
(0.42) |
$
14.34 |
19.58% |
$
39,742 |
0.79% |
N/A |
1.10% |
9/30/20 |
12.07 |
0.20 |
0.89 |
1.09 |
(0.26) |
(0.51) |
(0.77) |
12.39 |
9.29% |
42,199 |
0.81% |
N/A |
1.66% |
9/30/19 |
12.85 |
0.23 |
(0.09)aa |
0.14 |
(0.20) |
(0.72) |
(0.92) |
12.07 |
1.88% |
45,321 |
0.86% |
0.83% |
1.94% |
9/30/18 |
12.53 |
0.21 |
1.01 |
1.22 |
(0.23) |
(0.67) |
(0.90) |
12.85 |
10.01% |
45,211 |
0.80% |
0.70% |
1.67% |
9/30/17 |
11.32 |
0.20 |
1.28 |
1.48 |
(0.21) |
(0.06) |
(0.27) |
12.53 |
13.27% |
49,381 |
0.78% |
0.70% |
1.66% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.12 |
$
0.14 |
$
2.35 |
$
2.49 |
$
(0.19) |
$
(0.22) |
$
(0.41) |
$
15.20 |
19.40% |
$
10,330 |
0.89% |
N/A |
1.00% |
9/30/20 |
12.73 |
0.19 |
0.95 |
1.14 |
(0.24) |
(0.51) |
(0.75) |
13.12 |
9.22% |
8,637 |
0.91% |
N/A |
1.56% |
9/30/19 |
13.50 |
0.23 |
(0.09)aa |
0.14 |
(0.19) |
(0.72) |
(0.91) |
12.73 |
1.73% |
6,045 |
0.96% |
0.92% |
1.84% |
9/30/18 |
13.11 |
0.21 |
1.06 |
1.27 |
(0.21) |
(0.67) |
(0.88) |
13.50 |
9.94% |
7,243 |
0.90% |
0.80% |
1.58% |
9/30/17 |
11.83 |
0.19 |
1.34 |
1.53 |
(0.19) |
(0.06) |
(0.25) |
13.11 |
13.11% |
6,978 |
0.88% |
0.80% |
1.54% |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.44 |
$
0.12 |
$
2.23 |
$
2.35 |
$
(0.18) |
$
(0.22) |
$
(0.40) |
$
14.39 |
19.30% |
$
7,411 |
0.99% |
N/A |
0.90% |
9/30/20 |
12.11 |
0.17 |
0.90 |
1.07 |
(0.23) |
(0.51) |
(0.74) |
12.44 |
9.13% |
5,849 |
1.01% |
N/A |
1.44% |
9/30/19 |
12.89 |
0.20 |
(0.09)aa |
0.11 |
(0.17) |
(0.72) |
(0.89) |
12.11 |
1.62% |
6,981 |
1.06% |
1.02% |
1.73% |
9/30/18 |
12.55 |
0.18 |
1.02 |
1.20 |
(0.19) |
(0.67) |
(0.86) |
12.89 |
9.88% |
8,129 |
1.00% |
0.90% |
1.47% |
9/30/17 |
11.35 |
0.17 |
1.28 |
1.45 |
(0.19) |
(0.06) |
(0.25) |
12.55 |
13.01% |
9,413 |
0.98% |
0.90% |
1.46% |
Class
A |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.03 |
$
0.09 |
$
2.16 |
$
2.25 |
$
(0.15) |
$
(0.22) |
$
(0.37) |
$
13.91 |
19.07% |
$
20,919 |
1.24% |
N/A |
0.67% |
9/30/20 |
11.74 |
0.14 |
0.86 |
1.00 |
(0.20) |
(0.51) |
(0.71) |
12.03 |
8.80% |
26,626 |
1.26% |
N/A |
1.21% |
9/30/19 |
12.51 |
0.17 |
(0.08)aa |
0.09 |
(0.14) |
(0.72) |
(0.86) |
11.74 |
1.44% |
26,981 |
1.31% |
1.27% |
1.49% |
9/30/18 |
12.22 |
0.15 |
0.98 |
1.13 |
(0.17) |
(0.67) |
(0.84) |
12.51 |
9.48% |
30,517 |
1.25% |
1.15% |
1.22% |
9/30/17 |
11.05 |
0.14 |
1.25 |
1.39 |
(0.16) |
(0.06) |
(0.22) |
12.22 |
12.78% |
32,637 |
1.23% |
1.15% |
1.21% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.92 |
$
0.10 |
$
2.13 |
$
2.23 |
$
(0.16) |
$
(0.22) |
$
(0.38) |
$
13.77 |
19.12% |
$
5,984 |
1.14% |
N/A |
0.76% |
9/30/20 |
11.64 |
0.15 |
0.86 |
1.01 |
(0.22) |
(0.51) |
(0.73) |
11.92 |
8.94% |
2,994 |
1.16% |
N/A |
1.31% |
9/30/19 |
12.42 |
0.18 |
(0.08)aa |
0.10 |
(0.16) |
(0.72) |
(0.88) |
11.64 |
1.52% |
2,853 |
1.21% |
1.17% |
1.59% |
9/30/18 |
12.15 |
0.16 |
0.97 |
1.13 |
(0.19) |
(0.67) |
(0.86) |
12.42 |
9.58% |
3,499 |
1.15% |
1.05% |
1.34% |
9/30/17 |
10.99 |
0.15 |
1.24 |
1.39 |
(0.17) |
(0.06) |
(0.23) |
12.15 |
12.88% |
2,822 |
1.13% |
1.05% |
1.32% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.85 |
$
0.07 |
$
2.11 |
$
2.18 |
$
(0.12) |
$
(0.22) |
$
(0.34) |
$
13.69 |
18.81% |
$
12,390 |
1.39% |
N/A |
0.50% |
9/30/20 |
11.57 |
0.12 |
0.85 |
0.97 |
(0.18) |
(0.51) |
(0.69) |
11.85 |
8.66% |
7,503 |
1.41% |
N/A |
1.06% |
9/30/19 |
12.36 |
0.15 |
(0.08)aa |
0.07 |
(0.14) |
(0.72) |
(0.86) |
11.57 |
1.27% |
7,236 |
1.46% |
1.42% |
1.35% |
9/30/18 |
12.09 |
0.13 |
0.97 |
1.10 |
(0.16) |
(0.67) |
(0.83) |
12.36 |
9.32% |
8,002 |
1.40% |
1.30% |
1.08% |
9/30/17 |
10.95 |
0.12 |
1.24 |
1.36 |
(0.16) |
(0.06) |
(0.22) |
12.09 |
12.58% |
7,251 |
1.38% |
1.30% |
1.08% |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
343% |
113% |
161% |
77% |
108% |
c
|
Per
share amount calculated on the average shares method. |
j
|
Computed
after giving effect to an agreement by MML Advisers to waive certain fees and expenses of the Fund. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
aa
|
The
amount shown for a share outstanding does not correspond with the aggregate net realized and unrealized gain (loss) for the period due
to the timing of purchases and redemptions of Fund shares in relation to the fluctuating market values of the Fund. |
MASSMUTUAL
DISCIPLINED VALUE FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets |
Net
investment income (loss) to average daily net assets |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.08 |
$
0.22 |
$
4.28 |
$
4.50 |
$
(0.28) |
$
— |
$
(0.28) |
$
16.30 |
37.75% |
$
31,848 |
0.74% |
1.46% |
9/30/20 |
13.98 |
0.28 |
(1.16) |
(0.88) |
(0.31) |
(0.71) |
(1.02) |
12.08 |
(7.26%) |
20,650 |
0.72% |
2.20% |
9/30/19 |
17.06 |
0.28 |
(0.76) |
(0.48) |
(0.40) |
(2.20) |
(2.60) |
13.98 |
(1.20%) |
16,781 |
0.64% |
2.03% |
9/30/18 |
17.67 |
0.29 |
1.28 |
1.57 |
(0.36) |
(1.82) |
(2.18) |
17.06 |
9.34% |
19,546 |
0.57% |
1.74% |
9/30/17 |
16.05 |
0.31 |
2.40 |
2.71 |
(0.53) |
(0.56) |
(1.09) |
17.67 |
17.36% |
79,531 |
0.57% |
1.87% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.11 |
$
0.21 |
$
4.28 |
$
4.49 |
$
(0.26) |
$
— |
$
(0.26) |
$
16.34 |
37.57% |
$
35,564 |
0.84% |
1.39% |
9/30/20 |
14.01 |
0.27 |
(1.17) |
(0.90) |
(0.29) |
(0.71) |
(1.00) |
12.11 |
(7.34%) |
32,418 |
0.82% |
2.10% |
9/30/19 |
17.09 |
0.27 |
(0.76) |
(0.49) |
(0.39) |
(2.20) |
(2.59) |
14.01 |
(1.32%) |
53,709 |
0.74% |
1.92% |
9/30/18 |
17.69 |
0.28 |
1.28 |
1.56 |
(0.34) |
(1.82) |
(2.16) |
17.09 |
9.27% |
59,987 |
0.67% |
1.65% |
9/30/17 |
16.06 |
0.30 |
2.40 |
2.70 |
(0.51) |
(0.56) |
(1.07) |
17.69 |
17.31% |
46,583 |
0.67% |
1.78% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.00 |
$
0.19 |
$
4.25 |
$
4.44 |
$
(0.25) |
$
— |
$
(0.25) |
$
16.19 |
37.48% |
$
16,120 |
0.94% |
1.27% |
9/30/20 |
13.88 |
0.25 |
(1.16) |
(0.91) |
(0.26) |
(0.71) |
(0.97) |
12.00 |
(7.46%) |
11,618 |
0.92% |
1.98% |
9/30/19 |
16.95 |
0.25 |
(0.76) |
(0.51) |
(0.36) |
(2.20) |
(2.56) |
13.88 |
(1.43%) |
20,401 |
0.84% |
1.82% |
9/30/18 |
17.57 |
0.26 |
1.26 |
1.52 |
(0.32) |
(1.82) |
(2.14) |
16.95 |
9.10% |
50,102 |
0.77% |
1.55% |
9/30/17 |
15.95 |
0.28 |
2.39 |
2.67 |
(0.49) |
(0.56) |
(1.05) |
17.57 |
17.19% |
49,413 |
0.77% |
1.65% |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.28 |
$
0.18 |
$
4.35 |
$
4.53 |
$
(0.24) |
$
— |
$
(0.24) |
$
16.57 |
37.32% |
$
1,652 |
1.04% |
1.23% |
9/30/20 |
14.20 |
0.24 |
(1.20) |
(0.96) |
(0.25) |
(0.71) |
(0.96) |
12.28 |
(7.62%) |
4,214 |
1.02% |
1.88% |
9/30/19 |
17.27 |
0.25 |
(0.76) |
(0.51) |
(0.36) |
(2.20) |
(2.56) |
14.20 |
(1.46%) |
5,731 |
0.94% |
1.72% |
9/30/18 |
17.86 |
0.25 |
1.29 |
1.54 |
(0.31) |
(1.82) |
(2.13) |
17.27 |
9.02% |
9,147 |
0.87% |
1.46% |
9/30/17 |
16.21 |
0.27 |
2.41 |
2.68 |
(0.47) |
(0.56) |
(1.03) |
17.86 |
17.01% |
5,970 |
0.87% |
1.57% |
Class
A |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.85 |
$
0.14 |
$
4.20 |
$
4.34 |
$
(0.21) |
$
— |
$
(0.21) |
$
15.98 |
37.00% |
$
6,784 |
1.29% |
0.93% |
9/30/20 |
13.73 |
0.21 |
(1.15) |
(0.94) |
(0.23) |
(0.71) |
(0.94) |
11.85 |
(7.77%) |
5,569 |
1.27% |
1.66% |
9/30/19 |
16.78 |
0.20 |
(0.74) |
(0.54) |
(0.31) |
(2.20) |
(2.51) |
13.73 |
(1.75%) |
6,012 |
1.19% |
1.48% |
9/30/18 |
17.39 |
0.20 |
1.25 |
1.45 |
(0.24) |
(1.82) |
(2.06) |
16.78 |
8.74% |
8,886 |
1.12% |
1.20% |
9/30/17 |
15.82 |
0.22 |
2.36 |
2.58 |
(0.45) |
(0.56) |
(1.01) |
17.39 |
16.74% |
9,120 |
1.12% |
1.32% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.76 |
$
0.15 |
$
4.16 |
$
4.31 |
$
(0.22) |
$
— |
$
(0.22) |
$
15.85 |
37.08% |
$
2,731 |
1.19% |
1.06% |
9/30/20 |
13.63 |
0.21 |
(1.13) |
(0.92) |
(0.24) |
(0.71) |
(0.95) |
11.76 |
(7.70%) |
2,707 |
1.17% |
1.73% |
9/30/19 |
16.67 |
0.22 |
(0.75) |
(0.53) |
(0.31) |
(2.20) |
(2.51) |
13.63 |
(1.65%) |
4,039 |
1.09% |
1.58% |
9/30/18 |
17.32 |
0.22 |
1.24 |
1.46 |
(0.29) |
(1.82) |
(2.11) |
16.67 |
8.84% |
6,428 |
1.02% |
1.30% |
9/30/17 |
15.77 |
0.24 |
2.36 |
2.60 |
(0.49) |
(0.56) |
(1.05) |
17.32 |
16.94% |
10,139 |
1.02% |
1.43% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.95 |
$
0.12 |
$
4.24 |
$
4.36 |
$
(0.19) |
$
— |
$
(0.19) |
$
16.12 |
36.87% |
$
4,873 |
1.44% |
0.79% |
9/30/20 |
13.85 |
0.19 |
(1.17) |
(0.98) |
(0.21) |
(0.71) |
(0.92) |
11.95 |
(7.98%) |
3,988 |
1.42% |
1.50% |
9/30/19 |
16.90 |
0.18 |
(0.74) |
(0.56) |
(0.29) |
(2.20) |
(2.49) |
13.85 |
(1.85%) |
4,346 |
1.34% |
1.33% |
9/30/18 |
17.56 |
0.18 |
1.25 |
1.43 |
(0.27) |
(1.82) |
(2.09) |
16.90 |
8.53% |
4,196 |
1.27% |
1.05% |
9/30/17 |
15.92 |
0.20 |
2.38 |
2.58 |
(0.38) |
(0.56) |
(0.94) |
17.56 |
16.62% |
3,820 |
1.27% |
1.18% |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
189% |
57% |
53% |
80% |
102% |
c
|
Per
share amount calculated on the average shares method. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
MASSMUTUAL
MAIN STREET FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets |
Net
investment income (loss) to average daily net assets |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.28 |
$
0.11 |
$
3.00 |
$
3.11 |
$
(0.12) |
$
(0.27) |
$
(0.39) |
$
14.00 |
28.21% |
$
27,948 |
0.75% |
0.84% |
9/30/20 |
11.07 |
0.11 |
1.19 |
1.30 |
(0.13) |
(0.96) |
(1.09) |
11.28 |
12.22% |
30,273 |
0.74% |
1.03% |
9/30/19 |
12.04 |
0.14 |
0.30 |
0.44 |
(0.13) |
(1.28) |
(1.41) |
11.07 |
5.60% |
24,639 |
0.73% |
1.29% |
9/30/18 |
11.94 |
0.14 |
0.89 |
1.03 |
(0.14) |
(0.79) |
(0.93) |
12.04 |
9.11% |
24,123 |
0.71% |
1.17% |
9/30/17 |
10.42 |
0.16 |
1.81 |
1.97 |
(0.15) |
(0.30) |
(0.45) |
11.94 |
19.50% |
8,516 |
0.71% |
1.40% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.27 |
$
0.10 |
$
2.99 |
$
3.09 |
$
(0.10) |
$
(0.27) |
$
(0.37) |
$
13.99 |
28.11% |
$
47,342 |
0.85% |
0.74% |
9/30/20 |
11.06 |
0.10 |
1.18 |
1.28 |
(0.11) |
(0.96) |
(1.07) |
11.27 |
12.10% |
45,358 |
0.84% |
0.93% |
9/30/19 |
12.03 |
0.13 |
0.29 |
0.42 |
(0.11) |
(1.28) |
(1.39) |
11.06 |
5.47% |
48,226 |
0.83% |
1.19% |
9/30/18 |
11.93 |
0.12 |
0.90 |
1.02 |
(0.13) |
(0.79) |
(0.92) |
12.03 |
9.00% |
67,695 |
0.81% |
1.04% |
9/30/17 |
10.41 |
0.15 |
1.81 |
1.96 |
(0.14) |
(0.30) |
(0.44) |
11.93 |
19.40% |
78,580 |
0.81% |
1.36% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.75 |
$
0.08 |
$
3.14 |
$
3.22 |
$
(0.08) |
$
(0.27) |
$
(0.35) |
$
14.62 |
28.00% |
$
160 |
0.95% |
0.62% |
9/30/20 |
11.50 |
0.09 |
1.22 |
1.31 |
(0.10) |
(0.96) |
(1.06) |
11.75 |
11.88% |
182 |
0.94% |
0.82% |
9/30/19 |
12.44 |
0.12 |
0.32 |
0.44 |
(0.10) |
(1.28) |
(1.38) |
11.50 |
5.38% |
652 |
0.93% |
1.08% |
9/30/18 |
12.30 |
0.11 |
0.93 |
1.04 |
(0.11) |
(0.79) |
(0.90) |
12.44 |
8.94% |
738 |
0.91% |
0.95% |
9/30/17 |
10.71 |
0.15 |
1.85 |
2.00 |
(0.11) |
(0.30) |
(0.41) |
12.30 |
19.21% |
1,133 |
0.91% |
1.28% |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.25 |
$
0.07 |
$
3.00 |
$
3.07 |
$
(0.08) |
$
(0.27) |
$
(0.35) |
$
13.97 |
27.91% |
$
24,389 |
1.05% |
0.53% |
9/30/20 |
11.05 |
0.08 |
1.17 |
1.25 |
(0.09) |
(0.96) |
(1.05) |
11.25 |
11.79% |
21,264 |
1.04% |
0.73% |
9/30/19 |
12.01 |
0.10 |
0.31 |
0.41 |
(0.09) |
(1.28) |
(1.37) |
11.05 |
5.30% |
24,458 |
1.03% |
0.98% |
9/30/18 |
11.91 |
0.10 |
0.89 |
0.99 |
(0.10) |
(0.79) |
(0.89) |
12.01 |
8.79% |
28,295 |
1.01% |
0.84% |
9/30/17 |
10.40 |
0.13 |
1.80 |
1.93 |
(0.12) |
(0.30) |
(0.42) |
11.91 |
19.07% |
30,996 |
1.01% |
1.17% |
Class
A |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.04 |
$
0.04 |
$
2.94 |
$
2.98 |
$
(0.05) |
$
(0.27) |
$
(0.32) |
$
13.70 |
27.56% |
$
10,628 |
1.30% |
0.31% |
9/30/20 |
10.86 |
0.05 |
1.15 |
1.20 |
(0.06) |
(0.96) |
(1.02) |
11.04 |
11.53% |
12,086 |
1.29% |
0.48% |
9/30/19 |
11.83 |
0.08 |
0.29 |
0.37 |
(0.06) |
(1.28) |
(1.34) |
10.86 |
5.01% |
12,843 |
1.28% |
0.74% |
9/30/18 |
11.75 |
0.07 |
0.88 |
0.95 |
(0.08) |
(0.79) |
(0.87) |
11.83 |
8.49% |
14,495 |
1.26% |
0.60% |
9/30/17 |
10.26 |
0.10 |
1.79 |
1.89 |
(0.10) |
(0.30) |
(0.40) |
11.75 |
18.88% |
13,096 |
1.26% |
0.90% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
10.94 |
$
0.05 |
$
2.91 |
$
2.96 |
$
(0.07) |
$
(0.27) |
$
(0.34) |
$
13.56 |
27.64% |
$
8,266 |
1.20% |
0.38% |
9/30/20 |
10.77 |
0.06 |
1.15 |
1.21 |
(0.08) |
(0.96) |
(1.04) |
10.94 |
11.68% |
6,418 |
1.19% |
0.58% |
9/30/19 |
11.75 |
0.09 |
0.29 |
0.38 |
(0.08) |
(1.28) |
(1.36) |
10.77 |
5.08% |
6,379 |
1.18% |
0.83% |
9/30/18 |
11.67 |
0.08 |
0.87 |
0.95 |
(0.08) |
(0.79) |
(0.87) |
11.75 |
8.63% |
6,394 |
1.16% |
0.70% |
9/30/17 |
10.22 |
0.11 |
1.78 |
1.89 |
(0.14) |
(0.30) |
(0.44) |
11.67 |
19.02% |
5,268 |
1.16% |
0.99% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
11.07 |
$
0.02 |
$
2.95 |
$
2.97 |
$
(0.04) |
$
(0.27) |
$
(0.31) |
$
13.73 |
27.36% |
$
1,277 |
1.45% |
0.14% |
9/30/20 |
10.88 |
0.03 |
1.16 |
1.19 |
(0.04) |
(0.96) |
(1.00) |
11.07 |
11.41% |
1,219 |
1.44% |
0.33% |
9/30/19 |
11.85 |
0.06 |
0.30 |
0.36 |
(0.05) |
(1.28) |
(1.33) |
10.88 |
4.87% |
1,239 |
1.43% |
0.61% |
9/30/18 |
11.76 |
0.05 |
0.88 |
0.93 |
(0.05) |
(0.79) |
(0.84) |
11.85 |
8.34% |
1,813 |
1.41% |
0.45% |
9/30/17 |
10.30 |
0.08 |
1.79 |
1.87 |
(0.11) |
(0.30) |
(0.41) |
11.76 |
18.69% |
1,144 |
1.41% |
0.74% |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
46% |
38% |
55% |
64% |
35% |
c
|
Per
share amount calculated on the average shares method. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
MASSMUTUAL
DISCIPLINED GROWTH FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets |
Net
investment income (loss) to average daily net assets |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.85 |
$
0.04 |
$
3.27 |
$
3.31 |
$
(0.06) |
$
(0.54) |
$
(0.60) |
$
15.56 |
26.75% |
$
31,388 |
0.57% |
0.26% |
9/30/20 |
11.00 |
0.09 |
3.18 |
3.27 |
(0.11) |
(1.31) |
(1.42) |
12.85 |
32.63% |
35,702 |
0.56% |
0.77% |
9/30/19 |
14.37 |
0.10 |
(0.47) |
(0.37) |
(0.15) |
(2.85) |
(3.00) |
11.00 |
0.99% |
28,367 |
0.55% |
0.89% |
9/30/18 |
13.13 |
0.10 |
2.81 |
2.91 |
(0.12) |
(1.55) |
(1.67) |
14.37 |
23.95% |
30,279 |
0.52% |
0.78% |
9/30/17 |
11.69 |
0.13 |
2.30 |
2.43 |
(0.17) |
(0.82) |
(0.99) |
13.13 |
22.32% |
113,313 |
0.53% |
1.09% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.85 |
$
0.02 |
$
3.29 |
$
3.31 |
$
(0.05) |
$
(0.54) |
$
(0.59) |
$
15.57 |
26.72% |
$
108,948 |
0.67% |
0.15% |
9/30/20 |
11.00 |
0.07 |
3.19 |
3.26 |
(0.10) |
(1.31) |
(1.41) |
12.85 |
32.48% |
101,466 |
0.66% |
0.67% |
9/30/19 |
14.37 |
0.09 |
(0.48) |
(0.39) |
(0.13) |
(2.85) |
(2.98) |
11.00 |
0.85% |
100,651 |
0.65% |
0.79% |
9/30/18 |
13.14 |
0.09 |
2.80 |
2.89 |
(0.11) |
(1.55) |
(1.66) |
14.37 |
23.72% |
112,178 |
0.62% |
0.69% |
9/30/17 |
11.69 |
0.12 |
2.31 |
2.43 |
(0.16) |
(0.82) |
(0.98) |
13.14 |
22.27% |
87,103 |
0.63% |
1.00% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.92 |
$
0.01 |
$
3.30 |
$
3.31 |
$
(0.04) |
$
(0.54) |
$
(0.58) |
$
15.65 |
26.53% |
$
25,505 |
0.77% |
0.05% |
9/30/20 |
11.04 |
0.06 |
3.20 |
3.26 |
(0.07) |
(1.31) |
(1.38) |
12.92 |
32.33% |
25,668 |
0.76% |
0.57% |
9/30/19 |
14.40 |
0.08 |
(0.47) |
(0.39) |
(0.12) |
(2.85) |
(2.97) |
11.04 |
0.79% |
31,895 |
0.75% |
0.71% |
9/30/18 |
13.17 |
0.08 |
2.80 |
2.88 |
(0.10) |
(1.55) |
(1.65) |
14.40 |
23.54% |
74,294 |
0.72% |
0.59% |
9/30/17 |
11.71 |
0.11 |
2.31 |
2.42 |
(0.14) |
(0.82) |
(0.96) |
13.17 |
22.15% |
73,755 |
0.73% |
0.89% |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.10 |
$
(0.01) |
$
3.36 |
$
3.35 |
$
(0.02) |
$
(0.54) |
$
(0.56) |
$
15.89 |
26.46% |
$
36,207 |
0.87% |
(0.05%) |
9/30/20 |
11.19 |
0.05 |
3.25 |
3.30 |
(0.08) |
(1.31) |
(1.39) |
13.10 |
32.19% |
36,957 |
0.86% |
0.47% |
9/30/19 |
14.55 |
0.07 |
(0.47) |
(0.40) |
(0.11) |
(2.85) |
(2.96) |
11.19 |
0.66% |
37,316 |
0.85% |
0.60% |
9/30/18 |
13.28 |
0.07 |
2.83 |
2.90 |
(0.08) |
(1.55) |
(1.63) |
14.55 |
23.51% |
42,622 |
0.82% |
0.49% |
9/30/17 |
11.81 |
0.09 |
2.34 |
2.43 |
(0.14) |
(0.82) |
(0.96) |
13.28 |
21.95% |
41,678 |
0.83% |
0.78% |
Class
A |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.59 |
$
(0.04) |
$
3.22 |
$
3.18 |
$
— |
$
(0.54) |
$
(0.54) |
$
15.23 |
26.12% |
$
26,591 |
1.12% |
(0.30%) |
9/30/20 |
10.80 |
0.02 |
3.13 |
3.15 |
(0.05) |
(1.31) |
(1.36) |
12.59 |
31.87% |
27,988 |
1.11% |
0.22% |
9/30/19 |
14.15 |
0.04 |
(0.47) |
(0.43) |
(0.07) |
(2.85) |
(2.92) |
10.80 |
0.42% |
29,210 |
1.10% |
0.35% |
9/30/18 |
12.95 |
0.03 |
2.77 |
2.80 |
(0.05) |
(1.55) |
(1.60) |
14.15 |
23.22% |
39,399 |
1.07% |
0.24% |
9/30/17 |
11.53 |
0.07 |
2.28 |
2.35 |
(0.11) |
(0.82) |
(0.93) |
12.95 |
21.73% |
36,625 |
1.08% |
0.55% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.45 |
$
(0.03) |
$
3.18 |
$
3.15 |
$
— |
$
(0.54) |
$
(0.54) |
$
15.06 |
26.20% |
$
12,613 |
1.02% |
(0.22%) |
9/30/20 |
10.70 |
0.03 |
3.09 |
3.12 |
(0.06) |
(1.31) |
(1.37) |
12.45 |
31.97% |
28,832 |
1.01% |
0.31% |
9/30/19 |
14.05 |
0.05 |
(0.46) |
(0.41) |
(0.09) |
(2.85) |
(2.94) |
10.70 |
0.59% |
24,049 |
1.00% |
0.45% |
9/30/18 |
12.89 |
0.04 |
2.74 |
2.78 |
(0.07) |
(1.55) |
(1.62) |
14.05 |
23.26% |
31,265 |
0.97% |
0.34% |
9/30/17 |
11.50 |
0.07 |
2.27 |
2.34 |
(0.13) |
(0.82) |
(0.95) |
12.89 |
21.80% |
26,809 |
0.98% |
0.61% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.43 |
$
(0.06) |
$
3.17 |
$
3.11 |
$
— |
$
(0.54) |
$
(0.54) |
$
15.00 |
25.88% |
5,002 |
1.27% |
(0.46%) |
9/30/20 |
10.66 |
0.01 |
3.09 |
3.10 |
(0.02) |
(1.31) |
(1.33) |
12.43 |
31.78% |
5,875 |
1.26% |
0.05% |
9/30/19 |
14.02 |
0.02 |
(0.47) |
(0.45) |
(0.06) |
(2.85) |
(2.91) |
10.66 |
0.23% |
6,015 |
1.25% |
0.20% |
9/30/18 |
12.86 |
0.01 |
2.74 |
2.75 |
(0.04) |
(1.55) |
(1.59) |
14.02 |
23.01% |
7,119 |
1.22% |
0.10% |
9/30/17 |
11.45 |
0.04 |
2.27 |
2.31 |
(0.08) |
(0.82) |
(0.90) |
12.86 |
21.52% |
4,310 |
1.23% |
0.38% |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
110% |
50% |
49% |
73% |
105% |
c
|
Per
share amount calculated on the average shares method. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
MASSMUTUAL
SMALL CAP OPPORTUNITIES FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets |
Net
investment income (loss) to average daily net assets |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.96 |
$
0.06 |
$
6.51 |
$
6.57 |
$
(0.11) |
$
(1.21) |
$
(1.32) |
$
19.21 |
48.95% |
$
85,183 |
0.66% |
0.35% |
9/30/20 |
13.72 |
0.10 |
0.27 |
0.37 |
(0.06) |
(0.07) |
(0.13) |
13.96 |
2.62% |
39,988 |
0.69% |
0.77% |
9/30/19 |
16.47 |
0.11 |
(1.43) |
(1.32) |
(0.07) |
(1.36) |
(1.43) |
13.72 |
(7.01%) |
35,326 |
0.70% |
0.82% |
9/30/18 |
16.41 |
0.11 |
1.96 |
2.07 |
(0.07) |
(1.94) |
(2.01) |
16.47 |
13.93% |
40,439 |
0.69% |
0.73% |
9/30/17 |
13.81 |
0.11 |
3.01 |
3.12 |
(0.18) |
(0.34) |
(0.52) |
16.41 |
23.05% |
15,105 |
0.70% |
0.75% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.93 |
$
0.05 |
$
6.48 |
$
6.53 |
$
(0.09) |
$
(1.21) |
$
(1.30) |
$
19.16 |
48.78% |
$
137,127 |
0.76% |
0.26% |
9/30/20 |
13.69 |
0.09 |
0.27 |
0.36 |
(0.05) |
(0.07) |
(0.12) |
13.93 |
2.56% |
92,440 |
0.79% |
0.68% |
9/30/19 |
16.44 |
0.10 |
(1.43) |
(1.33) |
(0.06) |
(1.36) |
(1.42) |
13.69 |
(7.14%) |
61,826 |
0.80% |
0.71% |
9/30/18 |
16.38 |
0.10 |
1.96 |
2.06 |
(0.06) |
(1.94) |
(2.00) |
16.44 |
13.82% |
77,025 |
0.79% |
0.62% |
9/30/17 |
13.78 |
0.10 |
3.00 |
3.10 |
(0.16) |
(0.34) |
(0.50) |
16.38 |
22.99% |
64,889 |
0.80% |
0.63% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.89 |
$
0.03 |
$
6.48 |
$
6.51 |
$
(0.08) |
$
(1.21) |
$
(1.29) |
$
19.11 |
48.72% |
24,560 |
0.86% |
0.17% |
9/30/20 |
13.66 |
0.08 |
0.25 |
0.33 |
(0.03) |
(0.07) |
(0.10) |
13.89 |
2.37% |
17,146 |
0.89% |
0.58% |
9/30/19 |
16.39 |
0.08 |
(1.41) |
(1.33) |
(0.04) |
(1.36) |
(1.40) |
13.66 |
(7.16%) |
17,073 |
0.90% |
0.61% |
9/30/18 |
16.34 |
0.08 |
1.95 |
2.03 |
(0.04) |
(1.94) |
(1.98) |
16.39 |
13.68% |
18,192 |
0.89% |
0.52% |
9/30/17 |
13.75 |
0.08 |
3.00 |
3.08 |
(0.15) |
(0.34) |
(0.49) |
16.34 |
22.87% |
14,726 |
0.90% |
0.54% |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.80 |
$
0.01 |
$
6.44 |
$
6.45 |
$
(0.07) |
$
(1.21) |
$
(1.28) |
$
18.97 |
48.54% |
$
26,314 |
0.96% |
0.07% |
9/30/20 |
13.57 |
0.06 |
0.26 |
0.32 |
(0.02) |
(0.07) |
(0.09) |
13.80 |
2.27% |
18,422 |
0.99% |
0.48% |
9/30/19 |
16.29 |
0.07 |
(1.41) |
(1.34) |
(0.02) |
(1.36) |
(1.38) |
13.57 |
(7.28%) |
20,377 |
1.00% |
0.51% |
9/30/18 |
16.25 |
0.07 |
1.94 |
2.01 |
(0.03) |
(1.94) |
(1.97) |
16.29 |
13.59% |
26,503 |
0.99% |
0.42% |
9/30/17 |
13.68 |
0.07 |
2.98 |
3.05 |
(0.14) |
(0.34) |
(0.48) |
16.25 |
22.75% |
23,967 |
1.00% |
0.44% |
Class
A |
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.42 |
$
(0.03) |
$
6.25 |
$
6.22 |
$
(0.03) |
$
(1.21) |
$
(1.24) |
$
18.40 |
48.15% |
$
55,207 |
1.21% |
(0.18%) |
9/30/20 |
13.21 |
0.03 |
0.25 |
0.28 |
— |
(0.07) |
(0.07) |
13.42 |
2.07% |
42,491 |
1.24% |
0.22% |
9/30/19 |
15.92 |
0.03 |
(1.38) |
(1.35) |
— |
(1.36) |
(1.36) |
13.21 |
(7.54%) |
50,524 |
1.25% |
0.26% |
9/30/18 |
15.93 |
0.03 |
1.90 |
1.93 |
— |
(1.94) |
(1.94) |
15.92 |
13.34% |
69,157 |
1.24% |
0.17% |
9/30/17 |
13.42 |
0.03 |
2.92 |
2.95 |
(0.10) |
(0.34) |
(0.44) |
15.93 |
22.42% |
73,462 |
1.25% |
0.19% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.34 |
$
(0.02) |
$
6.22 |
$
6.20 |
$
(0.05) |
$
(1.21) |
$
(1.26) |
$
18.28 |
48.31% |
$
15,682 |
1.11% |
(0.09%) |
9/30/20 |
13.12 |
0.04 |
0.25 |
0.29 |
— |
(0.07) |
(0.07) |
13.34 |
2.16% |
9,413 |
1.14% |
0.32% |
9/30/19 |
15.81 |
0.05 |
(1.38) |
(1.33) |
(0.00)d |
(1.36) |
(1.36) |
13.12 |
(7.43%) |
10,591 |
1.15% |
0.36% |
9/30/18 |
15.83 |
0.04 |
1.89 |
1.93 |
(0.01) |
(1.94) |
(1.95) |
15.81 |
13.42% |
11,773 |
1.14% |
0.26% |
9/30/17 |
13.36 |
0.04 |
2.91 |
2.95 |
(0.14) |
(0.34) |
(0.48) |
15.83 |
22.50% |
9,717 |
1.15% |
0.29% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.18 |
$
(0.06) |
$
6.15 |
$
6.09 |
$
— |
$
(1.21) |
$
(1.21) |
$
18.06 |
48.00% |
$
9,695 |
1.36% |
(0.34%) |
9/30/20 |
13.00 |
0.01 |
0.24 |
0.25 |
— |
(0.07) |
(0.07) |
13.18 |
1.87% |
6,048 |
1.39% |
0.07% |
9/30/19 |
15.71 |
0.01 |
(1.36) |
(1.35) |
— |
(1.36) |
(1.36) |
13.00 |
(7.66%) |
8,551 |
1.40% |
0.11% |
9/30/18 |
15.77 |
0.00d |
1.88 |
1.88 |
— |
(1.94) |
(1.94) |
15.71 |
13.14% |
10,564 |
1.39% |
0.02% |
9/30/17 |
13.32 |
0.01 |
2.89 |
2.90 |
(0.11) |
(0.34) |
(0.45) |
15.77 |
22.19% |
9,008 |
1.40% |
0.04% |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
40% |
47% |
34% |
57% |
62% |
c
|
Per
share amount calculated on the average shares method. |
d
|
Amount
is less than $0.005 per share. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
MASSMUTUAL
GLOBAL FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets |
Net
investment income (loss) to average daily net assets |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
15.04 |
$
(0.05) |
$
4.64 |
$
4.59 |
$
— |
$
(0.84) |
$
(0.84) |
$
18.79 |
31.36% |
$
99,959 |
0.84% |
(0.29%) |
9/30/20 |
12.35 |
0.00d |
2.81 |
2.81 |
(0.09) |
(0.03) |
(0.12) |
15.04 |
22.90% |
75,893 |
0.85% |
0.00%e |
9/30/19 |
16.08 |
0.10 |
(0.83) |
(0.73) |
(0.11) |
(2.89) |
(3.00) |
12.35 |
(1.93%) |
70,159 |
0.84% |
0.79% |
9/30/18 |
16.46 |
0.13 |
1.52 |
1.65 |
(0.16) |
(1.87) |
(2.03) |
16.08 |
10.39% |
50,503 |
0.86% |
0.79% |
9/30/17 |
13.47 |
0.12 |
3.43 |
3.55 |
(0.18) |
(0.38) |
(0.56) |
16.46 |
27.53% |
34,308 |
0.86% |
0.78% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
15.05 |
$
(0.07) |
$
4.64 |
$
4.57 |
$
— |
$
(0.84) |
$
(0.84) |
$
18.78 |
31.20% |
$
126,049 |
0.94% |
(0.39%) |
9/30/20 |
12.36 |
(0.01) |
2.81 |
2.80 |
(0.08) |
(0.03) |
(0.11) |
15.05 |
22.77% |
111,038 |
0.95% |
(0.09%) |
9/30/19 |
16.09 |
0.08 |
(0.83) |
(0.75) |
(0.09) |
(2.89) |
(2.98) |
12.36 |
(2.07%) |
98,379 |
0.94% |
0.66% |
9/30/18 |
16.47 |
0.11 |
1.53 |
1.64 |
(0.15) |
(1.87) |
(2.02) |
16.09 |
10.28% |
101,536 |
0.96% |
0.65% |
9/30/17 |
13.46 |
0.08 |
3.48 |
3.56 |
(0.17) |
(0.38) |
(0.55) |
16.47 |
27.55% |
120,521 |
0.96% |
0.54% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
14.91 |
$
(0.08) |
$
4.59 |
$
4.51 |
$
— |
$
(0.84) |
$
(0.84) |
$
18.58 |
31.09% |
$
7,892 |
1.04% |
(0.49%) |
9/30/20 |
12.23 |
(0.03) |
2.80 |
2.77 |
(0.06) |
(0.03) |
(0.09) |
14.91 |
22.75% |
6,166 |
1.05% |
(0.19%) |
9/30/19 |
15.94 |
0.06 |
(0.82) |
(0.76) |
(0.06) |
(2.89) |
(2.95) |
12.23 |
(2.23%) |
6,361 |
1.04% |
0.43% |
9/30/18 |
16.33 |
0.10 |
1.51 |
1.61 |
(0.13) |
(1.87) |
(2.00) |
15.94 |
10.17% |
16,104 |
1.06% |
0.60% |
9/30/17 |
13.35 |
0.07 |
3.44 |
3.51 |
(0.15) |
(0.38) |
(0.53) |
16.33 |
27.37% |
19,086 |
1.06% |
0.46% |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
15.03 |
$
(0.10) |
$
4.64 |
$
4.54 |
$
— |
$
(0.84) |
$
(0.84) |
$
18.73 |
31.03% |
$
88,387 |
1.14% |
(0.59%) |
9/30/20 |
12.34 |
(0.04) |
2.81 |
2.77 |
(0.05) |
(0.03) |
(0.08) |
15.03 |
22.56% |
80,607 |
1.15% |
(0.29%) |
9/30/19 |
16.06 |
0.06 |
(0.83) |
(0.77) |
(0.06) |
(2.89) |
(2.95) |
12.34 |
(2.30%) |
77,097 |
1.14% |
0.45% |
9/30/18 |
16.44 |
0.07 |
1.53 |
1.60 |
(0.11) |
(1.87) |
(1.98) |
16.06 |
10.07% |
90,239 |
1.16% |
0.46% |
9/30/17 |
13.44 |
0.05 |
3.47 |
3.52 |
(0.14) |
(0.38) |
(0.52) |
16.44 |
27.24% |
103,200 |
1.16% |
0.36% |
Class
A |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
14.82 |
$
(0.14) |
$
4.56 |
$
4.42 |
$
— |
$
(0.84) |
$
(0.84) |
$
18.40 |
30.65% |
$
19,415 |
1.39% |
(0.84%) |
9/30/20 |
12.17 |
(0.07) |
2.77 |
2.70 |
(0.02) |
(0.03) |
(0.05) |
14.82 |
22.22% |
22,903 |
1.40% |
(0.55%) |
9/30/19 |
15.87 |
0.03 |
(0.82) |
(0.79) |
(0.02) |
(2.89) |
(2.91) |
12.17 |
(2.48%) |
24,676 |
1.39% |
0.20% |
9/30/18 |
16.27 |
0.03 |
1.51 |
1.54 |
(0.07) |
(1.87) |
(1.94) |
15.87 |
9.74% |
31,725 |
1.41% |
0.21% |
9/30/17 |
13.29 |
0.02 |
3.44 |
3.46 |
(0.10) |
(0.38) |
(0.48) |
16.27 |
26.99% |
30,769 |
1.41% |
0.12% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
14.59 |
$
(0.12) |
$
4.49 |
$
4.37 |
$
— |
$
(0.84) |
$
(0.84) |
$
18.12 |
30.79% |
$
15,975 |
1.29% |
(0.72%) |
9/30/20 |
11.98 |
(0.06) |
2.73 |
2.67 |
(0.03) |
(0.03) |
(0.06) |
14.59 |
22.36% |
8,878 |
1.30% |
(0.45%) |
9/30/19 |
15.71 |
0.04 |
(0.82) |
(0.78) |
(0.06) |
(2.89) |
(2.95) |
11.98 |
(2.45%) |
7,531 |
1.29% |
0.32% |
9/30/18 |
16.13 |
0.04 |
1.51 |
1.55 |
(0.10) |
(1.87) |
(1.97) |
15.71 |
9.90% |
7,790 |
1.31% |
0.27% |
9/30/17 |
13.21 |
0.03 |
3.41 |
3.44 |
(0.14) |
(0.38) |
(0.52) |
16.13 |
27.05% |
5,560 |
1.31% |
0.20% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
14.72 |
$
(0.17) |
$
4.54 |
$
4.37 |
$
— |
$
(0.84) |
$
(0.84) |
$
18.25 |
30.51% |
$
13,541 |
1.54% |
(0.98%) |
9/30/20 |
12.10 |
(0.09) |
2.75 |
2.66 |
(0.01) |
(0.03) |
(0.04) |
14.72 |
21.99% |
9,792 |
1.55% |
(0.69%) |
9/30/19 |
15.80 |
0.01 |
(0.82) |
(0.81) |
— |
(2.89) |
(2.89) |
12.10 |
(2.69%) |
10,226 |
1.54% |
0.06% |
9/30/18 |
16.21 |
0.01 |
1.51 |
1.52 |
(0.06) |
(1.87) |
(1.93) |
15.80 |
9.64% |
11,029 |
1.56% |
0.06% |
9/30/17 |
13.27 |
(0.00)d |
3.42 |
3.42 |
(0.10) |
(0.38) |
(0.48) |
16.21 |
26.73% |
10,696 |
1.56% |
(0.03%) |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
10% |
12% |
32% |
42% |
30% |
c
|
Per
share amount calculated on the average shares method. |
d
|
Amount
is less than $0.005 per share. |
e
|
Amount
is less than 0.005%. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
MASSMUTUAL
INTERNATIONAL EQUITY FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c,j |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets before expense waiver |
Ratio
of expenses to average daily net assets after expense waiversj |
Net
investment income (loss) to average daily net assets |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.08 |
$
0.14 |
$
1.84 |
$
1.98 |
$
(0.04) |
$
(4.94) |
$
(4.98) |
$
10.08 |
17.97% |
$
89,913 |
1.02% |
1.00% |
1.31% |
9/30/20 |
12.01 |
0.03 |
1.54 |
1.57 |
(0.13) |
(0.37) |
(0.50) |
13.08 |
13.17% |
96,308 |
1.02% |
1.00% |
0.26% |
9/30/19 |
12.99 |
0.09 |
(0.49) |
(0.40) |
(0.12) |
(0.46) |
(0.58) |
12.01 |
(2.49%) |
149,979 |
0.93% |
0.92% |
0.81% |
9/30/18 |
13.44 |
0.14 |
(0.42) |
(0.28) |
(0.17) |
— |
(0.17) |
12.99 |
(2.14%) |
293,575 |
0.96% |
0.94% |
1.01% |
9/30/17 |
11.97 |
0.18 |
1.61 |
1.79 |
(0.15) |
(0.17) |
(0.32) |
13.44 |
15.60% |
246,510 |
0.96% |
0.94% |
1.46% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.08 |
$
0.14 |
$
1.83 |
$
1.97 |
$
(0.03) |
$
(4.94) |
$
(4.97) |
$
10.08 |
17.79% |
$
50,688 |
1.12% |
1.10% |
1.27% |
9/30/20 |
12.00 |
0.02 |
1.55 |
1.57 |
(0.12) |
(0.37) |
(0.49) |
13.08 |
13.14% |
61,444 |
1.12% |
1.10% |
0.20% |
9/30/19 |
12.98 |
0.10 |
(0.51) |
(0.41) |
(0.11) |
(0.46) |
(0.57) |
12.00 |
(2.63%) |
94,827 |
1.03% |
1.02% |
0.89% |
9/30/18 |
13.44 |
0.12 |
(0.42) |
(0.30) |
(0.16) |
— |
(0.16) |
12.98 |
(2.32%) |
147,654 |
1.06% |
1.04% |
0.85% |
9/30/17 |
11.97 |
0.17 |
1.61 |
1.78 |
(0.14) |
(0.17) |
(0.31) |
13.44 |
15.47% |
195,316 |
1.06% |
1.04% |
1.38% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.04 |
$
0.12 |
$
1.84 |
$
1.96 |
$
(0.01) |
$
(4.94) |
$
(4.95) |
$
10.05 |
17.72% |
$
3,469 |
1.22% |
1.20% |
1.16% |
9/30/20 |
11.97 |
0.00d |
1.54 |
1.54 |
(0.10) |
(0.37) |
(0.47) |
13.04 |
12.94% |
4,524 |
1.22% |
1.20% |
0.00%e |
9/30/19 |
12.94 |
0.07 |
(0.49) |
(0.42) |
(0.09) |
(0.46) |
(0.55) |
11.97 |
(2.74%) |
9,393 |
1.13% |
1.12% |
0.60% |
9/30/18 |
13.39 |
0.11 |
(0.41) |
(0.30) |
(0.15) |
— |
(0.15) |
12.94 |
(2.33%) |
23,069 |
1.16% |
1.14% |
0.79% |
9/30/17 |
11.93 |
0.15 |
1.61 |
1.76 |
(0.13) |
(0.17) |
(0.30) |
13.39 |
15.33% |
21,422 |
1.16% |
1.14% |
1.25% |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.97 |
$
0.11 |
$
1.82 |
$
1.93 |
$
— |
$
(4.94) |
$
(4.94) |
$
9.96 |
17.59% |
$
2,436 |
1.32% |
1.30% |
1.03% |
9/30/20 |
11.91 |
(0.00)d |
1.52 |
1.52 |
(0.09) |
(0.37) |
(0.46) |
12.97 |
12.81% |
3,565 |
1.32% |
1.30% |
(0.02%) |
9/30/19 |
12.87 |
0.08 |
(0.51) |
(0.43) |
(0.07) |
(0.46) |
(0.53) |
11.91 |
(2.77%) |
5,465 |
1.23% |
1.22% |
0.65% |
9/30/18 |
13.32 |
0.08 |
(0.40) |
(0.32) |
(0.13) |
— |
(0.13) |
12.87 |
(2.49%) |
11,908 |
1.26% |
1.24% |
0.58% |
9/30/17 |
11.87 |
0.15 |
1.58 |
1.73 |
(0.11) |
(0.17) |
(0.28) |
13.32 |
15.19% |
17,968 |
1.26% |
1.24% |
1.22% |
Class
A |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.56 |
$
0.08 |
$
1.75 |
$
1.83 |
$
— |
$
(4.94) |
$
(4.94) |
$
9.45 |
17.30% |
$
13,793 |
1.57% |
1.55% |
0.82% |
9/30/20 |
11.54 |
(0.03) |
1.48 |
1.45 |
(0.06) |
(0.37) |
(0.43) |
12.56 |
12.61% |
18,670 |
1.57% |
1.55% |
(0.22%) |
9/30/19 |
12.49 |
0.05 |
(0.50) |
(0.45) |
(0.04) |
(0.46) |
(0.50) |
11.54 |
(3.09%) |
22,004 |
1.48% |
1.47% |
0.46% |
9/30/18 |
12.93 |
0.05 |
(0.39) |
(0.34) |
(0.10) |
— |
(0.10) |
12.49 |
(2.70%) |
30,719 |
1.51% |
1.49% |
0.41% |
9/30/17 |
11.52 |
0.10 |
1.56 |
1.66 |
(0.08) |
(0.17) |
(0.25) |
12.93 |
14.95% |
39,746 |
1.51% |
1.49% |
0.90% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.45 |
$
0.09 |
$
1.73 |
$
1.82 |
$
— |
$
(4.94) |
$
(4.94) |
$
9.33 |
17.41% |
$
1,639 |
1.47% |
1.45% |
0.88% |
9/30/20 |
11.43 |
(0.04) |
1.48 |
1.44 |
(0.05) |
(0.37) |
(0.42) |
12.45 |
12.70% |
1,951 |
1.47% |
1.45% |
(0.31%) |
9/30/19 |
12.38 |
0.05 |
(0.48) |
(0.43) |
(0.06) |
(0.46) |
(0.52) |
11.43 |
(2.95%) |
4,895 |
1.38% |
1.37% |
0.48% |
9/30/18 |
12.84 |
0.07 |
(0.40) |
(0.33) |
(0.13) |
— |
(0.13) |
12.38 |
(2.63%) |
10,673 |
1.41% |
1.39% |
0.54% |
9/30/17 |
11.47 |
0.13 |
1.53 |
1.66 |
(0.12) |
(0.17) |
(0.29) |
12.84 |
15.10% |
10,932 |
1.41% |
1.39% |
1.10% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
12.38 |
$
0.07 |
$
1.71 |
$
1.78 |
$
— |
$
(4.94) |
$
(4.94) |
$
9.22 |
17.07% |
$
2,294 |
1.72% |
1.70% |
0.74% |
9/30/20 |
11.38 |
(0.06) |
1.47 |
1.41 |
(0.04) |
(0.37) |
(0.41) |
12.38 |
12.42% |
2,427 |
1.72% |
1.70% |
(0.49%) |
9/30/19 |
12.34 |
0.02 |
(0.48) |
(0.46) |
(0.04) |
(0.46) |
(0.50) |
11.38 |
(3.24%) |
5,415 |
1.63% |
1.62% |
0.21% |
9/30/18 |
12.79 |
0.03 |
(0.39) |
(0.36) |
(0.09) |
— |
(0.09) |
12.34 |
(2.88%) |
9,024 |
1.66% |
1.64% |
0.25% |
9/30/17 |
11.43 |
0.09 |
1.54 |
1.63 |
(0.10) |
(0.17) |
(0.27) |
12.79 |
14.77% |
9,045 |
1.66% |
1.64% |
0.77% |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
30% |
106% |
52% |
70% |
44% |
c
|
Per
share amount calculated on the average shares method. |
d
|
Amount
is less than $0.005 per share. |
e
|
Amount
is less than 0.005%. |
j
|
Computed
after giving effect to an agreement by MML Advisers to waive certain fees and expenses of the Fund. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
MASSMUTUAL
STRATEGIC EMERGING MARKETS FUND
|
|
Income
(loss) from investment operations |
Less
distributions to shareholders |
|
|
Ratios
/ Supplemental Data |
|
Net
asset value, beginning of the period |
Net
investment income (loss)c,j |
Net
realized and unrealized gain (loss) on investments |
Total
income (loss) from investment operations |
From
net investment income |
From
net realized gains |
Total
distributions |
Net
asset value, end of the period |
Total
returnl,m |
Net
assets, end of the period (000’s) |
Ratio
of expenses to average daily net assets before expense waivers |
Ratio
of expenses to average daily net assets after expense waiversj |
Net
investment income (loss) to average daily net assets |
Class
I |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.23 |
$
0.04 |
$
1.88 |
$
1.92 |
$
— |
$
(0.22) |
$
(0.22) |
$
14.93 |
14.53% |
$
156,998 |
1.22% |
1.15% |
0.25% |
9/30/20 |
13.02 |
0.02 |
1.33 |
1.35 |
(0.08) |
(1.06) |
(1.14) |
13.23 |
10.33% |
169,366 |
1.27% |
1.15% |
0.12% |
9/30/19 |
12.75 |
0.07 |
0.28 |
0.35 |
(0.08) |
— |
(0.08) |
13.02 |
2.85% |
141,988 |
1.21% |
1.10% |
0.55% |
9/30/18 |
12.88 |
0.08 |
(0.04) |
0.04 |
(0.17) |
— |
(0.17) |
12.75 |
0.31% |
216,085 |
1.27% |
1.05% |
0.62% |
9/30/17 |
10.79 |
0.07 |
2.14 |
2.21 |
(0.12) |
— |
(0.12) |
12.88 |
20.85% |
236,991 |
1.28% |
1.05% |
0.65% |
Class
R5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.43 |
$
0.03 |
$
1.90 |
$
1.93 |
$
— |
$
(0.22) |
$
(0.22) |
$
15.14 |
14.38% |
$
2,703 |
1.32% |
1.25% |
0.16% |
9/30/20 |
13.20 |
0.00d |
1.35 |
1.35 |
(0.06) |
(1.06) |
(1.12) |
13.43 |
10.23% |
3,165 |
1.37% |
1.25% |
0.02% |
9/30/19 |
12.92 |
0.06 |
0.29 |
0.35 |
(0.07) |
— |
(0.07) |
13.20 |
2.78% |
4,295 |
1.31% |
1.22% |
0.45% |
9/30/18 |
13.05 |
0.07 |
(0.04) |
0.03 |
(0.16) |
— |
(0.16) |
12.92 |
0.21% |
4,047 |
1.37% |
1.15% |
0.53% |
9/30/17 |
10.94 |
0.06 |
2.16 |
2.22 |
(0.11) |
— |
(0.11) |
13.05 |
20.59% |
3,887 |
1.38% |
1.15% |
0.54% |
Service
Class |
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.25 |
$
0.01 |
$
1.89 |
$
1.90 |
$
— |
$
(0.22) |
$
(0.22) |
$
14.93 |
14.35% |
$
2,216 |
1.42% |
1.35% |
0.05% |
9/30/20 |
13.05 |
(0.01) |
1.33 |
1.32 |
(0.06) |
(1.06) |
(1.12) |
13.25 |
10.12% |
2,473 |
1.47% |
1.35% |
(0.05%) |
9/30/19 |
12.73 |
0.05 |
0.29 |
0.34 |
(0.02) |
— |
(0.02) |
13.05 |
2.71% |
419 |
1.41% |
1.31% |
0.42% |
9/30/18 |
12.85 |
0.05 |
(0.03) |
0.02 |
(0.14) |
— |
(0.14) |
12.73 |
0.10% |
230 |
1.47% |
1.25% |
0.41% |
9/30/17 |
10.78 |
(0.02) |
2.19 |
2.17 |
(0.10) |
— |
(0.10) |
12.85 |
20.41% |
434 |
1.48% |
1.25% |
(0.20%) |
Administrative
Class |
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.29 |
$
(0.01) |
$
1.90 |
$
1.89 |
$
— |
$
(0.22) |
$
(0.22) |
$
14.96 |
14.23% |
$
1,017 |
1.52% |
1.45% |
(0.03%) |
9/30/20 |
13.08 |
(0.02) |
1.33 |
1.31 |
(0.04) |
(1.06) |
(1.10) |
13.29 |
9.96% |
989 |
1.57% |
1.45% |
(0.16%) |
9/30/19 |
12.78 |
0.03 |
0.30 |
0.33 |
(0.03) |
— |
(0.03) |
13.08 |
2.61% |
927 |
1.51% |
1.41% |
0.24% |
9/30/18 |
12.91 |
0.04 |
(0.03) |
0.01 |
(0.14) |
— |
(0.14) |
12.78 |
0.02% |
879 |
1.57% |
1.35% |
0.33% |
9/30/17 |
10.84 |
0.05 |
2.13 |
2.18 |
(0.11) |
— |
(0.11) |
12.91 |
20.35% |
1,565 |
1.58% |
1.35% |
0.41% |
Class
A |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.17 |
$
(0.06) |
$
1.88 |
$
1.82 |
$
— |
$
(0.22) |
$
(0.22) |
$
14.77 |
13.83% |
$
635 |
1.77% |
1.70% |
(0.36%) |
9/30/20 |
12.98 |
(0.05) |
1.32 |
1.27 |
(0.02) |
(1.06) |
(1.08) |
13.17 |
9.75% |
2,029 |
1.82% |
1.70% |
(0.42%) |
9/30/19 |
12.73 |
0.01 |
0.28 |
0.29 |
(0.04) |
— |
(0.04) |
12.98 |
2.32% |
885 |
1.76% |
1.68% |
0.09% |
9/30/18 |
12.88 |
0.04 |
(0.07) |
(0.03) |
(0.12) |
— |
(0.12) |
12.73 |
(0.23%) |
386 |
1.82% |
1.60% |
0.30% |
9/30/17 |
10.74 |
0.02 |
2.14 |
2.16 |
(0.02) |
— |
(0.02) |
12.88 |
20.18% |
118 |
1.83% |
1.60% |
0.14% |
Class
R4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.10 |
$
(0.05) |
$
1.88 |
$
1.83 |
$
— |
$
(0.22) |
$
(0.22) |
$
14.71 |
13.98% |
$
443 |
1.67% |
1.60% |
(0.32%) |
9/30/20 |
12.90 |
(0.04) |
1.32 |
1.28 |
(0.02) |
(1.06) |
(1.08) |
13.10 |
9.84% |
1,237 |
1.72% |
1.60% |
(0.30%) |
9/30/19 |
12.63 |
0.01 |
0.29 |
0.30 |
(0.03) |
— |
(0.03) |
12.90 |
2.38% |
1,337 |
1.66% |
1.57% |
0.05% |
9/30/18 |
12.76 |
0.03 |
(0.04) |
(0.01) |
(0.12) |
— |
(0.12) |
12.63 |
(0.10%) |
1,295 |
1.72% |
1.50% |
0.22% |
9/30/17 |
10.72 |
0.03 |
2.11 |
2.14 |
(0.10) |
— |
(0.10) |
12.76 |
20.23% |
1,019 |
1.73% |
1.50% |
0.24% |
Class
R3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
$
13.05 |
$
(0.06) |
$
1.85 |
$
1.79 |
$
— |
$
(0.22) |
$
(0.22) |
$
14.62 |
13.72% |
$
1,120 |
1.92% |
1.85% |
(0.42%) |
9/30/20 |
12.87 |
(0.07) |
1.31 |
1.24 |
(0.00)d |
(1.06) |
(1.06) |
13.05 |
9.57% |
992 |
1.97% |
1.85% |
(0.58%) |
9/30/19 |
12.60 |
(0.02) |
0.29 |
0.27 |
— |
— |
— |
12.87 |
2.14% |
750 |
1.91% |
1.81% |
(0.15%) |
9/30/18 |
12.73 |
(0.01) |
(0.04) |
(0.05) |
(0.08) |
— |
(0.08) |
12.60 |
(0.39%) |
761 |
1.97% |
1.75% |
(0.09%) |
9/30/17 |
10.70 |
(0.01) |
2.12 |
2.11 |
(0.08) |
— |
(0.08) |
12.73 |
19.88% |
821 |
1.98% |
1.75% |
(0.07%) |
|
Year
ended September 30 |
|
2021 |
2020 |
2019 |
2018 |
2017 |
Portfolio
turnover rate |
48% |
71% |
32% |
38% |
51% |
c
|
Per
share amount calculated on the average shares method. |
d
|
Amount
is less than $0.005 per share. |
j
|
Computed
after giving effect to an agreement by MML Advisers to waive certain fees and expenses of the Fund. |
l
|
Employee
retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the periods presented if they reflected these charges.
|
m
|
Total
return excludes sales charges, if any, and would be lower for the period presented if it reflected these charges. |
Index Descriptions
The Bloomberg U.S. Aggregate
Bond Index measures the performance of investment grade, U.S. dollar-denominated, fixed-rate taxable bond market securities, including
Treasuries, government-related and corporate securities, mortgage-backed securities (MBS) (agency fixed-rate and hybrid ARM pass-throughs),
asset-backed securities (ABS), and commercial mortgage-backed securities (CMBS). It rolls up into other Bloomberg flagship indexes, such
as the multi-currency Global Aggregate Index and the U.S. Universal Index, which includes high yield and emerging markets debt. The Index
does not reflect any deduction for fees, expenses, or taxes and cannot be purchased directly by investors.
The Bloomberg U.S. Treasury
Inflation Protected Securities (TIPS) Index (Series-L) measures the performance of rules-based, market value-weighted inflation-protected
securities issued by the U.S. Treasury. It is a subset of the Global Inflation-Linked Index (Series-L). The Index does not reflect
any deduction for fees, expenses, or taxes and cannot be purchased directly by investors.
The Consumer Price Index for All Urban Consumers
(CPI-U) is a monthly measure of the average change over time in the prices paid by consumers for a market basket of consumer goods
and services. The CPI-U is based on the spending patterns of urban consumers. Index data are available for the U.S. City Average (or national
average), for various geographic areas (regions and metropolitan areas), for national population size classes of urban areas, and for
cross-classifications of regions and size classes. Individual indexes are available for more than 200 items (e.g., apples, men’s
shirts, airline fares), and over 120 different combinations of items (e.g., fruits and vegetables, food at home, food and beverages, and
all items). The Index does not reflect any deduction for fees, expenses, or taxes and cannot be purchased directly by investors.
The Custom Balanced Index
comprises the S&P 500 and Bloomberg U.S. Aggregate Bond Indexes. The weightings of each index are 65% and 35%, respectively. The Index
does not reflect any deduction for fees, expenses, or taxes and cannot be purchased directly by investors.
The FTSE 3 Month US T Bill Index measures
the performance of the last three three-month Treasury bill month-end rates. The Index does not reflect any deduction for fees, expenses,
or taxes and cannot be purchased directly by investors.
The Lipper Balanced Fund Index
is an unmanaged, equally weighted index of the 30 largest mutual funds within the Lipper Balanced Category. The Index does not reflect
any deduction for taxes and cannot be purchased directly by investors.
The MSCI All Country World Index (ACWI)
measures the performance of the large- and mid-cap segments of all country markets. It is free float-adjusted market-capitalization weighted.
The Index does not reflect any deduction for fees or expenses and cannot be purchased directly by investors.
The MSCI All Country World Index (ACWI) ex
USA measures the performance of the large- and mid-cap segments of the particular regions, excluding U.S. equity securities, including
developed and emerging markets. It is free float-adjusted market-capitalization weighted. The Index does not reflect any deduction for
fees or expenses and cannot be purchased directly by investors.
The MSCI EAFE Index measures the performance
of the large- and mid-cap segments of developed markets, excluding the U.S. and Canada equity securities. It is free float-adjusted market-capitalization
weighted. The Index does not reflect any deduction for fees or expenses and cannot be purchased directly by investors.
The MSCI Emerging Markets
Index measures the performance of the large- and mid-cap segments of emerging market equity securities. It is free float-adjusted
market-capitalization weighted. The Index does not reflect any deduction for fees or expenses and cannot be purchased directly by investors.
The Russell 1000 Growth Index measures
the performance of the large-cap growth segment of U.S. equity securities. It includes the Russell 1000 Index companies with higher
price-to-book ratios and higher forecasted growth values. It is market-capitalization weighted. The Index does not reflect any deduction
for fees, expenses, or taxes and cannot be purchased directly by investors.
The Russell 1000 Value Index measures the performance
of the large-cap value segment of U.S. equity securities. It includes the Russell 1000 Index companies with lower price-to-book ratios
and lower expected growth values. It is market-capitalization weighted. The Index does not reflect any deduction for fees, expenses, or
taxes and cannot be purchased directly by investors.
The Russell 2000 Index measures the
performance of the small-cap segment of the U.S. equity universe. It is a subset of the Russell 3000®
Index and includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
The Index does not reflect any deduction for fees, expenses, or taxes and cannot be purchased directly by investors.
The S&P 500 Index measures the
performance of 500 widely held stocks in the U.S. equity market. Standard and Poor’s chooses member companies for the index based
on market size, liquidity, and industry group representation. Included are the stocks of industrial, financial, utility, and transportation
companies. Since mid-1989, this composition has been more flexible and the number of issues in each sector has varied. It is market capitalization-weighted.
The Index does not reflect any deduction for fees, expenses, or taxes and cannot be purchased directly by investors.
MASSMUTUAL FUNDS
1295 State Street
Springfield, Massachusetts 01111-0001
Learning More About the Funds
You can learn more about the Funds by reading the Funds’ Annual
and Semiannual Reports and the SAI. You may obtain free copies of this information from
the Funds or from the SEC using one or more of the methods set forth below. In the Annual and Semiannual Reports, you will find a discussion
of market conditions and investment strategies that significantly affected each Fund’s performance during the period covered by
the Report and a listing of each Fund’s portfolio securities as of the end of such period. The SAI provides additional information
about the Funds and will provide you with more detail regarding the organization and operation of the Funds, including their investment
strategies. The SAI is incorporated by reference into this Prospectus and is therefore legally considered a part of this Prospectus.
How to Obtain Information
From the Funds: You
may request information about the Funds free of charge (including the Annual/Semiannual Reports and the SAI) or make shareholder inquiries
by calling1-888-309-3539 or by writing the Funds, c/o Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield,
Massachusetts 01111-0001, Attention: Investment Management Solutions. You
may also obtain copies of the Annual/Semiannual Reports and the SAI free of charge at https://www.massmutual.com/funds.
From the SEC: Information about the Funds (including
the Annual/Semiannual Reports and the SAI) is available on the SEC’s EDGAR database on its Internet site at http://www.sec.gov.
You can also get copies of this information, upon payment of a copying fee, by electronic request at publicinfo@sec.gov.
When obtaining information about the Funds from the SEC, you may find it useful
to reference the
Funds’ SEC file number: 811-08690.
MASSMUTUAL
FUNDS
This Prospectus describes the following
Funds:
Fund Name
|
|
|
Class I
|
|
|
Class R5
|
|
|
Service Class
|
|
|
Administrative Class
|
|
|
Class R4
|
|
|
Class A
|
|
|
Class R3
|
|
|
Class Y
|
|
|
Class L
|
|
|
Class C
|
|
MassMutual Short-
Duration Bond Fund |
|
|
MSTZX
|
|
|
MSTDX
|
|
|
MSBYX
|
|
|
MSTLX
|
|
|
MPSDX
|
|
|
MSHAX
|
|
|
MSDNX
|
|
|
BXDYX
|
|
|
BXDLX
|
|
|
BXDCX
|
|
MassMutual High
Yield Fund |
|
|
MPHZX
|
|
|
MPHSX
|
|
|
DLHYX
|
|
|
MPHLX
|
|
|
MPHRX
|
|
|
MPHAX
|
|
|
MPHNX
|
|
|
BXHYX
|
|
|
|
|
|
BXHCX
|
|
The Securities
and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any statement
to the contrary is a crime.
PROSPECTUS
February 1, 2022
Table
Of Contents
|
|
|
Page |
|
About the Funds |
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44
|
|
|
|
|
|
|
|
48
|
|
|
|
|
|
|
|
50
|
|
|
|
|
|
|
|
54
|
|
|
|
|
|
|
|
54
|
|
|
|
|
|
|
|
55
|
|
|
|
|
|
|
|
56
|
|
|
|
|
|
|
|
59
|
|
|
|
|
|
|
|
62
|
|
|
|
|
|
|
|
A-1
|
|
|
MassMutual
Short-Duration Bond Fund (formerly known as
MassMutual Premier Short-Duration Bond Fund)
INVESTMENT OBJECTIVE
This Fund seeks to achieve
a high total rate of return primarily from current income while minimizing fluctuations in capital values by investing primarily in a
diversified portfolio of short-term investment grade fixed income securities.
FEES AND EXPENSES OF THE FUND
This
table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions
and other fees to financial intermediaries which are not reflected in the tables and examples below. For
Class A shares, you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. For Class L shares, you may qualify for sales charge discounts if you and your family invest,
or agree to invest in the future, at least $250,000 in the Fund. More information about these and other discounts is available in the
section titled Sales Charges by Class
beginning on page 44 of the Fund’s Prospectus or from your financial professional.
Shareholder
Fees (fees paid
directly from your investment)
|
|
|
Class I |
|
|
Class R5 |
|
|
Service Class |
|
|
Admini- strative Class |
|
|
Class R4 |
|
|
Class A |
|
|
Class R3 |
|
|
Class Y |
|
|
Class L(1)
|
|
|
Class C |
|
Maximum Sales Charge (Load) Imposed on Purchases
(as a % of offering prince) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
2.50%
|
|
|
None
|
|
|
None
|
|
|
2.00%
|
|
|
None
|
|
Maximum Deferred Sales Charge
(Load) (as a % of the lower of the original offering price or redemption proceeds) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Maximum Contingent Deferred
Sales Charge (Load)(CDSC) (as a % of the lower of the original offering price or redemption proceeds) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.50%(2)
|
|
|
0.50%(3)
|
|
(1)
(2)
(3)
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I |
|
|
Class R5 |
|
|
Service Class |
|
|
Admini- strative Class |
|
|
Class R4 |
|
|
Class A |
|
|
Class R3 |
|
|
Class Y |
|
|
Class L |
|
|
Class C |
|
Management
Fees |
|
|
0.32%
|
|
|
0.32%
|
|
|
0.32%
|
|
|
0.32%
|
|
|
0.32%
|
|
|
0.32%
|
|
|
0.32%
|
|
|
0.32%
|
|
|
0.32%
|
|
|
0.32%
|
|
Distribution and Service (Rule 12b-1) Fees
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
|
0.00%
|
|
|
0.25%
|
|
|
0.50%
|
|
Other
Expenses(1) |
|
|
0.09%
|
|
|
0.19%
|
|
|
0.29%
|
|
|
0.39%
|
|
|
0.29%
|
|
|
0.39%
|
|
|
0.29%
|
|
|
0.19%
|
|
|
0.14%
|
|
|
0.14%
|
|
Total Annual
Fund Operating Expenses |
|
|
0.41%
|
|
|
0.51%
|
|
|
0.61%
|
|
|
0.71%
|
|
|
0.86%
|
|
|
0.96%
|
|
|
1.11%
|
|
|
0.51%
|
|
|
0.71%
|
|
|
0.96%
|
|
Expense
Reimbursement |
|
|
-0.01%
|
|
|
0.00%
|
|
|
0.00%
|
|
|
0.00%
|
|
|
0.00%
|
|
|
0.00%
|
|
|
0.00%
|
|
|
-0.11%
|
|
|
-0.06%
|
|
|
-0.06%
|
|
Total
Annual Fund Operating Expenses after Expense Reimbursement(2)
|
|
|
0.40%
|
|
|
0.51%
|
|
|
0.61%
|
|
|
0.71%
|
|
|
0.86%
|
|
|
0.96%
|
|
|
1.11%
|
|
|
0.40%
|
|
|
0.65%
|
|
|
0.90%
|
|
(1)
(2)
Example
This example is
intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. It assumes that you invest
$10,000 in each share class of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods.
For Class A and Class L shares, the example includes the initial sales charge. The example also assumes that your investment
earns a 5% return each year and that the Fund’s operating expenses are exactly as described in the preceding table. Although your
actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
41 |
|
|
|
|
$ |
131 |
|
|
|
|
$ |
229 |
|
|
|
|
$ |
517 |
|
|
Class R5 |
|
|
|
$ |
52 |
|
|
|
|
$ |
164 |
|
|
|
|
$ |
285 |
|
|
|
|
$ |
640 |
|
|
Service Class |
|
|
|
$ |
62 |
|
|
|
|
$ |
195 |
|
|
|
|
$ |
340 |
|
|
|
|
$ |
762 |
|
|
Administrative Class |
|
|
|
$ |
73 |
|
|
|
|
$ |
227 |
|
|
|
|
$ |
395 |
|
|
|
|
$ |
883 |
|
|
Class R4 |
|
|
|
$ |
88 |
|
|
|
|
$ |
274 |
|
|
|
|
$ |
477 |
|
|
|
|
$ |
1,061 |
|
|
Class A |
|
|
|
$ |
345 |
|
|
|
|
$ |
548 |
|
|
|
|
$ |
768 |
|
|
|
|
$ |
1,399 |
|
|
Class R3 |
|
|
|
$ |
113 |
|
|
|
|
$ |
353 |
|
|
|
|
$ |
612 |
|
|
|
|
$ |
1,352
|
|
|
Class Y |
|
|
|
$ |
41 |
|
|
|
|
$ |
150 |
|
|
|
|
$ |
270 |
|
|
|
|
$ |
619 |
|
|
Class L |
|
|
|
$ |
265 |
|
|
|
|
$ |
414 |
|
|
|
|
$ |
577 |
|
|
|
|
$ |
1,049 |
|
|
Class C |
|
|
|
$ |
142 |
|
|
|
|
$ |
298 |
|
|
|
|
$ |
521 |
|
|
|
|
$ |
1,162 |
|
|
You
would pay the following expenses if you did not redeem your shares:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class Y |
|
|
|
$ |
265
|
|
|
|
|
$ |
414
|
|
|
|
|
$ |
577
|
|
|
|
|
$ |
1,049 |
|
|
Class L |
|
|
|
$ |
92
|
|
|
|
|
$ |
298
|
|
|
|
|
$ |
521
|
|
|
|
|
$ |
1,162 |
|
|
Portfolio Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are
not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal
year, the Fund’s portfolio turnover rate was 72%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment
Strategies
Under normal
circumstances, the Fund invests at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in investment
grade fixed income securities (rated Baa3 or higher by Moody’s, BBB- or higher by Standard & Poor’s or the equivalent
by any nationally recognized statistical rating organization, or, if unrated, determined to be of comparable quality by the Fund’s
subadviser, Barings LLC (“Barings”),
or sub-subadviser, Baring International Investment
Limited
(“BIIL”)). These typically include U.S. dollar-denominated corporate obligations, securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, U.S. and foreign issuer dollar-denominated bonds including, but not limited to, corporate
obligations, government and agency issues, private placement bonds, securities subject to resale pursuant to Rule 144A, and mortgage-backed
and other asset-backed securities, including collateralized bond and loan obligations.
The Fund may also
invest in below investment grade debt securities (“junk” or “high yield” bonds), including securities in default,
and including bank loans; normally, 10% or less of the Fund’s total assets will be invested in below investment grade debt securities.
In the event that a security is downgraded after its purchase by the Fund, the Fund may continue to hold the security if Barings or BIIL
considers that doing so would be consistent with the Fund’s investment objective. The Fund may invest up to 15% of its total assets
in securities that are not denominated in U.S. dollars including, but not limited to, corporate obligations, government and agency issues,
private placement bonds, and mortgage-backed and other asset-backed securities, including collateralized bond and loan obligations. Although
the Fund’s investment in non-U.S. dollar denominated assets may be on a currency hedged or unhedged basis, under normal market conditions,
the Fund seeks to hedge substantially all of its exposure to non-U.S. currencies. The Fund may also invest in non-dollar denominated high
yield bonds, including bank loans, and may invest in securities subject to legal restrictions on resale, some of which may be subject
to resale pursuant to Rule 144A.
In pursuing its investment objective,
the Fund may (but is not obligated to) use a wide variety of exchange-traded and over-the-counter derivatives, including, but not limited
to, futures contracts, foreign currency futures and forward contracts, including derivatives thereof (for hedging purposes, to adjust
various portfolio characteristics, including the duration (interest rate volatility) of the Fund’s portfolio, or as a substitute
for direct investments); interest rate swaps (for hedging purposes or as a substitute for direct investments or to gain market exposure);
total return swaps (for hedging purposes or as a substitute for direct investments); and credit default swaps (for hedging purposes or
as a substitute for direct investments). The Fund may invest in common stocks, exchange-traded funds (“ETFs”), or other equity
securities and derivatives thereof for hedging purposes
or to enhance total return. Use of derivatives by the Fund may create investment leverage.
The Fund may invest in money market securities,
including commercial paper. The Fund may enter into repurchase agreement transactions. The Fund may at times have significant exposure
to one or more industries or sectors. The Fund may hold a portion of its assets in cash or cash equivalents. The Fund may purchase and
sell securities on a when-issued, delayed delivery, to-be-announced, or forward commitment basis, and may enter into dollar roll or reverse
repurchase agreement transactions.
The Fund may invest in (i) securities
denominated in currencies of emerging market countries, (ii) fixed income securities or debt instruments issued by emerging market
entities or sovereign nations and/or (iii) debt instruments denominated in or based on the currencies, interest rates, or issues
of emerging market countries. Emerging market countries are defined to include any country that did not become a member of the Organization
for Economic Cooperation and Development (O.E.C.D.) prior to 1975 and Turkey.
The Fund may invest
in other investment companies, including investment companies that are advised by the Fund’s investment adviser, subadviser, sub-subadviser,
or its affiliates, or by unaffiliated parties.
The Fund seeks
to maintain a dollar-weighted average duration of less than three years; Barings or BIIL may increase or decrease its duration in
response to changes in interest rates and other factors. Duration measures the price sensitivity of a bond to changes in interest rates.
Duration is the dollar weighted average time to maturity of a bond utilizing the present value of all future cash flows.
Barings or BIIL
generally selects the Fund’s investments based on its analysis of opportunities and risks of various securities and market sectors.
Barings or BIIL may choose to sell securities with deteriorating credit or limited upside potential compared to other available securities.
The Fund expects that it will engage
in active and frequent trading and so will typically have a relatively high portfolio turnover rate.
Principal Risks
The following are the Principal Risks
of the Fund. The value of your investment in the Fund could
go down as well as up. You
can lose money by investing in the Fund. References in this section to the Fund’s subadviser may include any sub-subadvisers
as applicable. Certain risks relating to instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market
conditions, and other factors. You should read all of the risk information presented below carefully, because any one or more of these
risks may result in losses to the Fund.
Fixed
Income Securities Risk The values of fixed income securities typically will decline during
periods of rising interest rates, and can also decline in response to changes in the financial condition of the issuer, borrower, counterparty,
or underlying collateral assets, or changes in market, economic, industry, political, regulatory, public health, and other conditions
affecting a particular type of security or issuer or fixed income securities generally. Certain events, such as market or economic developments,
regulatory or government actions, natural disasters, pandemics, terrorist attacks, war, and other geopolitical events can have a dramatic
adverse effect on the debt market and the overall liquidity of the market for fixed income securities. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell securities at times when the Fund would otherwise not do so,
and potentially at unfavorable prices. Certain securities may be difficult to value during such periods. Fixed income securities are subject
to interest rate risk (the risk that the value of a fixed income security will fall when interest rates rise), extension risk (the risk
that the average life of a security will be extended through a slowing of principal payments), prepayment risk (the risk that a security
will be prepaid and the Fund will be required to reinvest at a less favorable rate), duration risk (the risk that longer-term securities
may be more sensitive to interest rate changes), and credit risk.
Mortgage-
and Asset-Backed Securities Risk Investments in mortgage- and asset-backed securities subject
the Fund to credit risk, interest rate risk, extension risk, and prepayment risk, among other risks. Mortgage-backed and asset-backed
securities not issued by a government agency generally involve greater credit risk than securities issued by government agencies. Payment
of principal and interest generally depends on the cash flows generated by the underlying assets
and the terms of the security. The types of mortgages
(for example, residential or commercial mortgages) underlying securities held by the Fund may differ and be affected differently by market
factors. Investments that receive only the interest portion or the principal portion of payments on the underlying assets may be highly
volatile. Litigation with respect to the representations and warranties given in connection with the issuance of mortgage-backed securities
can be an important consideration in investing in such securities, and the outcome of any such litigation could significantly impact the
value of the Fund’s mortgage-backed investments.
Bank
Loans Risk Many of the risks associated with bank loans are similar to the risks of investing
in below investment grade debt securities. Changes in the financial condition of the borrower or economic conditions or other circumstances
may reduce the capacity of the borrower to make principal and interest payments on such instruments and may lead to defaults. Senior secured
bank loans are typically supported by collateral; however the value of the collateral may be insufficient to cover the amount owed to
the Fund, or the Fund may be prevented or delayed from realizing on the collateral. Some loans may be unsecured; unsecured loans generally
present a greater risk of loss to the Fund if the issuer defaults. If the Fund relies on a third party to administer a loan, the Fund
is subject to the risk that the third party will fail to perform its obligations. In addition, if the Fund holds only a participation
interest in a loan made by a third party, the Fund’s receipt of payments on the loan will depend on the third party’s willingness
and ability to make those payments to the Fund. The settlement time for certain loans is longer than the settlement time for many other
types of investments, and the Fund may not receive the payment for a loan sold by it until well after the sale; that cash would be unavailable
for payment of redemption proceeds or for reinvestment. Interests in some bank loans may not be readily marketable and may be subject
to restrictions on resale. In some cases, negotiations involved in disposing of indebtedness may require weeks to complete. Consequently,
some indebtedness may be difficult or impossible to dispose of readily at what the Fund believes to be a fair price. Some loans may not
be considered “securities” for certain purposes under the federal securities laws, and purchasers, such as the Fund, therefore
may not be entitled to rely on the anti-fraud protections of the federal securities laws.
Below Investment
Grade Debt Securities Risk Below investment grade debt securities, commonly known as
“junk” or “high yield” bonds, have speculative characteristics and involve greater volatility of price and yield,
greater risk of loss of principal and interest, and generally reflect a greater possibility of an adverse change in financial condition
that could affect an issuer’s ability to honor its obligations.
Credit
Risk Credit risk is the risk that an issuer, guarantor, or liquidity provider of a fixed
income security held by the Fund may be unable or unwilling, or may be perceived (whether by market participants, ratings agencies, pricing
services or otherwise) as unable or unwilling, to make timely principal and/or interest payments, or to otherwise honor its obligations.
The Fund may also be exposed to the credit risk of its counterparty to repurchase agreements, reverse repurchase agreements, swap transactions,
and other derivatives transactions, and to the counterparty’s ability or willingness to perform in accordance with the terms of
the transaction. The value of such transactions to the Fund will depend on the willingness and ability of the counterparty to perform
its obligations, including among other things the obligation to return collateral or margin to the Fund. If a counterparty becomes bankrupt
or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Fund may experience significant
delays in obtaining any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. The Fund may obtain
only a limited recovery or may obtain no recovery in such circumstances.
Derivatives
Risk Derivatives can be highly volatile and involve risks different from, and potentially
greater than, direct investments, including risks of imperfect correlation between the value of derivatives and underlying assets, counterparty
default, potential losses that partially or completely offset gains, and illiquidity. Derivatives can create investment leverage. Losses
from derivatives can be substantially greater than the derivatives’ original cost and can sometimes be unlimited. If the value of
a derivative does not correlate well with the particular market or asset class the derivative is designed to provide exposure to, the
derivative may not have the effect or benefit anticipated. Derivatives can also reduce the opportunity for gains or result in losses by
offsetting positive returns in other investments. Many derivatives are traded
in the over-the-counter market and not on exchanges.
Foreign
Investment Risk; Emerging Markets Risk; Currency Risk Investments in securities of foreign
issuers, securities of companies with significant foreign exposure, and foreign currencies can involve additional risks relating to market,
industry, political, regulatory, public health, and other conditions. Political, social, diplomatic, and economic developments, U.S. and
foreign government action such as the imposition of currency or capital blockages, controls, or tariffs, economic and trade sanctions
or embargoes, security suspensions, entering or exiting trade or other intergovernmental agreements, or the expropriation or nationalization
of assets in a particular country, can cause dramatic declines in certain or all securities with exposure to that country and other countries.
In the event of nationalization, expropriation, or other confiscation, the Fund could lose its entire foreign investment in a particular
country. There may be quotas or other limits on the ability of the Fund (or clients of the Fund’s investment adviser or subadviser)
to invest or maintain investments in securities of issuers in certain countries. Enforcing legal rights can be more difficult, costly,
and limited in certain foreign countries, and can be particularly difficult against foreign governments. Because non-U.S. securities are
normally denominated and traded in currencies other than the U.S. dollar, the value of the Fund’s assets may be affected favorably
or unfavorably by changes in currency exchange rates, exchange control regulations, and restrictions or prohibitions on the repatriation
of non-U.S. currencies. Income and gains with respect to investments in certain countries may be subject to withholding and other taxes.
There may be less information publicly available about a non-U.S. company than about a U.S. company, and many non-U.S. companies are not
subject to accounting, auditing, and financial reporting standards, regulatory framework and practices comparable to those in the U.S.
The securities of some non-U.S. companies, especially those in emerging markets, are less liquid and at times more volatile than securities
of comparable U.S. companies. Emerging markets securities are subject to greater risks than securities issued in developed foreign markets,
including less liquidity, less stringent investor protection and disclosure standards, greater price volatility, higher relative rates
of inflation, greater political, economic, and social instability, greater custody and operational risks, and greater volatility in currency
exchange rates, and are more
susceptible to environmental problems. Many emerging
market countries are highly reliant on international trade and exports, including the export of commodities. Their economies may be significantly
impacted by fluctuations in commodity prices and the global demand for certain commodities. In addition, many emerging market countries
with less established health care systems have experienced outbreaks of pandemics or contagious diseases from time to time. Frontier markets,
a subset of emerging markets, generally have smaller economies and less mature capital markets than emerging markets. As a result, the
risks of investing in emerging market countries are magnified in frontier market countries. Frontier markets are more susceptible to having
abrupt changes in currency values, less mature markets and settlement practices, and lower trading volumes that could lead to greater
price volatility and illiquidity. Non-U.S. transaction costs, such as brokerage commissions and custody costs, may be higher than in the
United States. In addition, foreign markets can react differently to market, economic, industry, political, regulatory, geopolitical,
public health, and other conditions than the U.S. market.
Cash
Position Risk If the Fund holds a significant portion of its assets in cash or cash equivalents,
its investment returns may be adversely affected and the Fund may not achieve its investment objective.
Defaulted
and Distressed Securities Risk Because the issuer of such securities is in default and
is likely to be in distressed financial condition, repayment of defaulted securities and obligations of distressed issuers (including
insolvent issuers or issuers in payment or covenant default, in workout or restructuring, or in bankruptcy or insolvency proceedings)
is uncertain. To the extent the Fund is invested in distressed securities, its ability to achieve current income for its shareholders
may be diminished.
Dollar
Roll and Reverse Repurchase Agreement Transaction Risk These transactions generally create
leverage and subject the Fund to the credit risk of the counterparty.
Frequent
Trading/Portfolio Turnover Risk Portfolio turnover generally involves some expense to
the Fund and may result in the realization of taxable capital gains (including short-term gains). The trading costs and tax effects associated
with portfolio turnover may adversely affect the Fund’s performance.
Hedging Risk The
Fund’s attempts at hedging and taking long and short positions in currencies may not be successful and could cause the Fund to lose
money or fail to get the benefit of a gain on a hedged position. If expected changes to securities prices, interest rates, currency values,
and exchange rates, or the creditworthiness of an issuer are not accurately predicted, the Fund could be in a worse position than if it
had not entered into such transactions.
Inflation
Risk The value of assets or income from the Fund’s investments will be less in
the future as inflation decreases the value of money. As inflation increases, the value of the Fund’s assets can decline as can
the value of the Fund’s distributions.
Leveraging
Risk Instruments and transactions including derivatives, dollar roll, and reverse repurchase
agreement transactions, that create leverage may cause the value of an investment in the Fund to be more volatile, could result in larger
losses than if they were not used, and tend to compound the effects of other risks.
LIBOR
Risk Certain instruments in which the Fund may invest rely in some fashion upon the London-Interbank
Offered Rate (“LIBOR”). The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced plans
to phase out the use of LIBOR by the end of 2021. There remains uncertainty regarding the future utilization of LIBOR, including an extension
by the ICE Benchmark Administration to postpone certain aspects of the LIBOR transition to June 2023, and the nature of any replacement
rate, and any potential effects of the transition away from LIBOR on the Fund or on certain instruments in which the Fund invests are
not known. The transition process may involve, among other things, increased volatility or illiquidity in markets for instruments that
currently rely on LIBOR. Uncertainty and volatility arising from the transition may result in a reduction in the value of certain LIBOR-based
instruments held by the Fund or reduce the effectiveness of related transactions such as hedges. Any such effects of the transition away
from LIBOR, as well as other unforeseen effects, could result in losses to the Fund.
Liquidity
Risk Certain securities may be difficult (or impossible) to sell or certain positions
may be difficult to close out at a desirable time and price, and the Fund may be required to hold an illiquid investment that is declining
in value, or it may be required to sell certain illiquid investments at a
price or time that is not advantageous in order to
meet redemptions or other cash needs. Some securities may be subject to restrictions on resale. There can be no assurance that there will
be a liquid market for instruments held by the Fund at any time. The Fund may not receive the proceeds from the sale of certain investments
for an extended period.
Management
Risk The Fund relies on the manager’s investment analysis and its selection of
investments to achieve its investment objective. There can be no assurance that the Fund will achieve the intended results and the Fund
may incur significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply
and unpredictably, as a result of unfavorable market-induced changes affecting particular industries, sectors, or issuers. Stock and bond
markets can decline significantly in response to issuer, market, economic, industry, political, regulatory, geopolitical, public health,
and other conditions, as well as investor perceptions of these conditions. The Fund is subject to risks affecting issuers, such as management
performance, financial leverage, industry problems, and reduced demand for goods or services.
Reinvestment
Risk. Income from the Fund’s portfolio will decline if and when the Fund invests the
proceeds from matured, traded, or called debt obligations at market interest rates that are below the portfolio’s current earnings
rate. A decline in income could affect the Fund’s overall return.
Repurchase
Agreement Risk These transactions must be fully collateralized, but involve credit risk
to a Fund if the other party should default on its obligation and the Fund is delayed or prevented from recovering the collateral.
Restricted
Securities Risk The Fund may hold securities that are restricted as to resale under the
U.S. federal securities laws, such as securities in certain privately held companies. Such securities may be highly illiquid and their
values may experience significant volatility. Restricted securities may be difficult to value.
Risk
of Investment in Other Funds or Pools The Fund is indirectly exposed to all of the risks
of the underlying funds, including ETFs, in which it invests, including the risk that the underlying funds will not perform as expected.
ETFs are subject to additional risks, including secondary market trading risks and the risk that an ETF’s shares may trade
above or below net asset value.
The Fund indirectly pays a portion of the expenses incurred by the underlying funds.
Sector
Risk The Fund may allocate more of its assets to particular industries or to particular
economic, market, or industry sectors than to others. This could increase the volatility of the Fund’s portfolio, and the Fund’s
performance may be more susceptible to developments affecting issuers in those industries or sectors than if the Fund invested more broadly.
Sovereign
Debt Obligations Risk Investments in debt securities issued by governments or by government
agencies and instrumentalities involve the risk that the governmental entities responsible for repayment may be unable or unwilling to
pay interest and repay principal when due. Many sovereign debt obligations may be rated below investment grade (“junk” or
“high yield” bonds). Any restructuring of a sovereign debt obligation held by the Fund will likely have a significant adverse
effect on the value of the obligation. In the event of default of sovereign debt, the Fund may be unable to pursue legal action against
the sovereign issuer or to realize on collateral securing the debt.
U.S.
Government Securities Risk Obligations of certain U.S. Government agencies and instrumentalities
are not backed by the full faith and credit of the U.S. Government, and there can be no assurance that the U.S. Government would provide
financial support to such agencies and instrumentalities.
Valuation
Risk The Fund is subject to the risk of mispricing or improper valuation of its investments,
in particular to the extent that its securities are fair valued.
When-Issued,
Delayed Delivery, TBA, and Forward Commitment Transaction Risk These transactions may
create leverage and involve a risk of loss if the value of the securities declines prior to settlement.
Performance Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Class R5 shares. The table shows how the Fund’s average annual returns
for 1, 5, and 10 years compare with those of a broad measure of market performance. Performance for Class R4
shares
of the Fund for periods prior to its inception date (04/01/14) and performance for Class Y, Class L, and Class C shares
of the Fund for periods prior to their inception date (12/13/21) is based on the performance of Class R5 shares, adjusted for Class R4,
Class L, and Class C shares to reflect Class R4, Class L, and Class C expenses, respectively. Performance
for Class A, Class L, and Class C shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. More
up-to-date performance information is available at
https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual
Performance
Class R5
Shares
|
Highest
Quarter: |
|
|
2Q ‘20,
|
|
|
4.36%
|
|
|
Lowest
Quarter: |
|
|
1Q ‘20,
|
|
|
-6.84%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax
returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who
hold Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Class R5 only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for the periods ended
December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
Five Years |
|
|
Ten Years |
|
|
Since Inception (12/13/
2021) |
|
|
Class R5
|
|
|
|
Return
Before Taxes |
|
|
1.93%
|
|
|
2.59%
|
|
|
2.22%
|
|
|
|
|
|
|
|
|
|
Return
After Taxes on Distributions |
|
|
1.10%
|
|
|
1.27%
|
|
|
1.06%
|
|
|
|
|
|
|
|
|
|
Return After Taxes on Distributions and Sales of Fund Shares
|
|
|
1.15%
|
|
|
1.42%
|
|
|
1.20%
|
|
|
|
|
|
Class I
|
|
|
|
Return
Before Taxes |
|
|
2.07%
|
|
|
2.70%
|
|
|
2.34%
|
|
|
|
|
|
Service
Class |
|
|
|
Return
Before Taxes |
|
|
1.84%
|
|
|
2.47%
|
|
|
2.11%
|
|
|
|
|
|
Admini-strative
Class |
|
|
|
Return
Before Taxes |
|
|
1.79%
|
|
|
2.38%
|
|
|
2.03%
|
|
|
|
|
|
Class R4
|
|
|
|
Return
Before Taxes |
|
|
1.70%
|
|
|
2.25%
|
|
|
1.87%
|
|
|
|
|
|
Class A
|
|
|
|
Return
Before Taxes |
|
|
-0.98%
|
|
|
1.63%
|
|
|
1.53%
|
|
|
|
|
|
Class R3
|
|
|
|
Return
Before Taxes |
|
|
1.43%
|
|
|
1.97%
|
|
|
1.58%
|
|
|
|
|
|
Class Y
|
|
|
|
Return
Before Taxes |
|
|
1.94%
|
|
|
2.60%
|
|
|
2.22%
|
|
|
-0.34%
|
|
|
Class L
|
|
|
|
Return
Before Taxes |
|
|
1.81%
|
|
|
2.46%
|
|
|
2.08%
|
|
|
0.78%
|
|
|
Class C
|
|
|
|
Return
Before Taxes |
|
|
1.55%
|
|
|
2.21%
|
|
|
1.83%
|
|
|
-9.98%
|
|
|
Bloomberg U.S. 1-3 Year Government Bond Index (reflects
no deduction for fees, expenses, or taxes)
|
|
|
-0.60%
|
|
|
1.62%
|
|
|
1.10%
|
|
|
|
|
MANAGEMENT
Investment
Adviser: MML Investment Advisers, LLC (“MML Advisers”)
Subadviser(s):
Barings LLC (“Barings”)
Sub-subadviser(s):
Baring International Investment Limited (“BIIL”)
Portfolio Manager(s):
Yulia
Alekseeva, CFA is a Managing Director, the Head of Securitized Credit Research, and
a portfolio manager for Barings’ Investment Grade Fixed Income Group. She has managed the Fund since December 2020.
Stephen
Ehrenberg, CFA is a Managing Director and portfolio manager for Barings’ Investment
Grade Fixed Income Group. He has managed the Fund since November 2019.
Natalia
Krol is a Managing Director and portfolio manager for Barings’ Emerging Markets Blended
Total Return strategies. She has managed the Fund since May 2021.
Omotunde
Lawal, CFA is a Managing Director and the Head of, and a portfolio manager for, Barings’
Emerging Markets Corporate Debt Group. She has managed the Fund since May 2021.
Charles
Sanford is a Managing Director and the Head of, and a portfolio manager for, Barings’
Investment Grade Fixed Income Group. He has managed the Fund since December 2020. He previously managed the Fund from June 2006
to November 2017.
Douglas
Trevallion, II, CFA is a Managing Director, the Head of Global Securitized and Liquid
Products, and a portfolio manager for Barings’ Investment Grade Fixed Income Group. He has managed the Fund since June 2018.
He previously managed the Fund from October 2008 to October 2017.
PURCHASE AND SALE OF FUND SHARES
Shares of the Fund are generally
available through distribution channels, such as broker-dealers or financial institutions, and to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request, telephone, or internet
(available to certain customers).
Purchase Minimums*
|
|
|
Class Y |
|
|
Class L |
|
|
Class C |
|
Initial Investment |
|
|
|
$ |
100,000 |
|
|
|
|
$ |
1,000 |
|
|
|
|
$ |
1,000 |
|
|
Subsequent Investment |
|
|
|
$ |
250 |
|
|
|
|
$ |
250 |
|
|
|
|
$ |
250 |
|
|
*
The Fund reserves the right to change or waive the investment minimums. For retirement plans, the
investment minimum is $250 for each of the initial investment and subsequent investments.
TAX INFORMATION
The Fund intends
to make distributions that may be taxed as ordinary income, qualified dividend income, or capital gains, unless you are an investor eligible
for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through
a broker-dealer or other financial intermediary, the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers
or its affiliates, or others for the sale of Fund shares or continuing shareholder services provided by the intermediary. These payments
may create a conflict of interest by influencing the broker-dealer or other intermediary to recommend the Fund over another investment.
You should contact your intermediary to obtain more information about the compensation it may receive in connection with your investment.
MassMutual
High Yield Fund (formerly known as
MassMutual Premier High Yield Fund)
INVESTMENT OBJECTIVE
This Fund seeks to achieve
a high level of total return, with an emphasis on current income, by investing primarily in high yield debt and related securities.
FEES AND EXPENSES OF THE FUND
This
table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay brokerage commissions
and other fees to financial intermediaries which are not reflected in the tables and examples below. For
Class A shares, you may qualify for sales charge discounts if you invest, or agree to invest in the future, at least $25,000
in MassMutual funds. More information about these and other discounts is available in the section titled Sales
Charges by Class beginning on page 44 of the Fund’s Prospectus or
from your financial professional.
Shareholder
Fees (fees paid
directly from your investment)
|
|
|
Class I |
|
|
Class R5 |
|
|
Service Class |
|
|
Admini- strative Class |
|
|
Class R4 |
|
|
Class A |
|
|
Class R3 |
|
|
Class Y |
|
|
Class C |
|
Maximum Sales Charge (Load) Imposed on Purchases
(as a % of offering prince) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
5.50%
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Maximum Deferred Sales Charge (Load) (as a
% of the lower of the original offering price or redemption proceeds) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
Maximum Contingent Deferred
Sales Charge (Load) (CDSC) (as a % of the lower of the original offering price or redemption proceeds) |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
1.00%(1)
|
|
(1)
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Class I |
|
|
Class R5 |
|
|
Service Class |
|
|
Admini- strative Class |
|
|
Class R4 |
|
|
Class A |
|
|
Class R3 |
|
|
Class Y |
|
|
Class C |
|
Management
Fees |
|
|
0.47%
|
|
|
0.47%
|
|
|
0.47%
|
|
|
0.47%
|
|
|
0.47%
|
|
|
0.47%
|
|
|
0.47%
|
|
|
0.47%
|
|
|
0.47%
|
|
Distribution
and Service (Rule 12b-1) Fees |
|
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
|
0.25%
|
|
|
0.25%
|
|
|
0.50%
|
|
|
None
|
|
|
1.00%
|
|
Other
Expenses(1) |
|
|
0.07%
|
|
|
0.17%
|
|
|
0.27%
|
|
|
0.37%
|
|
|
0.27%
|
|
|
0.37%
|
|
|
0.27%
|
|
|
0.12%
|
|
|
0.07%
|
|
Total Annual Fund Operating Expenses |
|
|
0.54%
|
|
|
0.64%
|
|
|
0.74%
|
|
|
0.84%
|
|
|
0.99%
|
|
|
1.09%
|
|
|
1.24%
|
|
|
0.59%
|
|
|
1.54%
|
|
(1)
Example
This
example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. It assumes
that you invest $10,000 in each share class of the Fund for the time periods indicated and then redeem all of your shares at the end of
those periods. For
Class A shares,
the example includes the initial sales charge. The example also assumes that your investment earns a 5% return each year and that the
Fund’s operating expenses are exactly as described in the preceding table. Although your actual costs may be higher or lower, based
on these assumptions your costs would be:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class I |
|
|
|
$ |
55 |
|
|
|
|
$ |
173 |
|
|
|
|
$ |
302 |
|
|
|
|
$ |
677 |
|
|
Class R5 |
|
|
|
$ |
65 |
|
|
|
|
$ |
205 |
|
|
|
|
$ |
357 |
|
|
|
|
$ |
798 |
|
|
Service Class |
|
|
|
$ |
76 |
|
|
|
|
$ |
237 |
|
|
|
|
$ |
411 |
|
|
|
|
$ |
918
|
|
|
Administrative Class |
|
|
|
$ |
86 |
|
|
|
|
$ |
268 |
|
|
|
|
$ |
466 |
|
|
|
|
$ |
1,037 |
|
|
Class R4 |
|
|
|
$ |
101 |
|
|
|
|
$ |
315 |
|
|
|
|
$ |
547 |
|
|
|
|
$ |
1,213
|
|
|
Class A |
|
|
|
$ |
655 |
|
|
|
|
$ |
878 |
|
|
|
|
$ |
1,118 |
|
|
|
|
$ |
1,806 |
|
|
Class R3 |
|
|
|
$ |
126 |
|
|
|
|
$ |
393 |
|
|
|
|
$ |
681 |
|
|
|
|
$ |
1,500 |
|
|
Class Y |
|
|
|
$ |
60
|
|
|
|
|
$ |
189
|
|
|
|
|
$ |
329
|
|
|
|
|
$ |
738
|
|
|
Class C |
|
|
|
$ |
257
|
|
|
|
|
$ |
486
|
|
|
|
|
$ |
839
|
|
|
|
|
$ |
1,834 |
|
|
You
would pay the following expenses if you did not redeem your shares:
|
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
Class C |
|
|
|
$ |
157
|
|
|
|
|
$ |
486
|
|
|
|
|
$ |
839
|
|
|
|
|
$ |
1,834 |
|
|
Portfolio Turnover
The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are
not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal
year, the Fund’s portfolio turnover rate was 68%
of the average value of its portfolio.
INVESTMENTS, RISKS, AND PERFORMANCE
Principal Investment
Strategies
The Fund invests
primarily in lower rated U.S. debt securities (“junk” or “high yield” bonds), including securities in default.
Debt securities may include, for example, corporate bonds, mortgage-backed and asset-backed securities, and obligations of the U.S. Government
or its agencies or instrumentalities. Under normal circumstances, the Fund invests at least 80% of its net assets (plus the amount of
any borrowings for investment purposes) in lower rated fixed income securities (rated below Baa3 by Moody’s, below BBB- by Standard
& Poor’s or the equivalent by any nationally recognized statistical rating organization (using the lower rating) or, if unrated,
determined to be of below investment grade quality by the Fund’s subadviser, Barings
LLC (“Barings”),
or sub-subadviser, Baring International Investment Limited
(“BIIL”)). The Fund may also invest in convertible securities, preferred stocks, warrants,
bank loans, and other fixed income
securities, including Rule 144A securities, of both U.S. and foreign issuers. Currently, Barings or BIIL does not expect that the
Fund will invest more than 20% of its total assets in bank loans. The Fund may invest up to 15% of its total assets in securities that
are not denominated in U.S. dollars including, but not limited to, corporate bonds, government and agency issues, Rule 144A securities,
convertible securities, bank loans, mortgage-backed, and asset-backed securities.
In pursuing its investment objective,
the Fund may (but is not obligated to) use a wide variety of exchange-traded and over-the-counter derivatives, including futures contracts
(for hedging purposes, to adjust various portfolio characteristics, including the duration (interest rate volatility) of the Fund’s
portfolio, or as a substitute for direct investments); interest rate swaps (for hedging purposes or as a substitute for direct investments);
total return swaps (for hedging purposes); and credit default swaps (for hedging purposes, to adjust various portfolio characteristics,
including the duration (interest rate volatility) of the Fund’s portfolio, or as a substitute for direct investments). Use of derivatives
by the Fund may create investment leverage.
The Fund may enter into repurchase
agreement transactions. The Fund may at times have significant exposure to one or more industries or sectors. The Fund may hold a portion
of its assets in cash or cash equivalents. The Fund may enter into reverse repurchase agreement transactions. Under normal market conditions,
the Fund expects to have a dollar-weighted average portfolio maturity ranging from 4 to 10 years. The Fund’s portfolio may
include securities with maturities outside this range, and the range may change from time to time.
In selecting the
Fund’s investments, Barings or BIIL employs a bottom-up, fundamental approach to its credit analysis, which focuses first on a specific
issuer’s financial strength, among other things, before considering trends or macro economic factors. Barings or BIIL prefers companies
that it believes possess one or more of the following characteristics: strong business position, ability to generate free cash flow to
repay debt, favorable capital structure, high level of fixed assets, conservative accounting, and respected management or equity sponsor(s)
(such management and sponsors would have a good reputation and/or have had prior positive relations with Barings or BIIL).
The Fund expects that it will engage in active and frequent
trading and so will typically have a relatively high portfolio turnover rate.
Principal Risks
The following
are the Principal Risks of the Fund. The value of your investment in the Fund could go down as well as up. You
can lose money by investing in the Fund. References in this section to the Fund’s subadviser may include any sub-subadvisers
as applicable. Certain risks relating to instruments and strategies used in the management of the Fund are placed first. The significance
of any specific risk to an investment in the Fund will vary over time, depending on the composition of the Fund’s portfolio, market
conditions, and other factors. You should read all of the risk information presented below carefully, because any one or more of these
risks may result in losses to the Fund.
Fixed
Income Securities Risk The values of fixed income securities typically will decline during
periods of rising interest rates, and can also decline in response to changes in the financial condition of the issuer, borrower, counterparty,
or underlying collateral assets, or changes in market, economic, industry, political, regulatory, public health, and other conditions
affecting a particular type of security or issuer or fixed income securities generally. Certain events, such as market or economic developments,
regulatory or government actions, natural disasters, pandemics, terrorist attacks, war, and other geopolitical events can have a dramatic
adverse effect on the debt market and the overall liquidity of the market for fixed income securities. During those periods, the Fund
may experience high levels of shareholder redemptions, and may have to sell securities at times when the Fund would otherwise not do so,
and potentially at unfavorable prices. Certain securities may be difficult to value during such periods. Fixed income securities are subject
to interest rate risk (the risk that the value of a fixed income security will fall when interest rates rise), extension risk (the risk
that the average life of a security will be extended through a slowing of principal payments), prepayment risk (the risk that a security
will be prepaid and the Fund will be required to reinvest at a less favorable rate), duration risk (the risk that longer-term securities
may be more sensitive to interest rate changes), and credit risk.
Below
Investment Grade Debt Securities Risk Below investment grade debt securities, commonly known
as “junk” or “high yield” bonds, have speculative characteristics and involve greater
volatility of price and yield, greater risk of loss
of principal and interest, and generally reflect a greater possibility of an adverse change in financial condition that could affect an
issuer’s ability to honor its obligations.
Bank
Loans Risk Many of the risks associated with bank loans are similar to the risks of investing
in below investment grade debt securities. Changes in the financial condition of the borrower or economic conditions or other circumstances
may reduce the capacity of the borrower to make principal and interest payments on such instruments and may lead to defaults. Senior secured
bank loans are typically supported by collateral; however the value of the collateral may be insufficient to cover the amount owed to
the Fund, or the Fund may be prevented or delayed from realizing on the collateral. Some loans may be unsecured; unsecured loans generally
present a greater risk of loss to the Fund if the issuer defaults. If the Fund relies on a third party to administer a loan, the Fund
is subject to the risk that the third party will fail to perform its obligations. In addition, if the Fund holds only a participation
interest in a loan made by a third party, the Fund’s receipt of payments on the loan will depend on the third party’s willingness
and ability to make those payments to the Fund. The settlement time for certain loans is longer than the settlement time for many other
types of investments, and the Fund may not receive the payment for a loan sold by it until well after the sale; that cash would be unavailable
for payment of redemption proceeds or for reinvestment. Interests in some bank loans may not be readily marketable and may be subject
to restrictions on resale. In some cases, negotiations involved in disposing of indebtedness may require weeks to complete. Consequently,
some indebtedness may be difficult or impossible to dispose of readily at what the Fund believes to be a fair price. Some loans may not
be considered “securities” for certain purposes under the federal securities laws, and purchasers, such as the Fund, therefore
may not be entitled to rely on the anti-fraud protections of the federal securities laws.
Credit
Risk Credit risk is the risk that an issuer, guarantor, or liquidity provider of a fixed
income security held by the Fund may be unable or unwilling, or may be perceived (whether by market participants, ratings agencies, pricing
services or otherwise) as unable or unwilling, to make timely principal and/or interest payments, or to otherwise honor its obligations.
The Fund may also be exposed to the credit risk of its counterparty to
repurchase agreements, reverse
repurchase agreements, swap transactions, and other derivatives transactions, and to the counterparty’s ability or willingness to
perform in accordance with the terms of the transaction. The value of such transactions to the Fund will depend on the willingness and
ability of the counterparty to perform its obligations, including among other things the obligation to return collateral or margin to
the Fund. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial
difficulties, the Fund may experience significant delays in obtaining any recovery under the derivative contract in a bankruptcy or other
reorganization proceeding. The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.
Derivatives
Risk Derivatives can be highly volatile and involve risks different from, and potentially
greater than, direct investments, including risks of imperfect correlation between the value of derivatives and underlying assets,
counterparty default, potential losses that partially or completely offset gains, and illiquidity. Derivatives can create investment leverage.
Losses from derivatives can be substantially greater than the derivatives’ original cost and can sometimes be unlimited. If the
value of a derivative does not correlate well with the particular market or asset class the derivative is designed to provide exposure
to, the derivative may not have the effect or benefit anticipated. Derivatives can also reduce the opportunity for gains or result in
losses by offsetting positive returns in other investments. Many derivatives are traded in the over-the-counter market and not on exchanges.
Foreign
Investment Risk; Emerging Markets Risk; Currency Risk Investments in securities of foreign
issuers, securities of companies with significant foreign exposure, and foreign currencies can involve additional risks relating to market,
industry, political, regulatory, public health, and other conditions. Political, social, diplomatic, and economic developments, U.S. and
foreign government action such as the imposition of currency or capital blockages, controls, or tariffs, economic and trade sanctions
or embargoes, security suspensions, entering or exiting trade or other intergovernmental agreements, or the expropriation or nationalization
of assets in a particular country, can cause dramatic declines in certain or all securities with exposure to that country and other countries.
In the event of nationalization,
expropriation, or other confiscation, the Fund could
lose its entire foreign investment in a particular country. There may be quotas or other limits on the ability of the Fund (or clients
of the Fund’s investment adviser or subadviser) to invest or maintain investments in securities of issuers in certain countries.
Enforcing legal rights can be more difficult, costly, and limited in certain foreign countries, and can be particularly difficult against
foreign governments. Because non-U.S. securities are normally denominated and traded in currencies other than the U.S. dollar, the value
of the Fund’s assets may be affected favorably or unfavorably by changes in currency exchange rates, exchange control regulations,
and restrictions or prohibitions on the repatriation of non-U.S. currencies. Income and gains with respect to investments in certain countries
may be subject to withholding and other taxes. There may be less information publicly available about a non-U.S. company than about a
U.S. company, and many non-U.S. companies are not subject to accounting, auditing, and financial reporting standards, regulatory framework
and practices comparable to those in the U.S. The securities of some non-U.S. companies, especially those in emerging markets, are less
liquid and at times more volatile than securities of comparable U.S. companies. Emerging markets securities are subject to greater risks
than securities issued in developed foreign markets, including less liquidity, less stringent investor protection and disclosure standards,
greater price volatility, higher relative rates of inflation, greater political, economic, and social instability, greater custody and
operational risks, and greater volatility in currency exchange rates, and are more susceptible to environmental problems. Many emerging
market countries are highly reliant on international trade and exports, including the export of commodities. Their economies may be significantly
impacted by fluctuations in commodity prices and the global demand for certain commodities. In addition, many emerging market countries
with less established health care systems have experienced outbreaks of pandemics or contagious diseases from time to time. Frontier markets,
a subset of emerging markets, generally have smaller economies and less mature capital markets than emerging markets. As a result, the
risks of investing in emerging market countries are magnified in frontier market countries. Frontier markets are more susceptible to having
abrupt changes in currency values, less mature markets and settlement practices, and lower trading volumes that could lead to greater
price volatility and
illiquidity. Non-U.S. transaction costs, such as brokerage
commissions and custody costs, may be higher than in the United States. In addition, foreign markets can react differently to market,
economic, industry, political, regulatory, geopolitical, public health, and other conditions than the U.S. market.
Mortgage-
and Asset-Backed Securities Risk Investments in mortgage- and asset-backed securities subject
the Fund to credit risk, interest rate risk, extension risk, and prepayment risk, among other risks. Mortgage-backed and asset-backed
securities not issued by a government agency generally involve greater credit risk than securities issued by government agencies. Payment
of principal and interest generally depends on the cash flows generated by the underlying assets and the terms of the security. The types
of mortgages (for example, residential or commercial mortgages) underlying securities held by the Fund may differ and be affected differently
by market factors. Investments that receive only the interest portion or the principal portion of payments on the underlying assets may
be highly volatile. Litigation with respect to the representations and warranties given in connection with the issuance of mortgage-backed
securities can be an important consideration in investing in such securities, and the outcome of any such litigation could significantly
impact the value of the Fund’s mortgage-backed investments.
Cash
Position Risk If the Fund holds a significant portion of its assets in cash or cash equivalents,
its investment returns may be adversely affected and the Fund may not achieve its investment objective.
Convertible
Securities Risk Convertible securities are subject to the risks of both debt instruments and equity
securities. The price of a convertible security may change in response to changes in price of the underlying equity security, the credit
quality of the issuer, and interest rates. In general, the values of convertible securities tend to decline as interest rates rise and
to rise when interest rates fall. A convertible security generally has less potential for gain or loss than the underlying equity security.
Defaulted
and Distressed Securities Risk Because the issuer of such securities is in default and is likely
to be in distressed financial condition, repayment of defaulted securities and obligations of distressed issuers (including insolvent
issuers or issuers in payment or covenant default, in workout or restructuring, or in bankruptcy or insolvency proceedings) is uncertain.
To the extent the Fund
is invested in distressed securities,
its ability to achieve current income for its shareholders may be diminished.
Frequent
Trading/Portfolio Turnover Risk Portfolio turnover generally involves some expense to the Fund
and may result in the realization of taxable capital gains (including short-term gains). The trading costs and tax effects associated
with portfolio turnover may adversely affect the Fund’s performance.
Hedging
Risk The Fund’s attempts at hedging and taking long and short positions in currencies
may not be successful and could cause the Fund to lose money or fail to get the benefit of a gain on a hedged position. If expected changes
to securities prices, interest rates, currency values, and exchange rates, or the creditworthiness of an issuer are not accurately predicted,
the Fund could be in a worse position than if it had not entered into such transactions.
Inflation
Risk The value of assets or income from the Fund’s investments will be less in the future
as inflation decreases the value of money. As inflation increases, the value of the Fund’s assets can decline as can the value of
the Fund’s distributions.
Leveraging
Risk Instruments and transactions, including derivatives and reverse repurchase agreement transactions,
that create leverage may cause the value of an investment in the Fund to be more volatile, could result in larger losses than if they
were not used, and tend to compound the effects of other risks.
LIBOR
Risk Certain instruments in which the Fund may invest rely in some fashion upon the London-Interbank
Offered Rate (“LIBOR”). The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced plans
to phase out the use of LIBOR by the end of 2021. There remains uncertainty regarding the future utilization of LIBOR, including an extension
by the ICE Benchmark Administration to postpone certain aspects of the LIBOR transition to June 2023, and the nature of any replacement
rate, and any potential effects of the transition away from LIBOR on the Fund or on certain instruments in which the Fund invests are
not known. The transition process may involve, among other things, increased volatility or illiquidity in markets for instruments that
currently rely on LIBOR. Uncertainty and volatility arising from the transition may result in a reduction in the value of
certain LIBOR-based instruments held by the Fund or
reduce the effectiveness of related transactions such as hedges. Any such effects of the transition away from LIBOR, as well as other
unforeseen effects, could result in losses to the Fund.
Liquidity
Risk Certain securities may be difficult (or impossible) to sell or certain positions may be
difficult to close out at a desirable time and price, and the Fund may be required to hold an illiquid investment that is declining in
value, or it may be required to sell certain illiquid investments at a price or time that is not advantageous in order to meet redemptions
or other cash needs. Some securities may be subject to restrictions on resale. There can be no assurance that there will be a liquid market
for instruments held by the Fund at any time. The Fund may not receive the proceeds from the sale of certain investments for an extended
period.
Management
Risk The Fund relies on the manager’s investment analysis and its selection of investments
to achieve its investment objective. There can be no assurance that the Fund will achieve the intended results and the Fund may incur
significant losses.
Market
Risk The value of the Fund’s portfolio securities may decline, at times sharply and unpredictably,
as a result of unfavorable market-induced changes affecting particular industries, sectors, or issuers. Stock and bond markets can decline
significantly in response to issuer, market, economic, industry, political, regulatory, geopolitical, public health, and other conditions,
as well as investor perceptions of these conditions. The Fund is subject to risks affecting issuers, such as management performance, financial
leverage, industry problems, and reduced demand for goods or services.
Preferred
Stock Risk Like other equity securities, preferred stock is subject to the risk that its value
may decrease based on actual or perceived changes in the business or financial condition of the issuer. In addition, changes in interest
rates may adversely affect the value of a preferred stock that pays a fixed dividend. Preferred stocks are also subject to additional
risks, such as potentially greater volatility and risks related to deferral, non-cumulative dividends, subordination, liquidity, limited
voting rights, and special redemption rights.
Reinvestment
Risk Income from the Fund’s portfolio will decline if and when the Fund invests the proceeds
from matured, traded, or called debt obligations at market interest rates that are
below the portfolio’s current
earnings rate. A decline in income could affect the Fund’s overall return.
Repurchase
Agreement Risk These transactions must be fully collateralized, but involve credit risk to
a Fund if the other party should default on its obligation and the Fund is delayed or prevented from recovering the collateral.
Reverse
Repurchase Agreement Transaction Risk These transactions typically create leverage and subject
the Fund to the credit risk of the counterparty.
Sector
Risk The Fund may allocate more of its assets to particular industries or to particular economic,
market, or industry sectors than to others. This could increase the volatility of the Fund’s portfolio, and the Fund’s performance
may be more susceptible to developments affecting issuers in those industries or sectors than if the Fund invested more broadly.
U.S.
Government Securities Risk Obligations of certain U.S. Government agencies and instrumentalities
are not backed by the full faith and credit of the U.S. Government, and there can be no assurance that the U.S. Government would provide
financial support to such agencies and instrumentalities.
Valuation
Risk The Fund is subject to the risk of mispricing or improper valuation of its investments,
in particular to the extent that its securities are fair valued.
Performance Information
The
following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes
in the Fund’s performance from year to year for Service Class shares. The table shows how the Fund’s average annual returns
for 1, 5, and 10 years compare with those of a broad measure of market performance. Performance for Class R4 shares of the Fund
for periods prior to its inception date (04/01/14) and performance for Class Y and Class C shares of the Fund for periods prior
to their inception date (12/13/21) is based on the performance of Class R5 shares, adjusted for Class R4 and Class C shares
to reflect Class R4 and Class C expenses, respectively. Performance
for Class A and Class C shares of the Fund reflects any applicable sales charge. Past
performance (before and after taxes) is not necessarily an indication of how the
Fund will perform
in the future. More up-to-date performance information is available at https://www.massmutual.com/funds
or by calling 1-888-309-3539.
Annual
Performance
Service
Class Shares
|
Highest
Quarter: |
|
|
2Q ‘20,
|
|
|
7.23%
|
|
|
Lowest
Quarter: |
|
|
1Q ‘20,
|
|
|
-12.73%
|
|
After-tax
returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax
returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who
hold Fund shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for Service Class only. After-tax returns for other classes will vary.
Average
Annual Total Returns
(for the periods ended
December 31, 2021)
|
|
|
|
|
|
|
|
One Year |
|
|
Five Years |
|
|
Ten Years |
|
|
Since Inception (12/13/2021)
|
|
|
Service Class
|
|
|
|
Return
Before Taxes |
|
|
7.30%
|
|
|
5.82%
|
|
|
7.16%
|
|
|
|
|
|
|
|
|
|
Return
After Taxes on Distributions |
|
|
4.87%
|
|
|
3.38%
|
|
|
4.37%
|
|
|
|
|
|
|
|
|
|
Return After Taxes on Distributions and Sales of Fund Shares
|
|
|
4.31%
|
|
|
3.38%
|
|
|
4.32%
|
|
|
|
|
|
Class I
|
|
|
|
Return Before Taxes |
|
|
7.46%
|
|
|
6.03%
|
|
|
7.39%
|
|
|
|
|
|
Class R5
|
|
|
|
Return Before Taxes |
|
|
7.42%
|
|
|
5.93%
|
|
|
7.27%
|
|
|
|
|
|
Admini- strative Class |
|
|
|
Return
Before Taxes |
|
|
7.19%
|
|
|
5.72%
|
|
|
7.05%
|
|
|
|
|
|
Class R4
|
|
|
|
Return Before Taxes |
|
|
6.91%
|
|
|
5.54%
|
|
|
6.88%
|
|
|
|
|
|
Class A
|
|
|
|
Return Before Taxes |
|
|
1.09%
|
|
|
4.28%
|
|
|
6.18%
|
|
|
|
|
|
Class R3
|
|
|
|
Return
Before Taxes |
|
|
6.80%
|
|
|
5.29%
|
|
|
6.59%
|
|
|
|
|
|
|
|
|
|
|
|
|
One Year |
|
|
Five Years |
|
|
Ten Years |
|
|
Since Inception (12/13/2021) |
|
|
Class Y
|
|
|
|
Return
Before Taxes |
|
|
6.46%
|
|
|
4.98%
|
|
|
6.31%
|
|
|
21.56%
|
|
|
Class C
|
|
|
|
Return
Before Taxes |
|
|
7.42%
|
|
|
5.93%
|
|
|
7.27%
|
|
|
6.02%
|
|
|
Bloomberg U.S. Corporate High-Yield Bond Index (reflects no deduction
for fees, expenses or taxes) |
|
|
5.28%
|
|
|
6.30%
|
|
|
6.83%
|
|
|
|
|
MANAGEMENT
Investment
Adviser: MML Investment Advisers, LLC (“MML Advisers”)
Subadviser(s):
Barings LLC (“Barings”)
Sub-subadviser(s):
Baring International Investment Limited (“BIIL”)
Portfolio
Manager(s):
Sean
Feeley, CFA is a Managing Director and portfolio manager for Barings’ U.S. High
Yield Investments Group. He has managed the Fund since December 2010.
Scott
Roth, CFA is a Managing Director and the Co-Head of, and a portfolio manager for, Barings’
U.S. High Yield Investments Group. He has managed the Fund since December 2010.
PURCHASE
AND SALE OF FUND SHARES
Shares of the Fund are
generally available through distribution channels, such as broker-dealers or financial institutions, and to retirement plans, other institutional
investors, and individual retirement accounts. Fund shares are redeemable on any business day by written request, telephone, or internet
(available to certain customers).
Purchase
Minimums*
|
|
|
Class Y |
|
|
Class C |
|
Initial Investment |
|
|
|
$ |
100,000 |
|
|
|
|
$ |
1,000 |
|
|
Subsequent Investment |
|
|
|
$ |
250 |
|
|
|
|
$ |
250 |
|
|
*
The
Fund reserves the right to change or waive the investment minimums. For retirement plans, the investment minimum is $250 for each of the
initial investment and subsequent investments.
TAX
INFORMATION
The Fund intends to
make distributions that may be taxed as ordinary income, qualified dividend
income, or capital gains, unless you are an investor
eligible for preferential tax treatment.
PAYMENTS TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the Fund through
a broker-dealer or other financial intermediary, the intermediary may receive a one-time or continuing payments from the Fund, MML Advisers
or its affiliates, or
others for the sale of Fund shares or continuing shareholder
services provided by the intermediary. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary
to recommend the Fund over another investment. You should contact your intermediary to obtain more information about the compensation
it may receive in connection with your investment.
Additional
Information Regarding Investment Objectives and Principal Investment Strategies
Changes to Investment Objectives and Strategies. Each
Fund’s investment objective and strategies are non-fundamental and may be changed by the Board of Trustees (the “Trustees”)
of the MassMutual Premier Funds (the “Trust”) without shareholder approval.
Note Regarding Percentage
Limitations. All percentage limitations on investments in this Prospectus will apply
at the time of investment, and will not be considered violated unless an excess or deficiency occurs or exists immediately after and as
a result of the investment. (As a result, the actual investments making up a Fund’s portfolio may not at a particular time comport
with any such limitation due to increases or decreases in the values of securities held by the Fund.) However, if, through a change in
values, net assets, or other circumstances, a Fund were in a position where more than 15% of its net assets was invested in illiquid securities,
the Fund would take appropriate orderly steps, as deemed necessary, to protect liquidity. With respect to a Fund whose name suggests that
the Fund focuses its investments in a particular type of investment or investments, or in investments in a particular industry or group
of industries, and that has adopted a policy under Rule 35d-1 under the Investment Company Act of 1940, as amended (the “1940
Act”), such Fund’s policy to invest at least 80% of its net assets in certain investments may be changed by the Trustees upon
at least 60 days’ prior written notice to shareholders.
Credit Ratings. Security
ratings are determined at the time of investment based on ratings published by nationally recognized statistical rating organizations;
if a security is not rated, it will be deemed to have the same rating as a security determined by the investment adviser or subadviser
to be of comparable quality. Unless otherwise stated, if a security is rated by more than one nationally recognized statistical rating
organization, the highest rating is used. The Fund may retain any security whose rating has been downgraded after purchase.
Duration. Duration
is a measure of the expected life of a debt security that is used to determine the sensitivity of the security’s value to changes
in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. For example, if
interest rates rise by 1%, the value
of a debt security with a duration of two years
would be expected to decline 2% and the value of a debt security with a duration of four years would be expected to decline 4%. Unlike
the maturity of a debt security, which measures only the time until final payment is due, duration takes into account the time until all
payments of interest and principal on a security are expected to be made, including how these payments are affected by prepayments and
by changes in interest rates. Determining duration may involve estimates of future economic parameters, which may vary from actual future
values.
Leverage. Leverage
generally has the effect of increasing the amount of loss or gain a Fund might realize, and may increase volatility in the value of a
Fund’s investments. Adverse changes in the value or level of the underlying asset, rate, or index may result in a loss substantially
greater than the amount invested in the derivative itself.
Temporary Defensive
Positions. At times, a Fund’s investment adviser or subadviser may determine that
market conditions make pursuing a Fund’s basic investment strategy inconsistent with the best interests of its shareholders. At
such times, the investment adviser or subadviser may (but will not necessarily), without notice, temporarily use alternative strategies
primarily designed to reduce fluctuations in the values of a Fund’s assets. In implementing these defensive strategies, a Fund may
hold assets without limit in cash and cash equivalents and in other investments that the investment adviser or subadviser believes to
be consistent with the Fund’s best interests. If such a temporary defensive strategy is implemented, a Fund may not achieve its
investment objective.
Portfolio Turnover. Changes
are made in a Fund’s portfolio whenever the investment adviser or subadviser believes such changes are desirable. Portfolio turnover
rates are generally not a factor in making buy and sell decisions. A high portfolio turnover rate will result in higher costs from brokerage
commissions, dealer-mark-ups, bid-ask spreads, and other transaction costs and may also result in a higher percentage of short-term
capital gains and a lower percentage of long-term capital gains as compared to a fund that trades less frequently (short-term capital
gains generally receive less favorable tax treatment in the hands of shareholders than do long-term capital gains).
Such costs are not reflected in the Funds’ Total
Annual Fund Operating Expenses set forth in the fee tables but do have the effect of reducing a Fund’s investment return.
Non-Principal Investments;
Use of Derivatives; Securities Loans; Repurchase Agreements. A Fund may hold investments
that are not included in its principal investment strategies. These non-principal investments are described in the Statement of Additional
Information (“SAI”) or below under “Additional Information Regarding Principal Risks.” A Fund also may choose
not to invest in certain securities described in this Prospectus and in the SAI, even though it has the ability to do so. Certain Funds
may engage in transactions involving derivatives as part of their principal investment strategies; the disclosures of the principal investment
strategies of those Funds include specific references to those derivatives transactions. Any of the other Funds may engage in derivatives
transactions not as part of their principal investment strategies, and Funds that may use certain derivatives as part of their principal
investment strategies may use other derivatives (not as part of their principal investment strategies), as well. A Fund may use derivatives
for hedging purposes, as a substitute for direct investment, to earn additional income, to adjust portfolio characteristics, including
duration (interest rate volatility), to gain exposure to securities or markets in which it might not be able to invest directly, to provide
asset/liability management, or to take long or short positions on one or more indexes, securities, or foreign currencies. If a Fund takes
a short position with respect to a particular index, security, or currency, it will lose money if the index, security, or currency appreciates
in value, or an expected credit or other event that might affect the value of the index, security, or currency fails to occur. Losses
could be significant. Derivatives transactions may include, but are not limited to, foreign currency exchange transactions, options, futures
contracts, interest rate swaps, interest rate futures contracts, forward contracts, total return swaps, credit default swaps, and hybrid
instruments. A Fund may use derivatives to create investment leverage. See “Additional Information Regarding Principal Risks,”
below, and the SAI for more information regarding those transactions.
A Fund may make loans of portfolio
securities to broker-dealers and other financial intermediaries of up to 33% of its total assets, and may enter into repurchase agreements.
These transactions must be
fully collateralized at all times, but involve some
risk to a Fund if the other party should default on its obligation and the Fund is delayed or prevented from recovering the collateral,
or if the Fund is required to return collateral to a borrower at a time when it may realize a loss on the investment of that collateral.
Any losses from the investment of cash collateral received by the Fund will be for the Fund’s account and may exceed any income
the Fund receives from its securities lending activities. A repurchase agreement is a transaction in which a Fund purchases a security
from a seller, subject to the obligation of the seller to repurchase that security from the Fund at a higher price. A Fund may enter into
securities loans and repurchase agreements as a non-principal investment strategy.
Foreign Securities. The
globalization and integration of the world economic system and related financial markets have made it increasingly difficult to define
issuers geographically. Accordingly, the Funds intend to construe geographic terms such as “foreign,” “non-U.S.,”
“European,” “Latin American,” “Asian,” and “emerging markets” in the manner that affords
to the Funds the greatest flexibility in seeking to achieve the investment objective(s) of the relevant Fund. Specifically, unless otherwise
stated, in circumstances where the investment objective and/or strategy is to invest (a) exclusively in “foreign securities,”
“non-U.S. securities,” “European securities,” “Latin American securities,” “Asian securities,”
or “emerging markets” (or similar directions) or (b) at least some percentage of the Fund’s assets
in foreign securities, etc., the Fund will take the view that a security meets this description so long as the issuer of a security is
tied economically to the particular country or geographic region indicated by words of the relevant investment objective and/or strategy
(the “Relevant Language”). For these purposes the issuer of a security is deemed to have that tie if:
(i) the issuer is organized under the
laws of the country or a country within the geographic region suggested by the Relevant Language or maintains its principal place of business
in that country or region; or
(ii) the securities are traded principally
in the country or region suggested by the Relevant Language; or
(iii) the issuer, during its most recent
fiscal year, derived at least 50% of its revenues or profits from goods produced or sold, investments made, or
services performed in the country or region suggested
by the Relevant Language or has at least 50% of its assets in that country or region.
In addition, the Funds intend to treat
derivative securities (e.g., call options) for this purpose by reference to the underlying security. Conversely, if the investment objective
and/or strategy of a Fund limits the percentage of assets that may be invested in “foreign securities,” etc. or prohibits
such investments altogether, a Fund intends to categorize securities as “foreign,” etc. only if the security possesses all
of the attributes described above in clauses (i), (ii), and (iii).
Disclosure
of Portfolio Holdings
A description of the Funds’ policies
and procedures with respect to the disclosure of each Fund’s portfolio securities is available in the Funds’ SAI.
Additional
Information
Regarding Principal Risks
A Fund, by itself, generally is not intended
to provide a complete investment program. Investment in the Funds is intended to serve as part of a diversified portfolio of investments.
An investment in a Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
The value of your investment in a Fund
changes with the values of the investments in the Fund’s portfolio. Many things can affect those values. Factors that may have an
important or significant effect on a particular Fund’s portfolio as a whole are called “Principal Risks.” The Principal
Risks of each Fund are identified in the foregoing Fund Summaries and are described in this section. Certain Funds may be more susceptible
to some risks than others. Although the Funds strive to reach their stated goals, they cannot offer guaranteed results. The value of your
investment in a Fund could go down as well as up. You can lose money by investing in the Funds. References in this section to a Fund’s
subadviser may include any sub-subadvisers as applicable.
The SAI contains further information
about the Funds, their investments and their related risks.
•
Bank
Loans Risk
Many of the risks associated
with bank loans are similar to the risks of investing in below investment grade debt securities, although bank loans are typically (though
not always) senior and secured, while below investment grade debt securities or investments are often subordinated and unsecured. Changes
in the financial condition of the borrower or economic conditions or other circumstances may reduce the capacity of the borrower to make
principal and interest payments on such instruments and may lead to defaults. The value of any collateral securing a bank loan may decline
after a Fund invests, and there is a risk that the value of the collateral may not be
sufficient to
cover the amount owed to the Fund. In addition, collateral securing a loan may be found invalid, may be used to pay other outstanding
obligations of the borrower under applicable law, or may be difficult to sell. In the event that a borrower defaults, a Fund’s access
to the collateral may be limited by bankruptcy and other insolvency laws. There is also the risk that the collateral may be difficult
to liquidate, or that a majority of the collateral may be illiquid. In addition, some loans may be unsecured. Unsecured loans generally
present a greater risk of loss to the Fund if the issuer defaults. In some cases, the Fund may rely on a third party to administer its
interest in a loan, and so is subject to the risk that the third party will be unwilling or unable to perform its obligations. The Fund
may invest in a loan by purchasing an indirect interest in the loan held by a third party. In that case, the Fund will be subject to both
the credit risk of the borrower and of the third party, and the Fund may be unable to realize some or all of the value of its interest
in the loan in the event of the insolvency of the third party. The settlement time for certain loans is longer than the settlement time
for many other types of investments, and the Fund may not receive the payment for a loan sold by it until well after the sale; that cash
would be unavailable for payment of redemption proceeds or for reinvestment. Interests in some bank loans may not be readily marketable
and may be subject to restrictions on resale. In some cases, negotiations involved in disposing of indebtedness may require weeks to complete.
Consequently, some indebtedness may be difficult or impossible to dispose of readily at what the Fund believes to be a fair price. Some
bank loans may be illiquid, and bank loans generally tend to be less liquid than many other debt securities. The lack of a liquid secondary
market may make it more difficult for the Fund to assign a value to such instruments for purposes of valuing the Fund’s portfolio
and calculating its net asset value (“NAV”). Some loans may not be considered “securities” for certain purposes
under the federal securities laws, and purchasers, such as the Fund, therefore may not be entitled to rely on the anti-fraud protections
of the federal securities laws.
•
Below
Investment Grade Debt Securities Risk
Below investment
grade debt securities, which are also known as “junk” or “high yield”
bonds, and comparable unrated securities
in which a Fund may invest, have speculative characteristics, and changes in economic conditions, the financial condition of the issuer,
and/or an unanticipated rise in interest rates or other circumstances are more likely to lead to a weakened capacity to make principal
and interest payment than in the case of higher grade securities. Below investment grade debt securities involve greater volatility of
price and yield and greater risk of loss of principal and interest than do higher quality securities. In the past, economic downturns
or increases in interest rates have, under certain circumstances, resulted in a higher incidence of default by the issuers of these instruments
and are likely to do so in the future, especially in the case of highly leveraged issuers. The prices for these instruments may be affected
by legislative and regulatory developments. Some below investment grade debt securities are issued in connection with management buy-outs
and other highly leveraged transactions, and may entail substantial risk of delays in payments of principal or interest or of defaults.
The inability (or perceived inability) of issuers to make timely payment of interest and principal would likely make the values of securities
held by the Fund more volatile and could limit the Fund’s ability to sell its securities at prices approximating the values the
Fund has placed on such securities. In the absence of a liquid trading market for securities held by it, a Fund at times may be unable
to establish the fair value of such securities. To the extent a Fund invests in securities in the lower rating categories, the achievement
of the Fund’s goals is more dependent on the Fund investment adviser’s or subadviser’s investment analysis than would
be the case if the Fund were investing in securities in the higher rating categories. Securities that are rated CCC or below by Standard
& Poor’s or Caa or below by Moody’s Investors Service, Inc. are generally regarded by the rating agencies as having extremely
poor prospects of ever attaining any real investment standing.
•
Cash
Position Risk
A Fund may hold a significant
portion of its assets in cash or cash equivalents at the sole discretion of the Fund’s investment adviser or subadviser, based on
such factors as it may consider appropriate under the circumstances.
The portion of a Fund’s assets
invested in cash and cash equivalents may at times exceed 25% of the Fund’s net assets. To the extent a Fund holds a significant
portion of its assets in cash or cash equivalents, its investments returns may be adversely affected and the Fund may not achieve its
investment objective.
•
Convertible
Securities Risk
Convertible securities
are bonds, debentures, notes or other debt securities that may be converted at either a stated price or stated rate into shares of common
or preferred stock (or cash or other securities of equivalent value), and so are subject to the risks of investments in both debt securities
and equity securities. The price of a convertible security may change in response to changes in price of the underlying equity security,
the credit quality of the issuer, and interest rates. Due to the conversion feature, convertible debt securities generally yield less
than non-convertible securities of similar credit quality and maturity. The values of convertible securities may be interest-rate sensitive
and tend to decline as interest rates rise and to rise when interest rates fall. A Fund may invest at times in securities that have a
mandatory conversion feature, pursuant to which the securities convert automatically into stock at a specified date and conversion ratio,
or that are convertible at the option of the issuer. When conversion is not at the option of the holder, a Fund may be required to convert
the security into the underlying stock even at times when the value of the underlying common stock has declined substantially or it would
otherwise be disadvantageous to do so.
•
Credit
Risk
Credit risk is the
risk that an issuer, guarantor, or liquidity provider of a fixed income security held by a Fund may be unable or unwilling, or may be
perceived (whether by market participants, ratings agencies, pricing services or otherwise) as unable or unwilling, to make timely principal
and/or interest payments, or to otherwise honor its obligations. It includes the risk that the security will be downgraded by a credit
rating agency; generally, lower credit quality issuers present higher credit risks. An actual or perceived decline in creditworthiness
of an issuer of a fixed income security held by the Fund may result in a decrease in the value of the security.
It is possible that the ability of
an issuer to meet its obligations will decline substantially during the period when the Fund owns securities of the issuer or that the
issuer will default on its obligations or that the obligations of the issuer will be limited or restructured. The credit rating assigned
to any particular investment does not necessarily reflect the issuer’s current financial condition and does not reflect an assessment
of an investment’s volatility or liquidity. Securities rated in the lowest category of investment grade are considered to have speculative
characteristics. In addition, below investment grade debt securities (i.e., “junk” or “high yield” bonds) involve
greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic downturn than investment
grade securities. If a security held by the Fund loses its rating or its rating is downgraded, the Fund may nonetheless continue to hold
the security in the discretion of the investment adviser or subadviser. In the case of asset-backed or mortgage-related securities, changes
in the actual or perceived ability of the obligors on the underlying assets or mortgages may affect the values of those securities.
The
Fund may also be exposed to the credit risk of its counterparty to repurchase agreements, reverse repurchase agreements, swap transactions,
and other derivatives transactions, and to the counterparty’s ability or willingness to perform in accordance with the terms of
the transaction. The value of such transactions to the Fund will depend on the willingness and ability of the counterparty to perform
its obligations, including among other things the obligation to return collateral or margin to the Fund. If a counterparty becomes bankrupt
or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Fund may experience significant
delays in obtaining any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. The Fund may obtain
only a limited recovery or may obtain no recovery in such circumstances. In the event of a counterparty’s (or its affiliate’s)
insolvency, the possibility exists that a Fund’s ability to exercise remedies, such as the termination of transactions, netting
of obligations, and realization on collateral, could be stayed or eliminated under special
resolution regimes
adopted in the United States, the European Union, and various other jurisdictions. Among other things, such regimes provide government
authorities with broad authority to intervene when a financial institution is experiencing financial difficulty.
•
Currency
Risk
Because foreign securities
normally are denominated and traded in foreign currencies, the value of a Fund’s assets may be affected favorably or unfavorably
by changes in currency exchange rates, currency exchange control regulations, intervention (or failure to intervene) by the U.S. or foreign
governments in currency markets, foreign withholding taxes, and restrictions or prohibitions on the repatriation of foreign currencies.
A Fund may, but will not necessarily, engage in foreign currency transactions in order to protect against fluctuations in the values of
holdings denominated in or exposed to other currencies, or, for certain Funds, to generate additional returns. Derivatives transactions
providing exposure to foreign currencies may create investment leverage. A Fund’s investment in foreign currencies may increase
the amount of ordinary income recognized by the Fund.
Officials in foreign
countries may from time to time take actions in respect of their currencies which could significantly affect the value of a Fund’s
assets denominated in those currencies or the liquidity of such investments. For example, a foreign government may unilaterally devalue
its currency against other currencies, which would typically have the effect of reducing the U.S. dollar value of investments denominated
in that currency. A foreign government may also limit the convertibility or repatriation of its currency or assets denominated in its
currency, which would adversely affect the U.S. dollar value and liquidity of investments denominated in that currency. In addition, although
at times most of a Fund’s income may be received or realized in foreign currencies, the Fund will be required to compute and distribute
its income in U.S. dollars. As a result, if the exchange rate for any such currency declines after the Fund’s income has been earned
and translated into U.S. dollars but before payment to shareholders, the Fund could be required to sell portfolio investments to make
such distributions. Similarly, if a Fund incurs an expense in a foreign currency and
the exchange rate changes adversely
to the Fund before the expense is paid, the Fund would have to convert a greater amount of U.S. dollars to pay for the expense at that
time than it would have had to convert at the time the Fund incurred the expense. Investments in foreign currencies themselves (directly
or through derivatives transactions) may be highly volatile and may create investment leverage.
•
Cyber
Security and Technology Risk
The Funds and their
service providers (including the Funds’ investment adviser, subadvisers, custodian, and transfer agent) are subject to operational
and information security risks, including those resulting from cyber-attacks and other technological issues. Technological issues or failures,
or interference or attacks by “hackers” or others, may have the effect of disabling or hindering the Funds’ operations
or the operations of a service provider to the Funds. There are inherent limitations in business continuity plans and technology systems
designed to prevent cyberattacks and avoid operational incidents, including the possibility that certain risks have not been identified.
The Funds’ investment adviser does not control the cyber security plans and systems put in place by third-party service providers,
and such third-party service providers may have limited indemnification obligations to the Funds’ investment adviser or the Funds,
each of whom could be negatively impacted as a result. Similar risks also are present for issuers of securities in which the Funds invest,
which could result in material adverse consequences for such issuers, and may cause a Fund’s investment in such securities to lose
value.
•
Defaulted
and Distressed Securities Risk
Defaulted securities
risk refers to the uncertainty of repayment of defaulted securities and obligations of distressed issuers. Because the issuer of such
securities is in default and is likely to be in distressed financial condition, repayment of defaulted securities and obligations of distressed
issuers (including insolvent issuers or issuers in payment or covenant default, in workout or restructuring, or in bankruptcy or insolvency
proceedings) is subject to significant uncertainties. The market will likely be less liquid for distressed or defaulted securities than
for other types of securities. Reduced liquidity can affect the
valuations of
distressed or defaulted securities, make their valuation and sale more difficult, and result in greater volatility. Insolvency laws and
practices in foreign countries are different than those in the U.S. and the effect of these laws and practices cannot be predicted with
certainty. Investments in defaulted securities and obligations of distressed issuers are considered speculative. To the extent a Fund
is invested in distressed securities, its ability to achieve current income for its shareholders may be diminished.
•
Derivatives
Risk
Derivatives are financial
contracts whose values depend upon, or are derived from, the value of an underlying asset, reference rate, or index. Derivatives may relate
to stocks, bonds, interest rates, currencies, credit exposures, currency exchange rates, commodities, related indexes, or other assets.
The use of derivative instruments may involve risks different from, or greater than, the risks associated with investing directly in securities
and other more traditional investments. Derivatives can be highly volatile and are subject to a number of potential risks described in
this Prospectus, including market risk, credit risk, management risk, liquidity risk, and leveraging risk. Derivative products are highly
specialized instruments that may require investment techniques and risk analyses different from those associated with stocks and bonds.
The use of a derivative requires an understanding not only of the underlying instrument or index but also of the derivative itself, often
without the benefit of observing the performance of the derivative under all possible market conditions. (For example, successful use
of a credit default swap may require, among other things, an understanding of both the credit of the company to which it relates and of
the way the swap is likely to respond to changes in various market conditions and to factors specifically affecting the company.) The
use of derivatives involves the risk that a loss may be sustained as a result of the failure of another party to the contract (typically
referred to as a “counterparty”) to make required payments or otherwise to comply with the contract’s terms. Derivative
transactions can create investment leverage. Losses from derivatives can be substantially greater than the derivatives’ original
cost and can sometimes
be unlimited. Since the values of
derivatives are calculated and derived from the values of other assets, reference rates, or indexes, there is greater risk that derivatives
will be improperly valued. Derivatives also involve the risk that changes in the value of a derivative may not correlate perfectly with
changes in the value of its underlying asset, rate, or index, and the risk that a derivative transaction may not have the effect or benefit
the Fund’s investment adviser or subadviser anticipated. Also, suitable derivative transactions may not be available in all circumstances,
and there can be no assurance that a Fund will engage in these transactions when that would be beneficial. A liquid secondary market may
not always exist for a Fund’s derivative positions at any time. If a derivative transaction is particularly large or if the relevant
market is illiquid (as is the case with many privately negotiated derivatives), it may not be possible to initiate a transaction or liquidate
a position at an advantageous price or at all. Although the use of derivatives is intended to enhance a Fund’s performance, it may
instead reduce returns and increase volatility.
Recent U.S. and non-U.S.
legislative and regulatory reforms, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, have resulted
in, and may in the future result in, new regulation of derivative instruments and the Funds’ use of such instruments. Such regulations
can, among other things, restrict a Fund’s ability to engage in derivative transactions (for example, by making certain types of
derivative instruments or transactions no longer available to a Fund), establish additional margin requirements and/or increase the costs
of derivatives transactions, and a Fund may as a result be unable to execute its investment strategies in a manner its investment adviser
or subadviser might otherwise choose. Counterparty risk with respect to derivatives has been and may continue to be affected by rules
and regulations concerning the derivatives market. Some derivatives transactions are centrally cleared, and a party to a cleared derivatives
transaction is subject to the credit risk of the clearing house and the clearing member through which it holds the position. Credit risk
of market participants with respect to derivatives that are centrally cleared is concentrated in a few clearing houses and clearing members,
and it is not clear
how an insolvency proceeding of a
clearing house or clearing member would be conducted, what effect the insolvency proceeding would have on any recovery by a Fund, and
what impact an insolvency of a clearing house or clearing member would have on the financial system more generally.
•
Futures
Contract Risk. A Fund may enter into futures contracts, in which the Fund agrees to
buy or sell certain financial instruments or index units or other assets on a specified future date at a specified price or rate.
A Fund may also enter into contracts to deliver in the future an amount of one currency in return for an amount of another currency. If
a Fund’s investment adviser or subadviser misjudges the direction of interest rates, markets, or foreign exchange rates, a Fund’s
overall performance could suffer. The risk of loss could be far greater than the investment made because a futures contract requires only
a small deposit to take a large position. A small change in a futures contract could have a substantial impact on a Fund, favorable or
unfavorable. An investor could also suffer losses if it is unable to close out a futures contract because of an illiquid market. Futures
are subject to the creditworthiness of the futures commission merchants or brokers and clearing organizations involved in the transactions.
In the event of the insolvency of its futures commission merchant or broker, a Fund may be delayed or prevented from recovering some or
all of the margin it has deposited with the merchant or broker, or any increase in the value of its futures positions held through that
merchant or broker.
•
Dollar
Roll and Reverse Repurchase Agreement Transaction Risk
In a dollar roll
transaction, a Fund sells mortgage-backed securities for delivery to the buyer in the current month and simultaneously contracts to purchase
similar securities on a specified future date from the same party. In a reverse repurchase agreement transaction, a Fund sells securities
to a bank or securities dealer and agrees to repurchase them at an agreed time and price; a reverse repurchase agreement is similar to
a secured borrowing by a Fund. Both types of transactions generally create leverage (see “Leveraging Risk” below). It may
be difficult or impossible for a Fund to exercise its rights under a dollar roll transaction or reverse repurchase agreement
in the event of the insolvency or
bankruptcy of the counterparty, and the Fund may not be able to purchase the securities or other assets subject to the transaction and
may be required to return any collateral it holds.
•
Emerging
Markets Risk
Investing in emerging
market securities poses risks different from, and/or greater than, risks of investing in domestic securities or in the securities of foreign,
developed countries.
These risks may include,
for example, smaller market-capitalizations of securities markets; significant price volatility; illiquidity; limits on foreign investment;
and possible limits on repatriation of investment income and capital. Future economic or political events or crises could lead to price
controls, forced mergers, expropriation or confiscatory taxation, seizure, nationalization, or the creation of government monopolies.
The currencies of emerging market countries may experience significant declines against the U.S. dollar, and devaluation may occur subsequent
to investments in those currencies by a Fund. Inflation and rapid fluctuations in inflation rates have had, and may continue to have,
negative effects on the economies and securities markets of certain emerging market countries. Although many of the emerging market securities
in which a Fund may invest are traded on securities exchanges, they may trade in limited volume, and the exchanges may not provide all
of the conveniences or protections provided by securities exchanges in more developed markets.
Additional risks
of emerging market securities may include greater social, economic, and political uncertainty and instability; more substantial governmental
involvement in the economy; less governmental supervision and regulation; greater custody and operational risks; unavailability of currency
hedging techniques; less stringent investor protection and disclosure standards; companies that are newly organized and small; differences
in auditing and financial reporting standards, which may result in unavailability or unreliability of material information about issuers;
less developed legal, regulatory, and accounting systems; and greater environmental risk. Many emerging market countries are highly reliant
on international trade and exports, including the export of commodities.
Their economies
may be significantly impacted by fluctuations in commodity prices and the global demand for certain commodities. In addition, many emerging
market countries with less established health care systems have experienced outbreaks of pandemics or contagious diseases from time to
time. In addition, emerging securities markets may have different clearance and settlement procedures, which may be unable to keep pace
with the volume of securities transactions or otherwise make it difficult to engage in such transactions. Settlement of securities transactions
in emerging markets may be subject to risk of loss and may be delayed more often than transactions settled in the United States, in part
because a Fund will need to use brokers and counterparties that are less well capitalized, and custody and registration of assets in some
countries may be unreliable compared to more developed countries. Settlement problems may cause a Fund to miss attractive investment opportunities,
hold a portion of its assets in cash pending settlement, or be delayed in disposing of a portfolio security. It may be more difficult
to obtain and/or enforce a judgment in a court outside the U.S., and a judgment against a foreign government may be unenforceable.
Frontier markets,
a subset of emerging markets, generally have smaller economies and less mature capital markets than emerging markets. As a result, the
risks of investing in emerging market countries are magnified in frontier market countries. Frontier markets are more susceptible to having
abrupt changes in currency values, less mature markets and settlement practices, and lower trading volumes that could lead to greater
price volatility and illiquidity.
•
Fixed
Income Securities Risk
The values of debt
securities change in response to interest rate changes. In general, as interest rates rise, the value of a debt security is likely to
fall. This risk is generally greater for obligations with longer maturities or for debt securities that do not pay current interest (such
as zero-coupon securities). Debt securities with variable and floating interest rates can be less sensitive to interest rate changes,
although, to the extent a Fund’s income is based on short-term interest rates that fluctuate over short periods of time,
income received
by the Fund may decrease as a result of a decline in interest rates. The value of a debt security also depends on the issuer’s actual
or perceived credit quality or ability to pay principal and interest when due. The value of a debt security is likely to fall if an issuer
or the guarantor of a security is unable or unwilling (or is perceived to be unable or unwilling) to make timely principal and/or interest
payments or otherwise to honor its obligations or if the debt security’s rating is downgraded by a credit rating agency. The value
of a debt security can also decline in response to changes in market, economic, industry, political, regulatory, public health, and other
conditions that affect a particular type of debt security or issuer or debt securities generally. Certain events, such as market or economic
developments, regulatory or government actions, natural disasters, pandemics, terrorist attacks, war, and other geopolitical events can
have a dramatic adverse effect on the debt market and the overall liquidity of the market for fixed income securities.
•
Extension
Risk. During periods of rising interest rates, the average life of certain types of securities
may be extended because of slower than expected principal payments. This may lock in a below-market interest rate, increase the security’s
duration, and reduce the value of the security.
•
Prepayment
Risk. Prepayment risk is the risk that principal of a debt obligation will be repaid
at a faster rate than anticipated. In such a case, a Fund may lose the benefit of a favorable interest rate for the remainder of the term
of the security in question, and may only be able to reinvest the amount of the prepayment at a less favorable rate.
•
Interest
Rate Risk. The values of bonds and other debt instruments usually rise and fall in response
to changes in interest rates. The values of debt instruments generally increase in response to declines in interest rates and decrease
in response to rises in interest rates. Interest rate risk is generally greater for fixed-rate instruments than floating-rate instruments
and for investments with longer durations or maturities. Some investments give the issuer the option to call or redeem an investment before
its maturity date. If an issuer calls or redeems an investment during a time
of declining
interest rates, a Fund might have to reinvest the proceeds in an investment offering a lower yield, and therefore might not benefit from
any increase in value as a result of declining interest rates. Negative or very low interest rates could magnify the risks associated
with changes in interest rates. In general, changing interest rates, including rates that fall below zero, could have unpredictable effects
on markets and may expose fixed income and related markets to heightened volatility.
•
Foreign
Investment Risk
Investments
in securities of foreign issuers, securities of companies with significant foreign exposure, and foreign currencies can involve additional
risks relating to market, industry, political, regulatory, public health, and other conditions. Political, social, diplomatic, and economic
developments, U.S. and foreign government action such as the imposition of currency or capital blockages, controls, or tariffs, economic
and trade sanctions or embargoes, security suspensions, entering or exiting trade or other intergovernmental agreements, or the expropriation
or nationalization of assets in a particular country, can cause dramatic declines in certain or all securities with exposure to that country
and other countries. Economic or other sanctions imposed on a foreign country or issuer by the U.S., or on the U.S. by a foreign country,
could impair a Fund’s ability to buy, sell, hold, receive, deliver, or otherwise transact in certain securities. In the event of
nationalization, expropriation, or other confiscation, a Fund could lose its entire foreign investment in a particular country. There
may be quotas or other limits on the ability of a Fund (or clients of a Fund’s investment adviser or subadviser) to invest or maintain
investments in securities of issuers in certain countries. Enforcing legal rights can be more difficult, costly, and limited in certain
foreign countries, and can be particularly difficult against foreign governments. Because non-U.S. securities are normally denominated
and traded in currencies other than the U.S. dollar, the value of a Fund’s assets may be affected favorably or unfavorably by changes
in currency exchange rates, exchange control regulations, and restrictions or prohibitions on the repatriation of non-U.S. currencies.
Income and gains with respect to investments
in certain countries may be subject
to withholding and other taxes. There may be less information publicly available about a non-U.S. company than about a U.S. company, and
many non-U.S. companies are not subject to accounting, auditing, and financial reporting standards, regulatory framework and practices
comparable to those in the United States. The securities of some non-U.S. companies are less liquid and at times more volatile than securities
of comparable U.S. companies. Non-U.S. transaction costs, such as brokerage commissions and custody costs may be higher than in the United
States. In addition, foreign markets can perform differently from U.S. markets and can react differently to market, economic, industry,
political, regulatory, geopolitical, public health, and other conditions than the U.S. market.
The willingness and
ability of foreign governmental entities to pay principal and interest on government securities depends on various economic factors, including
for example the issuer’s balance of payments, overall debt level, and cash-flow considerations related to the availability of tax
or other revenues to satisfy the issuer’s obligations. If a foreign governmental entity defaults on its obligations on the securities,
a Fund may have limited recourse available to it. The laws of some foreign countries may limit a Fund’s ability to invest in securities
of certain issuers located in those countries. Special tax considerations apply to a Fund’s investments in foreign securities. A
Fund’s investments in foreign securities or foreign currencies may increase or accelerate the Fund’s recognition of ordinary
income and may affect the amount, timing, or character of the Fund’s distributions.
A Fund may invest
in foreign securities known as depositary receipts, in the form of American Depositary Receipts (“ADRs”), European Depositary
Receipts (“EDRs”), Global Depositary Receipts (“GDRs”), or other similar securities. An ADR is a U.S. dollar-denominated
security issued by a U.S. bank or trust company that represents, and may be converted into, a foreign security. An EDR or a GDR is generally
similar but is issued by a non-U.S. bank. Depositary receipts are subject to the same risks as direct investment in foreign securities.
Depositary receipts may not necessarily be denominated
in the same currency as the underlying
securities into which they may be converted, and changes in currency exchange rates may affect the value of an ADR investment in ways
different from direct investments in foreign securities. Funds may invest in both sponsored and unsponsored depositary receipts. Unsponsored
depositary receipts are organized independently and without the cooperation of the issuer of the underlying securities. As a result, available
information concerning the issuers may not be as current for unsponsored depositary receipts and the prices of unsponsored depositary
receipts may be more volatile than if such instruments were sponsored by the issuer. An investment in an ADR is subject to the credit
risk of the issuer of the ADR.
•
Frequent
Trading/Portfolio Turnover Risk
The length of time
a Fund has held a particular security is not generally a consideration in investment decisions. The investment policies of a Fund may
lead to frequent changes in the Fund’s investments, particularly in periods of volatile market movements, in order to take advantage
of what the Fund’s investment adviser or subadviser believes to be temporary investment opportunities. A change in the securities
held by a Fund is known as “portfolio turnover.” Portfolio turnover generally involves some expense to a Fund, including brokerage
commissions, bid-asked spreads, dealer mark-ups, and other transaction costs on the sale of securities and reinvestments in other securities,
and may result in the realization of taxable capital gains (including short-term gains, which are generally treated as ordinary income
when distributed to shareholders). The trading costs and tax effects associated with portfolio turnover may adversely affect a Fund’s
performance. Consult your tax adviser regarding the effect of a Fund’s portfolio turnover rate on your investments.
•
Hedging
Risk
There
can be no assurance that a Fund’s hedging transactions will be effective. If a Fund takes a short position in a particular currency,
security, or bond market, it will lose money if the currency, security, or bond market appreciates in value, or an expected credit event
fails to occur. Any efforts at buying or selling currencies could result in significant
losses for the Fund. Further, foreign
currency transactions that are intended to hedge the currency risk associated with investing in foreign securities and minimize the risk
of loss that would result from a decline in the value of the hedged currency may also limit any potential gain that might result should
the value of such currency increase.
•
Inflation
Risk
The value of assets
or income from a Fund’s investments will be less in the future as inflation decreases the value of money. As inflation increases,
the value of a Fund’s assets can decline as can the value of the Fund’s distributions. The market prices of debt securities
generally fall as inflation increases because the purchasing power of the future income and repaid principal is expected to be worth less
when received by the Fund. Debt securities that pay a fixed rather than variable interest rate are especially vulnerable to inflation
risk because variable-rate debt securities may be able to participate, over the long term, in rising interest rates which have historically
accompanied long-term inflationary trends.
•
Leveraging
Risk
The use of leverage
has the potential to increase returns to shareholders, but also involves additional risks. A Fund may create leverage by borrowing money
(through traditional borrowings or by means of so-called reverse repurchase agreements); certain transactions, including, for example,
when-issued, delayed-delivery, to-be-announced, and forward commitment purchases, loans of portfolio securities, dollar roll transactions,
and the use of some derivatives, can also result in leverage. Leverage will increase the volatility of the Fund’s investment portfolio
and could result in larger losses than if it were not used. The use of leverage is considered to be a speculative investment practice
and may result in losses to a Fund. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment.
A Fund will typically pay interest or incur other borrowing costs in connection with leverage transactions.
•
LIBOR
Risk
Certain instruments
in which a Fund may invest rely in some fashion upon LIBOR.
LIBOR is an average interest rate,
determined by the ICE Benchmark Administration, that banks charge one another for the use of short-term money. The United Kingdom’s
Financial Conduct Authority (the “FCA”), which regulates LIBOR, has announced plans to phase out the use of LIBOR by the end
of 2021. The FCA and LIBOR’s administrator, ICE Benchmark Administration, have also announced that most LIBOR settings will no longer
be published after the end of 2021 and a majority of U.S. dollar LIBOR settings will no longer be published after June 30, 2023.
Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies. Various financial
industry groups have been planning for transition away from LIBOR, but there are obstacles to converting certain securities and transactions
to new reference rates. Markets are developing but questions around liquidity in these rates and how to appropriately adjust these rates
to mitigate any economic value transfer at the time of transition remain a significant concern. It is difficult to predict the full impact
of the transition away from LIBOR on a Fund. The transition process may involve, among other things, increased volatility or illiquidity
in markets for instruments that currently rely on LIBOR, particularly insofar as the documentation governing such instruments does not
include “fall back” provisions addressing the transition from LIBOR. With respect to most LIBOR-based instruments in which
a Fund may invest, the pricing and other terms governing the adoption of any successor rate are expected to limit or eliminate the direct
effect of the transition to a successor rate on the value of such instruments. However, uncertainty and volatility arising from the transition
may result in a reduction in the value of certain LIBOR-based instruments held by a Fund or reduce the effectiveness of related transactions
such as hedges. Any such effects of the transition away from LIBOR, as well as other unforeseen effects, could result in losses to a Fund.
•
Liquidity
Risk
Liquidity risk is the
risk that particular investments may be difficult to sell or terminate at approximately the price at which the Fund is carrying the investments.
The ability of a Fund to dispose of illiquid positions at
advantageous prices may be greatly
limited, and a Fund may have to continue to hold such positions during periods when the investment adviser or subadviser otherwise would
have sold them. Some securities held by a Fund may be restricted as to resale, may trade in the over-the-counter (“OTC”) market,
or may not have an active trading market due to adverse market, economic, industry, political, regulatory, geopolitical, public health,
or other conditions. In addition, a Fund, by itself or together with other accounts managed by the investment adviser or subadviser, may
hold a position in a security that is large relative to the typical trading volume for that security, which can make it difficult for
the Fund to dispose of the position at an advantageous time or price.
Market values for
illiquid securities may not be readily available, and there can be no assurance that any fair value assigned to an illiquid security at
any time will accurately reflect the price a Fund might receive upon the sale of that security. It is possible that, during periods of
extreme market volatility or unusually high and unanticipated levels of redemptions, a Fund may be forced to sell large amounts of securities
or terminate outstanding transactions at a price or time that is not advantageous in order to meet redemptions or other cash needs. In
such a case, the sale proceeds received by a Fund may be substantially less than if the Fund had been able to sell the securities or terminate
the transactions in more orderly transactions, and the sale price may be substantially lower than the price previously used by the Fund
to value the securities for purposes of determining the Fund’s NAV. To the extent a Fund holds illiquid securities, it may be more
likely to pay redemption proceeds in kind.
•
Management
Risk
Each Fund is subject
to management risk because it relies on the investment adviser’s and/or subadviser’s investment analysis and its selection
of investments to achieve its investment objective. A Fund’s investment adviser or subadviser manages the Fund based on its assessment
of economic, financial, and market factors and its investment judgment. The investment adviser or subadviser may fail to ascertain properly
the appropriate mix of securities for any particular economic cycle. A Fund’s investment adviser or subadviser
applies its investment techniques
and risk analyses in making investment decisions for the Fund, but there can be no guarantee that they will produce the intended result.
Management risk includes the risk that poor security selection will cause a Fund to underperform relative to other funds with similar
investment objectives, or that the timing of movements from one type of security to another could have a negative effect on the overall
investment performance of the Fund. There can be no assurance that there will be a liquid market for instruments held by the Fund at any
time.
•
Market
Risk
The values of a Fund’s
portfolio securities may decline, at times sharply and unpredictably, as a result of unfavorable broad market developments, which may
affect securities markets generally or particular industries, sectors, or issuers. The values of a Fund’s investments may decline
as a result of a number of such factors, including actual or perceived changes in general economic and market conditions, industry, political,
regulatory, geopolitical, public health, and other developments, including the imposition of tariffs or other protectionist actions, changes
in interest rates, currency rates, or other rates of exchange, and changes in economic and competitive industry conditions. Likewise,
terrorism, war, natural and environmental disasters, and epidemics or pandemics may be highly disruptive to economies and markets. For
example, the global pandemic outbreak of the novel coronavirus known as COVID-19 and efforts to contain its spread have produced, and
will likely continue to produce, substantial market volatility, severe market dislocations and liquidity constraints in many markets,
exchange trading suspensions and closures, higher default rates, and global business disruption, and they may result in future significant
adverse effects, such as declines in global financial markets and a substantial economic downturn or recession throughout the world. Such
factors may have a significant adverse effect on a Fund’s performance and have the potential to impair the ability of a Fund’s
investment adviser, subadviser, or other service providers to serve the Fund and could lead to disruptions that negatively impact the
Fund. Different parts of the market
and different types of securities
can react differently to these conditions. The possibility that security prices in general will decline over short or even extended periods
subjects a Fund to unpredictable declines in the value of its shares, as well as potentially extended periods of poor performance. In
addition, the increasing popularity of passive index-based investing may have the potential to increase security price correlations and
volatility. As passive strategies generally buy or sell securities based simply on inclusion and representation in an index, securities’
prices will have an increasing tendency to rise or fall based on whether money is flowing into or out of passive strategies rather than
based on an analysis of the prospects and valuation of individual securities. This may result in increased market volatility as more money
is invested through passive strategies.
Federal, state, and
other governments, their regulatory agencies, or self-regulatory organizations may take actions that affect the regulation of the securities
in which a Fund invests or the issuers of such securities in ways that are unforeseeable. The uncertainty surrounding the sovereign debt
of a significant number of European Union countries, as well as the status of the Euro, the European Monetary Union, and the European
Union itself, has disrupted and may continue to disrupt markets in the U.S. and around the world. The risks associated with investments
in Europe may be heightened due to the United Kingdom’s exit from the European Union on January 31, 2020. An agreement between
the United Kingdom and the European Union governing their future trade relationship became effective on January 1, 2021. Significant
uncertainty remains in the market regarding the ramifications of that development and the arrangements that will apply to the United Kingdom’s
relationship with the European Union and other countries following its withdrawal; the range and potential implications of possible political,
regulatory, economic, and market outcomes are difficult to predict. There is the potential for decreased trade, capital outflows from
the United Kingdom, devaluation of the pound sterling, decreased business and consumer spending and decreased foreign investment in the
United Kingdom, and negative effects on the value of a Fund’s investments and/or on a Fund’s ability to enter into certain
transactions or value certain investments.
If one or more additional countries leave the European Union, or the European Union partially or completely dissolves, the world’s
economies and securities markets may be significantly disrupted and adversely affected. Legislation or regulation also may change the
way in which a Fund, the investment adviser, or subadviser is regulated. Such legislation, regulation, or other government action could
limit or preclude a Fund’s ability to achieve its investment objective and affect the Fund’s performance.
•
Mortgage-
and Asset-Backed Securities Risk
Investments in mortgage-related
and other asset-backed securities are subject to the risk of severe credit downgrades, illiquidity and defaults to a greater extent than
many other types of fixed income investments. Mortgage-backed securities, including collateralized mortgage obligations and certain stripped
mortgage-backed securities, represent a participation in, or are secured by, mortgage loans. Asset-backed securities are generally structured
like mortgage-backed securities, but instead of mortgage loans or interests in mortgage loans, the underlying assets may include such
items as motor vehicle installment sale or installment loan contracts, leases of various types of real and personal property, receivables
from credit card agreements, and student loan payments. Asset-backed securities also may be backed by pools of corporate or sovereign
bonds, loans made to corporations, or a combination of these bonds and loans, commonly referred to as “collateralized debt obligations,”
including collateralized bond obligations (“CBOs”) and collateralized loan obligations (“CLOs”). The assets backing
collateralized debt obligations may consist in part or entirely of high risk, below investment grade debt obligations (or comparable unrated
obligations). In the case of CBOs and certain other collateralized debt obligations, those may include, by way of example, high yield
debt, residential privately issued mortgage-related securities, commercial privately issued mortgage-related securities, trust preferred
securities, and emerging market debt. In the case of CLOs, they may include, among other things, domestic and foreign senior secured loans,
senior unsecured loans, and subordinate corporate loans, any or all of which may be rated below investment grade or may be comparable
unrated obligations.
Traditional debt investments typically
pay a fixed rate of interest until maturity, when the entire principal amount is due. By contrast, payments on mortgage-backed and many
asset-backed investments typically include both interest and partial payment of principal. Principal may also be prepaid voluntarily,
or as a result of refinancing or foreclosure. The Fund may have to invest the proceeds from prepaid investments in other investments with
less attractive terms and yields. As a result, these securities may have less potential for capital appreciation during periods of declining
interest rates than other securities of comparable maturities, although they may have a similar risk of decline in market value during
periods of rising interest rates. Because the prepayment rate generally declines as interest rates rise, an increase in interest rates
will likely increase the duration, and thus the volatility, of mortgage-backed and asset-backed securities. (Duration is a measure of
the expected life of a fixed income security that is used to determine the sensitivity of the security’s price to changes in interest
rates. Unlike the maturity of a fixed income security, which measures only the time until final payment is due, duration takes into account
the time until all payments of interest and principal on a security are expected to be made, including how these payments are affected
by prepayments and by changes in interest rates.) Prepayment rates are difficult to predict and the potential impact of prepayments on
the value of a mortgage-related or other asset-backed security depends on the terms of the instrument and can result in significant volatility.
In addition to interest rate risk (as described under “Interest Rate Risk”), investments in mortgage-backed securities composed
of subprime mortgages and investments in CDOs and CLOs backed by pools of high-risk, below investment grade debt securities may be subject
to a higher degree of credit risk, valuation risk, and liquidity risk (as described under “Credit Risk,” “Valuation
Risk,” and “Liquidity Risk”). Litigation with respect to the representations and warranties given in connection with
the issuance of mortgage-backed securities can be an important consideration in investing in such securities, and the outcome of any such
litigation could significantly impact the value of the Fund’s mortgage-backed investments.
The types of mortgages underlying
securities held by the Fund may differ and may be affected differently by market factors. For example, the Fund’s investments in
residential mortgage-backed securities will likely be affected significantly by factors affecting residential real estate markets and
mortgages generally; similarly, investments in commercial mortgage-backed securities will likely be affected significantly by factors
affecting commercial real estate markets and mortgages generally.
Some mortgage-backed
and asset-backed investments receive only the interest portion (“IOs”) or the principal portion (“POs”) of payments
on the underlying assets. The yields and values of these investments are extremely sensitive to changes in interest rates and in the rate
of principal payments on the underlying assets. IOs tend to decrease in value if interest rates decline and rates of repayment (including
prepayment) on the underlying mortgages or assets increase; it is possible that the Fund may lose the entire amount of its investment
in an IO due to a decrease in interest rates. Conversely, POs tend to decrease in value if interest rates rise and rates of repayment
decrease. Moreover, the market for IOs and POs may be volatile and limited, which may make them difficult for the Fund to buy or sell.
The values of mortgage-related and other asset-backed securities may be substantially dependent on the servicing of the underlying asset
pools, and are therefore subject to risks associated with the negligence or malfeasance by their servicers and to the credit risk of their
servicers. In certain situations, the mishandling of related documentation may also affect the rights of securities holders in and to
the benefits of the underlying collateral. There may be legal and practical limitations on the enforceability of any security interest
granted with respect to underlying assets, or the value of the underlying assets, if any, may be insufficient if the issuer defaults.
The Fund may gain
investment exposure to mortgage-backed and asset-backed investments by entering into agreements with financial institutions to buy the
investments at a fixed price at a future date. The Fund may or may not take delivery of the investments at the termination date of such
an agreement, but will nonetheless be exposed to changes in
value of the underlying investments
during the term of the agreement. These transactions may create investment leverage.
•
Preferred
Stock Risk
Like
other equity securities, preferred stock is subject to the risk that its value may decrease based on actual or perceived changes in the
business or financial condition of the issuer. In addition, if interest rates rise, the dividends on preferred stocks may be less attractive,
causing the prices of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions or call/redemption
provisions that can negatively affect its value. In addition, in the event of liquidation of a corporation’s assets, the rights
of preferred stock generally are subordinate to the rights associated with a corporation’s debt securities. Preferred stocks are
also subject to additional risks, such as potentially greater volatility and risks related to deferral, non-cumulative dividends, subordination,
liquidity, limited voting rights, and special redemption rights.
•
Redemptions
by Affiliated Funds and by Other Significant Investors
A Fund may be an investment
option for other MassMutual Funds that are managed as “funds of funds” and for other investors who may make substantial investments
in the Fund. As a result, from time to time, a Fund may experience a relatively large redemption and could be required to liquidate assets
at inopportune times or at a loss or depressed value, which could cause the value of your investment to decline. Similarly, large Fund
share purchases may adversely affect a Fund’s performance to the extent that the Fund is delayed in investing new cash and is required
to maintain a larger cash position than it ordinarily would, or if the Fund is unable to invest the cash in portfolio securities that
it considers as desirable as the Fund’s portfolio securities.
•
Reinvestment Risk
Income
from a Fund’s portfolio will decline if and when the Fund invests the proceeds from matured, traded, or called debt obligations
at market interest rates that are below the portfolio’s current earnings rate. A decline in income could affect a Fund’s overall
return.
•
Repurchase Agreement
Risk
A Fund may enter
into repurchase agreements. These transactions must be fully collateralized, but involve credit risk to a Fund if the other party should
default on its obligation and the Fund is delayed or prevented from recovering the collateral, or if the Fund is required to return collateral
to a borrower at a time when it may realize a loss on the investment of that collateral.
•
Restricted
Securities Risk
A Fund may hold securities
that are restricted as to resale under the U.S. federal securities laws, such as securities in certain privately held companies. There
can be no assurance that a trading market will exist at any time for any particular restricted security. Limitations on the resale of
these securities may prevent the Fund from disposing of them promptly at reasonable prices or at all. Restricted securities may be highly
illiquid. A Fund may have to bear the expense of registering the securities for resale and the risk of substantial delays in effecting
the registration. Restricted securities may be difficult to value because market quotations may not be readily available, and there may
be little publicly available information about the securities or their issuers. The values of restricted securities may be highly volatile.
•
Risk
of Investment in other Funds or Pools
A Fund may invest in
other investment companies or pooled vehicles, including closed-end funds, trusts, and exchange-traded funds (“ETFs”), that
are advised by the Fund’s investment adviser or subadviser, as applicable, their affiliates, or by unaffiliated parties, to the
extent permitted by applicable law. As a shareholder in an investment company or other pool, the Fund, and indirectly that Fund’s
shareholders, bear a ratable share of the investment company’s or pool’s expenses, including, but not limited to, advisory
and administrative fees, and the Fund at the same time continues to pay its own fees and expenses. Investment companies or pools in which
the Funds may invest may change their investment objectives or policies without the approval of a Fund, in which case a Fund may be forced
to withdraw its investment from the investment company or pool at a disadvantageous time. Private investment pools in which the Funds
may
invest are not registered under the
1940 Act, and so will not offer all of the protections provided by the 1940 Act (including, among other things, independent oversight,
protections against certain conflicts of interest, and custodial risks). A Fund is exposed indirectly to all of the risks applicable to
any other investment company or pool in which it invests, including that the investment company or pool will not perform as expected.
Investments in other investment companies or private pools may be illiquid, may be leveraged, and may be highly volatile.
Investing in other
investment companies or private investment vehicles sponsored or managed by the investment adviser or subadviser, as applicable, or affiliates
of the investment adviser or subadviser, as applicable, involves potential conflicts of interest. For example, the investment adviser
or subadviser, as applicable, or their affiliates may receive fees based on the amount of assets invested in such other investment vehicles,
which fees may be higher than the fees the investment adviser or subadviser, as applicable, receives for managing the investing Fund.
Investment by a Fund in those other vehicles may be beneficial in the management of those other vehicles, by helping to achieve economies
of scale or enhancing cash flows. Due to this and other factors, the investment adviser or subadviser, as applicable, will have an incentive
to invest a portion of a Fund’s assets in investment vehicles sponsored or managed by the investment adviser or subadviser, as applicable,
or their affiliates in lieu of investments by the Fund directly in portfolio securities, and will have an incentive to invest in such
investment vehicles over non-affiliated investment companies. The investment adviser or subadviser, as applicable, will have no obligation
to select the least expensive or best performing funds available to serve as an underlying investment vehicle. Similarly, the investment
adviser or subadviser, as applicable, will have an incentive to delay or decide against the sale of interests held by the Fund in investment
vehicles sponsored or managed by the investment adviser or subadviser, as applicable, or their affiliates.
ETFs are subject
to many of the same risks applicable to investments in mutual funds generally, including that an ETF will not perform as anticipated,
that a Fund will bear
its proportionate
share of the ETF’s fees and expenses, and that the ETF will lose money. ETFs are also subject to additional risks, including, among
others, the risk that the market price of an ETF’s shares may trade above or below its NAV, the risk that an active trading market
for an ETF’s shares may not develop or be maintained, the risk that trading of an ETF’s shares may be halted, and the risk
that the ETF’s shares may be delisted from the listing exchange. Many ETFs engage in derivatives strategies and use leverage, and
as a result their values can be highly volatile. It is possible that an ETF’s performance will diverge from the performance of any
index or indexes it seeks to replicate. Because shares of ETFs are actively traded, their values may be affected in unanticipated ways
by the effects of supply and demand in the market, activities of short sellers, or unusual speculative activity in their shares. Some
ETFs may experience periods of reduced liquidity due to restrictions on trading activity or due to a general lack of investor interest
in the asset class represented by the ETF. Unlike shares of a mutual fund, which can be bought and redeemed from the issuing fund by all
shareholders at a price based on NAV, shares of an ETF may be purchased or redeemed directly from the ETF solely by Authorized Participants
(“APs”) and only in aggregations of a specified number of shares (“Creation Units”). ETFs may have a limited number
of financial institutions that act as APs. To the extent that those APs exit the business, or are unable to or choose not to process creation
and/or redemption orders for Creation Units, and no other AP steps forward to create and redeem ETF shares, the ETF’s shares may
be more likely to trade at a premium or discount to NAV and possibly face trading halts or delisting.
•
Sector
Risk
If a Fund allocates
a substantial amount of its assets to one or more particular industries or to particular economic, market, or industry sectors, then economic,
business, regulatory, or other developments affecting issuers in those industries or sectors may affect the Fund adversely to a greater
extent than if the Fund had invested more broadly. Examples might include investments in the technology, health care, or financial sectors
or in one or more industries within those sectors. A substantial
investment in one or more such industries
or sectors has the potential to increase the volatility of a Fund’s portfolio, and may cause the Fund to underperform other mutual
funds.
•
Sovereign
Debt Obligations Risk
Investments in debt
securities issued by governments or by government agencies and instrumentalities involve the risk that the governmental entities responsible
for repayment may be unable or unwilling to pay interest and repay principal when due. A governmental entity’s willingness or ability
to pay interest and repay principal in a timely manner may be affected by a variety of factors, including its cash flow, the size of its
reserves, its access to foreign exchange, the relative size of its debt service burden to its economy as a whole, and political constraints.
A governmental entity may default on its obligations or may require renegotiation or rescheduling of debt payments. Any restructuring
of a sovereign debt obligation held by the Fund will likely have a significant adverse effect on the value of the obligation. In the event
of default of sovereign debt, the Fund may be unable to pursue legal action against the sovereign issuer or to realize on collateral securing
the debt. The sovereign debt of many non-U.S. governments, including their sub-divisions and instrumentalities, is rated below investment
grade (“junk” or “high yield” bonds). Sovereign debt risk may be greater for debt securities issued or guaranteed
by emerging and/or frontier market countries. At times, certain emerging and frontier market countries have declared moratoria on the
payment of principal and interest on external debt. Certain emerging and frontier market countries have experienced difficulty in servicing
their sovereign debt on a timely basis, which has led to defaults and the restructuring of certain indebtedness to the detriment of debtholders.
•
U.S.
Government Securities Risk
U.S. Government securities
include a variety of securities that differ in their interest rates, maturities, and dates of issue. While securities issued or guaranteed
by some agencies or instrumentalities of the U.S. Government (such as the Government National Mortgage Association) are supported by the
full faith and credit of the United
States, securities issued or guaranteed
by certain other agencies or instrumentalities of the U.S. Government (such as Federal Home Loan Banks) are supported only by the right
of the issuer to borrow from the U.S. Government. Securities issued or guaranteed by certain other agencies and instrumentalities of the
U.S. Government (such as Fannie Mae and Freddie Mac) are not supported by the full faith and credit of the U.S. Government and are supported
only by the credit of the issuer itself. There is no assurance that the U.S. Government would provide financial support to its agencies
and instrumentalities if not required to do so. For securities not backed by the full faith and credit of the United States, a Fund must
look principally to the agency or instrumentality issuing or guaranteeing the securities for repayment and may not be able to assert a
claim against the United States if the agency or instrumentality does not meet its commitment. Such securities may involve increased risk
of loss of principal and interest compared to government debt securities that are backed by the full faith and credit of the United States.
In addition, certain governmental entities have been subject to regulatory scrutiny regarding their accounting policies and practices
and other concerns that may result in legislation, changes in regulatory oversight and/or other consequences that could adversely affect
the credit quality, availability, or investment character of securities issued by these entities. Investments in these securities are
also subject to, among other things, interest rate risk, prepayment risk, extension risk, and the risk that the value of the securities
will fluctuate in response to political, market, or economic developments.
•
Valuation
Risk
A portion of a Fund’s
assets may be valued at fair value pursuant to guidelines that have been approved by the Trustees. A Fund’s assets may be valued
using prices provided by a pricing service or, alternatively, a broker-dealer or other market intermediary (sometimes just one broker-dealer
or other market intermediary) when other reliable pricing sources may not be available. The Fund, or persons acting on its behalf, may
determine a fair value of a security based on such other information as may be available to them. There can be no assurance that any fair
valuation
of an investment held by a Fund will
in fact approximate the price at which the Fund might sell the investment at the time. Technological issues or other service disruption
issues involving third-party service providers may limit the ability of the Fund to value its investment accurately or timely. To the
extent a Fund sells a security at a price lower than the price it has been using to value the security, its NAV will be adversely affected.
If a Fund has overvalued securities it holds, you may pay too much for the Fund’s shares when you buy into the Fund. If a Fund underestimates
the price of its portfolio securities, you may not receive the full market value for your Fund shares when you sell.
•
When-Issued,
Delayed Delivery, TBA, and Forward Commitment Transaction Risk
A Fund may purchase
securities on a when-issued, delayed delivery, to-be-announced, or
forward commitment basis. These transactions
involve a commitment by a Fund to purchase securities for a predetermined price or yield, with payments and delivery taking place more
than seven days in the future, or after a period longer than the customary settlement period for that type of security. These transactions
involve a risk of loss if the value of the securities declines prior to the settlement date. These transactions may create investment
leverage. Recently finalized rules of the Financial Industry Regulatory Authority impose mandatory margin requirements for certain types
of when-issued, TBA, or forward commitment transactions, with limited exceptions. Such transactions historically have not been required
to be collateralized, and mandatory collateralization could increase the cost of such transactions and impose added operational complexity
and may increase the credit risk of such transactions to a Fund.
Management
of the Funds
Investment
Adviser
MML Investment Advisers,
LLC (“MML Advisers”), a Delaware limited liability company, located at 1295 State
Street, Springfield, Massachusetts 01111-0001, is the Funds’ investment adviser and is responsible for providing all necessary investment
management and administrative services. MML Advisers, formed in 2013, is a wholly-owned subsidiary of Massachusetts Mutual Life Insurance
Company (“MassMutual”). Founded in 1851, MassMutual is a mutual life insurance company that provides a broad range of insurance,
money management, retirement, and asset accumulation products and services for individuals and businesses. As of September 30, 2021,
MML Advisers had assets under management of approximately $61.2 billion.
In 2021, each Fund paid MML Advisers
an investment management fee based on a percentage of each Fund’s average daily net assets as follows: 0.35% for the Short-Duration
Bond Fund and 0.47% for the High Yield Fund.
A discussion regarding the basis for
the Trustees approving any investment advisory contract of the Funds is available in the Funds’ annual report to shareholders dated
September 30, 2021 and the Funds’ semiannual report to shareholders dated March 31, 2021.
Each Fund also pays
MML Advisers an administrative and shareholder services fee to compensate it for providing general administrative services to the Funds
and for providing or causing to be provided ongoing shareholder servicing to direct and indirect investors in the Funds. MML Advisers
pays substantially all of the fee to third parties who provide shareholder servicing and investor recordkeeping services. The fee is calculated
and paid based on the average daily net assets attributable to each share class of the Fund separately, and is paid at the following annual
rates: 0.10% for Class R5 shares of both Funds; 0.20% for Service Class shares of both Funds; 0.30% for Administrative Class shares
and Class A shares of both Funds; 0.20% for Class R4 shares and Class R3 shares of both Funds; 0.10%, 0.05%, and 0.05%
for Class Y shares, Class L shares, and Class C shares of the Short-Duration Bond Fund, respectively; and 0.05% and 0.00%
for Class Y shares and Class C shares of the High Yield Fund, respectively. Class I shares do not pay any administrative
and shareholder services fee.
Subadviser
and Portfolio Managers
MML Advisers contracts with the following
subadviser to help manage the Funds. Subject to the oversight of the Trustees, MML Advisers has the ultimate responsibility to oversee
subadvisers and recommend their hiring, termination, and replacement. This responsibility includes, but is not limited to, analysis and
review of subadviser performance, as well as assistance in the identification and vetting of new or replacement subadvisers. In addition,
MML Advisers maintains responsibility for a number of other important obligations, including, among other things, board reporting, assistance
in the annual advisory contract renewal process, and, in general, the performance of all obligations not delegated to a subadviser. MML
Advisers also provides advice and recommendations to the Trustees, and performs such review and oversight functions as the Trustees may
reasonably request, as to the continuing appropriateness of the investment objective, strategies, and policies of each Fund, valuations
of portfolio securities, and other matters relating generally to the investment program of each Fund.
Barings
LLC (“Barings”), an indirect, wholly-owned subsidiary of MassMutual, with
principal offices located at 300 South Tryon Street, Charlotte, North Carolina 28202, manages the investments of the Short-Duration
Bond Fund and High
Yield Fund. In addition, Baring
International Investment Limited (“BIIL”) serves as sub-subadviser for the Short-Duration
Bond Fund and High
Yield Fund and, subject to the supervision of Barings, is authorized to conduct securities
transactions on behalf of the Funds. BIIL is a wholly-owned subsidiary of Barings and its address is 20 Old Bailey, London, EC4M 7BF,
United Kingdom. Barings has provided investment advice to individual and institutional investors for more than 75 years and, with
its subsidiaries, had assets under management as of September 30, 2021 of approximately $387.2 billion.
is a Managing Director, the Head
of Securitized Credit Research, and a portfolio manager for Barings’ Investment Grade Fixed Income Group. Ms. Alekseeva shares
primary responsibility for the day-to-day management of the Short-Duration
Bond Fund. Ms. Alekseeva
has worked in the industry since 2005. Prior to re-joining Barings in 2019, Ms. Alekseeva was employed at Canada Pension Plan Investment
Board as a Principal in the Structured Credit department, following positions at Bank of America Merrill Lynch and PricewaterhouseCoopers.
is a Managing Director and portfolio
manager for Barings’ Investment Grade Fixed Income Group. Mr. Ehrenberg shares primary responsibility for the day-to-day management
of the Short-Duration Bond Fund.
Mr. Ehrenberg has worked in the industry since 2002 and his experience has encompassed portfolio management and credit analysis for
both investment grade and high yield corporate credit. Prior to joining Barings in 2004, Mr. Ehrenberg worked in capital markets
at MassMutual as part of the firm’s executive development program.
is a Managing Director and portfolio
manager for Barings’ U.S. High Yield Investments Group. Mr. Feeley shares primary responsibility for the day-to-day management
of the High Yield Fund.
Mr. Feeley is also a member of Barings’ U.S. High Yield Investment Committee and Global High Yield Allocation Committee. His
responsibilities include portfolio management for various high yield bond total return strategies. Mr. Feeley has worked in the industry
since 1996. Prior to joining Barings in 2003, he worked at Cigna Investment Management in project finance and at Credit Suisse in its
leveraged finance group.
is a Managing
Director and portfolio manager for Barings’ Emerging Markets Blended Total Return strategies. Ms. Krol shares primary responsibility
for the day-to-day management of the Short-Duration Bond
Fund. Ms. Krol is also a research analyst for the Barings Emerging Markets Corporate Debt
Team, and is responsible for covering global metals & mining and energy corporates. Ms. Krol has worked in the industry since
2002. Prior to joining Barings in 2014, Ms. Krol was employed at Schroders Investment Management as a credit analyst and Barclays
Capital as a research analyst.
is a Managing
Director and the Head of, and a portfolio manager for, Barings’ Emerging Markets Corporate Debt Group. Ms. Lawal shares primary
responsibility for the day-to-day management of the Short-Duration
Bond Fund. Ms. Lawal is also the lead portfolio manager for the Emerging Markets Corporate
Debt strategy, as well as a member of the Barings’ Emerging Markets Investment Committee. Ms. Lawal has worked in the industry
since 2000. Prior to joining Barings in 2014, Ms. Lawal was employed at Cosford Capital Management as a portfolio manager focusing
on high yield and distressed LATAM and CEEMEA corporates, following positions at Barclays Capital, and Deloitte & Touche/Arthur Andersen.
is a Managing
Director and the Co-Head of, and a portfolio manager for, Barings’ U.S. High Yield Investments Group. Mr. Roth shares primary
responsibility for the day-to-day management of the High
Yield Fund. Mr. Roth is also
chair of Barings’ U.S. High Yield Investment Committee and a portfolio manager for various high yield bond total return strategies.
Mr. Roth has worked in the industry since 1993. Prior to joining Barings in 2002, Mr. Roth was employed by Webster Bank, was
a high yield analyst at Times Square Capital Management, and was an underwriter at Chubb Insurance Company.
is a Managing
Director and the Head of, and a portfolio manager for, Barings’ Investment Grade Fixed Income Group. Mr. Sanford shares primary
responsibility for the day-to-day management of the Short-Duration
Bond Fund. Mr. Sanford is also responsible for the portfolio management of Barings’
multi-asset insurance client mandates as well as the investment grade corporate bond strategies. Mr. Sanford has worked in the industry
since 1994. Prior to joining Barings in 2004, Mr. Sanford was employed at Booz, Allen and Hamilton as a management consultant and
Bell South where he worked on mergers and acquisitions and internal consulting projects.
Douglas Trevallion, II,
CFA |
|
is a Managing
Director, the Head of Global Securitized and Liquid Products, and a portfolio manager for Barings’ Investment Grade Fixed Income
Group. Mr. Trevallion shares primary responsibility for the day-to-day management of the Short-Duration
Bond Fund. Mr. Trevallion is also responsible for the portfolio management of Barings’
securitized and multi-asset portfolio strategies. Mr. Trevallion has worked in the industry since 1987. Prior to joining Barings
in 2000, Mr. Trevallion was employed at MassMutual, where he established fixed income analytical and risk capabilities.
The Funds’ SAI provides additional
information about each portfolio manager’s compensation, other accounts managed by the portfolio managers, and each portfolio manager’s
ownership of securities in the relevant Fund.
MML Advisers has received exemptive relief
from the Securities and Exchange Commission (“SEC”) to permit it to change subadvisers or hire new subadvisers for a number
of the series of the Trust from time to time without obtaining shareholder approval. (In the absence of that exemptive relief, shareholder
approval might otherwise be required.) Several other mutual fund companies have received similar relief. MML Advisers believes having
this authority is important, because it allows MML Advisers to remove and replace a subadviser in a quick, efficient, and cost-effective
fashion when, for example, the subadviser’s performance is inadequate or the subadviser no longer is able to meet a Trust series’
investment objective and strategies. Pursuant to the exemptive relief, MML Advisers will provide to a Fund’s shareholders, within
90 days of the hiring of a new subadviser, an information statement describing the new subadviser. MML Advisers will not rely on
this authority for any Fund unless the Fund’s shareholders have approved this arrangement. As of the date of this Prospectus, this
exemptive relief is available to each Fund.
About the Classes of Shares – I, R5, Service, Administrative, R4, A, R3, Y, L,
and C Shares
Each Fund offers Class I,
Class R5, Service Class, Administrative Class, Class R4, Class A, Class R3, Class Y, and Class C shares.
The Short-Duration Bond Fund also offers Class L shares. The only differences among the various Classes are that (a) each Class
is subject to different expenses specific to that Class, including any expenses under a Rule 12b-1 Plan and administrative and shareholder
service expenses; (b) each Class has a different Class designation; (c) each Class has exclusive voting rights with respect
to matters solely affecting such Class; and (d) each Class has different exchange privileges. Not all of the Classes of a Fund are
available in every state.
Determining which share class is best
for you depends on the dollar amount you are investing and the number of years for which you are willing to invest. Purchases of
$500,000 or more cannot be made in Class C shares. Based on your personal situation, your financial intermediary can help you decide
which class of shares makes the most sense for you. A financial intermediary is entitled to receive compensation for purchases made through
the financial intermediary and may receive differing compensation for selling different classes of shares.
Shares of all
Classes, except Class I shares, may be subject to an administrative and shareholder services fee described above under “Management
of the Funds – Investment Adviser.” In addition, Class R4, Class A, Class R3, Class L, and
Class C shares are subject to servicing or distribution fees paid under a Rule 12b-1 Plan. Different fees and expenses of a
Class will affect performance of that Class. For actual past expenses of Class I, Class R5, Service Class, Administrative Class,
Class R4, Class A, and Class R3 shares, see the “Financial Highlights” tables later in this Prospectus. Investors
may receive different levels of service in connection with investments in different Classes of shares, and intermediaries may receive
different levels of compensation in connection with each share Class. For additional information, call us toll free at 1-888-309-3539
or contact a sales representative or financial intermediary who offers the Classes.
Shares of Class C
do not have any share class eligibility requirements. Class Y shares and Class L shares are sold through financial intermediaries
that have special agreements with ALPS
Distributors, Inc. (the “Distributor”),
or MML Advisers and its affiliates, for that purpose.
Class I,
Class R5, Service Class, and Administrative Class shares are offered primarily to institutional investors through institutional distribution
channels, such as employer-sponsored retirement plans or through broker-dealers, financial institutions, or insurance companies. Class R4,
Class A, Class R3, Class Y, Class L, and Class C shares are offered primarily through other distribution channels,
such as broker-dealers or financial institutions. Class I, Class A, Class Y, Class L, and Class C shares may
be purchased by individual investors through a financial intermediary or through a product sponsored by a financial intermediary. Class I,
Class R5, Service Class, Administrative Class, Class R4, Class A, and Class R3 shares are available for purchase by
insurance company separate investment accounts, qualified plans under Section 401(a) of the Code, Code Section 403(b) plans,
Code Section 457 plans, non-qualified deferred compensation plans, and other institutional investors.
Mutual funds and
collective trust funds may purchase Class I, Class R5, and Service Class shares. Class R5, Class R4, Class A,
and Class R3 shares may be purchased by voluntary employees’ beneficiary associations described in Code Section 501(c)(9).
Class A shares of either Fund may be purchased by individual retirement accounts described in Code Section 408.
Shareholders of
the High Yield Fund who held shares of the Fund prior to October 31, 2004 may purchase Service Class shares of that Fund.
Additional Information.
Purchases of Class Y
shares require an initial minimum investment of $100,000, and purchases of Class L and Class C shares require an initial minimum
investment of $1,000. For retirement plans, the investment minimum is $250 for each of the initial investment and subsequent investments
for Class Y, Class L, and Class C shares.
Present and former
officers, directors, trustees, and employees (and their eligible family members) of each Fund, MassMutual and its affiliates, and retirement
plans established for the benefit of such individuals, are also permitted to purchase Class A and Class Y shares of each Fund.
Class Y shares, which are sold at the NAV per
share without a sales charge, and Class L shares, which may be subject to a sales charge, are sold through financial intermediaries
that have special agreements with MML Advisers or its affiliates or the Distributor for that purpose. A financial intermediary that buys
Class Y or Class L shares for its customers’ accounts may impose charges on those accounts. The procedures for buying,
selling, exchanging, and transferring a Fund’s other classes of shares (other than the time those orders must be received by the
transfer agent) and some of the special account features available to investors buying other classes of shares do not apply to Class Y
and Class L shares. Instructions for buying, selling, exchanging, or transferring Class Y and Class L shares must be submitted
by a financial intermediary, not by its customers for whose benefit the shares are held.
A plan or institutional investor
will be permitted to purchase Class I, Class R5, Service Class, Administrative Class, Class R4, Class A, or Class R3
shares based upon the expected size (over time), servicing needs, or distribution or servicing costs for the plan or institutional investor
as determined by the Distributor or a financial intermediary, as applicable. A financial intermediary may, by agreement with the Distributor
or MML Advisers, make available to its plan or institutional clients shares of one such class or a limited number of such classes of the
Funds. An investor should consult its financial intermediary for information (including expense information) regarding the share class(es)
the intermediary will make available for purchase by the investor.
Class A
Shares
Class A
shares are sold at their offering price, which is normally NAV plus an initial sales charge. However, in some cases, as described below,
purchases are not subject to an initial sales charge, and the offering price will be the NAV. In other cases, reduced sales charges may
be available, as described below. Out of the amount you invest, the Fund receives the NAV to invest for your account.
The
sales charge varies depending on the amount of your purchase. A portion of the sales charge may be retained by the Distributor or allocated
to your dealer as a concession. The Distributor reserves the right to reallow the entire sales charge as a concession to dealers. The
current sales charge rates and concessions paid to dealers and brokers are as follows:
Front-End
Sales Charge (As a Percentage of Offering Price)/ Front-End Sales Charge (As a Percentage of Net Amount Invested)/ Concession (As a Percentage
of Offering Price) for Different Purchase Amounts:
|
|
|
|
|
|
|
|
|
|
|
Price Breakpoints |
|
|
General Equity |
|
|
General Taxable Bond
|
|
|
Shorter- Term Bond
|
|
Less than $25,000 |
|
|
5.50%/ |
|
|
4.25%/ |
|
|
2.50%/ |
|
|
5.82%/ |
|
|
4.44%/ |
|
|
2.56%/ |
|
|
4.50% |
|
|
3.50% |
|
|
2.00% |
|
$25,000 – $49,999
|
|
|
5.25%/ |
|
|
4.25%/ |
|
|
2.25%/ |
|
|
5.54%/ |
|
|
4.44%/ |
|
|
2.30%/ |
|
|
4.25% |
|
|
3.50% |
|
|
1.75% |
|
$50,000 – $99,999
|
|
|
4.50%/ |
|
|
4.00%/ |
|
|
2.00%/ |
|
|
4.71%/ |
|
|
4.17%/ |
|
|
2.04%/ |
|
|
3.50% |
|
|
3.25% |
|
|
1.50% |
|
$100,000 – $249,999
|
|
|
3.50%/ |
|
|
3.00%/ |
|
|
1.75%/ |
|
|
3.63%/ |
|
|
3.09%/ |
|
|
1.78%/ |
|
|
2.50% |
|
|
2.25% |
|
|
1.25% |
|
$250,000 – $499,999
|
|
|
2.25%/ |
|
|
1.75%/ |
|
|
1.25%/ |
|
|
2.30%/ |
|
|
1.78%/ |
|
|
1.27%/ |
|
|
1.75% |
|
|
1.50% |
|
|
0.75% |
|
$500,000 – $999,999
|
|
|
1.75%/ |
|
|
1.00%/ |
|
|
0.75%/ |
|
|
1.78%/ |
|
|
1.01%/ |
|
|
0.76%/ |
|
|
1.10% |
|
|
0.75% |
|
|
0.50% |
|
$1,000,000 or more |
|
|
None/ |
|
|
None/ |
|
|
None/ |
|
|
None/ |
|
|
None/ |
|
|
None/ |
|
|
0.75% |
|
|
0.50% |
|
|
0.50% |
|
A
reduced sales charge may be obtained for Class A shares under the Funds’ “Rights of Accumulation” because of the
economies of sales
efforts and reduction
in expenses realized by the Distributor, dealers, and brokers making such sales.
To
qualify for the lower sales charge rates that apply to larger purchases of Class A shares, you can add together:
•
Current purchases of Class A shares of more than one Fund subject to an initial sales charge
to reduce the sales charge rate that applies to current purchases of Class A shares; and
•
Class A shares of Funds you previously purchased subject to an initial or contingent deferred
sales charge to reduce the sales charge rate for current purchases of Class A shares, provided that you still hold your investment
in the previously purchased Funds.
The
Distributor will add the value, at current offering price, of the Class A shares you previously purchased and currently own to the
value of current purchases to determine the sales charge rate that applies. The reduced sales charge will apply only to current purchases.
You must request the reduced sales charge when you buy Class A shares and inform your broker-dealer or other financial intermediary
of Class A shares of any other Funds that you own. Information regarding reduced sales charges can be found on the MassMutual website
at https://www.massmutual.com/funds.
There
is no initial sales charge on purchases of Class A shares of any one or more of the Funds aggregating $1 million or more. The
Distributor pays dealers of record concessions in an amount equal to 0.75%, or 0.50% of purchases of $1 million or more, as shown
in the above table. The concession will not be paid on purchases of shares by exchange or that were previously subject to a front-end
sales charge and dealer concession.
If
you redeem any of those shares within a holding period of 18 months from the date of their purchase, a contingent deferred sales
charge of 1.0% will be deducted from the redemption proceeds (unless you are eligible for a waiver of that sales charge based on the categories
listed below and you advise the transfer agent or another intermediary of your eligibility for the waiver when you place your redemption
request).
Class L
Shares
Initial
Sales Charges
Your
purchases of Class L shares are made at the public offering price for these shares, that is, the
NAV per share for Class L shares plus a front-end
sales charge that is based on the amount of your initial investment when you open your account. The front-end sales charge you pay on
an additional investment is based on your total net investment in the Fund, including the amount of your additional purchase. Shares you
purchase with reinvested dividends or other distributions are not subject to a sales charge. As shown in the table below, a portion of
the sales charge is paid as a commission to your financial intermediary on the sale of Class L shares. The total amount of the sales
charge, if any, differs depending on the amount you invest, as shown in the table below.
|
|
|
|
|
|
|
|
|
|
|
Amount
of Purchase at Offering Price |
|
|
As a % of the Public Offering
Price |
|
|
As a % of Your Investment |
|
|
% of Offering Price Paid to Financial
Intermediary(1)
|
|
Under
$250,000 |
|
|
2.00 |
|
|
2.04 |
|
|
1.50 |
|
$250,000 or more |
|
|
0.00 |
|
|
0.00 |
|
|
0.50 |
|
(1)
Please
refer to the “Distribution Plan, Shareholder Servicing, and Payments to Intermediaries” section for all distribution and service
fees paid by the Fund. The Distributor will pay an investor’s financial intermediary an up-front commission of 1.50% on sales of
Class L shares for purchases under $250,000 and an up-front commission of 0.50% on sales of Class L shares for purchases of
$250,000 or more.
Purchases of Class L shares under
$250,000 have a front-end sales charge of 2.00% and purchases of Class L shares of $250,000 or more do not have a front-end sales
charge. For purchases of Class L shares of $250,000 or more, a contingent deferred sales charge (“CDSC”) of 0.50% is
applied to shares sold within the first eighteen months after they are purchased. The Distributor pays your financial intermediary
an up-front commission of 1.50% on sales of Class L shares for purchases under $250,000 and an up-front commission of 0.50% on sales
of Class L shares for purchases of $250,000 or more. Shares you purchase with reinvested dividends or other distributions are not
subject to a sales charge.
Purchases of Class L
shares made through a financial intermediary that had an agreement in place to sell Class A shares of the Barings Funds Trust will
not be subject to any sales charge.
Reduced Class L
Sales Charges for Larger Investments. You may pay a lower sales charge when purchasing Class L
shares through Rights of Accumulation, which work as follows: if the combined value (determined at the current public offering price)
of your accounts in all classes of
shares of the Fund and other Participating Funds (as
defined below) maintained by you, your spouse, or your minor children, together with the value (also determined at the current public
offering price) of your current purchase, reaches a sales charge discount level (according to the above chart), your current purchase
will receive the lower sales charge, provided that you have notified the Distributor and your financial intermediary, if any, in writing
of the identity of such other accounts and your relationship to the other account holders and submitted information (such as account statements)
sufficient to substantiate your eligibility for a reduced sales charge. Such reduced sales charge will be applied upon confirmation of
such shareholders’ holdings by the Fund’s transfer agent. The Fund may terminate or amend this Right of Accumulation at any
time without notice. As used herein, “Participating Funds” refers to any series of MassMutual Advantage Funds, Classes Y and
C of the High Yield Fund, and Classes Y, L, and C of the Short-Duration Bond Fund. You may also pay a lower sales charge when purchasing
Class L shares and shares of other Participating Funds by signing a Letter of Intent within 90 days of your purchase. By doing
so, you would be able to pay the lower sales charge on all purchases by agreeing to invest a total of at least $100,000 within 13 months.
If your Letter of Intent purchases are not completed within 13 months, your account will be adjusted by redemption of the amount
of shares needed to pay the higher initial sales charge level for the amount actually purchased. Upon your request, a Letter of Intent
may reflect purchases within the previous 90 days. See the SAI for additional information about this privilege. In addition, certain
investors may purchase shares at no sales charge or at a reduced sales charge. For example, Class L shares are offered at no sales
charge to investors who are clients of financial intermediaries who have entered into an agreement with the Distributor to offer Fund
shares through self-directed investment brokerage accounts without charging transaction fees to their clients or through other platforms.
See Appendix A of this Prospectus and the SAI for a description of this and other situations in which sales charges are reduced or
waived. The Fund makes available free of charge on MassMutual’s website (https://www.massmutual.com/funds)
information regarding its sales charges, arrangements that result in breakpoints of the sales charges, the methods used to value accounts
in order to determine whether an investor has met a breakpoint, and the information investors must provide to
verify eligibility for a breakpoint.
Hyperlinks that facilitate access to such information are available on MassMutual’s website.
Class C
Shares
Your purchases of Class C shares
are made at the NAV per share for Class C shares. Although Class C shares have no front-end sales charge, they carry a CDSC
of 0.50% in the case of the Short-Duration Bond Fund, or 1.00% in the case of the High Yield Fund, that is applied to shares sold within
the first year after they are purchased. After holding Class C shares for one year, you may sell them at any time without paying
a CDSC. Shares you purchase with reinvested dividends or other distributions are not subject to a sales charge. The Distributor pays your
financial intermediary an up-front commission on sales of Class C shares of 0.65% in the case of the Short-Duration Bond Fund, or
1.00% in the case of the High Yield Fund.
Class C shares held through a
financial intermediary in an omnibus account will be converted into Class L shares only if the intermediary can document that the
shareholder has met the required holding period. In certain circumstances, for example, when shares are invested through retirement plans
or omnibus accounts, a financial intermediary may not have transparency into how long a shareholder has held Class C shares for purposes
of determining whether such Class C shares are eligible for automatic conversion into Class L shares. Thus, the financial intermediary
may not have the ability to track purchases to credit individual shareholders’ holding periods. In these circumstances, a Fund may
not be able to automatically convert Class C shares into Class L shares as described above. In order to determine eligibility
for conversion in these circumstances, it is the responsibility of the shareholder or its financial intermediary to notify the Fund that
the shareholder is eligible for the conversion of Class C shares to Class L shares, and the shareholder or their financial intermediary
may be required to maintain and provide the Fund with records that substantiate the holding period of Class C shares. For clients
of financial intermediaries, it is the financial intermediary’s responsibility (and not the Funds’) to keep records and to
ensure that the shareholder is credited with the proper holding period. Please consult with your financial intermediary about your shares’
eligibility for this conversion feature. In addition,
for shareholders invested in Class C shares through a financial intermediary, Class C shares may be automatically exchanged
for Class L shares of the Fund under the policies of the financial intermediary, as described in Appendix A of this Prospectus.
It is solely the responsibility of the respective financial intermediary to administer and support such transactions. Please consult your
financial intermediary for more information.
Contingent
Deferred Sales Charges
As described
above, certain investments in Class A, Class L, and Class C shares are subject to a CDSC. You will pay the CDSC only on
shares you redeem within the prescribed amount of time after purchase. The CDSC is applied to the NAV at the time of purchase or redemption,
whichever is lower. For purposes of calculating the CDSC, the start of the holding period is the date on which the purchase is made. A
contingent deferred sales charge is not imposed on:
•
the
amount of your account value represented by an increase in NAV over the initial purchase price,
•
shares
purchased by the reinvestment of dividends or capital gains distributions, or
•
shares
redeemed in the special circumstances described below.
To determine whether
a contingent deferred sales charge applies to a redemption, the Fund redeems shares in the following order:
1.
shares
acquired by reinvestment of dividends and capital gains distributions, and
2.
shares
held the longest.
Contingent deferred
sales charges are not charged when you exchange shares of the Fund for shares of any other Fund. However, if you exchange them within
the applicable contingent deferred sales charge holding period, the holding period will carry over to the Fund whose shares you acquire.
Similarly, if you acquire shares of a Fund by exchanging shares of another Fund that are still subject to a contingent deferred sales
charge holding period, that holding period will carry over to the acquired Fund.
In certain circumstances, CDSCs may
be waived, as described below and in the SAI.
Sales
Charge Waivers by Class
Waivers
of Class A Initial Sales Charges
The Class A
sales charges will be waived for shares purchased in the following types of transactions:
•
Purchases
into insurance company separate investment accounts.
•
Purchases
into retirement plans or other employee benefit plans.
•
Purchases
of Class A shares aggregating $1 million or more of any one or more of the Funds.
•
Purchases
into accounts for which the brokerdealer of record has entered into a special agreement with the Distributor allowing this waiver.
•
Purchases into accounts for which no sales concession is paid to any broker-dealer or other financial
intermediary at the time of sale.
•
Shares
sold to MassMutual or its affiliates.
•
Shares
sold to registered management investment companies or separate accounts of insurance companies having an agreement with MassMutual, MML
Advisers, or the Distributor for that purpose.
•
Shares
issued in plans of reorganization to which the Fund is a party.
•
Shares
sold to present or former officers, directors, trustees, or employees (and their “immediate families(1)”)
of the Fund, MassMutual, and its affiliates.
•
Shares
sold to a portfolio manager of the Fund.
Waivers
of Class A Contingent Deferred Sales Charges
The Class A
contingent deferred sales charges will not be applied to shares purchased in certain types of transactions or redeemed in certain circumstances
described below.
A. Waivers for Redemptions
in Certain Cases.
The Class A
contingent deferred sales charges will be waived for redemptions of shares in the following cases:
•
Redemptions
from insurance company separate investment accounts.
•
Redemptions
from retirement plans or other employee benefit plans.
•
Redemptions from accounts other than retirement plans following the death
or disability
of the last surviving shareholder, including a trustee of a grantor trust or revocable living trust for which the trustee is also the
sole beneficiary. The death or disability must have occurred after the account was established, and for disability you must provide evidence
of a determination of disability by the Social Security Administration.
•
Redemptions
from accounts for which the broker-dealer of record has entered into a special agreement with the Distributor allowing this waiver.
•
Redemptions
from accounts for which no sales concession was paid to any broker-dealer or other financial intermediary at the time of sale.
•
Redemptions
of Class A shares under an automatic withdrawal plan from an account other than a retirement plan if the aggregate value of the redeemed
shares does not exceed 10% of the account’s value annually.
•
In
the case of an IRA, to make distributions required under a divorce or separation agreement described in Section 71(b) of the Code.
B. Waivers for
Shares Sold or Issued in Certain Transactions.
The contingent
deferred sales charge is also waived on Class A shares sold or issued in the following cases:
•
Shares
sold to MassMutual or its affiliates.
•
Shares
sold to registered management investment companies or separate accounts of insurance companies having an agreement with MassMutual, MML
Advisers, or the Distributor for that purpose.
•
Shares
issued in plans of reorganization to which the Fund is a party.
•
Shares
sold to present or former officers, directors, trustees, or employees (and their “immediate families(1)”)
of the Fund, MassMutual, and its affiliates.
•
Shares
sold to a present or former portfolio manager of the Fund.
(1)
The term “immediate family” refers to one’s spouse, children, grandchildren, grandparents,
parents, parents-in-law, brothers and sisters, sons- and daughters-in-law, a sibling’s spouse, a spouse’s siblings, aunts,
uncles, nieces, and nephews; relatives by virtue of a remarriage (step-children, step-parents, etc.) are included.
Distribution
Plan, Shareholder Servicing, and Payments to
Intermediaries
Shares of all classes of the Funds,
other than Class A and Class L shares, are sold without a front-end sales charge, and only Class L and Class C shares
are subject to a deferred sales charge. Class A shares are sold at NAV per share plus an initial sales charge, Class L shares
are sold at NAV per share plus an initial sales charge and any contingent deferred sales charge, and Class C shares are sold at NAV
per share plus any contingent deferred sales charge.
Rule 12b-1
fees. The Funds have adopted a Rule 12b-1 Plan (the “Plan”). Under the Plan,
the Short-Duration Bond Fund may make payments at an annual rate of up to 0.25% of the average daily net assets attributable to its Class L
shares and up to 0.50% of the average daily net assets attributable to its Class C shares; the High Yield Fund may make payments
at an annual rate of up to 1.00% of the average daily net assets attributable to its Class C shares; and each Fund may make payments
at an annual rate of up to 0.25% of the average daily net assets attributable to its Class R4 shares and Class A shares, and
up to 0.50% of the average daily net assets attributable to its Class R3 shares. The Plan is a compensation plan, under which the
Funds make payments to the Distributor for the services it provides and for the expenses it bears in connection with the distribution
of Class R4, Class A, Class R3, Class L, and Class C shares, and for the servicing of Class R4, Class A, Class R3, Class L,
and Class C, shareholders. Because Rule 12b-1 fees are paid out of the Funds’ Class R4, Class A, Class R3,
Class L, and Class C assets on an ongoing basis, they will increase the cost of your investment and may cost you more than paying
other types of sales loads. All Class R4, Class A, Class R3, Class L, and Class C shareholders share in the expense
of Rule 12b-1 fees paid by those classes. A Fund may pay distribution fees and other amounts described in this Prospectus at a time
when shares of that Fund are unavailable for purchase.
Shareholder servicing
payments. MML Advisers pays all or a portion of the administrative and shareholder services
fee it receives from each Fund, as described above under “Management of the Funds – Investment Adviser,”
to intermediaries as compensation for, or reimbursement of expenses relating to, services provided to shareholders of the Funds.
Payments to intermediaries.
The Distributor and MML Advisers may make payments to financial intermediaries for distribution and/or shareholder services provided by
them. Financial intermediaries are firms that, for compensation, sell shares of mutual funds, including the Funds, and/or provide certain
administrative and account maintenance services to mutual fund shareholders. Financial intermediaries may include, among others, brokers,
financial planners or advisers, banks, and insurance companies. In some cases, a financial intermediary may hold its clients’ Fund
shares in nominee or street name. Shareholder services provided by a financial intermediary may (though they will not necessarily) include,
among other things: processing and mailing trade confirmations, periodic statements, prospectuses, annual reports, semiannual reports,
shareholder notices, and other SEC-required communications; capturing and processing tax data; issuing and mailing dividend checks to
shareholders who have selected cash distributions; preparing record date shareholder lists for proxy solicitations; collecting and posting
distributions to shareholder accounts; and establishing and maintaining systematic withdrawals and automated investment plans and shareholder
account registrations.
The Distributor
and MML Advisers may retain a portion of the Rule 12b-1 payments and/or shareholder servicing payments received by them, or they
may pay the full amount to intermediaries. Rule 12b-1 fees may be paid to financial intermediaries in advance for the first year
after Class R4, Class A, Class R3, Class L, and Class C shares are sold. After the first year, those fees will
be paid on a quarterly basis.
The compensation paid to a financial
intermediary is typically paid continually over time, during the period when the intermediary’s clients hold investments in the
Funds. The amount of continuing compensation paid to different financial intermediaries for distribution and/or shareholder services varies.
The compensation is typically a percentage of the value of the financial intermediary’s clients’ investments in the Funds
or a per account fee. The variation in compensation may, but will not necessarily, reflect enhanced or additional services provided by
the intermediary.
Additional information.
The Distributor may directly, or through an affiliate, pay a sales
concession of up to 1.00% of the
purchase price of Service Class, Administrative Class, Class R4, Class A, Class R3, Class Y, Class L, and Class C
shares to broker-dealers or other financial intermediaries at the time of sale. However, the total amount paid to broker-dealers or other
financial intermediaries at the time of sale, including any advance of Rule 12b-1 service fees or shareholder services fees, may
not be more than 1.00% of the purchase price.
In addition to the various payments
described above, MML Advisers in its discretion may directly, or through an affiliate, pay up to 0.35% of the amount invested to intermediaries
who provide services on behalf of shareholders of the Funds. This compensation is paid by MML Advisers from its own assets. The payments
will be based on criteria established by MML Advisers and will be paid quarterly, in arrears.
MassMutual, the parent company of MML
Advisers, pays to an affiliate of Empower Retirement, LLC (“Empower”) an amount equal to the profit realized by MML Advisers
with respect to shares beneficially owned by retirement plans through recordkeeping platforms maintained by Empower or an affiliate.
The Distributor, MML Advisers, or MassMutual
may also directly, or through an affiliate, make payments, out of its own assets, to intermediaries, including broker-dealers, insurance
agents, and other service providers, that relate to the sale of shares of the Funds or certain of MassMutual’s variable annuity
contracts for which the Funds are underlying investment options. This compensation may take the form of:
•
Payments
to administrative service providers that provide enrollment, recordkeeping, and other services to pension plans;
•
Cash
and non-cash benefits, such as bonuses and allowances or prizes and awards, for certain
broker-dealers, administrative service
providers, and MassMutual insurance agents;
•
Payments
to intermediaries for, among other things, training of sales personnel, conference support, marketing, or other services provided to promote
awareness of MassMutual’s products;
•
Payments
to broker-dealers and other intermediaries that enter into agreements providing the Distributor with access to representatives of those
firms or with other marketing or administrative services; and
•
Payments
under agreements with MassMutual not directly related to the sale of specific variable annuity contracts or the Funds, such as educational
seminars and training or pricing services.
In some instances, compensation may
be made available only to certain financial intermediaries whose representatives have sold or are expected to sell significant amounts
of shares. Dealers may not use sales of the Funds’ shares to qualify for this compensation to the extent prohibited by the laws
or rules of any state or any self-regulatory agency, such as the Financial Industry Regulatory Authority.
These compensation arrangements are
not offered to all intermediaries and the terms of the arrangements may differ among intermediaries.
These arrangements may provide an intermediary
with an incentive to recommend one mutual fund over another, one share class over another, or one insurance or annuity contract over another.
You may want to take these compensation arrangements into account when evaluating any recommendations regarding the Funds or any contract
using the Funds as investment options. You may contact your intermediary to find out more information about the compensation they may
receive in connection with your investment.
Buying,
Redeeming, and Exchanging Shares
The Funds sell their shares at a price equal to their
NAV plus any initial sales charge that applies (see “Determining Net Asset Value” below). The Funds have authorized one or
more broker-dealers or other intermediaries to receive purchase orders on their behalf. Such broker-dealers or other intermediaries may
themselves designate other intermediaries to receive purchase orders on the Funds’ behalf. Your purchase order will be priced at
the next NAV calculated after your order is received in good order by the transfer agent, MML Advisers, such a broker-dealer, or another
intermediary authorized for this purpose. If you purchase shares through a broker-dealer or other intermediary, then, in order for your
purchase to be based on a Fund’s next determined NAV, the broker-dealer or other intermediary must receive your request before the
close of regular trading on the New York Stock Exchange (“NYSE”) (normally, 4:00 p.m. Eastern time), and the broker-dealer
or other intermediary must subsequently communicate the request properly to the Funds. Shares purchased through a broker-dealer or other
intermediary may be subject to transaction and/or other fees. The Funds will suspend selling their shares during any period when the determination
of NAV is suspended. The Funds can reject any purchase order and can suspend purchases if they believe it is in their best interest.
The Funds have authorized one or more
broker-dealers or other intermediaries to receive redemption requests on their behalf. Such broker-dealers or other intermediaries may
themselves designate other intermediaries to receive redemption requests on the Funds’ behalf. The Funds redeem their shares at
their next NAV computed after your redemption request is received by the transfer agent, MML Advisers, such a broker-dealer, or another
intermediary. If you redeem shares through a broker-dealer or other intermediary, then, in order for your redemption price to be based
on a Fund’s next determined NAV, the broker-dealer or other intermediary must receive your request before the close of regular trading
on the NYSE, and the broker-dealer or other intermediary must subsequently communicate the request properly to the Funds. Shares redeemed
through a broker-dealer or other intermediary may be subject to transaction and/or other fees. You will usually receive payment for your
shares within seven days after your redemption request is received in good order. If, however, you
request redemption of shares recently purchased by
check, you may not receive payment until the check has been collected, which may take up to 15 days from time of purchase. Under
unusual circumstances, the Funds can also suspend or postpone payment, when permitted by applicable law and regulations. The Funds’
transfer agent may temporarily delay for more than seven days the disbursement of redemption proceeds from the Fund account of a “Specified
Adult” (as defined in Financial Industry Regulatory Authority Rule 2165) based on a reasonable belief that financial
exploitation of the Specified Adult has occurred, is occurring, has been attempted, or will be attempted, subject to certain conditions.
Under normal circumstances, each Fund expects to meet redemption requests by using cash or cash equivalents in its portfolio and/or selling
portfolio assets to generate cash. Under stressed market conditions, a Fund may pay redemption proceeds using cash obtained through borrowing
arrangements that may be available from time to time. To the extent consistent with applicable laws and regulations, the Funds reserve
the right to satisfy all or a portion of a redemption request by distributing securities or other property in lieu of cash (“in-kind”
redemptions), under both normal and stressed market conditions. Some Funds may be limited in their ability to use assets other than cash
to meet redemption requests due to restrictions on ownership of their portfolio assets. The securities distributed in an in-kind redemption
will be valued in the same manner as they are valued for purposes of computing the Fund’s NAV. These securities are subject to market
risk until they are sold and may increase or decrease in value prior to converting them into cash. You may incur brokerage and other transaction
costs, and could incur a taxable gain or loss for income tax purposes when converting the securities to cash.
The USA PATRIOT Act may require a Fund,
a financial intermediary, or its authorized designee to obtain certain personal information from you which will be used to verify your
identity. If you do not provide the information, it may not be possible to open an account. If a Fund, a financial intermediary, or authorized
designee is unable to verify your customer information, the Fund reserves the right to close your account or to take such other steps
as it deems reasonable.
Risk of Substantial
Redemptions. If substantial numbers of shares in a Fund were to be redeemed
at the same time or at approximately the same time,
the Fund might be required to liquidate a significant portion of its investment portfolio quickly to meet the redemptions. A Fund might
be forced to sell portfolio securities at prices or at times when it would otherwise not have sold them, resulting in a reduction in the
Fund’s NAV; in addition, a substantial reduction in the size of a Fund may make it difficult for the investment adviser or subadviser
to execute its investment program successfully for the Fund for a period following the redemptions. Similarly, the prices of the portfolio
securities of a Fund might be adversely affected if one or more other investment accounts managed by the investment adviser or subadviser
in an investment style similar to that of the Fund were to experience substantial redemptions and those accounts were required to sell
portfolio securities quickly or at an inopportune time.
Exchanges
Generally, you
can exchange shares of one Fund for the same class of shares of another MassMutual Fund, except in the case of the MassMutual U.S. Government
Money Market Fund, MassMutual Total Return Bond Fund, and MM S&P 500®
Index Fund and, with respect to certain series of the Trust, in those cases when exchanges are not permitted, as described in the applicable
Prospectus under “Placing Transaction Orders—For Shareholders
holding shares of the Trust prior to November 1, 2004.” Any share class of another
series may be exchanged for Class R5 shares of the MassMutual U.S. Government Money Market Fund. If Class R5 shares of the MassMutual
U.S. Government Money Market Fund are exchanged for Class A shares of another series, any sales charge applicable to those Class A shares
will typically apply. For individual retirement accounts described in Code Section 408, Class R5 shares of the MassMutual U.S. Government
Money Market Fund may only be exchanged for Class A shares of another series (in which case any sales charge applicable to those Class
A shares will typically apply), Class R4 shares of the MassMutual Total Return Bond Fund and MM S&P 500 Index Fund may only be exchanged
for Class A shares of another series (in which case any sales charge applicable to those Class A shares will typically apply), and Class
A shares of any other series may only be exchanged for Class R4 shares of the MassMutual Total Return Bond Fund and MM S&P 500 Index
Fund. An exchange is treated as a sale of shares in one series and a purchase of shares in another series at the NAV next determined after
the exchange request is received
and accepted by the transfer agent,
MML Advisers, a broker-dealer, or another intermediary authorized for this purpose. You can only exchange into shares of another series
if you meet any qualification requirements of the series into which you seek to exchange (for example, shares of some series are not available
to purchasers through certain investment channels, and some may be available only to certain types of shareholders). In addition, in limited
circumstances, such as those described above, for certain series the share class available for exchange may not be the same share class
as the series from which you are exchanging. Exchange requests involving a purchase into most series (except the Short-Duration Bond Fund,
High Yield Fund, MassMutual Strategic Bond Fund, MassMutual U.S. Government Money Market Fund, MassMutual Inflation-Protected and Income
Fund, MassMutual Core Bond Fund, MassMutual Diversified Bond Fund, MassMutual Global Floating Rate Fund, MassMutual Global Credit Income
Opportunities Fund, and MassMutual Emerging Markets Debt Blended Total Return Fund), however, will not be accepted if you have already
made a purchase followed by a redemption involving the same series within the last 60 days. This restriction does not apply to rebalancing
trades executed by any of the MassMutual RetireSMARTSM by JPMorgan Funds, MassMutual Select T. Rowe Price Retirement Funds, and MassMutual
Target Allocation Funds. This restriction also does not apply to exchanges made pursuant to certain asset allocation programs, systematic
exchange programs, and dividend exchange programs. If you place an order to exchange shares of one series for another through a broker-dealer
or other intermediary then, in order for your exchange to be effected based on the series’ next determined NAVs, the broker-dealer
or other intermediary must receive your request before the close of regular trading on the NYSE, and the broker-dealer or other intermediary
must subsequently communicate the request properly to the MassMutual Funds.
Your right to exchange shares is subject
to applicable regulatory requirements or contractual obligations. The Funds may limit, restrict, or refuse exchange purchases, if, in
the opinion of MML Advisers:
•
you
have engaged in excessive trading;
•
a
Fund receives or expects simultaneous orders affecting significant portions of the Fund’s assets;
•
a pattern of exchanges occurs
which coincides with a market timing strategy; or
•
the
Fund would be unable to invest the funds effectively based on its investment objectives and policies or if the Fund would be adversely
affected.
The Funds reserve the right to modify
or terminate the exchange privilege as described above on 60 days written notice.
The Funds do not accept purchase,
redemption, or exchange orders or compute their NAVs on days when the NYSE is closed. This includes: weekends, Good Friday, and all federal
holidays other than Columbus Day and Veterans Day. Certain foreign markets may be open on days when the Funds do not accept orders or
price their shares. As a result, the NAV of a Fund’s shares may change on days when you will not be able to buy or sell shares.
Placing
Transaction Orders–For Shareholders holding shares of the Trust prior to November 1, 2004
Shareholders of the Trust who
held their shares prior to November 1, 2004 (when the Trust’s name changed from The DLB Fund Group) and who previously
placed transaction orders directly with the Trust through a DLB Fund Coordinator, will place trades by telephone or in writing directly
with the transfer agent. With respect to shares received on November 1, 2004 by former DLB Fund Group investors, transaction
orders are limited to purchases and redemptions. These shares may not be exchanged for shares of another Fund of the Trust.
Transaction
Orders by Telephone and in Writing
In general, you may purchase, exchange,
or sell (redeem) shares on any business day through your financial intermediary or by contacting the transfer agent in writing or by telephone
(“MassMutual Premier Funds – (Fund Name),” Attn: Transfer Agent, P.O. Box 1920, Denver, CO 80201 or
by telephone: 1-855-439-5459).
How to Invest
Outlined below are various methods
for buying shares of the Funds:
Method |
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Instructions |
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Through your financial intermediary |
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Your financial intermediary can help you establish
your account and buy shares on your behalf. To receive the current trading day’s price, your financial intermediary must receive
your request in good order prior to the close of regular trading on the New York Stock Exchange, usually 4:00 p.m., Eastern time.
Your financial intermediary may charge you fees for executing the purchase for you. |
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By exchange |
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You or your financial intermediary
may acquire shares of a Fund for your account by exchanging shares you own in certain other funds advised by MML Advisers for shares of
the same class of a Fund, subject to the conditions described in “Exchanges” above. In addition, you or your financial intermediary
may exchange shares of a class of a Fund you own for shares of a different class of the same Fund, subject to the conditions described
in “Exchanges.” To exchange, send written instructions to the applicable Fund, at the address noted below(1)
or call 1-855-439-5459. |
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By wire |
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You may purchase shares of a Fund by wiring money from your bank account to your Fund account.
Prior to sending wire transfers, please contact Shareholder Services at 1-855-439-5459 for specific wiring instructions and to facilitate
prompt and accurate credit upon receipt of your wire.
To receive the current trading day’s price, your wire, along with
a valid account number, must be received in your Fund account prior to the close of regular trading on the New York Stock Exchange, usually
4:00 p.m., Eastern time.
If your initial purchase of shares is by wire, you must first complete
a new account application and promptly mail it to MassMutual Premier Funds – (Fund Name), at the address noted
below.(1)
After completing a new account application, please call 1-855-439-5459 to obtain your account number. Please include your account number
on the wire. |
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By electronic funds |
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You may purchase shares of a Fund by electronically
transferring money from |
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Method |
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Instructions |
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transfer via an automated clearing house (“ACH”)
transaction(2) |
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your bank account to your Fund account by calling
1-855-439-5459. An electronic funds transfer may take up to two business days to settle and be considered in good order. You must set
up this feature prior to your telephone request. Be sure to complete the appropriate section of the application. |
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By check |
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To purchase shares of a Fund
by check, make your check payable to ‘MassMutual Premier Funds’. Your checks should include the fund name which you would
like to purchase along with your account number (if previously established). Your request should be mailed to the address listed below.(1)
The Funds will accept purchases only in U.S. dollars drawn from U.S. financial institutions. Cashier’s checks, third party checks,
money orders, credit card convenience checks, cash or equivalents, or payments in foreign currencies are not acceptable forms of payment.
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(1)
Regular
Mail: “MassMutual Premier Funds – (Fund Name),” Attn: Transfer Agent, P.O. Box 1920, Denver, CO 80201.
Overnight
Mail: “MassMutual Premier Funds – (Fund Name),” Attn: Transfer Agent, 1290 Broadway, Suite 1000, Denver,
CO 80203.
(2)
The
redemption of shares purchased by ACH transaction is subject to certain limitations (see “Redemption of Shares”). Any purchase
by ACH transaction that does not clear may be cancelled, and the investor will be responsible for any associated expenses and losses to
the applicable Fund.
In the case of individuals holding shares in a Fund directly,
upon the redemption or exchange of shares in a Fund, the Fund or, if a shareholder purchased shares through a financial intermediary,
the financial intermediary generally will be required to provide the shareholder and the Internal Revenue Service (“IRS”)
with cost basis and certain other related tax information about the Fund shares redeemed or exchanged. Please contact
the Funds by calling 1-888-309-3539 or consult your
financial intermediary, as appropriate, for more information regarding available methods for cost basis reporting and how to select or
change a particular method.
Please consult your tax adviser to
determine which available cost basis method is best for you.
Frequent
Trading Policies
Purchases and exchanges of shares of the Funds should
be made for investment purposes only. The Funds discourage, and do not accommodate, excessive trading and/or market timing activity. Excessive
trading and/or market timing activity involving the Funds can disrupt the management of the Funds. These disruptions, in turn, can result
in increased expenses and can have an adverse effect on Fund performance.
The Trustees, on behalf of the Funds,
have approved the policies and procedures adopted by MML Advisers to help identify those individuals or entities MML Advisers determines
may be engaging in excessive trading and/or market timing activities. MML Advisers monitors trading activity to uniformly enforce its
procedures. However, those who engage in such activities may employ a variety of techniques to avoid detection. Therefore, despite MML
Advisers’ efforts to prevent excessive trading and/or market timing trading activities, there can be no assurance that MML Advisers
will be able to identify all those who trade excessively or employ a market timing strategy and curtail their trading in every instance.
The monitoring process involves scrutinizing
transactions in fund shares that exceed certain monetary thresholds or numerical limits within a specified period of time. Trading activity
identified by either, or a combination, of these factors, or as a result of any other information actually available at the time, will
be evaluated to determine whether such activity might constitute excessive trading and/or market timing activity. When trading activity
is determined by a Fund or MML Advisers, in their sole discretion, to be excessive in nature, certain account-related privileges, such
as the ability to place purchase, redemption, and exchange orders over the internet, may be suspended for such account.
Omnibus Account Limitations. Omnibus
accounts, in which shares are held in the name of an
intermediary on behalf of multiple investors, are a
common form of holding shares among retirement plans and other financial intermediaries such as broker-dealers, advisers, and third-party
administrators. Not all omnibus accounts apply the policies and procedures adopted by the Funds and MML Advisers. Some omnibus accounts
may have different or less restrictive policies and procedures regarding frequent trading, or no trading restrictions at all. If you hold
your Fund shares through an omnibus account, that financial intermediary may impose its own restrictions or limitations to discourage
excessive trading and/or market timing activity. You should consult your financial intermediary to find out what trading restrictions,
including limitations on exchanges, may apply. The Funds’ ability to identify and deter excessive trading and/or market timing activities
through omnibus accounts is limited, and the Funds’ success in accomplishing the objectives of the policies concerning frequent
trading of Fund shares in this context depends significantly upon the cooperation of the financial intermediaries. Because the Funds receive
these orders on an aggregated basis and because the omnibus accounts may trade with numerous fund families with differing frequent trading
policies, the Funds are limited in their ability to identify or deter those individuals or entities that may be engaging in excessive
trading and/or market timing activities. While the Funds and MML Advisers encourage those financial intermediaries to apply the Funds’
policies to their customers who invest indirectly in the Funds, the Funds and MML Advisers may need to rely on those intermediaries to
monitor trading in good faith in accordance with its or the Funds’ policies, since individual trades in omnibus accounts are often
not disclosed to the Funds. While the Funds will generally monitor trading activity at the omnibus account level to attempt to identify
excessive trading and/or market timing activity, reliance on intermediaries increases the risk
that excessive trading and/or market timing activity
may go undetected. If evidence of possible excessive trading and/or market timing activity is observed by the Funds, the financial intermediary
that is the registered owner will be asked to
review the account activity, and to confirm to the
Funds that appropriate action has been taken to limit any excessive trading and/or market timing activity.
Determining
Net Asset Value
The NAV of each Fund’s shares
is determined once daily as of the close of regular trading on the NYSE, on each Business Day. A “Business Day” is every day
the NYSE is open. The NYSE normally closes at 4:00 p.m. Eastern Time, but may close earlier on some days. If the NYSE is scheduled
to close early, the Business Day will be considered to end as of the time of the NYSE’s scheduled close. A Fund will not treat an
intraday disruption in NYSE trading or other event that causes an unscheduled closing of the NYSE as a close of business of the NYSE for
these purposes and will instead fair value securities in accordance with procedures approved annually by the Trustees, and under the general
oversight of the Trustees. The NYSE currently is not open for trading on New Year’s Day, Martin Luther King, Jr. Day, President’s
Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
Each Fund calculates the NAV of each of its classes of shares by dividing the total value of the assets attributable to that class, less
the liabilities attributable to that class, by the number of shares of that class that are outstanding. On holidays and other days when
the NYSE is closed, each Fund’s NAV generally is not calculated and the Funds do not anticipate accepting buy or sell orders. However,
the value of each Fund’s assets may still be affected on such days to the extent that a Fund holds foreign securities that trade
on days that foreign securities markets are open.
Equity securities and derivative contracts
that are actively traded on a national securities exchange or contract market are valued on the basis of information furnished by a pricing
service, which provides the last reported sale price, or, in the case of futures contracts, the settlement price, for securities or derivatives
listed on the exchange or contract market or the official closing price on the NASDAQ National Market System (“NASDAQ System”),
or in the case of OTC securities for which an official closing price is unavailable or not reported on the NASDAQ System, the last reported
bid price. Portfolio securities traded on more than one national securities exchange are valued at the last price at the close of the
exchange representing
the principal market for such securities. Debt securities
are valued on the basis of valuations furnished by a pricing service, which generally determines valuations taking into account factors
such as institutional-size trading in similar securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics,
and other market data. Shares of other open-end mutual funds are valued at their closing NAVs as reported on each Business Day.
Investments for
which market quotations are readily available are marked to market daily based on those quotations. Market quotations may be provided
by third-party vendors or market makers, and may be determined on the basis of a variety of factors, such as broker quotations, financial
modeling, and other market data, such as market indexes and yield curves, counterparty information, and foreign exchange rates. U.S. Government
and agency securities may be valued on the basis of market quotations or using a model that may incorporate market observable data such
as reported sales of similar securities, broker quotes, yields, bids, offers, quoted market prices, and reference data. The fair values
of OTC derivative contracts, including forward, swap, and option contracts related to interest rates, foreign currencies, credit standing
of reference entities, equity prices, or commodity prices, may be based on market quotations or may be modeled using a series of techniques,
including simulation models, depending on the contract and the terms of the transaction. The fair values of asset-backed securities and
mortgage-backed securities are estimated based on models that consider the estimated cash flows of each debt tranche of the issuer, established
benchmark yield, and estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche including,
but not limited to, prepayment speed assumptions and attributes of the collateral.
Investments for which market quotations
are not available or for which a pricing service or vendor does not provide a value, or for which such market quotations or values are
considered by the investment adviser or subadviser to be unreliable
(including, for example, certain foreign securities,
thinly-traded securities, certain restricted securities, certain initial public offerings, or securities whose values may have been affected
by a significant event) are stated at fair valuations determined in good faith by the Funds’ Valuation Committee in accordance with
procedures approved annually by the Trustees, and under the general oversight of the Trustees. It is possible that fair value prices will
be used by the Funds to a significant extent. The value determined for an investment using the Funds’ fair value procedures may
differ from recent market prices for the investment and may be significantly different from the value realized upon the sale of such investment.
The Funds may invest in securities
that are traded principally in foreign markets and that trade on weekends and other days when the Funds do not price their shares. As
a result, the values of the Funds’ portfolio securities may change on days when the prices of the Funds’ shares are not calculated.
The prices of the Funds’ shares will reflect any such changes when the prices of the
Funds’ shares are next calculated, which is the
next Business Day. The Funds may use fair value pricing more frequently for securities primarily traded in foreign markets because, among
other things, most foreign markets close well before the Funds value their securities. The earlier close of these foreign markets gives
rise to the possibility that significant events, including broad market moves, may have occurred in the interim. The Funds’ investments
may be priced based on fair values provided by a third-party vendor, based on certain factors and methodologies applied by such vendor,
in the event that there is movement in the U.S. market, between the close of the foreign market and the time the Funds calculate their
NAVs. All assets and liabilities expressed in foreign currencies are converted into U.S. dollars at the mean between the buying and selling
rates of such currencies against the U.S. dollar at the end of each Business Day.
The Funds’ valuation methods are
also described in the SAI.
Taxation
and Distributions
Each Fund intends to qualify each year for treatment
as a regulated investment company under Subchapter M of the Code. As a regulated investment company, a Fund will not be subject to Federal
income taxes on its ordinary income and net realized capital gains that are distributed in a timely manner to its shareholders. A Fund’s
failure to qualify as a regulated investment company would result in corporate level taxation, and consequently, a reduction in income
available for distribution to shareholders. In addition, a Fund that fails to distribute at least 98% of its ordinary income for a calendar
year plus 98.2% of its capital gain net income recognized during the one-year period ending October 31 plus any retained amount from
the prior year generally will be subject to a non-deductible 4% excise tax on the undistributed amount.
Certain investors, including most tax-advantaged
plan investors, may be eligible for preferential Federal income tax treatment on distributions received from a Fund and dispositions of
Fund shares. This Prospectus does not attempt to describe such preferential tax treatment. Any prospective investor that is a trust or
other entity eligible for special tax treatment under the Code that is considering purchasing shares of a Fund, including either directly
or in connection with a life
insurance company separate investment account, should
consult its tax advisers about the Federal, state, local, and foreign tax consequences particular to it, as should persons considering
whether to have amounts held for their benefit by such trusts or other entities in shares of a Fund.
Investors are generally subject to Federal
income taxes on distributions received in respect of their shares. Distributions are taxed to investors in the manner described herein
whether distributed in cash or additional shares. Taxes on distributions of capital gains are determined by how long the Fund owned (or
is deemed to have owned) the investments that generated them, rather than by how long the shareholder held the shares. Distributions of
a Fund’s ordinary income and short-term capital gains (i.e., gains from capital assets held for one year or less) are taxable to
a shareholder as ordinary income. Certain dividends may be eligible for the dividends-received deduction for corporate shareholders to
the extent they are reported as such. Dividends properly reported as capital gain dividends (relating to gains from the sale of capital
assets held by a Fund for more than one year) are taxable in the hands of an investor as long-term capital gain includible in net capital
gain and taxed to individuals at reduced rates. Distributions of investment income
reported by a Fund as derived from “qualified dividend
income” will be taxed in the hands of individuals at the rates applicable to long-term capital gain, provided that holding period
and other requirements are met at both the shareholder and Fund level. Distributions from REITs generally do not qualify as qualified
dividend income. Funds investing primarily in fixed income instruments generally do not expect a significant portion of their distributions
to be derived from qualified dividend income.
The Code generally imposes a 3.8% Medicare
contribution tax on the net investment income of certain individuals, trusts, and estates to the extent their income exceeds certain threshold
amounts. For this purpose “net investment income” generally includes: (i) dividends paid by a Fund, including any capital
gain dividends, and (ii) net capital gains recognized on the sale, redemption, exchange, or other taxable disposition of shares of
a Fund. Shareholders are advised to consult their tax advisers regarding the possible implications of this additional tax on their investment
in a Fund.
The nature of each Fund’s distributions
will be affected by its investment strategies. A Fund whose investment return consists largely of interest, dividends, and capital gains
from short-term holdings will distribute largely ordinary income. A Fund whose return comes largely from the sale of long-term holdings
will distribute largely capital gain dividends. Distributions are taxable to a shareholder even though they are paid from income or gains
earned by a Fund prior to the shareholder’s investment and thus were included in the price paid by the shareholder for his or her
shares.
Each Fund intends to pay out as dividends
substantially all of its net investment income (which comes from dividends and any interest it receives from its investments). Each Fund
also intends to distribute at least annually substantially all of its net realized long- and short-term capital gains, if any, after giving
effect to any available capital loss carryforwards. For each Fund, except with respect to any capital gains, the Fund intends to declare
a dividend daily and to pay out any dividends to shareholders at least monthly. Distributions may be taken either in cash or in additional
shares of the respective Fund at the Fund’s NAV on the first Business Day after the record date for the distribution, at the option
of the shareholder. A shareholder that itself qualifies as a regulated investment company is permitted to
report a portion of its distributions as “qualified
dividend income,” provided certain requirements are met.
Any gain resulting from an exchange
or redemption of an investor’s shares in a Fund will generally be subject to tax as long-term or short-term capital gain. A loss
incurred with respect to shares of a Fund held for six months or less will be treated as a long-term capital loss to the extent of
long-term capital gains dividends received with respect to such shares.
A Fund’s investments in foreign
securities may be subject to foreign withholding or other taxes. In that case, the Fund’s yield on those securities would be decreased.
Shareholders of a Fund, other than a Fund that makes the election referred to below, generally will not be entitled to claim a credit
or deduction with respect to such foreign taxes. If more than 50% of a Fund’s assets at taxable year end consists of the securities
of foreign corporations, the Fund may be able to elect to “pass through” to its shareholders foreign income taxes that it
pays directly or, under certain circumstances, indirectly through its investments in ETFs or other investment companies that are regulated
investment companies for U.S. federal income tax purposes. If any Fund makes this election, a shareholder of the Fund must include its
share of those taxes in gross income as a distribution from the Fund and the shareholder will be allowed to claim a credit (or a deduction,
if the shareholder itemizes deductions) for such amounts on its federal tax return subject to certain limitations. Shareholders that are
not subject to U.S. federal income tax, and those who invest in a Fund through tax-advantaged accounts (including those who invest through
individual retirement accounts or other tax-advantaged retirement plans), generally will receive no benefit from any tax credit or deduction
passed through by a Fund. A shareholder that itself qualifies for treatment as a regulated investment company and that qualifies as a
“qualified fund of funds” may elect to pass through to its shareholders a tax credit or deduction passed through by a Fund.
In addition, a Fund’s investments
in foreign securities, fixed income securities, derivatives, or foreign currencies may increase or accelerate the Fund’s recognition
of ordinary income and may affect the timing, amount, or character of the Fund’s distributions.
Certain of a Fund’s investments,
including certain debt instruments, could cause the Fund to recognize taxable income in excess of the cash
generated by such investments; a Fund could be required
to sell other investments, including when not otherwise advantageous to do so, in order to make required distributions.
Distributions by a Fund to shareholders
that are not “United States persons” within the meaning of the Code (“foreign persons”) properly reported by the
Fund as (i) capital gain dividends, (ii) “interest-related dividends” (i.e., U.S.-source interest income
that, in general, would not be subject to U.S. federal income tax if earned directly by an individual foreign person), and (iii) “short-term
capital gain dividends” (i.e., net short-term capital gains in excess of net long-term capital losses), in each case to the
extent such distributions were properly reported as such by the Fund generally are not subject to withholding of U.S. federal
income tax. Distributions by a Fund to foreign persons
other than capital gain dividends, interest-related dividends, and short-term capital gain dividends generally are subject to withholding
of U.S. federal income tax at a rate of 30% (or lower applicable treaty rate). Foreign persons should refer to the SAI for further information,
and should consult their tax advisors as to the tax consequences to them of owning Fund shares.
The discussion above is very general.
Shareholders should consult their tax advisers for more information about the effect that an investment in a Fund could have on their
own tax situations, including possible federal, state, local, and foreign taxes. Also, as noted above, this discussion does not apply
to Fund shares held through tax-advantaged retirement plans.
Financial
Highlights
The
financial highlights tables are intended to help you understand the Funds’ financial performance for the past 5 years. Since
Class Y, Class L, and Class C shares of Short-Duration Bond Fund and Class Y and Class C shares of High Yield
Fund commenced operations on December 13, 2021, financial highlights are not yet presented for these classes. Certain information
reflects financial results for a single Fund share. The total returns in the tables represent the rate that an investor would have earned
on an investment in the Fund (assuming reinvestment of all dividends and distributions). This information has been audited by Deloitte
& Touche LLP, an independent registered public accounting firm, whose reports, along with each Fund’s financial statements,
are included in the Trust’s Annual Report, and are incorporated by reference into the SAI, and are available on request.
MASSMUTUAL
SHORT-DURATION BOND FUND
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Income (loss) from investment operations |
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Less distributions to shareholders
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|
|
|
|
|
Ratios / Supplemental Data |
|
|
|
|
Net asset value, beginning of the
period |
|
|
Net investment income (loss)c
|
|
|
Net realized and unrealized gain (loss)
on investments |
|
|
Total income (loss) from investment
operations |
|
|
From net investment income
|
|
|
From net realized gains
|
|
|
Total distributions
|
|
|
Net asset value, end of the
period |
|
|
Total returnl,m
|
|
|
Net assets, end of the period
(000’s) |
|
|
Ratio of expenses to average daily net
assets |
|
|
Net investment income (loss) to average
daily net assets |
|
Class I |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
10.09 |
|
|
|
|
$ |
0.24 |
|
|
|
|
$ |
0.22 |
|
|
|
|
$ |
0.46 |
|
|
|
|
$ |
(0.45) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.45) |
|
|
|
|
$ |
10.10 |
|
|
|
|
|
4.69% |
|
|
|
|
$ |
211,826 |
|
|
|
|
|
0.44% |
|
|
|
|
|
2.41% |
|
|
9/30/20 |
|
|
|
|
10.31 |
|
|
|
|
|
0.34 |
|
|
|
|
|
(0.21) |
|
|
|
|
|
0.13 |
|
|
|
|
|
(0.35) |
|
|
|
|
|
— |
|
|
|
|
|
(0.35) |
|
|
|
|
|
10.09 |
|
|
|
|
|
1.26% |
|
|
|
|
|
189,805 |
|
|
|
|
|
0.42% |
|
|
|
|
|
3.41% |
|
|
9/30/19 |
|
|
|
|
10.30 |
|
|
|
|
|
0.32 |
|
|
|
|
|
0.08 |
|
|
|
|
|
0.40 |
|
|
|
|
|
(0.39) |
|
|
|
|
|
— |
|
|
|
|
|
(0.39) |
|
|
|
|
|
10.31 |
|
|
|
|
|
4.05% |
|
|
|
|
|
204,282 |
|
|
|
|
|
0.43% |
|
|
|
|
|
3.13% |
|
|
9/30/18 |
|
|
|
|
10.40 |
|
|
|
|
|
0.27 |
|
|
|
|
|
(0.10) |
|
|
|
|
|
0.17 |
|
|
|
|
|
(0.27) |
|
|
|
|
|
— |
|
|
|
|
|
(0.27) |
|
|
|
|
|
10.30 |
|
|
|
|
|
1.65% |
|
|
|
|
|
163,465 |
|
|
|
|
|
0.39% |
|
|
|
|
|
2.64% |
|
|
9/30/17
|
|
|
|
|
10.39 |
|
|
|
|
|
0.23 |
|
|
|
|
|
0.03 |
|
|
|
|
|
0.26 |
|
|
|
|
|
(0.25) |
|
|
|
|
|
— |
|
|
|
|
|
(0.25) |
|
|
|
|
|
10.40 |
|
|
|
|
|
2.57% |
|
|
|
|
|
299,768 |
|
|
|
|
|
0.40% |
|
|
|
|
|
2.20% |
|
|
Class R5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
10.12 |
|
|
|
|
$ |
0.24 |
|
|
|
|
$ |
0.21 |
|
|
|
|
$ |
0.45 |
|
|
|
|
$ |
(0.44) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.44) |
|
|
|
|
$ |
10.13 |
|
|
|
|
|
4.56% |
|
|
|
|
$ |
66,938 |
|
|
|
|
|
0.54% |
|
|
|
|
|
2.34% |
|
|
9/30/20 |
|
|
|
|
10.34 |
|
|
|
|
|
0.33 |
|
|
|
|
|
(0.21) |
|
|
|
|
|
0.12 |
|
|
|
|
|
(0.34) |
|
|
|
|
|
— |
|
|
|
|
|
(0.34) |
|
|
|
|
|
10.12 |
|
|
|
|
|
1.15% |
|
|
|
|
|
110,813 |
|
|
|
|
|
0.52% |
|
|
|
|
|
3.31% |
|
|
9/30/19 |
|
|
|
|
10.33 |
|
|
|
|
|
0.31 |
|
|
|
|
|
0.08 |
|
|
|
|
|
0.39 |
|
|
|
|
|
(0.38) |
|
|
|
|
|
— |
|
|
|
|
|
(0.38) |
|
|
|
|
|
10.34 |
|
|
|
|
|
3.92% |
|
|
|
|
|
158,895 |
|
|
|
|
|
0.53% |
|
|
|
|
|
3.03% |
|
|
9/30/18 |
|
|
|
|
10.42 |
|
|
|
|
|
0.26 |
|
|
|
|
|
(0.09) |
|
|
|
|
|
0.17 |
|
|
|
|
|
(0.26) |
|
|
|
|
|
— |
|
|
|
|
|
(0.26) |
|
|
|
|
|
10.33 |
|
|
|
|
|
1.63% |
|
|
|
|
|
135,411 |
|
|
|
|
|
0.49% |
|
|
|
|
|
2.55% |
|
|
9/30/17
|
|
|
|
|
10.42 |
|
|
|
|
|
0.22 |
|
|
|
|
|
0.02 |
|
|
|
|
|
0.24 |
|
|
|
|
|
(0.24) |
|
|
|
|
|
— |
|
|
|
|
|
(0.24) |
|
|
|
|
|
10.42 |
|
|
|
|
|
2.36% |
|
|
|
|
|
155,172 |
|
|
|
|
|
0.50% |
|
|
|
|
|
2.09% |
|
|
Service Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
10.04 |
|
|
|
|
$ |
0.23 |
|
|
|
|
$ |
0.21 |
|
|
|
|
$ |
0.44 |
|
|
|
|
$ |
(0.42) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.42) |
|
|
|
|
$ |
10.06 |
|
|
|
|
|
4.51% |
|
|
|
|
$ |
16,282 |
|
|
|
|
|
0.64% |
|
|
|
|
|
2.25% |
|
|
9/30/20 |
|
|
|
|
10.26 |
|
|
|
|
|
0.32 |
|
|
|
|
|
(0.22) |
|
|
|
|
|
0.10 |
|
|
|
|
|
(0.32) |
|
|
|
|
|
— |
|
|
|
|
|
(0.32) |
|
|
|
|
|
10.04 |
|
|
|
|
|
1.00% |
|
|
|
|
|
38,559 |
|
|
|
|
|
0.62% |
|
|
|
|
|
3.19% |
|
|
9/30/19 |
|
|
|
|
10.25 |
|
|
|
|
|
0.30 |
|
|
|
|
|
0.08 |
|
|
|
|
|
0.38 |
|
|
|
|
|
(0.37) |
|
|
|
|
|
— |
|
|
|
|
|
(0.37) |
|
|
|
|
|
10.26 |
|
|
|
|
|
3.82% |
|
|
|
|
|
51,201 |
|
|
|
|
|
0.63% |
|
|
|
|
|
2.92% |
|
|
9/30/18 |
|
|
|
|
10.35 |
|
|
|
|
|
0.25 |
|
|
|
|
|
(0.10) |
|
|
|
|
|
0.15 |
|
|
|
|
|
(0.25) |
|
|
|
|
|
— |
|
|
|
|
|
(0.25) |
|
|
|
|
|
10.25 |
|
|
|
|
|
1.50% |
|
|
|
|
|
72,408 |
|
|
|
|
|
0.59% |
|
|
|
|
|
2.45% |
|
|
9/30/17
|
|
|
|
|
10.35 |
|
|
|
|
|
0.21 |
|
|
|
|
|
0.02 |
|
|
|
|
|
0.23 |
|
|
|
|
|
(0.23) |
|
|
|
|
|
— |
|
|
|
|
|
(0.23) |
|
|
|
|
|
10.35 |
|
|
|
|
|
2.24% |
|
|
|
|
|
75,544 |
|
|
|
|
|
0.60% |
|
|
|
|
|
2.00% |
|
|
Administrative Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
10.00 |
|
|
|
|
$ |
0.21 |
|
|
|
|
$ |
0.22 |
|
|
|
|
$ |
0.43 |
|
|
|
|
$ |
(0.42) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.42) |
|
|
|
|
$ |
10.01 |
|
|
|
|
|
4.40% |
|
|
|
|
$ |
16,920 |
|
|
|
|
|
0.74% |
|
|
|
|
|
2.16% |
|
|
9/30/20 |
|
|
|
|
10.22 |
|
|
|
|
|
0.31 |
|
|
|
|
|
(0.21) |
|
|
|
|
|
0.10 |
|
|
|
|
|
(0.32) |
|
|
|
|
|
— |
|
|
|
|
|
(0.32) |
|
|
|
|
|
10.00 |
|
|
|
|
|
0.94% |
|
|
|
|
|
27,628 |
|
|
|
|
|
0.72% |
|
|
|
|
|
3.12% |
|
|
9/30/19 |
|
|
|
|
10.21 |
|
|
|
|
|
0.29 |
|
|
|
|
|
0.08 |
|
|
|
|
|
0.37 |
|
|
|
|
|
(0.36) |
|
|
|
|
|
— |
|
|
|
|
|
(0.36) |
|
|
|
|
|
10.22 |
|
|
|
|
|
3.76% |
|
|
|
|
|
31,270 |
|
|
|
|
|
0.73% |
|
|
|
|
|
2.83% |
|
|
9/30/18 |
|
|
|
|
10.31 |
|
|
|
|
|
0.24 |
|
|
|
|
|
(0.10) |
|
|
|
|
|
0.14 |
|
|
|
|
|
(0.24) |
|
|
|
|
|
— |
|
|
|
|
|
(0.24) |
|
|
|
|
|
10.21 |
|
|
|
|
|
1.35% |
|
|
|
|
|
34,342 |
|
|
|
|
|
0.69% |
|
|
|
|
|
2.37% |
|
|
9/30/17
|
|
|
|
|
10.30 |
|
|
|
|
|
0.19 |
|
|
|
|
|
0.04 |
|
|
|
|
|
0.23 |
|
|
|
|
|
(0.22) |
|
|
|
|
|
— |
|
|
|
|
|
(0.22) |
|
|
|
|
|
10.31 |
|
|
|
|
|
2.24% |
|
|
|
|
|
28,771 |
|
|
|
|
|
0.70% |
|
|
|
|
|
1.89% |
|
|
Class R4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
10.05 |
|
|
|
|
$ |
0.20 |
|
|
|
|
$ |
0.22 |
|
|
|
|
$ |
0.42 |
|
|
|
|
$ |
(0.40) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.40) |
|
|
|
|
$ |
10.07 |
|
|
|
|
|
4.30% |
|
|
|
|
$ |
11,743 |
|
|
|
|
|
0.89% |
|
|
|
|
|
1.97% |
|
|
9/30/20 |
|
|
|
|
10.27 |
|
|
|
|
|
0.29 |
|
|
|
|
|
(0.21) |
|
|
|
|
|
0.08 |
|
|
|
|
|
(0.30) |
|
|
|
|
|
— |
|
|
|
|
|
(0.30) |
|
|
|
|
|
10.05 |
|
|
|
|
|
0.79% |
|
|
|
|
|
11,525 |
|
|
|
|
|
0.87% |
|
|
|
|
|
2.96% |
|
|
9/30/19 |
|
|
|
|
10.26 |
|
|
|
|
|
0.27 |
|
|
|
|
|
0.08 |
|
|
|
|
|
0.35 |
|
|
|
|
|
(0.34) |
|
|
|
|
|
— |
|
|
|
|
|
(0.34) |
|
|
|
|
|
10.27 |
|
|
|
|
|
3.57% |
|
|
|
|
|
12,494 |
|
|
|
|
|
0.88% |
|
|
|
|
|
2.67% |
|
|
9/30/18 |
|
|
|
|
10.36 |
|
|
|
|
|
0.23 |
|
|
|
|
|
(0.11) |
|
|
|
|
|
0.12 |
|
|
|
|
|
(0.22) |
|
|
|
|
|
— |
|
|
|
|
|
(0.22) |
|
|
|
|
|
10.26 |
|
|
|
|
|
1.21% |
|
|
|
|
|
13,691 |
|
|
|
|
|
0.84% |
|
|
|
|
|
2.21% |
|
|
9/30/17
|
|
|
|
|
10.36 |
|
|
|
|
|
0.18 |
|
|
|
|
|
0.03 |
|
|
|
|
|
0.21 |
|
|
|
|
|
(0.21) |
|
|
|
|
|
— |
|
|
|
|
|
(0.21) |
|
|
|
|
|
10.36 |
|
|
|
|
|
2.05% |
|
|
|
|
|
13,693 |
|
|
|
|
|
0.85% |
|
|
|
|
|
1.75% |
|
|
Class A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
9.92 |
|
|
|
|
$ |
0.19 |
|
|
|
|
$ |
0.21 |
|
|
|
|
$ |
0.40 |
|
|
|
|
$ |
(0.39) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.39) |
|
|
|
|
$ |
9.93 |
|
|
|
|
|
4.15% |
|
|
|
|
$ |
36,186 |
|
|
|
|
|
0.99% |
|
|
|
|
|
1.90% |
|
|
9/30/20 |
|
|
|
|
10.14 |
|
|
|
|
|
0.28 |
|
|
|
|
|
(0.21) |
|
|
|
|
|
0.07 |
|
|
|
|
|
(0.29) |
|
|
|
|
|
— |
|
|
|
|
|
(0.29) |
|
|
|
|
|
9.92 |
|
|
|
|
|
0.71% |
|
|
|
|
|
41,913 |
|
|
|
|
|
0.97% |
|
|
|
|
|
2.87% |
|
|
9/30/19 |
|
|
|
|
10.14 |
|
|
|
|
|
0.26 |
|
|
|
|
|
0.08 |
|
|
|
|
|
0.34 |
|
|
|
|
|
(0.34) |
|
|
|
|
|
— |
|
|
|
|
|
(0.34) |
|
|
|
|
|
10.14 |
|
|
|
|
|
3.44% |
|
|
|
|
|
55,315 |
|
|
|
|
|
0.98% |
|
|
|
|
|
2.58% |
|
|
9/30/18 |
|
|
|
|
10.24 |
|
|
|
|
|
0.21 |
|
|
|
|
|
(0.10) |
|
|
|
|
|
0.11 |
|
|
|
|
|
(0.21) |
|
|
|
|
|
— |
|
|
|
|
|
(0.21) |
|
|
|
|
|
10.14 |
|
|
|
|
|
1.10% |
|
|
|
|
|
53,188 |
|
|
|
|
|
0.94% |
|
|
|
|
|
2.11% |
|
|
9/30/17
|
|
|
|
|
10.23 |
|
|
|
|
|
0.16 |
|
|
|
|
|
0.04 |
|
|
|
|
|
0.20 |
|
|
|
|
|
(0.19) |
|
|
|
|
|
— |
|
|
|
|
|
(0.19) |
|
|
|
|
|
10.24 |
|
|
|
|
|
2.00% |
|
|
|
|
|
50,893 |
|
|
|
|
|
0.95% |
|
|
|
|
|
1.62% |
|
|
Class R3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
9.98 |
|
|
|
|
$ |
0.17 |
|
|
|
|
$ |
0.22 |
|
|
|
|
$ |
0.39 |
|
|
|
|
$ |
(0.38) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.38) |
|
|
|
|
$ |
9.99 |
|
|
|
|
|
4.04% |
|
|
|
|
$ |
11,652 |
|
|
|
|
|
1.14% |
|
|
|
|
|
1.70% |
|
|
9/30/20 |
|
|
|
|
10.20 |
|
|
|
|
|
0.27 |
|
|
|
|
|
(0.22) |
|
|
|
|
|
0.05 |
|
|
|
|
|
(0.27) |
|
|
|
|
|
— |
|
|
|
|
|
(0.27) |
|
|
|
|
|
9.98 |
|
|
|
|
|
0.53% |
|
|
|
|
|
7,737 |
|
|
|
|
|
1.12% |
|
|
|
|
|
2.72% |
|
|
9/30/19 |
|
|
|
|
10.20 |
|
|
|
|
|
0.24 |
|
|
|
|
|
0.09 |
|
|
|
|
|
0.33 |
|
|
|
|
|
(0.33) |
|
|
|
|
|
— |
|
|
|
|
|
(0.33) |
|
|
|
|
|
10.20 |
|
|
|
|
|
3.29% |
|
|
|
|
|
7,040 |
|
|
|
|
|
1.13% |
|
|
|
|
|
2.43% |
|
|
9/30/18 |
|
|
|
|
10.30 |
|
|
|
|
|
0.20 |
|
|
|
|
|
(0.10) |
|
|
|
|
|
0.10 |
|
|
|
|
|
(0.20) |
|
|
|
|
|
— |
|
|
|
|
|
(0.20) |
|
|
|
|
|
10.20 |
|
|
|
|
|
0.97% |
|
|
|
|
|
7,980 |
|
|
|
|
|
1.09% |
|
|
|
|
|
1.97% |
|
|
9/30/17
|
|
|
|
|
10.31 |
|
|
|
|
|
0.15 |
|
|
|
|
|
0.03 |
|
|
|
|
|
0.18 |
|
|
|
|
|
(0.19) |
|
|
|
|
|
— |
|
|
|
|
|
(0.19) |
|
|
|
|
|
10.30 |
|
|
|
|
|
1.79% |
|
|
|
|
|
6,689 |
|
|
|
|
|
1.10% |
|
|
|
|
|
1.50% |
|
|
|
|
|
Year ended September 30
|
|
|
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
Portfolio turnover rate |
|
|
|
|
72% |
|
|
|
|
|
37% |
|
|
|
|
|
55% |
|
|
|
|
|
68% |
|
|
|
|
|
72% |
|
|
c
Per share amount calculated on the average shares method.
l
Employee retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs)
may be subject to certain charges as set forth in their respective Plan Documents. Total return figures would be lower for the periods
presented if they reflected these charges.
m
Total return excludes sales charges, if any, and would be lower for the period presented if it reflected
these charges.
MASSMUTUAL
HIGH YIELD FUND
|
|
|
|
|
|
|
|
|
Income (loss) from investment operations |
|
|
Less distributions to shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios / Supplemental Data |
|
|
|
|
Net asset value, beginning of the
period |
|
|
Net investment income (loss)c,j
|
|
|
Net realized and unrealized gain (loss)
on investments |
|
|
Total income (loss) from investment
operations |
|
|
From net investment income
|
|
|
From net realized gains
|
|
|
Total distributions
|
|
|
Net asset value, end of the
period |
|
|
Total returnl,m
|
|
|
Net assets, end of the period
(000’s) |
|
|
Ratio of expenses to average daily net
assets before expense waivers
|
|
|
Ratio of expenses to average daily net
assets after expense waiversj
|
|
|
Net investment income (loss) to average
daily net assets |
|
Class I |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
8.63 |
|
|
|
|
$ |
0.49 |
|
|
|
|
$ |
0.70 |
|
|
|
|
$ |
1.19 |
|
|
|
|
$ |
(0.48) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.48) |
|
|
|
|
$ |
9.34 |
|
|
|
|
|
14.20% |
|
|
|
|
$ |
351,942 |
|
|
|
|
|
0.54% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.50% |
|
|
9/30/20 |
|
|
|
|
9.21 |
|
|
|
|
|
0.50 |
|
|
|
|
|
(0.52) |
|
|
|
|
|
(0.02) |
|
|
|
|
|
(0.56) |
|
|
|
|
|
— |
|
|
|
|
|
(0.56) |
|
|
|
|
|
8.63 |
|
|
|
|
|
(0.28)% |
|
|
|
|
|
375,807 |
|
|
|
|
|
0.53% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.79% |
|
|
9/30/19 |
|
|
|
|
9.27 |
|
|
|
|
|
0.56 |
|
|
|
|
|
(0.10) |
|
|
|
|
|
0.46 |
|
|
|
|
|
(0.52) |
|
|
|
|
|
— |
|
|
|
|
|
(0.52) |
|
|
|
|
|
9.21 |
|
|
|
|
|
5.45% |
|
|
|
|
|
326,836 |
|
|
|
|
|
0.54% |
|
|
|
|
|
0.54%n
|
|
|
|
|
|
6.31% |
|
|
9/30/18 |
|
|
|
|
9.62 |
|
|
|
|
|
0.58 |
|
|
|
|
|
(0.33) |
|
|
|
|
|
0.25 |
|
|
|
|
|
(0.60) |
|
|
|
|
|
— |
|
|
|
|
|
(0.60) |
|
|
|
|
|
9.27 |
|
|
|
|
|
2.78% |
|
|
|
|
|
382,927 |
|
|
|
|
|
0.54% |
|
|
|
|
|
0.54%n
|
|
|
|
|
|
6.32% |
|
|
9/30/17
|
|
|
|
|
9.29 |
|
|
|
|
|
0.62 |
|
|
|
|
|
0.28 |
|
|
|
|
|
0.90 |
|
|
|
|
|
(0.57) |
|
|
|
|
|
— |
|
|
|
|
|
(0.57) |
|
|
|
|
|
9.62 |
|
|
|
|
|
10.22% |
|
|
|
|
|
242,645 |
|
|
|
|
|
0.54% |
|
|
|
|
|
0.54%n
|
|
|
|
|
|
6.63% |
|
|
Class R5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
8.68 |
|
|
|
|
$ |
0.49 |
|
|
|
|
$ |
0.70 |
|
|
|
|
$ |
1.19 |
|
|
|
|
$ |
(0.47) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.47) |
|
|
|
|
$ |
9.40 |
|
|
|
|
|
14.13% |
|
|
|
|
$ |
46,518 |
|
|
|
|
|
0.64% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.39% |
|
|
9/30/20 |
|
|
|
|
9.25 |
|
|
|
|
|
0.49 |
|
|
|
|
|
(0.51) |
|
|
|
|
|
(0.02) |
|
|
|
|
|
(0.55) |
|
|
|
|
|
— |
|
|
|
|
|
(0.55) |
|
|
|
|
|
8.68 |
|
|
|
|
|
(0.28)% |
|
|
|
|
|
49,116 |
|
|
|
|
|
0.63% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.69% |
|
|
9/30/19 |
|
|
|
|
9.31 |
|
|
|
|
|
0.56 |
|
|
|
|
|
(0.11) |
|
|
|
|
|
0.45 |
|
|
|
|
|
(0.51) |
|
|
|
|
|
— |
|
|
|
|
|
(0.51) |
|
|
|
|
|
9.25 |
|
|
|
|
|
5.29% |
|
|
|
|
|
41,369 |
|
|
|
|
|
0.64% |
|
|
|
|
|
0.64%n
|
|
|
|
|
|
6.23% |
|
|
9/30/18 |
|
|
|
|
9.66 |
|
|
|
|
|
0.57 |
|
|
|
|
|
(0.33) |
|
|
|
|
|
0.24 |
|
|
|
|
|
(0.59) |
|
|
|
|
|
— |
|
|
|
|
|
(0.59) |
|
|
|
|
|
9.31 |
|
|
|
|
|
2.65% |
|
|
|
|
|
43,613 |
|
|
|
|
|
0.64% |
|
|
|
|
|
0.64%n
|
|
|
|
|
|
6.20% |
|
|
9/30/17
|
|
|
|
|
9.33 |
|
|
|
|
|
0.61 |
|
|
|
|
|
0.28 |
|
|
|
|
|
0.89 |
|
|
|
|
|
(0.56) |
|
|
|
|
|
— |
|
|
|
|
|
(0.56) |
|
|
|
|
|
9.66 |
|
|
|
|
|
10.08% |
|
|
|
|
|
55,628 |
|
|
|
|
|
0.64% |
|
|
|
|
|
0.64%n
|
|
|
|
|
|
6.54% |
|
|
Service Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
8.67 |
|
|
|
|
$ |
0.48 |
|
|
|
|
$ |
0.70 |
|
|
|
|
$ |
1.18 |
|
|
|
|
$ |
(0.46) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.46) |
|
|
|
|
$ |
9.39 |
|
|
|
|
|
14.00% |
|
|
|
|
$ |
29,097 |
|
|
|
|
|
0.74% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.31% |
|
|
9/30/20 |
|
|
|
|
9.25 |
|
|
|
|
|
0.48 |
|
|
|
|
|
(0.52) |
|
|
|
|
|
(0.04) |
|
|
|
|
|
(0.54) |
|
|
|
|
|
— |
|
|
|
|
|
(0.54) |
|
|
|
|
|
8.67 |
|
|
|
|
|
(0.48)% |
|
|
|
|
|
33,897 |
|
|
|
|
|
0.73% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.58% |
|
|
9/30/19 |
|
|
|
|
9.31 |
|
|
|
|
|
0.55 |
|
|
|
|
|
(0.11) |
|
|
|
|
|
0.44 |
|
|
|
|
|
(0.50) |
|
|
|
|
|
— |
|
|
|
|
|
(0.50) |
|
|
|
|
|
9.25 |
|
|
|
|
|
5.20% |
|
|
|
|
|
49,174 |
|
|
|
|
|
0.74% |
|
|
|
|
|
0.74%n
|
|
|
|
|
|
6.13% |
|
|
9/30/18 |
|
|
|
|
9.66 |
|
|
|
|
|
0.56 |
|
|
|
|
|
(0.33) |
|
|
|
|
|
0.23 |
|
|
|
|
|
(0.58) |
|
|
|
|
|
— |
|
|
|
|
|
(0.58) |
|
|
|
|
|
9.31 |
|
|
|
|
|
2.55% |
|
|
|
|
|
45,296 |
|
|
|
|
|
0.74% |
|
|
|
|
|
0.74%n
|
|
|
|
|
|
6.11% |
|
|
9/30/17
|
|
|
|
|
9.33 |
|
|
|
|
|
0.60 |
|
|
|
|
|
0.28 |
|
|
|
|
|
0.88 |
|
|
|
|
|
(0.55) |
|
|
|
|
|
— |
|
|
|
|
|
(0.55) |
|
|
|
|
|
9.66 |
|
|
|
|
|
9.93% |
|
|
|
|
|
49,581 |
|
|
|
|
|
0.74% |
|
|
|
|
|
0.74%n
|
|
|
|
|
|
6.45% |
|
|
Administrative Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
8.53 |
|
|
|
|
$ |
0.46 |
|
|
|
|
$ |
0.68 |
|
|
|
|
$ |
1.14 |
|
|
|
|
$ |
(0.45) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.45) |
|
|
|
|
$ |
9.22 |
|
|
|
|
|
13.79% |
|
|
|
|
$ |
23,211 |
|
|
|
|
|
0.84% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.20% |
|
|
9/30/20 |
|
|
|
|
9.10 |
|
|
|
|
|
0.47 |
|
|
|
|
|
(0.51) |
|
|
|
|
|
(0.04) |
|
|
|
|
|
(0.53) |
|
|
|
|
|
— |
|
|
|
|
|
(0.53) |
|
|
|
|
|
8.53 |
|
|
|
|
|
(0.55)% |
|
|
|
|
|
23,549 |
|
|
|
|
|
0.83% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.49% |
|
|
9/30/19 |
|
|
|
|
9.16 |
|
|
|
|
|
0.53 |
|
|
|
|
|
(0.10) |
|
|
|
|
|
0.43 |
|
|
|
|
|
(0.49) |
|
|
|
|
|
— |
|
|
|
|
|
(0.49) |
|
|
|
|
|
9.10 |
|
|
|
|
|
5.13% |
|
|
|
|
|
25,980 |
|
|
|
|
|
0.84% |
|
|
|
|
|
0.84%n
|
|
|
|
|
|
6.03% |
|
|
9/30/18 |
|
|
|
|
9.51 |
|
|
|
|
|
0.55 |
|
|
|
|
|
(0.33) |
|
|
|
|
|
0.22 |
|
|
|
|
|
(0.57) |
|
|
|
|
|
— |
|
|
|
|
|
(0.57) |
|
|
|
|
|
9.16 |
|
|
|
|
|
2.49% |
|
|
|
|
|
31,250 |
|
|
|
|
|
0.84% |
|
|
|
|
|
0.84%n
|
|
|
|
|
|
6.01% |
|
|
9/30/17
|
|
|
|
|
9.20 |
|
|
|
|
|
0.58 |
|
|
|
|
|
0.28 |
|
|
|
|
|
0.86 |
|
|
|
|
|
(0.55) |
|
|
|
|
|
— |
|
|
|
|
|
(0.55) |
|
|
|
|
|
9.51 |
|
|
|
|
|
9.79% |
|
|
|
|
|
32,889 |
|
|
|
|
|
0.84% |
|
|
|
|
|
0.84%n
|
|
|
|
|
|
6.34% |
|
|
Class R4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
8.38 |
|
|
|
|
$ |
0.44 |
|
|
|
|
$ |
0.68 |
|
|
|
|
$ |
1.12 |
|
|
|
|
$ |
(0.44) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.44) |
|
|
|
|
$ |
9.06 |
|
|
|
|
|
13.73% |
|
|
|
|
$ |
39,125 |
|
|
|
|
|
0.99% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.05% |
|
|
9/30/20 |
|
|
|
|
8.97 |
|
|
|
|
|
0.45 |
|
|
|
|
|
(0.51) |
|
|
|
|
|
(0.06) |
|
|
|
|
|
(0.53) |
|
|
|
|
|
— |
|
|
|
|
|
(0.53) |
|
|
|
|
|
8.38 |
|
|
|
|
|
(0.75)% |
|
|
|
|
|
40,160 |
|
|
|
|
|
0.98% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.34% |
|
|
9/30/19 |
|
|
|
|
9.04 |
|
|
|
|
|
0.51 |
|
|
|
|
|
(0.10) |
|
|
|
|
|
0.41 |
|
|
|
|
|
(0.48) |
|
|
|
|
|
— |
|
|
|
|
|
(0.48) |
|
|
|
|
|
8.97 |
|
|
|
|
|
4.97% |
|
|
|
|
|
47,055 |
|
|
|
|
|
0.99% |
|
|
|
|
|
0.99%n
|
|
|
|
|
|
5.88% |
|
|
9/30/18 |
|
|
|
|
9.40 |
|
|
|
|
|
0.53 |
|
|
|
|
|
(0.33) |
|
|
|
|
|
0.20 |
|
|
|
|
|
(0.56) |
|
|
|
|
|
— |
|
|
|
|
|
(0.56) |
|
|
|
|
|
9.04 |
|
|
|
|
|
2.30% |
|
|
|
|
|
35,011 |
|
|
|
|
|
0.99% |
|
|
|
|
|
0.99%n
|
|
|
|
|
|
5.87% |
|
|
9/30/17
|
|
|
|
|
9.11 |
|
|
|
|
|
0.56 |
|
|
|
|
|
0.28 |
|
|
|
|
|
0.84 |
|
|
|
|
|
(0.55) |
|
|
|
|
|
— |
|
|
|
|
|
(0.55) |
|
|
|
|
|
9.40 |
|
|
|
|
|
9.66% |
|
|
|
|
|
30,611 |
|
|
|
|
|
0.99% |
|
|
|
|
|
0.99%n
|
|
|
|
|
|
6.18% |
|
|
Class A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
8.49 |
|
|
|
|
$ |
0.44 |
|
|
|
|
$ |
0.69 |
|
|
|
|
$ |
1.13 |
|
|
|
|
$ |
(0.43) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.43) |
|
|
|
|
$ |
9.19 |
|
|
|
|
|
13.65% |
|
|
|
|
$ |
13,444 |
|
|
|
|
|
1.09% |
|
|
|
|
|
N/A |
|
|
|
|
|
4.97% |
|
|
9/30/20 |
|
|
|
|
9.07 |
|
|
|
|
|
0.44 |
|
|
|
|
|
(0.50) |
|
|
|
|
|
(0.06) |
|
|
|
|
|
(0.52) |
|
|
|
|
|
— |
|
|
|
|
|
(0.52) |
|
|
|
|
|
8.49 |
|
|
|
|
|
(0.81)% |
|
|
|
|
|
24,556 |
|
|
|
|
|
1.08% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.24% |
|
|
9/30/19 |
|
|
|
|
9.13 |
|
|
|
|
|
0.51 |
|
|
|
|
|
(0.10) |
|
|
|
|
|
0.41 |
|
|
|
|
|
(0.47) |
|
|
|
|
|
— |
|
|
|
|
|
(0.47) |
|
|
|
|
|
9.07 |
|
|
|
|
|
4.89% |
|
|
|
|
|
31,392 |
|
|
|
|
|
1.09% |
|
|
|
|
|
1.09%n
|
|
|
|
|
|
5.77% |
|
|
9/30/18 |
|
|
|
|
9.49 |
|
|
|
|
|
0.52 |
|
|
|
|
|
(0.33) |
|
|
|
|
|
0.19 |
|
|
|
|
|
(0.55) |
|
|
|
|
|
— |
|
|
|
|
|
(0.55) |
|
|
|
|
|
9.13 |
|
|
|
|
|
2.10% |
|
|
|
|
|
27,393 |
|
|
|
|
|
1.09% |
|
|
|
|
|
1.09%n
|
|
|
|
|
|
5.76% |
|
|
9/30/17
|
|
|
|
|
9.17 |
|
|
|
|
|
0.56 |
|
|
|
|
|
0.28 |
|
|
|
|
|
0.84 |
|
|
|
|
|
(0.52) |
|
|
|
|
|
— |
|
|
|
|
|
(0.52) |
|
|
|
|
|
9.49 |
|
|
|
|
|
9.63% |
|
|
|
|
|
29,357 |
|
|
|
|
|
1.09% |
|
|
|
|
|
1.09%n
|
|
|
|
|
|
6.09% |
|
|
Class R3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/21 |
|
|
|
$ |
8.60 |
|
|
|
|
$ |
0.43 |
|
|
|
|
$ |
0.69 |
|
|
|
|
$ |
1.12 |
|
|
|
|
$ |
(0.41) |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(0.41) |
|
|
|
|
$ |
9.31 |
|
|
|
|
|
13.41% |
|
|
|
|
$ |
33,334 |
|
|
|
|
|
1.24% |
|
|
|
|
|
N/A |
|
|
|
|
|
4.79% |
|
|
9/30/20 |
|
|
|
|
9.17 |
|
|
|
|
|
0.44 |
|
|
|
|
|
(0.52) |
|
|
|
|
|
(0.08) |
|
|
|
|
|
(0.49) |
|
|
|
|
|
— |
|
|
|
|
|
(0.49) |
|
|
|
|
|
8.60 |
|
|
|
|
|
(0.96)% |
|
|
|
|
|
35,047 |
|
|
|
|
|
1.23% |
|
|
|
|
|
N/A |
|
|
|
|
|
5.09% |
|
|
9/30/19 |
|
|
|
|
9.23 |
|
|
|
|
|
0.50 |
|
|
|
|
|
(0.10) |
|
|
|
|
|
0.40 |
|
|
|
|
|
(0.46) |
|
|
|
|
|
— |
|
|
|
|
|
(0.46) |
|
|
|
|
|
9.17 |
|
|
|
|
|
4.71% |
|
|
|
|
|
42,509 |
|
|
|
|
|
1.24% |
|
|
|
|
|
1.24%n
|
|
|
|
|
|
5.63% |
|
|
9/30/18 |
|
|
|
|
9.60 |
|
|
|
|
|
0.51 |
|
|
|
|
|
(0.33) |
|
|
|
|
|
0.18 |
|
|
|
|
|
(0.55) |
|
|
|
|
|
— |
|
|
|
|
|
(0.55) |
|
|
|
|
|
9.23 |
|
|
|
|
|
2.04% |
|
|
|
|
|
44,944 |
|
|
|
|
|
1.24% |
|
|
|
|
|
1.24%n
|
|
|
|
|
|
5.62% |
|
|
9/30/17
|
|
|
|
|
9.29 |
|
|
|
|
|
0.55 |
|
|
|
|
|
0.29 |
|
|
|
|
|
0.84 |
|
|
|
|
|
(0.53) |
|
|
|
|
|
— |
|
|
|
|
|
(0.53) |
|
|
|
|
|
9.60 |
|
|
|
|
|
9.43% |
|
|
|
|
|
36,626 |
|
|
|
|
|
1.24% |
|
|
|
|
|
1.24%n
|
|
|
|
|
|
5.93% |
|
|
|
|
|
Year ended September 30
|
|
|
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
Portfolio turnover rate |
|
|
|
|
68% |
|
|
|
|
|
79% |
|
|
|
|
|
54% |
|
|
|
|
|
38% |
|
|
|
|
|
70% |
|
|
c
Per share amount calculated on the average shares method.
j
Computed after giving effect to an agreement by MML Advisers to waive certain fees and expenses of
the Fund.
l
Employee retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs)
may be subject to certain charges as set forth in their respective Plan Documents. Total return figures would be lower for the periods
presented if they reflected these charges.
m
Total return excludes sales charges, if any, and would be lower for the period presented if it reflected
these charges.
n
Expenses incurred during the period fell under the expense cap.
Index
Descriptions
The Bloomberg
U.S. Aggregate 1-3 Year Bond Index measures the performance of investment grade, U.S. dollar-denominated,
fixed-rate taxable bond market securities with maturities of 1-3 years, including Treasuries, government-related and corporate securities,
mortgage-backed securities (MBS) (agency fixed-rate and hybrid ARM pass-throughs), asset-backed securities (ABS), and commercial mortgage-backed
securities (CMBS). It rolls up into other Bloomberg flagship indexes, such as the multi-currency Global Aggregate Index and the U.S. Universal
Index, which includes high yield and emerging markets debt. The Index does not reflect any deduction for fees, expenses, or taxes and
cannot be purchased directly by investors.
The Bloomberg
U.S. Corporate High-Yield Bond Index measures the performance of U.S. dollar-denominated, non-investment
grade, fixed-rate, taxable corporate bonds, including corporate bonds, fixed-rate bullet, putable, and callable bonds, SEC Rule 144A
securities, original issue zeros, pay-in-kind bonds, fixed-rate and fixed-to-floating capital securities. The Index does not reflect any
deduction for fees, expenses, or taxes and cannot be purchased directly by investors.
Appendix A:
Intermediary-Specific Sales Charge Reductions and Waivers
Specific intermediaries may have different
policies and procedures regarding the availability of sales charge reductions and waivers, which are discussed below. In all instances,
it is the shareholder’s responsibility to notify the Fund or the shareholder’s financial intermediary at the time of purchase
of any relationship or other facts qualifying the shareholder for sales charge reductions or waivers. For sales charge reductions and
waivers not available through a particular intermediary, shareholders will have to purchase Fund shares directly from the Fund or through
another intermediary to receive such reductions or waivers.
JANNEY MONTGOMERY
SCOTT LLC
Effective May 1, 2020, shareholders
purchasing fund shares through a Janney Montgomery Scott LLC (“Janney”) account will be eligible only for the following load
waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from
those disclosed elsewhere in this fund’s Prospectus or SAI.
Front-end sales charge
waivers on Class L shares available at Janney
•
Shares
purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not
any other fund within the fund family).
•
Shares
purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
•
Shares
purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days
following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to
a front-end or deferred sales load (i.e., right of reinstatement).
•
Class C
shares that are no longer subject to a contingent deferred sales charge and are converted to Class L shares of the same fund pursuant
to Janney’s policies and procedures.
Sales charge waivers
on Class L and C shares available at Janney
Shares sold upon the death or disability
of the shareholder.
•
Shares
sold as part of a systematic withdrawal plan as described in the fund’s Prospectus.
•
Shares
purchased in connection with a return of excess contributions from an IRA account.
•
Shares
sold as part of a required minimum distribution for IRA and other retirement accounts due to the shareholder reaching age 701∕2
as described in the fund’s Prospectus.
•
Shares
sold to pay Janney fees but only if the transaction is initiated by Janney.
•
Shares
acquired through a right of reinstatement.
Front-end load discounts
available at Janney: breakpoints, and/or rights of accumulation
•
Breakpoints
as described in the fund’s Prospectus.
•
Rights
of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the
aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets
not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
MERRILL LYNCH
Shareholders purchasing Fund shares through
a Merrill Lynch platform or account are eligible only for the following load (front-end sales charge waivers and contingent deferred,
or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.
Front-end Sales Load Waivers on Class L
Shares available at Merrill Lynch
•
Employer-sponsored
retirement, deferred compensation and employee benefits plans (including health savings accounts) and trusts used to fund those plans,
provided that the shares are not held in a commission-based brokerage account and shares are held for the benefit of the plan.
•
Shares
purchased by a 529 Plan (does not include 529 Plan units or 529-specific share classes or equivalents).
•
Shares
purchased through a Merrill Lynch affiliated investment advisory program.
•
Shares
exchanged due to the holdings moving from a Merrill Lynch affiliated investment advisory program to a Merrill Lynch brokerage (non-advisory)
account pursuant to Merrill Lynch’s policies relating to sales load discounts and waivers.
•
Shares
purchased by third party investment advisors on behalf of their advisory clients through Merrill Lynch’s platform.
•
Shares
of funds purchased through the Merrill Edge Self-Directed platform (if applicable).
•
Shares
purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not
any other fund within the fund family).
•
Shares
exchanged from Class C (i.e. level-load) shares of the same fund pursuant to Merrill Lynch’s policies relating to sales load
discounts and waivers.
•
Employees
and registered representatives of Merrill Lynch or its affiliates and their family members.
•
Directors
or Trustees of the Fund, and employees of the Fund’s investment adviser or any of its affiliates, as described in the prospectus.
•
Eligible
shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days
following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to
a front-end or deferred sales load (known as Rights of Reinstatement). Automated transactions (i.e. systematic purchases and withdrawals)
and purchases made after shares are automatically sold to pay Merrill Lynch’s account maintenance fees are not eligible for reinstatement.
CDSC Waivers on Class L
and C Shares available at Merrill Lynch
•
Death
or disability of the shareholder.
•
Shares
sold as part of a systematic withdrawal plan as described in this Prospectus.
•
Return
of excess contributions from an IRA Account.
•
Shares
sold as part of a required minimum distribution for IRA and retirement accounts pursuant to the Internal Revenue Code.
•
Shares
sold to pay Merrill Lynch fees but only if the transaction is initiated by Merrill Lynch.
•
Shares
acquired through a right of reinstatement.
•
Shares
held in retirement brokerage accounts, that are exchanged for a lower cost share class due to transfer to certain fee based accounts or
platforms (applicable to L and C shares only).
•
Shares
received through an exchange due to the holdings moving from a Merrill Lynch affiliated investment advisory program to a Merrill Lynch
brokerage (non-advisory) account pursuant to Merrill Lynch’s policies relating to sales load discounts and waivers.
Other Discounts available at Merrill
Lynch: Breakpoints, Rights of Accumulation and Letters of Intent
•
Breakpoints
as described in this Prospectus.
•
Rights
of Accumulation (ROA) which entitle shareholders to breakpoint discounts as described in the Fund’s prospectus will be automatically
calculated based on the aggregated holding of fund family assets held by accounts (including 529 program holdings, where applicable) within
the purchaser’s household at Merrill Lynch. Eligible fund family assets not held at Merrill Lynch may be included in the ROA calculation
only if the shareholder notifies his or her financial advisor about such assets.
•
Letters
of Intent (LOI) which allow for breakpoint discounts based on anticipated purchases within a fund family, through Merrill Lynch, over
a 13-month period of time (if applicable).
MORGAN STANLEY
Shareholders purchasing Fund shares through
a Morgan Stanley Wealth Management transactional brokerage account will be eligible only for the following front-end sales charge waivers
with respect to Class L shares, as applicable, which may differ from and may be more limited than those disclosed elsewhere in this
Fund’s Prospectus or SAI.
Front-end
Sales Charge Waivers on Class L Shares available at Morgan Stanley Wealth Management
•
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and
defined benefit plans). For purposes of this provision, employer- sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs
or Keogh plans
•
Morgan
Stanley employee and employee-related accounts according to Morgan Stanley’s account linking rules
•
Shares
purchased through reinvestment of dividends and capital gains distributions when purchasing shares of the same fund
•
Shares
purchased through a Morgan Stanley self-directed brokerage account
•
Class C
(i.e., level-load) shares that are no longer subject to a contingent deferred sales charge and are converted to Class L shares of
the same fund, as applicable, pursuant to Morgan Stanley Wealth Management’s share class conversion program
•
Shares
purchased from the proceeds of redemptions within the same fund family, provided (i) the repurchase occurs within 90 days following
the redemption, (ii) the redemption and purchase occur in the same account, and (iii) redeemed shares were subject to a front-end
or deferred sales charge.
RAYMOND JAMES
Intermediary-Defined
Sales Charge Waiver Policies
The availability
of certain initial or deferred sales charge waivers and discounts may depend on the particular financial intermediary or type of account
through which you purchase or hold Fund shares.
Intermediaries may
have different policies and procedures regarding the availability of front-end sales load waivers or contingent deferred (back-end) sales
load (“CDSC”) waivers, which are discussed below. In all instances, it is the purchaser’s responsibility to notify the
fund or the purchaser’s financial intermediary at the time of purchase of any relationship or other facts qualifying the purchaser
for sales charge waivers or discounts. For waivers and discounts not available through a particular intermediary, shareholders will have
to purchase fund shares directly from the fund or through another intermediary to receive these waivers or discounts.
Raymond James
& Associates, Inc., Raymond James Financial Services, Inc. and each entity’s affiliates (“Raymond James”)
Effective March 1,
2019, shareholders purchasing fund shares through a Raymond James platform or account, or through an introducing broker-dealer or independent
registered investment adviser for which Raymond James provides trade execution, clearance, and/or custody services, will be eligible only
for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts,
which may differ from those disclosed elsewhere in this fund’s prospectus or SAI.
Front-end
sales load waivers on Class L shares available at Raymond James
•
Shares
purchased in an investment advisory program.
•
Shares
purchased within the same fund family through a systematic reinvestment of capital gains and dividend distributions.
•
Employees
and registered representatives of Raymond James or its affiliates and their family members as designated by Raymond James.
•
Shares
purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following
the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end
or deferred sales load (known as Rights of Reinstatement).
•
A
shareholder in the Fund’s Class C shares will have their shares converted at net asset value to Class L shares (or the
appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the conversion is in line with the policies and
procedures of Raymond James.
CDSC
Waivers on Classes L and C shares available at Raymond James
•
Death
or disability of the shareholder.
•
Shares
sold as part of a systematic withdrawal plan as described in the fund’s prospectus.
•
Return
of excess contributions from an IRA Account.
•
Shares
sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching the qualified age based
on applicable IRS regulations as described in the fund’s prospectus.
•
Shares
sold to pay Raymond James fees but only if the transaction is initiated by Raymond James.
•
Shares
acquired through a right of reinstatement.
Front-end
load discounts available at Raymond James: breakpoints, rights of accumulation, and/or letters of intent
•
Breakpoints
as described in this prospectus.
•
Rights
of accumulation which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of
fund family assets held by accounts within the purchaser’s household at Raymond James. Eligible fund family assets not held at Raymond
James may be included in the calculation of rights of accumulation only if the shareholder notifies his or her financial advisor about
such assets.
•
Letters
of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible
fund family assets not held at Raymond James may be included in the calculation of letters of intent only if the shareholder notifies
his or her financial advisor about such assets.
UBS
Class Y shares may also be available
on UBS’s brokerage platform since it has entered into an agreement with the Funds’ distributor to offer such shares solely
when acting as an agent for the investor. An investor transacting
in Class Y may be required to pay a commission and/or
other forms of compensation to the broker. Shares of the Funds are available in other share classes that have different fees and expenses.
WELLS FARGO
Shareholders purchasing Fund shares through
a Wells Fargo platform or account are eligible only for the following load (front-end sales charges waivers and contingent deferred, or
back-end sales charge waivers) and discounts, which may different from those disclosed elsewhere in the Fund’s Prospectus or SAI.
Effective November 1, 2019, Class C
Shares of each Fund will automatically convert into Class L Shares of the same Fund after they have been held for ten years.
This automatic conversion will be executed without any sales charge, fee or other charge. After the conversion takes place, the shares
will be subject to all features and expenses of Class L Shares.
MASSMUTUAL FUNDS
1295
State Street
Springfield, Massachusetts 01111-0001
Learning
More About the Funds
You can learn more
about the Funds by reading the Funds’ Annual and Semiannual Reports
and the SAI. You may obtain free
copies of this information from the Funds or from the SEC using one or more of the methods set forth below. In the Annual and Semiannual
Reports, you will find a discussion of market conditions and investment strategies that significantly affected each Fund’s performance
during the period covered by the Report and a listing of each Fund’s portfolio securities as of the end of such period. The SAI
provides additional information about the Funds and will provide you with more detail regarding the organization and operation of the
Funds, including their investment strategies. The SAI is incorporated by reference into this Prospectus and is therefore legally considered
a part of this Prospectus.
How
to Obtain Information
From
the Funds: You may request information about the Funds free of charge (including the
Annual/Semiannual Reports and the SAI) or make shareholder inquiries by calling 1-888-309-3539 or by writing the Funds, c/o Massachusetts
Mutual Life Insurance Company, 1295 State Street, Springfield, Massachusetts 01111-0001, Attention:
Investment Management Solutions. You may also obtain copies of the Annual/Semiannual Reports and
the SAI free of charge at https://www.massmutual.com/funds.
From the SEC: Information
about the Funds (including the Annual/Semiannual Reports and the SAI) is available on the SEC’s EDGAR database on its Internet site
at http://www.sec.gov. You can also get copies of this information, upon payment of a copying fee, by electronic request at publicinfo@sec.gov.
When obtaining information
about the Funds from the SEC, you may find it useful to reference the Funds’
SEC file number: 811-08690.
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MASSMUTUAL PREMIER FUNDS
1295 STATE STREET
SPRINGFIELD,
MASSACHUSETTS 01111-0001
STATEMENT OF ADDITIONAL INFORMATION
THIS
STATEMENT OF ADDITIONAL INFORMATION (“SAI”) IS NOT A PROSPECTUS. IT SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS OF
MASSMUTUAL PREMIER FUNDS (THE “TRUST”) DATED FEBRUARY 1, 2022, AS AMENDED FROM TIME TO TIME (THE “PROSPECTUS”).
THIS SAI INCORPORATES HEREIN THE FINANCIAL STATEMENTS OF THE FUNDS BY REFERENCE TO THE TRUST’S ANNUAL REPORT AS OF SEPTEMBER 30,
2021 (THE “ANNUAL REPORT”). TO OBTAIN A PROSPECTUS OR AN ANNUAL REPORT, CALL TOLL-FREE 1-888-309-3539, OR WRITE THE TRUST
AT THE ABOVE ADDRESS.
This
SAI relates to the following Funds:
Fund Name
|
|
|
Class
I |
|
|
Class
R5 |
|
|
Service Class
|
|
|
Administrative Class
|
|
|
Class
A |
|
|
Class
R4 |
|
|
Class
R3 |
|
MassMutual U.S. Government
Money Market Fund |
|
|
|
|
|
MKSXX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MassMutual Inflation-Protected
and Income Fund |
|
|
MIPZX |
|
|
MIPSX |
|
|
MIPYX |
|
|
MIPLX |
|
|
MPSAX |
|
|
MIPRX |
|
|
MIPNX |
|
MassMutual Core Bond Fund |
|
|
MCZZX |
|
|
MCBDX |
|
|
MCBYX |
|
|
MCBLX |
|
|
MMCBX |
|
|
MCZRX |
|
|
MCBNX |
|
MassMutual Diversified Bond Fund |
|
|
MDBZX |
|
|
MDBSX |
|
|
MDBYX |
|
|
MDBLX |
|
|
MDVAX |
|
|
MDBFX |
|
|
MDBNX |
|
MassMutual Balanced Fund |
|
|
MBBIX |
|
|
MBLDX |
|
|
MBAYX |
|
|
MMBLX |
|
|
MMBDX |
|
|
MBBRX |
|
|
MMBRX |
|
MassMutual Disciplined Value Fund |
|
|
MPIVX |
|
|
MEPSX |
|
|
DENVX |
|
|
MPILX |
|
|
MEPAX |
|
|
MPIRX |
|
|
MPINX |
|
MassMutual Main Street Fund |
|
|
MSZIX |
|
|
MMSSX |
|
|
MMSYX |
|
|
MMSLX |
|
|
MSSAX |
|
|
MSSRX |
|
|
MMSNX |
|
MassMutual Disciplined Growth Fund |
|
|
MPDIX |
|
|
MPGSX |
|
|
DEIGX |
|
|
MPGLX |
|
|
MPGAX |
|
|
MPDGX |
|
|
MPDRX |
|
MassMutual Small Cap Opportunities Fund
|
|
|
MSOOX |
|
|
MSCDX |
|
|
MSVYX |
|
|
MSCLX |
|
|
DLBMX |
|
|
MOORX |
|
|
MCCRX |
|
MassMutual Global Fund |
|
|
MGFZX |
|
|
MGFSX |
|
|
MGFYX |
|
|
MGFLX |
|
|
MGFAX |
|
|
MGFRX |
|
|
MGFNX |
|
MassMutual International Equity Fund
|
|
|
MIZIX |
|
|
MIEDX |
|
|
MYIEX |
|
|
MIELX |
|
|
MMIAX |
|
|
MEIRX |
|
|
MEERX |
|
MassMutual Strategic Emerging Markets Fund |
|
|
MPZSX |
|
|
MPSMX |
|
|
MPEYX |
|
|
MPLSX |
|
|
MPASX |
|
|
MPRSX |
|
|
MPZRX |
|
No
dealer, salesman or any other person has been authorized to give any information or to make any representations, other than those contained
in this SAI or in the related Prospectus, in connection with the offer contained herein, and, if given or made, such other information
or representation must not be relied upon as having been authorized by the Trust or MML Distributors, LLC (the “Distributor”).
This SAI and the related Prospectus do not constitute an offer by the Trust or by the Distributor to sell or a solicitation of any offer
to buy any of the securities offered hereby in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction.
Dated
February 1, 2022
GENERAL INFORMATION
MassMutual
Premier Funds (the “Trust”) is a professionally managed, open-end investment company. This Statement of Additional Information
(“SAI”) describes the following 12 diversified series of the Trust: (1) MassMutual U.S. Government Money Market Fund (formerly
known as MassMutual Premier U.S. Government Money Market Fund) (“U.S. Government Money Market Fund”), (2) MassMutual
Inflation-Protected and Income Fund (formerly known as MassMutual Premier Inflation-Protected and Income Fund) (“Inflation-Protected
and Income Fund”), (3) MassMutual Core Bond Fund (formerly known as MassMutual Premier Core Bond Fund) (“Core Bond Fund”),
(4) MassMutual Diversified Bond Fund (formerly known as MassMutual Premier Diversified Bond Fund) (“Diversified Bond Fund”),
(5) MassMutual Balanced Fund (formerly known as MassMutual Premier Balanced Fund) (“Balanced Fund”), (6) MassMutual
Disciplined Value Fund (formerly known as MassMutual Premier Disciplined Value Fund) (“Disciplined Value Fund”), (7) MassMutual
Main Street Fund (formerly known as MassMutual Premier Main Street Fund) (“Main Street Fund”), (8) MassMutual Disciplined
Growth Fund (formerly known as MassMutual Premier Disciplined Growth Fund) (“Disciplined Growth Fund”), (9) MassMutual Small
Cap Opportunities Fund (formerly known as MassMutual Premier Small Cap Opportunities Fund) (“Small Cap Opportunities Fund”),
(10) MassMutual Global Fund (formerly known as MassMutual Premier Global Fund) (“Global Fund”), (11) MassMutual International
Equity Fund (formerly known as MassMutual Premier International Equity Fund) (“International Equity Fund”), and (12) MassMutual
Strategic Emerging Markets Fund (formerly known as MassMutual Premier Strategic Emerging Markets Fund) (“Strategic Emerging Markets
Fund”) (each individually referred to as a “Fund” or collectively as the “Funds”). Currently, the Trustees
have authorized a total of 14 separate series. Additional series may be created by the Trustees from time-to-time.
The
Trust is organized under the laws of The Commonwealth of Massachusetts as a Massachusetts business trust pursuant to an Agreement and
Declaration of Trust dated August 1, 1994, as amended and restated as of November 21, 2011, as it may be further amended from time to
time (the “Declaration of Trust”). The investment adviser for each of the Funds is MML Investment Advisers, LLC (“MML
Advisers”). The subadviser for the U.S. Government Money Market Fund, Inflation-Protected and Income Fund, Core Bond Fund, and
Diversified Bond Fund is Barings LLC (“Barings”). Barings is an indirect subsidiary of Massachusetts Mutual Life Insurance
Company (“MassMutual”). In addition, Baring International Investment Limited (“BIIL”) serves as a sub-subadviser
for the Inflation-Protected and Income Fund, Core Bond Fund, and Diversified Bond Fund. The subadviser for the Balanced Fund, Main Street
Fund, Small Cap Opportunities Fund, Global Fund, and Strategic Emerging Markets Fund is Invesco Advisers, Inc. (“Invesco Advisers”).
In addition, Invesco Capital Management LLC (“ICM”) serves as sub-subadviser for the Balanced Fund. The subadviser for the
Disciplined Value Fund and Disciplined Growth Fund is Wellington Management Company LLP (“Wellington Management”). The subadvisers
for the International Equity Fund are Wellington Management and Thompson, Siegel & Walmsley LLC (“TSW”). References
in this SAI to a Fund’s subadviser may include any sub-subadvisers as applicable.
ADDITIONAL INVESTMENT POLICIES
Each
Fund has a distinct investment objective which it pursues through separate investment policies, as described in the Prospectus and below.
The fundamental investment policies and fundamental investment restrictions of a Fund may not be changed without the vote of a majority
of that Fund’s outstanding voting securities (which, under the Investment Company Act of 1940, as amended (the “1940 Act”)
and the rules thereunder and as used in this SAI and in the Prospectus, means the lesser of (l) 67% of the shares of that Fund present
at a meeting if the holders of more than 50% of the outstanding shares of that Fund are present in person or by proxy, or (2) more
than 50% of the outstanding shares of that Fund). The Board of Trustees of the Trust (the “Board”) may adopt new or amend
or delete existing non-fundamental investment policies and restrictions without shareholder approval. There is no guarantee that any Fund
will achieve its investment objective.
Unless
otherwise specified, each Fund may engage in the investment practices and techniques described below to the extent consistent with such
Fund’s investment objective and fundamental investment restrictions. Not all Funds necessarily will utilize all or any of these
practices and techniques at any one time or at all. Investment policies and restrictions described below are non-fundamental and may be
changed by the Trustees without shareholder approval, unless otherwise noted. For a description of the ratings of corporate debt securities
and money market instruments in which the various Funds may invest, reference should be made to Appendix A.
U.S. Government Money Market Fund
For
so long as the U.S. Government Money Market Fund values its portfolio instruments on the basis of amortized cost (see “Valuation
of Portfolio Securities”), its investments are subject to portfolio maturity, portfolio quality, and portfolio diversification
requirements imposed by Rule 2a-7 under the 1940 Act. The U.S. Government Money Market Fund must maintain a dollar-weighted average
portfolio maturity of 60 days or less, generally must purchase instruments having remaining maturities of thirteen months (generally
397 days) or less, and must invest only in United States dollar-denominated securities determined to be of high quality with minimal
credit risks.
The
high quality debt instruments in which the U.S. Government Money Market Fund invests may not offer as high a yield as may be achieved
from lower quality instruments having less safety. An investment in the U.S. Government Money Market Fund is not without risk. If the
U.S. Government Money Market Fund disposes of an obligation prior to maturity, it may realize a loss or gain. An increase in interest
rates will generally reduce the value of portfolio investments. In addition, investments are subject to the ability of the issuer to make
payment at maturity. The U.S. Government Money Market Fund will reassess whether a particular security presents minimal credit risks in
certain circumstances.
Certain
money market instruments are available only in relatively large denominations, and others may carry higher yields if purchased in relatively
large denominations. Also, the Fund’s investment adviser and subadviser believe that an institutional purchaser of money market
instruments who can invest relatively large sums on a regular basis may have investment opportunities that are not available to those
who invest smaller sums less frequently. Certain of the U.S. Government Money Market Fund’s investment restrictions limit the percentage
of the Fund’s assets that may be invested in certain industries or in securities of any issuer. Accordingly, if the Fund has relatively
small net assets and net cash flow from sales and redemptions of shares, the Fund may be unable to invest in money market instruments
paying the highest yield available at a particular time.
Balanced Fund
Disclaimer.
The “Invesco US Large Cap Total Balanced Multi-Factor ESG Index” and “Invesco Indexing” are the property of
Invesco Indexing LLC and have been licensed for use by ICM.
The
shares (“Shares”) of the Balanced Fund (the “Product”) are not sponsored, endorsed, sold or promoted by Invesco
Indexing LLC (“Licensor”). Licensor makes no representation or warranty, express or implied, to the owners of the Shares
or any member of the public regarding the advisability of investing in securities generally or in the Shares particularly or the ability
of the Invesco US Large Cap Total Balanced Multi-Factor ESG Index to track general stock market performance. Licensor is an affiliate
of ICM and Invesco Advisers and its relationship to ICM and Invesco Advisers includes the licensing of certain trademarks and trade names
of Licensor and of the Invesco US Large Cap Total Balanced Multi-Factor ESG Index which is determined, composed and calculated by Licensor
without regard to ICM, Invesco Advisers, the Product or the Shares. Licensor has no obligation to take the needs of the Licensee or the
owners of the Shares into consideration in determining, composing or calculating the Invesco US Large Cap Total Balanced Multi-Factor
ESG Index. Licensor is not responsible for and has not participated in any determination or calculation made with respect to issuance
or redemption of the Shares. Licensor has no obligation or liability in connection with the administration, marketing or trading of the
Shares.
Licensor
does not guarantee the accuracy and/or the completeness of the Invesco US Large Cap Total Balanced Multi-Factor ESG Index and/or any data
included therein. Licensor makes no warranty, express or implied, as to results to be obtained by ICM, Invesco Advisers, the Product or
any owner of the Shares, or any other person or entity from the use of the Invesco US Large Cap Total Balanced Multi-Factor ESG Index
or any data included therein in connection with the rights licensed hereunder or for any other use.
Licensor
makes no express or implied warranties, and hereby expressly disclaims all warranties of merchantability or fitness for a particular purpose
with respect to the Invesco US Large Cap Total Balanced Multi-Factor ESG Index or any data included therein. Without limiting any of the
foregoing, in no event shall Licensor have any liability for any special, punitive, indirect, or consequential damages (including lost
profits), even if notified of the possibility of such damages.
Asset-Based Securities
A
Fund may invest in debt, preferred, or convertible securities, the principal amount, redemption terms, or conversion terms of which are
related to the market price of some natural resource asset such as gold bullion. These securities are referred to as “asset-based
securities.” If an asset-based security is backed by a bank letter of credit or other similar facility, the investment adviser
or subadviser may take such backing into account in determining the creditworthiness of the issuer.
While the market prices for
an asset-based security and the related natural resource asset generally are expected to move in the same direction, there may not be
perfect correlation in the two price movements. Asset-based securities may not be secured by a security interest in or claim on the underlying
natural resource asset. The asset-based securities in which a Fund may invest may bear interest or pay preferred dividends at below market
(or even relatively nominal) rates. Certain asset-based securities may be payable at maturity in cash at the stated principal amount or,
at the option of the holder, directly in a stated amount of the asset to which it is related. In such instance, because no Fund presently
intends to invest directly in natural resource assets, a Fund would sell the asset-based security in the secondary market, to the extent
one exists, prior to maturity if the value of the stated amount of the asset exceeds the stated principal amount and thereby realize the
appreciation in the underlying asset. Certain restrictions imposed on the Funds by the Internal Revenue Code of 1986, as amended (the
“Code”), may limit the Funds’ ability to invest in certain natural resource-based securities.
Precious
Metal-Related Securities. A Fund may invest in the equity securities of
companies that explore for, extract, process, or deal in precious metals (e.g., gold, silver, and platinum), and in asset-based securities
indexed to the value of such metals. Such securities may be purchased when they are believed to be attractively priced in relation to
the value of a company’s precious metal-related assets or when the values of precious metals are expected to benefit from inflationary
pressure or other economic, political, or financial uncertainty or instability. Based on historical experience, during periods of economic
or financial instability the securities of companies involved in precious metals may be subject to extreme price fluctuations, reflecting
the high volatility of precious metal prices during such periods. In addition, the instability of precious metal prices may result in
volatile earnings of precious metal-related companies, which may, in turn, adversely affect the financial condition of such companies.
The
major producers of gold include the Republic of South Africa, Russia, Canada, the United States, Brazil, and Australia. Sales of gold
by Russia are largely unpredictable and often relate to political and economic considerations rather than to market forces. Economic,
financial, social, and political factors within South Africa may significantly affect South African gold production.
Bank Capital Securities
A
Fund may invest in bank capital securities. Bank capital securities are issued by banks to help fulfill their regulatory capital requirements.
Many bank capital securities are commonly thought of as hybrids of debt and preferred stock. Some bank capital securities are perpetual
(with no maturity date), callable, and have a cumulative interest deferral feature. This means that under certain conditions, the issuer
bank can withhold payment of interest until a later date, likely increasing the credit and interest rate risks of an investment in those
securities. Investments in bank capital securities are subject to the risks of other debt investments, such as default and non-payment,
as well as certain other risks, such as the risk that bank regulators may force the bank to dissolve, merge, restructure its capitalization,
or take other actions intended to prevent its failure or ensure its orderly resolution. Bank regulators in certain jurisdictions have
broad authorities they may use to prevent the failure of banking institutions or to stabilize the banking industry, all of which may adversely
affect the values of investments in bank capital securities and other bank obligations, including those of other banks.
Bank Loans
A
Fund may invest in bank loans including, for example, corporate loans, loan participations, direct debt, bank debt, and bridge debt. A
Fund may invest in a loan by lending money to a borrower directly as part of a syndicate of lenders. In a syndicated loan, the agent that
originated and structured the loan typically administers and enforces the loan on behalf of the syndicate. In such cases, the agent is
normally responsible for the collection of principal and interest payments from the borrower and the apportionment of these payments to
the credit of all institutions that are parties to the loan agreement. A Fund will generally rely on the agent to receive and forward
to the Fund its portion of the principal and interest payments on the loan. Failure by the agent to fulfill its obligations may delay
or adversely affect receipt of payment by a Fund.
A
Fund may invest in loans through novations, assignments, and participation interests. In a novation, a Fund typically assumes all of the
rights of a lending institution in a loan, including the right to receive payments of principal and interest and other amounts directly
from the borrower and to enforce its rights as a lender directly against the borrower. When a Fund takes an assignment of a loan, the
Fund acquires some or all of the interest of another lender (or assignee) in the loan. In such cases, the Fund may be required generally
to rely upon the assignor to demand payment and enforce rights under the loan. (There may be one or more assignors prior in time to the
Fund.) If a Fund acquires a participation in the loan made by a third party loan investor, the Fund typically will have a contractual
relationship only with the loan investor, not with the borrower. As a result, a Fund may have the right to receive payments of principal,
interest, and any fees to which it is entitled only from the loan investor selling the participation and only upon receipt by such loan
investor of such payments from the borrower. In connection with participations, a Fund generally will have no right to enforce compliance
by the borrower with the terms
of the loan agreement, nor any rights with respect to any funds acquired by other loan investors through set-off against the borrower,
and the Fund may not directly benefit from the collateral supporting the loan in which it has purchased the participation. As a result,
a Fund assumes the credit risk of both the borrower and the loan investor selling the participation. In the event of the insolvency of
the loan investor selling a participation, a Fund may be treated as a general creditor of such loan investor. In addition, because loan
participations are not generally rated by independent credit rating agencies, a decision by a Fund to invest in a particular loan participation
will depend almost exclusively on its investment adviser’s or subadviser’s credit analysis of the borrower.
Loans
in which a Fund may invest are subject generally to the same risks as debt securities in which the Fund may invest. In addition, loans
in which a Fund may invest, including bridge loans, are generally made to finance internal growth, mergers, acquisitions, stock repurchases,
leveraged buy-outs, and other corporate activities, including bridge loans. A significant portion of the loans purchased by a Fund may
represent interests in loans made to finance highly leveraged corporate acquisitions, known as “leveraged buy-out” transactions,
leveraged recapitalization loans, and other types of acquisition financing. The highly leveraged capital structure of the borrowers in
such transactions may make such loans especially vulnerable to adverse changes in economic or market conditions.
Loans
generally are subject to restrictions on transfer, and only limited opportunities may exist to sell loans in secondary markets. In some
cases, negotiations involved in disposing of indebtedness may require weeks to complete. As a result, a Fund may be unable to sell loans
at a time when it may otherwise be desirable to do so or may be able to sell them only at a price that is less than their fair market
value. The settlement time for certain loans is longer than the settlement time for many other types of investments, and a Fund may not
receive the payment for a loan sold by it until well after the sale; that cash would be unavailable for payment of redemption proceeds
or for reinvestment.
Certain
of the loans acquired by a Fund may involve revolving credit facilities under which a borrower may from time to time borrow and repay
amounts up to the maximum amount of the facility. In such cases, the Fund would have an obligation to advance its portion of such additional
borrowings upon the terms specified in the loan participation. A Fund may be required to fund such advances at times and in circumstances
where the Fund might not otherwise choose to make a loan to the borrower.
The
value of collateral, if any, securing a loan can decline, or may be insufficient to meet the borrower’s obligations or difficult
to liquidate, or a Fund may be prevented or delayed from realizing the collateral. In addition, a Fund’s access to collateral may
be limited by bankruptcy or other insolvency laws. If a secured loan is foreclosed, a Fund could become part owner of any collateral,
and would bear the costs and liabilities associated with owning and disposing of the collateral. A bankruptcy or restructuring can result
in the loan being converted to an equity ownership interest in the borrower. In addition, under legal theories of lender liability, a
Fund potentially might be held liable as a co-lender.
Loans
may not be considered “securities,” and a Fund that purchases a loan may not be entitled to rely on anti-fraud and other
protections under the federal securities laws.
Below Investment Grade Debt Securities
A
Fund may purchase below investment grade debt securities, sometimes referred to as “junk” or “high yield”
bonds. The lower ratings of certain securities held by a Fund reflect a greater possibility that adverse changes in the financial condition
of the issuer, or in general economic conditions, or both, or an unanticipated rise in interest rates, may impair the ability of the issuer
to make payments of interest and principal. The inability (or perceived inability) of issuers to make timely payment of interest and principal
would likely make the values of securities held by the Fund more volatile and could limit the Fund’s ability to sell its securities
at prices approximating the values a Fund had placed on such securities. In the absence of a liquid trading market for securities held
by it, the Fund may be unable at times to establish the fair market value of such securities. The rating assigned to a security by S&P
Global Ratings (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”) does not reflect an
assessment of the volatility of the security’s market value or of the liquidity of an investment in the security. (The term “below
investment grade debt securities” includes securities that are not rated but are considered by a Fund’s investment adviser
or subadviser to be of comparable quality to other below investment grade debt securities.)
Like
those of other fixed income securities, the values of below investment grade debt securities fluctuate in response to changes in interest
rates. Thus, a decrease in interest rates generally will result in an increase in the value of a Fund’s fixed income securities.
Conversely, during periods of rising interest rates, the value of a Fund’s fixed income securities generally will decline. In addition,
the values of such securities are also affected by changes in general economic conditions and business conditions, which are more likely
to lead to a weakened capacity to make principal and interest payments than in the case of higher grade securities. Changes by recognized
rating services in their ratings of any fixed
income security and in the
ability of an issuer to make payments of interest and principal may also affect the value of these investments. Changes in the values
of portfolio securities generally will not affect cash income derived from such securities, but will affect the Fund’s net asset
value (“NAV”).
Issuers
of below investment grade debt securities are often highly leveraged, so their ability to service their debt obligations during an economic
downturn or during sustained periods of rising interest rates may be impaired. In the past, economic downturns or increases in interest
rates have, under certain circumstances, resulted in a higher incidence of default by the issuers of these instruments and are likely
to do so in the future, especially in the case of highly leveraged issuers. In addition, such issuers may not have more traditional methods
of financing available to them, and may be unable to repay debt at maturity by refinancing. The risk of loss due to default in payment
of interest or principal by such issuers is significantly greater because such securities frequently are unsecured and subordinated to
the prior payment of senior indebtedness. Certain of the below investment grade debt securities in which a Fund may invest are issued
to raise funds in connection with the acquisition of a company, in so-called “leveraged buy-out” transactions. The highly
leveraged capital structure of such issuers may make them especially vulnerable to adverse changes in economic conditions.
Under
adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, a Fund could find it
more difficult to sell below investment grade debt securities when the Fund’s investment adviser or subadviser believes it advisable
to do so or may be able to sell such securities only at prices lower than might otherwise be available. Consolidation in the financial
services industry has resulted in there being fewer market makers for high yield bonds, which may result in further risk of illiquidity
and volatility with respect to high yield bonds held by a Fund, and this trend may continue in the future. Furthermore, high yield bonds
held by a Fund may not be registered under the Securities Act of 1933, as amended (the “1933 Act”), and, unless so registered,
a Fund will not be able to sell such high yield bonds except pursuant to an exemption from registration under the 1933 Act. This may further
limit the Fund’s ability to sell high yield debt securities or to obtain the desired price for such securities. In many cases,
below investment grade debt securities may be purchased in private placements and, accordingly, will be subject to restrictions on resale
as a matter of contract or under securities laws. Under such circumstances, it may also be more difficult to determine the fair values
of such securities for purposes of computing a Fund’s NAV. In order to enforce its rights in the event of a default by an issuer
of below investment grade debt securities, a Fund may be required to take possession of and manage assets securing the issuer’s
obligations on such securities, which may increase the Fund’s operating expenses and adversely affect the Fund’s NAV. A
Fund may also be limited in its ability to enforce its rights and may incur greater costs in enforcing its rights in the event an issuer
becomes the subject of bankruptcy proceedings. In addition, the Funds’ intention or ability to qualify as “regulated investment
companies” under the Code may limit the extent to which a Fund may exercise its rights by taking possession of such assets.
Certain
securities held by a Fund may permit the issuer at its option to “call,” or redeem, its securities. If an issuer were to
redeem securities held by a Fund during a time of declining interest rates, the Fund may not be able to reinvest the proceeds in securities
providing the same investment return as the securities redeemed.
The
prices for below investment grade debt securities may be affected by legislative and regulatory developments. Below investment grade debt
securities may also be subject to certain risks not typically associated with “investment grade” securities, such as the
following: (i) reliable and objective information about the value of below investment grade debt securities may be difficult to obtain
because the market for such securities may be thinner and less active than that for investment grade obligations; (ii) adverse publicity
and investor perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of lower than investment
grade obligations, and, in turn, adversely affect their market; (iii) companies that issue below investment grade debt securities may
be in the growth stage of their development, or may be financially troubled or highly leveraged, so they may not have more traditional
methods of financing available to them; (iv) when other institutional investors dispose of their holdings of below investment grade debt
securities, the general market and the prices for such securities could be adversely affected; and (v) the market for below investment
grade debt securities could be impaired if legislative proposals to limit their use in connection with corporate reorganizations or to
limit their tax and other advantages are enacted.
Borrowings
A
Fund is required at all times to maintain its assets at a level at least three times the amount of all of its borrowings (the “300%
asset coverage test”). Borrowings for this purpose include obligations under any futures contract on a debt obligation. The Securities
and Exchange Commission (“SEC”) has taken the position that certain transactions, such as entering into reverse repurchase
agreements, engaging in dollar roll transactions, selling securities short (other than short sales “against-the-box”), buying
and selling certain derivatives (such as futures contracts), and selling (or writing) put and call options, and other trading practices
that have a leveraging effect on the capital structure of a fund or are economically
equivalent
to borrowing can be viewed as borrowing by the fund for purposes of the 1940 Act. Subject to changes that will apply once the Funds come
into compliance with Rule 18f-4 of the 1940 Act, a borrowing transaction (including, without limitation, a reverse repurchase agreement
transaction) will not be considered to constitute the issuance of a “senior security” by a fund, and therefore such transaction
will not be subject to the 300% asset coverage requirement otherwise applicable to borrowings by a fund, if the fund (1) maintains an
offsetting financial position; (2) segregates liquid assets equal (as determined on a daily mark-to-market basis) in value to the fund’s
potential economic exposure under the borrowing transaction; or (3) otherwise “covers” the transaction in accordance with
SEC guidance. Any borrowings that come to exceed the 300% asset coverage requirement will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with this requirement.
Cash and Short-Term Debt Securities
Money
Market Instruments Generally. The Funds may invest in money market securities,
including money market funds. Money market securities are high-quality, short-term debt instruments that may be issued by the U.S. Government,
corporations, banks, or other entities. They may have fixed, variable, or floating interest rates. Some money market securities in which
the Funds may invest are described below. During the 2008 global financial downturn and the recent market volatility caused by the coronavirus
outbreak, many money market instruments that were thought to be highly liquid became illiquid and lost value. The U.S. Government and
the Federal Reserve System, as well as certain foreign governments and central banks, have taken extraordinary actions with respect to
the financial markets generally and money market instruments in particular. While these actions have stabilized the markets for these
instruments, there can be no assurances that those actions will continue or continue to be effective. If a Fund’s money market
instruments become illiquid, the Fund may be unable to satisfy certain of its obligations or may only be able to do so by selling other
securities at prices or times that may be disadvantageous to do so.
Bank
Obligations. The Funds may invest in bank obligations, including certificates
of deposit, time deposits, bankers’ acceptances, and other short-term obligations of domestic banks, foreign subsidiaries of domestic
banks, foreign branches of domestic banks, and domestic and foreign branches of foreign banks, domestic savings and loan associations,
and other banking institutions.
Certificates
of deposit (“CDs”) are negotiable certificates evidencing the obligations of a bank to repay funds deposited with it for
a specified period of time. Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time
at a stated interest rate. Time deposits which may be held by the Funds will not benefit from insurance from the Bank Insurance Fund or
the Savings Association Insurance Fund administered by the Federal Deposit Insurance Corporation. Bankers’ acceptances are credit
instruments evidencing the obligation of a bank to pay a draft drawn on it by a customer. These instruments reflect the obligation both
of the bank and the drawer to pay the face amount of the instrument upon maturity. The other short-term obligations may include uninsured,
direct obligations, bearing fixed, floating, or variable interest rates.
The
Funds may invest in certificates of deposit and bankers’ acceptances of U.S. banks and savings and loan associations, London branches
of U.S. banks, and U.S. branches of foreign banks. Obligations of foreign banks and of foreign branches of U.S. banks may be affected
by foreign governmental action, including imposition of currency controls, interest limitations, withholding or other taxes, seizure of
assets, or the declaration of a moratorium or restriction on payments of principal or interest. Foreign banks and foreign branches of
U.S. banks may provide less public information than, and may not be subject to the same accounting, auditing, and financial recordkeeping
standards as, domestic banks.
Cash,
Short-Term Instruments, and Temporary Investments. The Funds may hold a
significant portion of their assets in cash or cash equivalents at the sole discretion of the Fund’s investment adviser or subadviser.
The Funds’ investment adviser or subadvisers will determine the amount of the Funds’ assets to be held in cash or cash equivalents
at their sole discretion, based on such factors as they may consider appropriate under the circumstances. The Funds may hold a portion
of their assets in cash, for example, in order to provide for expenses or anticipated redemption payments or for temporary defensive purposes.
The Funds may also hold a portion of their assets in cash as part of the Funds’ investment programs or asset allocation strategies,
in amounts considered appropriate by the Funds’ investment adviser or subadvisers. To the extent the Funds hold assets in cash
and otherwise uninvested, its investment returns may be adversely affected and the Funds may not achieve their respective investment objectives.
The Funds may invest in high quality money market instruments. The instruments in which the Funds may invest include, without limitation:
(i) short-term obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities (including government-sponsored
enterprises); (ii) CDs, bankers’ acceptances, fixed time deposits, and other obligations of domestic banks (including foreign branches);
(iii)
non-convertible corporate
debt securities (e.g., bonds and debentures) with remaining maturities at the date of purchase of not more than one year; (iv) repurchase
agreements; and (v) short-term obligations of foreign banks (including U.S. branches).
Commercial
Paper and Short-Term Corporate Debt Instruments. The Funds may invest in
commercial paper (including variable amount master demand notes) consisting of short-term, unsecured promissory notes issued by corporations
to finance short-term credit needs. Commercial paper is usually sold on a discount basis and, other than asset-backed commercial paper,
usually has a maturity at the time of issuance not exceeding nine months. Variable amount master demand notes are demand obligations that
permit the investment of fluctuating amounts at varying market rates of interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payee of such notes whereby both parties have the right to vary the amount of the outstanding indebtedness
on the notes. The investment adviser or subadvisers monitor on an ongoing basis the ability of an issuer of a demand instrument to pay
principal and interest on demand. The Funds also may invest in non-convertible corporate debt securities (e.g., bonds and debentures)
with not more than one year remaining to maturity at the date of settlement.
Letters
of Credit. Certain of the debt obligations (including municipal securities,
certificates of participation, commercial paper, and other short-term obligations) which the Funds may purchase may be backed by an unconditional
and irrevocable letter of credit of a bank, savings and loan association, or insurance company which assumes the obligation for payment
of principal and interest in the event of default by the issuer.
Commodities
A
Fund may invest directly or indirectly in commodities (such as precious metals or natural gas). Commodity prices can be more volatile
than prices of other types of investments and can be affected by a wide range of factors, including changes in overall market movements,
speculative investors, real or perceived inflationary trends, commodity index volatility, changes in interest rates or currency exchange
rates, population growth and changing demographics, nationalization, expropriation, or other confiscation, changes in the costs of discovering,
developing, refining, transporting, and storing commodities, the success of commodity exploration projects, temporary or long-term price
dislocations and inefficiencies in commodity markets generally or in the market for a particular commodity, international or local regulatory,
political, and economic developments (for example, regime changes and changes in economic activity levels), and developments affecting
a particular region, industry, or commodity, such as drought, floods, or other weather conditions, livestock disease, epidemics, trade
embargoes, energy conservation, competition from substitute products, transportation bottlenecks or shortages, fluctuations in supply
and demand, and tariffs. Exposure to commodities can cause the NAV of a Fund’s shares to decline or fluctuate in a rapid and unpredictable
manner. Commodity prices may be more or less volatile than securities of companies engaged in commodity-related businesses. Investments
in commodity-related companies are subject to the risk that the performance of such companies may not correlate with the broader equity
market or with returns on commodity investments to the extent expected by the investment adviser or subadviser. Such companies may be
significantly affected by import controls, worldwide competition, changes in consumer sentiment, and spending, and can be subject to liability
for, among other things, environmental damage, depletion of resources, and mandated expenditures for safety and pollution control. A liquid
secondary market may not exist for certain commodity investments, which may make it difficult for the Fund to sell them at a desirable
price or at the price at which it is carrying them.
A
Fund may also directly or indirectly use commodity-related derivatives. The values of these derivatives may fluctuate more than the relevant
underlying commodity or commodities or commodity index. A Fund’s investments in commodities or commodity-related derivatives can
be limited by the Fund’s intention to qualify as a regulated investment company for federal income tax purposes, and can bear on
the Fund’s ability to qualify as such.
Common and Preferred Stocks
Stocks
represent shares of ownership in a company. Generally, preferred stock has a specified dividend and ranks after bonds and before common
stocks in its claim on income for dividend payments and on assets should the company be liquidated. After other claims are satisfied,
common stockholders participate in company profits on a pro-rata basis. Profits may be paid out in dividends or reinvested in the company
to help it grow. Increases and decreases in earnings are usually reflected in a company’s stock price, so common stocks generally
have the greatest appreciation and depreciation potential of all corporate securities. Like other equity securities, preferred stock is
subject to the risk that its value may decrease based on actual or perceived changes in the business or financial condition of the issuer.
In addition, changes in interest rates may adversely affect the value of a preferred stock that pays a fixed dividend.
Concentration Policy
For
purposes of each Fund’s concentration limitation as disclosed in this SAI, the Funds apply such policy to direct investments in
the securities of issuers in a particular industry, as determined by a Fund’s investment adviser or subadviser.
A Fund’s investment
adviser or subadviser may analyze the characteristics of a particular issuer and security and assign an industry or sector classification
consistent with those characteristics in the event that the third party classification provider used by the investment adviser or subadviser
does not assign a classification or the investment adviser or subadviser, in consultation with the Fund’s Chief Compliance Officer,
determines that another industry or sector classification is more appropriate.
Convertible Securities
The
Funds may invest in debt or preferred equity securities convertible into, or exchangeable for, common stock at a stated price or rate.
Traditionally, convertible securities have paid dividends or interest at rates higher than common stocks but lower than nonconvertible
securities. They generally participate in the appreciation or depreciation of the underlying stock into which they are convertible, but
to a lesser degree. In recent years, convertibles have been developed which combine higher or lower current income with options and
other features. Convertible securities are subject to the risks of debt and equity securities.
Cyber Security and Technology
With
the increased use of technologies such as the Internet and the dependence on computer systems to perform business and operational functions,
investment companies (such as the Funds) and their service providers (such as the Funds’ investment adviser, subadvisers, custodian,
and transfer agent) may be prone to operational and information security risks resulting from cyber-attacks and/or technological malfunctions.
In general, cyber-attacks are deliberate, but unintentional events may have similar effects. Cyber-attacks include, among others, stealing
or corrupting data maintained online or digitally, preventing legitimate users from accessing information or services on a website, releasing
confidential information without authorization, and causing operational disruption. Successful cyber-attacks against, or security breakdowns
of, a Fund, the investment adviser, subadviser, custodian, transfer agent, or service provider may adversely affect the Fund or its shareholders.
For instance, cyber-attacks may interfere with the processing of shareholder transactions, affect a Fund’s ability to calculate
its NAV, cause the release of private shareholder information or confidential Fund information, impede trading, cause reputational damage,
and subject the Fund to regulatory fines, penalties or financial losses, reimbursement or other compensation costs, and additional compliance
costs. Cyber-attacks may render records of Fund assets and transactions, shareholder ownership of Fund shares, and other data integral
to the functioning of the Fund inaccessible or inaccurate or incomplete. A Fund may also incur substantial costs for cyber security risk
management in order to prevent cyber incidents in the future. A Fund and its shareholders could be negatively impacted as a result. There
are inherent limitations in business continuity plans and systems designed to minimize the risk of cyber-attacks through the use of technology,
processes, and controls, including the possibility that certain risks have not been identified given the evolving nature of this threat.
The Funds rely on third-party service providers for many of their day-to-day operations, and will be subject to the risk that the protections
and protocols implemented by those service providers will be ineffective to protect the Funds from cyber-attack. The Funds’ investment
adviser does not control the cyber security plans and technology systems put in place by third-party service providers, and such third-party
service providers may have limited indemnification obligations to the Funds’ investment adviser or the Funds, each of whom could
be negatively impacted as a result. Similar types of cyber security risks also are present for issuers of securities in which the Funds
invest, which could result in material adverse consequences for such issuers, and may cause a Fund’s investment in such securities
to lose value.
Debtor-in-Possession Financings
The
Funds may invest in debtor-in-possession financings (commonly known as “DIP financings”) through participation interests
in direct loans, purchase of assignments, and other means. DIP financings are arranged when an entity seeks the protections of the bankruptcy
court under Chapter 11 of the U.S. Bankruptcy Code (“Chapter 11”). These financings allow the entity to continue its
business operations while reorganizing under Chapter 11. Such financings constitute senior liens on an unencumbered security (i.e., a
security not subject to other creditors’ claims). DIP financings are generally subject to the same risks as investments in senior
bank loans and similar debt instruments, but involve a greater risk of loss of principal and interest. For example, there is a risk that
the entity will not emerge from Chapter 11 and be forced to liquidate its assets under Chapter 7 of the U.S. Bankruptcy Code, as well
as a risk that the bankruptcy court will not approve a proposed reorganization plan or will require substantial and unfavorable changes
to an initial plan. In the event of liquidation, a Fund’s only recourse will be against the property securing the DIP financing.
Companies in bankruptcy may also be undergoing significant financial and operational changes that may cause their financial performance
to have elevated levels of volatility. DIP financings may involve payment-in-kind interest or principal interest payments, and a Fund
may receive securities of a reorganized issuer (e.g., common stock, preferred stock, warrants) in return for its investment, which may
include illiquid investments and investments that are difficult to value.
Derivatives
General. Derivatives
are financial instruments whose values are based on the values of one or more underlying indicators, such as a security, asset, currency,
interest rate, or index. Derivative transactions can create investment leverage and may be highly volatile. Losses from derivatives can
be substantially greater than the derivatives’ original cost and can sometimes be unlimited. A Fund may not be able to close out
a derivative transaction at a favorable time or price.
A
Fund’s use of derivative instruments involves risks different from, and possibly greater than, the risks associated with investing
directly in securities and other more traditional investments. Derivative products can be highly specialized instruments that may require
investment techniques and risk analyses different from those associated with investing directly in securities and other more traditional
investments. Derivatives are subject to a number of risks, such as potential changes in value in response to interest rate changes or
other market developments or as a result of the counterparty’s credit quality and the risk that a derivative transaction may not
have the effect or benefit a Fund’s investment adviser or subadviser anticipated. Derivatives also involve the risk of mispricing
or improper valuation and the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate,
or index. When a Fund invests in a derivative instrument, it could lose more than the principal amount invested. Also, suitable derivative
transactions may not be available in all circumstances, and there can be no assurance that a Fund will engage in these transactions to
reduce exposure to other risks when that would be beneficial. Many derivative transactions are entered into “over the counter”
(not on an exchange or contract market); as a result, the value of such a derivative transaction will depend on the ability and
the willingness of the Fund’s counterparty to perform its obligations under the transaction. A Fund may be required to segregate
certain of its assets on the books of its custodian with respect to derivatives transactions entered into by the Fund. A liquid secondary
market may not always exist for a Fund’s derivative positions at any time. Use of derivatives may affect the amount, timing, and
character of distributions to shareholders. Although the use of derivatives is intended to enhance a Fund’s performance, it may
instead reduce returns and increase volatility.
A
Fund may be subject to the credit risk of its counterparty to derivative transactions (including repurchase and reverse repurchase agreements)
and to the counterparty’s ability or willingness to perform in accordance with the terms of the transaction. A Fund may be negatively
impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations under such a transaction. A Fund may experience
significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding and a Fund may obtain only limited recovery
or may obtain no recovery in such circumstances. In the event of a counterparty’s (or its affiliate’s) insolvency, the possibility
exists that a Fund’s ability to exercise remedies, such as the termination of transactions, netting of obligations, and realization
on collateral, could be stayed or eliminated under special resolution regimes adopted in the United States, the European Union, and various
other jurisdictions. Such regimes provide government authorities with broad authority to intervene when a financial institution is experiencing
financial difficulty. In particular, the regulatory authorities could reduce, eliminate, or convert to equity the liabilities to a Fund
of a counterparty who is subject to such proceedings in the European Union (sometimes referred to as a “bail in”).
A
Fund may enter into cleared derivatives transactions and/or exchange-traded futures contracts. When a Fund enters into a cleared derivative
transaction and/or an exchange-traded futures contract, it is subject to the credit risk of the clearinghouse and the clearing member
through which it holds its position. The clearing member or the clearinghouse could also fail to perform its obligations, causing losses
to the Fund. Credit risk of market participants with respect to derivatives that are centrally cleared is concentrated in a few clearinghouses
and clearing members. Under current Commodity Futures Trading Commission (“CFTC”) regulations, a clearing member is required
to maintain customers’ assets in omnibus accounts for all of its customers segregated from the clearing member’s proprietary
assets. If, for example, a clearing member fails to segregate customer assets, is unable to satisfy a substantial deficit in a customer
account, or in the event of fraud or misappropriation of customer assets by a clearing member, clearing member customers may be subject
to risk of loss of their funds in the event of that clearing member’s bankruptcy. A Fund might not be fully protected in the event
of the bankruptcy of a Fund’s clearing member because the Fund would be limited to recovering only a pro rata share of the funds
held by the clearing member on behalf of customers. It is not entirely clear how an insolvency proceeding of a clearinghouse, or the clearing
member through which the Fund holds its positions at a clearinghouse, would be conducted, what effect the insolvency proceeding would
have on any recovery by a Fund, and what impact an insolvency of a clearinghouse or clearing member would have on the financial system
more generally.
U.S.
and non-U.S. legislative and governmental authorities, various exchanges, and regulatory and self-regulatory authorities have undertaken
reviews of derivatives trading in recent periods. Among the actions that have been taken or proposed to be taken are new position limits
and reporting requirements, new or more stringent daily price fluctuation limits for futures and options transactions, new or increased
margin and reserve requirements for various types of
derivatives
transactions, and mandatory clearing, trading, and reporting requirements for many derivatives. Additional measures are under active consideration
and as a result there may be further actions that adversely affect the regulation of instruments in which the Funds invest. Such legislative
and regulatory measures may reduce the availability of some types of derivative instruments, may increase the cost of trading in or maintaining
other instruments or positions, and may cause uncertainty in the markets for a variety of derivative instruments. It is also possible
that these or similar measures could potentially limit or completely restrict the ability of a Fund to use these instruments as a part
of its investment strategy. For example, the SEC recently finalized new Rule 18f-4 under the 1940 Act providing for the regulation of
registered investment companies’ use of derivatives and certain related instruments. Compliance with Rule 18f-4 will not be required
until approximately August 2022. The ultimate impact, if any, of the regulation remains unclear, but the new rule, among other things,
limits derivatives exposure through one of two value-at-risk tests and eliminates the asset segregation framework for covering derivatives
and certain financial instruments arising from the SEC’s Release 10666 and ensuing staff guidance. Limited derivatives users (as
determined by Rule 18f-4), however, are not subject to the full requirements under the rule. As the Funds come into compliance, the approach
to asset segregation and coverage requirements described in this SAI will be impacted. Legislative and regulatory measures like this and
others are evolving and still being implemented and their effects on derivatives market activities cannot be reliably predicted.
The
CFTC and domestic exchanges have established speculative position limits, referred to as “position limits,” on the maximum
speculative positions which any person, or group of persons acting in concert, may hold or control in particular futures and options on
futures contracts. All positions owned or controlled by the same person or entity, even if in different accounts, must be aggregated for
purposes of determining whether the applicable position limits have been exceeded. Thus, even if a Fund does not intend to exceed applicable
position limits, it is possible that different clients managed by the investment adviser or subadviser may be aggregated for this purpose.
Any modification of trading decisions or elimination of open positions that may be required to avoid exceeding such limits may adversely
affect the performance of a Fund. In addition, the CFTC recently adopted rules that, once effective, will materially expand the scope
of contracts subject to federal limits to include additional futures and options on futures and certain swaps. Such regulations may adversely
affect a Fund’s ability to hold positions in certain futures contracts and related options and swaps.
No
Fund has the obligation to enter into derivatives transactions at any time or under any circumstances. In addition, nothing in this SAI
is intended to limit in any way any purpose for which a Fund may enter into any type of derivatives transaction; a Fund may use derivatives
transactions for hedging purposes or generally for purposes of enhancing its investment return.
Foreign Currency
Exchange Transactions
A
Fund may enter into foreign currency exchange transactions for hedging purposes in order to protect against uncertainty in the level of
future foreign currency exchange rates, or for other, non-hedging purposes—for example, a Fund may take a long or short position
with respect to a foreign currency in which none of the Fund’s assets or liabilities are denominated, or where the position is
in excess of the amount of any such assets or liabilities, in order to take advantage of anticipated changes in the relative values of
those currencies. There can be no assurance that appropriate foreign currency transactions will be available for a Fund at any time or
that a Fund will enter into such transactions at any time or under any circumstances even if appropriate transactions are available to
it. A Fund may purchase or sell a foreign currency on a spot (i.e.,
cash) basis at the prevailing spot rate. A Fund may also enter into contracts to deliver in the future an amount of one currency in return
for an amount of another currency (“forward contracts”) and may purchase and sell foreign currency futures contracts. (Foreign
currency futures contracts are similar to financial futures contracts, except that they typically contemplate the delivery of foreign
currencies; see “Financial Futures Contracts,” below.) A Fund may also purchase or sell options on foreign currencies or
options on foreign currency futures contracts.
A
Fund may enter into foreign currency exchange transactions in order to hedge against a change in the values of assets or liabilities denominated
in one or more foreign currencies due to changes in currency exchange rates.
A
Fund may also enter into foreign currency transactions to adjust generally the exposure of its portfolio to various foreign currencies.
For example, a Fund with a large exposure to securities denominated in euros might want to continue to hold those securities, but to trade
its exposure to the euro to exposure to, say, the Japanese Yen. In that case, the Fund might take a short position in the euro and a long
position in the Yen. A Fund may also use foreign currency transactions to hedge the value of the Fund’s portfolio against the Fund’s
benchmark index.
The
value of any currency, including U.S. dollars and foreign currencies, may be affected by complex political and economic factors applicable
to the issuing country. In addition, the exchange rates of foreign currencies (and therefore the values of foreign currency options, forward
contracts, and futures contracts) may be affected significantly, fixed, or
supported directly or indirectly
by U.S. and foreign government actions. Government intervention may increase risks involved in purchasing or selling foreign currency
options, forward contracts, and futures contracts, since exchange rates may not be free to fluctuate in response to other market forces.
Foreign governmental restrictions or taxes could result in adverse changes in the cost of acquiring or disposing of foreign currencies.
Because
foreign currency transactions occurring in the interbank market involve substantially larger amounts than those that may be involved in
the use of foreign currency options, investors may be disadvantaged by having to deal in an odd lot market (generally consisting of transactions
of less than $1 million) for the underlying foreign currencies at prices that are less favorable than for round lots.
There
is no systematic reporting of last-sale information for foreign currencies and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely basis. Available quotation information is generally representative
of very large transactions in the interbank market and thus may not reflect relatively smaller transactions (less than $1 million)
where rates may be less favorable. The interbank market in foreign currencies is a global, around-the-clock market.
Currency
Forward and Futures Contracts. A foreign currency forward contract involves
an obligation to deliver in the future, which may be any fixed number of days from the date of the contract as agreed by the parties,
an amount of one currency in return for an amount of another currency, at an exchange rate set at the time of the contract. The contracts
are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. A
foreign currency futures contract is a standardized contract for the future delivery of a specified amount of a foreign currency at a
future date at an exchange rate set at the time of the contract. Foreign currency futures contracts traded in the United States are designed
by and traded on exchanges regulated by the CFTC, such as the Chicago Mercantile Exchange. Foreign currency futures contracts will typically
require a Fund to post both initial margin and variation margin.
Foreign
currency forward contracts differ from foreign currency futures contracts in certain respects. For example, the maturity date of a forward
contract may be any fixed number of days from the date of the contract agreed upon by the parties, rather than a predetermined date in
a given month. Forward contracts may be in any amounts agreed upon by the parties rather than predetermined amounts. Also, forward foreign
exchange contracts are traded directly between counterparties, exposing a Fund to credit risk with respect to its counterparty, whereas
foreign currency futures contracts are traded on regulated exchanges. Because foreign currency forward contracts are private transactions
between a Fund and its counterparty, any benefit of such contracts to the Fund will depend upon the willingness and ability of the counterparty
to perform its obligations. In the case of a futures contract, a Fund is subject to the credit risk of the clearinghouse and the clearing
member through which it holds its position as well as the risk that the clearing member or the clearinghouse could also fail to perform
its obligations.
At
the maturity of a forward or futures contract, a Fund will make delivery of the currency or currencies specified in the contract in return
for the other currency or currencies specified in the contract (or, if the contract is a non-deliverable or cash-settled contract, settle
the contract on a net basis) or, at or prior to maturity, enter into a closing transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts are usually effected with the currency trader who is a party to the original
forward contract. Closing transactions with respect to futures contracts are effected on a commodities exchange and a clearinghouse associated
with the exchange assumes responsibility for closing out such contracts.
Positions
in foreign currency futures contracts and related options may be closed out only on an exchange or board of trade which provides a market
in such contracts or options. Although a Fund will normally purchase or sell foreign currency futures contracts and related options only
on exchanges or boards of trade where there appears to be an active market, there is no assurance that an active market on an exchange
or board of trade will exist for any particular contract or option or at any particular time. In such event, it may not be possible to
close a futures or related option position and, in the event of adverse price movements, a Fund would continue to be required to make
daily cash payments of variation margin on its futures positions. A Fund’s ability to close out a foreign currency forward contract
will depend on the willingness of its counterparty to engage in an offsetting transaction.
Foreign Currency
Options. Options on foreign currencies operate similarly to options on securities,
and are traded primarily in the over-the-counter (“OTC”) market, although certain options on foreign currencies may be listed
on several exchanges. Although such options will be purchased or written only when an investment adviser or subadviser believes that a
liquid secondary market exists for such options, there can be no assurance that a liquid secondary market will exist for a particular
option at any specific time. Options on foreign currencies are affected by all of those factors which influence exchange rates and investments
generally.
The
value of a foreign currency option is dependent upon the value of the foreign currency and the U.S. dollar, and may have no relationship
to the investment merits of a foreign security.
Foreign
Currency Conversion. Although foreign exchange dealers do not charge a fee
for currency conversion, they do realize a profit based on the difference (the “spread”) between prices at which they buy
and sell various currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at one rate, while offering a lesser rate of
exchange should a Fund desire to resell that currency to the dealer.
Foreign
Currency Swap Agreements. A Fund may enter into currency swaps to protect
against adverse changes in exchange rates between the U.S. dollar and other currencies or as a means of making indirect investments in
foreign currencies. Currency swaps involve the individually negotiated exchange by a Fund with another party of a series of payments in
specified currencies in amounts determined pursuant to the terms of the swap agreement. (See “Swap Agreements and Options on Swap
Agreements,” below.)
Foreign
currency derivatives transactions may be highly volatile and may give rise to investment leverage.
Financial Futures
Contracts
A
Fund may enter into futures contracts, including interest rate futures contracts, securities index futures contracts, and futures contracts
on fixed income securities (collectively referred to as “financial futures contracts”).
A
Fund may use interest rate futures contracts to adjust the interest rate sensitivity (duration) of its portfolio or the credit exposure
of the portfolio. Interest rate futures contracts obligate the long or short holder to take or make delivery of a specified quantity of
a financial instrument, such as a specific fixed income security, during a specified future period at a specified price.
A
Fund may use index futures contracts to hedge against broad market risks to its portfolio or to gain broad market exposure when it holds
uninvested cash or as an inexpensive substitute for cash investments directly in securities or other assets, including commodities and
precious metals. Securities index futures contracts are contracts to buy or sell units of a securities index at a specified future
date at a price agreed upon when the contract is made and are settled in cash.
Positions
in financial futures contracts may be closed out only on an exchange or board of trade which provides a market for such futures.
There
are special risks associated with entering into financial futures contracts. The skills needed to use financial futures contracts effectively
are different from those needed to select a Fund’s investments. There may be an imperfect correlation between the price movements
of financial futures contracts and the price movements of the securities in which a Fund invests. There is also a risk that a Fund will
be unable to close a position in a financial futures contract when desired because there is no liquid market for it.
The
risk of loss in trading financial futures contracts can be substantial due to the low margin deposits required and the extremely high
degree of leverage involved in futures pricing. Relatively small price movements in a financial futures contract could have an immediate
and substantial impact, which may be favorable or unfavorable to a Fund. It is possible for a price-related loss to exceed the amount
of a Fund’s margin deposit. An investor could also suffer losses if it is unable to close out a futures contract because of an
illiquid market. Futures are subject to the creditworthiness of the clearing members (i.e., futures commission merchants) and clearing
organizations involved in the transactions.
Although
some financial futures contracts by their terms call for the actual delivery or acquisition of securities at expiration, in most cases
the contractual commitment is closed out before expiration. The offsetting of a contractual obligation is accomplished by purchasing (or
selling as the case may be) on a futures exchange an identical financial futures contract calling for delivery in the same month. Such
a transaction offsets the obligation to make or take delivery. A Fund will incur brokerage fees when it purchases or sells financial futures
contracts, and will be required to maintain margin deposits. If a liquid market does not exist when a Fund wishes to close out a financial
futures contract, it will not be able to do so and will continue to be required to make daily cash payments of variation margin in the
event of adverse price movements.
The
investment adviser has claimed with respect to each Fund an exclusion from the definition of the term “commodity pool operator”
under the Commodity Exchange Act (the “CEA”) and, therefore, is not subject to registration or regulation as a pool operator
under the CEA. For the investment adviser to be eligible to claim such an exclusion, a Fund may only use futures contracts, options on
such futures, commodity options and certain swaps solely for “bona fide hedging purposes” (as defined by the CFTC),
or must limit its use of such instruments for non-bona fide hedging purposes to certain de minimis amounts, as provided by CFTC Rule 4.5.
It is possible that that exclusion may in the future cease to be available with respect to one or more Funds. In any case where the exclusion
is unavailable with respect to a Fund, additional requirements, including CFTC and National Futures Association (“NFA”)-mandated
disclosure, reporting, and recordkeeping obligations, would apply with respect to that Fund. Compliance with the CFTC’s regulatory
requirements and NFA rules could increase Fund expenses and potentially adversely affect a Fund’s total return.
Margin
Payments. When a Fund purchases or sells a financial futures contract, it
is required to deposit with the clearing member an amount of cash, U.S. Treasury bills, or other permissible collateral equal to a small percentage
of the amount of the financial futures contract. This amount is known as “initial margin.” The nature of initial margin
is different from that of margin in security transactions in that it does not involve borrowing money to finance transactions. Rather,
initial margin is similar to a performance bond or good faith deposit that is returned to a Fund upon termination of the contract, assuming
the Fund satisfies its contractual obligations.
Subsequent
payments to and from the clearing member occur on a daily basis in a process known as “marking to market.” These payments
are called “variation margin” and are made as the value of the underlying financial futures contract fluctuates. For example,
when a Fund sells an index futures contract and the price of the underlying index rises above the delivery price, the Fund’s position
declines in value. The Fund then pays the clearing member a variation margin payment equal to the difference between the delivery price
of the index futures contract and the value of the index underlying the index futures contract. Conversely, if the price of the underlying
index falls below the delivery price of the contract, the Fund’s futures position increases in value. The clearing member then
must make a variation margin payment equal to the difference between the delivery price of the index futures contract and the value of
the index underlying the index futures contract.
When
a Fund terminates a position in a financial futures contract, a final determination of variation margin is made, additional cash is paid
by or to the Fund, and the Fund realizes a loss or a gain. Such closing transactions involve additional commission costs.
Options
on Financial Futures Contracts. A Fund may purchase and write call and put
options on financial futures contracts. An option on a financial futures contract gives the purchaser the right, in return for the premium
paid, to assume a position in a financial futures contract (a long position if the option is a call and a short position if the option
is a put) at a specified exercise price at any time during the period of the option or only at expiration of the option, depending on
the option’s terms. Upon exercise of the option, the holder would assume the underlying futures position and would receive a variation
margin payment of cash or securities approximating the increase in the value of the holder’s option position. If an option is exercised
on the last trading day prior to the expiration date of the option, the settlement will be made entirely in cash. Purchasers of options
who fail to exercise their options prior to or on the exercise date suffer a loss of the premium paid.
Options
on Swaps. Options on swaps (“swaptions”) are similar to options
on securities except that they are traded over-the-counter (i.e., not on an exchange) and the premium paid or received is to buy or grant
the right to enter into a previously agreed upon swap transaction, such as an interest rate or credit default contract. Forward premium
swaption contracts include premiums that have extended settlement dates. The delayed settlement of the premiums is factored into the daily
valuation of the swaption contracts. In the case of interest rate cap and floor contracts, in return for a premium, ongoing payments between
two parties are based on interest rates exceeding a specified rate, in the case of a cap contract, or falling below a specified rate,
in the case of a floor contract.
Special
Risks of Transactions in Financial Futures Contracts and Related Options. Financial
futures contracts entail risks. The risks associated with purchasing and writing put and call options on financial futures contracts can
be influenced by the market for financial futures contracts. An increase in the market value of a financial futures contract on which
the Fund has written an option may cause the option to be exercised. In this situation, the benefit to a Fund would be limited to the
value of the exercise price of the option and the Fund may realize a loss on the option greater than the premium the Fund initially received
for writing the option. In addition, a Fund’s ability to close out an option it has written by entering into an offsetting transaction
depends upon the market’s demand for such financial futures contracts. If a purchased option expires unexercised, a Fund would
realize a loss in the amount of the premium paid for the option.
If
an investment adviser’s or subadviser’s judgment about the general direction of interest rates or markets is wrong, the
overall performance may be poorer than if no financial futures contracts had been entered into.
Liquidity Risks. Positions
in financial futures contracts may be closed out only on the exchange on which such contract is listed. Although the Funds intend to purchase
or sell financial futures contracts for which there appears to be an active market, there is no assurance that a liquid market will exist
for any particular contract or at any particular time. If there is not a liquid market at a particular time, it may not be possible to
close a position in a financial futures contract at such time and, in the event of adverse price movements, a Fund would continue to be
required to make daily cash payments of variation margin.
The
ability to establish and close out positions in options on financial futures contracts will be subject to the development and maintenance
of a liquid market. It is not certain that such a market will develop. Although a Fund generally will purchase only those options for
which there appears to be an active market, there is no assurance that a liquid market on an exchange will exist for any particular option
or at any particular time. In the event no such market exists for particular options, it might not be possible to effect closing transactions
in such options, with the result that a Fund would have to exercise the options in order to realize any profit.
Hedging
Risks. There are several risks in connection with the use by a Fund of financial
futures contracts and related options as a hedging device. One risk arises because of the imperfect correlation between movements in the
prices of the financial futures contracts and options and movements in the underlying securities or index or movements in the prices of
a Fund’s securities which are the subject of a hedge.
Successful
use of financial futures contracts and options by a Fund for hedging purposes is also subject to an investment adviser’s or subadviser’s
ability to predict correctly movements in the direction of the market. It is possible that, where a Fund has purchased puts on financial
futures contracts to hedge its portfolio against a decline in the market, the securities or index on which the puts are purchased may
increase in value and the value of securities held in the portfolio may decline. If this occurred, the Fund would lose money on the puts
and also experience a decline in the value of its portfolio securities. In addition, the prices of financial futures contracts, for a
number of reasons, may not correlate perfectly with movements in the underlying securities or index due to certain market distortions.
First, all participants in the futures market are subject to margin deposit requirements. Such requirements may cause investors to close
financial futures contracts through offsetting transactions which could distort the normal relationship between the underlying security
or index and futures markets. Second, the margin requirements in the futures markets are less onerous than margin requirements in the
securities markets in general, and as a result the futures markets may attract more speculators than the securities markets do. Increased
participation by speculators in the futures markets may also cause temporary price distortions. Due to the possibility of price distortion,
even a correct forecast of general market trends by an investment adviser or subadviser still may not result in a successful hedging transaction
over a very short time period.
Other
Risks. A Fund will incur brokerage fees in connection with its transactions
in financial futures contracts and related options. In addition, while financial futures contracts and options on financial futures contracts
will be purchased and sold to reduce certain risks, those transactions themselves entail certain other risks. Thus, while a Fund may benefit
from the use of financial futures contracts and related options, unanticipated changes in interest rates or stock price movements may
result in a poorer overall performance for the Fund than if it had not entered into any financial futures contracts or options transactions.
Moreover, in the event of an imperfect correlation between the position in the financial futures contract and the portfolio position that
is intended to be protected, the desired protection may not be obtained and the Fund may be exposed to risk of loss.
Swap Agreements and
Options on Swap Agreements
A
Fund may engage in swap transactions, including interest rate swap agreements, credit default swaps, and total return swaps.
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 or rates, 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 or in a
“basket” of securities representing a particular index). When a Fund enters into an interest rate swap, it typically agrees
to make payments to its counterparty based on a specified long- or short-term interest rate, and will receive payments from its counterparty
based on another interest rate. Other forms of swap agreements include, among others, interest rate caps, under which, in return for a
specified payment stream, 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 specified payment stream, one party agrees to make payments to
the other to the extent that interest rates fall below a specified rate, or “floor”; 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; and curve cap swaps, under which a party might buy or sell
protection against an increase in long-term interest rates relative to shorter-term rates. A Fund may enter into an interest rate swap
in order, for example, to hedge against the effect of interest rate changes on the value of specific securities in its portfolio, or to
adjust the interest rate sensitivity (duration) or the credit exposure of its portfolio overall, or otherwise as a substitute for a direct
investment in debt securities.
A
Fund may enter into total return swaps. In a total return swap, one party typically agrees to pay to the other a short-term interest rate
in return for a payment at one or more times in the future based on the increase in the value of an underlying security or other asset,
or index of securities or assets; if the underlying security, asset, or index declines in value, the party that pays the short-term interest
rate must also pay to its counterparty a payment based on the amount of the decline. A Fund may take either side of such a swap, and so
may take a long or short position in the underlying security, asset, or index. A Fund may enter into a total return swap to hedge against
an exposure in its portfolio (including to adjust the duration or credit quality of a Fund’s bond portfolio) or generally to put
cash to work efficiently in the markets in anticipation of, or as a replacement for, cash investments. A Fund may also enter into a total
return swap to gain exposure to securities or markets in which it might not be able to invest directly (in so-called market access transactions).
A Fund may also enter into contracts for difference, which are similar to total return swaps.
A
Fund also may enter into credit default swap transactions. In a credit default swap, one party provides what is in effect insurance against
a default or other adverse credit event affecting an issuer of debt securities (typically referred to as a “reference entity”).
In general, the protection “buyer” in a credit default swap is obligated to pay the protection “seller” an
upfront amount or a periodic stream of payments over the term of the swap. If a “credit event” occurs, the buyer has the
right to deliver to the seller bonds or other obligations of the reference entity (with a value up to the full notional value of the swap),
and to receive a payment equal to the par value of the bonds or other obligations. Credit events that would trigger a request that the
seller make payment are specific to each credit default swap agreement, but generally include bankruptcy, failure to pay, restructuring,
obligation acceleration, obligation default, or repudiation/moratorium. A Fund may be either the buyer or seller in a credit default swap
transaction. When a Fund buys protection, it may or may not own securities of the reference entity. If it does own securities of the reference
entity, the swap serves as a hedge against a decline in the value of the securities due to the occurrence of a credit event involving
the issuer of the securities. If the Fund does not own securities of the reference entity, the credit default swap may be seen to create
a short position in the reference entity. If a Fund is a buyer and no credit event occurs, the Fund will typically recover nothing under
the swap, but will have had to pay the required upfront payment and stream of continuing payments under the swap. When a Fund sells protection
under a credit default swap, the position may have the effect of creating leverage in the Fund’s portfolio through the Fund’s
indirect long exposure to the issuer or securities on which the swap is written. When a Fund sells protection, it may do so either to
earn additional income or to create such a “synthetic” long position. Credit default swaps involve general market risks,
illiquidity risk, counterparty risk, and credit risk.
A
Fund may also enter into options on swap agreements (“swaptions”). A swaption is a contract that gives a counterparty the
right (but not the obligation) 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. A Fund may write (sell) and purchase put and call swaptions. Depending on
the terms of the particular option agreement, a Fund will generally incur a greater degree of risk when it writes a swaption than it will
incur when it purchases a swaption. When a Fund purchases a swaption, 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 swaption, upon exercise of the option the Fund will become
obligated according to the terms of the underlying agreement. A Fund may enter into swaptions for the same purposes as swaps.
Whether
a Fund’s use of swap agreements or swaptions will be successful will depend on the investment adviser’s or subadviser’s
ability to predict correctly whether certain types of investments are likely to produce greater returns than other investments. 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. Certain restrictions imposed on the Funds by the Code may limit the Funds’ ability to use swap agreements.
Swaps
are highly specialized instruments that require investment techniques, risk analyses, and tax planning different from those associated
with traditional investments. The use of a swap requires an understanding not only of the referenced asset, reference rate, or index but
also of the swap itself, without the benefit of observing the performance of the swap under all possible market conditions. Because they
are two party contracts that may be subject to contractual restrictions on transferability and termination and because they may have terms
of greater than seven days, swap agreements may be considered to be illiquid and subject to a Fund’s limitation on investments
in illiquid securities. To the extent that a swap is not liquid, it may not be possible to initiate a transaction or liquidate a position
at an advantageous time or price, which may result in significant losses.
Like most
other investments, swap agreements are subject to the risk that the market value of the instrument will change in a way detrimental to
a Fund’s interest. A Fund bears the risk that an investment adviser or subadviser will not accurately forecast future market trends
or the values of assets, reference rates, indexes, or other economic factors in establishing swap positions for the Fund. If an investment
adviser or subadviser attempts to use a swap as a hedge against, or as a substitute for, a portfolio investment, the Fund will be exposed
to the risk that the swap will have or will develop imperfect or no correlation with the portfolio investment. This could cause substantial
losses for the Fund. While hedging strategies involving swap instruments can reduce the risk of loss, they can also reduce the opportunity
for gain or even result in losses by offsetting favorable price movements in other Fund investments. Many swaps are complex and often
valued subjectively.
When
a Fund enters into swap agreements, it is subject to the credit risk of its counterparty and to the counterparty’s ability or willingness
to perform in accordance with the terms of the agreement. A Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise
fails to perform its obligations under a swap agreement. A Fund may experience significant delays in obtaining any recovery in a bankruptcy
or other reorganization proceeding and a Fund may obtain only limited recovery or may obtain no recovery in such circumstances.
Options, Rights,
and Warrants
A
Fund may purchase and sell put and call options on securities to enhance investment performance or to protect against changes in market
prices. A Fund that invests in debt securities may also purchase and sell put and call options to adjust the interest rate sensitivity
of its portfolio or the credit exposure of the portfolio.
Call
Options. A Fund may write call options on portfolio securities to realize
a greater current return through the receipt of premiums. Such option transactions may also be used as a limited form of hedging against
a decline in the price of securities owned by the Fund.
A
call option gives the holder the right to purchase, and obligates the writer to sell, a security at the exercise price at any time before
the expiration date in the case of an American-style option or only on the expiration date in the case of a European-style option. A Fund
may write covered call options or uncovered call options. A call option is “covered” if the writer, at all times while obligated
as a writer, either owns the underlying securities (or comparable securities satisfying the cover requirements of the securities exchanges),
or has the right to acquire such securities through immediate conversion of securities. When a Fund has written an uncovered call option,
the Fund will not necessarily hold securities offsetting the risk to the Fund. As a result, if the call option were exercised, the Fund
might be required to purchase the security that is the subject of the call at the market price at the time of exercise. The Fund’s
exposure on such an option is theoretically unlimited. There is also a risk, especially with less liquid preferred and debt securities,
that the security may not be available for purchase.
A
Fund will receive a premium from writing a call option, which increases the Fund’s return in the event the option expires unexercised
or is closed out at a profit. The amount of the premium reflects, among other things, the relationship between the exercise price and
the current market value of the underlying security, the volatility of the underlying security, the amount of time remaining until expiration,
current interest rates, and the effect of supply and demand in the options market and in the market for the underlying security.
In
return for the premium received when it writes a covered call option, a Fund takes the risk during the life of the option that it will
be required to deliver the underlying security at a price below the current market value of the security or, in the case of a covered
call option, to give up some or all of the opportunity to profit from an increase in the market price of the securities covering the call
option.
In
the case of a covered option, the Fund also retains the risk of loss should the price of the securities decline. If the covered option
expires unexercised, the Fund realizes a gain equal to the premium, which may be offset by a decline in price of the underlying security.
If the option is exercised, the Fund realizes a gain or loss equal to the difference between the Fund’s cost for the underlying
security and the proceeds of sale (exercise price minus commissions) plus the amount of the premium.
A
Fund may enter into closing purchase transactions in order to realize a profit or limit a loss on a previously written call option or,
in the case of a covered call option, to free itself to sell the underlying security or to write another call on the security, or protect
a security from being called in an unexpected market rise. Any profits from a closing purchase transaction in the case of a covered call
option may be offset by a decline in the value of the underlying security. Conversely, because increases in the market price of a call
option will generally reflect increases in the market price of the underlying security, any loss resulting from a closing purchase transaction
relating to a covered call option is likely to be offset in whole or in part by unrealized appreciation of the underlying security owned
by the Fund.
Put Options. A
Fund may write put options in order to enhance its current return by taking a long directional position as to a security or index of securities.
Such options transactions may also be used as a limited form of hedging against an increase in the price of securities that the Fund plans
to purchase. A put option gives the holder the right to sell, and obligates the writer to buy, a security at the exercise price. A Fund
may write covered or uncovered put options. A put option is “covered” if the writer segregates cash and high-grade short-term
debt obligations or other permissible collateral equal to the price to be paid if the option is exercised.
By
writing a put option, the Fund assumes the risk that it may be required to purchase the underlying security for an exercise price higher
than its then current market value, resulting in a potential capital loss unless the security later appreciates in value. A Fund may terminate
a put option that it has written before it expires by entering into a closing purchase transaction. Any loss from this transaction may
be partially or entirely offset by the premium received on the terminated option.
Purchasing
Put and Call Options. A Fund may also purchase put options to protect portfolio
holdings against a decline in market value. This protection lasts for the life of the put option because the Fund, as a holder of the
option, may sell the underlying security at the exercise price regardless of any decline in its market price. A Fund may also purchase
a put option hoping to profit from an anticipated decline in the value of the underlying security. In order for a put option to be profitable,
the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs
that the Fund must pay. If the Fund holds the security underlying the option, these costs will reduce any profit the Fund might have realized
had it sold the underlying security instead of buying the put option.
A
Fund may purchase call options to hedge against an increase in the price of securities that the Fund wants ultimately to buy. Such hedge
protection is provided during the life of the call option since the Fund, as holder of the call option, is able to buy the underlying
security at the exercise price regardless of any increase in the underlying security’s market price. A Fund may also purchase a
call option as a long directional investment hoping to profit from an anticipated increase in the value of the underlying security. In
order for a call option to be profitable, the market price of the underlying security must rise sufficiently above the exercise price
to cover the premium and transaction costs. These costs will reduce any profit the Fund might have realized had it bought the underlying
security at the time it purchased the call option.
A
Fund may also buy and sell combinations of put and call options on the same underlying security to earn additional income.
A
Fund may purchase or sell “structured options,” which may comprise multiple option exposures within a single security. The
risk and return characteristics of a structured option will vary depending on the nature of the underlying option exposures. The Fund
may use such options for hedging purposes or as a substitute for direct investments in options or securities. The Fund’s use of
structured options may create investment leverage.
Options
on Foreign Securities. A Fund may purchase and sell options on foreign securities
if an investment adviser or subadviser believes that the investment characteristics of such options, including the risks of investing
in such options, are consistent with the Fund’s investment objective. It is expected that risks related to such options will not
differ materially from risks related to options on U.S. securities. However, position limits and other rules of foreign exchanges may
differ from those in the United States. In addition, options markets in some countries, many of which are relatively new, may be less
liquid than comparable markets in the United States.
Options
on Securities Indexes. A Fund may write or purchase options on securities
indexes, subject to its general investment restrictions regarding options transactions. Index options are similar to options on individual
securities in that the purchaser of an index option acquires the right to buy (in the case of a call) or sell (in the case of a put),
and the writer undertakes the obligation to sell or buy (as the case may be), units of an index at a stated exercise price during the
term of the option. Instead of giving the right to take or make actual delivery of securities, the holder of an index option has the right
to receive a cash “exercise settlement amount.” This amount is equal to the amount by which the fixed exercise price of
the option exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the date
of the exercise, multiplied by a fixed “index multiplier.” If the Fund has written an index call option, it will lose money
if the index level rises above the option exercise price (plus the amount of the premium received by the Fund on the option). If the Fund
has written an index put option, it will lose money if the index level falls below the option exercise price (less the amount of the premium
received by the Fund).
In
cases where a Fund uses index options for hedging purposes, price movements in securities which a Fund owns or intends to purchase probably
will not correlate perfectly with movements in the level of a securities index and, therefore, a Fund bears the risk of a loss on a securities
index option which is not completely offset by movements in the price of such securities. Because securities index options are settled
in cash, a call writer cannot determine the amount of its settlement
obligations in advance and,
unlike call writing on a specific security, cannot provide in advance for, or cover, its potential settlement obligations by acquiring
and holding underlying securities. A Fund may, however, cover call options written on a securities index by holding a mix of securities
which substantially replicate the movement of the index or by holding a call option on the securities index with an exercise price no
higher than the call option sold.
A
Fund may purchase or sell options on stock indexes in order to close out its outstanding positions in options on stock indexes which it
has purchased. A Fund may also allow such options to expire unexercised.
Risks
Involved in the Sale of Options. The successful use of a Fund’s options
strategies depends on the ability of an investment adviser or subadviser to forecast correctly interest rate and market movements. For
example, if a Fund were to write a covered call option based on an investment adviser’s or subadviser’s expectation that
the price of the underlying security would fall, but the price were to rise instead, the Fund could be required to sell the security upon
exercise at a price below the current market price. Similarly, if a Fund were to write a put option based on an investment adviser’s
or subadviser’s expectation that the price of the underlying security would rise, but the price were to fall instead, the Fund
could be required to purchase the security upon exercise at a price higher than the current market price.
When
a Fund purchases an option, it runs the risk that it will lose its entire investment in the option in a relatively short period of time,
unless the Fund exercises the option or enters into a closing sale transaction before the option’s expiration. If the price of
the underlying security does not rise (in the case of a call) or fall (in the case of a put) to an extent sufficient to cover the option
premium and transaction costs, the Fund will lose part or all of its investment in the option. This contrasts with an investment by a
Fund in the underlying security, since the Fund will not realize a loss if the security’s price does not change.
The
effective use of options also depends on a Fund’s ability to terminate option positions at times when an investment adviser or
subadviser deems it desirable to do so. There is no assurance that a Fund will be able to effect closing transactions at any particular
time or at an acceptable price.
If
a secondary market in options were to become unavailable, a Fund could no longer engage in closing transactions. Lack of investor interest
might adversely affect the liquidity of the market for particular options or series of options. A market may discontinue trading of a
particular option or options generally. In addition, a market could become temporarily unavailable if unusual events—such as volume
in excess of trading or clearing capability—were to interrupt its normal operations.
A
market may at times find it necessary to impose restrictions on particular types of options transactions, such as opening transactions.
If an underlying security ceases to meet qualifications imposed by the market or the Options Clearing Corporation, new series of options
on that security will no longer be opened to replace expiring series, and opening transactions in existing series may be prohibited. If
an options market were to become unavailable, a Fund as a holder of an option would be able to realize profits or limit losses only by
exercising the option, and the Fund, as option writer, would remain obligated under the option until expiration or exercise.
Disruptions
in the markets for the securities underlying options purchased or sold by a Fund could result in losses on the options. If trading is
interrupted in an underlying security, the trading of options on that security is normally halted as well. As a result, a Fund as purchaser
or writer of an option will be unable to close out its positions until options trading resumes, and it may be faced with considerable
losses if trading in the security reopens at a substantially different price. In addition, the Options Clearing Corporation or other options
markets may impose exercise restrictions. If a prohibition on exercise is imposed at the time when trading in the option has also been
halted, a Fund as purchaser or writer of an option will be locked into its position until one of the two restrictions has been lifted.
If the Options Clearing Corporation were to determine that the available supply of an underlying security appears insufficient to permit
delivery by the writers of all outstanding calls in the event of exercise, it may prohibit indefinitely the exercise of put options. A
Fund, as holder of such a put option, could lose its entire investment if the prohibition remained in effect until the put option’s
expiration.
Foreign-traded
options are subject to many of the same risks presented by internationally-traded securities. In addition, because of time differences
between the United States and various foreign countries, and because different holidays are observed in different countries, foreign options
markets may be open for trading during hours or on days when U.S. markets are closed. As a result, option premiums may not reflect the
current prices of the underlying interest in the United States.
Exchanges
have established limits on the maximum number of options an investor or group of investors acting in concert may write. The Funds, an
investment adviser or subadviser, and other clients of the investment adviser or subadviser may constitute such a group. These limits
restrict a Fund’s ability to purchase or sell particular options.
Over-the-Counter
Options. A Fund may purchase or sell OTC options. OTC options are not traded
on securities or options exchanges or backed by clearinghouses. Rather, they are entered into directly between a Fund and the counterparty
to the option. In the case of an OTC option purchased by the Fund, the value of the option to the Fund will depend on the willingness
and ability of the option writer to perform its obligations to the Fund. In addition, OTC options may not be transferable and there may
be little or no secondary market for them, so they may be considered illiquid. It may not be possible to enter into closing transactions
with respect to OTC options or otherwise to terminate such options, and as a result a Fund may be required to remain obligated on an unfavorable
OTC option until its expiration. It may be difficult under certain circumstances to value OTC options.
Rights
and Warrants to Purchase Securities; Index Warrants; International. A Fund
may invest in rights and warrants to purchase securities. Rights or warrants generally give the holder the right to receive, upon exercise,
a security at a stated price. Funds typically use rights and warrants in a manner similar to their use of options on securities, as described
above. Risks associated with the use of rights or warrants are generally similar to risks associated with the use of options. Rights and
warrants typically do not carry with them dividend or voting rights with respect to the underlying securities, or any rights in the assets
of the issuer. In addition, the value of a right or a warrant will likely, but will not necessarily, change with the value of the underlying
securities, and a right or a warrant ceases to have value if it is not exercised prior to its expiration date.
Bonds
issued with warrants attached to purchase equity securities have many characteristics of convertible bonds and their prices may, to some
degree, reflect the performance of the underlying stock. Bonds also may be issued with warrants attached to purchase additional fixed
income securities.
A
Fund may also invest in equity-linked warrants. A Fund purchases equity-linked warrants from a broker, who in turn is expected to purchase
shares in the local market. If the Fund exercises its warrant, the shares are expected to be sold and the warrant redeemed with the proceeds.
Typically, each warrant represents one share of the underlying stock. Therefore, the price and performance of the warrant are directly
linked to the underlying stock, less transaction costs. In addition to the market risk related to the underlying holdings, a Fund bears
counterparty risk with respect to the issuing broker. There is currently no active trading market for equity-linked warrants, and they
may be highly illiquid.
In
addition to warrants on securities, a Fund may purchase put warrants and call warrants whose values vary depending on the change in the
value of one or more specified securities indexes (“index-linked warrants”). Index-linked 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-linked 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 any time when, in the case of a call warrant, the exercise price is greater 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-linked warrant prior to its expiration, then the Fund would lose the amount of the purchase price paid by
it for the warrant.
A
Fund using index-linked warrants would normally do so in a manner similar to its use of options on securities indexes. The risks of a
Fund’s use of index-linked warrants are generally similar to those relating to its use of index options. Unlike most index options,
however, index-linked warrants are issued in limited amounts and are not obligations of a regulated clearing agency, but are backed only
by the credit of the bank or other institution that issues the warrant. Also, index-linked warrants may have longer terms than index options.
Index-linked warrants are not likely to be as liquid as certain index options backed by a recognized clearing agency. In addition, the
terms of index-linked warrants may limit a Fund’s ability to exercise the warrants at such time, or in such quantities, as the
Fund would otherwise wish to do.
A
Fund may make indirect investments in foreign equity securities, through international warrants, participation notes, low exercise price
warrants, or other products that allow the Fund to access investments in foreign markets that would otherwise be unavailable to them.
International warrants are financial instruments issued by banks or other financial institutions, which may or may not be traded on a
foreign exchange. International warrants are a form of derivative security that may give holders the right to buy or sell an underlying
security or a basket of securities from or to the issuer for a particular price or may entitle holders to receive a cash payment relating
to the value of the underlying security or basket of securities. International warrants are similar to options in that they are exercisable
by the holder for an underlying security or securities or the value of the security or securities, but are generally exercisable over
a longer term than typical options.
These types of instruments
may be American style exercise, which means that they can be exercised at any time on or before the expiration date of the international
warrant, or European style exercise, which means that they may be exercised only on the expiration date. International warrants have an
exercise price, which is typically fixed when the warrants are issued.
A
Fund may invest in low exercise price warrants, which are warrants with an exercise price that is very low relative to the market price
of the underlying instrument at the time of issue (e.g.,
one cent or less). The buyer of a low exercise price warrant effectively pays the full value of the underlying common stock at the outset.
In the case of any exercise of warrants, there may be a time delay between the time a holder of warrants gives instructions to exercise
and the time the price of the common stock relating to exercise or the settlement date is determined, during which time the price of the
underlying security could change significantly. These warrants entail substantial credit risk, since the issuer of the warrant holds the
purchase price of the warrant (approximately equal to the value of the underlying investment at the time of the warrant’s issue)
for the life of the warrant.
The
exercise or settlement date of the warrants and other instruments described above may be affected by certain market disruption events,
such as difficulties relating to the exchange of a local currency into U.S. dollars, the imposition of capital controls by a local
jurisdiction or changes in the laws relating to foreign investments. These events could lead to a change in the exercise date or settlement
currency of the instruments, or postponement of the settlement date. In some cases, if the market disruption events continue for a certain
period of time, the warrants may become worthless, resulting in a total loss of the purchase price of the warrants.
A
participation note or “P-note” is typically a debt instrument issued by a bank or broker-dealer, where the amount of the
bank’s or broker-dealer’s repayment obligation is tied to changes in the value of an underlying security or index of securities.
A P-note is a general unsecured contractual obligation of the bank or broker-dealer that issues it. A Fund must rely on the creditworthiness
of the issuer for repayment of the P-note and for any return on the Fund’s investment in the P-note and would have no rights against
the issuer of the underlying security.
There
is no assurance that there will be a secondary trading market for any of the instruments described above. They may by their terms be non-transferable
or otherwise be highly illiquid and difficult to price. Issuers of such instruments or the calculation agent named in respect of such
an instrument may have broad authority and discretion to adjust the instrument’s terms in response to certain events or to interpret
an instrument’s terms or to make certain determinations relating to the instrument, which could have a significant adverse effect
on the value of the instrument to a Fund. If the issuer or other obligor on an instrument is unable or unwilling to perform its obligations
under such an instrument, a Fund may lose some or all of its investment in the instrument and any unrealized return on that investment.
Certain of these instruments may be subject to foreign investment risk and currency risk.
Equity-Linked Notes
An
equity-linked note (ELN) is a debt instrument whose value changes based on changes in the value of a single equity security, basket of
equity securities, or an index of equity securities. An equity-linked note may or may not pay interest. See “Hybrid Instruments,”
below.
Hybrid Instruments
Hybrid
instruments are generally considered derivatives and include indexed or structured securities, and combine elements of many derivatives
transactions with those of debt, preferred equity, or a depositary instrument. A Fund may use a hybrid instrument as a substitute for
any type of cash or derivative investment which it might make for any purpose.
A
hybrid instrument may be a debt security, preferred stock, warrant, convertible security, certificate of deposit, or other evidence of
indebtedness on which a portion of or all interest payments, and/or the principal or stated amount payable at maturity, redemption or
retirement, is determined by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles,
goods, articles, or commodities (collectively, “underlying assets”), or by another index, economic factor, or other measure,
including interest rates, currency exchange rates, or commodities or securities indexes (collectively, “benchmarks”). Hybrid
instruments may take a number of forms, including, for example, debt instruments with interest or principal payments or redemption terms
determined by reference to the value of an index, security, or other measure at a future time, preferred stock with dividend rates determined
by reference to the value of a currency, or convertible securities where the conversion terms relate to a particular commodity.
The
risks of investing in a hybrid instrument may, depending on the nature of the instrument, reflect a combination of the risks of investing
in securities, options, futures, currencies, or other types of investments. An investment in a hybrid
instrument as a debt instrument
may entail significant risks that are not associated with a similar investment in a traditional debt instrument. The risks of a particular
hybrid instrument will depend upon the terms of the instrument, but may include the possibility of significant changes in the level of
the benchmark(s) or the prices of the underlying assets to which the instrument is linked. Such risks generally depend upon factors unrelated
to the operations or credit quality of the issuer of the hybrid instrument, and may not be foreseen by the purchaser, such as financial
or market developments, economic and political events, the supply and demand of the underlying assets, and interest rate movements. Hybrid
instruments may be highly volatile and their use by a Fund may not be successful.
Hybrid
instruments are potentially more volatile and carry greater market risks than traditional debt instruments. Hybrid instruments may be
highly leveraged. Depending on the structure of the particular hybrid instrument, changes in a benchmark may be magnified by the terms
of the hybrid instrument and have an even more dramatic and substantial effect upon the value of the hybrid instrument. Also, the prices
of the hybrid instrument and the benchmark or underlying asset may not move in the same direction or at the same time.
Hybrid
instruments may also carry liquidity risk since they typically trade OTC, and are not backed by a central clearing organization. The instruments
are often “customized” to meet the portfolio needs of a particular investor, and therefore, the number of investors that
are willing and able to buy such instruments in the secondary market may be smaller than that for more traditional debt securities. Under
certain conditions, the value of such an investment could be zero. In addition, because the purchase and sale of hybrid investments would
likely take place in an OTC market without the backing of a central clearing organization, or in a transaction between a Fund and the
issuer of the hybrid instrument, the instruments will not likely be actively traded. Hybrid instruments also may not be subject to regulation
by the CFTC, the SEC, or any other governmental regulatory authority.
When
a Fund invests in a hybrid instrument, it also takes on the credit risk of the issuer of the hybrid instrument. In that respect, a hybrid
instrument may create greater risks than investments directly in the securities or other assets underlying the hybrid instrument because
the Fund is exposed both to losses on those securities or other assets and to the credit risk of the issuer of the hybrid instrument.
A hybrid instrument may also pose greater risks than other derivatives based on the same securities or assets because, when it purchases
the instrument, a Fund may be required to pay all, or most, of the notional amount of the investment by way of purchase price, whereas
many other derivatives require a Fund to post only a relatively small portion of the notional amount by way of margin or similar arrangements.
Structured Investments
A
structured investment is typically issued by a specially created corporation or trust that purchases one or more securities or other assets
(“underlying instruments”), and that in turn issues one or more classes of securities (“structured securities”)
backed by, or representing different interests in, the underlying instruments. The cash flow on the underlying instruments may be apportioned
among the newly issued structured securities to create securities with different investment characteristics, such as varying maturities,
payment priorities, and interest rate provisions, and the extent of such payments made with respect to structured securities is dependent
on the extent of the cash flow on the underlying instruments. Because structured securities typically involve no credit enhancement, their
credit risk generally will reflect that of the underlying instruments. Investments in a structured security may be subordinated to the
right of payment of another class of securities. Subordinated structured securities typically have higher yields and present greater risks
than unsubordinated structured securities. Structured securities are typically sold in private placement transactions, and there currently
is no active trading market for structured securities, and they may be highly illiquid and difficult to value. Because the purchase and
sale of structured securities would likely take place in an OTC market without the backing of a central clearing organization, or in a
transaction between a Fund and the issuer of the structured securities, the creditworthiness of the counterparty of the issuer of the
structured securities would be an additional risk factor the Fund would have to consider and monitor.
Commodity-Linked
“Structured” Securities. Certain structured products may provide
exposure to the commodities markets. Commodity-linked structured securities may be equity or debt securities, may be leveraged or unleveraged,
and may present investment characteristics and risks of an investment in a security and one or more underlying commodities. Certain restrictions
imposed on the Funds by the Code may limit the Funds’ ability to invest in certain commodity-linked structured securities.
Credit-Linked
Securities. Credit-linked securities are typically issued by a limited purpose
trust or other vehicle that, in turn, invests in a basket of derivative instruments, such as credit default swaps, interest rate swaps,
and other securities or transactions, in order to provide exposure to certain high yield or other fixed income issuers or markets. For
example, a Fund may invest in credit-linked securities in order to gain exposure to the high yield markets pending investment of cash
and/or to remain fully invested when more traditional income producing securities are not available. A Fund’s return on its investments
in credit-linked securities will depend on the investment performance of the investments held in the trust or other vehicle. A Fund’s
investments in these instruments are indirectly subject to the risks associated with the derivative instruments in which the trust or
other vehicle invests, including, among others, credit risk, default, or similar event risk, counterparty risk, interest rate risk, leverage
risk, and management risk. There will likely be no established trading market for credit-linked securities and they may be illiquid.
Event-Linked
Securities. Event-linked securities are typically fixed income securities
for which the return of principal and payment of interest is contingent on the non-occurrence of a trigger event, such as a hurricane,
earthquake, or other event that leads to physical or economic loss. If the trigger event occurs prior to maturity, a Fund may lose all
or a portion of its principal and unpaid interest. Event-linked securities may expose a Fund to certain other risks, including issuer
default, adverse regulatory or jurisdictional interpretations, liquidity risk, and adverse tax consequences.
Structured
Hybrid Instruments. Because the performance of structured hybrid instruments
is linked to the performance of an underlying commodity, commodity index, or other economic variable, those investments are subject to
“market risks” with respect to the movements of the commodity markets and may be subject to certain other risks that do
not affect traditional equity and debt securities. If the interest payment on a hybrid instrument is linked to the value of a particular
commodity, commodity index, or other economic variable and the underlying investment loses value, the purchaser might not receive the
anticipated interest on its investment. If the amount of principal to be repaid on a structured hybrid instrument is linked to the value
of a particular commodity, commodity index, or other economic variable, the purchaser might not receive all or any of the principal at
maturity of the investment.
The
values of structured hybrid instruments may fluctuate significantly because the values of the underlying investments to which they are
linked are themselves extremely volatile, and the Fund may lose most or all of the value of its investment in a hybrid instrument. Additionally,
the particular terms of a structured hybrid instrument may create economic leverage by contemplating payments that are based on a multiple
of the price increase or decrease of the underlying commodity, commodity index, or other economic variable. A liquid secondary market
may not exist for structured hybrid instruments, which may make it difficult to sell such instruments at an acceptable price or to value
them accurately.
A
Fund’s investment in structured products may be subject to limits under applicable law.
When-Issued, Delayed-Delivery,
To-Be-Announced, Forward Commitment, and Standby Commitment Transactions
A
Fund may enter into when-issued, delayed-delivery, to-be-announced (“TBA”), or forward commitment transactions in order
to lock in the purchase price of the underlying security or in order to adjust the interest rate exposure of the Fund’s existing
portfolio. In when-issued, delayed-delivery, or forward commitment transactions, a Fund commits to purchase or sell particular securities,
with payment and delivery to take place at a future date. In the case of TBA purchase commitments, the unit price and the estimated principal
amount are established when the Fund enters into a commitment, with the actual principal amount being within a specified range of the
estimate. Although a Fund does not typically pay for the securities in these types of transactions until they are delivered, it immediately
assumes the risks of ownership, including the risk of price fluctuation. As a result, each of these types of transactions may create investment
leverage in a Fund’s portfolio and increase the volatility of the Fund. If a Fund’s counterparty fails to deliver a security
purchased on a when-issued, delayed-delivery, TBA, or forward commitment basis, there may be a loss, and the Fund may have missed an opportunity
to make an alternative investment.
A
Fund may also enter into standby commitment agreements, obligating the Fund, for a specified period, to buy a specified amount of a security
at the option of the issuer, upon the issuance of the security. The price at which the Fund would purchase the security is set at the
time of the agreement. In return for its promise to purchase the security, a Fund receives a commitment fee. The Fund receives this fee
whether or not it is ultimately required to purchase the security. The securities subject to a standby commitment will not necessarily
be issued, and, if they are issued, the value of the securities on the date of issuance may be significantly less than the price at which
the Fund is required to purchase them.
Recently
finalized Financial Industry Regulatory Authority (“FINRA”) rules include mandatory margin requirements for the TBA market
with limited exceptions. TBA trades historically have not been required to be collateralized. The
collateralization
of TBA trades is intended to mitigate counterparty credit risk between trade and settlement, but could increase the cost of TBA transactions
and impose added operational complexity. As of the date of this SAI, it is expected these FINRA rules will be implemented in the near
future but it is not clear the full impact the rules will have on the Funds.
Distressed Securities
A
Fund may invest in securities, including loans purchased in the secondary market, that are the subject of bankruptcy proceedings or otherwise
in default or in risk of being in default as to the repayment of principal and/or interest at the time of acquisition by the Fund or that
are rated in the lower rating categories by one or more nationally recognized statistical rating organizations (for example, Ca or lower
by Moody’s and CC or lower by S&P or Fitch Ratings, Inc. (“Fitch”)) or, if unrated, are in the judgment of the
investment adviser or subadviser of equivalent quality (“Distressed Securities”). Investment in Distressed Securities is
speculative and involves significant risks and a Fund could lose all of its investment in any Distressed Security.
Distressed
Securities are subject to greater credit and liquidity risks than other types of loans. Reduced liquidity can affect the values of Distressed
Securities, make their valuation and sale more difficult, and result in greater volatility. A bankruptcy proceeding or other court proceeding
could delay or limit the ability of the Fund to collect the principal and interest payments on Distressed Securities or adversely affect
the Fund’s rights in collateral relating to a Distressed Security. If a lawsuit is brought by creditors of a borrower under a Distressed
Security, a court or a trustee in bankruptcy could take certain actions that would be adverse to a Fund. For example:
•
Other
creditors might convince the court to set aside a loan or the collateralization of the loan as a “fraudulent conveyance”
or “preferential transfer.” In that event, the court could recover from the Fund the interest and principal payments that
the borrower made before becoming insolvent. There can be no assurance that the Fund would be able to prevent that recapture.
•
A
bankruptcy court may restructure the payment obligations under the loan so as to reduce the amount to which the Fund would be entitled.
•
The
court might discharge the amount of the loan that exceeds the value of the collateral.
•
The
court could subordinate the Fund’s rights to the rights of other creditors of the borrower under applicable law, decreasing, potentially
significantly, the likelihood of any recovery on the Fund’s investment.
A
Fund may, but will not necessarily, invest in a Distressed Security when the investment adviser or subadviser believes it is likely that
the issuer of the Distressed Securities will make an exchange offer or will be the subject of a plan of reorganization pursuant to which
the Fund will receive new securities in return for the Distressed Securities. There can be no assurance that such an exchange offer will
be made or that such a plan of reorganization will be adopted. In addition, a significant period of time may pass between the time at
which a Fund makes its investment in Distressed Securities and the time that any such exchange offer or plan of reorganization is completed.
Even if an exchange offer is made or plan of reorganization is adopted with respect to Distressed Securities held by a Fund, there can
be no assurance that the securities or other assets received by a Fund in connection with such exchange offer or plan of reorganization
will not have a lower value or income potential than may have been anticipated when the investment was made. If a Fund participates in
negotiations with respect to any exchange offer or plan of reorganization with respect to an issuer of Distressed Securities, the Fund
may be restricted from disposing of such securities.
Dollar Roll Transactions
A
Fund may enter into dollar roll transactions, in which the Fund sells mortgage-backed securities for delivery in the current month and
simultaneously contracts to purchase substantially similar securities on a specified future date from the same party. A Fund may invest
in dollar rolls in order to benefit from anticipated changes in pricing for the mortgage-backed securities during the term of the transaction,
or for the purpose of creating investment leverage.
In
a dollar roll, the securities that are to be purchased will be of the same type as the securities sold, but will be supported by different
pools of mortgages. A Fund that engages in a dollar roll forgoes principal and interest paid on the sold securities during the roll period,
but is compensated by the difference between the current sales price and the lower forward price for the future purchase. In addition,
a Fund may benefit by investing the transaction proceeds during the roll period. Dollar roll transactions generally have the effect of
creating leverage in a Fund’s portfolio.
Dollar
rolls involve the risk that the Fund’s counterparty will be unable to deliver the mortgage-backed securities underlying the dollar
roll at the fixed time. If the counterparty files for bankruptcy or becomes insolvent, the counterparty
or its representative may
ask for and receive an extension of time to decide whether to enforce the Fund’s repurchase obligation. A Fund’s use of
the transaction proceeds may be restricted pending such decision. A Fund may enter into dollar roll transactions without limit up to the
amount permitted under applicable law.
Exchange Traded Notes (ETNs)
ETNs
are senior, unsecured, debt securities typically issued by financial institutions. An ETN’s return is typically based on the performance
of a particular market index, and the value of the index may be impacted by market forces that affect the value of ETNs in unexpected
ways. ETNs are similar to Structured Investments, except that they are typically listed on an exchange and traded in the secondary market.
See “Structured Investments” in this SAI. The return on an ETN is based on the performance of the specified market index,
and an investor may, at maturity, realize a negative return on the investment. ETNs typically do not make periodic interest payments and
principal is not protected. The repayment of principal and any additional return due either at maturity or upon repurchase by the issuer
depends on the issuer’s ability to pay, regardless of the performance of the underlying index. Accordingly, ETNs are subject to
credit risk that the issuer will default or will be unable to make timely payments of principal. Certain events can impact an ETN issuer’s
financial situation and ability to make timely payments to ETN holders, including economic, political, legal, or regulatory changes and
natural disasters. Event risk is unpredictable and can significantly impact ETN holders.
The
market value of an ETN may be influenced by, among other things, time to maturity, level of supply and demand of the ETN, volatility and
lack of liquidity in the underlying assets, changes in the applicable interest rates, the current performance of the market index to which
the ETN is linked, and the credit rating of the ETN issuer. The market value of an ETN may differ from the performance of the applicable
market index and there may be times when an ETN trades at a premium or discount. This difference in price may be due to the fact that
the supply and demand in the market for ETNs at any point in time is not always identical to the supply and demand in the market for the
securities underlying the market index that the ETN seeks to track. A change in the issuer’s credit rating may also impact the
value of an ETN without regard to the level of the underlying market index. ETNs are also subject to tax risk. No assurance can be given
that the Internal Revenue Service (“IRS”) will accept, or a court will uphold, how the Funds characterize and treat ETNs
for tax purposes.
A
Fund’s ability to sell its ETN holdings may be limited by the availability of a secondary market. In addition, although an ETN
may be listed on an exchange, the issuer may not be required to maintain the listing and there can be no assurance that a secondary market
will exist for an ETN. Some ETNs may be relatively illiquid and may therefore be difficult to purchase or sell at a fair price. Leveraged
ETNs may offer the potential for greater return, but their values may be highly volatile.
Financial Services Companies
A
Fund may invest in financial services companies. Financial services companies are subject to extensive government regulation that may
affect their profitability in many ways, including by limiting the amount and types of loans and other commitments they can make, and
the interest rates and fees they can charge. A financial services company’s profitability, and therefore its stock price, is especially
sensitive to interest rate changes as well as the ability of borrowers to repay their loans. Changing regulations, continuing consolidations,
and development of new products and structures all are likely to have a significant impact on financial services companies.
Fixed Income Securities
Certain
of the debt securities in which the Funds may invest may not offer as high a yield as may be achieved from lower quality instruments having
less safety. If a Fund disposes of an obligation prior to maturity, it may realize a loss or a gain. An increase in interest rates will
generally reduce the value of debt securities, and a decline in interest rates will generally increase the value of debt securities. In
addition, debt securities are subject to the ability of the issuer to make payment at maturity.
To
the extent that a Fund invests in debt securities, interest rate fluctuations will affect its NAV, but not the income it receives from
its debt securities. In addition, if the debt securities contain call, prepayment, or redemption provisions, during a period of declining
interest rates, those securities are likely to be redeemed, and a Fund would probably be unable to replace them with securities having
as great a yield. Certain events, such as market or economic developments, regulatory or government actions, natural disasters, pandemics,
terrorist attacks, war, and other geopolitical events can have a dramatic adverse effect on the debt market and the overall liquidity
of the market for fixed income securities.
Investment
in medium- or lower-grade debt securities involves greater investment risk, including the possibility of issuer default or bankruptcy.
An economic downturn could severely disrupt this market and adversely affect the value of
outstanding bonds and the
ability of the issuers to repay principal and interest. In addition, lower-quality bonds are less sensitive to interest rate changes than
higher-quality instruments and generally are more sensitive to adverse economic changes or individual corporate developments. During a
period of adverse economic changes, including a period of rising interest rates, issuers of such bonds may experience difficulty in servicing
their principal and interest payment obligations. Furthermore, medium- and lower-grade debt securities tend to be less marketable than
higher-quality debt securities because the market for them is less broad. The market for unrated debt securities is even narrower. During
periods of thin trading in these markets, the spread between bid and asked prices is likely to increase significantly, and a Fund may
have greater difficulty selling its portfolio securities. The market value of these securities and their liquidity may be affected by
adverse publicity and investor perceptions.
Foreign Securities
Each
Fund may invest in foreign securities. Foreign securities include securities of foreign companies and foreign governments (or agencies
or subdivisions thereof). If a Fund’s securities are held abroad, the countries in which such securities may be held and the sub-custodian
holding them must be approved by the Board or its delegate under applicable rules adopted by the SEC. In buying foreign securities, each
Fund may convert U.S. dollars into foreign currency.
The
globalization and integration of the world economic system and related financial markets have made it increasingly difficult to define
issuers geographically. Accordingly, the Funds intend to construe geographic terms such as “foreign,” “non-U.S.,”
“European,” “Latin American,” “Asian,” and “emerging markets” in the manner that
affords to the Funds the greatest flexibility in seeking to achieve the investment objective(s) of the relevant Fund. Specifically, unless
otherwise stated, in circumstances where the investment objective and/or strategy is to invest (a) exclusively in “foreign
securities,” “non-U.S. securities,” “European securities,” “Latin American securities,”
“Asian securities,” or “emerging markets” (or similar directions) or (b) at least some percentage
of the Fund’s assets in foreign securities, etc., the Fund will take the view that a security meets this description so long as
the issuer of a security is tied economically to the particular country or geographic region indicated by words of the relevant investment
objective and/or strategy (the “Relevant Language”). For these purposes the issuer of a security is deemed to have that
tie if:
(i)
the
issuer is organized under the laws of the country or a country within the geographic region suggested by the Relevant Language or maintains
its principal place of business in that country or region; or
(ii)
the
securities are traded principally in the country or region suggested by the Relevant Language; or
(iii)
the
issuer, during its most recent fiscal year, derived at least 50% of its revenues or profits from goods produced or sold, investments made,
or services performed in the country or region suggested by the Relevant Language or has at least 50% of its assets in that country or
region.
In
addition, the Funds intend to treat derivative securities (e.g., call options) by reference to the underlying security. Conversely, if
the investment objective and/or strategy of a Fund limits the percentage of assets that may be invested in “foreign securities,”
etc. or prohibits such investments altogether, a Fund intends to categorize securities as “foreign,” etc. only if the security
possesses all of the attributes described above in clauses (i), (ii), and (iii).
Foreign
securities also include a Fund’s investment in foreign securities through depositary receipts, in the form of American Depositary
Receipts (“ADRs”), European Depositary Receipts (“EDRs”), Global Depositary Receipts (“GDRs”),
or other similar securities. An ADR is a U.S. dollar-denominated security issued by a U.S. bank or trust company that represents, and
may be converted into, a foreign security. An EDR or a GDR is generally similar but is issued by a non-U.S. bank. Depositary receipts
are subject to the same risks as direct investment in foreign securities. Depositary receipts may not necessarily be denominated in the
same currency as the underlying securities into which they may be converted, and changes in currency exchange rates may affect the value
of an ADR investment in ways different from direct investments in foreign securities. Funds may invest in both sponsored and unsponsored
depositary receipts. Unsponsored depositary receipts are organized independently and without the cooperation of the issuer of the underlying
securities. As a result, available information concerning the issuers may not be as current for unsponsored depositary receipts and the
prices of unsponsored depositary receipts may be more volatile than if such instruments were sponsored by the issuer. An investment in
an ADR is subject to the credit risk of the issuer of the ADR.
Investments
in foreign securities involve special risks and considerations. Foreign companies are not generally subject to uniform accounting, auditing,
and financial reporting standards, practices, and requirements comparable to those applicable to domestic companies, and such practices
and standards may vary significantly from country to country. There may be less publicly available information about a foreign company
than about a domestic company. The U.S. Public Company Accounting Oversight Board (“PCAOB”), which regulates auditors of
U.S. public companies, is unable to inspect audit work papers in certain foreign countries. Investors in foreign countries often have
limited rights and few
practical remedies to pursue
shareholder claims, including class actions or fraud claims, and the ability of the SEC, the U.S. Department of Justice, and other authorities
to bring and enforce actions against foreign issuers or foreign persons is limited. Foreign markets have different clearance and settlement
procedures. Delays in settlement could result in temporary periods when assets of a Fund are uninvested. The inability of a Fund to make
intended security purchases due to settlement problems could cause it to miss certain investment opportunities. Foreign securities may
also entail certain other risks, such as the possibility of one or more of the following: imposition of dividend or interest withholding
or confiscatory taxes, higher brokerage costs, thinner trading markets, currency blockages or transfer restrictions, expropriation, nationalization,
military coups, economic sanctions, or other adverse political or economic developments; less government supervision and regulation of
securities exchanges, brokers and listed companies; and the difficulty of enforcing obligations in other countries, and are more susceptible
to environmental problems. Purchases of foreign securities are usually made in foreign currencies and, as a result, a Fund may incur currency
conversion costs and may be affected favorably or unfavorably by changes in the value of foreign currencies against the U.S. dollar. Further,
it may be more difficult for a Fund’s agents to keep currently informed about corporate actions which may affect the prices of
portfolio securities. Communications between the United States and foreign countries may be less reliable than within the United States,
thus increasing the risk of delayed settlements of portfolio transactions or loss of certificates for portfolio securities. Certain markets
may require payment for securities before delivery. In addition, there may be a possibility of nationalization or expropriation of assets,
imposition of currency exchange controls, confiscatory taxation, political or financial instability, diplomatic developments that could
adversely affect the values of the Fund’s investments in certain non-U.S. countries, and quotas or other limits on the ability
of the Fund (or clients of the Fund’s investment adviser or subadviser) to invest or maintain investments in securities of issuers
in certain countries.
A
number of current significant political, demographic, and economic developments may affect investments in foreign securities and in securities
of companies with operations overseas. The course of any one or more of these events and the effect on trade barriers, competition, and
markets for consumer goods and services are uncertain. Similar considerations are of concern with respect to developing countries. For
example, the possibility of revolution and the dependence on foreign economic assistance may be greater in these countries than in developed
countries. Management seeks to mitigate the risks associated with these considerations through diversification and active professional
management.
In
addition to the general risks of investing in foreign securities, investments in emerging markets involve special risks. Securities of
many issuers in emerging markets may have less stringent investor protection and disclosure standards, and may be less liquid and more
volatile than securities of comparable domestic issuers. Shares of companies that only trade on an emerging market securities exchange
are not likely to file reports with the SEC. The availability of material financial information about such companies and its reliability
may be limited since such companies are generally not subject to the same regulatory, accounting, auditing, or auditor oversight requirements
applicable to companies that file reports with the SEC. In addition, the PCAOB, which regulates auditors of U.S. public companies, is
unable to inspect audit work papers in certain emerging market countries. Emerging markets may have different clearance and settlement
procedures, and in certain markets there have been times when settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in settlement could result in temporary periods when a portion
of the assets of a Fund is uninvested and no return is earned thereon. The inability of a Fund to make intended security purchases due
to settlement problems could cause a Fund to miss attractive investment opportunities. Inability to dispose of portfolio securities due
to settlement problems could result in losses to a Fund due to subsequent declines in values of the portfolio securities, decrease in
the level of liquidity in a Fund’s portfolio, or, if a Fund has entered into a contract to sell the security, possible liability
to the purchaser. Certain markets may require payment for securities before delivery, and in such markets a Fund bears the risk that the
securities will not be delivered and that the Fund’s payments will not be returned. In addition, securities markets of emerging
market countries are subject to the risk that such markets may close, sometimes for extended periods of time, due to market, economic,
political, regulatory, geopolitical, environmental, public health, or other conditions. Securities prices in emerging markets can be significantly
more volatile than in the more developed nations of the world, reflecting the greater uncertainties of investing in less established markets
and economies. In particular, countries with emerging markets may have relatively unstable governments, present the risk of nationalization
of businesses, or may have restrictions on foreign ownership or prohibitions of repatriation of assets, and may have less protection of
property rights than more developed countries. Investors in emerging markets may not have the ability to seek certain legal remedies in
U.S. courts as private plaintiffs. As a practical matter, investors may have to rely on domestic legal remedies that are available in
the emerging market and such remedies are often limited and difficult for international investors to pursue. Shareholder claims, including
class action and securities law and fraud claims, generally are difficult or unavailable to pursue as a matter of law or practicality
in many emerging market countries. In addition, the SEC, U.S. Department of Justice, and other U.S. authorities often have substantial
difficulties in bringing and enforcing actions against non-U.S. companies and non-U.S. persons, including company officers and directors,
in certain emerging
markets due to jurisdictional
limitations and various other factors. The economies of countries with emerging markets may be predominantly based on only a few industries,
may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens or inflation
rates. Local securities markets may trade a small number of securities and may be unable to respond effectively to increases in trading
volume, potentially making prompt liquidation of substantial holdings difficult or impossible at times. Securities of issuers located
in countries with emerging markets may have limited marketability and may be subject to more abrupt or erratic price movements. In addition,
many emerging market countries with less established health care systems have experienced outbreaks of pandemics or contagious diseases
from time to time.
Certain
emerging markets may require governmental approval for the repatriation of investment income, capital, or the proceeds of sales of securities
by foreign investors. In addition, if a deterioration occurs in an emerging market’s balance of payments or for other reasons,
a country could impose temporary restrictions on foreign capital remittances. A Fund could be adversely affected by delays in, or a refusal
to grant, any required governmental approval for repatriation of capital, as well as by the application to that Fund of any restrictions
on investments.
Russia,
the Middle East, and many other emerging market countries are highly reliant on income from oil sales. Oil prices can have a major impact
on these economies. Other commodities such as base and precious metals are also important to these economies. As global supply and demand
for commodities fluctuates, these economies can be significantly impacted by the prices of such commodities.
Investment
in certain foreign emerging market debt obligations may be restricted or controlled to varying degrees. These restrictions or controls
may at times preclude investment in certain foreign emerging market debt obligations and increase the expenses of a Fund.
China
Investment Risk. Investments in securities of companies domiciled in the
People’s Republic of China (“China” or the “PRC”) involve a high degree of risk and special considerations
not typically associated with investing in the U.S. securities markets. Such heightened risks include, among others, an authoritarian
government, popular unrest associated with demands for improved political, economic, and social conditions, the impact of regional conflict
on the economy, and hostile relations with neighboring countries.
Military
conflicts, either in response to internal social unrest or conflicts with other countries, could disrupt economic development. The Chinese
economy is vulnerable to the long-running disagreements and religious and nationalist disputes with Tibet and the Xinjiang region. Since
1997, there have been tensions between the Chinese government and many people in Hong Kong who perceive China as tightening control over
Hong Kong’s semi-autonomous liberal political, economic, legal, and social framework. Recent protests and unrest have increased
tensions even further. Due to the interconnected nature of the Hong Kong and Chinese economies, this instability in Hong Kong may cause
uncertainty in the Hong Kong and Chinese markets. China has a complex territorial dispute regarding the sovereignty of Taiwan and has
made threats of invasion; Taiwan-based companies and individuals are significant investors in China. Military conflict between China and
Taiwan may adversely affect securities of Chinese issuers. In addition, China has strained international relations with Japan, India,
Russia, and other neighbors due to territorial disputes, historical animosities, and other defense concerns. Additionally, China is alleged
to have participated in state-sponsored cyberattacks against foreign companies and foreign governments. Actual and threatened responses
to such activity and strained international relations, including purchasing restrictions, sanctions, tariffs, or cyberattacks on the Chinese
government or Chinese companies, may impact China’s economy and Chinese issuers of securities in which a Fund invests. China could
be affected by military events on the Korean peninsula or internal instability within North Korea. These situations may cause uncertainty
in the Chinese market and may adversely affect the performance of the Chinese economy.
The
Chinese government has implemented significant economic reforms in order to liberalize trade policy, promote foreign investment in the
economy, reduce government control of the economy, and develop market mechanisms. However, there can be no assurance that these reforms
will continue or that they will be effective. Despite reforms and privatizations of companies in certain sectors, the Chinese government
still exercises substantial influence over many aspects of the private sector and may own or control many companies. Chinese companies,
such as those in the financial services or technology sectors, and potentially other sectors in the future, are subject to the risk that
Chinese authorities can intervene in their operations and structure. The Chinese government continues to maintain a major role in economic
policy making and investing in China involves risks of losses due to expropriation, nationalization, confiscation of assets and property,
and the imposition of restrictions on foreign investments and on repatriation of capital invested.
The
Chinese government may intervene in the Chinese financial markets, such as by the imposition of trading restrictions, a ban on “naked”
short selling, or the suspension of short selling for certain stocks. This may affect market
price
and liquidity of these stocks, and may have an unpredictable impact on the investment activities of the Funds. Furthermore, such market
interventions may have a negative impact on market sentiment which may in turn affect the performance of the securities markets and as
a result the performance of the Funds.
In
addition, there is less regulation and monitoring of the securities markets and the activities of investors, brokers, and other participants
in China than in the United States. Accordingly, issuers of securities in China are not subject to the same degree of regulation as those
in the United States with respect to such matters as insider trading rules, tender offer regulation, stockholder proxy requirements, and
the requirements mandating timely and accurate disclosure of information. Stock markets in China are in the process of change and further
development. This may lead to trading volatility, and difficulties in the settlement and recording of transactions and interpretation
and application of the relevant regulations. Custodians may not be able to offer the level of service and safe-keeping in relation to
the settlement and administration of securities in China that is customary in more developed markets. In particular, there is a risk that
a Fund may not be recognized as the owner of securities that are held on behalf of the Fund by a sub-custodian.
The
Chinese government has taken positions that prevent the PCAOB from inspecting the audit work and practices of accounting firms in mainland
China and Hong Kong for compliance with U.S. law and professional standards. Audits performed by PCAOB-registered accounting firms in
mainland China and Hong Kong may be less reliable than those performed by firms subject to PCAOB inspection. Accordingly, information
about the Chinese securities in which the Funds invest may be less reliable or complete. Under amendments to the Sarbanes-Oxley Act enacted
in December 2020, which requires that the PCAOB be permitted to inspect the accounting firm of a U.S.-listed Chinese issuer, Chinese companies
with securities listed on U.S. exchanges may be delisted if the PCAOB is unable to inspect the accounting firm.
The
Renminbi (“RMB”) is currently not a freely convertible currency and is subject to foreign exchange control policies and
repatriation restrictions imposed by the Chinese government. The imposition of currency controls may negatively impact performance and
liquidity of the Funds as capital may become trapped in the PRC. The Funds could be adversely affected by delays in, or a refusal to grant,
any required governmental approval for repatriation of capital, as well as by the application to the Funds of any restrictions on investments.
Investing in entities either in, or which have a substantial portion of their operations in, the PRC may require the Funds to adopt special
procedures, seek local government approvals, or take other actions, each of which may involve additional costs and delays to the Funds.
While
the Chinese economy has grown rapidly in recent years, there is no assurance that this growth rate will be maintained. China may experience
substantial rates of inflation or economic recessions, causing a negative effect on its economy and securities market. China’s
economy is heavily dependent on export growth. Reduction in spending on Chinese products and services, institution of tariffs or other
trade barriers, or a downturn in any of the economies of China’s key trading partners may have an adverse impact on the securities
of Chinese issuers. The tax laws and regulations in the PRC are subject to change, including the issuance of authoritative guidance or
enforcement, possibly with retroactive effect. The interpretation, applicability, and enforcement of such laws by the PRC tax authorities
are not as consistent and transparent as those of more developed nations, and may vary over time and from region to region. The application
and enforcement of the PRC tax rules could have a significant adverse effect on a Fund and its investors, particularly in relation to
capital gains withholding tax imposed upon non-residents. In addition, the accounting, auditing, and financial reporting standards and
practices applicable to Chinese companies may be less rigorous, and may result in significant differences between financial statements
prepared in accordance with PRC accounting standards and practices and those prepared in accordance with international accounting standards.
From
time to time, China has experienced outbreaks of infectious illnesses and the country may be subject to other public health threats, infectious
illnesses, diseases, or similar issues in the future. Any spread of an infectious illness, public health threat, or similar issue could
reduce consumer demand or economic output, result in market closures, travel restrictions or quarantines, and generally have a significant
impact on the Chinese economy, which in turn could adversely affect a Fund’s investments.
Risk
of Investing in China through Stock Connect. China A-shares are equity securities
of companies domiciled in China that trade on Chinese stock exchanges such as the Shanghai Stock Exchange (“SSE”) and the
Shenzhen Stock Exchange (“SZSE”) (“A-shares”) and are denominated and traded in RMB whereas China B-shares
are traded on Chinese stock exchanges and are denominated in RMB but traded in either U.S. dollars or Hong Kong dollars (“B-shares”).
Foreign investment in A-shares on the SSE and SZSE has historically not been permitted, other than through a license granted under regulations
in the PRC known as the Qualified Foreign Institutional Investor and Renminbi Qualified Foreign Institutional Investor systems. Foreign
investors may invest in B-shares directly. A Fund’s exposure to B-shares may be obtained through indirect exposure through investment
in participation notes.
Investment
in eligible A-shares listed and traded on the SSE or SZSE is also permitted through the Shanghai-Hong Kong Stock Connect program or the
Shenzhen-Hong Kong Stock Connect program, as applicable (each, a “Stock
Connect” and collectively,
“Stock Connects”). Each Stock Connect is a securities trading and clearing links program established by The Stock Exchange
of Hong Kong Limited (“SEHK”), the Hong Kong Securities Clearing Company Limited (“HKSCC”), the SSE or SZSE,
as applicable, and China Securities Depository and Clearing Corporation Limited (“CSDCC”) that aims to provide mutual stock
market access between the PRC and Hong Kong by permitting investors to trade and settle shares on each market through their local securities
brokers. Under Stock Connects, a Fund’s trading of eligible A-shares listed on the SSE or SZSE, as applicable, would be effectuated
through its Hong Kong broker and a securities trading service company established by SEHK.
Although
no individual investment quotas or licensing requirements apply to investors in Stock Connects, trading through a Stock Connect’s
Northbound Trading Link is subject to daily investment quota limitations which require that buy orders for A-shares be rejected once the
daily quota is exceeded (although a Fund will be permitted to sell A-shares regardless of the quota). These limitations may restrict a
Fund from investing in A-shares on a timely basis, which could affect the Fund’s ability to effectively pursue its investment strategy.
Investment quotas are also subject to change. Investment in eligible A-shares through a Stock Connect is subject to trading, clearance
and settlement procedures that could pose risks to a Fund. A-shares purchased through Stock Connects generally may not be sold or otherwise
transferred other than through Stock Connects in accordance with applicable rules. For example, the PRC regulations require that in order
for an investor to sell any A-share on a certain trading day, there must be sufficient A-shares in the investor’s account before
the market opens on that day. If there are insufficient A-shares in the investor’s account, the sell order will be rejected by
the SSE or SZSE, as applicable. SEHK carries out pre-trade checking on sell orders of certain stocks listed on the SSE market (“SSE
Securities”) or SZSE market (“SZSE Securities”) of its participants (i.e., stock brokers) to ensure that this requirement
is satisfied. While shares must be designated as eligible to be traded under a Stock Connect, those shares may also lose such designation,
and if this occurs, such shares may be sold but cannot be purchased through a Stock Connect. In addition, Stock Connects will only operate
on days when both the Chinese and Hong Kong markets are open for trading, and banking services are available in both markets on the corresponding
settlement days. Therefore, an investment in A-shares through a Stock Connect may subject a Fund to a risk of price fluctuations on days
when the Chinese market is open, but a Stock Connect is not trading. Moreover, day (turnaround) trading is not permitted on the A-shares
market. If an investor buys A-shares on day “T,” the investor will only be able to sell the A-shares on or after day T+1.
Further, since all trades of eligible A-shares must be settled in RMB, investors must have timely access to a reliable supply of offshore
RMB, which cannot be guaranteed. There is also no assurance that RMB will not be subject to devaluation. Any devaluation of RMB could
adversely affect a Fund’s investments. If a Fund holds a class of shares denominated in a local currency other than RMB, the Fund
will be exposed to currency exchange risk if the Fund converts the local currency into RMB for investments in A-shares. A Fund may also
incur conversion costs.
A-shares
held through the nominee structure under a Stock Connect will be held through HKSCC as nominee on behalf of investors. The precise nature
and rights of a Fund as the beneficial owner of the SSE Securities or SZSE Securities through HKSCC as nominee is not well defined under
the PRC laws. There is a lack of a clear definition of, and distinction between, legal ownership and beneficial ownership under the PRC
laws and there have been few cases involving a nominee account structure in the PRC courts. The exact nature and methods of enforcement
of the rights and interests of a Fund under the PRC laws is also uncertain. In the unlikely event that HKSCC becomes subject to winding
up proceedings in Hong Kong, there is a risk that the SSE Securities or SZSE Securities may not be regarded as held for the beneficial
ownership of a Fund or as part of the general assets of HKSCC available for general distribution to its creditors. Notwithstanding the
fact that HKSCC does not claim proprietary interests in the SSE Securities or SZSE Securities held in its omnibus stock account in the
CSDCC, the CSDCC as the share registrar for SSE- or SZSE-listed companies will still treat HKSCC as one of the shareholders when it handles
corporate actions in respect of such SSE Securities or SZSE Securities. HKSCC monitors the corporate actions affecting SSE Securities
and SZSE Securities and keeps participants of Central Clearing and Settlement System (“CCASS”) informed of all such corporate
actions that require CCASS participants to take steps in order to participate in them. Investors may only exercise their voting rights
by providing their voting instructions to HKSCC through participants of CCASS. All voting instructions from CCASS participants will be
consolidated by HKSCC, who will then submit a combined single voting instruction to the relevant SSE- or SZSE-listed company.
A
Fund’s investments through a Stock Connect’s Northbound Trading Link are not covered by Hong Kong’s Investor Compensation
Fund. Hong Kong’s Investor Compensation Fund is established to pay compensation to investors of any nationality who suffer pecuniary
losses as a result of default of a licensed intermediary or authorized financial institution in relation to exchange-traded products in
Hong Kong. In addition, since a Fund carries out Northbound Trading through securities brokers in Hong Kong but not PRC brokers, it is
not protected by the China Securities Investor Protection Fund in the PRC.
Market
participants are able to participate in Stock Connects subject to meeting certain information technology capability, risk management and
other requirements as may be specified by the relevant exchange and/or clearinghouse.
Further, the “connectivity”
in Stock Connects requires routing of orders across the border of Hong Kong and the PRC. This requires the development of new information
technology systems on the part of SEHK and exchange participants. There is no assurance that the systems of SEHK and market participants
will function properly or will continue to be adapted to changes and developments in both markets. In the event that the relevant systems
fail to function properly, trading in A-shares through Stock Connects could be disrupted.
The
Shanghai-Hong Kong Stock Connect program launched in November 2014 and the Shenzhen-Hong Kong Stock Connect program launched in December
2016 and are both in their initial stages. The current regulations are relatively untested and there is no certainty as to how they will
be applied or interpreted going forward. In addition, the current regulations are subject to change and there can be no assurance that
a Stock Connect will not be discontinued. New regulations may be issued from time to time by the regulators and stock exchanges in China
and Hong Kong in connection with operations, legal enforcement and cross-border trades under Stock Connects. A Fund may be adversely affected
as a result of such changes. Furthermore, the securities regimes and legal systems of China and Hong Kong differ significantly and issues
may arise from the differences on an ongoing basis. In the event that the relevant systems fail to function properly, trading in both
markets through Stock Connects could be disrupted and a Fund’s ability to achieve its investment objective may be adversely affected.
In addition, a Fund’s investments in A-shares through Stock Connects are generally subject to Chinese securities regulations and
listing rules, among other restrictions. Further, different fees, costs and taxes are imposed on foreign investors acquiring A-shares
through Stock Connects, and these fees, costs and taxes may be higher than comparable fees, costs and taxes imposed on owners of other
securities providing similar investment exposure.
A-Share
Market Suspension Risk. A-shares may only be bought from, or sold to, a
Fund at times when the relevant A-shares may be sold or purchased on the relevant Chinese stock exchange. The A-shares market has a higher
propensity for trading suspensions than many other global equity markets. Trading suspensions in certain stocks could lead to greater
market execution risk and costs for a Fund. The SSE and SZSE currently apply a daily price limit, generally set at 10%, of the amount
of fluctuation permitted in the prices of A-shares during a single trading day. The daily price limit refers to price movements only and
does not restrict trading within the relevant limit. There can be no assurance that a liquid market on an exchange will exist for any
particular A-share or for any particular time.
Risks
of Investing in China through Variable Interest Entities. Investments in
Chinese companies may be made through a special structure known as a variable interest entity (“VIE”) that is designed to
provide foreign investors, such as a Fund, with exposure to Chinese companies that operate in certain sectors in which China restricts
or prohibits foreign investments. Investments in VIEs may pose additional risks because the investment is made through an intermediary
shell company that has entered into service and other contracts with the underlying Chinese operating company in order to provide investors
with exposure to the operating company, and therefore does not represent equity ownership in the operating company. The value of the shell
company is derived from its ability to consolidate the VIE into its financials pursuant to contractual arrangements that allow the shell
company to exert a degree of control over, and obtain economic benefits arising from, the VIE without formal legal ownership. The contractual
arrangements between the shell company and the operating company may not be as effective in providing operational control as direct equity
ownership, and the rights of a foreign investor (such as a Fund) may be limited, including by actions of the Chinese government that could
determine that the underlying contractual arrangements are invalid. While VIEs are a longstanding industry practice and Chinese regulators
have permitted such arrangements to proliferate, the structure has not been formally recognized under Chinese law and it is uncertain
whether Chinese regulators will withdraw their implicit acceptance of the structure. It is also uncertain whether the contractual arrangements,
which may be subject to conflicts of interest between the legal owners of the VIE and foreign investors, would be enforced by Chinese
courts or arbitration bodies. Prohibitions of these structures by the Chinese government, or the inability to enforce such contracts,
from which the shell company derives its value, would likely cause the VIE-structured holding(s) to suffer significant, detrimental, and
possibly permanent loss, and in turn, adversely affect a Fund’s returns and net asset value.
Health Care Companies
A
Fund may invest in health care companies. The activities of health care companies may be funded or subsidized by federal and state governments.
If government funding and subsidies are reduced or discontinued, the profitability of these companies could be adversely affected. Health
care companies may also be affected by government policies on health care reimbursements, regulatory approval for new drugs and medical
instruments, and similar matters. They are also subject to legislative risk, i.e., the risk of a reform of the health care system through
legislation.
Illiquid Securities
Each
Fund may invest not more than 15% of its net assets (5% of its total assets in the case of the U.S. Government Money Market Fund) in “illiquid
securities,” which are investments that the Fund reasonably expects cannot be sold or
disposed of in current market
conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A
Fund may not be able to dispose of such securities in a timely fashion and for a fair price, which could result in losses to a Fund. In
addition, illiquid securities are generally more difficult to value. Illiquid securities may include repurchase agreements with maturities
greater than seven days, futures contracts and options thereon for which a liquid secondary market does not exist, time deposits maturing
in more than seven calendar days, and securities of new and early stage companies whose securities are not publicly traded. The Funds
may also purchase securities eligible for resale to qualified institutional buyers pursuant to Rule 144A under the 1933 Act. Such
securities may be determined to be liquid based on an analysis taking into account, among other things, trading activity for such securities
and the availability of reliable pricing information, among other factors. If there is a lack of trading interest in particular Rule 144A
securities, a Fund’s holdings of those securities may be illiquid, resulting in undesirable delays in selling these securities
at prices representing fair value.
Index-Related Securities (Equity Equivalents)
The
Funds may invest in certain types of securities that enable investors to purchase or sell shares in a portfolio of securities that seeks
to track the performance of an underlying index or a portion of an index. Such Equity Equivalents include, among others, DIAMONDS (interests
in a portfolio of securities that seeks to track the performance of the Dow Jones Industrial Average), SPDRs or Standard & Poor’s
Depositary Receipts (interests in a portfolio of securities that seeks to track the performance of the S&P 500®
Index), and the Nasdaq-100 Trust (interests in a portfolio of securities of the largest and most actively traded non-financial companies
listed on the Nasdaq Stock Market). Such securities are similar to index mutual funds, but they are traded on various stock exchanges
or secondary markets. The value of these securities is dependent upon the performance of the underlying index on which they are based.
Thus, these securities are subject to the same risks as their underlying indexes as well as the securities that make up those indexes.
For example, if the securities comprising an index that an index-related security seeks to track perform poorly, the index-related security
will lose value.
Equity
Equivalents may be used for several purposes, including to simulate full investment in the underlying index while retaining a cash balance
for fund management purposes, to facilitate trading, to reduce transaction costs, or to seek higher investment returns where an Equity
Equivalent is priced more attractively than securities in the underlying index. Because the expense associated with an investment in Equity
Equivalents may be substantially lower than the expense of small investments directly in the securities comprising the indexes they seek
to track, investments in Equity Equivalents may provide a cost-effective means of diversifying the fund’s assets across a broad
range of equity securities.
The
prices of Equity Equivalents are derived and based upon the securities held by the particular investment company. Accordingly, the level
of risk involved in the purchase or sale of an Equity Equivalent is similar to the risk involved in the purchase or sale of traditional
common stock, with the exception that the pricing mechanism for such instruments is based on a basket of stocks. The market prices of
Equity Equivalents are expected to fluctuate in accordance with both changes in the NAVs of their underlying indexes and the supply and
demand for the instruments on the exchanges on which they are traded. Substantial market or other disruptions affecting an Equity Equivalent
could adversely affect the liquidity and value of the shares of the fund investing in such instruments.
Inflation-Linked Securities
Inflation-linked
securities are typically fixed income securities whose principal values are periodically adjusted according to a measure of inflation.
If the index measuring inflation falls, the principal value of an inflation-linked security will be adjusted downward, and consequently
the interest payable on the security (calculated with respect to a smaller principal amount) will be reduced. Repayment of the original
principal of the security upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-linked securities.
For securities that do not provide a similar guarantee, the adjusted principal value of the security repaid at maturity may be less than
the original principal.
Alternatively,
the interest rates payable on certain inflation-linked securities may be adjusted according to a measure of inflation. As a result, the
principal values of such securities do not adjust according to the rate of inflation, although the interest payable on such securities
may decline during times of falling inflation.
The
values of inflation-linked securities are expected to change in response to changes in real interest rates. Real interest rates are tied
to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than
inflation, real interest rates may rise, leading to a decrease in value of inflation-linked securities. Inflation-linked securities may
cause a potential cash flow mismatch to investors, because an increase in the principal amount of an inflation-linked security will be
treated as interest income currently subject to tax at ordinary income rates even though investors will not receive repayment of principal
until maturity. If a Fund invests in such
securities, it will be required
to distribute such interest income in order to qualify for treatment as a regulated investment company and eliminate the Fund-level tax,
without a corresponding receipt of cash, and therefore may be required to dispose of portfolio securities at a time when it may not be
advantageous to do so in order to make such distributions.
While
the values of inflation-linked securities are expected to be largely protected from long-term inflationary trends, short-term increases
in inflation may lead to declines in value. In addition, if interest rates rise due to reasons other than inflation (for example, due
to changes in currency exchange rates), investors in inflation-linked securities may not be protected to the extent that the increase
is not reflected in the securities’ inflation measure.
The
periodic adjustment of U.S. Treasury inflation-linked securities is tied to the Consumer Price Index for All 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-linked securities issued by a foreign government or a private
issuer are generally adjusted to reflect an inflation measure specified by the issuer. There can be no assurance that the CPI-U or any
other inflation measure will accurately measure the real rate of inflation in the prices of goods and services.
IPOs and Other Limited Opportunities
A
Fund may purchase securities of companies that are offered pursuant to an initial public offering (“IPO”) or other similar
limited opportunities. Although companies can be any age or size at the time of their IPO, they are often smaller and have a limited operating
history, which involves a greater potential for the value of their securities to be impaired following the IPO. The price of a company’s
securities may be highly unstable at the time of its IPO and for a period thereafter due to factors such as market psychology prevailing
at the time of the IPO, the absence of a prior public market, the small number of shares available, and limited availability of investor
information. Securities purchased in IPOs have a tendency to fluctuate in value significantly shortly after the IPO relative to the price
at which they were purchased. These fluctuations could impact the NAV and return earned on a Fund’s shares. Investors in IPOs can
be adversely 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. In addition, all of the factors that affect the performance of an economy or equity
markets may have a greater impact on the shares of IPO companies. IPO securities tend to involve greater risk due, in part, to public
perception and the lack of publicly available information and trading history.
Master Limited Partnerships
A
Fund may invest in master limited partnerships (“MLPs”), which are limited partnerships in which ownership units are publicly
traded. MLPs often own or own interests in properties or businesses that are related to oil and gas industries, including pipelines, although
MLPs may invest in other types of investments, including credit-related investments. Generally, an MLP is operated under the supervision
of one or more managing general partners. Limited partners (like a Fund when it invests in an MLP) are not involved in the day-to-day
management of the partnership. A Fund also may invest in companies who serve (or whose affiliates serve) as MLP general partners.
Investments
in MLPs are generally subject to many of the risks that apply to partnerships. For example, holders of the units of MLPs may have limited
control and limited voting rights on matters affecting the partnership. There may be fewer corporate protections afforded investors in
an MLP than investors in a corporation. Conflicts of interest may exist among unit holders, subordinated unit holders, and the general
partner of an MLP, including those arising from incentive distribution payments. MLPs that concentrate in a particular industry or region
are subject to risks associated with such industry or region. MLPs holding credit-related investments are subject to interest rate risk
and the risk of default on payment obligations by debt issuers. Investments held by MLPs may be illiquid. MLP units may trade infrequently
and in limited volume, and they may be subject to more abrupt or erratic price movements than securities of larger or more broadly based
companies.
A
Fund may also hold investments in limited liability companies that have many of the same characteristics and are subject to many of the
same risks as master limited partnerships.
The
manner and extent of a Fund’s investments in MLPs and limited liability companies may be limited by its intention to qualify as
a regulated investment company under the Code, and any such investments by the Fund may adversely affect the ability of the Fund to qualify
as such.
Mortgage- and Asset-Backed Securities
Mortgage-backed
securities, including collateralized mortgage obligations (“CMOs”) and certain stripped mortgage-backed securities, represent
a participation in, or are secured by, mortgage loans. Asset-backed securities are structured like
mortgage-backed securities,
but instead of mortgage loans or interests in mortgage loans, the underlying assets may include such items as motor vehicle installment
sales or installment loan contracts, leases of various types of real and personal property, receivables from credit card agreements, home
equity loans, and student loans. Asset-backed securities may also include collateralized debt obligations as described below.
A
Fund may invest in mortgage-backed securities issued or guaranteed by (i) U.S. Government agencies or instrumentalities such as the
Government National Mortgage Association (“GNMA”) (also known as Ginnie Mae), the Federal National Mortgage Association
(“FNMA”) (also known as Fannie Mae), and the Federal Home Loan Mortgage Corporation (“FHLMC”) (also known
as Freddie Mac) or (ii) other issuers, including private companies. Under the Federal Housing Finance Agency’s “Single Security
Initiative,” Fannie Mae and Freddie Mac have entered into a joint initiative to develop a common securitization platform for the
issuance of Uniform Mortgage-Backed Securities (“UMBS”), which would generally align the characteristics of Fannie Mae and
Freddie Mac mortgage-backed securities. In June 2019 Fannie Mae and Freddie Mac started to issue UMBS in place of their current offerings
of TBA-eligible mortgage-backed securities. The effect of the issuance of UMBS on the market for mortgage-backed securities is uncertain.
Privately issued mortgage-backed securities may include securities backed by commercial mortgages, which are mortgages on commercial,
rather than residential, real estate. Privately issued mortgage-backed securities are not traded on an exchange and there may be a limited
market for the securities, especially when there is a perceived weakness in the mortgage and real estate market sectors. Without an active
trading market, mortgage-backed securities held in a Fund’s portfolio may be particularly difficult to value because of the complexities
involved in assessing the value of the underlying mortgage loans. There is no assurance that the U.S. Government would provide financial
support to its agencies and instrumentalities if not required to do so. In addition, certain governmental entities have been subject to
regulatory scrutiny regarding their accounting policies and practices and other concerns that may result in legislation, changes in regulatory
oversight and/or other consequences that could adversely affect the credit quality, availability, or investment character of securities
issued by these entities.
Mortgage-backed
securities have yield and maturity characteristics corresponding to the underlying assets. Unlike traditional debt securities, which may
pay a fixed rate of interest until maturity, when the entire principal amount comes due, payments on certain mortgage-backed securities
include both interest and a partial repayment of principal. Besides the scheduled repayment of principal, repayments of principal may
result from the voluntary prepayment, refinancing, or foreclosure of the underlying mortgage loans. If property owners make unscheduled
prepayments of their mortgage loans, these prepayments will result in early payment of the applicable mortgage-related securities. In
that event a Fund may be unable to invest the proceeds from the early payment of the mortgage-related securities in an investment that
provides as high a yield as the mortgage-related securities. Consequently, early payment associated with mortgage-related securities may
cause these securities to experience significantly greater price and yield volatility than that experienced by traditional fixed income
securities. The occurrence of mortgage prepayments is affected by factors including the level of interest rates, general economic conditions,
the location and age of the mortgages, and other social and demographic conditions. During periods of falling interest rates, the rate
of mortgage prepayments tends to increase, thereby tending to decrease the life of mortgage-related securities. During periods of rising
interest rates, the rate of mortgage prepayments usually decreases, thereby tending to increase the life of mortgage-related securities.
If the life of a mortgage-related security is inaccurately predicted, a Fund may not be able to realize the rate of return the investment
adviser or subadviser expected.
Mortgage-backed
and asset-backed securities are less effective than other types of securities as a means of “locking in” attractive long-term
interest rates. One reason is the need to reinvest prepayments of principal; another is the possibility of significant unscheduled prepayments
resulting from declines in interest rates. These prepayments would have to be reinvested at lower rates. As a result, these securities
may have less potential for capital appreciation during periods of declining interest rates than other securities of comparable maturities,
although they may have a similar or greater risk of decline in market value during periods of rising interest rates. Prepayments may also
significantly shorten the effective maturities of these securities, especially during periods of declining interest rates. Conversely,
during periods of rising interest rates, a reduction in prepayments may increase the effective maturities of these securities, subjecting
them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore,
potentially increasing the volatility of the Funds. The terms of certain asset-backed securities may require early prepayment in response
to certain credit events potentially affecting the values of the asset-backed securities.
At
times, some mortgage-backed and asset-backed securities will have higher than market interest rates and therefore will be purchased at
a premium above their par value. Prepayments may cause losses on securities purchased at a premium. Ongoing developments in the residential
and commercial mortgage markets may have additional consequences for the market for mortgage-backed securities. During periods of deteriorating
economic conditions, such as recessions or periods of rising unemployment, delinquencies and losses generally increase, sometimes drastically,
with respect to securitizations involving mortgage loans. The effects of the COVID-19 virus and governmental responses to the effects
of the virus, may
result
in increased delinquencies and losses and have other, potentially unanticipated, adverse effects on such investments and the markets for
those investments. There are fewer investors in mortgage- and asset-backed securities markets and those investors are more homogenous
than in markets for other kinds of securities. If a number of market participants are impacted by negative economic conditions, forced
selling of mortgage- or asset-backed securities unrelated to fundamental analysis could depress market prices and liquidity significantly
and for a longer period of time than in markets with greater liquidity.
CMOs
may be issued by a U.S. Government agency or instrumentality or by a private issuer. Although payment of the principal of, and interest
on, the underlying collateral securing privately issued CMOs may be guaranteed by the U.S. Government or its agencies or instrumentalities,
these CMOs represent obligations solely of the private issuer and are not insured or guaranteed by the U.S. Government, its agencies or
instrumentalities, or any other person or entity.
CMOs
typically issue multiple classes of securities, having different maturities, interest rates, and payment schedules, and with the principal
and interest on the underlying mortgages allocated among the several classes in various ways. Payment of interest or principal on some
classes or series of CMOs may be subordinated to payments on other classes or series and may be subject to contingencies; or some classes
or series may bear some or all of the risk of default on the underlying mortgages. CMOs of different classes or series are generally retired
in sequence as the underlying mortgage loans in the mortgage pool are repaid. If enough mortgages are repaid ahead of schedule, the classes
or series of a CMO with the earliest maturities generally will be retired prior to their maturities. Thus, the early retirement of particular
classes or series of a CMO would have the same effect as the prepayment of mortgages underlying other mortgage-backed securities. Conversely,
slower than anticipated prepayments can extend the effective maturities of CMOs, subjecting them to a greater risk of decline in market
value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing their volatility.
Certain classes or series of CMOs may experience high levels of volatility in response to changes in interest rates and other factors.
Stripped
mortgage-backed securities are usually structured with two classes that receive payments of interest or principal on a pool of mortgage
loans. Stripped mortgage-backed securities may experience very high levels of volatility in response to changes in interest rates. The
yield to maturity on an interest only or “IO” class of stripped mortgage-backed securities is extremely sensitive not only
to changes in prevailing interest rates but also to the rate of principal payments (including prepayments) on the underlying assets. A
rapid rate of principal prepayments will typically result in a substantial decline in the value of IOs and may have a significant adverse
effect on a Fund’s yield to maturity to the extent it invests in IOs. If the assets underlying the IO experience greater than anticipated
prepayments of principal, the Fund may fail to recoup fully, or at all, its initial investment in these securities. Conversely, principal
only securities or “POs” tend to increase in value if prepayments are greater than anticipated and decline if prepayments
are slower than anticipated.
The
secondary market for stripped mortgage-backed securities may be more volatile and less liquid than that for other mortgage-backed securities,
potentially limiting a Fund’s ability to buy or sell those securities at any particular time.
Subprime
mortgage loans, which typically are made to less creditworthy borrowers, have a higher risk of default than conventional mortgage loans.
Therefore, mortgage-backed securities backed by subprime mortgage loans may suffer significantly greater declines in value due to defaults,
and may experience high levels of volatility.
A
Fund may invest in collateralized debt obligations (“CDOs”), including collateralized bond obligations (“CBOs”),
collateralized loan obligations (“CLOs”), and other similarly structured securities. CBOs, CLOs, and other CDOs are types
of asset-backed securities. A CBO is typically an obligation of a trust backed (or collateralized) by a pool of securities, often including
high risk, below investment grade debt securities. The collateral may include many different types of debt 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 typically an obligation of a trust backed (or 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 types of CDOs may include, by way of example, obligations
of trusts backed by other types of assets representing obligations of various types, and may include high risk, below investment grade
debt obligations. CBOs, CLOs, and other CDOs may pay management fees and administrative expenses. The risk profile of an investment in
a CBO, CLO, or other CDO depends largely on the type of the collateral securities and the class of the instrument in which a Fund invests.
For
CBOs, CLOs, and other CDOs, the cash flows from the trust are split into two or more portions, called tranches, varying in risk and yield.
The riskiest portion is the “equity” tranche which typically bears the effects of defaults from the bonds or loans in the
trust in the first instance and may serve to protect other, senior tranches from defaults. Typically, the more senior the tranche in a
CBO, CLO, or other CDO, the higher its rating, although senior tranches can experience
substantial losses due to
actual defaults. The market values of CBO, CLO, and CDO obligations may be affected by a number of factors, including, among others, changes
in interest rates, defaults affecting junior tranches, market anticipation of defaults, and general market aversion to CBO, CLO, or other
CDO securities as a class, or to the collateral backing them.
CBOs,
CLOs, and other CDOs may be illiquid. In addition to the risks associated with debt securities discussed elsewhere in this SAI and the
Funds’ Prospectus (e.g., interest rate risk and the risk of default), CBOs, CLOs, and other CDOs carry additional risks including,
but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other
payments on a CBO’s, CLO’s, or other CDO’s obligations; (ii) the collateral may decline in value or be in default;
(iii) the risk that Funds may invest in tranches of CBOs, CLOs, or other CDOs that are subordinate to other classes; and (iv) the
complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected
investment results.
Some
of the loans in which a Fund may invest or to which a Fund may gain exposure through its investments in CDOs, CLOs, or other types of
structured securities may be covenant-lite loans, which contain fewer or less restrictive constraints on the borrower than certain other
types of loans. Covenant-lite loans generally do not include terms that allow the lender to monitor the performance of the borrower and
declare a default or force a borrower into bankruptcy restructuring if certain criteria are breached. Under such loans, lenders typically
must rely on covenants that restrict a company from incurring additional debt or engaging in certain actions. Such covenants can only
be breached by an affirmative action of the borrower, rather than by a deterioration in the borrower’s financial condition. Accordingly,
a Fund may have fewer rights against a borrower when it invests in or has exposure to such loans and, accordingly, may have a greater
risk of loss on such investments as compared to investments in or exposure to loans with additional or more conventional covenants.
Other Income-Producing Securities
Other
types of income-producing securities the Funds may purchase, include, but are not limited to, the following:
•
Variable
and floating rate obligations. Variable and floating
rate securities are debt instruments that provide for periodic adjustments in the interest rate paid on the security and, under certain
limited circumstances, may have varying principal amounts. Variable rate securities provide for a specified periodic adjustment in the
interest rate, while floating rate securities have interest rates that may change with change to the level of prevailing interest rates
or the issuer’s credit quality. These types of securities are relatively long-term instruments that often carry demand features
permitting the holder to demand payment of principal at any time or at specified intervals prior to maturity. There is a risk that the
current interest rate on variable and floating securities may not accurately reflect current market interest rates or adequately compensate
the holder for the current creditworthiness of the issuer. Due to their variable- or floating-rate features, these instruments will generally
pay higher levels of income in a rising interest rate environment and lower levels of income as interest rates decline. For the same reason,
the market value of a variable- or floating-rate instrument is generally expected to have less sensitivity to fluctuations in market interest
rates than a fixed-rate instrument, although the value of a floating-rate instrument may nonetheless decline as interest rates rise and
due to other factors, such as changes in credit quality. Some variable or floating rate securities are structured with liquidity features
such as (1) put options or tender options that permit holders (sometimes subject to conditions) to demand payment of the unpaid principal
balance plus accrued interest from the issuers or certain financial intermediaries or (2) auction rate features, remarketing provisions,
or other maturity-shortening devices designed to enable the issuer to refinance or redeem outstanding debt securities (market-dependent
liquidity features). The market-dependent liquidity features may not operate as intended as a result of the issuer’s declining
creditworthiness, adverse market conditions, or other factors or the inability or unwillingness of a participating broker-dealer to make
a secondary market for such securities. As a result, variable or floating rate securities that include market-dependent liquidity features
may lose value and the holders of such securities may be required to retain them for an extended period of time or until maturity.
In order to
use these investments most effectively, a Fund’s investment adviser or subadviser must correctly assess probable movements in interest
rates. This involves different skills than those used to select most portfolio securities. If the investment adviser or subadviser incorrectly
forecasts such movements, a Fund could be adversely affected by the use of variable or floating rate obligations.
Many
financial instruments use or may use a floating rate based on the London Interbank Offered Rate (“LIBOR”), which is the
offered rate for short-term Eurodollar deposits between major international banks. On July 27, 2017, the head of the United Kingdom’s
Financial Conduct Authority (the “FCA”) announced a desire to phase out the use of LIBOR by the end of 2021, and it is expected
that LIBOR will cease to be published after
that time.
The FCA and LIBOR’s administrator, ICE Benchmark Administration, have also announced that most LIBOR settings will no longer be
published after the end of 2021 and a majority of U.S. dollar LIBOR settings will no longer be published after June 30, 2023. Actions
by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies. A Fund may have investments
linked to other interbank offered rates which may also cease to be published, such as the Euro Overnight Index Average which will cease
to be published at the end of 2021. Various financial industry groups have been planning for transition away from LIBOR, but there are
obstacles to converting certain securities and transactions to new reference rates. Markets are developing but questions around liquidity
in these rates and how to appropriately adjust these rates to mitigate any economic value transfer at the time of transition remain a
significant concern. It is difficult to predict the full impact of the transition away from LIBOR on a Fund. The transition process might
lead to increased volatility and illiquidity in markets that currently rely on LIBOR to determine interest rates. It could also lead to
a reduction in the value of some LIBOR-based investments and reduce the effectiveness of new hedges placed against existing LIBOR-based
instruments. Since the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior
to the cessation of LIBOR.
•
Standby
commitments. These instruments, which are similar
to a put, give a Fund the option to obligate a broker, dealer, or bank to repurchase a security held by the Fund at a specified price.
•
Tender
option bonds. Tender option bonds are relatively
long-term bonds that are coupled with the agreement of a third party, such as a broker, dealer, or bank, to grant the holders of such
securities the option to tender the securities to the institution at periodic intervals.
•
Inverse
floaters. Inverse floaters have variable interest
rates that typically move in the opposite direction from movements in prevailing interest rates, most often short-term rates. Accordingly,
the value of inverse floaters, or other obligations or certificates structured to have similar features, generally moves in the opposite
direction from interest rates. The value of an inverse floater can be considerably more volatile than the value of other debt instruments
of comparable maturity and credit quality. Inverse floaters incorporate varying degrees of leverage. Generally, greater leverage results
in greater price volatility for any given change in interest rates. Inverse floaters may be subject to legal or contractual restrictions
on resale and therefore may be less liquid than other types of securities. Similar to variable and floating rate obligations, effective
use of inverse floaters requires skills different from those needed to select most portfolio securities. If movements in interest rates
are incorrectly anticipated, a Fund could lose money or the NAV of its shares could decline by the use of inverse floaters.
•
Strip
bonds. Strip bonds are debt securities that are stripped
of their interest, usually by a financial intermediary, after the securities are issued. The market value of these securities generally
fluctuates more in response to changes in interest rates than interest-paying securities of comparable maturities.
Standby
commitments, tender option bonds, and instruments with demand features are primarily used by the Funds for the purpose of increasing the
liquidity of a Fund’s portfolio.
Other Investment Companies
A
Fund may invest in securities of other open- or closed-end investment companies, including exchange-traded funds (“ETFs”),
traded on one or more national securities exchanges, as well as private investment vehicles. Provisions of the 1940 Act may limit the
ability of a Fund to invest in certain registered investment companies or private investment vehicles or may limit the amount of its assets
that a Fund may invest in any investment vehicle.
A
Fund may, for example, invest in other open or closed-end investment companies, including ETFs, during periods when it has large amounts
of uninvested cash, when its investment adviser or subadviser believes share prices of other investment companies offer attractive values,
or to gain or maintain exposure to various asset classes and markets or types of strategies and investments. A Fund may invest in shares
of another registered investment company or private investment vehicle in order to gain indirect exposure to markets in a country where
the Fund is not able to invest freely, or to gain indirect exposure to one or more issuers whose securities it may not buy directly. As
a shareholder in an investment vehicle, a Fund would bear its ratable share of that vehicle’s expenses and would remain subject
to payment of the Fund’s management fees with respect to assets so invested. Shareholders would therefore be subject to duplicative
expenses to the extent a Fund invests in other investment vehicles. Shares of registered open-end investment companies traded on a securities
exchange may not be redeemable by a Fund in all cases. Private investment vehicles in which a Fund may invest are not registered under
the 1940 Act, and so will not offer all of the protections provided by the 1940 Act (including, among other things, independent oversight,
protections against certain conflicts of interest, and custodial risks).
If
a Fund invests in another investment vehicle, it is exposed to the risk that the other investment vehicle will not perform as expected.
A Fund is exposed indirectly to all of the risks applicable to an investment in such other investment vehicle. In addition, lack of liquidity
in the other investment vehicle could result in its value being more volatile than the underlying portfolio of securities, and may limit
the ability of a Fund to sell or redeem its interest in the investment vehicle at a time or at a price it might consider desirable. A
Fund may not be able to redeem its interest in private investment vehicles except at certain designated times. The investment policies
and limitations of the other registered investment company or private investment vehicle may not be the same as those of the investing
Fund; as a result, the Fund may be subject to additional or different risks, or may achieve a reduced investment return, as a result of
its investment in another investment vehicle. If the other investment company is an ETF or other product traded on a securities exchange
or otherwise actively traded, its shares may trade at a premium or discount to their NAV, an effect that might be more pronounced in less
liquid markets. ETFs are also subject to additional risks, including, among others, the risk that the market price of an ETF’s
shares may trade above or below its NAV, the risk that an active trading market for an ETF’s shares may not develop or be maintained,
the risk that trading of an ETF’s shares may be halted, and the risk that the ETF’s shares may be delisted from the listing
exchange. Unlike shares of a mutual fund, which can be bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of an ETF may be purchased or redeemed directly from the ETF solely by Authorized Participants (“APs”) and
only in aggregations of a specified number of shares (“Creation Units”). ETFs may have a limited number of financial institutions
that act as APs. To the extent that those APs exit the business, or are unable to or choose not to process creation and/or redemption
orders for Creation Units, and no other AP steps forward to create and redeem ETF shares, the ETF’s shares may be more likely to
trade at a premium or discount to NAV and possibly face trading halts or delisting.
A
Fund’s investment adviser or subadviser or their affiliates may serve as investment adviser to a registered investment company
or private investment vehicle in which the Fund may invest, leading to conflicts of interest. For example, a Fund’s investment
adviser or subadviser may receive fees based on the amount of assets invested in the other investment vehicle. Investment by a Fund in
another registered investment company or private investment vehicle will typically be beneficial to its investment adviser or subadviser
in the management of the other investment vehicle, by helping to achieve economies of scale or enhancing cash flows. Due to this and other
factors, a Fund’s investment adviser or subadviser will have an incentive to invest the Fund’s assets in an investment vehicle
sponsored or managed by it or its affiliates in lieu of investments by the Fund directly in portfolio securities, and will have an incentive
to invest in such an investment vehicle over a non-affiliated investment vehicle. The investment adviser or subadviser will have no obligation
to select the least expensive or best performing investment companies available to serve as an underlying investment vehicle. Similarly,
a Fund’s investment adviser or subadviser will have an incentive to delay or decide against the sale of interests held by the Fund
in an investment company sponsored or managed by it or its affiliates. It is possible that other clients of a Fund’s investment
adviser or subadviser or its affiliates will purchase or sell interests in an investment company sponsored or managed by it at prices
and at times more favorable than those at which the Fund does so.
In
October 2020, the SEC adopted certain regulatory changes and took other actions related to the ability of an investment company to invest
in the securities of another investment company. These changes include, among other things, the rescission of certain SEC exemptive orders
permitting investments in excess of the statutory limits and the withdrawal of certain related SEC staff no-action letters, and the adoption
of Rule 12d1-4 under the 1940 Act. Rule 12d1-4, which became effective on January 19, 2021, will permit the Funds to invest in other investment
companies beyond the statutory limits, subject to certain conditions. The rescission of the applicable exemptive orders and the withdrawal
of the applicable no-action letters became effective on January 19, 2022. The impact of these regulatory changes on the Funds is still
uncertain.
Partly Paid Securities
These
securities are paid for on an installment basis. A partly paid security trades net of outstanding installment payments—the buyer
“takes over payments.” The buyer’s rights are typically restricted until the security is fully paid. If the value
of a partly paid security declines before a Fund finishes paying for it, the Fund will still owe the payments, but may find it hard to
sell and as a result will incur a loss.
Portfolio Management
A
Fund’s investment adviser or subadviser uses trading as a means of managing the portfolio of the Fund in seeking to achieve its
investment objective. Transactions will occur when a Fund’s investment adviser or subadviser believes that the trade, net of transaction
costs, will improve interest income or capital appreciation potential, or will lessen capital loss potential. Whether the goals discussed
above will be achieved through trading depends on the Fund’s investment adviser’s
or subadviser’s ability
to evaluate particular securities and anticipate relevant market factors, including interest rate trends and variations from such trends.
If such evaluations and expectations prove to be incorrect, a Fund’s income or capital appreciation may be reduced and its capital
losses may be increased. In addition, high turnover in a Fund could result in additional brokerage commissions to be paid by that Fund.
See also “Taxation” below.
The
Funds may pay brokerage commissions to affiliates of one or more affiliates of the Funds’ investment adviser or subadvisers.
Portfolio Turnover
Portfolio
turnover involves brokerage commissions and other transaction costs, which the relevant Fund will bear directly, and could involve realization
of taxable capital gains. To the extent that portfolio turnover results in realization of net short-term capital gains, such gains ordinarily
are treated as ordinary income when distributed to shareholders. Portfolio turnover rates are shown in the “Fees and Expenses of
the Fund” and “Financial Highlights” sections of the Prospectus. See the “Taxation” and “Portfolio
Transactions and Brokerage” sections in this SAI for additional information.
Real Estate-Related Investments; Real Estate Investment
Trusts
Factors
affecting the performance of real estate may include excess supply of real property in certain markets, changes in zoning laws, environmental
regulations and other governmental action, completion of construction, changes in real estate value and property taxes, losses from casualty,
condemnation, or natural disaster, sufficient level of occupancy, adequate rent to cover operating expenses, and local and regional markets
for competing assets. The performance of real estate may also be affected by changes in interest rates, prudent management of insurance
risks, and social and economic trends.
Real
estate investment trusts (“REITs”) that may be purchased by a Fund include equity REITs, which own real estate directly,
mortgage REITs, which make construction, development, or long-term mortgage loans, and hybrid REITs, which share characteristics of equity
REITs and mortgage REITs. Equity REITs will be affected by, among other things, changes in the value of the underlying property owned
by the REITs, while mortgage REITs will be affected by, among other things, the value of the properties to which they have extended credit.
REITs are dependent upon the skill of each REIT’s management.
A
Fund could, under certain circumstances, own real estate directly as a result of a default on debt securities it owns or from an in-kind
distribution of real estate from a REIT. Risks associated with such ownership could include potential liabilities under environmental
laws and the costs of other regulatory compliance. If a Fund has rental income or income from the direct disposition of real property,
the receipt of such income may adversely affect its ability to retain its tax status as a regulated investment company and thus its ability
to avoid taxation on its income and gains distributed to its shareholders. REITs are also subject to substantial cash flow dependency,
defaults by borrowers, self-liquidation, and the risk of failing to qualify for favorable tax treatment under the Code and/or to maintain
exempt status under the 1940 Act. If a Fund invests in REITs, investors would bear not only a proportionate share of the expenses of that
Fund, but also, indirectly, expenses of the REITs.
Repurchase Agreements
A
repurchase agreement is a contract under which a Fund acquires a security for a relatively short period (usually not more than one week)
subject to the obligation of the seller to repurchase and the Fund to resell such security at a fixed time and price (representing the
Fund’s cost plus interest). Repurchase agreements may also be viewed as loans made by a Fund which are collateralized by the securities
subject to repurchase. The investment adviser or subadviser will monitor such transactions to ensure that the value of the underlying
securities will be at least equal at all times to the total amount of the repurchase obligation, including the interest factor. If the
seller defaults, a Fund could realize a loss on the sale of the underlying security to the extent that the proceeds of the sale including
accrued interest are less than the resale price provided in the agreement including interest. In addition, if the seller should be involved
in bankruptcy or insolvency proceedings, the Fund may incur delay and costs in selling the underlying security or may suffer a loss of
principal and interest if the Fund is treated as an unsecured creditor and required to return the underlying collateral to the seller’s
estate. There is no limit on the Funds’ investment in repurchase agreements.
Restricted Securities
Restricted
securities are subject to legal restrictions on their sale. Difficulty in selling securities may result in a loss or be costly to a Fund.
Restricted securities generally can be sold in privately negotiated transactions, pursuant to an
exemption from registration
under the 1933 Act, or in a registered public offering. Where registration is required, the holder of a registered security may be obligated
to pay all or part of the registration expense and a considerable period may elapse between the time it decides to seek registration and
the time it may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions
were to develop, the holder might obtain a less favorable price than prevailed when it decided to seek registration of the security.
Reverse Repurchase Agreements and Treasury Rolls
A
Fund may enter into reverse repurchase agreements or Treasury rolls with banks and broker-dealers to enhance return. Reverse repurchase
agreements involve sales by a Fund of portfolio securities concurrently with an agreement by the Fund to repurchase the same securities
at a later date at a fixed price (typically equal to the original sale price plus interest). During the reverse repurchase agreement period,
the Fund continues to receive principal and interest payments on the securities and also has the opportunity to earn a return on the purchase
price received by it from the counterparty. Similarly, in a Treasury roll transaction, a Fund sells a Treasury security and simultaneously
enters into an agreement to repurchase the security from the buyer at a later date, at the original sale price plus interest. The repurchase
price is typically adjusted to provide the Fund the economic benefit of any interest that accrued on the Treasury security during the
term of the transaction. The Fund may use the purchase price received by it to earn additional return during the term of the Treasury
roll transaction. Reverse repurchase agreements and Treasury rolls are similar to a secured borrowing of a Fund and generally create investment
leverage. A Fund might lose money both on the security subject to the reverse repurchase agreement and on the investments it makes with
the proceeds of the reverse repurchase agreement. If the counterparty in such a transaction files for bankruptcy or becomes insolvent,
a Fund’s use of the proceeds from the sale of its securities may be restricted or forfeited, and the counterparty may fail to return/resell
the securities in question to the Fund. A Fund may enter into reverse repurchase agreements or Treasury rolls without limit up to the
amount permitted under applicable law. A Fund’s ability to enter into reverse repurchase agreements may be impacted as the Fund
comes into compliance with Rule 18f-4 under the 1940 Act.
Securities Lending
A
Fund, with the exception of the U.S. Government Money Market Fund, may lend its portfolio securities. The Fund expects that, in connection
with any securities loan: (1) the loan will be secured continuously by collateral consisting of U.S. Government securities, cash,
or cash equivalents adjusted daily to have market value at least equal to the current market value of the securities loaned; (2) the
Fund will have the right at any time on reasonable notice to call the loan and regain the securities loaned; (3) the Fund will receive
an amount equal to any interest or dividends paid on the loaned securities; and (4) the aggregate market value of securities the
Fund has loaned will not at any time exceed one-third (or such other lower limit as the Board may establish) of the total assets of the
Fund. The risks in lending portfolio securities, as with other extensions of credit, include a possible delay in recovering the loaned
securities or a possible loss of rights in the collateral should the borrower fail financially. Regulations adopted by global prudential
regulators that are now in effect require certain bank-regulated counterparties and certain of their affiliates to include in certain
financial contracts, including many securities lending agreements, terms that delay or restrict the rights of counterparties, such as
the Funds, to terminate such agreements, foreclose upon collateral, exercise other default rights, or restrict transfers of credit support
in the event that the counterparty and/or its affiliates are subject to certain types of resolution or insolvency proceedings. It is possible
that these new requirements, as well as potential additional government regulation and other developments in the market, could adversely
affect a Fund’s ability to terminate existing securities lending agreements or to realize amounts to be received under such agreements.
Voting rights or rights to consent with respect to the loaned securities pass to the borrower, although a Fund would retain the right
to call the loans at any time on reasonable notice, and may do so in order that the securities may be voted in an appropriate case.
A
Fund’s securities loans will be made by a third-party agent appointed by the Fund, although the agent is only permitted to make
loans to borrowers previously approved by the Fund’s Board. Any cash collateral securing a loan of securities by a Fund will typically
be invested by the agent. The investment of the collateral will be at the risk and for the account of the Fund. The earnings on the investment
of collateral will be split between the Fund and the agent; as a result, the agent may have an incentive to invest the collateral in riskier
investments than if it were not to share in the earnings. It is possible that any loss on the investment of collateral for a securities
loan will exceed (potentially by a substantial amount) the Fund’s earnings on the loan.
Short Sales
A
short sale is a transaction in which a fund sells a security it does not own in anticipation that the market price of that security will
decline. When a fund makes a short sale on a security, it must borrow the security sold short and deliver it to a
broker dealer through which
it made the short sale as collateral for its obligation to deliver the security upon the conclusion of the sale. A fund may have to pay
a fee to borrow particular securities and is often obligated to pay over any accrued interest and dividends on such borrowed securities.
If the price of the security sold short increases between the time of the short sale and the time a fund replaces the borrowed security,
a fund will incur a loss, which could be unlimited, in cases where a fund is unable for whatever reason to close out its short position;
conversely, if the price declines, a fund will realize a capital gain. Any gain will be decreased, and any loss increased, by the transaction
costs described above. The successful use of short selling may be adversely impacted by imperfect correlation between movements in the
price of the security sold short and the securities being hedged.
Selling
short “against-the-box” refers to the sale of securities actually owned by the seller but held in safekeeping. In such short
sales, while the short position is open, a fund must own an equal amount of such securities, or by virtue of ownership of securities have
the right, without payment of further consideration, to obtain an equal amount of securities sold short. Short sales against-the-box generally
produce current recognition of gain (but not loss) for federal income tax purposes on the constructive sale of securities “in the
box” prior to the time the short position is closed out.
Terrorism, War, Natural Disasters, and Epidemics
Terrorism,
war, and related geopolitical events (and their aftermath) have led, and in the future may lead, to increased short-term market volatility
and may have adverse long-term effects on U.S. and world economies and markets generally. Likewise, natural and environmental disasters,
such as, for example, earthquakes, fires, floods, hurricanes, tsunamis, and weather-related phenomena generally, as well as widespread
epidemics, can be highly disruptive to economies and markets, adversely affecting individual companies, sectors, industries, markets,
currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Funds’
investments. For example, the continuing spread of an infectious respiratory illness caused by the novel strain of coronavirus (known
as COVID-19) has caused volatility, severe market dislocations and liquidity constraints in many markets, and may adversely affect the
Funds’ investments and operations. The transmission of COVID-19 and efforts to contain its spread have resulted in travel restrictions
and disruptions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in
healthcare service preparation and delivery, quarantines, event and service cancellations or interruptions, and disruptions to business
operations (including staff reductions), supply chains, and consumer activity, as well as general concern and uncertainty that has negatively
affected the economic environment.
The
COVID-19 virus has negatively affected, and will likely continue to affect negatively, the global economy, the economies of many countries,
and the financial performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways.
In addition, actions taken by governmental and quasi-governmental authorities and regulators throughout the world in response to the COVID-19
outbreak, including significant fiscal and monetary policy changes, have affected, and likely will continue to affect, the values, volatility,
and liquidity of securities or other assets. The effects of the outbreak in developing or emerging market countries may be greater due
to less established health care systems, financial systems and institutions, and government institutions. The COVID-19 pandemic and its
effects, as well as efforts to contain its spread, have lasted, and will likely continue for an extended period of time, and in each case
have resulted in, and could continue to result in, among other things, significant market volatility, exchange trading suspensions and
closures, and higher default rates, and they may result in future significant adverse effects, such as declines in global financial markets
and a substantial economic downturn or recession. The foregoing could have a significant adverse effect on a Fund’s performance
and have the potential to impair a Fund’s ability to maintain operational standards (such as with respect to satisfying redemption
requests), disrupt the operations of a Fund’s service providers, adversely affect the values and liquidity of a Fund’s investments,
and negatively impact a Fund’s performance and a shareholder’s investment in a Fund. Other infectious illness outbreaks,
epidemics or pandemics that may arise in the future, could adversely affect the economies of many nations or the entire global economy,
the financial performance of individual issuers, borrowers and sectors, and the health of the markets generally in potentially significant
and unforeseen ways.
Trade Claims
A
Fund may purchase trade claims and other obligations of, or claims against, companies in bankruptcy proceedings. Trade claims are claims
for payment by vendors and suppliers for products and services previously furnished to the companies in question. Other claims may include,
for example, claims for payment under financial or derivatives obligations. Trade claims may be purchased directly from the creditor or
through brokers or from dealers, and are typically purchased at a significant discount from their face amounts. There is no guarantee
that a debtor will ever be able to satisfy its obligations on such claims. Trade claims are subject to the risks associated with low-quality
and distressed obligations.
Trust Preferred Securities
Trust
preferred securities are typically issued by corporations, generally in the form of interest bearing notes with preferred securities characteristics,
or by an affiliated trust, generally in the form of beneficial interests in subordinated debentures or similarly structured securities.
Trust preferred securities may pay interest at either fixed or adjustable rates. Trust preferred securities may be issued with a final
maturity date, or may be perpetual.
Trust
preferred securities are typically junior and fully subordinated liabilities of an issuer and benefit from a guarantee that is junior
and fully subordinated to the other liabilities of the guarantor. In addition, trust preferred securities typically permit an issuer to
defer the payment of income for five years or more without triggering an event of default. Because of their subordinated position
in the capital structure of an issuer, the ability to defer payments for extended periods of time without default consequences to the
issuer, and certain other features (such as restrictions on common dividend payments by the issuer or ultimate guarantor when full cumulative
payments on the trust preferred securities have not been made), these trust preferred securities are often treated as close substitutes
for traditional preferred securities, both by issuers and investors.
Many
trust preferred securities are issued by trusts or other special purpose entities established by operating companies and are not a direct
obligation of an operating company. At the time the trust or special purpose entity sells such preferred securities to investors, it purchases
debt of the operating company (with terms comparable to those of the trust or special purpose entity securities). The trust or special
purpose entity is generally required to be treated as transparent for Federal income tax purposes, and the holders of the trust preferred
securities are treated for tax purposes as owning beneficial interests in the underlying debt of the operating company. Accordingly, payments
on the trust preferred securities are treated as interest rather than dividends for Federal income tax purposes. The trust or special
purpose entity in turn would be a holder of the operating company’s debt and would typically be subordinated to other classes of
the operating company’s debt.
U.S. Government Securities
The
Funds may invest in U.S. Government securities. These include obligations issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities. Payment of principal and interest on U.S. Government obligations (i) may be backed by the full faith and credit
of the United States (as with U.S. Treasury obligations and GNMA certificates) or (ii) may be backed solely by the issuing or guaranteeing
agency or instrumentality itself (as with FNMA notes). In the latter case, the investor must look principally to the agency or instrumentality
issuing or guaranteeing the obligation for ultimate repayment and may not be able to assert a claim against the United States if the agency
or instrumentality does not meet its commitment. Such securities may involve increased risk of loss of principal and interest compared
to government debt securities that are backed by the full faith and credit of the United States. Such agency or instrumentality may be
privately owned. There can be no assurance that the U.S. Government would provide financial support to its agencies or instrumentalities
where it is not obligated to do so. U.S. Government securities are subject to interest rate risk, and, in some cases, may be subject to
credit risk. Although FHLMC and FNMA are now under conservatorship by the Federal Housing Finance Agency, and are benefiting from a liquidity
backstop of the U.S. Treasury, no assurance can be given that these initiatives will be successful. As a general matter, the value of
debt instruments, including U.S. Government obligations, declines when market interest rates increase and rises when market interest rates
decrease. Certain types of U.S. Government obligations are subject to fluctuations in yield or value due to their structure or contract
terms.
Utility Industries
Risks
that are intrinsic to the utility industries include difficulty in obtaining an adequate return on invested capital, difficulty in financing
large construction programs during an inflationary period, restrictions on operations and increased cost and delays attributable to environmental
considerations and regulation, difficulty in raising capital in adequate amounts on reasonable terms in periods of high inflation and
unsettled capital markets, technological innovations that may render existing plants, equipment, or products obsolete, the potential impact
of natural or man-made disasters, increased costs and reduced availability of certain types of fuel, occasionally reduced availability
and high costs of natural gas for resale, the effects of energy conservation, the effects of a national energy policy and lengthy delays
and greatly increased costs and other problems associated with the design, construction, licensing, regulation, and operation of nuclear
facilities for electric generation, including, among other considerations, the problems associated with the use of radioactive materials
and the disposal of radioactive wastes. There are substantial differences among the regulatory practices and policies of various jurisdictions,
and any given regulatory agency may make major shifts in policy from time to time. There is no assurance that regulatory authorities will,
in the future, grant rate increases or that such increases will be adequate to
permit the payment of dividends
on common stocks issued by a utility company. Additionally, existing and possible future regulatory legislation may make it even more
difficult for utilities to obtain adequate relief. Certain of the issuers of securities held in the Fund’s portfolio may own or
operate nuclear generating facilities. Governmental authorities may from time to time review existing policies and impose additional requirements
governing the licensing, construction and operation of nuclear power plants. Prolonged changes in climatic conditions can also have a
significant impact on both the revenues of an electric and gas utility as well as the expenses of a utility, particularly a hydro-based
electric utility.
Utility
companies in the United States and in foreign countries are generally subject to regulation. In the United States, most utility companies
are regulated by state and/or federal authorities. Such regulation is intended to ensure appropriate standards of service and adequate
capacity to meet public demand. Generally, prices are also regulated in the United States and in foreign countries with the intention
of protecting the public while ensuring that the rate of return earned by utility companies is sufficient to allow them to attract capital
in order to grow and continue to provide appropriate services. There can be no assurance that such pricing policies or rates of return
will continue in the future.
The
nature of regulation of the utility industries continues to evolve both in the United States and in foreign countries. In recent years,
changes in regulation in the United States increasingly have allowed utility companies to provide services and products outside their
traditional geographic areas and lines of business, creating new areas of competition within the industries. In some instances, utility
companies are operating on an unregulated basis. Because of trends toward deregulation and the evolution of independent power producers
as well as new entrants to the field of telecommunications, non-regulated providers of utility services have become a significant part
of their respective industries. The investment adviser or subadviser believes that the emergence of competition and deregulation will
result in certain utility companies being able to earn more than their traditional regulated rates of return, while others may be forced
to defend their core business from increased competition and may be less profitable. Reduced profitability, as well as new uses of funds
(such as for expansion, operations, or stock buybacks) could result in cuts in dividend payout rates. The investment adviser or subadviser
seeks to take advantage of favorable investment opportunities that may arise from these structural changes. Of course, there can be no
assurance that favorable developments will occur in the future.
Foreign
utility companies are also subject to regulation, although such regulations may or may not be comparable to those in the United States.
Foreign utility companies may be more heavily regulated by their respective governments than utilities in the United States and, as in
the United States, generally are required to seek government approval for rate increases. In addition, many foreign utilities use fuels
that may cause more pollution than those used in the United States, which may require such utilities to invest in pollution control equipment
to meet any proposed pollution restrictions. Foreign regulatory systems vary from country to country and may evolve in ways different
from regulation in the United States.
A
Fund’s investment policies are designed to enable it to capitalize on evolving investment opportunities throughout the world. For
example, the rapid growth of certain foreign economies will necessitate expansion of capacity in the utility industries in those countries.
Although many foreign utility companies currently are government-owned, thereby limiting current investment opportunities for a Fund,
the investment adviser or subadviser believes that, in order to attract significant capital for growth, foreign governments are likely
to seek global investors through the privatization of their utility industries. Privatization, which refers to the trend toward investor
ownership of assets rather than government ownership, is expected to occur in newer, faster-growing economies and in mature economies.
Of course, there is no assurance that such favorable developments will occur or that investment opportunities in foreign markets will
increase.
The
revenues of domestic and foreign utility companies generally reflect the economic growth and development in the geographic areas in which
they do business. The investment adviser or subadviser will take into account anticipated economic growth rates and other economic developments
when selecting securities of utility companies.
Zero-Coupon, Step Coupon and Pay-In-Kind Securities
Other
debt securities in which the Funds may invest include zero coupon, step coupon, and pay-in-kind instruments. Zero coupon bonds are issued
and traded at a discount from their face value. They do not entitle the holder to any periodic payment of interest prior to maturity.
Step coupon bonds 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. The discount from the face amount or par value depends on the time remaining until
cash payments begin, prevailing interest rates, liquidity of the security, and the perceived credit quality of the issue. Pay-in-kind
securities are debt or preferred stock securities that require or permit payment of interest in the form of additional securities. Payment-in-kind
securities allow the issuer to avoid or delay the need to generate cash to meet current interest payments and, as a result, may involve
greater risk than securities that pay interest currently or in cash.
Current
federal income tax law requires holders of zero coupon and step coupon securities to report the portion of the original issue discount
on such securities that accrues during a given year as interest income, even though holders receive no cash payments of interest during
the year. In order to qualify as a regulated investment company under the Code, a Fund must distribute its investment company taxable
income, including the original issue discount accrued on zero coupon or step coupon bonds. Because a Fund will not receive cash payments
on a current basis in respect of accrued original issue discount on zero coupon or step coupon bonds during the period before interest
payments begin, and may not receive cash payments on payment-in-kind securities until maturity or redemption, in some years that
Fund may have to distribute cash obtained from other sources in order to satisfy the distribution requirements under the Code. A Fund
might obtain such cash from selling other portfolio holdings which might cause a Fund to incur capital gains or losses on the sale. Additionally,
these actions are likely to reduce the assets to which Fund expenses could be allocated and to reduce the rate of return for a Fund. In
some circumstances, such sales might be necessary in order to satisfy cash distribution requirements even though investment considerations
might otherwise make it undesirable for a Fund to sell the securities at the time.
Generally,
the market prices of zero coupon, step coupon, and pay-in-kind securities are more volatile than the prices of securities that pay interest
periodically and in cash and are likely to respond to changes in interest rates to a greater degree than other types of debt securities.
DISCLOSURE OF PORTFOLIO HOLDINGS
The
Trustees of the Funds, including a majority of Trustees who are not “interested persons” of the Funds (as defined in the
1940 Act), have adopted policies and procedures with respect to the disclosure of the Funds’ portfolio holdings. These policies
and procedures generally provide that no disclosure of portfolio holdings information may be made unless publicly disclosed as described
below or made as part of the daily investment activities of the Funds to the Funds’ investment adviser, subadviser(s), as applicable,
or any of their affiliates who provide services to the Funds, which by explicit agreement or by virtue of their respective duties to the
Funds, are required to maintain confidentiality of the information disclosed. Certain limited exceptions pursuant to the Funds’
policies and procedures are described below. The Funds’ portfolio holdings information may not be disseminated for compensation.
Any exceptions to the Funds’ policies and procedures may be made only if approved in writing by the Funds’ Principal Executive
Officer and the Funds’ Chief Compliance Officer as being in the best interests of the relevant Fund, and then only if the recipients
are subject to a written confidentiality agreement specifying that the relevant Fund’s portfolio holdings information is the confidential
property of the Fund and may not be used for any purpose except in connection with the provision of services to the Fund and, in particular,
that such information may not be traded upon. Any such exceptions must be reported to the Funds’ Board at its next regularly scheduled
meeting. It was determined that these policies and procedures are reasonably designed to ensure that disclosure of portfolio holdings
information is in the best interests of a Fund’s shareholders and appropriately address the potential for conflicts between the
interests of a Fund’s shareholders, on the one hand, and those of MML Advisers or any affiliated person of the Fund or MML Advisers
on the other.
Acting
pursuant to the policies and procedures adopted by the Trustees of the Funds, the Funds’ investment adviser and subadviser(s),
as applicable, are primarily responsible for compliance with these policies and procedures, which includes maintaining such internal informational
barriers (e.g., “Chinese walls”) as each believes are reasonably necessary for preventing the unauthorized disclosure of
portfolio holdings information. Pursuant to Rule 38a-1 under the 1940 Act, the Trustees will periodically (as needed, but at least
annually) receive reports from the Funds’ Chief Compliance Officer regarding the operation of these policies and procedures, including
a confirmation by the Chief Compliance Officer that the investment adviser’s and the subadviser(’s/s’), as applicable,
policies, procedures, and/or processes are reasonably designed to comply with the Funds’ policies and procedures in this regard.
Public Disclosures
The
Funds’ portfolio holdings are currently disclosed to the public through required filings with the SEC and as described below. The
Funds file their portfolio holdings with the SEC as of the end of the second and fourth quarters of the Funds’ fiscal year on Form
N-CSR (with respect to each semiannual period and annual period) no later than 70 days after the end of the applicable quarter. In addition,
monthly reports of all of the Funds’ portfolio holdings (with the exception of the U.S. Government Money Market Fund) are filed
quarterly with the SEC on Form N-PORT no later than 60 days after the end of each quarter of the Funds’ fiscal year, and the monthly
report for the third month of each quarter will be made publicly available by the SEC upon filing. Shareholders may obtain the Funds’
Form N-CSR and N-PORT filings on the SEC’s website at http://www.sec.gov. In addition, the Funds’ annual and semiannual
reports and complete schedule of portfolio holdings from their filings on Form N-PORT for the first and third quarters of each fiscal
year are made available
to shareholders
at https://www.massmutual.com/funds after the end of the applicable quarter. The Funds’ annual and semiannual reports are also
mailed to shareholders after the end of the applicable quarter. In addition, the U.S. Government Money Market Fund files its portfolio
holdings with the SEC for each month on Form N-MFP no later than the fifth business day after the end of the applicable month. The information
in Form N-MFP is immediately made publicly available by the SEC after it has been filed.
The
Funds’ (other than the U.S. Government Money Market Fund) most recent portfolio holdings as of the end of each quarter are available
on https://www.massmutual.com/funds no earlier than 15 calendar days after the end of each quarter. Because such information is updated
quarterly, it will generally be available for viewing for approximately three months after the posting. As required by Rule 2a-7 under
the 1940 Act, the U.S. Government Money Market Fund’s monthly portfolio holdings and certain other information about the Fund,
including its dollar-weighted average maturity and dollar-weighted average life, are available on https://www.massmutual.com/funds within
five business days after the end of each month. Such information will generally be available for viewing for at least six months after
the posting.
A
Fund’s portfolio holdings may also be made available on https://www.massmutual.com/funds at other times as approved in writing
by the Funds’ Principal Executive Officer and the Funds’ Chief Compliance Officer as being in the best interests of the
relevant Fund.
Other Disclosures
Acting
pursuant to the policies and procedures adopted by the Trustees of the Funds, and to the extent permitted under the 1933 and 1940 Acts,
the Funds, the Funds’ investment adviser, and the Funds’ subadviser(s), as applicable, may distribute (or authorize the
Funds’ custodian to distribute) information regarding the Funds’ portfolio holdings more frequently than as provided to
the public on a confidential basis to various service providers and others who require such information in order to fulfill their contractual
duties with respect to the routine investment activities or operations of the Funds. Such service providers or others must, by explicit
agreement or by virtue of their respective duties to the Funds, be required to maintain confidentiality of the information disclosed.
These service providers include, but are not limited to, the Funds’ custodian (State Street Bank and Trust Company (“State
Street”)), the Funds’ sub-administrators (State Street and MassMutual), the Funds’ independent registered public
accounting firm (Deloitte & Touche LLP), filing agents, legal counsel (Ropes & Gray LLP), financial printer (Toppan Merrill, LLC),
any portfolio liquidity classification vendor, any proxy voting service employed by the Funds, MML Advisers or any of the Funds’
subadviser(s), as applicable, providers of portfolio analysis tools, any pricing services employed by the Funds, and any providers of
transition management services. The Funds or the Funds’ investment adviser may also periodically provide non-public information
about their portfolio holdings to rating and ranking organizations, such as Lipper Inc. and Morningstar Inc., in connection with those
firms’ research on and classification of the Funds and in order to gather information about how the Funds’ attributes (such
as volatility, turnover, and expenses) compared with those of peer funds.
The
Funds, the Funds’ investment adviser, or the Funds’ subadviser(s), as applicable, may distribute (or authorize the Funds’
custodian to distribute) information regarding the Funds’ portfolio holdings more frequently than as provided to the public on
a confidential basis to various service providers and others who require such information in order to fulfill non-routine legitimate business
activities related to the management, investment activities, or operations of the Funds. Such disclosures may be made only if (i) the
recipients of such information are subject to a written confidentiality agreement specifying that the Funds’ portfolio holdings
information is the confidential property of the Funds and may not be used for any purpose except in connection with the provision of services
to the Funds and, in particular, that such information may not be traded upon; and (ii) if the Funds’ Chief Compliance Officer
(or a person designated by the Chief Compliance Officer) determines that, under the circumstances, disclosure is in the best interests
of the relevant Fund’s shareholders. The information distributed is limited to the information that the Funds, MML Advisers, or
the relevant subadviser(s), as applicable, believes is reasonably necessary in connection with the services provided by the recipient
receiving the information.
INVESTMENT RESTRICTIONS OF THE FUNDS
FUNDAMENTAL INVESTMENT RESTRICTIONS
OF THE FUNDS
The
following is a description of certain fundamental restrictions on investments of the Funds which may not be changed without a vote of
a majority of the outstanding shares of the applicable Fund. Investment restrictions that appear below or elsewhere in this SAI and in
the Prospectus which involve a maximum percentage of securities or assets shall not be considered violated unless an excess over
the percentage occurs immediately after, and is caused by, an acquisition or encumbrance of securities or assets of, or borrowings
by or on behalf of, a Fund. Each Fund may not:
(1)
purchase securities (other
than securities issued, guaranteed or sponsored by the U.S. Government or its agencies or instrumentalities or securities issued by investment
companies) of any one issuer if, as a result, more than 5% of a Fund’s total assets would be invested in the securities of such
issuer or the Fund would own more than 10% of the outstanding voting securities of such issuer, except that up to 25% of the Fund’s
total assets may be invested without regard to these limitations.
(2)
purchase
commodities or commodity contracts, except that a Fund may enter into futures contracts, options, options on futures, and other financial
or commodity transactions to the extent consistent with applicable law and the Fund’s Prospectus and SAI at the time.
(3)
purchase
or sell real estate except that it may dispose of real estate acquired as a result of the ownership of securities or other instruments.
(This restriction does not prohibit a Fund from investing in securities or other instruments backed by real estate or in securities of
companies engaged in the real estate business.)
(4)
participate
in the underwriting of securities, except to the extent that a Fund may be deemed an underwriter under federal securities laws by reason
of acquisitions or distributions of portfolio securities (e.g., investments in restricted securities and instruments subject to such limits
as imposed by the Board and/or law).
(5)
make
loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder (as such statute, rules or regulations may
be amended from time to time) or by guidance regarding or interpretations of, or exemptive orders under, the 1940 Act or the rules or
regulations thereunder published by appropriate regulatory authorities.
(6)
borrow
money or issue senior securities, except to the extent permitted by the 1940 Act, the rules and regulations thereunder (as such statute,
rules or regulations may be amended from time to time) or by guidance regarding or interpretations of, or exemptive orders under, the
1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities.
(7)
concentrate
its investments in any one industry, as determined by the Board, and in this connection a Fund will not acquire securities of companies
in any one industry if, immediately after giving effect to any such acquisition, 25% or more of the value of the total assets of the Fund
would be invested in such industry, with the following exceptions:
(a)
There
is no limitation for securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities.
(b)
There
is no limitation for securities issued by other investment companies.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
OF THE FUNDS
In
addition to the investment restrictions adopted as fundamental policies set forth above, the Funds operate with certain non-fundamental
policies that may be changed by a vote of a majority of the Board members at any time.
In
accordance with such policies, each Fund may not:
(1)
to
the extent required by applicable law at the time, purchase additional securities when its borrowings, less amounts receivable on sales
of portfolio securities, exceed 5% of its total assets.
(2)
sell
securities short, but reserves the right to sell securities short against the box.
(3)
invest
more than 15% of its net assets in illiquid securities (5% of its total assets in the case of the U.S. Government Money Market Fund).
This restriction does not limit the purchase of securities eligible for resale to qualified institutional buyers pursuant to Rule 144A
under the 1933 Act, provided that such securities are determined to be liquid by MML Advisers or the subadviser pursuant to Board approved
guidelines.
(4)
to
the extent that shares of the Fund are purchased or otherwise acquired by other series of the Trust or other series of registered open-end
investment companies in the Trust’s “group of investment companies” (as such term is defined in Section 12(d)(1)(G)
of the 1940 Act), acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance
on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act.
With
respect to limitation (3) above, if there is a lack of trading interest in particular Rule 144A securities, a Fund’s
holdings of those securities may be illiquid, resulting in the possibility of undesirable delays in selling these securities at prices
representing fair value. If, through a change in values, net assets, or other circumstances, the Fund were in a position
where more than 15% of its net
assets was invested in illiquid securities (5% of its total assets in the case of the U.S. Government Money Market Fund), it would take
appropriate orderly steps, as deemed necessary, to protect liquidity.
MANAGEMENT OF THE TRUST
The
Trust has a Board comprised of eight Trustees, a majority of which are not “interested persons” (as defined in the
1940 Act) of the Trust. The Board is generally responsible for the management and oversight of the business and affairs of the Trust.
The Trustees formulate the general policies of the Trust and the Funds, approve contracts, and authorize Trust officers to carry out the
decisions of the Board. To assist them in this role, the Trustees who are not “interested persons” of the Trust, the adviser,
or any subadviser (“Independent Trustees”) have retained independent legal counsel. As investment adviser and subadvisers
to the Funds, respectively, MML Advisers and Barings, BIIL, ICM, Invesco Advisers, TSW, and Wellington Management may be considered part
of the management of the Trust. The Trustees and principal officers of the Trust are listed below together with information on their positions
with the Trust, address, and year of birth, as well as their principal occupations during at least the past five years and their other
current principal business affiliations.
The
Board has appointed an Independent Trustee Chairperson of the Trust. The Chairperson presides at Board meetings and may call a Board or
committee meeting when he or she deems it necessary. The Chairperson participates in the preparation of Board meeting agendas and may
generally facilitate communications among the Trustees, and between the Trustees and the Trust’s management, officers, and independent
legal counsel, between meetings. The Chairperson may also perform such other functions as may be requested by the Board from time to time.
The Board has established the three standing committees described below, and may form working groups or ad hoc committees as needed.
The
Board believes this leadership structure is appropriate because it allows the Board to exercise informed and independent judgment, and
allocates areas of responsibility among committees or working groups of Trustees and the full Board in a manner that enhances effective
oversight. The Board also believes that having a majority of Independent Trustees is appropriate and in the best interest of the Funds’
shareholders. However, in the Board’s opinion, having interested persons serve as Trustees brings both corporate and financial
viewpoints that are significant elements in its decision-making process. The Board reviews its leadership structure at least annually
and may make changes to it at any time, including in response to changes in the characteristics or circumstances of the Trust.
Independent Trustees
|
Allan W. Blair 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1948 Trustee of the Trust since 2012 Trustee
of 115 portfolios in fund complex |
|
|
Trustee of the Trust |
|
Retired;
Trustee (since 2003), MassMutual Select Funds (open-end investment company); Trustee (since 2012), MassMutual Premier Funds (open-end
investment company); Trustee (since 2021), MassMutual Advantage Funds (open-end investment company); Trustee (since 2003), MML Series Investment
Fund (open-end investment company); Trustee (since 2012), MML Series Investment Fund II (open-end investment company).
|
Nabil N. El‑Hage 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1958 Trustee of the Trust since 2003 Trustee
of 116 portfolios in fund complex |
|
|
Trustee of the Trust |
|
Founder
and CEO (since 2018), AEE International LLC (a Puerto Rico LLC); Founder and sole member (2016-2018), PR Academy of Executive Education
LLC (a Puerto Rico LLC); Trustee (since 2012), MassMutual Select Funds (open-end investment company); Trustee (since 2003), Chairman (2006-2012),
MassMutual Premier Funds (open-end investment company); Trustee (since 2021), MassMutual Advantage Funds (open-end investment company);
Trustee (since 2012), MML Series Investment Fund (open-end investment company); Trustee (since 2005), Chairman (2006-2012), MML Series Investment
Fund II (open-end investment company); Chairperson and Trustee (since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
|
Maria D. Furman 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1954 Trustee of the Trust since 2004 Trustee
of 115 portfolios in fund complex |
|
|
Trustee of the Trust |
|
Retired;
Trustee (since 2012), MassMutual Select Funds (open-end investment company); Trustee (since 2004), MassMutual Premier Funds (open-end
investment company); Trustee (since 2021), MassMutual Advantage Funds (open-end investment company); Trustee (since 2012), MML Series Investment
Fund (open-end investment company); Trustee (since 2005), MML Series Investment Fund II (open-end investment company).
|
R. Alan Hunter, Jr. 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1946 Trustee of the Trust since 2012 Trustee
of 115 portfolios in fund complex |
|
|
Trustee of the Trust |
|
Retired;
Trustee (since 2003), Chairperson (2016-2021), MassMutual Select Funds (open-end investment company); Trustee (since 2012), Chairperson
(2016-2021), MassMutual Premier Funds (open-end investment company); Trustee (since 2021), Chairperson (2021), MassMutual Advantage Funds
(open-end investment company); Trustee (since 2003), Chairperson (2016-2021), MML Series Investment Fund (open-end investment company);
Trustee (since 2012), Chairperson (2016-2021), MML Series Investment Fund II (open-end investment company).
|
C. Ann Merrifield 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1951 Trustee of the Trust since 2004 Trustee
of 115 portfolios in fund complex |
|
|
Trustee of the Trust |
|
Retired;
Lead Director (since 2020), Lyra Therapeutics (a clinical-stage specialty pharmaceutical company); Chairperson (since 2017), Director
(since 2014), InVivo Therapeutics (research and clinical-stage biomaterials and biotechnology company); Trustee (since 2012), MassMutual
Select Funds (open-end investment company); Trustee (since 2004), MassMutual Premier Funds (open-end investment company); Trustee (since
2021), MassMutual Advantage Funds (open-end investment company); Trustee (since 2012), MML Series Investment Fund (open-end investment
company); Trustee (since 2005), MML Series Investment Fund II (open-end investment company).
|
Susan B. Sweeney 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1952 Chairperson of the Trust since 2022 Trustee
of the Trust since 2012 Trustee of 118 portfolios in fund complex1
|
|
|
Chairperson and Trustee of the Trust
|
|
Retired;
Trustee (since 2012), Barings Corporate Investors (closed-end investment company); Trustee (since 2012), Barings Participation Investors
(closed-end investment company); Chairperson (since 2022), Trustee (since 2009), MassMutual Select Funds (open-end investment company);
Chairperson (since 2022), Trustee (since 2012), MassMutual Premier Funds (open-end investment company); Chairperson (since 2022), Trustee
(since 2021), MassMutual Advantage Funds (open-end investment company); Chairperson (since 2022), Trustee (since 2009), MML Series Investment
Fund (open-end investment company); Chairperson (since 2022), Trustee (since 2012), MML Series Investment Fund II (open-end
investment company); Trustee (since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
1
Barings
Participation Investors and Barings Corporate Investors are deemed to be a part of the Fund Complex, because they are managed by Barings
LLC, an affiliate of MML Advisers.
Interested Trustees
|
Michael R. Fanning2
1295 State Street Springfield, MA 01111‑0001 Year of birth: 1963
Trustee of the Trust since 2021 Trustee of 115 portfolios in fund complex |
|
|
Trustee of the Trust |
|
Director
(since 2016), MML Advisers; Head of MassMutual U.S. (since 2016), Executive Vice President (2016-2018), Member of MassMutual’s
Executive Leadership Team (since 2008), MassMutual; Trustee (since 2021), MassMutual Select Funds (open-end investment company); Trustee
(since 2021), MassMutual Premier Funds (open-end investment company); Trustee (since 2021), MassMutual Advantage Funds (open-end investment
company); Trustee (since 2021), MML Series Investment Fund (open-end investment company); Trustee (since 2021), MML Series Investment
Fund II (open-end investment company).
|
Clifford M. Noreen3
1295 State Street Springfield, MA 01111‑0001 Year of birth: 1957
Trustee of the Trust since 2021 Trustee of 117 portfolios in fund complex4
|
|
|
Trustee of the Trust |
|
Head
of Global Investment Strategy (since 2019), Deputy Chief Investment Officer (2016-2018), MassMutual; President (2008-2016), Vice Chairman
(2007-2008), Member of the Board of Managers (2006-2016), Managing Director (2000-2016), Barings LLC; Chairman (since 2009), Trustee (since
2005), President (2005-2009), CI Subsidiary Trust and PI Subsidiary Trust; Chairman and Trustee (since 2009), Barings Corporate Investors
(closed-end investment company); Chairman and Trustee (since 2009), Barings Participation Investors (closed-end investment company); Trustee
(since 2021), MassMutual Select Funds (open-end investment company); Trustee (since 2021), MassMutual Premier Funds (open-end investment
company); Trustee (since 2021), MassMutual Advantage Funds (open-end investment company); Trustee (since 2021), MML Series Investment
Fund (open-end investment company); Trustee (since 2021), MML Series Investment Fund II (open-end investment company).
Principal Officers
|
Andrea Anastasio 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1974 Officer of the Trust since 2021 Officer
of 115 portfolios in fund complex |
|
|
Vice President |
|
Vice
President (since 2021), MML Advisers; Head of Investment Management Solutions (since 2021), MassMutual; Head of Investment Strategy and
Research, North America (2019-2021), Head of Investment Product Management (2016-2019), State Street Global Advisors; Vice President (since
2021), MassMutual Select Funds (open-end investment company); Vice President (since 2021), MassMutual Premier Funds (open-end investment
company); Vice President (since 2021), MassMutual Advantage Funds (open-end investment company); Vice President (since 2021), MML Series
Investment Fund (open-end investment company); Vice President (since 2021), MML Series Investment Fund II (open-end investment company).
Mr. Fanning
is an “Interested Person,” as that term is defined in the 1940 Act, as an employee of MassMutual.
Mr. Noreen
is an “Interested Person,” as that term is defined in the 1940 Act, as an employee of MassMutual.
4
Barings
Participation Investors and Barings Corporate Investors are deemed to be a part of the Fund Complex, because they are managed by Barings
LLC, an affiliate of MML Advisers.
|
Andrew M. Goldberg 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1966 Officer of the Trust since 2004 Officer
of 116 portfolios in fund complex |
|
|
Vice President, Secretary,
and Chief Legal Officer of the Trust |
|
Lead
Counsel, Investment Adviser & Mutual Funds (since 2018), Assistant Vice President and Counsel (2004-2018), MassMutual; Secretary (since
2015), Assistant Secretary (2013-2015), MML Advisers; Vice President, Secretary, and Chief Legal Officer (since 2008), Assistant Secretary
(2001-2008), MassMutual Select Funds (open-end investment company); Vice President, Secretary (formerly known as “Clerk”),
and Chief Legal Officer (since 2008), Assistant Clerk (2004-2008), MassMutual Premier Funds (open-end investment company); Vice President,
Secretary, and Chief Legal Officer (since 2021), MassMutual Advantage Funds (open-end investment company); Vice President, Secretary,
and Chief Legal Officer (since 2008), Assistant Secretary (2001-2008), MML Series Investment Fund (open-end investment company);
Vice President, Secretary (formerly known as “Clerk”), and Chief Legal Officer (since 2008), Assistant Clerk (2005-2008),
MML Series Investment Fund II (open-end investment company); Vice President, Secretary, and Chief Legal Officer (since 2021),
MassMutual AccessSM
Pine Point Fund (closed-end investment company).
|
Renee Hitchcock 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1970 Officer of the Trust since 2007 Officer
of 116 portfolios in fund complex |
|
|
Chief Financial Officer and Treasurer of the
Trust |
|
Head
of Mutual Fund Administration (since 2018), Assistant Vice President (2015-2018), MassMutual; Chief Financial Officer and Treasurer (since
2016), Assistant Treasurer (2007-2016), MassMutual Select Funds (open-end investment company); Chief Financial Officer and Treasurer (since
2016), Assistant Treasurer (2007-2016), MassMutual Premier Funds (open-end investment company); Chief Financial Officer and Treasurer
(since 2021), MassMutual Advantage Funds (open-end investment company); Chief Financial Officer and Treasurer (since 2016), Assistant
Treasurer (2007-2016), MML Series Investment Fund (open-end investment company); Chief Financial Officer and Treasurer (since 2016),
Assistant Treasurer (2007-2016), MML Series Investment Fund II (open-end investment company); Chief Financial Officer and Treasurer
(since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
|
Aruna Hobbs 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1960 Officer of the Trust since 2021 Officer
of 115 portfolios in fund complex |
|
|
Vice President |
|
Vice
President (since 2021), MML Advisers; Head of Institutional Investments (since 2014), MassMutual; Vice President (since 2021), MassMutual
Select Funds (open-end investment company); Vice President (since 2021), MassMutual Premier Funds (open-end investment company); Vice
President (since 2021), MassMutual Advantage Funds (open-end investment company); Vice President (since 2021), MML Series Investment
Fund (open-end investment company); Vice President (since 2021), MML Series Investment Fund II (open-end investment company).
|
Paul LaPiana 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1969 Officer of the Trust since 2021 Officer
of 115 portfolios in fund complex |
|
|
President of the Trust |
|
President
(since 2021), MML Advisers; Head of MassMutual U.S. Product (since 2019), Head of Field Management (2016-2019), MassMutual; Executive
Vice President, Head of Field Distribution (2012-2016), MetLife; President (since 2021), MassMutual Select Funds (open-end investment
company); President (since 2021), MassMutual Premier Funds (open-end investment company); President (since 2021), MassMutual Advantage
Funds (open-end investment company); President (since 2021), MML Series Investment Fund (open-end investment company); President (since
2021), MML Series Investment Fund II (open-end investment company).
|
Jill Nareau Robert 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1972 Officer of the Trust since 2008 Officer
of 116 portfolios in fund complex |
|
|
Vice President and Assistant Secretary of
the Trust |
|
Lead
Counsel, Investment Adviser & Mutual Funds (since 2018), Assistant Vice President and Counsel (2009-2018), MassMutual; Assistant Secretary
(since 2015), MML Advisers; Vice President and Assistant Secretary (since 2017), Assistant Secretary (2008-2017), MassMutual Select Funds
(open-end investment company); Vice President and Assistant Secretary (since 2017), Assistant Secretary (formerly known as “Assistant
Clerk”) (2008-2017), MassMutual Premier Funds (open-end investment company); Vice President and Assistant Secretary (since 2021),
MassMutual Advantage Funds (open-end investment company); Vice President and Assistant Secretary (since 2017), Assistant Secretary
(2008-2017), MML Series Investment Fund (open-end investment company); Vice President and Assistant Secretary (since 2017), Assistant
Secretary (formerly known as “Assistant Clerk”) (2008-2017), MML Series Investment Fund II (open-end investment
company); Vice President and Assistant Secretary (since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
|
Douglas Steele 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1975 Officer of the Trust since 2016 Officer
of 115 portfolios in fund complex |
|
|
Vice President of the Trust |
|
Head
of Product Management (since 2021), Vice President (since 2017), Head of Investment Management (2017-2021), Head of Investment Due Diligence
(2016-2017), MML Advisers; Head of Product Management (since 2021), Head of Manager Research (2021), Head of Investment Management (2017-2021),
Assistant Vice President (2013-2017), MassMutual; Vice President (since 2016), MassMutual Select Funds (open-end investment company);
Vice President (since 2016), MassMutual Premier Funds (open-end investment company); Vice President (since 2021), MassMutual Advantage
Funds (open-end investment company); Vice President (since 2016), MML Series Investment Fund (open-end investment company); Vice
President (since 2016), MML Series Investment Fund II (open-end investment company).
|
Philip S. Wellman 1295
State Street Springfield, MA 01111‑0001 Year of birth: 1964 Officer of the Trust since 2007 Officer
of 116 portfolios in fund complex |
|
|
Vice President and Chief
Compliance Officer of the Trust |
|
Vice
President and Chief Compliance Officer (since 2013), MML Advisers; Head of Mutual Funds & RIA Compliance (since 2018), Vice President,
Associate General Counsel, and Chief Compliance Officer (Mutual Funds) (2014-2018), MassMutual; Vice President and Chief Compliance Officer
(since 2007), MassMutual Select Funds (open-end investment company); Vice President and Chief Compliance Officer (since 2007), MassMutual
Premier Funds (open-end investment company); Vice President and Chief Compliance Officer (since 2021), MassMutual Advantage Funds (open-end
investment company); Vice President and Chief Compliance Officer (since 2007), MML Series Investment Fund (open-end investment company);
Vice President and Chief Compliance Officer (since 2007), MML Series Investment Fund II (open-end investment company); Vice
President and Chief Compliance Officer (since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
Each
Trustee of the Trust serves until the next meeting of shareholders called for the purpose of electing Trustees and until the election
and qualification of his or her successor or until he or she dies, resigns, or is removed. Notwithstanding the foregoing, unless the Trustees
determine that it is desirable and in the best interest of the Trust that an exception to the retirement policy of the Trust be made,
a Trustee shall retire and cease to serve as a Trustee upon the conclusion of the calendar year in which such Trustee attains the age
of seventy-five years, however, an interested Trustee of the Trust shall no longer serve as a Trustee if or when they are no longer
an employee of MassMutual or an affiliate. However, any Trustee who attained the age of seventy-five years during 2021 shall retire and
cease to serve as a Trustee on or before June 30, 2022.
The
Chairperson is elected to hold such office for a term of three years or until their successor is elected and qualified to carry out
the duties and responsibilities of their office, or until he or she retires, dies, resigns, is removed, or becomes disqualified, and any
such Chairperson may not serve more than two consecutive terms.
The
President, Treasurer, and Secretary and such other officers as the Trustees may in their discretion from time to time elect are elected
to hold such office until their successor is elected and qualified to carry out the duties and responsibilities of their office, or until
he or she dies, resigns, is removed, or becomes disqualified.
Each
officer and the Chairperson shall hold office at the pleasure of the Trustees.
The
Chairperson of any of the Trust’s Committees shall serve a term of three years or until he or she retires, dies, resigns, is removed,
or becomes disqualified
Additional Information About the Trustees
In
addition to the information set forth above, the following specific experience, qualifications, attributes, and skills apply to each Trustee.
Each Trustee was appointed to serve on the Board based on his or her overall experience and the Board did not identify any specific qualification
as all-important or controlling. The information in this section should not be understood to mean that any of the Trustees is an “expert”
within the meaning of the federal securities laws.
Allan
W. Blair — As a former trustee and audit and compliance committee member
of a large healthcare system, Mr. Blair has experience with financial, regulatory, and operational issues. He also has served as
president and/or CEO of several non-profit and quasi-public organizations for over 30 years. Mr. Blair holds a BA from the University
of Massachusetts at Amherst and a JD from Western New England College School of Law.
Nabil
N. El-Hage — As a former CEO or CFO of various public and private companies,
Mr. El-Hage has experience with financial, regulatory, and operational issues. He has also taught corporate finance at the graduate
level, and has served as a director for more than a dozen public and private companies and as an associate at a venture capital firm.
Mr. El-Hage holds a BS in Electronic Engineering from Yale University and an MBA with high distinction from Harvard University.
Michael
R. Fanning — As an executive and/or director of financial services and
insurance companies, Mr. Fanning has experience with financial, regulatory, and operational issues. He also has served as an audit committee
member for financial services and insurance companies. Mr. Fanning holds a BA in Economics and a BA in Organizational Behavior and Management
from Brown University.
Maria
D. Furman — As a trustee and chairperson or member of the audit and
investment committees of various educational organizations, and as a former managing director, director, and portfolio manager at an investment
management firm, Ms. Furman has experience with financial, regulatory, and operational issues. She also has served as an audit and
investment committee member and a director, treasurer, and investment committee chair for environmental, educational, and healthcare organizations.
Ms. Furman is a CFA charterholder and holds a BA from the University of Massachusetts at Dartmouth.
R.
Alan Hunter, Jr. — As the former chairman of the board of non-profit
organizations and a former director of a publicly traded company, Mr. Hunter has experience with financial, regulatory, and operational
issues. He also held executive positions with a manufacturing company. Mr. Hunter holds a BA from Dickinson College and an MBA from
the University of Pennsylvania.
C.
Ann Merrifield — As a trustee of a healthcare organization, current
and former director of specialty pharmaceutical companies, former biotechnology executive, former partner of a consulting firm, and investment
officer at a large insurance company, Ms. Merrifield has experience with financial, regulatory, and operational issues. She also
has served as an audit committee member for a manufacturing company and currently serves as such for two public life sciences companies.
Ms. Merrifield holds a BA and M. Ed. from the University of Maine and an MBA from Amos Tuck School of Business Administration at
Dartmouth College.
Clifford
M. Noreen — As an executive of financial services companies with over
35 years of investment management experience, a director of several publicly traded and private companies, an investment committee member
of two non-profit organizations, and a director and/or officer of various investment companies and private funds, Mr. Noreen has experience
with financial, regulatory, and operational issues. Mr. Noreen is a Chartered Financial Analyst. He holds a BA from the University of
Massachusetts and an MBA from American International College.
Susan
B. Sweeney — As a former executive and investment officer of a property
and casualty company and a former executive of a financial services company with over 35 years of financial services experience,
Ms. Sweeney has experience with financial, regulatory, and operational issues. From 2010 to 2014, she was Chief Investment Officer
and Senior Vice President of Selective Insurance Company of America. She also served as Chief Investment Officer for the State of
Connecticut Pension Fund from 2002 to 2007, directing a multi-asset portfolio. Ms. Sweeney holds a BS in Business Studies from Connecticut
Board for State Academic Awards, an MBA from Harvard Business School, and a Doctor of Humane Letters from Charter Oak State College.
Board Committees and Meetings
The
full Board met eight times during the fiscal year ended September 30, 2021.
Audit
Committee. The Trust has an Audit Committee, consisting of Trustees who
are not “interested persons” (as defined in the 1940 Act) of the Trust. The Audit Committee, whose members are Messrs.
Blair, El-Hage, and Hunter and Mses. Furman and Merrifield, oversees the Trust’s accounting and financial reporting policies and
practices, its internal controls, and internal controls of certain service providers; oversees the quality and objectivity of the Trust’s
financial statements and the independent audit thereof; evaluates the independence of the Trust’s independent registered public
accounting firm; evaluates the overall performance and compensation of the Chief Compliance Officer; acts as liaison between the Trust’s
independent registered public accounting firm and the full Board; and provides immediate access for the Trust’s independent registered
public accounting firm to report any special matters they believe should be brought to the attention of the full Board. During the fiscal
year ended September 30, 2021, the Audit Committee met four times.
Nominating
and Governance Committee. The Trust has a Nominating and Governance Committee,
consisting of each Trustee who is not an “interested person” of the Trust. The Nominating and Governance Committee meets
at least twice per calendar year. During the fiscal year ended September 30, 2021, the Nominating and Governance Committee met four times.
The Nominating and Governance Committee (a) identifies, and evaluates the qualifications of, individuals to become independent members
of the Funds’ Board in the event that a position currently filled by an Independent Trustee is vacated or created; (b) nominates
Independent Trustee nominees for election or appointment to the Board; (c) sets any necessary standards or qualifications for service
on the Board; (d) recommends periodically to the full Board an Independent Trustee to serve as Chairperson; (e) evaluates at
least annually the independence and overall performance of counsel to the Independent Trustees; (f) annually reviews the compensation
of the Independent Trustees; and (g) oversees board governance issues including, but not limited to, (i) evaluating the board
and committee structure and the performance of Trustees, (ii) considering and addressing any conflicts, (iii) considering the retirement
policies of the Board, and (iv) considering and making recommendations to the Board at least annually concerning the Trust’s directors
and officers liability insurance coverage.
The
Nominating and Governance Committee will consider and evaluate nominee candidates properly submitted by shareholders of the Trust in the
same manner as it considers and evaluates candidates recommended by other sources. The Nominating and Governance Committee may also consider
any other facts and circumstances attendant to such shareholder submission as may be deemed appropriate by the Nominating and Governance
Committee, including, without limitation, the value of the Funds’ securities owned by the shareholder and the length of time such
shares have been held by the shareholder. A recommendation of a shareholder of the Trust must be submitted as described below to be considered
properly submitted for purposes of the Nominating and Governance Committee’s consideration. The shareholders of the Trust must
submit any such recommendation (a “Shareholder Recommendation”) in writing to the Trust’s Nominating and Governance
Committee, to the attention of the Secretary, at the address of the principal executive offices of the Trust, which is 1295 State Street,
Springfield, MA 01111-0001. The Shareholder Recommendation must be delivered to or mailed and received at the principal executive offices
of the Trust at least 60 calendar days before the date of the meeting at which the Nominating and Governance Committee is to select a
nominee for Independent Trustee. The Shareholder Recommendation must include: (i) a statement in writing setting forth: (A) the name,
age, date of birth, phone number, business address, residence address, nationality, and pertinent qualifications of the person recommended
by the shareholder (the “Shareholder Candidate”), including an explanation of why the shareholder believes the Shareholder
Candidate will make a good Trustee; (B) the class or series and number of all shares of the Funds owned of record or beneficially by the
Shareholder Candidate, as reported to such shareholder by the Shareholder Candidate; (C) any other information regarding the Shareholder
Candidate called for with respect to director nominees by paragraphs (a), (d), (e), and (f) of Item 401 of Regulation S-K
or paragraph (b) of Item 22 of Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), adopted by the SEC (or the corresponding provisions of any regulation or rule subsequently adopted by the
SEC or any successor agency applicable to the Funds); (D) any other information regarding the Shareholder Candidate that would be required
to be disclosed if the Shareholder Candidate were a nominee in a proxy
statement
or other filing required to be made in connection with solicitation of proxies for election of trustees or directors pursuant to Section 14
of the Exchange Act and the rules and regulations promulgated thereunder; and (E) whether the recommending shareholder believes that the
Shareholder Candidate is or will be an “interested person” (as defined in Section 2(a)(19) of the 1940 Act)
of the Funds and, if not an “interested person,” information regarding the Shareholder Candidate that will be sufficient
for the Funds to make such determination; (ii) the written and signed consent of the Shareholder Candidate to be named as a nominee, consenting
to (1) the disclosure, as may be necessary or appropriate, of such Shareholder Candidate’s information submitted in accordance
with (i) above; and (2) service as a Trustee if elected; (iii) the recommending shareholder’s name as it appears on the
Funds’ books, the number of all shares of each series of the Funds owned beneficially and of record by the recommending shareholder;
(iv) a description of all arrangements or understandings between the recommending shareholder and the Shareholder Candidate and any other
person or persons (including their names) pursuant to which the Shareholder Recommendation is being made by the recommending shareholder;
and (v) such other information as the Nominating and Governance Committee may require the Shareholder Candidate to furnish as the
Nominating and Governance Committee may reasonably require or deem necessary to determine the eligibility of such Shareholder Candidate
to serve as a Trustee or to satisfy applicable law.
Shareholders
may send other communications to the Trustees by addressing such correspondence directly to the Secretary of the Trust, c/o Massachusetts
Mutual Life Insurance Company, 1295 State Street, Springfield, MA 01111-0001. When writing to the Board, shareholders should identify
themselves, the fact that the communication is directed to the Board, the Fund they are writing about, and any relevant information regarding
their Fund holdings. Except as provided below, the Secretary shall either (i) provide a copy of each shareholder communication to
the Board at its next regularly scheduled meeting or (ii) if the Secretary determines that the communication requires more immediate attention,
forward the communication to the Board promptly after receipt. The Secretary will also provide a copy of each shareholder communication
to the Trust’s Chief Compliance Officer.
The
Secretary may, in good faith, determine that a shareholder communication should not be provided to the Board because it does not reasonably
relate to the Trust or its operations, management, activities, policies, service providers, Board, officers, shareholders, or other matters
relating to an investment in the Funds or is otherwise ministerial in nature (such as a request for Fund literature, share data, or financial
information). The Secretary will provide to the Board on a quarterly basis a summary of the shareholder communications not provided to
the Board by virtue of this paragraph.
Contract
Committee. The Trust has a Contract Committee, consisting of each Trustee
who is not an “interested person” of the Trust. During the fiscal year ended September 30, 2021, the Contract Committee
met twice. The Contract Committee performs the specific tasks assigned to independent trustees by the 1940 Act, including the periodic
consideration of the Trust’s investment management agreements and subadvisory agreements.
Risk Oversight
As
registered investment companies, the Funds are subject to a variety of risks, including, among others, investment risks, financial risks,
compliance risks, and operational risks. The Funds’ investment adviser and administrator, MML Advisers, has primary responsibility
for the Funds’ risk management on a day-to-day basis as part of its overall responsibilities. The Funds’ subadvisers are
primarily responsible for managing investment risk as part of their day-to-day investment management responsibilities, as well as operational
risks at their respective firms. The Funds’ investment adviser and Chief Compliance Officer also assist the Board in overseeing
the significant investment policies of the Funds and monitor the various compliance policies and procedures approved by the Board as a
part of its oversight responsibilities.
In
discharging its oversight responsibilities, the Board considers risk management issues throughout the year by reviewing regular reports
prepared by the Funds’ investment adviser and Chief Compliance Officer, as well as special written reports or presentations provided
on a variety of risk issues, as needed. For example, the investment adviser reports to the Board quarterly on the investment performance
of each of the Funds, the financial performance of the Funds, overall market and economic conditions, and legal and regulatory developments
that may impact the Funds. The Funds’ Chief Compliance Officer, who reports directly to the Board’s Independent Trustees,
provides presentations to the Board at its quarterly meetings and an annual report to the Board concerning (i) compliance matters
relating to the Funds, the Funds’ investment adviser and subadvisers, and the Funds’ other key service providers; (ii) regulatory
developments; (iii) business continuity programs; and (iv) various risks identified as part of the Funds’ compliance program assessments.
The Funds’ Chief Compliance Officer also meets at least quarterly in executive session with the Independent Trustees, and communicates
significant compliance-related issues and regulatory developments to the Audit Committee between Board meetings.
In
addressing issues regarding the Funds’ risk management between meetings, appropriate representatives of the investment adviser
communicate with the Chairperson of the Trust, the Chairperson of the Audit Committee, or the Funds’
Chief Compliance Officer.
As appropriate, the Trustees confer among themselves, or with the Funds’ Chief Compliance Officer, the investment adviser, other
service providers, and independent legal counsel, to identify and review risk management issues that may be placed on the full Board’s
agenda.
The
Board also relies on its committees to administer the Board’s oversight function. The Audit Committee assists the Board in reviewing
with the investment adviser and the Funds’ independent auditors, at various times throughout the year, matters relating to the
annual audits, financial accounting and reporting matters, and the internal control environment at the service providers that provide
financial accounting and reporting for the Funds. The Audit Committee also meets annually with representatives of the investment adviser’s
Corporate Audit Department to review the results of internal audits of relevance to the Funds. This and the Board’s other committees
present reports to the Board that may prompt further discussion of issues concerning the oversight of the Funds’ risk management.
The Board may also discuss particular risks that are not addressed in the committee process.
Share Ownership of Trustees and Officers of the Trust
The
table below sets forth information regarding the Trustees’ beneficial ownership of Fund shares, based on the value of such shares
as of December 31, 2021.
Name of Trustee
|
|
|
The Dollar Range of Equity Securities Beneficially Owned in
the Trust |
|
|
Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen
by Trustee in Family of Investment
Companies |
|
Independent Trustees |
|
|
|
|
|
|
|
Allan W. Blair |
|
|
None |
|
|
over $100,000 |
|
Nabil N. El-Hage |
|
|
None |
|
|
None |
|
Maria D. Furman |
|
|
None |
|
|
None |
|
R. Alan Hunter, Jr. |
|
|
None |
|
|
None |
|
C. Ann Merrifield |
|
|
None |
|
|
None |
|
Susan B. Sweeney |
|
|
None |
|
|
None |
|
Interested Trustees |
|
|
|
|
|
|
|
Michael R. Fanning |
|
|
None |
|
|
None |
|
Clifford M. Noreen |
|
|
None |
|
|
None |
|
The
ownership information shown above does not include units of separate investment accounts that invest in one or more registered investment
companies overseen by a Trustee in the family of investment companies held in a 401(k) plan or amounts held under a deferred compensation
plan that are valued based on “shadow investments” in one or more such registered investment companies. As of December 31,
2021, these amounts were as follows: Mr. Blair, over $100,000; Mr. El-Hage, over $100,000; Mr. Fanning, $10,001-$50,000; Ms. Furman, None;
Mr. Hunter, None; Ms. Merrifield, None; Mr. Noreen, over $100,000; and Ms. Sweeney, None.
As
of January 4, 2022, the Trustees and officers of the Trust, individually and as a group, did not beneficially own outstanding shares of
any of the Funds.
To
the knowledge of the Trust, as of December 31, 2021, the Independent Trustees and their immediate family members did not own beneficially
or of record securities of the investment adviser, subadviser(s), principal underwriter, or sponsoring insurance company of the Funds
or a person (other than a registered investment company) directly or indirectly controlling, controlled by, or under common control with
the investment adviser, subadviser(s), principal underwriter, or sponsoring insurance company of the Funds.
Trustee Compensation
Effective
January 1, 2022, the Trust, on behalf of each Fund, pays each of its Trustees who is not an officer or employee of MassMutual a fee
of $3,960 per quarter plus a fee of $576 per in-person meeting attended plus a fee of $576 for the annual Contract Committee meeting.
The Chairperson of the Board is paid an additional 40% of the quarterly fee, the in-person meeting fee, and the Contract Committee meeting
fee. The Chairpersons of each of the Audit Committee and the Contract Committee are paid an additional 10% of the quarterly fee, the in-person
meeting fee, and the Contract Committee meeting fee. The Chairperson of the Nominating and Governance Committee is paid an additional
7% of the quarterly fee, the in-person meeting fee, and the Contract Committee meeting fee. Such Trustees who serve on the Audit
Committee, other than the Chairperson,
are paid an additional 4% of the quarterly fee, the in-person meeting fee, and the Contract Committee meeting fee. No additional fees
are paid for attending any other committee meetings or any special telephonic meetings. In addition, the Trust reimburses out-of-pocket
business travel expenses to such Trustees. Trustees who are officers or employees of MassMutual receive no fees from the Trust.
During
2021, the Trust, on behalf of each Fund, paid each of its Trustees who was not an officer or employee of MassMutual a fee of $4,200 per
quarter plus a fee of $640 per in-person meeting attended plus a fee of $640 for the annual Contract Committee meeting. The Chairperson
of the Board was paid an additional 40% of the quarterly fee, the in-person meeting fee, and the Contract Committee meeting fee. The Chairpersons
of each of the Audit Committee and the Contract Committee were paid an additional 10% of the quarterly fee, the in-person meeting fee,
and the Contract Committee meeting fee. The Chairperson of the Nominating and Governance Committee was paid an additional 7% of the quarterly
fee, the in-person meeting fee, and the Contract Committee meeting fee. Such Trustees who served on the Audit Committee, other than the
Chairperson, were paid an additional 4% of the quarterly fee, the in-person meeting fee, and the Contract Committee meeting fee. No additional
fees were paid for attending any other committee meetings or any special telephonic meetings. In addition, the Trust reimbursed out-of-pocket
business travel expenses to such Trustees. Trustees who were officers or employees of MassMutual received no fees from the Trust.
The
following table discloses actual compensation paid to Trustees of the Trust during the 2021 fiscal year. The Trust has no pension or retirement
plan, but does have a deferred compensation plan. The plan provides for amounts deferred prior to January 1, 2012, plus interest,
to be credited at a rate of interest equal to that of the U.S. Corporate Bond Index as of January 1, 2012, to be reset every two years.
Amounts deferred after January 1, 2012, plus or minus earnings, are “shadow invested.” These amounts are valued based
on changes in the values of one or more registered investment companies overseen by a Trustee.
Name of Trustee |
|
|
Aggregate Compensation from the Trust
|
|
|
Deferred Compensation and Interest Accrued as part of Fund Expenses
|
|
|
Total Compensation from the Trust and Fund Complex Paid to Trustees
|
|
Allan W. Blair |
|
|
|
$ |
26,962 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
281,404 |
|
|
Nabil N. El-Hage |
|
|
|
$ |
27,581 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
288,904 |
|
|
Michael R. Fanning 1
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
Maria D. Furman |
|
|
|
$ |
25,518 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
263,904 |
|
|
Teresa A. Hassara 2
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
R. Alan Hunter, Jr. |
|
|
|
$ |
32,943 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
353,904 |
|
|
Robert E. Joyal 3
|
|
|
|
$ |
0 |
|
|
|
|
$ |
12,243 |
|
|
|
|
$ |
203,821 |
|
|
C. Ann Merrifield |
|
|
|
$ |
25,518 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
263,904 |
|
|
Clifford M. Noreen 1
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
Susan B. Sweeney |
|
|
|
$ |
26,756 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
403,804 |
|
|
1
Joined
the Board as of January 1, 2021. Each of Mr. Fanning and Mr. Noreen, as an employee of MassMutual, receives no compensation for his role
as a Trustee to the Trust.
2
Resigned
from the Board as of December 31, 2020. Ms. Hassara, as an employee of MassMutual, received no compensation for her role as a Trustee
to the Trust.
3
Retired
from the Board as of December 31, 2020.
CONTROL PERSONS AND PRINCIPAL HOLDERS
OF SECURITIES
As
of January 4, 2022, to the Trust’s knowledge, the following persons owned of record or beneficially 5% or more of the outstanding
shares of the indicated classes of the Funds set forth below. Such ownership may be beneficially held by individuals or entities other
than the owner listed. To the extent that any listed shareholder beneficially owns more than 25% of a Fund, it may be deemed to “control”
such Fund within the meaning of the 1940 Act. The effect of such control may be to reduce the ability of other shareholders of the Fund
to take actions requiring the affirmative vote of holders of a plurality or majority of the Fund’s shares without the approval
of the controlling shareholder.
MassMutual
U.S. Government Money Market Fund1
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
57.09% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
23.08% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual Various Non Qualified RP
P.O. Box 28004
Atlanta, GA 30358 |
|
|
|
|
15.16% |
|
|
MassMutual
Inflation-Protected and Income Fund2
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
36.78% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
11.16% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2020 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
8.95% |
|
|
|
|
|
National Financial Services LLC
499 Washington Boulevard
Jersey City, NJ 07310 |
|
|
|
|
5.30% |
|
|
|
|
|
Great-West Trust Company LLC
FBO Employee Benefits Clients 401K
8515 East Orchard Road, 2T2
Greenwood Village, CO 80111 |
|
|
|
|
5.27% |
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
64.97% |
|
|
|
|
|
Matrix Trust Company
Trustee FBO Formosa Plastics Corporation, U.S.A.
P.O. Box 52129
Phoenix, AZ 85072 |
|
|
|
|
25.08% |
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
70.68% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
16.95% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
State Street Bank Trustee And/Or Custodian
FBO ADP Access Product
1 Lincoln Street
Boston, MA 02111 |
|
|
|
|
10.43% |
|
|
Administrative Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
67.52% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
26.58% |
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
44.65% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
31.51% |
|
|
|
|
|
Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303 |
|
|
|
|
16.82% |
|
|
Class R4 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
30.33% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
26.89% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
22.72% |
|
|
|
|
|
State Street Bank Trustee And/Or Custodian
FBO ADP Access Product
1 Lincoln Street
Boston, MA 02111 |
|
|
|
|
6.67% |
|
|
Class R3 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
53.42% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
38.44% |
|
|
MassMutual Core
Bond Fund3
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
35.68% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
12.45% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2030 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
8.63% |
|
|
|
|
|
National Financial Services LLC
499 Washington Boulevard
Jersey City, NJ 07310 |
|
|
|
|
7.74% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2020 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
6.72% |
|
|
|
|
|
MassMutual 20/80 Allocation Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
5.26% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2025 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
5.13% |
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
87.50% |
|
|
|
|
|
Matrix Trust Company
Trustee FBO Formosa Plastics Corporation, U.S.A.
P.O. Box 52129
Phoenix, AZ 85072 |
|
|
|
|
5.82% |
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
54.03% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
45.84% |
|
|
Administrative Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
74.17% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
25.73% |
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
79.80% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
9.66% |
|
|
|
|
|
Matrix Trust Company
Trustee FBO Kayser-Roth Corporation
P.O. Box 52129
Phoenix, AZ 85072 |
|
|
|
|
6.13% |
|
|
Class R4 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
84.12% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
7.79% |
|
|
|
|
|
Reliance Trust Company
FBO Mutual Omnibus PPL/SMF
1100 Abernathy Road
Atlanta, GA 30328 |
|
|
|
|
5.32% |
|
|
Class R3 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
68.13% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
31.87% |
|
|
MassMutual Diversified
Bond Fund4
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
50.06% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
35.84% |
|
|
Class R5 |
|
|
Reliance Trust Company
FBO STA of Baltimore - ILA
P.O. Box 78446
Atlanta, GA 30357 |
|
|
|
|
61.40% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
15.99% |
|
|
|
|
|
Capinco C/O US Bank NA
1555 N. Rivercenter Drive, Suite 302
Milwaukee, WI 53212 |
|
|
|
|
12.00% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
8.31% |
|
|
Service Class |
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
51.02% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
48.98% |
|
|
Administrative Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
86.16% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
13.84% |
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
58.25% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
24.55% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual Various Non Qualified RP
P.O. Box 28004
Atlanta, GA 30358 |
|
|
|
|
13.57% |
|
|
Class R4 |
|
|
Reliance Trust Company
FBO Mutual Omnibus PPL/SMF
1100 Abernathy Road
Atlanta, GA 30328 |
|
|
|
|
40.36% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
30.76% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
23.97% |
|
|
Class R3 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
75.09% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
24.91% |
|
|
MassMutual Balanced Fund5
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
61.53% |
|
|
|
|
|
The Hartford
One Hartford Plaza
Hartford, CT 06155 |
|
|
|
|
20.02% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
17.07% |
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
96.48% |
|
|
Service Class |
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
62.34% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
36.71% |
|
|
Administrative Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
98.48% |
|
|
Class A |
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
47.34% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
41.60% |
|
|
|
|
|
Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303 |
|
|
|
|
5.74% |
|
|
Class R4 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
49.57% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
42.80% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual Omnibus PPL/SMF
1100 Abernathy Road
Atlanta, GA 30328 |
|
|
|
|
5.69% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class R3 |
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
51.18% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
40.50% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual Omnibus PPL/SMF
1100 Abernathy Road
Atlanta, GA 30328 |
|
|
|
|
8.22% |
|
|
MassMutual Disciplined
Value Fund6
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
78.99% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
15.03% |
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
99.98% |
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
96.19% |
|
|
Administrative Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
97.37% |
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
71.41% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
26.17% |
|
|
Class R4 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
55.20% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
44.80% |
|
|
Class R3 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
67.48% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
24.77% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
7.75% |
|
|
MassMutual Main
Street Fund7
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
Legg Mason Total Advantage 2030 Fund
1100 North Market Street, 9th
Floor
Wilmington, DE 19890 |
|
|
|
|
20.10% |
|
|
|
|
|
Legg Mason Total Advantage 2025 Fund
1100 North Market Street, 9th
Floor
Wilmington, DE 19890 |
|
|
|
|
14.78% |
|
|
|
|
|
Legg Mason Total Advantage 2035 Fund
1100 North Market Street, 9th
Floor
Wilmington, DE 19890 |
|
|
|
|
14.40% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
12.90% |
|
|
|
|
|
Legg Mason Total Advantage 2040 Fund
1100 North Market Street, 9th
Floor
Wilmington, DE 19890 |
|
|
|
|
8.09% |
|
|
|
|
|
Legg Mason Total Advantage 2045 Fund
1100 North Market Street, 9th
Floor
Wilmington, DE 19890 |
|
|
|
|
6.31% |
|
|
|
|
|
Legg Mason Total Advantage 2020 Fund
1100 North Market Street, 9th
Floor
Wilmington, DE 19890 |
|
|
|
|
6.30% |
|
|
|
|
|
Legg Mason Total Advantage 2050 Fund
1100 North Market Street, 9th
Floor
Wilmington, DE 19890 |
|
|
|
|
6.16% |
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
96.97% |
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
100.00% |
|
|
Administrative Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
93.39% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
6.61% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
46.83% |
|
|
|
|
|
Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303 |
|
|
|
|
29.18% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
9.18% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual Various Non Qualified RP
P.O. Box 28004
Atlanta, GA 30358 |
|
|
|
|
7.45% |
|
|
|
|
|
National Financial Services LLC
499 Washington Boulevard
Jersey City, NJ 07310 |
|
|
|
|
6.21% |
|
|
Class R4 |
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
71.30% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
26.77% |
|
|
Class R3 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
68.81% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
18.82% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
12.36% |
|
|
MassMutual Disciplined
Growth Fund8
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
45.35% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
42.32% |
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
84.90% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
13.93% |
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
97.24% |
|
|
Administrative Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
74.23% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
25.77% |
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
48.96% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
45.04% |
|
|
Class R4 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
75.51% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
20.94% |
|
|
Class R3 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
92.30% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
5.68% |
|
|
MassMutual Small
Cap Opportunities Fund9
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
17.22% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
16.88% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
National Financial Services LLC
499 Washington Boulevard
Jersey City, NJ 07310 |
|
|
|
|
14.87% |
|
|
|
|
|
Reliance Trust Company
FBO Salem Trust Eb R/R
P.O. Box 78446
Atlanta, GA 30357 |
|
|
|
|
9.77% |
|
|
|
|
|
Mid Atlantic Trust Company
FBO Popular, Inc. Pr Sav. & Inv. Plan
1251 Waterfront Place, Suite 525
Pittsburgh, PA 15222 |
|
|
|
|
9.42% |
|
|
|
|
|
TIAA, FSB Cust/TTEE
211 North Broadway, Suite 1000
St. Louis, MO 63102 |
|
|
|
|
8.77% |
|
|
|
|
|
SEI Private Trust Company
One Freedom Valley Drive
Oaks, PA 19456 |
|
|
|
|
5.07% |
|
|
|
|
|
The Hartford
One Hartford Plaza
Hartford, CT 06155 |
|
|
|
|
5.02% |
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
70.55% |
|
|
|
|
|
National Financial Services LLC
499 Washington Boulevard
Jersey City, NJ 07310 |
|
|
|
|
21.37% |
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
60.15% |
|
|
|
|
|
John Hancock Trust Company LLC
690 Canton Street, Suite 100
Westwood, MA 02090 |
|
|
|
|
16.28% |
|
|
|
|
|
Reliance Trust Company
FB MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
12.57% |
|
|
Administrative Class |
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
37.36% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
37.27% |
|
|
|
|
|
National Financial Services LLC
499 Washington Boulevard
Jersey City, NJ 07310 |
|
|
|
|
13.98% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
11.37% |
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
78.35% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
9.88% |
|
|
Class R4 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
45.12% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
29.74% |
|
|
|
|
|
Fidelity Investments Institutional Operations Company LLC
FBO Scheurer Hospital Employees Retirement Plan
100 Magellan Way
Covington, KY 41015 |
|
|
|
|
10.81% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
7.27% |
|
|
Class R3 |
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
52.28% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
32.64% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
8.06% |
|
|
MassMutual Global
Fund10
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
40.86% |
|
|
|
|
|
National Financial Services LLC
499 Washington Boulevard
Jersey City, NJ 07310 |
|
|
|
|
21.00% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
19.23% |
|
|
|
|
|
John Hancock Trust Company LLC
690 Canton Street, Suite 100
Westwood, MA 02090 |
|
|
|
|
9.63% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
7.33% |
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
90.42% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
9.36% |
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
68.85% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
29.86% |
|
|
Administrative Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
97.81% |
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
62.72% |
|
|
|
|
|
Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303 |
|
|
|
|
23.65% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
9.97% |
|
|
Class R4 |
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
40.65% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
35.70% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
Reliance Trust Company
FBO MassMutual Ominbus PPL/SMF
1100 Abernathy Road
Atlanta, GA 30328 |
|
|
|
|
16.15% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
6.69% |
|
|
Class R3 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
50.76% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
45.12% |
|
|
MassMutual International
Equity Fund11
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
MassMutual RetireSMARTSM
by JPMorgan 2040 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
17.57% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2030 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
13.77% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2050 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
13.23% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2035 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
9.76% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2045 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
8.51% |
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
8.22% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2025 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
5.26% |
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
98.76% |
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
83.37% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
16.63% |
|
|
Administrative Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
91.95% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
8.05% |
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
47.69% |
|
|
|
|
|
Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303 |
|
|
|
|
40.73% |
|
|
Class R4 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
92.10% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
7.89% |
|
|
Class R3 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
92.35% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
6.06% |
|
|
MassMutual Strategic
Emerging Markets Fund12
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Class I |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
55.93% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2030 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
10.18% |
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2040 Fund
1 Iron Street
Boston, MA 02210 |
|
|
|
|
5.32% |
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
100.00% |
|
|
Class |
|
|
Name and Address of Owner
|
|
|
Percent of Class
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
84.31% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
14.55% |
|
|
Administrative Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
88.79% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
10.14% |
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
78.45% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual Various Non Qualified RP
P.O. Box 28004
Atlanta, GA 30358 |
|
|
|
|
7.71% |
|
|
|
|
|
Reliance Trust Company
FBO MassMutual RP
P.O. Box 48529
Atlanta, GA 30362 |
|
|
|
|
7.32% |
|
|
|
|
|
Millennium Trust Company, LLC
FBO Various Beneficiaries
2001 Spring Road, Suite 700
Oak Brook, IL 60523 |
|
|
|
|
6.52% |
|
|
Class R4 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
91.35% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
6.66% |
|
|
Class R3 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111 |
|
|
|
|
80.78% |
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North
Windsor, CT 06095 |
|
|
|
|
19.13% |
|
|
1
As
of January 4, 2022, Massachusetts Mutual Life Insurance Company (“MassMutual”), 1295 State Street, Springfield, MA 01111,
owned 57.09% of MassMutual U.S. Government Money Market Fund and therefore may be presumed to “control” the Fund, as that
term is defined in the 1940 Act. However, such ownership may be beneficially held by individuals or entities other than MassMutual. MassMutual
is organized under the laws of Massachusetts.
2
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 49.72% of MassMutual
Inflation-Protected
and Income Fund and therefore may be presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such
ownership may be beneficially held by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
3
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 53.05% of MassMutual Core Bond Fund and therefore may
be presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such ownership may be beneficially
held by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
4
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 40.35% of MassMutual Diversified Bond Fund and therefore
may be presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such ownership may be beneficially
held by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
5
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 65.70% of MassMutual Balanced Fund and therefore may be
presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such ownership may be beneficially held
by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
6
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 87.20% of MassMutual Disciplined Value Fund and therefore
may be presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such ownership may be beneficially
held by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
7
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 66.92% of MassMutual Main Street Fund and therefore may
be presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such ownership may be beneficially
held by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
8
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 73.70% of MassMutual Disciplined Growth Fund and therefore
may be presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such ownership may be beneficially
held by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
9
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 53.13% of MassMutual Small Cap Opportunities Fund and
therefore may be presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such ownership may be
beneficially held by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
10
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 71.78% of MassMutual Global Fund and therefore may be
presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such ownership may be beneficially held
by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
11
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 43.05% of MassMutual International Equity Fund and therefore
may be presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such ownership may be beneficially
held by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
12
As
of January 4, 2022, MassMutual, 1295 State Street, Springfield, MA 01111, owned 57.67% of MassMutual Strategic Emerging Markets Fund and
therefore may be presumed to “control” the Fund, as that term is defined in the 1940 Act. However, such ownership may be
beneficially held by individuals or entities other than MassMutual. MassMutual is organized under the laws of Massachusetts.
INVESTMENT ADVISORY AND OTHER SERVICE
AGREEMENTS
Investment Adviser
MML
Advisers, a wholly-owned subsidiary of MassMutual, serves as investment adviser to each Fund pursuant to Investment Management Agreements
with the Trust on behalf of the Funds (each, an “Advisory Agreement”). Under each Advisory Agreement, MML Advisers is obligated
to provide for the management of each Fund’s portfolio of securities, subject to policies established by the Trustees of the Trust
and in accordance with each Fund’s investment objective, policies, and restrictions as set forth herein and in the Prospectus,
and has the right to select subadvisers to the Funds pursuant to an investment subadvisory agreement (the “Subadvisory Agreement”).
The
Advisory Agreement with each Fund may be terminated by the Board or by MML Advisers without penalty: (i) at any time for cause or
by agreement of the parties or (ii) by either party upon sixty days’ written notice to the other party. In
addition, each Advisory Agreement
automatically terminates if it is assigned or if its continuance is not specifically approved at least annually (after its initial 2 year
period) by the Board or by the holders of a majority of the outstanding voting securities of the applicable Fund, and in either case by
a majority of the Trustees who are not parties to the Advisory Agreement or interested persons of any such party. MML Advisers’
liability regarding its investment management obligations and duties is limited to situations involving its willful misfeasance, bad faith,
gross negligence, or reckless disregard of such obligations and duties.
MML
Advisers also serves as investment adviser to: MassMutual Total Return Bond Fund, MassMutual Strategic Bond Fund, MassMutual Select BlackRock
Global Allocation Fund, MassMutual Diversified Value Fund, MassMutual Fundamental Value Fund, MM S&P 500®Index
Fund, MassMutual Equity Opportunities Fund, MassMutual Fundamental Growth Fund, MassMutual Blue Chip Growth Fund, MassMutual Growth Opportunities
Fund, MassMutual Mid Cap Value Fund, MassMutual Small Cap Value Equity Fund, MassMutual Small Company Value Fund, MM S&P®
Mid Cap Index Fund, MM Russell 2000®
Small Cap Index Fund, MassMutual Mid Cap Growth Fund, MassMutual Small Cap Growth Equity Fund, MM MSCI EAFE®
International Index Fund, MassMutual Overseas Fund, MassMutual Select T. Rowe Price International Equity Fund, MassMutual 20/80 Allocation
Fund, MassMutual 40/60 Allocation Fund, MassMutual 60/40 Allocation Fund, MassMutual 80/20 Allocation Fund, MassMutual RetireSMARTSM
by JPMorgan In Retirement Fund, MassMutual RetireSMARTSM
by JPMorgan 2020 Fund, MassMutual RetireSMARTSM
by JPMorgan 2025 Fund, MassMutual RetireSMARTSM
by JPMorgan 2030 Fund, MassMutual RetireSMARTSM
by JPMorgan 2035 Fund, MassMutual RetireSMARTSM
by JPMorgan 2040 Fund, MassMutual RetireSMARTSM
by JPMorgan 2045 Fund, MassMutual RetireSMARTSM
by JPMorgan 2050 Fund, MassMutual RetireSMARTSM
by JPMorgan 2055 Fund, MassMutual RetireSMARTSM
by JPMorgan 2060 Fund, MassMutual Select T. Rowe Price Retirement Balanced Fund, MassMutual Select T. Rowe Price Retirement 2005
Fund, MassMutual Select T. Rowe Price Retirement 2010 Fund, MassMutual Select T. Rowe Price Retirement 2015 Fund, MassMutual Select T.
Rowe Price Retirement 2020 Fund, MassMutual Select T. Rowe Price Retirement 2025 Fund, MassMutual Select T. Rowe Price Retirement 2030
Fund, MassMutual Select T. Rowe Price Retirement 2035 Fund, MassMutual Select T. Rowe Price Retirement 2040 Fund, MassMutual Select
T. Rowe Price Retirement 2045 Fund, MassMutual Select T. Rowe Price Retirement 2050 Fund, MassMutual Select T. Rowe Price Retirement
2055 Fund, MassMutual Select T. Rowe Price Retirement 2060 Fund, MM Equity Asset Fund, MassMutual Select T. Rowe Price Bond Asset Fund,
MassMutual Select T. Rowe Price Emerging Markets Bond Fund, MassMutual Select T. Rowe Price Large Cap Blend Fund, MassMutual Select T.
Rowe Price Limited Duration Inflation Focused Bond Fund, MassMutual Select T. Rowe Price Real Assets Fund, MassMutual Select T. Rowe Price
Small and Mid Cap Blend Fund, and MassMutual Select T. Rowe Price U.S. Treasury Long-Term Index Fund, which are series of MassMutual Select
Funds, an open-end management investment company; MassMutual Short-Duration Bond Fund and MassMutual High Yield Fund, which are series
of the Trust; MassMutual Global Floating Rate Fund, MassMutual Global Credit Income Opportunities Fund, MassMutual Emerging Markets Debt
Blended Total Return Fund, and MassMutual Global Emerging Markets Equity Fund, which are series of MassMutual Advantage Funds, an open-end
management investment company; MML Aggressive Allocation Fund, MML American Funds Core Allocation Fund, MML American Funds Growth Fund,
MML American Funds International Fund, MML Balanced Allocation Fund, MML Blue Chip Growth Fund, MML Conservative Allocation Fund, MML
Equity Income Fund, MML Equity Index Fund, MML Focused Equity Fund, MML Foreign Fund, MML Fundamental Equity Fund, MML Fundamental Value
Fund, MML Global Fund, MML Growth Allocation Fund, MML Growth & Income Fund, MML Income & Growth Fund, MML International Equity
Fund, MML Large Cap Growth Fund, MML Managed Volatility Fund, MML Mid Cap Growth Fund, MML Mid Cap Value Fund, MML Moderate Allocation
Fund, MML Small Cap Growth Equity Fund, MML Small Company Value Fund, MML Small/Mid Cap Value Fund, and MML Total Return Bond Fund, which
are series of MML Series Investment Fund, an open-end management investment company; MML Blend Fund, MML Dynamic Bond Fund, MML Equity
Fund, MML Equity Momentum Fund, MML Equity Rotation Fund, MML High Yield Fund, MML Inflation-Protected and Income Fund, MML iShares®
60/40 Allocation Fund, MML iShares®
80/20 Allocation Fund, MML Managed Bond Fund, MML Short-Duration Bond Fund, MML Small Cap Equity Fund, MML Special Situations Fund, MML
Strategic Emerging Markets Fund, and MML U.S. Government Money Market Fund, which are series of MML Series Investment Fund II, an open-end
management investment company; MassMutual AccessSM
Pine Point Fund, a closed-end management investment company; certain wholly-owned subsidiaries of MassMutual; and various employee benefit
plans and separate investment accounts in which employee benefit plans invest.
The
Trust, on behalf of each Fund, pays MML Advisers an investment advisory fee monthly, at an annual rate based upon the average daily net
assets of that Fund as follows:
Fund |
|
|
|
|
U.S. Government Money Market Fund |
|
|
0.35% on the first $1 billion; and
0.33% on assets over $1 billion |
|
Fund |
|
|
|
|
Inflation-Protected and Income Fund |
|
|
0.38% on the first $350 million; and
0.33% on assets over $350 million |
|
Core Bond Fund |
|
|
0.38% on the first $1.5 billion;
0.33% on the next $500 million; and
0.28% on assets over $2 billion |
|
Diversified Bond Fund |
|
|
0.40% on the first $150 million; and
0.30% on assets over $150 million |
|
Balanced Fund |
|
|
0.48% on the first $300 million; and
0.43% on assets over $300 million |
|
Disciplined Value Fund |
|
|
0.45% on the first $400 million; and
0.40% on assets over $400 million |
|
Main Street Fund |
|
|
0.55% on the first $300 million; and
0.50% on assets over $300 million |
|
Disciplined Growth Fund |
|
|
0.45% on the first $400 million; and
0.40% on assets over $400 million |
|
Small Cap Opportunities Fund |
|
|
0.58% on the first $300 million; and
0.53% on assets over $300 million |
|
Global Fund |
|
|
0.75% on the first $400 million; and
0.70% on assets over $400 million |
|
International Equity Fund |
|
|
0.83% on the first $500 million;
0.78% on the next $500 million; and
0.73% on assets over $1 billion |
|
Strategic Emerging Markets Fund |
|
|
1.00% on the first $350 million; and
0.95% on assets over $350 million |
|
Affiliated Subadviser
Barings
MML
Advisers has entered into Subadvisory Agreements with Barings pursuant to which Barings serves as a subadviser for the U.S. Government
Money Market Fund, Inflation-Protected and Income Fund, Core Bond Fund, and Diversified Bond Fund. These agreements provide that Barings
manage the investment and reinvestment of the assets of the Funds. Barings is located at 300 South Tryon Street, Charlotte, North Carolina
28202. Barings is a wholly-owned subsidiary of MM Asset Management Holding LLC, itself a wholly-owned subsidiary of MassMutual Holding
LLC, a controlled subsidiary of MassMutual. Barings receives a subadvisory fee from MML Advisers, based upon each Fund’s average
daily net assets, at the following annual rates:
|
U.S. Government Money Market Fund |
|
|
0.05% |
|
|
Inflation-Protected and Income Fund |
|
|
0.08% |
|
|
Core Bond Fund |
|
|
0.10% |
|
|
Diversified Bond Fund |
|
|
0.10% |
|
Barings
also provides subadvisory services for the MassMutual Short-Duration Bond Fund and MassMutual High Yield Fund, each of which is a series
of the Trust, for the MassMutual Global Floating Rate Fund, MassMutual Global Credit Income Opportunities Fund, MassMutual Emerging Markets
Debt Blended Total Return Fund, and MassMutual Global Emerging Markets Equity Fund, each of which is a series of MassMutual Advantage
Funds, a registered, open-end investment company for which MML Advisers serves as investment adviser, for the MML High Yield Fund, MML
Inflation-Protected and Income Fund, MML Managed Bond Fund, MML Short-Duration Bond Fund, and MML U.S. Government Money Market Fund,
each of which is a series of MML Series Investment Fund II, a registered, open-end investment company for which MML Advisers serves as
investment adviser, and for the MassMutual AccessSM
Pine Point Fund, a registered, closed-end investment company for which MML Advisers serves as investment adviser.
In
addition, BIIL serves as a sub-subadviser for the Inflation-Protected and Income Fund, Core Bond Fund, and Diversified Bond Fund. BIIL
is a wholly-owned subsidiary of Barings. Barings has entered into sub-subadvisory agreements with BIIL under which, subject to the supervision
of Barings, BIIL is authorized to conduct securities transactions on behalf of each of the Inflation-Protected and Income Fund, Core Bond
Fund, and Diversified Bond Fund. BIIL is located at 20 Old Bailey, London, EC4M 7BF, United Kingdom. BIIL does not receive a fee from
Barings under these sub-subadvisory agreements. BIIL also provides sub-subadvisory services for the MassMutual Short-Duration Bond Fund
and MassMutual High Yield Fund, each of which is a series of the Trust, for the MassMutual Global Floating Rate Fund, MassMutual Global
Credit Income Opportunities Fund, MassMutual Emerging Markets Debt Blended Total Return Fund, and MassMutual Global Emerging Markets Equity
Fund, each of which is a series of MassMutual Advantage Funds, a registered, open-end investment company for which MML Advisers serves
as investment adviser, for the MML High Yield Fund, MML Inflation-Protected and Income Fund, MML Managed Bond Fund, and MML Short-Duration
Bond Fund, each of which is a series of MML Series Investment Fund II, a registered, open-end investment company for which MML Advisers
serves as investment adviser, and for the MassMutual AccessSM
Pine Point Fund, a registered, closed-end investment company for which MML Advisers serves as investment adviser.
Unaffiliated Subadvisers
Invesco Advisers
MML
Advisers has entered into Subadvisory Agreements with Invesco Advisers pursuant to which Invesco Advisers serves as a subadviser for the
Balanced Fund, Main Street Fund, Small Cap Opportunities Fund, Global Fund, and Strategic Emerging Markets Fund. These agreements provide
that Invesco Advisers manage the investment and reinvestment of the assets of the Funds. Invesco Advisers is located at 1555 Peachtree
Street, N.E., Atlanta, Georgia 30309. Invesco Advisers, as successor in interest to multiple investment advisers, is an indirect wholly-owned
subsidiary of Invesco Ltd., a publicly traded company that, through its subsidiaries, engages in the business of investment management
on an international basis.
Invesco
Advisers also provides subadvisory services for the MML Equity Momentum Fund, MML Equity Rotation Fund, MML Small Cap Equity Fund, MML
Special Situations Fund, and MML Strategic Emerging Markets Fund, each of which is a series of MML Series Investment Fund II, a registered,
open-end investment company for which MML Advisers serves as investment adviser, for the MassMutual Small Cap Growth Equity Fund, which
is a series of MassMutual Select Funds, a registered, open-end investment company for which MML Advisers serves as investment adviser,
and for the MML Fundamental Equity Fund, which is a series of MML Series Investment Fund, a registered, open-end investment company for
which MML Advisers serves as investment adviser.
In
addition, ICM serves as a sub-subadviser for the Balanced Fund. ICM is a wholly-owned subsidiary of Invesco Ltd. Invesco Advisers has
entered into a sub-subadvisory agreement with ICM under which, subject to the supervision of Invesco Advisers, ICM is authorized to trade
securities, make discretionary investment decisions, and effect securities transactions, including the negotiation of commissions and
the allocation of principal business and portfolio brokerage, on behalf of the Balanced Fund. ICM is located at 3500 Lacey Road, Suite
700, Downers Grove, Illinois 60515. ICM also provides sub-subadvisory services for the MML Equity Momentum Fund, MML Equity Rotation Fund,
and MML Special Situations Fund, each of which is a series of MML Series Investment Fund II, a registered, open-end investment company
for which MML Advisers serves as investment adviser.
TSW
MML
Advisers has entered into a Subadvisory Agreement with TSW pursuant to which TSW serves as a subadviser for the International Equity Fund.
This agreement provides that TSW manage the investment and reinvestment of a portion of the assets of the Fund. TSW is located at 6641
West Broad Street, Suite 600, Richmond, Virginia 23230. TSW is a Delaware limited liability company, an indirect wholly-owned subsidiary
of Pendal Group Limited, and a direct subsidiary of Pendal (USA) Inc. Since 1970, TSW has provided investment management services to corporations,
pensions and profit-sharing plans, 401(k) and thrift plans, trusts, estates, and other institutions and individuals.
TSW
also provides subadvisory services for the MML Foreign Fund, which is a series of MML Series Investment Fund, a registered, open-end investment
company for which MML Advisers serves as investment adviser and for the MassMutual Mid Cap Value Fund which is a series of MassMutual
Select Funds, a registered, open-end investment company for which MML Advisers serves as investment adviser.
Wellington Management
MML
Advisers has entered into Subadvisory Agreements with Wellington Management pursuant to which Wellington Management serves as a subadviser
for the Disciplined Value Fund, Disciplined Growth Fund, and International Equity Fund. These agreements provide that Wellington Management
manage the investment and reinvestment of all or a portion of the assets of the Funds, as applicable. Wellington Management is located
at 280 Congress Street, Boston, Massachusetts 02210. Wellington Management is a professional investment counseling firm which provides
investment services to investment companies, employee benefit plans, endowments, foundations, and other institutions. Wellington Management
and its predecessor organizations have provided investment advisory services for over 90 years. Wellington Management is owned by the
partners of Wellington Management Group LLP, a Massachusetts limited liability partnership.
Wellington
Management also provides subadvisory services for the MassMutual Equity Opportunities Fund, MassMutual Fundamental Growth Fund, MassMutual
Small Cap Value Equity Fund, and MassMutual Small Cap Growth Equity Fund, each of which is a series of MassMutual Select Funds, a registered,
open-end investment company for which MML Advisers serves as investment adviser and for the MML Focused Equity Fund, MML Mid Cap Growth
Fund, and MML Small Cap Growth Equity Fund, each of which is a series of MML Series Investment Fund, a registered, open-end investment
company for which MML Advisers serves as investment adviser.
The
Funds’ subadvisory fees are paid by MML Advisers out of the advisory fees previously disclosed above.
Information
about each portfolio manager’s compensation, other accounts managed by the portfolio managers, and each portfolio manager’s
ownership of securities in the relevant Fund can be found in Appendix C.
Administrator, Sub-Administrators, and Shareholder Servicing
Agent
MML
Advisers has entered into an administrative and shareholder services agreement (the “Administrative and Shareholder Services Agreement”)
with the Trust, on behalf of each Fund, pursuant to which MML Advisers is obligated to provide certain administrative and shareholder
services. MML Advisers may, at its expense, employ others to supply all or any part of the services to be provided to the Funds pursuant
to the Administrative and Shareholder Services Agreement. MML Advisers has entered into sub-administration agreements with both State
Street and MassMutual pursuant to which State Street and MassMutual each assist in many aspects of fund administration. Pursuant to a
letter agreement between the Trust, MML Advisers, and State Street, the Trust has agreed to pay State Street for the services it provides
pursuant to the sub-administration agreement with MML Advisers, although MML Advisers remains ultimately responsible for the payment of
any such fees owed to State Street. The Trust, on behalf of each Fund, pays MML Advisers an administrative services fee monthly at an
annual rate based upon the average daily net assets of the applicable class of shares of each Fund as shown in the table below:
|
|
|
|
Class I |
|
|
Class R5 |
|
|
Service Class
|
|
|
Administrative Class |
|
|
Class A |
|
|
Class R4 |
|
|
Class R3 |
|
|
U.S. Government Money Market Fund |
|
|
|
|
N/A |
|
|
|
|
|
0.10% |
|
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
Inflation-Protected and Income Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
|
Core Bond Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
|
Diversified Bond Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
|
Balanced Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
|
Disciplined Value Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
|
Main Street Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
|
Disciplined Growth Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
|
Small Cap Opportunities Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
|
Global Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
|
International Equity Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
|
Strategic Emerging Markets Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.20% |
|
|
Prior
to December 31, 2020, the Trust had entered into a separate Supplemental Shareholder Services Agreement with MassMutual, on behalf of
Service Class shares, Administrative Class shares, and Class A shares of each Fund. Fees payable under the Supplemental Shareholder Services
Agreement were intended to compensate MassMutual for its provision of shareholder services to the Funds’ investors and were calculated
and paid based on the average daily net assets attributable to the relevant share classes of the Funds separately, at the following annual
rates: 0.05% for Service Class shares, and 0.15% for Administrative Class shares and Class A shares. MassMutual may have paid these fees
to other intermediaries for providing shareholder services to the Funds’ investors.
MassMutual,
the parent company of MML Advisers, pays to an affiliate of Empower Retirement, LLC (“Empower”) an amount equal to the profit
realized by MML Advisers with respect to shares beneficially owned by retirement plans through recordkeeping platforms maintained by Empower
or an affiliate.
Pursuant
to the Advisory Agreements, Subadvisory Agreements, Administrative and Shareholder Services Agreement, and Supplemental Shareholder Services
Agreement described above, for the fiscal years ended September 30, 2021, September 30, 2020, and September 30, 2019, the amount of advisory
fees paid by each Fund, the amount of subadvisory fees paid by each Fund, the amount of any advisory fees waived by MML Advisers, the
amount of administrative fees paid by each Fund, the amount of supplemental shareholder services fees paid by each Fund, and the amount
of any fees reimbursed by MML Advisers are as follows:
|
|
|
|
Fiscal Year Ended September 30, 2021 |
|
|
|
|
|
Advisory Fees Paid |
|
|
Subadvisory Fees Paid |
|
|
Advisory Fees Waived |
|
|
Administrative Fees Paid |
|
|
Supplemental Shareholder Services Fees Paid |
|
|
Other Expenses Reimbursed |
|
|
U.S. Government Money
Market Fund1
|
|
|
|
$ |
1,094,819 |
|
|
|
|
$ |
155,911 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
312,805 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(1,404,777) |
|
|
|
Inflation-Protected and
Income Fund |
|
|
|
|
1,415,825 |
|
|
|
|
|
297,836 |
|
|
|
|
|
— |
|
|
|
|
|
300,407 |
|
|
|
|
|
21,150 |
|
|
|
|
|
— |
|
|
|
Core Bond Fund |
|
|
|
|
4,857,081 |
|
|
|
|
|
1,272,101 |
|
|
|
|
|
— |
|
|
|
|
|
816,098 |
|
|
|
|
|
60,700 |
|
|
|
|
|
— |
|
|
|
Diversified Bond Fund |
|
|
|
|
831,304 |
|
|
|
|
|
224,424 |
|
|
|
|
|
— |
|
|
|
|
|
180,354 |
|
|
|
|
|
12,826 |
|
|
|
|
|
— |
|
|
|
Balanced Fund |
|
|
|
|
740,458 |
|
|
|
|
|
193,464 |
|
|
|
|
|
— |
|
|
|
|
|
177,778 |
|
|
|
|
|
13,745 |
|
|
|
|
|
— |
|
|
|
Disciplined Value Fund |
|
|
|
|
433,001 |
|
|
|
|
|
154,218 |
|
|
|
|
|
— |
|
|
|
|
|
103,021 |
|
|
|
|
|
5,519 |
|
|
|
|
|
— |
|
|
|
Main Street Fund |
|
|
|
|
665,817 |
|
|
|
|
|
302,457 |
|
|
|
|
|
— |
|
|
|
|
|
158,147 |
|
|
|
|
|
12,793 |
|
|
|
|
|
— |
|
|
|
Disciplined Growth Fund |
|
|
|
|
1,161,514 |
|
|
|
|
|
415,021 |
|
|
|
|
|
— |
|
|
|
|
|
379,870 |
|
|
|
|
|
28,139 |
|
|
|
|
|
— |
|
|
|
Small Cap Opportunities Fund |
|
|
|
|
1,876,820 |
|
|
|
|
|
1,308,490 |
|
|
|
|
|
— |
|
|
|
|
|
433,945 |
|
|
|
|
|
28,556 |
|
|
|
|
|
— |
|
|
|
Global Fund |
|
|
|
|
2,715,742 |
|
|
|
|
|
1,309,024 |
|
|
|
|
|
— |
|
|
|
|
|
482,317 |
|
|
|
|
|
41,886 |
|
|
|
|
|
— |
|
|
|
International Equity Fund 2
|
|
|
|
|
1,457,862 |
|
|
|
|
|
608,191 |
|
|
|
|
|
(47,899) |
|
|
|
|
|
126,065 |
|
|
|
|
|
9,066 |
|
|
|
|
|
— |
|
|
|
Strategic Emerging Markets Fund 3
|
|
|
|
|
1,888,082 |
|
|
|
|
|
1,320,436 |
|
|
|
|
|
— |
|
|
|
|
|
20,674 |
|
|
|
|
|
1,561 |
|
|
|
|
|
(136,442) |
|
|
1
MML
Advisers agreed to voluntarily waive some or all of its fees in an attempt to allow the Fund to avoid a negative yield.
2
Effective
July 1, 2021, the expenses in the above table reflect a written agreement by MML Advisers to waive 0.05% of the advisory fees of the Fund
through September 30, 2021. The expenses in the above table reflect a written agreement by MML Advisers to waive 0.02% of the advisory
fees of the Fund through June 30, 2021.
3
Effective
February 1, 2021, the expenses in the above table reflect a written agreement by MML Advisers to cap the fees and expenses of the Fund
(other than extraordinary legal and other expenses, Acquired Fund Fees and Expenses, interest expense, expenses related to borrowings,
securities lending, leverage, taxes, and brokerage, short sale dividend and loan expense, or other non-recurring or unusual expenses such
as organizational expenses and shareholder meeting expenses, as applicable) through September 30, 2021, to the extent that Total Annual
Fund Operating Expenses after Expense Reimbursement would otherwise exceed 1.15%, 1.25%, 1.35%, 1.45%, 1.70%, 1.60%, and 1.85% for Classes
I, R5, Service, Administrative, A, R4, and R3, respectively. The expenses in the above table reflect a written agreement by MML Advisers
to cap the fees and expenses of the Fund (other than extraordinary litigation and legal expenses, Acquired Fund Fees and Expenses, interest
expense, short sale dividend and loan expense, or other non-recurring or unusual expenses such as organizational expenses and shareholder
meeting
expenses,
as applicable) through January 31, 2021, to the extent that Total Annual Fund Operating Expenses after Expense Reimbursement would otherwise
exceed 1.15%, 1.25%, 1.35%, 1.45%, 1.70%, 1.60%, and 1.85% for Classes I, R5, Service, Administrative, A, R4, and R3, respectively.
|
|
|
|
Fiscal Year Ended September 30, 2020
|
|
|
|
|
|
Advisory Fees Paid |
|
|
Subadvisory Fees Paid |
|
|
Advisory Fees Waived |
|
|
Administrative Fees Paid |
|
|
Supplemental Shareholder Services Fees Paid
|
|
|
Other Expenses Reimbursed
|
|
|
U.S. Government Money Market
Fund1
|
|
|
|
$ |
1,094,806 |
|
|
|
|
$ |
156,248 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
312,802 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
(333,254) |
|
|
|
Inflation-Protected and Income
Fund |
|
|
|
|
1,270,248 |
|
|
|
|
|
269,098 |
|
|
|
|
|
— |
|
|
|
|
|
220,973 |
|
|
|
|
|
75,006 |
|
|
|
|
|
— |
|
|
|
Core Bond Fund |
|
|
|
|
5,231,660 |
|
|
|
|
|
1,371,958 |
|
|
|
|
|
— |
|
|
|
|
|
688,358 |
|
|
|
|
|
260,598 |
|
|
|
|
|
— |
|
|
|
Diversified Bond Fund |
|
|
|
|
867,844 |
|
|
|
|
|
237,364 |
|
|
|
|
|
— |
|
|
|
|
|
206,011 |
|
|
|
|
|
69,938 |
|
|
|
|
|
— |
|
|
|
Balanced Fund |
|
|
|
|
613,765 |
|
|
|
|
|
210,081 |
|
|
|
|
|
— |
|
|
|
|
|
120,139 |
|
|
|
|
|
50,927 |
|
|
|
|
|
— |
|
|
|
Disciplined Value Fund |
|
|
|
|
420,224 |
|
|
|
|
|
174,125 |
|
|
|
|
|
— |
|
|
|
|
|
98,342 |
|
|
|
|
|
22,999 |
|
|
|
|
|
— |
|
|
|
Main Street Fund |
|
|
|
|
632,456 |
|
|
|
|
|
313,143 |
|
|
|
|
|
— |
|
|
|
|
|
112,668 |
|
|
|
|
|
51,801 |
|
|
|
|
|
— |
|
|
|
Disciplined Growth Fund |
|
|
|
|
1,107,759 |
|
|
|
|
|
460,885 |
|
|
|
|
|
— |
|
|
|
|
|
290,809 |
|
|
|
|
|
112,341 |
|
|
|
|
|
— |
|
|
|
Small Cap Opportunities Fund |
|
|
|
|
1,278,272 |
|
|
|
|
|
882,403 |
|
|
|
|
|
— |
|
|
|
|
|
241,815 |
|
|
|
|
|
105,155 |
|
|
|
|
|
— |
|
|
|
Global Fund |
|
|
|
|
2,241,937 |
|
|
|
|
|
1,097,254 |
|
|
|
|
|
— |
|
|
|
|
|
300,145 |
|
|
|
|
|
154,793 |
|
|
|
|
|
— |
|
|
|
International Equity Fund 2
|
|
|
|
|
1,940,224 |
|
|
|
|
|
1,002,960 |
|
|
|
|
|
(45,886) |
|
|
|
|
|
139,998 |
|
|
|
|
|
39,612 |
|
|
|
|
|
— |
|
|
|
Strategic Emerging Markets Fund 3
|
|
|
|
|
1,640,854 |
|
|
|
|
|
1,149,927 |
|
|
|
|
|
— |
|
|
|
|
|
13,964 |
|
|
|
|
|
4,118 |
|
|
|
|
|
(192,545) |
|
|
1
MML
Advisers agreed to voluntarily waive some or all of its fees in an attempt to allow the Fund to avoid a negative yield.
2
The
expenses in the above table reflect a written agreement by MML Advisers to waive 0.02% of the advisory fees of the Fund through September
30, 2020.
3
The
expenses in the above table reflect a written agreement by MML Advisers to cap the fees and expenses of the Fund (other than extraordinary
litigation and legal expenses, Acquired Fund Fees and Expenses, interest expense, short sale dividend and loan expense, or other non-recurring
or unusual expenses such as organizational expenses and
shareholder meeting expenses,
as applicable) through September 30, 2020, to the extent that Total Annual Fund Operating Expenses after Expense Reimbursement would otherwise
exceed 1.15%, 1.25%, 1.35%, 1.45%, 1.70%, 1.60%, and 1.85% for Classes I, R5, Service, Administrative, A, R4, and R3, respectively.
|
|
|
|
Fiscal Year Ended September 30, 2019 |
|
|
|
|
|
Advisory Fees Paid |
|
|
Subadvisory Fees Paid |
|
|
Advisory Fees Waived |
|
|
Administrative Fees Paid |
|
|
Supplemental Shareholder Services Fees Paid
|
|
|
Other Expenses Reimbursed
|
|
|
U.S. Government Money Market
Fund |
|
|
|
$ |
1,194,357 |
|
|
|
|
$ |
170,684 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
341,245 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Inflation-Protected and Income
Fund1
|
|
|
|
|
1,141,105 |
|
|
|
|
|
239,163 |
|
|
|
|
|
(29,056) |
|
|
|
|
|
210,630 |
|
|
|
|
|
73,991 |
|
|
|
|
|
— |
|
|
|
Core Bond Fund |
|
|
|
|
5,025,081 |
|
|
|
|
|
1,321,319 |
|
|
|
|
|
— |
|
|
|
|
|
701,700 |
|
|
|
|
|
294,290 |
|
|
|
|
|
— |
|
|
|
Diversified Bond Fund |
|
|
|
|
793,028 |
|
|
|
|
|
213,404 |
|
|
|
|
|
— |
|
|
|
|
|
226,120 |
|
|
|
|
|
88,916 |
|
|
|
|
|
— |
|
|
|
Balanced Fund 2
|
|
|
|
|
565,408 |
|
|
|
|
|
191,331 |
|
|
|
|
|
— |
|
|
|
|
|
127,564 |
|
|
|
|
|
53,720 |
|
|
|
|
|
(37,386) |
|
|
|
Disciplined Value Fund |
|
|
|
|
595,484 |
|
|
|
|
|
242,455 |
|
|
|
|
|
— |
|
|
|
|
|
149,104 |
|
|
|
|
|
40,446 |
|
|
|
|
|
— |
|
|
|
Main Street Fund |
|
|
|
|
696,054 |
|
|
|
|
|
379,454 |
|
|
|
|
|
— |
|
|
|
|
|
130,853 |
|
|
|
|
|
58,618 |
|
|
|
|
|
— |
|
|
|
Disciplined Growth Fund |
|
|
|
|
1,314,637 |
|
|
|
|
|
535,790 |
|
|
|
|
|
— |
|
|
|
|
|
360,755 |
|
|
|
|
|
137,281 |
|
|
|
|
|
— |
|
|
|
Small Cap Opportunities Fund |
|
|
|
|
1,234,405 |
|
|
|
|
|
850,752 |
|
|
|
|
|
— |
|
|
|
|
|
242,322 |
|
|
|
|
|
121,243 |
|
|
|
|
|
— |
|
|
|
Global Fund |
|
|
|
|
2,224,679 |
|
|
|
|
|
1,088,034 |
|
|
|
|
|
— |
|
|
|
|
|
313,238 |
|
|
|
|
|
168,167 |
|
|
|
|
|
— |
|
|
|
International Equity Fund 3
|
|
|
|
|
3,259,083 |
|
|
|
|
|
1,653,664 |
|
|
|
|
|
(46,654) |
|
|
|
|
|
214,203 |
|
|
|
|
|
55,515 |
|
|
|
|
|
— |
|
|
|
Strategic Emerging Markets Fund 4
|
|
|
|
|
1,894,993 |
|
|
|
|
|
1,296,847 |
|
|
|
|
|
— |
|
|
|
|
|
10,958 |
|
|
|
|
|
2,484 |
|
|
|
|
|
(204,712) |
|
|
1
The
expenses in the above table reflect a voluntary agreement by MML Advisers to waive 0.03% of the advisory fees of the Fund through January
31, 2019.
2
The
expenses in the above table reflect a written agreement by MML Advisers to cap the fees and expenses of the Fund (other than extraordinary
litigation and legal expenses, Acquired Fund Fees and Expenses, interest expense, short sale dividend and loan expense, or other non-recurring
or unusual expenses such as organizational expenses and shareholder meeting expenses, as applicable) through January 31, 2019, to the
extent that Total Annual Fund Operating Expenses after Expense Reimbursement would otherwise exceed 0.60%, 0.70%, 0.80%, 0.90%, 1.15%,
1.05%, and 1.30% for Classes I, R5, Service, Administrative, A, R4, and R3, respectively.
3
Effective
July 1, 2019, the expenses in the above table reflect a written agreement by MML Advisers to waive 0.02% of the advisory fees of the Fund
through September 30, 2019. The expenses in the above table reflect a voluntary agreement by MML Advisers to waive 0.02% of the advisory
fees of the Fund through January 31, 2019.
4
Effective
February 1, 2019, the expenses in the above table reflect a written agreement by MML Advisers to cap the fees and expenses of the Fund
(other than extraordinary litigation and legal expenses, Acquired Fund Fees and Expenses, interest expense, short sale dividend and loan
expense, or other non-recurring or unusual expenses such as organizational expenses and shareholder meeting expenses, as applicable) through
September 30, 2019, to the extent that Total Annual Fund Operating Expenses after Expense Reimbursement would otherwise exceed 1.15%,
1.25%, 1.35%, 1.45%, 1.70%, 1.60%, and 1.85% for Classes I, R5, Service, Administrative, A, R4, and R3, respectively. The expenses in
the above table reflect a written agreement by MML Advisers to cap the fees and expenses of the Fund (other than extraordinary litigation
and legal expenses, Acquired Fund Fees and Expenses, interest expense, short sale dividend and loan expense, or other non-recurring or
unusual expenses such as organizational expenses and shareholder meeting expenses, as applicable) through January 31, 2019, to the extent
that Total Annual Fund Operating Expenses after Expense Reimbursement would otherwise exceed 1.05%, 1.15%, 1.25%, 1.35%, 1.60%, 1.50%,
and 1.75% for Classes I, R5, Service, Administrative, A, R4, and R3, respectively.
THE DISTRIBUTOR
The
Funds’ shares are continuously distributed by MML Distributors, LLC (the “Distributor”), located at 1295 State Street,
Springfield, Massachusetts 01111-0001, pursuant to a Principal Underwriter Agreement with the Trust, as amended (the “Distribution
Agreement”). The Distributor pays commissions to its selling dealers as well as the costs of printing and mailing prospectuses
to potential investors and of any advertising incurred by it in connection with distribution of shares of the Funds. The Distributor is
a wholly-owned subsidiary of MassMutual.
The
Distributor has agreed to use reasonable efforts to sell shares of the Funds but has not agreed to sell any specific number of shares
of the Funds. The Distributor’s compensation for serving as such is the amounts received by it from time to time under the Funds’
Amended and Restated Rule 12b-1 plan. In addition, the Distributor receives any front-end sales charges imposed on the sales of Class
A shares of the Funds. Sales loads paid to the Distributor in respect of all of the Funds during the fiscal year ended September 30, 2021
were $2,157.
Shares
of each Fund may be purchased through agents of the Distributor who are registered representatives and licensed by the Distributor to
sell Fund shares, and through registered representatives of selected broker-dealers which are members of FINRA and which have entered
into selling agreements with the Distributor. The Distributor may reallow up to 100% of any sales load on shares sold by dealers with
whom it has sales agreements. Broker-dealers with which the Distributor has entered into selling agreements may charge their customers
a processing or service fee in connection with the purchase or redemption of Fund shares. The amount and applicability of such a fee is
determined and disclosed to such customers by each individual broker-dealer.
The
Distribution Agreement continued in effect for an initial two-year period, and thereafter continues in effect so long as such continuance
is approved at least annually (i) by the vote of a majority of the Trustees or by a vote of a majority of the shares of the Trust; and
(ii) by a majority of the Trustees who are not parties to the Distribution Agreement or “interested persons” (as defined
in the 1940 Act) of any such person, cast in person at a meeting called for the purpose of voting on such approval.
DISTRIBUTION
AND SERVICE PLAN
The
Trust has adopted, with respect to the Class I, Class R5, Service Class, Administrative Class, Class A, Class R4, and Class R3 shares
of each Fund, an Amended and Restated Rule 12b-1 Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act.
The Trustees of the Trust, including a majority of the Trustees who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plan, by vote cast in person at a meeting called for the purpose of voting on the
Plan, approved the Plan for each Fund and share class.
Continuance
of the Plan is subject to annual approval by a vote of the Trustees, including a majority of the Independent Trustees, cast in person
at a meeting called for that purpose. All material amendments to the Plan must be likewise approved by the Trustees and the Independent
Trustees. The Plan may not be amended in order to increase materially the costs which a Fund may bear for distribution pursuant to the
Plan without also being approved by a majority of the outstanding voting securities of the relevant class of the Fund. The Plan terminates
automatically in the event of its assignment and may be terminated without penalty, at any time, by a vote of a majority of the Independent
Trustees or by a vote of a majority of the outstanding voting securities of the relevant class of the Fund. The Plan provides that the
Distributor shall provide to the Trustees, and the Board shall review at least quarterly, a written report of the amounts expended and
the purposes for which such expenditures were made.
The
Plan is a compensation plan, authorizing payments to the Distributor up to the following annual rates: Class A and Class R4 shares —
0.25% of the average daily net assets of the class; Class R3 shares — 0.50% of the average daily net assets of the class. A Fund
may make payments under the Plan to compensate the Distributor for services provided and expenses incurred by it for purposes of promoting
the sale of the relevant class of shares, reducing redemptions of shares, or maintaining or improving services provided to shareholders.
MML
Advisers may pay amounts in respect of the distribution or servicing of a Fund’s shares out of administrative or advisory fees
received by it from that Fund. The Plan authorizes such payments for Class I, Class R5, Service Class, and Administrative Class shares
of each Fund, although MML Advisers may make such payments in respect of shares of any class. No additional fees are paid by a Fund under
the Plan.
The
following table discloses the 12b-1 fees paid in the fiscal year ending September 30, 2021 by the Trust under the Plan for Class
A, Class R4, and Class R3 shares of the Funds:
|
|
|
Class A 12b-1 Servicing Fees
|
|
|
Class R4 12b-1 Servicing Fees
|
|
|
Class R3 12b-1 Servicing Fees
|
|
|
Class R3 12b-1 Distribution Fees
|
|
Inflation-Protected and Income Fund |
|
|
|
$ |
53,400 |
|
|
|
|
$ |
11,917 |
|
|
|
|
$ |
7,758 |
|
|
|
|
$ |
7,758 |
|
|
Core Bond Fund |
|
|
|
|
147,467 |
|
|
|
|
|
23,826 |
|
|
|
|
|
1,961 |
|
|
|
|
|
1,961 |
|
|
Diversified Bond Fund |
|
|
|
|
29,575 |
|
|
|
|
|
14,725 |
|
|
|
|
|
8,450 |
|
|
|
|
|
8,450 |
|
|
Balanced Fund |
|
|
|
|
63,719 |
|
|
|
|
|
14,654 |
|
|
|
|
|
26,660 |
|
|
|
|
|
26,660 |
|
|
Disciplined Value Fund |
|
|
|
|
16,332 |
|
|
|
|
|
7,338 |
|
|
|
|
|
11,172 |
|
|
|
|
|
11,172 |
|
|
Main Street Fund |
|
|
|
|
28,576 |
|
|
|
|
|
19,656 |
|
|
|
|
|
3,399 |
|
|
|
|
|
3,399 |
|
|
Disciplined Growth Fund |
|
|
|
|
68,936 |
|
|
|
|
|
54,966 |
|
|
|
|
|
15,412 |
|
|
|
|
|
15,412 |
|
|
Small Cap Opportunities Fund |
|
|
|
|
138,612 |
|
|
|
|
|
35,737 |
|
|
|
|
|
23,063 |
|
|
|
|
|
23,063 |
|
|
Global Fund |
|
|
|
|
60,472 |
|
|
|
|
|
30,605 |
|
|
|
|
|
26,866 |
|
|
|
|
|
26,866 |
|
|
International Equity Fund |
|
|
|
|
43,274 |
|
|
|
|
|
4,591 |
|
|
|
|
|
6,132 |
|
|
|
|
|
6,132 |
|
|
Strategic Emerging Markets Fund |
|
|
|
|
4,823 |
|
|
|
|
|
2,879 |
|
|
|
|
|
2,924 |
|
|
|
|
|
2,924 |
|
|
|
|
|
|
$ |
810,647 |
|
|
|
|
$ |
350,312 |
|
|
|
|
$ |
243,421 |
|
|
|
|
$ |
243,421 |
|
|
For
the fiscal year ending September 30, 2021, the Distributor paid to MassMutual the 12b-1 fees and MassMutual retained at least approximately
97% of the 12b-1 fees it received as compensation for recordkeeping services provided by MassMutual to retirement and other employee benefit
plans, as agreed between MassMutual and those plans. MassMutual paid the remainder, as agent of the Distributor, to various unaffiliated
financial intermediaries as compensation for distribution services and/or shareholder services provided by them.
PAYMENTS TO FINANCIAL INTERMEDIARIES
Financial
intermediaries may receive various forms of compensation from a Fund in the form of distribution and service (12b-1) plan payments as
described above. They may also receive payments or concessions from the Distributor, derived from sales charges paid by the financial
intermediary’s clients. In addition, MML Advisers and the Distributor (including their affiliates) may make payments to financial
intermediaries in connection with the intermediaries’ offering and sales of Fund shares and shares of other funds, or their provision
of marketing or promotional support, transaction processing or administrative services. Among the financial intermediaries that may receive
these payments are brokers or dealers who sell or hold shares of a Fund, banks (including bank trust departments), registered investment
advisers, insurance companies, retirement plan or qualified tuition program administrators, third party administrators, recordkeepers,
or other institutions that have selling, servicing or similar arrangements with MML Advisers or the Distributor. The payments to financial
intermediaries vary by the types of product sold, the features of a Fund share class, and the role played by the intermediary.
Types
of payments to financial intermediaries may include, without limitation, all or portions of the following: Payments made by a Fund, or
by an investor buying or selling shares of a Fund, including:
•
an
initial front-end sales charge, all or a portion of which is payable by the Distributor to financial intermediaries;
•
ongoing
asset-based distribution and/or service fees;
•
shareholder
servicing expenses that may be paid from Fund assets to reimburse financial intermediaries, MML Advisers, or the Distributor for Fund
expenses they incur for providing omnibus accounting, recordkeeping, networking, sub-transfer agency, or other administrative or shareholder
services (including retirement plan and 529 plan administrative services fees).
In
addition, MML Advisers may, at its discretion, make the following types of payments from its own resources, which may include profits
MML Advisers derives from investment advisory fees paid by a Fund. Payments are made based on guidelines established by the MML Advisers,
subject to applicable law. These payments are often referred to as “revenue sharing” payments, and may include:
•
compensation
for marketing support, support provided in offering shares in a Fund through certain trading platforms and programs, and transaction processing
or other services;
•
other
compensation, to the extent the payment is not prohibited by law or by any self-regulatory agency, such as FINRA.
Although
a broker or dealer that sells Fund shares may also act as a broker or dealer in connection with the purchase or sale of portfolio securities
by a Fund, MML Advisers does not consider a financial intermediary’s sales of shares of a Fund when choosing brokers or dealers
to effect portfolio transactions for a Fund.
Revenue
sharing payments can pay for distribution-related or asset retention items including, without limitation:
•
transactional
support, one-time charges for setting up access for a Fund on particular trading systems, and paying the financial intermediary’s
networking fees;
•
program
support, such as expenses related to including the Funds in retirement plans, college savings plans, fee-based advisory or wrap fee programs,
fund “supermarkets,” bank or trust company products or insurance companies’ variable annuity or variable life insurance
products;
•
placement
on the dealer’s list of offered funds and providing representatives of MML Advisers or the Distributor with access to a financial
intermediary’s sales meetings, sales representatives, and management representatives; or
•
firm
support, such as business planning assistance, advertising, or educating a financial intermediary’s sales personnel about the Funds
and shareholder financial planning needs.
These
payments may provide an incentive to financial intermediaries to actively market or promote the sale of shares of a Fund, or to support
the marketing or promotional efforts of the Distributor in offering shares of a Fund. In addition, some types of payments may provide
a financial intermediary with an incentive to recommend a Fund or a particular share class. Financial intermediaries may earn profits
on these payments, since the amount of the payments may exceed the cost of providing the services. Certain of these payments are subject
to limitations under applicable law. Financial intermediaries may categorize and disclose these arrangements to their clients and to members
of the public in a manner different from the disclosures in a Fund’s Prospectus and this SAI. You should ask your financial intermediary
for information about any payments it receives from a Fund, MML Advisers, or the Distributor and any services it provides, as well as
the fees and commissions it charges.
CUSTODIAN, DIVIDEND DISBURSING AGENT,
AND TRANSFER AGENT
State
Street, located at 1 Iron Street, Boston, Massachusetts 02210, is the custodian of each Fund’s investments (the “Custodian”)
and is the Funds’ transfer agent and dividend disbursing agent (the “Transfer Agent”). As custodian, State Street
has custody of the Funds’ securities and maintains certain financial and accounting books and records. As Custodian and Transfer
Agent, State Street does not assist in, and is not responsible for, the investment decisions and policies of the Funds.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
Deloitte
& Touche LLP, located at 200 Berkeley Street, Boston, Massachusetts 02116, is the Trust’s independent registered public accounting
firm. Deloitte & Touche LLP provides audit and related services, and assistance in connection with various SEC filings.
CODES OF ETHICS
The
Trust, MML Advisers, the Distributor, Barings, BIIL, ICM, Invesco Advisers, TSW, and Wellington Management have each adopted a code of
ethics (the “Codes of Ethics”) pursuant to Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Investment Advisers Act
of 1940, as amended. The Codes of Ethics permit Fund personnel to invest in securities, including securities that may be purchased or
held by a Fund, for their own accounts, but require compliance with various pre-clearance requirements (with certain exceptions). The
Codes of Ethics are on public file with, and are available from, the SEC.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Transactions
on stock exchanges, commodities markets and futures markets and other agency transactions involve the payment by the Funds of negotiated
brokerage commissions. Such commissions may vary among different brokers. A particular broker may charge different commissions according
to such factors as execution venue and exchange. Although the Funds do not typically pay commissions for principal transactions in the
OTC markets, such as the markets for most
fixed income securities and
certain derivatives, an undisclosed amount of profit or “mark-up” is included in the price a Fund pays. In underwritten
offerings, the price paid by a Fund includes a disclosed, fixed commission or discount retained by the underwriter or dealer.
The
primary consideration in placing portfolio security transactions with broker-dealers for execution is to obtain the best execution of
orders. Each Fund’s investment adviser or subadviser attempts to achieve this result by selecting broker-dealers to execute portfolio
transactions on the basis of their professional capability, the value and quality of their brokerage services, including anonymity and
trade confidentiality, and the level of their brokerage commissions.
Under
each Advisory or Subadvisory Agreement and as permitted by Section 28(e) of the Exchange Act and to the extent not otherwise prohibited
by applicable law, an investment adviser or subadviser may cause a Fund to pay a broker-dealer that provides brokerage and research services
to the investment adviser or subadviser an amount of commission for effecting a securities transaction for a Fund in excess of the amount
other broker-dealers would have charged for the transaction if the investment adviser or subadviser determines in good faith that the
greater commission is reasonable in relation to the value of the brokerage and research services provided by the executing broker-dealer
viewed in terms of either a particular transaction or the investment adviser’s or subadviser’s overall responsibilities
to the Trust and to its other clients. The term “brokerage and research services” includes: providing advice as to the value
of securities, the advisability of investing in, purchasing, or selling securities, and the availability of securities or of purchasers
or sellers of securities; furnishing analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio
strategy, and the performance of accounts; and effecting securities transactions and performing functions incidental thereto such as clearance
and settlement.
The
investment adviser or subadvisers may obtain third-party research from broker-dealers or non-broker-dealers by entering into commission
sharing arrangements (“CSAs”). Under a CSA, the executing broker-dealer agrees that part of the commissions it earns on
certain equity trades will be allocated to one or more research providers as payment for research. CSAs allow an investment adviser or
subadviser to direct broker-dealers to pool commissions that are generated from orders executed at that broker-dealer, and then periodically
direct the broker-dealer to pay third party research providers for research.
Brokerage
and research services provided by brokers are used for the benefit of all of the investment adviser’s or subadviser’s clients
and not solely or necessarily for the benefit of the Trust. The investment adviser or subadvisers attempt to evaluate the quality of brokerage
and research services provided by brokers. Results of this effort are sometimes used by the investment adviser or subadvisers as a consideration
in the selection of brokers to execute portfolio transactions.
The
investment advisory fee that the Trust pays on behalf of each Fund to MML Advisers will not be reduced as a consequence of an investment
adviser’s or subadviser’s receipt of brokerage and research services. To the extent the Trust’s portfolio transactions
are used to obtain such services, the brokerage commissions paid by the Trust will exceed those that might otherwise be paid, provided
that the investment adviser or subadviser determines in good faith that such excess amounts are reasonable in relation to the services
provided. Such services would be useful and of value to an investment adviser or subadviser in serving both the Trust and other clients
and, conversely, such services obtained by the placement of brokerage business of other clients would be useful to an investment adviser
or subadviser in carrying out its obligations to the Trust.
Subject
to the overriding objective of obtaining the best execution of orders, the Funds may use broker-dealer affiliates of their respective
investment adviser or subadvisers to effect portfolio brokerage transactions under procedures adopted by the Trustees. Pursuant to these
procedures, the commission, fee, or other remuneration paid to the affiliated broker-dealer in connection with a portfolio brokerage transaction
effected on a securities exchange must be reasonable and fair in comparison to those of other broker-dealers for comparable transactions
involving similar securities being purchased or sold on a securities exchange during a comparable time period. This standard would allow
the affiliated broker or dealer to receive no more than the remuneration which would be expected to be received by an unaffiliated broker.
The
Funds may allocate brokerage transactions to broker-dealers (including affiliates of their respective investment adviser or subadvisers)
who have entered into arrangements with the Trust under which the broker-dealer allocates a portion of the commissions paid back to the
Fund. The transaction quality must, however, be comparable to that of other qualified broker-dealers.
The
revised European Union (“EU”) Markets in Financial Instruments Directive (“MiFID II”), which became effective
January 3, 2018, requires EU investment managers in the scope of the EU Markets in Financial Instruments Directive to pay for research
services from brokers and dealers directly out of their own resources or by establishing “research payment accounts” for
each client, rather than through client commissions. MiFID II’s research requirements present various
compliance and operational considerations
for investment advisers and broker-dealers serving clients in both the United States and the EU. It is possible that an investment adviser
or subadviser subject to MiFID II will cause a Fund to pay for research services through client commissions in circumstances where the
investment adviser or subadviser is prohibited from causing its other client accounts to do so, including where the investment adviser
or subadviser aggregates trades on behalf of a Fund and those other client accounts. In such situations, the Fund would bear the additional
amounts for the research services and the Fund’s investment adviser’s or subadviser’s other client accounts would
not, although the investment adviser’s or subadviser’s other client accounts might nonetheless benefit from those research
services.
The
following table discloses the brokerage commissions paid by the following Funds for the fiscal years ended September 30, 2021, September
30, 2020, and September 30, 2019:
|
|
|
Fiscal Year ended September 30, 2021 |
|
|
Fiscal Year ended September 30, 2020 |
|
|
Fiscal Year ended September 30, 2019 |
|
Inflation-Protected and Income Fund |
|
|
|
$ |
9,089 |
|
|
|
|
$ |
11,079 |
|
|
|
|
$ |
24,741 |
|
|
Core Bond Fund |
|
|
|
$ |
57,254 |
|
|
|
|
$ |
63,866 |
|
|
|
|
$ |
65,306 |
|
|
Diversified Bond Fund |
|
|
|
$ |
10,340 |
|
|
|
|
$ |
10,683 |
|
|
|
|
$ |
10,668 |
|
|
Balanced Fund |
|
|
|
$ |
49,757 |
|
|
|
|
$ |
7,569 |
|
|
|
|
$ |
11,030 |
|
|
Disciplined Value Fund |
|
|
|
$ |
46,898 |
|
|
|
|
$ |
18,790 |
|
|
|
|
$ |
26,688 |
|
|
Main Street Fund |
|
|
|
$ |
35,511 |
|
|
|
|
$ |
36,111 |
|
|
|
|
$ |
56,030 |
|
|
Disciplined Growth Fund |
|
|
|
$ |
38,403 |
|
|
|
|
$ |
25,047 |
|
|
|
|
$ |
27,840 |
|
|
Small Cap Opportunities Fund |
|
|
|
$ |
180,932 |
|
|
|
|
$ |
166,471 |
|
|
|
|
$ |
119,064 |
|
|
Global Fund |
|
|
|
$ |
42,261 |
|
|
|
|
$ |
59,894 |
|
|
|
|
$ |
52,957 |
|
|
International Equity Fund |
|
|
|
$ |
54,015 |
|
|
|
|
$ |
350,049 |
|
|
|
|
$ |
209,811 |
|
|
Strategic Emerging Markets Fund |
|
|
|
$ |
197,941 |
|
|
|
|
$ |
228,497 |
|
|
|
|
$ |
204,027 |
|
|
Portfolio
Turnover - The Balanced Fund, Disciplined Value Fund, and Disciplined Growth Fund each experienced
increased portfolio turnover during the fiscal year ended September 30, 2021 as a result of a change in each Fund’s subadviser,
which led to a portfolio repositioning.
The
International Equity Fund experienced decreased portfolio turnover during the fiscal year ended September 30, 2021 as a result of a return
to a more normalized portfolio turnover from the prior fiscal year, which included a change in the Fund’s subadviser, which had
led to a portfolio repositioning.
The
following table discloses, for those Funds that paid brokerage commissions to an affiliate of its investment adviser or subadviser, the
total amount of brokerage commissions paid by each such Fund to affiliates for the past three fiscal years and, for the fiscal year ended
2021, the percentage of the Fund’s aggregate brokerage commissions paid to affiliates and the percentage of the Fund’s aggregate
dollar amount of transactions involving the payment of commissions effected through affiliates.
|
|
|
Fiscal Year ended September 30, 2021 |
|
|
Fiscal Year ended September 30, 2020 |
|
|
Fiscal Year ended September 30, 2019 |
|
Affiliated Broker/Dealer |
|
|
Aggregate Commissions Paid
|
|
|
Percentage Paid to Affiliates
|
|
|
Percentage of Dollar Amount of Transactions Involving Payment of Commissions
to Affiliates |
|
|
Aggregate Commissions Paid
|
|
|
Aggregate Commissions Paid
|
|
Jefferies and Company |
|
Disciplined Value Fund 1
|
|
|
|
$ |
6,067 |
|
|
|
|
|
12.94% |
|
|
|
|
|
24.86% |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
Main Street Fund 1
|
|
|
|
$ |
925 |
|
|
|
|
|
2.61% |
|
|
|
|
|
0.71% |
|
|
|
|
$ |
373 |
|
|
|
|
$ |
2,776 |
|
|
Small Cap Opportunities Fund 1
|
|
|
|
$ |
3,908 |
|
|
|
|
|
2.16% |
|
|
|
|
|
0.59% |
|
|
|
|
$ |
28,897 |
|
|
|
|
$ |
19,961 |
|
|
Global Fund 1
|
|
|
|
$ |
2,301 |
|
|
|
|
|
5.45% |
|
|
|
|
|
0.87% |
|
|
|
|
$ |
3,212 |
|
|
|
|
$ |
3,513 |
|
|
International Equity Fund 1
|
|
|
|
$ |
— |
|
|
|
|
|
—% |
|
|
|
|
|
—% |
|
|
|
|
$ |
10,501 |
|
|
|
|
$ |
6,383 |
|
|
|
|
|
Fiscal Year ended September 30, 2021 |
|
|
Fiscal Year ended September 30, 2020 |
|
|
Fiscal Year ended September 30, 2019 |
|
Affiliated Broker/Dealer |
|
|
Aggregate Commissions Paid
|
|
|
Percentage Paid to Affiliates
|
|
|
Percentage of Dollar Amount of Transactions Involving Payment of Commissions
to Affiliates |
|
|
Aggregate Commissions Paid
|
|
|
Aggregate Commissions Paid
|
|
Strategic Emerging Markets Fund 1
|
|
|
|
$ |
7,131 |
|
|
|
|
|
3.60% |
|
|
|
|
|
0.83% |
|
|
|
|
$ |
28,033 |
|
|
|
|
$ |
13,712 |
|
|
1
Includes
affiliated trading platforms of Jefferies and Company
The
following table discloses, for those Funds that had trades directed to a broker or dealer during the fiscal year ended September 30, 2021
because of research services provided, the dollar value of transactions placed by each such Fund with such brokers and dealers during
the fiscal year ended September 30, 2021 to recognize “brokerage and research” services, and commissions paid for such transactions:
|
|
|
Dollar Value of Those Transactions
|
|
|
Amount of Commissions |
|
Balanced Fund |
|
|
|
$ |
187,297,335 |
|
|
|
|
$ |
21,326 |
|
|
Disciplined Value Fund |
|
|
|
$ |
190,714,332 |
|
|
|
|
$ |
4,429 |
|
|
Main Street Fund |
|
|
|
$ |
111,214,996 |
|
|
|
|
$ |
29,345 |
|
|
Disciplined Growth Fund |
|
|
|
$ |
299,030,649 |
|
|
|
|
$ |
3,037 |
|
|
Small Cap Opportunities Fund |
|
|
|
$ |
213,283,103 |
|
|
|
|
$ |
147,558 |
|
|
Global Fund |
|
|
|
$ |
92,033,616 |
|
|
|
|
$ |
38,363 |
|
|
International Equity Fund |
|
|
|
$ |
59,936,154 |
|
|
|
|
$ |
6,475 |
|
|
Strategic Emerging Markets Fund |
|
|
|
$ |
178,473,871 |
|
|
|
|
$ |
154,193 |
|
|
The
following table discloses, for those Funds that held securities issued by one or more of its “regular brokers or dealers”
(as defined in the 1940 Act), or their parent companies, the aggregate value of the securities held by each such Fund as of the
fiscal year ended September 30, 2021.
Fund |
|
|
Regular Broker or Dealer
|
|
|
Aggregate Value of Securities Held
|
|
U.S. Government Money
Market Fund |
|
|
HSBC Securities,
Inc. |
|
|
|
$ |
35,000,000 |
|
|
|
|
|
|
|
|
|
$ |
35,000,000 |
|
|
Core Bond Fund |
|
|
Bank of America Corp. |
|
|
|
$ |
11,551,875 |
|
|
|
|
|
HSBC Securities, Inc. |
|
|
|
$ |
6,613,042 |
|
|
|
|
|
Morgan Stanley |
|
|
|
$ |
5,562,288 |
|
|
|
|
|
The Goldman Sachs Group, Inc. |
|
|
|
$ |
4,179,255 |
|
|
|
|
|
Credit Suisse Group AG |
|
|
|
$ |
4,164,906 |
|
|
|
|
|
JPMorgan Chase & Co. |
|
|
|
$ |
3,086,980 |
|
|
|
|
|
Barclays Bank
PLC |
|
|
|
$ |
2,972,169 |
|
|
|
|
|
|
|
|
|
$ |
38,130,515 |
|
|
Diversified Bond Fund |
|
|
Bank of America Corp. |
|
|
|
$ |
1,552,393 |
|
|
|
|
|
HSBC Securities, Inc. |
|
|
|
$ |
1,331,891 |
|
|
|
|
|
The Goldman Sachs Group, Inc. |
|
|
|
$ |
870,666 |
|
|
|
|
|
Barclays Bank PLC |
|
|
|
$ |
697,450 |
|
|
|
|
|
Credit Suisse Group AG |
|
|
|
$ |
629,222 |
|
|
|
|
|
Morgan Stanley |
|
|
|
$ |
597,430 |
|
|
|
|
|
JPMorgan Chase
& Co. |
|
|
|
$ |
465,859 |
|
|
|
|
|
|
|
|
|
$ |
6,144,911 |
|
|
Fund |
|
|
Regular Broker or Dealer
|
|
|
Aggregate Value of Securities Held
|
|
Balanced Fund |
|
|
Morgan Stanley |
|
|
|
$ |
2,673,446 |
|
|
|
|
|
Bank of America Corp. |
|
|
|
$ |
1,713,932 |
|
|
|
|
|
The Goldman Sachs Group, Inc. |
|
|
|
$ |
1,465,203 |
|
|
|
|
|
Morgan Stanley |
|
|
|
$ |
1,027,206 |
|
|
|
|
|
Credit Suisse Group AG |
|
|
|
$ |
400,237 |
|
|
|
|
|
Bank of New York |
|
|
|
$ |
149,973 |
|
|
|
|
|
State Street
Corp. |
|
|
|
$ |
29,228 |
|
|
|
|
|
|
|
|
|
$ |
7,459,225 |
|
|
Disciplined Value Fund |
|
|
JPMorgan Chase & Co. |
|
|
|
$ |
2,870,631 |
|
|
|
|
|
Bank of New York
|
|
|
|
$ |
581,023 |
|
|
|
|
|
|
|
|
|
$ |
3,451,654 |
|
|
Main Street Fund |
|
|
JPMorgan Chase
& Co. |
|
|
|
$ |
4,625,388 |
|
|
|
|
|
|
|
|
|
$ |
4,625,388 |
|
|
International Equity Fund |
|
|
UBS AG |
|
|
|
$ |
771,833 |
|
|
|
|
|
|
|
|
|
$ |
771,833 |
|
|
|
DESCRIPTION OF SHARES
The
Trust, an open-end, management investment company, is organized as a Massachusetts business trust under the laws of Massachusetts by an
Agreement and Declaration of Trust dated August 1, 1994 which was amended and restated as of November 21, 2011. A copy of the Declaration
of Trust is on file with the Secretary of The Commonwealth of Massachusetts. The fiscal year for each Fund ends on September 30.
The
Declaration of Trust permits the Trustees, without shareholder approval, to issue an unlimited number of shares and divide those shares
into an unlimited number of series of shares, representing separate investment portfolios with rights determined by the Trustees. Shares
of the Funds are transferable and have no preemptive, subscription, or conversion rights. Shares of the Funds are entitled to dividends
as declared by the Trustees. In the event of liquidation of a Fund, the Trustees would distribute, after paying or otherwise providing
for all charges, taxes, expenses, and liabilities belonging to the Fund, the remaining assets belonging to the Fund among the holders
of outstanding shares of the Fund. The Trustees have currently authorized the issuance of an unlimited number of full and fractional shares
of 14 series, 12 of which are described in this SAI.
The
Trustees may divide the shares of any series into two or more classes having such preferences or special or relative rights and privileges
as the Trustees may determine, without obtaining shareholder approval. The Trustees have currently authorized the establishment and designation
of ten classes of shares, between one and ten classes of shares for each series of the Trust: Class I Shares, Class R5 Shares, Service
Class Shares, Administrative Class Shares, Class A Shares, Class R4 Shares, Class R3 Shares, Class Y Shares, Class L Shares, and Class
C Shares. Class I Shares, Class R5 Shares, Service Class Shares, Administrative Class Shares, Class A Shares, Class R4 Shares, and Class
R3 Shares are offered by each series of the Trust, except the U.S. Government Money Market Fund which only offers Class R5 Shares. Class
Y Shares and Class C Shares are only offered by the Short-Duration Bond Fund and High Yield Fund. Class L Shares are only offered by the
Short-Duration Bond Fund. All shares of a particular class of each series represent an equal proportionate interest in the assets and
liabilities belonging to that series allocable to that class.
The
Trustees may also, without shareholder approval, combine two or more existing series (or classes) into a single series (or class).
The
Declaration of Trust provides for the perpetual existence of the Trust. The Declaration of Trust, however, provides that the Trust may
be terminated at any time by vote of at least 50% of the shares of each series entitled to vote and voting separately by series or by
the Trustees by written notice to the shareholders. Any series of the Trust may be terminated by vote of at least 50% of shareholders
of that series or by the Trustees by written notice to the shareholders of that series.
Shares
of the Funds entitle their holders to one vote per share, with fractional shares voting proportionally, in the election of Trustees and
on other matters submitted to the vote of shareholders. On any matter submitted to a vote of shareholders, all shares of the Trust then
entitled to vote shall, except as otherwise provided in the Declaration of Trust or the Bylaws, be voted in the aggregate as a single
class without regard to series or class, except that: (i) when required by
the 1940 Act or when the Trustees
shall have determined that the matter affects one or more series or classes materially differently, shares will be voted by individual
series or class; and (ii) when the Trustees have determined that the matter affects only the interests of one or more series or classes,
then only shareholders of such series or classes shall be entitled to vote thereon. A separate vote will be taken by the applicable Fund
on matters affecting the particular Fund, as determined by the Trustees. For example, a change in a fundamental investment policy for
a particular Fund would be voted upon only by shareholders of that Fund. In addition, a separate vote will be taken by the applicable
class of a Fund on matters affecting the particular class, as determined by the Trustees. For example, the adoption of a distribution
plan relating to a particular class and requiring shareholder approval would be voted upon only by shareholders of that class. Shares
of each Fund have noncumulative voting rights with respect to the election of trustees.
The
Trust is not required to hold annual meetings of its shareholders. However, special meetings of the shareholders may be called for the
purpose of electing Trustees and for such other purposes as may be prescribed by law, by the Declaration of Trust, or by the Bylaws. There
will normally be no meetings of shareholders for the purpose of electing Trustees except that the Trust will hold a shareholders’
meeting as required by applicable law or regulation.
The
Declaration of Trust may be amended by the Trustees without a shareholder vote, except to the extent a shareholder vote is required by
applicable law, the Declaration of Trust or the Bylaws, or as the Trustees may otherwise determine.
Under
Massachusetts law, shareholders of a Massachusetts business trust could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Declaration of Trust disclaims liability of the shareholders, Trustees, or officers for acts or
obligations of the Trust, which are binding only on the assets and property of the Trust, and require that notice of such disclaimer be
given in each note, bond, contract, instrument, certificate, or undertaking made or issued on behalf of the Trust by the Trustees or officers.
In addition, the Declaration of Trust provides that shareholders of a Fund are entitled to indemnification out of the assets of their
Fund to the extent that they are held personally liable for the obligations of their Fund solely by reason of being or having been a shareholder.
Thus, the risk of a shareholder of a Fund incurring financial loss on account of shareholder liability is considered remote since it is
limited to circumstances in which the disclaimer is inoperative and his or her Fund is unable to meet its obligations.
The
Declaration of Trust also permits the Trustees to charge shareholders directly for custodial, transfer agency, and servicing expenses,
but the Trustees have no present intention to charge shareholders directly for such expenses.
The
Declaration of Trust further provides that a Trustee will not be personally liable for errors of judgment or mistakes of fact or law.
However, nothing in the Declaration of Trust protects a Trustee against any liability to which the Trustee would otherwise be subject
by reason of his or her own willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct
of his or her office. The Declaration of Trust also provides for indemnification of each of its Trustees and officers, except that such
Trustees and officers may not be indemnified against any liability to the Trust or its shareholders to which he or she would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct
of his or her office.
SECURITIES LENDING
State
Street serves as securities lending agent to the Trust. As securities lending agent, State Street is responsible for the implementation
and administration of the securities lending program pursuant to the Securities Lending Agency Agreement (“Securities Lending Agreement”).
State Street acts as agent to the Trust to lend available securities with any person on its list of approved borrowers. State Street determines
whether a loan shall be made per the agreed upon parameters with the Trust and negotiates and establishes the terms and conditions of
the loan with the borrower. State Street ensures that all substitute interest, dividends, and other distributions paid with respect to
loan securities are credited to the applicable Fund’s relevant account on the date such amounts are delivered by the borrower to
State Street. State Street receives and holds, on the Fund’s behalf, collateral from borrowers to secure obligations of borrowers
with respect to any loan of available securities. State Street marks loaned securities and collateral to their market value each business
day in order to maintain the value of the collateral at no less than 102% (for domestic) and 105% (for foreign) of the market value of
the loaned securities. At the termination of the loan, State Street returns the collateral to the borrower upon the return of the loaned
securities to State Street. State Street invests cash collateral in accordance with the Securities Lending Agreement. State Street maintains
such records as are reasonably necessary to account for loans that are made and the income derived therefrom and makes available to the
Funds daily, monthly, and quarterly statements describing the loans made, and the income derived from the loans, during the period. State
Street performs compliance monitoring and testing of the securities lending program. The Board receives information quarterly describing
the outstanding loans and income made on such loans during the period.
The
dollar amounts of gross and net income from securities lending activities received and the related fees and/or compensation paid by each
applicable Fund during the fiscal year ended September 30, 2021 were as follows:
|
FUND
|
|
|
Gross income earned by the Fund from securities lending
activities
|
|
|
Fees paid to securities lending agent from a revenue split
|
|
|
Fees paid for any cash collateral management service (including fees
deducted from a pooled cash collateral reinvestment vehicle) that are not included in a revenue
split |
|
|
Administrative fees not included in a revenue
split |
|
|
Indemnification fees not included in
a revenue split |
|
|
Rebate (paid to borrower)
|
|
|
Other fees not included in a revenue split, if applicable, including
a description of those other
fees |
|
|
Aggregate fees/ compensation paid by the Fund for securities lending
activities
|
|
|
Net income from securities lending activities
|
|
|
Inflation-Protected
and Income Fund |
|
|
|
$ |
289 |
|
|
|
|
$ |
37 |
|
|
|
|
$ |
45 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
82 |
|
|
|
|
$ |
207 |
|
|
|
Core Bond Fund |
|
|
|
$ |
2,503 |
|
|
|
|
$ |
325 |
|
|
|
|
$ |
334 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
659 |
|
|
|
|
$ |
1,844 |
|
|
|
Diversified Bond
Fund |
|
|
|
$ |
2,522 |
|
|
|
|
$ |
337 |
|
|
|
|
$ |
277 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
614 |
|
|
|
|
$ |
1,908 |
|
|
|
Balanced Fund |
|
|
|
$ |
2,637 |
|
|
|
|
$ |
365 |
|
|
|
|
$ |
189 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
13 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
567 |
|
|
|
|
$ |
2,070 |
|
|
|
Disciplined Value
Fund |
|
|
|
$ |
901 |
|
|
|
|
$ |
134 |
|
|
|
|
$ |
8 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
142 |
|
|
|
|
$ |
759 |
|
|
|
Main Street Fund |
|
|
|
$ |
91,811 |
|
|
|
|
$ |
13,748 |
|
|
|
|
$ |
156 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
13,904 |
|
|
|
|
$ |
77,907 |
|
|
|
Disciplined
Growth Fund |
|
|
|
$ |
1,240 |
|
|
|
|
$ |
185 |
|
|
|
|
$ |
6 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
191 |
|
|
|
|
$ |
1,049 |
|
|
|
Small Cap
Opportunities Fund |
|
|
|
$ |
20,004 |
|
|
|
|
$ |
2,933 |
|
|
|
|
$ |
451 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
3,384 |
|
|
|
|
$ |
16,620 |
|
|
|
Global Fund |
|
|
|
$ |
8,812 |
|
|
|
|
$ |
1,268 |
|
|
|
|
$ |
346 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
13 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
1,627 |
|
|
|
|
$ |
7,185 |
|
|
|
International
Equity Fund |
|
|
|
$ |
33,194 |
|
|
|
|
$ |
4,779 |
|
|
|
|
$ |
1,308 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
28 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
6,114 |
|
|
|
|
$ |
27,080 |
|
|
|
Strategic
Emerging Markets Fund |
|
|
|
$ |
12,418 |
|
|
|
|
$ |
1,815 |
|
|
|
|
$ |
318 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
1 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
2,134 |
|
|
|
|
$ |
10,284 |
|
|
REDEMPTION OF SHARES
With
respect to each Fund, the Trustees may suspend the right of redemption, postpone the date of payment, or suspend the determination of
NAV: (a) for any period during which the NYSE is closed (other than for customary weekend and holiday closing); (b) for any
period during which trading in the markets the Fund normally uses is, as determined by the SEC, restricted; (c) when an emergency
exists as determined by the SEC so that disposal of the Fund’s investments or a determination of its NAV is not reasonably practicable;
or (d) for such other periods as the SEC by order may permit for the protection of the Trust’s shareholders. Under normal
circumstances, each Fund expects to meet redemption requests by using cash or cash equivalents in its portfolio and/or selling portfolio
assets to generate cash. Under stressed market conditions, a Fund may pay redemption proceeds using cash obtained through borrowing arrangements
that may be available from time to time. To the extent consistent with applicable laws and regulations, the Funds reserve the right to
satisfy all or a portion of a redemption request by distributing securities or other property in lieu of cash (“in-kind”
redemptions), under both normal and stressed market conditions. In-kind redemptions are typically used to meet redemption requests that
represent a large percentage of the Fund’s net assets in order to minimize the effect of the large redemption on the Fund
and its remaining shareholders. Some Funds may be limited in their ability to use assets other than cash to meet redemption requests due
to restrictions on ownership of their portfolio assets. Any in-kind redemption will be effected through a distribution of all publicly
traded portfolio securities or securities for which quoted bid prices are available, subject to certain exceptions. The securities distributed
in an in-kind redemption will be valued in the same manner as they are valued for purposes of computing the Fund’s NAV. These securities
are subject to market risk until they are sold and may increase or decrease in value prior to converting them into cash. You may incur
brokerage and other transaction costs, and could incur a taxable gain or loss for income tax purposes when converting the securities to
cash.
In
addition, the U.S. Government Money Market Fund may, to the extent permitted by SEC rule, suspend redemptions prior to the liquidation
of the Fund, if the Trustees determine that the deviation between the Fund’s amortized cost price per share and its current market-based
NAV value per share may result in material dilution or other unfair results to investors or existing shareholders.
VALUATION OF PORTFOLIO SECURITIES
The
NAV of each Fund’s shares is determined once daily as of the close of regular trading on the NYSE, on each day the NYSE is open
for trading (a “business day”). The NYSE normally closes at 4:00 p.m. Eastern Time, but may close earlier on some days.
If the NYSE is scheduled to close early, the business day will be considered to end as of the time of the NYSE’s scheduled close.
A Fund will not treat an intraday disruption in NYSE trading or other event that causes an unscheduled closing of the NYSE as a close
of business of the NYSE for these purposes and will instead fair value securities in accordance with procedures approved annually by the
Board, and under the general oversight of the Board. The NYSE currently is not open for trading on New Year’s Day, Martin Luther
King, Jr. Day, President’s Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving
Day, and Christmas Day. Each Fund calculates the NAV of each of its classes of shares by dividing the total value of the assets attributable
to that class, less the liabilities attributable to that class, by the number of shares of that class that are outstanding. On holidays
and other days when the NYSE is closed, each Fund’s NAV generally is not calculated and the Funds do not anticipate accepting buy
or sell orders. However, the value of each Fund’s assets may still be affected on such days to the extent that a Fund holds foreign
securities that trade on days that foreign securities markets are open. It is the intention of the U.S. Government Money Market Fund to
maintain a stable NAV per share of $1.00, although this cannot be assured.
Equity
securities and derivative contracts that are actively traded on a national securities exchange or contract market are valued on the basis
of information furnished by a pricing service, which provides the last reported sale price, or, in the case of futures contracts, the
settlement price, for securities or derivatives listed on the exchange or contract market or the official closing price on the NASDAQ
National Market System (“NASDAQ System”), or in the case of OTC securities for which an official closing price is unavailable
or not reported on the NASDAQ System, the last reported bid price. Portfolio securities traded on more than one national securities exchange
are valued at the last price at the close of the exchange representing the principal market for such securities. Debt securities (with
the exception of debt securities held by the U.S. Government Money Market Fund) are valued on the basis of valuations furnished by a pricing
service, which generally determines valuations taking into account factors such as institutional-size trading in similar securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. Shares of other open-end mutual funds are
valued at their closing NAVs as reported on each business day.
Investments
for which market quotations are readily available are marked to market daily based on those quotations. Market quotations may be provided
by third-party vendors or market makers, and may be determined on the basis of a variety of factors, such as broker quotations, financial
modeling, and other market data, such as market indexes and yield curves, counterparty information, and foreign exchange rates. U.S. Government
and agency securities may be valued on the basis of market quotations or using a model that may incorporate market observable data such
as reported sales of similar securities, broker quotes, yields, bids, offers, quoted market prices, and reference data. The fair values
of OTC derivative contracts, including forward, swap, and option contracts related to interest rates, foreign currencies, credit standing
of reference entities, equity prices, or commodity prices, may be based on market quotations or may be modeled using a series of techniques,
including simulation models, depending on the contract and the terms of the transaction. The fair values of asset-backed securities and
mortgage-backed securities are estimated based on models that consider the estimated cash flows of each debt tranche of the issuer, established
benchmark yield, and estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche including,
but not limited to, prepayment speed assumptions and attributes of the collateral.
Investments
for which market quotations are not available or for which a pricing service or vendor does not provide a value, or for which such market
quotations or values are considered by the investment adviser or subadviser to be unreliable (including, for example, certain foreign
securities, thinly-traded securities, certain restricted securities, certain initial public offerings, or securities whose values may
have been affected by a significant event) are stated at fair valuations determined in good faith by the Funds’ Valuation Committee1
in accordance with procedures approved annually by the Board, and under the general oversight of the Board. The Funds’ Valuation
Committee employs various methods to determine fair valuations including a regular review of significant inputs and assumptions and review
of any related market activity. The Funds’ Valuation Committee reports to the Board at its regularly scheduled meetings. It is
possible that fair
1
The
voting members of the Valuation Committee consist of the President, Treasurer, Assistant Treasurers, Vice Presidents (except for the CCO,
Secretary, and Assistant Secretaries) of the Trust, as well as such other members as the Board may from time to time designate. The non-voting
members of the Valuation Committee consist of the CCO, Secretary, and Assistant Secretaries. The Valuation Committee reviews and determines
the fair valuation of portfolio securities and the Funds’ pricing procedures in general.
value prices will be used
by the Funds to a significant extent. The value determined for an investment using the Funds’ fair value procedures may differ
from recent market prices for the investment and may be significantly different from the value realized upon the sale of such investment.
The
Funds may invest in securities that are traded principally in foreign markets and that trade on weekends and other days when the Funds
do not price their shares. As a result, the values of the Funds’ portfolio securities may change on days when the prices of the
Funds’ shares are not calculated. The prices of the Funds’ shares will reflect any such changes when the prices of the Funds’
shares are next calculated, which is the next business day. The Funds may use fair value pricing more frequently for securities primarily
traded in foreign markets because, among other things, most foreign markets close well before the Funds value their securities. The earlier
close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred
in the interim. The Funds’ investments may be priced based on fair values provided by a third-party vendor, based on certain factors
and methodologies applied by such vendor, in the event that there is movement in the U.S. market, between the close of the foreign market
and the time the Funds calculate their NAVs.
The
prices of foreign securities are quoted in foreign currencies. All assets and liabilities expressed in foreign currencies are converted
into U.S. dollars at the mean between the buying and selling rates of such currencies against the U.S. dollar at the end of each business
day. Changes in the exchange rate, therefore, if applicable, will affect the NAV of shares of a Fund even when there has been no change
in the values of the foreign securities measured in terms of the currency in which they are denominated.
The
proceeds received by each Fund for each issue or sale of its shares, all net investment income, and realized and unrealized gain will
be specifically allocated to such Fund and constitute the underlying assets of that Fund. The underlying assets of each Fund will be segregated
on the Trust’s books of account, and will be charged with the liabilities in respect of such Fund and with a share of the general
liabilities of the Trust. Expenses with respect to any two or more Funds are to be allocated in proportion to the NAVs of the respective
Funds except where allocations of direct expenses can otherwise be fairly made. Each class of shares of a Fund will be charged with liabilities
directly attributable to such class, and other Fund expenses will be allocated in proportion to the NAVs of the respective classes.
On
December 3, 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which addresses valuation practices and the role of the board of directors
with respect to the fair value of the investments of a registered investment company. Among other things, Rule 2a-5 will permit a fund’s
board to designate the fund’s primary investment adviser to perform the fund’s fair value determinations, which will be
subject to board oversight and certain reporting and other requirements intended to ensure that the board receives the information it
needs to oversee the investment adviser’s fair value determinations. Compliance with Rule 2a-5 will not be required until September
2022. The Funds’ fair value policies and procedures and valuation practices may be impacted as the Funds come into compliance with
Rule 2a-5 and a greater number of the Funds’ securities may be subject to fair value pricing.
U.S. Government Money Market Fund
The
U.S. Government Money Market Fund’s debt securities are typically valued at amortized cost, but may be valued using a vendor quote
if the Fund’s investment adviser determines it more closely approximates current market value. Amortized cost involves initially
valuing an instrument at its cost and thereafter making a constant amortization to maturity of any discount or premium, regardless of
the impact of changes in market interest rates on the market value of the instrument. While this method provides certainty of valuation,
it may result in periods in which the value, as determined by amortized cost, is higher or lower than the price the U.S. Government Money
Market Fund would receive if it sold the instrument. During periods of declining interest rates, the daily yield on shares of the U.S.
Government Money Market Fund computed as described below may tend to be higher than a like computation made by a fund with identical investments
utilizing a method of valuation based upon market prices and estimates of market prices for its portfolio instruments. Thus, if the use
of amortized cost by the U.S. Government Money Market Fund resulted in a lower aggregate portfolio value on a particular day, a prospective
investor in the U.S. Government Money Market Fund would be able to obtain a somewhat higher yield than would result from investment in
a fund utilizing market values, and existing investors in the U.S. Government Money Market Fund would receive less investment income.
The converse would apply in a period of rising interest rates.
The
valuation of the U.S. Government Money Market Fund’s portfolio instruments based upon their amortized cost and the concomitant
maintenance of a stable NAV per share of $1.00 is permitted in accordance with Rule 2a-7 under the 1940 Act.
The
Board has established procedures designed to stabilize, to the extent reasonably possible, the U.S. Government Money Market Fund’s
NAV per share as computed for the purpose of sales and redemptions at $1.00. Such procedures
include periodic review of
the U.S. Government Money Market Fund’s portfolio holdings to determine the extent of any deviation between the NAV of the U.S.
Government Money Market Fund calculated by using available market quotations and its NAV calculated using amortized cost, and whether
such deviation may result in material dilution or is otherwise unfair to investors or existing shareholders. In the event the Board determines
that such a deviation exists, it may take such corrective action as it regards as necessary and appropriate, including: the sale of portfolio
instruments prior to maturity in order to realize capital gains or losses or to shorten average portfolio maturity; withholding dividends;
redemptions of shares in kind; or establishing a NAV per share by using available market quotations (which would likely differ from the
Fund’s NAV calculated using amortized cost); or suspending redemptions and liquidating the Fund.
Since
the net income of the U.S. Government Money Market Fund is declared as a dividend each time it is determined, the NAV per share of the
U.S. Government Money Market Fund typically remains the same immediately after each determination and dividend declaration as before.
Any increase in the value of a shareholder’s investment in the U.S. Government Money Market Fund representing the reinvestment
of dividend income is reflected by an increase in the number of shares of the U.S. Government Money Market Fund in the shareholder’s
account, which increase is recorded promptly after the end of each calendar month.
For
this purpose the net income of the U.S. Government Money Market Fund (from the time of the immediately preceding determination thereof)
consists of all interest income accrued on its portfolio, plus realized gains or minus realized losses, and less all expenses and liabilities
chargeable against income. Interest income includes discount earned (including both original issue and market discount) on paper purchased
at a discount, less amortization of premium, accrued ratably to the date of maturity. Expenses, including the compensation payable to
MML Advisers, are accrued each day.
Should
the U.S. Government Money Market Fund incur or anticipate any unusual expense, or loss or depreciation which would adversely affect its
NAV per share or income for a particular period, the Board would at that time consider whether to adhere to the present dividend policy
described above or to revise it in light of the then prevailing circumstances. For example, if the U.S. Government Money Market Fund’s
NAV per share were reduced, or were anticipated to be reduced, below its otherwise stable NAV of $1.00 per share, the Board might suspend
further dividend payments until the NAV returned to $1.00. Thus, such expenses or losses or depreciation might result in an investor receiving
no dividends for the period during which he held his shares and in his receiving upon redemption a price per share lower than what he
paid.
TAXATION
Taxation of the Funds: In General
Each
Fund has elected and intends to qualify each year to be treated as a regulated investment company under Subchapter M of the Code. In order
to qualify as a regulated investment company, a Fund must, among other things:
(a)
derive
at least 90% of its gross income for each taxable year from:
(i)
dividends,
interest, payments with respect to securities loans, gains from the sale or other disposition of stock, securities, or foreign currencies,
and other income (including, but not limited to, gains from options, futures, or forward contracts) derived with respect to its business
of investing in such stock, securities, or currencies; and
(ii)
net
income derived from interests in “qualified publicly traded partnerships” (as defined below);
(b)
distribute
with respect to each taxable year at least 90% of the sum of its investment company taxable income (generally taxable ordinary income
and the excess, if any, of net short-term capital gains over net long-term capital losses) and its net tax-exempt income, if any, for
such year in a manner qualifying for the dividends-paid deduction; and
(c)
diversify
its holdings so that, at the close of each quarter of its taxable year:
(i)
at
least 50% of the value of its total assets consists of cash, cash items, U.S. Government securities, securities of other regulated investment
companies, and other securities limited generally with respect to any one issuer to not more than 5% of the total assets of the Fund and
not more than 10% of the outstanding voting securities of such issuer; and
(ii)
not
more than 25% of the value of its total assets is invested, including through corporations in which the Fund owns a 20% or more voting
stock interest, (x) in the securities of any one issuer or two or more issuers which the Fund controls and that are engaged in the same,
similar, or related trades or businesses (other than U.S. Government securities), or (y) in the securities of one or more qualified publicly
traded partnerships (as defined below).
For purposes
of the 90% gross income requirement described in (a) above, income derived from a partnership will be treated as qualifying income only
to the extent such income is attributable to items of income of the partnership which would be qualifying income if realized directly
by the regulated investment company. However, 100% of the net income derived from an interest in a “qualified publicly traded partnership”
will be treated as qualifying income. A “qualified publicly traded partnership” is a partnership (x) the interests in which
are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof, and
(y) that derives less than 90% of its income from the qualifying income described in paragraph (a)(i) above. In general, such entities
will be treated as partnerships for U.S. federal income tax purposes because they meet the passive income requirement under Code section
7704(c)(2). Certain of a Fund’s investments in MLPs and ETFs, if any, may qualify as interests in qualified publicly traded partnerships,
as described further below. In addition, although in general the passive loss rules of the Code do not apply to regulated investment companies,
such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded
partnership.
For
purposes of the diversification test in (c) above, the term “outstanding voting securities of such issuer” will include
the equity securities of a qualified publicly traded partnership. Also for purposes of the diversification test in (c) above, the identification
of the issuer (or, in some cases, issuers) of a particular Fund investment can depend on the terms and conditions of that investment.
In some cases, identification of the issuer (or issuers) is uncertain under current law, and an adverse determination or future guidance
by the IRS with respect to identification of the issuer for a particular type of investment may adversely affect the Fund’s ability
to meet the diversification test in (c) above.
The
90% gross income requirement described in (a) above and the diversification test described in (c) above may limit the extent to which
a Fund can engage in certain derivative transactions, as well as the extent to which it can invest in commodities, commodities-related
investments, and MLPs.
In
general, if a Fund qualifies as a regulated investment company that is accorded special tax treatment, that Fund will not be subject to
U.S. federal income tax on income or gains distributed in a timely manner to its shareholders in the form of dividends (including capital
gain dividends). As long as a Fund qualifies as a regulated investment company, the Fund under present law will not be subject to any
excise or income taxes imposed by Massachusetts.
If
a Fund were to fail to meet the income, diversification or distribution test described above, the Fund could in some cases cure such failure,
including by paying a Fund-level tax, paying interest, making additional distributions, or disposing of certain assets. If a Fund were
ineligible to or otherwise did not cure such failure for any year, or if a Fund were otherwise to fail to qualify as a regulated investment
company in any taxable year, that Fund would be subject to tax on its taxable income at corporate rates. In addition, all distributions
from earnings and profits, including any distributions of net tax-exempt income and net long-term capital gains, would be taxable to shareholders
as ordinary income. Some portions of such distributions may be eligible for the dividends-received deduction in the case of corporate
shareholders or possibly to be treated as qualified dividend income to shareholders taxed as individuals. Finally, the Fund could be required
to recognize unrealized gains, pay substantial taxes and interest, and make substantial distributions before requalifying as a regulated
investment company.
Each
Fund intends to distribute at least annually to its shareholders all or substantially all of its investment company taxable income (computed
without regard to the dividends-paid deduction), its net tax-exempt income (if any), and net capital gain (that is, the excess of net
long-term capital gain over net short-term capital loss, in each case determined with reference to any loss carryforwards). Investment
company taxable income or net capital gain that is retained by a Fund will be subject to tax at regular corporate rates. However, a Fund
may designate any retained net capital gain amount as undistributed capital gains in a timely notice to its shareholders who (i) will
be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their shares of such undistributed amount,
and (ii) will be entitled to credit their proportionate shares of the tax paid by the Fund on such undistributed amount against their
federal income tax liabilities, if any, and to claim refunds to the extent the credit exceeds such liabilities. If a Fund makes this designation,
the tax basis of shares owned by a shareholder of a Fund will, for U.S. federal income tax purposes, be increased by an amount equal to
the difference between the amount of undistributed capital gains included in the shareholder’s gross income under clause (i) of
the preceding sentence and the tax deemed paid by the shareholder under clause (ii) of the preceding sentence. A Fund is not required
to, and there can be no assurance the Fund will, make this designation if it retains all or a portion of its net capital gain in a taxable
year.
In
determining its net capital gain, including in connection with determining the amount available to support a capital gain dividend, its
taxable income, and its earnings and profits, a regulated investment company may elect to treat part or all of any post-October capital
loss (defined as any net capital loss attributable to the portion of the taxable year after October 31 or, if there is no such loss, the
net long-term capital loss or net short-term capital loss attributable to such portion of the
taxable year) and certain
late-year ordinary losses (generally, the sum of its (i) net ordinary losses from the sale, exchange or other taxable disposition of property,
attributable to the portion of the taxable year after October 31, and its (ii) other net ordinary losses attributable to the portion
of the taxable year after December 31) as if incurred in the succeeding taxable year.
Capital
losses in excess of capital gains (“net capital losses”) are not permitted to be deducted against a Fund’s net investment
income. If a Fund has a net capital loss for any year, the amount thereof may be carried forward to offset capital gains in future years,
thereby reducing the amount the Fund would otherwise be required to distribute in such future years to qualify for the special tax treatment
accorded regulated investment companies and avoid a Fund-level tax. If a Fund incurs or has incurred net capital losses, those losses
will be carried forward to one or more subsequent taxable years without expiration; any such carryforward losses will retain their character
as short-term or long-term. See the most recent annual shareholder report for each Fund’s capital loss carryforwards as of the
end of its most recently ended fiscal year.
A
nondeductible excise tax at the rate of 4% will be imposed on the excess, if any, of each Fund’s “required distribution”
over its actual distributions in any calendar year. The “required distribution” is 98% of the Fund’s ordinary income
for the calendar year plus 98.2% of its capital gain net income recognized during the one-year period ending on October 31 (or November
30 or December 31, if the Fund is permitted to elect and so elects) plus undistributed amounts from prior years. For these purposes, ordinary
gains and losses from the sale, exchange or other taxable disposition of property that would be properly taken into account after October
31 (or November 30, if the Fund makes the election referred to above) are treated as arising on January 1 of the following calendar year;
in the case of a Fund with a December 31 year end, no such gains or losses will be so treated. Each Fund intends to make distributions
sufficient to avoid imposition of the excise tax, although there can be no assurance that it will be able to do so. Distributions declared
by a Fund during October, November, or December to shareholders of record on a date in any such month and paid by the Fund during the
following January will be treated for federal tax purposes as paid by the Fund and received by shareholders on December 31 of the year
in which declared.
Under
current law, a Fund may treat the portion of redemption proceeds paid to redeeming shareholders that represents the redeeming shareholders’
portion of the undistributed investment company taxable income and net capital gain of the Fund as a distribution of investment company
taxable income and net capital gain on the Fund’s tax return. This practice, which involves the use of tax equalization, will have
the effect of reducing the amount of income and gains that a Fund is required to distribute as dividends to shareholders in order for
the Fund to avoid federal income tax and excise tax. This practice may also reduce the amount of the distributions required to be made
to non-redeeming shareholders. The amount of any undistributed income will be reflected in the value of the shares of the Fund, and thus
the total return on a shareholder’s investment will not be reduced as a result of this practice.
Fund Distributions
Except
in the case of certain shareholders eligible for preferential tax treatment, e.g., qualified retirement or pension trusts, shareholders
of each Fund generally will be subject to federal income taxes on Fund distributions as described herein. Distributions are taxable whether
shareholders receive them in cash or reinvest them in additional shares through a dividend reinvestment plan. A shareholder whose distributions
are reinvested in shares will be treated as having received a dividend equal to the fair market value of the new shares issued to the
shareholder.
Distributions
are taxable to shareholders even if they are paid from income or gains earned by a Fund before a shareholder’s investment (and
thus were included in the price the shareholder paid for his or her shares), even though such dividends and distributions may economically
represent a return of a particular shareholder’s investment. Such distributions are likely to occur in respect of shares purchased
at a time when a Fund’s NAV reflects gains that are unrealized, or income or gains that are realized but not distributed. Such
realized income or gains may be required to be distributed even when the Fund’s NAV also reflects unrealized losses.
Distributions
by each Fund of investment income generally will be taxable to shareholders as ordinary income. Taxes on distributions of capital gains
are determined by how long the Fund owned (or is deemed to have owned) the investments that generated them, rather than by how long a
shareholder has owned (or is deemed to have owned) his or her shares. Distributions of gains from the sale of investments that the Fund
owned for one year or less will be taxable as ordinary income. Properly reported distributions of long-term capital gains, if any, are
taxable in the hands of an investor as long-term gain includible in net capital gain and taxed to individuals at reduced rates. Tax rules
can alter a Fund’s holding period in investments and thereby affect the tax treatment of gain or loss on such investments.
The
IRS and the Department of the Treasury have issued regulations that impose special rules in respect of capital gain dividends received
through partnership interests constituting “applicable partnership interests” under Section 1061 of the Code.
Distributions
of investment income reported by a Fund as derived from “qualified dividend income” will be taxed in the hands of individuals
at the rates applicable to long-term capital gains, provided that both the shareholder and the Fund meet certain holding period and other
requirements. In order for some portion of the dividends received by a Fund shareholder to be “qualified dividend income,”
the Fund must meet certain holding period and other requirements with respect to some portion of the dividend-paying stocks in its portfolio
and the shareholder must meet certain holding period and other requirements with respect to the Fund’s shares. A dividend will
not be treated as qualified dividend income (at either the Fund or shareholder level) (1) if the dividend is received with respect to
any share of stock held for fewer than 61 days during the 121-day period beginning on the date which is 60 days before the date on which
such share becomes ex-dividend with respect to such dividend (or, in the case of certain preferred stock, 91 days during the 181-day period
beginning 90 days before such date), (2) to the extent that the recipient is under an obligation (whether pursuant to a short sale or
otherwise) to make related payments with respect to positions in substantially similar or related property, (3) if the recipient elects
to have the dividend income treated as investment income for purposes of the limitation on deductibility of investment interest, or (4)
if the dividend is received from a foreign corporation that is (a) not eligible for the benefits of a comprehensive income tax treaty
with the United States (with the exception of dividends paid on stock of such a foreign corporation that is readily tradable on an established
securities market in the United States) or (b) treated as a passive foreign investment company.
In
general, distributions of investment income reported by each Fund as derived from qualified dividend income will be treated as qualified
dividend income by a shareholder taxed as an individual, provided the shareholder meets the holding period and other requirements described
above with respect to the Fund’s shares. If the aggregate qualified dividends received by a Fund during any taxable year are 95%
or more of its gross income (excluding net long-term capital gain over net short-term capital loss), then 100% of the Fund’s dividends
(other than dividends properly reported as capital gain dividends) will be eligible to be treated as qualified dividend income. In general,
Funds investing primarily in fixed income investments do not expect a significant portion of their distributions to be derived from qualified
dividend income.
Dividends
of net investment income received by corporate shareholders of each Fund will qualify for the dividends-received deduction generally available
to corporations to the extent those dividends are reported as being attributable to qualifying dividends received by the Fund from domestic
corporations for the taxable year. In general, a dividend received by a Fund will not be treated as a dividend eligible for the dividends-received
deduction (1) if it has been received with respect to any share of stock that the Fund has held for less than 46 days (91 days in the
case of certain preferred stock) during the 91-day period beginning on the date which is 45 days before the date on which such share becomes
ex-dividend with respect to such dividend (during the 181-day period beginning 90 days before such date in the case of certain preferred
stock) or (2) to the extent that the Fund is under an obligation (pursuant to a short sale or otherwise) to make related payments with
respect to positions in substantially similar or related property. Moreover, the dividends-received deduction may otherwise be disallowed
or reduced (1) if the corporate shareholder fails to satisfy the foregoing requirements with respect to its shares of the Fund or (2)
by application of various provisions of the Code (for instance, the dividends-received deduction is reduced in the case of a dividend
received on debt-financed portfolio stock (generally, stock acquired with borrowed funds)). In general, Funds investing primarily in fixed
income investments do not expect a significant portion of their distributions to qualify for the dividends-received deduction.
A
portion of the interest paid or accrued on certain high yield discount obligations owned by a Fund may be treated as a dividend for purposes
of the corporate dividends-received deduction. In such cases, if the issuer of the high yield discount obligations is a domestic corporation,
dividend payments by a Fund may be eligible for the dividends received deduction to the extent of the deemed dividend portion of such
accrued interest.
Any
distribution of income that is attributable to (i) income received by a Fund in lieu of dividends with respect to securities on loan pursuant
to a securities lending transaction, or (ii) dividend income received by the Fund on securities it temporarily purchased from a counterparty
pursuant to a repurchase agreement that is treated for U.S. federal income tax purposes as a loan by the Fund, will not constitute qualified
dividend income to individual shareholders and will not be eligible for the dividends-received deduction for corporate shareholders. Distributions
by a Fund to its shareholders that the Fund properly reports as “section 199A dividends,” as defined and subject to certain
conditions described below, are treated as qualified REIT dividends in the hands of non-corporate shareholders. Non-corporate shareholders
are permitted a federal income tax deduction equal to 20% of qualified REIT dividends received by them, subject to certain limitations.
Very generally, a “section 199A dividend” is any dividend or portion thereof that is attributable to certain dividends received
by the regulated investment company from REITs, to the extent such dividends are properly reported as such by the regulated investment
company in a written notice to its shareholders. A section 199A dividend is treated as a qualified REIT dividend only if the shareholder
receiving such dividend holds the dividend-paying regulated investment company shares for at least 46 days of the 91-day period beginning
45 days before the shares become ex-dividend, and is not under
an obligation to make related
payments with respect to a position in substantially similar or related property. A Fund is permitted to report such part of its dividends
as section 199A dividends as are eligible, but is not required to do so.
The
Code generally imposes a 3.8% Medicare contribution tax on the net investment income of certain individuals, trusts, and estates to the
extent their income exceeds certain threshold amounts. For these purposes, “net investment income” generally includes, among
other things, (i) distributions paid by a Fund of net investment income and capital gains as described above, and (ii) any net gain from
the sale, redemption, exchange, or other taxable disposition of Fund shares. Shareholders are advised to consult their tax advisers regarding
the possible implications of this additional tax on their investment in the Fund.
If
a Fund makes a distribution to a shareholder in excess of its current and accumulated “earnings and profits” in and with
respect to any taxable year, the excess distribution will be treated as a return of capital to the extent of the shareholder’s
tax basis in his or her shares, and thereafter as capital gain. A return of capital is not taxable, but it reduces a shareholder’s
tax basis in his or her shares, thus reducing any loss or increasing any gain on the shareholder’s subsequent taxable disposition
of his or her shares.
Sales, Redemptions, and Exchanges
Sales,
redemptions, and exchanges of each Fund’s shares are taxable events and, accordingly, shareholders subject to federal income taxes
may realize gains and losses on these transactions. If shares have been held for more than one year, gain or loss realized generally will
be long-term capital gain or loss, provided the shareholder holds the shares as a capital asset. Otherwise, the gain or loss on a taxable
disposition of Fund shares will be treated as short-term capital gain or loss. However, a loss on a sale of Fund shares held by a shareholder
for six months or less will be treated as a long-term capital loss to the extent of any long-term capital gain dividend paid to the
shareholder with respect to such shares. Further, no loss will be allowed on a sale of Fund shares to the extent the shareholder acquires
identical shares of the same Fund within 30 days before or after the disposition. In such case, the basis of the newly purchased
shares will be adjusted to reflect the disallowed loss. In the case of individuals holding shares in a Fund (other than the U.S. Government
Money Market Fund) directly, upon the sale, redemption or exchange of Fund shares, the Fund or, in the case of shares purchased through
a financial intermediary, the financial intermediary may be required to provide the shareholder and the IRS with cost basis and certain
other related tax information about the Fund shares sold, redeemed, or exchanged. See the Funds’ Prospectus for more information.
Under
Treasury regulations, if a shareholder recognizes a loss with respect to Fund shares of $2 million or more for an individual shareholder
or $10 million or more for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on IRS Form 8886.
Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders
of a regulated investment company are not excepted. Future guidance may extend the current exception from this reporting requirement to
shareholders of most or all regulated investment companies. The fact that a loss is reportable under these regulations does not affect
the legal determination of whether the taxpayer’s treatment of the loss is proper. Shareholders should consult their tax advisers
to determine the applicability of these regulations in light of their individual circumstances.
Certain Investments in Debt Obligations
Some
debt obligations with a fixed maturity date of more than one year from the date of issuance (and all zero-coupon debt obligations with
a fixed maturity date of more than one year from the date of issuance) that are acquired by a Fund will be treated as being issued with
original issue discount (“OID”). Generally, the amount of the OID is treated as interest income and is included in taxable
income (and required to be distributed) over the term of the debt security, even though payment of that amount is not received until a
later time, usually when the debt security matures. Payment-in-kind securities will also give rise to income which is required to be distributed
and is taxable even though a Fund holding the security receives no interest payment in cash on the security during the year.
Some
debt obligations with a fixed maturity date of more than one year from the date of issuance that are acquired by a Fund in the secondary
market may be treated as having “market discount.” Very generally, market discount is the excess of the stated redemption
price of a debt obligation (or in the case of an obligation issued with OID, its “revised issue price”) over the purchase
price of such obligation. Generally, any gain recognized on the disposition of, and any partial payment of principal on, a debt security
having market discount is treated as ordinary income to the extent the gain, or principal payment, does not exceed the “accrued
market discount” on such debt security. Alternatively, the Fund may elect to accrue market discount currently, in which case the
Fund will be required to include the accrued market discount in the Fund’s income (as ordinary income) and thus distribute it over
the term of the debt security, even though payment of that
amount
is not received until a later time, upon partial or full repayment or disposition of the debt security. The rate at which the market discount
accrues, and thus is included in the Fund’s income, will depend in part upon which of the permitted accrual methods the Fund elects.
Some
debt obligations with a fixed maturity date of one year or less from the date of issuance that are acquired by a Fund may be treated as
having OID, or acquisition discount (very generally, the excess of the stated redemption price over the purchase price) in the case of
certain types of debt obligations. Generally, the Fund will be required to include the OID, or acquisition discount, as ordinary income
over the term of the debt security, even though payment of that amount is not received until a later time, usually when the debt security
matures. A Fund may make one or more of the elections applicable to debt obligations having acquisition discount, or OID, which could
affect the character and timing of recognition of income by the Fund.
As
indicated above, a Fund that invests in certain debt instruments may be required to pay out as an income distribution each year an amount
which is greater than the total amount of cash interest the Fund actually received. Such distributions may be made from the cash assets
of the Fund or by liquidation of portfolio securities, if necessary. The Fund may realize gains or losses from such liquidations. In the
event a Fund realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution than they
would in the absence of such transactions.
Investments
in debt obligations that are at risk of or in default present special tax issues for a Fund. Tax rules are not entirely clear about issues
such as when a Fund may cease to accrue interest, OID, or market discount; whether and to what extent a Fund should recognize market discount
on such a debt obligation; when and to what extent a Fund may take deductions for bad debts or worthless securities; and how a Fund should
allocate payments received on obligations in default between principal and interest. These and other related issues will be addressed
by each Fund when, and if, it invests in such securities, in order to seek to ensure that it distributes sufficient income to preserve
its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.
Derivative Transactions
If
a Fund engages in derivative transactions, including transactions in options, futures contracts, forward contracts, swap agreements, foreign
currencies, and straddles, or other similar transactions, including for hedging purposes, it will be subject to special tax rules (including
constructive sale, mark-to-market, straddle, wash sale, and short sale rules), the effect of which may be to accelerate income to the
Fund, defer losses to the Fund, cause adjustments in the holding periods of the Fund’s securities, convert long-term capital gains
into short-term capital gains, or convert short-term capital losses into long-term capital losses. These rules could therefore affect
the amount, timing, and character of distributions to shareholders.
A
Fund’s transactions in foreign currency-denominated debt instruments and certain of its derivative activities may produce a difference
between its book income and its taxable income. If a Fund’s book income exceeds its taxable income, the distribution (if any) of
such excess generally will be treated as (i) a dividend to the extent of the Fund’s remaining earnings and profits (including earnings
and profits arising from tax-exempt income), (ii) thereafter, as a return of capital to the extent of the recipient’s basis in
its shares, and (iii) thereafter, as gain from the sale or exchange of a capital asset. If a Fund’s book income is less than taxable
income, the Fund could be required to make distributions exceeding book income to qualify as a regulated investment company and to eliminate
fund-level income tax.
Investments in Regulated Investment Companies and Other
Investment Funds
To
the extent a Fund invests its assets in shares of ETFs or other investment companies that are regulated investment companies (“underlying
funds”), its distributable income and gains will normally consist of distributions from such underlying funds and gains and losses
on the disposition of shares of such underlying funds. To the extent that such an underlying fund realizes net losses on its investments
for a given taxable year, the Fund will not be able to recognize its share of those losses to offset capital gains the Fund realized from
other sources until and only to the extent that it disposes of shares of the underlying fund in a transaction qualifying for sale or exchange
treatment (although such losses of an underlying fund may reduce distributions to the Fund from that underlying fund in future taxable
years). Moreover, even when a Fund does make a disposition of shares of an underlying fund, a portion of its loss may be recognized as
a long-term capital loss, which the Fund will not be able to offset against its ordinary income (including distributions of any net short-term
capital gains realized by the underlying fund).
As
a result of the foregoing rules, and certain other special rules, the amounts of net investment income and net capital gains that a Fund
will be required to distribute to shareholders may be greater than such amounts would have been had the Fund invested directly in the
securities held by the underlying funds. For similar reasons, the character of distributions from
the Fund will not necessarily
be the same as it would have been had the Fund invested directly in the securities held by the underlying funds. Investing through underlying
funds can therefore affect the amount, timing and character of distributions to shareholders, and may increase the amount of taxes payable
by shareholders.
If
at the close of each quarter of a Fund’s taxable year, at least 50% of its total assets consists of interests in other regulated
investment companies, the Fund will be a “qualified fund of funds.” In that case, the Fund is permitted to elect to pass
through to its shareholders foreign income and other similar taxes paid by the Fund in respect of foreign securities held directly by
the Fund or by a regulated investment company in which its invests that itself elected to pass such taxes through to its shareholders,
so that shareholders of the Fund will be eligible to claim a tax credit or deduction for such taxes. However, even if a Fund qualifies
to make such election for any year, it may determine not to do so. See “Foreign Taxes and Investments” below.
To
the extent a Fund invests in commodity-related ETFs that qualify as qualified publicly traded partnerships, the net income derived from
such ETFs will constitute qualifying income for purposes of the 90% gross income test (as noted above). If such an ETF were to fail to
qualify as a qualified publicly traded partnership, a portion of the gross income derived from that ETF could constitute nonqualifying
income to the Fund for purposes of the 90% gross income test.
The
foregoing is only a general description of certain federal tax consequences of investing in ETFs and other underlying funds.
Foreign Taxes and Investments
Income
proceeds and gains received by a Fund from sources outside the United States might be subject to foreign taxes that are withheld at the
source or other foreign taxes. The effective rate of these foreign taxes cannot be determined in advance because it depends on the specific
countries in which a Fund’s assets will be invested, the amount of the assets invested in each such country and the possibility
of treaty relief.
If
more than 50% of a Fund’s assets at taxable year end consists of the securities of foreign corporations, the Fund may be eligible
to make an election under Section 853 of the Code so that any of its shareholders subject to federal income taxes will be able to claim
a credit or deduction on their income tax returns for, and will be required to treat as part of the amounts distributed to them, their
pro rata portion of qualified taxes paid by the Fund to foreign countries. If such an election is made, the ability of shareholders of
the Fund to claim a foreign tax credit will be subject to limitations imposed by the Code, which in general limits the amount of foreign
tax that may be used to reduce a shareholder’s U.S. tax liability to that amount of U.S. tax which would be imposed on the amount
and type of income in respect of which the foreign tax was paid. In addition, the ability of shareholders to claim a foreign tax credit
is subject to a holding period requirement. A shareholder who for U.S. income tax purposes claims a foreign tax credit in respect of Fund
distributions may not claim a deduction for foreign taxes paid by the Fund, regardless of whether the shareholder itemizes deductions.
Also, no deduction for foreign taxes may be claimed by shareholders who do not itemize deductions on their federal income tax returns.
It should also be noted that a tax-exempt shareholder, like other shareholders, will be required to treat as part of the amounts distributed
to it a pro rata portion of the income taxes paid by the Fund to foreign countries. However, that income will generally be exempt from
U.S. taxation by virtue of such shareholder’s tax-exempt status and such a shareholder will not be entitled to either a tax credit
or a deduction with respect to such income. A Fund that makes the election referred to above will notify its shareholders each year of
the amount of dividends and distributions and the shareholders’ pro rata shares of qualified taxes paid by the Fund to foreign
countries.
A
Fund may invest in one or more “passive foreign investment companies” (“PFICs”). A PFIC is generally
any foreign corporation: (i) 75% or more of the income of which for a taxable year in the Fund’s holding period is passive income,
or (ii) the average percentage of the assets of which (generally by value, but by adjusted tax basis in certain cases) that produce or
are held for the production of passive income is at least 50%. Generally, passive income for this purpose means dividends, interest (including
income equivalent to interest), royalties, rents, annuities, the excess of gain over losses from certain property transactions and commodities
transactions, and foreign currency gains.
Investment
by a Fund in PFICs could subject the Fund to a U.S. federal income tax or other charge on distributions received from PFICs or on the
proceeds from the sale of its investments in the PFICs. This tax cannot be eliminated by making distributions to Fund shareholders. However,
a Fund may be able to make an election that would avoid the imposition of that tax. For example, a Fund may in certain cases elect to
treat a PFIC as a “qualified electing fund” (a “QEF election”), in which case the Fund will be required
to include in its income its share of the company’s income and net capital gains annually, regardless of whether it receives any
distribution from the company. A Fund also may make an election to mark the gains (and to a limited extent losses) in a PFIC “to
the market” as though it had sold and repurchased its holdings in the PFIC on the last day of the Fund’s taxable year. Such
gains and losses are generally treated as ordinary
income and loss. The QEF and
mark-to-market elections may accelerate the recognition of income by the Fund (without the receipt of cash) and increase the amount required
to be distributed by a Fund to avoid taxation. Making either of these elections therefore may require a Fund to liquidate other investments
(including when it is not advantageous to do so) to meet its distribution requirement, which also may accelerate the recognition of gain
and affect a Fund’s total return. Dividends paid by PFICs will not be eligible to be treated as “qualified dividend income.”
Because it is not always possible to identify a foreign corporation as a PFIC, a Fund may incur the tax and other charges described above
in some instances.
Finally,
a Fund’s transactions in foreign currencies, foreign currency-denominated debt obligations, and certain foreign currency options,
futures contracts, and forward contracts (and similar instruments) may give rise to ordinary income or loss to the extent such income
or loss results from fluctuations in the value of the foreign currency concerned. Such ordinary income treatment may increase the distributions
taxed to shareholders as ordinary income. Any net ordinary losses resulting from such transactions cannot be carried forward by a Fund
to offset income or gains earned in subsequent taxable years.
Certain Investments in Real Estate Investment Trusts
If
a Fund invests in equity securities of REITs, such investments may result in the fund’s receipt of cash in excess of the REIT’s
earnings. If a Fund distributes such amounts, such distribution could constitute a return of capital to the Fund’s shareholders
for federal income tax purposes. Dividends received by a Fund from a REIT will not qualify for the corporate dividends-received deduction
and generally will not constitute qualified dividend income.
Certain Investments in Mortgage-Related Securities
A
Fund may invest directly or indirectly in residual interests in real estate mortgage investment conduits (“REMICs”) (including
by investing in residual interests in CMOs with respect to which an election to be treated as a REMIC is in effect) or equity interests
in taxable mortgage pools (“TMPs”). Under a notice issued by the IRS and Treasury regulations that have not yet been issued,
but may apply retroactively, a portion of a Fund’s income that is attributable to a REIT’s residual interest in a REMIC
or an equity interest in a TMP (referred to in the Code as an “excess inclusion”) will be subject to federal income tax
in all events. This notice also provides, and the regulations are expected to provide, that excess inclusion income of a regulated investment
company, such as the Funds, will be allocated to shareholders of the regulated investment company in proportion to the dividends received
by such shareholders, with the same consequences as if the shareholders held the related REMIC or TMP interest directly.
In
general, excess inclusion income allocated to shareholders (i) cannot be offset by net operating losses (subject to a limited exception
for certain thrift institutions), (ii) will constitute unrelated business taxable income (“UBTI”) to entities (including
a qualified pension plan, an individual retirement account, a 401(k) plan, a Keogh plan, or other tax-exempt entity) subject to tax on
UBTI, thereby potentially requiring such an entity that is allocated excess inclusion income, and otherwise might not be required to file
a tax return, to file a tax return and pay tax on such income, and (iii) in the case of a non-U.S. shareholder, will not qualify for any
reduction in U.S. federal withholding tax. A shareholder will be subject to U.S. federal income tax on such inclusions notwithstanding
any exemption from such income tax otherwise available under the Code.
Unrelated Business Taxable Income
Income
of a regulated investment company that would be UBTI if earned directly by a tax-exempt entity generally will not constitute UBTI when
distributed to a tax-exempt shareholder of the regulated investment company. Notwithstanding this “blocking” effect, a tax-exempt
shareholder of a Fund could realize UBTI by virtue of its investment in a Fund if shares in that Fund constitute debt-financed property
in the hands of the tax-exempt shareholder within the meaning of Section 514(b) of the Code. A tax-exempt shareholder may also recognize
UBTI if a Fund recognizes “excess inclusion income” derived from direct or indirect investments in residual interests in
REMICs or equity interests in TMPs as described above, if the amount of such income recognized by a Fund exceeds the Fund’s investment
company taxable income (after taking into account deductions for dividends paid by the Fund).
Special
tax consequences also apply to charitable remainder trusts (“CRTs”) that invest in regulated investment companies that invest
directly or indirectly in residual interests in REMICs or equity interests in TMPs. Under legislation enacted in December 2006, a CRT,
as defined in Section 664 of the Code, that realizes UBTI for a taxable year must pay an excise tax annually of an amount equal to such
UBTI. Under IRS guidance issued in October 2006, a CRT will not recognize UBTI solely as a result of investing in a Fund that recognizes
“excess inclusion income” (which is described earlier). Rather, if at any time during any taxable year a CRT or
one of certain other tax-exempt shareholders (such as the
United States, a state or
political subdivision, or an agency or instrumentality thereof, and certain energy cooperatives) is a record holder of a share in a Fund
that recognizes “excess inclusion income,” then such Fund will be subject to a tax on that portion of its “excess
inclusion income” for the taxable year that is allocable to such shareholders at the highest federal corporate income tax rate.
The extent to which the IRS guidance in respect of CRTs remains applicable in light of the December 2006 CRT legislation is unclear. To
the extent permitted under the 1940 Act, the Funds may elect to allocate any such tax specially to the applicable CRT, or other shareholder,
and thus reduce such shareholder’s distributions for the year by the amount of the tax that relates to such shareholder’s
interest in the Funds. CRTs and other tax-exempt investors are urged to consult their tax advisers concerning the consequences of investing
in the Funds.
Investments in MLPs
Some
amounts received by a Fund from its investments in MLPs will likely be treated as returns of capital because of accelerated deductions
available with respect to the activities of MLPs. On the disposition of an investment in such an MLP, the Fund will likely realize taxable
income in excess of economic gain from that asset (or, in later periods, if a Fund does not dispose of the MLP, the Fund will likely realize
taxable income in excess of cash flow received by the Fund from the MLP), and the Fund must take such income into account in determining
whether the Fund has satisfied its regulated investment company distribution requirements. The Fund may have to borrow or liquidate securities
to satisfy its distribution requirements and meet its redemption requests, even though investment considerations might otherwise make
it undesirable for the Fund to borrow money or sell securities at the time. In addition, distributions attributable to gain from the sale
of MLPs that are characterized as ordinary income under the Code’s recapture provisions will be taxable to Fund shareholders, when
distributed to them, as ordinary income.
As
noted above, certain of the MLPs in which a Fund may invest qualify as qualified publicly traded partnerships. In such cases, the net
income derived from such investments will constitute qualifying income for purposes of the 90% gross income requirement described earlier
for qualification as a regulated investment company. If, however, such a vehicle were to fail to qualify as a qualified publicly traded
partnership in a particular year, a portion of the gross income derived from it in such year could constitute non-qualifying income to
a Fund for purposes of the 90% gross income requirement and thus could adversely affect the Fund’s ability to qualify as a regulated
investment company for a particular year. In addition, as described above, the diversification requirement for regulated investment company
qualification will limit a Fund’s investments in one or more vehicles that are qualified publicly traded partnerships to 25% of
the Fund’s total assets as of the end of each quarter of the Fund’s taxable year.
Subject
to any future regulatory guidance to the contrary, distributions attributable to qualified publicly traded partnership income from a Fund's
investments in MLPs will ostensibly not qualify for the deduction available to non-corporate taxpayers in respect of such amounts received
directly from an MLP.
Backup Withholding
Each
Fund generally is required to withhold and remit to the U.S. Treasury a percentage of the taxable dividends and other distributions paid
to and proceeds of share sales, exchanges, or redemptions made by any individual shareholder who fails to furnish the Fund with a correct
taxpayer identification number (TIN), who has under-reported dividend or interest income, or who fails to certify to the Fund that he
or she is not subject to such withholding.
Non U.S. Shareholders
Distributions
by a Fund to shareholders that are not “U.S. persons” within the meaning of the Code (“foreign shareholders”)
properly reported by the Fund as (1) capital gain dividends, (2) short-term capital gain dividends, and (3) interest-related dividends,
each as defined and subject to certain conditions described below, generally are not subject to withholding of U.S. federal income tax.
In
general, the Code defines (1) “short-term capital gain dividends” as distributions of net short-term capital gains in excess
of net long-term capital losses and (2) “interest-related dividends” as distributions from U.S. source interest income of
types similar to those not subject to U.S. federal income tax if earned directly by an individual foreign shareholder, in each case to
the extent such distributions are properly reported as such by a Fund in a written notice to shareholders.
The
exceptions to withholding for short-term capital gain dividends and capital gain dividends do not apply to (A) distributions to an individual
foreign shareholder who is present in the United States for a period or periods aggregating 183 days or more during the year of the distribution
and (B) distributions attributable to gain that is treated as effectively connected with the conduct by the foreign shareholder of a trade
or business within the United States under special rules regarding the disposition of U.S. real property interests.
The exception
to withholding for “interest-related dividends” does not apply to distributions to a foreign shareholder (A) that has not
provided a satisfactory statement that the beneficial owner is not a U.S. person, (B) to the extent that the dividend is attributable
to certain interest on an obligation if the foreign shareholder is the issuer or is a 10% shareholder of the issuer, (C) that is within
certain foreign countries that have inadequate information exchange with the United States, or (D) to the extent the dividend is attributable
to interest paid by a person that is a related person of the foreign shareholder and the foreign shareholder is a controlled foreign corporation.
If
a Fund invests in a regulated investment company that pays capital gain dividends, short-term capital gain dividends, or interest-related
dividends to the Fund, such distributions retain their character as not subject to withholding if properly reported when paid by the Fund
to foreign shareholders.
A
Fund is permitted to report such part of its dividends as interest-related and/or short-term capital gain dividends as are eligible, but
is not required to do so. In the case of shares held through an intermediary, the intermediary may withhold even if a Fund reports all
or a portion of a payment as an interest-related or short-term capital gain dividend to shareholders. Foreign shareholders should contact
their intermediaries regarding the application of these rules to their accounts.
Distributions
by a Fund to foreign shareholders other than capital gain dividends, short-term capital gain dividends, and interest-related dividends
(e.g., dividends attributable to dividend and foreign-source interest income or to short-term capital gains or U.S. source interest income
to which the exception from withholding described above does not apply) are generally subject to withholding of U.S. federal income tax
at a rate of 30% (or lower applicable treaty rate).
Under
U.S. federal income tax law, a beneficial holder of shares who or which is a foreign person is not, in general, subject to U.S. federal
income tax on gains (and is not allowed a deduction for losses) realized on the sale of shares of a Fund unless (i) such gain is effectively
connected with the conduct of a trade or business carried on by such holder within the United States, (ii) in the case of an individual
holder, the holder is present in the United States for a period or periods aggregating one hundred eighty-three (183) days or more during
the year of the sale and certain other conditions are met, or (iii) the special rules relating to gain attributable to the sale or exchange
of “U.S. real property interests” (“USRPIs”) apply to the foreign shareholder’s sale of shares
of the Fund (as described below).
Beneficial
holders that are foreign persons with respect to whom income from a Fund is effectively connected with a trade or business conducted by
the foreign shareholder within the United States will in general be subject to U.S. federal income tax on the income derived from the
Fund at the graduated rates applicable to U.S. citizens, residents, or domestic corporations, whether such income is received in cash
or reinvested in shares of the Fund and, in the case of a foreign corporation, may also be subject to a branch profits tax. If a foreign
shareholder is eligible for the benefits of a tax treaty, any effectively connected income or gain will generally be subject to U.S. federal
income tax on a net basis only if it is also attributable to a permanent establishment maintained by the shareholder in the United States.
More generally, foreign shareholders who are residents in a country with an income tax treaty with the United States may obtain different
tax results than those described herein, and are urged to consult their tax advisers.
Special
rules would apply if a Fund were a qualified investment entity (“QIE”) because it is either a “U.S. real property
holding corporation” (“USRPHC”) or would be a USRPHC but for the operation of certain exceptions to the definition
of USRPIs described below. Very generally, a USRPHC is a domestic corporation that holds USRPIs the fair market value of which equals
or exceeds 50% of the sum of the fair market values of the corporation’s USRPIs, interests in real property located outside the
United States, and other trade or business assets. USRPIs generally are defined as any interest in U.S. real property and any interest
(other than solely as a creditor) in a USRPHC or, very generally, an entity that has been a USRPHC in the last five years. A Fund that
holds, directly or indirectly, significant interests in REITs may be a USRPHC. Interests in domestically controlled QIEs, including REITs
and regulated investment companies that are QIEs, not-greater-than-10% interests in publicly traded classes of stock in REITs and not-greater-than-5%
interests in publicly traded classes of stock in regulated investment companies generally are not USRPIs, but these exceptions do not
apply for purposes of determining whether a Fund is a QIE.
If
an interest in a Fund were a USRPI, the Fund would be required to withhold U.S. tax on the proceeds of a share redemption by a greater-than-5%
foreign shareholder, in which case such foreign shareholder generally would also be required to file U.S. tax returns and pay any additional
taxes due in connection with the redemption.
If
a Fund were a QIE, under a special “look-through” rule, any distributions by the Fund to a foreign person (including, in
certain cases, distributions made by the Fund in redemption of its shares) attributable directly or indirectly to (i) distributions received
by the Fund from a lower-tier regulated investment company or REIT that the Fund is required to treat as USRPI gain in its hands and (ii)
gains realized on the disposition of USRPIs by the Fund would retain their
character as gains realized
from USRPIs in the hands of the Fund’s foreign shareholders and would be subject to U.S. tax withholding. In addition, such distributions
could result in the foreign shareholder being required to file a U.S. tax return and pay tax on the distributions at regular U.S. federal
income tax rates. The consequences to a foreign shareholder, including the rate of such withholding and character of such distributions
(e.g., as ordinary income or USRPI gain), would vary depending upon the extent of the foreign shareholder’s current and past ownership
of the Fund.
Foreign
shareholders of a Fund also may be subject to “wash sale” rules to prevent the avoidance of the tax-filing and payment obligations
discussed above through the sale and repurchase of Fund shares.
Beneficial
holders that are foreign persons should consult their tax advisers and, if holding shares through intermediaries, their intermediaries,
concerning the application of these rules to their investment in the Fund.
Other Reporting and Withholding Requirements
Sections
1471-1474 of the Code and the U.S. Treasury and IRS guidance issued thereunder (collectively, “FATCA”) generally require
a Fund to obtain information sufficient to identify the status of each of its shareholders under FATCA or under an applicable intergovernmental
agreement (an “IGA”) between the United States and a foreign government. If a shareholder fails to provide the requested
information or otherwise fails to comply with FATCA or an IGA, the Fund may be required to withhold under FATCA at a rate of 30% with
respect to that shareholder on ordinary dividends it pays. The IRS and the Department of Treasury have issued proposed regulations providing
that these withholding rules will not apply to the gross proceeds of share redemptions or capital gain dividends a Fund pays. If a payment
by a Fund is subject to FATCA withholding, the Fund is required to withhold even if such payment would otherwise be exempt from withholding
under the rules applicable to foreign shareholders described above (e.g., short-term capital gain dividends and interest-related dividends).
Each
prospective investor is urged to consult its tax adviser regarding the applicability of FATCA and any other reporting requirements with
respect to the prospective investor’s own situation, including investments through an intermediary.
General Considerations
Special
tax rules apply to investments through defined contribution plans and other tax-qualified plans or tax-advantaged arrangements. Shareholders
should consult their tax adviser to determine the suitability of shares of a Fund as an investment through such plans and arrangements
and the precise effect of an investment on their particular tax situation.
The
foregoing discussion of the U.S. federal income tax consequences of investment in the Funds is a general and abbreviated summary based
on the applicable provisions of the Code, U.S. Treasury regulations, and other applicable authority currently in effect. For the complete
provisions, reference should be made to the pertinent Code sections and regulations. The Code and regulations are subject to change by
legislative or administrative action, possibly with retroactive effect. This discussion of the federal income tax treatment of the Funds
and their shareholders does not describe in any respect the tax treatment of any particular arrangement, e.g., tax-exempt trusts or insurance
products, pursuant to which or by which investments in the Funds may be made. Shareholders should consult their tax advisers as to their
own tax situation, including possible foreign, state, and local taxes.
EXPERTS
Ropes
& Gray LLP, The Prudential Tower, 800 Boylston Street, Boston, Massachusetts 02199-3600 serves as counsel to the Trust.
The
financial statements of the Funds incorporated herein by reference from the Trust’s Annual Report as of September 30, 2021 have
been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in its reports which are also incorporated
herein by reference. Such financial statements have been so incorporated in reliance upon the reports of Deloitte & Touche LLP given
on the authority of that firm as experts in accounting and auditing. Copies of the Trust’s Annual Report as of September 30, 2021
are available, without charge, upon request by calling 1-888-309-3539.
APPENDIX A—DESCRIPTION OF SECURITIES RATINGS
Although
the ratings of fixed income securities by S&P, Moody’s, and Fitch are a generally accepted measurement of credit risk, they
are subject to certain limitations. For example, ratings are based primarily upon historical events and do not necessarily reflect the
future. Furthermore, there is a period of time between the issuance of a rating and the update of the rating, during which time a published
rating may be inaccurate.
The
descriptions of the S&P, Moody’s, and Fitch’s commercial paper and bond ratings are set forth below.
Commercial Paper Ratings:
S&P
commercial paper ratings are graded into four categories, ranging from A for the highest quality obligations to D for the lowest. Issues
assigned the highest rating of A are regarded as having the greatest capacity for timely payment. Issues in this category are further
refined with the designations 1, 2, and 3 to indicate the relative degree of safety. The A-1 and A-2 categories are described as follows:
A-1—This
designation indicates that the degree of safety regarding timely payment is strong. Those issues determined to possess extremely strong
safety characteristics will be noted with a plus (+) sign designation.
A-2—Capacity
for timely payment on issues with this designation is satisfactory. However, the relative degree of safety is not as high as for issues
designated A-1.
Moody’s
employs three designations, all judged to be investment grade, to indicate the relative repayment ability of rated issuers. The two highest
designations are as follows:
Issuers
(or supporting institutions) rated Prime-1 (or P-1) have a superior ability for repayment of senior short-term debt obligations. Prime-1
(or P-1) repayment ability will normally be evidenced by many of the following characteristics:
•
Leading
market positions in well-established industries.
•
High
rates of return on funds employed.
•
Conservative
capitalization structure with moderate reliance on debt and ample asset protection.
•
Broad
margins in earnings coverage of fixed financial charges and high internal cash generation.
•
Well-established
access to a range of financial markets and assured sources of alternate liquidity.
Issuers
(or supporting institutions) rated Prime-2 (or P-2) have a strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound,
may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
Fitch’s
Short-Term Credit Ratings are graded into six categories, ranging from ‘F-1’ for the highest quality obligations to ‘D’
for the lowest. The F-1 and F-2 categories are described as follows:
F-1—Indicates
the strongest capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong
credit feature.
F-2—A
satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of the higher
ratings.
Bond Ratings:
S&P describes its four highest ratings
for corporate debt as follows:
AAA—Debt
rated AAA has the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong.
AA—Debt
rated AA has a very strong capacity to pay interest and repay principal and differs from the higher rated issues only in a small degree.
A—Debt
rated A has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated categories.
BBB—Debt
rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas such debt normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest
and repay principal for debt in this category than in higher rated categories.
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.
Moody’s describes its four highest
corporate bond ratings as follows:
Aaa—Bonds
which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred
to as “gilt-edged.” Interest payments are protected by a large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues.
Aa—Bonds
which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they compose what are generally known
as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.
A—Bonds
which are rated A possess many favorable investment attributes and may be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment in
the future.
Baa—Bonds
which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as
well.
Moody’s
applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa through Caa in its corporate bond rating system.
The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category.
Fitch describes its four highest long-term
credit ratings as follows:
AAA—“AAA”
ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment
of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
AA—“AA”
ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments.
This capacity is not significantly vulnerable to foreseeable events.
A—“A”
ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity
may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings.
BBB—“BBB”
ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is
considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is
the lowest investment grade category.
A
“+” or “–” may be appended to a rating to denote relative status within major rating categories. Such
suffixes are not added to the “AAA” category or to categories below “CCC.”
S&P describes its below investment
grade ratings for corporate debt as follows:
BB,
B, CCC, CC, C—Debt rated “BB,” “B,” “CCC,”
“CC,” and “C” is regarded, on balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation, “BB” indicates the lowest degree of speculation, and
“C” the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse conditions.
BB—Debt
rated “BB” has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties
or exposure to adverse business, financial, or economic conditions which could lead to
inadequate
capacity to meet timely interest and principal payments. The “BB” rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied “BBB–” rating.
B—Debt
rated “B” has a greater vulnerability to default but currently has the capacity to meet interest payments and principal
repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal.
The “B” rating category is also used for debt subordinated to senior debt that is assigned an actual or implied “BB”
or “BB–” rating.
CCC—Debt
rated “CCC” has a currently identifiable vulnerability to default, and is dependent upon favorable business, financial,
and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or
economic conditions, it is not likely to have the capacity to pay interest and repay principal. The “CCC” rating category
is also used for debt subordinated to senior debt that is assigned an actual or implied “B” or “B–”
rating.
CC—The
rating “CC” is typically applied to debt subordinated to senior debt that is assigned an actual or implied “CCC”
rating.
C—The
rating “C” is typically applied to debt subordinated to senior debt which is assigned an actual or implied “CCC–”
debt rating. The “C” rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
D—Debt
rated “D” is in payment default. The “D” rating category is used when interest payments or principal payments
are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made
during such grace period. The “D” rating also will be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
Moody’s describes its below investment
grade corporate bond ratings as follows:
Ba—Bonds
which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate
and thereby not well safeguarded during other good and bad times over the future. Uncertainty of position characterizes bonds in this
class.
B—Bonds
which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long
period of time may be small.
Caa—Bonds
which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with respect to principal or interest.
Ca—Bonds
which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other marked shortcomings.
C—Bonds
which are rated C are the lowest rated class of bonds
and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.
Fitch describes its below investment
grade long-term credit ratings as follows:
BB—“BB”
ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time;
however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category
are not investment grade.
B—“B”
ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently
being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment.
CCC,
CC, C—Default is a real possibility. Capacity for meeting financial commitments is
solely reliant upon sustained, favorable business or economic developments. A “CC” rating indicates that default of some
kind appears probable. “C” ratings signal imminent default.
DDD,
DD, D—The ratings of obligations in this category are based on their prospects for
achieving partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative
and cannot be estimated with any precision, the following serve as general guidelines. “DDD” obligations have the highest
potential for recovery, around 90%-100% of outstanding amounts and accrued interest. “DD” indicates potential recoveries
in the range of 50%-90% and “D” the lowest recovery potential, i.e., below 50%.
Entities
rated in this category have defaulted on some or all of their obligations. Entities rated “DDD” have the highest prospect
for resumption of performance or continued operation with or without a formal reorganization process.
Entities rated
“DD” and “D” are generally undergoing a formal reorganization or liquidation process; those rated “DD”
are likely to satisfy a higher portion of their outstanding obligations, while entities rated “D” have a poor prospect of
repaying all obligations.
APPENDIX B—PROXY VOTING POLICIES
The
following represents the proxy voting policies (the “Policies”) of the MassMutual Premier Funds (the “Funds”)
with respect to the voting of proxies on behalf of each series of the Funds (the “Series”). It is the policy of the Funds
and MML Investment Advisers, LLC (the “Adviser”), as investment manager to the Series, to delegate (with certain exceptions)
voting responsibilities and duties with respect to all proxies to the subadvisers (the “Subadvisers”) of the Series, including
shareholder/member/partner votes and consents for private entities that do not involve proxies, even if the securities issued by such
private entities are not “voting securities” as defined in Section 2(a)(42) of the Investment Company Act of 1940, as amended.
All references to votes by proxy in this policy shall be interpreted to include both votes by proxy and votes and consents that do not
involve proxies. The Adviser will vote proxies on behalf of any Fund of Funds or Feeder Funds for which it serves as investment adviser,
as well as for any special situations where the Adviser is in the best position to vote the proxy (“Special Situations”).
I. GENERAL
PRINCIPLES
In
voting proxies, the Adviser and Subadvisers will be guided by general fiduciary principles and their respective written proxy voting policies.
The Adviser and Subadvisers will act prudently and solely in the best interest of the beneficial owners of the accounts they respectively
manage, and for the exclusive purpose of providing benefit to such persons.
II. SUBADVISERS
TO WHICH THE FUNDS AND ADVISER HAVE DELEGATED PROXY VOTING RESPONSIBILITIES
1. The
Subadvisers each have the duty to provide a copy of their written proxy voting policies to the Adviser and Funds annually. The Subadvisers’
written proxy voting policies will maintain procedures that address potential conflicts of interest.
2. The
Subadvisers will each maintain a record of all proxy votes exercised on behalf of each series of the Funds for which they act as subadviser
and will furnish such records to the Adviser and Funds annually.
3. The
Subadvisers will report proxy votes that deviated from their normal proxy voting policies and any exceptions to their proxy voting policies
to the Adviser quarterly.
4. The
Subadvisers will provide the Adviser and Funds with all such information and documents relating to the Subadvisers’ proxy voting
in a timely manner, as necessary for the Adviser and Funds to comply with applicable laws and regulations.
III. THE FUNDS
AND ADVISER
1. The
Chief Compliance Officer of the Funds will annually update the Trustees after a review of proxy voting records.
2. The
Trustees of the Funds will not vote proxies on behalf of the Funds or any Series.
3. The
Adviser will not vote proxies on behalf of the Funds or any Series, except that the Adviser will vote proxies on behalf of any Fund of
Funds or Feeder Fund for which it serves as investment adviser or in Special Situations.
Information
regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available,
without charge, upon request, on the MassMutual website at https://www.massmutual.com/funds
and on the Securities and Exchange Commission’s website at http://www.sec.gov.
MML INVESTMENT ADVISERS, LLC
As Investment Adviser to the MassMutual
Select Funds, MassMutual Premier Funds,
MassMutual
Advantage Funds, MML Series Investment Fund, MML Series Investment Fund II, and MassMutual Access Funds
(October 1, 2021)
General Overview
Policy
It
is the policy of MML Investment Advisers, LLC (“MML Investment Advisers” or the “Company”) to fulfill its
responsibilities under Rule 206(4)-6 (the “Rule”) under the Investment Advisers Act of 1940, as amended (the “Advisers
Act”), by delegating to subadvisers for each series of the MassMutual Select Funds, MassMutual Premier Funds, MassMutual Advantage
Funds, MML Series Investment Fund, MML Series Investment Fund II, and MassMutual Access Funds (each, a “Trust”) proxy voting
related to the securities in each subadviser’s respective portfolio, with the following exceptions: (i) each series of a Trust
operating as a “fund of funds” where MML Investment Advisers has not delegated proxy voting responsibility to a subadviser
(each a “Fund of Funds” and, collectively, the “Funds of Funds”); (ii) each series of the Trusts operating
as a “feeder fund” (each, a “Feeder Fund”) to a “master fund” (“Master
Fund”); and (iii) in certain other special situations (“Special Situations”). For these exceptions, MML Investment
Advisers will act on behalf of the Trusts to vote proxies (including Information Statements) (“Proxies”), as described below.
Background
MML
Investment Advisers currently serves as investment adviser to each of the Trusts, including those series that are Funds of Funds and Feeder
Funds. The Funds of Funds may invest in other series of the Trusts, funds advised by affiliates of MML Investment Advisers, and/or funds
or exchange-traded funds advised by an unaffiliated investment adviser.
MML
Investment Advisers will vote Proxies of the underlying funds held by the Funds of Funds, of the related Master Fund for a Feeder Fund,
and in certain other Special Situations in accordance with the following procedure.
Procedure
1.
When a Fund of Funds holds shares of an underlying fund advised by MML Investment Advisers, MML Investment Advisers will generally vote
in favor of proposals recommended by the underlying fund’s Board of Trustees and by a majority of the Trustees of the underlying
fund who are not interested persons of the underlying fund or of MML Investment Advisers. However, MML Investment Advisers may alternatively,
in its discretion, (i) seek instruction from the Fund of Fund’s Board of Trustees (or any member or committee thereof (provided
that such member, or each member of such committee, as the case may be, is not an interested person of the underlying fund or of MML Investment
Advisers) delegated authority to provide such instructions to MML Investment Advisers and vote in accordance with such instructions, or
(ii) vote in accordance with the recommendation of an independent proxy advisor or consultant retained by MML Investment Advisers to provide
a recommendation, on the basis solely of the best interest of the Fund of Funds and its shareholders, as to the matter; provided, however,
that prior to taking the action described in clause (ii) above, MML Investment Advisers is required to seek and obtain the prior approval
of its Board of Directors. When a quorum is present at any meeting, a majority of the Board members present may take any action. If it
is not possible to obtain a quorum of such Board, any action may be taken without a meeting if all Board members consent to the action
in writing and such written consents are filed with the records of the meetings of the Board.
2.
When a Fund of Funds holds shares of an underlying fund advised by a control affiliate of MML Investment Advisers, MML Investment Advisers
will generally vote the shares held by the Fund of Funds in the same proportions (for, against, abstain) as the votes of all other shareholders
(other than MML Investment Advisers or a control affiliate of MML Investment Advisers) of such underlying fund. However, MML Investment
Advisers may alternatively, in its discretion, (i) seek instruction from the Fund of Funds’ Board of Trustees (or any member or
committee thereof (provided that such member, or each member of such committee, as the case may be, is not an interested person of the
underlying fund or of MML Investment Advisers) delegated authority to provide such instructions to MML Investment Advisers) and vote in
accordance with such instructions, or (ii) vote in accordance with the recommendation of an independent proxy advisor or consultant retained
by MML Investment Advisers to provide a recommendation, on the basis solely of the best interest of the Fund of Funds and its shareholders,
as to the matter; provided, however, that prior to taking the action described in clause (ii) above, MML Investment Advisers is required
to seek and obtain the prior approval of its Board of Directors. When a quorum is present at any meeting, a majority of the Board members
present may take any action. If it is not possible to obtain a quorum of such Board, any action may be taken without a meeting if all
Board members consent to the action in writing and such written consents are filed with the records of the meetings of the Board.
3. When a
Fund of Funds holds shares of an underlying fund not advised by MML Investment Advisers or a control affiliate of MML Investment Advisers,
MML Investment Advisers will generally vote the shares held by the Fund of Funds in the same proportions (for, against, abstain) as the
votes of all other shareholders of such underlying fund. However, MML Investment Advisers may alternatively, in its discretion, (i) seek
instruction from the Fund of Funds’ Board of Trustees (or any member or committee thereof delegated authority to provide such instructions
to MML Investment Advisers) and vote in accordance with such instructions, or (ii) vote in accordance with the recommendation of an independent
proxy advisor or consultant retained by MML Investment Advisers to provide a recommendation, on the basis solely of the best interest
of the Fund of Funds and its shareholders, as to the matter; provided, however, that prior to taking the action described in clause (ii)
above, MML Investment Advisers is required to seek and obtain the prior approval of its Board of Directors. When a quorum is present at
any meeting, a majority of the Board members present may take any action. If it is not possible to obtain a quorum of such Board, any
action may be taken without a meeting if all Board members consent to the action in writing and such written consents are filed with the
records of the meetings of the Board.
4.
Notwithstanding paragraph 3 above, (i) in the event a Fund of Funds is investing in an underlying fund pursuant to an exemptive order
from the U.S. Securities and Exchange Commission, MML Investment Advisers will vote the shares held by the Fund of Funds in accordance
with any conditions set forth in the order; or (ii) in the event a Fund of Funds is investing in an underlying fund pursuant to Section
12(d)(1)(F) of the Investment Company Act of 1940, as amended, MML Investment Advisers will vote the shares held by the Fund of Funds
either by seeking instructions from the Fund of Funds’ shareholders or vote the shares in the same proportions (for, against, abstain)
as the votes of all other shareholders of the underlying fund.
5.
When a fund is structured as a Feeder Fund that is an interest holder of a Master Fund and is requested to vote on any matter submitted
to interest holders of the Master Fund, MML Investment Advisers will, on behalf of the Feeder Fund, generally vote the shares held by
the Feeder Fund in the same proportions (for, against, abstain) as the votes of all other interest holders of such Master Fund. However,
if the Feeder Fund elects to hold a meeting of its own shareholders to consider such matters, MML Investment Advisers will, on behalf
of the Feeder Fund, vote the shares held by the Feeder Fund in proportion to the votes received from its shareholders, with shares for
which a Feeder Fund receives no voting instructions being voted in the same proportion as the votes received from the other Feeder Fund
shareholders.
6.
Although rare, there is a possibility of Special Situations presented where MML Investment Advisers is in the best position to vote Proxies.
In those Special Situations, which are determined by the Investment Management team in consultation with MML Investment Advisers’
Chief Compliance Officer and/or legal counsel, MML Investment Advisers (i) will, when the Special Situation involves a proxy for a Funds’
investment in another mutual fund or pooled investment vehicle, generally vote the shares held in the same proportions (for, against,
abstain) as the votes of all other shareholders of such underlying fund; (ii) may seek instruction from the relevant Trust’s
Board of Trustees (or any member or committee thereof delegated authority to provide such instructions to MML Investment Advisers) and
vote in accordance with such instructions; or (iii) may vote in accordance with the recommendation of an independent proxy advisor or
consultant retained by MML Investment Advisers to provide a recommendation, on the basis solely of the best interest of the Trust and
its shareholders, as to the matter; provided, however, that prior to taking the action described in clause (iii) above, MML Investment
Advisers is required to seek and obtain the prior approval of its Board of Directors. When a quorum is present at any meeting, a majority
of the Board members present may take any action. If it is not possible to obtain a quorum of such Board, any action may be taken without
a meeting if all Board members consent to the action in writing and such written consents are filed with the records of the meetings of
the Board.
Operating Procedures
MML
Investment Advisers exercises its proxy voting responsibility with respect to the Funds of Funds, Feeder Funds, and Special Situations
through the Investment Management team.
All
proxy statements, including Information Statements (“Proxy Statements”) and proxy cards received by associates relating
to a Fund of Funds, Feeder Fund, or Special Situations are to be immediately forwarded to the Investment Management team. The head of
Investment Management or that person’s designee, then is responsible for (i) logging, reviewing and casting the vote for all Proxies
solicited and received, (ii) voting such Proxies in a manner consistent with these policies and procedures, (iii) documenting the
method followed in determining how to cast the vote, and (iv) maintaining the records required by Rule 204-2 under the Advisers Act.
Record Retention
The
Investment Management team will retain for such time periods as set forth in Rule 204-2:
•
Copies
of all policies and procedures required by the Rule;
•
A
copy of each Proxy Statement that MML Investment Advisers receives regarding a Fund of Fund’s or Feeder Fund’s investments;
•
A
copy of each Proxy Statement that MML Investment Advisers receives regarding a Special Situation;
•
A
record of each vote cast by MML Investment Advisers on behalf of a Fund of Funds, a Feeder Fund, or in a Special Situation; and
•
A
copy of any document created by MML Investment Advisers that was material to making a decision how to vote Proxies on behalf of a Fund
of Funds, a Feeder Fund, or in a Special Situation or that otherwise memorializes the basis for that decision.
BARINGS LLC
GLOBAL PROXY VOTING POLICY
Key Points
•
Barings
LLC (“Barings”) has established a Proxy Voting Policy to establish the manner in which Barings fulfills its proxy voting
responsibilities and complies with applicable regulations
•
Any
proxies received by Barings should be forwarded as soon as possible to the Proxy Voting Team for timely processing and voting
•
Barings
has a responsibility to oversee any service providers it may engage to facilitate proxy voting on behalf of its clients
Introduction/Policy Statement
As
an investment adviser or manager, Barings has a fiduciary duty to vote proxies on behalf of its clients (“Clients”). Regulations
that apply to Barings, including Rule 206(4)-6 of the Investment Advisers Act of 1940 applicable to US regulated investment advisers,
requires that Barings adopt and implement written policies and procedures that are reasonably designed to ensure that proxies are voted
in the best interest of its Clients. The policies and procedures must:
•
Describe
how Barings addresses material conflicts that may arise between Barings’ interests and those of its Clients;
•
Disclose
to Clients how they may obtain information regarding how Barings voted with respect to their securities; and
•
Describe
to Clients Barings’ proxy voting policies and procedures and, upon request, furnish a copy of the policies and procedures.
The
purpose of this Global Proxy Voting Policy (“Policy”) is to establish the manner in which Barings will fulfill its proxy
voting responsibilities and comply with applicable regulatory requirements. Barings understands that voting proxies is part of its investment
advisory and management responsibilities and believes that as a general principle proxies should be acted upon (voted or abstained) solely
in the best interests of its Clients (i.e., in a manner that is most likely to enhance the economic value of the underlying securities
held in Client accounts).
No
Barings associate (“Associate”), officer, board of managers/directors of Barings or its affiliates (other than those assigned
such responsibilities under the Policy) can influence how Barings votes proxies, unless such person has been requested to provide assistance
from an authorized investment person or designee (“Proxy Analyst”) or from a member of the Trading Practices Committee and
has disclosed any known Material Conflict, as discussed in the Procedures section below.
Requirements
Standard Proxy Procedures
Barings
engages a proxy voting service provider (“Service Provider”) responsible for processing and maintaining records of proxy
votes. In addition, the Service Provider, a recognized authority on proxy voting and corporate governance, provides research and recommendations
(including environmental, social and governance topics) on proxies to Barings as its research provider (“Research Provider”).
Barings’ policy is to generally vote all Client proxies for which it has proxy voting discretion in accordance with the recommendations
of the Research Provider or with the Research Provider’s proxy voting guidelines (“Guidelines”), in the absence of
a recommendation. In circumstances where the Research Provider has not provided a recommendation, the proxy will be analyzed on a case-by-case
basis.
Barings
recognizes that there may be times when it is in the best interests of Clients to vote proxies, (i) against the Research Provider’s
recommendations; or (ii) in instances where the Research Provider has not provided a recommendation, against the Guidelines. Barings can
vote, in whole or part, against the Research Provider’s recommendations or Guidelines as it deems appropriate. Procedures are designed
to ensure that votes against the Research Provider’s recommendations or Guidelines are made in the best interests of Clients and
are not the result of any material conflict of interest (“Material Conflict”). For purposes of this Policy, a Material Conflict
is defined as any position, relationship or interest, financial or otherwise, of Barings or Associate that could reasonably be expected
to affect the independence or judgment concerning proxy voting.
Review of Service Provider/Research Provider
In
determining whether to retain, or continue the retention of, the Service Provider and/or Research Provider Barings should consider, among
other things:
•
if
the Service Provider and/or Research Provider have the capacity and competency to adequately analyze the matters for which Barings is
responsible for voting by, for example, reviewing the adequacy and quality of the Service Provider’s and/or Research Provider’s
staffing, personnel, and/or technology;
•
if
the Research Provider has an effective process for seeking timely input from issuers and Research Provider clients with respect to such
matters as its proxy voting policies, methodologies, and if applicable, its peer group constructions. If peer group comparisons are a
component of the Research Provider’s substantive evaluation, Barings should consider how the Research Provider incorporates appropriate
input in formulating its methodologies and construction of issuer peer groups, and how, in constructing peer groups, the Research Provider
takes into account the unique characteristics regarding the issuer, to the extent available, such as the issuer’s size; its governance
structure; its industry and any particular practices unique to that industry; and its history;
•
whether
the Research Provider has adequately disclosed to Barings its methodologies in formulating voting recommendations, such that Barings can
understand the factors underlying the Research Provider’s voting recommendations. In addition, Barings should consider the nature
of any third-party information sources that the Research Provider uses as a basis for its voting recommendations;
•
whether
the Research Provider has adequate policies and procedures to identify, disclose, and address actual and potential conflicts of interest,
including (1) conflicts relating to the provision of proxy voting recommendations and proxy voting services generally, (2) conflicts relating
to activities other than providing proxy voting recommendations and proxy voting services, and (3) conflicts presented by certain affiliations;
•
the
effectiveness of the Research Provider’s firm’s policies and procedures for obtaining current and accurate information relevant
to matters included in its research and on which it makes voting recommendations. In assessing such matters, Barings should consider:
the Research Provider’s engagement with issuers, including the firm’s process for ensuring that it has complete and accurate
information about the issuer and each particular matter, and the firm’s process, if any, for investment advisers to access the
issuer’s views about the firm’s voting recommendations in a timely and efficient manner; and
•
Barings
should consider requiring the Research Provider to update Barings regarding business changes Barings considers relevant (i.e.,
with respect to the Research Provider’s capacity and competency to provide independent proxy voting advice or carry out voting
instructions), and should consider whether the Research Provider appropriately updates its methodologies, guidelines, and voting recommendations
on an ongoing basis, including in response to feedback from issuers and their shareholders.
Other Considerations
There
could be circumstances where Barings is unable or determines not to vote a proxy on behalf of its Clients. The following is a non-inclusive
list of examples whereby Barings may decide not to vote proxies on behalf of its Clients:
•
The
cost of voting a proxy for a foreign security outweighs the expected benefit to the Client, so long as refraining from voting does not
materially harm the Client;
•
Barings
is not given enough time to process the vote (i.e., receives a meeting notice and proxy from the issuer too late to permit voting);
•
Barings
may hold shares on a company’s record date, but sells them prior to the company’s meeting date;
•
Barings
has outstanding sell orders on a particular security and the decision to refrain from voting may be made in order to facilitate such sale;
•
The
underlying securities have been lent out pursuant to a security lending program; or
•
The
company has participated in share blocking, which would prohibit Barings ability to trade or loan shares for a period of time.
Administration of Proxy Voting
Barings
has designated the Proxy Voting Team to ensure the responsibilities set forth in this Policy are satisfied.
Handling of Proxies
Proxy
statements and ballots are typically routed directly to Barings’ proxy voting Service Provider. In the event that an Associate
receives a proxy statement or ballot, the Associate should immediately forward the statement or ballot to the Proxy Voting Team who will
record receipt of the proxy, route the materials for review, maintain a record of all action taken and process votes.
Voting of Proxies
Typically,
Barings will vote all Client proxies for which it has proxy voting discretion, where no Material Conflict exists, in accordance with the
Research Provider’s recommendation or Guidelines, unless (i) Barings is unable or determines not to vote a proxy in accordance
with the Policy; or (ii) a Proxy Analyst determines that it is in the Clients’ best interests to vote against the Research Provider’s
recommendation or Guidelines. In the event a Proxy Analyst believes a proxy should be voted against the Research Provider’s recommendations
or Guidelines, the Proxy Voting Team will vote the proxy in accordance with the Proxy Analyst’s recommendation so long as (i) no
other Proxy Analyst disagrees with such recommendation; and (ii) no known Material Conflict is identified by the Proxy Analyst(s) or the
Proxy Voting Team. If a Material Conflict is identified by a Proxy Analyst or the Proxy Voting Team, the proxy will be submitted to the
Trading Practices Committee to determine how the proxy is to be voted in order to achieve the Clients’ best interests.
Pre-vote
communications with proxy-solicitors are prohibited. In the event that a pre-vote communication occurs, it should be reported to the Trading
Practices Committee, the relevant Head of Compliance and/or General Counsel prior to voting. Any questions or concerns regarding proxy-solicitor
arrangements should be addressed to the relevant Head of Compliance and/or General Counsel, or the respective designees.
Oversight
Barings’
Trading Practices Committee is responsible for (i) at least annually, reviewing and recommending changes as needed to the Policy including
but not limited to how proxies are processed, to ensure that the Policy serves its intended purpose; (ii) approving proxy voting forms
as needed; and (iii) reviewing any proposed changes to disclosures. In addition to the above, the Proxy Voting Team will provide materials
to the Barings’ Trading Practices Committee on the following matters:
•
The
extent to which potential credible factual errors, potential incompleteness, or potential methodological weaknesses in the Service Provider
and or Research Provider (that Barings becomes aware of and deems relevant) are materially affecting the research or recommendations that
Barings used or is using in voting;
•
Confirm
to the Trading Practices Committee that it believes that Barings is casting votes on behalf of its clients consistently with the Policy.This
confirmation will be based on the Proxy Voting Team, at least annually, sampling the proxy votes cast on behalf of its clients. The review
will consist of sampling of proxy votes that relate to proposals that may require more issuer-specific analysis (e.g.,
mergers and acquisition transactions, dissolutions, conversions, or consolidations) and providing the results of this testing to the Trading
Practices Committee;
•
Periodically
reviewing the Service Provider’s guidelines used in the voting of proxies and notify the Trading Practices Committee of any material
changes;
•
Confirm
that Barings is casting votes when a conflict of interest exists in compliance with the Policy;
•
Escalating
any issues relating to proxy voting identified during internal or external audits or assessments or reviews to Trading Practices Committee;
and
•
In
circumstances where either the Proxy Voting Team has not provided a recommendation or has not contemplated an issue within its Guidelines
and the proxy is analyzed on a case-by-case basis, or the matter subject to the proxy was contested or highly controversial, considering
whether a higher degree of analysis was necessary to assess whether any votes cast on behalf of Barings’ clients were cast in the
clients’ best interest.
New Account Procedures
Investment
management agreements generally delegate the authority to Barings to vote proxies in accordance with its Policy. In the event that an
investment management agreement is silent on proxy voting, Barings should obtain written instructions from the Client as to their voting
preference. However, when the Client does not provide written instructions as to their voting preference, Barings will assume proxy voting
responsibilities. In the event that a Client makes a written request regarding proxy voting, Barings will vote as instructed.
Required Disclosures and Client Request
for Information
Barings
will include a summary of this Policy in the Form ADV Part 2A for its US registered investment advisers, as well as provide instructions
as to how a Client may request a copy of this Policy and/or a record of how Barings voted the Client’s proxies.
Requests will be directed to the Proxy Voting Team, who will provide the information to the appropriate client service representative
in order to respond to the Client in a timely manner.
Conflict Resolution and Escalation Process
Associates should immediately report any issues they believe are a potential or actual breach of
this Policy to their relevant business unit management and to the relevant Chief Compliance Officer (or relevant designee). The relevant
Chief Compliance Officer (or relevant designee) will review the matter and determine whether the issue is an actual breach and whether
to grant an exception, and/or the appropriate course of action. When making such determination, the relevant Chief Compliance Officer
(or relevant designee) may, as part of his/her review, discuss the matter with relevant business unit management, members of the Senior
Leadership Team, governance committees or other parties (i.e. legal counsel, auditor, etc).
The relevant Compliance Department can grant exceptions to any provision of this Policy so long
as such exceptions are consistent with the purpose of the Policy and applicable law, are documented and such documentation is retained
for the required retention period. Any questions regarding the applicability of this Policy should be directed to the appropriate Compliance
Department or the relevant Chief Compliance Officer (or relevant designee).
Books and Records
Retained
The table below identifies each Record that is required to be retained as it relates to this Policy
unless a different retention period is required by local regulations in the relevant jurisdiction. Records may be unique to the relevant
jurisdiction or combined with records maintained by Barings.
|
Description/Requirement |
|
|
Barings Record |
|
|
Creator |
|
|
Owner |
|
|
Retention Period |
|
|
Source |
|
|
The Trading Practices Committee review of Policy, proxy activity, and approval of
Proxy Voting Forms |
|
|
Trading Practices Committee meeting materials |
|
|
Proxy Voting Team |
|
|
Trading Practices Committee Chairperson |
|
|
7 Years |
|
|
Barings Policy Requirement and Investment Advisers Act of 1940, Rule 206(4)-6 Barings
Policy requirement for Barings US regulated Advisers |
|
|
Proxy statements, research, recommendations, and records of votes cast |
|
|
Proxy Records |
|
|
Service Provider or Proxy Voting Team |
|
|
Service Provider or Proxy Voting Team |
|
|
7 Years |
|
|
Barings Policy Requirement and Investment Advisers Act of 1940, Rule 206(4)-6 Barings
Policy requirement for Barings US regulated Advisers |
|
|
Proxy Voting Forms (including supporting documentation used in deciding how to vote) |
|
|
Proxy Voting Forms |
|
|
Proxy Voting Team and/or Proxy Analyst |
|
|
Proxy Voting Team |
|
|
7 Years |
|
|
Barings Policy Requirement and Investment Advisers Act of 1940, Rule 206(4)-6 Barings
Policy requirement for Barings US regulated Advisers |
|
|
Client written requests for proxy voting information and responses thereto |
|
|
Client Proxy Requests |
|
|
Proxy Voting Team |
|
|
Proxy Voting Team |
|
|
7 Years |
|
|
Barings Policy Requirement and Investment Advisers Act of 1940, Rule 206(4)-6 Barings
Policy requirement for Barings US regulated Advisers |
|
|
Description/Requirement |
|
|
Barings Record |
|
|
Creator |
|
|
Owner |
|
|
Retention Period |
|
|
Source |
|
|
Form N-PX, for proxies voted on behalf of an investment company for which Barings
serves as investment adviser and is responsible for making such filing on behalf of its Clients |
|
|
Form N-PX |
|
|
Proxy Voting Team |
|
|
Proxy Voting Team |
|
|
7 Years |
|
|
Barings Policy requirement and Investment Advisers Act of 1940, Rule 206(4)‑6
for Barings US regulated Advisers Rule 30b1‑4 |
|
|
The Proxy Voting Policy, associated procedures and any amendments thereto |
|
|
Proxy Voting Policy |
|
|
Compliance Department |
|
|
Compliance Department |
|
|
7 Years |
|
|
Barings Policy requirement |
|
|
A copy of the Research Provider’s proxy voting guidelines |
|
|
Research Provider’s Proxy Voting Guidelines |
|
|
Research Provider |
|
|
Proxy Voting Team |
|
|
7 Years |
|
|
Barings Policy requirement |
|
Original
Date of Policy:
October 2004 (Barings)
Last
Revision Date:
March 2021
INVESCO’S POLICY STATEMENT
ON GLOBAL CORPORATE GOVERNANCE AND PROXY VOTING
Effective January
2021
I. Introduction
Invesco
Ltd. and its affiliated investment advisers (collectively, “Invesco”, the “Company”, “our” or
“we”) has adopted and implemented this Policy Statement on Global Corporate Governance and Proxy Voting (“Policy”)
which it believes describes policies and procedures reasonably designed to ensure that proxies are voted in the best interests of its
clients. This Policy is intended to help Invesco’s clients understand our commitment to responsible investing and proxy voting,
as well as the good governance principles that inform our approach to engagement and voting at shareholder meetings.
A.
Our Commitment to Environmental, Social and Governance Investment Stewardship and Proxy Voting
Our
commitment to environmental, social and governance (ESG) principles is a core element of our ambition to be the most client centric asset
manager. We aspire to incorporate ESG considerations into all of our investment capabilities in the context of financial materiality and
in the best interest of our clients. Our Global ESG team functions as a center of excellence, providing specialist insights on research,
engagement, voting, integration, tools, and client and product solutions with investment teams implementing ESG approaches appropriate
to asset class and investment style. Much of our work is rooted in fundamental research and frequent dialogue with companies.
Invesco
views proxy voting as an integral part of its investment management responsibilities. The proxy voting process at Invesco focuses on protecting
clients’ rights and promoting governance structures and practices that reinforce the accountability of corporate management and
boards of directors to shareholders. The voting decision lies with our portfolio managers and analysts with input and support from our
Global ESG team and Proxy Operations functions. Our proprietary proxy voting platform (“PROXYintel”) facilitates implementation
of voting decisions and rationales across global investment teams. Our good governance principles, governance structure and processes
are designed to ensure that proxy votes are cast in accordance with clients’ best interests.
As
a large active investor, Invesco is well placed to use our ESG expertise and beliefs to engage with portfolio companies in ways which
drive corporate change that we believe will enhance shareholder value. We take our responsibility as active owners very seriously and
see engagement as an opportunity to encourage continual improvement and ensure that our clients’ interests are represented and
protected. Dialogue with portfolio companies is a core part of the investment process. Invesco may engage with investee companies to discuss
environmental, social and governance issues throughout the year or on specific ballot items to be voted on.
Our
passive strategies and certain other client accounts managed in accordance with fixed income, money market and index strategies (including
exchange traded funds) will typically vote in line with the majority holder of the active-equity shares held by Invesco outside of those
strategies. Invesco refers to this approach as “Majority Voting”. This process of Majority Voting ensures that our passive
strategies benefit from the engagement and deep dialogue of our active investors, which Invesco believes benefits shareholders in passively-managed
accounts. In the absence of overlap between the active and passive holders, the passive holders vote in line with our internally developed
voting guidelines (as defined below). Portfolio managers and analysts for accounts employing Majority Voting retain full discretion to
override Majority Voting and to vote the shares as they determine to be in the best interest of those accounts, absent certain types of
conflicts of interest, which are discussed elsewhere in this Policy.
B.
Applicability of Policy
Invesco
may be granted by its clients the authority to vote the proxies of securities held in client portfolios. Invesco’s investment teams
vote proxies on behalf of Invesco-sponsored funds and both fund and non-fund advisory clients that have explicitly granted Invesco authority
in writing to vote proxies on their behalf. In the case of institutional or sub-advised clients, Invesco will vote the proxies in accordance
with this Policy unless the client agreement specifies that the client retains the right to vote or has designated a named fiduciary to
direct voting.
This
Policy applies to all entities in Exhibit A. Due to regional or asset class specific considerations, there may be certain entities that
have local proxy voting guidelines or policies and procedures that differ from this Policy. In the event that local policies and the Global
Policy differ, the local policy will apply. These entities are also listed in Exhibit A and include proxy voting guidelines specific to;
Invesco Asset Management (Japan) Limited, Invesco Asset Management (India) Pvt. Ltd, Invesco Taiwan Ltd and Invesco Capital Markets, Inc.
for Invesco Unit Investment Trusts. In Europe, we comply with the Shareholder Rights Directive and publish our disclosures and voting
practices in this regard.
II. Global Proxy Voting Operational Procedures
Invesco’s
global proxy voting operational procedures are in place to implement the provisions of this Policy (the “Procedures”). At
Invesco, proxy voting is conducted by our investment teams through PROXYintel. Our investment teams globally are supported by Invesco’s
centralized team of ESG professionals and proxy voting specialists. Invesco’s Global ESG team oversees the proxy policy, operational
procedures, inputs to analysis and research and leads the Global Invesco Proxy Advisory Committee (“Global IPAC”). Invesco’s
global proxy administration team is responsible for operational implementation including vote execution oversight.
Invesco
aims to vote all proxies where we have been granted voting authority in accordance with this Policy as implemented by the Procedures.
Our portfolio managers and analysts review voting items based on their individual merits and retain full discretion on vote execution
conducted through our proprietary proxy voting platform. Invesco may supplement its internal research with information from independent
third-parties, such as proxy advisory firms.
A.
Proprietary Proxy Voting Platform
Invesco’s
proprietary proxy voting platform is supported by a dedicated team of internal proxy specialists. PROXYintel streamlines the proxy voting
process by providing our investment teams globally with direct access to meeting information and proxies, external proxy research and
ESG ratings, as well as related functions, such as management of conflicts of interest issues, significant votes, global reporting and
record-keeping capabilities. Managing these processes internally, as opposed to relying on third parties, is designed to provide Invesco
greater quality control, oversight and independence in the proxy administration process.
Historical
proxy voting information is stored to build institutional knowledge across the Invesco complex with respect to individual companies and
proxy issues. Certain investment teams also use PROXYintel to access third-party proxy research and ESG ratings.
Our
proprietary systems facilitate internal control and oversight of the voting process. Invesco may choose to leverage this capability to
automatically vote proxies based on its internally developed voting guidelines and in circumstances where Majority Voting applies.
B.
Oversight of Voting Operations
Invesco’s
Proxy Governance and Voting Manager provides oversight of the proxy voting verification processes facilitated by a dedicated proxy administration
team which include; (i) the monthly global vote audit review of votes cast containing documented rationales of conflicts of interest votes,
market and operational limitations; (ii) the quarterly sampling of proxy votes cast to determine that (a) Invesco is voting consistently
with this Policy and (b) third-party proxy advisory firms’ methodologies in formulating the vote recommendation are consistent
with their publicly disclosed guidelines; and (iii) quarterly review of rationales with the Global IPAC of occasions where a portfolio
manager may take a position that may not be in accordance with Invesco’s good governance principles and our internally developed
voting guidelines.
To
the extent material errors are identified in the proxy voting process, such errors are reviewed and reported to, as appropriate, the Global
Head of ESG, Global Proxy Governance and Voting Manager, legal and compliance, the Global IPAC and relevant boards and clients, where
applicable. Invesco’s Global Head of ESG and Proxy Governance and Voting Manager provide proxy voting updates and reporting to
the Global IPAC, various boards and clients. Invesco’s proxy voting administration and operations are subject to periodic review
by Internal Audit and Compliance groups.
C.
Disclosures and Record Keeping
Unless
otherwise required by local or regional requirements, Invesco maintains voting records in either electronic format or hard copy for at
least 6 years. Invesco makes available its proxy voting records publicly in compliance with regulatory requirements and industry best
practices in the regions below:
•
In
accordance with the US Securities and Exchange Commission regulations, Invesco will file a record of all proxy voting activity for the
prior 12 months ending June 30th
for each U.S. registered fund. That filing is made on or before August 31st
of each year. Each year, the proxy voting records are made available on Invesco’s website (https://www.invesco.com/corporate/about-us/esg).
Moreover, and to the extent applicable, the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
including Department of Labor regulations and guidance thereunder, provide that the named fiduciary generally should be able to review
not only the investment manager’s voting procedure with respect to plan-owned stock, but also to review the actions
taken in
individual proxy voting situations. In the case of institutional and sub-advised Clients, Clients may contact their client service representative
to request information about how Invesco voted proxies on their behalf. Absent specific contractual guidelines, such requests may be made
on a semi-annual basis.
•
In
the UK and Europe, Invesco publicly discloses our proxy votes monthly in compliance with the UK Stewardship Code and for the European
Shareholder Rights Directive annually (https://vds.issgovernance.com/vds/#/Mzk3MA==/).
•
In
Canada, Invesco publicly discloses our annual proxy votes each year (https://vds.issgovernance.com/vds/#/MTg2Mg==/)
by August 31st, covering the 12-month period ending June 30th
in compliance with the National Instrument 81-106 Investment Fund Continuous Disclosure.
•
In
Japan, Invesco publicly discloses our proxy votes annually in compliance with the Japan Stewardship Code.
•
In
India, Invesco publicly discloses our proxy votes quarterly in compliance with The Securities and Exchange Board of India (“SEBI”)
Circular on stewardship code for all mutual funds and all categories of Alternative Investment Funds in relation to their investment in
listed equities. SEBI has implemented principles on voting for Mutual Funds through circulars dated March 15, 2010 and March 24, 2014,
which prescribed detailed mandatory requirements for Mutual Funds in India to disclose their voting policies and actual voting by Mutual
Funds on different resolutions of investee companies.
•
In
Hong Kong, Invesco Hong Kong Limited will provide proxy voting records upon request in compliance with the Securities and Futures Commission
(“SFC”) Principles of Responsible Ownership.
•
In
Taiwan, Invesco publicly discloses our proxy voting policy and proxy votes annually in compliance with Taiwan’s Stewardship Principles
for Institutional Investors.
D.
Global Invesco Proxy Advisory Committee
Guided
by its philosophy that investment teams should manage proxy voting, Invesco has created the Global IPAC. The Global IPAC is an investments-driven
committee comprised of representatives from various investment management teams globally, Invesco’s Global Head of ESG and chaired
by its Global Proxy Governance and Voting Manager. The Global IPAC provides a forum for investment teams to monitor, understand and discuss
key proxy issues and voting trends within the Invesco complex, to assist Invesco in meeting regulatory obligations, to review votes not
aligned with our good governance principles and to consider conflicts of interest in the proxy voting process, all in accordance with
this Policy.
In
fulfilling its responsibilities, the Global IPAC meets as necessary, but no less than semi-annually, and has the following responsibilities
and functions: (i) acts as a key liaison between the Global ESG team and local proxy voting practices to ensure compliance with this Policy;
(ii) provides insight on market trends as it relates to stewardship practices; (iii) monitors proxy votes that present potential
conflicts of interest; (iv) the Conflict of Interest sub-committee will make voting decisions on submissions made by portfolio managers
on conflict of interest issues to override the Policy; and (v) reviews and provides input, at least annually, on this Policy and
related internal procedures and recommends any changes to the Policy based on, but not limited to, Invesco’s experience, evolving
industry practices, or developments in applicable laws or regulations.
In
addition to the Global IPAC, for some clients, third parties (e.g., U.S. fund boards) provide oversight of the proxy voting process.
E.
Market and Operational Limitations
In
the great majority of instances, Invesco will vote proxies. However, in certain circumstances, Invesco may refrain from voting where the
economic or other opportunity costs of voting exceeds any benefit to clients. Moreover, ERISA fiduciaries, in voting proxies or exercising
other shareholder rights, must not subordinate the economic interests of plan participants and beneficiaries to unrelated objectives.
These matters are left to the discretion of the relevant portfolio manager. Such circumstances could include, for example:
•
In
some countries the exercise of voting rights imposes temporary transfer restrictions on the related securities (“share blocking”).
Invesco generally refrains from voting proxies in share blocking countries unless Invesco determines that the benefit to the client(s)
of voting a specific proxy outweighs the client’s temporary inability to sell the security.
•
Some
companies require a representative to attend meetings in person to vote a proxy, additional documentation or the disclosure of beneficial
owner details to vote. Invesco may determine that the costs of sending a representative, signing a power-of-attorney or submitting additional
disclosures outweigh the benefit of voting a particular proxy.
•
Invesco
may not receive proxy materials from the relevant fund or client custodian with sufficient time and information to make an informed independent
voting decision.
•
Invesco
held shares on the record date but has sold them prior to the meeting date.
In
some non-U.S. jurisdictions, although Invesco uses reasonable efforts to vote a proxy, proxies may not be accepted or rejected due to
changes in the agenda for a shareholder meeting for which Invesco does not have sufficient notice, a proxy voting service may not be offered
by the custodian in the local market or due to operational issues experienced by third-parties involved in the process or by the issuer
or sub-custodian. In addition, despite the best efforts of Invesco and its proxy voting agent, there may be instances where our votes
may not be received or properly tabulated by an issuer or the issuer’s agent.
F.
Securities Lending
Invesco’s
funds may occasionally participate in a securities lending program. In circumstances where shares are on loan, the voting rights of those
shares are transferred to the borrower. If the security in question is on loan as part of a securities lending program, Invesco may determine
that the benefit to the client of voting a particular proxy outweighs the benefits of securities lending. In those instances, Invesco
may determine to recall securities that are on loan prior to the meeting record date, so that we will be entitled to vote those shares.
There may be instances where Invesco may be unable to recall shares or may choose not to recall shares. The relevant portfolio manager
will make these determinations.
G.
Conflicts of Interest
There
may be occasions where voting proxies may present a perceived or actual conflict of interest between Invesco, as investment manager, and
one or more of Invesco’s clients or vendors.
Firm-Level Conflicts
of interest
A
conflict of interest may exist if Invesco has a material business relationship with either the company soliciting a proxy or a third party
that has a material interest in the outcome of a proxy vote or that is actively lobbying for a particular outcome of a proxy vote. Such
relationships may include, among others, a client relationship, serving as a vendor whose products / services are material or significant
to Invesco, serving as a distributor of Invesco’s products, a significant research provider or broker to Invesco.
Invesco
identifies potential conflicts of interest based on a variety of factors, including but not limited to the materiality of the relationship
between the issuer or its affiliates to Invesco.
Invesco’s
proxy administration team maintains a list of all such issuers for which a conflict of interest exists (“Global Conflicts List”).
Material firm-level conflicts of interests are identified by individuals and groups within Invesco globally based on criteria established
by the proxy administration team. The Global Conflicts List is updated periodically by the proxy administration team so as to seek to
ensure an updated view is available when conducting conflicts checks. Operating procedures and associated governance are designed to seek
to ensure conflicts of interest are appropriately considered ahead of voting proxies. The Global IPAC Conflict of Interest Sub-committee
maintains oversight of the process. Companies on the Global Conflicts List will be voted in line with the principles below as implemented
by Invesco’s internally developed voting guidelines. To the extent a portfolio manager disagrees with the Policy, our processes
and procedures seek to ensure justification and rationales are fully documented and presented to the Global IPAC Sub-committee for a majority
vote of its members.
As
an additional safeguard, persons from Invesco’s marketing, distribution and other customer-facing functions may not serve on the
Global IPAC. For the avoidance of doubt, Invesco may not consider Invesco Ltd.’s pecuniary interest when voting proxies on behalf
of clients. To avoid any appearance of a conflict of interest, Invesco will not vote proxies issued by Invesco Ltd. that may be held in
client accounts.
Personal Conflicts of Interest
A
conflict also may exist where an Invesco employee has a known personal or business relationship with other proponents of proxy proposals,
participants in proxy contests, corporate directors, or candidates for directorships. Under Invesco’s Global Code of Conduct, Invesco
entities and individuals must act in the best interests of clients and must avoid any situation that gives rise to an actual or perceived
conflict of interest.
All
Invesco personnel with proxy voting responsibilities are required to report any known personal or business conflicts of interest regarding
proxy issues with which they are involved. In such instances, the individual(s) with the conflict will be excluded from the decision-making
process relating to such issues.
Voting Fund of
Funds
There
may be conflicts that can arise from Invesco voting on matters when shares of Invesco-sponsored funds are held by other Invesco funds
or entities. The scenarios below set out how Invesco votes in these instances.
•
In
the United States, as required by law, proportional voting applies.
•
Shares
of an Invesco-sponsored fund held by other Invesco funds will be voted in the same proportion as the votes of external shareholders of
the underlying fund, where required by law.
•
Shares
of an unaffiliated registered fund held by one or more Invesco funds will be voted in the same proportion as the votes of external shareholders
of the underlying fund where the thresholds are met as required by federal securities law or any exemption therefrom.
•
To
the extent proportional voting is required by law, but not operationally possible, Invesco will not vote the shares.
•
For
US fund of funds where proportional voting is not required by law, Invesco will still apply proportional voting. In the event this is
not operationally possible, Invesco will vote in line with our internally developed voting guidelines (as defined below).
•
For
non-US fund of funds Invesco will vote in line with our above-mentioned firm-level conflicts of interest process unless we have local
policies in place as per Exhibit A.
H.
Use of Third-Party Proxy Advisory Services
Invesco
may supplement its internal research with information from independent third-parties, such as proxy advisory firms. Globally, Invesco
leverages research from Institutional Shareholder Services Inc. (“ISS”) and Glass Lewis (“GL”). Invesco generally
retains full and independent discretion with respect to proxy voting decisions.
ISS
and GL both provide research reports, including vote recommendations, to Invesco and its portfolio managers and analysts. Invesco retains
ISS to provide recommendations based on Invesco’s internally developed custom guidelines. Updates to previously issued proxy research
reports may be provided to incorporate newly available information or additional disclosure provided by the issuer regarding a matter
to be voted on, or to correct factual errors which may result in the issuance of revised proxy vote recommendations. Invesco’s
proxy administration team may periodically monitor for these research alerts issued by ISS and GL that are shared with our investment
teams. There may be instances where these updates may not be provided in a timely manner ahead of the vote deadline.
Invesco
also retains ISS to assist with services that include receipt of proxy ballots, vote execution through PROXYintel and vote disclosure
in Canada, the UK and Europe to meet regulatory reporting obligations.
As
part of its fiduciary obligation to clients, Invesco performs extensive initial and ongoing due diligence on the proxy advisory firms
it engages globally. This includes reviews of information regarding the capabilities of their research staff, methodologies for formulating
voting recommendations, the adequacy and quality of personnel and technology, as applicable, and internal controls, policies and procedures,
including those relating to possible conflicts of interest.
The
proxy advisory firms Invesco engages globally complete an annual due diligence questionnaire submitted by Invesco, and Invesco conducts
annual due diligence meetings in part to discuss their responses to the questionnaire. In addition, Invesco monitors and communicates
with these firms and monitors their compliance with Invesco’s performance and policy standards. ISS and GL disclose conflicts to
Invesco through a review of their policies, procedures and practices regarding potential conflicts of interests (including inherent internal
conflicts) as well as disclosure of the work ISS and GL perform for corporate issuers and the payments they receive from such issuers.
Invesco conducts semi-annual roundtables with external proxy and governance experts and our Global IPAC to ensure
transparency,
dialogue and engagement with the firms. These meetings provide Invesco with an opportunity to assess the firms’ capabilities, conflicts
of interest and service levels, as well as provide investment professionals with direct insight into the advisory firms’ stances
on key governance and proxy topics and their policy framework/methodologies.
Invesco’s
compliance function completes a review of the System and Organizational Controls (“SOC”) Reports for each proxy advisory
firm to ensure the related controls operated effectively to provide reasonable assurance.
In
addition to ISS and GL, Invesco may use regional third-party research providers to access regionally specific research.
I.
Review of Policy
The
Global IPAC and Invesco’s Global ESG team, proxy administration team, compliance and legal teams annually communicate and review
this Policy and our internally developed voting guidelines to seek to ensure that they remain consistent with clients’ best interests,
regulatory requirements, governance trends and industry best practices. At least annually, this Policy and our internally developed voting
guidelines are reviewed by various groups within Invesco to ensure that they remain consistent with Invesco’s views on best practice
in corporate governance and long-term investment stewardship.
III. Our Good Governance Principles
Invesco’s
good governance principles outline our views on best practice in corporate governance and long-term investment stewardship. These principles
have been developed by our global investment teams in collaboration with the Global ESG team. The broad philosophy and guiding principles
in this section inform our approach to investment stewardship and proxy voting. These principles are not intended to be exhaustive or
prescriptive.
Our
portfolio managers and analysts retain full discretion on vote execution except where otherwise specified in this Policy. The final voting
decisions may incorporate the unique circumstances affecting companies, regional best practices and any dialogue we have had with company
management. To the extent a portfolio manager chooses to vote a proxy in a way that is not aligned with the principles below, such manager’s
rationales are fully documented.
The
following guiding principles apply to operating companies. We apply a separate approach to investment companies and unit investment trusts.
Where appropriate, these guidelines are supplemented by additional internal guidance that considers regional variations in best practices,
disclosure and region-specific voting items.
The
following are high-level governance principles that Invesco endorses:
A.
Transparency
Investors
require accurate, timely and complete information in order to make informed investment decisions and effectively carry out their stewardship
obligations. Invesco supports the highest standards in corporate transparency, including but not limited to the following areas:
Financial
reporting: Company accounts and reporting must accurately reflect the underlying economic
position of a company. Arrangements that may constitute an actual or perceived conflict with this objective should be avoided.
•
We
will generally vote against the incumbent audit committee chair, or nearest equivalent, where the non-audit fees paid to the independent
auditor exceed audit fees for two consecutive years or other problematic accounting practices are identified such as fraud, misapplication
of audit standards or persistent material weaknesses/deficiencies in internal controls
over financial reporting.
•
We
will generally not support the ratification of the independent auditor and/or ratification of their fees payable if non-audit fees exceed
audit and audit related fees or there are significant auditing controversies or questions regarding the independence of the external auditor.
We will consider an auditor’s length of service as a company’s independent auditor in applying this policy.
B. Accountability
Robust
shareholder rights and strong board oversight help ensure that management adhere to the highest standards of ethical conduct, are held
to account for poor performance and responsibly deliver value creation for stakeholders over the long-term. We therefore encourage companies
to adopt governance features that ensure board and management accountability. In particular, we consider the following as key mechanisms
for enhancing accountability to investors:
One
share one vote: Voting rights are an important tool for investors to hold boards and management
teams accountable. Unequal voting rights may limit the ability of investors to exercise their stewardship obligations.
•
We
generally do not support proposals that establish or perpetuate dual classes of voting shares, double voting rights or other means of
differentiated voting or disproportionate board nomination rights.
•
We
generally support proposals to decommission differentiated voting rights.
•
Where
unequal voting rights are established, we expect these to be accompanied by reasonable safeguards to protect minority shareholders’
interests.
Anti-takeover
devices: Mechanisms designed to prevent or unduly delay takeover attempts may unduly limit
the accountability of boards and management teams to shareholders.
•
We
generally will not support proposals to adopt antitakeover devices such as poison pills. Exceptions may be warranted at entities without
significant operations and to preserve the value of net operating losses carried forward or where the applicability of the pill is limited
in scope and duration.
•
In
addition, we will generally not support capital authorizations or amendments to corporate articles or bylaws at operating companies that
may be utilized for antitakeover purposes, for example, the authorization of classes of shares of preferred stock with unspecified voting,
dividend, conversion or other rights (“blank check” authorizations).
Shareholder
rights: We support the rights of shareholders to hold boards and management teams accountable
for company performance. We generally support best practice aligned proposals to enhance shareholder rights, including but not limited
to the following:
•
Adoption
of proxy access rights
•
Rights
to call special meetings
•
Rights
to act by written consent
•
Reduce
supermajority vote requirements
•
Remove
antitakeover provisions
•
Requirement
that directors are elected by a majority vote
In
addition, we oppose practices that limit shareholders’ ability to express their views at a general meeting such as bundling unrelated
proposals or several significant article or bylaw amendments into a single voting item. We will generally vote against these proposals
unless we are satisfied that all the underlying components are aligned with our views on best practice.
Director
Indemnification: Invesco recognizes that individuals may be reluctant to serve as corporate
directors if they are personally liable for all related lawsuits and legal costs. As a result, reasonable limitations on directors’
liability can benefit a company and its shareholders by helping to attract and retain qualified directors while preserving recourse for
shareholders in the event of misconduct by directors. Accordingly, unless there is insufficient information to make a decision about the
nature of the proposal, Invesco will generally support proposals to limit directors’ liability and provide indemnification and/or
exculpation, provided that the arrangements are reasonably limited in scope to directors acting in good faith and, in relation to criminal
matters, limited in scope to directors having reasonable grounds for believing the conduct was lawful.
Responsiveness:
Boards should respond to investor concerns in a timely fashion, including reasonable requests to engage with company representatives regarding
such concerns, and address matters that receive significant voting dissent at general meetings of shareholders.
•
We
will generally vote against the lead independent director and/or the incumbent chair of the governance committee, or nearest equivalent,
in cases where the board has not adequately responded to items receiving significant voting opposition from shareholders at an annual
or extraordinary general meeting.
•
We
will generally vote against the lead independent director and/or incumbent chair of the governance committee, or nearest equivalent, where
the board has not adequately responded to a shareholder proposal which has received significant support from shareholders.
•
We
will generally vote against the incumbent chair of the compensation committee if there are significant ongoing concerns with a company’s
compensation practices that have not been addressed by the committee or egregious concerns with the company’s compensation practices
for two years consecutively.
•
In
addition, we will generally vote against the incumbent compensation committee chair where there are ongoing concerns with a company’s
compensation practices and there is no opportunity to express dissatisfaction by voting against an advisory vote on executive compensation,
remuneration report (or policy) or nearest equivalent.
C.
Board Composition
Annual
director elections: Board members should generally stand for
election annually and individually.
•
We
will generally support proposals requesting that directors stand for election annually.
•
We
will generally vote against the incumbent governance committee chair or lead independent director if a company has a declassified board
structure that is not being phased out. This policy will not apply in regions where market practice is for directors to stand for election
on a staggered basis or for boards that do not oversee significant commercial operations.
•
When
a board is presented for election as a slate (i.e., shareholders are unable to vote against individual nominees and must vote for or against
the entire nominated slate of directors) and this approach is not aligned with local market practice, we will generally vote against the
slate in cases where we otherwise would vote against an individual nominee.
•
Where
market practice is to elect directors as a slate we will generally support the nominated slate unless there are governance concerns with
several of the individuals included on the slate or we have broad concerns with the composition of the board such as a lack independence.
Board
size: We will generally defer to the board with respect to determining the optimal number
of board members, provided that the proposed board size is sufficiently large to represent shareholder interests and sufficiently limited
to remain effective.
Definition
of independence: Invesco considers local market definitions of director independence
but applies a proprietary standard for assessing director independence considering a director’s status as a current or former employee
of the business, any commercial or consulting relationships with the company, the level of shares beneficially owned or represented and
familial relationships, among others.
Board
and committee independence: The board of directors, board committees and regional equivalents
should be sufficiently independent from management, substantial shareholders and conflicts of interest. We consider local market practices
in this regard and in general we look for a balance across the board of directors. Above all, we like to see signs of robust challenge
and discussion in the boardroom.
•
We
will generally vote against one or more non-independent directors when a board is less than majority independent, but we will take into
account local market practice with regards to board independence in limited circumstances where this standard is not appropriate.
•
We
will generally vote against non-independent directors serving on the audit committee.
•
We
will generally vote against non-independent directors serving on the compensation committee.
•
We
will generally vote against non-independent directors serving on the nominating committee.
•
In relation
to the board, compensation committee and nominating committee we will consider the appropriateness of significant shareholder representation
in applying this policy. This exception will generally not apply to the audit committee.
Separation
of Chair and CEO roles: We believe that independent board leadership generally enhances management
accountability to investors. Companies deviating from this best practice should provide a strong justification and establish safeguards
to ensure that there is independent oversight of a board’s activities (e.g., by appointing a lead or senior independent director
with clearly defined powers and responsibilities).
•
We
will generally vote against the incumbent nominating committee chair where the board chair is not independent unless a lead independent
or senior director is appointed.
•
We
will generally support shareholder proposals requesting that the board chair be an independent director.
•
We
will generally not vote against a CEO or executive serving as board chair solely on the basis of this issue, however, we may do so in
instances where we have significant concerns regarding a company’s corporate governance, capital allocation decisions and/or compensation
practices.
Attendance
and over boarding: Directors serving on the board should attend at least 75% of their board
and committee meetings, where applicable. In addition, directors should not have excessive external board or managerial commitments that
may interfere with their ability to execute the duties of a director.
•
We
will generally vote against directors who do not attend 75% of their meetings unless there are extenuating circumstances such as health
matters or family emergencies.
•
We
will generally vote against directors who have more than four total mandates at public operating companies. We apply a lower threshold
for directors with significant commitments such as executive positions and chairmanships.
Diversity:
We encourage companies to continue to evolve diversity and inclusion practices. Boards should be comprised of directors with a variety
of relevant skills and industry expertise together with a diverse profile of individuals of different genders, ethnicities, skills, tenures
and backgrounds in order to provide robust challenge and debate. We consider diversity at the board level, within the executive management
team and in the succession pipeline.
•
We
will generally vote against the incumbent nominating committee chair of a board where women constitute less than two board members or
25% of the board, whichever is lower, for two or more consecutive years, unless incremental improvements are being made to diversity practices.
•
In
addition, we will consider a company’s performance on broader types of diversity which may include diversity of skills, non-executive
director tenure, ethnicity or other factors where appropriate and reasonably determinable. We will generally vote against the incumbent
nominating committee chair if there are multiple concerns on diversity issues.
•
We
generally believe that an individual board’s nominating committee is best positioned to determine whether director term limits
would be an appropriate measure to help achieve these goals and, if so, the nature of such limits. Invesco generally opposes proposals
to limit the tenure of outside directors through mandatory retirement ages.
D.
Long Term Stewardship of Capital
Capital
allocation: Invesco expects companies to responsibly raise and deploy capital towards the
long-term, sustainable success of the business. In addition, we expect capital allocation authorizations and decisions to be made with
due regard to shareholder dilution, rights of shareholders to ratify significant corporate actions and pre-emptive rights, where applicable.
Share
issuance and repurchase authorizations: We generally support authorizations to issue shares
up to 20% of a company’s issued share capital for general corporate purposes. Shares should not be issued at a substantial discount
to the market price or be repurchased at a substantial premium to the market price.
Stock
splits: We generally support management proposals to implement a forward or reverse stock
split, provided that a reverse stock split is not being used to take a company private. In addition, we will generally support requests
to increase a company’s common stock authorization if requested in order to facilitate a stock split.
Increases
in authorized share capital: We will generally support proposals to increase a company’s
number of authorized common and/or preferred shares, provided we have not identified concerns regarding a company’s historical
share issuance activity or the potential to use these authorizations for antitakeover purposes. We will consider the amount of the request
in relation to the company’s current authorized share capital, any proposed corporate transactions contingent on approval of these
requests and the cumulative impact on a company’s authorized share capital, for example, if a reverse stock split is concurrently
submitted for shareholder consideration.
Mergers,
acquisitions, proxy contests, disposals and other corporate transactions: Invesco’s
investment teams will review proposed corporate transactions including mergers, acquisitions, reorganizations, proxy contests, private
placements, dissolutions and divestitures based on a proposal’s individual investment merits. In addition, we broadly approach
voting on other corporate transactions as follows:
•
We
will generally support proposals to approve different types of restructurings that provide the necessary financing to save the company
from involuntary bankruptcy.
•
We
will generally support proposals to enact corporate name changes and other proposals related to corporate transactions that we believe
are in shareholders’ best interests.
•
We
will generally support reincorporation proposals, provided that management have provided a compelling rationale for the change in legal
jurisdiction and provided further that the proposal will not significantly adversely impact shareholders’ rights.
•
With
respect to contested director elections, we consider the following factors, among others, when evaluating the merits of each list of nominees:
the long term performance of the company relative to its industry, management’s track record, any relevant background information
related to the contest, the qualifications of the respective lists of director nominees, the strategic merits of the approaches proposed
by both sides including the likelihood that the proposed goals can be met, positions of stock ownership in the company.
E.
Environmental, Social and Governance Risk Oversight
Director
responsibility for risk oversight: The board of directors are ultimately responsible for
overseeing management and ensuring that proper governance, oversight and control mechanisms are in place at the companies they oversee.
Invesco may take voting action against director nominees in response to material governance or risk oversight failures that adversely
affect shareholder value.
Invesco
considers the adequacy of a company’s response to material oversight failures when determining whether any voting action is warranted.
In addition, Invesco will consider the responsibilities delegated to board subcommittees when determining if it is appropriate to hold
certain director nominees accountable for these material failures.
Material
governance or risk oversight failures at a company may include, without limitation:
(i)
significant
bribery, corruption or ethics violations;
(ii)
events
causing significant environmental degradation;
(iii)
significant
health and safety incidents; or
(iv)
failure
to ensure the protection of human rights.
Reporting
of financially material ESG information: Companies should report on their environmental,
social and governance opportunities and risks where material to their business operations.
•
Where
Invesco finds significant gaps in terms of management and disclosure of environmental, social and governance risk policies, we will generally
vote against the annual reporting and accounts or an equivalent resolution.
Shareholder
proposals addressing environmental and social risks: Invesco may support shareholder resolutions
requesting that specific actions be taken to address environmental and social issues or mitigate exposure to material environmental and
social risks, including reputational risk, related to these issues. When considering such proposals, we will consider a company’s
track record managing these risks, the efficacy of the proposal’s request and whether the requested action is unduly burdensome.
•
We
generally do not support resolutions where insufficient information has been provided in advance of the vote or a lack of disclosure inhibits
our ability to make fully informed voting decisions.
•
We will
generally support shareholder resolutions requesting that companies provide additional information on material environmental, social and
governance risks facing their businesses, provided that such requests are not unduly burdensome or duplicative with a company’s
existing reporting. These may include but are not limited to the following: gender pay gap reporting requests, political contributions
and lobbying disclosure, information on data security, privacy, and internet practices, and reporting on climate change risks.
Ratification
of board and/or management acts: We will generally support proposals to ratify the actions
of the board of directors, supervisory board and/or executive decision-making bodies, provided there are no material oversight failures
as described above. When such oversight concerns are identified, we will consider a company’s response to any issues raised and
may vote against ratification proposals instead of, or in addition to, director nominees.
F.
Executive Compensation and Alignment
Invesco
supports compensation polices and equity incentive plans that promote alignment between management incentives and shareholders’
long-term interests. We pay close attention to local market practice and may apply stricter or modified criteria where appropriate.
Advisory
votes on executive compensation, remuneration policy and remuneration reports: We will generally
not support compensation related proposals where more than one of the following is present:
(i)
there
is an unmitigated misalignment between executive pay and company performance for at least two consecutive years;
(ii)
there
are problematic compensation practices which may include among others incentivizing excessive risk taking or circumventing alignment between
management and shareholders’ interests via repricing of underwater options;
(iii)
vesting
periods for long term incentive awards are less than three years;
(iv)
the
company “front loads” equity awards;
(v)
there
are inadequate risk mitigating features in the program such as clawback provisions;
(vi)
excessive,
discretionary one-time equity grants are awarded to executives;
(vii)
less
than half of variable pay is linked to performance targets, except where prohibited by law.
Invesco
will consider company reporting on pay ratios as part of our evaluation of compensation proposals, where relevant.
Equity
plans: Invesco generally supports equity compensation plans that promote the proper alignment
of incentives with shareholders’ long-term interests, and generally votes against plans that are overly dilutive to existing shareholders,
plans that contain objectionable structural features which may include provisions to reprice options without shareholder approval, plans
that include evergreen provisions or plans that provide for automatic accelerated vesting upon a change in control.
Employee
stock purchase plans: We generally support employee stock purchase plans that are reasonably
designed to provide proper incentives to a broad base of employees, provided that the price at which employees may acquire stock represents
a reasonable discount from the market price.
Severance
Arrangements: Invesco considers proposed severance arrangements (sometimes known as “golden
parachute” arrangements) on a case-by-case basis due to the wide variety among their terms. Invesco acknowledges that in some cases
such arrangements, if reasonable, may be in shareholders’ best interests as a method of attracting and retaining high quality executive
talent. We generally vote in favor of proposals requiring shareholder ratification of senior executives’ severance agreements where
the proposed terms and disclosure align with good market practice.
Exhibit A
Invesco
Advisers, Inc.
Invesco
Asset Management (India) Pvt. Ltd*1
Invesco
Asset Management (Japan) Limited*1
Invesco
Asset Management (Schweiz) AG
Invesco
Asset Management Deutschland GmbH
Invesco
Asset Management Limited1
Invesco
Asset Management Singapore Ltd
Invesco
Asset Management Spain
Invesco
Australia Ltd
Invesco
Canada Ltd.1
Invesco
Capital Management LLC
Invesco
Capital Markets, Inc.*1
Invesco
Hong Kong Limited
Invesco
Investment Advisers LLC
Invesco
Investment Management (Shanghai) Limited
Invesco
Investment Management Limited
Invesco
Managed Accounts, LLC
Invesco
Management S.A
Invesco
Overseas
Investment
Fund Management (Shanghai) Limited
Invesco
Pensions Limited
Invesco
Private Capital, Inc.
Invesco
Real Estate Management S.a.r.l1
Invesco
Senior Secured Management, Inc.
Invesco
Taiwan Ltd*1
Invesco
Trust Company Oppenheimer Funds, Inc.
WL
Ross & Co. LLC
* Invesco
entities with specific proxy voting guidelines
1 Invesco
entities with specific conflicts of interest policies
THOMPSON, SIEGEL & WALMSLEY LLC
PROXY VOTING
Policy
Thompson, Siegel
& Walmsley LLC (“TSW”) has a fiduciary responsibility to its clients for voting proxies, where authorized, for portfolio
securities consistent with the best economic interests of its clients. TSW 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 voting policies and practices
in Form ADV Part 2A. In addition, we review our policies and practices no less than annually for adequacy; to make sure they have
been implemented effectively, and to make sure they continue to be reasonably designed to ensure that proxies are voted in the best interests
of our clients. Our policy and practice include the responsibility to monitor corporate actions and potential conflicts of interest, receive
and vote client proxies, and make information available to clients about the voting of proxies for their portfolio securities while maintaining
relevant and required records.
Background
Proxy
voting is an important right of shareholders, and reasonable care and diligence should be undertaken to ensure that such rights are properly
exercised.
Investment
advisers registered with the SEC, and which 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 should 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 to clients a summary of its proxy voting policies and procedures and, upon
request, furnish a copy to its clients; and (d) maintain certain records relating to the adviser’s proxy voting activities when
the adviser does have proxy voting authority.
A
related companion release by the SEC also adopted rule and form amendments under the Securities Act and Investment Company Act similar
to the above which TSW complies with when acting as a sub-adviser to a mutual fund.
Responsibility
TSW’s
Senior Compliance Officer (Proxy Coordinator) has the responsibility for the organization and monitoring of our Proxy Voting policy, practices,
and recordkeeping. Implementation and disclosure, including outlining our voting guidelines in our procedures, is the responsibility of
the CCO and Director of Operations. TSW has retained the services of a third-party provider, Institutional Shareholder Services, Inc.
(“ISS”) to assist with the proxy process. ISS is a Registered Investment Adviser under the Advisers Act. It is a leading
provider of proxy voting and corporate governance services. ISS provides TSW proxy proposal research and voting recommendations and votes
proxies on TSW’s behalf in accordance with ISS’s standard voting guidelines. Those guidelines cover the following areas:
•
Operational
Issues
•
Board
of Directors
•
Proxy
Contests
•
Anti-takeover
Defenses and Voting Related Issues
•
Mergers
and Corporate Restructurings
•
State
of Incorporation
•
Capital
Structure
•
Executive
& Director Compensation
Equity Compensation
Plans
Specific Treatment
of Certain Award Types in Equity Plan Evaluations
Other Compensation
Proposals & Policies
Shareholder
Proposals on Compensation
•
Social/Environmental
Issues
Consumer Issues
and Public Safety
Environment
and Energy
General Corporate
Issues
Labor Standards
and Human Rights
Military Business
Workplace Diversity
•
Mutual
Fund Proxies
TSW
generally believes that voting proxies in a manner that is favorable to a business’s long-term performance and valuation is in
its clients’ best interests. However, a uniform voting policy may not be in the best interest of all clients. While TSW applies
ISS’s standard policy guidelines to most clients, where appropriate we utilize ISS’s Taft-Hartley or Catholic policy guidelines
to meet specific client requirements.
TSW’s
Proxy Coordinator is responsible for monitoring ISS’s voting procedures on an ongoing basis. TSW’s general procedure regarding
the voting of proxies is addressed below. For instances not directly addressed in this policy the Proxy Oversight Representative should
act in accordance with the principles outlined in the SEC’s Guidance Regarding Proxy Voting
Responsibilities of Investment Advisers issued in August 2019 and supplemental release in
September 2020 in consultation with the Proxy Coordinator.
Procedure
TSW
has adopted various procedures and internal controls to review, monitor and ensure the Firm’s Proxy Voting policy is observed,
implemented properly and amended or updated, as appropriate, which include the following:
Voting Procedures
•
Upon
timely receipt of proxy materials, ISS will automatically release vote instructions on client’s behalf as soon as custom research
is completed. TSW retains authority to override the votes (before cut-off date) if TSW disagrees with the vote recommendation.
•
The
Proxy Coordinator will monitor the voting process at ISS via ISS’s Proxy Exchange website (ISS’s online voting and research
platform). Records of which accounts are voted, how accounts are voted, and how many shares are voted are kept electronically with ISS.
•
For
proxies not received by ISS, TSW and ISS will make a best effort attempt to receive ballots from the clients’ custodian prior to
the vote cut-off date.
•
TSW
is responsible for account maintenance – opening and closing of accounts, transmission of holdings and account environment monitoring.
ISS will email TSW Compliance personnel to get approval when closing an account that was not directed by TSW.
•
The
Manager of Research Operations (Proxy Oversight Representative) will keep abreast of any critical or exceptional events or events qualifying
as a conflict of interest via ISS Proxy Exchange website and email.
•
Investment
teams should keep the Manager of Research Operations and the Proxy Coordinator informed of material issues affecting pending or upcoming
proxy votes. If the Manager of Research Operations and the Proxy Coordinator become aware of additional information that would reasonably
be expected to affect TSW’s vote, then this information should be considered prior to voting.
•
TSW
has the ability to override ISS recommended vote instructions and will do so if believed to be in the best interest of the client. All
changes are documented and coordinated between the Proxy Oversight Representative and/or Proxy Coordinator and the Portfolio Manager and/or
Research Analyst. Changes generally occur as a result of TSW’s communication with issuer management regarding matters pertaining
to securities held when the issuer questions or disputes ISS’s voting recommendation.
All proxies
are voted solely in the best interest of clients on a best efforts basis. Proactive communication takes place via regular meetings with
ISS’s Client Relations team.
Disclosure
TSW
will provide conspicuously displayed information in its Disclosure Document summarizing this Proxy Voting policy, including a statement
that clients may request information regarding how TSW voted a client’s proxies, and that clients may request a copy of these policies
and procedures.
See Form ADV,
Part 2A – Item 17– Voting Client Securities
Client Requests for Information
•
All
client requests for information regarding proxy votes, or policies and procedures, received by any associate should be forwarded to the
Proxy Coordinator.
•
In
response to any request, the Proxy Coordinator will prepare a response to the client with the information requested, and as applicable,
will include the name of the issuer, the proposal voted upon, and how TSW voted the client’s proxy with respect to each proposal
about which the client inquired.
Voting Guidelines
•
TSW
has a fiduciary responsibility under ERISA to vote ERISA Plan proxies unless the Plan directs otherwise. TSW will vote proxies when directed
by non-ERISA clients. In the absence of specific voting guidelines from the client and upon timely receipt of proxy materials from the
custodian, TSW will vote proxies in the best interests of each particular client according to the recommended election of ISS. ISS’s
policy is to vote all proxies from a specific issuer the same way for each client, absent qualifying restrictions from a client. Clients
are permitted to place reasonable restrictions on TSW’s voting authority in the same manner that they may place such restrictions
on the actual selection of account securities.
•
ISS
will generally vote in favor of routine corporate housekeeping proposals such as the election of directors and selection of auditors absent
conflicts of interest raised by auditors’ non-audit services.
•
ISS
will generally vote against proposals that cause board members to become entrenched, reduce shareholder control over management or in
some way diminish shareholders’ present or future value.
•
In
reviewing proposals, ISS will further consider the opinion of management and the effect on management, and the effect on shareholder value
and the issuer’s business practices.
•
A
complete summary of ISS’s U.S. and International voting guidelines is available at: https://www.issgovernance.com/policy
Forensic Testing Procedures
•
No
less than quarterly, TSW will review the ISS Proxy Exchange list of accounts voted to ensure all appropriate accounts are being voted.
This will be performed by the Proxy Coordinator.
•
TSW
will conduct periodic tests to review proxy voting records and the application of general voting guidelines, especially in circumstances
such as corporate events (e.g., mergers and acquisition transactions, dissolutions, conversions, consolidations, etc.) or contested director
elections. Any matter warranting additional, often issuer-specific review will be escalated to the Portfolio Manager and Research Analyst
as needed.
•
TSW
occasionally communicates directly with issuer management regarding matters pertaining to securities held in the portfolio when it questions
or disputes ISS’s voting recommendation.
Conflicts of Interest
•
TSW
will identify any conflicts that exist between the interests of the adviser and each client by reviewing the relationship of TSW with
the issuer of each security to determine if TSW or any of its associates has any financial, business or personal relationship with the
issuer.
•
If a material conflict of interest
exists, the Proxy Coordinator will instruct ISS to vote using ISS’s standard policy guidelines which are derived independently
from TSW.
•
TSW
will maintain a record of the voting resolution of any conflict of interest.
•
ISS
also maintains a Conflicts Policy which indicates how they address any potential conflicts of interest and is available at: https://www.issgovernance.com/compliance/due-diligence-materials
Practical Limitations Relating to Proxy Voting
TSW
makes a best effort to vote proxies. In certain circumstances, it may be impractical or impossible for TSW to do so. Identifiable circumstances
include:
•
Limited
Value: Where TSW has concluded that to do so would have no identifiable economic benefit to the client-shareholder;
•
Unjustifiable
Cost: When the costs of or disadvantages resulting from voting, in TSW’s judgment, outweigh the economic benefits of voting;
•
Securities
Lending: If securities are on loan on the record date, the client lending the security is not eligible to vote the proxy. Because TSW
generally is not aware of when a security is on loan, we will not likely have the opportunity to recall the security prior to the record
date; and
•
Failure
to receive proxy statements: TSW may not be able to vote proxies in connection with certain holdings, most frequently for foreign securities,
if it does not receive the account’s proxy statement in time to vote the proxy.
Recordkeeping
TSW
and/or ISS shall retain the following proxy records in accordance with the SEC’s five-year retention requirement:
•
These
policies and procedures and any amendments;
•
Each
proxy statement that ISS receives;
•
A
record of each vote that ISS casts on behalf of TSW;
•
Any
document ISS created that was material to making a decision regarding how to vote proxies, or that memorializes that decision; and
•
A
copy of each client request for information on how ISS voted such client’s proxies (i.e., Vote Summary Report), and a copy of any
response.
Due Diligence and Error Procedures
TSW
will periodically perform due diligence on ISS, focusing on the following areas:
•
Adequacy
of ISS’s staffing and personnel;
•
Adequacy/robustness
of ISS’s Policies and Procedures and review of their policies for conflict issues;
•
Adequacy
of control environment and operational controls of ISS (i.e., SSAE 18);
•
Review
of any specific conflicts ISS may have with regard to TSW;
•
Review
of ISS for any business changes that may affect services provided to TSW; and
•
Review
quarterly reporting package provided by ISS and enhance this package as necessary for any additional information that is needed.
TSW
will take the following steps should there ever be an issue/error that occurs with regard to its proxy voting responsibilities:
•
Follow
up with ISS to determine the cause of and the details surrounding the issue;
•
Report back to the affected
client immediately with such details and how the issue will be resolved;
•
Put
additional controls in place if necessary to prevent such issues from occurring in the future; and
•
Report
back to the affected client with the final resolution and any remedial steps.
WELLINGTON MANAGEMENT COMPANY LLP
GLOBAL PROXY POLICY AND PROCEDURES
Introduction
Wellington
Management Company LLP (“Welllington Management”) has adopted and implemented policies and procedures that it believes are
reasonably designed to ensure that proxies are voted in the best interests of clients for whom it exercises proxy-voting discretion.
Wellington
Management’s Proxy Voting Guidelines (the “Guidelines”) set forth broad guidelines and positions on common proxy
issues that Wellington Management uses in voting on proxies. In addition, Wellington Management also considers each proposal in the context
of the issuer, industry and country or countries in which the issuer’s business is conducted. The Guidelines are not rigid rules
and the merits of a particular proposal may cause Wellington Management to enter a vote that differs from the Guidelines. Wellington Management
seeks to vote all proxies with the goal of increasing long-term client value and, while client investment strategies may differ, applying
this common set of guidelines is consistent with the investment objective of achieving positive long-term investment performance for each
client.
Statement of Policy
Wellington
Management:
1)
Votes
client proxies for which clients have affirmatively delegated proxy-voting authority, in writing, unless it has arranged in advance with
the client to limit the circumstances in which it would exercise voting authority or determines that it is in the best interest of one
or more clients to refrain from voting a given proxy.
2)
Votes
all proxies in the best interests of the client for whom it is voting.
3)
Identifies
and resolves all material proxy-related conflicts of interest between the firm and its clients in the best interests of the client.
Responsibility and Oversight
The
Investment Research Group (“Investment Research”) monitors regulatory requirements with respect to proxy voting and works
with the firm’s Legal and Compliance Group and the Investment Stewardship Committee to develop practices that implement those requirements.
Investment Research also acts as a resource for portfolio managers and research analysts on proxy matters as needed. Day-to-day administration
of the proxy voting process is the responsibility of Investment Research. The Investment Stewardship Committee is responsible for oversight
of the implementation of the Global Proxy Policy and Procedures, review and approval of the Guidelines, identification and resolution
of conflicts of interest, and for providing advice and guidance on specific proxy votes for individual issuers. The Investment Stewardship
Committee reviews the Global Proxy Policy and Procedures annually.
Procedures
Use
of Third-Party Voting Agent Wellington Management uses the services of a third-party
voting agent for research, voting recommendations, and to manage the administrative aspects of proxy voting. The voting agent processes
proxies for client accounts, casts votes based on the Guidelines and maintains records of proxies voted. Wellington Management complements
the research received by its primary voting agent with research from another voting agent.
Receipt
of Proxy If a client requests that Wellington Management votes proxies on its behalf,
the client must instruct its custodian bank to deliver all relevant voting material to Wellington Management or its voting agent.
Reconciliation Each
public security proxy received by electronic means is matched to the securities eligible to be voted and a reminder is sent to any custodian
or trustee that has not forwarded the proxies as due. This reconciliation is performed at the ballot level. Although proxies received
for private securities, as well as those received in non-electronic format, are voted as received, Wellington Management is not able to
reconcile these ballots, nor does it notify custodians of non-receipt.
Research In
addition to proprietary investment research undertaken by Wellington Management investment professionals, Investment Research conducts
proxy research internally, and uses the resources of a number of external sources including third-party voting agents to keep abreast
of developments in corporate governance and of current practices of specific companies.
Proxy
Voting Following the reconciliation process, each proxy is compared against the Guidelines,
and handled as follows:
•
Generally,
issues for which explicit proxy voting guidance is provided in the Guidelines (i.e., “For”, “Against”, “Abstain”)
are voted in accordance with the Guidelines.
•
Issues
identified as “case-by-case” in the Guidelines are further reviewed by Investment Research. In certain circumstances, further
input is needed, so the issues are forwarded to the relevant research analyst and/or portfolio manager(s) for their input.
•
Absent
a material conflict of interest, the portfolio manager has the authority to decide the final vote. Different portfolio managers holding
the same securities may arrive at different voting conclusions for their clients’ proxies.
Wellington
Management reviews a subset of the voting record to ensure that proxies are voted in accordance with these Global
Proxy Policy and Procedures and the Guidelines; and ensures that documentation and reports,
for clients and for internal purposes, relating to the voting of proxies are promptly and properly prepared and disseminated.
Material
Conflict of Interest Identification and Resolution Processes Wellington Management’s
broadly diversified client base and functional lines of responsibility serve to minimize the number of, but not prevent, material conflicts
of interest it faces in voting proxies. Annually, the Investment Stewardship Committee sets standards for identifying material conflicts
based on client, vendor, and lender relationships, and publishes those standards to individuals involved in the proxy voting process.
In addition, the Investment Stewardship Committee encourages all personnel to contact Investment Research about apparent conflicts of
interest, even if the apparent conflict does not meet the published materiality criteria. Apparent conflicts are reviewed by designated
members of the Investment Stewardship Committee to determine if there is a conflict and if so whether the conflict is material.
If
a proxy is identified as presenting a material conflict of interest, the matter must be reviewed by designated members of the Investment
Stewardship Committee, who will resolve the conflict and direct the vote. In certain circumstances, the designated members may determine
that the full Investment Stewardship Committee should convene.
Other Considerations
In
certain instances, Wellington Management may be unable to vote or may determine not to vote a proxy on behalf of one or more clients.
While not exhaustive, the following are potential instances in which a proxy vote might not be entered.
Securities
Lending. In general, Wellington Management does not know when securities have been
lent out pursuant to a client’s securities lending program and are therefore unavailable to be voted. Efforts to recall loaned
securities are not always effective, but, in rare circumstances, Wellington Management may determine voting would outweigh the benefit
to the client resulting from use of securities for lending and recommend that a client attempt to have its custodian recall the security
to permit voting of related proxies.
Share
Blocking and Re-registration. Certain countries impose trading restrictions or requirements
regarding re-registration of securities held in omnibus accounts in order for shareholders to vote a proxy. The potential impact of such
requirements is evaluated when determining whether to vote such proxies.
Lack
of Adequate Information, Untimely Receipt of Proxy Materials, or Excessive Costs. Wellington
Management may abstain from voting a proxy when the proxy statement or other available information is inadequate to allow for an informed
vote, when the proxy materials are not delivered in a timely fashion or when, in Wellington Management’s judgment, the costs exceed
the expected benefits to clients (such as when powers of attorney or consularization are required).
Additional Information
Wellington
Management maintains records related to proxies pursuant to Rule 204-2 of the Investment Advisers Act of 1940 (the “Advisers
Act”), the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and other applicable laws. In addition,
Wellington Management discloses annually how it has exercised its voting rights for significant votes, as require by the EU Shareholder
Rights Directive II (“SRD II”).
Wellington
Management provides clients with a copy of its Global Proxy Policy and Procedures,
including the Guidelines, upon written request. In addition, Wellington Management will provide specific client information relating to
proxy voting to a client upon written request.
Dated: 1 September
2020
WELLINGTON MANAGEMENT COMPANY LLP
GLOBAL PROXY VOTING GUIDELINES
April 2020
Upon
a client’s written request, Wellington Management Company LLP (“Wellington Management”) votes securities that are
held in the client’s account in response to proxies solicited by the issuers of such securities. These guidelines are based on
Wellington Management’s fiduciary obligation to act in the best interest of its clients as shareholders. Hence, Wellington Management
examines and votes each proposal so that the long-term effect of the vote will ultimately increase shareholder value for our clients.
Because ethical considerations can have an impact on the long- term value of assets, our voting practices are also attentive to these
issues, and votes will be cast against unlawful and unethical activity. Further, Wellington Management’s experience in voting proposals
has shown that similar proposals often have different consequences for different companies.
Moreover,
while these Global Proxy Voting Guidelines are written to apply globally, differences in local practice and law make universal application
impractical. Therefore, each proposal is evaluated on its merits, considering its effects on the specific company in question and on the
company within its industry. It should be noted that the following are guidelines, and not rigid rules, and Wellington Management reserves
the right in all cases to vote contrary to guidelines where doing so is judged to represent the best interest of its clients.
Our approach
to stewardship
The
goal of our stewardship activities — engaging with companies and voting proxies on our clients’ behalf — is to support
decisions that we believe will maximize the long-term value of securities we hold in client portfolios. The mechanisms we use to implement
our stewardship activities vary by asset class. Engagement applies to all our investments across equity and credit, in both private and
public markets. Proxy voting applies only to public equities.
In
addition to our extensive research on sustainable investing, we partner with leading organizations to educate ourselves and provide leadership
on asset management perspectives relevant to our stewardship activities. These include the Principles of Responsible Investment (PRI),
Ceres, the Global Impact Investing Network (GIIN), Toniic, and the UN Sustainable Development Goals.
We
are signatories and members of the following stewardship codes and industry initiatives: UK Stewardship Code, Japan Stewardship Code,
Hong Kong Principles of Responsible Ownership, Investor Stewardship Group (US), the International Corporate Governance Network, the Asian
Corporate Governance Association, the Investor Forum (UK), the Task Force for Climate-Related Financial Disclosure (TCFD), ClimateAction100+,
the Transition Pathway Initiative, CDP (formerly Carbon Disclosure Project), the PRI Statement on ESG in credit ratings, and GRESB.
Asset
manager stewardship extends beyond consideration of ESG issues to any area that may affect the long-term sustainability of an investment.
While the objectives of ESG integration could be limited to risk mitigation and sustainable value assessment, stewardship’s aim
is sustainable value creation. In our view, this can be accomplished by monitoring company behavior, engaging with boards and management
teams, and voting proxies. These activities have long been part of Wellington’s investment ethos, so we embrace the industry’s
heightened focus on stewardship.
Engagement
Direct
engagement with company management on strategy, financial performance and risk, capital structure, and ESG considerations, is central
to our investment process and is coordinated with voting in our stewardship practices. Direct, persistent contact with company management
and boards of directors, both in our offices and with on-site company visits, informs a substantial portion of our company research. Our
investors host more than 10,000 company meetings around the world each year. Maintaining this ongoing dialogue is central to how we implement
our stewardship responsibilities and informs the investment decisions we make on behalf of our clients.
Prioritization
of stewardship activities is a bottom-up process that requires numerous inputs, including level of ownership and materiality of industry-
and company-specific risks. Through engagement we seek to gain differentiated insights, develop productive ongoing dialogue, and impact
company behavior. In addition to the objectives established for specific company engagements, the ESG Research Team annually sets stewardship
priorities relevant across companies and sectors for the coming year.
As a large
firm that has been investing in nearly all sectors of the global securities markets for decades, we have ongoing, direct access to company
management. Give the number of meetings we conduct, the breadth of our contacts, and the quality of discourse we require, this degree
of access is invaluable. We prefer to engage privately with investee companies, which encourages an open, constructive, lasting dialogue.
We seek to ensure that companies are acting in the best interest of their capital providers, in the same way we are responsible for acting
in the best interest of our clients.
We
take a multidisciplinary approach in our engagement process, including perspectives from equity, industry, fixed income, and ESG analysts
for a richer dialogue. Our company meetings are open to all interested investment personnel. Our central-research collaboration platform
and other forums, such as our daily Morning Meeting, facilitate insight and information sharing. Diversity of perspectives is a key strength
of our model, as it encourages debate, which can ultimately help reinforce conviction in investment decisions.
Cultivating
relationships with other asset management firms, academia, and broader industry organizations allows us to share insights on corporate
governance trends and local market considerations. Whenever permissible under applicable laws and regulations we may communicate with
other firms to reach an outcome that is in our clients’ best interest. We also speak with business partners, employee representatives,
suppliers, and nongovernmental organizations, where this dialogue may provide incremental insight into how a company considers its various
stakeholders.
Board engagement
We
believe meeting directly with corporate boards can enhance discussions about long-term material ESG issues, complement our ongoing conversations
with management teams, and help us assess a board’s effectiveness — which is challenging to do using company disclosures
alone. We believe this ongoing dialogue benefits board members as well. Engagement with active managers provides an opportunity for directors
to ask questions, gain market insights, and hear how the company compares with peers. Questions from investors often signal emerging areas
of emphasis for a company. We view it as a missed opportunity and negative signal when directors appear defensive or dismissive of external
perspectives. We believe continuous dialogue with investors can help ensure honest feedback and foster trust and transparency, which may
enable both parties to anticipate and manage potential issues.
Please
see Wellington’s Engagement Policy for more information.
Our approach
to voting
We
vote proxies in what we consider to be the best interests of our clients as shareholders and in a manner that we believe maximizes the
value of their holdings. Our approach to voting is investment-led and serves as an influential component of our engagement and escalation
strategy. We prefer that clients delegate voting responsibility to their portfolio managers. The Investment Stewardship Committee, a cross-functional
group of experienced professionals, establishes Wellington Management’s Proxy Voting Guidelines.
The
ESG Research Team examines proxy proposals on their merits and recommends voting against proposals that we believe would have a negative
effect on shareholder rights or the current or future market value of the company’s securities. This team also provides recommendations
to each portfolio manager who makes the final decision for their client portfolios, absent a material conflict of interest. Consistent
with our community-of-boutiques model, portfolio managers occasionally arrive at different voting conclusions for their clients, resulting
in a split decision for the same security. This robust set of voting procedures and the deliberation that occurs prior to a vote decision
are aligned with our role as active owners and fiduciaries for our clients.
Voting guidelines
Board composition and role of directors
We
believe that shareholders’ ability to elect directors annually is an important shareholder right. While we generally support management
nominees, we will withhold votes for any director who acts against shareholders’ best economic interests. We may also withhold
votes from directors who fail to implement shareholder proposals that have received majority support, implement poison pills without shareholder
approval, fail to attend at least 75% of scheduled board meetings, or serve on an excessive number of public company boards (see Director
attendance and commitment below). We support proposals to declassify a board and enable annual
director elections.
In
our assessment of board effectiveness, we seek to understand how the board collaborates with management and delineates responsibilities.
This is why direct engagement with board members is such an important part of our investment
process. We look for indications
that directors foster healthy debate in the boardroom, develop constructive relationships with management, and challenge the team when
appropriate. Where we see opportunities for improvement, we use these discussions to provide feedback and explain how changes we suggest
can benefit our clients, the ultimate owner of the company’s securities.
We
do not have specific voting policies relating to director age or tenure. We prefer to take a holistic view, evaluating whether the company
is balancing the perspectives of new directors with the institutional knowledge of longer-serving board members. Succession planning is
a key topic during many of our board engagements. Companies in certain markets are governed by multi-tiered boards, with each tier having
different responsibilities. We hold supervisory board members to similar standards, subject to prevailing local governance best practices.
Board independence
In
our view, boards can best represent shareholders when enough directors are present to challenge and counsel management. We believe that
most board members should be independent, as defined by the local market regulatory authority. This is particularly true of audit, compensation,
and nominating committees.
At
times, we may withhold approval for non-independent directors or those responsible for the board composition. We typically vote in support
of shareholder proposals calling for independence. To determine appropriate minimum levels of board independence, we look to the prevailing
market best practices; two-thirds in the US, for example, and majority in the UK and France. In Japan, we will consider voting against
the board chair (or most senior executive on the ballot) in cases where the board — including statutory auditors — is less
than one-third independent.
Because
boards are responsible for overseeing execution, evaluating and compensating top management, and coordinating CEO succession, we believe
that having an independent chair is the preferred structure for board leadership. Having an independent chair avoids the inherent conflict
of self-oversight and helps ensure robust debate and diversity of thought in the boardroom. We will generally support management proposals
to separate the chair and CEO or establish a lead director, but we take a case-by-case approach in assessing corporate leadership structures.
For example, we may support the involvement of an outgoing CEO as executive chair for a limited period to ensure a smooth transition to
new management. However, after the transition, we expect the board to appoint an independent chair and account for separate roles in succession
planning. Through engagement and voting, we continue to encourage boards to signal the importance of oversight on behalf of shareholders
through the adoption of this leadership structure.
Board diversity
We
believe boards that reflect a wide range of perspectives create shareholder value. Diverse boardrooms help companies make better strategic
decisions and navigate increasingly complex issues, including geopolitical risks, regulatory intricacies, disruptive technologies, and
shareholder activism.
We
encourage companies to consider the widest possible pool of skilled candidates. We think it is not in shareholders’ best interests
for the full board to be comprised of directors from the same industry, gender, race, nationality, or ethnic group. Though we understand
that gender is just one of many facets of diversity, we focus our voting policy on gender diversity because it is easily measured and
governance standards for gender diversity already exist in several markets. We address other aspects of diversity through our engagements
with companies. While some industries have a relatively small number of women and other diverse executives in senior roles, we are generally
unpersuaded by the contention that a board cannot find any qualified diverse directors.
We
reserve the right to vote against the reelection of the nomination and/or governance Chair if we think a board is not meeting local market
standards from a diversity perspective. In defining the market standard, we refer to quotas established by local governance codes, which
exist in many European markets. In the US, we look for at least one female on the board in the US as a minimum standard. If the Nomination
and/or Governance Chair is not up for reelection, we may vote against other committee members, including the Board Chair.
Director attendance and commitment
We
consider attending at least 75% of board meetings to be a minimum requirement and may vote against directors who fall below that threshold.
We also expect directors to have the time and energy to fully commit to the company and fulfill their board-related responsibilities.
Our internal voting guidelines define professional directors as “over- boarded” when serving on five or more public company
boards; and public company executives when serving on three or more
public company boards, including
their own. Representation on boards of affiliate or subsidiary public companies do not count toward these thresholds, as we recognize
that these are extensions of the directorship on the parent company board. We may make exceptions to this approach to accommodate prevailing
market standards. We may also consider a director’s role on the board in assessing his or her overall commitments. For example,
we would look less favorably on a director serving as chair of multiple audit committees given the time commitment required by this role.
Majority vote on election of directors
Because
we believe the election of directors by a majority of votes cast is the appropriate standard, we will generally support proposals that
seek to adopt such a standard. Our support will typically extend to situations where the relevant company has an existing resignation
policy for directors that receive a majority of “withhold” votes. We believe majority voting should be defined in the company’s
charter and not simply in its corporate governance policy.
Generally,
we will not support proposals that fail to provide for the exceptional use of a plurality standard in the case of contested elections.
Further, we will not support proposals that seek to adopt a standard of majority of votes outstanding (total votes eligible as opposed
to votes cast). We likely will support shareholder and management proposals to remove existing supermajority vote requirements.
Contested director elections
We
approach contested director elections on a case-by-case basis, considering the specific circumstances of each situation to determine what
we believe to be in the best interest of our clients. In each case, we welcome the opportunity to engage with both the company and the
proponent to ensure that we understand both perspectives and are making an informed decision on our clients’ behalf.
Compensation
Executive
compensation plans establish the incentive structure that plays a role in strategy-setting, decision-making, and risk management. While
design and structure vary widely, we believe the most effective compensation plans attract and retain high caliber executives, foster
a culture of performance and accountability, and align management’s interests with those of long-term shareholders.
Due
to each company’s unique circumstances and wide range of plan structures, Wellington determines support for a compensation plan
on a case-by-case basis. We support plans that we believe lead to long-term value creation for our clients. We may also support poorly
structured plans where we have seen some improvement, recognizing compensation committees’ willingness to engage with shareholder
and implement recommendations that enhance the plan. We support the right to vote on compensation plans annually.
In
evaluating compensation plans, we consider the following attributes in the context of the company’s business, size, industry, and
geographic location:
•
Alignment
— We believe in pay-for-performance and encourage plan structures that align executive compensation with shareholder experience.
We compare total compensation to performance metrics on an absolute and relative basis over various timeframes, and we look for strong
positive correlation. To ensure shareholder alignment, executives should maintain meaningful equity ownership in the company while they
are employed, and for a period thereafter.
•
Transparency
— We expect compensation committees to articulate the decision-making process and rationale behind the plan structure, and to provide
adequate disclosure so shareholders can evaluate actual compensation relative to the committee’s intentions. Disclosure should
include how metrics, targets, and timeframes are chosen, and detail desired outcomes. We also seek to understand how the compensation
committee determines the target level of compensation and constructs the peer group for benchmarking purposes.
•
Structure
— The plan should be clear and comprehensible. We look for a mix of cash versus equity, fixed versus variable, and short- versus
long-term pay that incentivizes appropriate risk-taking and aligns with industry practice. Performance targets should be achievable but
rigorous, and equity awards should be subject to performance and/or vesting periods of at least three years, to discourage executives
from managing the business with a near-term focus. Unless otherwise specified by local market regulators, performance-based compensation
should be based primarily on quantitative financial and non-financial criteria such as ESG-related criteria.
There is scope, however, for qualitative
criteria related to strategic, individual, or ESG goals, that are critical to the business. Qualitative goals may be acceptable if a
compensation committee has demonstrated a fair and consistent approach to evaluating qualitative performance and applying discretion over
time.
•
Accountability
— Compensation committees should be able to use discretion, positive and negative, to ensure compensation aligns with performance,
and provide a cogent explanation to shareholders. We generally oppose one-time awards aimed at retention or achieving a pre-determined
goal. Barring an extenuating circumstance, we view retesting provisions unfavorably.
We
seek to establish mutually beneficial dialogues with companies regarding their compensation policies. Where we see opportunities for improvement,
we provide feedback and explain how the suggestions can benefit our clients. We use voting, an extension of our engagement efforts, to
convey our views and drive change, if necessary. We expect compensation committees to respond to shareholder engagement and voting outcomes,
and to disclose how these external perspectives are considered in the committee’s decisions.
Approving equity incentive plans
A
well-designed equity incentive plan facilitates the alignment of interests of long-term shareholders, management, employees, and directors.
We evaluate equity-based compensation plans on a case-by-case basis, considering projected plan costs, plan features, and grant practices.
We reconsider our support for a plan if we believe these factors, on balance, are not in the best interest of shareholders. Specific items
of concern may include excessive cost or dilution, unfavorable change-in-control features, insufficient performance conditions, holding/vesting
periods, or stock ownership requirements, repricing stock options/stock appreciate rights (SARs) without prior shareholder approval, or
automatic share replenishment (an “evergreen” feature).
Employee stock purchase plans
We
generally support employee stock purchase plans, as they may align employees’ interests with those of shareholders. That said,
we typically vote against plans that do not offer shares to a broad group of employees (e.g. if only executives can participate) or plans
that offer shares at a significant discount.
Non-executive director compensation
Finding
highly qualified individuals that bring unique skillsets to a board is not easy. When a potential fit is found, we want companies to be
able to compensate a director competitively. We understand that excessive compensation may undermine a director’s independence,
however, so we expect companies to strike this balance accordingly.
We
expect companies to disclose non-executive director compensation. We prefer the use of an annual retainer or fee, delivered as cash, equity,
or a combination. We do not believe non-executive directors should receive performance-based compensation, as this creates a potential
conflict of interest. Non-executive directors oversee executive compensation plans; their objectivity is compromised if they design a
plan that they also participate in.
Severance arrangements
We
will oppose excessively generous arrangements but may support agreements that encourage management to negotiate in shareholders’
best interest. Because we believe severance arrangements require special scrutiny, we generally support proposals calling for shareholder
ratification. We are also mindful of the board’s need for flexibility in recruitment and retention; therefore, we will oppose limitations
on board compensation where respect for industry practice and reasonable overall levels of compensation have been demonstrated.
Clawback policies
We
believe companies should be able to recoup incentive compensation from members of management who received awards based on fraudulent activities,
accounting misstatements, or breaches in standards of conduct that lead to corporate reputational damage. Consequently, we may support
shareholder proposals requesting that a company establish a clawback provision if existing policies do not cover these circumstances.
We also support proposals seeking greater transparency about the application of clawback policies.
Audit quality
and oversight
Scrutiny
of auditors, particularly audit quality and oversight, has been increasing. The Big Four global audit firms currently control the market
but face minimal regulation. In the UK, recent corporate audit failures have increased
regulatory pressures, leading
to proposed rules such as mandating joint audits and operational splits. While scrutiny in the US is less intense and regulation is less
likely in the near term, in our view, regulatory boards, including the SEC and Public Company Accounting Oversight Board (PCAOB) are becoming
more active. When we assess financial statement reporting and audit quality, we will generally support management’s choice of auditors,
unless the auditors have demonstrated failure to act in shareholders’ best economic interest. We also pay close attention to the
non-audit services provided by auditors and consider the potential for the revenue from those services to create conflicts of interest
that could compromise the integrity of financial statement audits.
Shareholder
voting rights
Shareholder rights plans
Also
known as poison pills, these plans can enable boards of directors to negotiate higher takeover prices on behalf of shareholders. Such
plans also may be misused, however, as a means of entrenching management. Consequently, we may support plans that include a shareholder
approval requirement, a sunset provision, or a permitted bid feature (e.g., bids that are made for all shares and demonstrate evidence
of financing must be submitted to a shareholder vote). Because boards generally have the authority to adopt shareholder rights plans without
shareholder approval, we are equally vigilant in our assessment of requests for authorization of blank-check preferred shares (see below).
Multiple voting rights
More
companies choose to go public with a dual-class share structure, a controversial practice that can raise governance and performance concerns.
In our view, dual-class shares are problematic because of the misalignment they can create between shareholders’ economic stake
and their voting power, and for the control they often give a small number of insiders who may make decisions that are not in the interests
of all shareholders. Index providers’ actions to address this issue and encourage one share, one vote structures could have significant
implications for investors, but we believe these can be mitigated by active management and thoughtful stewardship.
We
believe sunset clauses are a reasonable compromise between founders seeking to defend against takeover attempts in pivotal early years,
and shareholders demanding a mechanism for holding management accountable, especially in the event of leadership changes. The Council
of Institutional Investors, a nonprofit association of pension funds, endowments, and foundations, recommends that newly public companies
that adopt structures with unequal voting rights do away with the structure within three to five years.
Without
a sunset clause, we would prefer that a company eliminate a dual-class share structure, as shareholders’ voting power should be
reflected by their economic stake in a company. Similarly, we generally do not support the introduction of loyalty shares, which grant
increased voting rights to investors who hold shares over multiple years, because they create misalignment of voting power and economic
interest.
Proxy access
We
believe shareholders should have the right to nominate director candidates on management’s proxy card. We will generally support
shareholder proposals seeking proxy access unless current policy is in-line with market norms.
Special meeting rights
We
believe the right to call a special meeting is a shareholder right, and we will support such proposals at companies that lack a special-meeting
ownership threshold. We also will support proposals lowering thresholds not in-line with market norms. If shareholders are granted the
right to call special meetings, we generally do not support written consent.
Mergers and acquisitions
We
approach votes to approve mergers and acquisitions on a case-by-case basis, considering the specific circumstances of each proposal to
determine what we believe to be in the best interest of our clients. In conducting our assessment, equity and ESG analysts collaborate
to analyze the fundamental and governance implications, if applicable, to advise portfolio managers in their vote decisions.
Capital structure and capital allocation
Increases in authorized common stock
We
generally support requests for increases up to 100% of the shares currently authorized. Exceptions will be made when the company has clearly
articulated a reasonable need for a greater increase. Conversely, at companies trading in less liquid markets, we may impose a lower threshold.
When companies seek to issue shares without preemptive rights, we consider potential dilution and generally support requests when dilution
is below 20%. For issuance with preemptive rights, we review on a case-by-case basis, considering the size of issuance relative to peers.
Capital allocation (Japan)
Because
poor capital stewardship has led to a lack of shareholder value creation in some Japanese companies, we have begun to hold board chairs
accountable for persistently low returns on equity (ROE), using a five-year average ROE of below 5% as a guide. Our assessment of a company’s
capital stewardship complements our assessment of board effectiveness without dictating specific capital allocation decisions. We may
make exceptions where ROE is improving, where a long-cycle business warrants a different standard, or where new management is in place
and we feel they shouldn’t be punished for the past CEO/Chair’s record.
Environmental
and social issues
Consistent
with our ESG integration philosophy, we assess portfolio companies’ performance on environmental and social issues we deem to be
material to long-term financial performance, and we support shareholder proposals where we think doing so can encourage improvement on
relevant issues. We evaluate shareholder proposals related to environmental and social issues on a case-by-case basis, and we expect portfolio
companies to comply with applicable laws and regulations with regards to environmental and social standards. We consider the spirit of
the proposal, not just the letter, and generally support proposals addressing material issues even when management has been responsive
to our engagement on the issue. In this way, we seek to align our voting with our engagement activities. If our views differ from any
specific suggestions in the proposals, we will provide clarification via direct engagement.
Climate change
As
an asset manager entrusted with investing on our clients’ behalf, we aim to assess, monitor, and manage the potential effects of
climate change on our investment processes and portfolios, as well as on our business operations. As supporters of the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations, we actively engage with portfolio companies to encourage adoption. We believe that climate
change poses a material risk across sectors and geographies, so understanding how companies are assessing and managing climate risk is
key to making informed investment decisions for our clients. For this reason, we generally support shareholder proposals asking for improved
disclosure on climate risk management and we expect to support those that request alignment of business strategies with the Paris Agreement
or similar language. We also generally support proposals asking for board oversight of political contributions and lobbying activities
or those asking for improved disclosures where material inconsistencies in reporting and strategy may exist, especially as it relates
to climate strategy.
We
have been pleased to see rising adoption of the TCFD framework in response to shareholder recommendations. Reporting on climate readiness
will help stakeholders understand companies’ willingness and ability to adapt to or mitigate climate-related risks. However, so
far, many disclosures have been incomplete. Most make scant mention of the physical risks posed to their business by a changing climate.
We will continue focus our stewardship activities in this area, and we are encouraging companies to provide more detail.
To
help us do this, are leveraging findings from our collaborative initiative with Woods Hole Research Center (WHRC), the world’s
leading independent climate research organization, and established disclosure guidance to help companies improve their physical risk disclosures.
We believe integrating the work of WHRC’s climate scientists and our investment research teams enables us to ask nuanced questions
about specific physical risks and more accurately test climate-risk assumptions embedded in companies’ strategies. By narrowing
our engagement dialogue to address relevant threats, we believe we can encourage companies to take early action to address these threats,
potentially improving long-term investment outcomes for shareholders.
Corporate culture, human capital, and diversity & inclusion
The
ability to perpetuate a strong, inclusive culture; align management incentives accordingly; and incorporate employee feedback contributes
to a company’s competitive position. Since culture is challenging to assess from the outside, we examine a company’s holistic
approach. For example, we evaluate whether a company has a well- articulated culture statement and talent development strategy. To us,
these efforts suggest that a company appreciates culture and talent as competitive advantages that can drive long-term value creation.
It also sends a strong message when management compensation is linked, when appropriate, to employee satisfaction. If the company conducts
regular employee engagement surveys, we look for leadership to disclose the results — both positive and negative — so we
can monitor patterns and hold them accountable for implementing changes based on the feedback they receive, we consider workplace locations
and how a company balances attracting talent with the costs of operating in desirable cities.
Understanding
how a company cultivates its human capital is integral to our assessment of culture. In our view, attracting and retaining talent can
create a competitive long-term advantage for any company. These efforts may take time to implement and realize results, but we maintain
that a deliberate human capital management strategy should foster a collaborative, productive workplace in which all talent can thrive.
Companies that invest in and cultivate human capital are well-positioned to realize a competitive advantage and deliver better business
outcomes.
As
part of our focus on human capital, diversity and inclusion is an ongoing engagement issue. We seek to better understand how and to what
extent a company’s approach to diversity is integrated with talent management at all levels. A sound long-term plan holds more
weight than a company’s current demographics, so we look for a demonstrable diversity and inclusion strategy that seeks to improve
metrics over time and align management incentives accordingly. Understanding gender pay equity is often part of our assessment, and we
may support proposals asking for improved transparency.
We
believe diversity among directors, leaders, and employees contributes positively to shareholder value by imbuing a company with myriad
perspectives that help it better navigate complex challenges. A strong culture of diversity and inclusion begins in the boardroom. In
recent years we have targeted US companies with male-only boards for proactive engagement on diversity and have seen many companies improve
the diversity of their boards as a result. From 2020, we will vote against Nominating & Governance Committee Chairs at companies where
the composition of the board continues to lag market standards or best practice.
Stakeholders and risk management
In
our assessment of social risks, we pay attention to how companies treat a key stakeholder: their workforce. We look for signs of constructive
labor relations if employees are unionized, and a focus on key employee concerns, such as safe working conditions and competitive compensation.
In
recent years, discourse on opioids, firearms, and sexual harassment has put the potential for social externalities — the negative
effects that companies can have on society through their products, cultures, or policies — into sharp focus. These nuanced, often
misunderstood issues can affect the value of corporate securities. Today, these are no longer just shareholder concerns; companies need
to consider the opinions and actions of broader stakeholder constituencies, including employees, customers, and the public.
In
our engagement with companies facing these risks, we encourage companies to disclose risk management strategies that acknowledge their
societal impacts. When a company faces litigation or negative press, we inquire about lessons learned and request evidence of substantive
changes that aim to prevent recurrence and mitigate downside risk. In these cases, we may also support proposals requesting enhanced disclosure
on actions taken by management.
Human rights
Following
the 2015 passage of the UK’s Modern Slavery Act, a handful of countries have passed laws requiring companies to report on how they
are addressing risks related to human rights abuses in their global supply chains. Starting in late 2020, Australia’s newest regulation
will also require asset owners to report on these risks in their portfolios. While human rights have been a part of our research and engagement
in this context, we seek to assess companies’ exposures to these risks, determine the sectors for which this risk is most material
(highest possibility of supply-chain exposure), enhance our own engagement questions, and potentially work with external data providers
to gain insights on specific companies or industries. We may also support proposals requesting enhanced disclosure on companies’
approach to mitigating the risk of human rights violations in their business.
Cybersecurity
Robust
cybersecurity practices are imperative for maintaining customer trust, preserving brand strength, and mitigating regulatory risk. Companies
that fail to strengthen their cybersecurity platforms may end up bearing large costs. Through engagement, we aim to compare companies’
approaches to cyber threats, regardless of region or sector, to distinguish businesses that lag from those that are better prepared.
Conclusion
At
Wellington, stewardship is a core part of how we deliver on our goal of maximizing the long-term value of the investments we make on behalf
of our clients. In order to be the best possible stewards of that capital we engage meaningfully and continuously with our investee companies
and do so with a multifaceted approach that brings our collective expertise to bear across financial, industry, credit, and ESG analysis.
We look forward to continuing to engage with the management teams and directors of the companies we invest in as we seek to help them
build long- term, sustainable value in their enterprises.
APPENDIX C—ADDITIONAL PORTFOLIO MANAGER INFORMATION
Barings LLC
Baring International
Investment Limited
The
portfolio manager of the U.S. Government Money Market Fund is Scott Simler.
Other Accounts
Managed:
|
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
|
Scott Simler |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
3 |
|
|
|
$344 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
0 |
|
|
|
$0 |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
12 |
|
|
|
$6,452 million |
|
|
|
|
0 |
|
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the U.S. Government Money Market Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio manager did not own any shares of the U.S. Government Money Market Fund. The portfolio manager does
not directly own any shares of the Fund, but may have an economic interest in the Fund due to his participation in a deferred compensation
plan and/or 401(k) plan.
The
portfolio managers of the Inflation-Protected and Income Fund are Yulia Alekseeva and Douglas Trevallion, II.
Other Accounts
Managed:
|
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
|
Yulia Alekseeva |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
$4,473 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
$710 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
23 |
|
|
|
$13,687 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Douglas Trevallion, II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
$4,473 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
$337 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
29 |
|
|
|
$13,481 million |
|
|
|
|
0 |
|
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Inflation-Protected and Income Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio managers did not own any shares of Inflation-Protected and Income Fund. The portfolio managers do
not directly own any shares of the Fund, but may have an economic interest in the Fund due to their participation in a deferred compensation
plan and/or 401(k) plan.
The
portfolio managers of the Core Bond Fund are Yulia Alekseeva, Stephen Ehrenberg, Charles Sanford, and Douglas Trevallion, II.
Other Accounts Managed:
|
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
|
Yulia Alekseeva |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
$3,680 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
$710 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
23 |
|
|
|
$13,687 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Stephen Ehrenberg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
$3,014 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
2 |
|
|
|
$478 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
39 |
|
|
|
$57,562 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Charles Sanford |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
$3,014 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
$574 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
81 |
|
|
|
$104,896 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Douglas Trevallion, II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
$3,680 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
$337 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
29 |
|
|
|
$13,481 million |
|
|
|
|
0 |
|
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Core Bond Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio managers did not own any shares of the Core Bond Fund. The portfolio managers do not directly own
any shares of the Fund, but may have an economic interest in the Fund due to their participation in a deferred compensation plan and/or
401(k) plan.
The
portfolio managers of the Diversified Bond Fund are Yulia Alekseeva, Stephen Ehrenberg, Charles Sanford, and Douglas Trevallion, II.
Other Accounts Managed:
|
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
|
Yulia Alekseeva |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
$4,617 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
$710 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
23 |
|
|
|
$13,687 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Stephen Ehrenberg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
$3,951 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
2 |
|
|
|
$478 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
39 |
|
|
|
$57,562 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Charles Sanford |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
$3,951 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
$574 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
81 |
|
|
|
$104,896 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Douglas Trevallion, II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
$4,617 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
$337 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
29 |
|
|
|
$13,481 million |
|
|
|
|
0 |
|
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Diversified Bond Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio managers did not own any shares of the Diversified Bond Fund. The portfolio managers do not directly
own any shares of the Fund, but may have an economic interest in the Fund due to their participation in a deferred compensation plan and/or
401(k) plan.
Conflicts of
Interest:
The
potential for material conflicts of interest may exist when a portfolio manager has responsibilities for the day-to-day management of
multiple accounts. These conflicts may be heightened to the extent a portfolio manager, Barings, BIIL and/or an affiliate has an investment
in one or more of such accounts or an interest in the performance of one or more such accounts. Barings and BIIL have identified (and
summarized below) areas where material conflicts of interest are most likely to arise, and have adopted policies and procedures that they
believe are reasonably designed to address such conflicts.
It
is possible that an investment opportunity may be suitable for both a fund and other accounts managed by a portfolio manager, but may
not be available in sufficient quantities for both the fund and the other accounts to participate fully. Similarly, there may be limited
opportunity to sell an investment held by a fund and another account. A conflict may arise where the portfolio manager may have an incentive
to treat an account preferentially as compared to a fund because the account pays Barings and BIIL a performance-based fee or the portfolio
manager, Barings, BIIL or an affiliate has an interest in the account. Barings and BIIL have adopted an investment allocation policy and
trade allocation procedures to address allocation of portfolio transactions and investment opportunities across multiple clients. These
policies are designed to achieve fair and equitable treatment of all clients over time, and specifically prohibit allocations based on
performance of an account, the amount or structure of the management fee, performance fee or profit sharing allocations, participation
or investment by an employee, Barings, BIIL or an affiliate, and whether the account is public, private, proprietary or third party.
Potential
material conflicts of interest may also arise related to the knowledge and timing of a fund’s trades, investment opportunities
and broker selection. Portfolio managers may have information about the size, timing and
possible
market impact of a fund’s trades. It is theoretically possible that portfolio managers could use this information for their personal
advantage and/or the advantage of other accounts they manage, or to the possible detriment of a fund. For example, a portfolio manager
could front run a fund’s trade or short sell a security for an account immediately prior to a fund’s sale of that security.
To address these conflicts, Barings and BIIL have adopted policies and procedures governing employees’ personal securities transactions,
the use of short sales, and trading between the fund and other accounts managed by the portfolio manager or accounts owned by Barings,
BIIL or its affiliates.
With
respect to securities transactions for the funds, Barings and BIIL determine which broker to use to execute each order, consistent with
their duty to seek best execution of the transaction. Barings and BIIL manage certain other accounts, however, where Barings and BIIL
may be limited by the client with respect to the selection of brokers or directed to trade such client’s transactions through a
particular broker. In these cases, trades for a fund in a particular security may be placed separately from, rather than aggregated with,
such other accounts. Placing separate transaction orders for a security may temporarily affect the market price of the security or otherwise
affect the execution of the transaction to the possible detriment of a fund or the other account(s) involved. Barings and BIIL have policies
and procedures that address best execution and directed brokerage.
A
portfolio manager may also face other potential conflicts of interest in managing a fund, and the above is not a complete description
of every conflict of interest that could be deemed to exist in managing both a fund and the other accounts listed above.
Compensation:
The
discussion below describes the portfolio managers’ compensation as of September 30, 2021.
Compensation
packages at Barings and BIIL are structured such that key professionals have a vested interest in the continuing success of each firm.
Portfolio managers’ compensation is comprised of base salary, and a discretionary, performance-driven annual bonus. Certain key
individuals may also receive a long-term incentive award and/or a performance fee award. As part of each firm’s continuing effort
to monitor retention, Barings and BIIL participate in annual compensation surveys of investment management firms and subsidiaries to ensure
that Barings’ and BIIL’s compensation are competitive with industry standards.
The
base salary component is generally positioned at mid-market. Increases are tied to market, individual performance evaluations and budget
constraints.
Portfolio
managers may receive a yearly bonus. Factors impacting the potential bonuses include but are not limited to: i) investment performance
of funds/accounts managed by a portfolio manager, ii) financial performance of Barings and BIIL, iii) client satisfaction, and iv) teamwork.
Long-term
incentives are designed to share the long-term success of the firm and take the form of deferred cash awards, which may include an award
that resembles phantom restricted stock; linking the value of the award to a formula which includes Barings’ and BIIL’s
overall earnings. A voluntary separation of service will result in a forfeiture of unvested long-term incentive awards.
Invesco Advisers, Inc.
Invesco Capital Management LLC
The
portfolio managers of the Balanced Fund are Jacob Borbidge, Matt Brill, Pratik Doshi, Peter Hubbard, Michael D. Hyman, Michael Jeanette,
Duy Nguyen, Todd Schomberg, and Tony Seisser.
Other Accounts
Managed:
|
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
|
Jacob Borbidge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
29 |
|
|
|
$8,678.9 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
4 |
|
|
|
$21,885.5 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
98 |
|
|
|
$1,336.7 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Matt Brill |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
8 |
|
|
|
$15,233.7 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
18 |
|
|
|
$6,955.7 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
0 |
|
|
|
$0 |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Pratik Doshi |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
155 |
|
|
|
$144,560.0 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
66 |
|
|
|
$195,584.8 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
10 |
|
|
|
$11,605.3 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Peter Hubbard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
220 |
|
|
|
$194,059.2 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
83 |
|
|
|
$223,715.1 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
10 |
|
|
|
$11,605.3 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Michael D. Hyman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
9 |
|
|
|
$15,432.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
20 |
|
|
|
$6,762.2 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
3 |
|
|
|
$1,380.5 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Michael Jeanette |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
160 |
|
|
|
$144,801.2 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
55 |
|
|
|
$195,584.8 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
10 |
|
|
|
$11,605.3 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Duy Nguyen |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
30 |
|
|
|
$10,058.3 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
12 |
|
|
|
$519.2 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
98 |
|
|
|
$1,336.7 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Todd Schomberg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
$14,290.7 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
16 |
|
|
|
$6,205.9 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
0 |
|
|
|
$0 |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Tony Seisser |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
156 |
|
|
|
$144,731.3 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
66 |
|
|
|
$195,584.8 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
|
Other accounts |
|
|
|
|
10 |
|
|
|
$11,605.3 million |
|
|
|
|
0 |
|
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Balanced Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio managers did not own any shares of the Balanced Fund.
The
portfolio managers of the Main Street Fund are Manind Govil, Paul Larson, and Benjamin Ram.
Other Accounts
Managed:
|
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
|
Manind Govil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
10 |
|
|
|
$22,244.1 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
1 |
|
|
|
$529.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
1 |
|
|
|
$0.3 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Paul Larson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
8 |
|
|
|
$19,029.9 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
1 |
|
|
|
$529.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
1 |
|
|
|
$0.3 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Benjamin Ram |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
$19,022.7 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
1 |
|
|
|
$529.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
1 |
|
|
|
$0.3 million |
|
|
|
|
0 |
|
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Main Street Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio managers did not own any shares of the Main Street Fund.
The
portfolio managers of the Small Cap Opportunities Fund are Joy Budzinski, Kristin Ketner Pak, Magnus Krantz, Raman Vardharaj, Adam Weiner,
and Matthew P. Ziehl.
Other Accounts Managed:
|
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
|
Joy Budzinski |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
6 |
|
|
|
$7,027.0 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
1 |
|
|
|
$127.1 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
47 |
|
|
|
$100.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Kristin Ketner Pak |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
$5,674.0 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
1 |
|
|
|
$127.1 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
47 |
|
|
|
$100.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Magnus Krantz |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
$7,225.8 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
1 |
|
|
|
$127.1 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
47 |
|
|
|
$100.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Raman Vardharaj |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
$8,664.5 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
1 |
|
|
|
$127.1 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
47 |
|
|
|
$100.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Adam Weiner |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
$5,674.0 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
1 |
|
|
|
$127.1 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
47 |
|
|
|
$100.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Matthew P. Ziehl |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
$5,674.0 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
1 |
|
|
|
$127.1 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
47 |
|
|
|
$100.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Small Cap Opportunities Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio managers did not own any shares of the Small Cap Opportunities Fund.
The
portfolio manager of the Global Fund is John Delano.
Other Accounts Managed:
|
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
|
John Delano |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
8 |
|
|
|
$23,005.0 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
2 |
|
|
|
$155.8 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
5 |
|
|
|
$139.6 million |
|
|
|
|
0 |
|
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Global Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio manager did not own any shares of the Global Fund.
The
portfolio manager of the Strategic Emerging Markets Fund is Justin Leverenz.
Other Accounts
Managed:
|
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
|
Justin Leverenz |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
$51,708.8 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other pooled investment vehicles |
|
|
|
|
8 |
|
|
|
$6,298.1 million |
|
|
|
|
0 |
|
|
|
$0 |
|
|
Other accounts |
|
|
|
|
2 |
|
|
|
$200.3 million |
|
|
|
|
0 |
|
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Strategic Emerging Markets Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio manager did not own any shares of the Strategic Emerging Markets Fund.
Conflicts of
Interest:
Actual
or apparent conflicts of interest may arise when a portfolio manager has day-to-day management responsibilities with respect to more than
one fund or other account. More specifically, portfolio managers who manage multiple funds and/or other accounts may be presented with
one or more of the following potential conflicts:
•
The
management of multiple funds and/or other accounts may result in a portfolio manager devoting unequal time and attention to the management
of each fund and/or other account. Invesco Advisers and ICM seek to manage such competing interests for the time and attention of portfolio
managers by having portfolio managers focus on a particular investment discipline. Most other funds and/or accounts managed by a portfolio
manager are managed using the same investment models that are used in connection with the management of the funds.
•
If
a portfolio manager identifies a limited investment opportunity which may be suitable for more than one fund or other account, a fund
may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible
funds and other accounts. To deal with these situations, Invesco Advisers and ICM have adopted procedures for allocating portfolio transactions
across multiple accounts.
•
Invesco
Advisers and ICM determine which broker to use to execute each order for securities transactions for the funds, consistent with its duty
to seek best execution of the transaction. However, for certain other accounts
(such as
mutual funds for which Invesco Advisers or an affiliate acts as sub-adviser, other pooled investment vehicles that are not registered
mutual funds, and other accounts managed for organizations and individuals), Invesco Advisers and ICM may be limited by the client with
respect to the selection of brokers or may be instructed to direct trades through a particular broker. In these cases, trades for a fund
in a particular security may be placed separately from, rather than aggregated with, such other accounts. Having separate transactions
with respect to a security may temporarily affect the market price of the security or the execution of the transaction, or both, to the
possible detriment of the fund or other account(s) involved.
•
Finally,
the appearance of a conflict of interest may arise where Invesco Advisers and ICM have an incentive, such as a performance-based management
fee, which relates to the management of one fund or account but not all funds and accounts for which a portfolio manager has day-to-day
management responsibilities.
Invesco
Advisers and ICM have adopted certain compliance procedures which are designed to address these types of conflicts. However, there is
no guarantee that such procedures will detect each and every situation in which a conflict arises.
Compensation:
The
discussion below describes the portfolio managers’ compensation as of September 30, 2021.
Invesco
Advisers and ICM seek to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment
professionals. Portfolio managers receive a base salary, an incentive cash bonus opportunity and a deferred compensation opportunity.
Portfolio manager compensation is reviewed and may be modified each year as appropriate to reflect changes in the market, as well as to
adjust the factors used to determine bonuses to promote competitive fund performance. Invesco Advisers and ICM evaluate competitive market
compensation by reviewing compensation survey results conducted by an independent third party of investment industry compensation. Each
portfolio manager’s compensation consists of the following three elements:
Base Salary
Each
portfolio manager is paid a base salary. In setting the base salary, Invesco Advisers’ and ICM’s intention is to be competitive
in light of the particular portfolio manager’s experience and responsibilities.
Annual Bonus
The
portfolio managers are eligible, along with other employees of Invesco Advisers or ICM, to participate in a discretionary year-end bonus
pool. The Compensation Committee of Invesco Ltd. reviews and approves the firm-wide bonus pool based upon progress against strategic objectives
and annual operating plan, including investment performance and financial results. In addition, while having no direct impact on individual
bonuses, assets under management are considered when determining the starting bonus funding levels. Each portfolio manager is eligible
to receive an annual cash bonus which is based on quantitative (i.e., investment performance) and non-quantitative factors (which may
include, but are not limited to, individual performance, risk management and teamwork).
Each
portfolio manager’s compensation is linked to the pre-tax investment performance of the funds/accounts managed by the portfolio
manager as described in Table 1 below.
Table 1
|
Sub-Adviser
|
|
|
Performance time period 1
|
|
|
Invesco Advisers 2
|
|
|
One-, Three- and Five-year
performance against fund peer group. |
|
|
ICM 2, 3
|
|
|
Not applicable |
|
1
Rolling
time periods based on calendar year-end.
2
Portfolio
Managers may be granted an annual deferral award that vests on a pro-rata basis over a four-year period.
3
Portfolio
Managers for ICM base their bonus on Invesco Advisers results as well as overall performance of ICM.
High investment
performance (against applicable peer group and/or benchmarks) would deliver compensation generally associated with top pay in the industry
(determined by reference to the third-party provided compensation survey information) and poor investment performance (versus applicable
peer group) would result in low bonus compared to the
applicable peer group or no
bonus at all. These decisions are reviewed and approved collectively by senior leadership which has responsibility for executing the compensation
approach across the organization.
With
respect to ICM, there is no policy regarding, or agreement with, the portfolio managers or any other senior executive of ICM to receive
bonuses or any other compensation in connection with the performance of any of the accounts managed by the portfolio managers.
Deferred/Long
Term Compensation. Portfolio managers may be granted a deferred compensation
award based on a firm-wide bonus pool approved by the Compensation Committee of Invesco Ltd. Deferred compensation awards may take the
form of annual deferral awards or long-term equity awards. Annual deferral awards may be granted as an annual stock deferral award or
an annual fund deferral award. Annual stock deferral awards are settled in Invesco Ltd. common shares. Annual fund deferral awards are
notionally invested in certain Invesco Funds selected by the Portfolio Manager and are settled in cash. Long-term equity awards are settled
in Invesco Ltd. common shares. Both annual deferral awards and long-term equity awards have a four-year ratable vesting schedule. The
vesting period aligns the interests of the portfolio managers with the long-term interests of clients and shareholders and encourages
retention.
Retirement
and health and welfare arrangements. Portfolio managers are eligible to
participate in retirement and health and welfare plans and programs that are available generally to all employees.
Thompson, Siegel & Walmsley LLC
The portfolio
manager of the International Equity Fund is Brandon H. Harrell.
Other Accounts
Managed:
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
Brandon H. Harrell |
|
Registered investment companies** |
|
|
6 |
|
|
$8,787.6 million |
|
|
0 |
|
|
$0 |
|
Other pooled investment vehicles |
|
|
5 |
|
|
$2,359.4 million |
|
|
0 |
|
|
$0 |
|
Other accounts |
|
|
14 |
|
|
$3,896.2 million |
|
|
0 |
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the International Equity Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio manager did not own any shares of the International Equity Fund.
Conflicts of
Interest:
Policy
All
TSW associates have a duty to act for the benefit of the firm’s clients and to act on clients’ behalf before taking action
in the interest of TSW or any of its associates.
Background
As
a SEC registered adviser, TSW and its associates are subject to various requirements under the Advisers Act and rules adopted thereunder.
These requirements include various anti-fraud provisions which make it unlawful for advisers to engage in any activities which may be
fraudulent, deceptive or manipulative.
TSW
has a fiduciary responsibility to its advisory clients and as such has a duty of loyalty to act in utmost good faith, place its clients’
interests first and foremost and to make full and fair disclosure of all material facts and, information as to potential and/or actual
conflicts of interests.
Responsibility
TSW’s
CCO has the responsibility for implementing and monitoring TSW’s Conflicts of Interest Policy for content and accuracy.
Procedure
TSW
has identified several potential conflicts of interest and adopted various procedures and internal controls to review, monitor and ensure
the firm’s Conflict of Interest Policy is observed, implemented properly and amended or updated, as appropriate. TSW has identified
the following potential conflicts and the specific Policy, ADV disclosure, or reference in the Associates Manual which addresses the conflict:
•
Trade
allocation/rotation favoring proprietary accounts and/or TSW clients with higher fee schedules. TSW’s proprietary accounts and
client accounts with higher fee schedules will participate in bunch trades when appropriate, on an equal basis, with other TSW clients.
This is disclosed in TSW’s disclosure document. TSW’s policies are designed to ensure equitable treatment of all clients’
orders and details may be found in:
Side-by-Side
Management Policy
Trading Policy
–Trade Rotation & Allocations
■
Form ADV, Part 2A - Item 6
– Performance Based Fees and Side-by-Side Management and Item 12 – Brokerage Practices – Bunched Trades/Block Trades
and Partial Fill Process
•
IPO
allocation favoring proprietary accounts or TSW clients with higher fee schedules or performance-based fees. TSW’s allocation policies
are designed to ensure equitable treatment of all clients’ orders participating in IPOs. TSW’s four factor screening process
generally requires at least three years of financial history prior to being considered for purchase which makes it less likely that a
security would be introduced into a client’s account under an IPO.
Side-by-Side
Management Policy
Trading Policy
and Procedure-Initial Public Offerings (IPOs)
■
Form
ADV, Part 2A - Item 6 – Performance Based Fees and Side-by-Side Management and Item 12 – Brokerage Practices – Bunched
Trades / Block Trades and Partial Fill Process
•
Trading
with an affiliate could be a conflict of interest. TSW has developed an Affiliates Policy that addresses this issue and precludes TSW
from trading with its affiliates. The Director of Trading and the Trade Management Oversight Committee has responsibility for overseeing
all firm trading activity to ensure TSW does not trade with its affiliates.
Affiliates Policy
Form ADV, Part
2A – Item 10 – Other Financial Industry Activities and Affiliations - Broker-Dealer
•
TSW
may have a conflict from specific proxy voting issues. TSW’s Proxy Voting Policy addresses potential conflicts of interest by reviewing
the relationship of TSW with the issuer of each security to determine if TSW or any of its associates has any financial, business or personal
relationship with the issuer, where a conflict might exist. If TSW determines that a material conflict exists, TSW will instruct ISS to
vote using ISS’s standard policy guidelines which are derived independently from TSW.
Proxy Voting
Policy
Form ADV, Part
2A – Item 17 - Voting Client Securities
•
Soft
Dollar transactions benefit TSW’s research effort by allocating a portion of client’s trade commissions to brokers with
whom TSW has a commission sharing arrangement (“CSA”) brokers. TSW’s Soft Dollar Policy is designed to ensure that
all research and brokerage services are qualified under the eligibility guidelines of Section 28(e) of the Securities Exchange Act of
1934. All new research or brokerage services and any amendments to existing services are documented in writing. TSW’s Trade Management
Oversight Committee has the responsibility to review overall trading, including transaction costs and the allocation to CSAs, to ensure
TSW doesn’t misallocate more trades to CSAs for unnecessary or inappropriate services.
Soft Dollar
Policy
Form ADV, Part
2A – Item 12 – Brokerage Practices – Soft Dollars
•
The
ability of alternative strategies to short securities held in other TSW long-only accounts could result in conflicting strategies that
could find TSW’s clients at odds with one another. TSW’s Trading Policy addresses this conflict by allowing certain strategies
to short securities held in long only strategies with a minimum market capitalization of $10 billion. Rules are written and tested in
the trading system, Charles River (“CRD”) to monitor this requirement.
Side-by-Side
Management Policy
Trading Policy
■
Form ADV, Part 2A –
Item 6 – Performance-Based Fees and Side-by-Side Management and Item 12 – Brokerage Practices
•
Favoring
investment strategies/accounts in which TSW has additional financial interest other than standard fees (some pooled vehicles and performance-based
fee accounts). TSW’s Trading Policies, including allocation procedures, are designed to ensure all strategies and accounts are
treated fairly. Various restrictions are placed in CRD and tests are performed to ensure accounts in which TSW has a potentially more
favorable financial interest do not take advantage of that position.
Side-by-Side
Management Policy
Trading Policy
– Other Trading Considerations
Form ADV, Part
2A – Item 6 – Performance-Based Fees and Side-by-Side Management
Form ADV, Part
2A – Item 10 – Other Financial Industry Activities and Affiliations
•
TSW
associates’ personal trading and the potential use of inside information can create conflicts but are subject to the TSW Code of
Ethics and Personal Securities Transactions & Records Policy. TSW associates are required to pre-clear personal transactions as required
by the Code of Ethics and transactions are monitored to ensure no associate takes advantage of any TSW client trades.
Personal Securities
Transactions & Records Policy
Code of Ethics
Form ADV, Part
2A –Item 11 – Code of Ethics
•
Portfolio
Manager Compensation could present a portfolio manager an opportunity to advantage one client or a strategy over another if his/her compensation
was so incentivized. TSW’s compensation strategy is not incentivized in that way. TSW’s compensation strategy addresses
this potential conflict by providing competitive base salaries commensurate with an individual’s responsibility and providing incentive
bonus awards that may significantly exceed base salary. Annually, the TSW Compensation Committee is responsible for determining the discretionary
bonus, utilizing an analytical and qualitative assessment process. Factors used to determine compensation are: commitment to TSW’s
core values, long-term performance, the strategy’s strategic position in the overall success of TSW, and support of marketing/client
service commitments. Key associates may be awarded cash bonuses, and deferred TSW equity grants. All qualified employees participate in
the TSW Employees’ Retirement Plan.
•
Side-by-side
management, where a portfolio manager is responsible for managing multiple strategies/accounts, could present instances where a portfolio
manager may devote unequal time and attention to an account or strategy. TSW acknowledges that some of its portfolio managers have input
to multiple strategies and client accounts. TSW feels it has addressed this specific potential conflict by adopting Side-By Side Management
and Trading Policies.
Side-by-Side
Management Policy
Trading Policy
■
Form
ADV, Part 2A – Item 6 – Performance-Based Fees and Side-By-Side Management and Item 12 – Brokerage Practices
•
While
acceptable to the SEC, paying for client referrals can result in a conflict of interest. The SEC’s Cash Solicitation Rule (Rule
206(4)-3) details the rules under which an investment adviser may compensate persons who solicit advisory clients. TSW has incorporated
those rules and necessary disclosure into its Solicitor Arrangement Policy to prevent any conflict of interest.
Solicitor Arrangements
Policy
Form ADV, Part
2A – Item 14 – Client Referrals and Other Compensation
•
Some
of TSW’s related persons are managing members of pooled vehicles and as such, TSW is deemed to have custody of the assets of those
vehicles, which presents an opportunity for a conflict of interest. In order to prevent any conflict, TSW has a third-party administrator
provide monthly reports and annually requires the pooled vehicles to be audited by a Public Company Account Oversight Board (“PCAOB”)
approved auditor, who distributes the audited financial statements to investors
Custody Policy
Form ADV, Part
2A – Item 15 – Custody
•
The
exchange of gifts and entertainment to or from clients or other business associates could influence a TSW associate to improperly favor
such clients or other business associates in violation of the associate’s fiduciary duties. TSW associates are subject to its Code
of Ethics which requires all associates to identify any gifts given or received in their quarterly compliance reporting. TSW associates
are limited to receipt of gifts given or received valued at $100 and entertainment given or received valued at $250, unless approved as
an exception from the CCO or Board member that is not otherwise prohibited under applicable rules. Please note that entertainment can
be either in-person or virtual.
Code of Ethics
Form ADV, Part
2A – Code of Ethics
While
TSW has recognized the conflicts summarized above, it realizes that it cannot identify all possible conflicts that exist or may arise
in its business. Regardless of the ability to identify all conflicts, it has been emphasized to all TSW associates through its policies
and procedures and Code of Ethics to act in utmost good faith, place its clients’ interests first and foremost and to make full
and fair disclosure of all material facts and information as to potential and/or actual conflicts of interests. Form CRS contains additional,
summary disclosures regarding the TSW’s conflicts of interest.
Compensation:
The
discussion below describes the portfolio manager’s compensation as of September 30, 2021.
TSW
believes the firm’s compensation structure is competitive within the industry, both nationally and regionally. The Portfolio Manager
for the International Equity Fund is Brandon H. Harrell. Mr. Harrell is considered a key employee and is subject to the following compensation
description:
TSW’s
compensation strategy is to provide competitive base salaries commensurate with an individual’s responsibility and provide incentive
bonus awards that may significantly exceed base salary. Annually, the TSW Compensation Committee is responsible for determining the discretionary
bonuses, utilizing an analytical and qualitative assessment process. While it is not a formulaic decision, factors used to determine compensation
include: overall firm success, investment team performance and individual contribution. A portion of the bonus (ranging from 20% to 50%)
may be deferred into Pendal stock. All qualified employees participate in the TSW Employees’ Retirement Plan.
Wellington Management Company LLP
The
portfolio managers of the Disciplined Value Fund are Matt J. Kyller and Tom S. Simon.
Other Accounts
Managed:
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
Matt J. Kyller |
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
4 |
|
|
$1,102,277,624 |
|
|
0 |
|
|
$0 |
|
Other pooled investment vehicles |
|
|
5 |
|
|
$21,061,147 |
|
|
0 |
|
|
$0 |
|
Other accounts |
|
|
0 |
|
|
$0 |
|
|
0 |
|
|
$0 |
|
Tom S. Simon |
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
9 |
|
|
$13,827,825,898 |
|
|
0 |
|
|
$0 |
|
Other pooled investment vehicles |
|
|
7 |
|
|
$225,949,833 |
|
|
0 |
|
|
$0 |
|
Other accounts |
|
|
4 |
|
|
$3,779,438,348 |
|
|
0 |
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Disciplined Value Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio managers did not own any shares of the Disciplined Value Fund.
The
portfolio managers of the Disciplined Growth Fund are Matt J. Kyller and Tom S. Simon.
Other Accounts
Managed:
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
Matt J. Kyller |
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
4 |
|
|
$955,577,056 |
|
|
0 |
|
|
$0 |
|
Other pooled investment vehicles |
|
|
5 |
|
|
$21,061,147 |
|
|
0 |
|
|
$0 |
|
Other accounts |
|
|
0 |
|
|
$0 |
|
|
0 |
|
|
$0 |
|
Tom S. Simon |
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
9 |
|
|
$13,681,125,330 |
|
|
0 |
|
|
$0 |
|
Other pooled investment vehicles |
|
|
7 |
|
|
$225,949,833 |
|
|
0 |
|
|
$0 |
|
Other accounts |
|
|
4 |
|
|
$3,779,438,348 |
|
|
0 |
|
|
$0 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Disciplined Growth Fund.
Ownership of Securities:
As
of September 30, 2021, the portfolio managers did not own any shares of the Disciplined Growth Fund.
The
portfolio manager of the International Equity Fund is Peter C. Fisher.
Other Accounts
Managed:
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory Fee is Performance- Based*
|
|
|
Total Assets* |
|
Peter C. Fisher |
|
Registered investment companies** |
|
|
5 |
|
|
$4,211,824,658 |
|
|
0 |
|
|
$0 |
|
Other pooled investment vehicles |
|
|
5 |
|
|
$607,876,610 |
|
|
1 |
|
|
$68,218,777 |
|
Other accounts |
|
|
5 |
|
|
$521,500,196 |
|
|
1 |
|
|
$39,516,811 |
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the International Equity Fund.
Ownership of
Securities:
As
of September 30, 2021, the portfolio manager did not own any shares of the International Equity Fund.
Conflicts of
Interest:
Individual
investment professionals at Wellington Management manage multiple accounts for multiple clients. These accounts may include mutual funds,
separate accounts (assets managed on behalf of institutions, such as pension funds, insurance companies, foundations, or separately managed
account programs sponsored by financial intermediaries), bank common trust accounts, and hedge funds. Each Fund’s managers listed
in the prospectus who are primarily responsible for the day-to-day management of the Funds (“Investment Professionals”)
generally manage accounts in several different investment styles. These accounts may have investment objectives, strategies, time horizons,
tax considerations and risk profiles that differ from those of the Funds. The Investment Professionals make investment decisions for each
account, including the relevant Fund, based on the investment objectives, policies, practices, benchmarks, cash flows, tax and other relevant
investment considerations applicable to that account. Consequently, the Investment Professionals may purchase or sell securities, including
IPOs, for one account and not another account, and the performance of securities purchased for one account may vary from the performance
of securities purchased for other accounts. Alternatively, these accounts may be managed in a similar fashion to the relevant Fund and
thus the accounts may have similar, and in some cases nearly identical, objectives, strategies and/or holdings to that of the relevant
Fund.
The
Investment Professionals or other investment professionals at Wellington Management may place transactions on behalf of other accounts
that are directly or indirectly contrary to investment decisions made on behalf of the relevant Fund, or make investment decisions that
are similar to those made for the relevant Fund, both of which have the potential to adversely impact the relevant Fund depending on market
conditions. For example, an investment professional may purchase a security in one account while appropriately selling that same security
in another account. Similarly, an Investment Professional may purchase the same security for the relevant Fund and one or more other accounts
at or about the same time. In those instances the other accounts will have access to their respective holdings prior to the public disclosure
of the relevant Fund’s holdings. In addition, some of these accounts have fee structures, including performance fees, which are
or have the potential to be higher, in some cases significantly higher, than the fees Wellington Management receives for managing the
Funds. Mr. Fisher also manages accounts which pay performance allocations to Wellington Management or its affiliates. Because incentive
payments paid by Wellington Management to the Investment Professionals are tied to revenues earned by Wellington Management and, where
noted, to the performance achieved by the manager in each account, the incentives associated with any given account may be significantly
higher or lower than those associated with other accounts managed by the given Investment Professional. Finally, the Investment Professionals
may hold shares or investments in the other pooled investment vehicles and/or other accounts identified above.
Wellington
Management’s goal is to meet its fiduciary obligation to treat all clients fairly and provide high quality investment services
to all of its clients. Wellington Management has adopted and implemented policies and procedures,
including brokerage and trade
allocation policies and procedures, which it believes address the conflicts associated with managing multiple accounts for multiple clients.
In addition, Wellington Management monitors a variety of areas, including compliance with primary account guidelines, the allocation of
IPOs, and compliance with Wellington Management’s Code of Ethics, and places additional investment restrictions on investment professionals
who manage hedge funds and certain other accounts. Furthermore, senior investment and business personnel at Wellington Management periodically
review the performance of Wellington Management’s investment professionals. Although Wellington Management does not track the time
an investment professional spends on a single account, Wellington Management does periodically assess whether an investment professional
has adequate time and resources to effectively manage the investment professional’s various client mandates.
Compensation:
Wellington
Management receives a fee based on the assets under management of each Fund as set forth in the Investment Subadvisory Agreements between
Wellington Management and MML Advisers on behalf of each Fund. Wellington Management pays its investment professionals out of its total
revenues, including the advisory fees earned with respect to each Fund. The following information relates to the fiscal year ended September
30, 2021.
Wellington
Management’s compensation structure is designed to attract and retain high-caliber investment professionals necessary to deliver
high quality investment management services to its clients. Wellington Management’s compensation of each Fund’s managers
listed in the prospectus who are primarily responsible for the day-to-day management of the Funds (“Investment Professionals”)
includes a base salary and incentive components. The base salary for each Investment Professional who is a partner (a “Partner”)
of Wellington Management Group LLP, the ultimate holding company of Wellington Management, is generally a fixed amount that is determined
by the managing partners of Wellington Management Group LLP. The base salary for each other Investment Professional is determined by the
Investment Professionals’ experience and performance in their role as an Investment Professional. Base salaries for Wellington
Management’s employees are reviewed annually and may be adjusted based on the recommendation of an Investment Professional’s
manager, using guidelines established by Wellington Management’s Compensation Committee, which has final oversight responsibility
for base salaries of employees of the firm. Each Investment Professional, with the exception of Messrs. Kyller and Simon, is eligible
to receive an incentive payment based on the revenues earned by Wellington Management from the Fund managed by the Investment Professional
and generally each other account managed by such Investment Professional. Each Investment Professional’s incentive payment relating
to the relevant Fund is linked to the gross pre-tax performance of the portion of the Fund managed by the Investment Professional compared
to the benchmark index and/or peer group identified below over one, three, and five year periods, with an emphasis on five year results.
Wellington Management applies similar incentive compensation structures (although the benchmarks or peer groups, time periods and rates
may differ) to other accounts managed by these Investment Professionals, including accounts with performance fees.
Portfolio-based
incentives across all accounts managed by an investment professional can, and typically do, represent a significant portion of an investment
professional’s overall compensation; incentive compensation varies significantly by individual and can vary significantly from
year to year. The Investment Professionals may also be eligible for bonus payments based on their overall contribution to Wellington Management’s
business operations. Senior management at Wellington Management may reward individuals as it deems appropriate based on other factors.
Each Partner is eligible to participate in a Partner-funded tax qualified retirement plan, the contributions to which are made pursuant
to an actuarial formula. Messrs. Fisher and Simon are Partners.
Fund |
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|
Benchmark and/or Peer Group
|
|
International Equity Fund |
|
|
MSCI EAFE Index |
|
MASSMUTUAL
PREMIER FUNDS
1295 STATE STREET
SPRINGFIELD, MASSACHUSETTS 01111-0001
STATEMENT OF
ADDITIONAL INFORMATION
THIS
STATEMENT OF ADDITIONAL INFORMATION (“SAI”) IS NOT A PROSPECTUS. IT SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS OF
MASSMUTUAL PREMIER FUNDS (THE “TRUST”) DATED FEBRUARY 1, 2022, AS AMENDED FROM TIME TO TIME (THE “PROSPECTUS”).
THIS SAI INCORPORATES HEREIN THE FINANCIAL STATEMENTS OF THE FUNDS BY REFERENCE TO THE TRUST’S ANNUAL REPORT AS OF SEPTEMBER 30,
2021 (THE “ANNUAL REPORT”). TO OBTAIN A PROSPECTUS OR AN ANNUAL REPORT, CALL TOLL-FREE 1-888-309-3539, OR WRITE THE TRUST
AT THE ABOVE ADDRESS.
This
SAI relates to the following Funds:
Fund Name
|
|
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Class I
|
|
|
Class R5
|
|
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Service Class
|
|
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Administrative Class
|
|
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Class R4
|
|
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Class A
|
|
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Class R3
|
|
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Class Y
|
|
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Class L
|
|
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Class C
|
|
MassMutual Short-Duration Bond Fund
|
|
|
MSTZX |
|
|
MSTDX |
|
|
MSBYX |
|
|
MSTLX |
|
|
MPSDX |
|
|
MSHAX |
|
|
MSDNX |
|
|
BXDYX |
|
|
BXDLX |
|
|
BXDCX |
|
MassMutual High Yield Fund
|
|
|
MPHZX |
|
|
MPHSX |
|
|
DLHYX |
|
|
MPHLX |
|
|
MPHRX |
|
|
MPHAX |
|
|
MPHNX |
|
|
BXHYX |
|
|
|
|
|
BXHCX |
|
No
dealer, salesman or any other person has been authorized to give any information or to make any representations, other than those contained
in this SAI or in the related Prospectus, in connection with the offer contained herein, and, if given or made, such other information
or representation must not be relied upon as having been authorized by the Trust or ALPS Distributors, Inc. (the “Distributor”).
This SAI and the related Prospectus do not constitute an offer by the Trust or by the Distributor to sell or a solicitation of any offer
to buy any of the securities offered hereby in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction.
Dated
February 1, 2022
TABLE OF CONTENTS
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A-1
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B-1
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C-1
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GENERAL INFORMATION
MassMutual Premier
Funds (the “Trust”) is a professionally managed, open-end investment company. This Statement of Additional Information (“SAI”)
describes the following two diversified series of the Trust: (1) MassMutual Short-Duration Bond Fund (formerly known as MassMutual
Premier Short-Duration Bond Fund) (“Short-Duration Bond Fund”) and (2) MassMutual High Yield Fund (formerly known as
MassMutual Premier High Yield Fund) (“High Yield Fund”) (each individually referred to as a “Fund” or collectively
as the “Funds”). Currently, the Trustees have authorized a total of 14 separate series. Additional series may be created
by the Trustees from time-to-time.
The
Trust is organized under the laws of The Commonwealth of Massachusetts as a Massachusetts business trust pursuant to an Agreement and
Declaration of Trust dated August 1, 1994, as amended and restated as of November 21, 2011, as it may be further amended from
time to time (the “Declaration of Trust”). The investment adviser for each of the Funds is MML Investment Advisers, LLC
(“MML Advisers”). The subadviser for the Short-Duration Bond Fund and High Yield Fund is Barings LLC (“Barings”).
Barings is an indirect subsidiary of Massachusetts Mutual Life Insurance Company (“MassMutual”). In addition, Baring International
Investment Limited (“BIIL”) serves as a sub-subadviser for the Funds. References in this SAI to a Fund’s subadviser
may include any sub-subadvisers as applicable.
ADDITIONAL
INVESTMENT POLICIES
Each Fund has a
distinct investment objective which it pursues through separate investment policies, as described in the Prospectus and below. The fundamental
investment policies and fundamental investment restrictions of a Fund may not be changed without the vote of a majority of that Fund’s
outstanding voting securities (which, under the Investment Company Act of 1940, as amended (the “1940 Act”) and the rules
thereunder and as used in this SAI and in the Prospectus, means the lesser of (l) 67% of the shares of that Fund present at a meeting
if the holders of more than 50% of the outstanding shares of that Fund are present in person or by proxy, or (2) more than 50% of
the outstanding shares of that Fund). The Board of Trustees of the Trust (the “Board”) may adopt new or amend or delete
existing non-fundamental investment policies and restrictions without shareholder approval. There is no guarantee that any Fund will achieve
its investment objective.
Unless otherwise specified,
each Fund may engage in the investment practices and techniques described below to the extent consistent with such Fund’s investment
objective and fundamental investment restrictions. Not all Funds necessarily will utilize all or any of these practices and techniques
at any one time or at all. Investment policies and restrictions described below are non-fundamental and may be changed by the Trustees
without shareholder approval, unless otherwise noted. For a description of the ratings of corporate debt securities and money market instruments
in which the various Funds may invest, reference should be made to Appendix A.
Asset-Based Securities
A Fund may invest
in debt, preferred, or convertible securities, the principal amount, redemption terms, or conversion terms of which are related to the
market price of some natural resource asset such as gold bullion. These securities are referred to as “asset-based securities.”
If an asset-based security is backed by a bank letter of credit or other similar facility, the investment adviser or subadviser may take
such backing into account in determining the creditworthiness of the issuer. While the market prices for an asset-based security and the
related natural resource asset generally are expected to move in the same direction, there may not be perfect correlation in the two price
movements. Asset-based securities may not be secured by a security interest in or claim on the underlying natural resource asset. The
asset-based securities in which a Fund may invest may bear interest or pay preferred dividends at below market (or even relatively nominal)
rates. Certain asset-based securities may be payable at maturity in cash at the stated principal amount or, at the option of the holder,
directly in a stated amount of the asset to which it is related. In such instance, because no Fund presently intends to invest directly
in natural resource assets, a Fund would sell the asset-based security in the secondary market, to the extent one exists, prior to maturity
if the value of the stated amount of the asset exceeds the stated principal amount and thereby realize the appreciation in the underlying
asset. Certain restrictions imposed on the Funds by the Internal Revenue Code of 1986, as amended (the “Code”), may limit
the Funds’ ability to invest in certain natural resource-based securities.
Precious
Metal-Related Securities. A Fund may invest in the equity securities of companies that explore
for, extract, process, or deal in precious metals (e.g., gold, silver, and platinum), and in asset-based securities indexed to the value
of such metals. Such securities may be purchased when they are believed to be attractively priced in relation to the value of a company’s
precious metal-related assets or when the values of precious metals are expected to benefit from inflationary pressure or other economic,
political, or financial uncertainty or instability. Based on historical experience, during periods of economic or financial instability
the securities of companies involved in precious metals may be subject to extreme price fluctuations, reflecting the high volatility of
precious metal prices during such periods. In addition, the instability of precious metal prices may result in volatile earnings of precious
metal-related companies, which may, in turn, adversely affect the financial condition of such companies.
The major producers
of gold include the Republic of South Africa, Russia, Canada, the United States, Brazil, and Australia. Sales of gold by Russia are largely
unpredictable and often relate to political and economic considerations rather than to market forces. Economic, financial, social, and
political factors within South Africa may significantly affect South African gold production.
Bank Capital Securities
A Fund may invest in
bank capital securities. Bank capital securities are issued by banks to help fulfill their regulatory capital requirements. Many bank
capital securities are commonly thought of as hybrids of debt and preferred stock. Some bank capital securities are perpetual (with no
maturity date), callable, and have a cumulative interest deferral feature. This means that under certain conditions, the issuer bank can
withhold payment of interest until a later date, likely increasing the credit and interest rate risks of an investment in those securities.
Investments in bank capital securities are subject to the risks of other debt investments, such as default and non-payment, as well as
certain other risks, such as the risk that bank regulators may force the bank to dissolve, merge, restructure its capitalization, or take
other actions intended to prevent its failure or ensure its orderly resolution. Bank regulators in certain jurisdictions have broad authorities
they may use to prevent the failure of banking institutions or to stabilize the banking industry, all of which may adversely affect the
values of investments in bank capital securities and other bank obligations, including those of other banks.
Bank Loans
A Fund may invest in
bank loans including, for example, corporate loans, loan participations, direct debt, bank debt, and bridge debt. A Fund may invest in
a loan by lending money to a borrower directly as part of a syndicate of lenders. In a syndicated loan, the agent that originated and
structured the loan typically administers and enforces the loan on behalf of the syndicate. In such cases, the agent is normally responsible
for the collection of principal and interest payments from the borrower and the apportionment of these payments to the credit of all institutions
that are parties to the loan agreement. A Fund will generally rely on the agent to receive and forward to the Fund its portion of the
principal and interest payments on the loan. Failure by the agent to fulfill its obligations may delay or adversely affect receipt of
payment by a Fund.
A Fund may invest in
loans through novations, assignments, and participation interests. In a novation, a Fund typically assumes all of the rights of a lending
institution in a loan, including the right to receive payments of principal and interest and other amounts directly from the borrower
and to enforce its rights as a lender directly against the borrower. When a Fund takes an assignment of a loan, the Fund acquires some
or all of the interest of another lender (or assignee) in the loan. In such cases, the Fund may be required generally to rely upon the
assignor to demand payment and enforce rights under the loan. (There may be one or more assignors prior in time to the Fund.) If a Fund
acquires a participation in the loan made by a third party loan investor, the Fund typically will have a contractual relationship only
with the loan investor, not with the borrower. As a result, a Fund may have the right to receive payments of principal, interest, and
any fees to which it is entitled only from the loan investor selling the participation and only upon receipt by such loan investor of
such payments from the borrower. In connection with participations, a Fund generally will have no right to enforce compliance by the borrower
with the terms of the loan agreement, nor any rights with respect to any funds acquired by other loan investors through set-off against
the borrower, and the Fund may not directly benefit from the collateral supporting the loan
in which it has purchased the participation. As a result,
a Fund assumes the credit risk of both the borrower and the loan investor selling the participation. In the event of the insolvency of
the loan investor selling a participation, a Fund may be treated as a general creditor of such loan investor. In addition, because loan
participations are not generally rated by independent credit rating agencies, a decision by a Fund to invest in a particular loan participation
will depend almost exclusively on its investment adviser’s or subadviser’s credit analysis of the borrower.
Loans in which a Fund
may invest are subject generally to the same risks as debt securities in which the Fund may invest. In addition, loans in which a Fund
may invest, including bridge loans, are generally made to finance internal growth, mergers, acquisitions, stock repurchases, leveraged
buy-outs, and other corporate activities, including bridge loans. A significant portion of the loans purchased by a Fund may represent
interests in loans made to finance highly leveraged corporate acquisitions, known as “leveraged buy-out” transactions, leveraged
recapitalization loans, and other types of acquisition financing. The highly leveraged capital structure of the borrowers in such transactions
may make such loans especially vulnerable to adverse changes in economic or market conditions.
Loans generally are
subject to restrictions on transfer, and only limited opportunities may exist to sell loans in secondary markets. In some cases, negotiations
involved in disposing of indebtedness may require weeks to complete. As a result, a Fund may be unable to sell loans at a time when it
may otherwise be desirable to do so or may be able to sell them only at a price that is less than their fair market value. The settlement
time for certain loans is longer than the settlement time for many other types of investments, and a Fund may not receive the payment
for a loan sold by it until well after the sale; that cash would be unavailable for payment of redemption proceeds or for reinvestment.
Certain of the loans
acquired by a Fund may involve revolving credit facilities under which a borrower may from time to time borrow and repay amounts up to
the maximum amount of the facility. In such cases, the Fund would have an obligation to advance its portion of such additional borrowings
upon the terms specified in the loan participation. A Fund may be required to fund such advances at times and in circumstances where the
Fund might not otherwise choose to make a loan to the borrower.
The value of collateral,
if any, securing a loan can decline, or may be insufficient to meet the borrower’s obligations or difficult to liquidate, or a
Fund may be prevented or delayed from realizing the collateral. In addition, a Fund’s access to collateral may be limited by bankruptcy
or other insolvency laws. If a secured loan is foreclosed, a Fund could become part owner of any collateral, and would bear the costs
and liabilities associated with owning and disposing of the collateral. A bankruptcy or restructuring can result in the loan being converted
to an equity ownership interest in the borrower. In addition, under legal theories of lender liability, a Fund potentially might be held
liable as a co-lender.
Loans may not be considered
“securities,” and a Fund that purchases a loan may not be entitled to rely on anti-fraud and other protections under the
federal securities laws.
Below Investment Grade
Debt Securities
A Fund may purchase
below investment grade debt securities, sometimes referred to as “junk” or “high yield” bonds. The lower ratings
of certain securities held by a Fund reflect a greater possibility that adverse changes in the financial condition of the issuer, or in
general economic conditions, or both, or an unanticipated rise in interest rates, may impair the ability of the issuer to make payments
of interest and principal. The inability (or perceived inability) of issuers to make timely payment of interest and principal would likely
make the values of securities held by the Fund more volatile and could limit the Fund’s ability to sell its securities at prices
approximating the values a Fund had placed on such securities. In the absence of a liquid trading market for securities held by it, the
Fund may be unable at times to establish the fair market value of such securities. The rating assigned to a security by S&P Global
Ratings (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”) does not reflect an assessment
of the volatility of the security’s market value or of the liquidity of an investment in the security. (The term “below
investment grade debt securities” includes securities that are not rated but are considered by a Fund’s investment adviser
or subadviser to be of comparable quality to other below investment grade debt securities.)
Like those of other fixed income securities,
the values of below investment grade debt securities fluctuate in response to changes in interest rates. Thus, a decrease in interest
rates generally will result in an increase in the value of a Fund’s fixed income securities. Conversely, during periods of rising
interest rates, the value of a Fund’s fixed income securities generally will decline. In addition, the values of such securities
are also affected by changes in general economic conditions and business conditions, which are more likely to lead to a weakened capacity
to make principal and interest payments than in the case of higher grade securities. Changes by recognized rating services in their ratings
of any fixed income security and in the ability of an issuer to make payments of interest and principal may also affect the value of these
investments. Changes in the values of portfolio securities generally will not affect cash income derived from such securities, but will
affect the Fund’s net asset value (“NAV”).
Issuers of below investment
grade debt securities are often highly leveraged, so their ability to service their debt obligations during an economic downturn or during
sustained periods of rising interest rates may be impaired. In the past, economic downturns or increases in interest rates have, under
certain circumstances, resulted in a higher incidence of default by the issuers of these instruments and are likely to do so in the future,
especially in the case of highly leveraged issuers. In addition, such issuers may not have more traditional methods of financing available
to them, and may be unable to repay debt at maturity by refinancing. The risk of loss due to default in payment of interest or principal
by such issuers is significantly greater because such securities frequently are unsecured and subordinated to the prior payment of senior
indebtedness. Certain of the below investment grade debt securities in which a Fund may invest are issued to raise funds in connection
with the acquisition of a company, in so-called “leveraged buy-out” transactions. The highly leveraged capital structure
of such issuers may make them especially vulnerable to adverse changes in economic conditions.
Under adverse market
or economic conditions or in the event of adverse changes in the financial condition of the issuer, a Fund could find it more difficult
to sell below investment grade debt securities when the Fund’s investment adviser or subadviser believes it advisable to do so
or may be able to sell such securities only at prices lower than might otherwise be available. Consolidation in the financial services
industry has resulted in there being fewer market makers for high yield bonds, which may result in further risk of illiquidity and volatility
with respect to high yield bonds held by a Fund, and this trend may continue in the future. Furthermore, high yield bonds held by a Fund
may not be registered under the Securities Act of 1933, as amended (the “1933 Act”), and, unless so registered, a Fund will
not be able to sell such high yield bonds except pursuant to an exemption from registration under the 1933 Act. This may further limit
the Fund’s ability to sell high yield debt securities or to obtain the desired price for such securities. In many cases, below
investment grade debt securities may be purchased in private placements and, accordingly, will be subject to restrictions on resale as
a matter of contract or under securities laws. Under such circumstances, it may also be more difficult to determine the fair values of
such securities for purposes of computing a Fund’s NAV. In order to enforce its rights in the event of a default by an issuer of
below investment grade debt securities, a Fund may be required to take possession of and manage assets securing the issuer’s obligations
on such securities, which may increase the Fund’s operating expenses and adversely affect the Fund’s NAV. A Fund may also
be limited in its ability to enforce its rights and may incur greater costs in enforcing its rights in the event an issuer becomes the
subject of bankruptcy proceedings. In addition, the Funds’ intention or ability to qualify as “regulated investment companies”
under the Code may limit the extent to which a Fund may exercise its rights by taking possession of such assets.
Certain securities
held by a Fund may permit the issuer at its option to “call,” or redeem, its securities. If an issuer were to redeem securities
held by a Fund during a time of declining interest rates, the Fund may not be able to reinvest the proceeds in securities providing the
same investment return as the securities redeemed.
The prices for below
investment grade debt securities may be affected by legislative and regulatory developments. Below investment grade debt securities may
also be subject to certain risks not typically associated with “investment grade” securities, such as the following: (i) reliable
and objective information about the value of below investment grade debt securities may be difficult to obtain because the market for
such securities may be thinner and less active than that for investment grade obligations; (ii) adverse publicity and investor perceptions,
whether or not based on fundamental analysis, may decrease the values
and liquidity of lower than investment grade obligations,
and, in turn, adversely affect their market; (iii) companies that issue below investment grade debt securities may be in the growth
stage of their development, or may be financially troubled or highly leveraged, so they may not have more traditional methods of financing
available to them; (iv) when other institutional investors dispose of their holdings of below investment grade debt securities, the
general market and the prices for such securities could be adversely affected; and (v) the market for below investment grade debt
securities could be impaired if legislative proposals to limit their use in connection with corporate reorganizations or to limit their
tax and other advantages are enacted.
Borrowings
A
Fund is required at all times to maintain its assets at a level at least three times the amount of all of its borrowings (the “300%
asset coverage test”). Borrowings for this purpose include obligations under any futures contract on a debt obligation. The Securities
and Exchange Commission (“SEC”) has taken the position that certain transactions, such as entering into reverse repurchase
agreements, engaging in dollar roll transactions, selling securities short (other than short sales “against-the-box”), buying
and selling certain derivatives (such as futures contracts), and selling (or writing) put and call options, and other trading practices
that have a leveraging effect on the capital structure of a fund or are economically equivalent to borrowing can be viewed as borrowing
by the fund for purposes of the 1940 Act. Subject to changes that will apply once the Funds come into compliance with Rule 18f-4
of the 1940 Act, a borrowing transaction (including, without limitation, a reverse repurchase agreement transaction) will not be considered
to constitute the issuance of a “senior security” by a fund, and therefore such transaction will not be subject to the 300%
asset coverage requirement otherwise applicable to borrowings by a fund, if the fund (1) maintains an offsetting financial position;
(2) segregates liquid assets equal (as determined on a daily mark-to-market basis) in value to the fund’s potential economic
exposure under the borrowing transaction; or (3) otherwise “covers” the transaction in accordance with SEC guidance.
Any borrowings that come to exceed the 300% asset coverage requirement will be reduced within three days (not including Sundays and holidays)
to the extent necessary to comply with this requirement.
Cash and Short-Term
Debt Securities
Money
Market Instruments Generally. The Funds may invest in money market securities, including money
market funds. Money market securities are high-quality, short-term debt instruments that may be issued by the U.S. Government, corporations,
banks, or other entities. They may have fixed, variable, or floating interest rates. Some money market securities in which the Funds may
invest are described below. During the 2008 global financial downturn and the recent market volatility caused by the coronavirus outbreak,
many money market instruments that were thought to be highly liquid became illiquid and lost value. The U.S. Government and the Federal
Reserve System, as well as certain foreign governments and central banks, have taken extraordinary actions with respect to the financial
markets generally and money market instruments in particular. While these actions have stabilized the markets for these instruments, there
can be no assurances that those actions will continue or continue to be effective. If a Fund’s money market instruments become
illiquid, the Fund may be unable to satisfy certain of its obligations or may only be able to do so by selling other securities at prices
or times that may be disadvantageous to do so.
Bank
Obligations. The Funds may invest in bank obligations, including certificates of deposit, time
deposits, bankers’ acceptances, and other short-term obligations of domestic banks, foreign subsidiaries of domestic banks, foreign
branches of domestic banks, and domestic and foreign branches of foreign banks, domestic savings and loan associations, and other banking
institutions.
Certificates of deposit
(“CDs”) are negotiable certificates evidencing the obligations of a bank to repay funds deposited with it for a specified
period of time. Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated
interest rate. Time deposits which may be held by the Funds will not benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance Corporation. Bankers’ acceptances are credit instruments
evidencing the obligation of a bank to pay a draft drawn on it by a customer. These instruments reflect the obligation both of the bank
and the drawer to pay the face amount of the instrument upon maturity. The other short-term obligations may include uninsured, direct
obligations, bearing fixed, floating, or variable interest rates.
The Funds may invest in certificates
of deposit and bankers’ acceptances of U.S. banks and savings and loan associations, London branches of U.S. banks, and U.S. branches
of foreign banks. Obligations of foreign banks and of foreign branches of U.S. banks may be affected by foreign governmental action, including
imposition of currency controls, interest limitations, withholding or other taxes, seizure of assets, or the declaration of a moratorium
or restriction on payments of principal or interest. Foreign banks and foreign branches of U.S. banks may provide less public information
than, and may not be subject to the same accounting, auditing, and financial recordkeeping standards as, domestic banks.
Cash,
Short-Term Instruments, and Temporary Investments. The Funds may hold a significant portion
of their assets in cash or cash equivalents at the sole discretion of the Fund’s investment adviser or subadviser. The Funds’
investment adviser or subadvisers will determine the amount of the Funds’ assets to be held in cash or cash equivalents at their
sole discretion, based on such factors as they may consider appropriate under the circumstances. The Funds may hold a portion of their
assets in cash, for example, in order to provide for expenses or anticipated redemption payments or for temporary defensive purposes.
The Funds may also hold a portion of their assets in cash as part of the Funds’ investment programs or asset allocation strategies,
in amounts considered appropriate by the Funds’ investment adviser or subadvisers. To the extent the Funds hold assets in cash
and otherwise uninvested, its investment returns may be adversely affected and the Funds may not achieve their respective investment objectives.
The Funds may invest in high quality money market instruments. The instruments in which the Funds may invest include, without limitation:
(i) short-term obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities (including government-sponsored
enterprises); (ii) CDs, bankers’ acceptances, fixed time deposits, and other obligations of domestic banks (including foreign
branches); (iii) non-convertible corporate debt securities (e.g., bonds and debentures) with remaining maturities at the date of
purchase of not more than one year; (iv) repurchase agreements; and (v) short-term obligations of foreign banks (including U.S.
branches).
Commercial
Paper and Short-Term Corporate Debt Instruments. The Funds may invest in commercial paper (including
variable amount master demand notes) consisting of short-term, unsecured promissory notes issued by corporations to finance short-term
credit needs. Commercial paper is usually sold on a discount basis and, other than asset-backed commercial paper, usually has a maturity
at the time of issuance not exceeding nine months. Variable amount master demand notes are demand obligations that permit the investment
of fluctuating amounts at varying market rates of interest pursuant to arrangements between the issuer and a commercial bank acting as
agent for the payee of such notes whereby both parties have the right to vary the amount of the outstanding indebtedness on the notes.
The investment adviser or subadvisers monitor on an ongoing basis the ability of an issuer of a demand instrument to pay principal and
interest on demand. The Funds also may invest in non-convertible corporate debt securities (e.g., bonds and debentures) with not more
than one year remaining to maturity at the date of settlement.
Letters
of Credit. Certain of the debt obligations (including municipal securities, certificates of
participation, commercial paper, and other short-term obligations) which the Funds may purchase may be backed by an unconditional and
irrevocable letter of credit of a bank, savings and loan association, or insurance company which assumes the obligation for payment of
principal and interest in the event of default by the issuer.
Commodities
A Fund may invest directly
or indirectly in commodities (such as precious metals or natural gas). Commodity prices can be more volatile than prices of other types
of investments and can be affected by a wide range of factors, including changes in overall market movements, speculative investors, real
or perceived inflationary trends, commodity index volatility, changes in interest rates or currency exchange rates, population growth
and changing demographics, nationalization, expropriation, or other confiscation, changes in the costs of discovering, developing, refining,
transporting, and storing commodities, the success of commodity exploration projects, temporary or long-term price dislocations and inefficiencies
in commodity markets generally or in the market for a particular commodity, international or local regulatory, political, and economic
developments (for example, regime changes and changes in economic activity levels), and developments affecting a particular region, industry,
or commodity, such as drought, floods, or other weather conditions, livestock disease, epidemics, trade embargoes, energy conservation,
competition
from substitute products, transportation bottlenecks
or shortages, fluctuations in supply and demand, and tariffs. Exposure to commodities can cause the NAV of a Fund’s shares to decline
or fluctuate in a rapid and unpredictable manner. Commodity prices may be more or less volatile than securities of companies engaged in
commodity-related businesses. Investments in commodity-related companies are subject to the risk that the performance of such companies
may not correlate with the broader equity market or with returns on commodity investments to the extent expected by the investment adviser
or subadviser. Such companies may be significantly affected by import controls, worldwide competition, changes in consumer sentiment,
and spending, and can be subject to liability for, among other things, environmental damage, depletion of resources, and mandated expenditures
for safety and pollution control. A liquid secondary market may not exist for certain commodity investments, which may make it difficult
for the Fund to sell them at a desirable price or at the price at which it is carrying them.
A Fund may also directly
or indirectly use commodity-related derivatives. The values of these derivatives may fluctuate more than the relevant underlying commodity
or commodities or commodity index. A Fund’s investments in commodities or commodity-related derivatives can be limited by the Fund’s
intention to qualify as a regulated investment company for federal income tax purposes, and can bear on the Fund’s ability to qualify
as such.
Common and Preferred
Stocks
Stocks represent shares
of ownership in a company. Generally, preferred stock has a specified dividend and ranks after bonds and before common stocks in its claim
on income for dividend payments and on assets should the company be liquidated. After other claims are satisfied, common stockholders
participate in company profits on a pro-rata basis. Profits may be paid out in dividends or reinvested in the company to help it grow.
Increases and decreases in earnings are usually reflected in a company’s stock price, so common stocks generally have the greatest
appreciation and depreciation potential of all corporate securities. Like other equity securities, preferred stock is subject to the risk
that its value may decrease based on actual or perceived changes in the business or financial condition of the issuer. In addition, changes
in interest rates may adversely affect the value of a preferred stock that pays a fixed dividend.
Concentration Policy
For purposes of each
Fund’s concentration limitation as disclosed in this SAI, the Funds apply such policy to direct investments in the securities of
issuers in a particular industry, as determined by a Fund’s investment adviser or subadviser. A Fund’s investment adviser
or subadviser may analyze the characteristics of a particular issuer and security and assign an industry or sector classification consistent
with those characteristics in the event that the third party classification provider used by the investment adviser or subadviser does
not assign a classification or the investment adviser or subadviser, in consultation with the Fund’s Chief Compliance Officer,
determines that another industry or sector classification is more appropriate.
Convertible Securities
The Funds may invest
in debt or preferred equity securities convertible into, or exchangeable for, common stock at a stated price or rate. Traditionally, convertible
securities have paid dividends or interest at rates higher than common stocks but lower than nonconvertible securities. They generally
participate in the appreciation or depreciation of the underlying stock into which they are convertible, but to a lesser degree. In recent years,
convertibles have been developed which combine higher or lower current income with options and other features. Convertible securities
are subject to the risks of debt and equity securities.
Cyber Security and
Technology
With the increased
use of technologies such as the Internet and the dependence on computer systems to perform business and operational functions, investment
companies (such as the Funds) and their service providers (such as the Funds’ investment adviser, subadvisers, custodian, and transfer
agent) may be prone to operational and information security risks resulting from cyber-attacks and/or technological malfunctions. In general,
cyber-attacks are deliberate, but unintentional events may have similar effects. Cyber-attacks include, among others, stealing or corrupting
data maintained online or digitally, preventing
legitimate users from accessing information or services
on a website, releasing confidential information without authorization, and causing operational disruption. Successful cyber-attacks against,
or security breakdowns of, a Fund, the investment adviser, subadviser, custodian, transfer agent, or service provider may adversely affect
the Fund or its shareholders. For instance, cyber-attacks may interfere with the processing of shareholder transactions, affect a Fund’s
ability to calculate its NAV, cause the release of private shareholder information or confidential Fund information, impede trading, cause
reputational damage, and subject the Fund to regulatory fines, penalties or financial losses, reimbursement or other compensation costs,
and additional compliance costs. Cyber-attacks may render records of Fund assets and transactions, shareholder ownership of Fund shares,
and other data integral to the functioning of the Fund inaccessible or inaccurate or incomplete. A Fund may also incur substantial costs
for cyber security risk management in order to prevent cyber incidents in the future. A Fund and its shareholders could be negatively
impacted as a result. There are inherent limitations in business continuity plans and systems designed to minimize the risk of cyberattacks
through the use of technology, processes, and controls, including the possibility that certain risks have not been identified given the
evolving nature of this threat. The Funds rely on third-party service providers for many of their day-to-day operations, and will be subject
to the risk that the protections and protocols implemented by those service providers will be ineffective to protect the Funds from cyber-attack.
The Funds’ investment adviser does not control the cyber security plans and technology systems put in place by third-party service
providers, and such third-party service providers may have limited indemnification obligations to the Funds’ investment adviser
or the Funds, each of whom could be negatively impacted as a result. Similar types of cyber security risks also are present for issuers
of securities in which the Funds invest, which could result in material adverse consequences for such issuers, and may cause a Fund’s
investment in such securities to lose value.
Debtor-in-Possession
Financings
The Funds may invest
in debtor-in-possession financings (commonly known as “DIP financings”) through participation interests in direct loans,
purchase of assignments, and other means. DIP financings are arranged when an entity seeks the protections of the bankruptcy court under
Chapter 11 of the U.S. Bankruptcy Code (“Chapter 11”). These financings allow the entity to continue its business operations
while reorganizing under Chapter 11. Such financings constitute senior liens on an unencumbered security (i.e., a security not subject
to other creditors’ claims). DIP financings are generally subject to the same risks as investments in senior bank loans and similar
debt instruments, but involve a greater risk of loss of principal and interest. For example, there is a risk that the entity will not
emerge from Chapter 11 and be forced to liquidate its assets under Chapter 7 of the U.S. Bankruptcy Code, as well as a risk that the bankruptcy
court will not approve a proposed reorganization plan or will require substantial and unfavorable changes to an initial plan. In the event
of liquidation, a Fund’s only recourse will be against the property securing the DIP financing. Companies in bankruptcy may also
be undergoing significant financial and operational changes that may cause their financial performance to have elevated levels of volatility.
DIP financings may involve payment-in-kind interest or principal interest payments, and a Fund may receive securities of a reorganized
issuer (e.g., common stock, preferred stock, warrants) in return for its investment, which may include illiquid investments and investments
that are difficult to value.
Derivatives
General.
Derivatives are financial instruments whose values are based on the values of one or more underlying indicators, such as a security, asset,
currency, interest rate, or index. Derivative transactions can create investment leverage and may be highly volatile. Losses from derivatives
can be substantially greater than the derivatives’ original cost and can sometimes be unlimited. A Fund may not be able to close
out a derivative transaction at a favorable time or price.
A
Fund’s use of derivative instruments involves risks different from, and possibly greater than, the risks associated with investing
directly in securities and other more traditional investments. Derivative products can be highly specialized instruments that may require
investment techniques and risk analyses different from those associated with investing directly in securities and other more traditional
investments. Derivatives are subject to a number of risks, such as potential changes in value in response to interest rate changes or
other market developments or as a result of the counterparty’s credit quality and the risk that a derivative transaction may not
have the effect or benefit a Fund’s investment adviser or subadviser
anticipated. Derivatives also involve the risk of mispricing
or improper valuation and the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate,
or index. When a Fund invests in a derivative instrument, it could lose more than the principal amount invested. Also, suitable derivative
transactions may not be available in all circumstances, and there can be no assurance that a Fund will engage in these transactions to
reduce exposure to other risks when that would be beneficial. Many derivative transactions are entered into “over the counter”
(not on an exchange or contract market); as a result, the value of such a derivative transaction will depend on the ability and
the willingness of the Fund’s counterparty to perform its obligations under the transaction. A Fund may be required to segregate
certain of its assets on the books of its custodian with respect to derivatives transactions entered into by the Fund. A liquid secondary
market may not always exist for a Fund’s derivative positions at any time. Use of derivatives may affect the amount, timing, and
character of distributions to shareholders. Although the use of derivatives is intended to enhance a Fund’s performance, it may
instead reduce returns and increase volatility.
A Fund may be subject
to the credit risk of its counterparty to derivative transactions (including repurchase and reverse repurchase agreements) and to the
counterparty’s ability or willingness to perform in accordance with the terms of the transaction. A Fund may be negatively impacted
if a counterparty becomes bankrupt or otherwise fails to perform its obligations under such a transaction. A Fund may experience significant
delays in obtaining any recovery in a bankruptcy or other reorganization proceeding and a Fund may obtain only limited recovery or may
obtain no recovery in such circumstances. In the event of a counterparty’s (or its affiliate’s) insolvency, the possibility
exists that a Fund’s ability to exercise remedies, such as the termination of transactions, netting of obligations, and realization
on collateral, could be stayed or eliminated under special resolution regimes adopted in the United States, the European Union, and various
other jurisdictions. Such regimes provide government authorities with broad authority to intervene when a financial institution is experiencing
financial difficulty. In particular, the regulatory authorities could reduce, eliminate, or convert to equity the liabilities to a Fund
of a counterparty who is subject to such proceedings in the European Union (sometimes referred to as a “bail in”).
A Fund may enter into
cleared derivatives transactions and/or exchange-traded futures contracts. When a Fund enters into a cleared derivative transaction and/or
an exchange-traded futures contract, it is subject to the credit risk of the clearinghouse and the clearing member through which it holds
its position. The clearing member or the clearinghouse could also fail to perform its obligations, causing losses to the Fund. Credit
risk of market participants with respect to derivatives that are centrally cleared is concentrated in a few clearinghouses and clearing
members. Under current Commodity Futures Trading Commission (“CFTC”) regulations, a clearing member is required to maintain
customers’ assets in omnibus accounts for all of its customers segregated from the clearing member’s proprietary assets.
If, for example, a clearing member fails to segregate customer assets, is unable to satisfy a substantial deficit in a customer account,
or in the event of fraud or misappropriation of customer assets by a clearing member, clearing member customers may be subject to risk
of loss of their funds in the event of that clearing member’s bankruptcy. A Fund might not be fully protected in the event of the
bankruptcy of a Fund’s clearing member because the Fund would be limited to recovering only a pro rata share of the funds
held by the clearing member on behalf of customers. It is not entirely clear how an insolvency proceeding of a clearinghouse, or the clearing
member through which the Fund holds its positions at a clearinghouse, would be conducted, what effect the insolvency proceeding would
have on any recovery by a Fund, and what impact an insolvency of a clearinghouse or clearing member would have on the financial system
more generally.
U.S. and non-U.S. legislative
and governmental authorities, various exchanges, and regulatory and self-regulatory authorities have undertaken reviews of derivatives
trading in recent periods. Among the actions that have been taken or proposed to be taken are new position limits and reporting requirements,
new or more stringent daily price fluctuation limits for futures and options transactions, new or increased margin and reserve requirements
for various types of derivatives transactions, and mandatory clearing, trading, and reporting requirements for many derivatives. Additional
measures are under active consideration and as a result there may be further actions that adversely affect the regulation of instruments
in which the Funds invest. Such legislative and regulatory measures may reduce the availability of some types of derivative instruments,
may increase the cost of trading in or maintaining other instruments or positions, and may cause uncertainty in the markets for a variety
of derivative instruments. It is also
possible that these or similar measures
could potentially limit or completely restrict the ability of a Fund to use these instruments as a part of its investment strategy. For
example, the SEC recently finalized new Rule 18f-4 under the 1940 Act providing for the regulation of registered investment companies’
use of derivatives and certain related instruments. Compliance with Rule 18f-4 will not be required until approximately August 2022.
The ultimate impact, if any, of the regulation remains unclear, but the new rule, among other things, limits derivatives exposure through
one of two value-at-risk tests and eliminates the asset segregation framework for covering derivatives and certain financial instruments
arising from the SEC’s Release 10666 and ensuing staff guidance. Limited derivatives users (as determined by Rule 18f-4),
however, are not subject to the full requirements under the rule. As the Funds come into compliance, the approach to asset segregation
and coverage requirements described in this SAI will be impacted. Legislative and regulatory measures like this and others are evolving
and still being implemented and their effects on derivatives market activities cannot be reliably predicted.
The
CFTC and domestic exchanges have established speculative position limits, referred to as “position limits,” on the maximum
speculative positions which any person, or group of persons acting in concert, may hold or control in particular futures and options on
futures contracts. All positions owned or controlled by the same person or entity, even if in different accounts, must be aggregated for
purposes of determining whether the applicable position limits have been exceeded. Thus, even if a Fund does not intend to exceed applicable
position limits, it is possible that different clients managed by the investment adviser or subadviser may be aggregated for this purpose.
Any modification of trading decisions or elimination of open positions that may be required to avoid exceeding such limits may adversely
affect the performance of a Fund. In addition, the CFTC recently adopted rules that, once effective, will materially expand the scope
of contracts subject to federal limits to include additional futures and options on futures and certain swaps. Such regulations may adversely
affect a Fund’s ability to hold positions in certain futures contracts and related options and swaps.
No Fund has the obligation
to enter into derivatives transactions at any time or under any circumstances. In addition, nothing in this SAI is intended to limit in
any way any purpose for which a Fund may enter into any type of derivatives transaction; a Fund may use derivatives transactions for hedging
purposes or generally for purposes of enhancing its investment return.
Foreign
Currency Exchange Transactions
A Fund may enter into
foreign currency exchange transactions for hedging purposes in order to protect against uncertainty in the level of future foreign currency
exchange rates, or for other, non-hedging purposes—for example, a Fund may take a long or short position with respect to a foreign
currency in which none of the Fund’s assets or liabilities are denominated, or where the position is in excess of the amount of
any such assets or liabilities, in order to take advantage of anticipated changes in the relative values of those currencies. There can
be no assurance that appropriate foreign currency transactions will be available for a Fund at any time or that a Fund will enter into
such transactions at any time or under any circumstances even if appropriate transactions are available to it. A Fund may purchase or
sell a foreign currency on a spot (i.e.,
cash) basis at the prevailing spot rate. A Fund may also enter into contracts to deliver in the future an amount of one currency in return
for an amount of another currency (“forward contracts”) and may purchase and sell foreign currency futures contracts. (Foreign
currency futures contracts are similar to financial futures contracts, except that they typically contemplate the delivery of foreign
currencies; see “Financial Futures Contracts,” below.) A Fund may also purchase or sell options on foreign currencies or
options on foreign currency futures contracts.
A Fund may enter into
foreign currency exchange transactions in order to hedge against a change in the values of assets or liabilities denominated in one or
more foreign currencies due to changes in currency exchange rates.
A Fund may also enter
into foreign currency transactions to adjust generally the exposure of its portfolio to various foreign currencies. For example, a Fund
with a large exposure to securities denominated in euros might want to continue to hold those securities, but to trade its exposure to
the euro to exposure to, say, the Japanese Yen. In that case, the Fund might take a short position in the euro and a long position in
the Yen. A Fund may also use foreign currency transactions to hedge the value of the Fund’s portfolio against the Fund’s
benchmark index.
The value of any currency, including
U.S. dollars and foreign currencies, may be affected by complex political and economic factors applicable to the issuing country. In addition,
the exchange rates of foreign currencies (and therefore the values of foreign currency options, forward contracts, and futures contracts)
may be affected significantly, fixed, or supported directly or indirectly by U.S. and foreign government actions. Government intervention
may increase risks involved in purchasing or selling foreign currency options, forward contracts, and futures contracts, since exchange
rates may not be free to fluctuate in response to other market forces. Foreign governmental restrictions or taxes could result in adverse
changes in the cost of acquiring or disposing of foreign currencies.
Because foreign currency
transactions occurring in the interbank market involve substantially larger amounts than those that may be involved in the use of foreign
currency options, investors may be disadvantaged by having to deal in an odd lot market (generally consisting of transactions of less
than $1 million) for the underlying foreign currencies at prices that are less favorable than for round lots.
There is no systematic
reporting of last-sale information for foreign currencies and there is no regulatory requirement that quotations available through dealers
or other market sources be firm or revised on a timely basis. Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively smaller transactions (less than $1 million) where rates
may be less favorable. The interbank market in foreign currencies is a global, around-the-clock market.
Currency
Forward and Futures Contracts. A foreign currency forward contract involves an obligation to
deliver in the future, which may be any fixed number of days from the date of the contract as agreed by the parties, an amount of one
currency in return for an amount of another currency, at an exchange rate set at the time of the contract. The contracts are traded in
the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. A foreign currency
futures contract is a standardized contract for the future delivery of a specified amount of a foreign currency at a future date at an
exchange rate set at the time of the contract. Foreign currency futures contracts traded in the United States are designed by and traded
on exchanges regulated by the CFTC, such as the Chicago Mercantile Exchange. Foreign currency futures contracts will typically require
a Fund to post both initial margin and variation margin.
Foreign currency forward
contracts differ from foreign currency futures contracts in certain respects. For example, the maturity date of a forward contract may
be any fixed number of days from the date of the contract agreed upon by the parties, rather than a predetermined date in a given month.
Forward contracts may be in any amounts agreed upon by the parties rather than predetermined amounts. Also, forward foreign exchange contracts
are traded directly between counterparties, exposing a Fund to credit risk with respect to its counterparty, whereas foreign currency
futures contracts are traded on regulated exchanges. Because foreign currency forward contracts are private transactions between a Fund
and its counterparty, any benefit of such contracts to the Fund will depend upon the willingness and ability of the counterparty to perform
its obligations. In the case of a futures contract, a Fund is subject to the credit risk of the clearinghouse and the clearing member
through which it holds its position as well as the risk that the clearing member or the clearinghouse could also fail to perform its obligations.
At
the maturity of a forward or futures contract, a Fund will make delivery of the currency or currencies specified in the contract in return
for the other currency or currencies specified in the contract (or, if the contract is a non-deliverable or cash-settled contract, settle
the contract on a net basis) or, at or prior to maturity, enter into a closing transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts are usually effected with the currency trader who is a party to the original
forward contract. Closing transactions with respect to futures contracts are effected on a commodities exchange and a clearinghouse associated
with the exchange assumes responsibility for closing out such contracts.
Positions
in foreign currency futures contracts and related options may be closed out only on an exchange or board of trade which provides a market
in such contracts or options. Although a Fund will normally purchase or sell foreign currency futures contracts and related options only
on exchanges or boards of trade where there appears to be an active market, there is no assurance that an active market on an exchange
or board of trade will exist for any particular contract or option or at any particular time. In such event, it may not be possible to
close a futures or related option position and, in the event of adverse
price movements, a Fund would continue to be required
to make daily cash payments of variation margin on its futures positions. A Fund’s ability to close out a foreign currency forward
contract will depend on the willingness of its counterparty to engage in an offsetting transaction.
Foreign
Currency Options. Options on foreign currencies operate similarly to options on securities,
and are traded primarily in the over-the-counter (“OTC”) market, although certain options on foreign currencies may be listed
on several exchanges. Although such options will be purchased or written only when an investment adviser or subadviser believes that a
liquid secondary market exists for such options, there can be no assurance that a liquid secondary market will exist for a particular
option at any specific time. Options on foreign currencies are affected by all of those factors which influence exchange rates and investments
generally.
The value of a foreign
currency option is dependent upon the value of the foreign currency and the U.S. dollar, and may have no relationship to the investment
merits of a foreign security.
Foreign
Currency Conversion. Although foreign exchange dealers do not charge a fee for currency conversion,
they do realize a profit based on the difference (the “spread”) between prices at which they buy and sell various currencies.
Thus, a dealer may offer to sell a foreign currency to a Fund at one rate, while offering a lesser rate of exchange should a Fund desire
to resell that currency to the dealer.
Foreign
Currency Swap Agreements. A Fund may enter into currency swaps to protect against adverse changes
in exchange rates between the U.S. dollar and other currencies or as a means of making indirect investments in foreign currencies. Currency
swaps involve the individually negotiated exchange by a Fund with another party of a series of payments in specified currencies in amounts
determined pursuant to the terms of the swap agreement. (See “Swap Agreements and Options on Swap Agreements,” below.)
Foreign currency derivatives
transactions may be highly volatile and may give rise to investment leverage.
Financial
Futures Contracts
A Fund may enter into
futures contracts, including interest rate futures contracts, securities index futures contracts, and futures contracts on fixed income
securities (collectively referred to as “financial futures contracts”).
A Fund may use interest
rate futures contracts to adjust the interest rate sensitivity (duration) of its portfolio or the credit exposure of the portfolio. Interest
rate futures contracts obligate the long or short holder to take or make delivery of a specified quantity of a financial instrument, such
as a specific fixed income security, during a specified future period at a specified price.
A Fund may use index
futures contracts to hedge against broad market risks to its portfolio or to gain broad market exposure when it holds uninvested cash
or as an inexpensive substitute for cash investments directly in securities or other assets, including commodities and precious metals.
Securities index futures contracts are contracts to buy or sell units of a securities index at a specified future date at a price
agreed upon when the contract is made and are settled in cash.
Positions
in financial futures contracts may be closed out only on an exchange or board of trade which provides a market for such futures.
There
are special risks associated with entering into financial futures contracts. The skills needed to use financial futures contracts effectively
are different from those needed to select a Fund’s investments. There may be an imperfect correlation between the price movements
of financial futures contracts and the price movements of the securities in which a Fund invests. There is also a risk that a Fund will
be unable to close a position in a financial futures contract when desired because there is no liquid market for it.
The risk of loss in
trading financial futures contracts can be substantial due to the low margin deposits required and the extremely high degree of leverage
involved in futures pricing. Relatively small price movements in a financial futures contract could have an immediate and substantial
impact, which may be favorable or unfavorable to a Fund. It is possible for a price-related loss to exceed the amount of a Fund’s
margin deposit. An investor could
also suffer losses if it is unable to close out a futures contract because of an illiquid market. Futures are subject to the creditworthiness
of the clearing members (i.e., futures commission merchants) and clearing organizations involved in the transactions.
Although some financial
futures contracts by their terms call for the actual delivery or acquisition of securities at expiration, in most cases the contractual
commitment is closed out before expiration. The offsetting of a contractual obligation is accomplished by purchasing (or selling as the
case may be) on a futures exchange an identical financial futures contract calling for delivery in the same month. Such a transaction
offsets the obligation to make or take delivery. A Fund will incur brokerage fees when it purchases or sells financial futures contracts,
and will be required to maintain margin deposits. If a liquid market does not exist when a Fund wishes to close out a financial futures
contract, it will not be able to do so and will continue to be required to make daily cash payments of variation margin in the event of
adverse price movements.
The
investment adviser has claimed with respect to each Fund an exclusion from the definition of the term “commodity pool operator”
under the Commodity Exchange Act (the “CEA”) and, therefore, is not subject to registration or regulation as a pool operator
under the CEA. For the investment adviser to be eligible to claim such an exclusion, a Fund may only use futures contracts, options on
such futures, commodity options and certain swaps solely for “bona fide hedging purposes” (as defined by the CFTC), or must
limit its use of such instruments for non-bona fide hedging purposes to certain de minimis amounts, as provided by CFTC Rule 4.5.
It is possible that that exclusion may in the future cease to be available with respect to one or more Funds. In any case where the exclusion
is unavailable with respect to a Fund, additional requirements, including CFTC and National Futures Association (“NFA”)-mandated
disclosure, reporting, and recordkeeping obligations, would apply with respect to that Fund. Compliance with the CFTC’s regulatory
requirements and NFA rules could increase Fund expenses and potentially adversely affect a Fund’s total return.
Margin
Payments. When a Fund purchases or sells a financial futures contract, it is required to deposit
with the clearing member an amount of cash, U.S. Treasury bills, or other permissible collateral equal to a small percentage of the
amount of the financial futures contract. This amount is known as “initial margin.” The nature of initial margin is different
from that of margin in security transactions in that it does not involve borrowing money to finance transactions. Rather, initial margin
is similar to a performance bond or good faith deposit that is returned to a Fund upon termination of the contract, assuming the Fund
satisfies its contractual obligations.
Subsequent payments
to and from the clearing member occur on a daily basis in a process known as “marking to market.” These payments are called
“variation margin” and are made as the value of the underlying financial futures contract fluctuates. For example, when
a Fund sells an index futures contract and the price of the underlying index rises above the delivery price, the Fund’s position
declines in value. The Fund then pays the clearing member a variation margin payment equal to the difference between the delivery price
of the index futures contract and the value of the index underlying the index futures contract. Conversely, if the price of the underlying
index falls below the delivery price of the contract, the Fund’s futures position increases in value. The clearing member then
must make a variation margin payment equal to the difference between the delivery price of the index futures contract and the value of
the index underlying the index futures contract.
When a Fund terminates
a position in a financial futures contract, a final determination of variation margin is made, additional cash is paid by or to the Fund,
and the Fund realizes a loss or a gain. Such closing transactions involve additional commission costs.
Options
on Financial Futures Contracts. A Fund may purchase and write call and put options on financial
futures contracts. An option on a financial futures contract gives the purchaser the right, in return for the premium paid, to assume
a position in a financial futures contract (a long position if the option is a call and a short position if the option is a put) at a
specified exercise price at any time during the period of the option or only at expiration of the option, depending on the option’s
terms. Upon exercise of the option, the holder would assume the underlying futures position and would receive a variation margin
payment of cash or securities approximating
the increase in the value of the holder’s option position. If an option is exercised on the last trading day prior to the expiration
date of the option, the settlement will be made entirely in cash. Purchasers of options who fail to exercise their options prior to or
on the exercise date suffer a loss of the premium paid.
Options
on Swaps. Options on swaps (“swaptions”) are similar to options on securities
except that they are traded over-the-counter (i.e., not on an exchange) and the premium paid or received is to buy or grant the right
to enter into a previously agreed upon swap transaction, such as an interest rate or credit default contract. Forward premium swaption
contracts include premiums that have extended settlement dates. The delayed settlement of the premiums is factored into the daily valuation
of the swaption contracts. In the case of interest rate cap and floor contracts, in return for a premium, ongoing payments between two
parties are based on interest rates exceeding a specified rate, in the case of a cap contract, or falling below a specified rate, in the
case of a floor contract.
Special
Risks of Transactions in Financial Futures Contracts and Related Options. Financial futures
contracts entail risks. The risks associated with purchasing and writing put and call options on financial futures contracts can be influenced
by the market for financial futures contracts. An increase in the market value of a financial futures contract on which the Fund has written
an option may cause the option to be exercised. In this situation, the benefit to a Fund would be limited to the value of the exercise
price of the option and the Fund may realize a loss on the option greater than the premium the Fund initially received for writing the
option. In addition, a Fund’s ability to close out an option it has written by entering into an offsetting transaction depends
upon the market’s demand for such financial futures contracts. If a purchased option expires unexercised, a Fund would realize
a loss in the amount of the premium paid for the option.
If an investment adviser’s
or subadviser’s judgment about the general direction of interest rates or markets is wrong, the overall performance may be poorer
than if no financial futures contracts had been entered into.
Liquidity
Risks. Positions in financial futures contracts may be closed out only on the exchange on which
such contract is listed. Although the Funds intend to purchase or sell financial futures contracts for which there appears to be an active
market, there is no assurance that a liquid market will exist for any particular contract or at any particular time. If there is not a
liquid market at a particular time, it may not be possible to close a position in a financial futures contract at such time and, in the
event of adverse price movements, a Fund would continue to be required to make daily cash payments of variation margin.
The ability to establish
and close out positions in options on financial futures contracts will be subject to the development and maintenance of a liquid market.
It is not certain that such a market will develop. Although a Fund generally will purchase only those options for which there appears
to be an active market, there is no assurance that a liquid market on an exchange will exist for any particular option or at any particular
time. In the event no such market exists for particular options, it might not be possible to effect closing transactions in such options,
with the result that a Fund would have to exercise the options in order to realize any profit.
Hedging
Risks. There are several risks in connection with the use by a Fund of financial futures contracts
and related options as a hedging device. One risk arises because of the imperfect correlation between movements in the prices of the financial
futures contracts and options and movements in the underlying securities or index or movements in the prices of a Fund’s securities
which are the subject of a hedge.
Successful use of financial
futures contracts and options by a Fund for hedging purposes is also subject to an investment adviser’s or subadviser’s
ability to predict correctly movements in the direction of the market. It is possible that, where a Fund has purchased puts on financial
futures contracts to hedge its portfolio against a decline in the market, the securities or index on which the puts are purchased may
increase in value and the value of securities held in the portfolio may decline. If this occurred, the Fund would lose money on the puts
and also experience a decline in the value of its portfolio securities. In addition, the prices of financial futures contracts, for a
number of reasons, may not correlate perfectly with movements in the underlying securities or index due to certain market distortions.
First, all participants in
the futures market are subject to margin deposit requirements.
Such requirements may cause investors to close financial futures contracts through offsetting transactions which could distort the normal
relationship between the underlying security or index and futures markets. Second, the margin requirements in the futures markets are
less onerous than margin requirements in the securities markets in general, and as a result the futures markets may attract more speculators
than the securities markets do. Increased participation by speculators in the futures markets may also cause temporary price distortions.
Due to the possibility of price distortion, even a correct forecast of general market trends by an investment adviser or subadviser still
may not result in a successful hedging transaction over a very short time period.
Other
Risks. A Fund will incur brokerage fees in connection with its transactions in financial futures
contracts and related options. In addition, while financial futures contracts and options on financial futures contracts will be purchased
and sold to reduce certain risks, those transactions themselves entail certain other risks. Thus, while a Fund may benefit from the use
of financial futures contracts and related options, unanticipated changes in interest rates or stock price movements may result in a poorer
overall performance for the Fund than if it had not entered into any financial futures contracts or options transactions. Moreover, in
the event of an imperfect correlation between the position in the financial futures contract and the portfolio position that is intended
to be protected, the desired protection may not be obtained and the Fund may be exposed to risk of loss.
Swap
Agreements and Options on Swap Agreements
A Fund may engage
in swap transactions, including interest rate swap agreements, credit default swaps, and total return swaps.
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 or rates, 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 or in a “basket”
of securities representing a particular index). When a Fund enters into an interest rate swap, it typically agrees to make payments to
its counterparty based on a specified long- or short-term interest rate, and will receive payments from its counterparty based on another
interest rate. Other forms of swap agreements include, among others, interest rate caps, under which, in return for a specified payment
stream, 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 specified payment stream, one party agrees to make payments to the other to the extent
that interest rates fall below a specified rate, or “floor”; 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;
and curve cap swaps, under which a party might buy or sell protection against an increase in long-term interest rates relative to shorter-term
rates. A Fund may enter into an interest rate swap in order, for example, to hedge against the effect of interest rate changes on the
value of specific securities in its portfolio, or to adjust the interest rate sensitivity (duration) or the credit exposure of its portfolio
overall, or otherwise as a substitute for a direct investment in debt securities.
A Fund may enter into
total return swaps. In a total return swap, one party typically agrees to pay to the other a short-term interest rate in return for a
payment at one or more times in the future based on the increase in the value of an underlying security or other asset, or index of securities
or assets; if the underlying security, asset, or index declines in value, the party that pays the short-term interest rate must also pay
to its counterparty a payment based on the amount of the decline. A Fund may take either side of such a swap, and so may take a long or
short position in the underlying security, asset, or index. A Fund may enter into a total return swap to hedge against an exposure in
its portfolio (including to adjust the duration or credit quality of a Fund’s bond portfolio) or generally to put cash to work
efficiently in the markets in anticipation of, or as a replacement for, cash investments. A Fund may also enter into a total return swap
to gain exposure to securities or markets in which it might not be able to invest directly (in so-called market access transactions).
A Fund may also enter into contracts for difference, which are similar to total return swaps.
A Fund also may enter into credit default
swap transactions. In a credit default swap, one party provides what is in effect insurance against a default or other adverse credit
event affecting an issuer of debt securities (typically referred to as a “reference entity”). In general, the protection
“buyer” in a credit default swap is obligated to pay the protection “seller” an upfront amount or a periodic
stream of payments over the term of the swap. If a “credit event” occurs, the buyer has the right to deliver to the seller
bonds or other obligations of the reference entity (with a value up to the full notional value of the swap), and to receive a payment
equal to the par value of the bonds or other obligations. Credit events that would trigger a request that the seller make payment are
specific to each credit default swap agreement, but generally include bankruptcy, failure to pay, restructuring, obligation acceleration,
obligation default, or repudiation/moratorium. A Fund may be either the buyer or seller in a credit default swap transaction. When a Fund
buys protection, it may or may not own securities of the reference entity. If it does own securities of the reference entity, the swap
serves as a hedge against a decline in the value of the securities due to the occurrence of a credit event involving the issuer of the
securities. If the Fund does not own securities of the reference entity, the credit default swap may be seen to create a short position
in the reference entity. If a Fund is a buyer and no credit event occurs, the Fund will typically recover nothing under the swap, but
will have had to pay the required upfront payment and stream of continuing payments under the swap. When a Fund sells protection under
a credit default swap, the position may have the effect of creating leverage in the Fund’s portfolio through the Fund’s
indirect long exposure to the issuer or securities on which the swap is written. When a Fund sells protection, it may do so either to
earn additional income or to create such a “synthetic” long position. Credit default swaps involve general market risks,
illiquidity risk, counterparty risk, and credit risk.
A Fund may also enter
into options on swap agreements (“swaptions”). A swaption is a contract that gives a counterparty the right (but not the
obligation) 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. A Fund may write (sell) and purchase put and call swaptions. Depending on the terms of the
particular option agreement, a Fund will generally incur a greater degree of risk when it writes a swaption than it will incur when it
purchases a swaption. When a Fund purchases a swaption, 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 swaption, upon exercise of the option the Fund will become obligated
according to the terms of the underlying agreement. A Fund may enter into swaptions for the same purposes as swaps.
Whether a Fund’s
use of swap agreements or swaptions will be successful will depend on the investment adviser’s or subadviser’s ability to
predict correctly whether certain types of investments are likely to produce greater returns than other investments. 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. Certain restrictions imposed on the Funds by the Code may limit the Funds’ ability to use swap agreements.
Swaps are highly specialized
instruments that require investment techniques, risk analyses, and tax planning different from those associated with traditional investments.
The use of a swap requires an understanding not only of the referenced asset, reference rate, or index but also of the swap itself, without
the benefit of observing the performance of the swap under all possible market conditions. Because they are two party contracts that may
be subject to contractual restrictions on transferability and termination and because they may have terms of greater than seven days,
swap agreements may be considered to be illiquid and subject to a Fund’s limitation on investments in illiquid securities. To the
extent that a swap is not liquid, it may not be possible to initiate a transaction or liquidate a position at an advantageous time or
price, which may result in significant losses.
Like most other investments,
swap agreements are subject to the risk that the market value of the instrument will change in a way detrimental to a Fund’s interest.
A Fund bears the risk that an investment adviser or subadviser will not accurately forecast future market trends or the values of assets,
reference rates, indexes, or other economic factors in establishing swap positions for the Fund. If an investment adviser or subadviser
attempts to use a swap as a hedge against, or as a substitute for, a portfolio investment, the Fund will be exposed to the risk that the
swap will have or will develop imperfect or no
correlation with the portfolio investment. This could
cause substantial losses for the Fund. While hedging strategies involving swap instruments can reduce the risk of loss, they can also
reduce the opportunity for gain or even result in losses by offsetting favorable price movements in other Fund investments. Many swaps
are complex and often valued subjectively.
When a Fund enters
into swap agreements, it is subject to the credit risk of its counterparty and to the counterparty’s ability or willingness to
perform in accordance with the terms of the agreement. A Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise
fails to perform its obligations under a swap agreement. A Fund may experience significant delays in obtaining any recovery in a bankruptcy
or other reorganization proceeding and a Fund may obtain only limited recovery or may obtain no recovery in such circumstances.
Options,
Rights, and Warrants
A Fund may purchase
and sell put and call options on securities to enhance investment performance or to protect against changes in market prices. A Fund that
invests in debt securities may also purchase and sell put and call options to adjust the interest rate sensitivity of its portfolio or
the credit exposure of the portfolio.
Call
Options. A Fund may write call options on portfolio securities to realize a greater current
return through the receipt of premiums. Such option transactions may also be used as a limited form of hedging against a decline in the
price of securities owned by the Fund.
A call option gives
the holder the right to purchase, and obligates the writer to sell, a security at the exercise price at any time before the expiration
date in the case of an American-style option or only on the expiration date in the case of a European-style option. A Fund may write covered
call options or uncovered call options. A call option is “covered” if the writer, at all times while obligated as a writer,
either owns the underlying securities (or comparable securities satisfying the cover requirements of the securities exchanges), or has
the right to acquire such securities through immediate conversion of securities. When a Fund has written an uncovered call option, the
Fund will not necessarily hold securities offsetting the risk to the Fund. As a result, if the call option were exercised, the Fund might
be required to purchase the security that is the subject of the call at the market price at the time of exercise. The Fund’s exposure
on such an option is theoretically unlimited. There is also a risk, especially with less liquid preferred and debt securities, that the
security may not be available for purchase.
A Fund will receive
a premium from writing a call option, which increases the Fund’s return in the event the option expires unexercised or is closed
out at a profit. The amount of the premium reflects, among other things, the relationship between the exercise price and the current market
value of the underlying security, the volatility of the underlying security, the amount of time remaining until expiration, current interest
rates, and the effect of supply and demand in the options market and in the market for the underlying security.
In return for the premium
received when it writes a covered call option, a Fund takes the risk during the life of the option that it will be required to deliver
the underlying security at a price below the current market value of the security or, in the case of a covered call option, to give up
some or all of the opportunity to profit from an increase in the market price of the securities covering the call option.
In the case of a covered
option, the Fund also retains the risk of loss should the price of the securities decline. If the covered option expires unexercised,
the Fund realizes a gain equal to the premium, which may be offset by a decline in price of the underlying security. If the option is
exercised, the Fund realizes a gain or loss equal to the difference between the Fund’s cost for the underlying security and the
proceeds of sale (exercise price minus commissions) plus the amount of the premium.
A Fund may enter into
closing purchase transactions in order to realize a profit or limit a loss on a previously written call option or, in the case of a covered
call option, to free itself to sell the underlying security or to write another call on the security, or protect a security from being
called in an unexpected market rise. Any profits from a closing purchase transaction in the case of a covered call option may be offset
by a decline in the value of the underlying security. Conversely, because increases in the market price
of a call option will generally reflect increases in
the market price of the underlying security, any loss resulting from a closing purchase transaction relating to a covered call option
is likely to be offset in whole or in part by unrealized appreciation of the underlying security owned by the Fund.
Put
Options. A Fund may write put options in order to enhance its current return by taking a long
directional position as to a security or index of securities. Such options transactions may also be used as a limited form of hedging
against an increase in the price of securities that the Fund plans to purchase. A put option gives the holder the right to sell, and obligates
the writer to buy, a security at the exercise price. A Fund may write covered or uncovered put options. A put option is “covered”
if the writer segregates cash and high-grade short-term debt obligations or other permissible collateral equal to the price to be paid
if the option is exercised.
By writing a put option,
the Fund assumes the risk that it may be required to purchase the underlying security for an exercise price higher than its then current
market value, resulting in a potential capital loss unless the security later appreciates in value. A Fund may terminate a put option
that it has written before it expires by entering into a closing purchase transaction. Any loss from this transaction may be partially
or entirely offset by the premium received on the terminated option.
Purchasing
Put and Call Options. A Fund may also purchase put options to protect portfolio holdings against
a decline in market value. This protection lasts for the life of the put option because the Fund, as a holder of the option, may sell
the underlying security at the exercise price regardless of any decline in its market price. A Fund may also purchase a put option hoping
to profit from an anticipated decline in the value of the underlying security. In order for a put option to be profitable, the market
price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs that the
Fund must pay. If the Fund holds the security underlying the option, these costs will reduce any profit the Fund might have realized had
it sold the underlying security instead of buying the put option.
A Fund may purchase
call options to hedge against an increase in the price of securities that the Fund wants ultimately to buy. Such hedge protection is provided
during the life of the call option since the Fund, as holder of the call option, is able to buy the underlying security at the exercise
price regardless of any increase in the underlying security’s market price. A Fund may also purchase a call option as a long directional
investment hoping to profit from an anticipated increase in the value of the underlying security. In order for a call option to be profitable,
the market price of the underlying security must rise sufficiently above the exercise price to cover the premium and transaction costs.
These costs will reduce any profit the Fund might have realized had it bought the underlying security at the time it purchased the call
option.
A Fund may also buy
and sell combinations of put and call options on the same underlying security to earn additional income.
A Fund may purchase
or sell “structured options,” which may comprise multiple option exposures within a single security. The risk and return
characteristics of a structured option will vary depending on the nature of the underlying option exposures. The Fund may use such options
for hedging purposes or as a substitute for direct investments in options or securities. The Fund’s use of structured options may
create investment leverage.
Options
on Foreign Securities. A Fund may purchase and sell options on foreign securities if an investment
adviser or subadviser believes that the investment characteristics of such options, including the risks of investing in such options,
are consistent with the Fund’s investment objective. It is expected that risks related to such options will not differ materially
from risks related to options on U.S. securities. However, position limits and other rules of foreign exchanges may differ from those
in the United States. In addition, options markets in some countries, many of which are relatively new, may be less liquid than comparable
markets in the United States.
Options
on Securities Indexes. A Fund may write or purchase options on securities indexes, subject
to its general investment restrictions regarding options transactions. Index options are similar to options on individual securities in
that the purchaser of an index option acquires the right to buy (in the case of a call) or sell (in the case of a put), and the writer
undertakes the obligation to sell or buy (as the case may be), units of an index at a stated exercise price during the term of the option.
Instead of giving the right to take or make actual delivery of securities, the holder of an index option has the right to receive a cash
“exercise
settlement amount.” This amount is equal to the
amount by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call) the closing
value of the underlying index on the date of the exercise, multiplied by a fixed “index multiplier.” If the Fund has written
an index call option, it will lose money if the index level rises above the option exercise price (plus the amount of the premium received
by the Fund on the option). If the Fund has written an index put option, it will lose money if the index level falls below the option
exercise price (less the amount of the premium received by the Fund).
In cases where a Fund
uses index options for hedging purposes, price movements in securities which a Fund owns or intends to purchase probably will not correlate
perfectly with movements in the level of a securities index and, therefore, a Fund bears the risk of a loss on a securities index option
which is not completely offset by movements in the price of such securities. Because securities index options are settled in cash, a call
writer cannot determine the amount of its settlement obligations in advance and, unlike call writing on a specific security, cannot provide
in advance for, or cover, its potential settlement obligations by acquiring and holding underlying securities. A Fund may, however, cover
call options written on a securities index by holding a mix of securities which substantially replicate the movement of the index or by
holding a call option on the securities index with an exercise price no higher than the call option sold.
A Fund may purchase
or sell options on stock indexes in order to close out its outstanding positions in options on stock indexes which it has purchased. A
Fund may also allow such options to expire unexercised.
Risks
Involved in the Sale of Options. The successful use of a Fund’s options strategies depends
on the ability of an investment adviser or subadviser to forecast correctly interest rate and market movements. For example, if a Fund
were to write a covered call option based on an investment adviser’s or subadviser’s expectation that the price of the underlying
security would fall, but the price were to rise instead, the Fund could be required to sell the security upon exercise at a price below
the current market price. Similarly, if a Fund were to write a put option based on an investment adviser’s or subadviser’s
expectation that the price of the underlying security would rise, but the price were to fall instead, the Fund could be required to purchase
the security upon exercise at a price higher than the current market price.
When a Fund purchases
an option, it runs the risk that it will lose its entire investment in the option in a relatively short period of time, unless the Fund
exercises the option or enters into a closing sale transaction before the option’s expiration. If the price of the underlying security
does not rise (in the case of a call) or fall (in the case of a put) to an extent sufficient to cover the option premium and transaction
costs, the Fund will lose part or all of its investment in the option. This contrasts with an investment by a Fund in the underlying security,
since the Fund will not realize a loss if the security’s price does not change.
The effective use of
options also depends on a Fund’s ability to terminate option positions at times when an investment adviser or subadviser deems
it desirable to do so. There is no assurance that a Fund will be able to effect closing transactions at any particular time or at an acceptable
price.
If a secondary market
in options were to become unavailable, a Fund could no longer engage in closing transactions. Lack of investor interest might adversely
affect the liquidity of the market for particular options or series of options. A market may discontinue trading of a particular option
or options generally. In addition, a market could become temporarily unavailable if unusual events—such as volume in excess of
trading or clearing capability—were to interrupt its normal operations.
A market may at times
find it necessary to impose restrictions on particular types of options transactions, such as opening transactions. If an underlying security
ceases to meet qualifications imposed by the market or the Options Clearing Corporation, new series of options on that security will no
longer be opened to replace expiring series, and opening transactions in existing series may be prohibited. If an options market were
to become unavailable, a Fund as a holder of an option would be able to realize profits or limit losses only by exercising the option,
and the Fund, as option writer, would remain obligated under the option until expiration or exercise.
Disruptions in the
markets for the securities underlying options purchased or sold by a Fund could result in losses on the options. If trading is interrupted
in an underlying security, the trading of options on that security is normally halted as well. As a result, a Fund as purchaser or writer
of an option will be
unable to close out its positions until options trading
resumes, and it may be faced with considerable losses if trading in the security reopens at a substantially different price. In addition,
the Options Clearing Corporation or other options markets may impose exercise restrictions. If a prohibition on exercise is imposed at
the time when trading in the option has also been halted, a Fund as purchaser or writer of an option will be locked into its position
until one of the two restrictions has been lifted. If the Options Clearing Corporation were to determine that the available supply of
an underlying security appears insufficient to permit delivery by the writers of all outstanding calls in the event of exercise, it may
prohibit indefinitely the exercise of put options. A Fund, as holder of such a put option, could lose its entire investment if the prohibition
remained in effect until the put option’s expiration.
Foreign-traded options
are subject to many of the same risks presented by internationally-traded securities. In addition, because of time differences between
the United States and various foreign countries, and because different holidays are observed in different countries, foreign options markets
may be open for trading during hours or on days when U.S. markets are closed. As a result, option premiums may not reflect the current
prices of the underlying interest in the United States.
Exchanges have established
limits on the maximum number of options an investor or group of investors acting in concert may write. The Funds, an investment adviser
or subadviser, and other clients of the investment adviser or subadviser may constitute such a group. These limits restrict a Fund’s
ability to purchase or sell particular options.
Over-the-Counter
Options. A Fund may purchase or sell OTC options. OTC options are not traded on securities
or options exchanges or backed by clearinghouses. Rather, they are entered into directly between a Fund and the counterparty to the option.
In the case of an OTC option purchased by the Fund, the value of the option to the Fund will depend on the willingness and ability of
the option writer to perform its obligations to the Fund. In addition, OTC options may not be transferable and there may be little or
no secondary market for them, so they may be considered illiquid. It may not be possible to enter into closing transactions with respect
to OTC options or otherwise to terminate such options, and as a result a Fund may be required to remain obligated on an unfavorable OTC
option until its expiration. It may be difficult under certain circumstances to value OTC options.
Rights
and Warrants to Purchase Securities; Index Warrants; International. A Fund may invest in rights
and warrants to purchase securities. Rights or warrants generally give the holder the right to receive, upon exercise, a security at a
stated price. Funds typically use rights and warrants in a manner similar to their use of options on securities, as described above. Risks
associated with the use of rights or warrants are generally similar to risks associated with the use of options. Rights and warrants typically
do not carry with them dividend or voting rights with respect to the underlying securities, or any rights in the assets of the issuer.
In addition, the value of a right or a warrant will likely, but will not necessarily, change with the value of the underlying securities,
and a right or a warrant ceases to have value if it is not exercised prior to its expiration date.
Bonds issued with warrants
attached to purchase equity securities have many characteristics of convertible bonds and their prices may, to some degree, reflect the
performance of the underlying stock. Bonds also may be issued with warrants attached to purchase additional fixed income securities.
A Fund may also invest
in equity-linked warrants. A Fund purchases equity-linked warrants from a broker, who in turn is expected to purchase shares in the local
market. If the Fund exercises its warrant, the shares are expected to be sold and the warrant redeemed with the proceeds. Typically, each
warrant represents one share of the underlying stock. Therefore, the price and performance of the warrant are directly linked to the underlying
stock, less transaction costs. In addition to the market risk related to the underlying holdings, a Fund bears counterparty risk with
respect to the issuing broker. There is currently no active trading market for equity-linked warrants, and they may be highly illiquid.
In addition to warrants
on securities, a Fund may purchase put warrants and call warrants whose values vary depending on the change in the value of one or more
specified securities indexes (“index-linked warrants”). Index-linked 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-linked 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 any time when, in the case of a call warrant, the exercise price is greater 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-linked warrant
prior to its expiration, then the Fund would lose the amount of the purchase price paid by it for the warrant.
A Fund using index-linked
warrants would normally do so in a manner similar to its use of options on securities indexes. The risks of a Fund’s use of index-linked
warrants are generally similar to those relating to its use of index options. Unlike most index options, however, index-linked warrants
are issued in limited amounts and are not obligations of a regulated clearing agency, but are backed only by the credit of the bank or
other institution that issues the warrant. Also, index-linked warrants may have longer terms than index options. Index-linked warrants
are not likely to be as liquid as certain index options backed by a recognized clearing agency. In addition, the terms of index-linked
warrants may limit a Fund’s ability to exercise the warrants at such time, or in such quantities, as the Fund would otherwise wish
to do.
A Fund may make indirect
investments in foreign equity securities, through international warrants, participation notes, low exercise price warrants, or other products
that allow the Fund to access investments in foreign markets that would otherwise be unavailable to them. International warrants are financial
instruments issued by banks or other financial institutions, which may or may not be traded on a foreign exchange. International warrants
are a form of derivative security that may give holders the right to buy or sell an underlying security or a basket of securities from
or to the issuer for a particular price or may entitle holders to receive a cash payment relating to the value of the underlying security
or basket of securities. International warrants are similar to options in that they are exercisable by the holder for an underlying security
or securities or the value of the security or securities, but are generally exercisable over a longer term than typical options. These
types of instruments may be American style exercise, which means that they can be exercised at any time on or before the expiration date
of the international warrant, or European style exercise, which means that they may be exercised only on the expiration date. International
warrants have an exercise price, which is typically fixed when the warrants are issued.
A Fund may invest in
low exercise price warrants, which are warrants with an exercise price that is very low relative to the market price of the underlying
instrument at the time of issue (e.g.,
one cent or less). The buyer of a low exercise price warrant effectively pays the full value of the underlying common stock at the outset.
In the case of any exercise of warrants, there may be a time delay between the time a holder of warrants gives instructions to exercise
and the time the price of the common stock relating to exercise or the settlement date is determined, during which time the price of the
underlying security could change significantly. These warrants entail substantial credit risk, since the issuer of the warrant holds the
purchase price of the warrant (approximately equal to the value of the underlying investment at the time of the warrant’s issue)
for the life of the warrant.
The exercise or settlement
date of the warrants and other instruments described above may be affected by certain market disruption events, such as difficulties relating
to the exchange of a local currency into U.S. dollars, the imposition of capital controls by a local jurisdiction or changes in the
laws relating to foreign investments. These events could lead to a change in the exercise date or settlement currency of the instruments,
or postponement of the settlement date. In some cases, if the market disruption events continue for a certain period of time, the warrants
may become worthless, resulting in a total loss of the purchase price of the warrants.
A participation note
or “P-note” is typically a debt instrument issued by a bank or broker-dealer, where the amount of the bank’s or broker-dealer’s
repayment obligation is tied to changes in the value of an underlying security or index of securities. A P-note is a general unsecured
contractual obligation of the bank or broker-dealer that issues it. A Fund must rely on the creditworthiness of the issuer for repayment
of the P-note and for any return on the Fund’s investment in the P-note and would have no rights against the issuer of the underlying
security.
There is no assurance that there will
be a secondary trading market for any of the instruments described above. They may by their terms be non-transferable or otherwise be
highly illiquid and difficult to price. Issuers of such instruments or the calculation agent named in respect of such an instrument may
have broad authority and discretion to adjust the instrument’s terms in response to certain events or to interpret an instrument’s
terms or to make certain determinations relating to the instrument, which could have a significant adverse effect on the value of the
instrument to a Fund. If the issuer or other obligor on an instrument is unable or unwilling to perform its obligations under such an
instrument, a Fund may lose some or all of its investment in the instrument and any unrealized return on that investment. Certain of these
instruments may be subject to foreign investment risk and currency risk.
Equity-Linked
Notes
An equity-linked note
(ELN) is a debt instrument whose value changes based on changes in the value of a single equity security, basket of equity securities,
or an index of equity securities. An equity-linked note may or may not pay interest. See “Hybrid Instruments,” below.
Hybrid
Instruments
Hybrid instruments
are generally considered derivatives and include indexed or structured securities, and combine elements of many derivatives transactions
with those of debt, preferred equity, or a depositary instrument. A Fund may use a hybrid instrument as a substitute for any type of cash
or derivative investment which it might make for any purpose.
A hybrid instrument
may be a debt security, preferred stock, warrant, convertible security, certificate of deposit, or other evidence of indebtedness on which
a portion of or all interest payments, and/or the principal or stated amount payable at maturity, redemption or retirement, is determined
by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles, or
commodities (collectively, “underlying assets”), or by another index, economic factor, or other measure, including interest
rates, currency exchange rates, or commodities or securities indexes (collectively, “benchmarks”). Hybrid instruments may
take a number of forms, including, for example, debt instruments with interest or principal payments or redemption terms determined by
reference to the value of an index, security, or other measure at a future time, preferred stock with dividend rates determined by reference
to the value of a currency, or convertible securities where the conversion terms relate to a particular commodity.
The risks of investing
in a hybrid instrument may, depending on the nature of the instrument, reflect a combination of the risks of investing in securities,
options, futures, currencies, or other types of investments. An investment in a hybrid instrument as a debt instrument may entail significant
risks that are not associated with a similar investment in a traditional debt instrument. The risks of a particular hybrid instrument
will depend upon the terms of the instrument, but may include the possibility of significant changes in the level of the benchmark(s)
or the prices of the underlying assets to which the instrument is linked. Such risks generally depend upon factors unrelated to the operations
or credit quality of the issuer of the hybrid instrument, and may not be foreseen by the purchaser, such as financial or market developments,
economic and political events, the supply and demand of the underlying assets, and interest rate movements. Hybrid instruments may be
highly volatile and their use by a Fund may not be successful.
Hybrid instruments
are potentially more volatile and carry greater market risks than traditional debt instruments. Hybrid instruments may be highly leveraged.
Depending on the structure of the particular hybrid instrument, changes in a benchmark may be magnified by the terms of the hybrid instrument
and have an even more dramatic and substantial effect upon the value of the hybrid instrument. Also, the prices of the hybrid instrument
and the benchmark or underlying asset may not move in the same direction or at the same time.
Hybrid instruments
may also carry liquidity risk since they typically trade OTC, and are not backed by a central clearing organization. The instruments are
often “customized” to meet the portfolio needs of a particular investor, and therefore, the number of investors that are
willing and able to buy such instruments in the secondary market may be smaller than that for more traditional debt securities. Under
certain conditions, the value of such an investment could be zero. In addition, because the purchase and sale of
hybrid investments would likely take place in an OTC
market without the backing of a central clearing organization, or in a transaction between a Fund and the issuer of the hybrid instrument,
the instruments will not likely be actively traded. Hybrid instruments also may not be subject to regulation by the CFTC, the SEC, or
any other governmental regulatory authority.
When a Fund invests
in a hybrid instrument, it also takes on the credit risk of the issuer of the hybrid instrument. In that respect, a hybrid instrument
may create greater risks than investments directly in the securities or other assets underlying the hybrid instrument because the Fund
is exposed both to losses on those securities or other assets and to the credit risk of the issuer of the hybrid instrument. A hybrid
instrument may also pose greater risks than other derivatives based on the same securities or assets because, when it purchases the instrument,
a Fund may be required to pay all, or most, of the notional amount of the investment by way of purchase price, whereas many other derivatives
require a Fund to post only a relatively small portion of the notional amount by way of margin or similar arrangements.
Structured
Investments
A structured investment
is typically issued by a specially created corporation or trust that purchases one or more securities or other assets (“underlying
instruments”), and that in turn issues one or more classes of securities (“structured securities”) backed by, or
representing different interests in, the underlying instruments. The cash flow on the underlying instruments may be apportioned among
the newly issued structured securities to create securities with different investment characteristics, such as varying maturities, payment
priorities, and interest rate provisions, and the extent of such payments made with respect to structured securities is dependent on the
extent of the cash flow on the underlying instruments. Because structured securities typically involve no credit enhancement, their credit
risk generally will reflect that of the underlying instruments. Investments in a structured security may be subordinated to the right
of payment of another class of securities. Subordinated structured securities typically have higher yields and present greater risks than
unsubordinated structured securities. Structured securities are typically sold in private placement transactions, and there currently
is no active trading market for structured securities, and they may be highly illiquid and difficult to value. Because the purchase and
sale of structured securities would likely take place in an OTC market without the backing of a central clearing organization, or in a
transaction between a Fund and the issuer of the structured securities, the creditworthiness of the counterparty of the issuer of the
structured securities would be an additional risk factor the Fund would have to consider and monitor.
Commodity-Linked
“Structured” Securities. Certain structured products may provide exposure to
the commodities markets. Commodity-linked structured securities may be equity or debt securities, may be leveraged or unleveraged, and
may present investment characteristics and risks of an investment in a security and one or more underlying commodities. Certain restrictions
imposed on the Funds by the Code may limit the Funds’ ability to invest in certain commodity-linked structured securities.
Credit-Linked
Securities. Credit-linked securities are typically issued by a limited purpose trust or other
vehicle that, in turn, invests in a basket of derivative instruments, such as credit default swaps, interest rate swaps, and other securities
or transactions, in order to provide exposure to certain high yield or other fixed income issuers or markets. For example, a Fund may
invest in credit-linked securities in order to gain exposure to the high yield markets pending investment of cash and/or to remain fully
invested when more traditional income producing securities are not available. A Fund’s return on its investments in credit-linked
securities will depend on the investment performance of the investments held in the trust or other vehicle. A Fund’s investments
in these instruments are indirectly subject to the risks associated with the derivative instruments in which the trust or other vehicle
invests, including, among others, credit risk, default, or similar event risk, counterparty risk, interest rate risk, leverage risk, and
management risk. There will likely be no established trading market for credit-linked securities and they may be illiquid.
Event-Linked
Securities. Event-linked securities are typically fixed income securities for which the return
of principal and payment of interest is contingent on the non-occurrence of a trigger event, such as a hurricane, earthquake, or other
event that leads to physical or economic loss. If the trigger event occurs prior to maturity, a Fund may lose all or a portion of its
principal and unpaid interest. Event-linked securities may expose a Fund to certain other risks, including issuer default, adverse regulatory
or jurisdictional interpretations, liquidity risk, and adverse tax consequences.
Structured Hybrid
Instruments. Because the performance of structured hybrid instruments is linked to the performance
of an underlying commodity, commodity index, or other economic variable, those investments are subject to “market risks”
with respect to the movements of the commodity markets and may be subject to certain other risks that do not affect traditional equity
and debt securities. If the interest payment on a hybrid instrument is linked to the value of a particular commodity, commodity index,
or other economic variable and the underlying investment loses value, the purchaser might not receive the anticipated interest on its
investment. If the amount of principal to be repaid on a structured hybrid instrument is linked to the value of a particular commodity,
commodity index, or other economic variable, the purchaser might not receive all or any of the principal at maturity of the investment.
The values of structured
hybrid instruments may fluctuate significantly because the values of the underlying investments to which they are linked are themselves
extremely volatile, and the Fund may lose most or all of the value of its investment in a hybrid instrument. Additionally, the particular
terms of a structured hybrid instrument may create economic leverage by contemplating payments that are based on a multiple of the price
increase or decrease of the underlying commodity, commodity index, or other economic variable. A liquid secondary market may not exist
for structured hybrid instruments, which may make it difficult to sell such instruments at an acceptable price or to value them accurately.
A Fund’s investment
in structured products may be subject to limits under applicable law.
When-Issued,
Delayed-Delivery, To-Be-Announced, Forward Commitment, and Standby Commitment Transactions
A Fund may enter into
when-issued, delayed-delivery, to-be-announced (“TBA”), or forward commitment transactions in order to lock in the purchase
price of the underlying security or in order to adjust the interest rate exposure of the Fund’s existing portfolio. In when-issued,
delayed-delivery, or forward commitment transactions, a Fund commits to purchase or sell particular securities, with payment and delivery
to take place at a future date. In the case of TBA purchase commitments, the unit price and the estimated principal amount are established
when the Fund enters into a commitment, with the actual principal amount being within a specified range of the estimate. Although a Fund
does not typically pay for the securities in these types of transactions until they are delivered, it immediately assumes the risks of
ownership, including the risk of price fluctuation. As a result, each of these types of transactions may create investment leverage in
a Fund’s portfolio and increase the volatility of the Fund. If a Fund’s counterparty fails to deliver a security purchased
on a when-issued, delayed-delivery, TBA, or forward commitment basis, there may be a loss, and the Fund may have missed an opportunity
to make an alternative investment.
A Fund may also enter
into standby commitment agreements, obligating the Fund, for a specified period, to buy a specified amount of a security at the option
of the issuer, upon the issuance of the security. The price at which the Fund would purchase the security is set at the time of the agreement.
In return for its promise to purchase the security, a Fund receives a commitment fee. The Fund receives this fee whether or not it is
ultimately required to purchase the security. The securities subject to a standby commitment will not necessarily be issued, and, if they
are issued, the value of the securities on the date of issuance may be significantly less than the price at which the Fund is required
to purchase them.
Recently finalized
Financial Industry Regulatory Authority (“FINRA”) rules include mandatory margin requirements for the TBA market with limited
exceptions. TBA trades historically have not been required to be collateralized. The collateralization of TBA trades is intended to mitigate
counterparty credit risk between trade and settlement, but could increase the cost of TBA transactions and impose added operational complexity.
As of the date of this SAI, it is expected these FINRA rules will be implemented in the near future but it is not clear the full impact
the rules will have on the Funds.
Distressed Securities
A Fund may invest in
securities, including loans purchased in the secondary market, that are the subject of bankruptcy proceedings or otherwise in default
or in risk of being in default as to the repayment of principal and/or interest at the time of acquisition by the Fund or that are rated
in the lower rating categories by one or more nationally recognized statistical rating organizations (for example, Ca or lower by
Moody’s and CC or lower by S&P or Fitch Ratings,
Inc. (“Fitch”)) or, if unrated, are in the judgment of the investment adviser or subadviser of equivalent quality (“Distressed
Securities”). Investment in Distressed Securities is speculative and involves significant risks and a Fund could lose all of its
investment in any Distressed Security.
Distressed Securities
are subject to greater credit and liquidity risks than other types of loans. Reduced liquidity can affect the values of Distressed Securities,
make their valuation and sale more difficult, and result in greater volatility. A bankruptcy proceeding or other court proceeding could
delay or limit the ability of the Fund to collect the principal and interest payments on Distressed Securities or adversely affect the
Fund’s rights in collateral relating to a Distressed Security. If a lawsuit is brought by creditors of a borrower under a Distressed
Security, a court or a trustee in bankruptcy could take certain actions that would be adverse to a Fund. For example:
•
Other
creditors might convince the court to set aside a loan or the collateralization of the loan as a “fraudulent conveyance”
or “preferential transfer.” In that event, the court could recover from the Fund the interest and principal payments that
the borrower made before becoming insolvent. There can be no assurance that the Fund would be able to prevent that recapture.
•
A
bankruptcy court may restructure the payment obligations under the loan so as to reduce the amount to which the Fund would be entitled.
•
The
court might discharge the amount of the loan that exceeds the value of the collateral.
•
The
court could subordinate the Fund’s rights to the rights of other creditors of the borrower under applicable law, decreasing, potentially
significantly, the likelihood of any recovery on the Fund’s investment.
A Fund may, but will
not necessarily, invest in a Distressed Security when the investment adviser or subadviser believes it is likely that the issuer of the
Distressed Securities will make an exchange offer or will be the subject of a plan of reorganization pursuant to which the Fund will receive
new securities in return for the Distressed Securities. There can be no assurance that such an exchange offer will be made or that such
a plan of reorganization will be adopted. In addition, a significant period of time may pass between the time at which a Fund makes its
investment in Distressed Securities and the time that any such exchange offer or plan of reorganization is completed. Even if an exchange
offer is made or plan of reorganization is adopted with respect to Distressed Securities held by a Fund, there can be no assurance that
the securities or other assets received by a Fund in connection with such exchange offer or plan of reorganization will not have a lower
value or income potential than may have been anticipated when the investment was made. If a Fund participates in negotiations with respect
to any exchange offer or plan of reorganization with respect to an issuer of Distressed Securities, the Fund may be restricted from disposing
of such securities.
Dollar Roll Transactions
A Fund may enter into
dollar roll transactions, in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts
to purchase substantially similar securities on a specified future date from the same party. A Fund may invest in dollar rolls in order
to benefit from anticipated changes in pricing for the mortgage-backed securities during the term of the transaction, or for the purpose
of creating investment leverage.
In a dollar roll, the
securities that are to be purchased will be of the same type as the securities sold, but will be supported by different pools of mortgages.
A Fund that engages in a dollar roll forgoes principal and interest paid on the sold securities during the roll period, but is compensated
by the difference between the current sales price and the lower forward price for the future purchase. In addition, a Fund may benefit
by investing the transaction proceeds during the roll period. Dollar roll transactions generally have the effect of creating leverage
in a Fund’s portfolio.
Dollar rolls involve
the risk that the Fund’s counterparty will be unable to deliver the mortgage-backed securities underlying the dollar roll at the
fixed time. If the counterparty files for bankruptcy or becomes insolvent, the counterparty or its representative may ask for and receive
an extension of time to decide whether to enforce the Fund’s repurchase obligation. A Fund’s use of the transaction proceeds
may be restricted pending such decision. A Fund may enter into dollar roll transactions without limit up to the amount permitted under
applicable law.
Exchange Traded Notes (ETNs)
ETNs are senior, unsecured,
debt securities typically issued by financial institutions. An ETN’s return is typically based on the performance of a particular
market index, and the value of the index may be impacted by market forces that affect the value of ETNs in unexpected ways. ETNs are similar
to Structured Investments, except that they are typically listed on an exchange and traded in the secondary market. See “Structured
Investments” in this SAI. The return on an ETN is based on the performance of the specified market index, and an investor may,
at maturity, realize a negative return on the investment. ETNs typically do not make periodic interest payments and principal is not protected.
The repayment of principal and any additional return due either at maturity or upon repurchase by the issuer depends on the issuer’s
ability to pay, regardless of the performance of the underlying index. Accordingly, ETNs are subject to credit risk that the issuer will
default or will be unable to make timely payments of principal. Certain events can impact an ETN issuer’s financial situation and
ability to make timely payments to ETN holders, including economic, political, legal, or regulatory changes and natural disasters. Event
risk is unpredictable and can significantly impact ETN holders.
The market value of
an ETN may be influenced by, among other things, time to maturity, level of supply and demand of the ETN, volatility and lack of liquidity
in the underlying assets, changes in the applicable interest rates, the current performance of the market index to which the ETN is linked,
and the credit rating of the ETN issuer. The market value of an ETN may differ from the performance of the applicable market index and
there may be times when an ETN trades at a premium or discount. This difference in price may be due to the fact that the supply and demand
in the market for ETNs at any point in time is not always identical to the supply and demand in the market for the securities underlying
the market index that the ETN seeks to track. A change in the issuer’s credit rating may also impact the value of an ETN without
regard to the level of the underlying market index. ETNs are also subject to tax risk. No assurance can be given that the Internal Revenue
Service (“IRS”) will accept, or a court will uphold, how the Funds characterize and treat ETNs for tax purposes.
A Fund’s ability
to sell its ETN holdings may be limited by the availability of a secondary market. In addition, although an ETN may be listed on an exchange,
the issuer may not be required to maintain the listing and there can be no assurance that a secondary market will exist for an ETN. Some
ETNs may be relatively illiquid and may therefore be difficult to purchase or sell at a fair price. Leveraged ETNs may offer the potential
for greater return, but their values may be highly volatile.
Financial Services
Companies
A
Fund may invest in financial services companies. Financial services companies are subject to extensive government regulation that may
affect their profitability in many ways, including by limiting the amount and types of loans and other commitments they can make, and
the interest rates and fees they can charge. A financial services company’s profitability, and therefore its stock price, is especially
sensitive to interest rate changes as well as the ability of borrowers to repay their loans. Changing regulations, continuing consolidations,
and development of new products and structures all are likely to have a significant impact on financial services companies.
Fixed Income Securities
Certain of the debt
securities in which the Funds may invest may not offer as high a yield as may be achieved from lower quality instruments having less safety.
If a Fund disposes of an obligation prior to maturity, it may realize a loss or a gain. An increase in interest rates will generally reduce
the value of debt securities, and a decline in interest rates will generally increase the value of debt securities. In addition, debt
securities are subject to the ability of the issuer to make payment at maturity.
To the extent that
a Fund invests in debt securities, interest rate fluctuations will affect its NAV, but not the income it receives from its debt securities.
In addition, if the debt securities contain call, prepayment, or redemption provisions, during a period of declining interest rates, those
securities are likely to be redeemed, and a Fund would probably be unable to replace them with securities having as great a yield. Certain
events, such as market or economic developments, regulatory or government actions, natural disasters, pandemics, terrorist attacks, war,
and other geopolitical events can have a dramatic adverse effect on the debt market and the overall liquidity of the market for fixed
income securities.
Investment in medium- or lower-grade
debt securities involves greater investment risk, including the possibility of issuer default or bankruptcy. An economic downturn could
severely disrupt this market and adversely affect the value of outstanding bonds and the ability of the issuers to repay principal and
interest. In addition, lower-quality bonds are less sensitive to interest rate changes than higher-quality instruments and generally are
more sensitive to adverse economic changes or individual corporate developments. During a period of adverse economic changes, including
a period of rising interest rates, issuers of such bonds may experience difficulty in servicing their principal and interest payment
obligations. Furthermore, medium- and lower-grade debt securities tend to be less marketable than higher-quality debt securities because
the market for them is less broad. The market for unrated debt securities is even narrower. During periods of thin trading in these markets,
the spread between bid and asked prices is likely to increase significantly, and a Fund may have greater difficulty selling its portfolio
securities. The market value of these securities and their liquidity may be affected by adverse publicity and investor perceptions.
Foreign Securities
Each Fund may invest
in foreign securities. Foreign securities include securities of foreign companies and foreign governments (or agencies or subdivisions
thereof). If a Fund’s securities are held abroad, the countries in which such securities may be held and the sub-custodian holding
them must be approved by the Board or its delegate under applicable rules adopted by the SEC. In buying foreign securities, each Fund
may convert U.S. dollars into foreign currency.
The globalization and
integration of the world economic system and related financial markets have made it increasingly difficult to define issuers geographically.
Accordingly, the Funds intend to construe geographic terms such as “foreign,” “non-U.S.,” “European,”
“Latin American,” “Asian,” and “emerging markets” in the manner that affords to the Funds the
greatest flexibility in seeking to achieve the investment objective(s) of the relevant Fund. Specifically, unless otherwise stated, in
circumstances where the investment objective and/or strategy is to invest (a) exclusively in “foreign securities,”
“non-U.S. securities,” “European securities,” “Latin American securities,” “Asian securities,”
or “emerging markets” (or similar directions) or (b) at least some percentage of the Fund’s assets
in foreign securities, etc., the Fund will take the view that a security meets this description so long as the issuer of a security is
tied economically to the particular country or geographic region indicated by words of the relevant investment objective and/or strategy
(the “Relevant Language”). For these purposes the issuer of a security is deemed to have that tie if:
(i) the issuer is organized
under the laws of the country or a country within the geographic region suggested by the Relevant Language or maintains its principal
place of business in that country or region; or
(ii) the securities
are traded principally in the country or region suggested by the Relevant Language; or
(iii) the issuer, during
its most recent fiscal year, derived at least 50% of its revenues or profits from goods produced or sold, investments made, or services
performed in the country or region suggested by the Relevant Language or has at least 50% of its assets in that country or region.
In addition, the Funds
intend to treat derivative securities (e.g., call options) by reference to the underlying security. Conversely, if the investment objective
and/or strategy of a Fund limits the percentage of assets that may be invested in “foreign securities,” etc. or prohibits
such investments altogether, a Fund intends to categorize securities as “foreign,” etc. only if the security possesses all
of the attributes described above in clauses (i), (ii), and (iii).
Foreign securities
also include a Fund’s investment in foreign securities through depositary receipts, in the form of American Depositary Receipts
(“ADRs”), European Depositary Receipts (“EDRs”), Global Depositary Receipts (“GDRs”), or other
similar securities. An ADR is a U.S. dollar-denominated security issued by a U.S. bank or trust company that represents, and may be converted
into, a foreign security. An EDR or a GDR is generally similar but is issued by a non-U.S. bank. Depositary receipts are subject to the
same risks as direct investment in foreign securities. Depositary receipts may not necessarily be denominated in the same currency as
the underlying securities into which they may be converted, and changes in currency exchange rates may affect the value of an ADR investment
in ways different from direct investments in foreign securities. Funds may invest in both sponsored and unsponsored depositary receipts.
Unsponsored depositary receipts are organized independently and without the cooperation of the issuer of
the underlying securities. As a result, available information
concerning the issuers may not be as current for unsponsored depositary receipts and the prices of unsponsored depositary receipts may
be more volatile than if such instruments were sponsored by the issuer. An investment in an ADR is subject to the credit risk of the issuer
of the ADR.
Investments
in foreign securities involve special risks and considerations. Foreign companies are not generally subject to uniform accounting, auditing,
and financial reporting standards, practices, and requirements comparable to those applicable to domestic companies, and such practices
and standards may vary significantly from country to country. There may be less publicly available information about a foreign company
than about a domestic company. The U.S. Public Company Accounting Oversight Board (“PCAOB”), which regulates auditors of
U.S. public companies, is unable to inspect audit work papers in certain foreign countries. Investors in foreign countries often have
limited rights and few practical remedies to pursue shareholder claims, including class actions or fraud claims, and the ability of the
SEC, the U.S. Department of Justice, and other authorities to bring and enforce actions against foreign issuers or foreign persons is
limited. Foreign markets have different clearance and settlement procedures. Delays in settlement could result in temporary periods when
assets of a Fund are uninvested. The inability of a Fund to make intended security purchases due to settlement problems could cause it
to miss certain investment opportunities. Foreign securities may also entail certain other risks, such as the possibility of one or more
of the following: imposition of dividend or interest withholding or confiscatory taxes, higher brokerage costs, thinner trading markets,
currency blockages or transfer restrictions, expropriation, nationalization, military coups, economic sanctions, or other adverse political
or economic developments; less government supervision and regulation of securities exchanges, brokers and listed companies; and the difficulty
of enforcing obligations in other countries, and are more susceptible to environmental problems. Purchases of foreign securities are usually
made in foreign currencies and, as a result, a Fund may incur currency conversion costs and may be affected favorably or unfavorably by
changes in the value of foreign currencies against the U.S. dollar. Further, it may be more difficult for a Fund’s agents to keep
currently informed about corporate actions which may affect the prices of portfolio securities. Communications between the United States
and foreign countries may be less reliable than within the United States, thus increasing the risk of delayed settlements of portfolio
transactions or loss of certificates for portfolio securities. Certain markets may require payment for securities before delivery. In
addition, there may be a possibility of nationalization or expropriation of assets, imposition of currency exchange controls, confiscatory
taxation, political or financial instability, diplomatic developments that could adversely affect the values of the Fund’s investments
in certain non-U.S. countries, and quotas or other limits on the ability of the Fund (or clients of the Fund’s investment adviser
or subadviser) to invest or maintain investments in securities of issuers in certain countries.
A number of current
significant political, demographic, and economic developments may affect investments in foreign securities and in securities of companies
with operations overseas. The course of any one or more of these events and the effect on trade barriers, competition, and markets for
consumer goods and services are uncertain. Similar considerations are of concern with respect to developing countries. For example, the
possibility of revolution and the dependence on foreign economic assistance may be greater in these countries than in developed countries.
Management seeks to mitigate the risks associated with these considerations through diversification and active professional management.
In
addition to the general risks of investing in foreign securities, investments in emerging markets involve special risks. Securities of
many issuers in emerging markets may have less stringent investor protection and disclosure standards, and may be less liquid and more
volatile than securities of comparable domestic issuers. Shares of companies that only trade on an emerging market securities exchange
are not likely to file reports with the SEC. The availability of material financial information about such companies and its reliability
may be limited since such companies are generally not subject to the same regulatory, accounting, auditing, or auditor oversight requirements
applicable to companies that file reports with the SEC. In addition, the PCAOB, which regulates auditors of U.S. public companies, is
unable to inspect audit work papers in certain emerging market countries. Emerging markets may have different clearance and settlement
procedures, and in certain markets there have been times when settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in settlement could result in temporary periods when a portion
of the assets of a Fund is uninvested and no return is earned thereon. The inability of a Fund to make intended security purchases due
to
settlement problems could cause a Fund to miss attractive
investment opportunities. Inability to dispose of portfolio securities due to settlement problems could result in losses to a Fund due
to subsequent declines in values of the portfolio securities, decrease in the level of liquidity in a Fund’s portfolio, or, if
a Fund has entered into a contract to sell the security, possible liability to the purchaser. Certain markets may require payment for
securities before delivery, and in such markets a Fund bears the risk that the securities will not be delivered and that the Fund’s
payments will not be returned. In addition, securities markets of emerging market countries are subject to the risk that such markets
may close, sometimes for extended periods of time, due to market, economic, political, regulatory, geopolitical, environmental, public
health, or other conditions. Securities prices in emerging markets can be significantly more volatile than in the more developed nations
of the world, reflecting the greater uncertainties of investing in less established markets and economies. In particular, countries with
emerging markets may have relatively unstable governments, present the risk of nationalization of businesses, or may have restrictions
on foreign ownership or prohibitions of repatriation of assets, and may have less protection of property rights than more developed countries.
Investors in emerging markets may not have the ability to seek certain legal remedies in U.S. courts as private plaintiffs. As a
practical matter, investors may have to rely on domestic legal remedies that are available in the emerging market and such remedies are
often limited and difficult for international investors to pursue. Shareholder claims, including class action and securities law and fraud
claims, generally are difficult or unavailable to pursue as a matter of law or practicality in many emerging market countries. In addition,
the SEC, U.S. Department of Justice, and other U.S. authorities often have substantial difficulties in bringing and enforcing actions
against non-U.S. companies and non-U.S. persons, including company officers and directors, in certain emerging markets due to jurisdictional
limitations and various other factors. The economies of countries with emerging markets may be predominantly based on only a few industries,
may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens or inflation
rates. Local securities markets may trade a small number of securities and may be unable to respond effectively to increases in trading
volume, potentially making prompt liquidation of substantial holdings difficult or impossible at times. Securities of issuers located
in countries with emerging markets may have limited marketability and may be subject to more abrupt or erratic price movements. In addition,
many emerging market countries with less established health care systems have experienced outbreaks of pandemics or contagious diseases
from time to time.
Certain emerging markets
may require governmental approval for the repatriation of investment income, capital, or the proceeds of sales of securities by foreign
investors. In addition, if a deterioration occurs in an emerging market’s balance of payments or for other reasons, a country could
impose temporary restrictions on foreign capital remittances. A Fund could be adversely affected by delays in, or a refusal to grant,
any required governmental approval for repatriation of capital, as well as by the application to that Fund of any restrictions on investments.
Russia,
the Middle East, and many other emerging market countries are highly reliant on income from oil sales. Oil prices can have a major impact
on these economies. Other commodities such as base and precious metals are also important to these economies. As global supply and demand
for commodities fluctuates, these economies can be significantly impacted by the prices of such commodities.
Investment in certain
foreign emerging market debt obligations may be restricted or controlled to varying degrees. These restrictions or controls may at times
preclude investment in certain foreign emerging market debt obligations and increase the expenses of a Fund.
China
Investment Risk. Investments in securities of companies domiciled in the People’s Republic
of China (“China” or the “PRC”) involve a high degree of risk and special considerations not typically associated
with investing in the U.S. securities markets. Such heightened risks include, among others, an authoritarian government, popular unrest
associated with demands for improved political, economic, and social conditions, the impact of regional conflict on the economy, and hostile
relations with neighboring countries.
Military
conflicts, either in response to internal social unrest or conflicts with other countries, could disrupt economic development. The Chinese
economy is vulnerable to the long-running disagreements and religious and nationalist disputes with Tibet and the Xinjiang region. Since
1997, there have been tensions between the Chinese government and many people in Hong Kong who perceive China as tightening control
over Hong Kong’s semi-autonomous
liberal political, economic, legal, and social framework. Recent protests and unrest have increased tensions even further. Due to the
interconnected nature of the Hong Kong and Chinese economies, this instability in Hong Kong may cause uncertainty in the Hong Kong and
Chinese markets. China has a complex territorial dispute regarding the sovereignty of Taiwan and has made threats of invasion; Taiwan-based
companies and individuals are significant investors in China. Military conflict between China and Taiwan may adversely affect securities
of Chinese issuers. In addition, China has strained international relations with Japan, India, Russia, and other neighbors due to territorial
disputes, historical animosities, and other defense concerns. Additionally, China is alleged to have participated in state-sponsored cyberattacks
against foreign companies and foreign governments. Actual and threatened responses to such activity and strained international relations,
including purchasing restrictions, sanctions, tariffs, or cyberattacks on the Chinese government or Chinese companies, may impact China’s
economy and Chinese issuers of securities in which a Fund invests. China could be affected by military events on the Korean peninsula
or internal instability within North Korea. These situations may cause uncertainty in the Chinese market and may adversely affect the
performance of the Chinese economy.
The
Chinese government has implemented significant economic reforms in order to liberalize trade policy, promote foreign investment in the
economy, reduce government control of the economy, and develop market mechanisms. However, there can be no assurance that these reforms
will continue or that they will be effective. Despite reforms and privatizations of companies in certain sectors, the Chinese government
still exercises substantial influence over many aspects of the private sector and may own or control many companies. Chinese companies,
such as those in the financial services or technology sectors, and potentially other sectors in the future, are subject to the risk that
Chinese authorities can intervene in their operations and structure. The Chinese government continues to maintain a major role in economic
policy making and investing in China involves risks of losses due to expropriation, nationalization, confiscation of assets and property,
and the imposition of restrictions on foreign investments and on repatriation of capital invested.
The
Chinese government may intervene in the Chinese financial markets, such as by the imposition of trading restrictions, a ban on “naked”
short selling, or the suspension of short selling for certain stocks. This may affect market price and liquidity of these stocks, and
may have an unpredictable impact on the investment activities of the Funds. Furthermore, such market interventions may have a negative
impact on market sentiment which may in turn affect the performance of the securities markets and as a result the performance of the Funds.
In
addition, there is less regulation and monitoring of the securities markets and the activities of investors, brokers, and other participants
in China than in the United States. Accordingly, issuers of securities in China are not subject to the same degree of regulation as those
in the United States with respect to such matters as insider trading rules, tender offer regulation, stockholder proxy requirements, and
the requirements mandating timely and accurate disclosure of information. Stock markets in China are in the process of change and further
development. This may lead to trading volatility, and difficulties in the settlement and recording of transactions and interpretation
and application of the relevant regulations. Custodians may not be able to offer the level of service and safe-keeping in relation to
the settlement and administration of securities in China that is customary in more developed markets. In particular, there is a risk that
a Fund may not be recognized as the owner of securities that are held on behalf of the Fund by a sub-custodian.
The
Chinese government has taken positions that prevent the PCAOB from inspecting the audit work and practices of accounting firms in mainland
China and Hong Kong for compliance with U.S. law and professional standards. Audits performed by PCAOB-registered accounting firms in
mainland China and Hong Kong may be less reliable than those performed by firms subject to PCAOB inspection. Accordingly, information
about the Chinese securities in which the Funds invest may be less reliable or complete. Under amendments to the Sarbanes-Oxley Act enacted
in December 2020, which requires that the PCAOB be permitted to inspect the accounting firm of a U.S.-listed Chinese issuer, Chinese
companies with securities listed on U.S. exchanges may be delisted if the PCAOB is unable to inspect the accounting firm.
The
Renminbi (“RMB”) is currently not a freely convertible currency and is subject to foreign exchange control policies and
repatriation restrictions imposed by the Chinese government. The imposition of currency controls may negatively impact performance and
liquidity of the Funds as capital may become
trapped in the PRC. The Funds could
be adversely affected by delays in, or a refusal to grant, any required governmental approval for repatriation of capital, as well as
by the application to the Funds of any restrictions on investments. Investing in entities either in, or which have a substantial portion
of their operations in, the PRC may require the Funds to adopt special procedures, seek local government approvals, or take other actions,
each of which may involve additional costs and delays to the Funds.
While
the Chinese economy has grown rapidly in recent years, there is no assurance that this growth rate will be maintained. China may
experience substantial rates of inflation or economic recessions, causing a negative effect on its economy and securities market. China’s
economy is heavily dependent on export growth. Reduction in spending on Chinese products and services, institution of tariffs or other
trade barriers, or a downturn in any of the economies of China’s key trading partners may have an adverse impact on the securities
of Chinese issuers. The tax laws and regulations in the PRC are subject to change, including the issuance of authoritative guidance or
enforcement, possibly with retroactive effect. The interpretation, applicability, and enforcement of such laws by the PRC tax authorities
are not as consistent and transparent as those of more developed nations, and may vary over time and from region to region. The application
and enforcement of the PRC tax rules could have a significant adverse effect on a Fund and its investors, particularly in relation to
capital gains withholding tax imposed upon non-residents. In addition, the accounting, auditing, and financial reporting standards and
practices applicable to Chinese companies may be less rigorous, and may result in significant differences between financial statements
prepared in accordance with PRC accounting standards and practices and those prepared in accordance with international accounting standards.
From
time to time, China has experienced outbreaks of infectious illnesses and the country may be subject to other public health threats, infectious
illnesses, diseases, or similar issues in the future. Any spread of an infectious illness, public health threat, or similar issue could
reduce consumer demand or economic output, result in market closures, travel restrictions or quarantines, and generally have a significant
impact on the Chinese economy, which in turn could adversely affect a Fund’s investments.
Risk
of Investing in China through Stock Connect. China A-shares are equity securities of companies
domiciled in China that trade on Chinese stock exchanges such as the Shanghai Stock Exchange (“SSE”) and the Shenzhen Stock
Exchange (“SZSE”) (“A-shares”) and are denominated and traded in RMB whereas China B-shares are traded on
Chinese stock exchanges and are denominated in RMB but traded in either U.S. dollars or Hong Kong dollars (“B-shares”).
Foreign investment in A-shares on the SSE and SZSE has historically not been permitted, other than through a license granted under regulations
in the PRC known as the Qualified Foreign Institutional Investor and Renminbi Qualified Foreign Institutional Investor systems. Foreign
investors may invest in B-shares directly. A Fund’s exposure to B-shares may be obtained through indirect exposure through investment
in participation notes.
Investment in eligible
A-shares listed and traded on the SSE or SZSE is also permitted through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong
Kong Stock Connect program, as applicable (each, a “Stock Connect” and collectively, “Stock Connects”). Each
Stock Connect is a securities trading and clearing links program established by The Stock Exchange of Hong Kong Limited (“SEHK”),
the Hong Kong Securities Clearing Company Limited (“HKSCC”), the SSE or SZSE, as applicable, and China Securities Depository
and Clearing Corporation Limited (“CSDCC”) that aims to provide mutual stock market access between the PRC and Hong Kong
by permitting investors to trade and settle shares on each market through their local securities brokers. Under Stock Connects, a Fund’s
trading of eligible A-shares listed on the SSE or SZSE, as applicable, would be effectuated through its Hong Kong broker and a securities
trading service company established by SEHK.
Although no individual
investment quotas or licensing requirements apply to investors in Stock Connects, trading through a Stock Connect’s Northbound
Trading Link is subject to daily investment quota limitations which require that buy orders for A-shares be rejected once the daily quota
is exceeded (although a Fund will be permitted to sell A-shares regardless of the quota). These limitations may restrict a Fund from investing
in A-shares on a timely basis, which could affect the Fund’s ability to effectively pursue its investment strategy. Investment
quotas are also subject to change. Investment in eligible A-shares through a Stock Connect is subject to trading, clearance and settlement
procedures that could pose risks to a Fund. A-shares purchased through Stock Connects generally may not be sold or otherwise transferred
other than through Stock Connects
in accordance with applicable rules. For example, the PRC regulations require that in order for an investor to sell any A-share on a certain
trading day, there must be sufficient A-shares in the investor’s account before the market opens on that day. If there are insufficient
A-shares in the investor’s account, the sell order will be rejected by the SSE or SZSE, as applicable. SEHK carries out pre-trade
checking on sell orders of certain stocks listed on the SSE market (“SSE Securities”) or SZSE market (“SZSE Securities”)
of its participants (i.e., stock brokers) to ensure that this requirement is satisfied. While shares must be designated as eligible to
be traded under a Stock Connect, those shares may also lose such designation, and if this occurs, such shares may be sold but cannot be
purchased through a Stock Connect. In addition, Stock Connects will only operate on days when both the Chinese and Hong Kong markets are
open for trading, and banking services are available in both markets on the corresponding settlement days. Therefore, an investment in
A-shares through a Stock Connect may subject a Fund to a risk of price fluctuations on days when the Chinese market is open, but a Stock
Connect is not trading. Moreover, day (turnaround) trading is not permitted on the A-shares market. If an investor buys A-shares on day
“T,” the investor will only be able to sell the A-shares on or after day T+1. Further, since all trades of eligible A-shares
must be settled in RMB, investors must have timely access to a reliable supply of offshore RMB, which cannot be guaranteed. There is also
no assurance that RMB will not be subject to devaluation. Any devaluation of RMB could adversely affect a Fund’s investments. If
a Fund holds a class of shares denominated in a local currency other than RMB, the Fund will be exposed to currency exchange risk if the
Fund converts the local currency into RMB for investments in A-shares. A Fund may also incur conversion costs.
A-shares held through
the nominee structure under a Stock Connect will be held through HKSCC as nominee on behalf of investors. The precise nature and rights
of a Fund as the beneficial owner of the SSE Securities or SZSE Securities through HKSCC as nominee is not well defined under the PRC
laws. There is a lack of a clear definition of, and distinction between, legal ownership and beneficial ownership under the PRC laws and
there have been few cases involving a nominee account structure in the PRC courts. The exact nature and methods of enforcement of the
rights and interests of a Fund under the PRC laws is also uncertain. In the unlikely event that HKSCC becomes subject to winding up proceedings
in Hong Kong, there is a risk that the SSE Securities or SZSE Securities may not be regarded as held for the beneficial ownership of a
Fund or as part of the general assets of HKSCC available for general distribution to its creditors. Notwithstanding the fact that HKSCC
does not claim proprietary interests in the SSE Securities or SZSE Securities held in its omnibus stock account in the CSDCC, the CSDCC
as the share registrar for SSE- or SZSE-listed companies will still treat HKSCC as one of the shareholders when it handles corporate actions
in respect of such SSE Securities or SZSE Securities. HKSCC monitors the corporate actions affecting SSE Securities and SZSE Securities
and keeps participants of Central Clearing and Settlement System (“CCASS”) informed of all such corporate actions that require
CCASS participants to take steps in order to participate in them. Investors may only exercise their voting rights by providing their voting
instructions to HKSCC through participants of CCASS. All voting instructions from CCASS participants will be consolidated by HKSCC, who
will then submit a combined single voting instruction to the relevant SSE- or SZSE-listed company.
A Fund’s investments
through a Stock Connect’s Northbound Trading Link are not covered by Hong Kong’s Investor Compensation Fund. Hong Kong’s
Investor Compensation Fund is established to pay compensation to investors of any nationality who suffer pecuniary losses as a result
of default of a licensed intermediary or authorized financial institution in relation to exchange-traded products in Hong Kong. In addition,
since a Fund carries out Northbound Trading through securities brokers in Hong Kong but not PRC brokers, it is not protected by the China
Securities Investor Protection Fund in the PRC.
Market participants
are able to participate in Stock Connects subject to meeting certain information technology capability, risk management and other requirements
as may be specified by the relevant exchange and/or clearinghouse. Further, the “connectivity” in Stock Connects requires
routing of orders across the border of Hong Kong and the PRC. This requires the development of new information technology systems on the
part of SEHK and exchange participants. There is no assurance that the systems of SEHK and market participants will function properly
or will continue to be adapted to changes and developments in both markets. In the event that the relevant systems fail to function properly,
trading in A-shares through Stock Connects could be disrupted.
The Shanghai-Hong Kong Stock Connect
program launched in November 2014 and the Shenzhen-Hong Kong Stock Connect program launched in December 2016 and are both in
their initial stages. The current regulations are relatively untested and there is no certainty as to how they will be applied or interpreted
going forward. In addition, the current regulations are subject to change and there can be no assurance that a Stock Connect will not
be discontinued. New regulations may be issued from time to time by the regulators and stock exchanges in China and Hong Kong in connection
with operations, legal enforcement and cross-border trades under Stock Connects. A Fund may be adversely affected as a result of such
changes. Furthermore, the securities regimes and legal systems of China and Hong Kong differ significantly and issues may arise from the
differences on an ongoing basis. In the event that the relevant systems fail to function properly, trading in both markets through Stock
Connects could be disrupted and a Fund’s ability to achieve its investment objective may be adversely affected. In addition, a
Fund’s investments in A-shares through Stock Connects are generally subject to Chinese securities regulations and listing rules,
among other restrictions. Further, different fees, costs and taxes are imposed on foreign investors acquiring A-shares through Stock Connects,
and these fees, costs and taxes may be higher than comparable fees, costs and taxes imposed on owners of other securities providing similar
investment exposure.
A-Share
Market Suspension Risk. A-shares may only be bought from, or sold to, a Fund at times when
the relevant A-shares may be sold or purchased on the relevant Chinese stock exchange. The A-shares market has a higher propensity for
trading suspensions than many other global equity markets. Trading suspensions in certain stocks could lead to greater market execution
risk and costs for a Fund. The SSE and SZSE currently apply a daily price limit, generally set at 10%, of the amount of fluctuation permitted
in the prices of A-shares during a single trading day. The daily price limit refers to price movements only and does not restrict trading
within the relevant limit. There can be no assurance that a liquid market on an exchange will exist for any particular A-share or for
any particular time.
Risks
of Investing in China through Variable Interest Entities. Investments in Chinese companies
may be made through a special structure known as a variable interest entity (“VIE”) that is designed to provide foreign
investors, such as a Fund, with exposure to Chinese companies that operate in certain sectors in which China restricts or prohibits foreign
investments. Investments in VIEs may pose additional risks because the investment is made through an intermediary shell company that has
entered into service and other contracts with the underlying Chinese operating company in order to provide investors with exposure to
the operating company, and therefore does not represent equity ownership in the operating company. The value of the shell company is derived
from its ability to consolidate the VIE into its financials pursuant to contractual arrangements that allow the shell company to exert
a degree of control over, and obtain economic benefits arising from, the VIE without formal legal ownership. The contractual arrangements
between the shell company and the operating company may not be as effective in providing operational control as direct equity ownership,
and the rights of a foreign investor (such as a Fund) may be limited, including by actions of the Chinese government that could determine
that the underlying contractual arrangements are invalid. While VIEs are a longstanding industry practice and Chinese regulators have
permitted such arrangements to proliferate, the structure has not been formally recognized under Chinese law and it is uncertain whether
Chinese regulators will withdraw their implicit acceptance of the structure. It is also uncertain whether the contractual arrangements,
which may be subject to conflicts of interest between the legal owners of the VIE and foreign investors, would be enforced by Chinese
courts or arbitration bodies. Prohibitions of these structures by the Chinese government, or the inability to enforce such contracts,
from which the shell company derives its value, would likely cause the VIE-structured holding(s) to suffer significant, detrimental, and
possibly permanent loss, and in turn, adversely affect a Fund’s returns and net asset value.
Health Care Companies
A Fund may invest in
health care companies. The activities of health care companies may be funded or subsidized by federal and state governments. If government
funding and subsidies are reduced or discontinued, the profitability of these companies could be adversely affected. Health care companies
may also be affected by government policies on health care reimbursements, regulatory approval for new drugs and medical instruments,
and similar matters. They are also subject to legislative risk, i.e., the risk of a reform of the health care system through legislation.
Illiquid Securities
Each Fund may invest
not more than 15% of its net assets in “illiquid securities,” which are investments that the Fund reasonably expects cannot
be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing
the market value of the investment. A Fund may not be able to dispose of such securities in a timely fashion and for a fair price, which
could result in losses to a Fund. In addition, illiquid securities are generally more difficult to value. Illiquid securities may include
repurchase agreements with maturities greater than seven days, futures contracts and options thereon for which a liquid secondary market
does not exist, time deposits maturing in more than seven calendar days, and securities of new and early stage companies whose securities
are not publicly traded. The Funds may also purchase securities eligible for resale to qualified institutional buyers pursuant to Rule 144A
under the 1933 Act. Such securities may be determined to be liquid based on an analysis taking into account, among other things, trading
activity for such securities and the availability of reliable pricing information, among other factors. If there is a lack of trading
interest in particular Rule 144A securities, a Fund’s holdings of those securities may be illiquid, resulting in undesirable
delays in selling these securities at prices representing fair value.
Index-Related Securities
(Equity Equivalents)
The Funds may invest
in certain types of securities that enable investors to purchase or sell shares in a portfolio of securities that seeks to track the performance
of an underlying index or a portion of an index. Such Equity Equivalents include, among others, DIAMONDS (interests in a portfolio of
securities that seeks to track the performance of the Dow Jones Industrial Average), SPDRs or Standard & Poor’s Depositary
Receipts (interests in a portfolio of securities that seeks to track the performance of the S&P 500®
Index), and the Nasdaq-100 Trust (interests in a portfolio of securities of the largest and most actively traded non-financial companies
listed on the Nasdaq Stock Market). Such securities are similar to index mutual funds, but they are traded on various stock exchanges
or secondary markets. The value of these securities is dependent upon the performance of the underlying index on which they are based.
Thus, these securities are subject to the same risks as their underlying indexes as well as the securities that make up those indexes.
For example, if the securities comprising an index that an index-related security seeks to track perform poorly, the index-related security
will lose value.
Equity Equivalents
may be used for several purposes, including to simulate full investment in the underlying index while retaining a cash balance for fund
management purposes, to facilitate trading, to reduce transaction costs, or to seek higher investment returns where an Equity Equivalent
is priced more attractively than securities in the underlying index. Because the expense associated with an investment in Equity Equivalents
may be substantially lower than the expense of small investments directly in the securities comprising the indexes they seek to track,
investments in Equity Equivalents may provide a cost-effective means of diversifying the fund’s assets across a broad range of
equity securities.
The prices of Equity
Equivalents are derived and based upon the securities held by the particular investment company. Accordingly, the level of risk involved
in the purchase or sale of an Equity Equivalent is similar to the risk involved in the purchase or sale of traditional common stock, with
the exception that the pricing mechanism for such instruments is based on a basket of stocks. The market prices of Equity Equivalents
are expected to fluctuate in accordance with both changes in the NAVs of their underlying indexes and the supply and demand for the instruments
on the exchanges on which they are traded. Substantial market or other disruptions affecting an Equity Equivalent could adversely affect
the liquidity and value of the shares of the fund investing in such instruments.
Inflation-Linked Securities
Inflation-linked securities
are typically fixed income securities whose principal values are periodically adjusted according to a measure of inflation. If the index
measuring inflation falls, the principal value of an inflation-linked security will be adjusted downward, and consequently the interest
payable on the security (calculated with respect to a smaller principal amount) will be reduced. Repayment of the original principal of
the security upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-linked securities. For securities
that do not provide a similar guarantee, the adjusted principal value of the security repaid at maturity may be less than the original
principal.
Alternatively, the interest rates payable
on certain inflation-linked securities may be adjusted according to a measure of inflation. As a result, the principal values of such
securities do not adjust according to the rate of inflation, although the interest payable on such securities may decline during times
of falling inflation.
The values of inflation-linked
securities are expected to change in response to changes in real interest rates. Real interest rates are tied to the relationship between
nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates
may rise, leading to a decrease in value of inflation-linked securities. Inflation-linked securities may cause a potential cash flow mismatch
to investors, because an increase in the principal amount of an inflation-linked security will be treated as interest income currently
subject to tax at ordinary income rates even though investors will not receive repayment of principal until maturity. If a Fund invests
in such securities, it will be required to distribute such interest income in order to qualify for treatment as a regulated investment
company and eliminate the Fund-level tax, without a corresponding receipt of cash, and therefore may be required to dispose of portfolio
securities at a time when it may not be advantageous to do so in order to make such distributions.
While the values of
inflation-linked securities are expected to be largely protected from long-term inflationary trends, short-term increases in inflation
may lead to declines in value. In addition, if interest rates rise due to reasons other than inflation (for example, due to changes in
currency exchange rates), investors in inflation-linked securities may not be protected to the extent that the increase is not reflected
in the securities’ inflation measure.
The periodic adjustment
of U.S. Treasury inflation-linked securities is tied to the Consumer Price Index for All 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-linked securities issued by a foreign government or a private
issuer are generally adjusted to reflect an inflation measure specified by the issuer. There can be no assurance that the CPI-U or any
other inflation measure will accurately measure the real rate of inflation in the prices of goods and services.
IPOs and Other Limited
Opportunities
A Fund may purchase
securities of companies that are offered pursuant to an initial public offering (“IPO”) or other similar limited opportunities.
Although companies can be any age or size at the time of their IPO, they are often smaller and have a limited operating history, which
involves a greater potential for the value of their securities to be impaired following the IPO. The price of a company’s securities
may be highly unstable at the time of its IPO and for a period thereafter due to factors such as market psychology prevailing at the time
of the IPO, the absence of a prior public market, the small number of shares available, and limited availability of investor information.
Securities purchased in IPOs have a tendency to fluctuate in value significantly shortly after the IPO relative to the price at which
they were purchased. These fluctuations could impact the NAV and return earned on a Fund’s shares. Investors in IPOs can be adversely
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. In addition, all of the factors that affect the performance of an economy or equity markets may
have a greater impact on the shares of IPO companies. IPO securities tend to involve greater risk due, in part, to public perception and
the lack of publicly available information and trading history.
Master Limited Partnerships
A Fund may invest in
master limited partnerships (“MLPs”), which are limited partnerships in which ownership units are publicly traded.
MLPs often own or own interests in properties or businesses that are related to oil and gas industries, including pipelines, although
MLPs may invest in other types of investments, including credit-related investments. Generally, an MLP is operated under the supervision
of one or more managing general partners. Limited partners (like a Fund when it invests in an MLP) are not involved in the day-to-day
management of the partnership. A Fund also may invest in companies who serve (or whose affiliates serve) as MLP general partners.
Investments in MLPs are generally subject
to many of the risks that apply to partnerships. For example, holders of the units of MLPs may have limited control and limited voting
rights on matters affecting the partnership. There may be fewer corporate protections afforded investors in an MLP than investors in a
corporation. Conflicts of interest may exist among unit holders, subordinated unit holders, and the general partner of an MLP, including
those arising from incentive distribution payments. MLPs that concentrate in a particular industry or region are subject to risks associated
with such industry or region. MLPs holding credit-related investments are subject to interest rate risk and the risk of default on payment
obligations by debt issuers. Investments held by MLPs may be illiquid. MLP units may trade infrequently and in limited volume, and they
may be subject to more abrupt or erratic price movements than securities of larger or more broadly based companies.
A Fund may also hold
investments in limited liability companies that have many of the same characteristics and are subject to many of the same risks as master
limited partnerships.
The manner and extent
of a Fund’s investments in MLPs and limited liability companies may be limited by its intention to qualify as a regulated investment
company under the Code, and any such investments by the Fund may adversely affect the ability of the Fund to qualify as such.
Mortgage- and Asset-Backed
Securities
Mortgage-backed securities,
including collateralized mortgage obligations (“CMOs”) and certain stripped mortgage-backed securities, represent a participation
in, or are secured by, mortgage loans. Asset-backed securities are structured like mortgage-backed securities, but instead of mortgage
loans or interests in mortgage loans, the underlying assets may include such items as motor vehicle installment sales or installment loan
contracts, leases of various types of real and personal property, receivables from credit card agreements, home equity loans, and student
loans. Asset-backed securities may also include collateralized debt obligations as described below.
A Fund may invest in
mortgage-backed securities issued or guaranteed by (i) U.S. Government agencies or instrumentalities such as the Government National
Mortgage Association (“GNMA”) (also known as Ginnie Mae), the Federal National Mortgage Association (“FNMA”)
(also known as Fannie Mae), and the Federal Home Loan Mortgage Corporation (“FHLMC”) (also known as Freddie Mac) or (ii) other
issuers, including private companies. Under the Federal Housing Finance Agency’s “Single Security Initiative,” Fannie
Mae and Freddie Mac have entered into a joint initiative to develop a common securitization platform for the issuance of Uniform Mortgage-Backed
Securities (“UMBS”), which would generally align the characteristics of Fannie Mae and Freddie Mac mortgage-backed securities.
In June 2019 Fannie Mae and Freddie Mac started to issue UMBS in place of their current offerings of TBA-eligible mortgage-backed
securities. The effect of the issuance of UMBS on the market for mortgage-backed securities is uncertain. Privately issued mortgage-backed
securities may include securities backed by commercial mortgages, which are mortgages on commercial, rather than residential, real estate.
Privately issued mortgage-backed securities are not traded on an exchange and there may be a limited market for the securities, especially
when there is a perceived weakness in the mortgage and real estate market sectors. Without an active trading market, mortgage-backed securities
held in a Fund’s portfolio may be particularly difficult to value because of the complexities involved in assessing the value of
the underlying mortgage loans. There is no assurance that the U.S. Government would provide financial support to its agencies and instrumentalities
if not required to do so. In addition, certain governmental entities have been subject to regulatory scrutiny regarding their accounting
policies and practices and other concerns that may result in legislation, changes in regulatory oversight and/or other consequences that
could adversely affect the credit quality, availability, or investment character of securities issued by these entities.
Mortgage-backed securities
have yield and maturity characteristics corresponding to the underlying assets. Unlike traditional debt securities, which may pay a fixed
rate of interest until maturity, when the entire principal amount comes due, payments on certain mortgage-backed securities include both
interest and a partial repayment of principal. Besides the scheduled repayment of principal, repayments of principal may result from the
voluntary prepayment, refinancing, or foreclosure of the underlying mortgage loans. If property owners make unscheduled prepayments of
their mortgage loans, these prepayments will result in early payment of the applicable mortgage-related securities. In that event a Fund
may be unable to invest
the proceeds from the early payment of the mortgage-related
securities in an investment that provides as high a yield as the mortgage-related securities. Consequently, early payment associated with
mortgage-related securities may cause these securities to experience significantly greater price and yield volatility than that experienced
by traditional fixed income securities. The occurrence of mortgage prepayments is affected by factors including the level of interest
rates, general economic conditions, the location and age of the mortgages, and other social and demographic conditions. During periods
of falling interest rates, the rate of mortgage prepayments tends to increase, thereby tending to decrease the life of mortgage-related
securities. During periods of rising interest rates, the rate of mortgage prepayments usually decreases, thereby tending to increase the
life of mortgage-related securities. If the life of a mortgage-related security is inaccurately predicted, a Fund may not be able to realize
the rate of return the investment adviser or subadviser expected.
Mortgage-backed and
asset-backed securities are less effective than other types of securities as a means of “locking in” attractive long-term
interest rates. One reason is the need to reinvest prepayments of principal; another is the possibility of significant unscheduled prepayments
resulting from declines in interest rates. These prepayments would have to be reinvested at lower rates. As a result, these securities
may have less potential for capital appreciation during periods of declining interest rates than other securities of comparable maturities,
although they may have a similar or greater risk of decline in market value during periods of rising interest rates. Prepayments may also
significantly shorten the effective maturities of these securities, especially during periods of declining interest rates. Conversely,
during periods of rising interest rates, a reduction in prepayments may increase the effective maturities of these securities, subjecting
them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore,
potentially increasing the volatility of the Funds. The terms of certain asset-backed securities may require early prepayment in response
to certain credit events potentially affecting the values of the asset-backed securities.
At
times, some mortgage-backed and asset-backed securities will have higher than market interest rates and therefore will be purchased at
a premium above their par value. Prepayments may cause losses on securities purchased at a premium. Ongoing developments in the residential
and commercial mortgage markets may have additional consequences for the market for mortgage-backed securities. During periods of deteriorating
economic conditions, such as recessions or periods of rising unemployment, delinquencies and losses generally increase, sometimes drastically,
with respect to securitizations involving mortgage loans. The effects of the COVID-19 virus and governmental responses to the effects
of the virus, may result in increased delinquencies and losses and have other, potentially unanticipated, adverse effects on such investments
and the markets for those investments. There are fewer investors in mortgage- and asset-backed securities markets and those investors
are more homogenous than in markets for other kinds of securities. If a number of market participants are impacted by negative economic
conditions, forced selling of mortgage- or asset-backed securities unrelated to fundamental analysis could depress market prices and liquidity
significantly and for a longer period of time than in markets with greater liquidity.
CMOs may be issued
by a U.S. Government agency or instrumentality or by a private issuer. Although payment of the principal of, and interest on, the underlying
collateral securing privately issued CMOs may be guaranteed by the U.S. Government or its agencies or instrumentalities, these CMOs represent
obligations solely of the private issuer and are not insured or guaranteed by the U.S. Government, its agencies or instrumentalities,
or any other person or entity.
CMOs typically issue
multiple classes of securities, having different maturities, interest rates, and payment schedules, and with the principal and interest
on the underlying mortgages allocated among the several classes in various ways. Payment of interest or principal on some classes or series
of CMOs may be subordinated to payments on other classes or series and may be subject to contingencies; or some classes or series may
bear some or all of the risk of default on the underlying mortgages. CMOs of different classes or series are generally retired in sequence
as the underlying mortgage loans in the mortgage pool are repaid. If enough mortgages are repaid ahead of schedule, the classes or series
of a CMO with the earliest maturities generally will be retired prior to their maturities. Thus, the early retirement of particular classes
or series of a CMO would have the same effect as the prepayment of mortgages underlying other mortgage-backed securities. Conversely,
slower than anticipated prepayments can extend the effective maturities of CMOs,
subjecting them to a greater risk of decline in market
value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing their volatility.
Certain classes or series of CMOs may experience high levels of volatility in response to changes in interest rates and other factors.
Stripped mortgage-backed
securities are usually structured with two classes that receive payments of interest or principal on a pool of mortgage loans. Stripped
mortgage-backed securities may experience very high levels of volatility in response to changes in interest rates. The yield to maturity
on an interest only or “IO” class of stripped mortgage-backed securities is extremely sensitive not only to changes in prevailing
interest rates but also to the rate of principal payments (including prepayments) on the underlying assets. A rapid rate of principal
prepayments will typically result in a substantial decline in the value of IOs and may have a significant adverse effect on a Fund’s
yield to maturity to the extent it invests in IOs. If the assets underlying the IO experience greater than anticipated prepayments of
principal, the Fund may fail to recoup fully, or at all, its initial investment in these securities. Conversely, principal only securities
or “POs” tend to increase in value if prepayments are greater than anticipated and decline if prepayments are slower than
anticipated.
The secondary market
for stripped mortgage-backed securities may be more volatile and less liquid than that for other mortgage-backed securities, potentially
limiting a Fund’s ability to buy or sell those securities at any particular time.
Subprime mortgage loans,
which typically are made to less creditworthy borrowers, have a higher risk of default than conventional mortgage loans. Therefore, mortgage-backed
securities backed by subprime mortgage loans may suffer significantly greater declines in value due to defaults, and may experience high
levels of volatility.
A Fund may invest in
collateralized debt obligations (“CDOs”), including collateralized bond obligations (“CBOs”), collateralized
loan obligations (“CLOs”), and other similarly structured securities. CBOs, CLOs, and other CDOs are types of asset-backed
securities. A CBO is typically an obligation of a trust backed (or collateralized) by a pool of securities, often including high risk,
below investment grade debt securities. The collateral may include many different types of debt 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 typically an obligation of a trust backed (or 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 types of CDOs may include, by way of example, obligations of trusts backed
by other types of assets representing obligations of various types, and may include high risk, below investment grade debt obligations.
CBOs, CLOs, and other CDOs may pay management fees and administrative expenses. The risk profile of an investment in a CBO, CLO, or other
CDO depends largely on the type of the collateral securities and the class of the instrument in which a Fund invests.
For CBOs, CLOs, and
other CDOs, the cash flows from the trust are split into two or more portions, called tranches, varying in risk and yield. The riskiest
portion is the “equity” tranche which typically bears the effects of defaults from the bonds or loans in the trust in the
first instance and may serve to protect other, senior tranches from defaults. Typically, the more senior the tranche in a CBO, CLO, or
other CDO, the higher its rating, although senior tranches can experience substantial losses due to actual defaults. The market values
of CBO, CLO, and CDO obligations may be affected by a number of factors, including, among others, changes in interest rates, defaults
affecting junior tranches, market anticipation of defaults, and general market aversion to CBO, CLO, or other CDO securities as a class,
or to the collateral backing them.
CBOs, CLOs, and other
CDOs may be illiquid. In addition to the risks associated with debt securities discussed elsewhere in this SAI and the Funds’ Prospectus
(e.g., interest rate risk and the risk of default), CBOs, CLOs, and other CDOs carry additional risks including, but not limited to: (i) the
possibility that distributions from collateral securities will not be adequate to make interest or other payments on a CBO’s, CLO’s,
or other CDO’s obligations; (ii) the collateral may decline in value or be in default; (iii) the risk that Funds may
invest in tranches of CBOs, CLOs, or other CDOs that are subordinate to other classes; and (iv) the complex structure of the
security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results.
Some of the loans
in which a Fund may invest or to which a Fund may gain exposure through its investments in CDOs, CLOs, or other types of structured securities
may be covenant-lite loans, which contain fewer or less restrictive constraints on the borrower than certain other types of loans. Covenant-lite
loans generally do not include terms that allow the lender to monitor the performance of the borrower and declare a default or force a
borrower into bankruptcy restructuring if certain criteria are breached. Under such loans, lenders typically must rely on covenants that
restrict a company from incurring additional debt or engaging in certain actions. Such covenants can only be breached by an affirmative
action of the borrower, rather than by a deterioration in the borrower’s financial condition. Accordingly, a Fund may have fewer
rights against a borrower when it invests in or has exposure to such loans and, accordingly, may have a greater risk of loss on such investments
as compared to investments in or exposure to loans with additional or more conventional covenants.
Other Income-Producing
Securities
Other types of income-producing
securities the Funds may purchase, include, but are not limited to, the following:
•
Variable
and floating rate obligations. Variable and floating rate securities are debt instruments that
provide for periodic adjustments in the interest rate paid on the security and, under certain limited circumstances, may have varying
principal amounts. Variable rate securities provide for a specified periodic adjustment in the interest rate, while floating rate securities
have interest rates that may change with change to the level of prevailing interest rates or the issuer’s credit quality. These
types of securities are relatively long-term instruments that often carry demand features permitting the holder to demand payment of principal
at any time or at specified intervals prior to maturity. There is a risk that the current interest rate on variable and floating securities
may not accurately reflect current market interest rates or adequately compensate the holder for the current creditworthiness of the issuer.
Due to their variable- or floating-rate features, these instruments will generally pay higher levels of income in a rising interest rate
environment and lower levels of income as interest rates decline. For the same reason, the market value of a variable- or floating-rate
instrument is generally expected to have less sensitivity to fluctuations in market interest rates than a fixed-rate instrument, although
the value of a floating-rate instrument may nonetheless decline as interest rates rise and due to other factors, such as changes in credit
quality. Some variable or floating rate securities are structured with liquidity features such as (1) put options or tender options
that permit holders (sometimes subject to conditions) to demand payment of the unpaid principal balance plus accrued interest from the
issuers or certain financial intermediaries or (2) auction rate features, remarketing provisions, or other maturity-shortening devices
designed to enable the issuer to refinance or redeem outstanding debt securities (market-dependent liquidity features). The market-dependent
liquidity features may not operate as intended as a result of the issuer’s declining creditworthiness, adverse market conditions,
or other factors or the inability or unwillingness of a participating broker-dealer to make a secondary market for such securities. As
a result, variable- or floating-rate securities that include market-dependent liquidity features may lose value and the holders of such
securities may be required to retain them for an extended period of time or until maturity.
In order to use these
investments most effectively, a Fund’s investment adviser or subadviser must correctly assess probable movements in interest rates.
This involves different skills than those used to select most portfolio securities. If the investment adviser or subadviser incorrectly
forecasts such movements, a Fund could be adversely affected by the use of variable or floating rate obligations.
Many financial instruments
use or may use a floating rate based on the London Interbank Offered Rate (“LIBOR”), which is the offered rate for short-term
Eurodollar deposits between major international banks. On July 27, 2017, the head of the United Kingdom’s Financial Conduct
Authority (the “FCA”) announced a desire to phase out the use of LIBOR by the end of 2021, and it is expected that LIBOR
will cease to be published after that time. The FCA and LIBOR’s administrator, ICE Benchmark Administration, have also announced
that most LIBOR settings will no longer be published after the end of 2021 and a majority of U.S. dollar LIBOR settings
will no longer be published after June 30,
2023. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies. A Fund
may have investments linked to other interbank offered rates which may also cease to be published, such as the Euro Overnight Index Average
which will cease to be published at the end of 2021. Various financial industry groups have been planning for transition away from LIBOR,
but there are obstacles to converting certain securities and transactions to new reference rates. Markets are developing but questions
around liquidity in these rates and how to appropriately adjust these rates to mitigate any economic value transfer at the time of transition
remain a significant concern. It is difficult to predict the full impact of the transition away from LIBOR on a Fund. The transition process
might lead to increased volatility and illiquidity in markets that currently rely on LIBOR to determine interest rates. It could also
lead to a reduction in the value of some LIBOR-based investments and reduce the effectiveness of new hedges placed against existing LIBOR-based
instruments. Since the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior
to the cessation of LIBOR.
•
Standby
commitments. These instruments, which are similar to a put, give a Fund the option to obligate
a broker, dealer, or bank to repurchase a security held by the Fund at a specified price.
•
Tender
option bonds. Tender option bonds are relatively long-term bonds that are coupled with the
agreement of a third party, such as a broker, dealer, or bank, to grant the holders of such securities the option to tender the securities
to the institution at periodic intervals.
•
Inverse
floaters. Inverse floaters have variable interest rates that typically move in the opposite
direction from movements in prevailing interest rates, most often short-term rates. Accordingly, the value of inverse floaters, or other
obligations or certificates structured to have similar features, generally moves in the opposite direction from interest rates. The value
of an inverse floater can be considerably more volatile than the value of other debt instruments of comparable maturity and credit quality.
Inverse floaters incorporate varying degrees of leverage. Generally, greater leverage results in greater price volatility for any given
change in interest rates. Inverse floaters may be subject to legal or contractual restrictions on resale and therefore may be less liquid
than other types of securities. Similar to variable and floating rate obligations, effective use of inverse floaters requires skills different
from those needed to select most portfolio securities. If movements in interest rates are incorrectly anticipated, a Fund could lose money
or the NAV of its shares could decline by the use of inverse floaters.
•
Strip
bonds. Strip bonds are debt securities that are stripped of their interest, usually by a financial
intermediary, after the securities are issued. The market value of these securities generally fluctuates more in response to changes in
interest rates than interest-paying securities of comparable maturities.
Standby commitments,
tender option bonds, and instruments with demand features are primarily used by the Funds for the purpose of increasing the liquidity
of a Fund’s portfolio.
Other Investment Companies
A Fund may invest in
securities of other open- or closed-end investment companies, including exchange-traded funds (“ETFs”), traded on one or
more national securities exchanges, as well as private investment vehicles. Provisions of the 1940 Act may limit the ability of a Fund
to invest in certain registered investment companies or private investment vehicles or may limit the amount of its assets that a Fund
may invest in any investment vehicle.
A Fund may, for example,
invest in other open- or closed-end investment companies, including ETFs, during periods when it has large amounts of uninvested cash,
when its investment adviser or subadviser believes share prices of other investment companies offer attractive values, or to gain or maintain
exposure to various asset classes and markets or types of strategies and investments. A Fund may invest in shares of another registered
investment company or private investment vehicle in order to gain indirect exposure to markets in a country where the Fund is not able
to invest freely, or to gain indirect exposure to one or more issuers whose securities it may not buy directly. As a shareholder in an
investment vehicle, a Fund would bear its ratable share of that vehicle’s expenses and would remain subject to payment of the Fund’s
management fees with respect to assets so invested. Shareholders
would therefore be subject to duplicative expenses to the extent a Fund invests in other investment vehicles. Shares of registered open-end
investment companies traded on a securities exchange may not be redeemable by a Fund in all cases. Private investment vehicles in which
a Fund may invest are not registered under the 1940 Act, and so will not offer all of the protections provided by the 1940 Act (including,
among other things, independent oversight, protections against certain conflicts of interest, and custodial risks).
If
a Fund invests in another investment vehicle, it is exposed to the risk that the other investment vehicle will not perform as expected.
A Fund is exposed indirectly to all of the risks applicable to an investment in such other investment vehicle. In addition, lack of liquidity
in the other investment vehicle could result in its value being more volatile than the underlying portfolio of securities, and may limit
the ability of a Fund to sell or redeem its interest in the investment vehicle at a time or at a price it might consider desirable. A
Fund may not be able to redeem its interest in private investment vehicles except at certain designated times. The investment policies
and limitations of the other registered investment company or private investment vehicle may not be the same as those of the investing
Fund; as a result, the Fund may be subject to additional or different risks, or may achieve a reduced investment return, as a result of
its investment in another investment vehicle. If the other investment company is an ETF or other product traded on a securities exchange
or otherwise actively traded, its shares may trade at a premium or discount to their NAV, an effect that might be more pronounced in less
liquid markets. ETFs are also subject to additional risks, including, among others, the risk that the market price of an ETF’s
shares may trade above or below its NAV, the risk that an active trading market for an ETF’s shares may not develop or be maintained,
the risk that trading of an ETF’s shares may be halted, and the risk that the ETF’s shares may be delisted from the listing
exchange. Unlike shares of a mutual fund, which can be bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of an ETF may be purchased or redeemed directly from the ETF solely by Authorized Participants (“APs”) and
only in aggregations of a specified number of shares (“Creation Units”). ETFs may have a limited number of financial institutions
that act as APs. To the extent that those APs exit the business, or are unable to or choose not to process creation and/or redemption
orders for Creation Units, and no other AP steps forward to create and redeem ETF shares, the ETF’s shares may be more likely to
trade at a premium or discount to NAV and possibly face trading halts or delisting.
A Fund’s investment
adviser or subadviser or their affiliates may serve as investment adviser to a registered investment company or private investment vehicle
in which the Fund may invest, leading to conflicts of interest. For example, a Fund’s investment adviser or subadviser may receive
fees based on the amount of assets invested in the other investment vehicle. Investment by a Fund in another registered investment company
or private investment vehicle will typically be beneficial to its investment adviser or subadviser in the management of the other investment
vehicle, by helping to achieve economies of scale or enhancing cash flows. Due to this and other factors, a Fund’s investment adviser
or subadviser will have an incentive to invest the Fund’s assets in an investment vehicle sponsored or managed by it or its affiliates
in lieu of investments by the Fund directly in portfolio securities, and will have an incentive to invest in such an investment vehicle
over a non-affiliated investment vehicle. The investment adviser or subadviser will have no obligation to select the least expensive or
best performing investment companies available to serve as an underlying investment vehicle. Similarly, a Fund’s investment adviser
or subadviser will have an incentive to delay or decide against the sale of interests held by the Fund in an investment company sponsored
or managed by it or its affiliates. It is possible that other clients of a Fund’s investment adviser or subadviser or its affiliates
will purchase or sell interests in an investment company sponsored or managed by it at prices and at times more favorable than those at
which the Fund does so.
In October 2020,
the SEC adopted certain regulatory changes and took other actions related to the ability of an investment company to invest in the securities
of another investment company. These changes include, among other things, the rescission of certain SEC exemptive orders permitting investments
in excess of the statutory limits and the withdrawal of certain related SEC staff no-action letters, and the adoption of Rule 12d1-4
under the 1940 Act. Rule 12d1-4, which became effective on January 19, 2021, will permit the Funds to invest in other investment
companies beyond the statutory limits, subject to certain conditions. The rescission of the applicable exemptive orders and the withdrawal
of the applicable no-action letters became effective on January 19, 2022. The impact of these regulatory changes on the Funds is
still uncertain.
Partly Paid Securities
These securities are
paid for on an installment basis. A partly paid security trades net of outstanding installment payments—the buyer “takes
over payments.” The buyer’s rights are typically restricted until the security is fully paid. If the value of a partly paid
security declines before a Fund finishes paying for it, the Fund will still owe the payments, but may find it hard to sell and as a result
will incur a loss.
Portfolio Management
A Fund’s investment
adviser or subadviser uses trading as a means of managing the portfolio of the Fund in seeking to achieve its investment objective. Transactions
will occur when a Fund’s investment adviser or subadviser believes that the trade, net of transaction costs, will improve interest
income or capital appreciation potential, or will lessen capital loss potential. Whether the goals discussed above will be achieved through
trading depends on the Fund’s investment adviser’s or subadviser’s ability to evaluate particular securities and
anticipate relevant market factors, including interest rate trends and variations from such trends. If such evaluations and expectations
prove to be incorrect, a Fund’s income or capital appreciation may be reduced and its capital losses may be increased. In addition,
high turnover in a Fund could result in additional brokerage commissions to be paid by that Fund. See also “Taxation” below.
The Funds may pay brokerage
commissions to affiliates of one or more affiliates of the Funds’ investment adviser or subadvisers.
Portfolio Turnover
Portfolio turnover
involves brokerage commissions and other transaction costs, which the relevant Fund will bear directly, and could involve realization
of taxable capital gains. To the extent that portfolio turnover results in realization of net short-term capital gains, such gains ordinarily
are treated as ordinary income when distributed to shareholders. Portfolio turnover rates are shown in the “Fees and Expenses of
the Fund” and “Financial Highlights” sections of the Prospectus. See the “Taxation” and “Portfolio
Transactions and Brokerage” sections in this SAI for additional information.
Real Estate-Related
Investments; Real Estate Investment Trusts
Factors affecting the
performance of real estate may include excess supply of real property in certain markets, changes in zoning laws, environmental regulations
and other governmental action, completion of construction, changes in real estate value and property taxes, losses from casualty, condemnation,
or natural disaster, sufficient level of occupancy, adequate rent to cover operating expenses, and local and regional markets for competing
assets. The performance of real estate may also be affected by changes in interest rates, prudent management of insurance risks, and social
and economic trends.
Real estate investment
trusts (“REITs”) that may be purchased by a Fund include equity REITs, which own real estate directly, mortgage REITs, which
make construction, development, or long-term mortgage loans, and hybrid REITs, which share characteristics of equity REITs and mortgage
REITs. Equity REITs will be affected by, among other things, changes in the value of the underlying property owned by the REITs, while
mortgage REITs will be affected by, among other things, the value of the properties to which they have extended credit. REITs are dependent
upon the skill of each REIT’s management.
A Fund could, under
certain circumstances, own real estate directly as a result of a default on debt securities it owns or from an in-kind distribution of
real estate from a REIT. Risks associated with such ownership could include potential liabilities under environmental laws and the costs
of other regulatory compliance. If a Fund has rental income or income from the direct disposition of real property, the receipt of such
income may adversely affect its ability to retain its tax status as a regulated investment company and thus its ability to avoid taxation
on its income and gains distributed to its shareholders. REITs are also subject to substantial cash flow dependency, defaults by borrowers,
self-liquidation, and the risk of failing to qualify for favorable tax treatment under the Code and/or to maintain exempt status under
the 1940 Act. If a Fund invests in REITs, investors would bear not only a proportionate share of the expenses of that Fund, but also,
indirectly, expenses of the REITs.
Repurchase Agreements
A repurchase agreement
is a contract under which a Fund acquires a security for a relatively short period (usually not more than one week) subject to the obligation
of the seller to repurchase and the Fund to resell such security at a fixed time and price (representing the Fund’s cost plus interest).
Repurchase agreements may also be viewed as loans made by a Fund which are collateralized by the securities subject to repurchase. The
investment adviser or subadviser will monitor such transactions to ensure that the value of the underlying securities will be at least
equal at all times to the total amount of the repurchase obligation, including the interest factor. If the seller defaults, a Fund could
realize a loss on the sale of the underlying security to the extent that the proceeds of the sale including accrued interest are less
than the resale price provided in the agreement including interest. In addition, if the seller should be involved in bankruptcy or insolvency
proceedings, the Fund may incur delay and costs in selling the underlying security or may suffer a loss of principal and interest if the
Fund is treated as an unsecured creditor and required to return the underlying collateral to the seller’s estate. There is no limit
on the Funds’ investment in repurchase agreements.
Restricted Securities
Restricted securities
are subject to legal restrictions on their sale. Difficulty in selling securities may result in a loss or be costly to a Fund. Restricted
securities generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the 1933 Act,
or in a registered public offering. Where registration is required, the holder of a registered security may be obligated to pay all or
part of the registration expense and a considerable period may elapse between the time it decides to seek registration and the time it
may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were
to develop, the holder might obtain a less favorable price than prevailed when it decided to seek registration of the security.
Reverse Repurchase
Agreements and Treasury Rolls
A
Fund may enter into reverse repurchase agreements or Treasury rolls with banks and broker-dealers to enhance return. Reverse repurchase
agreements involve sales by a Fund of portfolio securities concurrently with an agreement by the Fund to repurchase the same securities
at a later date at a fixed price (typically equal to the original sale price plus interest). During the reverse repurchase agreement period,
the Fund continues to receive principal and interest payments on the securities and also has the opportunity to earn a return on the purchase
price received by it from the counterparty. Similarly, in a Treasury roll transaction, a Fund sells a Treasury security and simultaneously
enters into an agreement to repurchase the security from the buyer at a later date, at the original sale price plus interest. The repurchase
price is typically adjusted to provide the Fund the economic benefit of any interest that accrued on the Treasury security during the
term of the transaction. The Fund may use the purchase price received by it to earn additional return during the term of the Treasury
roll transaction. Reverse repurchase agreements and Treasury rolls are similar to a secured borrowing of a Fund and generally create investment
leverage. A Fund might lose money both on the security subject to the reverse repurchase agreement and on the investments it makes with
the proceeds of the reverse repurchase agreement. If the counterparty in such a transaction files for bankruptcy or becomes insolvent,
a Fund’s use of the proceeds from the sale of its securities may be restricted or forfeited, and the counterparty may fail to return/resell
the securities in question to the Fund. A Fund may enter into reverse repurchase agreements or Treasury rolls without limit up to the
amount permitted under applicable law. A Fund’s ability to enter into reverse repurchase agreements may be impacted as the Fund
comes into compliance with Rule 18f-4 under the 1940 Act.
Securities Lending
A Fund may lend its
portfolio securities. The Fund expects that, in connection with any securities loan: (1) the loan will be secured continuously by
collateral consisting of U.S. Government securities, cash, or cash equivalents adjusted daily to have market value at least equal to the
current market value of the securities loaned; (2) the Fund will have the right at any time on reasonable notice to call the loan
and regain the securities loaned; (3) the Fund will receive an amount equal to any interest or dividends paid on the loaned securities;
and (4) the aggregate market value of securities the Fund has loaned will not at any
time exceed one-third (or such other lower limit as the
Board may establish) of the total assets of the Fund. The risks in lending portfolio securities, as with other extensions of credit, include
a possible delay in recovering the loaned securities or a possible loss of rights in the collateral should the borrower fail financially.
Regulations adopted by global prudential regulators that are now in effect require certain bank-regulated counterparties and certain of
their affiliates to include in certain financial contracts, including many securities lending agreements, terms that delay or restrict
the rights of counterparties, such as the Funds, to terminate such agreements, foreclose upon collateral, exercise other default rights,
or restrict transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain types of resolution
or insolvency proceedings. It is possible that these new requirements, as well as potential additional government regulation and other
developments in the market, could adversely affect a Fund’s ability to terminate existing securities lending agreements or to realize
amounts to be received under such agreements. Voting rights or rights to consent with respect to the loaned securities pass to the borrower,
although a Fund would retain the right to call the loans at any time on reasonable notice, and may do so in order that the securities
may be voted in an appropriate case.
A Fund’s securities
loans will be made by a third-party agent appointed by the Fund, although the agent is only permitted to make loans to borrowers previously
approved by the Fund’s Board. Any cash collateral securing a loan of securities by a Fund will typically be invested by the agent.
The investment of the collateral will be at the risk and for the account of the Fund. The earnings on the investment of collateral will
be split between the Fund and the agent; as a result, the agent may have an incentive to invest the collateral in riskier investments
than if it were not to share in the earnings. It is possible that any loss on the investment of collateral for a securities loan will
exceed (potentially by a substantial amount) the Fund’s earnings on the loan.
Short Sales
A short sale is a transaction
in which a fund sells a security it does not own in anticipation that the market price of that security will decline. When a fund makes
a short sale on a security, it must borrow the security sold short and deliver it to a broker dealer through which it made the short sale
as collateral for its obligation to deliver the security upon the conclusion of the sale. A fund may have to pay a fee to borrow particular
securities and is often obligated to pay over any accrued interest and dividends on such borrowed securities. If the price of the security
sold short increases between the time of the short sale and the time a fund replaces the borrowed security, a fund will incur a loss,
which could be unlimited, in cases where a fund is unable for whatever reason to close out its short position; conversely, if the price
declines, a fund will realize a capital gain. Any gain will be decreased, and any loss increased, by the transaction costs described above.
The successful use of short selling may be adversely impacted by imperfect correlation between movements in the price of the security
sold short and the securities being hedged.
Selling short “against-the-box”
refers to the sale of securities actually owned by the seller but held in safekeeping. In such short sales, while the short position is
open, a fund must own an equal amount of such securities, or by virtue of ownership of securities have the right, without payment of further
consideration, to obtain an equal amount of securities sold short. Short sales against-the-box generally produce current recognition of
gain (but not loss) for federal income tax purposes on the constructive sale of securities “in the box” prior to the time
the short position is closed out.
Terrorism, War, Natural
Disasters, and Epidemics
Terrorism, war, and
related geopolitical events (and their aftermath) have led, and in the future may lead, to increased short-term market volatility and
may have adverse long-term effects on U.S. and world economies and markets generally. Likewise, natural and environmental disasters, such
as, for example, earthquakes, fires, floods, hurricanes, tsunamis, and weather-related phenomena generally, as well as widespread epidemics,
can be highly disruptive to economies and markets, adversely affecting individual companies, sectors, industries, markets, currencies,
interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Funds’ investments.
For example, the continuing spread of an infectious respiratory illness caused by the novel strain of coronavirus (known as COVID-19)
has caused volatility, severe market dislocations and liquidity constraints in many markets, and may adversely affect the Funds’
investments and operations. The transmission of COVID-19 and efforts to
contain its spread have resulted in travel restrictions
and disruptions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in
healthcare service preparation and delivery, quarantines, event and service cancellations or interruptions, and disruptions to business
operations (including staff reductions), supply chains, and consumer activity, as well as general concern and uncertainty that has negatively
affected the economic environment.
The COVID-19 virus
has negatively affected, and will likely continue to affect negatively, the global economy, the economies of many countries, and the financial
performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. In addition, actions
taken by governmental and quasi-governmental authorities and regulators throughout the world in response to the COVID-19 outbreak, including
significant fiscal and monetary policy changes, have affected, and likely will continue to affect, the values, volatility, and liquidity
of securities or other assets. The effects of the outbreak in developing or emerging market countries may be greater due to less established
health care systems, financial systems and institutions, and government institutions. The COVID-19 pandemic and its effects, as well as
efforts to contain its spread, have lasted, and will likely continue for an extended period of time, and in each case have resulted in,
and could continue to result in, among other things, significant market volatility, exchange trading suspensions and closures, and higher
default rates, and they may result in future significant adverse effects, such as declines in global financial markets and a substantial
economic downturn or recession. The foregoing could have a significant adverse effect on a Fund’s performance and have the potential
to impair a Fund’s ability to maintain operational standards (such as with respect to satisfying redemption requests), disrupt
the operations of a Fund’s service providers, adversely affect the values and liquidity of a Fund’s investments, and negatively
impact a Fund’s performance and a shareholder’s investment in a Fund. Other infectious illness outbreaks, epidemics or pandemics
that may arise in the future, could adversely affect the economies of many nations or the entire global economy, the financial performance
of individual issuers, borrowers and sectors, and the health of the markets generally in potentially significant and unforeseen ways.
Trade Claims
A Fund may purchase
trade claims and other obligations of, or claims against, companies in bankruptcy proceedings. Trade claims are claims for payment by
vendors and suppliers for products and services previously furnished to the companies in question. Other claims may include, for example,
claims for payment under financial or derivatives obligations. Trade claims may be purchased directly from the creditor or through brokers
or from dealers, and are typically purchased at a significant discount from their face amounts. There is no guarantee that a debtor will
ever be able to satisfy its obligations on such claims. Trade claims are subject to the risks associated with low-quality and distressed
obligations.
Trust Preferred Securities
Trust preferred securities
are typically issued by corporations, generally in the form of interest bearing notes with preferred securities characteristics, or by
an affiliated trust, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. Trust
preferred securities may pay interest at either fixed or adjustable rates. Trust preferred securities may be issued with a final maturity
date, or may be perpetual.
Trust preferred securities
are typically junior and fully subordinated liabilities of an issuer and benefit from a guarantee that is junior and fully subordinated
to the other liabilities of the guarantor. In addition, trust preferred securities typically permit an issuer to defer the payment of
income for five years or more without triggering an event of default. Because of their subordinated position in the capital structure
of an issuer, the ability to defer payments for extended periods of time without default consequences to the issuer, and certain other
features (such as restrictions on common dividend payments by the issuer or ultimate guarantor when full cumulative payments on the trust
preferred securities have not been made), these trust preferred securities are often treated as close substitutes for traditional preferred
securities, both by issuers and investors.
Many trust preferred securities are
issued by trusts or other special purpose entities established by operating companies and are not a direct obligation of an operating
company. At the time the trust or special purpose entity sells such preferred securities to investors, it purchases debt of the operating
company (with terms comparable to those of the trust or special purpose entity securities). The trust or special purpose entity is generally
required to be treated as transparent for Federal income tax purposes, and the holders of the trust preferred securities are treated for
tax purposes as owning beneficial interests in the underlying debt of the operating company. Accordingly, payments on the trust preferred
securities are treated as interest rather than dividends for Federal income tax purposes. The trust or special purpose entity in turn
would be a holder of the operating company’s debt and would typically be subordinated to other classes of the operating company’s
debt.
U.S. Government Securities
The Funds may invest
in U.S. Government securities. These include obligations issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities.
Payment of principal and interest on U.S. Government obligations (i) may be backed by the full faith and credit of the United States
(as with U.S. Treasury obligations and GNMA certificates) or (ii) may be backed solely by the issuing or guaranteeing agency or instrumentality
itself (as with FNMA notes). In the latter case, the investor must look principally to the agency or instrumentality issuing or guaranteeing
the obligation for ultimate repayment and may not be able to assert a claim against the United States if the agency or instrumentality
does not meet its commitment. Such securities may involve increased risk of loss of principal and interest compared to government debt
securities that are backed by the full faith and credit of the United States. Such agency or instrumentality may be privately owned. There
can be no assurance that the U.S. Government would provide financial support to its agencies or instrumentalities where it is not obligated
to do so. U.S. Government securities are subject to interest rate risk, and, in some cases, may be subject to credit risk. Although FHLMC
and FNMA are now under conservatorship by the Federal Housing Finance Agency, and are benefiting from a liquidity backstop of the U.S.
Treasury, no assurance can be given that these initiatives will be successful. As a general matter, the value of debt instruments, including
U.S. Government obligations, declines when market interest rates increase and rises when market interest rates decrease. Certain types
of U.S. Government obligations are subject to fluctuations in yield or value due to their structure or contract terms.
Utility Industries
Risks that are intrinsic
to the utility industries include difficulty in obtaining an adequate return on invested capital, difficulty in financing large construction
programs during an inflationary period, restrictions on operations and increased cost and delays attributable to environmental considerations
and regulation, difficulty in raising capital in adequate amounts on reasonable terms in periods of high inflation and unsettled capital
markets, technological innovations that may render existing plants, equipment, or products obsolete, the potential impact of natural or
man-made disasters, increased costs and reduced availability of certain types of fuel, occasionally reduced availability and high costs
of natural gas for resale, the effects of energy conservation, the effects of a national energy policy and lengthy delays and greatly
increased costs and other problems associated with the design, construction, licensing, regulation, and operation of nuclear facilities
for electric generation, including, among other considerations, the problems associated with the use of radioactive materials and the
disposal of radioactive wastes. There are substantial differences among the regulatory practices and policies of various jurisdictions,
and any given regulatory agency may make major shifts in policy from time to time. There is no assurance that regulatory authorities will,
in the future, grant rate increases or that such increases will be adequate to permit the payment of dividends on common stocks issued
by a utility company. Additionally, existing and possible future regulatory legislation may make it even more difficult for utilities
to obtain adequate relief. Certain of the issuers of securities held in the Fund’s portfolio may own or operate nuclear generating
facilities. Governmental authorities may from time to time review existing policies and impose additional requirements governing the licensing,
construction and operation of nuclear power plants. Prolonged changes in climatic conditions can also have a significant impact on both
the revenues of an electric and gas utility as well as the expenses of a utility, particularly a hydro-based electric utility.
Utility companies in the United States
and in foreign countries are generally subject to regulation. In the United States, most utility companies are regulated by state and/or
federal authorities. Such regulation is intended to ensure appropriate standards of service and adequate capacity to meet public demand.
Generally, prices are also regulated in the United States and in foreign countries with the intention of protecting the public while ensuring
that the rate of return earned by utility companies is sufficient to allow them to attract capital in order to grow and continue to provide
appropriate services. There can be no assurance that such pricing policies or rates of return will continue in the future.
The nature of regulation
of the utility industries continues to evolve both in the United States and in foreign countries. In recent years, changes in regulation
in the United States increasingly have allowed utility companies to provide services and products outside their traditional geographic
areas and lines of business, creating new areas of competition within the industries. In some instances, utility companies are operating
on an unregulated basis. Because of trends toward deregulation and the evolution of independent power producers as well as new entrants
to the field of telecommunications, non-regulated providers of utility services have become a significant part of their respective industries.
The investment adviser or subadviser believes that the emergence of competition and deregulation will result in certain utility companies
being able to earn more than their traditional regulated rates of return, while others may be forced to defend their core business from
increased competition and may be less profitable. Reduced profitability, as well as new uses of funds (such as for expansion, operations,
or stock buybacks) could result in cuts in dividend payout rates. The investment adviser or subadviser seeks to take advantage of favorable
investment opportunities that may arise from these structural changes. Of course, there can be no assurance that favorable developments
will occur in the future.
Foreign utility
companies are also subject to regulation, although such regulations may or may not be comparable to those in the United States. Foreign
utility companies may be more heavily regulated by their respective governments than utilities in the United States and, as in the United
States, generally are required to seek government approval for rate increases. In addition, many foreign utilities use fuels that may
cause more pollution than those used in the United States, which may require such utilities to invest in pollution control equipment to
meet any proposed pollution restrictions. Foreign regulatory systems vary from country to country and may evolve in ways different from
regulation in the United States.
A Fund’s
investment policies are designed to enable it to capitalize on evolving investment opportunities throughout the world. For example, the
rapid growth of certain foreign economies will necessitate expansion of capacity in the utility industries in those countries. Although
many foreign utility companies currently are government-owned, thereby limiting current investment opportunities for a Fund, the investment
adviser or subadviser believes that, in order to attract significant capital for growth, foreign governments are likely to seek global
investors through the privatization of their utility industries. Privatization, which refers to the trend toward investor ownership of
assets rather than government ownership, is expected to occur in newer, faster-growing economies and in mature economies. Of course, there
is no assurance that such favorable developments will occur or that investment opportunities in foreign markets will increase.
The revenues of
domestic and foreign utility companies generally reflect the economic growth and development in the geographic areas in which they do
business. The investment adviser or subadviser will take into account anticipated economic growth rates and other economic developments
when selecting securities of utility companies.
Zero-Coupon, Step
Coupon and Pay-In-Kind Securities
Other debt securities
in which the Funds may invest include zero coupon, step coupon, and pay-in-kind instruments. Zero coupon bonds are issued and traded at
a discount from their face value. They do not entitle the holder to any periodic payment of interest prior to maturity. Step coupon bonds
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. The discount from the face amount or par value depends on the time remaining until cash payments begin,
prevailing interest rates, liquidity of the security, and the perceived credit quality of the issue. Pay-in-kind securities are debt or
preferred stock securities that require or permit payment of interest in the form of additional securities. Payment-in-kind securities
allow the issuer to avoid or delay the need to generate cash to meet current interest payments and, as a result, may involve greater risk
than securities that pay interest currently or in cash.
Current federal income tax law requires
holders of zero coupon and step coupon securities to report the portion of the original issue discount on such securities that accrues
during a given year as interest income, even though holders receive no cash payments of interest during the year. In order to qualify
as a regulated investment company under the Code, a Fund must distribute its investment company taxable income, including the original
issue discount accrued on zero coupon or step coupon bonds. Because a Fund will not receive cash payments on a current basis in respect
of accrued original issue discount on zero coupon or step coupon bonds during the period before interest payments begin, and may not receive
cash payments on payment-in-kind securities until maturity or redemption, in some years that Fund may have to distribute cash obtained
from other sources in order to satisfy the distribution requirements under the Code. A Fund might obtain such cash from selling other
portfolio holdings which might cause a Fund to incur capital gains or losses on the sale. Additionally, these actions are likely to reduce
the assets to which Fund expenses could be allocated and to reduce the rate of return for a Fund. In some circumstances, such sales might
be necessary in order to satisfy cash distribution requirements even though investment considerations might otherwise make it undesirable
for a Fund to sell the securities at the time.
Generally, the market
prices of zero coupon, step coupon, and pay-in-kind securities are more volatile than the prices of securities that pay interest periodically
and in cash and are likely to respond to changes in interest rates to a greater degree than other types of debt securities.
DISCLOSURE OF PORTFOLIO
HOLDINGS
The Trustees of the
Funds, including a majority of Trustees who are not “interested persons” of the Funds (as defined in the 1940 Act), have
adopted policies and procedures with respect to the disclosure of the Funds’ portfolio holdings. These policies and procedures
generally provide that no disclosure of portfolio holdings information may be made unless publicly disclosed as described below or made
as part of the daily investment activities of the Funds to the Funds’ investment adviser, subadviser(s), as applicable, or any
of their affiliates who provide services to the Funds, which by explicit agreement or by virtue of their respective duties to the Funds,
are required to maintain confidentiality of the information disclosed. Certain limited exceptions pursuant to the Funds’ policies
and procedures are described below. The Funds’ portfolio holdings information may not be disseminated for compensation. Any exceptions
to the Funds’ policies and procedures may be made only if approved in writing by the Funds’ Principal Executive Officer
and the Funds’ Chief Compliance Officer as being in the best interests of the relevant Fund, and then only if the recipients are
subject to a written confidentiality agreement specifying that the relevant Fund’s portfolio holdings information is the confidential
property of the Fund and may not be used for any purpose except in connection with the provision of services to the Fund and, in particular,
that such information may not be traded upon. Any such exceptions must be reported to the Funds’ Board at its next regularly scheduled
meeting. It was determined that these policies and procedures are reasonably designed to ensure that disclosure of portfolio holdings
information is in the best interests of a Fund’s shareholders and appropriately address the potential for conflicts between the
interests of a Fund’s shareholders, on the one hand, and those of MML Advisers or any affiliated person of the Fund or MML Advisers
on the other.
Acting pursuant to
the policies and procedures adopted by the Trustees of the Funds, the Funds’ investment adviser and subadviser(s), as applicable,
are primarily responsible for compliance with these policies and procedures, which includes maintaining such internal informational barriers
(e.g., “Chinese walls”) as each believes are reasonably necessary for preventing the unauthorized disclosure of portfolio
holdings information. Pursuant to Rule 38a-1 under the 1940 Act, the Trustees will periodically (as needed, but at least annually)
receive reports from the Funds’ Chief Compliance Officer regarding the operation of these policies and procedures, including a
confirmation by the Chief Compliance Officer that the investment adviser’s and the subadviser(‘s/s’), as applicable,
policies, procedures, and/or processes are reasonably designed to comply with the Funds’ policies and procedures in this regard.
Public Disclosures
The Funds’ portfolio
holdings are currently disclosed to the public through required filings with the SEC and as described below. The Funds file their portfolio
holdings with the SEC as of the end of the second and fourth quarters of the Funds’ fiscal year on Form N-CSR (with respect to
each semiannual period and annual period) no later than 70 days after the end of the applicable quarter. In addition, monthly reports
of all of the Funds’ portfolio holdings are filed quarterly with the SEC on Form N-PORT no later than 60 days after the end
of each quarter of the Funds’ fiscal year, and the monthly report for the third month of each quarter will be made publicly available
by the SEC upon filing. Shareholders may obtain the Funds’ Form N-CSR and N-PORT filings on the SEC’s website at http://www.sec.gov.
In addition, the Funds’ annual and semiannual reports and complete schedule of portfolio holdings from their filings on Form N-PORT
for the first and third quarters of each fiscal year are made available to shareholders at https://www.massmutual.com/funds after the
end of the applicable quarter. The Funds’ annual and semiannual reports are also mailed to shareholders after the end of the applicable
quarter.
The Funds’ most
recent portfolio holdings as of the end of each quarter are available on https://www.massmutual.com/funds no earlier than 15 calendar
days after the end of each quarter. Because such information is updated quarterly, it will generally be available for viewing for approximately
three months after the posting.
A Fund’s portfolio
holdings may also be made available on https://www.massmutual.com/funds at other times as approved in writing by the Funds’ Principal
Executive Officer and the Funds’ Chief Compliance Officer as being in the best interests of the relevant Fund.
Other Disclosures
Acting pursuant to
the policies and procedures adopted by the Trustees of the Funds, and to the extent permitted under the 1933 and 1940 Acts, the Funds,
the Funds’ investment adviser, and the Funds’ subadviser(s), as applicable, may distribute (or authorize the Funds’
custodian to distribute) information regarding the Funds’ portfolio holdings more frequently than as provided to the public on
a confidential basis to various service providers and others who require such information in order to fulfill their contractual duties
with respect to the routine investment activities or operations of the Funds. Such service providers or others must, by explicit agreement
or by virtue of their respective duties to the Funds, be required to maintain confidentiality of the information disclosed. These service
providers include, but are not limited to, the Funds’ custodian (State Street Bank and Trust Company (“State Street”)),
the Funds’ sub-administrators (State Street and MassMutual), the Funds’ independent registered public accounting firm (Deloitte
& Touche LLP), filing agents, legal counsel (Ropes & Gray LLP), financial printer (Toppan Merrill, LLC), any portfolio liquidity
classification vendor, any proxy voting service employed by the Funds, MML Advisers or any of the Funds’ subadviser(s), as applicable,
providers of portfolio analysis tools, any pricing services employed by the Funds, and any providers of transition management services.
The Funds or the Funds’ investment adviser may also periodically provide non-public information about their portfolio holdings
to rating and ranking organizations, such as Lipper Inc. and Morningstar Inc., in connection with those firms’ research on and
classification of the Funds and in order to gather information about how the Funds’ attributes (such as volatility, turnover, and
expenses) compared with those of peer funds.
The Funds, the Funds’
investment adviser, or the Funds’ subadviser(s), as applicable, may distribute (or authorize the Funds’ custodian to
distribute) information regarding the Funds’ portfolio holdings more frequently than as provided to the public on a confidential
basis to various service providers and others who require such information in order to fulfill non-routine legitimate business activities
related to the management, investment activities, or operations of the Funds. Such disclosures may be made only if (i) the recipients
of such information are subject to a written confidentiality agreement specifying that the Funds’ portfolio holdings information
is the confidential property of the Funds and may not be used for any purpose except in connection with the provision of services to the
Funds and, in particular, that such information may not be traded upon; and (ii) if the Funds’ Chief Compliance Officer (or
a person designated by the Chief Compliance Officer) determines that, under the circumstances, disclosure is in the best interests of
the relevant Fund’s shareholders. The information distributed is limited to the information that the Funds, MML Advisers, or the
relevant subadviser(s), as applicable, believes is reasonably necessary in connection with the services provided by the recipient receiving
the information.
INVESTMENT RESTRICTIONS
OF THE FUNDS
FUNDAMENTAL
INVESTMENT RESTRICTIONS OF THE FUNDS
The following is a
description of certain fundamental restrictions on investments of the Funds which may not be changed without a vote of a majority of the
outstanding shares of the applicable Fund. Investment restrictions that appear below or elsewhere in this SAI and in the Prospectus which
involve a maximum percentage of securities or assets shall not be considered violated unless an excess over the percentage occurs
immediately after, and is caused by, an acquisition or encumbrance of securities or assets of, or borrowings by or on behalf of, a Fund.
Each Fund may not:
(1)
purchase securities (other than securities issued, guaranteed or sponsored by the U.S. Government or its agencies or instrumentalities
or securities issued by investment companies) of any one issuer if, as a result, more than 5% of a Fund’s total assets would be
invested in the securities of such issuer or the Fund would own more than 10% of the outstanding voting securities of such issuer, except
that up to 25% of the Fund’s total assets may be invested without regard to these limitations.
(2)
purchase commodities or commodity contracts, except that a Fund may enter into futures contracts, options, options on futures, and other
financial or commodity transactions to the extent consistent with applicable law and the Fund’s Prospectus and SAI at the time.
(3)
purchase or sell real estate, except that it may dispose of real estate acquired as a result of the ownership of securities or other instruments.
(This restriction does not prohibit a Fund from investing in securities or other instruments backed by real estate or in securities of
companies engaged in the real estate business.)
(4)
participate in the underwriting of securities, except to the extent that a Fund may be deemed an underwriter under federal securities
laws by reason of acquisitions or distributions of portfolio securities (e.g., investments in restricted securities and instruments subject
to such limits as imposed by the Board and/or law).
(5)
make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder (as such statute, rules or regulations
may be amended from time to time) or by guidance regarding or interpretations of, or exemptive orders under, the 1940 Act or the rules
or regulations thereunder published by appropriate regulatory authorities.
(6)
borrow money or issue senior securities, except to the extent permitted by the 1940 Act, the rules and regulations thereunder (as such
statute, rules or regulations may be amended from time to time) or by guidance regarding or interpretations of, or exemptive orders under,
the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities.
(7)
concentrate its investments in any one industry, as determined by the Board, and in this connection a Fund will not acquire securities
of companies in any one industry if, immediately after giving effect to any such acquisition, 25% or more of the value of the total assets
of the Fund would be invested in such industry, with the following exceptions:
(a)
There is no limitation for securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities.
(b) There is no limitation
for securities issued by other investment companies.
NON-FUNDAMENTAL
INVESTMENT RESTRICTIONS OF THE FUNDS
In addition to the
investment restrictions adopted as fundamental policies set forth above, the Funds operate with certain non-fundamental policies that
may be changed by a vote of a majority of the Board members at any time.
In accordance with
such policies, each Fund may not:
(1)
to the extent required by applicable law at the time, purchase additional securities when its borrowings, less amounts receivable on sales
of portfolio securities, exceed 5% of its total assets.
(2) sell securities
short, but reserves the right to sell securities short against the box.
(3) invest more than
15% of its net assets in illiquid securities. This restriction does not limit the purchase of securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the 1933 Act, provided that such securities are determined to be liquid by MML Advisers
or the subadviser pursuant to Board approved guidelines.
(4)
to the extent that shares of the Fund are purchased or otherwise acquired by other series of the Trust or other series of registered open-end
investment companies in the Trust’s “group of investment companies” (as such term is defined in Section 12(d)(1)(G)
of the 1940 Act), acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance
on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act.
With respect to limitation
(3) above, if there is a lack of trading interest in particular Rule 144A securities, a Fund’s holdings of those securities
may be illiquid, resulting in the possibility of undesirable delays in selling these securities at prices representing fair value. If,
through a change in values, net assets, or other circumstances, the Fund were in a position where more than 15% of its net assets was
invested in illiquid securities, it would take appropriate orderly steps, as deemed necessary, to protect liquidity.
MANAGEMENT
OF THE TRUST
The
Trust has a Board comprised of eight Trustees, a majority of which are not “interested persons” (as defined in the 1940
Act) of the Trust. The Board is generally responsible for the management and oversight of the business and affairs of the Trust. The Trustees
formulate the general policies of the Trust and the Funds, approve contracts, and authorize Trust officers to carry out the decisions
of the Board. To assist them in this role, the Trustees who are not “interested persons” of the Trust, the adviser, or any
subadviser (“Independent Trustees”) have retained independent legal counsel. As investment adviser and subadvisers to the
Funds, respectively, MML Advisers and Barings and BIIL may be considered part of the management of the Trust. The Trustees and principal
officers of the Trust are listed below together with information on their positions with the Trust, address, and year of birth, as well
as their principal occupations during at least the past five years and their other current principal business affiliations.
The Board has appointed
an Independent Trustee Chairperson of the Trust. The Chairperson presides at Board meetings and may call a Board or committee meeting
when he or she deems it necessary. The Chairperson participates in the preparation of Board meeting agendas and may generally facilitate
communications among the Trustees, and between the Trustees and the Trust’s management, officers, and independent legal counsel,
between meetings. The Chairperson may also perform such other functions as may be requested by the Board from time to time. The Board
has established the three standing committees described below, and may form working groups or ad hoc committees as needed.
The Board believes
this leadership structure is appropriate because it allows the Board to exercise informed and independent judgment, and allocates areas
of responsibility among committees or working groups of Trustees and the full Board in a manner that enhances effective oversight. The
Board also believes that having a majority of Independent Trustees is appropriate and in the best interest of the Funds’ shareholders.
However, in the Board’s opinion, having interested persons serve as Trustees brings both corporate and financial viewpoints that
are significant elements in its decision-making process. The Board reviews its leadership structure at least annually and may make changes
to it at any time, including in response to changes in the characteristics or circumstances of the Trust.
Independent Trustees
|
Allan W. Blair 1295
State Street Springfield, MA 01111-0001 Year of birth: 1948 Trustee of the Trust since 2012 Trustee of 115
portfolios in fund complex |
|
|
Trustee of the Trust |
|
Retired; Trustee
(since 2003), MassMutual Select Funds (open-end investment company); Trustee (since 2012), MassMutual Premier Funds (open-end investment
company); Trustee (since 2021), MassMutual Advantage Funds (open-end investment company); Trustee (since 2003), MML Series Investment
Fund (open-end investment company); Trustee (since 2012), MML Series Investment Fund II (open-end investment company).
|
Nabil N. El-Hage 1295
State Street Springfield, MA 01111-0001 Year of birth: 1958 Trustee of the Trust since 2003 Trustee of 116
portfolios in fund complex |
|
|
Trustee of the Trust |
|
Founder
and CEO (since 2018), AEE International LLC (a Puerto Rico LLC); Founder and sole member (2016-2018), PR Academy of Executive Education
LLC (a Puerto Rico LLC); Trustee (since 2012), MassMutual Select Funds (open-end investment company); Trustee (since 2003), Chairman (2006-2012),
MassMutual Premier Funds (open-end investment company); Trustee (since 2021), MassMutual Advantage Funds (open-end investment company);
Trustee (since 2012), MML Series Investment Fund (open-end investment company); Trustee (since 2005), Chairman (2006-2012), MML Series Investment
Fund II (open-end investment company); Chairperson and Trustee (since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
|
Maria D. Furman 1295
State Street Springfield, MA 01111-0001 Year of birth: 1954 Trustee of the Trust since 2004 Trustee of 115
portfolios in fund complex |
|
|
Trustee of the Trust |
|
Retired;
Trustee (since 2012), MassMutual Select Funds (open-end investment company); Trustee (since 2004), MassMutual Premier Funds (open-end
investment company); Trustee (since 2021), MassMutual Advantage Funds (open-end investment company); Trustee (since 2012), MML Series Investment
Fund (open-end investment company); Trustee (since 2005), MML Series Investment Fund II (open-end investment company).
|
R. Alan Hunter, Jr.
1295 State Street Springfield, MA 01111-0001 Year of birth: 1946 Trustee of the
Trust since 2012 Trustee of 115 portfolios in fund complex |
|
|
Trustee of the Trust |
|
Retired;
Trustee (since 2003), Chairperson (2016-2021), MassMutual Select Funds (open-end investment company); Trustee (since 2012), Chairperson
(2016-2021), MassMutual Premier Funds (open-end investment company); Trustee (since 2021), Chairperson (2021), MassMutual Advantage Funds
(open-end investment company); Trustee (since 2003), Chairperson (2016-2021), MML Series Investment Fund (open-end investment company);
Trustee (since 2012), Chairperson (2016-2021), MML Series Investment Fund II (open-end investment company).
|
C. Ann Merrifield 1295
State Street Springfield, MA 01111-0001 Year of birth: 1951 Trustee of the Trust since 2004 Trustee of 115
portfolios in fund complex |
|
|
Trustee of the Trust |
|
Retired;
Lead Director (since 2020), Lyra Therapeutics (a clinical-stage specialty pharmaceutical company); Chairperson (since 2017), Director
(since 2014), InVivo Therapeutics (research and clinical-stage biomaterials and biotechnology company); Trustee (since 2012), MassMutual
Select Funds (open-end investment company); Trustee (since 2004), MassMutual Premier Funds (open-end investment company); Trustee (since
2021), MassMutual Advantage Funds (open-end investment company); Trustee (since 2012), MML Series Investment Fund (open-end investment
company); Trustee (since 2005), MML Series Investment Fund II (open-end investment company).
|
Susan B. Sweeney 1295
State Street Springfield, MA 01111-0001 Year of birth: 1952 Chairperson of the Trust since 2022 Trustee of
the Trust since 2012 Trustee of 118 portfolios in fund complex1
|
|
|
Chairperson and Trustee of the Trust |
|
Retired;
Trustee (since 2012), Barings Corporate Investors (closed-end investment company); Trustee (since 2012), Barings Participation Investors
(closed-end investment company); Chairperson (since 2022), Trustee (since 2009), MassMutual Select Funds (open-end investment company);
Chairperson (since 2022), Trustee (since 2012), MassMutual Premier Funds (open-end investment company); Chairperson (since 2022), Trustee
(since 2021), MassMutual Advantage Funds (open-end investment company); Chairperson (since 2022), Trustee (since 2009), MML Series Investment
Fund (open-end investment company); Chairperson (since 2022), Trustee (since 2012), MML Series Investment Fund II (open-end
investment company); Trustee (since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
Interested
Trustees
|
Michael R. Fanning2
1295 State Street Springfield, MA 01111-0001 Year of birth: 1963 Trustee
of the Trust since 2021 Trustee of 115 portfolios in fund complex |
|
|
Trustee of the Trust |
|
Director (since
2016), MML Advisers; Head of MassMutual U.S. (since 2016), Executive Vice President (2016-2018), Member of MassMutual’s Executive
Leadership Team (since 2008), MassMutual; Trustee (since 2021), MassMutual Select Funds (open-end investment company); Trustee (since
2021), MassMutual Premier Funds (open-end investment company); Trustee (since 2021), MassMutual Advantage Funds (open-end investment company);
Trustee (since 2021), MML Series Investment Fund (open-end investment company); Trustee (since 2021), MML Series Investment
Fund II (open-end investment company).
1
Barings
Participation Investors and Barings Corporate Investors are deemed to be a part of the Fund Complex, because they are managed by
Barings LLC, an affiliate of MML Advisers.
2
Mr. Fanning
is an “Interested Person,” as that term is defined in the 1940 Act, as an employee of MassMutual.
|
Clifford M. Noreen3
1295 State Street Springfield, MA 01111-0001 Year of birth: 1957 Trustee of the Trust since 2021 Trustee
of 117 portfolios in fund complex4
|
|
|
Trustee of the Trust |
|
Head of Global Investment
Strategy (since 2019), Deputy Chief Investment Officer (2016-2018), MassMutual; President (2008-2016), Vice Chairman (2007-2008), Member
of the Board of Managers (2006-2016), Managing Director (2000-2016), Barings LLC; Chairman (since 2009), Trustee (since 2005), President
(2005-2009), CI Subsidiary Trust and PI Subsidiary Trust; Chairman and Trustee (since 2009), Barings Corporate Investors (closed-end investment
company); Chairman and Trustee (since 2009), Barings Participation Investors (closed-end investment company); Trustee (since 2021), MassMutual
Select Funds (open-end investment company); Trustee (since 2021), MassMutual Premier Funds (open-end investment company); Trustee (since
2021), MassMutual Advantage Funds (open-end investment company); Trustee (since 2021), MML Series Investment Fund (open-end investment
company); Trustee (since 2021), MML Series Investment Fund II (open-end investment company).
Principal
Officers
|
Andrea Anastasio 1295
State Street Springfield, MA 01111-0001 Year of birth: 1974 Officer of the Trust since 2021 Officer of 115
portfolios in fund complex |
|
|
Vice President |
|
Vice
President (since 2021), MML Advisers; Head of Investment Management Solutions (since 2021), MassMutual; Head of Investment Strategy and
Research, North America (2019-2021), Head of Investment Product Management (2016-2019), State Street Global Advisors; Vice President (since
2021), MassMutual Select Funds (open-end investment company); Vice President (since 2021), MassMutual Premier Funds (open-end investment
company); Vice President (since 2021), MassMutual Advantage Funds (open-end investment company); Vice President (since 2021), MML Series Investment
Fund (open-end investment company); Vice President (since 2021), MML Series Investment Fund II (open-end investment company).
|
Andrew M. Goldberg
1295 State Street Springfield, MA 01111-0001 Year of birth: 1966 Officer of the
Trust since 2004 Officer of 116 portfolios in fund complex |
|
|
Vice President, Secretary, and Chief
Legal Officer of the Trust |
|
Lead Counsel, Investment
Adviser & Mutual Funds (since 2018), Assistant Vice President and Counsel (2004-2018), MassMutual; Secretary (since 2015), Assistant
Secretary (2013-2015), MML Advisers; Vice President, Secretary, and Chief Legal Officer (since 2008), Assistant Secretary (2001-2008),
MassMutual Select Funds (open-end investment company); Vice President, Secretary (formerly known as “Clerk”), and Chief
Legal Officer (since 2008), Assistant Clerk (2004-2008), MassMutual Premier Funds (open-end investment company); Vice President, Secretary,
and Chief Legal Officer (since 2021), MassMutual Advantage Funds (open-end investment company); Vice President, Secretary, and Chief Legal
Officer (since 2008), Assistant Secretary (2001-2008), MML Series Investment Fund (open-end investment company);
3
Mr. Noreen
is an “Interested Person,” as that term is defined in the 1940 Act, as an employee of MassMutual.
4
Barings
Participation Investors and Barings Corporate Investors are deemed to be a part of the Fund Complex, because they are managed by
Barings LLC, an affiliate of MML Advisers.
Vice President, Secretary (formerly
known as “Clerk”), and Chief Legal Officer (since 2008), Assistant Clerk (2005-2008), MML Series Investment Fund II
(open-end investment company); Vice President, Secretary, and Chief Legal Officer (since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
|
Renee Hitchcock 1295
State Street Springfield, MA 01111-0001 Year of birth: 1970 Officer of the Trust since 2007 Officer of 116
portfolios in fund complex |
|
|
Chief Financial Officer and Treasurer of the Trust
|
|
Head
of Mutual Fund Administration (since 2018), Assistant Vice President (2015-2018), MassMutual; Chief Financial Officer and Treasurer
(since 2016), Assistant Treasurer (2007-2016), MassMutual Select Funds (open-end investment company); Chief Financial Officer and Treasurer
(since 2016), Assistant Treasurer (2007-2016), MassMutual Premier Funds (open-end investment company); Chief Financial Officer and Treasurer
(since 2021), MassMutual Advantage Funds (open-end investment company); Chief Financial Officer and Treasurer (since 2016), Assistant
Treasurer (2007-2016), MML Series Investment Fund (open-end investment company); Chief Financial Officer and Treasurer (since 2016),
Assistant Treasurer (2007-2016), MML Series Investment Fund II (open-end investment company); Chief Financial Officer and Treasurer
(since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
|
Aruna Hobbs 1295
State Street Springfield, MA 01111-0001 Year of birth: 1960 Officer of the Trust since 2021 Officer of 115
portfolios in fund complex |
|
|
Vice President |
|
Vice
President (since 2021), MML Advisers; Head of Institutional Investments (since 2014), MassMutual; Vice President (since 2021), MassMutual
Select Funds (open-end investment company); Vice President (since 2021), MassMutual Premier Funds (open-end investment company); Vice
President (since 2021), MassMutual Advantage Funds (open-end investment company); Vice President (since 2021), MML Series Investment
Fund (open-end investment company); Vice President (since 2021), MML Series Investment Fund II (open-end investment company).
|
Paul LaPiana 1295
State Street Springfield, MA 01111-0001 Year of birth: 1969 Officer of the Trust since 2021 Officer of 115
portfolios in fund complex |
|
|
President of the Trust |
|
President (since
2021), MML Advisers; Head of MassMutual U.S. Product (since 2019), Head of Field Management (2016-2019), MassMutual; Executive Vice President,
Head of Field Distribution (2012-2016), MetLife; President (since 2021), MassMutual Select Funds (open-end investment company); President
(since 2021), MassMutual Premier Funds (open-end investment company); President (since 2021), MassMutual Advantage Funds (open-end investment
company); President (since 2021), MML Series Investment Fund (open-end investment company); President (since 2021), MML Series Investment
Fund II (open-end investment company).
|
Jill Nareau Robert
1295 State Street Springfield, MA 01111-0001 Year of birth: 1972 Officer of the
Trust since 2008 Officer of 116 portfolios in fund complex |
|
|
Vice President and Assistant Secretary of the Trust
|
|
Lead Counsel, Investment
Adviser & Mutual Funds (since 2018), Assistant Vice President and Counsel (2009-2018), MassMutual; Assistant Secretary (since 2015),
MML Advisers; Vice President and Assistant Secretary (since 2017), Assistant Secretary (2008-2017), MassMutual Select Funds (open-end
investment company); Vice President and Assistant Secretary (since 2017), Assistant Secretary (formerly known as “Assistant Clerk”)
(2008-2017), MassMutual Premier Funds (open-end investment company); Vice President and Assistant Secretary (since 2021), MassMutual Advantage
Funds (open-end investment company); Vice President and Assistant Secretary (since 2017), Assistant Secretary (2008-2017), MML Series Investment
Fund (open-end investment company); Vice President and Assistant Secretary (since 2017), Assistant Secretary (formerly known as “Assistant
Clerk”) (2008-2017), MML Series Investment Fund II (open-end investment company); Vice President and Assistant Secretary
(since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
|
Douglas Steele 1295
State Street Springfield, MA 01111-0001 Year of birth: 1975 Officer of the Trust since 2016 Officer of 115
portfolios in fund complex |
|
|
Vice President of the Trust |
|
Head
of Product Management (since 2021), Vice President (since 2017), Head of Investment Management (2017-2021), Head of Investment Due Diligence
(2016-2017), MML Advisers; Head of Product Management (since 2021), Head of Manager Research (2021), Head of Investment Management (2017-2021),
Assistant Vice President (2013-2017), MassMutual; Vice President (since 2016), MassMutual Select Funds (open-end investment company);
Vice President (since 2016), MassMutual Premier Funds (open-end investment company); Vice President (since 2021), MassMutual Advantage
Funds (open-end investment company); Vice President (since 2016), MML Series Investment Fund (open-end investment company); Vice
President (since 2016), MML Series Investment Fund II (open-end investment company).
|
Philip S. Wellman 1295
State Street Springfield, MA 01111-0001 Year of birth: 1964 Officer of the Trust since 2007 Officer of 116
portfolios in fund complex |
|
|
Vice President and Chief Compliance
Officer of the Trust |
|
Vice
President and Chief Compliance Officer (since 2013), MML Advisers; Head of Mutual Funds & RIA Compliance (since 2018), Vice President,
Associate General Counsel, and Chief Compliance Officer (Mutual Funds) (2014-2018), MassMutual; Vice President and Chief Compliance Officer
(since 2007), MassMutual Select Funds (open-end investment company); Vice President and Chief Compliance Officer (since 2007), MassMutual
Premier Funds (open-end investment company); Vice President and Chief Compliance Officer (since 2021), MassMutual Advantage Funds (open-end
investment company); Vice President and Chief Compliance Officer (since 2007), MML Series Investment Fund (open-end investment company);
Vice President and Chief Compliance Officer (since 2007), MML Series Investment Fund II (open-end investment company); Vice
President and Chief Compliance Officer (since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
Each Trustee of the
Trust serves until the next meeting of shareholders called for the purpose of electing Trustees and until the election and qualification
of his or her successor or until he or she dies, resigns, or is removed. Notwithstanding the foregoing, unless the Trustees determine
that it is desirable and in the best interest of the Trust that an exception to the retirement policy of the Trust be made, a Trustee
shall retire and cease to serve
as a Trustee upon the conclusion of the calendar year in which such Trustee attains the age of seventy-five years, however, an interested
Trustee of the Trust shall no longer serve as a Trustee if or when they are no longer an employee of MassMutual or an affiliate. However,
any Trustee who attained the age of seventy-five years during 2021 shall retire and cease to serve as a Trustee on or before June 30,
2022.
The
Chairperson is elected to hold such office for a term of three years or until their successor is elected and qualified to carry out
the duties and responsibilities of their office, or until he or she retires, dies, resigns, is removed, or becomes disqualified, and any
such Chairperson may not serve more than two consecutive terms.
The President, Treasurer,
and Secretary and such other officers as the Trustees may in their discretion from time to time elect are elected to hold such office
until their successor is elected and qualified to carry out the duties and responsibilities of their office, or until he or she dies,
resigns, is removed, or becomes disqualified.
Each officer and the
Chairperson shall hold office at the pleasure of the Trustees.
The
Chairperson of any of the Trust’s Committees shall serve a term of three years or until he or she retires, dies, resigns,
is removed, or becomes disqualified.
Additional Information
About the Trustees
In addition to the
information set forth above, the following specific experience, qualifications, attributes, and skills apply to each Trustee. Each Trustee
was appointed to serve on the Board based on his or her overall experience and the Board did not identify any specific qualification as
all-important or controlling. The information in this section should not be understood to mean that any of the Trustees is an “expert”
within the meaning of the federal securities laws.
Allan
W. Blair—As a former trustee and audit and compliance committee member of a large healthcare
system, Mr. Blair has experience with financial, regulatory, and operational issues. He also has served as president and/or CEO of
several non-profit and quasi-public organizations for over 30 years. Mr. Blair holds a BA from the University of Massachusetts
at Amherst and a JD from Western New England College School of Law.
Nabil
N. El-Hage—As a former CEO or CFO of various public and private companies, Mr. El-Hage
has experience with financial, regulatory, and operational issues. He has also taught corporate finance at the graduate level, and has
served as a director for more than a dozen public and private companies and as an associate at a venture capital firm. Mr. El-Hage
holds a BS in Electronic Engineering from Yale University and an MBA with high distinction from Harvard University.
Michael
R. Fanning—As an executive and/or director of financial services and insurance companies,
Mr. Fanning has experience with financial, regulatory, and operational issues. He also has served as an audit committee member for
financial services and insurance companies. Mr. Fanning holds a BA in Economics and a BA in Organizational Behavior and Management
from Brown University.
Maria
D. Furman—As a trustee and chairperson or member of the audit and investment committees
of various educational organizations, and as a former managing director, director, and portfolio manager at an investment management firm,
Ms. Furman has experience with financial, regulatory, and operational issues. She also has served as an audit and investment committee
member and a director, treasurer, and investment committee chair for environmental, educational, and healthcare organizations. Ms. Furman
is a CFA charterholder and holds a BA from the University of Massachusetts at Dartmouth.
R.
Alan Hunter, Jr.—As the former chairman of the board of non-profit organizations and
a former director of a publicly traded company, Mr. Hunter has experience with financial, regulatory, and operational issues. He
also held executive positions with a manufacturing company. Mr. Hunter holds a BA from Dickinson College and an MBA from the University
of Pennsylvania.
C.
Ann Merrifield—As a trustee of a healthcare organization, current and former director
of specialty pharmaceutical companies, former biotechnology executive, former partner of a consulting firm, and investment officer at
a large insurance company, Ms. Merrifield has experience with financial, regulatory,
and operational issues. She also has served as an audit
committee member for a manufacturing company and currently serves as such for two public life sciences companies. Ms. Merrifield
holds a BA and M. Ed. from the University of Maine and an MBA from Amos Tuck School of Business Administration at Dartmouth College.
Clifford
M. Noreen—As an executive of financial services companies with over 35 years of
investment management experience, a director of several publicly traded and private companies, an investment committee member of two non-profit
organizations, and a director and/or officer of various investment companies and private funds, Mr. Noreen has experience with financial,
regulatory, and operational issues. Mr. Noreen is a Chartered Financial Analyst. He holds a BA from the University of Massachusetts
and an MBA from American International College.
Susan
B. Sweeney—As a former executive and investment officer of a property and casualty company
and a former executive of a financial services company with over 35 years of financial services experience, Ms. Sweeney has experience
with financial, regulatory, and operational issues. From 2010 to 2014, she was Chief Investment Officer and Senior Vice President of Selective
Insurance Company of America. She also served as Chief Investment Officer for the State of Connecticut Pension Fund from 2002 to 2007,
directing a multi-asset portfolio. Ms. Sweeney holds a BS in Business Studies from Connecticut Board for State Academic Awards, an
MBA from Harvard Business School, and a Doctor of Humane Letters from Charter Oak State College.
Board Committees and
Meetings
The full Board met
eight times during the fiscal year ended September 30, 2021.
Audit
Committee. The Trust has an Audit Committee, consisting of Trustees who are not “interested
persons” (as defined in the 1940 Act) of the Trust. The Audit Committee, whose members are Messrs. Blair, El-Hage, and
Hunter and Mses. Furman and Merrifield, oversees the Trust’s accounting and financial reporting policies and practices, its internal
controls, and internal controls of certain service providers; oversees the quality and objectivity of the Trust’s financial statements
and the independent audit thereof; evaluates the independence of the Trust’s independent registered public accounting firm; evaluates
the overall performance and compensation of the Chief Compliance Officer; acts as liaison between the Trust’s independent registered
public accounting firm and the full Board; and provides immediate access for the Trust’s independent registered public accounting
firm to report any special matters they believe should be brought to the attention of the full Board. During the fiscal year ended September 30,
2021, the Audit Committee met four times.
Nominating
and Governance Committee. The Trust has a Nominating and Governance Committee, consisting of
each Trustee who is not an “interested person” of the Trust. The Nominating and Governance Committee meets at least twice
per calendar year. During the fiscal year ended September 30, 2021, the Nominating and Governance Committee met four times. The Nominating
and Governance Committee (a) identifies, and evaluates the qualifications of, individuals to become independent members of the Funds’
Board in the event that a position currently filled by an Independent Trustee is vacated or created; (b) nominates Independent Trustee
nominees for election or appointment to the Board; (c) sets any necessary standards or qualifications for service on the Board; (d) recommends
periodically to the full Board an Independent Trustee to serve as Chairperson; (e) evaluates at least annually the independence and
overall performance of counsel to the Independent Trustees; (f) annually reviews the compensation of the Independent Trustees; and
(g) oversees board governance issues including, but not limited to, (i) evaluating the board and committee structure and the
performance of Trustees, (ii) considering and addressing any conflicts, (iii) considering the retirement policies of the Board,
and (iv) considering and making recommendations to the Board at least annually concerning the Trust’s directors and officers
liability insurance coverage.
The Nominating and
Governance Committee will consider and evaluate nominee candidates properly submitted by shareholders of the Trust in the same manner
as it considers and evaluates candidates recommended by other sources. The Nominating and Governance Committee may also consider any other
facts and circumstances attendant to such shareholder submission as may be deemed appropriate by the Nominating and Governance Committee,
including, without limitation, the value of the Funds’ securities
owned by the shareholder and the
length of time such shares have been held by the shareholder. A recommendation of a shareholder of the Trust must be submitted as described
below to be considered properly submitted for purposes of the Nominating and Governance Committee’s consideration. The shareholders
of the Trust must submit any such recommendation (a “Shareholder Recommendation”) in writing to the Trust’s Nominating
and Governance Committee, to the attention of the Secretary, at the address of the principal executive offices of the Trust, which is
1295 State Street, Springfield, MA 01111-0001. The Shareholder Recommendation must be delivered to or mailed and received at the principal
executive offices of the Trust at least 60 calendar days before the date of the meeting at which the Nominating and Governance Committee
is to select a nominee for Independent Trustee. The Shareholder Recommendation must include: (i) a statement in writing setting forth:
(A) the name, age, date of birth, phone number, business address, residence address, nationality, and pertinent qualifications of
the person recommended by the shareholder (the “Shareholder Candidate”), including an explanation of why the shareholder
believes the Shareholder Candidate will make a good Trustee; (B) the class or series and number of all shares of the Funds owned
of record or beneficially by the Shareholder Candidate, as reported to such shareholder by the Shareholder Candidate; (C) any other
information regarding the Shareholder Candidate called for with respect to director nominees by paragraphs (a), (d), (e), and (f) of
Item 401 of Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101 (Schedule 14A) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), adopted by the SEC (or the corresponding provisions of any regulation
or rule subsequently adopted by the SEC or any successor agency applicable to the Funds); (D) any other information regarding the
Shareholder Candidate that would be required to be disclosed if the Shareholder Candidate were a nominee in a proxy statement or other
filing required to be made in connection with solicitation of proxies for election of trustees or directors pursuant to Section 14
of the Exchange Act and the rules and regulations promulgated thereunder; and (E) whether the recommending shareholder believes that
the Shareholder Candidate is or will be an “interested person” (as defined in Section 2(a)(19) of the 1940
Act) of the Funds and, if not an “interested person,” information regarding the Shareholder Candidate that will be sufficient
for the Funds to make such determination; (ii) the written and signed consent of the Shareholder Candidate to be named as a nominee,
consenting to (1) the disclosure, as may be necessary or appropriate, of such Shareholder Candidate’s information submitted
in accordance with (i) above; and (2) service as a Trustee if elected; (iii) the recommending shareholder’s name
as it appears on the Funds’ books, the number of all shares of each series of the Funds owned beneficially and of record by the
recommending shareholder; (iv) a description of all arrangements or understandings between the recommending shareholder and the Shareholder
Candidate and any other person or persons (including their names) pursuant to which the Shareholder Recommendation is being made by the
recommending shareholder; and (v) such other information as the Nominating and Governance Committee may require the Shareholder Candidate
to furnish as the Nominating and Governance Committee may reasonably require or deem necessary to determine the eligibility of such Shareholder
Candidate to serve as a Trustee or to satisfy applicable law.
Shareholders may send
other communications to the Trustees by addressing such correspondence directly to the Secretary of the Trust, c/o Massachusetts
Mutual Life Insurance Company, 1295 State Street, Springfield, MA 01111-0001. When writing to the Board, shareholders should identify
themselves, the fact that the communication is directed to the Board, the Fund they are writing about, and any relevant information regarding
their Fund holdings. Except as provided below, the Secretary shall either (i) provide a copy of each shareholder communication to
the Board at its next regularly scheduled meeting or (ii) if the Secretary determines that the communication requires more immediate
attention, forward the communication to the Board promptly after receipt. The Secretary will also provide a copy of each shareholder communication
to the Trust’s Chief Compliance Officer.
The Secretary may,
in good faith, determine that a shareholder communication should not be provided to the Board because it does not reasonably relate to
the Trust or its operations, management, activities, policies, service providers, Board, officers, shareholders, or other matters relating
to an investment in the Funds or is otherwise ministerial in nature (such as a request for Fund literature, share data, or financial information).
The Secretary will provide to the Board on a quarterly basis a summary of the shareholder communications not provided to the Board by
virtue of this paragraph.
Contract
Committee. The Trust has a Contract Committee, consisting of each Trustee who is not an “interested
person” of the Trust. During the fiscal year ended September 30, 2021, the Contract Committee
met twice. The Contract Committee performs the specific
tasks assigned to independent trustees by the 1940 Act, including the periodic consideration of the Trust’s investment management
agreements and subadvisory agreements.
Risk Oversight
As registered investment
companies, the Funds are subject to a variety of risks, including, among others, investment risks, financial risks, compliance risks,
and operational risks. The Funds’ investment adviser and administrator, MML Advisers, has primary responsibility for the Funds’
risk management on a day-to-day basis as part of its overall responsibilities. The Funds’ subadvisers are primarily responsible
for managing investment risk as part of their day-to-day investment management responsibilities, as well as operational risks at their
respective firms. The Funds’ investment adviser and Chief Compliance Officer also assist the Board in overseeing the significant
investment policies of the Funds and monitor the various compliance policies and procedures approved by the Board as a part of its oversight
responsibilities.
In discharging its
oversight responsibilities, the Board considers risk management issues throughout the year by reviewing regular reports prepared by the
Funds’ investment adviser and Chief Compliance Officer, as well as special written reports or presentations provided on a variety
of risk issues, as needed. For example, the investment adviser reports to the Board quarterly on the investment performance of each of
the Funds, the financial performance of the Funds, overall market and economic conditions, and legal and regulatory developments that
may impact the Funds. The Funds’ Chief Compliance Officer, who reports directly to the Board’s Independent Trustees, provides
presentations to the Board at its quarterly meetings and an annual report to the Board concerning (i) compliance matters relating
to the Funds, the Funds’ investment adviser and subadvisers, and the Funds’ other key service providers; (ii) regulatory
developments; (iii) business continuity programs; and (iv) various risks identified as part of the Funds’ compliance
program assessments. The Funds’ Chief Compliance Officer also meets at least quarterly in executive session with the Independent
Trustees, and communicates significant compliance-related issues and regulatory developments to the Audit Committee between Board meetings.
In addressing issues
regarding the Funds’ risk management between meetings, appropriate representatives of the investment adviser communicate with the
Chairperson of the Trust, the Chairperson of the Audit Committee, or the Funds’ Chief Compliance Officer. As appropriate, the Trustees
confer among themselves, or with the Funds’ Chief Compliance Officer, the investment adviser, other service providers, and independent
legal counsel, to identify and review risk management issues that may be placed on the full Board’s agenda.
The Board also relies
on its committees to administer the Board’s oversight function. The Audit Committee assists the Board in reviewing with the investment
adviser and the Funds’ independent auditors, at various times throughout the year, matters relating to the annual audits, financial
accounting and reporting matters, and the internal control environment at the service providers that provide financial accounting and
reporting for the Funds. The Audit Committee also meets annually with representatives of the investment adviser’s Corporate Audit
Department to review the results of internal audits of relevance to the Funds. This and the Board’s other committees present reports
to the Board that may prompt further discussion of issues concerning the oversight of the Funds’ risk management. The Board may
also discuss particular risks that are not addressed in the committee process.
Share Ownership of
Trustees and Officers of the Trust
The
table below sets forth information regarding the Trustees’ beneficial ownership of Fund shares, based on the value of such shares
as of December 31, 2021.
Name of Trustee
|
|
|
The Dollar Range of Equity Securities Beneficially Owned
in the Trust
|
|
|
Aggregate Dollar Range of Equity Securities in All Registered
Investment Companies Overseen by Trustee in Family of Investment
Companies |
|
Independent Trustees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allan W. Blair |
|
|
|
|
None |
|
|
|
over $100,000 |
|
Nabil N. El-Hage |
|
|
|
|
None |
|
|
|
|
|
None |
|
|
Maria D. Furman |
|
|
|
|
None |
|
|
|
|
|
None |
|
|
R. Alan Hunter, Jr. |
|
|
|
|
None |
|
|
|
|
|
None |
|
|
C. Ann Merrifield |
|
|
|
|
None |
|
|
|
|
|
None |
|
|
Susan B. Sweeney |
|
|
|
|
None |
|
|
|
|
|
None |
|
|
Interested Trustees |
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael R. Fanning |
|
|
|
|
None |
|
|
|
|
|
None |
|
|
Clifford M. Noreen |
|
|
|
|
None |
|
|
|
|
|
None |
|
|
The
ownership information shown above does not include units of separate investment accounts that invest in one or more registered investment
companies overseen by a Trustee in the family of investment companies held in a 401(k) plan or amounts held under a deferred compensation
plan that are valued based on “shadow investments” in one or more such registered investment companies. As of December 31,
2021, these amounts were as follows: Mr. Blair, over $100,000; Mr. El-Hage, over $100,000; Mr. Fanning, $10,001-$50,000;
Ms. Furman, None; Mr. Hunter, None; Ms. Merrifield, None; Mr. Noreen, over $100,000; and Ms. Sweeney, None.
As
of January 3, 2022, the Trustees and officers of the Trust, individually and as a group, did not beneficially own outstanding shares
of any of the Funds.
To
the knowledge of the Trust, as of December 31, 2021, the Independent Trustees and their immediate family members did not own beneficially
or of record securities of the investment adviser, subadviser(s), principal underwriter, or sponsoring insurance company of the Funds
or a person (other than a registered investment company) directly or indirectly controlling, controlled by, or under common control with
the investment adviser, subadviser(s), principal underwriter, or sponsoring insurance company of the Funds.
Trustee Compensation
Effective
January 1, 2022, the Trust, on behalf of each Fund, pays each of its Trustees who is not an officer or employee of MassMutual a fee
of $3,960 per quarter plus a fee of $576 per in-person meeting attended plus a fee of $576 for the annual Contract Committee meeting.
The Chairperson of the Board is paid an additional 40% of the quarterly fee, the in-person meeting fee, and the Contract Committee meeting
fee. The Chairpersons of each of the Audit Committee and the Contract Committee are paid an additional 10% of the quarterly fee, the in-person
meeting fee, and the Contract Committee meeting fee. The Chairperson of the Nominating and Governance Committee is paid an additional
7% of the quarterly fee, the in-person meeting fee, and the Contract Committee meeting fee. Such Trustees who serve on the Audit Committee,
other than the Chairperson, are paid an additional 4% of the quarterly fee, the in-person meeting fee, and the Contract Committee meeting
fee. No additional fees are paid for attending any other committee meetings or any special telephonic meetings. In addition, the Trust
reimburses out-of-pocket business travel expenses to such Trustees. Trustees who are officers or employees of MassMutual receive no fees
from the Trust.
During
2021, the Trust, on behalf of each Fund, paid each of its Trustees who was not an officer or employee of MassMutual a fee of $4,200 per
quarter plus a fee of $640 per in-person meeting attended plus a fee of $640 for the annual Contract Committee meeting. The Chairperson
of the Board was paid an additional 40% of the quarterly fee, the in-person meeting fee, and the Contract Committee meeting fee. The Chairpersons
of each of the Audit Committee and the Contract Committee were paid an additional 10% of the quarterly fee, the in-person meeting fee,
and the Contract Committee meeting fee. The Chairperson of the Nominating and Governance Committee was paid an additional 7% of the quarterly
fee, the in-person meeting fee, and the Contract Committee meeting fee. Such Trustees who served on the
Audit Committee, other than the Chairperson, were paid
an additional 4% of the quarterly fee, the in-person meeting fee, and the Contract Committee meeting fee. No additional fees were paid
for attending any other committee meetings or any special telephonic meetings. In addition, the Trust reimbursed out-of-pocket business
travel expenses to such Trustees. Trustees who were officers or employees of MassMutual received no fees from the Trust.
The following table
discloses actual compensation paid to Trustees of the Trust during the 2021 fiscal year. The Trust has no pension or retirement plan,
but does have a deferred compensation plan. The plan provides for amounts deferred prior to January 1, 2012, plus interest, to be
credited at a rate of interest equal to that of the U.S. Corporate Bond Index as of January 1, 2012, to be reset every two years.
Amounts deferred after January 1, 2012, plus or minus earnings, are “shadow invested.” These amounts are valued based
on changes in the values of one or more registered investment companies overseen by a Trustee.
Name
of Trustee |
|
|
Aggregate Compensation from
the Trust |
|
|
Deferred Compensation and Interest Accrued as
part of Fund Expenses
|
|
|
Total Compensation from the Trust and Fund Complex
Paid to
Trustees |
|
Allan W. Blair |
|
|
|
$ |
26,962 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
281,404 |
|
|
Nabil N. El-Hage |
|
|
|
$ |
27,581 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
288,904 |
|
|
Michael R. Fanning1
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
Maria D. Furman |
|
|
|
$ |
25,518 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
263,904 |
|
|
Teresa A. Hassara2
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
R. Alan Hunter, Jr. |
|
|
|
$ |
32,943 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
353,904 |
|
|
Robert E. Joyal3
|
|
|
|
$ |
0 |
|
|
|
|
$ |
12,243 |
|
|
|
|
$ |
203,821 |
|
|
C. Ann Merrifield |
|
|
|
$ |
25,518 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
263,904 |
|
|
Clifford M. Noreen1
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
0 |
|
|
Susan B. Sweeney |
|
|
|
$ |
26,756 |
|
|
|
|
$ |
0 |
|
|
|
|
$ |
403,804 |
|
|
1
Joined
the Board as of January 1, 2021. Each of Mr. Fanning and Mr. Noreen, as an employee of MassMutual, receives no compensation
for his role as a Trustee to the Trust.
2
Resigned
from the Board as of December 31, 2020. Ms. Hassara, as an employee of MassMutual, received no compensation for her role as
a Trustee to the Trust.
3
Retired
from the Board as of December 31, 2020.
CONTROL PERSONS
AND PRINCIPAL HOLDERS OF SECURITIES
As
of January 3, 2022, to the Trust’s knowledge, the following persons owned of record or beneficially 5% or more of the outstanding
shares of the indicated classes of the Funds set forth below. Such ownership may be beneficially held by individuals or entities other
than the owner listed. To the extent that any listed shareholder beneficially owns more than 25% of a Fund, it may be deemed to “control”
such Fund within the meaning of the 1940 Act. The effect of such control may be to reduce the ability of other shareholders of the Fund
to take actions requiring the affirmative vote of holders of a plurality or majority of the Fund’s shares without the approval
of the controlling shareholder.
MassMutual
Short-Duration Bond Fund1
Class
|
|
|
Name
and Address of Owner |
|
|
Percent
of Class |
|
Class I |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
26.65% |
|
|
|
|
|
MassMutual 20/80 Allocation Fund 1 Iron
Street Boston, MA 02210 |
|
|
|
|
20.65%
|
|
|
|
|
|
MassMutual 40/60 Allocation Fund 1 Iron
Street Boston, MA 02210 |
|
|
|
|
14.26%
|
|
|
|
|
|
Voya Institutional Trust Company FBO Mercedes
Benz 30 Braintree Hill Office Park Braintree, MA 02184 |
|
|
|
|
7.32%
|
|
|
|
|
|
MassMutual 60/40 Allocation Fund 1 Iron
Street Boston, MA 02210 |
|
|
|
|
6.91%
|
|
|
Class R5 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
73.14%
|
|
|
|
|
|
Matrix Trust Company Trustee FBO Formosa
Plastics Corporation, U.S.A. P.O. Box 52129 Phoenix, AZ 85072 |
|
|
|
|
24.37%
|
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
60.91%
|
|
|
|
|
|
Reliance Trust Company FBO MassMutual
RP P.O. Box 48529 Atlanta, GA 30362 |
|
|
|
|
33.47%
|
|
|
Administrative Class
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
90.79%
|
|
|
|
|
|
Reliance Trust Company FBO MassMutual
RP P.O. Box 48529 Atlanta, GA 30362 |
|
|
|
|
8.17%
|
|
|
Class R4 |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
48.94%
|
|
|
Class
|
|
|
Name
and Address of Owner |
|
|
Percent
of Class |
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North Windsor, CT 06095 |
|
|
|
|
26.68%
|
|
|
|
|
|
Reliance Trust Company FBO MassMutual
Omnibus PPL/SMF 1100 Abernathy Road Atlanta, GA 30328 |
|
|
|
|
14.29%
|
|
|
|
|
|
Matrix Trust Company Trustee FBO Kayser-Roth
Corporation Supplemental Retirement Plan P.O. Box 52129 Phoenix, AZ 85072 |
|
|
|
|
8.04%
|
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
83.76%
|
|
|
|
|
|
Pershing LLC P.O. Box 2052 Jersey
City, NJ 07303 |
|
|
|
|
7.48%
|
|
|
|
|
|
Reliance Trust Company FBO MassMutual
RP P.O. Box 48529 Atlanta, GA 30362 |
|
|
|
|
5.83%
|
|
|
Class R3 |
|
|
Sammons Financial Network 4546 Corporate
Drive, Suite 100 West Des Moines, IA 50266 |
|
|
|
|
59.30%
|
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
31.57%
|
|
|
|
|
|
Reliance Trust Company FBO MassMutual
Omnibus PPL/SMF 1100 Abernathy Road, Suite 400 Atlanta, GA 30328 |
|
|
|
|
7.59%
|
|
|
Class Y |
|
|
Charles Schwab Corporation Special Custody
A/C FBO Customers 211 Main Street San Francisco, CA 94105-1905 |
|
|
|
|
39.62%
|
|
|
|
|
|
Morgan Stanley Smith Barney LLC 2000
Westchester Avenue Purchase, NY 10577 |
|
|
|
|
23.67%
|
|
|
|
|
|
National Financial Services LLC 499
Washington Boulevard Jersey City, NJ 07310 |
|
|
|
|
13.72%
|
|
|
|
|
|
UBS WM USA Omni Account M/F 1000 Harbor
Boulevard, Floor 5 Weehawken, NJ 07086 |
|
|
|
|
8.43%
|
|
|
Class L |
|
|
Morgan Stanley Smith Barney LLC 2000
Westchester Avenue Purchase, NY 10577 |
|
|
|
|
64.94%
|
|
|
Class
|
|
|
Name
and Address of Owner |
|
|
Percent
of Class |
|
|
|
|
RBC Capital Markets LLC Mutual Fund Omnibus
60 South 6th
Street, Suite 700 #P08 Minneapolis, MN 55402 |
|
|
|
|
13.87%
|
|
|
|
|
|
National Financial Services LLC 499
Washington Boulevard Jersey City, NJ 07310 |
|
|
|
|
8.92%
|
|
|
Class C |
|
|
Morgan Stanley Smith Barney LLC 2000
Westchester Avenue Purchase, NY 10577 |
|
|
|
|
47.94%
|
|
|
|
|
|
RBC Capital Markets LLC Mutual Fund Omnibus
60 South 6th
Street, Suite 700 #P08 Minneapolis, MN 55402 |
|
|
|
|
25.07%
|
|
|
|
|
|
LPL Financial 156 Alabama Street
Crestview, FL 32536 |
|
|
|
|
11.72%
|
|
|
|
|
|
Raymond James Omnibus For Mutual Funds
880 Carillon Parkway St. Petersburg, FL 33716 |
|
|
|
|
7.71%
|
|
|
|
|
|
National Financial Services LLC 499
Washington Boulevard Jersey City, NJ 07310 |
|
|
|
|
7.55% |
|
|
MassMutual
High Yield Fund2
Class
|
|
|
Name
and Address of Owner |
|
|
Percent
of Class |
|
Class I |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
37.91%
|
|
|
|
|
|
Reliance Trust Company FBO MassMutual
RP P.O. Box 48529 Atlanta, GA 30362 |
|
|
|
|
7.95%
|
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2030 Fund 1 Iron Street Boston, MA 02210 |
|
|
|
|
7.65%
|
|
|
|
|
|
MassMutual RetireSMARTSM
by JPMorgan 2020 Fund 1 Iron Street Boston, MA 02210 |
|
|
|
|
6.84%
|
|
|
Class R5 |
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North Windsor, CT 06095 |
|
|
|
|
28.68%
|
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
22.66%
|
|
|
Class
|
|
|
Name
and Address of Owner |
|
|
Percent
of Class |
|
|
|
|
Reliance Trust Company FBO MassMutual RP
P.O. Box 48529 Atlanta, GA 30362 |
|
|
|
|
22.41% |
|
|
|
|
|
DCGT as Trustee and/or Custodian FBO
PLIC Various Retirement Plans Omnibus 711 High Street Des Moines, IA 50392 |
|
|
|
|
6.29%
|
|
|
|
|
|
National Financial Services LLC 499
Washington Boulevard Jersey City, NJ 07310 |
|
|
|
|
5.57%
|
|
|
Service Class |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
41.03%
|
|
|
|
|
|
Reliance Trust Company FBO MM Stationary
Engineers Local P.O. Box 78446 Atlanta, GA 30362 |
|
|
|
|
19.55%
|
|
|
|
|
|
Reliance Trust Company FBO MassMutual
RP P.O. Box 48529 Atlanta, GA 30362 |
|
|
|
|
17.93%
|
|
|
|
|
|
The Hartford One Hartford Plaza
Hartford, CT 06155 |
|
|
|
|
7.59%
|
|
|
Administrative Class
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
49.91%
|
|
|
|
|
|
Reliance Trust Company FBO MassMutual
RP P.O. Box 48529 Atlanta, GA 30362 |
|
|
|
|
38.41%
|
|
|
|
|
|
Great-West Trust Company LLC FBO Employee
Benefits Clients 401K 8515 East Orchard Road, 2T2 Greenwood Village, CO 80111 |
|
|
|
|
5.89%
|
|
|
Class R4 |
|
|
DCGT as Trustee and/or Custodian FBO
PLIC Various Retirement Plans Omnibus 711 High Street Des Moines, IA 50392 |
|
|
|
|
35.69%
|
|
|
|
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North Windsor, CT 06095 |
|
|
|
|
27.37%
|
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
20.29%
|
|
|
Class
|
|
|
Name
and Address of Owner |
|
|
Percent
of Class |
|
|
|
|
Reliance Trust Company FBO MassMutual
Omnibus PPL/SMF 1100 Abernathy Road Atlanta, GA 30328 |
|
|
|
|
5.63% |
|
|
Class A |
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
63.57%
|
|
|
|
|
|
Reliance Trust Company FBO MassMutual
RP P.O. Box 48529 Atlanta, GA 30362 |
|
|
|
|
18.56%
|
|
|
Class R3 |
|
|
Talcott Resolution Life Insurance Company
1 Griffin Road North Windsor, CT 06095 |
|
|
|
|
56.63%
|
|
|
|
|
|
Massachusetts Mutual Life Insurance Company
1295 State Street Springfield, MA 01111 |
|
|
|
|
31.25%
|
|
|
|
|
|
Reliance Trust Company FBO MassMutual
Omnibus PPL/SMF 1100 Abernathy Road Atlanta, GA 30328 |
|
|
|
|
7.65% |
|
|
Class Y |
|
|
Jewish Communal Fund 575 Madison Avenue,
Suite 703 New York, NY 10022 |
|
|
|
|
55.03%
|
|
|
|
|
|
Barings LLC 300 South Tryon Street,
Suite 2500 Charlotte, NC 28202 |
|
|
|
|
29.96%
|
|
|
|
|
|
Charles Schwab Corporation Special Custody
A/C FBO Customers 211 Main Street San Francisco, CA 94105-1905 |
|
|
|
|
13.63%
|
|
|
Class C |
|
|
Barings LLC 300 South Tryon Street,
Suite 2500 Charlotte, NC 28202 |
|
|
|
|
100.00% |
|
|
1
As
of January 3, 2022, The Charles Schwab Corporation FBO Customers Mutual Fund, 211 Main Street, San Francisco, CA 94105, owned 27.51%
of MassMutual Short-Duration Bond Fund and therefore may be presumed to “control” the Fund, as that term is defined in the
1940 Act. However, such ownership may be beneficially held by individuals or entities other than The Charles Schwab Coporation. The Charles
Schwab Corporation is organized under the laws of California.
2
As
of January 3, 2022, Massachusetts Mutual Life Insurance (“MassMutual”), 1295 State Street, Springfield, MA 01111, owned
33.60% of MassMutual High Yield Fund and therefore may be presumed to “control” the Fund, as that term is defined in the
1940 Act. However, such ownership may be beneficially held by individuals or entities other than MassMutual. MassMutual is organized under
the laws of Massachusetts.
INVESTMENT ADVISORY
AND OTHER SERVICE AGREEMENTS
Investment Adviser
MML Advisers, a wholly-owned
subsidiary of MassMutual, serves as investment adviser to each Fund pursuant to Investment Management Agreements with the Trust on behalf
of the Funds (each, an “Advisory Agreement”). Under each Advisory Agreement, MML Advisers is obligated to provide for the
management of each Fund’s portfolio of securities, subject to policies established by the Trustees of the Trust and in accordance
with each Fund’s investment objective, policies, and restrictions as set forth herein and in the Prospectus, and has the right
to select subadvisers to the Funds pursuant to an investment subadvisory agreement (the “Subadvisory Agreement”).
The Advisory Agreement
with each Fund may be terminated by the Board or by MML Advisers without penalty: (i) at any time for cause or by agreement of the
parties or (ii) by either party upon sixty days’ written notice to the other party. In addition, each Advisory Agreement automatically
terminates if it is assigned or if its continuance is not specifically approved at least annually (after its initial 2 year period) by
the Board or by the holders of a majority of the outstanding voting securities of the applicable Fund, and in either case by a majority
of the Trustees who are not parties to the Advisory Agreement or interested persons of any such party. MML Advisers’ liability
regarding its investment management obligations and duties is limited to situations involving its willful misfeasance, bad faith, gross
negligence, or reckless disregard of such obligations and duties.
MML Advisers also serves
as investment adviser to: MassMutual Total Return Bond Fund, MassMutual Strategic Bond Fund, MassMutual Select BlackRock Global Allocation
Fund, MassMutual Diversified Value Fund, MassMutual Fundamental Value Fund, MM S&P 500®Index
Fund, MassMutual Equity Opportunities Fund, MassMutual Fundamental Growth Fund, MassMutual Blue Chip Growth Fund, MassMutual Growth Opportunities
Fund, MassMutual Mid Cap Value Fund, MassMutual Small Cap Value Equity Fund, MassMutual Small Company Value Fund, MM S&P®
Mid Cap Index Fund, MM Russell 2000®
Small Cap Index Fund, MassMutual Mid Cap Growth Fund, MassMutual Small Cap Growth Equity Fund, MM MSCI EAFE®
International Index Fund, MassMutual Overseas Fund, MassMutual Select T. Rowe Price International Equity Fund, MassMutual 20/80 Allocation
Fund, MassMutual 40/60 Allocation Fund, MassMutual 60/40 Allocation Fund, MassMutual 80/20 Allocation Fund, MassMutual RetireSMARTSM
by JPMorgan In Retirement Fund, MassMutual RetireSMARTSM
by JPMorgan 2020 Fund, MassMutual RetireSMARTSM
by JPMorgan 2025 Fund, MassMutual RetireSMARTSM
by JPMorgan 2030 Fund, MassMutual RetireSMARTSM
by JPMorgan 2035 Fund, MassMutual RetireSMARTSM
by JPMorgan 2040 Fund, MassMutual RetireSMARTSM
by JPMorgan 2045 Fund, MassMutual RetireSMARTSM
by JPMorgan 2050 Fund, MassMutual RetireSMARTSM
by JPMorgan 2055 Fund, MassMutual RetireSMARTSM
by JPMorgan 2060 Fund, MassMutual Select T. Rowe Price Retirement Balanced Fund, MassMutual Select T. Rowe Price Retirement 2005
Fund, MassMutual Select T. Rowe Price Retirement 2010 Fund, MassMutual Select T. Rowe Price Retirement 2015 Fund, MassMutual Select T.
Rowe Price Retirement 2020 Fund, MassMutual Select T. Rowe Price Retirement 2025 Fund, MassMutual Select T. Rowe Price Retirement 2030
Fund, MassMutual Select T. Rowe Price Retirement 2035 Fund, MassMutual Select T. Rowe Price Retirement 2040 Fund, MassMutual Select
T. Rowe Price Retirement 2045 Fund, MassMutual Select T. Rowe Price Retirement 2050 Fund, MassMutual Select T. Rowe Price Retirement 2055
Fund, MassMutual Select T. Rowe Price Retirement 2060 Fund, MM Equity Asset Fund, MassMutual Select T. Rowe Price Bond Asset Fund, MassMutual
Select T. Rowe Price Emerging Markets Bond Fund, MassMutual Select T. Rowe Price Large Cap Blend Fund, MassMutual Select T. Rowe Price
Limited Duration Inflation Focused Bond Fund, MassMutual Select T. Rowe Price Real Assets Fund, MassMutual Select T. Rowe Price Small
and Mid Cap Blend Fund, and MassMutual Select T. Rowe Price U.S. Treasury Long-Term Index Fund, which are series of MassMutual Select
Funds, an open-end management investment company; MassMutual U.S. Government Money Market Fund, MassMutual Inflation-Protected and Income
Fund, MassMutual Core Bond Fund, MassMutual Diversified Bond Fund, MassMutual Balanced Fund, MassMutual Disciplined Value Fund, MassMutual
Main Street Fund, MassMutual Disciplined Growth Fund, MassMutual Small Cap Opportunities Fund, MassMutual Global Fund, MassMutual International
Equity Fund, and MassMutual Strategic Emerging Markets Fund, which are series of the Trust; MassMutual Global Floating Rate Fund, MassMutual
Global Credit Income Opportunities Fund, MassMutual Emerging Markets Debt
Blended Total Return Fund, and MassMutual
Global Emerging Markets Equity Fund, which are series of MassMutual Advantage Funds, an open-end management investment company; MML Aggressive
Allocation Fund, MML American Funds Core Allocation Fund, MML American Funds Growth Fund, MML American Funds International Fund, MML Balanced
Allocation Fund, MML Blue Chip Growth Fund, MML Conservative Allocation Fund, MML Equity Income Fund, MML Equity Index Fund, MML Focused
Equity Fund, MML Foreign Fund, MML Fundamental Equity Fund, MML Fundamental Value Fund, MML Global Fund, MML Growth Allocation Fund, MML
Growth & Income Fund, MML Income & Growth Fund, MML International Equity Fund, MML Large Cap Growth Fund, MML Managed Volatility
Fund, MML Mid Cap Growth Fund, MML Mid Cap Value Fund, MML Moderate Allocation Fund, MML Small Cap Growth Equity Fund, MML Small Company
Value Fund, MML Small/Mid Cap Value Fund, and MML Total Return Bond Fund, which are series of MML Series Investment Fund, an open-end
management investment company; MML Blend Fund, MML Dynamic Bond Fund, MML Equity Fund, MML Equity Momentum Fund, MML Equity Rotation Fund,
MML High Yield Fund, MML Inflation-Protected and Income Fund, MML iShares®
60/40 Allocation Fund, MML iShares®
80/20 Allocation Fund, MML Managed Bond Fund, MML Short-Duration Bond Fund, MML Small Cap Equity Fund, MML Special Situations Fund, MML
Strategic Emerging Markets Fund, and MML U.S. Government Money Market Fund, which are series of MML Series Investment Fund II,
an open-end management investment company; MassMutual AccessSM
Pine Point Fund, a closed-end management investment company; certain wholly-owned subsidiaries of MassMutual; and various employee benefit
plans and separate investment accounts in which employee benefit plans invest.
The Trust, on behalf
of each Fund, pays MML Advisers an investment advisory fee monthly, at an annual rate based upon the average daily net assets of that
Fund as follows:
Fund |
|
|
|
|
Short-Duration Bond Fund |
|
|
0.35% on the first $500 million; and
|
|
|
|
|
0.30% on assets over $500 million
|
|
High Yield Fund |
|
|
0.48% on the first $250 million; and
|
|
|
|
|
0.455% on assets over $250 million
|
|
Affiliated Subadviser
Barings
MML Advisers has
entered into Subadvisory Agreements with Barings pursuant to which Barings serves as a subadviser for the Short-Duration Bond Fund and
High Yield Fund. These agreements provide that Barings manage the investment and reinvestment of the assets of the Funds. Barings is located
at 300 South Tryon Street, Charlotte, North Carolina 28202. Barings is a wholly-owned subsidiary of MM Asset Management Holding
LLC, itself a wholly-owned subsidiary of MassMutual Holding LLC, a controlled subsidiary of MassMutual. Barings receives a subadvisory
fee from MML Advisers, based upon each Fund’s average daily net assets, at the following annual rates:
|
Short-Duration Bond Fund |
|
|
0.08% |
|
|
High Yield Fund |
|
|
0.20% |
|
Barings
also provides subadvisory services for the MassMutual U.S. Government Money Market Fund, MassMutual Inflation-Protected and Income Fund,
MassMutual Core Bond Fund, and MassMutual Diversified Bond Fund, each of which is a series of the Trust, for the MassMutual Global Floating
Rate Fund, MassMutual Global Credit Income Opportunities Fund, MassMutual Emerging Markets Debt Blended Total Return Fund, and MassMutual
Global Emerging Markets Equity Fund, each of which is a series of MassMutual Advantage Funds, a registered, open-end investment company
for which MML Advisers serves as investment adviser, for the MML High Yield Fund, MML Inflation-Protected and Income Fund, MML Managed
Bond Fund, MML Short-Duration Bond Fund, and MML U.S. Government Money Market Fund, each of which is a series of MML Series Investment
Fund II, a registered, open-end investment company for which MML Advisers serves as investment adviser, and for the MassMutual AccessSM
Pine Point Fund, a registered, closed-end investment company for which MML Advisers serves as investment adviser.
In addition, BIIL
serves as a sub-subadviser for the Short-Duration Bond Fund and High Yield Fund. BIIL is a wholly owned subsidiary of Barings. Barings
has entered into sub-subadvisory agreements with BIIL under which, subject to the supervision of Barings, BIIL is authorized to conduct
securities transactions on behalf of each of the Short-Duration Bond Fund and High Yield Fund. BIIL is located at 20 Old Bailey, London,
EC4M 7BF, United Kingdom. BIIL does not receive a fee from Barings under these sub-subadvisory agreements. BIIL also provides sub-subadvisory
services for the MassMutual Core Bond Fund, MassMutual Diversified Bond Fund, and MassMutual Inflation-Protected and Income Fund, each
of which is a series of the Trust, for the MassMutual Global Floating Rate Fund, MassMutual Global Credit Income Opportunities Fund, MassMutual
Emerging Markets Debt Blended Total Return Fund, and MassMutual Global Emerging Markets Equity Fund, each of which is a series of MassMutual
Advantage Funds, a registered, open-end investment company for which MML Advisers serves as investment adviser, for the MML High Yield
Fund, MML Inflation-Protected and Income Fund, MML Managed Bond Fund, and MML Short-Duration Bond Fund, each of which is a series of MML
Series Investment Fund II, a registered, open-end investment company for which MML Advisers serves as investment adviser, and
for the MassMutual AccessSM
Pine Point Fund, a registered, closed-end investment company for which MML Advisers serves as investment adviser.
The Funds’ subadvisory
fees are paid by MML Advisers out of the advisory fees previously disclosed above.
Information about each
portfolio manager’s compensation, other accounts managed by the portfolio managers, and each portfolio manager’s ownership
of securities in the relevant Fund can be found in Appendix C.
Administrator, Sub-Administrators,
and Shareholder Servicing Agent
MML Advisers has entered
into an administrative and shareholder services agreement (the “Administrative and Shareholder Services Agreement”) with
the Trust, on behalf of each Fund, pursuant to which MML Advisers is obligated to provide certain administrative and shareholder services.
MML Advisers may, at its expense, employ others to supply all or any part of the services to be provided to the Funds pursuant to the
Administrative and Shareholder Services Agreement. MML Advisers has entered into sub-administration agreements with both State Street
and MassMutual pursuant to which State Street and MassMutual each assist in many aspects of fund administration. Pursuant to a letter
agreement between the Trust, MML Advisers, and State Street, the Trust has agreed to pay State Street for the services it provides pursuant
to the sub-administration agreement with MML Advisers, although MML Advisers remains ultimately responsible for the payment of any such
fees owed to State Street. The Trust, on behalf of each Fund, pays MML Advisers an administrative services fee monthly at an annual rate
based upon the average daily net assets of the applicable class of shares of each Fund as shown in the table below:
|
|
|
Class I |
|
|
Class R5 |
|
|
Service Class |
|
|
Administrative Class |
|
|
Class R4 |
|
|
Class A |
|
|
Class R3 |
|
|
Class Y |
|
|
Class L |
|
|
Class C |
|
Short-Duration Bond Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20%
|
|
|
|
|
|
0.10% |
|
|
|
|
|
0.05% |
|
|
|
|
|
0.05% |
|
|
High Yield Fund |
|
|
|
|
None |
|
|
|
|
|
0.10% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20% |
|
|
|
|
|
0.30% |
|
|
|
|
|
0.20%
|
|
|
|
|
|
0.05% |
|
|
|
|
|
N/A |
|
|
|
|
|
None |
|
|
Prior
to December 31, 2020, the Trust had entered into a separate Supplemental Shareholder Services Agreement with MassMutual, on behalf
of Service Class shares, Administrative Class shares, and Class A shares of each Fund. Fees payable under the Supplemental Shareholder
Services Agreement were intended to compensate MassMutual for its provision of shareholder services to the Funds’ investors and
were calculated and paid based on the average daily net assets attributable to the relevant share classes of the Funds separately, at
the following annual rates: 0.05% for Service Class shares, and 0.15% for Administrative Class shares and Class A shares. MassMutual
may have paid these fees to other intermediaries for providing shareholder services to the Funds’ investors.
MassMutual, the parent
company of MML Advisers, pays to an affiliate of Empower Retirement, LLC (“Empower”) an amount equal to the profit realized
by MML Advisers with respect to shares beneficially owned by retirement plans through recordkeeping platforms maintained by Empower or
an affiliate.
Pursuant
to the Advisory Agreements, Subadvisory Agreements, Administrative and Shareholder Services Agreement, and Supplemental Shareholder Services
Agreement described above, for the fiscal years ended September 30, 2021, September 30, 2020, and September 30, 2019,
the amount of advisory fees paid by each Fund, the amount of subadvisory fees paid by each Fund, the amount of any advisory fees waived
by MML Advisers, the amount of administrative fees paid by each Fund, the amount of supplemental shareholder services fees paid by each
Fund, and the amount of any fees reimbursed by MML Advisers are as follows:
|
|
|
Fiscal Year Ended September 30, 2021
|
|
|
|
|
Advisory Fees Paid |
|
|
Subadvisory Fees Paid |
|
|
Advisory Fees Waived |
|
|
Administrative Fees Paid |
|
|
Supplemental Shareholder Services Fees Paid
|
|
|
Other Expenses Reimbursed |
|
Short-Duration Bond Fund |
|
|
|
$ |
1,393,181 |
|
|
|
|
$ |
315,802 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
342,861 |
|
|
|
|
$ |
31,547 |
|
|
|
|
$ |
— |
|
|
High Yield Fund |
|
|
|
|
2,686,755 |
|
|
|
|
|
1,141,390 |
|
|
|
|
|
— |
|
|
|
|
|
378,655 |
|
|
|
|
|
23,028 |
|
|
|
|
|
— |
|
|
|
|
|
Fiscal Year Ended September 30, 2020
|
|
|
|
|
Advisory Fees Paid |
|
|
Subadvisory Fees Paid |
|
|
Advisory Fees Waived |
|
|
Administrative Fees Paid |
|
|
Supplemental Shareholder Services Fees Paid
|
|
|
Other Expenses Reimbursed |
|
Short-Duration Bond Fund |
|
|
|
$ |
1,644,782 |
|
|
|
|
$ |
374,793 |
|
|
|
|
|
— |
|
|
|
|
$ |
358,088 |
|
|
|
|
$ |
140,891 |
|
|
|
|
|
— |
|
|
High Yield Fund |
|
|
|
|
2,503,820 |
|
|
|
|
|
1,060,289 |
|
|
|
|
|
— |
|
|
|
|
|
341,659 |
|
|
|
|
|
98,365 |
|
|
|
|
|
— |
|
|
|
|
|
Fiscal Year Ended September 30, 2019
|
|
|
|
|
Advisory Fees Paid |
|
|
Subadvisory Fees Paid |
|
|
Advisory Fees Waived |
|
|
Administrative Fees Paid |
|
|
Supplemental Shareholder Services Fees Paid
|
|
|
Other Expenses Reimbursed |
|
Short-Duration Bond Fund |
|
|
|
$ |
1,747,768 |
|
|
|
|
$ |
400,014 |
|
|
|
|
|
— |
|
|
|
|
$ |
407,893 |
|
|
|
|
$ |
140,891 |
|
|
|
|
|
— |
|
|
High Yield Fund |
|
|
|
|
2,569,909 |
|
|
|
|
|
1,094,721 |
|
|
|
|
|
— |
|
|
|
|
|
359,751 |
|
|
|
|
|
104,550 |
|
|
|
|
|
— |
|
|
THE
DISTRIBUTOR
The
Funds’ shares are continuously distributed by ALPS Distributors, Inc. (the “Distributor”), located at 1290 Broadway,
Suite 1000, Denver, Colorado 80203, pursuant to a Distribution Agreement with the Trust (the “Distribution Agreement”).
The Distributor has agreed to act in good faith and to exercise commercially reasonable care and diligence
to sell shares of the Funds but has not agreed to sell any specific number of shares of the Funds. The Distributor’s compensation
for serving as such is the amounts received by it from time to time under the Funds’ Rule 12b-1 plan. In addition, the Distributor
receives any front-end sales charges imposed on the sales of Class L and Class A shares of the Funds. Sales loads paid to MML
Distributors, LLC, the prior distributor for the Funds, in respect of the Funds during the fiscal year ended September 30, 2021 were
$2,157.
Shares
of each Fund may be purchased through agents of the Distributor who are registered representatives and licensed by the Distributor to
sell Fund shares, and through registered representatives of selected broker-dealers which are members of FINRA and which have entered
into selling agreements with the Distributor. The Distributor may reallow up to 100% of any sales load on shares sold by dealers with
whom it has sales agreements. Broker-dealers with which the Distributor has entered into selling agreements may charge their customers
a processing or service fee in connection with the purchase or redemption of Fund shares. The amount and applicability of such a fee is
determined and disclosed to such customers by each individual broker-dealer.
The
Distribution Agreement will continue in effect for an initial two-year period, and thereafter continues in effect for successive annual
periods, provided such continuance is specifically approved at least annually (i) by the Board or (ii) by a vote of a majority
of the outstanding voting securities of the relevant
portfolio of the Trust, provided that in either event
the continuance is also approved by the majority of the Trustees of the Trust who are not “interested persons” (as
defined in the 1940 Act) of any party to the Distribution Agreement by vote cast in person at a meeting called for the purpose of voting
on such approval.
DISTRIBUTION
AND SERVICE PLAN
The
Trust has adopted, with respect to the Class Y, Class L, and Class C shares of the Short-Duration Bond Fund, the Class Y
and Class C shares of the High Yield Fund, and the Class I, Class R5, Service Class, Administrative Class, Class R4,
Class A, and Class R3 shares of each Fund, an Amended and Restated Rule 12b-1 Plan (the “Plan”) pursuant
to Rule 12b-1 under the 1940 Act. The Trustees of the Trust, including a majority of the Trustees who are not interested persons
of the Trust and who have no direct or indirect financial interest in the operation of the Plan, by vote cast in person at a meeting called
for the purpose of voting on the Plan, approved the Plan for each Fund and share class.
Continuance of the
Plan is subject to annual approval by a vote of the Trustees, including a majority of the Independent Trustees, cast in person at a meeting
called for that purpose. All material amendments to the Plan must be likewise approved by the Trustees and the Independent Trustees. The
Plan may not be amended in order to increase materially the costs which a Fund may bear for distribution pursuant to the Plan without
also being approved by a majority of the outstanding voting securities of the relevant class of the Fund. The Plan terminates automatically
in the event of its assignment and may be terminated without penalty, at any time, by a vote of a majority of the Independent Trustees
or by a vote of a majority of the outstanding voting securities of the relevant class of the Fund. The Plan provides that the Distributor
shall provide to the Trustees, and the Board shall review at least quarterly, a written report of the amounts expended and the purposes
for which such expenditures were made.
The
Plan is a compensation plan, authorizing payments to the Distributor up to the following annual rates: 0.25% and 0.50% of the average
daily net assets of Class L and Class C shares of the Short-Duration Bond Fund, respectively, 1.00% of the average daily net
assets of Class C shares of the High Yield Fund, 0.25% of the average daily net assets of Class R4 and Class A shares of
each Fund, and 0.50% of the average daily net assets of Class R3 shares of each Fund. A Fund may make payments under the Plan to
compensate the Distributor for services provided and expenses incurred by it for purposes of promoting the sale of the relevant class
of shares, reducing redemptions of shares, or maintaining or improving services provided to shareholders.
MML
Advisers may pay amounts in respect of the distribution or servicing of a Fund’s shares out of administrative or advisory fees
received by it from that Fund. The Plan authorizes such payments for Class I, Class R5, Service Class, Administrative Class,
and Class Y shares of each Fund, although MML Advisers may make such payments in respect of shares of any class. No additional fees
are paid by a Fund under the Plan.
As
of the fiscal year ended September 30, 2021, Class Y, Class L, and Class C shares of the Short-Duration Bond Fund
and Class Y and Class C shares of the High Yield Fund had not commenced operations.
The
following table discloses the 12b-1 fees paid in the fiscal year ending September 30, 2021 by the Trust under the Plan for Class R4,
Class A, and Class R3 shares of the Funds:
|
|
|
Class R4 12b-1 Servicing Fees |
|
|
Class A 12b-1 Servicing Fees |
|
|
Class R3 12b-1 Servicing Fees |
|
|
Class R3 12b-1 Distribution Fees |
|
Short-Duration Bond Fund |
|
|
|
$ |
27,947 |
|
|
|
|
$ |
103,232 |
|
|
|
|
$ |
23,305 |
|
|
|
|
$ |
23,305 |
|
|
High Yield Fund |
|
|
|
|
101,471 |
|
|
|
|
|
52,229 |
|
|
|
|
|
86,319 |
|
|
|
|
|
86,319 |
|
|
|
|
|
|
$ |
129,418 |
|
|
|
|
$ |
155,461 |
|
|
|
|
$ |
109,624 |
|
|
|
|
$ |
109,624 |
|
|
For
the fiscal year ending September 30, 2021, MML Distributors, LLC, the prior distributor for the Funds, paid to MassMutual the 12b-1
fees and MassMutual retained at least approximately 97% of the 12b-1 fees it received as compensation for recordkeeping services provided
by MassMutual to retirement
and other employee benefit plans,
as agreed between MassMutual and those plans. MassMutual paid the remainder, as agent of MML Distributors, LLC, to various unaffiliated
financial intermediaries as compensation for distribution services and/or shareholder services provided by them.
PAYMENTS
TO FINANCIAL INTERMEDIARIES
Financial intermediaries
may receive various forms of compensation from a Fund in the form of distribution and service (12b-1) plan payments as described above.
They may also receive payments or concessions from the Distributor, derived from sales charges paid by the financial intermediary’s
clients. In addition, MML Advisers and the Distributor (including their affiliates) may make payments to financial intermediaries in connection
with the intermediaries’ offering and sales of Fund shares and shares of other funds, or their provision of marketing or promotional
support, transaction processing or administrative services. Among the financial intermediaries that may receive these payments are brokers
or dealers who sell or hold shares of a Fund, banks (including bank trust departments), registered investment advisers, insurance companies,
retirement plan or qualified tuition program administrators, third party administrators, recordkeepers, or other institutions that have
selling, servicing or similar arrangements with MML Advisers or the Distributor. The payments to financial intermediaries vary by the
types of product sold, the features of a Fund share class, and the role played by the intermediary.
Types of payments to
financial intermediaries may include, without limitation, all or portions of the following: Payments made by a Fund, or by an investor
buying or selling shares of a Fund, including:
•
an
initial front-end sales charge, all or a portion of which is payable by the Distributor to financial intermediaries;
•
ongoing
asset-based distribution and/or service fees;
•
shareholder
servicing expenses that may be paid from Fund assets to reimburse financial intermediaries, MML Advisers, or the Distributor for Fund
expenses they incur for providing omnibus accounting, recordkeeping, networking, sub-transfer agency, or other administrative or shareholder
services (including retirement plan and 529 plan administrative services fees).
In addition, MML Advisers
may, at its discretion, make the following types of payments from its own resources, which may include profits MML Advisers derives from
investment advisory fees paid by a Fund. Payments are made based on guidelines established by the MML Advisers, subject to applicable
law. These payments are often referred to as “revenue sharing” payments, and may include:
•
compensation
for marketing support, support provided in offering shares in a Fund through certain trading platforms and programs, and transaction processing
or other services;
•
other
compensation, to the extent the payment is not prohibited by law or by any self-regulatory agency, such as FINRA.
Although a broker or
dealer that sells Fund shares may also act as a broker or dealer in connection with the purchase or sale of portfolio securities by a
Fund, MML Advisers does not consider a financial intermediary’s sales of shares of a Fund when choosing brokers or dealers to effect
portfolio transactions for a Fund.
Revenue sharing payments
can pay for distribution-related or asset retention items including, without limitation:
•
transactional
support, one-time charges for setting up access for a Fund on particular trading systems, and paying the financial intermediary’s
networking fees;
•
program
support, such as expenses related to including the Funds in retirement plans, college savings plans, fee-based advisory or wrap fee programs,
fund “supermarkets,” bank or trust company products or insurance companies’ variable annuity or variable life insurance
products;
•
placement
on the dealer’s list of offered funds and providing representatives of MML Advisers or the Distributor with access to a financial
intermediary’s sales meetings, sales representatives, and management representatives; or
•
firm support, such as business
planning assistance, advertising, or educating a financial intermediary’s sales personnel about the Funds and shareholder financial
planning needs.
These payments may
provide an incentive to financial intermediaries to actively market or promote the sale of shares of a Fund, or to support the marketing
or promotional efforts of the Distributor in offering shares of a Fund. In addition, some types of payments may provide a financial intermediary
with an incentive to recommend a Fund or a particular share class. Financial intermediaries may earn profits on these payments, since
the amount of the payments may exceed the cost of providing the services. Certain of these payments are subject to limitations under applicable
law. Financial intermediaries may categorize and disclose these arrangements to their clients and to members of the public in a manner
different from the disclosures in a Fund’s Prospectus and this SAI. You should ask your financial intermediary for information
about any payments it receives from a Fund, MML Advisers, or the Distributor and any services it provides, as well as the fees and commissions
it charges.
CUSTODIAN,
DIVIDEND DISBURSING AGENT, AND TRANSFER AGENT
State Street, located
at 1 Iron Street, Boston, Massachusetts 02210, is the custodian of each Fund’s investments (the “Custodian”) and
ALPS Fund Services, Inc., located at 1290 Broadway, Suite 1000, Denver, Colorado 80203, is the Funds’ transfer agent and dividend
disbursing agent (the “Transfer Agent”). As custodian, State Street has custody of the Funds’ securities and maintains
certain financial and accounting books and records. As Custodian and Transfer Agent, respectively, State Street and ALPS Fund Services,
Inc. do not assist in, and are not responsible for, the investment decisions and policies of the Funds.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche
LLP, located at 200 Berkeley Street, Boston, Massachusetts 02116, is the Trust’s independent registered public accounting firm.
Deloitte & Touche LLP provides audit and related services, and assistance in connection with various SEC filings.
CODES
OF ETHICS
The Trust, MML Advisers,
the Distributor, Barings, and BIIL have each adopted a code of ethics (the “Codes of Ethics”) pursuant to Rule 17j-1
under the 1940 Act and Rule 204A-1 under the Investment Advisers Act of 1940, as amended. The Codes of Ethics permit Fund personnel
to invest in securities, including securities that may be purchased or held by a Fund, for their own accounts, but require compliance
with various pre-clearance requirements (with certain exceptions). The Codes of Ethics are on public file with, and are available from,
the SEC.
PORTFOLIO
TRANSACTIONS AND BROKERAGE
Transactions on stock
exchanges, commodities markets and futures markets and other agency transactions involve the payment by the Funds of negotiated brokerage
commissions. Such commissions may vary among different brokers. A particular broker may charge different commissions according to such
factors as execution venue and exchange. Although the Funds do not typically pay commissions for principal transactions in the OTC markets,
such as the markets for most fixed income securities and certain derivatives, an undisclosed amount of profit or “mark-up”
is included in the price a Fund pays. In underwritten offerings, the price paid by a Fund includes a disclosed, fixed commission or discount
retained by the underwriter or dealer.
The primary consideration
in placing portfolio security transactions with broker-dealers for execution is to obtain the best execution of orders. Each Fund’s
investment adviser or subadviser attempts to achieve this result by selecting broker-dealers to execute portfolio transactions on the
basis of their professional capability, the value and quality of their brokerage services, including anonymity and trade confidentiality,
and the level of their brokerage commissions.
Under each Advisory
or Subadvisory Agreement and as permitted by Section 28(e) of the Exchange Act and to the extent not otherwise prohibited by applicable
law, an investment adviser or subadviser may cause a Fund to pay a broker-dealer that provides brokerage and research services to the
investment adviser
or subadviser an amount of commission for effecting a
securities transaction for a Fund in excess of the amount other broker-dealers would have charged for the transaction if the investment
adviser or subadviser determines in good faith that the greater commission is reasonable in relation to the value of the brokerage and
research services provided by the executing broker-dealer viewed in terms of either a particular transaction or the investment adviser’s
or subadviser’s overall responsibilities to the Trust and to its other clients. The term “brokerage and research services”
includes: providing advice as to the value of securities, the advisability of investing in, purchasing, or selling securities, and the
availability of securities or of purchasers or sellers of securities; furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and the performance of accounts; and effecting securities transactions and
performing functions incidental thereto such as clearance and settlement.
The investment adviser
or subadvisers may obtain third-party research from broker-dealers or non-broker-dealers by entering into commission sharing arrangements
(“CSAs”). Under a CSA, the executing broker-dealer agrees that part of the commissions it earns on certain equity trades
will be allocated to one or more research providers as payment for research. CSAs allow an investment adviser or subadviser to direct
broker-dealers to pool commissions that are generated from orders executed at that broker-dealer, and then periodically direct the broker-dealer
to pay third party research providers for research.
Brokerage and research
services provided by brokers are used for the benefit of all of the investment adviser’s or subadviser’s clients and not
solely or necessarily for the benefit of the Trust. The investment adviser or subadvisers attempt to evaluate the quality of brokerage
and research services provided by brokers. Results of this effort are sometimes used by the investment adviser or subadvisers as a consideration
in the selection of brokers to execute portfolio transactions.
The investment advisory
fee that the Trust pays on behalf of each Fund to MML Advisers will not be reduced as a consequence of an investment adviser’s
or subadviser’s receipt of brokerage and research services. To the extent the Trust’s portfolio transactions are used to
obtain such services, the brokerage commissions paid by the Trust will exceed those that might otherwise be paid, provided that the investment
adviser or subadviser determines in good faith that such excess amounts are reasonable in relation to the services provided. Such services
would be useful and of value to an investment adviser or subadviser in serving both the Trust and other clients and, conversely, such
services obtained by the placement of brokerage business of other clients would be useful to an investment adviser or subadviser in carrying
out its obligations to the Trust.
Subject to the overriding
objective of obtaining the best execution of orders, the Funds may use broker-dealer affiliates of their respective investment adviser
or subadvisers to effect portfolio brokerage transactions under procedures adopted by the Trustees. Pursuant to these procedures, the
commission, fee, or other remuneration paid to the affiliated broker-dealer in connection with a portfolio brokerage transaction effected
on a securities exchange must be reasonable and fair in comparison to those of other broker-dealers for comparable transactions involving
similar securities being purchased or sold on a securities exchange during a comparable time period. This standard would allow the affiliated
broker or dealer to receive no more than the remuneration which would be expected to be received by an unaffiliated broker.
The
Funds may allocate brokerage transactions to broker-dealers (including affiliates of their respective investment adviser or subadvisers)
who have entered into arrangements with the Trust under which the broker-dealer allocates a portion of the commissions paid back to the
Fund. The transaction quality must, however, be comparable to that of other qualified broker-dealers.
The revised European
Union (“EU”) Markets in Financial Instruments Directive (“MiFID II”), which became effective January 3,
2018, requires EU investment managers in the scope of the EU Markets in Financial Instruments Directive to pay for research services from
brokers and dealers directly out of their own resources or by establishing “research payment accounts” for each client,
rather than through client commissions. MiFID II’s research requirements present various compliance and operational considerations
for investment advisers and broker-dealers serving clients in both the United States and the EU. It is possible that an investment adviser
or subadviser subject to MiFID II will cause a Fund to pay for research services through client commissions in circumstances where the
investment adviser or subadviser is
prohibited from causing its other client accounts to
do so, including where the investment adviser or subadviser aggregates trades on behalf of a Fund and those other client accounts. In
such situations, the Fund would bear the additional amounts for the research services and the Fund’s investment adviser’s
or subadviser’s other client accounts would not, although the investment adviser’s or subadviser’s other client accounts
might nonetheless benefit from those research services.
For the fiscal years
ended September 30, 2021, September 30, 2020, and September 30, 2019, the Short-Duration Bond Fund paid brokerage commissions
of $51,367, $59,305, and $70,733, respectively.
For the fiscal years
ended September 30, 2021, September 30, 2020, and September 30, 2019, the Funds did not pay brokerage commissions to an
affiliate of the Funds’ investment adviser or subadviser.
For the fiscal year
ended September 30, 2021, the Funds did not have any trades directed to a broker or dealer because of research services provided.
The following table
discloses the aggregate value of securities held by the Short-Duration Bond Fund issued by one or more of its “regular brokers
or dealers” (as defined in the 1940 Act), or their parent companies, for the fiscal year ended September 30, 2021.
Regular
Broker or Dealer |
|
|
Aggregate Value of Securities
Held |
|
Goldman Sachs Group, Inc. |
|
|
|
$ |
3,736,616 |
|
|
Citigroup, Inc. |
|
|
|
|
3,097,888 |
|
|
Bank of America Corp. |
|
|
|
|
2,723,842 |
|
|
Morgan Stanley |
|
|
|
|
2,658,256 |
|
|
UBS Group AG |
|
|
|
|
1,954,756 |
|
|
Credit Suisse AG |
|
|
|
|
1,915,025 |
|
|
Barclays Plc |
|
|
|
|
1,892,261 |
|
|
JPMorgan Chase & Co. |
|
|
|
|
933,546 |
|
|
|
|
|
|
$ |
18,912,190 |
|
|
DESCRIPTION OF SHARES
The Trust, an open-end,
management investment company, is organized as a Massachusetts business trust under the laws of Massachusetts by an Agreement and Declaration
of Trust dated August 1, 1994, which was amended and restated as of November 21, 2011. A copy of the Declaration of Trust is
on file with the Secretary of The Commonwealth of Massachusetts. The fiscal year for each Fund ends on September 30.
The Declaration of
Trust permits the Trustees, without shareholder approval, to issue an unlimited number of shares and divide those shares into an unlimited
number of series of shares, representing separate investment portfolios with rights determined by the Trustees. Shares of the Funds are
transferable and have no preemptive, subscription, or conversion rights. Shares of the Funds are entitled to dividends as declared by
the Trustees. In the event of liquidation of a Fund, the Trustees would distribute, after paying or otherwise providing for all charges,
taxes, expenses, and liabilities belonging to the Fund, the remaining assets belonging to the Fund among the holders of outstanding shares
of the Fund. The Trustees have currently authorized the issuance of an unlimited number of full and fractional shares of 14 series, two
of which are described in this SAI.
The
Trustees may divide the shares of any series into two or more classes having such preferences or special or relative rights and privileges
as the Trustees may determine, without obtaining shareholder approval. The Trustees have currently authorized the establishment and designation
of ten classes of shares, between one and ten classes of shares for each series of the Trust: Class I Shares, Class R5 Shares,
Service Class Shares, Administrative Class Shares, Class A Shares, Class R4 Shares, Class R3 Shares, Class Y
Shares, Class L Shares, and Class C Shares. Class I Shares, Class R5 Shares, Service Class Shares, Administrative
Class Shares, Class A Shares, Class R4 Shares, and Class R3 Shares are offered by each series of the Trust, except
the U.S. Government Money Market Fund which only offers Class R5 Shares. Class Y Shares and Class C Shares are only offered
by the Short-Duration Bond Fund and High Yield Fund. Class L Shares are only offered by the Short-Duration Bond Fund. All shares
of a particular class of each series represent an equal proportionate interest in the assets and liabilities belonging to that series
allocable to that class.
The Trustees may also,
without shareholder approval, combine two or more existing series (or classes) into a single series (or class).
The Declaration of
Trust provides for the perpetual existence of the Trust. The Declaration of Trust, however, provides that the Trust may be terminated
at any time by vote of at least 50% of the shares of each series entitled to vote and voting separately by series or by the Trustees by
written notice to the shareholders. Any series of the Trust may be terminated by vote of at least 50% of shareholders of that series or
by the Trustees by written notice to the shareholders of that series.
Shares of the Funds
entitle their holders to one vote per share, with fractional shares voting proportionally, in the election of Trustees and on other matters
submitted to the vote of shareholders. On any matter submitted to a vote of shareholders, all shares of the Trust then entitled to vote
shall, except as otherwise provided in the Declaration of Trust or the Bylaws, be voted in the aggregate as a single class without regard
to series or class, except that: (i) when required by the 1940 Act or when the Trustees shall have determined that the matter affects
one or more series or classes materially differently, shares will be voted by individual series or class; and (ii) when the Trustees
have determined that the matter affects only the interests of one or more series or classes, then only shareholders of such series or
classes shall be entitled to vote thereon. A separate vote will be taken by the applicable Fund on matters affecting the particular Fund,
as determined by the Trustees. For example, a change in a fundamental investment policy for a particular Fund would be voted upon only
by shareholders of that Fund. In addition, a separate vote will be taken by the applicable class of a Fund on matters affecting the particular
class, as determined by the Trustees. For example, the adoption of a distribution plan relating to a particular class and requiring shareholder
approval would be voted upon only by shareholders of that class. Shares of each Fund have noncumulative voting rights with respect to
the election of trustees.
The Trust is not required
to hold annual meetings of its shareholders. However, special meetings of the shareholders may be called for the purpose of electing Trustees
and for such other purposes as may be prescribed by law, by the Declaration of Trust, or by the Bylaws. There will normally be no meetings
of
shareholders for the purpose of electing Trustees except
that the Trust will hold a shareholders’ meeting as required by applicable law or regulation.
The Declaration of
Trust may be amended by the Trustees without a shareholder vote, except to the extent a shareholder vote is required by applicable law,
the Declaration of Trust or the Bylaws, or as the Trustees may otherwise determine.
Under Massachusetts
law, shareholders of a Massachusetts business trust could, under certain circumstances, be held personally liable for the obligations
of the Trust. However, the Declaration of Trust disclaims liability of the shareholders, Trustees, or officers for acts or obligations
of the Trust, which are binding only on the assets and property of the Trust, and require that notice of such disclaimer be given in each
note, bond, contract, instrument, certificate, or undertaking made or issued on behalf of the Trust by the Trustees or officers. In addition,
the Declaration of Trust provides that shareholders of a Fund are entitled to indemnification out of the assets of their Fund to the extent
that they are held personally liable for the obligations of their Fund solely by reason of being or having been a shareholder. Thus, the
risk of a shareholder of a Fund incurring financial loss on account of shareholder liability is considered remote since it is limited
to circumstances in which the disclaimer is inoperative and his or her Fund is unable to meet its obligations.
The Declaration of
Trust also permits the Trustees to charge shareholders directly for custodial, transfer agency, and servicing expenses, but the Trustees
have no present intention to charge shareholders directly for such expenses.
The Declaration of
Trust further provides that a Trustee will not be personally liable for errors of judgment or mistakes of fact or law. However, nothing
in the Declaration of Trust protects a Trustee against any liability to which the Trustee would otherwise be subject by reason of his
or her own willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her
office. The Declaration of Trust also provides for indemnification of each of its Trustees and officers, except that such Trustees and
officers may not be indemnified against any liability to the Trust or its shareholders to which he or she would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her
office.
PROGRAMS
FOR REDUCING OR ELIMINATING SALES CHARGES
The following information
supplements the discussion of methods for reducing or eliminating sales charges for Class L and Class C shares of the Funds
found in the Prospectus.
Right of Accumulation
(Class L Shares Only)
Reduced sales charges
on Class L shares of the Short-Duration Bond Fund can be obtained by combining a current purchase with prior purchases of all classes
of shares of any Participating Funds (as defined in the Prospectus). The applicable sales charge is based on the combined total of:
(1)
the
current purchase of Class L shares; and
(2)
the
value at the public offering price at the close of business on the previous day of the Short-Duration Bond Fund’s and any classes
of a Participating Fund’s shares held by the shareholder, the shareholder’s spouse, or the shareholder’s minor children.
MML Advisers, the Distributor,
or a financial intermediary must be promptly notified of each purchase that entitles a shareholder to a reduced sales charge. Such reduced
sales charge will be applied upon confirmation of the shareholder’s holdings by the Transfer Agent. The Short-Duration Bond Fund
may terminate or amend this Right of Accumulation at any time without notice.
Letter of Intent (Class L
Shares Only)
Any person may qualify
for reduced sales charges on purchases of Class L shares of the Short-Duration Bond Fund made within a 13-month period pursuant to
a Letter of Intent (“Letter”). A shareholder may include, as an accumulation credit toward the completion of such Letter,
the value of all
shares (of any class) of any Participating Funds held
by the shareholder on the date of the Letter. The value is determined at the public offering price on the date of the Letter. Purchases
made through reinvestment of distributions do not count toward satisfaction of the Letter. Upon request, a Letter may reflect purchases
within the previous 90 days.
During the term of
the Letter, the Transfer Agent will hold shares in escrow to secure payment of the higher sales charges applicable to Class L shares
actually purchased if the terms of the Letter are not satisfied. Dividends and capital gains will be paid on all escrowed shares, and
these shares will be released (upon satisfaction of any amount owed for sales charges if the terms of the Letter are not satisfied) when
the amount indicated has been purchased or at the end of the period covered by the Letter, whichever occurs first. A Letter does not obligate
the investor to buy or the Funds to sell the amount specified in the Letter.
If a shareholder exceeds
the amount specified in the Letter and reaches an amount that would qualify for a further quantity discount, a retroactive price adjustment
will be made at the time of expiration of the Letter. The resulting difference in offering price will purchase additional shares for the
shareholder’s account at the applicable offering price. As a part of this adjustment, a financial intermediary shall return to
the Distributor the excess commission previously paid to the financial intermediary during the 13-month period.
If the amount specified
in the Letter is not purchased, the shareholder shall remit to the Distributor an amount equal to the difference between the sales charge
paid and the sales charge that should have been paid. If the shareholder fails within 20 days after a written request to pay such
a difference in sales charge, the Transfer Agent will redeem that number of escrowed Class L shares to equal such difference. The
additional amount of a financial intermediary’s commission from the applicable offering price shall be remitted by the Distributor
to the financial intermediary.
Additional information
about, and terms of, Letters of Intent are available from a financial intermediary, or from the Transfer Agent at 1-855-439-5459.
Reinstatement Privilege
(Class L and Class C Shares Only)
A shareholder who has
redeemed Class L shares of the Short-Duration Bond Fund or Class C shares of a Fund may, upon request, reinstate within one
year a portion or all of the proceeds of such sale in Class L shares or Class C shares, respectively, of the Fund or another
Participating Fund at the NAV next determined after receipt by MML
Advisers or the Distributor
of a reinstatement request and receipt by the Transfer Agent of payment for such shares. The Distributor will not pay a financial intermediary
a commission on any reinvested amount. Any contingent deferred sales charge (“CDSC”) paid at the time of the redemption
will be credited to the shareholder upon reinstatement. The period between the redemption and the reinstatement will not be counted in
aging the reinstated shares for purposes of calculating any CDSC or conversion date. Shareholders who desire to exercise this privilege
should contact MML Advisers, the Distributor, or a financial intermediary. Shareholders may exercise this privilege an unlimited number
of times. Exercise of this privilege does not alter the U.S. federal income tax treatment of any capital gains realized on the prior sale
of Fund shares, but to the extent any such shares were sold at a loss, some or all of the loss may be disallowed for tax purposes. Please
consult your tax adviser.
Privileges of Financial
Intermediaries
Class L shares
of the Short-Duration Bond Fund may be sold at NAV, without a sales charge, to registered representatives and employees of financial intermediaries
(including their affiliates) and such persons’ families and their beneficial accounts.
Sponsored Arrangements
Class L shares
of the Short-Duration Bond Fund may be purchased at a reduced or zero sales charge pursuant to sponsored arrangements, which include programs
under which an organization makes recommendations to, or permits group solicitation of, its employees, members, or participants in connection
with the purchase of shares of the Fund on an individual
basis. The amount of the sales charge reduction will reflect the anticipated reduction in sales expense associated with sponsored arrangements.
The reduction in sales expense, and therefore the reduction in sales charge, will vary depending on factors such as the size and stability
of the organization’s group, the term of the organization’s existence, and certain characteristics of the members of its
group. The Fund reserves the right to revise the terms of or to suspend or discontinue sales pursuant to sponsored arrangements at any
time.
Class L shares
of the Short-Duration Bond Fund also may be purchased at a reduced or zero sales charge by (i) clients of any financial intermediary
that has entered into an agreement with MML Advisers or the Distributor pursuant to which the Fund is included as an investment option
in programs involving fee-based compensation arrangements; (ii) clients of any financial intermediary that has entered into an agreement
with MML Advisers or the Distributor pursuant to which such financial intermediary offers Fund shares through self-directed investment
brokerage accounts that do not charge transaction fees to its clients; and (iii) participants in employer-sponsored retirement plans
(e.g. 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans, and defined benefit plans).
For purposes of this waiver, employer-sponsored retirement plans do not include Simplified Employee Pension Plan IRAs (“SEP
IRAs”), Simple IRAs, Salary Reduction Simplified Employee Pension Plans (“SAR-SEPs”), or Keogh plans.
Waiver of CDSCs
CDSCs may be waived
on redemptions in the following situations with the proper documentation:
(1)
Death.
CDSCs may be waived on redemptions within one year following the death of (i) the sole shareholder on an individual account, (ii) a
joint tenant where the surviving joint tenant is the deceased’s spouse, or (iii) the beneficiary of a Uniform Gifts to Minors
Act (“UGMA”), Uniform Transfers to Minors Act (“UTMA”), or other custodial account. If, upon the occurrence
of one of the foregoing, the account is transferred to an account registered in the name of the deceased’s estate, the CDSC will
be waived on any redemption from the estate account occurring within one year after the death. If Class L or Class C shares
are not redeemed within one year of the death, they will remain subject to the applicable CDSC when redeemed from the transferee’s
account. If the account is transferred to a new registration and then a redemption is requested, the applicable CDSC will be charged.
(2)
Disability.
CDSCs may be waived on redemptions occurring within one year after the sole shareholder on an individual account or a joint tenant on
a spousal joint tenant account becomes disabled (as defined in Section 72(m)(7) of the Code). To be eligible for such waiver, (i) the
disability must arise after the
purchase of shares, (ii) the disabled shareholder must have been under age 65 at the time of the initial determination of disability,
and (iii) a letter must be produced from a physician signed under penalty of perjury stating the nature of the disability. If the
account is transferred to a new registration and then a redemption is requested, the applicable CDSC will be charged.
(3)
Death
of a Trustee. CDSCs may be waived on redemptions occurring upon dissolution of a revocable
living or grantor trust following the death of the sole trustee where (i) the grantor of the trust is the sole trustee and the sole
life beneficiary, (ii) death occurs following the purchase of shares, and (iii) the trust document provides for dissolution
of the trust upon the trustee’s death. If the account is transferred to a new registration (including that of a successor trustee),
the applicable CDSC will be charged upon any subsequent redemption.
(4)
Return
of Excess Contributions. CDSCs may be waived on redemptions required to return excess contributions
made to retirement plans or individual retirement accounts, so long as the financial intermediary agrees to return all or the agreed-upon
portion of the commission received on the shares being redeemed.
(5)
Qualified
Retirement Plans. CDSCs may be waived on redemptions required to make distributions from qualified
retirement plans following normal retirement age (as stated in the plan document).
The CDSC also may be
waived if a financial intermediary agrees to return all or an agreed-upon portion of the commission received on the sale of the shares
being redeemed.
SECURITIES
LENDING
State
Street serves as securities lending agent to the Trust. As securities lending agent, State Street is responsible for the implementation
and administration of the securities lending program pursuant to the Securities Lending Agency Agreement (“Securities Lending Agreement”).
State Street acts as agent to the Trust to lend available securities with any person on its list of approved borrowers. State Street determines
whether a loan shall be made per the agreed upon parameters with the Trust and negotiates and establishes the terms and conditions of
the loan with the borrower. State Street ensures that all substitute interest, dividends, and other distributions paid with respect to
loan securities are credited to the applicable Fund’s relevant account on the date such amounts are delivered by the borrower to
State Street. State Street receives and holds, on the Fund’s behalf, collateral from borrowers to secure obligations of borrowers
with respect to any loan of available securities. State Street marks loaned securities and collateral to their market value each business
day in order to maintain the value of the collateral at no less than 102% (for domestic) and 105% (for foreign) of the market value of
the loaned securities. At the termination of the loan, State Street returns the collateral to the borrower upon the return of the loaned
securities to State Street. State Street invests cash collateral in accordance with the Securities Lending Agreement. State Street maintains
such records as are reasonably necessary to account for loans that are made and the income derived therefrom and makes available to the
Funds daily, monthly, and quarterly statements describing the loans made, and the income derived from the loans, during the period. State
Street performs compliance monitoring and testing of the securities lending program. The Board receives information quarterly describing
the outstanding loans and income made on such loans during the period.
The
dollar amounts of gross and net income from securities lending activities received and the related fees and/or compensation paid by each
applicable Fund during the fiscal year ended September 30, 2021 were as follows:
FUND
|
|
|
Gross income earned by the Fund from
securities lending activities
|
|
|
Fees paid to securities lending agent from
a revenue split
|
|
|
Fees paid for any cash collateral management
service (including fees deducted from a pooled cash collateral reinvestment
vehicle) that are not included in a revenue
split |
|
|
Administrative fees not included in
a revenue
split |
|
|
Indemnification fees not included in a
revenue split
|
|
|
Rebate (paid to
borrower) |
|
|
Other fees not included in a revenue split,
if applicable, including a description of those other
fees |
|
|
Aggregate fees/ compensation paid
by the Fund for securities lending activities
|
|
|
Net income from securities lending
activities
|
|
Short-Duration Bond Fund |
|
|
|
$ |
847 |
|
|
|
|
$ |
107 |
|
|
|
|
$ |
130 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
996 |
|
|
|
|
$ |
238 |
|
|
|
|
$ |
609 |
|
|
High Yield Fund |
|
|
|
$ |
22,322 |
|
|
|
|
$ |
3,181 |
|
|
|
|
$ |
1,114 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
4,295 |
|
|
|
|
$ |
18,027 |
|
|
REDEMPTION
OF SHARES
With
respect to each Fund, the Trustees may suspend the right of redemption, postpone the date of payment, or suspend the determination of
NAV: (a) for any period during which the NYSE is closed (other than for customary weekend and holiday closing); (b) for any
period during which trading in the markets the Fund normally uses is, as determined by the SEC, restricted; (c) when an emergency
exists as determined by the SEC so that disposal of the Fund’s investments or a determination of its NAV is not reasonably practicable;
or (d) for such other periods as the SEC by order may permit for the protection of the Trust’s shareholders. Under normal
circumstances, each Fund expects to meet redemption requests by using cash or cash equivalents in its portfolio and/or selling portfolio
assets to generate cash. Under stressed market conditions, a Fund may pay redemption proceeds using cash obtained through borrowing arrangements
that may be available from time to time. To the extent consistent with applicable laws and regulations, the Funds reserve the right to
satisfy all or a portion of a redemption request by distributing securities or other property in lieu of cash (“in-kind”
redemptions), under both normal and stressed market
conditions. In-kind redemptions are typically used to
meet redemption requests that represent a large percentage of the Fund’s net assets in order to minimize the effect of the
large redemption on the Fund and its remaining shareholders. Some Funds may be limited in their ability to use assets other than cash
to meet redemption requests due to restrictions on ownership of their portfolio assets. Any in-kind redemption will be effected through
a distribution of all publicly traded portfolio securities or securities for which quoted bid prices are available, subject to certain
exceptions. The securities distributed in an in-kind redemption will be valued in the same manner as they are valued for purposes of computing
the Fund’s NAV. These securities are subject to market risk until they are sold and may increase or decrease in value prior to
converting them into cash. You may incur brokerage and other transaction costs, and could incur a taxable gain or loss for income tax
purposes when converting the securities to cash.
VALUATION
OF PORTFOLIO SECURITIES
The
NAV of each Fund’s shares is determined once daily as of the close of regular trading on the NYSE, on each day the NYSE is open
for trading (a “business day”). The NYSE normally closes at 4:00 p.m. Eastern Time, but may close earlier on some days.
If the NYSE is scheduled to close early, the business day will be considered to end as of the time of the NYSE’s scheduled close.
A Fund will not treat an intraday disruption in NYSE trading or other event that causes an unscheduled closing of the NYSE as a close
of business of the NYSE for these purposes and will instead fair value securities in accordance with procedures approved annually by the
Board, and under the general oversight of the Board. The NYSE currently is not open for trading on New Year’s Day, Martin Luther
King, Jr. Day, President’s Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving
Day, and Christmas Day. Each Fund calculates the NAV of each of its classes of shares by dividing the total value of the assets attributable
to that class, less the liabilities attributable to that class, by the number of shares of that class that are outstanding. On holidays
and other days when the NYSE is closed, each Fund’s NAV generally is not calculated and the Funds do not anticipate accepting buy
or sell orders. However, the value of each Fund’s assets may still be affected on such days to the extent that a Fund holds foreign
securities that trade on days that foreign securities markets are open.
Equity securities and
derivative contracts that are actively traded on a national securities exchange or contract market are valued on the basis of information
furnished by a pricing service, which provides the last reported sale price, or, in the case of futures contracts, the settlement price,
for securities or derivatives listed on the exchange or contract market or the official closing price on the NASDAQ National Market System
(“NASDAQ System”), or in the case of OTC securities for which an official closing price is unavailable or not reported on
the NASDAQ System, the last reported bid price. Portfolio securities traded on more than one national securities exchange are valued at
the last price at the close of the exchange representing the principal market for such securities. Debt securities are valued on the basis
of valuations furnished by a pricing service, which generally determines valuations taking into account factors such as institutional-size
trading in similar securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. Shares
of other open-end mutual funds are valued at their closing NAVs as reported on each business day.
Investments
for which market quotations are readily available are marked to market daily based on those quotations. Market quotations may be provided
by third-party vendors or market makers, and may be determined on the basis of a variety of factors, such as broker quotations, financial
modeling, and other market data, such as market indexes and yield curves, counterparty information, and foreign exchange rates. U.S. Government
and agency securities may be valued on the basis of market quotations or using a model that may incorporate market observable data such
as reported sales of similar securities, broker quotes, yields, bids, offers, quoted market prices, and reference data. The fair values
of OTC derivative contracts, including forward, swap, and option contracts related to interest rates, foreign currencies, credit standing
of reference entities, equity prices, or commodity prices, may be based on market quotations or may be modeled using a series of techniques,
including simulation models, depending on the contract and the terms of the transaction. The fair values of asset-backed securities and
mortgage-backed securities are estimated based on models that consider the estimated cash flows of each debt tranche of the issuer, established
benchmark yield, and estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche including,
but not limited to, prepayment speed assumptions and attributes of the collateral.
Investments for which market quotations
are not available or for which a pricing service or vendor does not provide a value, or for which such market quotations or values are
considered by the investment adviser or subadviser to be unreliable (including, for example, certain foreign securities, thinly-traded
securities, certain restricted securities, certain initial public offerings, or securities whose values may have been affected by a significant
event) are stated at fair valuations determined in good faith by the Funds’ Valuation Committee1
in accordance with procedures approved annually by the Board, and under the general oversight of the Board. The Funds’ Valuation
Committee employs various methods to determine fair valuations including a regular review of significant inputs and assumptions and review
of any related market activity. The Funds’ Valuation Committee reports to the Board at its regularly scheduled meetings. It is
possible that fair value prices will be used by the Funds to a significant extent. The value determined for an investment using the Funds’
fair value procedures may differ from recent market prices for the investment and may be significantly different from the value realized
upon the sale of such investment.
The Funds may invest
in securities that are traded principally in foreign markets and that trade on weekends and other days when the Funds do not price their
shares. As a result, the values of the Funds’ portfolio securities may change on days when the prices of the Funds’ shares
are not calculated. The prices of the Funds’ shares will reflect any such changes when the prices of the Funds’ shares are
next calculated, which is the next business day. The Funds may use fair value pricing more frequently for securities primarily traded
in foreign markets because, among other things, most foreign markets close well before the Funds value their securities. The earlier close
of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the
interim. The Funds’ investments may be priced based on fair values provided by a third-party vendor, based on certain factors and
methodologies applied by such vendor, in the event that there is movement in the U.S. market, between the close of the foreign market
and the time the Funds calculate their NAVs.
The prices of foreign
securities are quoted in foreign currencies. All assets and liabilities expressed in foreign currencies are converted into U.S. dollars
at the mean between the buying and selling rates of such currencies against the U.S. dollar at the end of each business day. Changes in
the exchange rate, therefore, if applicable, will affect the NAV of shares of a Fund even when there has been no change in the values
of the foreign securities measured in terms of the currency in which they are denominated.
The proceeds received
by each Fund for each issue or sale of its shares, all net investment income, and realized and unrealized gain will be specifically allocated
to such Fund and constitute the underlying assets of that Fund. The underlying assets of each Fund will be segregated on the Trust’s
books of account, and will be charged with the liabilities in respect of such Fund and with a share of the general liabilities of the
Trust. Expenses with respect to any two or more Funds are to be allocated in proportion to the NAVs of the respective Funds except where
allocations of direct expenses can otherwise be fairly made. Each class of shares of a Fund will be charged with liabilities directly
attributable to such class, and other Fund expenses will be allocated in proportion to the NAVs of the respective classes.
On
December 3, 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which addresses valuation practices and the role of the board
of directors with respect to the fair value of the investments of a registered investment company. Among other things, Rule 2a-5
will permit a fund’s board to designate the fund’s primary investment adviser to perform the fund’s fair value determinations,
which will be subject to board oversight and certain reporting and other requirements intended to ensure that the board receives the information
it needs to oversee the investment adviser’s fair value determinations. Compliance with Rule 2a-5 will not be required until
September 2022. The Funds’ fair value policies and procedures and valuation practices may be impacted as the Funds come into
compliance with Rule 2a-5 and a greater number of the Funds’ securities may be subject to fair value pricing.
1
The
voting members of the Valuation Committee consist of the President, Treasurer, Assistant Treasurers, Vice Presidents (except for the CCO,
Secretary, and Assistant Secretaries) of the Trust, as well as such other members as the Board may from time to time designate. The non-voting
members of the Valuation Committee consist of the CCO, Secretary, and Assistant Secretaries. The Valuation Committee reviews and determines
the fair valuation of portfolio securities and the Funds’ pricing procedures in general.
TAXATION
Taxation of the Funds:
In General
Each Fund has elected
and intends to qualify each year to be treated as a regulated investment company under Subchapter M of the Code. In order to qualify as
a regulated investment company, a Fund must, among other things:
(a)
derive
at least 90% of its gross income for each taxable year from:
(i)
dividends,
interest, payments with respect to securities loans, gains from the sale or other disposition of stock, securities, or foreign currencies,
and other income (including, but not limited to, gains from options, futures, or forward contracts) derived with respect to its business
of investing in such stock, securities, or currencies; and
(ii)
net
income derived from interests in “qualified publicly traded partnerships” (as defined below);
(b)
distribute
with respect to each taxable year at least 90% of the sum of its investment company taxable income (generally taxable ordinary income
and the excess, if any, of net short-term capital gains over net long-term capital losses) and its net tax-exempt income, if any, for
such year in a manner qualifying for the dividends-paid deduction; and
(c)
diversify
its holdings so that, at the close of each quarter of its taxable year:
(i)
at
least 50% of the value of its total assets consists of cash, cash items, U.S. Government securities, securities of other regulated investment
companies, and other securities limited generally with respect to any one issuer to not more than 5% of the total assets of the Fund and
not more than 10% of the outstanding voting securities of such issuer; and
(ii)
not
more than 25% of the value of its total assets is invested, including through corporations in which the Fund owns a 20% or more voting
stock interest, (x) in the securities of any one issuer or two or more issuers which the Fund controls and that are engaged in the
same, similar, or related trades or businesses (other than U.S. Government securities), or (y) in the securities of one or more qualified
publicly traded partnerships (as defined below).
For purposes of the
90% gross income requirement described in (a) above, income derived from a partnership will be treated as qualifying income only
to the extent such income is attributable to items of income of the partnership which would be qualifying income if realized directly
by the regulated investment company. However, 100% of the net income derived from an interest in a “qualified publicly traded partnership”
will be treated as qualifying income. A “qualified publicly traded partnership” is a partnership (x) the interests
in which are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof,
and (y) that derives less than 90% of its income from the qualifying income described in paragraph (a)(i) above. In general, such
entities will be treated as partnerships for U.S. federal income tax purposes because they meet the passive income requirement under Code
section 7704(c)(2). Certain of a Fund’s investments in MLPs and ETFs, if any, may qualify as interests in qualified publicly traded
partnerships, as described further below. In addition, although in general the passive loss rules of the Code do not apply to regulated
investment companies, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified
publicly traded partnership.
For purposes of the
diversification test in (c) above, the term “outstanding voting securities of such issuer” will include the equity
securities of a qualified publicly traded partnership. Also for purposes of the diversification test in (c) above, the identification
of the issuer (or, in some cases, issuers) of a particular Fund investment can depend on the terms and conditions of that investment.
In some cases, identification of the issuer (or issuers) is uncertain under current law, and an adverse determination or future guidance
by the IRS with respect to identification of the issuer for a particular type of investment may adversely affect the Fund’s ability
to meet the diversification test in (c) above.
The 90% gross income requirement described
in (a) above and the diversification test described in (c) above may limit the extent to which a Fund can engage in certain
derivative transactions, as well as the extent to which it can invest in commodities, commodities-related investments, and MLPs.
In general, if a
Fund qualifies as a regulated investment company that is accorded special tax treatment, that Fund will not be subject to U.S. federal
income tax on income or gains distributed in a timely manner to its shareholders in the form of dividends (including capital gain dividends).
As long as a Fund qualifies as a regulated investment company, the Fund under present law will not be subject to any excise or income
taxes imposed by Massachusetts.
If a Fund were to
fail to meet the income, diversification or distribution test described above, the Fund could in some cases cure such failure, including
by paying a Fund-level tax, paying interest, making additional distributions, or disposing of certain assets. If a Fund were ineligible
to or otherwise did not cure such failure for any year, or if a Fund were otherwise to fail to qualify as a regulated investment company
in any taxable year, that Fund would be subject to tax on its taxable income at corporate rates. In addition, all distributions from earnings
and profits, including any distributions of net tax-exempt income and net long-term capital gains, would be taxable to shareholders as
ordinary income. Some portions of such distributions may be eligible for the dividends-received deduction in the case of corporate shareholders
or possibly to be treated as qualified dividend income to shareholders taxed as individuals. Finally, the Fund could be required to recognize
unrealized gains, pay substantial taxes and interest, and make substantial distributions before requalifying as a regulated investment
company.
Each Fund intends
to declare a dividend daily and to pay out any dividends at least monthly to its shareholders all or substantially all of its investment
company taxable income (computed without regard to the dividends-paid deduction) and its net tax-exempt income (if any). Each Fund intends
to distribute at least annually net capital gain (that is, the excess of net long-term capital gain over net short-term capital loss,
in each case determined with reference to any loss carryforwards). Investment company taxable income or net capital gain that is retained
by a Fund will be subject to tax at regular corporate rates. However, a Fund may designate any retained net capital gain amount as undistributed
capital gains in a timely notice to its shareholders who (i) will be required to include in income for U.S. federal income tax purposes,
as long-term capital gain, their shares of such undistributed amount, and (ii) will be entitled to credit their proportionate shares
of the tax paid by the Fund on such undistributed amount against their federal income tax liabilities, if any, and to claim refunds to
the extent the credit exceeds such liabilities. If a Fund makes this designation, the tax basis of shares owned by a shareholder of a
Fund will, for U.S. federal income tax purposes, be increased by an amount equal to the difference between the amount of undistributed
capital gains included in the shareholder’s gross income under clause (i) of the preceding sentence and the tax deemed paid
by the shareholder under clause (ii) of the preceding sentence. A Fund is not required to, and there can be no assurance the Fund
will, make this designation if it retains all or a portion of its net capital gain in a taxable year.
In determining its
net capital gain, including in connection with determining the amount available to support a capital gain dividend, its taxable income,
and its earnings and profits, a regulated investment company may elect to treat part or all of any post-October capital loss (defined
as any net capital loss attributable to the portion of the taxable year after October 31 or, if there is no such loss, the net long-term
capital loss or net short-term capital loss attributable to such portion of the taxable year) and certain late-year ordinary losses (generally,
the sum of its (i) net ordinary losses from the sale, exchange or other taxable disposition of property, attributable to the portion
of the taxable year after October 31, and its (ii) other net ordinary losses attributable to the portion of the taxable year
after December 31) as if incurred in the succeeding taxable year.
Capital losses in
excess of capital gains (“net capital losses”) are not permitted to be deducted against a Fund’s net investment income.
If a Fund has a net capital loss for any year, the amount thereof may be carried forward to offset capital gains in future years,
thereby reducing the amount the Fund would otherwise be required to distribute in such future years to qualify for the special tax
treatment accorded regulated investment companies and avoid a Fund-level tax. If a Fund incurs or has incurred net capital losses, those
losses will be carried forward to one or more subsequent taxable years without expiration; any such carryforward losses will retain
their character as short-term or long-term. See the most recent annual shareholder report for each Fund’s capital loss carryforwards
as of the end of its most recently ended fiscal year.
A nondeductible excise tax at the rate
of 4% will be imposed on the excess, if any, of each Fund’s “required distribution” over its actual distributions
in any calendar year. The “required distribution” is 98% of the Fund’s ordinary income for the calendar year plus
98.2% of its capital gain net income recognized during the one-year period ending on October 31 (or November 30 or December 31,
if the Fund is permitted to elect and so elects) plus undistributed amounts from prior years. For these purposes, ordinary gains
and losses from the sale, exchange or other taxable disposition of property that would be properly taken into account after October 31
(or November 30, if the Fund makes the election referred to above) are treated as arising on January 1 of the following calendar
year; in the case of a Fund with a December 31 year end, no such gains or losses will be so treated. Each Fund intends to make distributions
sufficient to avoid imposition of the excise tax, although there can be no assurance that it will be able to do so. Distributions declared
by a Fund during October, November, or December to shareholders of record on a date in any such month and paid by the Fund during the
following January will be treated for federal tax purposes as paid by the Fund and received by shareholders on December 31 of the
year in which declared.
Under current law,
a Fund may treat the portion of redemption proceeds paid to redeeming shareholders that represents the redeeming shareholders’
portion of the undistributed investment company taxable income and net capital gain of the Fund as a distribution of investment company
taxable income and net capital gain on the Fund’s tax return. This practice, which involves the use of tax equalization, will have
the effect of reducing the amount of income and gains that a Fund is required to distribute as dividends to shareholders in order for
the Fund to avoid federal income tax and excise tax. This practice may also reduce the amount of the distributions required to be made
to non-redeeming shareholders. The amount of any undistributed income will be reflected in the value of the shares of the Fund, and thus
the total return on a shareholder’s investment will not be reduced as a result of this practice.
Fund Distributions
Except in the case
of certain shareholders eligible for preferential tax treatment, e.g., qualified retirement or pension trusts, shareholders of each Fund
generally will be subject to federal income taxes on Fund distributions as described herein. Distributions are taxable whether shareholders
receive them in cash or reinvest them in additional shares through a dividend reinvestment plan. A shareholder whose distributions are
reinvested in shares will be treated as having received a dividend equal to the fair market value of the new shares issued to the shareholder.
Distributions are taxable
to shareholders even if they are paid from income or gains earned by a Fund before a shareholder’s investment (and thus were included
in the price the shareholder paid for his or her shares), even though such dividends and distributions may economically represent a return
of a particular shareholder’s investment. Such distributions are likely to occur in respect of shares purchased at a time when
a Fund’s NAV reflects gains that are unrealized, or income or gains that are realized but not distributed. Such realized income
or gains may be required to be distributed even when the Fund’s NAV also reflects unrealized losses.
Distributions by each
Fund of investment income generally will be taxable to shareholders as ordinary income. Taxes on distributions of capital gains are determined
by how long the Fund owned (or is deemed to have owned) the investments that generated them, rather than by how long a shareholder has
owned (or is deemed to have owned) his or her shares. Distributions of gains from the sale of investments that the Fund owned for one
year or less will be taxable as ordinary income. Properly reported distributions of long-term capital gains, if any, are taxable in the
hands of an investor as long-term gain includible in net capital gain and taxed to individuals at reduced rates. Tax rules can alter a
Fund’s holding period in investments and thereby affect the tax treatment of gain or loss on such investments.
The
IRS and the Department of the Treasury have issued regulations that impose special rules in respect of capital gain dividends received
through partnership interests constituting “applicable partnership interests” under Section 1061 of the Code.
Distributions of investment
income reported by a Fund as derived from “qualified dividend income” will be taxed in the hands of individuals at the rates
applicable to long-term capital gains, provided that both the shareholder and the Fund meet certain holding period and other requirements.
In order for some portion of the dividends received by a Fund shareholder to be “qualified dividend income,” the Fund must
meet certain holding period and other requirements with
respect to some portion of the dividend-paying stocks in its portfolio and the shareholder must meet certain holding period and other
requirements with respect to the Fund’s shares. A dividend will not be treated as qualified dividend income (at either the Fund
or shareholder level) (1) if the dividend is received with respect to any share of stock held for fewer than 61 days during
the 121-day period beginning on the date which is 60 days before the date on which such share becomes ex-dividend with respect to
such dividend (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date),
(2) to the extent that the recipient is under an obligation (whether pursuant to a short sale or otherwise) to make related payments
with respect to positions in substantially similar or related property, (3) if the recipient elects to have the dividend income treated
as investment income for purposes of the limitation on deductibility of investment interest, or (4) if the dividend is received from
a foreign corporation that is (a) not eligible for the benefits of a comprehensive income tax treaty with the United States (with
the exception of dividends paid on stock of such a foreign corporation that is readily tradable on an established securities market in
the United States) or (b) treated as a passive foreign investment company.
In general, distributions
of investment income reported by each Fund as derived from qualified dividend income will be treated as qualified dividend income by a
shareholder taxed as an individual, provided the shareholder meets the holding period and other requirements described above with respect
to the Fund’s shares. If the aggregate qualified dividends received by a Fund during any taxable year are 95% or more of its gross
income (excluding net long-term capital gain over net short-term capital loss), then 100% of the Fund’s dividends (other than dividends
properly reported as capital gain dividends) will be eligible to be treated as qualified dividend income. In general, Funds investing
primarily in fixed income investments do not expect a significant portion of their distributions to be derived from qualified dividend
income.
Dividends of net investment
income received by corporate shareholders of each Fund will qualify for the dividends-received deduction generally available to corporations
to the extent those dividends are reported as being attributable to qualifying dividends received by the Fund from domestic corporations
for the taxable year. In general, a dividend received by a Fund will not be treated as a dividend eligible for the dividends-received
deduction (1) if it has been received with respect to any share of stock that the Fund has held for less than 46 days (91 days
in the case of certain preferred stock) during the 91-day period beginning on the date which is 45 days before the date on which
such share becomes ex-dividend with respect to such dividend (during the 181-day period beginning 90 days before such date in the
case of certain preferred stock) or (2) to the extent that the Fund is under an obligation (pursuant to a short sale or otherwise)
to make related payments with respect to positions in substantially similar or related property. Moreover, the dividends-received deduction
may otherwise be disallowed or reduced (1) if the corporate shareholder fails to satisfy the foregoing requirements with respect
to its shares of the Fund or (2) by application of various provisions of the Code (for instance, the dividends-received deduction
is reduced in the case of a dividend received on debt-financed portfolio stock (generally, stock acquired with borrowed funds)). In general,
Funds investing primarily in fixed income investments do not expect a significant portion of their distributions to qualify for the dividends-received
deduction.
A portion of the interest
paid or accrued on certain high yield discount obligations owned by a Fund may be treated as a dividend for purposes of the corporate
dividends-received deduction. In such cases, if the issuer of the high yield discount obligations is a domestic corporation, dividend
payments by a Fund may be eligible for the dividends received deduction to the extent of the deemed dividend portion of such accrued interest.
Any distribution of
income that is attributable to (i) income received by a Fund in lieu of dividends with respect to securities on loan pursuant to
a securities lending transaction, or (ii) dividend income received by the Fund on securities it temporarily purchased from a counterparty
pursuant to a repurchase agreement that is treated for U.S. federal income tax purposes as a loan by the Fund, will not constitute qualified
dividend income to individual shareholders and will not be eligible for the dividends-received deduction for corporate shareholders. Distributions
by a Fund to its shareholders that the Fund properly reports as “section 199A dividends,” as defined and subject to certain
conditions described below, are treated as qualified REIT dividends in the hands of non-corporate shareholders. Non-corporate shareholders
are permitted a federal income tax deduction equal to 20% of qualified REIT dividends
received by them, subject to certain limitations. Very
generally, a “section 199A dividend” is any dividend or portion thereof that is attributable to certain dividends received
by the regulated investment company from REITs, to the extent such dividends are properly reported as such by the regulated investment
company in a written notice to its shareholders. A section 199A dividend is treated as a qualified REIT dividend only if the shareholder
receiving such dividend holds the dividend-paying regulated investment company shares for at least 46 days of the 91-day period beginning
45 days before the shares become ex-dividend, and is not under an obligation to make related payments with respect to a position
in substantially similar or related property. A Fund is permitted to report such part of its dividends as section 199A dividends as are
eligible, but is not required to do so.
The Code generally
imposes a 3.8% Medicare contribution tax on the net investment income of certain individuals, trusts, and estates to the extent their
income exceeds certain threshold amounts. For these purposes, “net investment income” generally includes, among other things,
(i) distributions paid by a Fund of net investment income and capital gains as described above, and (ii) any net gain from the
sale, redemption, exchange, or other taxable disposition of Fund shares. Shareholders are advised to consult their tax advisers regarding
the possible implications of this additional tax on their investment in the Fund.
If a Fund makes a distribution
to a shareholder in excess of its current and accumulated “earnings and profits” in and with respect to any taxable year,
the excess distribution will be treated as a return of capital to the extent of the shareholder’s tax basis in his or her shares,
and thereafter as capital gain. A return of capital is not taxable, but it reduces a shareholder’s tax basis in his or her shares,
thus reducing any loss or increasing any gain on the shareholder’s subsequent taxable disposition of his or her shares.
Sales, Redemptions,
and Exchanges
Sales, redemptions,
and exchanges of each Fund’s shares are taxable events and, accordingly, shareholders subject to federal income taxes may realize
gains and losses on these transactions. If shares have been held for more than one year, gain or loss realized generally will be long-term
capital gain or loss, provided the shareholder holds the shares as a capital asset. Otherwise, the gain or loss on a taxable disposition
of Fund shares will be treated as short-term capital gain or loss. However, a loss on a sale of Fund shares held by a shareholder for
six months or less will be treated as a long-term capital loss to the extent of any long-term capital gain dividend paid to the shareholder
with respect to such shares. Further, no loss will be allowed on a sale of Fund shares to the extent the shareholder acquires identical
shares of the same Fund within 30 days before or after the disposition. In such case, the basis of the newly purchased shares will
be adjusted to reflect the disallowed loss. In the case of individuals holding shares in a Fund directly, upon the sale, redemption or
exchange of Fund shares, the Fund or, in the case of shares purchased through a financial intermediary, the financial intermediary may
be required to provide the shareholder and the IRS with cost basis and certain other related tax information about the Fund shares sold,
redeemed, or exchanged. See the Funds’ Prospectus for more information.
Under Treasury regulations,
if a shareholder recognizes a loss with respect to Fund shares of $2 million or more for an individual shareholder or $10 million
or more for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on IRS Form 8886. Direct shareholders
of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a regulated
investment company are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders
of most or all regulated investment companies. The fact that a loss is reportable under these regulations does not affect the legal determination
of whether the taxpayer’s treatment of the loss is proper. Shareholders should consult their tax advisers to determine the applicability
of these regulations in light of their individual circumstances.
Certain Investments
in Debt Obligations
Some debt obligations
with a fixed maturity date of more than one year from the date of issuance (and all zero-coupon debt obligations with a fixed maturity
date of more than one year from the date of issuance) that are acquired by a Fund will be treated as being issued with original issue
discount (“OID”). Generally, the amount of the OID is treated as interest income and is included in taxable income (and
required to be distributed) over the term of the debt security, even though payment of that amount is not
received until a later time, usually when the debt security
matures. Payment-in-kind securities will also give rise to income which is required to be distributed and is taxable even though a Fund
holding the security receives no interest payment in cash on the security during the year.
Some
debt obligations with a fixed maturity date of more than one year from the date of issuance that are acquired by a Fund in the secondary
market may be treated as having “market discount.” Very generally, market discount is the excess of the stated redemption
price of a debt obligation (or in the case of an obligation issued with OID, its “revised issue price”) over the purchase
price of such obligation. Generally, any gain recognized on the disposition of, and any partial payment of principal on, a debt security
having market discount is treated as ordinary income to the extent the gain, or principal payment, does not exceed the “accrued
market discount” on such debt security. Alternatively, the Fund may elect to accrue market discount currently, in which case the
Fund will be required to include the accrued market discount in the Fund’s income (as ordinary income) and thus distribute it over
the term of the debt security, even though payment of that amount is not received until a later time, upon partial or full repayment or
disposition of the debt security. The rate at which the market discount accrues, and thus is included in the Fund’s income, will
depend in part upon which of the permitted accrual methods the Fund elects.
Some debt obligations
with a fixed maturity date of one year or less from the date of issuance that are acquired by a Fund may be treated as having OID, or
acquisition discount (very generally, the excess of the stated redemption price over the purchase price) in the case of certain types
of debt obligations. Generally, the Fund will be required to include the OID, or acquisition discount, as ordinary income over the term
of the debt security, even though payment of that amount is not received until a later time, usually when the debt security matures. A
Fund may make one or more of the elections applicable to debt obligations having acquisition discount, or OID, which could affect the
character and timing of recognition of income by the Fund.
As indicated above,
a Fund that invests in certain debt instruments may be required to pay out as an income distribution each year an amount which is greater
than the total amount of cash interest the Fund actually received. Such distributions may be made from the cash assets of the Fund or
by liquidation of portfolio securities, if necessary. The Fund may realize gains or losses from such liquidations. In the event a Fund
realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution than they would in
the absence of such transactions.
Investments in debt
obligations that are at risk of or in default present special tax issues for a Fund. Tax rules are not entirely clear about issues such
as when a Fund may cease to accrue interest, OID, or market discount; whether and to what extent a Fund should recognize market discount
on such a debt obligation; when and to what extent a Fund may take deductions for bad debts or worthless securities; and how a Fund should
allocate payments received on obligations in default between principal and interest. These and other related issues will be addressed
by each Fund when, and if, it invests in such securities, in order to seek to ensure that it distributes sufficient income to preserve
its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.
Derivative Transactions
If a Fund engages in
derivative transactions, including transactions in options, futures contracts, forward contracts, swap agreements, foreign currencies,
and straddles, or other similar transactions, including for hedging purposes, it will be subject to special tax rules (including constructive
sale, mark-to-market, straddle, wash sale, and short sale rules), the effect of which may be to accelerate income to the Fund, defer losses
to the Fund, cause adjustments in the holding periods of the Fund’s securities, convert long-term capital gains into short-term
capital gains, or convert short-term capital losses into long-term capital losses. These rules could therefore affect the amount, timing,
and character of distributions to shareholders.
A Fund’s transactions
in foreign currency-denominated debt instruments and certain of its derivative activities may produce a difference between its book income
and its taxable income. If a Fund’s book income exceeds its taxable income, the distribution (if any) of such excess generally
will be treated as (i) a dividend to the extent of the Fund’s remaining earnings and profits (including earnings and profits
arising from tax-exempt income), (ii) thereafter, as a return of capital to the extent of the recipient’s basis in its
shares, and (iii) thereafter, as gain from the sale
or exchange of a capital asset. If a Fund’s book income is less than taxable income, the Fund could be required to make distributions
exceeding book income to qualify as a regulated investment company and to eliminate fund-level income tax.
Investments in Regulated
Investment Companies and Other Investment Funds
To the extent a Fund
invests its assets in shares of ETFs or other investment companies that are regulated investment companies (“underlying funds”),
its distributable income and gains will normally consist of distributions from such underlying funds and gains and losses on the disposition
of shares of such underlying funds. To the extent that such an underlying fund realizes net losses on its investments for a given taxable
year, the Fund will not be able to recognize its share of those losses to offset capital gains the Fund realized from other sources until
and only to the extent that it disposes of shares of the underlying fund in a transaction qualifying for sale or exchange treatment (although
such losses of an underlying fund may reduce distributions to the Fund from that underlying fund in future taxable years). Moreover,
even when a Fund does make a disposition of shares of an underlying fund, a portion of its loss may be recognized as a long-term capital
loss, which the Fund will not be able to offset against its ordinary income (including distributions of any net short-term capital gains
realized by the underlying fund).
As a result of the
foregoing rules, and certain other special rules, the amounts of net investment income and net capital gains that a Fund will be required
to distribute to shareholders may be greater than such amounts would have been had the Fund invested directly in the securities held by
the underlying funds. For similar reasons, the character of distributions from the Fund will not necessarily be the same as it would have
been had the Fund invested directly in the securities held by the underlying funds. Investing through underlying funds can therefore affect
the amount, timing and character of distributions to shareholders, and may increase the amount of taxes payable by shareholders.
If at the close of
each quarter of a Fund’s taxable year, at least 50% of its total assets consists of interests in other regulated investment companies,
the Fund will be a “qualified fund of funds.” In that case, the Fund is permitted to elect to pass through to its shareholders
foreign income and other similar taxes paid by the Fund in respect of foreign securities held directly by the Fund or by a regulated investment
company in which its invests that itself elected to pass such taxes through to its shareholders, so that shareholders of the Fund will
be eligible to claim a tax credit or deduction for such taxes. However, even if a Fund qualifies to make such election for any year, it
may determine not to do so. See “Foreign Taxes and Investments” below.
To the extent a Fund
invests in commodity-related ETFs that qualify as qualified publicly traded partnerships, the net income derived from such ETFs will constitute
qualifying income for purposes of the 90% gross income test (as noted above). If such an ETF were to fail to qualify as a qualified publicly
traded partnership, a portion of the gross income derived from that ETF could constitute nonqualifying income to the Fund for purposes
of the 90% gross income test.
The foregoing is only
a general description of certain federal tax consequences of investing in ETFs and other underlying funds.
Foreign Taxes and
Investments
Income proceeds and
gains received by a Fund from sources outside the United States might be subject to foreign taxes that are withheld at the source or other
foreign taxes. The effective rate of these foreign taxes cannot be determined in advance because it depends on the specific countries
in which a Fund’s assets will be invested, the amount of the assets invested in each such country and the possibility of treaty
relief.
If more than 50% of
a Fund’s assets at taxable year end consists of the securities of foreign corporations, the Fund may be eligible to make an election
under Section 853 of the Code so that any of its shareholders subject to federal income taxes will be able to claim a credit or deduction
on their income tax returns for, and will be required to treat as part of the amounts distributed to them, their pro rata portion
of qualified taxes paid by the Fund to foreign countries. If such an election is made, the ability of shareholders of the Fund to claim
a foreign tax credit will be subject to limitations imposed by the Code, which in general limits the amount of foreign tax that may be
used to reduce a shareholder’s U.S. tax liability to that amount of U.S. tax which would be imposed on the amount and type of income
in respect
of which the foreign tax was paid. In addition, the ability
of shareholders to claim a foreign tax credit is subject to a holding period requirement. A shareholder who for U.S. income tax purposes
claims a foreign tax credit in respect of Fund distributions may not claim a deduction for foreign taxes paid by the Fund, regardless
of whether the shareholder itemizes deductions. Also, no deduction for foreign taxes may be claimed by shareholders who do not itemize
deductions on their federal income tax returns. It should also be noted that a tax-exempt shareholder, like other shareholders, will be
required to treat as part of the amounts distributed to it a pro rata portion of the income taxes paid by the Fund to foreign countries.
However, that income will generally be exempt from U.S. taxation by virtue of such shareholder’s tax-exempt status and such a shareholder
will not be entitled to either a tax credit or a deduction with respect to such income. A Fund that makes the election referred to above
will notify its shareholders each year of the amount of dividends and distributions and the shareholders’ pro rata shares
of qualified taxes paid by the Fund to foreign countries.
A Fund may invest in
one or more “passive foreign investment companies” (“PFICs”). A PFIC is generally any foreign corporation:
(i) 75% or more of the income of which for a taxable year in the Fund’s holding period is passive income, or (ii) the
average percentage of the assets of which (generally by value, but by adjusted tax basis in certain cases) that produce or are held
for the production of passive income is at least 50%. Generally, passive income for this purpose means dividends, interest (including
income equivalent to interest), royalties, rents, annuities, the excess of gain over losses from certain property transactions and commodities
transactions, and foreign currency gains.
Investment by a Fund
in PFICs could subject the Fund to a U.S. federal income tax or other charge on distributions received from PFICs or on the proceeds from
the sale of its investments in the PFICs. This tax cannot be eliminated by making distributions to Fund shareholders. However, a Fund
may be able to make an election that would avoid the imposition of that tax. For example, a Fund may in certain cases elect to treat a
PFIC as a “qualified electing fund” (a “QEF election”), in which case the Fund will be required to
include in its income its share of the company’s income and net capital gains annually, regardless of whether it receives any distribution
from the company. A Fund also may make an election to mark the gains (and to a limited extent losses) in a PFIC “to the market”
as though it had sold and repurchased its holdings in the PFIC on the last day of the Fund’s taxable year. Such gains and losses
are generally treated as ordinary income and loss. The QEF and mark-to-market elections may accelerate the recognition of income by the
Fund (without the receipt of cash) and increase the amount required to be distributed by a Fund to avoid taxation. Making either of these
elections therefore may require a Fund to liquidate other investments (including when it is not advantageous to do so) to meet its distribution
requirement, which also may accelerate the recognition of gain and affect a Fund’s total return. Dividends paid by PFICs will not
be eligible to be treated as “qualified dividend income.” Because it is not always possible to identify a foreign corporation
as a PFIC, a Fund may incur the tax and other charges described above in some instances.
Finally, a Fund’s
transactions in foreign currencies, foreign currency-denominated debt obligations, and certain foreign currency options, futures contracts,
and forward contracts (and similar instruments) may give rise to ordinary income or loss to the extent such income or loss results from
fluctuations in the value of the foreign currency concerned. Such ordinary income treatment may increase the distributions taxed to shareholders
as ordinary income. Any net ordinary losses resulting from such transactions cannot be carried forward by a Fund to offset income or gains
earned in subsequent taxable years.
Certain Investments
in Real Estate Investment Trusts
If a Fund invests in
equity securities of REITs, such investments may result in the fund’s receipt of cash in excess of the REIT’s earnings.
If a Fund distributes such amounts, such distribution could constitute a return of capital to the Fund’s shareholders for federal
income tax purposes. Dividends received by a Fund from a REIT will not qualify for the corporate dividends-received deduction and generally
will not constitute qualified dividend income.
Certain Investments
in Mortgage-Related Securities
A Fund may invest directly
or indirectly in residual interests in real estate mortgage investment conduits (“REMICs”) (including by investing in residual
interests in CMOs with respect to which an election to be treated as a REMIC is in effect) or equity interests in taxable mortgage pools
(“TMPs”).
Under a notice issued by the IRS and Treasury regulations
that have not yet been issued, but may apply retroactively, a portion of a Fund’s income that is attributable to a REIT’s
residual interest in a REMIC or an equity interest in a TMP (referred to in the Code as an “excess inclusion”) will be subject
to federal income tax in all events. This notice also provides, and the regulations are expected to provide, that excess inclusion income
of a regulated investment company, such as the Funds, will be allocated to shareholders of the regulated investment company in proportion
to the dividends received by such shareholders, with the same consequences as if the shareholders held the related REMIC or TMP interest
directly.
In general, excess
inclusion income allocated to shareholders (i) cannot be offset by net operating losses (subject to a limited exception for certain
thrift institutions), (ii) will constitute unrelated business taxable income (“UBTI”) to entities (including a qualified
pension plan, an individual retirement account, a 401(k) plan, a Keogh plan, or other tax-exempt entity) subject to tax on UBTI, thereby
potentially requiring such an entity that is allocated excess inclusion income, and otherwise might not be required to file a tax return,
to file a tax return and pay tax on such income, and (iii) in the case of a non-U.S. shareholder, will not qualify for any reduction
in U.S. federal withholding tax. A shareholder will be subject to U.S. federal income tax on such inclusions notwithstanding any exemption
from such income tax otherwise available under the Code.
Unrelated Business
Taxable Income
Income of a regulated
investment company that would be UBTI if earned directly by a tax-exempt entity generally will not constitute UBTI when distributed to
a tax-exempt shareholder of the regulated investment company. Notwithstanding this “blocking” effect, a tax-exempt shareholder
of a Fund could realize UBTI by virtue of its investment in a Fund if shares in that Fund constitute debt-financed property in the hands
of the tax-exempt shareholder within the meaning of Section 514(b) of the Code. A tax-exempt shareholder may also recognize UBTI
if a Fund recognizes “excess inclusion income” derived from direct or indirect investments in residual interests in REMICs
or equity interests in TMPs as described above, if the amount of such income recognized by a Fund exceeds the Fund’s investment
company taxable income (after taking into account deductions for dividends paid by the Fund).
Special tax consequences
also apply to charitable remainder trusts (“CRTs”) that invest in regulated investment companies that invest directly or
indirectly in residual interests in REMICs or equity interests in TMPs. Under legislation enacted in December 2006, a CRT, as defined
in Section 664 of the Code, that realizes UBTI for a taxable year must pay an excise tax annually of an amount equal to such UBTI.
Under IRS guidance issued in October 2006, a CRT will not recognize UBTI solely as a result of investing in a Fund that recognizes
“excess inclusion income” (which is described earlier). Rather, if at any time during any taxable year a CRT or
one of certain other tax-exempt shareholders (such as the United States, a state or political subdivision, or an agency or instrumentality
thereof, and certain energy cooperatives) is a record holder of a share in a Fund that recognizes “excess inclusion income,”
then such Fund will be subject to a tax on that portion of its “excess inclusion income” for the taxable year that is allocable
to such shareholders at the highest federal corporate income tax rate. The extent to which the IRS guidance in respect of CRTs remains
applicable in light of the December 2006 CRT legislation is unclear. To the extent permitted under the 1940 Act, the Funds may elect
to allocate any such tax specially to the applicable CRT, or other shareholder, and thus reduce such shareholder’s distributions
for the year by the amount of the tax that relates to such shareholder’s interest in the Funds. CRTs and other tax-exempt investors
are urged to consult their tax advisers concerning the consequences of investing in the Funds.
Investments in MLPs
Some amounts received
by a Fund from its investments in MLPs will likely be treated as returns of capital because of accelerated deductions available with respect
to the activities of MLPs. On the disposition of an investment in such an MLP, the Fund will likely realize taxable income in excess of
economic gain from that asset (or, in later periods, if a Fund does not dispose of the MLP, the Fund will likely realize taxable income
in excess of cash flow received by the Fund from the MLP), and the Fund must take such income into account in determining whether the
Fund has satisfied its regulated investment company distribution requirements. The Fund may have to borrow or liquidate securities to
satisfy its distribution requirements and meet its redemption requests, even though investment considerations might
otherwise make it undesirable for the Fund to borrow
money or sell securities at the time. In addition, distributions attributable to gain from the sale of MLPs that are characterized as
ordinary income under the Code’s recapture provisions will be taxable to Fund shareholders, when distributed to them, as ordinary
income.
As noted above, certain
of the MLPs in which a Fund may invest qualify as qualified publicly traded partnerships. In such cases, the net income derived from such
investments will constitute qualifying income for purposes of the 90% gross income requirement described earlier for qualification as
a regulated investment company. If, however, such a vehicle were to fail to qualify as a qualified publicly traded partnership in a particular
year, a portion of the gross income derived from it in such year could constitute non-qualifying income to a Fund for purposes of the
90% gross income requirement and thus could adversely affect the Fund’s ability to qualify as a regulated investment company for
a particular year. In addition, as described above, the diversification requirement for regulated investment company qualification will
limit a Fund’s investments in one or more vehicles that are qualified publicly traded partnerships to 25% of the Fund’s
total assets as of the end of each quarter of the Fund’s taxable year.
Subject to any future
regulatory guidance to the contrary, distributions attributable to qualified publicly traded partnership income from a Fund’s investments
in MLPs will ostensibly not qualify for the deduction available to non-corporate taxpayers in respect of such amounts received directly
from an MLP.
Backup Withholding
Each Fund generally
is required to withhold and remit to the U.S. Treasury a percentage of the taxable dividends and other distributions paid to and
proceeds of share sales, exchanges, or redemptions made by any individual shareholder who fails to furnish the Fund with a correct taxpayer
identification number (TIN), who has under-reported dividend or interest income, or who fails to certify to the Fund that he or she is
not subject to such withholding.
Non U.S. Shareholders
Distributions by a
Fund to shareholders that are not “U.S. persons” within the meaning of the Code (“foreign shareholders”) properly
reported by the Fund as (1) capital gain dividends, (2) short-term capital gain dividends, and (3) interest-related dividends,
each as defined and subject to certain conditions described below, generally are not subject to withholding of U.S. federal income tax.
In general, the Code
defines (1) “short-term capital gain dividends” as distributions of net short-term capital gains in excess of net long-term
capital losses and (2) “interest-related dividends” as distributions from U.S. source interest income of types similar
to those not subject to U.S. federal income tax if earned directly by an individual foreign shareholder, in each case to the extent such
distributions are properly reported as such by a Fund in a written notice to shareholders.
The exceptions to withholding
for short-term capital gain dividends and capital gain dividends do not apply to (A) distributions to an individual foreign shareholder
who is present in the United States for a period or periods aggregating 183 days or more during the year of the distribution and
(B) distributions attributable to gain that is treated as effectively connected with the conduct by the foreign shareholder of a
trade or business within the United States under special rules regarding the disposition of U.S. real property interests.
The exception to withholding
for “interest-related dividends” does not apply to distributions to a foreign shareholder (A) that has not provided
a satisfactory statement that the beneficial owner is not a U.S. person, (B) to the extent that the dividend is attributable to certain
interest on an obligation if the foreign shareholder is the issuer or is a 10% shareholder of the issuer, (C) that is within certain
foreign countries that have inadequate information exchange with the United States, or (D) to the extent the dividend is attributable
to interest paid by a person that is a related person of the foreign shareholder and the foreign shareholder is a controlled foreign corporation.
If a Fund invests in
a regulated investment company that pays capital gain dividends, short-term capital gain dividends, or interest-related dividends to the
Fund, such distributions retain their character as not subject to withholding if properly reported when paid by the Fund to foreign shareholders.
A Fund is permitted to report such
part of its dividends as interest-related and/or short-term capital gain dividends as are eligible, but is not required to do so. In the
case of shares held through an intermediary, the intermediary may withhold even if a Fund reports all or a portion of a payment as an
interest-related or short-term capital gain dividend to shareholders. Foreign shareholders should contact their intermediaries regarding
the application of these rules to their accounts.
Distributions by a
Fund to foreign shareholders other than capital gain dividends, short-term capital gain dividends, and interest-related dividends (e.g.,
dividends attributable to dividend and foreign-source interest income or to short-term capital gains or U.S. source interest income to
which the exception from withholding described above does not apply) are generally subject to withholding of U.S. federal income tax at
a rate of 30% (or lower applicable treaty rate).
Under U.S. federal
income tax law, a beneficial holder of shares who or which is a foreign person is not, in general, subject to U.S. federal income tax
on gains (and is not allowed a deduction for losses) realized on the sale of shares of a Fund unless (i) such gain is effectively
connected with the conduct of a trade or business carried on by such holder within the United States, (ii) in the case of an individual
holder, the holder is present in the United States for a period or periods aggregating one hundred eighty-three (183) days or more during
the year of the sale and certain other conditions are met, or (iii) the special rules relating to gain attributable to the sale or
exchange of “U.S. real property interests” (“USRPIs”) apply to the foreign shareholder’s sale
of shares of the Fund (as described below).
Beneficial holders
that are foreign persons with respect to whom income from a Fund is effectively connected with a trade or business conducted by the foreign
shareholder within the United States will in general be subject to U.S. federal income tax on the income derived from the Fund at the
graduated rates applicable to U.S. citizens, residents, or domestic corporations, whether such income is received in cash or reinvested
in shares of the Fund and, in the case of a foreign corporation, may also be subject to a branch profits tax. If a foreign shareholder
is eligible for the benefits of a tax treaty, any effectively connected income or gain will generally be subject to U.S. federal income
tax on a net basis only if it is also attributable to a permanent establishment maintained by the shareholder in the United States. More
generally, foreign shareholders who are residents in a country with an income tax treaty with the United States may obtain different tax
results than those described herein, and are urged to consult their tax advisers.
Special rules would
apply if a Fund were a qualified investment entity (“QIE”) because it is either a “U.S. real property holding corporation”
(“USRPHC”) or would be a USRPHC but for the operation of certain exceptions to the definition of USRPIs described
below. Very generally, a USRPHC is a domestic corporation that holds USRPIs the fair market value of which equals or exceeds 50% of the
sum of the fair market values of the corporation’s USRPIs, interests in real property located outside the United States, and other
trade or business assets. USRPIs generally are defined as any interest in U.S. real property and any interest (other than solely as a
creditor) in a USRPHC or, very generally, an entity that has been a USRPHC in the last five years. A Fund that holds, directly or
indirectly, significant interests in REITs may be a USRPHC. Interests in domestically controlled QIEs, including REITs and regulated investment
companies that are QIEs, not-greater-than-10% interests in publicly traded classes of stock in REITs and not-greater-than-5% interests
in publicly traded classes of stock in regulated investment companies generally are not USRPIs, but these exceptions do not apply for
purposes of determining whether a Fund is a QIE.
If an interest in a
Fund were a USRPI, the Fund would be required to withhold U.S. tax on the proceeds of a share redemption by a greater-than-5% foreign
shareholder, in which case such foreign shareholder generally would also be required to file U.S. tax returns and pay any additional taxes
due in connection with the redemption.
If a Fund were a QIE,
under a special “look-through” rule, any distributions by the Fund to a foreign person (including, in certain cases, distributions
made by the Fund in redemption of its shares) attributable directly or indirectly to (i) distributions received by the Fund from
a lower-tier regulated investment company or REIT that the Fund is required to treat as USRPI gain in its hands and (ii) gains realized
on the disposition of USRPIs by the Fund would retain their character as gains realized from USRPIs in the hands of the Fund’s
foreign shareholders and would be subject to U.S. tax withholding. In addition, such
distributions could result in the foreign shareholder
being required to file a U.S. tax return and pay tax on the distributions at regular U.S. federal income tax rates. The consequences to
a foreign shareholder, including the rate of such withholding and character of such distributions (e.g., as ordinary income or USRPI gain),
would vary depending upon the extent of the foreign shareholder’s current and past ownership of the Fund.
Foreign shareholders
of a Fund also may be subject to “wash sale” rules to prevent the avoidance of the tax-filing and payment obligations discussed
above through the sale and repurchase of Fund shares.
Beneficial holders
that are foreign persons should consult their tax advisers and, if holding shares through intermediaries, their intermediaries, concerning
the application of these rules to their investment in the Fund.
Other Reporting and
Withholding Requirements
Sections 1471-1474
of the Code and the U.S. Treasury and IRS guidance issued thereunder (collectively, “FATCA”) generally require a Fund to
obtain information sufficient to identify the status of each of its shareholders under FATCA or under an applicable intergovernmental
agreement (an “IGA”) between the United States and a foreign government. If a shareholder fails to provide the requested
information or otherwise fails to comply with FATCA or an IGA, the Fund may be required to withhold under FATCA at a rate of 30% with
respect to that shareholder on ordinary dividends it pays. The IRS and the Department of Treasury have issued proposed regulations providing
that these withholding rules will not apply to the gross proceeds of share redemptions or capital gain dividends a Fund pays. If a payment
by a Fund is subject to FATCA withholding, the Fund is required to withhold even if such payment would otherwise be exempt from withholding
under the rules applicable to foreign shareholders described above (e.g., short-term capital gain dividends and interest-related dividends).
Each prospective investor
is urged to consult its tax adviser regarding the applicability of FATCA and any other reporting requirements with respect to the prospective
investor’s own situation, including investments through an intermediary.
General Considerations
Special tax rules apply
to investments through defined contribution plans and other tax-qualified plans or tax-advantaged arrangements. Shareholders should consult
their tax adviser to determine the suitability of shares of a Fund as an investment through such plans and arrangements and the precise
effect of an investment on their particular tax situation.
The foregoing discussion
of the U.S. federal income tax consequences of investment in the Funds is a general and abbreviated summary based on the applicable provisions
of the Code, U.S. Treasury regulations, and other applicable authority currently in effect. For the complete provisions, reference should
be made to the pertinent Code sections and regulations. The Code and regulations are subject to change by legislative or administrative
action, possibly with retroactive effect. This discussion of the federal income tax treatment of the Funds and their shareholders does
not describe in any respect the tax treatment of any particular arrangement, e.g., tax-exempt trusts or insurance products, pursuant to
which or by which investments in the Funds may be made. Shareholders should consult their tax advisers as to their own tax situation,
including possible foreign, state, and local taxes.
EXPERTS
Ropes & Gray
LLP, The Prudential Tower, 800 Boylston Street, Boston, Massachusetts 02199-3600 serves as counsel to the Trust.
The financial statements
of the Funds incorporated herein by reference from the Trust’s Annual Report as of September 30, 2021 have been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as stated in its reports which are also incorporated herein
by reference. Such financial statements have been so incorporated in reliance upon the reports of Deloitte & Touche LLP given on the
authority of that firm as experts in accounting and auditing. Copies of the Trust’s Annual Report as of September 30, 2021
are available, without charge, upon request by calling 1-888-309-3539.
APPENDIX A—DESCRIPTION
OF SECURITIES RATINGS
Although the ratings
of fixed income securities by S&P, Moody’s, and Fitch are a generally accepted measurement of credit risk, they are subject
to certain limitations. For example, ratings are based primarily upon historical events and do not necessarily reflect the future. Furthermore,
there is a period of time between the issuance of a rating and the update of the rating, during which time a published rating may be inaccurate.
The descriptions of
the S&P, Moody’s, and Fitch’s commercial paper and bond ratings are set forth below.
Commercial Paper Ratings:
S&P commercial
paper ratings are graded into four categories, ranging from A for the highest quality obligations to D for the lowest. Issues assigned
the highest rating of A are regarded as having the greatest capacity for timely payment. Issues in this category are further refined with
the designations 1, 2, and 3 to indicate the relative degree of safety. The A-1 and A-2 categories are described as follows:
A-1
This
designation indicates that the degree of safety regarding timely payment is strong. Those issues determined to possess extremely strong
safety characteristics will be noted with a plus (+) sign designation.
A-2
Capacity
for timely payment on issues with this designation is satisfactory. However, the relative degree of safety is not as high as for issues
designated A-1.
Moody’s employs
three designations, all judged to be investment grade, to indicate the relative repayment ability of rated issuers. The two highest designations
are as follows:
Issuers (or supporting
institutions) rated Prime-1 (or P-1) have a superior ability for repayment of senior short-term debt obligations. Prime-1 (or P-1) repayment
ability will normally be evidenced by many of the following characteristics:
•
Leading
market positions in well-established industries.
•
High
rates of return on funds employed.
•
Conservative
capitalization structure with moderate reliance on debt and ample asset protection.
•
Broad
margins in earnings coverage of fixed financial charges and high internal cash generation.
•
Well-established
access to a range of financial markets and assured sources of alternate liquidity.
Issuers (or supporting
institutions) rated Prime-2 (or P-2) have a strong ability for repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be
more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
Fitch’s Short-Term
Credit Ratings are graded into six categories, ranging from ‘F-1’ for the highest quality obligations to ‘D’
for the lowest. The F-1 and F-2 categories are described as follows:
F-1—Indicates
the strongest capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong
credit feature.
F-2—A
satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of the higher
ratings.
Bond Ratings:
S&P
describes its four highest ratings for corporate debt as follows:
AAA—Debt
rated AAA has the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong.
AA—Debt
rated AA has a very strong capacity to pay interest and repay principal and differs from the higher rated issues only in a small degree.
A—Debt
rated A has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated categories.
BBB—Debt
rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas such debt normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest
and repay principal for debt in this category than in higher rated categories.
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.
Moody’s
describes its four highest corporate bond ratings as follows:
Aaa—Bonds
which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred
to as “gilt-edged.” Interest payments are protected by a large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues.
Aa—Bonds
which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they compose what are generally known
as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.
A—Bonds
which are rated A possess many favorable investment attributes and may be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment in
the future.
Baa—Bonds
which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as
well.
Moody’s applies
numerical modifiers 1, 2, and 3 in each generic rating classification from Aa through Caa in its corporate bond rating system. The modifier
1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic rating category.
Fitch
describes its four highest long-term credit ratings as follows:
AAA—“AAA”
ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment
of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
AA—“AA”
ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments.
This capacity is not significantly vulnerable to foreseeable events.
A—“A”
ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity
may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings.
BBB—“BBB”
ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is
considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is
the lowest investment grade category.
A
“+” or “–” may be appended to a rating to denote relative status within major rating categories. Such
suffixes are not added to the “AAA” category or to categories below “CCC.”
S&P
describes its below investment grade ratings for corporate debt as follows:
BB,
B, CCC, CC, C—Debt rated “BB,” “B,” “CCC,”
“CC,” and “C” is regarded, on balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation, “BB” indicates the lowest degree of speculation, and
“C” the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse conditions.
BB—Debt
rated “BB” has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties
or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and
principal payments. The “BB” rating category is also used for debt subordinated to senior debt that is assigned an actual
or implied “BBB–” rating.
B—Debt
rated “B” has a greater vulnerability to default but currently has the capacity to meet interest payments and principal
repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal.
The “B” rating category is also used for debt subordinated to senior debt that is assigned an actual or implied “BB”
or “BB–” rating.
CCC—Debt
rated “CCC” has a currently identifiable vulnerability to default, and is dependent upon favorable business, financial,
and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or
economic conditions, it is not likely to have the capacity to pay interest and repay principal. The “CCC” rating category
is also used for debt subordinated to senior debt that is assigned an actual or implied “B” or “B–”
rating.
CC—The
rating “CC” is typically applied to debt subordinated to senior debt that is assigned an actual or implied “CCC”
rating.
C—The
rating “C” is typically applied to debt subordinated to senior debt which is assigned an actual or implied “CCC–”
debt rating. The “C” rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
D—Debt
rated “D” is in payment default. The “D” rating category is used when interest payments or principal payments
are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made
during such grace period. The “D” rating also will be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
Moody’s
describes its below investment grade corporate bond ratings as follows:
Ba—Bonds
which are rated Ba are judged
to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments
may be very moderate and thereby not well safeguarded during other good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B—Bonds
which are rated B generally lack
characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small.
Caa—Bonds
which are rated Caa are of poor
standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.
Ca—Bonds
which are rated Ca represent obligations
which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.
C—Bonds
which are rated C are the lowest
rated class of bonds and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.
Fitch
describes its below investment grade long-term credit ratings as follows:
BB—“BB”
ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time;
however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category
are not investment grade.
B—“B”
ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently
being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment.
CCC,
CC, C—Default is a real possibility. Capacity for meeting financial commitments is solely
reliant upon sustained, favorable business or economic developments. A “CC” rating indicates that default of some kind appears
probable. “C” ratings signal imminent default.
DDD,
DD, D—The ratings of obligations in this category are based on their prospects for achieving
partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and
cannot be estimated with any precision, the following serve as general guidelines. “DDD” obligations have the highest potential
for recovery, around 90%-100% of outstanding amounts and accrued interest. “DD” indicates potential recoveries in the range
of 50%-90% and “D” the lowest recovery potential, i.e., below 50%.
Entities rated in this
category have defaulted on some or all of their obligations. Entities rated “DDD” have the highest prospect for resumption
of performance or continued operation with or without a formal reorganization process. Entities rated “DD” and “D”
are generally undergoing a formal reorganization or liquidation process; those rated “DD” are likely to satisfy a higher
portion of their outstanding obligations, while entities rated “D” have a poor prospect of repaying all obligations.
APPENDIX B—PROXY
VOTING POLICIES
The following represents
the proxy voting policies (the “Policies”) of the MassMutual Premier Funds (the “Funds”) with respect to the
voting of proxies on behalf of each series of the Funds (the “Series”). It is the policy of the Funds and MML Investment
Advisers, LLC (the “Adviser”), as investment manager to the Series, to delegate (with certain exceptions) voting responsibilities
and duties with respect to all proxies to the subadvisers (the “Subadvisers”) of the Series, including shareholder/member/partner
votes and consents for private entities that do not involve proxies, even if the securities issued by such private entities are not “voting
securities” as defined in Section 2(a)(42) of the Investment Company Act of 1940, as amended. All references to votes by proxy
in this policy shall be interpreted to include both votes by proxy and votes and consents that do not involve proxies. The Adviser will
vote proxies on behalf of any Fund of Funds or Feeder Funds for which it serves as investment adviser, as well as for any special situations
where the Adviser is in the best position to vote the proxy (“Special Situations”).
I. GENERAL
PRINCIPLES
In voting proxies,
the Adviser and Subadvisers will be guided by general fiduciary principles and their respective written proxy voting policies. The Adviser
and Subadvisers will act prudently and solely in the best interest of the beneficial owners of the accounts they respectively manage,
and for the exclusive purpose of providing benefit to such persons.
II. SUBADVISERS
TO WHICH THE FUNDS AND ADVISER HAVE DELEGATED PROXY VOTING RESPONSIBILITIES
1. The
Subadvisers each have the duty to provide a copy of their written proxy voting policies to the Adviser and Funds annually. The Subadvisers’
written proxy voting policies will maintain procedures that address potential conflicts of interest.
2. The
Subadvisers will each maintain a record of all proxy votes exercised on behalf of each series of the Funds for which they act as subadviser
and will furnish such records to the Adviser and Funds annually.
3. The
Subadvisers will report proxy votes that deviated from their normal proxy voting policies and any exceptions to their proxy voting policies
to the Adviser quarterly.
4. The
Subadvisers will provide the Adviser and Funds with all such information and documents relating to the Subadvisers’ proxy voting
in a timely manner, as necessary for the Adviser and Funds to comply with applicable laws and regulations.
III.
THE
FUNDS AND ADVISER
1. The
Chief Compliance Officer of the Funds will annually update the Trustees after a review of proxy voting records.
2. The
Trustees of the Funds will not vote proxies on behalf of the Funds or any Series.
3. The
Adviser will not vote proxies on behalf of the Funds or any Series, except that the Adviser will vote proxies on behalf of any Fund of
Funds or Feeder Fund for which it serves as investment adviser or in Special Situations.
Information regarding
how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available, without
charge, upon request, on the MassMutual website at https:// www.massmutual.com/funds and on the Securities and Exchange Commission’s
website at http://www.sec.gov.
MML INVESTMENT ADVISERS,
LLC
As
Investment Adviser to the MassMutual Select Funds, MassMutual Premier Funds,
MassMutual Advantage Funds, MML Series Investment
Fund, MML Series Investment Fund II, and MassMutual
Access Funds
(October 1, 2021)
General Overview
Policy
It is the policy of
MML Investment Advisers, LLC (“MML Investment Advisers” or the “Company”) to fulfill its responsibilities
under Rule 206(4)-6 (the “Rule”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”),
by delegating to subadvisers for each series of the MassMutual Select Funds, MassMutual Premier Funds, MassMutual Advantage Funds, MML
Series Investment Fund, MML Series Investment Fund II, and MassMutual Access Funds (each, a “Trust”) proxy
voting related to the securities in each subadviser’s respective portfolio, with the following exceptions: (i) each series
of a Trust operating as a “fund of funds” where MML Investment Advisers has not delegated proxy voting responsibility to
a subadviser (each a “Fund of Funds” and, collectively, the “Funds of Funds”); (ii) each series of the
Trusts operating as a “feeder fund” (each, a “Feeder Fund”) to a “master fund” (“Master
Fund”); and (iii) in certain other special situations (“Special Situations”). For these exceptions, MML Investment
Advisers will act on behalf of the Trusts to vote proxies (including Information Statements) (“Proxies”), as described below.
Background
MML Investment Advisers
currently serves as investment adviser to each of the Trusts, including those series that are Funds of Funds and Feeder Funds. The Funds
of Funds may invest in other series of the Trusts, funds advised by affiliates of MML Investment Advisers, and/or funds or exchange-traded
funds advised by an unaffiliated investment adviser.
MML Investment Advisers
will vote Proxies of the underlying funds held by the Funds of Funds, of the related Master Fund for a Feeder Fund, and in certain other
Special Situations in accordance with the following procedure.
Procedure
1. When a Fund of Funds
holds shares of an underlying fund advised by MML Investment Advisers, MML Investment Advisers will generally vote in favor of proposals
recommended by the underlying fund’s Board of Trustees and by a majority of the Trustees of the underlying fund who are not interested
persons of the underlying fund or of MML Investment Advisers. However, MML Investment Advisers may alternatively, in its discretion, (i) seek
instruction from the Fund of Fund’s Board of Trustees (or any member or committee thereof (provided that such member, or each member
of such committee, as the case may be, is not an interested person of the underlying fund or of MML Investment Advisers) delegated authority
to provide such instructions to MML Investment Advisers and vote in accordance with such instructions, or (ii) vote in accordance
with the recommendation of an independent proxy advisor or consultant retained by MML Investment Advisers to provide a recommendation,
on the basis solely of the best interest of the Fund of Funds and its shareholders, as to the matter; provided, however, that prior to
taking the action described in clause (ii) above, MML Investment Advisers is required to seek and obtain the prior approval of its
Board of Directors. When a quorum is present at any meeting, a majority of the Board members present may take any action. If it is not
possible to obtain a quorum of such Board, any action may be taken without a meeting if all Board members consent to the action in writing
and such written consents are filed with the records of the meetings of the Board.
2. When a Fund of Funds
holds shares of an underlying fund advised by a control affiliate of MML Investment Advisers, MML Investment Advisers will generally vote
the shares held by the Fund of Funds in the same proportions (for, against, abstain) as the votes of all other shareholders (other than
MML Investment Advisers or a control affiliate of MML Investment Advisers) of such underlying fund. However, MML Investment Advisers may
alternatively, in its discretion, (i) seek instruction from the Fund of Funds’ Board of Trustees (or any member or committee
thereof (provided that such member, or each member of such committee, as the case may be, is not an interested person of the underlying
fund or of MML Investment Advisers) delegated authority to provide such instructions to MML Investment Advisers) and
vote in accordance with such instructions, or (ii) vote
in accordance with the recommendation of an independent proxy advisor or consultant retained by MML Investment Advisers to provide a recommendation,
on the basis solely of the best interest of the Fund of Funds and its shareholders, as to the matter; provided, however, that prior to
taking the action described in clause (ii) above, MML Investment Advisers is required to seek and obtain the prior approval of its
Board of Directors. When a quorum is present at any meeting, a majority of the Board members present may take any action. If it is not
possible to obtain a quorum of such Board, any action may be taken without a meeting if all Board members consent to the action in writing
and such written consents are filed with the records of the meetings of the Board.
3. When a Fund of Funds
holds shares of an underlying fund not advised by MML Investment Advisers or a control affiliate of MML Investment Advisers, MML Investment
Advisers will generally vote the shares held by the Fund of Funds in the same proportions (for, against, abstain) as the votes of all
other shareholders of such underlying fund. However, MML Investment Advisers may alternatively, in its discretion, (i) seek instruction
from the Fund of Funds’ Board of Trustees (or any member or committee thereof delegated authority to provide such instructions
to MML Investment Advisers) and vote in accordance with such instructions, or (ii) vote in accordance with the recommendation of
an independent proxy advisor or consultant retained by MML Investment Advisers to provide a recommendation, on the basis solely of the
best interest of the Fund of Funds and its shareholders, as to the matter; provided, however, that prior to taking the action described
in clause (ii) above, MML Investment Advisers is required to seek and obtain the prior approval of its Board of Directors. When a
quorum is present at any meeting, a majority of the Board members present may take any action. If it is not possible to obtain a quorum
of such Board, any action may be taken without a meeting if all Board members consent to the action in writing and such written consents
are filed with the records of the meetings of the Board.
4. Notwithstanding
paragraph 3 above, (i) in the event a Fund of Funds is investing in an underlying fund pursuant to an exemptive order from the U.S.
Securities and Exchange Commission, MML Investment Advisers will vote the shares held by the Fund of Funds in accordance with any conditions
set forth in the order; or (ii) in the event a Fund of Funds is investing in an underlying fund pursuant to Section 12(d)(1)(F)
of the Investment Company Act of 1940, as amended, MML Investment Advisers will vote the shares held by the Fund of Funds either by seeking
instructions from the Fund of Funds’ shareholders or vote the shares in the same proportions (for, against, abstain) as the votes
of all other shareholders of the underlying fund.
5. When a fund is structured
as a Feeder Fund that is an interest holder of a Master Fund and is requested to vote on any matter submitted to interest holders of the
Master Fund, MML Investment Advisers will, on behalf of the Feeder Fund, generally vote the shares held by the Feeder Fund in the same
proportions (for, against, abstain) as the votes of all other interest holders of such Master Fund. However, if the Feeder Fund elects
to hold a meeting of its own shareholders to consider such matters, MML Investment Advisers will, on behalf of the Feeder Fund, vote the
shares held by the Feeder Fund in proportion to the votes received from its shareholders, with shares for which a Feeder Fund receives
no voting instructions being voted in the same proportion as the votes received from the other Feeder Fund shareholders.
6. Although rare, there
is a possibility of Special Situations presented where MML Investment Advisers is in the best position to vote Proxies. In those Special
Situations, which are determined by the Investment Management team in consultation with MML Investment Advisers’ Chief Compliance
Officer and/or legal counsel, MML Investment Advisers (i) will, when the Special Situation involves a proxy for a Funds’ investment
in another mutual fund or pooled investment vehicle, generally vote the shares held in the same proportions (for, against, abstain) as
the votes of all other shareholders of such underlying fund; (ii) may seek instruction from the relevant Trust’s Board of
Trustees (or any member or committee thereof delegated authority to provide such instructions to MML Investment Advisers) and vote in
accordance with such instructions; or (iii) may vote in accordance with the recommendation of an independent proxy advisor or consultant
retained by MML Investment Advisers to provide a recommendation, on the basis solely of the best interest of the Trust and its shareholders,
as to the matter; provided, however, that prior to taking the action described in clause (iii) above, MML Investment Advisers is
required to seek and obtain the prior approval of its Board of Directors. When a quorum is present at any meeting, a majority of the
Board members present may take any action. If it is not
possible to obtain a quorum of such Board, any action may be taken without a meeting if all Board members consent to the action in writing
and such written consents are filed with the records of the meetings of the Board.
Operating Procedures
MML Investment Advisers
exercises its proxy voting responsibility with respect to the Funds of Funds, Feeder Funds, and Special Situations through the Investment
Management team.
All proxy statements,
including Information Statements (“Proxy Statements”) and proxy cards received by associates relating to a Fund of Funds,
Feeder Fund, or Special Situations are to be immediately forwarded to the Investment Management team. The head of Investment Management
or that person’s designee, then is responsible for (i) logging, reviewing and casting the vote for all Proxies solicited and
received, (ii) voting such Proxies in a manner consistent with these policies and procedures, (iii) documenting the method followed
in determining how to cast the vote, and (iv) maintaining the records required by Rule 204-2 under the Advisers Act.
Record Retention
The Investment Management
team will retain for such time periods as set forth in Rule 204-2:
•
Copies
of all policies and procedures required by the Rule;
•
A
copy of each Proxy Statement that MML Investment Advisers receives regarding a Fund of Fund’s or Feeder Fund’s investments;
•
A
copy of each Proxy Statement that MML Investment Advisers receives regarding a Special Situation;
•
A
record of each vote cast by MML Investment Advisers on behalf of a Fund of Funds, a Feeder Fund, or in a Special Situation; and
•
A
copy of any document created by MML Investment Advisers that was material to making a decision how to vote Proxies on behalf of a Fund
of Funds, a Feeder Fund, or in a Special Situation or that otherwise memorializes the basis for that decision.
BARINGS LLC
GLOBAL
PROXY VOTING POLICY
Key Points
•
Barings
LLC (“Barings”) has established a Proxy Voting Policy to establish the manner in which Barings fulfills its proxy voting
responsibilities and complies with applicable regulations.
•
Any
proxies received by Barings should be forwarded as soon as possible to the Proxy Voting Team for timely processing and voting.
•
Barings
has a responsibility to oversee any service providers it may engage to facilitate proxy voting on behalf of its clients.
Introduction/Policy
Statement
As an investment adviser
or manager, Barings has a fiduciary duty to vote proxies on behalf of its clients (“Clients”). Regulations that apply to
Barings, including Rule 206(4)-6 of the Investment Advisers Act of 1940 applicable to US regulated investment advisers, requires
that Barings adopt and implement written policies and procedures that are reasonably designed to ensure that proxies are voted in the
best interest of its Clients. The policies and procedures must:
•
Describe
how Barings addresses material conflicts that may arise between Barings’ interests and those of its Clients;
•
Disclose
to Clients how they may obtain information regarding how Barings voted with respect to their securities; and
•
Describe
to Clients Barings’ proxy voting policies and procedures and, upon request, furnish a copy of the policies and procedures.
The purpose of this
Global Proxy Voting Policy (“Policy”) is to establish the manner in which Barings will fulfill its proxy voting responsibilities
and comply with applicable regulatory requirements. Barings understands that voting proxies is part of its investment advisory and management
responsibilities and believes that as a general principle proxies should be acted upon (voted or abstained) solely in the best interests
of its Clients (i.e., in a manner that is most likely to enhance the economic value of the underlying securities held in Client accounts).
No Barings associate
(“Associate”), officer, board of managers/directors of Barings or its affiliates (other than those assigned such responsibilities
under the Policy) can influence how Barings votes proxies, unless such person has been requested to provide assistance from an authorized
investment person or designee (“Proxy Analyst”) or from a member of the Trading Practices Committee and has disclosed any
known Material Conflict, as discussed in the Procedures section below.
Requirements
Standard
Proxy Procedures
Barings engages a proxy
voting service provider (“Service Provider”) responsible for processing and maintaining records of proxy votes. In addition,
the Service Provider, a recognized authority on proxy voting and corporate governance, provides research and recommendations (including
environmental, social and governance topics) on proxies to Barings as its research provider (“Research Provider”). Barings’
policy is to generally vote all Client proxies for which it has proxy voting discretion in accordance with the recommendations of the
Research Provider or with the Research Provider’s proxy voting guidelines (“Guidelines”), in the absence of a recommendation.
In circumstances where the Research Provider has not provided a recommendation, the proxy will be analyzed on a case-by-case basis.
Barings recognizes that there may be
times when it is in the best interests of Clients to vote proxies, (i) against the Research Provider’s recommendations; or
(ii) in instances where the Research Provider has not provided a recommendation, against the Guidelines. Barings can vote, in whole
or part, against the Research Provider’s recommendations or Guidelines as it deems appropriate. Procedures are designed to ensure
that votes against the Research Provider’s recommendations or Guidelines are made in the best interests of Clients and are not
the result of any material conflict of interest (“Material Conflict”). For purposes of this Policy, a Material Conflict
is defined as any position, relationship or interest, financial or otherwise, of Barings or Associate that could reasonably be expected
to affect the independence or judgment concerning proxy voting.
Review
of Service Provider/Research Provider
In determining whether
to retain, or continue the retention of, the Service Provider and/or Research Provider Barings should consider, among other things:
•
if
the Service Provider and/or Research Provider have the capacity and competency to adequately analyze the matters for which Barings is
responsible for voting by, for example, reviewing the adequacy and quality of the Service Provider’s and/or Research Provider’s
staffing, personnel, and/or technology;
•
if
the Research Provider has an effective process for seeking timely input from issuers and Research Provider clients with respect to such
matters as its proxy voting policies, methodologies, and if applicable, its peer group constructions. If peer group comparisons are a
component of the Research Provider’s substantive evaluation, Barings should consider how the Research Provider incorporates appropriate
input in formulating its methodologies and construction of issuer peer groups, and how, in constructing peer groups, the Research Provider
takes into account the unique characteristics regarding the issuer, to the extent available, such as the issuer’s size; its governance
structure; its industry and any particular practices unique to that industry; and its history;
•
whether
the Research Provider has adequately disclosed to Barings its methodologies in formulating voting recommendations, such that Barings can
understand the factors underlying the Research Provider’s voting recommendations. In addition, Barings should consider the nature
of any third-party information sources that the Research Provider uses as a basis for its voting recommendations;
•
whether
the Research Provider has adequate policies and procedures to identify, disclose, and address actual and potential conflicts of interest,
including (1) conflicts relating to the provision of proxy voting recommendations and proxy voting services generally, (2) conflicts
relating to activities other than providing proxy voting recommendations and proxy voting services, and (3) conflicts presented by
certain affiliations;
•
the
effectiveness of the Research Provider’s firm’s policies and procedures for obtaining current and accurate information relevant
to matters included in its research and on which it makes voting recommendations. In assessing such matters, Barings should consider:
the Research Provider’s engagement with issuers, including the firm’s process for ensuring that it has complete and accurate
information about the issuer and each particular matter, and the firm’s process, if any, for investment advisers to access the
issuer’s views about the firm’s voting recommendations in a timely and efficient manner; and
•
Barings
should consider requiring the Research Provider to update Barings regarding business changes Barings considers relevant (i.e.,
with respect to the Research Provider’s capacity and competency to provide independent proxy voting advice or carry out voting
instructions), and should consider whether the Research Provider appropriately updates its methodologies, guidelines, and voting recommendations
on an ongoing basis, including in response to feedback from issuers and their shareholders.
Other
Considerations
There could be circumstances
where Barings is unable or determines not to vote a proxy on behalf of its Clients. The following is a non-inclusive list of examples
whereby Barings may decide not to vote proxies on behalf of its Clients:
•
The cost of voting a proxy for
a foreign security outweighs the expected benefit to the Client, so long as refraining from voting does not materially harm the Client;
•
Barings
is not given enough time to process the vote (i.e., receives a meeting notice and proxy from the issuer too late to permit voting);
•
Barings
may hold shares on a company’s record date, but sells them prior to the company’s meeting date;
•
Barings
has outstanding sell orders on a particular security and the decision to refrain from voting may be made in order to facilitate such sale;
•
The
underlying securities have been lent out pursuant to a security lending program; or
•
The
company has participated in share blocking, which would prohibit Barings ability to trade or loan shares for a period of time.
Administration
of Proxy Voting
Barings has designated
the Proxy Voting Team to ensure the responsibilities set forth in this Policy are satisfied.
Handling
of Proxies
Proxy statements and
ballots are typically routed directly to Barings’ proxy voting Service Provider. In the event that an Associate receives a proxy
statement or ballot, the Associate should immediately forward the statement or ballot to the Proxy Voting Team who will record receipt
of the proxy, route the materials for review, maintain a record of all action taken and process votes.
Voting
of Proxies
Typically, Barings
will vote all Client proxies for which it has proxy voting discretion, where no Material Conflict exists, in accordance with the Research
Provider’s recommendation or Guidelines, unless (i) Barings is unable or determines not to vote a proxy in accordance with
the Policy; or (ii) a Proxy Analyst determines that it is in the Clients’ best interests to vote against the Research Provider’s
recommendation or Guidelines. In the event a Proxy Analyst believes a proxy should be voted against the Research Provider’s recommendations
or Guidelines, the Proxy Voting Team will vote the proxy in accordance with the Proxy Analyst’s recommendation so long as (i) no
other Proxy Analyst disagrees with such recommendation; and (ii) no known Material Conflict is identified by the Proxy Analyst(s)
or the Proxy Voting Team. If a Material Conflict is identified by a Proxy Analyst or the Proxy Voting Team, the proxy will be submitted
to the Trading Practices Committee to determine how the proxy is to be voted in order to achieve the Clients’ best interests.
Pre-vote communications
with proxy-solicitors are prohibited. In the event that a pre-vote communication occurs, it should be reported to the Trading Practices
Committee, the relevant Head of Compliance and/or General Counsel prior to voting. Any questions or concerns regarding proxy-solicitor
arrangements should be addressed to the relevant Head of Compliance and/or General Counsel, or the respective designees.
Oversight
Barings’ Trading
Practices Committee is responsible for (i) at least annually, reviewing and recommending changes as needed to the Policy including
but not limited to how proxies are processed, to ensure that the Policy serves its intended purpose; (ii) approving proxy voting
forms as needed; and (iii) reviewing any proposed changes to disclosures. In addition to the above, the Proxy Voting Team will provide
materials to the Barings’ Trading Practices Committee on the following matters:
•
The
extent to which potential credible factual errors, potential incompleteness, or potential methodological weaknesses in the Service Provider
and or Research Provider (that Barings becomes aware of and deems relevant) are materially affecting the research or recommendations that
Barings used or is using in voting;
•
Confirm to the Trading Practices
Committee that it believes that Barings is casting votes on behalf of its clients consistently with the Policy. This confirmation will
be based on the Proxy Voting Team, at least annually, sampling the proxy votes cast on behalf of its clients. The review will consist
of sampling of proxy votes that relate to proposals that may require more issuer-specific analysis (e.g.,
mergers and acquisition transactions, dissolutions, conversions, or consolidations) and providing the results of this testing to the Trading
Practices Committee;
•
Periodically
reviewing the Service Provider’s guidelines used in the voting of proxies and notify the Trading Practices Committee of any material
changes;
•
Confirm
that Barings is casting votes when a conflict of interest exists in compliance with the Policy;
•
Escalating
any issues relating to proxy voting identified during internal or external audits or assessments or reviews to Trading Practices Committee;
and
•
In
circumstances where either the Proxy Voting Team has not provided a recommendation or has not contemplated an issue within its Guidelines
and the proxy is analyzed on a case-by-case basis, or the matter subject to the proxy was contested or highly controversial, considering
whether a higher degree of analysis was necessary to assess whether any votes cast on behalf of Barings’ clients were cast in the
clients’ best interest.
New
Account Procedures
Investment management
agreements generally delegate the authority to Barings to vote proxies in accordance with its Policy. In the event that an investment
management agreement is silent on proxy voting, Barings should obtain written instructions from the Client as to their voting preference.
However, when the Client does not provide written instructions as to their voting preference, Barings will assume proxy voting responsibilities.
In the event that a Client makes a written request regarding proxy voting, Barings will vote as instructed.
Required
Disclosures and Client Request for Information
Barings will include
a summary of this Policy in the Form ADV Part 2A for its US registered investment advisers, as well as provide instructions as to
how a Client may request a copy of this Policy and/or a record of how Barings voted the Client’s proxies.
Requests will be directed to the Proxy Voting Team, who will provide the information to the appropriate client service representative
in order to respond to the Client in a timely manner.
Conflict Resolution
and Escalation Process
Associates should immediately
report any issues they believe are a potential or actual breach of this Policy to their relevant business unit management and to the relevant
Chief Compliance Officer (or relevant designee). The relevant Chief Compliance Officer (or relevant designee) will review the matter and
determine whether the issue is an actual breach and whether to grant an exception, and/or the appropriate course of action. When making
such determination, the relevant Chief Compliance Officer (or relevant designee) may, as part of his/her review, discuss the matter with
relevant business unit management, members of the Senior Leadership Team, governance committees or other parties (i.e. legal counsel,
auditor, etc.).
The relevant Compliance
Department can grant exceptions to any provision of this Policy so long as such exceptions are consistent with the purpose of the Policy
and applicable law, are documented and such documentation is retained for the required retention period. Any questions regarding the applicability
of this Policy should be directed to the appropriate Compliance Department or the relevant Chief Compliance Officer (or relevant designee).
Books and Records
Retained
The table below identifies
each Record that is required to be retained as it relates to this Policy unless a different retention period is required by local regulations
in the relevant jurisdiction. Records may be unique to the relevant jurisdiction or combined with records maintained by Barings.
|
Description/ Requirement |
|
|
Barings Record |
|
|
Creator |
|
|
Owner |
|
|
Retention Period |
|
|
Source |
|
|
The Trading Practices Committee review of Policy,
proxy activity, and approval of Proxy Voting Forms |
|
|
Trading Practices Committee meeting materials
|
|
|
Proxy Voting Team |
|
|
Trading Practices Committee Chairperson
|
|
|
7 Years |
|
|
Barings Policy Requirement and Investment Advisers
Act of 1940, Rule 206(4)-6 Barings Policy requirement for Barings US regulated Advisers |
|
|
Proxy statements, research, recommendations,
and records of votes cast |
|
|
Proxy Records |
|
|
Service Provider or Proxy Voting Team
|
|
|
Service Provider or Proxy Voting Team
|
|
|
7 Years |
|
|
Barings Policy Requirement and Investment Advisers
Act of 1940, Rule 206(4)-6 Barings Policy requirement for Barings US regulated Advisers |
|
|
Proxy Voting Forms (including supporting documentation
used in deciding how to vote) |
|
|
Proxy Voting Forms |
|
|
Proxy Voting Team and/or Proxy Analyst
|
|
|
Proxy Voting Team |
|
|
7 Years |
|
|
Barings Policy Requirement and Investment Advisers
Act of 1940, Rule 206(4)-6 Barings Policy requirement for Barings US regulated Advisers |
|
|
Client written requests for proxy voting information
and responses thereto |
|
|
Client Proxy Requests |
|
|
Proxy Voting Team |
|
|
Proxy Voting Team |
|
|
7 Years |
|
|
Barings Policy Requirement and Investment Advisers
Act of 1940, Rule 206(4)-6 Barings Policy requirement for Barings US regulated Advisers |
|
|
Description/ Requirement |
|
|
Barings Record |
|
|
Creator |
|
|
Owner |
|
|
Retention Period |
|
|
Source |
|
|
Form N-PX, for proxies voted on behalf of an
investment company for which Barings serves as investment adviser and is responsible for making such filing on behalf of its Clients
|
|
|
Form N-PX |
|
|
Proxy Voting Team |
|
|
Proxy Voting Team |
|
|
7 Years |
|
|
Barings Policy requirement and Investment
Advisers Act of 1940, Rule 206(4)-6 for Barings US regulated Advisers Rule 30b1-4 |
|
|
The Proxy Voting Policy, associated procedures
and any amendments thereto |
|
|
Proxy Voting Policy |
|
|
Compliance Department |
|
|
Compliance Department |
|
|
7 Years |
|
|
Barings Policy requirement |
|
|
A copy of the Research Provider’s proxy
voting guidelines |
|
|
Research Provider’s Proxy Voting Guidelines
|
|
|
Research Provider |
|
|
Proxy Voting Team |
|
|
7 Years |
|
|
Barings Policy requirement |
|
Original Date of
Policy: October 2004 (Barings)
Last Revision Date:
March 2021
APPENDIX C—ADDITIONAL
PORTFOLIO MANAGER INFORMATION
Barings LLC
Baring International Investment Limited
The portfolio managers
of the Short-Duration Bond Fund are Yulia Alekseeva, Stephen Ehrenberg, Natalia Krol, Omotunde Lawal, Charles Sanford, and Douglas Trevallion,
II.
Other
Accounts Managed:
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory
Fee is Performance- Based* |
|
|
Total Assets* |
|
Yulia Alekseeva |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
|
$ |
4,470 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
|
$ |
710 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other accounts |
|
|
|
|
23 |
|
|
|
|
$ |
13,687 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Stephen Ehrenberg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
|
$ |
3,804 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other pooled investment vehicles |
|
|
|
|
2 |
|
|
|
|
$ |
478 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other accounts |
|
|
|
|
39 |
|
|
|
|
$ |
57,562 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Natalia Krol |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
3 |
|
|
|
|
$ |
1,370 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other pooled investment vehicles |
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other accounts |
|
|
|
|
12 |
|
|
|
|
$ |
5,226 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Omotunde Lawal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
4 |
|
|
|
|
$ |
1,549 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other pooled investment vehicles |
|
|
|
|
2 |
|
|
|
|
$ |
441 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other accounts |
|
|
|
|
15 |
|
|
|
|
$ |
6,241 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Charles Sanford |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
|
$ |
3,804 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
|
$ |
574 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other accounts |
|
|
|
|
81 |
|
|
|
|
$ |
104,896 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Douglas Trevallion, II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
7 |
|
|
|
|
$ |
4,470 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other pooled investment vehicles |
|
|
|
|
3 |
|
|
|
|
$ |
337 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other accounts |
|
|
|
|
29 |
|
|
|
|
$ |
13,481 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the Short-Duration Bond Fund.
Ownership
of Securities:
As of September 30,
2021, the portfolio managers did not own any shares of the Short-Duration Bond Fund. The portfolio managers do not directly own any shares
of the Fund, but may have an economic interest in the Fund due to their participation in a deferred compensation plan and/or 401(k) plan.
The portfolio managers
of the High Yield Fund are Sean Feeley and Scott Roth.
Other
Accounts Managed:
|
|
|
Number of Accounts Managed* |
|
|
Total Assets* |
|
|
Number of Accounts Managed for which Advisory
Fee is Performance- Based* |
|
|
Total Assets* |
|
Sean Feeley |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
8 |
|
|
|
|
$ |
1,809 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other pooled investment vehicles |
|
|
|
|
9 |
|
|
|
|
$ |
3,682 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other accounts |
|
|
|
|
25 |
|
|
|
|
$ |
4,720 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Scott Roth |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies** |
|
|
|
|
5 |
|
|
|
|
$ |
839 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other pooled investment vehicles |
|
|
|
|
12 |
|
|
|
|
$ |
5,762 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
Other accounts |
|
|
|
|
26 |
|
|
|
|
$ |
4,061 million |
|
|
|
|
|
0 |
|
|
|
|
$ |
0 |
|
|
*
The
information provided is as of September 30, 2021.
**
Does
not include the High Yield Fund.
Ownership
of Securities:
As of September 30,
2021, the portfolio managers did not own any shares of the High Yield Fund. The portfolio managers do not directly own any shares of the
Fund, but may have an economic interest in the Fund due to their participation in a deferred compensation plan and/or 401(k) plan.
Conflicts
of Interest:
The
potential for material conflicts of interest may exist when a portfolio manager has responsibilities for the day-to-day management of
multiple accounts. These conflicts may be heightened to the extent a portfolio manager, Barings, BIIL, and/or an affiliate has an investment
in one or more of such accounts or an interest in the performance of one or more such accounts. Barings and BIIL have identified (and
summarized below) areas where material conflicts of interest are most likely to arise, and have adopted policies and procedures that they
believe are reasonably designed to address such conflicts.
It
is possible that an investment opportunity may be suitable for both a fund and other accounts managed by a portfolio manager, but may
not be available in sufficient quantities for both the fund and the other accounts to participate fully. Similarly, there may be limited
opportunity to sell an investment held by a fund and another account. A conflict may arise where the portfolio manager may have an incentive
to treat an account preferentially as compared to a fund because the account pays Barings and BIIL a performance-based fee or the portfolio
manager, Barings, BIIL, or an affiliate has an interest in the account. Barings and BIIL have adopted an investment allocation policy
and trade allocation procedures to address allocation of portfolio transactions and investment opportunities across multiple clients.
These policies are designed to achieve fair and equitable treatment of all clients over time, and specifically prohibit allocations based
on performance of an account, the amount or structure of the management fee, performance fee or profit sharing allocations, participation
or investment by an employee, Barings, BIIL or an affiliate, and whether the account is public, private, proprietary or third party.
Potential
material conflicts of interest may also arise related to the knowledge and timing of a fund’s trades, investment opportunities
and broker selection. Portfolio managers may have information about the size, timing and possible market impact of a fund’s trades.
It is theoretically possible that portfolio managers could use this information for their personal advantage and/or the advantage of other
accounts they manage, or to the possible detriment of a fund. For example, a portfolio manager could front run a fund’s trade or
short sell a security for an account immediately prior to a fund’s sale of that security. To address these conflicts, Barings and
BIIL have adopted policies and procedures governing employees’ personal securities transactions, the use of short sales, and trading
between the fund and other accounts managed by the portfolio manager or accounts owned by Barings, BIIL or its affiliates.
With respect to
securities transactions for the funds, Barings and BIIL determine which broker to use to execute each order, consistent with their duty
to seek best execution of the transaction. Barings and BIIL manage certain other accounts, however, where Barings and BIIL may be limited
by the client with respect to the selection of brokers or directed to trade such client’s transactions through a particular broker.
In these cases, trades for a fund in a particular security may be placed separately from, rather than aggregated with, such other accounts.
Placing separate transaction orders for a security may temporarily affect the market price of the security or otherwise affect the execution
of the transaction to the possible detriment of a fund or the other account(s) involved. Barings and BIIL have policies and procedures
that address best execution and directed brokerage.
A portfolio manager
may also face other potential conflicts of interest in managing a fund, and the above is not a complete description of every conflict
of interest that could be deemed to exist in managing both a fund and the other accounts listed above.
Compensation:
The discussion below
describes the portfolio managers’ compensation as of September 30, 2021.
Compensation
packages at Barings and BIIL are structured such that key professionals have a vested interest in the continuing success of each firm.
Portfolio managers’ compensation is comprised of base salary, and a discretionary, performance-driven annual bonus. Certain key
individuals may also receive a long-term incentive award and/or a performance fee award. As part of each firm’s continuing effort
to monitor retention, Barings and BIIL participate in annual compensation surveys of investment management firms and subsidiaries to ensure
that Barings’ and BIIL’s compensation are competitive with industry standards.
The base salary component
is generally positioned at mid-market. Increases are tied to market, individual performance evaluations and budget constraints.
Portfolio
managers may receive a yearly bonus. Factors impacting the potential bonuses include but are not limited to: i) investment performance
of funds/accounts managed by a portfolio manager, ii) financial performance of Barings and BIIL, iii) client satisfaction, and iv) teamwork.
Long-term
incentives are designed to share the long-term success of the firm and take the form of deferred cash awards, which may include an award
that resembles phantom restricted stock; linking the value of the award to a formula which includes Barings’ and BIIL’s
overall earnings. A voluntary separation of service will result in a forfeiture of unvested long-term incentive awards.
MassMutual Premier Funds
PART C. OTHER INFORMATION
(a) |
Agreement and Declaration
of Trust |
|
|
|
(1) |
Amended
and Restated Agreement and Declaration of Trust of the MassMutual Premier Funds (the “Trust” or “Registrant”)
dated November 21, 2011 (42) |
|
|
|
(b) |
Bylaws |
|
|
|
(1) |
Amended
and Restated Bylaws of MassMutual Premier Funds dated April 30, 2021 (57) |
|
|
|
(c) |
Instruments Defining Rights
of Security Holders – Please refer to Article V of the Trust’s Amended and Restated Agreement and Declaration of Trust |
|
|
(d) |
Management Contracts |
|
|
|
(1) |
Investment
Management Agreement between the Trust and Massachusetts Mutual Life Insurance Company (“MassMutual”) (assigned to MML Investment
Advisers, LLC (“MML Advisers”) on April 1, 2014) relating to the MassMutual Premier Money Market Fund (also previously known
as the MassMutual Premier U.S. Government Money Market Fund and now known as the MassMutual U.S. Government Money Market Fund) dated as
of November 21, 2011 (42) |
|
(2) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Money Market Fund (also previously known as the MassMutual Premier U.S. Government Money Market Fund and now known as the MassMutual
U.S. Government Money Market Fund) dated as of June 1, 2015 (48) |
|
(3) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
Short-Duration Bond Fund (now known as the MassMutual Short-Duration Bond Fund) dated as of November 21, 2011 (42) |
|
(4) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Short-Duration Bond Fund (now known as the MassMutual Short-Duration Bond Fund) dated as of June 1, 2012 (44) |
|
(5) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier Short-Duration Bond Fund (now known as the MassMutual Short-Duration Bond Fund) dated as of April 1, 2014 (47) |
|
(6) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
Inflation-Protected and Income Fund (now known as the MassMutual Inflation-Protected and Income Fund) dated as of November 21, 2011
(42) |
|
(7) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Inflation-Protected and Income Fund (now known as the MassMutual Inflation-Protected and Income Fund) dated as of June 1,
2012 (44) |
|
(8) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier Inflation-Protected and Income Fund (now known as the MassMutual Inflation-Protected and Income Fund) dated as of April 1,
2014 (47) |
|
(9) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
Core Bond Fund (now known as the MassMutual Core Bond Fund) dated as of November 21, 2011 (42) |
|
(10) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Core Bond Fund (now known as the MassMutual Core Bond Fund) dated as of June 1, 2012 (44) |
|
(11) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier Core Bond (now known as the MassMutual Core Bond Fund) Fund dated as of April 1, 2014 (47) |
|
(12) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
Diversified Bond Fund (now known as the MassMutual Diversified Bond Fund) dated as of November 21, 2011 (42) |
|
(13) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Diversified Bond Fund (now known as the MassMutual Diversified Bond Fund) dated as of June 1, 2012 (44) |
|
(14) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier Diversified Bond Fund (now known as the MassMutual Diversified Bond Fund) dated as of April 1, 2014 (47) |
|
(15) |
Amendment
Three to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to
the MassMutual Premier Diversified Bond Fund (now known as the MassMutual Diversified Bond Fund) dated as of June 1, 2016 (49) |
|
(16) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
High Yield Fund (now known as the MassMutual High Yield Fund) dated as of November 21, 2011 (42) |
|
(17) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier High Yield Fund (now known as the MassMutual High Yield Fund) dated as of June 1, 2012 (44) |
|
(18) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier High Yield Fund (now known as the MassMutual High Yield Fund) dated as of April 1, 2014 (47) |
|
(19) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
Balanced Fund (now known as the MassMutual Balanced Fund) dated as of November 21, 2011 (42) |
|
(20) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Balanced Fund (now known as the MassMutual Balanced Fund) dated as of June 1, 2012 (44) |
|
(21) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier Balanced Fund (now known as the MassMutual Balanced Fund) dated as of January 1, 2016 (48) |
|
(22) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
Disciplined Value Fund (now known as the MassMutual Disciplined Value Fund) dated as of November 21, 2011 (42) |
|
(23) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Disciplined Value Fund (now known as the MassMutual Disciplined Value Fund) dated as of June 1, 2012 (44) |
|
(24) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier Disciplined Value Fund (now known as the MassMutual Disciplined Value Fund) dated as of April 1, 2014 (47) |
|
(25) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
Main Street Fund (now known as the MassMutual Main Street Fund) dated as of November 21, 2011 (42) |
|
(26) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Main Street Fund (now known as the MassMutual Main Street Fund) dated as of June 1, 2012 (44) |
|
(27) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier Main Street Fund (now known as the MassMutual Main Street Fund) dated as of April 1, 2014 (47) |
|
(28) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
Disciplined Growth Fund (now known as the MassMutual Disciplined Growth Fund) dated as of November 21, 2011 (42) |
|
(29) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Disciplined Growth Fund (now known as the MassMutual Disciplined Growth Fund) dated as of June 1, 2012 (44) |
|
(30) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier Disciplined Growth (now known as the MassMutual Disciplined Growth Fund) Fund dated as of April 1, 2014 (47) |
|
(31) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
Small/Mid Cap Opportunities Fund (also previously known as the MassMutual Premier Small Cap Opportunities Fund and now known as the MassMutual
Small Cap Opportunities Fund) dated as of November 21, 2011 (42) |
|
(32) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Small/Mid Cap Opportunities Fund (also previously known as the MassMutual Premier Small Cap Opportunities Fund and now known as
the MassMutual Small Cap Opportunities Fund) dated as of June 1, 2012 (44) |
|
(33) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Small/Mid Cap Opportunities Fund (also previously known as the MassMutual Premier Small Cap Opportunities Fund and now known as
the MassMutual Small Cap Opportunities Fund) dated as of January 1, 2016 (48) |
|
(34) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier Global
Fund (now known as the MassMutual Global Fund) dated as of November 21, 2011 (42) |
|
(35) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Global Fund (now known as the MassMutual Global Fund) dated as of June 1, 2012 (44) |
|
(36) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier Global Fund (now known as the MassMutual Global Fund) dated as of April 1, 2014 (47) |
|
(37) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
International Equity Fund (now known as the MassMutual International Equity Fund) dated as of November 21, 2011 (42) |
|
(38) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier International Equity Fund (now known as the MassMutual International Equity Fund) dated as of June 1, 2012 (44) |
|
(39) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier International Equity Fund (now known as the MassMutual International Equity Fund) dated as of July 1, 2020 (55) |
|
(40) |
Investment
Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier
Strategic Emerging Markets Fund (now known as the MassMutual Strategic Emerging Markets Fund) dated as of November 21, 2011 (42) |
|
(41) |
Amendment
to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the MassMutual
Premier Strategic Emerging Markets Fund (now known as the MassMutual Strategic Emerging Markets Fund) dated as of June 1, 2012 (44) |
|
(42) |
Amendment
Two to Investment Management Agreement between the Trust and MassMutual (assigned to MML Advisers on April 1, 2014) relating to the
MassMutual Premier Strategic Emerging Markets Fund (now known as the MassMutual Strategic Emerging Markets Fund) dated as of April 1,
2014 (47) |
|
(43) |
Investment
Subadvisory Agreement between MassMutual and Babson Capital Management LLC (“Babson Capital”) (now known as Barings LLC
(“Barings”)) (assigned to MML Advisers on April 1, 2014) relating to the MassMutual Premier Money Market Fund (also
previously known as the MassMutual Premier U.S. Government Money Market Fund and now known as the MassMutual U.S. Government Money Market
Fund) dated as of October 29, 2004 (22) |
|
(44) |
Amendment
to Investment Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1,
2014) relating to the MassMutual Premier Money Market Fund (also previously known as the MassMutual Premier U.S. Government Money Market
Fund and now known as the MassMutual U.S. Government Money Market Fund) dated as of June 1, 2008 (33) |
|
(45) |
Investment
Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1, 2014) relating
to the MassMutual Premier Short-Duration Bond Fund (now known as the MassMutual Short-Duration Bond Fund) dated as of October 29,
2004 (22) |
|
(46) |
Amendment
to Investment Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1,
2014) relating to the MassMutual Premier Short-Duration Bond Fund (now known as the MassMutual Short-Duration Bond Fund) dated as of June 1,
2008 (33) |
|
(47) |
Amendment
Two to Investment Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April
1, 2014) relating to the MassMutual Premier Short-Duration Bond Fund (now known as the MassMutual Short-Duration Bond Fund) dated as of
May 1, 2021 (57) |
|
(48) |
Investment
Sub-Subadvisory Agreement between Barings and Baring International Investment Limited (“BIIL”) relating to the MassMutual
Short-Duration Bond Fund dated as of May 1, 2021 (57) |
|
(49) |
Investment
Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1, 2014) relating
to the MassMutual Premier Inflation-Protected Bond Fund (also previously known as the MassMutual Premier Inflation-Protected and Income
Fund and now known as the MassMutual Inflation-Protected and Income Fund) dated as of October 29, 2004 (22) |
|
(50) |
Amendment
to Investment Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1,
2014) relating to the MassMutual Premier Inflation-Protected Bond Fund (also previously known as the MassMutual Premier Inflation-Protected
and Income Fund and now known as the MassMutual Inflation-Protected and Income Fund) dated as of June 1, 2008 (33) |
|
(51) |
Amendment
Two to Investment Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April
1, 2014) relating to the MassMutual Premier Inflation-Protected Bond Fund (also previously known as the MassMutual Premier Inflation-Protected
and Income Fund and now known as the MassMutual Inflation-Protected and Income Fund) dated as of May 1, 2021 (57) |
|
(52) |
Investment
Sub-Subadvisory Agreement between Barings and BIIL relating to the MassMutual Inflation-Protected and Income Fund dated as of May 1, 2021
(57) |
|
(53) |
Investment
Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1, 2014) relating
to the MassMutual Premier Core Bond Fund (now known as the MassMutual Core Bond Fund) dated as of October 29, 2004 (22) |
|
(54) |
Amendment
to Investment Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1,
2014) relating to the MassMutual Premier Core Bond Fund (now known as the MassMutual Core Bond Fund) dated as of June 1, 2008 (33) |
|
(55) |
Amendment
Two to Investment Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April
1, 2014) relating to the MassMutual Premier Core Bond Fund (now known as the MassMutual Core Bond Fund) dated as of May 1, 2021 (57) |
|
(56) |
Investment
Sub-Subadvisory Agreement between Barings and relating to the MassMutual Core Bond Fund dated as of May 1, 2021 (57) |
|
(57) |
Investment
Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1, 2014) relating
to the MassMutual Premier Diversified Bond Fund (now known as the MassMutual Diversified Bond Fund) dated as of October 29, 2004
(22) |
|
(58) |
Amendment
to Investment Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1,
2014) relating to the MassMutual Premier Diversified Bond Fund (now known as the MassMutual Diversified Bond Fund) dated as of June 1,
2008 (33) |
|
(59) |
Amendment
Two to Investment Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April
1, 2014) relating to the MassMutual Premier Diversified Bond Fund (now known as the MassMutual Diversified Bond Fund) dated as of May
1, 2021 (57) |
|
(60) |
Investment
Sub-Subadvisory Agreement between Barings and BIIL relating to the MassMutual Diversified Bond Fund dated as of May 1, 2021 (57) |
|
(61) |
Investment
Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1, 2014) relating
to the MassMutual Premier High Yield Fund (now known as the MassMutual High Yield Fund) dated as of October 29, 2004 (22) |
|
(62) |
Amendment
to Investment Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1,
2014) relating to the MassMutual Premier High Yield Fund (now known as the MassMutual High Yield Fund) dated as of June 1, 2008 (33) |
|
(63) |
Amendment Two to Investment
Subadvisory Agreement between MassMutual and Babson Capital (now known as Barings) (assigned to MML Advisers on April 1, 2014) relating
to the MassMutual Premier High Yield Fund (now known as the MassMutual High Yield Fund) dated as of February 1, 2022 is filed herein as
Exhibit (d)(63). |
|
(64) |
Investment Sub-Subadvisory
Agreement between Barings and BIIL relating to the MassMutual High Yield Fund dated as of February 1, 2022 is filed herein as Exhibit
(d)(64) |
|
(65) |
Investment
Subadvisory Agreement between MML Advisers and Invesco Advisers, Inc. (“Invesco Advisers”) relating to the MassMutual
Premier Balanced Fund dated (now known as the MassMutual Balanced Fund) as of November 18, 2020 (55) |
|
(66) |
Investment
Sub-Subadvisory Agreement between Invesco Advisers and Invesco Capital Management LLC (“ICM”) relating to the MassMutual
Premier Balanced Fund (now known as the MassMutual Balanced Fund) dated as of November 18, 2020 (56) |
|
(67) |
Investment
Subadvisory Agreement between MML Advisers and Wellington Management Company LLP (“Wellington Management”) relating to the
MassMutual Premier Disciplined Value Fund (now known as the MassMutual Disciplined Value Fund) dated as of November 18, 2020 (55) |
|
(68) |
Investment
Subadvisory Agreement between MML Advisers and Invesco Advisers relating to the MassMutual Premier Main Street Fund (now known as the
MassMutual Main Street Fund) dated as of May 24, 2019 (53) |
|
(69) |
Amendment
One to Investment Subadvisory Agreement between MassMutual and Invesco Advisers relating to the MassMutual Premier Main Street Fund (now
known as the MassMutual Main Street Fund) dated as of March 2, 2020 (55) |
|
(70) |
Investment
Subadvisory Agreement between MML Advisers and Wellington Management relating to the MassMutual Premier Disciplined Growth Fund (now known
as the MassMutual Disciplined Growth Fund) dated as of November 18, 2020 (55) |
|
(71) |
Investment
Subadvisory Agreement between MML Advisers and Invesco Advisers relating to the MassMutual Premier Small Cap Opportunities Fund (now known
as the MassMutual Small Cap Opportunities Fund) dated as of May 24, 2019 (53) |
|
(72) |
Investment
Subadvisory Agreement between MML Advisers and Invesco Advisers relating to the MassMutual Premier Global Fund (now known as the MassMutual
Global Fund) dated as of May 24, 2019 (53) |
|
(73) |
Investment
Subadvisory Agreement between MML Advisers and Wellington Management relating to the MassMutual Premier International Equity Fund (now
known as the MassMutual International Equity Fund) dated as of August 4, 2020 (55) |
|
(74) |
Investment
Subadvisory Agreement between MML Advisers and Thompson, Siegel & Walmsley LLC (“TSW”) relating to the MassMutual
International Equity Fund dated as of July 22, 2021 (57) |
|
(75) |
Investment
Subadvisory Agreement between MML Advisers and Invesco Advisers relating to the MassMutual Premier Strategic Emerging Markets Fund (now
known as the MassMutual Strategic Emerging Markets Fund) dated as of May 24, 2019 (53) |
|
(76) |
Instrument
of Assignment between MassMutual and MML Advisers dated as of April 1, 2014 (47) |
|
|
|
(e) |
Underwriting Contracts |
|
|
|
|
(1) |
Principal
Underwriter Agreement between the Trust (with the exception of the MassMutual High Yield Fund and MassMutual Short-Duration Bond Fund)
and MML Distributors, LLC dated as of February 23, 2006 (27) |
|
(2) |
Schedule
A to the Principal Underwriter Agreement between the Trust (with the exception of the MassMutual High Yield Fund and MassMutual Short-Duration
Bond Fund) and MML Distributors, LLC dated as of December 10, 2021 (58) |
|
(3) |
Distribution
Agreement between the Trust and ALPS Distributors, Inc. (“ALPS Distributors”) relating to the MassMutual High Yield Fund
and MassMutual Short-Duration Bond Fund dated as of December 10, 2021 (58) |
|
|
|
(f)(1) |
Amended
and Restated Deferred Compensation Plan for Trustees of Registrant dated as of January 1, 2009 (34) |
|
|
(f)(2) |
Amendment
to the Amended and Restated Deferred Compensation Plan for Trustees of Registrant dated as of December 8, 2011 (42) |
|
|
(g) |
Custodian Agreements |
|
|
|
(1) |
Amended,
Restated and Consolidated Custodian Agreement between the Trust and State Street Bank and Trust Company (“State Street”)
dated as of January 1, 2008 (31) |
|
(2) |
Amendment
to the Amended, Restated and Consolidated Custodian Agreement between the Trust and State Street dated as of May 25, 2010 (37) |
|
(3) |
Second
Amendment to the Amended, Restated and Consolidated Custodian Agreement between the Trust and State Street dated as of January 1,
2011 (40) |
|
(4) |
Third
Amendment to the Amended, Restated and Consolidated Custodian Agreement between the Trust and State Street dated as of September 16,
2013 (45) |
|
(5) |
Fourth
Amendment to the Amended, Restated and Consolidated Custodian Agreement between the Trust and State Street dated as of April 1, 2014
(47) |
|
(6) |
Fifth
Amendment to the Amended, Restated and Consolidated Custodian Agreement between the Trust and State Street dated as of October 30,
2017 (51) |
|
(7) |
Sixth
Amendment to the Amended, Restated and Consolidated Custodian Agreement between the Trust and State Street dated as of December 1, 2021
(58) |
|
(8) |
Amended,
Restated and Consolidated Delegation Agreement between the Trust and State Street dated as of January 1, 2008 (51) |
|
(9) |
First
Amendment to Amended, Restated and Consolidated Delegation Agreement between the Trust and State Street dated as of October 30, 2017
(51) |
|
(10) |
Second
Amendment to Amended, Restated and Consolidated Delegation Agreement between the Trust and State Street dated as of December 1, 2021 (58) |
|
|
|
(h) |
Other Material Contracts |
|
|
|
(1) |
Second
Amended, Restated and Consolidated Transfer Agency and Service Agreement between the Trust (with the exception of the MassMutual High
Yield Fund and MassMutual Short-Duration Bond Fund) and State Street dated as of April 1, 2014 (47) |
|
(2) |
Side
Letter to the Second Amended, Restated and Consolidated Transfer Agency and Service Agreement between the Trust (with the exception of
the MassMutual High Yield Fund and MassMutual Short-Duration Bond Fund) and State Street dated as of June 7, 2017 (51) |
|
(3) |
Supplement
to Second Amended, Restated and Consolidated Transfer Agency and Service Agreement between the Trust (with the exception of the MassMutual
High Yield Fund and MassMutual Short-Duration Bond Fund) and State Street dated as of September 5, 2018 (52) |
|
(4) |
First
Amendment to the Second Amended, Restated and Consolidated Transfer Agency and Service Agreement between the Trust (with the exception
of the MassMutual High Yield Fund and MassMutual Short-Duration Bond Fund) and State Street dated as of October 16, 2021 (58) |
|
(5) |
Services
Agreement between ALPS Fund Services, Inc. and the Trust (relating to the MassMutual High Yield Fund and MassMutual Short-Duration Bond
Fund) dated as of October 16, 2021 (58) |
|
(6) |
Amended
and Restated Administrative and Shareholder Services Agreement between the Trust and MML Advisers dated as of April 1, 2014 (47) |
|
(7) |
Amendment
to the Amended and Restated Administrative and Shareholder Services Agreement between the Trust and MML Advisers dated as of November 29,
2017 (51) |
|
(8) |
Amendment
to the Amended and Restated Administrative and Shareholder Services Agreement between the Trust and MML Advisers dated as of December
1, 2021 (58) |
|
(9) |
Form of
Agreement and Plan of Reorganization (55) |
|
(10) |
Form of
Agreement and Plan of Reorganization (19) |
|
(11) |
Sub-Administration
Agreement between MML Advisers and State Street dated as of April 1, 2014 (47) |
|
(12) |
Letter
Agreement to the Sub-Administration Agreement between MML Advisers and State Street dated as of April 1, 2014 (47) |
|
(13) |
Amendment
1 to the Sub-Administration Agreement between MML Advisers and State Street dated as of July 14, 2015 (48) |
|
(14) |
Amendment
3 to the Sub-Administration Agreement between MML Advisers and State Street dated as of December 13, 2018 (52) |
|
(15) |
Amendment
4 to the Sub-Administration Agreement between MML Advisers and State Street dated as of April 19, 2021 (57) |
|
(16) |
Amendment
5 to the Sub-Administration Agreement between MML Advisers and State Street dated as of December 1, 2021 (58) |
|
(17) |
Sub-Administrative
Services Agreement between MML Advisers and MassMutual dated as of April 1, 2014 (47) |
|
(18) |
Amendment
Four to the Sub-Administrative Services Agreement between MML Advisers and MassMutual dated as of December 1, 2021 is filed herein as
Exhibit (h)(18) |
|
(19) |
Second
Amended and Restated Securities Lending Agency Agreement between the Trust and State Street dated as of July 31, 2012 (51) |
|
(20) |
First
Amendment to the Second Amended and Restated Securities Lending Agency Agreement between the Trust and State Street dated as of August 15,
2012 (51) |
|
(21) |
Eighth
Amendment to the Second Amended and Restated Securities Lending Agency Agreement between the Trust and State Street dated as of August 10,
2016 (51) |
|
(22) |
Eleventh
Amendment to the Second Amended and Restated Securities Lending Agency Agreement between the Trust and State Street dated as of December 8,
2017 (51) |
|
(23) |
Fifteenth
Amendment to the Second Amended and Restated Securities Lending Agency Agreement between the Trust and State Street dated as of April 4,
2019 (53) |
|
(24) |
Seventeenth
Amendment to the Second Amended and Restated Securities Lending Agency Agreement between the Trust and State Street dated as of June 29,
2020 (55) |
|
(25) |
Nineteenth
Amendment to the Second Amended and Restated Securities Lending Agency Agreement between the Trust and State Street Bank and Trust Company
dated as of December 1, 2021 (58) |
|
(26) |
Master
Repurchase Agreement between the Trust and State Street dated as of January 1, 2008 (51) |
|
(27) |
First
Amendment to Master Repurchase Agreement between the Trust and State Street dated as of November 25, 2014 (51) |
|
(28) |
Second
Amendment to Master Repurchase Agreement between the Trust and State Street dated as of September 20, 2016 (51) |
|
(29) |
Third
Amendment to Master Repurchase Agreement between the Trust and State Street dated as of November 1, 2021 (58) |
|
(30) |
Fixed
Income Clearing Corporation Sponsored Membership Agreement between the Trust, the Fixed Income Clearing Corporation, and State Street
dated as of October 10, 2017 (51) |
|
(31) |
Amended
and Restated Reimbursement and Security Agreement between the Trust and State Street dated as of December 1, 2021 (58) |
|
(32) |
FATCA
Support Services Agreement between the Trust and State Street dated as of March 2, 2015 (51) |
|
(33) |
First
Amendment to FATCA Support Services Agreement between the Trust and State Street dated as of October 16, 2021 is filed herein as Exhibit
(h)(33) |
|
(34) |
Money
Market Services Agreement between the Trust and State Street dated as of June 30, 2010 (58) |
|
(35) |
First
Amendment to the Money Market Services Agreement between the Trust and State Street dated as of April 1, 2014 (58) |
|
(36) |
Second
Amendment to the Money Market Services Agreement between the Trust and State Street dated as of February 13, 2015 (58) |
|
(37) |
Third
Amendment to the Money Market Services Agreement between the Trust and State Street dated as of April 7, 2016 (58) |
|
(38) |
Expense
Limitation Agreement between the Trust and MML Advisers with respect to the MassMutual International Equity Fund (57) |
|
(39) |
Expense
Limitation Agreement between the Trust and MML Advisers with respect to the MassMutual Short-Duration Bond Fund (58) |
|
(40) |
Expense
Limitation Agreement between the Trust and MML Advisers with respect to the MassMutual Short-Duration Bond Fund and MassMutual
Strategic Emerging Markets Fund is filed herein as Exhibit (h)(40) |
|
|
|
(i) |
Legal Opinions |
|
|
|
(1) |
Opinion
and Consent of Ropes & Gray LLP (12) |
|
(2) |
Opinion
and Consent of Ropes & Gray LLP (21) |
|
(3) |
Opinion
and Consent of Ropes & Gray LLP (21) |
|
(4) |
Opinion
and Consent of Ropes & Gray LLP (23) |
|
(5) |
Opinion
and Consent of Ropes & Gray LLP (24) |
|
(6) |
Opinion
and Consent of Ropes & Gray LLP (27) |
|
(7) |
Opinion
and Consent of Ropes & Gray LLP (30) |
|
(8) |
Opinion
and Consent of Ropes & Gray LLP (33) |
|
(9) |
Opinion
and Consent of Ropes & Gray LLP (37) |
|
(10) |
Opinion
and Consent of Ropes & Gray LLP (39) |
|
(11) |
Opinion
and Consent of Ropes & Gray LLP (41) |
|
(12) |
Opinion
and Consent of Ropes & Gray LLP (47) |
|
(13) |
Opinion
and Consent of Ropes & Gray LLP (58) |
|
|
|
(j) |
(1) |
Consent of Deloitte & Touche LLP is filed herein as
Exhibit (j)(1) |
|
(2) |
Powers
of Attorney for Nabil N. El-Hage, Maria D. Furman, and C. Ann Merrifield (26) |
|
(3) |
Powers
of Attorney for Allan W. Blair, R. Alan Hunter, Jr., and Susan B. Sweeney (43) |
|
(4) |
Power
of Attorney for Michael R. Fanning (56) |
|
(5) |
Power
of Attorney for Clifford M. Noreen (56) |
|
|
|
(k) |
Omitted Financial Statements
- Not Applicable |
|
|
(l) |
Letter
of Understanding relating to Initial Capital (55) |
|
|
(m) |
Rule 12b-1 Plan |
|
|
|
(1) |
Amended
and Restated Rule 12b-1 Plan dated as of February 13, 2014 (47) |
|
(2) |
Amended
Exhibit A to the Amended and Restated Rule 12b-1 Plan dated as of May 19, 2021 (57) |
|
|
|
(n) |
Rule 18f-3
Plan |
|
|
|
(1) |
Amended
and Restated Rule 18f-3 Plan dated as of June 17, 2020, as amended May 19, 2021 (58) |
|
|
|
(o) |
Reserved |
|
|
(p) |
Codes of Ethics |
|
|
|
(1) |
Code
of Ethics for the Trust, MML Advisers, and MML Distributors, LLC (58) |
|
(2) |
Code
of Ethics for ALPS Distributors (58) |
|
(3) |
Code
of Ethics for Barings (56) |
|
(4) |
Code
of Ethics for Invesco Advisers and ICM (58) |
|
(5) |
Code
of Ethics for TSW is filed herein as
Exhibit (p)(5) |
|
(6) |
Code
of Ethics for Wellington Management (56) |
_______________
(1) |
Intentionally left blank. |
(2) |
Intentionally left blank. |
(3) |
Intentionally left blank. |
(4) |
Intentionally left blank. |
(5) |
Intentionally left blank. |
(6) |
Intentionally left blank. |
(7) |
Intentionally left blank. |
(8) |
Intentionally left blank. |
(9) |
Intentionally left blank. |
(10) |
Intentionally left blank. |
(11) |
Intentionally left blank. |
(12) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 21 filed on October 24, 2000. |
(13) |
Intentionally left blank. |
(14) |
Intentionally left blank. |
(15) |
Intentionally left blank. |
(16) |
Intentionally left blank. |
(17) |
Intentionally left blank. |
(18) |
Intentionally left blank. |
(19) |
Incorporated by reference to Registrant’s Registration
Statement on Form N-14, File No. 333-118009, filed on August 6, 2004. |
(20) |
Intentionally left blank. |
(21) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 31 filed on November 1, 2004. |
(22) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 32 filed on December 29, 2004. |
(23) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 33 filed on February 25, 2005. |
(24) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 35 filed on November 30, 2005. |
(25) |
Intentionally left blank. |
(26) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 38 filed on July 14, 2006. |
(27) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 39 filed on September 26, 2006. |
(28) |
Intentionally left blank. |
(29) |
Intentionally left blank. |
(30) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 43 filed on December 20, 2007. |
(31) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 44 filed on February 29, 2008. |
(32) |
Intentionally left blank. |
(33) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 46 filed on October 31, 2008. |
(34) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 47 filed on February 27, 2009. |
(35) |
Intentionally left blank. |
(36) |
Intentionally left blank. |
(37) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 50 filed on October 4, 2010. |
(38) |
Intentionally left blank. |
(39) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 52 filed on March 1, 2011. |
(40) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 54 filed on August 30, 2011. |
(41) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 55 filed on November 14, 2011. |
(42) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 57 filed on December 30, 2011. |
(43) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 58 filed on March 1, 2012. |
(44) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 60 filed on February 1, 2013. |
(45) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 62 filed on December 5, 2013. |
(46) |
Intentionally left blank. |
(47) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 65 filed on February 2, 2015. |
(48) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 67 filed on February 1, 2016. |
(49) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 69 filed on December 2, 2016. |
(50) |
Intentionally left blank. |
(51) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 72 filed on January 31, 2018. |
(52) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 74 filed on January 31, 2019. |
(53) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 76 filed on December 3, 2019. |
(54) |
Intentionally left blank. |
(55) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 79 filed on December 3, 2020. |
(56) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 80 filed on January 29, 2021. |
(57) |
Incorporated by reference to Registrant’s Post-Effective
Amendment No. 81 filed on September 21, 2021. |
(58) |
Incorporated by reference to Registrant’s Post-Effective Amendment No. 82 filed on December
10, 2021. |
ITEM 29: |
PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND |
At the date of this Post-Effective Amendment to
the Registration Statement, Registrant did not, directly or indirectly, control any person. Currently, the Registrant provides a vehicle
for the investment of assets of various separate investment accounts established by MassMutual. The assets in such separate accounts are,
under state law, assets of the life insurance companies which have established such accounts. Thus, at any time MassMutual and its life
insurance company subsidiaries will own such outstanding shares of Registrant’s series as are purchased with separate account assets.
As a result, MassMutual will own a substantial number of the shares of Registrant, probably for a number of years. MassMutual owned more
than 25% of the outstanding shares of each series of the Trust, and therefore is deemed to “control” each such series of
the Trust within the meaning of the Investment Company Act of 1940 (the “1940 Act”).
The following entities are, or may be deemed to
be, controlled by MassMutual through the direct or indirect ownership of such entities’ stock or other ownership interests. In
addition, MassMutual may be deemed to control one or more investment pools not listed below and managed or sponsored by MassMutual or
its affiliates, through direct or indirect ownership of shares or other interests in such investment pools.
|
A. |
C.M. Life Insurance Company (May 11, 1981), a Connecticut corporation
which operates as a life and health insurance company. |
|
1. |
MML Bay State Life Insurance Company (April 1, 1935), a Connecticut
corporation which operates as a life and health insurance company. |
|
2. |
CML Mezzanine Investor III, LLC (May 17, 2010), a Delaware limited
liability company that acts as a blocker entity for C.M. Life Insurance Company. |
|
3. |
CML Special Situations Investor LLC (November 17, 2014), a Delaware
limited liability company that holds a portion of the limited partner interest in a European investment fund. |
|
B. |
MML Distributors, LLC (November 10, 1994), a Connecticut limited
liability company which operates as a securities broker-dealer. (MassMutual – 99% and MassMutual Holding LLC – 1%.) |
|
C. |
MassMutual Holding LLC (November 30, 1984), a Delaware limited
liability company which operates as a holding company for certain MassMutual entities. |
MassMutual Holding LLC is the sole owner of each subsidiary
or affiliate unless otherwise indicated.
|
1. |
MML Investors Services, LLC (December 31, 1981), a Massachusetts
limited liability company which operates as a securities broker-dealer and federally covered investment advisor. |
|
a. |
MML Insurance Agency, LLC (November 16, 1990), a Massachusetts
limited liability company which operates as an insurance broker. |
|
b. |
MMLISI Financial Alliances, LLC, (June
27, 2001) a Delaware limited liability company. |
|
2. |
MassMutual Assignment Company (October 4, 2000), a North Carolina
corporation which operated a structured settlement business. |
|
3. |
MassMutual Capital Partners LLC (September 20, 2006), a Delaware
single-member limited liability company. MassMutual Holding LLC is the sole member. |
|
4. |
LifeScore Labs, LLC (previously, Society of Grownups, LLC) (April
15, 2014), a Massachusetts limited liability company. |
|
5. |
MassMutual Ventures Holding LLC (March 26, 2018), a Delaware
limited liability company formed to hold mandate investment vehicles. |
|
a. |
MassMutual Ventures US I LLC (formerly,
MassMutual Ventures LLC) (June 10, 2014), a Delaware limited liability company that will hold investments. |
|
b. |
MassMutual Ventures US II LLC (April 17,
2018), a Delaware limited liability company that will hold investments. |
|
c. |
MassMutual Ventures US III LLC (May 21,
2020), a Delaware limited liability company that will hold investments. |
|
d. |
MassMutual Ventures US IV LLC (December
8, 2021), a Delaware limited liability company that will hold investments. |
|
|
|
|
e. |
MassMutual Ventures UK LLC (July 12, 2018),
a Delaware limited liability company formed to hold investment mandates in the United Kingdom. |
|
f. |
MassMutual Ventures Southeast Asia I LLC
(September 25, 2018), a Delaware company that holds investments. |
|
g. |
MassMutual Ventures Southeast Asia II LLC
(December 12, 2019), a Delaware limited liability company that holds investments. |
|
h. |
Athens Fund Management LLC (August 20,
2020), a Delaware limited liability company that will develop and manage certain closed-end funds. |
|
i. |
Open Alternatives LLC (August 20, 2020),
a Delaware limited liability company that will provide valuation and data services. |
|
j. |
MassMutual Ventures Management LLC (April
4, 2018), a Delaware limited liability company that will serve as the investment manager for US-based mandate investment vehicles. |
|
1.) |
MassMutual Ventures SEA Management Private Limited (June 20,
2018), a Singapore company formed to provide investment advisory services to its affiliated company in the U.S. |
|
6. |
Haven Life Insurance Agency, LLC (March 17, 2014), a Delaware
limited liability company that engages in insurance agency activities. |
|
7. |
MM Rothesay Holdco US LLC (September 24, 2013), a Delaware limited
liability company that holds shares in Rothesay Limited. |
|
8. |
Fern Street LLC (April 11, 2013), a Delaware limited liability
company. |
|
9. |
Sleeper Street LLC (October 4, 2019), a Delaware limited liability
company that will hold certain investments and invest in a portfolio of private equity assets. |
|
10. |
MM Catalyst Fund LLC (November 25 2020), a Delaware limited
liability company that holds investments. |
|
11. |
MM Asset Management Holding LLC, a Delaware limited liability
company that acts as a holding company for certain asset managers. |
|
a. |
Barings LLC (July 5, 1940), a Delaware limited liability company
which operates as an investment adviser. |
|
1.) |
Barings Securities LLC (July 1, 1994), a Delaware limited liability
company which operates as a securities broker-dealer. |
|
2.) |
Barings Guernsey Limited (February 20, 2001), an investment
management company organized under the laws of Guernsey. |
|
a.) |
Barings (U.K.) Limited (January 4, 1995), an institutional debt-fund
manager organized under the laws of England and Wales. |
|
b.) |
Barings Europe Limited (June 5, 2017), a company organized under
the laws of England and Wales. |
|
i. |
Baring Asset Management Limited (April 6, 1994), a company incorporated
under the laws of England and Wales that acts an investment manager/adviser. |
|
aa. |
Baring Fund Managers Limited (October 29, 1968), a company incorporated
under the laws of England and Wales that acts as a manager of BAM UK Collective Investment Schemes. |
|
bb. |
Baring International Investment Limited (June 7, 1979), a company
incorporated under the laws of England and Wales that acts as an investment manager/adviser. |
|
cc. |
Baring Investment Services Limited (May 18, 1988), a company
incorporated under the laws of England and Wales that acts as a service company which supports all the BAM Group operating companies within
the UK. |
|
dd. |
Barings Global Advisers Limited (May 5, 2011), a company organized
under the laws of England and Wales that operates as an institutional debt fund manager. |
|
ee. |
Barings European Core Property Fund GP Sàrl (October 29,
2015), a special-purpose company organized in Luxembourg that serves as a general partner of a European real estate equity fund. |
|
ff. |
Barings BME GP Sàrl (July 31, 2020), a company organized
under the laws of England and Wales that serves as a general partner. |
|
gg. |
Barings GPLF4(S) GP Sàrl (March 18, 2021), a company incorporated
under the laws of Luxembourg that serves as a General Partner. |
|
hh. |
Baring International Investment Management Holdings (November
12, 1985), a company incorporated under the laws of England and Wales that acts as an intermediate holding company. |
|
a. |
Baring Asset Management UK Holdings Limited (October 25, 1983),
a company incorporated under the laws of England and Wales that acts as an intermediate holding company. |
|
aaa.) |
Baring Asset Management Switzerland Sàrl (December 18,
2013), an operating company established under the laws of Switzerland. |
|
bbb.) |
Baring France SAS Baring France SAS (July 24, 1997), a company
incorporated under the laws of France that handles distribution and client services for qualified investors. |
|
ccc.) |
Baring International Fund Managers (Ireland) Limited (July 16,
1990), a company incorporated under the laws of Ireland that acts as a manager of BAM Irish Collective Investment Schemes and Funds. |
|
ii. |
Barings Real Estate UK Holdings Limited (November 13, 2009),
a holding company incorporated under the laws of England and Wales. |
|
aa. |
Barings Real Estate Advisers (Continental Europe) Limited (April
23, 2004), a special purpose holding company. |
|
bb. |
Barings Real Estate GmbH (January 8, 2014), a German limited
liability company that provides transaction and asset management services for all types of real estate and retail property, in addition
to development and refurbishment services for office, retail, industrial and residential assets. |
|
iii. |
Barings Italy S.r.l. (July 23, 2019), an operating company incorporated
under the laws of Italy. |
|
iv. |
Barings Sweden AB (July 16, 2019), an operating company incorporated
under the laws of Sweden. |
|
v. |
Barings Asset Management Spain SL (October
13, 2019), an operating company incorporated under the laws of Spain. |
|
vi. |
Barings Netherlands B.V. (December 5, 2019),
an operating company incorporated under the laws of the Netherlands. |
|
3.) |
Barings Real Estate Advisers, Inc. (May 11, 2004), a Delaware
corporation that holds a “corporation” real estate license. |
|
4.) |
BMC Holdings DE LLC (March 29, 2013), a Delaware limited liability
company. |
|
5.) |
Barings Finance LLC (December 12, 2012), a Delaware limited
liability company formed to invest in securities of U.S. middle market companies. |
|
a.) |
BCF Europe Funding Limited (August 27, 2013), a company formed
in the Republic of Ireland to invest in securities. |
|
b.) |
BCF Senior Funding I LLC (August 28, 2013), a limited liability
company formed under the laws of the State of Delaware to invest in securities. |
|
c.) |
BCF Senior Funding I Designated Activity Company (January 20,
2016), a company formed in the Republic of Ireland to invest in securities. |
|
6.) |
Baring Asset Management (Asia) Holdings Limited (June 7, 1985),
an intermediate holding company organized in Hong Kong. |
|
a.) |
Barings Japan Limited (January 13, 1986), a company organized
in Japan that is registered as a Financial Business Operator (Registration No. 396-KLFB) for Type II Financial Instruments Business, Investment
Advisory and Agency Business, and Investment Management Business with the Financial Services Agency in Japan under the Financial Instruments
and Exchange Act (Act No. 25 of 1948). |
|
b.) |
Baring International Fund Managers (Bermuda) Limited (September
13, 1988), a company incorporated under the laws of Bermuda under that acts as a trustee of Baring Korea Trust Fund Ltd.’s undistributed
funds. |
|
c.) |
Baring SICE (Taiwan) Limited (March 15, 1990), a regulated company
organized in Taiwan. |
|
d.) |
Baring Asset Management (Asia) Limited (March 15, 1985), a company
organized in Hong Kong that acts as an investment adviser. |
|
i. |
Baring Asset Management Korea Limited, a regulated Korean company
that engages in the business of asset management, business administration and investment advisory services. |
|
ii. |
Barings Investment Management (Shanghai) Limited (August 3,
2018) is an operating company established under Chinese law. |
|
aa. |
Barings Overseas Investment Fund Management (Shanghai) Limited
(August 22, 2018) serves as the distributor in China. |
|
e.) |
Barings Australia Holding Company Pty Ltd (October 12, 2009),
an operating company that employs five or more mezzanine debt portfolio managers. |
|
i. |
Barings Australia Pty Ltd (October 16, 2009), an asset manager
for Australian institutional investors. |
|
f.) |
Barings Singapore Pte. Ltd. (November 16, 2020), an operating
company established under the laws of Singapore. |
|
D. |
The MassMutual Trust Company (January 12, 2000), a federally
chartered stock savings bank which performs trust services. |
|
E. |
MML Private Placement Investment Company I, LLC (May 15, 2007),
a Delaware limited liability. |
|
F. |
MML Private Equity Fund Investor LLC (December 6, 2006), a Delaware
limited liability company that acts as a blocker entity for MassMutual and holds private equity fund investments. |
|
G. |
MM Private Equity Intercontinental LLC (September 24, 2013),
a Delaware limited liability company that invests in certain private equity funds. |
|
H. |
MML Mezzanine Investor II, LLC (March 13, 2008), a Delaware
limited liability company that acts as a blocker entity for MassMutual. |
|
I. |
MSP-SC, LLC (August 4, 2009), a Delaware limited liability company
formed to take title to a property that was acquired by foreclosure. |
|
J. |
MML Mezzanine Investor III, LLC (May 17, 2010), a Delaware limited
liability company that acts as a blocker entity for MassMutual. |
|
K. |
MassMutual External Benefits Group LLC (September 23, 2010),
a Delaware limited liability company created to satisfy a professional employer organization’s tax reporting needs. |
|
L. |
JFIN Parent LLC (July 15, 2021), a Delaware limited liability
company created as the parent organization of Jefferies Finance LLC. (MassMutual holds 50% voting ownership interest and Jefferies Group,
LLC holds 50% voting ownership interest.) |
|
1. |
Apex Credit Holdings LLC (formerly known as Apex Credit Partners
LLC,October 20, 2014), a Delaware limited liability company which holds legacy CLO investments. |
|
2. |
Jefferies Finance LLC (July 26, 2004), a Delaware limited liability
and commercial finance company registered with the SEC as an investment adviser that structures, underwrites and arranges senior secured
loans to corporate borrowers and financial sponsors. |
|
a. |
JFIN Co-Issuer Corporation (March 13, 2013), a Delaware corporation
formed for the purpose of acting as a co-issuer of senior unsecured notes and secured term loans of Jefferies Finance LLC. |
|
b. |
JFIN Fund III LLC (October 14, 2011), a Delaware limited liability
company formed for the purpose of investing in senior secured loans and entering into a warehouse financing through a credit facility
with Wells Fargo Bank, N.A. |
|
c. |
JFIN High Yield Investments LLC (December 16, 2015), a Delaware
limited liability company formed for the purpose of investing in high yield securities. |
|
d. |
JFIN LC Fund LLC (February 1, 2016), a Delaware limited liability
company formed for the purposes of holding cash collateral and entering into a standby letter of credit fronting facility with Wells Fargo
Bank, N.A. |
|
e. |
JFIN Revolver Holdings LLC (January 23, 2018), a Delaware limited
liability company formed to hold revolving loan commitments. |
|
f. |
JFIN Revolver Holdings II LLC (May 11, 2018), a Delaware limited
liability company formed to hold revolving loan commitments. |
|
g. |
JFIN GP Adviser LLC (May 11, 2018), a Delaware limited liability
company formed to be an investment adviser and general partner. |
|
h. |
JFIN Europe GP, S.à.r.l. (December 18, 2015), a Luxembourg
private limited liability company formed as the general partner of Jefferies Finance Europe, SCSp. |
|
1.). |
Jefferies Finance Europe, S.L.P. (July 20, 2020), an alternative
investment fund formed as a professional specialized fund incorporated as a limited partnership governed by articles L.214-162-1 et seq.
of the French Monetary and Financial Code, which was established to arrange and invest in European senior secured loans. |
|
2.). |
Jefferies Finance Europe, SCSp (March 10, 2016), an alternative
investment fund formed as a Luxembourg special limited partnership which was established to arrange and invest in European senior secured
loans. |
|
i. |
Jefferies Finance Business Credit LLC (August 7, 2013), a Delaware
limited liability company that acts as a holding company for JFIN Business Credit Fund I LLC. |
|
1.). |
JFIN Business Credit Fund I LLC (August 7, 2013), a Delaware
limited liability company formed for the purpose of investing in asset based revolving loans and entering into a warehouse financing through
a credit facility with Wells Fargo Capital Finance. |
|
j. |
JFIN Funding 2021 LLC (November 5, 2021),
a Delaware limited liability company which serves as the warehouse borrower for a financing provided by MassMutual. |
|
|
|
|
k. |
Jefferies Credit Partners LLC (formerly
known as JFIN Asset Management LLC)(June 8, 2020), a Delaware limited which is a private credit lending platform and investment adviser
registered with the SEC as a relying adviser. |
|
1.) |
Apex Credit Partners LLC (formerly known as Apex Newco LLC)
(July 15, 2021), a Delaware limited liability company which is an investment adviser to CLOs and is registered with the SEC as a relying
adviser. |
|
2.) |
JFAM GP LLC (April 13, 2017), a Delaware limited liability company
formed as the holding company for Jefferies Direct Lending Fund, LP. Jefferies Credit Partners LLC is the managing member. |
|
a.) |
JFAM GP LP (April 13, 2017), a Delaware partnership formed as
the general partner of Jefferies Direct Lending Fund, LP. JFAM GP LLC is the general partner, and Jefferies Credit Partners LLC is the
limited partner. |
|
i. |
Jefferies Direct Lending Fund C LP (November 25, 2019), a Delaware
partnership formed for the purpose of investing alongside Jefferies Direct Lending Fund LP in senior secured middle market loans, and
to be managed by Jefferies Credit Partners LLC. JFAM GP LP is the general partner, and Jefferies Finance LLC is the limited partner. |
|
aa. |
Jefferies DLF C Holdings LLC (February 11, 2020), a Delaware
limited liability company created in connection with a fund leverage facility. |
|
a. |
Jefferies Direct Lending Fund C SPE LLC (February 11, 2020),
a Delaware limited liability company created in connection with a fund leverage facility. |
|
l. |
Jefferies Senior Lending LLC (April 26,
2021), a Delaware limited liability company formed as a warehouse special purpose vehicle to invest in Large Cap loan assets. |
|
M. |
Berkshire Way LLC (June 14 2012), a Delaware limited liability
company that was formed to invest in emerging market securities on behalf of MassMutual. |
|
N. |
MML Strategic Distributors, LLC (June 7, 2013), a Delaware limited
liability company that is licensed to act as a broker-dealer. |
|
O. |
MML Investment Advisers, LLC (September 24, 2013), a Delaware
limited liability company which operates as a federally covered investment adviser. |
|
P. |
Pioneers Gate LLC (October 27, 2014), a Delaware limited liability
company that was formed to invest in asset-backed securities on behalf of MassMutual. |
|
Q. |
MML Special Situations Investor LLC (November 17, 2014), a Delaware
limited liability company that holds a portion of the limited partner interest in a European investment fund. |
|
R. |
Timberland Forest Holding LLC (October 12, 2015), a Delaware
limited liability company that acts as a holding company. MassMutual’s ownership is 37% and 63% is held by MassMutual Trad Private
Equity LLC. |
|
1. |
Lyme Adirondack Forest Company, LLC (April 4, 2006), a Delaware
limited liability company that acts as a holding company. |
|
a. |
Lyme Adirondack Timber Sales, LLC (December 16, 2016), a Delaware
company. (Note: Lyme Adirondack Timber Sales, Inc. merged with and into this company effective
December 31, 2016.) |
|
b. |
Lyme Adirondack Timberlands I, LLC (August 16, 2006), a Delaware
limited liability company that is a property owner. |
|
c. |
Lyme Adirondack Timberlands II, LLC (August 16, 2006), a Delaware
limited liability company that is a property owner. |
|
S. |
MassMutual International LLC (February 19, 1996), a Delaware
limited liability company which operates as a holding company for certain international investments. |
|
1. |
MassMutual Solutions LLC (June 20, 2019), a Delaware limited
liability company that acts as a holding company for Haven Technologies Asia Limited. |
|
a. |
Haven Technologies Asia Limited (July 9, 2019), a Hong Kong
technology company (formerly, HarborTech (Asia) Limited). |
|
T. |
Insurance Road LLC (May 3, 2017), a Delaware limited liability
company that acts as a holding company for companies that hold intellectual property assets and invest in a portfolio of private equity
assets. |
|
1. |
MassMutual Intellectual Property LLC (May 3, 2017), a Delaware
limited liability company that will hold certain intellectual property. |
|
2. |
MassMutual Trad Private Equity LLC (May 3, 2017), a Delaware
limited liability company that will hold and invest in a portfolio of private equity assets. |
|
3. |
Trad Investments I LLC (September 11, 2018), a Delaware limited
liability company that will hold and invest in a portfolio of private equity assets. |
|
U. |
MassMutual Mortgage Lending LLC (October 30, 2017), a Delaware
limited liability company that will invest in commercial mortgage loans. |
|
V. |
MM Copper Hill Road LLC (October 5, 2017), a Delaware limited
liability company that has been established to hold certain receivables and to engage in related financing activities. |
|
W. |
EM Opportunities LLC (January 16, 2018), a Delaware limited
liability company formed to hold a portfolio of high yield, emerging market debt investments. |
|
X. |
MassMutual MCAM Insurance Company, Inc. (March 18, 2018), a
Vermont captive insurance company that will sell insurance to MassMutual and its subsidiary companies. |
|
Y. |
CML Global Capabilities (December
2, 2019), a Delaware limited liability company. |
|
|
|
|
Z. |
MassMutual Private Equity Funds LLC (August 20, 2020), a
Delaware limited liability company that will hold assets to seed certain closed-end funds.
|
|
|
|
|
|
1. |
MassMutual Private Equity Funds Subsidiary LLC (May 18, 2021), a Delaware limited liability company
that will hold private equity investments, including private equity funds and co-investments assets, to seed a certain closed-end fund. |
AA. |
MM Global Capabilities I LLC (December 2, 2019),
a Delaware limited liability company that serves as a limited partner and holds ownership shares in MassMutual Global Business Services
India LLP. |
|
|
|
1. |
MassMutual Global
Business Services India LLP (December 23, 2019), a limited partnership domiciled in the Republic of India that will provide information
technology and information technology enabled services to MassMutual. (Owned 99.8% by MM Global Capabilities I LLC, 0.1% by MM Global
Capabilities II LLC and 0.1% by MM Global Capabilities III LLC.) |
|
BB. |
MM Global Capabilities II LLC (December 2, 2019), a Delaware
limited liability company that serves as a limited partner and holds ownership shares in MassMutual Global Business Services India LLP. |
|
1. |
MM Global Capabilities (Netherlands) B.V. (February 28, 2020),
a company domiciled in the Netherlands that will hold ownership interests of MassMutual in India and Romania (MM Global Capabilities I
LLC and MM Global Capabilities II LLC are the partners of this company). |
|
a. |
MassMutual Global Business Services Romania S.R.L. (March 31,
2020), a company domiciled in Romania that will provide computer programming, consultancy and related activities to MassMutual. |
|
CC. |
MM Global Capabilities III LLC (December 3, 2019), a Delaware
limited liability company that serves as a limited partner and holds ownership shares in MassMutual Global Business Services India LLP. |
|
DD. |
MM Investment Holding (September 21, 2020), a Cayman Islands
company organized to provide holding company services and financial services for its affiliates. |
|
1. |
MML Management Corporation (October 14, 1968), a Massachusetts
corporation which formerly operated as a manager of properties owned by MassMutual. |
|
a. |
MassMutual International Holding MSC, Inc. (January 31, 2001),
a Massachusetts corporation. |
|
b. |
MassMutual Holding MSC, Inc. (December 26, 1996), a Massachusetts
corporation which operates as a holding company for MassMutual positions in investment entities organized outside of the United States.
This subsidiary qualifies as a “Massachusetts Security Corporation” under Chapter 63 of the Massachusetts General Laws. |
|
2. |
MassMutual Asset Finance LLC (formerly known as Winmark Equipment
Finance, LLC) is an equipment financing company which provides collateralized lending, financing and leasing services nationwide (owned
99.61% by MM Investment Holding and .39% by C.M. Life Insurance Company. |
|
a. |
MMAF Equipment Finance LLC 2013-A (July 19, 2013), a Delaware
limited liability company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
b. |
MMAF Equipment Finance LLC 2014-A (May 7, 2014), a Delaware
limited liability company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
c. |
MMAF Equipment Finance LLC 2015-A (April 22, 2015), a Delaware
limited liability company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
d. |
MMAF Equipment Finance LLC 2016-A (March 24, 2016), a Delaware
limited liability company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
e. |
MMAF Equipment Finance LLC 2017-A (April 11, 2017), a Delaware
limited liability company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
f. |
MMAF Equipment Finance LLC 2017-B (October 30, 2017), a Delaware
limited liability company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
g. |
MMAF Equipment Finance LLC 2018-A (April 24, 2018), a Delaware
limited liability company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
h. |
MMAF Equipment Finance LLC 2019-A (February 20, 2019), a Delaware
limited liability company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
i. |
MMAF Equipment Finance LLC 2019-B (August 23, 2019), a Delaware
limited liability company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
j. |
Rozier LLC, (December 26, 2018), a Delaware limited liability
company that holds company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
k. |
MMAF Equipment Finance LLC (April 12 2021), a Delaware limited
liability company that holds a portfolio of rights in equipment loans, equipment leases, related equipment and related rights. |
|
EE. |
MML CM LLC (November 10, 2020), a Delaware limited liability
company that holds certain investments for MassMutual. |
|
1. |
Blueprint Income LLC (May 4, 2016), a New York limited liability
company that is an online annuity marketplace. |
|
2. |
Flourish Financial LLC (November 3, 2017), a Delaware limited
liability company that is a fintech platform for registered investment advisers. |
|
3. |
Flourish Technologies LLC (May 11, 2021), a Delaware limited
liability company. |
|
4. |
Flourish Digital Assets LLC (May 11, 2021), a Delaware limited
liability company. |
|
FF. |
Glidepath Holdings Inc. (February 4, 2021), a Delaware corporation
that acts act as a holding company. |
|
1. |
Great American Life Insurance Company (December 29, 1961), an
Ohio corporation that acts as a life and health insurance company. |
|
a. |
Annuity Investors Life Insurance Company (November 13, 1981),
an Ohio corporation that acts as a life and health insurance company. |
|
b. |
AAG Insurance Agency, Inc. (December 6, 1994), a Kentucky corporation
that acts as an insurance agency. |
|
c. |
Great American Advisors, Inc. (December 10, 1993), an Ohio corporation
that acts as a broker-dealer. |
|
d. |
Manhattan National Holding Corporation (August 27, 2008), an
Ohio Corporation that acts as a holding company. |
|
1.) |
Manhattan National Life Insurance Company (May 21, 2014), an
Ohio corporation that acts as a life and health insurance company. |
|
GG. |
ITPS Holding LLC (May 18, 2021, a Delaware limited liability
company that acts act as a holding company. |
|
1. |
HITPS LLC (May 24, 2021), a Delaware limited liability company
that acts as a provider of cloud based insurance technology solutions. |
|
HH. |
MM/Barings Multifamily TEBS 2020 LLC (April 2, 2020) a Delaware
limited liability company that engages in bond and mortgage loan securitization transactions. |
|
II. |
MM Direct Private Investments Holding LLC (September 16, 2021),
a Delaware limited liability company that acts act as a holding company. |
|
1. |
MM Direct Private Investments UK Limited (September 27, 2021),
a UK private limited company that holds investments. |
Article VIII, Sections 1, 2, 3, 4 and 5 of the Trust’s
Amended and Restated Agreement and Declaration of Trust, which is incorporated by reference to Exhibit (a)(1) of the Trust’s
Post-Effective Amendment No. 57 to the Registration Statement filed via EDGAR on December 30, 2011, provide as follows with
respect to indemnification of the Trustees and officers of the Trust against liabilities which may be incurred by them in such capacities:
Amended
and Restated Declaration of Trust
Section 1.
Trustees, Officers, Etc. The Trust shall indemnify every person who is or has been a Trustee
or officer (including persons who serve at the Trust’s request as directors, officers or trustees of another organization in which
the Trust has any interest as a shareholder, creditor or otherwise) (hereinafter referred to as a “Covered Person”) against
all liabilities and expenses, including but not limited to amounts paid in satisfaction of judgments, in compromise or as fines and penalties,
and counsel fees, reasonably incurred or paid by any Covered Person in connection with the defense or disposition of any claim, action,
suit or other proceeding, whether civil, criminal, or other, including appeals, before any court or administrative or legislative body,
in which such Covered Person may be or may have been involved as a party or otherwise or with which such Covered Person may be or may
have been threatened, while in office or thereafter, by reason of being or having been such a Covered Person except with respect to any
matter as to which such Covered Person shall have been finally adjudicated in a decision on the merits in any such action, suit or other
proceeding to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Person’s office. Expenses, including counsel fees so incurred by any such
Covered Person (but excluding amounts paid in satisfaction of judgments, in compromise or as fines or penalties), shall be paid from time
to time by the Trust in advance of the final disposition of any such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such Covered Person to repay amounts so paid to the Trust if it is ultimately determined that indemnification of such expenses
is not authorized under this Article, provided, however, that either (a) such Covered Person shall have provided appropriate security
for such undertaking, (b) the Trust shall be insured against losses arising from any such advance payments or (c) either a majority
of the disinterested Trustees acting on the matter (provided that a majority of the disinterested Trustees then in office act on the matter),
or independent legal counsel, in a written opinion, shall have determined, based upon a review of readily available facts (as opposed
to a full trial type inquiry) that there is reason to believe that such Covered Person will be found entitled to indemnification under
this Article.
Section 2.
Compromise Payment. As to any matter disposed of (whether by a compromise payment, pursuant
to a consent decree or otherwise) without an adjudication on the merits by a court, or by any other body before which the proceeding was
brought, that such Covered Person is liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his or her office, indemnification shall be provided if (a) approved,
after notice that it involves such indemnification, by at least a majority of the disinterested Trustees acting on the matter (provided
that a majority of the disinterested Trustees then in office act on the matter) upon a determination, based upon a review of readily available
facts (as opposed to a full trial type inquiry) that such Covered Person is not liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office (the disinterested
Trustees to take final action on the consideration of such approval within 60 days of a request thereof by a Covered Person), or (b) there
has been obtained an opinion in writing of independent legal counsel, based upon a review of readily available facts (as opposed to a
full trial type inquiry), to the effect that such indemnification would not protect such Covered Person against any liability to the Trust
to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office (which opinion the Trustees shall use reasonable diligence to obtain within 60 days
of a request therefor by a Covered Person). Any approval pursuant to this Section shall not prevent the recovery from any Covered
Person of any amount paid to such Covered Person in accordance with this Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction to have been liable to the Trust or its Shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such Covered Person’s office.
Section 3.
Rebuttable Presumption. For purposes of the determination or opinion referred to in clause
(c) of Section 1 of this Article VIII or clauses (a) or (b) of Section 2 of this Article VIII, the
majority of disinterested Trustees acting on the matter or independent legal counsel, as the case may be, shall be entitled to rely upon
a rebuttable presumption that the Covered Person has not engaged in willful misfeasance, bad faith, gross negligence, or reckless disregard
of the duties involved in the conduct of such Covered Person’s office.
Section 4.
Indemnification Not Exclusive. The right of indemnification hereby provided shall not be
exclusive of or affect any other rights to which such Covered Person may be entitled. As used in this Article VIII, the term “Covered
Person” shall include such person’s heirs, executors and administrators and a “disinterested Trustee” is a
Trustee who is not an “interested person” of the Trust as defined in Section 2(a)(19) of the 1940 Act (or who has been
exempted from being an “interested person” by any rule, regulation or order of the Commission), and against whom none of
such actions, suits or other proceedings or another action, suit or other proceeding on the same or similar grounds is then or has been
pending. Nothing contained in this Article shall affect any rights to indemnification to which personnel of the Trust, other than
Trustees or officers, and other persons may be entitled by contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such person.
Section 5.
No Presumption. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere
or its equivalent shall not of itself create a presumption that a Covered Person did not act in good faith and in a manner which the person
reasonably believed to be in the best interests of the Trust or that the person had reasonable cause to believe that the person’s
conduct was lawful.
Trustees and officers of the Trust are also indemnified by MassMutual
pursuant to its by-laws. No indemnification is provided with respect to any liability to any entity which is registered as an investment
company under the Investment Company Act of 1940, as amended (the “1940 Act”) or to the security holders thereof, where
the basis for such liability is willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct
of office.
MassMutual’s directors’ and officers’ liability
insurance program, which covers the Trust’s Trustees and officers, consist of two distinct coverages. The first coverage reimburses
MassMutual, subject to specified limitations, for amounts which MassMutual is legally obligated to pay out under its indemnification by-law,
discussed above. The second coverage directly protects a Trustee or officer of the Trust against liability from shareholder derivative
and similar lawsuits which are not indemnifiable under the law. There are, however, specific acts giving rise to liability which are excluded
from this coverage. For example, no Trustee or officer is insured against personal liability for libel or slander, acts of deliberate
dishonesty, fines or penalties, illegal personal profit or advantage at the expense of the Trust or its shareholders, violation of employee
benefit plans, regulatory statutes, and similar acts which would traditionally run contrary to public policy and hence reimbursement by
insurance.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the “1933 Act”) may be permitted to trustees, officers and controlling persons of the Trust pursuant
to the foregoing provisions, or otherwise, the Trust has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1933 Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Trust of expenses incurred or paid by a Trustee, officer or controlling
person of the Trust in the successful defense of any action, suit or proceeding) is asserted by such Trustee, officer or controlling person
in connection with the securities being registered, the Trust will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.
ITEM 31. |
BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER. |
a. The Investment Adviser
MML Advisers is the investment adviser for the
Trust. MML Advisers is responsible for providing all necessary investment management and administrative services to the Trust. MML Advisers,
a Delaware limited liability company, was formed in 2013 and is a wholly-owned subsidiary of MassMutual. Founded in 1851, MassMutual is
a mutual life insurance company that provides a broad range of insurance, money management, retirement, and asset accumulation products
and services for individuals and businesses. MassMutual served as the Trust’s investment adviser through March 31, 2014.
The directors and officers of MML Advisers, which
is located at 1295 State Street, Springfield, Massachusetts 01111-0001, their positions with MML Advisers, and their other principal business
affiliations and business experience for the past two years are as follows:
ANDREA ANASTASIO, Vice President (since 2021)
Head
of Investment Management Solutions (since 2021), MassMutual; Head of Investment Strategy and Research, North America (2019-2021), State
Street Global Advisors; Vice President (since 2021), MassMutual Select Funds (open- end investment company); Vice President (since 2021),
MassMutual Premier Funds (open-end investment company); Vice President (since 2021), MassMutual Advantage Funds (open-end investment company);
Vice President (since 2021), MML Series Investment Fund (open-end investment company).
KARL BEINKAMPEN, Vice President (since 2021)
Head of MassMutual Investment Alternatives
Product (since 2020), MassMutual; President (since 2021), MassMutual AccessSM Pine Point Fund (closed-end investment company).
PABLO CABRERA, Assistant Treasurer (since 2021)
Head of Cash Operations (since 2020), MassMutual; Assistant Vice President
(2000–2020), FM Global; Assistant Treasurer (since 2021), MML Distributors, LLC; Assistant Treasurer (since 2021), C.M. Life Insurance
Company; Assistant Treasurer, (since 2021), MML Bay State Life Insurance Company; Assistant Treasurer, (since 2021), Athens Fund Management
LLC; Assistant Treasurer, (since 2021), Berkshire Way LLC; Assistant Treasurer, (since 2021), Blueprint Income LLC; Assistant Treasurer,
(since 2021), EM Opportunities LLC; Assistant Treasurer, (since 2021), Fern Street LLC; Assistant Treasurer, (since 2021), Glidepath Holdings
Inc.; Assistant Treasurer, (since 2021), HITPS LLC; Assistant Treasurer, (since 2021), Insurance Road LLC; Assistant Treasurer, (since
2021), ITPS Holding LLC; Assistant Treasurer, (since 2021), MassMutual Capital Partners LLC; Assistant Treasurer, (since 2021), MassMutual
External Benefits Group LLC; Assistant Treasurer, (since 2021), MassMutual Global Business Services India LLP; Assistant Treasurer, (since
2021), MassMutual Global Business Services Romania S.R. L.; Assistant Treasurer, (since 2021), MassMutual Holding LLC; Assistant Treasurer,
(since 2021), MassMutual Holding MSC, Inc.; Assistant Treasurer, (since 2021), MassMutual Intellectual Property LLC; Assistant Treasurer,
(since 2021), MassMutual International Holding MSC, Inc.; Assistant Treasurer, (since 2021), MassMutual International LLC; Assistant Treasurer,
(since 2021), MassMutual Mortgage Lending LLC; Assistant Treasurer, (since 2021), MassMutual Private Equity Funds LLC; Assistant Treasurer,
(since 2021), MassMutual Private Equity Funds Subsidiary LLC; Assistant Treasurer, (since 2021),MassMutual Ventures Holding LLC; Assistant
Treasurer, (since 2021), MassMutual Ventures Management LLC; Assistant Treasurer, (since 2021), MassMutual Ventures SEA Management Private
Limited; Assistant Treasurer, (since 2021), MassMutual Ventures Southeast Asia I LLC; Assistant Treasurer, (since 2021), MassMutual Ventures
Southeast Asia II LLC; Assistant Treasurer, (since 2021), MassMutual Ventures UK LLC; Assistant Treasurer, (since 2021), MassMutual Ventures
US I LLC; Assistant Treasurer, (since 2021), MassMutual Ventures US II LLC; Assistant Treasurer, (since 2021), MassMutual Ventures US
III LLC; Assistant Treasurer, (since 2021), MM Asset Management Holding LLC; Assistant Treasurer, (since 2021), MM Catalyst Fund LLC;
Assistant Treasurer, (since 2021), MM Cooper Hill Road; Assistant Treasurer, (since 2021), MM Global Capabilities I LLC; Assistant Treasurer,
(since 2021), MM Global Capabilities II LLC; Assistant Treasurer, (since 2021), MM Global Capabilities III LLC; Assistant Treasurer, (since
2021), MM Global Capabilities (Netherlands) BV; Assistant Treasurer, (since 2021), MM Private Equity Intercontinental LLC; Assistant Treasurer,
(since 2021), MM Rothesay Holdco US LLC; Assistant Treasurer, (since 2021), MML CM LLC; Assistant Treasurer, (since 2021), MML Management
Corporation; Assistant Treasurer, (since 2021), Open Alternatives LLC; Assistant Treasurer, (since 2021), Pioneers Gate LLC; Assistant
Treasurer, (since 2021), Sleeper Street LLC; Assistant Treasurer, (since 2021), Trad Investments I LLC.
GEOFFREY CRADDOCK, Director (since 2017)
Chief Risk Officer, Enterprise Risk Management (since 2017), MassMutual;
Director (since 2017), Barings LLC; Director (since 2017), Haven Life Insurance Agency, LLC; Director (since 2017), LifeScore Labs, LLC;
Director (since 2018), MassMutual International LLC; Director (since 2017), MM Asset Management Holding LLC; Director (since 2017), MML
Investors Services, LLC; Director (since 2019), MassMutual MCAM Insurance Company, Inc.; Director (since 2017), MML Strategic Distributors,
LLC.
MICHAEL R. FANNING, Director (since 2016)
Head of MassMutual U.S. (since 2016), Executive Vice President (2016-2018),
Member of MassMutual’s Executive Leadership Team (since 2008), MassMutual; Trustee (since 2021), MassMutual Select Funds (open-end
investment company); Trustee (since 2021), MassMutual Premier Funds (open-end investment company); Trustee (since 2021), MassMutual Advantage
Funds (open-end investment company); Trustee (since 2021), MML Series Investment Fund (open-end investment company); Trustee (since
2021), MML Series Investment Fund II (open-end investment company); GBH Board of Advisors (since 2018); MassChallenge Board
of Directors (since 2020); FinTech Sandbox Board (since 2020); Member (since 2014), MassMutual Ventures LLC; Director (since 2009), Executive
Vice President (2011-2019), C.M. Life Insurance Company; Director (since 2009), Executive Vice President (2011-2019), Member of Audit
Committee (since 2009), MML Bay State Life Insurance Company; Member Representative (since 2009), MML Distributors, LLC; Director (since
2007), Member of Executive Committee (since 2008), Member of Audit Committee (since 2008), MML Investors Services, LLC.
BRIAN FINUCANE, Assistant Treasurer (since 2021)
Head of Debt Financing and Liquidity
(since 2021), MassMutual; Assistant Treasurer (since 2021), C.M. Life Insurance Company; Assistant Treasurer, (since 2021), MML Bay State
Life Insurance Company; Assistant Treasurer, (since 2021), Athens Fund Management LLC; Assistant Treasurer, (since 2021), Berkshire Way
LLC; Assistant Treasurer, (since 2021), Blueprint Income LLC; Assistant Treasurer, (since 2021), EM Opportunities LLC; Assistant Treasurer,
(since 2021), Fern Street LLC; Assistant Treasurer, (since 2021), Glidepath Holdings Inc.; Assistant Treasurer, (since 2021), HITPS LLC;
Assistant Treasurer, (since 2021), Insurance Road LLC; Assistant Treasurer, (since 2021), ITPS Holding LLC; Assistant Treasurer, (since
2021), MassMutual Capital Partners LLC; Assistant Treasurer, (since 2021), MassMutual External Benefits Group LLC; Assistant Treasurer,
(since 2021), MassMutual Global Business Services India LLP; Assistant Treasurer, (since 2021), MassMutual Global Business Services Romania
S.R. L.; Assistant Treasurer, (since 2021), MassMutual Holding LLC; Assistant Treasurer, (since 2021), MassMutual Holding MSC, Inc.; Assistant
Treasurer, (since 2021), MassMutual Intellectual Property LLC; Assistant Treasurer, (since 2021), MassMutual International Holding MSC,
Inc.; Assistant Treasurer, (since 2021), MassMutual International LLC; Assistant Treasurer, (since 2021), MassMutual Mortgage Lending
LLC; Assistant Treasurer, (since 2021), MassMutual Private Equity Funds LLC; Assistant Treasurer, (since 2021), MassMutual Private Equity
Funds Subsidiary LLC; Assistant Treasurer, (since 2021),MassMutual Ventures Holding LLC; Assistant Treasurer, (since 2021), MassMutual
Ventures Management LLC; Assistant Treasurer, (since 2021), MassMutual Ventures SEA Management Private Limited; Assistant Treasurer, (since
2021), MassMutual Ventures Southeast Asia I LLC; Assistant Treasurer, (since 2021), MassMutual Ventures Southeast Asia II LLC; Assistant
Treasurer, (since 2021), MassMutual Ventures UK LLC; Assistant Treasurer, (since 2021), MassMutual Ventures US I LLC; Assistant Treasurer,
(since 2021), MassMutual Ventures US II LLC; Assistant Treasurer, (since 2021), MassMutual Ventures US III LLC; Assistant Treasurer, (since
2021), MM Asset Management Holding LLC; Assistant Treasurer, (since 2021), MM Catalyst Fund LLC; Assistant Treasurer, (since 2021), MM
Cooper Hill Road; Assistant Treasurer, (since 2021), MM Global Capabilities I LLC; Assistant Treasurer, (since 2021), MM Global Capabilities
II LLC; Assistant Treasurer, (since 2021), MM Global Capabilities III LLC; Assistant Treasurer, (since 2021), MM Global Capabilities (Netherlands)
BV; Assistant Treasurer, (since 2021), MM Private Equity Intercontinental LLC; Assistant Treasurer, (since 2021), MM Rothesay Holdco US
LLC; Assistant Treasurer, (since 2021), MML CM LLC; Assistant Treasurer, (since 2021), MML Management Corporation; Assistant Treasurer,
(since 2021), Open Alternatives LLC; Assistant Treasurer, (since 2021), Pioneers Gate LLC; Assistant Treasurer, (since 2021), Sleeper
Street LLC; Assistant Treasurer, (since 2021), Trad Investments I LLC.
ANDREW M. GOLDBERG, Secretary (since 2015)
Assistant Secretary (2013-2015),
MML Advisers; Lead Counsel, Investment Adviser & Mutual Funds (since 2018), Assistant Vice President and Counsel (2004-2018), MassMutual;
Vice President, Secretary, and Chief Legal Officer (since 2008), MassMutual Select Funds (open-end investment company); Vice President,
Secretary (formerly known as “Clerk”), and Chief Legal Officer (since 2008), MassMutual Premier Funds (open-end investment
company); Vice President, Secretary, and Chief Legal Officer (since 2021), MassMutual Advantage Funds (open-end investment company); Vice
President, Secretary, and Chief Legal Officer (since 2008), MML Series Investment Fund (open-end investment company); Vice President,
Secretary (formerly known as “Clerk”), and Chief Legal Officer (since 2008), MML Series Investment Fund II (open-end investment
company); Vice President, Secretary, and Chief Legal Officer (since 2021), MassMutual AccessSM Pine Point Fund (closed-end
investment company).
NATHAN HALL, Chief Financial Officer and Treasurer (since 2016)
Head of Wealth Management Finance (since 2018), Assistant Vice President,
Financial Planning & Analysis (2012-2018), MassMutual; Chief Financial Officer and Treasurer (since 2012), MML Investors Services,
LLC; Chief Financial Officer and Treasurer (since 2014), MML Strategic Distributors, LLC; Chief Financial Officer and Treasurer (since
2016) and (2012-2014), MML Distributors, LLC; Chief Financial Officer (since 2012), MML Insurance Agency, LLC; Chief Financial Officer
(since 2012), MMLISI Financial Alliances, LLC; Chief Financial Officer (since 2021), Flourish Financial, LLC.
ARUNA HOBBS, Vice President (since 2021)
Head of Institutional Investments (since 2014), MassMutual; Vice President
(since 2017), MML Distributors, LLC; Vice President (since 2021), MassMutual Select Funds (open-end investment company); Vice President
(since 2021), MassMutual Premier Funds (open-end investment company); Vice President (since 2021), MassMutual Advantage Funds (open-end
investment company); Vice President (since 2021), MML Series Investment Fund (open-end investment company); Vice President (since 2021),
MML Series Investment Fund II (open-end investment company).
PAUL LAPIANA, President (since 2021)
Head of MassMutual U.S. Product (since 2019), Head of Field Management
(2016-2019), MassMutual; President (since 2021), MassMutual Select Funds (open-end investment company); President (since 2021), MassMutual
Premier Funds (open-end investment company); President (since 2021), MassMutual Advantage Funds (open-end investment company); President
(since 2021), MML Series Investment Fund (open-end investment company); President (since 2021), MML Series Investment Fund II (open-end
investment company); CEO & President (since 2020) MML Distributors, LLC.
JILL NAREAU ROBERT, Assistant Secretary (since 2015)
Lead Counsel, Investment Adviser
& Mutual Funds (since 2018), Assistant Vice President and Counsel (2009-2018), MassMutual; Vice President and Assistant Secretary
(since 2017), Assistant Secretary (2008-2017), MassMutual Select Funds (open-end investment company); Vice President and Assistant Secretary
(since 2017), Assistant Secretary (formerly known as “Assistant Clerk”) (2008-2017), MassMutual Premier Funds (open-end
investment company); Vice President and Assistant Secretary (since 2021), MassMutual Advantage Funds (open-end investment company); Vice
President and Assistant Secretary (since 2017), Assistant Secretary (2008-2017), MML Series Investment Fund (open-end investment company);
Vice President and Assistant Secretary (since 2017), Assistant Secretary (formerly known as “Assistant Clerk”) (2008-2017),
MML Series Investment Fund II (open-end investment company); Vice President and Assistant Secretary (since 2021), MassMutual AccessSM
Pine Point Fund (closed-end investment company).
SEAN NEWTH, Director (since 2021)
Corporate Controller (since 2017), MassMutual; Director (since 2021),
MML Investor Services, LLC; Director (since 2021), MML Strategic Distributors, LLC; Director (since 2020), MassMutual Asset Finance, LLC;
Senior Vice President (since 2019), MM Asset Management Holding LLC; Senior Vice President and Controller (since 2018), MassMutual Holding
LLC; Senior Vice President and Controller (since 2018), MassMutual Holding MSC, Inc.; Senior Vice President and Controller (since 2018),
MassMutual International Holding MSC, Inc.; Vice President and Controller (since 2018), MassMutual MCAM Insurance Company, Inc.; Director
(since 2018), The MassMutual Trust Company; Senior Vice President and Controller (since 2017), C.M. Life Insurance Company; Senior Vice
President and Controller (since 2017), MML Bay State Life Insurance Company.
JULIETA SINISGALLI, Assistant Treasurer (since 2021)
Treasurer, Corporate-CFO Office, (since 2021), MassMutual; Assistant
Treasurer (since 2021), MML Distributors, LLC; Treasurer, (since 2021), C.M. Life Insurance Company; Treasurer, (since 2021), MML Bay
State Life Insurance Company; Treasurer, (since 2021), Athens Fund Management LLC; Treasurer, (since 2021), Berkshire Way LLC; Treasurer,
(since 2021), Blueprint Income LLC; Treasurer, (since 2021), EM Opportunities LLC; Treasurer, (since 2021), Fern Street LLC; VP and Treasurer,
(since 2021), Glidepath Holdings Inc.; Treasurer, (since 2021), Haven Life Insurance Agency, LLC; Treasurer, (since 2021), HITPS LLC;
Treasurer, (since 2021), Insurance Road LLC; Treasurer, (since 2021), ITPS Holding LLC; Treasurer, (since 2021), LifeScore Labs, LLC;
Treasurer, (since 2021), MassMutual Capital Partners LLC; Treasurer, (since 2021), MassMutual External Benefits Group LLC; Treasurer,
(since 2021), MassMutual Global Business Services India LLP; Treasurer, (since 2021), MassMutual Global Business Services Romania S.R.
L.; VP and Treasurer, (since 2021), MassMutual Holding LLC; VP and Treasurer, (since 2021), MassMutual Holding MSC, Inc.; VP and Treasurer,
(since 2021), MassMutual Intellectual Property LLC; VP and Treasurer, (since 2021), MassMutual International Holding MSC, Inc.; Treasurer,
(since 2021), MassMutual International LLC; Treasurer, (since 2021), MassMutual Mortgage Lending LLC; Treasurer, (since 2021), MassMutual
Private Equity Funds LLC; Treasurer, (since 2021), MassMutual Private Equity Funds Subsidiary LLC; Treasurer, (since 2021), MassMutual
Trad Private Equity LLC; Treasurer, (since 2021), MassMutual Ventures Holding LLC; Treasurer, (since 2021), MassMutual Ventures Management
LLC; Treasurer, (since 2021), MassMutual Ventures SEA Management Private Limited; Treasurer, (since 2021), MassMutual Ventures Southeast
Asia I LLC; Treasurer, (since 2021), MassMutual Ventures Southeast Asia II LLC; Treasurer, (since 2021), MassMutual Ventures UK LLC; Treasurer,
(since 2021), MassMutual Ventures US I LLC; Treasurer, (since 2021), MassMutual Ventures US II LLC; Treasurer, (since 2021), MassMutual
Ventures US III LLC; Treasurer, (since 2021), MM Asset Management Holding LLC; Treasurer, (since 2021), MM Catalyst Fund LLC; Treasurer,
(since 2021), MM Cooper Hill Road; Treasurer, (since 2021), MM Global Capabilities I LLC; Treasurer, (since 2021), MM Global Capabilities
II LLC; Treasurer, (since 2021), MM Global Capabilities III LLC; Treasurer, (since 2021), MM Global Capabilities (Netherlands) BV; VP
and Treasurer, (since 2021), MM Private Equity Intercontinental LLC; VP and Treasurer, (since 2021), MM Rothesay Holdco US LLC; Treasurer,
(since 2021), MML CM LLC; VP and Treasurer, (since 2021), MML Management Corporation; Treasurer, (since 2021), Open Alternatives LLC;
VP and Treasurer, (since 2021), Pioneers Gate LLC; VP and Treasurer, (since 2021), Sleeper Street LLC; Treasurer, (since 2021), Trad Investments
I LLC.
DOUGLAS STEELE, Vice President (since
2017) and Head of Investment Management (since 2021)
Head of Investment Management (2017-2021),
Head of Investment Due Diligence (2016-2017), MML Advisers; Head of Product Management (since 2021), Head of Manager Research (2021),
Head of Investment Management 2017-2021), Assistant Vice President (2013-2017), MassMutual; Vice President (since 2016), MassMutual Select
Funds (open-end investment company); Vice President (since 2016), MassMutual Premier Funds (open-end investment company); Vice President
(since 2021), MassMutual Advantage Funds (open-end investment company); Vice President (since 2016), MML Series Investment Fund (open-end
investment company); Vice President (since 2016), MML Series Investment Fund II (open-end investment company).
PHILIP S. WELLMAN, Vice President and Chief Compliance Officer (since
2013)
Head of Mutual Funds & RIA Compliance
(since 2018), Vice President, Associate General Counsel, and Chief Compliance Officer (Mutual Funds) (2014-2018), MassMutual; Vice President
and Chief Compliance Officer (since 2007), MassMutual Select Funds (open-end investment company); Vice President and Chief Compliance
Officer (since 2007), MassMutual Premier Funds (open-end investment company); Vice President and Chief Compliance Officer (since 2021),
MassMutual Advantage Funds (open-end investment company); Vice President and Chief Compliance Officer (since 2007), MML Series Investment
Fund (open-end investment company); and Vice President and Chief Compliance Officer (since 2007), MML Series Investment Fund II (open-end
investment company); Vice President and Chief Compliance Officer (since 2021), MassMutual AccessSM Pine Point Fund (closed-end
investment company).
b. The Investment Subadvisers:
BARINGS LLC
(“BARINGS”)
Barings is the subadviser to certain series of the Trust. The members
of the Board of Managers and the Senior Management team of Barings, their positions with Barings, and their other principal business affiliations
and business experience for the past two years are listed below. The addresses of the offices of Barings, and unless otherwise stated,
each Manager and member of the Senior Management Team, is 300 South Tryon Street, Charlotte, North Carolina 28202.
Board of Managers
Susan M. Cicco, Member of the Board of Managers
Ms. Cicco is Head of Human Resources (since January 2017) &
Employee Experience of MassMutual. Previously, Ms. Cicco held the position of Chief of Staff to the Chief Executive Officer from
July 2012 to January 2017. Ms. Cicco joined the Company in 1993.
M. Timothy Corbett, Member of the Board of
Managers
Mr. Corbett is the Chief Investment Officer of MassMutual. He
joined the Company in July 2011. Previously, Mr. Corbett was the Chief Investment Officer of the State of Connecticut. In that
role, he was the head of the Pension Fund Management Division of the Office of the State Treasurer, directing policy and strategic planning,
and implementation and supervision of the investment programs of the Connecticut Retirement Plans and Trust Funds.
Geoffrey Craddock, Member of the Board of Managers
Mr. Craddock joined MassMutual in October 2017 as the Chief
Risk Officer. Previously, he was the leader of risk management and asset allocation at MassMutual’s subsidiary, OppenheimerFunds, Inc.
(“OFI”), having joined OFI in 2008. Prior to OFI, he oversaw global market risk management at the Canadian Imperial Bank
of Commerce.
Roger W. Crandall, Member of the Board of Managers
Mr. Crandall is Chairman (since December 2010), President (since December
2008) and Chief Executive Officer (since January 2010) of Massachusetts Mutual Life Insurance Company in Springfield, Massachusetts. He
has been with MassMutual since 1988 and previously held the titles of Chief Operating Officer and Chief Investment Officer. Mr. Crandall
joined the Board in 2008 and presently serves as a member of the Investment and Technology & Governance Committees and is the Chair
of the Executive Committee. He is a member of the Board of Directors of the Business Roundtable, the Federal Reserve Bank of Boston and
the Financial Services Roundtable, and also serves on the Smithsonian National Board, American Council of Life Insurers Executive Committee,
the Massachusetts Competitive Partnership, the Wharton Board of Leadership Advisors, the University of Vermont Foundation Leadership Council
and the Lahey Hospital & Medical Center Board of Trustees.
Michael Freno, Chairman, Member of
the Board of Managers, and Chief Executive Officer
Mr. Freno is Chairman and CEO of
Barings LLC, a $387+ billion global financial services firm with offices across the U.S., Europe, Australia and Asia. He is also Chair
of the Barings Board of Directors and a member of the MassMutual Executive Leadership Team. His experience canvasses two decades on the
buy-side, focusing on both equity and debt investments. Previously, he was President overseeing Barings’ investments, sales, operations
and technology and Chairman of the Board of Barings BDC, Inc., (NYSE: BBDC), an external business development company managed by Barings.
Mr. Freeno also serves as an Executive Sponsor for the Barings Black Alliance employee resource group.
Sears Merritt, Member of the Board of Managers
Mr. Merritt is the Head of Data, Strategy & Architecture
– Enterprise Technology & Experience of MassMutual. He joined the company in 2013 and is responsible for leading the technology
strategy, enterprise architecture, and data science functions throughout the organization. Mr. Merritt also leads LIfeScore Labs,
a wholly owned insurtech subsidiary focused on mortality risk.
Michael O’Connor, Member of the Board
of Managers
Mr. O’Connor is the General Counsel of MassMutual, a role
he assumed in February 2017. He joined the Company in 2005 as a member of the Law department and in 2008, assumed responsibility
for the Corporate Law and Government Relations team. Following that role, he led the Company’s corporate development function,
served as President of MassMutual International, LLC, and was the prior Chief of Staff to the Chief Executive Officer.
Elizabeth A. Ward, Member of the Board of Managers
Ms. Ward has been the Company’s Chief Financial Officer
since June 2016. She also held the roles of Chief Actuary from May 2016 through October 20, 2019, and Chief Enterprise
Risk Officer from 2007, when she joined the Company, through May 2016. Previously, Ms. Ward was a Managing Director in Babson
Capital Management LLC’s Quantitative Management Group.
Senior Management
Michael Freno,
Chairman, Member of the Board of Managers and Chief Executive Officer
See above.
Steve Boehm, Chief Operating Officer
Steve Boehm is Barings’ Chief Operating Officer and is a member
of the Barings Senior Leadership Team. Steve leads Barings’ technology and operations focused on end-to-end customer experience
and growth. Steve has more than two decades of experience in technology-driven businesses, financial services, global operations, digital
payments and merger integration. Prior to joining the firm in 2020, Steve was a Senior Vice President and Chief Operating Officer of AvidXchange,
where he led the company’s transformation through a period of hypergrowth and customer experience redesign. Previously, Steve served
for six years as Senior Vice President, Global Customer Experience of eBay. Earlier in his career, he worked as a Senior Vice President,
Global Product Management and Innovation at First Data Corp. and Executive Vice President, Merger Integration for the Wells Fargo/Wachovia
merger. He held other leadership roles at Wachovia and Visa. Steve holds a B.B.A. from James Madison University and an M.B.A. from George
Mason University.
Chris Cary, Managing Director and Global Treasurer
Chris Cary is a member of Barings’ Finance Team and the firm’s
Global Treasurer responsible for Barings’ financial risk management strategies, including foreign exchange, interest rate, and
credit risk and liability management. Chris has worked in the industry since 2001. Prior to joining the firm in 2018, Chris worked for
Regions Bank | Regions Securities, where he sourced and underwrote nonbank credit facilities. Before that, Chris worked at S&P Global
Ratings, NorOdin Investment Management LP, and at The Coca-Cola Company. He holds an Honorary Bachelor of Commerce degree in Accounting
and Finance from the University of Johannesburg in South Africa and is a Chartered and Certified Public Accountant.
Christopher DeFrancis, Chief Compliance Officer & Global Head
of Compliance
Christopher DeFrancis is Barings’ Global Head of Compliance,
responsible for overseeing the firm’s global compliance program. Christopher has worked in the industry since 2001 and his experience
has encompassed securities and investment advisory matters, hedge fund and CDO formation, derivatives trading and private finance transactions.
Prior to joining the firm in 2001, he worked for Hill & Barlow, where he concentrated his practice on commercial and securities litigation.
Christopher began his legal career as a law clerk to The Honorable Sandra L. Lynch on the U.S. Court of Appeals for the First Circuit.
He holds a B.A. from Dartmouth College and a J.D. from the University of Pennsylvania.
Sheldon M. Francis, Chief Administration Officer, Chief Legal Officer
Sheldon Francis is Barings’
Chief Administrative Officer and Chief Legal Officer and a member of Barings Senior Leadership Team. He is responsible for the general
legal affairs, compliance, enterprise risk, internal audit, procurement and vendor management, and facilities. He is also the Chairman
of Barings Europe. Prior to his current role, he served as a Co-General Counsel and lead in-house attorney for Babson Capital Management’s
U.S. Bank Loan, High Yield and Distressed Investments groups. Sheldon has more than 22 years of legal experience, encompassing all aspects
of the investment management industry, corporate finance and corporate restructurings. Prior to joining the firm in 2006, he was a member
of Helms Mulliss and Wicker (n/k/a McGuire Woods), and began his legal career as an associate at Bass, Berry and Sims PLC. Sheldon is
a member of the Charlotte Sports Foundation, a 501c(3) dedicated to providing leadership for sports-based initiatives that result in a
positive impact on the economy and quality of life in the Charlotte region. He is also an Executive Sponsor of the Barings Black Alliance
employee resource group. Sheldon holds a B.A. from Duke University and a J.D. from the University of North Carolina at Chapel Hill School
of Law.
Patrick Hoefling, Chief Financial Officer
Patrick Hoefling is Barings’
Chief Financial Officer, providing oversight and direction for all of corporate finance functions, including, treasury, financial planning
and analysis, corporate accounting/tax, public fund accounting, and corporate strategy. Patrick is also a member of the Barings Senior
Leadership Team. Prior to becoming CFO, Patrick served as the client portfolio services liaison with MassMutual, covering their entire
portfolio. He also held the title of Corporate Treasurer and Global Head of Financial Planning and Analysis. Those roles coordinated daily
operational, cash and accounting needs for the firm’s investment teams, sales function, and other operational and support areas.
He helped develop Barings Social Impact, which oversees our community involvement and charitable spend. He is a board member and the Treasurer
of Barings’ Social Impact Fund. Prior to joining the firm in 2008, he worked in the Private Client Advisory Tax Group at Deloitte
(then known as Deloitte & Touche) and a Charlotte-based hedge fund. Patrick holds a B.S. in Accountancy from Villanova University
and a Master of Accountancy from North Carolina State University.
Eric
Lloyd, President
Eric Lloyd is President of Barings
where he leads and manages cross-asset class investment teams, corporate strategy, business development, product management, investment
business management, research analytics and quant, permanent capital, special situations, marketing and communications. He also works
closely with all the investment teams. Prior to his current role, Eric served as Head of Private Assets. Eric is a member of Barings’
Senior Leadership Team and serves as Chairman of the Board and Chief Executive Officer of Barings BDC, Inc. (NYSE: BBDC). Eric is an Executive
Sponsor of the Out & Allies employee resource group. Eric has worked in the industry since 1990 and his experience has encompassed
leadership positions in investment management, investment banking, leveraged finance and risk management. Prior to joining Barings in
2013, he served as Head of Market and Institutional Risk for Wells Fargo, was on Wells Fargo’s Management Committee and was a member
of the Board of Directors of Wells Fargo Securities. Before the acquisition of Wachovia, Eric worked in Wachovia’s Global Markets
Investment Banking division and served on the division’s Operating Committee, where he held various leadership positions, including
Head of Wachovia’s Global Leveraged Finance Group. Eric holds a B.S. in Finance from the University of Virginia, McIntire School
of Commerce.
BARING INTERNATIONAL INVESTMENT LIMITED
(“BIIL”)
The following are the names, principal occupations
and addresses of the principal executive officers and each director of BIIL. The business addresses of the principal officers are 300
South Tryon Street, Suite 2500 Charlotte, North Carolina 28202 and 20 Old Bailey London, EC4M 7BF, United Kingdom.
Name |
|
Title |
|
Address |
Jill Dinerman |
|
Director |
|
300 South Tryon Street, Suite 2500 Charlotte, NC 28202 |
|
|
|
|
|
Sheldon M. Francis |
|
Director |
|
300 South Tryon Street, Suite 2500 Charlotte, NC 28202 |
|
|
|
|
|
Patrick Hoefling |
|
Director |
|
300 South Tryon Street, Suite 2500 Charlotte, NC 28202 |
|
|
|
|
|
Julian Timothy Swayne |
|
Director |
|
20 Old Bailey London, EC4M 7BF, United Kingdom |
|
|
|
|
|
Amy Callow |
|
Secretary |
|
300 South Tryon Street, Suite 2500 Charlotte, NC 28202 |
INVESCO ADVISERS, INC.
(“INVESCO
ADVISERS”)
The following
table provides information with respect to the principal executive officers and the directors of Invesco Advisers. The business address
of the principal executive officers and each director is Two Peachtree Pointe, 1555 Peachtree Street, N.E., Suite 1800, Atlanta, Georgia
30309.
Name |
|
Position |
Gregory McGreevey |
|
Director, Chairman, President, and Chief
Executive Officer |
|
|
|
L. Allison Dukes |
|
Director |
|
|
|
Andrew Schlossberg |
|
Director and Senior Vice President |
|
|
|
Kevin M. Carome |
|
Director |
|
|
|
Todd F. Kuehl |
|
Chief Compliance Officer |
|
|
|
Annette Janecka Lege |
|
Treasurer, CFO & CAO |
|
|
|
Mark Gregson |
|
Controller |
|
|
|
Jeffrey H. Kupor |
|
Senior Vice President and Secretary |
|
|
|
Crissie Wisdom |
|
Anti-Money Laundering Compliance Officer |
INVESCO CAPITAL MANAGEMENT LLC
(“ICM”)
The following
table provides information with respect to the principal executive officers and the directors of ICM. The business address of the principal
executive officers and each director is 3500 Lacey Road, Suite 700, Downers Grove, Illinois 60515.
Board
Positions |
|
Name |
Position |
Krugman,
Jordan Paglia, Anna |
Managing
Director Managing Director |
Zerr,
John M. |
Managing
Director |
Officers |
|
Name |
Position |
Gallegos,
Kelli K. |
Principal
Financial and Accounting Officer, Investments Pool |
Henkel,
Adam |
Head
of Legal, US ETFs Secretary |
Lege,
Annette Janecka |
Chief
Financial Officer |
Paglia,
Anna |
Chief
Executive Officer and Principal Executive Officer |
Reitmann,
Rudolf E. |
Global
Head of UIT & ETF Services |
Vataj,
Zoje |
Limited
Signer – Proxy Documents |
Zimdars,
Melanie |
Chief
Compliance Officer |
THOMPSON, SIEGEL & WALMSLEY LLC
(“TSW”)
TSW is located at 6641 West Broad Street, Suite 600, Richmond,
Virginia 23230.
Executive Officers of TSW
John L. Reifsnider
Chief Executive Officer/President
John Reifsnider is TSW’s Chief Executive Officer and President.
He is responsible for providing strategic direction in all aspects of the firm including client service, distribution, marketing operations
and compliance. In addition, he serves as Chairman of the Board of Managers and is a member of the Investment Policy Committee.
Prior to joining TSW, he was the Managing Director at Atlantic Capital
Management, LLC and was responsible for business development and client service. John earned his BBA from the University of Toledo and
is currently registered with FINRA and holds a Series 7.
Pieter E. Van Saun, CFA, CIPM
Director of Operations
Pieter Van
Saun is the Director of Operations and oversees the daily activities of the Operations Department. His roles before becoming Director
of Operations include Order Implementation Manager and Manager of Research Operations. He also assists in the management of high net worth
and regional institutional accounts. In addition, he provides quantitative support to overall firm client service and communication efforts.
Pieter joined
TSW in 2000 after beginning his career in the investment industry in 1999 as a Registered Representative with H&R Block. He is a graduate
of the University of Richmond, earned his MBA from Virginia Commonwealth University, and holds the Chartered Financial Analyst®
and the Certificate in Investment Performance Measurement™ designations.
Nick Good
Chief
Executive Officer and Managing Director of Pendal Group
Nick Good is Group Chief Executive
Officer and Managing Director of Pendal Group. In addition, he serves as a member of the Board of Managers. He joined Pendal Group as
Chief Executive Officer, JOHCM US in December 2019. Nick has over 24 years’ industry experience across the U.S. and Asia. Nick
Good was most recently Executive Vice President, Chief Growth and Strategy Officer at State Street Corporation, based in Boston. In this
role, he was responsible for setting overall business strategy and leading corporate development. Previously, he was co-head of State
Street Global Advisors (SSGA)’s Global ETF business, with primary responsibility for North America and Latin America. Prior to
joining State Street, Nick worked at BlackRock (initially Barclays Global Investors), including five years as head of its iShares ETF
business in Asia-Pacific, which enjoyed rapid growth under his leadership.
Brett P. Hawkins, CFA
Chief Investment Officer
Portfolio Manager- Mid Cap Value, SMID Cap Value
Brett Hawkins is TSW’s Chief Investment
Officer. He is the Portfolio Manager for the TSW Mid Cap Value strategy and Co-Portfolio Manager for the TSW SMID Cap Value strategy.
He is also a member of the Small Cap team.
Prior to joining TSW in 2001, he was an Assistant Vice President of
Equity Research with First Union Securities having previously worked at Arthur Andersen LLP as an Audit and Business Advisory Senior Associate.
Brett is a graduate of the University of Richmond and received his MBA from the University of Virginia, Darden School. In addition, he
holds the Chartered Financial Analyst® designation.
W. Winborne Boyles
Chief Compliance Officer
Winborne Boyles is the Chief Compliance Officer
and is responsible for overseeing the firm’s compliance program.
Winborne began his career in the investment industry in 2010. Prior
to joining TSW in 2018, he was a Senior Compliance Manager at Touchstone Investments. Previously, Winborne served in the Compliance Department
at Fort Washington Investment Advisors, Inc. and as an attorney in private practice.
Winborne earned his undergraduate and law degrees from the University
of North Carolina at Chapel Hill, and his MBA from the McDonough School of Business at Georgetown University. Winborne is currently registered
with FINRA and holds a Series 7 and 24.
Joseph M. VanCaster, CPA
Chief Financial Officer
Mr. VanCaster graduated from James Madison University, BBA, Bs.
Most recently he was employed at Owens & Minor, Inc. as Director of Accounting and Director of Internal Audit. Previously,
he worked at Bowlmor AMF as Assistant Controller and KPMG LLP as an auditor.
WELLINGTON MANAGEMENT COMPANY LLP
(“WELLINGTON
MANAGEMENT”)
The principal business address of Wellington Management
is 280 Congress Street, Boston, Massachusetts 02210. Wellington Management Company LLP is an investment adviser registered under the Investment
Advisers Act of 1940. During the last two fiscal years, no partner of Wellington Management Company LLP, the Fund’s investment
subadviser, has engaged in any other business, profession, vocation or employment of a substantial nature other than that of the business
of investment management.
The following persons are principal executive officers and control
persons of Wellington Management:
PRINCIPAL EXECUTIVE OFFICERS
Name |
|
Title |
|
|
Jean
M. Hynes |
|
Chief
Executive Officer, Wellington Management Company LLP |
|
|
Stephen
Klar |
|
President,
Wellington Management Company LLP |
|
|
|
Gregory
S. Konzal |
|
Managing
Director, Counsel and Head of Legal, Americas, Wellington Management Company LLP |
|
|
James
S. Peterson |
|
Managing
Director and Chief Compliance Officer, Wellington Management Company LLP |
|
|
Edward
J. Steinborn |
|
Senior
Managing Director and Chief Financial Officer, Wellington Management Company LLP |
CONTROL PERSONS
Wellington Investment Advisors Holdings LLP, Managing Partner of Wellington
Management Company LLP
Wellington Group Holdings LLP, Managing Partner of Wellington Investment
Advisors Holdings LLP
Wellington Management Group LLP, Managing Partner of Wellington Group
Holdings LLP
ITEM 32. |
PRINCIPAL UNDERWRITERS |
(a)
|
(1) |
MML Distributors, LLC, whose principal office is 1295 State
Street, Springfield, MA 01111-0001, serves as principal underwriter to MassMutual Premier Funds (with the exception of MassMutual High
Yield Fund and MassMutual Short-Duration Bond Fund), MassMutual Select Funds, MML Series Investment Fund, and MML Series Investment Fund
II. |
|
(2) |
ALPS Distributors, Inc, whose principal office is 1290 Broadway,
Suite 1000, Denver, CO 80203, serves as principal underwriter to MassMutual High Yield Fund and MassMutual Short-Duration Bond Fund. ALPS
Distributors, Inc. acts as the distributor for the Registrant and the following investment companies: 1WS Credit Income Fund, 1290 Funds,
Aberdeen Standard Investments ETFs, ALPS Series Trust, Alternative Credit Income Fund, The Arbitrage Funds, AQR Funds, Axonic Alternative
Income Fund, Axonic Funds, Barings Funds Trust, BBH Trust, Bluerock Total Income+ Real Estate Fund, Brandes Investment Trust, Bridge Builder
Trust, Broadstone Real Estate Access Fund, Brown Advisory Funds, Brown Capital Management Mutual Funds, Cambria ETF Trust, Centre Funds,
CIM Real Assets & Credit Fund, CION Ares Diversified Credit Fund, Columbia ETF Trust, Columbia ETF Trust I, Columbia ETF Trust II,
CRM Mutual Fund Trust, Cullen Funds Trust, DBX ETF Trust, ETF Series Solutions, Flat Rock Opportunity Fund, Financial Investors Trust,
Firsthand Funds, FS Credit Income Fund, FS Energy Total Return Fund, FS Series Trust, FS Multi-Alternative Income Fund, Goehring &
Rozencwajg Investment Funds, Goldman Sachs ETF Trust, Graniteshares ETF Trust, Griffin Institutional Access Credit Fund, Griffin Institutional
Access Real Estate Fund, Hartford Funds Exchange-Traded Trust, Hartford Funds NextShares Trust, Heartland Group, Inc., IndexIQ Active
ETF Trust, Index IQ ETF Trust, James Advantage Funds, Janus Detroit Street Trust, Lattice Strategies Trust, Litman Gregory Funds Trust,
Longleaf Partners Funds Trust, Meridian Fund, Inc., Natixis ETF Trust, Natixis ETF Trust II, Popular High Grade Fixed-Income Fund, Inc.,
Popular Total Return Fund, Inc., Popular Income Plus Fund, Inc., PRIMECAP Odyssey Funds, Principal Exchange-Traded Funds, Reality Shares
ETF Trust, Puerto Rico Residents Tax Free Bond Fund I, Inc., Puerto Rico Residents Tax Free Funds, Inc., Puerto Rico Residents Tax Free
Funds II, Inc., Puerto Rico Residents Tax Free Funds III, Inc., Puerto Rico Residents Tax Free Funds IV, Inc., Puerto Rico Residents Tax
Free Funds V, Inc., Puerto Rico Residents Tax Free Funds VI, Inc. Reaves Utility Income Fund, RiverNorth Funds, RiverNorth Opportunities
Fund, Inc., RiverNorth/DoubleLine Strategic Opportunity Fund, Inc., SPDR Dow Jones Industrial Average ETF Trust, SPDR S&P 500 ETF
Trust, SPDR S&P MidCap 400 ETF Trust, Sprott Funds Trust, Stone Harbor Investment Funds, Stone Ridge Trust, Stone Ridge Trust II,
Stone Ridge Trust III, Stone Ridge Trust IV, Stone Ridge Trust V, Stone Ridge Trust VI, Stone Ridge Residential Real Estate Income Fund
I, Inc., USCF ETF Trust, Wasatch Funds, WesMark Funds, Wilmington Funds, XAI Octagon Credit Trust, X-Square Balanced Fund and YieldStreet
Prism Fund. |
(b)
|
(1) |
The following are the names and positions of the officers and
directors of MML Distributors, LLC: |
Robert S. Rosenthal, Vice President (since 10/15/2004), Chief Legal
Officer and Secretary (since 10/26/2006) and Executive Representative (since 7/31/2006), MML Distributors, LLC; Chief Legal Officer (since
9/29/2004), Vice President, Associate General Counsel and Secretary (since 12/4/2006), MML Investors Services, LLC, 1295 State Street,
Springfield, Massachusetts 01111-0001; Chief Legal Officer and Secretary (since 3/7/2005), MMLISI Financial Alliances, LLC, 1295 State
Street, Springfield, Massachusetts 01111-0001; Chief Legal Officer, Secretary, and Vice President (since 6/7/2013), MML Strategic Distributors,
LLC, 1295 State Street, Springfield, Massachusetts 01111-0001; and Head Counsel MassMutual Financial Advisors (since 2018), Vice President
and Associate General Counsel (thru 2018), MassMutual, 1295 State Street, Springfield, Massachusetts 01111-0001.
Aruna Hobbs, Vice President (since 3/24/17), MML Distributors, LLC.
Ms. Hobbs serves as a Vice President of the Registrant.
Paul LaPiana, Chief Executive Officer and President (since 12/31/20),
MML Distributors, LLC. Mr. LaPiana serves as President of the Registrant.
Edward K. Duch, III, Assistant Secretary (since 10/15/2004), MML Distributors,
LLC; Assistant Secretary (since 3/8/2004), MML Investors Services, LLC, 1295 State Street, Springfield, Massachusetts 01111-0001; Assistant
Secretary (since 3/8/2008), MMLISI Financial Alliances, LLC, 1295 State Street, Springfield, Massachusetts 01111-0001; Assistant Secretary
(since 6/7/2013), MML Strategic Distributors, LLC, 1295 State Street, Springfield, Massachusetts 01111-0001; and Lead Counsel, Wealth
Management (since 2018), Vice President and Senior Counsel (thru 2018), MassMutual, 1295 State Street, Springfield, Massachusetts 01111-0001.
Alyssa O’Connor, Assistant Secretary (since 3/24/2017), MML
Distributors, LLC
Kevin LaComb, Assistant Treasurer (since 5/6/2003), MML Distributors,
LLC; Assistant Treasurer (since 11/28/2001), MML Investors Services, LLC, 1295 State Street, Springfield, Massachusetts 01111-0001; and
Tax Planning Lead (since 2018), Vice President, Tax Research and Planning (thru 2018), Corporate Tax Department, MassMutual, 1295 State
Street, Springfield, Massachusetts 01111-0001.
James Puhala, Chief Compliance Officer (since 10/2/2020), MML Distributors,
LLC; and Head of Product Solutions & Regulatory Compliance (since 2020), Head of Field & Regulatory Compliance (2018-2020), MassMutual,
1295 State Street, Springfield, Massachusetts 01111-0001.
Kelly Pirrota, AML Compliance Officer (since 11/14/18).
Stephen Alibozek, Entity Contracting Officer (since 10/21/2008), MML
Distributors, LLC; and Head of Advisor Operations (since 2018), Assistant Vice President (thru 2018), MassMutual U.S., MassMutual, 1295
State Street, Springfield, Massachusetts 01111-0001.
Mario Morton, Continuing Education Officer (since 12/31/20), Registration
Manager (since 7/2/2012), MML Distributors, LLC; Assistant Vice President and Registration Manager (since 7/2/2012), MML Investors Services,
LLC, 1295 State Street, Springfield, Massachusetts 01111-0001; Registration Manager (since 8/9/2012), MMLISI Financial Alliances, LLC,
1295 State Street, Springfield, Massachusetts 01111-0001; Registration Manager (since 6/7/2013), MML Strategic Distributors, LLC, 1295
State Street, Springfield, Massachusetts 01111-0001; and Head of Advisor Operations (since 2018), Assistant Vice President (thru 2018),
MassMutual U.S., MassMutual, 1295 State Street, Springfield, Massachusetts 01111-0001.
Nathan Hall, Chief Financial Officer and Treasurer (since 7/1/2016),
MML Distributors, LLC; Chief Financial Officer, Treasurer and Assistant Vice President (since 7/16/2012), MML Investors Services, LLC,
1295 State Street, Springfield, Massachusetts 01111-0001; Treasurer (since 7/2012), MMLISI Financial Alliances, LLC, 1295 State Street,
Springfield, Massachusetts 01111-0001; Chief Financial Officer and Treasurer (since 6/7/2013), MML Strategic Distributors, LLC, 1295 State
Street, Springfield, Massachusetts 01111-0001; and Head of Wealth Management Finance (since 2018), Controller, Finance (thru 2018), MassMutual,
1295 State Street, Springfield, MA 01111-0001.
Pablo Cabrera, Assistant Treasurer (since 6/30/21), MML Distributors,
LLC.
Jeffrey Sajdak, Assistant Treasurer (since 8/23/21), MML Distributors,
LLC.
Julieta Sinigalli, Assistant Treasurer (since 8/23/21), MML Distributors,
LLC.
Vincent Baggetta, Chief Risk Officer (since 12/31/20), MML Distributors,
LLC.
The business address for the officers and directors of MML Distributors,
LLC is 1295 State Street, Springfield, MA 01111-0001.
|
(2) |
The following are the names and positions of the officers and
directors of ALPS Distributors, Inc.: |
Stephen Kyllo, President, Chief Operating Officer, Director, Chief
Compliance Officer (since 2018), ALPS Distributors, Inc.
Eric T. Parsons, Vice President, Controller and Assistant Treasurer
(since 2012), ALPS Distributors, Inc.
Jason White, Secretary (since 2021), ALPS Distributors, Inc.
Patrick J. Pedonti**, Vice President, Treasurer and Assistant Secretary
(since 2018), ALPS Distributors, Inc.
Richard C. Noyes, Senior Vice President, General Counsel, Assistant
Secretary (since 2018), ALPS Distributors, Inc.
Liza Orr, Vice President, Senior Counsel (since 2015), ALPS Distributors,
Inc.
Jed Stahl, Vice President, Senior Counsel (since 2015), ALPS Distributors,
Inc.
James Stegall, Vice President (since 2009), ALPS Distributors, Inc.
Gary Ross, Senior Vice President (since 2015), ALPS Distributors, Inc.
Kevin Ireland, Senior Vice President (since 2009), ALPS Distributors,
Inc.
Hilary Quinn, Vice President (since 2015), ALPS Distributors, Inc.
Except as otherwise noted, the principal business address for the officers
and directors of ALPS Distributors, Inc. is 1290 Broadway, Suite 1000, Denver, Colorado 80203.
** The principal business address for Mr. Pedonti is 333 W. 11th
Street, 5th Floor, Kansas City, Missouri 64105.
(c) Not Applicable.
ITEM 33. |
LOCATION OF ACCOUNTS AND RECORDS. |
Each account, book, or other document required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 to 31a-3 thereunder are maintained
as follows:
(Declaration of Trust and Bylaws)
MassMutual Premier Funds
1295 State Street
Springfield, Massachusetts 01111-0001
(With respect to its services as Sub-Administrator)
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111-0001
(With respect to its services as investment adviser and Administrator)
MML Investment Advisers, LLC
1295 State Street
Springfield, Massachusetts 01111-0001
(With respect to its services as subadviser)
Barings LLC
300 South Tryon Street
Charlotte, North Carolina 28202
(With respect to its services as
sub-subadviser)
Baring International Investment
Limited
300 South Tryon Street, Suite 2500
Charlotte, North Carolina 28202
20 Old Bailey
London, EC4M 7BF, United Kingdom
(With respect to its services as subadviser)
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, Georgia 30309
(With respect to its services as
sub-subadviser)
Invesco Capital Management LLC
3500 Lacey Road, Suite 700
Downers Grove, Illinois 60515
(With respect to its services as subadviser)
Thompson, Siegel & Walmsley LLC
6641 West Broad Street, Suite 600
Richmond, Virginia 23230
(With respect to its services as subadviser)
Wellington Management Company LLP
280 Congress Street
Boston, Massachusetts 02210
(With respect to its services as Distributor)
MML Distributors, LLC
1295 State Street
Springfield, Massachusetts 01111-0001
(With respect to its services as Distributor)
ALPS Distributors, Inc.
1290 Broadway, Suite 1000
Denver, Colorado 80203
(With respect to its services as Sub-Administrator, Transfer Agent,
and Custodian)
State Street Bank and Trust Company
1 Iron Street
Boston, Massachusetts 02210
(With respect to its services as Transfer Agent)
ALPS Fund Services, Inc.
1290 Broadway, Suite 1000
Denver, Colorado 80203
(With respect to their services as counsel)
Ropes & Gray LLP
The Prudential Tower
800 Boylston Street
Boston, Massachusetts 02199-3600
ITEM 34. |
MANAGEMENT SERVICES. |
There are no management-related service contracts not discussed in
Part A or Part B.
Not applicable.
NOTICE
A copy of the Agreement and Declaration of Trust of the Trust, as amended,
is on file with the Secretary of The Commonwealth of Massachusetts, and notice is hereby given that this instrument is executed on behalf
of the Trust by an officer of the Trust as an officer and not individually and the obligations of or arising out of this instrument are
not binding upon any of the Trustees or shareholders individually but are binding only upon the assets and property of the relevant series
of the Trust.
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933, and the Registrant
has duly caused this Post-Effective Amendment No. 83 to its Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Springfield and the Commonwealth of Massachusetts as of the 31st day of January, 2022.
|
MASSMUTUAL PREMIER FUNDS |
|
|
|
|
|
|
|
By: |
/s/
PAUL LAPIANA |
|
|
Paul LaPiana |
|
|
President |
Pursuant to the requirements of the
Securities Act of 1933, as amended, this Post-Effective Amendment No. 83 to the Registration Statement has been signed by the following
persons in the capacities as indicated as of the 31st day of January, 2022.
Signature |
|
Title |
|
|
|
|
|
/s/
PAUL LAPIANA |
|
President
and Chief Executive Officer |
|
Paul
LaPiana |
|
(Principal
Executive Officer) |
|
|
|
|
|
/s/
RENEE HITCHCOCK |
|
Chief
Financial Officer and Treasurer |
|
Renee
Hitchcock |
|
(Principal
Financial Officer) |
|
|
|
|
|
* |
|
Chairperson
and Trustee |
|
Susan
B. Sweeney |
|
|
|
|
|
|
|
* |
|
Trustee |
|
Allan
W. Blair |
|
|
|
|
|
|
|
* |
|
Trustee |
|
Nabil
N. El-Hage |
|
|
|
|
|
|
|
* |
|
Trustee |
|
Michael
R. Fanning |
|
|
|
|
|
|
|
* |
|
Trustee |
|
Maria
D. Furman |
|
|
|
|
|
|
|
* |
|
Trustee |
|
R.
Alan Hunter, Jr. |
|
|
|
|
|
|
|
* |
|
Trustee |
|
C.
Ann Merrifield |
|
|
|
|
|
|
|
* |
|
Trustee |
|
Clifford
M. Noreen |
|
|
|
*By: |
/s/
ANDREW M. GOLDBERG |
|
|
Andrew M. Goldberg |
|
|
Attorney-in-Fact |
|
INDEX TO EXHIBITS
EX-101.INS XBRL Instance Document – the instance document does
not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
EX-101.SCH XBRL Taxonomy Extension Schema Document
EX-101.CAL XBRL Taxonomy Extension Calculation Linkbase
EX-101.DEF XBRL Taxonomy Extension Definition Linkbase
EX-101.LAB XBRL Taxonomy Extension Labels Linkbase
EX-101.PRE XBRL Taxonomy Extension Presentation Linkbase