TRANSAMERICA DYNAMIC ALLOCATION I (ITTOX) Exchange: NMFQS

The fund seeks to achieve its objective by investing primarily in a combination of exchange-traded funds (“ETFs”) that are based on an index and managed by unaffiliated investment advisers. QS Investors, LLC (the “sub-adviser”), the fund’s sub-adviser, is responsible for implementation of the fund’s overall asset allocation and the “Dynamic Risk Management” strategy described below. Western Asset Management Company (“Western Asset”), the fund’s sub-sub-adviser, is responsible for the fund’s “Event Risk Management” strategy described below. The fund seeks to achieve its objective by normally investing in a combination of underlying ETFs representing a broad range of asset classes and investment styles and focuses, combined with multiple layers of risk management strategies. The underlying equity ETFs may include large, mid and small cap ETFs, growth and value-oriented ETFs, international ETFs, and ETFs that are based on equity indexes. The underlying long-term fixed income ETFs may include ETFs that invest in U.S. and non-U.S. issuers, corporate, mortgage-backed and government securities, investment grade securities, securities rated below investment grade (commonly known as “junk” bonds) and ETFs that are based on fixed income indexes. The fund generally seeks to maintain a certain target allocation for long-term investments (the “Target Allocation”). The sub-adviser may periodically adjust target asset class allocations in accordance with their investment process and to appropriately position the fund to changing market environments. The fund’s current Target Allocation is 70% in equity and 30% in fixed income securities. However, the sub-adviser may from time to time make tactical increases or decreases to the fund’s investment in a particular asset class beyond the Target Allocation based on a broad range of market and economic trends and quantitative factors. The sub-adviser may also allow the relative weightings of the fund’s investments in asset classes to vary from its Target Allocation in response to the markets. When varying exposures among underlying funds, the sub-adviser will examine relative values and prospects among the underlying ETFs’ asset classes, as well as the capacity of the underlying funds to absorb additional cash flow. The fund’s tactical overweights or underweights may range from 60% of its net assets in equity ETFs and 40% of its net assets in long-term fixed income ETFs to 75% of its net assets in equity ETFs and 25% of its net assets in long-term fixed income ETFs as, in the sub-adviser’s opinion, market conditions warrant. The sub-adviser will employ the Dynamic Risk Management strategy and, in its discretion, may adjust the fund’s asset mix as often as intra-day and may vary the fund’s allocation substantially from the Target Allocation. Western Asset will implement the Event Risk Management strategy in an effort to lessen the impact to the fund of steep market declines. As result, the fund’s asset mix may be significantly different than the Target Allocation. In addition to these long-term investments, the fund may invest in short-term defensive instruments, including money market funds, Treasury bills and cash, and may enter into derivative transactions involving options, futures and swaps as a part of its risk management strategies. Risk Management The sub-adviser and Western Asset will implement a combination of risk management strategies that will attempt to reduce downside volatility within the fund. These strategies include Dynamic Risk Management and Event Risk Management, as described below. Through both strategies, the fund gives up some of the potential for high total return that could be achieved if the fund were to follow its Target Allocation under positive market conditions. In exchange, these strategies are intended to result in less significant declines in the fund’s net asset value (“NAV”) under negative market conditions. The fund’s NAV will fluctuate and is not guaranteed. Dynamic Risk Management. The Dynamic Risk Management strategy seeks to reduce the fund’s market risk exposure and volatility. As frequently as intra-day, the Dynamic Risk Management strategy may increase the fund’s exposure to short-term defensive instruments in response to certain levels of negative fund performance. At other times, Dynamic Risk Management may decrease the fund’s exposure to short-term defensive instruments and increase its exposure to equity ETFs and long-term fixed income ETFs in order to return to the fund’s Target Allocation in response to certain levels of positive fund performance. The maximum daily allocation to short-term defensive instruments will be 95% of the fund’s net assets. In response to certain levels of negative fund performance, the sub-adviser may increase the fund’s exposure to short-term defensive instruments (“derisking”) based on a formula that takes into account the fund’s current NAV, macro-economic conditions, and the fund’s underlying volatility. In order to implement this strategy, the sub-adviser anticipates that it will sell shares of equity and longer-term fixed-income ETFs and other liquid securities or engage in short sale transactions involving index options and index futures contracts. In response to certain levels of positive fund performance, the fund may purchase equity and longer-term fixed-income ETFs or cover short futures positions (when the fund is not managed strictly according to the standard Target Allocation). The sub-adviser, in its discretion, will determine the levels and timing for Dynamic Risk Management. If the sub-adviser determines that de-risking is no longer appropriate, the fund will reverse this process, sell short-term defensive instruments and purchase equity and longer-term fixed income ETFs in accordance with the fund’s Target Allocation. Event Risk Management. The Event Risk Management strategy seeks to reduce the impact to the fund of market declines during a short period of time caused by, for example, sudden and substantial movements in the equity markets, interest rates or credit spreads. The fund may invest up to 7% of its net assets at the time of purchase in this strategy (as measured by the aggregate premiums paid on options and initial margin on futures contracts). If the fund’s holdings in this strategy increase in value to over 7% of its net assets as a result of market movements, the fund will reduce, at least monthly, the amount of its assets invested in this strategy to no more than 7% of its net assets. The value of the fund’s assets invested in this strategy may be substantially higher than the value of the premiums paid or initial margin amounts on the instruments used to implement the strategy. If the value of the instruments in the Event Risk Management strategy declines after the fund has engaged in “de-risking,” the fund’s NAV could decline even if the broader markets rise in value. Conversely, if the value of the instruments in the Event Risk Management strategy increases after the fund has engaged in “de-risking,” the fund’s NAV could increase even if the broader markets fall in value. Western Asset’s views and outlook regarding potential unexpected market movements will determine the investments and strategies it employs in implementing the Event Risk Management strategy. During normal market conditions, the fund will implement the Event Risk Management strategy through investments in options, futures, swaps or other instruments. Since the Event Risk Management strategy seeks to primarily benefit from large and unexpected market movements, there may be times when the investment and transaction costs related to hedging will result in losses to the fund. The Event Risk Management strategy will be actively managed in an effort to reduce these costs when possible.