DELISTED - The Fund, using a “passive” or indexing investment approach, attempts to approximate the investment performance of the Underlying Index, which is designed to track the performance of the subordinated corporate bond market denominated in U.S. dollars. The Fund uses a representative sampling indexing strategy in seeking to track the Underlying Index, meaning that it will generally invest in a sample of securities in the index whose risk, return and other characteristics resemble the risk, return and other characteristics of the Underlying Index as a whole. The Fund will invest at least 80% of its total assets (but typically far more) in instruments that comprise the Underlying Index.The Underlying Index is comprised of U.S. dollar denominated corporate securities which are classified as subordinated or junior subordinated. Subordinated securities are subordinated or “junior” to more senior securities of the issuer and are entitled to payment after other holders of debt in that issuer. Junior subordinated securities generally rank slightly higher in terms of payment priority than both common and preferred stock of an issuer, but rank below other subordinated securities and debt securities. In order to be included in the Underlying Index, a bond must have an amount outstanding of at least $500 million and have a time to maturity of at least one year when added to the Underlying Index (and have at least one month to maturity as of each subsequent adjustment date). The Underlying Index may include bonds issued by issuers located outside the United States, including emerging markets (though such bonds must be denominated in U.S. dollars). In addition, the Underlying Index may include a substantial number of bonds offered pursuant to Rule 144A under the Securities Act of 1933, as amended (the “1933 Act”).As of May 31, 2014, the Underlying Index consisted of 136 securities with an average amount outstanding of approximately $1,246 million and a minimum amount outstanding of approximately $500 million. The Underlying Index is a total return index, which assumes that any cash distributions are reinvested back into the Underlying Index.The Fund will normally invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in (a) subordinated or junior subordinated debt securities and (b) debt securities that are investment grade (i.e., rated at least BBB- by Standard & Poor’s Ratings Services, Inc. or Baa3 by Moody’s Investors Service, Inc., or if unrated, deemed by the Adviser and/or Sub-Adviser to be of comparable quality. In addition, the Fund will invest at least 80% of its total assets (but typically far more) in instruments that comprise the Underlying Index.The Fund will concentrate its investments (i.e., hold 25% or more of its total assets) in a particular industry or group of industries to the extent that its Underlying Index is concentrated. As of May 31, 2014, the Underlying Index was substantially comprised of issuers in the financial services sector.
