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Investment Factsheet
PAGE 40 OF 50
Inv. Data as of 03/31/25.
STATEMENT OF ADDITIONAL DISCLOSURES
Morningstar seeks credit rating information from fund companies on a periodic basis (e.g., quarterly). In compiling credit rating information
Morningstar accepts credit ratings reported by fund companies that have been issued by all Nationally Recognized Statistical Rating Organizations
(NRSROs). For a list of all NRSROs, please visit http://www.sec.gov/divisions/marketreg/ratingagency.htm. Additionally, Morningstar accepts foreign
credit ratings from widely recognized or registered rating agencies. If two rating organizations/agencies have rated a security, fund companies are to
report the lower rating; if three or more organizations/agencies have rated a security, fund companies are to report the median rating, and in cases
where there are more than two organization/agency ratings and a median rating does not exist, fund companies are to use the lower of the two
middle ratings. PLEASE NOTE: Morningstar, Inc. is not itself an NRSRO nor does it issue a credit rating on the fund. An NRSRO or rating agency
ratings can change from time-to-time.
For credit quality, Morningstar combines the credit rating information provided by the fund companies with an average default rate calculation to
come up with a weighted-average credit quality. The weighted-average credit quality is currently a letter that roughly corresponds to the scale used
by a leading NRSRO. Bond funds are assigned a style box placement of "low", "medium", or "high" based on their average credit quality. Funds with a
low credit quality are those whose weighted-average credit quality is determined to be less than "BBB-"; medium are those less than "AA-", but
greater or equal to "BBB-"; and high are those with a weighted-average credit quality of "AA-" or higher. When classifying a bond portfolio,
Morningstar first maps the NRSRO credit ratings of the underlying holdings to their respective default rates (as determined by Morningstar’s
analysis of actual historical default rates). Morningstar then averages these default rates to determine the average default rate for the entire bond
fund. Finally, Morningstar maps this average default rate to its corresponding credit rating along a convex curve.
For interest-rate sensitivity, Morningstar obtains from fund companies the average effective duration. Generally, Morningstar classifies a fixedincome fund’s interest-rate sensitivity based on the effective duration of the Morningstar Core Bond Index (MCBI). The classification of Limited will
be assigned to those funds whose average effective duration is between 25% to 75% of MCBI’s average effective duration; funds whose average
effective duration is between 75% to 125% of the MCBI will be classified as Moderate; and those that are at 125% or greater of the average
effective duration of the MCBI will be classified as Extensive.
For municipal bond funds, Morningstar also obtains from fund companies the average effective duration. In these cases, static breakpoints are
utilized. These breakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: more than 4.5 years but less than 7 years; and (iii) Extensive:
more than 7 years. In addition, for non-US taxable and non-US domiciled fixed income funds static duration breakpoints are used: (i) Limited: less
than or equal to 3.5 years; (ii) Moderate: greater than 3.5 and less than equal to 6 years; (iii) Extensive: greater than 6 years.
The referenced data elements below are a weighted average of the long fixed income holdings in the portfolio.
Average Effective Duration is a weighted average of the duration of the underlying fixed income securities within the portfolio.
Average Effective Maturity is a weighted average of all the maturities of the bonds in a portfolio, computed by weighting each maturity date by the
market value of the security.
Average Weighted Price is generated from the fund’s portfolio by weighting the price of each bond by its relative size in the portfolio. This number
reveals if the fund favors bonds selling at prices above or below face value (premium or discount securities, respectively). A higher number indicates a
bias toward premiums. This statistic is expressed as a percentage of par (face) value.
Credit Quality Breakdowns are shown for corporate-bond holdings and depict the quality of bonds in the underlying portfolio. The report shows the
percentage of fixed-income securities that fall within each credit quality rating as assigned by an NRSRO. Bonds not rated by an NRSRO are
included in the not rated (NR) category.
Turnover Ratio is a decent proxy for how frequently a manager trades his or her portfolio. The inverse of a fund’s turnover ratio is the average holding
period for a security in the fund. As turnover increases, a fund’s brokerage costs typically rise as well.
WEIGHTINGS & HOLDINGS
Sector Weightings. Calculated for all stock and bond funds based on the securities in the fund’s most recent portfolio. For stock funds, this statistic
shows the percentage of the fund’s stock assets invested in each of the 12 major equity sectors. For taxable bond funds, this statistic shows the
percent of the fund’s cash and bond assets invested in each of the 14 fixed-income sectors. For municipal bond funds, this statistic shows the
percentage of the fund’s municipal assets invested in each of the 11 muni sectors.
Please see important disclosures in the Statement of Additional Disclosures. © 2025, Broadridge Financial Solutions, Inc. All rights reserved. The analysis
and opinions generated by Broadridge and its affiliates do not constitute professional investment advice and are provided solely for informational purposes.
