U.S. Investment Grade Corporate

Actively managed, research-driven U.S. corporate credit strategy targeting an excess return over the Barclays Capital U.S. Corporate Index or similar benchmark. Strategy has historically generated the majority of its excess return from individual security selection, with remaining excess return generated through industry allocation. Strategy actively overweights/underweights industries and issuers based on both top-down economic assessment as well as bottom-up fundamentals. Active relative value trading seeks to add further value.

European Investment Grade Corporate

Actively managed, research-driven European corporate credit strategy targeting an excess return over the iBoxx Euro Corporate Bond Index or similar benchmark. Strategy has historically generated the majority of its excess return through individual security selection, with remaining excess return generated through industry allocation. Strategy actively overweights/underweights industries and issuers based on both top-down economic assessment as well as bottom-up fundamentals. Active relative value trading seeks to add further value.

Higher Quality High Yield

Highly diversified, research-driven strategy targeting an excess return over the Barclays Capital U.S. Corporate High Yield Bond Index or similar benchmark. Strategy emphasizes the “higher quality” segment of the high yield market—BB and B-rated corporate bonds—with heavy emphasis on default avoidance. Strategy has historically generated two-thirds of its excess return from individual security selection and one-third from industry allocation.

Emerging Markets Debt

Actively managed, research-driven strategy targeting an excess return over the JPMorgan EMBI Global Diversified Index or similar benchmark. Strategy invests in both sovereign and corporate issuers across both hard and local currencies. Strategy has historically generated 40% of its excess return from country allocation, 40% from security selection, and 20% from opportunistic positioning and other non-benchmark allocations, including local debt, corporate bonds, and currencies. Strategy places great emphasis on assessing the “global appetite for risk” and using that in setting its tracking error targets in a given period.

Bank Loans

Actively managed, research-driven strategy targeting an excess return over the Barclays Capital U.S. High Yield Loan Index or similar benchmark. Strategy has historically generated excess return through both industry and security selection, with heavy emphasis on default avoidance. Opportunities are sourced from both recently issued and secondary markets.

Global Credit

Actively managed, research-driven strategy targeting an excess return over the Barclays Capital Global Aggregate Index or similar benchmark. Strategy actively emphasizes U.S. and European corporate bonds, seeking to generate a majority of excess return from sector allocation as well as individual security selection and industry rotation within the global corporate sector. Allocates to both benchmark and non-benchmark sectors.

Municipals

Actively managed, research-driven security selection from a universe of high grade and high yield municipal issues. Strategy objective is to provide the maximum amount of income eligible for exclusion from federal income taxes and is measured against both peer group performance and relative to its benchmark. Strategy has historically generated value relative to comparable strategies through quality security selection and its ability to be flexible in rotating between high and lower quality issues based on market conditions.

As of December 31, 2012. There can be no assurance that these objectives will be met. Read benchmark descriptions.