The fund invests mainly in a diversified portfolio of investment-grade fixed-income securities with a focus on companies or issuers that the Investment Manager, as defined below, believes meet relevant environmental, social or governance (“ESG”) criteria on a sector-specific basis (“ESG criteria”).

The fund invests mainly in bonds of governments and private companies located in the United States that are investment-grade in quality with intermediate- to long-term maturities (three years or longer). Investment-grade securities are rated at least BBB or its equivalent at the time of purchase by a nationally recognized securities rating organization, or are unrated investments that the Investment Manager believes are of comparable quality. The fund may also invest in below-investment-grade investments. However, the fund will not invest in securities that are rated lower than B or its equivalent by each rating agency rating the investment, or are unrated securities that the Investment Manager believes are of comparable quality. The fund will not necessarily sell an investment if its rating is reduced (or increased) after purchase. The fund may also invest in foreign fixed income investments, although foreign investments do not represent a primary focus of the fund.

The Investment Manager may consider, among other factors, a company’s or issuer’s ESG criteria (as described below), credit, interest rate, liquidity and prepayment risks, as well as general market conditions, when deciding whether to buy or sell investments.

Under normal circumstances, the fund invests at least 80% of the value of its net assets in fixed-income securities that meet the Investment Manager’s ESG criteria. This policy is non-fundamental and may be changed only after 60 days’ notice to shareholders. The Investment Manager may not apply ESG criteria to investments that are not subject to the fund’s 80% policy, and such investments may not meet the Investment Manager’s ESG criteria. The fund will not necessarily sell an investment if it no longer meets the Investment Manager’s ESG criteria after purchase, subject to compliance with the 80% policy.

In evaluating investments for the fund, the Investment Manager identifies relevant ESG criteria for specific sectors, subsectors or countries using an internally developed framework, which may take into account independent third-party ESG data. The Investment Manager identifies specific ESG criteria (i.e., quality of board, product safety and quality, workforce relations, lending criteria, emissions and waste management, energy efficiency, or governmental corruption, among others) and assigns a percentage weighting to those criteria based on the Investment Manager’s assessment of which criteria are more or less important. The Investment Manager then categorizes the relevance of

each ESG criterion and assigns each criterion a percentage weighting. As part of this analysis, the Investment Manager may utilize metrics and information such as emissions data, carbon intensity, sources of energy used for operations, renewable energy consumption, water use and re-use, waste diversion from landfill, employee safety and diversity data, FICO credit scores and income statistics for borrowers, supplier audits, product safety, board composition, or the Global Peace Index. After evaluating these criteria and applying the established weightings, the Investment Manager will assign each company, issuer or country, as applicable, a proprietary ESG rating ranging from a 5.0 to a 1.0, with 5.0 indicating the highest (best) ESG rating and 1.0 indicating the lowest (worst) ESG rating. In order to meet the Investment Manager’s ESG criteria for purposes of the above-referenced non-fundamental investment policy, a company or issuer must generally be rated 2.5 or above by the Investment Manager.

For corporate credit investments, which may include investment grade-rated and below investment grade-rated securities, the Investment Manager also applies a momentum factor in determining the ESG rating of a company or issuer based on the Investment Manager’s view of whether the performance of the company or issuer under the relevant ESG criteria is expected to improve or decline. If an issuer is rated 2.0 or above and has a positive momentum factor, a company or issuer will be viewed as meeting the Investment Manager’s criteria for purposes of the above-referenced non-fundamental policy. Conversely, if an issuer has a negative momentum factor, it will be viewed as meeting the Investment Manager’s criteria for purposes of the above-referenced non-fundamental policy only if it is rated a 3.0 or above.

While the Investment Manager may consider independent third-party data as a part of its analytical process, the portfolio management team performs its own independent analysis of issuers and does not rely solely on third-party screens.

The fund’s approach to ESG investing incorporates fundamental research together with consideration of ESG criteria which may include, but are not limited to, those included in the following descriptions. Environmental criteria include, for example, a company’s or issuer’s carbon intensity and use of resources like water or minerals. ESG measures in this area might include plans to reduce waste, increase recycling, raise the proportion of energy supplied from renewable sources, reduce greenhouse gas emissions per capita or improve product design to be less resource intensive. Social criteria include, for example, labor practices, supply chain management, and community relations. ESG measures in this area might include programs to improve employee well-being, commitment to workplace equality and diversity, stewardship of supplier relationships and working conditions, lending to underserved populations, or the degree of universal healthcare coverage. Governance criteria include, for example, board composition, executive compensation, and debt structures that improve transparency and bondholders’ rights. ESG measures in this area might include improvements in board independence or diversity, alignment of governmental or management

incentives with appropriate strategic ESG objectives, and disclosure of operating and ESG metrics to bondholders.

In the corporate credit sector, the Investment Manager combines fundamental analysis with relevant ESG insights with a forward-looking perspective. The Investment Manager believes that this approach contributes to a more nuanced assessment of an issuer’s credit profile.

The Investment Manager believes that securitized debt instruments present unique challenges in applying ESG criteria due to the presence of various asset types, counterparties involved, and the complex structure of the securitized debt market along with a lack of available ESG-related data. In evaluating securitized debt instruments for potential investment, the Investment Manager takes a broad approach, analyzing both the terms of the transaction, including the asset type being securitized, the terms of the transaction, the structure of the securitization, as well as key counterparties. Opportunities are analyzed at the asset level within each securitization and each subsector to identify assets that meet relevant ESG thresholds. Additionally, in evaluating securitized debt instruments, the Investment Manager analyzes relevant ESG criteria regarding the originator, servicers, or other relevant counterparties.

In the sovereign debt sector, the Investment Manager uses quantitative modeling and fundamental research to evaluate countries across a variety of ESG criteria (i.e., natural resource dependence and level of public corruption) and non-ESG criteria (i.e., global economic conditions, market valuations, and technical factors). The Investment Manager believes that sovereign issuers with better ESG scores generally benefit from lower borrowing costs and that ESG criteria may influence the perception of the credit risk of a country’s debt.

The Investment Manager evaluates ESG considerations using independent third-party data (where available) and also uses company or issuer disclosures and public data sources. The Investment Manager believes that ESG considerations are best analyzed in combination with a company’s or issuer’s fundamentals, including a company’s or issuer’s industry, location, strategic position, and key relationships.

In addition to bonds, the fund may also invest in other fixed-income instruments. In addition to the main investment strategies described above, the fund may make other types of investments, such as assignments of and participations in fixed and floating rate bank loans, investments in hybrid and structured bonds and notes, and preferred securities that would be characterized as debt securities under applicable accounting standards and tax laws. The fund may also use derivatives, such as futures, options, certain foreign currency transactions and swap contracts, for both hedging and non-hedging purposes.