The
following
is
a
reconciliation
of
assets
for
which
Level
3
inputs
were
used
in
determining
fair
value:
The
FVC
continues
to
evaluate
any
information
that
could
cause
an
adjustment
to
the
fair
value
for
these
investments,
such
as
market
news,
the
progress
of
judicial
and
regulatory
proceedings,
and
subadviser
recommendations.
The
following
is
a
summary
of
the
Fund’s
derivative
instruments
categorized
by
risk
exposure
as
of
July
31,
2026.
Please
see
below
for
information
on
the
Fund’s
policy
regarding
the
objectives
and
strategies
for
using swap
contracts, forward
foreign
currency
contracts, and financial
futures
contracts.
(a)
Swap
Contracts
Credit
Default
Swap
Contracts
— The
Fund entered
into
credit
default
swap
contracts.
Credit
default
swap
contracts
are
either
privately
negotiated
agreements
between
the
Fund
and
a
counterparty
or
traded
through
a
futures
commission
merchant
and
cleared
through
a
clearinghouse
that
serves
as
a
central
counterparty.
Investments
in
credit
default
swap
contracts
are
utilized
to
expose
the
Fund’s
cash
holdings
to
the
investment
characteristics
and
performance
of
the
high-yield
bond
market
or
selected
credit
markets while
maintaining
liquidity
to
satisfy
shareholder
activity,
to
manage
broad
credit
market
spread
exposure
and/or
to
create
synthetic
long
and
short
exposure
to
select
credit
and sovereign
debt
securities,
as
applicable,
to
meet
the
Fund's
stated
investment
strategies
as
shown
in
the
Fund's
Prospectus.
The
Fund
segregates
liquid
assets
to
cover
its
obligations
under
its
credit
default
swap
contracts.
The
upfront
premiums
are
amortized
and
accreted
daily
and
are
recorded
as
realized
gains
or
losses
upon
maturity
or
termination
of
the
credit
default
swap
contract.
As
the
protection
purchaser
in
a
credit
default
swap
contract,
the
Fund
pays
the
counterparty
a
periodic
stream
of
payments
over
the
term
of
the
contract,
provided
that
no
credit
event
or
default
(or
similar
event)
occurs.
However,
the
Fund
is
required
to
receive
the
par
(or
other
agreed-upon)
value
of
a
referenced
debt
obligation
from
the
counterparty
in
the
event
of
a
default
(or
similar
event)
by
a
third
party,
such
as
a
U.S.
or
foreign
issuer,
on
the
debt
obligation.
If
a
credit
event
or
default
(or
similar
event)
occurs,
the
Fund
either
(i)
receives
from
the
counterparty
an
amount
equal
to
the
notional
amount
of
the
swap
and
the
counterparty
takes
delivery
of
the
referenced
obligation,
other
deliverable
obligations
or
underlying
securities
comprising
the
referenced
index,
or
(ii)
receives
from
the
counterparty
a
net
settlement
amount
in
the
form
of
cash
or
securities
to
the
notional
amount
of
the
swap
and
the
recovery
value
of
the
referenced
obligation
or
underlying
securities
comprising
the
referenced
index.
As
the
purchaser
in
a
credit
default
swap
contract,
the
Fund’s
investment
would
generate
income
only
in
the
event
of
an
actual
default
(or
similar
event)
by
the
issuer
of
the
underlying
obligation.
Credit
default
swap
contracts
are
marked-to-market
daily
based
on
valuations
from
independent
pricing
services.
Credit
default
swap
contracts
are
generally
categorized
as
Level
2
investments
within
the
hierarchy.
Implied
credit
spreads
are
utilized
in
determining
the
market
value
of
credit
default
swap
agreements
on
credit
indices
and
serve
as
an
indicator
of
the
current
status
of
the
payment/performance
risk
and
represent
the
likelihood
or
risk
of
default
for
the
credit
derivative.
Implied
credit
spreads
utilized
in
valuing
the
Fund’s
investments
as
of
July
31,
2026
are
disclosed
in
the
Statement
of
Investments.
The
implied
credit
spread
of
a
particular
referenced
entity
reflects
the
cost
of
selling
protection
on
such
entity’s
debt,
and
may
include
upfront
payments
required
to
be
made
to
enter
into
the
agreement.
For
credit
default
swap
agreements
on
credit
indices,
the
quoted
market
prices
and
resulting
value
serve
as
the
indicator
of
the
current
status
of
the
payment/performance
risk.
Common
Stocks
Total
Balance
as
of
10/31/2025
$
347,213
$
347,213
Accrued
Accretion/(Amortization)
—
—
Realized
Gains
(Losses)
(
14,930
)
(
14,930
)
Distributions
—
—
Purchases
—
—
Sales
(
363,155
)
(
363,155
)
Change
in
Unrealized
Appreciation/Depreciation
30,889
30,889
Transfers
into
Level
3
—
—
Transfers
out
of
Level
3
—
—
Balance
as
of
07/31/2026
$
17
$
17
Change
in
Unrealized
Appreciation/Depreciation
for
Investments
Still
Held
as
of
07/31/2026
$
(
561
)
$
(
561
)