MacKay Municipal ManagersTM
Thriving Late-Cycle—Municipal Bonds
JUNE 2023

As we approach a slower period of economic growth in the U.S. economy, we believe taxablemunicipals will draw investor interest as a safe haven asset class. We believe the high credit
quality, diversification, and resiliency of the cash flows used to repay debt service will
resonate with investors across the globe.
Domestic retail investors have long dominated the US municipal
bond market, but over the last decade, institutional interest in the
sector has soared, particularly outside of the United States. Overthe last 10 years, municipal bonds have performed well (seeFigure 1 below). Consequently, the taxable municipal sector’s
2.9% annualized total return for the period handily outperformed
the 2.3% return on US corporate investment-grade bonds.
But strong returns are just one reason why investors haveventured into the asset class. Taxable municipal bonds are also

Investors have learned that taxable munis offer higher yieldspreads and total return potential due to inefficient pricing in a
fragmented market. Diversification benefits and the possibility oflower capital charges have resulted in foreign demand for taxable
munis more than doubling from $51 billion in 2008 to over $113
billion as of June 30, 2022.1
Today, many institutional investors see taxable municipals as an
attractive diversifier for their fixed income portfolio. Many of theseinvestors welcome the historically higher credit quality and ratingsof municipals versus other fixed income sectors.

FIGURE 1: 10 YEAR ANNUALIZED TOTAL RETURN
US Securitized
US Corp HY
Agg Ex US
Emerging Markets Corporate
Emerging Markets Sovereign
US Treas
Leveraged Loan
US Corp IG
US AggTaxable Munis-2%

garnering interest due to their high quality ratings, inefficientpricing, low correlations, diversification to other asset classes andpotential for liability matching.

Pricing Inefficiency Creates Opportunity
The municipal bond market is highly fragmented with some
56,000 issuers versus the corporate bond market where thecorporate credit index includes less than 8,000. The Treasury
market is huge, with over $15 trillion in value, but the index
includes just 270 issues.2
1%

3%

5%

Data as of March 29, 2013 – March 31, 2023. US Securitized: Bloomberg
US Securitized Index; US Corp HY: Bloomberg US Corporate High Yield Total
Return Index; Agg Ex US: Bloomberg Global Aggregate ex USD Total Return
Index; EM Corp, Emerging Markets Corporate: ICE BofA Emerging Markets
Corporate Index; EM Sovereign, Emerging Markets Sovereign: Bloomberg
Emerging Markets USD Sovereign Bond Index; US Treas: Bloomberg US
Treasury Total Return Unhedged USD Index; Leveraged Loan: Credit Suisse
Leveraged Loan Index; US Corp IG: ICE BofA US Corporate Index; US Agg:
Bloomberg US Aggregate Bond Index; Taxable Munis: Bloomberg Taxable
Municipal Bond Index. It is not possible to invest directly into an index.
Past performance is not indicative of future results. Please see Index
Descriptions at the end of this document.
Source: Bloomberg, ICE Data

1. Source: Federal Reserve Z.1 Statistical Release, Q2 2022 Report
2. Source: Bloomberg

In the municipal bond market, market fragmentation, limited sellside research and the prevalence of buy and hold investors often
leads to inefficient pricing. Pricing inefficiencies create
opportunity for investors with an edge in credit research andtrading to seek greater yield and total return potential than the
sector’s typical buy-and-hold investors reap.

Competitive Yields and Long Duration
Many investors have sought to enhance yields by increasing
corporate or emerging-market credit risk. Additionally, even in
today’s rising rate environment, taxable municipal bonds have still
maintained their yield advantage. In December 2022, yields ondouble-A (AA) rated taxable municipal bond of eight years or longer
were 43 bps higher than yields on comparable AA corporates.
(Source: Bloomberg, ICE Data ) And, if corporate and municipal
spreads are to continue rising as they did in 2022, history
suggests that taxable municipals will have an advantage. Duringmonths where AA corporate spreads widened over the last ten
years according to Bank of America indices, taxable municipal
spreads have outperformed 79% of the time. In our opinion, thisis because taxable municipals are so often bought by investors
employing buy-and-hold strategies, giving their spreads lower
betas than corporate counterparts, and also because investors
are inclined to seek the financial stability of governments whencredit conditions show signs of deteriorating.

generate funding. Generating additional revenues in the corporate
world usually requires incurring additional expenses. Many
municipal issuers, on the other hand, are natural monopolies andcan therefore increase revenues by simply raising service charges
or tax rates, without adding expenses. When revenue growthstarts to weaken, this provides more stability to municipal credit
and, consequently, municipal ratings.
A look at historical default rates also demonstrates the resiliencyof the municipal bond asset class. In fact, the average five-year
municipal default rate since 2012 is 0.1%, up just slightly from thehistorical average of 0.08%, which dates back to 1970;
meanwhile the average five-year global corporate default rate was
7.2% since 2012, up 40 basis points from its historical average of
6.8% since 1970.4

Duration is another key driver of growth. Because capital projects
financed with taxable municipal bonds generally last for decades,
they are typically financed with longer maturing bonds. Over 40%
of outstanding taxable municipals bonds have maturities of 10 to
20 years; another 22% are even longer.3

The difference in credit quality becomes more glaring during
periods of fundamental weakening. S&P downgrades of US
corporates outpaced upgrades in five of the ten years leading up
to 2021. For municipals over that period, it happened just once,in 2020 (see Figure 2 below). This could prove vital in the current
environment—year-over-year revenue growth among S&P 500
companies was 4% in Q1 of 2023, down from 13.5% in Q1 of
2022 and less than the current inflation rate. As a result,downgrades of US corporates have outpaced upgrades so far in
2023, according to Bloomberg.

Low Correlations and Broad Diversification
Municipal bonds also provide significant risk management
benefits. An allocation to municipal bonds may help manage fixedincome portfolio volatility because municipal bond returns
generally have a low correlation to other fixed-income
instruments.

FIGURE 2: S&P UPGRADE/DOWNGRADE RATIOThe taxable municipal market has far fewer issuers than the taxexempt market, but is well-diversified in purpose. They fund tollroads, bridges, light rail lines, airports, university and governmentbuildings, water and sewer systems, fiber-optic telecom lines andelectric supply and distribution systems. The issuers are also
diversified by region, credit rating and security structure (e.g.,callable vs non-callable bonds).

3.0
Municipals

US corporates

2.0

1.0

High Quality Asset Class and Stable Return Potential

0.0

The relative high-quality nature of municipal bonds is also
attractive for risk-conscious investors and insurers seeking tomeet their capital requirements most efficiently. Approximately
60% of US municipal bonds outstanding are A rated or better; only
a tiny portion are below investment-grade. In contrast, only about
7% of the global corporate bond market is double-A rated.

-1.02012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Over the next three years, we believe debt profiles among corporates could
contribute to more fundamental weakness. 24% of IG corporate bonds are
set to mature by the end of 2025, and issuers will have to pay a 2-3%
incremental funding costs to refinance them in this yield environment
according to Morgan Stanley Research. Meanwhile, only 12% of outstanding
taxable municipals will mature during this period.(Source: Bloomberg).
Source: S&P Reports - “Default, Transition, and Recovery: 2021 Annual U.S.
Corporate Default And Rating Transition Study” & “Default, Transition, andRecovery: 2022 Annual U.S. Public Finance Default And Rating Transition
Study”

Historically, municipal bond ratings have been far more stable
than corporate bond ratings, according to Moody’s. Why should
this be? Some corporations are vulnerable to event risks, such as
leveraged buyouts, that rarely affect municipal bonds. Moregenerally, corporations have fewer options to cover their debt intimes of stress. Municipal bond issuers have more latitude to

3. Source: Bloomberg, Bloomberg Municipal Index – Taxable Bonds
4. Source: Moody’s, US municipal bond defaults and recoveries, 1970-2021, data report, 21 April 2022

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Munis—A Natural Fit for Sustainable InvestingOver the next three years, we believe debt profiles amongcorporates could contribute to more fundamental weakness. 24%
of IG corporate bonds are set to mature by the end of 2025, andissuers will have to pay a 2-3% incremental funding costs torefinance them in this yield environment according to Morgan
Stanley Research. Meanwhile, only 12% of outstanding taxablemunicipals will mature during this period.5

While many investors have been focusing on the corporate bondand equity markets for their ESG investment strategies, we believethat the municipal bond market is a natural fit for this. As theprimary funding source for US infrastructure projects, many ofthese projects address environmental and social considerations
and are also aligned with the sustainable development goals,
including conservation projects for water and wastewater
systems, wind farms, public and affordable housing.

Infrastructure Issuance and Opportunities
We expect strong issuance of taxable municipal bonds in the
future. After decades of neglect, US infrastructure earned a C- on
The American Society of Civil Engineers (ASCE)’s 2021
Infrastructure Report Card. Bringing US infrastructure to a state ofgood repair would cost $5.9 trillion, the ASCE estimates. Although
the federal government and some states have stepped up
infrastructure investments in recent years, only 55% of the funds
needed have been committed. Another $2.6 trillion in funding isneeded over the next 10 years.

Making a Strategic Allocation to US Munis
In conclusion, the addition of taxable municipal bonds help
improve the risk/return profile of a diversified fixed income
portfolio. Lower correlations, incremental yield potential and thepotential to generate alpha in a highly fragmented asset class all
contribute positively to a portfolio’s risk/return trade off. Over thelast ten years, an allocation to taxable municipal bonds has
improved the return per unit of risk on a portfolio of diversified US
bonds.6

The 2021 passage of the $1.2 trillion Infrastructure Investment
and Jobs Act (IIJA) provides federal grant funding for much needed
infrastructure programs. These funds are available for various
projects through 2022 to 2026.

We believe taxable-bond yields remain competitive and credit
quality remains high. There are good fundamental reasons that
we believe will allow credit ratings to remain relatively stable, andcorrelations to other fixed income sectors to remain low.

5. Source: Bloomberg
6 Source: eVestment
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Past performance is not indicative of future results.

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DEFINITIONSALPHA— Alpha measures the portfolio’s risk adjusted performance and is expressed as an annualized percentage. Alpha is the return generated in excess of thebenchmark, also commonly referred to as beta, and is generally considered to be a measure of manager skill.
BETA— Beta is a measure of historical volatility relative to an appropriate index based on its investment objective. A beta greater than 1.00 indicates volatility

greater than the benchmark.
CORRELATION— Correlation shows the strength of a relationship between two variables and is expressed numerically by the correlation coefficient. The correlation

coefficient's values range between -1.0 and 1.0. A perfect positive correlation means that the correlation coefficient is exactly 1. This implies that as one security
moves, either up or down, the other security moves in lockstep, in the same direction. A perfect negative correlation means that two assets move in opposite
directions, while a zero correlation implies no linear relationship at all.
DURATION— Modified duration measures the change in the value of a bond in response to a change in 100-basis-point (1%) change in interest rates. The modified

duration to worst calculation is based on either the final maturity date or a call date within the bond’s call schedule and uses the worst duration for each bond.
This calculation does not adjust for changes in projected cashflows as a result of yield changes.
COMPARISONS TO AN IN DEX
Comparisons to a financial index are provided for illustrative purposes only. Comparisons to an index are subject to limitations because portfolio holdings, volatility
and other portfolio characteristics may differ materially from the index. Unlike an index, portfolios are actively managed and may also include derivatives. Thereis no guarantee that any of the securities in an index are contained in any managed portfolio. The performance of an index may assume reinvestment of dividends
and income, or follow other index-specific methodologies and criteria, but does not reflect the impact of fees, applicable taxes or trading costs which, unlike anindex, may reduce the returns of a managed portfolio. Investors cannot invest in an index. Because of these differences, the performance of an index should not
be relied upon as an accurate measure of comparison.
SOURCE INFORMATION
Source: ICE Data Indices, LLC (“ICE Data”), is used with permission. ICE® is a registered trademark of ICE Data or its affiliates, and BofA® is a registered trademarkof Bank of America Corporation licensed by Bank of America Corporation and its affiliates (“BofA”) and may not be used without BofA’s prior written approval. ICE
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of merchantability or fitness for a particular purpose or use, including the indices, index data and any data included in, related to, or derived therefrom. Neither
ICE Data, its affiliates nor their respective third party suppliers shall be subject to any damages or liability with respect to the adequacy, accuracy, timeliness orcompleteness of the indices or the index data or any component thereof, and the indices and index data and all components thereof are provided on an “as is”
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LLC, or any of its products or services.
“Bloomberg®”, “Bloomberg Indices®”, Bloomberg Fixed Income Indices, Bloomberg Equity Indices and all other Bloomberg indices referenced herein are service
marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the indices (collectively, “Bloomberg”)
and have been licensed for use for certain purposes by MacKay Shields LLC (“MacKay Shields”). Bloomberg is not affiliated with MacKay Shields, and Bloomberg
does not approve, endorse, review, or recommend MacKay Shields or any products, funds or services described herein. Bloomberg does not guarantee thetimeliness, accurateness, or completeness of any data or information relating to MacKay Shields or any products, funds or services described herein.
The following indices may be referred to in this document:
ICE BOFA U.S. HIGH YIELD INDEXICE BofA U.S. High Yield Index tracks the performance of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic
market. Qualifying securities must have a below investment grade rating (based on an average of Moody’s, S&P and Fitch), at least 18 months to final maturity at
the time of issuance, at least one year remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstandingof $250 million. In addition, qualifying securities must have risk exposure to countries that are members of the FX-G10, Western Europe or territories of the U.S.
and Western Europe. The FX-G10 includes all Euro members, the U.S., Japan, the U.K., Canada, Australia, New Zealand, Switzerland, Norway and Sweden. Originalissue zero coupon bonds, 144a securities (both with and without registration rights), and pay-in-kind securities (including toggle notes) are included in the index.
Callable perpetual securities are included provided they are at least one year from the first call date. Fixed-to floating rate securities are included provided they
are callable within the fixed rate period and are at least one year from the last call prior to the date the bond transitions from a fixed to a floating rate security.
Contingent capital securities (“cocos”) are excluded, but capital securities where conversion can be mandated by a regulatory authority, but which have no
specified trigger, are included. Other hybrid capital securities, such as those issues that potentially convert into preference shares, those with both cumulativeand non-cumulative coupon deferral provisions, and those with alternative coupon satisfaction mechanisms, are also included in the index. Securities issued or
marketed primarily to retail investors, equity-linked securities, securities in legal default, hybrid securitized corporates, eurodollar bonds (USD securities not issued
in the U.S. domestic market), taxable and tax-exempt U.S. municipal securities and DRD-eligible securities are excluded from the index. Index constituents aremarket capitalization weighted. Accrued interest is calculated assuming next-day settlement. Cash flows from bond payments that are received during the month
are retained in the index until the end of the month and then are removed as part of the rebalancing. Cash does not earn any reinvestment income while it is heldin the index.
ICE BOFA TAXABLE MUNICIPAL INDEXICE BofA U.S. Taxable Municipal Securities Index tracks the performance of U.S. dollar denominated investment grade taxable municipal securities publicly issued
in the U.S. domestic market. Qualifying securities must have an investment grade rating (based on an average of Moody’s, S&P and Fitch). In addition, qualifying
securities must have at least one-year remaining term to final maturity, at least 18 months to maturity at point of issuance, a fixed coupon schedule and aminimum amount outstanding of $250 million. Callable perpetual securities qualify provided they are at least one year from the first call date. Fixed-to-floating
rate securities also qualify provided they are callable within the fixed rate period and are at least one year from the last call prior to the date the bond transitions
from a fixed to a floating rate security. Original issue zero coupon bonds and ""global"" securities (debt issued simultaneously in the eurobond and U.S. domestic
markets) qualify for inclusion in the Index. Tax-exempt U.S. municipal, 144a and securities in legal default are excluded from the Index. Index constituents aremarket capitalization weighted. Accrued interest is calculated assuming next-day settlement. Cash flows from bond payments that are received during the month
are retained in the index until the end of the month and then are removed as part of the rebalancing. Cash does not earn any reinvestment income while it is heldin the index.

4

BLOOMBERG MUNICIPAL HIGH YIELD INDEX
An unmanaged index of municipal bonds with the following characteristics: fixed coupon rate, credit rating of Ba1 or lower or non-rated using the middle rating ofMoody's, S&P, and Fitch, outstanding par value of at least $3 million, and issued as part of a transaction of at least $20 million. In addition, the bonds must havea dated-date after December 31, 1990 and must be at least one year from their maturity date.
ICE BOFA EMERGING MARKETS BBB & LOWER SOVEREIGNICE BofA BBB & Lower Sovereign USD External Debt Index tracks the performance of U.S. dollar denominated emerging market and cross-over sovereign debt
publicly issued in the eurobond or U.S. domestic market. Qualifying countries must have a BBB1 or lower foreign currency long-term sovereign debt rating (basedon an average of Moody’s, S&P and Fitch). Countries that are not rated, or that are rated “D” or “SD” by one or several rating agencies qualify for inclusion in theindex but individual non-performing securities are removed. Qualifying securities must have at least one year remaining term to final maturity, at least 18 months
to maturity at point of issuance, a fixed or floating coupon and a minimum amount outstanding of $250 million. Local currency debt is excluded from the Index.
Index constituents are market capitalization weighted. Accrued interest is calculated assuming next-day settlement. Cash flows from bond payments that arereceived during the month are retained in the index until the end of the month and then are removed as part of the rebalancing. Cash does not earn any
reinvestment income while it is held in the index.
ICE BOFA EMERGING MARKETS CORPORATE PLUS INDEXICE BofA Emerging Markets Corporate Plus Index tracks the performance of U.S. dollar and euro denominated emerging markets non-sovereign debt publicly
issued in the major domestic and eurobond markets. In order to qualify for inclusion in the Index an issuer must have risk exposure to countries other thanmembers of the FX G10, all Western European countries, and territories of the U.S. and Western European countries. The FX-G10 includes all Euro members, theU.S., Japan, the U.K., Canada, Australia, New Zealand, Switzerland, Norway and Sweden. Individual securities of qualifying issuers must be denominated in U.S.
dollars or euro, must have at least one year remaining term to final maturity, at least 18 months to final maturity at point of issuance, and a fixed coupon. In
addition, bonds of qualifying issuers must have at least 250 million (EUR or USD) in outstanding face value. The index includes corporate and quasigovernment
debt of qualifying countries, but excludes sovereign and supranational debt. Original issue zero coupon bonds, ""global"" securities (debt issued simultaneously inthe eurobond and U.S. domestic bond markets), 144a securities and pay-in-kind securities, including toggle notes, qualify for inclusion in the Index. Contingent
capital securities (“cocos”) are excluded, but capital securities where conversion can be mandated by a regulatory authority, but which have no specified trigger,
are included. Other hybrid capital securities, such as those issues that potentially convert into preference shares, those with both cumulative and non-cumulative
coupon deferral provisions, and those with alternative coupon satisfaction mechanisms, are also included in the index. Callable perpetual securities qualify
provided they are at least one year from the first call date. Fixed-to-floating rate securities also qualify provided they are callable within the fixed rate period andare at least one year from the last call prior to the date the bond transitions from a fixed to a floating rate security. Central bank issued, equity-linked and legallydefaulted securities are excluded from the index. Index constituents are market capitalization weighted. Accrued interest is calculated assuming next-day
settlement. Cash flows from bond payments that are received during the month are retained in the index until the end of the month and then are removed as partof the rebalancing. Cash does not earn any reinvestment income while it is held in the index.
BLOOMBERG U.S. CORPO RATE INVESTMENT GRADE INDEXThe Bloomberg U.S. Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market. It includes USD denominated securities
publicly issued by U.S. and non-U.S. industrial, utility and financial issuers.
S&P/LSTA LEVERAGED L OAN INDEXThe S&P/LSTA Leveraged Loan Index (the Index) is a market value-weighted index designed to measure the performance of the U.S. leveraged loan market based
upon market weightings, spreads and interest payments.
BLOOMBERG MUNICIPAL BOND INDEX
A rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be rated investmentgrade (Baa3/BBB- or higher) by at least two of the following agencies: Moody's, S&P, Fitch. If only two of the three agencies rate the security, the lower rating isused to determine index eligibility. If only one of the three agencies rates a security, the rating must be investment-grade. They must have an outstanding parvalue of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have a date-date after December 31,
1990, and must be at least one year from their maturity date. Remarketed issues, taxable municipal bonds, bonds with floating rates, and derivatives, areexcluded from the benchmark. The index has four main sectors: general obligation bonds, revenue bonds, insured bonds (including all insured bonds with a
Aaa/AAA rating), and prerefunded bonds. Most of the index has historical data to January 1980. In addition, sub-indices have been created based on maturity,
state, sector, quality, and revenue source, with inception dates later than January 1980.
BLOOMBERG U.S. AGGRE GATE BOND INDEXThe Bloomberg U.S. Aggregate Index represents securities that are SEC-registered, taxable, and dollar denominated. Must have at least one year to final maturity
regardless of call features. Must have at least $300 million par amount outstanding. Must be rated investment-grade (Baa3/BBB- or higher) by at least two of
the following ratings agencies: Moody's, S&P, Fitch. Must be dollar-denominated and non-convertible.
BLOOMBERG U.S. SECURITIZED MBS/ABS/CMBS INDEXThe Bloomberg Securitized MBS/ABS/CMBs Index tracks agency mortgage backed pass-through securities (both fixed-rate and hybrid ARM) guaranteed by Ginnie
Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC); investment grade debt asset backed securities; and investment grade commercial mortgage backed
securities. The index is constructed by grouping individual pools into aggregates or generics based on program, coupon, and vintage.
BLOOMBERG U.S. TREASURY INDEX
Public obligations of the U.S. Treasury with a remaining maturity of one year or more. Must be a U.S. Treasury security. Must have at least $300 million paramount outstanding. Must be rated investment-grade (Baa3/BBB- or higher) by at least two of the following ratings agencies: Moody's, S&P, Fitch. Must be fixed
rate. Must be dollar-denominated and non-convertible.
BLOOMBERG GLOBAL AGG REGATE EX USD INDEXThe Bloomberg Global Aggregate ex USD Index is a measure of global investment grade debt from 24 local currency markets. This multi- currency benchmark
includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. Bond issued in USD are
excluded.
ICE BOFA U.S. TREASU RY INDEXICE BofA U.S. Treasury Index tracks the performance of U.S. dollar denominated sovereign debt publicly issued by the U.S. government in its domestic market.
Qualifying securities must have at least one year remaining term to final maturity, a fixed coupon schedule and a minimum amount outstanding of $1 billion.
Qualifying securities must have at least 18 months to final maturity at the time of issuance. Callable perpetual securities qualify provided they are at least one
year from the first call date. Fixed-to-floating rate securities also qualify provided they are callable within the fixed rate period and are at least one year from the5

last call prior to the date the bond transitions from a fixed to a floating rate security. Bills, inflation-linked debt and strips are excluded from the Index; however,original issue zero coupon bonds are included in the index and the amounts outstanding of qualifying coupon securities are not reduced by any portions that havebeen stripped. Securities issued or marketed primarily to retail investors do not qualify for inclusion in the index. Index constituents are market capitalization
weighted. Accrued interest is calculated assuming next-day settlement. Cash flows from bond payments that are received during the month are retained in theindex until the end of the month and then are removed as part of the rebalancing. Cash does not earn any reinvestment income while it is held in the index.
ICE BOFA AA U.S. CORPORATE INDEXICE BofA U.S. Corporate Index tracks the performance of U.S. dollar denominated investment grade corporate debt publicly issued in the U.S. domestic market.
Qualifying securities must have an investment grade rating (based on an average of Moody’s, S&P and Fitch), at least 18 months to final maturity at the time ofissuance, at least one year remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of $250
million. Original issue zero coupon bonds, 144a securities (with and without registration rights), and pay-in-kind securities (including toggle notes) are included in
the index. Callable perpetual securities are included provided they are at least one year from the first call date. Fixed-to-floating rate securities are included
provided they are callable within the fixed rate period and are at least one year from the last call prior to the date the bond transitions from a fixed to a floating
rate security. Contingent capital securities (“cocos”) are excluded, but capital securities where conversion can be mandated by a regulatory authority, but whichhave no specified trigger, are included. Other hybrid capital securities, such as those issues that potentially convert into preference shares, those with both
cumulative and non-cumulative coupon deferral provisions, and those with alternative coupon satisfaction mechanisms, are also included in the index. Equitylinked securities, securities in legal default, hybrid securitized corporates, euro dollar bonds (USD securities not issued in the U.S. domestic market), taxable andtax-exempt U.S. municipal securities and DRD-eligible securities are excluded from the index. Index constituents are market capitalization weighted. Accrued
interest is calculated assuming next-day settlement. Cash flows from bond payments that are received during the month are retained in the index until the end of
the month and then are removed as part of the rebalancing. Cash does not earn any reinvestment income while it is held in the index.
ICE BOFA BROAD U.S. TAXABLE MUNICIPAL SE CURITIES INDEXICE BofA Broad U.S. Taxable Municipal Securities Index tracks the performance of U.S. dollar denominated debt publicly issued by U.S. states and territories, andtheir political subdivisions, in the U.S. domestic market. Qualifying securities must be subject to U.S. federal taxes and must have at least 18 months to maturity
at point of issuance, at least one year remaining term to final maturity to enter the index and one month remaining term to final maturity to remain in the index, afixed coupon schedule (including zero coupon bonds) and an investment grade rating (based on an average of Moody’s, S&P and Fitch). The call date on which a
pre-refunded bond will be redeemed is used for purposes of determining qualification with respect to final maturity requirements. Minimum size requirements
vary based on the initial term to final maturity at time of issuance. Securities with an initial term to final maturity greater than or equal to one year and less than
five years must have a current amount outstanding of at least $10 million. Securities with an initial term to final maturity greater than or equal to five years andless than ten years must have a current amount outstanding of at least $15 million. Securities with an initial term to final maturity of ten years or more must havea current amount outstanding of at least $25 million. “Direct pay” Build America Bonds (i.e., a direct federal subsidy is paid to the issuer) qualify for inclusion in
the index, but “tax-credit” Build America Bonds (i.e., where the investor receives a tax credit on the interest payments) do not. Local bonds issued by U.S. territories
within their jurisdictions that are tax exempt within the U.S. territory but not elsewhere are excluded from the Index. All 144a securities, both with and without
registration rights, and securities in legal default are excluded from the Index. Index constituents are market capitalization weighted. Accrued interest is calculated
assuming next-day settlement. Cash flows from bond payments that are received during the month are retained in the index until the end of the month and then
are removed as part of the rebalancing. Cash does not earn any reinvestment income while it is held in the index.
ICE BOFA U.S. MUNICI PAL SECURITIES INDEXICE BofA U.S. Municipal Securities Index tracks the performance of U.S. dollar denominated investment grade tax exempt debt publicly issued by U.S. states andterritories, and their political subdivisions, in the U.S. domestic market. Qualifying securities must have at least one year remaining term to final maturity, at least
18 months to final maturity at the time of issuance, a fixed coupon schedule and an investment grade rating (based on an average of Moody’s, S&P and Fitch).
Minimum size requirements vary based on the initial term to final maturity at time of issuance. Securities with an initial term to final maturity greater than or equal
to one year and less than five years must have a current amount outstanding of at least $10 million. Securities with an initial term to final maturity greater thanor equal to five years and less than ten years must have a current amount outstanding of at least $15 million. Securities with an initial term to final maturity often years or more must have a current amount outstanding of at least $25 million. The call date on which a pre-refunded bond will be redeemed is used for
purposes of determining qualification with respect to final maturity requirements. Original issue zero coupon bonds are included in the Index. Taxable municipal
securities, 144a securities and securities in legal default are excluded from the Index. Index constituents are market capitalization weighted. Accrued interest is
calculated assuming next-day settlement. Cash flows from bond payments that are received during the month are retained in the index until the end of the monthand then are removed as part of the rebalancing. Cash does not earn any reinvestment income while it is held in the index.
BLOOMBERG U.S. HIGH YIELD INDEX
Covers the universe of fixed rate, non-investment grade debt. Eurobonds and debt issues from countries designated as emerging markets (sovereign rating of
Baa1/BBB+/BBB+ and below using the middle of Moody’s, S&P, and Fitch) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-EMG
countries are included. Original issue zeroes, step-up coupon structures, 144-As and pay-in-kind bonds (PIKs, as of October 1, 2009) are also included.
BLOOMBERG PAN-EUROPEAN AGGREGATE INDEX
Covers eligible investment grade securities from the entire European continent. The primary component is the Bloomberg Euro-Aggregate Index. In addition, theBloomberg Pan-European Aggregate Index includes eligible securities denominated in British pounds (GBP), Swedish krona (SEK), Danish krone (DKK), Norwegiankrone (NOK), Czech koruna (CZK), Hungarian forint (HUF), Polish zloty (PLN), Slovenian Tolar (SIT), Slovakian koruna (SKK), and Swiss franc (CHF). Apart from thecurrency constraint, the inclusion rules for the Pan-European Index are identical to those of the Bloomberg Euro-Aggregate Index.
JPM GBI (WORLD) USD
The J.P. Morgan GBI series provides a comprehensive measure of local currency denominated fixed rate government debt consists of five core index products
covering developed markets. The broadest series tracks 27 countries.
BLOOMBERG U.S. TAXAB LE MUNICIPAL INDEXThe Bloomberg U.S. Taxable Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term taxable bond market. To be includedin the index, bonds must be rated investment-grade (Baa3/BBB- or higher) by at least two of the following ratings agencies if all three rate the bond: Moody's,
S&P, Fitch. If only two of the three agencies rate the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security,
the rating must be investment-grade. They must have an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million.
The bonds must be fixed rate and must be at least one year from their maturity date. Remarketed issues (unless converted to fixed rate), bonds with floating
rates, and derivatives, are excluded from the benchmark.

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BLOOMBERG US TREASURY: INTERMEDIATE INDEXThe Bloomberg US Treasury: Intermediate Index measures US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury with maturities of 1 to9.9999 years to maturity.
BLOOMBERG U.S. CREDI T INDEX
Publicly issued U.S. corporate and specified foreign debentures and secured notes. Must be an investment grade credit security. Must have at least one year to
final maturity regardless of call features. Must have at least $300 million par amount outstanding. Must be rated investment-grade (Baa3/BBB- or higher) by atleast two of the following ratings agencies: Moody's, S&P, Fitch. Must be fixed rate. Must be dollar-denominated and non-convertible.
BLOOMBERG U.S. CORPO RATE HIGH YIELD INDE X
The Bloomberg U.S. High Yield Index covers the universe of fixed rate, non-investment grade debt. Eurobonds and debt issues from countries designated as
emerging markets (sovereign rating of Baa1/BBB+/BBB+ and below using the middle of Moody’s, S&P, and Fitch) are excluded, but Canadian and global bonds(SEC registered) of issuers in non-EMG countries are included. Original issue zeroes, step-up coupon structures, 144-As and pay-in-kind bonds (PIKs, as of October
1, 2009) are also included. Must have at least one year to final maturity regardless of call features. Must have at least $150 million par amount outstanding.
Must be rated high-yield (Ba1/BB+ or lower) by at least two of the following ratings agencies: Moody's, S&P, Fitch. Must be fixed rate, although it can carry a
coupon that steps up or changes according to a predetermined schedule. Must be dollar-denominated and non-convertible. Must be publicly issued.
BLOOMBERG U.S. TAXABLE MUNICIPAL INDEXThe Bloomberg U.S. Taxable Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term taxable bond market. To be includedin the index, bonds must be rated investment-grade (Baa3/BBB- or higher) by at least two of the following ratings agencies if all three rate the bond: Moody's,
S&P, Fitch. If only two of the three agencies rate the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security,
the rating must be investment-grade. They must have an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million.
The bonds must be fixed rate and must be at least one year from their maturity date. Remarketed issues (unless converted to fixed rate), bonds with floating
rates, and derivatives, are excluded from the benchmark.
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当資料は、投資助言の提供、有価証券その他の金融商品の売買の勧誘、または取引戦略への参加の提案を意図するものではありません。
また、当資料は、金融商品取引法、投資信託及び投資法人に関する法律または東京証券取引所が規定する上場に関する規則等に基づく開示書類または運用報告書ではありません。New York Life Investment Management Asia Limitedおよびその関係会社は、当資料に記載された情報について正確であることを表明または保証するものではありません。
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New York Life Investment Management Asia Limited
金融商品取引業者

登録番号 関東財務局長（金商）第2964 号

一般社団法人日本投資顧問業協会会員
一般社団法人第二種金融商品取引業協会会員

ABOUT RISK
Municipal bond risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers, and the possibility of future tax
and legislative changes, which could affect the market for and value of municipal securities. Bonds subject to interest rate risk and can lose principal value wheninterest rates rise. Bonds are also subject to credit risk which is the possibility that the bond issuer may fail to pay interest and principal in a timely manner.
Diversification cannot assure a profit or protect against loss in a declining market.
Impact investing and/or Environmental, Social and Governance (ESG) managers may take into consideration factors beyond traditional financial information to
select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether suchsectors or investments are in or out of favor in the market. Further, certain ESG strategies may limit exposures found in similar strategies or broad market
benchmarks, which could also result in relative investment performance deviating. There is no assurance that employing ESG strategies will result in morefavorable investment performance.
“New York Life Investments” is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company.

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