Quarterly Holdings Report
for
Fidelity® Preferred Securities & Income ETF
May 31, 2024
PSI-NPRT3-0724
1.9901715.102
Nonconvertible Bonds - 18.3% | |||
Principal Amount (a) | Value ($) | ||
COMMUNICATION SERVICES - 1.6% | |||
Media - 0.5% | |||
Paramount Global: | |||
6.25% 2/28/57 (b) | 80,000 | 69,708 | |
6.375% 3/30/62 (b) | 125,000 | 113,926 | |
183,634 | |||
Wireless Telecommunication Services - 1.1% | |||
Vodafone Group PLC 7% 4/4/79 (b) | 400,000 | 412,122 | |
TOTAL COMMUNICATION SERVICES | 595,756 | ||
ENERGY - 2.9% | |||
Oil, Gas & Consumable Fuels - 2.9% | |||
Enbridge, Inc. 8.5% 1/15/84 (b) | 250,000 | 268,676 | |
Energy Transfer LP 8% 5/15/54 (b) | 35,000 | 36,436 | |
Enterprise Products Operating LP: | |||
CME Term SOFR 3 Month Index + 2.980% 8.5743% 8/16/77 (b)(c) | 33,000 | 32,703 | |
5.25% 8/16/77 (b) | 126,000 | 120,355 | |
5.375% 2/15/78 (b) | 67,000 | 62,175 | |
Transcanada Trust: | |||
5.3% 3/15/77 (b) | 161,000 | 149,601 | |
5.5% 9/15/79 (b) | 128,000 | 117,054 | |
5.6% 3/7/82 (b) | 200,000 | 180,089 | |
5.875% 8/15/76 (b) | 129,000 | 126,069 | |
1,093,158 | |||
FINANCIALS - 9.7% | |||
Capital Markets - 0.2% | |||
Ares Finance Co. III LLC 4.125% 6/30/51 (b)(d) | 75,000 | 69,516 | |
Financial Services - 0.9% | |||
Apollo Management Holdings LP 4.95% 1/14/50 (b)(d) | 324,000 | 314,840 | |
Insurance - 8.6% | |||
American International Group, Inc. 5.75% 4/1/48 (b) | 129,000 | 126,486 | |
Assurant, Inc. 7% 3/27/48 (b) | 61,000 | 61,692 | |
Liberty Mutual Group, Inc.: | |||
4.125% 12/15/51 (b)(d) | 150,000 | 138,772 | |
4.3% 2/1/61 (d) | 125,000 | 75,121 | |
Meiji Yasuda Life Insurance Co.: | |||
5.1% 4/26/48 (b)(d) | 200,000 | 195,380 | |
5.2% 10/20/45 (b)(d) | 200,000 | 197,247 | |
MetLife, Inc.: | |||
6.4% 12/15/66 (b) | 319,000 | 321,451 | |
10.75% 8/1/69 (b) | 128,000 | 169,911 | |
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen 5.875% 5/23/42 (b)(d) | 200,000 | 199,316 | |
Nippon Life Insurance Co.: | |||
2.75% 1/21/51 (b)(d) | 200,000 | 166,184 | |
3.4% 1/23/50 (b)(d) | 100,000 | 87,965 | |
4.7% 1/20/46 (b)(d) | 200,000 | 195,097 | |
6.25% 9/13/53 (b)(d) | 200,000 | 205,826 | |
PartnerRe Finance B LLC 4.5% 10/1/50 (b) | 67,000 | 60,805 | |
Prudential Financial, Inc.: | |||
3.7% 10/1/50 (b) | 200,000 | 171,977 | |
5.125% 3/1/52 (b) | 150,000 | 139,313 | |
6% 9/1/52 (b) | 200,000 | 195,505 | |
6.75% 3/1/53 (b) | 250,000 | 255,971 | |
Sumitomo Life Insurance Co. 4% 9/14/77 (b)(d) | 270,000 | 253,155 | |
3,217,174 | |||
TOTAL FINANCIALS | 3,601,530 | ||
UTILITIES - 4.1% | |||
Electric Utilities - 2.0% | |||
Edison International 7.875% 6/15/54 (b) | 15,000 | 15,329 | |
Emera, Inc. 6.75% 6/15/76 (b) | 125,000 | 123,631 | |
NextEra Energy Capital Holdings, Inc. 5.65% 5/1/79 (b) | 104,000 | 98,556 | |
Southern Co.: | |||
3.75% 9/15/51 (b) | 125,000 | 116,333 | |
4% 1/15/51 (b) | 400,000 | 385,724 | |
739,573 | |||
Multi-Utilities - 2.1% | |||
CMS Energy Corp.: | |||
3.75% 12/1/50 (b) | 409,000 | 337,914 | |
4.75% 6/1/50 (b) | 300,000 | 275,621 | |
Sempra 4.125% 4/1/52 (b) | 210,000 | 192,934 | |
806,469 | |||
TOTAL UTILITIES | 1,546,042 | ||
TOTAL NONCONVERTIBLE BONDS (Cost $6,886,306) | 6,836,486 | ||
U.S. Treasury Obligations - 5.0% | |||
Principal Amount (a) | Value ($) | ||
U.S. Treasury Bonds: | |||
3.875% 2/15/43 | 1,575,000 | 1,407,899 | |
3.875% 5/15/43 | 500,000 | 445,938 | |
TOTAL U.S. TREASURY OBLIGATIONS (Cost $1,823,020) | 1,853,837 | ||
Preferred Stocks - 21.4% | |||
Shares | Value ($) | ||
Convertible Preferred Stocks - 1.1% | |||
FINANCIALS - 1.1% | |||
Banks - 1.1% | |||
Wells Fargo & Co. 7.50% | 350 | 408,307 | |
Nonconvertible Preferred Stocks - 20.3% | |||
COMMUNICATION SERVICES - 2.5% | |||
Diversified Telecommunication Services - 1.3% | |||
AT&T, Inc.: | |||
4.75% | 21,000 | 423,780 | |
5.35% | 3,500 | 80,920 | |
504,700 | |||
Wireless Telecommunication Services - 1.2% | |||
Telephone & Data Systems, Inc.: | |||
6.00% | 3,500 | 64,050 | |
6.625% | 1,500 | 30,930 | |
U.S. Cellular Corp. | 3,500 | 74,375 | |
U.S. Cellular Corp.: | |||
5.50% | 3,500 | 74,725 | |
6.25% | 8,500 | 195,840 | |
439,920 | |||
TOTAL COMMUNICATION SERVICES | 944,620 | ||
FINANCIALS - 12.2% | |||
Banks - 3.7% | |||
Bank of America Corp.: | |||
4.25% | 5,500 | 102,740 | |
4.375% | 19,000 | 367,840 | |
Cadence Bank 5.50% | 2,000 | 43,220 | |
Citizens Financial Group, Inc. Series E, 5.00% | 2,000 | 37,940 | |
Fifth Third Bancorp Series K 4.95% | 800 | 16,904 | |
JPMorgan Chase & Co.: | |||
4.55% | 22,900 | 468,305 | |
Series MM, 4.20% | 1,700 | 32,402 | |
KeyCorp: | |||
6.125%(b) | 3,000 | 72,120 | |
6.20%(b) | 2,000 | 45,320 | |
Regions Financial Corp.: | |||
4.45% | 500 | 9,093 | |
5.75%(b) | 3,000 | 68,790 | |
U.S. Bancorp Series M, 4.00% | 2,000 | 35,020 | |
Webster Financial Corp. Series F, 5.25% | 750 | 14,910 | |
Western Alliance Bancorp. (b) | 1,500 | 27,360 | |
Wintrust Financial Corp. 6.50% (b) | 2,000 | 49,300 | |
1,391,264 | |||
Capital Markets - 3.3% | |||
Affiliated Managers Group, Inc. 4.75% | 3,000 | 56,400 | |
Brookfield Oaktree Holdings Ll: | |||
6.55% | 7,000 | 147,840 | |
Series A, 6.625% | 7,000 | 150,500 | |
Charles Schwab Corp. 4.45% | 4,500 | 91,575 | |
Morgan Stanley: | |||
Series K, 5.85%(b) | 16,000 | 391,840 | |
Series O, 4.50% | 4,300 | 81,700 | |
Northern Trust Corp. Series E, 4.70% | 1,500 | 31,875 | |
State Street Corp. Series G, 5.35% (b) | 1,000 | 24,550 | |
Stifel Financial Corp. Series D, 4.50% | 13,000 | 239,135 | |
1,215,415 | |||
Consumer Finance - 0.1% | |||
Navient Corp. 6.00% | 1,500 | 28,365 | |
Financial Services - 0.9% | |||
Carlyle Finance LLC 4.625% | 2,500 | 45,325 | |
Equitable Holdings, Inc.: | |||
4.30% | 1,000 | 18,690 | |
Series A 5.25% | 3,000 | 66,990 | |
KKR Group Finance Co. IX LLC 4.625% | 5,000 | 97,200 | |
Voya Financial, Inc. Series B, 5.35% (b) | 5,000 | 124,400 | |
352,605 | |||
Insurance - 4.2% | |||
Aegon Funding Co. LLC 5.10% | 3,950 | 82,239 | |
Allstate Corp.: | |||
5.10% | 10,000 | 221,100 | |
Series I, 4.75% | 2,000 | 41,580 | |
American Financial Group, Inc. 4.50% | 6,000 | 110,820 | |
Arch Capital Group Ltd.: | |||
5.45% | 2,000 | 44,820 | |
Series G, 4.55% | 2,250 | 44,033 | |
Assurant, Inc. 5.25% | 2,500 | 52,500 | |
Athene Holding Ltd.: | |||
7.25%(b) | 8,800 | 224,312 | |
Series A, 6.35%(b) | 2,500 | 60,675 | |
Series D, 4.875% | 4,000 | 76,800 | |
Brighthouse Financial, Inc. | 4,000 | 78,000 | |
Brighthouse Financial, Inc.: | |||
Series A, 6.60% | 2,000 | 45,640 | |
Series B, 6.75% | 2,000 | 47,620 | |
Series D, 0.00% | 4,000 | 66,800 | |
Prudential Financial, Inc. 5.625% | 1,500 | 36,930 | |
Reinsurance Group of America, Inc. 7.125% (b) | 4,000 | 104,440 | |
RenaissanceRe Holdings Ltd. Series G, 4.20% | 1,550 | 26,970 | |
Unum Group 6.25% | 3,500 | 86,135 | |
W.R. Berkley Corp. 4.25% | 5,000 | 93,650 | |
1,545,064 | |||
TOTAL FINANCIALS | 4,532,713 | ||
INDUSTRIALS - 1.5% | |||
Trading Companies & Distributors - 1.5% | |||
FTAI Aviation Ltd.: | |||
8.00%(b) | 2,000 | 51,120 | |
8.25%(b) | 2,000 | 51,205 | |
8.25%(b) | 8,000 | 207,600 | |
WESCO International, Inc. (b) | 9,000 | 239,850 | |
549,775 | |||
REAL ESTATE - 2.0% | |||
Equity Real Estate Investment Trusts (REITs) - 2.0% | |||
American Homes 4 Rent 6.25% | 1,000 | 23,770 | |
Digital Realty Trust, Inc.: | |||
5.25% | 1,750 | 37,310 | |
Series L, 5.20% | 10,000 | 213,200 | |
Public Storage: | |||
4.00% | 20,000 | 360,400 | |
Series H, 5.60% | 1,500 | 37,695 | |
Series I, 4.875% | 1,500 | 33,540 | |
SITE Centers Corp. 6.375% | 1,000 | 22,020 | |
Summit Hotel Properties, Inc. Series F, 5.875% | 775 | 15,178 | |
743,113 | |||
UTILITIES - 2.1% | |||
Electric Utilities - 1.4% | |||
Entergy Louisiana LLC 4.875% | 1,000 | 21,390 | |
SCE Trust V 5.45% (b) | 1,550 | 38,781 | |
SCE Trust VII: | |||
6.95% | 6,000 | 151,200 | |
7.75% | 5,000 | 133,650 | |
Southern Co.: | |||
4.20% | 3,500 | 69,615 | |
Series A, 4.95% | 5,000 | 110,750 | |
525,386 | |||
Independent Power and Renewable Electricity Producers - 0.1% | |||
Brookfield Renewable Partners LP 5.25% | 2,395 | 44,068 | |
Multi-Utilities - 0.6% | |||
Algonquin Power & Utilities Corp. Series A, 6.20% (b) | 3,000 | 76,350 | |
Brookfield Infrastructure Partners LP: | |||
5.125% | 825 | 15,073 | |
Class A 5.00% | 825 | 14,108 | |
DTE Energy Co.: | |||
4.375% | 2,825 | 55,822 | |
4.375% | 1,000 | 20,100 | |
SCE Trust VI | 2,375 | 46,051 | |
227,504 | |||
TOTAL UTILITIES | 796,958 | ||
TOTAL NONCONVERTIBLE PREFERRED STOCKS | 7,567,179 | ||
TOTAL PREFERRED STOCKS (Cost $8,109,229) | 7,975,486 | ||
Preferred Securities - 52.0% | |||
Principal Amount (a) | Value ($) | ||
CONSUMER DISCRETIONARY - 0.6% | |||
Automobiles - 0.6% | |||
General Motors Financial Co., Inc. 5.7% 12/31/99 (b)(e) | 252,000 | 236,655 | |
ENERGY - 7.0% | |||
Oil, Gas & Consumable Fuels - 7.0% | |||
BP Capital Markets PLC: | |||
4.375% (b)(e) | 125,000 | 122,229 | |
4.875% (b)(e) | 525,000 | 495,342 | |
6.45% (b)(e) | 215,000 | 219,807 | |
Enbridge, Inc.: | |||
5.5% 7/15/77 (b) | 126,000 | 118,492 | |
5.75% 7/15/80 (b) | 126,000 | 117,421 | |
6% 1/15/77 (b) | 68,000 | 65,678 | |
6.25% 3/1/78 (b) | 123,000 | 117,286 | |
8.25% 1/15/84 (b) | 100,000 | 103,715 | |
Energy Transfer LP: | |||
CME Term SOFR 3 Month Index + 4.280% 9.612% (b)(c)(e) | 240,000 | 238,885 | |
6.625% (b)(e) | 425,000 | 399,799 | |
7.125% (b)(e) | 500,000 | 489,249 | |
Plains All American Pipeline LP CME Term SOFR 3 Month Index + 4.110% 9.694% (b)(c)(e) | 100,000 | 99,238 | |
2,587,141 | |||
FINANCIALS - 36.3% | |||
Banks - 21.5% | |||
Bank of America Corp.: | |||
5.875% (b)(e) | 1,073,000 | 1,053,447 | |
6.1% (b)(e) | 200,000 | 200,224 | |
6.125% (b)(e) | 100,000 | 99,749 | |
Citigroup, Inc.: | |||
3.875% (b)(e) | 400,000 | 376,319 | |
4.15% (b)(e) | 89,000 | 82,394 | |
5.95% (b)(e) | 393,000 | 389,910 | |
7.125% (b)(e) | 450,000 | 448,768 | |
9.007% (b)(c)(e) | 495,000 | 495,270 | |
Fifth Third Bancorp 4.5% (b)(e) | 50,000 | 48,214 | |
Huntington Bancshares, Inc. 5.625% (b)(e) | 226,000 | 210,009 | |
JPMorgan Chase & Co.: | |||
4% (b)(e) | 130,000 | 125,882 | |
4.6% (b)(e) | 300,000 | 294,436 | |
5% (b)(e) | 401,000 | 399,885 | |
6.1% (b)(e) | 321,000 | 322,123 | |
KeyCorp 5% (b)(e) | 100,000 | 89,167 | |
M&T Bank Corp. 5.125% (b)(e) | 50,000 | 46,936 | |
PNC Financial Services Group, Inc.: | |||
3.4% (b)(e) | 195,000 | 173,327 | |
5% (b)(e) | 542,000 | 522,641 | |
6.25% (b)(e) | 160,000 | 152,693 | |
Regions Financial Corp. 5.75% 12/31/99 (b) | 75,000 | 74,219 | |
Truist Financial Corp.: | |||
4.95% (b)(e) | 135,000 | 132,102 | |
5.1% (b)(e) | 403,000 | 373,519 | |
5.125% 12/31/99 (b)(e) | 60,000 | 55,516 | |
U.S. Bancorp: | |||
3.7% (b)(e) | 400,000 | 356,010 | |
5.3% (b)(e) | 115,000 | 109,960 | |
Wells Fargo & Co.: | |||
3.9% (b)(e) | 876,000 | 827,910 | |
5.9% (b)(e) | 471,000 | 470,099 | |
7.625% (b)(e) | 75,000 | 78,976 | |
8,009,705 | |||
Capital Markets - 9.1% | |||
Bank of New York Mellon Corp.: | |||
3.7% (b)(e) | 425,000 | 403,843 | |
3.75% (b)(e) | 96,000 | 88,122 | |
4.625% (b)(e) | 200,000 | 189,040 | |
4.7% (b)(e) | 65,000 | 63,720 | |
Charles Schwab Corp.: | |||
4% (b)(e) | 831,000 | 692,105 | |
4% (b)(e) | 200,000 | 186,038 | |
5% (b)(e) | 100,000 | 95,238 | |
Goldman Sachs Group, Inc.: | |||
4.125% (b)(e) | 124,000 | 114,921 | |
4.4% (b)(e) | 500,000 | 488,871 | |
5.3% (b)(e) | 79,000 | 77,588 | |
7.5% (b)(e) | 160,000 | 164,386 | |
Morgan Stanley 5.875% (b)(e) | 490,000 | 476,484 | |
Northern Trust Corp. 4.6% (b)(e) | 60,000 | 57,667 | |
SCE Trust III CME Term SOFR 3 Month Index + 3.250% 8.5809% 12/31/99 (b)(c) | 1,550 | 39,758 | |
State Street Corp. CME Term SOFR 3 Month Index + 2.800% 8.1299% (b)(c)(e) | 248,000 | 249,480 | |
3,387,261 | |||
Consumer Finance - 3.7% | |||
Ally Financial, Inc.: | |||
4.7% (b)(e) | 470,000 | 413,767 | |
4.7% (b)(e) | 220,000 | 175,938 | |
American Express Co. 3.55% (b)(e) | 217,000 | 197,806 | |
Capital One Financial Corp. 3.95% (b)(e) | 560,000 | 503,280 | |
Discover Financial Services 5.5% 12/31/99 (b)(e) | 100,000 | 84,990 | |
1,375,781 | |||
Financial Services - 0.2% | |||
Equitable Holdings, Inc. 4.95% (b)(e) | 75,000 | 73,612 | |
Insurance - 1.8% | |||
Dai-Ichi Life Insurance Co. Ltd. 4% 12/31/99 (b)(d) | 200,000 | 191,028 | |
Markel Group, Inc. 6% (b)(e) | 200,000 | 198,453 | |
MetLife, Inc. 3.85% (b)(e) | 275,000 | 264,413 | |
SBL Holdings, Inc. 6.5% 12/31/99 (b)(d)(e) | 34,000 | 27,030 | |
680,924 | |||
TOTAL FINANCIALS | 13,527,283 | ||
INDUSTRIALS - 2.1% | |||
Trading Companies & Distributors - 2.1% | |||
AerCap Holdings NV 5.875% 10/10/79 (b) | 50,000 | 49,664 | |
Air Lease Corp.: | |||
4.125% (b)(e) | 56,000 | 50,078 | |
4.65% (b)(e) | 300,000 | 283,115 | |
Aircastle Ltd. 5.25% (b)(d)(e) | 416,000 | 395,205 | |
778,062 | |||
UTILITIES - 6.0% | |||
Electric Utilities - 3.3% | |||
Duke Energy Corp. 4.875% (b)(e) | 325,000 | 320,393 | |
Edison International: | |||
5% (b)(e) | 324,000 | 308,465 | |
5.375% (b)(e) | 366,000 | 356,741 | |
Electricite de France SA 9.125% (b)(d)(e) | 200,000 | 219,702 | |
1,205,301 | |||
Independent Power and Renewable Electricity Producers - 1.5% | |||
Vistra Corp.: | |||
7% (b)(d)(e) | 470,000 | 466,506 | |
8% (b)(d)(e) | 100,000 | 101,650 | |
568,156 | |||
Multi-Utilities - 1.2% | |||
Dominion Energy, Inc.: | |||
4.35% (b)(e) | 225,000 | 212,617 | |
4.65% (b)(e) | 80,000 | 79,644 | |
Sempra 4.875% (b)(e) | 170,000 | 165,884 | |
458,145 | |||
TOTAL UTILITIES | 2,231,602 | ||
TOTAL PREFERRED SECURITIES (Cost $19,516,581) | 19,360,743 | ||
Money Market Funds - 2.6% | |||
Shares | Value ($) | ||
Fidelity Cash Central Fund 5.39% (f) (Cost $969,459) | 969,265 | 969,459 | |
TOTAL INVESTMENT IN SECURITIES - 99.3% (Cost $37,304,595) | 36,996,011 |
NET OTHER ASSETS (LIABILITIES) - 0.7% | 260,697 |
NET ASSETS - 100.0% | 37,256,708 |
Legend
(a) | Amount is stated in United States dollars unless otherwise noted. |
(b) | Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end. |
(c) | Coupon is indexed to a floating interest rate which may be multiplied by a specified factor and/or subject to caps or floors. |
(d) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $3,499,540 or 9.4% of net assets. |
(e) | Security is perpetual in nature with no stated maturity date. |
(f) | Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
Affiliated Central Funds
Fiscal year to date information regarding the Fund's investments in Fidelity Central Funds, including the ownership percentage, is presented below.
Affiliate | Value, beginning of period ($) | Purchases ($) | Sales Proceeds ($) | Dividend Income ($) | Realized Gain (loss) ($) | Change in Unrealized appreciation (depreciation) ($) | Value, end of period ($) | % ownership, end of period |
Fidelity Cash Central Fund 5.39% | 325,515 | 6,648,243 | 6,004,299 | 22,052 | - | - | 969,459 | 0.0% |
Total | 325,515 | 6,648,243 | 6,004,299 | 22,052 | - | - | 969,459 | |
Amounts in the dividend income column in the above table include any capital gain distributions from underlying funds.
Investment Valuation
Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Securities transactions are accounted for as of trade date. The Board of Trustees (the Board) has designated the Fund's investment adviser as the valuation designee responsible for the fair valuation function and performing fair value determinations as needed. The investment adviser has established a Fair Value Committee (the Committee) to carry out the day-to-day fair valuation responsibilities and has adopted policies and procedures to govern the fair valuation process and the activities of the Committee. In accordance with these fair valuation policies and procedures, which have been approved by the Board, the Fund attempts to obtain prices from one or more third party pricing services or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with the policies and procedures. Factors used in determining fair value vary by investment type and may include market or investment specific events, transaction data, estimated cash flows, and market observations of comparable investments. The frequency that the fair valuation procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee manages the Fund's fair valuation practices and maintains the fair valuation policies and procedures. The Fund's investment adviser reports to the Board information regarding the fair valuation process and related material matters.
The inputs to valuation techniques used to value investments are categorized into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - Unadjusted quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For any foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing services or from brokers who make markets in such securities. Nonconvertible Bonds, U.S. Treasury Obligations and Preferred Securities are valued by pricing services who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing services. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
The Fund invests a significant portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.
Investments in any open-end mutual funds are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
For additional information on the Fund's significant accounting policies, please refer to the Fund's most recent semiannual or annual shareholder report.
The fund's schedule of investments as of the date on the cover of this report has not been audited. This report is provided for the general information of the fund's shareholders. For more information regarding the fund and its holdings, please see the fund's most recent prospectus and annual report.
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