Investment Objective: The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the BofA Merrill Lynch 10+ Year US Corporate & Government Index (the “Underlying Index”), which includes publicly issued U.S. Treasury debt, U.S. government agency debt, debt issued by U.S. and non-U.S. corporations, non-U.S. government debt and supranational debt. The Fund’s investment objective and the Underlying Index may be changed without shareholder approval.
The Underlying Index is sponsored by an organization (the “Index Provider”) that is independent of the Fund and BGFA. The Index Provider determines the composition and relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the Underlying Index. The Fund’s Index Provider is BofA Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BofA Merrill Lynch”). Additional information regarding the Index Provider is provided in the INDEX PROVIDER section of this Prospectus.
Principal Investment Strategies: The Underlying Index is a broad, market value weighted, total rate of return index designed to measure the performance of the long-term, investment-grade U.S. corporate and government bond markets. Component securities include publicly issued U.S. Treasury debt, U.S. government agency debt, debt issued by U.S. and non-U.S. corporations, non-U.S. government debt and supranational debt. The securities in the Underlying Index have $250 million or more of
outstanding face value ($1 billion for U.S. Treasuries) and have at least ten years remaining to maturity or the first call date in the case of callable perpetual securities. In addition, the securities must be denominated in U.S. dollars, have a fixed coupon schedule (or at least ten years before the last call prior to the date the bond transitions from a fixed to a floating rate security) and be issued by the government of, or an entity whose principal place of business is in, a country that has an investment-grade foreign currency long-term sovereign debt rating (based on an average of ratings published by Moody’s(Reg. TM) Investors Service, Inc. (“Moody’s”), Standard and Poor’s(Reg. TM) Financial Services LLC, a subsidiary of The McGraw-Hill Companies, (“S&P(Reg. TM)”) and Fitch Inc. (“Fitch”)). The Underlying Index is rebalanced on the last calendar day of each month, based on information available up to and including the third business day before the last business day of the month. As of June 30, 2009, the Underlying Index consisted of 1,266 USD-denominated issues of supranational and national entities of, and corporate entities whose principal place of business is in, the following countries: Australia, Barbados, Belgium, Bermuda, Brazil, Canada, the Cayman Islands, Chile, Finland, France, Germany, Hong Kong, Israel, Italy, Luxembourg, Malaysia, Malta, Mexico, the Netherlands, Norway, Peru, Qatar, Russia, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand, Trinidad/Tobago, the
United Arab Emirates, the United Kingdom and the United States.
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