Fund Ratings

International Fund Credit Ratings

International Fund Credit Ratings are an opinion as to the vulnerability to losses as a result of defaults in a bond fund's or local government investment pool's portfolio. The ratings are stated using the same scale as International Long-Term Credit Ratings; however, they do not measure expectation of default risk for the fund itself, as a fund generally cannot default. Rather, the ratings are based on the actual and prospective average credit quality of the fund's invested portfolio. International Fund Credit Ratings have an element of rating momentum embedded and therefore also capture the likelihood that the fund maintains a given credit quality over time.

Fund Credit Ratings are generally complemented by Fund Volatility Ratings to distinguish them from Long-Term Credit Ratings.

International Fund Credit Ratings do not address any risk other than credit risk. In particular, these ratings do not address the risk of loss due to changes in prevailing interest rates, credit spreads and other market conditions, nor do they comment on the adequacy of market value or address the extent to which fund expenses and costs might reduce distributions to shareholders.

International Fund Volatility Ratings

International Fund Volatility Ratings are an opinion as to the relative sensitivity of a portfolio's total return (including income and market value) and/or net asset value to assumed changes in credit spreads and interest rates as well as certain other market risk parameters, and taking into account the effects of leverage, where applicable. International Fund Volatility Ratings do not predict the direction or magnitude of changes in such market conditions and therefore do not predict whether, or the extent to which, any particular fund will perform favorably or adversely in the future. Furthermore, International Fund Volatility Ratings do not gauge the sensitivity of a bond fund to extreme risks that may result from reduced liquidity in secondary markets during certain periods.

International Fund Volatility Ratings are expressed on a scale of 'V-1' (very low market risk) to 'V-6' (very high market risk). For certain illiquid markets and/or asset classes, it may not be feasible to derive a Fund Volatility Rating. In these instances, Fitch assigns a 'V-NR' rating in lieu of a volatility rating to indicate this. Additionally, in a limited number of markets, the rating scale is determined by the local regulatory authorities, which may preclude the use of volatility ratings.

V-1: Very Low Market Risk
Funds rated 'V-1' are considered to have very low sensitivity to market risk. On a relative basis, total returns are expected to exhibit high stability, performing consistently across a broad range of market scenarios. These funds offer very low risk exposure to interest rates, credit spreads and other risk factors. They are generally short-term government or high credit quality bond funds.

V-2: Low Market Risk
Funds rated 'V-2' are considered to have low sensitivity to market risk. On a relative basis, total returns are expected to exhibit relative stability, performing consistently across a broad range of market scenarios. These funds offer low risk exposure to interest rates, credit spreads and other risk factors. They are typically short- to medium-term government or high credit quality bond funds with various investment objectives.

V-3: Moderate Market Risk
Funds rated 'V-3' are considered to have moderate sensitivity to market risk. On a relative basis, total returns are expected to perform consistently over medium- to long-term holding periods, but will exhibit some variability over shorter periods due to greater exposure to interest rates, credit spreads and other risk factors. They are generally medium-term government or short-term corporate bond funds.

V-4: Moderate to High Market Risk
Funds rated 'V-4' are considered to have moderate to high sensitivity to market risk. On a relative basis, total returns are expected to experience significant variability across a broad range of market scenarios. These funds typically exhibit significant exposure to interest rates, credit spreads and other risk factors. They are typically longer-term government or medium-term corporate bond funds with some low investment grade or high yield exposure.

V-5: High Market Risk
Funds rated 'V-5' are considered to have high sensitivity to market risk. On a relative basis, total returns are expected to experience substantial variability across a broad range of market scenarios. These funds generally exhibit substantial exposure to interest rates, credit spreads and other risk factors. They are typically very long-term government or long-term corporate bond funds with low investment grade or high yield exposure.

V-6: Very High Market Risk
Funds rated 'V-6' are considered to have very high sensitivity to market risk. On a relative basis, total returns are expected to experience extreme variability across a broad range of market scenarios. These funds generally exhibit very substantial exposure to interest rates, credit spreads and other risk factors. They are typically long-term corporate bond funds with substantial low investment grade and/or high yield exposure.

V-NR
A 'V-NR' rating is assigned in certain illiquid markets and/or asset classes, where it may not be feasible to derive a volatility rating.

International Money Market Fund Ratings

International Money Market Fund Ratings are an opinion of the capacity of a money market fund to preserve principal and provide shareholder liquidity. Fitch's International Money Market Fund Ratings are based on an evaluation of several factors, including credit, market, and liquidity risk, overall levels of portfolio diversification, maturity distribution of assets in the portfolio, and stability of the shareholder base. International Money Market Fund Ratings also reflect an opinion of the fund sponsor's willingness and ability to provide support to a fund through dedicated resources, investment management oversight, and, in extreme cases, financial support. International Money Market Fund Ratings address, on a relative basis, the capacity to preserve invested principal and provide shareholder liquidity in accordance with the fund's offering terms.

AAAmmf
"AAAmmf" ratings denote extremely strong capacity to achieve money market fund's investment objective of preserving principal and providing shareholder liquidity through limiting credit, market, and liquidity risk.

AAmmf
"AAmmf" ratings denote very strong capacity to achieve money market fund's investment objective of preserving principal and providing shareholder liquidity through limiting credit, market, and liquidity risk.

Ammf
"Ammf" ratings denote strong capacity to achieve money market fund's investment objective of preserving principal and providing shareholder liquidity through limiting credit, market, and liquidity risk.

BBBmmf
"BBBmmf" ratings denote adequate capacity to achieve money market fund's investment objective of preserving principal and providing shareholder liquidity through limiting credit, market, and liquidity risk. Capital preservation may be at greater risk due to adverse market conditions, heightened redemptions, and/or credit risk.

BBmmf
"BBmmf" ratings denote uncertain capacity to achieve principal preservation. Money market fund shareholder liquidity impaired due to wholesale imposition of redemption restrictions.

Bmmf
"Bmmf" ratings denote failure to preserve capital. Some loss of invested principal is likely, but recovery is expected to be high.

National Fund Credit, Fund Volatility, and Money Market Fund Ratings

National Fund Credit Ratings

In the case of countries with foreign and local currency sovereign ratings significantly below 'AAA', Fitch Ratings may provide National Fund Credit Ratings. Such ratings are based on the same scale as that applicable to national long-term credit ratings, which results in the assignment of an 'AAA' long-term credit rating to the lowest default risk relative to all the issuers or issues in the same country.

National Fund Credit Ratings provide a relative assessment of the safety of invested principal and the ability to maintain a stable market value for the fund's shares solely within the context of the country in question.

National Fund Volatility Ratings

National Fund Volatility Ratings are an opinion of the relative sensitivity of the total return (including market price) on a fund's shares to a broad array of assumed interest rates, liquidity of the portfolio, spreads, currency exchange rates, and other market conditions. Unlike International Fund Volatility Ratings, these National Fund Volatility Ratings are solely an opinion of the relative risk of such factors endogenous to the sovereign state in which the fund operates. National Fund Volatility Ratings are expressed in terms of the same scale and description as International Volatility Ratings and are signified by the addition of a special identifier for the country concerned, such as, for example, "V-1(mex)" in the case of Mexico.

National Money Market Fund Ratings

National Money Market Fund Ratings provide a relative opinion of the capacity of a money market fund to preserve principal and provide shareholder liquidity solely within the context of the country in question. The ratings in question are not internationally comparable since each country has a National Rating of 'AAA' assigned to the lowest default risk or "best" credit available in that country and other credits are rated only relative to the entity or transaction with the lowest relative default risk for that country. National Money Market Fund Ratings are signified by the addition of a special identifier for the country concerned, such as, for example, "AAAmmf(mex)" in the case of Mexico.