b'08Investment Vehicle Comparison (Continued)Open-EndTarget Date Closed-EndBusiness DevelopmentIntervalTender Offer Funds Funds Funds Companies (BDCs) Funds FundsLeverageBorrowing only permittedBorrowing only permittedMay borrow from a bank and1:1 debt-to-equity ratio. Any borrowing, includingAny borrowing, including Restrictions from banks (in the absencefrom banks (in the absencehave more than one creditany borrowings to coverany borrowings to cover of exemptive relief, e.g., forof exemptive relief, e.g., forfacility at a time. iv May elect to reduce asset coverage to 150%,repurchases or any issuancerepurchases or any issuance interfund lending).interfund lending).allowing for a 2:1 debt-to-equity ratio. v by the fund of seniorby the fund of senior 1:2 leverage limit for debt, 1:1securities, must meet thesecurities, must meet the Generally limited to aGenerally limited to aleverage limit for preferredasset coverage limitationsasset coverage limitations maximum leverage ofmaximum leverage ofstock. of 300%, including theof 300%, including the 33.33% of portfolio value. 33.33% of portfolio value. amounts borrowed.amounts borrowed. 1:2 leverage limit for debt; 1:12:1 leverage limit.leverage limit for preferred stock.Public Pursuant to Section 30 ofPursuant to Section 30 of the 1940 Act, the fund must fileBDCs register securities with the SEC onPursuant to Section 30 of the 1940 Act, the fund must file Reporting the 1940 Act, the fund mustsemiannual and annual reports. Form N-2 and must file public companysemiannual and annual reports. Closed-end funds file annual file semiannual and annualreports (10-K, 10-Q, 8-K) pursuant to Sectionreports pursuant to Section 13(a) of the 1934 Act. reports. Closed-end funds file annual reports pursuant to Section14(a) of the 1934 Act.13(a) of the 1934 Act. Must also file monthly investment holdings reports and Open-end funds file annualMust also publicly file quarterly disclosurepublicly file quarterly disclosure of investment holdings reports pursuant to SectionMust also file monthly investment holdings reports andof investment holdings with the SEC. with the SEC.15(d) of the 1934 Act.publicly file quarterly disclosure of investment holdings with the SEC.Must also file monthly investment holdings reports and publicly file quarterly disclosure of investment holdings with the SEC.CorporateUnder the 1940 Act, at leastUnder the 1940 Act, at leastMajority independentMajority independent directors who are notMajority independent directors who are not interested Governance 40% of a mutual funds40% of the funds directorsdirectors who are notinterested persons. Must maintain andpersons, and those directors must select and nominate any directors must not bemust not be affiliated withinterested persons, andenforce a Code of Ethics for officers andother disinterested directors.affiliated with the fund, butthe fund, but virtually allthose directors must selectdirectors.virtually all funds maintainfunds maintain a board withand nominate any other a board with a majority ofa majority of independentdisinterested directors.independent (disinterested)directors.directors.iTarget date funds may also be collective instrument trusts. Collective instrument trusts are not regulated by the SEC and may have different characteristics than the exchange-traded funds or mutual funds described in this table.iiGoverning documents specify how often the TO fund will repurchase shares.iiiFunds must disclose the asset allocation of the fund in SEC filings, and marketing materials are reviewed by FINRA, but the allocation may be actively managed and adjusted.ivA closed-end fund may have more than one credit facility, because debt of the same priority is considered to be a single class, provided all facilities are unsecured or secured by the same collateral.vThe vote required to decrease the asset coverage ratio of a BDC is a majority of directors or general partner with a one-year delay on implementation or a majority of shareholders for immediate effectiveness.Mayer Brown|Investment Vehicle Comparison 30'