Verkaufsprospekt

Investment grade securities may be subject to the risk of
being downgraded to a rating that is below investment
grade.
Unitholders should note that where investment grade securities
are downgraded to a rating that is below investment
grade after acquisition, there is no specific requirement to
sell such securities unless otherwise stated in the investment
policy outlined above in this Supplement. In the event
of such downgrading, the Manager or its delegates will
promptly analyse such securities and the financials of the
issuer of such securities to determine the action to be
taken (i.e. hold, reduce or buy).
Many fixed income securities especially those issued at
high interest rates provide that the issuer may repay them
early. Issuers often exercise this right when interest rates
decline. Accordingly, holders of securities that are pre-paid
may not benefit fully from the increase in value that other
fixed income securities experience when rates decline.
Furthermore, in such a scenario the Sub-Fund may reinvest
the proceeds of the pay-off at the then current
yields, which will be lower than those paid by the security
that was paid off. Pre-payments may cause losses on
securities purchased at a premium, and unscheduled prepayments,
which will be made at par, will cause the Sub-
Fund to experience loss equal to any unamortized premium.
An investment in sovereign debt securities, including, but
not limited to, those issued by sovereign / government
bodies of countries in the Eurozone, may be subject to
credit and / or default risks. Particularly high (or increasing)
levels of government fiscal deficit and / or high levels of
government debts, amongst other factors, may adversely
affect the credit rating of such sovereign debt securities
and may lead to market concerns of higher default risk. In
the unlikely event of downgrading or default, the value of
such securities may be adversely affected resulting in the
loss of some or all of the sums invested in such securities.
Below Investment Grade Debt Securities: An investment
in high yield securities, or below investment grade
debt securities, meaning securities rated below Baa3 by
Moody’s or below BBB- by Standard and Poor’s, sometimes
referred to as “junk bonds”, or low credit quality
securities, involves a higher degree of risk than investment
in investment grade debt securities. Issuers of these securities
are often highly leveraged, so that their ability to
service debt obligations during an economic downturn may
be impaired. The lower ratings of securities reflect a
greater possibility of adverse changes in the financial condition
of the issuer, which may impair the ability of the
issuer to make payments of interest and principal. The risk
of loss due to default in payment of interest or principal by
such issuers is significantly greater than in the case of
investment grade securities because such securities frequently
are subordinated to the prior payment of senior
indebtedness. In the case of default or winding up of an
issuer of below investment grade securities, there is a
greater risk that the capital / assets of the issuer will be
insufficient to meet all of its liabilities and the holders of
below investment grade securities, (who rank as unsecured
creditors) could in such circumstances lose their
entire investment. An economic downturn or a period of
PineBridge Global Emerging Markets Local Currency Bond Fund
rising interest rates could adversely affect the market for
these securities and reduce the Sub-Fund’s ability to sell
these securities.
The market for below investment grade rated securities
may be thinner and less active than that for higher quality
securities which can adversely affect the price at which
securities can be sold. To the extent that there is no regular
secondary market trading for certain lower rated securities,
the investment manager may experience difficulty in
valuing such securities and in turn the Sub-Fund’s assets.
Credit Default Swaps: When the Sub-Fund is the buyer of
a credit default swap, it would be entitled to receive the
agreed-upon value (or par) of a referenced debt obligation
from the counterparty to the swap on the occurrence of
certain credit events in relation to the relevant reference
entity. As consideration, the Sub-Fund would pay to the
counterparty a periodic stream of fixed payments during
the life of the swap if no credit event has occurred, in
which case the Sub-Fund would receive no benefits under
the swap. In circumstances in which the Sub-Fund does
not own the debt securities that are deliverable under a
credit default swap, the Sub-Fund is exposed to the risk
that deliverable securities will not be available in the market,
or will be available only at unfavourable prices. In
certain instances of issuer defaults or restructurings, it has
been unclear under the standard industry documentation
for credit default swaps whether or not a "credit event"
triggering the seller's payment obligation had occurred. In
either of these cases, the Sub-Fund would not be able to
realize the full value of the credit default swap upon a
default by the reference entity. As a seller of credit default
swaps, the Sub-Fund incurs exposure to the credit of the
reference entity and is subject to many of the same risks it
would incur if it were holding debt securities issued by the
reference entity. However, the Sub-Fund will not have any
legal recourse against the reference entity and will not
benefit from any collateral securing the reference entity's
debt obligations.
Political and Economic Risk: Russia: There are significant
risks inherent in investing in Russia. There is no history
of stability in the Russian market and no guarantee of
future stability. The economic infrastructure of Russia is
poor and the country maintains a high level of external and
internal debt. Tax regulations are ambiguous and unclear
and there is a risk of imposition of arbitrary or onerous
taxes. Banks and other financial systems are not well
developed or regulated and as a result tend to be untested
and have low credit ratings. Bankruptcy and insolvency are
a commonplace feature of the business environment.
Foreign investment is affected by restrictions in terms of
repatriation and convertibility of currency. Regulations
governing securities investment may not exist or may be
applied in an arbitrary and inconsistent manner. Foreign
investors cannot be guaranteed redress in a court of law
for breach of local laws, regulations or contracts.
Volatility Risk: All markets are subject to volatility based
on prevailing economic conditions. Securities in 'emerging'
or 'developing' markets may involve a higher degree of risk
due to the small current size of the markets for securities
of 'emerging' or 'developing' market issuers and the currently
low or non-existent volume of trading, which could
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