2. Investment Manager/Sub-Adviser
The Funds have an Investment Management Agreement (the “Agreement”) with the Investment Manager.
Subject to the supervision of the Funds’ Board of Trustees, the Investment Manager is responsible for managing,
either directly or through others selected by it, the Funds’ investment activities, business affairs and administrative
matters. Pursuant to the Agreement, the Investment Manager receives an annual fee, payable monthly, at an
annual rate of 0.75% of each Funds’ average weekly total managed assets. Total managed assets refer to the
total assets of each Fund (including assets attributable to any Preferred Shares or other forms of leverage that
may be outstanding minus accrued liabilities, other than liabilities representing leverage).
The Investment Manager has retained its affiliate, Pacific Investment Management Company LLC (“the Sub-
Adviser”), to manage the Funds’ investments. Subject to the supervision of the Investment Manager, the Sub-
Adviser is responsible for making all of the Funds’ investment decisions. The Investment Manager, and not the
Funds, pays a portion of the fees it receives to the Sub-Adviser in return for its services, at the maximum annual
rate of 0.39% of Floating Rate Income’s and Floating Rate Strategy’s average weekly total managed assets,
inclusive of net assets attributable to any preferred shares that may be outstanding, for the period from
commencement of operations through August 31, 2008 and October 31, 2008, respectively. Commencing
September 1, 2008 for Floating Rate Income and November 1, 2008 for Floating Rate Strategy, the Investment
Manager will pay the Sub-Adviser a monthly fee at the annual rate of 0.55% of the Funds’ average weekly total
managed assets, inclusive of net assets attributable to any preferred shares that may be outstanding.
3. Investments in Securities
For the six months ended January 31, 2007, purchases and sales of investments, other than short-term securities
and U.S. governm