Strategy. Under normal circumstances, the Fund invests at least 80% of its assets in bonds. For these purposes, bonds include fixed-income securities of all types. The Funds portfolio is divided into two segments. The first segment, which makes up at least 70% of the Funds assets, is invested primarily in a broad range of investment-grade bonds and fixed-income securities, including, but not limited to, corporate bonds, U.S. Treasury and agency securities and mortgage-backed and asset-backed securities. The securities within the Funds first segment are mainly high-quality instruments rated in the top four credit categories by a nationally recognized statistical rating organization (NRSRO) or deemed to be of the same quality by Teachers Advisors, LLC (Advisors) using its own credit analysis. The … Show more… Under normal circumstances, the Fund invests at least 80% of its assets in bonds. For these purposes, bonds include fixed-income securities of all types. The Funds portfolio is divided into two segments. The first segment, which makes up at least 70% of the Funds assets, is invested primarily in a broad range of investment-grade bonds and fixed-income securities, including, but not limited to, corporate bonds, U.S. Treasury and agency securities and mortgage-backed and asset-backed securities. The securities within the Funds first segment are mainly high-quality instruments rated in the top four credit categories by a nationally recognized statistical rating organization (NRSRO) or deemed to be of the same quality by Teachers Advisors, LLC (Advisors) using its own credit analysis. The second segment, which will not exceed 30% of the Funds assets, is invested in fixed-income securities and bonds with special features in an effort to improve the Funds total return. Potential investments in this segment include, but are not limited to, non-investment-grade securities (those securities rated in the fifth or lower rating categories), emerging market fixed-income securities, convertible and preferred securities, senior loans and loan participations and assignments and notes. Non-investment-grade securities are usually called high yield or junk bonds and are speculative in nature. For purposes of the 80% investment policy, the term assets means net assets, plus the amount of any borrowings for investment purposes. The Funds investments may include securities having a variable or floating interest rate. The Fund may invest in fixed-income securities of any duration. As of May 31, 2025, the duration of the Funds benchmark index, the Bloomberg U.S. Aggregate Bond Index, was 6.02 years. The Funds investments in mortgage-backed securities can include pass-through securities sold by private, governmental and government-related organizations and collateralized mortgage obligations (CMOs). Mortgage pass-through securities are created when mortgages are pooled together and interests in the pool are sold to investors. The cash flow from the underlying mortgages is passed through to investors in periodic principal and interest payments. CMOs are obligations that are fully collateralized directly or indirectly by a pool of mortgages from which payments of principal and interest are dedicated to the payment of principal and interest on the CMO. The Fund may use an investment strategy called mortgage rolls (also referred to as dollar rolls), in which the Fund sells securities for delivery in the current month and simultaneously contracts with a counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The Fund loses the right to receive principal and interest paid on the securities sold. However, the Fund would benefit to the extent of any price received for the securities sold and the lower forward price for the future purchase (often referred to as the drop) plus the interest earned on the short-term investment awaiting the settlement date of the forward purchase. If such benefits exceed the income and gain or loss due to mortgage repayments that would have been realized on the securities sold as part of the mortgage roll, the use of this technique will enhance the investment performance of the Fund compared with what such performance would have been without the use of mortgage rolls. Realizing benefits from the use of mortgage rolls depends upon the ability of Advisors to predict correctly mortgage prepayments and interest rates. The Fund can make foreign investments, including investments in emerging market countries and non-dollar-denominated instruments, but the Fund does not expect such investments to exceed 25% of its assets under most circumstances. The Fund may also engage in relative value trading, a strategy in which the Fund reallocates assets across different sectors and maturities. Relative value trading is designed to enhance the Funds returns but increases the Funds portfolio turnover rate. The Fund may purchase and sell futures, options, swaps, forwards and other fixed-income derivative instruments to carry out the Funds investment strategies. Show less