485APOS 1 c64395_485apos.htm

As filed electronically with the Securities and Exchange Commission on February 25, 2011

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Registration No. 333-00295

Pre-Effective Amendment No.
Post-Effective Amendment No. 32
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
1940 Act File No. 811-07495

Amendment No. 33

(Check appropriate box or boxes.)

Transamerica Partners Funds Group II

(Exact Name of Registrant as Specified in Charter)

570 Carillon Parkway, St. Petersburg, FL 33716

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, including Area Code: (727) 299-1800

Dennis P. Gallagher, Esq., 570 Carillon Parkway, St. Petersburg, Florida 33716

(Name and Address of Agent for Service)

Approximate date of proposed public offering:
It is proposed that this filing will become effective:


o	60 days after filing pursuant to paragraph (a) (1) of Rule 485.

o	75 days after filing pursuant to paragraph (a) (2) of Rule 485.

x	On May 1, 2011 pursuant to paragraph (a) (1) of Rule 485.

o	Immediately upon filing pursuant to paragraph (b) of Rule 485.

o	On [ ] pursuant to paragraph (b) of Rule 485.

If appropriate, check the following box:

o This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Transamerica Partners Portfolios also executed this registration statement.

Transamerica Partners Institutional Funds Group

Transamerica Institutional Asset Allocation Funds

Prospectus

May 1, 2011

Fund

Ticker


Transamerica Partners Institutional Balanced	DIBFX
Transamerica Partners Institutional Core Bond	DICBX
Transamerica Partners Institutional High Quality Bond	DIHQX
Transamerica Partners Institutional High Yield Bond	DIHYX
Transamerica Partners Institutional Inflation-Protected Securities	DIIGX
Transamerica Partners Institutional International Equity	DIIEX
Transamerica Partners Institutional Large Core	DIGIX
Transamerica Partners Institutional Large Growth	DIEGX
Transamerica Partners Institutional Large Value	DIVIX
Transamerica Partners Institutional Mid Growth	DIMGX
Transamerica Partners Institutional Mid Value	DIMVX
Transamerica Partners Institutional Money Market	DFINX
Transamerica Partners Institutional Small Core	DISEX
Transamerica Partners Institutional Small Growth	DISGX
Transamerica Partners Institutional Small Value	DIVSX
Transamerica Partners Institutional Stock Index	DISFX
Transamerica Institutional Asset Allocation – Intermediate Horizon	DIIHX
Transamerica Institutional Asset Allocation – Intermediate/Long Horizon	DILHX
Transamerica Institutional Asset Allocation – Long Horizon	DILSX
Transamerica Institutional Asset Allocation – Short Horizon	DISHX
Transamerica Institutional Asset Allocation – Short/Intermediate Horizon	DIHSX

Each of the above funds (except for the Transamerica Institutional Asset Allocation funds) invests in securities through an underlying mutual fund having the same investment goals and strategies.


	Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.


Not insured by FDIC or any federal government agency.	May lose value.	Not a deposit of or guaranteed by any bank, bank affiliate, or credit union.

MPPINS0510

TABLE OF CONTENTS


Transamerica Partners Institutional Balanced	1
Transamerica Partners Institutional Core Bond	8
Transamerica Partners Institutional High Quality Bond	14
Transamerica Partners Institutional High Yield Bond	20
Transamerica Partners Institutional Inflation-Protected Securities	25
Transamerica Partners Institutional International Equity	31
Transamerica Partners Institutional Large Core	35
Transamerica Partners Institutional Large Growth	39
Transamerica Partners Institutional Large Value	43
Transamerica Partners Institutional Mid Growth	48
Transamerica Partners Institutional Mid Value	53
Transamerica Partners Institutional Money Market	57
Transamerica Partners Institutional Small Core	61
Transamerica Partners Institutional Small Growth	66
Transamerica Partners Institutional Small Value	70
Transamerica Partners Institutional Stock Index	74
Transamerica Institutional Asset Allocation – Intermediate Horizon	78
Transamerica Institutional Asset Allocation – Intermediate/Long Horizon	83
Transamerica Institutional Asset Allocation – Long Horizon	88
Transamerica Institutional Asset Allocation – Short Horizon	93
Transamerica Institutional Asset Allocation – Short/Intermediate Horizon	98
More on the Funds’ Strategies and Investments	103
More on Risks of Investing in the Funds	105
Financial Highlights	124
Asset Allocation Funds	125

Transamerica Partners Institutional Balanced

Investment Objective: Seeks to provide a high total investment return through investments in a broadly diversified portfolio of stocks, bonds and money market instruments.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.

Example: This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000. The Example also assumes that your investment has a 5% return each year and that the fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


1 year	3 years	5 years	10 years
$	$	$	$

Portfolio Turnover: The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the fund's performance. During the most recent fiscal year, the portfolio turnover rate was % of the average value of the fund's portfolio.

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund has two sub-advisers. J.P. Morgan Investment Management Inc. (“JPMorgan”) manages the equity component of the fund and BlackRock Financial Management, Inc. (“BlackRock”) manages the fixed-income component of the fund.

The fund varies the percentage of assets invested in any one type of security in accordance with its sub-advisers’ interpretation of economic and market conditions, fiscal and monetary policy, and underlying securities values. Generally, the fund invests approximately 60% of its assets in equity securities and 40% of its assets in fixed income and money market securities (investing at least 25% of its assets in fixed-income senior securities, including debt securities and preferred stocks).

Equity component - The equity component of the fund is normally invested primarily in equity securities of large- and medium-capitalization U.S. companies, but may invest in foreign companies included in the S&P 500 Index. Industry by industry, the fund's weightings are generally similar to those of the S&P 500 Index. The fund's sub-adviser normally does not look to overweight or underweight industries. Holdings by industry sector will normally approximate those of the S&P 500 Index. Within each industry, the fund's sub-adviser modestly may overweight stocks that it views as undervalued or fairly valued while modestly underweighting or not holding stocks that it views as overvalued.

Fixed income component - The fixed income component of the fund is normally invested primarily in investment grade debt securities and U.S. government obligations, mortgage-backed securities guaranteed by U.S. government agencies and instrumentalities and mortgage-backed securities without government guarantees. Its dollar-weighted average effective maturity generally is between five and fifteen years (and does not exceed thirty years). The fund may also invest in U.S. Treasury and agency securities, municipal bonds, corporate bonds, asset-backed securities (including collateralized loan obligations, collateralized bond obligations and collateralized debt obligations), high quality, short-term obligations and repurchase agreements, and in securities of foreign issuers. The fund may invest in securities that are denominated in U.S. dollars and in foreign currencies. Up to 20% of the fixed income component may be invested in any or all of non-dollar securities, high yield debt securities and emerging market securities.

The fund may, but is not required to, engage in certain investment strategies involving derivatives, such as options, futures, swaps, and forward currency contracts. These investment strategies may be employed to attempt to alter investment characteristics of the fund's portfolio.

The fund may invest its assets in cash, cash equivalent securities or short-term debt securities, repurchase agreements and money market securities. Under adverse or unstable market, economic or political conditions, the fund may take temporary defensive positions in cash and short-term debt securities without limit.

Principal Risks: Many factors affect the fund's performance. There is no assurance the fund will meet its investment objective. The value of your investment in the fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in the fund or your investment may not perform as well as other similar investments. The following is a summary of certain risks (in alphabetical order) of investing in the fund. You may lose money if you invest in this fund.

· Active Trading – Certain funds are actively managed and, under appropriate circumstances, may purchase and sell securities without regard to the length of time held. A high portfolio turnover rate may have a negative impact on performance by increasing transaction costs and may generate greater tax liabilities for shareholders holding shares in taxable accounts.

· Asset-Backed Securities – Asset-backed securities represent participation in, or are secured by and payable from, assets such as installment sales or loan contracts, leases, credit card receivables and other categories of receivables. Certain asset-backed securities present a heightened level of risk because, in the event of default, the liquidation value of the underlying assets may be inadequate to pay any unpaid principal or interest. The value of asset-backed securities may be affected by changes in credit quality or value of the assets that support the securities.

· Cash Management and Defensive Investing – Money market instruments or short-term debt securities held by the fund for cash management or defensive investing purposes can fluctuate in value. Like other fixed income securities, they are subject to risk, including market, interest rate and credit risk. If the fund holds cash uninvested, the fund will not earn income on the cash and the fund's yield will go down. If a significant amount of the fund's assets are used for cash management or defensive investing purposes, it will be more difficult for the fund to achieve its objective.

· Credit – If an issuer or guarantor of a security held by the fund or a counterparty to a financial contract with the fund defaults or is downgraded, or if the value of the assets underlying a security declines, the value of your investment will decline. Junk bonds have a higher risk of default and are considered speculative. A default or downgrade will have a greater impact on subordinated securities.

· Currency – When the fund invests in securities denominated in foreign currencies, the fund may incur currency conversion costs and may be affected favorably or unfavorably by changes in the rates of exchange between those currencies and the U.S. dollar. Currency exchange rates can be volatile and are affected by, among other factors, the general economics of a country, the actions of the U.S. and foreign governments or control banks, the imposition of currency controls, and speculation.

· Derivatives – Using derivatives can increase fund losses and reduce opportunities for gains when market prices, interest rates or the derivative instruments themselves behave in a way not anticipated by the fund. Using derivatives also can have a leveraging effect and increase fund volatility. Derivatives may be difficult to sell, unwind or value, and the counterparty may default on its obligations to the fund. The fund's investments in derivative instruments may involve a small investment relative to the amount of investment exposure assumed and may result in losses exceeding the amounts invested in those instruments. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation are not yet fully known and may not be known for some time. New regulation of derivatives may make them more costly, may limit their availability, or may otherwise adversely affect their value or performance.

· Emerging Markets – Investing in the securities of issuers located in or principally doing business in emerging markets are subject to foreign securities risks. These risks are greater for investments in emerging markets. Emerging market countries tend to have economic, political and legal systems that are less fully developed and are less stable than those of more advanced countries. Low trading volumes may result in a lack of liquidity and in extreme price volatility.

· Fixed-Income Securities – The market prices of fixed-income securities may go up or down, sometimes rapidly or unpredictably due to general market conditions, such as real or perceived adverse economic or political conditions, inflation, changes in interest rates, lack of liquidity in the bond markets or adverse investor sentiment. When market prices fall, the value of your investment will go down. A rise in rates tends to have a greater impact on the prices of longer term or duration securities.

If interest rates rise, repayments of fixed-income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. This is sometimes referred to as extension risk.

Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. This is sometimes referred to as prepayment or call risk.

· Foreign Securities – Foreign securities are subject to a number of additional risks, including nationalization or expropriation of assets, imposition of currency controls or restrictions, confiscatory taxation, political or financial instability and other adverse economic or political developments. Lack of information and less market regulation also may affect the value of these securities.

· Growth Stocks – Returns on growth stocks may not move in tandem with returns on other categories of stocks or the market as a whole. Growth stocks may be particularly susceptible to rapid price swings or to adverse developments. Growth stocks as a group may be out of favor and underperform the overall equity market for a long period of time, for example, while the market favors “value” stocks.

· High-Yield Debt Securities – High-yield debt securities, or junk bonds, are securities that are rated below “investment grade” (that is, securities rated below Baa/BBB) or, if unrated, are considered by the sub-adviser to be of equivalent quality. Changes in interest rates, the market’s perception of the issuers and the creditworthiness of the issuers may significantly affect the value of these bonds. Junk bonds have a higher risk of default, tend to be less liquid and may be more difficult to value.

· Increase in Expenses – Your actual costs of investing in the fund may be higher than the expenses shown in “Annual Fund Operating Expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile.

· Inflation-Protected Securities – Inflation-protected debt securities may react differently from other types of debt securities and tend to react to changes in “real” interest rates. Real interest rates represent nominal (stated) interest rates reduced by the expected impact of inflation. In general, the price of an inflation-protected debt security can fall when real interest rates rise, and can rise when real interest rates fall. Interest payments on inflation-protected debt securities can be unpredictable and will vary as the principal and/or interest is adjusted for inflation. Also, the inflation index utilized by a particular inflation-protected security may not accurately reflect the true rate of inflation, in which case the market value of the security could be adversely affected.

· Interest Rate – Fixed-income securities have varying levels of sensitivity to changes in interest rates. In general, the price of a fixed-income security tends to fall when interest rates rise and can rise when interest rates fall. A change in interest rates will not have the same impact on all fixed-income securities. Generally, the longer the maturity or duration of a fixed-income security, the greater the impact of a rise in interest rates on the security’s value. In addition, different interest rate measures (such as short- and long-term interest rates and U.S. and foreign interest rates), or interest rates on different types of securities or securities of different issuers, may not necessarily change in the same amount or in the same direction. When interest rates go down, the income received by the fund, and the fund’s yield, may decline.

· Liquidity – Some securities held by the fund may be difficult to sell, or illiquid, particularly during times of market turmoil. Illiquid securities may also be difficult to value. If the fund is forced to sell an illiquid asset to meet redemption requests or other cash needs, the fund may be forced to sell at a loss.

· Loans – Loans are subject to the credit risk of nonpayment of principal or interest. Economic downturns or increases in interest rates may cause an increase in defaults, interest rate risk and liquidity risk. Loans may or may not be collateralized at the time of acquisition, and any collateral may be relatively illiquid or lose all or substantially all of its value subsequent to investment. In the event of bankruptcy of a borrower, the fund could experience delays or limitations with respect to its ability to realize the benefits of any collateral securing a loan. The fund's investments in loans are also subject to prepayment or call risk.

· Market – The market prices of the fund's securities may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic or political conditions, inflation, changes in interest rates or currency rates, lack of liquidity in the markets or adverse investor sentiment. Market prices of securities also may go down due to events or conditions that affect particular sectors or issuers. When market prices fall, the value of your investment will go down. The fund may experience a substantial or complete loss on any individual security. The recent financial crisis has caused a significant decline in the value and liquidity of many securities. In response to the financial crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support could negatively affect the value and liquidity of certain securities. In addition, legislation

recently enacted in the U.S. calls for changes in many aspects of financial regulation. The impact of the legislation on the markets, and the practical implications for market participants, may not be fully known for some time.

· Medium-Sized Companies – Investing in medium-sized companies involves greater risk than is customarily associated with more established companies. Stocks of such companies generally are subject to more volatility in price than larger company securities.

· Mortgage-Related Securities – Mortgage-backed securities may be issued by private issuers, by government-sponsored entities such as Fannie Mae or Freddie Mac or by agencies of the U.S. government, such as Ginnie Mae. Mortgage-backed securities represent direct or indirect participations in, or are collateralized by and payable from, mortgage loans secured by real property. Unlike mortgage-related securities issued or guaranteed by agencies of the U.S. government or government-sponsored entities, mortgage-related securities issued by private issuers do not have a government or government-sponsored entity guarantee (but may have other credit enhancement), and may, and frequently do, have less favorable collateral, credit risk or other underwriting characteristics. Mortgage-backed securities are also particularly susceptible to prepayment and extension risks. Asset-backed securities represent participations in, or are secured by and payable from, assets such as installment sales or loan contracts, leases, credit card receivables and other categories of receivables. Certain asset-backed securities present a heightened level of risk because, in the event of default, the liquidation value of the underlying assets may be inadequate to pay any unpaid principal or interest. The value of mortgage-backed and asset-backed securities may be affected by changes in credit quality or value of the mortgage loans or other assets that support the securities.

· Portfolio Selection – The sub-adviser’s judgment about a particular security or issuer, or about the economy or a particular sector, region or market segment, or about an investment strategy, may prove to be incorrect.

· Preferred Stock – Preferred stock’s right to dividends and liquidation proceeds is junior to the rights of a company’s debt securities. The value of preferred stock may be subject to factors that affect fixed income and equity securities, including changes in interest rates and in a company’s creditworthiness. Shareholders of preferred stock may suffer a loss of value if dividends are not paid and have limited voting rights.

· Repurchase Agreements – If the other party to a repurchase agreement defaults on its obligation, the fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security and the market value declines, the fund could lose money. If the seller becomes insolvent and subject to liquidation or reorganization under applicable bankruptcy or other laws, the fund's ability to dispose of the underlying securities may be restricted.

· Securities Lending – Securities lending involves the risk that the borrower may fail to return the securities in a timely manner or at all. As a result, the fund may lose money and there may be a delay in recovering the loaned securities. The fund could also lose money if it does not recover the securities and/or the value of the collateral falls, including the value of investments made with cash collateral.

· Stocks – Stocks may be volatile – their prices may go up and down dramatically over the shorter term. These price movements may result from factors affecting individual companies, industries, the securities market as a whole or the over-all economy.

· U.S. Government Agency Obligations – Government agency obligations have different levels of credit support and, therefore, different degrees of credit risk. Securities issued by agencies and instrumentalities of the U.S. government that are supported by the full faith and credit of the United States generally present a lesser degree of credit risk than securities issued by agencies and instrumentalities sponsored by the U.S. government that are supported only by the issuer’s right to borrow from the U.S. Treasury and securities issued by agencies and instrumentalities sponsored by the U.S. government that are supported only by the credit of the issuing agencies.

· Valuation – The sales price the fund could receive for any particular portfolio investment may differ from the fund's valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair value methodology.

· Value Investing – The prices of securities the sub-adviser believes are undervalued may not appreciate as anticipated or may go down. Value stocks as a group may be out of favor and underperform the overall equity market for a long period of time, for example, while the market favors “growth” stocks.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance, as well as comparison to a secondary index which has characteristics relevant to the fund's investment strategies. As with all mutual funds, past performance (before and after taxes) is

not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Balanced (commenced operations on September 11, 2000)	%	%	%
Barclays Capital U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)	%	%	%
Standard & Poor's 500 Composite Stock Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. BlackRock Financial Management, Inc.

Portfolio Managers:

Matthew Marra, Portfolio Manager since 2010

Eric Pellicciaro, Portfolio Manager since 2010

Rick Rieder, Portfolio Manager since 2010

Sub-Adviser:

J.P. Morgan Investment Management Inc.

Portfolio Managers:

Scott Blasdell, CFA, Portfolio Manager since 2010

Terance Chen, Portfolio Manager since 2010

Raffaele Zingone, CFA, Portfolio Manager since 2010

Purchase and Sale of Fund Shares: Shares of the fund are available to individual and institutional investors through certain retirement plans. These plans include, but are not limited to, 401(k), 403(b) and 457 Plans, Money Purchase Plans, Profit Sharing Plans, Simplified Employee Pension Plans, Keogh Plans, defined benefit plans, nonqualified deferred compensation plans and IRAs. Shares may be purchased through a plan administrator, recordkeeper or authorized financial intermediary. If you are a participant in a plan, you should obtain the plan’s conditions for participation from your plan administrator. You may purchase shares of the fund on any day the New York Stock Exchange is open for business. Requests to purchase shares for the fund should be mailed to Transamerica Fund Services, Inc., P.O. Box 219945, Kansas City, MO 64121-9945. Participants in retirement plans administered by Diversified Investment Advisors should contact Diversified at 1-800-755-5801 for additional information. If you would like to purchase shares in a fund by a wire transfer, please call 1-888-233-4339 for wire transfer instructions. You buy and redeem shares at the fund’s next-determined net asset value (NAV) after receipt of your request in good order. The minimum initial investment is $5,000. The fund is currently waiving this minimum. There is no minimum for subsequent investments. A retirement plan may, however, impose minimum investment requirements. Plan participations or IRA holders should consult their plan administrator, recordkeeper or authorized financial intermediary.

you authorized telephone redemptions on your Account Application. The fund reserves the right to refuse telephone redemptions and may limit the number of telephone redemptions or the amount that can be redeemed by telephone at any time.

Tax Information: Fund distributions may be taxable as ordinary income or capital gains, except when your investment is in an IRA, 401(k) or other tax-advantaged investment plan. Distributions received by such a plan are currently exempt from tax. Distributions from the plan to the plan participant are taxable of ordinary income.

Payments to Broker-Dealers and Other Financial Intermediaries: If you purchase the fund through a broker-dealer or other financial intermediary, the fund and/or its affiliates may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

Transamerica Partners Institutional Core Bond

Investment Objective: Seeks to achieve maximum total return.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.

^b Contractual arrangements have been made with the fund’s investment adviser, Transamerica Asset Management, Inc. (“TAM”), through May 1, 2017 to waive fees and/or reimburse fund expenses to the extent that the total operating expenses exceed 0.65%, excluding extraordinary expenses.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in investment grade debt securities and U.S. government obligations, mortgage-backed securities guaranteed by U.S. government agencies and instrumentalities and mortgage-backed securities without government guarantees. Under normal circumstances, the fund invests at least 80% of its net assets in bonds and related investments.

The fund may also invest in U.S. Treasury and agency securities, municipal bonds, corporate bonds, asset-backed securities (including collateralized loan obligations (“CLO”s), collateralized bond obligations (“CBO”s) and collateralized debt obligations (“CDO”s)), high quality, short-term obligations and repurchase agreements, and in securities of foreign issuers. The fund may invest in securities that are denominated in U.S. dollars and in foreign currencies. The fund may invest up to 20% of its net assets in any or all of non-dollar securities, high-yield debt securities and emerging market securities.

Investment grade debt securities carry a rating of at least BBB from Standard & Poor’s or Fitch or Baa from Moody’s or are of comparable quality as determined by the fund’s sub-adviser. Under normal circumstances, the fund invests at least 65% of its net assets in investment grade securities.

The fund’s dollar-weighted average effective maturity generally is between five and fifteen years (and does not exceed thirty years), under normal circumstances. While longer-term securities tend to have higher yields than short-term securities, they are subject to greater price fluctuations as a result of interest rate changes and other factors.

The portfolio managers use both “top down” and “bottom up” analysis to determine sector, security and duration positions for the fund. These three factors are jointly determined and are interdependent. The overall position in the corporate sector, for example, is established in conjunction with assessments of relative value for specific corporate securities. Extensive bottom up analysis using a variety of valuation tools is conducted for sector allocation and security selection. Duration policy is primarily a result of sector allocations and expected long-term interest rate trends (rather than short-term interest rate forecasting). Yield curve positioning is also a key aspect of duration management. Security sales decisions are driven by the same criteria as purchase decisions.

The fund may use derivatives such as options, futures, swaps and forward currency contracts. The fund generally uses derivatives to attempt to alter investment characteristics of the fund’s portfolio, but they also may be used to generate income.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Core Bond (commenced operations on September 11, 2000)	%	%	%
Barclays Capital U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. BlackRock Financial Management, Inc.

Portfolio Managers:

Matthew Marra, Portfolio Manager since 2007

Eric Pellicciaro, Portfolio Manager since 2010

Rick Rieder, Portfolio Manager since 2010

Redemption requests may be made by mail and, in certain circumstances, telephone. The proceeds of the redemption will be sent by mail or, if authorized on the Account Application, wire transfer. Requests to redeem shares of the fund should be mailed to Transamerica Fund Services, Inc., P.O. Box 219945, Kansas City, MO 64121-9945. You may redeem shares by telephone if you authorized telephone redemptions on your Account Application. The fund reserves the right to refuse telephone redemptions and may limit the number of telephone redemptions or the amount that can be redeemed by telephone at any time.

Transamerica Partners Institutional High Quality Bond

Investment Objective: Seeks to provide a high risk-adjusted return while focusing on the preservation of capital.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in high quality debt securities with short and intermediate maturities, such as corporate bonds and notes, mortgage-backed and asset-backed securities, U.S. Treasury and government agency obligations, securities of foreign issuers (such as Yankee bonds) and repurchase agreements. Under normal circumstances, the fund invests at least 80% of its net assets in high quality bonds and related investments.

The dollar-weighted average effective maturity of the fund generally does not exceed three years under normal circumstances. Individual securities held by the fund may have longer maturities. Short-term debt securities generally fluctuate less in price, and have lower yields, than longer-term securities of comparable quality. The fund’s duration generally is between one and three years. Duration is a way of measuring the fund’s overall sensitivity to interest rate fluctuations. The net asset value of a fund with a shorter duration will generally fluctuate less in response to interest rate changes than that of a fund with a longer duration.

The fund considers securities rated BBB- or better by Standard & Poor’s or Fitch or Baa3 or better by Moody’s (and securities that the fund’s sub-adviser believes are of comparable quality) to be high quality. Investments in higher quality instruments may result in a lower yield than would be available from investments in lower quality instruments.

The portfolio managers of the fund use a “bottom-up” analysis, focusing on the relative value of individual securities. They also analyze the yield curve under multiple market conditions in making maturity and duration decisions for portfolio securities. The managers of the fund then attempt to select securities that will enable the fund to maintain a stable share price and at the same time to achieve a high level of income. The managers use the same bottom-up approach when deciding which securities to sell. Securities are sold when the fund needs cash to meet redemptions, or when the managers believe that better opportunities exist or that particular securities no longer fit within the overall strategy for achieving the fund’s goal.

and other adverse economic or political developments. Lack of information and less market regulation also may affect the value of these securities.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional High Quality Bond (commenced operations on September 11, 2000)	%	%	%
Bank of America Merrill Lynch 1-3 Year Government/Corporate Bond Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Merganser Capital Management, Inc.

Portfolio Managers:

Peter S. Kaplan, Portfolio Manager since 1990

Douglas A. Kelly, Portfolio Manager since 1990

Transamerica Partners Institutional High Yield Bond

Investment Objective: Seeks to provide a high level of current income.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in high-yielding, income producing debt securities, such as debentures and notes, loan participations, and in convertible and non-convertible preferred stocks. Under normal circumstances, the fund invests at least 80% of its net assets in high-yield bonds and related investments.

High-yield securities usually are debt securities that are below-investment grade, commonly referred to as “junk bonds.” Below-investment grade debt securities offer yields that fluctuate over time, but that generally are superior to the yields offered by higher-rated securities. However, these securities also involve significantly greater risks, including price volatility and risk of default in the payment of interest and principal, than higher-rated securities. The fund considers securities rated BB or lower by Standard & Poor’s and Fitch and Ba or lower by Moody’s (and comparable unrated securities) to be high-yield securities.

The fund may invest a portion of its assets in foreign securities, which are predominantly U.S. dollar denominated. With respect to non-dollar denominated securities, the fund may hedge currency fluctuations by entering into options on futures contracts, forward foreign currency contracts and options on foreign currencies.

The fund’s investments are actively managed and securities may be bought and sold on a daily basis. Although the sub-adviser considers security ratings when making investment decisions, it performs its own credit and investment analysis and does not rely primarily on the ratings assigned by the rating services. The sub-adviser’s staff monitors the credit quality of securities held by the fund and other securities available to the fund. The portfolio managers attempt to improve yield and preserve and enhance principal value through timely trading. The portfolio managers also consider the relative value of securities in the marketplace in making investment decisions.

The fund may also invest in (i) securities that are in default or in bankruptcy, (ii) securities that pay no interest, deferred interest or interest in the form of additional debt securities, (iii) interests in senior floating rate loans of domestic or foreign borrowers and in secured and unsecured subordinated loans, second lien loans, and subordinated bridge loans, (iv) mortgage-related securities, and (v) equity securities, including common stocks, warrants and rights. Investors should carefully consider the special risks of investing in this fund.

· Convertible Securities – The market value of convertible securities tends to decline as interest rates increase. Convertible securities generally offer lower interest or dividend yields than non-convertible securities of similar quality. The fund could lose money if the issuer of a convertible security is unable to meet its financial obligations or goes bankrupt.

risk or other underwriting characteristics. Mortgage-backed securities are also particularly susceptible to prepayment and extension risks. Asset-backed securities represent participations in, or are secured by and payable from, assets such as installment sales or loan contracts, leases, credit card receivables and other categories of receivables. Certain asset-backed securities present a heightened level of risk because, in the event of default, the liquidation value of the underlying assets may be inadequate to pay any unpaid principal or interest. The value of mortgage-backed and asset-backed securities may be affected by changes in credit quality or value of the mortgage loans or other assets that support the securities.

· Warrants and Rights – Warrants and rights may be considered more speculative than certain other types of investments because they do not entitle a holder to the dividends or voting rights for the securities that may be purchased. They do not represent any rights in the assets of the issuing company, and cease to have value if not exercised prior to the expiration date.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional High Yield Bond (commenced operations on September 11, 2000)	%	%	%
Bank of America Merrill Lynch High Yield Master II Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Eaton Vance Management

Portfolio Managers:

Linda Carter, Portfolio Manager since 2000

Michael W. Weilheimer, Portfolio Manager since 2000

Transamerica Partners Institutional Inflation-Protected Securities

Investment Objective: Seeks maximum real return consistent with the preservation of capital.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%^(c)
Total annual fund operating expenses after expense reduction	%^(c)

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.

c Includes reimbursement of fees at the underlying fund level.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in inflation-protected securities issued by the U.S. government, its agencies and instrumentalities. The fund also invests in inflation-protected securities of U.S. issuers, foreign governments, and other foreign issuers. Under normal circumstances, the fund invests at least 80% of its net assets in inflation-protected securities and related investments.

The fund may also invest in securities that pay nominal rates of interest (i.e., that are not inflation-protected), including U.S. Treasury and agency securities, corporate bonds, asset-backed securities, mortgage-backed securities, floating rate securities, high quality, short-term obligations, and repurchase agreements. The fund may invest in securities that are denominated in U.S. dollars and in foreign currencies.

The fund invests primarily in investment-grade securities, but may also invest in lower quality securities. The fund may not invest more than 10% of its net assets in below investment-grade securities (commonly referred to as “junk bonds”). Investment grade debt securities carry a rating of at least BBB from Standard & Poor’s or Fitch or Baa from Moody’s or are of comparable quality as determined by the fund’s sub-adviser.

The fund seeks to maintain an average portfolio duration that is within ±20% of the duration of the Barclays Capital U.S. TIPS Index, an index of inflation-protected securities. As of March 31, 2011, the duration of the index was [ ] years. The fund may invest in securities of any maturity.

The portfolio managers of the fund use both “top down” and “bottom up” analysis to determine security and duration positions for the fund. These factors are jointly determined and are interdependent. Security sales decisions are driven by the same criteria as purchase decisions.

and other adverse economic or political developments. Lack of information and less market regulation also may affect the value of these securities.

installment sales or loan contracts, leases, credit card receivables and other categories of receivables. Certain asset-backed securities present a heightened level of risk because, in the event of default, the liquidation value of the underlying assets may be inadequate to pay any unpaid principal or interest. The value of mortgage-backed and asset-backed securities may be affected by changes in credit quality or value of the mortgage loans or other assets that support the securities.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Prior to May 1, 2007, the fund had a different investment objective and strategy and was named Diversified Investors Intermediate Government Bond Fund. The fund's performance prior to May 1, 2007 does not necessarily represent results that would have been obtained had the current investment objective and strategy been in effect for all periods.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Inflation-Protected Securities (commenced operations on September 11, 2000)	%	%	%
Barclays Capital U.S. TIPS Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. BlackRock Financial Management, Inc.

Portfolio Managers:

Martin Hegarty, Portfolio Manager since 2010

Stuart Spodek, Portfolio Manager since 2007

Brian Weinstein, Portfolio Manager since 2007

Transamerica Partners Institutional International Equity

Investment Objective: Seeks to provide a high level of long-term capital appreciation through investments in a diversified portfolio of securities of foreign issuers.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in foreign securities, meaning securities of issuers that, in the opinion of the fund’s sub-adviser, have their principal activities outside the United States or whose securities are traded primarily outside the United States. Under normal circumstances, the fund invests at least 75% of its net assets in foreign securities or depositary receipts of foreign securities. The fund invests in equity securities of issuers in at least three countries other than the United States. The fund may invest in securities of issuers in developing countries. Under normal market circumstances, the fund invests at least 80% of its net assets in equity securities and related investments. The fund may also invest in any type or quality of debt securities, including lower-rated securities, and may enter into forward currency exchange contracts for hedging purposes.

The fund may invest in companies of any size, but typically invests primarily in the large and middle range of public company market capitalizations. The fund may also invest in partnership interests. The fund’s sub-adviser invests on an opportunistic basis, where the sub-adviser believes there is intrinsic value. The portfolio typically includes basic value stocks and stocks that, in the sub-adviser’s opinion, provide value in a broader or different context, including the stocks of companies with consistent earnings characteristics and those of emerging franchises, when these issues are value priced. Securities are sold when the fund needs cash to meet redemptions, or when the sub-adviser believes that better opportunities exist or that particular securities no longer fit within the overall strategy for achieving the fund’s goal.

investment may not perform as well as other similar investments. The following is a summary of certain risks (in alphabetical order) of investing in the fund. You may lose money if you invest in this fund.

affect the value of these bonds. Junk bonds have a higher risk of default, tend to be less liquid and may be more difficult to value.

· Small- or Medium-Sized Companies – Small- or medium-sized companies may be more at risk than larger companies because, among other things, they may have limited product lines, operating history, market or financial resources, or because they may depend on a limited management group.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional International Equity (commenced operations on September 11, 2000)	%	%	%
Morgan Stanley Capital International All Country World ex-U.S. Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Thornburg Investment Management, Inc.

Portfolio Managers:

William V. Fries, CFA, Co-Portfolio Manager since 2009

Wendy Trevisani, Co-Portfolio Manager since 2009

Lei Wang, CFA, Co-Portfolio Manager since 2009

Transamerica Partners Institutional Large Core

Investment Objective: Seeks to provide capital appreciation and current income.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in securities selected in large part for their potential to generate long-term capital appreciation. The fund may also select securities based on their potential to generate current income. The fund emphasizes common stocks and securities of growing, financially stable and undervalued companies. Under normal circumstances, the fund invests at least 80% of its net assets in securities of large cap companies and related investments. The fund considers large cap companies to be companies with market capitalizations that, at the time of initial purchase, exceed the market capitalization of the smallest company included in the Russell 1000^{^®} Index. As of March 31, 2011, the market capitalization of the smallest company in the Russell 1000^{^®} Index was $[ ] million. This fund attempts to achieve more capital appreciation than an income fund and less price volatility than a growth fund. The fund emphasizes common stocks and preferred stocks listed on the New York Stock Exchange and on other national securities exchanges and, to a lesser extent, stocks that are traded over-the-counter.

The withdrawal of this support could negatively affect the value and liquidity of certain securities. In addition, legislation recently enacted in the U.S. calls for changes in many aspects of financial regulation. The impact of the legislation on the markets, and the practical implications for market participants, may not be fully known for some time.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Large Core (commenced operations on September 11, 2000)	%	%	%
Russell 1000^{^®} Index (reflects no deduction for fees, expenses or taxes)	%	%	%
Standard & Poor's 500 Composite Stock Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Aronson Johnson Ortiz, LP

Portfolio Managers:

Theodore R. Aronson, Portfolio Manager since 2009

Stefani Cranston, Portfolio Manager since 2009

Gina Marie N. Moore, Portfolio Manager since 2009

Martha E. Ortiz, Portfolio Manager since 2009

R. Brian Wenzinger, Portfolio Manager since 2009

Christopher J. W. Whitehead, Portfolio Manager since 2009

Transamerica Partners Institutional Large Growth

Investment Objective: Seeks to provide a high level of capital appreciation through investments in a diversified portfolio of common stocks with a potential for above-average growth in earnings. Current income is a secondary goal.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in common stocks of companies that its sub-advisers believe have the potential for above average growth in earnings and dividends. Under normal circumstances, the fund invests at least 80% of its net assets in equity securities of large cap companies and related investments. The fund considers large cap companies to be companies with market capitalizations that, at the time of initial purchase, exceed the market capitalization of the smallest company included in the Russell 1000^{^®} Index. As of March 31, 2011, the market capitalization of the smallest company in the Russell 1000 Index^{^®} was $[ ] million. The fund emphasizes common and preferred stocks listed on the New York Stock Exchange and other national securities exchanges and, to a lesser extent, stocks that are traded over-the-counter. The fund uses multiple sub-advisers to try to control the volatility often associated with growth funds, but there can be no assurance that this strategy will succeed.

The fund may use derivatives such as options, futures and swaps. The fund generally uses derivatives to attempt to alter investment characteristics of the fund’s portfolio, but they also may be used to generate income.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Large Growth (commenced operations on September 11, 2000)	%	%	%
Russell 1000^{^®} Growth Index (reflects no deduction for fees, expenses or taxes)	%	%	%
Standard & Poor's 500 Composite Stock Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Jennison Associates LLC

Portfolio Managers:

Blair A. Boyer, Portfolio Manager since 2009

Michael A. Del Balso, Portfolio Manager since 2009

Spiros “Sig” Segalas, Portfolio Manager since 2009

Sub-Adviser:

Wellington Management Company, LLP

Portfolio Manager:

Paul E. Marrkand, CFA, Portfolio Manager since 2007

compensation plans and IRAs. Shares may be purchased through a plan administrator, recordkeeper or authorized financial intermediary. If you are a participant in a plan, you should obtain the plan’s conditions for participation from your plan administrator. You may purchase shares of the fund on any day the New York Stock Exchange is open for business. Requests to purchase shares for the fund should be mailed to Transamerica Fund Services, Inc., P.O. Box 219945, Kansas City, MO 64121-9945. Participants in retirement plans administered by Diversified Investment Advisors should contact Diversified at 1-800-755-5801 for additional information. If you would like to purchase shares in a fund by a wire transfer, please call 1-888-233-4339 for wire transfer instructions. You buy and redeem shares at the fund’s next-determined net asset value (NAV) after receipt of your request in good order. The minimum initial investment is $5,000. The fund is currently waiving this minimum. There is no minimum for subsequent investments. A retirement plan may, however, impose minimum investment requirements. Plan participations or IRA holders should consult their plan administrator, recordkeeper or authorized financial intermediary.

Transamerica Partners Institutional Large Value

Investment Objective: Seeks to provide long-term capital appreciation through investments in a diversified portfolio of common stocks of large-capitalization companies. Current income is a secondary goal.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in issuers listed on U.S. exchanges that the fund’s sub-adviser believes are seasoned, liquid and low priced, with effective management and positive momentum. Under normal circumstances, the fund invests at least 80% of its net assets in securities of large-cap companies and related investments. The fund considers large cap companies to be companies with market capitalizations that, at the time of initial purchase, exceed the market capitalization of the smallest company included in the Russell 1000^{^®} Index. As of March 31, 2011, the market capitalization of the smallest company in the Russell 1000^{^®} Index was $[ ] million.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Large Value (commenced operations on September 11, 2000)	%	%	%
Russell 1000^{^®} Value Index (reflects no deduction for fees, expenses or taxes)	%	%	%
Standard & Poor's 500 Composite Stock Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Aronson Johnson Ortiz, LP

Portfolio Managers:

Theodore R. Aronson, Portfolio Manager since 2009

Stefani Cranston, Portfolio Manager since 2009

Gina Marie N. Moore, Portfolio Manager since 2009

Martha E. Ortiz, Portfolio Manager since 2009

R. Brian Wenzinger, Portfolio Manager since 2009

Christopher J. W. Whitehead, Portfolio Manager since 2009

services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

Transamerica Partners Institutional Mid Growth

Investment Objective: Seeks to provide a high total investment return through investments primarily in a diversified portfolio of common stocks.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in stocks of medium sized companies which the fund’s sub-adviser believes have the potential to deliver earnings growth in excess of the market average, or to become market leaders. When identifying companies that may become market leaders, one of the factors the fund’s sub-adviser considers is whether a company sells proprietary products or services and/or operates in an industry with high barriers to entry such as the telecommunications industry. The fund does not intend, however, to concentrate its investments in any particular industry. Under normal circumstances, the fund invests at least 80% of its net assets in securities of medium sized (or mid-cap) companies and related investments. This fund considers mid-cap companies to be companies with market capitalizations that, at the time of initial purchase, are within the range of capitalization of the companies that are included in the Russell Midcap^® Growth Index. As of March 31, 2011, the market capitalizations of companies in the Russell Midcap^® Growth Index ranged from approximately $[ ] million to $[ ] billion. Over time, the capitalizations of the companies in the Russell Midcap^® Growth Index will change. As they do, the size of the companies in which the fund invests may change.

will go down. The fund may experience a substantial or complete loss on any individual security. The recent financial crisis has caused a significant decline in the value and liquidity of many securities. In response to the financial crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support could negatively affect the value and liquidity of certain securities. In addition, legislation recently enacted in the U.S. calls for changes in many aspects of financial regulation. The impact of the legislation on the markets, and the practical implications for market participants, may not be fully known for some time.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Mid Growth (commenced operations on November 7, 2001)	%	%	%
Russell Midcap^{^®} Growth Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Columbus Circle Investors

Portfolio Managers:

Clifford Fox, Portfolio Manager since 2004

Michael Iacono, Co-Portfolio Manager since 2004

Katerina Wasserman, Co-Portfolio Manager since 2004

Transamerica Partners Institutional Mid Value

Investment Objective: Seeks to provide a high total investment return through investments primarily in a diversified portfolio of common stocks.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund invests primarily in stocks of medium sized companies which the fund’s sub-advisers believe have below market valuations and present an opportunity for earnings improvement. Under normal circumstances, the fund invests at least 80% of its net assets in securities of medium sized (or mid-cap) companies and related investments. The fund considers mid-cap companies to be companies with market capitalizations that, at the time of initial purchase, are within the range of capitalization of the companies that are included in the Russell Midcap^® Value Index. As of March 31, 2011, the market capitalizations of companies in the Russell Midcap^® Value Index ranged from approximately $[ ] million to $[ ] billion. Over time, the capitalizations of the companies in the Index will change. As they do, the size of the companies in which the fund invests may change.

The fund’s equity securities may include common stocks and preferred stocks listed on the New York Stock Exchange and on other national securities exchanges and, to a lesser extent, stocks that are traded over-the-counter. The fund emphasizes common stocks. The fund may also invest in master limited partnerships, although their use will not be a principal investment strategy. The fund may also invest in foreign securities and real estate investment trusts (REITs).

performance by increasing transaction costs and may generate greater tax liabilities for shareholders holding shares in taxable accounts.

· REITs – When the fund invests in Real Estate Investment Trusts (“REITs”), it is subject to risks generally associated with investing in real estate. A REIT’s performance depends on the types and locations of the properties it owns and how well it manages those properties or loan financings. REITs are subject to a highly technical tax structure; and the failure to qualify as a REIT could result in corporate-level taxation, significantly reducing the return on an investment to the fund.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Mid Value (commenced operations on October 11, 2001)	%	%	%
Russell Midcap^{^®} Value Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Cramer, Rosenthal, McGlynn, LLC

Portfolio Managers:

Jay B. Abramson, Portfolio Manager since 2001

Robert L. Rewey, III, Portfolio Manager since 2008

Sub-Adviser:

J.P. Morgan Investment Management Inc.

Portfolio Managers:

Gloria Fu, CFA, Portfolio Manager since 2009

Lawrence Playford, CFA, Portfolio Manager since 2009

Jonathan K. L. Simon, Portfolio Manager since 2009

Transamerica Partners Institutional Money Market

Investment Objective: Seeks to provide liquidity and as high a level of income as is consistent with the preservation of capital.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a,b

Management fees	%
Distribution (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^c	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.

^bAnnual Fund Operating Expenses have been restated to reflect expenses for the current fiscal year.

^c Contractual arrangements have been made with the fund’s investment adviser, Transamerica Asset Management, Inc. (“TAM”), through May 1, 2017 to waive fees and/or reimburse fund expenses to the extent that the total operating expenses exceed 0.50%, excluding extraordinary expenses.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund invests primarily in high quality, short-term money market instruments. These instruments include short-term U.S. government obligations, corporate bonds and notes, bank obligations (such as certificates of deposit and bankers’ acceptances), commercial paper, asset-backed securities, and repurchase agreements. The fund may invest more than 25% of its total assets in obligations of U.S. banks.

Money market instruments in which the fund may invest include instruments specifically structured so that they are eligible for purchase by money market funds, including securities that have demand, tender or put features, or interest rate reset features, and may take the form of participation interests or receipts in an underlying security, in some cases backed by a financial institution serving as a liquidity provider. Some of these instruments may have an interest rate swap feature which substitutes a floating or variable interest rate for the fixed interest rate on an underlying security, or may represent the right to receive only the interest or principal component on the underlying security. These instruments may be considered to be derivatives.

The fund does not maintain a stable net asset value of $1.00 per share. As a money market fund, the fund must follow strict rules as to the credit quality, diversification, liquidity, and maturity of its investments. Each security, at the time of purchase by the fund, has been determined by the sub-adviser to present minimal credit risk. If, after purchase, the credit rating on a security held by the fund is downgraded or the credit quality deteriorates, or if the maturity on a security is extended, the fund’s portfolio managers or Board of Trustees (where required by applicable regulations) will decide whether the security should be held or sold.

Principal Risks: An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Company or any other government agency. There is no assurance that the fund will meet its investment objectives. The fund could underperform other short-term debt instruments or money market funds, or you could lose money. It is possible to lose money by investing in the fund. The following is a summary of certain risks (in alphabetical order) of investing in the fund.

· Bank Obligations – To the extent the fund invests in U.S. bank obligations, the fund will be more susceptible to adverse events affecting the U.S. banking industry. Banks are sensitive to changes in money market and general economic conditions, as well as decisions by regulators that can affect banks’ profitability.

· Credit – An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Subordinated securities will be disproportionately affected by a default or downgrade.

· Interest Rate – The interest rates on short-term obligations held in the fund will vary, rising or falling with short-term interest rates generally. The fund's yield will tend to lag behind general changes in interest rates. The ability of the fund's yield to reflect current market rates will depend on how quickly the obligations in its portfolio mature and how much money is available for investment at current market rates.

· Net Asset Value – The fund does not maintain a stable net asset value of $1.00 per share and does not declare dividends on a daily basis (many money market funds do). Undeclared investment income, or a default on a portfolio security, may cause the fund’s net asset value to fluctuate.

· Redemption – The fund may experience periods of heavy redemptions that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value particularly during periods of declining or illiquid markets. Redemption risk is greater to the extent that the fund has investors with large shareholdings, short investment horizons, or unpredictable cash flow needs. The redemption by one or more large shareholders of their holdings in the fund could have an adverse impact on the remaining shareholders in the fund. In addition, the fund may suspend redemptions when permitted by applicable regulations.

· Yield – The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund's expenses could absorb all or a significant portion of the fund's income. If interest rates increase, the fund's yield may not increase proportionately. For example, TAM or its affiliates may discontinue any temporary voluntary fee limitation or recoup expenses previously forgone or reimbursed.

taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Money Market (commenced operations on September 11, 2000)	%	%	%
Citigroup 3-Month Treasury Bill Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. GE Asset Management, Incorporated

Transamerica Partners Institutional Small Core

Investment Objective: Seeks to provide a high level of capital appreciation through investments in a diversified portfolio of common stocks of small to medium size companies.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in stocks of small to medium sized companies which, in the opinion of the fund’s sub-advisers, present an opportunity for significant increases in earnings, revenue and/or value, without consideration for current income. Under normal circumstances, the fund invests at least 80% of its net assets in equity securities of companies with small market capitalizations (or small-cap companies) and related investments. The fund considers small-cap companies to be companies with market capitalizations that, at the time of initial purchase, are within the range of capitalization of the companies that are included in the Russell 2000^{^®} Index. As of March 31, 2011, the market capitalizations of companies in the Russell 2000^{^®} Index ranged from $[ ] million to $[ ] billion. Over time, the capitalizations of the companies in the Index will change. As they do, the size of the companies in which the fund invests may change.

The fund uses multiple sub-advisers pursuing different investment styles in an attempt to control the volatility often associated with investments in companies of this size. There can be no assurance that this strategy will succeed. The fund is actively managed, and the sub-advisers may trade securities frequently, resulting, from time to time, in an annual portfolio turnover rate in excess of 100%. Active trading may increase the fund’s expenses.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Small Core (commenced operations on September 11, 2000)	%	%	%
Russell 2000^{^®} Index (reflects no deduction for fees, expenses or taxes)	%	%	%
Standard & Poor's 500 Composite Stock Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Fort Washington Investment Advisors, Inc.

Portfolio Managers:

Richard R. Jandrain III, Portfolio Manager since 2008

Daniel J. Kapusta, Portfolio Manager since 2008

Bihag N. Patel, CFA, Portfolio Manager since 2008

David K. Robinson, CFA, Portfolio Manager since 2008

Sub-Adviser:

Invesco Advisers, Inc.

Portfolio Managers:

Ralph Coutant, CFA, Portfolio Manager since 2009

Anthony Munchak, CFA, Portfolio Manager since 2001

Glen Murphy, CFA, Portfolio Manager since 2001

Francis Orlando, CFA, Portfolio Manager since 2001

Anthony Shufflebotham, CFA, Portfolio Manager since 2009

Sub-Adviser:

Wellington Management Company, LLP

Portfolio Managers:

Timothy J. McCormack, CFA, Portfolio Manager since 2002

Shaun F. Pedersen, involved in portfolio management and securities analysis since 2004

Transamerica Partners Institutional Small Growth

Investment Objective: Seeks to provide a high total investment return through investments primarily in a diversified portfolio of common stocks.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund invests primarily in stocks of companies with small market capitalizations which the fund’s sub-adviser believes have above average growth potential. Factors the fund’s sub-adviser may consider in determining a company’s growth potential include the introduction of new products, technologies, distribution channels, or other opportunities, or otherwise strong industry or market positioning. Under normal market circumstances, the fund invests at least 80% of its net assets in securities of companies with small market capitalizations (or small-cap companies) and related investments. The fund considers small-cap companies to be companies with market capitalizations that, at the time of initial purchase, are within the range of capitalization of the companies that are included in the Russell 2000^{^®} Index. As of March 31, 2011, the market capitalizations of companies in the Russell 2000^{^®} Index ranged from $[ ] million to $[ ] billion. Over time, the capitalizations of the companies in the Russell 2000^{^®} Index will change. As they do, the size of the companies in which the fund invests may change.

performance by increasing transaction costs and may generate greater tax liabilities for shareholders holding shares in taxable accounts.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Small Growth (commenced operations on May 29, 2003)	%	%	%
Russell 2000^{^®} Growth Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Perimeter Capital Partners LLC

Portfolio Managers:

James N. Behre, Portfolio Manager since 2006

Mark D. Garfinkel, CFA, Portfolio Manager since 2006

Transamerica Partners Institutional Small Value

Investment Objective: Seeks to provide a high total investment return through investments primarily in a diversified portfolio of common stock.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies.

The fund normally invests primarily in high-quality companies trading at conservative valuations. Under normal market circumstances, the fund invests at least 80% of its net assets in the securities of companies with small market capitalizations (or small-cap companies) and related investments. The fund considers small-cap companies to be companies with market capitalizations that, at the time of initial purchase, are within the range of capitalization of the companies that are included in either the Russell 2000^® Index or the S&P SmallCap 600^® Index. As of March 31, 2011, the market capitalizations of companies in the Russell 2000^® Index ranged from $[ ] million to $[ ] billion, and the market capitalizations of companies in the S&P SmallCap 600^® Index ranged from $[ ] million to $[ ] billion. Over time, the capitalizations of the companies in the indexes will change. As they do, the size of the companies in which the fund invests may change.

The fund’s equity securities may include common stocks and preferred stocks listed on the New York Stock Exchange and on other securities exchanges and stocks that are traded over-the-counter. The fund emphasizes common stocks. The fund may also invest in foreign securities.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Small Value (commenced operations on January 23, 2003)	%	%	%
Russell 2000^{^®} Value Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Sub-Adviser:

Transamerica Asset Management, Inc. Wellington Management Company, LLP

Portfolio Managers:

Timothy J. McCormack, CFA, Portfolio Manager since 2010

Shaun F. Pedersen, involved in portfolio management and securities analysis since 2010

administrator. You may purchase shares of the fund on any day the New York Stock Exchange is open for business. Requests to purchase shares for the fund should be mailed to Transamerica Fund Services, Inc., P.O. Box 219945, Kansas City, MO 64121-9945. Participants in retirement plans administered by Diversified Investment Advisors should contact Diversified at 1-800-755-5801 for additional information. If you would like to purchase shares in a fund by a wire transfer, please call 1-888-233-4339 for wire transfer instructions. You buy and redeem shares at the fund’s next-determined net asset value (NAV) after receipt of your request in good order. The minimum initial investment is $5,000. The fund is currently waiving this minimum. There is no minimum for subsequent investments. A retirement plan may, however, impose minimum investment requirements. Plan participations or IRA holders should consult their plan administrator, recordkeeper or authorized financial intermediary.

Transamerica Partners Institutional Stock Index

Investment Objective: Seeks to match the performance of the Standard and Poor’s 500 Composite Stock Index.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)^a

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Total annual fund operating expenses	%
Expense reduction^b	%
Total annual fund operating expenses after expense reduction	%

^a The fund invests in securities through an underlying mutual fund. This table and the example below reflect the expenses of the fund and that underlying fund.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: The fund invests in securities through an underlying mutual fund having the same investment goals and strategies. BlackRock Fund Advisors (“BFA”) is the investment adviser of the S&P 500 Stock Master Portfolio, the underlying mutual fund in which the fund invests.

The fund seeks its objective by investing in the stocks comprising the Standard & Poor’s 500 Stock Index¹. The weightings of stocks in the S&P 500 Index are based on each stock’s relative total market capitalization; that is, its market price per share times the number of shares outstanding. The fund invests approximately the same percentage of its assets in each stock as the stock represents in the S&P 500 Index. Under normal market conditions, the fund invests at least 90% of its net assets in securities comprising the S&P 500 Index and related investments.

The fund attempts to achieve, in both rising and falling markets, a correlation of at least 95% between the total return of its net assets before expenses and the total return of the S&P 500 Index. The fund’s ability to match the investment performance of the S&P 500 Index may be affected by, among other things, fund expenses, the amount of cash and cash equivalents held by the fund, the manner in which the total return of the S&P 500 Index is calculated, the size of the fund’s investment portfolio and the timing, frequency and size of cash flows into and out of the fund. BFA regularly monitors the fund’s correlation to the S&P 500 Index. In the unlikely event that the fund cannot achieve a correlation of at least 95%, the fund’s Trustees will consider alternative arrangements.

In the future, the fund may select another index if it is deemed to be more representative of the performance of publicly traded common stocks in the aggregate.

In seeking to replicate or match the performance of the S&P 500 Index, the fund may use various investment techniques, such as buying and selling futures contracts and options, entering into swap agreements and purchasing indexed securities. The fund may also lend its portfolio securities. These techniques may increase the fund’s volatility and may involve a small investment of cash relative to the magnitude of the risk being taken.

The fund may invest not more than 10% of its total assets, under normal market conditions, in cash and high-quality money market instruments. These investments are made to provide liquidity and when there is an unexpected or abnormal level of investments in or redemptions from the fund.

Under adverse or unstable market, economic or political conditions, the fund may take temporary defensive positions in cash and short-term debt securities without limit.

¹Standard & Poor’s does not sponsor the fund, nor is it affiliated in any way with the fund or the fund’s advisers. “Standard & Poor’s^®,” “S&P^®,” “S&P 500^®,” and “Standard & Poor’s 500^®” are trademarks of McGraw-Hill, Inc. The Stock Index Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation or warranty, express or implied, regarding the advisability of investing in the fund.

· Passive Investment - Because the sub-adviser does not select individual companies in the index that the fund tracks, the fund may hold securities of companies that present risks that an investment adviser researching individual securities might seek to avoid.

· Tracking Error – Imperfect correlation between the fund's portfolio securities and those in the index that the fund tracks, fund fees and expenses, maintenance of cash balances to meet redemption requests, rounding of prices and changes to an index and regulatory policies may cause tracking error, which is the divergence of a fund's performance from that of the fund's benchmark index.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compare to the returns of a broad measure of market performance. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Partners Institutional Stock Index (commenced operations on September 11, 2000)	%	%	%
Standard & Poor's 500 Composite Stock Index (reflects no deduction for fees, expenses or taxes)	%	%	%

Management:

Investment Adviser: Investment Adviser of S&P 500 Stock Master Portfolio:

Transamerica Asset Management, Inc. BlackRock Fund Advisors

Portfolio Managers:

Christopher Bliss, Managing Director since 2009

Edward Corallo, Managing Director since 2009

Greg Savage, Managing Director since 2008

Diane Hsiung, Director since 2008

Jennifer Hsui, Director since 2009

Transamerica Institutional Asset Allocation - Intermediate Horizon

Investment Objective: Seeks to achieve long-term returns from a combination of investment income and capital appreciation with slightly less than average volatility as compared to other balanced funds.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Acquired fund fees and expenses (fees and expenses of underlying funds)	%
Total annual fund operating expenses^a	%
Expense Reduction	%
Total annual fund operating expenses after expense reduction^a	%

^a Fund operating expenses do not correlate to the ratios of expenses to average net assets in the financial highlights table, which do not include acquired (i.e., underlying) funds’ fees and expenses.


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: Transamerica Institutional Asset Allocation - Intermediate Horizon invests in a combination of Transamerica Partners funds (“underlying funds”). Transamerica Asset Management, Inc. (“TAM”) selects the combination and amount of underlying funds to invest in based on the fund’s investment objective.

The following chart shows approximately how much of the assets of the fund are invested in the Bond, Stock and Money Market Funds. These allocations reflect TAM’s present strategy for asset allocation during normal market conditions, and may be changed at any time without notice to shareholders and without shareholder approval. In the short-term, actual asset allocations may vary due to short-term changes in cash flows caused by purchases and redemptions in the fund. TAM may allocate the assets of the fund without limit to the Money Market Fund in attempting to respond to adverse market or other conditions or to process a large purchase or redemption within the fund. For more information on allocations to the underlying funds, see the “Asset Allocation Funds” section of the fund’s prospectus.


	Normal Approximate Allocations
	Bond Funds		Stock Funds	Money Market Fund
Intermediate Horizon	48	%	50%	2%

The fund is a non-diversified fund, meaning that it is not limited by the Investment Company Act of 1940 as to the amount of its assets that may be invested in a single issuer. The fund invests in the underlying funds, which are diversified.

Each underlying fund has its own investment objective, principal investment strategies and investment risks. The sub-adviser for each underlying fund decides which securities to purchase and sell for that underlying fund.

· Asset Allocation – TAM allocates the fund's assets among various underlying funds. These allocations may be unsuccessful in maximizing the fund's return and/or avoiding investment losses, and may cause the fund to underperform other funds with a similar strategy.

assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile.

· Underlying Funds – Because the fund invests its assets in various underlying funds, its ability to achieve its investment objective depends largely on the performance of the underlying funds in which it invests. Each of the underlying funds in which the fund may invest has its own investment risks, and those risks can affect the value of the underlying funds' shares and therefore the value of the fund's investments. There can be no assurance that the investment objective of any underlying fund will be achieved. To the extent that the fund invests more of its assets in one underlying fund than in another, the fund will have greater exposure to the risks of that underlying fund. In addition, the fund will bear a pro rata portion of the operating expenses of the underlying funds in which it invests.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compared to the returns of a broad measure of market performance, as well as comparison to additional indexes which have characteristics relevant to the fund’s investment strategies. As with all mutual funds, past performance (before and after taxes)

is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Institutional Asset Allocation – Intermediate Horizon(commenced operations on September 11, 2000)	%	%	%
Standard & Poor’s 500 Composite Stock Index (reflects no deduction for fees, expenses or taxes)^*`	%	%	%
Barclays Capital U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)^*	%	%	%
Transamerica Institutional Asset Allocation - Intermediate Horizon Benchmark Blend (reflects no deduction for fees, expenses or taxes)^*	%	%	%

^* The Standard & Poor’s Composite Index, the Barclays Capital U.S. Aggregate Bond Index and the composite benchmark are unmanaged indices used as a general measure of market performance. The composite benchmark consists of the following: 24% Barclays Capital U.S. Aggregate Bond Index, 10% Barclays Capital U.S. TIPS Index, 12% Morgan Stanley Capital International World ex-US Index, 8% Bank of America Merrill Lynch 1-3 Year Treasury Index, 2% Citigroup 3-Month Treasury Bill Index, 6% Bank of America Merrill Lynch High Yield Master II Index, and 38% Russell 3000^® Index. Prior to February 1, 2008 the composite benchmark was comprised of 30% Barclays Capital U.S. Aggregate Bond Index, 15% Bank of America Merrill Lynch 1-3 Year Treasury Index, 5% Bank of America Merrill Lynch High Yield Master II Index, 42% Russell 3000^® Equity Index, and 8% Morgan Stanley Capital International World ex-US Index. The returns of these blended benchmarks have been linked. Calculations assume dividends and capital gains are reinvested and do not include any managerial expenses. You cannot invest directly in an index.

Management:

Investment Adviser: Portfolio Managers:

Transamerica Asset Management, Inc. Christopher A. Staples, CFA, Lead Portfolio Manager since 2007

Jonathan Oldroyd, CFA, Associate Portfolio Manager since 2007

Transamerica Institutional Asset Allocation - Intermediate/Long Horizon

Investment Objective: Seeks to achieve long-term returns from a combination of investment income and capital appreciation with slightly more than average volatility as compared to other balanced funds.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Acquired fund fees and expenses (fees and expenses of underlying funds)	%
Total annual fund operating expenses^a	%
Expense Reduction	%
Total annual fund operating expenses after expense reduction^a	%


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: Transamerica Institutional Asset Allocation – Intermediate/Long Horizon invests in a combination of Transamerica Partners funds (“underlying funds”). Transamerica Asset Management, Inc. (“TAM”) selects the combination and amount of underlying funds to invest in based on the fund’s investment goal.


	Normal Approximate Allocations
	Bond Funds		Stock Funds	Money Market Fund
Intermediate/Long Horizon	28	%	70%	2%

Each underlying fund has its own investment objective and principal investment strategies. The sub-adviser for each underlying fund decides which securities to purchase and sell for that underlying fund.

assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compared to the returns of a broad measure of market performance, as well as comparison to a secondary index which has characteristics relevant to the fund's investment strategies. As with all mutual funds, past performance (before and after taxes) is

not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Institutional Asset Allocation – Intermediate/Long Horizon(commenced operations on September 11, 2000)	%	%	%
Standard & Poor’s 500 Composite Stock Index (reflects no deduction for fees, expenses or taxes)^*	%	%	%
Transamerica Institutional Asset Allocation – Intermediate/Long Horizon Benchmark Blend (reflects no deduction for fees, expenses or taxes)^*	%	%	%

^* The Standard & Poor’s 500 Composite Index and the composite benchmark are unmanaged indices used as a general measure of market performance. The composite benchmark consists of the following: 15% Barclays Capital U.S. Aggregate Bond Index, 7% Barclays Capital U.S. TIPS Index, 18% Morgan Stanley Capital International World ex-US Index, 2% Bank of America Merrill Lynch 1-3 Year Treasury Index, 2% Citigroup 3-Month Treasury Bill Index, 4% Bank of America Merrill Lynch High Yield Master II Index, and 52% Russell 3000^® Index. Prior to February 1, 2008 the composite benchmark was comprised of 18% Barclays Capital U.S. Aggregate Bond Index, 9% Bank of America Merrill Lynch 1-3 Year Treasury Index, 3% Bank of America Merrill Lynch High Yield Master II Index, 59% Russell 3000^® Equity Index, and 11% Morgan Stanley Capital International World ex-US Index. The returns of these blended benchmarks have been linked. Calculations assume dividends and capital gains are reinvested and do not include any managerial expenses. You cannot invest directly in an index.

Management:

Investment Adviser: Portfolio Managers:

Transamerica Asset Management, Inc. Christopher A. Staples, CFA, Lead Portfolio Manager since 2007

Jonathan Oldroyd, CFA, Associate Portfolio Manager since 2007

Transamerica Institutional Asset Allocation - Long Horizon

Investment Objective: Seeks to provide long-term returns from growth of capital and growth of income.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Acquired fund fees and expenses (fees and expenses of underlying funds)	%
Total annual fund operating expenses^a	%
Expense Reduction	%
Total annual fund operating expenses after expense reduction^a	%


1 year	3 years	5 years	10 years
$	$	$	$

Principal Strategies: Transamerica Institutional Asset Allocation – Long Horizon invests in a combination of Transamerica Partners funds (“underlying funds”). Transamerica Asset Management, Inc. (“TAM”) selects the combination and amount of underlying funds to invest in based on the fund’s investment goal.


	Normal Approximate Allocations
	Bond Funds		Stock Funds	Money Market Fund
Long Horizon	8	%	90%	2%

fluctuate significantly from day to day and over time. You may lose part or all of your investment in the fund or your investment may not perform as well as other similar investments. The following is a summary of certain risks (in alphabetical order) of investing in the fund. You may lose money if you invest in this fund.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compared to the returns of a broad measure of market performance, as well as comparison to a secondary index which has characteristics relevant to the fund's investment strategies. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Institutional Asset Allocation – Long Horizon(commenced operations on September 11, 2000)	%	%	%
Standard & Poor’s Composite Stock Index (reflects no deduction for fees, expenses or taxes)^*	%	%	%
Transamerica Institutional Asset Allocation – Long Horizon Benchmark Blend(reflects no deduction for fees, expenses or taxes)^*	%	%	%

^* The Standard & Poor’s Composite Index and the composite benchmark are unmanaged indices used as a general measure of market performance. The composite benchmark consists of the following: 4% Barclays Capital U.S. Aggregate Bond Index, 2% Barclays Capital U.S. TIPS Index, 24% Morgan Stanley Capital International World ex-US Index, 2% Citigroup 3-Month Treasury Bill Index, 2% Bank of America Merrill Lynch High Yield Master II Index, and 66% Russell 3000^® Index. Through April 30, 2003, the composite benchmark was comprised of 60% Russell 1000^® Index, 25% Russell 2000^® Index, and 15% Morgan Stanley Capital International World ex-US Index. From May 1, 2003 through January 31, 2008 the composite benchmark was comprised of 6% Barclays Capital U.S. Aggregate Bond Index, 3% Bank of America Merrill Lynch 1-3 Year Treasury Index, 1% Bank of America Merrill Lynch High Yield Master II Index, 76% Russell 3000^® Index, and 14% Morgan Stanley Capital International World ex-US Index. The returns of these blended benchmarks have been linked. Calculations assume dividends and capital gains are reinvested and do not include any managerial expenses. You cannot invest directly in an index.

Management:

Investment Adviser: Portfolio Managers:

Transamerica Asset Management, Inc. Christopher A. Staples, CFA, Lead Portfolio Manager since 2007

Jonathan Oldroyd, CFA, Associate Portfolio Manager since 2007

Transamerica Institutional Asset Allocation - Short Horizon

Investment Objective: Seeks to provide a high level of income and preservation of capital.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Acquired fund fees and expenses (fees and expenses of underlying funds)	%
Total annual fund operating expenses^a	%
Expense Reduction	%
Total annual fund operating expenses after expense reduction^a	%


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: Transamerica Institutional Asset Allocation – Short Horizon invests in a combination of Transamerica Partners funds (“underlying funds”). Transamerica Asset Management, Inc. (“TAM”) selects the combination and amount of underlying funds to invest in based on the fund’s investment goal.


	Normal Approximate Allocations
	Bond Funds		Stock Funds	Money Market Fund
Short Horizon	88	%	10%	2%

of securities or securities of different issuers, may not necessarily change in the same amount or in the same direction. When interest rates go down, the income received by the fund, and the fund’s yield, may decline.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compared to the returns of a broad measure of market performance, as well as comparison to a secondary index which is used to more closely reflect the principal strategies and policies of the fund. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Institutional Asset Allocation – Short Horizon (commenced operations on September 11, 2000)	%	%	%
Barclays Capital U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)^*	%	%	%
Transamerica Institutional Asset Allocation – Short Horizon Benchmark Blend (reflects no deduction for fees, expenses or taxes)^*	%	%	%

^* The Barclays Capital U.S. Aggregate Bond Index and the composite benchmark are unmanaged indices used as a general measure of market performance. The composite benchmark consists of the following: 46% Barclays Capital U.S. Aggregate Bond Index, 15% Barclays Capital U.S. TIPS Index, 2% Morgan Stanley Capital International World ex-US Index, 17% Bank of America Merrill Lynch 1-3 Year Treasury Index, 2% Citigroup 3-Month Treasury Bill Index, 10% Bank of America Merrill Lynch High Yield Master II Index, and 8% Russell 3000^® Index. Prior to February 1, 2008 the composite benchmark was comprised of 54% Barclays Capital U.S. Aggregate Bond Index, 27% Bank of America Merrill Lynch 1-3 Year Treasury Index, 9% Bank of America Merrill Lynch High Yield Master II Index, 9% Russell 3000^® Index, and 1% Morgan Stanley Capital International World ex-US Index. The returns of these blended benchmarks have been linked. Calculations assume dividends and capital gains are reinvested and do not include any managerial expenses. You cannot invest directly in an index.

Management:

Investment Adviser: Portfolio Managers:

Transamerica Asset Management, Inc. Christopher A. Staples, CFA, Lead Portfolio Manager since 2007

Jonathan Oldroyd, CFA, Associate Portfolio Manager since 2007

Transamerica Institutional Asset Allocation - Short/Intermediate Horizon

Investment Objective: Seeks to achieve reasonable returns with considerably less than average volatility as compared to other balanced funds.

Fees and Expenses: This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. There are no sales charges (load) or other transaction fees.


Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

Management fees	%
Distribution and service (12b-1) fees	%
Other expenses	%
Acquired fund fees and expenses (fees and expenses of underlying funds)	%
Total annual fund operating expenses^a	%
Expense Reduction	%
Total annual fund operating expenses after expense reduction^a	%


1 year	3 years	5 years	10 years
$	$	$	$

Principal Investment Strategies: Transamerica Institutional Asset Allocation – Short/Intermediate Horizon invests in a combination of Transamerica Partners funds (“underlying funds”). Transamerica Asset Management, Inc. (“TAM”) selects the combination and amount of underlying funds to invest in based on the fund’s investment goal.


	Normal Approximate Allocations
	Bond Funds		Stock Funds	Money Market Fund
Short/Intermediate Horizon	68	%	30%	2%

assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile.

Performance: The bar chart and the table below provide some indication of the risks of investing in the fund by showing you how the fund’s performance has varied from year to year, and how the fund’s average annual total returns for different periods compared to the returns of a broad measure of market performance, as well as comparison to additional indexes which have characteristics relevant to the fund’s investment strategies. As with all mutual funds, past performance (before and after taxes)

100

is not a prediction of future results. Updated performance information is available on our website at www.transamericafunds.com or by calling 1-888-233-4339.

Annual Total Returns (calendar years ended December 31)

[[bar_chart_to_be_updated]]


	Quarter Ended	Return
Best Quarter:		%
Worst Quarter:		%

101

Average Annual Total Returns (periods ended December 31, 2010)


	1 Year	5 Years	10 Years or Since Inception
Transamerica Institutional Asset Allocation – Short/Intermediate Horizon (commenced operations on September 11, 2000)	%	%	%
Barclays Capital U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)^*	%	%	%
Standard & Poor’s 500 Composite Stock Index (reflects no deduction for fees, expenses or taxes)^*	%	%	%
Transamerica Institutional Asset Allocation – Short/Intermediate Horizon Benchmark Blend (reflects no deduction for fees, expenses or taxes)^*	%	%	%

* The Barclays Capital U.S. Aggregate Bond Index, Standard & Poor’s 500 Composite Stock Index and the composite benchmark are unmanaged indices used as a general measure of market performance. The composite benchmark consists of the following: 34% Barclays Capital U.S. Aggregate Bond Index, 12% Barclays Capital U.S. TIPS Index, 7% Morgan Stanley Capital International World ex-US Index, 14% Bank of America Merrill Lynch 1-3 Year Treasury Index, 2% Citigroup 3-Month Treasury Bill Index, 8% Bank of America Merrill Lynch High Yield Master II Index, and 23% Russell 3000^® Index. Prior to February 1, 2008 the composite benchmark was comprised of 42% Barclays Capital U.S. Aggregate Bond Index, 21% Bank of America Merrill Lynch 1-3 Year Treasury Index, 7% Bank of America Merrill Lynch High Yield Master II Index, 25% Russell 3000^® Index, and 5% Morgan Stanley Capital International World-ex-US Index. The returns of these blended benchmarks have been linked. Calculations assume dividends and capital gains are reinvested and do not include any managerial expenses. You cannot invest directly in an index.

Management:

Investment Adviser: Portfolio Managers:

Transamerica Asset Management, Inc. Christopher A. Staples, CFA, Lead Portfolio Manager since 2007

Jonathan Oldroyd, CFA, Associate Portfolio Manager since 2007

102

More On The funds' Strategies And Investments

The following provides additional information regarding the funds’ strategies and investments described at the front of the prospectus. All references in this prospectus to the fund include the fund's underlying portfolio, unless otherwise noted. Except as otherwise expressly stated for a particular fund in this prospectus or in the statement of additional information or as required by law, there is no limit on the amount of a fund’s assets that may be invested in a particular type of security or investment.

Balanced Fund

In selecting common stocks, the fund emphasizes established companies. Most of the fund’s long-term debt investments are investment grade (rated BBB or better by Standard & Poor’s or Fitch or Baa or better by Moody’s) or considered by the fund’s advisers to be of comparable quality. Credit ratings and determinations of credit quality are only the opinions of the companies issuing them and are not guarantees as to quality.

The fund uses short-term debt and money market instruments, including short-term U.S. government and corporate obligations, commercial paper, bank obligations and repurchase agreements, in varying amounts for liquidity and cash management, and as a risk management tool.

The fund invests in securities through an underlying mutual fund (called a Portfolio) having the same investment goals and strategies. All references in this prospectus to the fund include the fund’s underlying Portfolio, unless otherwise noted.

All Bond Funds

Fixed income securities may bear fixed, fixed and contingent, or variable rates of interest and may involve equity features, such as conversion or exchange rights or warrants for the acquisition of stock of the same or a different issuer or participations based on revenues, sales or profits. Changes in interest rates will generally cause bigger changes in prices of longer-term securities than in prices of shorter-term securities.

Each of the Bond Funds may use derivatives such as options, futures, swaps and forward currency contracts. The funds generally use derivatives for hedging purposes, but they also may be used to generate income. Derivatives may have economic characteristics similar to the securities held by a fund. In that case, derivative investments will be considered related investments for purposes of the fund’s policy to invest at least 80% of its net assets in the securities and related investments described above. Derivatives may increase the fund’s volatility and may involve a small investment of cash relative to the magnitude of the risk being taken.

Each fund (except High Yield Bond Fund) invests primarily in investment grade securities. However, credit ratings and determinations of credit quality are only the opinions of the companies issuing them and are not guarantees as to quality.

Each of the Bond Funds will use short-term debt and money market instruments, including short-term U.S. government and corporate obligations, commercial paper, bank obligations and repurchase agreements, in varying amounts for liquidity and cash management, and as a risk management tool. Each fund also may lend its securities to generate income.

Compliance with any policy or limitation for a fund that is expressed as a percentage of assets is determined at the time of purchase of portfolio securities. The policy will not be violated if these limitations are exceeded because of changes in the market value of the fund’s assets or for any other reason. If the credit quality of an investment deteriorates after purchase, the portfolio managers will decide whether the security should be held or sold.

Each fund’s policy of investing, under normal circumstances, at least 80% of its net assets in the securities and related investments identified above may be changed without shareholder approval. However, each fund will provide its shareholders with prior notice of any changes in that policy in accordance with applicable law.

Each fund invests in securities through an underlying mutual fund (called a Portfolio) having the same investment goals and strategies. All references in this prospectus to a fund include that fund’s underlying portfolio, unless otherwise noted.

Money Market Fund

As a money market fund, the fund must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. The fund invests in securities that, at the time of purchase, have remaining maturities of 397 days or less. The fund maintains a weighted average maturity of not more than 60 days. Each security, at the time of purchase by the fund, has been determined by the sub-adviser to present minimal credit risk. To be considered high quality under the regulations, a security (or its issuer or guarantor) must be rated in one of the two highest short-term rating categories by nationally recognized rating agencies, such as Moody’s or Standard & Poor’s, or, if unrated, in the sub-adviser’s opinion, be of comparable quality.

Investors should note that within the two highest short-term rating categories there may be sub-categories or gradations indicating relative quality. If, after purchase, the credit rating on a security is downgraded or the credit quality deteriorates, or if

103

the maturity on a security is extended, the fund’s portfolio managers or the fund’s Board (where required by applicable regulations) will decide whether the security should be held or sold.

The fund is constructed from an approved list of money market issues that have passed and maintain rigorous credit quality standards established by the portfolio managers. Securities are sold when the fund needs cash to meet redemptions, or when the managers believe that better opportunities exist or that particular securities no longer fit within the overall strategy for achieving the fund’s goal. In general, the portfolio managers attempt to temper income volatility in the fund by investing significant portions of the fund in securities with maturities of thirty to fifty days.

To the extent that the portfolio has any uninvested cash, the fund would also be subject to risk with respect to the depository institution holding the cash.

All Stock Funds

The portfolio managers of the Large Value, Mid Value and Small Value Funds use a “bottom up” value-oriented approach in selecting investments for the funds. When portfolio managers use a “bottom up” approach, they look primarily at individual companies against the context of broader market factors. A value-oriented approach attempts to identify companies that appear to be trading below their true worth. The managers use the same bottom up approach when deciding which securities to sell. Securities are sold when the fund needs cash to meet redemptions, or when the managers believe that better opportunities exist or that particular securities no longer fit within the overall strategy for achieving the fund’s goals.

Portfolio managers of the Large Core, Large Growth, Mid Growth, Small Growth and Small Core Funds use a “bottom up” approach in selecting securities, relying primarily on stock selection against the context of broader market factors. These managers look for companies that they believe are in dynamic high growth sectors of the world economy, and that are thought to have dominant or strong competitive positions within their sectors. They also look for companies that are expected to have strong earnings growth potential. The managers use the same bottom up approach when deciding which securities to sell. Securities are sold when a fund needs cash to meet redemptions, or when the managers believe that better opportunities exist or that particular securities no longer fit within the overall strategy for achieving the fund’s goal. Other managers utilize a quantitative approach with respect to security investment decisions.

Each of the Stock Funds may use derivatives such as options, futures, swaps and forward currency contracts. The funds generally use derivatives for hedging purposes, but they also may be used to generate income. Derivatives may have economic characteristics similar to the securities held by a fund. In that case, derivative investments will be considered related investments for the purposes of the fund’s policy to invest at least 80% of its net assets in the securities and related investments described above. Derivatives may increase the fund’s volatility and may involve a small investment of cash relative to the magnitude of the risk being taken.

Each of the Stock Funds may also invest in bonds and short-term obligations as well as securities convertible into common stocks, preferred stocks, debt securities and short-term obligations. These funds use short-term obligations and money market securities, including commercial paper, bank obligations and repurchase agreements, in varying amounts for liquidity and cash management, and as a risk management tool. Each fund also may lend its securities to generate income.

Although the policy of each fund, other than the Stock Index Fund, under normal circumstances, of investing at least 80% of its net assets in the securities and related investments identified above may be changed without shareholder approval, each fund will provide its shareholders with prior notice of any change in that policy in accordance with applicable law.

104

More On Risks Of Investing In The Funds

Principal Investment Risks: The following provides additional information regarding the risks of investing in the funds as described at the front of the prospectus.

104

Fixed-Income Securities: The value of fixed-income securities may change daily based on changes in interest rates, and other market conditions and factors. Risks include, without limitation:

· market risk: fluctuations in market value

105

· different accounting and reporting practices

· less information available to the public

· less (or different) regulation of securities markets

· more complex business negotiations

· less liquidity

· more fluctuations in prices

· delays in settling foreign securities transactions

· higher costs for holding shares (custodial fees)

· higher transaction costs

· vulnerability to seizure and taxes

· political or financial instability and small markets

· different market trading days

Interest Rate (Transamerica Partners Money Market): The interest rates on short-term obligations held in a fund’s portfolio will vary, rising or falling with short-term interest rates generally. A fund's yield will tend to lag behind general changes in interest rates.

106

107

Passive Investment (Transamerica Partners Stock Index): Because the sub-adviser does not select individual companies in the index that the fund tracks, the fund may hold securities of companies that present risks that an investment adviser researching individual securities might seek to avoid.

Redemption (Transamerica Partners Money Market): The fund may experience periods of heavy redemptions that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value particularly during periods of declining or illiquid markets. Redemption risk is greater to the extent that the fund has investors with large shareholdings, short investment horizons, or unpredictable cash flow needs. The redemption by one or more large shareholders of their holdings in the fund could have an adverse impact on the remaining shareholders in the fund. If the fund is forced to liquidate its assets under unfavorable conditions or at inopportune times, the fund's ability to maintain a stable $1.00 share price may be affected. In addition, the fund may suspend redemptions when permitted by applicable regulations.

Tracking Error (Transamerica Partners Stock Index): Imperfect correlation between the fund's portfolio securities and those in the index that the fund tracks, fund fees and expenses, maintenance of cash balances to meet redemption requests, rounding of prices and changes to an index and regulatory policies may cause tracking error, which is the divergence of a fund's performance from that of the fund's benchmark index

108

Yield (Transamerica Money Market): The fund invests in short-term money market instruments. As a result, the amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates. Investing in high quality, short-term instruments may result in a lower yield (the income on your investment) than investing in lower quality or longer-term instruments. When interest rates are very low, the fund's expenses could absorb all or a significant portion of the fund's income. If interest rates increase, a fund's yield may not increase proportionately. For example, TAM may recoup expenses previously forgone or reimbursed. The recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on a fund's yield. Under these new regulations, the fund may be required to maintain greater liquidity based on characteristics and anticipated liquidity needs of its shareholders and may have a lower yield than money market funds with a different shareholder base.

109

SHAREHOLDER INFORMATION

Investment Adviser

Transamerica Partners Funds Group's Board of Trustees is responsible for overseeing the management and business affairs of Transamerica Partners Funds Group. It oversees the operation of Transamerica Partners Funds Group by its officers. It also reviews the management of the funds' assets by the investment adviser and sub-advisers. Information about the Trustees and executive officers of Transamerica Partners Funds Group is contained in the Statement of Additional Information (“SAI”).

Transamerica Asset Management, Inc. (“TAM”), located at 570 Carillon Parkway, St. Petersburg, FL 33716, serves as investment adviser for Transamerica Partners Funds Group. The investment adviser hires investment sub-advisers to furnish investment advice and recommendations and has entered into sub-advisory agreements with each fund's sub-adviser. The investment adviser also monitors the sub-advisers’ buying and selling of portfolio securities and administration of the funds. For these services, TAM is paid investment advisory fees. These fees are calculated on the average daily net assets of each fund.

AEGON USA Investment Management, LLC and Transamerica Investment Management, LLC are affiliates of TAM and Transamerica Funds.

(2) materially change the terms of any sub-advisory agreement; and

(3) continue the employment of an existing sub-adviser on subadvisory contract terms where a contract has been assigned because of a change of control of the sub-adviser.

In such circumstances, shareholders would receive notice and information about the new sub-adviser within ninety (90) days after the hiring of any new sub-adviser.

Stock Index Fund

TAM is the investment adviser of the Stock Index Fund, providing general supervision of the fund’s investment in its underlying Portfolio, subject to policies set by the Trustees.

Advisory Fees Paid in 2010

For the fiscal year ended December 31, 2010, each fund paid the following advisory fee as a percentage of the fund's average daily net assets:


Name of Fund	Percentage
Transamerica Partners Balanced	%
Transamerica Partners Core Bond	%¹
Transamerica Partners High Quality Bond	%
Transamerica Partners High Yield Bond	%¹
Transamerica Partners Inflation-Protected Securities	%¹
Transamerica Partners International Equity	%

110


Name of Fund	Percentage
Transamerica Partners Large Core	%
Transamerica Partners Large Growth	%¹
Transamerica Partners Large Value	%¹
Transamerica Partners Mid Growth	%
Transamerica Partners Mid Value	%¹
Transamerica Partners Money Market	%³
Transamerica Partners Small Core	%¹
Transamerica Partners Small Growth	%
Transamerica Partners Small Value	%
Transamerica Partners Stock Index	%
Transamerica Asset Allocation – Intermediate Horizon	%²
Transamerica Asset Allocation – Intermediate/Long Horizon	%²
Transamerica Asset Allocation – Long Horizon	%²
Transamerica Asset Allocation – Short Horizon	%²
Transamerica Asset Allocation – Short/Intermediate Horizon	%²

¹ Amount waived was less than 0.005%.

²In addition, the fund bears its pro rata share of the advisory fees of the underlying funds in which it invests.

³Does not include voluntary yield waiver reduction.

A discussion regarding the Board of Trustees’ approval of each fund's advisory arrangements is available in each fund's semi-annual report for the fiscal year ended December 31, 2010.

Sub-Advisers


Fund	Sub-Advisory Fee	Name and Address of Sub-Adviser
Transamerica Partners Large Core Transamerica Partners Large Value	% %	Aronson Johnson Ortiz, LP (“AJO”) 230 South Broad Street, 20^th Floor Philadelphia, PA 19102
Transamerica Partners Balanced¹ Transamerica Partners Core Bond Transamerica Partners Inflation-Protected Securities	% % %	BlackRock Financial Management, Inc. (“BlackRock”)^* 55 East 52^nd Street New York, NY 10055
Transamerica Partners Mid Growth	%	Columbus Circle Investors (“CCI”)^* One Station Place Stamford, CT 06902
Transamerica Partners Mid Value	%	Cramer, Rosenthal, McGlynn, LLC (“CRM”) 520 Madison Avenue New York, NY 10022
Transamerica Partners High Yield Bond	%	Eaton Vance Management (“Eaton Vance”)^* Two International Place Boston, MA 02110

111


Transamerica Partners Small Core	%	Fort Washington Investment Advisors, Inc. (“FWIA”) 303 Broadway, Suite 1200 Cincinnati, OH 45202
Transamerica Partners Money Market	%	GE Asset Management, Incorporated (“GEAMI”)^* 3001 Summer Street P.O. Box 120031 Stamford, CT 06912
Transamerica Partners Small Core	%	Invesco Advisers, Inc. (“Invesco”)^* Two Peachtree Pointe 1555 Peachtree St. NE, Suite 1800 Atlanta, GA 30309
Transamerica Partners Large Growth²	%	Jennison Associates LLC (“Jennison”) 466 Lexington Avenue New York, NY 10017
Transamerica Partners Balanced³ Transamerica Partners Mid Value	% %	J.P. Morgan Investment Management Inc. (“JPMorgan”) 245 Park Avenue New York, NY 10167
Transamerica Partners High Quality Bond	%	Merganser Capital Management, Inc. (“Merganser”) 99 High Street Boston, MA 02110
Transamerica Partners Small Growth	%	Perimeter Capital Partners LLC (“Perimeter”)^* Six Concourse Parkway, Suite 3300 Atlanta, GA 30328
Transamerica Partners International Equity	%	Thornburg Investment Management, Inc. (“Thornburg”) 2300 North Ridgetop Road Santa Fe, NM 87506
Transamerica Partners Large Growth Transamerica Partners Small Core Transamerica Partners Small Value⁴	% % %	Wellington Management Company, LLP (“Wellington Management”)^* 280 Congress Street Boston, MA 02210

112

* The sub-adviser receives compensation, calculated monthly and paid quarterly, from TAM.

For purposes of calculating the sub-advisory fee rate payable by TAM to Jennison, the assets in the funds will be aggregated with the assets of Transamerica Jennison Growth and Transamerica Jennison Growth VP.

⁴Effective July 9, 2010, the sub-advisory fee for the fund is 0.55% of the fund’s average daily net assets.

Prior to July 9 2010, the sub-advisory fee for the fund was 0.75% of the first $50 million of average daily net assets and 0.45% of average daily net assets in excess of $50 million.

Portfolio Manager(s)

Transamerica Partners Balanced


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Matthew Marra/2010	Portfolio Manager	BlackRock	Managing Director
Eric Pellicciaro/2010	Portfolio Manager	BlackRock	Managing Director
Rick Rieder/2010	Portfolio Manager	BlackRock	Chief Investment Officer of Fixed Income, Fundamental Portfolios, and head of Corporate Credit and Multi-Sector and Mortgage Groups; President and Chief Executive Officer of R3 Capital Partners from 2008 to 2009; Head of Global Principal Strategies team and Credit Businesses at Lehman Brothers from 1987 to 2008
Scott Blasdell, CFA/2010	Portfolio Manager	JPMorgan	Portfolio Manager
Terance Chen, CFA/2010	Portfolio Manager	JPMorgan	Vice President and Portfolio Manager
Raffaele Zingone, CFA/2010	Portfolio Manager	JPMorgan	Portfolio Manager

113

Transamerica Partners Core Bond


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Matthew Marra/2007	Portfolio Manager	BlackRock	Managing Director
Eric Pellicciaro/2010	Portfolio Manager	BlackRock	Managing Director
Rick Rieder/2010	Portfolio Manager	BlackRock	Chief Investment Officer of Fixed Income, Fundamental Portfolios, and head of Corporate Credit and Multi-Sector and Mortgage Groups; President and Chief Executive Officer of R3 Capital Partners from 2008 to 2009; Head of Global Principal Strategies team and Credit Businesses at Lehman Brothers from 1987 to 2008

Transamerica Partners High Quality Bond


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Peter S. Kaplan/1990	Portfolio Manager	Merganser	Manager
Douglas A. Kelly/1990	Portfolio Manager	Merganser	Chief Investment Officer

Transamerica Partners High Yield Bond


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Linda Carter/2000	Portfolio Manager	Eaton Vance	Vice President
Michael W. Weilheimer/2000	Portfolio Manager	Eaton Vance	Vice President

Transamerica Partners Inflation-Protected Securities


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Martin Hegarty/2010	Portfolio Manager	BlackRock	Managing Director, co-head of Global Inflation-Linked Portfolios for BlackRock; Director of Bank of America Merrill Lynch
Stuart Spodek/2007	Portfolio Manager	BlackRock	Managing Director
Brian Weinstein/2007	Portfolio Manager	BlackRock	Managing Director

Transamerica Partners International Equity


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
William V. Fries, CFA/2009	Portfolio Manager (Co)	Thornburg	Managing Director
Wendy Trevisani/2009	Portfolio Manager (Co)	Thornburg	Managing Director
Lei Wang, CFA/2008	Portfolio Manager (Co)	Thornburg	Managing Director

Transamerica Partners Large Core


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Theodore R. Aronson/2009	Portfolio Manager	AJO	Managing Principal

114


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Stefani Cranston/2009	Portfolio Manager	AJO	Principal
Gina Marie N. Moore/2009	Portfolio Manager	AJO	Principal
Martha E. Ortiz/2009	Portfolio Manager	AJO	Principal
R. Brian Wenzinger/2009	Portfolio Manager	AJO	Principal
Christopher J. W. Whitehead/2009	Portfolio Manager	AJO	Associate, Principal

Transamerica Partners Large Growth


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Blair A. Boyer/2009	Portfolio Manager	Jennison	Managing Director
Michael A. Del Balso/2009	Portfolio Manager	Jennison	Managing Director and Director of Research for Growth Equity
Spiros “Sig” Segalas/2009	Portfolio Manager	Jennison	Director, President and Chief Investment Officer
Paul E. Marrkand, CFA/2007	Portfolio Manager	Wellington Management	Senior Vice President and Equity Portfolio Manager

Transamerica Partners Large Value


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Theodore R. Aronson/2009	Portfolio Manager	AJO	Managing Principal
Stefani Cranston/2009	Portfolio Manager	AJO	Principal
Gina Marie N. Moore/2009	Portfolio Manager	AJO	Principal
Martha E. Ortiz/2009	Portfolio Manager	AJO	Principal
R. Brian Wenzinger/2009	Portfolio Manager	AJO	Principal
Christopher J. W. Whitehead/2009	Portfolio Manager	AJO	Associate, Principal

Transamerica Partners Mid Growth


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Clifford Fox/2004	Portfolio Manager (Lead)	CCI	Senior Managing Director
Michael Iacono/2004	Portfolio Manager (Co)	CCI	Managing Director
Katerina Wasserman/2004	Portfolio Manager (Co)	CCI	Senior Vice President

Transamerica Partners Mid Value


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Jay B. Abramson/2001	Portfolio Manager	CRM	President and Chief Investment Officer
Robert L. Rewey, III/2008	Portfolio Manager	CRM	Senior Vice President
Gloria Fu, CFA/2009	Portfolio Manager	JPMorgan	Portfolio Manager and Executive Director
Lawrence Playford, CFA/2009	Portfolio Manager	JPMorgan	Portfolio Manager and Executive Director
Jonathan K.L. Simon/2009	Portfolio Manager	JPMorgan	Portfolio Manager and Managing Director

115

Transamerica Partners Small Core


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Richard R. Jandrain III/2008	Senior Portfolio Manager	FWIA	Managing Director
Daniel J. Kapusta/2008	Senior Portfolio Manager	FWIA	Senior Portfolio Manager
Bihag N. Patel, CFA/2008	Senior Portfolio Manager	FWIA	Senior Portfolio Manager
David K. Robinson, CFA/2008	Senior Portfolio Manager	FWIA	Senior Portfolio Manager
Ralph Coutant, CFA/2009	Portfolio Manager	Invesco	Portfolio Manager
Anthony Munchak, CFA/2001	Portfolio Manager	Invesco	Portfolio Manager
Glen Murphy, CFA/2001	Portfolio Manager	Invesco	Portfolio Manager
Francis Orlando, CFA/2001	Portfolio Manager	Invesco	Portfolio Manager
Anthony Shufflebotham, CFA/2009	Portfolio Manager	Invesco	Portfolio Manager
Timothy J. McCormack, CFA/2002	Portfolio Manager	Wellington Management	Senior Vice President and Equity Portfolio Manager
Shaun F. Pedersen/2004	Involved in portfolio management and securities analysis	Wellington Management	Senior Vice President and Equity Portfolio Manager

Transamerica Partners Small Growth


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
James N. Behre/2006	Portfolio Manager	Perimeter	Principal and Director of Research
Mark D. Garfinkel, CFA/2006	Portfolio Manager	Perimeter	Principal

Transamerica Partners Small Value


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Timothy J. McCormack, CFA/2010	Portfolio Manager	Wellington Management	Senior Vice President and Equity Portfolio Manager
Shaun F. Pedersen/2010	Involved in portfolio management and securities analysis	Wellington Management	Senior Vice President and Equity Portfolio Manager

Transamerica Partners Stock Index


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Christopher Bliss/2009	Portfolio Manager	BlackRock Fund Advisors	Senior Portfolio Manager; Portfolio Manager
Edward Corallo/2009	Portfolio Manager	BlackRock Fund Advisors	Head of portfolio management in the Index Equity Group; Senior Portfolio Manager
Greg Savage/2008	Senior Portfolio Manager	BlackRock Fund Advisors	Senior Portfolio Manager; Portfolio Manager
Diane Hsiung /2008	Portfolio Manager	BlackRock Fund Advisors	Senior Portfolio Manager; Portfolio Manager
Jennifer Hsui /2009	Portfolio Manager	BlackRock Fund Advisors	Senior Portfolio Manager; Portfolio Manager and Research Analyst

116


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years

Transamerica Asset Allocation - Intermediate Horizon


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Christopher A. Staples, CFA/2007	Lead Portfolio Manager	TAM	Senior Vice President and Chief Investment Officer
Jonathan Oldroyd, CFA/2007	Associate Portfolio Manager	TAM	Vice President and Investment Analyst

Transamerica Asset Allocation - Intermediate/Long Horizon


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Christopher A. Staples, CFA/2007	Lead Portfolio Manager	TAM	Senior Vice President and Chief Investment Officer
Jonathan Oldroyd, CFA/2007	Associate Portfolio Manager	TAM	Vice President and Investment Analyst

Transamerica Asset Allocation - Long Horizon


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Christopher A. Staples, CFA/2007	Lead Portfolio Manager	TAM	Senior Vice President and Chief Investment Officer
Jonathan Oldroyd, CFA/2007	Associate Portfolio Manager	TAM	Vice President and Investment Analyst

Transamerica Asset Allocation - Short Horizon


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Christopher A. Staples, CFA/2007	Lead Portfolio Manager	TAM	Senior Vice President and Chief Investment Officer
Jonathan Oldroyd, CFA/2007	Associate Portfolio Manager	TAM	Vice President and Investment Analyst

Transamerica Asset Allocation - Short/Intermediate Horizon


Name/Year Joined Fund	Role	Employer	Positions Over Past Five Years
Christopher A. Staples, CFA/2007	Lead Portfolio Manager	TAM	Senior Vice President and Chief Investment Officer
Jonathan Oldroyd, CFA/2007	Associate Portfolio Manager	TAM	Vice President and Investment Analyst

117

How To Reach The Funds

Shareholder Services

This section describes how to do business with the funds and shareholder services that are available.

· Customer Service: 1-888-233-4339

• Internet: www.transamericafunds.com

• Fax: 1-888-329-4339

Mailing Address: Transamerica Fund Services, Inc.

P.O. Box 219945
Kansas City, MO 64121-9945

Overnight Address: Transamerica Fund Services, Inc.

330 West 9th Street
Kansas City, MO 64105

Retirement plan participants in a retirement plan administered by Diversified Investment Advisors, TAM’s affiliate, should contact Diversified at 1-800-755-5801 for additional information.

How To Purchase Shares

Transamerica Fund Services, Inc.
P.O. Box 219945
Kansas City, MO 64121-9945

118

Frequent Purchases and Sales of Fund Shares

Reallocations in underlying funds by an asset allocation fund in furtherance of a fund’s objective are not considered to be market timing or excessive trading.

How the Price Of Your Shares Is Calculated

The NAV of each fund (or class thereof) is calculated by taking the value of its net assets and dividing by the number of shares of the fund (or class) that are then outstanding.

119

How to Sell Shares

On any business day, you may sell (redeem) all or a portion of your shares.

Redemption requests may be made by mail and, in certain circumstances, telephone. The proceeds of the redemption will be sent by mail or, if authorized on the Account Application, wire transfer.

Requests to redeem shares should be mailed to:

Transamerica Fund Services, Inc.
P.O. Box 219945
Kansas City, MO 64121-9945

120

Each fund reserves the right to delay delivery of your redemption proceeds up to 7 days.

Participants in a retirement plan or IRA program should obtain redemption instructions from their plan administrator, recordkeeper, or authorized financial intermediary.

A signature guarantee is required for the following:

· any redemption by mail if the proceeds are to be paid to someone else or are to be mailed to an address other than your address of record;

· any redemption by mail if the proceeds are to be wired to a bank;

· any redemption request for more than $50,000; and

· requests to transfer registration of shares to another owner.

Shareholder Services And Policies

Exchanges

Redemption proceeds

Involuntary redemptions

Telephone or internet transactions

Address changes

Registration changes

121

call 1-888-233-4339. If your shares are held of record by a financial institution, contact that financial institution for ownership changes.

Statements and reports

Financial reports for the funds will be mailed semiannually to all shareholders.

More About The Funds

General Information

What are Distribution (“12b-1”) Fees?

122

Dividends and Distributions

You will receive all distributions from a fund in additional shares of the same fund issued at NAV unless you request otherwise in writing.

Tax Matters

Taxes on Distributions

Early each year, each fund will notify its shareholders of the amount and tax status of distributions paid to shareholders for the preceding year.

Taxes on Sales or Exchanges

Other Tax Matters

123

FINANCIAL HIGHLIGHTS

For a share of beneficial interest outstanding through each period: (TO BE UPDATED)

124

asset allocation funds

As described in the prospectus, under normal market conditions the assets of each Asset Allocation Fund are invested in Bond, Stock, and Money Market Funds approximately as follows:



	Long-Term Expected Average Allocations
	Bond Funds		Stock Funds		Money Market Fund
Short Horizon	88	%	10	%	2	%
Short/Intermediate Horizon	68	%	30	%	2	%
Intermediate Horizon	48	%	50	%	2	%
Intermediate/Long Horizon	28	%	70	%	2	%
Long Horizon	8	%	90	%	2	%

Currently, TAM seeks to allocate an Asset Allocation Fund’s bond investments among sub-asset classes according to the following target percentages, under normal market conditions:



Sub-Asset Class	Potential Asset Allocation Range	Underlying Funds Available
Intermediate-term bonds	55 - 90%	Core Bond Fund
		Inflation-Protected Securities Fund
Short-term bonds	0 - 25%	High Quality Bond Fund
High-yield bonds	0 - 20%	High Yield Bond Fund

Currently, TAM seeks to allocate an Asset Allocation Fund’s stock investments among sub-asset classes according to the following target percentages, under normal market conditions:



	Potential Asset	Underlying Funds
Sub-Asset Class	Allocation Range	Available
Large cap stocks	35 - 70%	Stock Index Fund
		Large Core Fund
		Large Value Fund
		Large Growth Fund
Small and mid cap stocks	10 - 40%	Mid Growth Fund
		Mid Value Fund
		Small Value Fund
		Small Core Fund
		Small Growth Fund
International stocks	10 - 40%	International Equity Fund

125

Notice of Privacy Policy

Protecting your privacy is very important to us. We want you to understand what information we collect and how we use it. We collect and use “nonpublic personal information” in connection with providing our customers with a broad range of financial products and services as effectively and conveniently as possible. We treat nonpublic personal information in accordance with our Privacy Policy.

What Information We Collect and From Whom We Collect It

We may collect nonpublic personal information about you from the following sources:

· Information we receive from you on applications or other forms, such as your name, address, and account number;

· Information about your transactions with us, our affiliates, or others, such as your account balance and purchase/redemption history; and

· Information we receive from non-affiliated third parties, including consumer reporting agencies.

What Information We Disclose and To Whom We Disclose It

Our Security Procedures

If you have any questions about our Privacy Policy, please call 1-888-233-4339 on any business day between 8 a.m. and 7 p.m. Eastern Time.

126

Both the investment returns and principal value of mutual funds will fluctuate over time so that shares, when redeemed, may be worth more or less than their original cost.

Transamerica Partners Funds

P.O. Box 9012

Clearwater, FL 33758-9012

Customer Service: 1-888-233-4339

Shareholder inquiries and transaction requests should be mailed to:

Transamerica Fund Services, Inc.

P.O. Box 219945

Kansas City, MO 64121-9945

The Investment Company Act File Numbers for Transamerica Partners Funds Group and Transamerica Asset Allocation Funds are 811-07674 and 811-07495.

TRANSAMERICA PARTNERS FUNDS GROUP
TRANSAMERICA ASSET ALLOCATION FUNDS
TRANSAMERICA PARTNERS INSTITUTIONAL FUNDS GROUP
TRANSAMERICA INSTITUTIONAL ASSET ALLOCATION FUNDS
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 2011
570 Carillon Parkway
St. Petersburg, Florida 33716
Customer Service (888) 233-4339 (toll free)


Funds		Ticker Symbols

Transamerica Partners Balanced		DVIBX
Transamerica Partners Core Bond		DVGCX
Transamerica Partners High Quality Bond		DVHQX
Transamerica Partners High Yield Bond		DVHYX
Transamerica Partners Inflation-Protected Securities		DVIGX
Transamerica Partners International Equity		DVIEX
Transamerica Partners Large Core		DVGIX
Transamerica Partners Large Growth		DVEGX
Transamerica Partners Large Value		DVEIX
Transamerica Partners Mid Growth		DVMGX
Transamerica Partners Mid Value		DVMVX
Transamerica Partners Money Market		DVMKX
Transamerica Partners Small Core		DVPEX
Transamerica Partners Small Growth		DVSGX
Transamerica Partners Small Value		DVSVX
Transamerica Partners Stock Index		DSKIX
Transamerica Asset Allocation – Intermediate Horizon		DVMSX
Transamerica Asset Allocation – Intermediate/Long Horizon		DVASX
Transamerica Asset Allocation – Long Horizon		DVLSX
Transamerica Asset Allocation – Short Horizon		DVCSX
Transamerica Asset Allocation – Short/Intermediate Horizon		DVSIX

Transamerica Partners Institutional Balanced		DIBFX
Transamerica Partners Institutional Core Bond		DICBX
Transamerica Partners Institutional High Quality Bond		DIHQX
Transamerica Partners Institutional High Yield Bond		DIHYX
Transamerica Partners Institutional Inflation-Protected Securities		DIIGX
Transamerica Partners Institutional International Equity		DIIEX
Transamerica Partners Institutional Large Core		DIGIX
Transamerica Partners Institutional Large Growth		DIEGX
Transamerica Partners Institutional Large Value		DIVIX
Transamerica Partners Institutional Mid Growth		DIMGX
Transamerica Partners Institutional Mid Value		DIMVX
Transamerica Partners Institutional Money Market		DFINX
Transamerica Partners Institutional Small Core		DISEX
Transamerica Partners Institutional Small Growth		DISGX
Transamerica Partners Institutional Small Value		DIVSX
Transamerica Partners Institutional Stock Index		DISFX
Transamerica Institutional Asset Allocation – Intermediate Horizon		DIIHX
Transamerica Institutional Asset Allocation – Intermediate/Long Horizon		DILHX
Transamerica Institutional Asset Allocation – Long Horizon		DILSX
Transamerica Institutional Asset Allocation – Short Horizon		DISHX
Transamerica Institutional Asset Allocation – Short/Intermediate Horizon		DIHSX

This Statement of Additional Information (“SAI”) sets forth information which may be of interest to investors but which is not necessarily included in the separate Prospectuses dated May 1, 2011, each as supplemented from time to time (each, a “Prospectus”),

for the funds. The SAI is incorporated by reference into each Prospectus. This SAI should be read only in conjunction with a Prospectus, a copy of which may be obtained by an investor without charge. To obtain a Prospectus free of charge, please contact Transamerica Fund Services, Inc. at the address and telephone number listed on the next page.

The annual and semi-annual reports to investors contain additional information about the funds’ investments and may be obtained free of charge by calling 1-888-233-4339. The annual reports contain financial statements that are incorporated herein by reference.

This SAI is NOT a Prospectus and is authorized for distribution to prospective investors only if preceded or accompanied by a Prospectus.

Transamerica Partners Funds Group
Transamerica Partners Institutional Funds Group
Transamerica Asset Allocation Funds
Transamerica Institutional Asset Allocation Funds
570 Carillon Parkway
St. Petersburg, Florida 33716
1-888-233-4339

Transamerica Partners Funds Group is a Massachusetts business trust whose shares currently are divided into separate series of shares, or funds. Each of the Transamerica Partners Balanced, Transamerica Partners Core Bond, Transamerica Partners High Quality Bond, Transamerica Partners High Yield Bond, Transamerica Partners Inflation-Protected Securities, Transamerica Partners International Equity, Transamerica Partners Large Core, Transamerica Partners Large Growth, Transamerica Partners Large Value, Transamerica Partners Mid Growth, Transamerica Partners Mid Value, Transamerica Partners Money Market, Transamerica Partners Small Core, Transamerica Partners Small Growth, Transamerica Partners Small Value, Transamerica Partners Stock Index, and each of the Transamerica Institutional Asset Allocation Funds, is a series of Transamerica Partners Funds Group. Transamerica Partners Funds Group II is a Massachusetts business trust whose shares currently are divided into separate series of shares, or funds. Each of the Transamerica Partners Institutional Balanced, Transamerica Partners Institutional Core Bond, Transamerica Partners Institutional High Quality Bond, Transamerica Partners Institutional High Yield Bond, Transamerica Partners Institutional Inflation-Protected Securities, Transamerica Partners Institutional International Equity, Transamerica Partners Institutional Large Core, Transamerica Partners Institutional Large Growth, Transamerica Partners Institutional Large Value, Transamerica Partners Institutional Mid Growth, Transamerica Partners Institutional Mid Value, Transamerica Partners Institutional Money Market, Transamerica Partners Institutional Small Core, Transamerica Partners Institutional Small Growth, Transamerica Partners Institutional Small Value, Transamerica Partners Institutional Stock Index and each of the Transamerica Asset Allocation Funds, is a series of Transamerica Partners Funds Group II. Currently, 21 funds are series of Transamerica Partners Funds Group and 21 funds are series of Transamerica Partners Funds Group II. This SAI relates to the shares of each fund listed on the first page hereof and includes information which may be of interest to shareholders but which is not necessarily included in each fund’s Prospectus.

Table of Contents


		Page

The Trusts		2
Investment Objectives, Policies and Associated Risk Factors		3
Determination of Net Asset Value; Valuation of Securities		38
Management		39
Investment Advisory Services		78
Administrator		108
Custodian and Transfer Agent		110
Miscellaneous		111
Taxation		111
Distribution Plans		115
Independent Registered Public Accounting Firm		123
Disclosure of Portfolio Holdings		123
Description of the Trusts; Fund Shares		126
Proxy Voting Guidelines and Procedures		128
Financial Statements		128
Appendix A – Proxy Voting Policies		A-1
Appendix B – Description of Security Ratings		B-1
Appendix C – More on Strategies and Risks		C-1

The Trusts

Each of Transamerica Partners Funds Group (the “Transamerica Partners Trust”) and Transamerica Partners Funds Group II (the “Transamerica Partners Institutional Trust” each a “Trust” and, together with the Transamerica Partners Trust, the “Trusts”) is an open-end management investment company. Transamerica Partners Trust was organized as a business trust under the laws of the Commonwealth of Massachusetts on April 23, 1993. Shares of the Transamerica Partners Trust are currently divided into 21 separate series described herein. Each series is diversified, except for the five Transamerica Asset Allocation funds, which are non-diversified series of the Trust.

Prior to May 1, 2008, the Transamerica Partners Trust’s name was Diversified Investors Funds Group.

Transamerica Partners Institutional Trust was organized as a business trust under the laws of the Commonwealth of Massachusetts on January 5, 1996. Shares of the Transamerica Partners Institutional Trust are currently divided into 21 separate series described herein. Each series is diversified, except for the five Transamerica Institutional Asset Allocation funds, which are non-diversified series of the Trust. Each of the Trusts may create additional series from time to time.

Prior to May 1, 2008, the Transamerica Partners Institutional Trust’s name was Diversified Investors Funds Group II.

Each of the Transamerica Partners Money Market, Bond, Balanced and Stock Funds and each of the Transamerica Partners Institutional Money Market, Bond, Balanced and Stock Funds seeks its investment objective by investing all of its assets in an underlying portfolio having the same investment objectives and policies as the applicable Transamerica Partners Fund and Transamerica Partners Institutional Fund. The funds and their corresponding portfolios are set forth below:


Fund		Portfolio
Transamerica Partners Balanced and Transamerica Partners Institutional Balanced		Balanced Portfolio
Transamerica Partners Core Bond and Transamerica Partners Institutional Core Bond		Core Bond Portfolio
Transamerica Partners High Quality Bond and Transamerica Partners Institutional High Quality Bond		High Quality Bond Portfolio
Transamerica Partners High Yield Bond and Transamerica Partners Institutional High Yield Bond		High Yield Bond Portfolio
Transamerica Partners Inflation-Protected Securities and Transamerica Partners Institutional Inflation-Protected Securities		Inflation-Protected Securities Portfolio
Transamerica Partners International Equity and Transamerica Partners Institutional International Equity		International Equity Portfolio
Transamerica Partners Large Core and Transamerica Partners Institutional Large Core		Large Core Portfolio
Transamerica Partners Large Growth and Transamerica Partners Institutional Large Growth		Large Growth Portfolio
Transamerica Partners Large Value and Transamerica Partners Institutional Large Value		Large Value Portfolio
Transamerica Partners Mid Growth and Transamerica Partners Institutional Mid Growth		Mid Growth Portfolio
Transamerica Partners Mid Value and Transamerica Partners Institutional Mid Value		Mid Value Portfolio
Transamerica Partners Money Market and Transamerica Partners Institutional Money Market		Money Market Portfolio
Transamerica Partners Small Core and Transamerica Partners Institutional Small Core		Small Core Portfolio
Transamerica Partners Small Growth and Transamerica Partners Institutional Small Growth		Small Growth Portfolio
Transamerica Partners Small Value and Transamerica Partners Institutional Small Value		Small Value Portfolio
Transamerica Partners Stock Index and Transamerica Partners Institutional Stock Index		S&P 500 Stock Master Portfolio (formerly, S&P 500 Index Master Portfolio)

All references in this SAI to one of these funds include the fund’s underlying portfolio, unless otherwise noted. Each of the Asset Allocation Funds seeks its investment objective by investing in a combination of the Money Market, Bond and Stock Funds.

Each of the portfolios (except the S&P 500 Stock Master Portfolio (formerly, S&P 500 Index Master Portfolio)) is a series of Transamerica Partners Portfolios. The S&P 500 Stock Master Portfolio⁽¹⁾is a series of Master Investment Portfolio. Transamerica Partners Portfolios and Master Investment Portfolio are referred to as the “Portfolio Trusts”.

Transamerica Asset Management, Inc. (“TAM”) is the investment adviser of each fund and each portfolio (except the S&P 500 Stock Master Portfolio). BlackRock Fund Advisors (“BFA”) is the investment adviser of the S&P 500 Stock Master Portfolio.

TAM delegates the daily management of each portfolio of which it is the investment adviser to one or more Sub-Advisers. TAM supervises and monitors the Sub-Advisers. The Sub-Advisers are as follows:


Portfolio	Sub-Adviser
Balanced Portfolio	BlackRock Financial Management, Inc.
	J.P. Morgan Investment Management Inc.

Core Bond Portfolio	BlackRock Financial Management, Inc.
High Quality Bond Portfolio	Merganser Capital Management, Inc.
High Yield Bond Portfolio	Eaton Vance Management
Inflation-Protected Securities Portfolio	BlackRock Financial Management, Inc.
International Equity Portfolio	Thornburg Investment Management, Inc.
Large Core Portfolio	Aronson Johnson Ortiz, LP
Large Growth Portfolio	Jennison Associates LLC
	Wellington Management Company, LLP
Large Value Portfolio	Aronson Johnson Ortiz, LP
Mid Growth Portfolio	Columbus Circle Investors
Mid Value Portfolio	Cramer, Rosenthal, McGlynn, LLC
	J.P. Morgan Investment Management Inc.
Money Market Portfolio	GE Asset Management, Incorporated
Small Core Portfolio	Fort Washington Investment Advisors, Inc.
	Invesco Advisers, Inc.
	Wellington Management Company, LLP
Small Growth Portfolio	Perimeter Capital Partners, LLC
Small Value Portfolio	Wellington Management Company, LLP



(1)	Standard & Poor’s does not sponsor the S&P 500 Stock Master Portfolio, nor is it affiliated in any way with the portfolio, BlackRock Fund Advisors or the S&P 500 Stock Master Portfolio. “Standard & Poor’s^®,” “S&P^®,” “S&P 500^®,” and “Standard & Poor’s 500^®” are trademarks of McGraw-Hill, Inc. The portfolio is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation or warranty, express or implied, regarding the advisability of investing in S&P 500 Stock Master Portfolio.

Investment Objectives, Policies, Practices and Associated Risk Factors

INVESTMENT OBJECTIVES

The investment objective of each fund is described in the Prospectus for that fund. There can, of course, be no assurance that a fund will achieve its investment objective. Each fund’s investment objective may be changed by the fund’s Board of Trustees without shareholder approval.

ADDITIONAL INFORMATION REGARDING INVESTMENT PRACTICES

Each fund’s principal investment strategies are set forth in the fund’s Prospectus. The following provides additional information about these principal strategies and describes other investment strategies and practices that may be used by a fund.. More on the funds’ strategies and risks is contained in Appendix C to the SAI.

The Stock Index Funds, while not prohibited from investing in the various types of securities described below or utilizing the investment techniques described below, will invest primarily in the stocks that make up the Standard & Poor’s 500 Stock Index (the “S&P 500 Index”), money market and other short-term instruments and S&P 500 Index futures.

If a percentage or a rating restriction on investment or utilization of assets is adhered to at the time an investment is made or assets are so utilized, a later change in such percentage resulting from changes in a fund’s or portfolio’s total assets or the value of a fund’s or portfolio’s securities, or a later change in the rating of a portfolio security, will not be considered a violation of the relevant restriction. There is no limit on the ability of a fund to make any type of investment or to invest in any type of security, except as expressly stated in the Prospectus or in this SAI or as imposed by law.

Recent Market Events

The fixed-income markets have experienced a period of extreme volatility which has negatively impacted market liquidity conditions. Initially, the concerns on the part of market participants were focused on the subprime segment of the mortgage-backed securities market. However, these concerns have since expanded to include a broad range of mortgage-and asset-backed and other fixed-income securities, including those rated investment grade, the U.S. and international credit and interbank money markets generally, and a wide range of financial institutions and markets, asset classes and sectors. As a result, fixed-income instruments have been experiencing liquidity issues, increased price volatility, credit downgrades, and increased likelihood of default. Securities that are less liquid are more difficult to value and may be hard to dispose of. Domestic and international equity markets have also been experiencing heightened volatility and turmoil, with issuers that have exposure to the real estate, mortgage and credit markets particularly affected. During times of market turmoil, investors tend to look to the safety of securities issued or backed by the U.S. Treasury, causing the prices of these securities to rise, and the yield to decline. These events and the continuing market upheavals may have an adverse effect on the funds.

In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support could negatively affect the value and liquidity of certain securities. In addition, legislation recently enacted in the U.S. calls for changes in many aspects of financial regulation. The impact of the legislation on the markets, and the practical implications for market participants, may not be fully known for some time.

Bank Obligations

Bank obligations include certificates of deposit, time deposits (including Eurodollar time deposits) and bankers’ acceptances and other short-term debt obligations issued by domestic banks, foreign subsidiaries or foreign branches of domestic banks, domestic and foreign branches of foreign banks, domestic savings and loan associations and other banking institutions. The funds have established certain minimum credit quality standards for bank obligations in which they invest.

Domestic commercial banks organized under federal law are supervised and examined by the Comptroller of the Currency and are required to be members of the Federal Reserve System and to be insured by the Federal Deposit Insurance Corporation (the “FDIC”). Domestic banks organized under state law are supervised and examined by state banking authorities but are members of the Federal Reserve System only if they elect to join. In addition, most state banks are insured by the FDIC (although such insurance may not be of material benefit to a fund, depending upon the principal amount of bank obligations of each held by the fund) and are subject to federal examination and to a substantial body of federal law and regulation. As a result of federal or state laws and regulations, domestic banks, among other things, generally are required to maintain specified levels of reserves, are limited in the amounts which they can loan to a single borrower, and are subject to other regulations designed to promote financial soundness. However, not all of such laws and regulations apply to the foreign branches of domestic banks.

Obligations of foreign branches and subsidiaries of domestic banks and domestic and foreign branches of foreign banks, such as certificates of deposit and time deposits, may be general obligations of the parent banks in addition to the issuing branch, or may be limited by the terms of a specific obligation and governmental regulation. Such obligations are subject to risks that are different from or are in addition to those of domestic banks. These risks include foreign economic and political developments, foreign governmental restrictions that may adversely affect payment of principal and interest on the obligations, foreign exchange controls and foreign withholding and other taxes on interest income. These foreign branches and subsidiaries are not necessarily subject to the same or similar regulatory requirements that apply to domestic banks, such as mandatory reserve requirements, loan limitations, and accounting, auditing and financial record keeping requirements. In addition, less information may be publicly available about a foreign branch of a domestic bank or about a foreign bank than about a domestic bank. A domestic branch of a foreign bank with assets in excess of $1 billion may or may not be subject to reserve requirements imposed by the Federal Reserve System or by the state in which the branch is located if the branch is licensed in that state.

In addition, branches licensed by the Comptroller of the Currency and branches licensed by certain states may be required to: (a) pledge to the regulator, by depositing assets with a designated bank within the state, a certain percentage of their assets as fixed from time to time by the appropriate regulatory authority; and (b) maintain assets within the state in an amount equal to a specified percentage of the aggregate amount of liabilities of the foreign bank payable at or through all of its agencies or branches within the state. The deposits of state branches may not necessarily be insured by the FDIC. In addition, there may be less publicly available information about a U.S. branch of a foreign bank than about a U.S. bank.

U.S. Government and Agency Securities

Examples of the types of U.S. government securities that a fund may hold include direct obligations of the U.S. Treasury, the obligations of the Federal Housing Administration, Farmers Home Administration, Small Business Administration, General Services Administration, Central Bank for Cooperatives, Federal Farm Credit Banks, Federal Home Loan Bank, Federal Intermediate Credit

Banks, Federal Land Banks and Maritime Administration. U.S government securities may be supported by the full faith and credit of the U.S. government (such as securities of the Small Business Administration); by the right of the issuer to borrow from the Treasury (such as securities of the Federal Home Loan Bank); by the discretionary authority of the U.S. government to purchase the agency’s obligations (such as securities of the Federal National Mortgage Association); or only by the credit of the issuing agency.

U.S. Treasury obligations include bills, notes and bonds issued by the U.S. Treasury and separately traded interest and principal component parts of these obligations that are transferable through the Federal book-entry system known as Separately Traded Registered Interest and Principal Securities (“STRIPS”). STRIPS are sold as zero coupon securities. These securities are usually structured with two classes that receive different portions of the interest and principal payments from the underlying obligation. The yield to maturity on the interest-only class is extremely sensitive to the rate of principal payments on the underlying obligation. The market value of the principal-only class generally is unusually volatile in response to changes in interest rates. See “Zero Coupon Obligations” below for more information.

U.S. Treasury securities differ only in their interest rates, maturities and times of issuance. Treasury Bills have initial maturities of one year or less; Treasury Notes have initial maturities of one to ten years; and Treasury Bonds generally have initial maturities of greater than ten years.

Certain federal agencies such as the Government National Mortgage Association (“GNMA”) have been established as instrumentalities of the U.S. government to supervise and finance certain types of activities. Some obligations issued or guaranteed by U.S. government agencies and instrumentalities, for example, GNMA pass-through certificates, are supported by the full faith and credit of the U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the right of the issuer to borrow from the Treasury; others, such as those issued by the Federal National Mortgage Association, by discretionary authority of the U.S. government to purchase certain obligations of the agency or instrumentality; and others, such as those issued by the Student Loan Marketing Association, only by the credit of the agency or instrumentality. While the U.S. government has historically provided financial support to such U.S. government-sponsored agencies or instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law.

In addition, obligations guaranteed by U.S. government agencies or government-sponsored entities include issues by non-government-sponsored entities (like financial institutions) that carry direct guarantees from U.S. government agencies as part of government initiatives in response to the market crisis or otherwise. In the case of obligations not backed by the full faith and credit of the United States, a fund must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment and may not be able to assert a claim against the United States itself in the event that the agency or instrumentality does not meet its commitments. Neither the U.S. government nor any of its agencies or instrumentalities guarantees the market value of the securities they issue. Therefore, the market value of such securities will fluctuate in response to changes in interest rates.

Exchange Rate-Related U.S. Government Securities. To the extent permitted by a fund’s investment policies, a fund may invest in U.S. government securities for which the principal repayment at maturity, while paid in U.S. dollars, is determined by reference to the exchange rate between the U.S. dollar and the currency of one or more foreign countries (“Exchange Rate-Related Securities”). The interest payable on these securities is denominated in U.S. dollars, is not subject to foreign currency risk and, in most cases, is paid at rates higher than most other U.S. government securities in recognition of the foreign currency risk component of Exchange Rate-Related Securities. Exchange Rate-Related Securities are issued in a variety of forms, depending on the structure of the principal repayment formula. The principal repayment formula may be structured so that the security holder will benefit if a particular foreign currency to which the security is linked is stable or appreciates against the U.S. dollar. In the alternative, the principal repayment formula may be structured so that the securityholder benefits if the U.S. dollar is stable or appreciates against the linked foreign currency. Finally, the principal repayment formula can be a function of more than one currency and, therefore, be designed as a combination of those forms.

Investments in Exchange Rate-Related Securities entail special risks. There is the possibility of significant changes in rates of exchange between the U.S. dollar and any foreign currency to which an Exchange Rate-Related Security is linked. If currency exchange rates do not move in the direction or to the extent anticipated by a sub-adviser at the time of purchase of the security, the amount of principal repaid at maturity might be significantly below the par value of the security, which might not be offset by the interest earned by a fund over the term of the security. The rate of exchange between the U.S. dollar and other currencies is determined by the forces of supply and demand in the foreign exchange markets. These forces are affected by the international balance of payments and other economic and financial conditions, government intervention, speculation and other factors. The imposition or modification of foreign exchange controls by the U.S. or foreign governments or intervention by central banks could also affect exchange rates. Finally, there is no assurance that sufficient trading interest to create a liquid secondary market will exist for a particular Exchange Rate-Related Security because of conditions in the debt and foreign currency markets. Illiquidity in the

forward foreign exchange market and the high volatility of the foreign exchange market may from time to time combine to make it difficult to sell an Exchange Rate-Related Security prior to maturity without incurring a significant price loss.

Collateralized Mortgage Obligations

A fund may invest a portion of its assets in collateralized mortgage obligations or “CMOs,” which are debt obligations collateralized by mortgage loans or mortgage pass-through securities (such collateral referred to collectively as “Mortgage Assets”). Unless the context indicates otherwise, all references herein to CMOs include multiclass pass-through securities.

Interest is paid or accrues on all classes of the CMOs on a monthly, quarterly or semi-annual basis. The principal of and interest on the Mortgage Assets may be allocated among the several classes of a CMO in innumerable ways. In a common structure, payments of principal, including any principal prepayments, on the Mortgage Assets are applied to the classes of a CMO in the order of their respective stated maturities or final distribution dates, so that no payment of principal will be made on any class of a CMO until all other classes having an earlier stated maturity or final distribution date have been paid in full. Certain CMOs may be stripped (securities which provide only the principal or interest factor of the underlying security).

A fund may also invest in parallel pay CMOs and Planned Amortization Class CMOs (“PAC Bonds”). Parallel pay CMOs are structured to provide payments of principal on each payment date to more than one class. These simultaneous payments are taken into account in calculating the stated maturity date or final distribution date of each class, which, as with other CMO structures, must be retired by its stated maturity date or final distribution date but may be retired earlier.

Mortgage-Backed Securities

A fund may invest in mortgage-backed securities. Mortgage-backed securities are securities representing interests in “pools” of mortgage loans. Monthly payments of interest and principal by the individual borrowers on mortgages are passed through to the holders of the securities (net of fees paid to the issuer or guarantor of the securities) as the mortgages in the underlying mortgage pools are paid off. The average lives of mortgage-backed securities are variable when issued because their average lives depend on prepayment rates. The average life of these securities is likely to be substantially shorter than their stated final maturity as a result of unscheduled principal prepayment. Prepayments on underlying mortgages result in a loss of anticipated interest, and all or part of a premium if any has been paid, and the actual yield (or total return) to a fund may be different than the quoted yield on the securities. Mortgage prepayments generally increase with falling interest rates and decrease with rising interest rates. Like other fixed income securities, when interest rates rise, the value of a mortgage-backed security generally will decline; however, when interest rates are declining, the value of mortgage-backed securities with prepayment features may not increase as much as that of other fixed-income securities. In the event of an increase in interest rates which results in a decline in mortgage prepayments, the anticipated maturity of mortgage-backed securities held by a fund may increase, effectively changing a security which was considered short or intermediate-term at the time of purchase into a long-term security. Long-term securities generally fluctuate more widely in response to changes in interest rates than short or intermediate-term securities. A fund’s yield may be affected by reinvestment of prepayments at higher or lower rates than the original investment. For these and other reasons, a mortgage-related security’s average maturity may be shorted or lengthened as a result of interest rate fluctuations; and, therefore, it is not possible to predict accurately the security’s return.

Payment of principal and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed by the full faith and credit of the U.S. government (in the case of securities guaranteed by GNMA); or guaranteed by agencies or instrumentalities of the U.S. government (such as Fannie Mae (formally known as the Federal National Mortgage Association)) or Freddie Mac (formally known as the Federal Home Loan Mortgage Corporation which are supported only by the discretionary authority of the U.S. government to purchase the agency’s obligations). The U.S. government has provided recent financial support to Fannie Mae and Freddie Mac, but there can be no assurances that it will support these or other government-sponsored entities in the future. Mortgage-backed securities may also be issued by non-governmental issuers (such as commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers). Some of these mortgage-backed securities may be supported by various forms of insurance or guarantees.

Interests in pools of mortgage-related securities differ from other forms of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates. Instead, these securities provide a monthly payment which consists of both interest and principal payments. In effect, these payments are a “pass-through” of the monthly payments made by the individual borrowers on their mortgage loans, net of any fees paid to the issuer or guarantor of such securities. Additional payments are caused by prepayments of principal resulting from the sale, refinancing or foreclosure of the underlying property, net of fees or costs which may be incurred. Some mortgage-backed securities (such as securities issued by the GNMA) are described as “modified pass-through.” These securities entitle the holder to receive all interest and principal payments

owed on the mortgages in the mortgage pool, net of certain fees, at the scheduled payment dates regardless of whether the mortgagor actually makes the payment.

The repayment of certain mortgage-related securities depends primarily on the cash collections received from the issuer’s underlying asset portfolio and, in certain cases, the issuer’s ability to issue replacement securities (such as asset-backed commercial paper). As a result, a fund could experience losses in the event of credit or market value deterioration in the issuer’s underlying portfolio, mismatches in the timing of the cash flows of the underlying asset interests and the repayment obligations of maturing securities, or the issuer’s inability to issue new or replacement securities. This is also true for other asset-backed securities. Upon the occurrence of certain triggering events or defaults, the investors in a security held by a fund may become the holders of underlying assets at a time when those assets may be difficult to sell or may be sold only at a loss. If mortgage-backed securities or asset-backed securities are bought at a discount, however, both scheduled payments of principal and unscheduled prepayments will increase current and total returns and will accelerate the recognition of income which, when distributed to shareholders, will be taxable as ordinary income.

The principal governmental guarantor of mortgage-backed securities is GNMA. GNMA is a wholly owned U.S. government corporation within the Department of Housing and Urban Development. GNMA is authorized to guarantee, with the full faith and credit of the U.S. government, the timely payment of principal and interest on securities issued by institutions approved by GNMA (such as savings and loan institutions, commercial banks and mortgage bankers) and backed by pools of Federal Housing Administration (“FHA”) insured or Veterans Administration (“VA”) guaranteed mortgages. These guarantees, however, do not apply to the market value or yield of mortgage-backed securities. GNMA securities are often purchased at a premium over the maturity value of the underlying mortgages. This premium is not guaranteed and will be lost if prepayment occurs.

Government-related guarantors (i.e., whose guarantees are not backed by the full faith and credit of the U.S. government) include Fannie Mae and Freddie Mac. Fannie Mae is a government-sponsored corporation owned entirely by private stockholders. It is subject to general regulation by the Secretary of Housing and Urban Development. Fannie Mae purchases conventional residential mortgages (i.e., mortgages not insured or guaranteed by any governmental agency) from a list of approved seller/servicers which include state and federally chartered savings and loan associations, mutual savings banks, commercial banks, credit unions and mortgage bankers. Pass-through securities issued by Fannie Mae are guaranteed as to timely payment by Fannie Mae of principal and interest.

Freddie Mac is also a government-sponsored corporation owned by private stockholders. Freddie Mac issues Participation Certificates (“PCs”) which represent interests in conventional mortgages (i.e., not federally insured or guaranteed) for Freddie Mac’s national portfolio. Freddie Mac guarantees timely payment of interest and ultimate collection of principal regardless of the status of the underlying mortgage loans.

Commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass through pools of mortgage loans. Such issuers may also be the originators and/or servicers of the underlying mortgage-related securities. Pools created by such non-governmental issuers generally offer a higher rate of interest than government and government-related pools because there are no direct or indirect government or agency guarantees of payments in the former pools. Unlike mortgage-backed securities issued or guaranteed by the U.S. government or one of its sponsored entities, mortgage-backed securities issued by private issuers do not have a government or government-sponsored entity guarantee, but may have credit enhancement provided by external entities such as banks or financial institutions or achieved through the structuring of the transaction itself. Examples of such credit support arising out of the structure of the transaction include the issue of senior and subordinated securities (e.g., the issuance of securities by a special purpose vehicle in multiple classes or “tranches,” with one or more classes being senior to other subordinated classes as to the payment of principal and interest, with the result that defaults on the underlying mortgage loans are borne first by the holders of the subordinated class); creation of “reserve funds” (in which case cash or investments, sometimes funded from a portion of the payments on the underlying mortgage loans, are held in reserve against future losses); and “over-collateralization” (in which case the scheduled payments on, or the principal amount of, the underlying mortgage loans exceeds that required to make payment of the securities and pay any servicing or other fees). However, there can be no guarantee that credit enhancements, if any, will be sufficient to prevent losses in the event of defaults on the underlying mortgage loans. A fund may also buy mortgage-related securities without insurance or guarantees.

If a fund purchases subordinated mortgage-backed securities, the payments of principal and interest on the fund’s subordinated securities generally will be made only after payments are made to the holders of securities senior to the fund’s securities. Therefore, if there are defaults on the underlying mortgage loans, a fund will be less likely to receive payments of principal and interest, and will be more likely to suffer a loss. Privately issued mortgage-backed securities are not traded on an exchange; and there may be a limited market for the securities, especially when there is a perceived weakness in the mortgage and real estate market sectors. Without an active trading market, mortgage-backed securities held in a fund’s portfolio may be particularly difficult to value because of the complexities involved in assessing the value of the underlying mortgage loans.

In addition, mortgage-backed securities that are issued by private issuers are not subject to the underwriting requirements for the underlying mortgages that are applicable to those mortgage-backed securities that have a government or government-sponsored entity guarantee. As a result, the mortgage loans underlying private mortgage-backed securities may, and frequently do, have less favorable collateral, credit risk or other underwriting characteristics than government or government-sponsored mortgage-backed securities and have wider variances in a number of terms including interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently include second mortgages, high loan-to-value mortgages and manufactured housing loans. The coupon rates and maturities of the underlying mortgage loans in a private-label mortgage-backed securities pool may vary to a greater extent than those included in a government guaranteed pool, and the pool may include subprime mortgage loans. Subprime loans refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their loans. For these reasons, the loans underlying these securities have had, in many cases, higher default rates than those loans that meet government underwriting requirements.

The risk of non-payment is greater for mortgage-backed securities that are backed by mortgage pools that contain subprime loans, but a level of risk exists for all loans. Market factors adversely affecting mortgage loan repayments may include a general economic turn-down, high unemployment, a general slowdown in the real estate market, a drop in the market prices of real estate, or an increase in interest rates resulting in higher mortgage payments by holders of adjustable rate mortgages.

Privately issued mortgage-backed securities are not traded on an exchange and there may be a limited market for the securities, especially when there is a perceived weakness in the mortgage and real estate market sectors. Without an active trading market, mortgage-backed securities may be particularly difficult to value because of the complexities involved in assessing the value of the underlying mortgage loans.

Asset-Backed Securities

Asset-backed securities are generally issued as pass-through certificates, which represent undivided fractional ownership interests in the underlying pool of assets, or as debt instruments, which are generally issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. The pool of assets generally represents the obligations of a number of different parties. Asset-backed securities frequently carry credit protection in the form of extra collateral, subordinated certificates, cash reserve accounts, letters of credit or other enhancements. For example, payments of principal and interest may be guaranteed up to certain amounts and for a certain time period by a letter of credit or other enhancement issued by a financial institution unaffiliated with the entities issuing the securities. Assets which, to date, have been used to back asset-backed securities include motor vehicle installment sales contracts or installment loans secured by motor vehicles, and receivables from revolving credit (credit card) agreements. Other types of asset-backed securities include those that represent interest in pools of corporate bonds (such as collateralized bond obligations or “CBOs”), bank loans (such as collateralized loan obligations or “CLOs”) and other debt obligations (such as collateralized debt obligations or “CDOs”).

Asset-backed security values may also be affected by factors such as changes in interest rates, the availability of information concerning the pool and its structure, the creditworthiness of the servicing agent for the pool, the originators of the underlying loans or receivables, or the entities providing credit enhancement (if any), or the exhaustion of any credit enhancement. The risks of investing in asset-backed securities ultimately depend upon the payment of the consumer loans by the individual borrowers. In its capacity as purchaser of an asset-backed security, a fund would generally have no recourse to the entity that originated the loans in the event of default by the borrower. If a letter of credit or other form of credit enhancement is exhausted or otherwise unavailable, holders of asset-backed securities may experience delays in payments or losses if the full amounts due on underlying assets are not realized. Asset-backed securities may also present certain additional risks related to the particular type of collateral. For example, credit card receivables are generally unsecured and the debtors are entitled to the protection of a number of state and federal consumer credit laws, many of which give such debtors the right to set off certain amounts owed on the credit cards, thereby reducing the balance due. Asset-backed securities are also subject to prepayment risk, which may shorten the weighted average life of such securities and may lower their return. In addition, asset backed securities are subject to the same types of risks relating to the issuer’s underlying assets as are mortgage-backed securities.

A fund may purchase commercial paper, including asset-backed commercial paper (“ABCP”) that is issued by structured investment vehicles or other conduits. These conduits may be sponsored by mortgage companies, investment banking firms, finance companies, hedge funds, private equity firms and special purpose finance entities. ABCP typically refers to a debt security with an original term to maturity of up to 270 days, the payment of which is supported by cash flows from underlying assets, or one or more liquidity or credit support providers, or both. Assets backing ABCP, which may be included in revolving pools of assets with large numbers of obligors, include credit card, car loan and other consumer receivables and home or commercial mortgages, including subprime mortgages. The repayment of ABCP issued by a conduit depends primarily on the cash collections received from the conduit’s underlying asset portfolio and the conduit’s ability to issue new ABCP. Therefore, there could be losses to a fund investing in ABCP

in the event of credit or market value deterioration in the conduit’s underlying portfolio, mismatches in the timing of the cash flows of the underlying asset interests and the repayment obligations of maturing ABCP, or the conduit’s inability to issue new ABCP. To protect investors from these risks, ABCP programs may be structured with various protections, such as credit enhancement, liquidity support, and commercial paper stop-issuance and wind-down triggers. However, there can be no guarantee that these protections will be sufficient to prevent losses to investors in ABCP.

Some ABCP programs provide for an extension of the maturity date of the ABCP if, on the related maturity date, the conduit is unable to access sufficient liquidity through the issue of additional ABCP. This may delay the sale of the underlying collateral, and a fund may incur a loss if the value of the collateral deteriorates during the extension period. Alternatively, if collateral for ABCP deteriorates in value, the collateral may be required to be sold at inopportune times or at prices insufficient to repay the principal and interest on the ABCP. ABCP programs may provide for the issuance of subordinated notes as an additional form of credit enhancement. The subordinated notes are typically of a lower credit quality and have a higher risk of default. A fund purchasing these subordinated notes will therefore have a higher likelihood of loss than investors in the senior notes.

Asset-backed securities are relatively new and untested instruments and may be subject to greater risk of default during periods of economic downturn than other securities, which could result in possible losses to a fund. In addition, the secondary market for asset-backed securities may not be as liquid as the market for other securities which may result in a fund’s experiencing difficulty in valuing asset-backed securities.

Variable Rate and Floating Rate Securities

The funds may purchase floating and variable rate demand notes and bonds, which are obligations ordinarily having stated maturities in excess of 397 days, but which permit the holder to demand payment of principal at any time, or at specified intervals not exceeding 397 days, in each case upon not more than 30 days’ notice. Variable rate demand notes include master demand notes which are obligations that permit a fund to invest fluctuating amounts, which may change daily without penalty, pursuant to direct arrangements between the fund, as lender, and the borrower. The interest rates on these notes fluctuate from time to time. The issuer of such obligations normally has a corresponding right, after a given period, to prepay in its discretion the outstanding principal amount of the obligations plus accrued interest upon a specified number of days’ notice to the holders of such obligations. The interest rate on a floating rate demand obligation is based on a known lending rate, such as a bank’s prime rate, and is adjusted automatically each time such rate is adjusted. The interest rate on a variable rate demand obligation is adjusted automatically at specified intervals. The interest rate on these securities may be reset daily, weekly, quarterly, or some other reset period and may have a floor or ceiling on interest rate charges. There is a risk that the current interest rate on such obligations may not accurately reflect existing market interest rates. Frequently, such obligations are backed by letters of credit or other credit support arrangements provided by banks. Because these obligations are direct lending arrangements between the lender and borrower, it is not contemplated that such instruments generally will be traded, and there generally is no established secondary market for these obligations, although they are redeemable at face value. Accordingly, where these obligations are not secured by letters of credit or other credit support arrangements, a fund’s right to redeem is dependent on the ability of the borrower to pay principal and interest on demand. Such obligations frequently are not rated by credit rating agencies, and a fund may invest in obligations which are not so rated only if the fund’s sub-adviser determines that at the time of investment the obligations are of comparable quality to the other obligations in which the fund may invest. The applicable sub-adviser, on behalf of a fund, will consider on an ongoing basis the creditworthiness of the issuers of the floating and variable rate demand obligations held by the fund. The funds will not invest more than 15% (10% in the case of the Money Market Funds, but 5% from and after May 28, 2010) of the value of their net assets in floating or variable rate demand obligations as to which they cannot exercise the demand feature on not more than seven days’ notice if there is no secondary market available for these obligations, and in other securities that are not readily marketable. See “Illiquid Securities” below.

Participation Interests

A fund may purchase from financial institutions participation interests in securities in which such fund may invest. A participation interest gives a fund an undivided interest in the security in the proportion that the fund’s participation interest bears to the total principal amount of the security. These instruments may have fixed, floating or variable rates of interest, with remaining maturities of 13 months or less. If the participation interest is unrated, or has been given a rating below that which is permissible for purchase by the fund, the participation interest will be backed by an irrevocable letter of credit or guarantee of a bank, or the payment obligation otherwise will be collateralized by U.S. government securities, or, in the case of unrated participation interests, the fund’s sub-adviser must have determined that the instrument is of comparable quality to those instruments in which a fund may invest. For certain participation interests, a fund will have the right to demand payment, on not more than seven days’ notice, for all or any part of the fund’s participation interest in the security, plus accrued interest. As to these instruments, a fund intends to exercise its right to demand payment only upon a default under the terms of the security, as needed to provide liquidity to meet redemptions, or to maintain or improve the quality of its investment portfolio. A fund will not invest more than 15% (10% in the case of each Money

Market Fund, but 5% from and after May 28, 2010) of its net assets in participation interests that do not have this demand feature, and in other securities that are not readily marketable. See “Illiquid Securities” below.

Illiquid Securities

Each fund may invest up to 15% (10% for each Money Market Fund, but 5% from and after May 28, 2010) of its net assets in illiquid securities, including restricted securities that are illiquid.

Historically, illiquid securities have included securities subject to contractual or legal restrictions on resale because they have not been registered under the Securities Act of 1933, as amended (the “1933 Act”), securities which are otherwise not readily marketable and repurchase agreements having a maturity of longer than seven days. Securities which have not been registered under the 1933 Act are referred to as private placements or restricted securities and are purchased directly from the issuer or in the secondary market. Mutual funds do not typically hold a significant amount of these restricted or other illiquid securities because of the potential for delays on resale and uncertainty in valuation. The absence of a trading market can make it difficult to ascertain a market value for these investments. In addition, limitations on resale may have an adverse effect on the marketability of portfolio securities and a mutual fund might be unable to dispose of restricted or other illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemptions within seven days. A mutual fund might also have to register such restricted securities in order to dispose of them which, if possible at all, would result in additional expense and delay. Adverse market conditions could impede such a public offering of securities.

In recent years, however, a large institutional market has developed for certain securities that are not registered under the 1933 Act, including repurchase agreements, commercial paper, foreign securities, municipal securities and corporate bonds and notes. Institutional investors depend on an efficient institutional market in which the unregistered security can be readily resold or on an issuer’s ability to honor a demand for repayment. The fact that there are contractual or legal restrictions on resale of such investments to the general public or to certain institutions may not be indicative of their liquidity.

Rule 144A under the 1933 Act allows a broader institutional trading market for securities otherwise subject to restriction on their resale to the general public. Rule 144A establishes a “safe harbor” from the registration requirements of the 1933 Act for resales of certain securities to qualified institutional buyers.

The applicable sub-adviser will monitor the liquidity of Rule 144A securities for each fund under the supervision of the applicable portfolio Trust’s or Trust’s Board of Trustees. In reaching liquidity decisions, the sub-adviser will consider, among other things, the following factors: (a) the frequency of trades and quotes for the security, (b) the number of dealers and other potential purchasers wishing to purchase or sell the security, (c) dealer undertakings to make a market in the security and (d) the nature of the security and of the marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of the transfer).

The liquidity of Rule 144A securities could be impaired if qualified institutional buyers become, for a time, uninterested in purchasing Rule 144A securities.

Unsecured Promissory Notes

A fund also may purchase unsecured promissory notes (“Notes”) which are not readily marketable and have not been registered under the 1933 Act, provided such investments are consistent with the fund’s investment objective. The Notes purchased by the fund will have remaining maturities of 13 months or less. The fund will invest no more than 15% (10% in the case of each Money Market Fund, but 5% from and after May 28, 2010) of its net assets in such Notes and in other securities that are not readily marketable (which securities would include floating and variable rate demand obligations as to which the fund cannot exercise the demand feature described above and as to which there is no secondary market). See “Illiquid Securities” above.

Repurchase Agreements

Repurchase agreements are agreements by which a person purchases a security and simultaneously commits to resell that security to the seller (which is usually a member bank of the Federal Reserve System or a member firm of the New York Stock Exchange (or a subsidiary thereof)) at an agreed-upon date within a number of days (usually not more than seven) from the date of purchase. The resale price reflects the purchase price plus an agreed-upon market rate of interest which is unrelated to the coupon rate or maturity of the purchased security. A repurchase agreement involves the obligation of the seller to pay the agreed-upon price, which obligation is in effect secured by the value of the underlying security, usually U.S. government or government agency issues. Under the Investment Company Act of 1940, as amended (the “1940 Act”), repurchase agreements may be considered to be loans by the buyer. Repurchase

agreements involve the risk that the seller will fail to repurchase the security, as agreed. In that case, a fund will bear the risk of market value fluctuations until the security can be sold and may encounter delays and incur costs in liquidating the security. In the event of bankruptcy or insolvency of the seller, delays and costs are incurred. If the seller defaults, the underlying security constitutes collateral for the seller’s obligation to pay. Repurchase agreements involve certain risks in the event of a default or insolvency of the other party, including possible delays or restrictions upon the fund’s ability to dispose of the underlying securities, the risk of a possible decline in the value of the underlying securities during the period in which the fund seeks to assert its right to them, the risk of incurring expenses associated with asserting those rights and the risk of losing all or part of the income from the agreement. All repurchase agreements entered into by the funds are fully collateralized, with such collateral being marked to market daily.

The funds may, together with other registered investment companies managed by the funds’ sub-advisers or their affiliates, transfer uninvested cash balances into a single joint account, the daily aggregate balance of which will be invested in one or more repurchase agreements, including tri-party subcustody repurchase arrangements.

Borrowings

A fund may engage in borrowing transactions as a means of raising cash to satisfy redemption requests, for other temporary or emergency purposes or, to the extent permitted by its investment policies, to raise additional cash to be invested by the fund’s portfolio managers in other securities or instruments in an effort to increase the fund’s investment returns. Reverse repurchase agreements may be considered to be a type of borrowing.

When a fund invests borrowing proceeds in other securities, the fund will be at risk for any fluctuations in the market value of the securities in which the proceeds are invested. Like other leveraging risks, this makes the value of an investment in a fund more volatile and increases the fund’s overall investment exposure. In addition, if a fund’s return on its investment of the borrowing proceeds does not equal or exceed the interest that a fund is obligated to pay under the terms of a borrowing, engaging in these transactions will lower the fund’s return.

A fund may be required to liquidate portfolio securities at a time when it would be disadvantageous to do so in order to make payments with respect to its borrowing obligations. This could adversely affect the portfolio managers’ strategy and result in lower fund returns. Interest on any borrowings will be a fund expense and will reduce the value of a fund’s shares.

A fund may borrow on a secured or on an unsecured basis. If a fund enters into a secured borrowing arrangement, a portion of the fund’s assets will be used as collateral. During the term of the borrowing, the fund will remain at risk for any fluctuations in the market value of these assets in addition to any securities purchased with the proceeds of the loan. In addition, a fund may be unable to sell the collateral at a time when it would be advantageous to do so, which could adversely affect the portfolio managers’ strategy and result in lower fund returns. The fund would also be subject to the risk that the lender may file for bankruptcy, become insolvent, or otherwise default on its obligations to return the collateral to the fund. In the event of a default by the lender, there may be delays, costs and risks of loss involved in a fund’s exercising its rights with respect to the collateral or those rights may be limited by other contractual agreements or obligations or by applicable law.

The 1940 Act requires a fund to maintain at all times an “asset coverage” of at least 300% of the amount of its borrowings. Asset coverage means the ratio that the value of the fund’s total assets, minus liabilities other than borrowings, bears to the aggregate amount of all borrowings. Although complying with this guideline would have the effect of limiting the amount that a fund may borrow, it does not otherwise mitigate the risks of entering into borrowing transactions.

Reverse Repurchase Agreements

Subject to its investment restrictions, a fund may enter into reverse repurchase agreements. A reverse repurchase agreement has the characteristics of a secured borrowing by a fund and creates leverage in a fund’s portfolio. In a reverse repurchase transaction, a fund sells a portfolio instrument to another person, such as a financial institution or broker/dealer, in return for cash. At the same time, a fund agrees to repurchase the instrument at an agreed-upon time and at a price that is greater than the amount of cash that the fund received when it sold the instrument, representing the equivalent of an interest payment by the fund for the use of the cash. During the term of the transaction, a fund will continue to receive any principal and interest payments (or the equivalent thereof) on the underlying instruments.

A fund may engage in reverse repurchase agreements as a means of raising cash to satisfy redemption requests or for other temporary or emergency purposes. Unless otherwise limited in its prospectus or this SAI, a fund may also engage in reverse repurchase agreements to the extent permitted by its fundamental investment policies in order to raise additional cash to be invested by the fund’s portfolio managers in other securities or instruments in an effort to increase the fund’s investment returns.

During the term of the transaction, a fund will remain at risk for any fluctuations in the market value of the instruments subject to the reverse repurchase agreement as if it had not entered into the transaction. When a fund reinvests the proceeds of a reverse repurchase agreement in other securities, the fund will also be at risk for any fluctuations in the market value of the securities in which the proceeds are invested. Like other leveraging risks, this makes the value of an investment in a fund more volatile and increases the fund’s overall investment exposure. In addition, if a fund’s return on its investment of the proceeds of the reverse repurchase agreement does not equal or exceed the implied interest that it is obligated to pay under the reverse repurchase agreement, engaging in the transaction will lower the fund’s return.

When a fund enters into a reverse repurchase agreement, it is subject to the risk that the buyer under the agreement may file for bankruptcy, become insolvent, or otherwise default on its obligations to the fund. In the event of a default by the counterparty, there may be delays, costs and risks of loss involved in a fund’s exercising its rights under the agreement, or those rights may be limited by other contractual agreements or obligations or by applicable law.

In addition, a fund may be unable to sell the instruments subject to the reverse repurchase agreement at a time when it would be advantageous to do so, or may be required to liquidate portfolio securities at a time when it would be disadvantageous to do so in order to make payments with respect to its obligations under a reverse repurchase agreement. This could adversely affect the portfolio managers’ strategy and result in lower fund returns. At the time a fund enters into a reverse repurchase agreement, the fund is required to set aside cash or other appropriate liquid securities in the amount of the fund’s obligation under the reverse repurchase agreement or take certain other actions in accordance with SEC guidelines, which may affect a fund’s liquidity and ability to manage its assets. Although complying with SEC guidelines would have the effect of limiting the amount of fund assets that may be committed to reverse repurchase agreements and other similar transactions at any time, it does not otherwise mitigate the risks of entering into reverse repurchase agreements.

Foreign Securities — All Funds

The funds may invest their assets in securities of foreign issuers. Investing in securities issued by companies whose principal business activities are outside the United States may involve significant risks not present in domestic investments. For example, there is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Foreign issuers are generally not bound by uniform accounting, auditing and financial reporting requirements comparable to those applicable to domestic issuers. Investments in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, brokerage or other taxation, limitation on the removal of funds or other assets of a fund, political or financial instability or diplomatic and other developments which would affect such investments. Further, economies of particular countries or areas of the world may differ favorably or unfavorably from the economy of the United States.

It is anticipated that in most cases the best available market for foreign securities would be on exchanges or in over-the-counter markets located outside the United States. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable United States companies. The less liquid a market, the more difficult it may be for a fund to price its portfolio securities accurately or to dispose of such securities at the times determined by a sub-adviser to be appropriate. The risks associated with reduced liquidity may be particularly acute in situations in which a fund’s operations require cash, such as in order to meet redemptions and to pay its expenses. Foreign security trading practices, including those involving securities settlement where a fund’s assets may be released prior to receipt of payment, may expose a fund to increased risk in the event of a failed trade or the insolvency of a foreign broker-dealer. In addition, foreign brokerage commissions are generally higher than commissions on securities traded in the United States and may be non-negotiable. In general, there is less overall governmental supervision and regulation of foreign securities exchanges, brokers and listed companies than in the United States.

A fund may be subject to taxes, including withholding taxes imposed by certain non-U.S. countries on income (possibly including, in some cases, capital gains) earned with respect to the fund’s investments in such countries. These taxes will reduce the return achieved by the fund. Treaties between the U.S. and such countries may reduce the otherwise applicable tax rates.

Additionally, the operating expenses of a fund making such investment can be expected to be higher than those of an investment company investing exclusively in U.S. securities, since the costs of investing in foreign securities are higher than the costs of investing exclusively in U.S. securities. Custodian services and other costs such as valuation costs and communication costs relating to investment in international securities markets generally are more expensive than in the United States.

U.S. Companies

For the purposes of Transamerica Partners Balanced and Transamerica Partners Institutional Balanced, “U.S. companies” will be considered companies that derive at least 50% of their revenues or profits from the United States or have at least 50% of their total assets situated in the United States.

Money Market Funds

Each Money Market Fund may invest in the following foreign securities: (a) U.S. dollar-denominated obligations of foreign branches and subsidiaries of domestic banks and foreign banks (such as Eurodollar CDs, which are U.S. dollar-denominated CDs issued by branches of foreign and domestic banks located outside the United States; Eurodollar TDs (“ETDs”), which are U.S. dollar-denominated deposits in a foreign branch of a foreign or domestic bank; and Canadian TDs, which are essentially the same as ETDs except they are issued by branches of major Canadian banks); (b) high quality, U.S. dollar-denominated short-term bonds and notes (including variable amount master demand notes) issued by foreign corporations (including Canadian commercial paper, which is commercial paper issued by a Canadian corporation or a Canadian subsidiary of a U.S. corporation, and Europaper, which is U.S.

dollar-denominated commercial paper of a foreign issuer); and (c) U.S. dollar-denominated obligations issued or guaranteed by one or more foreign governments or any of their political subdivisions, agencies or instrumentalities that are determined by the fund’s sub-adviser to be of comparable quality to the other obligations in which the Money Market Fund may invest. Such securities also include debt obligations of supranational entities. Supranational entities include international organizations designated or supported by governmental entities to promote economic reconstruction or development and international banking institutions and related government agencies. Examples include the International Bank for Reconstruction and Development (the “World Bank”), the European Coal and Steel Community, the Asian Development Bank and the InterAmerican Development Bank.

Funds other than the Money Market Funds

Not more than 5% of a fund’s assets may be invested in closed-end investment companies which primarily hold foreign securities. Investments in such companies entail the risk that the market value of such investments may be substantially less than their net asset value and that there would be duplication of investment management and other fees and expenses.

American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”), Global Depositary Receipts (“GDRs”) and other forms of depositary receipts for securities of foreign issuers provide an alternative method for a fund to make foreign investments. These securities are not denominated in the same currency as the securities into which they may be converted and fluctuate in value based on the underlying security. Generally, ADRs, in registered form, are designed for use in U.S. securities markets and EDRs and GDRs, in bearer form, are designed for use in European and global securities markets. ADRs are receipts typically issued by a U.S. bank or trust company evidencing ownership of the underlying securities. EDRs and GDRs are European and global receipts evidencing a similar arrangement.

The funds may invest in foreign securities that impose restrictions on transfer within the United States or to United States persons. Although securities subject to such transfer restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that are not subject to such restrictions.

The funds may invest in securities of emerging market countries. Emerging markets countries may include, without limitation, any country which, at the time of investment, is categorized by the World Bank in its annual categorization as middle- or low-income. These securities may be U.S. dollar denominated or non-U.S. dollar denominated and include: (a) debt obligations issued or guaranteed by foreign national, provincial, state, municipal or other governments with taxing authority or by their agencies or instrumentalities, including Brady Bonds; (b) debt obligations of supranational entities; (c) debt obligations (including dollar and non-dollar denominated) and other debt securities of foreign corporate issuers; and (d) non-dollar denominated debt obligations of U.S. corporate issuers. A fund may also invest in securities denominated in currencies of emerging market countries. There is no minimum rating criteria for a fund’s investments in such securities.

Emerging markets and certain other non-U.S. countries may be subject to a greater degree of economic, political and social instability. Such instability may result from, among other things: (i) authoritarian governments or military involvement in political and economic decision making; (ii) popular unrest associated with demands for improved economic, political and social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and (v) ethnic, religious and racial disaffection and conflict. Such economic, political and social instability could significantly disrupt the financial markets in such countries and the ability of the issuers in such countries to repay their obligations. Investing in emerging countries also involves the risk of expropriation, nationalization, confiscation of assets and property or the imposition of restrictions on foreign investments and on repatriation of capital invested. In the event of such expropriation, nationalization or other confiscation in any emerging country, a fund could lose its entire investment in that country. Certain emerging market countries restrict or control foreign investment in their securities markets to varying degrees. These restrictions may limit a fund’s investment in those markets and may increase the expenses of the fund. In addition, the repatriation of both investment income and capital from certain markets in the region is subject to restrictions such as the need for certain governmental consents. Even where there is no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects of a fund’s operation. Economies in individual non-U.S. countries may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rates of inflation, currency valuation, capital reinvestment, resource self-sufficiency and balance of payments positions. Many non-U.S. countries have experienced substantial, and in some cases extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had, and may continue to have, very negative effects on the economies and securities markets of certain emerging countries. Economies in emerging countries generally are dependent heavily upon international trade and, accordingly, have been and may continue to be affected adversely by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. The economies, securities and currency markets of many emerging markets have experienced significant disruption and declines. There can be no assurances that these economic and market disruptions will not continue.

Forward Foreign Currency Exchange Contracts

Forward currency exchange contracts may be entered into for each fund for the purchase or sale of foreign currency to hedge against adverse rate changes or otherwise to achieve the fund’s investment objectives. A currency exchange contract allows a definite price in dollars to be fixed for securities of foreign issuers that have been purchased or sold (but not settled) for the fund.

Because some funds may buy and sell securities denominated in currencies other than the U.S. dollar and receive interest, dividends and sale proceeds in currencies other than the U.S. dollar, the funds from time to time may enter into foreign currency exchange transactions to convert to and from different foreign currencies and to convert foreign currencies to and from the U.S. dollar. The funds either enter into these transactions on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market or use forward contracts to purchase or sell foreign currencies.

A forward foreign currency exchange contract is an obligation by a fund to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract. Forward foreign currency exchange contracts establish an exchange rate at a future date. These contracts are effected in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. A forward foreign currency exchange contract generally has no deposit requirement and is traded at a net price without commission. A fund maintains with its custodian a segregated account of high grade liquid assets in an amount at least equal to its obligations under each forward foreign currency exchange contract. Neither spot transactions nor forward foreign currency exchange contracts eliminate fluctuations in the prices of the fund’s securities or in foreign exchange rates, or prevent loss if the prices of these securities should decline.

The funds may enter into foreign currency hedging transactions in an attempt to protect against changes in foreign currency exchange rates between the trade and settlement dates of specific securities transactions or changes in foreign currency exchange rates that would adversely affect a portfolio position or an anticipated investment position.

Each fund may also enter into proxy hedges and cross hedges. In a proxy hedge, which generally is less costly than a direct hedge, a fund, having purchased a security, will sell a currency whose value is believed to be closely linked to the currency in which the security is denominated. Interest rates prevailing in the country whose currency was sold would be expected to be closer to those in the U.S. and lower than those of securities denominated in the currency of the original holding. This type of hedging entails greater risk than a direct hedge because it is dependent on a stable relationship between the two currencies paired as proxies and the relationships can be very unstable at times. Proxy hedges may result in losses if the currency used to hedge does not perform similarly to the currency in which the hedged securities are denominated. A fund may enter into a cross hedge if a particular currency is expected to decrease against another currency. The fund would sell the currency expected to decrease and purchase a currency which is expected to increase against the currency sold in an amount equal to some or all of the fund’s holdings denominated in the currency sold.

Entering into exchange contracts may result in the loss of all or a portion of the benefits which otherwise could have been obtained from favorable movements in exchange rates. In addition, entering into such contracts means incurring certain transaction costs and bearing the risk of incurring losses if rates do not move in the direction anticipated.

The funds (other than the International Equity Fund) will not routinely enter into foreign currency hedging transactions with respect to security transactions; however, the funds may do so when their sub-advisers determine that the transactions would be in a fund’s best interest. Although these transactions tend to minimize the risk of loss due to a decline in the value of the hedged currency, at the same time they tend to limit any potential gain that might be realized should the value of the hedged currency increase. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of such securities between the date the forward contract is entered into and the date it matures. The projection of currency market movements is extremely difficult, and the successful execution of a hedging strategy is highly uncertain.

While these contracts are not presently regulated by the Commodity Futures Trading Commission (“CFTC”), the CFTC may in the future assert authority to regulate forward contracts. In such event a fund’s ability to utilize forward contracts for the fund may be restricted. Forward contracts may reduce the potential gain from a positive change in the relationship between the U.S. dollar and foreign currencies. Unanticipated changes in currency prices may result in poorer overall performance for a fund than if it had not entered into such contracts. The use of foreign currency forward contracts may not eliminate fluctuations in the underlying U.S. dollar equivalent value of the prices of or rates of return on a fund’s foreign currency denominated portfolio securities and the use of such techniques will subject the fund to certain risks.

Even if a hedge is generally successful, the matching of the increase in value of a forward contract and the decline in the U.S. dollar equivalent value of the foreign currency denominated asset that is the subject of the hedge generally will not be precise. In addition, a fund may not always be able to enter into foreign currency forward contracts at attractive prices and this will limit a fund’s ability to use such contracts to hedge or cross-hedge its assets. Also, with regard to a fund’s use of cross-hedges, there can be no assurance that historical correlations between the movement of certain foreign currencies relative to the U.S. dollar will continue. Thus, at any time poor correlation may exist between movements in the exchange rates of the foreign currencies underlying a fund’s cross-hedges and the movements in the exchange rates of the foreign currencies in which the fund’s assets that are the subject of such cross-hedges are denominated.

Secondary markets generally do not exist for forward currency exchange contracts, with the result that closing transactions generally can be made for forward currency exchange contracts only by negotiating directly with the counterparty. Thus, there can be no assurance that a fund will in fact be able to close out a forward currency exchange contract at a favorable price prior to maturity. In addition, in the event of insolvency of the counterparty, a fund might be unable to close out a forward currency exchange contract at any time prior to maturity, if at all. In either event, a fund would continue to be subject to market risk with respect to the position, and would continue to be required to maintain the required cover.

Guaranteed Investment Contracts

The funds may invest in guaranteed investment contracts (“GICs”) issued by insurance companies. Pursuant to such contracts, a fund makes cash contributions to a deposit fund of the insurance company’s general account. The insurance company then credits to the fund guaranteed interest. The GICs provide that this guaranteed interest will not be less than a certain minimum rate. The insurance company may assess periodic charges against a GIC for expenses and service costs allocable to it, and the charges will be deducted from the value of the deposit fund. Because a fund may not receive the principal amount of a GIC from the insurance company on seven days’ notice or less, the GIC is considered an illiquid investment and, together with other instruments in a fund which are not readily marketable, will not exceed 15% (10% in the case of each Money Market Fund, but 5% from and after May 28, 2010) of the fund’s net assets. The term of a GIC will be 13 months or less. In determining average weighted portfolio maturity, a GIC will be deemed to have a maturity equal to the longer of the period of time remaining until the next readjustment of the guaranteed interest rate or the period of time remaining until the principal amount can be recovered from the issuer through demand.

When-issued Securities

Forward commitments or purchases of securities on a when-issued basis are transactions where the price of the securities is fixed at the time of commitment and the delivery and payment ordinarily takes place beyond customary settlement time. The interest rate realized on these securities is fixed as of the purchase date and no interest accrues to the buyer before settlement. The securities are subject to market fluctuation due to changes in market interest rates; the securities are also subject to fluctuation in value pending settlement based upon public perception of the creditworthiness of the issuer of these securities.

It is expected that, under normal circumstances, the funds would take delivery of such securities. When a fund commits to purchase a security on a “when-issued” or on a “forward delivery” basis, the fund establishes procedures consistent with the relevant policies of the SEC. Since those policies currently require that an amount of a fund’s assets equal to the amount of the purchase be held aside or segregated to be used to pay for the commitment, the funds expect always to have cash or liquid securities sufficient to cover any commitments or to limit any potential risk. However, although the funds do not intend to make such purchases for speculative purposes and intend to adhere to the provisions of SEC policies, purchases of securities on such bases may involve more risk than other types of purchases and could also result in leverage. For example, a fund may have to sell assets which have been set aside in order to meet redemptions. Also, if a fund determines it is advisable as a matter of investment strategy to sell the “when-issued” or “forward delivery” securities, the fund would be required to meet its obligations from the then available cash flow or the sale of securities, or, although it would not normally expect to do so, from the sale of the “when-issued” or “forward delivery” securities themselves (which may have a value greater or less than the fund’s payment obligation).

Zero Coupon Obligations

A zero coupon security pays no interest or principal to its holder during its life. A zero coupon security is sold at a discount, frequently substantial, and redeemed at face value at its maturity date. The market prices of zero coupon securities are generally more volatile than the market prices of securities of similar maturity that pay interest periodically, and zero coupon securities are likely to react more to interest rate changes than non-zero coupon securities with similar maturity and credit qualities.

A fund may acquire zero coupon obligations when consistent with its investment objective and policies. Since interest income is accrued throughout the term of the zero coupon obligation but is not actually received until maturity, a fund may have to sell other securities to pay dividends based on such accrued income prior to maturity of the zero coupon obligation.

Derivatives

A fund may utilize options, futures contracts (sometimes referred to as “futures”), options on futures contracts, forward contracts, swaps, caps, floors, collars, indexed securities, various mortgage-related obligations, structured or synthetic financial instruments and other derivative instruments (collectively, “Financial Instruments”). A fund may use Financial Instruments for any purpose, including as a substitute for other investments, to attempt to enhance its portfolio’s return or yield and to alter the investment characteristics of its portfolio (including to attempt to mitigate risk of loss in some fashion, or “hedge”). Except as otherwise provided in its Prospectus, this SAI or by applicable law, a fund may purchase and sell any type of Financial Instrument. A fund may choose not to make use of derivatives for a variety of reasons, and no assurance can be given that any derivatives strategy employed will be successful.

Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet fully known and may not be for some time. Any new regulations could adversely affect the value, availability and performance of derivative instruments, may make them more costly, and may limit or restrict their use by a fund.

The use of Financial Instruments may be limited by applicable law and any applicable regulations of the SEC, the CFTC or the exchanges on which some Financial Instruments may be traded. (Note, however, that some Financial Instruments that a fund may use may not be listed on any exchange and may not be regulated by the SEC or the CFTC.) In addition, a fund’s ability to use Financial Instruments may be limited by tax considerations.

In addition to the instruments and strategies discussed in this section, the sub-advisers may discover additional opportunities in connection with Financial Instruments and other similar or related techniques. These opportunities may become available as a sub-adviser develops new techniques, as regulatory authorities broaden the range of permitted transactions and as new Financial Instruments or other techniques are developed. A sub-adviser may utilize these opportunities and techniques to the extent that they are consistent with a fund’s investment objective and permitted by its investment limitations and applicable regulatory authorities. These opportunities and techniques may involve risks different from or in addition to those summarized herein.

This discussion is not intended to limit a fund’s investment flexibility, unless such a limitation is expressly stated, and therefore will be construed by the fund as broadly as possible. Statements concerning what a fund may do are not intended to limit any other activity. Also, as with any investment or investment technique, even when the a fund’s prospectus or this discussion indicates that a fund may engage in an activity, it may not actually do so for a variety of reasons, including cost considerations.

Futures Contracts. A fund may enter into contracts for the purchase or sale for future delivery of fixed-income securities or foreign currencies, or contracts based on financial indices including any index of U.S. or foreign stocks, U.S. government securities, foreign government securities or corporate debt securities. U.S. futures contracts have been designed by exchanges which have been designated “contract markets” by the CFTC, and must be executed through a futures commission merchant, or brokerage firm, which is a member of the relevant contract market. Futures contracts trade on a number of exchange markets, and, through their clearing corporations, the exchanges guarantee performance of the contracts as between the clearing members of the exchange. A fund may enter into futures contracts which are based on debt securities that are backed by the full faith and credit of the U.S. government, such as long-term U.S. Treasury Bonds, Treasury Notes, GNMA, modified pass-through mortgage-backed securities and three-month U.S. Treasury Bills. A fund may also enter into futures contracts which are based on bonds issued by entities other than the U.S. government.

Purchases or sales of stock index futures contracts may be used to attempt to protect a fund’s current or intended stock investments from broad fluctuations in stock prices. For example, the fund may sell stock index futures contracts in anticipation of or during a decline in the market value of the fund’s securities. If such decline occurs, the loss in value of portfolio securities may be offset, in whole or part, by gains on the futures position. When a fund is not fully invested in the securities market and anticipates a significant market advance, it may purchase stock index futures contracts in order to gain rapid market exposure that may, in part or entirely, offset increases in the cost of securities that the fund intends to purchase. As such purchases are made, the corresponding positions in stock index futures contracts will be closed out. In a substantial majority of these transactions, the fund will purchase such securities upon termination of the futures position, but under unusual market conditions, a long futures position may be terminated without a related purchase of securities.

At the same time a futures contract is purchased or sold, the fund must allocate cash or securities as a deposit payment (“initial deposit”). It is expected that the initial deposit would be approximately ½% to 5% of a contract’s face value. Under certain

circumstances, such as periods of high volatility, a fund may be required by an exchange to increase the level of its initial deposit, and initial deposit requirements might be increased generally in the future by regulatory action. Daily thereafter, the futures contract is valued and the payment of “variation margin” may be required, since each day the fund would provide or receive cash that reflects any decline or increase in the contract’s value. Daily variation margin calls could be substantial in the event of adverse price movements. If a fund has insufficient cash to meet daily variation margin requirements, it might need to sell securities at a time when such sales are disadvantageous.

At the time of delivery of securities pursuant to such a contract, adjustments are made to recognize differences in value arising from the delivery of securities with a different interest rate from that specified in the contract. In some (but not many) cases, securities called for by a futures contract may not have been issued when the contract was written.

Although futures contracts by their terms may call for the actual delivery or acquisition of securities, in most cases the contractual obligation is fulfilled before the date of the contract without having to make or take delivery of the securities. The offsetting of a contractual obligation is accomplished by buying (or selling, as the case may be) on a commodities exchange an identical futures contract calling for delivery in the same month. Such a transaction, which is effected through a member of an exchange, cancels the obligation to make or take delivery of the securities. Since all transactions in the futures market are made, offset or fulfilled through a clearinghouse associated with the exchange on which the contracts are traded, a fund will incur brokerage fees when it purchases or sells futures contracts.

The purpose of the acquisition or sale of a futures contract, in the case of a fund which holds or intends to acquire fixed-income securities, is to attempt to protect the fund from fluctuations in interest or foreign exchange rates without actually buying or selling fixed-income securities or foreign currencies. For example, if interest rates were expected to increase, a fund might enter into futures contracts for the sale of debt securities. Such a sale would have much the same effect as selling an equivalent value of the debt securities owned by the fund. If interest rates did increase, the value of the debt security in a fund would decline, but the value of the futures contracts to the fund would increase at approximately the same rate, thereby keeping the net asset value of the fund from declining as much as it otherwise would have. The fund could accomplish similar results by selling debt securities and investing in bonds with short maturities when interest rates are expected to increase. However, since the futures market is generally more liquid than the cash market, the use of futures contracts as an investment technique allows a fund to maintain a defensive position without having to sell its portfolio securities.

Similarly, when it is expected that interest rates may decline, futures contracts may be purchased to attempt to hedge against anticipated purchases of debt securities at higher prices. Since the fluctuations in the value of futures contracts should be similar to those of debt securities, a fund could take advantage of the anticipated rise in the value of debt securities without actually buying them until the market had stabilized. At that time, the futures contracts could be liquidated and the fund could then buy debt securities on the cash market.

When a fund enters into futures contracts, the fund will establish a segregated account to cover the fund’s obligations with respect to such futures contracts. The assets in the account will consist of cash, offsetting derivatives or liquid securities from its portfolio in an amount equal to the difference between the fluctuating market value of such futures contracts and the aggregate value of the initial and variation margin payments made by the fund with respect to such futures contracts.

The ordinary spreads between prices in the cash and futures market, due to differences in the nature of those markets, are subject to distortions. First, all participants in the futures market are subject to initial deposit and variation margin requirements. Rather than meeting additional variation margin requirements, investors may close futures contracts through offsetting transactions which could distort the normal relationship between the cash and futures markets. Second, the liquidity of the futures market depends on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures market could be reduced, thus producing distortion. Third, from the point of view of speculators, the margin deposit requirements in the futures market are less onerous than margin requirements in the securities market. Therefore, increased participation by speculators in the futures market may cause temporary price distortions. Due to the possibility of distortion, a correct forecast of general interest rates or other trends by the applicable sub-adviser may still not result in a successful transaction.

In addition, futures contracts entail risks. If the sub-advisers’ investment judgment about the general direction of interest rates is incorrect, a fund’s overall performance would be poorer than if it had not entered into any such contract. For example, if a fund has hedged against the possibility of an increase in interest rates which would adversely affect the price of debt securities held by it and interest rates decrease instead, the fund will lose part or all of the benefit of the increased value of its debt securities which it has hedged because it will have offsetting losses in its futures positions. In addition, in such situations, if a fund has insufficient cash, it may have to sell debt securities to meet daily variation margin requirements. Such sales of bonds may be, but will not necessarily be,

at increased prices which reflect the rising market. A fund may have to sell securities at a time when it may be disadvantageous to do so.

Options on Futures Contracts. The funds may purchase and write options on futures contracts for hedging purposes. The purchase of a call option on a futures contract is similar in some respects to the purchase of a call option on an individual security. Depending on the pricing of the option compared to either the price of the futures contract upon which it is based or the price of the underlying securities, it may or may not be less risky than ownership of the futures contract or underlying securities. As with the purchase of futures contracts, when a fund is not fully invested it may purchase a call option on a futures contract to hedge against a market advance due to declining interest rates.

The purchase of a put option on a futures contract is similar in some respects to the purchase of protective put options on portfolio securities. For example, a fund may purchase a put option on a futures contract to hedge its portfolio against the risk of rising interest rates.

The amount of risk a fund assumes when it purchases an option on a futures contract is the premium paid for the option plus related transaction costs. In addition to the correlation risks discussed above, the purchase of an option also entails the risk that changes in the value of the underlying futures contract will not be fully reflected in the value of the option purchased.

The writing of a call option on a futures contract constitutes a partial hedge against declining prices of the security or currency which is deliverable upon exercise of the futures contract. If the futures price at expiration of the option is below the exercise price, a fund will retain the full amount of the option premium which provides a partial hedge against any decline that may have occurred in the fund’s portfolio holdings. The writing of a put option on a futures contract constitutes a partial hedge against increasing prices of the security or foreign currency which is deliverable upon exercise of the futures contract. If the futures price at expiration of the option is higher than the exercise price, the fund will retain the full amount of the option premium which provides a partial hedge against any increase in the price of securities which the fund intends to purchase . If a put or call option the fund has written is exercised, the fund will incur a loss which will be reduced by the amount of the premium it receives. In the case of a call option written by the fund, the loss is potentially unlimited. Depending on the degree of correlation between changes in the value of its portfolio securities and changes in the value of its futures positions, the fund’s losses from options on futures may to some extent be reduced or increased by changes in the value of portfolio securities.

Futures transactions will be limited to the extent necessary to maintain the qualification of the funds as regulated investment companies. Pursuant to a claim for exemption filed with the CFTC and/or the National Futures Association on behalf of the funds, the funds are not deemed to be “commodity pool operators” under the Commodity Exchange Act and are not subject to registration or regulation as such under the Commodity Exchange Act.

Options on Foreign Currencies. A fund may purchase and write options on foreign currencies for hedging purposes in a manner similar to that in which futures contracts on foreign currencies, or forward contracts, may be utilized. For example, a decline in the dollar value of a foreign currency in which portfolio securities are denominated will reduce the dollar value of such securities, even if their value in the foreign currency remains constant. In order to protect against such diminutions in the value of portfolio securities, the fund may purchase put options on the foreign currency. If the value of the currency does decline, a fund will have the right to sell such currency for a fixed amount in dollars and will thereby offset, in whole or in part, the adverse effect on its portfolio which otherwise would have resulted.

Conversely, where a rise in the dollar value of a currency in which securities to be acquired are denominated is projected, thereby increasing the cost of such securities, the fund may purchase call options thereon. The purchase of such options could offset, at least partially, the effects of the adverse movements in exchange rates. As in the case of other types of options, however, the benefit to the fund deriving from purchases of foreign currency options will be reduced by the amount of the premium and related transaction costs. In addition, where currency exchange rates do not move in the direction or to the extent anticipated, the fund could sustain losses on transactions in foreign currency options which would require it to forego a portion or all of the benefits of advantageous changes in such rates.

A fund may write options on foreign currencies for the same types of hedging purposes. For example, where a fund anticipates a decline in the dollar value of foreign currency denominated securities due to adverse fluctuations in exchange rates it could, instead of purchasing a put option, write a call option on the relevant currency. If the expected decline occurs, the options will most likely not be exercised, and the diminution in value of portfolio securities will be offset by the amount of the premium received.

Similarly, instead of purchasing a call option to hedge against an anticipated increase in the dollar cost of securities to be acquired, the fund could write a put option on the relevant currency which, if rates move in the manner projected, will expire unexercised and allow

the fund to hedge such increased cost up to the amount of the premium. As in the case of other types of options, however, the writing of a foreign currency option will constitute only a partial hedge up to the amount of the premium, and only if rates move in the expected direction. If this does not occur, the option may be exercised and the fund would be required to purchase or sell the underlying currency at a loss which may not be offset by the amount of the premium. Through the writing of options on foreign currencies, the fund also may be required to forego all or a portion of the benefits which might otherwise have been obtained from favorable movements in exchange rates.

Losses from the writing of call options are potentially unlimited. Accordingly, the funds intend that any call options on foreign currencies that they write (other than for cross-hedging purposes as described below) will be covered. A call option written on a foreign currency by a fund is “covered” if the fund owns the underlying foreign currency covered by the call or has an absolute and immediate right to acquire that foreign currency without additional cash consideration (or for additional cash consideration held in a segregated account by its custodian) upon conversion or exchange of another foreign currency held in its portfolio. A call option is also covered if the fund has a call on the same foreign currency and in the same principal amount as the call written where the exercise price of the call held (a) is equal to or less than the exercise price of the call written or (b) is greater than the exercise price of the call written if the difference is maintained by the fund in cash and liquid securities in a segregated account with its custodian.

The funds may also write call options on foreign currencies that are not covered for cross-hedging purposes. A call option on a foreign currency is for cross-hedging purposes if it is not covered, but is designed to provide a hedge against a decline in the U.S. dollar value of a security which the fund owns or has the right to acquire and which is denominated in the currency underlying the option due to an adverse change in the exchange rate. In such circumstances, the fund collateralizes the option by maintaining in a segregated account with its custodian, cash or liquid securities in an amount not less than the value of the underlying foreign currency in U.S. dollars marked to market daily.

Additional Risks of Options on Futures Contracts, Forward Contracts and Options on Foreign Currencies. Unlike transactions entered into by a fund in futures contracts, forward contracts and options on foreign currencies are not traded on contract markets regulated by the CFTC or (with the exception of certain foreign currency options) by the SEC. To the contrary, such instruments are traded through financial institutions acting as market-makers, although foreign currency options are also traded on certain national securities exchanges, such as the Philadelphia Stock Exchange and the Chicago Board Options Exchange, subject to SEC regulation. Similarly, options on currencies may be traded over-the-counter. In an over-the-counter trading environment, many of the protections afforded to exchange participants will not be available. For example, there are no daily price fluctuation limits, and adverse market movements could therefore continue to an unlimited extent over a period of time. Moreover, the option writer and a trader of forward contracts could lose amounts substantially in excess of their initial investments, due to the margin and collateral requirements associated with such positions.

Options on foreign currencies traded on national securities exchanges are within the jurisdiction of the SEC, as are other securities traded on such exchanges. As a result, many of the protections provided to traders on organized exchanges will be available with respect to such transactions. In particular, all foreign currency option positions entered into on a national securities exchange are cleared and guaranteed by the Options Clearing Corporation (“OCC”), thereby reducing the risk of counterparty default. Further, a liquid secondary market in options traded on a national securities exchange may be more readily available than in the over-the-counter market, potentially permitting a fund to liquidate open positions at a profit prior to exercise or expiration, or to limit losses in the event of adverse market movements.

The purchase and sale of exchange-traded foreign currency options, however, is subject to the risks of the availability of a liquid secondary market described above, as well as the risks regarding adverse market movements, margining of options written, the nature of the foreign currency market, possible intervention by governmental authorities and the effects of other political and economic events. In addition, exchange-traded options on foreign currencies involve certain risks not presented by the over-the-counter market. For example, exercise and settlement of such options must be made exclusively through the OCC, which has established banking relationships in applicable foreign countries for this purpose. As a result, the OCC may, if it determines that foreign governmental restrictions or taxes would prevent the orderly settlement of foreign currency option exercises, or would result in undue burdens on the OCC or its clearing member, impose special procedures on exercise and settlement, such as technical changes in the mechanics of delivery of currency, the fixing of dollar settlement prices or prohibitions on exercise.

As in the case of forward contracts, certain options on foreign currencies are traded over-the-counter and involve liquidity and credit risks which may not be present in the case of exchange-traded currency options. A fund’s ability to terminate over-the-counter options will be more limited than with exchange-traded options. It is also possible that broker-dealers participating in over-the-counter options transactions will not fulfill their obligations. Until such time as the staff of the SEC changes its position, each fund will treat purchased over-the-counter options and assets used to cover written over-the-counter options as illiquid securities. With respect to options written with primary dealers in U.S. government securities pursuant to an agreement requiring a closing purchase transaction at a formula price, the amount of illiquid securities may be calculated with reference to the repurchase formula.

In addition, futures contracts, options on futures contracts, forward contracts and options on foreign currencies may be traded on foreign exchanges. Such transactions are subject to the risk of governmental actions affecting trading in or the prices of foreign currencies or securities. The value of such positions also could be adversely affected by (a) other complex foreign political and economic factors, (b) lesser availability than in the United States of data on which to make trading decisions, (c) delays in the fund’s ability to act upon economic events occurring in foreign markets during non-business hours in the United States, (d) the imposition of different exercise and settlement terms and procedures and margin requirements than in the United States, and (e) lesser trading volume.

The successful use of futures contracts, options on futures contracts and options on foreign currencies draws upon the applicable sub-adviser’s skill and experience with respect to such instruments. Should stock prices, interest or exchange rates move in an unexpected manner, a fund may not achieve the anticipated benefits of futures contracts or options on futures contracts or foreign currencies or may realize losses and thus will be in a worse position than if such strategies had not been used. In addition, the correlation between movements in the price of futures contracts or options on futures contracts or foreign currencies and movements in the price of the securities and currencies hedged or used for cover will not be perfect and could produce unanticipated losses.

Options on Securities. The funds may write (sell) covered call and put options to a limited extent on their portfolio securities (“covered options”). However, a fund may forego the benefits of appreciation on securities sold or may pay more than the market price on securities acquired pursuant to call and put options written by the fund.

When a fund writes a covered call option, it gives the purchaser of the option the right to buy the underlying security at the price specified in the option (the “exercise price”) by exercising the option at any time during the option period. If the option expires unexercised, the fund will realize income in an amount equal to the premium received for writing the option. If the option is exercised, a decision over which a fund has no control, the fund must sell the underlying security to the option holder at the exercise price. By writing a covered call option, a fund forgoes, in exchange for the premium less the commission (“net premium”), the opportunity to profit during the option period from an increase in the market value of the underlying security above the exercise price.

When a fund writes a covered put option, it gives the purchaser of the option the right to sell the underlying security to the fund at the specified exercise price at any time during the option period. If the option expires unexercised, the fund will realize income in the amount of the premium received for writing the option. If the put option is exercised, a decision over which a fund has no control, the fund must purchase the underlying security from the option holder at the exercise price. By writing a covered put option, a fund, in exchange for the net premium received, accepts the risk of a decline in the market value of the underlying security below the exercise price. A fund will not write a call or a put option unless it owns either (1) an offsetting (“covering”) position in securities, currencies or other options, futures contracts or forward contracts, or (2) cash and liquid assets with a value, marked-to-market daily, sufficient to cover its potential obligations to the extent not covered as provided in (1) above. Each fund will comply with SEC guidelines regarding cover for these instruments and will, if the guidelines so require, segregate cash or liquid assets in the prescribed amount as determined daily.

A fund may terminate its obligation as the writer of a call or put option by purchasing an option with the same exercise price and expiration date as the option previously written. This transaction is called a “closing purchase transaction.” Where a fund cannot effect a closing purchase transaction, it may be forced to incur brokerage commissions or dealer spreads in selling securities it receives or it may be forced to hold underlying securities until an option is exercised or expires.

When a fund writes an option, an amount equal to the net premium received by the fund is included in the liability section of the fund’s Statement of Assets and Liabilities as a deferred credit. The amount of the deferred credit will be subsequently marked to market to reflect the current market value of the option written. The current market value of a traded option is the last sale price or, in the absence of a sale, the mean between the closing bid and asked price. If an option expires on its stipulated expiration date or if the fund enters into a closing purchase transaction, the fund will realize a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was sold), and the deferred credit related to such option will be eliminated. If a call option is exercised, the fund will realize a gain or loss from the sale of the underlying security and the proceeds of the sale will be increased by the premium originally received.

A fund may purchase call and put options on any securities in which it may invest. A fund would normally purchase a call option in anticipation of an increase in the market value of such securities. The purchase of a call option would entitle the fund, in exchange for the premium paid, to purchase a security at a specified price during the option period. A fund would ordinarily have a gain if the value of the securities increased above the exercise price sufficiently to cover the premium and would have a loss if the value of the securities remained at or below the exercise price during the option period.

A fund would normally purchase put options in anticipation of a decline in the market value of securities in its portfolio (“protective puts”) or securities of the type in which it is permitted to invest. The purchase of a put option would entitle a fund, in exchange for the premium paid, to sell a security, which may or may not be held in the fund’s portfolio, at a specified price during the option period. The purchase of protective puts is designed merely to offset or hedge against a decline in the market value of the fund’s portfolio securities. Put options also may be purchased by a fund for the purpose of affirmatively benefiting from a decline in the price of securities which the fund does not own. A fund would ordinarily recognize a gain if the value of the securities decreased below the exercise price sufficiently to cover the premium and would recognize a loss if the value of the securities remained at or above the exercise price. Gains and losses on the purchase of protective put options would tend to be offset by countervailing changes in the value of underlying portfolio securities.

The hours of trading for options on securities may not conform to the hours during which the underlying securities are traded. To the extent that the option markets close before the markets for the underlying securities, significant price and rate movements can take place in the underlying securities markets that cannot be reflected in the option markets. It is impossible to predict the volume of trading that may exist in such options, and there can be no assurance that viable exchange markets will develop or continue.

The funds may engage in over-the-counter options transactions with broker-dealers who make markets in these options. The ability to terminate over-the-counter option positions is more limited than with exchange-traded option positions because the predominant market is the issuing broker rather than an exchange, and may involve the risk that broker-dealers participating in such transactions will not fulfill their obligations. To reduce this risk, the funds will purchase such options only from broker-dealers who are primary government securities dealers recognized by the Federal Reserve Bank of New York and who agree to (and are expected to be capable of) entering into closing transactions, although there can be no guarantee that any such option will be liquidated at a favorable price prior to expiration. The applicable sub-adviser will monitor the creditworthiness of dealers with whom a fund enters into such options transactions under the general supervision of TAM and the applicable Board of Trustees.

Options on Securities Indices. In addition to options on securities, the funds may also purchase and write (sell) call and put options on securities indices. Such options give the holder the right to receive a cash settlement during the term of the option based upon the difference between the exercise price and the value of the index. Such options will be used for the purposes described above under “Options on Securities.”

Options on securities indices entail risks in addition to the risks of options on securities. The absence of a liquid secondary market to close out options positions on securities indices is more likely to occur, although the funds generally will only purchase or write such an option if the applicable sub-adviser believes the option can be closed out.

Use of options on securities indices also entails the risk that trading in such options may be interrupted if trading in certain securities included in the index is interrupted. A fund will not purchase such options unless the applicable sub-adviser believes the market is sufficiently developed such that the risk of trading in such options is no greater than the risk of trading in options on securities.

Price movements in the funds’ securities may not correlate precisely with movements in the level of an index and, therefore, the use of options on indices cannot serve as a complete hedge. Because options on securities indices require settlement in cash, a fund may be forced to liquidate portfolio securities to meet settlement obligations.

Swap Agreements. A fund may enter into interest rate, index, equity, currency exchange rate, total return and credit default swap agreements, for hedging and non-hedging purposes. These transactions would be entered into in an attempt to obtain a particular return when it is considered desirable to do so, possibly at a lower cost to a fund than if the fund had invested directly in the asset that yielded the desired return. Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard swap transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which may be adjusted for an interest factor. The gross returns to be exchanged or “swapped” between the parties are generally calculated with respect to a “notional amount,” i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a “basket” of securities representing a particular index.

Forms of swap agreements include interest rate caps, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates exceed a specified rate, or “cap”; interest rate floors, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates fall below a specified level, or “floor”; and interest rate collars, under which a party sells a cap and purchases a floor or vice versa, in an attempt to protect itself against interest rate movements exceeding given minimum or maximum levels.

Credit default swaps are a type of swap agreement in which the protection “buyer” is generally obligated to pay the protection “seller” an upfront and/or a periodic stream of payments over the term of the contract provided that no credit event, such as a default, on a reference obligation has occurred. The credit default swap agreement may have as reference obligations one or more securities that are not currently held by the fund. If a credit event occurs, the seller generally must pay the buyer the “par value” (full notional value) of the swap in exchange for an equal face amount of deliverable obligations of the reference entity described in the swap, or the seller may be required to deliver the related net cash amount, if the swap is cash settled. A fund may be either the buyer or seller in the transaction. If the fund is a buyer and no credit event occurs, the fund may recover nothing if the swap is held through its termination date. However, if a credit event occurs, the buyer generally may elect to receive the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity whose value may have significantly decreased. As a seller, a fund generally receives an upfront payment and/or a fixed rate of income throughout the term of the swap provided that there is no credit event. As the seller, the fund would effectively add leverage to its portfolio because, in addition to its total net assets, the fund would be subject to investment exposure on the notional amount of the swap. Credit default swap agreements involve greater risks than if the fund had invested in the reference obligation directly since, in addition to general market risks, credit default swaps are subject to illiquidity risk, counterparty risk and credit risk. As there is not yet a fully-developed central exchange or market for credit default

swap transactions, they may be difficult to trade or value, especially in the event of market disruptions. A fund will enter into credit default swap agreements only with counterparties that meet certain standards of creditworthiness.

A fund may enter into total return swap agreements. Total return swap agreements are contracts in which one party agrees to make periodic payments based on the change in market value of underlying assets, which may include a specified security, basket of securities, defined portfolios of bonds, loans and mortgages, or securities indexes during the specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. Total return swap agreements may be used to obtain exposure to a security or market without owning or taking physical custody of such security or market. Total return swap agreements may effectively add leverage to the fund’s portfolio because, in addition to its total net assets, the fund would be subject to investment exposure on the notional amount of the swap. Total return swaps are a mechanism for the user to accept the economic benefits of asset ownership without utilizing the balance sheet. The other leg of the swap, usually LIBOR, is spread to reflect the non-balance sheet nature of the product. Total return swaps can be designed with any underlying asset agreed between two parties. Typically no notional amounts are exchanged with total return swaps. Total return swap agreements entail the risk that a party will default on its payment obligations to the fund thereunder. Swap agreements also entail the risk that the fund will not be able to meet its obligation to the counterparty. Generally, the fund will enter into total return swaps on a net basis (i.e., the two payment streams are netted out with the fund receiving or paying, as the case may be, only the net amount of the two payments).

Most swap agreements entered into by the fund calculate the obligations of the parties to the agreement on a “net basis.” Consequently, the fund’s current obligations (or rights) under a swap agreement will generally be equal only to the net present value of amounts to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the “net amount”). The fund’s current obligations under a swap agreement will be accrued daily (offset against amounts owed to the fund), and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the maintenance of a segregated account consisting of assets determined to be liquid by the sub-adviser.

Whether a fund’s use of swap agreements will be successful in furthering its investment objective will depend on the sub-adviser’s ability to correctly predict whether certain types of investments are likely to produce greater returns than other investments. Because they are two-party contracts and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid investments. Moreover, the fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The swap market is a relatively new market and is largely unregulated. It is possible that developments in the swap market, including potential government regulation, could adversely affect a fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements.

Special Investment Considerations and Risks. The successful use of the investment practices described above with respect to Financial Instruments draws upon skills and experience which are different from those needed to select the other instruments in which a fund may invest. Should interest or exchange rates, or the prices of securities or financial indices move in an unexpected manner, a fund may not achieve the desired benefits of the foregoing instruments or may realize losses and thus be in a worse position than if such strategies had not been used. In general, these investment practices may increase the volatility of a fund and even a small investment in derivatives may magnify or otherwise increase investment losses to a fund. Unlike many exchange-traded futures contracts and options on futures contracts, there are no daily price fluctuation limits with respect to options on currencies, forward contracts and other negotiated or over-the-counter instruments, and adverse market movements could therefore continue to an unlimited extent over a period of time. In addition, the correlation between movements in the price of the securities and currencies hedged or used for cover will not be perfect and could produce unanticipated losses.

A fund’s ability to dispose of its positions in Financial Instruments will depend on the availability of liquid markets in the instruments or, in the absence of a liquid market, the ability and willingness of the other party to the transaction (the “counterparty”) to enter into a closing transaction. If there is no market or the fund is not successful in its negotiations, the fund may not be able to sell or unwind the derivative position at a particular time or at an anticipated price. This may also be the case if the counterparty to the Financial Instrument becomes insolvent. Markets in a number of the instruments are relatively new and still developing, and it is impossible to predict the amount of trading interest that may exist in those instruments in the future. Therefore, there is no assurance that any position can be disposed of at a time and price that is favorable to a fund. While the position remains open, the fund continues to be subject to investment risk on the Financial Instrument. The fund may or may not be able to take other actions or enter into other transactions, including hedging transactions, to limit or reduce its exposure to the Financial Instrument. The purchase and sale of futures contracts and the exercise of options may cause a fund to sell or purchase related investments, thus increasing its portfolio turnover rate. Brokerage commissions paid by a fund with respect to Financial Instruments may be higher than those that would apply to direct purchases or sales of the underlying instruments.

Particular risks exist with respect to the use of each of the Financial Instruments and could result in such adverse consequences to a fund as: the possible loss of the entire premium paid for an option bought by a fund; the inability of a fund, as the writer of a covered call option, to benefit from the appreciation of the underlying securities above the exercise price of the option; and the possible need to

defer closing out positions in certain instruments to avoid adverse tax consequences. As a result, no assurance can be given that a fund will be able to use Financial Instruments effectively for their intended purposes.

A fund may be required to maintain assets as “cover,” maintain segregated accounts, post collateral or make margin payments when it takes positions in Financial Instruments. Assets that are segregated or used as cover, margin or collateral may be required to be in the form of cash or liquid securities, and typically may not be sold while the position in the Financial Instrument is open unless they are replaced with other appropriate assets. If markets move against a fund’s position, such fund may be required to maintain or post additional assets and may have to dispose of existing investments to obtain assets acceptable as collateral or margin. This may prevent it from pursuing its investment objective. Assets that are segregated or used as cover, margin or collateral typically are invested, and these investments are subject to risk and may result in losses to a fund. These losses may be substantial, and may be in addition to losses incurred by using the Financial Instrument in question. If a fund is unable to close out its positions, it may be required to continue to maintain such assets or accounts or make such payments until the positions expire or mature, and the fund will continue to be subject to investment risk on the assets. Segregation, cover, margin and collateral requirements may impair a fund’s ability to sell a portfolio security or make an investment at a time when it would otherwise be favorable to do so, or require a fund to sell a portfolio security or close out a derivatives position at a disadvantageous time or price.

Certain Financial Instruments transactions may have a leveraging effect on the funds, and adverse changes in the value of the underlying security, index, interest rate, currency or other instrument or measure can result in losses substantially greater than the amount invested in the Financial Instrument itself. When the funds engage in transactions that have a leveraging effect, the value of the fund is likely to be more volatile and all other risks also are likely to be compounded. This is because leverage generally magnifies the effect of any increase or decrease in the value of an asset and creates investment risk with respect to a larger pool of assets than the fund would otherwise have. Certain Financial Instruments have the potential for unlimited loss, regardless of the size of the initial investment.

Many Financial Instruments may be difficult to value or may be valued subjectively. Inaccurate valuations can result in increased payment requirements to counterparties or a loss of value to the funds.

In a hedging transaction there may be imperfect correlation, or even no correlation, between the identity, price or price movements of a Financial Instrument and the identity, price or price movements of the investments being hedged. This lack of correlation may cause the hedge to be unsuccessful and may result in the fund incurring substantial losses and/or not achieving anticipated gains.

Hedging strategies can reduce opportunity for gain by offsetting the positive effect of favorable price movements. Even if the strategy works as intended, the fund might be in a better position had it not attempted to hedge at all.

Financial Instruments transactions used for non-hedging purposes may result in losses which would not be offset by increases in the value of portfolio securities or declines in the cost of securities to be acquired. In the event that the fund enters into a derivatives transaction as an alternative to purchasing or selling other investments or in order to obtain desired exposure to an index or market, the fund will be exposed to the same risks as are incurred in purchasing or selling the other investments directly, as well as the risks of the derivatives transaction itself.

Certain Financial Instruments transactions involve the risk of loss resulting from the insolvency or bankruptcy of the counterparty or the failure by the counterparty to make required payments or otherwise comply with the terms of the contract. In the event of default by a counterparty, the fund may have contractual remedies pursuant to the agreements related to the transaction, which may be limited by applicable law in the case of the counterparty’s bankruptcy.

Certain Financial Instruments transactions, including certain options, swaps, forward contracts, and certain options on foreign currencies, are not entered into or traded on exchanges or in markets regulated by the CFTC or the SEC. Instead, such over-the-counter (or “OTC”) derivatives are entered into directly by the counterparties and may be traded only through financial institutions acting as market makers. Many of the protections afforded to exchange participants will not be available to participants in OTC derivatives transactions. For example, OTC derivatives transactions are not subject to the guarantee of an exchange or clearinghouse and as a result the fund bears greater risk of default by the counterparties to such transactions. Information available on counterparty creditworthiness may be incomplete or outdated, thus reducing the ability to anticipate counterparty defaults.

Financial Instruments involve operational risk. There may be incomplete or erroneous documentation or inadequate collateral or margin, or transactions may fail to settle. The risk of operational failures may be higher for OTC derivatives transactions. For derivatives not guaranteed by an exchange, the fund may have only contractual remedies in the event of a counterparty default, and there may be delays, costs, disagreements as to the meaning of contractual terms and litigation, in enforcing those remedies.

Use of Financial Instruments involves transaction costs, which may be significant. Use of Financial Instruments also may increase the amount of taxable income to shareholders, including in the fund that invests largely in municipal securities.

Other Investment Companies

Each of the funds may acquire securities of other investment companies, subject to the limitations of the 1940 Act. Each of the Transamerica Partners Money Market, Bond, Balanced and Stock Funds and each of the Transamerica Partners Institutional Money Market, Bond, Balanced and Stock Funds seeks its investment objective by investing all of its assets in an underlying portfolio having the same investment objectives and policies as the applicable Transamerica Partners Fund and Transamerica Partners Institutional Fund. Each of the Asset Allocation Funds seeks its investment objective by investing in a combination of the Money Market, Bond and Stock Funds. In addition, each portfolio may acquire securities of other investment companies, subject to the limitations of the 1940 Act.

Pursuant to an exemptive order obtained from the SEC or under a statutory exemption or an exemptive rule adopted by the SEC, a fund or a portfolio may invest in other investment companies beyond the statutory limits prescribed by the 1940 Act.

Securities of other investment companies that may be purchased by the portfolios include exchange-traded funds (“ETFs”). ETFs are typically structured as investment companies whose securities are traded over an exchange at their market price. ETFs generally represent a portfolio of securities designed to track a particular market index or other group of securities. A portfolio may purchase an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market pending the purchase of individual securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities it is designed to track, although the potential lack of liquidity of an ETF could result in it being more volatile. There is also a risk that the general level of securities prices may decline, thereby adversely affecting the value of ETFs invested in by a portfolio. Moreover, a portfolio’s investments in ETFs may not exactly match the performance of a direct investment in the respective indices or portfolios of securities to which they are intended to correspond due to the temporary unavailability of certain index securities in the secondary market or other factors, such as discrepancies with respect to the weighting of securities. Additionally, ETFs have management fees which increase their costs.

Should a portfolio purchase securities of other investment companies, shareholders may incur additional management, advisory, and distribution fees. Investments in other investment companies are subject to the risks of the securities in which those investment companies invest.

Short Sales “Against the Box” — Funds other than the Money Market Funds

In a short sale, a fund sells a borrowed security and has a corresponding obligation to the lender to return the identical security. A fund may engage in short sales only if at the time of the short sale it owns or has the right to obtain, at no additional cost, an equal amount of the security being sold short. This investment technique is known as a short sale “against the box”.

In a short sale, the seller does not immediately deliver the securities sold and is said to have a short position in those securities until delivery occurs. If a fund engages in a short sale, the collateral for the short position will be maintained by its custodian or qualified sub-custodian. While the short sale is open, a fund maintains in a segregated account an amount of securities equal in kind and amount to the securities sold short or securities convertible into or exchangeable for such equivalent securities. These securities constitute the fund’s long position.

The funds will not engage in short sales against the box for investment purposes. A fund may, however, make a short sale as a hedge, when it believes that the price of a security may decline, causing a decline in the value of a security (or a security convertible or exchangeable for such security). In such case, any future losses in a fund’s long position should be reduced by a gain in the short position. Conversely, any gain in the long position should be reduced by a loss in the short position. The extent to which such gains or losses are reduced depends upon the amount of the security sold short relative to the amount a fund owns. There are certain additional transaction costs associated with short sales against the box, but the funds endeavor to offset these costs with the income from the investment of the cash proceeds of short sales.

As a nonfundamental operating policy, it is not expected that more than 40% of a fund’s total assets would be involved in short sales against the box.

Real Estate Investment Trusts

Real Estate Investment Trusts (“REITs”) pool investors’ funds for investment primarily in income producing real estate or real estate related loans or interests. A REIT is not taxed on income distributed to its shareholders or unitholders if it complies with requirements relating to its organization, ownership, assets and income and a requirement that it distribute to its shareholders or unitholders as least 90% of its taxable income for each taxable year. Generally, REITs can be classified as Equity REITs, Mortgage REITs and hybrid REITs. Equity REITs invest the majority of their assets directly in real property and derive their income primarily through rents and capital gains from appreciation realized through property sales. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs. Mortgage REITs invest the majority of their assets in real estate mortgages and derive their income primarily from interest payments. Mortgage REITs are sensitive to the credit quality of the underlying borrowers and also to the risk that they may be unable to invest at attractive interest rates if the mortgages in which they invest are prepaid. Hybrid REITs combine the characteristics of both Equity and Mortgage REITs. The value of REITs may be affected by management skill, cash flow and tax and regulatory requirements. REITs are also subject to risks generally associated with investments in real estate. A fund will indirectly bear its proportionate share of any expenses, including management fees, paid by a REIT in which it invests.

REITs may subject a fund to certain risks associated with the direct ownership of real estate. These risks include, among others: possible declines in the value of real estate; possible lack of availability of mortgage funds; extended vacancies of properties; risks related to general and local economic conditions; overbuilding; increases in competition, property taxes and operating expenses; changes in zoning laws; costs resulting from the clean-up of, liability to third parties for or damages resulting from, environmental problems, or casualty or condemnation losses; uninsured damages from floods, earthquakes or other natural disasters; limitations on and variations in rents; and changes in interest rates.

Investing in REITs involves certain unique risks, in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while Mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, are not diversified, and are subject to risks associated with heavy cash flow dependency, potential default by borrowers, self-liquidation and the possibilities of failing to qualify for the exemption from tax for distributed income under the Code. REITs whose underlying assets are concentrated in properties used by a particular industry, such as health care, are also subject to industry related risks.

REITs (especially Mortgage REITs) are also subject to interest rate risk. When interest rates decline, the value of a REIT’s investment in fixed rate obligations can be expected to rise. Conversely, when interest rates rise, the value of a REIT’s investment in fixed rate obligations can be expected to decline. If the REIT invests in adjustable rate mortgage loans the interest rates on which are reset periodically, yields on a REIT’s investments in such loans will gradually align themselves to reflect changes in market interest rates. This causes the value of such investments to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed rate obligations. REITs may have limited financial resources, may trade less frequently and in a limited volume

and may be subject to more abrupt or erratic price movements than larger company securities. Historically, REITs have been more volatile in price than the larger capitalization stocks included in S&P 500 Index.

Dollar Rolls and TBA Securities

Each portfolio may enter into dollar roll transactions and purchase To Be Announced Securities (“TBAS”). Dollar rolls are transactions where a portfolio sells securities (usually mortgage-backed securities) with a commitment to buy similar, but not identical, securities on a future date at a lower price. In the case of dollar rolls involving mortgage-backed securities, the mortgage-backed securities that are purchased typically will be of the same type and will have the same or similar interest rate and maturity as those sold, but will be supported by different pools of mortgages. A portfolio forgoes principal and interest paid during the roll period on the securities sold in a dollar roll, but the portfolio is compensated by the difference between the current sales price and the price for the future purchase as well as by any interest earned on the proceeds of the securities sold. A portfolio could also be compensated through receipt of fee income. In addition to the general risks involved in leveraging, dollar rolls are subject to the same risks as repurchase and reverse repurchase agreements, which are discussed above.

TBAS are a type of delayed delivery transaction where the seller agrees to issue a security at a future date. The seller does not specify the particular securities to be delivered. Instead, the portfolio agrees to accept any security that meets specified terms.

Subordinated Securities

A fund may invest in securities which are subordinated or “junior” to more senior securities of the issuer, or which represent interests in pools of such subordinated or junior securities. Such securities may include so-called “high yield” or “junk” bonds (i.e., bonds that are rated below investment grade by a rating agency or that are deemed by the subadviser to be of equivalent quality) and preferred stock. Under the terms of subordinated securities, payments that would otherwise be made to their holders may be required to be made to the holders of more senior securities, and/or the subordinated or junior securities may have junior liens, if they have any rights at all, in any collateral (meaning proceeds of the collateral are required to be paid first to the holders of more senior securities). Subordinated securities are more likely to suffer a credit loss than non-subordinated securities of the same issuer, any loss incurred by the subordinated securities is likely to be proportionately greater, and any recovery of interest or principal may take more time. As a result, even a perceived decline in creditworthiness of the issuer is likely to have a greater impact on them.

Structured Notes and Related Instruments

“Structured” notes and other related instruments are privately negotiated debt obligations where the principal and/or interest is determined by reference to the performance of a benchmark asset, market or interest rate (an “embedded index”), such as selected securities, an index of securities or specified interest rates, or the differential performance of two assets or markets, such as indexes reflecting bonds. Structured instruments may be issued by corporations, including banks, as well as by governmental agencies and frequently are assembled in the form of medium-term notes, but a variety of forms is available and may be used in particular circumstances. The terms of such structured instruments normally provide that their principal and/or interest payments are to be adjusted upwards or downwards (but ordinarily not below zero) to reflect changes in the embedded index while the instruments are outstanding. As a result, the interest and/or principal payments that may be made on a structured product may vary widely, depending on a variety of factors, including the volatility of the embedded index and the effect of changes in the embedded index on principal and/or interest payments. The rate of return on structured notes may be determined by applying a multiplier to the performance or differential performance of the referenced index(es) or other asset(s). Application of a multiplier involves leverage that will serve to magnify the potential for gain and the risk of loss. Investment in indexed securities and structured notes involves certain risks, including the credit risk of the issuer and the normal risks of price changes in response to changes in interest rates. Further, in the case of certain indexed securities or structured notes, a decline in the reference instrument may cause the interest rate to be reduced to zero, and any further declines in the reference instrument may then reduce the principal amount payable on maturity. Finally, these securities may be less liquid than other types of securities, and may be more volatile than their underlying reference instruments.

Loans of Portfolio Securities

Each fund may lend securities from its portfolio to brokers, dealers and financial institutions (but not individuals) if cash, U.S. government securities or other high quality debt obligations equal to at least 102% (105% for foreign securities) of the current market value of the securities loaned (including accrued interest thereon) plus the interest payable to the fund with respect to the loan is maintained with the fund. In determining whether or not to lend a security to a particular broker, dealer or financial institution, the fund’s Adviser considers all relevant facts and circumstances, including the size, creditworthiness and reputation of the broker, dealer or financial institution. Any loans of portfolio securities are fully collateralized based on values that are marked to market daily; should the market value of the loaned securities increase, the borrower must furnish additional collateral. No fund enters into any

portfolio security lending arrangements having a duration longer than one year. At the termination of a loan transaction, a fund has the obligation to return cash or collateral delivered by the borrower. A fund may experience losses on the collateral and may be required to liquidate other investments at inopportune times in order to return amounts to the borrower. In the event of the bankruptcy of the other party to a securities loan, the fund could experience delays in recovering either the securities lent or cash, possible capital losses, and even loss of rights in the collateral should a borrower fail financially. To the extent that, in the meantime, the value of the securities lent has increased or the value of the securities purchased has decreased, a fund could experience a loss. No fund will lend securities having a value that exceeds one-third of the current value of its total assets. Loans of securities by a fund are subject to termination at the fund’s or the borrower’s option. A fund may pay reasonable administrative and custodial fees in connection with a securities loan and may pay a negotiated portion of the interest or fee earned with respect to the collateral to the borrower or the placing broker.

Loans and Other Direct Indebtedness

A fund may purchase loans and other direct indebtedness, although the Stock Funds currently do not intend to make such investments. In purchasing a loan, a fund acquires some or all of the interest of a bank or other lending institution in a loan to a corporate, governmental or other borrower. Loans may be secured or unsecured. Loans that are fully secured offer a fund more protection than an unsecured loan in the event of non-payment of scheduled interest or principal. However, there is no assurance that the liquidation of collateral from a secured loan would satisfy the borrower’s obligation.

These loans typically are made to finance internal growth, mergers, acquisitions, stock repurchases, leveraged buy-outs and other corporate activities. The loans typically are made by a syndicate of lending institutions, represented by an agent lending institution which has negotiated and structured the loan and is responsible for collecting for itself and for others in the syndicate interest, principal and other amounts due, and for enforcing its and their other rights against the borrower. A fund’s investment in loans may be structured as a novation, pursuant to which the fund would assume all of the rights of the lending institution in a loan, or alternatively, as an assignment, pursuant to which the fund would purchase an assignment of a portion of a lender’s interest in a loan either directly from the lender or through an intermediary. A fund may also purchase trade or other claims against companies, which generally represent money owed by the company to a supplier of goods or services.

Certain of the loans and the other direct indebtedness acquired by a fund may involve revolving credit facilities or other standby financing commitments which obligate the fund to pay additional cash on a certain date or on demand. These commitments may have the effect of requiring a fund to increase its investment in a company at a time when the fund might not otherwise decide to do so (including at a time when the company’s financial condition makes it unlikely that such amounts will be repaid). To the extent that a fund is committed to advance additional funds, it will at all times hold and maintain in a segregated account cash or other liquid securities in an amount sufficient to meet such commitments.

A fund’s ability to receive payment of principal, interest and other amounts due in connection with these investments will depend primarily on the financial condition of the borrower. In selecting the loans and other direct indebtedness which the fund will purchase, a fund’s sub-adviser will rely upon its own (and not the original lending institution’s) credit analysis of the borrower. A fund may purchase interests in loans where the borrower has experienced, or may be perceived to be likely to experience, credit problems, including involvement in or recent emergence from bankruptcy reorganization proceedings or other forms of debt restructuring. Some loans may be in default at time of purchase. The highly leveraged nature of many such loans and other direct indebtedness may make such loans and other direct indebtedness especially vulnerable to adverse changes in economic or market conditions.

As a fund may be required to rely upon another lending institution to collect and pass on to the fund amounts payable with respect to the loan and to enforce the fund’s rights under the loan and other direct indebtedness, an insolvency, bankruptcy or reorganization of the lending institution may delay or prevent the fund from receiving such amounts. In such cases, a fund may evaluate as well the creditworthiness of the lending institution and may treat both the borrower and the lending institution as an “issuer” of the loan for purposes of compliance with applicable law pertaining to the diversification of the fund’s portfolio investments.

Investments in loans through a direct assignment of the financial institution’s interests with respect to the loan may involve additional risks to a fund. For example, if a loan is foreclosed, a fund could become part owner of any collateral, and would bear the costs and liabilities associated with owning and disposing of the collateral. In addition, it is conceivable that, under emerging legal theories of lender liability, a fund could be held liable as a co-lender.

Interests in loans or other direct indebtedness are generally illiquid, and there is a limited trading market in these investments. Because there is no liquid market for commercial loans, the funds anticipate that such securities could be sold only to a limited number of institutional investors. The lack of a liquid secondary market may have an adverse impact on the value of such securities and a fund’s ability to dispose of particular loans when necessary to meet redemptions of fund shares, to meet the fund’s liquidity needs or when necessary in response to a specific economic event, such as deterioration in the creditworthiness of the borrower. In addition, the limited trading market can make it difficult to ascertain a market value for these investments.

Temporary Defensive Positions

At times a fund’s sub-adviser may judge that conditions in the securities markets make pursuing the fund’s principal investment strategy inconsistent with the best interest of its shareholders. At such times, a sub-adviser may temporarily use alternative strategies, primarily designed to reduce fluctuations in the value of the fund’s assets. In implementing these defensive strategies, a fund may invest without limit in high quality money market and other short-term instruments. These investments may result in a lower yield than would be available from investments with a lower quality or longer term. During periods in which such strategies are used, the duration of a fund may diverge from the duration range for that fund disclosed in its prospectus (if applicable). It is impossible to predict when, or for how long, a fund will use these alternative strategies. As a result of using these alternative strategies, a fund may not pursue its investment objective.

Master Limited Partnerships

A fund may invest in Master Limited Partnership (“MLP”) units, which have limited control and voting rights, similar to those of a limited partner. An MLP could be taxed, contrary to its intention, as a corporation, resulting in decreased returns. MLPs may, for tax purposes, affect the character of the gain and loss realized by a fund and affect the holding period of a fund’s asset.

Certain Other Obligations

Each fund may invest in instruments other than those listed previously, provided such investments are consistent with the fund’s investment objective, policies and restrictions.

Rating Services

The ratings of rating services represent their opinions as to the quality of the securities that they undertake to rate. It should be emphasized, however, that ratings are relative and subjective and are not absolute standards of quality. Although these ratings are an initial criterion for selection of portfolio investments, the sub-advisers also make their own evaluations of these securities. After purchase by a fund, an obligation may cease to be rated or its rating may be reduced below the minimum required for purchase by the fund. Neither event would require a fund to dispose of the obligation, but the applicable sub-adviser will consider such an event in its determination of whether the fund should continue to hold the obligation. A description of the ratings used herein and in the funds’ Prospectuses is set forth in Appendix B.

Except as stated otherwise, all investment policies and restrictions described herein are nonfundamental, and may be changed without prior shareholder approval.

INVESTMENT POLICIES

The “fundamental policies” of each fund and each portfolio may not be changed with respect to the fund or the portfolio without the approval of a “majority of the outstanding voting securities” of the fund or the portfolio, as the case may be. “Majority of the outstanding voting securities” under the 1940 Act and as used in this SAI and each Prospectus means, with respect to a fund (or a portfolio), the lesser of (i) 67% or more of the outstanding voting securities of the fund (or of the total beneficial interests of the portfolio) present at a meeting, if the holders of more than 50% of the outstanding voting securities of the fund (or of the total beneficial interests of the portfolio) are present or represented by proxy, or (ii) more than 50% of the outstanding voting securities of the fund (or of the total beneficial interests of the portfolio).

Whenever a Money Market, Bond, Balanced or Stock Fund is requested to vote on a fundamental policy of a portfolio, the fund (except in limited circumstances as permitted by applicable rules and regulations) will either hold a meeting of its shareholders and cast its vote as instructed by shareholders, or otherwise vote in accordance with applicable law. Whenever an Asset Allocation Fund is requested to vote on a fundamental policy of an underlying fund, the Asset Allocation Fund will vote its shares in proportion to the vote of all shares of the underlying fund.

Funds and Portfolios (other than the S&P 500 Stock Master Portfolio)

Fundamental Policies

Each fund or portfolio (other than the S&P 500 Stock Master Portfolio), as applicable has adopted the following fundamental policies and restrictions:


	1. The fund or portfolio may not borrow money, except as permitted under the 1940 Act, and as interpreted, modified or otherwise permitted by regulatory authority having jurisdiction, from time to time.

	2. The fund or portfolio may not issue any senior security, except as permitted under the 1940 Act, and as interpreted, modified or otherwise permitted by regulatory authority having jurisdiction, from time to time.

	3. The fund or portfolio may not act as an underwriter of securities within the meaning of the Securities Act of 1933, as amended, (the “Securities Act” or the “1933 Act”) except as permitted under the Securities Act, and as interpreted, modified or otherwise permitted by regulatory authority having jurisdiction, from time to time. Among other things, to the extent that the fund or portfolio may be deemed to be an underwriter within the meaning of the Securities Act, the fund or portfolio may act as an underwriter of securities in connection with the purchase and sale of its portfolio securities in the ordinary course of pursuing its investment objective, investment policies and investment program.

	4. The fund or portfolio may not purchase or sell real estate or any interests therein, except as permitted under the 1940 Act, and as interpreted, modified or otherwise permitted by regulatory authority having jurisdiction, from time to time. Notwithstanding this limitation, the fund or portfolio may, among other things, (i) acquire or lease office space for its own use; (ii) invest in securities of issuers that invest in real estate or interests therein; (iii) invest in mortgage-related securities and other securities that are secured by real estate or interests therein; or (iv) hold and sell real estate acquired by the portfolio as a result of the ownership of securities.

	5. The fund or portfolio may not make loans, except as permitted under the 1940 Act, and as interpreted, modified or otherwise permitted by regulatory authority having jurisdiction, from time to time.

	6. The fund or portfolio may not “concentrate” its investments in a particular industry or group of industries (except those funds or portfolios listed below), except as permitted under the 1940 Act, and as interpreted, modified or otherwise permitted by regulatory authority having jurisdiction from time to time, provided that, without limiting the generality of the foregoing this limitation will not apply to securities issued or guaranteed as to principal and/or interest by the U.S. government, its agencies or instrumentalities, except that (i) each of the Transamerica Partners Money Market Fund, Transamerica Partners Institutional Money Market Fund and Money Market Portfolio may invest without limitation in obligations issued by banks, and (ii) this restriction shall not apply with respect to Transamerica Partners Stock Index Fund or Transamerica Partners Institutional Stock Index Fund to any industry in which the S&P 500 Index (or any other index which the Stock Index Fund selects to track its performance) becomes concentrated to the extent that the Stock Index Fund likewise becomes concentrated.

	7. The fund or portfolio may not purchase physical commodities or contracts relating to physical commodities, except as permitted under the 1940 Act, and as interpreted, modified or otherwise permitted by regulatory authority having jurisdiction, from time to time.

		With respect to the fundamental policy relating to borrowing money set forth in (1) above, the 1940 Act permits a fund or portfolio to borrow money in amounts of up to one-third of its total assets from banks for any purpose, and to borrow up to 5% of the its total assets from banks or other lenders for temporary purposes. To limit the risks attendant to borrowing, the 1940 Act requires a fund or portfolio to maintain at all times an “asset coverage” of at least 300% of the amount of its borrowings. Asset coverage means the ratio that the value of the fund or portfolio’s total assets, minus liabilities other than borrowings, bears to the aggregate amount of all borrowings. Certain trading practices and investments, such as reverse repurchase agreements, may be considered to be borrowing, and thus, subject to the 1940 Act restrictions. Borrowing money to increase portfolio holdings is known as “leveraging.” Borrowing, especially when used for leverage, may cause the value of a fund’s or portfolio’s shares to be more volatile than if the fund or portfolio did not borrow. This is because borrowing tends to magnify the effect of any increase or decrease in the value of the fund’s or portfolio’s holdings. Borrowed money thus creates an opportunity for greater gains, but also greater losses. To repay borrowings, a fund or portfolio may have to sell securities at a time and at a price that is unfavorable to it. There also are costs associated with borrowing money, and these costs would offset and could eliminate a fund’s or portfolio’s net investment income in any given period. The policy in (1) above will be interpreted to permit a fund or portfolio to engage in trading practices and investments that may be considered to be borrowing to the extent permitted by the 1940 Act. Short-term credits necessary for the settlement of securities transactions and arrangements with respect to securities lending will not be considered to be borrowings under the policy. Practices and investments that may involve leverage but are not considered to be borrowings are not subject to the policy.


		With respect to the fundamental policy relating to issuing senior securities set forth in (2) above, “senior securities” are defined as fund or portfolio obligations that have a priority over the fund’s or portfolio’s shares with respect to the payment of dividends or the distribution of its assets. The 1940 Act prohibits a fund or portfolio from issuing senior securities except that a fund or portfolio may borrow money in amounts of up to one-third of its total assets from banks for any purpose. A fund or portfolio also may borrow up to 5% of its total assets from banks or other lenders for temporary purposes, and these borrowings are not considered senior securities. The issuance of senior securities by a fund or portfolio can increase the speculative character of the fund’s or portfolio’s outstanding shares through leveraging. Leveraging of a fund’s or portfolio’s holdings through the issuance of senior securities magnifies the potential for gain or loss on monies, because even though the fund’s or portfolio’s net assets remain the same, the total risk to investors is increased to the extent of its gross assets. The policy in (2) above will be interpreted not to prevent collateral arrangements with respect to swaps, options, forward or futures contracts or other derivatives, or the posting of initial or variation margin.

		With respect to the fundamental policy relating to underwriting set forth in (3) above, the 1940 Act does not prohibit a fund or portfolio from engaging in the underwriting business or from underwriting the securities of other issuers; in fact, the 1940 Act permits a fund or portfolio to have underwriting commitments of up to 25% of its assets under certain circumstances. Those circumstances currently are that the amount of a fund’s or portfolio’s underwriting commitments, when added to the value of the fund’s or portfolio’s investments in issuers where the fund or portfolio owns more than 10% of the outstanding voting securities of those issuers, cannot exceed the 25% cap. A fund or portfolio engaging in transactions involving the acquisition or disposition of portfolio securities may be considered to be an underwriter under the 1933 Act. Under the 1933 Act, an underwriter may be liable for material omissions or misstatements in an issuer’s registration statement or prospectus. Securities purchased from an issuer and not registered for sale under the 1933 Act are considered restricted securities. There may be a limited market for these securities. If these securities are registered under the 1933 Act, they may then be eligible for sale but participating in the sale may subject the seller to underwriter liability. These risks could apply to a fund or portfolio investing in restricted securities. Although it is not believed that the application of the 1933 Act provisions described above would cause a fund or portfolio to be engaged in the business of underwriting, the policy in (2) above will be interpreted not to prevent a fund or portfolio from engaging in transactions involving the acquisition or disposition of portfolio securities, regardless of whether the fund or portfolio may be considered to be an underwriter under the 1933 Act.

		With respect to the fundamental policy relating to real estate set forth in (4) above, the 1940 Act does not prohibit a fund or portfolio from owning real estate; however, a fund or portfolio is limited in the amount of illiquid assets it may purchase. Investing in real estate may involve risks, including that real estate is generally considered illiquid and may be difficult to value and sell. Owners of real estate may be subject to various liabilities, including environmental liabilities. To the extent that investments in real estate are considered illiquid, the current staff position of the Securities and Exchange Commission (“SEC”) generally limits a fund’s or portfolio’s purchases of illiquid securities to 15% of net assets. The policy in (4) above will be interpreted not to prevent a fund or portfolio from investing in real estate-related companies, companies whose businesses consist in whole or in part of investing in real estate, instruments (like mortgages) that are secured by real estate or interests therein, or real estate investment trust securities.

		With respect to the fundamental policy relating to lending set forth in (5) above, the 1940 Act does not prohibit a fund or portfolio from making loans; however, SEC staff interpretations currently prohibit a fund or portfolio from lending more than one-third of its total assets, except through the purchase of debt obligations or the use of repurchase agreements. A repurchase agreement is an agreement to purchase a security, coupled with an agreement to sell that security back to the original seller on an agreed-upon date at a price that reflects current interest rates. The SEC frequently treats repurchase agreements as loans. While lending securities may be a source of income to a fund or portfolio, as with other extensions of credit, there are risks of delay in recovery or even loss of rights in the underlying securities should the borrower fail financially. However, loans would be made only when the fund’s or portfolio’s manager or a sub-adviser believes the income justifies the attendant risks. A fund or portfolio also will be permitted by this policy to make loans of money, including to other funds. A fund or portfolio would have to obtain exemptive relief from the SEC to make loans to other funds or portfolios. The policy in (5) above will be interpreted not to prevent a fund or portfolio from purchasing or investing in debt obligations and loans. In addition, collateral arrangements with respect to options, forward currency and futures transactions and other derivative instruments, as well as delays in the settlement of securities transactions, will not be considered loans.

		With respect to the fundamental policy relating to concentration set forth in (6) above, the 1940 Act does not define what constitutes “concentration” in an industry. The SEC staff has taken the position that investment of 25% or more of a fund’s or portfolio’s total assets in one or more issuers conducting their principal activities in the same industry or group of industries constitutes concentration. It is possible that interpretations of concentration could change in the future. A fund or portfolio that invests a significant percentage of its total assets in a single industry may be particularly susceptible to adverse


		events affecting that industry and may be more risky than a fund that does not concentrate in an industry. The policy in (6) above will be interpreted to refer to concentration as that term may be interpreted from time to time. The policy also will be interpreted to permit investment without limit in the following: securities of the U.S. government and its agencies or instrumentalities; securities of state, territory, possession or municipal governments and their authorities, agencies, instrumentalities or political subdivisions; securities of foreign governments; and repurchase agreements collateralized by any such obligations. Accordingly, issuers of the foregoing securities will not be considered to be members of any industry. There also will be no limit on investment in issuers domiciled in a single jurisdiction or country. The policy also will be interpreted to give broad authority to a fund or portfolio as to how to classify issuers within or among industries.

		With respect to the fundamental policy relating to commodities set forth in (7) above, the 1940 Act does not prohibit a fund or portfolio from owning commodities, whether physical commodities and contracts related to physical commodities (such as oil or grains and related futures contracts), or financial commodities and contracts related to financial commodities (such as currencies and, possibly, currency futures). However, a fund or portfolio is limited in the amount of illiquid assets it may purchase. To the extent that investments in commodities are considered illiquid, the current SEC staff position generally limits a fund’s or portfolio’s purchases of illiquid securities to 15% of net assets. If a fund or portfolio were to invest in a physical commodity or a physical commodity-related instrument, the fund or portfolio would be subject to the additional risks of the particular physical commodity and its related market. The value of commodities and commodity-related instruments may be extremely volatile and may be affected either directly or indirectly by a variety of factors. There also may be storage charges and risks of loss associated with physical commodities. The policy in (7) above will be interpreted to permit investments in exchange traded funds that invest in physical and/or financial commodities.

		The funds’ and portfolios’ fundamental policies are written and will be interpreted broadly. For example, the policies will be interpreted to refer to the 1940 Act and the related rules as they are in effect from time to time, and to interpretations and modifications of or relating to the 1940 Act by the SEC and others as they are given from time to time. When a policy provides that an investment practice may be conducted as permitted by the 1940 Act, the policy will be interpreted to mean either that the 1940 Act expressly permits the practice or that the 1940 Act does not prohibit the practice.

Non-Fundamental Policies. Each fund (other than the Stock Index Funds) will not, as a matter of operating policy, acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Section 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act. This policy does not prevent a fund from investing in securities of registered open-end investment companies or registered unit investment trusts in reliance on any other provision of applicable law or regulation.

Each portfolio will not, as a matter of operating policy, acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act.

These non-fundamental policies may be changed by the Board of Trustees of Transamerica Partners Portfolios or the Trusts, as relevant, without shareholder approval.

S&P 500 Stock Master Portfolio

Fundamental Policies

As a matter of fundamental policy, the S&P 500 Stock Master Portfolio may not:


	(1) Purchase the securities of any single issuer if, as a result, with respect to 75% of the portfolio’s total assets, more than 5% of the value of its total assets would be invested in the securities of such issuer or the portfolio’s ownership would be more than 10% of the outstanding voting securities of such issuer, provided that this restriction does not limit the portfolio’s cash or cash items, investments in securities issued or guaranteed by the U.S. government, its agencies and instrumentalities, or investments in securities of other investment companies.

	(2) Purchase or sell commodities, provided that (i) currency will not be deemed to be a commodity for purposes of this restriction, (ii) this restriction does not limit the purchase or sale of futures contracts, forward contracts or options, and (iii) this restriction does not limit the purchase or sale of securities or other instruments backed by commodities or the purchase or sale of commodities acquired as a result of ownership of securities or other instruments.

	(3) Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the portfolio from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business).


	(4) Borrow money or issue senior securities, except to the extent permitted under the 1940 Act, including the rules, regulations and any orders obtained thereunder.

	(5) Make loans to other parties, except to the extent permitted under the 1940 Act, including the rules, regulations and any orders obtained thereunder. For the purposes of this limitation, entering into repurchase agreements, lending securities and acquiring any debt securities are not deemed to be the making of loans.

	(6) Underwrite securities of other issuers, except to the extent that the purchase of permitted investments directly from the issuer thereof or from an underwriter for an issuer and the later disposition of such securities in accordance with the portfolio’s investment program may be deemed to be an underwriting; and provided further, that the purchase by the portfolio of securities issued by an open-end management investment company, or a series thereof, with substantially the same investment objective, policies and restrictions as the portfolio shall not constitute an underwriting for purposes of this paragraph.

	(7) Purchase the securities of issuers conducting their principal business activity in the same industry if, immediately after the purchase and as a result thereof, the value of the portfolio’s investments in that industry would equal or exceed 25% of the current value of the portfolio’s total assets, provided that this restriction does not limit the portfolio’s: (i) investments in securities of other investment companies, (ii) investments in securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, or (iii) investments in repurchase agreements collateralized by U.S. government securities, and provided further that the portfolio reserves the right to concentrate in any industry in which the index that the portfolio tracks becomes concentrated to approximately the same degree during the same period.

	(8) Purchase securities on margin, but the portfolio may make margin deposits in connection with transactions in options, forward contracts, futures contracts, including those related to indexes, and options on futures contracts or indexes.

Non-fundamental Policies

The S&P 500 Stock Master Portfolio is subject to the following investment restrictions, all of which are non-fundamental:


	(1) The portfolio may invest in shares of other open-end management investment companies, subject to the limitations of Section 12(d)(1) of the 1940 Act, including the rules, regulations and exemptive orders obtained thereunder; provided, however, that the portfolio, if it has knowledge that its beneficial interests are purchased by another investment company investor pursuant to Section 12(d)(1)(G) of the 1940 Act, will not acquire any securities of registered open-end management investment companies or registered unit investment trusts in reliance on Section 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act. Other investment companies in which the portfolio invests can be expected to charge fees for operating expenses, such as investment advisory and administration fees, that would be in addition to those charged by the portfolio.

	(2) The portfolio may not invest more than 15% of its net assets in illiquid securities. For this purpose, illiquid securities include, among others, (a) securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions on resale, (b) fixed time deposits that are subject to withdrawal penalties and that have maturities of more than seven days, and (c) repurchase agreements not terminable within seven days.

	(3) The portfolio may lend securities from its portfolio to brokers, dealers and financial institutions, in amounts not to exceed (in the aggregate) one-third of the portfolio’s total assets. Any such loans of portfolio securities will be fully collateralized based on values that are marked to market daily. The portfolio will not enter into any portfolio security lending arrangement having a duration of longer than one year.

	(4) The portfolio may not purchase interests, leases, or limited partnerships interests in oil, gas, or other mineral exploration or development programs.

The non-fundamental policies (1) through (4) may be changed by the Board of Trustees of the Master Investment Portfolio at any time without shareholder approval.

Portfolio Transactions and Brokerage Commissions

Except as may be required to ensure satisfaction of certain tests applicable to regulated investment companies under the Code, portfolio changes are made without regard to the length of time a security has been held, or whether a sale would result in the recognition of a profit or loss. Therefore, the rate of portfolio turnover is not a limiting factor when changes are appropriate. portfolio

trading is engaged in for a fund if the applicable sub-adviser believes that a transaction net of costs (including custodian charges) will help achieve the fund’s investment objective.

A fund’s purchases and sales of securities may be principal transactions, that is, securities may be purchased directly from the issuer or from an underwriter or market maker for the securities. There usually are no brokerage commissions paid for such purchases and, therefore, the funds do not anticipate paying brokerage commissions in such transactions. BFA may from time to time execute trades on behalf of and for the account of the Master Portfolio with brokers or dealers that are affiliated with BFA.
Brokerage Transactions. The sub-advisers to the funds seek to obtain overall best execution on portfolio trades. The price of securities and any commission rate paid are always factors, but frequently not the only factors, in judging best execution. In selecting brokers or dealers, each sub-adivser considers various relevant factors, including, but not limited to, the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the execution efficiency, settlement capability and financial condition of the dealer; the dealer’s execution services rendered on a continuing basis; and the reasonableness of any dealer spreads.

Each fund’s sub-adviser(s) may use brokers or dealers for fund transactions who also provide brokerage and research services to the fund or other accounts over which the advisers exercise investment discretion. A fund, with the exception of the S&P 500 Stock Master Portfolio, may “pay up” for brokerage services, meaning that it is authorized to pay a broker or dealer who provides these brokerage and research services a commission for executing a portfolio transaction which is higher than the commission than may otherwise have been charged. However, a fund will “pay up” only if the applicable adviser determines in good faith that the higher commission is reasonable in relation to the brokerage and research services provided, viewed in terms of either the particular transaction or all of the accounts over which the adviser exercises investment discretion.

The research received from broker-dealers may be useful to the sub-adviser in rendering investment management services to the fund as well as other investment companies or other accounts managed by the sub-adviser. Conversely, such information provided by brokers or dealers who have executed transaction orders on behalf of such other accounts may be useful to the sub-adviser in carrying out its obligations to the fund. The receipt of such research enables the sub-adviser to avoid the additional expenses that might otherwise be incurred if it were to attempt to develop comparable information through its own staff.

Investment decisions for a fund will be made independently from those for any other account or investment company that is or may in the future become managed by the fund’s sub-adviser or its affiliates. If, however, the fund and other investment companies or accounts managed by the sub-adviser are contemporaneously engaged in the purchase or sale of the same security, the transactions may be averaged as to price and allocated equitably to each account. In some cases, this policy might adversely affect the price paid or received by the fund or the size of the position obtainable for the fund. In addition, when purchases or sales of the same security for the fund and for other investment companies managed by the sub-advisers occur contemporaneously, the purchase or sale orders may be aggregated in order to obtain any price advantages available to large denomination purchases or sales.

The following portfolios paid the aggregate brokerage commissions indicated for the fiscal years noted below:


	Brokerage Commissions Paid (Including Affiliated Brokerage) December 31

Portfolio Name	2010		2009		2008

Balanced Portfolio	$	[ ]	$	24,814	$	17,094
Core Bond Portfolio	$	[ ]	$	277,828	$	5,585
High Quality Bond Portfolio
High Yield Bond Portfolio	$	[ ]	$	318	$	1,750
Inflation-Protected Securities Portfolio	$	[ ]	$	33,613	$	655
International Equity Portfolio	$	[ ]	$	1,641,304	$	6,520,470
Large Core Portfolio	$	[ ]	$	217,330	$	399,111
Large Growth Portfolio	$	[ ]	$	1,477,897	$	2,185,074
Large Value Portfolio	$	[ ]	$	1,177,886	$	1,720,140
Mid Growth Portfolio	$	[ ]	$	1,315,551	$	1,106,196
Mid Value Portfolio	$	[ ]	$	1,200,524	$	1,109,933
Small Core Portfolio	$	[ ]	$	1,700,095	$	3,165,309
Small Growth Portfolio	$	[ ]	$	833,149	$	1,185,848
Small Value Portfolio	$	[ ]	$	271,981	$	829,962
S&P 500 Stock Master Portfolio	$	[ ]	$	14,788	$	113,013

For the year ended December 31, 2008, Large Core Portfolio paid $11,323 in brokerage commissions to Goldman Sachs & Company, an affiliate of Goldman Sachs Asset Management, L.P and $15,857 in brokerage commissions to Goldman Sachs Execution and Clearing, L.P., an affiliate of Goldman Sachs Asset Management, L.P.

For the year ended December 31, 2009, Large Growth Portfolio paid $14,200 in brokerage transactions to Oppenheimer and Co., an affiliate of OFI Institutional Asset Management, Inc.

For the year ended December 31, 2009, Mid Value Portfolio paid $34,323 in brokerage commission to JPMorgan, which is an affiliate of JPMorgan Investment Management.

The following table provides brokerage commissions that were directed to brokers for brokerage and research services provided during the fiscal year ended December 31, 2010.

[To be updated]


Fund Name	Paid as of December 31 2010

Transamerica Partners Balanced Portfolio		$[ ]
Transamerica Core Bond Portfolio		$[ ]
Transamerica High Quality Bond Portfolio		$[ ]
Transamerica High Yield Bond Portfolio		$[ ]
Transamerica Inflation-Protected Securities Portfolio		$[ ]
Transamerica Partners International Equity Portfolio		$[ ]
Transamerica Partners Large Core Portfolio		$[ ]
Transamerica Partners Large Growth Portfolio		$[ ]
Transamerica Partners Large Value Portfolio		$[ ]
Transamerica Partners Mid Growth Portfolio		$[ ]
Transamerica Partners Mid Value Portfolio		$[ ]
Transamerica Money Market Portfolio
Transamerica Partners Small Core Portfolio		$[ ]
Transamerica Partners Small Growth Portfolio		$[ ]
Transamerica Partners Small Value Portfolio		$[ ]

The estimates above are based upon custody data provided to CAPIS using the following methodology: Total Commissions minus transactions executed at discounted rates and/or directed to the funds’ commission recapture program equals total research commissions. USD transactions executed at $.02 and below and non-USD transactions executed at 8 basis points and below are considered to be executed at discounted rates. For example, Commission paid on USD transactions at rates greater than $.02 per share and not directed for commission recapture are assumed to be paid to brokers that provide research and brokerage services within the scope of Section 28(e) of the Securities and Exchange Act of 1

For each affiliated broker, the tables below set forth the percentage of the applicable portfolio’s aggregate brokerage commissions paid to the broker during the fiscal year ended December 31, 2010, and the percentage of the aggregate dollar amount of transactions involving the payment of commissions effected through the broker during the same period.


Portfolio	Percentage of Aggregate Brokerage Commissions Paid		Broker

		[ ]%
		[ ]%

Portfolio	Percentage of Aggregate Dollar Amount Transactions Involving Payment of Commissions		Broker


		[ ]%
		[ ]%

During the fiscal year ended December 31, 2010, the portfolios purchased securities issued by the following regular broker-dealers of the portfolios, which had the following values as of December 31, 2010.


Broker-Dealer	Value of Securities ($000)

		$[ ]
		$[ ]
		$[ ]
		$[ ]
		$[ ]
		$[ ]
		$[ ]
		$[ ]
		$[ ]
		$[ ]
		$[ ]

For the fiscal year ended December 31, 2008, the portfolios executed an aggregate of $8,780,528,367 in brokerage transactions related to research services and paid $8,023,847 in commissions related to such transactions.

For the fiscal year ended December 31, 2009, the Portfolios paid $6,221,584 in brokerage commissions related to research services.

For the fiscal year ended December 31, 2010, the portfolios executed an aggregate of $[ ] in brokerage transactions related to research services and paid $[ ] in commissions related to such transactions.

Determination of Net Asset Value; Valuation of Securities

The price at which shares are purchased or redeemed is the net asset value per share (“NAV”) that is next calculated following receipt and acceptance of a purchase order in good order or receipt of a redemption order in good order by the fund or an authorized intermediary.

When Share Price is Determined

The NAV of all funds is determined on each day the New York Stock Exchange (“NYSE”) is open for business. The NAV is not determined on days when the NYSE is closed (generally, New Year’s Day, Martin Luther King Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas). Foreign securities may trade in their primary markets on weekends or other days when a fund does not price its shares (therefore, the NAV of a fund holding foreign securities may change on days when shareholders will not be able to buy or sell shares of the funds).

Investors may purchase shares of the funds at the “offering price” of the shares, which is the NAV per share plus any applicable initial sales charge.

Purchase orders received in good order and accepted, and redemption orders received in good order, before the close of business on the NYSE, usually 4:00 p.m. Eastern Time, receive the NAV as determined at the close of the NYSE that day (plus or minus applicable sales charges). Purchase and redemption requests received after the NYSE is closed receive the NAV determined as of the close of the NYSE the next day the NYSE is open.

Purchase orders for shares of the Transamerica asset allocation funds that are received in good order and accepted before the close of business on the NYSE receive the NAV determined as of the close of the NYSE that day. For direct purchases, corresponding orders for shares of the underlying constituent funds are priced on the same day that orders for shares of the asset allocation funds are received and accepted. For purchases of shares of the Transamerica asset allocation funds through the NSCC, orders for shares of the underlying constituent funds will be placed after the receipt and acceptance of the settled purchase order for shares of the asset allocation funds. For investments in separate accounts of insurance companies that invest in Class I shares of the funds, orders for Class I shares will be placed after the receipt and acceptance of the investment in the insurance company separate account.

How NAV is Determined

The NAV of each fund is calculated by taking the value of its net assets and dividing by the number of shares of the fund (or class) that are then outstanding.

The Board of Trustees has approved procedures to be used to value the funds’ securities for the purposes of determining the funds’ NAV. The valuation of the securities of the funds is determined in good faith by or under the direction of the Boards. The Boards have delegated certain valuation functions for the funds to TAM.

In general, securities and other investments are valued based on market value priced at the close of regular trading on the NYSE. Fund securities listed or traded on domestic securities exchanges or the NASDAQ/NMS, including dollar-denominated foreign securities or ADRs, are valued at the closing price on the exchange or system where the security is principally traded. With respect to securities traded on the NASDAQ/NMS, such closing price may be the last reported sale price or the NASDAQ Official Closing Price (“NOCP”). If there have been no sales for that day on the exchange or system where the security is principally traded, then the value should be determined with reference to the last sale price, or the NOCP, if applicable, on any other exchange or system. If there have been no sales for that day on the exchange or system where the security is principally traded, then the value should be determined with reference to the last sale price or the NOCP, if applicable, on any other exchange or system. If there have been no sales for that day on any exchange or system, a security is valued at the closing bid quotes on the exchange or system where the security is principally traded, or at the NOCP, if applicable. Foreign securities traded on U.S. exchanges are generally priced using last sale price regardless of trading activity. Securities traded over the counter are valued at the mean of the last bid and asked prices. The market price for debt obligations is generally the price supplied by an independent third party pricing service approved by the funds’ Boards, which may use a matrix, formula or other objective method that takes into consideration market indices, yield curves and other specific adjustments. Investments in securities maturing in 60 days or less may be valued at amortized cost. Foreign securities generally are valued based on quotations from the primary market in which they are traded, and are converted from the local currency into U.S. dollars using current exchange rates. Market quotations for securities prices may be obtained from automated pricing services. Shares of open-end investment companies are generally valued at the net asset value per share reported by that investment company.

When a market quotation for a security is not readily available (which may include closing prices deemed to be unreliable because of the occurrence of a subsequent event), a valuation committee appointed by the Boards of Trustees may, in good faith, establish a fair value for the security in accordance with fair valuation procedures adopted by the Boards. The types of securities for which such fair value pricing may be required include, but are not limited to: foreign securities, where a significant event occurs after the close of the foreign market on which such security principally trades that is likely to have changed the value of such security, or the closing value is otherwise deemed unreliable; securities of an issuer that has entered into a restructuring; securities whose trading has been halted or suspended; fixed-income securities that have gone into default and for which there is no current market value quotation; and securities that are restricted as to transfer or resale. The funds use a fair value model developed by an independent third party pricing service to price foreign equity securities on days when there is a certain percentage change in the value of a domestic equity security index, as such percentage may be determined by TAM from time to time.

Valuing securities in accordance with fair value procedures involves greater reliance on judgment than valuing securities based on readily available market quotations. The valuation committee makes fair value determinations in good faith in accordance with funds’ valuation procedures. Fair value determinations can also involve reliance on quantitative models employed by a fair value pricing service. There can be no assurance that a fund could obtain the fair value assigned to a security if it were to sell the security at approximately the time at which the fund determines its NAV per share.

Management

Each of the Transamerica Partners Money Market, Bond, Balanced and Stock Funds and the Transamerica Institutional Asset Allocation Funds is supervised by the Board of Trustees of the Transamerica Partners Trust. Each of the Transamerica Partners Institutional Money Market, Bond, Balanced and Stock Funds and the Transamerica Asset Allocation Funds is supervised by the Board of Trustees of the Transamerica Partners Institutional Trust. Each portfolio other than the S&P 500 Stock Master Portfolio is supervised by the Board of Trustees of Transamerica Partners Portfolios. The S&P 500 Stock Master Portfolio is supervised by the Board of Trustees of the Master Investment Portfolio.

The respective Trustees and officers of each Trust and each portfolio Trust and their principal occupations during the past five years are set forth below. Their titles may have varied during that period. The length of time served is provided from the date a Trustee became a Trustee of any of the Trusts or Transamerica Partners Portfolios. Asterisks indicate those Trustees who are “interested persons” (as defined in the 1940 Act) of a Trust or a Portfolio Trust, as the case may be. The address of each Trustee and officer of the Trusts and Transamerica Partners Portfolios is 570 Carillon Parkway, St. Petersburg, Florida 33716.

BOARD MEMBERS AND OFFICERS

The Board Members and executive officers of the Trust are listed below. The Board governs each fund and is responsible for protecting the interests of the shareholders. The Board Members are experienced executives who meet periodically throughout the year to oversee the business affairs of each fund and the operation of the Trust by its officers. The Board also reviews the management of each fund’s assets by the investment adviser and its respective sub-adviser. The funds are among the funds advised and sponsored by TAM (collectively, “Transamerica Asset Management Group”). Transamerica Asset Management Group (“TAMG”) consists of Transamerica Funds, Transamerica Series Trust (“TST”), Transamerica Income Shares, Inc. (“TIS”), Transamerica Partners Funds Group (“TPFG”), Transamerica Partners Funds Group II (“TPFG II”), Transamerica Partners Portfolios (“TPP”), and Transamerica Asset Allocation Variable Funds (“TAAVF”) and consists of 150 funds as of the date of this SAI.

The mailing address of each Board Member is c/o Secretary, 570 Carillon Parkway, St. Petersburg, Florida 33716. The Board Members, their ages, their positions with the Trust, and their principal occupations for the past five years (their titles may have varied during that period), the number of funds in TAMG the Board oversees, and other board memberships they hold are set forth in the table below.


Name and Age	Position(s) Held with Trust	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Funds in Complex Overseen by Board Member	Other Directorships


INTERESTED BOARD MEMBER**

John K. Carter (1961)	Chairman, Board Member, President, and	Since 2007	Chairman and Board Member (2008 – present), President (2007 – present), Chief Executive Officer (2006 –	150	N/A


Name and Age	Position(s) Held with Trust	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Funds in Complex Overseen by Board Member	Other Directorships

	Chief Executive Officer		present), Vice President, Secretary and Chief Compliance Officer (2003 – 2006), Transamerica Investors, Inc. (“TII”);

			Chairman, Board Member, President and Chief Executive Officer, TPP, TPFG, TPFG II and TAAVF (2007 – present);

			Chairman (2007 – present), Board Member (2006 – present), President and Chief Executive Officer (2006 – present), Senior Vice President (1999 – 2006), Chief Compliance Officer, General Counsel and Secretary (1999 – 2006), Transamerica Funds and TST;

			Chairman (2007 – present), Board Member (2006 – present), President and Chief Executive Officer (2006 – present), Senior Vice President (2002 – 2006), General Counsel, Secretary and Chief Compliance Officer (2002 – 2006), TIS;

			Chairman, President and Chief Executive Officer (2006 – present), Director (2002 – present), Senior Vice President (1999 – 2006), General Counsel and Secretary (2000 – 2006), Chief Compliance Officer (2004 – 2006), TAM;

			Chairman, President and Chief Executive Officer (2006 – present), Senior Vice President (1999 – 2006), Director (2002 – present), General Counsel and Secretary (2001 – 2006), Transamerica Fund Services, Inc. (“TFS”);

			Vice President, AFSG Securities Corporation (2001 –present);

			Senior Vice President, General Counsel and Secretary, Transamerica Index Funds, Inc. (“TIF”) (2002 – 2004); and

			Director, (2008 – present), Vice President, Transamerica Investment Services, Inc. (“TISI”) (2003 – 2005) and Transamerica Investment


Name and Age	Position(s) Held with Trust	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Funds in Complex Overseen by Board Member	Other Directorships

			Management, LLC (“TIM”) (2001 – 2005).

INDEPENDENT BOARD MEMBERS***

Sandra N. Bane (1952)	Board Member	Since 2008	Retired (1999 – present); Partner, KPMG (1975 – 1999); Board Member, TII (2003 – present); and Board Member, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2008 – present).	150	Big 5 Sporting Goods (2002 – present); AGL Resources, Inc. (energy services holding company) (2008 – present)

Leo J. Hill (1956)	Lead Independent Board Member	Since 2007	Principal, Advisor Network Solutions, LLC (business consulting) (2006 – present);	150	N/A

			Board Member, TST (2001 – present);

			Board Member, Transamerica Funds and TIS (2002 – present);

			Board Member, TPP, TPFG, TPFG II and TAAVF (2007 – present);

			Board Member, TII (2008 – present);

			President, L. J. Hill & Company (a holding company for privately-held assets) (1999 – present);

			Market President, Nations Bank of Sun Coast Florida (1998 – 1999);

			Chairman, President and Chief Executive Officer, Barnett Banks of Treasure Coast Florida (1994 – 1998);

			Executive Vice President and Senior Credit Officer, Barnett Banks of Jacksonville, Florida (1991 – 1994); and

			Senior Vice President and Senior Loan Administration Officer, Wachovia Bank of Georgia (1976 – 1991).

David W. Jennings (1946)	Board Member	Since 2009	Board Member, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2009 – present);	150	N/A


Name and Age	Position(s) Held with Trust	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Funds in Complex Overseen by Board Member	Other Directorships

			Board Member, TII (2009 – present);

			Principal, Maxam Capital Management, LLC (2006 – 2008); and

			Principal, Cobble Creek Management LP (2004 – 2006).

Russell A. Kimball, Jr. (1944)	Board Member	Since 2007	General Manager, Sheraton Sand Key Resort (1975 – present);	150	N/A

			Board Member, TST (1986 – present);

			Board Member, Transamerica Funds, (1986 – 1990), (2002 – present);

			Board Member, TIS (2002 – present);

			Board Member, TPP, TPFG, TPFG II and TAAVF (2007 – present); and

			Board Member, TII (2008 – present).

Eugene M. Mannella (1954)	Board Member	Since 1993	Chief Executive Officer, HedgeServ Corporation (hedge fund administration) (2008 – present);	150	N/A

			Self-employed consultant (2006 – present);

			President, ARAPAHO Partners LLC (limited purpose broker-dealer) (1998 – 2008);

			Board Member, TPP, TPFG, TPFG II and TAAVF (1993 – present);

			Board Member, Transamerica Funds, TST and TIS (2007 – present);

			Board Member, TII (2008 – present); and

			President, International Fund Services (alternative asset administration) (1993 – 2005).

Norman R. Nielsen,	Board Member	Since 2007	Retired (2005 – present);	150	Buena Vista


Name and Age	Position(s) Held with Trust	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Funds in Complex Overseen by Board Member	Other Directorships

Ph.D. (1939)			Board Member, Transamerica Funds, TST and TIS (2006 – present); Board Member, TPP, TPFG, TPFG II and TAAVF (2007 – present); Board Member, TII (2008 – present); Director, Iowa Student Loan Service Corporation (2006 – present); Director, League for Innovation in the Community Colleges (1985 – 2005); Director, Iowa Health Systems (1994 – 2003); Director, U.S. Bank (1985 – 2006); and President, Kirkwood Community College (1985 – 2005).		University Board of Trustees (2004 - present)

Joyce G. Norden (1939)	Board Member	Since 1993	Retired (2004 – present); Board Member, TPFG, TPFG II and TAAVF (1993 – present); Board Member, TPP (2002 – present); Board Member, Transamerica Funds, TST and TIS (2007 – present); Board Member, TII (2008 – present); and Vice President, Institutional Advancement, Reconstructionist Rabbinical College (1996 – 2004).	150	Board of Governors, Reconstruction-ist Rabbinical College (2007 - present)

Patricia L. Sawyer (1950)	Board Member	Since 1993	Retired (2007 – present); President/Founder, Smith & Sawyer LLC (management consulting) (1989 – 2007); Board Member, Transamerica Funds, TST and TIS (2007 – present); Board Member, TII (2008 – present);	150	Honorary Trustee, Bryant University (1996 – present)


Name and Age	Position(s) Held with Trust	Term of Office and Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Funds in Complex Overseen by Board Member	Other Directorships

			Board Member, TPP, TPFG, TPFG II and TAAVF (1993 – present);

			Trustee, Chair of Finance Committee and Chair of Nominating Committee (1987 – 1996), Bryant University;

			Vice President, American Express (1987 – 1989);

			Vice President, The Equitable (1986 – 1987); and

			Strategy Consultant, Booz, Allen & Hamilton (1982 – 1986).

John W. Waechter (1952)	Board Member	Since 2007	Attorney, Englander & Fischer, P.A. (2008 – present); Retired (2004 – 2008); Board Member, TST and TIS (2004 – present); Board Member, Transamerica Funds (2005 – present); Board Member, TPP, TPFG, TPFG II and TAAVF (2007 – present); Board Member, TII (2008 – present); Employee, RBC Dain Rauscher (securities dealer) (2004); Executive Vice President, Chief Financial Officer and Chief Compliance Officer, William R. Hough & Co. (securities dealer) (1979 – 2004); and Treasurer, The Hough Group of Funds (1993 – 2004).	150	Operation PAR, Inc. (2008 – present); West Central Florida Council – Boy Scouts of America (2008 – present)


*	Each Board Member shall hold office until: 1) his or her successor is elected and qualified or 2) he or she resigns, retires or his or her term as a Board Member is terminated in accordance with the Trust’s Declaration of Trust.
**	May be deemed an “interested person” (as that term is defined in the 1940 Act) of the Trust because of his employment with TAM or an affiliate of TAM.
***	Independent Board Member means a Board Member who is not an “interested person” (as defined under the 1940 Act) of the Trust.

OFFICERS

The mailing address of each officer is c/o Secretary, 570 Carillon Parkway, St. Petersburg, Florida 33716. The following table shows information about the officers, including their ages, their positions held with the Trust and their principal occupations during the past five years (their titles may have varied during that period). Each officer will hold office until his or her successor has been duly elected or appointed or until his or her earlier death, resignation or removal.


Name and Age	Position	Term of Office and Length of Time Served*	Principal Occupation(s) or Employment During Past 5 Years


John K. Carter (1961)	Chairman, Board Member, President, and Chief Executive Officer	Since 2007	See the table above.

Dennis P. Gallagher (1970)	Vice President, General Counsel and Secretary	Since 2007	Vice President, General Counsel and Secretary, Transamerica Funds, TST and TIS (2006 – present);

			Vice President, General Counsel and Secretary, TII, (2006 – present);

			Vice President, General Counsel and Secretary, TPP, TPFG, TPFG II and TAAVF (2007 – present);

			Director, Senior Vice President, General Counsel, Operations, and Secretary, TAM and TFS (2006 – present);

			Assistant Vice President, TCI (2007 – present); and

			Director, Deutsche Asset Management (1998 – 2006).

Robert A. DeVault, Jr. (1965)	Vice President, Treasurer and Principal Financial Officer	Since 2009	Vice President, Treasurer and Principal Financial Officer, (March 2010 – present), Assistant Treasurer, (2009 – 2010), Transamerica Funds, TST, TII, TIS, TPP, TPFG, TPFG II and TAAVF;

			Vice President (March 2010 – present), Assistant Vice President (2007 – 2010) and Manager, Fund Administration, (2002 – 2007), TFS; and Vice President (March 2010 – present), TAM.

Christopher A. Staples (1970)	Vice President and Chief Investment Officer	Since 2007	Vice President and Chief Investment Officer (2007 – present); Vice President - Investment Administration (2005 – 2007), TII;

			Vice President and Chief Investment Officer (2007 – present), Senior Vice President - Investment Management (2006 – 2007), Vice President - Investment Management (2005 – 2006), Transamerica Funds, TST and TIS;

			Vice President and Chief Investment Officer, TPP, TPFG, TPFG II and TAAVF (2007 – present);

			Director (2005 – present), Senior Vice President – Investment Management (2006 – present) and Chief Investment Officer (2007 – present), TAM;


Name and Age	Position	Term of Office and Length of Time Served*	Principal Occupation(s) or Employment During Past 5 Years


			Director, TFS (2005 – present); and

			Assistant Vice President, Raymond James & Associates (1999 – 2004).

Robert S. Lamont, Jr. (1973)	Vice President, Chief Compliance Officer and Conflicts of Interest Officer	Since 2010	Vice President, Chief Compliance Officer and Conflicts of Interest Officer, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (February 2010 – present);

			Vice President and Senior Counsel, TAM and TFS (2007 – present);

			Senior Counsel, United States Securities and Exchange Commission (2004 – 2007); and

			Associate, Dechert, LLP (1999 – 2004).

Bradley O. Ackerman (1966)	Anti-Money Laundering Officer	Since 2009	Anti-Money Laundering Officer, TPP, TPFG, TPFG II and TAAVF (2009 – present);

			Anti-Money Laundering Officer, Transamerica Funds (2007 – present);

			Senior Compliance Officer, TAM (2007 – present); and

			Director, Institutional Services, Rydex Investments (2002 – 2007).

Sarah L. Bertrand (1967)	Assistant Secretary	Since 2009	Assistant Secretary, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2009 – present);

			Assistant Secretary, TII (2009 – present);

			Assistant Vice President and Director, Legal Administration, TAM and TFS (2007 – present);

			Assistant Secretary and Chief Compliance Officer, 40\|86 Series Trust and 40\|86 Strategic Income Fund (2000 - 2007); and

			Second Vice President and Assistant Secretary, Legal and Compliance, 40\|86 Capital Management, Inc. (1994 – 2007).

Timothy J. Bresnahan (1968)	Assistant Secretary	Since 2009	Assistant Secretary, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2009 – present);

			Assistant Secretary, TII (2009 – present);

			Counsel, TAM (2008 – present);

			Counsel (contract), Massachusetts Financial Services, Inc. (2007);

			Assistant Counsel, BISYS Fund Services Ohio, Inc. (2005 – 2007); and

			Associate, Greenberg Traurig, P.A. (2004 – 2005).


Name and Age	Position	Term of Office and Length of Time Served*	Principal Occupation(s) or Employment During Past 5 Years

Margaret A. Cullem-Fiore (1957)	Assistant Secretary	Since 2010	Assistant Secretary, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (April 2010 – present);

			Assistant Vice President, TCI (2009 – present);

			Vice President and Senior Counsel, TAM and TFS (2006 – present);

			Vice President and Senior Counsel, Transamerica Financial Advisors, Inc. (2004 – 2007); and

			Vice President and Senior Counsel, Western Reserve Life Assurance Co. of Ohio (2006).

Richard E. Shield, Jr. (1974)	Tax Officer	Since 2008	Tax Officer, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2008 – present);

			Tax Officer, TII (2008 – present);

			Tax Manager, Jeffrey P. McClanathan, CPA (2006 – 2007) and Gregory, Sharer & Stuart (2005 – 2006);

			Tax Senior, Kirkland, Russ, Murphy & Tapp, P.A. (2003 – 2005); and

			Certified Public Accountant, Schultz, Chaipel & Co., LLP (1998 – 2003).

Elizabeth Strouse (1974)	Assistant Treasurer	Since 2010	Assistant Treasurer, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (April 2010 – present);

			Director, Fund Financial Services (2009 - present), TFS;

			Director, Fund Administration, TIAA-CREF (2007 – 2009); and

			Manager (2006 – 2007) and Senior (2003 – 2006) Accounting and Assurance, PricewaterhouseCoopers, LLC.


*	Elected and serves at the pleasure of the Board of the Trust.

If an officer has held offices for different funds for different periods of time, the earliest applicable date is shown. No officer of the Trust, except for the Chief Compliance Officer, receives any compensation from the Trust.

Each of the Board Members, other than Mr. Jennings, previously served as a trustee or director of the TAM, Diversified or Premier fund family, and each Board Member was thus initially selected by the board of the applicable predecessor fund family. In connection with the consolidation of all “manager of managers” investment advisory services within Transamerica in 2007, a single board was established to oversee the TAM and Diversified fund families, and each of the Board Members, other than Ms. Bane and Mr. Jennings, joined the Board at that time. The Board was established with a view both to ensuring continuity of representation by board members of the TAM and Diversified fund families on the Board and in order to establish a Board with experience in and focused on

overseeing various types of funds, which experience would be further developed and enhanced over time. Ms. Bane joined the Board in 2008 when the Premier fund family was consolidated into TAMG. Mr. Jennings joined the Board in 2009.

The Board believes that each Board Member’s experience, qualifications, attributes or skills on an individual basis and in combination with those of the other Board Members lead to the conclusion that the Board possesses the requisite skills and attributes. The Board believes that the Board Members’ ability to review critically, evaluate, question and discuss information provided to them, to interact effectively with TAM, the sub-advisers, other services providers, counsel and independent auditors, and to exercise effective business judgment in the performance of their duties, support this conclusion. The Board also has considered the following experience, qualifications, attributes and/or skills, among others, of its members in reaching its conclusion: his or her character and integrity; such person’s service as a board member of a predecessor fund family (other than Mr. Jennings); such person’s willingness to serve and willingness and ability to commit the time necessary to perform the duties of a Board Member; the fact that such person’s service would be consistent with the requirements of the retirement policies of the Trust; as to each Board Member other than Mr. Carter, his or her status as not being an “interested person” as defined in the 1940 Act; and, as to Mr. Carter, his status as a representative of TAM. In addition, the following specific experience, qualifications, attributes and/or skills apply as to each Board Member: Ms. Bane, accounting experience and experience as a board member of multiple organizations; Mr. Hill, financial and entrepreneurial experience as an executive, owner and consultant; Mr. Jennings, investment management experience as an executive of investment management organizations and portfolio manager; Mr. Kimball, business experience as an executive; Mr. Mannella, accounting and fund administration experience, investment management industry experience as an executive and consultant; Mr. Nielsen, academic leadership, insurance, business development and board experience; Ms. Norden, non-profit executive experience and extensive board and academic leadership; Ms. Sawyer, management consulting and board experience; Mr. Waechter, securities industry and fund accounting and fund compliance experience, legal experience and board experience; and Mr. Carter, investment management experience as an executive and leadership roles with TAM and affiliated entities. References to the qualifications, attributes and skills of Board Members are pursuant to requirements of the Securities and Exchange Commission, do not constitute holding out of the Board or any Board Member as having any special expertise or experience, and shall not impose any greater responsibility or liability on any such person or on the Board by reason thereof.

The Board is responsible for overseeing the management and operations of the funds. Mr. Carter serves as Chairman of the Board. Mr. Carter is an interested person of the funds. Independent Board Members constitute more than 75% of the Board.

The Board has two standing committees: the Audit Committee and Nominating Committee. Both the Audit Committee and Nominating Committee are chaired by an Independent Board Member and composed of all of the Independent Board Members. In addition, the Board has a Lead Independent Board Member.

The Lead Independent Board Member and the chairs of the Audit and Nominating Committees work with the Chairman of the Board to set the agendas for Board and committee meetings. The Lead Independent Board Member also serves as a key point person for dealings between management and the Independent Board Members. Through the funds’ board committees the Independent Board Members consider and address important matters involving the funds, including those presenting conflicts or potential conflicts of interest for management and they believe they can act independently and effectively.

The Board currently believes that an interested Chairman is appropriate and is in the best interests of the funds and their shareholders, and that its committees help ensure that the funds have effective and independent governance and oversight. The Board believes that an interested Chairman has a professional interest in the quality of the services provided to the funds and that the Chairman is best equipped to provide oversight of such services on a day-to-day basis because of TAM’s sponsorship of the funds and TAM’s ongoing monitoring of the investment sub-advisers that manage the assets of each fund. The Board also believes that its leadership structure facilitates the orderly and efficient flow of information to the Independent Board Members from management. The Independent Board Members also believe that they can effectively act independently without having an Independent Board Member act as Chairman. Among other reasons, this belief is based on the fact that the Independent Board members represent over 75% of the Board.

The Audit Committee, among other things, oversees the accounting and reporting policies and practices of the Trust, oversees the quality and integrity of the financial statements of the Trust, approves, prior to appointment, the engagement of the Trust’s independent registered public accounting firm, reviews and evaluates the independent registered public accounting firm’s qualifications, independence and performance, and approves the compensation of the independent registered public accounting firm. The Audit Committee also approves all audit and permissible non-audit services provided to each fund by the independent registered public accounting firm and all permissible non-audit services provided by each fund’s independent registered public accounting firm to TAM and any affiliated service providers if the engagement relates directly to each fund’s operations and financial reporting.

The Nominating Committee is a forum for identifying, considering, selecting and nominating, or recommending for nomination by the Board, candidates to fill vacancies on the Board.

When addressing vacancies, the Nominating Committee sets any necessary standards or qualifications for service on the Board and may consider nominees recommended by any source it deems appropriate, including Management and shareholders. Shareholders who wish to recommend a nominee should send recommendations to the Trust’s Secretary that include all information relating to such person that is required to be disclosed in solicitations of proxies for the election of Board Members. A recommendation must be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the shareholders.

The Nominating Committee also identifies potential nominees through its network of contacts and may also engage, if it deems appropriate, a professional search firm. The committee meets to discuss and consider such candidates’ qualifications and then chooses a candidate by majority vote. The committee does not have specific, minimum qualifications for nominees, nor has it established specific qualities or skills that it regards as necessary for one or more of the Board Members to possess (other than any qualities or skills that may be required by applicable law, regulation or listing standard). The committee has, however, established (and reviews from time to time as it deems appropriate) certain desired qualities and qualifications for nominees, including certain personal attributes and certain skills and experience.

Through its oversight of the management and operations of the funds, the Board also has a risk oversight function, which includes (without limitation) the following: (i) requesting and reviewing reports on the operations of the funds (such as reports about the performance of the funds); (ii) reviewing compliance reports and approving compliance policies and procedures of the funds and their service providers; (iii) meeting with management to consider areas of risk and to seek assurances that adequate resources are available to address risks; (iv) meeting with service providers, including fund auditors, to review fund activities; and (v) meeting with the Chief Compliance Officer and other officers of the funds and their service providers to receive information about compliance, and risk assessment and management matters. Such oversight is exercised primarily through the Board and its Audit Committee but, on an ad hoc basis, also can be exercised by the Independent Board Members during executive sessions. The Board has emphasized to TAM and the sub-advisers the importance of maintaining vigorous risk management.
The Board recognizes that not all risks that may affect the funds can be identified, that it may not be practical or cost-effective to eliminate or mitigate certain risks, that it may be necessary to bear certain risks (such as investment-related risks) to achieve the funds’ goals, and that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness. Moreover, reports received by the Board Members as to risk management matters are typically summaries of the relevant information. Most of the funds’ investment management and business affairs are carried out by or through TAM, its affiliates, the sub-advisers and other service providers each of which has an independent interest in risk management but whose policies and the methods by which one or more risk management functions are carried out may differ from the funds’ and each other’s in the setting of priorities, the resources available or the effectiveness of relevant controls. As a result of the foregoing and other factors, the Board’s risk management oversight is subject to substantial limitations.

In addition, it is important to note that each fund is designed for investors that are prepared to accept investment risk, including the possibility that as yet unforeseen risks may emerge in the future.

Additional Information about the Committees of the Board

Both the Audit Committee and Nominating Committee are composed of all of the Independent Board Members. For the fiscal year ended December 31, 2010, the Audit Committee met [ ] times and the Nominating Committee met [ ] time.

TRUSTEES OF MASTER INVESTMENT PORTFOLIO

The Board of Trustees consists of thirteen individuals (each, a “Trustee”), eleven of whom are not “interested persons” of BlackRock Fund III as defined in the 1940 Act (the “Independent Trustees”). The same individuals serve on the Board of Trustees of the MIP Master Investment Portfolio (“MIP”). The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds, two complexes of open-end funds (the Equity-Liquidity Complex and the Equity-Bond Complex) and one complex of exchange-traded funds (each, a “BlackRock Fund Complex”). BlackRock Funds III is included in the BlackRock Fund Complex referred to as the Equity-Liquidity Complex. The Trustees also oversee as board members the operations of the other open-end registered investment companies included in the Equity-Liquidity Complex. The address for each Trustee and officer is Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055.

The Board of Trustees has overall responsibility for the oversight of BlackRock Funds III and the S&P 500 Stock Master Portfolio. The Co-Chairs of the Board are Independent Trustees, and the Chair of each Board committee (each, a “Committee”) is an

Independent Trustee. The Board has five standing Committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight and Contract Committee and an Executive Committee. The Board also has one ad hoc committee, the Joint Product Pricing Committee. The role of the Co-Chairs of the Board is to preside at all meetings of the Board, and to act as a liaison with service providers, officers, attorneys, and other Trustees generally between meetings. The Chair of each Committee performs a similar role with respect to the Committee. The Co-Chairs of the Board or the Chair of a Committee may also perform such other functions as may be delegated by the Board or the Committee from time to time. The Independent Trustees meet regularly outside the presence of BlackRock Funds III management, in executive session or with other service providers to BlackRock Funds III and the S&P 500 Stock Master Portfolio. The Board has regular meetings five times a year, and may hold special meetings if required before its next regular meeting. Each Committee meets regularly to conduct the oversight functions delegated to that Committee by the Board and reports its findings to the Board. The Board and each standing Committee conduct annual assessments of their oversight function and structure. The Board has determined that the Board’s leadership structure is appropriate because it allows the Board to exercise independent judgment over management and to allocate areas of responsibility among Committees and the full Board to enhance effective oversight.

The Board has engaged BFA to manage the S&P 500 Stock Master Portfolio on a day-to-day basis. The Board is responsible for overseeing BFA, other service providers, the operations of the S&P 500 Stock Master Portfolio and associated risk in accordance with the provisions of the 1940 Act, state law, other applicable laws, BlackRock Funds III’s charter, and the S&P 500 Stock Master Portfolio’s investment objectives and strategies. The Board reviews, on an ongoing basis, the S&P 500 Stock Master Portfolio’s performance, operations, and investment strategies and techniques. The Board also conducts reviews of BFA and its role in running the operations of the S&P 500 Stock Master Portfolio.

Day-to-day risk management with respect to the S&P 500 Stock Master Portfolio is the responsibility of BFA or of subadvisers or other service providers (depending on the nature of the risk), subject to the supervision of BFA. The S&P 500 Stock Master Portfolio is subject to a number of risks, including investment, compliance, operational and valuation risks, among others. While there are a number of risk management functions performed by BFA and the subadvisers or other service providers, as applicable, it is not possible to eliminate all of the risks applicable to the S&P 500 Stock Master Portfolio. Risk oversight forms part of the Board’s general oversight of the S&P 500 Stock Master Portfolio and is addressed as part of various Board and Committee activities. The Board, directly or through a Committee, also reviews reports from, among others, management, the independent registered public accounting firm for the S&P 500 Stock Master Portfolio, sub-advisers, and internal auditors for the investment adviser or its affiliates, as appropriate, regarding risks faced by the S&P 500 Stock Master Portfolio and management’s or the service provider’s risk functions. The Committee system facilitates the timely and efficient consideration of matters by the Trustees, and facilitates effective oversight of compliance with legal and regulatory requirements and of the S&P 500 Stock Master Portfolio’s activities and associated risks.

The Board has appointed a Chief Compliance Officer, who oversees the implementation and testing of the S&P 500 Stock Master Portfolio’s compliance program and reports to the Board regarding compliance matters for the S&P 500 Stock Master Portfolio and its service providers. The Independent Trustees have engaged independent legal counsel to assist them in performing their oversight responsibilities.

The members of the Audit Committee are Kenneth L. Urish (Chair), Herbert I. London and Frederick W. Winter, all of whom are Independent Trustees. The principal responsibilities of the Audit Committee are to approve the selection, retention, termination and compensation of BlackRock Funds III’s independent registered public accounting firm (the “independent auditors”) and to oversee the independent auditors’ work. The Audit Committee’s responsibilities include, without limitation, to (1) evaluate the qualifications and independence of the independent auditors; (2) approve all audit engagement terms and fees for the S&P 500 Stock Master Portfolio; (3) review the conduct and results of each independent audit the S&P 500 Stock Master Portfolio’s financial statements; (4) review any issues raised by the independent auditors or BlackRock Funds III management regarding the accounting or financial reporting policies and practices of the S&P 500 Stock Master Portfolio and the internal controls of the S&P 500 Stock Master Portfolio and certain service providers; (5) oversee the performance of the S&P 500 Stock Master Portfolio’s internal audit function provided by its investment adviser, administrator, pricing agent or other service provider; (6) discuss with BlackRock Funds III management its policies regarding risk assessment and risk management and (7) resolve any disagreements between BlackRock Funds III management and the independent auditors regarding financial reporting. The Board has adopted a written charter for the Audit Committee. During the fiscal year ended December 31, 2010, the Audit Committee met [ ] time.

The members of the Governance and Nominating Committee (the “Governance Committee”) are Dr. Matina Horner (Chair), Cynthia A. Montgomery and Robert C. Robb, Jr., all of whom are Independent Trustees. The principal responsibilities of the Governance Committee are to (1) identify individuals qualified to serve as Independent Trustees of BlackRock Funds III and recommend Independent Trustee nominees for election by shareholders or appointment by the Board; (2) advise the Board with respect to Board composition, procedures and committees (other than the Audit Committee); (3) oversee periodic self-assessments of the Board and

committees of the Board (other than the Audit Committee); (4) review and make recommendations regarding Independent Trustee compensation; and (5) monitor corporate governance matters and develop appropriate recommendations to the Board. The Governance Committee may consider nominations for the office of Trustee made by S&P 500 Stock Master Portfolio shareholders as it deems appropriate. S&P 500 Stock Master Portfolio shareholders who wish to recommend a nominee should send nominations to the Secretary of BlackRock Funds III that include biographical information and set forth the qualifications of the proposed nominee. The Board has adopted a written charter for the Governance Committee. During the fiscal year ended December 31, 2010, the Governance Committee met [ ] time.

The members of the Compliance Committee are Joseph P. Platt, Jr. (Chair), Cynthia A. Montgomery and Robert C. Robb, Jr., all of whom are Independent Trustees. The Compliance Committee’s purpose is to assist the Board in fulfilling its responsibility to oversee regulatory and fiduciary compliance matters involving BlackRock Funds III, the S&P 500 Stock Master Portfolio-related activities of BlackRock and BlackRock Funds III’s third party service providers. The Compliance Committee’s responsibilities include, without limitation, to (1) oversee the compliance policies and procedures of BlackRock Funds III and its service providers and recommend changes or additions to such policies and procedures; (2) review information on and, where appropriate recommend policies concerning, BlackRock Funds III’s compliance with applicable law; and (3) review reports from, oversee the annual performance review of, and make certain recommendations regarding BlackRock Funds III’s Chief Compliance Officer. The Board has adopted a written charter for the Compliance Committee. During the fiscal year ended December 31, 2010, the Compliance Committee met [ ] times.

The members of the Performance Oversight and Contract Committee (the “Performance Oversight Committee”) are David O. Beim (Chair), Toby Rosenblatt (Vice Chair), Ronald W. Forbes and Rodney D. Johnson, all of whom are Independent Trustees. The Performance Oversight Committee’s purpose is to assist the Board in fulfilling its responsibility to oversee the S&P 500 Stock Master Portfolio’s investment performance relative to its agreed-upon performance objectives and to assist the Independent Trustees in their consideration of investment advisory agreements. The Performance Oversight Committee’s responsibilities include, without limitation, to (1) review the S&P 500 Stock Master Portfolio’s investment objectives, policies and practices and the S&P 500 Stock Master Portfolio’s investment performance; (2) review personnel and resources devoted to management of the S&P 500 Stock Master Portfolio and evaluate the nature and quality of information furnished to the Performance Oversight Committee; (3) recommend any required action regarding change in fundamental and non-fundamental investment policies and restrictions, fund mergers or liquidations; (4) request and review information on the nature, extent and quality of services provided to the shareholders; and (5) make recommendations to the Board concerning the approval or renewal of investment advisory agreements. The Board has adopted a written charter for the Performance Oversight Committee. During the fiscal year ended December 31, 2009, the Performance Oversight Committee met one time. The Boards of the Equity-Liquidity Complex, the Equity-Bond Complex and the closed-end BlackRock Fund Complex, established the ad hoc Joint Product Pricing Committee (the “Product Pricing Committee”) comprised of eight members drawn from the independent board members serving on the boards of these BlackRock Fund Complexes. Ronald W. Forbes and Rodney D. Johnson are members of the Product Pricing Committee representing the Equity-Liquidity Complex. One independent board member representing the closed-end BlackRock Fund Complex and five independent board members representing the Equity-Bond Complex serve on the Product Pricing Committee. The Product Pricing Committee is chaired by an independent board member from the Equity-Bond Complex. The purpose of the Product Pricing Committee is to review the components and pricing structure of the non-money market funds in the BlackRock Fund Complexes. During the fiscal year ended December 31, 2010, the Product Pricing Committee met [ ] times.

The members of the Executive Committee are Ronald W. Forbes and Rodney D. Johnson, both of whom are Independent Trustees, and Richard S. Davis, who serves as an interested Trustee. The principal responsibilities of the Executive Committee are to (1) act on routine matters between meetings of the Board; (2) act on such matters as may require urgent action between meetings of the Board; and (3) exercise such other authority as may from time to time be delegated to the Executive Committee by the Board. The Board has adopted a written charter for the Executive Committee. During the fiscal year ended December 31, 2010, the Executive Committee met [ ] time.

The Governance Committee has adopted a statement of policy that describes the experience, qualifications, skills and attributes that are necessary and desirable for potential Independent Trustee candidates (the “Statement of Policy”). The Board believes that each Independent Trustee satisfied, at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. Furthermore, in determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, skills, attributes and qualifications, which allow the Board to operate effectively in governing BlackRock Funds III and protecting the interests of shareholders. Among the attributes common to all Trustees are their ability to review critically, evaluate, question and discuss information provided to them, to interact effectively with BlackRock Funds III’s investment adviser, sub-advisers, other service providers, counsel and independent auditors, and to exercise

effective business judgment in the performance of their duties as Trustees. Each Trustee’s ability to perform his or her duties effectively is evidenced by his or her educational background or professional training; business, consulting, public service or academic positions; experience from service as a board member of BlackRock Funds III and the other funds in the BlackRock Fund Complex (and any predecessor funds), other investment funds, public companies, or non-profit entities or other organizations; ongoing commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout the years; or other relevant life experiences. Information about the specific experience, skills, attributes and qualifications of each Trustee, which in each case led to the Board’s conclusion that the Trustee should serve (or continue to serve) as a Trustee of BlackRock Funds III, is provided below.


Name and Age	Position(s) Held With The Trust	Length of Time Served⁽²⁾	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships

Independent Trustees⁽¹⁾
David O. Beim⁽³⁾ (69)	Trustee	2009 to present	Professor of Finance and Economics at the Columbia University Graduate School of Business since 1991; Trustee, Phillips Exeter Academy since 2002; Chairman, Wave Hill, Inc. (public garden and cultural center) from 1990 to 2006.	36 RICs consisting of 104 Portfolios	None

Name and Age	Position(s) Held With The Trust	Length of Time Served⁽²⁾	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships

Ronald W. Forbes⁽⁴⁾ (69)	Trustee	2009 to present	Professor Emeritus of Finance, School of Business, State University of New York at Albany since 2000.	36 RICs consisting of 104 Portfolios	None


Name and Age	Position(s) Held With The Trust	Length of Time Served⁽²⁾	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships


Dr. Matina S. Horner⁽⁵⁾ (70)	Trustee	2009 to present	Executive Vice President of Teachers Insurance and Annuity Association and College Retirement Equities Fund from 1989 to 2003.	36 RICs consisting of 104 Portfolios	NSTAR (electric and gas utility)
Rodney D. Johnson⁽⁴⁾ (68)	Trustee	2009 to present	President, Fairmont Capital Advisors, Inc. since 1987; Director, Fox Chase Cancer Center since 2002; Member of Archdiocesan Investment Committee of the Archdiocese of Philadelphia since 2003; Director, The Committee of Seventy (civic) since 2006.	36 RICs consisting of 104 Portfolios	None
Herbert I. London (70)	Trustee	2009 to present	Professor Emeritus, New York University since 2005; John M. Olin Professor of Humanities, New York University from 1993 to 2005 and Professor thereof from 1980 to 2005; President, Hudson Institute (policy research organization) since 1997 and Trustee thereof since 1980; Chairman of the Board of Trustees for Grantham University since 2006; Director, InnoCentive, Inc. (strategic solutions company) since	36 RICs consisting of 104 Portfolios	AIMS Worldwide, Inc. (marketing)


Name and Age	Position(s) Held With The Trust	Length of Time Served⁽²⁾	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships

			2005; Director of Cerego, LLC (software development and design) since 2005.
Cynthia A. Montgomery (57)	Trustee	2009 to present	Professor, Harvard Business School since 1989; Director, Harvard Business School Publishing since 2005; Director, McLean Hospital since 2005	36 RICs consisting of 104 Portfolios	Newell Rubbermaid, Inc. (manufacturing)
Joseph P. Platt, Jr.⁽⁶⁾ (62)	Trustee	2009 to present	Director, The West Penn Allegheny Health System (a not-for-profit health system) since 2008; Director, Jones and Brown (Canadian insurance broker) since 1998; General Partner, Thorn Partner, LP (private investment) since 1998; Partner Amarna Corporation, LLC (private investment company) from 2002 to 2008.	36 RICs consisting of 104 Portfolios	Greenlight Capital Re, Ltd (reinsurance company); WQED Multi-media (public broadcasting not-for-profit)
Robert C. Robb, Jr. (64)	Trustee	2009 to present	Partner, Lewis, Eckert, Robb and Company (management and financial consulting firm) since 1981.	36 RICs consisting of 104 Portfolios	None
Toby Rosenblatt⁽⁷⁾ (71)	Trustee	2009 to present	President, Founders Investments Ltd. (private investments) since 1999; Director, College Access Foundation of California	36 RICs consisting of 104 Portfolios	A.P. Pharma Inc. (specialty pharmaceuticals)


Name and Age	Position(s) Held With The Trust	Length of Time Served⁽²⁾	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships

			(philanthropic foundation) since 2009; Director, Forward Management, LLC since 2007; Director, the James Irvine Foundation (philanthropic foundation) since 1997; Trustee, State Street Research Mutual Funds from 1990 to 2005; Trustee, Metropolitan Series Funds, Inc. from 2001 – 2005.
Kenneth L. Urish⁽⁸⁾ (58)	Trustee	2009 to present	Managing Partner, Urish Popeck & Co., LLC (certified public accountants and consultants) since 1976; Member of External Advisory Board, the Pennsylvania State University Accounting Department since 2001; Trustee, The Holy Family Foundation since 2001; Committee Member, Professional Ethics Committee of the Pennsylvania Institute of Certified Public Accountants since 2007; President and Trustee, Pittsburgh Catholic Publishing Associates from 2003 to 2008; Director, Inter-Tel from 2006 to 2007.	36 RICs consisting of 104 Portfolios	None


Name and Age	Position(s) Held With The Trust	Length of Time Served⁽²⁾	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships

Frederick W. Winter (64)	Trustee	2009 to present	Professor and Dean Emeritus of the Joseph M. Katz School of Business, University of Pittsburgh since 2005 and dean thereof from 1997 to 2005; Director, Alkon Corporation (pneumatics)since 1992; Director, Indotronix International (IT services) from 2004 to 2008; Director Tippman Sports(recreation) since 2005.	36 RICs consisting of 104 Portfolios	None
Interested Trustees^(1),(9)
Richard S. Davis (64)	Trustee	2009 to present	Managing Director, BlackRock, Inc. since 2005; Chief Executive Officer, State Street Research & Management Company from 2000 to 2005; Chairman of the Board of Trustees, State Street Research Mutual Funds from 2000 to 2005; Chairman, SSR Realty from 2000 to 2004.	169 RICs consisting of 298 Portfolios	None
Henry Gabbay (62)	Trustee	2009 to present	Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Formerly Chief Administrative Officer, BlackRock	169 RICs consisting of 298 Portfolios	None


Name and Age	Position(s) Held With The Trust	Length of Time Served⁽²⁾	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships

			Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007 and Treasurer of certain closed-end funds in the BlackRock fund complex from 1989 to 2006.



⁽¹⁾	Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. The Board of Trustees has approved one-year extensions in the terms of Trustees who turn 72 prior to December 31, 2013.

⁽²⁾	In connection with the acquisition of Barclays Global Investors by BlackRock, Inc. in December 2009, the Trustees were elected to the Trust’s Board. As a result, although the chart shows the Trustees as joining the Trust’s Board in 2009, each Trustee first became a member of the boards of other funds advised by BlackRock Advisors, LLC or its affiliates as follows: David O. Beim, 1998; Ronald W. Forbes, 1977; Dr. Matina Horner, 2004; Rodney D. Johnson, 1995; Herbert I. London, 1987; Cynthia A. Montgomery, 1994; Joseph P. Platt, Jr., 1999; Robert C. Robb, Jr., 1999; Toby Rosenblatt, 2005; Kenneth L. Urish, 1999; and Frederick W. Winter, 1999.

⁽³⁾	Chair of the Performance Oversight Committee.

⁽⁴⁾	Co-Chair of the Board of Trustees.

⁽⁵⁾	Chair of the Governance Committee.

⁽⁶⁾	Chair of the Compliance Committee.

⁽⁷⁾	Vice Chair of the Performance Oversight Committee.

⁽⁸⁾	Chair of the Audit Committee.

⁽⁹⁾	Mr. Davis is an “interested person,” as defined in the 1940 Act, of the Trust based on his position with BlackRock, Inc. and its affiliates. Mr. Gabbay is an “interested person” of the Trust based on his former positions with BlackRock, Inc. and its affiliates as well as his ownership of BlackRock, Inc. and The PNC Financial Services Group, Inc. securities.

Certain biographical and other information relating to the officers of the Trust is set forth below, including their year of birth, their principal occupations for at least the last five years, the length of time served, the total number of registered investment companies and portfolios overseen in the BlackRock-advised Funds and any public directorships.


Officers

Name and Year of Birth	Position(s) Held with the Trust	Length of Time Served	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships
Trust Officers⁽¹⁾

Anne F. Ackerley 1962	President and Chief Executive Officer	2009 to present	Managing Director of BlackRock, Inc. since 2000; Vice President of the BlackRock-advised funds from 2007 to 2009; Chief Operating Officer of BlackRock’s Account Management Group (AMG) since 2009; Chief Operating Officer of BlackRock’s U.S. Retail Group from 2006 to 2009; Head of BlackRock’s Mutual Fund Group from 2000 to 2006.	169 RICs consisting of 298 Portfolios	None
Richard Hoerner, CFA 1958	Vice President	2009 to present	Managing Director of BlackRock, Inc. since 2000; Co-head of BlackRock’s Cash Management Portfolio Management Group since 2002; Member of the Cash Management Group Executive Committee since 2005; Director of BlackRock, Inc. since 1998.	24 RICs consisting of 73 Portfolios	None


Name and Year of Birth	Position(s) Held with the Trust	Length of Time Served	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships
Jeffrey Holland, CFA 1971	Vice President	2009 to present	Director of BlackRock, Inc. since 2006; Chief Operating Officer of BlackRock’s U.S. Retail Group since 2009; Co-head of Product Development and Management for BlackRock’s U.S. Retail Group from 2007 to 2009; Product Manager of Raymond James & Associates from 2003 to 2006.	70 RICs consisting of 201 Portfolios	None
Brendan Kyne 1977	Vice President	2009 to present	Director of BlackRock, Inc. since 2008; Head of Product Development and Management for BlackRock’s U.S. Retail Group since 2009, co-head thereof from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008; Associate of BlackRock, Inc. from 2002 to 2004.	169 RICs consisting of 298 Portfolios	None


Name and Year of Birth	Position(s) Held with the Trust	Length of Time Served	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships
Simon Mendelson 1964	Vice President	2009 to present	Managing Director of BlackRock, Inc. since 2005; Chief Operating Officer and head of the Global Client Group for BlackRock’s Global Cash Management Business since 2007; Head of BlackRock’s Strategy and Development Group from 2005 to 2007; Partners of McKinsey & Co. from 1997 to 2005.	24 RICs consisting of 73 Portfolios	None
Brian Schmidt 1958	Vice President	2009 to present	Managing Director of BlackRock, Inc. since 2004; Various positions with U.S. Trust Company from 1991 to 2003; Director from 2001 to 2003; Senior Vice President from 1998 to 2003; Vice President, Chief Financial Officer and Treasurer of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust from 2001 to 2003.	70 RICs consisting of 201 Portfolios	None


Name and Year of Birth	Position(s) Held with the Trust	Length of Time Served	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships
Christopher Stavrakos, CFA 1959	Vice President	2009 to present	Managing Director of BlackRock, Inc. since 2006; Co-head of BlackRock’s Cash Management Portfolio Management Group since 2006; Senior Vice President, CIO, and Director of Liability Management for the Securities Lending Group at Mellon Bank from 1999 to 2006.	24 RICs consisting of 73 Portfolios	None
Neal J. Andrews 1966	Chief Financial Officer and Assistant Treasurer	2009 to present	Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund Accounting Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006.	169 RICs consisting of 298 Portfolios	None


Name and Year of Birth	Position(s) Held with the Trust	Length of Time Served	Principal Occupations(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Directorships
Jay M. Fife 1970	Treasurer	2009 to present	Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Assistant Treasurer of the Merrill Lynch Investment Managers, L.P. (“MLIM”) and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.	169 RICs consisting of 298 Portfolios	None
Brian P. Kindelan 1959	Chief Compliance Officer and Anti-Money Laundering Compliance Officer	2009 to present	Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel of BlackRock, Inc. since 2005; formerly Director and Senior Counsel of BlackRock Advisors, Inc. from 2001 to 2004.	169 RICs consisting of 298 Portfolio	None
Howard B. Surloff 1965	Secretary	2009 to present	Managing Director and General Counsel of U.S. Funds at BlackRock, Inc. since 2006; General Counsel (U.S.) of Goldman Sachs Asset Management, L.P. from 1993 2006.	169 RICs consisting of 198 Portfolio	None



(1)	Officers of the Trust serve at the pleasure of the Board of Trustees.

TRUSTEE COMPENSATION

For the fiscal year ended December 31, 2010, Transamerica Partners Funds Group provided the following compensation to the Trustees. Mr. Carter is not compensated for his services as Trustee because of his affiliation with TAM.

[To be updated]


Trustee	Transamerica Partners Balanced	Transamerica Partners Core Bond	Transamerica Partners High Quality Bond

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee	Transamerica Partners High Yield Bond	Transamerica Partners Inflation-Protected Securities	Transamerica Partners International Equity

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee	Transamerica Partners Large Core	Transamerica Partners Large Growth	Transamerica Partners Large Value

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee	Transamerica Partners Mid Growth	Transamerica Partners Mid Value	Transamerica Partners Money Market

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee	Transamerica Partners Small Core	Transamerica Partners Small Growth	Transamerica Partners Small Value

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee		Transamerica Partners Stock Index

Sandra N. Bane		$[ ]
Leo J. Hill		$[ ]
David W. Jennings		$[ ]
Russell A. Kimball, Jr		$[ ]
Eugene M. Mannella		$[ ]
Norm R. Nielsen		$[ ]
Joyce Galpern Norden		$[ ]
Patricia L. Sawyer		$[ ]
John W. Waechter		$[ ]

For the fiscal year ended December 31, 2010, Transamerica Partners Funds Group II provided the following compensation to the Trustees. Mr. Carter is not compensated for his services as Trustee because of his affiliation with TAM.


Trustee	Transamerica Partners Institutional Balanced	Transamerica Partners Institutional Core Bond	Transamerica Partners Institutional High Quality Bond

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee	Transamerica Partners Institutional High Yield Bond	Transamerica Partners Institutional Inflation- Protected Securities	Transamerica Partners Institutional International Equity

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee	Transamerica Partners Institutional Large Core	Transamerica Partners Institutional Large Growth	Transamerica Partners Institutional Large Value

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee	Transamerica Partners Institutional Mid Growth	Transamerica Partners Institutional Mid Value	Transamerica Partners Institutional Money Market

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee	Transamerica Partners Institutional Small Core	Transamerica Partners Institutional Small Growth	Transamerica Partners Institutional Small Value

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee		Transamerica Partners Institutional Stock Index

Sandra N. Bane		$[ ]
Leo J. Hill		$[ ]
David W. Jennings		$[ ]
Russell A. Kimball, Jr		$[ ]
Eugene M. Mannella		$[ ]
Norm R. Nielsen		$[ ]
Joyce Galpern Norden		$[ ]
Patricia L. Sawyer		$[ ]
John W. Waechter		$[ ]

For the fiscal year ended December 31, 2010, Transamerica Partners Portfolios provided the following compensation to the Trustees. Mr. Carter is not compensated for his services as Trustee because of his affiliation with TAM.


Trustee	Transamerica Partners Balanced Portfolio	Transamerica Partners Core Bond Portfolio	Transamerica Partners High Quality Bond Portfolio

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee	Transamerica Partners High Yield Bond Portfolio	Transamerica Partners Inflation-Protected Securities Portfolio	Transamerica Partners International Equity Portfolio

Sandra N. Bane	$[ ]	$[ ]	$[ ]
Leo J. Hill	$[ ]	$[ ]	$[ ]
David W. Jennings	$[ ]	$[ ]	$[ ]
Russell A. Kimball, Jr	$[ ]	$[ ]	$[ ]
Eugene M. Mannella	$[ ]	$[ ]	$[ ]
Norm R. Nielsen	$[ ]	$[ ]	$[ ]
Joyce Galpern Norden	$[ ]	$[ ]	$[ ]
Patricia L. Sawyer	$[ ]	$[ ]	$[ ]
John W. Waechter	$[ ]	$[ ]	$[ ]


Trustee	Transamerica Partners Large Core Portfolio		Transamerica Partners Large Growth Portfolio		Transamerica Partners Large Value Portfolio

Sandra N. Bane		$[ ]		$[ ]		$[ ]
Leo J. Hill		$[ ]		$[ ]		$[ ]
David W. Jennings		$[ ]		$[ ]		$[ ]
Russell A. Kimball, Jr		$[ ]		$[ ]		$[ ]
Eugene M. Mannella		$[ ]		$[ ]		$[ ]
Norm R. Nielsen		$[ ]		$[ ]		$[ ]
Joyce Galpern Norden		$[ ]		$[ ]		$[ ]
Patricia L. Sawyer		$[ ]		$[ ]		$[ ]
John W. Waechter		$[ ]		$[ ]		$[ ]


Trustee	Transamerica Partners Mid Growth Portfolio		Transamerica Partners Mid Value Portfolio		Transamerica Partners Money Market Portfolio

Sandra N. Bane		$[ ]		$[ ]		$[ ]
Leo J. Hill		$[ ]		$[ ]		$[ ]
David W. Jennings		$[ ]		$[ ]		$[ ]
Russell A. Kimball, Jr		$[ ]		$[ ]		$[ ]
Eugene M. Mannella		$[ ]		$[ ]		$[ ]
Norm R. Nielsen		$[ ]		$[ ]		$[ ]
Joyce Galpern Norden		$[ ]		$[ ]		$[ ]
Patricia L. Sawyer		$[ ]		$[ ]		$[ ]
John W. Waechter		$[ ]		$[ ]		$[ ]


Trustee	Transamerica Partners Small Core Portfolio		Transamerica Partners Small Growth Portfolio		Transamerica Partners Small Value Portfolio

Sandra N. Bane		$[ ]		$[ ]		$[ ]
Leo J. Hill		$[ ]		$[ ]		$[ ]
David W. Jennings		$[ ]		$[ ]		$[ ]
Russell A. Kimball, Jr		$[ ]		$[ ]		$[ ]
Eugene M. Mannella		$[ ]		$[ ]		$[ ]
Norm R. Nielsen		$[ ]		$[ ]		$[ ]
Joyce Galpern Norden		$[ ]		$[ ]		$[ ]
Patricia L. Sawyer		$[ ]		$[ ]		$[ ]
John W. Waechter		$[ ]		$[ ]		$[ ]



Trustee	Pension or Retirement Benefits Accrued as Part of Fund Expenses		Total Compensation Paid to Trustees from Fund Asset Management Group⁽¹⁾

Sandra N. Bane		—		$[ ]
Leo J. Hill		—		$[ ]
David W. Jennings		—		$[ ]
Russell A. Kimball, Jr		—		$[ ]
Eugene M. Mannella		—		$[ ]
Norm R. Nielsen		—		$[ ]
Joyce Galpern Norden		—		$[ ]
Patricia L. Sawyer		—		$[ ]
John W. Waechter		—		$[ ]

(1)

Of this aggregate compensation, the total amounts deferred from the Trust (including earnings and dividends) and accrued for the benefit of the participating Trustees for the year ended December 31, 2010, were as follows: Sandra N. Bane, $[ ]; Leo J. Hill, $[ ]; David W. Jennings, $[ ]; Russell A. Kimball, Jr., $[ ]; Eugene M. Mannella, $[ ]; Norman R. Nielsen, $[ ]; Joyce G. Norden, $[ ]; Patricia L. Sawyer, $[ ]; and John W. Waechter, $[ ].

Independent Trustees receive a total annual retainer fee of $124,000 from the funds/portfolios that make up the Transamerica Asset Management Group, as well as total fees of $8,800 per meeting (assumes five meetings annually), of which the Trust pays a pro rata share allocable to each series of Transamerica Partners Funds Group and Transamerica Partners Funds Group II based on the relative assets of the series. The Lead Independent Board Member of the Board also receives an additional retainer of $40,000 per year. The Audit Committee Chairperson receives an additional retainer of $15,000 per year. The Trust also pays a pro rata share allocable to each series of Transamerica Partners Funds Group and Transamerica Partners Funds Group II based on the relative assets of the series of the Lead Independent Board Member and Audit Committee Chairperson retainers. Any fees and expenses paid to Trustees who are affiliates of TAM or TCI are paid by TAM and/or TCI and not by the Trusts.

Under a non-qualified deferred compensation plan effective January 1, 2008, as amended and restated January 1, 2010 (the “Deferred Compensation Plan”) available to the Board Members, compensation may be deferred that would otherwise be payable by the Trusts or Portfolio Trust to an Independent Board Members on a current basis for services rendered as Board Members. Deferred compensation amounts will accumulate based on the value of the Class A (or comparable) shares of a series of Transamerica Funds (without imposition of sales charge), or investment options under Transamerica Partners Institutional Funds and Transamerica Institutional Asset Allocation Funds, as elected by the Board Members. It is not anticipated that the Deferred Compensation Plan will have any material impact on the portfolios.

Amounts deferred and accrued under the Deferred Compensation Plan are unfunded and unsecured claims against the general assets of the Trusts and the Portfolio Trusts.

TRUSTEE COMPENSATION FOR MASTER INVESTMENT PORTFOLIO

The table below indicates the amount of compensation each Trustee of BlackRock Funds III was paid for the fiscal year ended December 31, 2010.


Name and Position	Aggregate compensation from the Trust		Total Compensation from Fund Complex¹

Interested Trustees
Richard S. Davis		$ 0		$ 0
Henry Gabbay		$ 0		$ 0
Independent Trustees
David O. Beim		$[ ]		$[ ]
Ronald W. Forbes		$[ ]		$[ ]
Dr. Matina S. Horner		$[ ]		$[ ]
Rodney D. Johnson		$[ ]		$[ ]
Herbert I. London		$[ ]		$[ ]
Cynthia A. Montgomery		$[ ]		$[ ]
Joseph P. Platt, Jr.		$[ ]		$[ ]
Robert C. Robb, Jr.		$[ ]		$[ ]
Toby Rosenblatt		$[ ]		$[ ]
Kenneth L. Urish		$[ ]		$[ ]
Frederick W. Winter		$[ ]		$[ ]

[(1) Includes compensation for serving on the Board of MIP Trustees of BlackRock Funds III.]

EQUITY SECURITY OWNERSHIP

As of December 31, 2010, none of the disinterested Trustees nor their family members beneficially owned any securities of the Trusts, TAM or TCI or any person (other than a registered investment company) directly or indirectly controlling, controlled by or under common control with the Trusts, TAM or TCI.

The table below gives the dollar range of shares of the Trusts, as well as the aggregate dollar range of shares of all funds/portfolios in the Transamerica Asset Management Group owned by each Trustee as of December 31, 2010.

[To be updated]


Trustee	Dollar Range of Equity Securities in Transamerica Partners Balanced		Dollar Range of Equity Securities in Transamerica Partners Core Bond		Dollar Range of Equity Securities in Transamerica Partners High Quality Bond

John K. Carter*		None		$1 - $10,000		Over $100,000
Sandra N. Bane		None		None		None
Leo J. Hill		None		None		None
David W. Jennings		None		None		None
Russell A. Kimball, Jr		None		None		None
Eugene M. Mannella		None		None		None
Norm R. Nielsen		None		None		None
Joyce Galpern Norden		None		None		None
Patricia L. Sawyer		None		None		None
John W. Waechter		None		None		None


Trustee	Dollar Range of Equity Securities in Transamerica Partners High Yield Bond		Dollar Range of Equity Securities in Transamerica Partners Inflation-Protected Securities		Dollar Range of Equity Securities in Transamerica Partners International Equity

John K. Carter*		$1 - $10,000		None		$1 - $10,000
Sandra N. Bane		None		None		None
Leo J. Hill		None		None		None
David W. Jennings		None		None		None
Russell A. Kimball, Jr		None		None		None
Eugene M. Mannella		None		None		None
Norm R. Nielsen		None		None		None
Joyce Galpern Norden		None		None		None
Patricia L. Sawyer		None		None		None
John W. Waechter		None		None		None


Trustee	Dollar Range of Equity Securities in Transamerica Partners Large Core		Dollar Range of Equity Securities in Transamerica Partners Large Growth		Dollar Range of Equity Securities in Transamerica Partners Large Value

John K. Carter*		None		$10,001 - $50,000		$10,001 - $50,000
Sandra N. Bane		None		None		None
Leo J. Hill		None		None		None
David W. Jennings		None		None		None
Russell A. Kimball, Jr		None		None		None
Eugene M. Mannella		None		None		None
Norm R. Nielsen		None		None		None
Joyce Galpern Norden		None		None		None
Patricia L. Sawyer		None		None		None
John W. Waechter		None		None		None


Trustee	Dollar Range of Equity Securities in Transamerica Partners Mid Growth		Dollar Range of Equity Securities in Transamerica Partners Mid Value		Dollar Range of Equity Securities in Transamerica Partners Money Market

John K. Carter*		None		$1 - $10,000		None
Sandra N. Bane		None		None		None
Leo J. Hill		None		None		None
David W. Jennings		None		None		None
Russell A. Kimball, Jr		None		None		None
Eugene M. Mannella		None		None		None
Norm R. Nielsen		None		None		None
Joyce Galpern Norden		None		None		None
Patricia L. Sawyer		None		None		None
John W. Waechter		None		None		None


Trustee	Dollar Range of Equity Securities in Transamerica Partners Small Core		Dollar Range of Equity Securities in Transamerica Partners Small Growth		Dollar Range of Equity Securities in Transamerica Partners Small Value

John K. Carter*		$10,001 - $50,000		None		None
Sandra N. Bane		None		None		None
Leo J. Hill		None		None		None
David W. Jennings		None		None		None
Russell A. Kimball, Jr		None		None		None
Eugene M. Mannella		None		None		None
Norm R. Nielsen		None		None		None
Joyce Galpern Norden		None		None		None
Patricia L. Sawyer		None		None		None
John W. Waechter		None		None		None


Trustee	Dollar Range of Equity Securities in Transamerica Partners Stock Index		Dollar Range of Equity Securities in Transamerica Asset Allocation – Intermediate Horizon		Dollar Range of Equity Securities in Transamerica Asset Allocation – Intermediate/Long Horizon

John K. Carter*		$1 - $10,000		None		None
Sandra N. Bane		None		None		None
Leo J. Hill		None		None		None
David W. Jennings		None		None		None
Russell A. Kimball, Jr		None		None		None
Eugene M. Mannella		None		None		None
Norm R. Nielsen		None		None		None
Joyce Galpern Norden		None		None		None
Patricia L. Sawyer		None		None		None
John W. Waechter		None		None		None


Trustee	Dollar Range of Equity Securities in Transamerica Asset Allocation – Long Horizon		Dollar Range of Equity Securities in Transamerica Asset Allocation – Short Horizon		Dollar Range of Equity Securities in Transamerica Asset Allocation – Short/Intermediate Horizon

John K. Carter*		None		None		None
Sandra N. Bane		None		None		None
Leo J. Hill		None		None		None
David W. Jennings		None		None		None
Russell A. Kimball, Jr		None		None		None
Eugene M. Mannella		None		None		None
Norm R. Nielsen		None		None		None
Joyce Galpern Norden		None		None		None
Patricia L. Sawyer		None		None		None
John W. Waechter		None		None		None


Trustee	Dollar Range of Equity Securities in Transamerica Partners Institutional Balanced	Dollar Range of Equity Securities in Transamerica Partners Institutional Core Bond	Dollar Range of Equity Securities in Transamerica Partners Institutional High Quality

John K. Carter*	None	None	None
Sandra N. Bane	None	None	None
Leo J. Hill	None	None	None
David W. Jennings	None	None	None
Russell A. Kimball, Jr	None	None	None
Eugene M. Mannella	None	None	None
Norm R. Nielsen	None	None	None
Joyce Galpern Norden	None	None	None
Patricia L. Sawyer	None	None	$10,0001 - $50,000
John W. Waechter	None	None	None

Trustee	Dollar Range of Equity Securities in Transamerica Partners Institutional High Yield	Dollar Range of Equity Securities in Transamerica Partners Institutional Inflation-Protected Securities	Dollar Range of Equity Securities in Transamerica Partners Institutional International Equity

John K. Carter*	None	None	None
Sandra N. Bane	None	None	None
Leo J. Hill	None	None	None
David W. Jennings	None	None	None
Russell A. Kimball, Jr	None	None	None
Eugene M. Mannella	None	None	None
Norm R. Nielsen	None	None	None
Joyce Galpern Norden	None	None	None
Patricia L. Sawyer	None	None	None
John W. Waechter	None	None	None

Trustee	Dollar Range of Equity Securities in Transamerica Partners Institutional Large Core	Dollar Range of Equity Securities in Transamerica Partners Institutional Large Growth	Dollar Range of Equity Securities in Transamerica Partners Institutional Large Value

John K. Carter*	None	None	None
Sandra N. Bane	None	None	None
Leo J. Hill	None	None	None
David W. Jennings	None	None	None
Russell A. Kimball, Jr	None	None	None
Eugene M. Mannella	None	None	None
Norm R. Nielsen	None	None	None
Joyce Galpern Norden	None	None	None
Patricia L. Sawyer	None	None	None
John W. Waechter	None	None	None


Trustee	Dollar Range of Equity Securities in Transamerica Partners Institutional Mid Growth	Dollar Range of Equity Securities in Transamerica Partners Institutional Mid Value	Dollar Range of Equity Securities in Transamerica Partners Institutional Money Market

John K. Carter*	None	None	None
Sandra N. Bane	None	None	None
Leo J. Hill	None	None	None
David W. Jennings	None	None	None
Russell A. Kimball, Jr	None	None	None
Eugene M. Mannella	None	None	None
Norm R. Nielsen	None	None	None
Joyce Galpern Norden	None	None	None
Patricia L. Sawyer	None	None	None
John W. Waechter	None	None	None

Trustee	Dollar Range of Equity Securities in Transamerica Partners Institutional Small Core	Dollar Range of Equity Securities in Transamerica Partners Institutional Small Growth	Dollar Range of Equity Securities in Transamerica Partners Institutional Small Value

John K. Carter*	None	None	None
Sandra N. Bane	None	None	None
Leo J. Hill	None	None	None
David W. Jennings	None	None	None
Russell A. Kimball, Jr	None	None	None
Eugene M. Mannella	None	None	None
Norm R. Nielsen	None	None	None
Joyce Galpern Norden	None	None	None
Patricia L. Sawyer	None	None	None
John W. Waechter	None	None	None

Trustee	Dollar Range of Equity Securities in Transamerica Partners Institutional Stock Index	Dollar Range of Equity Securities in Transamerica Institutional Asset Allocation – Intermediate Horizon	Dollar Range of Equity Securities in Transamerica Institutional Asset Allocation – Intermediate/Long Horizon

John K. Carter*	None	None	None
Sandra N. Bane	None	None	None
Leo J. Hill	None	None	None
David W. Jennings	None	None	None
Russell A. Kimball, Jr	None	None	None
Eugene M. Mannella	None	None	None
Norm R. Nielsen	None	None	None
Joyce Galpern Norden	None	None	None
Patricia L. Sawyer	None	None	None
John W. Waechter	None	None	None


Trustee	Dollar Range of Equity Securities in Transamerica Institutional Asset Allocation – Long Horizon	Dollar Range of Equity Securities in Transamerica Institutional Asset Allocation – Short Horizon	Dollar Range of Equity Securities in Transamerica Institutional Asset Allocation – Short/Intermediate Horizon

John K. Carter*	None	None	None
Sandra N. Bane	None	None	None
Leo J. Hill	None	None	None
David W. Jennings	None	None	None
Russell A. Kimball, Jr	$0 - $10,001	None	None
Eugene M. Mannella	None	None	None
Norm R. Nielsen	None	None	None
Joyce Galpern Norden	None	None	None
Patricia L. Sawyer	None	None	None
John W. Waechter	None	None	None


Trustee		Aggregate Dollar Range of Equity Securities in Transamerica Asset Management Group

John K. Carter*		Over $100,000
Sandra N. Bane		None
Leo J. Hill		Over $100,000
David W. Jennings		None
Russell A. Kimball, Jr		None
Eugene M. Mannella		None
Norm R. Nielsen		Over $100,000
Joyce Galpern Norden		None
Patricia L. Sawyer		$10,001 - $50,000
John W. Waechter		Over $100,000


*	Interested person under the 1940 Act by virtue of his position with TAM and its affiliates.

Equity Security Ownership FOR MASTER INVESTMENT PORTFOLIO

The table below shows for each Trustee of the Master Investment Portfolio, the amount of interests in the Master Investment Portfolio beneficially owned by the Trustee, and the aggregate value of all investments in equity securities within the same family of investment companies.

Beneficial Equity Ownership in Master Investment Portfolio and Family of Investment Companies (as of December 31, 2010)

[To be updated]


Interested Trustees		Aggregate Dollar Range of Securities in the Family of Investment Companies

Richard S. David		over $100,000
Henry Gabbay		over $100,000

Independent Trustees		Aggregate Dollar Range of Securities in the Family of Investment Companies

David O. Beim		$0
Ronald W. Forbes		over $100,000
Dr. Matina S. Homer		over $100,000
Rodney D. Johnson		over $100,000
Herbert I. London		between $50,001 - $100,000
Cynthia A. Montgomery		over $100,000


Independent Trustees		Aggregate Dollar Range of Securities in the Family of Investment Companies

Joseph P. Platt, Jr.		over $100,000
Robert C. Robb, Jr.		over $100,000
Toby Rosenblatt		over $100,000
Kenneth L. Urish		between $50,001 - $100,000
Frederick W. Winter		over $100,000

Code of Ethics

The Trusts, Portfolio Trust, TAM, each sub-adviser and TCI each has adopted a code of ethics, as required by applicable law, which is designed to prevent affiliated persons of the Trusts, the Portfolio Trust, TAM, a sub-adviser and TCI from engaging in deceptive, manipulative, or fraudulent activities in connection with securities held or to be acquired by the funds or portfolios (which may also be held by persons subject to a code of ethics). There can be no assurance that the codes of ethics will be effective in preventing such activities.

Principal Holders of Securities

[To be updated]

As of March 31, 2011, the Trustees and officers of the Trusts as a group owned less than 1% of the Shares of each fund.

To the knowledge of Transamerica Partners Funds Group, the following persons owned of record or beneficially 5% or more of a class of outstanding shares of the funds listed as of March 31, 2011:


Fund	Name of Investor	Percentage of Ownership


Fund	Name of Investor	Percentage of Ownership

To the knowledge of Transamerica Partners Funds Group II, the following persons owned of record or beneficially 5% or more of a class of outstanding shares of the funds listed as of March 31, 2011:


Fund	Name of Investor	Percentage of Ownership


Fund	Name of Investor	Percentage of Ownership

Unless otherwise noted, the address of each investor is c/o TAM, 570 Carillon Parkway, St. Petersburg, Florida 33716.

At March 31, 2011, Transamerica Financial Life Insurance Company, Inc. (“TFLIC”), 440 Mamaroneck Avenue, Harrison, New York, NY 10528 and Diversified Investment Advisors Collective Trust (“CIT”), 440 Mamaroneck Avenue, Harrison, New York, NY 10528, owned the following percentage interests of the outstanding beneficial interests of the portfolios indicated (all such interests being held in separate accounts of TFLIC):


	TFLIC	CIT

Balanced
Core Bond
High Quality Bond
High Yield Bond
Inflation-Protected Securities
International Equity
Large Core
Large Growth
Large Value
Mid Growth
Mid Value
Money Market
Small Core
Small Growth
Small Value

As of March 31, 2011, the following persons owned of record or beneficially 5% or more of a class of outstanding interests of the S&P 500 Stock Master Portfolio.


Name and Address of Interestholder	Percentage of S&P 500 Stock Master Portfolio	Nature of Ownership

For purposes of the 1940 Act, any person who owns directly or through one or more controlled companies more than 25% of the voting securities of a company is presumed to “control” such company. Accordingly, to the extent that an interestholder is identified in the foregoing tables as the beneficial holder of more than 25% of a fund or portfolio or as the holder of record of more than 25% of a fund or portfolio and has voting and/or investment powers, such interestholder may be presumed to control the fund or portfolio.

Investment Advisory Services

Investment Advisers

TAM manages the assets of each fund and each portfolio (except the S&P 500 Stock Master Portfolio) pursuant to an Investment Advisory Agreement (a “TAM Advisory Agreement”) with the Transamerica Partners Trust, Transamerica Partners Institutional Trust or Transamerica Partners Portfolios, as the case may be, with respect to each such fund or portfolio, and subject to the investment policies described herein and in the Prospectus for the funds and portfolios, as applicable. Subject to such further policies as the Boards of Trustees of the Trusts and Transamerica Partners Portfolios may determine, TAM provides general investment advice to each such fund and each portfolio.

BlackRock Fund Advisors (“BFA”) manages the assets of the S&P 500 Stock Master Portfolio pursuant to an Investment Advisory Agreement with Master Investment Portfolio (the “BFA Advisory Agreement”). Subject to such further policies as the Boards of Trustees of the Trusts may determine, TAM provides general supervision of the Stock Index Funds’ investment in the S&P 500 Stock Master Portfolio.

BFA provides investment guidance and policy direction in connection with the management of the S&P 500 Stock Master Portfolio’s assets. As of December 31, 2010, BFA and its affiliates provided advisory services for assets in excess of $[ ] trillion.

BFA is a wholly-owned subsidiary of BlackRock Institutional Trust Company, N.A. (“BTC”), which in turn is indirectly wholly-owned by BlackRock, Inc. Prior to December 1, 2009, BTC was known as Barclays Global Investors, N.A. BFA, BTC, BlackRock Execution Services, BlackRock, Inc., and their affiliates deal, trade and invest for their own accounts in the types of securities in which the S&P 500 Stock Master Portfolio invests.

For each portfolio (except the S&P 500 Stock Master Portfolio), TAM or its predecessor has entered into an Investment Subadvisory Agreement (each a “Subadvisory Agreement”) with one or more sub-advisers.

Each TAM Advisory Agreement provides that TAM may render services to others. Each TAM Advisory Agreement may be terminated without penalty by the Board of Trustees or by vote of a majority of the outstanding voting securities of the fund or portfolio on 60 days’ written notice to TAM. Each TAM Advisory Agreement may be terminated by TAM on 90 days’ written notice to the fund or portfolio.

Each TAM Advisory Agreement will immediately terminate in the event of its assignment. Each TAM Advisory Agreement provides that the Adviser shall not be liable for any mistake in judgment or for certain other events, except for willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties under the Advisory Agreement.

Each Subadvisory Agreement may be terminated at any time without the payment of any penalty by the Trustees, or by the vote of a majority of the outstanding voting securities of the portfolio, or by TAM. The sub-adviser may terminate the Agreement only upon giving 90 days’ advance written notice to TAM. Each Subadvisory Agreement will automatically terminate in the event of its assignment. Each Subadvisory Agreement provides that the sub-adviser shall be responsible only for managing the assets of the applicable portfolio in good faith and in accordance with the investment objectives, fundamental policies, and restrictions and shall not be liable for certain other events (each as listed in the applicable Subadvisory Agreement), except in the case of one or more of the following (depending on the provisions of the applicable Subadvisory Agreement): willful misfeasance, bad faith, negligence, gross negligence, breach of fiduciary duty, violation of law, or breach or reckless disregard of its obligations and duties under the Subadvisory Agreement.

The BFA Advisory Agreement is terminable without penalty on 60 days written notice by either party.

TAM is directly owned by Western Reserve Life Assurance Co. of Ohio (77%) (Western Reserve) and AUSA Holding Company (23%) (AUSA), both of which are indirect wholly owned subsidiaries of AEGON N.V. AUSA is wholly owned by AEGON USA LLC (“AEGON USA”), a financial services holding company whose primary emphasis is on life and health insurance, and annuity and investment products. AEGON USA is owned by AEGON US Holding Corporation, which is owned by Transamerica Corporation

(DE). Transamerica Corporation (DE) is owned by The AEGON Trust, which is owned by AEGON International B.V., which is owned by AEGON NV, a Netherlands corporation, and a publicly traded international insurance group.

The funds and portfolios may rely on an Order from the Securities and Exchange Commission (Release IC-23379 dated August 5, 1998) that permits TAM, subject to certain conditions, and without the approval of shareholders to: (1) employ a new unaffiliated sub-adviser for a portfolio pursuant to the terms of a new investment subadvisory agreement, either as a replacement for an existing sub-adviser or as an additional sub-adviser; (2) materially change the terms of any subadvisory agreement; and (3) continue the employment of an existing sub-adviser on subadvisory contract terms where a contract has been assigned because of a change of control of the sub-adviser. In such circumstances, shareholders would receive notice and information about the new sub-adviser within ninety (90) days after the hiring of any new sub-adviser.

Conflicts of Interest

TAM and its affiliates, directors, officers, employees and personnel (collectively, for purposes of this section, “Transamerica”), including the entities and personnel who may be involved in the management, operations or distribution of the Transamerica Partners Funds Group and Transamerica Partners Funds Group II (for purposes of this section, the “Funds”), are engaged in a variety of businesses and have interests other than that of managing the Funds. The broad range of activities and interests of Transamerica gives rise to actual, potential and perceived conflicts of interest that could affect the Funds and their shareholders.

Transamerica manages or advises other funds and products in addition to the Funds (collectively, the “Other Accounts”). In some cases Transamerica oversees sub-advisers who perform the day-to-day management of the Other Accounts, and in other cases Transamerica itself performs the day-to-day management. Certain Other Accounts have investment objectives similar to those of the Funds and/or that engage in transactions in the same types of securities and instruments as the Funds. Such transactions could affect the prices and availability of the securities and instruments in which a Fund invests, and could have an adverse impact on the Fund’s performance. Other Accounts may buy or sell positions while the Funds are undertaking the same or a differing, including potentially opposite, strategy, which could disadvantage the Funds. A position taken by Transamerica, on behalf of one or more Other Accounts, may be contrary to a position taken on behalf of a Fund or may be adverse to a company or issuer in which the Fund has invested.

The results of the investment activities of the Funds may differ significantly from the results achieved for Other Accounts. Transamerica may give advice, and take action, with respect to any current or future Other Accounts that may compete or conflict with advice TAM may give to, or actions TAM may take for, the Funds. Transamerica may receive more compensation with respect to certain Other Accounts than that received with respect to the Funds or may receive compensation based on the performance of certain Other Accounts. Transamerica personnel may have greater economic and other interests in certain Other Accounts promoted or managed by such personnel as compared to the Funds.

Transamerica and other financial service providers have conflicts associated with their promotion of the Funds or other dealings with the Funds that would create incentives for them to promote the Funds. Transamerica may directly or indirectly receive a portion of the fees and commissions charged to the Funds or their shareholders. Transamerica will also benefit from increased amounts of assets under management. This differential in compensation may create a financial incentive on the part of Transamerica to recommend the Funds over other accounts or products or to effect transactions differently in the Funds as compared to other accounts or products. Transamerica has an interest in increasing Fund assets, including in circumstances when that may not be in the Funds’ or their shareholders’ interests.

Transamerica and/or the Fund’s sub-advisers, out of their past profits and other available sources, provide cash payments or non-cash compensation to brokers and other financial intermediaries to promote the distribution of the Funds and Other Accounts or the variable insurance contracts that invest in certain Other Accounts. These arrangements are sometimes referred to as “revenue sharing” arrangements. The amount of revenue sharing payments is substantial and may be substantial to any given recipient. The presence of these payments and the basis on which an intermediary compensates its registered representatives or salespersons may create an incentive for a particular intermediary, registered representative or salesperson to highlight, feature or recommend the Funds or Other Accounts, at least in part, based on the level of compensation paid. Revenue sharing payments benefit Transamerica to the extent the payments result in more assets being invested in the Funds and Other Accounts on which fees are being charged.

Certain Other Accounts are offered as investment options through variable insurance contracts offered and sold by Transamerica insurance companies. TAM also acts as an investment adviser with respect to an asset allocation program offered for use in certain variable insurance contracts issued by Transamerica insurance companies. The performance of the Other Accounts and/or asset allocation models may impact Transamerica’s ability to hedge the risks associated with guarantees that the Transamerica insurance companies provide as issuers of the variable insurance contracts. TAM’s investment decisions may be influenced by these factors. For example, Transamerica may benefit if the Other Accounts or the models are managed or designed in a more conservative fashion to

help reduce potential losses. In addition, certain asset allocation models may include Other Accounts as investment options, and Transamerica will receive more revenue if TAM selects such Other Accounts to be included in the models.

TAM serves as investment adviser to certain funds of funds that invest in affiliated underlying funds, unaffiliated underlying funds, or a combination of both. Certain of the funds of funds are underlying investment options for Transamerica insurance products. TAM and/or the fund of funds’ sub-adviser will receive more revenue when it selects an affiliated fund rather than an unaffiliated fund for inclusion in a fund of funds. This conflict may result in affiliated funds that have performed or are expected to perform worse than unaffiliated funds being included in the fund of funds. The inclusion of affiliated funds will also permit TAM and/or the sub-adviser to make increased revenue sharing payments, including to Transamerica. The affiliates of certain underlying unaffiliated funds also make revenue sharing payments to Transamerica. Those payments may be compensation for the provision of services to investors or may be in furtherance of distribution activities.

TAM may have a financial incentive to propose certain changes to the Funds or Other Accounts. TAM may, from time to time, recommend a change in sub-adviser or a fund combination. Transamerica will benefit to the extent that an affiliated sub-adviser replaces an unaffiliated sub-adviser or additional assets are combined into a Fund or Other Account having a higher advisory fee and/or that is subadvised by an affiliate of TAM. TAM will also benefit to the extent that it recommends replacing a sub-adviser with a new sub-adviser with a lower sub-advisory fee. TAM has a fiduciary duty to act in the best interests of a fund and its shareholders when recommending to the Board the appointment of or continued service of an affiliated sub-adviser for a fund or a fund combination. Moreover, TAM’s “manager of managers” exemptive order from the SEC requires fund shareholder approval of any sub-advisory agreement appointing an affiliated sub-adviser as the sub-adviser to a fund (in the case of a new fund, the initial sole shareholder of the fund, typically an affiliate of Transamerica, may provide this approval).

Sub-Advisers

The sub-advisers make the day-to-day investment decisions for the portfolios (other than the S&P 500 Stock Master Portfolio, which is advised by BFA), subject in all cases to the general supervision of TAM. The sub-advisers (other than the sub-adviser to the Money Market Portfolio) are listed below, along with information they have provided regarding the compensation of certain investment management personnel, other accounts managed by each such person, and each such person’s ownership of securities of the funds that invest in the portfolio with respect to which such person has or shares management responsibility.

Information in the following tables is as of December 31, 2010.

Aronson Johnson Ortiz, LP (“AJO”). AJO was founded in 1984 and became a registered investment adviser on December 11, 1984. AJO is owned and operated by 13 principals, with experience spanning portfolio management, security analysis, trading, consulting, public accounting, compliance, and econometrics.

Theodore R. Aronson, Stefani Cranston, Gina Marie N. Moore, Martha E. Ortiz, R. Brian Wenzinger, and Christopher J. W. Whitehead (the “AJO Team”) are responsible for the day-to-day supervision of the Large Core Portfolio on behalf of AJO.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

AJO Team

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

AJO Team

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

AJO Team

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

AJO Team

Compensation

Each of AJO’s portfolio managers is a principal of the firm. All principals are compensated through a fixed salary, equity-based cash distributions, and merit-based cash bonuses that are awarded entirely for contributions to the firm. Each calendar year-end, the managing principal of AJO, in consultation with the other senior partners, determines the bonus amounts for each portfolio manager. Bonuses can be a significant portion of a portfolio manager’s overall compensation. Bonus amounts are generally based on the following factors: net revenues and cash position of AJO; ownership percentage of the portfolio manager; and overall contributions of the portfolio manager to the operations of AJO. Portfolio managers may also be awarded non-cash compensation in the form of increased ownership in the firm. Although many of the firm’s fee arrangements are performance-based, no individual’s compensation is directly tied to account performance nor to the value of the assets held in particular funds, or even firm-wide assets. Presently AJO has no deferred compensation arrangements.

Conflicts of Interest

It is possible that conflicts of interest may arise in connection with the portfolio managers’ management of the funds on the one hand and other accounts for which the portfolio managers are responsible on the other. For example, portfolio managers may have conflicts of interest in allocating management time, resources, and investment opportunities among the funds and other accounts advised by the portfolio managers. Differences between accounts may lead to additional conflicts — accounts may differ in terms of fee structure (fixed versus performance-based), size (and, hence, absolute fee), restrictions, or investment strategy.

AJO has policies and procedures in place to mitigate potential conflicts of interest. For example, AJO’s fixed-fee schedules are standardized and all fixed-fee accounts of similar size and similar mandate are subject to AJO’s most-favored-nation fee policy. Investment opportunities and aggregated trades are both subject to policies requiring fair treatment across accounts, without regard to account size or fee type. All material conflicts are disclosed in AJO’s Form ADV.

Ownership of Securities

As of December 31, 2010, no member of the AJO Team beneficially owned securities in any of the funds that invest in the Large Core Portfolio and Large Value Portfolio.

BlackRock Financial Management, Inc. (“BlackRock”) BlackRock, a Delaware corporation, is a wholly-owned indirect subsidiary of BlackRock Inc. BlackRock is a registered investment adviser organized in 1994.

Matthew Marra, Eric Pellicciaro and Rick Rieder are responsible for the day-to-day supervision of the Balanced Portfolio on behalf of BlackRock.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Matthew Marra

Eric Pellicciaro

Rick Rieder

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Matthew Marra
Eric Pellicciaro
Rick Rieder

Matthew Marra, Eric Pellicciaro and Rick Rieder are responsible for the day-to-day supervision of the Core Bond Portfolio on behalf of BlackRock.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Matthew Marra

Eric Pellicciaro

Rick Rieder

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Matthew Marra
Eric Pellicciaro
Rick Rieder

Martin Hegarty, Stuart Spodek and Brian Weinstein are responsible for the day-to-day supervision of the Inflation-Protected Securities Portfolio on behalf of BlackRock.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Martin Hegarty

Stuart Spodek

Brian Weinstein

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Martin Hegarty
Stuart Spodek
Brian Weinstein

Portfolio Manager Compensation Overview

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock such as its Long-Term Retention and Incentive Plan and Restricted Stock Program.

Base compensation. Generally, portfolio managers receive base compensation based on their seniority and/or their position with the firm. Senior portfolio managers who perform additional management functions within the portfolio management group or within BlackRock may receive additional compensation for serving in these other capacities.

Discretionary Incentive Compensation

Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s seniority, role within the portfolio management team, teamwork and contribution to the overall performance of these portfolios and BlackRock. In most cases, including for the portfolio managers of the Portfolios, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Portfolios or other accounts managed by the portfolio managers are measured. BlackRock’s Chief Investment Officers determine the benchmarks against which the performance of funds and other accounts managed by each portfolio manager is compared and the period of time over which performance is evaluated. With respect to the portfolio managers, the relevant benchmarks for the Funds include the following:


Portfolio Manager		Benchmarks Applicable to Each Manager

Martin Hegarty		A combination of market-based indices (e.g., Barclays Capital Global Real: U.S. Tips Index), certain customized indices and certain fund industry peer groups.

Matthew Marra		A combination of market-based indices (e.g., Barclays Capital


		Aggregate Index, Barclays Capital Universal Index, Barclays Capital Intermediate Government/Credit Index), certain customized indices and certain fund industry peer groups.

Eric Pellicciaro		A combination of market-based indices (e.g., Barclays Capital U.S. Aggregate Bond Index, custom 50% Barclays Capital Mortgage-Backed Securities Index/50% Merrill Lynch 10-Year Treasury Index, Barclays Capital GNMA MBS Index), certain customized indices and certain fund industry peer groups.

Rick Rieder		A combination of market-based indices (e.g., Barclays Capital U.S. Aggregate Bond Index, Barclays Capital Universal Index, Barclays Capital Intermediate Government/Credit Index), certain customized indices and certain fund industry peer groups.

Stuart Spodek		A combination of market-based indices (e.g., Citigroup 1-Year Treasury Index, BofA Merrill Lynch 1-3 Year US Corporate & Government Index, Barclays Capital Global Real: U.S. Tips Index), certain customized indices and certain fund industry peer groups.

Brian Weinstein		A combination of market-based indices (e.g., Barclays Capital Global Real: U.S. Tips Index), certain customized indices and certain fund industry peer groups.

BlackRock’s Chief Investment Officers make a subjective determination with respect to the portfolio managers’ compensation based on the performance of the funds and other accounts managed by each portfolio manager relative to the various benchmarks noted above. Performance of fixed income funds is measured on both a pre-tax and after-tax basis over various time periods including 1, 3, 5 and 10-year periods, as applicable. Performance of equity funds is measured on a pre-tax basis over various time periods including 1, 3 and 5-year periods, as applicable.

Distribution of Discretionary Incentive Compensation

Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. The BlackRock, Inc. restricted stock units, if properly vested, will be settled in BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods.

Long-Term Retention and Incentive Plan (“LTIP”) — The LTIP is a long-term incentive plan that seeks to reward certain key employees. Prior to 2006, the plan provided for the grant of awards that were expressed as an amount of cash that, if properly vested and subject to the attainment of certain performance goals, will be settled in cash and/or in BlackRock, Inc. common stock. Beginning in 2006, awards are granted under the LTIP in the form of BlackRock, Inc. restricted stock units that, if properly vested and subject to the attainment of certain performance goals, will be settled in BlackRock, Inc. common stock. Messrs. Marra, Spodek and Weinstein have each received awards under the LTIP.

Deferred Compensation Program — A portion of the compensation paid to eligible BlackRock employees may be voluntarily deferred into an account that tracks the performance of certain of the firm’s investment products. Each participant in the deferred compensation program is permitted to allocate his deferred amounts among the various investment options. Messrs. Marra, Spodek and Weinstein have each participated in the deferred compensation program.

Other compensation benefits. In addition to base compensation and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:

Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 6% of eligible pay contributed to the plan capped at $4,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation. The RSP offers a range of investment options, including registered investment companies managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent employee investment direction, are invested into a balanced portfolio. The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares or a dollar value of $25,000. Each portfolio manager is eligible to participate in these plans.

Potential Material Conflicts of Interest

Real, potential or apparent conflicts of interest may arise when a portfolio manager has day-to-day portfolio management responsibilities with respect to more than one fund or account.

BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Portfolios, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Portfolios. In addition, BlackRock, its affiliates and significant shareholders and any officer, director, stockholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Portfolios. BlackRock, or any of its affiliates or significant shareholders, or any officer, director, stockholder, employee or any member of their families may take different actions than those recommended to the Portfolios by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Each portfolio manager also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. In this connection, it should be noted that Messrs. Marra, Spodek and Weinstein currently manage certain accounts that are subject to performance fees. In addition, Messrs. Spodek and Weinstein assist in managing certain hedge funds and may be entitled to receive a portion of any incentive fees earned on such funds and a portion of such incentive fees may be voluntarily or involuntarily deferred. Additional portfolio managers may in the future manage other such accounts or funds and may be entitled to receive incentive fees.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock has adopted a policy that is intended to ensure that investment opportunities are allocated fairly and equitably among client accounts over time. This policy also seeks to achieve reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base.

Ownership of Securities
As of December 31, 2010, Messrs. Marra, Pellicciaro and Rieder did not beneficially own securities in any of the Funds that invest in the Balanced Portfolio. As of December 31, 2010, Messrs. Marra, Pellicciaro and Rieder did not beneficially own securities in any of the Funds that invest in the Core Bond Portfolio. As of December 31, 2010, Mssrs. Hegarty, Spodek and Mr. Weinstein did not beneficially own any securities in any of the Funds that invest in the Inflation-Protected Securities Portfolio.

Columbus Circle Investors (“CCI”). CCI was established in 1975 as in-house managers for Gulf & Western Industries (now part of Viacom, Inc.) and has been a registered investment adviser since 1994.

Clifford Fox, Michael Iacono and Katerina Wasserman are responsible for the day-to-day supervision of the Mid Growth Portfolio on behalf of CCI.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Clifford Fox

Michael Iacono

Katerina Wasserman

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Clifford Fox

Michael Iacono

Katerina Wasserman

Compensation
Columbus Circle Investors seeks to maintain a competitive compensation program based on investment management industry standards to attract and retain investment professionals. Compensation structure is comprised of the following:


	•	Base Salary. Each portfolio manager is paid a fixed base salary, which varies among portfolio managers depending on the experience and responsibilities of the portfolio manager. The firm’s goal is to maintain competitive base salaries through an annual review process, which includes an analysis of industry standards, market conditions, and salary surveys.

	•	Bonus. Each portfolio manager is eligible to receive an annual bonus. Targeted bonus amounts vary among portfolio managers based on the experience level and responsibilities of the portfolio manager. Bonus compensation is based upon the performance of the investment strategy for which the portfolio manager is responsible and the role the portfolio manager plays in that performance. Value to the firm is related to the assets under management that employ the portfolio manager’s strategy as well as the part that success and the portfolio manager personally play in overall firm success. Portfolio managers who are partners receive quarterly bonus compensation based upon overall revenue generated by the products for which they are responsible.

	•	Equity Payments. Portfolio managers who are partners of CCI receive quarterly distributions based upon their equity ownership share and firm profitability. We believe this structure allows us to retain highly qualified portfolio managers, as it provides the opportunity to share directly in the success of the business.

Each portfolio manger is eligible to participate in a competitive benefits package including health and retirement benefits (in the form of a 401(k) plan), which are available to all of Columbus Circle employees.

Conflicts of Interest
CCI’s Code of Ethics includes, among others, the following statements related to conflicts of interest:


	•	Columbus Circle Investors has an affirmative duty of utmost good faith to act solely in the best interests of its Advisory Clients.
	•	Place the interests of our Advisory Clients first. In other words, as a fiduciary you must scrupulously avoid serving your own personal interests ahead of the interests of our Advisory Clients. You may not cause an Advisory Client to take action, or not to take action, for your personal benefit rather than the benefit of the Advisory Client.
	•	You must not take any action in connection with your personal investments that could cause even the appearance of unfairness or impropriety.
	•	Avoid taking inappropriate advantage of your position. The receipt of investment opportunities, gifts or gratuities from persons seeking business with Columbus Circle Investors directly or on behalf of an Advisory Client could call into question the independence of your business judgment.

In addition, our compliance program is designed to address the specific conflicts of interest related to our business, and regularly reviewed, tested and managed accordingly.

Ownership of Securities
As of December 31, 2010, Mr. Fox, Mr. Iacono and Ms. Wasserman did not beneficially own securities in the funds that invest in the Mid Growth Portfolio.

Cramer, Rosenthal, McGlynn, LLC (“CRM”). CRM was founded in 1973 and is minority owned by Wilmington Trust.

Jay B. Abramson and Robert L. Rewey, III are responsible for the day-to-day supervision of the Mid Value Portfolio on behalf of CRM.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Jay B. Abramson

Robert L. Rewey, III

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Jay B. Abramson

Robert L. Rewey, III

Mr. Abramson and Mr. Rewey are generally responsible for multiple accounts with similar investment strategies. For example, the managers of CRM’s mid-cap value investment strategy are responsible for investment decisions for registered investment companies and separately-managed institutional accounts that pursue a mid-cap value investment strategy. Portfolio managers are compensated on portfolio management of the aggregate group of similar accounts rather than for a specific account.

Compensation
The compensation package for these portfolio managers consists of several components: base pay, annual incentive and long-term incentive. The base pay program provides a level of base pay that is competitive with the marketplace and reflects a portfolio manager’s contribution to CRM’s success. A 401(k) plan is also offered with a company matching component.

The annual incentive plan provides cash bonuses dependent on portfolio performance and individual contributions. The most significant portion of the bonus is determined based on the aggregate portfolio pre-tax performance results over one, two and three year periods relative to peer groups and benchmarks, and the remaining portion is based on certain qualitative factors discussed below.

The benchmark used to determine the bonuses of Mr. Abramson and Mr. Rewey is the Russell Midcap® Value Index.

Bonuses vary depending on the scope of accountability and experience level of the individual portfolio manager. An individual’s bonus is based upon relative performance of their assigned portfolios compared to a peer group and benchmark, and is generally geared to rewarding top quartile performance on a trailing three-year basis. Qualitative factors such as leadership, teamwork and overall contribution made during the year are also considered.

The long-term incentive plan provides an opportunity for experienced portfolio managers and other key contributors to CRM to be rewarded in the future depending on the achievement of financial goals and value creation. The plan, which is comprised of a profit-sharing component and option program, was created as a means of more closely aligning the interests of CRM professionals with that of the firm. The size of actual awards varies. The profit-sharing plan is based on the income of the firm. Option awards are comprised of member options in CRM. The value of the stock options is dependent upon CRM’s underlying valuation, as well as the exercise price. Options generally vest over a three-year period.

Conflicts of Interest
As an investment management firm with a diverse group of clients and various types of investment products, the firm and its personnel sometimes have conflicts of interest. You and your family have personal interests that may at times conflict with CRM client interests. We cannot completely eliminate conflicts of interest, but we must handle them properly. Conflicts of interest that are not properly handled may result in violations of law, liability for damages, and harm to our reputation for honest and fair dealing.

Conflicts of interest come in many shapes and sizes, and we can’t predict every type of conflict that may occur. Some conflicts can be handled with specific rules and procedures. Other conflicts must be addressed on a case by case basis using good judgment based upon our fundamental principles outlined below.

CRM expects its employees to be alert to conflicts of interest at all times, especially in any investments that are made in personal accounts, for both the employee and his or her family. Employees must also be sensitive to activities that might appear to others to involve conflicts of interest. There are many steps that an employee can take to reduce the likelihood of conflicts of interest, and CRM expects its employees to take these steps whenever possible.

Fundamental Principles for Addressing Conflicts of Interest

Here are the fundamental principles that CRM expects you to follow when you face a conflict of interest:

We Put Our Clients’ Interests First. Conflicts may arise between the interests of CRM or its personnel, on one hand, and CRM clients on the other hand. We resolve any conflicts between our interests and those of our clients in favor of our clients unless they have clearly agreed to a different approach. This principle is based on our fiduciary duty to our clients, which requires us to consider the best interests of our clients in everything we do.

We Resolve Conflicts Among Our Clients Fairly. There may be conflicts of interest among different CRM clients. For example if we have only a limited supply of an attractive investment, we may have conflicts allocating it among our clients. There may also be conflicts as a result of inconsistent holdings or transactions when we are pursuing different investment strategies for different clients.

We provide each client with the investment products or services to which the client is entitled and do not improperly favor one client over another. This does not mean we make the same investments for all clients or offer the same products or terms to all clients. However, we otherwise treat our clients on an equal footing, except in those cases where they agree or understand that there will be a different approach. In particular, except when otherwise agreed or understood by clients, we may not favor the interests of larger or more lucrative clients over the interests of other clients.

Don’t Try to Handle Conflicts of Interest Alone. It is very risky for you to handle a conflict of interest by yourself. Even if you try to handle it in good faith, you may not be sensitive to all the issues involved and it may appear to others that you were trying to take improper advantage of a client.

You should make sure that your supervisor is aware of any conflicts that arise affecting your work at CRM or your personal affairs. If, for any reason, you are not comfortable raising a conflict of interest with you supervisor, you should raise it with CRM’s General Counsel or a member of the Compliance Committee.

Specific Policies for Addressing Conflicts of Interest

CRM has adopted the following specific policies to help you address some conflicts of interest. You must strictly observe these policies. You must also be alert for conflicts of interest that are not covered by these policies and handle them according to the fundamental principles above.

Code of Ethics. This code governs your personal investing activity and is designed to help you comply with legal restrictions on your personal investments and honor your duties to CRM clients.

Trade Allocation Policy. This policy governs how securities trade and investment opportunities are allocated among different client accounts. It is designed to assure that all clients are treated fairly.

Policy Statement on Insider Trading. This policy aides you in the handling of any material, non-public information of which you may become aware.

Soft Dollar Policy. This policy addresses CRM’s policies in this area and is intended so that CRM’s use of soft dollars is done in compliance with applicable law and in the best interests of our clients and for the benefit of our clients.

Ownership of Securities
As of December 31, 2010, Mr. Abramson beneficially owned between $[ ] and $[ ] in shares of securities in the funds that invest in the Mid Value Portfolio and Mr. Rewey beneficially owned between $[ ] and $[ ] in shares of securities in the funds that invest in the Mid Value Portfolio.

Eaton Vance Management. Eaton Vance Management was organized as a Massachusetts business trust in 1990 and is a wholly owned subsidiary of Eaton Vance Corp.

Linda Carter and Michael W. Weilheimer are responsible for the day-to-day supervision of the High Yield Bond Portfolio on behalf of Eaton Vance Management.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Linda Carter

Michael W. Weilheimer

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Linda Carter

Michael W. Weilheimer

Compensation
Compensation of Eaton Vance Management portfolio managers, including Ms. Carter and Mr. Weilheimer, and other investment professionals has three primary components: (1) a base salary, (2) an annual cash bonus, and (3) annual stock-based compensation consisting of options to purchase non-voting common stock of Eaton Vance Management’s corporate parent, Eaton Vance Corp., and/or restricted shares of Eaton Vance Corp.’s non-voting common stock. Eaton Vance Management investment professionals also receive certain retirement, insurance and other benefits that are broadly available to Eaton Vance Management employees.

Compensation of Eaton Vance’s investment professionals is reviewed primarily on an annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid or put into effect at or shortly after the October 31st fiscal year-end of Eaton Vance Corp.

Eaton Vance Management compensates its portfolio managers based primarily on the scale and complexity of their portfolio responsibilities and the total return performance of managed funds and accounts as opposed to peer groups or benchmarks. In addition to rankings within peer groups of funds on the basis of absolute performance, consideration may also be given to risk-adjusted performance. For funds with an investment objective other than total return (such as current income), consideration will also be given to the fund’s success in achieving its objective. Performance is normally based on periods ending on the September 30th preceding fiscal year-end. Fund performance is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s peer group as determined by Lipper or Morningstar is deemed by Eaton Vance Management’s management not to provide a fair comparison, performance may be evaluated primarily against a custom peer group. In evaluating the performance of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance over longer and shorter periods. Performance is evaluated on a pre-tax basis. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis, based on averages or weighted averages among managed funds and accounts. For funds with an investment objective other than total return (such as current income) consideration is given to the fund’s success in achieving its objective. Funds and accounts that have performance-based advisory fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance. The compensation of portfolio managers with other job responsibilities (such as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of such responsibilities and the managers’ performance in meeting them.

Eaton Vance Management seeks to compensate portfolio managers commensurate with their responsibilities and performance, and competitive with other firms within the investment management industry. The investment adviser participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus and stock-based compensation levels for portfolio managers and other investment professionals.

Salaries, bonuses and stock-based compensation are also influenced by the operating performance of Eaton Vance Management and its parent company. Eaton Vance Management’s overall annual cash bonus pool is based on a substantially fixed percentage of pre-bonus operating income. While the salaries of Eaton Vance Management portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.

Conflicts of Interest
It is possible that conflicts of interest may arise in connection with a portfolio manager’s management of High Yield Bond Portfolio’s investments on the one hand and the investments of other accounts for which the portfolio manager is responsible on the other. For example, a portfolio manager may have conflicts of interest in allocating management time, resources and investment opportunities among High Yield Bond Portfolio and other accounts he or she advises. In addition due to differences in the investment strategies or restrictions between High Yield Bond Portfolio and the other accounts, a portfolio manager may take action with respect to another account that differs from the action taken with respect to the portfolio. In some cases, another account managed by a portfolio manager may compensate the investment adviser based on the performance of the securities held by that account. The existence of such a performance based fee may, create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities. Whenever conflicts of interest arise, the portfolio manager will endeavor to exercise his discretion in a manner that he or she believes is equitable to all interested persons. Eaton Vance Management has adopted several policies and procedures designed to address these potential conflicts including: a code of ethics; and policies which govern Eaton Vance Management’s trading practices, including among other things, the aggregation and allocation of trades among clients, brokerage allocation, cross trades and best execution.

Ownership of Securities
As of December 31, 2010, neither Ms. Carter nor Mr. Weilheimer beneficially owned securities in any of the funds that invest in the High Yield Bond Portfolio.

Fort Washington Advisors, Inc. (“FWIA”). FWIA, an Ohio corporation, was founded in 1990 and is the money management and primary investment arm of The Western and Southern Life Insurance Company.

Richard R. Jandrain III, Daniel J. Kapusta, Bihag N. Patel, CFA and David K. Robinson, CFA, are responsible for the day-to-day management of the Small Core Portfolio on behalf of FWIA.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Richard R. Jandrain, III

Daniel J. Kapusta

Bihag N. Patel

David K. Robinson

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Richard R. Jandrain, III

Daniel J. Kapusta

Bihag N. Patel

David K. Robinson

Compensation
All of FWIA’s portfolio managers receive a fixed base salary and annual performance bonuses. Bonuses are based primarily on the overall performance of FWIA as well as the pre-tax performance (relative to the appropriate benchmark) of their respective asset category over a one-year and a three-year time horizon. Secondarily, portfolio managers are also assessed on their ability to retain clients and attract new clients. Additionally a long-term retention plan was instituted in 2000, whereby certain investment professionals are periodically granted participation units with a 7-year cliff vesting schedule. The structure includes long-term vesting provisions. The percentage of compensation allocated to performance bonuses, asset-increase incentives and long-term incentive compensation is determined annually by the firm’s President and approved by the Board of Directors.

Conflicts of Interest
Actual or potential conflicts of interest may arise when a portfolio manager has management responsibilities to more than one account (including the fund). This would include devotion of unequal time and attention to the management of the accounts, inability to allocate limited investment opportunities across a broad array of accounts and incentive to allocate opportunities for performance based accounts. Fort Washington has adopted policies and procedures to address such conflicts.

Ownership of Securities
As of December 31, 2010, neither Messrs. Jandrain, Kapusta, Patel nor Robinson beneficially owned any securities in any of the funds that invest in the Small Core Portfolio.

Invesco Advisers, Inc. (“Invesco”). Invesco was formed in 1978 and is wholly owned by Invesco Ltd., a publicly-owned company whose shares are listed on the New York Stock Exchange under the symbol “IVZ.” Invesco Ltd. was originally incorporated in December 1935 under the laws of England and Wales.

Ralph Coutant, CFA, Anthony Munchak, CFA, Glen Murphy, CFA, Francis Orlando, CFA and Anthony Shufflebotham, CFA (the “Invesco Team”) are responsible for the day-to-day supervision of the Small Core Portfolio on behalf of Invesco.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Ralph Coutant

Anthony Munchak

Glen Murphy

Francis Orlando

Anthony Shufflebotham

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Ralph Coutant

Anthony Munchak

Glen Murphy

Francis Orlando

Anthony Shufflebotham

Compensation
Invesco seeks to maintain a compensation structure that is competitively positioned to attract and retain high-caliber investment professionals. Our compensation approach closely links rewards to results at every level - focusing our people on the greatest opportunities to move our business forward while building value for client and shareholders.

The compensation and reward structure for investment professionals comprises three elements: base salary, annual incentive awards and long-term incentive awards.


•	Base salary. Each investment professional is paid a base salary. The amount of salary is based upon an individual’s experience and responsibilities, set at an appropriate level as determined by an independent compensation survey of the investment management industry.

•	Annual incentive award. Investment professionals are eligible for an annual incentive award, which may include cash, equity or both. The majority of the award is performance-driven, based on the success of the team’s overall investment and business results, as measured against client and IVZ benchmarks. A portion of the award is discretionary.

•	Long-term equity incentive award. Investment professionals who are critical to Invesco’s future success are eligible for a long-term incentive award. These awards vest after a minimum of three years.

Decisions regarding compensation and rewards are made by local managers within the investment teams. These decisions are reviewed and approved collectively by senior leadership, which has responsibility for executing the compensation approach across the organization.

Investment professionals are also eligible to participate in benefit plans and other programs available to all employees.

Conflicts of Interest
Invesco operates under a Code of Ethics that describes our procedures for identifying and managing conflicts of interest. The primary tools are employee self-reporting and compliance monitoring of duplicate confirmation and statements of access employees received from broker-dealers with whom employees have opened personal brokerage accounts. We provide periodic training to our employees to remind them of their obligations under the Code of Ethics to disclose any outside business activities, contacts with brokerage firms or other third parties, contacts with clients and prospects, and personal securities holdings and transactions. Our compliance staff reviews the reports generated by employees against securities trading on behalf of clients. We also impose limits on the gifts and entertainment our employees can provide to, or receive from, all third parties.

In addition, Invesco has established various policies to address conflicts of interests including, but not limited to, the use of clients’ commission (“soft dollars”) to obtain research and brokerage services, error correction, and allocation of securities. The Compliance Department monitors and reviews compliance with these policies and the Chief Compliance Officer will report any material violations to the Risk Management Committee.

Upon discovering a material violation of the Code, the Compliance Department will notify Invesco’s Chief Compliance Officer (CCO). The CCO will notify the Risk Management Committee of any material violations at the next regularly scheduled meeting.

The Compliance Department will issue a letter of education to the Covered Persons involved in violations of the Code that are determined to be inadvertent or immaterial. Invesco may impose additional sanctions in the event of repeated violations or violations that are determined to be material or not inadvertent, including disgorgement of profits, a letter of censure or suspension, or termination of employment.

Ownership of Securities
As of December 31, 2010, no member of the Invesco Team beneficially owned securities in any of the funds that invest in the Small Core Portfolio.

Jennison Associates LLC (“Jennison”). Jennison has provided investment advisory services since 1969. The principal business address of Jennison is 466 Lexington Avenue, New York, New York 10017.

Blair A. Boyer, Michael A. Del Balso and Spiros “Sig” Segalas, are responsible for the day-to-day management of the Large Growth Portfolio on behalf of Jennison.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Blair A. Boyer

Michael A. Del Balso

Spiros “Sig” Segalas

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Blair A. Boyer

Michael A. Del Balso

Spiros “Sig” Segalas

Compensation
Jennison seeks to maintain a highly competitive compensation program designed to attract and retain outstanding investment professionals which include portfolio managers and research analysts, and to align the interests of its investment professionals with those of its clients and overall firm results. Overall firm profitability determines the total amount of incentive compensation pool that is available for investment professionals. Investment professionals are compensated with a combination of base salary and cash bonus. In general, the cash bonus comprises the majority of the compensation for investment professionals. Additionally, senior investment professionals, including portfolio managers and senior research analysts, are eligible to participate in a deferred compensation program where all or a portion of the cash bonus can be invested in a variety of predominately Jennison managed investment strategies on a tax-deferred basis.

Investment professionals’ total compensation is determined through a subjective process that evaluates numerous qualitative and quantitative factors. There is no particular weighting or formula for considering the factors. Some portfolio managers may manage or contribute ideas to more than one product strategy and are evaluated accordingly. The factors reviewed for the portfolio managers are listed in order of importance.

The following primary quantitative factor is reviewed for the portfolio managers: one and three year pre-tax investment performance of groupings of accounts (a “Composite”) relative to market conditions, pre-determined passive indices, such as the Russell 1000^® Growth Index and industry peer group data for the product strategy (e.g., large cap growth, large cap value) for which the portfolio manager is responsible.

The qualitative factors reviewed for the portfolio managers may include: historical and long-term business potential of the product strategies; qualitative factors such as teamwork and responsiveness; and other individual factors such as experience and other responsibilities such as being a team leader or supervisor may also affect an investment professional’s total compensation.

Conflicts of Interest

In managing other portfolios (including affiliated accounts), certain potential conflicts of interest may arise. Potential conflicts include, for example, conflicts among investment strategies, conflicts in the allocation of investment opportunities, or conflicts due to

different fees. As part of its compliance program, Jennison has adopted policies and procedures that seek to address and minimize the effects of these conflicts.

Jennison’s portfolio managers typically manage multiple accounts. These accounts may include, among others, mutual funds, separately managed advisory accounts (assets managed on behalf of institutions such as pension funds, colleges and universities, foundations), commingled trust accounts, other types of unregistered commingled accounts (including hedge funds), affiliated single client and commingled insurance separate accounts, model nondiscretionary portfolios, and model portfolios used for wrap fee programs. Portfolio managers make investment decisions for each portfolio based on the investment objectives, policies, practices and other relevant investment considerations that the managers believe are applicable to that portfolio. Consequently, portfolio managers may recommend the purchase (or sale) of certain securities for one portfolio and not another portfolio. Securities purchased in one portfolio may perform better than the securities purchased for another portfolio. Similarly, securities sold from one portfolio may result in better performance if the value of that security declines. Generally, however, portfolios in a particular product strategy (e.g., large cap growth equity) with similar objectives are managed similarly. Accordingly, portfolio holdings and industry and sector exposure tend to be similar across a group of accounts in a strategy that have similar objectives, which tends to minimize the potential for conflicts of interest. While these accounts have many similarities, the investment performance of each account will be different primarily due to differences in guidelines, timing of investments, fees, expenses and cash flows.

Furthermore, certain accounts (including affiliated accounts) in certain investment strategies may buy or sell securities while accounts in other strategies may take the same or differing, including potentially opposite, position. For example, certain strategies may short securities that may be held long in other strategies. The strategies that sell a security short held long by another strategy could lower the price for the security held long. Similarly, if a strategy is purchasing a security that is held short in other strategies, the strategies purchasing the security could increase the price of the security held short. Jennison has policies and procedures that seek to mitigate, monitor and manage this conflict.

In addition, Jennison has adopted trade aggregation and allocation procedures that seek to treat all clients (including affiliated accounts) fairly and equitably. These policies and procedures address the allocation of limited investment opportunities, such as IPOs and the allocation of transactions across multiple accounts. Some accounts have higher fees, including performance fees, than others. Fees charged to clients differ depending upon a number of factors including, but not limited to, the particular strategy, the size of the portfolio being managed, the relationship with the client, the service requirements and the asset class involved. Fees may also differ based on the account type (e.g., commingled accounts, trust accounts, insurance company separate accounts or corporate, bank or trust-owned life insurance products). Some accounts, such as hedge funds and alternative strategies, have higher fees, including performance fees, than others. Based on these factors, a client may pay higher fees than another client in the same strategy. Also, clients with larger assets under management generate more revenue for Jennison than smaller accounts. These differences may give rise to a potential conflict that a portfolio manager may favor the higher fee-paying account over the other or allocate more time to the management of one account over another.

Furthermore, if a greater proportion of a portfolio manager’s compensation could be derived from an account or group of accounts, which include hedge fund or alternative strategies, than other accounts under the portfolio manager’s management, there could be an incentive for the portfolio manager to favor the accounts that could have a greater impact on the portfolio manager’s compensation. While Jennison does not monitor the specific amount of time that a portfolio manager spends on a single portfolio, senior Jennison personnel periodically review the performance of Jennison’s portfolio managers as well as periodically assess whether the portfolio manager has adequate resources to effectively manage the accounts assigned to that portfolio manager

Ownership of Securities
As of December 31, 2010, Blair Boyer, Michael Del Balso and Spiros Segalas did not beneficially own any equity securities in the fund.

J.P. Morgan Investment Management Inc. (“JPMorgan”). The principal business address of JPMorgan is 245 Park Avenue, New York, 10167.

Gloria Fu, CFA, Lawrence Playford, CFA and Jonathan K. L. Simon, are responsible for the day-to-day management of the Mid Value on behalf of JPMorgan.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Gloria Fu

Lawrence Playford

Jonathan K. L. Simon

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Gloria Fu

Lawrence Playford

Jonathan K. L. Simon

Scott Blasdell, Terance Chen and Raffaele Zingone are responsible for the day-to-day management of the Balanced Portfolio on behalf of JPMorgan.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Scott Blasdell

Terance Chen

Raffaele Zingone

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Scott Blasdell

Terance Chen

Raffaele Zingone

Compensation

JPMorgan’’s portfolio managers participate in a competitive compensation program that is designed to attract and retain outstanding people and closely link the performance of investment professionals to client investment objectives. The total compensation program includes a base salary fixed from year to year and a variable performance bonus consisting of cash incentives and restricted stock and may include mandatory notional investments (as described below) in selected mutual funds advised by JPMorgan or its affiliates. These elements reflect individual performance and the performance of JPMorgan’s business as a whole.

Each portfolio manager’s performance is formally evaluated annually based on a variety of factors including the aggregate size and blended performance of the portfolios such portfolio manager manages. Individual contribution relative to client goals carries the highest impact. Portfolio manager compensation is primarily driven by meeting or exceeding clients’ risk and return objectives, relative performance to competitors or competitive indices and compliance with firm policies and regulatory requirements. In evaluating each portfolio manager’s performance with respect to the mutual funds he or she manages, the funds’ pre-tax performance is compared to the appropriate market peer group and to each fund’s benchmark index listed in the fund’s prospectus over one, three and five year periods (or such shorter time as the portfolio manager has managed the fund). Investment performance is generally more heavily weighted to the long term.

Awards of restricted stock are granted as part of an employee’s annual performance bonus and comprise from 0% to 35% of a portfolio manager’s total bonus. As the level of incentive compensation increases, the percentage of compensation awarded in restricted stock also increases. Up to 50% of the restricted stock portion of a portfolio manager’s bonus may instead be subject to a mandatory notional investment in selected mutual funds advised by the Adviser or its affiliates. When these awards vest over time, the portfolio manager receives cash equal to the market value of the notional investment in the selected mutual funds.

Conflicts of Interest
The potential for conflicts of interest exists when portfolio managers manage Other Accounts with similar investment objectives and strategies as the funds. Potential conflicts may include, for example, conflicts between investment strategies and conflicts in the allocation of investment opportunities.

Responsibility for managing JPMorgan’s and its affiliates clients’ portfolios is organized according to investment strategies within asset classes. Generally, client portfolios with similar strategies are managed by portfolio managers in the same portfolio management group using the same objectives, approach and philosophy. Underlying sectors or strategy allocations within a larger portfolio are likewise managed by portfolio managers who use the same approach and philosophy as similarly managed portfolios. Therefore,

portfolio holdings, relative position sizes and industry and sector exposures tend to be similar across similar portfolios and strategies, which minimize the potential for conflicts of interest.

JPMorgan and/or its affiliates may receive more compensation with respect to certain Other Accounts than that received with respect to the funds or may receive compensation based in part on the performance of certain Other Accounts. This may create a potential conflict of interest for JPMorgan and its affiliates or its portfolio managers by providing an incentive to favor these Other Accounts when, for example, placing securities transactions. In addition, JPMorgan or its affiliates could be viewed as having a conflict of interest to the extent that JPMorgan or an affiliate has a proprietary investment in Other Accounts, the portfolio managers have personal investments in Other Accounts or the Other Accounts are investment options in JPMorgan’s or its affiliate’s employee benefit plans. Potential conflicts of interest may arise with both the aggregation and allocation of securities transactions and allocation of investment opportunities because of market factors or investment restrictions imposed upon JPMorgan and its affiliates by law, regulation, contract or internal policies. Allocations of aggregated trades, particularly trade orders that were only partially completed due to limited availability and allocation of investment opportunities generally, could raise a potential conflict of interest, as JPMorgan or its affiliates may have an incentive to allocate securities that are expected to increase in value to favored accounts. Initial public offerings, in particular, are frequently of very limited availability. JPMorgan and its affiliates may be perceived as causing accounts they manage to participate in an offering to increase JPMorgan’s or its affiliates’ overall allocation of securities in that offering.

A potential conflict of interest also may be perceived to arise if transactions in one account closely follow related transactions in a different account, such as when a purchase increases the value of securities previously purchased by another account, or when a sale in one account lowers the sale price received in a sale by a second account. If JPMorgan or its affiliates manages accounts that engage in short sales of securities of the type in which the funds invest, JPMorgan or its affiliates could be seen as harming the performance of the funds for the benefit of the accounts engaging in short sales if the short sales cause the market value of the securities to fall.

As an internal policy matter, JPMorgan may from time to time maintain certain overall investment limitations on the securities positions or positions in other financial instruments JPMorgan or its affiliates will take on behalf of its various clients due to, among other things, liquidity concerns and regulatory restrictions. Such policies may preclude an account from purchasing particular securities or financial instruments, even if such securities or financial instruments would otherwise meet the account’s objectives.

The goal of JPMorgan and its affiliates is to meet their fiduciary obligation with respect to all clients. JPMorgan and its affiliates have policies and procedures designed to manage conflicts. JPMorgan and its affiliates monitor a variety of areas, including compliance with fund guidelines, review of allocation decisions and compliance with JPMorgan’s Codes of Ethics and JPMorgan Chase & Co.’s Code of Conduct. With respect to the allocation of investment opportunities, JPMorgan and its affiliates also have certain policies designed to achieve fair and equitable allocation of investment opportunities among its clients over time. For example:

Orders for the same equity security traded through a single trading desk or system are aggregated on a continual basis throughout each trading day consistent with JPMorgan’s and its affiliates duty of best execution for its clients. If aggregated trades are fully executed, accounts participating in the trade will be allocated their pro rata share on an average price basis. Partially completed orders generally will be allocated among the participating accounts on a pro-rata average price basis, subject to certain limited exceptions. For example, accounts that would receive a de minims allocation relative to their size may be excluded from the order. Another exception may occur when thin markets or price volatility require that an aggregated order be completed in multiple executions over several days. If partial completion of the order would result in an uneconomic allocation to an account due to fixed transaction or custody costs, JPMorgan or its affiliates may exclude small orders until 50% of the total order is completed. Then the small orders will be executed. Following this procedure, small orders will lag in the early execution of the order, but will be completed before completion of the total order.

Purchases of money market instruments and fixed income securities cannot always be allocated pro rata across the accounts with the same investment strategy and objective. However, JPMorgan and its affiliates attempt to mitigate any potential unfairness by basing non-pro rata allocations traded through a single trading desk or system upon an objective predetermined criteria for the selection of investments and a disciplined process for allocating securities with similar duration, credit quality and liquidity in the good faith judgment of JPMorgan or its affiliates so that fair and equitable allocation will occur over time.

Ownership of Securities

As of December 31, 2010, the portfolio managers did not beneficially own any equity securities in the funds.

Merganser Capital Management, Inc. (“Merganser”). Merganser was established as a registered investment advisor and a subsidiary of Polaroid Corporation in 1985. Merganser’s founding principals acquired the firm from Polaroid in 1987, and it began operating as an independent entity. In 2000, one of the co-founders retired and sold his interest back to the firm. At the same time, the company was reformed legally from a Subchapter-S corporation to a limited partnership, and several of the company’s senior employees

became partners of Merganser. In October of 2008, Merganser was acquired by Annaly Capital Management Inc. Merganser became a wholly owned subsidiary of Annaly, operating under the name Merganser Capital Management, Inc.

Peter S. Kaplan and Douglas A. Kelly are responsible for the day-to-day supervision of the High Quality Bond Portfolio on behalf of Merganser.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Peter S. Kaplan

Douglas A. Kelly

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Peter S. Kaplan

Douglas A. Kelly


Compensation
The compensation of Mr. Kaplan and Mr. Kelly consists of salary and bonus. Each manager’s salary is determined by his overall job performance and value to Merganser and bonus is based on a formula that is the same for all non-marketing employees of Merganser. This formula is based on salary level and Merganser’s change in revenue from year to year. No portion of either manager’s compensation is based in any way on the assets of the High Quality Bond Portfolio or its performance.

Conflicts of Interest

I.	Personnel Matters
	A.	Code of Conduct
		1.	Conflicts of Interest and Employee Conduct

Policy – Conflicts of Interests and Employee Conduct

Purpose

The Code of Conduct has been established to communicate policies of professional conduct and ethical behavior applicable to all officers, directors and employees (“Employees”) of Merganser Capital Management, Inc. (“Company”).

Background

No set of rules or policies can presume to fully define “professional behavior” or “ethical conduct.” These terms, by definition, are broad concepts and subject to interpretation and personal bias. Nevertheless, a written set of policies will help to minimize misunderstandings about what is considered appropriate conduct by the Company. Also, in matters of personal behavior, there is no substitute for common sense. If there are doubts or questions about the appropriateness of a certain action, either do not pursue this course of action or seek guidance from the Chief Compliance Officer.

Policy:


	1.	Application.
	The Code of Conduct applies to all employees and extends to activities within and outside their duties at Merganser.

	2.	Legal and Ethical Violations.
	Employees shall not knowingly participate in, or assist any acts in violation of any applicable law, rule, or regulation of any government, governmental agency, or regulatory organization governing the investment advisory industry.

	3.	Conflicts of Interest.
	Employees shall not enter into or engage in a security transaction or business activity or relationship, which may result in any financial or other conflict of interest between themselves, clients or Merganser. Employees shall also


	disclose to Merganser all matters that could reasonably be expected to interfere with their duty to Merganser, or with their ability to render unbiased and objective advice.

	4.	Priority of Transactions.
	Employees shall conduct themselves in such a manner that transactions for clients and Merganser have priority over transactions in securities or other investments of which they are beneficial owners, and so that transactions in securities or other investments in which they have such beneficial ownership do not operate adversely to clients’ and Merganser’s interests.

	5.	Use of Material Nonpublic Information.
	Merganser forbids Employees from trading, either personally or on behalf of others (such as private accounts managed by Merganser), on material nonpublic information or communicating material nonpublic information to others in violation of the law. This conduct is frequently referred to as “insider trading.”

	6.	Duty to the Company.
	Employees shall not undertake independent practice, which could result in compensation or other benefit in competition with Merganser unless they have received written consent from both Merganser’s Chief Compliance Officer and the person, or entity for which they undertake independent employment or services.

	7.	Preservation of Confidentiality.
	Employees shall preserve the confidentiality of information communicated by a client concerning matters within the scope of the confidential relationship, unless they receive information concerning illegal activities on the part of the client. Information relating to illegal activities should be communicated as soon as practicable to the Chief Compliance Officer or designee.

	8.	Implementation.
	The Chief Compliance Officer is responsible for the implementation of the Code of Conduct, and reports to the President. He is required to formally meet with the President once a year to review the status of compliance with this policy, but may meet with the President at any time to seek guidance or to discuss matters requiring immediate attention.

	9.	Acknowledgement.
	All Employees must read and acknowledge receipt of a copy of this Code of Conduct. Questions regarding the policy or its implementation should be reviewed with the Chief Compliance Officer or designee.

	2.	Insider Trading

Policy - Insider Trading

Purpose:

The purpose of this Policy is to ensure that Merganser’s employees do not violate the laws governing the use of insider information.

Background:

Merganser’s reputation and the respect of those with whom it deals are among its most important assets.

Policies:


	1.	Employees may not trade securities personally or on behalf of others (such as private accounts managed by Merganser) while in possession of material nonpublic information (trading by an insider).

	2.	Employees may not trade securities personally or on behalf of others (such as private accounts managed by Merganser) where the information was disclosed to them by an insider in violation of the insider’s duty to keep the information confidential or was misappropriated (trading by a non-insider).

	3.	Employees may not communicate material nonpublic information to others in violation of the law.

Procedures - Insider Trading

Purpose:

The purpose of these procedures is to establish what is considered insider information, what Merganser employees may and may not due when in possession of this information, and establish the penalties for “insider trading.”

Definitions and Limitations:

The term “insider trading” is not defined in the federal securities law, but generally is used to refer to the use of material nonpublic information to trade in securities (whether or not one is an “insider”) or to communications of material nonpublic information to others.

Who is considered an “insider?”

The concept of “insider” is broad. It includes officers, directors, and employees of a company. In addition, a person can be a “temporary insider” if he or she enters into a special confidential relationship in the conduct of a company’s affairs and as a result is given access to information solely for the company’s purposes. A temporary insider can include, among others, a company’s attorneys, accountants, consultants, bank lending officers, and the employees of such organizations. In addition, Merganser may become a temporary insider of a company it advises or for which it performs other services. According to the Supreme Court, Merganser must expect the outsider to keep the disclosed nonpublic information confidential and the relationship must at least imply such a duty before the outsider will be considered an insider.

What is Nonpublic Information?

Information is nonpublic until it has been effectively communicated to the market place. One must be able to point to some fact to show that the information is generally public. For example, information found in a report filed with the SEC, or appearing in Dow Jones, Reuters Economic Services, The Wall Street Journal or other publications of general circulation would be considered public.

What is Material Information?

Trading on inside information is not a basis for liability unless the information is material. “Material information” generally is defined as information for which there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions, or information that is reasonably certain to have a substantial effect on the price of a company’s securities. Information that officers, directors, and employees should consider material includes, but is not limited to: dividend changes, earnings estimates, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems, and extraordinary management developments.

Material information does not have to relate to a company’s business. For example, in Carpenter v. U.S., 108 U.S. 316 (1987), the Supreme Court considered as material certain information about the contents of a forthcoming newspaper column that was expected to affect the market price of a security. In that case, a Wall Street Journal reporter was found criminally liable for disclosing to others the dates that reports on various companies would appear in the Journal and whether those reports would be favorable or not.

Procedures:

The following procedures have been established to aid the officers, directors, and employees of Merganser in avoiding insider trading, and to aid Merganser in preventing, detecting and imposing sanctions against insider trading. Every officer, director and employee of Merganser must follow these procedures or risk serious sanctions, including dismissal, substantial personal liability and criminal penalties.


1.	Before trading for yourself or others, including accounts you may manage in a fiduciary capacity, in the securities of a company about which you may have potential inside information, ask yourself the following questions:

		a.	Is the information material?
		b.	Is this information that the investor would consider important in making his or her investment decisions?
		c.	Is this information that would substantially affect the market price of the securities if generally disclosed?


		d.	Is the information nonpublic?
		e.	To whom has this information been provided?
		f.	Has the information been effectively communicated to the marketplace by being published in Reuters, The Wall Street Journal or other publications of general circulation?

2.	If, after the consideration of the above, you believe that the information is material and nonpublic, or if you have questions as to whether the information is material and nonpublic, you should take the following steps:

		a.	Report the matter immediately to the Chief Compliance Officer.
		b.	Do not purchase or sell the securities on behalf of yourself or others, including investment companies or private accounts managed by the Company.
		c.	Do not communicate the information inside or outside the Company, other than to the Chief Compliance Officer.
		d.	After the Chief Compliance Officer has reviewed the information, you will either be instructed to continue the prohibitions against trading and communication or you will be allowed to trade and communicate the information.

3.	Employees who trade on, or communicate to others, may be subjected to severe penalties. Both the employee and Merganser may be penalized severely for “insider” trading. The penalties may include:

		a.	Civil injunctions.
		b.	Treble damages and disgorgement of profits.
		c.	Jail sentences.
		d.	Fines for the person who committed the violation of up to three times the profit gained or loss avoided, whether or not the person actually benefited, and
		e.	Fines for the employer or other controlling person up to the greater of $1,000 or three times the amount of the profit gained or loss avoided.

4.	In addition, any violation of the policy statement can be expected to result in serious sanctions by Merganser, including dismissal of the persons involved.

5.	Employees should restrict access to material nonpublic information including persons within Merganser. In addition care should be taken to ensure such information is secure. For example, files containing material nonpublic information should be sealed; access to computer files containing material nonpublic information should be restricted.

6.	The prevention of insider trading violations requires constant attention. Your suggestions may contribute in a critical way to the effectiveness of these procedures. If you become aware of any situation that may possibly result in an insider trading violation, you should report the situation to the Chief Compliance Officer immediately. Such a situation could involve an indiscreet member of management or the staff, or it could relate to the manner in which written communications of material nonpublic information are disseminated or otherwise handled by employees. Your suggestions for improving these procedures are always welcome and will be considered in your overall job evaluation.

Ownership of Securities

As of December 31, 2010, neither Mr. Kaplan nor Mr. Kelly beneficially owned any securities in any of the funds that invest in the High Quality Bond Portfolio.

Perimeter Capital Partners LLC (“Perimeter”). Perimeter, a registered investment adviser, was founded in 2006.

James N. Behre and Mark D. Garfinkel, CFA, are responsible for the day-to-day supervision of the Small Growth Portfolio on behalf of Perimeter.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

James N. Behre

Mark D. Garfinkel

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

James N. Behre

Mark D. Garfinkel

Compensation

Perimeter offers all employees salaries that are competitive with industry norms. All full-time employees, including portfolio managers, are provided a benefits package on substantially similar terms. Additionally, Perimeter has instituted a bonus pool, which will further compensate investment management employees based on assets under management, performance, client retention, and contribution to the team. Mr. Behre and Mr. Garfinkel earn cash compensation in the form of a base salary, which currently comprises the largest percentage of the portfolio manager’s compensation. Neither the portfolio manager nor any member of the investment team receives direct compensation from the fund or account under management. Every member of the investment team has equity ownership in the firm, and the preponderance of their compensation will be driven by this factor.

Conflicts of Interest

Perimeter expects all employees to adhere to the highest standards with respect to any potential conflicts of interest with clients – simply stated, no Employee should ever enjoy a benefit at the detriment of any client.

Further all persons associated with Perimeter are expected to preserve the confidentiality of information that they may obtain in the course of our business and to use such information properly and not in any way adverse to clients’ interests, subject to the legality of such information.

Perimeter expects all employees to conduct their personal financial affairs in a prudent manner, avoiding any action that could compromise their ability to deal objectively with clients.

Perimeter’s Personal Security Transaction Policy is designed to not only ensure its technical compliance with Rule 204A-1, but also to mitigate any potential material conflicts of interest associated with employees’ personal trading activities. If Perimeter discovers that an employee is personally trading contrary to the policies set forth above, the employee shall meet with the CCO to review the facts surrounding the transactions.

Third-party compliance partner ACA Compliance Group will also conduct testing of employee transactions versus transactions completed on behalf on clients for any conflicts. If any conflicts are found, ACA will bring those to the attention of Perimeter’s CCO.

Ownership of Securities

As of December 31, 2010, neither Mr. Behre nor Mr. Garfinkel beneficially owned securities in any of the funds that invest in the Small Growth Portfolio.

Transamerica Asset Management, Inc. (“TAM”). TAM’s principal office is located at 570 Carillon Parkway, St. Petersburg, Florida 33716.

Christopher A. Staples, CFA and Jonathan Oldroyd, CFA (the “TAM Team”) are responsible for the day-to-day supervision of the Transamerica Asset Allocation Funds.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Christopher A. Staples

Jonathan Oldroyd

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Christopher A. Staples

Jonathan Oldroyd

As of December 31, 2010, each member of the TAM Team did not manage assets for other registered investment, other pooled investment vehicles or other accounts.

Compensation

The portfolio managers are compensated through a fixed salary and cash bonuses that are awarded for contributions to the firm. Generally, annually, the executive officers of TAM, in consultation with the other senior management, determines the bonus amounts for each portfolio manager. Bonuses may be a significant portion of a portfolio manager’s overall compensation. Bonuses are not guaranteed. Presently we have no deferred compensation arrangements.

Conflicts of Interest

TAM has policies and procedures in place to mitigate potential conflicts of interest.

100

Ownership of Securities
As of December 31, 2010, no member of the TAM Team beneficially owned securities in the Transamerica Asset Allocation Funds.

Thornburg Investment Management, Inc. (“Thornburg”). Thornburg is an employee-owned investment management company based in Santa Fe, New Mexico with assets under management of $[ ] billion (as of December 31, 2010). Founded in 1982, the firm manages seven equity funds, nine bond funds, and separate portfolios for select institutions and individuals.

William V. Fries, CFA, Wendy Trevisani and Lei Wang, CFA, (the “Thornburg Team”) are responsible for the day-to-day management of the International Equity Portfolio on behalf of Thornburg.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

William V. Fries

Wendy Trevisani

Lei Wang

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the
performance of the account.)

William V. Fries

Wendy Trevisani

Lei Wang

Compensation
The compensation of each co-portfolio manager includes an annual salary, annual bonus, and company-wide profit sharing. Each manager also owns equity shares in Thornburg. Both the salary and bonus are reviewed approximately annually for comparability with salaries of other portfolio managers in the industry, using survey data obtained from compensation consultants. The annual bonus is subjective. Criteria that are considered in formulating the bonus include, but are not limited to, the following: revenues available to pay compensation of the manager and all other expenses related to supporting the accounts managed by the manager, multiple year historical total return of accounts managed by the manager, relative to market performance and similar investment companies; single year historical total return of accounts managed by the manager, relative to market performance and similar investment companies; the degree of sensitivity of the manager to potential tax liabilities created for account holders in generating returns, relative to overall return. To the extent that the manager realizes benefits from capital appreciation and dividends paid to shareholders of Thornburg, such benefits accrue from the overall financial performance of Thornburg.

Conflicts of Interest

Most investment advisers and their portfolio managers manage investments for multiple clients, including mutual funds, private accounts, and retirement plans. In any case where a portfolio or co-portfolio manager manages the investments of two or more accounts, there is a possibility that conflicts of interest could arise between the manager’s management of a fund’s investments and the manager’s management of other accounts. These conflicts could include:


		– Allocating a favorable investment opportunity to one account but not another.

		– Directing one account to buy a security before purchases through other accounts increase the price of the security in the marketplace.

		– Giving substantially inconsistent investment directions at the same time to similar accounts, so as to benefit one account over another.

		– Obtaining services from brokers conducting trades for one account, which are used to benefit another account.

Thornburg has considered the likelihood that any material conflicts of interest could arise between a manager’s management of the fund’s investments and the manager’s management of other accounts. Thornburg has not identified any such conflicts that may arise, and has concluded that it has implemented policies and procedures to identify and resolve any such conflict if it did arise.

101

Ownership of Securities
As of December 31, 2010, no member of the Thornburg Team beneficially owned securities in International Equity Portfolio.

Wellington Management Company, LLP (“Wellington Management”). Wellington Management is a Massachusetts limited liability partnership with principal offices at 75 State Street, Boston, Massachusetts 02109. Wellington Management is a professional investment counseling firm which provides investment services to investment companies, employee benefit plans, endowments, foundations, and other institutions. Wellington Management and its predecessor organizations have provided investment advisory services for over 70 years. As of December 31, 2009, Wellington Management had investment management authority with respect to approximately $537 billion in assets. The firm-wide asset totals do not include agency mortgage-backed security pass-through accounts managed for the Federal Reserve.

In connection with providing investment advisory services to our clients, Wellington Management has ongoing arrangements to disclose non-public portfolio holdings information to the following parties:

Brown Brothers Harriman & Co. performs certain operational functions for Wellington Management and receives portfolio holdings information on a daily basis.

FactSet Research Systems Inc. provides analytical services for Wellington Management and receives portfolio holdings information on a daily basis.

Glass, Lewis & Co. provides proxy voting services for Wellington Management and receives portfolio holdings information on a daily basis.

Investment Technology Group, Inc. provides analytical services for Wellington Management and receives portfolio holdings information on a daily basis.

State Street Bank and Trust Company performs certain operational functions on behalf of Wellington Management and receives portfolio holdings information on a daily basis.

Timothy J. McCormack, CFA, and Shaun F. Pedersen (each, an “Investment Professional”) are responsible for the day-to-day supervision of the Small Core Portfolio on behalf of Wellington Management.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Timothy J. McCormack

Shaun F. Pedersen

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the
performance of the account.)

Timothy J. McCormack

Shaun F. Pedersen

Paul E. Marrkand, CFA (an “Investment Professional”) is responsible for the day-to-day supervision of the Large Growth Portfolio on behalf of Wellington Management.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Paul E. Marrkand

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the
performance of the account.)

Paul E. Marrkand

102

Timothy J. McCormack, CFA, and Shaun F. Pederson (each, an “Investment Professional”) is responsible for the day-to-day supervision of the Small Value Portfolio on behalf of Wellington Management.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Timothy J. McCormack

Shaun F. Pederson

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the
performance of the account.)

Timothy J. McCormack

Shaun F. Pederson

103

Compensation
Wellington Management receives a fee based on the assets under management of each portfolio as set forth in the Investment Subadvisory Agreements between Wellington Management and Transamerica Asset Management, Inc. on behalf of each portfolio. Wellington Management pays its investment professionals out of its total revenues and other resources, including the advisory fees earned with respect to each portfolio. The following information relates to the fiscal year ended December 31, 2009.

Wellington Management’s compensation structure is designed to attract and retain high-caliber investment professionals necessary to deliver high quality investment management services to its clients. Wellington Management’s compensation of the Investment Professionals includes a base salary and incentive components. The base salaries for Messrs. Marrkand and McCormack, who are partners of Wellington Management, are determined by the Managing Partners of the firm. A partner’s base salary is generally a fixed amount that may change as a result of an annual review. The base salary for Mr. Pedersen is determined by his experience and performance in his role as an Investment Professional. Base salaries for Wellington Management’s employees are reviewed annually and may be adjusted based on the recommendation of an Investment Professional’s manager, using guidelines established by Wellington Management’s Compensation Committee, which has final oversight responsibility for base salaries of employees of the firm.

Each Investment Professional is eligible to receive an incentive payment based on the revenues earned by Wellington Management from the portfolio managed by the Investment Professional and generally each other account managed by such Investment Professional. Each Investment Professional’s incentive payment relating to the relevant portfolio is linked to the gross pre-tax performance of the portion of the portfolio managed by the Investment Professional compared to the benchmark index and/or peer group identified below over one and three year periods, with an emphasis on the three year results. Wellington Management applies similar incentive compensation structures (although the benchmarks or peer groups, time periods and rates may differ) to other accounts managed by the Investment Professionals, including accounts with performance fees.

Portfolio-based incentives across all accounts managed by an investment professional can, and typically do, represent a significant portion of an investment professional’s overall compensation; incentive compensation varies significantly by individual and can vary significantly from year to year. The Investment Professionals may also be eligible for bonus payments based on their overall contribution to Wellington Management’s business operations. Senior management at Wellington Management may reward individuals as it deems appropriate based on factors other than account performance. Each partner of Wellington Management is eligible to participate in a partner-funded tax-qualified retirement plan, the contributions to which are made pursuant to an actuarial formula. Messrs. Marrkand and McCormack are partners of the firm.


Portfolio		Benchmark Index and/or Peer Group for Incentive Period

Large Growth Portfolio		Russell 1000^® Growth Index
Small Core Portfolio		Russell 2000^® Value Index
Small Value Portfolio		Russell 2000^® Value Index

Conflicts of Interest
Individual investment professionals at Wellington Management manage multiple accounts for multiple clients. These accounts may include mutual funds, separate accounts (assets managed on behalf of institutions, such as pension funds, insurance companies, foundations, or separately managed account programs sponsored by financial intermediaries), bank common trust accounts, and hedge funds. Each Investment Professional generally manages accounts in several different investment styles. These accounts may have investment objectives, strategies, time horizons, tax considerations and risk profiles that differ from those of the relevant portfolio. The Investment Professionals make investment decisions for each account, including the relevant portfolio, based on the investment objectives, policies, practices, benchmarks, cash flows, tax and other relevant investment considerations applicable to that account. Consequently, the Investment Professionals may purchase or sell securities, including IPOs, for one account and not another account, and the performance of securities purchased for one account may vary from the performance of securities purchased for other accounts. Alternatively, these accounts may be managed in a similar fashion to the relevant portfolio and thus the accounts may have similar, and in some cases nearly identical, objectives, strategies and/or holdings to that of the relevant portfolio.

An Investment Professional or other investment professionals at Wellington Management may place transactions on behalf of other accounts that are directly or indirectly contrary to investment decisions made on behalf of the relevant portfolio, or make investment decisions that are similar to those made for the relevant portfolio, both of which have the potential to adversely impact the relevant portfolio depending on market conditions. For example, an investment professional may purchase a security in one account while appropriately selling that same security in another account. Similarly, an Investment Professional may purchase the same security for the relevant portfolio and one or more other accounts at or about the same time, and in those instances the other accounts will have access to their respective holdings prior to the public disclosure of the relevant portfolio’s holdings. In addition, some of these accounts have fee structures, including performance fees, which are or have the potential to be higher, in some cases significantly

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higher, than the fees Wellington Management receives for managing the portfolios. Because incentive payments paid by Wellington Management to the Investment Professionals are tied to revenues earned by Wellington Management and, where noted, to the performance achieved by the manager in each account, the incentives associated with any given account may be significantly higher or lower than those associated with other accounts managed by a given Investment Professional. Finally, the Investment Professionals may hold shares or investments in the other pooled investment vehicles and/or other accounts identified above.

Wellington Management’s goal is to meet its fiduciary obligation to treat all clients fairly and provide high quality investment services to all of its clients. Wellington Management has adopted and implemented policies and procedures, including brokerage and trade allocation policies and procedures, which it believes address the conflicts associated with managing multiple accounts for multiple clients. In addition, Wellington Management monitors a variety of areas, including compliance with primary account guidelines, the allocation of IPOs, and compliance with the firm’s Code of Ethics, and places additional investment restrictions on investment professionals who manage hedge funds and certain other accounts. Furthermore, senior investment and business personnel at Wellington Management periodically review the performance of Wellington Management’s investment professionals. Although Wellington Management does not track the time an investment professional spends on a single account, Wellington Management does periodically assess whether an investment professional has adequate time and resources to effectively manage the investment professional’s various client mandates.

Ownership of Securities
As of December 31, 2010, no member of the Wellington Management Team overseeing the Large Growth Portfolio beneficially owned securities in any of the funds that invest in the Large Growth Portfolio. As of December 31, 2010, no member of the Wellington Management Team overseeing the Small Core Portfolio beneficially owned securities in any of the funds that invest in the Small Core Portfolio. [As of December 31, 2010, no member of the Wellington Management Team overseeing the Small Value Portfolio beneficially owned securities in any of the funds that invest in the Small Value Portfolio.]

S&P 500 Stock Master Portfolio

As of December 31, 2010, the individuals named as portfolio managers in the Prospectus were also primarily responsible for the day-to-day management of certain types of other portfolios and/or accounts in addition to the S&P 500 Stock Master Portfolio (the underlying portfolio in which the Investors Stock Index Fund and the Institutional Stock Index Fund invest), as indicated.

Registered Investment
Companies

Other Pooled Investment
Vehicles

Other Accounts

Portfolio Manager

Number

Assets
Managed

Number

Assets
Managed

Number

Assets
Managed

Christopher Bliss

Edward Corallo

Greg Savage

Diane Hsiung

Jennifer Hsui

Fee Based Accounts
(The number of accounts and the total assets in the accounts managed by each portfolio manager with respect to which the advisory fee is based on the performance of the account.)

Christopher Bliss

Edward Corallo

Greg Savage

Diane Hsiung

Jennifer Hsui

Compensation
Like the portfolio, the other portfolios or accounts for which the portfolio managers are primarily responsible for the day-to-day portfolio management generally pay an asset-based fee to BFA or BTC, as applicable, for its advisory services. One or more of those other portfolios or accounts, however, may pay BTC an incentive-based fee in lieu of, or in addition to, an asset-based fee for its advisory services. A portfolio or account with an incentive-based fee would pay BTC a portion of that portfolio’s or account’s gains, or would pay BTC more for its services than would otherwise be the case if BTC meets or exceeds specified performance targets. By their very nature, incentive-based fee arrangements could present an incentive for BTC to devote greater resources, and allocate more investment opportunities, to the portfolios or accounts that have those fee arrangements, relative to other portfolios or accounts, in order to earn larger fees. Although BTC has an obligation to allocate resources and opportunities equitably among portfolios and

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accounts and intends to do so, interestholders of the portfolios should be aware that, as with any group of portfolios and accounts managed by an investment adviser and/or its affiliates pursuant to varying fee arrangements, including incentive-based fee arrangements, there is the potential for a conflict-of-interest, that may result in the portfolio managers’ favoring those portfolios or accounts with incentive-based fee arrangements.

Conflicts of Interest
Certain of the portfolios or accounts for which the portfolio managers are primarily responsible for the day-to-day management seek to track the rate of return, risk profile and other characteristics of independent third-party indexes by either replicating the same combination of securities that compose those indexes or sampling the securities that compose those indexes based on objective criteria and data. The portfolio managers are required to manage each portfolio or account to meet those objectives. Pursuant to BTC and BFA policy, investment opportunities are allocated equitably among the portfolio and other portfolios and accounts. For example, under certain circumstances, an investment opportunity may be restricted due to limited supply on the market, legal constraints or other factors, in which event the investment opportunity will be allocated equitably among those portfolios and accounts, including the portfolio, seeking such investment opportunity. As a consequence, from time to time the portfolio may receive a smaller allocation of an investment opportunity than they would have if the portfolio managers and BGFA and its affiliates did not manage other portfolios or accounts.

Portfolio Manager Compensation Overview. BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, and participation in various benefits programs. In addition, a Portfolio Manager may have been paid a signing bonus or awarded sign-on equity in connection with initiation of employment with BlackRock.

Discretionary Incentive Compensation. Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s seniority, role within the portfolio management team, teamwork and contribution to the overall performance of these portfolios and BlackRock.

Distribution of Discretionary Incentive Compensation. Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. The BlackRock, Inc. restricted stock units, if properly vested, will be settled in BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods.

From time to time long-term incentive equity awards are granted to certain key employees to aid in retention, align their interests with long-term shareholder interests and motivate performance. Equity awards are generally granted in the form of BlackRock, Inc. restricted stock units that, once vested, settle in BlackRock, Inc. common stock.
Material conflicts of interest may arise when the individuals who have sole or shared day-to-day management responsibilities with respect to all or a portion of a portfolio’s securities (“portfolio managers”) also have similar management responsibilities with respect to one or more other funds and/or accounts, as is the case for the portfolio managers listed above. These potential conflicts include:

Limited Time and Attention. The management of multiple funds and/or accounts may result in a portfolio manager’s devoting unequal time and attention to the management of each fund and/or account. As a result, the portfolio manager may not be able to develop as complete a strategy or identify equally attractive investment opportunities for each fund and/or account as might be the case if he or she were to devote substantially more attention to the management of a single fund. The effects of this potential conflict may be more pronounced where funds and/or accounts overseen by a particular portfolio manager have different investment strategies.

Limited Investment Opportunities. If a portfolio manager identifies a limited investment opportunity that may be suitable for multiple funds and/or accounts, that opportunity may be allocated among several funds and/or accounts. This could limit the ability of any single fund to take full advantage of an investment opportunity that might not be limited if the portfolio manager did not provide investment advice to multiple funds and/or accounts. Additionally, a portfolio manager may refrain from rendering advice or services

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concerning securities of companies as to which the portfolio manager or any affiliate, officer, director, or employee of the portfolio manager’s employer or one of its affiliates is a director or officer, or companies as to which any of the foregoing individuals has any substantial economic interest or possesses material non-public information.

Different Investment Strategies. If a portfolio manager determines that an investment opportunity may be appropriate for only some of the funds and/or accounts that he or she manages, or that certain of the funds and/or accounts should take different positions with respect to a particular security, the portfolio manager may place separate transactions for multiple funds and/or accounts. These transactions may affect the market price of the security or the execution of the transaction, or both, to the detriment or benefit of one or more of the funds and/or accounts.

Variation in Compensation. A conflict of interest may arise where the financial or other benefits available to a portfolio manager differ among the funds and/or accounts that he or she manages. If certain funds and/or accounts pay higher management fees or performance-based incentive fees, the portfolio manager might be motivated to favor such funds and/or accounts. The portfolio manager might also be motivated to favor certain funds and/or accounts in which he or she has a greater ownership interest or that are more likely to enhance the portfolio manager’s performance record or otherwise benefit the portfolio manager.

Selection of Brokers-dealers. Portfolio managers may be able to select or influence the selection of the brokers and dealers that are used to execute securities transactions for the funds and/or accounts that they supervise. In addition to executing trades, some brokers and dealers provide portfolio managers with brokerage and research services, which may result in the payment of higher brokerage fees than might have otherwise been available. Although the payment of brokerage commissions is subject to the requirement that the portfolio manager determine in good faith that the commissions are reasonable in relation to the value of the brokerage and research services provided to the fund, a portfolio manager’s decision as to the selection of brokers and dealers could yield disproportionate costs and benefits among the funds and/or accounts that he or she manages, since the research and other services provided by brokers and dealers may be more beneficial to some funds and/or accounts than to others.

TAM, the sub-advisers and the funds have adopted policies and procedures that are designed to address these and other types of conflicts. However, there is no guarantee that such policies and procedures will be able to detect and/or prevent each and every situation in which an actual or potential conflict may arise.

Ownership of Securities
As of December 31, 2010, the portfolio managers did not beneficially own shares of the S&P 500 Stock Master Portfolio.

Advisory Fees

As compensation for services performed, facilities furnished and expenses assumed by TAM, each fund pays TAM a management fee computed daily at an annual rate of the fund’s average daily net assets as described below. Each of the sub-advisers is entitled to receive a fee from TAM at an annual percentage of each fund’s average daily net assets.
For the fiscal years ended December 31, 2008, 2009 and 2010, the Adviser earned and voluntarily waived advisory fees as indicated with respect to the following funds and portfolios:

[To be updated]


	2010		2009				2008

Portfolio/Fund	Earned	Waived	Earned		Waived		Earned		Waived

Balanced			$	657,985	$	73,154	$	1,093,922	$	79,435
Core Bond				5,321,346		428		6,828,373		—
High Quality Bond				1,395,652		—		1,839,044		—
High Yield Bond				2,916,686		107		3,006,017		—
Inflation-Protected Securities				1,281,031		4,245		1,624,043		1,560
International Equity				7,472,534		—		13,803,875		—
Large Core				1,550,023		—		2,754,656		—
Large Growth				6,917,985		1,238		10,928,969		—
Large Value				5,514,739		86		10,367,668		1,478
Mid Growth				1,642,570		18,062		2,347,376		12,761
Mid Value				4,547,468		216		5,666,154		—
Money Market				3,073,964		—		3,029,823		—
Small Core				2,617,102		1,342		5,065,556		16,567

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Small Growth	1,296,080		51,046		1,807,291		52,899
Small Value	1,140,408		38,982		1,715,321		32,928
Stock Index	1,751,798	*	475,936	*	2,348,849	*	579,262	*
Intermediate Horizon	324,810		—		535,646		—
Intermediate/Long Horizon	298,294		—		481,462		—
Long Horizon	186,984		—		302,633		—
Short Horizon	95,952		—		136,190		—
Short/Intermediate Horizon	89,427		—		135,272		—
Institutional Intermediate Horizon	432,814		—		631,168		—
Institutional Intermediate/Long Horizon	344,507		—		496,654		—
Institutional Long Horizon	183,648		—		283,392		—
Institutional Short Horizon	74,622		—		102,833		—
Institutional Short/Intermediate Horizon	75,039		—		98,785		—



*	Includes Administrative Service Fees.

Administrator

The table below shows the total dollar amounts paid to the Administrator during each of the past three fiscal years under the Administrative Services and Transfer Agency Services Agreement with Transamerica Partners Trust for each Transamerica Partners Trust fund listed.

[To be updated]


	Year Ended 12/31/10	Year Ended 12/31/09		Year Ended 12/31/08

Balanced		$	147,409	$	251,519
Core Bond			1,262,277		1,732,718
High Quality Bond			321,608		459,286
High Yield Bond			526,622		586,284
Inflation-Protected Securities			390,954		558,059
International Equity			881,202		1,678,048
Large Core			293,550		547,486
Large Growth			839,822		1,391,475
Large Value			1,065,618		2,084,888
Mid Growth			247,127		394,790
Mid Value			974,311		1,300,913
Money Market			1,351,209		1,320,877
Small Core			315,943		608,914
Small Growth			141,265		212,149
Small Value			129,692		218,923
Stock Index			1,425,383		1,914,932

The table below shows the total dollar amounts paid to the Administrator during each of the past three fiscal years under the Administrative Services and Transfer Agency Services Agreement with Transamerica Partners Institutional Trust for each Transamerica Partners Institutional fund listed.


	Year Ended 12/31/10		Year Ended 12/31/09		Year Ended 12/31/08

Institutional Balanced		$	14,221	$	32,390
Institutional Core Bond			255,244		336,752
Institutional High Quality Bond			59,277		76,248
Institutional High Yield Bond			90,967		85,662
Institutional Inflation-Protected Securities			74,109		90,770
Institutional International Equity			165,964		334,755
Institutional Large Core			12,897		35,014
Institutional Large Growth			201,680		355,186
Institutional Large Value			188,466		404,793

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	Year Ended 12/31/10	Year Ended 12/31/09		Year Ended 12/31/08

Institutional Mid Growth			33,324		46,768
Institutional Mid Value			121,390		139,836
Institutional Money Market			251,023		247,639
Institutional Small Core			29,676		86,454
Institutional Small Growth			25,198		33,666
Institutional Small Value			23,331		34,799
Institutional Stock Index			326,415		433,917

Transamerica Fund Services, Inc. (“TFS”) provides administrative services to the funds under the Administrative Services Agreements with Transamerica Partners Trust and Transamerica Partners Institutional Trust. For these services TFS receives a fee, which is calculated daily and paid monthly, at an annual rate of 0.30% of the average daily net assets of each Transamerica Partners Fund and 0.05% of the average daily net assets of each Transamerica Partners Institutional Fund. TFS acts as Administrator to the Asset Allocation Funds, the Stock Index Fund and the portfolios and receives no additional compensation for providing such administrative services.

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TFS, 570 Carillon Parkway, St. Petersburg, FL 33716, is directly owned by Western Reserve (44%) and AUSA (56%), both of which are indirect, wholly owned subsidiaries of AEGON N.V.; and thus TFS is an affiliate of TAM.

The administrative duties of TFS with respect to each fund include: providing the fund with office space, telephones, office equipment and supplies; paying the compensation of the fund’s officers for services rendered as such; supervising and assisting in preparation of annual and semi-annual reports to shareholders, notices of dividends, capital gain distributions and tax information; supervising compliance by the fund with the recordkeeping requirements under the 1940 Act and regulations thereunder and with the state regulatory requirements; maintaining books and records of the fund (other than those maintained by the fund’s custodian and transfer agent); preparing and filing tax returns and reports; monitoring and supervising relationships with the fund’s custodian and transfer agent; authorizing expenditures and approving bills for payment on behalf of each fund; and providing executive, clerical and secretarial help needed to carry out its duties.

Each such agreement provides that TFS may render services to others as administrator. In addition, each agreement terminates automatically if it is assigned and may be terminated without penalty, in the case of Transamerica Partners Portfolios, by majority vote of the investors in Transamerica Partners Portfolios (with the vote of each being in proportion to its interest) or, in the case of a Trust, by majority vote of such Trust’s shareholders, or by either party on not more than 60 days’ nor less than 30 days’ written notice. Each agreement also provides that neither TFS nor its personnel shall be liable for any error of judgment or mistake of law or for any act or omission in connection with administrative services provided to any fund or portfolio, except for willful misfeasance, bad faith or gross negligence in the performance of its or their duties or by reason of reckless disregard of its or their duties or obligations under said agreements.

BFA is located at 400 Howard Street, San Francisco, CA 94105, serves as the S&P 500 Stock Master Portfolio’s administrator pursuant to an Administration Agreement with the portfolio. Under the Administration Agreement, BFA provides general supervision of the operations of the portfolio, other than the provision of investment advice. The administrative services provided to the portfolio also include coordination of the other services provided to the portfolio, compilation of information for reports to the SEC and state securities commissions, preparation of proxy statements and interest holder reports and general supervision of data compilation in connection with preparing periodic reports to the portfolio’s Board of Trustees and Officers. BFA has delegated certain of its administrative duties to State Street Bank and Trust Company. In addition, BTC has agreed to bear all costs of the portfolio’s operations, except for extraordinary expenses, brokerage and other expenses connected with the execution of portfolio transactions and certain other expenses that are borne by the portfolio such as advisory fees payable to BFA. BTC is not entitled to compensation for providing administration services to the portfolio for so long as BTC is entitled to compensation for providing administration services to a corresponding feeder fund that invests substantially all of its assets in the portfolio, or either BGI or an affiliate receives advisory fees from the portfolio.

Custodian and Transfer Agent

Pursuant to the Transfer Agency Services Agreements with the Trusts, Transamerica Fund Services, Inc. acts as transfer agent for each of the funds (the “Transfer Agent”). The Transfer Agent maintains an account for each shareholder of a fund, performs other transfer agency functions, and acts as dividend disbursing agent for each fund. The funds do not pay any additional compensation to TFS for transfer agency services.

Pursuant to Custodian Agreements, State Street Bank & Trust Company acts as the custodian of each fund’s and portfolio’s assets (the “Custodian”). The Custodian’s responsibilities include safeguarding and controlling the cash and securities of each fund and portfolio, handling the receipt and delivery of securities, determining income and collecting interest on the investments of each fund and portfolio, maintaining books of original entry for portfolio accounting and other required books and accounts, and calculating the daily net asset value of beneficial interests in each fund and portfolio. Securities held by the funds or portfolios may be deposited into the Federal Reserve-Treasury Department Book Entry System or the Depository Trust Company and may be held by a subcustodian bank if such arrangements are reviewed and approved by the Board of Trustees of the applicable Trust or the Portfolio Trusts, as the case may be. The Custodian does not determine the investment policies of the funds or portfolios or decide which securities the funds or portfolios will buy or sell. A fund or portfolio may, however, invest in securities of the Custodian and may deal with the Custodian as principal in securities and foreign exchange transactions. For its services, the Custodian will receive such compensation as may from time to time be agreed upon by it and the Trusts and the Portfolio Trusts.

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Miscellaneous

Additional Expenses of the Funds

In addition to amounts payable as described elsewhere in this SAI, each fund is responsible for its own expenses, including the compensation of Trustees that are not affiliated with TAM, any government fees, taxes, accounting and legal fees, expenses of communicating with shareholders, interest expense and insurance premiums. Each fund is also responsible for its proportionate share of the expenses of the fund’s corresponding portfolio, if any.

Taxation

Taxation of the Funds and Portfolios

Federal Taxation of the Funds. Each fund is treated as a separate entity for federal income tax purposes. Each fund has elected to be treated, and has qualified and intends to continue to qualify each year, as a regulated investment company (a “RIC”) for federal income tax purposes by meeting all applicable requirements of Subchapter M of the Code. In order to qualify as a RIC under Subchapter M of the Code, each fund must, among other things, (i) derive at least 90% of its gross income for each taxable year from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including gains from options, futures and forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and net income derived from an interest in a qualified publicly traded partnership (as defined in Section 851(h) of the Code) (the “90% income test”) and (ii) diversify its holdings so that, at the end of each quarter of each taxable year: (a) at least 50% of the value of the fund’s total assets is represented by (1) cash and cash items, U.S. government securities, securities of other RICs, and (2) other securities, with such other securities limited, in respect of any one issuer, to an amount not greater than 5% of the value of the fund’s total assets and to not more than 10% of the outstanding voting securities of such issuer and (b) not more than 25% of the value of the fund’s total assets is invested in (1) the securities (other than U.S. government securities and securities of other RICs) of any one issuer, (2) the securities (other than securities of other RICs) of two or more issuers that the fund controls and that are engaged in the same, similar, or related trades or businesses, or (3) the securities of one or more qualified publicly traded partnerships.

For purposes of the 90% income test, the character of income earned by certain entities in which a fund invests that are not treated as corporations for U.S. federal income tax purposes (e.g., partnerships other than certain publicly traded partnerships or trusts that have not elected to be classified as corporations under the “check-the-box” regulations) will generally pass through to the fund. Consequently, in order to qualify as a RIC, each fund may be required to limit its equity investments in such entities that earn fee income, rental income or other nonqualifying income.

If a fund qualifies as a RIC and properly distributes to its shareholders each taxable year an amount equal to or exceeding the sum of (i) 90% of its “investment company taxable income” as that term is defined in the Code (which includes, among other things, dividends, taxable interest, and the excess of any net short-term capital gains over net long-term capital losses, as reduced by certain deductible expenses) without regard to the deduction for dividends paid and (ii) 90% of the excess of its gross tax-exempt interest income, if any, over certain disallowed deductions, that fund generally will not be subject to U.S. federal income tax on any income, including “net capital gain” (i.e., the excess of net long-term capital gain over net short-term capital loss), distributed to shareholders. If a fund meets such distribution requirements, but chooses to retain some portion of its taxable income or gains, it generally will be subject to U.S. federal income tax at regular corporate rates on the amount retained. Each fund may designate certain amounts retained as undistributed net capital gain in a notice to its shareholders, who (i) will be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their proportionate shares of the undistributed amount so designated, (ii) will be entitled to credit their proportionate shares of the income tax paid by the fund on that undistributed amount against their federal income tax liabilities and to claim refunds to the extent such credits exceed their liabilities and (iii) will be entitled to increase their tax basis, for federal income tax purposes, in their shares by an amount equal to the excess of the amount of undistributed net capital gain included in their respective income over their respective proportionate shares of the income tax so paid by the fund. Each fund intends to distribute at least annually all or substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction), net tax-exempt interest income, and net capital gain.

For U.S. federal income tax purposes, each fund is permitted to carry forward a net capital loss from any taxable year that began on or before December 22, 2010, to offset its capital gains, if any, for up to eight years following the year of the loss. Each fund is permitted to carry forward a net capital loss from any taxable year that began after December 22, 2010, to offset its capital gains, if any, in years following the year of the loss. To the extent subsequent capital gains are offset by such losses, they will not result in U.S. federal income tax liability to a fund and may not be distributed as such to shareholders. Generally, the funds may not carry forward any losses other than net capital losses. Under certain circumstances, a fund may elect to treat certain losses as though they were incurred on the first day of the taxable year immediately following the taxable year in which they were actually incurred.

If a fund should fail to qualify as a RIC in any year or fail to distribute sufficient amounts of certain income, the fund would incur a regular corporate federal income tax upon its taxable income (thereby reducing the return realized by fund shareholders) and fund distributions would constitute ordinary corporate dividends when issued to shareholders, taxable as appropriate based on the type of

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shareholder. The Asset Allocation Funds, as shareholders of the other funds, would not necessarily incur any income tax liability on such distributions provided they continue to qualify as RICs and distribute substantially all of their net investment income and net capital gains to their shareholders in accordance with the timing requirements imposed by the Code. However, the failure of an underlying fund to maintain its RIC status may adversely affect the ability of any Asset Allocation Fund that invests in that underlying fund to main its RIC status. Under certain circumstances, a fund may be able to cure a failure to qualify as a regulated investment company, but in order to do so, the fund may incur significant fund-level taxes and may be forced to dispose of certain assets.
Under interpretations of the Internal Revenue Service, the Portfolio Trusts believe that for purposes of determining whether a fund qualifies as a RIC under Subchapter M of the Code, any fund that invests in a portfolio will be deemed to own a proportionate share of that portfolio’s assets and will be deemed to be entitled to the portion of that portfolio’s income attributable to that share. The Portfolio Trusts have advised the funds that each portfolio intends to conduct its operations so as to enable investors that invest substantially all of their assets in that portfolio to satisfy the relevant requirements of Subchapter M of the Code.

Withdrawals by a fund from a portfolio generally will not result in such fund recognizing any gain or loss for federal income tax purposes, except that (1) gain will be recognized to the extent that any cash distributed exceeds the adjusted basis of a fund’s interest in the portfolio prior to the distribution, (2) income or gain may be realized if the fund receives a disproportionate distribution of any unrealized receivables held by a portfolio, and (3) loss may be recognized if the distribution is in liquidation of the fund’s entire interest and consists solely of cash, unrealized receivables, or, in certain circumstances, marketable securities. The basis of a fund’s interest in a portfolio generally equals the amount of cash and the basis of any property that the fund invests in the portfolio, increased by the fund’s share of income from that portfolio, decreased by the amount of any cash and the basis of any property distributed to the fund from that portfolio, and further decreased by the fund’s share of losses from that portfolio.

Under the Code, each fund will be subject to a nondeductible 4% U.S. federal excise tax on a portion of its undistributed ordinary income and capital gain net income if it fails to meet certain distribution requirements in accordance with timing requirements imposed by the Code. Each fund intends to make distributions in a timely manner and accordingly does not expect to be subject to the excise tax.

Federal Taxation of the Portfolios. Under interpretations of the Internal Revenue Service, the Portfolio Trusts expect that each portfolio will be treated for federal income tax purposes as a partnership that is not a publicly traded partnership. If a portfolio is treated for tax purposes as a partnership as expected, it will not be subject to federal income taxation. Instead, each fund will take into account, in computing its federal income tax liability, its share of the income, gains, losses, deductions, credits and tax preference items of each portfolio in which it invests, without regard to whether it has received any cash distributions from the portfolio.

Foreign Withholding Taxes. Income received by a fund or portfolio from sources within foreign countries may be subject to withholding and other taxes imposed by such countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the total assets of a fund (held directly or through a portfolio) at the close of any taxable year consist of stock or securities of foreign corporations, that fund may elect to pass through to its shareholders their pro rata shares of qualified foreign taxes paid by the fund for that taxable year. If at least 50% of a fund’s total assets at the close of each quarter of a taxable year consist of interests in other RICs, the fund may make the same election and pass through to its shareholders their pro rata shares of qualified foreign taxes paid by those other RICs and passed through to the fund for that taxble year. If a fund so elects, its shareholders would be required to include the passed-through taxes in their gross incomes (in addition to dividends and distributions), would treat such taxes as foreign taxes paid by them, and may be entitled to a tax deduction for such taxes or a tax credit, subject to a holding period requirement and other limitations under the Code.

The funds (other than the Transamerica Partners International Equity Fund and the Transamerica Partners Institutional International Equity Fund) do not expect to satisfy the requirements for passing through to their shareholders any share of foreign taxes paid by the funds, with the result that shareholders in such funds will not include such taxes in their gross incomes and will not be entitled to a tax deduction or credit for such taxes. It is impossible to determine a fund’s effective rate of foreign tax in advance since the amount of assets to be invested in various countries is not known.

Certain State Taxation. The Trusts are organized as Massachusetts business trusts and, under current law, no Trust or fund is liable for any income or franchise tax in the Commonwealth of Massachusetts, provided that each fund continues to qualify as a RIC for federal income tax purposes. Transamerica Partners Portfolios is organized as a New York trust. Transamerica Partners Portfolios is not subject to any income or franchise tax in the State of New York. The investment by certain funds in a Portfolio does not cause that fund to be liable for any income or franchise tax in the State of New York.

Taxation of Shareholders

Taxation of Distributions. Plans that are generally exempt from federal income taxation and that invest in any fund generally will not be subject to federal income tax liability on either distributions from a fund or redemptions of shares of a fund. Rather, participants are taxed when they take distributions from the underlying Plan in accordance with the rules under the Code governing the taxation of such distributions. Plans that are otherwise generally exempt from federal income taxation might nevertheless be taxed on

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distributions of the fund and any gain realized on redemption of fund shares, where the Plan is subject to the unrelated business taxable income provisions of the Code with respect to its investment in the fund because, e.g., its shares in the fund constitute “debt-financed property” within the meaning of the Code.

Assuming a fund has sufficient earnings and profits, individual and institutional investors, and Plans that for any reason are not exempt from federal income taxation, will be subject to federal income tax on distributions received from the fund whether such distributions are made in cash or reinvested in additional shares. Distributions to such investors of net capital gains (i.e., the excess of net long-term capital gain over net short-term capital loss) will be taxable to such investors as long-term capital gain without regard to the length of time they have held shares in the fund. Distributions of net capital gain to individual and certain other noncorporate shareholders generally will qualify for reduced federal income tax rates (for taxable years beginning on or before December 31, 2012, a maximum rate of 15%). Under current law, the maximum U.S. federal income tax rate on long-term capital gains will be 20% in taxable years beginning after December 31, 2012. In general, dividends from ordinary income and any distributions from net short-term capital gain are taxable to shareholders as ordinary income for federal income tax purposes. To the extent that regular dividends paid to individual and certain other noncorporate shareholders with respect to taxable years beginning on or before December 31, 2012 are derived from qualified dividend income of a fund, such dividends will be treated as qualified dividend income provided that they are reported as qualified dividend income by the fund and provided that the recipient shareholder satisfies certain holding period requirements. Qualified dividend income is, for taxable years beginning on or before December 31, 2012, subject to tax at the reduced rates generally applicable to long-term capital gains for individuals (for taxable years beginning on or before December 31, 2012, at a maximum rate of 15%). If 95% or more of a fund’s gross income, calculated without taking into account net capital gain derived from sales or other dispositions of stock or securities, consists of qualified dividend income, that fund may report all distributions of such income as qualified dividend income. For taxable years beginning after December 31, 2012, dividend income will be taxable at ordinary income tax rates.

Qualified dividend income generally is income derived from dividends from U.S. corporations or from certain “qualified foreign corporations.” A fund must satisfy certain holding period requirements with respect to stock in order to report dividends received with respect to that stock as qualified dividend income. A foreign corporation is treated as a qualified foreign corporation for this purpose if it is incorporated in a U.S. possession or is eligible for benefits under qualifying U.S. tax treaties and meets certain additional requirements. Certain foreign corporations that are not otherwise qualified foreign corporations will be treated as qualified foreign corporations with respect to dividends paid by them if the stock with respect to which the dividends are paid is readily tradable on an established securities market in the United States. “Passive foreign investment companies” are not qualified foreign corporations for this purpose.

Although dividends generally will be treated as distributed when paid, any dividend declared by a fund in October, November or December and payable to shareholders of record in such a month that is paid during the following January will be treated for U.S. federal income tax purposes as received by shareholders on December 31 of the calendar year in which it was declared.

Distributions by a fund in excess of that fund’s current and accumulated earnings and profits will be treated as a return of capital to the extent of (and in reduction of) each taxable shareholder’s tax basis in its shares and any such amount in excess of that basis will be treated as gain from the sale of shares, as discussed below.

Distributions to taxable investors may also be subject to state and local income taxes, although distributions of a fund that are derived from interest on obligations of the U.S. government and certain of its agencies and instrumentalities (but generally not from capital gains realized upon the disposition of such obligations) may be exempt from state and local taxes. Each fund intends to advise shareholders of the extent, if any, to which its distributions consist of such interest.

For taxable years beginning after December 31, 2012, a 3.8% Medicare contribution tax will generally apply to all or a portion of the net investment income of a shareholder who is an individual and not a nonresident alien for federal income tax purposes and who has adjusted gross income (subject to certain adjustments) that exceeds a threshold amount ($250,000 if married filing jointly or if considered a “surviving spouse” for federal income tax purposes, $125,000 if married filing separately, and $200,000 in other cases). This 3.8% tax will also apply to all or a portion of the undistributed net investment income of certain shareholders that are estates and trusts. For these purposes, interest, dividends and certain capital gains will generally be taken into account in computing a shareholder’s net investment income.

Dividends-Received Deduction. Certain dividends received by a fund from U.S. corporations (generally, dividends received by the fund in respect of any share of stock (1) with a tax holding period of at least 46 days during the 91-day period beginning on the date that is 45 days before the date on which the stock becomes ex-dividend as to that dividend and (2) that is held in an unleveraged position) and distributed and appropriately reported by the fund may be eligible for the 70% dividends-received deduction generally available to corporations under the Code. Certain preferred stock must have a holding period of at least 91 days during the 181-day

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period beginning on the date that is 90 days before the date on which the stock becomes ex-dividend as to that dividend in order to be eligible. Capital gain dividends distributed to a fund from other RICs are not eligible for the dividends-received deduction. In order to qualify for the deduction, corporate shareholders must meet the minimum holding period requirement stated above with respect to their fund shares, taking into account any holding period reductions from certain hedging or other transactions or positions that diminish their risk of loss with respect to their fund shares, and, if they borrow to acquire or otherwise incur debt attributable to fund shares, they may be denied a portion of the dividends-received deduction with respect to those shares. The entire dividend, including the otherwise deductible amount, will be included in determining the excess, if any, of a corporation’s adjusted current earnings over its alternative minimum taxable income, which may increase a corporation’s alternative minimum tax liability. Any corporate shareholder should consult its tax adviser regarding the possibility that its tax basis in its shares may be reduced, for U.S. federal income tax purposes, by reason of “extraordinary dividends” received with respect to the shares and, to the extent such basis would be reduced below zero, current recognition of income may be required.

Buying a Dividend. Distributions paid by a fund will reduce the fund’s net asset value per share. Taxable investors who buy shares shortly before a fund makes a distribution may thus pay the full price for the shares and then effectively receive a portion of the purchase price back as a taxable distribution.

Disposition of Shares. Any gain or loss realized by a shareholder subject to federal income tax upon the sale or other disposition of shares of a fund generally will be a capital gain or loss that will be long-term or short-term depending upon the shareholder’s holding period for the shares. Any loss realized on a sale or exchange of a fund’s shares by such a shareholder will be disallowed to the extent the shares disposed of are replaced (even if replaced by shares acquired pursuant to reinvested distributions) within a period of 61 days beginning 30 days before and ending 30 days after the disposition. In such a case, the basis of the shares acquired will be adjusted to reflect the disallowed loss. Any loss realized by a shareholder on a disposition of a fund’s shares held for six months or less will be treated as a long-term capital loss to the extent of any amounts treated as distributions to the shareholder of net long-term capital gain with respect to such shares (including any amounts credited to the shareholder as undistributed capital gains).

Under Treasury regulations, if a shareholder recognizes a loss with respect to fund shares of $2 million or more for an individual shareholder, or $10 million or more for a corporate shareholder, in any single taxable year (or certain greater amounts over a combination of years), the shareholder must file with the IRS a disclosure statement on Form 8886. Shareholders who own portfolio securities directly are in many cases excepted from this reporting requirement but, under current guidance, shareholders of RICs are not excepted. A shareholder who fails to make the required disclosure to the IRS may be subject to substantial penalties. The fact that a loss is reportable under these regulations does not affect the legal determination of whether or not the taxpayer’s treatment of the loss is proper. Shareholders should consult with their tax advisers to determine the applicability of these regulations in light of their individual circumstances.

Asset Allocation Funds. An Asset Allocation Fund will not be able to offset gains distributed by any underlying fund in which it invests against losses incurred by another underlying fund in which it invests because the underlying funds cannot distribute losses. An Asset Allocation Fund’s redemptions of shares in underlying funds, including those resulting from changes in the allocation among underlying funds, could cause the recognition of additional distributable gains to shareholders of the Asset Allocation Fund. A portion of any such gains may be short-term capital gains that would be distributable as ordinary income to shareholders of the Asset Allocation Fund. Further, certain losses on redemptions of shares in the underlying funds may be deferred under the wash sale rules. Any loss realized by an Asset Allocation Fund on a disposition of an underlying fund’s shares held for six months or less will be treated as a long-term capital loss to the extent of any amounts treated as distributions to the Asset Allocation Fund of net long-term capital gain with respect to such shares (including any amounts credited to the Asset Allocation Fund as undistributed capital gains). Short-term capital gains earned by an underlying fund will be treated as ordinary dividends when distributed to an Asset Allocation Fund and therefore may not be offset by any short-term capital losses incurred by the Asset Allocation Fund. Thus, an Asset Allocation Fund’s short-term capital losses may offset its long-term capital gains, which might otherwise be eligible for the reduced U.S. federal income tax rates for individual and certain other noncorporate shareholders, as discussed above. As a result of these factors, the use of the fund-of-funds structure by the Asset Allocation Funds could adversely affect the amount, timing and character of distributions to Asset Allocation Fund shareholders.

Special Considerations for Non-U.S. Persons. Dividends and certain other payments (but not distributions of net capital gains) to persons who are not citizens or residents of the United States or U.S. entities (“Non-U.S. Persons”) are generally subject to U.S. tax withholding at the rate of 30%. Each fund intends to withhold U.S. federal income tax at the rate of 30% on taxable distributions and other payments to Non-U.S. Persons that are subject to withholding, regardless of whether a lower rate may be permitted under an applicable treaty. For fund taxable years beginning on or before December 31, 2011, the 30% withholding tax does not apply to dividends that a fund reports as (a) interest-related dividends, to the extent such dividends are derived from the fund’s “qualified net interest income,” or (b) short-term capital gain dividends, to the extent such dividends are derived from the fund’s “qualified short-term gain.” Qualified net interest income is a fund’s net income derived from U.S.-source interest and original issue discount, subject

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to certain exceptions and limitations. Qualified short-term gain generally means the excess of the net short-term capital gain of a fund for the taxable year over its net long-term capital loss, if any. Any amounts overwithheld may be recovered by such Non-U.S. Persons by filing a claim for refund with the U.S. Internal Revenue Service within the time period appropriate to such claims. Distributions received from a fund by Non-U.S. Persons may also be subject to tax under the laws of their own jurisdictions.

Unless certain non-U.S. entities that hold fund shares comply with IRS requirements that will generally require them to report information regarding U.S. persons investing in, or holding accounts with, such entities, a 30% withholding tax will apply to fund distributions and redemptions payable to such entities after December 31, 2012.

Backup Withholding. Each fund is also required in certain circumstances to apply backup withholding on taxable distributions and redemption proceeds paid to any shareholder (including a Non-U.S. Person) who does not furnish to the fund certain information and certifications or who is otherwise subject to backup withholding. The backup withholding rate is currently 28% and is scheduled to increase to 31% in 2013. Backup withholding will not be applied to payments that have been subject to the withholding applicable to Non-U.S. Persons.

Effects of Certain Investments and Investment Policies

A fund’s dividend and accounting policies will affect the amount, timing, and character of distributions to shareholders, and may, under certain circumstances, make an economic return of capital taxable to shareholders otherwise subject to taxation.

Certain Debt Instruments. Any investment in zero coupon securities, deferred interest bonds, payment-in-kind bonds, certain stripped securities, and certain securities purchased at a market discount may cause a fund to recognize income prior to the receipt of cash payments with respect to those securities. In order to distribute this income and avoid a tax on the fund, a portfolio may liquidate portfolio securities that it might otherwise have continued to hold, potentially resulting in additional taxable gain or loss to the fund.

Certain funds may invest in or hold debt obligations of issuers not currently paying interest or that are in default. Investments in debt obligations that are at risk of or in default present special tax issues for the funds. Federal income tax rules are not entirely clear about issues such as when a fund may cease to accrue interest, original issue discount or market discount, when and to what extent deductions may be taken for bad debts or worthless securities, how payments received on obligations in default should be allocated between principal and interest, and whether certain exchanges of debt obligations in a workout context are taxable. These and other issues will be addressed by a fund, in the event it invests in or holds such securities, in order to seek to ensure that it distributes sufficient income to preserve its status as a RIC and does not become subject to U.S. federal income or excise tax.

Options, Etc. A fund’s transactions in options, futures contracts, forward contracts and short sales “against the box” will be subject to special tax rules that may affect the amount, timing and character of fund income and distributions to shareholders. For example, certain positions held by a fund on the last business day of each taxable year will be marked to market (i.e., treated as if closed out) on that day, and any gain or loss associated with the positions will be treated as 60% long-term and 40% short-term capital gain or loss. Certain positions held by a fund that substantially diminish its risk of loss with respect to other positions in its portfolio may constitute “straddles,” and may be subject to special tax rules that would cause deferral of fund losses, adjustments in the holding periods of fund securities, and conversion of short-term into long-term capital losses. Certain tax elections exist for straddles that may alter the effects of these rules. The fund will limit its activities in options, futures contracts, and forward contracts to the extent necessary to meet the relevant requirements of Subchapter M of the Code. As a result, however, a portfolio may defer the closing out of certain options and futures contracts beyond the time when it otherwise would be advantageous to do so.

Foreign Investments. Special tax considerations apply with respect to foreign investments of a fund. Foreign exchange gains and losses realized by the fund will generally be treated as ordinary income and loss. The holding of foreign currencies for nonhedging purposes and the investment by a fund in certain “passive foreign investment companies” may have to be limited in order to avoid tax at the fund level. A fund may elect to mark to market any investments in passive foreign investment companies on the last day of each year. This election may cause the fund to recognize income prior to the receipt of cash payments with respect to those investments. In order to distribute this income and avoid U.S. federal income and excise tax on a fund, a portfolio may liquidate portfolio securities that it might otherwise have continued to hold, potentially resulting in additional taxable gain or loss to the fund.

The foregoing should not be viewed as a comprehensive discussion of the items referred to nor as covering all provisions relevant to investors. Shareholders are advised to consult their own tax advisers with respect to the particular tax consequences to them of an investment in a fund.

Distribution Plans

Transamerica Partners Trust has adopted a separate Distribution Plan with respect to each of the Transamerica Partners Money Market, Bond, Balanced and Stock Funds in accordance with Rule 12b-1 under the 1940 Act after having concluded that there is a

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reasonable likelihood that each Distribution Plan will benefit the Transamerica Partners Trust, the shares of each fund covered by that Distribution Plan, and the holders of shares. Similarly, the Transamerica Partners Institutional Trust has adopted a Distribution Plan with respect to the Institutional Money Market, Bond, Balanced and Stock Funds in accordance with Rule 12b-1 under the 1940 Act after having concluded that there is a reasonable likelihood that the Distribution Plan will benefit the Transamerica Partners Institutional Trust, the shares of each fund covered by that Distribution Plan and the holder of shares. Under these plans, the funds pay monthly fees at an annual rate of 0.25% of the fund’s average daily net assets. Fees paid under the plans may be used by the Distributor to pay for its services or for advertising, marketing or other promotional activities. In addition, the Distributor or an affiliate may make payments for distribution and/or shareholder servicing activities out of its past profits and other available sources. TAM or an affiliate or a sub-adviser or an affiliate may make similar types of payments under similar arrangements.

Each fund’s 12b-1 Plan permits the fund to pay fees to the Transamerica Capital, Inc. (the “Distributor”) and others as compensation for their services, not as reimbursement for specific expenses incurred. Thus, even if their expenses exceed the fees provided for by the 12b-1 Plan, the fund would not be obligated to pay more than those fees and, if their expenses are less than the fees paid to them, they will realize a profit. Under each 12b-1 Plan, a fund may pay the fees to the Distributor and others until the 12b-1 Plan is terminated or not renewed.

Each Distribution Plan will continue in effect if such continuance is specifically approved at least annually by a vote of both a majority of each Trust’s Trustees and a majority of each Trust’s Trustees who are not “interested persons” of the Trust and who have no direct or indirect financial interest in the operation of the Distribution Plan or in any agreement related to such Plan (“Qualified Trustees”). Each Distribution Plan requires that at least quarterly each Trust and the Distributor shall provide to the Boards of Trustees and the Boards of Trustees shall review a written report of the amounts expended (and the purposes therefor) under the Distribution Plan. Each Distribution Plan further provides that the selection and nomination of the Trust’s disinterested Trustees shall be committed to the discretion of the Trust’s disinterested Trustees then in office. Each Distribution Plan may be terminated at any time by a vote of a majority of the Trust’s Qualified Trustees or by vote of a majority of the outstanding voting securities of the applicable fund. Each Distribution Plan may not be amended to increase materially the amount of permitted expenses thereunder without the approval of a majority of the outstanding voting securities of the applicable fund and may not be materially amended in any case without a vote of the majority of both the Trustees and the Qualified Trustees. The Distributor will preserve copies of any plan, agreement or report made pursuant to each Distribution Plan for a period of not less than six years from the date of such plan, agreement, or report, and for the first two years the Distributor will preserve such copies in an easily accessible place.

As contemplated by each Distribution Plan, Transamerica Capital, Inc. (“TCI”) acts as the agent of each of the Money Market, Bond, Balanced and Stock Funds in connection with the offering of shares of such funds pursuant to a separate Distribution Agreement (the “Distribution Agreement”) effective as of November 1, 2007. After the Prospectuses and periodic reports have been prepared, set in type and mailed to existing shareholders, the Distributor pays for the printing and distribution of copies of the Prospectuses and periodic reports which are used in connection with the offering of shares of such funds to prospective investors. Each Prospectus contains a description of fees payable to the Distributor under the Distribution Agreement with respect to the shares offered pursuant to that Prospectus.
The table below shows the total dollar amounts paid to the Distributor during each of the last three fiscal years under the Distribution Plan with respect to the Transamerica Partners Money Market, Bond, Balanced and Stock Funds.

[To be updated]


	Year Ended 12/31/10	Year Ended 12/31/09		Year Ended 12/31/08

Balanced		$	88,065	$	198,959
Core Bond			1,051,707		1,443,932
High Quality Bond			267,969		382,738
High Yield Bond			297,993		346,422
Inflation-Protected Securities			316,558		464,621
International Equity			695,573		1,308,175
Large Core			160,118		298,344
Large Growth			716,678		1,159,562
Large Value			645,414		1,373,424
Mid Growth			185,387		327,268
Mid Value			705,995		983,010
Money Market			862,442		875,706
Small Core			262,654		507,428
Small Growth			115,842		176,742
Small Value			102,439		182,436
Stock Index			869,832		1,222,464

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The table below shows total distribution and service fees and expenses for the Transamerica Partners Money Market, Bond, Balanced and Stock Funds for the fiscal year ended December 31, 2010:


	Transamerica Partners Balanced	Transamerica Partners Core Bond	Transamerica Partners High Quality Bond

Distribution Expenses^(a)
Commissions to Brokers/Agents	$[ ]	$[ ]	$[ ]

Sales & Marketing^(b)
Broker/Dealer Operations and Overhead	$[ ]	$[ ]	$[ ]
Market Research and Public Relations	$[ ]	$[ ]	$[ ]
Enrollments (Seminars, Kits, Etc.)	$[ ]	$[ ]	$[ ]
Marketing Materials	$[ ]	$[ ]	$[ ]
Client Relations	$[ ]	$[ ]	$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)	$[ ]	$[ ]	$[ ]
IRA and Other Asset Retention	$[ ]	$[ ]	$[ ]
Total Sales & Marketing	$[ ]	$[ ]	$[ ]


	Transamerica Partners High Yield Bond	Transamerica Partners Inflation-Protected Securities	Transamerica Partners International Equity

Distribution Expenses^(a)
Commissions to Brokers/Agents	$[ ]	$[ ]	$[ ]

Sales & Marketing^(b)
Broker/Dealer Operations and Overhead	$[ ]	$[ ]	$[ ]
Market Research and Public Relations	$[ ]	$[ ]	$[ ]
Enrollments (Seminars, Kits, Etc.)	$[ ]	$[ ]	$[ ]
Marketing Materials	$[ ]	$[ ]	$[ ]
Client Relations	$[ ]	$[ ]	$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)	$[ ]	$[ ]	$[ ]
IRA and Other Asset Retention	$[ ]	$[ ]	$[ ]
Total Sales & Marketing	$[ ]	$[ ]	$[ ]

117


	Transamerica Partners Large Core	Transamerica Partners Large Growth	Transamerica Partners Large Value

Distribution Expenses^(a)
Commissions to Brokers/Agents	$[ ]	$[ ]	$[ ]

Sales & Marketing^(b)
Broker/Dealer Operations and Overhead	$[ ]	$[ ]	$[ ]
Market Research and Public Relations	$[ ]	$[ ]	$[ ]
Enrollments (Seminars, Kits, Etc.)	$[ ]	$[ ]	$[ ]
Marketing Materials	$[ ]	$[ ]	$[ ]
Client Relations	$[ ]	$[ ]	$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)	$[ ]	$[ ]	$[ ]
IRA and Other Asset Retention	$[ ]	$[ ]	$[ ]
Total Sales & Marketing	$[ ]	$[ ]	$[ ]

118


	Transamerica Partners Mid Growth	Transamerica Partners Mid Value	Transamerica Partners Money Market

Distribution Expenses^(a)
Commissions to Brokers/Agents	$[ ]	$[ ]	$[ ]

Sales & Marketing^(b)
Broker/Dealer Operations and Overhead	$[ ]	$[ ]	$[ ]
Market Research and Public Relations	$[ ]	$[ ]	$[ ]
Enrollments (Seminars, Kits, Etc.)	$[ ]	$[ ]	$[ ]
Marketing Materials	$[ ]	$[ ]	$[ ]
Client Relations	$[ ]	$[ ]	$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)	$[ ]	$[ ]	$[ ]
IRA and Other Asset Retention	$[ ]	$[ ]	$[ ]
Total Sales & Marketing	$[ ]	$[ ]	$[ ]


	Transamerica Partners Small Core	Transamerica Partners Small Growth	Transamerica Partners Small Value

Distribution Expenses^(a)
Commissions to Brokers/Agents	$[ ]	$[ ]	$[ ]

Sales & Marketing^(b)
Broker/Dealer Operations and Overhead	$[ ]	$[ ]	$[ ]
Market Research and Public Relations	$[ ]	$[ ]	$[ ]
Enrollments (Seminars, Kits, Etc.)	$[ ]	$[ ]	$[ ]
Marketing Materials	$[ ]	$[ ]	$[ ]
Client Relations	$[ ]	$[ ]	$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)	$[ ]	$[ ]	$[ ]
IRA and Other Asset Retention	$[ ]	$[ ]	$[ ]
Total Sales & Marketing	$[ ]	$[ ]	$[ ]

119


		Transamerica Partners Stock Index

Distribution Expenses^(a)
Commissions to Brokers/Agents		$[ ]

Sales & Marketing^(b)
Broker/Dealer Operations and Overhead		$[ ]
Market Research and Public Relations		$[ ]
Enrollments (Seminars, Kits, Etc.)		$[ ]
Marketing Materials		$[ ]
Client Relations		$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)		$[ ]
IRA and Other Asset Retention		$[ ]
Total Sales & Marketing		$[ ]

The table below shows the total dollar amounts paid to the Distributor during the last three fiscal years under the Distribution Plan with respect to the Transamerica Partners Institutional Money Market, Bond, Balanced and Stock Funds.


	Year Ended 12/31/10	Year Ended 12/31/09		Year Ended 12/31/08

Institutional Balanced		$	2,265	$	71,506
Institutional Core Bond			885,788		1,324,364
Institutional High Quality Bond			170,413		257,930
Institutional High Yield Bond			277,332		288,657
Institutional Inflation-Protected Securities			203,556		305,459
Institutional International Equity			712,149		1,549,950
Institutional Large Core			8,491		76,364
Institutional Large Growth			637,840		1,278,939
Institutional Large Value			629,078		1,568,326
Institutional Mid Growth Fund			29,003		74,598
Institutional Mid Value Fund			233,630		318,159
Institutional Money Market			644,513		725,339
Institutional Small Core			45,111		268,119
Institutional Small Growth			43,000		77,844
Institutional Small Value			39,826		81,757
Institutional Stock Index			992,442		1,515,506

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The table below shows total distribution and service fees and expenses for the Transamerica Partners Institutional Money Market, Bond, Balanced and Stock Funds for the fiscal year ended December 31, 2010:


	Transamerica Partners Institutional Balanced	Transamerica Partners Institutional Core Bond	Transamerica Partners Institutional High Quality Bond

Distribution Expenses^(a)
Commissions to Brokers/Agents	$[ ]	$[ ]	$[ ]

Sales & Marketing^(b)	$[ ]	$[ ]	$[ ]
Broker/Dealer Operations and Overhead	$[ ]	$[ ]	$[ ]
Market Research and Public Relations	$[ ]	$[ ]	$[ ]
Enrollments (Seminars, Kits, Etc.)	$[ ]	$[ ]	$[ ]
Marketing Materials	$[ ]	$[ ]	$[ ]
Client Relations	$[ ]	$[ ]	$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)	$[ ]	$[ ]	$[ ]
IRA and Other Asset Retention	$[ ]	$[ ]	$[ ]
Total Sales & Marketing	$[ ]	$[ ]	$[ ]


	Transamerica Partners Institutional High Yield Bond	Transamerica Partners Institutional Inflation- Protected Securities	Transamerica Partners Institutional International Equity

Distribution Expenses^(a)
Commissions to Brokers/Agents	$[ ]	$[ ]	$[ ]

Sales & Marketing^(b)
Broker/Dealer Operations and Overhead	$[ ]	$[ ]	$[ ]
Market Research and Public Relations	$[ ]	$[ ]	$[ ]
Enrollments (Seminars, Kits, Etc.)	$[ ]	$[ ]	$[ ]
Marketing Materials	$[ ]	$[ ]	$[ ]
Client Relations	$[ ]	$[ ]	$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)	$[ ]	$[ ]	$[ ]
IRA and Other Asset Retention	$[ ]	$[ ]	$[ ]
Total Sales & Marketing	$[ ]	$[ ]	$[ ]

121


	Transamerica Partners Institutional Large Core	Transamerica Partners Institutional Large Growth	Transamerica Partners Institutional Large Value

Distribution Expenses^(a)
Commissions to Brokers/Agents	$[ ]	$[ ]	$[ ]

Sales & Marketing^(b)
Broker/Dealer Operations and Overhead	$[ ]	$[ ]	$[ ]
Market Research and Public Relations	$[ ]	$[ ]	$[ ]
Enrollments (Seminars, Kits, Etc.)	$[ ]	$[ ]	$[ ]
Marketing Materials	$[ ]	$[ ]	$[ ]
Client Relations	$[ ]	$[ ]	$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)	$[ ]	$[ ]	$[ ]
IRA and Other Asset Retention	$[ ]	$[ ]	$[ ]
Total Sales & Marketing	$[ ]	$[ ]	$[ ]


	Transamerica Partners Institutional Mid Growth	Transamerica Partners Institutional Mid Value	Transamerica Partners Institutional Money Market

Distribution Expenses^(a)
Commissions to Brokers/Agents	$[ ]	$[ ]	$[ ]

Sales & Marketing^(b)	$[ ]	$[ ]	$[ ]
Broker/Dealer Operations and Overhead	$[ ]	$[ ]	$[ ]
Market Research and Public Relations	$[ ]	$[ ]	$[ ]
Enrollments (Seminars, Kits, Etc.)	$[ ]	$[ ]	$[ ]
Marketing Materials	$[ ]	$[ ]	$[ ]
Client Relations	$[ ]	$[ ]	$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)	$[ ]	$[ ]	$[ ]
IRA and Other Asset Retention	$[ ]	$[ ]	$[ ]
Total Sales & Marketing	$[ ]	$[ ]	$[ ]

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	Transamerica Partners Institutional Small Core	Transamerica Partners Institutional Small Growth	Transamerica Partners Institutional Small Value

Distribution Expenses^(a)
Commissions to Brokers/Agents	$[ ]	$[ ]	$[ ]

Sales & Marketing^(b)
Broker/Dealer Operations and Overhead	$[ ]	$[ ]	$[ ]
Market Research and Public Relations	$[ ]	$[ ]	$[ ]
Enrollments (Seminars, Kits, Etc.)	$[ ]	$[ ]	$[ ]
Marketing Materials	$[ ]	$[ ]	$[ ]
Client Relations	$[ ]	$[ ]	$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)	$[ ]	$[ ]	$[ ]
IRA and Other Asset Retention	$[ ]	$[ ]	$[ ]
Total Sales & Marketing	$[ ]	$[ ]	$[ ]


		Transamerica Partners Institutional Stock Index

Distribution Expenses^(a)
Commissions to Brokers/Agents		$[ ]

Sales & Marketing^(b)
Broker/Dealer Operations and Overhead		$[ ]
Market Research and Public Relations		$[ ]
Enrollments (Seminars, Kits, Etc.)		$[ ]
Marketing Materials		$[ ]
Client Relations		$[ ]
Sales Activities (Direct Marketing, RFPs, etc.)		$[ ]
IRA and Other Asset Retention		$[ ]
Total Sales & Marketing		$[ ]

Independent Registered Public Accounting Firm

[ ], serves as the funds’ and the portfolios’ independent registered public accounting firm providing audit and accounting services including (a) audit of the annual financial statements, (b) assistance and consultation with respect to filings with the SEC and (c) preparation of annual income tax returns.

Disclosure of Portfolio Holdings

It is the policy of the portfolio to protect the confidentiality of their holdings and prevent the selective disclosure of non-public information about portfolio holdings. The funds’ service providers are required to comply with this policy. No non-public information concerning the portfolio holdings may be disclosed to any unaffiliated third party, except as provided below. The Boards of Trustees has adopted formal procedures governing compliance with these policies.

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The funds, or their duly authorized service providers, may publicly disclose holdings in accordance with regulatory requirements, such as periodic funds disclosure in filings with the SEC. A summary or list of a funds’completed purchases and sales may only be made available after the public disclosure of portfolio holdings.

The funds publish all holdings on their website at www.transamericapartners.com (select Transamerica Partners Funds) approximately 25 days after the end of each calendar quarter. Such information generally remains online for 6 months, or as otherwise consistent with applicable regulations. The day following such publication, the information is deemed to be publicly disclosed for the purposes of the policies and procedures adopted by the funds. The funds may then forward the information to investors and consultants requesting it.

Each month, Transamerica Partners Money Market and Transamerica Partners Institutional Money Market file a schedule of portfolio holdings with the SEC on Form N-MFP. The information filed on Form N-MFP is made available to the public by the SEC 60 days after the end of the month to which the information pertains. A schedule of portfolio holdings for Transamerica Partners Money Market and Transamerica Partners Institutional Money Market is posted each month to the portfolios’ website in accordance with Rule 2a-7(c)(12) under the 1940 Act.
There are numerous mutual fund evaluation services such as Standard & Poor’s, Morningstar or Lipper Analytical Services, and due diligence departments of broker-dealers and wirehouses that regularly analyze the holdings of mutual funds and funds in order to monitor and report on various attributes including style, capitalization, maturity, yield, beta, etc. These services and departments then distribute the results of their analysis to the public, paid subscribers and/or in-house brokers. In order to facilitate the review of the funds and funds by these services and departments, the funds may distribute (or authorize their service providers to distribute) holdings to such services and departments before their public disclosure is required or authorized provided that: (i) the recipient does not distribute the holdings or results of the analysis to third parties, other departments or persons who are likely to use the information for purposes of purchasing or selling the funds before the holdings or results of the analysis become public information; and (ii) the recipient signs a written confidentiality agreement. Persons and entities unwilling to execute an acceptable confidentiality agreement may only receive portfolio holdings information that has otherwise been publicly disclosed. Neither the funds nor their service providers receive any compensation from such services and departments. Subject to such departures as the funds’ investment adviser and compliance department believe reasonable and consistent with reasonably protecting the confidentiality of the fund information, each confidentiality agreement should generally provide that, among other things: the portfolio information is the confidential property of the funds (and its service provider, if applicable) and may not be shared or used directly or indirectly for any purpose except as expressly provided in the confidentiality agreement. The recipient of the portfolio information agrees to limit access to the portfolio information to its employees (and agents) who, on a need to know basis, are (1) authorized to have access to the portfolio information and (2) subject to a duty of confidentiality, including duties not to share the non-public information with an unauthorized source and not to trade on non-public information. Upon written request, the recipient agrees to promptly return or destroy, as directed, the portfolio information.

The Board and an appropriate officer of the Investment Adviser’s compliance department or the Trust’s Chief Compliance Officer (“CCO”) may, on a case-by-case basis, impose additional restrictions on the dissemination of portfolio information and waive certain requirements. Any exceptions to the policy must be consistent with the purposes of the policy. To the extent required by law, the CCO reports to the Board violations of policies and procedures on disclosure of portfolio holdings.

In addition, separate account and unregistered product clients of TAM, the sub-advisers of the funds, or their respective affiliates generally have access to information regarding the portfolio holdings of their own accounts. Prospective clients may also have access to representative portfolio holdings. These clients and prospective clients are not subject to the portfolio holdings disclosure policies described above. Some of these separate accounts and unregistered product clients have substantially similar or identical investment objectives and strategies to certain funds, and therefore may have substantially similar or nearly identical portfolio holdings as those funds.

BlackRock Fund Advisors

[To be updated]

The S&P 500 Stock Master Portfolio’s Board of Trustees has adopted a policy regarding the disclosure of the portfolio’s portfolio holdings that requires that such information be disclosed in a manner that (a) is consistent with applicable legal requirements and in the best interests of the portfolio’s interestholders; (b) does not put the interests of BFA, the portfolio’s distributor, or any affiliated person of the portfolio, BFA or the portfolio’s distributor, above those of portfolio interestholders; (c) does not advantage any current or prospective portfolio interestholders over any other current or prospective portfolio interestholders; and (d) does not provide selective access to portfolio holdings information except pursuant to the following procedures and to the extent appropriate confidentiality arrangements and/or control mechanisms (such as by virtue of duties to the portfolio) limiting the use of such

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information are in effect. None of the portfolio, BFA, or BTC reserve any compensation or other consideration in connection with the disclosure of portfolio holdings information pursuant to the arrangements described below.

Service Providers. Daily access to information concerning portfolio holdings is permitted, without any lag between the date of the information and the date on which such information is disclosed, (i) to personnel of BFA who manage the Master Portfolio’s assets (“Portfolio Managers”) or who provide administrative, operational, risk management, or other support to the Portfolio Managers (“Support Staff”), and (ii) to other personnel of BFA and the Master Portfolio’s service providers, such as BTC and State Street Bank and Trust Company (“State Street”), who deal directly with, or assist in, functions related to investment management, administration, custody, and fund accounting, as may be necessary to conduct business in the ordinary course in a manner consistent with agreements with the Master Portfolio and the terms of its current registration statement. Portfolio Managers and Support Staff may also release and discuss portfolio holdings information with various broker-dealers, including broker dealers affiliated with BTC, in connection with managing the Master Portfolio’s assets and settling the Master Portfolio’s transactions, as may be necessary to conduct business in the ordinary course in a manner consistent with agreements with the Master Portfolio and the terms of its current registration statement.

From time to time, portfolio holdings information may also be provided, in the ordinary course of business without any lag between the date of the information and the date on which such information is disclosed (provided that such information is provided no earlier than the close of trading on the same business day as the date of such information), to other persons and entities, including, among others, the Master Portfolio’s Trustees; the auditors of the Master Portfolios; counsel to the Master Portfolios, and counsel to the Trustees who are not “interested persons” of the Master Portfolios (as such term is defined in the 1940 Act) (the “Independent Trustees”); pricing service vendors; proxy voting service providers; financial printers; regulatory authorities; stock exchanges and other listing organizations; rating or ranking organizations; or as otherwise required by law or regulation. The following is a list, as of March 31, 2011, of all such persons and entities with which the Master Portfolios have ongoing arrangements to provide portfolio holdings information in the ordinary course of business without any lag as described above: Moody’s, S&P, Lipper, Inc. and Morningstar, Inc., as the rating organizations for certain of the Master Portfolios; and Interactive Data Corp. and Reuters, as pricing services for the Master Portfolios. Any additions, modifications or deletions to the foregoing list that have occurred since March 31, 2011 are not reflected.

Generally, the above persons and entities are subject to duties of confidentiality arising under law or contract that the Boards of Trustees of the Master Portfolios believe provide an adequate safeguard for such information.

Third-Party Feeder Funds. The Master Portfolio provides portfolio holdings information to the sponsors, administrators or other service providers for feeder funds sponsored by institutions not affiliated with BFA that invest in the Master Portfolio (each, a “third-party feeder fund”) as may be necessary to (i) conduct business of the third-party feeder funds in the ordinary course in a manner consistent with agreements with the third-party feeder funds and the terms of the Master Portfolio’s current registration statement, or (ii) satisfy legal requirements applicable to the third-party feeder funds. Such portfolio holdings information may be provided without any lag between the date of the information and the date on which such information is disclosed. Each third-party feeder fund is subject to the terms and duties of confidentiality of its own portfolio holdings disclosure policy as adopted by its board of directors or trustees (which policy may be different than the Master Portfolio’s policy described herein), and none of BFA, BTC or the Board of Trustees of the Master Portfolio’s exercises control over any third-party feeder fund’s policies. The following is a list, as of March 31, 2010, of third-party feeder funds and their service providers with which the Master Portfolios have ongoing arrangements to provide portfolio holdings information: BB&T Equity Index Funds, BB&T Funds, BE Creative, Inc., BISYS Fund Services Limited Partnership, Transamerica Partners Institutional Stock Index Fund, Transamerica Partners Funds Group, Diversified Investors Securities Corp., Homestead Funds, Inc., State Farm S&P 500 Index Fund, State Farm Mutual Fund Trust, and State Farm VP Management Corp. Such information is generally provided within five business days following month-end. Any additions, modifications or deletions to the foregoing list that have occurred since March 31, 2011 are not reflected.

BFA, BTC and the Master Portfolios may also provide portfolio holdings information to the sponsors, administrators or other service providers for a potential third-party feeder fund to the extent necessary for such entities to evaluate a potential investment in the relevant Master Portfolio, subject to appropriate confidentiality arrangements limiting the use of such information to that purpose.

Securities and Exchange Commission Filings. The Master Portfolio will disclose its complete portfolio holdings schedule in public filings with the Securities and Exchange Commission on a quarterly basis, based on the Portfolio’s fiscal year, within 70 days after the end of the calendar quarter, and will provide that information to shareholders, as required by federal securities laws and regulations thereunder.

Other Public Disclosure. A Master Portfolio may voluntarily disclose portfolio holdings information in advance of required filings with the SEC to persons and entities that make such information generally available to interested persons, such as institutional

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investors and their advisers and representatives. These persons and entities may make such information available through a variety of methods, including without limitation via websites, e-mail and other forms of publication. Such portfolio holdings information may be provided without any lag between the date of the information and the date on which such information is disclosed, provided that such information is provided no earlier than the close of trading on the same business day as the date of such information. No conditions or restrictions are placed on the use of such information because the Master Portfolios intend that the persons and entities to which such information is provided will make such information generally available to all interested persons. The following is a list, as of March 31, 2011, of all such persons and entities with which the Master Portfolios have ongoing arrangements to provide portfolio holdings information and the frequency with which such information is provided: Micropal (monthly) and Bloomberg (monthly). Any additions, modifications or deletions to the foregoing list that have occurred since March 31, 2011 are not reflected.

Approved Recipients. The Master Portfolios’ Chief Compliance Officer may also authorize disclosure of portfolio holdings information to approved recipients pursuant to the above policy. The Boards of Trustees of the Master Portfolios review the above policy and the procedures with respect to the disclosure of portfolio holdings information at least annually. There can be no assurance that the Master Portfolio’s policy and procedures with respect to disclosure of portfolio holdings information will prevent the misuse of such information by persons that receive such information.

Description of the Trust; Fund Shares

Transamerica Partners Trust is a Massachusetts business trust established under a Declaration of Trust dated as of April 23, 1993, as amended and restated on November 1, 2007. Transamerica Partners Institutional Trust is a Massachusetts business trust established under a Declaration of Trust dated as of January 5, 1996, as amended and restated on November 1, 2007. The authorized capital of each Trust consists of an unlimited number of shares of beneficial interest of $0.00001 par value which may be issued in separate series.

Series and Classes. Currently, each Trust has twenty-one active series, although additional series may be established from time to time. Each Trust may also establish classes of shares within each series at any time. The Trustees may determine the rights and preferences, limitations and restrictions, including qualifications for ownership, conversion and exchange features, minimum purchase and account size, expenses and charges, and other features of the series and classes. The Trustees may change any of those features, terminate any series or class, combine series with other series in the Trust, combine one or more classes of a series with another class in that series or convert the shares of one class into another class.

Each share of a series represents an equal proportionate interest in that series with each other share of that series, except that due to varying expenses borne by different classes, distributions and net asset values may be different for different classes. Shareholders of each series are entitled, upon liquidation or dissolution, to a pro rata share in the net assets of that series that are available for distribution to shareholders, except to the extent of different expenses borne by different classes as noted above. All consideration received by a Trust for shares of any series and all assets in which such consideration is invested belong to that series and are subject to the liabilities related thereto. Each share of a fund, as a series of a Trust, represents an interest in the fund only and not in the assets of any other series of the Trust.

The Declaration of Trust of each Trust provides that Trustees may, in their discretion, require the Trust to redeem shares held by any shareholder for any reason under terms set by the Trustees, including, but not limited to, (i) the determination of the Trustees that direct or indirect ownership of shares of any fund has or may become concentrated in such shareholder to an extent that would disqualify that series as a regulated investment company under the Code, (ii) the failure of a shareholder to supply a tax identification number if required to do so, (iii) the failure of a shareholder to pay when due for the purchase of shares issued to that shareholder, (iv) the value of a shareholder’s shares being less than a minimum amount established from time to time by the Trustees, (v) failure of a shareholder to meet or maintain the qualifications for ownership of a particular class of shares, or (vi) the determination by the Trustees or pursuant to policies adopted by the Trustees that ownership of shares by a particular shareholder is not in the best interests of the remaining shareholders of the Trust or applicable fund or class.

Shareholder Voting. Each Trust’s Declaration of Trust provides for shareholder voting as required by the Investment Company Act of 1940 or other applicable laws but otherwise permits, consistent with Massachusetts law, actions by the Trustees without seeking the consent of shareholders. The Trustees may, without shareholder approval, amend a Trust’s Declaration of Trust or authorize the merger or consolidation of the Trust into another trust or entity, reorganize the Trust, or any series or class into another trust or entity or a series or class of another entity, sell all or substantially all of the assets of the Trust or any series to another entity, or a series or class of another entity, or terminate the Trust or any series or class.

The funds are not required to hold an annual meeting of shareholders, but will call special meetings of shareholders whenever required by the 1940 Act or by the terms of the applicable Declaration of Trust. The Declarations of Trust provide for “dollar-weighted voting”

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which means that a shareholder’s voting power is determined, not by the number of shares he or she owns, but by the dollar value of those shares determined on the record date. All shareholders of all series of a Trust vote together, except where required by the 1940 Act to vote separately by series, or when the Trustees have determined that a matter affects only the interests of one or more series.

Election and Removal of Trustees. The Declaration of Trust of each Trust provides that the Trustees may establish the number of Trustees and that vacancies on the Board may be filled by the remaining Trustees, except when election of Trustees by the shareholders is required under the 1940 Act. Trustees are then elected by a plurality of votes cast by shareholders at a meeting at which a quorum is present. Each Declaration of Trust also provides that a mandatory retirement age may be set by action of two-thirds of the Trustees and that Trustees may be removed, with or without cause, by a vote of shareholders holding two-thirds of the voting power of the Trust, or by a vote of two-thirds of the remaining Trustees. The provisions of the Declarations of Trust relating to the election and removal of Trustees may not be amended without the approval of two-thirds of the Trustees.

Amendments to the Declarations of Trust. The Trustees are authorized to amend the Declarations of Trust without the vote of shareholders, but no amendment may be made that impairs the exemption from personal liability granted in the declaration to persons who are or have been shareholders, Trustees, officers or, employees of the Trust or that limit the rights to indemnification or insurance provided in the Declarations of Trust with respect to actions or omissions of persons entitled to indemnification under the Declarations of Trust prior to the amendment.

Shareholder, Trustee and Officer Liability. Under Massachusetts law, shareholders of a Massachusetts business trust may, under certain circumstances, be held personally liable as partners for its obligations and liabilities. However, the Declaration of Trust of each Trust provides that shareholders are not personally liable for the obligations of a fund and requires the fund to indemnify a shareholder against any loss or expense arising from any such liability. In addition, a fund will assume the defense of any claim against a shareholder for personal liability at the request of the shareholder. Each Declaration of Trust further provides that a Trustee acting in his or her capacity as Trustee is not personally liable to any person other than the Trust or its shareholders, for any act, omission, or obligation of the Trust. Each Declaration of Trust also permits the limitation of a Trustee’s liability to the full extent permitted by law. The Declaration of Trust of each Trust requires the Trust to indemnify any persons who are or who have been Trustees, officers or employees of the Trust for any liability for actions or failure to act except to the extent prohibited by applicable federal law. In making any determination as to whether any person is entitled to the advancement of expenses in connection with a claim for which indemnification is sought, such person is entitled to a rebuttable presumption that he or she did not engage in conduct for which indemnification is not available.

The Declarations of Trust provide that any Trustee who serves as Chair of the Board or of a committee of the Board, lead independent Trustee, or audit committee financial expert, or in any other similar capacity will not be subject to any greater standard of care or liability because of such position.

Derivative Actions. Each Declaration of Trust provides a detailed process for the bringing of derivative actions by shareholders in order to permit legitimate inquiries and claims while avoiding the time, expense, distraction, and other harm that can be caused to a fund or its shareholders as a result of spurious shareholder demands and derivative actions. Prior to bringing a derivative action, a demand by three unrelated shareholders must first be made on the fund’s Trustees. The Declaration of Trust details various information, certifications, undertakings and acknowledgements that must be included in the demand. Following receipt of the demand, the Trustees have a period of 90 days, which may be extended by an additional 60 days, to consider the demand. If a majority of the Trustees who are considered independent for the purposes of considering the demand determine that maintaining the suit would not be in the best interests of the fund, the Trustees are required to reject the demand and the complaining shareholders may not proceed with the derivative action unless the shareholders are able to sustain the burden of proof to a court that the decision of the Trustees not to pursue the requested action was not a good faith exercise of their business judgment on behalf of the fund. The Declaration of Trust of each Trust further provides that shareholders owning shares representing at least 5% of the voting power of the affected fund must join in bringing the derivative action. If a demand is rejected, the complaining shareholders will be responsible for the costs and expenses (including attorneys’ fees) incurred by the fund in connection with the consideration of the demand, if in the judgment of the independent Trustees, the demand was made without reasonable cause or for an improper purpose. If a derivative action is brought in violation of the declaration, the shareholders bringing the action may be responsible for the fund’s costs, including attorneys’ fees.

Each Declaration of Trust further provides that a fund shall be responsible for payment of attorneys’ fees and legal expenses incurred by a complaining shareholder only if required by law, and any attorneys’ fees that the fund is obligated to pay shall be calculated using reasonable hourly rates. The Declarations of Trust also require that actions by shareholders against a fund be brought only in federal court in the Southern District of New York, or if not permitted to be brought in federal court, then in the Business Litigation Session of Suffolk Superior Court in Massachusetts, and that the right to jury trial be waived to the full extent permitted by law.

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Proxy Voting Guidelines and Procedures

As detailed in the funds’ Proxy Voting Policies and Procedures below, the funds use the proxy voting policies and procedures of the sub-advisers to determine how to vote proxies relating to securities held by the funds. The proxy voting policies and procedures of TAM, BFA and each sub-adviser are attached or summarized in Appendix A.

The funds file Form N-PX, with the complete proxy voting records of the funds for the 12 months ended June 30^th, no later than August 31st of each year. The latest filing of Form N-PX was made on August 30, 2010, for the 12 month-period ended June 30, 2010. The form is available without charge: (1) from the funds, upon request by calling 1-888-233-4339; and (2) on the SEC’s website at www.sec.gov.

Financial Statements

The financial statements and financial highlights of Transamerica Partners Funds Group, Transamerica Partners Funds Group II, Transamerica Partners Portfolios and S&P 500 Stock Master Portfolio, a portfolio of the Master Investment Portfolio as of December 31, 2010 have been filed with the Securities and Exchange Commission as part of the annual reports of the Trusts and the Portfolio Trust (accession numbers: [ ], [ ], [ ], and [ ], respectively) and are hereby incorporated by reference into this SAI.

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Appendix A

TRANSAMERICA PARTNERS FUNDS GROUP
TRANSAMERICA PARTNERS FUNDS GROUP II
TRANSAMERICA PARTNERS PORTFOLIOS

PROXY VOTING POLICIES AND PROCEDURES


I.	Statement of Principle

The Funds seek to assure that proxies received by the Funds are voted in the best interests of the Funds’ stockholders and have accordingly adopted these procedures.


II.	Delegation of Proxy Voting/Adoption of Adviser and Sub-Adviser Policies

Each Fund delegates the authority to vote proxies related to portfolio securities to Transamerica Asset Management, Inc. (the “Adviser”), as investment adviser to each Fund, which in turn delegates proxy voting authority for most portfolios of the Fund to the Sub-Adviser retained to provide day-to-day portfolio management for that portfolio. The Board of Trustees/Directors of each Fund adopts the proxy voting policies and procedures of the Adviser and Sub-Advisers as the proxy voting policies and procedures (each a “Proxy Voting Policy”) that will be used by each of these respective entities when exercising voting authority on behalf of the Fund. These policies and procedures are attached hereto.


III.	Annual Review of Proxy Voting Policies of Adviser and Sub-Advisers

No less frequently than once each calendar year, the Proxy Voting Administrator will request each Sub-Adviser to provide a current copy of its Proxy Voting Policy, or certify that there have been no material changes to its Proxy Voting Policy or that all material changes have been previously provided for review, and verify that such Proxy Voting Policy is consistent with those of the Funds and Adviser. Any inconsistency between the Sub-Adviser’s Proxy Voting Policy and that of the Funds or Adviser shall be reconciled by the Proxy Voting Administrator before presentation for approval by the Board.

The Proxy Voting Administrator will provide an electronic copy of each Board approved Proxy Voting Policy to Legal department for inclusion in applicable SEC filings.


IV.	Securities on Loan

The Boards of Trustees/Directors of the Funds have authorized the Adviser, in conjunction with State Street Bank and Trust Company (“State Street”), to lend portfolio securities on behalf of the Funds. Securities on loan generally are voted by the borrower of such securities. Should a Sub-Adviser to the Fund wish to exercise its vote for a particular proxy, the Adviser will immediately contact State Street and terminate the loan.

Last Revised: November 13, 2009

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Aronson Johnson Ortiz, LP

OVERVIEW

Aronson Johnson Ortiz, LP (AJO) exercises proxy voting responsibilities on behalf of many of its clients pursuant to express or implied authorization in the client’s investment management agreement, though some clients retain this authority. In the case of ERISA accounts AJO, as adviser to the plan, must vote all proxies for the securities managed by AJO, unless the authority to vote proxies is retained by another plan fiduciary.

Each client account is voted by the firm’s Proxy Manager, and our proxy voting is overseen by the firm’s Proxy Oversight Committee. We have adopted and implemented policies and procedures reasonably designed to ensure proxies are voted in the best interests of clients, in accordance with our fiduciary duties and the requirements of ERISA and of SEC Rule 206(4)-6 under the Investment Advisers Act of 1940.

AJO uses a quantitative approach to investment management, using publicly available data and a proprietary investment model. Our quantitative model does not include subjective analysis of companies and their officers and directors. Therefore, for detailed analyses of proxy issues AJO will rely primarily on one or more independent third party proxy voting services, and we will generally vote proxies in accordance with the recommendations we receive from these services. We have procedures in place to ensure the advice we receive is impartial and in the best interests of our clients. We vote each proxy individually and on rare occasions we will not follow the third party recommendation. We will only vote against the recommendation where it is in the portfolio’s best interests to do so and where AJO has no material conflict of interest. We rely solely on the third party recommendations in situations where AJO has a material conflict of interest (see “Conflicts of Interest,” below).

In some instances AJO may abstain from voting a client proxy, particularly when the effect on the client’s economic interest or the value to the portfolio is insignificant or the cost of voting the proxy outweighs the benefit to the portfolio.

CONFLICTS OF INTEREST

Actual and potential conflicts of interest, including conflicts of interest of our third party proxy service, are monitored by AJO’s Proxy Oversight Committee. When a conflict is identified, the Committee first makes a determination as to whether the conflict is material. The Committee defines a material conflict as one reasonably likely to be viewed as important by the average shareholder. In the case of a material AJO conflict, we will vote the proxy in accordance with the third party recommendation, unless the client directs us otherwise or, in the case of an ERISA client, revokes our proxy voting authority in writing. In the case where both AJO and our primary proxy voting service each has a conflict of interest, the Committee will vote the proxy in accordance with the recommendation of our secondary proxy service.

RECORD-KEEPING

AJO will maintain all required proxy voting records for five years or for such longer time as applicable law or client guidelines require. AJO may satisfy some of its record-keeping obligations by utilizing third party service providers or by relying on records available on EDGAR, the SEC’s online document filing and retention system.

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VOTE DISCLOSURE

Each proxy voted by AJO for a client account is disclosed to the client quarterly. Clients may receive additional reports of proxies voted on their behalf by AJO by calling us collect at 215/546-7500.

AJO treats proxy votes as the property of the client and will not disclose proxy votes to third parties.

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BlackRock

PROXY VOTING POLICIES AND PROCEDURES

The following is a discussion of the proxy voting policies of the S&P 500 Stock Master Portfolio, Core Bond Portfolio and Inflation-Protected Securities Portfolio (“BlackRock Portfolios”).

Master Investment Portfolio and Transamerica Partners Portfolios (“Portfolio Trusts”) have adopted as their proxy voting policies for the BlackRock Portfolios the proxy voting guidelines of BFA and BFM (“BlackRock”), the investment advisers to the BlackRock Portfolios. The Portfolio Trusts have delegated to BlackRock the responsibility for voting proxies on the portfolio securities held by the BlackRock Portfolios. Therefore, the remainder of this section discusses the BlackRock Portfolios’ proxy voting guidelines and BlackRock’s role in implementing such guidelines.

BlackRock votes (or refrains from voting) proxies for the BlackRock Portfolios in a manner that BlackRock, in the exercise of its independent business judgment, concludes is in the best long-term economic interests of such BlackRock Portfolios. In some cases, BlackRock may determine that it is in the best long-term economic interests of the BlackRock Portfolios to refrain from exercising the BlackRock Portfolios’ proxy voting rights (such as, for example, proxies on certain non-U.S. securities that might impose costly or time- consuming in-person voting requirements). With regard to the relationship between securities lending and proxy voting, BlackRock’s approach is also driven by its clients’ economic interests. The evaluation of the economic desirability of recalling loans involves balancing the revenue producing value of loans against the likely economic value of casting votes. Based on BlackRock’s evaluation of this relationship, BlackRock believes that the likely economic value of casting a vote generally is less than the securities lending income, either because the votes will not have significant economic consequences or because the outcome of the vote would not be affected by BlackRock recalling loaned securities in order to ensure they are voted. Periodically, BlackRock analyzes the process and benefits of voting proxies for securities on loan, and will consider whether any modification of its proxy voting policies or procedures are necessary in light of any regulatory changes. BlackRock will normally vote on specific proxy issues in accordance with its proxy voting guidelines. BlackRock’s proxy voting guidelines provide detailed guidance as to how to vote proxies on certain important or commonly raised issues. BlackRock may, in the exercise of its business judgment, conclude that the proxy voting guidelines do not cover the specific matter upon which a proxy vote is requested, or that an exception to the proxy voting guidelines would be in the best economic interests of the BlackRock Portfolios. BlackRock votes (or refrains from voting) proxies without regard to the relationship of the issuer of the proxy (or any shareholder of such issuer) to the BlackRock Portfolios, the BlackRock Portfolios’ affiliates (if any), BlackRock or BlackRock’s affiliates, or BlackRock Investments, LLC (“BRIL”) or BRIL’s affiliates. When voting proxies, BlackRock attempts to encourage companies to follow practices that enhance shareholder value and increase transparency and allow the market to place a proper value on their assets. With respect to certain specific issues:


	•	The BlackRock Portfolios generally support the board’s nominees in uncontested elections of directors and generally support proposals that strengthen the independence of boards of directors;

	•	The BlackRock Portfolios generally do not support proposals on social issues that lack a demonstrable economic benefit to the issuer and the BlackRock Portfolios investing in such issuer; and

	•	The BlackRock Portfolios generally vote against anti-takeover proposals and proposals that would create additional barriers or costs to corporate transactions that are likely to deliver a premium to shareholders.

BlackRock maintains institutional policies and procedures that are designed to prevent any relationship between the issuer of the proxy (or any shareholder of the issuer) and the BlackRock Portfolios, the BlackRock Portfolios’ affiliates (if any), BlackRock or BlackRock’s affiliates, or BRIL or BRIL’s affiliates, from having undue influence on BlackRock’s proxy voting activity. In certain instances, BlackRock may determine to engage an independent fiduciary to vote proxies as a further safeguard against potential conflicts of interest or as otherwise required by applicable law. The independent fiduciary may either vote such proxies or provide BlackRock with instructions as to how to vote such proxies. In the latter case, BlackRock votes the proxy in accordance with the independent fiduciary’s determination.

Information with respect to how BlackRock voted BlackRock Portfolios proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available: (i) without charge, upon request, by calling 1-800-441-7762 (toll-free); and (ii) on the SEC’s website at www.sec.gov.

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Columbus Circle Investors

PROXY VOTING POLICY
2009


I.	Procedures

Columbus Circle Investors (Columbus Circle) is generally authorized by its clients, as a term of its Investment Advisory Agreement, the authority to vote and give proxies for the securities held in clients’ investment accounts. At their election, however, clients may retain this authority, in which case Columbus Circle will consult with clients regarding proxy voting decisions as requested.

For those clients for whom Columbus Circle Investors (Columbus Circle) has undertaken to vote proxies, Columbus Circle retains the final authority and responsibility for such voting subject to any specific restrictions or voting instructions by clients.

In addition to voting proxies for clients, Columbus Circle:


1)	provides clients with a concise summary of its proxy voting policy, which includes information describing how clients may obtain a copy of this complete policy and information regarding how specific proxies related to each respective investment account are voted. Columbus Circle provides this summary to all new clients as part of its Form ADV, Part II disclosure brochure, which is available to any clients upon request;

2)	applies its proxy voting policy according to the following voting policies and keeps records of votes for each client through Institutional Shareholder Services;

3)	keeps records of proxy voting available for inspection by each client or governmental agencies - to both determine whether the votes were consistent with policy and to determine all proxies were voted;

4)	monitors such voting for any potential conflicts of interest and maintains systems to deal with these issues appropriately; and

5)	maintains this written proxy voting policy, which may be updated and supplemented from time to time;

Frank Cuttita, Columbus Circle’s Chief Administrative Officer and Chief Compliance Officer, will maintain Columbus Circle’s proxy voting process. Clients with questions regarding proxy voting decisions in their accounts should contact Mr. Cuttita.


II.	Voting Guidelines

Keeping in mind the concept that no issue is considered “routine,” outlined below are general voting parameters on various types of issues when there are no extenuating circumstances, i.e., company specific reason for voting differently. The Operating Committee of Columbus Circle has adopted the following voting parameters.

To assist in its voting process, Columbus Circle has engaged Institutional Shareholder Services (ISS), an independent investment advisor that specializes in providing a variety of fiduciary level proxy related services to institutional investment managers, plan sponsors, custodians, consultants, and other institutional investors. ISS also provides Columbus Circle with reports that reflect proxy voting activities for Columbus Circle’s client portfolios which provide information for appropriate monitoring of such delegated responsibilities.

Columbus Circle has delegated to ISS the authority to vote Columbus Circle’s clients’ proxies consistent with the following parameters. ISS further has the authority to determine whether any extenuating specific company circumstances exist that would mandate a special consideration of the application of these voting parameters. If ISS makes such a determination, the matter will be forwarded to Mr. Frank Cuttita for review. Likewise, ISS will present to Columbus Circle any specific matters not addressed within the following parameters for consideration.


A.	Management Proposals:

1.	When voting on ballot items that are fairly common management sponsored initiatives certain items are generally, although not always, voted affirmatively.

A-5


	¨	“Normal” elections of directors

	¨	Approval of auditors/CPA

	¨	Directors’ liability and indemnification

	¨	General updating/corrective amendments to charter

	¨	Elimination of cumulative voting

	¨	Elimination of preemptive rights

2.	When voting items that have a potential substantive financial or best interest impact, certain items are generally, although not always, voted affirmatively:

	¨	Capitalization changes that eliminate other classes of stock and voting rights

	¨	Changes in capitalization authorization for stock splits, stock dividends, and other specified needs.

	¨	Stock purchase plans with an exercise price of not less than 85% FMV

	¨	Stock option plans that are incentive based and not excessive

	¨	Reductions in supermajority vote requirements

	¨	Adoption of antigreenmail provisions

3.	When voting items which have a potential substantive financial or best interest impact, certain items are generally not voted in support of the proposed management sponsored initiative:

	¨	Capitalization changes that add classes of stock that are blank check in nature or that dilute the voting interest of existing shareholders

	¨	Changes in capitalization authorization where management does not offer an appropriate rationale or that are contrary to the best interest of existing shareholders

	¨	Anti-takeover and related provisions which serve to prevent the majority of shareholders from exercising their rights or effectively deter appropriate tender offers and other offers

	¨	Amendments to bylaws that would require super-majority shareholder votes to pass or repeal certain provisions

	¨	Classified or single-slate boards of directors

	¨	Reincorporation into a state that has more stringent anti-takeover and related provisions

	¨	Shareholder rights plans that allow appropriate offers to shareholders to be blocked by the board or trigger provisions which prevent legitimate offers from proceeding.

	¨	Excessive compensation or non-salary compensation related proposals, always company specific and considered case-by-case

A-6


	¨	Change-in-control provisions in non-salary compensation plans, employment contracts, and severance agreements that benefit management and would be costly to shareholders if triggered

	¨	Amending articles to relax quorum requirements for special resolutions

	¨	Re-election of director(s) directly responsible for a company’s fraudulent or criminal act

	¨	Re-election of director(s) who holds offices of chairman and CEO

	¨	Re-election of director(s) who serve on audit, compensation and nominating committees

	¨	Election of directors with service contracts of three years, which exceed best practice and any change in control provisions

	¨	Adoption of option plans/grants to directors or employees of related companies

	¨	Lengthening internal auditors’ term in office to four years

B.	Shareholder Proposals:

Traditionally shareholder proposals have been used mainly for putting social initiatives and issues in front of management and other shareholders. Under ERISA, it is inappropriate to use (vote) plan assets to carry out such social agendas or purposes. Thus, shareholder proposals are examined closely for their relationship to the best interest of shareholders, i.e., beneficiaries, and economic impact.

1.	When voting shareholder proposals, in general, initiatives related to the following items are supported:

	¨	Auditors should attend the annual meeting of shareholders

	¨	Election of the board on an annual basis

	¨	Equal access to proxy process

	¨	Submit shareholder rights plan poison pill to vote or redeem

	¨	Undo various anti-takeover related provisions

	¨	Reduction or elimination of super-majority vote requirements

	¨	Anti-greenmail provisions

	¨	Submit audit firm ratification to shareholder votes

	¨	Audit firm rotations every five or more years

	¨	Requirement to expense stock options

	¨	Establishment of holding periods limiting executive stock sales

	¨	Report on executive retirement benefit plans

	¨	Require two-thirds of board to be independent

	¨	Separation of chairman and chief executive posts

2.	When voting shareholder proposals, in general, initiatives related to the following items are not supported:

A-7


		¨	Requiring directors to own large amounts of stock before being eligible to be elected

		¨	Restoring cumulative voting in the election of directors

¨	Reports which are costly to provide or which would require duplicative efforts or expenditures which are of a non-business nature or would provide no pertinent information from the perspective of ERISA shareholders

¨	Restrictions related to social, political or special interest issues which impact the ability of the company to do business or be competitive and which have a significant financial or best interest impact, such as specific boycotts or restrictions based on political, special interest or international trade considerations; restrictions on political contributions; and the Valdez principles.


		¨	Restrictions banning future stock option grants to executives except in extreme cases

3.		Additional shareholder proposals require case-by-case analysis

		¨	Prohibition or restriction of auditors from engaging in non-audit services (auditors will be voted against if non-audit fees are greater than audit and audit-related fees, and permitted tax fees combined)

		¨	Requirements that stock options be performance-based

		¨	Submission of extraordinary pension benefits for senior executives under a company’s SERP for shareholder approval

		¨	Shareholder access to nominate board members

		¨	Requiring offshore companies to reincorporate into the United States


	1.	ISS receives proxy material from custodial banks, Automatic Data Processing (ADP) and directly from companies.

	2.	For every proxy ISS receives, ISS reviews all proxy material and provides the Proxy Analyst with an analysis of such material, including management’s recommendation of how to vote the proxy, and a vote recommendation based on the Proxy Guidelines or specific client guidelines.


	a.	Domestic and International Routine Corporate Governance Issues and Routine Social Issues: The Proxy Analyst votes in accordance with the ISS recommendation on routine issues.

	b.	Domestic and International Non-Routine Corporate Governance Issues and Non-Routine Social Issues; Vote with Management: If the issue is determined to be non-routine by the Proxy Analyst, an analyst for the relevant asset class and a Proxy Committee member will review the proxy material and recommend how to vote such proxy. If the recommendation is to vote with management and not inconsistent with the Proxy Guidelines, the process will continue as provided in section (4) below.

	c.	Domestic and International Non-Routine Corporate Governance Issues and Non-Routine Social Issues; Voting Against Management: If (a) the issue is determined to be non-routine by the Proxy Analyst and either the analyst for the relevant asset class or the Proxy Committee member recommends a vote against management or (b) an analyst seeks in any case to vote contrary to the Proxy Guidelines, then at least two (2) Proxy Committee members will review the proxy material and determine how to vote such proxy. In certain circumstances, an independent third party will be engaged to determine how to vote the proxy (See Material Conflict of Interest below).


	•	General Electric Company, the parent of GE Asset Management, is soliciting proxies in connection with a transaction involving an issuer of securities that GE Asset Management holds in its client accounts.

	•	A plan sponsor of a benefit plan to which GE Asset Management provides services is also the issuer of securities that GE Asset Management holds in its client accounts. However, absent extraordinary circumstances, this situation should not present a material conflict of interest and in no case would a material conflict of interest exist unless the assets of such benefit plan managed by GE Asset Management constituted more than 1% of GE Asset Management’s assets under management.

	•	An officer or employee of GE Asset Management or one of its affiliates serves as a director of a company during a time when GE Asset Management has an opportunity to vote securities of that company.


	•	Proxy Voting Policy.
	•	Proxy Guidelines.
	•	Written request for proxy voting records and a written response to such request.
	•	Any document prepared by an analyst or Proxy Committee member that was material to the voting of a proxy.


	•	Proxy statements received regarding client securities (unless available through the Securities and Exchange Commission’s EDGAR system).
	•	Records of votes cast on behalf of clients.


(1)	describe any real or perceived conflict of interest,

(2)	determine whether such real or perceived conflict of interest is material,

(3)	discuss any procedure used to address such conflict of interest,

(4)	report any contacts from outside parties (other than routine communications from proxy solicitors), and

(5)	include confirmation that the recommendation as to how the proxies are to be voted is in the best economic interests of clients and was made without regard to any conflict of interest.


▪	Business Relationships – where Invesco manages money for a company or an employee group, manages pension assets or is actively soliciting any such business, or leases office space from a company;

▪	Personal Relationships – where an Invesco person has a personal relationship with other proponents of proxy proposals, participants in proxy contests, corporate directors, or candidates for directorships; and

▪	Familial Relationships – where an Invesco person has a known familial relationship relating to a company (e.g. a spouse or other relative who serves as a director of a public company or is employed by the company).


Please feel free to call with any questions.

Sincerely,		Client Acknowledgement:


(name, title)			signature(s)



enclosure
date	_____________________


	•	OFI provides significant investment advisory or other services to a company whose management is soliciting proxies or OFI is seeking to provide such services;
	•	a company that is a significant selling agent of OFI’s products and services solicits proxies;
	•	OFI serves as an investment adviser to the pension or other investment account of the portfolio company or OFI is seeking to serve in that capacity; or
	•	OFI and the company have a lending or other financial-related relationship.


	•	If the proposal that gives rise to a material conflict is specifically addressed in the Guidelines, OFI will vote the portfolio proxy in accordance with the Guidelines, provided that the Guidelines do not provide discretion to OFI on how to vote on the matter (i.e., case-by-case);
	•	If the proposal that gives rise to a potential conflict is not specifically addressed in the Guidelines or provides discretion to OFI on how to vote, OFI will vote in accordance with its proxy voting agent’s general recommended guidelines on the proposal provided that OFI has reasonably determined there is no conflict of interest on the part of the proxy voting agent;
	•	If neither of the previous two procedures provides an appropriate voting recommendation, OFI may retain an independent fiduciary to advise OFI on how to vote the proposal; or the Committee may determine that voting on the particular proposal is impracticable and/or is outweighed by the cost of voting and direct OFI to abstain from voting.


	6.	Shares of Registered Investment Companies (Fund of Funds)


D.	Fund Board Reports and Recordkeeping
OFI will prepare periodic reports for submission to the Board describing:


	•	any issues arising under these Policies and Procedures since the last report to the Board and the resolution of such issues, including but not limited to, information about conflicts of interest not addressed in the Policies and Procedures; and
	•	any proxy votes taken by OFI on behalf of the Funds since the last report to the Board which were deviations from the Policies and Procedures and the reasons for any such deviations.


	•	these Policies and Procedures, as amended from time to time;
	•	records of votes cast with respect to portfolio proxies, reflecting the information required to be included in Form N-PX;
	•	records of written client requests for proxy voting information and any written responses of OFI to such requests; and
	•	any written materials prepared by OFI that were material to making a decision in how to vote, or that memorialized the basis for the decision.


E.	Amendments to these Procedures

In addition to the Committee’s responsibilities as set forth in the Committee’s Charter, the Committee shall periodically review and update these Policies and Procedures as necessary. Any amendments to these Procedures and Policies (including the Guidelines) shall be provided to the Boards for review, approval and ratification at the Boards’ next regularly scheduled meetings.

F.	Proxy Voting Guidelines

The Guidelines adopted by the Boards of the Funds are attached as Appendix A. The importance of various issues shifts as political, economic and corporate governance issues come to the forefront and then recede. Accordingly, the Guidelines address the issues OFI has most frequently encountered in the past several years.


1.0	OPERATIONAL ITEMS

	1.1.1	Amend Quorum Requirements.
	•	Vote AGAINST proposals to reduce quorum requirements for shareholder meetings below a majority of the shares outstanding unless there are compelling reasons to support the proposal.

	1.1.2	Amend Articles of Incorporation/Association or Bylaws
	•	Vote amendments to the bylaws/charter on a CASE-BY-CASE basis.
	•	Vote FOR bylaw/charter changes if:
		¡	shareholder rights are protected;
		¡	there is a negligible or positive impact on shareholder value;
		¡	management provides sufficiently valid reasons for the amendments; and/or
		¡	the company is required to do so by law (if applicable); and
		¡	they are of a housekeeping nature (updates or corrections).

	1.1.3	Change Company Name.
	•	Vote WITH Management.

	1.1.4	Change Date, Time, or Location of Annual Meeting.
	•	Vote FOR management proposals to change the date/time/location of the annual meeting unless the proposed change is unreasonable.
	•	Vote AGAINST shareholder proposals to change the date/time/location of the annual meeting unless the current scheduling or location is unreasonable.

	1.1.5	Transact Other Business.
	•	Vote AGAINST proposals to approve other business when it appears as voting item.

	1.1.6	Change in Company Fiscal Term
	•	Vote FOR resolutions to change a company’s fiscal term for sufficiently valid business reasons.
	•	Vote AGAINST if a company’s motivation for the change is to postpone its AGM.

	AUDITORS

	1.2	Ratifying Auditors
	•	Vote FOR Proposals to ratify auditors, unless any of the following apply:
		¡	an auditor has a financial interest in or association with the company, and is therefore not independent;
		¡	fees for non-audit services are excessive;
		¡	there is reason to believe that the independent auditor has rendered an opinion which is neither accurate nor indicative of the company’s financial position; or
		¡	poor accounting practices are identified that rise to a serious level of concern, such as: fraud; misapplication of Generally Accepted Accounting Principles (“GAAP”) or International Financial Reporting Standards (“IFRS”); or material weaknesses identified in Section 404 disclosures.
	•	Vote AGAINST shareholder proposals asking companies to prohibit or limit their auditors from engaging in non-audit services.
	•	Vote AGAINST shareholder proposals asking for audit firm rotation.
	•	Vote on a CASE-BY-CASE basis on shareholder proposals asking the company to discharge the auditor(s).
	•	Proposals are adequately covered under applicable provisions of Sarbanes-Oxley Act or NYSE or SEC regulations.
	•	Vote AGAINST the appointment of external auditors if they have previously served the company in an executive capacity or can otherwise be considered affiliated with the company.


2.0	THE BOARD OF DIRECTORS

	2.1	Voting on Director Nominees
	•	Vote on director nominees should be made on a CASE-BY-CASE basis, examining the following factors:
		¡	composition of the board and key board committees;
		¡	attendance at board meetings;
		¡	corporate governance provisions and takeover activity;
		¡	long-term company performance relative to a market index;
		¡	directors’ investment in the company;
		¡	whether the chairman is also serving as CEO;
		¡	whether a retired CEO sits on the board.
	•	WITHHOLD/AGAINST (whichever vote option is applicable on the ballot) VOTES: However, there are some actions by directors that should result in votes being WITHHELD/AGAINST. These instances include directors who:
		¡	attend less than 75% of the board and committee meetings without a valid excuse;
		¡	implement or renew a dead-hand or modified dead-hand poison pill;
		¡	ignore a shareholder proposal that is approved by a majority of the shares outstanding;
		¡	ignore a shareholder proposal that is approved by a majority of the votes cast for two consecutive years;
		¡	failed to act on takeover offers where the majority of the shareholders tendered their shares;
		¡	are inside directors or affiliated outsiders; and sit on the audit, compensation, or nominating committees or the company does not have one of these committees;
		¡	re audit committee members and any of the following has applied and become public information since the last vote, and has not been otherwise corrected or proper controls have not been put in place:


	•	the non-audit fees paid to the auditor are excessive;
	•	a material weakness is identified in the Section 404 Sarbanes-Oxley Act disclosures which rises to a level of serious concern, there are chronic internal control issues and an absence of established effective control mechanisms;
	•	there is persuasive evidence that the audit committee entered into an inappropriate indemnification agreement with its auditor that limits the ability of the company, or its shareholders, to pursue legitimate legal recourse against the audit firm; or
	•	the company receives an adverse opinion on the company’s financial statements from its auditors.
¡	are compensation committee members and any of the following has applied and become public information since the last vote, and has not been otherwise corrected or proper controls have not been put in place:
	•	there is a clearly negative correlation between the chief executive’s pay and company performance under standards adopted in this policy;
	•	the company reprices underwater options for stock, cash or other consideration without prior shareholder approval, even if allowed in their equity plan;
	•	the company fails to submit one-time transfers of stock options to a shareholder vote;
	•	the company fails to fulfill the terms of a burn rate commitment they made to shareholders;
	•	the company has inappropriately backdated options; or
	•	the company has egregious compensation practices including, but not limited to, the following:
		§	egregious employment contracts;
		§	excessive perks/tax reimbursements;
		§	abnormally large bonus payouts without justifiable performance linkage or proper disclosure;
		§	egregious pension/supplemental executive retirement plan (SERP) payouts;
		§	new CEO with overly generous new hire package;
		§	excessive severance and/or change in control provisions; or
		§	dividends or dividend equivalents paid on unvested performance shares or units.
¡	enacted egregious corporate governance policies or failed to replace management as appropriate;
¡	are inside directors or affiliated outside directors; and the full board is less than majority independent;
¡	are CEOs of public companies who serve on more than three public company boards, i.e., more than two public company boards other than their own board (the term “public company” excludes an investment company).Vote should be WITHHELD only at their outside board elections;
¡	serve on more than five public company boards. (The term “public company” excludes an investment company.)


•	WITHHOLD/AGAINST on all incumbents if the board clearly lacks accountability and oversight, coupled with sustained poor performance relative to its peers.
•	Additionally, the following should result in votes being WITHHELD/AGAINST (except from new nominees):
	¡	if the director(s) receive more than 50% withhold votes of votes cast and the issue that was the underlying cause of the high level of withhold votes in the prior election has not been addressed; or
	¡	if the company has adopted or renewed a poison pill without shareholder approval since the company’s last annual meeting, does not put the pill to a vote at the current annual meeting, and there is no requirement to put the pill to shareholder vote within 12 months of its adoption;
		•	if a company that triggers this policy commits to putting its pill to a shareholder vote within 12 months of its adoption, OFI will not recommend a WITHHOLD vote.

2.2	Board Size
•	Vote on a CASE-BY-CASE basis on shareholder proposals to maintain or improve ratio of independent versus non-independent directors.
•	Vote FOR proposals seeking to fix the board size or designate a range for the board size.
•	Vote on a CASE-BY-CASE basis on proposals that give management the ability to alter the size of the board outside of a specified range without shareholder approval.

2.3	Classification/Declassification of the Board
•	Vote AGAINST proposals to classify the board.
•	Vote FOR proposals to repeal classified boards and to elect all directors annually. In addition, if 50% of voting shareholders request repeal of the classified board and the board remains classified, WITHHOLD votes for those directors at the next meeting at which directors are elected, provided however, if the company has majority voting for directors that meets the standards under this policy, WITHHOLD votes only from directors having responsibility to promulgate classification/declassification policies, such as directors serving on the governance committee, nominating committee or either of its equivalent.

2.4	Cumulative Voting
•	Vote FOR proposal to eliminate cumulative voting.
•	Vote on a CASE-BY-CASE basis on cumulative voting proposals at controlled companies (where insider voting power is greater than 50%).

2.5	Require Majority Vote for Approval of Directors

•	OFI will generally vote FOR precatory and binding resolutions requesting that the board change the company’s bylaws to stipulate that directors need to be elected with an affirmative majority of votes cast, provided it does not conflict with state law where the company is incorporated. Binding resolutions need to allow for a carve-out for a plurality vote standard when there are more nominees than board seats.

	Companies are strongly encouraged to also adopt a post-election policy (also known as a director resignation policy) that will provide guidelines so that the company will promptly address the situation of a holdover director.

2.6	Director and Officer Indemnification and Liability Protection
•	Proposals on director and officer indemnification and liability protection should be evaluated on a CASE-BY-CASE basis, using Delaware law as the standard.
•	Vote on a CASE-BY-CASE basis on proposals to eliminate entirely directors’ and officers’ liability for monetary damages for violating the duty of care, provided the liability for gross negligence is not eliminated.
•	Vote on a CASE-BY-CASE basis on indemnification proposals that would expand coverage beyond just legal expenses to acts, such as negligence, that are more serious violations of fiduciary obligation than mere carelessness, provided coverage is not provided for gross negligence acts.
•	Vote on a CASE-BY-CASE basis on proposals to expand the scope of indemnification to provide for mandatory indemnification of company officials in connection with acts that previously the company was permitted to provide indemnification for at the discretion of the company’s board (i.e. “permissive indemnification”) but that previously the company was not required to indemnify.


•	Vote FOR only those proposals providing such expanded coverage in cases when a director’s or officer’s legal defense was unsuccessful if both of the following apply:
	¡	the director was found to have acted in good faith and in a manner that he reasonable believed was in the best interests of the company; and
	¡	only if the director’s legal expenses would be covered.

2.7	Establish/Amend Nominee Qualifications
•	Vote on a CASE-BY-CASE basis on proposals that establish or amend director qualifications.

•	Votes should be based on how reasonable the criteria are and to what degree they may preclude dissident nominees from joining the board.
•	Vote AGAINST shareholder proposals requiring two candidates per board seat.

2.8	Filling Vacancies/Removal of Directors.
•	Vote AGAINST proposals that provide that directors may be removed only for cause.
•	Vote FOR proposals to restore shareholder ability to remove directors with or without cause.
•	Vote AGAINST proposals that provide that only continuing directors may elect replacements to fill board vacancies.
•	Vote FOR proposals that permit shareholders to elect directors to fill board vacancies.

2.9	Independent Chairman (Separate Chairman/CEO)
•	Generally vote FOR shareholder proposals requiring the position of chairman to be filled by an independent director unless there are compelling reasons to recommend against the proposal such as a counterbalancing governance structure. This should include all of the following:
	¡	designated lead director, elected by and from the independent board members with clearly delineated and comprehensive duties;
	¡	two-thirds independent board;
	¡	all-independent key committees;
	¡	established governance guidelines;
	¡	the company should not have underperformed its peers and index on a one-year and three-year basis, unless there has been a change in the Chairman/CEO position within that time (performance will be measured according to shareholder returns against index and peers from the performance summary table);
	¡	the company does not have any problematic governance or management issues, examples of which include, but are not limited to:


				•	egregious compensation practices;
				•	multiple related-party transactions or other issues putting director independence at risk;
				•	corporate and/or management scandal;
				•	excessive problematic corporate governance provisions; or
				•	flagrant actions by management or the board with potential or realized negative impacts on shareholders.


2.10	Majority of Independent Directors/Establishment of Committees
•	Vote FOR shareholder proposals asking that a majority of directors be independent but vote CASE-BY-CASE on proposals that more than a majority of directors be independent. NYSE and NASDAQ already require that listed companies have a majority of independent directors.
•	Vote FOR shareholder proposals asking that board audit, compensation, and/or nominating committees be composed exclusively of independent directors if they currently do not meet that standard.
•	For purposes of Special Purpose Acquisition Corporations (SPAC), when a former CEO of a SPAC company serves on the board of an acquired company, that director will generally be classified as independent unless determined otherwise taking into account the following factors:
	¡	the applicable listing standards determination of such director’s independence;
	¡	any operating ties to the firm; and
	¡	if there are any other conflicting relationships or related party transactions.
•	A director who is a party to an agreement to vote in line with management on proposals being brought to a shareholder vote shall be classified as an affiliated outside director. However, when dissident directors are parties to a voting agreement pursuant to a settlement arrangement, such directors shall be classified as independent unless determined otherwise taking into account the following factors:


		¡	the terms of the agreement;
		¡	the duration of the standstill provision in the agreement;
		¡	the limitations and requirements of actions that are agreed upon;
		¡	if the dissident director nominee(s) is subject to the standstill; and
		¡	if there are any conflicting relationships or related party transactions.

	2.11	Open Access
	•	Vote CASE-BY-CASE on shareholder proposals asking for open access taking into account the ownership threshold specified in the proposal and the proponent’s rationale for targeting the company in terms of board and director conduct.

	2.12	Stock Ownership Requirements
	•	Vote on a CASE-BY-CASE basis on shareholder proposals that mandate a minimum amount of stock that a director must own in order to qualify as a director or to remain on the board. While stock ownership on the part of directors is favored, the company should determine the appropriate ownership requirement.
	•	Vote on a CASE-BY-CASE basis on shareholder proposals asking companies to adopt holding periods or retention ratios for their executives, taking into account:
		¡	whether the company has any holding period, retention ratio or officer ownership requirements in place. These should consist of rigorous stock ownership guidelines or short-term holding period requirement (six months to one year) coupled with a significant long-term ownership requirement or a meaningful retention ratio.
		¡	Actual officer stock ownership and the degree to which it meets or exceeds the proponent’s suggested holding period/retention ratio or the company’s own stock ownership or retention requirements.

	2.13	Age or Term Limits
	•	Vote AGAINST shareholder or management proposals to limit the tenure of directors either through term limits or mandatory retirement ages. OFI views as management decision.

3.0	PROXY CONTESTS

	3.1	Voting for Director Nominees in Contested Elections
	•	Votes in a contested election of directors must be evaluated on a CASE-BY-CASE basis considering the following factors:
		¡	long-term financial performance of the target company relative to its industry;
		¡	management’s track record;
		¡	background to the proxy contest;
		¡	qualifications of director nominees (both slates);
		¡	evaluation of what each side is offering shareholders as well as the likelihood that the proposed objectives and goals can be met; and
		¡	stock ownership position.

	3.2	Reimbursing Proxy Solicitation Expenses
	•	Voting to reimburse proxy solicitation expenses should be analyzed on a CASE-BY-CASE basis. In cases, which OFI recommends in favor of the dissidents, OFI also recommends voting for reimbursing proxy solicitation expenses.

	3.3	Confidential Voting
	•	Vote on a CASE-BY-CASE basis on shareholder proposals requesting that corporations adopt confidential voting, use independent vote tabulators and use independent inspectors of election.

4.0	ANTITAKEOVER DEFENSES AND VOTING RELATED ISSUES

	4.1	Advance Notice Requirements for Shareholder Proposals/Nominations.
	•	Votes on advance notice proposals are determined on a CASE-BY-CASE basis, generally giving support to those proposals which allow shareholders to submit proposals as close to the meeting date as reasonably possible and within the broadest window possible.


4.2	Amend Bylaws without Shareholder Consent
•	Vote AGAINST proposals giving the board exclusive authority to amend the bylaws.
•	Vote FOR proposals giving the board the ability to amend the bylaws in addition to shareholders.

4.3	Poison Pills
•	Vote AGAINST proposals that increase authorized common stock for the explicit purpose of implementing a shareholder rights plan (poison pill).
•	Vote FOR shareholder proposals requesting that the company submit its poison pill to a shareholder vote or redeem it.
•	Vote FOR shareholder proposals asking that any future pill be put to a shareholder vote.
•	Votes regarding management proposals to ratify a poison pill should be determined on a CASE-BY-CASE basis. Ideally, plans should embody the following attributes:
	¡	20% or higher flip-in or flip-over;
	¡	two to three-year sunset provision;
	¡	no dead-hand, slow-hand, no-hand or similar features;
	¡	shareholder redemption feature-if the board refuses to redeem the pill 90 days after an offer is announced, ten percent of the shares may call a special meeting or seek a written consent to vote on rescinding the pill;
	¡	considerations of the company’s existing governance structure including: board independence, existing takeover defenses, and any problematic governance concerns;
	¡	for management proposals to adopt a poison pill for the stated purpose of preserving a company’s net operating losses (“NOL pills”), the following factors will be considered:


				•	the trigger (NOL pills generally have a trigger slightly below 5%);
				•	the value of the NOLs;
				•	the term;
				•	shareholder protection mechanisms (sunset provision, causing expiration of the pill upon exhaustion or expiration of NOLs); and
				•	other factors that may be applicable.


	4.4	Shareholder Ability to Act by Written Consent
	•	Vote AGAINST proposals to restrict or prohibit shareholder ability to take action by written consent.
	•	Vote FOR proposals to allow or make easier shareholder action by written consent.

	4.5	Shareholder Ability to Call Special Meetings
	•	Vote AGAINST proposals to restrict or prohibit shareholder ability to call special meetings.
	•	Vote FOR proposals that remove restrictions on the right of shareholders to act independently of management.

	4.6	Establish Shareholder Advisory Committee
	•	Vote on a CASE-BY-CASE basis.

	4.7	Supermajority Vote Requirements
	•	Vote AGAINST proposals to require a supermajority shareholder vote.
	•	Vote FOR proposals to lower supermajority vote requirements.

5.0	MERGERS AND CORPORATE RESTRUCTURINGS

	5.1	Appraisal Rights
	•	Vote FOR proposals to restore, or provide shareholders with, rights of appraisal.

	5.2	Asset Purchases
	•	Vote CASE-BY-CASE on asset purchase proposals, considering the following factors:


	¡	purchase price;
	¡	fairness opinion;
	¡	financial and strategic benefits;
	¡	how the deal was negotiated;
	¡	conflicts of interest;
	¡	other alternatives for the business; and
	¡	non-completion risk.

5.3	Asset Sales
•	Vote CASE-BY-CASE on asset sale proposals, considering the following factors:
	¡	impact on the balance sheet/working capital;
	¡	potential elimination of diseconomies;
	¡	anticipated financial and operating benefits;
	¡	anticipated use of funds;
	¡	value received for the asset;
	¡	fairness opinion;
	¡	how the deal was negotiated; and
	¡	conflicts of interest.

5.4	Bundled Proposals
•	Review on a CASE-BY-CASE basis on bundled or “conditioned” proxy proposals. In the case of items that are conditioned upon each other, examine the benefits and costs of the packaged items. In instances when the joint effect of the conditioned items is not in shareholders’ best interests, vote against the proposals. If the combined effect is positive, support such proposals.

5.5	Conversion of Securities
•	Votes on proposals regarding conversion of securities are determined on a CASE-BY-CASE basis. When evaluating these proposals, the investor should review the dilution to existing shareholders, the conversion price relative to the market value, financial issues, control issues, termination penalties, and conflicts of interest.
•	Vote FOR the conversion if it is expected that the company will be subject to onerous penalties or will be forced to file for bankruptcy if the transaction is not approved.

5.6	Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged Buyouts/Wrap Plans
•	Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a CASE-BY-CASE basis, taking into consideration the following:
	¡	dilution to existing shareholders’ position;
	¡	terms of the offer;
	¡	financial issues;
	¡	management’s efforts to pursue other alternatives;
	¡	control issues; and
	¡	conflicts of interest.

•	Vote FOR the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved.

5.7	Formation of Holding Company
•	Votes on proposals regarding the formation of a holding company should be determined on a CASE-BY-CASE basis, taking into consideration the following:
	¡	the reasons for the change;
	¡	any financial or tax benefits;
	¡	regulatory benefits;
	¡	increases in capital structure; and
	¡	changes to the articles of incorporation or bylaws of the company.


•	Absent compelling financial reasons to recommend the transaction, vote AGAINST the formation of a holding company if the transaction would include either of the following:
	¡	increases in common or preferred stock in excess of the allowable maximum as calculated by the RMG Capital Structure Model; and/or
	¡	adverse changes in shareholder rights.

5.8	Going Private Transactions (LBOs, Minority Squeezeouts) and Going Dark Transactions
•	Vote on going private transactions on a CASE-BY-CASE basis, taking into account the following:
	¡	offer price/premium;
	¡	fairness opinion;
	¡	how the deal was negotiated;
	¡	conflicts of interests;
	¡	other alternatives/offers considered; and
	¡	non-completion risk.
•	Vote CASE-BY-CASE on going dark transactions, determining whether the transaction enhances shareholder value by taking into consideration:
	¡	whether the company has attained benefits from being publicly-traded (examination of trading volume, liquidity, and market research of the stock);
	¡	cash-out value;
	¡	whether the interests of continuing and cashed-out shareholders are balanced; and
	¡	the market reaction to public announcement of the transaction.

5.9	Joint Venture
•	Votes on a CASE-BY-CASE basis on proposals to form joint ventures, taking into account the following:
	¡	percentage of assets/business contributed;
	¡	percentage of ownership;
	¡	financial and strategic benefits;
	¡	governance structure;
	¡	conflicts of interest;
	¡	other alternatives; and
	¡	non-completion risk.

5.10	Liquidations
•	Votes on liquidations should be made on a CASE-BY-CASE basis after reviewing management’s efforts to pursue other alternatives, appraisal value of assets, and the compensation plan for executives managing the liquidation.
•	Vote FOR the liquidation if the company will file for bankruptcy if the proposal is not approved.

5.11	Mergers and Acquisitions/Issuance of Shares to Facilitate Merger or Acquisition
•	Votes on mergers and acquisitions should be considered on a CASE-BY-CASE basis, determining whether the transaction enhances shareholder value by giving consideration to the following:
	¡	prospects of the combined company anticipated financial and operating benefits;
	¡	offer price (premium or discount);
	¡	fairness opinion;
	¡	how the deal was negotiated;
	¡	changes in corporate governance;
	¡	changes in the capital structure; and
	¡	conflicts of interest.

5.12	Private Placements/Warrants/Convertible Debenture
•	Votes on proposals regarding private placements should be determined on a CASE-BY-CASE basis. When evaluating these proposals the invest should review:
	¡	dilution to existing shareholders’ position;
	¡	terms of the offer;
	¡	financial issues;
	¡	management’s efforts to pursue other alternatives;


		¡	control issues; and
		¡	conflicts of interest.
	•	Vote FOR the private placement if it is expected that the company will file for bankruptcy if the transaction is not approved.

	5.13	Spinoffs
	•	Votes on spinoffs should be considered on a CASE-BY-CASE basis depending on:
		¡	tax and regulatory advantages;
		¡	planned use of the sale proceeds;
		¡	valuation of spinoff;
		¡	fairness opinion;
		¡	benefits to the parent company;
		¡	conflicts of interest;
		¡	managerial incentives;
		¡	corporate governance changes; and
		¡	changes in the capital structure.

	5.14	Value Maximization Proposals
	•	Votes on a CASE-BY-CASE basis on shareholder proposals seeking to maximize shareholder value by hiring a financial advisor to explore strategic alternatives, selling the company or liquidating the company and distributing the proceeds to shareholders. These proposals should be evaluated based on the following factors: prolonged poor performance with no turnaround in sight, signs of entrenched board and management, strategic plan in place for improving value, likelihood of receiving reasonable value in a sale or dissolution and whether the company is actively exploring its strategic options, including retaining a financial advisor.

	5.15	Severance Agreements that are Operative in Event of Change in Control
	•	Review CASE-BY-CASE, with consideration give to RMG “transfer-of-wealth” analysis. (See section 8.2).

	5.16	Special Purpose Acquisition Corporations (SPACs)
	•	Vote on mergers and acquisitions involving SPAC will be voted on a CASE-BY-CASE using a model developed by RMG which takes in consideration:
		¡	valuation;
		¡	market reaction;
		¡	deal timing;
		¡	negotiations and process;
		¡	conflicts of interest;
		¡	voting agreements; and
		¡	governance.

6.0	STATE OF INCORPORATION

	6.1	Control Share Acquisition Provisions
	•	Vote FOR proposals to opt out of control share acquisition statutes unless doing so would enable the completion of a takeover that would be detrimental to shareholders.
	•	Vote AGAINST proposals to amend the charter to include control share acquisition provisions.
	•	Vote FOR proposals to restore voting rights to the control shares.

	6.2	Control Share Cashout Provisions
	•	Vote FOR proposals to opt out of control share cashout statutes.

	6.3	Disgorgement Provisions
	•	Vote FOR proposals to opt out of state disgorgement provisions.

	6.4	Fair Price Provisions