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The European Smaller Companies Portfolio seeks to achieve capital appreciation by investing principally in the equity securities of European Smaller Companies (excluding the United Kingdom). For this Portfolio, European Smaller Companies are companies that are not represented in the top 225 companies in the FTSE World Europe (ex UK) Index at the time of purchase. The Portfolio may use financial derivative instruments for hedging purposes. The Sub-Advisor considers the EMIX Smaller European Companies Ex UK Index as providing an appropriate performance measure of small to medium-sized companies within Europe's developed markets. It provides a helpful benchmark against which Portfolio performance can be evaluated over time.