During the most
recent fiscal year, the Fund’s portfolio turnover rate was 25% of the average value of its portfolio.
Principal Investment Strategies of the Fund
The Fund pursues long-term capital appreciation by investing, under normal circumstances, at least 80% of
net assets in the common stocks of large- and mid-cap blue chip growth companies. Generally, large- and
mid-cap stocks will include companies whose market capitalizations, at the time of purchase, are greater than
or equal to the smallest company included in the Russell Midcap® Index. As of May 31, 2022, the market capitalization range of the companies in the Russell Midcap® Index was approximately $195.13 million to $67.80 billion.
Blue chip growth
companies are firms that, in the Subadviser’s view, are well-established in their industries and have the
potential for above-average earnings growth, which may include companies in the information technology
sector.
In order to generate additional income, the Fund may lend portfolio securities to broker-dealers and other financial institutions provided that the value of the loaned securities
does not exceed 30% of the Fund’s total assets. These loans earn income for the Fund and are
collateralized by cash and securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. Investors will be given at least 60 days’ written notice in advance of any change to
the Fund’s 80% investment policy set forth above.
Principal Risks of Investing in the Fund
As with any mutual fund, there can be no assurance that the Fund’s investment objective will be met or
that the net return on an investment in the Fund will exceed what could have been obtained through other
investment or savings vehicles. Shares of the Fund are not bank deposits and are not guaranteed or insured by any bank, government entity or the Federal Deposit Insurance Corporation. If the value of the assets of the Fund goes down, you could lose money.
The following is a summary of
the principal risks of investing in the Fund.
Management Risk.
The investment style or strategy used by the subadviser may fail to produce the intended result. The
subadviser’s assessment of a particular security or company may prove incorrect, resulting in losses or
underperformance.
Dividend-paying Stocks Risk. There is no guarantee that the issuers of the stocks held by the Fund will declare
dividends in the future or that, if dividends are declared, they will remain at their current levels or increase over time. Dividend-paying stocks may not participate in a broad market advance to the same degree as other stocks, and a sharp rise in interest rates or economic downturn could cause a company to unexpectedly reduce or eliminate its dividend.
Equity Securities Risk. The Fund invests principally in equity securities and is therefore subject to the risk that stock prices will fall and may underperform other asset classes. Individual stock prices fluctuate from day-to-day and may decline significantly. The prices of individual stocks may be negatively affected by poor company results or other factors affecting individual prices, as well as industry and/or economic trends and developments affecting industries or the securities market as a whole.
Growth Style Risk. Generally, “growth” stocks are stocks of companies that a subadviser believes have anticipated earnings ranging from steady to accelerated growth. Many investors buy growth stocks because of anticipated superior earnings growth, but earnings disappointments often result in sharp price declines. Growth companies usually invest a high portion of earnings in their own businesses so their stocks may lack the dividends that can cushion share prices in a down market. In addition, the value of growth stocks may be more sensitive to changes in current or expected earnings than the value of other stocks, because growth stocks trade at higher prices relative to current earnings.
Large- and Mid-Cap Company Risk. Investing in large- and mid-cap companies carries the risk that due to current market conditions these companies may be out of favor with investors. Large-cap companies may be unable to respond quickly to new competitive challenges or attain the high growth rate of successful smaller companies. Stocks of mid-cap companies may be more volatile than those of larger companies due to, among other reasons, narrower product lines, more limited financial resources and fewer experienced managers.
Market Risk. The
Fund’s share price can fall because of weakness in the broad market, a particular industry, or specific
holdings or due to adverse political or economic developments here or abroad, changes in investor psychology,
or heavy institutional selling and other conditions or events (including, for example, military confrontations,
war, terrorism, disease/virus, outbreaks and epidemics). The prices of individual securities may fluctuate,
sometimes dramatically, from day to day. The prices of stocks and other equity securities tend to be more
volatile than those of fixed-income securities.