Risks Associated with
Emerging and Frontier Markets: Many Asian countries are considered emerging and/or frontier markets. Such markets are often less stable
politically and economically than developed markets such as the U.S., and investing in these markets involves different and greater risks due to, among other factors, different accounting
standards; variable quality and reliability of financial information and related audits of
companies; higher brokerage costs and thinner trading markets as compared to those in
developed countries; the possibility of currency transfer restrictions; and the risk of expropriation, nationalization or other adverse political, economic or social developments. There may be less
publicly available information about companies in many Asian countries, and the stock
exchanges and brokerage industries in many Asian countries typically do not have the
level of government oversight as do those in the U.S. Securities markets of many Asian countries are also substantially smaller, less liquid and more volatile than securities markets in the U.S.
Additionally, investors may have substantial difficulties bringing legal actions to enforce or protect investors’ rights, which can increase the risks of loss. Frontier markets, a subset of emerging
markets, generally have smaller economies and even less mature capital markets than emerging markets. As a result, the risks of investing in emerging market countries are magnified in frontier
market countries. Frontier markets are more susceptible to having abrupt changes in
currency values, less mature markets and settlement practices, and lower trading volumes,
which could lead to greater price volatility and illiquidity.
Growth Stock Risk: Growth stocks may be more volatile than other stocks because they are more sensitive to investor
perceptions of the issuing company’s growth potential. Growth stocks may go in and
out of favor over time and may perform differently than the market as a whole.
Equity Securities Risk: Equity securities may include common stock, preferred stock or other securities representing an
ownership interest or the right to acquire an ownership interest in an issuer. Equity
risk is the risk that stocks and other equity securities generally fluctuate in value more than bonds and may decline in value over short or extended periods. The value of stocks and other equity securities may
be affected by changes in an issuer’s financial condition, factors that affect a particular industry or industries, or as a result of changes in overall market, economic and political conditions
that are not specifically related to a company or industry.
Preferred Stock Risk: Preferred stock normally pays dividends at a specified rate and has precedence over common stock in
the event the issuer is liquidated or declares bankruptcy. However, in the event a
company is liquidated or declares bankruptcy, the claims of owners of bonds take precedence over the claims of those who own preferred and common stock. If interest rates rise, the dividend on preferred stocks may be less
attractive, causing the price of such stocks to decline.
Depositary Receipts Risk:
Although depositary receipts have risks similar to the securities that they represent,
they may also involve higher expenses and may trade at a discount (or premium) to the
underlying security. In addition, depositary receipts may not pass through voting and
other shareholder rights, and may be less liquid than the underlying securities listed on an exchange.
Volatility Risk: The smaller size and lower levels of liquidity in emerging markets, as well as other factors, may result in changes in the prices of Asian securities
that are more volatile than those of companies in more developed regions. This volatility can cause
the price of the Fund’s shares to
go up or down dramatically. Because of this volatility, this Fund is better suited for long-term investors. If the value of the Fund’s investments declines, the net asset value of the Fund will
decline and investors may lose some or all of the value of their investments.
Risks Associated with Medium-Size Companies: Medium-size companies may be subject to a number of risks not associated with larger, more established companies,
potentially making their stock prices more volatile and increasing the risk of loss.
Country Concentration Risk: The Fund may invest a significant portion of its assets in the securities of issuers located in a single country. An investment in the
Fund therefore may entail greater risk than an investment in a fund that does not concentrate its investments in a single or small number of countries because these securities may be more sensitive to
adverse social, political, economic or regulatory developments affecting that country or
countries. As a result, events affecting a single or small number of countries may have a
significant and potentially adverse impact on the Fund’s investments, and the Fund’s performance may be more volatile than that of funds that invest globally. The Fund has concentrated or may
concentrate its investments in China, Taiwan and India.
Risks Associated with China and Hong Kong: The Chinese government exercises significant control over China’s economy through its industrial policies,
monetary policy, management of currency exchange rates, and management of the payment of
foreign currency-denominated obligations. Changes in these policies could adversely
impact affected industries or companies in China. As its consumer class continues to grow, China’s domestically oriented industries may be especially sensitive to changes in government policy and
investment cycles. The Chinese government has been accused of state-sponsored
cyberattacks against foreign governments and companies, and responses to such activity,
including sanctions, tariffs or cyberattacks on the Chinese government or Chinese companies, may negatively
affect China’s economy and Chinese securities issuers. In
addition, the current political climate has intensified concerns about trade tariffs or
trade disputes with China’s major trading partners, including a potential trade war between the U.S. and China. These consequences may trigger a significant reduction in international trade, shortages or
oversupply of certain manufactured goods, substantial price increases or decreases of goods, inflationary pressures, and possible failure of individual companies and/or large segments of the
foreign export industry in China with a potentially negative impact on the
Fund’s investments. As demonstrated by Hong Kong protests in recent years over political, economic, and legal freedoms,
and the Chinese government’s response to them, considerable political uncertainty
continues to exist within Hong Kong. Due to the interconnected nature of the Hong Kong and Chinese economies, this instability in Hong Kong may cause uncertainty in the Hong Kong and Chinese markets. If China
were to exert its authority so as to alter the economic, political or legal structures or the existing social policy of Hong Kong, investor and business confidence in Hong Kong could be negatively
affected and have an adverse effect on the Fund’s investments.
Risks Associated with Taiwan.
The political reunification of China and Taiwan, over which China continues to claim
sovereignty, is a highly complex issue and is unlikely to be settled in the near future.
Although the relationship between China and Taiwan has been improving, there is the potential for future political or economic disturbances that may have an adverse impact on the values of investments in
either China or Taiwan, or
