Investing in emerging markets — Investing in emerging markets may involve risks in addition to and greater than those generally associated with investing in the securities markets of developed countries. For instance,
emerging market countries tend to have less developed political, economic and legal systems than those in developed countries.
Accordingly, the governments of these countries may be less stable and more likely to intervene in the market economy, for example,
by imposing capital controls, nationalizing a company or industry, placing restrictions on foreign ownership and on withdrawing
sale proceeds of securities from the country, and/or imposing punitive taxes that could adversely affect the prices of securities. Information
regarding issuers in emerging markets may be limited, incomplete or inaccurate, and such issuers may not be subject to regulatory,
accounting, auditing, and financial reporting and recordkeeping standards comparable to those to which issuers in more developed markets are subject. The fund’s rights with respect to its investments in emerging markets, if any, will generally be governed by local law,
which may make it difficult or impossible for the fund to pursue legal remedies or to obtain and enforce judgments in local courts. In addition,
the economies of these countries may be dependent on relatively few industries, may have limited access to capital and may
be more susceptible to changes in local and global trade conditions and downturns in the world economy. Securities markets in these countries
can also be relatively small and have substantially lower trading volumes. As a result, securities issued in these countries
may be more volatile and less liquid, more vulnerable to market manipulation, and more difficult to value, than securities issued in countries
with more developed economies and/or markets. Less certainty with respect to security valuations may lead to additional challenges and risks in calculating the fund’s net asset value. Additionally, emerging markets are more likely to experience problems with the clearing
and settling of trades and the holding of securities by banks, agents and depositories that are less established than those
in developed countries.
Investing in small companies — Investing in smaller companies may pose additional risks. For example, it is often more difficult to value or dispose of small company stocks and more difficult to obtain information about smaller
companies than about larger companies. Furthermore, smaller companies often have limited product lines, operating histories,
markets and/or financial resources, may be dependent on one or a few key persons for management, and can be more susceptible
to losses. Moreover, the prices of their stocks may be more volatile than stocks of larger, more established companies, particularly during
times of market turmoil.
Exposure to country, region, industry or sector — Subject to the fund’s investment limitations, the fund may have significant exposure to a particular country, region, industry or sector. Such exposure may cause the fund to
be more impacted by risks relating to and developments affecting the country, region, industry or sector, and thus its net asset
value may be more volatile, than a fund without such levels of exposure. For example, if the fund has significant exposure in a particular
country, then social, economic, regulatory or other issues that negatively affect that country may have a greater impact on the fund than
on a fund that is more geographically diversified.
Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses, including models, tools and data, employed by the investment
adviser in this process may be flawed or incorrect and may not produce the desired results. This could cause the fund to lose
value or its investment results to lag relevant benchmarks or other funds with similar objectives.
5. Certain investment techniques
Securities lending — The fund has entered into securities lending transactions in which the fund earns income by lending investment securities to brokers, dealers or other institutions. Each transaction involves three
parties: the fund, acting as the lender of the securities, a borrower, and a lending agent that acts as an intermediary.
Securities lending transactions are entered into by the fund under a securities lending
agent agreement with the lending agent. The lending agent facilitates the exchange of securities between the fund and approved
borrowers, ensures that securities loans are properly coordinated and documented, marks-to-market the value of collateral daily, secures
additional collateral from a borrower if it falls below preset terms, and may reinvest cash collateral on behalf of the fund according to
agreed parameters. The lending agent provides indemnification to the fund against losses resulting from a borrower default. Although
risk is mitigated by the collateral and indemnification, the fund could experience a delay in recovering its securities and a potential loss
of income or value if a borrower fails to return securities, collateral investments decline in value or the lending agent fails to
perform.
The borrower is required to post highly liquid assets, such as cash or U.S. government
securities, as collateral for the loan in an amount at least equal to the value of the securities loaned. Investments made with cash collateral are recognized as assets in the fund’s investment portfolio. The same amount is recorded as a liability in the fund’s statement of assets and liabilities. While securities are on loan, the fund will continue to receive the equivalent of the interest, dividends or other distributions
paid by the issuer, as well as a portion of the interest on the investment of the collateral. Additionally, although the fund does not have
the right to vote on securities while they are on loan, the fund has a right to consent on corporate actions and a right to recall loaned securities
to vote. A borrower is obligated to return loaned securities at the conclusion of a loan or, during the pendency of a loan, on demand
from the fund.
