Risks of Common Stocks

General stock market movements will affect the prices of the Fund’s common stock investments and thus, the Fund’s share price, on a daily basis. Significant declines are possible both in the overall stock market and in the prices of specific securities held by the Fund.

The values of common stocks may fluctuate significantly, reflecting among other things, the business performance of the issuing company, political events, Federal Reserve policy decisions, or general economic conditions. The value of an individual stock may be impacted by conditions that are not specifically related to the particular company, such as investor perceptions of the company or its industry, a lack of confidence, or real or perceived adverse market or political conditions. Investor perceptions may be based on various unpredictable factors, including expectations regarding government, economic or fiscal policies, inflation, economic expansion and global or regional political or economic expectations. Local, regional or global events such as conflicts and war, acts of terrorism, government defaults or shutdowns, natural or environmental disasters, public health emergencies, recessions, trade disputes, tariffs, sanctions, retaliatory measures, or other economic, political or market developments, could also have a significant adverse impact on the Fund and the value of its investments.

The financial markets continue to experience periods of volatility driven by geopolitical tensions, evolving economic conditions, and fiscal uncertainties, including elevated government debt levels and budget negotiations. Inflation remains elevated in certain sectors, increasing concerns about slowing growth, and contributing to uncertainty about the pace, timing and ultimate trajectory of the Federal Reserve’s monetary policy. Trade policy developments, including expanded U.S. tariffs and the risk of retaliatory measures, have contributed to higher input costs, supply chain disruptions, and pressure on companies with export exposure or reliance on cross border inputs. Strategic competition between the U.S. and China continues to influence global trade policy and investor sentiment, while broader geopolitical developments, economic instability, and volatility in energy and commodity markets, present continuing challenges to economic stability. In addition, rapid technological and structural changes, including significant investments in artificial intelligence and automation, have contributed to market concentration and uncertainty about corporate earnings, labor market trends, and broader economic impacts. These and other events that may arise in the future could exacerbate pre-existing political, social, and economic risks in ways that cannot be predicted. The value of the Fund’s holdings is also generally subject to the risk of future local, national, or global economic disturbances based upon unknown weaknesses in the markets in which the Fund invests.

Market Capitalization and Sector Risks

The Fund may invest a portion of its assets in the stocks of companies having smaller market capitalizations, including mid-cap and small-cap stocks. The stocks of these companies often have less liquidity than the stocks of larger companies and these companies frequently have less management depth, narrower market penetrations, less diverse product lines, and fewer resources than larger companies. Due to these and other factors, stocks of smaller companies may be more susceptible to market downturns and other events, and their prices may be more volatile than stock prices of larger companies. To the extent the Fund invests in larger companies, the Fund may be affected by the risk that large-cap companies may be unable to respond quickly to competitive challenges, changes in technology or other market developments, and may experience slower growth rates than smaller companies during certain market environments.

From time to time the Fund may maintain weightings in particular business sectors that deviate significantly from the sector weightings in broad-based market indices. If the Fund emphasizes investment in one or more particular business sectors, it will be more susceptible to financial, market or economic events generally affecting issuers and industries within those sectors than would be for funds that do not emphasize investment in particular sectors. Certain factors may affect a particular industry or industries, such as labor shortages, increased production costs, supply chain disruptions, or competitive conditions within an industry. This may increase the risk of loss associated with an

investment in the Fund and the Fund’s share price volatility. As of June 30, 2026, the Fund had 26.3% of the value of its net assets invested in stocks within the Health Care sector. Companies in the Health Care sector may be adversely affected by government regulation, reimbursement policies, product approval requirements, patent expirations, litigation, and rapid technological or scientific developments.

Hedging and Derivatives Risks

The Fund may hedge its investment exposure to stocks by purchasing put options on stock indices; by writing covered call options on stocks which the Fund owns; by writing call options on stock indices; or by establishing short futures positions or option combinations (such as simultaneously writing call options and purchasing put options) on one or more stock indices considered by the investment adviser to be correlated with the Fund’s portfolio of common stocks. To the extent the Fund hedges its investment positions as part of its investment program, the Fund may hold a significant amount of cash proceeds resulting from call options written, and its investment performance may deviate significantly from the performance of a passive investment portfolio of stocks for substantial portions of a market cycle. When market conditions are unfavorable in the view of the investment adviser and the Fund’s holdings are hedged, the Fund may not benefit from general advances in the stock market to the same extent as if the Fund was not hedged. The Fund may experience a loss even when the entire value of its stock portfolio is hedged if the returns of the stocks held by the Fund do not exceed the returns of the securities and financial instruments used to hedge, or if the exercise prices of the Fund’s call and put options differ, so that the combined loss on these options during a market advance exceeds the gain on the underlying stock index.

Alternatively, if the Fund has leveraged a portion of the exposure of its portfolio in a climate that has historically been favorable for stocks and stock prices decline, the Fund may experience investment losses that are greater than if the Fund had not leveraged its exposure. When the Fund is in its most aggressive position, the share price of the Fund could be expected to fluctuate as much as 1½ times more than it would if the Fund had not leveraged its exposure to stocks. The Fund’s hedging strategy may also result in the

investment performance of the Fund having limited correlation with the performance of the general stock market for meaningful periods of time, including periods of sustained advances in the stock market.

The derivatives used by the Fund are subject to specific risks. When the Fund hedges by purchasing put options on stock indices, the Fund may incur a net loss of time value on the purchased options. When the Fund hedges by writing covered call options on stocks which the Fund owns, the Fund may not benefit from price advances in those stocks to the same extent that it would if the Fund had not employed hedging. When the Fund hedges its portfolio using short stock index futures or option combinations (such as simultaneously writing stock index call options and purchasing stock index put options), the Fund may incur a loss even when its portfolio is hedged if the returns on its positions in stocks do not exceed the returns of the securities and financial instruments used to hedge. This is known as “tracking risk” (or alternatively, “basis risk”).

The Fund does not invest solely in the securities that are included in any index or invest in business sectors in the same proportion as such sectors may be represented in any index. For this reason, the hedging strategies used by the Fund do not eliminate market risk or provide complete protection against adverse changes in the prices of individual securities or securities within particular business sectors. When options are owned by the Fund, it is possible that they may lose value over time, even if the prices of the securities underlying the options are unchanged.

Portfolio Management Risks

The success of the Fund’s investment program depends largely on the investment adviser’s skill in assessing the potential returns of the Fund’s investments and use of hedging strategies and fixed-income alternatives that may not be employed by many

other mutual funds. There is no assurance that these strategies will be successful. The use of strategies to vary the Fund’s exposure to general market fluctuations over the course of the market cycle may adversely impact the Fund’s investment performance and may result in a high degree of portfolio turnover and higher transaction costs for the Fund. Also, because the Fund’s investment position at any given time will vary depending on the investment adviser’s assessment of the current conditions within the fixed-income securities market, the Fund’s share price and investment return may fluctuate or deviate more significantly from overall market returns than funds that do not employ similar strategies. For example, if the Fund has taken a defensive investment posture by shortening the average maturity of its portfolio and interest rates decline, the return to investors in the Fund will be lower than if the portfolio had maintained a longer average maturity. Alternatively, if the Fund has increased the average maturity of its portfolio, the Fund will experience a larger loss if there is an increase in interest rates.

Risks of Fixed-Income Securities

General interest rate movements will affect the prices of the Fund’s fixed-income investments and thus, the Fund’s share price, on a daily basis. Significant declines are possible in both the prices of fixed-income securities generally and in the prices of the specific securities held by the Fund.

Interest rate changes can be sudden and unpredictable and a wide variety of factors can cause interest rates to change, such as central bank monetary policies, inflation rates, supply and demand, and general economic conditions. When interest rates rise, the value of the fixed-income securities held by the Fund is likely to decline. Such price declines will be proportionally greater when the Fund emphasizes securities with longer maturities, since they are more sensitive to changes in interest rates than fixed-income securities with shorter maturities. It is difficult to accurately predict the direction of interest rates.

The Fund could lose money if the issuer of a fixed-income security held by the Fund fails to make its scheduled payments of principal or interest, or if the credit rating of the issuer is downgraded. If a security’s rating is downgraded, the Fund is not required to sell the security. Corporate debt generally has the greatest degree of credit risk among the fixed-income securities in which the Fund may invest. When a debt security is rated below investment-grade (a so-called “junk” bond), it may be more difficult for the Fund to sell the security at a price approximating its market value, and there is greater risk of default in the payment of interest and principal.

Due to the long duration of U.S. Treasury STRIPS, these securities are highly sensitive to interest rate fluctuations. The Fund’s ownership of these securities in a period of rising interest rates could cause a greater decline in the value of the Fund’s share price than if the Fund held coupon-bearing securities of a similar maturity. In addition, even though U.S. Treasury STRIPS do not pay current income in cash, the Fund will be required to recognize interest income from these securities over the life of the investments and to distribute this income on a current basis, which may be taxable to shareholders.

Some fixed-income securities give the issuer the option to call, or redeem, those securities before their maturity dates. If an issuer calls a security during a period of declining interest rates, the Fund may not fully benefit from any increase in the value of the security, and may have to reinvest the proceeds in a security with a lower yield.

Monetary Policy and Political Risk

In response to the global financial crisis that began in 2008, and subsequent periods of economic and financial stress, the U.S. Government and the Federal Reserve Board implemented a variety of measures designed to support economic activity and financial market functioning, including maintaining historically low short-term interest rates and purchasing large quantities of U.S. Government securities (commonly referred to as quantitative easing). In response to rising inflation, the Federal Reserve subsequently increased interest rates and reduced the size of its balance sheet through the sale or runoff of U.S. Government securities (commonly referred to as quantitative tightening). The timing and extent of changes in monetary policy may be affected by economic and market conditions, including inflation, employment levels, and economic growth. There is a risk that future actions by the U.S. Government to stimulate economic growth, control inflation, or promote financial market stability, including increases or decreases in short-term interest rates, or changes in its holdings of U.S. Government securities, could result in increased market volatility, reduced liquidity and decreases in the value of the securities held by the Fund. In addition, concerns about the federal budget deficit, the growing level of U.S. Government debt, and the long-term sustainability of U.S. fiscal policy, along with political disputes involving government fundings and appropriations, taxation, and other fiscal policy matters, could adversely affect the financial markets and the value of the securities held by the Fund.

Portfolio Management Risks

The success of the Fund’s investment program depends largely on the investment adviser’s skill in assessing the potential returns of the Fund’s investments and determining the allocation of the Fund’s assets among stocks, bonds and cash equivalents. It also depends on the investment adviser’s use of hedging strategies that may not be employed by many other mutual funds. There is no assurance that these strategies will be successful. The use of hedging strategies to vary the Fund’s exposure to general market fluctuations over the course of the market cycle may significantly reduce or eliminate the Fund’s participation in rising equity markets and adversely impact the investment performance of the Fund. Also, because the Fund’s investment position at any given time will vary depending on the investment adviser’s assessment of current conditions in the stock and bond markets, the Fund may substantially underperform the broad equity market indices if the Adviser’s market outlook is incorrect or its hedging positions are maintained during extended market advances. The Fund’s share price and investment return may fluctuate or deviate more significantly from overall market returns than funds that do not employ similar strategies. For example, if the Fund has taken a defensive posture by hedging its positions to reduce the sensitivity of its portfolio to stock or bond market fluctuations, and the market advances, the return to investors in the Fund will be lower than if the portfolio had maintained a larger exposure to the market. Alternatively, if the Fund has increased the sensitivity of its portfolio to stock or bond market fluctuations, the Fund will experience a larger loss in the event of a market decline. The investment adviser’s assessment of market conditions may not account for every possible factor, and some factors may be deemed more significant than others.

Hedging and Derivatives Risks

The Fund may hedge its investment exposure to stocks by purchasing put options on stock indices; by writing covered call options on stocks which the Fund owns; by writing call options on stock indices; or by establishing short futures positions or option combinations (such as simultaneously writing call options and purchasing put options) on one or more stock indices considered by the investment adviser to be correlated with the Fund’s portfolio of common stocks. The Fund may hedge its investment exposure to bonds by effecting short sales of U.S. Treasury futures. To the extent the Fund hedges its investment positions as part of its investment program, its investment performance may deviate significantly from the performance of a passive investment portfolio of stocks and bonds for substantial portions of a market cycle. When market conditions are unfavorable in the view of the investment adviser and the Fund’s holdings are hedged, the Fund may not benefit from general advances in the stock or bond markets to the same extent as if the Fund was not hedged. The Fund’s hedging strategy may also result in the investment performance of the Fund having limited correlation with the performance of the general stock and bond markets for meaningful periods of time, including periods of sustained advances in the stock or bond markets.

The derivatives used by the Fund for hedging purposes are subject to specific risks. When the Fund hedges by purchasing put options on stock indices, the Fund may incur a net loss of time value on the purchased options. When the Fund hedges by writing covered call options on stocks which the Fund owns, the Fund may not benefit from price advances in those stocks to the same extent that it would if the Fund had not employed hedging. When the Fund hedges its portfolio using short stock index futures, short Treasury bond futures, or option combinations (such as simultaneously writing stock index call options and purchasing stock index put options), the Fund may incur a

loss even when its portfolio is hedged if the returns on its positions in stocks and bonds do not exceed the returns of the securities and financial instruments used to hedge. This is known as “tracking risk” (or alternatively, “basis risk”).

The Fund does not invest solely in the securities that are included in any index or invest in business sectors in the same proportion as such sectors may be represented in any index. For this reason, the hedging strategies used by the Fund do not eliminate market risk or provide complete protection against adverse changes in the prices of individual securities or securities within particular business sectors. When options are owned by the Fund, it is possible that they may lose value over time, even if the prices of the securities underlying the options are unchanged. The Fund may purchase futures contracts on broad-based stock indices to obtain investment exposure to the stock market, and may purchase futures contracts on U.S. Treasury securities to obtain investment exposure to the bond market. These purchases seek capital appreciation or income, consistent with the Fund’s investment objective and policies. When a futures contract is purchased by the Fund, the risk assumed by the Fund is the same as if the Fund had directly invested in the stocks comprising the underlying stock index or in U.S. Treasury securities in the same amount as the notional value of the futures contract.

Risks of Bonds

General interest rate movements will affect the prices of the Fund’s fixed-income securities and thus, the Fund’s share price, on a daily basis. Significant declines are possible both in the prices of fixed-income securities generally and in the prices of specific securities held by the Fund.

Interest rate changes can be sudden and unpredictable and a wide variety of factors can cause interest rates to change, such as central bank monetary policies, inflation rates, supply and demand, and general economic conditions. When interest rates rise, the value of bonds held by the Fund is likely to decline. Such price declines will be proportionally greater when the Fund emphasizes bonds with longer maturities, since they are more sensitive to changes in interest rates than bonds with shorter maturities. It is difficult to accurately predict the direction of interest rates.

The Fund could lose money if the issuer of a bond in which it has invested fails to make scheduled principal or interest payments, or if the credit rating of the issuer is downgraded. If a security’s rating is downgraded, the Fund is not required to sell

the security. Corporate debt generally has the greatest degree of credit risk among the bonds in which the Fund may invest. When a debt security is rated below investment-grade (a so-called “junk” bond), it may be more difficult for the Fund to sell the security at a price approximating its market value, and there is greater risk of default in the payment of interest and principal.