Risk is inherent in all investing and you could lose money by investing in the Fund. A summary description of certain principal risks of investing in the Fund is set forth below. Before you decide whether to invest in the Fund, carefully consider these risk factors associated with investing in the Fund, which may cause investors to lose money. There can be no assurance that the Fund will achieve its investment objective. The principal risks described below reflect the aggregate operations of the Fund and its Subsidiary.
Commodity Exposure Risks: Exposure to the commodities markets may subject the fund to greater volatility than investments in traditional securities.
Credit Risk: The issuer of a debt instrument, the borrower of a loan or the counterparty to a contract, including derivatives contracts, may default or otherwise become unable to honor a financial obligation.
Currency Risk: Currency risk is the risk that changes in currency exchange rates will negatively affect securities or instruments denominated in, and/or payments received in, foreign currencies.
Derivatives Risk: In addition to the risks described below under “Speculative Exposure Risk,” there are additional risks associated with investing in derivatives.
Equity Exposure Risk: Equity security prices have historically risen and fallen in periodic cycles. U.S. and foreign equity markets have experienced periods of substantial price volatility in the past and may do so again in the future.
Exchange-Traded Notes Risk: ETNs are a type of unsecured, unsubordinated debt security that have characteristics and risks similar to those of fixed income securities and trade on a major exchange similar to shares of exchange-traded funds (“ETFs”).
Fixed Income Risk: The market value of fixed income investments, and financial instruments related to those fixed income investments, will change in response to interest rate changes and other factors, such as changes in the effective maturities and credit ratings of fixed income investments.
Foreign Securities Risk: A fund that has exposure to investments outside the U.S. carries additional risks that include Currency Risk, Information Risk and Political Risk.
Forwards Risk: Forwards are not exchange-traded and therefore no clearinghouse or exchange stands ready to meet the obligations of the contracts.
Futures Contracts Risk: The price volatility of futures contracts historically has been greater than that for traditional securities such as stocks and bonds.
Interest Rate Risk: Changes in interest rates may cause a decline in the market value of an investment. Leveraging Risk: Although the fund itself will not be leveraged, certain financial instruments may give rise to a form of leverage.
Market Risk: The market value of an instrument may fluctuate, sometimes rapidly and unpredictably.
Non-Diversified Status: The fund is considered a non-diversified investment company under the 1940 Act and is permitted to invest a greater proportion of its assets in the securities of a smaller number of issuers.
Options Risk: A decision as to whether, when and how to use options involves the exercise of skill and judgment, and even a well conceived and well-executed options program may be adversely affected by market behavior or unexpected events.
Portfolio Turnover Risk: The fund expects to engage in frequent trading of derivatives.
Repurchase Agreements Risk: Repurchase agreements could involve certain risks in the event of default or insolvency of the seller, including losses and possible delays or restrictions upon the fund’s ability to dispose of the underlying securities.
Short Position Risk: The fund or the Subsidiary may enter into a short position through a futures contract or swap agreement.
Speculative Exposure Risk: Gains or losses from speculative positions in a derivative may be much greater than the derivative’s original cost.
Structured Note Risk: The fund may seek investment exposure to asset classes through structured notes that may be exchange-traded or trade in the over-the-counter market.
Subsidiary Risk: By investing in the Subsidiary, the fund is indirectly exposed to the risks associated with the Subsidiary’s investments.
Swap Agreements Risk: Swap agreements involve the risk that the party with whom the fund has entered into the swap will default on its obligation to pay the fund and the risk that the fund will not be able to meet its obligations to pay the other party to the agreement.
Tax Risk: In order to qualify as a RIC under the Code, the fund must meet certain requirements regarding the source of its income, the diversification of its assets and the distribution of its income.
U.S. Government Securities Risk: Obligations of U.S. government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. government.
