0002008638 2025-02-24 2025-02-24 0002008638 cik0002008638:ClassIMember 2025-02-24 2025-02-24 0002008638 cik0002008638:ClassAMember 2025-02-24 2025-02-24 0002008638 cik0002008638:ClassUMember 2025-02-24 2025-02-24 0002008638 cik0002008638:SeniorLoansRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:FixedIncomeSecuritiesRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:DistressedDebtRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:AssetBackedSecuritiesAbsMember 2025-02-24 2025-02-24 0002008638 cik0002008638:ConvertibleSecuritiesRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:ForeignSecuritiesRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:AssetAllocationRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:TaxRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:ValuationRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:UsuryLimitationsMember 2025-02-24 2025-02-24 0002008638 cik0002008638:RisksRelatedToCommercialRealEstateAndResidentialRealEstateInvestmentsMember 2025-02-24 2025-02-24 0002008638 cik0002008638:RisksRelatedToConsumerRelatedAssetBackedSecuritiesMember 2025-02-24 2025-02-24 0002008638 cik0002008638:RisksAssociatedWithCorporateAssetBasedCreditMember 2025-02-24 2025-02-24 0002008638 cik0002008638:RegulatoryChangesRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:LendingRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:LeverageRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:ManagementRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:NaturalDisastersAdverseWeatherConditionsAndClimateChangeMember 2025-02-24 2025-02-24 0002008638 cik0002008638:OperationalAndCybersecurityRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:PotentialConsequencesOfPeriodicRepurchaseOffersMember 2025-02-24 2025-02-24 0002008638 cik0002008638:GrowthInvestmentStyleRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:ValueInvestmentStyleRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:EsgIntegrationRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:CreditAndCounterpartyRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:CreditorRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:DistributionRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:EconomicAndMarketEventsRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:HedgingDerivativesAndOtherStrategicTransactionsRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:IlliquidityOfSharesMember 2025-02-24 2025-02-24 0002008638 cik0002008638:InflationDeflationRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:RisksRelatedToEsotericCreditMember 2025-02-24 2025-02-24 0002008638 cik0002008638:RisksRelatedToSecuritizedCreditMember 2025-02-24 2025-02-24 0002008638 cik0002008638:RisksRelatedToSignificantRiskTransferAssetsMember 2025-02-24 2025-02-24 0002008638 cik0002008638:RisksRelatedToSpecialtyFinanceMember 2025-02-24 2025-02-24 0002008638 cik0002008638:RisksRelatedToTransportationInvestmentsMember 2025-02-24 2025-02-24 0002008638 cik0002008638:EquitySecuritiesRiskMember 2025-02-24 2025-02-24 0002008638 cik0002008638:RisksOfAircraftOrAircraftEngineLeaseReceivablesEnhancedEquipmentTrustCertificatesAircraftEngineMortgagesAndOtherAviationRelatedAssetBackedSecuritiesThatSeekToMonetizeLeasesOrMortgagesMember 2025-02-24 2025-02-24 0002008638 dei:BusinessContactMember 2025-02-24 2025-02-24 0002008638 cik0002008638:CommonSharesMember 2025-02-24 2025-02-24 pure shares iso4217:USD 0002008638 false MA MA 333-277684 811-23937 N-2 N-2 true false 2 true true 3 true John Hancock CQS Multi Asset Credit Fund 200 Berkeley Street Boston 02116 617 663-3000 Christopher Sechler 200 Berkeley Street Boston 02116 false true false false false false false true 2025-02-28 false false false false false true false true false No false true The purpose of the table below is to help you understand all fees and expenses that you, as a Shareholder, would bear directly or indirectly.For a more complete description of the various fees and expenses of the fund, see “Management of the Fund.” <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;width:84%;border:0;margin:0 auto"> <tr> <td style="width:76%"></td> <td style="vertical-align:bottom;width:4%"></td> <td></td> <td></td> <td></td> <td style="vertical-align:bottom;width:3%"></td> <td></td> <td></td> <td></td> <td style="vertical-align:bottom;width:4%"></td> <td></td> <td></td> <td></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td style="vertical-align: bottom; white-space: nowrap; padding-bottom: 0.5pt;"><div style="margin-top: 0pt; margin-bottom: 0pt; border-bottom: 1pt solid rgb(0, 0, 0); display: table-cell; font-size: 8pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="font-weight:bold;display:inline;"><div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-style:italic;display:inline;">Shareholder Transaction Expenses</div></div></div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td colspan="2" style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class A</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;"> </td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;"> </td> <td colspan="2" style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class I</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;"> </td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td colspan="2" style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class U</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 3em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Sales Load on Purchases (as a percentage of offering price)(1)</div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">2.50</div></td> <td style="white-space:nowrap;vertical-align:bottom"><div style="-sec-ix-redline:true;display:inline;">% </div></td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">None</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">None</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td></tr></table><div style="margin-top: 0px; margin-bottom: 0px;"> </div><div style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">(1)</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Class A Share investments may be subject to a maximum sales charge of 2.50%. Such sales load will not form part of an investor’s investment in the fund. Any sales load will reduce the amount of an investor’s initial or subsequent investment in the fund, and the impact on a particular investor’s investment returns would not be reflected in the returns of the fund. The sales load may be waived in certain circumstances as described in this Prospectus or as otherwise approved by the Advisor. </div></div></td></tr></table> as a percentage of offering price) 0.025 0 0 <table style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;width:84%;border:0;margin:0 auto"> <tr> <td style="width:76%"></td> <td style="vertical-align:bottom;width:4%"></td> <td></td> <td></td> <td></td> <td style="vertical-align:bottom;width:3%"></td> <td></td> <td></td> <td></td> <td style="vertical-align:bottom;width:4%"></td> <td></td> <td></td> <td></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Annual Expenses </div></div></div></div>(as a percentage of net assets attributable to Shares)</div></div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom"></td> <td style="vertical-align:bottom"></td> <td style="vertical-align:bottom"></td> <td style="vertical-align:bottom"> </td> <td style="vertical-align:bottom"></td> <td style="vertical-align:bottom"></td> <td style="vertical-align:bottom"></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom"></td> <td style="vertical-align:bottom"></td> <td style="vertical-align:bottom"></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 3em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Management Fee</div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">1.25</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">1.25</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">1.25</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 3em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Distribution and Service Fee</div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">0.25</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">0.00</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">0.75</div></td> <td style="white-space:nowrap;vertical-align:bottom"><div style="font-size:75%; vertical-align:top;-sec-ix-redline:true;display:inline;font-size:8.3px">(2)</div> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 3em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Other Expenses(2)</div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">2.03</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">2.03</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">2.03</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="font-weight:bold;display:inline;"><div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-style:italic;display:inline;">Total Annual Fund Operating Expenses</div></div></div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">3.53</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">3.28</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">4.03</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 3em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Fee Waiver and/or Expense Reimbursements(3)</div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">-1.53</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">-1.53</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">-1.53</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="font-weight:bold;display:inline;"><div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-style:italic;display:inline;">Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Reimbursements</div></div></div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">2.00</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">1.75</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">2.50</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td></tr></table> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">(2)</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Distribution and Service (i.e., Rule 12b-1) fees have been restated to reflect the Class Plan (as defined below) fee schedule effective October 9, 2024. </div></div></td></tr></table> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">(3)</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">“Other Expenses” are based on estimated amounts for the current fiscal year. Other Expenses include the Fund’s operating expenses, including professional fees, transfer agency fees, administration fees, custody fees, offering costs and other operating expenses. </div></div></td></tr></table> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">(4)</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">The Advisor contractually agrees to reduce its Management Fee for the fund or, if necessary, make payment to the fund, in an amount equal to the amount by which the following expenses of the fund, incurred in the ordinary course of the fund’s business, exceed 0.51% percent of average monthly net assets (on an annualized basis) of the fund: (a) administrative fees; (b) custody and accounting fees; (c) audit fees; (d) legal fees; (e) independent trustee fees; (f) valuation fees; (g) blue sky fees; (h) insurance premiums; (i) printing costs; (j) registration and filing expenses; (k) organization and offering expenses; (l) transfer agent fees and service fees; and (m) other miscellaneous ordinary expenses, but excluding: (1) advisory fees; (2) interest expense; (3) 12b-1 fees; (4) any cashiering or other investment servicing fees; (5) litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the business of the fund; (6) taxes; (7) short dividends; (8) acquired fund fees and expenses, which are based on indirect net expenses associated with the fund’s investments in underlying investment companies; (9) class specific expenses; (10) portfolio brokerage commissions; (11) expenses related to, or incurred by, special purpose vehicles or other subsidiaries of the fund held directly or indirectly by the fund; (12) expenses, including legal expenses, related to investments of the fund; and (13) expenses, including legal expenses, related to co-investment transactions involving the fund. This agreement expires on February 28, 2026, unless renewed by mutual agreement of the Advisor and the fund based upon a determination that this is appropriate under the circumstances at that time. The Advisor also contractually agrees to waive a portion of its Management Fee and/or reimburse expenses for the fund and certain other John Hancock funds according to an asset level breakpoint schedule that is based on the aggregate net assets of all the funds participating in the waiver or reimbursement. This waiver is allocated proportionally among the participating funds. This agreement expires on July 31, 2026, unless renewed by mutual agreement of the fund and the Advisor based upon a determination that this is appropriate under the circumstances at that time. </div></div></td></tr></table> as a percentage of net assets attributable to Shares 0.0125 0.0125 0.0125 0.0025 0 0.0075 0.0203 0.0203 0.0203 0.0353 0.0328 0.0403 -0.0153 -0.0153 -0.0153 0.02 0.0175 0.025 Distribution and Service (i.e., Rule 12b-1) fees have been restated to reflect the Class Plan (as defined below) fee schedule effective October 9, 2024. “Other Expenses” are based on estimated amounts for the current fiscal year. Other Expenses include the Fund’s operating expenses, including professional fees, transfer agency fees, administration fees, custody fees, offering costs and other operating expenses. <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">EXAMPLE </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The following example illustrates the expenses that you would pay on a $1,000 investment in Shares, for the time periods indicated and then redeem or hold all of your Shares at the end of those periods. This example assumes a 5% average annual return and that fund expenses will not change over the periods. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:* </div><div></div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;width:84%;border:0;margin:0 auto"> <tr> <td style="width:76%"></td> <td style="vertical-align:bottom;width:5%"></td> <td></td> <td></td> <td></td> <td style="vertical-align:bottom;width:5%"></td> <td></td> <td></td> <td></td> <td style="vertical-align:bottom;width:5%"></td> <td></td> <td></td> <td></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td colspan="12" style="vertical-align:bottom"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Cumulative Expenses Paid for the Period of:</div></div></td> <td style="vertical-align:bottom"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td style="border-bottom:1.00pt solid #000000;vertical-align:bottom;white-space:nowrap"><div style="margin-top: 0pt; margin-bottom: 1pt; font-size: 8pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Expenses ($)</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td colspan="2" style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class A</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;"> </td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td colspan="2" style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class I</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;"> </td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td colspan="2" style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class U</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Year 1</div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">45</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">18</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">25</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Year 3</div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">117</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">87</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">109</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Year 5</div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">191</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">158</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">194</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Year 10</div></div></td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">386</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">347</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="vertical-align:bottom">  </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right"><div style="-sec-ix-redline:true;display:inline;">414</div></td> <td style="white-space:nowrap;vertical-align:bottom"> </td></tr></table><div style="margin-top: 12pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">The example should not be considered a representation of future expenses. Actual expenses may be higher or lower. </div></div><div style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left">*</td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;">The example assumes that the total annual fund operating expenses (excluding any sales loads on reinvested dividends, fee waivers and/or expense reimbursements) set forth in the Annual Expenses table above are as shown and remain the same for each year, and that all dividends and distributions are reinvested at net asset value. The expenses used to calculate the fund’s examples do not include fee waivers or expense reimbursements. Actual expenses may be greater or less than those assumed. Moreover, the fund’s actual rate of return may be greater or less than the hypothetical 5% return shown in the example. </div></td></tr></table> 45 18 25 117 87 109 191 158 194 386 347 414 <div id="pro820528_7" style="margin-top: 12pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Investment Objective and Principal Investment Strategies </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Investment objective: </div></div>The fund’s investment objective is to seek to generate a return comprised of both current income and capital appreciation, emphasizing current income with low volatility and low correlation to the broader markets. There can be no assurance that the fund will achieve its investment objective or that it will not incur a loss. The Board of Trustees of the fund (the “Board”) may change the investment objective of the fund without shareholder approval. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Principal Investment Strategies</div></div>: </div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Under normal market conditions, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in credit-related investments of U.S. and non-U.S. issuers (“Credit Investments”). Credit Investments include: (i) Loans (as defined below); (ii) Fixed-Income Securities (as defined below); (iii) Distressed Debt (as defined below); (iv) Asset-Based Securities Investments (“ABS”) (as defined below); (v) Convertible Securities (as defined below); (vi) Emerging Market Debt (as defined below); and (vii) Private Credit (as defined below). </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">There is no limit on the range of maturities and credit quality of securities in which the fund may invest. Such securities will include below-investment grade securities. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The general descriptions below summarize certain investments that may be pursued by the fund. These descriptions are not intended to be complete explanations of the strategies described or a list of all possible investments that may be used by the fund. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Loans </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Loans will include, but will not be limited to, performing loans and long-biased holdings of sub-investment grade senior and/or subordinated loans, including second liens and mezzanine debt, which are obligations of entities that are expected to maintain debt servicing obligations. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Senior loans are investments in originated first and second lien term loans, delayed draw term loans, revolving credit facilities, and club deals. These types of investments are called “senior loans” because they are generally secured by a borrower’s assets pursuant to a first or second priority or “senior” lien, ranking above unsecured and subordinated bonds. Such loans pay a coupon and repay the bulk of principle at maturity. This means that the asset class has little or no interest rate duration. Senior loans do not include commercial mortgage loans (including subordinated real estate mezzanine financing). The fund may invest in loans either by transacting directly at the initial funding date or acquiring loans in secondary market transactions. The fund’s commitments in connection with a portion of the loans in which it invests may be unfunded. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in loans secured by substantially all of the assets of the borrower and the other loan parties (subject to customary exceptions), including a pledge of the equity of the borrower and its subsidiaries. While real property is not a primary source of collateral, occasionally mortgages are part of the collateral package if the borrower owns particularly valuable real property. The fund may also invest in subordinated debt obligations to the extent permitted by the fund’s investment restrictions. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in loans and other debt securities that have the same characteristics as senior loans except that such loans are second in lien priority rather than first. Such “second lien” loans and securities like senior loans typically have adjustable floating-rate interest payments. Accordingly, the risks associated with “second lien” loans are higher than the risks of loans with first priority over the collateral. In the event of default on a “second lien” loan, the first priority lien holder has first claim to the underlying collateral of the loan. It is possible that no collateral value would remain for the second priority lien holder, and therefore result in a loss of investment to the fund. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may also invest in mezzanine debt, which generally will be unrated or have ratings or implied or imputed ratings below investment grade. Mezzanine debt or securities are generally unsecured and/or subordinated to other obligations, and tend to have greater credit and liquidity risk than that typically associated with investment grade corporate obligations. The risks associated with mezzanine debt include a greater possibility that adverse changes in the financial condition of the obligor or in general economic conditions may adversely affect the obligor’s ability to pay principal and interest on its debt. Many obligors on mezzanine debt are highly leveraged. As such, specific developments affecting such obligors, such as reduced cash flow from operations or the inability to refinance debt at maturity, may also adversely affect such obligors’ ability to meet debt service obligations. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Fixed-Income Securities </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in a diversified portfolio of bonds. These may include, but are not limited to, corporate bonds and debentures, mortgage-backed and asset-backed securities, and U.S. government and agency securities. These may include, but are not limited to, domestic and foreign corporate bonds, government obligations, debentures and notes, convertible securities, preferred securities, and domestic and foreign government obligations. The fund may have long exposures to corporate and financial credits through credit default swaps and long exposures to corporate credit indices through credit default swaps, exchange traded funds and other instruments. There is no limit on the fund’s average maturity. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Distressed Debt </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in distressed debt securities. Distressed debt securities are bonds issued by entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. Such securities can be issued by both domestic and foreign private institutions and governments. Distressed debt securities typically do not receive interest payments and such securities may be subject to restrictions on resale. The fund may also maintain long positions in equity or equity related instruments following the reorganization, restructuring and/or insolvency of a loan obligor or as the result of conversion events in convertible securities. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">ABS </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">ABS are investments including, but not limited to: </div><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:1%"> </td> <td style="width:2%;vertical-align:top;text-align:left">•</td> <td style="width:1%;vertical-align:top"> </td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-family: &quot;Times New Roman&quot;; font-size: 10pt; text-align: left; line-height: normal;">Commercial Real Estate Lending: the origination and acquisition of commercial real estate loans secured by housing-related and traditional commercial real estate property types; </div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:1%"> </td> <td style="width:2%;vertical-align:top;text-align:left">•</td> <td style="width:1%;vertical-align:top"> </td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-family: &quot;Times New Roman&quot;; font-size: 10pt; text-align: left; line-height: normal;">Consumer-Related Assets: acquisition of consumer loans, including distressed or nonperforming loans; high-yield ABS backed by various forms of non-mortgage household debt largely focused on select market segments such as: automobile loans and leases, credit cards and personal installment loans; and other types of consumer loans; </div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:1%"> </td> <td style="width:2%;vertical-align:top;text-align:left">•</td> <td style="width:1%;vertical-align:top"> </td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-family: &quot;Times New Roman&quot;; font-size: 10pt; text-align: left; line-height: normal;">Corporate Asset-Based Credit: asset-based corporate credit secured by real estate, equipment, receivables, inventory and intellectual property rights, among other assets; </div></td></tr></table><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:1%"> </td> <td style="width:2%;vertical-align:top;text-align:left">•</td> <td style="width:1%;vertical-align:top"> </td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-family: &quot;Times New Roman&quot;; font-size: 10pt; text-align: left; line-height: normal;">Esoteric Credit: securities backed by contracted cashflows of loans or leases on data centers, music royalties, mobile phone plans, spectrum bandwidth rights, solar panels for either residential or commercial use, or other asset types; </div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:1%"> </td> <td style="width:2%;vertical-align:top;text-align:left">•</td> <td style="width:1%;vertical-align:top"> </td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-family: &quot;Times New Roman&quot;; font-size: 10pt; text-align: left; line-height: normal;">Residential Real Estate Lending: the origination and acquisition of residential real estate loans and legacy mortgage loan pools, including distressed or nonperforming loans, and newly originated non-agency mortgage loans; </div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:1%"> </td> <td style="width:2%;vertical-align:top;text-align:left">•</td> <td style="width:1%;vertical-align:top"> </td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-family: &quot;Times New Roman&quot;; font-size: 10pt; text-align: left; line-height: normal;">Securitized Credit: securities backed by residential real estate (“RMBS”), commercial real estate (“CMBS”), collateralized mortgage obligations (“CMOs”), secured corporate loans (“CLOs”) and ABS; </div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:1%"> </td> <td style="width:2%;vertical-align:top;text-align:left">•</td> <td style="width:1%;vertical-align:top"> </td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-family: &quot;Times New Roman&quot;; font-size: 10pt; text-align: left; line-height: normal;">Significant Risk Transfer Assets: exposure to portfolios of loans via bank issued credit linked notes or fully funded credit default swap contracts; and </div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:1%"> </td> <td style="width:2%;vertical-align:top;text-align:left">•</td> <td style="width:1%;vertical-align:top"> </td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-family: &quot;Times New Roman&quot;; font-size: 10pt; text-align: left; line-height: normal;">Transportation Assets: transportation assets such as loans and leases backed by commercial aircraft, aircraft engines, shipping vessels or other transportation and equipment. </div></td></tr></table><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may also take long exposures to ABS indices (such as CMBX) through credit default swaps. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may trade both rated and unrated debt as well as listed and unlisted instruments and debt-equity hybrid instruments. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Except for RMBS, CMBS, CMOs, CLOs and ABS, which may range from most senior (AAA-rated) to most subordinate (BB-rated, B-rated and equity), most loans and investments made directly by the fund are not rated. If a loan or investment is rated, it will usually be rated by S&amp;P Global Ratings, Moody’s Investors Service, Inc., Fitch Ratings, Kroll Bond Rating Agency or DBRS Morningstar, and may be rated below investment-grade<div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">.</div></div></div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Convertible Securities </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Convertible Securities may include convertible bonds, convertible notes, convertible preference shares, exchangeable bonds (whereby the underlying security is different from the corresponding issuer), warrants and any other convertible or exchangeable instruments. Equity and equity-linked securities (including depositary receipts and other participation rights), index and participation notes and equity linked notes may be held on an ancillary basis. Investments in Convertible Securities are not subject to the rating criteria with respect to non-convertible debt obligations. As with all debt securities, the market value of Convertible Securities tends to decline as interest rates increase and, conversely, to increase as interest rates decline. The market value of Convertible Securities can also be heavily dependent upon the changing value of the equity securities into which such securities are convertible, depending on whether the market price of the underlying security exceeds the conversion price. Convertible Securities generally rank senior to common stocks in an issuer’s capital structure and consequently entail less risk than the issuer’s common stock. However, the extent to which such risk is reduced depends upon the degree to which the Convertible Security sells above its value as a fixed-income security. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Emerging Market Debt </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in debt instruments of emerging-market issuers. CQS (US), LLC (the “Subadvisor” or “CQS”) may consider, but is not limited to, the classifications by the World Bank, the International Finance Corporation, or the United Nations and its agencies in determining whether a country is an emerging or a developed country. Examples of emerging-market countries include most African, Central Asian, Eastern European, and South and Central American nations. The portfolio managers use proprietary research to identify specific countries, corporate sectors, and issuers that are attractively priced, and shall not be constrained by market capitalization, company fundamentals, security valuation or seasoning, or similar characteristics. The Subadvisor uses economic and industry analysis to try to anticipate shifts in the business cycle and determine which countries and sectors might benefit over the next twelve (12) months. Due to potentially volatile conditions in emerging markets, the fund’s investment process may result in a higher-than-average portfolio turnover ratio, which could increase transaction costs. In the event of extreme market conditions, the Subadvisor may temporarily depart from the investment strategy for defensive purposes. A number of countries that the fund may invest in may not have sovereign bond ratings, may be below-investment-grade, or may be unrated. Below-investment-grade debt securities are also referred to as junk bonds. The fund may invest in corporate or other privately issued debt instruments of issuers having market capitalizations of below $1 billion at the time of investment. The debt securities in which the fund may invest include, but are not limited to, debt issued by governments or government agencies, including the U.S. Treasury; U.S. and foreign corporate-debt instruments; mortgage- and asset-backed securities and collateralized mortgage obligations; and variable and floating-rate senior and subordinated corporate-debt obligations. There is no limit on the maturities of the debt instruments in which the fund will invest. The fund may invest in securities denominated in any currency, including U.S. dollar-denominated emerging-market debt, and may be subject to unexpected, adverse currency fluctuations. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Private Credit </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Private Credit is credit that is extended to companies or projects on a bilaterally negotiated basis and is not publicly offered or traded such as many corporate bonds are and is originated or held by lenders which are not banks. Private Credit takes various legal forms including loans, bonds, notes or private securitization issues. Private Credit encompasses various strategies including real estate debt, distressed debt, direct lending, mezzanine financing and structured financing. Strategies that do not easily fall into one of these categories are either opportunistic (investing across the credit spectrum as market opportunities permit) or niche/specialty finance strategies. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Temporary Defensive Investing </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In abnormal circumstances, the fund may temporarily invest extensively in investment-grade short-term securities, cash, or cash equivalents for the purpose of protecting the fund in the event the manager determines that market, economic, political, or other conditions warrant a defensive posture. To the extent that the fund is in a defensive position, its ability to achieve its investment objective will be limited. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="text-decoration:underline;display:inline;">Other Investment Strategies </div></div></div> </div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may also, but is not required to, make other investments as follows: </div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in notes, bills, debentures, convertible and preferred securities, government and municipal obligations and other credit instruments with similar economic characteristics. In addition, from time to time, the fund may invest in or hold common stock and other equity or equity related securities incidental to the purchase or ownership of Credit Investments or in connection with a reorganization, restructuring and/or insolvency of a borrower or as the result of a conversion event on a convertible security. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may use derivative instruments to enhance returns, for efficient portfolio management purposes, gain investment exposure to Credit Investments, to provide downside protection and to dampen volatility. As required by Rule 18f-4 under the 1940 Act (the “Derivatives Rule”), funds that engage in derivatives transactions, other than “limited derivatives users” (as defined under the Derivatives Rule), generally must adopt and implement written derivatives risk management program (the “Derivatives Risk Management Program”), that is reasonably designed to manage the funds’ derivatives risks, while taking into account the funds’ derivatives and other investments. This program includes risk guidelines, stress testing, internal reporting and escalation and periodic review of the program. Since the fund intends to engage in derivatives transactions and does not expect to qualify as a limited derivatives user, the fund will adopt a Derivatives Risk Management Program. In addition, on a quarterly and annual basis, the Advisor will provide the Board with written reports that address the operation, adequacy and effectiveness of the fund’s Derivatives Risk Management Program, which is generally designed to assess and manage derivatives risk. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may retain amounts in cash or cash equivalents pending reinvestment where the Subadvisor considers it appropriate in order for the fund to seek to achieve its investment objective. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, the fund may make use of leverage to seek to achieve its investment objective or for liquidity (<div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">i.e.</div></div>, to finance the repurchase of shares and/or bridge the financing of investments in Credit Investments). The fund may leverage its capital by borrowing on a short term basis (e.g., through the use of an overdraft facility and/or (reverse) repurchase agreements) and/or through the use of futures, forward contracts, options and other derivative instruments in order to finance redemptions, to permit currency hedging, manage interest rate risk, and make portfolio management more efficient to allow the fund’s portfolio to remain fully invested prior to settlement of sales of securities or other investments. Financial derivatives exhibit embedded leverage. The fund may also participate in loans, corporate credit or credit derivatives referencing loans, which inherently feature leverage. The fund may not grant loans or act as a guarantor on behalf of third-parties or borrow money except for short-term borrowings not to exceed one (1) year in an amount not exceeding 25% of its net assets. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, the fund may lend its securities so long as such loans do not represent more than 33 1/3% of its total assets. As collateral for the loaned securities, the borrower must provide portfolio collateral equal to at least 100% of the value of the loaned securities. The collateral will consist of cash (including U.S. dollars and foreign currency), cash equivalents or securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. The borrower must also agree to increase the collateral if the value of the loaned securities increases. If the market value of the loaned securities declines, the borrower may request that some collateral be returned. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in instruments that, at the time of investment, are illiquid (generally, those securities that cannot be disposed of within seven (7) days in the ordinary course of business at approximately the value at which the fund has valued the securities). The fund may also invest, without limit, in securities that are unregistered (but are eligible for purchase and sale by certain qualified institutional buyers) or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale, such as but not limited to closed-end funds, business development companies and partnerships. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest its cash balances in money market instruments, U.S. government securities, commercial paper, certificates of deposit, repurchase agreements, reverse repurchase agreements and other high quality debt instruments maturing in one year or less, among other instruments. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">The Subadvisor may consider environmental, social, and/or governance (“ESG”) factors, alongside other relevant factors, as part of its investment process. ESG factors may include, but are not limited to, matters regarding board diversity, climate change policies, and supply chain and human rights policies. The ESG characteristics utilized in the fund’s investment process may change over time and one or more characteristics may not be relevant with respect to all issuers that are eligible fund investments. Because ESG factors are considered alongside other relevant factors, the Subadvisor may determine that an investment is appropriate notwithstanding its relative ESG characteristics. </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may create or organize or otherwise utilize special purpose subsidiaries or other special purpose investment vehicles (“SPVs”), which are wholly-owned subsidiaries of the fund, to facilitate the fund’s investment strategies. Certain fund investments may be held by these SPVs. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund is not limited to the types of investments described above and may invest in other types of investments consistent with the fund’s investment objective. </div> <div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Investing in the fund’s Shares involves a number of significant risks. Before investing in the fund’s Shares, investors should be aware of various risks, including those described below. The risks set out below are not the only risks the fund will face. Additional risks and uncertainties not presently known to the fund or not presently deemed material by the fund may also impair the fund’s operations and performance. If any of the following events occur, the fund’s business, financial condition, results of operations and cash flows could be materially and adversely affected. In such case, the fund’s NAV could decline, and may result in a loss of some or all of the amount invested. The risk factors described below are the principal risk factors associated with an investment in the fund as well as those factors generally associated with an investment company with investment objectives, investment policies, capital structure or trading markets similar to the fund. The fund ordered the descriptions of the six most significant risks to the fund, based on the currently expected impact to the fund’s net asset value, yield and total return, so that they appear first. The fund’s other main risks follow in alphabetical order, not in order of importance. For further details about the fund’s risks, including additional risk factors that are not discussed in this Prospectus because they are considered non-principal factors, see the fund’s SAI. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Senior Loans Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may be subject to greater levels of credit risk, call (or “prepayment”) risk, settlement risk and liquidity risk than funds that do not invest in senior loans. Senior loans are considered predominantly speculative with respect to an issuer’s continuing ability to make principal and interest payments, and may be more volatile than other types of securities. An economic downturn or individual corporate developments could adversely affect the market for these instruments and reduce the fund’s ability to sell these instruments at an advantageous time or price. An economic downturn would generally lead to a higher non-payment rate and a senior loan may lose significant value before a default occurs. The fund may also be subject to greater levels of liquidity risk than funds that do not invest in senior loans. In addition, the senior loans in which the fund invests may not be listed on any exchange and a secondary market for such loans may be comparatively less liquid relative to markets for other more liquid fixed income securities. Consequently, transactions in senior loans may involve greater costs than transactions in more actively traded securities. Restrictions on transfers in loan agreements, a lack of publicly-available information, irregular trading activity and wide bid/ask spreads among other factors, may, in certain circumstances, make senior loans difficult to value accurately or sell at an advantageous time or price than other types of securities or instruments. These factors may result in the fund being unable to realize full value for the senior loans and/or may result in the fund not receiving the proceeds from a sale of a senior loan for an extended period after such sale, each of which could result in losses to the fund. Senior loans may have extended trade settlement periods which may result in cash not being immediately available to the fund. If an issuer of a senior loan prepays or redeems the loan prior to maturity, the fund may have to reinvest the proceeds in other senior loans or similar instruments that may pay lower interest rates. Senior loans in which the fund invests may or may not be collateralized, although the loans may not be fully collateralized and the collateral may be unavailable or insufficient to meet the obligations of the borrower. The fund may have limited rights to exercise remedies against such collateral or a borrower, and loan agreements may impose certain procedures that delay receipt of the proceeds of collateral or require the fund to act collectively with other creditors to exercise its rights with respect to a senior loan. Because of the risks involved in investing in senior loans, an investment in the fund should be considered speculative. Junior loans, which are secured and unsecured subordinated loans, second lien loans and subordinate bridge loans, involve a higher degree of overall risk than senior loans of the same borrower due to the junior loan’s lower place in the borrower’s capital structure and, in some cases, their unsecured status. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Fixed-Income Securities Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Fixed-income securities are generally subject to two principal types of risk, as well as other risks described below: (1) interest-rate risk and (2) credit quality risk. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Interest-Rate Risk.</div></div></div> Fixed-income securities are affected by changes in interest rates. When interest rates decline, the market value of fixed-income securities generally can be expected to rise. Conversely, when interest rates rise, the market value of fixed-income securities generally can be expected to decline. The longer the duration or maturity of a fixed-income security, the more susceptible it is to interest-rate risk. Duration is a measure of the price sensitivity of a debt security, or a fund that invests in a portfolio of debt securities, to changes in interest rates, whereas the maturity of a security measures the time until final payment is due. Duration measures sensitivity more accurately than maturity because it takes into account the time value of cash flows generated over the life of a debt security. </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">In response to certain economic conditions, including periods of high inflation, governmental authorities and regulators may respond with significant fiscal and monetary policy changes such as raising interest rates. The fund may be subject to heightened interest rate risk when the Federal Reserve Board (Fed) raises interest rates. Recent and potential future changes in government monetary policy may affect interest rates. It is difficult to accurately predict the timing, frequency or magnitude of potential interest rate increases or decreases by the Fed and the evaluation of macro-economic and other conditions that could cause a change in approach in the future. If the Fed and other central banks increase the federal funds rate and equivalent rates, such increases generally will cause market interest rates to rise and could cause the value of the fund’s investments, and the fund’s NAV, to decline, potentially suddenly and significantly. As a result, the fund may experience high redemptions and, as a result, increased portfolio turnover, which could increase the costs that the fund incurs and may negatively impact the fund’s performance. </div></div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">In certain market conditions, governmental authorities and regulators may considerably lower interest rates, which, in some cases could result in negative interest rates. These actions, including their reversal or potential ineffectiveness, could further increase volatility in securities and other financial markets and reduce market liquidity. To the extent the fund has a bank deposit or holds a debt instrument with a negative interest rate to maturity, the fund would generate a negative return on that investment. Similarly, negative rates on investments by money market funds and similar cash management products could lead to losses on investments, including on investments of the fund’s uninvested cash. </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Credit Quality Risk.</div></div></div> Fixed-income securities are subject to the risk that the issuer of the security will not repay all or a portion of the principal borrowed and will not make all interest payments. If the credit quality of a fixed-income security deteriorates after the fund has purchased the security, the market value of the security may decrease and lead to a decrease in the value of the fund’s investments. An issuer’s credit quality could deteriorate as a result of poor management decisions, competitive pressures, technological obsolescence, undue reliance on suppliers, labor issues, shortages, corporate restructurings, fraudulent disclosures, or other factors. Funds that may invest in lower-rated fixed-income securities, commonly referred to as junk securities, are riskier than funds that may invest in higher-rated fixed-income securities. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Distressed Debt Risk.</div></div><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;"> </div></div></div><div style="letter-spacing: 0px; top: 0px;display:inline;"></div> </div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in distressed debt securities. Investing in distressed debt securities is speculative and involves substantial risks in addition to those of non-distressed high-yield securities. Distressed debt securities generally do not generate interest payments. Principal on distressed debt might not be repaid, and a fund could lose up to its entire investment. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Asset-Backed Securities (“ABS”) </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The investment characteristics of ABS differ from traditional debt securities. Among the major differences are that interest and principal payments are made more frequently, usually monthly, and that the principal may be prepaid at any time because the underlying loans or other assets generally may be prepaid at any time. The risk of each ABS depends both on the underlying assets and the legal structure of such security. Primarily, these securities do not have the benefit of the same security interest in the related collateral (<div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">e.g.</div></div>, automobile loans or leases, student loans or other consumer loans). There is a possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on these securities. Further, unlike traditional debt securities, which may pay a fixed rate of interest until maturity when the entire principal amount comes due, payments on certain ABS include both interest and a partial payment of principal. This partial payment of principal may be composed of a scheduled principal payment as well as an unscheduled payment from the voluntary prepayment, refinancing or foreclosure of the underlying collateral. As a result of these unscheduled payments of principal, or prepayments on the underlying collateral, the price and yield of ABS can be adversely affected. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The risk of investing in ABS is ultimately dependent upon payment of loans or leases by the debtor. The collateral supporting ABS is of shorter maturity than mortgage loans and is less likely to experience substantial prepayments. As with mortgage-backed securities, ABS are often backed by a pool of assets representing the obligations of a number of different parties and use credit enhancement techniques such as letters of credit, guarantees or preference rights. The value of an ABS is affected by changes in the market’s perception of the asset backing the security and the creditworthiness of the servicing agent for the collateral pool, the originator of the financial obligations or the financial institution providing any credit enhancement, as well as by the expiration or removal of any credit enhancement. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Convertible Securities Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Convertible securities are subject to certain risks of both equity and debt securities. Convertible securities may be converted or exchanged (by the holder or by the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio. A convertible security may also be called for redemption or conversion by the issuer after a particular date and under certain circumstances (including a specified price) established upon issue. Convertible securities generally offer lower interest or dividend yields than nonconvertible fixed-income securities of similar credit quality because of the potential for capital appreciation. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, a convertible security’s market value also tends to reflect the market price of common stock of the issuing company, particularly when that stock price is greater than the convertible security’s conversion price. The conversion price is defined as the predetermined price or exchange ratio at which the convertible security can be converted or exchanged for the underlying common stock. As the market price of the underlying common stock declines below the conversion price, the price of the convertible security tends to be increasingly influenced by the yield of the convertible security. Thus, it may not decline in price to the same extent as the underlying common stock. In the event of a liquidation of the issuing company, convertible securities generally entail less risk than the company’s common stock. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Foreign Securities Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Funds that invest in securities traded principally in securities markets outside the United States are subject to additional and more varied risks, as the value of foreign securities may change more rapidly and extremely than the value of U.S. securities. Less information may be publicly available regarding foreign issuers, including foreign government issuers. Foreign securities may be subject to foreign taxes and may be more volatile than U.S. securities. Currency fluctuations and political and economic developments may adversely impact the value of foreign securities. The securities markets of many foreign countries are relatively small, with a limited number of companies representing a small number of industries. Additionally, issuers of foreign securities may not be subject to the same degree of regulation as U.S. issuers. Reporting, accounting, and auditing standards of foreign countries differ, in some cases significantly, from U.S. standards. There are generally higher commission rates on foreign portfolio transactions, transfer taxes, higher custodial costs, and the possibility that foreign taxes will be charged on dividends and interest payable on foreign securities, some or all of which may not be reclaimable. Also, adverse changes in investment or exchange control regulations (which may include suspension of the ability to transfer currency or assets from a country); political changes; or diplomatic developments could adversely affect the fund’s investments. In the event of nationalization, expropriation, confiscatory taxation, or other confiscation, the fund could lose a substantial portion of, or its entire investment in, a foreign security. Foreign countries, especially emerging market countries, also may have problems associated with settlement of sales. Such problems could cause the fund to suffer a loss if a security to be sold declines in value while settlement of the sale is delayed. In addition, there may be difficulties and delays in enforcing a judgment in a foreign court resulting in potential losses to the fund. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Some of the foreign securities risks are also applicable to funds that invest a material portion of their assets in securities of foreign issuers traded in the United States. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">Depositary receipts are subject to most of the risks associated with investing in foreign securities directly because the value of a depositary receipt is dependent upon the market price of the underlying foreign equity security. Depositary receipts are also subject to liquidity risk. Additionally, the Holding Foreign Companies Accountable Act (“HFCAA”) could cause securities of foreign companies, including American depositary receipts, to be delisted from U.S. stock exchanges if the companies do not allow the U.S. government to oversee the auditing of their financial information. Although the requirements of the HFCAA apply to securities of all foreign issuers, the SEC has thus far limited its enforcement efforts to securities of Chinese companies. If securities are delisted, the fund’s ability to transact in such securities will be impaired, and the liquidity and market price of the securities may decline. The fund may also need to seek other markets in which to transact in such securities, which could increase the fund’s costs. </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Currency risk</div></div></div><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div> If currencies do not perform as the manager expects, the fund could have significant losses which exceed the amount invested in the currency instruments since currency transactions involve a small investment of cash relative to the magnitude of the risks assumed, thereby magnifying the impact of any resulting gain or loss. Currency risk includes the risk that fluctuations in exchange rates may adversely affect the U.S. dollar value of the fund’s investments. Currency risk includes both the risk that currencies in which the fund’s investments are traded, or currencies in which the fund has taken an active investment position, will decline in value relative to the U.S. dollar and, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly for a number of reasons, including the forces of supply and demand in the foreign exchange markets, actual or perceived changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments or central banks, or by currency controls or political developments in the U.S. or abroad. Certain funds may engage in proxy hedging of currencies by entering into derivative transactions with respect to a currency whose value is expected to correlate to the value of a currency the fund owns or wants to own. This presents the risk that the two currencies may not move in relation to one another as expected. In that case, the fund could lose money on its investment and also lose money on the position designed to act as a proxy hedge. Certain funds may also take active currency positions and may cross-hedge currency exposure represented by their securities into another foreign currency. This may result in the fund’s currency exposure being substantially different than that suggested by its securities investments. All funds with foreign currency holdings and/or that invest or trade in securities denominated in foreign currencies or related derivative instruments may be adversely affected by changes in foreign currency exchange rates. Derivative foreign currency transactions (such as futures, forwards, and swaps) may also involve leveraging risk, in addition to currency risk. Leverage may disproportionately increase the fund’s portfolio losses and reduce opportunities for gain when interest rates, stock prices, or currency rates are changing. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Continental Europe</div></div></div><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div> European securities may be affected significantly by economic, regulatory, or political developments affecting European issuers. All countries in Europe may be significantly affected by fiscal and monetary controls implemented by the European Economic and Monetary Union. Eastern European markets are relatively undeveloped and may be particularly sensitive to economic and political events affecting those countries. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Asset Allocation Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund’s investment performance depends upon how its assets are allocated and reallocated. A principal risk of investing in the fund is that the Subadvisor, subject to the oversight of the Advisor and the Board, may make less than optimal or poor asset allocation decisions. The Advisor and the Subadvisor employ an active approach to allocation across multiple credit sectors, but there is no guarantee that such allocation techniques will produce the desired results. It is possible that the Advisor or the Subadvisor will focus on an investment that performs poorly or underperforms other investments under various market conditions. You could lose money on your investment in the fund as a result of these allocation decisions. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Credit and Counterparty Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">This is the risk that the issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter (“OTC”) derivatives contract (see “Risk Factors—Hedging, Derivatives, and Other Strategic Transactions Risk”), or a borrower of the fund’s securities will be unable or unwilling to make timely principal, interest, or settlement payments, or otherwise honor its obligations. Credit risk associated with investments in fixed-income securities relates to the ability of the issuer to make scheduled payments of principal and interest on an obligation. If the fund invests in fixed-income securities, it will be subject to varying degrees of risk that the issuers of the securities will have their credit ratings downgraded or will default, potentially reducing such fund’s share price and income level. Nearly all fixed-income securities are subject to some credit risk, which may vary depending upon whether the issuers of the securities are corporations, domestic or foreign governments, or their subdivisions or instrumentalities. U.S. government securities are subject to varying degrees of credit risk depending upon whether the securities are supported by the full faith and credit of the United States; the ability to borrow from the U.S. Treasury; only by the credit of the issuing U.S. government agency, instrumentality, or corporation; or otherwise supported by the United States. For example, issuers of many types of U.S. government securities (e.g., the Federal Home Loan Mortgage Corporation (“Freddie Mac”), Federal National Mortgage Association (“Fannie Mae”), and Federal Home Loan Banks), although chartered or sponsored by Congress, are not funded by congressional appropriations, and their fixed-income securities, including asset-backed and mortgage-backed securities, are neither guaranteed nor insured by the U.S. government. An agency of the U.S. government has placed Fannie Mae and Freddie Mac into conservatorship, a statutory process with the objective of returning the entities to normal business operations. It is unclear what effect this conservatorship will have on the securities issued or guaranteed by Fannie Mae or Freddie Mac. As a result, these securities are subject to more credit risk than U.S. government securities that are supported by the full faith and credit of the United States (e.g., U.S. Treasury bonds). When a fixed-income security is not rated, a manager may have to assess the risk of the security itself. Asset-backed securities, whose principal and interest payments are supported by pools of other assets, such as credit card receivables and automobile loans, are subject to further risks, including the risk that the obligors of the underlying assets default on payment of those assets. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Funds that invest in below-investment-grade securities, also called junk bonds (e.g., fixed-income securities rated Ba or lower by Moody’s Investors Service, Inc. or BB or lower by S&amp;P Global Ratings or Fitch Ratings, as applicable, at the time of investment, or determined by a manager to be of comparable quality to securities so rated) are subject to increased credit risk. The sovereign debt of many foreign governments, including their subdivisions and instrumentalities, falls into this category. Below-investment-grade securities offer the potential for higher investment returns than higher-rated securities, but they carry greater credit risk: their issuers’ continuing ability to meet principal and interest payments is considered speculative, they are more susceptible to real or perceived adverse economic and competitive industry conditions, and they may be less liquid than higher-rated securities. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, the fund is exposed to credit risk to the extent that it makes use of OTC derivatives (such as forward foreign currency contracts and/or swap contracts) and engages to a significant extent in the lending of fund securities or the use of repurchase agreements. OTC derivatives transactions can be closed out with the other party to the transaction. If the counterparty defaults, the fund will have contractual remedies, but there is no assurance that the counterparty will be able to meet its contractual obligations or that, in the event of default, the fund will succeed in enforcing them. The fund, therefore, assumes the risk that it may be unable to obtain payments owed to it under OTC derivatives contracts or that those payments may be delayed or made only after the fund has incurred the costs of litigation. While the Subadvisor intends to monitor the creditworthiness of contract counterparties, there can be no assurance that the counterparty will be in a position to meet its obligations, especially during unusually adverse market conditions. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Creditor Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Debt is generally subject to various creditor risks, including, but not limited to: (i) the possible invalidation of a loan as a “fraudulent conveyance” under the relevant creditors’ rights laws; (ii) so called lender liability claims by the issuer of the obligations; and (iii) environmental liabilities that may arise with respect to collateral securing the obligations. Additionally, adverse credit events with respect to any underlying property, such as missed or delayed payment of interest and/or principal, bankruptcy, receivership or distressed exchange, can significantly diminish the value of an investment in any such property. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Distribution Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">There can be no assurance that monthly distributions paid by the fund to Shareholders will be maintained at current levels or increase over time. The fund’s cash available for distribution may vary widely over the short- and long-term. If, for any calendar year, the total distributions made exceed the fund’s net investment taxable income and net capital gain, the excess generally will be treated as a return of capital to each Shareholder (up to the amount of the Shareholder’s basis in his or her share of the fund) and thereafter as gain from the sale of Shares. The amount treated as a return of capital reduces the Shareholder’s adjusted basis in his or her Shares, thereby increasing his or her potential gain or reducing his or her potential loss on the subsequent sale of his or her Shares. Distributions in any year may include a substantial return of capital component. Distributions are not fixed but are declared at the discretion of the Board. Shareholders who periodically receive the payment of a dividend or other distribution consisting of a return of capital may be under the impression that they are receiving net profits when they are not. Shareholders should not assume that the source of a distribution from the fund is net profit. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Economic and Market Events Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Events in certain sectors historically have resulted, and may in the future result, in an unusually high degree of volatility in the financial markets, both domestic and foreign. These events have included, but are not limited to: bankruptcies, corporate restructurings, and other similar events; bank failures; governmental efforts to limit short selling and high frequency trading; measures to address U.S. federal and state budget deficits; social, political and economic instability in Europe; economic stimulus by the Japanese central bank; dramatic changes in energy prices and currency exchange rates; and China’s economic slowdown. Interconnected global economies and financial markets increase the possibility that conditions in one country or region might adversely impact issuers in a different country or region. Both domestic and foreign equity markets have experienced increased volatility and turmoil, with issuers that have exposure to the real estate, mortgage, and credit markets particularly affected. Financial institutions could suffer losses as interest rates were to rise or economic conditions deteriorate. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, relatively high market volatility and reduced liquidity in credit and fixed-income markets may adversely affect many issuers worldwide. Actions taken by the U.S. Federal Reserve (Fed) or foreign central banks to stimulate or stabilize economic growth, such as interventions in currency markets, could cause high volatility in the equity and fixed-income markets. Reduced liquidity may result in less money being available to purchase raw materials, goods, and services from emerging markets, which may, in turn, bring down the prices of these economic staples. It may also result in emerging-market issuers having more difficulty obtaining financing, which may, in turn, cause a decline in their securities prices. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">In response to certain economic conditions, including periods of high inflation, governmental authorities and regulators may respond with significant fiscal and monetary policy changes such as raising interest rates. The fund may be subject to heightened interest rate risk when the Fed raises interest rates. Recent and potential future changes in government monetary policy may affect interest rates. It is difficult to accurately predict the timing, frequency or magnitude of potential interest rate increases or decreases by the Fed and the evaluation of macro-economic and other conditions that could cause a change in approach in the future. If the Fed and other central banks increase the federal funds rate and equivalent rates, such increases generally will cause market interest rates to rise and could cause the value of the fund’s investments, and the fund’s NAV, to decline, potentially suddenly and significantly. As a result, the fund may experience high redemptions and, as a result, increased portfolio turnover, which could increase the costs that the fund incurs and may negatively impact the fund’s performance. </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, as the Fed increases the target Fed funds rate, any such rate increases among other factors, could cause markets to experience continuing high volatility. A significant increase in interest rates may cause a decline in the market for equity securities. These events and the possible resulting market volatility may have an adverse effect on the fund. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Political turmoil within the United States and abroad may also impact the fund. Although the U.S. government has honored its credit obligations, it remains possible that the United States could default on its obligations. While it is impossible to predict the consequences of such an unprecedented event, it is likely that a default by the United States would be highly disruptive to the United States and global securities markets and could significantly impair the value of the fund’s investments. Similarly, political events within the United States at times have resulted, and may in the future result, in a shutdown of government services, which could negatively affect the U.S. economy, decrease the value of many fund investments, and increase uncertainty in or impair the operation of the United States or other securities markets. In recent years, the U.S. renegotiated many of its global trade relationships and imposed or threatened to impose significant import tariffs. These actions could lead to price volatility and overall declines in U.S. and global investment markets. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Uncertainties surrounding the sovereign debt of a number of European Union (EU) countries and the viability of the EU have disrupted and may in the future disrupt markets in the United States and around the world. If one or more countries leave the EU or the EU dissolves, the global securities markets likely will be significantly disrupted. On January 31, 2020, the United Kingdom (UK) left the EU, commonly referred to as “Brexit,” the UK ceased to be a member of the EU and the UK and EU entered into a Trade and Cooperation Agreement. While the full impact of Brexit is unknown, Brexit has already resulted in volatility in European and global markets. There remains significant market uncertainty regarding Brexit’s ramifications, and the range and potential implications of possible political, regulatory, economic, and market outcomes are difficult to predict. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">A widespread health crisis such as a global pandemic could cause substantial market volatility, exchange trading suspensions and closures, which may lead to less liquidity in certain instruments, industries, sectors or the markets generally, and may ultimately affect fund performance. For example, the coronavirus (COVID-19) pandemic has resulted and may continue to result in significant disruptions to global business activity and market volatility due to disruptions in market access, resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. The impact of a health crisis and other epidemics and pandemics that may arise in the future, could affect the global economy in ways that cannot necessarily be foreseen at the present time. A health crisis may exacerbate other pre-existing political, social and economic risks. Any such impact could adversely affect the fund’s performance, resulting in losses to your investment. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Political and military events, including in Ukraine, North Korea, Russia, Venezuela, Iran, Syria, and other areas of the Middle East, and nationalist unrest in Europe and South America, also may cause market disruptions. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As a result of continued political tensions and armed conflicts, including the Russian invasion of Ukraine commencing in February of 2022, the extent and ultimate result of which are unknown at this time, the United States and the EU, along with the regulatory bodies of a number of countries, have imposed economic sanctions on certain Russian corporate entities and individuals, and certain sectors of Russia’s economy, which may result in, among other things, the continued devaluation of Russian currency, a downgrade in the country’s credit rating, and/or a decline in the value and liquidity of Russian securities, property or interests. These sanctions could also result in the immediate freeze of Russian securities and/or funds invested in prohibited assets, impairing the ability of the fund to buy, sell, receive or deliver those securities and/or assets. These sanctions or the threat of additional sanctions could also result in Russia taking counter measures or retaliatory actions, which may further impair the value and liquidity of Russian securities. The United States and other nations or international organizations may also impose additional economic sanctions or take other actions that may adversely affect Russia-exposed issuers and companies in various sectors of the Russian economy. Any or all of these potential results could lead Russia’s economy into a recession. Economic sanctions and other actions against Russian institutions, companies, and individuals resulting from the ongoing conflict may also have a substantial negative impact on other economies and securities markets both regionally and globally, as well as on companies with operations in the conflict region, the extent to which is unknown at this time. The United States and the EU have also imposed similar sanctions on Belarus for its support of Russia’s invasion of Ukraine. Additional sanctions may be imposed on Belarus and other countries that support Russia. Any such sanctions could present substantially similar risks as those resulting from the sanctions imposed on Russia, including substantial negative impacts on the regional and global economies and securities markets. </div><div></div><div><div><div style="line-height:normal;display: inline;"><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, there is a risk that the prices of goods and services in the United States and many foreign economies may decline over time, known as deflation. Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse. Further, there is a risk that the present value of assets or income from investments will be less in the future, known as inflation. Inflation rates may change frequently and drastically as a result of various factors, including unexpected shifts in the domestic or global economy, and the fund’s investments may be aff<div style="display:inline;">ec</div>ted, wh<div style="display:inline;">ic</div>h may reduce the fund’s performance. Further, inflation may lead to a rise in interest rates, which may negatively affect the value of debt instruments held by the fund, resulting in a negative impact on the fund’s performance. Generally, securities issued in emerging markets are subject to a greater risk of inflationary or deflationary forces, and more developed markets are better able to use monetary policy to normalize markets. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Equity Securities Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Common and preferred stocks represent equity ownership in a company. Stock markets are volatile. The price of equity securities will fluctuate, and can decline and reduce the value of a fund investing in equities. The price of equity securities fluctuates based on changes in a company’s financial condition and overall market and economic conditions. The value of equity securities purchased by a fund could decline if the financial condition of the companies in which the fund is invested declines, or if overall market and economic conditions deteriorate. An issuer’s financial condition could decline as a result of poor management decisions, competitive pressures, technological obsolescence, undue reliance on suppliers, labor issues, shortages, corporate restructurings, fraudulent disclosures, irregular and/or unexpected trading activity among retail investors, or other factors. Changes in the financial condition of a single issuer can impact the market as a whole. Even a fund that invests in high-quality, or blue chip, equity securities, or securities of established companies with large market capitalizations (which generally have strong financial characteristics), can be negatively impacted by poor overall market and economic conditions. Companies with large market capitalizations may also have less growth potential than smaller companies and may be less able to react quickly to changes in the marketplace. The fund generally does not attempt to time the market. Because of its exposure to equities, the possibility that stock market prices in general will decline over short or extended periods subjects the fund to unpredictable declines in the value of its investments, as well as periods of poor performance. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Growth Investment Style Risk. </div></div>Certain equity securities (generally ref<div style="display:inline;">err</div>ed to as growth securities) are pur<div style="display:inline;">chased</div> primarily because a manager believes that these securities will experience relatively rapid earnings growth. Growth securities typically trade at higher multiples of current earnings than other securities. Growth securities are often more sensitive to market fluctuations than other securities because their market prices are highly sensitive to future earnings expectations. At times when it appears that these expectations may not be met, growth stock prices typically fall. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Value Investment Style Risk. </div></div>Certain equity securities (generally referred to as value securities) are purchased primarily because they are selling at prices below what the manager believes to be their fundamental value and not necessarily because the issuing companies are expected to experience significant earnings growth. The fu<div style="display:inline;">nd</div> bears the <div style="display:inline;">ris</div>k that the companies that issued these securities may not overcome the adverse business developments or other factors causing their securities to be perceived by the manager to be underpriced or that the market may never come to recognize their fundamental value. A value security may not increase in price, as anticipated by the manager investing in such securities, if other investors fail to recognize the company’s value and bid up the price or invest in markets favoring faster growing companies. The fund’s strategy of investing in value securities also carries the risk that in certain markets, value securities will underperform growth securities. In addition, securities issued by U.S. entities with substantial foreign operations may involve risks relating to economic, political or regulatory conditions in foreign countries. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">ESG integration risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The manager considers ESG factors that it deems relevant or additive, along with other material factors and analysis, when managing the fund. The portion of the fund’s investments for which the manager considers these ESG factors may vary, and could increase or decrease over time. In certain situations, the extent to which these ESG factors may be applied according to the manager’s integrated investment process may not include U.S. Treasuries, government securities, or other asset classes. ESG factors may include, but are not limited to, matters regarding board diversity, climate change policies, and supply chain and human rights policies. Incorporating ESG criteria and making investment decisions based on certain ESG characteristics, as determined by the manager, carries the risk the fund may perform differently, including underperforming, funds that do not utilize ESG criteria, or funds that utilize different ESG criteria. Integration of ESG factors into the fund’s investment process may result in the manager making different investments for the fund than for a fund with a similar investment universe and/or investment style that does not incorporate such considerations in its investment strategy or processes, and the fund’s investment performance may be affected. Because ESG factors are one of many considerations for the fund, the manager may nonetheless include companies with low ESG characteristics or exclude companies with high ESG characteristics in the fund’s investments. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The ESG characteristics utilized in the fund’s investment process may change over time, and different ESG characteristics may be relevant to different investments. Although the manager has established its own structure to oversee ESG integration in accordance with the fund’s investment objective and strategies, successful integration of ESG factors will depend on the manager’s skill in researching, identifying, and applying these factors, as well as on the availability of relevant data. The method of evaluating ESG factors and subsequent impact on portfolio composition, performance, proxy voting decisions and other factors, is subject to the interpretation of the manager in accordance with the fund’s investment objective and strategies. ESG factors may be evaluated differently by different managers, and may not carry the same meaning to all investors and managers. The manager may employ active shareowner engagement to raise ESG issues with the management of select portfolio companies. The regulatory landscape with respect to ESG investing in the United States is evolving and any future rules or regulations may require the fund to change its investment process with respect to ESG integration. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Investment-Grade Fixed-Income Securities in the Lowest Rating Category Risk.</div></div></div> Investment-grade fixed-income securities in the lowest rating category (such as Baa by Moody’s Investors Service, Inc. or BBB by S&amp;P Global Ratings or Fitch Ratings, as applicable, and comparable unrated securities) involve a higher degree of risk than fixed-income securities in the higher rating categories. While such securities are considered investment-grade quality and are deemed to have adequate capacity for payment of principal and interest, such securities lack outstanding investment characteristics and have speculative characteristics as well. For example, changes in economic conditions or other circumstances are more likely to lead to a weakened capacity to make principal and interest payments than is the case with higher-grade securities. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Prepayment of Principal Risk.</div></div></div> Many types of debt securities, including floating-rate loans, are subject to prepayment risk. Prepayment risk is the risk that, when interest rates fall, certain types of obligations will be paid off by the borrower more quickly than originally anticipated and the fund may have to invest the proceeds in securities with lower yields. Securities subject to prepayment risk can offer less potential for gains when the credit quality of the issuer improves. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Extension Risk.</div></div></div> Extension risk is the danger that borrowers will defer prepayments due to market conditions. Extension risk is generally a concern in secondary market, structured-credit product investments. For instance, rising interest rates might discourage homeowners from refinancing their mortgages, which reduces prepayment flows. That extends the duration of the loans in a mortgage-backed security beyond what the valuation and risk models initially predicted. As a result, in a period of rising interest rates, such securities may exhibit additional volatility and may lose value. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Hedging, Derivatives, and Other Strategic Transactions Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The ability of the fund to utilize hedging, derivatives, and other strategic transactions to benefit the fund will depend in part on its Subadvisor’s ability to predict pertinent market movements and market risk, counterparty risk, credit risk, interest-rate risk, and other risk factors, none of which can be assured. The skills required to utilize hedging and other strategic transactions are different from those needed to select the fund’s securities. Even if the Subadvisor only uses hedging and other strategic transactions in the fund primarily for hedging purposes or to gain exposure to a particular securities market, if the transaction does not have the desired outcome, it could result in a significant loss to the fund. The amount of loss could be more than the principal amount invested. These transactions may also increase the volatility of the fund and may involve a small investment of cash relative to the magnitude of the risks assumed, thereby magnifying the impact of any resulting gain or loss. For example, the potential loss from the use of futures can exceed the fund’s initial investment in such contracts. In addition, these transactions could result in a loss to the fund if the counterparty to the transaction does not perform as promised. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in derivatives, which are financial contracts with a value that depends on, or is derived from, the value of underlying assets, reference rates, or indexes. Derivatives may relate to stocks, bonds, interest rates, currencies or currency exchange rates, and related indexes. The fund may use derivatives for many purposes, including for hedging and as a substitute for direct investment in securities or other assets. Derivatives may be used in a way to efficiently adjust the exposure of the fund to various securities, markets, and currencies without the fund actually having to sell existing investments and make new investments. This generally will be done when the adjustment is expected to be relatively temporary or in anticipation of effecting the sale of fund assets and making new investments over time. Further, </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">since many derivatives have a leverage component, adverse changes in the value or level of the underlying asset, reference rate, or index can result in a loss substantially greater than the amount invested in the derivative itself. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. When the fund uses derivatives for leverage, investments in the fund will tend to be more volatile, resulting in larger gains or losses in response to market changes. To limit risks associated with leverage, the fund is required to comply with Rule 18f-4 under the 1940 Act (the “Derivatives Rule”) as outlined below. For a description of the various derivative instruments the fund may utilize, refer to the SAI. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The regulation of the U.S. and non-U.S. derivatives markets has undergone substantial change in recent years and such change may continue. In particular, effective August 19, 2022 (the “Compliance Date”), the Derivatives Rule replaced the asset segregation regime of Investment Company Act Release No. 10666 (“Release 10666”) with a new framework for the use of derivatives by registered funds. On the Compliance Date, the SEC rescinded Release 10666 and withdrew no-action letters and similar guidance addressing a fund’s use of derivatives and began requiring funds to satisfy the requirements of the Derivatives Rule. As a result, on or after the Compliance Date, the fund will no longer engage in “segregation” or “coverage” techniques with respect to derivatives transactions and will instead comply with the applicable requirements of the Derivatives Rule. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Derivatives Rule mandates that the fund adopt and/or implement: (i) value-at-risk limitations (“VaR”); (ii) a written derivatives risk management program; (iii) new Board oversight responsibilities; and (iv) new reporting and recordkeeping requirements. In the event that a fund’s derivative exposure is 10% or less of its net assets, excluding certain currency and interest rate hedging transactions, it can elect to be classified as a limited derivatives user (“Limited Derivatives User”) under the Derivatives Rule, in which case the fund is not subject to the full requirements of the Derivatives Rule. Limited Derivatives Users are excepted from VaR testing, implementing a derivatives risk management program, and certain Board oversight and reporting requirements mandated by the Derivatives Rule. However, a Limited Derivatives User is still required to implement written compliance policies and procedures reasonably designed to manage its derivatives risks. The Derivatives Rule also provides special treatment for reverse repurchase agreements, similar financing transactions and unfunded commitment agreements. Specifically, the fund may elect whether to treat reverse repurchase agreements and similar financing transactions as “derivatives transactions” subject to the requirements of the Derivatives Rule or as senior securities equivalent to bank borrowings for purposes of Section 18 of the 1940 Act. In addition, a fund, including money market funds, may invest in a security on a when-issued or forward-settling basis, or with a non-standard settlement cycle, and the transaction will be deemed not to involve a senior security, provided that: (i) the fund intends to physically settle the transaction; and (ii) the transaction will settle within 35 days of its trade date. At any time after the date of this Prospectus, legislation may be enacted that could negatively affect the assets of the fund. Legislation or regulation may change the way in which the fund itself is regulated. The Advisor cannot predict the effects of any new governmental regulation that may be implemented, and there can be no assurance that any new governmental regulation will not adversely affect the fund’s ability to achieve its investment objectives. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The use of derivative instruments may involve risks different from, or potentially greater than, the risks associated with investing directly in securities and other, more traditional assets. In particular, the use of derivative instruments exposes the fund to the risk that the counterparty to an OTC derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction, although either party may engage in an offsetting transaction that puts that party in the same economic position as if it had closed out the transaction with the counterparty or may obtain the other party’s consent to assign the transaction to a third party. If the counterparty defaults, the fund will have contractual remedies, but there is no assurance that the counterparty will meet its contractual obligations or that, in the event of default, the fund will succeed in enforcing them. For example, because the contract for each OTC derivatives transaction is individually negotiated with a specific counterparty, the fund will be subject to the risk that a counterparty may interpret contractual terms (e.g., the definition of default) differently than the fund when the fund seeks to enforce its contractual rights. If that occurs, the cost and unpredictability of the legal proceedings required for the fund to enforce its contractual rights may lead it to decide not to pursue its claims against the counterparty. The fund, therefore, assumes the risk that it may be unable to obtain payments owed to it under OTC derivatives contracts or that those payments may be delayed or made only after the fund has incurred the costs of litigation. While the Subadvisor intends to monitor the creditworthiness of counterparties, there can be no assurance that a counterparty will meet its obligations, especially during unusually adverse market conditions. To the extent the fund contracts with a limited number of counterparties, the fund’s risk will be concentrated and events that affect the creditworthiness of any of those counterparties may have a pronounced effect on the fund. Derivatives are also subject to a number of other risks, including market risk, liquidity risk, and operational risk. Since the value of derivatives is calculated and derived from the value of other assets, instruments, or references, there is a risk that they will be improperly valued. Derivatives also involve the risk that changes in their value may not correlate perfectly with the assets, rates, or indexes they are designed to hedge or closely track. Suitable derivatives transactions may not be available in all circumstances. The fund is also subject to the risk that the counterparty closes out the derivatives transactions upon the occurrence of certain triggering events. In addition, a Subadvisor may determine not to use derivatives to hedge or otherwise reduce risk exposure. Government legislation or regulation could affect the use of derivatives transactions and could limit the fund’s ability to pursue its investment strategies. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">A detailed discussion of various hedging and other strategic transactions appears in the SAI. To the extent that the fund utilizes the following list of certain derivatives and other strategic transactions, it will be subject to associated risks. The main risks of each appear below. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Futures Contracts.</div></div> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), and risk of disproportionate loss are the principal risks of engaging in transactions involving futures contracts. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Interest-Rate Swaps.</div></div> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk, and risk of disproportionate loss are the principal risks of engaging in transactions involving interest-rate swaps. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Options.</div></div> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), and risk of disproportionate loss are the principal risks of engaging in transactions involving options. Counterparty risk does not apply to exchange-traded options. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Reverse Repurchase Agreements</div></div>. An event of default or insolvency of the counterparty to a reverse repurchase agreement could result in delays or restrictions with respect to the fund’s ability to dispose of the underlying securities. A reverse repurchase agreement may be considered a form of leverage and may, therefore, increase fluctuations in the fund’s NAV. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Swaps.</div></div> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk, settlement risk, risk of default of the underlying reference obligation, and risk of disproportionate loss are the principal risks of engaging in transactions involving swaps. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Illiquidity of Shares </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund is a closed-end investment company designed primarily for long-term investors and is not intended to be a trading vehicle. An investment in the Shares, unlike an investment in a traditional listed closed-end fund, should be considered illiquid. The Shares are appropriate only for investors who are seeking an investment in less liquid portfolio investments within an illiquid fund. The fund does not currently intend to list Shares for trading on any national securities exchange. There is no secondary trading market for Shares, and it is not expected that a secondary market will develop. Shares therefore are not readily marketable. Because the fund is a closed-end investment company, Shares in the fund may not be tendered for repurchase on a daily basis, and they may not be exchanged for shares of any other fund. In order to provide liquidity to Shareholders, the fund is structured as an “interval fund” and conducts periodic repurchase offers for a portion of its outstanding Shares pursuant to Rule 23c-3 under the 1940 Act, as described herein. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Inflation/Deflation Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Inflation risk is the risk that the value of assets or income from investment will be worth less in the future, as inflation decreases the value of money. As inflation increases, the real value of the Shares and distributions on those Shares can decline. In addition, during any periods of rising inflation, interest rates on any borrowings by the fund may increase, which would tend to further reduce returns to the holders of Shares. Deflation risk is the risk that prices throughout the economy decline over time, which may have an adverse effect on the market valuation of companies, their assets and revenues. In addition, deflation may have an adverse effect on the creditworthiness of issuers and may make issuer default more likely, which may result in a decline in the value of the fund’s portfolio. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Lending Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may originate loans to, or purchase, assignments of or participations in loans made to, various issuers, including distressed companies. Such investments may include senior secured, junior secured and mezzanine loans and other secured and unsecured debt that has been recently originated or that trade on the secondary market. The value of the fund’s investment in loans may be detrimentally affected to the extent a borrower defaults on its obligations, there is insufficient collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted loan. However, there can be no assurance that the value assigned by the fund to collateral underlying a loan of the fund can be realized upon liquidation, nor can there be any assurance that collateral will retain its value. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Moreover, loans may also be supported by collateral, the value of which may fluctuate. In addition, active lending/origination by the fund may subject it to additional regulation. Finally, there may be a monetary, as well as a time cost involved in collecting on defaulted loans and, if applicable, taking possession of various types of collateral. Should the fund need to collect on a defaulted loan, litigation could result. In addition, even before litigation is commenced, the fund could experience substantial costs in trying to collect on defaulted investments, such as legal fees, collection agency fees, or discounts related to the assignment of a defaulted loan to a third party. Any litigation may consume substantial amounts of the Advisor’s and the Subadvisor’s time and attention, and that time and the devotion of these resources to litigation may, at times, be disproportionate to the amounts at stake in the litigation. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">There will be no limits with respect to loan origination by the fund other than: (i) the diversification limits of the 1940 Act; and (ii) the restrictions on investments involving the Subadvisor’s affiliates (e.g., securitizations where the Subadvisor is sponsor). </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Leverage Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Leverage creates risks for Shareholders, including the likelihood of greater volatility of NAV and market price of, and distributions from, the Shares and the risk that fluctuations in the costs of borrowings may affect the return to Shareholders. To the extent the income derived from investments purchased with funds received from leverage exceeds the cost of leverage, the fund’s distributions will be greater than if leverage had not been used. Conversely, if the income from the investments purchased with such funds is not sufficient to cover the cost of leverage, the amount available for distribution to Shareholders will be less than if leverage had not been used. In the latter case, the Advisor, in its best judgment, may nevertheless determine to maintain the fund’s leveraged position if it deems such action to be appropriate. While the fund has preferred shares or borrowings outstanding, an increase in short-term rates would also result in an increased cost of leverage, which would adversely affect the fund’s income available for distribution. There can be no assurance that a leveraging strategy will be successful. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Leverage may be achieved through the purchase of certain derivative instruments. The fund’s use of derivative instruments exposes the fund to special risks. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Management Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund is subject to management risk because it relies on the Subadvisor’s ability to pursue the fund’s investment objective, subject to the oversight of the Advisor and the Board. The Subadvisor applies investment techniques and risk analyses in making investment decisions for the fund, but there can be no guarantee that it will produce the desired results. The Subadvisor’s securities selections and other investment decisions might produce a loss or cause the fund to underperform when compared to other funds with similar investment goals. If one or more key individuals leave the employ of the Subadvisor, then the Subadvisor may not be able to hire qualified replacements, or may require an extended time to do so. This could prevent the fund from achieving its investment objective. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Natural Disasters, Adverse Weather Conditions, and Climate Change </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Certain areas of the world may be exposed to adverse weather conditions, such as major natural disasters and other extreme weather events, including hurricanes, earthquakes, typhoons, floods, tidal waves, tsunamis, volcanic eruptions, wildfires, droughts, windstorms, coastal storm surges, heat waves, and rising sea levels, among others. Some countries and regions may not have the infrastructure or resources to respond to natural disasters, making them more economically sensitive to environmental events. Such disasters, and the resulting damage, could have a severe and negative impact on the fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the fund invests to conduct their businesses in the manner normally conducted. Adverse weather conditions also may have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Climate change, which is the result of a change in global or regional climate patterns, may increase the frequency and intensity of such adverse weather conditions, resulting in increased economic impact, and may pose long-term risks to the fund’s investments. The future impact of climate change is difficult to predict but may include changes in demand for certain goods and services, supply chain disruption, changes in production costs, increased legislation, regulation, international accords and compliance-related costs, changes in property and security values, availability of natural resources and displacement of peoples. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for issuers in which the fund invests. These developments may create demand for new products or services, including, but not limited to, increased demand for goods that result in lower emissions, increased demand for generation and transmission of energy from alternative energy sources and increased competition to develop innovative new products and technologies. These developments may also decrease demand for existing products or services, including, but not limited to, decreased demand for goods that produce significant greenhouse gas emissions and decreased demand for services related to carbon based energy sources, such as drilling services or equipment maintenance services. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Operational and Cybersecurity Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">With the increased use of technologies, such as mobile devices and cloud-based service offerings and the dependence on the internet and computer systems to perform necessary business functions, the fund’s service providers are susceptible to operational and information or cybersecurity risks that could result in losses to the fund and its Shareholders. Cybersecurity breaches are either intentional or unintentional events that allow an unauthorized party to gain access to fund assets, customer data, or proprietary information, or cause the fund or fund service providers to suffer data corruption or lose operational functionality. Intentional cybersecurity incidents include: unauthorized access to systems, networks, or devices (such as through “hacking” activity or “phishing”); infection from computer viruses or other malicious software code; and attacks that shut down, disable, slow, or otherwise disrupt operations, business processes, or website access or functionality. Cyberattacks can also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on the service providers’ systems or websites rendering them unavailable to intended users or via “ransomware” that renders the systems inoperable until appropriate actions are taken. In addition, unintentional incidents can occur, such as the inadvertent release of confidential information. </div></div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">A cybersecurity breach could result in the loss or theft of customer data or funds, loss or theft of proprietary information or corporate data, physical damage to a computer or network system, or costs associated with system repairs, any of which could have a substantial impact on the fund. For example, in a denial of service, fund Shareholders could lose access to their electronic accounts indefinitely, and employees of the Advisor, the Subadvisor, or the fund’s other service providers may not be able to access electronic systems to perform critical duties for the fund, such as trading, NAV calculation, shareholder accounting, or fulfillment of fund share purchases and share repurchases Cybersecurity incidents could cause the fund, the Advisor, the Subadvisor, or other service provider to incur regulatory penalties, reputational damage, compliance costs associated with corrective measures, litigation costs, or financial loss. They may also result in violations of applicable privacy and other laws. In addition, such incidents could affect issuers in which the fund invests, thereby causing the fund’s investments to lose value. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Cyber-events have the potential to affect materially the fund and the Advisor’s relationships with accounts, shareholders, clients, customers, employees, products, and service providers. The fund has established risk management systems reasonably designed to seek to reduce the risks associated with cyber-events. There is no guarantee that the fund will be able to prevent or mitigate the impact of any or all cyber-events. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund is exposed to operational risk arising from a number of factors, including, but not limited to, human error, processing and communication errors, errors of the fund’s service providers, counterparties, or other third parties, failed or inadequate processes, and technology or system failures. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Advisor, the Subadvisor, and their respective affiliates have established risk management systems that seek to reduce cybersecurity and operational risks, and business continuity plans in the event of a cybersecurity breach or operational failure. However, there are inherent limitations in such plans, including that certain risks have not been identified, and there is no guarantee that such efforts will succeed, especially since none of the Advisor, the Subadvisor, or their respective affiliates controls the cybersecurity or operations systems of the fund’s third-party service providers (including the fund’s custodian), or those of the issuers of securities in which the fund invests. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, other disruptive events, including (but not limited to) natural disasters and public health crises, may adversely affect the fund’s ability to conduct business, in particular if the fund’s employees or the employees of its service providers are unable or unwilling to perform their responsibilities as a result of any such event. Even if the fund’s employees and the employees of its service providers are able to work remotely, those remote work arrangements could result in the fund’s business operations being less efficient than under normal circumstances, could lead to delays in its processing of transactions, and could increase the risk of cyber-events. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Potential Consequences of Periodic Repurchase Offers </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund is a closed-end investment company structured as an “interval fund” and is designed for long-term investors. There is no secondary market for the Shares and the fund expects that no secondary market will develop. In order to provide liquidity to Shareholders, the fund, subject to applicable law, conducts regular repurchase offers of its outstanding Shares at NAV per share. Repurchases generally will be funded from available cash or sales of portfolio securities. However, if at any time cash and other liquid assets held by the fund are not sufficient to meet the fund’s repurchase obligations, the fund may, if necessary, sell investments. The sale of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the fund’s NAV per share. The fund is also permitted to borrow up to the maximum extent permitted under the 1940 Act to meet such repurchase obligations. The fund does not currently intend to borrow to finance repurchases, although it may invest in dollar rolls. Moreover, a reduction in the size of the fund through repurchases may result in untimely sales of portfolio securities, may increase the fund’s portfolio turnover, and may limit the ability of the fund to participate in new investment opportunities or to achieve its investment objective. If a repurchase offer is oversubscribed, the fund will repurchase the Shares tendered on a pro rata basis, and Shareholders will have to wait until the next repurchase offer to make another repurchase request. As a result, Shareholders may be unable to liquidate all or a given percentage of their investment in the fund during a particular repurchase offer. A Shareholder may be subject to market and other risks, and the NAV per share of Shares tendered in a repurchase offer may decline between the Repurchase Request Deadline (as defined herein) and the date on which the NAV per share for tendered Shares is determined. In addition, to the extent the fund sells portfolio holdings in order to fund repurchase requests, the repurchase of Shares by the fund will be a taxable event for the Shareholders of repurchased Shares, and potentially even for Shareholders that do not participate in the repurchase offer. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Regulatory Changes Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Legal, tax and regulatory changes could occur and may adversely affect the fund and its ability to pursue its investment strategies and/or increase the costs of implementing such strategies. New (or revised) laws or regulations may be imposed by the CFTC, the SEC, the IRS, the U.S. Federal Reserve or other banking regulators, other governmental regulatory authorities or self-regulatory organizations that supervise the financial markets that could adversely affect the fund. In particular, these agencies are implementing a variety of new rules pursuant to financial reform legislation in the United States. The EU (and some other countries) are implementing similar requirements. The fund also may be adversely affected by changes in the enforcement or interpretation of existing statutes and rules by these governmental regulatory authorities or self-regulatory organizations. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, the securities and futures markets are subject to comprehensive statutes, regulations and margin requirements. The CFTC, the SEC, the Federal Deposit Insurance Corporation, other regulators and self-regulatory organizations and exchanges are authorized under these statutes, regulations and otherwise to take extraordinary actions in the event of market emergencies. The fund and the Advisor historically have been eligible for exemptions from certain regulations. However, there is no assurance that the fund and the Advisor will continue to be eligible for such exemptions. The CFTC and certain futures exchanges have established limits, referred to as “position limits,” on the maximum net long or net short positions which any person may hold or control in particular options and futures contracts. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Current rules related to credit risk retention requirements for asset backed securities may increase the cost to originators, securitizers and, in certain cases, asset managers of securitization vehicles in which the fund may invest. The impact of the risk retention rules on the securitization markets is uncertain. These requirements may increase the costs to originators, securitizers, and, in certain cases, collateral managers of securitization vehicles in which the fund may invest, which costs could be passed along to such fund as an investor in such vehicles. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Tax Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">To qualify for the special tax treatment available to regulated investment companies, the fund must: (i) derive at least 90% of its annual gross income from certain kinds of investment income; (ii) meet certain asset diversification requirements at the end of each quarter; and (iii) distribute in each taxable year at least the sum of 90% of its net investment income (including net interest income and net short term capital gain and 90% of its net exempt interest income). If the fund fails to meet any of these requirements, subject to the opportunity to cure such failures under applicable provisions of the Code, the fund will be subject to U.S. federal income tax at regular corporate rates on its taxable income, including its net capital gain, even if such income were distributed to Shareholders. All distributions by the fund from earnings and profits, including distributions of net capital gain (if any), would be taxable to the Shareholders as ordinary income. To the extent designated by the fund, such distributions generally would be eligible (i) to be treated as qualified dividend income in the case of individual and other non-corporate Shareholders and (ii) for the dividends received deduction in the case of corporate Shareholders, provided that in each case the Shareholder meets applicable holding period requirements. In addition, in order to requalify for taxation as a regulated investment company, the fund might be required to recognize unrealized gain, pay substantial taxes and interest, and make certain distributions. See “Federal Income Tax Matters.” </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The tax treatment and characterization of the fund’s distributions may vary significantly from time to time due to the nature of the fund’s investments. The ultimate tax characterization of the fund’s distributions in a calendar year may not finally be determined until after the end of that calendar year. The fund may make distributions during a calendar year that exceed the fund’s net investment income and net realized capital gain for that year. In such a situation, the amount by which the fund’s total distributions exceed net investment income and net realized capital gain generally would be treated as a return of capital up to the amount of the Shareholder’s tax basis in his or her Shares, with any amounts exceeding such basis treated as gain from the sale of his or her Shares. The fund’s income distributions that qualify for favorable tax treatment may be affected by the IRS’s interpretations of the Code and future changes in tax laws and regulations. See “Federal Income Tax Matters.” </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">No assurance can be given as to what percentage of the distributions paid on Shares, if any, will consist of long-term capital gain or what the tax rates on various types of income will be in future years. See “Federal Income Tax Matters.” </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Valuation Risk. </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Board has designated the Advisor as the valuation designee to perform fair value functions for the fund in accordance with the Advisor’s valuation policies and procedures. In accordance with these policies and procedures, the Advisor values the fund’s investments at fair value as determined in good faith when market quotations are not readily available or are deemed to be unreliable. Fair value pricing may require subjective determinations about the value of a security or other asset. As a result, there can be no assurance that fair value pricing will reflect actual market value, and it is possible that the fair value determined for a security or other asset will be materially different from quoted or published prices, from the prices used by others for the same security or other asset and/or from the value that actually could be or is realized upon the sale of that security or other asset. The Advisor, as valuation designee, is subject to Board oversight and reports to the Board information regarding the fair valuation process and related material matters. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Usury Limitations </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">Interest charged on loans acquired by the fund may be subject to state usury laws imposing maximum interest rates and penalties for violations, including restitution of excess interest and unenforceability of debt. </div></div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Commercial Real Estate and Residential Real Estate Investments </div></div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Investments in Real Estate Investments and Real Estate Debt Generally </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund seeks to originate and acquire loans secured by commercial or residential real estate. Any deterioration of real estate fundamentals generally could negatively impact the fund’s performance by making it more difficult for borrowers to satisfy their debt payment obligations, increasing the default risk applicable to borrowers and making it relatively more difficult for the fund to meet its investment objective. Real estate investments are subject to various risks, including: (i) economic and market fluctuations; (ii) changes in environmental, zoning and other laws; (iii) casualty or condemnation losses; (iv) regulatory limitations on rents; (v) decreases in property values; (vi) changes in the appeal of properties to tenants; (vii) tenant defaults; (viii) changes in supply and demand; (ix) energy supply shortages; (x) various uninsured or uninsurable risks; (xi) natural disasters; (xii) changes in government regulations (such as rent control); (xiii) changes in the availability of debt financing and/or mortgage funds which may render the sale or refinancing of properties difficult or impracticable; (xiv) increased mortgage defaults; (xv) increases in borrowing rates; and (xvi) negative developments in the economy that depress travel activity, demand and real estate values generally. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Debt investments are subject to credit and interest rate risks. </div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated with Commercial Real Estate Loans </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Loans on commercial real estate properties generally lack standardized terms, which may complicate their structure and increase due diligence costs. Commercial real estate properties tend to be unique and are more difficult to value than residential properties. Commercial real estate loans also tend to have shorter maturities than residential mortgage loans and are generally not fully amortizing, which means that they may have a significant principal balance or “balloon” payment due on maturity. Loans with a balloon payment involve a greater risk to a lender than fully amortizing loans because the ability of a borrower to make a balloon payment typically will depend upon its ability either to fully refinance the loan or to sell the collateral property at a price sufficient to permit the borrower to make the balloon payment. The ability of a borrower to effect a refinancing or sale will be affected by a number of factors, including the value of the property, mortgage rates at the time of sale or refinancing, the borrower’s equity in the property, the financial condition and operating history of the property and the borrower, tax laws, prevailing economic conditions and the availability of credit for loans secured by the specific type of property. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Investing in commercial real estate loans is subject to cyclicality and other uncertainties. The cyclicality and leverage associated with commercial real estate loans also have historically resulted in periods, including significant periods, of adverse performance, including performance that may be materially more adverse than the performance associated with other investments. Commercial real estate loans generally are non-recourse to borrowers. Commercial real estate loans are subject to the effects of: (i) the ability of tenants to make lease payments; (ii) the ability of a property to attract and retain tenants, which may in turn be affected by local conditions, such as an oversupply of space or a reduction in demand for rental space in the area, the attractiveness of properties to tenants, competition from other available space and the ability of the owner to pay leasing commissions, provide adequate maintenance and insurance, pay tenant improvement costs and make other tenant concessions; (iii) the failure or insolvency of tenant businesses; (iv) interest rate levels and the availability of credit to refinance such loans at or prior to maturity; (v) compliance with regulatory requirements and applicable laws, including environmental controls and regulations and (vi) increased operating costs, including energy costs and real estate taxes. Also, there may be costs and delays involved in enforcing rights of a property owner against tenants in default under the terms of leases with respect to commercial properties and such tenants may seek the protection of the bankruptcy laws, which can result in termination of lease contracts. If the properties securing the loans do not generate sufficient income to meet operating expenses, debt service, capital expenditure and tenant improvements, the obligors under the loans may be unable to make payments of principal and interest in a timely fashion. Income from and values of properties are also affected by such factors as the quality of the property manager, applicable laws, including tax laws, interest rate levels, the availability of financing for owners and tenants and the impact of and costs of compliance with environmental controls and regulations. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated with Residential Mortgage Loans </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in loans secured by residential real estate, including potentially mortgages made to borrowers with lower credit scores. Accordingly, such mortgage loans may be more sensitive to economic factors that could affect the ability of borrowers to pay their obligations under the mortgage loans. A decline or an extended flattening of home prices and appraisal values may result in increases in delinquencies and losses on residential mortgage loans, particularly with respect to second homes and investor properties and with respect to any residential mortgage loan where the aggregate loan amount (including any subordinate liens) is close to or greater than the related property value. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Another factor that may result in higher delinquency rates is the increase in monthly payments on adjustable-rate mortgage loans. Borrowers with adjustable payment mortgage loans will be exposed to increased monthly payments when the related mortgage interest rate adjusts upward from the initial fixed rate or a low introductory rate, as applicable, to the rate computed in accordance with the applicable index and margin. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Certain residential mortgage loans may be structured with negative amortization features. Negative amortization arises when the mortgage payment in respect of a loan is smaller than the interest due on such loan. On any such mortgage loans, if the required minimum monthly payments are less than the interest accrued on the loan, the interest shortfall is added to the principal balance, causing the loan balance to increase rather than decrease over time. Because the related mortgagors may be required to make a larger single payment upon maturity, the default risk associated with such mortgage loans may be greater than that associated with fully amortizing mortgage loans. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated with Mezzanine Investments </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in mezzanine debt which has significant leverage ranking ahead of the fund’s investment. While the Subadvisor anticipates that the fund’s investment will usually benefit from the same or similar financial and other covenants as those enjoyed by the leverage ranking ahead of the fund’s investment, and will usually benefit from cross-default provisions, some or all of such terms may not be part of particular investments. The Subadvisor anticipates that the fund’s usual security for its mezzanine investments will be pledges of ownership interests, directly and/or indirectly, in a property-owning entity, and in some cases the fund may not have a mortgage or other direct security interest in the underlying real estate assets. Moreover, it is likely that the fund will be restricted in the exercise of its rights in respect of its mezzanine investments by the terms of subordination agreements between it and the debt or other securities ranking ahead of the mezzanine capital. Accordingly, the fund may not be able to take the steps necessary to protect its mezzanine investments in a timely manner or at all and there can be no assurance that the rate of return objectives of the fund or any particular investment will be achieved. To protect its original investment and to gain greater control over the underlying assets, the fund may need to elect to purchase the interest of a senior creditor or take an equity interest in the underlying assets, which may require additional investment by the fund. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated With B-notes and Preferred Equity Interests </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may hold B-notes and preferred equity interests, each of which are subordinate or otherwise junior in a borrower’s capital structure and involve privately negotiated structures. To the extent the fund holds subordinated debt or mezzanine tranches of a borrower’s capital structure or preferred equity interests, such investments and the fund’s remedies with respect thereto, including the ability to foreclose on any collateral securing such investments, will be subject to the rights of holders of more senior tranches in the borrower’s capital structure and, to the extent applicable, contractual intercreditor and/or participation agreement provisions, which will expose the fund to greater risk of loss. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As the terms of such loans and investments are subject to contractual relationships among lenders, co-lending agents and others, they can vary significantly in their structural characteristics and other risks. For example, the rights of holders of B-notes to control the process following a borrower default may vary from transaction to transaction. Further, B-notes typically are secured by a single property and accordingly reflect the risks associated with significant concentration. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated with Construction Loans </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in mortgage loans used to finance the cost of construction or rehabilitation of a property, including ground up construction. Such construction lending may expose the fund to increased lending risks. Construction loans generally expose a lender to greater risk of non-payment and loss than permanent commercial mortgage loans because repayment of the loans often depends on the borrower’s ability to secure permanent “take-out” financing, which requires the successful completion of construction and stabilization of the project, or operation of the property with an income stream sufficient to meet operating expenses, including debt service on such replacement financing. For construction loans, increased risks include the accuracy of the estimate of the property’s value at completion of construction and the estimated cost of construction—all of which may be affected by unanticipated construction delays and cost over-runs. Construction delays and cost over-runs may result from increasing costs or shortages of skilled labor and/or framing, concrete, steel and other building materials, environmental damage, delays in obtaining the requisite approvals, permits, licenses or certifications from the relevant authorities, legal actions, work stoppages, operational issues relating to construction, budget overruns and lack of financing. Construction loans typically involve an expectation that the borrower’s sponsors will contribute sufficient equity funds in order to keep the loan “in balance,” and the sponsors’ failure or inability to meet this obligation could also result in delays in construction or an inability to complete construction. Construction loans also expose the lender to additional risks of contractor non-performance, or borrower disputes with contractors resulting in mechanic’s or materialmen’s liens on the property and possible further delay in construction. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, as the lender under a construction loan, the fund may be obligated to fund all or a significant portion of the loan at one or more future dates. The fund may not have the funds available at such future date(s) to meet its funding obligations under the loan. In that event, the fund would likely be in breach of the loan unless it is able to acquire the funds from alternative sources, which it may not be able to achieve on favorable terms or at all. Furthermore, construction loans may have multiple lenders and if another lender fails to fund its obligations, the fund could be faced with the choice of either funding for that defaulting lender or suffering a delay or protracted interruption in the progress of construction. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Consumer-Related Asset-Backed Securities </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Asset-Backed Securities. </div></div></div>See Asset-Backed Securities above. </div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Consumer Finance Industry Regulatory Environment </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may be subject to a wide variety of laws and regulations in the jurisdictions where it operates in respect of its consumer finance activities, including supervision and licensing by numerous governmental entities. These laws and regulations may create significant constraints on the fund’s consumer finance investments and result in significant costs related to compliance. Failure to comply with these laws and regulations could impair the ability of the fund to continue to make such investments and result in substantial civil and criminal penalties, monetary damages, attorneys’ fees and costs, possible revocation of licenses, and damage to reputation, brand and customer relationships. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Dodd-Frank Act imposes significant regulatory oversight on the financial industry and grants the Consumer Financial Protection Bureau, or the CFPB, extensive rulemaking and enforcement authority, all of which may substantially impact the fund’s consumer finance investments. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may also invest in other consumer debt and specialty finance markets, including, but not limited to, credit card receivables, asset-backed regulatory relief transactions, litigation finance, royalty transactions, equipment (e.g., renewable energy, construction, information technology, medical, logistics) and insurance-linked contracts. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Noncompliance with Consumer Financial Protection Laws </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">If certain consumer loan contracts do not comply with U.S. federal and state consumer financial protection laws, the servicer may be prevented from or delayed in collecting the loan contract. Also, some of these laws may provide that the assignee of a consumer contract (such as the issuing entity) is liable to the obligor for any failure of the contract to comply with these laws. This could result in delays in payment or losses on such loan contracts. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Associated with Corporate Asset-Based Credit </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in asset-based corporate credit secured by real estate, equipment, receivables, inventory and intellectual property rights. A fundamental risk associated with the fund’s investments in asset-based corporate credit is that the companies in whose debt the fund invests will be unable to make regular payments (e.g., principal and interest payments) when due, or at all, or otherwise fail to perform. A number of factors may impact the failure of such companies to make payments on their loans, such as, among other factors, (i) an adverse development in their business, (ii) an economic downturn, (iii) poor performance by their management teams, (iv) legal, tax or regulatory changes, (v) a change in the competitive environment, or (vi) a force majeure event. The companies may be operating at a loss or have significant variations in operating results, or may otherwise be experiencing financial distress even when the Subadvisor expects them to remain stable. Additionally, the companies may require substantial additional capital to support their operations or to maintain their competitive position and as a result of that may become highly leveraged. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For further information, see “Asset-Backed Securities” above. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Esoteric Credit </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For the risks of investing in asset-back securities, see “Asset-Backed Securities” above. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Alternative Investments </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest its assets in “alternative investments,” which include non-traditional debt investments and smaller segments of the debt markets, also known as niche or esoteric debt products. Alternative investments provide limited liquidity and include, among other things, the risks inherent in investing in securities, futures, commodities and derivatives, using leverage and engaging in short sales. An investment in alternative investment products is speculative, involves substantial risks, and should not constitute a complete investment program. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Securitized Credit </div></div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Asset-Backed Securities. </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For the risks of investing in asset-back securities, see “Asset-Backed Securities” above. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Commercial Mortgage-Backed Securities </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Collateral underlying CMBS generally consists of mortgage loans secured by income producing property, such as regional malls, other retail space, office buildings, industrial or warehouse properties, hotels, rental apartments, nursing homes, senior living centers and self-storage properties. The fund may invest directly in CMBS. Performance of a commercial mortgage loan depends primarily on the net income generated by the underlying mortgaged property. The market value of a commercial property similarly depends on its income-generating ability. As a result, income generation will affect both the likelihood of default and the severity of losses with respect to a commercial mortgage loan. Any decrease in income or value of the commercial real estate underlying an issue of CMBS could result in cash flow delays and losses on the related issue of CMBS. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Most commercial mortgage loans underlying CMBS are effectively non-recourse obligations of the borrower, meaning that there is no recourse against the borrower’s assets other than the collateral. If borrowers are not able or willing to refinance or dispose of encumbered property to pay the principal and interest owed on such mortgage loans, payments on the subordinated classes of the related CMBS are likely to be adversely affected. The ultimate extent of the loss, if any, to the subordinated classes of CMBS may only be determined after a negotiated discounted settlement, restructuring or sale of the mortgage note, or the foreclosure (or deed in lieu of foreclosure) of the mortgage encumbering the property and subsequent liquidation of the property. Foreclosure can be costly and delayed by litigation and/or bankruptcy. Factors such as the property’s location, the legal status of title to the property, its physical condition and financial performance, environmental risks and governmental disclosure requirements with respect to the condition of the property may make a third party unwilling to purchase the property at a foreclosure sale or to pay a price sufficient to satisfy the obligations with respect to the related CMBS. Revenues from the assets underlying such CMBS may be retained by the borrower and the return on investment may be used to make payments to others, maintain insurance coverage, pay taxes or pay maintenance costs. Such diverted revenue is generally not recoverable without a court appointed receiver to control collateral cash flow. The owner of CMBS does not have a contractual relationship with the borrowers of the underlying commercial mortgage loans. The CMBS holder typically has no right directly to enforce compliance by the borrowers with the terms of the loan agreement, nor any rights of set-off against the borrower, nor will it have the right to object to certain changes to the underlying loan agreements, nor to move directly against the collateral supporting the related loans. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">At any one time, a portfolio of CMBS may be backed by commercial mortgage loans with disproportionately large aggregate principal amounts secured by properties in only a few states or regions. As a result, the commercial mortgage loans may be more susceptible to geographic risks relating to such areas, such as adverse economic conditions, adverse events affecting industries located in such areas and natural hazards affecting such areas, than would be the case for a pool of mortgage loans having more diverse property locations. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Residential Mortgage-Backed Securities </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Holders of RMBS bear various risks, including credit, market, interest rate, structural and legal risks. RMBS represent interests in pools of residential mortgage loans secured by one to four family residential mortgage loans. Residential mortgage loans may be prepaid at any time. Residential mortgage loans are obligations of the borrowers thereunder only and are not typically insured or guaranteed by any other person or entity, although such loans may be securitized by government agencies and the securities issued may be guaranteed. The rate of defaults and losses on residential mortgage loans will be affected by a number of factors, including general economic conditions and those in the geographic area where the related mortgaged property or properties are located, the terms of the loan, the borrower’s “equity” in the mortgaged property or properties and the financial circumstances of the borrower. If a residential mortgage loan is in default, foreclosure of such residential mortgage loan may be a lengthy and difficult process, and may involve significant expenses. Furthermore, the market for defaulted residential mortgage loans or foreclosed single-family properties may be very limited. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">At any one time, a portfolio of RMBS may be backed by residential mortgage loans with disproportionately large aggregate principal amounts secured by properties in only a few states or regions. As a result, the residential mortgage loans may be more susceptible to geographic risks relating to such areas, such as adverse economic conditions, adverse events affecting industries located in such areas and natural hazards affecting such areas, than would be the case for a pool of mortgage loans having more diverse property locations. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Prepayments on the underlying residential mortgage loans in an issue of RMBS will be influenced by the prepayment provisions of the related mortgage notes and may also be affected by a variety of economic, geographic and other factors, including the difference between the interest rates on the underlying residential mortgage loans (giving consideration to the cost of refinancing) and prevailing mortgage rates and the availability of refinancing. RMBS are particularly susceptible to prepayment risks as they generally do not contain prepayment penalties and a reduction in interest rates will increase the prepayments on the RMBS, resulting in a reduction in yield to maturity for holders of such securities. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated With “B-pieces”</div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in, or, in the event the fund finances its assets through securitization transactions, it may retain, so-called “B-pieces”, representing the most subordinated tranches issued by a CMBS, RMBS or other securitization. Although CMBS and RMBS generally have the benefit of first ranking security (or other exclusive priority rights) over any collateral, the timing and manner of the disposition of such collateral will be controlled by the related servicers, and in certain cases, may be controlled by or subject to consultation rights of holders of more senior classes of securities outstanding or by an operating advisor appointed to protect the interests of such senior classes. There can be no assurance that the proceeds of any sale of collateral or other realization on collateral will be adequate to repay the fund’s investment in full, or at all. In addition, “B-pieces” generally receive principal distributions only after more senior classes of CMBS and RMBS have been paid in full, and receive interest distributions only after the interest distributions then due to more senior classes have been paid. As a result, investors in “B-pieces” will generally bear the effects of losses and shortfalls on the underlying loans and unreimbursed expenses of the CMBS or RMBS issuer before the holders of other classes of CMBS or RMBS with a higher payment priority, with the concomitant potential for a higher risk of loss for such “B-pieces.” In addition, the prioritization of payments of principal to senior classes may cause the repayment of principal of such “B-pieces” to be delayed and/or reduced. Generally, all principal payments </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">received on the mortgage loans will be first allocated to more senior classes of CMBS or RMBS, in each case, until their respective principal balances are reduced to zero, before principal is allocated to the “B-pieces” of CMBS or RMBS. Therefore, “B-pieces” may not receive any principal for a substantial period of time. In addition, generally “B-pieces” will be subject to the allocation of “appraisal reductions” which will restrict their ability to receive any advances of interest that might otherwise be made by the related servicer. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Generally, a shortfall in payment to investors in “B-pieces” of CMBS or RMBS will not result in a default being declared or the restructuring or unwinding of the transaction. To the extent that “B-pieces” represent a small percentage of the CMBS or RMBS issued in relation to the underlying collateral, a small loss in the value of such collateral may result in a substantial loss for the holders of such “B-pieces” and may impact the performance of the fund. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">CLOs </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund’s investments in CLOs and other structured vehicles will be frequently subordinate in right of payment to other securities sold by the applicable CLO or other structured vehicle and will not be readily marketable. Depending upon the default rate on the collateral of the CLO and other structured vehicles, the fund may incur substantial losses on its investments. In addition, when the fund sells securities or assets held by it to a CLO and other structured vehicle, the fund may not receive any residual interest in such CLO and other structured vehicle so that any profits that the fund might have recognized on such securities or assets will no longer inure to the benefit of the fund. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The market value of CLOs and other structured vehicles will generally fluctuate with, among other things, the financial condition of the obligors on the underlying debt obligations or, with respect to synthetic securities, of the obligors on or issuers of the reference obligations, general economic conditions, the condition of certain financial markets, political events, developments or trends in any particular industry and changes in prevailing interest rates. The performance of CLOs and other structured vehicles will be adversely affected by macroeconomic factors, including the following: (i) general economic conditions affecting capital markets and participants therein; (ii) the economic downturns and uncertainties affecting economies and capital markets worldwide; (iii) concerns about financial performance, accounting and other issues relating to various publicly traded companies; and (iv) recent and proposed changes in accounting and reporting standards and bankruptcy legislation. In addition, interest payments on CLOs and other structured vehicles (other than the most senior tranche or tranches of a given issue) are generally subject to deferral. If distributions on the collateral underlying a CLO and other structured vehicle security are insufficient to make payments on the CLOs and other structured vehicles, no other assets will be available for payment of the deficiency and following realization of the underlying assets, the obligations of the CLO or other structured vehicle issuer to pay such deficiency will be extinguished. CLOs and other structured vehicles (particularly the subordinated interests) may provide that, to the extent funds are not available to pay interest, such interest will be deferred or paid “in kind” and added to the outstanding principal balance of the related security. Generally, the failure by the issuer of a CLO or other structured vehicles security to pay interest in cash does not constitute an event of default as long as a more senior class of securities of such issuer is outstanding and the holders of the securities that have failed to pay interest in cash (including the fund) will not have available to them any associated default remedies. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">CMOs </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in mortgage-backed securities called CMOs. CMOs are issued in separate classes with different stated maturities. As the mortgage pool experiences prepayments, the pool pays off investors in classes with shorter maturities first. By investing in CMOs, the fund may manage the prepayment risk of mortgage-backed securities. However, prepayments may cause the actual maturity of a CMO to be substantially shorter than its stated maturity. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Residual Interests </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may make substantial investments in unsecured equity tranches and equivalent junior subordinate securities of structured finance vehicles. Such residuals will represent subordinated interests in the relevant structured finance vehicle only and are not secured by any assets of such structured finance vehicle. Residuals will be subordinated to all other securities of the structured finance vehicle and all other amounts due under the priority of payments set forth in the operative documents of such structured finance vehicle. As such, the greatest risk of loss relating to defaults in the collateral or asset portfolio of the structured finance vehicle is borne by the residuals. The fund, therefore, as holder of the residuals, will rank behind all of the creditors, whether secured or unsecured and known or unknown, of the structured finance vehicle. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The investment in residuals will expose the fund to the highly leveraged investments in the collateral securing the other obligations of, and securities issued by, the structured finance vehicle. Therefore, the market value of these investments would be anticipated to be significantly affected by, among other things, changes in the market value of the assets, changes in the distribution on the assets, defaults and recoveries on the assets, capital gains and losses on the assets, prepayment on assets and the availability, prices and interest rate of assets. Due to the leverage inherent in structured finance vehicle structures, changes in the value of the residuals could be greater than the changes in the values of the underlying collateral, the assets constituting which are subject to, among other things, credit and liquidity risk. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Accordingly, “equity” or subordinated interests and note classes may not be paid in full and may be subject to total loss. Furthermore, the leveraged nature of each subordinated class may magnify the adverse impact on each such class of changes in the value of assets, changes in the distribution on the assets, defaults and recoveries on the assets, capital gains and losses on the assets, prepayment on assets and availability, price and interest rates of assets. Investors must consider with particular care the risks of leverage in residuals because, although the use of leverage creates an opportunity for substantial returns for the fund on the residuals, it increases substantially the likelihood that the fund could lose its entire investment in residuals if the pool of underlying collateral held by the relevant structured finance vehicle is adversely affected by market developments. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Investing in more senior securities issued by structured finance vehicles will involve similar risks, although the exposure of the fund to such risks will be in the context of a more senior position. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Significant Risk Transfer Assets </div></div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Credit Linked Notes Risk </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in credit linked notes, which are securities that are collateralized by one or more designated securities that are referred to as “reference securities.” Through the purchase of a credit linked note, the buyer assumes the risk of default or, in some cases, other declines in credit quality of the reference securities. The buyer also takes on exposure to the issuer of the credit linked note in the full amount of the purchase price of the credit linked note. The issuer of a credit linked note normally will have hedged its risk on the reference securities without acquiring any additional credit exposure. A fund that invests in credit linked notes has the right to receive periodic interest payments from the issuer of the credit linked note at an agreed upon interest rate, and, if there has been no default or, if applicable, other declines in credit quality, a return of principal at the maturity date. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Credit linked notes typically are privately negotiated transactions between two or more parties. The fund bears the risk that if the issuer of the credit linked notes defaults or becomes bankrupt, the fund will lose the principal amount it invested and the periodic interest payments expected to be received for the duration of its investment in the credit linked notes. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The market for credit linked notes may be, or may suddenly become, illiquid. The other parties to these transactions may be the only investors with sufficient understanding of the derivative to be interested in bidding for it. Changes in liquidity may result in significant, rapid and unpredictable changes in the prices for credit linked notes. In certain cases, a market price for a credit linked note may not be available. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Credit Default Swaps Risk </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in credit default swap transactions for investment purposes. The “buyer” in a credit default contract is obligated to pay the “seller” a periodic stream of payments over the term of the contract, provided that no event of default on an underlying reference obligation has occurred. If an event of default occurs, the seller must pay the buyer the full notional value, or “par value,” of the reference obligation through either physical settlement or cash settlement. The fund may be either the buyer or seller in a credit default swap transaction. If the fund is a buyer and no event of default occurs, the fund will have made a series of periodic payments and recover nothing of monetary value. However, if an event of default occurs, the fund (if the buyer) will receive the full notional value of the reference obligation either through a cash payment in exchange for the asset or a cash payment in addition to owning the reference assets. As a seller, the fund receives a fixed rate of income throughout the term of the contract, which typically is between six months and five years, provided that there is no event of default. The fund currently intends to segregate assets on the fund’s records in the form of cash, cash equivalents or liquid securities in an amount equal to the notional value of the credit default swaps of which it is the seller. If such assets are not fully segregated by the fund, the use of credit default swap transactions could then be considered leverage. Credit default swap transactions involve greater risks than if the fund had invested in the reference obligation directly. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Specialty Finance </div></div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Litigation Finance </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may extend a loan to a law firm secured by future fee proceeds from some or all of such firm’s portfolio of litigation matters, or it may advance funds to a party in a lawsuit or their counsel in return for a share of litigation proceeds or other financial reward if the party is successful. Where a loan is secured by litigation proceeds, or where the recipient of financing is not obligated to make any payment unless and until litigation proceeds are actually received by the litigant or their counsel, the fund could suffer a complete loss of the capital invested if the matter fails to be resolved in the recipient’s favor. Other risks the fund may face in connection with these financing activities include, without limitation: (i) losses from terminated or rejected settlements; (ii) predictive evaluations of the strength of cases, claims or settlements may turn out to be inaccurate; (iii) losses as a result of inability to collect, or timing uncertainty relating to collection on, judgments or awards; (iv) lack of control over decisions of lawyers acting pursuant to their professional duties in connection with formulating and implementing litigation strategies or otherwise; (v) expenses and uncertainties involving reliance on outside counsel and experts; (vi) changes in law, regulations or professional standards on such financing activities; (vii) poor case selection and case outcomes; (viii) timing or delays inherent to litigation; (ix) changes in counsel; (x) costs of litigation; (xi) inability of a defendant to pay a judgement or settlement; (xii) general competition and industry-related risks; (xiii) conflicts of interest; and (xiv) issues associated with the treatment of these types of investments for tax purposes. </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Transportation Investments </div></div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">The Fund’s Aviation Investment Strategy Depends on the Continual Leasing and Remarketing of Aircrafts and Aircraft Engines </div></div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund’s ability to lease and remarket its aircrafts or aircraft engines will depend on general market and competitive conditions at the time the initial leases are entered into and expire. If the fund is not able to lease or remarket an aircraft or aircraft engine or to do so on favorable terms, it may be required to attempt to sell the aircraft or aircraft engine to provide funds for debt service obligations or other expenses. The fund’s ability to lease, remarket or sell the aircraft or aircraft engine on favorable terms or without significant off-lease time and costs could be negatively affected by depressed conditions in the commercial aviation industry, airline bankruptcies, the effects of terrorism, war, natural disasters and/or epidemic diseases on airline passenger traffic trends, declines in the values of aircrafts and aircraft engines, and various other general market and competitive conditions and factors which are outside of the fund’s control. If the fund is unable to lease and remarket its aircraft or aircraft engine on favorable terms, the fund may incur substantial losses. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">The Fund Could Incur Significant Costs Resulting from Aviation Lease Defaults </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">If the fund is required to repossess an aircraft or aircraft engine after a lessee default, it may incur significant costs. Those costs likely would include legal and other expenses associated with court or other governmental proceedings, particularly if the lessee is contesting the proceedings or is in bankruptcy. In addition, during any such proceedings the relevant aircraft or aircraft engine would likely not be generating revenue. The fund could also incur substantial maintenance, refurbishment or repair costs if a defaulting lessee fails to pay such costs and where such maintenance, refurbishment or repairs are necessary to put the aircraft or aircraft engine in suitable condition for remarketing or sale. The fund may also incur storage costs associated with any aircraft or aircraft engine that the fund repossesses and is unable to place immediately with another lessee. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">It may also be necessary to pay off liens, taxes and other governmental charges on the aircraft or aircraft engine to obtain clear possession and to remarket the aircraft or aircraft engine effectively, including, in some cases, liens that the lessor might have incurred in connection with the operation of its other aircrafts or aircraft engines. The fund could also incur other costs in connection with the physical possession of the aircraft or aircraft engine. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may suffer other negative consequences as a result of a lessee default, the related termination of the lease and the repossession of the related aircraft or aircraft engine. It is likely that its rights upon a lessee default will vary significantly depending upon the jurisdiction and the applicable law, including the need to obtain a court order for repossession of the aircraft or aircraft engine and/or consents for deregistration or export of the aircraft or aircraft engine. It is expected that when a defaulting lessee is in bankruptcy, protective administration, insolvency or similar proceedings, additional limitations may apply. Certain jurisdictions give rights to the trustee in bankruptcy or a similar officer to assume or reject the lease or to assign it to a third party, or entitle the lessee or another third party to retain possession of the aircraft or aircraft engine without paying lease rentals or performing all or some of the obligations under the relevant lease. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">If the fund repossesses an aircraft or aircraft engine, the fund may not necessarily be able to export or deregister and profitably redeploy the aircraft or aircraft engine. For instance, where a lessee or other operator flies only domestic routes in the jurisdiction in which the aircraft or aircraft engine is registered, repossession may be more difficult, especially if the jurisdiction permits the lessee or the other operator to resist deregistration. The fund may also incur significant costs in retrieving or recreating records required for registration of the aircraft or aircraft engine, and in obtaining the Certificate of Airworthiness for an aircraft or aircraft engine. If, upon a lessee default, the fund incurs significant costs in connection with repossessing its aircraft or aircraft engine, is delayed in repossessing its aircraft or aircraft engine or is unable to obtain possession of its aircraft or aircraft engine as a result of lessee defaults, the fund may incur substantial losses. </div></div><div></div></div></div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">The Fund May Experience Abnormally High Maintenance or Obsolescence Issues with Its Aircraft or Aircraft Engine </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Aircrafts and aircraft engines are long-lived assets, requiring long lead times to develop and manufacture, with particular types and models becoming obsolete or less in demand over time when newer, more advanced aircrafts or aircraft engines are manufactured. The fund’s aircrafts and aircraft engines have exposure to obsolescence, particularly if unanticipated events occur which shorten the life cycle of such aircraft or aircraft engine types. These events include but are not limited to government regulation, technological innovations or changes in airline customers’ preferences. These events may shorten the life cycle for aircraft or aircraft engine types in the fund’s fleet and, accordingly, may negatively impact lease rates or result in losses. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Further, variable expenses like fuel, crew or aging aircraft or aircraft engine corrosion control or modification programs and airworthiness directives could make the operation of older aircraft more costly to the fund’s lessees and may result in increased lessee defaults. The fund may also incur some of these increased maintenance expenses and regulatory costs upon acquisition or remarketing of its aircraft or aircraft engine. Any of these expenses or costs may cause the fund to incur substantial losses. </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">The Value of the Aircrafts or Aircraft Engines the Fund Will Acquire and the Market Rates for Leases Could Decline </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Aircraft or aircraft engine values and market rates for leases have from time to time experienced sharp decreases due to a number of factors including, but not limited to, decreases in passenger demand, increases in fuel costs, government regulation and increases in interest rates. Operating leases place the risk of realization of residual values on aircraft or aircraft engine lessors because only a portion of the equipment’s value is covered by contractual cash flows at lease inception. In addition to factors linked to the commercial aviation industry generally, many other factors may affect the value of the aircraft or aircraft engine that the fund acquires and market rates for leases, including: </div><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">the particular maintenance, operating history and documentary records of the aircraft or aircraft engine; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">the number of operators using that type of aircraft or aircraft engine; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">aircraft or aircraft engine age; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">the regulatory authority under which the aircraft or aircraft engine is operated; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">any renegotiation of an existing lease on less favorable terms; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">the negotiability of clear title free from mechanics’ liens and encumbrances; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">any regulatory and legal requirements that must be satisfied before the aircraft or aircraft engine can be purchased, sold or re-leased;</div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">compatibility of aircraft or aircraft engine configurations or specifications with other aircrafts or aircraft engines owned by operators of that type; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">comparative value based on newly manufactured competitive aircrafts or aircraft engines; and </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">the availability of spare parts. </div></div></td></tr></table><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Any decrease in the value of aircrafts or aircraft engines that the fund acquires and market rates for leases, which may result from the above factors or other unanticipated factors, could cause the fund to incur substantial losses. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Liability Risk as Lessor </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Section 44112 of Title 49 of the United States Code (“<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Section 44112</div>”) provides that lessors of aircrafts or aircraft engines generally will not be liable for any personal injury or death, or damage to or loss of property (collectively, for purposes of this section, “<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Losses</div>”); <div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">provided</div></div> that such lessor is not in actual possession or control of the equipment at the time of such Loss. Under common law, the owner of an aircraft or aircraft engine may be held liable for injuries or damage to passengers or property, and such damage awards can be substantial. Because certain case law interpreting Section 44112 provides that lessors of aircrafts or aircraft engines may be liable for Losses, there can be no assurance that the provisions of Section 44112 would fully protect the lessor and the fund from all liabilities in connection with any Losses that may be caused by any aircraft or aircraft engine it owns. Therefore, each lessee typically will be required to indemnify the fund for, or insure the fund against, such claims by third parties. Nonetheless, in the event that Section 44112 does not apply in a particular action, there is the possibility that the lessee might not have the financial resources or insurance to fulfill its indemnity obligations. It should be noted, however, that this description is limited to U.S. law, and to the extent that the law in foreign jurisdictions is applicable (<div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">e.g.</div></div>, in a jurisdiction where an accident occurs), different rules may apply. For example, certain foreign jurisdictions may impose strict liability upon an owner of an aircraft or an aircraft engine. Such liability may apply with respect to claims of passengers, employees or third parties for death, injury and/or damages to public or private property (including consequences of terrorist attacks) or environmental damages. Operators and airlines may be unable or unwilling to indemnify the fund, resulting in losses to the fund. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks of Aircraft or Aircraft Engine Lease Receivables, Enhanced Equipment Trust Certificates, Aircraft Engine Mortgages and other Aviation-Related Asset-Backed Securities that Seek to Monetize Leases or Mortgages </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in airline/aircraft or aircraft engine assets, which may include aircraft or aircraft engine lease receivables (“<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">ALRs</div>”). ALRs are asset-backed securities that are generally structured as pass-through trusts. The aircraft or aircraft engine is sold to the trust which leases it to the airline companies. Unlike receivables backed by loans or interest rates, however, ALRs may entail a higher risk because of the nature of the underlying assets, which are expensive to maintain and operate and are difficult to sell. Moreover, aircrafts and aircraft engines are subject to many laws in different jurisdictions, and the repossession of the aircraft or aircraft engine from lessees may be difficult and costly. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, the fund may invest in enhanced equipment trust certificates (“<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">EETCs</div>”). Although any entity may issue EETCs, to date, U.S. airlines are the primary issuers. An airline EETC is an obligation secured by the aircrafts or aircraft engines as collateral. EETCs may be less liquid than other investments. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Furthermore, the fund may invest in aviation-related asset-backed securities that seek to monetize leases or mortgages. Aircraft and aircraft engine mortgage monetization notes and aircraft and aircraft engine lease monetization notes are asset-backed securities that represent interests in pools of aircraft and aircraft engine mortgages or operating leases, respectively, on various aircraft and aircraft engine types of airlines located throughout the world. Holders of such securities bear various risks, including, among other things, lease rates and residual values, increased fuel costs, credit, technological, legal, regulatory, terrorism and geopolitical risks. Uncertainty and instability in certain countries in which airlines are located could have a material adverse effect on such securities as well. Additionally, with respect to lease monetization notes, portfolio management and the remarketing and re-leasing of aircrafts and aircraft engines upon lease expiration or default is typically the responsibility of a designated servicer. No assurance can be given that the aircraft or aircraft engine will be re-leased after the expiration of the initial term, or if re-leased, on the same terms or on more favorable terms. Further, the value of aircraft or aircraft engine mortgage monetization notes and aircraft and aircraft engine lease monetization notes are affected by changes in the market’s perception of the asset backing the security and the creditworthiness of the servicing agent for the collateral pool, the originator of the financial obligations or the financial institution providing any credit enhancement, as well as by the expiration or removal of any credit enhancement. Finally, aircrafts and aircraft engines are subject to many laws in different jurisdictions, and the repossession of aircrafts and aircraft engines from lessees or borrowers may be difficult and costly. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Investments by the fund in single aircraft or aircraft engine mortgages on the secondary market will be subject to similar risks as investments in aircraft and aircraft engine mortgage monetization notes. However, such investments may not have the benefit of diversification across a wider range of aircraft and aircraft engine assets and airlines or credit enhancement as may be the case with aircraft and aircraft engine mortgage monetization notes. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Airline Regulation </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The airline industry is subject to regulation in the United States by, among others, the U.S. Department of Transportation and the U.S. Federal Aviation Administration (“FAA”) and outside the U.S. by additional agencies. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Failure to Obtain Certain Required Licenses and Approvals </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Airlines are subject to extensive regulation under the laws of the jurisdictions in which they are registered and in which they operate. As a result, the fund expects that certain aspects of its leases will require licenses, consents or approvals, including consents from governmental or regulatory authorities for certain payments under its leases and for the import, export or deregistration of the aircraft or aircraft engine. Subsequent changes in applicable law or administrative practice may increase such requirements and governmental consent, once given, could be withdrawn. Furthermore, consents needed in connection with the future remarketing or sale of an aircraft or aircraft engine may not be forthcoming. Any of these events could negatively affect the fund’s ability to remarket or sell aircrafts or aircraft engines which may cause the fund to incur substantial losses. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Effects of the Aviation Security Act </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The U.S. Aviation and Transportation Security Act (the “<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Aviation Security Act</div>”), among other things, subjects substantially all aspects of U.S. civil aviation security to federal oversight and mandates enhanced security measures, including: (i) improved flight deck security; (ii) deployment of federal air marshals on flights; (iii) improved security of airport perimeter access; (iv) airline crew security training; (v) augmented security screening of passengers, baggage, cargo, mail, employees and vendors; (vi) improved training and qualifications of security screening personnel; (vii) additional provision of passenger data to U.S. Customs and Border Protection; and (viii) more detailed background checks on passengers and airline and airport personnel. The implementation of the requirement that all checked baggage be screened by explosives detection systems has resulted, and may continue to result, in significant equipment acquisitions by the government and changes to baggage processing facilities and procedures. The changes mandated by the Aviation Security Act have increased costs for airlines providing service in the U.S., and have resulted in delays and disruptions to air travel, which have adversely affected, and may to continue to adversely affect, the aviation industry in general. It is expected that the Aviation Security Act will continue to impose additional costs on the airlines and may adversely impact the performance of the fund. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Effect of Airworthiness Directives and Operating Restrictions </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The maintenance and operation of aircraft and aircraft engines are strictly regulated by the FAA in the U.S. and similar governmental authorities in foreign jurisdictions. These rules and regulations govern such matters as certification, registration, inspection, operation and maintenance procedures, personnel certification and record keeping. Periodically, the FAA issues airworthiness directives requiring changes to aircraft or aircraft engine maintenance programs and procedures. Such airworthiness directives are issued from time to time with respect to aircraft and aircraft engines to ensure that they remain airworthy and safe. Future regulatory changes may also increase the cost of operating and/or maintaining aircraft and aircraft engines, which may adversely affect their residual value and the profitability of the fund, as can the failure of a lessee to comply with the maintenance provisions as set forth in its lease. The cost of compliance with such requirements may be significant. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Environmental Regulations May Negatively Affect the Airline Industry </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Governmental regulations regarding aircraft and aircraft engine noise and emissions levels apply based on where the relevant aircraft or aircraft engine is registered and operated. For example, jurisdictions throughout the world have adopted noise regulations which require all aircrafts and aircraft engines to comply with noise level standards. In addition to the current requirements, the United States and the International Civil Aviation Organization (the “<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">ICAO</div>”), have specific standards for noise levels which applies to engines manufactured or certified on or after January 1, 2006. Currently, U.S. regulations would not require any phase-out of aircrafts or aircraft engines that qualified with the older standards applicable to engines manufactured or certified prior to January 1, 2006, but the European Union has established a framework for the imposition of operating limitations on aircrafts and aircraft engines that do not comply with the new standards and has incorporated aviation-related emissions into the European Union’s Emission Trading Scheme beginning in 2013. These regulations could limit the economic life of the aircraft and aircraft engines, reduce their value, limit the fund’s ability to lease or sell the non-compliant aircraft and aircraft engines or, if engine modifications are permitted, require the fund to make significant additional investments in the aircraft and aircraft engines to make them compliant. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition to more stringent noise restrictions, the United States and other jurisdictions are beginning to impose more stringent limits on nitrogen oxide, carbon monoxide and carbon dioxide emissions from engines, consistent with current ICAO standards. These limits generally apply only to engines manufactured after 1999. Because aircraft engines are replaced from time to time in the normal course, it is likely that the number of such engines would increase over time. The ICAO is developing a global scheme based on market-based measures to limit CO2 emissions from international aviation to be implementing by 2020. Concerns over global warming could result in more stringent limitations on the operation of aircraft powered by older, noncompliant engines, as well as newer engines. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">European countries generally have relatively strict environmental regulations that can restrict operational flexibility and decrease aircraft and aircraft engine productivity. The European Union’s Emissions Trading Scheme requires that all of the emissions associated with international flights that land or take off within the European Union are subject to the trading program, even those emissions that are emitted outside of the European Union. The United Kingdom doubled its air passenger duties, in recognition of the environmental costs of air travel and similar measures may be implemented in other jurisdictions as a result of environmental concerns. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">These regulations could limit the economic life of the aircraft and aircraft engines, reduce their value, limit the fund’s ability to lease or sell the compliance aircraft and aircraft engines or, if engine modifications are permitted, require the fund to make significant additional investments in the aircraft and aircraft engines to make them compliant, which could cause the fund to incur substantial losses. Further, compliance with current or future regulations, taxes or duties imposed to deal with environmental concerns could cause lessees to incur higher costs and to generate lower net revenues, resulting in a negative impact on their financial conditions. Consequently, such compliance may affect lessees’ ability to make rental and other lease payments and reduce the value the fund receives for the aircraft or aircraft engine upon any disposition, which could cause the fund to incur substantial losses. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Cyclical Nature of the Maritime Sector </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The maritime sector is cyclical, with volatility in charter rates, profitability and vessel values. Future demand for vessels will be dependent upon continued economic growth in numerous international economies, and will be influenced by seasonal and regional changes in demand and changes in the capacity of the world’s shipping fleets. A decline in demand for commodities or other products transported in ships or an increase in the supply of such vessels could materially adversely affect the fund’s investments. Historically, demand for vessels has generally been influenced by factors including global and regional economic conditions, developments in international trade, changes in seaborne and other transportation patterns, such as port congestion and canal closures, currency exchange rates, armed conflict and terrorist activities including piracy, political developments, and sanctions, embargoes and strikes. Additionally, supply of vessels has generally been influenced by factors including the number of expected new building vessel deliveries, the scrapping rate of older vessels, access to traditional debt to finance the construction of new vessels, changes in environmental or other regulations that may limit the useful life of certain vessels. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include new building prices, secondhand vessel values in relation to scrap prices, costs of fuel supplies and other operating costs, costs associated with classification society surveys, normal maintenance and insurance coverage, the efficiency and age profile of the existing fleet in the market and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand for shipping capacity are outside of the fund’s control, and the Subadvisor may not be able to correctly assess the nature, timing and degree of changes in industry conditions. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Maritime Risks </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The operation of an ocean-going vessel carries inherent risks. These risks include, among others, the possibility of marine disaster, piracy, environmental accidents, grounding, fire, explosions and collisions, cargo and property losses or damage, business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions and work stoppages or other labor problems with crew members serving on vessels including crew strikes and/or boycotts. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Such occurrences could result in death or injury to persons, loss of property or environmental damage, delays in the delivery of cargo, loss of revenues from or termination of charter contracts, governmental fines, penalties or restrictions on conducting business, higher insurance rates and damage to counterparties’ reputation and customer relationships generally. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">International Operations Risks </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The maritime sector is an inherently risky business involving global operations. A counterparty’s vessels will be at risk of damage or loss because of events such as mechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. All these hazards can result in death or injury to persons, increased costs, loss of revenues, loss or damage to property (including cargo), environmental damage, higher insurance rates, damage to the counterparty’s customer relationships, harm to its reputation as a safe and reliable operator and delay or rerouting. In addition, changing economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These sorts of events could interfere with shipping routes and result in market disruptions which could have a material adverse effect on the fund’s financial condition, cash flows and ability to pay distributions. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Maritime Claims </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Maritime claimants may seek to arrest a vessel owned or held by a counterparty and used as security for an investment by the fund. Crew members, suppliers of goods and services to a vessel and other parties may be entitled to maritime liens against that vessel for unsatisfied debts, claims or damages, which liens may be senior to the fund’s investment in the capital structure of a counterparty. In many jurisdictions, a maritime lien holder may enforce its lien by arresting or attaching a vessel and commencing foreclosure proceedings. The arrest or attachment of one or more of the vessels of a counterparty could result in a significant loss of earnings for the related off-hire period. In addition, in some jurisdictions, under the “sister ship” theory of liability, a claimant may arrest both the vessel that is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. In countries with “sister ship” liability laws, claims might be asserted against a counterparty or any of its vessels for liabilities of other vessels that it owns. The arrest or attachment of one or more vessels could have an adverse impact on the performance of the fund. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Senior Loans Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may be subject to greater levels of credit risk, call (or “prepayment”) risk, settlement risk and liquidity risk than funds that do not invest in senior loans. Senior loans are considered predominantly speculative with respect to an issuer’s continuing ability to make principal and interest payments, and may be more volatile than other types of securities. An economic downturn or individual corporate developments could adversely affect the market for these instruments and reduce the fund’s ability to sell these instruments at an advantageous time or price. An economic downturn would generally lead to a higher non-payment rate and a senior loan may lose significant value before a default occurs. The fund may also be subject to greater levels of liquidity risk than funds that do not invest in senior loans. In addition, the senior loans in which the fund invests may not be listed on any exchange and a secondary market for such loans may be comparatively less liquid relative to markets for other more liquid fixed income securities. Consequently, transactions in senior loans may involve greater costs than transactions in more actively traded securities. Restrictions on transfers in loan agreements, a lack of publicly-available information, irregular trading activity and wide bid/ask spreads among other factors, may, in certain circumstances, make senior loans difficult to value accurately or sell at an advantageous time or price than other types of securities or instruments. These factors may result in the fund being unable to realize full value for the senior loans and/or may result in the fund not receiving the proceeds from a sale of a senior loan for an extended period after such sale, each of which could result in losses to the fund. Senior loans may have extended trade settlement periods which may result in cash not being immediately available to the fund. If an issuer of a senior loan prepays or redeems the loan prior to maturity, the fund may have to reinvest the proceeds in other senior loans or similar instruments that may pay lower interest rates. Senior loans in which the fund invests may or may not be collateralized, although the loans may not be fully collateralized and the collateral may be unavailable or insufficient to meet the obligations of the borrower. The fund may have limited rights to exercise remedies against such collateral or a borrower, and loan agreements may impose certain procedures that delay receipt of the proceeds of collateral or require the fund to act collectively with other creditors to exercise its rights with respect to a senior loan. Because of the risks involved in investing in senior loans, an investment in the fund should be considered speculative. Junior loans, which are secured and unsecured subordinated loans, second lien loans and subordinate bridge loans, involve a higher degree of overall risk than senior loans of the same borrower due to the junior loan’s lower place in the borrower’s capital structure and, in some cases, their unsecured status. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Fixed-Income Securities Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Fixed-income securities are generally subject to two principal types of risk, as well as other risks described below: (1) interest-rate risk and (2) credit quality risk. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Interest-Rate Risk.</div></div></div> Fixed-income securities are affected by changes in interest rates. When interest rates decline, the market value of fixed-income securities generally can be expected to rise. Conversely, when interest rates rise, the market value of fixed-income securities generally can be expected to decline. The longer the duration or maturity of a fixed-income security, the more susceptible it is to interest-rate risk. Duration is a measure of the price sensitivity of a debt security, or a fund that invests in a portfolio of debt securities, to changes in interest rates, whereas the maturity of a security measures the time until final payment is due. Duration measures sensitivity more accurately than maturity because it takes into account the time value of cash flows generated over the life of a debt security. </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">In response to certain economic conditions, including periods of high inflation, governmental authorities and regulators may respond with significant fiscal and monetary policy changes such as raising interest rates. The fund may be subject to heightened interest rate risk when the Federal Reserve Board (Fed) raises interest rates. Recent and potential future changes in government monetary policy may affect interest rates. It is difficult to accurately predict the timing, frequency or magnitude of potential interest rate increases or decreases by the Fed and the evaluation of macro-economic and other conditions that could cause a change in approach in the future. If the Fed and other central banks increase the federal funds rate and equivalent rates, such increases generally will cause market interest rates to rise and could cause the value of the fund’s investments, and the fund’s NAV, to decline, potentially suddenly and significantly. As a result, the fund may experience high redemptions and, as a result, increased portfolio turnover, which could increase the costs that the fund incurs and may negatively impact the fund’s performance. </div></div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">In certain market conditions, governmental authorities and regulators may considerably lower interest rates, which, in some cases could result in negative interest rates. These actions, including their reversal or potential ineffectiveness, could further increase volatility in securities and other financial markets and reduce market liquidity. To the extent the fund has a bank deposit or holds a debt instrument with a negative interest rate to maturity, the fund would generate a negative return on that investment. Similarly, negative rates on investments by money market funds and similar cash management products could lead to losses on investments, including on investments of the fund’s uninvested cash. </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Credit Quality Risk.</div></div></div> Fixed-income securities are subject to the risk that the issuer of the security will not repay all or a portion of the principal borrowed and will not make all interest payments. If the credit quality of a fixed-income security deteriorates after the fund has purchased the security, the market value of the security may decrease and lead to a decrease in the value of the fund’s investments. An issuer’s credit quality could deteriorate as a result of poor management decisions, competitive pressures, technological obsolescence, undue reliance on suppliers, labor issues, shortages, corporate restructurings, fraudulent disclosures, or other factors. Funds that may invest in lower-rated fixed-income securities, commonly referred to as junk securities, are riskier than funds that may invest in higher-rated fixed-income securities. </div> <div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Distressed Debt Risk.</div></div><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;"> </div></div></div><div style="letter-spacing: 0px; top: 0px;display:inline;"></div> </div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in distressed debt securities. Investing in distressed debt securities is speculative and involves substantial risks in addition to those of non-distressed high-yield securities. Distressed debt securities generally do not generate interest payments. Principal on distressed debt might not be repaid, and a fund could lose up to its entire investment. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Asset-Backed Securities (“ABS”) </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The investment characteristics of ABS differ from traditional debt securities. Among the major differences are that interest and principal payments are made more frequently, usually monthly, and that the principal may be prepaid at any time because the underlying loans or other assets generally may be prepaid at any time. The risk of each ABS depends both on the underlying assets and the legal structure of such security. Primarily, these securities do not have the benefit of the same security interest in the related collateral (<div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">e.g.</div></div>, automobile loans or leases, student loans or other consumer loans). There is a possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on these securities. Further, unlike traditional debt securities, which may pay a fixed rate of interest until maturity when the entire principal amount comes due, payments on certain ABS include both interest and a partial payment of principal. This partial payment of principal may be composed of a scheduled principal payment as well as an unscheduled payment from the voluntary prepayment, refinancing or foreclosure of the underlying collateral. As a result of these unscheduled payments of principal, or prepayments on the underlying collateral, the price and yield of ABS can be adversely affected. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The risk of investing in ABS is ultimately dependent upon payment of loans or leases by the debtor. The collateral supporting ABS is of shorter maturity than mortgage loans and is less likely to experience substantial prepayments. As with mortgage-backed securities, ABS are often backed by a pool of assets representing the obligations of a number of different parties and use credit enhancement techniques such as letters of credit, guarantees or preference rights. The value of an ABS is affected by changes in the market’s perception of the asset backing the security and the creditworthiness of the servicing agent for the collateral pool, the originator of the financial obligations or the financial institution providing any credit enhancement, as well as by the expiration or removal of any credit enhancement. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Convertible Securities Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Convertible securities are subject to certain risks of both equity and debt securities. Convertible securities may be converted or exchanged (by the holder or by the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio. A convertible security may also be called for redemption or conversion by the issuer after a particular date and under certain circumstances (including a specified price) established upon issue. Convertible securities generally offer lower interest or dividend yields than nonconvertible fixed-income securities of similar credit quality because of the potential for capital appreciation. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, a convertible security’s market value also tends to reflect the market price of common stock of the issuing company, particularly when that stock price is greater than the convertible security’s conversion price. The conversion price is defined as the predetermined price or exchange ratio at which the convertible security can be converted or exchanged for the underlying common stock. As the market price of the underlying common stock declines below the conversion price, the price of the convertible security tends to be increasingly influenced by the yield of the convertible security. Thus, it may not decline in price to the same extent as the underlying common stock. In the event of a liquidation of the issuing company, convertible securities generally entail less risk than the company’s common stock. </div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Foreign Securities Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Funds that invest in securities traded principally in securities markets outside the United States are subject to additional and more varied risks, as the value of foreign securities may change more rapidly and extremely than the value of U.S. securities. Less information may be publicly available regarding foreign issuers, including foreign government issuers. Foreign securities may be subject to foreign taxes and may be more volatile than U.S. securities. Currency fluctuations and political and economic developments may adversely impact the value of foreign securities. The securities markets of many foreign countries are relatively small, with a limited number of companies representing a small number of industries. Additionally, issuers of foreign securities may not be subject to the same degree of regulation as U.S. issuers. Reporting, accounting, and auditing standards of foreign countries differ, in some cases significantly, from U.S. standards. There are generally higher commission rates on foreign portfolio transactions, transfer taxes, higher custodial costs, and the possibility that foreign taxes will be charged on dividends and interest payable on foreign securities, some or all of which may not be reclaimable. Also, adverse changes in investment or exchange control regulations (which may include suspension of the ability to transfer currency or assets from a country); political changes; or diplomatic developments could adversely affect the fund’s investments. In the event of nationalization, expropriation, confiscatory taxation, or other confiscation, the fund could lose a substantial portion of, or its entire investment in, a foreign security. Foreign countries, especially emerging market countries, also may have problems associated with settlement of sales. Such problems could cause the fund to suffer a loss if a security to be sold declines in value while settlement of the sale is delayed. In addition, there may be difficulties and delays in enforcing a judgment in a foreign court resulting in potential losses to the fund. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Some of the foreign securities risks are also applicable to funds that invest a material portion of their assets in securities of foreign issuers traded in the United States. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">Depositary receipts are subject to most of the risks associated with investing in foreign securities directly because the value of a depositary receipt is dependent upon the market price of the underlying foreign equity security. Depositary receipts are also subject to liquidity risk. Additionally, the Holding Foreign Companies Accountable Act (“HFCAA”) could cause securities of foreign companies, including American depositary receipts, to be delisted from U.S. stock exchanges if the companies do not allow the U.S. government to oversee the auditing of their financial information. Although the requirements of the HFCAA apply to securities of all foreign issuers, the SEC has thus far limited its enforcement efforts to securities of Chinese companies. If securities are delisted, the fund’s ability to transact in such securities will be impaired, and the liquidity and market price of the securities may decline. The fund may also need to seek other markets in which to transact in such securities, which could increase the fund’s costs. </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Currency risk</div></div></div><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div> If currencies do not perform as the manager expects, the fund could have significant losses which exceed the amount invested in the currency instruments since currency transactions involve a small investment of cash relative to the magnitude of the risks assumed, thereby magnifying the impact of any resulting gain or loss. Currency risk includes the risk that fluctuations in exchange rates may adversely affect the U.S. dollar value of the fund’s investments. Currency risk includes both the risk that currencies in which the fund’s investments are traded, or currencies in which the fund has taken an active investment position, will decline in value relative to the U.S. dollar and, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly for a number of reasons, including the forces of supply and demand in the foreign exchange markets, actual or perceived changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments or central banks, or by currency controls or political developments in the U.S. or abroad. Certain funds may engage in proxy hedging of currencies by entering into derivative transactions with respect to a currency whose value is expected to correlate to the value of a currency the fund owns or wants to own. This presents the risk that the two currencies may not move in relation to one another as expected. In that case, the fund could lose money on its investment and also lose money on the position designed to act as a proxy hedge. Certain funds may also take active currency positions and may cross-hedge currency exposure represented by their securities into another foreign currency. This may result in the fund’s currency exposure being substantially different than that suggested by its securities investments. All funds with foreign currency holdings and/or that invest or trade in securities denominated in foreign currencies or related derivative instruments may be adversely affected by changes in foreign currency exchange rates. Derivative foreign currency transactions (such as futures, forwards, and swaps) may also involve leveraging risk, in addition to currency risk. Leverage may disproportionately increase the fund’s portfolio losses and reduce opportunities for gain when interest rates, stock prices, or currency rates are changing. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Continental Europe</div></div></div><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div> European securities may be affected significantly by economic, regulatory, or political developments affecting European issuers. All countries in Europe may be significantly affected by fiscal and monetary controls implemented by the European Economic and Monetary Union. Eastern European markets are relatively undeveloped and may be particularly sensitive to economic and political events affecting those countries. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Asset Allocation Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund’s investment performance depends upon how its assets are allocated and reallocated. A principal risk of investing in the fund is that the Subadvisor, subject to the oversight of the Advisor and the Board, may make less than optimal or poor asset allocation decisions. The Advisor and the Subadvisor employ an active approach to allocation across multiple credit sectors, but there is no guarantee that such allocation techniques will produce the desired results. It is possible that the Advisor or the Subadvisor will focus on an investment that performs poorly or underperforms other investments under various market conditions. You could lose money on your investment in the fund as a result of these allocation decisions. </div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Credit and Counterparty Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">This is the risk that the issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter (“OTC”) derivatives contract (see “Risk Factors—Hedging, Derivatives, and Other Strategic Transactions Risk”), or a borrower of the fund’s securities will be unable or unwilling to make timely principal, interest, or settlement payments, or otherwise honor its obligations. Credit risk associated with investments in fixed-income securities relates to the ability of the issuer to make scheduled payments of principal and interest on an obligation. If the fund invests in fixed-income securities, it will be subject to varying degrees of risk that the issuers of the securities will have their credit ratings downgraded or will default, potentially reducing such fund’s share price and income level. Nearly all fixed-income securities are subject to some credit risk, which may vary depending upon whether the issuers of the securities are corporations, domestic or foreign governments, or their subdivisions or instrumentalities. U.S. government securities are subject to varying degrees of credit risk depending upon whether the securities are supported by the full faith and credit of the United States; the ability to borrow from the U.S. Treasury; only by the credit of the issuing U.S. government agency, instrumentality, or corporation; or otherwise supported by the United States. For example, issuers of many types of U.S. government securities (e.g., the Federal Home Loan Mortgage Corporation (“Freddie Mac”), Federal National Mortgage Association (“Fannie Mae”), and Federal Home Loan Banks), although chartered or sponsored by Congress, are not funded by congressional appropriations, and their fixed-income securities, including asset-backed and mortgage-backed securities, are neither guaranteed nor insured by the U.S. government. An agency of the U.S. government has placed Fannie Mae and Freddie Mac into conservatorship, a statutory process with the objective of returning the entities to normal business operations. It is unclear what effect this conservatorship will have on the securities issued or guaranteed by Fannie Mae or Freddie Mac. As a result, these securities are subject to more credit risk than U.S. government securities that are supported by the full faith and credit of the United States (e.g., U.S. Treasury bonds). When a fixed-income security is not rated, a manager may have to assess the risk of the security itself. Asset-backed securities, whose principal and interest payments are supported by pools of other assets, such as credit card receivables and automobile loans, are subject to further risks, including the risk that the obligors of the underlying assets default on payment of those assets. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Funds that invest in below-investment-grade securities, also called junk bonds (e.g., fixed-income securities rated Ba or lower by Moody’s Investors Service, Inc. or BB or lower by S&amp;P Global Ratings or Fitch Ratings, as applicable, at the time of investment, or determined by a manager to be of comparable quality to securities so rated) are subject to increased credit risk. The sovereign debt of many foreign governments, including their subdivisions and instrumentalities, falls into this category. Below-investment-grade securities offer the potential for higher investment returns than higher-rated securities, but they carry greater credit risk: their issuers’ continuing ability to meet principal and interest payments is considered speculative, they are more susceptible to real or perceived adverse economic and competitive industry conditions, and they may be less liquid than higher-rated securities. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, the fund is exposed to credit risk to the extent that it makes use of OTC derivatives (such as forward foreign currency contracts and/or swap contracts) and engages to a significant extent in the lending of fund securities or the use of repurchase agreements. OTC derivatives transactions can be closed out with the other party to the transaction. If the counterparty defaults, the fund will have contractual remedies, but there is no assurance that the counterparty will be able to meet its contractual obligations or that, in the event of default, the fund will succeed in enforcing them. The fund, therefore, assumes the risk that it may be unable to obtain payments owed to it under OTC derivatives contracts or that those payments may be delayed or made only after the fund has incurred the costs of litigation. While the Subadvisor intends to monitor the creditworthiness of contract counterparties, there can be no assurance that the counterparty will be in a position to meet its obligations, especially during unusually adverse market conditions. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Creditor Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Debt is generally subject to various creditor risks, including, but not limited to: (i) the possible invalidation of a loan as a “fraudulent conveyance” under the relevant creditors’ rights laws; (ii) so called lender liability claims by the issuer of the obligations; and (iii) environmental liabilities that may arise with respect to collateral securing the obligations. Additionally, adverse credit events with respect to any underlying property, such as missed or delayed payment of interest and/or principal, bankruptcy, receivership or distressed exchange, can significantly diminish the value of an investment in any such property. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Distribution Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">There can be no assurance that monthly distributions paid by the fund to Shareholders will be maintained at current levels or increase over time. The fund’s cash available for distribution may vary widely over the short- and long-term. If, for any calendar year, the total distributions made exceed the fund’s net investment taxable income and net capital gain, the excess generally will be treated as a return of capital to each Shareholder (up to the amount of the Shareholder’s basis in his or her share of the fund) and thereafter as gain from the sale of Shares. The amount treated as a return of capital reduces the Shareholder’s adjusted basis in his or her Shares, thereby increasing his or her potential gain or reducing his or her potential loss on the subsequent sale of his or her Shares. Distributions in any year may include a substantial return of capital component. Distributions are not fixed but are declared at the discretion of the Board. Shareholders who periodically receive the payment of a dividend or other distribution consisting of a return of capital may be under the impression that they are receiving net profits when they are not. Shareholders should not assume that the source of a distribution from the fund is net profit. </div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Economic and Market Events Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Events in certain sectors historically have resulted, and may in the future result, in an unusually high degree of volatility in the financial markets, both domestic and foreign. These events have included, but are not limited to: bankruptcies, corporate restructurings, and other similar events; bank failures; governmental efforts to limit short selling and high frequency trading; measures to address U.S. federal and state budget deficits; social, political and economic instability in Europe; economic stimulus by the Japanese central bank; dramatic changes in energy prices and currency exchange rates; and China’s economic slowdown. Interconnected global economies and financial markets increase the possibility that conditions in one country or region might adversely impact issuers in a different country or region. Both domestic and foreign equity markets have experienced increased volatility and turmoil, with issuers that have exposure to the real estate, mortgage, and credit markets particularly affected. Financial institutions could suffer losses as interest rates were to rise or economic conditions deteriorate. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, relatively high market volatility and reduced liquidity in credit and fixed-income markets may adversely affect many issuers worldwide. Actions taken by the U.S. Federal Reserve (Fed) or foreign central banks to stimulate or stabilize economic growth, such as interventions in currency markets, could cause high volatility in the equity and fixed-income markets. Reduced liquidity may result in less money being available to purchase raw materials, goods, and services from emerging markets, which may, in turn, bring down the prices of these economic staples. It may also result in emerging-market issuers having more difficulty obtaining financing, which may, in turn, cause a decline in their securities prices. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">In response to certain economic conditions, including periods of high inflation, governmental authorities and regulators may respond with significant fiscal and monetary policy changes such as raising interest rates. The fund may be subject to heightened interest rate risk when the Fed raises interest rates. Recent and potential future changes in government monetary policy may affect interest rates. It is difficult to accurately predict the timing, frequency or magnitude of potential interest rate increases or decreases by the Fed and the evaluation of macro-economic and other conditions that could cause a change in approach in the future. If the Fed and other central banks increase the federal funds rate and equivalent rates, such increases generally will cause market interest rates to rise and could cause the value of the fund’s investments, and the fund’s NAV, to decline, potentially suddenly and significantly. As a result, the fund may experience high redemptions and, as a result, increased portfolio turnover, which could increase the costs that the fund incurs and may negatively impact the fund’s performance. </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, as the Fed increases the target Fed funds rate, any such rate increases among other factors, could cause markets to experience continuing high volatility. A significant increase in interest rates may cause a decline in the market for equity securities. These events and the possible resulting market volatility may have an adverse effect on the fund. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Political turmoil within the United States and abroad may also impact the fund. Although the U.S. government has honored its credit obligations, it remains possible that the United States could default on its obligations. While it is impossible to predict the consequences of such an unprecedented event, it is likely that a default by the United States would be highly disruptive to the United States and global securities markets and could significantly impair the value of the fund’s investments. Similarly, political events within the United States at times have resulted, and may in the future result, in a shutdown of government services, which could negatively affect the U.S. economy, decrease the value of many fund investments, and increase uncertainty in or impair the operation of the United States or other securities markets. In recent years, the U.S. renegotiated many of its global trade relationships and imposed or threatened to impose significant import tariffs. These actions could lead to price volatility and overall declines in U.S. and global investment markets. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Uncertainties surrounding the sovereign debt of a number of European Union (EU) countries and the viability of the EU have disrupted and may in the future disrupt markets in the United States and around the world. If one or more countries leave the EU or the EU dissolves, the global securities markets likely will be significantly disrupted. On January 31, 2020, the United Kingdom (UK) left the EU, commonly referred to as “Brexit,” the UK ceased to be a member of the EU and the UK and EU entered into a Trade and Cooperation Agreement. While the full impact of Brexit is unknown, Brexit has already resulted in volatility in European and global markets. There remains significant market uncertainty regarding Brexit’s ramifications, and the range and potential implications of possible political, regulatory, economic, and market outcomes are difficult to predict. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">A widespread health crisis such as a global pandemic could cause substantial market volatility, exchange trading suspensions and closures, which may lead to less liquidity in certain instruments, industries, sectors or the markets generally, and may ultimately affect fund performance. For example, the coronavirus (COVID-19) pandemic has resulted and may continue to result in significant disruptions to global business activity and market volatility due to disruptions in market access, resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. The impact of a health crisis and other epidemics and pandemics that may arise in the future, could affect the global economy in ways that cannot necessarily be foreseen at the present time. A health crisis may exacerbate other pre-existing political, social and economic risks. Any such impact could adversely affect the fund’s performance, resulting in losses to your investment. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Political and military events, including in Ukraine, North Korea, Russia, Venezuela, Iran, Syria, and other areas of the Middle East, and nationalist unrest in Europe and South America, also may cause market disruptions. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As a result of continued political tensions and armed conflicts, including the Russian invasion of Ukraine commencing in February of 2022, the extent and ultimate result of which are unknown at this time, the United States and the EU, along with the regulatory bodies of a number of countries, have imposed economic sanctions on certain Russian corporate entities and individuals, and certain sectors of Russia’s economy, which may result in, among other things, the continued devaluation of Russian currency, a downgrade in the country’s credit rating, and/or a decline in the value and liquidity of Russian securities, property or interests. These sanctions could also result in the immediate freeze of Russian securities and/or funds invested in prohibited assets, impairing the ability of the fund to buy, sell, receive or deliver those securities and/or assets. These sanctions or the threat of additional sanctions could also result in Russia taking counter measures or retaliatory actions, which may further impair the value and liquidity of Russian securities. The United States and other nations or international organizations may also impose additional economic sanctions or take other actions that may adversely affect Russia-exposed issuers and companies in various sectors of the Russian economy. Any or all of these potential results could lead Russia’s economy into a recession. Economic sanctions and other actions against Russian institutions, companies, and individuals resulting from the ongoing conflict may also have a substantial negative impact on other economies and securities markets both regionally and globally, as well as on companies with operations in the conflict region, the extent to which is unknown at this time. The United States and the EU have also imposed similar sanctions on Belarus for its support of Russia’s invasion of Ukraine. Additional sanctions may be imposed on Belarus and other countries that support Russia. Any such sanctions could present substantially similar risks as those resulting from the sanctions imposed on Russia, including substantial negative impacts on the regional and global economies and securities markets. </div><div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, there is a risk that the prices of goods and services in the United States and many foreign economies may decline over time, known as deflation. Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse. Further, there is a risk that the present value of assets or income from investments will be less in the future, known as inflation. Inflation rates may change frequently and drastically as a result of various factors, including unexpected shifts in the domestic or global economy, and the fund’s investments may be aff<div style="display:inline;">ec</div>ted, wh<div style="display:inline;">ic</div>h may reduce the fund’s performance. Further, inflation may lead to a rise in interest rates, which may negatively affect the value of debt instruments held by the fund, resulting in a negative impact on the fund’s performance. Generally, securities issued in emerging markets are subject to a greater risk of inflationary or deflationary forces, and more developed markets are better able to use monetary policy to normalize markets. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Equity Securities Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Common and preferred stocks represent equity ownership in a company. Stock markets are volatile. The price of equity securities will fluctuate, and can decline and reduce the value of a fund investing in equities. The price of equity securities fluctuates based on changes in a company’s financial condition and overall market and economic conditions. The value of equity securities purchased by a fund could decline if the financial condition of the companies in which the fund is invested declines, or if overall market and economic conditions deteriorate. An issuer’s financial condition could decline as a result of poor management decisions, competitive pressures, technological obsolescence, undue reliance on suppliers, labor issues, shortages, corporate restructurings, fraudulent disclosures, irregular and/or unexpected trading activity among retail investors, or other factors. Changes in the financial condition of a single issuer can impact the market as a whole. Even a fund that invests in high-quality, or blue chip, equity securities, or securities of established companies with large market capitalizations (which generally have strong financial characteristics), can be negatively impacted by poor overall market and economic conditions. Companies with large market capitalizations may also have less growth potential than smaller companies and may be less able to react quickly to changes in the marketplace. The fund generally does not attempt to time the market. Because of its exposure to equities, the possibility that stock market prices in general will decline over short or extended periods subjects the fund to unpredictable declines in the value of its investments, as well as periods of poor performance. </div> <div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Growth Investment Style Risk. </div></div>Certain equity securities (generally ref<div style="display:inline;">err</div>ed to as growth securities) are pur<div style="display:inline;">chased</div> primarily because a manager believes that these securities will experience relatively rapid earnings growth. Growth securities typically trade at higher multiples of current earnings than other securities. Growth securities are often more sensitive to market fluctuations than other securities because their market prices are highly sensitive to future earnings expectations. At times when it appears that these expectations may not be met, growth stock prices typically fall. </div> <div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Value Investment Style Risk. </div></div>Certain equity securities (generally referred to as value securities) are purchased primarily because they are selling at prices below what the manager believes to be their fundamental value and not necessarily because the issuing companies are expected to experience significant earnings growth. The fu<div style="display:inline;">nd</div> bears the <div style="display:inline;">ris</div>k that the companies that issued these securities may not overcome the adverse business developments or other factors causing their securities to be perceived by the manager to be underpriced or that the market may never come to recognize their fundamental value. A value security may not increase in price, as anticipated by the manager investing in such securities, if other investors fail to recognize the company’s value and bid up the price or invest in markets favoring faster growing companies. The fund’s strategy of investing in value securities also carries the risk that in certain markets, value securities will underperform growth securities. In addition, securities issued by U.S. entities with substantial foreign operations may involve risks relating to economic, political or regulatory conditions in foreign countries. </div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">ESG integration risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The manager considers ESG factors that it deems relevant or additive, along with other material factors and analysis, when managing the fund. The portion of the fund’s investments for which the manager considers these ESG factors may vary, and could increase or decrease over time. In certain situations, the extent to which these ESG factors may be applied according to the manager’s integrated investment process may not include U.S. Treasuries, government securities, or other asset classes. ESG factors may include, but are not limited to, matters regarding board diversity, climate change policies, and supply chain and human rights policies. Incorporating ESG criteria and making investment decisions based on certain ESG characteristics, as determined by the manager, carries the risk the fund may perform differently, including underperforming, funds that do not utilize ESG criteria, or funds that utilize different ESG criteria. Integration of ESG factors into the fund’s investment process may result in the manager making different investments for the fund than for a fund with a similar investment universe and/or investment style that does not incorporate such considerations in its investment strategy or processes, and the fund’s investment performance may be affected. Because ESG factors are one of many considerations for the fund, the manager may nonetheless include companies with low ESG characteristics or exclude companies with high ESG characteristics in the fund’s investments. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The ESG characteristics utilized in the fund’s investment process may change over time, and different ESG characteristics may be relevant to different investments. Although the manager has established its own structure to oversee ESG integration in accordance with the fund’s investment objective and strategies, successful integration of ESG factors will depend on the manager’s skill in researching, identifying, and applying these factors, as well as on the availability of relevant data. The method of evaluating ESG factors and subsequent impact on portfolio composition, performance, proxy voting decisions and other factors, is subject to the interpretation of the manager in accordance with the fund’s investment objective and strategies. ESG factors may be evaluated differently by different managers, and may not carry the same meaning to all investors and managers. The manager may employ active shareowner engagement to raise ESG issues with the management of select portfolio companies. The regulatory landscape with respect to ESG investing in the United States is evolving and any future rules or regulations may require the fund to change its investment process with respect to ESG integration. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Investment-Grade Fixed-Income Securities in the Lowest Rating Category Risk.</div></div></div> Investment-grade fixed-income securities in the lowest rating category (such as Baa by Moody’s Investors Service, Inc. or BBB by S&amp;P Global Ratings or Fitch Ratings, as applicable, and comparable unrated securities) involve a higher degree of risk than fixed-income securities in the higher rating categories. While such securities are considered investment-grade quality and are deemed to have adequate capacity for payment of principal and interest, such securities lack outstanding investment characteristics and have speculative characteristics as well. For example, changes in economic conditions or other circumstances are more likely to lead to a weakened capacity to make principal and interest payments than is the case with higher-grade securities. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Prepayment of Principal Risk.</div></div></div> Many types of debt securities, including floating-rate loans, are subject to prepayment risk. Prepayment risk is the risk that, when interest rates fall, certain types of obligations will be paid off by the borrower more quickly than originally anticipated and the fund may have to invest the proceeds in securities with lower yields. Securities subject to prepayment risk can offer less potential for gains when the credit quality of the issuer improves. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Extension Risk.</div></div></div> Extension risk is the danger that borrowers will defer prepayments due to market conditions. Extension risk is generally a concern in secondary market, structured-credit product investments. For instance, rising interest rates might discourage homeowners from refinancing their mortgages, which reduces prepayment flows. That extends the duration of the loans in a mortgage-backed security beyond what the valuation and risk models initially predicted. As a result, in a period of rising interest rates, such securities may exhibit additional volatility and may lose value. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Hedging, Derivatives, and Other Strategic Transactions Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The ability of the fund to utilize hedging, derivatives, and other strategic transactions to benefit the fund will depend in part on its Subadvisor’s ability to predict pertinent market movements and market risk, counterparty risk, credit risk, interest-rate risk, and other risk factors, none of which can be assured. The skills required to utilize hedging and other strategic transactions are different from those needed to select the fund’s securities. Even if the Subadvisor only uses hedging and other strategic transactions in the fund primarily for hedging purposes or to gain exposure to a particular securities market, if the transaction does not have the desired outcome, it could result in a significant loss to the fund. The amount of loss could be more than the principal amount invested. These transactions may also increase the volatility of the fund and may involve a small investment of cash relative to the magnitude of the risks assumed, thereby magnifying the impact of any resulting gain or loss. For example, the potential loss from the use of futures can exceed the fund’s initial investment in such contracts. In addition, these transactions could result in a loss to the fund if the counterparty to the transaction does not perform as promised. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in derivatives, which are financial contracts with a value that depends on, or is derived from, the value of underlying assets, reference rates, or indexes. Derivatives may relate to stocks, bonds, interest rates, currencies or currency exchange rates, and related indexes. The fund may use derivatives for many purposes, including for hedging and as a substitute for direct investment in securities or other assets. Derivatives may be used in a way to efficiently adjust the exposure of the fund to various securities, markets, and currencies without the fund actually having to sell existing investments and make new investments. This generally will be done when the adjustment is expected to be relatively temporary or in anticipation of effecting the sale of fund assets and making new investments over time. Further, </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">since many derivatives have a leverage component, adverse changes in the value or level of the underlying asset, reference rate, or index can result in a loss substantially greater than the amount invested in the derivative itself. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. When the fund uses derivatives for leverage, investments in the fund will tend to be more volatile, resulting in larger gains or losses in response to market changes. To limit risks associated with leverage, the fund is required to comply with Rule 18f-4 under the 1940 Act (the “Derivatives Rule”) as outlined below. For a description of the various derivative instruments the fund may utilize, refer to the SAI. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The regulation of the U.S. and non-U.S. derivatives markets has undergone substantial change in recent years and such change may continue. In particular, effective August 19, 2022 (the “Compliance Date”), the Derivatives Rule replaced the asset segregation regime of Investment Company Act Release No. 10666 (“Release 10666”) with a new framework for the use of derivatives by registered funds. On the Compliance Date, the SEC rescinded Release 10666 and withdrew no-action letters and similar guidance addressing a fund’s use of derivatives and began requiring funds to satisfy the requirements of the Derivatives Rule. As a result, on or after the Compliance Date, the fund will no longer engage in “segregation” or “coverage” techniques with respect to derivatives transactions and will instead comply with the applicable requirements of the Derivatives Rule. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Derivatives Rule mandates that the fund adopt and/or implement: (i) value-at-risk limitations (“VaR”); (ii) a written derivatives risk management program; (iii) new Board oversight responsibilities; and (iv) new reporting and recordkeeping requirements. In the event that a fund’s derivative exposure is 10% or less of its net assets, excluding certain currency and interest rate hedging transactions, it can elect to be classified as a limited derivatives user (“Limited Derivatives User”) under the Derivatives Rule, in which case the fund is not subject to the full requirements of the Derivatives Rule. Limited Derivatives Users are excepted from VaR testing, implementing a derivatives risk management program, and certain Board oversight and reporting requirements mandated by the Derivatives Rule. However, a Limited Derivatives User is still required to implement written compliance policies and procedures reasonably designed to manage its derivatives risks. The Derivatives Rule also provides special treatment for reverse repurchase agreements, similar financing transactions and unfunded commitment agreements. Specifically, the fund may elect whether to treat reverse repurchase agreements and similar financing transactions as “derivatives transactions” subject to the requirements of the Derivatives Rule or as senior securities equivalent to bank borrowings for purposes of Section 18 of the 1940 Act. In addition, a fund, including money market funds, may invest in a security on a when-issued or forward-settling basis, or with a non-standard settlement cycle, and the transaction will be deemed not to involve a senior security, provided that: (i) the fund intends to physically settle the transaction; and (ii) the transaction will settle within 35 days of its trade date. At any time after the date of this Prospectus, legislation may be enacted that could negatively affect the assets of the fund. Legislation or regulation may change the way in which the fund itself is regulated. The Advisor cannot predict the effects of any new governmental regulation that may be implemented, and there can be no assurance that any new governmental regulation will not adversely affect the fund’s ability to achieve its investment objectives. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The use of derivative instruments may involve risks different from, or potentially greater than, the risks associated with investing directly in securities and other, more traditional assets. In particular, the use of derivative instruments exposes the fund to the risk that the counterparty to an OTC derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction, although either party may engage in an offsetting transaction that puts that party in the same economic position as if it had closed out the transaction with the counterparty or may obtain the other party’s consent to assign the transaction to a third party. If the counterparty defaults, the fund will have contractual remedies, but there is no assurance that the counterparty will meet its contractual obligations or that, in the event of default, the fund will succeed in enforcing them. For example, because the contract for each OTC derivatives transaction is individually negotiated with a specific counterparty, the fund will be subject to the risk that a counterparty may interpret contractual terms (e.g., the definition of default) differently than the fund when the fund seeks to enforce its contractual rights. If that occurs, the cost and unpredictability of the legal proceedings required for the fund to enforce its contractual rights may lead it to decide not to pursue its claims against the counterparty. The fund, therefore, assumes the risk that it may be unable to obtain payments owed to it under OTC derivatives contracts or that those payments may be delayed or made only after the fund has incurred the costs of litigation. While the Subadvisor intends to monitor the creditworthiness of counterparties, there can be no assurance that a counterparty will meet its obligations, especially during unusually adverse market conditions. To the extent the fund contracts with a limited number of counterparties, the fund’s risk will be concentrated and events that affect the creditworthiness of any of those counterparties may have a pronounced effect on the fund. Derivatives are also subject to a number of other risks, including market risk, liquidity risk, and operational risk. Since the value of derivatives is calculated and derived from the value of other assets, instruments, or references, there is a risk that they will be improperly valued. Derivatives also involve the risk that changes in their value may not correlate perfectly with the assets, rates, or indexes they are designed to hedge or closely track. Suitable derivatives transactions may not be available in all circumstances. The fund is also subject to the risk that the counterparty closes out the derivatives transactions upon the occurrence of certain triggering events. In addition, a Subadvisor may determine not to use derivatives to hedge or otherwise reduce risk exposure. Government legislation or regulation could affect the use of derivatives transactions and could limit the fund’s ability to pursue its investment strategies. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">A detailed discussion of various hedging and other strategic transactions appears in the SAI. To the extent that the fund utilizes the following list of certain derivatives and other strategic transactions, it will be subject to associated risks. The main risks of each appear below. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Futures Contracts.</div></div> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), and risk of disproportionate loss are the principal risks of engaging in transactions involving futures contracts. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Interest-Rate Swaps.</div></div> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk, and risk of disproportionate loss are the principal risks of engaging in transactions involving interest-rate swaps. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Options.</div></div> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), and risk of disproportionate loss are the principal risks of engaging in transactions involving options. Counterparty risk does not apply to exchange-traded options. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Reverse Repurchase Agreements</div></div>. An event of default or insolvency of the counterparty to a reverse repurchase agreement could result in delays or restrictions with respect to the fund’s ability to dispose of the underlying securities. A reverse repurchase agreement may be considered a form of leverage and may, therefore, increase fluctuations in the fund’s NAV. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Swaps.</div></div> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk, settlement risk, risk of default of the underlying reference obligation, and risk of disproportionate loss are the principal risks of engaging in transactions involving swaps. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Illiquidity of Shares </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund is a closed-end investment company designed primarily for long-term investors and is not intended to be a trading vehicle. An investment in the Shares, unlike an investment in a traditional listed closed-end fund, should be considered illiquid. The Shares are appropriate only for investors who are seeking an investment in less liquid portfolio investments within an illiquid fund. The fund does not currently intend to list Shares for trading on any national securities exchange. There is no secondary trading market for Shares, and it is not expected that a secondary market will develop. Shares therefore are not readily marketable. Because the fund is a closed-end investment company, Shares in the fund may not be tendered for repurchase on a daily basis, and they may not be exchanged for shares of any other fund. In order to provide liquidity to Shareholders, the fund is structured as an “interval fund” and conducts periodic repurchase offers for a portion of its outstanding Shares pursuant to Rule 23c-3 under the 1940 Act, as described herein. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Inflation/Deflation Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Inflation risk is the risk that the value of assets or income from investment will be worth less in the future, as inflation decreases the value of money. As inflation increases, the real value of the Shares and distributions on those Shares can decline. In addition, during any periods of rising inflation, interest rates on any borrowings by the fund may increase, which would tend to further reduce returns to the holders of Shares. Deflation risk is the risk that prices throughout the economy decline over time, which may have an adverse effect on the market valuation of companies, their assets and revenues. In addition, deflation may have an adverse effect on the creditworthiness of issuers and may make issuer default more likely, which may result in a decline in the value of the fund’s portfolio. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Lending Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may originate loans to, or purchase, assignments of or participations in loans made to, various issuers, including distressed companies. Such investments may include senior secured, junior secured and mezzanine loans and other secured and unsecured debt that has been recently originated or that trade on the secondary market. The value of the fund’s investment in loans may be detrimentally affected to the extent a borrower defaults on its obligations, there is insufficient collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted loan. However, there can be no assurance that the value assigned by the fund to collateral underlying a loan of the fund can be realized upon liquidation, nor can there be any assurance that collateral will retain its value. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Moreover, loans may also be supported by collateral, the value of which may fluctuate. In addition, active lending/origination by the fund may subject it to additional regulation. Finally, there may be a monetary, as well as a time cost involved in collecting on defaulted loans and, if applicable, taking possession of various types of collateral. Should the fund need to collect on a defaulted loan, litigation could result. In addition, even before litigation is commenced, the fund could experience substantial costs in trying to collect on defaulted investments, such as legal fees, collection agency fees, or discounts related to the assignment of a defaulted loan to a third party. Any litigation may consume substantial amounts of the Advisor’s and the Subadvisor’s time and attention, and that time and the devotion of these resources to litigation may, at times, be disproportionate to the amounts at stake in the litigation. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">There will be no limits with respect to loan origination by the fund other than: (i) the diversification limits of the 1940 Act; and (ii) the restrictions on investments involving the Subadvisor’s affiliates (e.g., securitizations where the Subadvisor is sponsor). </div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Leverage Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Leverage creates risks for Shareholders, including the likelihood of greater volatility of NAV and market price of, and distributions from, the Shares and the risk that fluctuations in the costs of borrowings may affect the return to Shareholders. To the extent the income derived from investments purchased with funds received from leverage exceeds the cost of leverage, the fund’s distributions will be greater than if leverage had not been used. Conversely, if the income from the investments purchased with such funds is not sufficient to cover the cost of leverage, the amount available for distribution to Shareholders will be less than if leverage had not been used. In the latter case, the Advisor, in its best judgment, may nevertheless determine to maintain the fund’s leveraged position if it deems such action to be appropriate. While the fund has preferred shares or borrowings outstanding, an increase in short-term rates would also result in an increased cost of leverage, which would adversely affect the fund’s income available for distribution. There can be no assurance that a leveraging strategy will be successful. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Leverage may be achieved through the purchase of certain derivative instruments. The fund’s use of derivative instruments exposes the fund to special risks. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Management Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund is subject to management risk because it relies on the Subadvisor’s ability to pursue the fund’s investment objective, subject to the oversight of the Advisor and the Board. The Subadvisor applies investment techniques and risk analyses in making investment decisions for the fund, but there can be no guarantee that it will produce the desired results. The Subadvisor’s securities selections and other investment decisions might produce a loss or cause the fund to underperform when compared to other funds with similar investment goals. If one or more key individuals leave the employ of the Subadvisor, then the Subadvisor may not be able to hire qualified replacements, or may require an extended time to do so. This could prevent the fund from achieving its investment objective. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Natural Disasters, Adverse Weather Conditions, and Climate Change </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Certain areas of the world may be exposed to adverse weather conditions, such as major natural disasters and other extreme weather events, including hurricanes, earthquakes, typhoons, floods, tidal waves, tsunamis, volcanic eruptions, wildfires, droughts, windstorms, coastal storm surges, heat waves, and rising sea levels, among others. Some countries and regions may not have the infrastructure or resources to respond to natural disasters, making them more economically sensitive to environmental events. Such disasters, and the resulting damage, could have a severe and negative impact on the fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the fund invests to conduct their businesses in the manner normally conducted. Adverse weather conditions also may have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Climate change, which is the result of a change in global or regional climate patterns, may increase the frequency and intensity of such adverse weather conditions, resulting in increased economic impact, and may pose long-term risks to the fund’s investments. The future impact of climate change is difficult to predict but may include changes in demand for certain goods and services, supply chain disruption, changes in production costs, increased legislation, regulation, international accords and compliance-related costs, changes in property and security values, availability of natural resources and displacement of peoples. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for issuers in which the fund invests. These developments may create demand for new products or services, including, but not limited to, increased demand for goods that result in lower emissions, increased demand for generation and transmission of energy from alternative energy sources and increased competition to develop innovative new products and technologies. These developments may also decrease demand for existing products or services, including, but not limited to, decreased demand for goods that produce significant greenhouse gas emissions and decreased demand for services related to carbon based energy sources, such as drilling services or equipment maintenance services. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Operational and Cybersecurity Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">With the increased use of technologies, such as mobile devices and cloud-based service offerings and the dependence on the internet and computer systems to perform necessary business functions, the fund’s service providers are susceptible to operational and information or cybersecurity risks that could result in losses to the fund and its Shareholders. Cybersecurity breaches are either intentional or unintentional events that allow an unauthorized party to gain access to fund assets, customer data, or proprietary information, or cause the fund or fund service providers to suffer data corruption or lose operational functionality. Intentional cybersecurity incidents include: unauthorized access to systems, networks, or devices (such as through “hacking” activity or “phishing”); infection from computer viruses or other malicious software code; and attacks that shut down, disable, slow, or otherwise disrupt operations, business processes, or website access or functionality. Cyberattacks can also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on the service providers’ systems or websites rendering them unavailable to intended users or via “ransomware” that renders the systems inoperable until appropriate actions are taken. In addition, unintentional incidents can occur, such as the inadvertent release of confidential information. </div></div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">A cybersecurity breach could result in the loss or theft of customer data or funds, loss or theft of proprietary information or corporate data, physical damage to a computer or network system, or costs associated with system repairs, any of which could have a substantial impact on the fund. For example, in a denial of service, fund Shareholders could lose access to their electronic accounts indefinitely, and employees of the Advisor, the Subadvisor, or the fund’s other service providers may not be able to access electronic systems to perform critical duties for the fund, such as trading, NAV calculation, shareholder accounting, or fulfillment of fund share purchases and share repurchases Cybersecurity incidents could cause the fund, the Advisor, the Subadvisor, or other service provider to incur regulatory penalties, reputational damage, compliance costs associated with corrective measures, litigation costs, or financial loss. They may also result in violations of applicable privacy and other laws. In addition, such incidents could affect issuers in which the fund invests, thereby causing the fund’s investments to lose value. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Cyber-events have the potential to affect materially the fund and the Advisor’s relationships with accounts, shareholders, clients, customers, employees, products, and service providers. The fund has established risk management systems reasonably designed to seek to reduce the risks associated with cyber-events. There is no guarantee that the fund will be able to prevent or mitigate the impact of any or all cyber-events. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund is exposed to operational risk arising from a number of factors, including, but not limited to, human error, processing and communication errors, errors of the fund’s service providers, counterparties, or other third parties, failed or inadequate processes, and technology or system failures. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Advisor, the Subadvisor, and their respective affiliates have established risk management systems that seek to reduce cybersecurity and operational risks, and business continuity plans in the event of a cybersecurity breach or operational failure. However, there are inherent limitations in such plans, including that certain risks have not been identified, and there is no guarantee that such efforts will succeed, especially since none of the Advisor, the Subadvisor, or their respective affiliates controls the cybersecurity or operations systems of the fund’s third-party service providers (including the fund’s custodian), or those of the issuers of securities in which the fund invests. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, other disruptive events, including (but not limited to) natural disasters and public health crises, may adversely affect the fund’s ability to conduct business, in particular if the fund’s employees or the employees of its service providers are unable or unwilling to perform their responsibilities as a result of any such event. Even if the fund’s employees and the employees of its service providers are able to work remotely, those remote work arrangements could result in the fund’s business operations being less efficient than under normal circumstances, could lead to delays in its processing of transactions, and could increase the risk of cyber-events. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Potential Consequences of Periodic Repurchase Offers </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund is a closed-end investment company structured as an “interval fund” and is designed for long-term investors. There is no secondary market for the Shares and the fund expects that no secondary market will develop. In order to provide liquidity to Shareholders, the fund, subject to applicable law, conducts regular repurchase offers of its outstanding Shares at NAV per share. Repurchases generally will be funded from available cash or sales of portfolio securities. However, if at any time cash and other liquid assets held by the fund are not sufficient to meet the fund’s repurchase obligations, the fund may, if necessary, sell investments. The sale of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the fund’s NAV per share. The fund is also permitted to borrow up to the maximum extent permitted under the 1940 Act to meet such repurchase obligations. The fund does not currently intend to borrow to finance repurchases, although it may invest in dollar rolls. Moreover, a reduction in the size of the fund through repurchases may result in untimely sales of portfolio securities, may increase the fund’s portfolio turnover, and may limit the ability of the fund to participate in new investment opportunities or to achieve its investment objective. If a repurchase offer is oversubscribed, the fund will repurchase the Shares tendered on a pro rata basis, and Shareholders will have to wait until the next repurchase offer to make another repurchase request. As a result, Shareholders may be unable to liquidate all or a given percentage of their investment in the fund during a particular repurchase offer. A Shareholder may be subject to market and other risks, and the NAV per share of Shares tendered in a repurchase offer may decline between the Repurchase Request Deadline (as defined herein) and the date on which the NAV per share for tendered Shares is determined. In addition, to the extent the fund sells portfolio holdings in order to fund repurchase requests, the repurchase of Shares by the fund will be a taxable event for the Shareholders of repurchased Shares, and potentially even for Shareholders that do not participate in the repurchase offer. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Regulatory Changes Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Legal, tax and regulatory changes could occur and may adversely affect the fund and its ability to pursue its investment strategies and/or increase the costs of implementing such strategies. New (or revised) laws or regulations may be imposed by the CFTC, the SEC, the IRS, the U.S. Federal Reserve or other banking regulators, other governmental regulatory authorities or self-regulatory organizations that supervise the financial markets that could adversely affect the fund. In particular, these agencies are implementing a variety of new rules pursuant to financial reform legislation in the United States. The EU (and some other countries) are implementing similar requirements. The fund also may be adversely affected by changes in the enforcement or interpretation of existing statutes and rules by these governmental regulatory authorities or self-regulatory organizations. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, the securities and futures markets are subject to comprehensive statutes, regulations and margin requirements. The CFTC, the SEC, the Federal Deposit Insurance Corporation, other regulators and self-regulatory organizations and exchanges are authorized under these statutes, regulations and otherwise to take extraordinary actions in the event of market emergencies. The fund and the Advisor historically have been eligible for exemptions from certain regulations. However, there is no assurance that the fund and the Advisor will continue to be eligible for such exemptions. The CFTC and certain futures exchanges have established limits, referred to as “position limits,” on the maximum net long or net short positions which any person may hold or control in particular options and futures contracts. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Current rules related to credit risk retention requirements for asset backed securities may increase the cost to originators, securitizers and, in certain cases, asset managers of securitization vehicles in which the fund may invest. The impact of the risk retention rules on the securitization markets is uncertain. These requirements may increase the costs to originators, securitizers, and, in certain cases, collateral managers of securitization vehicles in which the fund may invest, which costs could be passed along to such fund as an investor in such vehicles. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Tax Risk </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">To qualify for the special tax treatment available to regulated investment companies, the fund must: (i) derive at least 90% of its annual gross income from certain kinds of investment income; (ii) meet certain asset diversification requirements at the end of each quarter; and (iii) distribute in each taxable year at least the sum of 90% of its net investment income (including net interest income and net short term capital gain and 90% of its net exempt interest income). If the fund fails to meet any of these requirements, subject to the opportunity to cure such failures under applicable provisions of the Code, the fund will be subject to U.S. federal income tax at regular corporate rates on its taxable income, including its net capital gain, even if such income were distributed to Shareholders. All distributions by the fund from earnings and profits, including distributions of net capital gain (if any), would be taxable to the Shareholders as ordinary income. To the extent designated by the fund, such distributions generally would be eligible (i) to be treated as qualified dividend income in the case of individual and other non-corporate Shareholders and (ii) for the dividends received deduction in the case of corporate Shareholders, provided that in each case the Shareholder meets applicable holding period requirements. In addition, in order to requalify for taxation as a regulated investment company, the fund might be required to recognize unrealized gain, pay substantial taxes and interest, and make certain distributions. See “Federal Income Tax Matters.” </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The tax treatment and characterization of the fund’s distributions may vary significantly from time to time due to the nature of the fund’s investments. The ultimate tax characterization of the fund’s distributions in a calendar year may not finally be determined until after the end of that calendar year. The fund may make distributions during a calendar year that exceed the fund’s net investment income and net realized capital gain for that year. In such a situation, the amount by which the fund’s total distributions exceed net investment income and net realized capital gain generally would be treated as a return of capital up to the amount of the Shareholder’s tax basis in his or her Shares, with any amounts exceeding such basis treated as gain from the sale of his or her Shares. The fund’s income distributions that qualify for favorable tax treatment may be affected by the IRS’s interpretations of the Code and future changes in tax laws and regulations. See “Federal Income Tax Matters.” </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">No assurance can be given as to what percentage of the distributions paid on Shares, if any, will consist of long-term capital gain or what the tax rates on various types of income will be in future years. See “Federal Income Tax Matters.” </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Valuation Risk. </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Board has designated the Advisor as the valuation designee to perform fair value functions for the fund in accordance with the Advisor’s valuation policies and procedures. In accordance with these policies and procedures, the Advisor values the fund’s investments at fair value as determined in good faith when market quotations are not readily available or are deemed to be unreliable. Fair value pricing may require subjective determinations about the value of a security or other asset. As a result, there can be no assurance that fair value pricing will reflect actual market value, and it is possible that the fair value determined for a security or other asset will be materially different from quoted or published prices, from the prices used by others for the same security or other asset and/or from the value that actually could be or is realized upon the sale of that security or other asset. The Advisor, as valuation designee, is subject to Board oversight and reports to the Board information regarding the fair valuation process and related material matters. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Usury Limitations </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">Interest charged on loans acquired by the fund may be subject to state usury laws imposing maximum interest rates and penalties for violations, including restitution of excess interest and unenforceability of debt. </div></div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Commercial Real Estate and Residential Real Estate Investments </div></div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Investments in Real Estate Investments and Real Estate Debt Generally </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund seeks to originate and acquire loans secured by commercial or residential real estate. Any deterioration of real estate fundamentals generally could negatively impact the fund’s performance by making it more difficult for borrowers to satisfy their debt payment obligations, increasing the default risk applicable to borrowers and making it relatively more difficult for the fund to meet its investment objective. Real estate investments are subject to various risks, including: (i) economic and market fluctuations; (ii) changes in environmental, zoning and other laws; (iii) casualty or condemnation losses; (iv) regulatory limitations on rents; (v) decreases in property values; (vi) changes in the appeal of properties to tenants; (vii) tenant defaults; (viii) changes in supply and demand; (ix) energy supply shortages; (x) various uninsured or uninsurable risks; (xi) natural disasters; (xii) changes in government regulations (such as rent control); (xiii) changes in the availability of debt financing and/or mortgage funds which may render the sale or refinancing of properties difficult or impracticable; (xiv) increased mortgage defaults; (xv) increases in borrowing rates; and (xvi) negative developments in the economy that depress travel activity, demand and real estate values generally. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Debt investments are subject to credit and interest rate risks. </div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated with Commercial Real Estate Loans </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Loans on commercial real estate properties generally lack standardized terms, which may complicate their structure and increase due diligence costs. Commercial real estate properties tend to be unique and are more difficult to value than residential properties. Commercial real estate loans also tend to have shorter maturities than residential mortgage loans and are generally not fully amortizing, which means that they may have a significant principal balance or “balloon” payment due on maturity. Loans with a balloon payment involve a greater risk to a lender than fully amortizing loans because the ability of a borrower to make a balloon payment typically will depend upon its ability either to fully refinance the loan or to sell the collateral property at a price sufficient to permit the borrower to make the balloon payment. The ability of a borrower to effect a refinancing or sale will be affected by a number of factors, including the value of the property, mortgage rates at the time of sale or refinancing, the borrower’s equity in the property, the financial condition and operating history of the property and the borrower, tax laws, prevailing economic conditions and the availability of credit for loans secured by the specific type of property. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Investing in commercial real estate loans is subject to cyclicality and other uncertainties. The cyclicality and leverage associated with commercial real estate loans also have historically resulted in periods, including significant periods, of adverse performance, including performance that may be materially more adverse than the performance associated with other investments. Commercial real estate loans generally are non-recourse to borrowers. Commercial real estate loans are subject to the effects of: (i) the ability of tenants to make lease payments; (ii) the ability of a property to attract and retain tenants, which may in turn be affected by local conditions, such as an oversupply of space or a reduction in demand for rental space in the area, the attractiveness of properties to tenants, competition from other available space and the ability of the owner to pay leasing commissions, provide adequate maintenance and insurance, pay tenant improvement costs and make other tenant concessions; (iii) the failure or insolvency of tenant businesses; (iv) interest rate levels and the availability of credit to refinance such loans at or prior to maturity; (v) compliance with regulatory requirements and applicable laws, including environmental controls and regulations and (vi) increased operating costs, including energy costs and real estate taxes. Also, there may be costs and delays involved in enforcing rights of a property owner against tenants in default under the terms of leases with respect to commercial properties and such tenants may seek the protection of the bankruptcy laws, which can result in termination of lease contracts. If the properties securing the loans do not generate sufficient income to meet operating expenses, debt service, capital expenditure and tenant improvements, the obligors under the loans may be unable to make payments of principal and interest in a timely fashion. Income from and values of properties are also affected by such factors as the quality of the property manager, applicable laws, including tax laws, interest rate levels, the availability of financing for owners and tenants and the impact of and costs of compliance with environmental controls and regulations. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated with Residential Mortgage Loans </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in loans secured by residential real estate, including potentially mortgages made to borrowers with lower credit scores. Accordingly, such mortgage loans may be more sensitive to economic factors that could affect the ability of borrowers to pay their obligations under the mortgage loans. A decline or an extended flattening of home prices and appraisal values may result in increases in delinquencies and losses on residential mortgage loans, particularly with respect to second homes and investor properties and with respect to any residential mortgage loan where the aggregate loan amount (including any subordinate liens) is close to or greater than the related property value. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Another factor that may result in higher delinquency rates is the increase in monthly payments on adjustable-rate mortgage loans. Borrowers with adjustable payment mortgage loans will be exposed to increased monthly payments when the related mortgage interest rate adjusts upward from the initial fixed rate or a low introductory rate, as applicable, to the rate computed in accordance with the applicable index and margin. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Certain residential mortgage loans may be structured with negative amortization features. Negative amortization arises when the mortgage payment in respect of a loan is smaller than the interest due on such loan. On any such mortgage loans, if the required minimum monthly payments are less than the interest accrued on the loan, the interest shortfall is added to the principal balance, causing the loan balance to increase rather than decrease over time. Because the related mortgagors may be required to make a larger single payment upon maturity, the default risk associated with such mortgage loans may be greater than that associated with fully amortizing mortgage loans. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated with Mezzanine Investments </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in mezzanine debt which has significant leverage ranking ahead of the fund’s investment. While the Subadvisor anticipates that the fund’s investment will usually benefit from the same or similar financial and other covenants as those enjoyed by the leverage ranking ahead of the fund’s investment, and will usually benefit from cross-default provisions, some or all of such terms may not be part of particular investments. The Subadvisor anticipates that the fund’s usual security for its mezzanine investments will be pledges of ownership interests, directly and/or indirectly, in a property-owning entity, and in some cases the fund may not have a mortgage or other direct security interest in the underlying real estate assets. Moreover, it is likely that the fund will be restricted in the exercise of its rights in respect of its mezzanine investments by the terms of subordination agreements between it and the debt or other securities ranking ahead of the mezzanine capital. Accordingly, the fund may not be able to take the steps necessary to protect its mezzanine investments in a timely manner or at all and there can be no assurance that the rate of return objectives of the fund or any particular investment will be achieved. To protect its original investment and to gain greater control over the underlying assets, the fund may need to elect to purchase the interest of a senior creditor or take an equity interest in the underlying assets, which may require additional investment by the fund. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated With B-notes and Preferred Equity Interests </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may hold B-notes and preferred equity interests, each of which are subordinate or otherwise junior in a borrower’s capital structure and involve privately negotiated structures. To the extent the fund holds subordinated debt or mezzanine tranches of a borrower’s capital structure or preferred equity interests, such investments and the fund’s remedies with respect thereto, including the ability to foreclose on any collateral securing such investments, will be subject to the rights of holders of more senior tranches in the borrower’s capital structure and, to the extent applicable, contractual intercreditor and/or participation agreement provisions, which will expose the fund to greater risk of loss. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As the terms of such loans and investments are subject to contractual relationships among lenders, co-lending agents and others, they can vary significantly in their structural characteristics and other risks. For example, the rights of holders of B-notes to control the process following a borrower default may vary from transaction to transaction. Further, B-notes typically are secured by a single property and accordingly reflect the risks associated with significant concentration. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated with Construction Loans </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in mortgage loans used to finance the cost of construction or rehabilitation of a property, including ground up construction. Such construction lending may expose the fund to increased lending risks. Construction loans generally expose a lender to greater risk of non-payment and loss than permanent commercial mortgage loans because repayment of the loans often depends on the borrower’s ability to secure permanent “take-out” financing, which requires the successful completion of construction and stabilization of the project, or operation of the property with an income stream sufficient to meet operating expenses, including debt service on such replacement financing. For construction loans, increased risks include the accuracy of the estimate of the property’s value at completion of construction and the estimated cost of construction—all of which may be affected by unanticipated construction delays and cost over-runs. Construction delays and cost over-runs may result from increasing costs or shortages of skilled labor and/or framing, concrete, steel and other building materials, environmental damage, delays in obtaining the requisite approvals, permits, licenses or certifications from the relevant authorities, legal actions, work stoppages, operational issues relating to construction, budget overruns and lack of financing. Construction loans typically involve an expectation that the borrower’s sponsors will contribute sufficient equity funds in order to keep the loan “in balance,” and the sponsors’ failure or inability to meet this obligation could also result in delays in construction or an inability to complete construction. Construction loans also expose the lender to additional risks of contractor non-performance, or borrower disputes with contractors resulting in mechanic’s or materialmen’s liens on the property and possible further delay in construction. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, as the lender under a construction loan, the fund may be obligated to fund all or a significant portion of the loan at one or more future dates. The fund may not have the funds available at such future date(s) to meet its funding obligations under the loan. In that event, the fund would likely be in breach of the loan unless it is able to acquire the funds from alternative sources, which it may not be able to achieve on favorable terms or at all. Furthermore, construction loans may have multiple lenders and if another lender fails to fund its obligations, the fund could be faced with the choice of either funding for that defaulting lender or suffering a delay or protracted interruption in the progress of construction. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Consumer-Related Asset-Backed Securities </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;">Asset-Backed Securities. </div></div></div>See Asset-Backed Securities above. </div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Consumer Finance Industry Regulatory Environment </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may be subject to a wide variety of laws and regulations in the jurisdictions where it operates in respect of its consumer finance activities, including supervision and licensing by numerous governmental entities. These laws and regulations may create significant constraints on the fund’s consumer finance investments and result in significant costs related to compliance. Failure to comply with these laws and regulations could impair the ability of the fund to continue to make such investments and result in substantial civil and criminal penalties, monetary damages, attorneys’ fees and costs, possible revocation of licenses, and damage to reputation, brand and customer relationships. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Dodd-Frank Act imposes significant regulatory oversight on the financial industry and grants the Consumer Financial Protection Bureau, or the CFPB, extensive rulemaking and enforcement authority, all of which may substantially impact the fund’s consumer finance investments. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may also invest in other consumer debt and specialty finance markets, including, but not limited to, credit card receivables, asset-backed regulatory relief transactions, litigation finance, royalty transactions, equipment (e.g., renewable energy, construction, information technology, medical, logistics) and insurance-linked contracts. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Noncompliance with Consumer Financial Protection Laws </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">If certain consumer loan contracts do not comply with U.S. federal and state consumer financial protection laws, the servicer may be prevented from or delayed in collecting the loan contract. Also, some of these laws may provide that the assignee of a consumer contract (such as the issuing entity) is liable to the obligor for any failure of the contract to comply with these laws. This could result in delays in payment or losses on such loan contracts. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Associated with Corporate Asset-Based Credit </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in asset-based corporate credit secured by real estate, equipment, receivables, inventory and intellectual property rights. A fundamental risk associated with the fund’s investments in asset-based corporate credit is that the companies in whose debt the fund invests will be unable to make regular payments (e.g., principal and interest payments) when due, or at all, or otherwise fail to perform. A number of factors may impact the failure of such companies to make payments on their loans, such as, among other factors, (i) an adverse development in their business, (ii) an economic downturn, (iii) poor performance by their management teams, (iv) legal, tax or regulatory changes, (v) a change in the competitive environment, or (vi) a force majeure event. The companies may be operating at a loss or have significant variations in operating results, or may otherwise be experiencing financial distress even when the Subadvisor expects them to remain stable. Additionally, the companies may require substantial additional capital to support their operations or to maintain their competitive position and as a result of that may become highly leveraged. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For further information, see “Asset-Backed Securities” above. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Esoteric Credit </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For the risks of investing in asset-back securities, see “Asset-Backed Securities” above. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Alternative Investments </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest its assets in “alternative investments,” which include non-traditional debt investments and smaller segments of the debt markets, also known as niche or esoteric debt products. Alternative investments provide limited liquidity and include, among other things, the risks inherent in investing in securities, futures, commodities and derivatives, using leverage and engaging in short sales. An investment in alternative investment products is speculative, involves substantial risks, and should not constitute a complete investment program. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Securitized Credit </div></div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Asset-Backed Securities. </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For the risks of investing in asset-back securities, see “Asset-Backed Securities” above. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Commercial Mortgage-Backed Securities </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Collateral underlying CMBS generally consists of mortgage loans secured by income producing property, such as regional malls, other retail space, office buildings, industrial or warehouse properties, hotels, rental apartments, nursing homes, senior living centers and self-storage properties. The fund may invest directly in CMBS. Performance of a commercial mortgage loan depends primarily on the net income generated by the underlying mortgaged property. The market value of a commercial property similarly depends on its income-generating ability. As a result, income generation will affect both the likelihood of default and the severity of losses with respect to a commercial mortgage loan. Any decrease in income or value of the commercial real estate underlying an issue of CMBS could result in cash flow delays and losses on the related issue of CMBS. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Most commercial mortgage loans underlying CMBS are effectively non-recourse obligations of the borrower, meaning that there is no recourse against the borrower’s assets other than the collateral. If borrowers are not able or willing to refinance or dispose of encumbered property to pay the principal and interest owed on such mortgage loans, payments on the subordinated classes of the related CMBS are likely to be adversely affected. The ultimate extent of the loss, if any, to the subordinated classes of CMBS may only be determined after a negotiated discounted settlement, restructuring or sale of the mortgage note, or the foreclosure (or deed in lieu of foreclosure) of the mortgage encumbering the property and subsequent liquidation of the property. Foreclosure can be costly and delayed by litigation and/or bankruptcy. Factors such as the property’s location, the legal status of title to the property, its physical condition and financial performance, environmental risks and governmental disclosure requirements with respect to the condition of the property may make a third party unwilling to purchase the property at a foreclosure sale or to pay a price sufficient to satisfy the obligations with respect to the related CMBS. Revenues from the assets underlying such CMBS may be retained by the borrower and the return on investment may be used to make payments to others, maintain insurance coverage, pay taxes or pay maintenance costs. Such diverted revenue is generally not recoverable without a court appointed receiver to control collateral cash flow. The owner of CMBS does not have a contractual relationship with the borrowers of the underlying commercial mortgage loans. The CMBS holder typically has no right directly to enforce compliance by the borrowers with the terms of the loan agreement, nor any rights of set-off against the borrower, nor will it have the right to object to certain changes to the underlying loan agreements, nor to move directly against the collateral supporting the related loans. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">At any one time, a portfolio of CMBS may be backed by commercial mortgage loans with disproportionately large aggregate principal amounts secured by properties in only a few states or regions. As a result, the commercial mortgage loans may be more susceptible to geographic risks relating to such areas, such as adverse economic conditions, adverse events affecting industries located in such areas and natural hazards affecting such areas, than would be the case for a pool of mortgage loans having more diverse property locations. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Residential Mortgage-Backed Securities </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Holders of RMBS bear various risks, including credit, market, interest rate, structural and legal risks. RMBS represent interests in pools of residential mortgage loans secured by one to four family residential mortgage loans. Residential mortgage loans may be prepaid at any time. Residential mortgage loans are obligations of the borrowers thereunder only and are not typically insured or guaranteed by any other person or entity, although such loans may be securitized by government agencies and the securities issued may be guaranteed. The rate of defaults and losses on residential mortgage loans will be affected by a number of factors, including general economic conditions and those in the geographic area where the related mortgaged property or properties are located, the terms of the loan, the borrower’s “equity” in the mortgaged property or properties and the financial circumstances of the borrower. If a residential mortgage loan is in default, foreclosure of such residential mortgage loan may be a lengthy and difficult process, and may involve significant expenses. Furthermore, the market for defaulted residential mortgage loans or foreclosed single-family properties may be very limited. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">At any one time, a portfolio of RMBS may be backed by residential mortgage loans with disproportionately large aggregate principal amounts secured by properties in only a few states or regions. As a result, the residential mortgage loans may be more susceptible to geographic risks relating to such areas, such as adverse economic conditions, adverse events affecting industries located in such areas and natural hazards affecting such areas, than would be the case for a pool of mortgage loans having more diverse property locations. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Prepayments on the underlying residential mortgage loans in an issue of RMBS will be influenced by the prepayment provisions of the related mortgage notes and may also be affected by a variety of economic, geographic and other factors, including the difference between the interest rates on the underlying residential mortgage loans (giving consideration to the cost of refinancing) and prevailing mortgage rates and the availability of refinancing. RMBS are particularly susceptible to prepayment risks as they generally do not contain prepayment penalties and a reduction in interest rates will increase the prepayments on the RMBS, resulting in a reduction in yield to maturity for holders of such securities. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Risks Associated With “B-pieces”</div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in, or, in the event the fund finances its assets through securitization transactions, it may retain, so-called “B-pieces”, representing the most subordinated tranches issued by a CMBS, RMBS or other securitization. Although CMBS and RMBS generally have the benefit of first ranking security (or other exclusive priority rights) over any collateral, the timing and manner of the disposition of such collateral will be controlled by the related servicers, and in certain cases, may be controlled by or subject to consultation rights of holders of more senior classes of securities outstanding or by an operating advisor appointed to protect the interests of such senior classes. There can be no assurance that the proceeds of any sale of collateral or other realization on collateral will be adequate to repay the fund’s investment in full, or at all. In addition, “B-pieces” generally receive principal distributions only after more senior classes of CMBS and RMBS have been paid in full, and receive interest distributions only after the interest distributions then due to more senior classes have been paid. As a result, investors in “B-pieces” will generally bear the effects of losses and shortfalls on the underlying loans and unreimbursed expenses of the CMBS or RMBS issuer before the holders of other classes of CMBS or RMBS with a higher payment priority, with the concomitant potential for a higher risk of loss for such “B-pieces.” In addition, the prioritization of payments of principal to senior classes may cause the repayment of principal of such “B-pieces” to be delayed and/or reduced. Generally, all principal payments </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">received on the mortgage loans will be first allocated to more senior classes of CMBS or RMBS, in each case, until their respective principal balances are reduced to zero, before principal is allocated to the “B-pieces” of CMBS or RMBS. Therefore, “B-pieces” may not receive any principal for a substantial period of time. In addition, generally “B-pieces” will be subject to the allocation of “appraisal reductions” which will restrict their ability to receive any advances of interest that might otherwise be made by the related servicer. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Generally, a shortfall in payment to investors in “B-pieces” of CMBS or RMBS will not result in a default being declared or the restructuring or unwinding of the transaction. To the extent that “B-pieces” represent a small percentage of the CMBS or RMBS issued in relation to the underlying collateral, a small loss in the value of such collateral may result in a substantial loss for the holders of such “B-pieces” and may impact the performance of the fund. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">CLOs </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund’s investments in CLOs and other structured vehicles will be frequently subordinate in right of payment to other securities sold by the applicable CLO or other structured vehicle and will not be readily marketable. Depending upon the default rate on the collateral of the CLO and other structured vehicles, the fund may incur substantial losses on its investments. In addition, when the fund sells securities or assets held by it to a CLO and other structured vehicle, the fund may not receive any residual interest in such CLO and other structured vehicle so that any profits that the fund might have recognized on such securities or assets will no longer inure to the benefit of the fund. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The market value of CLOs and other structured vehicles will generally fluctuate with, among other things, the financial condition of the obligors on the underlying debt obligations or, with respect to synthetic securities, of the obligors on or issuers of the reference obligations, general economic conditions, the condition of certain financial markets, political events, developments or trends in any particular industry and changes in prevailing interest rates. The performance of CLOs and other structured vehicles will be adversely affected by macroeconomic factors, including the following: (i) general economic conditions affecting capital markets and participants therein; (ii) the economic downturns and uncertainties affecting economies and capital markets worldwide; (iii) concerns about financial performance, accounting and other issues relating to various publicly traded companies; and (iv) recent and proposed changes in accounting and reporting standards and bankruptcy legislation. In addition, interest payments on CLOs and other structured vehicles (other than the most senior tranche or tranches of a given issue) are generally subject to deferral. If distributions on the collateral underlying a CLO and other structured vehicle security are insufficient to make payments on the CLOs and other structured vehicles, no other assets will be available for payment of the deficiency and following realization of the underlying assets, the obligations of the CLO or other structured vehicle issuer to pay such deficiency will be extinguished. CLOs and other structured vehicles (particularly the subordinated interests) may provide that, to the extent funds are not available to pay interest, such interest will be deferred or paid “in kind” and added to the outstanding principal balance of the related security. Generally, the failure by the issuer of a CLO or other structured vehicles security to pay interest in cash does not constitute an event of default as long as a more senior class of securities of such issuer is outstanding and the holders of the securities that have failed to pay interest in cash (including the fund) will not have available to them any associated default remedies. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">CMOs </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in mortgage-backed securities called CMOs. CMOs are issued in separate classes with different stated maturities. As the mortgage pool experiences prepayments, the pool pays off investors in classes with shorter maturities first. By investing in CMOs, the fund may manage the prepayment risk of mortgage-backed securities. However, prepayments may cause the actual maturity of a CMO to be substantially shorter than its stated maturity. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Residual Interests </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may make substantial investments in unsecured equity tranches and equivalent junior subordinate securities of structured finance vehicles. Such residuals will represent subordinated interests in the relevant structured finance vehicle only and are not secured by any assets of such structured finance vehicle. Residuals will be subordinated to all other securities of the structured finance vehicle and all other amounts due under the priority of payments set forth in the operative documents of such structured finance vehicle. As such, the greatest risk of loss relating to defaults in the collateral or asset portfolio of the structured finance vehicle is borne by the residuals. The fund, therefore, as holder of the residuals, will rank behind all of the creditors, whether secured or unsecured and known or unknown, of the structured finance vehicle. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The investment in residuals will expose the fund to the highly leveraged investments in the collateral securing the other obligations of, and securities issued by, the structured finance vehicle. Therefore, the market value of these investments would be anticipated to be significantly affected by, among other things, changes in the market value of the assets, changes in the distribution on the assets, defaults and recoveries on the assets, capital gains and losses on the assets, prepayment on assets and the availability, prices and interest rate of assets. Due to the leverage inherent in structured finance vehicle structures, changes in the value of the residuals could be greater than the changes in the values of the underlying collateral, the assets constituting which are subject to, among other things, credit and liquidity risk. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Accordingly, “equity” or subordinated interests and note classes may not be paid in full and may be subject to total loss. Furthermore, the leveraged nature of each subordinated class may magnify the adverse impact on each such class of changes in the value of assets, changes in the distribution on the assets, defaults and recoveries on the assets, capital gains and losses on the assets, prepayment on assets and availability, price and interest rates of assets. Investors must consider with particular care the risks of leverage in residuals because, although the use of leverage creates an opportunity for substantial returns for the fund on the residuals, it increases substantially the likelihood that the fund could lose its entire investment in residuals if the pool of underlying collateral held by the relevant structured finance vehicle is adversely affected by market developments. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Investing in more senior securities issued by structured finance vehicles will involve similar risks, although the exposure of the fund to such risks will be in the context of a more senior position. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Significant Risk Transfer Assets </div></div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Credit Linked Notes Risk </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in credit linked notes, which are securities that are collateralized by one or more designated securities that are referred to as “reference securities.” Through the purchase of a credit linked note, the buyer assumes the risk of default or, in some cases, other declines in credit quality of the reference securities. The buyer also takes on exposure to the issuer of the credit linked note in the full amount of the purchase price of the credit linked note. The issuer of a credit linked note normally will have hedged its risk on the reference securities without acquiring any additional credit exposure. A fund that invests in credit linked notes has the right to receive periodic interest payments from the issuer of the credit linked note at an agreed upon interest rate, and, if there has been no default or, if applicable, other declines in credit quality, a return of principal at the maturity date. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Credit linked notes typically are privately negotiated transactions between two or more parties. The fund bears the risk that if the issuer of the credit linked notes defaults or becomes bankrupt, the fund will lose the principal amount it invested and the periodic interest payments expected to be received for the duration of its investment in the credit linked notes. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The market for credit linked notes may be, or may suddenly become, illiquid. The other parties to these transactions may be the only investors with sufficient understanding of the derivative to be interested in bidding for it. Changes in liquidity may result in significant, rapid and unpredictable changes in the prices for credit linked notes. In certain cases, a market price for a credit linked note may not be available. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Credit Default Swaps Risk </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in credit default swap transactions for investment purposes. The “buyer” in a credit default contract is obligated to pay the “seller” a periodic stream of payments over the term of the contract, provided that no event of default on an underlying reference obligation has occurred. If an event of default occurs, the seller must pay the buyer the full notional value, or “par value,” of the reference obligation through either physical settlement or cash settlement. The fund may be either the buyer or seller in a credit default swap transaction. If the fund is a buyer and no event of default occurs, the fund will have made a series of periodic payments and recover nothing of monetary value. However, if an event of default occurs, the fund (if the buyer) will receive the full notional value of the reference obligation either through a cash payment in exchange for the asset or a cash payment in addition to owning the reference assets. As a seller, the fund receives a fixed rate of income throughout the term of the contract, which typically is between six months and five years, provided that there is no event of default. The fund currently intends to segregate assets on the fund’s records in the form of cash, cash equivalents or liquid securities in an amount equal to the notional value of the credit default swaps of which it is the seller. If such assets are not fully segregated by the fund, the use of credit default swap transactions could then be considered leverage. Credit default swap transactions involve greater risks than if the fund had invested in the reference obligation directly. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Specialty Finance </div></div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Litigation Finance </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may extend a loan to a law firm secured by future fee proceeds from some or all of such firm’s portfolio of litigation matters, or it may advance funds to a party in a lawsuit or their counsel in return for a share of litigation proceeds or other financial reward if the party is successful. Where a loan is secured by litigation proceeds, or where the recipient of financing is not obligated to make any payment unless and until litigation proceeds are actually received by the litigant or their counsel, the fund could suffer a complete loss of the capital invested if the matter fails to be resolved in the recipient’s favor. Other risks the fund may face in connection with these financing activities include, without limitation: (i) losses from terminated or rejected settlements; (ii) predictive evaluations of the strength of cases, claims or settlements may turn out to be inaccurate; (iii) losses as a result of inability to collect, or timing uncertainty relating to collection on, judgments or awards; (iv) lack of control over decisions of lawyers acting pursuant to their professional duties in connection with formulating and implementing litigation strategies or otherwise; (v) expenses and uncertainties involving reliance on outside counsel and experts; (vi) changes in law, regulations or professional standards on such financing activities; (vii) poor case selection and case outcomes; (viii) timing or delays inherent to litigation; (ix) changes in counsel; (x) costs of litigation; (xi) inability of a defendant to pay a judgement or settlement; (xii) general competition and industry-related risks; (xiii) conflicts of interest; and (xiv) issues associated with the treatment of these types of investments for tax purposes. </div> <div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks Related to Transportation Investments </div></div><div style="margin-top: 6pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">The Fund’s Aviation Investment Strategy Depends on the Continual Leasing and Remarketing of Aircrafts and Aircraft Engines </div></div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund’s ability to lease and remarket its aircrafts or aircraft engines will depend on general market and competitive conditions at the time the initial leases are entered into and expire. If the fund is not able to lease or remarket an aircraft or aircraft engine or to do so on favorable terms, it may be required to attempt to sell the aircraft or aircraft engine to provide funds for debt service obligations or other expenses. The fund’s ability to lease, remarket or sell the aircraft or aircraft engine on favorable terms or without significant off-lease time and costs could be negatively affected by depressed conditions in the commercial aviation industry, airline bankruptcies, the effects of terrorism, war, natural disasters and/or epidemic diseases on airline passenger traffic trends, declines in the values of aircrafts and aircraft engines, and various other general market and competitive conditions and factors which are outside of the fund’s control. If the fund is unable to lease and remarket its aircraft or aircraft engine on favorable terms, the fund may incur substantial losses. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">The Fund Could Incur Significant Costs Resulting from Aviation Lease Defaults </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">If the fund is required to repossess an aircraft or aircraft engine after a lessee default, it may incur significant costs. Those costs likely would include legal and other expenses associated with court or other governmental proceedings, particularly if the lessee is contesting the proceedings or is in bankruptcy. In addition, during any such proceedings the relevant aircraft or aircraft engine would likely not be generating revenue. The fund could also incur substantial maintenance, refurbishment or repair costs if a defaulting lessee fails to pay such costs and where such maintenance, refurbishment or repairs are necessary to put the aircraft or aircraft engine in suitable condition for remarketing or sale. The fund may also incur storage costs associated with any aircraft or aircraft engine that the fund repossesses and is unable to place immediately with another lessee. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">It may also be necessary to pay off liens, taxes and other governmental charges on the aircraft or aircraft engine to obtain clear possession and to remarket the aircraft or aircraft engine effectively, including, in some cases, liens that the lessor might have incurred in connection with the operation of its other aircrafts or aircraft engines. The fund could also incur other costs in connection with the physical possession of the aircraft or aircraft engine. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may suffer other negative consequences as a result of a lessee default, the related termination of the lease and the repossession of the related aircraft or aircraft engine. It is likely that its rights upon a lessee default will vary significantly depending upon the jurisdiction and the applicable law, including the need to obtain a court order for repossession of the aircraft or aircraft engine and/or consents for deregistration or export of the aircraft or aircraft engine. It is expected that when a defaulting lessee is in bankruptcy, protective administration, insolvency or similar proceedings, additional limitations may apply. Certain jurisdictions give rights to the trustee in bankruptcy or a similar officer to assume or reject the lease or to assign it to a third party, or entitle the lessee or another third party to retain possession of the aircraft or aircraft engine without paying lease rentals or performing all or some of the obligations under the relevant lease. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">If the fund repossesses an aircraft or aircraft engine, the fund may not necessarily be able to export or deregister and profitably redeploy the aircraft or aircraft engine. For instance, where a lessee or other operator flies only domestic routes in the jurisdiction in which the aircraft or aircraft engine is registered, repossession may be more difficult, especially if the jurisdiction permits the lessee or the other operator to resist deregistration. The fund may also incur significant costs in retrieving or recreating records required for registration of the aircraft or aircraft engine, and in obtaining the Certificate of Airworthiness for an aircraft or aircraft engine. If, upon a lessee default, the fund incurs significant costs in connection with repossessing its aircraft or aircraft engine, is delayed in repossessing its aircraft or aircraft engine or is unable to obtain possession of its aircraft or aircraft engine as a result of lessee defaults, the fund may incur substantial losses. </div><div></div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">The Fund May Experience Abnormally High Maintenance or Obsolescence Issues with Its Aircraft or Aircraft Engine </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Aircrafts and aircraft engines are long-lived assets, requiring long lead times to develop and manufacture, with particular types and models becoming obsolete or less in demand over time when newer, more advanced aircrafts or aircraft engines are manufactured. The fund’s aircrafts and aircraft engines have exposure to obsolescence, particularly if unanticipated events occur which shorten the life cycle of such aircraft or aircraft engine types. These events include but are not limited to government regulation, technological innovations or changes in airline customers’ preferences. These events may shorten the life cycle for aircraft or aircraft engine types in the fund’s fleet and, accordingly, may negatively impact lease rates or result in losses. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Further, variable expenses like fuel, crew or aging aircraft or aircraft engine corrosion control or modification programs and airworthiness directives could make the operation of older aircraft more costly to the fund’s lessees and may result in increased lessee defaults. The fund may also incur some of these increased maintenance expenses and regulatory costs upon acquisition or remarketing of its aircraft or aircraft engine. Any of these expenses or costs may cause the fund to incur substantial losses. </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">The Value of the Aircrafts or Aircraft Engines the Fund Will Acquire and the Market Rates for Leases Could Decline </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Aircraft or aircraft engine values and market rates for leases have from time to time experienced sharp decreases due to a number of factors including, but not limited to, decreases in passenger demand, increases in fuel costs, government regulation and increases in interest rates. Operating leases place the risk of realization of residual values on aircraft or aircraft engine lessors because only a portion of the equipment’s value is covered by contractual cash flows at lease inception. In addition to factors linked to the commercial aviation industry generally, many other factors may affect the value of the aircraft or aircraft engine that the fund acquires and market rates for leases, including: </div><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">the particular maintenance, operating history and documentary records of the aircraft or aircraft engine; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">the number of operators using that type of aircraft or aircraft engine; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">aircraft or aircraft engine age; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">the regulatory authority under which the aircraft or aircraft engine is operated; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">any renegotiation of an existing lease on less favorable terms; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">the negotiability of clear title free from mechanics’ liens and encumbrances; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">any regulatory and legal requirements that must be satisfied before the aircraft or aircraft engine can be purchased, sold or re-leased;</div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">compatibility of aircraft or aircraft engine configurations or specifications with other aircrafts or aircraft engines owned by operators of that type; </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">comparative value based on newly manufactured competitive aircrafts or aircraft engines; and </div></div></td></tr></table><div style="font-size:6pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;border:0;width:100%"> <tr style="page-break-inside:avoid"> <td style="width:4%;vertical-align:top;text-align:left"><div style="-sec-ix-redline:true;display:inline;">•</div></td> <td style="vertical-align:top;text-align:left"><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: left; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">the availability of spare parts. </div></div></td></tr></table><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Any decrease in the value of aircrafts or aircraft engines that the fund acquires and market rates for leases, which may result from the above factors or other unanticipated factors, could cause the fund to incur substantial losses. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Liability Risk as Lessor </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Section 44112 of Title 49 of the United States Code (“<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Section 44112</div>”) provides that lessors of aircrafts or aircraft engines generally will not be liable for any personal injury or death, or damage to or loss of property (collectively, for purposes of this section, “<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Losses</div>”); <div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">provided</div></div> that such lessor is not in actual possession or control of the equipment at the time of such Loss. Under common law, the owner of an aircraft or aircraft engine may be held liable for injuries or damage to passengers or property, and such damage awards can be substantial. Because certain case law interpreting Section 44112 provides that lessors of aircrafts or aircraft engines may be liable for Losses, there can be no assurance that the provisions of Section 44112 would fully protect the lessor and the fund from all liabilities in connection with any Losses that may be caused by any aircraft or aircraft engine it owns. Therefore, each lessee typically will be required to indemnify the fund for, or insure the fund against, such claims by third parties. Nonetheless, in the event that Section 44112 does not apply in a particular action, there is the possibility that the lessee might not have the financial resources or insurance to fulfill its indemnity obligations. It should be noted, however, that this description is limited to U.S. law, and to the extent that the law in foreign jurisdictions is applicable (<div style="font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">e.g.</div></div>, in a jurisdiction where an accident occurs), different rules may apply. For example, certain foreign jurisdictions may impose strict liability upon an owner of an aircraft or an aircraft engine. Such liability may apply with respect to claims of passengers, employees or third parties for death, injury and/or damages to public or private property (including consequences of terrorist attacks) or environmental damages. Operators and airlines may be unable or unwilling to indemnify the fund, resulting in losses to the fund. </div> <div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;">Risks of Aircraft or Aircraft Engine Lease Receivables, Enhanced Equipment Trust Certificates, Aircraft Engine Mortgages and other Aviation-Related Asset-Backed Securities that Seek to Monetize Leases or Mortgages </div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The fund may invest in airline/aircraft or aircraft engine assets, which may include aircraft or aircraft engine lease receivables (“<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">ALRs</div>”). ALRs are asset-backed securities that are generally structured as pass-through trusts. The aircraft or aircraft engine is sold to the trust which leases it to the airline companies. Unlike receivables backed by loans or interest rates, however, ALRs may entail a higher risk because of the nature of the underlying assets, which are expensive to maintain and operate and are difficult to sell. Moreover, aircrafts and aircraft engines are subject to many laws in different jurisdictions, and the repossession of the aircraft or aircraft engine from lessees may be difficult and costly. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition, the fund may invest in enhanced equipment trust certificates (“<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">EETCs</div>”). Although any entity may issue EETCs, to date, U.S. airlines are the primary issuers. An airline EETC is an obligation secured by the aircrafts or aircraft engines as collateral. EETCs may be less liquid than other investments. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Furthermore, the fund may invest in aviation-related asset-backed securities that seek to monetize leases or mortgages. Aircraft and aircraft engine mortgage monetization notes and aircraft and aircraft engine lease monetization notes are asset-backed securities that represent interests in pools of aircraft and aircraft engine mortgages or operating leases, respectively, on various aircraft and aircraft engine types of airlines located throughout the world. Holders of such securities bear various risks, including, among other things, lease rates and residual values, increased fuel costs, credit, technological, legal, regulatory, terrorism and geopolitical risks. Uncertainty and instability in certain countries in which airlines are located could have a material adverse effect on such securities as well. Additionally, with respect to lease monetization notes, portfolio management and the remarketing and re-leasing of aircrafts and aircraft engines upon lease expiration or default is typically the responsibility of a designated servicer. No assurance can be given that the aircraft or aircraft engine will be re-leased after the expiration of the initial term, or if re-leased, on the same terms or on more favorable terms. Further, the value of aircraft or aircraft engine mortgage monetization notes and aircraft and aircraft engine lease monetization notes are affected by changes in the market’s perception of the asset backing the security and the creditworthiness of the servicing agent for the collateral pool, the originator of the financial obligations or the financial institution providing any credit enhancement, as well as by the expiration or removal of any credit enhancement. Finally, aircrafts and aircraft engines are subject to many laws in different jurisdictions, and the repossession of aircrafts and aircraft engines from lessees or borrowers may be difficult and costly. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Investments by the fund in single aircraft or aircraft engine mortgages on the secondary market will be subject to similar risks as investments in aircraft and aircraft engine mortgage monetization notes. However, such investments may not have the benefit of diversification across a wider range of aircraft and aircraft engine assets and airlines or credit enhancement as may be the case with aircraft and aircraft engine mortgage monetization notes. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Airline Regulation </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The airline industry is subject to regulation in the United States by, among others, the U.S. Department of Transportation and the U.S. Federal Aviation Administration (“FAA”) and outside the U.S. by additional agencies. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Failure to Obtain Certain Required Licenses and Approvals </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Airlines are subject to extensive regulation under the laws of the jurisdictions in which they are registered and in which they operate. As a result, the fund expects that certain aspects of its leases will require licenses, consents or approvals, including consents from governmental or regulatory authorities for certain payments under its leases and for the import, export or deregistration of the aircraft or aircraft engine. Subsequent changes in applicable law or administrative practice may increase such requirements and governmental consent, once given, could be withdrawn. Furthermore, consents needed in connection with the future remarketing or sale of an aircraft or aircraft engine may not be forthcoming. Any of these events could negatively affect the fund’s ability to remarket or sell aircrafts or aircraft engines which may cause the fund to incur substantial losses. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Effects of the Aviation Security Act </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The U.S. Aviation and Transportation Security Act (the “<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Aviation Security Act</div>”), among other things, subjects substantially all aspects of U.S. civil aviation security to federal oversight and mandates enhanced security measures, including: (i) improved flight deck security; (ii) deployment of federal air marshals on flights; (iii) improved security of airport perimeter access; (iv) airline crew security training; (v) augmented security screening of passengers, baggage, cargo, mail, employees and vendors; (vi) improved training and qualifications of security screening personnel; (vii) additional provision of passenger data to U.S. Customs and Border Protection; and (viii) more detailed background checks on passengers and airline and airport personnel. The implementation of the requirement that all checked baggage be screened by explosives detection systems has resulted, and may continue to result, in significant equipment acquisitions by the government and changes to baggage processing facilities and procedures. The changes mandated by the Aviation Security Act have increased costs for airlines providing service in the U.S., and have resulted in delays and disruptions to air travel, which have adversely affected, and may to continue to adversely affect, the aviation industry in general. It is expected that the Aviation Security Act will continue to impose additional costs on the airlines and may adversely impact the performance of the fund. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Effect of Airworthiness Directives and Operating Restrictions </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The maintenance and operation of aircraft and aircraft engines are strictly regulated by the FAA in the U.S. and similar governmental authorities in foreign jurisdictions. These rules and regulations govern such matters as certification, registration, inspection, operation and maintenance procedures, personnel certification and record keeping. Periodically, the FAA issues airworthiness directives requiring changes to aircraft or aircraft engine maintenance programs and procedures. Such airworthiness directives are issued from time to time with respect to aircraft and aircraft engines to ensure that they remain airworthy and safe. Future regulatory changes may also increase the cost of operating and/or maintaining aircraft and aircraft engines, which may adversely affect their residual value and the profitability of the fund, as can the failure of a lessee to comply with the maintenance provisions as set forth in its lease. The cost of compliance with such requirements may be significant. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Environmental Regulations May Negatively Affect the Airline Industry </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Governmental regulations regarding aircraft and aircraft engine noise and emissions levels apply based on where the relevant aircraft or aircraft engine is registered and operated. For example, jurisdictions throughout the world have adopted noise regulations which require all aircrafts and aircraft engines to comply with noise level standards. In addition to the current requirements, the United States and the International Civil Aviation Organization (the “<div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">ICAO</div>”), have specific standards for noise levels which applies to engines manufactured or certified on or after January 1, 2006. Currently, U.S. regulations would not require any phase-out of aircrafts or aircraft engines that qualified with the older standards applicable to engines manufactured or certified prior to January 1, 2006, but the European Union has established a framework for the imposition of operating limitations on aircrafts and aircraft engines that do not comply with the new standards and has incorporated aviation-related emissions into the European Union’s Emission Trading Scheme beginning in 2013. These regulations could limit the economic life of the aircraft and aircraft engines, reduce their value, limit the fund’s ability to lease or sell the non-compliant aircraft and aircraft engines or, if engine modifications are permitted, require the fund to make significant additional investments in the aircraft and aircraft engines to make them compliant. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition to more stringent noise restrictions, the United States and other jurisdictions are beginning to impose more stringent limits on nitrogen oxide, carbon monoxide and carbon dioxide emissions from engines, consistent with current ICAO standards. These limits generally apply only to engines manufactured after 1999. Because aircraft engines are replaced from time to time in the normal course, it is likely that the number of such engines would increase over time. The ICAO is developing a global scheme based on market-based measures to limit CO2 emissions from international aviation to be implementing by 2020. Concerns over global warming could result in more stringent limitations on the operation of aircraft powered by older, noncompliant engines, as well as newer engines. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">European countries generally have relatively strict environmental regulations that can restrict operational flexibility and decrease aircraft and aircraft engine productivity. The European Union’s Emissions Trading Scheme requires that all of the emissions associated with international flights that land or take off within the European Union are subject to the trading program, even those emissions that are emitted outside of the European Union. The United Kingdom doubled its air passenger duties, in recognition of the environmental costs of air travel and similar measures may be implemented in other jurisdictions as a result of environmental concerns. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">These regulations could limit the economic life of the aircraft and aircraft engines, reduce their value, limit the fund’s ability to lease or sell the compliance aircraft and aircraft engines or, if engine modifications are permitted, require the fund to make significant additional investments in the aircraft and aircraft engines to make them compliant, which could cause the fund to incur substantial losses. Further, compliance with current or future regulations, taxes or duties imposed to deal with environmental concerns could cause lessees to incur higher costs and to generate lower net revenues, resulting in a negative impact on their financial conditions. Consequently, such compliance may affect lessees’ ability to make rental and other lease payments and reduce the value the fund receives for the aircraft or aircraft engine upon any disposition, which could cause the fund to incur substantial losses. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Cyclical Nature of the Maritime Sector </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The maritime sector is cyclical, with volatility in charter rates, profitability and vessel values. Future demand for vessels will be dependent upon continued economic growth in numerous international economies, and will be influenced by seasonal and regional changes in demand and changes in the capacity of the world’s shipping fleets. A decline in demand for commodities or other products transported in ships or an increase in the supply of such vessels could materially adversely affect the fund’s investments. Historically, demand for vessels has generally been influenced by factors including global and regional economic conditions, developments in international trade, changes in seaborne and other transportation patterns, such as port congestion and canal closures, currency exchange rates, armed conflict and terrorist activities including piracy, political developments, and sanctions, embargoes and strikes. Additionally, supply of vessels has generally been influenced by factors including the number of expected new building vessel deliveries, the scrapping rate of older vessels, access to traditional debt to finance the construction of new vessels, changes in environmental or other regulations that may limit the useful life of certain vessels. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include new building prices, secondhand vessel values in relation to scrap prices, costs of fuel supplies and other operating costs, costs associated with classification society surveys, normal maintenance and insurance coverage, the efficiency and age profile of the existing fleet in the market and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand for shipping capacity are outside of the fund’s control, and the Subadvisor may not be able to correctly assess the nature, timing and degree of changes in industry conditions. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Maritime Risks </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The operation of an ocean-going vessel carries inherent risks. These risks include, among others, the possibility of marine disaster, piracy, environmental accidents, grounding, fire, explosions and collisions, cargo and property losses or damage, business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions and work stoppages or other labor problems with crew members serving on vessels including crew strikes and/or boycotts. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Such occurrences could result in death or injury to persons, loss of property or environmental damage, delays in the delivery of cargo, loss of revenues from or termination of charter contracts, governmental fines, penalties or restrictions on conducting business, higher insurance rates and damage to counterparties’ reputation and customer relationships generally. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">International Operations Risks </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The maritime sector is an inherently risky business involving global operations. A counterparty’s vessels will be at risk of damage or loss because of events such as mechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. All these hazards can result in death or injury to persons, increased costs, loss of revenues, loss or damage to property (including cargo), environmental damage, higher insurance rates, damage to the counterparty’s customer relationships, harm to its reputation as a safe and reliable operator and delay or rerouting. In addition, changing economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These sorts of events could interfere with shipping routes and result in market disruptions which could have a material adverse effect on the fund’s financial condition, cash flows and ability to pay distributions. </div><div style="margin-top: 18pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;;"><div style="font-weight:bold;display:inline;"><div style="font-style: italic; letter-spacing: 0px; top: 0px;display:inline;">Maritime Claims </div></div></div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Maritime claimants may seek to arrest a vessel owned or held by a counterparty and used as security for an investment by the fund. Crew members, suppliers of goods and services to a vessel and other parties may be entitled to maritime liens against that vessel for unsatisfied debts, claims or damages, which liens may be senior to the fund’s investment in the capital structure of a counterparty. In many jurisdictions, a maritime lien holder may enforce its lien by arresting or attaching a vessel and commencing foreclosure proceedings. The arrest or attachment of one or more of the vessels of a counterparty could result in a significant loss of earnings for the related off-hire period. In addition, in some jurisdictions, under the “sister ship” theory of liability, a claimant may arrest both the vessel that is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. In countries with “sister ship” liability laws, claims might be asserted against a counterparty or any of its vessels for liabilities of other vessels that it owns. The arrest or attachment of one or more vessels could have an adverse impact on the performance of the fund. </div> <div id="pro820528_29" style="margin-top: 24pt; margin-bottom: 0pt; font-size: 10pt; font-family: &quot;Times New Roman&quot;; text-align: center;"><div style="font-weight:bold;display:inline;">AUTHORIZED SHARES </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">As of December 31, 2024, there are three classes of Shares authorized as follows: </div></div><div style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;width:84%;border:0;margin:0 auto"> <tr> <td style="width:52%"></td> <td style="vertical-align:bottom;width:9%"></td> <td></td> <td style="vertical-align:bottom;width:9%"></td> <td></td> <td style="vertical-align:bottom;width:9%"></td> <td></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td style="vertical-align: bottom; white-space: nowrap; padding-bottom: 0.5pt;"><div style="margin-top: 0pt; margin-bottom: 0pt; border-bottom: 1pt solid rgb(0, 0, 0); display: table-cell; font-size: 8pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">(1) Title of Class</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">(2) Amount<br/>Authorized</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">(3) Amount of Shares</div></div><br/><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Held by the Fund for its</div></div><br/><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Account</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Amount of Shares</div></div><br/><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Outstanding Exclusive</div></div><br/><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">of Amount Shown</div></div><br/><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Under (3)</div></div></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Class I</div></div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">Unlimited</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">0</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">3,928,739.98</div></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Class A</div></div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">Unlimited</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">0</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">0</div></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Class U</div></div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">Unlimited</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">0</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">0</div></td></tr></table><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"><div style="text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">General </div></div></div> </div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Shares are issued at the most recently calculated net asset value per Share prior to the date of issuance, and may be subject to an applicable sales load. The net asset value of the fund will equal the value of the assets of the fund, less all of its liabilities, including accrued fees and expenses. The Class I Shares’ net asset value plus the Class A Shares’ net asset value plus the Class U Shares’ net asset value equals the total net asset value of the fund. The Class I Share net asset value, the Class A Share net asset value and the Class U net asset value will be calculated separately based on the fees and expenses applicable to each class. Because of differing class fees and expenses, the per Share net asset value of the classes will vary over time. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Voting Ri<div style="letter-spacing: 0px; top: 0px;display:inline;">g</div>hts.</div></div> Each Sh<div style="letter-spacing: 0px; top: 0px;display:inline;">ar</div>eholder of record is entitled to one vote for each Share held on the record date for the Shareholder action or meeting. The fund is not required, and does not intend, to hold annual meetings of Shareholders. Approval of Shareholders will be sought, however, for certain changes in the operation of the fund and for the election of Trustees of the fund under certain circumstances. </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Liquidat<div style="letter-spacing: 0px; top: 0px;display:inline;">ion</div> R<div style="letter-spacing: 0px; top: 0px;display:inline;">i</div>ghts.</div></div> Under the Declaration of Trust, the Trustees have the power to terminate and liquidate the fund without Shareholder approval. While the Trustees have no present intention of exercising this power, they may do so if the fund fails to reach a viable size within a reasonable amount of time or for such other reasons as may be determined by the Board. In addition, Shareholders have no liquidation preference or rights to liquidation. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Liability for F<div style="letter-spacing: 0px; top: 0px;display:inline;">ur</div>ther A<div style="letter-spacing: 0px; top: 0px;display:inline;">ss</div>essments.</div></div> The Shares are not liable to further calls or to assessment by the fund. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Preemptive R<div style="letter-spacing: 0px; top: 0px;display:inline;">igh</div>ts and Conv<div style="letter-spacing: 0px; top: 0px;display:inline;">ersi</div>on Rights.</div></div> There are no pre-emptive rights associated with the Shares. </div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Control Persons. </div></div>As of February 1, 2025, John Hancock Life Insurance Company (U.S.A.) and its partners, located at 200 Berkeley Street, Boston, Massachusetts, 02116, owned beneficially 100% of the outstanding Class I Shares of the fund. For so long as such entity has a greater than 25% interest in the outstanding voting securities of the fund, it may be deemed to be a “control person” of the fund for purposes of the 1940 Act and therefore could determine the outcome of a Shareholder meeting with respect to a proposal directly affecting the fund or that share class, as applicable. </div></div><div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">As of February 1, 2025, the officers and Trustees of the fund as a group owned beneficially less than 1% of the outstanding shares of the fund. </div></div> <div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="-sec-ix-redline:true;display:inline;">As of December 31, 2024, there are three classes of Shares authorized as follows: </div></div><div style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;width:84%;border:0;margin:0 auto"> <tr> <td style="width:52%"></td> <td style="vertical-align:bottom;width:9%"></td> <td></td> <td style="vertical-align:bottom;width:9%"></td> <td></td> <td style="vertical-align:bottom;width:9%"></td> <td></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td style="vertical-align: bottom; white-space: nowrap; padding-bottom: 0.5pt;"><div style="margin-top: 0pt; margin-bottom: 0pt; border-bottom: 1pt solid rgb(0, 0, 0); display: table-cell; font-size: 8pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">(1) Title of Class</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">(2) Amount<br/>Authorized</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">(3) Amount of Shares</div></div><br/><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Held by the Fund for its</div></div><br/><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Account</div></div></td> <td style="vertical-align: bottom; padding-bottom: 0.5pt;">  </td> <td style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Amount of Shares</div></div><br/><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Outstanding Exclusive</div></div><br/><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">of Amount Shown</div></div><br/><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Under (3)</div></div></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Class I</div></div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">Unlimited</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">0</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">3,928,739.98</div></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Class A</div></div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">Unlimited</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">0</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">0</div></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style="margin-top: 0pt; margin-bottom: 0pt; margin-left: 1em; text-indent: -1em; font-size: 10pt; font-family: &quot;Times New Roman&quot;; line-height: normal;"><div style="-sec-ix-redline:true;display:inline;">Class U</div></div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">Unlimited</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">0</div></td> <td style="vertical-align:bottom">  </td> <td style="vertical-align:bottom;white-space:nowrap;text-align:center"><div style="-sec-ix-redline:true;display:inline;">0</div></td></tr></table> Class I 0 3928739.98 Class A 0 0 Class U 0 0 <div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Voting Ri<div style="letter-spacing: 0px; top: 0px;display:inline;">g</div>hts.</div></div> Each Sh<div style="letter-spacing: 0px; top: 0px;display:inline;">ar</div>eholder of record is entitled to one vote for each Share held on the record date for the Shareholder action or meeting. The fund is not required, and does not intend, to hold annual meetings of Shareholders. Approval of Shareholders will be sought, however, for certain changes in the operation of the fund and for the election of Trustees of the fund under certain circumstances. </div> <div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Liquidat<div style="letter-spacing: 0px; top: 0px;display:inline;">ion</div> R<div style="letter-spacing: 0px; top: 0px;display:inline;">i</div>ghts.</div></div> Under the Declaration of Trust, the Trustees have the power to terminate and liquidate the fund without Shareholder approval. While the Trustees have no present intention of exercising this power, they may do so if the fund fails to reach a viable size within a reasonable amount of time or for such other reasons as may be determined by the Board. In addition, Shareholders have no liquidation preference or rights to liquidation. </div> <div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Liability for F<div style="letter-spacing: 0px; top: 0px;display:inline;">ur</div>ther A<div style="letter-spacing: 0px; top: 0px;display:inline;">ss</div>essments.</div></div> The Shares are not liable to further calls or to assessment by the fund. </div> <div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Preemptive R<div style="letter-spacing: 0px; top: 0px;display:inline;">igh</div>ts and Conv<div style="letter-spacing: 0px; top: 0px;display:inline;">ersi</div>on Rights.</div></div> There are no pre-emptive rights associated with the Shares. </div> Class A Share investments may be subject to a maximum sales charge of 2.50%. Such sales load will not form part of an investor’s investment in the fund. Any sales load will reduce the amount of an investor’s initial or subsequent investment in the fund, and the impact on a particular investor’s investment returns would not be reflected in the returns of the fund. The sales load may be waived in certain circumstances as described in this Prospectus or as otherwise approved by the Advisor. Distribution and Service (i.e., Rule 12b-1) fees have been restated to reflect the Class Plan (as defined below) fee schedule effective October 9, 2024. “Other Expenses” are based on estimated amounts for the current fiscal year. Other Expenses include the Fund’s operating expenses, including professional fees, transfer agency fees, administration fees, custody fees, offering costs and other operating expenses. The Advisor contractually agrees to reduce its Management Fee for the fund or, if necessary, make payment to the fund, in an amount equal to the amount by which the following expenses of the fund, incurred in the ordinary course of the fund’s business, exceed 0.51% percent of average monthly net assets (on an annualized basis) of the fund: (a) administrative fees; (b) custody and accounting fees; (c) audit fees; (d) legal fees; (e) independent trustee fees; (f) valuation fees; (g) blue sky fees; (h) insurance premiums; (i) printing costs; (j) registration and filing expenses; (k) organization and offering expenses; (l) transfer agent fees and service fees; and (m) other miscellaneous ordinary expenses, but excluding: (1) advisory fees; (2) interest expense; (3) 12b-1 fees; (4) any cashiering or other investment servicing fees; (5) litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the business of the fund; (6) taxes; (7) short dividends; (8) acquired fund fees and expenses, which are based on indirect net expenses associated with the fund’s investments in underlying investment companies; (9) class specific expenses; (10) portfolio brokerage commissions; (11) expenses related to, or incurred by, special purpose vehicles or other subsidiaries of the fund held directly or indirectly by the fund; (12) expenses, including legal expenses, related to investments of the fund; and (13) expenses, including legal expenses, related to co-investment transactions involving the fund. This agreement expires on February 28, 2026, unless renewed by mutual agreement of the Advisor and the fund based upon a determination that this is appropriate under the circumstances at that time. The Advisor also contractually agrees to waive a portion of its Management Fee and/or reimburse expenses for the fund and certain other John Hancock funds according to an asset level breakpoint schedule that is based on the aggregate net assets of all the funds participating in the waiver or reimbursement. This waiver is allocated proportionally among the participating funds. This agreement expires on July 31, 2026, unless renewed by mutual agreement of the fund and the Advisor based upon a determination that this is appropriate under the circumstances at that time. The example assumes that the total annual fund operating expenses (excluding any sales loads on reinvested dividends, fee waivers and/or expense reimbursements) set forth in the Annual Expenses table above are as shown and remain the same for each year, and that all dividends and distributions are reinvested at net asset value. The expenses used to calculate the fund’s examples do not include fee waivers or expense reimbursements. Actual expenses may be greater or less than those assumed. Moreover, the fund’s actual rate of return may be greater or less than the hypothetical 5% return shown in the example.