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John Hancock Marathon Asset-Based Lending Fund
200 Berkeley Street
Boston
02116
617
663-3000
Christopher Sechler, Esq.
200 Berkeley Street
Boston
02116
As soon as practicable after the effective date of this Registration Statement.
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<div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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. In </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">accordance with SEC requirements, the table below shows the fund’s expenses as a percentage of its average net assets as of October 31, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">2024</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">, and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">not as a percentage of total assets. By showing expenses as a percentage of average net assets, expenses are not expressed as a percentage of all of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the assets in which the fund invests.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 1pt; line-height: 1pt; letter-spacing: 0px; top: 0px;display:inline;"></div>
<table cellpadding="0" cellspacing="0" style="text-align:start; border-bottom:0.5pt solid #D9D9D9;empty-cells:show;width:558pt">
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #000000;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Shareholder Transaction Expenses</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #000000;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:47.68pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class I</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #000000;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:65.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class S</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #000000;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:53.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class D</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Sales Load paid by you (as a percentage of offering price) </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 5pt; margin-left: 0pt; position: relative; top: -3.25pt; letter-spacing: 0px;display:inline;">(1)</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">None</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Up to 3.50%</div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Up to 1.50%</div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Early Repurchase Fee </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 5pt; margin-left: 0pt; position: relative; top: -3.25pt; letter-spacing: 0px;display:inline;">(2)</div></div> <div style="clear:right"> </div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">2.00%</div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">2.00%</div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">2.00%</div></div></div></td></tr></table><div><div style="clear:both;margin-top:0.5pt;position:relative;width:100%"><div style="float:left;line-height:9.5pt;text-align:left;width:6.95pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">1.</div></div></div><div style="float:left;line-height:9.5pt;margin-left:7.05pt;text-align:left;width:539.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">The sales load will neither constitute an investment made by the investor in the fund nor form part of the assets of the fund, and the impact on a particular investor’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">otherwise approved by the Advisor.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; line-height: 9.5pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:0.0pt;position:relative;width:100%"><div style="float:left;line-height:9.5pt;text-align:left;width:6.95pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">2.</div></div></div><div style="float:left;line-height:9.5pt;margin-left:7.05pt;text-align:left;width:539.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">If the interval between the date of purchase of Shares and the date in which Shares are repurchased is less than one year, then such repurchase will be subject to a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">2.00% early withdrawal fee payable to the fund. In determining whether the repurchase of Shares is subject to an early withdrawal fee, the fund will repurchase those </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Shares held longest first.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; line-height: 9.5pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div>
as a percentage of offering price
0
0.035
0.015
0.02
0.02
0.02
<div style="margin-top: 0px; margin-bottom: 0px;"> </div>
<table style="text-align:start; border-bottom:0.5pt solid #D9D9D9;empty-cells:show;width:558pt">
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Annual Expenses</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;display:inline;"> (as a percentage of net assets attributable to Shares)</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:0.5pt;text-align:left"></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:0.5pt;text-align:left"></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:0.5pt;text-align:left"></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Management Fee </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 5pt; margin-left: 0pt; position: relative; top: -3.25pt; letter-spacing: 0px;display:inline;">(3)</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">1.53</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">1.53</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">1.53</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Incentive Fee </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 5pt; margin-left: 0pt; position: relative; top: -3.25pt; letter-spacing: 0px;display:inline;">(4)</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">0.71</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">0.71</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">0.71</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Distribution and Service Fee </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 5pt; margin-left: 0pt; position: relative; top: -3.25pt; letter-spacing: 0px;display:inline;">(5)</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">0.00</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">0.85</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">0.25</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 8pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Interest Expense on borrowed funds</div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">0.68</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">0.68</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">0.68</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 8pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Other Expenses</div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">2.23</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">2.23</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">2.23</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Total Annual Fund Operating Expenses</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">5.15</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">6.00</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">5.40</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Fee Waiver and/or Expense Reimbursements </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 5pt; margin-left: 0pt; position: relative; top: -3.25pt; letter-spacing: 0px;display:inline;">(6)</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">(1.03)</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">(1.03)</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">(1.03)</div></div></div></div></td></tr>
<tr style="height:11.5pt">
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:392.07pt"><div style="line-height:10pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Reimbursements</div></div></div></div></td>
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:47.68pt"><div style="line-height:10pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">4.12</div></div></div></div></td>
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:65.12pt"><div style="line-height:10pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">4.97</div></div></div></div></td>
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:53.12pt"><div style="line-height:10pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">4.37</div></div></div></div></td></tr></table><div><div style="clear:both;margin-top:0.0pt;position:relative;width:100%"><div style="float:left;line-height:9.5pt;text-align:left;width:6.95pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">3.</div></div></div><div style="float:left;line-height:9.5pt;margin-left:7.05pt;text-align:left;width:539.00pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">The Advisor shall be paid at the end of each calendar month a fee at the annual rate of 1.350% of the average monthly value of the Managed Assets of the fund (the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">“Management Fee”). The term “Managed Assets” means the total assets of the fund (including any assets attributable to any preferred shares that may be issued or to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">indebtedness), minus the fund’s liabilities incurred in the normal course of operations other than liabilities relating to indebtedness.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; line-height: 9.5pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:0.0pt;position:relative;width:100%"><div style="float:left;line-height:9.5pt;text-align:left;width:6.95pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">4.</div></div></div><div style="float:left;line-height:9.5pt;margin-left:7.05pt;text-align:left;width:539.00pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">The Advisor is also paid an Incentive Fee if certain income-based targets are met. The Incentive Fee is described below under “Management of the Fund - Advisory </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Agreement”. The fund anticipates that it may have net investment income that could result in the payment of an Incentive Fee to the Advisor during certain periods. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">However, the Incentive Fee is based on the fund meeting certain net investment income targets and will not be paid unless the fund achieves those targets. The fund </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">expects the Incentive Fee the fund pays to increase to the extent the fund earns greater net investment income through its investments. The amount presented in this </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">table reflects the Incentive Fee incurred as a percent of average net assets for the fiscal period ended October 31, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">2024</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">. See “Management of the Fund - Advisory </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Agreement” for a full explanation of how the Incentive Fee is calculated. It is anticipated that an Incentive Fee may be earned during the current fiscal year.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; line-height: 9.5pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:0.0pt;position:relative;width:100%"><div style="float:left;line-height:9.5pt;text-align:left;width:6.95pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">5.</div></div></div><div style="float:left;line-height:9.5pt;margin-left:7.05pt;text-align:left;width:539.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">In connection with Class S Shares of the fund, the fund pays a Distribution and Service Fee equal to 0.85% per annum of the aggregate value of the fund's Class S </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Shares outstanding and in connection with Class D Shares of the fund, the fund pays a Distribution and Service Fee equal to 0.25% per annum of the aggregate value </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">of the fund's Class D shares, determined as of the last calendar day of each month (prior to any repurchases of Shares and prior to the Management Fee being </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">calculated). The Distribution and Service Fee is payable monthly. The Distributor may pay all or a portion of the Distribution and Service Fee to the broker-dealers that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">sell Shares of the fund or provide investor services and/or administrative assistance to Shareholders. See “Distribution and Service Fee” below.</div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div style="-sec-ix-redline:true"> <div> <div style="clear:both;margin-top:0.0pt;position:relative;width:100%"> <div style="float:left;line-height:9.5pt;text-align:left;width:6.95pt"><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;font-weight:bold;display:inline;">6</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;font-weight:bold;display:inline;">.</div></div> <div style="float:left;line-height:9.5pt;margin-left:7.05pt;text-align:left;width:539.00pt"><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;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 </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">following expenses of the fund, incurred in the ordinary course of the fund’s business, exceed 0.60% percent of average monthly net assets (on an annualized basis) of </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">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) </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">insurance premiums; (i) printing costs; (j) registration and filing expenses; (k) organizational and offering expenses; (l) transfer agent fees and service fees; (m) other </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">miscellaneous ordinary expenses, but excluding (1) advisory and incentive fees</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">;</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;"> (2) interest expense</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">;</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;"> (3) 12b-1 fees</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">;</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;"> (4) any cashiering or other investment servicing </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">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 </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">dividends</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">;</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;"> (8) Acquired Fund Fees and Expenses (based on indirect net expenses associated with the fund’s investments in underlying investment companies); (9) </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">class specific expenses; (10) portfolio brokerage commissions; (11) expenses related to, or incurred by, special purpose vehicles or other subsidiaries of the fund held </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">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 </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">co-investment transactions involving the fund. This agreement expires on February 28, </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">2026</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">, unless renewed by mutual agreement of the Advisor and the fund based </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">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 </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">and/or reimburse expenses for the fund and certain other John Hancock</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;"> funds according to an asset level breakpoint schedule that is based on the aggregate net </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">assets of all the funds participating in the waiver or reimbursement. This waiver is allocated proportionally among the participating funds. This agreement expires on </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">July 31, </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">2026</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">, unless renewed by mutual agreement of the fund and the Advisor based upon a determination that this is appropriate under the circumstances at that </div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;display:inline;">time.</div><div style="color:#000000;font-family:Arial Narrow;font-size:8pt;line-height:9.5pt;display:inline;"> </div></div> </div> <div style="clear:both;position:relative"> </div> </div></div>
as a percentage of net assets attributable to Shares
0.0153
0.0153
0.0153
0.0071
0.0071
0.0071
0
0.0085
0.0025
0.0068
0.0068
0.0068
0.0223
0.0223
0.0223
0.0515
0.06
0.054
-0.0103
-0.0103
-0.0103
0.0412
0.0497
0.0437
<div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">If the interval between the date of purchase of Shares and the date in which Shares are repurchased is less than one year, then such repurchase will be subject to a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">2.00% early withdrawal fee payable to the fund. In determining whether the repurchase of Shares is subject to an early withdrawal fee, the fund will repurchase those </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">Shares held longest first.</div>
<div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">The Advisor shall be paid at the end of each calendar month a fee at the annual rate of 1.350% of the average monthly value of the Managed Assets of the fund (the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">“Management Fee”). The term “Managed Assets” means the total assets of the fund (including any assets attributable to any preferred shares that may be issued or to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">indebtedness), minus the fund’s liabilities incurred in the normal course of operations other than liabilities relating to indebtedness.</div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-transform: uppercase; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Example</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0);font-family: "Arial Narrow";font-size: 9pt;letter-spacing: 0px;top: 0px;display:inline;">periods. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:*</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Cumulative Expenses Paid for the Period of:</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 1pt; line-height: 1pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div></div><div style="line-height:1.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"> </div></div><div style="margin-top:0.0pt">
<table cellpadding="0" cellspacing="0" style="text-align:start; border-bottom:0.5pt solid #D9D9D9;empty-cells:show;width:558pt">
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #000000;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:284.98pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Expenses ($)</div></div></div></div></td>
<td colspan="2" style="border-bottom:0.5pt solid #000000;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:95.32pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class I</div></div></div></div></td>
<td colspan="2" style="border-bottom:0.5pt solid #000000;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:94.37pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class S</div></div></div></div></td>
<td colspan="2" style="border-bottom:0.5pt solid #000000;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:83.32pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Class D</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:284.98pt"><div style="line-height:0.5pt;text-align:left"></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Sold</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:55.18pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Not Sold</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Sold</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:54.23pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Not sold</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Sold</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:43.18pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Not Sold</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:284.98pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Year 1</div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">61</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:55.18pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">41</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">102</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:54.23pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">83</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">78</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:43.18pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">58</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:284.98pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Year 3</div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">145</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:55.18pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">145</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">198</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:54.23pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">198</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">165</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:43.18pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">165</div></div></div></div></td></tr>
<tr style="height:12pt">
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:284.98pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Year 5</div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">249</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:55.18pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">249</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">310</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:54.23pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">310</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">271</div></div></div></div></td>
<td style="border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:43.18pt"><div style="line-height:11.0pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">271</div></div></div></div></td></tr>
<tr style="height:11.5pt">
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:284.98pt"><div style="line-height:10pt;text-align:left"><div style="margin-right:12pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Year 10</div></div></div></td>
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:10pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">506</div></div></div></div></td>
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:55.18pt"><div style="line-height:10pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">506</div></div></div></div></td>
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:10pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">581</div></div></div></div></td>
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:54.23pt"><div style="line-height:10pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">581</div></div></div></div></td>
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:40.14pt"><div style="line-height:10pt;text-align:left"><div style="margin-left:12pt;margin-right:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">531</div></div></div></div></td>
<td style="padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:43.18pt"><div style="line-height:10pt;text-align:left"><div style="margin-left:12pt;text-align:Right;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">531</div></div></div></div></td></tr></table></div><div style="line-height:18.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 18pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div><div style="clear:both;margin-top:0.0pt;position:relative;width:100%"><div style="float:left;line-height:9.5pt;text-align:left;width:3.58pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">*</div></div></div><div style="float:left;line-height:9.5pt;margin-left:10.42pt;text-align:left;width:539.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">The example assumes that the total annual fund operating expenses (excluding any sales loads on reinvested dividends, fee waivers and/or expense reimbursements) </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; letter-spacing: 0px; top: 0px;display:inline;">assumed. Moreover, the fund’s actual rate of return may be greater or less than the hypothetical 5% return shown in the example.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 8pt; line-height: 9.5pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div>
61
41
102
83
78
58
145
145
198
198
165
165
249
249
310
310
271
271
506
506
581
581
531
531
<div style="line-height:11.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Investment Objective and Principal Investment Strategies</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Investment Objective</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund’s investment objective is to seek to provide high current income and to a lesser extent capital appreciation. The Board may change the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investment objective of the fund without Shareholder approval.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Investment Strategies</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Under normal circumstances, the fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in asset-based lending </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments (“Asset-Based Lending Investments”), which may include investments in distressed loans. Asset-Based Lending Investments are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments in loans secured by an asset and include, among other investments:</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Healthcare Loans & Royalty-Backed Credit:</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> healthcare loans secured by revenue and intellectual property rights primarily on FDA-approved </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">drugs and devices and royalty streams secured primarily by FDA-approved drugs and devices;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Transportation Assets:</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> transportation assets such as loans and leases backed by commercial aircraft, aircraft engines, shipping vessels or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">transportation and equipment;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Residential Real Estate Lending:</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> the origination and acquisition of residential real estate loans and legacy mortgage loan pools, including </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">distressed or nonperforming loans, and newly originated non-agency mortgage loans;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Commercial Real Estate Lending:</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> the origination and acquisition of commercial real estate loans secured by housing-related and traditional </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">commercial real estate property types;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Consumer-Related Assets:</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> acquisition of consumer loans, including distressed or nonperforming loans; high-yield asset-backed securities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">(“ABS”) backed by various forms of non-mortgage household debt largely focused on select market segments such as: automobile loans and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">leases, credit cards and personal installment loans; and other types of consumer loans;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Corporate Asset-Based Credit:</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> asset-based corporate credit secured by real estate, equipment, receivables, inventory and intellectual property </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">rights, among other assets;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Equipment:</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> the leasing, lease financing, or lending against a wide range of equipment which is mission critical to an operator. Equipment may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">include, for example, injection molding machines, industrial cranes, so-called “yellow metal” (i.e. earth moving equipment), titled and non-titled </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">vehicles, but would not include equipment that would be categorized as transportation assets, such as ships and aircraft; and</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Liquid Securitized Credit:</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> securities backed by residential real estate (“RMBS”), commercial real estate (“CMBS”), collateralized mortgage </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">obligations (“CMOs”), secured corporate loans (“CLOs”) and ABS.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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), </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">most loans and investments are not rated. If a loan or investment is rated, it will usually be rated by S&P Global Ratings, Moody’s Investors Service, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Inc., Fitch Ratings, Kroll Bond Rating Agency or DBRS Morningstar, and may be rated below investment-grade. Disclosure regarding the ratings of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">each of these rating agencies is included in the SAI.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund seeks to achieve its objective by investing in a broad portfolio of secured assets and thereby seeks to provide consistent levels of high current </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">income derived from contractual cash-flows and to a lesser extent capital appreciation. The fund will primarily invest in financings sourced through </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">proprietary means using relationships of the Subadvisor rather than traditional channels such as public markets, and seeks to benefit from expected </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">premiums arising in such financings from, among other things, the bespoke nature of each financing. Investments will be made across a broad range of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">market sectors and asset types based on the Subadvisor’s ongoing evaluation of investment opportunities. The Subadvisor will seek to capitalize on its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">transaction valuation assessment and capital structure expertise, while attempting to protect against downside risks through protective loan </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">covenants, conservative collateral valuation and active asset management.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund is not limited to the Asset-Based Lending Investments and may invest in other asset-based lending investments as well as other types of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments consistent with its investment objective and policies.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The manager may consider environmental, social, and/or governance (“ESG”) factors, alongside other relevant factors, as part of its investment </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">process. ESG factors may include, but are not limited to, matters regarding board diversity, climate change policies, and supply chain and human rights </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">policies. The ESG characteristics utilized in the fund’s investment process may change over time and one or more characteristics may not be relevant </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with respect to all issuers that are eligible fund investments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> Because ESG factors are considered alongside other relevant factors, the manager may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">determine that an investment is appropriate notwithstanding its relative ESG characteristics.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund is authorized to use all of the various investment strategies referred to under “Risks Factors — Hedging, Derivatives and Other Strategic </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Transactions Risk” including, but not limited to, futures contracts, interest rate swaps, options, reverse repurchase agreements, and swaps.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">For temporary or defensive purposes, the fund may also invest its assets in cash, money market instruments, or other investment-grade short-term </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">securities, and it may also employ derivative strategies for hedging purposes.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may create or organize or otherwise utilize special purpose subsidiaries or other special purpose investment vehicles (“SPVs”), which are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">wholly-owned subsidiaries of the fund, to facilitate the fund’s investment strategy. Certain fund investments may be held by these SPVs.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Except as otherwise stated in this Prospectus or in the SAI, the investment policies and restrictions of the fund are not fundamental and may be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">changed at the discretion of the Board. The fund’s fundamental investment policies are listed in the SAI.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">These general descriptions summarize certain investment strategies that may be pursued by the fund. These descriptions are not intended to be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">complete explanations of the strategies described or a list of all possible investment strategies or methods that may be used by the fund.</div></div></div>
<div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 10pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risk Factors</div></div> </div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The principal risks of investing in the fund are summarized in the Prospectus Summary above. Below are descriptions of the principal factors that may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">play a role in shaping the fund’s overall risk profile. The descriptions appear in alphabetical order, not in order of importance. For further details about </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund’s risks, including additional risk factors that are not discussed in this Prospectus because they are considered non-principal factors, see the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund’s SAI.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Changes in U.S. Law</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Changes in the state and U.S. federal laws applicable to the fund, including changes to state and U.S. federal tax laws, or applicable to the Advisor, the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Subadvisor and other securities or instruments in which the fund may invest, may negatively affect the fund’s returns to Shareholders. The fund may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">need to modify its investment strategy in the future in order to satisfy new regulatory requirements or to compete in a changed business environment.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Credit and counterparty risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Factors - Hedging, Derivatives, and Other Strategic Transactions Risk”), or a borrower of the fund’s securities will be unable or unwilling to make timely </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">principal, interest, or settlement payments, or otherwise honor its obligations. Credit risk associated with investments in fixed-income securities relates </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">subject to varying degrees of risk that the issuers of the securities will have their credit ratings downgraded or will default, potentially reducing such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issuers of the securities are corporations, domestic or foreign governments, or their subdivisions or instrumentalities. U.S. government securities are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the United States. For example, issuers of many types of U.S. government securities (e.g., the Federal Home Loan Mortgage Corporation (“Freddie </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Mac”), Federal National Mortgage Association (“Fannie Mae”), and Federal Home Loan Banks), although chartered or sponsored by Congress, are not </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">funded by congressional appropriations, and their fixed-income securities, including asset-backed and mortgage-backed securities, are neither </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">statutory process with the objective of returning the entities to normal business operations. It is unclear what effect this conservatorship will have on the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">manager may have to assess the risk of the security itself. Asset-backed securities, whose principal and interest payments are supported by pools of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">other assets, such as credit card receivables and automobile loans, are subject to further risks, including the risk that the obligors of the underlying </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">assets default on payment of those assets.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Service, Inc. or BB or lower by S&P Global Ratings or Fitch Ratings, as applicable, at the time of investment, or determined by a manager to be of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">comparable quality to securities so rated) are subject to increased credit risk. The sovereign debt of many foreign governments, including their </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">subdivisions and instrumentalities, falls into this category. Below-investment-grade securities offer the potential for higher investment returns than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">higher-rated securities, but they carry greater credit risk: their issuers’ continuing ability to meet principal and interest payments is considered </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">speculative, they are more susceptible to real or perceived adverse economic and competitive industry conditions, and they may be less liquid than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">higher-rated securities.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">contracts) and engages to a significant extent in the lending of fund securities or the use of repurchase agreements. OTC derivatives transactions can </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or made only after the fund has incurred the costs of litigation. While the Subadvisor intends to monitor the creditworthiness of contract counterparties, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Creditor Risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">respect to collateral securing the obligations. Additionally, adverse credit events with respect to any underlying property, such as missed or delayed </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">payment of interest and/or principal, bankruptcy, receivership or distressed exchange, can significantly diminish the value of an investment in any such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">property.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Distressed Loans Risk.</div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in structured products collateralized by below investment grade or distressed loans or securities. Investments in such structured </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">products are subject to the risks associated with below investment grade securities. Such securities are characterized by high risk. It is likely that an </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">economic recession could severely disrupt the market for such securities and may have an adverse impact on the value of such securities.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Distribution Risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">There can be no assurance that quarterly distributions paid by the fund to Shareholders will be maintained at current levels or increase over time. The </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">are declared at the discretion of the Board.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> Shareholders who periodically receive the payment of a dividend or other distribution consisting of a return </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">distribution from the fund is net profit.</div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Economic and market events risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">domestic and foreign. These events have included, but are not limited to: bankruptcies, corporate restructurings, and other similar events; bank </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">failures; governmental efforts to limit short selling and high frequency trading; measures to address U.S. federal and state budget deficits; social, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">political, and economic instability in Europe; economic stimulus by the Japanese central bank; dramatic changes in energy prices and currency </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">exchange rates; and China’s economic slowdown. Interconnected global economies and financial markets increase the possibility that conditions in one </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">country or region might adversely impact issuers in a different country or region. Both domestic and foreign equity markets have experienced increased </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">volatility and turmoil, with issuers that have exposure to the real estate, mortgage, and credit markets particularly affected. Financial institutions could </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">suffer losses as interest rates rise or economic conditions deteriorate.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, relatively high market volatility and reduced liquidity in credit and fixed-income markets may adversely affect many issuers worldwide. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Actions taken by the U.S. Federal Reserve (Fed) or foreign central banks to stimulate or stabilize economic growth, such as interventions in currency </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">markets, could cause high volatility in the equity and fixed-income markets. Reduced liquidity may result in less money being available to purchase raw </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">materials, goods, and services from emerging markets, which may, in turn, bring down the prices of these economic staples. It may also result in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">emerging-market issuers having more difficulty obtaining financing, which may, in turn, cause a decline in their securities prices.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In response to certain economic conditions, including periods of high inflation, governmental authorities and regulators may respond with significant </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fiscal and monetary policy changes such as raising interest rates. The fund may be subject to heightened interest rate risk when the Federal Reserve </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Board (Fed) raises interest rates. Recent and potential future changes in government monetary policy may affect interest rates. It is difficult to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">accurately predict the timing, frequency or magnitude of potential interest rate increases or decreases by the Fed and the evaluation of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">rate and equivalent rates, such increases generally will cause market interest rates to rise and could cause the value of a fund’s investments, and the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund’s net asset value (NAV), to decline, potentially suddenly and significantly. As a result, the fund may experience high redemptions and, as a result, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">increased portfolio turnover, which could increase the costs that the fund incurs and may negatively impact the fund’s performance.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, as the Fed increases the target Fed funds rate, any such rate increases, among other factors, could cause markets to experience continuing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">high volatility. A significant increase in interest rates may cause a decline in the market for equity securities. These events and the possible resulting </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">market volatility may have an adverse effect on the fund.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Political turmoil within the United States and abroad may also impact the fund. Although the U.S. government has honored its credit obligations, it </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">remains possible that the United States could default on its obligations. While it is impossible to predict the consequences of such an unprecedented </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">event, it is likely that a default by the United States would be highly disruptive to the U.S. and global securities markets and could significantly impair the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">government services, which could negatively affect the U.S. economy, decrease the value of many fund investments, and increase uncertainty in or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">impair the operation of the U.S. or other securities markets. In recent years, the U.S. renegotiated many of its global trade relationships and imposed or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">markets likely will be significantly disrupted. On January 31, 2020, the United Kingdom (UK) left the EU, commonly referred to as “Brexit,” the UK </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div></div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">has already resulted in volatility in European and global markets. There remains significant market uncertainty regarding Brexit’s ramifications, and the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">range and potential implications of possible political, regulatory, economic, and market outcomes are difficult to predict.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">A widespread health crisis such as a global pandemic could cause substantial market volatility, exchange trading suspensions and closures, which may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">lead to less liquidity in certain instruments, industries, sectors or the markets generally, and may ultimately affect fund performance. For example, the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">coronavirus (COVID-19) pandemic has resulted and may continue to result in significant disruptions to global business activity and market volatility due </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to disruptions in market access, resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">others. While many countries have lifted some or all restrictions related to the coronavirus (COVID-19) and the United States ended the public health </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">emergency and national emergency declarations relating to the coronavirus (COVID-19) pandemic on May 11, 2023, the continued impact of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">coronavirus (COVID-19) and related variants is uncertain. The impact of a health crisis and other epidemics and pandemics that may arise in the future, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could affect the global economy in ways that cannot necessarily be foreseen at the present time. A health crisis may exacerbate other pre-existing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">political, social and economic risks. Any such impact could adversely affect the fund’s performance, resulting in losses to your investment.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Political and military events, including in Ukraine, North Korea, Russia, Venezuela, Iran, Syria, and other areas of the Middle East, and nationalist unrest </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in Europe and South America, also may cause market disruptions.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">As a result of continued political tensions and armed conflicts, including the Russian invasion of Ukraine commencing in February of 2022, the extent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">imposed economic sanctions on certain Russian corporate entities and individuals, and certain sectors of Russia’s economy, which may result in, among </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Russian securities, property or interests. These sanctions could also result in the immediate freeze of Russian securities and/or funds invested in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">prohibited assets, impairing the ability of a fund to buy, sell, receive or deliver those securities and/or assets. These sanctions or the threat of additional </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sanctions could also result in Russia taking counter measures or retaliatory actions, which may further impair the value and liquidity of Russian </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">securities. The United States and other nations or international organizations may also impose additional economic sanctions or take other actions that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may adversely affect Russia-exposed issuers and companies in various sectors of the Russian economy. Any or all of these potential results could lead </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Russia’s economy into a recession. Economic sanctions and other actions against Russian institutions, companies, and individuals resulting from the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ongoing conflict may also have a substantial negative impact on other economies and securities markets both regionally and globally, as well as on </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sanctions on Belarus for its support of Russia’s invasion of Ukraine. Additional sanctions may be imposed on Belarus and other countries that support </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Russia. Any such sanctions could present substantially similar risks as those resulting from the sanctions imposed on Russia, including substantial </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">negative impacts on the regional and global economies and securities markets.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">various factors, including unexpected shifts in the domestic or global economy, and a fund’s investments may be affected, which may reduce a fund’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">performance. Further, inflation may lead to the rise in interest rates, which may negatively affect the value of debt instruments held by the fund, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">resulting in a negative impact on a fund’s performance. Generally, securities issued in emerging markets are subject to a greater risk of inflationary or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">deflationary forces, and more developed markets are better able to use monetary policy to normalize markets.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Effect of the Advisor’s Incentive Fee</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund will allocate the Incentive Fee to the Advisor based on returns to the Shareholders. The Incentive Fee is asymmetric — it grants the Advisor a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">priority allocation of gains without requiring the Advisor to accept a corresponding (or any) priority allocation of losses. Accordingly, the Incentive Fee </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may create an incentive for the Advisor to make investments that are risky or more speculative than would be the case in the absence of such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">arrangement. The way in which the Incentive Fee payable to the Advisor is determined may encourage it to use leverage to increase the return on the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund’s investments. In addition, the fact that the Management Fee is payable based upon the fund’s Managed Assets, which would include any </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">borrowings for investment purposes, may encourage the Advisor to use leverage to make additional investments. Under certain circumstances, the use </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">of leverage may increase the likelihood of default, which would disfavor Shareholders. Such a practice could result in the fund’s investing in more </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">speculative securities than would otherwise be in its best interests, which could result in higher investment losses, particularly during cyclical economic </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">downturns.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">ESG integration risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The manager considers ESG factors that it deems relevant or additive, along with other material factors and analysis, when managing the fund. The </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">situations, the extent to which these ESG factors may be applied according to the manager’s integrated investment process may not include </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">U.S. Treasuries, government securities, or other asset classes. ESG factors may include, but are not limited to, matters regarding board diversity, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">climate change policies, and supply chain and human rights policies. Incorporating ESG criteria and making investment decisions based on certain ESG </div></div></div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">characteristics, as determined by the manager, carries the risk that the fund may perform differently, including underperforming, funds that do not </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">utilize ESG criteria, or funds that utilize different ESG criteria. Integration of ESG factors into the fund’s investment process may result in a manager </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">making different investments for the fund than for a fund with a similar investment universe and/or investment style that does not incorporate such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">considerations in its investment strategy or processes, and the fund’s investment performance may be affected. Because ESG factors are one of many </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">considerations for the fund, the manager may nonetheless include companies with low ESG characteristics or exclude companies with high ESG </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">characteristics in the fund’s investments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The ESG characteristics utilized in the fund’s investment process may change over time, and different ESG characteristics may be relevant to different </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments. Although the manager has established its own structure to oversee ESG integration in accordance with the fund’s investment objective and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">strategies, successful integration of ESG factors will depend on the manager’s skill in researching, identifying, and applying these factors, as well as on </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the availability of relevant data. The method of evaluating ESG factors and subsequent impact on portfolio composition, performance, proxy voting </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">decisions and other factors, is subject to the interpretation of the manager in accordance with the fund’s investment objective and strategies. ESG </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">factors may be evaluated differently by different managers, and may not carry the same meaning to all investors and managers. The manager may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">employ active shareowner engagement to raise ESG issues with the management of select portfolio companies. The regulatory landscape with respect </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to ESG integration.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Fixed-</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">income securities risk</div></div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">quality risk.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Interest-</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">rate risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Fixed-income securities are affected by changes in interest rates. When interest rates decline, the market value of fixed-income </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">securities generally can be expected to rise. Conversely, when interest rates rise, the market value of fixed-income securities generally can be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">maturity of a security measures the time until final payment is due. Duration measures sensitivity more accurately than maturity because it takes </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">into account the time value of cash flows generated over the life of a debt security.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In response to certain economic conditions, including periods of high inflation, governmental authorities and regulators may respond with significant </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fiscal and monetary policy changes such as raising interest rates. The fund may be subject to heightened interest rate risk when the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Federal Reserve </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Board (</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Fed</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">)</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> raises interest rates. Recent and potential future changes in government monetary policy may affect interest rates. It is difficult to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">accurately predict the timing, frequency or magnitude of potential interest rate increases or decreases by the Fed and the evaluation of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">funds rate and equivalent rates, such increases generally will cause market interest rates to rise and could cause the value of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> fund’s investments, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and the fund’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">net asset value (</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">NAV</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">)</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">, to decline, potentially suddenly and significantly. As a result, the fund may experience high redemptions and</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">,</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">as </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a result,</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> increased portfolio turnover, which could increase the costs that the fund incurs and may negatively impact the fund’s performance.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In certain market conditions, governmental authorities and regulators may considerably lower interest rates, which, in some cases could result in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">negative interest rates. These actions, including their reversal or potential ineffectiveness, could further increase volatility in securities and other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">maturity, the fund would generate a negative return on that investment. Similarly, negative rates on investments by money market funds and similar </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">cash management products could lead to losses on investments, including on investments of the fund’s uninvested cash.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Credit </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">quality risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Fixed-income securities are subject to the risk that the issuer of the security will not repay all or a portion of the principal </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">borrowed and will not make all interest payments. If the credit quality of a fixed-income security deteriorates after </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> fund has purchased the security, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">deteriorate as a result of poor management decisions, competitive pressures, technological obsolescence, undue reliance on suppliers, labor </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issues, shortages, corporate restructurings, fraudulent disclosures, or other factors. Funds that may invest in lower-rated fixed-income securities, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">commonly referred to as junk securities, are riskier than funds that may invest in higher-rated fixed-income securities.</div></div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Investment-</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">grade fixed</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">-</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">income securities in the lowest rating category risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Investment-grade fixed-income securities in the lowest rating </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">category (such as Baa by Moody’s Investors Service, Inc. or BBB by S&P Global Ratings or Fitch Ratings, as applicable, and comparable unrated </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">securities) involve a higher degree of risk than fixed-income securities in the higher rating categories. While such securities are considered </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investment-grade quality and are deemed to have adequate capacity for payment of principal and interest, such securities lack outstanding </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investment characteristics and have speculative characteristics as well. For example, changes in economic conditions or other circumstances are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">more likely to lead to a weakened capacity to make principal and interest payments than is the case with higher-grade securities.</div></div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Prepayment of </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">principal risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Many types of debt securities, including floating-rate loans, are subject to prepayment risk. Prepayment risk is the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div></div></div> <div style="line-height:12.0pt;margin-left:12pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may have to invest the proceeds in securities with lower yields. Securities subject to prepayment risk can offer less potential for gains when the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">credit quality of the issuer improves.</div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Extension </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Extension risk is the danger that borrowers will defer prepayments due to market conditions. Extension risk is generally a concern </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in secondary market, structured-credit product investments. For instance, rising interest rates might discourage homeowners from refinancing their </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">mortgages, which reduces prepayment flows. That extends the duration of the loans in a mortgage-backed security beyond what the valuation and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Foreign securities risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Funds that invest in securities traded principally in securities markets outside the United States are subject to additional and more varied risks, as the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">value of foreign securities may change more rapidly and extremely than the value of U.S. securities. Less information may be publicly available </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regarding foreign issuers, including foreign government issuers. Foreign securities may be subject to foreign taxes and may be more volatile than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">U.S. securities. Currency fluctuations and political and economic developments may adversely impact the value of foreign securities. The securities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">markets of many foreign countries are relatively small, with a limited number of companies representing a small number of industries. Additionally, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issuers of foreign securities may not be subject to the same degree of regulation as U.S. issuers. Reporting, accounting, and auditing standards of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">foreign countries differ, in some cases significantly, from U.S. standards. There are generally higher commission rates on foreign portfolio transactions, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">transfer taxes, higher custodial costs, and the possibility that foreign taxes will be charged on dividends and interest payable on foreign securities, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">some or all of which may not be reclaimable. Also, adverse changes in investment or exchange control regulations (which may include suspension of the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ability to transfer currency or assets from a country); political changes; or diplomatic developments could adversely affect a fund’s investments. In the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">event of nationalization, expropriation, confiscatory taxation, or other confiscation, the fund could lose a substantial portion of, or its entire investment </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in, a foreign security. Foreign countries, especially emerging market countries, also may have problems associated with settlement of sales. Such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">difficulties and delays in enforcing a judgment in a foreign court resulting in potential losses to the fund. Some of the foreign securities risks are also </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">applicable to funds that invest a material portion of their assets in securities of foreign issuers traded in the United States.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Currency risk.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Currency risk is the risk that fluctuations in exchange rates may adversely affect the U.S. dollar value of a fund’s investments. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Currency risk includes both the risk that currencies in which a fund’s investments are traded, or currencies in which a fund has taken an active </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly for a number of reasons, including the forces of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">foreign governments or central banks, or currency controls or political developments in the United States or abroad. Certain funds may engage in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">active currency positions and may cross-hedge currency exposure represented by their securities into another foreign currency. This may result in a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund’s currency exposure being substantially different than that suggested by its securities investments. All funds with foreign currency holdings </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and/or that invest or trade in securities denominated in foreign currencies or related derivative instruments may be adversely affected by changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">foreign currency exchange rates. Derivative foreign currency transactions (such as futures, forwards, and swaps) may also involve leveraging risk, in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">addition to currency risk. Leverage may disproportionately increase a fund’s portfolio losses and reduce opportunities for gain when interest rates, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">stock prices, or currency rates are changing.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Continental Europe.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">European securities may be affected significantly by economic, regulatory, or political developments affecting European </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issuers. All countries in Europe may be significantly affected by fiscal and monetary controls implemented by the European Economic and Monetary </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Union. Eastern European markets are relatively undeveloped and may be particularly sensitive to economic and political events affecting those </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">countries.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Hedging, derivatives, and other strategic transactions risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">predict pertinent market movements and market risk, counterparty risk, credit risk, interest-rate risk, and other risk factors, none of which can be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Subadvisor only uses hedging and other strategic transactions in the fund primarily for hedging purposes or to gain exposure to a particular securities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">principal amount invested. These transactions may also increase the volatility of the fund and may involve a small investment of cash relative to the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">transaction does not perform as promised.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">reference rates, or indexes. Derivatives may relate to stocks, bonds, interest rates, currencies or currency exchange rates, and related indexes. The </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund may use derivatives for many purposes, including for hedging and as a substitute for direct investment in securities or other assets. Derivatives </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">existing investments and make new investments. This generally will be done when the adjustment is expected to be relatively temporary or in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">anticipation of effecting the sale of fund assets and making new investments over time. Further, since many derivatives have a leverage component, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in the derivative itself. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. When the fund uses </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">description of the various derivative instruments the fund may utilize, refer to the SAI.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">particular, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulations promulgated or proposed thereunder require many </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">derivatives to be cleared and traded on an exchange, expand entity registration requirements, impose business conduct requirements on dealers that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">enter into swaps with a pension plan, endowment, retirement plan or government entity, and required banks to move some derivatives trading units to a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">non-guaranteed affiliate separate from the deposit-taking bank or divest them altogether. Although the Commodity Futures Trading Commission (CFTC) </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">has released final rules relating to clearing, reporting, recordkeeping and registration requirements under the legislation, many of the provisions are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">subject to further final rule making, and thus its ultimate impact remains unclear. New regulations could, among other things, restrict the fund’s ability </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to engage in derivatives transactions (for example, by making certain types of derivatives transactions no longer available to the fund) and/or increase </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the costs of such derivatives transactions (for example, by increasing margin or capital requirements), and the fund may be unable to fully execute its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investment strategies as a result. Limits or restrictions applicable to the counterparties with which the fund engages in derivative transactions also </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could prevent the fund from using these instruments or affect the pricing or other factors relating to these instruments, or may change the availability of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">certain investments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The Derivatives Rule mandates that the fund adopt and/or implement: (i) value-at-risk limitations (“VaR”); (ii) a written derivatives risk management </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">program; (iii) new Board oversight responsibilities; and (iv) new reporting and recordkeeping requirements. In the event that a fund’s derivative exposure </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">user (“Limited Derivatives User”) under the Derivatives Rule, in which case the fund is not subject to the full requirements of the Derivatives Rule. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Limited Derivatives Users are excepted from VaR testing, implementing a derivatives risk management program, and certain Board oversight and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">reporting requirements mandated by the Derivatives Rule. However, a Limited Derivatives User is still required to implement written compliance policies </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and procedures reasonably designed to manage its derivatives risks. The Derivatives Rule also provides special treatment for reverse repurchase </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">agreements, similar financing transactions and unfunded commitment agreements. Specifically, the fund may elect whether to treat reverse </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">repurchase agreements and similar financing transactions as “derivatives transactions” subject to the requirements of the Derivatives Rule or as senior </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">time after the date of this Prospectus, legislation may be enacted that could negatively affect the assets of the fund. Legislation or regulation may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">change the way in which the fund itself is regulated. The Advisor cannot predict the effects of any new governmental regulation that may be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">implemented, and there can be no assurance that any new governmental regulation will not adversely affect the fund’s ability to achieve its investment </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">objectives.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The use of derivative instruments may involve risks different from, or potentially greater than, the risks associated with investing directly in securities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and other, more traditional assets. In particular, the use of derivative instruments exposes the fund to the risk that the counterparty to an OTC </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor its obligations. OTC derivatives transactions </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">transaction to a third party. If the counterparty defaults, the fund will have contractual remedies, but there is no assurance that the counterparty will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">derivatives transaction is individually negotiated with a specific counterparty, the fund will be subject to the risk that a counterparty may interpret </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">those payments may be delayed or made only after the fund has incurred the costs of litigation. While the Subadvisor intends to monitor the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">creditworthiness of counterparties, there can be no assurance that a counterparty will meet its obligations, especially during unusually adverse market </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">creditworthiness of any of those counterparties may have a pronounced effect on the fund. Derivatives are also subject to a number of other risks, </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">including market risk, liquidity risk, and operational risk. Since the value of derivatives is calculated and derived from the value of other assets, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">correlate perfectly with the assets, rates, or indexes they are designed to hedge or closely track. Suitable derivatives transactions may not be available </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in all circumstances. The fund is also subject to the risk that the counterparty closes out the derivatives transactions upon the occurrence of certain </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">triggering events. In addition, a Subadvisor may determine not to use derivatives to hedge or otherwise reduce risk exposure. Government legislation or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulation could affect the use of derivatives transactions and could limit the fund’s ability to pursue its investment strategies.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">certain derivatives and other strategic transactions, it will be subject to associated risks. The main risks of each appear below.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Futures contracts.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), and risk of disproportionate loss are the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">principal risks of engaging in transactions involving futures contracts.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Interest-rate swaps.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk, and risk of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">disproportionate loss are the principal risks of engaging in transactions involving interest-rate swaps.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Options.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), and risk of disproportionate loss are the principal risks </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">of engaging in transactions involving options. Counterparty risk does not apply to exchange-traded options.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Reverse repurchase agreements.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">An event of default or insolvency of the counterparty to a reverse repurchase agreement could result in delays </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">leverage and may, therefore, increase fluctuations in the fund’s net asset value per share (NAV).</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Swaps.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk, settlement risk, risk of default of the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">underlying reference obligation, and risk of disproportionate loss are the principal risks of engaging in transactions involving swaps.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Illiquidity of Shares</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund is a closed-end investment company designed primarily for long-term investors and is not intended to be a trading vehicle. The fund does not </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">that a secondary market will develop. Shares therefore are not readily marketable. Because the fund is a closed-end investment company, Shares in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund may not be tendered for repurchase on a daily basis, and they may not be exchanged for shares of any other fund.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Although the fund, at the sole discretion of the Board, will consider whether to make periodic repurchase offers of its outstanding Shares at net asset </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">value, Shares are significantly less liquid than shares of funds that trade on a stock exchange. There is no guarantee that you will be able to sell all of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">your Shares that you desire to sell in any particular repurchase offer. If a repurchase offer is oversubscribed by Shareholders holding Shares of the fund, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund will repurchase only a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">pro rata</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> portion of the Shares tendered by each Shareholder. The potential for pro-ration may cause some investors to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">tender more Shares for repurchase than they otherwise would wish to have repurchased. In addition, in extreme cases, the fund may not be able to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">complete repurchases due to the fund’s holding of illiquid investments. In that event, you may be able to sell your Shares only if you are able to find an </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investor willing to purchase your Shares. Any such sale may have to be negotiated at unfavorable prices and must comply with applicable securities laws </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and must be approved by the Board. Due to the requirements regarding tenders offers and the frequency with which the fund expects to offer to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">repurchase Shares, in the event the fund makes repurchase offers it is unlikely that the fund will be able to extend the expiration date of, or increase the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">amount of, any repurchase offer, which may result in an investor needing to subscribe to more than one repurchase offer to exit the fund in the case of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">oversubscribed repurchase offers.</div></div></div><div style="line-height:12.0pt;margin-top:5pt;text-align:left"><div style="margin-top:5pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Inflation/Deflation Risk.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Inflation risk is the risk that the value of assets or income from investment will be worth less in the future, as inflation </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">decreases the value of money. As inflation increases, the real value of the Shares and distributions on those </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Shares</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> can decline. In addition, during any </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">companies, their assets and revenues. In addition, deflation may have an adverse effect on the creditworthiness of issuers and may make issuer default </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">more likely, which may result in a decline in the value of</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund’s portfolio.</div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Lending Risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may originate loans to, or purchase, assignments of or participations in loans made to, various issuers, including distressed companies. Such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments may include senior secured, junior secured and mezzanine loans and other secured and unsecured debt that has been recently originated </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">obligations, there is insufficient collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted loan. However, there can </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">assurance that collateral will retain its value.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div></div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">commenced, the fund could experience substantial costs in trying to collect on defaulted investments, such as legal fees, collection agency fees, or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">stake in the litigation.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments involving the Subadvisor’s affiliates (e.g., securitizations where the Subadvisor is sponsor).</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Leverage risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Leverage creates risks for Shareholders, including the likelihood of greater volatility of NAV and market price of, and distributions from, the Shares and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the risk that fluctuations in the costs of borrowings may affect the return to Shareholders. To the extent the income derived from investments purchased </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the income from the investments purchased with such funds is not sufficient to cover the cost of leverage, the amount available for distribution to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">maintain the fund’s leveraged position if it deems such action to be appropriate. While the fund has preferred shares or borrowings outstanding, an </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">There can be no assurance that a leveraging strategy will be successful.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fee paid to the Advisor is calculated on the basis of the Advisor’s Managed Assets, including assets attributable to any preferred shares that may be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issued or to indebtedness, so the fees will be higher when leverage is utilized. In this regard, holders of any preferred shares do not bear the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Management Fee. Rather, Shareholders bear the portion of the Management Fee attributable to the assets purchased with the proceeds, which means </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">that Shareholders effectively bear the entire Management Fee.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Leverage may be achieved through the purchase of certain derivative instruments. The fund’s use of derivative instruments exposes the fund to special </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">risks.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Management Risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the Advisor and the Board. The Subadvisor applies investment techniques and risk analyses in making investment decisions for the fund, but there can </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">be no guarantee that it will produce the desired results. The Subadvisor’s securities selections and other investment decisions might produce a loss or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">from achieving its investment objective.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Natural Disasters, Adverse Weather Conditions, and Climate Change</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Certain areas of the world may be exposed to adverse weather conditions, such as major natural disasters and other extreme weather events, including </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">hurricanes, earthquakes, typhoons, floods, tidal waves, tsunamis, volcanic eruptions, wildfires, droughts, windstorms, coastal storm surges, heat </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">waves, and rising sea levels, among others. Some countries and regions may not have the infrastructure or resources to respond to natural disasters, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">making them more economically sensitive to environmental events. Such disasters, and the resulting damage, could have a severe and negative impact </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">manner normally conducted. Adverse weather conditions also may have a particularly significant negative effect on issuers in the agricultural sector </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and on insurance companies that insure against the impact of natural disasters.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">conditions, resulting in increased economic impact, and may pose long-term risks to the fund’s investments. The future impact of climate change is </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">difficult to predict but may include changes in demand for certain goods and services, supply chain disruption, changes in production costs, increased </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">legislation, regulation, international accords and compliance-related costs, changes in property and security values, availability of natural resources </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and displacement of peoples.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for issuers in which the fund </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">invests. These developments may create demand for new products or services, including, but not limited to, increased demand for goods that result in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">lower emissions, increased demand for generation and transmission of energy from alternative energy sources and increased competition to develop </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">innovative new products and technologies. These developments may also decrease demand for existing products or services, including, but not limited </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to, decreased demand for goods that produce significant greenhouse gas emissions and decreased demand for services related to carbon based </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">energy sources, such as drilling services or equipment maintenance services.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Non-Diversified Risk</div></div></div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Overall risk can be reduced by investing in securities from a diversified pool of issuers, while overall risk is increased by investing in securities of a small </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">number of issuers. If the fund is not diversified within the meaning of the 1940 Act, that means it is allowed to invest a large portion of assets in any one </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issuer or a small number of issuers, which may result in greater susceptibility to associated risks. As a result, credit, market, and other risks associated </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with a non-diversified fund’s investment strategies or techniques may be more pronounced than for funds that are diversified.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Operational and Cybersecurity Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">systems to perform necessary business functions, the fund’s service providers are susceptible to operational and information or cybersecurity risks that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could result in losses to the fund and its shareholders. Intentional cybersecurity breaches include unauthorized access to systems, networks, or devices </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">(such as through “hacking” activity or “phishing”); infection from computer viruses or other malicious software code; and attacks that shut down, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">disable, slow, or otherwise disrupt operations, business processes, or website access or functionality. Cyber-attacks can also be carried out in a manner </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">that does not require gaining unauthorized access, such as causing denial-of-service attacks on the service providers’ systems or websites rendering </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">them unavailable to intended users or via “ransomware” that renders the systems inoperable until appropriate actions are taken. In addition, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">unintentional incidents can occur, such as the inadvertent release of confidential information (possibly resulting in the violation of applicable privacy </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">laws).</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">damage to a computer or network system, or costs associated with system repairs. Such incidents could cause a fund, the advisor, a manager, or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">service providers to incur regulatory penalties, reputational damage, additional compliance costs, litigation costs or financial loss. In addition, such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">incidents could affect issuers in which a fund invests, and thereby cause the fund’s investments to lose value.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Cyber-events have the potential to materially affect the fund and the advisor’s relationships with accounts, shareholders, clients, customers, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">employees, products, and service providers. The fund has established risk management systems reasonably designed to seek to reduce the risks </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund is exposed to operational risk arising from a number of factors, including, but not limited to, human error, processing and communication </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, other disruptive events, including (but not limited to) natural disasters and public health crises may adversely affect the fund’s ability to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">conduct business, in particular if the fund’s employees or the employees of its service providers are unable or unwilling to perform their responsibilities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">arrangements could result in the fund’s business operations being less efficient than under normal circumstances, could lead to delays in its processing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">of transactions, and could increase the risk of cyber-events.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Potential Consequences of Regular Repurchase Offers</div></div></div> </div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund’s repurchase offer policy may have the effect of decreasing the size of the fund over time from what it otherwise would have been absent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">significant new investments in the fund. It may also force the fund to sell assets it would not otherwise sell and/or to maintain increased amounts of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">cash or liquid investments at times. It may also reduce the investment opportunities available to the fund and cause its expense ratio to increase. In </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">addition, because of the limited market for private securities held by the fund, the fund may be forced to sell its liquid securities in order to meet cash </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">requirements for repurchases. This may have the effect of substantially increasing the fund’s ratio of relatively more illiquid securities to relatively more </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">liquid securities for the remaining investors. It is not the intention of the fund to do this; however, it may occur.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Tax Risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div></div> </div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">from certain kinds of investment income; (ii) meet certain asset diversification requirements at the end of each quarter; and (iii) distribute in each </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">exempt interest income). If the fund fails to meet any of these requirements, subject to the opportunity to cure such failures under applicable provisions </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">such income were distributed to Shareholders. All distributions by the fund from earnings and profits, including distributions of net capital gain (if any), </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">treated as qualified dividend income in the case of individual and other non-corporate Shareholders and (ii) for the dividends received deduction in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">case of corporate Shareholders, provided that in each case the Shareholder meets applicable holding period requirements. In addition, in order to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">requalify for taxation as a regulated investment company, the fund might be required to recognize unrealized gain, pay substantial taxes and interest, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and make certain distributions. See “Federal Income Tax Matters.”</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div> </div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and future changes in tax laws and regulations. See “Federal Income Tax Matters.”</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">various types of income will be in future years. See “Federal Income Tax Matters.”</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">To qualify as a RIC for any taxable year, the fund must, among other things, satisfy a gross income test for such taxable year. Specifically, at least 90% of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund’s gross income for such taxable year must consist of dividends; interest; payments with respect to certain securities loans; gains from the sale </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or other disposition of stock, securities or foreign currencies; other income (including, but not limited to, gains from options, futures or forward </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">contracts) derived with respect to its business of investing in such stock, securities or currencies; and net income derived from interests in “qualified </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">publicly traded partnerships” (such income, “Qualifying RIC Income”). Income from certain Asset-Based Lending Investments will not be Qualifying RIC </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Income. In order to avoid receiving non-qualifying income from such investments, the fund may invest in those Asset-Based Lending Investments </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">indirectly through one or more subsidiaries organized outside of the United States (each, a “Non-US Subsidiary”). A Non-US Subsidiary will be treated as </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a controlled foreign corporation (a “CFC”), and the fund will be a “United States shareholder” thereof. As a result, the fund will be required to include in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">its gross income each taxable year all of a Non-US Subsidiary’s “subpart F income” and its “GILTI” income. It is expected that much of each Non-US </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Subsidiary’s income will be “subpart F income.” If a Non-US Subsidiary realizes a net loss, that loss generally will not be available to offset the fund’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">income. The fund’s inclusion of a Non-US Subsidiary’s “subpart F income” in its gross income will increase the fund’s tax basis in its shares of the Non-US </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Subsidiary. Distributions by a Non-US Subsidiary to the fund will not be taxable to the extent of its previously undistributed “subpart F income” and will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">reduce the fund’s tax basis in those shares.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Although income from the Asset-Based Lending Investments held by a Non-US Subsidiary would not be Qualifying RIC Income if received directly by the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund, the Code provides that a RIC’s “subpart F income” inclusions will be treated as Qualifying RIC Income if the CFC distributes such income to the RIC </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">during the year of inclusion. Further, the IRS has issued Regulations providing that the annual net profit, if any, realized by a Non-US Subsidiary in which </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund invests as part of its business of investing in stock or securities and included in the fund’s income under the subpart F rules will constitute </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">“qualifying income” for purposes of remaining qualified as a RIC whether or not the included income is distributed by a Non-US Subsidiary to the fund.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">For U.S. federal income tax purposes, a Non-US Subsidiary is treated as a corporation. A Non-US Subsidiary would be subject to U.S. federal income </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">tax, at the 21% rate currently applicable to U.S. corporations, on its net income that is treated as “effectively connected” with the conduct of a trade or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">business in the United States (“effectively connected income”). In addition, a Non-US Subsidiary would be subject to a 30% U.S. branch profits tax in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">respect of its “dividend equivalent amount,” as defined in Section 884 of the Code, attributable to effectively connected income. The fund expects that, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in general, the activities of each Non-US Subsidiary will be conducted in a manner such that the Non-US Subsidiary will not be treated as engaged in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">conduct of a U.S. trade or business. There can be no assurance, however, that a Non-US Subsidiary will not recognize any effectively connected income. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The imposition of U.S. federal tax on a Non-US Subsidiary’s effectively connected income could significantly reduce the fund’s returns.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Income from certain Asset-Based Lending Investments will not be Qualifying RIC Income and, in some cases, income from those Asset-Based Lending </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Investments also would result in “effectively connected income” (as described above) if received by a Non-US Subsidiary. For that reason, certain </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Asset-Based Lending Investments may be held by the fund indirectly through one or more subsidiaries organized in the United States (each, a “Domestic </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Subsidiary”). A Domestic Subsidiary would be subject to U.S. federal income tax, at the 21% rate currently applicable to U.S. corporations, on its net </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">income and gains, as well as any applicable state income tax. Dividends paid by a Domestic Subsidiary to the fund would be Qualifying RIC Income.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The RIC diversification requirements provide that not more than 25% of the value of the fund’s total assets can be invested (x) in securities (other than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">U.S. government securities or securities of other RICs) of any one issuer or of two or more issuers that the fund controls and that are engaged in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">same, similar or related trades or businesses. As a result, the fund’s total investment in certain Non-US Subsidiaries and Domestic Subsidiaries that are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">engaged in the same, similar or related trades or businesses is limited to no more than 25% of the value of the fund’s total assets.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Valuation Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">policies and procedures. In accordance with these policies and procedures, the Advisor values the fund’s investments at fair value as determined in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">good faith when market quotations are not readily available or are deemed to be unreliable. Fair value pricing may require subjective determinations </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Advisor, as valuation designee, is subject to Board oversight and reports to the Board information regarding the fair valuation process and related </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">material matters.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Usury Limitations</div></div></div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Interest charged on loans <div style="display:inline;">originated<div style="display:inline;"> or</div> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">acquired by the fund may be subject to state usury laws imposing maximum interest rates and penalties for violations, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">including restitution of excess interest and unenforceability of debt.</div></div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Healthcare Loans and Royalty-Backed Credit Investments</div></div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Healthcare Product-Related Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The ability of the fund to generate returns will depend in part on the success of the pharmaceutical, biotechnology, specialty and generic </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">pharmaceuticals, medical devices and products, laboratory and diagnostics products (the “Products”) related to the fund’s investments. To the extent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">any risks described below adversely affect sales of Products, potential returns for Limited Partners will, in turn, be adversely affected.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Products Sales Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Sales from Products may be lower than their historical levels or lower than the amounts projected due to pricing pressures, insufficient demand, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">product competition, lack of market acceptance, obsolescence, safety or efficacy issues, restrictions on distribution imposed or requested by </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulatory authorities, narrowing of the approved indication(s) for use, additions of boxed warnings or other warnings or precautions to the labeling, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">manufacturing shortages, loss of patent protection or other factors.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medical Withdrawal Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">After its regulatory approval and introduction into the market, a Product may still be subject to withdrawal from the market at the request or direction of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the FDA or a foreign regulatory body. The manufacturer or marketer of a Product may voluntarily withdraw the Product from the market for medical, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">technical, regulatory, commercial or other reasons. There can be no assurance that a Product will not be withdrawn.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medical Product Competition Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The healthcare industry is highly competitive and rapidly evolving. Each Product is subject to competition from alternative products or procedures that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">are now available, or that may be developed or become available in the future. The Products face competition from (i) products currently on the market </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">that are approved for other indications, but may be subsequently approved for the same indications as those of the Products, (ii) off-label use of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">products approved for other indications, (iii) the introduction of new products or procedures, and/or (iv) improvements to existing products. Any of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">these changes may cause a Product to become more expensive than its competitors or less relevant as a therapeutic alternative, thereby decreasing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the value of (and in some instances, rendering worthless) the expected revenue stream on that Product. In addition, a change of law could permit </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">importation into the countries for which the fund is entitled to royalties for Product sales (the “Protected Countries”) of Products for which the fund may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">not be not entitled to royalties, which would reduce the sales of royalty bearing Products.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Licensees of the Products (“Licensees”) are responsible for the development, production, marketing and sale of the Products. The sale of the Products </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and the Licensees’ ability to maintain their competitive positions are related to the success of the Licensees’ respective marketing efforts. These efforts </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">rely, in part, on the strength and reputation of a Product’s brand name, the capabilities of the Licensee’s sales force, and underlying trademarks, trade </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">names and related intellectual property. A Licensee’s activities both in marketing the Products and in protecting its intellectual property may be outside </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the control of the fund. A Licensee’s failure either to market the Products actively or to diligently protect its intellectual property rights could reduce its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">competitive position. Other factors affecting the market position of the Products include their effectiveness, side effect profile, price and third-party </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">insurance reimbursement policies.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Independent Medical Licensees</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Revenue received by the fund is expected to include royalties paid by the Licensees or, in the case of bonds or other securities collateralized by </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">royalties, payments supported by royalties paid by the Licensees. These Licensees are not owned by or affiliated with the fund and some of these </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Licensees may have interests that are different from the fund’s interests. These Licensees may be motivated to maximize income by allocating </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">resources to other products and, in the future, may decide to focus less attention on the Products. There can be no assurance that each of these parties </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">has adequate resources and motivation to continue to produce, market and sell the Products. Aside from any limited audit rights relating to the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">activities of the Licensees that the fund may have in certain circumstances, the fund does not have oversight rights with respect to the Licensees’ </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">operations. The fund also has limited information on the Licensees’ operations. While the fund may be able to receive certain information relating to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sales of Products through the exercise of audit rights and review of royalty reports, if available, the fund will not have the right to review or receive other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">important information relating to Products, including the results of any studies conducted by the Licensees or others, or complaints from doctors or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">users of the Products, that the Licensees may have. The market performance of the Products, therefore, may be diminished by any number of factors </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">relating to the Licensees that are beyond the fund’s control.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, royalty payments are determined by the Licensees based on their reported sales. Each Licensee’s calculation of the royalty payments is </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">subject to and dependent upon the adequacy and accuracy of its sales and accounting functions, and errors may occur from time to time in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">calculations made by a Licensee. While the fund may have certain audit rights with respect to the calculations and sales data for the associated royalty </div></div> </div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">payments, such audit rights will be limited. In addition, such audits may occur many months following the fund’s recognition of the royalty revenue, may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">require the fund to adjust its royalty revenues in later periods and may require expense on the part of the fund.</div></div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Generic Medical Product Substitutes</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Although the Products are based upon patents and/or patent applications with exclusive rights and may have other types of exclusivity under relevant </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">laws, a regulatory authority may, upon expiration of such exclusivities, authorize marketing by a third party for a generic substitute for a Product, in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">which case the Product would become subject to competition from such generic substitute. Generic substitutes are typically sold at significantly lower </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">prices than branded products. Governmental and other pressures to reduce pharmaceutical costs, including from third-party payers such as health </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">maintenance organizations and health insurers, could influence physicians or pharmacies to increasingly use generic substitutes for the Products.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Potential Medical Product Liability Claims</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The manufacturers, developers or marketers of the Products could become subject to product liability claims. A successful product liability claim could </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">adversely affect the amount of revenue generated by the fund. Although the fund believes that it will not bear responsibility in the event of a product </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">liability claim against the company manufacturing, marketing and/or selling the underlying Products, there can be no assurance that such claims would </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">not materially and adversely affect the fund.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Patent and Other Intellectual Property Rights May Be Challenged and/or Otherwise Compromised</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The success of the fund’s investments will frequently depend, at least in part, on the existence of valid and enforceable claims of issued patents and/or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">claims in pending patent applications in the United States and elsewhere throughout the world, and/or possibly on other forms of registered and/or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">unregistered intellectual property rights. For instance, in the case of royalty investments, the fund’s right to receive payments will depend on the sales of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Products covered by such intellectual property rights. In the case of credit investments in companies in the healthcare industry, these companies’ </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">performance and consequently the success of the fund’s investments in these companies will similarly be dependent on these intellectual property </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">rights. The patents, patent applications, and/or other intellectual property rights on which these royalty streams or other investments depend may be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">challenged, invalidated, rendered unenforceable or otherwise compromised. By way of example only, there can be no assurance that a third party will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">not assert ownership or other rights in or to any such patents, patent applications or other intellectual property, or that any patent applications on which </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">royalty streams or other investments may depend will proceed to grant. Similarly, there can be no assurance that, in the context of a patent challenge or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">otherwise, evidence such as prior art references, will not be uncovered that could have an adverse effect on the scope, validity or enforceability of any of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the patents or on the patentability of any of the patent applications on which the royalty streams or other investments depend. Any challenge or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">compromise of the patents, patent applications or other intellectual property rights on which the royalty streams or other investments depend may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">adversely affect the performance of the fund.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Challenges from the Licensees</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Challenges to patent rights on which the royalty streams, and possibly other investments, may depend may come from Licensees as well as third </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">parties. Pursuant to the Supreme Court decision of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medimmune v. Genentech</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">, 549 U.S. 118, 127 S. Ct. 764 (2007), a licensee need not terminate its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">license agreement before seeking a declaratory judgment in federal court that the underlying patent is invalid, unenforceable, or not infringed. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Therefore, there can be no assurance that a Licensee paying royalties contributing to the royalty streams will not challenge patent rights on which those </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">royalties are based.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medical Intellectual Property May be Infringed or Circumvented by Others</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">There is a risk that third parties may use the patents, patent applications and/or other intellectual property rights on which the royalty streams and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">other investments depend without authorization from the licensor or in the case of royalty streams, without otherwise paying royalties to the licensor. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">There also is a risk that companies within the healthcare industry may develop or otherwise obtain intellectual property that potentially could reduce </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">any competitive advantage afforded by the patents, patent applications and/or other intellectual property on which the royalty streams or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments depend. The undetected or unremedied use of these intellectual rights by third parties, and/or the design-around or circumvention of these </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">intellectual property rights, could adversely affect the payments that the fund would receive.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medical Trade Secrets</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund’s right to receive payments in relation to royalty streams or other investments may depend, in part, on trade secrets, know-how and technology </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">which are not protected by patents. This information is typically protected through confidentiality agreements with parties that have access to such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">information, such as collaborative partners, licensors, employees and consultants. Any of these parties may breach the agreements and disclose or use </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the confidential information, and third parties might learn of or use the information in some other lawful or unlawful way. Any such disclosure or use of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the trade secrets, know-how or technology, whether lawful or unlawful, may adversely affect the payments that the fund would receive.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Foreign Jurisdiction Treatment of Medical Product Revenue Sources</div></div></div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">A significant a portion of the royalty streams and other investments of the fund may relate to income generated from the manufacture, use or sale of the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Products outside of the United States. The patents, patent applications and/or other intellectual property rights on which the royalty streams or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments depend may not extend in each jurisdiction in which such Products are made, used or sold, and thus it may not be possible to prevent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">competitors from exploiting competing products in such markets. In addition, foreign jurisdictions have differing procedures and/or standards for </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">prosecuting and/or maintaining patents, and may provide differing degrees of protection against the infringement or other unauthorized use of patents </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or other intellectual property. These variations among various international jurisdictions may affect the payments that the fund would receive.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">The Fund Depends on Third Parties to Maintain, Enforce and Defend Patent Rights and Other Intellectual Property Rights on which the Fund’s Right to </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Receive Payments May Depend</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">While the value of the fund’s investments, including royalty streams may be highly dependent on the prosecution, maintenance, defense and/or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">enforcement of the patents, patent applications and other intellectual property rights, in most, if not all cases, the fund has no ability to control these </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">activities and must rely on the willingness and ability of the licensor or its designee to undertake these activities. It is anticipated that the licensor or its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">designee will be in the best position to prosecute, maintain, enforce and/or defend the underlying patent and other intellectual property rights and that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the licensor or its designee will have the requisite business and financial motivation to do so. However, there can be no assurance that these third </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">parties will seek to vigorously prosecute, maintain, enforce or defend such rights, or that their efforts to do so will be successful. Any failure to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">successfully prosecute, maintain, enforce or defend such rights could have a material adverse effect on the respective investment and on the fund. The </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund may not have the ability to participate in patent or other proceedings brought by or against the licensor or its designee, and if it does, the fund </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could incur substantial litigation costs.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Changes in Intellectual Property Law</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Legislative, judicial and/or regulatory changes could occur during the term of the fund with respect to intellectual property matters that may adversely </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">affect its ability to derive income from the royalty streams and other investments. By way of example only, in the United States, patent reform legislation </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">is pending, that among other things, potentially could create additional risks with respect to validity and/or enforceability of patents.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Infringement of Third Party Patents and Other Intellectual Property Rights</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The commercial success of the Products depends, in part, on avoiding infringement of the intellectual property rights of others. Third party issued </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">patents or patent applications, trademarks, copyright, designs or other intellectual property rights claiming subject matter used to manufacture, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">market, sell and/or use the Products could exist. There can be no assurance that a license would be available for such subject matter if such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">infringement were to exist or, if offered, would be offered on reasonable and/or commercially feasible terms. Without such a license, it may be possible </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">for third parties to assert infringement or other intellectual property claims against a Licensee based on such patents or other intellectual property </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">rights. For instance, in the case of royalty streams, an adverse outcome in infringement proceedings could subject the Licensee to significant liabilities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to third parties, require disputed rights to be licensed from third parties or require the Licensee to cease or modify its manufacturing, marketing, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">distribution, sale and/or use of the Products, thereby reducing the royalty streams.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Finite Terms and Other Contractual Matters</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Rights to receive payments in respect of royalty streams typically have limited terms that are generally not subject to extension. Following the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">termination or expiration of the licensed intellectual property rights, or the termination or expiration of the license or contractual right to receive </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">payments under any agreement pursuant to which the fund has the right to receive payments, the fund may not receive any further revenue related to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the relevant Product, even if the Product continues to be sold. There also is a risk that disputes may arise with respect to the license agreements </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">pertaining to the patents, patent applications and/or other intellectual property rights on which the royalty streams depend that adversely affect the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund’s right or ability to collect payments.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Product Development Risks</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Though it is not the primary focus of the fund, the fund may in certain circumstances acquire some interests in Products undergoing development or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">clinical trials that have not yet received marketing approval by any regulatory authority. There can be no assurance that the FDA or other regulatory </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">authorities will approve or clear such Products, or that such Products will be brought to market in a timely manner or at all. The research, development, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">preclinical and clinical trials, manufacturing, labeling, and marketing related to a health care company’s products are subject to an extensive regulatory </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">approval process by regulatory agencies. The process for obtaining required regulatory approvals, including the required preclinical and clinical </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">testing, is very lengthy, costly, and uncertain. There can be no guarantee that, even after such time and expenditures, a company will be able to obtain </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the necessary regulatory approvals for clinical testing or for the manufacturing or marketing of any products or that the approved labeling will be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sufficient for favorable marketing and promotional activities. If a company is unable to obtain these approvals in a timely fashion, or if after approval for </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">marketing, a product is later shown to be ineffective or to have unacceptable side effects not discovered during testing, the company may experience </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">significant adverse effects, which in turn could negatively affect the performance of the fund.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Manufacturing and Supply Risk</div></div></div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Pharmaceutical products are manufactured in specialized facilities that, in major markets, require the approval of, and are subject to ongoing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulation by, regulatory agencies. For example, in the United States, Europe, and Japan (among other countries), drug product manufacturers must </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">achieve and maintain compliance with current Good Manufacturing Practices (“GMPs”) set forth in national regulations and harmonized guidelines </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">developed through the International Conference on Harmonization (“ICH”). To the extent these manufacturing standards are not met, manufacturing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">facilities may be closed or the production of applicable Products may be interrupted until such time as any deficiencies noted by such agencies are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">remedied. Any such closure or interruption may interrupt, for an indefinite period of time, the manufacture and distribution of a Product.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, manufacturers of such Products may rely on third parties for aspects of the manufacturing process, including packaging of the Products or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">supplying bulk raw material used in the manufacture of the Products. Licensees generally rely on a small number of key, highly specialized suppliers, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">manufacturers and packagers. Any interruptions, however minimal, in the operation of these facilities could have a material adverse effect on Product </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sales.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medical Enforcement Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Marketed medical products are subject to extensive postmarketing requirements, including laws and regulations related to advertising and promotion, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">safety surveillance and reporting, and price reporting. Failure to comply with these requirements could result in a range of enforcement actions that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could have a material adverse effect on Product sales, including investigations, administrative penalties, judicial oversight, and potentially even market </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">withdrawal.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Uncertainty Related to Healthcare Reimbursement and Reform Measures</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In both the U.S. and foreign markets, sales of a health care company’s products and its success depend in part on the availability of reimbursement from </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">third-party payors, including government health administration authorities (such as Medicare or Medicaid in the United States), private health insurers, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and other health management organizations. The revenues and profitability of life sciences companies may be affected by the continuing efforts of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">governmental and other payors to contain or reduce the costs of healthcare. Payors are increasingly challenging the prices charged for medical </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">products and services that they reimburse. If the Products of the companies the fund invests in are determined to not meet the criteria for coverage or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">reimbursement, these organizations may not reimburse the Products or may at lower levels. Significant uncertainty exists as to the reimbursement </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">status of newly approved products. There can be no assurance that a company's proposed product will be considered cost-effective or that adequate </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">third-party reimbursement will be available to enable a company to maintain price levels sufficient to realize an appropriate return on its investment in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">product development.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, changes in government legislation or regulation, changes in formulary or compendia listings, or changes in payors’ policies may reduce </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">reimbursement of such products. If reimbursement is reduced or is not available for a Product, sales would diminish and decrease cash flows available </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to satisfy royalty payment obligations, thereby harming the fund’s revenue. In addition, macroeconomic factors may affect the ability of patients to pay </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">for Products by, for example, diminishing the income patients have to pay out-of-pocket costs and/or obtain sufficient health insurance coverage.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Transportation Investments</div></div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">The Fund’s Aviation Investment Strategy Depends on the Continual Leasing and Remarketing of Aircrafts and Aircraft Engines</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">remarket or sell the aircraft or aircraft engine on favorable terms or without significant off-lease time and costs could be negatively affected by </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">depressed conditions in the commercial aviation industry, airline bankruptcies, the effects of terrorism, war, natural disasters and/or epidemic diseases </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">on airline passenger traffic trends, declines in the values of aircrafts and aircraft engines, and various other general market and competitive conditions </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may incur substantial losses.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">The Fund Could Incur Significant Costs Resulting from Aviation Lease Defaults</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">legal and other expenses associated with court or other governmental proceedings, particularly if the lessee is contesting the proceedings or is in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">bankruptcy. In addition, during any such proceedings the relevant aircraft or aircraft engine would likely not be generating revenue. The fund could also </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">incur substantial maintenance, refurbishment or repair costs if a defaulting lessee fails to pay such costs and where such maintenance, refurbishment </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">associated with any aircraft or aircraft engine that the fund repossesses and is unable to place immediately with another lessee.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">remarket the aircraft or aircraft engine effectively, including, in some cases, liens that the lessor might have incurred in connection with the operation of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or aircraft engine. It is expected that when a defaulting lessee is in bankruptcy, protective administration, insolvency or similar proceedings, additional </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or some of the obligations under the relevant lease.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">registered, repossession may be more difficult, especially if the jurisdiction permits the lessee or the other operator to resist deregistration. The fund </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may also incur significant costs in retrieving or recreating records required for registration of the aircraft or aircraft engine, and in obtaining the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Certificate of Airworthiness for an aircraft or aircraft engine. If, upon a lessee default, the fund incurs significant costs in connection with repossessing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a result of lessee defaults, the fund may incur substantial losses.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">The Fund May Experience Abnormally High Maintenance or Obsolescence Issues with Its Aircraft or Aircraft Engine</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Aircrafts and aircraft engines are long-lived assets, requiring long lead times to develop and manufacture, with particular types and models becoming </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">obsolete or less in demand over time when newer, more advanced aircrafts or aircraft engines are manufactured. The fund’s aircrafts and aircraft </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">engines have exposure to obsolescence, particularly if unanticipated events occur which shorten the life cycle of such aircraft or aircraft engine types. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">These events include but are not limited to government regulation, technological innovations or changes in airline customers’ preferences. These events </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Further, variable expenses like fuel, crew or aging aircraft or aircraft engine corrosion control or modification programs and airworthiness directives </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">these increased maintenance expenses and regulatory costs upon acquisition or remarketing of its aircraft or aircraft engine. Any of these expenses or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">costs may cause the fund to incur substantial losses.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;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> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">but not limited to, decreases in passenger demand, increases in fuel costs, government regulation and increases in interest rates. Operating leases </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">contractual cash flows at lease inception. In addition to factors linked to the commercial aviation industry generally, many other factors may affect the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">value of the aircraft or aircraft engine that the fund acquires and market rates for leases, including:</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the particular maintenance, operating history and documentary records of the aircraft or aircraft engine;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the number of operators using that type of aircraft or aircraft engine;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aircraft or aircraft engine age;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the regulatory authority under which the aircraft or aircraft engine is operated;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">any renegotiation of an existing lease on less favorable terms;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the negotiability of clear title free from mechanics’ liens and encumbrances;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;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 style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;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 style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">comparative value based on newly manufactured competitive aircrafts or aircraft engines; and</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the availability of spare parts.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">other unanticipated factors, could cause the fund to incur substantial losses.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Liability Risk as Lessor</div></div></div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Section 44112 of Title 49 of the United States Code (“</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Section 44112</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”) provides that lessors of aircrafts or aircraft engines generally will not be liable </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">for any personal injury or death, or damage to or loss of property (collectively, for purposes of this section, “</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Losses</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”); </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">provided</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> that such lessor is not in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">for injuries or damage to passengers or property, and such damage awards can be substantial. Because certain case law interpreting Section 44112 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">applicable (</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">e.g</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">., in a jurisdiction where an accident occurs), different rules may apply. For example, certain foreign jurisdictions may impose strict </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">death, injury and/or damages to public or private property (including consequences of terrorist attacks) or environmental damages. Operators and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">airlines may be unable or unwilling to indemnify the fund, resulting in losses to the fund.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks of Aircraft or Aircraft Engine Lease Receivables, Enhanced Equipment Trust Certificates, Aircraft Engine Mortgages and other Aviation-Related </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Asset-Backed Securities that Seek to Monetize Leases or Mortgages</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in airline/aircraft or aircraft engine assets, which may include aircraft or aircraft engine lease receivables (“</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">ALRs</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”). ALRs are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">airline companies. Unlike receivables backed by loans or interest rates, however, ALRs may entail a higher risk because of the nature of the underlying </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">assets, which are expensive to maintain and operate and are difficult to sell. Moreover, aircrafts and aircraft engines are subject to many laws in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">different jurisdictions, and the repossession of the aircraft or aircraft engine from lessees may be difficult and costly.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, the fund may invest in enhanced equipment trust certificates (“</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">EETCs</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”). Although any entity may issue EETCs, to date, U.S. airlines are the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">primary issuers. An airline EETC is an obligation secured by the aircrafts or aircraft engines as collateral. EETCs may be less liquid than other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Furthermore, the fund may invest in aviation-related asset-backed securities that seek to monetize leases or mortgages. Aircraft and aircraft engine </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">mortgage monetization notes and aircraft and aircraft engine lease monetization notes are asset-backed securities that represent interests in pools of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aircraft and aircraft engine mortgages or operating leases, respectively, on various aircraft and aircraft engine types of airlines located throughout the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">world. Holders of such securities bear various risks, including, among other things, lease rates and residual values, increased fuel costs, credit, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">technological, legal, regulatory, terrorism and geopolitical risks. Uncertainty and instability in certain countries in which airlines are located could have </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a material adverse effect on such securities as well. Additionally, with respect to lease monetization notes, portfolio management and the remarketing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and re-leasing of aircrafts and aircraft engines upon lease expiration or default is typically the responsibility of a designated servicer. No assurance can </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">favorable terms. Further, the value of aircraft or aircraft engine mortgage monetization notes and aircraft and aircraft engine lease monetization notes </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">pool, the originator of the financial obligations or the financial institution providing any credit enhancement, as well as by the expiration or removal of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">any credit enhancement. Finally, aircrafts and aircraft engines are subject to many laws in different jurisdictions, and the repossession of aircrafts and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aircraft engines from lessees or borrowers may be difficult and costly.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and aircraft engine mortgage monetization notes. However, such investments may not have the benefit of diversification across a wider range of aircraft </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and aircraft engine assets and airlines or credit enhancement as may be the case with aircraft and aircraft engine mortgage monetization notes.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Airline Regulation</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Administration (“</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">FAA</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”) and outside the U.S. by additional agencies.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Failure to Obtain Certain Required Licenses and Approvals</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund expects that certain aspects of its leases will require licenses, consents or approvals, including consents from governmental or regulatory </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">authorities for certain payments under its leases and for the import, export or deregistration of the aircraft or aircraft engine. Subsequent changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">applicable law or administrative practice may increase such requirements and governmental consent, once given, could be withdrawn. Furthermore, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Effects of the Aviation Security Act</div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The U.S. Aviation and Transportation Security Act (the “</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Aviation Security Act</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”), among other things, subjects substantially all aspects of U.S. civil </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aviation security to federal oversight and mandates enhanced security measures, including: (i) improved flight deck security; (ii) deployment of federal </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">air marshals on flights; (iii) improved security of airport perimeter access; (iv) airline crew security training; (v) augmented security screening of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">passengers, baggage, cargo, mail, employees and vendors; (vi) improved training and qualifications of security screening personnel; (vii) additional </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">provision of passenger data to U.S. Customs and Border Protection; and (viii) more detailed background checks on passengers and airline and airport </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">personnel. The implementation of the requirement that all checked baggage be screened by explosives detection systems has resulted, and may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">continue to result, in significant equipment acquisitions by the government and changes to baggage processing facilities and procedures. The changes </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">travel, which have adversely affected, and may to continue to adversely affect, the aviation industry in general. It is expected that the Aviation Security </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Act will continue to impose additional costs on the airlines and may adversely impact the performance of the fund.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Effect of Airworthiness Directives and Operating Restrictions</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The maintenance and operation of aircraft and aircraft engines are strictly regulated by the FAA in the U.S. and similar governmental authorities in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">foreign jurisdictions. These rules and regulations govern such matters as certification, registration, inspection, operation and maintenance procedures, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">personnel certification and record keeping. Periodically, the FAA issues airworthiness directives requiring changes to aircraft or aircraft engine </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">maintenance programs and procedures. Such airworthiness directives are issued from time to time with respect to aircraft and aircraft engines to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ensure that they remain airworthy and safe. Future regulatory changes may also increase the cost of operating and/or maintaining aircraft and aircraft </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">provisions as set forth in its lease. The cost of compliance with such requirements may be significant.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Environmental Regulations May Negatively Affect the Airline Industry</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Governmental regulations regarding aircraft and aircraft engine noise and emissions levels apply based on where the relevant aircraft or aircraft engine </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">is registered and operated. For example, jurisdictions throughout the world have adopted noise regulations which require all aircrafts and aircraft </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">engines to comply with noise level standards. In addition to the current requirements, the United States and the International Civil Aviation Organization </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">(the “</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">ICAO</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”), have specific standards for noise levels which applies to engines manufactured or certified on or after January 1, 2006. Currently, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">U.S. regulations would not require any phase-out of aircrafts or aircraft engines that qualified with the older standards applicable to engines </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">manufactured or certified prior to January 1, 2006, but the European Union has established a framework for the imposition of operating limitations on </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aircrafts and aircraft engines that do not comply with the new standards and has incorporated aviation-related emissions into the European Union’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Emission Trading Scheme beginning in 2013. These regulations could limit the economic life of the aircraft and aircraft engines, reduce their value, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">significant additional investments in the aircraft and aircraft engines to make them compliant.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition to more stringent noise restrictions, the United States and other jurisdictions are beginning to impose more stringent limits on nitrogen </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">oxide, carbon monoxide and carbon dioxide emissions from engines, consistent with current ICAO standards. These limits generally apply only to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">engines would increase over time. The ICAO is developing a global scheme based on market-based measures to limit CO2 emissions from international </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aviation to be implementing by 2020. Concerns over global warming could result in more stringent limitations on the operation of aircraft powered by </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">older, noncompliant engines, as well as newer engines.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">European countries generally have relatively strict environmental regulations that can restrict operational flexibility and decrease aircraft and aircraft </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">engine productivity. The European Union’s Emissions Trading Scheme requires that all of the emissions associated with international flights that land or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Kingdom doubled its air passenger duties, in recognition of the environmental costs of air travel and similar measures may be implemented in other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">jurisdictions as a result of environmental concerns.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">compliance aircraft and aircraft engines or, if engine modifications are permitted, require the fund to make significant additional investments in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aircraft and aircraft engines to make them compliant, which could cause the fund to incur substantial losses. Further, compliance with current or future </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulations, taxes or duties imposed to deal with environmental concerns could cause lessees to incur higher costs and to generate lower net revenues, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">resulting in a negative impact on their financial conditions. Consequently, such compliance may affect lessees’ ability to make rental and other lease </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">losses.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Cyclical Nature of the Maritime Sector</div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The maritime sector is cyclical, with volatility in charter rates, profitability and vessel values. Future demand for vessels will be dependent upon </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">continued economic growth in numerous international economies, and will be influenced by seasonal and regional changes in demand and changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">such vessels could materially adversely affect the fund’s investments. Historically, demand for vessels has generally been influenced by factors </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">including global and regional economic conditions, developments in international trade, changes in seaborne and other transportation patterns, such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">as port congestion and canal closures, currency exchange rates, armed conflict and terrorist activities including piracy, political developments, and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sanctions, embargoes and strikes. Additionally, supply of vessels has generally been influenced by factors including the number of expected new </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">building vessel deliveries, the scrapping rate of older vessels, access to traditional debt to finance the construction of new vessels, changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">environmental or other regulations that may limit the useful life of certain vessels.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include new building </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">prices, secondhand vessel values in relation to scrap prices, costs of fuel supplies and other operating costs, costs associated with classification </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">society surveys, normal maintenance and insurance coverage, the efficiency and age profile of the existing fleet in the market and government and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and degree of changes in industry conditions.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Maritime Risks</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The operation of an ocean-going vessel carries inherent risks. These risks include, among others, the possibility of marine disaster, piracy, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">environmental accidents, grounding, fire, explosions and collisions, cargo and property losses or damage, business interruptions caused by mechanical </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions and work stoppages or other labor </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">problems with crew members serving on vessels including crew strikes and/or boycotts.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">from or termination of charter contracts, governmental fines, penalties or restrictions on conducting business, higher insurance rates and damage to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">counterparties’ reputation and customer relationships generally.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">International Operations Risks</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">events such as mechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. All these hazards can result in death or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">injury to persons, increased costs, loss of revenues, loss or damage to property (including cargo), environmental damage, higher insurance rates, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">damage to the counterparty’s customer relationships, harm to its reputation as a safe and reliable operator and delay or rerouting. In addition, changing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These sorts of events could interfere with shipping routes and result in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">market disruptions which could have a material adverse effect on the fund’s financial condition, cash flows and ability to pay distributions.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Maritime Claims</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Equipment Investments</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in equipment loans or finance leases. Finance leases are equipment leases which, due to the terms of the lease, constitute loans </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with the lessee being the legal owner of the underlying equipment and the lessor being the secured party. Equipment loans and finance leases are debt </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">obligations secured by equipment owned and used by the borrower or lessee (as applicable). The fund may also invest in equipment where the fund is </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the owner of the relevant equipment and the lease is considered an operating lease rather than a financing lease. Investments in equipment loans, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">finance leases and operating leases have the following principal risks:</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Credit risk;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Interest rate risk;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div> <div><div style="clear:both;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Structural and legal risks;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Casualty losses and insurance risks;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Changes in supply and demand;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Decreases in equipment values;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Lessee and/or borrower defaults;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Negative developments in the economy that impact the lessee/borrower;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Business interruption caused by mechanical failure, human error or force majeure events;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Failure to obtain required licenses and approvals to operate equipment or underlying business;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Liability risk as owner of equipment;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Technological innovation rendering equipment obsolescence; and</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Remarketing risk.</div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Commercial Real Estate and Residential Real Estate Investments</div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Investments in Real Estate Investments and Real Estate Debt Generally</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund seeks to originate and acquire loans secured by commercial or residential real estate. Any deterioration of real estate fundamentals generally </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could negatively impact the fund’s performance by making it more difficult for borrowers to satisfy their debt payment obligations, increasing the default </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">risk applicable to borrowers and making it relatively more difficult for the fund to meet its investment objective. Real estate investments are subject to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">various risks, including: (i) economic and market fluctuations; (ii) changes in environmental, zoning and other laws; (iii) casualty or condemnation </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">losses; (iv) regulatory limitations on rents; (v) decreases in property values; (vi) changes in the appeal of properties to tenants; (vii) tenant defaults; (viii) </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">changes in supply and demand; (ix) energy supply shortages; (x) various uninsured or uninsurable risks; (xi) natural disasters; (xii) changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">government regulations (such as rent control); (xiii) changes in the availability of debt financing and/or mortgage funds which may render the sale or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">refinancing of properties difficult or impracticable; (xiv) increased mortgage defaults; (xv) increases in borrowing rates; and (xvi) negative developments </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in the economy that depress travel activity, demand and real estate values generally.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Debt investments are subject to credit and interest rate risks.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated with Commercial Real Estate Loans</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Loans on commercial real estate properties generally lack standardized terms, which may complicate their structure and increase due diligence costs. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Commercial real estate properties tend to be unique and are more difficult to value than residential properties. Commercial real estate loans also tend </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to have shorter maturities than residential mortgage loans and are generally not fully amortizing, which means that they may have a significant principal </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">condition and operating history of the property and the borrower, tax laws, prevailing economic conditions and the availability of credit for loans secured </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">by the specific type of property.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Investing in commercial real estate loans is subject to cyclicality and other uncertainties. The cyclicality and leverage associated with commercial real </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">estate loans also have historically resulted in periods, including significant periods, of adverse performance, including performance that may be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">materially more adverse than the performance associated with other investments. Commercial real estate loans generally are non-recourse to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the area, the attractiveness of properties to tenants, competition from other available space and the ability of the owner to pay leasing commissions, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">provide adequate maintenance and insurance, pay tenant improvement costs and make other tenant concessions; (iii) the failure or insolvency of tenant </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">businesses; (iv) interest rate levels and the availability of credit to refinance such loans at or prior to maturity; (v) compliance with regulatory </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">requirements and applicable laws, including environmental controls and regulations and (vi) increased operating costs, including energy costs and real </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with respect to commercial properties and such tenants may seek the protection of the bankruptcy laws, which can result in termination of lease </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">contracts. If the properties securing the loans do not generate sufficient income to meet operating expenses, debt service, capital expenditure and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">tenant improvements, the obligors under the loans may be unable to make payments of principal and interest in a timely fashion. Income from and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">availability of financing for owners and tenants and the impact of and costs of compliance with environmental controls and regulations.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated with Residential Mortgage Loans</div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in loans secured by residential real estate, including potentially mortgages made to borrowers with lower credit scores. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Accordingly, such mortgage loans may be more sensitive to economic factors that could affect the ability of borrowers to pay their obligations under the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">mortgage loans. A decline or an extended flattening of home prices and appraisal values may result in increases in delinquencies and losses on </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">residential mortgage loans, particularly with respect to second homes and investor properties and with respect to any residential mortgage loan where </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the aggregate loan amount (including any subordinate liens) is close to or greater than the related property value.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Another factor that may result in higher delinquency rates is the increase in monthly payments on adjustable-rate mortgage loans. Borrowers with </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">adjustable payment mortgage loans will be exposed to increased monthly payments when the related mortgage interest rate adjusts upward from the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Certain residential mortgage loans may be structured with negative amortization features. Negative amortization arises when the mortgage payment in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">time. Because the related mortgagors may be required to make a larger single payment upon maturity, the default risk associated with such mortgage </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">loans may be greater than that associated with fully amortizing mortgage loans.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated with Mezzanine Investments</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in mezzanine debt which has significant leverage ranking ahead of the fund’s investment. While the Subadvisor anticipates that the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investment, and will usually benefit from cross-default provisions, some or all of such terms may not be part of particular investments. The Subadvisor </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">anticipates that the fund’s usual security for its mezzanine investments will be pledges of ownership interests, directly and/or indirectly, in a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or any particular investment will be achieved. To protect its original investment and to gain greater control over the underlying assets, the fund may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated With B-notes and Preferred Equity Interests</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">privately negotiated structures. To the extent the fund holds subordinated debt or mezzanine tranches of a borrower’s capital structure or preferred </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">equity interests, such investments and the fund’s remedies with respect thereto, including the ability to foreclose on any collateral securing such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">intercreditor and/or participation agreement provisions, which will expose the fund to greater risk of loss.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">As the terms of such loans and investments are subject to contractual relationships among lenders, co-lending agents and others, they can vary </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">significantly in their structural characteristics and other risks. For example, the rights of holders of B-notes to control the process following a borrower </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">default may vary from transaction to transaction. Further, B-notes typically are secured by a single property and accordingly reflect the risks associated </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with significant concentration.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated with Construction Loans</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in mortgage loans used to finance the cost of construction or rehabilitation of a property, including ground up construction. Such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">construction lending may expose the fund to increased lending risks. Construction loans generally expose a lender to greater risk of non‑payment and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">loss than permanent commercial mortgage loans because repayment of the loans often depends on the borrower’s ability to secure permanent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">“take‑out” financing, which requires the successful completion of construction and stabilization of the project, or operation of the property with an </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">income stream sufficient to meet operating expenses, including debt service on such replacement financing. For construction loans, increased risks </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">affected by unanticipated construction delays and cost over‑runs. Construction delays and cost over-runs may result from increasing costs or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">shortages of skilled labor and/or framing, concrete, steel and other building materials, environmental damage, delays in obtaining the requisite </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">approvals, permits, licenses or certifications from the relevant authorities, legal actions, work stoppages, operational issues relating to construction, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">budget overruns and lack of financing. Construction loans typically involve an expectation that the borrower’s sponsors will contribute sufficient equity </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">inability to complete construction. Construction loans also expose the lender to additional risks of contractor non‑performance, or borrower disputes </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with contractors resulting in mechanic’s or materialmen’s liens on the property and possible further delay in construction.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 bre<div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ach 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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Furthermore, construction</div> loans may have multiple lenders and if another lender fails to fund its obligations, the fund could be faced with the choice of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">either funding for that defaulting lender or suffering a delay or protracted interruption in the progress of construction.</div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Consumer-Related Asset-Backed Securities</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;"><div style="font-weight:bold;display:inline;">Asset-Backed Securities.</div></div></div> <br/><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;"><div style="font-weight:bold;display:inline;">See Asset-Backed Securities below.</div></div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Consumer Finance Industry Regulatory Environment</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">including supervision and licensing by numerous governmental entities. These laws and regulations may create significant constraints on the fund’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">consumer finance investments and result in significant costs related to compliance. Failure to comply with these laws and regulations could impair the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ability of the fund to continue to make such investments and result in substantial civil and criminal penalties, monetary damages, attorneys’ fees and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">costs, possible revocation of licenses, and damage to reputation, brand and customer relationships.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The Dodd-Frank Act imposes significant regulatory oversight on the financial industry and grants the Consumer Financial Protection Bureau, or the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">CFPB, extensive rulemaking and enforcement authority, all of which may substantially impact the fund’s consumer finance investments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may also invest in other consumer debt and specialty finance markets, including, but not limited to, credit card receivables, asset-backed </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulatory relief transactions, litigation finance, royalty transactions, equipment (e.g., renewable energy, construction, information technology, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">medical, logistics) and insurance-linked contracts.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Noncompliance with Consumer Financial Protection Laws</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Associated with Corporate Asset-Based Credit</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in asset-based corporate credit secured by real estate, equipment, receivables, inventory and intellectual property rights. A </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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) </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">an economic downturn, (iii) poor performance by their management teams, (iv) legal, tax or regulatory changes, (v) a change in the competitive </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">environment, or (vi) a force majeure event. The companies may be operating at a loss or have significant variations in operating results, or may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">otherwise be experiencing financial distress even when the Subadvisor expects them to remain stable. Additionally, the companies may require </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">For further information, see “Asset-Backed Securities” below.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Liquid Securitized Credit</div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Associated with Corporate Asset-Based Credit</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">For the risks of investing in asset-back securities, see “Asset-Backed Securities” below.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Commercial Mortgage-Backed Securities</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Collateral underlying CMBS generally consists of mortgage loans secured by income producing property, such as regional malls, other retail space, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">office buildings, industrial or warehouse properties, hotels, rental apartments, nursing homes, senior living centers and self-storage properties. The </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund may invest directly in CMBS. Performance of a commercial mortgage loan depends primarily on the net income generated by the underlying </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">mortgaged property. The market value of a commercial property similarly depends on its income-generating ability. As a result, income generation will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Most commercial mortgage loans underlying CMBS are effectively non-recourse obligations of the borrower, meaning that there is no recourse against </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and interest owed on such mortgage loans, payments on the subordinated classes of the related CMBS are likely to be adversely affected. The ultimate </div></div></div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the mortgage note, or the foreclosure (or deed in lieu of foreclosure) of the mortgage encumbering the property and subsequent liquidation of the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">property, its physical condition and financial performance, environmental risks and governmental disclosure requirements with respect to the condition </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">used to make payments to others, maintain insurance coverage, pay taxes or pay maintenance costs. Such diverted revenue is generally not recoverable </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">underlying commercial mortgage loans. The CMBS holder typically has no right directly to enforce compliance by the borrowers with the terms of the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">nor to move directly against the collateral supporting the related loans.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">At any one time, a portfolio of CMBS may be backed by commercial mortgage loans with disproportionately large aggregate principal amounts secured </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">areas, such as adverse economic conditions, adverse events affecting industries located in such areas and natural hazards affecting such areas, than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">would be the case for a pool of mortgage loans having more diverse property locations.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Residential Mortgage-Backed Securities</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Holders of RMBS bear various risks, including credit, market, interest rate, structural and legal risks. RMBS represent interests in pools of residential </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">mortgage loans secured by one to four family residential mortgage loans. Residential mortgage loans may be prepaid at any time. Residential mortgage </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">loans are obligations of the borrowers thereunder only and are not typically insured or guaranteed by any other person or entity, although such loans </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may be securitized by government agencies and the securities issued may be guaranteed. The rate of defaults and losses on residential mortgage loans </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">will be affected by a number of factors, including general economic conditions and those in the geographic area where the related mortgaged property </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">borrower. If a residential mortgage loan is in default, foreclosure of such residential mortgage loan may be a lengthy and difficult process, and may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">involve significant expenses. Furthermore, the market for defaulted residential mortgage loans or foreclosed single-family properties may be very </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">limited.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">At any one time, a portfolio of RMBS may be backed by residential mortgage loans with disproportionately large aggregate principal amounts secured </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">areas, such as adverse economic conditions, adverse events affecting industries located in such areas and natural hazards affecting such areas, than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">would be the case for a pool of mortgage loans having more diverse property locations.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Prepayments on the underlying residential mortgage loans in an issue of RMBS will be influenced by the prepayment provisions of the related mortgage </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">notes and may also be affected by a variety of economic, geographic and other factors, including the difference between the interest rates on the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">underlying residential mortgage loans (giving consideration to the cost of refinancing) and prevailing mortgage rates and the availability of refinancing. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">RMBS are particularly susceptible to prepayment risks as they generally do not contain prepayment penalties and a reduction in interest rates will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">increase the prepayments on the RMBS, resulting in a reduction in yield to maturity for holders of such securities.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated With “B-pieces”</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the most subordinated tranches issued by a CMBS, RMBS or other securitization. Although CMBS and RMBS generally have the benefit of first ranking </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">distributions only after more senior classes of CMBS and RMBS have been paid in full, and receive interest distributions only after the interest </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">senior classes may cause the repayment of principal of such “B-pieces” to be delayed and/or reduced. Generally, all principal payments received on the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">interest that might otherwise be made by the related servicer.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">CLOs</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">recognized on such securities or assets will no longer inure to the benefit of the fund.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The market value of CLOs and other structured vehicles will generally fluctuate with, among other things, the financial condition of the obligors on the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">underlying debt obligations or, with respect to synthetic securities, of the obligors on or issuers of the reference obligations, general economic </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">conditions, the condition of certain financial markets, political events, developments or trends in any particular industry and changes in prevailing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">interest rates. The performance of CLOs and other structured vehicles will be adversely affected by macroeconomic factors, including the following: (i) </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">general economic conditions affecting capital markets and participants therein; (ii) the economic downturns and uncertainties affecting economies and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">capital markets worldwide; (iii) concerns about financial performance, accounting and other issues relating to various publicly traded companies; and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">(iv) recent and proposed changes in accounting and reporting standards and bankruptcy legislation. In addition, interest payments on CLOs and other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">structured vehicles (other than the most senior tranche or tranches of a given issue) are generally subject to deferral. If distributions on the collateral </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">underlying a CLO and other structured vehicle security are insufficient to make payments on the CLOs and other structured vehicles, no other assets will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">be available for payment of the deficiency and following realization of the underlying assets, the obligations of the CLO or other structured vehicle issuer </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to pay such deficiency will be extinguished. CLOs and other structured vehicles (particularly the subordinated interests) may provide that, to the extent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">(including the fund) will not have available to them any associated default remedies.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">CMOs</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in mortgage-backed securities called CMOs. CMOs are issued in separate classes with different stated maturities. As the mortgage </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">pool experiences prepayments, the pool pays off investors in classes with shorter maturities first. By investing in CMOs, the fund may manage the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">prepayment risk of mortgage-backed securities. However, prepayments may cause the actual maturity of a CMO to be substantially shorter than its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">stated maturity.</div></div></div><div style="line-height:12.0pt;margin-top:5pt;text-align:left"><div style="margin-top:5pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Asset-Backed Securities</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The investment characteristics of ABS differ from traditional debt securities. Among the major differences are that interest and principal payments are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">not have the benefit of the same security interest in the related collateral (e.g., automobile loans or leases, student loans or other consumer loans). </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">There is a possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on these securities. Further, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">unlike traditional debt securities, which may pay a fixed rate of interest until maturity when the entire principal amount comes due, payments on certain </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ABS include both interest and a partial payment of principal. This partial payment of principal may be composed of a scheduled principal payment as </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">well as an unscheduled payment from the voluntary prepayment, refinancing or foreclosure of the underlying collateral. As a result of these </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">unscheduled payments of principal, or prepayments on the underlying collateral, the price and yield of ABS can be adversely affected.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">than mortgage loans and is less likely to experience substantial prepayments. As with mortgage-backed securities, ABS are often backed by a pool of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">assets representing the obligations of a number of different parties and use credit enhancement techniques such as letters of credit, guarantees or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the servicing agent for the collateral pool, the originator of the financial obligations or the financial institution providing any credit enhancement, as well </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">as by the expiration or removal of any credit enhancement.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Residual Interests</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may make substantial investments in unsecured equity tranches and equivalent junior subordinate securities of structured finance vehicles. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Such residuals will represent subordinated interests in the relevant structured finance vehicle only and are not secured by any assets of such structured </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">finance vehicle. Residuals will be subordinated to all other securities of the structured finance vehicle and all other amounts due under the priority of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div></div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">creditors, whether secured or unsecured and known or unknown, of the structured finance vehicle.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The investment in residuals will expose the fund to the highly leveraged investments in the collateral securing the other obligations of, and securities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issued by, the structured finance vehicle. Therefore, the market value of these investments would be anticipated to be significantly affected by, among </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">vehicle structures, changes in the value of the residuals could be greater than the changes in the values of the underlying collateral, the assets </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">constituting which are subject to, among other things, credit and liquidity risk. Accordingly, “equity” or subordinated interests and note classes may not </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the assets, prepayment on assets and availability, price and interest rates of assets. Investors must consider with particular care the risks of leverage in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">residuals because, although the use of leverage creates an opportunity for substantial returns for the fund on the residuals, it increases substantially </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">is adversely affected by market developments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in the context of a more senior position.</div></div></div><div style="line-height:12.0pt;margin-top:5pt;text-align:left"><div style="margin-top:5pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Credit Risk Transfers and Significant Risk Transfer Assets</div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Regulatory Capital Relief Investments</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Regulatory capital relief investments are credit risk transfers (“CRTs”) or significant risk transfers (“SRTs”). These transactions enable a bank or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issuer to transfer the credit risk associated with a pool of underlying obligations (or “reference assets”) to investors, such as the fund, in order to obtain </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulatory capital relief, risk limit relief, and/or credit risk hedging with respect to the reference assets. Regulatory capital relief investments are often </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">structured as credit-linked notes. The fund intends to invest in credit-linked notes issued by large multi-national North American and European banks. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">These credit-linked notes may reference a variety of bank balance sheets assets, including revolving credit facilities and term loans backed by large, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">medium and small enterprises, commercial real estate loans, auto loans, mortgages, equipment loans and leases, trade receivables and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">farm/agricultural loans, among others. The fund may also enter into regulatory capital relief trades with other financial institutions.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Under these transactions, a third-party investor (e.g., the fund), agrees to absorb losses on a designated loan portfolio in exchange for a protection </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">payment, which for a credit-linked note would be structured as an interest coupon. The coupon is typically floating rate, with the coupon spread </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">negotiated before closing based on the level of perceived credit protection the bank is receiving relative to the level of risk the investor is undertaking. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">By transferring the risk of credit losses from these assets away from a bank's balance sheet, the bank can reduce the amount of regulatory capital it is </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">required to hold against the reference assets without having to take actions such as selling assets or raising equity capital.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Under any such trades into which the fund enters, the fund will be exposed to the credit risk of the underlying portfolio, and if the loans in the portfolio </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">default – which may be more likely if there is a general deterioration in credit markets – the principal of the fund’s credit-linked notes will be used to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">cover the losses. There may be a risk that the international regulatory framework for banks (known as 'Basel III') of the Bank for International </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Settlements, when fully implemented, may discourage such regulatory capital relief trades and/or may force banks to unwind some or all existing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">transactions. Most existing credit-linked note transactions can be unwound at the option of the issuer (typically a bank) to address changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulation, in which case the then-outstanding principal balance of an investor’s credit-linked notes would be returned to the investor, net of amounts </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">previously drawn to cover losses.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Specialty Finance</div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Litigation Finance</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">secured by litigation proceeds, or where the recipient of financing is not obligated to make any payment unless and until litigation proceeds are actually </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">favor. Other risks the fund may face in connection with these financing activities include, without limitation: (i) losses from terminated or rejected </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">collect, or timing uncertainty relating to collection on, judgments or awards; (iv) lack of control over decisions of lawyers acting pursuant to their </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">professional duties in connection with formulating and implementing litigation strategies or otherwise; (v) expenses and uncertainties involving reliance </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">on outside counsel and experts; (vi) changes in law, regulations or professional standards on such financing activities; (vii) poor case selection and case </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div></div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">settlement; (xii) general competition and industry-related risks; (xiii) conflicts of interest; and (xiv) issues associated with the treatment of these types of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments for tax purposes.</div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Changes in U.S. Law</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Changes in the state and U.S. federal laws applicable to the fund, including changes to state and U.S. federal tax laws, or applicable to the Advisor, the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Subadvisor and other securities or instruments in which the fund may invest, may negatively affect the fund’s returns to Shareholders. The fund may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">need to modify its investment strategy in the future in order to satisfy new regulatory requirements or to compete in a changed business environment.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Credit and counterparty risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Factors - Hedging, Derivatives, and Other Strategic Transactions Risk”), or a borrower of the fund’s securities will be unable or unwilling to make timely </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">principal, interest, or settlement payments, or otherwise honor its obligations. Credit risk associated with investments in fixed-income securities relates </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">subject to varying degrees of risk that the issuers of the securities will have their credit ratings downgraded or will default, potentially reducing such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issuers of the securities are corporations, domestic or foreign governments, or their subdivisions or instrumentalities. U.S. government securities are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the United States. For example, issuers of many types of U.S. government securities (e.g., the Federal Home Loan Mortgage Corporation (“Freddie </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Mac”), Federal National Mortgage Association (“Fannie Mae”), and Federal Home Loan Banks), although chartered or sponsored by Congress, are not </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">funded by congressional appropriations, and their fixed-income securities, including asset-backed and mortgage-backed securities, are neither </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">statutory process with the objective of returning the entities to normal business operations. It is unclear what effect this conservatorship will have on the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">manager may have to assess the risk of the security itself. Asset-backed securities, whose principal and interest payments are supported by pools of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">other assets, such as credit card receivables and automobile loans, are subject to further risks, including the risk that the obligors of the underlying </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">assets default on payment of those assets.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Service, Inc. or BB or lower by S&P Global Ratings or Fitch Ratings, as applicable, at the time of investment, or determined by a manager to be of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">comparable quality to securities so rated) are subject to increased credit risk. The sovereign debt of many foreign governments, including their </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">subdivisions and instrumentalities, falls into this category. Below-investment-grade securities offer the potential for higher investment returns than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">higher-rated securities, but they carry greater credit risk: their issuers’ continuing ability to meet principal and interest payments is considered </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">speculative, they are more susceptible to real or perceived adverse economic and competitive industry conditions, and they may be less liquid than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">higher-rated securities.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">contracts) and engages to a significant extent in the lending of fund securities or the use of repurchase agreements. OTC derivatives transactions can </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or made only after the fund has incurred the costs of litigation. While the Subadvisor intends to monitor the creditworthiness of contract counterparties, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Creditor Risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">respect to collateral securing the obligations. Additionally, adverse credit events with respect to any underlying property, such as missed or delayed </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">payment of interest and/or principal, bankruptcy, receivership or distressed exchange, can significantly diminish the value of an investment in any such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">property.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div>
<div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Distressed Loans Risk.</div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in structured products collateralized by below investment grade or distressed loans or securities. Investments in such structured </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">products are subject to the risks associated with below investment grade securities. Such securities are characterized by high risk. It is likely that an </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">economic recession could severely disrupt the market for such securities and may have an adverse impact on the value of such securities.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Distribution Risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">There can be no assurance that quarterly distributions paid by the fund to Shareholders will be maintained at current levels or increase over time. The </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">are declared at the discretion of the Board.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> Shareholders who periodically receive the payment of a dividend or other distribution consisting of a return </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">distribution from the fund is net profit.</div></div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Economic and market events risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">domestic and foreign. These events have included, but are not limited to: bankruptcies, corporate restructurings, and other similar events; bank </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">failures; governmental efforts to limit short selling and high frequency trading; measures to address U.S. federal and state budget deficits; social, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">political, and economic instability in Europe; economic stimulus by the Japanese central bank; dramatic changes in energy prices and currency </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">exchange rates; and China’s economic slowdown. Interconnected global economies and financial markets increase the possibility that conditions in one </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">country or region might adversely impact issuers in a different country or region. Both domestic and foreign equity markets have experienced increased </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">volatility and turmoil, with issuers that have exposure to the real estate, mortgage, and credit markets particularly affected. Financial institutions could </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">suffer losses as interest rates rise or economic conditions deteriorate.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, relatively high market volatility and reduced liquidity in credit and fixed-income markets may adversely affect many issuers worldwide. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Actions taken by the U.S. Federal Reserve (Fed) or foreign central banks to stimulate or stabilize economic growth, such as interventions in currency </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">markets, could cause high volatility in the equity and fixed-income markets. Reduced liquidity may result in less money being available to purchase raw </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">materials, goods, and services from emerging markets, which may, in turn, bring down the prices of these economic staples. It may also result in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">emerging-market issuers having more difficulty obtaining financing, which may, in turn, cause a decline in their securities prices.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In response to certain economic conditions, including periods of high inflation, governmental authorities and regulators may respond with significant </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fiscal and monetary policy changes such as raising interest rates. The fund may be subject to heightened interest rate risk when the Federal Reserve </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Board (Fed) raises interest rates. Recent and potential future changes in government monetary policy may affect interest rates. It is difficult to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">accurately predict the timing, frequency or magnitude of potential interest rate increases or decreases by the Fed and the evaluation of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">rate and equivalent rates, such increases generally will cause market interest rates to rise and could cause the value of a fund’s investments, and the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund’s net asset value (NAV), to decline, potentially suddenly and significantly. As a result, the fund may experience high redemptions and, as a result, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">increased portfolio turnover, which could increase the costs that the fund incurs and may negatively impact the fund’s performance.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, as the Fed increases the target Fed funds rate, any such rate increases, among other factors, could cause markets to experience continuing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">high volatility. A significant increase in interest rates may cause a decline in the market for equity securities. These events and the possible resulting </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">market volatility may have an adverse effect on the fund.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Political turmoil within the United States and abroad may also impact the fund. Although the U.S. government has honored its credit obligations, it </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">remains possible that the United States could default on its obligations. While it is impossible to predict the consequences of such an unprecedented </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">event, it is likely that a default by the United States would be highly disruptive to the U.S. and global securities markets and could significantly impair the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">government services, which could negatively affect the U.S. economy, decrease the value of many fund investments, and increase uncertainty in or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">impair the operation of the U.S. or other securities markets. In recent years, the U.S. renegotiated many of its global trade relationships and imposed or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">markets likely will be significantly disrupted. On January 31, 2020, the United Kingdom (UK) left the EU, commonly referred to as “Brexit,” the UK </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">has already resulted in volatility in European and global markets. There remains significant market uncertainty regarding Brexit’s ramifications, and the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">range and potential implications of possible political, regulatory, economic, and market outcomes are difficult to predict.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">A widespread health crisis such as a global pandemic could cause substantial market volatility, exchange trading suspensions and closures, which may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">lead to less liquidity in certain instruments, industries, sectors or the markets generally, and may ultimately affect fund performance. For example, the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">coronavirus (COVID-19) pandemic has resulted and may continue to result in significant disruptions to global business activity and market volatility due </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to disruptions in market access, resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">others. While many countries have lifted some or all restrictions related to the coronavirus (COVID-19) and the United States ended the public health </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">emergency and national emergency declarations relating to the coronavirus (COVID-19) pandemic on May 11, 2023, the continued impact of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">coronavirus (COVID-19) and related variants is uncertain. The impact of a health crisis and other epidemics and pandemics that may arise in the future, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could affect the global economy in ways that cannot necessarily be foreseen at the present time. A health crisis may exacerbate other pre-existing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">political, social and economic risks. Any such impact could adversely affect the fund’s performance, resulting in losses to your investment.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Political and military events, including in Ukraine, North Korea, Russia, Venezuela, Iran, Syria, and other areas of the Middle East, and nationalist unrest </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in Europe and South America, also may cause market disruptions.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">As a result of continued political tensions and armed conflicts, including the Russian invasion of Ukraine commencing in February of 2022, the extent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">imposed economic sanctions on certain Russian corporate entities and individuals, and certain sectors of Russia’s economy, which may result in, among </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Russian securities, property or interests. These sanctions could also result in the immediate freeze of Russian securities and/or funds invested in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">prohibited assets, impairing the ability of a fund to buy, sell, receive or deliver those securities and/or assets. These sanctions or the threat of additional </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sanctions could also result in Russia taking counter measures or retaliatory actions, which may further impair the value and liquidity of Russian </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">securities. The United States and other nations or international organizations may also impose additional economic sanctions or take other actions that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may adversely affect Russia-exposed issuers and companies in various sectors of the Russian economy. Any or all of these potential results could lead </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Russia’s economy into a recession. Economic sanctions and other actions against Russian institutions, companies, and individuals resulting from the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ongoing conflict may also have a substantial negative impact on other economies and securities markets both regionally and globally, as well as on </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sanctions on Belarus for its support of Russia’s invasion of Ukraine. Additional sanctions may be imposed on Belarus and other countries that support </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Russia. Any such sanctions could present substantially similar risks as those resulting from the sanctions imposed on Russia, including substantial </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">negative impacts on the regional and global economies and securities markets.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">various factors, including unexpected shifts in the domestic or global economy, and a fund’s investments may be affected, which may reduce a fund’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">performance. Further, inflation may lead to the rise in interest rates, which may negatively affect the value of debt instruments held by the fund, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">resulting in a negative impact on a fund’s performance. Generally, securities issued in emerging markets are subject to a greater risk of inflationary or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">deflationary forces, and more developed markets are better able to use monetary policy to normalize markets.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Effect of the Advisor’s Incentive Fee</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund will allocate the Incentive Fee to the Advisor based on returns to the Shareholders. The Incentive Fee is asymmetric — it grants the Advisor a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">priority allocation of gains without requiring the Advisor to accept a corresponding (or any) priority allocation of losses. Accordingly, the Incentive Fee </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may create an incentive for the Advisor to make investments that are risky or more speculative than would be the case in the absence of such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">arrangement. The way in which the Incentive Fee payable to the Advisor is determined may encourage it to use leverage to increase the return on the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund’s investments. In addition, the fact that the Management Fee is payable based upon the fund’s Managed Assets, which would include any </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">borrowings for investment purposes, may encourage the Advisor to use leverage to make additional investments. Under certain circumstances, the use </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">of leverage may increase the likelihood of default, which would disfavor Shareholders. Such a practice could result in the fund’s investing in more </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">speculative securities than would otherwise be in its best interests, which could result in higher investment losses, particularly during cyclical economic </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">downturns.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">ESG integration risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The manager considers ESG factors that it deems relevant or additive, along with other material factors and analysis, when managing the fund. The </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">situations, the extent to which these ESG factors may be applied according to the manager’s integrated investment process may not include </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">U.S. Treasuries, government securities, or other asset classes. ESG factors may include, but are not limited to, matters regarding board diversity, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">climate change policies, and supply chain and human rights policies. Incorporating ESG criteria and making investment decisions based on certain ESG </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">characteristics, as determined by the manager, carries the risk that the fund may perform differently, including underperforming, funds that do not </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">utilize ESG criteria, or funds that utilize different ESG criteria. Integration of ESG factors into the fund’s investment process may result in a manager </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">making different investments for the fund than for a fund with a similar investment universe and/or investment style that does not incorporate such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">considerations in its investment strategy or processes, and the fund’s investment performance may be affected. Because ESG factors are one of many </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">considerations for the fund, the manager may nonetheless include companies with low ESG characteristics or exclude companies with high ESG </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">characteristics in the fund’s investments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The ESG characteristics utilized in the fund’s investment process may change over time, and different ESG characteristics may be relevant to different </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments. Although the manager has established its own structure to oversee ESG integration in accordance with the fund’s investment objective and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">strategies, successful integration of ESG factors will depend on the manager’s skill in researching, identifying, and applying these factors, as well as on </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the availability of relevant data. The method of evaluating ESG factors and subsequent impact on portfolio composition, performance, proxy voting </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">decisions and other factors, is subject to the interpretation of the manager in accordance with the fund’s investment objective and strategies. ESG </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">factors may be evaluated differently by different managers, and may not carry the same meaning to all investors and managers. The manager may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">employ active shareowner engagement to raise ESG issues with the management of select portfolio companies. The regulatory landscape with respect </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to ESG integration.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Fixed-</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">income securities risk</div></div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">quality risk.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Interest-</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">rate risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Fixed-income securities are affected by changes in interest rates. When interest rates decline, the market value of fixed-income </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">securities generally can be expected to rise. Conversely, when interest rates rise, the market value of fixed-income securities generally can be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">maturity of a security measures the time until final payment is due. Duration measures sensitivity more accurately than maturity because it takes </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">into account the time value of cash flows generated over the life of a debt security.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In response to certain economic conditions, including periods of high inflation, governmental authorities and regulators may respond with significant </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fiscal and monetary policy changes such as raising interest rates. The fund may be subject to heightened interest rate risk when the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Federal Reserve </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Board (</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Fed</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">)</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> raises interest rates. Recent and potential future changes in government monetary policy may affect interest rates. It is difficult to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">accurately predict the timing, frequency or magnitude of potential interest rate increases or decreases by the Fed and the evaluation of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">funds rate and equivalent rates, such increases generally will cause market interest rates to rise and could cause the value of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> fund’s investments, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and the fund’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">net asset value (</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">NAV</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">)</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">, to decline, potentially suddenly and significantly. As a result, the fund may experience high redemptions and</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">,</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">as </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a result,</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> increased portfolio turnover, which could increase the costs that the fund incurs and may negatively impact the fund’s performance.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In certain market conditions, governmental authorities and regulators may considerably lower interest rates, which, in some cases could result in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">negative interest rates. These actions, including their reversal or potential ineffectiveness, could further increase volatility in securities and other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">maturity, the fund would generate a negative return on that investment. Similarly, negative rates on investments by money market funds and similar </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">cash management products could lead to losses on investments, including on investments of the fund’s uninvested cash.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Credit </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">quality risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Fixed-income securities are subject to the risk that the issuer of the security will not repay all or a portion of the principal </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">borrowed and will not make all interest payments. If the credit quality of a fixed-income security deteriorates after </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> fund has purchased the security, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">deteriorate as a result of poor management decisions, competitive pressures, technological obsolescence, undue reliance on suppliers, labor </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issues, shortages, corporate restructurings, fraudulent disclosures, or other factors. Funds that may invest in lower-rated fixed-income securities, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">commonly referred to as junk securities, are riskier than funds that may invest in higher-rated fixed-income securities.</div></div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Investment-</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">grade fixed</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">-</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">income securities in the lowest rating category risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Investment-grade fixed-income securities in the lowest rating </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">category (such as Baa by Moody’s Investors Service, Inc. or BBB by S&P Global Ratings or Fitch Ratings, as applicable, and comparable unrated </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">securities) involve a higher degree of risk than fixed-income securities in the higher rating categories. While such securities are considered </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investment-grade quality and are deemed to have adequate capacity for payment of principal and interest, such securities lack outstanding </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investment characteristics and have speculative characteristics as well. For example, changes in economic conditions or other circumstances are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">more likely to lead to a weakened capacity to make principal and interest payments than is the case with higher-grade securities.</div></div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Prepayment of </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">principal risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Many types of debt securities, including floating-rate loans, are subject to prepayment risk. Prepayment risk is the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div></div></div><div style="line-height:12.0pt;margin-left:12pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may have to invest the proceeds in securities with lower yields. Securities subject to prepayment risk can offer less potential for gains when the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">credit quality of the issuer improves.</div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Extension </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Extension risk is the danger that borrowers will defer prepayments due to market conditions. Extension risk is generally a concern </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in secondary market, structured-credit product investments. For instance, rising interest rates might discourage homeowners from refinancing their </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">mortgages, which reduces prepayment flows. That extends the duration of the loans in a mortgage-backed security beyond what the valuation and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Foreign securities risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Funds that invest in securities traded principally in securities markets outside the United States are subject to additional and more varied risks, as the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">value of foreign securities may change more rapidly and extremely than the value of U.S. securities. Less information may be publicly available </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regarding foreign issuers, including foreign government issuers. Foreign securities may be subject to foreign taxes and may be more volatile than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">U.S. securities. Currency fluctuations and political and economic developments may adversely impact the value of foreign securities. The securities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">markets of many foreign countries are relatively small, with a limited number of companies representing a small number of industries. Additionally, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issuers of foreign securities may not be subject to the same degree of regulation as U.S. issuers. Reporting, accounting, and auditing standards of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">foreign countries differ, in some cases significantly, from U.S. standards. There are generally higher commission rates on foreign portfolio transactions, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">transfer taxes, higher custodial costs, and the possibility that foreign taxes will be charged on dividends and interest payable on foreign securities, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">some or all of which may not be reclaimable. Also, adverse changes in investment or exchange control regulations (which may include suspension of the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ability to transfer currency or assets from a country); political changes; or diplomatic developments could adversely affect a fund’s investments. In the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">event of nationalization, expropriation, confiscatory taxation, or other confiscation, the fund could lose a substantial portion of, or its entire investment </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in, a foreign security. Foreign countries, especially emerging market countries, also may have problems associated with settlement of sales. Such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">difficulties and delays in enforcing a judgment in a foreign court resulting in potential losses to the fund. Some of the foreign securities risks are also </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">applicable to funds that invest a material portion of their assets in securities of foreign issuers traded in the United States.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Currency risk.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Currency risk is the risk that fluctuations in exchange rates may adversely affect the U.S. dollar value of a fund’s investments. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Currency risk includes both the risk that currencies in which a fund’s investments are traded, or currencies in which a fund has taken an active </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly for a number of reasons, including the forces of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">foreign governments or central banks, or currency controls or political developments in the United States or abroad. Certain funds may engage in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">active currency positions and may cross-hedge currency exposure represented by their securities into another foreign currency. This may result in a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund’s currency exposure being substantially different than that suggested by its securities investments. All funds with foreign currency holdings </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and/or that invest or trade in securities denominated in foreign currencies or related derivative instruments may be adversely affected by changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">foreign currency exchange rates. Derivative foreign currency transactions (such as futures, forwards, and swaps) may also involve leveraging risk, in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">addition to currency risk. Leverage may disproportionately increase a fund’s portfolio losses and reduce opportunities for gain when interest rates, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">stock prices, or currency rates are changing.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Continental Europe.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">European securities may be affected significantly by economic, regulatory, or political developments affecting European </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issuers. All countries in Europe may be significantly affected by fiscal and monetary controls implemented by the European Economic and Monetary </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Union. Eastern European markets are relatively undeveloped and may be particularly sensitive to economic and political events affecting those </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">countries.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Hedging, derivatives, and other strategic transactions risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">predict pertinent market movements and market risk, counterparty risk, credit risk, interest-rate risk, and other risk factors, none of which can be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Subadvisor only uses hedging and other strategic transactions in the fund primarily for hedging purposes or to gain exposure to a particular securities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">principal amount invested. These transactions may also increase the volatility of the fund and may involve a small investment of cash relative to the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">transaction does not perform as promised.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">reference rates, or indexes. Derivatives may relate to stocks, bonds, interest rates, currencies or currency exchange rates, and related indexes. The </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund may use derivatives for many purposes, including for hedging and as a substitute for direct investment in securities or other assets. Derivatives </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">existing investments and make new investments. This generally will be done when the adjustment is expected to be relatively temporary or in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">anticipation of effecting the sale of fund assets and making new investments over time. Further, since many derivatives have a leverage component, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in the derivative itself. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. When the fund uses </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">description of the various derivative instruments the fund may utilize, refer to the SAI.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">particular, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulations promulgated or proposed thereunder require many </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">derivatives to be cleared and traded on an exchange, expand entity registration requirements, impose business conduct requirements on dealers that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">enter into swaps with a pension plan, endowment, retirement plan or government entity, and required banks to move some derivatives trading units to a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">non-guaranteed affiliate separate from the deposit-taking bank or divest them altogether. Although the Commodity Futures Trading Commission (CFTC) </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">has released final rules relating to clearing, reporting, recordkeeping and registration requirements under the legislation, many of the provisions are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">subject to further final rule making, and thus its ultimate impact remains unclear. New regulations could, among other things, restrict the fund’s ability </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to engage in derivatives transactions (for example, by making certain types of derivatives transactions no longer available to the fund) and/or increase </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the costs of such derivatives transactions (for example, by increasing margin or capital requirements), and the fund may be unable to fully execute its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investment strategies as a result. Limits or restrictions applicable to the counterparties with which the fund engages in derivative transactions also </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could prevent the fund from using these instruments or affect the pricing or other factors relating to these instruments, or may change the availability of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">certain investments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The Derivatives Rule mandates that the fund adopt and/or implement: (i) value-at-risk limitations (“VaR”); (ii) a written derivatives risk management </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">program; (iii) new Board oversight responsibilities; and (iv) new reporting and recordkeeping requirements. In the event that a fund’s derivative exposure </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">user (“Limited Derivatives User”) under the Derivatives Rule, in which case the fund is not subject to the full requirements of the Derivatives Rule. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Limited Derivatives Users are excepted from VaR testing, implementing a derivatives risk management program, and certain Board oversight and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">reporting requirements mandated by the Derivatives Rule. However, a Limited Derivatives User is still required to implement written compliance policies </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and procedures reasonably designed to manage its derivatives risks. The Derivatives Rule also provides special treatment for reverse repurchase </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">agreements, similar financing transactions and unfunded commitment agreements. Specifically, the fund may elect whether to treat reverse </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">repurchase agreements and similar financing transactions as “derivatives transactions” subject to the requirements of the Derivatives Rule or as senior </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">time after the date of this Prospectus, legislation may be enacted that could negatively affect the assets of the fund. Legislation or regulation may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">change the way in which the fund itself is regulated. The Advisor cannot predict the effects of any new governmental regulation that may be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">implemented, and there can be no assurance that any new governmental regulation will not adversely affect the fund’s ability to achieve its investment </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">objectives.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The use of derivative instruments may involve risks different from, or potentially greater than, the risks associated with investing directly in securities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and other, more traditional assets. In particular, the use of derivative instruments exposes the fund to the risk that the counterparty to an OTC </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor its obligations. OTC derivatives transactions </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">transaction to a third party. If the counterparty defaults, the fund will have contractual remedies, but there is no assurance that the counterparty will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">derivatives transaction is individually negotiated with a specific counterparty, the fund will be subject to the risk that a counterparty may interpret </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">those payments may be delayed or made only after the fund has incurred the costs of litigation. While the Subadvisor intends to monitor the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">creditworthiness of counterparties, there can be no assurance that a counterparty will meet its obligations, especially during unusually adverse market </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">creditworthiness of any of those counterparties may have a pronounced effect on the fund. Derivatives are also subject to a number of other risks, </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">including market risk, liquidity risk, and operational risk. Since the value of derivatives is calculated and derived from the value of other assets, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">correlate perfectly with the assets, rates, or indexes they are designed to hedge or closely track. Suitable derivatives transactions may not be available </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in all circumstances. The fund is also subject to the risk that the counterparty closes out the derivatives transactions upon the occurrence of certain </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">triggering events. In addition, a Subadvisor may determine not to use derivatives to hedge or otherwise reduce risk exposure. Government legislation or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulation could affect the use of derivatives transactions and could limit the fund’s ability to pursue its investment strategies.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">certain derivatives and other strategic transactions, it will be subject to associated risks. The main risks of each appear below.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Futures contracts.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), and risk of disproportionate loss are the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">principal risks of engaging in transactions involving futures contracts.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Interest-rate swaps.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk, and risk of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">disproportionate loss are the principal risks of engaging in transactions involving interest-rate swaps.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Options.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), and risk of disproportionate loss are the principal risks </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">of engaging in transactions involving options. Counterparty risk does not apply to exchange-traded options.</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Reverse repurchase agreements.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">An event of default or insolvency of the counterparty to a reverse repurchase agreement could result in delays </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">leverage and may, therefore, increase fluctuations in the fund’s net asset value per share (NAV).</div></div></div><div style="line-height:12.0pt;margin-left:12pt;margin-top:4pt;text-align:left"><div style="margin-top:4pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Swaps.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk, settlement risk, risk of default of the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">underlying reference obligation, and risk of disproportionate loss are the principal risks of engaging in transactions involving swaps.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Illiquidity of Shares</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund is a closed-end investment company designed primarily for long-term investors and is not intended to be a trading vehicle. The fund does not </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">that a secondary market will develop. Shares therefore are not readily marketable. Because the fund is a closed-end investment company, Shares in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund may not be tendered for repurchase on a daily basis, and they may not be exchanged for shares of any other fund.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Although the fund, at the sole discretion of the Board, will consider whether to make periodic repurchase offers of its outstanding Shares at net asset </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">value, Shares are significantly less liquid than shares of funds that trade on a stock exchange. There is no guarantee that you will be able to sell all of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">your Shares that you desire to sell in any particular repurchase offer. If a repurchase offer is oversubscribed by Shareholders holding Shares of the fund, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund will repurchase only a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">pro rata</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> portion of the Shares tendered by each Shareholder. The potential for pro-ration may cause some investors to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">tender more Shares for repurchase than they otherwise would wish to have repurchased. In addition, in extreme cases, the fund may not be able to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">complete repurchases due to the fund’s holding of illiquid investments. In that event, you may be able to sell your Shares only if you are able to find an </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investor willing to purchase your Shares. Any such sale may have to be negotiated at unfavorable prices and must comply with applicable securities laws </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and must be approved by the Board. Due to the requirements regarding tenders offers and the frequency with which the fund expects to offer to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">repurchase Shares, in the event the fund makes repurchase offers it is unlikely that the fund will be able to extend the expiration date of, or increase the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">amount of, any repurchase offer, which may result in an investor needing to subscribe to more than one repurchase offer to exit the fund in the case of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">oversubscribed repurchase offers.</div></div></div><div style="line-height:12.0pt;margin-top:5pt;text-align:left"><div style="margin-top:5pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Inflation/Deflation Risk.</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Inflation risk is the risk that the value of assets or income from investment will be worth less in the future, as inflation </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">decreases the value of money. As inflation increases, the real value of the Shares and distributions on those </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Shares</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> can decline. In addition, during any </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">companies, their assets and revenues. In addition, deflation may have an adverse effect on the creditworthiness of issuers and may make issuer default </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">more likely, which may result in a decline in the value of</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund’s portfolio.</div></div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Lending Risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may originate loans to, or purchase, assignments of or participations in loans made to, various issuers, including distressed companies. Such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments may include senior secured, junior secured and mezzanine loans and other secured and unsecured debt that has been recently originated </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">obligations, there is insufficient collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted loan. However, there can </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">assurance that collateral will retain its value.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">commenced, the fund could experience substantial costs in trying to collect on defaulted investments, such as legal fees, collection agency fees, or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">stake in the litigation.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments involving the Subadvisor’s affiliates (e.g., securitizations where the Subadvisor is sponsor).</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Leverage risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Leverage creates risks for Shareholders, including the likelihood of greater volatility of NAV and market price of, and distributions from, the Shares and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the risk that fluctuations in the costs of borrowings may affect the return to Shareholders. To the extent the income derived from investments purchased </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the income from the investments purchased with such funds is not sufficient to cover the cost of leverage, the amount available for distribution to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">maintain the fund’s leveraged position if it deems such action to be appropriate. While the fund has preferred shares or borrowings outstanding, an </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">There can be no assurance that a leveraging strategy will be successful.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fee paid to the Advisor is calculated on the basis of the Advisor’s Managed Assets, including assets attributable to any preferred shares that may be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issued or to indebtedness, so the fees will be higher when leverage is utilized. In this regard, holders of any preferred shares do not bear the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Management Fee. Rather, Shareholders bear the portion of the Management Fee attributable to the assets purchased with the proceeds, which means </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">that Shareholders effectively bear the entire Management Fee.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Leverage may be achieved through the purchase of certain derivative instruments. The fund’s use of derivative instruments exposes the fund to special </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">risks.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Management Risk</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the Advisor and the Board. The Subadvisor applies investment techniques and risk analyses in making investment decisions for the fund, but there can </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">be no guarantee that it will produce the desired results. The Subadvisor’s securities selections and other investment decisions might produce a loss or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">from achieving its investment objective.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Natural Disasters, Adverse Weather Conditions, and Climate Change</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Certain areas of the world may be exposed to adverse weather conditions, such as major natural disasters and other extreme weather events, including </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">hurricanes, earthquakes, typhoons, floods, tidal waves, tsunamis, volcanic eruptions, wildfires, droughts, windstorms, coastal storm surges, heat </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">waves, and rising sea levels, among others. Some countries and regions may not have the infrastructure or resources to respond to natural disasters, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">making them more economically sensitive to environmental events. Such disasters, and the resulting damage, could have a severe and negative impact </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">manner normally conducted. Adverse weather conditions also may have a particularly significant negative effect on issuers in the agricultural sector </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and on insurance companies that insure against the impact of natural disasters.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">conditions, resulting in increased economic impact, and may pose long-term risks to the fund’s investments. The future impact of climate change is </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">difficult to predict but may include changes in demand for certain goods and services, supply chain disruption, changes in production costs, increased </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">legislation, regulation, international accords and compliance-related costs, changes in property and security values, availability of natural resources </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and displacement of peoples.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for issuers in which the fund </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">invests. These developments may create demand for new products or services, including, but not limited to, increased demand for goods that result in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">lower emissions, increased demand for generation and transmission of energy from alternative energy sources and increased competition to develop </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">innovative new products and technologies. These developments may also decrease demand for existing products or services, including, but not limited </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to, decreased demand for goods that produce significant greenhouse gas emissions and decreased demand for services related to carbon based </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">energy sources, such as drilling services or equipment maintenance services.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div>
<div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Non-Diversified Risk</div></div></div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Overall risk can be reduced by investing in securities from a diversified pool of issuers, while overall risk is increased by investing in securities of a small </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">number of issuers. If the fund is not diversified within the meaning of the 1940 Act, that means it is allowed to invest a large portion of assets in any one </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issuer or a small number of issuers, which may result in greater susceptibility to associated risks. As a result, credit, market, and other risks associated </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with a non-diversified fund’s investment strategies or techniques may be more pronounced than for funds that are diversified.</div></div> </div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Operational and Cybersecurity Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">systems to perform necessary business functions, the fund’s service providers are susceptible to operational and information or cybersecurity risks that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could result in losses to the fund and its shareholders. Intentional cybersecurity breaches include unauthorized access to systems, networks, or devices </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">(such as through “hacking” activity or “phishing”); infection from computer viruses or other malicious software code; and attacks that shut down, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">disable, slow, or otherwise disrupt operations, business processes, or website access or functionality. Cyber-attacks can also be carried out in a manner </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">that does not require gaining unauthorized access, such as causing denial-of-service attacks on the service providers’ systems or websites rendering </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">them unavailable to intended users or via “ransomware” that renders the systems inoperable until appropriate actions are taken. In addition, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">unintentional incidents can occur, such as the inadvertent release of confidential information (possibly resulting in the violation of applicable privacy </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">laws).</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">damage to a computer or network system, or costs associated with system repairs. Such incidents could cause a fund, the advisor, a manager, or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">service providers to incur regulatory penalties, reputational damage, additional compliance costs, litigation costs or financial loss. In addition, such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">incidents could affect issuers in which a fund invests, and thereby cause the fund’s investments to lose value.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Cyber-events have the potential to materially affect the fund and the advisor’s relationships with accounts, shareholders, clients, customers, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">employees, products, and service providers. The fund has established risk management systems reasonably designed to seek to reduce the risks </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund is exposed to operational risk arising from a number of factors, including, but not limited to, human error, processing and communication </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, other disruptive events, including (but not limited to) natural disasters and public health crises may adversely affect the fund’s ability to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">conduct business, in particular if the fund’s employees or the employees of its service providers are unable or unwilling to perform their responsibilities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">arrangements could result in the fund’s business operations being less efficient than under normal circumstances, could lead to delays in its processing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">of transactions, and could increase the risk of cyber-events.</div></div> </div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Potential Consequences of Regular Repurchase Offers</div></div></div> </div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund’s repurchase offer policy may have the effect of decreasing the size of the fund over time from what it otherwise would have been absent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">significant new investments in the fund. It may also force the fund to sell assets it would not otherwise sell and/or to maintain increased amounts of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">cash or liquid investments at times. It may also reduce the investment opportunities available to the fund and cause its expense ratio to increase. In </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">addition, because of the limited market for private securities held by the fund, the fund may be forced to sell its liquid securities in order to meet cash </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">requirements for repurchases. This may have the effect of substantially increasing the fund’s ratio of relatively more illiquid securities to relatively more </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">liquid securities for the remaining investors. It is not the intention of the fund to do this; however, it may occur.</div></div> </div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Tax Risk</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div></div> </div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">from certain kinds of investment income; (ii) meet certain asset diversification requirements at the end of each quarter; and (iii) distribute in each </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">exempt interest income). If the fund fails to meet any of these requirements, subject to the opportunity to cure such failures under applicable provisions </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">such income were distributed to Shareholders. All distributions by the fund from earnings and profits, including distributions of net capital gain (if any), </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">treated as qualified dividend income in the case of individual and other non-corporate Shareholders and (ii) for the dividends received deduction in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">case of corporate Shareholders, provided that in each case the Shareholder meets applicable holding period requirements. In addition, in order to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">requalify for taxation as a regulated investment company, the fund might be required to recognize unrealized gain, pay substantial taxes and interest, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and make certain distributions. See “Federal Income Tax Matters.”</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div> </div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and future changes in tax laws and regulations. See “Federal Income Tax Matters.”</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">various types of income will be in future years. See “Federal Income Tax Matters.”</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">To qualify as a RIC for any taxable year, the fund must, among other things, satisfy a gross income test for such taxable year. Specifically, at least 90% of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund’s gross income for such taxable year must consist of dividends; interest; payments with respect to certain securities loans; gains from the sale </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or other disposition of stock, securities or foreign currencies; other income (including, but not limited to, gains from options, futures or forward </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">contracts) derived with respect to its business of investing in such stock, securities or currencies; and net income derived from interests in “qualified </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">publicly traded partnerships” (such income, “Qualifying RIC Income”). Income from certain Asset-Based Lending Investments will not be Qualifying RIC </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Income. In order to avoid receiving non-qualifying income from such investments, the fund may invest in those Asset-Based Lending Investments </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">indirectly through one or more subsidiaries organized outside of the United States (each, a “Non-US Subsidiary”). A Non-US Subsidiary will be treated as </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a controlled foreign corporation (a “CFC”), and the fund will be a “United States shareholder” thereof. As a result, the fund will be required to include in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">its gross income each taxable year all of a Non-US Subsidiary’s “subpart F income” and its “GILTI” income. It is expected that much of each Non-US </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Subsidiary’s income will be “subpart F income.” If a Non-US Subsidiary realizes a net loss, that loss generally will not be available to offset the fund’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">income. The fund’s inclusion of a Non-US Subsidiary’s “subpart F income” in its gross income will increase the fund’s tax basis in its shares of the Non-US </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Subsidiary. Distributions by a Non-US Subsidiary to the fund will not be taxable to the extent of its previously undistributed “subpart F income” and will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">reduce the fund’s tax basis in those shares.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Although income from the Asset-Based Lending Investments held by a Non-US Subsidiary would not be Qualifying RIC Income if received directly by the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund, the Code provides that a RIC’s “subpart F income” inclusions will be treated as Qualifying RIC Income if the CFC distributes such income to the RIC </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">during the year of inclusion. Further, the IRS has issued Regulations providing that the annual net profit, if any, realized by a Non-US Subsidiary in which </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund invests as part of its business of investing in stock or securities and included in the fund’s income under the subpart F rules will constitute </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">“qualifying income” for purposes of remaining qualified as a RIC whether or not the included income is distributed by a Non-US Subsidiary to the fund.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">For U.S. federal income tax purposes, a Non-US Subsidiary is treated as a corporation. A Non-US Subsidiary would be subject to U.S. federal income </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">tax, at the 21% rate currently applicable to U.S. corporations, on its net income that is treated as “effectively connected” with the conduct of a trade or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">business in the United States (“effectively connected income”). In addition, a Non-US Subsidiary would be subject to a 30% U.S. branch profits tax in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">respect of its “dividend equivalent amount,” as defined in Section 884 of the Code, attributable to effectively connected income. The fund expects that, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in general, the activities of each Non-US Subsidiary will be conducted in a manner such that the Non-US Subsidiary will not be treated as engaged in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">conduct of a U.S. trade or business. There can be no assurance, however, that a Non-US Subsidiary will not recognize any effectively connected income. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The imposition of U.S. federal tax on a Non-US Subsidiary’s effectively connected income could significantly reduce the fund’s returns.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Income from certain Asset-Based Lending Investments will not be Qualifying RIC Income and, in some cases, income from those Asset-Based Lending </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Investments also would result in “effectively connected income” (as described above) if received by a Non-US Subsidiary. For that reason, certain </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Asset-Based Lending Investments may be held by the fund indirectly through one or more subsidiaries organized in the United States (each, a “Domestic </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Subsidiary”). A Domestic Subsidiary would be subject to U.S. federal income tax, at the 21% rate currently applicable to U.S. corporations, on its net </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">income and gains, as well as any applicable state income tax. Dividends paid by a Domestic Subsidiary to the fund would be Qualifying RIC Income.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The RIC diversification requirements provide that not more than 25% of the value of the fund’s total assets can be invested (x) in securities (other than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">U.S. government securities or securities of other RICs) of any one issuer or of two or more issuers that the fund controls and that are engaged in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">same, similar or related trades or businesses. As a result, the fund’s total investment in certain Non-US Subsidiaries and Domestic Subsidiaries that are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">engaged in the same, similar or related trades or businesses is limited to no more than 25% of the value of the fund’s total assets.</div></div> </div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Valuation Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">policies and procedures. In accordance with these policies and procedures, the Advisor values the fund’s investments at fair value as determined in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">good faith when market quotations are not readily available or are deemed to be unreliable. Fair value pricing may require subjective determinations </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Advisor, as valuation designee, is subject to Board oversight and reports to the Board information regarding the fair valuation process and related </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">material matters.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div>
<div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Usury Limitations</div></div></div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Interest charged on loans <div style="display:inline;">originated<div style="display:inline;"> or</div> </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">acquired by the fund may be subject to state usury laws imposing maximum interest rates and penalties for violations, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">including restitution of excess interest and unenforceability of debt.</div></div></div> </div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Healthcare Loans and Royalty-Backed Credit Investments</div></div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Healthcare Product-Related Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The ability of the fund to generate returns will depend in part on the success of the pharmaceutical, biotechnology, specialty and generic </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">pharmaceuticals, medical devices and products, laboratory and diagnostics products (the “Products”) related to the fund’s investments. To the extent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">any risks described below adversely affect sales of Products, potential returns for Limited Partners will, in turn, be adversely affected.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Products Sales Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Sales from Products may be lower than their historical levels or lower than the amounts projected due to pricing pressures, insufficient demand, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">product competition, lack of market acceptance, obsolescence, safety or efficacy issues, restrictions on distribution imposed or requested by </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulatory authorities, narrowing of the approved indication(s) for use, additions of boxed warnings or other warnings or precautions to the labeling, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">manufacturing shortages, loss of patent protection or other factors.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medical Withdrawal Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">After its regulatory approval and introduction into the market, a Product may still be subject to withdrawal from the market at the request or direction of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the FDA or a foreign regulatory body. The manufacturer or marketer of a Product may voluntarily withdraw the Product from the market for medical, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">technical, regulatory, commercial or other reasons. There can be no assurance that a Product will not be withdrawn.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medical Product Competition Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The healthcare industry is highly competitive and rapidly evolving. Each Product is subject to competition from alternative products or procedures that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">are now available, or that may be developed or become available in the future. The Products face competition from (i) products currently on the market </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">that are approved for other indications, but may be subsequently approved for the same indications as those of the Products, (ii) off-label use of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">products approved for other indications, (iii) the introduction of new products or procedures, and/or (iv) improvements to existing products. Any of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">these changes may cause a Product to become more expensive than its competitors or less relevant as a therapeutic alternative, thereby decreasing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the value of (and in some instances, rendering worthless) the expected revenue stream on that Product. In addition, a change of law could permit </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">importation into the countries for which the fund is entitled to royalties for Product sales (the “Protected Countries”) of Products for which the fund may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">not be not entitled to royalties, which would reduce the sales of royalty bearing Products.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Licensees of the Products (“Licensees”) are responsible for the development, production, marketing and sale of the Products. The sale of the Products </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and the Licensees’ ability to maintain their competitive positions are related to the success of the Licensees’ respective marketing efforts. These efforts </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">rely, in part, on the strength and reputation of a Product’s brand name, the capabilities of the Licensee’s sales force, and underlying trademarks, trade </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">names and related intellectual property. A Licensee’s activities both in marketing the Products and in protecting its intellectual property may be outside </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the control of the fund. A Licensee’s failure either to market the Products actively or to diligently protect its intellectual property rights could reduce its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">competitive position. Other factors affecting the market position of the Products include their effectiveness, side effect profile, price and third-party </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">insurance reimbursement policies.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Independent Medical Licensees</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Revenue received by the fund is expected to include royalties paid by the Licensees or, in the case of bonds or other securities collateralized by </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">royalties, payments supported by royalties paid by the Licensees. These Licensees are not owned by or affiliated with the fund and some of these </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Licensees may have interests that are different from the fund’s interests. These Licensees may be motivated to maximize income by allocating </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">resources to other products and, in the future, may decide to focus less attention on the Products. There can be no assurance that each of these parties </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">has adequate resources and motivation to continue to produce, market and sell the Products. Aside from any limited audit rights relating to the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">activities of the Licensees that the fund may have in certain circumstances, the fund does not have oversight rights with respect to the Licensees’ </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">operations. The fund also has limited information on the Licensees’ operations. While the fund may be able to receive certain information relating to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sales of Products through the exercise of audit rights and review of royalty reports, if available, the fund will not have the right to review or receive other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">important information relating to Products, including the results of any studies conducted by the Licensees or others, or complaints from doctors or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">users of the Products, that the Licensees may have. The market performance of the Products, therefore, may be diminished by any number of factors </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">relating to the Licensees that are beyond the fund’s control.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, royalty payments are determined by the Licensees based on their reported sales. Each Licensee’s calculation of the royalty payments is </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">subject to and dependent upon the adequacy and accuracy of its sales and accounting functions, and errors may occur from time to time in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">calculations made by a Licensee. While the fund may have certain audit rights with respect to the calculations and sales data for the associated royalty </div></div> </div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">payments, such audit rights will be limited. In addition, such audits may occur many months following the fund’s recognition of the royalty revenue, may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">require the fund to adjust its royalty revenues in later periods and may require expense on the part of the fund.</div></div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Generic Medical Product Substitutes</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Although the Products are based upon patents and/or patent applications with exclusive rights and may have other types of exclusivity under relevant </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">laws, a regulatory authority may, upon expiration of such exclusivities, authorize marketing by a third party for a generic substitute for a Product, in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">which case the Product would become subject to competition from such generic substitute. Generic substitutes are typically sold at significantly lower </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">prices than branded products. Governmental and other pressures to reduce pharmaceutical costs, including from third-party payers such as health </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">maintenance organizations and health insurers, could influence physicians or pharmacies to increasingly use generic substitutes for the Products.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Potential Medical Product Liability Claims</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The manufacturers, developers or marketers of the Products could become subject to product liability claims. A successful product liability claim could </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">adversely affect the amount of revenue generated by the fund. Although the fund believes that it will not bear responsibility in the event of a product </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">liability claim against the company manufacturing, marketing and/or selling the underlying Products, there can be no assurance that such claims would </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">not materially and adversely affect the fund.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Patent and Other Intellectual Property Rights May Be Challenged and/or Otherwise Compromised</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The success of the fund’s investments will frequently depend, at least in part, on the existence of valid and enforceable claims of issued patents and/or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">claims in pending patent applications in the United States and elsewhere throughout the world, and/or possibly on other forms of registered and/or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">unregistered intellectual property rights. For instance, in the case of royalty investments, the fund’s right to receive payments will depend on the sales of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Products covered by such intellectual property rights. In the case of credit investments in companies in the healthcare industry, these companies’ </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">performance and consequently the success of the fund’s investments in these companies will similarly be dependent on these intellectual property </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">rights. The patents, patent applications, and/or other intellectual property rights on which these royalty streams or other investments depend may be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">challenged, invalidated, rendered unenforceable or otherwise compromised. By way of example only, there can be no assurance that a third party will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">not assert ownership or other rights in or to any such patents, patent applications or other intellectual property, or that any patent applications on which </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">royalty streams or other investments may depend will proceed to grant. Similarly, there can be no assurance that, in the context of a patent challenge or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">otherwise, evidence such as prior art references, will not be uncovered that could have an adverse effect on the scope, validity or enforceability of any of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the patents or on the patentability of any of the patent applications on which the royalty streams or other investments depend. Any challenge or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">compromise of the patents, patent applications or other intellectual property rights on which the royalty streams or other investments depend may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">adversely affect the performance of the fund.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Challenges from the Licensees</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Challenges to patent rights on which the royalty streams, and possibly other investments, may depend may come from Licensees as well as third </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">parties. Pursuant to the Supreme Court decision of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medimmune v. Genentech</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">, 549 U.S. 118, 127 S. Ct. 764 (2007), a licensee need not terminate its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">license agreement before seeking a declaratory judgment in federal court that the underlying patent is invalid, unenforceable, or not infringed. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Therefore, there can be no assurance that a Licensee paying royalties contributing to the royalty streams will not challenge patent rights on which those </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">royalties are based.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medical Intellectual Property May be Infringed or Circumvented by Others</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">There is a risk that third parties may use the patents, patent applications and/or other intellectual property rights on which the royalty streams and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">other investments depend without authorization from the licensor or in the case of royalty streams, without otherwise paying royalties to the licensor. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">There also is a risk that companies within the healthcare industry may develop or otherwise obtain intellectual property that potentially could reduce </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">any competitive advantage afforded by the patents, patent applications and/or other intellectual property on which the royalty streams or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments depend. The undetected or unremedied use of these intellectual rights by third parties, and/or the design-around or circumvention of these </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">intellectual property rights, could adversely affect the payments that the fund would receive.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medical Trade Secrets</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund’s right to receive payments in relation to royalty streams or other investments may depend, in part, on trade secrets, know-how and technology </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">which are not protected by patents. This information is typically protected through confidentiality agreements with parties that have access to such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">information, such as collaborative partners, licensors, employees and consultants. Any of these parties may breach the agreements and disclose or use </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the confidential information, and third parties might learn of or use the information in some other lawful or unlawful way. Any such disclosure or use of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the trade secrets, know-how or technology, whether lawful or unlawful, may adversely affect the payments that the fund would receive.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Foreign Jurisdiction Treatment of Medical Product Revenue Sources</div></div></div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">A significant a portion of the royalty streams and other investments of the fund may relate to income generated from the manufacture, use or sale of the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Products outside of the United States. The patents, patent applications and/or other intellectual property rights on which the royalty streams or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments depend may not extend in each jurisdiction in which such Products are made, used or sold, and thus it may not be possible to prevent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">competitors from exploiting competing products in such markets. In addition, foreign jurisdictions have differing procedures and/or standards for </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">prosecuting and/or maintaining patents, and may provide differing degrees of protection against the infringement or other unauthorized use of patents </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or other intellectual property. These variations among various international jurisdictions may affect the payments that the fund would receive.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">The Fund Depends on Third Parties to Maintain, Enforce and Defend Patent Rights and Other Intellectual Property Rights on which the Fund’s Right to </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Receive Payments May Depend</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">While the value of the fund’s investments, including royalty streams may be highly dependent on the prosecution, maintenance, defense and/or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">enforcement of the patents, patent applications and other intellectual property rights, in most, if not all cases, the fund has no ability to control these </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">activities and must rely on the willingness and ability of the licensor or its designee to undertake these activities. It is anticipated that the licensor or its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">designee will be in the best position to prosecute, maintain, enforce and/or defend the underlying patent and other intellectual property rights and that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the licensor or its designee will have the requisite business and financial motivation to do so. However, there can be no assurance that these third </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">parties will seek to vigorously prosecute, maintain, enforce or defend such rights, or that their efforts to do so will be successful. Any failure to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">successfully prosecute, maintain, enforce or defend such rights could have a material adverse effect on the respective investment and on the fund. The </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund may not have the ability to participate in patent or other proceedings brought by or against the licensor or its designee, and if it does, the fund </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could incur substantial litigation costs.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Changes in Intellectual Property Law</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Legislative, judicial and/or regulatory changes could occur during the term of the fund with respect to intellectual property matters that may adversely </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">affect its ability to derive income from the royalty streams and other investments. By way of example only, in the United States, patent reform legislation </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">is pending, that among other things, potentially could create additional risks with respect to validity and/or enforceability of patents.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Infringement of Third Party Patents and Other Intellectual Property Rights</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The commercial success of the Products depends, in part, on avoiding infringement of the intellectual property rights of others. Third party issued </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">patents or patent applications, trademarks, copyright, designs or other intellectual property rights claiming subject matter used to manufacture, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">market, sell and/or use the Products could exist. There can be no assurance that a license would be available for such subject matter if such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">infringement were to exist or, if offered, would be offered on reasonable and/or commercially feasible terms. Without such a license, it may be possible </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">for third parties to assert infringement or other intellectual property claims against a Licensee based on such patents or other intellectual property </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">rights. For instance, in the case of royalty streams, an adverse outcome in infringement proceedings could subject the Licensee to significant liabilities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to third parties, require disputed rights to be licensed from third parties or require the Licensee to cease or modify its manufacturing, marketing, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">distribution, sale and/or use of the Products, thereby reducing the royalty streams.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Finite Terms and Other Contractual Matters</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Rights to receive payments in respect of royalty streams typically have limited terms that are generally not subject to extension. Following the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">termination or expiration of the licensed intellectual property rights, or the termination or expiration of the license or contractual right to receive </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">payments under any agreement pursuant to which the fund has the right to receive payments, the fund may not receive any further revenue related to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the relevant Product, even if the Product continues to be sold. There also is a risk that disputes may arise with respect to the license agreements </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">pertaining to the patents, patent applications and/or other intellectual property rights on which the royalty streams depend that adversely affect the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund’s right or ability to collect payments.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Product Development Risks</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Though it is not the primary focus of the fund, the fund may in certain circumstances acquire some interests in Products undergoing development or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">clinical trials that have not yet received marketing approval by any regulatory authority. There can be no assurance that the FDA or other regulatory </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">authorities will approve or clear such Products, or that such Products will be brought to market in a timely manner or at all. The research, development, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">preclinical and clinical trials, manufacturing, labeling, and marketing related to a health care company’s products are subject to an extensive regulatory </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">approval process by regulatory agencies. The process for obtaining required regulatory approvals, including the required preclinical and clinical </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">testing, is very lengthy, costly, and uncertain. There can be no guarantee that, even after such time and expenditures, a company will be able to obtain </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the necessary regulatory approvals for clinical testing or for the manufacturing or marketing of any products or that the approved labeling will be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sufficient for favorable marketing and promotional activities. If a company is unable to obtain these approvals in a timely fashion, or if after approval for </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">marketing, a product is later shown to be ineffective or to have unacceptable side effects not discovered during testing, the company may experience </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">significant adverse effects, which in turn could negatively affect the performance of the fund.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Manufacturing and Supply Risk</div></div></div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Pharmaceutical products are manufactured in specialized facilities that, in major markets, require the approval of, and are subject to ongoing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulation by, regulatory agencies. For example, in the United States, Europe, and Japan (among other countries), drug product manufacturers must </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">achieve and maintain compliance with current Good Manufacturing Practices (“GMPs”) set forth in national regulations and harmonized guidelines </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">developed through the International Conference on Harmonization (“ICH”). To the extent these manufacturing standards are not met, manufacturing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">facilities may be closed or the production of applicable Products may be interrupted until such time as any deficiencies noted by such agencies are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">remedied. Any such closure or interruption may interrupt, for an indefinite period of time, the manufacture and distribution of a Product.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, manufacturers of such Products may rely on third parties for aspects of the manufacturing process, including packaging of the Products or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">supplying bulk raw material used in the manufacture of the Products. Licensees generally rely on a small number of key, highly specialized suppliers, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">manufacturers and packagers. Any interruptions, however minimal, in the operation of these facilities could have a material adverse effect on Product </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sales.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Medical Enforcement Risk</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Marketed medical products are subject to extensive postmarketing requirements, including laws and regulations related to advertising and promotion, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">safety surveillance and reporting, and price reporting. Failure to comply with these requirements could result in a range of enforcement actions that </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could have a material adverse effect on Product sales, including investigations, administrative penalties, judicial oversight, and potentially even market </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">withdrawal.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Uncertainty Related to Healthcare Reimbursement and Reform Measures</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In both the U.S. and foreign markets, sales of a health care company’s products and its success depend in part on the availability of reimbursement from </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">third-party payors, including government health administration authorities (such as Medicare or Medicaid in the United States), private health insurers, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and other health management organizations. The revenues and profitability of life sciences companies may be affected by the continuing efforts of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">governmental and other payors to contain or reduce the costs of healthcare. Payors are increasingly challenging the prices charged for medical </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">products and services that they reimburse. If the Products of the companies the fund invests in are determined to not meet the criteria for coverage or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">reimbursement, these organizations may not reimburse the Products or may at lower levels. Significant uncertainty exists as to the reimbursement </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">status of newly approved products. There can be no assurance that a company's proposed product will be considered cost-effective or that adequate </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">third-party reimbursement will be available to enable a company to maintain price levels sufficient to realize an appropriate return on its investment in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">product development.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, changes in government legislation or regulation, changes in formulary or compendia listings, or changes in payors’ policies may reduce </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">reimbursement of such products. If reimbursement is reduced or is not available for a Product, sales would diminish and decrease cash flows available </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to satisfy royalty payment obligations, thereby harming the fund’s revenue. In addition, macroeconomic factors may affect the ability of patients to pay </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">for Products by, for example, diminishing the income patients have to pay out-of-pocket costs and/or obtain sufficient health insurance coverage.</div></div> </div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Transportation Investments</div></div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">The Fund’s Aviation Investment Strategy Depends on the Continual Leasing and Remarketing of Aircrafts and Aircraft Engines</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">remarket or sell the aircraft or aircraft engine on favorable terms or without significant off-lease time and costs could be negatively affected by </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">depressed conditions in the commercial aviation industry, airline bankruptcies, the effects of terrorism, war, natural disasters and/or epidemic diseases </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">on airline passenger traffic trends, declines in the values of aircrafts and aircraft engines, and various other general market and competitive conditions </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may incur substantial losses.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">The Fund Could Incur Significant Costs Resulting from Aviation Lease Defaults</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">legal and other expenses associated with court or other governmental proceedings, particularly if the lessee is contesting the proceedings or is in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">bankruptcy. In addition, during any such proceedings the relevant aircraft or aircraft engine would likely not be generating revenue. The fund could also </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">incur substantial maintenance, refurbishment or repair costs if a defaulting lessee fails to pay such costs and where such maintenance, refurbishment </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">associated with any aircraft or aircraft engine that the fund repossesses and is unable to place immediately with another lessee.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">remarket the aircraft or aircraft engine effectively, including, in some cases, liens that the lessor might have incurred in connection with the operation of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or aircraft engine. It is expected that when a defaulting lessee is in bankruptcy, protective administration, insolvency or similar proceedings, additional </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or some of the obligations under the relevant lease.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">registered, repossession may be more difficult, especially if the jurisdiction permits the lessee or the other operator to resist deregistration. The fund </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may also incur significant costs in retrieving or recreating records required for registration of the aircraft or aircraft engine, and in obtaining the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Certificate of Airworthiness for an aircraft or aircraft engine. If, upon a lessee default, the fund incurs significant costs in connection with repossessing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a result of lessee defaults, the fund may incur substantial losses.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">The Fund May Experience Abnormally High Maintenance or Obsolescence Issues with Its Aircraft or Aircraft Engine</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Aircrafts and aircraft engines are long-lived assets, requiring long lead times to develop and manufacture, with particular types and models becoming </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">obsolete or less in demand over time when newer, more advanced aircrafts or aircraft engines are manufactured. The fund’s aircrafts and aircraft </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">engines have exposure to obsolescence, particularly if unanticipated events occur which shorten the life cycle of such aircraft or aircraft engine types. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">These events include but are not limited to government regulation, technological innovations or changes in airline customers’ preferences. These events </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Further, variable expenses like fuel, crew or aging aircraft or aircraft engine corrosion control or modification programs and airworthiness directives </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">these increased maintenance expenses and regulatory costs upon acquisition or remarketing of its aircraft or aircraft engine. Any of these expenses or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">costs may cause the fund to incur substantial losses.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;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> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">but not limited to, decreases in passenger demand, increases in fuel costs, government regulation and increases in interest rates. Operating leases </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">contractual cash flows at lease inception. In addition to factors linked to the commercial aviation industry generally, many other factors may affect the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">value of the aircraft or aircraft engine that the fund acquires and market rates for leases, including:</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the particular maintenance, operating history and documentary records of the aircraft or aircraft engine;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the number of operators using that type of aircraft or aircraft engine;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aircraft or aircraft engine age;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the regulatory authority under which the aircraft or aircraft engine is operated;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">any renegotiation of an existing lease on less favorable terms;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the negotiability of clear title free from mechanics’ liens and encumbrances;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;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 style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;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 style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">comparative value based on newly manufactured competitive aircrafts or aircraft engines; and</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div> <div style="clear:both;margin-top:4pt;position:relative;width:100%"> <div style="float:left;line-height:11.0pt;margin-left:10pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div> <div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:533.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the availability of spare parts.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="clear: both; position: relative; max-height: 0px;"></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">other unanticipated factors, could cause the fund to incur substantial losses.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Liability Risk as Lessor</div></div></div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Section 44112 of Title 49 of the United States Code (“</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Section 44112</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”) provides that lessors of aircrafts or aircraft engines generally will not be liable </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">for any personal injury or death, or damage to or loss of property (collectively, for purposes of this section, “</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Losses</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”); </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">provided</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"> that such lessor is not in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">for injuries or damage to passengers or property, and such damage awards can be substantial. Because certain case law interpreting Section 44112 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">applicable (</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">e.g</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">., in a jurisdiction where an accident occurs), different rules may apply. For example, certain foreign jurisdictions may impose strict </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">death, injury and/or damages to public or private property (including consequences of terrorist attacks) or environmental damages. Operators and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">airlines may be unable or unwilling to indemnify the fund, resulting in losses to the fund.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks of Aircraft or Aircraft Engine Lease Receivables, Enhanced Equipment Trust Certificates, Aircraft Engine Mortgages and other Aviation-Related </div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Asset-Backed Securities that Seek to Monetize Leases or Mortgages</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in airline/aircraft or aircraft engine assets, which may include aircraft or aircraft engine lease receivables (“</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">ALRs</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”). ALRs are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">airline companies. Unlike receivables backed by loans or interest rates, however, ALRs may entail a higher risk because of the nature of the underlying </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">assets, which are expensive to maintain and operate and are difficult to sell. Moreover, aircrafts and aircraft engines are subject to many laws in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">different jurisdictions, and the repossession of the aircraft or aircraft engine from lessees may be difficult and costly.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition, the fund may invest in enhanced equipment trust certificates (“</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">EETCs</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”). Although any entity may issue EETCs, to date, U.S. airlines are the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">primary issuers. An airline EETC is an obligation secured by the aircrafts or aircraft engines as collateral. EETCs may be less liquid than other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Furthermore, the fund may invest in aviation-related asset-backed securities that seek to monetize leases or mortgages. Aircraft and aircraft engine </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">mortgage monetization notes and aircraft and aircraft engine lease monetization notes are asset-backed securities that represent interests in pools of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aircraft and aircraft engine mortgages or operating leases, respectively, on various aircraft and aircraft engine types of airlines located throughout the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">world. Holders of such securities bear various risks, including, among other things, lease rates and residual values, increased fuel costs, credit, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">technological, legal, regulatory, terrorism and geopolitical risks. Uncertainty and instability in certain countries in which airlines are located could have </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">a material adverse effect on such securities as well. Additionally, with respect to lease monetization notes, portfolio management and the remarketing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and re-leasing of aircrafts and aircraft engines upon lease expiration or default is typically the responsibility of a designated servicer. No assurance can </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">favorable terms. Further, the value of aircraft or aircraft engine mortgage monetization notes and aircraft and aircraft engine lease monetization notes </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">pool, the originator of the financial obligations or the financial institution providing any credit enhancement, as well as by the expiration or removal of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">any credit enhancement. Finally, aircrafts and aircraft engines are subject to many laws in different jurisdictions, and the repossession of aircrafts and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aircraft engines from lessees or borrowers may be difficult and costly.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and aircraft engine mortgage monetization notes. However, such investments may not have the benefit of diversification across a wider range of aircraft </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and aircraft engine assets and airlines or credit enhancement as may be the case with aircraft and aircraft engine mortgage monetization notes.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Airline Regulation</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Administration (“</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">FAA</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”) and outside the U.S. by additional agencies.</div></div> </div> <div style="line-height:11.0pt;margin-top:9pt;text-align:left"> <div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Failure to Obtain Certain Required Licenses and Approvals</div></div></div> </div> <div style="line-height:12.0pt;margin-top:6pt;text-align:left"> <div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund expects that certain aspects of its leases will require licenses, consents or approvals, including consents from governmental or regulatory </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">authorities for certain payments under its leases and for the import, export or deregistration of the aircraft or aircraft engine. Subsequent changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">applicable law or administrative practice may increase such requirements and governmental consent, once given, could be withdrawn. Furthermore, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div> </div> <div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Effects of the Aviation Security Act</div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The U.S. Aviation and Transportation Security Act (the “</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">Aviation Security Act</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”), among other things, subjects substantially all aspects of U.S. civil </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aviation security to federal oversight and mandates enhanced security measures, including: (i) improved flight deck security; (ii) deployment of federal </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">air marshals on flights; (iii) improved security of airport perimeter access; (iv) airline crew security training; (v) augmented security screening of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">passengers, baggage, cargo, mail, employees and vendors; (vi) improved training and qualifications of security screening personnel; (vii) additional </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">provision of passenger data to U.S. Customs and Border Protection; and (viii) more detailed background checks on passengers and airline and airport </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">personnel. The implementation of the requirement that all checked baggage be screened by explosives detection systems has resulted, and may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">continue to result, in significant equipment acquisitions by the government and changes to baggage processing facilities and procedures. The changes </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">travel, which have adversely affected, and may to continue to adversely affect, the aviation industry in general. It is expected that the Aviation Security </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Act will continue to impose additional costs on the airlines and may adversely impact the performance of the fund.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Effect of Airworthiness Directives and Operating Restrictions</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The maintenance and operation of aircraft and aircraft engines are strictly regulated by the FAA in the U.S. and similar governmental authorities in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">foreign jurisdictions. These rules and regulations govern such matters as certification, registration, inspection, operation and maintenance procedures, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">personnel certification and record keeping. Periodically, the FAA issues airworthiness directives requiring changes to aircraft or aircraft engine </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">maintenance programs and procedures. Such airworthiness directives are issued from time to time with respect to aircraft and aircraft engines to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ensure that they remain airworthy and safe. Future regulatory changes may also increase the cost of operating and/or maintaining aircraft and aircraft </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">provisions as set forth in its lease. The cost of compliance with such requirements may be significant.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Environmental Regulations May Negatively Affect the Airline Industry</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Governmental regulations regarding aircraft and aircraft engine noise and emissions levels apply based on where the relevant aircraft or aircraft engine </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">is registered and operated. For example, jurisdictions throughout the world have adopted noise regulations which require all aircrafts and aircraft </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">engines to comply with noise level standards. In addition to the current requirements, the United States and the International Civil Aviation Organization </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">(the “</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; text-decoration: underline; letter-spacing: 0px; top: 0px;display:inline;">ICAO</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">”), have specific standards for noise levels which applies to engines manufactured or certified on or after January 1, 2006. Currently, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">U.S. regulations would not require any phase-out of aircrafts or aircraft engines that qualified with the older standards applicable to engines </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">manufactured or certified prior to January 1, 2006, but the European Union has established a framework for the imposition of operating limitations on </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aircrafts and aircraft engines that do not comply with the new standards and has incorporated aviation-related emissions into the European Union’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Emission Trading Scheme beginning in 2013. These regulations could limit the economic life of the aircraft and aircraft engines, reduce their value, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">significant additional investments in the aircraft and aircraft engines to make them compliant.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition to more stringent noise restrictions, the United States and other jurisdictions are beginning to impose more stringent limits on nitrogen </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">oxide, carbon monoxide and carbon dioxide emissions from engines, consistent with current ICAO standards. These limits generally apply only to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">engines would increase over time. The ICAO is developing a global scheme based on market-based measures to limit CO2 emissions from international </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aviation to be implementing by 2020. Concerns over global warming could result in more stringent limitations on the operation of aircraft powered by </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">older, noncompliant engines, as well as newer engines.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">European countries generally have relatively strict environmental regulations that can restrict operational flexibility and decrease aircraft and aircraft </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">engine productivity. The European Union’s Emissions Trading Scheme requires that all of the emissions associated with international flights that land or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Kingdom doubled its air passenger duties, in recognition of the environmental costs of air travel and similar measures may be implemented in other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">jurisdictions as a result of environmental concerns.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">compliance aircraft and aircraft engines or, if engine modifications are permitted, require the fund to make significant additional investments in the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">aircraft and aircraft engines to make them compliant, which could cause the fund to incur substantial losses. Further, compliance with current or future </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulations, taxes or duties imposed to deal with environmental concerns could cause lessees to incur higher costs and to generate lower net revenues, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">resulting in a negative impact on their financial conditions. Consequently, such compliance may affect lessees’ ability to make rental and other lease </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">losses.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Cyclical Nature of the Maritime Sector</div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The maritime sector is cyclical, with volatility in charter rates, profitability and vessel values. Future demand for vessels will be dependent upon </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">continued economic growth in numerous international economies, and will be influenced by seasonal and regional changes in demand and changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">such vessels could materially adversely affect the fund’s investments. Historically, demand for vessels has generally been influenced by factors </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">including global and regional economic conditions, developments in international trade, changes in seaborne and other transportation patterns, such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">as port congestion and canal closures, currency exchange rates, armed conflict and terrorist activities including piracy, political developments, and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">sanctions, embargoes and strikes. Additionally, supply of vessels has generally been influenced by factors including the number of expected new </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">building vessel deliveries, the scrapping rate of older vessels, access to traditional debt to finance the construction of new vessels, changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">environmental or other regulations that may limit the useful life of certain vessels.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include new building </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">prices, secondhand vessel values in relation to scrap prices, costs of fuel supplies and other operating costs, costs associated with classification </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">society surveys, normal maintenance and insurance coverage, the efficiency and age profile of the existing fleet in the market and government and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and degree of changes in industry conditions.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Maritime Risks</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The operation of an ocean-going vessel carries inherent risks. These risks include, among others, the possibility of marine disaster, piracy, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">environmental accidents, grounding, fire, explosions and collisions, cargo and property losses or damage, business interruptions caused by mechanical </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions and work stoppages or other labor </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">problems with crew members serving on vessels including crew strikes and/or boycotts.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">from or termination of charter contracts, governmental fines, penalties or restrictions on conducting business, higher insurance rates and damage to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">counterparties’ reputation and customer relationships generally.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">International Operations Risks</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">events such as mechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. All these hazards can result in death or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">injury to persons, increased costs, loss of revenues, loss or damage to property (including cargo), environmental damage, higher insurance rates, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">damage to the counterparty’s customer relationships, harm to its reputation as a safe and reliable operator and delay or rerouting. In addition, changing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These sorts of events could interfere with shipping routes and result in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">market disruptions which could have a material adverse effect on the fund’s financial condition, cash flows and ability to pay distributions.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Maritime Claims</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Equipment Investments</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in equipment loans or finance leases. Finance leases are equipment leases which, due to the terms of the lease, constitute loans </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with the lessee being the legal owner of the underlying equipment and the lessor being the secured party. Equipment loans and finance leases are debt </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">obligations secured by equipment owned and used by the borrower or lessee (as applicable). The fund may also invest in equipment where the fund is </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the owner of the relevant equipment and the lease is considered an operating lease rather than a financing lease. Investments in equipment loans, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">finance leases and operating leases have the following principal risks:</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Credit risk;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Interest rate risk;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Structural and legal risks;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Casualty losses and insurance risks;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Changes in supply and demand;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Decreases in equipment values;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Lessee and/or borrower defaults;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Negative developments in the economy that impact the lessee/borrower;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Business interruption caused by mechanical failure, human error or force majeure events;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Failure to obtain required licenses and approvals to operate equipment or underlying business;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Liability risk as owner of equipment;</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Technological innovation rendering equipment obsolescence; and</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div><div><div style="clear:both;margin-top:4pt;position:relative;width:100%"><div style="float:left;line-height:11.0pt;text-align:left;width:4.14pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">●</div></div><div style="float:left;line-height:11.0pt;margin-left:5.86pt;text-align:left;width:543.00pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Remarketing risk.</div></div></div><div style="clear: both; position: relative; max-height: 0px;"> </div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Commercial Real Estate and Residential Real Estate Investments</div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Investments in Real Estate Investments and Real Estate Debt Generally</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund seeks to originate and acquire loans secured by commercial or residential real estate. Any deterioration of real estate fundamentals generally </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">could negatively impact the fund’s performance by making it more difficult for borrowers to satisfy their debt payment obligations, increasing the default </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">risk applicable to borrowers and making it relatively more difficult for the fund to meet its investment objective. Real estate investments are subject to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">various risks, including: (i) economic and market fluctuations; (ii) changes in environmental, zoning and other laws; (iii) casualty or condemnation </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">losses; (iv) regulatory limitations on rents; (v) decreases in property values; (vi) changes in the appeal of properties to tenants; (vii) tenant defaults; (viii) </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">changes in supply and demand; (ix) energy supply shortages; (x) various uninsured or uninsurable risks; (xi) natural disasters; (xii) changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">government regulations (such as rent control); (xiii) changes in the availability of debt financing and/or mortgage funds which may render the sale or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">refinancing of properties difficult or impracticable; (xiv) increased mortgage defaults; (xv) increases in borrowing rates; and (xvi) negative developments </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in the economy that depress travel activity, demand and real estate values generally.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Debt investments are subject to credit and interest rate risks.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated with Commercial Real Estate Loans</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Loans on commercial real estate properties generally lack standardized terms, which may complicate their structure and increase due diligence costs. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Commercial real estate properties tend to be unique and are more difficult to value than residential properties. Commercial real estate loans also tend </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to have shorter maturities than residential mortgage loans and are generally not fully amortizing, which means that they may have a significant principal </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">condition and operating history of the property and the borrower, tax laws, prevailing economic conditions and the availability of credit for loans secured </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">by the specific type of property.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Investing in commercial real estate loans is subject to cyclicality and other uncertainties. The cyclicality and leverage associated with commercial real </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">estate loans also have historically resulted in periods, including significant periods, of adverse performance, including performance that may be </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">materially more adverse than the performance associated with other investments. Commercial real estate loans generally are non-recourse to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the area, the attractiveness of properties to tenants, competition from other available space and the ability of the owner to pay leasing commissions, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">provide adequate maintenance and insurance, pay tenant improvement costs and make other tenant concessions; (iii) the failure or insolvency of tenant </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">businesses; (iv) interest rate levels and the availability of credit to refinance such loans at or prior to maturity; (v) compliance with regulatory </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">requirements and applicable laws, including environmental controls and regulations and (vi) increased operating costs, including energy costs and real </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with respect to commercial properties and such tenants may seek the protection of the bankruptcy laws, which can result in termination of lease </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">contracts. If the properties securing the loans do not generate sufficient income to meet operating expenses, debt service, capital expenditure and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">tenant improvements, the obligors under the loans may be unable to make payments of principal and interest in a timely fashion. Income from and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">availability of financing for owners and tenants and the impact of and costs of compliance with environmental controls and regulations.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:11.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated with Residential Mortgage Loans</div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in loans secured by residential real estate, including potentially mortgages made to borrowers with lower credit scores. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Accordingly, such mortgage loans may be more sensitive to economic factors that could affect the ability of borrowers to pay their obligations under the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">mortgage loans. A decline or an extended flattening of home prices and appraisal values may result in increases in delinquencies and losses on </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">residential mortgage loans, particularly with respect to second homes and investor properties and with respect to any residential mortgage loan where </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the aggregate loan amount (including any subordinate liens) is close to or greater than the related property value.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Another factor that may result in higher delinquency rates is the increase in monthly payments on adjustable-rate mortgage loans. Borrowers with </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">adjustable payment mortgage loans will be exposed to increased monthly payments when the related mortgage interest rate adjusts upward from the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Certain residential mortgage loans may be structured with negative amortization features. Negative amortization arises when the mortgage payment in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">time. Because the related mortgagors may be required to make a larger single payment upon maturity, the default risk associated with such mortgage </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">loans may be greater than that associated with fully amortizing mortgage loans.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated with Mezzanine Investments</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in mezzanine debt which has significant leverage ranking ahead of the fund’s investment. While the Subadvisor anticipates that the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investment, and will usually benefit from cross-default provisions, some or all of such terms may not be part of particular investments. The Subadvisor </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">anticipates that the fund’s usual security for its mezzanine investments will be pledges of ownership interests, directly and/or indirectly, in a </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">or any particular investment will be achieved. To protect its original investment and to gain greater control over the underlying assets, the fund may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the fund.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated With B-notes and Preferred Equity Interests</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">privately negotiated structures. To the extent the fund holds subordinated debt or mezzanine tranches of a borrower’s capital structure or preferred </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">equity interests, such investments and the fund’s remedies with respect thereto, including the ability to foreclose on any collateral securing such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">intercreditor and/or participation agreement provisions, which will expose the fund to greater risk of loss.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">As the terms of such loans and investments are subject to contractual relationships among lenders, co-lending agents and others, they can vary </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">significantly in their structural characteristics and other risks. For example, the rights of holders of B-notes to control the process following a borrower </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">default may vary from transaction to transaction. Further, B-notes typically are secured by a single property and accordingly reflect the risks associated </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with significant concentration.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated with Construction Loans</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in mortgage loans used to finance the cost of construction or rehabilitation of a property, including ground up construction. Such </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">construction lending may expose the fund to increased lending risks. Construction loans generally expose a lender to greater risk of non‑payment and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">loss than permanent commercial mortgage loans because repayment of the loans often depends on the borrower’s ability to secure permanent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">“take‑out” financing, which requires the successful completion of construction and stabilization of the project, or operation of the property with an </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">income stream sufficient to meet operating expenses, including debt service on such replacement financing. For construction loans, increased risks </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">affected by unanticipated construction delays and cost over‑runs. Construction delays and cost over-runs may result from increasing costs or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">shortages of skilled labor and/or framing, concrete, steel and other building materials, environmental damage, delays in obtaining the requisite </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">approvals, permits, licenses or certifications from the relevant authorities, legal actions, work stoppages, operational issues relating to construction, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">budget overruns and lack of financing. Construction loans typically involve an expectation that the borrower’s sponsors will contribute sufficient equity </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">inability to complete construction. Construction loans also expose the lender to additional risks of contractor non‑performance, or borrower disputes </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">with contractors resulting in mechanic’s or materialmen’s liens on the property and possible further delay in construction.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 bre<div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ach 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. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Furthermore, construction</div> loans may have multiple lenders and if another lender fails to fund its obligations, the fund could be faced with the choice of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">either funding for that defaulting lender or suffering a delay or protracted interruption in the progress of construction.</div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Consumer-Related Asset-Backed Securities</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;"><div style="font-weight:bold;display:inline;">Asset-Backed Securities.</div></div></div> <br/><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;"><div style="font-weight:bold;display:inline;">See Asset-Backed Securities below.</div></div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Consumer Finance Industry Regulatory Environment</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">including supervision and licensing by numerous governmental entities. These laws and regulations may create significant constraints on the fund’s </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">consumer finance investments and result in significant costs related to compliance. Failure to comply with these laws and regulations could impair the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ability of the fund to continue to make such investments and result in substantial civil and criminal penalties, monetary damages, attorneys’ fees and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">costs, possible revocation of licenses, and damage to reputation, brand and customer relationships.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The Dodd-Frank Act imposes significant regulatory oversight on the financial industry and grants the Consumer Financial Protection Bureau, or the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">CFPB, extensive rulemaking and enforcement authority, all of which may substantially impact the fund’s consumer finance investments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may also invest in other consumer debt and specialty finance markets, including, but not limited to, credit card receivables, asset-backed </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulatory relief transactions, litigation finance, royalty transactions, equipment (e.g., renewable energy, construction, information technology, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">medical, logistics) and insurance-linked contracts.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Noncompliance with Consumer Financial Protection Laws</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Associated with Corporate Asset-Based Credit</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in asset-based corporate credit secured by real estate, equipment, receivables, inventory and intellectual property rights. A </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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) </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">an economic downturn, (iii) poor performance by their management teams, (iv) legal, tax or regulatory changes, (v) a change in the competitive </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">environment, or (vi) a force majeure event. The companies may be operating at a loss or have significant variations in operating results, or may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">otherwise be experiencing financial distress even when the Subadvisor expects them to remain stable. Additionally, the companies may require </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">For further information, see “Asset-Backed Securities” below.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Liquid Securitized Credit</div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Associated with Corporate Asset-Based Credit</div></div></div></div><div style="line-height:12.0pt;margin-top:2pt;text-align:left"><div style="margin-top:2pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">For the risks of investing in asset-back securities, see “Asset-Backed Securities” below.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Commercial Mortgage-Backed Securities</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Collateral underlying CMBS generally consists of mortgage loans secured by income producing property, such as regional malls, other retail space, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">office buildings, industrial or warehouse properties, hotels, rental apartments, nursing homes, senior living centers and self-storage properties. The </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">fund may invest directly in CMBS. Performance of a commercial mortgage loan depends primarily on the net income generated by the underlying </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">mortgaged property. The market value of a commercial property similarly depends on its income-generating ability. As a result, income generation will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Most commercial mortgage loans underlying CMBS are effectively non-recourse obligations of the borrower, meaning that there is no recourse against </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">and interest owed on such mortgage loans, payments on the subordinated classes of the related CMBS are likely to be adversely affected. The ultimate </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the mortgage note, or the foreclosure (or deed in lieu of foreclosure) of the mortgage encumbering the property and subsequent liquidation of the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">property, its physical condition and financial performance, environmental risks and governmental disclosure requirements with respect to the condition </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">used to make payments to others, maintain insurance coverage, pay taxes or pay maintenance costs. Such diverted revenue is generally not recoverable </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">underlying commercial mortgage loans. The CMBS holder typically has no right directly to enforce compliance by the borrowers with the terms of the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">nor to move directly against the collateral supporting the related loans.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">At any one time, a portfolio of CMBS may be backed by commercial mortgage loans with disproportionately large aggregate principal amounts secured </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">areas, such as adverse economic conditions, adverse events affecting industries located in such areas and natural hazards affecting such areas, than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">would be the case for a pool of mortgage loans having more diverse property locations.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Residential Mortgage-Backed Securities</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Holders of RMBS bear various risks, including credit, market, interest rate, structural and legal risks. RMBS represent interests in pools of residential </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">mortgage loans secured by one to four family residential mortgage loans. Residential mortgage loans may be prepaid at any time. Residential mortgage </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">loans are obligations of the borrowers thereunder only and are not typically insured or guaranteed by any other person or entity, although such loans </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">may be securitized by government agencies and the securities issued may be guaranteed. The rate of defaults and losses on residential mortgage loans </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">will be affected by a number of factors, including general economic conditions and those in the geographic area where the related mortgaged property </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">borrower. If a residential mortgage loan is in default, foreclosure of such residential mortgage loan may be a lengthy and difficult process, and may </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">involve significant expenses. Furthermore, the market for defaulted residential mortgage loans or foreclosed single-family properties may be very </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">limited.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">At any one time, a portfolio of RMBS may be backed by residential mortgage loans with disproportionately large aggregate principal amounts secured </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">areas, such as adverse economic conditions, adverse events affecting industries located in such areas and natural hazards affecting such areas, than </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">would be the case for a pool of mortgage loans having more diverse property locations.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Prepayments on the underlying residential mortgage loans in an issue of RMBS will be influenced by the prepayment provisions of the related mortgage </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">notes and may also be affected by a variety of economic, geographic and other factors, including the difference between the interest rates on the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">underlying residential mortgage loans (giving consideration to the cost of refinancing) and prevailing mortgage rates and the availability of refinancing. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">RMBS are particularly susceptible to prepayment risks as they generally do not contain prepayment penalties and a reduction in interest rates will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">increase the prepayments on the RMBS, resulting in a reduction in yield to maturity for holders of such securities.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Risks Associated With “B-pieces”</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the most subordinated tranches issued by a CMBS, RMBS or other securitization. Although CMBS and RMBS generally have the benefit of first ranking </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">distributions only after more senior classes of CMBS and RMBS have been paid in full, and receive interest distributions only after the interest </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">senior classes may cause the repayment of principal of such “B-pieces” to be delayed and/or reduced. Generally, all principal payments received on the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">interest that might otherwise be made by the related servicer.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">CLOs</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">recognized on such securities or assets will no longer inure to the benefit of the fund.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The market value of CLOs and other structured vehicles will generally fluctuate with, among other things, the financial condition of the obligors on the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">underlying debt obligations or, with respect to synthetic securities, of the obligors on or issuers of the reference obligations, general economic </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">conditions, the condition of certain financial markets, political events, developments or trends in any particular industry and changes in prevailing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">interest rates. The performance of CLOs and other structured vehicles will be adversely affected by macroeconomic factors, including the following: (i) </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">general economic conditions affecting capital markets and participants therein; (ii) the economic downturns and uncertainties affecting economies and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">capital markets worldwide; (iii) concerns about financial performance, accounting and other issues relating to various publicly traded companies; and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">(iv) recent and proposed changes in accounting and reporting standards and bankruptcy legislation. In addition, interest payments on CLOs and other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">structured vehicles (other than the most senior tranche or tranches of a given issue) are generally subject to deferral. If distributions on the collateral </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">underlying a CLO and other structured vehicle security are insufficient to make payments on the CLOs and other structured vehicles, no other assets will </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">be available for payment of the deficiency and following realization of the underlying assets, the obligations of the CLO or other structured vehicle issuer </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">to pay such deficiency will be extinguished. CLOs and other structured vehicles (particularly the subordinated interests) may provide that, to the extent </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">(including the fund) will not have available to them any associated default remedies.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">CMOs</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may invest in mortgage-backed securities called CMOs. CMOs are issued in separate classes with different stated maturities. As the mortgage </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">pool experiences prepayments, the pool pays off investors in classes with shorter maturities first. By investing in CMOs, the fund may manage the </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">prepayment risk of mortgage-backed securities. However, prepayments may cause the actual maturity of a CMO to be substantially shorter than its </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">stated maturity.</div></div></div>
<div style="line-height:12.0pt;margin-top:5pt;text-align:left"><div style="margin-top:5pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Asset-Backed Securities</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The investment characteristics of ABS differ from traditional debt securities. Among the major differences are that interest and principal payments are </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">not have the benefit of the same security interest in the related collateral (e.g., automobile loans or leases, student loans or other consumer loans). </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">There is a possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on these securities. Further, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">unlike traditional debt securities, which may pay a fixed rate of interest until maturity when the entire principal amount comes due, payments on certain </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">ABS include both interest and a partial payment of principal. This partial payment of principal may be composed of a scheduled principal payment as </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">well as an unscheduled payment from the voluntary prepayment, refinancing or foreclosure of the underlying collateral. As a result of these </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">unscheduled payments of principal, or prepayments on the underlying collateral, the price and yield of ABS can be adversely affected.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">than mortgage loans and is less likely to experience substantial prepayments. As with mortgage-backed securities, ABS are often backed by a pool of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">assets representing the obligations of a number of different parties and use credit enhancement techniques such as letters of credit, guarantees or </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the servicing agent for the collateral pool, the originator of the financial obligations or the financial institution providing any credit enhancement, as well </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">as by the expiration or removal of any credit enhancement.</div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Residual Interests</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The fund may make substantial investments in unsecured equity tranches and equivalent junior subordinate securities of structured finance vehicles. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Such residuals will represent subordinated interests in the relevant structured finance vehicle only and are not secured by any assets of such structured </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">finance vehicle. Residuals will be subordinated to all other securities of the structured finance vehicle and all other amounts due under the priority of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">creditors, whether secured or unsecured and known or unknown, of the structured finance vehicle.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">The investment in residuals will expose the fund to the highly leveraged investments in the collateral securing the other obligations of, and securities </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issued by, the structured finance vehicle. Therefore, the market value of these investments would be anticipated to be significantly affected by, among </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">vehicle structures, changes in the value of the residuals could be greater than the changes in the values of the underlying collateral, the assets </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">constituting which are subject to, among other things, credit and liquidity risk. Accordingly, “equity” or subordinated interests and note classes may not </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">the assets, prepayment on assets and availability, price and interest rates of assets. Investors must consider with particular care the risks of leverage in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">residuals because, although the use of leverage creates an opportunity for substantial returns for the fund on the residuals, it increases substantially </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">is adversely affected by market developments.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">in the context of a more senior position.</div></div></div>
<div style="line-height:12.0pt;margin-top:5pt;text-align:left"><div style="margin-top:5pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Credit Risk Transfers and Significant Risk Transfer Assets</div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Regulatory Capital Relief Investments</div></div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; line-height: 11pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;"> </div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Regulatory capital relief investments are credit risk transfers (“CRTs”) or significant risk transfers (“SRTs”). These transactions enable a bank or other </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">issuer to transfer the credit risk associated with a pool of underlying obligations (or “reference assets”) to investors, such as the fund, in order to obtain </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulatory capital relief, risk limit relief, and/or credit risk hedging with respect to the reference assets. Regulatory capital relief investments are often </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">structured as credit-linked notes. The fund intends to invest in credit-linked notes issued by large multi-national North American and European banks. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">These credit-linked notes may reference a variety of bank balance sheets assets, including revolving credit facilities and term loans backed by large, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">medium and small enterprises, commercial real estate loans, auto loans, mortgages, equipment loans and leases, trade receivables and </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">farm/agricultural loans, among others. The fund may also enter into regulatory capital relief trades with other financial institutions.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Under these transactions, a third-party investor (e.g., the fund), agrees to absorb losses on a designated loan portfolio in exchange for a protection </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">payment, which for a credit-linked note would be structured as an interest coupon. The coupon is typically floating rate, with the coupon spread </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">negotiated before closing based on the level of perceived credit protection the bank is receiving relative to the level of risk the investor is undertaking. </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">By transferring the risk of credit losses from these assets away from a bank's balance sheet, the bank can reduce the amount of regulatory capital it is </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">required to hold against the reference assets without having to take actions such as selling assets or raising equity capital.</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Under any such trades into which the fund enters, the fund will be exposed to the credit risk of the underlying portfolio, and if the loans in the portfolio </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">default – which may be more likely if there is a general deterioration in credit markets – the principal of the fund’s credit-linked notes will be used to </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">cover the losses. There may be a risk that the international regulatory framework for banks (known as 'Basel III') of the Bank for International </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">Settlements, when fully implemented, may discourage such regulatory capital relief trades and/or may force banks to unwind some or all existing </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">transactions. Most existing credit-linked note transactions can be unwound at the option of the issuer (typically a bank) to address changes in </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">regulation, in which case the then-outstanding principal balance of an investor’s credit-linked notes would be returned to the investor, net of amounts </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">previously drawn to cover losses.</div></div></div>
<div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Risks Related to Specialty Finance</div></div></div></div><div style="line-height:11.0pt;margin-top:9pt;text-align:left"><div style="margin-top:9pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; font-style: normal; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-style:italic;display:inline;">Litigation Finance</div></div></div></div><div style="line-height:12.0pt;margin-top:6pt;text-align:left"><div style="margin-top:6pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">secured by litigation proceeds, or where the recipient of financing is not obligated to make any payment unless and until litigation proceeds are actually </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">favor. Other risks the fund may face in connection with these financing activities include, without limitation: (i) losses from terminated or rejected </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">collect, or timing uncertainty relating to collection on, judgments or awards; (iv) lack of control over decisions of lawyers acting pursuant to their </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">professional duties in connection with formulating and implementing litigation strategies or otherwise; (v) expenses and uncertainties involving reliance </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">on outside counsel and experts; (vi) changes in law, regulations or professional standards on such financing activities; (vii) poor case selection and case </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">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 </div></div></div><div style="line-height:12.0pt;text-align:left"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">settlement; (xii) general competition and industry-related risks; (xiii) conflicts of interest; and (xiv) issues associated with the treatment of these types of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">investments for tax purposes.</div></div>
<div style="line-height:12.0pt;margin-top:10pt;text-align:left"> <div style="margin-top:10pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 10pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="font-weight:bold;display:inline;">Authorized Shares</div></div> </div> </div> <div style="line-height:12.0pt;margin-top:2pt;text-align:left"> <div style="margin-top:2pt"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">As of </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">February</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; line-height: 12pt; letter-spacing: 0px; top: 0px;display:inline;"> </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">3</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">, </div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">2025</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;">, there are three classes of Shares authorized as follows:</div><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 1pt; line-height: 1pt; letter-spacing: 0px; top: 0px;display:inline;"> </div></div></div> </div>
<table cellpadding="0" cellspacing="0" style="text-align:start; border-bottom:0.5pt solid #D9D9D9;empty-cells:show;width:558pt">
<tr style="height:46pt">
<td style="background-color:#FFFFFF;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:248.9pt"> <div style="line-height:12.0pt;text-align:left"> <div style="margin-right:6pt;text-align:Left;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">(1) Title of Class</div></div></div> </div> </td>
<td style="background-color:#FFFFFF;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:104.8pt"> <div style="line-height:12.0pt;text-align:left"> <div style="margin-left:4pt;margin-right:4pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">(2) Amount Authorized</div></div></div> </div> </td>
<td style="background-color:#FFFFFF;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:106.65pt"> <div style="line-height:12.0pt;text-align:left"> <div style="margin-left:4pt;margin-right:4pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; 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></div> <div style="margin-left:4pt;margin-right:4pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; 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></div> <div style="margin-left:4pt;margin-right:4pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Account</div></div></div> </div> </td>
<td style="background-color:#FFFFFF;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Bottom;width:97.65pt"> <div style="line-height:12.0pt;text-align:left"> <div style="margin-left:4pt;margin-right:-2pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; 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></div> <div style="margin-left:4pt;margin-right:-2pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Outstanding Exclusive</div></div></div> <div style="margin-left:4pt;margin-right:-2pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; 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></div> <div style="margin-left:4pt;margin-right:-2pt;text-align:Right;white-space:nowrap"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; letter-spacing: 0px; top: 0px;display:inline;"><div style="-sec-ix-redline:true;display:inline;font-weight:bold;display:inline;">Under (3)</div></div></div> </div> </td> </tr>
<tr style="height:13pt">
<td style="background-color:azure;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:248.9pt"> <div style="line-height:12.0pt;text-align:left"> <div style="margin-right:6pt;text-align:Left;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;display:inline;">Class I</div></div></div> </div> </td>
<td style="background-color:azure;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;white-space:nowrap;width:104.8pt"> <div style="line-height:12.0pt;margin-left:6pt;margin-right:6pt;text-align:right;width:92.8pt"> <div style="display:flex;margin-left:auto;width:37.94pt"> <div style="display:flex;white-space:nowrap;width:37.94pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; width: 37.94pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Unlimited</div></div> </div> </div> </td>
<td style="background-color:azure;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;white-space:nowrap;width:106.65pt"> <div style="line-height:12.0pt;margin-left:6pt;margin-right:6pt;text-align:right;width:94.65pt"> <div style="display:flex;margin-left:auto;width:7.33pt"><div style="-sec-ix-redline:true;display:flex;margin-left:auto;width:7.33pt"> <div style="display:flex;white-space:nowrap;width:7.33pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; width: 7.33pt; letter-spacing: 0px; top: 0px;display:inline;">0</div></div> </div> </div> </div> </td>
<td style="background-color:azure;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;white-space:nowrap;width:97.65pt"> <div style="line-height:12.0pt;margin-left:6pt;text-align:right;width:91.65pt"> <div style="display:flex;margin-left:auto;width:44.08pt"><div style="-sec-ix-redline:true;display:flex;margin-left:auto;width:44.08pt"> <div style="display:flex;white-space:nowrap;width:44.08pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; width: 44.08pt; letter-spacing: 0px; top: 0px;display:inline;">9,234,444</div></div> </div> </div> </div> </td> </tr>
<tr style="height:13pt">
<td style="background-color:#FFFFFF;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;width:248.9pt"> <div style="line-height:12.0pt;text-align:left"> <div style="margin-right:6pt;text-align:Left;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;display:inline;">Class S</div></div></div> </div> </td>
<td style="background-color:#FFFFFF;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;white-space:nowrap;width:104.8pt"> <div style="line-height:12.0pt;margin-left:6pt;margin-right:6pt;text-align:right;width:92.8pt"> <div style="display:flex;margin-left:auto;width:37.94pt"> <div style="display:flex;white-space:nowrap;width:37.94pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; width: 37.94pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Unlimited</div></div> </div> </div> </td>
<td style="background-color:#FFFFFF;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;white-space:nowrap;width:106.65pt"> <div style="line-height:12.0pt;margin-left:6pt;margin-right:6pt;text-align:right;width:94.65pt"> <div style="display:flex;margin-left:auto;width:7.33pt"><div style="-sec-ix-redline:true;display:flex;margin-left:auto;width:7.33pt"> <div style="display:flex;white-space:nowrap;width:7.33pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; width: 7.33pt; letter-spacing: 0px; top: 0px;display:inline;">0</div></div> </div> </div> </div> </td>
<td style="background-color:#FFFFFF;border-bottom:0.5pt solid #D9D9D9;padding-bottom:1.625pt;padding-top:1.625pt;vertical-align:Top;white-space:nowrap;width:97.65pt"> <div style="line-height:12.0pt;margin-left:6pt;text-align:right;width:91.65pt"> <div style="display:flex;margin-left:auto;width:44.08pt"><div style="-sec-ix-redline:true;display:flex;margin-left:auto;width:44.08pt"> <div style="display:flex;white-space:nowrap;width:44.08pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; width: 44.08pt; letter-spacing: 0px; top: 0px;display:inline;">2,525</div></div> </div> </div> </div> </td> </tr>
<tr style="height:12.5pt">
<td style="background-color:azure;padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;width:248.9pt"> <div style="line-height:11pt;text-align:left"> <div style="margin-right:6pt;text-align:Left;white-space:nowrap"><div style="-sec-ix-redline:true;display:inline;"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; margin-left: 0pt; letter-spacing: 0px; top: 0px;display:inline;">Class D</div></div></div> </div> </td>
<td style="background-color:azure;padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;white-space:nowrap;width:104.8pt"> <div style="line-height:11pt;margin-left:6pt;margin-right:6pt;text-align:right;width:92.8pt"> <div style="display:flex;margin-left:auto;width:37.94pt"> <div style="display:flex;white-space:nowrap;width:37.94pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; width: 37.94pt; letter-spacing: 0px; top: 0px;-sec-ix-redline:true;display:inline;">Unlimited</div></div> </div> </div> </td>
<td style="background-color:azure;padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;white-space:nowrap;width:106.65pt"> <div style="line-height:11pt;margin-left:6pt;margin-right:6pt;text-align:right;width:94.65pt"> <div style="display:flex;margin-left:auto;width:7.33pt"><div style="-sec-ix-redline:true;display:flex;margin-left:auto;width:7.33pt"> <div style="display:flex;white-space:nowrap;width:7.33pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; width: 7.33pt; letter-spacing: 0px; top: 0px;display:inline;">0</div></div> </div> </div> </div> </td>
<td style="background-color:azure;padding-bottom:2pt;padding-top:1.625pt;vertical-align:Top;white-space:nowrap;width:97.65pt"> <div style="line-height:11pt;margin-left:6pt;text-align:right;width:91.65pt"> <div style="display:flex;margin-left:auto;width:44.08pt"><div style="-sec-ix-redline:true;display:flex;margin-left:auto;width:44.08pt"> <div style="display:flex;white-space:nowrap;width:44.08pt"><div style="color: rgb(0, 0, 0); font-family: "Arial Narrow"; font-size: 9pt; width: 44.08pt; letter-spacing: 0px; top: 0px;display:inline;">5,845</div></div> </div> </div> </div> </td> </tr> </table>
Class I
0
9234444
Class S
0
2525
Class D
0
5845
The sales load will neither constitute an investment made by the investor in the fund nor form part of the assets of 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.
If the interval between the date of purchase of Shares and the date in which Shares are repurchased is less than one year, then such repurchase will be subject to a 2.00% early withdrawal fee payable to the fund. In determining whether the repurchase of Shares is subject to an early withdrawal fee, the fund will repurchase those Shares held longest first.
The Advisor shall be paid at the end of each calendar month a fee at the annual rate of 1.350% of the average monthly value of the Managed Assets of the fund (the “Management Fee”). The term “Managed Assets” means the total assets of the fund (including any assets attributable to any preferred shares that may be issued or to indebtedness), minus the fund’s liabilities incurred in the normal course of operations other than liabilities relating to indebtedness.
In connection with Class S Shares of the fund, the fund pays a Distribution and Service Fee equal to 0.85% per annum of the aggregate value of the fund's Class S Shares outstanding and in connection with Class D Shares of the fund, the fund pays a Distribution and Service Fee equal to 0.25% per annum of the aggregate value of the fund's Class D shares, determined as of the last calendar day of each month (prior to any repurchases of Shares and prior to the Management Fee being calculated). The Distribution and Service Fee is payable monthly. The Distributor may pay all or a portion of the Distribution and Service Fee to the broker-dealers that sell Shares of the fund or provide investor services and/or administrative assistance to Shareholders. See “Distribution and Service Fee” below.
The Advisor is also paid an Incentive Fee if certain income-based targets are met. The Incentive Fee is described below under “Management of the Fund - Advisory Agreement”. The fund anticipates that it may have net investment income that could result in the payment of an Incentive Fee to the Advisor during certain periods. However, the Incentive Fee is based on the fund meeting certain net investment income targets and will not be paid unless the fund achieves those targets. The fund expects the Incentive Fee the fund pays to increase to the extent the fund earns greater net investment income through its investments. The amount presented in this table reflects the Incentive Fee incurred as a percent of average net assets for the fiscal period ended October 31, 2024. See “Management of the Fund - Advisory Agreement” for a full explanation of how the Incentive Fee is calculated. It is anticipated that an Incentive Fee may be earned during the current fiscal year.
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 0.60% 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) organizational and offering expenses; (l) transfer agent fees and service fees; (m) other miscellaneous ordinary expenses, but excluding (1) advisory and incentive 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 (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.