by companies or entities not meeting the above
requirement or debt securities (including convertible debt) of issuers worldwide.
Companies located or operating in Greater China include (i) companies and other entities having their
registered office in Greater China, their governments or any of their respective agencies or instrumentalities or any local government, (ii) companies and other entities located outside Greater China carrying out their business activities
principally (50% or more by revenue, profit, assets or production) in Greater China, (iii) holding
companies, the interests of which are principally invested in subsidiary companies with a registered office
in Greater China, or (iv) companies whose “country of risk” is a country in Greater China as determined by a third party service provider.
The Fund invests primarily in equity securities, including depositary receipts,
common stock, preferred stock, convertible securities and participation notes. The Fund also invests in China A-shares (shares of companies based in mainland China that trade on the Shanghai Stock Exchange and the Shenzhen Stock
Exchange).
The Fund may invest in the securities of issuers of all
capitalization sizes and may hold a significant amount of its net assets in the securities of small- and
mid-capitalization issuers.
The Fund may invest up to 100% of its net assets in foreign securities, including
securities of issuers located in emerging markets countries, i.e., those that are generally in the early stages of their industrial cycles.
The Fund may invest in illiquid or thinly traded securities. The Fund may also invest
in securities that are subject to resale restrictions such as those contained in Rule 144A promulgated under the Securities Act of 1933, as amended.
In
selecting securities to buy and sell, the Fund’s portfolio managers will apply an actively managed bottom-up fundamental analysis with a ‘sustainable value’ investment style. This means that the portfolio managers focus on acquiring companies
the portfolio managers believe have sustainable leadership positions and competitive advantages when they
trade at a discount to their perceived or estimated value. In the security selection process, the portfolio
managers will consider three main factors, including valuation, management/franchise value determination (including management and ownership, earnings quality, balance sheet quality and product quality), and earnings
growth.
The portfolio managers will consider whether to sell a
particular security when the portfolio managers lose confidence in the issuer’s management, or the
issuer shows an inability to sustain clear industry leadership or competitive advantages (market share, technology, scale, etc.) or potential to become a leader in the industry.
Principal Risks of Investing in the Fund
As with any mutual fund investment, loss of money is a risk of investing. An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. The risks associated with an investment in the Fund can increase during times of significant market volatility. The
principal risks of investing in the Fund are:
Market Risk. The market values of the Fund’s investments, and therefore the value of the Fund’s shares, will go up and
down, sometimes rapidly or unpredictably. Market risk may affect a single issuer, industry or section of
the economy, or it may affect the market as a whole. The value of the Fund’s investments may go up or down due to general market conditions that are not specifically related to the particular issuer, such as real or perceived adverse economic
conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health
issues, war, military conflict, acts of terrorism, economic crisis or adverse investor sentiment generally. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well,
there can be no assurance that specific investments held by the Fund will rise in value.
Investing in Stocks Risk. The value of the Fund’s portfolio may be affected by changes in the stock markets. Stock markets may experience
significant short-term volatility and may fall or rise sharply at times. Adverse events in any part of the
equity or fixed-income markets may have unexpected negative effects on other market segments. Different stock
markets may behave differently from each other and U.S. stock markets may move in the opposite direction
from one or more foreign stock markets.
The prices of individual stocks generally do not
all move in the same direction at the same time. However, individual stock prices tend to go up and down
more dramatically than those of certain other types of investments, such as bonds. A variety of factors can negatively affect the price of a particular company’s stock. These factors may include, but are not limited to: poor earnings reports, a
loss of customers, litigation against the company, general unfavorable performance of the company’s sector or industry, or changes in government regulations affecting the company or its industry. To the extent that securities of a
particular type are emphasized (for example foreign stocks, stocks of small- or mid-cap companies, growth or
value stocks, or stocks of companies in a particular industry), fund share values may fluctuate more in
response to events affecting the market for those types of securities.
Depositary Receipts Risk. Investing in
depositary receipts involves the same risks as direct investments in foreign securities. In addition, the
underlying issuers of certain depositary receipts are under no obligation to distribute shareholder
communications or pass through any voting rights with respect to the deposited securities to the holders of such receipts. The Fund may therefore receive less timely information or have less control than if it invested directly in the foreign
issuer.
Foreign Securities Risk. The Fund's foreign investments may be adversely affected by political and social instability, changes in economic or taxation policies, difficulty in
enforcing obligations, decreased liquidity or increased volatility. Foreign investments also involve the risk of the possible seizure, nationalization or expropriation of the issuer or foreign deposits (in which the Fund could lose its entire
investments in a certain market) and the possible adoption of foreign governmental restrictions such as exchange controls. Foreign companies generally may be subject to less stringent regulations than U.S. companies, including
financial reporting requirements and auditing and accounting controls, and may therefore be more
susceptible to fraud or corruption. There may be less public information available about foreign companies
than U.S. companies, making it difficult to evaluate those foreign companies. Unless the Fund has hedged its
foreign currency exposure, foreign securities risk also involves the risk of negative foreign currency rate
fluctuations, which may cause the value of securities denominated in such foreign currency (or other instruments through which the Fund has exposure to foreign currencies) to decline in value. Currency exchange rates may fluctuate
significantly over short periods of time. Currency hedging strategies, if used, are not always
successful.
Investing in Greater China Risk. Investments in companies located or operating in Greater China (normally considered to be the geographical area that includes mainland China, Hong Kong,
Macau and Taiwan) involve risks and considerations not typically associated with investments in the U.S.
and other Western nations, such as greater government control over the economy; political, legal and regulatory uncertainty; nationalization, expropriation, or confiscation of property; lack of willingness or ability of the Chinese government to support the
economies and markets of the Greater China region; lack of publicly available information and difficulty in obtaining information necessary for investigations into and/or litigation against Chinese companies, as well as in obtaining
and/or enforcing judgments; limited legal remedies for shareholders; alteration or discontinuation of
economic reforms; military conflicts and the risk of war, either internal or with other countries; public
health emergencies resulting in market closures, travel restrictions, quarantines or other interventions; inflation, currency fluctuations and fluctuations in inflation and interest rates that may have negative effects on the economy and
securities markets of Greater