The Fund normally will invest
in at least three countries (one of which may be the United States). Typically, the Fund invests in a number of different countries. The Fund is not required to allocate its investments in any set percentages in any particular
countries.
In addition to common stocks, the Fund can invest in
preferred stocks. The Fund may purchase American Depositary Shares (ADS) as part of American Depositary
Receipt (ADR) issuances, which are negotiable certificates issued by a U.S. bank representing a specified number of shares in a foreign stock traded on a U.S. exchange.
The portfolio manager primarily looks for quality companies, regardless of domicile,
that have sustainable growth. This investment approach combines a thematic approach to idea generation with bottom-up, fundamental company analysis. The portfolio manager seeks to identify secular changes in the world and looks for pockets
of durable change that he believes will drive global growth for the next decade. These large scale
structural themes are referred to collectively as MANTRA®: Mass Affluence, New Technology, Restructuring, and Aging. The portfolio manager does not target a fixed allocation with regard to any particular theme, and may choose to focus on various sub-themes within each
theme. Within each sub-theme, the portfolio manager employs fundamental company analysis to select
investments for the Fund’s portfolio. The economic characteristics sought include a combination of high return on invested capital, good cashflow characteristics, high barriers to entry, dominant market share, a strong competitive position, talented
management, and balance sheet strength that the portfolio manager believes will enable the company to fund
its own growth. These criteria may vary. The portfolio manager also considers how industry dynamics, market
trends and general economic conditions may affect a company’s earnings outlook.
The portfolio manager has a long-term investment horizon of typically three to five
years. The portfolio manager also has a contrarian buy discipline; he buys high quality companies that fit the investment criteria when he believes valuations underestimate long-term earnings potential. For example, a company’s stock price may
dislocate from its fundamental outlook due to a short-term earnings glitch or negative, short-term market
sentiment, which can give rise to an investment opportunity. The portfolio manager monitors individual
issuers for changes in earnings potential or other effects of changing market conditions that may trigger a decision to sell a security, but do not require a decision to do so.
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.
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.
European Investment Risk.
The Economic and Monetary Union (the “EMU”) of the European Union (the “EU”)
requires compliance with restrictions on inflation rates, deficits, interest rates, debt levels and fiscal
and monetary controls, each of which may significantly affect every country in Europe. Decreasing imports
or exports, changes in governmental or EU regulations on trade, changes in the exchange rate of the euro, the default or threat of default by an EU member country on its sovereign debt, and recessions in an EU member country may have
significant adverse effects on the economies of EU member countries. Responses to financial problems by EU
countries may not produce the desired results, may limit future growth and economic recovery, may result in social unrest, or have other unintended consequences. Further defaults or restructurings by governments and other entities of their debt could have
additional adverse effects on economies, financial markets, and asset valuations around the world. A number
of countries in Eastern Europe remain relatively undeveloped and can be particularly sensitive to political and economic developments. Separately, the EU faces issues involving its membership, structure, procedures and policies. The exit of
one or more member states from the EU, such as the departure of the United Kingdom (the “UK”),
referred to as “Brexit”, could place the departing member's currency and banking system under
severe stress or even in jeopardy. An exit by other member states will likely result in increased volatility, illiquidity and potentially lower economic growth in the affected markets, which will adversely affect the Fund’s
investments.
Emerging Market Securities
Risk. Emerging markets (also referred to as developing markets) are generally subject to greater market volatility, political, social and economic
instability, uncertain trading markets and more governmental limitations on foreign investment than more developed