Credit
Risk. Debt issuers and other counterparties may be unable or unwilling to make timely interest and/or principal payments when due or otherwise honor their obligations. Changes in
an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may
also adversely affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on an issuer's or counterparty's financial condition and on the terms of an obligation.
Interest Rate Risk. Interest rate risk refers to the risk of fluctuations in the value of a fixed-income security due to changes in the general level of interest rates. Interest
rate changes can be sudden and unpredictable and are influenced by a number of factors, including
government policy, monetary policy, inflation expectations, perceptions of risk, and supply and demand for
fixed-income securities. An increase in interest rates generally will cause the value of fixed-income
securities to decline. Securities with longer maturities generally are more sensitive to interest rate
changes and subject to greater fluctuations in value. Changes in interest rates may have unpredictable
effects on fixed-income markets and result in heightened volatility and lower liquidity for certain
instruments, which may adversely affect a Fund’s performance. During periods of very low or negative interest rates, a Fund may be unable to maintain positive returns or pay dividends to shareholders.
Risk of Investing in Developed Countries. The Fund’s investment in
developed country issuers will subject the Fund to legal, regulatory, political, currency, security, economic and other risks associated with developed countries. Developed countries tend to represent a significant portion of the global
economy and have generally experienced slower economic growth than some less developed countries. Certain
developed countries have experienced security concerns, such as war, terrorism and strained international
relations. Incidents involving a country’s or region’s security may cause uncertainty in its markets and may adversely affect its economy and the Fund’s investments. In addition, developed countries may be adversely
impacted by changes to the economic conditions of certain key trading partners, regulatory burdens, debt
burdens and the price or availability of certain commodities.
Market Risk. The Fund could lose money over short periods due to short-term market movements and over longer periods during more prolonged market downturns. Local, regional or global events such as war, acts of terrorism, pandemics or other
public health issues, recessions, the prospect or occurrence of a sovereign default or other financial
crisis, or other events could have a significant impact on the Fund and its investments and could
result in increased premiums or discounts to the Fund’s NAV.
Index-Related Risk. The Index Provider may rely on
various sources of information to assess the criteria of components of the Underlying Index, including
information that may be based on assumptions and estimates. Neither the Fund nor BFA can offer assurances
that the Index Provider’s methodology or sources of information will provide an accurate assessment of included components or will result in the Fund meeting its investment objective. Errors in index data, index computations or the
construction of the Underlying Index in accordance with its methodology may occur, and the Index Provider
may not identify
or correct them promptly or at all, which may have an adverse
impact on the Fund and its shareholders. Unusual market conditions or other unforeseen circumstances (such
as natural disasters, political unrest or war) may impact the Index Provider or a third-party data provider
and could cause the Index Provider to postpone a scheduled rebalance. This could cause the Underlying Index
to vary from its normal or expected composition.
Asset Class Risk. The securities and other assets in the Underlying Index or in the Fund’s portfolio may underperform in comparison to financial markets generally, a
particular financial market, another index, or other asset classes.
Authorized Participant Concentration Risk.
An “Authorized
Participant” is a member or
participant of a clearing agency registered with the SEC, which has a written agreement with the Fund or
one of its service providers that allows the Authorized Participant to place orders for the purchase and redemption of creation units (“Creation Units”). Only an Authorized Participant may
engage in creation or redemption transactions directly with the Fund. There are a limited number of institutions that may act as Authorized Participants for the Fund, including on an agency basis on behalf of other market participants. No
Authorized Participant is obligated to engage in creation or redemption transactions. To the extent that
Authorized Participants exit the business or do not place creation or redemption orders for the Fund and no
other Authorized Participant places orders, Fund shares are more likely to trade at a premium or discount to NAV and possibly face trading halts or delisting.
Call Risk. During periods of falling interest rates, an issuer of a callable bond held by the Fund may “call” or repay the security before its stated maturity, and the Fund may have to reinvest the proceeds in securities with lower yields, which would result in a decline in the Fund's income, or in securities with
greater risks or with other less favorable features.
Concentration Risk. The Fund may be susceptible to an increased risk of loss, including losses due to adverse events that affect the Fund’s investments more than the
market as a whole, to the extent that the Fund’s investments are concentrated in the securities or
other assets of one or more issuers, countries or other geographic units, markets, industries, project types, or asset classes.
Consumer Goods and Services Companies Risk. Consumer goods and services companies (“consumer
companies”) face risks related
to changes in consumer preferences and disposable income, commodity prices, government regulation, supply chain disruptions, damage to brand or reputation, economic slowdown and labor shortages, among other things.
Currency Risk. Because the Fund’s NAV is determined in U.S. dollars, the NAV could decline if the currency of the non-U.S. market in which the Fund invests depreciates against the
U.S. dollar or if there are delays or limits on the repatriation of foreign currency. Currency exchange
rates can be very volatile and can change quickly and unpredictably. As a result, the Fund’s NAV may
change quickly and without warning. In addition, the Fund may incur costs in connection with conversions between U.S. dollars and foreign currencies.
Cybersecurity Risk. Failures or breaches of the electronic systems of the Fund, its adviser, distributor, Index Provider, other