0001064046 2012-11-29 2012-11-29 0001064046 ck0001064046:P0001-S000027298Member ck0001064046:S000027298Member 2012-11-29 2012-11-29 Other 2012-11-29 RYDEX VARIABLE TRUST 0001064046 false 2012-11-29 2012-11-29 2012-05-01 Long/Short Commodities Strategy Fund   <p class="MsoNormal" align="center" style="margin-top:0in;margin-right:0in;margin-left:0in;font-size:11.0pt;font-family:'calibri','sans-serif';margin-bottom:0in;margin-bottom:.0001pt; text-align:center;line-height:normal;text-autospace:none">  <p class="MsoNormal" align="center" style="margin-top:0in;margin-right:0in;margin-left:0in;font-size:11.0pt;font-family:'calibri','sans-serif';margin-bottom:0in;margin-bottom:.0001pt; text-align:center;line-height:normal;text-autospace:none">RYDEX VARIABLE TRUST <p class="MsoNormal" align="center" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in; margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center; line-height:normal;text-autospace:none">Long/Short Commodities Strategy Fund <p class="MsoNormal" align="center" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in; margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center; line-height:normal;text-autospace:none">Supplement dated November 29, 2012 <p class="MsoNormal" align="center" style="margin-top:0in;margin-right:0in;margin-left:0in;font-size:11.0pt;font-family:'calibri','sans-serif';margin-bottom:0in;margin-bottom:.0001pt; text-align:center;line-height:normal;text-autospace:none">to the currently effective Statutory Prospectus and to the <p class="MsoNormal" align="center" style="margin-top:0in;margin-right:0in;margin-left:0in;font-size:11.0pt;font-family:'calibri','sans-serif';margin-bottom:0in;margin-bottom:.0001pt; text-align:center;line-height:normal;text-autospace:none">Statement of Additional Information dated May 1, 2012, as supplemented from time to time <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">This supplement provides new and additional information beyond that contained in the Statutory Prospectus for the Long/Short Commodities Strategy Fund (the “Prospectus”) and Statement of Additional Information (“SAI”) listed above and should be read in conjunction with the Prospectus and SAI. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">At its Meeting held on November 19, 2012, the Board of Trustees of Rydex Variable Trust (the “Trust”) approved a new name, revised investment objective, and revised principal investment strategies for the Long/Short Commodities Strategy Fund (the “Fund”). The revisions to the Fund’s principal investment strategies are primarily intended to diversify the Fund’s investment exposure by broadening the variety of investment strategies it may pursue in seeking to achieve its investment objective. Therefore, effective January 29, 2013, or a subsequent date deemed appropriate by the officers of the Trust, the changes set forth below will apply to the Fund. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">To assist with the implementation of the revised principal investment strategies, Mr. Scott Minerd and Mr. Jayson Flowers will join the Fund’s existing team of portfolio managers effective January 29, 2013. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The changes to the Fund’s name, investment objective, principal investment strategies, and principal risks will not result in an increase in the Fund’s fees. The changes may decrease the Fund’s expenses due to a reduction of the current index licensing fee paid by the Fund. <p class="MsoNormal" style="margin-top:0in;margin-right:0in;margin-left:0in;font-size:11.0pt;font-family:'calibri','sans-serif';margin-bottom:0in;margin-bottom:.0001pt;line-height: normal;text-autospace:none">  <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr> <td width="40" valign="top" style='width:23.95pt;padding:0in 0in 0in 0in'> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:0in;margin-right:.8pt;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">I. </td> <td width="920" valign="top" style='width:552.05pt;padding:0in 0in 0in 0in'> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:0in;margin-right:.8pt;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">New Name </td> </tr> </table> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:4.5pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The new name of the Long/Short Commodities Strategy Fund will be “Managed Commodities Strategy Fund.” Therefore, all references to the “Long/Short Commodities Strategy Fund” in the Fund’s Prospectuses and SAI will be replaced with “Managed Commodities Strategy Fund.”   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr> <td width="40" valign="top" style='width:23.95pt;padding:0in 0in 0in 0in'> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:0in;margin-right:.8pt;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">II. </td> <td width="920" valign="top" style='width:552.05pt;padding:0in 0in 0in 0in'> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:0in;margin-right:.8pt;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">Revised Investment Objective </td> </tr> </table> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:4.5pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The Fund’s current investment objective will be replaced in its entirety with the statement below. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:13.5pt;margin-right:0in;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">INVESTMENT OBJECTIVE <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:4.5pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The Managed Commodities Strategy Fund (the “Fund”) seeks to achieve total returns with less volatility than the broad commodities markets.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr> <td width="40" valign="top" style='width:23.95pt;padding:0in 0in 0in 0in'> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:0in;margin-right:.8pt;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">III. </td> <td width="920" valign="top" style='width:552.05pt;padding:0in 0in 0in 0in'> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:0in;margin-right:.8pt;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">Revised Principal Investment Strategies </td> </tr> </table> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:4.5pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The current description of the Fund’s principal investments strategies under the heading “Principal Investment Strategies” in the “Fund Summary” section in the Fund’s Prospectus will be replaced in its entirety as set forth below. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:11.25pt;margin-right:0in;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">PRINCIPAL INVESTMENT STRATEGIES <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:4.5pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The Fund seeks to achieve total returns with less volatility than the broad commodity markets from long and/or short investments in commodities and other investment instruments. The Fund intends to invest in multiple proprietary and third-party investment strategies that seek to identify and profit from upcoming movements, in the global commodity markets. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The strategies may be quantitative or fundamental in nature, and may use market data and macroeconomic analysis to determine positions. The proprietary strategies may range from broad strategies that seek to provide exposure to all commodity markets, to focused strategies that seek to provide exposure to a single asset class, sector or a market. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The Fund generally will take a long position in a particular asset class, sector or market that the Advisor expects to rise in value and generally will take a short position in a particular asset class, sector, or market that the Advisor expects to fall in value. The Fund may also take a long position in a particular asset class, sector or market that the Advisor expects to fall in value and may also take a short position in a particular asset class, sector, or market that the Advisor expects to rise in value to manage the risk of the Fund’s positions and strategies. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The Advisor sets both the long-term strategic weights across individual strategies, or group of strategies, as well as short-term tactical weightings, which may deviate from long-term strategic weights, due to short-term market risks or opportunities. The Advisor will employ both quantitative and qualitative methods to assess and manage the level of risk and to seek to improve returns of the Fund over time. The Advisor in its discretion may establish long positions in excess of its short positions, and short positions in excess of its long positions; however, the Fund’s short positions will be fully covered at all times. The estimated risk of each position as measured by volatility, relative strengths of signals, certain macroeconomic views of the Advisor, and other factors, may be used to determine the relative size of positions. Risk-management strategies may be employed and seek to manage risk, improve returns over time, and mitigate declines in the market price of the Fund. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The Fund will seek to implement its investment strategies by investing in: commodity, currency, equity, fixed income and other futures, forwards, options, and options on futures; exchange-traded funds (“ETFs”); other pooled investment vehicles that provide exposure to the commodity, currency, equity and fixed income futures markets; commodity, currency, and financial-linked instruments, such as swap agreements and structured notes; exchange-traded notes (“ETNs”); and common stock. The Fund may purchase and sell options and futures contracts. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">Investments in derivative instruments, such as futures, options, and forward contracts and swap agreements, have the economic effect of creating financial leverage in the Fund’s portfolio because such investments may give rise to losses that exceed the amount the Fund has invested in those instruments. Financial leverage will magnify, sometimes significantly, the Fund’s exposure to any increase or decrease in prices associated with a particular trend resulting in increased volatility in the value of the Fund’s portfolio. The value of the Fund’s portfolio is likely to experience greater volatility over short-term periods. While such financial leverage has the potential to produce greater gains, it also may result in greater losses, which in some cases may cause the Fund to liquidate other portfolio investments at a loss to comply with limits on leverage and asset segregation requirements imposed by the Investment Company Act of 1940 (the “1940 Act”) or to meet redemption requests. The Fund’s use of derivatives and the leveraged investment exposure created by the use of derivatives are expected to be significant. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:11.25pt;margin-right:0in;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">The Fund’s derivative investments will be used both to obtain exposure to the commodity markets and to manage risk and limit exposure created by certain of the Fund’s investments. Certain of the Fund’s derivative investments may be traded in the over-the-counter (“OTC”) market, which generally provides for less transparency than exchange-traded derivative instruments. The Fund also intends to enter into short sales and invest in short positions of certain investments. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The Fund expects, under normal circumstances, to buy debt securities to collateralize its derivative investments, for liquidity purposes, or to enhance yield. The Fund may hold a diversified portfolio of fixed instruments of varying maturities, but that have an average duration of less than one year. In particular, the Fund may hold, without limitation, government money market instruments, such as U.S. Treasury securities and U.S. government agency discount notes and bonds with maturities of two years or less. In addition, the Fund may invest, without limitation, in bank obligations, which may include certificates of deposit, commercial paper, asset-backed commercial paper, unsecured bank promissory notes, bank loans, bankers’ acceptances, and time deposits. The Fund may also invest, without limitation, in other short-term instruments, such as loan participations, commercial paper, and repurchase agreements. The Fund will enter into repurchase agreements only with counterparties that are deemed to present acceptable credit risks. Bank obligations may be issued or backed by U.S. banks or be U.S. dollar-denominated obligations issued or guaranteed by foreign banks. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The Fund may invest, without limitation, in U.S. dollar-denominated investment grade debt securities, and may invest no more than 20% of assets in high yield securities, which are debt securities that are rated below investment grade by nationally recognized statistical rating organizations, or are unrated securities that the Advisor believes are of comparable quality. The Fund also may invest, without limitation, in mortgage-backed securities or in other asset backed securities, including to-be-announced transactions. The Fund may invest, without limitation, in U.S. dollar-denominated debt securities of foreign issuers, including emerging market issuers, and may invest up to 10% of its assets in sovereign and corporate debt securities denominated in foreign currencies. The Advisor may attempt, but is not obligated, to reduce foreign currency exchange rate risk by entering into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date (“forward contracts”). The Fund also may invest up to 25% of its assets in municipal securities. The Fund also may invest in ETFs and other investment companies, certain of which may be advised by the Advisor, that provide exposure to fixed income securities similar to those securities in which the Fund may invest directly. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The Fund also may invest up to 25% of its total assets in a wholly-owned and controlled Cayman Islands subsidiary (the “Subsidiary”). The Subsidiary is advised by the Advisor, and has the same investment objective as the Fund. Unlike the Fund, however, the Subsidiary may invest to a greater extent in commodity-linked derivative instruments. The Subsidiary’s investments in such instruments are subject to limits on leverage imposed by the 1940 Act. The Fund’s investment in the Subsidiary is expected to provide the Fund with an effective means of obtaining exposure to the investment returns of global commodities markets. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">In an effort to ensure that the Fund is fully invested on a day-to-day basis, the Fund may conduct any necessary trading activity at or just prior to the close of the U.S. financial markets. The Fund is non-diversified and, therefore, may invest a greater percentage of its assets in a particular issuer in comparison to a diversified fund.   <table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr> <td width="40" valign="top" style='width:23.95pt;padding:0in 0in 0in 0in'> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:0in;margin-right:.8pt;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">IV. </td> <td width="920" valign="top" style='width:552.05pt;padding:0in 0in 0in 0in'> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:0in;margin-right:.8pt;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">Additional Principal Risks </td> </tr> </table> <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:4.5pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">The current descriptions of the Fund’s principal risks under the heading “Principal Risks” in the “Fund Summary” section in the Fund’s Prospectus will be revised to include the additional principal risks described below. <p class="MsoNormal" style="margin-top:0in;margin-right:0in;margin-left:0in;font-size:11.0pt;font-family:'calibri','sans-serif';margin-bottom:0in;margin-bottom:.0001pt;line-height: normal;text-autospace:none">  <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:11.25pt;margin-right:0in;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">Asset-Backed and Mortgage-Backed Securities Risk – As an investors in asset-backed securities, including mortgage-backed securities, the Fund generally will receive payments that are part interest and part return of principal. These payments may vary based on the rate at which the underlying borrowers pay off their loans. Some asset-backed securities, including mortgage-backed securities, may have structures that make their reaction to interest rates and other factors difficult to predict, making their prices very volatile and they are subject to liquidity risk. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">Bank Obligations Risk – The Fund’s investments in bank obligations may expose it to favorable and adverse developments in or related to the banking industry. The activities of U.S. and most foreign banks are subject to comprehensive regulations, which, in the case of U.S. regulations, have undergone substantial changes in the past decade. The enactment of new legislation or regulations, as well as changes in interpretation and enforcement of current laws, may affect the manner of operations and profitability of domestic and foreign banks. Banks may be particularly susceptible to certain economic factors, such as interest rate changes and adverse developments in the real estate markets. Fiscal and monetary policy and general economic cycles can affect the availability and cost of funds, loan demand and asset quality and thereby impact the earnings and financial conditions of banks. Obligations of foreign banks, including Yankee obligations, are subject to the same risks that pertain to domestic issuers, notably credit risk and market risk, but are also subject to certain additional risks such as adverse foreign political and economic developments, the extent and quality of foreign government regulation of the financial markets and institutions, foreign withholding taxes and other sovereign action such as nationalization or expropriation. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">Call Risk/Prepayment Risk – During periods of falling interest rates, an issuer of a callable bond may exercise its right to pay principal on an obligation earlier than expected. This may result in the Fund reinvesting proceeds at lower interest rates, resulting in a decline in the Fund’s income. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">Credit/Default Risk – Issuers or guarantors of debt instruments or the counterparty to a derivatives contract, repurchase agreement or loan of portfolio securities may be unable or unwilling to make timely interest and/or principal payments or otherwise honor its obligations. Debt instruments are subject to varying degrees of credit risk, which may be reflected in credit ratings. Securities issued by the U.S. government generally have less credit risk than debt securities of non-government issuers. However, securities issued by certain U.S. government agencies are not necessarily backed by the full faith and credit of the U.S. government. Credit rating downgrades and defaults (failure to make interest or principal payment) may potentially reduce the Fund’s income and share price. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">Extension Risk – An issuer may exercise its right to pay principal on an obligation later than expected. This may happen when there is a rise in interest rates. Under these circumstances, the value of the obligation will decrease and the Fund’s performance may suffer from its inability to invest in higher yielding securities. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">Financial Services Sector Risk – To the extent that certain of the Fund’s investments are focused in issuers conducting business in the financial services sector, the Fund is subject to the risk that the securities of such issuers will underperform the market as a whole due to legislative or regulatory changes, adverse market conditions and/or increased competition affecting that economic sector. Financial services companies are subject to extensive governmental regulation which may limit both the amounts and types of financial commitments they can make, and the interest rates and fees they can charge. Profitability is largely dependent on the availability and cost of capital funds, and can fluctuate significantly when interest rates change or due to increased competition. In addition, the recent deterioration of the credit markets generally has caused an adverse impact on a wide range of financial institutions and markets. Recent events in the financial sector have resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both domestic and foreign, and caused certain financial services companies to incur large losses. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:11.25pt;margin-right:0in;margin-bottom: 0in;margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace: none">High Yield Risk – The Fund may invest in high yield securities and unrated securities of similar credit quality (commonly known as “junk bonds”), which may be subject to greater levels of interest rate, credit and liquidity risk than funds that do not invest in such securities. The price of high yield securities tends to be more susceptible to issuer-specific operating results and outlook and to real or perceived adverse economic and competitive industry conditions. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">Income Risk – Falling interest rates may cause the Fund’s income to decline. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">Interest Rate Risk – The market value of fixed income investments and related financial instruments will change in response to interest rate changes. During periods of falling interest rates, the values of fixed income securities generally rise. Conversely, during periods of rising interest rates, the values of such securities generally decline. Fixed-income securities with longer durations are subject to more volatility than those with shorter durations. <p class="MsoNormal" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:9.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none">Issuer Specific Risk – A decrease in the value of the securities of an issuer or guarantor of a debt instrument held by the Fund may cause the value of your investment in the Fund to decrease. The value of a security may increase or decrease for a number of reasons which directly relate to the issuer.   <p class="MsoNormal" align="center" style="font-size:11.0pt;font-family:'calibri','sans-serif';margin-top:13.5pt;margin-right:0in; margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center; line-height:normal;text-autospace:none">PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.