The Fund is subject to the main risks noted below, any of which may adversely affect the Fund’s net asset value (NAV),
market price, performance and ability to meet its investment objective.
General Market Risk. Economies and financial markets throughout the world are becoming increasingly interconnected, which increases the likelihood that events or conditions in
one country or region will adversely impact markets or issuers in other countries or regions. Securities in the
Fund’s portfolio may underperform in comparison to securities in general financial markets, a particular
financial market or other asset classes due to a number of factors, including inflation (or expectations for
inflation), deflation (or expectations for deflation), interest rates, global demand for particular products or
resources, market instability, debt crises and downgrades, embargoes, tariffs, sanctions and other trade
barriers, regulatory events, other governmental trade or market control programs and related geopolitical
events. In addition, the value of the Fund’s investments may be negatively affected by the occurrence of
global events such as war, terrorism, environmental disasters, natural disasters or events, country
instability, and infectious disease epidemics or pandemics.
For example, the outbreak of COVID-19 has negatively affected economies, markets and individual companies throughout the
world, including those in which the Fund invests. The effects of this pandemic to public health and business
and market conditions, including, among other things, reduced consumer demand and economic output, supply chain
disruptions and increased government spending, may continue to have a significant negative impact on the
performance of the Fund’s investments, increase the Fund’s volatility, exacerbate pre-existing
political, social and economic risks to the Fund, and negatively impact broad segments of businesses and populations. In addition, governments, their regulatory agencies, or self-regulatory organizations have taken or may take actions in
response to the pandemic that affect the instruments in which the Fund invests, or the issuers of such
instruments, in ways that could have a significant negative impact on the Fund’s investment performance.
The duration and extent of COVID-19 and associated economic and market conditions and uncertainty over the
long-term cannot be reasonably estimated at this time. The ultimate impact of COVID-19 and the extent to which the associated conditions impact a Fund will also depend on future developments, which are highly uncertain, difficult to
accurately predict and subject to frequent changes.
Foreign Securities and Emerging Markets Risk. Investments in foreign currencies and foreign issuers are subject to additional risks, including political and economic risks, civil
conflicts and war, greater volatility, expropriation and nationalization risks, sanctions or other measures by
the United States or other governments, currency fluctuations, higher transaction costs, delayed settlement,
possible foreign controls on investment, liquidity risks, and less stringent investor protection and disclosure
standards of foreign markets. In certain markets where securities and other instruments are not traded “delivery versus payment,” the Fund may not receive timely payment for securities or other instruments it has delivered or
receive delivery of securities paid for and may be subject to increased risk that the counterparty will fail to
make payments or delivery when due or default completely.
Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as
comparatively stable becoming riskier and more volatile. These risks are magnified in countries in
“emerging markets.” Emerging market countries typically have less-established market economies than
developed countries and may face greater social, economic, regulatory and political uncertainties. In addition,
emerging markets typically present greater illiquidity and price volatility concerns due to smaller or limited
local capital markets and greater difficulty in determining market valuations of securities due to limited
public information on issuers. Certain emerging market countries may be subject to less stringent requirements
regarding accounting, auditing, financial reporting and record keeping and therefore, material information
related to an investment may not be available or reliable. In addition, the Fund is limited in its ability to
exercise its legal rights or enforce a counterparty’s legal obligations in certain jurisdictions outside
of the United States, in particular, in emerging markets countries.
Geographic
Focus Risk. The Fund may focus its investments in one or more regions or small groups of countries. As a
result, the Fund’s performance may be subject to greater volatility than a more geographically
diversified fund.
Interest Rate Risk. The Fund’s investments in bonds and other debt securities will change in value based on changes in interest rates. If rates rise, the value of these investments generally declines. Securities with greater interest rate sensitivity
and longer maturities generally are subject to greater fluctuations in value. The Fund may invest in variable
and floating rate debt securities. Although these instruments are generally less sensitive to interest rate
changes than fixed rate instruments, the value of floating rate securities may decline if their interest rates
do not rise as quickly, or as much, as general interest rates. The Fund may face a heightened level of interest rate risk due to certain changes in monetary policy. During periods when interest rates are low or there are negative interest rates,
the Fund’s yield (and total return) also may be low or the Fund may be unable to maintain positive
returns.
Credit Risk.
The Fund’s investments are subject to the risk that issuers and/or counterparties will fail to make payments when due or default completely. If an issuer’s or counterparty’s financial condition worsens, the credit quality of
the issuer or counterparty may deteriorate, making it difficult for the Fund to sell such
investments.
European Market Risk. The Fund’s performance will be affected by political, social and economic conditions in Europe, such as growth of the economic output (the gross national product), the rate of inflation, the rate at which capital is reinvested
into European economies, the success of governmental actions to reduce budget deficits, the resource
self-sufficiency of European countries and interest and monetary exchange rates between European countries.
European financial markets may experience volatility due to concerns about high government debt levels, credit
rating downgrades, rising unemployment, the future of the euro as a common currency, possible restructuring of
government debt and other government measures responding to those concerns, and fiscal and monetary controls
imposed on member countries of the European Union. The risk of investing in Europe may be heightened due to
steps taken by the United Kingdom to exit the European Union. On January 31, 2020, the