An investment in the Fund involves certain risks, including, among others, the following:
As with any mutual fund, investment return and principal value will fluctuate, depending on general market conditions and other factors, and it is possible to lose money by investing.
Value Investing Risk
Value investors seek to invest in companies whose stock prices are low in relation to their real worth or future prospects. Undervalued securities are, by definition, out of favor with investors, and there is no way to predict when, if ever, the securities may return to favor.
The chance that the Fund’s performance may be hurt disproportionately by the poor performance of relatively few stocks. The Fund tends to invest a high percentage of assets in its largest holdings.
Large Company Risk
Large-capitalization securities tend to have less overall volatility than those issued by smaller capitalization companies, however, large-capitalization securities may underperform securities of smaller capitalization companies during periods when such stocks are in favor.
Mid-Size Company Risk
Mid-capitalization securities may be more vulnerable to adverse developments than those of larger companies due to such companies’ limited product lines, markets, financing sources, and management depth. Mid-capitalization securities may be affected to a greater extent by the underperformance of a sector or changing market conditions.
Small Company Risk
Small-capitalization securities may be more volatile and less liquid due to the companies’ size, limited product lines, markets, financing sources, and management depth. Small-capitalization securities may be affected to a greater extent by the underperformance of a sector or changing market conditions.
Non-U.S. Securities Risk
The Fund may invest in securities issued by non-U.S. issuers, which securities may be denominated in U.S. dollars or foreign currencies. Investments in non-U.S. securities may involve additional risks including exchange rate fluctuation, political or economic instability, the imposition of exchange controls, expropriation, limited disclosure and illiquid markets.
Investments in Exchange Traded Funds
ETFs incur certain expenses not incurred by their applicable index, as such, the Fund will incur additional expenses as a result of investing in an ETF. ETFs that are based on a specific index may not be able to replicate and maintain exactly the composition and relative weightings of securities in the applicable index.
Short Sales Risk
The Fund sells securities that it has borrowed but does not own (“short sales”), which is a speculative technique. The Fund will suffer a loss when the price of a security that it holds long decreases or the price of a security that it has sold short increases. Losses on short sales arise from increases in the value of the security sold short, and therefore are theoretically unlimited. Because the Fund invests in both long and short equity positions, the Fund has overall exposure to changes in value of equity securities that is far greater than its net asset value. This may magnify gains and losses and increase the volatility of the Fund's returns. In addition, the use of short sales will increase the Fund's expenses.
The Fund may borrow from banks or brokers and pledge its assets in connection with any borrowing. If the interest expense on borrowings is greater than the income and increase in value of the securities purchased with the proceeds of the borrowings, then the use of leverage will decrease the return to the Fund’s shareholders. The use of leverage also tends to magnify the volatility of the Fund’s returns.
Derivatives are instruments, such as futures and forward contracts, whose value is derived from that of other assets, rates or indices. The use of derivatives for non-hedging purposes may be considered to carry more risk than other types of investments. Derivative instruments are subject to a number of risks including counterparty, liquidity, interest rate, market, credit and management risks, and the risk of improper valuation. Changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, and in some cases the Fund could lose more than the principal amount invested.
Failure to Meet Investment Objective
There can be no assurance that the Fund will meet its investment objective.
An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.