Reinvestment
Risk.
Reinvestment risk is the risk that the Fund will not be able to reinvest income
or principal at the same return it is currently earning. Reinvestment risk is
greater during periods of declining interest rates, as prepayments often occur
faster. It is related to call risk, since issuers of callable securities with
high interest coupons may call their bonds before their maturity date. This may
require the Fund to reinvest the proceeds at an earlier date, and it may be able
to do so only at lower yields, thereby reducing its return.
Liquidity
Risk.
Liquidity risk exists when a particular investment is difficult to purchase or
sell. If the Fund invests in illiquid securities or current portfolio securities
become illiquid, it may reduce the returns of the Fund because the Fund may be
unable to sell the illiquid securities at an advantageous time or
price.
Declining
Yield Risk. During the final
year of the Fund's operations, as the bonds held by the Fund mature and the
Fund's portfolio transitions to cash and cash equivalents, the Fund's yield will
generally tend to move toward the yield of cash and cash equivalents and thus
may be lower than the yields of the bonds previously held by the Fund and/or
prevailing yields for bonds in the market.
Issuer-Specific
Changes Risk. The value of an
individual security or particular type of security may be more volatile than the
market as a whole and may perform differently from the value of the market as a
whole.
Valuation
Risk.
Financial information related to securities of non-U.S. issuers may be less
reliable than information related to securities of U.S. issuers, which may make
it difficult to obtain a current price for a non-U.S. security held by the Fund.
In certain circumstances, market quotations may not be readily available for
some Fund securities, and those securities may be fair valued. The value
established for a security through fair valuation may be different from what
would be produced if the security had been valued using market quotations. Fund
securities that are valued using techniques other than market quotations,
including “fair valued” securities, may be subject to greater fluctuations in
their value from one day to the next than would be the case if market quotations
were used. In addition, there is no assurance that the Fund could sell a
portfolio security for the value established for it at any time, and it is
possible that the Fund would incur a loss because a security is sold at a
discount to its established value.
Valuation
Time Risk. Because foreign
exchanges may be open on days when the Fund does not price its Shares, the value
of the non-U.S. securities in the Fund’s portfolio may change on days when you
will not be able to purchase or sell your Shares. As a result, trading spreads
and the resulting premium or discount on the Shares may widen, and, therefore,
increase the difference between the market price of the Shares and the NAV of
such Shares.
Sampling
Risk.
The Fund's use of a representative sampling approach may result in it holding a
smaller number of securities than are in the Underlying Index. As a result, an
adverse development with respect to an issuer of securities held by the Fund
could result in a greater decline in NAV than would be the case if the Fund held
all of the securities in the Underlying Index. To the extent the assets in the
Fund are smaller, these risks will be greater.
Non-Correlation
Risk.
The Fund's return may not match the return of the Underlying Index for a number
of reasons. For example, the Fund incurs operating expenses not applicable to
the Underlying Index, and incurs costs in buying and selling securities,
especially when rebalancing the Fund's securities holdings to reflect changes in
the composition of the Underlying Index. Additionally, the Fund’s use of a
representative sampling approach may cause the Fund not to be as well-correlated
with the return of the Underlying Index as would be the case if the Fund
purchased all of the securities in the Underlying Index in the proportions
represented in the Underlying Index. In addition, the performance of the Fund
and the