NON-DIVERSIFICATION
RISK.
The Fund is classified as “non-diversified” under the 1940 Act. As a result, the
Fund is only limited as to the percentage of its assets which may be invested in
the securities of any one issuer by the diversification requirements imposed by
the Internal Revenue Code of 1986, as amended. The Fund may invest a relatively
high percentage of its assets in a limited number of issuers. As a result, the
Fund may be more susceptible to a single adverse economic or regulatory
occurrence affecting one or more of these issuers, experience increased
volatility and be highly invested in certain
issuers.
NON-U.S.
SECURITIES RISK. Non-U.S. securities
are subject to higher volatility than securities of domestic issuers due to
possible adverse political, social or economic developments, restrictions on
foreign investment or exchange of securities, capital controls, lack of
liquidity, currency exchange rates, excessive taxation, government seizure of
assets, the imposition of sanctions by foreign governments, different legal or
accounting standards, and less government supervision and regulation of
securities exchanges in foreign countries.
OPERATIONAL
RISK. The Fund is subject
to risks arising from various operational factors, including, but not limited
to, human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or systems failures. The Fund relies on third-parties
for a range of services, including custody. Any delay or failure relating to
engaging or maintaining such service providers may affect the Fund’s ability to
meet its investment objective. Although the Fund and the Fund's investment
advisor seek to reduce these operational risks through controls and procedures,
there is no way to completely protect against such
risks.
PASSIVE
INVESTMENT RISK. The Fund is not
actively managed. The Fund invests in securities included in or representative
of the Index regardless of investment merit. The Fund generally will not attempt
to take defensive positions in declining markets. In the event that the Index is
no longer calculated, the Index license is terminated or the identity or
character of the Index is materially changed, the Fund will seek to engage a
replacement index.
PORTFOLIO
TURNOVER RISK. High portfolio
turnover may result in the Fund paying higher levels of transaction costs and
may generate greater tax liabilities for shareholders. Portfolio turnover risk
may cause the Fund’s performance to be less than
expected.
PREMIUM/DISCOUNT
RISK. The market price
of the Fund’s shares will generally fluctuate in accordance with changes in the
Fund’s net asset value as well as the relative supply of and demand for shares
on the Exchange. The Fund’s investment advisor cannot predict whether shares
will trade below, at or above their net asset value because the shares trade on
the Exchange at market prices and not at net asset value. Price differences may
be due, in large part, to the fact that supply and demand forces at work in the
secondary trading market for shares will be closely related, but not identical,
to the same forces influencing the prices of the holdings of the Fund trading
individually or in the aggregate at any point in time. However, given that
shares can only be purchased and redeemed in Creation Units, and only to and
from broker-dealers and large institutional investors that have entered into
participation agreements (unlike shares of closed-end funds, which frequently
trade at appreciable discounts from, and sometimes at premiums to, their net
asset value), the Fund’s investment advisor believes that large discounts or
premiums to the net asset value of shares should not be sustained. During
stressed market conditions, the market for the Fund’s shares may become less
liquid in response to deteriorating liquidity in the market for the Fund’s
underlying portfolio holdings, which could in turn lead to differences between
the market price of the Fund’s shares and their net asset value and the bid/ask
spread on the Fund’s shares may widen.
SMALLER
COMPANIES RISK. Small and/or mid
capitalization companies may be more vulnerable to adverse general market or
economic developments, and their securities may be less liquid and may
experience greater price volatility than larger, more established companies as a
result of several factors, including limited trading volumes, fewer products or
financial resources, management inexperience and less publicly available
information. Accordingly, such companies are generally subject to greater market
risk than larger, more established companies.
STREAMING
AND GAMING RISK. The Fund is subject
to certain risks specifically associated with investments in companies that are
materially engaged in the offering of online services related to gaming and
content streaming, including user-created and studio-created content streaming,
video game development and competition support, and online gaming. These
companies can face intense competition, may be dependent on a limited number of
products which can rapidly become obsolete and often heavily rely on the
protection of patents and trademarks. They can be subject to intense litigation
regarding intellectual property rights, cybersecurity and privacy. These
companies are also subject to changes in economic conditions, consumer demand,
discretionary spending and technological developments. Additionally, legislative
or regulatory changes can impact the ability for these companies to operate in
certain jurisdictions and the activities in which they are allowed to engage,
which could significantly affect their
profitability.