Fixed income investments

Investing involves risks, including the loss of principal.

Fixed income securities are subject to interest rate risk. If rates increase, the value of the Funds’ investments generally declines. The risk of defaults is generally higher in the case of subprime mortgage- related and asset-backed securities that include so-called “subprime” mortgages. The structure of some of these securities may be complex and there may be less available information than other types of debt securities. These securities that may or may not be guaranteed by governments and their agencies, supranational organizations, corporations, or banks. The value of these assets will be influenced by factors affecting the assets underlying such securities. During periods of declining asset values, the asset-backed securities may decline in value. Futures contracts, swaps, options and derivatives often create leverage, thereby causing the Fund to be more volatile than it would be if it had not used derivatives. Emerging markets and foreign/international securities involve special risks, including economic, political and currency instability — especially in emerging markets. The Funds’ investments in emerging markets could lead to more volatility in the value of the Funds’ shares. The small size of securities markets and the low trading volume may lead to a lack of liquidity, which leads to increased volatility. Emerging markets may not provide adequate legal protection for private or foreign investment or private property. Securities rated below investment grade (i.e., “high yield” or “junk bonds”) are generally rated in the fifth or lower rating categories of Standard & Poor’s and Moody’s Investors Service. Although these securities tend to provide higher yields than higher-rated securities, there is a greater risk that the Funds’ share prices will decline. Short sales: There is no guarantee that the use of long and short positions will succeed in limiting the Funds’ exposure to domestic stock market movements, capitalization, sector swings or other risk factors. Investment in a portfolio involved in long and short selling may have higher portfolio turnover rates. This will likely result in additional tax consequences. Short selling involves certain risks, including additional costs associated with covering short positions and a possibility of unlimited loss on certain short sale positions. Investments in equity securities may rise or fall because in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. When the value of a fund’s securities goes down, an investment in a fund decreases in value.