Risk Considerations
Buy & Hold Risk – Taxable Trusts. This UIT is a buy and hold strategy and investors should consider their ability to hold the trust until maturity. There may be tax consequences unless units are purchased in an IRA or other qualified plan.
Closed-End Fund Risk. Closed-end funds are subject to various risks, including management's ability to meet the fund's investment objective, and to manage the fund's portfolio when the underlying securities are redeemed or sold, during periods of market turmoil and as investors' perceptions regarding the funds or their underlying investments change. Unlike open-end funds, which trade at prices based on a current determination of the fund's net asset value, closed-end funds frequently trade at a discount to their net asset value in the secondary market. Certain closed-end funds employ the use of leverage, which increases the volatility of such funds.
Emerging Markets Risk. Risks associated with investing in non-U.S. securities may be more pronounced in emerging and developing markets where the securities markets are substantially smaller, less developed, less liquid, less regulated, and more volatile than the U.S. and developed non-U.S. markets.
Foreign Securities Risk. Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers.
High-Yield or Junk Bonds Risk.
Investing in high-yieldsecurities should be viewed as speculative and you should review your abilityto assume the risks associated with investments that utilize such bonds.High-yield securities are subject to numerous risks including higher interest rates,economic recession, deterioration of the junk bond market, possible downgradesand defaults of interest and/or principal. High-yield security prices tend tofluctuate more than higher rated bonds and are affected by short-term creditdevelopments to a greater degree.
Mortgage-Backed Securities Risk. Rising interest rates tend to extend the duration of mortgage-backed securities, making them more sensitive to changes in interest rates, and may reduce the market value of the securities. In addition, mortgage-backed securities are subject to prepayment risk, the risk that borrowers may pay off their mortgages sooner than expected, particularly when interest rates decline.
Municipal Bonds Risk. Municipal bonds are subject to numerous risks, including higher interest rates, economic recession, deterioration of the municipal bond market, possible downgrades and defaults of interest and/or principal.
Preferred Securities Risk. Preferred securities are equity securities of the issuing company which pay income in the form of dividends. Preferred securities are typically subordinated to bonds and other debt instruments in a company's capital structure, and therefore will be subject to greater credit risk than those debt instruments.
Small-Cap and Mid-Cap Risk. An investment in a portfolio containing small-cap and mid-cap companies is subject to additional risks, as the share prices of small-cap companies and certain mid-cap companies are often more volatile than those of larger companies due to several factors, including limited trading volumes, products, financial resources, management inexperience and less publicly available information.
Subprime Mortgage Risk. Subprime mortgage loans are subject to numerous risks, including increased credit risks, higher interest rates, shifts in the market's perception of issuers and regulatory or tax changes adversely affecting the mortgage securities markets.
Volatility Risk. The value of the securities held by the trust may be subject to steep declines or increased volatility due to changes in performance or perception of the issuers.