The Fund aims to maintain a diversified portfolio across major economic sectors by applying investment
parameters for both sector and position size. The portfolio also includes both growth and value stocks. The Fund may also invest in securities of foreign issuers, but currently does not intend to do so substantially. The portfolio managers
may sell a security if the stock price is approaching its target; if there has been a deterioration in the company’s competitive position or poor execution by the company’s management; or if more attractive alternative investment
ideas have been identified.
Principal Risks of Investing in the Fund
As with any mutual fund investment, loss of money is a risk of investing. An investment in the Fund is
not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. The risks associated with an investment in the Fund can increase during times of significant market volatility. The principal risks of investing in the Fund
are:
Market Risk. The market values of the Fund’s investments, and therefore the value of the Fund’s shares, will go up and down, sometimes rapidly or unpredictably. Market risk may
affect a single issuer, industry or section of the economy, or it may affect the market as a whole. The value of the Fund’s investments may go up or down due to general market conditions that are not specifically related to the
particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook
for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, military conflict, acts of terrorism, economic crisis or adverse
investor sentiment generally. During a general downturn in the financial markets, multiple asset classes may
decline in value. When markets perform well, there can be no assurance that specific investments held by
the Fund will rise in value.
Investing in Stocks
Risk. The value of the Fund’s portfolio may be affected by changes in the stock markets. Stock markets may experience significant short-term volatility and may fall or
rise sharply at times. Adverse events in any part of the equity or fixed-income markets may have unexpected
negative effects on other market segments. Different stock markets may behave differently from each other and U.S. stock markets may move in the opposite direction from one or more foreign stock markets.
The prices of individual stocks generally do not all move in the same direction at
the same time. However, individual stock prices tend to go up and down more dramatically than those of certain other types of investments, such as bonds. A variety of factors can negatively affect the price of a particular company’s stock.
These factors may include, but are not limited to: poor earnings reports, a loss of customers, litigation against the company, general unfavorable performance of the company’s sector or industry, or changes in government regulations
affecting the company or its industry. To the extent that securities of a particular type are emphasized (for
example foreign stocks, stocks of small- or mid-cap companies, growth or value stocks, or stocks of
companies in a particular industry), fund share values may fluctuate more in response to events affecting the market for those types of securities.
Small- and Mid-Capitalization Companies Risk. Investing in securities of
small- and mid-capitalization companies involves greater risk than customarily is associated with investing in larger, more established companies. Stocks of small- and mid-capitalization companies tend to be more vulnerable to changing market conditions,
may have little or no operating history or track record of success, and may have more limited product lines
and markets, less experienced management and fewer financial resources than larger companies. These companies’ securities may be more volatile and less liquid than those of more established companies. They may be more sensitive to changes in a
company’s earnings expectations and may experience more abrupt and erratic price movements. Smaller
companies’ securities often trade in lower volumes and in many instances, are traded over-the-counter or on a regional securities exchange, where the frequency and volume of trading is substantially less than is
typical for securities of larger companies traded on national securities exchanges. Therefore, the securities of smaller companies may be subject to wider price fluctuations and it might be
harder for the Fund to dispose of its holdings at an acceptable price when it wants to sell them. Since small- and mid-cap companies typically reinvest a high proportion of their earnings in their business, they may not pay
dividends for some time, particularly if they are newer companies. It may take a substantial period of time to realize a gain on an investment in a small- or mid-cap company, if any gain is realized at all.
Growth Investing Risk. If a growth company’s earnings or stock price fails to increase as anticipated, or if its business plans do not produce the expected results, the value of its
securities may decline sharply. Growth companies may be newer or smaller companies that may experience
greater stock price fluctuations and risks of loss than larger, more established companies. Newer growth
companies tend to retain a large part of their earnings for research, development or investments in capital assets. Therefore, they may not pay any dividends for some time. Growth investing has gone in and out of favor during past
market cycles and is likely to continue to do so. During periods when growth investing is out of favor or
when markets are unstable, it may be more difficult to sell growth company securities at an acceptable
price and the securities of growth companies may underperform the securities of value companies or the overall stock market. Growth stocks may also be more volatile than other securities because of investor speculation.
Value Investing Risk. Value investing entails the risk that if the market does not recognize that a selected security is undervalued, the
prices of that security might not appreciate as anticipated. A value approach could also result in fewer
investments that increase rapidly during times of market gains and could cause a fund to underperform funds that use a growth or non-value approach to investing. Value investing has gone in and out of favor during past market cycles and
when value investing is out of favor or when markets are unstable, the securities of value companies may
underperform the securities of growth companies or the overall stock market.
Sector Focus Risk. The Fund may from time to time have a significant amount of its assets invested in one market sector or group of
related industries. In this event, the Fund’s performance will depend to a greater extent on the
overall condition of the sector or group of industries and there is increased risk that the Fund will lose significant value if conditions adversely affect that sector or group of industries.
Foreign Securities
Risk. The Fund's foreign investments may be adversely affected by political and social instability, changes in economic or taxation policies, difficulty in
enforcing obligations, decreased liquidity or increased volatility. Foreign investments also involve the risk of the possible seizure, nationalization or expropriation of the issuer or foreign deposits (in which the Fund could lose its entire
investments in a certain market) and the possible adoption of foreign governmental restrictions such as exchange controls. Foreign companies generally may be subject to less stringent regulations than U.S. companies, including
financial reporting requirements and auditing and accounting controls, and may therefore be more
susceptible to fraud or corruption. There may be less public information available about foreign companies
than U.S. companies, making it difficult to evaluate those foreign companies. Unless the Fund has hedged its
foreign currency exposure, foreign securities risk also involves the risk of negative foreign currency rate
fluctuations, which may cause the value of securities denominated in such foreign currency (or other instruments through which the Fund has exposure to foreign currencies) to decline in value. Currency exchange rates may fluctuate
significantly over short periods of time. Currency hedging strategies, if used, are not always
successful.
Management Risk. The Fund is actively managed and depends heavily on the Adviser’s judgment about markets, interest rates or the
attractiveness, relative values, liquidity, or potential appreciation of particular investments made for
the Fund’s portfolio. The Fund could experience