and the global timber industry. The Fund’s
portfolio holdings, and the extent to which it concentrates its investments, are likely to change over time.
Principal Risks of Investing in the Fund
The following summarizes the principal risks of investing in the Fund.
The Shares will change in value, and you could lose money by investing in the Fund. The Fund may not achieve its investment objective.
Market Risk.
Securities in the Underlying Index are subject to market fluctuations. You should anticipate that the value of the Shares will decline, more or less, in correlation with any decline in value of the securities in the Underlying Index. Additionally, natural
or environmental disasters, widespread disease or other public health issues, war, military conflicts, acts
of terrorism, economic crises or other events could result in increased premiums or discounts to the
Fund’s net asset value (“NAV”).
Index Risk. Unlike many investment companies, the Fund does not utilize an investing strategy that seeks returns in excess of the
Underlying Index. Therefore, the Fund would not necessarily buy or sell a security unless that security is
added or removed, respectively, from the Underlying Index, even if that security generally is underperforming. Additionally, the Fund rebalances its portfolio in accordance with the Underlying Index, and, therefore, any changes to the Underlying
Index’s rebalance schedule will result in corresponding changes to the Fund’s rebalance schedule.
Industry Concentration Risk. In following its methodology, the Underlying Index will be concentrated to a significant degree in securities of
issuers operating in a single industry or industry group. As a result, the Fund will also concentrate its
investments in such industries or industry groups to approximately the same extent. By concentrating its investments in an industry or industry group, the Fund faces more risks than if it were diversified broadly over numerous industries or
industry groups. Such industry-based risks, any of which may adversely affect the companies in which the
Fund invests, may include, but are not limited to, the following: general economic conditions or cyclical market patterns that could negatively affect supply and demand in a particular industry; competition for resources; adverse labor relations;
political or world events; obsolescence of technologies; and increased competition or new product introductions that may affect the profitability or viability of companies in an industry. In addition, at times, such industry or industry
group may be out of favor and underperform other industries or the market as a whole.
Materials Sector Risk. Changes in world events, political, environmental and economic conditions, energy conservation, environmental policies, commodity price volatility, changes in exchange rates, imposition of import controls, increased
competition, depletion of resources and labor relations may adversely affect the companies engaged in the
production and distribution of materials.
Global
Timber Industry Risk. The market value of securities of global timber companies may be affected by numerous
factors, including events occurring in nature, international politics, government regulations, competition
from other timber companies (and from companies that make non-wood and engineered wood products) and
general economic conditions.
Foreign Investment Risk. Investments in the securities of non-U.S. issuers involve risks beyond those associated with investments in U.S. securities. Foreign securities may have
relatively low market liquidity, greater market volatility, decreased publicly available information and less reliable financial information about issuers, and inconsistent and potentially less stringent accounting, auditing and financial
reporting requirements and standards of practice, including recordkeeping standards, comparable to those
applicable to domestic issuers. Foreign securities also are subject to the risks of expropriation, nationalization, political instability or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in
foreign securities also may be subject to dividend withholding or confiscatory taxes, currency blockage and/or transfer restrictions and higher transactional costs. To the extent the Fund invests in securities denominated in
foreign currencies, fluctuations in the
value of the U.S. dollar relative to the values of other currencies may adversely affect investments in foreign
securities and may negatively impact the Fund’s returns.
From time to time, certain companies in which the Fund invests may operate in, or have dealings with,
countries subject to sanctions or embargoes imposed by the U.S. government and the United Nations and/or in
countries the U.S. government identified as state sponsors of terrorism. One or more of these companies may be subject to constraints under U.S. law or regulations that could negatively affect the company’s performance. Additionally, one or more of these
companies could suffer damage to its reputation if the market identifies it as a company that invests or deals with countries that the U.S. government identifies as state sponsors of terrorism or subjects to sanctions.
Equity Risk.
Equity risk is the risk that the value of equity securities, including common stocks, may fall due to both changes in general economic conditions that impact the market as a whole, as well as factors that directly relate to a specific company or
its industry. Such general economic conditions include changes in interest rates, periods of market
turbulence or instability, or general and prolonged periods of economic decline and cyclical change. It is
possible that a drop in the stock market may depress the price of most or all of the common stocks that the Fund holds. In addition, equity risk includes the risk that investor sentiment toward one or more industries will become
negative, resulting in those investors exiting their investments in those industries, which could cause a
reduction in the value of companies in those industries more broadly. The value of a company's common stock
may fall solely because of factors, such as an increase in production costs, that negatively impact other
companies in the same region, industry or sector of the market. A company's common stock also may decline
significantly in price over a short period of time due to factors specific to that company, including
decisions made by its management or lower demand for the company's products or services. For example, an
adverse event, such as an unfavorable earnings report or the failure to make anticipated dividend payments,
may depress the value of common stock.
Non-Diversified Fund
Risk. Because the Fund is non-diversified and can invest a greater portion of its assets in securities of
individual issuers than a diversified fund, changes in the market value of a single investment could cause
greater fluctuations in Share price than would occur in a diversified fund. This may increase the Fund's volatility and cause the performance of a relatively small number of issuers to have a greater impact on the Fund's performance.
Emerging Markets Investment Risk. Investments in the securities of issuers in emerging market countries involve risks often not associated with investments in the securities of issuers in developed countries. Securities in emerging markets may be subject to
greater price fluctuations than securities in more developed markets. Companies in emerging market
countries generally may be subject to less stringent regulatory, disclosure, financial reporting,
accounting, auditing and recordkeeping standards than companies in more developed countries. In addition, information about such companies may be less available and reliable. Emerging markets usually are subject to greater market volatility,
political, social and economic instability, uncertainty regarding the existence of trading markets and more
governmental limitations on foreign investment than are more developed markets. Securities law in many
emerging market countries is relatively new and unsettled. Therefore, laws regarding foreign investment in emerging market securities, securities regulation, title to securities, and shareholder rights may change quickly and
unpredictably, and the ability to bring and enforce actions, or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the enforcement of systems of taxation at federal, regional and local levels in
emerging market countries may be inconsistent and subject to sudden change. Investments in emerging market
securities may be subject to additional transaction costs, delays in settlement procedures, unexpected
market closures, and lack of timely information. In addition, lack of relevant data and reliable public information,