Portfolio Turnover. It is the
policy of the Fund not to engage in trading for short-term profits
although portfolio turnover is not considered a limiting factor in
the execution of investment decisions for the Fund.
Leverage. The Fund may borrow
money from banks or financial institutions. Although it has no
current intention to do so, the Fund also reserves the flexibility
to issue preferred shares and debt securities for leveraging
purposes. The Fund also may borrow money as a temporary measure for
extraordinary or emergency purposes, including the payment of
dividends and the settlement of securities transactions which
otherwise might require untimely dispositions of the Fund’s
holdings. The Fund will not borrow or issue preferred shares if,
immediately after such borrowing or issuance, total leverage for
the Fund exceeds 38% of the Fund’s total assets. The Fund may also
borrow through reverse repurchase agreements (up to 20% of its
total assets). Reverse repurchase agreements involve the sale of a
security by the Fund to another party (generally a bank or dealer)
in return for cash and an agreement by the Fund to buy the security
back at a specified price and time. When the Fund leverages its
assets, the fees paid to us for investment advisory and management
services will be higher than if the Fund did not leverage because
our fees are calculated based on the Fund’s total assets including
the proceeds of the issuance of preferred shares or any other
amounts representing leverage. Consequently, the Fund's investment
adviser may have differing interests than the Fund in determining
whether to leverage the Fund’s assets. The Board of Trustees
monitors this potential conflict.
An investment in the Fund may lose money, is not a deposit of a
bank, is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency, and is primarily
subject to the risks briefly summarized below.
Market Risk. The values of,
and/or the income generated by, securities held by a Fund may
decline due to general market conditions or other factors,
including those directly involving the issuers of such securities.
Securities markets are volatile and may decline significantly in
response to adverse issuer, regulatory, political, or economic
developments. Different sectors of the market and different
security types may react differently to such developments.
Political, geopolitical, natural and other events, including war,
terrorism, trade disputes, government shutdowns, market closures,
natural and environmental disasters, epidemics, pandemics and other
public health crises and related events have led, and in the future
may lead, to economic uncertainty, decreased economic activity,
increased market volatility and other disruptive effects on U.S.
and global economies and markets. Such events may have significant
adverse direct or indirect effects on a Fund and its investments.
In addition, economies and financial markets throughout the world
are becoming increasingly interconnected, which increases the
likelihood that events or conditions in one country or region will
adversely impact markets or issuers in other countries or
Equity Securities Risk. The values
of equity securities may experience periods of substantial price
volatility and may decline significantly over short time periods.
In general, the values of equity securities are more volatile than
those of debt securities. Equity securities fluctuate in value and
price in response to factors specific to the issuer of the
security, such as management performance, financial condition, and
market demand for the issuer’s products or services, as well as
factors unrelated to the fundamental condition of the issuer,
including general market, economic and political conditions.
Different parts of a market, industry and sector may react
differently to adverse issuer, market, regulatory, political, and
Utility Securities Risk. Investments in utility sectors include the
unique risks associated with decreases in the demand for utility
company products and services, increased competition resulting from
deregulation, and rising energy costs, among others. Such
developments also could cause utility companies such as water, gas
and electric companies, to reduce the dividends they pay on their
stock, potentially decreasing the dividends you receive from the
Fund. Water, gas and electric companies typically borrow
heavily to support continuing operations. Increases in interest
rates could increase these utility companies’ borrowing costs,
which could adversely impact their financial results and stock
price, and ultimately the value of and total return on your Fund
Industry Concentration Risk. A
fund that concentrates its investments in an industry or group of
industries is more vulnerable to adverse market, economic,
regulatory, political or other developments affecting such industry
or group of industries than a fund that invests its assets more
Debt Securities Risk. Debt
securities are subject to credit risk and interest rate risk.
Credit risk is the possibility that the issuer or guarantor of a
debt security may be unable, or perceived to be unable, to pay
interest or repay principal when they become due. In these
instances, the value of an investment could decline and the Fund
could lose money. Credit risk increases as an issuer’s credit
quality or financial strength declines. Interest rate risk is the
possibility that interest rates will change over time. When
interest rates rise, the value of debt securities tends to fall.
The longer the terms of the debt securities held by a Fund, the
more the Fund is subject to this risk. If interest rates decline,
interest that the Fund is able to earn on its investments in debt
securities may also decline, which could cause the Fund to reduce
the dividends it pays to shareholders, but the value of those
securities may increase. Very low or negative interest rates may
magnify interest rate risk.