Item 2. CODE OF ETHICS.
| (a) | As
of the end of the period covered by this report, the Registrant has adopted a code of ethics
that applies to the Registrant’s principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar functions, regardless
of whether these individuals are employed by the Registrant or a third party. |
| (b) | No
disclosures are required by this Item. |
| (c) | During
the period covered by this report, the Registrant did not make any substantive amendment
to the code of ethics. |
| (d) | During
the period covered by this report, the Registrant did not grant any waiver, including any
implicit waiver, from any provision of the code of ethics. |
| (f) | A
copy of the Registrant’s Code will be made available, free of charge, upon request,
by writing or calling abrdn Inc., 1900 Market Street, Suite 200, Philadelphia, PA, 19103,
1-800-522-5465. |
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant’s Board of Trustees has determined that the Registrant
has at least one audit committee financial expert serving on its audit committee. As of the period ended September 30, 2023 the
audit committee financial expert was Thomas M. Kent. As of October 27, 2023, the audit committee financial expert is C. William
Maher. The financial expert is “independent” for the purposes of Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
| (a) | Audit
Fees. The aggregate fees billed for each of the last two fiscal years for professional services
rendered by the principal accountant for the audit of the Registrant’s annual financial
statements or services that are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years were $85,000 for the fiscal
year ended September 30, 2023 and $72,930 for the fiscal year ended September 30,
2022. |
| (b) | Audit
Related Fees. The Registrant was not billed any fees in each of the last two fiscal years
ended September 30 for assurance and related services by the principal accountant that
are reasonably related to the performance of the audit of the Registrant’s financial
statements and not otherwise included above. |
| (c) | Tax
Fees. The aggregate fees billed in each of the last two fiscal years for professional services
rendered by the principal accountant for tax compliance, tax advice, and tax planning were
$0 for the fiscal year ended September 30, 2023 and $14,170 for the fiscal year
ended September 30, 2022. The nature of the services comprising the fees disclosed under
this category was tax compliance. |
| (d) | All
Other Fees. The Registrant was not billed any fees in each of the last two fiscal years ended
September 30 for products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item. |
| (e) | (1) Pre-approval
Policies and Procedures. |
Pursuant to the Registrant’s Audit Committee Charter
(“Charter”), the Audit Committee is responsible for approving in advance the firm to be employed as the Registrant’s
independent auditor. In addition, the Charter provides that the Audit Committee is responsible for approving any and all proposals by
the Registrant, its investment adviser or their affiliated persons or any entity controlling, controlled by, or under common control
with the adviser that provides services to the Registrant to employ the independent auditor to render permissible non-audit services
related directly to the operations and financial reporting of the Registrant. In determining whether to pre-approve non-audit services,
the Audit Committee considers whether such services are consistent with the independent auditor’s independence. The Charter further
permits the Audit Committee to delegate to one or more of its members authority to pre-approve permissible non-audit services to the
registrant, provided that any pre-approval determination of a delegate is for services with an estimated budget of less than $15,000.
(2)
None of the services described in each of paragraphs (b) through (d) of this Item were
approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. All services described in
paragraphs (b) through (d) of the NCSR were approved in advance by the Audit Committee of each Fund.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The Registrant has a separately-designated standing
Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act (15 U.S.C. 78c(a)(58)(A)). As of
the period ended, September 30, 2023, the members of the Audit Committee are Kathleen Goetz, Thomas Kent and W. Mark Watson. As of
October 27, 2023, the members of the Audit Committee are Jeffrey Bailey, Rose DiMartino, Kathleen Goetz, C. William Maher and Todd
Reit.
ITEM 6. INVESTMENTS.
The Registrant’s Schedule of Investments is included as part
of the Report to Shareholders filed under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The Registrant has adopted the following proxy voting policies and
procedures through the period ended September 30, 2023.
PROXY VOTING POLICIES AND PROCEDURES
Policy
The following are the policies and procedures adopted and implemented
by Tekla Capital Management LLC (“TCM”) (the predecessor Adviser) for voting proxies with respect to portfolio securities
held by abrdn Healthcare Investors (formerly Tekla Healthcare Investors), abrdn Life Sciences Investors (formerly Tekla Life Sciences
Investors), abrdn Healthcare Opportunities Fund (formerly Tekla Healthcare Opportunities Fund) and abrdn World Healthcare Fund (formerly
Tekla World Healthcare Fund) (each a “Fund” and collectively the “Funds”) as of the period ended September 30,
2023. The policies and procedures are reasonably designed to ensure that proxies are voted in the best interest of the Funds and the
Funds’ shareholders, in accordance with TCM’s fiduciary duties and Rule 206(4)-6 under the Investment Advisers Act of
1940 (the “Investment Advisers Act”). TCM considers the “best interests” of the Funds and their shareholders
to mean their best long-term economic interests.
TCM shall vote proxies for the exclusive benefit, and in the best
economic interest, of the Funds and their shareholders. Such exercise of voting rights shall be subject to the same standard of care
as is generally applicable to TCM’s performance of its duties, as set forth in the advisory agreements with the Funds. The policies
and procedures contained herein are designed to be guidelines, however each vote is ultimately cast on a case-by-case basis, taking into
consideration the relevant facts and circumstances at the time of the vote. Any material conflicts that may arise will be resolved in
the best interests of the Funds and their shareholders.
A proxy committee has been designated and is responsible for administering
and overseeing the proxy voting process. The committee consists of the President of TCM, TCM’s Chief Compliance Officer (“CCO”),
and the analyst responsible for oversight of the company that is the subject of the proxy. The committee considers proxy questions and
determines the vote on behalf of the Funds.
Procedures
Logistics
TCM’s CCO shall be responsible for maintaining the proxy log,
monitoring corporate actions and confirming the timely voting of proxies. The proxy log shall contain the following information, in accordance
with Form N-PX:
| ● | the
exchange ticker symbol, if available; |
| ● | the
CUSIP number, if available; |
| ● | the
shareholder meeting date; |
| ● | a
brief identification of the matter voted on; |
| ● | whether
the matter was proposed by the issuer or a security holder; |
| ● | whether
TCM cast its vote on the matter; |
| ● | how
TCM cast its vote on the matter (for, against, abstain; for or withhold regarding the election
of directors); and |
| ● | whether
TCM cast its vote for or against management; |
TCM’s CCO shall also record whether any conflicts of interest
have been identified and, if so, what action was taken to resolve the conflict with respect to each vote cast and each abstention.
Substantive Voting Decisions
TCM’s substantive voting decisions turn on the particular facts
and circumstances of each proxy vote. The following is a list of common proxy vote issues and TCM’s standard considerations when
determining how to vote such proxies.
Routine
Matters/Corporate Administrative Items. After an initial review, TCM generally votes with management on routine matters related
to the operation of the issuer that are not expected to have a significant economic impact on the issuer and/or its shareholders.
Potential
for Major Economic Impact. TCM may review and analyze on a case-by-case basis, non-routine proposals that are more likely
to affect the structure and operation of the issuer and to have a greater impact on the value of the investment.
Corporate
Governance. TCM may review and consider corporate governance issues related to proxy matters and generally supports proposals
that foster good corporate governance practices.
Special
Interest Issues. TCM may consider: (i) the long-term benefit to shareholders of promoting corporate accountability and
responsibility on social issues; (ii) management’s responsibility with respect to special interest issues; (iii) any
economic costs and restrictions on management; and (iv) the responsibility of TCM to vote proxies for the greatest long-term shareholder
value.
Limitations
on Director Tenure and Retirement. TCM may consider: (i) a reasonable retirement age for directors, e.g. 70 or
72; (ii) the introduction of new perspectives on the board; and (iii) the arbitrary nature of such limitations and the possibility
of detracting from the board’s stability and continuity.
Directors’
Minimum Stock Ownership . TCM may consider: (i) the benefits of additional vested interest; (ii) the ability of
a director to serve a company well regardless of the extent of his or her share ownership; and (iii) the impact of limiting the
number of persons qualified to be directors.
D&O
Indemnification and Liability Protection. TCM may consider: (i) indemnifying directors for acts conducted in the normal
course of business; (ii) limiting liability for monetary damages for violating the duty of care; (iii) expanding coverage beyond
legal expenses to acts that represent more serious violations of fiduciary obligation than carelessness (e.g. negligence); and
(iv) providing expanded coverage in cases when a director’s legal defense was unsuccessful if the director was found to have
acted in good faith and in a manner that he or she reasonably believed was in the best interests of the issuer.
Director
Nominations in Contested Elections. TCM may consider: (i) long-term financial performance of the issuer relative to its
industry; (ii) management’s track record; (iii) background to proxy contest; (iv) qualifications of both slates
of nominees; (v) evaluations of what each side is offering shareholders as well as the likelihood that the proposed objectives and
goals can be met; and (vi) stock ownership positions.
Cumulative
Voting. TCM may consider: (i) the ability of significant stockholders to elect a director of their choosing; (ii) the
ability of minority shareholders to concentrate their support in favor of a director or directors of their choosing; and (iii) the
potential to limit the ability of directors to work for all shareholders.
Classified
Boards. TCM may consider: (i) providing continuity; (ii) promoting long-term planning; and (iii) guarding against
unwanted takeovers.
Poison
Pills. TCM may consider: (i) TCM’s position on supporting proposals to require a shareholder vote on other shareholder
rights plans; (ii) ratifying or redeeming a poison pill in the interest of protecting the value of the issuer; and (iii) other
alternatives to prevent a takeover at a price demonstrably below the true value of the issuer.
Fair Price
Provisions. TCM may consider: (i) the vote required to approve the proposed acquisition; (ii) the vote required
to repeal the fair price provision; (iii) the mechanism for determining fair price; and (iv) whether these provisions are bundled
with other anti-takeover measures (e.g., supermajority voting requirements) that may entrench management and discourage attractive
tender offers.
Equal
Access. TCM may consider: (i) the opportunity for significant shareholders of the issuer to evaluate and propose voting
recommendations on proxy proposals and director nominees, and to nominate candidates to the board; and (ii) the added complexity
and burden.
Charitable
Contributions. TCM may consider: (i) the potential benefits to shareholders; (ii) the potential to detract the issuer’s
resources from more direct uses of increasing shareholder value; and (iii) the responsibility of shareholders to make individual
contributions.
Stock
Authorizations: TCM may consider: (i) the need for the increase; (ii) the percentage increase with respect to the
existing authorization; (iii) voting rights of the stock; and (iv) overall capitalization structures.
Preferred
Stock. TCM may consider: (i) whether the new class of preferred stock has unspecified voting, conversion, dividend distribution,
and other rights; (ii) whether the issuer expressly states that the stock will not be used as a takeover defense or carry superior
voting rights; (iii) whether the issuer specifies the voting, dividend, conversion, and other rights of such stock and the terms
of the preferred stock appear reasonable; and (iv) whether the stated purpose is to raise capital or make acquisitions in the normal
course of business.
Director
Compensation. TCM may consider: (i) whether director shares are at the same market risk as those of the shareholders;
and (ii) how option programs for outside directors compare with the standards of internal programs.
Golden
and Tin Parachutes. TCM may consider: (i) whether they will be submitted for shareholder approval; and (ii) the
employees covered by the plan and the quality of management.
Compensation.
TCM may consider: (i) Whether the company has an independent compensation committee; (ii) whether the compensation
committee engaged independent consultants; (iii) whether the compensation committee has lapsed or waived equity vesting restrictions;
and (iv) whether the company has adopted or extended a Golden Parachute without shareholder approval. TCM will generally support
annual advisory votes on executive compensation.
Limitations
TCM may abstain from voting a proxy if it concludes that the effect
on shareholders’ economic interests or the value of the portfolio holding is indeterminable or insignificant. TCM may abstain from
voting a proxy if it concludes that the cost of voting is disproportionate to the economic impact the vote would have on the portfolio
holdings. With respect to certain privately held companies, TCM may not have the opportunity to vote or may have a limitation on its
ability to vote. For example, in certain cases a company may be permitted by its charter or other governing documents to take action
without a shareholder meeting and with written consent of fewer than all shareholders.
Conflicts of Interest
The Proxy Committee identifies any potential conflicts of interest.
Each potential conflict must be addressed in a manner which will be in the best interest of the Funds and their shareholders. If any
potential conflict is identified the Proxy Committee consults with the Funds’ counsel. Where conflicts of interest arise between
clients and TCM, TCM may convene an ad-hoc committee to debate the conflict and to give a ruling on a preferred course of action. If
the ad- hoc committee determines that TCM has a conflict of interest in any instance, TCM’s CCO shall disclose the conflict to
the Board and seek voting instructions.
TCM may cause the proxies to be voted in accordance
with the recommendations of an independent third party service provider that TCM may use to assist in voting proxies.
Disclosure
The following disclosure shall be provided in connection with these
policies and procedures:
| ● | TCM
shall provide a description or a copy of these policies and procedures to the Boards of Trustees
of the Funds annually and upon request. |
| ● | TCM
shall make available to the Funds its proxy voting records, for inclusion on the Funds’
Form N-PX. |
| ● | TCM
shall include its proxy voting policies and procedures in its annual filing on Form N-CSR. |
| ● | TCM
shall cause the Funds’ shareholder reports to include a statement that a copy of these
policies and procedures is available upon request (i) by calling a toll-free number;
(ii) on the Funds’ website, (if the Funds choose); and (iii) on the SEC’s
website. |
| ● | TCM
shall cause the Funds’ annual and semi-annual reports to include a statement that information
is available regarding how the Funds voted proxies during the most recent twelve-month period
(i) without charge, upon request, either by calling a toll-free number or on or through
the Funds’ website, or both; and (ii) on the SEC’s website. |
Recordkeeping
TCM shall maintain records of proxies voted in accordance with Section 204-2
of the Advisers Act, including proxy statements, a record of each vote cast, and a copy of any document created by the Adviser that was
material to making a decision of how to vote the proxy, or that memorializes the basis for the Adviser’s decision on how to vote
the proxy. TCM shall also maintain a copy of its policies and procedures and each written request from a client for proxy voting records
and the Adviser’s written response to any client request, either written or oral, for such records. Proxy statements that are filed
on EDGAR shall be considered maintained by TCM. All such records shall be maintained for a period of five years in an easily accessible
place, the first two years in the offices of TCM.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT
COMPANIES.
(a) (1) As of December 11, 2023, Daniel
Omstead, Ph.D., Jason Akus, M.D./M.B.A., Timothy Gasperoni, M.B.A., Ph.D., Ashton Wilson, Christopher Abbott, Robert Benson, Kelly
Girskis, Ph.D., Richard Goss, Christopher Seitz, M.B.A. and Loretta Tse, Ph.D. are members of a team that analyzes investments on
behalf of the Registrant. As of September 30, 2023, Dr. Omstead exercised ultimate decision-making authority with respect to
investments. Dr. Omstead also made investments on behalf of abrdn Healthcare Investors (“HQH”), abrdn Life Sciences
Investors (“HQL”) and abrdn Healthcare Opportunities Fund (“THQ”). The date each team member joined the
portfolio management team and each team member’s business experience for at least the last five years is included below.
Daniel R. Omstead, Ph.D. is Vice President of the Registrant and Head
of Healthcare Investments of the investment adviser. Previously he was President of the Registrant and Chief Executive Officer of the
predecessor investment advisor for the Registrant, where he was employed for over 40 years. He is also Vice President of the Registrant,
HQH, HQL and THQ. He joined abrdn Inc. in October 2023.
Jason Akus, M.D./M.B.A. is Senior Investments Director of the investment
adviser and is responsible for investment research and due diligence in the biotechnology, medical device, and diagnostic areas. He joined
the predecessor investment adviser in 2001, where he was Senior Vice President, Research. Dr. Akus joined abrdn Inc. in October 2023.
Timothy Gasperoni, M.B.A., Ph.D. is Senior Investments Director of
the investment adviser. He joined the predecessor investment adviser in 2015, where he was Senior Vice President, Research. He was also
previously a Senior Analyst and Founding Member of Sabby Capital. He joined abrdn Inc. in October 2023.
Ashton Wilson is Senior Investments Director of the investment adviser.
He joined the predecessor investment adviser in 2018, where he was Senior Vice President. He was previously a Vice President in equity
derivative trading at Goldman Sachs and Co. and was an equity derivative trader at Bank of America Merrill Lynch. He joined abrdn Inc.
in October 2023.
Christopher Abbott is Investment Director of the investment adviser.
He joined the predecessor investment adviser in 2016, where he was Vice President, Research. Previously, Mr. Abbott was at Leerink
Partners where he was a Vice President on the Equity Research Team. He joined abrdn Inc. in October 2023.
Robert Benson is Investment Director of the investment
adviser. He joined the predecessor investment adviser in 2016, where he was Vice President. Previously, Mr. Benson was at State Street
Global Advisors (SSgA) where he performed quantitative research for asset allocation, equities, and alternatives teams. He joined abrdn
Inc. in October 2023.
Kelly Girskis, Ph.D. is Investment Director of the
investment adviser. She joined the predecessor investment adviser in 2021, where she was Vice President, Research. Previously, Dr. Girskis
was an Equity Research Associate at SVB Leerink. She joined abrdn Inc. in October 2023.
Richard Goss is Investment Director of the investment
adviser. He joined the predecessor investment adviser in 2018, where he was Vice President, Research. Previously, Mr. Goss was at Leerink
Partners where he was a Vice President on the Large Pharma and Biotech Equity Research Teams and a Healthcare Analyst at Datamonitor.
He joined abrdn Inc. in October 2023.
Christopher Seitz, M.B.A. is Investment Director of
the investment adviser. He joined the predecessor investment adviser in 2021, where he was Vice President, Research. Previously, Mr. Seitz
was a Healthcare Analyst Intern at Nantahala Capital Management and an Associate at Excel Venture Management. He joined abrdn Inc. in
October 2023.
Loretta Tse, Ph.D. is Investment Director of the investment
adviser. She joined the predecessor investment adviser in 2015, where she was Vice President. She previously ran a biotech consulting
business and worked at various venture funds and start-up companies and was Managing Director at Fred Hutchinson Cancer Research Center.
She joined abrdn Inc. in October 2023.
(a)(2) The following table lists the number
and types of other accounts and assets under management in those accounts advised by the Registrant’s portfolio management team
as of the end of the Registrant’s fiscal year.
| |
|
REGISTERED |
|
|
|
|
|
|
|
|
|
|
|
| |
|
INVESTMENT |
|
|
|
|
|
|
|
|
|
|
|
| PORTFOLIO |
|
COMPANY |
|
ASSETS |
|
POOLED |
|
ASSETS |
|
OTHER |
|
ASSETS |
|
| MANAGER |
|
ACCOUNTS |
|
MANAGED |
|
ACCOUNTS |
|
MANAGED |
|
ACCOUNTS |
|
MANAGED |
|
| Daniel
Omstead |
|
3 |
|
$ |
2,391 million |
|
0 |
|
0 |
|
0 |
|
0 |
|
| Jason
Akus |
|
3 |
|
$ |
2,391 million |
|
0 |
|
0 |
|
0 |
|
0 |
|
| Timothy
Gasperoni |
|
3 |
|
$ |
2,391 million |
|
0 |
|
0 |
|
0 |
|
0 |
|
| Ashton
Wilson |
|
3 |
|
$ |
2,391 million |
|
0 |
|
0 |
|
0 |
|
0 |
|
| Christopher
Abbott |
|
3 |
|
$ |
2,391 million |
|
0 |
|
0 |
|
0 |
|
0 |
|
| Robert
Benson |
|
3 |
|
$ |
2,391 million |
|
0 |
|
0 |
|
0 |
|
0 |
|
| Kelly
Girskis |
|
3 |
|
$ |
2,391 million |
|
0 |
|
0 |
|
0 |
|
0 |
|
| Richard Goss |
|
3 |
|
$ |
2,391
million |
|
0 |
|
0 |
|
0 |
|
0 |
|
| Christopher
Seitz |
|
3 |
|
$ |
2,391 million |
|
0 |
|
0 |
|
0 |
|
0 |
|
| Loretta Tse |
|
3 |
|
$ |
2,391 million |
|
0 |
|
0 |
|
0 |
|
0 |
|
None of the funds or other accounts is subject to a performance-based
advisory fee.
Each member of the portfolio management team may perform investment
management services for other accounts similar to those provided to the Registrant and the investment action for each account may differ.
The portfolio management team may discover an investment opportunity that may be suitable for more than one account. However, the investment
opportunity may be limited so that all accounts may not be able to fully participate or an investment opportunity or investment allocation
may be allocated to just one account or may be allocated between accounts at different levels based on an investment decision made by
the investment team. The investment team may subsequently make investment decisions that result in investment levels that make the accounts
more differentiated or, conversely, more closely or completely aligned. Such investment decisions may occur within a day or two. In addition,
the investment adviser may receive different compensation from each account. In that case, the portfolio management team may have an
incentive to direct investments to an account that could result in higher fees for the investment adviser. The registrant has adopted
procedures designed to allocate investments fairly across multiple accounts.
Additionally, a portfolio manager may be perceived to have a conflict
of interest if he has other executive management responsibilities. In addition to managing the Registrant, HQH, HQL and THQ, Dr. Omstead
is the President of the investment adviser of the Registrant. Dr. Omstead periodically discusses the amount of time he allocates to each
of his responsibilities with the Registrant’s Board of Trustees.
The portfolio management team’s management of personal accounts
may also present certain conflicts of interest. The Registrant has adopted a code of ethics designed to address these potential conflicts.
(a)(3) As of September 30, 2023, portfolio manager
compensation is comprised of a base salary and discretionary compensation as described below.
Base
Salary Compensation. The team members receive a base salary compensation linked to individual experience and responsibilities.
The amount of base salary is reviewed annually.
Discretionary
Compensation. Discretionary Compensation is in the form of a cash bonus, paid annually, which may be 50% or more of the team
member’s base salary. Several factors affect discretionary compensation, which can vary by team member and circumstances. The discretionary
compensation component is determined based on factors including investment performance of accounts managed by the team predominantly
relative to the S&P 500 Index and a blended consideration of appropriate healthcare indices and related performance metrics during
the Fund’s fiscal year, performance of specific investments proposed by the individual, financial performance of the investment
adviser and a qualitative assessment of the individual overall contribution to the investment team and to the investment adviser. Discretionary
compensation is evaluated annually after the completion of the Registrant’s fiscal year.
(a)(4) As of September 30, 2023, the
dollar range of Registrant’s shares beneficially owned by the portfolio managers are as follows as of the end of the Registrant’s
fiscal year:
| PORTFOLIO MANAGER |
|
DOLLAR RANGE OF SHARES BENEFICIALLY OWNED |
| Daniel R. Omstead |
|
$100,001-$500,000 |
| Jason
Akus |
|
none |
| Timothy
Gasperoni |
|
$10,001-$50,000 |
| Ashton
Wilson |
|
none |
| Christopher
Abbott |
|
none |
| Robert
Benson |
|
none |
| Kelly Girskis |
|
none |
| Richard
Goss |
|
none |
| Christopher
Seitz |
|
none |
| Loretta
Tse |
|
none |
(b) N/A.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
| Period |
|
(a) Total No.
of Shares
Purchased (1) |
|
|
(b) Average
Price Paid per
Share |
|
|
(c) Total No.
of Shares
Purchased as
Part of
Publicly
Announced Plans
or Programs |
|
|
(d) Maximum No.
of Shares that
May Yet Be
Purchased Under
the Plans or
Programs |
|
| Month
#1 (Oct. 1, 2022 — Oct. 31, 2022) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,493,657 |
|
| Month
#2 (Nov. 1, 2022 — Nov. 30, 2022) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,493,657 |
|
| Month
#3 (Dec. 1, 2022 — Dec. 31, 2022) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,493,657 |
|
| Month
#4 (Jan. 1, 2023 — Jan. 31, 2023) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,493,657 |
|
| Month
#5 (Feb. 1, 2023 — Feb. 28, 2023) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,493,657 |
|
| Month
#6 (Mar. 1, 2023 — Mar. 31, 2023) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,493,657 |
|
| Month
#7 (Apr. 1, 2023 — Apr. 30, 2023) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,493,657 |
|
| Month
#8 (May 1, 2023 — May 31, 2023) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,493,657 |
|
| Month
#9 (Jun. 1, 2023 — Jun. 30, 2023) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,493,657 |
|
| Month
#10 (Jul. 1, 2023 — Jul. 31, 2023) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,563,005 |
|
| Month
#11 (Aug. 1, 2023 — Aug. 31, 2023) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,563,005 |
|
| Month
#12 (Sep. 1, 2023 — Sep. 30, 2023) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,563,005 |
|
| Total |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
|
| (1) | On
December 3, 2015, the share repurchase program was announced, which
has been subsequently reviewed and approved by the Board of Trustees. On March 17, 2022, the Trustees approved the renewal of the share
repurchase program allowing the Registrant to repurchase up to 12% of its outstanding shares in the open market for a one year period
ending July 14, 2023. On March 16, 2023, the Trustees approved the renewal of the share repurchase program allowing the Registrant to
repurchase up to 12% of its outstanding shares in the open market for a one year period ending July 14, 2024. |
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes, to the procedures by which the
shareholders may recommend nominees to the Registrant’s Board of Trustees, where those changes were implemented after the Registrant
last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR229.407)(as required by
Item 22(b)(15) of Schedule 14A (17 CFR240.14a-101)), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
| (a) | In
the opinion of the principal executive officer and principal financial officer, based on
their evaluation which took place within 90 days of this filing, the Registrant’s disclosure
controls and procedures are adequately designed and are operating effectively to ensure (i) that
material information relating to the Registrant, including its consolidated subsidiaries,
is made known to them by others within those entities, particularly during the period in
which this report is being prepared; and (ii) that information required to be disclosed
by the registrant on Form N-CSR is recorded, processed, summarized and reported within
the time period specified in the Securities and Exchange Commission’s rules and
forms. |
| (b) | There
were no changes in the Registrant’s internal control over financial reporting that
occurred during the Registrant’s most recent fiscal half- year that have materially
affected or that are reasonably likely to materially affect the Registrant’s internal
control over financial reporting. |
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
| (a) | The following table shows
the dollar amounts of income, and dollar amounts of fees and/or compensation paid, relating to the Fund’s securities lending activities
during the fiscal year ended September 30, 2022. |
| |
| (1) |
Gross
income from securities lending activities | |
$ | 64,267 | |
| (2) |
Fees and/or
compensation for securities lending activities and related services | |
| | |
| |
(a) Fees paid for services as securities lending agent | |
$ | 1,146 | |
| |
(b) Collateral management expenses not
included in (a) | |
$ | 0 | |
| |
(c) Administrative fees not included
in (a) | |
$ | 0 | |
| |
(d) Indemnification fees not included
in (a) | |
$ | 0 | |
| |
(e) Rebate (paid to borrowers) | |
$ | 56,626 | |
| |
(f) Other fees not included in (a) | |
$ | 0 | |
| (3) |
Aggregate
fees/compensation for securities lending activities | |
$ | 57,772 | |
| (4) |
Net
income from securities lending activities | |
$ | 6,494.86 | |
| (b) | Goldman Sachs Bank USA, doing business as Goldman Sachs Agency
Lending (“GSAL”) serves as securities lending agent for the Fund and in that role administers the Fund’s securities
lending program pursuant to the terms of a securities lending agency agreement entered into between the Fund and GSAL. |
ITEM 13. EXHIBITS.
(a) (2) Separate certifications of the Principal Executive and Financial Officers as required by Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto (Exhibit 1 and 2).
There was a change in the registrant’s independent public accountant
during the reporting period. Below is the information called for by Item 4 of Form 8-K, which was included in the Fund’s current
report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on September 12, 2023.
On September 6, 2023, Deloitte & Touche LLP (“D&T”),
the independent registered public accounting firm for the Tekla World Healthcare Fund (the “Fund”), resigned due to an anticipated
independence issue arising as a result of a pending transaction between Tekla Capital Management LLC and abrdn Inc. On September 7,
2023, the Audit Committee of the Board of Trustees (the “Board”) of the Fund approved D&T’s resignation.
The reports of D&T on the Fund’s financial statements as
of and for the two most recent fiscal years ended September 30, 2022 and September 30, 2021 did not contain an adverse opinion
or a disclaimer of opinion, nor were such reports qualified or modified as to uncertainties, audit scope or accounting principles.
During the Fund’s two most recent fiscal years (ended September 30,
2022 and September 30, 2021) and the subsequent interim period through September 6, 2023, there were no “disagreements”
(within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) between the Fund and D&T on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of D&T, would have caused
D&T to make reference to the subject matter of the disagreements in its reports on the financial statements of the Fund for such years.
Also during this same period, there were no “reportable events”
(within the meaning of Item 304(a)(1)(v) of Regulation S-K and the related instructions under the Exchange Act).
The Fund has provided D&T with a copy of the foregoing disclosures
under Item 4.01 on Form 8-K prior to filing it with the U.S. Securities and Exchange Commission (“SEC”) and has requested
that D&T furnish to the Fund with a letter addressed to the SEC stating whether it agrees with the statements made by the Fund in
this Item 4.01 on Form 8-K. A copy of D&T’s letter, dated September 12, 2023, is attached as Exhibit 16.1 to
this report on Form 8-K.
On September 7, 2023, upon the recommendation
of the Audit Committee of the Board, the Board approved the engagement of KPMG LLP (“KPMG”) as the independent registered
public accounting firm for the Fund for the fiscal year ending September 30, 2023. During the Fund’s two most recent fiscal
years (ended September 30, 2022 and September 30, 2021) and the subsequent interim period prior to the engagement of KPMG, neither
the Fund, nor anyone on the Fund’s behalf consulted with KPMG regarding (1) the application of accounting principles to a specified
transaction, either completed or proposed; (2) the type of audit opinion that might be rendered on the Fund’s financial statements;
or (3) the subject of any “disagreement,” as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange
Act and the instructions thereto, or a “reportable event,” as defined in Item 304(a) (1)(v) of Regulation S-K under
the Exchange Act.
100 F Street, N.E.
We have read Item 4.01 of Tekla World Healthcare Form 8-K dated
September 12, 2023, and we agree with the statements made therein.
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, each of the undersigned officers of abrdn World Healthcare Fund, do hereby certify, to such officer’s
knowledge, that the report on Form N-CSR of abrdn World Healthcare Fund for the period ended September 30, 2023 fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and information contained in the Form N-CSR
fairly presents, in all material respects, the financial condition and results of operations of abrdn World Healthcare Fund for the stated
period.
A signed original of this written statement required by Section 906
has been provided to abrdn World Healthcare Fund and will be retained by abrdn World Healthcare Fund and furnished to the SEC or its staff
upon request. This statement accompanies this report on Form N-CSR pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
N-2 - USD ($)
|
|
3 Months Ended |
12 Months Ended |
Nov. 24, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
[10] |
Mar. 31, 2023 |
[10] |
Dec. 31, 2022 |
[10] |
Sep. 30, 2022 |
Jun. 30, 2022 |
[10] |
Mar. 31, 2022 |
[10] |
Dec. 31, 2021 |
[10] |
Sep. 30, 2021 |
Jun. 30, 2021 |
[10] |
Mar. 31, 2021 |
[10] |
Dec. 31, 2020 |
[10] |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
| Cover [Abstract] |
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| Entity Central Index Key |
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0001635977
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false
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N-CSR
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| Entity Registrant Name |
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abrdn
World Healthcare Fund
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| Document Period End Date |
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Sep. 30, 2023
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| Fee Table [Abstract] |
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| Shareholder Transaction Expenses [Table Text Block] |
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Shareholder transaction expenses
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Sales load (as
a percentage of offering price)(1) |
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1.00
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% |
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Offering expenses (as
a percentage of offering price)(2) |
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0.19
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% |
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Dividend reinvestment and Stock Repurchase
Plan Fees(3) |
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None
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(1) If Common Shares are sold
to or through underwriters, a prospectus or prospectus supplement will set forth any applicable sales load and the estimated offering
expenses borne by the Fund.
(2) Offering expenses payable
by the Fund will be deducted from the proceeds, before expenses, to the Fund.
(3) The
expenses of administering the Fund's Dividend Reinvestment and Stock Purchase Plan are included in "Other Expenses." You will pay brokerage
charges if you direct your broker or the plan agent to sell your Shares that you acquired pursuant to the Fund's Dividend Reinvestment
and Stock Purchase Plan. You may also pay a pro rata share of brokerage commissions incurred in connection with open-market purchases
pursuant to the Fund's Dividend Reinvestment and Stock Purchase Plan. For more details about the Dividend Reinvestment and Stock Purchase
Plan, see "Dividend Reinvestment and Stock Purchase Plan" in the Fund's Prospectus.
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| Sales Load [Percent] |
[1] |
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1.00%
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| Dividend Reinvestment and Cash Purchase Fees |
[2] |
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$ 0
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| Other Transaction Expenses [Abstract] |
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| Other Transaction Expenses [Percent] |
[3] |
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0.19%
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| Annual Expenses [Table Text Block] |
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Annual
expenses
(as a percentage of net
assets
attributable
to
Common Shares) |
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Advisory fee(4) |
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1.24
|
% |
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Interest expenses on bank borrowings(5)
|
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1.45
|
% |
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Other expenses |
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0.30
|
% |
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Total annual expenses |
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2.99
|
% |
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|
Less: expense reimbursement(6)
|
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0.03
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% |
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Total annual expenses after expense reimbursement
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2.96
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% |
|
(4) The Advisory fee is charged
as a percentage of the Fund's average daily Managed Assets, as opposed to net assets. If leverage is used, Managed Assets will be greater
in amount than net assets, because Managed Assets includes borrowings for investment purposes.
(5) The percentage in the table
is based on total borrowings of $120,000,000 (the balance outstanding under the Fund's Credit Facility as of September 30, 2023, representing
approximately 21.2% of the Fund's Managed Assets) and an average interest rate during the fiscal year ended September 30, 2023, of 5.77%.
There can be no assurances that the Fund will be able to obtain such level of borrowing (or to maintain its current level of borrowing),
that the terms under which the Fund borrows will not change, or that the Fund's use of leverage will be profitable. The Fund currently
intends during the next twelve months to maintain a similar proportionate amount of borrowings but may increase such amount to 33 1/3%
of the average daily value of the Fund's total assets.
(6) As of the close of business
on October 27, 2023, the Adviser has entered into a written contract with the Fund to limit the total ordinary operating expenses of the
Fund (excluding leverage costs, interest, taxes, brokerage commissions, acquired fund fees and expenses and any non-routine expenses)
from exceeding 1.51% of the average daily net assets of the Fund on an annualized basis for twelve months (the "Expense Limitation Agreement").The
Expense Limitation Agreement may not be terminated before October 27, 2025, without the approval of the Fund's trustees who are not "interested
persons" of the Fund (as defined in the 1940 Act).The Fund may repay any such reimbursement from the Adviser, within three years of the
reimbursement, provided that the following requirements are met: the reimbursements do not cause the Fund to exceed the lesser of the
applicable expense limitation in the contract at the time the fees were limited or expenses are paid or the applicable expense limitation
in effect at the time the expenses are being recouped by the Adviser. Because interest expenses and investment related expenses are not
subject to the reimbursement agreement, interest expenses and investment related expenses are included in the "Total annual expenses after
expense reimbursement" line item.
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| Management Fees [Percent] |
[4] |
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1.24%
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| Interest Expenses on Borrowings [Percent] |
[5] |
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1.45%
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| Other Annual Expenses [Abstract] |
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| Other Annual Expenses [Percent] |
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0.30%
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| Total Annual Expenses [Percent] |
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2.99%
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| Waivers and Reimbursements of Fees [Percent] |
[6] |
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0.03%
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| Net Expense over Assets [Percent] |
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2.96%
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| Expense Example [Table Text Block] |
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Example
The following examples illustrate
the expenses you would pay on a $1,000 investment in common shares assuming that (i) all dividends and other distributions are reinvested
at NAV (ii) the percentage amounts listed under "Total annual expenses" above remain the same in the years shown and (iii) a 5% annual
portfolio total return.(1)
The following example does
not include the sales load:
| 1
Year |
|
3 Years |
|
5 Years |
|
10 Years |
|
| $ |
30
|
|
|
$ |
92
|
|
|
$ |
157
|
|
|
$ |
330
|
|
|
The following example assumes
a transaction fee of 1.19%, as a percentage of the offering price, as if it were borne solely by you, as purchaser(2):
| 1
Year |
|
3 Years |
|
5 Years |
|
10 Years |
|
| $ |
41
|
|
|
$ |
103
|
|
|
$ |
167
|
|
|
$ |
338
|
|
|
(1) The
examples above should not be considered representations of future expenses. Actual expenses may be higher or lower than those shown.
The examples assume that all dividends and distributions are reinvested at net asset value. The Fund's actual rate of return may be greater
or less than the hypothetical 5% return shown in the examples. For more complete descriptions of certain of the Fund's costs and expenses,
see "Management of the Fund—Advisory Agreements" in the Fund's Prospectus.
(2) Notwithstanding this assumption,
in actuality, these fees will be indirectly borne by all holders of Common Shares.
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| Purpose of Fee Table , Note [Text Block] |
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The purpose of the following
table and the example below is to help you understand the fees and expenses that holders of Common Shares ("Common Shareholders") would
bear directly or indirectly. The expenses shown in the table under "Other expenses," "Interest expenses on bank borrowings," "Total annual
expenses" and "Total annual expenses after expense reimbursement" are based on the Fund's capital structure as of September 30, 2023.
As of September 30, 2023, the Fund had $120,000,000 of leverage outstanding through bank borrowings which represented 21.2% of the Managed
Assets as of September 30, 2023. The table reflects Fund expenses as a percentage of net assets attributable to Common Shares. The following
table should not be considered a representation of the Fund's future expenses. Actual expenses may be greater or less than those shown
below.
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| Basis of Transaction Fees, Note [Text Block] |
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as
a percentage of offering price
|
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| Other Transaction Fees, Note [Text Block] |
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The
expenses of administering the Fund's Dividend Reinvestment and Stock Purchase Plan are included in "Other Expenses." You will pay brokerage
charges if you direct your broker or the plan agent to sell your Shares that you acquired pursuant to the Fund's Dividend Reinvestment
and Stock Purchase Plan. You may also pay a pro rata share of brokerage commissions incurred in connection with open-market purchases
pursuant to the Fund's Dividend Reinvestment and Stock Purchase Plan. For more details about the Dividend Reinvestment and Stock Purchase
Plan, see "Dividend Reinvestment and Stock Purchase Plan" in the Fund's Prospectus.
|
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| Financial Highlights [Abstract] |
|
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| Senior Securities [Table Text Block] |
|
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| Fiscal
Period Ended |
|
Title of Security
|
|
Total
Principal
Amount
Outstanding
|
|
Aggregate
Liquidation
Preference
|
|
Liquidation
Preference
Per
Share |
|
Asset
Coverage
Per
$1,000
of
Principal
Amount
|
|
Average
Market
Value(2)
|
|
|
September 30, 2023 |
|
Loan
Facility 2023 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,726
|
(1)
|
|
|
N/A
|
|
|
|
September 30, 2022 |
|
Loan
Facility 2022 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,786
|
|
|
|
N/A
|
|
|
|
September 30, 2021 |
|
Loan
Facility 2021 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
5,714
|
|
|
|
N/A
|
|
|
|
September 30, 2020 |
|
Loan
Facility 2020 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,554
|
|
|
|
N/A
|
|
|
|
September 30, 2019 |
|
Loan
Facility 2019 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,396
|
|
|
|
N/A
|
|
|
|
September 30, 2018 |
|
Loan
Facility 2018 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,861
|
|
|
|
N/A
|
|
|
|
September 30, 2017 |
|
Loan
Facility 2017 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,999
|
|
|
|
N/A
|
|
|
|
September 30, 2016 |
|
Loan
Facility 2016 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
5,160
|
|
|
|
N/A
|
|
|
(1) The asset coverage ratio
for the Loan Facility is calculated by dividing net assets plus the amount of any borrowings for investment purposes by the amount of
any senior securities, which includes the Loan Facility, and then multiplying by $1,000.
(2) Not applicable because
the senior securities are not registered for public trading.
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| Senior Securities, Note [Text Block] |
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Senior Securities
The following table sets forth
information about the Fund's outstanding senior securities as of the end of each of the Fund's last eight fiscal years. The Fund's senior
securities during this time period are comprised of borrowings which constitutes a "senior security" as defined in the 1940 Act. The information
in this table for the fiscal years ended 2022, 2021, 2020, 2019 and 2018 has been audited by a predecessor, independent registered public
accounting firm, and fiscal year ended 2023 has been audited by KPMG LLP, independent registered
public accounting firm. The Fund's
audited financial statements, including the report of KPMG LLP thereon, and accompanying notes thereto, are included in this Annual Report.
| Fiscal
Period Ended |
|
Title of Security
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|
Total
Principal
Amount
Outstanding
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Aggregate
Liquidation
Preference
|
|
Liquidation
Preference
Per
Share |
|
Asset
Coverage
Per
$1,000
of
Principal
Amount
|
|
Average
Market
Value(2)
|
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|
September 30, 2023 |
|
Loan
Facility 2023 |
|
$ |
120,000,000
|
|
|
|
— |
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|
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—
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|
|
$ |
4,726
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(1)
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|
N/A
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|
September 30, 2022 |
|
Loan
Facility 2022 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,786
|
|
|
|
N/A
|
|
|
|
September 30, 2021 |
|
Loan
Facility 2021 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
5,714
|
|
|
|
N/A
|
|
|
|
September 30, 2020 |
|
Loan
Facility 2020 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,554
|
|
|
|
N/A
|
|
|
|
September 30, 2019 |
|
Loan
Facility 2019 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,396
|
|
|
|
N/A
|
|
|
|
September 30, 2018 |
|
Loan
Facility 2018 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,861
|
|
|
|
N/A
|
|
|
|
September 30, 2017 |
|
Loan
Facility 2017 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
4,999
|
|
|
|
N/A
|
|
|
|
September 30, 2016 |
|
Loan
Facility 2016 |
|
$ |
120,000,000
|
|
|
|
— |
|
|
|
—
|
|
|
$ |
5,160
|
|
|
|
N/A
|
|
|
(1) The asset coverage ratio
for the Loan Facility is calculated by dividing net assets plus the amount of any borrowings for investment purposes by the amount of
any senior securities, which includes the Loan Facility, and then multiplying by $1,000.
(2) Not applicable because
the senior securities are not registered for public trading.
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| General Description of Registrant [Abstract] |
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| Investment Objectives and Practices [Text Block] |
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Objective of the Fund
The Fund's investment objective is to seek
current income and long-term capital appreciation. The
Fund's investment objective is to seek current income and long-term capital appreciation. The Fund invests primarily in equity and debt
securities of public and private U.S. and non-U.S. companies believed by the Fund's Investment Adviser, abrdn Inc. (as of October 27,
2023) (prior to October 27, 2023, Tekla Capital Management, LLC) (the Investment Adviser or the Adviser), to have significant potential
for above-average growth.Forward
contracts may also be used for non-hedging purposes to pursue the Fund's investment objective. There is no requirement that the Fund hedge
all or any portion of its exposure to foreign currency risks.
(5) At-the-Market
Offering
The Fund has a registration
statement on file with the SEC, initially effective on December 6, 2022, authorizing the Fund to issue shares through an At-the-Market
Offering (ATM) having an aggregate value of up to $150,000,000. The offering costs associated with the Fund's ATM offering are approximately
$278,586 of which $7,478 were charged to paid-in-capital upon the issuance of associated shares and $271,108 remains in prepaid expenses.
On December 14, 2022, the
Fund entered into a distribution agreement with Foreside Fund Services, LLC (Foreside), pursuant to which the Fund may offer and sell
up to $150,000,000 of shares from time to time, through Foreside as its agent, in transactions deemed to be at the market as defined in
Rule 415 under the Securities Act of 1933, as amended (the Offering). Under the Distribution Agreement, Foreside may enter into sub-placement
agent agreements with one or more selected dealers. Foreside has entered into a sub-placement agent agreement, dated December 14, 2022
(the Sub-Placement Agent Agreement), with UBS Securities LLC (UBS) relating to the shares to be offered under the Distribution Agreement.
During the year ended on September 30, 2023, 274,984 shares were sold under this agreement for $3,950,593 (net of commissions to Foreside
and UBS of $39,906).
Investment Objective
and Policies
There have been no changes
in the Fund's investment objective and policies since September 30, 2022 that have not been approved by shareholders.
The Fund's investment objective
is to seek current income and long-term capital appreciation.
Under normal market conditions,
the Fund expects to invest at least 80% of its Managed Assets in U.S. and non-U.S. companies engaged in the healthcare industries including
equity securities and debt securities. "Managed Assets" means the total assets of the Fund (including any assets attributable to borrowings
for investment purposes) minus the sum of
the Fund's accrued liabilities
(other than liabilities representing borrowings for investment purposes). The Fund's 80% policy may only be changed with 60 days' prior
notice to the Fund's shareholders (the "Shareholders"). The Fund will concentrate its investments in the healthcare industries.
A company will be deemed to
be a healthcare company if, at the time the Fund makes an investment in the company, 50% or more of such company's sales, earnings or
assets arise from or are dedicated to healthcare products or services or medical technology activities. healthcare companies may include
companies in one or more of the following sub-sectors: pharmaceuticals, biotechnology, managed care, life science and tools, healthcare
technology, healthcare services, healthcare supplies, healthcare facilities, healthcare equipment, healthcare distributors and Healthcare
REITs (as defined herein). The Investment Adviser determines, in its discretion, whether a company is a healthcare company.
Under normal market conditions,
the Fund expects to invest at least 40% of its Managed Assets in companies organized or located outside the United States or companies
that do a substantial amount of business outside the United States. The Fund may invest up to 5% of its Managed Assets in securities of
issuers located in emerging market countries ("Emerging Markets"). While the Fund may hedge its non-U.S. dollar exposure, it is currently
expected to do so from time to time rather than continuously. The Investment Adviser may hedge its non-U.S. dollar exposure from 0%-100%
at any given time, though it typically expects to do so between 0% and 50% of such exposure.
The Fund expects to invest
60-90% of its Managed Assets in equity securities (which may include common stock, preferred stock and warrants or other rights to acquire
common or preferred stock). The Fund will invest in foreign securities and may buy and sell currencies for the purpose of settlement of
transactions in foreign securities. The Fund may invest up to 30% of its Managed Assets in convertible securities, which may include securities
that are noninvestment grade. The Fund may invest up to 20% of its Managed Assets as measured at the time of investment in non-convertible
debt securities, including corporate debt obligations and debt securities that are rated noninvestment grade (that is, rated Ba1 or lower
by Moody's Investors Service, Inc. ("Moody's"), BB+ or lower by Standard & Poor's Ratings Group ("S&P"), or BB+ by Fitch, Inc.
("Fitch") or comparably rated by another nationally recognized statistical rating organization ("NRSRO"), or, if unrated, determined by
the Investment Adviser to be of comparable credit quality) and not including convertible securities. The Fund may invest up to 15% of
its Managed Assets in non-convertible debt securities that are, at the time of investment, rated Caa1 or lower by Moody's and CCC+ or
lower by S&P or Fitch, or comparably rated by another nationally recognized statistical rating organization, or, if unrated, determined
by the Investment Adviser to be of comparable credit quality. Such securities are subject to a very high credit risk. The Fund's investments
in noninvestment grade investments and those deemed to be of similar quality are considered
speculative with respect to
the issuer's capacity to pay interest and repay principal and are commonly referred to as "junk" or "high yield" securities.
The Fund may invest in derivatives,
including but not limited to options, futures, options on futures, forwards, swaps (including credit default, index, basis, total return,
volatility and currency swaps), options on swaps and other derivatives. Initially, the Fund intends to employ a strategy of writing (selling)
covered call options on a portion of the common stocks in its portfolio, writing (selling) put options on a portion of the common stocks
in its portfolio and, to a lesser extent, writing (selling) covered call and writing (selling) put options on indices of securities and
sectors of securities generally within the healthcare industry. This option strategy is intended to generate current income from option
premiums as a means to enhance distributions payable to the Fund's shareholders and will be limited to 30% of the Fund's Managed Assets.
These option strategies are not always profitable. The sale of a covered call option exposes the Fund during the term of the option to
possible loss of opportunity to realize appreciation in the market price of the underlying security or to possible loss due to continued
holding of a security that might otherwise have been sold to protect against depreciation in the market price of the security. Therefore,
the Investment Adviser may choose to decrease its use of the option writing strategy to the extent that it may negatively impact the Fund.
Other than the Fund's option strategy and use of derivatives for hedging purposes, the Fund may invest up to 10% of its Managed Assets
in derivatives.
The Fund may invest up to
10% of its Managed Assets in restricted securities, including private investments in public equity ("PIPEs") and venture capital investments.
The Fund may invest up to
20% of its Managed Assets in healthcare REITs.
The Fund may from time-to-time
lend its portfolio securities but has terminated its Securities Lending program effective July 18, 2023.
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| Risk Factors [Table Text Block] |
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Risk Factors
Investing in any investment company
security involves risk, including the risk that you may receive little or no return on your investment or even that you may lose part
or all of your investment. Investors should consider the following Risk Factors and special considerations associated with investing in
the Fund's shares. Portfolio
Market Risk.
As with any investment company that invests in equity securities, the Fund is subject to market risk—the possibility that the prices
of equity securities will
decline over short or extended
periods of time. As a result, the value of an investment in the Fund's shares will fluctuate with the market. You could lose some or all
of your investment over short or long periods of time.
Political and economic news
can influence market-wide trends and can cause disruptions in the U.S. or world financial markets. Other factors may be ignored by the
market as a whole but may cause movements in the price of one company's stock or the stock of companies in one or more industries. All
of these factors may have a greater impact on initial public offerings and emerging company shares.
Security Market Risk—Discount
to NAV. Shares of closed-end investment companies frequently
trade at a discount from their NAV. This characteristic is a risk separate and distinct from the risk that the Fund's NAV per share could
decrease as a result of its investment activities and may be greater for investors expecting to sell their shares in a relatively short
period of time following completion of this offering. Although the value of the Fund's net assets is generally considered by market participants
in determining whether to purchase or sell shares, whether investors will realize gains or losses upon the sale of the shares will depend
entirely upon whether the market price of the shares at the time of sale is above or below the investor's purchase price for the shares.
Because the market price of the shares will be determined by supply of and demand for the shares which will be affected by factors such
as (i) NAV, (ii) dividend and distribution levels and their stability (which will in turn be affected by levels of dividend and interest
payments by the Fund's portfolio holdings, the timing and success of the Fund's investment strategies, regulations affecting the timing
and character of Fund distributions, Fund expenses and other factors), (iii) trading volume of the shares, (iv) general market, interest
rate and economic conditions and (v) other factors that may be beyond the control of the Fund. The Fund cannot predict whether the shares
will trade at, below or above NAV or at, below or above the initial public offering price.
Equity Securities
Risk. The Fund expects to invest 60-90% of its Managed Assets
in equity securities. Equity risk is the risk that equity securities held by the Fund will fall due to general market or economic conditions,
perceptions regarding the industries in which the issuers of securities held by the Fund participate, changes in interest rates, and the
particular circumstances and performance of particular companies whose securities the Fund holds. The price of an equity security of an
issuer may be particularly sensitive to general movements in the stock market, or a drop in the stock market may depress the price of
most or all of the equity securities held by the Fund. In addition, equity securities held by the Fund may decline in price if the issuer
fails to make anticipated distributions or dividend payments because, among other reasons, the issuer experiences a decline in its financial
condition. The Fund's expected investments in preferred stocks carries its own unique risks. Preferred stocks are typically subordinated
to bonds and other debt instruments in a company's capital structure, in terms of priority to corporate income, and therefore will be
subject to greater credit risk than those debt instruments. In addition, unlike interest payments on debt securities,
preferred stock dividends
are payable only if declared by the issuer's board of directors. The prices of preferred stock also tend to move upwards slower than common
stock prices and the preferred stock may be substantially less liquid than common stock or other securities.
Convertible Securities
Risk. Convertible Securities generally offer lower interest
or dividend yields than nonconvertible debt securities of similar quality. The market value of convertible securities tends to decline
as interest rates increase and, conversely, tends to increase as interest rates decline. In addition, because of the conversion feature,
the market value of convertible securities tends to vary with fluctuations in the market value of the underlying common stock. When the
market price of the underlying common stock approaches or is greater than the convertible security's conversion price, the prices of the
convertible securities tend to rise as a reflection of the value of the underlying common stock. The conversion prior is defined as the
predetermined price at which the convertible security could be exchanged for the associated stock. Consequently, a unique feature of convertible
securities is that as the market price of the underlying common stock declines, convertible securities tend to trade increasingly on a
yield basis, and so may not experience market value declines to the same extent as the underlying common stock. Investments in convertible
securities generally entail less risk than investments in common stock of the same issuer but more risk than the issuer's debt obligations.
Selection Risk.
Different types of equity securities tend to shift into and out of favor with investors, depending on market and economic conditions.
The performance of funds that invest in healthcare industry equity securities may at times be better or worse than the performance of
funds that focus on other types of securities or that have a broader investment style.
Concentration in the
Healthcare Industries. Under normal market conditions, the Fund
expects to invest at least 80% of its Managed Assets in securities of healthcare companies. As a result, the Fund's portfolio will likely
be more sensitive to, and possibly more adversely affected by, regulatory, economic or political factors or trends relating to the healthcare,
agricultural and environmental technology industries than a portfolio of companies representing a larger number of industries. The risk
is in addition to the risks normally associated with any strategy seeking capital appreciation by investing in a portfolio of equity securities.
As a result of its concentration policy, the Fund's investments may be subject to greater risk and market fluctuation than a fund that
has securities representing a broader range of investments. The healthcare industries can be volatile. The Fund may occasionally make
investments in a company with the objective of controlling or influencing the management and policies of that company, which could potentially
make the Fund more susceptible to declines in the value of the company's stock. The Investment Adviser may seek control in public companies
only occasionally and most often in companies with a small capitalization.
Healthcare companies have in the
past been characterized by limited product focus, rapidly changing technology and extensive government regulation. In particular, technological
advances can render an existing product, which may account for a disproportionate share of a company's revenue, obsolete. Obtaining governmental
approval from U.S. governmental agencies such as the Food and Drug Administration (the "FDA"), and from non-U.S. governmental agencies
for new products can be lengthy, expensive and uncertain as to outcome. Such delays in product development may result in the need to seek
additional capital, potentially diluting the interests of existing investors such as the Fund. In addition, governmental agencies may,
for a variety of reasons, restrict the release of certain innovative technologies of commercial significance. These various factors may
result in abrupt advances and declines in the securities prices of particular companies and, in some cases, may have a broad effect on
the prices of securities of companies in particular healthcare industries.
A concentration of investments
in any healthcare industry or in healthcare companies generally may increase the risk and volatility of an investment company's portfolio.
Such volatility is not limited to the biotechnology industry, and companies in other industries may be subject to similar abrupt movements
in the market prices of their securities. No assurance can be given that future declines in the market prices of securities of companies
in the industries in which the Fund may invest will not occur, or that such declines will not adversely affect the NAV or the price of
the shares.
Intense competition exists
within and among certain healthcare industries, including competition to obtain and sustain proprietary technology protection, including
patents, trademarks and other intellectual property rights, upon which healthcare companies can be highly dependent for maintenance of
profit margins and market exclusivity. The complex nature of the technologies involved can lead to patent disputes, including litigation
that may be costly and that could result in a company losing an exclusive right to a patent.
With respect to healthcare
industries, cost containment measures already implemented by national governments, state or provincial governments and the private sector
have adversely affected certain sectors of these industries. The implementation of the Affordable Care Act ("ACA") has created increased
demand for healthcare products and services, but potential changes to the ACA and future healthcare laws and regulations may impact demand
for healthcare products and services and has had or may have an adverse effect on some companies in the healthcare industries. Increased
emphasis on managed care in the United States and a shift toward value based payment models may put pressure on the price and usage of
products sold by healthcare companies in which the Fund may invest and may adversely affect the sales and revenues of healthcare companies.
Product development efforts
by healthcare companies may not result in commercial products for many reasons, including, but not limited to, failure to achieve acceptable
clinical trial results, limited effectiveness in treating the specified condition or illness, harmful side effects,
failure to obtain regulatory
approval, and high manufacturing costs. Even after a product is commercially released, governmental agencies may require additional clinical
trials or change the labeling requirements for products if additional product side effects are identified, which could have a material
adverse effect on the market price of the securities of those healthcare companies.
Certain healthcare companies
in which the Fund may invest may be exposed to potential product liability risks that are inherent in the testing, manufacturing, marketing
and sale of pharmaceuticals, medical devices or other products. A product liability claim may have a material adverse effect on the business,
financial condition or securities prices of a company in which the Fund has invested.
All of these factors as well
as others may cause the value of the Fund's shares to fluctuate significantly over relatively short periods of time.
Pharmaceutical Sector
Risk. The success of companies in the pharmaceutical sector
is highly dependent on the development, procurement and marketing of drugs. The values of pharmaceutical companies are also dependent
on the development, protection and exploitation of intellectual property rights and other proprietary information, and the profitability
of pharmaceutical companies may be significantly affected by such things as the expiration of patents or the loss of, or the inability
to enforce, intellectual property rights.
The research and other costs
associated with developing or procuring new drugs and the related intellectual property rights can be significant, and the results of
such research and expenditures are unpredictable. There can be no assurance that those efforts or costs will result in the development
of a profitable drug. Pharmaceutical companies may be susceptible to product obsolescence. Pharmaceutical companies also face challenges
posed by the increased presence of counterfeit pharmaceutical products, which may negatively impact revenues and patient confidence. Many
pharmaceutical companies face intense competition from new products and less costly generic products. Moreover, the process for obtaining
regulatory approval by the FDA or other U.S. and non-U.S. governmental regulatory authorities is long and costly and there can be no assurance
that the necessary approvals will be obtained or maintained.
The pharmaceutical sector
is also subject to rapid and significant technological change and competitive forces that may make drugs obsolete or make it difficult
to raise prices and, in fact, may result in price discounting. Companies in the pharmaceutical sector may also be subject to expenses
and losses from extensive litigation based on intellectual property, product liability and similar claims. Failure of pharmaceutical companies
to comply with applicable laws and regulations can result in the imposition of civil and criminal fines, penalties and, in some instances,
exclusion of participation in government sponsored programs such as Medicare and Medicaid.
Companies in the pharmaceutical
sector may be adversely affected by government regulation and changes in reimbursement rates. The ability of many pharmaceutical companies
to commercialize and monetize current and any future products depends in part on the extent to which reimbursement for the cost of such
products and related treatments are available from third party payors, such as Medicare, Medicaid, private health insurance plans and
health maintenance organizations. Third-party payors are increasingly challenging the price and cost-effectiveness of many medical products.
Significant uncertainty exists
as to the reimbursement status of health care products, and there can be no assurance that adequate third-party coverage will be available
for pharmaceutical companies to obtain satisfactory price levels for their products.
The international operations
of many pharmaceutical companies expose them to risks associated with instability and changes in economic and political conditions, foreign
currency fluctuations, changes in foreign regulations and other risks inherent to international business. Additionally, a pharmaceutical
company's valuation can often be based largely on the potential or actual performance of a limited number of products. A pharmaceutical
company's valuation can also be greatly affected if one of its products proves unsafe, ineffective or unprofitable. Such companies also
may be characterized by thin capitalization and limited markets, financial resources or personnel, as well as dependence on wholesale
distributors. The stock prices of companies in the pharmaceutical industry have been and will likely continue to be extremely volatile.
Biotechnology Industry
Risk. The success of biotechnology companies is highly dependent
on the development, procurement and/or marketing of drugs. The values of biotechnology companies are also dependent on the development,
protection and exploitation of intellectual property rights and other proprietary information, and the profitability of biotechnology
companies may be significantly affected by such things as the expiration of patents or the loss of, or the inability to enforce, intellectual
property rights.
The research and other costs
associated with developing or procuring new drugs, products or technologies and the related intellectual property rights can be significant,
and the results of such research and expenditures are unpredictable. There can be no assurance that those efforts or costs will result
in the development of a profitable drug, product or technology. Moreover, the process for obtaining regulatory approval by the FDA or
other U.S. and non-U.S. governmental regulatory authorities is long and costly and there can be no assurance that the necessary approvals
will be obtained or maintained.
The biotechnology sector is
also subject to rapid and significant technological change and competitive forces that may make drugs, products or technologies obsolete
or make it difficult to raise prices and, in fact, may result in price discounting. Companies in the biotechnology sector may also be
subject to expenses and losses from extensive litigation
based on intellectual property,
product liability and similar claims. Failure of biotechnology companies to comply with applicable laws and regulations can result in
the imposition of civil and/or criminal fines, penalties and, in some instances, exclusion of participation in government sponsored programs
such as Medicare and Medicaid.
Companies in the biotechnology
sector may be adversely affected by government regulation and changes in reimbursement rates. Healthcare providers, principally hospitals,
that transact with companies in the biotechnology industry, often rely on third party payors, such as Medicare, Medicaid, private health
insurance plans and health maintenance organizations to reimburse all or a portion of the cost of healthcare related products or services.
Biotechnology companies will
continue to be affected by the efforts of governments and third party payors to contain or reduce health care costs. For example, certain
foreign markets control pricing or profitability of biotechnology products and technologies. In the United States, there has been, and
there will likely continue to be, a number of federal and state proposals to implement similar controls.
A biotechnology company's
valuation could be based on the potential or actual performance of a limited number of products and could be adversely affected if one
of its products proves unsafe, ineffective or unprofitable. Such companies may also be characterized by thin capitalization and limited
markets, financial resources or personnel. The stock prices of companies involved in the biotechnology sector have been and will likely
continue to be extremely volatile.
Managed Care Sector
Risk. Companies in the managed care sector often assume the
risk of both medical and administrative costs for their customers in return for monthly premiums. The profitability of these products
depends in large part on the ability of such companies to predict, price for, and effectively manage medical costs. Managed care companies
base the premiums they charge and their Medicare bids on estimates of future medical costs over the fixed contract period; however, many
factors may cause actual costs to exceed what was estimated and reflected in premiums or bids. These factors may include medical cost
inflation, increased use of services, increased cost of individual services, natural catastrophes or other large-scale medical emergencies,
epidemics, the introduction of new or costly treatments and technology, new mandated benefits (such as the expansion of essential benefits
coverage) or other regulatory changes and insured population characteristics. Relatively small differences between predicted and actual
medical costs or utilization rates as a percentage of revenues can result in significant changes in financial results.
Managed care companies are
regulated at the federal, state, local and international levels. Insurance and Health Maintenance Organization ("HMO") subsidiaries must
be licensed by and are subject to the regulations of the jurisdictions in which they conduct business. U.S. health plans and insurance
companies are also regulated under state insurance holding
company regulations, and some
of their activities may be subject to other health care-related regulations. The health care industry is also regularly subject to negative
publicity, including as a result of governmental investigations, adverse media coverage and political debate surrounding industry regulation.
Negative publicity may adversely affect stock price, damage the reputation of managed care companies in various markets or foster an increasingly
active regulatory environment, which, in turn, could further increase the regulatory burdens under which such companies operate and their
costs of doing business.
The evolution of the ACA and
other regulatory reforms could materially and adversely affect the manner in which U.S. managed care companies conduct business and their
results of operations, financial position and cash flows. The ACA includes guaranteed coverage and expanded benefit requirements, eliminates
pre-existing condition exclusions and annual and lifetime maximum limits, restricts the extent to which policies can be rescinded, establishes
minimum medical loss ratios, creates a federal premium review process, imposes new requirements on the format and content of communications
(such as explanations of benefits) between health insurers and their members, grants to members new and additional appeal rights, and
imposes new and significant taxes on health insurers and health care benefits.
New laws or regulations could
drive substantial change to the way healthcare products and services are currently delivered and paid for in the United States. Health
plans and insurance companies could face meaningful disruption or disintermediation if the U.S. migrates to a single payer healthcare
system where the government acts as the sole payer of healthcare services for the entire population. A transformative overhaul of the
U.S. healthcare system could impact the financial viability of managed care companies in which the Fund may invest.
Managed care companies contract
with physicians, hospitals, pharmaceutical benefit service providers, pharmaceutical manufacturers, and other health care providers for
services. Such companies' results of operations and prospects are substantially dependent on their continued ability to contract for these
services at competitive prices. Failure to develop and maintain satisfactory relationships with health care providers, whether in-network
or out-of-network, could materially and adversely affect business, results of operations, financial position and cash flows.
Life Science and Tools
Industry Risk. Life sciences industries are characterized by
limited product focus, rapidly changing technology and extensive government regulation. In particular, technological advances can render
an existing product, which may account for a disproportionate share of a company's revenue, obsolete. Obtaining governmental approval
from agencies such as the FDA, U.S. Department of Agriculture and other U.S. and non-U.S. governmental agencies for new products can be
lengthy, expensive and uncertain as to outcome. Such delays in product development may result in the need to seek additional capital,
potentially diluting the interests of existing investors such as the Fund. In addition,
governmental agencies may,
for a variety of reasons, restrict the release of certain innovative technologies of commercial significance, such as genetically altered
material. These various factors may result in abrupt advances and declines in the securities prices of particular companies and, in some
cases, may have a broad effect on the prices of securities of companies in particular life sciences industries.
Intense competition exists
within and among certain life sciences industries, including competition to obtain and sustain proprietary technology protection. Life
sciences companies can be highly dependent on the strength of patents, trademarks and other intellectual property rights for maintenance
of profit margins and market share. The complex nature of the technologies involved can lead to patent disputes, including litigation
that could result in a company losing an exclusive right to a patent. Competitors of life sciences companies may have substantially greater
financial resources, more extensive development, manufacturing, marketing and service capabilities, and a larger number of qualified managerial
and technical personnel. Such competitors may succeed in developing technologies and products that are more effective or less costly than
any that may be developed by life sciences companies in which the Fund invests and may also prove to be more successful in production
and marketing. Competition may increase further as a result of potential advances in health services and medical technology and greater
availability of capital for investment in these fields.
With respect to healthcare,
cost containment measures already implemented by national governments, state or provincial governments, international organizations and
the private sector have adversely affected certain sectors of these industries. Increased emphasis on managed care in the United States
may put pressure on the price and usage of products sold by life sciences companies in which the Fund may invest and may adversely affect
the sales and revenues of life sciences companies.
Product development efforts
by life sciences companies may not result in commercial products for many reasons, including, but not limited to, failure to achieve acceptable
clinical trial results, limited effectiveness in treating the specified condition or illness, harmful side effects, failure to obtain
regulatory approval, and high manufacturing costs. Even after a product is commercially released, governmental agencies may require additional
clinical trials or change the labeling requirements for products if additional product side effects are identified, which could have a
material adverse effect on the market price of the securities of those life sciences companies.
Certain life sciences companies
in which the Fund may invest may be exposed to potential product liability risks that are inherent in the testing, manufacturing, marketing
and sale of pharmaceuticals, medical devices or other products. There can be no assurance that a product liability claim would not have
a material adverse effect on the business, financial condition or securities prices of a company in which the Fund has invested.
Healthcare Technology
Sector Risk. Companies in the healthcare technology sector may
incur substantial costs related to product-related liabilities. Many of the software solutions, health care devices or services developed
by such companies are intended for use in collecting, storing and displaying clinical and health care-related information used in the
diagnosis and treatment of patients and in related health care settings such as admissions, billing, etc. The limitations of liability
set forth in the companies' contracts may not be enforceable or may not otherwise protect these companies from liability for damages.
Healthcare technology companies may also be subject to claims that are not covered by contract, such as a claim directly by a patient.
Although such companies may maintain liability insurance coverage, there can be no assurance that such coverage will cover any particular
claim that has been brought or that may be brought in the future, that such coverage will prove to be adequate or that such coverage will
continue to remain available on acceptable terms, if at all.
Healthcare technology companies
may experience interruption at their data centers or client support facilities. The business of such companies often relies on the secure
electronic transmission, data center storage and hosting of sensitive information, including protected health information, financial information
and other sensitive information relating to clients, company and workforce. In addition, such companies may perform data center and/or
hosting services for certain clients, including the storage of critical patient and administrative data and support services through various
client support facilities. If any of these systems are interrupted, damaged or breached by an unforeseen event or actions of a third party,
including a cyber-attack, or fail for any extended period of time, it could have a material adverse impact on the results of operations
for such companies.
The proprietary technology
developed by healthcare technology companies may be subject to claims for infringement or misappropriation of intellectual property rights
of others, or may be infringed or misappropriated by others. Despite protective measures and intellectual property rights, such companies
may not be able to adequately protect against theft, copying, reverse-engineering, misappropriation, infringement or unauthorized use
or disclosure of their intellectual property, which could have an adverse effect on their competitive position. In addition, these companies
are routinely involved in intellectual property infringement or misappropriation claims and it is expected that this activity will continue
or even increase as the number of competitors, patents and patent enforcement organizations in the healthcare technology market increases,
the functionality of software solutions and services expands, the use of open-source software increases and new markets such as health
care device innovation, health care transactions, revenue cycle, population health management and life sciences are entered into. These
claims, even if not meritorious, are expensive to defend and are often incapable of prompt resolution.
The success of healthcare
technology companies depends upon the recruitment and retention of key personnel. To remain competitive, such companies must attract,
motivate and retain
highly skilled managerial,
sales, marketing, consulting and technical personnel, including executives, consultants, programmers and systems architects skilled in
healthcare technology, health care devices, health care transactions, population health management, revenue cycle and life sciences industries
and the technical environments in which solutions, devices and services are needed. Competition for such personnel in the healthcare technology
sector is intense in both the United States and abroad. The failure to attract additional qualified personnel could have a material adverse
effect on healthcare technology companies' prospects for long-term growth.
Healthcare Services
Sector Risk. The operations of healthcare services companies
are subject to extensive federal, state and local government regulations, including Medicare and Medicaid payment rules and regulations,
federal and state anti-kickback laws, the physician self-referral law ("Stark Law") and analogous state self-referral prohibition statutes,
Federal Acquisition Regulations, the False Claims Act and federal and state laws regarding the collection, use and disclosure of patient
health information and the storage, handling and administration of pharmaceuticals. The Medicare and Medicaid reimbursement rules related
to claims submission, enrollment and licensing requirements, cost reporting, and payment processes impose complex and extensive requirements
upon dialysis providers as well. A violation or departure from any of these legal requirements may result in government audits, lower
reimbursements, significant fines and penalties, the potential loss of certification, recoupment efforts or voluntary repayments. If healthcare
services companies fail to adhere to all of the complex government regulations that apply to their businesses, such companies could suffer
severe consequences that would substantially reduce revenues, earnings, cash flows and stock prices.
A substantial percentage of
a healthcare services company's service revenues may be generated from patients who have state Medicaid or other non-Medicare government-based
programs, such as coverage through the Department of Veterans Affairs ("VA"), as their primary coverage. As state governments and other
governmental organizations face increasing budgetary pressure, healthcare services companies may in turn face reductions in payment rates,
delays in the receipt of payments, limitations on enrollee eligibility or other changes to the applicable programs.
Adverse economic conditions
could adversely affect the business and profitability of healthcare services companies. Among other things, the potential decline in federal,
non-U.S. government and state revenues that may result from such conditions may create additional pressures to contain or reduce reimbursements
for services from Medicare, Medicaid and other government sponsored programs. Increasing job losses or slow improvement in the unemployment
rate in the United States and elsewhere as a result of adverse or recent economic conditions may result in a smaller percentage of patients
being covered by an employer group health plan and a larger percentage being covered by lower paying Medicare and Medicaid programs. Employers
may also select more restrictive commercial plans with
lower reimbursement rates.
To the extent that payors are negatively impacted by a decline in the economy, healthcare services companies may experience further pressure
on commercial rates, a further slowdown in collections and a reduction in the amounts they expect to collect. In addition, uncertainty
in the financial markets could adversely affect the variable interest rates payable under credit facilities or could make it more difficult
to obtain or renew such facilities or to obtain other forms of financing in the future, if at all. Any or all of these factors, as well
as other consequences of the adverse economic conditions which cannot currently be anticipated, could have a material adverse effect on
a healthcare services company's revenues, earnings and cash flows and otherwise adversely affect its financial condition.
Healthcare Supplies
Sector Risk. If healthcare supplies companies are unable to
successfully expand their product lines through internal research and development and acquisitions, their business may be materially and
adversely affected. In addition, if these companies are unable to successfully grow their businesses through marketing partnerships and
acquisitions, their business may be materially and adversely affected.
Consolidation of healthcare
providers has increased demand for price concessions and caused the exclusion of suppliers from significant market segments. It is expected
that market demand, government regulation, third-party reimbursement policies, government contracting requirements and societal pressures
will continue to change the worldwide healthcare industry, resulting in further business consolidations and alliances among customers
and competitors. This may exert further downward pressure on the prices of healthcare supplies companies' products and adversely impact
their businesses, financial conditions or results of operations.
Quality is extremely important
to healthcare supplies companies and their customers due to the serious and costly consequences of product failure. Quality certifications
are critical to the marketing success of their products and services. If a healthcare supplies company fails to meet these standards or
fails to adapt to evolving standards, its reputation could be damaged, it could lose customers, and its revenue and results of operations
could decline.
Healthcare Facilities
Sector Risk. A healthcare facility's ability to negotiate favorable
contracts with HMOs, insurers offering preferred provider arrangements and other managed care plans significantly affects the revenues
and operating results of such healthcare facilities. In addition, private payers are increasingly attempting to control health care costs
through direct contracting with hospitals to provide services on a discounted basis, increased utilization reviews and greater enrollment
in managed care programs, such as HMOs and Preferred Provider Organizations ("PPOs"). The trend toward consolidation among private managed
care payers tends to increase their bargaining power over prices and fee structures. Non-government payers may increasingly demand reduced
fees. If a healthcare facility is unable to enter into and maintain managed care contractual arrangements on acceptable
terms, if it experiences material
reductions in the contracted rates received from managed care payers, or if it has difficulty collecting from managed care payers, its
results of operations could be adversely affected.
Further changes in the Medicare
and Medicaid programs or other government health care programs could have an adverse effect on a healthcare facility's business. In addition
to the changes affected by the ACA, the Medicare and Medicaid programs are subject to other statutory and regulatory changes, administrative
rulings, interpretations and determinations concerning patient eligibility requirements, funding levels and the method of calculating
payments or reimbursements, among other things, requirements for utilization review, and federal and state funding restrictions. All of
these could materially increase or decrease payments from government programs in the future, as well as affect the cost of providing services
to patients and the timing of payments to facilities, which could in turn adversely affect a healthcare facility's overall business, financial
condition, results of operations or cash flows.
Healthcare facilities are
adversely affected by uninsured and underinsured patients, as well as a growing mix of Medicare and Medicaid patients that typically have
lower reimbursement rates than commercial managed care patients As a result, healthcare facilities continue to experience a shift in payer
mix and a high level of uncollectible accounts, which could worsen if there is an increase in unemployment. Healthcare facilities may
continue to experience significant levels of bad debt expense and may have to provide uninsured discounts and charity care for undocumented
immigrants who are not permitted to enroll in a health insurance exchange or government health care program. The trend of higher co-pays
and deductibles and a focus on migrating healthcare utilization to lower cost sites of care, may also pressure volumes and revenue at
certain healthcare facilities which could adversely impact the financial condition of hospitals and facilities with high fixed cost structures.
Healthcare Equipment
Sector Risk. The medical device markets are highly competitive
and a healthcare equipment company many be unable to compete effectively. These markets are characterized by rapid change resulting from
technological advances and scientific discoveries.
Development by other companies
of new or improved products, processes, or technologies may make a healthcare equipment company's products or proposed products less competitive.
In addition, these companies face competition from providers of alternative medical therapies such as pharmaceutical companies.
Medical devices and related
business activities are subject to rigorous regulation, including by the FDA, U.S. Department of Justice ("DOJ"), and numerous other federal,
state, and foreign governmental authorities. These authorities and members of Congress have been increasing their scrutiny of the healthcare
equipment industry. In addition, certain states have
passed or are considering
legislation restricting healthcare equipment companies' interactions with health care providers and requiring disclosure of certain payments
to them. It is anticipated that governmental authorities will continue to scrutinize this industry closely, and that additional regulation
may increase compliance and legal costs, exposure to litigation, and other adverse effects to operations.
Healthcare equipment companies
are substantially dependent on patent and other proprietary rights and failing to protect such rights or to be successful in litigation
related to such rights may result in the payment of significant monetary damages and/or royalty payments, may negatively impact the ability
of healthcare equipment companies to sell current or future products, or may prohibit such companies from enforcing their patent and other
proprietary rights against others.
Quality problems with the
processes, goods and services of a healthcare equipment company could harm the company's reputation for producing high-quality products
and erode its competitive advantage, sales and market share. Quality is extremely important to healthcare equipment companies and their
customers due to the serious and costly consequences of product failure. Quality certifications are critical to the marketing success
of goods and services. If a healthcare equipment company fails to meet these standards, its reputation could be damaged, it could lose
customers, and its revenue and results of operations could decline.
Healthcare Distributors
Sector Risk. Companies in the healthcare distribution sector
operate in markets that are highly competitive. Because of competition, many of these companies face pricing pressures from customers
and suppliers. If these companies are unable to offset margin reductions caused by pricing pressures through steps such as effective sourcing
and enhanced cost control measures, the financial condition of such companies could be adversely affected. In addition, the healthcare
industry has continued to consolidate. Further consolidation among customers and suppliers (including branded pharmaceutical manufacturers)
could give the resulting enterprises greater bargaining power, which may adversely impact the financial condition of companies in the
healthcare distribution sector.
Fewer generic pharmaceutical
launches or launches that are less profitable than those previously experienced may have an adverse effect on the profits of companies
in the healthcare distribution sector. Additionally, prices for existing generic pharmaceuticals generally decline over time, although
this may vary. Price deflation on existing generic pharmaceuticals may have an adverse effect on company profits. With respect to branded
pharmaceutical price appreciation, if branded manufacturers increase prices less frequently or by amounts that are smaller than have been
experienced historically, healthcare distribution companies may profit less from branded pharmaceutical agreements.
The healthcare industry is
highly regulated, and healthcare distribution companies are subject to regulation in the United States at both the federal and state level
and in foreign countries. If healthcare distribution companies fail to comply with these regulatory requirements, the financial condition
of such companies could be adversely affected.
Due to the nature of the business
of healthcare distribution companies, such companies may from time to time become involved in disputes or legal proceedings. For example,
some of the products that these companies distribute may be alleged to cause personal injury or violate the intellectual property rights
of another party, subjecting such companies to product liability or infringement claims. Litigation is inherently unpredictable, and the
unfavorable resolution of one or more of these legal proceedings could adversely affect the cash flows and balance sheets of healthcare
distribution companies. Pharmaceutical distributors currently face lawsuits related to the abuse of opioid medications in the United States.
The allegations include that pharmaceutical distributors failed to provide effective controls around the quantities of opioid medications
distributed to certain pharmacies, failed to properly prevent the diversion of medications and failed to report suspicious orders. Pharmaceutical
distributors are in discussions with federal, state and local jurisdictions related to their role in the distribution of opioid pharmaceuticals
and it is possible that they will be required to pay multi-billion dollar settlements related to the ongoing litigation.
Healthcare distribution companies
depend on the availability of various components, compounds, raw materials and energy supplied by others for their operations. Any of
these supplier relationships could be interrupted due to events beyond the control of such companies, including pandemics, epidemics or
natural disasters, or could be terminated. A sustained supply interruption could have an adverse effect on business.
Risks Associated with
Regulatory and Policy Changes. At any time after the date hereof,
U.S. and non-U.S. governmental agencies and other regulators may implement additional regulations and legislators may pass new laws that
affect the investments held by the Fund, the strategies used by the Fund or the level of regulation or taxation applying to the Fund.
These regulations and laws impact the investment strategies, performance, costs and operations of the Fund, as well as the way investments
in, and shareholders of, the Fund are taxed. In particular, changes to U.S. healthcare policy could affect the Fund and its investments.
The affordability of healthcare in the U.S. will remain a topic of debate, and proposals, laws and regulations to reduce the costs of
healthcare products and services could adversely impact healthcare companies that the Fund invests in.
Foreign Securities
Risk. Foreign investments involve special risks that are not
typically associated with U.S. dollar denominated or quoted securities of U.S. issuers. Foreign investments may be affected by changes
in currency rates, changes in foreign or U.S. laws or restrictions applicable to such investments and changes in exchange control regulations
(e.g., currency blockage). A decline in the exchange rate of the currency (i.e., weakening of
the currency against the U.S.
dollar) in which a portfolio security is quoted or denominated relative to the U.S. dollar would reduce the value of the portfolio security.
In addition, if the currency in which the Fund receives dividends, interest or other payments declines in value against the U.S. dollar
before such income is distributed as dividends to Shareholders or converted to U.S. dollars, the Fund may have to sell portfolio securities
to obtain sufficient cash to pay such dividends.
The Fund may invest in foreign
securities which take the form of sponsored and unsponsored American depositary receipts ("ADRs"), global depositary receipts ("GDRs"),
European depositary receipts ("EDRs") or other similar instruments representing securities of foreign issuers (together, "Depositary Receipts").
ADRs represent the right to receive securities of foreign issuers deposited in a domestic bank or a correspondent bank. ADRs are traded
on domestic exchanges or in the U.S. over-the-counter ("OTC") market and, generally, are in registered form. EDRs and GDRs are receipts
evidencing an arrangement with a non-U.S. bank similar to ADRs and are designed for use in the non-U.S. securities markets. EDRs and GDRs
are not necessarily quoted in the same currency as the underlying security. To the extent the Fund acquires Depositary Receipts through
banks which do not have a contractual relationship with the foreign issuer of the security underlying the Depositary Receipts to issue
and service such unsponsored Depositary Receipts, there is an increased possibility that the Fund will not become aware of and be able
to respond to corporate actions, such as stock splits or rights offerings, involving the foreign issuer in a timely manner. In addition,
the lack of information may result in inefficiencies in the valuation of such instruments. Investment in Depositary Receipts does not
eliminate all the risks inherent in investing in securities of non-U.S. issuers. The market value of Depositary Receipts is dependent
upon the market value of the underlying securities and fluctuations in the relative value of the currencies in which the Depositary Receipts
and the underlying securities are quoted. However, by investing in Depositary Receipts, such as ADRs, which are quoted in U.S. dollars,
the Fund may avoid currency risks during the settlement period for purchases and sales. The issuers of Depositary Receipts may discontinue
issuing new Depositary Receipts and withdraw existing Depositary Receipts at any time, which may result in costs and delays in the distribution
of the underlying assets to the Fund and may negatively impact the Fund's performance.
Brokerage commissions, custodial
services and other costs relating to investment in international securities markets generally are more expensive than in the United States.
In addition, clearance and settlement procedures may be different in foreign countries and, in certain markets, such procedures have been
unable to keep pace with the volume of securities transactions, thus making it difficult to conduct such transactions.
Foreign issuers are not generally
subject to uniform accounting, auditing and financial reporting standards comparable to those applicable to U.S. issuers. There may be
less publicly available information about a foreign issuer than about a U.S. issuer. In addition, there is generally less government regulation
of foreign markets, companies and securities dealers
than in the United States,
and the legal remedies for investors may be more limited than the remedies available in the United States. Foreign securities markets
may have substantially less volume than U.S. securities markets and securities of many foreign issuers are less liquid and more volatile
than securities of comparable domestic issuers. Furthermore, with respect to certain foreign countries, there is a possibility of nationalization,
expropriation or confiscatory taxation, imposition of withholding or other taxes on dividend or interest payments (or, in some cases,
capital gains distributions), limitations on the removal of funds or other assets from such countries, and risks of political or social
instability or diplomatic developments which could adversely affect investments in those countries. At any time after the date hereof,
U.S. and non-U.S. governmental agencies and other regulators may implement additional regulations and legislators may pass new laws that
affect the investments held by the Fund, the strategies used by the Fund or the level of regulation or taxation applying to the Fund.
These regulations and laws impact the investment strategies, performance, costs and operations of the Fund, as well as the way investments
in, and shareholders of, the Fund are taxed. In particular, changes to U.S. healthcare policy could affect the Fund and its investments.
The Fund may invest in securities
of issuers located in Emerging Markets. The risks of foreign investment are heightened when the issuer is located in an emerging country.
Emerging Markets are generally located in Africa, Asia, the Middle East, Eastern Europe and Central and South America. Investments in
securities of issuers located in Emerging Markets may be subject to heightened risks, including relative illiquidity, price volatility
and potential restrictions on repatriation of investment capital and income. The Fund's purchase and sale of portfolio securities in Emerging
Markets may be constrained by limitations relating to daily changes in the prices of listed securities, periodic trading or settlement
volume and/or limitations on aggregate holdings of foreign investors. Such limitations may be computed based on the aggregate trading
volume by or holdings of the Fund, the Investment Adviser, or its affiliates and respective clients and other service providers. The Fund
may not be able to sell securities in circumstances where price, trading or settlement volume limitations have been reached.
Foreign investment in the
securities markets of certain Emerging Markets is restricted or controlled to varying degrees which may limit investment in such countries
or increase the administrative costs of such investments. For example, certain Asian countries require governmental approval prior to
investments by foreign persons or limit investment by foreign persons to only a specified percentage of an issuer's outstanding securities
or a specific class of securities which may have less advantageous terms (including price) than securities of the issuer available for
purchase by nationals. In addition, certain countries may restrict or prohibit investment opportunities in issuers or industries deemed
important to national interests. Such restrictions may affect the market price, liquidity and rights of securities that may be purchased
by the Fund. The repatriation of both investment income and capital from
certain Emerging Markets is
subject to restrictions such as the need for governmental consents. In situations where a country restricts direct investment in securities
(which may occur in certain Asian and other countries), the Fund may invest in such countries through other investment funds in such countries.
Many Emerging Markets have
experienced currency devaluations and substantial (and, in some cases, extremely high) rates of inflation. Other Emerging Markets have
experienced economic recessions. These circumstances have had a negative effect on the economies and securities markets of those Emerging
Markets.
Economies in Emerging Markets
generally are dependent heavily upon commodity prices and international trade and, accordingly, have been and may continue to be affected
adversely by the economies of their trading partners, trade barriers, exchange controls, managed adjustments in relative currency values
and other protectionist measures imposed or negotiated by the countries with which they trade.
Many Emerging Markets are
subject to a substantial degree of economic, political and social instability. Governments of some emerging countries are authoritarian
in nature or have been installed or removed as a result of military coups, while governments in other Emerging Markets have periodically
used force to suppress civil dissent. Disparities of wealth, the pace and success of democratization, and ethnic, religious and racial
disaffection, among other factors, have also led to social unrest, violence and/or labor unrest in some Emerging Markets. Unanticipated
political or social developments may result in sudden and significant investment losses. Investing in Emerging Markets involves greater
risk of loss due to expropriation, nationalization, confiscation of assets and property or the imposition of restrictions on foreign investments
and on repatriation of capital invested. As an example, in the past, some Eastern European governments have expropriated substantial amounts
of private property, and many claims of the property owners have never been fully settled. There is no assurance that similar expropriations
will not occur in other countries.
The Fund's investment in Emerging
Markets may also be subject to withholding or other taxes, which may be significant and may reduce the return to the Fund from an investment
in issuers in such countries.
Settlement procedures in Emerging
Markets are frequently less developed and reliable than those in the United States and may involve the Fund's delivery of securities before
receipt of payment for their sale. In addition, significant delays may occur in certain markets in registering the transfer of securities.
Settlement or registration problems may make it more difficult for the Fund to value its portfolio securities and could cause the Fund
to miss attractive investment opportunities, to have a portion of its assets uninvested or to incur losses due to the failure of a counterparty
to pay for securities the Fund has delivered or the Fund's inability to complete its contractual obligations because of theft or other
reasons.
The creditworthiness of the local
securities firms used by the Fund in Emerging Markets may not be as sound as the creditworthiness of firms used in more developed countries.
As a result, the Fund may be subject to a greater risk of loss if a securities firm defaults in the performance of its responsibilities.
The small size and inexperience
of the securities markets in certain Emerging Markets and the limited volume of trading in securities in those countries may make the
Fund's investments in such countries less liquid and more volatile than investments in countries with more developed securities markets
(such as the United States, Japan and most Western European countries). The Fund's investments in Emerging Markets are subject to the
risk that the liquidity of a particular investment, or investments generally, in such countries will shrink or disappear suddenly and
without warning as a result of adverse economic, market or political conditions or adverse investor perceptions, whether or not accurate.
Because of the lack of sufficient market liquidity, the Fund may incur losses because it will be required to effect sales at a disadvantageous
time and only then at a substantial drop in price. Investments in Emerging Markets may be more difficult to value precisely because of
the characteristics discussed above and lower trading volumes. In addition, the impact of the economic and public health crisis in emerging
market countries may be greater due to their generally less established healthcare systems and capabilities with respect to fiscal and
monetary policies, which may exacerbate other pre-existing political, social and economic tasks.
The Fund's use of foreign
currency management techniques in Emerging Markets may be limited. A significant portion of the Fund's currency exposure in Emerging Markets
may not be covered by these techniques.
Forward Contract Risk.
Forward contracts involve the purchase or sale of a specific quantity of a commodity, government security, foreign currency, or other
asset at a specified price, with delivery and settlement at a specified future date. Because it is a completed contract, a purchase forward
contract can be a cover for the sale of a futures contract. The Fund may enter into forward contracts for hedging purposes and non-hedging
purposes (i.e., to increase returns). Forward contracts may be used by the Fund for hedging purposes to protect against uncertainty in
the level of future foreign currency exchange rates, such as when the Fund anticipates purchasing or selling a foreign security. For example,
this technique would allow the Fund to "lock in" the U.S. dollar price of the security. Forward contracts may also be used to attempt
to protect the value of the Fund's existing holdings of foreign securities. There may be, however, an imperfect correlation between the
Fund's foreign securities holdings and the forward contracts entered into with respect to those holdings. Forward contracts may also be
used for non-hedging purposes to pursue the Fund's investment objective, such as when the Investment Adviser anticipates that particular
foreign currencies will appreciate or depreciate in value, even though securities denominated in
those currencies are not then
held in the Fund's portfolio. There is no requirement that the Fund hedge all or any portion of its exposure to foreign currency risks.
Forward contracts, unlike
futures contracts, are not traded on exchanges and are not standardized; rather, banks and dealers act as principals in these markets,
negotiating each transaction on an individual basis. The principals who deal in the forward markets are not required to continue to make
markets in the currencies or commodities they trade and these markets can experience periods of illiquidity, sometimes of significant
duration. There have been periods during which certain participants in these markets have refused to quote prices for certain currencies
or commodities or have quoted prices with an unusually wide spread between the price at which they were prepared to buy and that at which
they were prepared to sell. Disruptions can occur in any market traded by the Investment Adviser due to unusually high trading volume,
political intervention or other factors. Arrangements to trade forward contracts may be made with only one or a few counterparties, and
liquidity problems therefore might be greater than if such arrangements were made with numerous counterparties. The imposition of controls
by governmental authorities might also limit such forward (and futures) trading to less than that which the Investment Adviser would otherwise
recommend, to the possible detriment of the Fund. Market illiquidity or disruption could result in major losses to the Fund. In addition,
the Fund will be exposed to credit risks with regard to counterparties with whom they trade as well as risks relating to settlement default.
Such risks could result in substantial losses to the Fund.
Derivatives Risk.
The Fund may invest in derivative instruments including options, futures, options on futures, forwards, swaps (including credit default,
index, basis, total return, volatility and currency swaps), options on swaps and other derivatives, although suitable derivative instruments
may not always be available to the Investment Adviser for these purposes. The Fund intends to employ a strategy of writing (selling) covered
call options on a portion of the common stocks in its portfolio, writing (selling) put options on a portion of the common stocks in its
portfolio and, to a lesser extent, writing (selling) covered call and writing (selling) put options on indices of securities and sectors
of securities generally within the healthcare industry. This option strategy is intended to generate current income from option premiums
as a means to enhance distributions payable to the Fund's shareholders and will be limited to 30% of the Fund's Managed Assets. These
option strategies are not always profitable. The sale of a covered call option exposes the Fund during the term of the option to possible
loss of opportunity to realize appreciation in the market price of the underlying security or to possible loss due to continued holding
of a security that might otherwise have been sold to protect against depreciation in the market price of the security. To the extent the
Fund writes a covered put option, the Fund has assumed the obligation during the option period to purchase the security or securities
from the put buyer at the option's exercise price if the put buyer exercises its option, regardless of whether the value of the underlying
investment falls below the exercise price. This means that a Fund that writes a
put option may be required
make payment for such investment at the exercise price. This may result in losses to the Fund and may result in the Fund holding securities
for some period of time when it is disadvantageous to do so. Therefore, the Investment Adviser may choose to decrease its use of the option
writing strategy to the extent that it may negatively impact the Fund. Other than the Fund's option strategy and use of derivatives for
hedging purposes, the Fund may invest up to 10% of its Managed Assets in derivatives. Derivative instruments can be illiquid, may disproportionately
increase losses, and may have a potentially large adverse impact on Fund performance.
Although both OTC and exchange-traded
derivatives markets may experience a lack of liquidity, OTC nonstandardized derivative transactions are generally less liquid than exchange-traded
instruments. The illiquidity of the derivatives markets may be due to various factors, including congestion, disorderly markets, limitations
on deliverable supplies, the participation of speculators or their withdrawal from the markets, government regulation and intervention,
and technical and operational or system failures. In addition, daily limits on price fluctuations and speculative position limits on exchanges
on which the Fund may conduct its transactions in derivative instruments may prevent the Fund from liquidating these positions at an advantageous
time or price, subjecting the Fund to the potential of greater losses. Losses from investments in derivative instruments can result from
a lack of correlation between changes in the value of derivative instruments and the portfolio assets (if any) being hedged, the potential
illiquidity of the markets for derivative instruments, the failure of the counterparty to perform its contractual obligations, or the
risks arising from margin requirements and related leverage factors associated with such transactions. Losses may also arise if the Fund
receives cash collateral under the transactions and some or all of that collateral is invested in the market. To the extent that cash
collateral is so invested, such collateral will be subject to market depreciation or appreciation, and the Fund may be responsible for
any loss that might result from its investment of the counterparty's cash collateral. The use of these derivatives trading techniques
also involves the risk of loss if the Investment Adviser is incorrect in its expectation of the timing or level of fluctuations in securities
prices, interest rates or currency prices. Investments in derivative instruments may be harder to value, subject to greater volatility
and more likely subject to changes in tax treatment than other investments. For these reasons, the Investment Adviser's attempts to hedge
portfolio risks through the use of derivative instruments may not be successful. Trading in derivative instruments can increase the Fund's
exposure to leverage. Thus, the leverage offered by trading in derivative instruments will magnify the gains and losses experienced by
the Fund and could cause the Fund's net asset value to be subject to wider fluctuations than would be the case if the Fund did not use
the leverage feature in derivative instruments.
Derivatives markets have been
subject to increased regulation over the past several years, which may continue, and consequently, may make derivatives trading more costly,
may limit the availability of and reduce the liquidity of derivatives or may otherwise adversely affect the
value or performance of derivatives.
Such potential adverse future developments could increase the risks reduce the effectiveness of the Fund's derivative transactions, and
cause the Fund to lose value. For instance, the SEC has adopted new regulations related to a registered investment company's use of derivatives
and related instruments. These regulations impose limits on the amount of derivatives a fund can enter into, eliminate the asset segregation
framework formerly used by funds to comply with Section 18 of the 1940 Act. These regulations may significantly impact the Fund's ability
to invest in derivatives and other instruments, limit the Fund's ability to employ certain strategies that use derivatives and/or adversely
affect the Fund's performance, efficiency in implementing its strategy, liquidity and/or ability to pursue its investment objectives.
Risks Associated with
the Fund's Option Strategy. The ability of the Fund to achieve
its investment objective is partially dependent on the successful implementation of its option strategy. There are several risks associated
with transactions in options on securities used in connection with the Fund's option strategy. For example, there are significant differences
between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction
not to achieve its objectives. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and
even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events.
As the writer of a call option
covered with a security held by the Fund, the Fund forgoes, during the option's life, the opportunities to profit from increases in the
market value of the security covering the call option above the sum of the premium and the strike price of the call but retains the risk
of loss should the price of the underlying security decline. As the Fund writes such covered calls over more of its portfolio, its ability
to benefit from capital appreciation becomes more limited. To the extent the Fund writes call options that are not fully covered by securities
in its portfolio (such as calls on an index or sector), it will lose money if the portion of the security or securities underlying the
option that is not covered by securities in the Fund's portfolio appreciate in value above the exercise price of the option by an amount
that exceeds the premium received on the option plus the exercise price of the option. The amount of this loss theoretically could be
unlimited. The writer of an option has no control over the time when it may be required to fulfill its obligations as a writer of the
option.
When the Fund writes put options,
it bears the risk of loss if the value of the underlying stock declines below the exercise price minus the put premium. If the option
is exercised, the Fund could incur a loss if it is required to purchase the stock underlying the put option at a price greater than the
market price of the stock at the time of exercise plus the put premium the Fund received when it wrote the option. While the Fund's potential
gain as the writer of a
covered put option is limited
to the premium received from the purchaser of the put option, the Fund risks a loss equal to the entire exercise price of the option minus
the put premium.
Interest Rate Risk.
Prices of fixed-income securities generally rise and fall in response to interest rate changes. Generally, the prices of fixed-rate instruments
held by the Fund will tend to fall as interest rates rise. Conversely, when interest rates decline, the value of fixed-rate instruments
held by the Fund can be expected to rise. Changing interest rates may have unpredictable effects on the markets, may result in heightened
market volatility and may detract from Fund performance. In addition, changes in monetary policy may exacerbate the risks associated with
changing interest rates. The longer the duration, or price sensitivity to changes in interest rates, of the security, the more sensitive
the security is to this risk. In typical market interest rate environments, the prices of longer-term fixed-rate instruments tend to fluctuate
more in price in response to changes in market interest rates than prices of shorter-term fixed-rate instruments. A 1% increase in interest
rates would reduce the value of a $100 note by approximately one dollar if it had a one-year duration. It is difficult to predict the
magnitude, timing or direction of interest rate changes and the impact these changes will have on the Fund's investments and the markets
where it trades.
The risks attendant to changing
interest rate environments have been, and continue to be, magnified in the current economic environment. To combat rising inflation, the
Board of Governors of the Federal Reserve System increased the federal funds rate several times in 2022 and 2023.
REIT Risk.
REITs whose underlying properties are concentrated in a particular industry, such as the healthcare industry, or geographic region are
subject to risks affecting such industries or regions. The securities of REITs involve greater risks than those associated with larger,
more established companies and may be subject to more abrupt or erratic price movements because of interest rate changes, economic conditions
and other factors. Securities of such issuers may lack sufficient market liquidity to enable the Fund to effect sales at an advantageous
time or without a substantial drop in price.
Credit/Default Risk.
Loans and other debt obligation investments are subject to the risk of non-payment of scheduled principal and interest. Changes in economic
conditions or other circumstances may reduce the capacity of the party obligated to make principal and interest payments on such instruments
and may lead to defaults. Such non-payments and defaults may reduce the value of the shares and income distributions. The value of loans
and other income investments also may decline because of concerns about the issuer's ability to make principal and interest payments.
In addition, the credit ratings of loans or other income investments may be lowered if the financial condition of the party obligated
to make payments with respect to such instruments changes. Because the Fund will invest in non-investment grade securities, it will be
exposed to a greater amount of credit risk than a fund which invests solely in investment grade securities. The prices of lower grade
instruments are generally
more sensitive to negative developments, such as a decline in the issuer's revenues or a general economic downturn, than are the prices
of higher grade instruments. Credit ratings assigned by rating agencies are based on a number of factors and do not necessarily reflect
the issuer's current financial condition or the volatility or liquidity of the security. In the event of bankruptcy of the issuer of loans
or other income investments, the Fund could experience delays or limitations with respect to its ability to realize the benefits of any
collateral securing the instrument. In order to enforce its rights in the event of a default, bankruptcy or similar situation, the Fund
may be required to retain legal or similar counsel and incur additional costs.
Non-Investment Grade
Securities Risk. The Fund may invest in securities that are
rated, at the time of investment, non-investment grade quality (rated "Ba/BB+/BB+" or below by Moody's, S&P or Fitch, respectively),
or securities that are unrated but determined to be of comparable quality by the Investment Adviser. The Fund may invest up to 15% of
its Managed Assets in non-convertible debt securities that are, at the time of investment, rated Caa1 or lower by Moody's and CCC+ or
lower by S&P or Fitch, or comparably rated by another nationally recognized statistical rating organization, or, if unrated, determined
by the Investment Adviser to be of comparable credit quality. Such securities are subject to a very high credit risk. Securities of non-investment
grade quality are regarded as having predominantly speculative characteristics with respect to the issuer's capacity to pay interest and
repay principal, and are commonly referred to as "junk bonds." Non-investment grade securities and unrated securities of comparable credit
quality are subject to the increased risk of an issuer's inability to meet principal and interest payment obligations. The value of high
yield, lower quality bonds is affected by the creditworthiness of the issuers of the securities and by general economic and specific industry
conditions. These securities may be subject to greater price volatility due to such factors as specific corporate or municipal developments,
interest rate sensitivity, negative perceptions of the junk bond markets generally and less secondary market liquidity. Issuers of high
yield bonds are not as strong financially as those with higher credit ratings. These issuers are more vulnerable to financial setbacks
and recession than more creditworthy issuers, which may impair their ability to make interest and principal payments. Non-investment grade
securities may be particularly susceptible to economic downturns, specific corporate or municipal developments, interest rate sensitivity,
negative perceptions of the junk bond markets generally and less secondary market liquidity. An economic recession could disrupt severely
the market for such securities and may have an adverse impact on the value of such securities. In addition, any such economic downturn
could adversely affect the ability of the issuers of such securities to repay principal and pay interest thereon and increase the incidence
of default for such securities. Non-investment grade securities, though higher yielding, are characterized by high risk. They may be subject
to certain risks with respect to the issuing entity and to greater market fluctuations than certain lower yielding, higher rated securities.
The retail secondary market for non-investment grade securities may be less liquid than that for higher rated securities. Adverse conditions
could make it difficult at
times for the Fund to sell certain securities or could result in lower prices than those used in calculating the Fund's NAV. Because of
the substantial risks associated with investments in non-investment grade securities, you could lose money on your investment in shares
of the Fund, both in the short-term and the long-term.
Counterparty Risk.
Many of the protections afforded to participants on some organized exchanges, such as the performance guarantee of a clearing house, might
not be available in connection with uncleared OTC transactions. Therefore, in those instances in which the Fund enters into uncleared
OTC transactions, the Fund will be subject to the risk that its direct counterparty will not perform its obligations under the transactions
and that the Fund will sustain losses. If a counterparty becomes bankrupt, the Fund may experience significant delays in obtaining recovery
(if at all) under the derivative contract in bankruptcy or other reorganization proceeding; if the Fund's claim is unsecured, the Fund
will be treated as a general creditor of such prime broker or counterparty and will not have any claim with respect to the underlying
security. The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances. The counterparty risk for cleared
derivatives is generally lower than for uncleared OTC derivatives since generally a clearing organization becomes substituted for each
counterparty to a cleared derivative and, in effect, guarantees the parties' performance under the contract as each party to a trade looks
only to the clearing house for performance of financial obligations. However, there can be no assurance that the clearing house, or its
members, will satisfy its obligations to the Fund.
Regulation as a "Commodity
Pool". The Investment Adviser has claimed an exclusion from
the definition of the term "commodity pool operator" with respect to the Fund pursuant to Regulation 4.5 promulgated by the U.S. Commodity
Futures Trading Commission (the "CFTC"). For the Investment Adviser to continue to qualify for the exclusion under CFTC Regulation 4.5
with respect to the Fund, the aggregate initial margin and premiums required to establish our positions in derivative instruments subject
to the jurisdiction of the Commodity Exchange Act of 1936, as amended ("CEA") (other than positions entered into for hedging purposes)
may not exceed five percent of the Fund's liquidation value or, alternatively, the net notional value of the Fund's aggregate investments
in CEA-regulated derivative instruments (other than positions entered into for hedging purposes) may not exceed 100% of the Fund's liquidation
value. In the event the Investment Adviser fails to qualify for the exclusion with respect to the Fund and is required to register as
a "commodity pool operator," it will become subject to additional disclosure, recordkeeping and reporting requirements with respect to
the Fund, which may increase the Fund's expenses.
Failure of Futures
Commission Merchants and Clearing Organizations. The Fund may
deposit funds required to margin open positions in derivative instruments subject to the CEA with a clearing broker registered as a "futures
commission merchant" ("FCM"). The CEA requires an FCM to segregate all funds received from customers with respect to any orders for the
purchase or sale of U.S. domestic futures contracts and cleared swaps from the FCM's
proprietary assets. Similarly,
the CEA requires each FCM to hold in a separate secure account all funds received from customers with respect to any orders for the purchase
or sale of foreign futures contracts and segregate any such funds from the funds received with respect to domestic futures contracts.
However, all funds and other property received by a clearing broker from its customers are held by the clearing broker on a commingled
basis in an omnibus account and may be freely accessed by the clearing broker, which may also invest any such funds in certain instruments
permitted under the applicable regulation. There is a risk that assets deposited by the Fund with any swaps or futures clearing broker
as margin for futures contracts or cleared swaps may, in certain circumstances, be used to satisfy losses of other clients of the Fund's
clearing broker. In addition, the assets of the Fund may not be fully protected in the event of the clearing broker's bankruptcy, as the
Fund would be limited to recovering only a pro rata share of all available funds segregated on behalf of the clearing broker's combined
domestic customer accounts.
Similarly, the CEA requires
a clearing organization approved by the CFTC as a derivatives clearing organization to segregate all funds and other property received
from a clearing member's clients in connection with domestic futures, swaps and options contracts from any funds held at the clearing
organization to support the clearing member's proprietary trading. Nevertheless, with respect to futures and options contracts, a clearing
organization may use assets of a non-defaulting customer held in an omnibus account at the clearing organization to satisfy payment obligations
of a defaulting customer of the clearing member to the clearing organization. As a result, in the event of a default or the clearing broker's
other clients or the clearing broker's failure to extend its own funds in connection with any such default, the Fund would not be able
to recover the full amount of assets deposited by the clearing broker on its behalf with the clearing organization.
Liquidity Risk.
Illiquid securities include securities the disposition of which is subject to substantial legal or contractual restrictions. The sale
of illiquid securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses
than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted
securities may sell at a price lower than similar securities that are not subject to restrictions on resale. The continued liquidity of
such securities may not be as well assured as that of publicly traded securities. During certain periods the liquidity of particular issuers
or industries, or all securities within particular investment categories, may shrink or disappear suddenly and without warning as a result
of adverse economic, market or political events, or adverse investor perceptions, whether or not accurate.
Equity-Linked Notes.
Equity-linked notes ("ELNs") are hybrid securities with characteristics of both fixed income and equity securities. An ELN is a debt instrument,
usually a bond, that pays interest based upon the performance of an underlying equity, which can be a single stock, basket of stocks or
an equity index. The interest payment on an ELN may in some cases be leveraged so that, in percentage terms, it exceeds the relative performance
of the market.
ELNs generally are subject to
the risks associated with the securities of equity issuers, default risk and counterparty risk. Additionally, because the Fund may use
ELNs as an alternative or complement to its options strategy, the use of ELNs in this manner would expose the Fund to the risk that such
ELNs will not perform as anticipated, and the risk that the use of ELNs will expose the Fund to different or additional default and counterparty
risk as compared to a similar investment executed in an options strategy.
PIPEs Risk.
PIPE transactions typically involve the purchase of securities directly from a publicly traded company or its affiliates in a private
placement transaction, typically at a discount to the market price of the company's common stock. In a PIPE transaction, the Fund may
bear the price risk from the time of pricing until the time of closing. Equity issued in this manner is often subject to transfer restrictions
and is therefore less liquid than equity issued through a registered public offering. In a PIPE transaction, the Fund may bear the price
risk from the time of pricing until the time of closing. The Fund may be subject to lock-up agreements that prohibit transfers for a fixed
period of time. In addition, because the offering of the securities in a PIPE transaction is not registered under the Securities Act,
the securities are "restricted" and cannot be immediately resold by the investors into the public markets. The Fund may enter into a registration
rights agreement with the issuer pursuant to which the issuer commits to file a resale registration statement allowing the Fund to publicly
resell its securities. Accordingly, PIPE securities may be deemed illiquid. However, the ability of the Fund to freely transfer the shares
is conditioned upon, among other things, the Commission's preparedness to declare the resale registration statement effective covering
the resale of the shares sold in the private financing and the issuer's right to suspend the Fund's use of the resale registration statement
if the issuer is pursuing a transaction or some other material non-public event is occurring. Accordingly, PIPE securities may be subject
to risks associated with illiquid securities.
Venture Capital Investments
Risk. The Fund may occasionally invest in venture capital opportunities.
While these securities offer the opportunity for significant capital gains, such investments also involve a degree of risk that can result
in substantial losses. Some of the venture capital opportunities in which the Fund may invest are expected to be companies that are in
a "start-up" stage of development, have little or no operating history, operate at a loss or with substantial variations in operating
results from period to period, have limited products, markets, financial resources or management depth, or have the need for substantial
additional "follow-on" capital to support expansion or to achieve or maintain a competitive position. Such additional investments may
dilute the interests of prior investors, such as the Fund. Some of these companies may be emerging companies at the research and development
stage with no marketable or approved products or technology. There can be no assurance that securities of start-up or emerging growth
companies will, in the future, yield returns commensurate with their associated risks.
These investments, which are considered
Restricted Securities, will be made primarily in convertible preferred stock. The Fund may also purchase non-convertible debt securities
in connection with its venture capital investments, and otherwise when the Investment Adviser believes that such investments would be
consistent with the Fund's investment objective. While these debt investments typically will not be rated, the Investment Adviser believes
that, in light of the risk characteristics associated with investments in emerging growth companies, if such investments were to be compared
with investments rated by S&P or Moody's, they may be rated as low as "C" in the rating categories established by S&P and Moody's.
Such securities are commonly referred to as "junk bonds" and are considered, on balance, as predominantly speculative.
ETFs Risk.
An investment in an ETF generally presents the same primary risks as an investment in a conventional fund (i.e., one that is not exchange-traded)
that has the same investment objectives, strategies and policies. In addition, an ETF may fail to accurately track the market segment
or index that underlies its investment objective. The price of an ETF can fluctuate, and the Fund could lose money investing in an ETF.
Moreover, ETFs are subject to the following risks that do not apply to conventional open-end funds: (i) the market price of the ETF's
shares may trade at a premium or a discount to their NAV; (ii) an active trading market for an ETF's shares may not develop or be maintained;
and (iii) there is no assurance that the requirements of the exchange necessary to maintain the listing of an ETF will continue to be
met or remain unchanged.
Leverage Risk.
The Fund intends to use financial leverage for investment purposes. The Fund may issue preferred shares, borrow money and/or issue debt
securities ("traditional leverage"). The Fund intends to use traditional leverage through a credit facility representing up to 20% of
the Fund's Managed Assets as measured at the time when leverage is incurred. In addition, the Fund may enter into reverse repurchase agreements,
swaps, futures, forward contracts, securities lending, short sales, and other derivative transactions, that have similar effects as leverage
(collectively referred to as "effective leverage"). Furthermore, at no time will the Fund's use of leverage, either through traditional
leverage or effective leverage, exceed 30% of the Fund's Managed Assets as measured at the time when leverage is incurred. Notwithstanding
the foregoing, effective leverage incurred through the Fund's option strategy and use of derivatives for hedging purposes will not be
counted toward the Fund's limit on the use of effective leverage or in the overall 30% leverage limitation.
The Fund's leveraged capital
structure creates special risks not associated with unleveraged funds having a similar investment objective and policies. These include
the possibility of greater loss and the likelihood of higher volatility of the NAV, market price and distributions of the Fund and the
asset coverage for preferred shares, if any. Such volatility may increase the likelihood of the Fund having to sell investments in order
to meet its obligations to make distributions on the preferred shares, or to redeem preferred shares when it may be disadvantageous to
do so. Also, if the Fund is utilizing leverage, a decline in NAV could affect
the ability of the Fund to
make distributions and such a failure to pay dividends or make distributions could result in the Fund ceasing to qualify as a regulated
investment company under the Code, as amended.
Other risks and special considerations
include the risk that fluctuations in interest rates on borrowings and short-term debt or in the interest or dividend rates on any leverage
that the Fund must pay will reduce the return to the shareholders; the effects of leverage in a declining market, which are likely to
cause a greater decline in the NAV of the shares than if the Fund were not leveraged, which may result in a greater decline in the market
price of the shares. If the Fund uses leverage, the amount of fees paid to the Investment Adviser for its services will be higher than
if the Fund did not use leverage because the fees paid are calculated based on Managed Assets, which includes assets purchased with leverage.
Therefore, the Investment Adviser has a financial incentive to use leverage, which creates a conflict of interest between the Investment
Adviser and common shareholders, as only the Fund's common shareholders would bear the fees and expenses incurred through the Fund's use
of leverage, including the issuance of Preferred shares, if any. Leverage may increase operating costs, which may reduce total return.
Effects of Leverage
Assuming that leverage will
represent approximately 20% of Managed Assets and that the Fund will bear expenses relating to that leverage at an annual cost of 1.00%,
Fund performance before leverage (net of expenses) must exceed .2% in order to cover the expenses specifically related to the Fund's use
of leverage. Actual leverage expenses will vary frequently and may be significantly higher or lower than the rate estimated above.
As of September 30, 2023 and
the most recently signed line of credit agreement, the Fund projects an annual leverage expense of 6.57%. The Fund had $120,000,000 of
funds drawn on its line of credit which was 21.2% of Managed Assets as of September 30, 2023.
The following table is furnished
in response to requirements of the SEC. It is designed to illustrate the effects of leverage on total returns from an investment in the
Fund assuming investment portfolio returns before leverage of (10)%, (5)%, 0%, 5% and 10%. The table further reflects the use of leverage
representing 20% of the Fund's Managed Assets and the Fund's currently projected annual leverage expense of 6.57%.
Assumed
Fund Return Before Leverage
(Net of Expenses) |
|
|
(10.00 |
)% |
|
|
(5.00 |
)% |
|
|
0.00 |
% |
|
|
5.00 |
% |
|
|
10.00 |
% |
|
|
Assumed Fund Return Inclusive of Leverage
|
|
|
(14.14
|
)% |
|
|
(7.89
|
)% |
|
|
(1.64
|
)% |
|
|
4.61
|
% |
|
|
10.89
|
% |
|
Assumed Fund performance before
and inclusive of leverage are hypothetical and are provided to assist investors in understanding the effects of leverage. Actual performance
experienced by the Fund may be lesser or greater than that shown above.
Restricted Securities
and Valuation Risk. Some of the Fund's investments are subject
to restrictions on resale and generally have no established trading market or are otherwise illiquid with little or no trading activity.
The valuation process requires an analysis of various factors. The Fund's fair value methodology includes the examination of, among other
things, (i) the existence of any contractual restrictions on the disposition of the securities; (ii) information obtained from the issuer
which may include an analysis of the company's financial statements, the company's products or intended markets, or the company's technologies;
and (iii) the price of a security sold at arm's length in an issuer's subsequent completed round of financing. As there is typically no
readily available market value for some of the Restricted Securities in the Fund's portfolio, such Restricted Securities in the Fund's
portfolio are valued at fair value as determined in good faith by or under the direction of the Board pursuant to the Fund's valuation
policy and a consistently applied valuation process. Because of the inherent uncertainty of determining the fair value of investments
that do not have a readily available market value, the fair value of the Fund's investments determined in good faith by the Board may
differ significantly from the values that would have been used had a ready market existed for the investments, and the differences could
be material. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment
be applied to the specific facts and circumstances of each portfolio investment, while employing a consistently applied valuation process
for the types of investments the Fund makes.
Key Personnel Risk.
There may be only a limited number of securities professionals who have comparable experience to that of the Fund's existing portfolio
management team in the area of healthcare companies. If one or more of the team members dies, resigns, retires or is otherwise unable
to act on behalf of the Investment Adviser, there can be no assurance that a suitable replacement could be found immediately.
Anti-Takeover Provisions
Risk. The Fund's Amended and Restated Declaration of Trust ("Declaration
of Trust"), dated March 5, 2015, as amended, has provisions that could have the effect of limiting the ability of other entities or persons
to (1) acquire control of the Fund, (2) cause it to engage in certain transactions, or (3) modify its structure. The By-Laws also contain
provisions regarding qualifications for nominees for Trustee positions, advance notice of Shareholder proposals, and requirements for
the call of special Shareholder meetings. These provisions may be considered "anti-takeover" provisions.
Related Party Transactions
Risk. The majority of the Board is unaffiliated with the Investment
Adviser; nevertheless, the Fund may be subject to certain potential conflicts of interest. Although the Fund has no obligation to do so,
it may place brokerage orders with brokers who provide supplemental investment research and market and statistical information about healthcare
companies and the healthcare industries. In addition, other investment companies advised by the Investment Adviser may concurrently invest
with the Fund in restricted securities under certain conditions. The Fund also may invest, subject to
applicable law, in companies
in which the principals of the Investment Adviser or Trustees of the Fund have invested, or for which they serve as directors or executive
officers. The Investment Company Act prohibits the Fund from engaging in certain transactions involving its "affiliates," including, among
others, the Fund's Trustees, officers and employees, the Investment Adviser and any "affiliates" of such affiliates except pursuant to
an exemptive order or the provisions of certain rules under the Investment Company Act. In the view of the staff of the Commission, other
investment companies advised by the Investment Adviser may, in some instances, be viewed to be affiliates of the Fund. Such legal restrictions
and delays and costs involved in obtaining necessary regulatory approvals may preclude or discourage the Fund from making certain investments
and no assurance can be given that any exemptive order sought by the Fund will be granted.
Government Intervention.
Instability in the financial markets has led the U.S. government and certain foreign governments to take a number of unprecedented actions
designed to support certain financial institutions and segments of the financial markets that have experienced extreme volatility, and
in some cases a lack of liquidity, including through direct purchases of equity and debt securities. Federal, state, and foreign governments,
their regulatory agencies or self-regulatory organizations may take actions that affect the regulation of the issuers in which the Fund
invests in ways that are unforeseeable. Legislation or regulation may also change the way in which the Fund is regulated. Such legislation
or regulation could limit or preclude the Fund's ability to achieve its investment objective.
Market Disruption
and Geopolitical Risk. The value of your investment in the Fund
is based on the market prices of the securities the Fund holds. These prices change daily due to economic and other events that affect
markets generally, as well as those that affect particular regions, countries, industries, companies or governments. These price movements,
sometimes called volatility, may be greater or less depending on the types of securities the Fund owns and the markets in which the securities
trade. The increasing interconnectivity between global economies and financial markets increases the likelihood that events or conditions
in one region or financial market may adversely impact issuers in a different country, region or financial market. Securities in the Fund's
portfolio may underperform due to inflation (or expectations for inflation), interest rates, global demand for particular products or
resources, natural/environmental disasters, pandemics, epidemics, terrorism, cyber-attacks, regulatory events and governmental or quasi-governmental
actions. The occurrence of global events similar to those in recent years, such as terrorist attacks around the world, natural disasters,
social and political discord or debt crises and downgrades, among others, may result in market volatility and may have long term effects
on both the U.S. and global financial markets. A disruption of financial markets or other terrorist attacks could adversely affect Fund
service providers and/or the Fund's operations as well as interest rates, secondary trading, credit risk, inflation and other factors
relating to the shares. The Fund cannot predict the effects or likelihood of similar events in the future on the U.S. and world economies,
the value of the shares or the NAV of the Fund.
Social, political, economic
and other conditions and events, such as natural/environmental disasters, health emergencies (e.g., epidemics and pandemics such as COVID-19,
avian influenza and HINI/09), cyber-attacks, terrorism, actual or threatened wars or other armed conflicts (such as the Russia/Ukraine
and Israel/Hamas conflicts), may occur and could significantly impact issuers, industries, governments and other systems, including the
financial markets. These impacts could negatively affect the Fund's investments in securities and instruments that are economically tied
to the applicable region, and include (but are not limited to) declines in value and reductions in liquidity. In addition, to the extent
new sanctions are imposed or previously relaxed sanctions are reimposed, complying with such restrictions may prevent the Fund from pursuing
certain investments, cause delays or other impediments with respect to consummating such investments or divestments, require divestment
or freezing of investments on unfavorable terms, render divestment of underperforming investments impracticable, negatively impact the
Fund's ability to achieve its investment objective, prevent the Fund from receiving payments otherwise due it, increase diligence and
other similar costs to the Fund, render valuation of affected investments challenging, or require the Fund to consummate an investment
on terms that are less advantageous than would be the case absent such restrictions. As global systems, economies and financial markets
are increasingly interconnected, events that once had only local impact are now more likely to have regional or even global effects. Events
that occur in one country, region or financial market will, more frequently, adversely impact issuers in other countries, regions or markets.
These impacts can be exacerbated by failures of governments and societies to adequately respond to an emerging event or threat. These
types of events quickly and significantly impact markets in the U.S. and across the globe leading to extreme market volatility and disruption.
The extent and nature of the impact on supply chains or economies and markets from these events is unknown, particularly if these types
of events persist for an extended period of time. These types of events, could reduce consumer demand or economic output, result in market
closures, travel restrictions or quarantines, and generally have a significant impact on the economies and financial markets and the Investment
Adviser's investment advisory activities and services of other service providers, which in turn could adversely affect the Fund's investments
and other operations. The value of the Fund's investments may decrease as a result of such events, particularly if these events adversely
impact the operations and effectiveness of the Investment Adviser or key service providers or if these events disrupt systems and processes
necessary or beneficial to the investment advisory or other activities on behalf the Fund.
In March 2023, several financial
institutions experienced a larger-than-expected decline in deposits and two banks, Silicon Valley Bank ("SVB") and Signature Bank, were
placed into receivership. Given the interconnectedness of the banking system, the Federal Reserve invoked the systemic risk exception,
temporarily transferred all deposits-both insured and uninsured-and substantially all the assets of the two banks into respective bridge
banks and
guaranteed depositors' full
access to their funds. This type of systemic risk event and/or resulting government actions can negatively impact the Funds, for example,
through less credit being available to issuers or uncertainty regarding safety of deposits at other institutions. These risks also may
adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms, and exchanges, with which
the Fund interacts.
Potential Conflicts
of Interest Risk. The Investment Adviser's investment team is
responsible for managing the Fund as well as three other closed-end investment companies. In the future, the investment team may manage
other funds and accounts, including proprietary accounts, separate accounts and other pooled investment vehicles, such as unregistered
hedge funds. In the future, a portfolio manager may manage a separate account or other pooled investment vehicle which may have materially
higher fee arrangements than the Fund and may also have a performance-based fee. The side-by-side management of these funds or accounts
may raise potential conflicts of interest relating to cross trading, the allocation of investment opportunities and the aggregation and
allocation of trades.
Special Purpose Acquisition
Company Risk. The Fund may invest in SPACs. SPACs are collective
investment structures that pool funds in order to seek potential acquisition opportunities. Unless and until an acquisition is completed,
a SPAC generally invests its assets (less an amount to cover expenses) in U.S. Government securities, money market fund securities and
cash. SPACs and similar entities may be blank check companies with no operating history or ongoing business other than to seek a potential
acquisition. Certain SPACs may seek acquisitions only in limited industries or regions. If an acquisition that meets the requirements
for the SPAC is not completed within a predetermined period of time, the invested funds are returned to the entity's shareholders, unless
such shareholders approve alternative arrangements. Investments in SPACs may be illiquid and/or be subject to restrictions on resale.
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| Effects of Leverage [Text Block] |
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Effects of Leverage
Assuming that leverage will
represent approximately 20% of Managed Assets and that the Fund will bear expenses relating to that leverage at an annual cost of 1.00%,
Fund performance before leverage (net of expenses) must exceed .2% in order to cover the expenses specifically related to the Fund's use
of leverage. Actual leverage expenses will vary frequently and may be significantly higher or lower than the rate estimated above.
As of September 30, 2023 and
the most recently signed line of credit agreement, the Fund projects an annual leverage expense of 6.57%. The Fund had $120,000,000 of
funds drawn on its line of credit which was 21.2% of Managed Assets as of September 30, 2023.
The following table is furnished
in response to requirements of the SEC. It is designed to illustrate the effects of leverage on total returns from an investment in the
Fund assuming investment portfolio returns before leverage of (10)%, (5)%, 0%, 5% and 10%. The table further reflects the use of leverage
representing 20% of the Fund's Managed Assets and the Fund's currently projected annual leverage expense of 6.57%.
Assumed
Fund Return Before Leverage
(Net of Expenses) |
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(10.00 |
)% |
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(5.00 |
)% |
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0.00 |
% |
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5.00 |
% |
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10.00 |
% |
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Assumed Fund Return Inclusive of Leverage
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(14.14
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(7.89
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)% |
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(1.64
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)% |
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4.61
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% |
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10.89
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% |
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Assumed Fund performance before
and inclusive of leverage are hypothetical and are provided to assist investors in understanding the effects of leverage. Actual performance
experienced by the Fund may be lesser or greater than that shown above.
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| Annual Dividend Payment |
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$ (1.4)
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[7] |
$ (1.4)
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$ (1.4)
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$ (1.4)
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$ (1.4)
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| Effects of Leverage [Table Text Block] |
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The following table is furnished
in response to requirements of the SEC. It is designed to illustrate the effects of leverage on total returns from an investment in the
Fund assuming investment portfolio returns before leverage of (10)%, (5)%, 0%, 5% and 10%. The table further reflects the use of leverage
representing 20% of the Fund's Managed Assets and the Fund's currently projected annual leverage expense of 6.57%.
Assumed
Fund Return Before Leverage
(Net of Expenses) |
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(10.00 |
)% |
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(5.00 |
)% |
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0.00 |
% |
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5.00 |
% |
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10.00 |
% |
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Assumed Fund Return Inclusive of Leverage
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(14.14
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)% |
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(7.89
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)% |
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(1.64
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)% |
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4.61
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% |
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10.89
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% |
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Assumed Fund performance before
and inclusive of leverage are hypothetical and are provided to assist investors in understanding the effects of leverage. Actual performance
experienced by the Fund may be lesser or greater than that shown above.
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| Return at Minus Ten [Percent] |
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(14.14%)
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| Return at Minus Five [Percent] |
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(7.89%)
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| Return at Zero [Percent] |
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(1.64%)
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| Return at Plus Five [Percent] |
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4.61%
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| Return at Plus Ten [Percent] |
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10.89%
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| Effects of Leverage, Purpose [Text Block] |
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The following table is furnished
in response to requirements of the SEC. It is designed to illustrate the effects of leverage on total returns from an investment in the
Fund assuming investment portfolio returns before leverage of (10)%, (5)%, 0%, 5% and 10%. The table further reflects the use of leverage
representing 20% of the Fund's Managed Assets and the Fund's currently projected annual leverage expense of 6.57%.
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| Share Price |
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$ 11.28
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$ 11.72
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[7],[8] |
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$ 12.86
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$ 16.45
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$ 11.72
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[7],[8] |
12.86
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16.45
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14.33
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13.44
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| NAV Per Share |
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$ 11.44
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$ 11.73
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[7],[9] |
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$ 12.11
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[7] |
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$ 15.18
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$ 11.73
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[7],[9] |
$ 12.11
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[7] |
$ 15.18
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$ 14.14
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$ 13.51
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$ 15.24
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| Latest Premium (Discount) to NAV [Percent] |
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(1.42%)
|
(0.76%)
|
[10] |
7.76%
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7.93%
|
3.53%
|
6.91%
|
[10] |
12.90%
|
(4.11%)
|
5.15%
|
4.40%
|
[10] |
(1.91%)
|
(2.32%)
|
1.36%
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(0.09%)
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| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
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| Outstanding Security, Held [Shares] |
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38,113,338
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| Portfolio Market Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Portfolio
Market Risk.
As with any investment company that invests in equity securities, the Fund is subject to market risk—the possibility that the prices
of equity securities will
decline over short or extended
periods of time. As a result, the value of an investment in the Fund's shares will fluctuate with the market. You could lose some or all
of your investment over short or long periods of time.
Political and economic news
can influence market-wide trends and can cause disruptions in the U.S. or world financial markets. Other factors may be ignored by the
market as a whole but may cause movements in the price of one company's stock or the stock of companies in one or more industries. All
of these factors may have a greater impact on initial public offerings and emerging company shares.
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| Security Market Risk Discount To Net Asset Value [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Security Market Risk—Discount
to NAV. Shares of closed-end investment companies frequently
trade at a discount from their NAV. This characteristic is a risk separate and distinct from the risk that the Fund's NAV per share could
decrease as a result of its investment activities and may be greater for investors expecting to sell their shares in a relatively short
period of time following completion of this offering. Although the value of the Fund's net assets is generally considered by market participants
in determining whether to purchase or sell shares, whether investors will realize gains or losses upon the sale of the shares will depend
entirely upon whether the market price of the shares at the time of sale is above or below the investor's purchase price for the shares.
Because the market price of the shares will be determined by supply of and demand for the shares which will be affected by factors such
as (i) NAV, (ii) dividend and distribution levels and their stability (which will in turn be affected by levels of dividend and interest
payments by the Fund's portfolio holdings, the timing and success of the Fund's investment strategies, regulations affecting the timing
and character of Fund distributions, Fund expenses and other factors), (iii) trading volume of the shares, (iv) general market, interest
rate and economic conditions and (v) other factors that may be beyond the control of the Fund. The Fund cannot predict whether the shares
will trade at, below or above NAV or at, below or above the initial public offering price.
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| Equity Securities Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Equity Securities
Risk. The Fund expects to invest 60-90% of its Managed Assets
in equity securities. Equity risk is the risk that equity securities held by the Fund will fall due to general market or economic conditions,
perceptions regarding the industries in which the issuers of securities held by the Fund participate, changes in interest rates, and the
particular circumstances and performance of particular companies whose securities the Fund holds. The price of an equity security of an
issuer may be particularly sensitive to general movements in the stock market, or a drop in the stock market may depress the price of
most or all of the equity securities held by the Fund. In addition, equity securities held by the Fund may decline in price if the issuer
fails to make anticipated distributions or dividend payments because, among other reasons, the issuer experiences a decline in its financial
condition. The Fund's expected investments in preferred stocks carries its own unique risks. Preferred stocks are typically subordinated
to bonds and other debt instruments in a company's capital structure, in terms of priority to corporate income, and therefore will be
subject to greater credit risk than those debt instruments. In addition, unlike interest payments on debt securities,
preferred stock dividends
are payable only if declared by the issuer's board of directors. The prices of preferred stock also tend to move upwards slower than common
stock prices and the preferred stock may be substantially less liquid than common stock or other securities.
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| Convertible Securities Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Convertible Securities
Risk. Convertible Securities generally offer lower interest
or dividend yields than nonconvertible debt securities of similar quality. The market value of convertible securities tends to decline
as interest rates increase and, conversely, tends to increase as interest rates decline. In addition, because of the conversion feature,
the market value of convertible securities tends to vary with fluctuations in the market value of the underlying common stock. When the
market price of the underlying common stock approaches or is greater than the convertible security's conversion price, the prices of the
convertible securities tend to rise as a reflection of the value of the underlying common stock. The conversion prior is defined as the
predetermined price at which the convertible security could be exchanged for the associated stock. Consequently, a unique feature of convertible
securities is that as the market price of the underlying common stock declines, convertible securities tend to trade increasingly on a
yield basis, and so may not experience market value declines to the same extent as the underlying common stock. Investments in convertible
securities generally entail less risk than investments in common stock of the same issuer but more risk than the issuer's debt obligations.
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| Selection Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Selection Risk.
Different types of equity securities tend to shift into and out of favor with investors, depending on market and economic conditions.
The performance of funds that invest in healthcare industry equity securities may at times be better or worse than the performance of
funds that focus on other types of securities or that have a broader investment style.
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| Concentration In Healthcare Industries [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Concentration in the
Healthcare Industries. Under normal market conditions, the Fund
expects to invest at least 80% of its Managed Assets in securities of healthcare companies. As a result, the Fund's portfolio will likely
be more sensitive to, and possibly more adversely affected by, regulatory, economic or political factors or trends relating to the healthcare,
agricultural and environmental technology industries than a portfolio of companies representing a larger number of industries. The risk
is in addition to the risks normally associated with any strategy seeking capital appreciation by investing in a portfolio of equity securities.
As a result of its concentration policy, the Fund's investments may be subject to greater risk and market fluctuation than a fund that
has securities representing a broader range of investments. The healthcare industries can be volatile. The Fund may occasionally make
investments in a company with the objective of controlling or influencing the management and policies of that company, which could potentially
make the Fund more susceptible to declines in the value of the company's stock. The Investment Adviser may seek control in public companies
only occasionally and most often in companies with a small capitalization.
Healthcare companies have in the
past been characterized by limited product focus, rapidly changing technology and extensive government regulation. In particular, technological
advances can render an existing product, which may account for a disproportionate share of a company's revenue, obsolete. Obtaining governmental
approval from U.S. governmental agencies such as the Food and Drug Administration (the "FDA"), and from non-U.S. governmental agencies
for new products can be lengthy, expensive and uncertain as to outcome. Such delays in product development may result in the need to seek
additional capital, potentially diluting the interests of existing investors such as the Fund. In addition, governmental agencies may,
for a variety of reasons, restrict the release of certain innovative technologies of commercial significance. These various factors may
result in abrupt advances and declines in the securities prices of particular companies and, in some cases, may have a broad effect on
the prices of securities of companies in particular healthcare industries.
A concentration of investments
in any healthcare industry or in healthcare companies generally may increase the risk and volatility of an investment company's portfolio.
Such volatility is not limited to the biotechnology industry, and companies in other industries may be subject to similar abrupt movements
in the market prices of their securities. No assurance can be given that future declines in the market prices of securities of companies
in the industries in which the Fund may invest will not occur, or that such declines will not adversely affect the NAV or the price of
the shares.
Intense competition exists
within and among certain healthcare industries, including competition to obtain and sustain proprietary technology protection, including
patents, trademarks and other intellectual property rights, upon which healthcare companies can be highly dependent for maintenance of
profit margins and market exclusivity. The complex nature of the technologies involved can lead to patent disputes, including litigation
that may be costly and that could result in a company losing an exclusive right to a patent.
With respect to healthcare
industries, cost containment measures already implemented by national governments, state or provincial governments and the private sector
have adversely affected certain sectors of these industries. The implementation of the Affordable Care Act ("ACA") has created increased
demand for healthcare products and services, but potential changes to the ACA and future healthcare laws and regulations may impact demand
for healthcare products and services and has had or may have an adverse effect on some companies in the healthcare industries. Increased
emphasis on managed care in the United States and a shift toward value based payment models may put pressure on the price and usage of
products sold by healthcare companies in which the Fund may invest and may adversely affect the sales and revenues of healthcare companies.
Product development efforts
by healthcare companies may not result in commercial products for many reasons, including, but not limited to, failure to achieve acceptable
clinical trial results, limited effectiveness in treating the specified condition or illness, harmful side effects,
failure to obtain regulatory
approval, and high manufacturing costs. Even after a product is commercially released, governmental agencies may require additional clinical
trials or change the labeling requirements for products if additional product side effects are identified, which could have a material
adverse effect on the market price of the securities of those healthcare companies.
Certain healthcare companies
in which the Fund may invest may be exposed to potential product liability risks that are inherent in the testing, manufacturing, marketing
and sale of pharmaceuticals, medical devices or other products. A product liability claim may have a material adverse effect on the business,
financial condition or securities prices of a company in which the Fund has invested.
All of these factors as well
as others may cause the value of the Fund's shares to fluctuate significantly over relatively short periods of time.
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| Pharmaceutical Sector Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Pharmaceutical Sector
Risk. The success of companies in the pharmaceutical sector
is highly dependent on the development, procurement and marketing of drugs. The values of pharmaceutical companies are also dependent
on the development, protection and exploitation of intellectual property rights and other proprietary information, and the profitability
of pharmaceutical companies may be significantly affected by such things as the expiration of patents or the loss of, or the inability
to enforce, intellectual property rights.
The research and other costs
associated with developing or procuring new drugs and the related intellectual property rights can be significant, and the results of
such research and expenditures are unpredictable. There can be no assurance that those efforts or costs will result in the development
of a profitable drug. Pharmaceutical companies may be susceptible to product obsolescence. Pharmaceutical companies also face challenges
posed by the increased presence of counterfeit pharmaceutical products, which may negatively impact revenues and patient confidence. Many
pharmaceutical companies face intense competition from new products and less costly generic products. Moreover, the process for obtaining
regulatory approval by the FDA or other U.S. and non-U.S. governmental regulatory authorities is long and costly and there can be no assurance
that the necessary approvals will be obtained or maintained.
The pharmaceutical sector
is also subject to rapid and significant technological change and competitive forces that may make drugs obsolete or make it difficult
to raise prices and, in fact, may result in price discounting. Companies in the pharmaceutical sector may also be subject to expenses
and losses from extensive litigation based on intellectual property, product liability and similar claims. Failure of pharmaceutical companies
to comply with applicable laws and regulations can result in the imposition of civil and criminal fines, penalties and, in some instances,
exclusion of participation in government sponsored programs such as Medicare and Medicaid.
Companies in the pharmaceutical
sector may be adversely affected by government regulation and changes in reimbursement rates. The ability of many pharmaceutical companies
to commercialize and monetize current and any future products depends in part on the extent to which reimbursement for the cost of such
products and related treatments are available from third party payors, such as Medicare, Medicaid, private health insurance plans and
health maintenance organizations. Third-party payors are increasingly challenging the price and cost-effectiveness of many medical products.
Significant uncertainty exists
as to the reimbursement status of health care products, and there can be no assurance that adequate third-party coverage will be available
for pharmaceutical companies to obtain satisfactory price levels for their products.
The international operations
of many pharmaceutical companies expose them to risks associated with instability and changes in economic and political conditions, foreign
currency fluctuations, changes in foreign regulations and other risks inherent to international business. Additionally, a pharmaceutical
company's valuation can often be based largely on the potential or actual performance of a limited number of products. A pharmaceutical
company's valuation can also be greatly affected if one of its products proves unsafe, ineffective or unprofitable. Such companies also
may be characterized by thin capitalization and limited markets, financial resources or personnel, as well as dependence on wholesale
distributors. The stock prices of companies in the pharmaceutical industry have been and will likely continue to be extremely volatile.
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| Biotechnology Industry Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Biotechnology Industry
Risk. The success of biotechnology companies is highly dependent
on the development, procurement and/or marketing of drugs. The values of biotechnology companies are also dependent on the development,
protection and exploitation of intellectual property rights and other proprietary information, and the profitability of biotechnology
companies may be significantly affected by such things as the expiration of patents or the loss of, or the inability to enforce, intellectual
property rights.
The research and other costs
associated with developing or procuring new drugs, products or technologies and the related intellectual property rights can be significant,
and the results of such research and expenditures are unpredictable. There can be no assurance that those efforts or costs will result
in the development of a profitable drug, product or technology. Moreover, the process for obtaining regulatory approval by the FDA or
other U.S. and non-U.S. governmental regulatory authorities is long and costly and there can be no assurance that the necessary approvals
will be obtained or maintained.
The biotechnology sector is
also subject to rapid and significant technological change and competitive forces that may make drugs, products or technologies obsolete
or make it difficult to raise prices and, in fact, may result in price discounting. Companies in the biotechnology sector may also be
subject to expenses and losses from extensive litigation
based on intellectual property,
product liability and similar claims. Failure of biotechnology companies to comply with applicable laws and regulations can result in
the imposition of civil and/or criminal fines, penalties and, in some instances, exclusion of participation in government sponsored programs
such as Medicare and Medicaid.
Companies in the biotechnology
sector may be adversely affected by government regulation and changes in reimbursement rates. Healthcare providers, principally hospitals,
that transact with companies in the biotechnology industry, often rely on third party payors, such as Medicare, Medicaid, private health
insurance plans and health maintenance organizations to reimburse all or a portion of the cost of healthcare related products or services.
Biotechnology companies will
continue to be affected by the efforts of governments and third party payors to contain or reduce health care costs. For example, certain
foreign markets control pricing or profitability of biotechnology products and technologies. In the United States, there has been, and
there will likely continue to be, a number of federal and state proposals to implement similar controls.
A biotechnology company's
valuation could be based on the potential or actual performance of a limited number of products and could be adversely affected if one
of its products proves unsafe, ineffective or unprofitable. Such companies may also be characterized by thin capitalization and limited
markets, financial resources or personnel. The stock prices of companies involved in the biotechnology sector have been and will likely
continue to be extremely volatile.
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| Managed Care Sector Risk [Member] |
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| General Description of Registrant [Abstract] |
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Managed Care Sector
Risk. Companies in the managed care sector often assume the
risk of both medical and administrative costs for their customers in return for monthly premiums. The profitability of these products
depends in large part on the ability of such companies to predict, price for, and effectively manage medical costs. Managed care companies
base the premiums they charge and their Medicare bids on estimates of future medical costs over the fixed contract period; however, many
factors may cause actual costs to exceed what was estimated and reflected in premiums or bids. These factors may include medical cost
inflation, increased use of services, increased cost of individual services, natural catastrophes or other large-scale medical emergencies,
epidemics, the introduction of new or costly treatments and technology, new mandated benefits (such as the expansion of essential benefits
coverage) or other regulatory changes and insured population characteristics. Relatively small differences between predicted and actual
medical costs or utilization rates as a percentage of revenues can result in significant changes in financial results.
Managed care companies are
regulated at the federal, state, local and international levels. Insurance and Health Maintenance Organization ("HMO") subsidiaries must
be licensed by and are subject to the regulations of the jurisdictions in which they conduct business. U.S. health plans and insurance
companies are also regulated under state insurance holding
company regulations, and some
of their activities may be subject to other health care-related regulations. The health care industry is also regularly subject to negative
publicity, including as a result of governmental investigations, adverse media coverage and political debate surrounding industry regulation.
Negative publicity may adversely affect stock price, damage the reputation of managed care companies in various markets or foster an increasingly
active regulatory environment, which, in turn, could further increase the regulatory burdens under which such companies operate and their
costs of doing business.
The evolution of the ACA and
other regulatory reforms could materially and adversely affect the manner in which U.S. managed care companies conduct business and their
results of operations, financial position and cash flows. The ACA includes guaranteed coverage and expanded benefit requirements, eliminates
pre-existing condition exclusions and annual and lifetime maximum limits, restricts the extent to which policies can be rescinded, establishes
minimum medical loss ratios, creates a federal premium review process, imposes new requirements on the format and content of communications
(such as explanations of benefits) between health insurers and their members, grants to members new and additional appeal rights, and
imposes new and significant taxes on health insurers and health care benefits.
New laws or regulations could
drive substantial change to the way healthcare products and services are currently delivered and paid for in the United States. Health
plans and insurance companies could face meaningful disruption or disintermediation if the U.S. migrates to a single payer healthcare
system where the government acts as the sole payer of healthcare services for the entire population. A transformative overhaul of the
U.S. healthcare system could impact the financial viability of managed care companies in which the Fund may invest.
Managed care companies contract
with physicians, hospitals, pharmaceutical benefit service providers, pharmaceutical manufacturers, and other health care providers for
services. Such companies' results of operations and prospects are substantially dependent on their continued ability to contract for these
services at competitive prices. Failure to develop and maintain satisfactory relationships with health care providers, whether in-network
or out-of-network, could materially and adversely affect business, results of operations, financial position and cash flows.
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| Life Science And Tools Industry Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Life Science and Tools
Industry Risk. Life sciences industries are characterized by
limited product focus, rapidly changing technology and extensive government regulation. In particular, technological advances can render
an existing product, which may account for a disproportionate share of a company's revenue, obsolete. Obtaining governmental approval
from agencies such as the FDA, U.S. Department of Agriculture and other U.S. and non-U.S. governmental agencies for new products can be
lengthy, expensive and uncertain as to outcome. Such delays in product development may result in the need to seek additional capital,
potentially diluting the interests of existing investors such as the Fund. In addition,
governmental agencies may,
for a variety of reasons, restrict the release of certain innovative technologies of commercial significance, such as genetically altered
material. These various factors may result in abrupt advances and declines in the securities prices of particular companies and, in some
cases, may have a broad effect on the prices of securities of companies in particular life sciences industries.
Intense competition exists
within and among certain life sciences industries, including competition to obtain and sustain proprietary technology protection. Life
sciences companies can be highly dependent on the strength of patents, trademarks and other intellectual property rights for maintenance
of profit margins and market share. The complex nature of the technologies involved can lead to patent disputes, including litigation
that could result in a company losing an exclusive right to a patent. Competitors of life sciences companies may have substantially greater
financial resources, more extensive development, manufacturing, marketing and service capabilities, and a larger number of qualified managerial
and technical personnel. Such competitors may succeed in developing technologies and products that are more effective or less costly than
any that may be developed by life sciences companies in which the Fund invests and may also prove to be more successful in production
and marketing. Competition may increase further as a result of potential advances in health services and medical technology and greater
availability of capital for investment in these fields.
With respect to healthcare,
cost containment measures already implemented by national governments, state or provincial governments, international organizations and
the private sector have adversely affected certain sectors of these industries. Increased emphasis on managed care in the United States
may put pressure on the price and usage of products sold by life sciences companies in which the Fund may invest and may adversely affect
the sales and revenues of life sciences companies.
Product development efforts
by life sciences companies may not result in commercial products for many reasons, including, but not limited to, failure to achieve acceptable
clinical trial results, limited effectiveness in treating the specified condition or illness, harmful side effects, failure to obtain
regulatory approval, and high manufacturing costs. Even after a product is commercially released, governmental agencies may require additional
clinical trials or change the labeling requirements for products if additional product side effects are identified, which could have a
material adverse effect on the market price of the securities of those life sciences companies.
Certain life sciences companies
in which the Fund may invest may be exposed to potential product liability risks that are inherent in the testing, manufacturing, marketing
and sale of pharmaceuticals, medical devices or other products. There can be no assurance that a product liability claim would not have
a material adverse effect on the business, financial condition or securities prices of a company in which the Fund has invested.
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| Healthcare Technology Sector Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Healthcare Technology
Sector Risk. Companies in the healthcare technology sector may
incur substantial costs related to product-related liabilities. Many of the software solutions, health care devices or services developed
by such companies are intended for use in collecting, storing and displaying clinical and health care-related information used in the
diagnosis and treatment of patients and in related health care settings such as admissions, billing, etc. The limitations of liability
set forth in the companies' contracts may not be enforceable or may not otherwise protect these companies from liability for damages.
Healthcare technology companies may also be subject to claims that are not covered by contract, such as a claim directly by a patient.
Although such companies may maintain liability insurance coverage, there can be no assurance that such coverage will cover any particular
claim that has been brought or that may be brought in the future, that such coverage will prove to be adequate or that such coverage will
continue to remain available on acceptable terms, if at all.
Healthcare technology companies
may experience interruption at their data centers or client support facilities. The business of such companies often relies on the secure
electronic transmission, data center storage and hosting of sensitive information, including protected health information, financial information
and other sensitive information relating to clients, company and workforce. In addition, such companies may perform data center and/or
hosting services for certain clients, including the storage of critical patient and administrative data and support services through various
client support facilities. If any of these systems are interrupted, damaged or breached by an unforeseen event or actions of a third party,
including a cyber-attack, or fail for any extended period of time, it could have a material adverse impact on the results of operations
for such companies.
The proprietary technology
developed by healthcare technology companies may be subject to claims for infringement or misappropriation of intellectual property rights
of others, or may be infringed or misappropriated by others. Despite protective measures and intellectual property rights, such companies
may not be able to adequately protect against theft, copying, reverse-engineering, misappropriation, infringement or unauthorized use
or disclosure of their intellectual property, which could have an adverse effect on their competitive position. In addition, these companies
are routinely involved in intellectual property infringement or misappropriation claims and it is expected that this activity will continue
or even increase as the number of competitors, patents and patent enforcement organizations in the healthcare technology market increases,
the functionality of software solutions and services expands, the use of open-source software increases and new markets such as health
care device innovation, health care transactions, revenue cycle, population health management and life sciences are entered into. These
claims, even if not meritorious, are expensive to defend and are often incapable of prompt resolution.
The success of healthcare
technology companies depends upon the recruitment and retention of key personnel. To remain competitive, such companies must attract,
motivate and retain
highly skilled managerial,
sales, marketing, consulting and technical personnel, including executives, consultants, programmers and systems architects skilled in
healthcare technology, health care devices, health care transactions, population health management, revenue cycle and life sciences industries
and the technical environments in which solutions, devices and services are needed. Competition for such personnel in the healthcare technology
sector is intense in both the United States and abroad. The failure to attract additional qualified personnel could have a material adverse
effect on healthcare technology companies' prospects for long-term growth.
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| Healthcare Services Sector Risk [Member] |
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| General Description of Registrant [Abstract] |
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Healthcare Services
Sector Risk. The operations of healthcare services companies
are subject to extensive federal, state and local government regulations, including Medicare and Medicaid payment rules and regulations,
federal and state anti-kickback laws, the physician self-referral law ("Stark Law") and analogous state self-referral prohibition statutes,
Federal Acquisition Regulations, the False Claims Act and federal and state laws regarding the collection, use and disclosure of patient
health information and the storage, handling and administration of pharmaceuticals. The Medicare and Medicaid reimbursement rules related
to claims submission, enrollment and licensing requirements, cost reporting, and payment processes impose complex and extensive requirements
upon dialysis providers as well. A violation or departure from any of these legal requirements may result in government audits, lower
reimbursements, significant fines and penalties, the potential loss of certification, recoupment efforts or voluntary repayments. If healthcare
services companies fail to adhere to all of the complex government regulations that apply to their businesses, such companies could suffer
severe consequences that would substantially reduce revenues, earnings, cash flows and stock prices.
A substantial percentage of
a healthcare services company's service revenues may be generated from patients who have state Medicaid or other non-Medicare government-based
programs, such as coverage through the Department of Veterans Affairs ("VA"), as their primary coverage. As state governments and other
governmental organizations face increasing budgetary pressure, healthcare services companies may in turn face reductions in payment rates,
delays in the receipt of payments, limitations on enrollee eligibility or other changes to the applicable programs.
Adverse economic conditions
could adversely affect the business and profitability of healthcare services companies. Among other things, the potential decline in federal,
non-U.S. government and state revenues that may result from such conditions may create additional pressures to contain or reduce reimbursements
for services from Medicare, Medicaid and other government sponsored programs. Increasing job losses or slow improvement in the unemployment
rate in the United States and elsewhere as a result of adverse or recent economic conditions may result in a smaller percentage of patients
being covered by an employer group health plan and a larger percentage being covered by lower paying Medicare and Medicaid programs. Employers
may also select more restrictive commercial plans with
lower reimbursement rates.
To the extent that payors are negatively impacted by a decline in the economy, healthcare services companies may experience further pressure
on commercial rates, a further slowdown in collections and a reduction in the amounts they expect to collect. In addition, uncertainty
in the financial markets could adversely affect the variable interest rates payable under credit facilities or could make it more difficult
to obtain or renew such facilities or to obtain other forms of financing in the future, if at all. Any or all of these factors, as well
as other consequences of the adverse economic conditions which cannot currently be anticipated, could have a material adverse effect on
a healthcare services company's revenues, earnings and cash flows and otherwise adversely affect its financial condition.
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| Healthcare Supplies Sector Risk [Member] |
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| General Description of Registrant [Abstract] |
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Healthcare Supplies
Sector Risk. If healthcare supplies companies are unable to
successfully expand their product lines through internal research and development and acquisitions, their business may be materially and
adversely affected. In addition, if these companies are unable to successfully grow their businesses through marketing partnerships and
acquisitions, their business may be materially and adversely affected.
Consolidation of healthcare
providers has increased demand for price concessions and caused the exclusion of suppliers from significant market segments. It is expected
that market demand, government regulation, third-party reimbursement policies, government contracting requirements and societal pressures
will continue to change the worldwide healthcare industry, resulting in further business consolidations and alliances among customers
and competitors. This may exert further downward pressure on the prices of healthcare supplies companies' products and adversely impact
their businesses, financial conditions or results of operations.
Quality is extremely important
to healthcare supplies companies and their customers due to the serious and costly consequences of product failure. Quality certifications
are critical to the marketing success of their products and services. If a healthcare supplies company fails to meet these standards or
fails to adapt to evolving standards, its reputation could be damaged, it could lose customers, and its revenue and results of operations
could decline.
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| Healthcare Facilities Sector Risk [Member] |
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| General Description of Registrant [Abstract] |
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Healthcare Facilities
Sector Risk. A healthcare facility's ability to negotiate favorable
contracts with HMOs, insurers offering preferred provider arrangements and other managed care plans significantly affects the revenues
and operating results of such healthcare facilities. In addition, private payers are increasingly attempting to control health care costs
through direct contracting with hospitals to provide services on a discounted basis, increased utilization reviews and greater enrollment
in managed care programs, such as HMOs and Preferred Provider Organizations ("PPOs"). The trend toward consolidation among private managed
care payers tends to increase their bargaining power over prices and fee structures. Non-government payers may increasingly demand reduced
fees. If a healthcare facility is unable to enter into and maintain managed care contractual arrangements on acceptable
terms, if it experiences material
reductions in the contracted rates received from managed care payers, or if it has difficulty collecting from managed care payers, its
results of operations could be adversely affected.
Further changes in the Medicare
and Medicaid programs or other government health care programs could have an adverse effect on a healthcare facility's business. In addition
to the changes affected by the ACA, the Medicare and Medicaid programs are subject to other statutory and regulatory changes, administrative
rulings, interpretations and determinations concerning patient eligibility requirements, funding levels and the method of calculating
payments or reimbursements, among other things, requirements for utilization review, and federal and state funding restrictions. All of
these could materially increase or decrease payments from government programs in the future, as well as affect the cost of providing services
to patients and the timing of payments to facilities, which could in turn adversely affect a healthcare facility's overall business, financial
condition, results of operations or cash flows.
Healthcare facilities are
adversely affected by uninsured and underinsured patients, as well as a growing mix of Medicare and Medicaid patients that typically have
lower reimbursement rates than commercial managed care patients As a result, healthcare facilities continue to experience a shift in payer
mix and a high level of uncollectible accounts, which could worsen if there is an increase in unemployment. Healthcare facilities may
continue to experience significant levels of bad debt expense and may have to provide uninsured discounts and charity care for undocumented
immigrants who are not permitted to enroll in a health insurance exchange or government health care program. The trend of higher co-pays
and deductibles and a focus on migrating healthcare utilization to lower cost sites of care, may also pressure volumes and revenue at
certain healthcare facilities which could adversely impact the financial condition of hospitals and facilities with high fixed cost structures.
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| Healthcare Equipment Sector Risk [Member] |
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| General Description of Registrant [Abstract] |
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Healthcare Equipment
Sector Risk. The medical device markets are highly competitive
and a healthcare equipment company many be unable to compete effectively. These markets are characterized by rapid change resulting from
technological advances and scientific discoveries.
Development by other companies
of new or improved products, processes, or technologies may make a healthcare equipment company's products or proposed products less competitive.
In addition, these companies face competition from providers of alternative medical therapies such as pharmaceutical companies.
Medical devices and related
business activities are subject to rigorous regulation, including by the FDA, U.S. Department of Justice ("DOJ"), and numerous other federal,
state, and foreign governmental authorities. These authorities and members of Congress have been increasing their scrutiny of the healthcare
equipment industry. In addition, certain states have
passed or are considering
legislation restricting healthcare equipment companies' interactions with health care providers and requiring disclosure of certain payments
to them. It is anticipated that governmental authorities will continue to scrutinize this industry closely, and that additional regulation
may increase compliance and legal costs, exposure to litigation, and other adverse effects to operations.
Healthcare equipment companies
are substantially dependent on patent and other proprietary rights and failing to protect such rights or to be successful in litigation
related to such rights may result in the payment of significant monetary damages and/or royalty payments, may negatively impact the ability
of healthcare equipment companies to sell current or future products, or may prohibit such companies from enforcing their patent and other
proprietary rights against others.
Quality problems with the
processes, goods and services of a healthcare equipment company could harm the company's reputation for producing high-quality products
and erode its competitive advantage, sales and market share. Quality is extremely important to healthcare equipment companies and their
customers due to the serious and costly consequences of product failure. Quality certifications are critical to the marketing success
of goods and services. If a healthcare equipment company fails to meet these standards, its reputation could be damaged, it could lose
customers, and its revenue and results of operations could decline.
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| Healthcare Distributors Sector Risk [Member] |
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| General Description of Registrant [Abstract] |
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Healthcare Distributors
Sector Risk. Companies in the healthcare distribution sector
operate in markets that are highly competitive. Because of competition, many of these companies face pricing pressures from customers
and suppliers. If these companies are unable to offset margin reductions caused by pricing pressures through steps such as effective sourcing
and enhanced cost control measures, the financial condition of such companies could be adversely affected. In addition, the healthcare
industry has continued to consolidate. Further consolidation among customers and suppliers (including branded pharmaceutical manufacturers)
could give the resulting enterprises greater bargaining power, which may adversely impact the financial condition of companies in the
healthcare distribution sector.
Fewer generic pharmaceutical
launches or launches that are less profitable than those previously experienced may have an adverse effect on the profits of companies
in the healthcare distribution sector. Additionally, prices for existing generic pharmaceuticals generally decline over time, although
this may vary. Price deflation on existing generic pharmaceuticals may have an adverse effect on company profits. With respect to branded
pharmaceutical price appreciation, if branded manufacturers increase prices less frequently or by amounts that are smaller than have been
experienced historically, healthcare distribution companies may profit less from branded pharmaceutical agreements.
The healthcare industry is
highly regulated, and healthcare distribution companies are subject to regulation in the United States at both the federal and state level
and in foreign countries. If healthcare distribution companies fail to comply with these regulatory requirements, the financial condition
of such companies could be adversely affected.
Due to the nature of the business
of healthcare distribution companies, such companies may from time to time become involved in disputes or legal proceedings. For example,
some of the products that these companies distribute may be alleged to cause personal injury or violate the intellectual property rights
of another party, subjecting such companies to product liability or infringement claims. Litigation is inherently unpredictable, and the
unfavorable resolution of one or more of these legal proceedings could adversely affect the cash flows and balance sheets of healthcare
distribution companies. Pharmaceutical distributors currently face lawsuits related to the abuse of opioid medications in the United States.
The allegations include that pharmaceutical distributors failed to provide effective controls around the quantities of opioid medications
distributed to certain pharmacies, failed to properly prevent the diversion of medications and failed to report suspicious orders. Pharmaceutical
distributors are in discussions with federal, state and local jurisdictions related to their role in the distribution of opioid pharmaceuticals
and it is possible that they will be required to pay multi-billion dollar settlements related to the ongoing litigation.
Healthcare distribution companies
depend on the availability of various components, compounds, raw materials and energy supplied by others for their operations. Any of
these supplier relationships could be interrupted due to events beyond the control of such companies, including pandemics, epidemics or
natural disasters, or could be terminated. A sustained supply interruption could have an adverse effect on business.
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| Risks Associated With Regulatory And Policy Changes [Member] |
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Risks Associated with
Regulatory and Policy Changes. At any time after the date hereof,
U.S. and non-U.S. governmental agencies and other regulators may implement additional regulations and legislators may pass new laws that
affect the investments held by the Fund, the strategies used by the Fund or the level of regulation or taxation applying to the Fund.
These regulations and laws impact the investment strategies, performance, costs and operations of the Fund, as well as the way investments
in, and shareholders of, the Fund are taxed. In particular, changes to U.S. healthcare policy could affect the Fund and its investments.
The affordability of healthcare in the U.S. will remain a topic of debate, and proposals, laws and regulations to reduce the costs of
healthcare products and services could adversely impact healthcare companies that the Fund invests in.
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| Foreign Securities Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Foreign Securities
Risk. Foreign investments involve special risks that are not
typically associated with U.S. dollar denominated or quoted securities of U.S. issuers. Foreign investments may be affected by changes
in currency rates, changes in foreign or U.S. laws or restrictions applicable to such investments and changes in exchange control regulations
(e.g., currency blockage). A decline in the exchange rate of the currency (i.e., weakening of
the currency against the U.S.
dollar) in which a portfolio security is quoted or denominated relative to the U.S. dollar would reduce the value of the portfolio security.
In addition, if the currency in which the Fund receives dividends, interest or other payments declines in value against the U.S. dollar
before such income is distributed as dividends to Shareholders or converted to U.S. dollars, the Fund may have to sell portfolio securities
to obtain sufficient cash to pay such dividends.
The Fund may invest in foreign
securities which take the form of sponsored and unsponsored American depositary receipts ("ADRs"), global depositary receipts ("GDRs"),
European depositary receipts ("EDRs") or other similar instruments representing securities of foreign issuers (together, "Depositary Receipts").
ADRs represent the right to receive securities of foreign issuers deposited in a domestic bank or a correspondent bank. ADRs are traded
on domestic exchanges or in the U.S. over-the-counter ("OTC") market and, generally, are in registered form. EDRs and GDRs are receipts
evidencing an arrangement with a non-U.S. bank similar to ADRs and are designed for use in the non-U.S. securities markets. EDRs and GDRs
are not necessarily quoted in the same currency as the underlying security. To the extent the Fund acquires Depositary Receipts through
banks which do not have a contractual relationship with the foreign issuer of the security underlying the Depositary Receipts to issue
and service such unsponsored Depositary Receipts, there is an increased possibility that the Fund will not become aware of and be able
to respond to corporate actions, such as stock splits or rights offerings, involving the foreign issuer in a timely manner. In addition,
the lack of information may result in inefficiencies in the valuation of such instruments. Investment in Depositary Receipts does not
eliminate all the risks inherent in investing in securities of non-U.S. issuers. The market value of Depositary Receipts is dependent
upon the market value of the underlying securities and fluctuations in the relative value of the currencies in which the Depositary Receipts
and the underlying securities are quoted. However, by investing in Depositary Receipts, such as ADRs, which are quoted in U.S. dollars,
the Fund may avoid currency risks during the settlement period for purchases and sales. The issuers of Depositary Receipts may discontinue
issuing new Depositary Receipts and withdraw existing Depositary Receipts at any time, which may result in costs and delays in the distribution
of the underlying assets to the Fund and may negatively impact the Fund's performance.
Brokerage commissions, custodial
services and other costs relating to investment in international securities markets generally are more expensive than in the United States.
In addition, clearance and settlement procedures may be different in foreign countries and, in certain markets, such procedures have been
unable to keep pace with the volume of securities transactions, thus making it difficult to conduct such transactions.
Foreign issuers are not generally
subject to uniform accounting, auditing and financial reporting standards comparable to those applicable to U.S. issuers. There may be
less publicly available information about a foreign issuer than about a U.S. issuer. In addition, there is generally less government regulation
of foreign markets, companies and securities dealers
than in the United States,
and the legal remedies for investors may be more limited than the remedies available in the United States. Foreign securities markets
may have substantially less volume than U.S. securities markets and securities of many foreign issuers are less liquid and more volatile
than securities of comparable domestic issuers. Furthermore, with respect to certain foreign countries, there is a possibility of nationalization,
expropriation or confiscatory taxation, imposition of withholding or other taxes on dividend or interest payments (or, in some cases,
capital gains distributions), limitations on the removal of funds or other assets from such countries, and risks of political or social
instability or diplomatic developments which could adversely affect investments in those countries. At any time after the date hereof,
U.S. and non-U.S. governmental agencies and other regulators may implement additional regulations and legislators may pass new laws that
affect the investments held by the Fund, the strategies used by the Fund or the level of regulation or taxation applying to the Fund.
These regulations and laws impact the investment strategies, performance, costs and operations of the Fund, as well as the way investments
in, and shareholders of, the Fund are taxed. In particular, changes to U.S. healthcare policy could affect the Fund and its investments.
The Fund may invest in securities
of issuers located in Emerging Markets. The risks of foreign investment are heightened when the issuer is located in an emerging country.
Emerging Markets are generally located in Africa, Asia, the Middle East, Eastern Europe and Central and South America. Investments in
securities of issuers located in Emerging Markets may be subject to heightened risks, including relative illiquidity, price volatility
and potential restrictions on repatriation of investment capital and income. The Fund's purchase and sale of portfolio securities in Emerging
Markets may be constrained by limitations relating to daily changes in the prices of listed securities, periodic trading or settlement
volume and/or limitations on aggregate holdings of foreign investors. Such limitations may be computed based on the aggregate trading
volume by or holdings of the Fund, the Investment Adviser, or its affiliates and respective clients and other service providers. The Fund
may not be able to sell securities in circumstances where price, trading or settlement volume limitations have been reached.
Foreign investment in the
securities markets of certain Emerging Markets is restricted or controlled to varying degrees which may limit investment in such countries
or increase the administrative costs of such investments. For example, certain Asian countries require governmental approval prior to
investments by foreign persons or limit investment by foreign persons to only a specified percentage of an issuer's outstanding securities
or a specific class of securities which may have less advantageous terms (including price) than securities of the issuer available for
purchase by nationals. In addition, certain countries may restrict or prohibit investment opportunities in issuers or industries deemed
important to national interests. Such restrictions may affect the market price, liquidity and rights of securities that may be purchased
by the Fund. The repatriation of both investment income and capital from
certain Emerging Markets is
subject to restrictions such as the need for governmental consents. In situations where a country restricts direct investment in securities
(which may occur in certain Asian and other countries), the Fund may invest in such countries through other investment funds in such countries.
Many Emerging Markets have
experienced currency devaluations and substantial (and, in some cases, extremely high) rates of inflation. Other Emerging Markets have
experienced economic recessions. These circumstances have had a negative effect on the economies and securities markets of those Emerging
Markets.
Economies in Emerging Markets
generally are dependent heavily upon commodity prices and international trade and, accordingly, have been and may continue to be affected
adversely by the economies of their trading partners, trade barriers, exchange controls, managed adjustments in relative currency values
and other protectionist measures imposed or negotiated by the countries with which they trade.
Many Emerging Markets are
subject to a substantial degree of economic, political and social instability. Governments of some emerging countries are authoritarian
in nature or have been installed or removed as a result of military coups, while governments in other Emerging Markets have periodically
used force to suppress civil dissent. Disparities of wealth, the pace and success of democratization, and ethnic, religious and racial
disaffection, among other factors, have also led to social unrest, violence and/or labor unrest in some Emerging Markets. Unanticipated
political or social developments may result in sudden and significant investment losses. Investing in Emerging Markets involves greater
risk of loss due to expropriation, nationalization, confiscation of assets and property or the imposition of restrictions on foreign investments
and on repatriation of capital invested. As an example, in the past, some Eastern European governments have expropriated substantial amounts
of private property, and many claims of the property owners have never been fully settled. There is no assurance that similar expropriations
will not occur in other countries.
The Fund's investment in Emerging
Markets may also be subject to withholding or other taxes, which may be significant and may reduce the return to the Fund from an investment
in issuers in such countries.
Settlement procedures in Emerging
Markets are frequently less developed and reliable than those in the United States and may involve the Fund's delivery of securities before
receipt of payment for their sale. In addition, significant delays may occur in certain markets in registering the transfer of securities.
Settlement or registration problems may make it more difficult for the Fund to value its portfolio securities and could cause the Fund
to miss attractive investment opportunities, to have a portion of its assets uninvested or to incur losses due to the failure of a counterparty
to pay for securities the Fund has delivered or the Fund's inability to complete its contractual obligations because of theft or other
reasons.
The creditworthiness of the local
securities firms used by the Fund in Emerging Markets may not be as sound as the creditworthiness of firms used in more developed countries.
As a result, the Fund may be subject to a greater risk of loss if a securities firm defaults in the performance of its responsibilities.
The small size and inexperience
of the securities markets in certain Emerging Markets and the limited volume of trading in securities in those countries may make the
Fund's investments in such countries less liquid and more volatile than investments in countries with more developed securities markets
(such as the United States, Japan and most Western European countries). The Fund's investments in Emerging Markets are subject to the
risk that the liquidity of a particular investment, or investments generally, in such countries will shrink or disappear suddenly and
without warning as a result of adverse economic, market or political conditions or adverse investor perceptions, whether or not accurate.
Because of the lack of sufficient market liquidity, the Fund may incur losses because it will be required to effect sales at a disadvantageous
time and only then at a substantial drop in price. Investments in Emerging Markets may be more difficult to value precisely because of
the characteristics discussed above and lower trading volumes. In addition, the impact of the economic and public health crisis in emerging
market countries may be greater due to their generally less established healthcare systems and capabilities with respect to fiscal and
monetary policies, which may exacerbate other pre-existing political, social and economic tasks.
The Fund's use of foreign
currency management techniques in Emerging Markets may be limited. A significant portion of the Fund's currency exposure in Emerging Markets
may not be covered by these techniques.
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| Forward Contract Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Forward Contract Risk.
Forward contracts involve the purchase or sale of a specific quantity of a commodity, government security, foreign currency, or other
asset at a specified price, with delivery and settlement at a specified future date. Because it is a completed contract, a purchase forward
contract can be a cover for the sale of a futures contract. The Fund may enter into forward contracts for hedging purposes and non-hedging
purposes (i.e., to increase returns). Forward contracts may be used by the Fund for hedging purposes to protect against uncertainty in
the level of future foreign currency exchange rates, such as when the Fund anticipates purchasing or selling a foreign security. For example,
this technique would allow the Fund to "lock in" the U.S. dollar price of the security. Forward contracts may also be used to attempt
to protect the value of the Fund's existing holdings of foreign securities. There may be, however, an imperfect correlation between the
Fund's foreign securities holdings and the forward contracts entered into with respect to those holdings. Forward contracts may also be
used for non-hedging purposes to pursue the Fund's investment objective, such as when the Investment Adviser anticipates that particular
foreign currencies will appreciate or depreciate in value, even though securities denominated in
those currencies are not then
held in the Fund's portfolio. There is no requirement that the Fund hedge all or any portion of its exposure to foreign currency risks.
Forward contracts, unlike
futures contracts, are not traded on exchanges and are not standardized; rather, banks and dealers act as principals in these markets,
negotiating each transaction on an individual basis. The principals who deal in the forward markets are not required to continue to make
markets in the currencies or commodities they trade and these markets can experience periods of illiquidity, sometimes of significant
duration. There have been periods during which certain participants in these markets have refused to quote prices for certain currencies
or commodities or have quoted prices with an unusually wide spread between the price at which they were prepared to buy and that at which
they were prepared to sell. Disruptions can occur in any market traded by the Investment Adviser due to unusually high trading volume,
political intervention or other factors. Arrangements to trade forward contracts may be made with only one or a few counterparties, and
liquidity problems therefore might be greater than if such arrangements were made with numerous counterparties. The imposition of controls
by governmental authorities might also limit such forward (and futures) trading to less than that which the Investment Adviser would otherwise
recommend, to the possible detriment of the Fund. Market illiquidity or disruption could result in major losses to the Fund. In addition,
the Fund will be exposed to credit risks with regard to counterparties with whom they trade as well as risks relating to settlement default.
Such risks could result in substantial losses to the Fund.
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| Derivatives Risk [Member] |
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| General Description of Registrant [Abstract] |
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Derivatives Risk.
The Fund may invest in derivative instruments including options, futures, options on futures, forwards, swaps (including credit default,
index, basis, total return, volatility and currency swaps), options on swaps and other derivatives, although suitable derivative instruments
may not always be available to the Investment Adviser for these purposes. The Fund intends to employ a strategy of writing (selling) covered
call options on a portion of the common stocks in its portfolio, writing (selling) put options on a portion of the common stocks in its
portfolio and, to a lesser extent, writing (selling) covered call and writing (selling) put options on indices of securities and sectors
of securities generally within the healthcare industry. This option strategy is intended to generate current income from option premiums
as a means to enhance distributions payable to the Fund's shareholders and will be limited to 30% of the Fund's Managed Assets. These
option strategies are not always profitable. The sale of a covered call option exposes the Fund during the term of the option to possible
loss of opportunity to realize appreciation in the market price of the underlying security or to possible loss due to continued holding
of a security that might otherwise have been sold to protect against depreciation in the market price of the security. To the extent the
Fund writes a covered put option, the Fund has assumed the obligation during the option period to purchase the security or securities
from the put buyer at the option's exercise price if the put buyer exercises its option, regardless of whether the value of the underlying
investment falls below the exercise price. This means that a Fund that writes a
put option may be required
make payment for such investment at the exercise price. This may result in losses to the Fund and may result in the Fund holding securities
for some period of time when it is disadvantageous to do so. Therefore, the Investment Adviser may choose to decrease its use of the option
writing strategy to the extent that it may negatively impact the Fund. Other than the Fund's option strategy and use of derivatives for
hedging purposes, the Fund may invest up to 10% of its Managed Assets in derivatives. Derivative instruments can be illiquid, may disproportionately
increase losses, and may have a potentially large adverse impact on Fund performance.
Although both OTC and exchange-traded
derivatives markets may experience a lack of liquidity, OTC nonstandardized derivative transactions are generally less liquid than exchange-traded
instruments. The illiquidity of the derivatives markets may be due to various factors, including congestion, disorderly markets, limitations
on deliverable supplies, the participation of speculators or their withdrawal from the markets, government regulation and intervention,
and technical and operational or system failures. In addition, daily limits on price fluctuations and speculative position limits on exchanges
on which the Fund may conduct its transactions in derivative instruments may prevent the Fund from liquidating these positions at an advantageous
time or price, subjecting the Fund to the potential of greater losses. Losses from investments in derivative instruments can result from
a lack of correlation between changes in the value of derivative instruments and the portfolio assets (if any) being hedged, the potential
illiquidity of the markets for derivative instruments, the failure of the counterparty to perform its contractual obligations, or the
risks arising from margin requirements and related leverage factors associated with such transactions. Losses may also arise if the Fund
receives cash collateral under the transactions and some or all of that collateral is invested in the market. To the extent that cash
collateral is so invested, such collateral will be subject to market depreciation or appreciation, and the Fund may be responsible for
any loss that might result from its investment of the counterparty's cash collateral. The use of these derivatives trading techniques
also involves the risk of loss if the Investment Adviser is incorrect in its expectation of the timing or level of fluctuations in securities
prices, interest rates or currency prices. Investments in derivative instruments may be harder to value, subject to greater volatility
and more likely subject to changes in tax treatment than other investments. For these reasons, the Investment Adviser's attempts to hedge
portfolio risks through the use of derivative instruments may not be successful. Trading in derivative instruments can increase the Fund's
exposure to leverage. Thus, the leverage offered by trading in derivative instruments will magnify the gains and losses experienced by
the Fund and could cause the Fund's net asset value to be subject to wider fluctuations than would be the case if the Fund did not use
the leverage feature in derivative instruments.
Derivatives markets have been
subject to increased regulation over the past several years, which may continue, and consequently, may make derivatives trading more costly,
may limit the availability of and reduce the liquidity of derivatives or may otherwise adversely affect the
value or performance of derivatives.
Such potential adverse future developments could increase the risks reduce the effectiveness of the Fund's derivative transactions, and
cause the Fund to lose value. For instance, the SEC has adopted new regulations related to a registered investment company's use of derivatives
and related instruments. These regulations impose limits on the amount of derivatives a fund can enter into, eliminate the asset segregation
framework formerly used by funds to comply with Section 18 of the 1940 Act. These regulations may significantly impact the Fund's ability
to invest in derivatives and other instruments, limit the Fund's ability to employ certain strategies that use derivatives and/or adversely
affect the Fund's performance, efficiency in implementing its strategy, liquidity and/or ability to pursue its investment objectives.
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| Risks Associated With Funds Option Strategy [Member] |
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| General Description of Registrant [Abstract] |
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Risks Associated with
the Fund's Option Strategy. The ability of the Fund to achieve
its investment objective is partially dependent on the successful implementation of its option strategy. There are several risks associated
with transactions in options on securities used in connection with the Fund's option strategy. For example, there are significant differences
between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction
not to achieve its objectives. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and
even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events.
As the writer of a call option
covered with a security held by the Fund, the Fund forgoes, during the option's life, the opportunities to profit from increases in the
market value of the security covering the call option above the sum of the premium and the strike price of the call but retains the risk
of loss should the price of the underlying security decline. As the Fund writes such covered calls over more of its portfolio, its ability
to benefit from capital appreciation becomes more limited. To the extent the Fund writes call options that are not fully covered by securities
in its portfolio (such as calls on an index or sector), it will lose money if the portion of the security or securities underlying the
option that is not covered by securities in the Fund's portfolio appreciate in value above the exercise price of the option by an amount
that exceeds the premium received on the option plus the exercise price of the option. The amount of this loss theoretically could be
unlimited. The writer of an option has no control over the time when it may be required to fulfill its obligations as a writer of the
option.
When the Fund writes put options,
it bears the risk of loss if the value of the underlying stock declines below the exercise price minus the put premium. If the option
is exercised, the Fund could incur a loss if it is required to purchase the stock underlying the put option at a price greater than the
market price of the stock at the time of exercise plus the put premium the Fund received when it wrote the option. While the Fund's potential
gain as the writer of a
covered put option is limited
to the premium received from the purchaser of the put option, the Fund risks a loss equal to the entire exercise price of the option minus
the put premium.
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| Interest Rates Risk [Member] |
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| General Description of Registrant [Abstract] |
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Interest Rate Risk.
Prices of fixed-income securities generally rise and fall in response to interest rate changes. Generally, the prices of fixed-rate instruments
held by the Fund will tend to fall as interest rates rise. Conversely, when interest rates decline, the value of fixed-rate instruments
held by the Fund can be expected to rise. Changing interest rates may have unpredictable effects on the markets, may result in heightened
market volatility and may detract from Fund performance. In addition, changes in monetary policy may exacerbate the risks associated with
changing interest rates. The longer the duration, or price sensitivity to changes in interest rates, of the security, the more sensitive
the security is to this risk. In typical market interest rate environments, the prices of longer-term fixed-rate instruments tend to fluctuate
more in price in response to changes in market interest rates than prices of shorter-term fixed-rate instruments. A 1% increase in interest
rates would reduce the value of a $100 note by approximately one dollar if it had a one-year duration. It is difficult to predict the
magnitude, timing or direction of interest rate changes and the impact these changes will have on the Fund's investments and the markets
where it trades.
The risks attendant to changing
interest rate environments have been, and continue to be, magnified in the current economic environment. To combat rising inflation, the
Board of Governors of the Federal Reserve System increased the federal funds rate several times in 2022 and 2023.
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| REIT Risk [Member] |
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| General Description of Registrant [Abstract] |
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REIT Risk.
REITs whose underlying properties are concentrated in a particular industry, such as the healthcare industry, or geographic region are
subject to risks affecting such industries or regions. The securities of REITs involve greater risks than those associated with larger,
more established companies and may be subject to more abrupt or erratic price movements because of interest rate changes, economic conditions
and other factors. Securities of such issuers may lack sufficient market liquidity to enable the Fund to effect sales at an advantageous
time or without a substantial drop in price.
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| Credit Default Risk [Member] |
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Credit/Default Risk.
Loans and other debt obligation investments are subject to the risk of non-payment of scheduled principal and interest. Changes in economic
conditions or other circumstances may reduce the capacity of the party obligated to make principal and interest payments on such instruments
and may lead to defaults. Such non-payments and defaults may reduce the value of the shares and income distributions. The value of loans
and other income investments also may decline because of concerns about the issuer's ability to make principal and interest payments.
In addition, the credit ratings of loans or other income investments may be lowered if the financial condition of the party obligated
to make payments with respect to such instruments changes. Because the Fund will invest in non-investment grade securities, it will be
exposed to a greater amount of credit risk than a fund which invests solely in investment grade securities. The prices of lower grade
instruments are generally
more sensitive to negative developments, such as a decline in the issuer's revenues or a general economic downturn, than are the prices
of higher grade instruments. Credit ratings assigned by rating agencies are based on a number of factors and do not necessarily reflect
the issuer's current financial condition or the volatility or liquidity of the security. In the event of bankruptcy of the issuer of loans
or other income investments, the Fund could experience delays or limitations with respect to its ability to realize the benefits of any
collateral securing the instrument. In order to enforce its rights in the event of a default, bankruptcy or similar situation, the Fund
may be required to retain legal or similar counsel and incur additional costs.
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| Non Investment Grade Securities Risk [Member] |
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Non-Investment Grade
Securities Risk. The Fund may invest in securities that are
rated, at the time of investment, non-investment grade quality (rated "Ba/BB+/BB+" or below by Moody's, S&P or Fitch, respectively),
or securities that are unrated but determined to be of comparable quality by the Investment Adviser. The Fund may invest up to 15% of
its Managed Assets in non-convertible debt securities that are, at the time of investment, rated Caa1 or lower by Moody's and CCC+ or
lower by S&P or Fitch, or comparably rated by another nationally recognized statistical rating organization, or, if unrated, determined
by the Investment Adviser to be of comparable credit quality. Such securities are subject to a very high credit risk. Securities of non-investment
grade quality are regarded as having predominantly speculative characteristics with respect to the issuer's capacity to pay interest and
repay principal, and are commonly referred to as "junk bonds." Non-investment grade securities and unrated securities of comparable credit
quality are subject to the increased risk of an issuer's inability to meet principal and interest payment obligations. The value of high
yield, lower quality bonds is affected by the creditworthiness of the issuers of the securities and by general economic and specific industry
conditions. These securities may be subject to greater price volatility due to such factors as specific corporate or municipal developments,
interest rate sensitivity, negative perceptions of the junk bond markets generally and less secondary market liquidity. Issuers of high
yield bonds are not as strong financially as those with higher credit ratings. These issuers are more vulnerable to financial setbacks
and recession than more creditworthy issuers, which may impair their ability to make interest and principal payments. Non-investment grade
securities may be particularly susceptible to economic downturns, specific corporate or municipal developments, interest rate sensitivity,
negative perceptions of the junk bond markets generally and less secondary market liquidity. An economic recession could disrupt severely
the market for such securities and may have an adverse impact on the value of such securities. In addition, any such economic downturn
could adversely affect the ability of the issuers of such securities to repay principal and pay interest thereon and increase the incidence
of default for such securities. Non-investment grade securities, though higher yielding, are characterized by high risk. They may be subject
to certain risks with respect to the issuing entity and to greater market fluctuations than certain lower yielding, higher rated securities.
The retail secondary market for non-investment grade securities may be less liquid than that for higher rated securities. Adverse conditions
could make it difficult at
times for the Fund to sell certain securities or could result in lower prices than those used in calculating the Fund's NAV. Because of
the substantial risks associated with investments in non-investment grade securities, you could lose money on your investment in shares
of the Fund, both in the short-term and the long-term.
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| Counterparty Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Counterparty Risk.
Many of the protections afforded to participants on some organized exchanges, such as the performance guarantee of a clearing house, might
not be available in connection with uncleared OTC transactions. Therefore, in those instances in which the Fund enters into uncleared
OTC transactions, the Fund will be subject to the risk that its direct counterparty will not perform its obligations under the transactions
and that the Fund will sustain losses. If a counterparty becomes bankrupt, the Fund may experience significant delays in obtaining recovery
(if at all) under the derivative contract in bankruptcy or other reorganization proceeding; if the Fund's claim is unsecured, the Fund
will be treated as a general creditor of such prime broker or counterparty and will not have any claim with respect to the underlying
security. The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances. The counterparty risk for cleared
derivatives is generally lower than for uncleared OTC derivatives since generally a clearing organization becomes substituted for each
counterparty to a cleared derivative and, in effect, guarantees the parties' performance under the contract as each party to a trade looks
only to the clearing house for performance of financial obligations. However, there can be no assurance that the clearing house, or its
members, will satisfy its obligations to the Fund.
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| Regulation As Commodity Pool [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Regulation as a "Commodity
Pool". The Investment Adviser has claimed an exclusion from
the definition of the term "commodity pool operator" with respect to the Fund pursuant to Regulation 4.5 promulgated by the U.S. Commodity
Futures Trading Commission (the "CFTC"). For the Investment Adviser to continue to qualify for the exclusion under CFTC Regulation 4.5
with respect to the Fund, the aggregate initial margin and premiums required to establish our positions in derivative instruments subject
to the jurisdiction of the Commodity Exchange Act of 1936, as amended ("CEA") (other than positions entered into for hedging purposes)
may not exceed five percent of the Fund's liquidation value or, alternatively, the net notional value of the Fund's aggregate investments
in CEA-regulated derivative instruments (other than positions entered into for hedging purposes) may not exceed 100% of the Fund's liquidation
value. In the event the Investment Adviser fails to qualify for the exclusion with respect to the Fund and is required to register as
a "commodity pool operator," it will become subject to additional disclosure, recordkeeping and reporting requirements with respect to
the Fund, which may increase the Fund's expenses.
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| Failure Of Futures Commission Merchants And Clearing Organizations [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Failure of Futures
Commission Merchants and Clearing Organizations. The Fund may
deposit funds required to margin open positions in derivative instruments subject to the CEA with a clearing broker registered as a "futures
commission merchant" ("FCM"). The CEA requires an FCM to segregate all funds received from customers with respect to any orders for the
purchase or sale of U.S. domestic futures contracts and cleared swaps from the FCM's
proprietary assets. Similarly,
the CEA requires each FCM to hold in a separate secure account all funds received from customers with respect to any orders for the purchase
or sale of foreign futures contracts and segregate any such funds from the funds received with respect to domestic futures contracts.
However, all funds and other property received by a clearing broker from its customers are held by the clearing broker on a commingled
basis in an omnibus account and may be freely accessed by the clearing broker, which may also invest any such funds in certain instruments
permitted under the applicable regulation. There is a risk that assets deposited by the Fund with any swaps or futures clearing broker
as margin for futures contracts or cleared swaps may, in certain circumstances, be used to satisfy losses of other clients of the Fund's
clearing broker. In addition, the assets of the Fund may not be fully protected in the event of the clearing broker's bankruptcy, as the
Fund would be limited to recovering only a pro rata share of all available funds segregated on behalf of the clearing broker's combined
domestic customer accounts.
Similarly, the CEA requires
a clearing organization approved by the CFTC as a derivatives clearing organization to segregate all funds and other property received
from a clearing member's clients in connection with domestic futures, swaps and options contracts from any funds held at the clearing
organization to support the clearing member's proprietary trading. Nevertheless, with respect to futures and options contracts, a clearing
organization may use assets of a non-defaulting customer held in an omnibus account at the clearing organization to satisfy payment obligations
of a defaulting customer of the clearing member to the clearing organization. As a result, in the event of a default or the clearing broker's
other clients or the clearing broker's failure to extend its own funds in connection with any such default, the Fund would not be able
to recover the full amount of assets deposited by the clearing broker on its behalf with the clearing organization.
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| Liquidity Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Liquidity Risk.
Illiquid securities include securities the disposition of which is subject to substantial legal or contractual restrictions. The sale
of illiquid securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses
than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted
securities may sell at a price lower than similar securities that are not subject to restrictions on resale. The continued liquidity of
such securities may not be as well assured as that of publicly traded securities. During certain periods the liquidity of particular issuers
or industries, or all securities within particular investment categories, may shrink or disappear suddenly and without warning as a result
of adverse economic, market or political events, or adverse investor perceptions, whether or not accurate.
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| Equity Linked Notes [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Equity-Linked Notes.
Equity-linked notes ("ELNs") are hybrid securities with characteristics of both fixed income and equity securities. An ELN is a debt instrument,
usually a bond, that pays interest based upon the performance of an underlying equity, which can be a single stock, basket of stocks or
an equity index. The interest payment on an ELN may in some cases be leveraged so that, in percentage terms, it exceeds the relative performance
of the market.
ELNs generally are subject to
the risks associated with the securities of equity issuers, default risk and counterparty risk. Additionally, because the Fund may use
ELNs as an alternative or complement to its options strategy, the use of ELNs in this manner would expose the Fund to the risk that such
ELNs will not perform as anticipated, and the risk that the use of ELNs will expose the Fund to different or additional default and counterparty
risk as compared to a similar investment executed in an options strategy.
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| Private Investment In Public Equity Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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PIPEs Risk.
PIPE transactions typically involve the purchase of securities directly from a publicly traded company or its affiliates in a private
placement transaction, typically at a discount to the market price of the company's common stock. In a PIPE transaction, the Fund may
bear the price risk from the time of pricing until the time of closing. Equity issued in this manner is often subject to transfer restrictions
and is therefore less liquid than equity issued through a registered public offering. In a PIPE transaction, the Fund may bear the price
risk from the time of pricing until the time of closing. The Fund may be subject to lock-up agreements that prohibit transfers for a fixed
period of time. In addition, because the offering of the securities in a PIPE transaction is not registered under the Securities Act,
the securities are "restricted" and cannot be immediately resold by the investors into the public markets. The Fund may enter into a registration
rights agreement with the issuer pursuant to which the issuer commits to file a resale registration statement allowing the Fund to publicly
resell its securities. Accordingly, PIPE securities may be deemed illiquid. However, the ability of the Fund to freely transfer the shares
is conditioned upon, among other things, the Commission's preparedness to declare the resale registration statement effective covering
the resale of the shares sold in the private financing and the issuer's right to suspend the Fund's use of the resale registration statement
if the issuer is pursuing a transaction or some other material non-public event is occurring. Accordingly, PIPE securities may be subject
to risks associated with illiquid securities.
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| Venture Capital Investments Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Venture Capital Investments
Risk. The Fund may occasionally invest in venture capital opportunities.
While these securities offer the opportunity for significant capital gains, such investments also involve a degree of risk that can result
in substantial losses. Some of the venture capital opportunities in which the Fund may invest are expected to be companies that are in
a "start-up" stage of development, have little or no operating history, operate at a loss or with substantial variations in operating
results from period to period, have limited products, markets, financial resources or management depth, or have the need for substantial
additional "follow-on" capital to support expansion or to achieve or maintain a competitive position. Such additional investments may
dilute the interests of prior investors, such as the Fund. Some of these companies may be emerging companies at the research and development
stage with no marketable or approved products or technology. There can be no assurance that securities of start-up or emerging growth
companies will, in the future, yield returns commensurate with their associated risks.
These investments, which are considered
Restricted Securities, will be made primarily in convertible preferred stock. The Fund may also purchase non-convertible debt securities
in connection with its venture capital investments, and otherwise when the Investment Adviser believes that such investments would be
consistent with the Fund's investment objective. While these debt investments typically will not be rated, the Investment Adviser believes
that, in light of the risk characteristics associated with investments in emerging growth companies, if such investments were to be compared
with investments rated by S&P or Moody's, they may be rated as low as "C" in the rating categories established by S&P and Moody's.
Such securities are commonly referred to as "junk bonds" and are considered, on balance, as predominantly speculative.
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| Exchange Traded Funds Risk [Member] |
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| General Description of Registrant [Abstract] |
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ETFs Risk.
An investment in an ETF generally presents the same primary risks as an investment in a conventional fund (i.e., one that is not exchange-traded)
that has the same investment objectives, strategies and policies. In addition, an ETF may fail to accurately track the market segment
or index that underlies its investment objective. The price of an ETF can fluctuate, and the Fund could lose money investing in an ETF.
Moreover, ETFs are subject to the following risks that do not apply to conventional open-end funds: (i) the market price of the ETF's
shares may trade at a premium or a discount to their NAV; (ii) an active trading market for an ETF's shares may not develop or be maintained;
and (iii) there is no assurance that the requirements of the exchange necessary to maintain the listing of an ETF will continue to be
met or remain unchanged.
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| Leverage Risk [Member] |
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| General Description of Registrant [Abstract] |
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Leverage Risk.
The Fund intends to use financial leverage for investment purposes. The Fund may issue preferred shares, borrow money and/or issue debt
securities ("traditional leverage"). The Fund intends to use traditional leverage through a credit facility representing up to 20% of
the Fund's Managed Assets as measured at the time when leverage is incurred. In addition, the Fund may enter into reverse repurchase agreements,
swaps, futures, forward contracts, securities lending, short sales, and other derivative transactions, that have similar effects as leverage
(collectively referred to as "effective leverage"). Furthermore, at no time will the Fund's use of leverage, either through traditional
leverage or effective leverage, exceed 30% of the Fund's Managed Assets as measured at the time when leverage is incurred. Notwithstanding
the foregoing, effective leverage incurred through the Fund's option strategy and use of derivatives for hedging purposes will not be
counted toward the Fund's limit on the use of effective leverage or in the overall 30% leverage limitation.
The Fund's leveraged capital
structure creates special risks not associated with unleveraged funds having a similar investment objective and policies. These include
the possibility of greater loss and the likelihood of higher volatility of the NAV, market price and distributions of the Fund and the
asset coverage for preferred shares, if any. Such volatility may increase the likelihood of the Fund having to sell investments in order
to meet its obligations to make distributions on the preferred shares, or to redeem preferred shares when it may be disadvantageous to
do so. Also, if the Fund is utilizing leverage, a decline in NAV could affect
the ability of the Fund to
make distributions and such a failure to pay dividends or make distributions could result in the Fund ceasing to qualify as a regulated
investment company under the Code, as amended.
Other risks and special considerations
include the risk that fluctuations in interest rates on borrowings and short-term debt or in the interest or dividend rates on any leverage
that the Fund must pay will reduce the return to the shareholders; the effects of leverage in a declining market, which are likely to
cause a greater decline in the NAV of the shares than if the Fund were not leveraged, which may result in a greater decline in the market
price of the shares. If the Fund uses leverage, the amount of fees paid to the Investment Adviser for its services will be higher than
if the Fund did not use leverage because the fees paid are calculated based on Managed Assets, which includes assets purchased with leverage.
Therefore, the Investment Adviser has a financial incentive to use leverage, which creates a conflict of interest between the Investment
Adviser and common shareholders, as only the Fund's common shareholders would bear the fees and expenses incurred through the Fund's use
of leverage, including the issuance of Preferred shares, if any. Leverage may increase operating costs, which may reduce total return.
Effects of Leverage
Assuming that leverage will
represent approximately 20% of Managed Assets and that the Fund will bear expenses relating to that leverage at an annual cost of 1.00%,
Fund performance before leverage (net of expenses) must exceed .2% in order to cover the expenses specifically related to the Fund's use
of leverage. Actual leverage expenses will vary frequently and may be significantly higher or lower than the rate estimated above.
As of September 30, 2023 and
the most recently signed line of credit agreement, the Fund projects an annual leverage expense of 6.57%. The Fund had $120,000,000 of
funds drawn on its line of credit which was 21.2% of Managed Assets as of September 30, 2023.
The following table is furnished
in response to requirements of the SEC. It is designed to illustrate the effects of leverage on total returns from an investment in the
Fund assuming investment portfolio returns before leverage of (10)%, (5)%, 0%, 5% and 10%. The table further reflects the use of leverage
representing 20% of the Fund's Managed Assets and the Fund's currently projected annual leverage expense of 6.57%.
Assumed
Fund Return Before Leverage
(Net of Expenses) |
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(10.00 |
)% |
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(5.00 |
)% |
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0.00 |
% |
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5.00 |
% |
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10.00 |
% |
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Assumed Fund Return Inclusive of Leverage
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(14.14
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(7.89
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(1.64
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4.61
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10.89
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Assumed Fund performance before
and inclusive of leverage are hypothetical and are provided to assist investors in understanding the effects of leverage. Actual performance
experienced by the Fund may be lesser or greater than that shown above.
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| Restricted Securities And Valuation Risk [Member] |
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| General Description of Registrant [Abstract] |
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Restricted Securities
and Valuation Risk. Some of the Fund's investments are subject
to restrictions on resale and generally have no established trading market or are otherwise illiquid with little or no trading activity.
The valuation process requires an analysis of various factors. The Fund's fair value methodology includes the examination of, among other
things, (i) the existence of any contractual restrictions on the disposition of the securities; (ii) information obtained from the issuer
which may include an analysis of the company's financial statements, the company's products or intended markets, or the company's technologies;
and (iii) the price of a security sold at arm's length in an issuer's subsequent completed round of financing. As there is typically no
readily available market value for some of the Restricted Securities in the Fund's portfolio, such Restricted Securities in the Fund's
portfolio are valued at fair value as determined in good faith by or under the direction of the Board pursuant to the Fund's valuation
policy and a consistently applied valuation process. Because of the inherent uncertainty of determining the fair value of investments
that do not have a readily available market value, the fair value of the Fund's investments determined in good faith by the Board may
differ significantly from the values that would have been used had a ready market existed for the investments, and the differences could
be material. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment
be applied to the specific facts and circumstances of each portfolio investment, while employing a consistently applied valuation process
for the types of investments the Fund makes.
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| Key Personnel Risk [Member] |
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| General Description of Registrant [Abstract] |
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Key Personnel Risk.
There may be only a limited number of securities professionals who have comparable experience to that of the Fund's existing portfolio
management team in the area of healthcare companies. If one or more of the team members dies, resigns, retires or is otherwise unable
to act on behalf of the Investment Adviser, there can be no assurance that a suitable replacement could be found immediately.
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| Anti Takeover Provisions Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Anti-Takeover Provisions
Risk. The Fund's Amended and Restated Declaration of Trust ("Declaration
of Trust"), dated March 5, 2015, as amended, has provisions that could have the effect of limiting the ability of other entities or persons
to (1) acquire control of the Fund, (2) cause it to engage in certain transactions, or (3) modify its structure. The By-Laws also contain
provisions regarding qualifications for nominees for Trustee positions, advance notice of Shareholder proposals, and requirements for
the call of special Shareholder meetings. These provisions may be considered "anti-takeover" provisions.
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| Related Party Transactions Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Related Party Transactions
Risk. The majority of the Board is unaffiliated with the Investment
Adviser; nevertheless, the Fund may be subject to certain potential conflicts of interest. Although the Fund has no obligation to do so,
it may place brokerage orders with brokers who provide supplemental investment research and market and statistical information about healthcare
companies and the healthcare industries. In addition, other investment companies advised by the Investment Adviser may concurrently invest
with the Fund in restricted securities under certain conditions. The Fund also may invest, subject to
applicable law, in companies
in which the principals of the Investment Adviser or Trustees of the Fund have invested, or for which they serve as directors or executive
officers. The Investment Company Act prohibits the Fund from engaging in certain transactions involving its "affiliates," including, among
others, the Fund's Trustees, officers and employees, the Investment Adviser and any "affiliates" of such affiliates except pursuant to
an exemptive order or the provisions of certain rules under the Investment Company Act. In the view of the staff of the Commission, other
investment companies advised by the Investment Adviser may, in some instances, be viewed to be affiliates of the Fund. Such legal restrictions
and delays and costs involved in obtaining necessary regulatory approvals may preclude or discourage the Fund from making certain investments
and no assurance can be given that any exemptive order sought by the Fund will be granted.
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| Government Intervention [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Government Intervention.
Instability in the financial markets has led the U.S. government and certain foreign governments to take a number of unprecedented actions
designed to support certain financial institutions and segments of the financial markets that have experienced extreme volatility, and
in some cases a lack of liquidity, including through direct purchases of equity and debt securities. Federal, state, and foreign governments,
their regulatory agencies or self-regulatory organizations may take actions that affect the regulation of the issuers in which the Fund
invests in ways that are unforeseeable. Legislation or regulation may also change the way in which the Fund is regulated. Such legislation
or regulation could limit or preclude the Fund's ability to achieve its investment objective.
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| Market Disruption And Geopolitical Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Market Disruption
and Geopolitical Risk. The value of your investment in the Fund
is based on the market prices of the securities the Fund holds. These prices change daily due to economic and other events that affect
markets generally, as well as those that affect particular regions, countries, industries, companies or governments. These price movements,
sometimes called volatility, may be greater or less depending on the types of securities the Fund owns and the markets in which the securities
trade. The increasing interconnectivity between global economies and financial markets increases the likelihood that events or conditions
in one region or financial market may adversely impact issuers in a different country, region or financial market. Securities in the Fund's
portfolio may underperform due to inflation (or expectations for inflation), interest rates, global demand for particular products or
resources, natural/environmental disasters, pandemics, epidemics, terrorism, cyber-attacks, regulatory events and governmental or quasi-governmental
actions. The occurrence of global events similar to those in recent years, such as terrorist attacks around the world, natural disasters,
social and political discord or debt crises and downgrades, among others, may result in market volatility and may have long term effects
on both the U.S. and global financial markets. A disruption of financial markets or other terrorist attacks could adversely affect Fund
service providers and/or the Fund's operations as well as interest rates, secondary trading, credit risk, inflation and other factors
relating to the shares. The Fund cannot predict the effects or likelihood of similar events in the future on the U.S. and world economies,
the value of the shares or the NAV of the Fund.
Social, political, economic
and other conditions and events, such as natural/environmental disasters, health emergencies (e.g., epidemics and pandemics such as COVID-19,
avian influenza and HINI/09), cyber-attacks, terrorism, actual or threatened wars or other armed conflicts (such as the Russia/Ukraine
and Israel/Hamas conflicts), may occur and could significantly impact issuers, industries, governments and other systems, including the
financial markets. These impacts could negatively affect the Fund's investments in securities and instruments that are economically tied
to the applicable region, and include (but are not limited to) declines in value and reductions in liquidity. In addition, to the extent
new sanctions are imposed or previously relaxed sanctions are reimposed, complying with such restrictions may prevent the Fund from pursuing
certain investments, cause delays or other impediments with respect to consummating such investments or divestments, require divestment
or freezing of investments on unfavorable terms, render divestment of underperforming investments impracticable, negatively impact the
Fund's ability to achieve its investment objective, prevent the Fund from receiving payments otherwise due it, increase diligence and
other similar costs to the Fund, render valuation of affected investments challenging, or require the Fund to consummate an investment
on terms that are less advantageous than would be the case absent such restrictions. As global systems, economies and financial markets
are increasingly interconnected, events that once had only local impact are now more likely to have regional or even global effects. Events
that occur in one country, region or financial market will, more frequently, adversely impact issuers in other countries, regions or markets.
These impacts can be exacerbated by failures of governments and societies to adequately respond to an emerging event or threat. These
types of events quickly and significantly impact markets in the U.S. and across the globe leading to extreme market volatility and disruption.
The extent and nature of the impact on supply chains or economies and markets from these events is unknown, particularly if these types
of events persist for an extended period of time. These types of events, could reduce consumer demand or economic output, result in market
closures, travel restrictions or quarantines, and generally have a significant impact on the economies and financial markets and the Investment
Adviser's investment advisory activities and services of other service providers, which in turn could adversely affect the Fund's investments
and other operations. The value of the Fund's investments may decrease as a result of such events, particularly if these events adversely
impact the operations and effectiveness of the Investment Adviser or key service providers or if these events disrupt systems and processes
necessary or beneficial to the investment advisory or other activities on behalf the Fund.
In March 2023, several financial
institutions experienced a larger-than-expected decline in deposits and two banks, Silicon Valley Bank ("SVB") and Signature Bank, were
placed into receivership. Given the interconnectedness of the banking system, the Federal Reserve invoked the systemic risk exception,
temporarily transferred all deposits-both insured and uninsured-and substantially all the assets of the two banks into respective bridge
banks and
guaranteed depositors' full
access to their funds. This type of systemic risk event and/or resulting government actions can negatively impact the Funds, for example,
through less credit being available to issuers or uncertainty regarding safety of deposits at other institutions. These risks also may
adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms, and exchanges, with which
the Fund interacts.
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| Potential Conflicts Of Interest Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Potential Conflicts
of Interest Risk. The Investment Adviser's investment team is
responsible for managing the Fund as well as three other closed-end investment companies. In the future, the investment team may manage
other funds and accounts, including proprietary accounts, separate accounts and other pooled investment vehicles, such as unregistered
hedge funds. In the future, a portfolio manager may manage a separate account or other pooled investment vehicle which may have materially
higher fee arrangements than the Fund and may also have a performance-based fee. The side-by-side management of these funds or accounts
may raise potential conflicts of interest relating to cross trading, the allocation of investment opportunities and the aggregation and
allocation of trades.
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| Special Purpose Acquisition Company Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
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Special Purpose Acquisition
Company Risk. The Fund may invest in SPACs. SPACs are collective
investment structures that pool funds in order to seek potential acquisition opportunities. Unless and until an acquisition is completed,
a SPAC generally invests its assets (less an amount to cover expenses) in U.S. Government securities, money market fund securities and
cash. SPACs and similar entities may be blank check companies with no operating history or ongoing business other than to seek a potential
acquisition. Certain SPACs may seek acquisitions only in limited industries or regions. If an acquisition that meets the requirements
for the SPAC is not completed within a predetermined period of time, the invested funds are returned to the entity's shareholders, unless
such shareholders approve alternative arrangements. Investments in SPACs may be illiquid and/or be subject to restrictions on resale.
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| Loan Facility 2023 [Member] |
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| Financial Highlights [Abstract] |
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| Senior Securities Amount |
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$ 120,000,000
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$ 120,000,000
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| Senior Securities Coverage per Unit |
[11] |
|
$ 4,726
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$ 4,726
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| Preferred Stock Liquidating Preference |
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$ 0
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0
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| Senior Securities Average Market Value per Unit |
[12] |
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| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
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| Security Title [Text Block] |
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Loan
Facility 2023
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| Loan Facility 2022 [Member] |
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| Financial Highlights [Abstract] |
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| Senior Securities Amount |
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$ 120,000,000
|
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$ 120,000,000
|
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| Senior Securities Coverage per Unit |
|
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|
$ 4,786
|
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|
$ 4,786
|
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| Preferred Stock Liquidating Preference |
|
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|
$ 0
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0
|
|
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|
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|
| Senior Securities Average Market Value per Unit |
[12] |
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| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
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| Security Title [Text Block] |
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Loan
Facility 2022
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| Loan Facility 2021 [Member] |
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| Financial Highlights [Abstract] |
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| Senior Securities Amount |
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|
$ 120,000,000
|
|
|
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|
$ 120,000,000
|
|
|
|
|
|
| Senior Securities Coverage per Unit |
|
|
|
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|
|
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|
$ 5,714
|
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|
$ 5,714
|
|
|
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| Preferred Stock Liquidating Preference |
|
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|
$ 0
|
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|
0
|
|
|
|
|
|
| Senior Securities Average Market Value per Unit |
[12] |
|
|
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| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
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| Security Title [Text Block] |
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Loan
Facility 2021
|
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| Loan Facility 2020 [Member] |
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| Financial Highlights [Abstract] |
|
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| Senior Securities Amount |
|
|
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|
|
|
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|
|
|
|
|
|
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|
|
|
|
$ 120,000,000
|
|
|
|
|
| Senior Securities Coverage per Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
$ 4,554
|
|
|
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|
| Preferred Stock Liquidating Preference |
|
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|
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|
|
|
|
|
|
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0
|
|
|
|
|
| Senior Securities Average Market Value per Unit |
[12] |
|
|
|
|
|
|
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|
|
|
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| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
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| Security Title [Text Block] |
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Loan
Facility 2020
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| Loan Facility 2019 [Member] |
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| Financial Highlights [Abstract] |
|
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| Senior Securities Amount |
|
|
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|
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|
|
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|
|
|
|
|
|
|
|
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|
|
$ 120,000,000
|
|
|
|
| Senior Securities Coverage per Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
$ 4,396
|
|
|
|
| Preferred Stock Liquidating Preference |
|
|
|
|
|
|
|
|
|
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|
|
|
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0
|
|
|
|
| Senior Securities Average Market Value per Unit |
[12] |
|
|
|
|
|
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|
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| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
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| Security Title [Text Block] |
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|
Loan
Facility 2019
|
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| Loan Facility 2018 [Member] |
|
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| Financial Highlights [Abstract] |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Senior Securities Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 120,000,000
|
|
|
| Senior Securities Coverage per Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 4,861
|
|
|
| Preferred Stock Liquidating Preference |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
| Senior Securities Average Market Value per Unit |
[12] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
|
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| Security Title [Text Block] |
|
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|
Loan
Facility 2018
|
|
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| Loan Facility 2017 [Member] |
|
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| Financial Highlights [Abstract] |
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Senior Securities Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 120,000,000
|
|
| Senior Securities Coverage per Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 4,999
|
|
| Preferred Stock Liquidating Preference |
|
|
|
|
|
|
|
|
|
|
|
|
|
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0
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| Senior Securities Average Market Value per Unit |
[12] |
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| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
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| Security Title [Text Block] |
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Loan
Facility 2017
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| Loan Facility 2016 [Member] |
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| Financial Highlights [Abstract] |
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| Senior Securities Amount |
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$ 120,000,000
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| Senior Securities Coverage per Unit |
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$ 5,160
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| Preferred Stock Liquidating Preference |
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0
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| Senior Securities Average Market Value per Unit |
[12] |
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| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
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| Security Title [Text Block] |
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Loan
Facility 2016
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| Example Does Not Include Sales Load [Member] |
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| Other Annual Expenses [Abstract] |
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| Expense Example, Year 01 |
[13] |
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$ 30
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| Expense Example, Years 1 to 3 |
[13] |
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92
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| Expense Example, Years 1 to 5 |
[13] |
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157
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| Expense Example, Years 1 to 10 |
[13] |
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330
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| Example Assumes Transaction Fee Of As Percentage Of Offering Price [Member] |
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| Other Annual Expenses [Abstract] |
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| Expense Example, Year 01 |
[14] |
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41
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| Expense Example, Years 1 to 3 |
[14] |
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103
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| Expense Example, Years 1 to 5 |
[14] |
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167
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| Expense Example, Years 1 to 10 |
[14] |
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$ 338
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