Further, certain
Indian regulatory approvals, including approvals from the Securities and
Exchange Board of India (“SEBI”), the RBI, the
central government
and the tax authorities (to the extent that tax benefits need to be utilized),
may be required before the Fund can make investments in the
securities of Indian companies. Capital gains from Indian securities may be
subject to local taxation.
Risk
of Investing in Japan. Investing in
Japanese issuers subjects a Fund to legal, regulatory, political, economic,
currency, geographic and security risks
that are specific to Japan. Japan’s economic growth rate has generally remained
low relative to other advanced economies, and it may continue to
remain low. Its economy depends heavily on international trade and government
policy supporting its export market. Economic downturns
or political instability in its key trading partners, which include the United
States and China, could have an adverse effect on the
Japanese economy. Currency fluctuations also could adversely impact Japan’s
export market and its economy. If the Japanese government were to
intervene in the currency market, as it has in the past, the yen’s value could
fluctuate sharply and unpredictably, which could cause losses
to investors.
Other risks to
Japan’s economic growth and competitiveness include significant public debt and
deficits as well as labor shortages due to an aging and
declining population. In addition, Japan lacks many natural resources and relies
heavily on imports of oil and other commodities. Price increases,
shortages or volatility in commodities markets could have a negative effect on
Japan’s economy. Other risks to the Japanese economy and
financial markets include natural disasters and Japan’s relations with
neighboring countries, which at times have been strained.
Risk
of Investing in Malaysia. Investments in
Malaysian issuers involve risks that are specific to Malaysia, including, legal,
regulatory, political,
currency and economic risks. The Malaysian economy, among other things is
dependent upon external trade with other economies, including the
U.S., China, Japan and Singapore. As a result, Malaysia is dependent on the
economies of these other countries and any change in the price or
demand for Malaysian exports may have an adverse impact on the Malaysian
economy. In addition, the Malaysian economy is heavily focused on
export of electronic goods. As a result, Malaysia’s reliance on the electronics
sector makes it vulnerable to economic downturns in,
among other sectors, the technology sector.
Risk
of Investing in New Zealand. Investing in New
Zealand issuers subjects a Fund to legal, regulatory, political, economic,
currency, geographic and
security risks that are specific to New Zealand. Global trade is critical to New
Zealand’s economy. It depends heavily on agricultural
exports, which are susceptible to weather hazards and environmental issues. New
Zealand’s key trading partners are China, Australia and the
U.S., and it is vulnerable to changes in demand from these and other countries.
Other risks facing New Zealand include skilled labor
shortages, dependence on foreign investment and natural
disasters.
Risk
of Investing in Singapore. Investments in
Singaporean issuers will subject the Fund to legal, regulatory, political,
currency and economic risks
specific to Singapore. Specifically, political and economic developments of its
neighbors may have an adverse effect on Singapore’s
economy. In addition, because its economy is export-driven, Singapore relies
heavily on its trading partners. China is a major purchaser of
Singapore's exports and serves as a source of Singapore's imports. Singapore
derives a significant portion of its foreign investments from
China. Singapore also has substantial economic exposure to Malaysia, Hong Kong,
and the U.S. As a result, Singapore’s economy is
susceptible to fluctuations in the world economy. A downturn in the economies of
China, Malaysia, Hong Kong, or the U.S., among other
countries or regions, could adversely affect Singapore's economy. In addition,
Singapore’s economy may be particularly vulnerable to
external market changes due to its smaller size.
Risk
of Investing in South Korea. Investments in
South Korean issuers involve risks that are specific to South Korea, including
legal, regulatory,
political, currency, security and economic risks. Substantial political tensions
exist between North Korea and South Korea. Escalated tensions
involving the two nations and the outbreak of hostilities between the two
nations, or even the threat of an outbreak of hostilities, could
have a severe adverse effect on the South Korean economy. In addition, South
Korea's economic growth potential has recently been on a
decline because of a rapidly aging population and structural problems, among
other factors. The South Korean economy is heavily reliant on
trading exports and disruptions or decreases in trade activity could lead to
further declines.
Risk
of Investing in Taiwan. Investing in
Taiwanese issuers subjects a Fund to legal, regulatory, political, economic,
currency, geographic and security risks
that are specific to Taiwan. Taiwan’s economy is export-oriented, so it depends
on a free-trade regime. It may be adversely affected by trade
conflicts, downturns in the world economy and reduced demand for its goods,
particularly from key trading partners such as China. Taiwan
has limited natural resources and relies on imports for its commodity needs,
making it vulnerable to global fluctuations in price and supply.
This dependence is especially pronounced in the energy sector. Electricity and
water shortages pose threats to Taiwan’s high-tech
manufacturing sector. Other long-term challenges for Taiwan include an aging
population, a shortage of skilled labor and increasing competition from
neighboring lower-cost countries.
China has a
complex territorial dispute regarding the sovereignty of Taiwan and has pledged
to take control of Taiwan, including by force if necessary. The
Chinese military has conducted military drills around Taiwan in connection with
China’s claim to Taiwan. Taiwan-based companies and
individuals are significant investors in China. Continuing hostility between
China and Taiwan may have an adverse impact on their economies
and markets and on the value of a Fund’s investments in China, Taiwan or the
region, may cause a suspension in a Fund’s ability to trade
in certain securities or other assets, or may otherwise make such investments
impracticable or impossible.
Risk
of Investing in Thailand. Investing in Thai
issuers subjects a Fund to legal, regulatory, political, economic, currency,
geographic and security risks
that are specific to Thailand. Thailand’s economy is heavily export-dependent
and is vulnerable to changes in demand from its key trading
partners, which include the U.S., China and Japan. The tourism industry is a key
contributor to Thailand’s economy and could be adversely affected
by disruptions in international travel and natural disasters, among other
things. Other risks facing Thailand include periods of political
instability, perceptions of corruption, an aging population, skilled labor
shortages and infrastructure challenges.
