An exchange fund is a long-term investment for sophisticated investors. Like any investment, participating in an exchange fund can expose you to risk, including the loss of principal.

First, you should consider the liquidity risk. Investors must remain in an exchange fund for seven years before redeeming their shares for a diversified, tax-deferred basket of stocks. Investors who want to redeem shares before seven years can face various restrictions and penalties.

Further, the performance of an exchange fund is subject to all the market conditions that affect each of the stocks in the fund. Investments carry risk, and can result in loss. To better understand these risks, please consult with an investment advisor.

For a complete discussion of all the risk factors, refer to the "Risks of Investing in Exchange Funds" section in our Use and Risks Disclosure and the legal documents for the fund you are considering.