Accordingly, the risk of loss with respect to swaps is limited to the net amount of interest payments that a Fund is contractually obligated to make. If the other party to a swap defaults, the Fund’s risk of loss consists of the net amount of payments that the Fund contractually is entitled to receive. FOREIGN CURRENCY TRANSACTIONS.The Select Japan Fund and the Select Japan Smaller Companies Fund may, but are not obligated to, hedge their exposure to foreign currencies. The Funds also may seek to gain exposure to the foreign currency in an attempt to realize gains. A Fund’s success in these transactions will depend principally on the ability of the portfolio managers to predict accurately the future exchange rates between foreign currencies and the U.S. dollar.
The risk of loss associated with swaps is confined to the net amount of interest payments a Fund is required to make under the contract. If the counterparty defaults, the Fund’s potential loss is limited to the net amount of payments it is entitled to receive. Regarding foreign currency transactions, the Select Japan Fund and the Select Japan Smaller Companies Fund may choose to hedge their foreign currency exposure but are not required to do so. Additionally, they may seek to gain exposure to foreign currencies to potentially realize gains. The success of these transactions largely depends on the portfolio managers’ ability to accurately predict future exchange rates between foreign currencies and the U.S. dollar.
The risk of loss associated with swaps is confined to the net amount of interest payments that a Fund is required to make under contract. If the counterparty to a swap defaults, the Fund's potential loss is limited to the net payments it is entitled to receive. Regarding foreign currency transactions, the Select Japan Fund and the Select Japan Smaller Companies Fund may choose to hedge their foreign currency exposure, although they are not required to do so. Additionally, the Funds may attempt to gain exposure to foreign currencies to generate profits. The success of these transactions largely depends on the portfolio managers' ability to accurately forecast future exchange rates between foreign currencies and the U.S. dollar.
The risk of loss arising from swaps is limited to the net amount of interest payments that a Fund is obligated to pay under contract. If a counterparty to a swap defaults, the Fund's exposure is limited to the net payments it is entitled to receive. As to foreign currency transactions, the Select Japan Fund and the Select Japan Smaller Companies Fund may, but are not obligated to, hedge their foreign currency exposure. Further, the Funds may seek to invest in foreign currencies to earn income. The success of these transactions is largely dependent on the portfolio managers' ability to predict future foreign currency exchange rates against the U.S. dollar.
The risk of loss of swaps is limited to the net amount of interest payments that a Fund must pay under contract. If the counterparty to a swap defaults, the Fund's exposure is limited to the net payments it is entitled to receive. With respect to foreign currency transactions, the Select Japan Fund and the Select Japan Smaller Companies Fund may elect to hedge their foreign currency exposure, although they are not obligated to do so. The Funds may also seek to obtain exposure to foreign currencies in order to earn profits. The outcome of these transactions is largely determined by the skill of the portfolio managers in predicting future exchange rates between foreign currencies and the U.S. dollar.