Company: SWZ
Filing Date: 2025-01-10
Form Type: PRE 14A
Source: 0000894189-25-000129
Chunk: 33

Company: Total Return Securities Fund
Filing Date: 2025-01-10
Form: PRE 14A
Chunk 33
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 this Proposal 3 is approved, each of the proposed amendments to the Fund’s Fundamental Restrictions would be implemented. Bulldog believes, and the Board concurs, that it would be in the best interests of stockholders to make the proposed changes in order to allow the Fund to achieve its proposed non-fundamental investment objective of providing long-term total return. Risks Associated with Proposed Investments If this Proposal 3 is approved, different risks would apply to an investment in the Fund than would otherwise be applicable under its current Fundamental Investment Restrictions. In particular, the Fund (i) would be able to invest more than 25% of its assets in securities of closed-end investment companies; and (ii) issue senior securities or borrow money subject to the limits of the 1940 Act. As with other investments, investments in other closed end investment companies are subject to market and selection risk. In addition, if the Fund acquires shares of closed-end investment companies, stockholders will bear both their proportionate share of expenses in the Fund (including management and advisory fees) and, indirectly, the expenses of the closed-end investment companies in which the Fund invests. Issuing senior securities and borrowing money involves leverage. Leverage creates a greater risk of loss as well as a potential for more gains for the holders of the Fund’s common stock that if leverage were not used. The Fund may determine in the future to issue senior securities, such as securities representing debt, subject to the limitations of the 1940 Act. The Fund may also borrow money, to the extent permitted by the 1940 Act. Because Bulldog’s investment advisory fee will be based on total assets (assuming approval of the Proposed Agreement pursuant to Proposal 1), Bulldog may be incentivized to propose to the Board that the Fund issue senior securities. Although the Fund intends to engage in short sales of securities only for hedging purposes, maintaining short positions exposes the Fund to the risks associated with those securities, including a forced buy-in and the possibility that a loss on the short position exceeds any increase of the position it is hedging. The Fund will incur a loss as a result on a short sale if the price of the security increases between the date of the short sale and the date on which the Fund replaces the security sold short. The Fund will realize a gain if the security declines in price between those dates. As a result, if the Fund makes short sales in securities that increase in value, it will likely underperform similar funds that do not hedge by short selling. There can