The risk that a strategy used by a Fund's management may fail to produce the intended result. Common to all mutual funds. The difference between the current market value of the collateral and the amount of the loan.
Brokerage houses charge interest on the borrowed funds.
However, it is often less than the cost of bank loans. The securities markets in many of the countries in which a Fund invests will have substantially less trading volume than the major United States markets. As a result, the securities of some foreign companies may be less liquid and experience more price volatility than comparable domestic securities. There is generally less government regulation and supervision of foreign stock exchanges, brokers and issuers which may make it difficult to enforce contractual obligations. Transaction costs in foreign securities markets are likely to be higher, since brokerage commission rates in foreign countries are likely to be higher than in the United States.