Correspondence 0001580642-23-006384 from MUTUAL FUND SERIES TRUST (CIK 0001355064)
MUTUAL FUND SERIES TRUST (CIK 0001355064)
Date: Nov. 29, 2023 · CIK: 0001355064 · Accession: 0001580642-23-006384
AI Filing Summary & Sentiment
File numbers found in text: 333-132541, 811-21872
Letter
VIA EDGAR TRANSMISSION Securities and Exchange Commission Division of Investment Management 100 F Street, N.E. Washington, D.C. 20549-0506
Re: Mutual Fund Series Trust, File Nos. 333-132541 and 811-21872
Dear Ms. Bentzinger:
On September 22, 2023, the Registrant, on behalf of its proposed series, Catalyst/Aspect Enhanced Multi-Asset Fund (the “Fund”), filed a registration statement (“Registration Statement”) under the Securities Act of 1933 (the “Securities Act”) and the Investment Company Act of 1940, as amended (the “1940 Act”). In a telephone conversation on November 2, 2023, you provided comments to the Registration Statement. Below, please find a summary of your comments and the Registrant’s responses, which the Registrant has authorized Thompson Hine LLP to make on its behalf. Additional or revised disclosures are italicized herein.
General
Comment 1: Please update the series and class identifiers on EDGAR.
Response: The Registrant undertakes to update EDGAR upon submitting its Rule 485(b) filing.
Prospectus
Fee Table
Comment 2: The Fund discloses short sales as a principal investment strategy. Please confirm supplementally that any expected dividend and interest expense associated with short sale transactions are included in the Fee Table.
Response: The Registrant notes that the Fund intends to take short positions in futures and that such trades do not have any borrow cost. Thus, the Registrant contends that there is no expected dividend or interest expense.
Comment 3: Please confirm that the subsidiary’s management fee, including any performance fee, is included in the line item for “Management Fees” and that the subsidiary’s expenses are included in the line time for “Other Expenses.”
Ms. Elizabeth Bentzinger
November 29, 2023
Page 2
Response: The Registrant so confirms.
Comment 4: Because the Fund is a new series, please disclose that “Acquired Fund Fees and Expenses” and “Other Expenses” are estimated for the current year.
Response: The Registrant has amended the footnotes to the Fee Table accordingly.
Comment 5: In the footnote to the Fee Table, please extend the term of the expense limitation agreement to one year from the effectiveness of the prospectus.
Response: The Registrant undertakes to extend the expiration date of the expense limitation agreement to at least one year from the date of the effectiveness of the prospectus.
Principal Investment Strategies
Comment 6: Please specify how much of the Fund’s portfolio is expected to be allocated to each component of the Fund’s strategy.
Response: The Registrant has amended its disclosures to state the following:
The Fund seeks to achieve its investment objective by investing in a portfolio composed of two components: (i) a “Managed Futures Component” consisting of global financial and commodity futures, currency forwards and other derivative contracts on or related to spanning various sectors or asset classes including currencies, interest rate instruments, stock indices, metals, energy and agricultural commodities including agriculture, bonds, currencies, energies, and interest rates, metals and stock indices, and (ii) a “60/40 Component” consisting of a portfolio investing in U.S. equity and U.S. fixed income markets through financial futures and U.S. bond exchange traded funds (“ETFs”). The Fund expects to allocate between 5-40% of its assets in the Managed Futures Component and between 40%-60% of its assets in the 60/40 Component. The Fund holds the balance in cash and cash equivalents.
Managed Futures Component: The Managed Futures Component of the Fund’s portfolio may hold long and short positions in futures, forwards and other derivative contracts, and maintains cash and cash equivalents to be utilized as margin. The Managed Futures Component of the Fund’s assets are allocated among various sectors or asset classes including currencies, interest rate instruments, stock indices, metals, energy and agricultural commodities agriculture, bonds, currencies, energies, interest rates, metals and stock indices. Investments may be made in domestic and foreign markets, including emerging markets. Investment in these instruments may be made
Ms. Elizabeth Bentzinger
November 29, 2023
Page 3
by the Fund directly or indirectly by investing through its Subsidiary (as described below).
The Fund’s advisor engages a sub-advisor, Aspect Capital Limited (the “Sub-Advisor”), to manage the Fund’s portfolio. In managing the Managed Futures Component, the Sub-Advisor utilizes a set of proprietary trading systems, developed by the Sub-Advisor, to determine the Fund’s asset allocations. A quantitative process is used to collect, process and analyze market price data in order to determine the model’s view of direction and strength of the trend opportunities in each market in the portfolio sector or asset class of the component, and determine buy or sell decisions target long or short positions accordingly. The process used is similar across all sectors and contracts, based on the Sub-Advisor’s belief in diversification and with the aim of avoiding over-optimization and/or over-fitting of the model to individual market idiosyncrasies or to the recent past. The quantitative models process seeks to harvest opportunities over various timescales, from a small number of days to six months or more. By maintaining a comparatively small exposure to any individual contract, the strategy seeks to achieve true sector and contract diversification, thereby allowing a wide range of opportunities to be captured and maximizing expected long-term, risk-adjusted returns.
The Fund actively trades this Component of the Fund’s portfolio, which may lead to higher transaction costs that may offset Fund performance.
60/40 Component: The 60/40 Component is intended to provide the Fund’s portfolio with long-term, strategic broad-based exposure to liquid U.S. equity and U.S. fixed income securities, similar to that of a traditionally weighted U.S. investment portfolio. The Sub-Advisor aims to allocate approximately 60% of the Component’s assets to U.S. equity markets through investment in S&P 500 futures and approximately 40% of the Component’s assets to U.S. bond markets through investing in various futures and/or U.S. bond ETFs. The Fund’s 60/40 Component investments are taken on a relatively passive, long-only, “buy-and-hold” basis. With respect to the 60/40 Component’s 40% allocation to the U.S. bond markets, the Fund may invest in ETFs that hold securities of any maturity or duration and intends to hold a majority of the portfolio in investment grade corporate bonds (rated BBB or higher by S&P Global Ratings or the equivalent by another nationally recognized statistical ratings organization). The longer a security’s duration, the more sensitive it will be to changes in interest rates.
Comment 7: Is “Managed Futures Component” an accurate name for that part of the Fund’s strategy given that the component includes forward contracts and other derivative contracts? Please consider whether there is an overemphasis on “futures.”
Ms. Elizabeth Bentzinger
November 29, 2023
Page 4
Response: The Registrant has given careful consideration to the Staff’s comment and respectfully declines to amend it disclosures. The Registrant believes that “managed futures” is an appropriate name for investment strategies and that the term is commonly understood in the industry to suggest a strategy that is primarily composed of futures, although not exclusively composed of futures.
Comment 8: In the first paragraph under the heading “Principal Investment Strategies,” the Fund discloses that the sectors in which the Fund may invest include “interest rates” and “stock indices.” Please confirm whether these are appropriate sectors. In the second paragraph, a similar list identifies them as “asset classes.”
Response: The Registrant refers to its response to Comment 6.
Comment 9: Please confirm supplementally that the Fund will not invest more than 25% in sectors that are themselves industries (e.g., agriculture, energy).
Response: The Registrant so confirms.
Comment 10: In the description of the “60/40 Component” in the first sentence under the heading “Principal Investment Strategies,” please clarify that the ETFs in which the Fund may invest are U.S. bond ETFs.
Response: The Registrant refers to its response to Comment 6.
Comment 11: Given the Fund’s investment in money-market funds as a principal investment strategy, please consider whether “Underlying Fund Risk” should be designated a principal investment risk of the Fund.
Response: The Registrant has designated “Underlying Fund Risk” as a principal investment risk.
Comment 12: In the third paragraph, the references to “the model’s view” and “quantitative models” are unclear. Please elaborate on what models are being used in more detail in the Fund’s Item 9 disclosures.
Response: The Registrant refers to its response to Comment 6.
Comment 13: Is the phrase “of the opportunities in each market in the portfolio” accurate as used in the third sentence of the third paragraph? Is it more accurate to say the model view “of each sector in the Managed Futures component of the portfolio”?
Response: The Registrant refers to its response to Comment 6.
Ms. Elizabeth Bentzinger
November 29, 2023
Page 5
Comment 14: In the description of the “60/40 Component,” please revise the last sentence to indicate that the Fund may invest in futures and U.S. bond ETFs that hold securities of any maturity or duration as opposed to investing in those securities directly.
Response: The Registrant refers to its response to Comment 6.
Principal Investment Risks
Comment 15: The Staff’s position on risk disclosures for the past several years has been to disclose risks in the order of significance or prominence to the fund’s strategy. Disclosing risks in alphabetical order suggests that each are equally imminent, whereas the risk disclosures should give shareholders which risks are of greater concern or salient to the Fund. Please re-order the Fund’s principal risk disclosures so that they appear in order of materiality (from most material to least material) in lieu of disclosing them in alphabetical order. See ADI 2019-08, “Improving Principal Risks Disclosure” at www.sec.gov.
Response: The Registrant has given the Staff’s position and ADI 2019-08, thoughtful consideration. The Registrant respectfully declines to re-order the Fund’s risk disclosures as requested. The materiality of each risk is fluid, i.e., what is the most material risk today may not be the most material risk tomorrow. Recent market disruptions and volatility as a result of the global COVID-19 pandemic demonstrate that it is not possible to anticipate which risk will present the greatest concern to the Fund at any given moment. Therefore, the Registrant believes that emphasizing one risk over another may be misleading to investors.
Comment 16: Please consider whether “junk bond risk” is a principal investment risk as mentioned in the disclsoure of “Credit Risk.” If so, please add corresponding investment strategy disclsoure, including the lowest grade investment the Fund may hold, and whether the Fund could hold securities that are in default as part of its principal investment startegy. Please also create a separate risk for “Junk Bond Risk.”
Response: The Registrant has amended its disclosures to state the following:
Credit Risk. Credit risk is the risk that an issuer of a security will fail to pay principal and interest in a timely manner, reducing the Fund’s total return. The Fund may invest in high-yield, high-risk securities, commonly called “junk bonds,” that are not investment grade and are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. Credit risk may be substantial for the Fund.
Comment 17: Please remove references to the “benchmark” in the disclosure of “Actively Mangaged Fund Risk” and “Model and Data Risk.”
Response: The Registrant has amended its disclosures accordingly.
Ms. Elizabeth Bentzinger
November 29, 2023
Page 6
Comment 18: Please confirm whether the reference to “underlying indices” in the disclsoure of “Derivatives Risk” is relevant to the Fund.
Response: The Registrant has amended its disclosures to state the following:
Derivatives Risk. Even a small investment in derivatives (including through the Underlying Indexes’ investment in futures and forwards) may give rise to leverage risk (which can increase volatility and magnify the Fund’s potential for loss), counterparty risk (the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments), and can have a significant impact on the Fund’s performance. Derivatives are also subject to credit risk (the counterparty may default) and liquidity risk (the Fund may not be able to sell the security or otherwise exit the contract in a timely manner).
Comment 19: Please expand on the disclosure of “Emerging Market Risk” to be consistent with ADI 2020-11. For example, is there more to say about market manipulation concerns and risks related to regulatory and accounting standards? Is there any risk from investments in China?
Response: The Registrant has confirmed that the Fund does not expect to have appreciable risk from investments in China. The Registrant has amended its disclsoures to state the following:
Emerging Market Risk. The Fund may invest in countries with newly organized or less developed securities markets. There are typically greater risks involved in investing in emerging markets securities. Generally, economic structures in these countries are less diverse and mature than those in developed countries and their political systems tend to be less stable. There may also be less reliable or publicly available information about emerging markets due to non-uniform regulatory, auditing or financial recordkeeping standards (including material limits on PCAOB inspection, investigation, and enforcement), which could cause errors in the implementation of the Fund’s investment strategy. Emerging market economies may be based on only a few industries, therefore security issuers, including governments, may be more susceptible to economic weakness and more likely to default. Emerging market countries also may have relatively unstable governments, weaker economies, and less-developed legal systems with fewer security holder rights. The Fund’s performance may depend on issues other than those that affect U.S. companies and may be adversely affected by different rights and remedies associated with emerging market investments, or the lack thereof, compared to those associated with U.S. companies. Investments in emerging markets countries may be affected by government policies that restrict foreign investment in certain issuers or industries. Investing in emerging markets involves not only the risks described
Ms. Elizabeth Bentzinger
November 29, 2023
Page 7
below with respect to investing in foreign securities, but also other risks, including exposure to economic structures that are generally less diverse and mature, and to political systems that can be expected to have less stability, than those of developed countries. The typically small size of the markets of securities of issuers located in emerging markets and the possibility of a low or nonexistent volume of trading in those securities may also result in a lack of liquidity and in price volatility of those securities.
Comment 20: In the disclsoure of “ETF Risk,” please add that market price may be less than NAV; there may not be active market for the ETF; market trading may be halted
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CORRESP 1 filename1.htm November 29, 2023 VIA EDGAR TRANSMISSION Ms. Elisabeth Bentzinger Securities and Exchange Commission Division of Investment Management 100 F Street, N.E. Washington, D.C. 20549-0506 Re: Mutual Fund Series Trust, File Nos. 333-132541 and 811-21872 Dear Ms. Bentzinger: On September 22, 2023, the Registrant, on behalf of its proposed series, Catalyst/Aspect Enhanced Multi-Asset Fund (the “Fund”), filed a registration statement (“Registration Statement”) under the Securities Act of 1933 (the “Securities Act”) and the Investment Company Act of 1940, as amended (the “1940 Act”). In a telephone conversation on November 2, 2023, you provided comments to the Registration Statement. Below, please find a summary of your comments and the Registrant’s responses, which the Registrant has authorized Thompson Hine LLP to make on its behalf. Additional or revised disclosures are italicized herein. General Comment 1: Please update the series and class identifiers on EDGAR. Response: The Registrant undertakes to update EDGAR upon submitting its Rule 485(b) filing. Prospectus Fee Table Comment 2: The Fund discloses short sales as a principal investment strategy. Please confirm supplementally that any expected dividend and interest expense associated with short sale transactions are included in the Fee Table. Response: The Registrant notes that the Fund intends to take short positions in futures and that such trades do not have any borrow cost. Thus, the Registrant contends that there is no expected dividend or interest expense. Comment 3: Please confirm that the subsidiary’s management fee, including any performance fee, is included in the line item for “Management Fees” and that the subsidiary’s expenses are included in the line time for “Other Expenses.” Ms. Elizabeth Bentzinger November 29, 2023 Page 2 Response: The Registrant so confirms. Comment 4: Because the Fund is a new series, please disclose that “Acquired Fund Fees and Expenses” and “Other Expenses” are estimated for the current year. Response: The Registrant has amended the footnotes to the Fee Table accordingly. Comment 5: In the footnote to the Fee Table, please extend the term of the expense limitation agreement to one year from the effectiveness of the prospectus. Response: The Registrant undertakes to extend the expiration date of the expense limitation agreement to at least one year from the date of the effectiveness of the prospectus. Principal Investment Strategies Comment 6: Please specify how much of the Fund’s portfolio is expected to be allocated to each component of the Fund’s strategy. Response: The Registrant has amended its disclosures to state the following: The Fund seeks to achieve its investment objective by investing in a portfolio composed of two components: (i) a “Managed Futures Component” consisting of global financial and commodity futures, currency forwards and other derivative contracts on or related to spanning various sectors or asset classes including currencies, interest rate instruments, stock indices, metals, energy and agricultural commodities including agriculture, bonds, currencies, energies, and interest rates, metals and stock indices, and (ii) a “60/40 Component” consisting of a portfolio investing in U.S. equity and U.S. fixed income markets through financial futures and U.S. bond exchange traded funds (“ETFs”). The Fund expects to allocate between 5-40% of its assets in the Managed Futures Component and between 40%-60% of its assets in the 60/40 Component. The Fund holds the balance in cash and cash equivalents. Managed Futures Component: The Managed Futures Component of the Fund’s portfolio may hold long and short positions in futures, forwards and other derivative contracts, and maintains cash and cash equivalents to be utilized as margin. The Managed Futures Component of the Fund’s assets are allocated among various sectors or asset classes including currencies, interest rate instruments, stock indices, metals, energy and agricultural commodities agriculture, bonds, currencies, energies, interest rates, metals and stock indices. Investments may be made in domestic and foreign markets, including emerging markets. Investment in these instruments may be made Ms. Elizabeth Bentzinger November 29, 2023 Page 3 by the Fund directly or indirectly by investing through its Subsidiary (as described below). The Fund’s advisor engages a sub-advisor, Aspect Capital Limited (the “Sub-Advisor”), to manage the Fund’s portfolio. In managing the Managed Futures Component, the Sub-Advisor utilizes a set of proprietary trading systems, developed by the Sub-Advisor, to determine the Fund’s asset allocations. A quantitative process is used to collect, process and analyze market price data in order to determine the model’s view of direction and strength of the trend opportunities in each market in the portfolio sector or asset class of the component, and determine buy or sell decisions target long or short positions accordingly. The process used is similar across all sectors and contracts, based on the Sub-Advisor’s belief in diversification and with the aim of avoiding over-optimization and/or over-fitting of the model to individual market idiosyncrasies or to the recent past. The quantitative models process seeks to harvest opportunities over various timescales, from a small number of days to six months or more. By maintaining a comparatively small exposure to any individual contract, the strategy seeks to achieve true sector and contract diversification, thereby allowing a wide range of opportunities to be captured and maximizing expected long-term, risk-adjusted returns. The Fund actively trades this Component of the Fund’s portfolio, which may lead to higher transaction costs that may offset Fund performance. 60/40 Component: The 60/40 Component is intended to provide the Fund’s portfolio with long-term, strategic broad-based exposure to liquid U.S. equity and U.S. fixed income securities, similar to that of a traditionally weighted U.S. investment portfolio. The Sub-Advisor aims to allocate approximately 60% of the Component’s assets to U.S. equity markets through investment in S&P 500 futures and approximately 40% of the Component’s assets to U.S. bond markets through investing in various futures and/or U.S. bond ETFs. The Fund’s 60/40 Component investments are taken on a relatively passive, long-only, “buy-and-hold” basis. With respect to the 60/40 Component’s 40% allocation to the U.S. bond markets, the Fund may invest in ETFs that hold securities of any maturity or duration and intends to hold a majority of the portfolio in investment grade corporate bonds (rated BBB or higher by S&P Global Ratings or the equivalent by another nationally recognized statistical ratings organization). The longer a security’s duration, the more sensitive it will be to changes in interest rates. Comment 7: Is “Managed Futures Component” an accurate name for that part of the Fund’s strategy given that the component includes forward contracts and other derivative contracts? Please consider whether there is an overemphasis on “futures.” Ms. Elizabeth Bentzinger November 29, 2023 Page 4 Response: The Registrant has given careful consideration to the Staff’s comment and respectfully declines to amend it disclosures. The Registrant believes that “managed futures” is an appropriate name for investment strategies and that the term is commonly understood in the industry to suggest a strategy that is primarily composed of futures, although not exclusively composed of futures. Comment 8: In the first paragraph under the heading “Principal Investment Strategies,” the Fund discloses that the sectors in which the Fund may invest include “interest rates” and “stock indices.” Please confirm whether these are appropriate sectors. In the second paragraph, a similar list identifies them as “asset classes.” Response: The Registrant refers to its response to Comment 6. Comment 9: Please confirm supplementally that the Fund will not invest more than 25% in sectors that are themselves industries (e.g., agriculture, energy). Response: The Registrant so confirms. Comment 10: In the description of the “60/40 Component” in the first sentence under the heading “Principal Investment Strategies,” please clarify that the ETFs in which the Fund may invest are U.S. bond ETFs. Response: The Registrant refers to its response to Comment 6. Comment 11: Given the Fund’s investment in money-market funds as a principal investment strategy, please consider whether “Underlying Fund Risk” should be designated a principal investment risk of the Fund. Response: The Registrant has designated “Underlying Fund Risk” as a principal investment risk. Comment 12: In the third paragraph, the references to “the model’s view” and “quantitative models” are unclear. Please elaborate on what models are being used in more detail in the Fund’s Item 9 disclosures. Response: The Registrant refers to its response to Comment 6. Comment 13: Is the phrase “of the opportunities in each market in the portfolio” accurate as used in the third sentence of the third paragraph? Is it more accurate to say the model view “of each sector in the Managed Futures component of the portfolio”? Response: The Registrant refers to its response to Comment 6. Ms. Elizabeth Bentzinger November 29, 2023 Page 5 Comment 14: In the description of the “60/40 Component,” please revise the last sentence to indicate that the Fund may invest in futures and U.S. bond ETFs that hold securities of any maturity or duration as opposed to investing in those securities directly. Response: The Registrant refers to its response to Comment 6. Principal Investment Risks Comment 15: The Staff’s position on risk disclosures for the past several years has been to disclose risks in the order of significance or prominence to the fund’s strategy. Disclosing risks in alphabetical order suggests that each are equally imminent, whereas the risk disclosures should give shareholders which risks are of greater concern or salient to the Fund. Please re-order the Fund’s principal risk disclosures so that they appear in order of materiality (from most material to least material) in lieu of disclosing them in alphabetical order. See ADI 2019-08, “Improving Principal Risks Disclosure” at www.sec.gov. Response: The Registrant has given the Staff’s position and ADI 2019-08, thoughtful consideration. The Registrant respectfully declines to re-order the Fund’s risk disclosures as requested. The materiality of each risk is fluid, i.e., what is the most material risk today may not be the most material risk tomorrow. Recent market disruptions and volatility as a result of the global COVID-19 pandemic demonstrate that it is not possible to anticipate which risk will present the greatest concern to the Fund at any given moment. Therefore, the Registrant believes that emphasizing one risk over another may be misleading to investors. Comment 16: Please consider whether “junk bond risk” is a principal investment risk as mentioned in the disclsoure of “Credit Risk.” If so, please add corresponding investment strategy disclsoure, including the lowest grade investment the Fund may hold, and whether the Fund could hold securities that are in default as part of its principal investment startegy. Please also create a separate risk for “Junk Bond Risk.” Response: The Registrant has amended its disclosures to state the following: Credit Risk. Credit risk is the risk that an issuer of a security will fail to pay principal and interest in a timely manner, reducing the Fund’s total return. The Fund may invest in high-yield, high-risk securities, commonly called “junk bonds,” that are not investment grade and are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. Credit risk may be substantial for the Fund. Comment 17: Please remove references to the “benchmark” in the disclosure of “Actively Mangaged Fund Risk” and “Model and Data Risk.” Response: The Registrant has amended its disclosures accordingly. Ms. Elizabeth Bentzinger November 29, 2023 Page 6 Comment 18: Please confirm whether the reference to “underlying indices” in the disclsoure of “Derivatives Risk” is relevant to the Fund. Response: The Registrant has amended its disclosures to state the following: Derivatives Risk. Even a small investment in derivatives (including through the Underlying Indexes’ investment in futures and forwards) may give rise to leverage risk (which can increase volatility and magnify the Fund’s potential for loss), counterparty risk (the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments), and can have a significant impact on the Fund’s performance. Derivatives are also subject to credit risk (the counterparty may default) and liquidity risk (the Fund may not be able to sell the security or otherwise exit the contract in a timely manner). Comment 19: Please expand on the disclosure of “Emerging Market Risk” to be consistent with ADI 2020-11. For example, is there more to say about market manipulation concerns and risks related to regulatory and accounting standards? Is there any risk from investments in China? Response: The Registrant has confirmed that the Fund does not expect to have appreciable risk from investments in China. The Registrant has amended its disclsoures to state the following: Emerging Market Risk. The Fund may invest in countries with newly organized or less developed securities markets. There are typically greater risks involved in investing in emerging markets securities. Generally, economic structures in these countries are less diverse and mature than those in developed countries and their political systems tend to be less stable. There may also be less reliable or publicly available information about emerging markets due to non-uniform regulatory, auditing or financial recordkeeping standards (including material limits on PCAOB inspection, investigation, and enforcement), which could cause errors in the implementation of the Fund’s investment strategy. Emerging market economies may be based on only a few industries, therefore security issuers, including governments, may be more susceptible to economic weakness and more likely to default. Emerging market countries also may have relatively unstable governments, weaker economies, and less-developed legal systems with fewer security holder rights. The Fund’s performance may depend on issues other than those that affect U.S. companies and may be adversely affected by different rights and remedies associated with emerging market investments, or the lack thereof, compared to those associated with U.S. companies. Investments in emerging markets countries may be affected by government policies that restrict foreign investment in certain issuers or industries. Investing in emerging markets involves not only the risks described Ms. Elizabeth Bentzinger November 29, 2023 Page 7 below with respect to investing in foreign securities, but also other risks, including exposure to economic structures that are generally less diverse and mature, and to political systems that can be expected to have less stability, than those of developed countries. The typically small size of the markets of securities of issuers located in emerging markets and the possibility of a low or nonexistent volume of trading in those securities may also result in a lack of liquidity and in price volatility of those securities. Comment 20: In the disclsoure of “ETF Risk,” please add that market price may be less than NAV; there may not be active market for the ETF; market trading may be halted