Call Risk

The risk that declining interest rates may accelerate the redemption of a callable security, causing an investor?s principal to be returned sooner than expected. As a consequence, investors may have to reinvest their principal at a lower rate of interest.

Remarks: Bond funds including mutual funds (open-end and closed-end, actively managed and indexed), exchange-traded funds and unit investment trusts offer a convenient and affordable way to invest in a diversified portfolio of bonds, but a bond fund investment can differ from a bond investment in ways that are important to understand.