Downgrade Risk

Possibility that a bond?s rating will be lowered because the issuer?s financial condition, or the financial condition of a party to the financial transaction, deteriorates.

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.