·
Foreign investment risk.
To the extent the fund invests in foreign securities,
the fund's performance will be influenced by political, social and economic factors affecting investments
in foreign companies. Special risks associated with investments in foreign issuers include exposure
to currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive
company information, political and economic instability and differing auditing and legal standards.
Investments denominated in foreign currencies are subject to the risk that such currencies will decline
in value relative to the U.S. dollar and affect the value of these investments held by the fund.
·
Risks of concentrating
investments in India.
Because the fund's investments are concentrated in India, the fund's performance
is expected to be closely tied to social, political and economic conditions within India and to be more
volatile than the performance of more geographically diversified funds. Political, social or economic
disruptions in India and surrounding countries, even in countries in which the fund is not invested,
may adversely affect security values in India and thus the fund's investments. Unanticipated political,
social or economic developments may result in sudden and significant investment losses. At times, religious,
cultural and military disputes within and outside India have caused volatility in the Indian securities
markets and such disputes could adversely affect the value and liquidity of the fund's investments in
the future.
The securities markets in India are substantially smaller, less
liquid and more volatile than the major securities markets in the United States. The laws of India relating
to corporate governance standards may be less robust and transparent, which increases the potential for
loss to and unequal treatment of investors.
The Indian government has
exercised, and continues to exercise, significant influence over many aspects of the Indian economy,
which may have significant effect on the Indian economy and could adversely affect market conditions,
Indian companies and prices of Indian Securities.
·
Emerging market risk.
The securities
of issuers located in emerging markets tend to be more volatile and less liquid than securities of issuers
located in more mature economies, and emerging markets generally have less diverse and less mature economic
structures and less stable political systems than those of developed countries. The securities of issuers
located or doing substantial business in emerging markets are often subject to rapid and large changes
in price.
·
Foreign currency risk.
Investments in foreign currencies are subject to the
risk that those currencies will decline in value relative to the U.S. dollar or, in the case of hedged
positions, that the U.S. dollar will decline relative to the currency being hedged. Currency exchange
rates may fluctuate significantly over short periods of time. Foreign currencies are also subject to
risks caused by inflation, interest rates, budget deficits and low savings rates, political factors and
government intervention and controls.
·
Market sector risk.
The fund may significantly
overweight or underweight certain companies, industries or market sectors, which may cause the fund's
performance to be more or less sensitive to developments affecting those companies, industries or sectors.
·
Credit risk.
The instruments in which the fund invests may have ratings that are below investment grade ("high yield"
or "junk" bonds). High yield bonds involve greater credit risk, including the risk of default, than
investment grade bonds, and are considered predominantly speculative with respect to the issuer's ability
to make principal and interest payments. The prices of high yield bonds can fall dramatically in response
to bad news about the issuer or its industry, or the economy in general. Failure of an issuer or guarantor
of a fixed-income security, or the counterparty to a derivatives transaction, to make timely interest
or principal payments or otherwise honor its obligations could cause the fund to lose money.
·
Interest rate risk.
Prices of bonds tend to move inversely with changes in interest rates. Typically, a rise in rates
will adversely affect bond prices and, accordingly, the fund's share price. The longer the effective
maturity and duration of the fund's fixed-income portfolio, the more the fund's share price is likely
to react to interest rates.
·
Liquidity risk.
When there is little
or no active trading market for a security, the fund may not be able to sell the security in a timely
manner at its perceived value, which could cause the fund's share price to fall. Investments in foreign
securities, particularly those of issuers located in emerging markets, tend to have greater exposure
to liquidity risk than those of domestic securities.
·
Derivatives risk.
A small investment
in derivatives could have a potentially large impact on the fund's performance. The use of derivatives
involves risks different from, or possibly greater than, the risks associated with investing directly
in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value.
·
Portfolio turnover risk.
The fund may engage in short-term trading, which could produce higher transaction costs and taxable distributions,
and lower the fund's after-tax performance.
·
Non-diversification risk
. The fund
is non-diversified, which means that the fund may invest a relatively high percentage of its assets in
a limited number of issuers. Therefore, the fund's performance may be more vulnerable to changes in
the market value of a single issuer or group of issuers and more susceptible to risks associated with
a single economic, political or regulatory occurrence than a diversified fund.
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Dreyfus India Fund Summary
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