Blue Chip Multinationals Core Portfolio Series 31

Under normal circumstances, the trust will invest at least 80% of the value of its assets in blue chip multinational securities. A blue chip company is a nationally recognized company with a long-term reputation for quality, reliability and financial strength. The Trust aims to provide a portfolio of securities that the sponsor believes are large-cap, high quality multinational companies. A multinational company is a company that owns or controls the production of goods or services in at least one country, including emerging market countries, other than its home country. The Sponsor believes that multinational companies may provide investors with a way to gain exposure to potential international growth without investing directly in the local foreign markets. However, there can be no assurance that any security held by the trust will meet the trust objective.

The U.S.- listed common stocks held by the trust may include the common stocks of U.S. and non-U.S. companies. The Trust may also invest in real estate investment trusts.

As a result of this strategy, the trust is concentrated in the information technology sector. 

As of the date of deposit, the trust will hold a significant amount of its assets in largecapitalization U.S. and non-U.S. multinational companies. 

The Sponsor selects U.S.-listed companies that it believes should be core holdings of a diversified blue chip multinational portfolio. To select the portfolio the Sponsor follows a disciplined process which includes a qualitative financial analysis.

The Trust’s portfolio is constructed by the sponsor using the methodology described below:

• Begin with an initial universe of U.S.listed large-cap securities.
• From this sub-universe of companies, the sponsor identifies companies it believes are multinational companies. The sponsor has entered into a research partnership with FactSet Research Systems Inc. (“FactSet”) that allows the sponsor access to FactSet’s GeoRev, a proprietary database, to identify companies that derive a large portion of their revenues from international and emerging market countries. These companies have a strong business presence in foreign and emerging market countries but may not be incorporated or headquartered in foreign or emerging market countries.
• From this sub-universe of companies, the sponsor identifies companies for inclusion in the portfolio through a qualitative financial analysis meant to identify attractive blue chip securities. This is based on, but not limited to, the following factors:
  • Industry Leadership. The sponsor favors companies that possess a strong competitive position among their domestic and global peers. Examples of a strong competitive position include, but are not limited to, possessing proprietary technology or processes, brand strength, network effects, superior management or an absolute cost advantage.
  • Profitability & Growth. The sponsor favors profitable companies with consistent profit margin expansion and prospects for above average growth of dividends, sales and earnings.
  • Cash-flow Adequacy. The sponsor favors companies with recent earnings, operating and free cash-flow higher than the dividends paid over the last/trailing 12 months.
  • Balance Sheet Strength. The sponsor favors companies that possess overall financial strength and exhibit balance sheet improvements relative to their peers and the marketplace.
  • Valuation. The sponsor favors companies whose valuations appear to be attractive based on measures such as price-toearnings, price-to-book and price-to-cash flow.

From the remaining universe, the sponsor selects a final portfolio of large-cap multinational securities by selecting the most attractive candidates, as determined by the sponsor, from each sector for expected performance and risk, while maintaining diversification with limits on sector and market capitalization.

FactSet Research Systems Inc.

FactSet Research Systems Inc. (NYSE: FDS | NASDAQ: FDS) combines integrated financial information, analytical applications, and client service to enhance the workflow and productivity of the global investment community. FactSet, headquartered in Norwalk, Connecticut, was formed in 1978 and now conducts operations along with its affiliates from more than 28 locations worldwide, including Boston, New York, Chicago, San Francisco, London, Amsterdam, Frankfurt, Paris, Milan, Hyderabad, Mumbai, Dubai, Manila, Tokyo, Hong Kong and Sydney.

As with all investments, you may lose some or all of your investment in the trust. No assurance can be given that the trust’s investment objective will be achieved. The trust also might not perform as well as you expect. This can happen for reasons such as these:

• Securities prices can be volatile. The value of your investment may fall over time. Market value fluctuates in response to various factors. These can include stock market movements, purchases or sales of securities by the Trust, government policies, litigation, and changes in interest rates, inflation, the financial condition of the securities’ issuer or even perceptions of the issuer. Changes in legal, political, regulatory, tax and economic conditions may cause fluctuations in markets and securities prices, which could negatively impact the value of the Trust. Additionally, events such war, terrorism, natural and environmental disasters and the spread of infectious illnesses or other public health emergencies may adversely affect the economy, various markets and issuers. For example, the ongoing conflicts in the Ukraine and Gaza, the outbreak of the coronavirus disease, and federal regulatory restrictions on U.S. corporate issuer investments in China and Russia have all recently affected issuers and markets. The complete economic  impact of any such future event may be difficult or impossible to predict. Units of the trust are not deposits of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
• Securities selected according to this strategy may not perform as intended. The trust is exposed to additional risk due to its policy of investing in accordance with an investment strategy. Although the trust's investment strategy is designed to achieve the trust's investment objective, the strategy may not prove to be successful. The investment decisions may not produce the intended results and there is no guarantee that the investment objective will be achieved.
• Share prices or dividend rates on the securities in the trust may decline during the life of the trust. There is no guarantee that share prices of the securities in the trust will not decline and that the issuers of the securities will declare dividends in the future and, if declared, whether they will remain at current levels or increase over time.
• The trust invests in U.S.-listed foreign securities and in companies that do significant business in foreign countries. Securities of foreign issuers present risks beyond those of domestic securities. The trust’s investment in companies that do significant business in foreign countries presents additional risk. Securities of such companies are subject to the risk that foreign countries may be more volatile than the United States due to such factors as adverse economic, currency, political, social or regulatory developments in a country, including government seizure of assets, excessive taxation, limitations on the use or transfer of assets, the lack of liquidity or regulatory controls with respect to certain industries or differing legal and/or accounting standards.
• The trust includes securities issued by companies that do significant business in countries considered to be emerging markets. The performance of the securities included in the trust may be dependent, in part, on the growth or decline of emerging market countries. Emerging markets are generally defined as countries with low per capita income in the initial stages of their industrialization cycles. Risks of investing in companies that do significant business in developing or emerging countries include, among other concerns, political uncertainties and dependence on international trade and development assistance. Companies that do significant business in emerging market countries may be exposed to greater volatility and market risk. In addition, the economies of emerging market countries may be extremely volatile and subject to increased risks.
• The trust is concentrated in the information technology sector. As a result, the factors that impact the information technology sector will likely have a greater effect on this trust than on a more broadly diversified trust. Companies involved in this sector must contend with rapid changes in technology, intense competition, government regulation and the rapid obsolescence of products and services. Furthermore, sector predictions may not materialize and the companies selected for the trust may not represent the entire sector and may not participate in the overall sector growth.
• The trust may be susceptible to potential risks through breaches in cybersecurity. A breach in cybersecurity refers to both intentional and unintentional events that may cause the trust to lose proprietary information, suffer data corruption or lose operational capacity. Such events could cause the sponsor of the trust to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss. In addition, cybersecurity breaches of the trust’s third-party service providers, or issuers in which the trust invests, can also subject the trust to many of the same risks associated with direct cybersecurity breaches.
• The trust is subject to risks arising from various operational factors and their service providers. Operational factors include, but not limited to, human error, processing and communication errors, errors of a trust’s service providers, counterparties or other third-parties, failed or inadequate processes and technology or systems failures. Additionally, the trust may be subject to the risk that a service provider may not be willing or able to perform their duties as required or contemplated by their agreements with the trust. Although the trust seeks to reduce these operational risks through controls and procedures, there is no way to completely protect against such risks.
• Inflation may lead to a decrease in the value of assets or income from investments.
• The sponsor does not actively manage the portfolio.The trust will generally hold, and may, when creating additional units, continue to buy, the same securities even though a security’s outlook, market value or yield may have changed.

See “Investment Risks” in Part A of the prospectus and “Risk Factors” in Part B of the prospectus for additional information.