Closed-End New York Municipal Portfolio Series 1

The Trust contains common stocks of closed-end investment companies (“closed-end funds”), the majority of which contain portfolios that are concentrated in tax-free New York municipal bonds, which are rated investment grade (Baa or BBB or better) as determined by Moody’s Investor Services (“Moody’s”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“Standard & Poor’s”).

Income may be subject to state and local taxes as well as the alternative minimum tax. Capital gains, if any, may also be subject to tax. To the extent that any of the underlying closed-end funds invest in anything other than municipal securities, investors may be subject to federal taxes as well.

There is increased volatility associated with investing in leveraged funds. Historically, closed-end funds often trade at a discount to their net asset value.

The Sponsor has selected for the portfolio common stocks of closed-end funds believed to have the best potential to achieve the Trust’s investment objective (the “securities”). The Trust seeks to provide monthly income that is exempt from federal income taxes by investing in Closed-End Funds that invest in tax-free municipal bonds. Municipal bonds generally offer investors the potential for stable tax-free income. However, a portion of the income may be subject to the alternative minimum tax.

See “Description of Ratings” in Part B of the prospectus for additional information regarding the ratings criteria.

You can lose money by investing in the Trust. The Trust also might not perform as well as you expect. This can happen for reasons such as these:

• Share prices can be volatile. The value of your investment may fall over time.
• The value of the securities in the closed-end funds will generally fall if interest rates, in general, rise. Typically, securities with longer periods before maturity are more sensitive to interest rate changes.
• An issuer may be unwilling or unable to make principal payments and/or to declare dividends in the future, may call a security before its stated maturity or may reduce the level of dividends declared. This may result in a reduction in the value of your units.
• The financial condition of an issuer may worsen or its credit ratings may drop, resulting in a reduction in the value of your units. This may occur at any point in time, including during the primary offering period.
• The Trust is concentrated in securities of closed-end funds. Closed-end funds are actively managed investment companies that invest in various types of securities. Closed-end funds issue shares of common stock that are traded on a securities exchange. Closed-end funds are subject to various risks, including management’s ability to meet the closed-end fund’s investment objective, and to manage the closed-end fund portfolio when the underlying securities are redeemed or sold, during periods of market turmoil and as investors’ perceptions regarding closed-end funds or their underlying investments change. Closed-end funds are not redeemable at the option of the shareholder and they may trade in the market at a discount to their net asset value.
• Closed-end funds held by the Trust invest in New York municipal bonds. Municipal bonds are long-term fixed rate debt obligations that decline in value with increases in interest rates, an issuer’s worsening financial condition, a drop in bond ratings or when there is a decrease in the federal income tax rate. Typically, bonds with longer periods before maturity are more sensitive to interest rate changes. Municipal bonds generally generate income exempt from federal income taxation, but may be subject to the alternative minimum tax. Capital gains, if any, may be subject to tax. Because the closed-end funds are concentrated in bonds of issuers located in New York, there may be more risk than if the bonds were issued by issuers located in several states.
• The Trust is considered to be a “trust of funds.” As such, it is subject to certain termination restrictions that may result in a reduction in the value of your units.
• Inflation may decrease the value of money, which may lead to a decrease in the value of assets or income from investments.
• We do not actively manage the portfolio. The Trust will generally hold, and may continue to buy, the same securities even though the security’s outlook or rating or its market value or yield may have changed.