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RISK FACTORS |
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What are the Investment risks?
The investment return is based on the performance
of the underlying shares of the Fund and depending on performance
there could be no investment return payable.
If your circumstances change and you need to withdraw your
investment, the price obtained could be less than your original
investment.
You must be aware that if any of the parties involved in the Fund
were unable to meet their obligations you could lose some or all of
your investment.
If you tell us that you want to cancel your investment after we
have bought the shares, you will only get back the value of the
shares when we sell them, which could be less than your original
investment.
It should be remembered that the price of the Shares can go down
as well as up and that, on the redemption of their Shares, you may
not receive the amount that you originally invested.
What is the taxation risk?
You should note that the levels and the bases of taxation could
change in the future.
The values of any allowances will depend on individual
circumstances. Is there a credit risk?
The Fund holds a diverse portfolio of securities which may include
debt securities are subject to price volatility due to such factors
as interest rate sensitivity, market perception of the credit
worthiness of the issuer and general market liquidity and movements.
If debt securities are held the Manager considers the credit
worthiness of each counterparty in evaluating the potential risk
that an issuer might default with respect to principal and interest
payments. If an issuer were to default this would have a negative
effect on the share price only relevant to its proportion of the
whole fund.
The market in debt securities is influenced by economic and market
conditions, interest rates, exchange rates and inflation rates in
Europe and other industrialised countries, and there can be no
assurance that events in Europe or elsewhere will not cause market
volatility or that such volatility will not adversely affect the
value of securities.
What is the concentration risk?
The Fund is designed to mitigate its risks by
spreading investments into assets from different issuers thereby
avoiding a concentration on any one issuer. However, it is possible
that the exposure to one single issuer may represent a relatively
large proportion of the Funds net assets for example due to strong
market performance. The limits prescribed by UCITS regulations
however will be maintained and, should any external events result in
a passive breach in the applicable asset restrictions, remedial
action will be taken.
Is the Fund affected by currency or interest rate
risks?
Securities which are denominated, or which have an
underlying denomination in, a foreign currency or where the payout
occurs in a foreign currency are exposed to the risk of changes in
currency exchange rates which may adversely affect the yield of such
securities. Similarly contractual services where the remuneration is
in a currency other than of that of the Fund are exposed to exchange
rates and may become more or less expensive as a result.
Is there a risk of capital erosion?
The Fund aims to achieve capital growth through the
use of derivatives. In order to maximise the objective the fees and
the expenses of the Fund will be taken into the income account of
the Fund. In certain circumstances the income generated in the Fund
may not be sufficient to meet its obligations in such cases deficits
will be cleared at the end of the Funds financial period. Although
unlikely to be material any such calls on the capital account may
result in capital erosion.
Is there a liquidity risk?
Liquidity risk exists when a particular instrument
is difficult to purchase or sell. If a derivative transaction is
particularly large or if the relevant market is illiquid, it may not
be possible to initiate a transaction or liquidate a position at an
advantageous price. In the event that total redemptions from the
Fund exceeded 10% at any revaluation date the Manager could delay
settlement of any excess over this amount.
Please refer to the Brochure and the Terms & Conditions for full
details.