KEY PRODUCT RISKS
Different funds carry different risks. It is crucial to understand the specific terms and risks mentioned in the offering documents/ prospectus, product highlights sheet and other relevant documents before investing. Key risks include but are not limited to:
The risk that the issuer fails to make principal and interest payments when due. Such a risk usually applies to all fixed income and money market instruments.
Market Risk & Interest Rate Risk
The value of investments may go up and down due to changing political, legal, economic conditions and change in interest rate. This is common to all markets and asset classes. Investors may get back an amount substantially less than initially invested.
Exchange rate fluctuation may affect the value of a fund, and the dividends and interest earned by a fund. For funds denominated in a foreign currency, there may be an exchange loss when converting the redemption amount back to the local or base currency.
This risk exists when a particular instrument is difficult to purchase or sell. Securities not listed or rated may take longer to dispose of in the market as a result of which investors may incur significant costs or losses.
This risk exists when derivative instruments are used for hedging, efficient portfolio management or leverage purposes which may lead to additional risks such as volatility risk and counterparty risk. The cumulative effect may result in significant losses.
In order to execute its strategy, the fund may take positions in derivative instruments as well as certain other securities that expose the fund to the credit risk of counterparties that investors are not aware of. Any default by such counterparty on its obligation will be borne by the fund as a result of which the fund may experience a decline in the value of its position, lose income and incur costs associated with asserting its rights against such counterparty, all of which may result in significant losses to investors.