Schroder GAIA II

 

What are the risks?

  • The fund will take significant positions on companies involved in mergers, acquisitions, reorganizations and other corporate events, which may not turn out as expected and thus may cause significant losses.
  • High yield bonds (normally lower rated or unrated) generally carry greater market, credit and liquidity risk.
  • A rise in interest rates generally causes bond prices to fall.
  • Equity prices fluctuate daily, based on many factors including general, economic, industry or company news
  • The fund uses derivatives for leverage, which makes it more sensitive to certain market or interest rate movements and may cause above-average volatility and risk of loss. A derivative may not perform as expected, and may create losses greater than the cost of the derivative.
  • The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the fund, potentially creating a partial or total loss for the fund.
  • In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares.
  • The fund may engage in physical short sales, which are effected by selling a security that the Fund does not own. The risk of short sales is that the price of acquiring the security for delivery may be higher than the price at which the security was sold. Short sales run the risk of losing an amount greater than the initial investment.
  • A decline in the financial health of an issuer could cause the value of its bonds to fall or become worthless.
  • A failure of a deposit institution or an issuer of a money market instrument could create losses.
  • The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses.
  • Emerging markets, and especially frontier markets, generally carry greater political, legal, counterparty and operational risk.
  • Failures at service providers could lead to disruptions of fund operations or losses.