Detailed risk warning

  • The value of shares and the income from them can go down as well as up and you may get back less than the amount invested
  • Past performance is not a guide to future results
  • Movements in exchange rates can impact on both the level of income received and the capital value of your investment. If the currency of your country of residence strengthens against the currency in which the underlying investments of the Fund are made, the value of your investment will reduce and vice versa
  • Funds which invest in smaller / medium sized companies are specialist funds and, as such, are likely to carry higher risks than more widely invested funds
  • Exposure to a single country market increases potential volatility
  • Funds which invest in a specialized geographical region carry a greater risk due to their concentration than more diversified funds
  • The value of a bond will fall in the event of the default or reduced credit rating of the issuer (or if credit spreads widen, relative to gilts). Similarly an increase in credit rating (or narrowing of credit spreads) can lead to capital appreciation. Generally, the higher the quality of the issuer, the lower the interest rate at which they can borrow money. Issuers of a lower quality will tend to have to pay more to borrow money to compensate the lender (the purchases of a bond) for the extra risk taken
  • Unlike income from a single bond, the level of income from the Fund is not fixed and may fluctuate. Yields are estimated figures and may fluctuate
  • The underlying investments in Bond Funds are subject to two types of risk: market risk (interest rate) and credit risk. Interest rate fluctuations affect the capital value of investments. Where long term interest rates rise, the capital value of shares is likely to fall and vice versa. Credit risk reflects the ability of the borrower (bond issuer) to meet its obligations (pay the interest on a bond and return the capital on redemption date.)
  • Yields are calculated on the basis that income and capital payments on the underlying investments are made in full. There is always a risk of default on either or both types of payment which could affect the yield received
  • In risk terms, corporate bond funds are often considered to be a “half way house” between equity funds and building society accounts. However, unlike a bank and building society account where your capital is secure, corporate bond funds are not risk free
  • Funds which invest in emerging markets tend to be more volatile than those in mature markets and the value of an investment could move sharply up or down