Home / Offering Memorandum / RISK FACTORS AND INVESTMENT CONSIDERATIONS / Investment Companies Risk

18.38. Investment Companies Risk

Subject to the limitations set forth in the Fund’s governing documents or as otherwise permitted by the CySEC, any Investment Compartment may acquire shares in other investment companies. The market value of the shares of other investment companies may differ from their NAV. As an investor in investment companies, the Investment Compartment would bear its ratable share of that entity’s expenses, including its investment Manager and administration fees, while continuing to pay its own Manager and administration fees and other expenses. As a result, shareholders will be absorbing duplicate levels of fees with respect to investments in other investment companies.

The securities of other investment companies in which the Investment Compartment may invest may be leveraged. As a result, the Investment Compartment may be indirectly exposed to leverage through an investment in such securities. An investment in securities of other investment companies that use leverage may expose the Investment Compartment to higher volatility in the market value of such securities and the possibility that the Investment Compartment’s long-term returns on such securities (and, indirectly, the long-term returns of the Investment Compartment’s common shares) will be diminished.

ETFs are generally not actively managed and may be affected by a general decline in market segments relating to its index. An ETF typically invests in securities included in, or representative of, its index regardless of their investment merits and does not attempt to take defensive positions in declining markets.