Statement of risks

Risk reduction is at the core of GLOCAL’s investment philosophy.  Nevertheless, risk will be ever-present in any business activity, so please note the below information:

a) All investments involve risks. The value of any investment, including price of fund units, may rise or fall with market fluctuations, and investors can lose, as the case may be, even the principal amount invested. Investments in emerging and developing countries must be given special consideration as they carry an additional degree of risk including currency fluctuations, limited liquidity, as well as uncertainties in political and social environment.

b) Past performance is neither an indicator, nor a guarantee of future performance. Prior to making an investment decision investors should carefully read the fund's offering documents, including the full statement on inherent risks.

c) Armenian securities markets have substantially less trading volume and higher concentration than the securities markets of OECD countries. This combination of lower volume and greater concentration may create a risk of greater price volatility than in the securities markets of developed economies. Risks for GLOCAL’s Funds include but are not limited to:

• Credit risk: the risk that an issuer of a security comprising the Fund’s assets or a party to a transaction entered into on the Fund’s account may fail, in full or in part, to fulfill its obligations.
• Interest rate risk: the risk of interest rate fluctuations in the financial market.
• Currency risk: the risk that exchange rate fluctuations may negatively affect the foreign currency denominated assets and liabilities of the Fund.
• Liquidity risk: the risk that it may become impossible to sell/liquidate the Fund’s assets when necessary and at a defined fair price, or to fulfill obligations in a timely and proper fashion.
• Systemic liquidity risk: the risk of lack of liquid funds in the financial market (especially important for attracting assets through continuous repo transactions).
• Inflation risk: the risk that the real value of investments will decrease due to inflation.
• Operational risk: the risk of potential errors during operations.
• Legal risk: the risk of adverse changes in the legal framework including Central Bank acts governing the regulation of the securities market.
• Political risk: the risk that turmoil in the Armenian political system may negatively affect the Fund’s operations.
• Global economic risk: the risk of negative impact from global and regional economic crises, as well as from economic hardships in Armenia’s partner countries.