Investors should note that the ITI Funds ETFs are not capital protected or guaranteed and investors in each ITI Funds ETF should be prepared and able to sustain losses up to the total capital invested. The value of an investment in a ITI Funds ETF may go down as well as up and past performance is not a reliable indicator of future results. Investment in ITI Funds ETFs involves risks, for a list of related risks please click on the numerous Risks link at the top of the page.
General Risk Information
The following is a general discussion of a number of risks which may affect the value of an investment in an ITI Funds UCITS ETF. For further information regarding risk factors, please refer to the risk factors section of the prospectus or the Key Investor Information Document. Such risks are not, nor are they intended to be, exhaustive. Not all risks listed necessarily apply to each issue of an ITI Funds UCITS ETF, and there may be other considerations that should be taken into account in relation to a particular issue. What factors will be of relevance to a particular ITI Funds UCITS ETF will depend upon a number of interrelated matters including, but not limited to, the ITI Funds UCITS ETF’s Investment Objective and Policy. Risks may occur simultaneously and/or may compound each other resulting in an unpredictable effect on the value of the ITI Funds UCITS ETFs. No investment should be made in an ITI Funds UCITS ETF until careful consideration of all these risk factors has been made.
The value of an investment in an ITI Funds UCITS ETF may go down as well as up and past performance is not a reliable indicator of future performance.
Investment in ITI Funds UCITS ETFs involve numerous risks including among others, general market risks relating to the relevant underlying index, credit risks on the provider of index swaps if utilised in the ITI Funds UCITS ETFs, exchange rate risks, interest rate risks, inflationary risks, liquidity risks and legal and regulatory risks.
ITI Funds UCITS ETFs if employing an indirect investment policy will use OTC derivative transactions. There are appropriate arrangements in place to reduce the exposure of the ITI Funds UCITS ETF’s to the counterparty, in some cases up to 100%, but there is no guarantee that such arrangements will be perfect, and the counterparty may lose up to 100% of its investment if the counterparty defaults.
Investors should only reach an investment decision after careful consideration with their legal, tax, accounting, financial and other advisers since not all ITI Funds UCITS ETFs are suitable for all investors.
Certain ITI Funds UCITS ETFs may be denominated in a currency different to that of the traded currency on the stock exchange in which case exchange rate fluctuations may have a negative effect on the returns of the relevant ITI Funds UCITS ETFs. The value of any investment involving exposure to foreign currencies can be affected by exchange rate movements.
ITI Funds and its related companies may act in several roles in relation to ITI Funds UCITS ETFs such as distributor, derivative counterparty, index sponsor and management company which may involve conflicts of interest. These are managed in accordance with applicable rules and regulations.
Investors should be aware that ITI Funds and its related companies may from time to time own interests in the ITI Funds UCITS ETFs which may represent a significant amount or proportion of the overall investor holdings in such ITI Funds UCITS ETFs. Investors should consider what possible impact such holdings, or any disposals thereof, may have on them.
Tax treatment of the ITI Funds UCITS ETFs depends on the individual circumstances of each investor. The levels and bases of, and any applicable relief from, taxation can change.
An investment in an ITI Funds UCITS ETFs is dependent on the performance of the underlying index less costs, but an investment is not expected to match that performance precisely. There may be a tracking difference between the performance of the ITI Funds UCITS ETFs and the underlying index e.g. due to the impact of annual fund management fees among other things. The returns on the ITI Funds UCITS ETFs may not be directly comparable to the returns achieved by direct investment in the underlying assets of the ITI Funds UCITS ETFs or the underlying index. Investors’ income is not fixed and may fluctuate.
An OTC derivative transaction which may be used to gain exposure to the relevant index may be adjusted to reflect certain expenses in relation to taxes and/or buying, selling, borrowing, financing or custody costs associated with the counterparty’s hedging position. These index replication costs may have a negative impact on the performance of the ITI Funds UCITS ETFs.
The price of any ITI Funds UCITS ETF traded on the secondary market will depend on market supply and demand, movements in the value of the index being tracked by the ITI Funds UCITS ETFs as well as other factors such as prevailing financial market, corporate, economic and political conditions. In accordance with the requirements of the relevant stock exchanges, market makers are expected to provide liquidity and two-way prices to facilitate the secondary market trading of the relevant ITI Funds UCITS ETFs. However, in certain abnormal market conditions liquidity may be affected.
In the case of investment in an ITI Funds UCITS ETF tracking a daily leveraged or daily short index, it is intended for financially sophisticated investors only who wish to take a very short-term view on the underlying index, e.g. for day trading purposes. Therefore the ITI Funds UCITS ETF on daily leveraged or daily short indices are appropriate only for financially sophisticated investors who understand the strategy, characteristics and risks. Any ITI Funds UCITS ETFs on daily leveraged or daily short indices are not intended to be a buy and hold investment.
ITI Funds UCITS ETFs may be unable to replicate precisely the performance of an index.
Full disclosure on the composition of the Fund’s portfolio and information on the Index constituents, as well as the indicative Net Asset Value, is available free of charge at www.itifunds-etf.com.
Asset Class Risk Factors
Equities: If the ITI Funds UCITS ETFs provides exposure to the value of an investment in shares, investors should bear in mind that performance will depend on a number of factors including, but not limited to, market and economic conditions, sector, geographical region and political events.
Fixed Income: If the ITI Funds UCITS ETF provides exposure to the value of an investment in bonds, investors should bear in mind that performance will depend on a number of factors including, but not limited to, market and economic conditions, exchange rate risks, interest rate risks, inflationary risks, sector, geographical region and political events.
Commodities: If the ITI Funds UCITS ETFs provide exposure to commodities, investors should bear in mind that commodity prices react, among other things, to economic factors such as changing supply and demand relationships, weather conditions and other natural events, the agricultural, trade, fiscal, monetary, and other policies of governments and other unforeseeable events all of which may affect your investment.
Currency Markets: If the ITI Funds UCITS ETFs provide exposure to the currency markets, investors should bear in mind that the currency markets may be highly volatile. Large price swings can occur in such markets within very short periods and may result in your investment suffering a loss.
Emerging Markets: If the ITI Funds UCITS ETFs provide exposure to emerging markets, investors should bear in mind that there are numerous risks associated with investing in emerging markets including, among others, general political and market risks of emerging market issuers, exchange rate risks, interest rate risks, inflationary risks, liquidity risks and legal and regulatory risks. Also currency markets may be highly volatile in the emerging markets. Significant changes, including changes in prices, can occur in such markets within very short periods of time and may result in losses. Large and sudden changes in interest rates may also negatively impact the performance of indices.