All investments carry risk. Different investments carry different levels of risk, depending on the investment strategy and the underlying investments. Generally, the higher the potential return of an investment, the greater the risk (including the potential for loss and portfolio value variability over the short term). Some of the significant risks of the Strategy are included below.
Investment risk: The Strategy seeks to generate higher income returns than traditional cash investments. The risk of an investment in the Strategy is higher than an investment in a typical bank account or term deposit. Amounts distributed to unitholders may fluctuate, as may the Strategy’s unit price, by material amounts over short periods.
Income securities risk: The Strategy may have exposure to a range of income securities. The value of these securities may fall, for example due to market volatility, interest rate movements, perceptions of credit quality, supply and demand pressures, a change to the reference rate used to set the value of interest payments, market sentiment, or issuer default.
Credit risk: The value of the investments that the Strategy has exposure to may be sensitive to changes in market perceptions of credit quality, both of individual issuers and of credit markets in general. Deteriorations in the market’s perception of credit quality may negatively impact the values of such securities, and hence the Strategy’s unit price.
