This Share Class is designed as a hedging solution and exclusively reserved for selected feeder funds established in Brazil. The shares will be denominated in US Dollar (USD), the Fund's base currency. The Share Class will aim to provide exposure to Brazilian Real (“BRL”) by converting the net asset value of the Share Class into BRL using financial derivative instruments. As a result, the net asset value is expected to fluctuate in line with the exchange rate between BRL and USD. This fluctuation will be reflected in the performance of the Share Class, and therefore such performance may differ significantly from the performance of the other share classes of the Fund. Additionally, the Share Class will not protect against a decline in the values of the currencies of the underlying investments. There can be no assurance that the hedging solution will be successful, nor will it offer a perfect hedge for a Brazilian feeder fund.
For Inc-2 and Inc-3 shares classes, expenses are charged to the capital account rather than to income, so capital will be reduced. This could constrain future capital and income growth. Income may be taxable.
Changes in the relative values of different currencies may adversely affect the value of investments and any related income.
There is a risk that the issuers of fixed income investments (e.g. bonds) may not be able to meet interest payments nor repay the money they have borrowed. The worse the credit quality of the issuer, the greater the risk of default and therefore investment loss.
The use of derivatives is not intended to increase the overall level of risk. However, the use of derivatives may still lead to large changes in value and includes the potential for large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss.
These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems.
Investments may be primarily concentrated in specific countries, geographical regions and/or industry sectors. This may mean that the resulting value may decrease whilst portfolios more broadly invested might grow.
The value of fixed income investments (e.g. bonds) tends to decrease when interest rates rise.
There may be insufficient buyers or sellers of particular investments giving rise to delays in trading and being able to make settlements, and/or large fluctuations in value. This may lead to larger financial losses than might be anticipated.