Derivatives Risk Sample Clauses
Derivatives Risk. The risks associated with investing in derivatives may be different and greater than the risks associated with directly investing in the underlying securities and other instruments. A mutual fund may use futures, options, single name or index credit default swaps, or forwards, and may also use more complex derivatives such as swaps that might present liquidity, credit, and counterparty risk. When investing in derivatives, a mutual fund may lose more than the principal amount invested.
Derivatives Risk. The Currency Option is an unlisted structured investment product involving derivatives, which involves risks. Even Foreign Exchange Participating Forward is usually offered at zero premium, the Customer may sustain a loss or a substantial loss if the exchange rate moves unfavorably against the Customer's anticipated view.
Derivatives Risk. Derivatives can be highly volatile and involve risks in addition to the risks of the underlying referenced securities. Gains or losses from a derivative investment can be substantially greater than the derivative’s original cost, and can therefore involve leverage. Leverage may cause a Fund to be more volatile than if it had not used leverage. Derivatives can be complex instruments and may involve analysis that differs from that required for other investment types used by a Fund. If the value of a derivative does not correlate well with the particular market or other asset class to which the derivative is intended to provide exposure, the derivative may not produce the anticipated result. Derivatives can also reduce the opportunity for gain or result in losses by offsetting positive returns in other investments. Derivatives can be less liquid than other types of investments and entail the risk that the counterparty will default on its payment obligations. If the counterparty to a derivative transaction defaults, a Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. To the extent a Fund enters into short derivative positions, the Fund may be exposed to risks similar to those associated with short sales, including the risk that the Fund’s losses are theoretically unlimited. With respect to the Xxxxxxxxx Target, the use of derivatives to hedge against fluctuations in currency exchange rates is among the Fund’s principal investment strategies. However, the Janus Target may use derivatives for investment purposes to seek income and gain and may count certain derivative transactions toward its requirement to invest at least 80% of its net assets in securities of issuers in emerging market countries. As a result, the Janus Target may be more exposed to this risk than the Xxxxxxxxx Target and similarly, since the Acquiring Fund will have the same principal investment strategies as the Xxxxxxxxx Target, the Janus Target may have greater exposure to derivatives risk than the Acquiring Fund.
Derivatives Risk. The Fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. The Fund’s use of derivatives could reduce the Fund’s performance, increase the Fund’s volatility, and could cause the Fund to lose more than the initial amount invested. In addition, investments in derivatives may involve leverage, which means a small percentage of assets invested in derivatives can have a disproportionately large impact on the Fund. Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time. Investment Style Risk. The Fund is an index fund. Therefore, the Fund follows the securities included in the index during upturns as well as downturns. Because of its indexing strategy, the Fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the Fund’s expenses, the Fund’s performance may be below that of the index. Errors relating to the index may occur from time to time and may not be identified by the index provider for a period of time. In addition, market disruptions could cause delays in the index’s rebalancing schedule. Such errors and/or market disruptions may result in losses for the Fund. Large-Cap Company Risk. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.
Derivatives Risk. The Fund may invest in futures, options, and other types of derivatives. Risks associated with derivatives include the risk that the derivative is not well-correlated with the security, index, exchange-traded funds (“ETFs”), or currency to which it relates; the risk that the use of derivatives may not have the intended effects and may result in losses, underperformance, or missed opportunities; the risk that the Fund will be unable to sell the derivative because of an illiquid secondary market; the risk that a counterparty is unwilling or unable to meet its obligation; the risk of interest rate movements; and the risk that the derivatives transaction could expose the Fund to the effects of leverage, which could increase the Fund’s market exposure, magnify investment risks and losses, and cause losses to be realized more quickly. There is no guarantee that derivative techniques will be employed or that they will work as intended, and their use could lower returns or even result in losses to the Fund.
Derivatives Risk. The Fund may invest in futures, op- tions, and other types of derivatives. Risks associated with derivatives in- clude the risk that the derivative is not well-correlated with the security, in- dex, exchange-traded funds (“ETFs”), or currency to which it relates; the risk that the use of derivatives may not have the intended effects and may re- xxxx in losses, underperformance, or missed opportunities; the risk that the Fund will be unable to sell the deriva- tive because of an illiquid secondary market; the risk that a counterparty is unwilling or unable to meet its obliga- tion; the risk of interest rate move- ments; and the risk that the derivatives transaction could expose the Fund to the effects of leverage, which could in- crease the Fund’s market exposure, magnify investment risks and losses, and cause losses to be realized more quickly. There is no guarantee that de- rivative techniques will be employed or that they will work as intended, and their use could lower returns or even result in losses to the Fund.
Derivatives Risk. Derivative instruments and strategies, including futures and selling securities short, may not perfectly replicate direct investment in the security. Derivatives also entail exposure to counterparty credit risk, the risk of mispricing or improper valuation, and the risk that small price movements can result in substantial gains or losses. Futures Contracts Risk — The Fund’s use of futures contracts exposes the Fund to leverage and tracking risks because a small investment in futures contracts may produce large losses and futures contracts may not be perfect substitutes for securities. Hedging Risk — Hedging is a strategy in which the Fund uses a derivative to offset the risks associated with other Fund holdings. There can be no assurance that the Fund’s hedging strategy will reduce risk or that hedging transactions will be either available or cost effective. The Fund is not required to use hedging and may choose not to do so. Leverage Risk — Using futures contracts to increase the Fund’s combined long and short exposure creates leverage, which can magnify the Fund’s potential for gain or loss and, therefore, amplifythe effects of market volatility on the Fund’s share price. Put Option Risk — When the Fund purchases a put option on a security or index it may lose the entire premium paid if the underlying security or index does not decrease in value. The Fundis also exposed to default by the option writer who may be unwilling or unable to perform its contractual obligations to the Fund.
Derivatives Risk. A derivative is a type of investment whose value is derived from the performance of other investments or from the movement of interest rates, exchange rates or market indices. The Advisor will only recommend derivatives as permitted by securities regulations. The Advisor may recommend derivatives to help offset losses that other investments held by a portfolio might suffer because of changes in stock prices, commodity prices or interest or exchange rates. This is referred to as hedging. Some common risks of hedging with or investing in derivatives are: there is no guarantee that the derivative will be bought or sold at the right time to make a profit or limit a loss, nor that the other party to the contract will meet its obligations. Additionally, if the other party goes bankrupt, the investor could lose any deposits made or assets pledged in favour of the other party under the contract; there is no guarantee that a hedging strategy will always work, as the elements that determine the value of a derivative may change in a manner that is contrary to the intent of the hedge; hedging will not always offset a drop in the value of a security and hedging can prevent the portfolio from making a gain it otherwise may have made; and the portfolio may not be able to create an effective hedge against an expected change in a market if most other people expect the same change.