Selected risk considerations

See Index brochure under Resources for further detail on the risks relating to the Index

  • The Index is not guaranteed to succeed at meeting its objectives.
  • The Index relies on a risk control methodology and could underperform indices that do not have a risk control overlay.
  • There is a potential for the underlying data to incorrectly Nowcast the key economic indicators and subsequently incorrectly determine the state of economic growth, which might then negatively impact the Index allocations and the Index performance.
  • The Index has exposure to US equity, commodity and US Treasury markets which may be volatile and decline in value.
  • Financial products linked to the Index will be exposed to the risks of those products.
  • Relative strength and trend-following strategies, including the Index, could underperform in mean-reverting markets.
  • By design, multi-asset indices tend to have lower correlations to equity markets. Compared to equity-only strategies, a diversified multi-asset strategy may underperform in highly bullish equity markets.
  • Risks of multi-asset investing include but are not limited to market risk, credit risk, interest rate risk, and foreign exchange risk. Correlations of returns among different asset classes may deviate from historical patterns. Geopolitical events and policy shocks pose risks that can reduce asset returns. Valuations may be adversely affected during times of high market volatility, thin liquidity, and economic dislocation.
  • The Index uses leverage which may amplify market movements in both directions. Investors may be overexposed to negative market conditions and therefore bear amplified losses.
  • The Index is an excess return index and will not earn any cash reinvestment return.
  • The Index has a limited operating history and may perform in unanticipated ways.
  • Backtested performance and backtested allocations of the Index should not be taken as an indication of the future performance of, or future allocations of, the Index. The actual performance or component allocations of the Index may bear little relation to the backtested performance or backtested component allocations of the Index.
  • Disruption events may impact the calculation of the Index.
  • The Index deducts transaction and replication costs, each calculated and deducted on a daily basis based on predefined rules. The costs cover, among other things, rebalancing and replication. The total amount of transaction and replication costs is not predictable and will depend on a number of factors, including the leverage of the Index, which may be as high as 250%, the performance of the underlying components, and market conditions.
  • The Index performance reflects (i) a 0.50% per annum index deduction rate and (ii) transaction (based on notional positions) and rebalancing (based on turnover) costs at rates that may vary based on the underlying assets at the Index level and also within certain underlying assets. Because certain costs are based on turnover, such costs are not predictable and may increase substantially in the future, especially during periods of market stress. The transaction and rebalancing costs will reduce the potential positive change in the level of the Index and increase the potential negative change in the level of the Index.
  • Prior to investing in the Index or purchasing any products linked to (or based on) the Index, investors and consumers should seek independent financial, tax, accounting and legal advice.
  • Publicly available information on the Index and its methodology is limited. A copy of the Index methodology will be provided upon request through your advisor, broker or other professional financial representative.