Risks of investing

Before making a decision about investing resources into mutual funds, you should understand that investments in Ukrainian equity market associated with risks. Neither State nor Asset Management Company will give you repayment guarantees. That is why before buying securities you should thoroughly learn the Prospectus of the Fund. Risks of investment into mutual funds are described it the Prospectus of a particular Fund.

• Risk concerned with final pay.

Ukrainian bank system is not developed enough, that is why when transferring money inside the country there appears delayed payment risk. Asset Management Company makes great efforts to minimize such kind of risks, using only most reliable, to their point of view, banks.

• Risk of an issuer.

When investing resources in state or municipal bonds there exists issuer default risk. Refusal of the state from service debt obligations happens extremely seldom and is connected with force majeure circumstances. Municipal fund default may happen not only in the countries with non-stable economy, but also in the developed countries. Asset Management Company makes great efforts to minimize default risk, obtaining securities of most reliable, to their point of view, issuers.

• Economic risks.

Ukraine belongs to the developing countries. Mechanisms, called upon to provide stable development of economic processes, are in the stage of formation. Also Ukraine has big external debt which takes away considerable resources. Negative trends in the economy of the country may have injurious effect on the functioning of an equity market, as a result of this, the cost of capital investments may decrease.

• Market risks.

Holders of investment units bear risk of reduction of the cost of their investments. Under the influence of many factors cost of investment fund may both increase and decrease. Previous increase of the cost of investment fund does not mean that in future the same increase will continue. Asset Management Company does not guarantee profitability of investment, but is obliged to make maximum efforts for maintenance of stable growth of the cost of investment unit. State does not guarantee profitability either.

• Risks, connected with taxation.

Tax system of Ukraine is in the development process and subjected to constant changes. As a result, present laws may be changed in future. Moreover these changes may be retroactive. Holders of investment funds should take into account risks connected with taxation when making investment decision. Capital Asset Management take all needed measures for guarantying information, in base of which acquisition of securities will take place.