Specific risks

• No capital protection: The value of your investment may go down as well as up and you may not get back the amount you invested.
• Liquidity risk: Lower liquidity means there are insufficient buyers or sellers to allow the sub-fund to sell or buy investments readily. Neither the Index provider nor the issuer make any representation or forecast on liquidity
• CLO Risk: The risks of investing in collateralized loan obligations (CLOs), include both the economic risks of the underlying loans combined with the risks associated with the CLO structure governing the priority of payments. The degree of such risk will generally correspond to the specific tranche in which the sub-fund is invested. Ratings do not constitute a guarantee, may be downgraded, and in stressed market environments it is possible that even AAA-rated CLO tranches could experience realised or mark to market losses due to actual underlying loan default losses, erosion of the subordinated/equity tranches that support the AAA-rated notes due to such losses, market anticipation of future defaults, as well as negative market sentiment with respect to CLO securities as an asset class. The sub-fund’s portfolio management may not be able to accurately predict how specific CLOs or the portfolio of underlying loans for such CLOs will react to changes or stresses in the market. The most common risks associated with investing in CLOs are liquidity risk, interest rate risk, credit risk, and prepayment, extension or call risk, amongst others.
• CLO Prepayment, Extension or Call Risk: After a specified period of time, it is typical that repayments from the underlying Loans will be used to repay the CLO securities that the sub-fund invests into. The speed at which such repayments happen is uncertain and can create material variability as to the expected average maturity of a CLO investment and may mean a Fund may then have to reinvest proceeds into lower yielding securities, which may thus result in a decline in the sub-fund’s income. It may also result in earlier than expected prepayment of a security that this trading above par resulting in a mark to market loss being realised by the sub-fund. Conversely it may result in a CLO security repaying more slowly than expected, extending the maturity and potentially leading to a mark to market loss. A Fund may invest into callable fixed income securities that are subject to call risk. The issuer may decide to "call" or repay the security at par prior to its expected maturity. CLOs are typically structured such that, after a specified period of time, equity holders can call (i.e., redeem) the securities issued by the CLO in full. The sub-fund may not be able to accurately predict when or which of its CLO investments may be called, resulting in a Fund having to reinvest the proceeds in unfavourable circumstances, which in turn could cause in a decline in the sub-fund’s income. the sub-fund may then have to reinvest such proceeds into lower yielding securities, which may thus result in a decline in the sub-fund’s income. An issuer may also decide to call a security that this trading above par resulting in a mark to market loss being realised by the sub-fund.
• Dependence on Managers of CLOs: The performance of the sub-fund’s investments in CLOs will depend in part upon the performance and operational effectiveness of the managers of the CLOs. The sub-fund will invest in CLOs which are subject to management and performance fees charged by the managers of the CLOs. These are in addition to the fees charged to the sub-fund.