Hedge Equities is registered with the Securities and Exchange Board of India as Portfolio Manager. Securities investments including investments in derivatives are subject to market risks and there is no assurance or guarantee that the objectives of the client portfolios will be achieved. As with any investment in securities, the value of the portfolios can go up or down depending on the factors and forces affecting the capital markets. Each portfolio is exposed to various risks depending upon the investment objective, investment strategy and asset allocation. Non-diversified portfolios tend to be more volatile than diversified portfolios. Past performance of the Portfolio Manager or any of its associates or Group entities is not indicative of future performance.

Risk Factors

Investments in securities are subject to market risks and there is no assurance or guarantees that the objectives of any of the Schemes will be achieved. Investors are not being offered any guaranteed or indicative returns through any of the Schemes. The investments may not be suited to all categories of investors. The past performance of the Portfolio Manager in any Scheme/option is not indicative of the future performance in the same Scheme/option or in any other scheme /option either existing or that may be offered. There is no assurance that past performances indicated in earlier Schemes/options will be repeated. The names of the Schemes/option do not in any manner indicate their prospects or returns. The various factors which may impact the value of the Schemes’ investments include, but are not limited to, fluctuations in the equity and bond markets, fluctuations in interest rates, prevailing political and economic environment, changes in government policy, factors specific to the issuer of the securities, tax laws, liquidity of the underlying instruments, settlement periods, trading volumes etc. Technology stocks and some of the investments in niche sectors run the risk of volatility, high valuation; obsolescence and low liquidity. The investments made are subject to external risks such as war, natural calamities, and policy changes of local/International markets which affect stock markets. The Portfolio Manager may invest in the shares, units of mutual funds, debt, deposits and other financial instruments of group companies. In case the portfolio invests in mutual funds registered with SEBI, scheme specific risk factors of each such underlying scheme will be applicable to the Portfolio. All risks associated with such underlying schemes, including performance of their underlying stocks, derivative instruments, stock-lending, off- shore investments etc. will therefore be applicable to the Portfolio Risk arising out of non diversification: The investment objectives of one or more of the portfolio management schemes could result into concentration on a specific asset/asset class/sector/issuer etc., which could lead to non diversified portfolio which tends to be more volatile than diversified portfolio. Each portfolio will be exposed to various risks depending on the investment objective, investment strategy and the asset allocation. The investment objective, investment strategy and the asset allocation may differ from client to client. However, generally, highly concentrated portfolios with lesser number of stocks will be more volatile than a portfolio with a larger number of stocks. Portfolios with higher allocation to equities will be subject to higher volatility than portfolios with low allocation to equities.

Hedge Equities Limited is not responsible or liable for any loss or shortfall resulting from the operation of the portfolios. The value of the portfolios offered in this document may be affected by the performance of individual companies, change in the general market conditions, factors and forces affecting capital markets in particular, level of interest rates, various market related factors and trading volumes, margin requirements and other regulatory requirements, prevailing political and economic environment, changes in government policy, factors specific to the issuer of the securities, tax laws, liquidity of the underlying instruments, settlement period and transfer procedures. Derivatives including futures and options are affected by various risks including counterparty risk, market risk, valuation risk, liquidity risk and basis risk.

Risk attached with the use of derivatives

The portfolio manager may use derivative products as may be permitted by SEBI from time to time. As and when the schemes trade in the derivatives market, there are risk factors and issues concerning the use of derivatives that investors should understand. Derivative products are specialized instruments that require investment techniques and risk analyses different from those associated with stocks and bonds. The use of a derivative requires an understanding not only of the underlying instrument but also of the derivative itself. Derivatives require maintenance of adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivative adds to the portfolio and other related capabilities. There is the possibility that a loss may be sustained by the portfolio as a result of the failure of another party (usually referred to as the “counter party”) to comply with the terms of the derivatives contract. Other risks in using derivatives include market risk, valuation risk, option risk, liquidity risk and basis risk. Also, it is to be noted that the market for derivative instruments is nascent in India.

Given below are some of the common risks associated with investments in fixed income and money market securities. These risks include but are not restricted to:

Interest Rate Risk:

As with all debt securities, changes in interest rates will affect the valuation of the Portfolios, as the prices of securities generally increase as interest rates decline and generally decrease as interest rates rise. Prices of longer-term securities generally fluctuate more in response to interest rate changes than do shorter-term securities. Interest rate movements in the Indian debt markets can be volatile leading to the possibility of large price movements up or down in debt and money market securities and thereby to possibly large movements in the valuation of Portfolios.

Liquidity or Marketability Risk:

This refers to the ease at which a security can be sold at or near its true value. The primary measure of liquidity risk is the spread between the bid price and the offer price quoted by a dealer. Liquidity risk is characteristic of the Indian fixed income market.

Credit Risk:

Credit risk or default risk refers to the risk which may arise due to default on the part of the issuer of the fixed income security (i.e. will be unable to make timely principal and interest payments on the security). Because of this risk debentures are sold at a yield spread above those offered on Treasury securities, which are sovereign obligations and generally considered to be free of credit risk. Normally, the value of a fixed income security will fluctuate depending upon the actual changes in the perceived level of credit risk as well as the actual event of default.

Reinvestment Risk:

This risk refers to the interest rate levels at which cash flows received from the securities under a particular Portfolio are reinvested. The additional income from reinvestment is the “interest on interest” component. The risk refers to the fall in the rate for reinvestment of interim cash flows.

General Risk Factors applicable to all the Portfolios:

Securities investments are subject to market risk and there is no assurance or guarantee that the objectives of the Portfolios will be achieved.

Past performance of the Portfolio Manager does not indicate the future performance of the same Portfolio or performance of any other future Portfolio(s) of the Portfolio Manager.

The investments made by the Portfolio Manager are subject to risks arising from the investment objective, investment strategy and asset allocation.

The investments made by the Portfolio Manager are subject to risks arising out of non-diversification etc.
Securities investments are subject to market and other risks and there can be no guarantee in any of the Portfolios mentioned in this website against loss resulting from investing in the Portfolio(s) of the Portfolio Manager. The various factors which may impact the value of the Portfolios’ investments include, but are not limited to, fluctuations in the equity and bond markets, fluctuations in interest rates, prevailing political and economic environment, changes in government policy, factors specific to the issuer of the securities, tax laws, liquidity of the underlying instruments, settlement periods, trading volumes etc.
Investment decisions made by the Portfolio Manager may not always be profitable.

The tax benefits described in the Disclosure Document are as available under the present taxation laws and are available subject to conditions. The information given is included for general purpose only and is based on advice received by the Portfolio Manager regarding the law and practice in force in India and the investors should be aware that the relevant fiscal rules or their interpretation may change. As is the case with any investment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time of an investment in the Portfolio will endure indefinitely. In view of the individual nature of tax consequences, each investor is advised to consult his/ her own professional tax advisor.
Prospective investors should review / study the Disclosure Document/Client Agreement carefully and in its entirety and shall not construe its contents hereof or regard the summaries contained herein as advice relating to legal, taxation, or financial / investment matters and are advised to consult their own professional advisor(s) as to the legal, tax, financial or any other requirements or restrictions relating to the subscription, gifting, acquisition, holding, disposal (sale or conversion into money) of Portfolio and to the treatment of income (if any), capitalisation, capital gains, any distribution, and other tax consequences relevant to their portfolio, acquisition, holding, capitalisation, disposal (sale, transfer or conversion into money) of portfolio within their jurisdiction of nationality, residence, incorporation, domicile etc. or under the laws of any jurisdiction to which they or any managed funds to be used to purchase/gift portfolio of securities are subject, and also to determine possible legal, tax, financial or other consequences of subscribing / gifting, purchasing or holding portfolio of securities before making an investment.

Investments are subject to certain risks viz. limited liquidity in the market, settlement risks, impeding readjustment of portfolio composition, highly volatile stock markets in India etc. Such loss could arise due to factors which by way of illustration, include, default or non-performance of a third party, company’s refusal to register a security due to legal stay or otherwise, disputes raised by third parties. Mis-judgment by the Portfolio Manager or his incapacitation due to any reason however remote is also a risk. Thus the investment in Indian capital markets involves above average risk for investors compared with other types of investment opportunities. Investments will be of a longer duration compared to trading in securities. There is a possibility of the value of investment and the income there from falling as well as rising depending upon the market situation. There is also risk of total loss of value of an Asset, possibilities of recovery of loss in investments only through legal process.

The investments made are subject to external risks such as War, natural calamities, policy changes of Local / International Markets which affects stock markets.

Any policy change / technology change / obsolescence of technology would affect the investments made in a particular industry.

The Client has perused and understood the disclosures made by the Portfolio Manager in the Disclosure Document/Client Agreement before entering into this Agreement.

The Portfolio Manager is neither responsible nor liable for any losses resulting from the operations of the Portfolios.

Clients are not being offered any guarantee / assured returns. Performance of the Portfolios may be impacted as a result of Client specific Investment restrictions.