RISK WARNING

This is not intended to be a comprehensive statement of all the risks to which investors might be exposed and there may be others that exist now or which may arise in the future. We have set out the main risks to which investors will be exposed, as we understand them, but warn that investing is always exposed to new risks and that some risks once thought to be very low can rapidly develop into high and serious risks.

Key Risks

  • Past performance is not an indicator of future performance
  • The value of investments may go down as well as up
  • You are not certain to make a profit
  • You may make a loss
  • You may lose your entire investment
  • The price or value of investments may fluctuate significantly
  • Any income distributions may also fluctuate significantly

Risks Associated with Discretionary Investment Management

Our principal service is discretionary investment management where individual portfolios are managed in accordance with each customer's requirements and suitability as made known to us. You have given us discretion over both asset allocation and individual security selection in relation to the assets held in your Portfolio and we shall exercise our discretion so as to assist you in achieving your goals but you will understand that we cannot guarantee that your goals will be achieved. The main risks are:

  • Your Portfolio and its performance will be specific to you, even when compared to a portfolio with a broadly similar mandate.
  • We use your stated preferences in guiding the investment strategy for your different portfolios. As a consequence, your portfolios may outperform or underperform the “average” customer Portfolio.

Risks and Exchange Traded Funds (ETF)

We invest primarily in ETFs listed on recognised stock exchanges in the UK such as the London Stock Exchange and overseas such as the New York Stock Exchange.

Some specific risks associated with investing in ETFs include:

  • The ETF markets may decline in value;
  • The value of the ETFs is dependent upon the underlying investments held by them and the prices of those investments may vary according to the markets on which they are listed or traded.
  • The underlying investments of the ETFs may comprise shares, fixed interest securities or collective investment funds, which are subject to the risk factors set out below;
  • An ETF may close and the liquidated value of the underlying investments may result in a loss;
  • If there is little liquidity in the market for an ETF there may be substantial differences between the buying price and the selling price;
  • ETFs exposed to overseas markets may involve different risks from UK focussed ETFs;
  • Investments in overseas ETFs depend not only on the performance of the ETF but also upon foreign exchange rates which may change adversely affecting the value of the ETF in your base currency.

Risks and Shares

We may invest in shares listed on recognised stock exchanges in the UK such as the London Stock Exchange and overseas such as the New York Stock Exchange. We may also invest in shares on other approved markets such as London Stock Exchange's Alternative Investment Market (AIM) or ISDX. Some specific risks associated with investing in shares include:

  • Dividend payment and growth is not guaranteed:
  • Companies in which you invest are not obliged to pay dividends;
  • Companies may go into liquidation or receivership which may result in the shares becoming worthless;
  • Equity markets may decline in value;
  • Corporate earnings and financial markets may be volatile;
  • If there is no recognised market for shares, then these will be difficult to sell and accurate information about their value may be hard to obtain;
  • Smaller company investments may be difficult to sell if there is little liquidity in the market for such shares and there may be substantial differences between the buying price and the selling price;
  • Shares on overseas markets may involve different risks from UK shares
  • Investments in overseas companies depend not only on the performance of the shares but also upon foreign exchange rates which may change adversely affecting the value of the shares in your base currency.

Risks and Fixed Interest Securities

Fixed interest securities (also known as bonds) are issued by governments, governmental bodies, quasi-governmental bodies in the UK (and overseas), UK local authorities, and companies in the UK and in other countries. The main risks are:

  • There are few recognised markets in such securities, because they are traded between the issuers, their brokers, and the banks and securities houses making a market in the securities;
  • Securities in currencies other than Sterling are risky because foreign exchange rates may move in an unfavourable direction reducing the value of investments in base currency terms;
  • Securities issued by overseas bodies may involve special risks;
  • Capital may be lost if the issuer defaults.
  • Capital may be eroded due to the effects of inflation;
  • The value of fixed income securities may fall as well as rise;
  • Compensation may not be available at all or to the entire extent of deposits made with issuers that default.

Risks and Collective Investment Funds

Units or shares are issued by collective investment funds both in the UK and elsewhere in the world. These may be authorised by an approved regulator or unauthorised and unapproved. We will only invest your money in authorised funds quoted on the London Stock Exchange (or on other recognised leading exchanges) and in funds traded on the London stock exchange which have a UK Reporting Fund Status approved by H M Revenue & Customs. The main risks are:

  • There may be no recognised market for collective investment funds as units/shares are issued and redeemed by the managers of the funds;
  • Funds may be valued for pricing and dealing purposes either daily weekly, fortnightly monthly or even less frequently by the fund managers;
  • The prices of the underlying investments of the funds will vary according to the markets on which these are listed or traded;
  • Some authorised funds are subject to greater supervision than others;
  • Funds in currencies other than Sterling may be affected if foreign exchange rates move in an unfavourable direction thus reducing the valuation of investments in base currency terms.

Stabilisation

We may, from time to time, carry out such transactions on your behalf, where the price may have been influenced by measures taken to stabilise it. Stabilisation enables the market price of a security to be maintained artificially during the period when a new issue of securities is sold to the public. Stabilisation may affect not only the price of the new issue but also the price of other securities. The FCA allows stabilisation in certain circumstances. The effect of stabilisation may be to keep the price of certain securities at a higher level than they would otherwise be during the period of stabilisation. We will endeavour not to take part in stabilisation. The fact that a new issue or a related security is being stabilised should not be taken as any indication of the level of interest from investors, nor of the price at which they are prepared to buy the securities.

Risks and Foreign Currency Investments

We may buy on your behalf in an investment denominated in a currency other than the agreed base currency of your Portfolio. The risks are:

  • a movement in exchange rates may have a separate effect, unfavourable as well as favourable, on the gain or loss otherwise experienced on the investment concerned;
  • the base currency of your portfolio will be Sterling if you choose to operate your portfolio in Sterling. We may offer additional base currencies as detailed on our website.

Brief Summary of Risks Associated with All Investments

  • Economic risk related to the economic cycle and macroeconomic situation of a country, a region, the world.
  • Inflation risk - the rate at which prices increase in an economy and can cause currency depreciation and the real returns of investments to decrease.
  • Country risk and transfer risk - when investors invest in a foreign country where the transfer of money is or becomes controlled or where the investment is nationalised.
  • Depending on exchange rates movements, an investment in a foreign currency may generate profits, when the foreign currency appreciates, or entail losses, when the foreign currency depreciates.
  • The ability to buy and sell any type of asset quickly without impacting its market price is important and a lack of liquidity may prevent an investor from selling at market prices.
  • Psychological risks arise when irrational factors such as rumours cause severe price fluctuations.
  • Credit risk always arises when money is lent because the borrower may ultimately be unable to repay it.
  • Political risk relates to the underlying political system in which any investment is made.
  • Fluctuations in interest rates, whether short-term or long-term rates, may have substantial adverse consequences on the prices of financial instruments;
  • Emerging markets might suggest higher growth, but the risks mentioned above are enhanced.

Investments can go down in value as well as up so you could get back less than you invest. Your capital is at risk. Find out more

Tiller Investments Ltd is authorised and regulated by the Financial Conduct Authority (Firm Ref No 793479).
Tiller Investments Ltd is a limited company registered in England and Wales (Company No 10234817).

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