Investment Advisory Service Financial Product Risks

Securities and other instruments (stocks, government bonds, corporate debentures, real estate investment trusts, investment trust securities, etc.) are expected to experience price fluctuations, and such fluctuations may cause the value of discretionary and advisory account assets under management to fall below their value at time of purchase. As such, neither purchase price principal nor any specific dividend yield or performance rate is guaranteed. The purchaser shall assume responsibility for any losses incurred.

Major risks related to our investment strategies include the following:

  • Price Volatility Risk:
    Prices of stocks and securities are known to fluctuate widely and such price fluctuations in individual stocks and the stock market overall may contribute to a decline in the value of assets under management.
  • Securities Selection Risk:
    Securities selection may contribute to a decline in the value of assets under management irrespective of overall securities market trends.
  • Liquidity Risk:
    An inability to execute trades at the most advantageous time due to low trading volume may contribute to a decline in the value of assets under management.
  • Credit Risk (Stocks):
    In such a case when the issuer of the stock goes into financial difficulty or default etc, invested assets may become unrecoverable. Additionally, in the case when the issuer is expected to go into such situation, the price of the stock issued by the issuer will decline and it may be the factor for the depreciation in the assets under management.
  • Interest Risk:
    Bond prices generally fall as interest rates rise, and such price fluctuations may contribute to a decline in the value of assets under management.
  • Credit Risk (Fixed Income):
    Invested assets may become unrecoverable if issuers of corporate/sovereign bonds, commercial paper or short-term financial instruments become insolvent or experience calamitous declines in creditworthiness. Market anticipation of such declines may also contribute to a decline in the value of assets under management.
  • Foreign Currencies Risk:
    Fluctuations in the currency market may have an impact on the value of assets under management. As a result, investors may suffer losses arising from foreign exchange fluctuations. Investment in foreign currency denominated assets may also be affected by regional political and economic conditions, currency and capital regulations and other factors that may contribute to a decline in the value of assets under management.
  • Country Risk:
    Financial market turbulence caused by country-specific political, economic or regulatory changes may constrain fund management and contribute to a decline in the value of assets under management.
  • Derivative Risk:
    Some products may include derivatives in their investment strategy. In such cases, declining or low correlation with underlying hedged products, liquidity risks, margin deposit losses, leverage risks and other factors may contribute to a decline in the value of assets under management.