The dynamic nature of the downside protection means that the Fund may lag the market in times of rapid market recovery, because the Fund may be largely invested in cash for extended periods of time. Large investments in cash will mean that upside may be limited if markets subsequently rise. As a result, keeping the Fund open may no longer be in the best interest of shareholders and, at this stage, the Manager could consider winding up the Fund.
The Fund aims to provide the 80% protection by gradually switching from the investment portfolio to a cash portfolio when markets fall. As a further level of security the Fund will invest in a derivative contract with a single counterparty. Where this arrangement fails to support the protection level, the Fund will only be relying on its cash allocation policy to provide the protection. Where the Fund is unable to find a suitable counterparty to enable at least 80% of the value of the Fund to be protected or where only allocation to cash is feasible, the Fund may have to be closed with the proceeds returned to investors. There is a risk that the Fund may hold large proportions of cash for considerable periods of time. This may lead to the Fund underperforming those markets where it is usually expected to invest.
The Fund’s investment objective will not necessarily be achieved and investors are not certain to make profits; losses may be made. Past performance should not be taken as a guide to the future. Performance would be lower had initial charges been included and will vary between different share classes dependent upon their applicable charges. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations.
Specific fund risks
Currency exchange: Changes in the relative values of different currencies may adversely affect the value of investments and any related income.
Derivatives: The use of derivatives is not intended to increase the overall level of risk. However, the use of derivatives may still lead to large changes in value and includes the potential for large financial loss.
Fund closure: Where the Fund is unable to find a suitable counterparty to enable at least 80% of the value of the Fund to be protected or where only allocation to cash is feasible, the Fund may have to be closed with the proceeds returned to investors.
Large cash holding: There is a risk that the Fund may hold large proportions of cash for considerable periods of time. This may lead to the Fund underperforming those markets where it is usually expected to invest.
Multi-asset investment: The portfolio is subject to possible financial losses in multiple markets and may underperform more focused portfolios.
Protected value: Whilst the Fund will endeavour to protect at least 80% of its value at all times this is not guaranteed.
Bond and Multi-asset funds may invest more than 35% of their assets in securities issued or guaranteed by an EEA state.
This communication is not for general public distribution and is intended for discussion with institutional investors and financial advisors only. It is not an invitation to make an investment nor does it constitute an offer for sale.
All the information contained in this communication is believed to be reliable but may be inaccurate or incomplete. Any opinions stated are honestly held but are not guaranteed and should not be relied upon. This is not a buy, sell or hold recommendation for any particular security. The portfolio may change significantly over a short period of time.
The full documentation that should be considered before making an investment, including the Prospectus and Key Investor Information Documents, which set out the fund specific risks, is available from Investec Asset Management. The fund is a sub-fund of the Investec Funds Series i which is a UCITS incorporated in England and Wales as an investment company with variable capital.
Issued by Investec Asset Management, which is authorised and regulated by the Financial Conduct Authority, October 2017