Risk Disclosure

InvestNaija – Investment Notice.

All clients (existing and prospective) are advised to carefully read and understand the risk disclosures contained in this document before making any investment decisions.

Investing involves risk, including the possible loss of capital. The value of your investments may rise or fall, and you may receive back less than your original investment.

This document does not cover all risks involved in investing. Clients are strongly encouraged to seek independent financial, legal, and tax advice before investing.

Market risk

Market risk is the risk of losses due to changes in market prices of financial instruments. It affects all asset classes and cannot be eliminated completely.

Key drivers include interest rates, equity prices, commodity prices, and foreign exchange movements.

Interest rate risk

Interest rate risk arises from fluctuations in interest rates, particularly affecting fixed income securities such as bonds.

When interest rates rise, bond prices typically fall. When interest rates fall, bond prices typically rise.

Equity risk

Equity investments may experience significant price fluctuations over short periods.

These movements may result from company performance, market conditions, or broader economic and political developments.

Foreign exchange risk

Investments denominated in foreign currencies are exposed to exchange rate fluctuations.

Changes in currency values may increase or decrease the value of your investments.

Fixed income risk

Fixed income securities carry risks such as interest rate risk, credit risk, inflation risk, and currency risk.

Although they provide regular interest payments, they are still subject to market volatility and issuer default risk.

Commodity risk

Commodity prices may fluctuate due to supply and demand conditions, affecting both producers and buyers.

These fluctuations may impact financial performance and investment returns.

Exchange-traded fund risk

Exchange-traded funds (ETFs) may not perfectly track their underlying index or asset class.

ETF values may fluctuate, trade at discounts or premiums, and may involve leverage or complex strategies that increase risk.

Credit risk

Credit risk refers to the possibility that an issuer may fail to meet its financial obligations.

Lower credit ratings typically indicate higher risk of default.

Inflation risk

Inflation reduces the purchasing power of money over time.

If investment returns do not exceed inflation, the real value of your returns may decline.

Foreign investment risk

Investing in foreign markets involves additional risks such as currency fluctuations, political instability, and regulatory differences.

Access to reliable information may also be limited compared to domestic investments.

Liquidity risk

Liquidity risk refers to the difficulty of buying or selling an asset quickly without affecting its price.

In some market conditions, assets may become illiquid, making them harder to sell at fair value.

Counterparty risk

Counterparty risk is the possibility that one party in a financial transaction may fail to fulfill its obligations.

InvestNaija works with regulated systems to help reduce exposure to counterparty failures where applicable.

Political risk

Political and regulatory changes can significantly impact financial markets and investment performance.

Investors should remain aware of government policies and economic conditions that may affect their investments.

Important notice

This document is not exhaustive and does not guarantee protection against all risks associated with investing.

You are solely responsible for your investment decisions and should seek independent professional advice where necessary.

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