Risk Factors

All investments involve some degree of risk. In finance, risk refers to the degree of uncertainty and/or potential financial loss inherent in an investment decision. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks.Investors should know that EBLAML managed EBL AML 1ST Unit Fund are not guaranteed or assured return schemes and the past performance of the Sponsors and their affiliates or the Asset Manager does not guarantee future performance of the Scheme. The name of the Scheme does not in any manner indicate either the quality of the Scheme or its future prospects and returns. Investing in the EBLAML managed EBL AML 1ST Unit Fund involves some risks that investors should carefully consider before investing in the EBL AML 1ST Unit Fund.

Business Risk

With a stock, investors purchase a piece of ownership in a company. With a bond, investors loan money to a company. Returns from both of these investments require that the company stays in business. If a company goes bankrupt and its assets are liquidated, common stockholders are the last in line to share the proceeds. If there are assets, the company’s bondholders will be paid first, then holders of preferred stock. A common stockholder gets whatever is left, which could be nothing.

Volatility Risk

Even when companies aren’t in danger of failing, their stock price may fluctuate up or down. Market fluctuations can be unsettling to some investors. A stock’s price can be affected by factors inside the company, such as a faulty product, or by events the company has no control over, such as political or market events.

Inflation Risk

Inflation is a general upward movement of prices. Inflation reduces purchasing power, which is a risk for investors receiving a fixed rate of interest. The principal concern for individuals investing in cash equivalents is that inflation will erode returns.

Interest Rate Risk

Interest rate changes can affect a bond’s value. If bonds are held to maturity the investor will receive the face value, plus interest. If sold before maturity, the bond may be worth more or less than the face value. Rising interest rates will make newly issued bonds more appealing to investors because the newer bonds will have a higher rate of interest than older ones. To sell an older bond with a lower interest rate, an investor might have to sell it at a discount.

Liquidity Risk

This refers to the risk that investors won’t find a market for their securities, potentially preventing them from buying or selling when they want. This can be the case with the more complicated investment products. It may also be the case with products that charge a penalty for early withdrawal or liquidation such as a certificate of deposit (CD).

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