Disclaimer Notice – Important Information
Risks of Investing in Alternative Investments: Hedge Funds & Managed Futures
WHEN CONSIDERING ALTERNATIVE INVESTMENTS, SUCH AS HEDGE FUNDS AND MANAGED FUTURES, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME HEDGE FUND AND MANAGED FUTURES PRODUCTS USE LEVERAGE AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.
WITH RESPECT TO ALTERNATIVE INVESTMENTS, SUCH AS HEDGE FUNDS AND MANAGED FUTURES, IN GENERAL, YOU SHOULD BE AWARE THAT:
- RETURNS FROM SOME ALTERNATIVE INVESTMENTS, INCLUDING HEDGE FUNDS AND MANAGED FUTURES, CAN BE VOLATILE. YOU MAY LOSE ALL OR PORTION OF YOUR INVESTMENT. WITH RESPECT TO SINGLE MANAGER PRODUCTS THE MANAGER HAS TOTAL TRADING AUTHORITY. THE USE OF A SINGLE MANAGER COULD MEAN A LACK OF DIVERSIFICATION AND HIGHER RISK. MANY ALTERNATIVE INVESTMENTS SUCH AS HEDGE FUNDS AND MANAGED FUTURES ARE SUBJECT TO SUBSTANTIAL EXPENSES THAT MUST BE OFFSET BY TRADING PROFITS AND OTHER INCOME. A PORTION OF THOSE FEES IS PAID TO ALTEGRIS.
- TRADING MAY TAKE PLACE ON FOREIGN EXCHANGES THAT MAY NOT OFFER THE SAME REGULATORY PROTECTION AS THE BOTSWANA STOCK EXCHANGE.
WITH RESPECT TO AN INVESTMENT IN A HEDGE FUND OR MANAGED FUTURES FUND, YOU SHOULD BE AWARE THAT:
- THERE IS OFTEN A LACK OF TRANSPARENCY AS TO THE FUND'S UNDERLYING INVESTMENTS. AS TO A HEDGE FUND OF FUNDS, THE FUND'S MANAGER HAS COMPLETE DISCRETION TO INVEST IN VARIOUS SUB-FUNDS WITHOUT DISCLOSURE THEREOF TO YOU OR TO US. BECAUSE OF THIS LACK OF TRANSPARENCY, THERE IS NO WAY FOR YOU TO MONITOR THE SPECIFIC INVESTMENTS MADE BY THE HEDGE FUND OR TO KNOW WHETHER THE SUB-FUND INVESTMENTS ARE CONSISTENT WITH THE HEDGE FUND'S HISTORIC INVESTMENT PHILOSOPHY OR RISK LEVELS. A HEDGE FUND OF FUNDS INVESTS IN OTHER FUNDS AND FEES ARE CHARGED AT BOTH THE FUND AND SUB-FUND LEVEL. THUS THE OVERALL FEES YOU WILL PAY WILL BE HIGHER THAT YOU WOULD PAY BY INVESTING DIRECTLY IN THE SUB-FUNDS. IN ADDITION, EACH SUB-FUND CHARGES AN INCENTIVE FEE ON NEW PROFITS REGARDLESS OF WHETHER THE OVERALL OPERATIONS OF THE FUND ARE PROFITABLE.
- THERE IS NO SECONDARY MARKET FOR FUND INTERESTS. TRANSFERS OF INTERESTS ARE SUBJECT TO LIMITATIONS. THE FUND'S MANAGER MAY DENY A REQUEST TO TRANSFER IF IT DETERMINES THAT THE TRANSFER MAY RESULT IN ADVERSE LEGAL OR TAX CONSEQUENCES FOR THE FUND.
A HEDGE FUND'S OFFERING MATERIALS OR A MONEY MANAGER'S DISCLOSURE DOCUMENT DESCRIBES THE VARIOUS RISKS AND CONFLICTS OF INTEREST RELATING TO AN INVESTMENT AND TO ITS OPERATIONS. YOU SHOULD READ THOSE DOCUMENTS CAREFULLY TO DETERMINE WHETHER AN INVESTMENT IS SUITABLE FOR YOU IN LIGHT OF, AMONG OTHER THINGS, YOUR FINANCIAL SITUATION, NEED FOR LIQUIDITY, TAX SITUATION, AND OTHER INVESTMENTS.
KEEP IN MIND THAT THE PAST PERFORMANCE OF ANY INVESTMENT IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. YOU SHOULD ONLY COMMIT RISK CAPITAL TO A FUND INVESTMENT. ALTERNATIVE INVESTMENT PRODUCTS, INCLUDING HEDGE FUNDS, ARE NOT FOR EVERYONE AND ENTAIL RISKS THAT ARE DIFFERENT FROM MORE TRADITIONAL INVESTMENTS. YOU SHOULD OBTAIN INVESTMENT AND TAX ADVICE FROM YOUR ADVISERS BEFORE DECIDING TO INVEST.
Past results are not indicative of future results. There is risk of loss when investing in alternative investments such as managed futures or hedge funds.
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