Investment Risk Disclosure

Last Updated: 2026-07-27

This Investment Risk Disclosure is provided by Unicode Digital Ltd. and its applicable affiliates (collectively, "Unicode") for the purpose of providing a general description of certain risks that may arise in connection with securities, equities, bonds, futures, options, derivatives, digital assets, quantitative trading and other investment activities.

This disclosure is not intended to constitute a complete or exhaustive list of risks and does not constitute an offering document, investment advice, an investment recommendation or an assessment of the suitability of any particular investment strategy.

The terms, risks and legal relationships relating to any specific investment product or asset management service shall be governed by the applicable definitive offering documents, investment management agreement, subscription documents and other formal legal documentation.

1. General Investment Risk

All investments involve risk. The value of investments, and any income derived from them, may rise or fall. Investors may not recover the amount originally invested and may lose part, substantially all or all of their invested capital.

No investment strategy can guarantee a profit or the achievement of any target return, expected return, volatility level, drawdown limit or other investment objective.

2. Market Risk

The prices of financial instruments may be affected by economic conditions, interest rates, inflation, foreign exchange rates, market liquidity, corporate performance, investor sentiment, political events, natural disasters, regulatory developments and other factors.

Markets may experience rapid, significant or unpredictable changes over a short period. The use of diversification, hedging or market-neutral strategies cannot completely eliminate market risk or the possibility of investment losses.

3. Equity Investment Risk

Equity prices may be affected by an issuer's financial condition, operating performance, corporate governance, industry competition, market valuation and the broader macroeconomic environment.

An individual company may experience financial distress, material litigation, accounting fraud, suspension of trading, delisting, insolvency or other adverse events, which may cause its shares to decline substantially in value or become worthless.

4. Fixed Income and Credit Risk

Bonds and other fixed-income instruments may be affected by changes in interest rates, credit quality, inflation, liquidity and the issuer's ability to meet its payment obligations.

An increase in interest rates may generally cause the value of existing fixed-income instruments to decline. An issuer or counterparty may also delay or fail to pay interest, principal or other amounts when due.

Higher-yielding debt instruments generally involve greater credit and default risk.

5. Futures, Options and Other Derivatives Risk

The value of futures, options, swaps, contracts for difference and other derivative instruments generally depends on changes in the value of an underlying asset, index, interest rate, foreign exchange rate or other reference measure.

Derivatives may involve leverage, meaning that relatively small market movements may result in significant gains or substantial losses. Losses arising from certain derivatives may exceed the initial margin, premium or capital committed.

Options may also lose some or all of their value as a result of time decay, changes in implied volatility or expiry.

6. Leverage and Margin Risk

The use of borrowing, margin or derivative instruments may amplify investment gains but may also amplify investment losses.

If markets move adversely, investors may be required to provide additional margin within a short period. A failure to meet a margin call may result in the forced liquidation of positions and may cause the loss of all margin posted or losses exceeding the initial capital committed.

7. Short-Selling Risk

Short selling involves selling an asset that the investor does not own, generally in the expectation that it can later be repurchased at a lower price.

If the price of the relevant asset rises, a short position may incur losses. As the price of an asset may theoretically rise without limit, the potential loss on a short sale may also be unlimited.

Short selling may also be affected by increased borrowing costs, recall of borrowed securities, insufficient liquidity and regulatory restrictions.

8. Quantitative Model and Algorithmic Trading Risk

Quantitative and algorithmic strategies rely on mathematical models, statistical relationships, computer programs, market data and specific assumptions.

Models may contain design flaws, programming errors, inaccurate data, inappropriate parameters, overfitting or other unidentified deficiencies. Statistical relationships observed historically may change or permanently cease to exist.

Changes in market structure, participant behaviour, trading rules or liquidity conditions may cause models or strategies that were previously effective to become ineffective.

9. Market-Neutral, Arbitrage and Hedging Risk

References to "market-neutral", "arbitrage", "relative value", "hedging" or similar strategies do not mean that such strategies are risk-free or capable of avoiding losses.

Such strategies may be affected by widening basis spreads, breakdowns in pricing relationships, changes in correlations, inaccurate hedge ratios, differences in trading hours between markets, increased financing costs and an inability to adjust related positions simultaneously.

In extreme market conditions, positions that were expected to offset one another may incur losses at the same time.

10. Market-Making and Liquidity Provision Risk

Market-making and liquidity-provision strategies may be adversely affected by narrowing bid-ask spreads, increased competition, adverse selection, inventory accumulation, one-directional market movements and failures in hedging arrangements.

During periods of rapid market movement or reduced liquidity, positions may not be capable of being closed or effectively hedged in a timely manner and may result in substantial losses.

11. Digital Asset Risk

Digital assets may be highly volatile and may experience significant price changes over a short period or lose all of their value.

Digital assets may also be subject to risks relating to blockchain protocols, smart contracts, cyberattacks, private-key management, wallet security, network forks, network congestion, transaction confirmation delays and technological upgrades.

Certain digital asset markets may have materially different levels of regulation, transparency, liquidity and investor protection compared with traditional financial markets.

12. Stablecoin Risk

A stablecoin may fail to maintain its intended reference value and may deviate from its peg as a result of the quality of its reserve assets, the creditworthiness of its issuer, redemption arrangements, banking relationships, regulatory measures, market liquidity or changes in market confidence.

Stablecoins should not be regarded as having the same risk characteristics as fiat currency, government securities or protected bank deposits.

13. Liquidity Risk

Certain financial instruments may not have an active or continuous market.

During periods of market stress, reduced trading volume or trading disruption, investors may be unable to purchase, sell or close positions within the expected timeframe or at a reasonable price and may incur significant slippage or market-impact costs.

14. Counterparty and Credit Risk

Investment activities may rely on banks, brokers, exchanges, clearing houses, custodians, over-the-counter dealers and other service providers.

Any counterparty may default, become insolvent, commit fraud, freeze accounts, suspend withdrawals, fail to settle transactions or experience operational disruption, resulting in delays in recovering assets or investment losses.

Even where an investment position is hedged from a market-risk perspective, a counterparty default may still result in substantial losses.

15. Custody and Asset Security Risk

Assets may be held by banks, brokers, exchanges, custodians, wallet providers or other third parties.

Such institutions may be affected by asset commingling, internal-control failures, cyberattacks, fraud, insolvency or other adverse events. Digital assets may also be permanently lost as a result of lost or stolen private keys, erroneous transfers or failures in authorisation procedures.

16. Technology and Cybersecurity Risk

Investment activities may depend on trading systems, servers, network connections, market data, trading interfaces, algorithms and third-party technology providers.

System failures, software errors, network outages, latency, inaccurate data, cyberattacks or service interruptions may result in erroneous transactions, duplicate transactions, missed trading opportunities, an inability to close positions or loss of assets.

17. Operational and Personnel Risk

Investment activities may be adversely affected by human error, inadequate internal controls, procedural failures, fraud, the departure of key personnel, authorisation errors or failures by service providers.

Automated systems, internal approvals and risk-management procedures may reduce certain risks but cannot eliminate operational risk.

18. Valuation Risk

Certain financial instruments may not have an active market or reliable market quotations. Their valuation may therefore depend on models, third-party quotations, counterparty quotations or management judgement.

Such valuations may differ materially from the amount ultimately realisable and may affect investment performance, net asset value, fee calculations or transaction prices.

19. Foreign Exchange and Cross-Border Investment Risk

Investments denominated in different currencies may be affected by changes in foreign exchange rates. Currency movements may result in gains or losses even where the price of the underlying asset remains unchanged.

Cross-border investments may also involve capital controls, foreign exchange restrictions, sanctions, asset freezes, tax-reporting obligations, conflicts of law and regulatory requirements in multiple jurisdictions.

20. Concentration and Correlation Risk

An investment portfolio may be concentrated in particular assets, issuers, industries, markets, countries, trading venues, counterparties or investment strategies.

Concentration may cause a single event to have a material effect on the overall portfolio. During periods of market stress, assets or strategies that are normally considered to have low correlations may experience losses at the same time.

21. Legal and Regulatory Risk

The legal and regulatory environment relating to financial markets, investment funds, derivatives and digital assets may change.

Regulatory authorities may introduce new licensing, trading, custody, capital, tax, reporting or market-access requirements and may restrict or prohibit certain investment or trading activities.

Such changes may increase costs, reduce liquidity, affect the viability of an investment strategy or reduce the value of investments.

22. Tax Risk

Investments may give rise to tax, reporting or withholding obligations in one or more jurisdictions.

The tax treatment of an investment may vary according to an investor's identity, tax residence, investment structure, asset class and applicable law and may change as a result of legislative developments or changes in regulatory interpretation.

Unicode does not provide tax advice through this website. Investors should seek independent tax advice based on their individual circumstances.

23. Fees and Transaction Costs

Any investment product, asset management arrangement or investment transaction may involve fees and costs. Such fees and costs will reduce the returns ultimately received by investors.

Strategies involving high portfolio turnover or high-frequency trading may incur significant transaction and execution costs.

24. Past and Simulated Performance

Past performance is not indicative of, and does not guarantee, future results. Historical performance may have been affected by prevailing market conditions, capital size, leverage, liquidity and other factors that may not be repeated.

Back-tested, simulated or hypothetical performance has inherent limitations. It is generally based on historical data and specific assumptions and may not fully reflect transaction costs, liquidity constraints, market impact, model changes or actual execution conditions.

Actual investment results may differ materially from any back-tested, simulated, targeted or expected results.

25. Limitations of Diversification and Risk Management

Asset allocation, portfolio diversification, stop-loss measures, hedging and other risk-management techniques may reduce certain risks but cannot guarantee profits or prevent losses.

During rapidly moving or extreme market conditions, risk-management measures may not operate as intended and may fail as a result of insufficient liquidity, price gaps, system delays or trading suspensions.

26. Third-Party Information

Unicode may refer to third-party data, research or opinions that it considers reliable. Unicode does not guarantee the accuracy, completeness or timeliness of such information.

Third-party information may not have been independently verified by Unicode and may change at any time.

27. No Guarantee and Independent Assessment

Unicode does not guarantee that any investment strategy, investment method, model, research, hedging arrangement or risk-management measure will achieve its intended purpose.

No person should make an investment decision solely on the basis of information contained on this website.

Before participating in any investment, investors should carefully review the applicable definitive legal documentation, make an independent assessment based on their financial circumstances, investment objectives, investment experience, risk tolerance and liquidity requirements, and seek independent investment, legal, tax and accounting advice where appropriate.