Risk of Loss: The potential for profit is accompanied by the possibility of loss. Investors must be prepared to lose all or substantially all of their investment.
Risks of Quantitative Investment Management: There can be no assurance that the Firm's investment strategies will be successfully implemented or provide the intended results as unexpected factors may dominate the market during certain periods. Quantitative investing relies on data, hardware, and software for implementation of the investment process and its business operations. To the extent data is incorrect, not available or stale, or software/hardware does not function as planned, results could deviate from expectations, which may negatively affect investment performance.
Risk of Errors: The nature of complex quantitative investment management processes is such that errors may be extremely hard to detect, and in some cases an error can go undetected for an extended period of time. Furthermore, each component of the investment process has elements that present the possibility for human error. While the Firm has a number of controls designed to assure that the account construction process operates as intended, analytical errors, software errors, development errors, and implementation errors, as well as data errors are inherent risks.
Foreign Securities and Currencies Risks: Investments in foreign securities involve additional expenses and are subject to additional risks including, currency fluctuations, political and economic uncertainty, increased volatility and the potential for inflation, lower liquidity and differing financial and information reporting standards, all of which are magnified in less developed and emerging markets. The strategy does not hedge foreign currency risk.
Strategies that Short: Short positions involve the risk that losses may be exaggerated, potentially losing more money than the actual cost of the investment, especially in the case of leveraged short positions. Also, there is the risk that the third party to the short position may fail to honor its contract terms, causing a loss to the portfolio.
Market Disruptions and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors. Such disruptions could lead to increased market volatility, reduced liquidity in the securities markets, or significant negative impacts on issuers and the securities markets.
Responsible Investing Risk: Applying socially responsible investment constraints limit the number of investment opportunities available, and as a result, portfolio investment returns may differ and even underperform portfolios that are not subject to such constraints. Furthermore, the Firm’s proprietary scoring methodology used to identify companies better managing their ESG risks is dependent upon information and data that may be incomplete, inaccurate, or unavailable, which could cause the Firm to incorrectly assess a company’s ESG performance. Sustainability considerations of an issuer may not operate as expected when considering ESG issues. Accounts are subject to ESG-related risks, some of which are not captured by the Firm's investment process.
Systems Disruptions and Cybersecurity Risks: The operations of the Firm, its counterparties, its service providers, financial market operators, and security issuers are dependent on technology, information, and communication systems. A failure or disruption of any such system or a security breach or cyberattack could significantly disrupt operations, potentially resulting in financial losses to an account, a significant disruption to the Firm’s business operations, and create impediments to trading and communications.