– Hedge funds are not appropriate for all investors. Hedge funds can be speculative and may involve a high degree of risk, above and beyond those associated with traditional asset classes. An investor could lose all or a substantial amount of their investment. Investors should consider hedge funds as a supplement to an overall investment strategy.
– Hedge funds are not mutual funds and are not subject to the same regulatory requirements as mutual funds. Investments in hedge funds are not federally insured by the Federal Deposit Insurance Corporation or any other government agency. Investments in hedge funds are not deposits or obligations of any bank or insured depository institution.
– Hedge funds may use leverage and other speculative investment practices that may increase the risk of investment loss. Hedge funds may have performance that is volatile. Hedge funds may own investments that are illiquid.
-There is no secondary market for the investor’s interest in the fund and none is expected to develop. There may be restrictions on redeeming interests in the fund.
-Hedge fund’s fees and expenses may offset their trading profits.
-Hedge fund managers generally have total trading authority over the fund. The use of a single advisor applying generally similar trading programs could result in a lack of diversification and, consequentially, higher risk.
-Hedge funds may involve complex tax strategies and there may be delays in distributing tax information to investors
-Some hedge funds can execute a substantial portion of the trades executed for the fund on a foreign exchange.
-The amount of disclosure received may vary by manager. Transparency varies by manager. No notice of variations among managers will be given to client and the process described herein may be changed without notice. Not all of manager’s representations are corroborated. Business judgment is applied when necessary. Manager evaluation and monitoring is a process consisting of quantitative and qualitative elements. The process is a combination of “science and art“ (i.e., quantitative analysis and business experience). Manager evaluation process may vary from time to time without giving notice or seeking consent. The evaluation process is not directed at providing assurances with respect to internal controls, nor to the detection of fraud, errors, or illegal acts. The evaluation process consists of gathering quantitative and qualitative information from multiple sources, including the manager themselves. The accuracy and completeness of such information cannot be relied upon to make investment decisions. ClaritySpring Securities LLC does not provide trading or investment advice, recommendations or endorsements of any kind.