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3.1. RISK FACTORS
Investing in the RACE Special Oportunities Unit Fund (hereinafter the Fund) involves certain considerations in addition to the risks normally associated with making investments in securities. There can be no assurance that the Fund will achieve its investment objectives. The value of the Fund may go down as well as up and there can be no assurance that on redemption, or otherwise, investors will receive the amount originally invested. Accordingly, the Fund is only suitable for investment by investors who understand the risks involved and who are willing and able to withstand the loss of their investments. In particular, prospective investors should consider the following risks:

1. In General: There is no assurance that the Fund will meet its investment objective; investors could lose money by investing in the Fund. As with all mutual funds, an investment in the Fund is not insured or guaranteed by the Government of Bangladesh or any other government agency.
2. Market risk: Stock prices and Mutual Fund prices generally fluctuate because of the interplay of the various market forces that may affect a single issuer, industry or sector of the economy or may affect the market as a whole. The Fund may lose its value or experience a substantial loss on its investments due to such market volatility.
3. Price Risk: Stock market trends show that prices of many listed securities move in unpredictable directions, which may affect the value of the Fund. Depending on its exposure to such securities, the net asset value of units issued under this Fund can go up or down depending on various factors and forces affecting the capital markets. Moreover, there is no guarantee that the market price of unit of the Fund will fully reflect their underlying net asset values.
4. Issuer Risk: In addition to market and price risk, value of an individual security can, in addition, be subject to factors unique or specific to the issuer, including but not limited to management malfeasance, lack of accounting transparency, management performance, management decision to take on financial leverage. Such risk can develop in an unpredictable fashion and can only be partially mitigated, and sometimes not at all, through research or due diligence. To the degree that the Fund is exposed to a security whose value declines due to issuer risk, the Fund value may be impaired.
5. Asset Allocation Risk: Due to a very thin secondary debt market in Bangladesh, it would be difficult for the Fund Manager to swap between asset classes, if and when required. In addition, limited availability of money market instruments in the market implies that there are only few opportunities for short term or temporary investments for the Fund.
6. Lack of Diversification Risk: Due to small number of listed securities in both the stock exchanges, it may be difficult to invest the Fund’s assets in a widely diversified portfolio.
7. Regulatory Risk: Every Fund approved by the BSEC contains the “saving clause” that should any regulations or interpretations of regulations change then the constitutive documents of the fund shall be considered changed; this implies that there is a risk inherent in investment in the fund that in future due to regulatory changes the terms and conditions inherent in the fund may change and impact the investment returns.
8. Liquidation Risk: Market conditions and investment allocation may impact on the ability to sell securities during periods of market volatility. The Fund may not be able to sell securities or instruments at the appropriate price and time.
9. Dividend Risk: If the companies wherein the Fund will be invested fail to pay expected dividend, it may affect the overall returns of the Fund.
10. Investment Strategy Risk: The Fund is subject to management strategy risk because it is an actively managed investment portfolio. The AMC will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these techniques and analyses will produce the desired results.
11. Socio-Political & Natural Disaster Risk: Uncertainties resulting from political and social instability may affect the value of the Fund’s Assets. In addition, adverse natural climatic condition may hamper the performance of the Fund.
12. Redemption Risk: In the event of a very large number of repurchase requests, there may be delays in the delivery of the payment.