Frequently Asked Questions - Risk

1. Tax risk
 
The tax treatment of holders will vary depending on the tax status of the holder in question.
Investors should seek professional tax advice in this regard.
 
2. Secondary trading risk
 
  • There is no guarantee that a liquid secondary market in Property Index Tracker participatory interests will develop.
  • Property Index Tracker participatory interests may trade at a discount or premium to their NAV.
  • There is no guarantee that the Property Index Tracker participatory interests will remain listed on the JSE.
  • Any termination of listing would be subject to the JSE Listings Requirements.
 
3. Index Risk
 
  • There is no guarantee that the Index will continue to be calculated in the manner in which it is currently calculated.
  • The past performance of the Index is not necessarily an indication of future performance.
  • Neither the Index licensor, nor the manager, the trustee or Java Capital:
    • guarantee the accuracy and/or the completeness of the Index or any data included in the Index;
    • will bear any liability for any errors, omissions or interruptions in the Index;
    • warrant or make any representation as to the results to be obtained by the Property Index Tracker portfolio or any investor in Property Index Tracker from the use of the Index or any data included in the Index; or
    • warrant the ability of any portfolio to track any applicable Index.
  • Given that the Index was created as a measure of market performance and not for the purpose of trading in Property Index Tracker participatory interests, the Index may be adjusted by the Index licensor without regard to the interests of holders of participatory interests, but solely with a view to the original purpose of the Index.
  • If for any reason the Index ceases to exist then:
    • if there is, in the reasonable opinion of the manager, a successor index composed and weighted according to substantially similar criteria as are applied in respect of the Index, the portfolio of securities housed in the Property Index Tracker portfolio shall be adjusted to track the successor index;
    • if there is not, in the reasonable opinion of the manager, an appropriate successor to the Index, then the Property Index Tracker portfolio will be wound up in accordance with the requirements of the JSE and the Registrar
  • Property Index Tracker participatory interests are not in any way sponsored, endorsed, sold or promoted by the Index licensor, which makes no warranty or representation whatsoever, express or implied, either as to the results to be obtained from the use of the Index and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index licensor shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and/or its calculation and shall be under no obligation to advise any person of any error therein. The Indices utilised are trade marks and are used by the manager under licence.
 
4. Regulatory, Economic and Political Risk
 
The performance of the fund may be affected by changes in economic and market conditions, political developments or changes in government policies, changes in legal, exchange control, regulatory and tax requirements.
 
5. Securities lending risk
 
The manager of Property Index Tracker may (but is not obliged to) engage in securities lending (on the terms stipulated in the Property Index Tracker Deed). If the Property Index Tracker portfolio engages in such securities lending transactions and a borrower of securities fails to perform its obligations, then Property Index Tracker may be unable to recover the loaned securities. This risk is reduced however, given the obligation on the manager to obtain collateral, the limits imposed in terms of the Property Index Tracker Deed and the institutional nature of the borrowers.
 
6. Investment in derivatives
 
The manager of Property Index Tracker may invest in derivatives from time to time. While an investment in derivatives will only be employed within the investment restrictions stipulated in the Property Index Tracker Deed and the Act, the following risks may be associated with such an investment:
  1. the time-limited rights acquired can lapse or diminish in value;
  2. the risk of loss may be unquantifiable;
  3. transactions by means of which the risks are to be eliminated or reduced may be impossible to conclude or else only at a loss-inducing price.