Risk Oversight

All companies, including funds, incur risk as a part of doing business. To achieve investment returns, a fund must incur investment risks. The risk of loss arising from daily operations is an unavoidable byproduct of any business, including the fund business.

Fund advisers have long been responsible for managing their funds’ risks. An adviser seeks to optimize investment risk to produce the best risk/reward return for a fund relative to the fund’s investment objectives and risk profile, and the adviser and other service providers manage the operational risks associated with the services they provide to the fund. Fund boards, consistent with their general oversight responsibilities, oversee those activities.