Version 1.3, valid from 3. November 2023

Before starting our services and investing, please read this document and carefully assess your individual situation in terms of financial status, investment goals, risk tolerance, etc. Please consider consulting a professional advisor if needed to better understand the risks related to investment.

All investment decisions you make regarding transactions in financial instruments while using our services are at your own discretion and risk. Fundvest does not make any investment recommendations nor provide any investment advice. All information available on our website, social media channels, and app is for informational purposes only and may not be considered as advice or recommendation.

Fundvest does not provide tax, accounting, or legal advice to its clients, and all investors are advised to consult with professional advisors regarding any potential obligations.

This document was prepared by Fundvest UAB which is a company established in Lithuania and licensed as a financial brokerage firm by the Bank of Lithuania. It contains information about the nature and risks of financial instruments that you may invest in while using our services. It may not explain all the risks or how the specific risks may affect you personally or the company you represent. If you have any doubts about our services and the specific financial instruments being appropriate for you or the company that you represent, please seek professional advice.

Investing is always related to risk, which may result in financial losses. This can happen because the value of the financial instruments you purchase may drop, leading to negative returns, making the transaction unprofitable or even of no value at all. We strongly encourage you to evaluate the characteristics of financial instruments and the related risks, taking into account at least but not only the below-listed factors related to you personally or the company you represent:

• financial status,
• previous investment experience,
• investment goals,
• investment period.

You should also consider other important factors and not engage in investing unless you understand the nature of the particular financial instrument and the extent of your exposure to the risk of financial loss.

When using our services you may invest in the following financial instruments (or part of them):

1. Stocks (shares): Units of ownership in companies. Shares traded on stock exchanges (e.g., New York Stock Exchange) can be purchased through our platform. If the company that issued the shares (issuer) earns a profit, part of the profit can be distributed to the owners of the shares (shareholders) in the form of dividends. The value of the shares issued is directly linked to the state of the underlying company.

2. ETFs (exchange-traded funds): Collective investment funds that are traded on stock exchanges. They may consist of various asset classes, such as shares, bonds, etc., ensuring greater diversification and potentially lower investment risk. ETFs are managed by professional investment management companies.

3. Fractional stocks (shares): A stock (share) accounting for less than one full share of equity in companies. Usually, owners have the right to receive dividends and voting rights in respect of the part of the stock (share) they have.

By investing in any of the above you or the company you represent risk not getting back the same amount as you originally invested. Additionally, please take into account other risks that are listed below.

Counterparty credit risk – the risk that you might incur losses if a counterparty against whom you have a credit exposure does not fulfill their financial obligations.

Country risk – the risk that the value of a financial instrument might change because of events or developments in a specific country or region.

Information risk – the risk that you might make a decision without having complete information about the financial instrument or when information is not available to you.

Interest rate risk – the risk that the market value of a financial instrument will change significantly due to changes in interest rates (especially applicable to bonds and bond-based ETFs).

Legal risk – the risk of financial instruments losing value or incurring additional expenses due to legal restrictions.

Liquidity risk – the risk that a financial instrument cannot be purchased or sold without significant additional expense due to a lack of liquidity in the market. One way to measure liquidity risk (not suitable for all cases) is by examining the difference between the best bid and best ask prices, either in absolute terms or as a percentage of the last traded price. It should be emphasized that in the case of fractional stocks (shares), liquidity risk is higher than in the case of full stocks (shares) or ETFs.

Market risk – the risk often referred to as “systematic risk,” is the risk of price changes due to the overall performance of relevant financial markets.

Price risk – refers to the risk of changes in the price of a relevant financial instrument.

Stocks (shares) are subject to all the general risks mentioned above, as well as some stock-specific risks, such as:

Rating risk – the risk that the value of a listed stock might change due to a change in the credit rating issued by one of the rating agencies.

Risk of (hostile) merger and acquisition – the risk that a company might be acquired or merged, resulting in the client’s ownership in the listed company being bought according to the announced terms and conditions.

ETFs are exposed to the general risks mentioned above, as well as some specific risks, such as:

Closure risk – the risk that the fund management company may decide to liquidate ETFs or merge them with another listed or unlisted product.

Management fee risk – the risk that the fund management company may change the management fee charged while managing the fund.

Fractional stocks (shares) are open to general risks mentioned above and also to the risks such as:

Fractional stocks (shares) risks – additionally to risks applicable to Stock (shares), there is risk that in some cases the right to receive dividends and voting rights can be restricted.