Investing in mutual funds always carries risk, and it’s important for investors to be fully aware of these potential downsides. Jackson Square Partners, while offering various investment opportunities, emphasizes the importance of understanding these risks before making any investment decisions. This article breaks down the key risks associated with mutual fund investing, particularly as they relate to Jackson Square Partners funds.
Mutual funds, by their nature, involve market risk, meaning that the value of your investment can fluctuate based on overall market conditions. Furthermore, principal loss is a possibility in any investment, and mutual funds are no exception. Jackson Square Partners funds are non-diversified, which means they may concentrate their investments in a smaller number of holdings compared to a diversified fund. This concentration can lead to greater volatility, as the fund’s performance becomes more dependent on the performance of those specific holdings. If one of these holdings underperforms, it can have a significant negative impact on the entire fund.
Investing in small- and mid-capitalization companies, which Jackson Square Partners funds may do, also presents specific risks. These companies often have less liquidity and experience greater price volatility compared to larger, more established companies. This means it might be harder to sell these investments quickly, and their prices can change more dramatically in shorter periods.
Jackson Square Partners funds may also invest in foreign securities, which introduces another layer of risk. International investments are subject to greater volatility due to political and economic factors, currency fluctuations, and differences in accounting standards. These risks are amplified in emerging and frontier markets, which have less developed economies and capital markets, making them inherently more unpredictable. Frontier markets, in particular, carry magnified risks compared to traditional emerging markets due to their smaller economies and less mature financial systems.
Real Estate Investment Trusts (REITs) can also be part of Jackson Square Partners’ investment strategy. Investing in REITs involves risks specific to the real estate sector, such as declines in property values and increased vulnerability to changes in economic conditions or regulations.
Currency risk is another important factor when investing in international securities through Jackson Square Partners funds. When funds trade on foreign exchanges, transactions occur in local currencies. Fluctuations in exchange rates between the U.S. dollar and these foreign currencies can impact the value of the fund’s holdings and, consequently, your investment. Economic policies and currency controls in other countries can also negatively affect currency valuations for U.S. investors.
Liquidity risk is a general concern across all investments. At times, the market for certain securities or types of securities held by Jackson Square Partners funds may become less liquid or even illiquid. This can make it challenging to sell investments at a desired price or when needed.
It’s crucial to remember that Jackson Square Partners Funds are exclusively offered to United States residents. The information provided about these funds is intended solely for individuals within the U.S. Nothing on any website or document should be interpreted as a solicitation to buy or an offer to sell shares of any Jackson Square Fund in any jurisdiction where such an offer would be unlawful under securities laws.
The specific securities mentioned in any context are for illustrative purposes and do not represent all fund holdings. It should not be assumed that these identified securities were or will be profitable. For a complete list of holdings, investors can request this information directly. Fund holdings and sector allocations are subject to change, and these details should not be considered as recommendations to buy or sell any particular security. Generally, complete fund holdings are available 10 business days after the end of each quarter.
To gain a deeper understanding of Jackson Square Partners funds, investors are encouraged to request a free hard copy of the prospectus by calling 844.577.3863. Carefully reading and considering the prospectus before investing is essential. The prospectus contains detailed information about the fund’s investment objectives, risks, charges, and expenses, all of which should be thoroughly reviewed before making an investment decision with Jackson Square Partners.
Jackson Square Partners, LLC acts as the investment advisor to the Jackson Square Partners Funds. Distribution services are provided by Quasar Distributors, LLC.
