What does a Risk Disclosure Statement (RDS) provide to investors?

A Risk Disclosure Statement (RDS) provides investors with a comprehensive outline of the risks associated with an investment. This document is crucial because it helps investors understand the various types of risks they may face, including market risk, credit risk, liquidity risk, and any other specific risks related to the investment in question. By clearly articulating these risks, the RDS aims to inform investors and encourage them to consider their risk tolerance and investment objectives before making decisions.

Providing this information is essential for fostering transparency and supporting informed decision-making. Investors can weigh the potential risks against their investment strategy and risk appetite, which is a vital part of responsible investing. Understanding the risks allows investors to better manage their expectations and prepare for the potential impacts on their investment outcomes. This focus on risk management is a fundamental aspect of the investment process, making the RDS a key document for investors in making sound financial decisions.