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It is important to remember that past performance should not be taken as a guide to the future and dividend growth is not guaranteed. In addition, the value of your shares in Temple Bar and the income from them can fall as well as rise and you may lose money.
Risk level
As a broad-based UK fund mainly investing in larger companies Temple Bar might be regarded as "medium" risk, in a range where gilt and corporate bonds would be "low" risk and international equities would be "high" risk.
The main risks which we believe are faced by Temple Bar investors are as follows:
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Price risk |
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Market risk arises mainly from uncertainty about future prices of financial instruments. It represents the potential loss the company might suffer through holding market positions in the face of price movements. There are a series of investment parameters, which are reviewed by the Board on a regular basis, designed to limit the risk inherent in managing a portfolio of investments. |
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Interest rate risk |
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Temple Bar finances its operations through retained profits including realised and unrealised capital profits, and additional financing is obtained through the two debenture stocks on issue, on which interest is paid at a fixed rate. |
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Liquidity risk |
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Temple Bar’s assets comprise mainly of readily realisable securities, which can be sold to meet funding commitments if necessary. Short term flexibility is achieved through the use of cash balances and short term bank deposits. |
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Gearing risk |
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Temple Bar currently does borrow money in order to increase its investment in the stock market. This can help to increase the rate of growth of the fund but also cause losses to be magnified. |
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