Why invest using ADRHs?
Global Diversification is important
Savvy investors are well aware of the benefits of global investing. One of the primary ways that Americans invest beyond their borders is through American Depositary Receipts (ADRs). ADRs are a 100-year-old financial innovation that provide a simple way for investors to access shares of global blue-chip companies like Toyota Motor.
Embedded currency hedge mitigates exchange rate risk
What many American investors may not realize is that even though ADRs (i.e., Toyota Motor) trade in US Dollars, they come with an additional risk – fluctuations in foreign currency (i.e., Yen). To put it simply, the Toyota Motor ADR provides investors with exposure to: (1) the performance of the Toyota Motor shares on the Nikkei Stock Exchange; PLUS (2) the performance of the Yen (vs. the US Dollar). Providing a currency hedge mitigates investors exchange rate risk.
Cost-effective and easy to access for all investors
Until now, currency hedging programs have only been accessible to sophisticated institutional investors. ADRHs are exchanged-traded and as such can be bought or sold like an ordinary share, ADR or ETF. Therefore, ADRHs give all investors simple and cost-effective access to the world’s largest companies while mitigating exchange rate risk.
Global expansion of a proven investment
In 2021, Canadian Imperial Bank of Commerce (CIBC) pioneered currency-hedged Depositary Receipts (CDRs). Investor adoption has been strong and there are over 60 CDRs listed in Canada with more than $50billion in assets traded since their creation. Following the success of CDRs, Precidian Investments worked with CIBC to create a new investment product called ADRhedgedTM Securities (ADRH), a currency-hedged Depositary Receipt for Americans.
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Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call(844) 954-5333 or visit our website at www.adrhedged.com. Read the prospectus or summary prospectus carefully before investing. As with any investment, you could lose all or part of your investment in the Series, and the Series performance could trail that of other investments.
Market Risk. The prices of the securities in the Series are subject to the risk associated with investing in the stock market, including sudden and unpredictable drops in value. An investment in the Series may lose money.
Currency Hedging Risk. Because changes in foreign currency exchange rates affect the value of ADRs, the Series enters into the Currency Hedge Contract in order to seek to minimize the impact of fluctuations in the exchange rate between the U.S. dollar and the Local Currency. While this approach is designed to minimize the impact of currency fluctuations on Series returns, it does not necessarily eliminate the Series exposure to the Local Currency. Currency hedges are sometimes subject to imperfect matching between the Currency Hedge Contract and the currencies that the contract intends to hedge, and there can be no assurance that the Currency Hedge Contract will be effective. The return of the Currency Hedge Contract will not perfectly offset the actual fluctuations between the Local Currency and the U.S.
Currency Swap Risk. In order to hedge currency risk, the Series enters into a Currency Hedge Contract. The Currency Hedge Contract is subject to market risk, risk of default by the other party to the transaction, known as “counterparty risk,” and risk of imperfect correlation between profit or loss on the Currency Hedge Contract and the underlying currency exchange rate
Issuer Concentration Risk. Because the Series only invests in the ADRs of the Company and the Currency Hedge Contract, the Series may be adversely affected by the performance of the Company, subject to increased price volatility and more susceptible to adverse economic, market, political or regulatory occurrences affecting the Company or industry.
Foreign Market Risk. Because non-U.S. exchanges may be open on days when the Series does not price its Shares, the value of the underlying securities of the ADRs in the Series portfolio may change on days when Shareholders will not be able to purchase or sell the Series Shares, regardless of whether there is an active U.S. market for Shares.
Non-Diversification Risk. The Series is non-diversified and holds Portfolio Securities of only one particular issuer. As a result, the Series may have greater volatility than other diversified funds
Management Risk. The Series is subject to the risk that the Manager’s investment management strategy, the implementation of which is subject to a number of constraints, may not produce the intended results.
New Series Risk. As of the date of this prospectus, the Series has no operating history and currently has fewer assets than larger funds.Like other new funds, large inflows and outflows may impact the Series market exposure for limited periods of time. This impact maybe positive or negative, depending on the direction of market movement during the period affected.
Distributor: Foreside Fund Services, LLC