RISK
WARNINGS

What is volatility, and how might it affect my portfolio?

The performance of the markets and the companies themselves (and therefore your investment portfolio) can go up and down. Otherwise known as “volatility”. This could be impacted by a range of factors including changes in the macro environment (think interest rate increases) or much more industry specific (a new competitor or business model for example – think Blockbuster).

• Shares - as they ultimately represent ownership of a company, their value is based on how well that company is performing. Or specifically, how well the market thinks that the company is performing. They can be very volatile and lose value within short periods of time.
• ADRs & GDRs - can generally be more volatile than ordinary shares although we take measures to manage these risks on your behalf including carrying out detailed pre and post trade analysis, particularly around the price paid. This is because some ADRs/GDRs can more commonly be traded ‘off-exchange’ or OTC.

What is the liquidity of the investments in Sidekick's portfolios?

• Shares - We deal in fractional as well as whole shares. This means that we are able to construct a portfolio using lower overall investment sizes. Some of the larger companies(think Amazon or any other global brand) trade at very high share prices which can make ownership more expensive for individual investors. By trading in fractionals, we are able to buy less than a whole share up to 8 decimal points. There is a limited market for transferring fractional shares – this means that you’d have to sell any fractional positions before closing your account; otherwise, fractional shares function in exactly the same way as whole shares.
• ADRs & GDRs - Can generally be less liquid as some ADRs/GDRs are always traded OTC. We also take measures to manage these risks on your behalf and would not trade unless we could sell out of a position within 15 working days.

What execution venues do you use?

The majority of Sidekick’s trading takes place on global exchanges.

OTC is a general term for trading which takes place between a buyer and seller (bi-lateral) but which does not take place on a public exchange. Some companies trade OTC because they do not meet the requirements for a formal listing which, as you would expect, can be very strict. At Sidekick, we’re only trading in large publicly listed(large/international) companies – when their shares (or ADRs/GDRs derived from those shares) are traded OTC, this is not as risky as trading in unlisted companies.

What are some of the general risks of investing?

• A company in which you’re invested could go out of business, shareholders are likely to be way down the list of priority creditors and may not receive anything back at all.
• Are considered generally to be a higher risk asset class but with the potential for greater returns. This statement should be considered in relative terms as there is a huge difference between investing in Apple (a trillion dollar company, yes a trillion…) and a start-up with no customers or industry track record. As a reminder, Sidekick only invests in publicly listed companies.
• Just like companies and the stock market in general, the price of currency can go up and down; any global portfolio can be vulnerable to fluctuations in currency value.  Sidekick holds part of your cash holdings in USD for operational reasons; we consider this to be an adequate trade-off in order to retain the flexibility to be able to trade in or out of positions as part of our discretionary mandate.

How can I avoid risk?

All investing carries risk and if you’re not comfortable accepting any risk to your capital at all then investing might not be for you.

Sidekick does not provide investment advice, you should speak to an Independent Financial Advisor if you’re not sure whether or not to invest.

In very general terms, there are strategies which can help investors to avoid or at least manage risk. Some of the more common are:

1. Diversification – investing in companies which are uncorrelated by sector, country or     industry can mean that your investments are less exposed to developments which impact a particular part of the market. Put simply – eggs in multiple baskets…
2. Time horizon – the longer that capital can be invested for, the more likely that your investments can recover from market downturns.
3. Active management – at Sidekick, we passionately believe that having an expert manage your portfolio is important as it means that someone is dedicated to your investments, all of the time! Our team are absolutely geeky (sorry team!) about what they do – their mandate is to make money over the longer term and can make adjustments (known as re-balancing) when they believe it is in your best interests.

Do I need to pay tax on my investments?

The portfolios currently offered via Sidekick are not within a tax efficient wrapper.
The tax treatment of your investment depends on your individual circumstances and may be subject to change in future.

Do I need to pay tax on my investments?

All investing carries risk and if you’re not comfortable accepting any risk to your capital at all then investing might not be for you.

Do I receive dividends?

Ownership of shares in companies usually carries additional benefits. The most common are dividends and corporate actions.

Dividends - put simply, a company can choose (although is not obliged) to make a payment to its shareholders from the profits it has made. Such payments will be included within your regular statements from Sidekick.

Corporate Actions - these are decisions made by companies which are likely to have an impact on its shareholders. This can include, for example, an increase of the number of shares in circulation or a decision to merge with another company. They can take many forms and, in some instances, shareholders may need to decide on their preferred approach. Sidekick will take such decisions on your behalf.

What asset classes do the Sidekick managed portfolios contain?

Stocks

• This includes American Depository Receipts (ADRs) and Global Depository Receipts (GDRs).
• These are instruments (not musical…) or certificates issued by global banks which represent shares in an overseas company. They usually allow domestic investors to trade in shares of companies which would not otherwise be possible because of local exchange rules. The certificate represents ownership of an underlying company in a similar way to an ordinary share.
• Here at Sidekick, we don’t have an unlimited ability to invest in every single company in the world – we’re still building our asset universe with the help of selected partners with great reputations. We can, nevertheless, provide our customers with greater access to the companies which we do want to invest in via ADR/GDR structures. These were originally designed to reflect the performance of the underlying performance and, generally, they do although there can be some periodic divergence. We have safeguards in place to manage the risks associated with our trading in ADRs/GDRs – in principle, we want our customers to benefit from investing in what we think are the best global companies. The companies we are investing in via ADRs/GDRs are publicly listed although the ADRs/GDRs themselves do not have to be.

The portfolios may also invest in: cash and equivalent products.

This information is correct as at 23rd November 2023 and will be updated every time there is a material change to our portfolios.

Are there any restrictions on the investments within the Sidekick managed portfolios?

Yes, Sidekick does not invest in Tobacco manufacturers.

Flagship - this strategy has no geographical constraints and can invest in any sector or industry.

How is the performance of the Sidekick managed portfolios measures?

With reference to Sidekick’s chosen Benchmark which is the ‘Bloomberg Developed Market Large Mid Caps GBP’.

What is the time horizon for the Sidekick managed portfolios?

Sidekick’s managed equity portfolios are built for the long-term. Everyone’s circumstances are different but this should be at least 3 years. The longer that capital can be invested for, the more likely that investments can recover from market downturns.