This page describes the main risks of investing through Premium Capital Investment Ghana Limited. It is a general summary, not a complete list. Each specific product (a fund, a bond, a discretionary mandate) has its own offering document, term sheet, or mandate that contains additional risk information specific to that product. You should read those documents before investing.
If you do not understand a risk described here, ask us. Our advisers will explain it. If you still do not understand, do not invest.
The value of investments rises and falls with markets. Causes include changes in interest rates, inflation, growth, government policy, geopolitics, and investor sentiment. Even diversified portfolios can lose value, sometimes substantially, over short and medium time periods.
You may not get back what you invested. Some investments can lose all their value.
If the return on your investment is less than the rate of inflation, the real (inflation-adjusted) value of your money is falling, even if the nominal balance looks stable.
Some investments cannot be sold quickly, or can only be sold at a discount in stressed markets. Your ability to redeem from a fund or sell a bond may be restricted by the offering terms or by market conditions.
When interest rates rise, the price of existing fixed-income securities (bonds, notes) generally falls. Longer-dated securities are more sensitive to interest-rate changes than shorter-dated ones.
Inflation-linked bonds protect against inflation but can underperform if inflation falls. They have their own valuation complexities.
Tax laws and regulations can change. Tax outcomes depend on your individual circumstances. Investment returns shown are typically before tax. We do not provide tax advice; consult a qualified tax adviser.
Changes in laws or regulations (in Ghana or in any country relevant to your investments) may adversely affect the value or liquidity of your holdings or our ability to provide services.
Government securities carry the credit risk of the issuing government. While historically considered low-risk, this risk is real. The Ghanaian Domestic Debt Exchange Programme of 2022–2023 demonstrated that sovereign debt instruments can be subject to restructuring, with consequences for both yield and timing of principal repayment, and in some cases reduction of principal.
Government bond prices fall when market interest rates rise. If you sell before maturity, you may receive less than you paid.
When a treasury bill matures, you may have to reinvest at a lower yield if rates have fallen.
If inflation exceeds the bill or bond yield, your real return is negative.
Primary auction bids may be partially or fully unsuccessful. Settlement timing depends on Bank of Ghana auction calendars.
The Net Asset Value of a mutual fund unit can rise and fall. Past performance is not a reliable indicator of future returns.
A fund's risk profile reflects the assets it holds. Money market funds, while typically lower-risk, can still lose value if a holding defaults. Equity-oriented and balanced funds carry higher capital risk.
Some funds offer daily liquidity; others have notice periods or redemption windows. In stressed markets, fund managers may be forced to suspend redemptions or impose redemption gates to protect remaining investors.
Funds charge management fees, performance fees (where applicable), and operating expenses, all of which reduce net returns. Net returns shown are after these costs.
Some funds may have significant exposure to a small number of issuers, sectors, or geographies. This is disclosed in the fund's offering document.
Each fund we offer has a detailed offering document that explains its strategy, risks, fees, and historical performance. You should read this document before investing.
Share prices are volatile. Annual price swings of 30–50% are common in individual stocks, even in established markets.
A company's share price reflects its prospects. Poor management decisions, fraud, regulatory action, technological disruption, or changes in competition can permanently impair the value of an equity investment, sometimes to zero.
Even healthy companies can see their share prices fall during recessions, financial crises, or general market sell-offs.
Equities listed in foreign currencies expose you to exchange rate movements that can amplify or reduce your returns when measured in cedis.
Trading volumes on the Ghana Stock Exchange and Ghana Alternative Market can be thin. Selling a position may take time and may move the price against you.
Unlike government bonds, corporate bonds carry the credit risk of the company issuing them. If the company defaults, you may lose interest payments, principal, or both. Recovery in default can take years through legal processes.
Some corporate bonds are subordinated, meaning their holders are paid only after senior creditors in the event of insolvency. Subordinated bonds offer higher yields to compensate for this risk.
A portfolio of bonds from a single issuer or sector can suffer disproportionately if that issuer or sector deteriorates.
Some bonds can be redeemed by the issuer before their stated maturity, typically when interest rates fall. This forces you to reinvest at a less attractive rate.
Investments denominated in a foreign currency (USD, EUR, GBP) can fluctuate against the Ghanaian cedi. A strong cedi reduces the cedi value of foreign assets; a weak cedi increases it. The cedi has historically depreciated against major currencies, which has helped foreign-currency holdings, but this is not guaranteed.
Bank of Ghana exchange-control regulations affect how foreign currency can be held and transferred. Rules can change, and changes may affect your ability to repatriate or move funds.
Converting between currencies incurs spreads and fees that reduce returns.
Income or gains from investments held in Ghana may be taxable in your country of residence. The tax treatment of cross-border investments is complex. We do not provide tax advice in jurisdictions outside Ghana. Take advice from a qualified tax adviser in your home country before investing.
You may have obligations to report your Ghanaian investments to authorities in your home country (for example, FBAR reporting for US persons, the Common Reporting Standard for many countries).
If you are a US person (citizen, green-card holder, or US resident), your account is subject to FATCA reporting. We are required to provide certain information about US-person accounts to the Ghana Revenue Authority for transmission to the US Internal Revenue Service.
Funding from a foreign currency and converting back when you repatriate funds incurs spreads, transfer fees, and exposure to exchange rate movement at the time of conversion.
Market events may occur in time zones that delay your awareness or response. Make sure your contact details with us are current and that you nominate a relationship manager who can act on time-sensitive matters.
Under an advisory mandate, you make the final investment decisions. The risk of poor decisions, including failure to act on advice in time, rests with you.
Under a discretionary mandate, you authorise us to make investment decisions on your behalf within agreed limits. We exercise judgment, but our judgment can be wrong, and the resulting losses are yours.
A mandate can underperform if market conditions move against the strategy or style we follow. Long periods of underperformance are normal even for skilful managers.
Your mandate benchmark may not perfectly reflect what you want from the portfolio. Discuss this with us.
Investments may be settled or held through partner banks (Ecobank Ghana, Stanbic Bank Ghana, GCB Bank), custodians, the Central Securities Depository Ghana, and other counterparties. The failure of any of these counterparties could disrupt your investments. We perform due diligence on counterparties but cannot eliminate this risk.
Errors, technology failures, cyber-attacks, fraud, and natural events can disrupt our operations. We maintain controls and business-continuity arrangements but cannot guarantee uninterrupted service.
Trades fail to settle from time to time. Where this happens, your transaction may be delayed or repriced.
In market stress, several risks tend to materialise simultaneously: liquidity dries up, prices move sharply, correlations between asset classes increase (so diversification helps less), and operational systems come under strain. Recent reminders include the COVID-19 market crash of 2020 and the Ghanaian sovereign debt restructuring of 2022–2023. Investing means accepting that such periods will recur, that they are difficult to predict, and that your portfolio will be affected when they do.
Before we accept you as a client, we will ask you to complete a risk-profile questionnaire as part of our regulatory suitability obligations. This helps us match you to investments appropriate for your goals, time horizon, and tolerance for loss. The questionnaire is not exhaustive. Tell your relationship manager about any factor that affects your ability or willingness to bear investment risk.
If you misrepresent your circumstances, the suitability assessment may be wrong, and you may end up holding investments unsuitable for you.
If you have questions about any risk described here, speak to your relationship manager or contact customers@premiumcapitalgh.com. There are no naive questions about investment risk.
If you remain uncertain whether an investment is suitable for you, take independent financial advice before proceeding.