Risk Management is an integral component of PROVIN 's overall business and investment strategy.
Risk within our organization is managed by a combination of position and sector diversification, maximum exposure to individual investment instruments and sectors, hedging, and by working with reliable and financially secure business affiliates and trade counter-parties.

Diversification
As outlined in the portfolio section on this site our portfolio is broadly diversified therefore limiting the risk. The fund hold's a minimum of 100 different positions at any time split into 15-25 different sectors.   

Position Limits
The fund limits its maximum exposure to each individual position to 3 per cent of the portfolio at all times. Since positions are usually hedged the actual risk to the portfolio is less than 3 per cent, however.  

Sector Limits
Stock sectors are allocated a maximum of 7 per cent. As with individual positions the sector exposure is hedged decreasing risk for the overall portfolio.

Hedging Techniques
The portfolio, individual stocks and stock sectors are usually hedged through the use of derivatives, mostly futures and options. The use of over-the-counter derivatives is not typical, however, such instruments may be used if traditional hedging techniques are not available.  

Liquidity 
In order to limit risk that may arise from illiquidity when entering or exiting positions, the fund only invests in liquid securities and instruments. Positions can be established and exited without the risk that the purchase or sale significantly affects  the price of the underlying investment.

Counter-Parties
The fund's counter-parties are selected for the financial stability, technical capability, reputation, ability to execute orders, and other factors that may pose a risk to the fund and its investors. All individual brokers and brokerage firms undergo a due diligence check before the fund establishes a business relationship. Moreover,  PROVIN assures that the confidentiality of the fund's positions are assured.