Market risk

The risk that existing assets lose value as a result of a negative market development (interest rates, share prices and exchange rates, gold and commodity prices) and that a loss (in comparison with the purchase price at the time of investment) arises for the bearer of the risk.

Market risk is defined in the Insurance Supervision Act 2016 as the risk of loss or of adverse changes in the financial situation resulting, directly or indirectly, from fluctuations in the level and in the volatility of market prices of assets, liabilities and financial instruments.

The Investment Fund Act 2011 (InvFG 2011) defines market risk as the risk of loss for the UCITS resulting from fluctuations in the market value of positions in the UCITS portfolio that are attributable to changes in market variables such as interest rates, exchange rates, equity and commodity prices, or the creditworthiness of an issuer.