Investment Risk

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Abstract

Investment risk refers to the potential for a negative performance of invested assets, either onchain or traditional. Given the volatile nature of alternative assets (including cryptocurrencies and other onchain assets), price changes (AUM changes) are not out of the question and should be expected to some degree, and therefore shall be planned for.

This document separates investment risk into two categories: traditional asset investment risk and onchain asset investment risk.

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Policy

Endaoment recognizes the inherent volatility and risk associated with various asset classes. We commit to actively managing and mitigating these investment risks through a comprehensive strategy that includes conducting market research, employing diversified investment approaches, and utilizing risk assessment tools to monitor and adjust portfolio exposure as necessary. Endaoment aims to balance the pursuit of growth with the need for risk control, ensuring that investment decisions align with the financial objectives and risk tolerance of our Board of Directors according to our Investment Policy. Regular financial reviews and adjustments will be made in response to evolving market conditions and investment performance.

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Scope and Applicability

This policy applied to all Endaoment employees, contractors, board members, and those acting on behalf of Endaoment in any capacity. Non-compliance with this policy may lead to disciplinary action up to and including termination/removal. Should there be a conflict of law, the more stringent of either this policy or the applicable law will be applied.

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Operational Controls + Testing

Internal controls will be monitored and/or tested on a periodic basis determined by risk. Monitoring and testing outcomes will be used to inform the continuous improvement of internal controls in order to appropriately mitigate risk.

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Training

All Endaoment employees will receive training on Legal Compliance + Regulatory Risk to ensure policy continuity and application. New hires will be trained within their first 60 days, and mandatory incumbent trainings will be conducted bi-annually with all current employees.

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Governance

This policy will be reviewed by the executive team and updated semi-annually to ensure it remains up-to-date. Escalation of any questions, concerns, or requests for exceptions regarding this policy must be made to the Endaoment executive team and approved unanimously.