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Our risk profile spectrum

We have devised the risk profile spectrum, which defines a number of risk profiles and their features to help us build portfolios for each risk profile.

Each portfolio targets a different level of risk. At the moment, we offer portfolios for three risk categories: low to medium risk, medium risk and medium to high risk. We do not offer portfolios at the lower or upper end of the risk spectrum.

The risk profile categories are as follows:

No investment risk

You do not wish to take any investment risk. Your priority is to safeguard your investment capital. You are prepared to sacrifice higher returns for peace of mind. You prefer knowing that your capital is safe; therefore, this means that your money will be held in cash, bank accounts or national savings. UK banks and building societies account holders are covered by the Financial Services Compensation Scheme (FSCS) up to certain limits, so you'll likely be made whole even if the financial institution fails. You would prefer no investments in stock markets whatsoever. You are unlikely to have much experience of investment beyond bank accounts. You can take a long time to make up your mind on investment matters and will usually suffer from severe regret when your investment decisions turn out badly. You understand that your money may not keep pace with inflation, or that you may fall short of your investment goal. Your capital is safe, however the growth potential is low.

No portfolio available.

Extremely low risk

You tend to prefer investments with low risk of a decline in value. You are more interested in preserving the value of your investment than receiving a return on your capital. You are prepared to accept only a very limited risk of loss to your capital. As a result, you will have over 90% of your money invested in short term money market instruments with selected exposure to bonds in particular and other assets including property, commodities or equities. You are prepared to take very small level of risk with your capital for the prospect of modest growth than that obtainable from cash in bank account. The level of return is expected to be slightly better than if you had kept the money in a bank account, however, you accept that inflation may erode purchasing power of your capital overtime, particularly if inflation is high.

No portfolio available.

Low risk

You are conservative with your investments. You tend to prefer investments with lower risk of a decline in value. However, you do recognise that in order to achieve higher returns, some risk must be incurred and you are prepared to tolerate some fluctuation and volatility in your investment. You would like to maintain the real value of your investments against inflation. You are likely to be concerned about the possibility of losing money on your investments, but you do not want to completely ignore the possibility of making higher returns than are offered by bank accounts and short term money market instruments. As a result, you will have up to 90% of your money invested predominately in bonds with sizable proportion in short term money market instruments. Up to 10% may be invested in property, commodities or equities. You are not comfortable with significant investments in portfolio which might put your capital at risk.

No portfolio available.

Low to medium risk

You are relatively cautious with your investments. You will have low to moderate levels of knowledge about investment matters and quite limited interest in keeping up to date with investment issues. In general, you are uncomfortable taking risk with your investments, but can be willing to do so to a limited extent. You realise that risky investments are likely to be better for longer term returns. You want to try to achieve a reasonable return, and are prepared to accept some risk in doing so. As a result, you will have your money invested predominately in bonds with a reasonable proportion in short term money market instruments. A sizable proportion of the portfolio, up to 30-40% may be invested predominantely in equities, whilst including exposure to other assets like property and commodities. You are prepared to tolerate relatively modest yet frequent fluctuations in value.

Learn about Low to Medium risk - Cautious portfolio

Medium risk

You are balanced in your attitude towards risk. You don’t seek risky investments but you don't avoid them either. You understand that you have to take investment risk in order to be able to meet your long term goals. You are likely to be willing to take risk with part of your assets.You are prepared to accept fluctuations in the value of your investments to try and achieve better long term returns. You are prepared to accept small losses, particularly in the short term, to gain higher returns than simply investing in low or medium risk investments. You may have up to half of your portfolio invested in a balanced mix of lower and medium-risk investments such as bonds and property and the other half invested in higher-risk investments such as equities. You are prepared to tolerate frequent and at times significant fluctuations in value.

Learn about Medium risk - Balanced portfolio

Medium to high risk

You have above average tolerance to risk. You are relatively comfortable with investment risk and willing to take risk with a sizable proportion of your assets. You aim for higher long term returns and understand that this can also mean some sustained periods of poorer performance. You are willing to place reasonable emphasis on growth investments and are aware that these are liable to fluctuate in value. As a result, your porfolio will have higher weighting towards equities and very low levels towards bond or other asset classes. Typically, equities may compose over 80% of your investment portfolio. You are prepared to accept significant fluctuation in value to try and achieve better long term returns.

Learn about Medium to high risk - Growth portfolio

High risk

You are very comfortable with investment risk. You aim for high long term investment returns and do not overly worry about periods of poorer performance in the short to medium term. Your portfolio is likely to have high market volatility and carries higher risk of potential loss of capital. You would like to take advantage of equity investments with the prospect of good long term returns. As a result, your portfolio will exclusively invest in equities. Your portfolio can be subject to the full extent and frequency of stock market fluctuations.

No portfolio available.

Extremely high risk

You are totally insensitive to risk. You are focussed on obtaining very high returns and are less concerned with the potential larger losses. You have firm views on investment and will make up your mind on investment matters quickly. You do not suffer from regret to any great extent and can accept occasional poor investment outcomes without much difficulty. A portfolio within this profile would consist speculative investments such as futures, options, CFDs, spread betting and so on. Given the nature of such investments, the possible of losing more than your initial capital is ever present. You are usually willing to take risk with all of your assets. The risk to capital is extreme and the growth potential is at a maximum.

No portfolio available.


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