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Investment risk profile

Investment strategy and returns

All investments are subject to risk and their value will fluctuate due to the performance of financial markets and the activities of investment managers.

Investment returns can also be influenced by other factors on a local or global scale, like economic conditions, interest rate movements, government policy and environmental or technological factors.

Your return from a managed investment is measured by its change in capital value over time and the income distributions you receive.

There are two broad categories of investments – growth assets and defensive assets.

  • Growth assets include shares and property and these generally have the potential to earn higher returns but can carry higher risk over the short term.
  • Defensive assets include cash, fixed interest and mortgages provide a lower chance of capital loss but generally earn a lower return.

By diversifying your investments and investing for an appropriate time frame you may reduce risk.

Investment risk profile

Your risk profile

In setting up an investment portfolio suitable for you, your financial adviser will ask you a series of questions about your financial and lifestyle goals.

Using this information, plus details of your current assets, liabilities and income, your adviser can determine what level of risk or exposure you are prepared to tolerate in relation to fluctuations in the marketplace - and the level that makes sense for your stage in life.

From this, an appropriate mix of assets can be allocated to your investment portfolio.

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