How is the Risk Level calculated for Flexible Portfolios?
The Risk Level is a measure of risk, expressed as a percentage, whereby in any given year, there is a 1% probability that you’ll lose more than this percentage in terms of the portfolio’s value.
These are the Risk Level brackets for Flexible Portfolios.
- Very Conservative: Up to 7%
- Conservative: 8-13%
- Moderate: 14-19%
- Balanced: 20-25%
- Aggressive: 26-32%
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Very aggressive: 33% and more
For example, if a Flexible Portfolio has a Moderate Risk Level, it means that there is a 1% chance that the portfolio will lose more than 19% of its value in any given year.
Generally, a higher Risk Level percentage denotes a more risky portfolio, and thus should be accompanied with a longer term investment horizon.
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