Risk Targeted Fund Families

In recent years, the development and launch of fund ranges that focus on, or target, risk has been gaining increasing traction in the adviser market.

The aim of these fund ranges is to offer investors consistent gradations of risk and return. The team and investment process are generally consistent through all funds, with the underlying asset allocation (strategic and tactical) constructed to meet the risk parameters agreed. Periodic rebalancing to ensure each fund remains within the stated risk parameters is also a common feature in these fund ranges.

The adherence to a risk measure, most commonly volatility or standard deviation, is inherent in most ranges although Defaqto acknowledges that volatility is by no means the only measure of risk and we are aware that fund managers will use numerous other pieces of performance and risk data to help construct portfolios.

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