The popularity of risk-rated funds has surged as RDR approaches and investors search for greater certainty in tough markets, but research has revealed vehicles sitting within the same risk grade can perform very differently.
Many fund providers have either launched risk-graded ranges or have applied risk band overlays to existing products. However, as there is no consistent standard for volatility within the risk bands, these funds could produce wildly different results for investors. Defaqto has this month published a report on risk-rated portfolios which reveals some striking data on the risk profiles of leading funds in the space. The research firm looked at a sample of funds, each with a risk rating of five, and compared the volatility range of each product. It found volatility in the funds, which fo...
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