Risk Ratings

The Research Risk Rating Scale is designed to order investments by the potential to disappoint. This is a number based scale with ratings assigned to individual funds, not to ranges or sectors. Risk Ratings are determined by various measures of volatility overlaid with a qualitative check.

The 1-10 Research Risk Ratings are listed below. The ‘Typical Investment Types' listed are for guidance only, as explained above risk ratings are fund dependent and there are likely to be variations in each category.

Typical Investment Types	Risk Rating
Cash Deposits (includes bank/building society accounts and most NS&I products)	1
Cash Funds Gilt Funds Guaranteed and Protected Funds UK Corporate Bond Funds Global Bond Funds	2-3
High Yield Corporate Bond Funds Distribution Funds UK Property Funds (physical)* Cautious Managed Funds	4-5
Balanced Managed Funds UK Equity Funds (mainstream) Active Managed Funds	6-7
Global Growth Funds European Funds (mainstream) North American Funds (mainstream) UK Equity Funds (specialist) UK Smaller Companies Funds European Smaller Companies Funds North American Smaller Companies Funds Japanese Funds (mainstream) Asia Pacific Funds Property Funds (equity / REITs)* Specialist Funds (narrow themes)	8-9
Technology and Telecoms Funds Emerging Markets Funds	10

Points To Note

* Property Funds

Physical Property relates to collective investment funds investing in physical property, usually commercial buildings. This is substantially different to funds that invest in the shares of property companies and REIT based funds, which are significantly riskier.

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