Portfolio review - Risk Profile 9 (Very High)
Further to the most recent investment review, we have made the following adjustments to the City House Investors Discretionary Managed Portfolio Service Very High Portfolio.
In line with our portfolio investment policy statement we have made changes to the Very High Risk portfolio this month. Funds have been added or removed, because the overall performance and risk profile meets, or fails to meet, the criteria of the City House Investors managed portfolio service fund selection model. Additionally we have adjusted the portfolio asset allocation as appropriate to current market conditions.
Your actual portfolio allocation may vary slightly from the details on this page, depending on fund availability within the platform that you are invested in. details of the exact holdings and adjustments within your portfolio are provided to you via your quarterly investment report.
Methodology
This portfolio will be managed using a strategic asset allocation model that is in line with the risk mandate and the time horizon of the portfolio. We may adjust the asset allocation on an ongoing basis with a tactical overlay, this will increase or decrease allocation to certain asset classes based on our view of potential opportunities within the various sectors.
We will populate the selected asset classes within your portfolio with mix of index tracking funds and/or actively managed funds, depending on our view of potential growth and risk of available funds. We will review the funds that you are invested in periodically as we feel is appropriate.
Portfolio revised allocation (%)
Portfolio historic allocation (%)
Risk Profile 9 of 10 – Very high
Every investment can be described in terms of the amount of risk associated with it. Higher-risk investments tend to experience greater volatility, which means they are likely to go up and down in value more often and by larger amounts than lower-risk investments. In return, higher-risk investments have the potential to produce higher returns over the long term, although this is not guaranteed.
For example, investments such as cash deposits and bonds issued by the UK Government (known as gilts) are considered low risk. Property, corporate bonds issued by UK companies as well as other types of global bonds issued by overseas governments and companies are considered medium risk. In the case of global bonds, generally those which pay a higher income are riskier than those which pay a lower income level. Shares in companies in the UK and other developed markets are considered high risk, while shares from companies in emerging markets are considered very high risk. You can reduce the overall risk in a portfolio by using ‘diversification’ – in other words, spreading your money across different investments. By doing this, you can match your overall portfolio to the level of risk that is right for you.
It’s important that your investment portfolio matches your willingness and ability to take investment risk. A ‘very high’ risk profile shows that you are willing and able to take a very high level of risk with your investments. A portfolio invested to match this risk profile is highly likely to experience both significant rises and falls in value. So although there is very strong potential for returns from your investment to go above the rate of inflation (in other words, the rate at which the prices of goods and services rise), you also need to accept that your investment is very likely to fall in value from time to time, particularly in the short term.
A portfolio for this risk profile is most likely to contain high- and very-high-risk investments, such as UK, overseas developed and emerging market shares. Always check that you are comfortable with the investments that are included in your chosen portfolio.