Managing Risk in the Funds
We evaluate the economic, investment and other risks being taken within each fund. We may select investments on the basis of their specific investment credentials but also with the objective of mitigating the impact of identified individual risks on the fund.
Each time we make an investment decision and also at least once a month we run the volatility calculations to ensure that the expected volatility of each fund remains at an appropriate level.
We manage the ‘expected volatility’ of each fund. This is calculated by taking account of the expected volatility in each asset class that we use (based on their historical volatility) which gives us an overall expected volatility of the fund.
Regular Risk Review
In addition we use a specialist external company (Distribution Technology) to review the funds every quarter and to confirm our assessment of their expected volatility.
Our Approach to Managing Risk in the Funds
Investment Director David Appleton outlines our approach to managing risk in the Funds.