Risk profile
Get the right balance between risk and return

Choosing the right managed fund doesn't simply mean finding the fund most likely to deliver the highest returns. Not only is that hard to do — remember, past performance is no guarantee of future performance — it doesn't take risk into account. After all, high growth investments generally tend to come with a higher level of risk.

That means you need to find the right balance between risk and return for your individual situation. There are two key factors to take into account:

  • Your investment time-frame. The longer you have to invest, the more time you have to ride out the ups and downs of high growth investments like shares. For example, if you're young and building wealth for the long-term, you may be willing to endure some short-term losses if they could lead to bigger gains in the future.
  • Your personal investment attitude. Only you can truly understand how much risk you're comfortable with. If even a temporary drop in your investment would cause you to lose sleep, then you may be better off choosing a lower risk investment, even if it limits your potential returns.

After choosing a profile, you can search for managed funds with an asset allocation to match.

Choosing a risk profile

So what's your risk profile? Here are four typical profiles to choose from:

Conservative Balanced Growth High Growth
Suggested time horizon 2–3 years 4–5 years 6 years + 8 years +
Estimated lowest portfolio return -0.03 -0.06 -0.1 -0.15
Estimated highest portfolio return 0.18 0.26 0.36 0.45
Estimated chance of negative return year 1 in 18 1 in 13 1 in 7 1 in 5
View conservative managed funds View balanced managed funds View growth managed funds View aggressive managed funds
View conservative super funds View balanced super funds View growth super funds View aggressive super funds

You might find that one of these profiles fits you, or you might want to do some more research of your own. If in doubt, consult a qualified financial planner.

Work out your risk profile

  1. Learn more about diversified funds.
  2. Learn more about asset allocation can work for you.

Switch and save

It only takes minutes to switch your existing managed funds to InvestSMART, but you can enjoy the savings year after year:

  1. Fill in our fast online form.
  2. Print the form, then sign it and send it by:

    Email

    admin@investsmart.com.au

    Fax

    1300 880 260

    Mail

    InvestSMART Financial Services Pty Limited
    Reply Paid 4477
    Sydney NSW 2001
  3. You'll start saving straight away. And once every year, on the anniversary of when you switched to InvestSMART, you'll receive your trail commission rebate, either as a cheque or via electronic fund transfer (EFT).
  4. To receive your TrailCap payments via electronic fund transfer (EFT) to an Australian bank account — just complete the EFT section in the online application form.
    If you have already nominated InvestSMART as your fund broker and have been receiving TrailCap cheques from us but would rather your money is deposited directly into your bank account, you can let us know your EFT details in the InvestSMART EFT payments form.
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