This calculator is a guide to help you design investment portfolios for five different levels of risk. They are designed to optimise the risk / return relationship, including
Enter your total portfolio amount, then click on your
chosen Risk Profile button to calculate asset allocation percentages and
If you wish to enter your own percentages, you can
enter values in the relevant boxes and click once on the "Calculate" button to calculate your result.
- These calculations are intended as a guide only and should not be
relied upon without seeking professional advice.
- These are long term
allocations and are not expected to change significantly from month to month or year to year.
RISK PROFILE GUIDELINES
Very low risk / Very Low Return
This portfolio is for people who are concerned about preserving their capital (in nominal terms)
and are not concerned about the long term effects of inflation and taxation.
It is unlikely to retain its real value in the long term even if all after tax
income is compounded, but is also unlikely to have negative returns over any period. Taxable
income is likely to be high.
Low Risk/ Low return
This is for people who are prepared to accept a small level of risk in exchange for higher long
term returns. The total portfolio value is unlikely to fluctuate very much. If all income is
reinvested the portfolio should just maintain its value in real terms. (After tax and
inflation are taken into consideration). Small negative returns may be occur
occasionally (every 4 to 5 years). Taxable income is likely to be moderately high.
Moderate risk / Moderate return
A portfolio expected to grow in excess of the rate of inflation but with
moderate fluctuations in value. This asset allocation is appropriate for a broad
range of investors that can take a longer term view (4 years or more). It will be suitable for
many who are saving for retirement. Taxable income is likely to be modest.
High risk/ High return
The equity component of this portfolio is large and will cause substantial fluctuations in
portfolio value from time to time. It is suitable for those who want after tax returns well in
excess of the rate of inflation and who have a high tolerance for risk. Investors should
have a medium term view exceeding 5 years.
Very High risk/High return
This portfolio contains 100% equities, therefore it would be expected to achieve the highest after tax
returns over the long term, but may also experience prolonged periods of negative returns.
Portfolio values will have very high fluctuations. Expected income is low. Investors should
have a medium to long term view of 7 to 10 years or more.