Guidelines for measuring investment risk
The Standard Risk Measure provides an estimate of how many times an option will deliver a negative annual return in a 20-year period. It helps you to compare different investment options with a similar risk level.
The Standard Risk Measure for each of our investment options is based on two things:
- asset class risk and return expectations, and
- an option’s investment mix.
The table below shows the risk measures including a corresponding:
- risk band. This ranges from 1 to 7, where 1 is the lowest risk and 7 is the highest risk, and
- risk label. This ranges from Very low to Very high.