Investment risk ratings

Investment approaches at a glance.

While there are a number of ways to evaluate risk, Scottish Widows uses the following definitions to help you decide on the appropriate investment approach. It’s important to remember that investment approaches are based on Scottish Widows’ methodology and are our opinion only. They shouldn’t be taken as advice on whether or not a fund is suitable for a particular investor.

We review investment approach definitions and investment approaches for all funds regularly, so these may change. However, even if a fund’s investment approach changes, the fund’s aim and specific investment risks remain the same. Typically, a fund’s aim includes a brief description of the fund’s investment objectives and the types of assets it invests in. Specific investment risks explain why certain types of investments may have a negative impact on that fund’s performance in some circumstances. Please note that we will generally write to inform customers and their advisers about any changes to fund aims.

Investment Approach Definitions

Secure

These investments provide safety to the amount invested and can be expected to offer relatively low growth over the medium to long term. They cannot fall in actual value, but can fall in ’real’ value due to the effects of inflation.

Cautious

These investments are expected to have a relatively modest risk to the capital value and/or income. They have the potential to provide income, and/or, over the medium to long term, relatively modest capital growth. The capital value may fluctuate, although some products may offer an element of capital protection.

Balanced

These investments carry a risk of loss to capital value but have the potential for capital growth and/or income over the medium to long term. Typically they do not have any guarantees and will fluctuate in capital value.

Progressive

These investments are expected to have a relatively significant risk of loss to capital value, but with the potential of relatively more capital growth over the medium to long term. They do not offer guarantees and will fluctuate in capital value.

Adventurous

These investments carry a relatively much higher risk of capital loss but with the potential for relatively higher capital growth over the medium to long term. They may be subject to a considerable level of fluctuation in capital value. They do not offer any guarantees.

Specialist

These investments carry a very high risk of capital loss, but with the potential for a higher return over the long term. They are very volatile and are only suitable for clients who can afford to, and are prepared to, risk the entire capital value. They do not offer any guarantees.

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