Standard Risk Profiles Overview November 2016
Standard Risk Profiles Overview Wealth Advisory Risk Profiles Cautious Conservative Core Growth Max Growth Min Target Max Min Target Max Min Target Max Min Target Max Min Target Max Equities 0% 0% 10% 0% 20% 40% 0% 40% 70% 0% 60% 90% 0% 75% 100% Fixed Income 0% 90% 100% 0% 65% 100% 0% 40% 100% 0% 20% 100% 0% 0% 100% Cash 0% 10% 100% 0% 10% 100% 0% 10% 100% 0% 5% 100% 0% 5% 100% Alternative Investments 0% 0% 10% 0% 5% 15% 0% 10% 15% 0% 15% 20% 0% 20% 30% Commodities 0% 0% 3% 0% 0% 5% 0% 0% 7% 0% 0% 10% 0% 0% 10% Other 0% 0% 10% 0% 0% 15% 0% 0% 20% 0% 0% 20% 0% 0% 20% Past performance is no guarantee of future results; nothing contained herein shall constitute any representation or warranty as to future performance. Weightings are dependent on the financial markets, the view of the Bank and the specific situation of the client. Bron: Wealth Management Wealth Management 1
Risk Indicators Cautious Conservative Core Growth Max Growth Lager risico = Lower risk Hoger risico = Higher risk Lees de kermerken = Read the particulars For the particulars of these risk indicators see the next slide. For the calculation of the risk indicator only the following five asset categories are used: Cash, Fixed Income, Equities, Commodities and Alternative Investments. In order to calculate the risk indicator value Wealth Management takes sub asset classes into account for equal shares. For example: in case we allocate 12% to fixed income we assume each of the below six sub asset classes receives a sub allocation of 2% (6*2%=12%). Actual weightings can however be different. Such a difference can lead to a different value for risk than indicated in the risk indicators above. Cash Fixed Income Equities Commodities Alternative Investments Liquidity Government Bonds Euro AAA-AA Developed markets equities Commodities Hedge Funds Government Bonds EMU Emerging markets equities Government Bonds Emerging Markets (hard currency) Listed Real Estate Investment Grade Corporate Bonds Euro Investment Grade Corporate Bonds Non-Euro High Yield Corporate Bonds Source: Wealth Management Wealth Management 2
Frequently Asked Questions on the Particulars of the Investment Risk Indicator For whom has Investment Risk Indicator been developed? Consumers who already invest or consider to invest. Why has the Investment Risk Indicator been developed? For the investor it is difficult to compare the risks of different risk profiles (for example a conservative and a growth profile) offered by different Wealth Management organizations. Every organization has its own system of risk profiles and its own explanation. The Risk Indicator should aid investors in comparing the risk profiles. Who developed the Investment Risk Indicator? The Investment Risk Indicator is a joint initiative of a number of Wealth Management organizations represented in the Dutch Banking Association (NVB). How does the Investment Risk Indicator measure risk? Risk measurement is based on volatility. This measures the extend by which the value of a portfolio of investments fluctuates. Volatility is frequently used as a measure of risk. The Investment Risk Indicator provides an indication of the extend of volatility on a scale from 1 to 7, of an investment portfolio which suits a certain risk profile. How is volatility calculated? The calculation is based on historical data provided by VBA (the Dutch Association of Investment Professionals). As a consequence the Investment Risk Indicator is an estimate of volatility based on historical data. Possible adjustments will be evaluated annually. What does the Investment Risk Indicator not do? The Investment Risk Indicator is not necessarily applicable to actual client portfolios. The Investment Risk Indicator does not measure all aspects of risk. For example, the Investment Risk Indicator does not take into account the credit risk or the liquidity risk. Does the introduction of the Investment Risk Indicator mean that Wealth Management organizations will from now on monitor the volatility of individual client portfolios based on the Investment Risk Indicator? No, the Investment Risk Indicator does not target individual client portfolios. As a result, the actual volatility of an individual client portfolio may also differ from the Investment Risk Indicator. Is it mandatory to offer the Investment Risk Indicator? No, Wealth Management organizations are not obliged to use the Investment Risk Indicator. Source: Wealth Management Wealth Management 3
Disclaimer Wealth Management offers wealth management solutions for wealthy individuals, their families and select institutions worldwide. Wealth Management is a trade name of AG, Amsterdam Branch and has published this document in good faith. does not give tax or legal advice. Investors should seek advice from their own tax experts and lawyers, in considering investments and strategies suggested by. Investments with are not guaranteed, unless specified. Unless notified to the contrary in a particular case, investment instruments are not insured by the Federal Deposit Insurance Corporation ("FDIC") or any other governmental entity, and are not guaranteed by or obligations of AG or its affiliates. Although information in this document has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness, and it should not be relied upon as such. Investments are subject to various risks, including market fluctuations, regulatory change, possible delays in repayment and loss of income and principal invested. The value of investments can fall as well as rise and you may not recover the amount originally invested at any point in time. Furthermore, substantial fluctuations of the value of the investment are possible even over short periods of time. This document may not be reproduced or circulated without our written authority. The manner of circulation and distribution of this document may be restricted by law or regulation in certain countries, including the United States. This document is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, including the United States, where such distribution, publication, availability or use would be contrary to law or regulation or which would subject to any registration or licensing requirement within such jurisdiction not currently met within such jurisdiction. Persons into whose possession this document may come are required to inform themselves of, and to observe, such restrictions. Past performance is no guarantee of future results; nothing contained herein shall constitute any representation or warranty as to future performance. Further information is available upon investor's request. This document may not be distributed in Canada, Japan, the United States of America, or to any U.S. person. 2016 AG