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Our risk ratings

Overview

NFU Mutual has defined a number of different risk categories ranging from low risk to high risk, where low is Risk Level One and high is Risk Level Six. Each NFU Mutual fund sits within one of the risk categories.

The definitions for each risk category are shown below.  These definitions and the fund descriptions are designed to help you decide which fund is appropriate for your needs.

You should be aware that the value of your investment and any income from it may go down as well as up and you may get back less than invested.

Our risk ratings

Risk Level One

You are not willing to make investments where you could risk losing money.

What does this mean for potential investment growth?
You accept the potential for growth is low and also that the growth may not keep pace with inflation.
Keeping your initial monetary value, rather than exposing it to the risks of financial markets, is likely to be your priority.

How long do you intend to invest for?
You might need to access any investment within five years, possibly at short notice.

What type of investment would you make?
Share investment is not suitable for you because values can fall and you could lose money.

Minimum investment knowledge
An investor in this risk level is typically someone who does not need knowledge of investments.

Risk Level Two

You are prepared to take some risk when investing but will choose investments where the amount of any losses would be small.

What does this mean for potential investment growth?
You want to have the potential to outperform bank and building society accounts over the longer term generally meaning more than five years. You would prefer to have the potential for slower investment growth with limited exposure to equities.

How long do you intend to invest for?
You can invest for the longer term, say five years or more, and do not expect you will have to sell your investments earlier.

What type of investment would you make?
You are comfortable putting around a third of your investment into shares of large, established companies and the rest in lower risk investments such as cash and bonds.

Minimum investment knowledge
An investor in this risk level is typically someone who has some knowledge of the most popular types of investments.

Risk Level Three

You are prepared to put money at risk and accept that values can fall, but will try to avoid any investments that could lead to a large loss.

What does this mean for potential investment growth?
You want to have the potential for growth significantly higher than that typically on offer with deposit accounts, but accept that high returns are unlikely. You accept that other investments may provide the potential for better returns by taking a greater risk.

How long do you intend to invest for?
You can invest for the longer term, say five years or more, and do not expect you will have to sell your investments earlier.

What type of investment would you make?
You are comfortable putting around two thirds of your investments into shares of companies in well-established markets, and the rest in lower risk investments such as bonds and cash.

Minimum investment knowledge
An investor in this risk level is typically someone who has a good level of knowledge of the most popular type of investments.

Risk Level Four

You are prepared to put money at risk and accept that values can fall, but will try to limit the risk of significant losses.

What does this mean for potential investment growth?
You wish to have the potential to significantly outperform bank or building society accounts. Investments like this will rise and fall in value more than investments associated with lower risk levels.

How long do you intend to invest for?
You can invest for the longer term, say five years or more, and do not foresee needing to sell your investments earlier.

What type of investment would you make?
You are comfortable putting around three quarters of your investments into shares of companies in well-established markets, and the rest in lower risk investments such as bonds.

Minimum investment knowledge
An investor in this risk level is typically someone who has a good level of knowledge of stock market investments.

Risk Level Five

You are prepared to risk putting money into investments that can fall sharply in value and lose money.

What does this mean for potential investment growth?
You are looking for significant returns on your investment and are willing to accept a higher level of risk than our lower risk levels. You accept the possibility of large changes in the value of investments. You accept you could lose some of your money and understand the consequences this may have on your objectives.

How long do you intend to invest for?
You can invest for the longer term, say five years or more, and do not foresee needing to sell your investments earlier.

What type of investment would you make?
You are comfortable investing wholly into the shares of a wide range of companies, including some in emerging markets, but may want to hold some lower risk investments such as bonds.

Minimum investment knowledge
An investor in this risk level is typically someone who has very good knowledge or experience of stock market investments.

Risk Level Six

You are prepared to risk putting a significant proportion of your money into investments that can fall sharply in value and lose money.

What does this mean for potential investment growth?
You are looking for maximum returns on your investment and are willing to accept a high level of risk, with the possibility of extreme changes in the value of your investment. You accept that you could lose some or all of your money and understand the consequences this may have on your objectives.

How long do you intend to invest for?
You can invest for the longer term, say five years or more, and do not foresee needing to sell your investments earlier.

What type of investment would you make?
You are comfortable investing wholly into shares of a wide range of companies, including small or new companies and those in emerging markets.

Minimum investment knowledge
An investor in this risk level is typically someone who has a high level of knowledge or experience of stock market investments.

This risk rating webpage should be read in conjunction with our 'Understanding Investment Risk' brochure which provides a guide to risk issues which you should consider.

Take the time
to talk to us

Our Financial Advisers are able to help you better understand the complexities of risk and advise you on investments compatible with your attitude to risk*.

LET'S TALK

* Please note

When you contact us we'll explain the advice services we offer and the charges. NFU Mutual Financial Advisers advise on NFU Mutual products and selected products from specialist providers.

For security and training purposes calls may be recorded and monitored.