Chelsea Risk Ratings
The Chelsea Risk Rating is our in-house rating to give investors some guidance on the relative risk of funds. When we research a fund we analyse its risk profile and assign it a risk rating.
Our research team assesses the overall risk of a fund by analysing a number of factors including:
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the fund’s volatility within its sector
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the level of risk involved in the region/sector in which the fund invests
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the size of the companies within the fund
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the number of stocks held
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the risk controls imposed by the manager
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the use of derivatives and currency issues.
Types of risk
Once we have appraised a fund, we then assign it a Chelsea Risk Rating, with 1 as the lowest risk and 10 the highest. However, even funds rated 1 are subject to risk. For further information on types of risk, click on the link below.
How to use the Chelsea Risk Rating
The Chelsea Risk Rating is simply a generic guide to the relative risk of funds within the market. It is up to you to determine your optimum asset class mix.
