Risk Profile – Balanced Growth Investor
The investment objective of a Balanced Growth investor is to place an emphasis on longer term growth using a combination of asset classes to moderate some volatility.
A Balanced Growth portfolio looks to invest around 70% in growth assets (eg equities and property) and the remainder in defensive assets (eg cash and fixed income). The figure of 70% is a general benchmark; actual allocations over time will vary around this as investment conditions change and investment managers take opportunities to improve returns.
This portfolio suits investors who are willing to accept higher levels of investment value volatility in return for higher potential investment performance, however some capital stability is still desired.
Such a portfolio is suitable for investors with a medium to longer term investment time frame with no need to access a large part of their investment over that time. It is important to note that the value of your capital can move up and down over time, particularly in shorter time spans. Hence these investments should be considered with a minimum time frame of 5 years.
| Investment objectives – Balanced Growth | |
| Minimum investment period | 5 years |
| Returns | |
| Forecast average annual return over 10 years | 6.7% |
| Risk | |
| Probability of a negative return over a single year | 19.0% |
| Expected negative years out of 20 | 3.8 |
| Forecast rate of returns | |
| 1 year | -7.7% to 24.1% |
| 5 years (per annum) | 0.3% to 12.9% |
| 10 years (per annum) | 2.5% to 11.1% |
| 20 years (per annum) | 4.6% to 10.5% |
| Asset allocation – Balanced Growth | Target % | Minimum % | Maximum % |
| Defensive Fixed Income | 9 | 0 | 35 |
| Defensive Alternatives | 14 | 0 | 30 |
| Cash | 7 | 0 | 20 |
| Total defensive | 30 | 20 | 40 |
| Australian Equities | 24 | 15 | 55 |
| Global Equities | 29 | 15 | 55 |
| Property & Infrastructure | 7 | 0 | 30 |
| Growth Alternatives | 10 | 0 | 20 |
| Total growth | 70 | 60 | 80 |