Risk Profile – Balanced Investor

The investment objective of a Balanced investor is to obtain a balance of security, income and growth with security and income ranking before growth in priority.

A Balanced portfolio looks to invest around 50% in growth assets (eg equities and property) and the remainder in defensive assets (eg cash and fixed income). The figure of 50% 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 desire a modest level of capital stability but are willing to accept moderate investment value volatility in return for potential investment performance.

Such a portfolio is suitable for investors with a medium term investment time frame. 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 3 years.

Investment objectives – Balanced  
Minimum investment period 3 years
Forecast average annual return over 10 years 5.7%
Probability of a negative return over a single year 16.1%
Expected negative years out of 20 3.2
Forecast rate of returns  
1 year -5.5% to 17.0%
5 years (per annum) 1.2% to 9.7%
10 years (per annum) 2.9% to 8.9%
20 years (per annum) 4.7% to 8.8%
Asset allocation – Balanced Target % Minimum % Maximum %
Defensive Fixed Income 25 0 55
Defensive Alternatives 15 0 35
Cash 10 0 30
Total defensive 50 40 60
Australian Equities 15 10 35
Global Equities 19 5 35
Property & Infrastructure 6 0 30
Growth Alternatives 10 0 20
Total growth 50 40 60