Risk Profile – Defensive Investor

The investment objective of a Defensive investor is to place an emphasis on relatively stable returns with the potential for modest long term growth.

A Defensive portfolio looks to invest around 30% in growth assets (eg equities and property) and the remainder in defensive assets (eg cash and fixed income). The figure of 30% 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 primarily seek income with some potential for capital growth. This portfolio also suits investors seeking a low level of investment value volatility, and who are therefore willing to accept lower potential investment returns.

Such a portfolio is suitable for investors with a short to 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 – Defensive  
Minimum investment period 3 years
Forecast average annual return over 10 years 5.0%
Probability of a negative return over a single year 12.0%
Expected negative years out of 20 2.4
Forecast rate of returns  
1 year -3.5% to 10.9%
5 years (per annum) 1.6% to 7.0%
10 years (per annum) 3.0% to 7.0%
20 years (per annum) 4.4% to 7.4%


Asset allocation – Defensive Target % Minimum % Maximum %
Defensive Fixed Income 35 0 60
Defensive Alternatives 20 0 50
Cash 15 0 45
Total defensive 70 60 80
Australian Equities 8 0 35
Global Equities 9 0 35
Property & Infrastructure 6 0 30
Growth Alternatives 7 0 20
Total growth 30 20 40