Risk Rated Investment Portfolios

Asset Allocation


Asset allocation is the process of dividing your investment between different assets, such as cash, bonds, equities (shares in companies) and property. This practice helps to spread risk through diversification – in other words, by not putting all your eggs in one basket.


To benefit from diversification, you need to invest in assets that behave differently from each other. Each asset type has a relationship with others – some have very little or no relation to each other (known as a low correlation), whereas others are inversely connected – meaning that they move in opposite ways to each other (called a negative correlation).


Diversifying your assets helps spread risk because you’re reducing the likely potential for losses. If you had all of your money invested in one asset, sector or region, and it began to drop in value, your investments would suffer.


By investing in assets that aren’t related to each other, while one part of your investment portfolio is falling in value, the others aren’t going the same way. Some assets will actually go up in value when others decrease.


As RM Capital Wealth Ltd is an appointed representative of RM Capital Independent Financial Advisors LLP, we utilise their Centralised Investment Proposition.


RM Capital Asset Allocation Models


RM Capital use asset allocation models which link to your risk score which in turn links to a risk rated portfolio which meets your tolerance and ability to accept risk.


RM Capital’s asset allocation models are driven by Moody’s Analytics capital market assumptions. They are a global leading provider of investment research and analytics for debt capital markets and risk management professionals.

Risk Assessment

Establishing your Risk Tolerance or Profile

We will establish your risk tolerance by considering:


  • Your goals and objectives
  • Your investment time horizon
  • Your investment experience
  • Your willingness and ability to accept some risk
  • And by completion of a risk analysis questionnaire


The risk score then links to a risk rated portfolio.

Investment Term (Years)
5 – 10 10 – 15 15 Plus For life


Risk Level
Navigate Portfolio
Growth Assets %
Sensitivity to Volatility %
ATR Best Fit Range
1 n/a 0 0 n/a
2 Very Cautious 22 0 – 10 0 to 38
3 Cautious 30 10 – 20 39 to 45
3 Cautious Balanced 43 10 – 20 46 to 52
4 Balanced 55 10 – 20 53 to 59
5 Balanced Growth 67 20 – 33 60 to 67
6 Growth 79 20 – 33 68 to 74
6 Adventurous 87 33 – 50 75 to 81
7 Very Adventurous 96 50+ 82 to 100
Fund Selection

RM Capital’s risk rated portfolios contain either 22 or 23 different investment funds depending on whether an emerging market equity fund is included (only in the aggressive and speculative portfolios).


Further diversification is provided by spread of market capitalisation:

RM Capital minimise stock overlap by avoiding using two funds with similar holdings.


Portfolio Maintenance

The funds are selected by our independent investment committee after completing extensive research using the latest technology and investment management software.


RM Capital’s investment committee has 45 years combined experience in portfolio construction.


The committee meets quarterly to review and assess the last quarters fund performance.


Funds have to meet strict criteria for inclusion in the portfolios which include:

  • Short, medium and long term track record
  • Volatility and risk adjusted returns


If the strict criteria is not met a fund is replaced with an alternative which meets the fund selection criteria.


Your portfolio will be re-balanced into the latest set of funds at your annual review.


This has the effect of keeping you invested in top performing consistent funds and aligned to your tolerance for risk.


FE Risk Score Chart – Risk Rated Portfolio’s

FE Performance Chart – Risk Rated Portfolio’s

FE Risk Score Chart – Risk Rated Portfolio’s v Benchmarks

FE Performance Chart – Navigate Cautious Balanced v AFI Cautious Index

FE Performance Chart – Navigate Balanced Growth v AFI Balanced Index

FE Performance Chart – Navigate Adventurous v AFI Aggressive Index

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