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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.

Imperius Wealth Pty Ltd (Imperius) is an authorised representative of RM Capital Pty ltd (AFSL 221938). We primarily utilise models developed and managed by Aro Asset Management Pty Ltd (Aro), which have been tailored to our clients’ preferences.


Asset Allocation Models

Imperius uses 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.


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 LevelImperius PortfolioGrowth Assets %Sensitivity to Volatility %ATR Best Fit Range
1 Very Conservative 19 0 to 10 0 to 35
2 Conservative 29 10 to 20 36 to 42
3 Conservative Balanced 44 10 to 20 43 to 49
3 Balanced 50 10 to 20 50 to 56
4 Balanced Growth 60 20 to 33 57 to 64
5 Growth 72 20 to 33 65 to 70
6 Aggressive 86 33 to 50 71 to 83
7 Very Aggressive 100 50+ 84 to 100

Portfolio Maintenance

The funds are selected and managed by Aro, after completing extensive research using the latest technology and investment management software. These holdings are held and managed within Macquarie Separately Managed Accounts (SMAs), within the Macquarie Wrap platform.

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

The committee meets quarterly to review and assess the last quarters investment performance. The Investment team actively manages the SMAs, and holdings are beneficially held in the name of the client.

Investments must 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 are not met, the fund or listed investment is replaced with an alternative which meets the investment selection criteria.

Your portfolio will be re-balanced as required, and your portfolio updated the following day.

This has the effect of keeping you invested effectively and aligned to your tolerance for risk.


Imperius' Risk Rated Portfolios

Imperius, via Aro, has built a range of investment portfolios – a menu of different asset allocations (using the Aro Risk Profile SMAs) that cater for cautious investors with a low risk to investment, through to speculative investors who are happy taking on greater risk for a much higher potential return. These SMAs form part of the RM Tailored Investments Offering.

Imperius believe this can help you make sensible and responsible choices with your investment portfolio and offers you a solid foundation from which to start your investment journey.


Investment Platforms

Imperius operate risk rated portfolios from investment platforms.

To improve efficiency and transparency, Imperius has chosen to use Separately Management Accounts, using one of the most respected and recognised wrap platforms. Please refer to the Macquarie Separately Managed Account Product Disclosure Statement for more information.

Holding all your investments in one place makes monitoring much easier and provides access to a very wide range of investment solutions with free movement between the funds, enabling your adviser to maximise the potential of your investment.

Imperius will select the right platform for you on a bespoke basis usually after taking into consideration:

  • Cost of the platform
  • Required functionality
  • Investment requirements

Fund Selection

Imperius' risk rated SMA’s contain different investments depending on the risk profile of the client. The SMAs contain both direct equities and managed funds, which go through a rigorous selection process, including specific investment research and top-down risk analysis.

Risk is further mitigated by analysing the correlation between the investments and adjusting accordingly.


FE Risk Score

The FE Risk score compares the risk score of the investment compared to the FTSE 100 Index (Top 100 companies in the UK) which has a risk score of 100.

Standard Risk Measure

The Standard Risk Measure (SRM) has been developed by the Association of Superannuation Funds of Australia (ASFA) and the Financial Services Council (FSC) at the request of Australian Prudential Regulation Authority (APRA).

The purpose of the SRM is to disclose the level of risk using a standard measure. It allows members to compare investments both within and between funds based on the likely number of negative annual returns over any twenty-year period.

The scores for the respective SMAs can be found in the Macquarie SMAs PDS.

Risk bandRisk labelEstimated number of negative returns over any 20-year period
1 Very Low Less than 0.5
2 Low 0.5 to less than 1
3 Low to Medium 1 to less than 2
4 Medium 2 to less than 3
5 Medium to High 3 to less than 4
6 High 4 to less than 6
7 Very High 6 or greater

Finally

Imperius has great belief in their investment solution, as do their clients who have experience investing in these portfolios.

The following charts include:

  • The FE Risk Score of each portfolio
  • 5 Year performance of each portfolio
  • Comparisons against sector benchmarks

Downloads

  1. FE Risk Score Chart - Risk Rated Portfolio’s

  2. FE Performance Chart - Risk Rated Portfolio’s

  3. FE Risk Score Chart - Risk Rated Portfolio’s v Benchmarks

  4. FE Performance Chart – RM Conservative v AMI Cautious Index

  5. FE Performance Chart – RM Balanced v AMI Balanced Index

  6. FE Performance Chart – RM Growth v AMI Growth Index