To help you decide which investment funds to invest in, we give each one a risk/return rating, ranging from 1 (low) to 5 (high). This table explains what each rating means.
|Risk/return rating||Typical fund characteristics|
|1 (Low)||Funds with this rating usually aim to provide returns similar to those you’d get from deposit and savings accounts, although there’s still a risk the value of your investment could fall.|
|2 (Medium to low)||Expected to provide better long-term returns than savings accounts. Typically invest in high quality corporate bonds or provide a form of guarantee or capital protection, although there is still a risk the value of your investment could fall.|
|3 (Medium)||Typically don’t offer guarantees, but have the potential for better long-term returns than lower risk funds, although there’s a risk the value of your investment could fall. Generally invest in a diversified mix of assets or in fixed income bonds issued by higher risk companies.|
|4 (Medium to high)||Funds that typically invest in shares of companies in the UK or other major stock markets. Fund prices may fluctuate significantly but offer the potential for good returns over the long term.|
|5 (High)||Funds that invest in the higher risk sectors (typically emerging markets or specific themes), offering the greatest potential for long-term returns but the highest price fluctuations and risk to your money.|
Please note: We regularly review the ratings we give to each investment fund. So they might change from time to time. Go to our fund centre for the current rating of a particular fund.