What is a risk distribution or risk profile?
Your risk allocation indicates how risky you invest. When investing, you can choose from bond or stock funds. Stocks generally fluctuate more strongly in value than bonds. The more stocks you have, the higher the risk and the more offensive your risk profile.
The five risk profiles
There are five risk profiles, ranging from highly offensive to highly defensive:
- Very offensive: 100% stocks, 0% bonds
- Offensive: 70% stocks, 30% bonds
- Neutral: 50% stocks, 50% bonds
- Defensive: 30% stocks, 70% bonds
- Very defensive: 10% stocks, 90% bonds
An offensive profile consists mainly of stocks, which carries more risk. A defensive profile consists mainly of bonds, which carries less risk.
Model portfolios
If you choose to invest in a model portfolio, you can choose from five model portfolios with a fixed risk and fund allocation:
- Very offensive: 100% stocks, 0% bonds
- Offensive: 70% stocks, 30% bonds
- Neutral: 50% stocks, 50% bonds
- Defensive: 30% stocks, 70% bonds
- Very defensive: 10% stocks, 90% bonds
Free investment
You are not bound by these models. Of course, you can set your own fund and risk distribution and any distribution you want is possible.