What does an investment risk rating from 1 to 7 mean?
It is the Standard Risk Measure, and it estimates how many negative annual returns an option is expected to produce in any 20 years.
- 1 Very low - fewer than 0.5 negative years in 20
- 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 more
It is not a forecast, not a measure of how much you could lose, and not a complete description of risk. It says nothing about liquidity, or about the chance of the fund closing.
Factual and educational information only. Nothing on this page is financial product advice, a recommendation, or a Shariah ruling. Consider your circumstances and the product's disclosure documents, and seek licensed advice and qualified scholarly guidance before acting.