---
title: Understanding your investment risk profile
description: When investing in funds with your ISA and SIPP portfolio, it's important to understand your personal investment risk profile.
image: https://www.isaco.co.uk/hs-fs/file-17856934-jpg/images/investment_risk_profile.jpg
---

[![investment guidance service](https://www.isaco.co.uk/hs-fs/file-17903709-png/images/template/logo.png)](https://www.isaco.co.uk/)

0800 170 7750Monday to Friday 8.30am - 6.00pm

[Client Log-In](http://members.isaco.co.uk/wp-login.php)

- [![x](https://www.isaco.co.uk/hs-fs/hubfs/images/template/social-icons/x.png?width=24&height=24&name=x.png)](https://twitter.com/isaco_)
- [![linkedin](https://www.isaco.co.uk/hs-fs/hubfs/images/template/social-icons/linkedin.png?width=24&height=24&name=linkedin.png)](http://www.linkedin.com/company/isaco-ltd)

- [![facebook](https://www.isaco.co.uk/hs-fs/file-17902759-png/images/template/icon-facebook.png)](http://www.facebook.com/pages/Isaco/261073283963679)
- [![twitter](https://www.isaco.co.uk/hs-fs/file-17903368-png/images/template/icon-twitter.png)](https://twitter.com/isaco_)
- [![linkedin](https://www.isaco.co.uk/hs-fs/file-17903004-png/images/template/icon-linkedin.png)](http://www.linkedin.com/company/isaco-ltd)

# Understanding your investment risk profile

Posted by [Stephen Sutherland](https://www.isaco.co.uk/blog/author/stephen-sutherland) on Sat, Sep 01, 2012 @ 01:00 PM

- [Tweet](https://twitter.com/share)

![investment risk profile](https://www.isaco.co.uk/hs-fs/file-17856934-jpg/images/investment_risk_profile.jpg)When investing with your ISA and SIPP portfolio, you need to understand the risk involved in the funds you choose to purchase.

We all have different attitudes to investment risk. Some people are willing to accept greater risk and volatility in the pursuit of higher returns. Other people are looking for less risk, while still aiming to achieve their personal financial goals. 

The table below will help you understand your risk profile. Which description most closely matches your attitude to investment risk?  
 

![understanding risk profile](https://www.isaco.co.uk/hs-fs/file-17899931-gif/images/understanding_risk_profile.gif)

**

Aiming for higher returns results in higher volatility**

The level of risk and volatility you face is directly linked to where your ISA and SIPP portfolio is invested. The rule is simple: the higher the returns, the higher the volatility. To put it another way, the greater returns you are aiming for, the rockier the ride. Here’s a table that explains how volatility works.  
 

![Aiming for Higher Returns](https://www.isaco.co.uk/hs-fs/file-17824356-gif/images/aiming_for_higher_returns.gif)

**  
3 year* returns: Adventurous investor seeking aggressive growth**

Our personal investment service allows you to buy the same funds as a star-performing investor. You find out where he invests, keep full control of your account, enjoy a close relationship with a trusted expert, and benefit from the potential for attractive long-term returns. The expert that you have the opportunity to mirror is classed as an ‘adventurous’ investor and aims for high returns. That means the ride quality can be uncomfortable at times especially for low to medium risk investors. Take a look at these recent 3 year* returns from the investor.  
 

![3 year Returns a](https://www.isaco.co.uk/hs-fs/file-17818645-gif/images/3_year_returns_a1.gif) 

Attaining this impressive performance over the last the last three years involved periods of increased volatility. If the threat of large price swings over the short-term doesn’t appeal to you, and you’d be willing to aim for a lower annual return in exchange for a smoother ride, you may like my next suggestion.

**A simple way to lower volatility – Moneybuilder Income Fund**

Instead of investing 100% of your ISA and SIPP into higher risk growth funds, you make a split. For example, 50% of your capital is invested into growth funds and the other 50% is invested into a quality low risk corporate bond fund, resulting in a smoother ride but at the expense of lower returns. If you had adopted such a strategy over the last three years, the results would have been as follows.

**3 year* returns: **** ****Medium risk investor seeking moderate growth  
 **

![3 year Returns b](https://www.isaco.co.uk/hs-fs/file-17818822-gif/images/3_year_returns_b.gif)

For more information about investment risk, please visit our [other posts](https://web.isaco.co.uk/blog/?Tag=Investment+risk) on this subject. ISACO are ‘not allowed to give personal recommendations’ which means we are limited to advice that does not consist of tailored recommendations to individuals and does not amount to a ‘personal recommendation’ as defined in the FSA handbook. Should you have any doubts as to the suitability of an investment for your circumstances, we suggest you speak to a financial adviser.

As always, if you have any questions or thoughts on the points I've covered, please leave a comment below or connect with us [@ISACO_](http://www.twitter.com/ISACO_) on Twitter.

Please note past performance should not be used as a guide to future performance, which is not guaranteed. Investing in Funds should be considered a long-term investment. The value of the investment can go down as well as up and there is no guarantee that you will get back the amount you originally invested.

## Find out where an expert invests

Are you an ISA or SIPP investor with over £100,000 actively invested? Are you looking for better returns but are unsure which funds to invest in? ISACO Wealth, our personal investment service, allows you to **[buy the same funds as a star-performing investor](https://web.isaco.co.uk/view-my-portfolio/)**. You find out where he invests, keep full control of your account, enjoy a close relationship with a trusted expert, and benefit from the potential for attractive long-term returns.  

 **[To find out where an expert invests >>](https://web.isaco.co.uk/view-my-portfolio/)**

 **[To download our brochure >>](https://web.isaco.co.uk/investment-guidance-service-b)**

 

 

 Topics: [ISA investing tips](https://www.isaco.co.uk/blog/topic/isa-investing-tips), [Investment strategy](https://www.isaco.co.uk/blog/topic/investment-strategy), [Investment risk](https://www.isaco.co.uk/blog/topic/investment-risk)

### Subscribe by Email

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/07d30346-56f4-4eb5-8ed0-732a7176cee7.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/07d30346-56f4-4eb5-8ed0-732a7176cee7)

[![Is it time to raise cash?](https://no-cache.hubspot.com/cta/default/142026/460b895e-92d4-40cb-8d29-7790bbfaa396.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/460b895e-92d4-40cb-8d29-7790bbfaa396)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/fc21adc1-6c65-42a1-a7bc-625e3a3d87f2.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/fc21adc1-6c65-42a1-a7bc-625e3a3d87f2)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/1280942b-07b3-4031-a3e3-ca2a58a1c4a3.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/1280942b-07b3-4031-a3e3-ca2a58a1c4a3)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/89440174-6d63-4ad1-9b1f-b23afa9db5e5.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/89440174-6d63-4ad1-9b1f-b23afa9db5e5)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/0805d531-f087-4c6c-a8fd-cf98898cc3d3.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/0805d531-f087-4c6c-a8fd-cf98898cc3d3)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/c51c17cd-c584-4439-a783-bc8393f9dc7b.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/c51c17cd-c584-4439-a783-bc8393f9dc7b)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/b1a3dfec-b16c-4874-ac7b-3d9d4053d24f.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/b1a3dfec-b16c-4874-ac7b-3d9d4053d24f)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/069a2c1d-3aec-4e0f-8fda-511e276f2a54.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/069a2c1d-3aec-4e0f-8fda-511e276f2a54)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/7cf5fc26-865a-409a-9000-3b7288287a9c.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/7cf5fc26-865a-409a-9000-3b7288287a9c)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/f755ac27-21f3-431a-94ba-c88714d9f314.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/f755ac27-21f3-431a-94ba-c88714d9f314)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/72356409-308d-4e04-a834-6946c1241c5b.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/72356409-308d-4e04-a834-6946c1241c5b)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/142026/bbd6ce7f-1a57-4c9d-9442-8c08f9f6dcf5.png)](https://cta-redirect.hubspot.com/cta/redirect/142026/bbd6ce7f-1a57-4c9d-9442-8c08f9f6dcf5)

### Recent Posts

### Most Popular Posts

### Categories

- [About ISACO (2)](https://www.isaco.co.uk/blog/topic/about-isaco)
- [Achieving your investment goals (65)](https://www.isaco.co.uk/blog/topic/achieving-your-investment-goals)
- [Behavioural Investing (13)](https://www.isaco.co.uk/blog/topic/behavioural-investing)
- [Better performance (38)](https://www.isaco.co.uk/blog/topic/better-performance)
- [Better protection (14)](https://www.isaco.co.uk/blog/topic/better-protection)
- [Choosing a fund (1)](https://www.isaco.co.uk/blog/topic/choosing-a-fund)
- [Client stories (2)](https://www.isaco.co.uk/blog/topic/client-stories)
- [Creating an income for life (3)](https://www.isaco.co.uk/blog/topic/creating-an-income-for-life)
- [Essential reading (8)](https://www.isaco.co.uk/blog/topic/essential-reading)
- [FAQs (7)](https://www.isaco.co.uk/blog/topic/faqs)
- [Finding a good growth fund (6)](https://www.isaco.co.uk/blog/topic/finding-a-good-growth-fund)
- [Fund timing (4)](https://www.isaco.co.uk/blog/topic/fund-timing)
- [Guest blogs (2)](https://www.isaco.co.uk/blog/topic/guest-blogs)
- [How to Make Money in ISAs and SIPPs (21)](https://www.isaco.co.uk/blog/topic/how-to-make-money-in-isas-and-sipps)
- [Investing for children (4)](https://www.isaco.co.uk/blog/topic/investing-for-children)
- [Investment charges (6)](https://www.isaco.co.uk/blog/topic/investment-charges)
- [Investment funds (50)](https://www.isaco.co.uk/blog/topic/investment-funds)
- [Investment Guidance (4)](https://www.isaco.co.uk/blog/topic/investment-guidance)
- [Investment Guidance Service (6)](https://www.isaco.co.uk/blog/topic/investment-guidance-service)
- [Investment mistakes (21)](https://www.isaco.co.uk/blog/topic/investment-mistakes)
- [Investment news (60)](https://www.isaco.co.uk/blog/topic/investment-news)
- [Investment opportunities (10)](https://www.isaco.co.uk/blog/topic/investment-opportunities)
- [Investment outlook (18)](https://www.isaco.co.uk/blog/topic/investment-outlook)
- [Investment risk (8)](https://www.isaco.co.uk/blog/topic/investment-risk)
- [Investment strategy (180)](https://www.isaco.co.uk/blog/topic/investment-strategy)
- [Investment tutorials (17)](https://www.isaco.co.uk/blog/topic/investment-tutorials)
- [ISA growth (41)](https://www.isaco.co.uk/blog/topic/isa-growth)
- [ISA investing tips (50)](https://www.isaco.co.uk/blog/topic/isa-investing-tips)
- [ISA millionaires (8)](https://www.isaco.co.uk/blog/topic/isa-millionaires)
- [ISACO Alpha (1)](https://www.isaco.co.uk/blog/topic/isaco-alpha)
- [ISACO client interviews (2)](https://www.isaco.co.uk/blog/topic/isaco-client-interviews)
- [ISACO vs an adviser (8)](https://www.isaco.co.uk/blog/topic/isaco-vs-an-adviser)
- [ISACO Wealth (6)](https://www.isaco.co.uk/blog/topic/isaco-wealth)
- [Junior ISAs (6)](https://www.isaco.co.uk/blog/topic/junior-isas)
- [Managing your portfolio (5)](https://www.isaco.co.uk/blog/topic/managing-your-portfolio)
- [NISA (5)](https://www.isaco.co.uk/blog/topic/nisa)
- [Retirement planning (2)](https://www.isaco.co.uk/blog/topic/retirement-planning)
- [Shadow Investment (2)](https://www.isaco.co.uk/blog/topic/shadow-investment)
- [SIPP investing tips (20)](https://www.isaco.co.uk/blog/topic/sipp-investing-tips)
- [Stock market direction (6)](https://www.isaco.co.uk/blog/topic/stock-market-direction)
- [Stock market Outlook (5)](https://www.isaco.co.uk/blog/topic/stock-market-outlook)
- [Stock Market Summary (244)](https://www.isaco.co.uk/blog/topic/stock-market-summary)

### Archive

- [January 2020 (1)](https://www.isaco.co.uk/blog/archive/2020/01)
- [January 2019 (1)](https://www.isaco.co.uk/blog/archive/2019/01)
- [October 2018 (1)](https://www.isaco.co.uk/blog/archive/2018/10)
- [July 2018 (1)](https://www.isaco.co.uk/blog/archive/2018/07)
- [March 2018 (1)](https://www.isaco.co.uk/blog/archive/2018/03)
- [May 2017 (1)](https://www.isaco.co.uk/blog/archive/2017/05)
- [March 2016 (1)](https://www.isaco.co.uk/blog/archive/2016/03)
- [February 2016 (2)](https://www.isaco.co.uk/blog/archive/2016/02)
- [January 2016 (2)](https://www.isaco.co.uk/blog/archive/2016/01)
- [December 2015 (5)](https://www.isaco.co.uk/blog/archive/2015/12)
- [November 2015 (4)](https://www.isaco.co.uk/blog/archive/2015/11)
- [October 2015 (4)](https://www.isaco.co.uk/blog/archive/2015/10)
- [September 2015 (5)](https://www.isaco.co.uk/blog/archive/2015/09)
- [August 2015 (4)](https://www.isaco.co.uk/blog/archive/2015/08)
- [July 2015 (3)](https://www.isaco.co.uk/blog/archive/2015/07)
- [May 2015 (2)](https://www.isaco.co.uk/blog/archive/2015/05)
- [April 2015 (2)](https://www.isaco.co.uk/blog/archive/2015/04)
- [March 2015 (5)](https://www.isaco.co.uk/blog/archive/2015/03)
- [February 2015 (5)](https://www.isaco.co.uk/blog/archive/2015/02)
- [January 2015 (4)](https://www.isaco.co.uk/blog/archive/2015/01)
- [December 2014 (5)](https://www.isaco.co.uk/blog/archive/2014/12)
- [November 2014 (4)](https://www.isaco.co.uk/blog/archive/2014/11)
- [October 2014 (5)](https://www.isaco.co.uk/blog/archive/2014/10)
- [September 2014 (4)](https://www.isaco.co.uk/blog/archive/2014/09)
- [August 2014 (4)](https://www.isaco.co.uk/blog/archive/2014/08)
- [July 2014 (5)](https://www.isaco.co.uk/blog/archive/2014/07)
- [June 2014 (4)](https://www.isaco.co.uk/blog/archive/2014/06)
- [May 2014 (5)](https://www.isaco.co.uk/blog/archive/2014/05)
- [April 2014 (5)](https://www.isaco.co.uk/blog/archive/2014/04)
- [March 2014 (4)](https://www.isaco.co.uk/blog/archive/2014/03)
- [February 2014 (4)](https://www.isaco.co.uk/blog/archive/2014/02)
- [January 2014 (5)](https://www.isaco.co.uk/blog/archive/2014/01)
- [December 2013 (4)](https://www.isaco.co.uk/blog/archive/2013/12)
- [November 2013 (4)](https://www.isaco.co.uk/blog/archive/2013/11)
- [October 2013 (5)](https://www.isaco.co.uk/blog/archive/2013/10)
- [September 2013 (4)](https://www.isaco.co.uk/blog/archive/2013/09)
- [August 2013 (6)](https://www.isaco.co.uk/blog/archive/2013/08)
- [July 2013 (9)](https://www.isaco.co.uk/blog/archive/2013/07)
- [June 2013 (9)](https://www.isaco.co.uk/blog/archive/2013/06)
- [May 2013 (9)](https://www.isaco.co.uk/blog/archive/2013/05)
- [April 2013 (7)](https://www.isaco.co.uk/blog/archive/2013/04)
- [March 2013 (9)](https://www.isaco.co.uk/blog/archive/2013/03)
- [February 2013 (13)](https://www.isaco.co.uk/blog/archive/2013/02)
- [January 2013 (27)](https://www.isaco.co.uk/blog/archive/2013/01)
- [December 2012 (25)](https://www.isaco.co.uk/blog/archive/2012/12)
- [November 2012 (35)](https://www.isaco.co.uk/blog/archive/2012/11)
- [October 2012 (35)](https://www.isaco.co.uk/blog/archive/2012/10)
- [September 2012 (34)](https://www.isaco.co.uk/blog/archive/2012/09)
- [August 2012 (36)](https://www.isaco.co.uk/blog/archive/2012/08)
- [July 2012 (34)](https://www.isaco.co.uk/blog/archive/2012/07)
- [June 2012 (34)](https://www.isaco.co.uk/blog/archive/2012/06)
- [May 2012 (35)](https://www.isaco.co.uk/blog/archive/2012/05)
- [April 2012 (27)](https://www.isaco.co.uk/blog/archive/2012/04)
- [March 2012 (32)](https://www.isaco.co.uk/blog/archive/2012/03)
- [February 2012 (13)](https://www.isaco.co.uk/blog/archive/2012/02)
- [January 2012 (6)](https://www.isaco.co.uk/blog/archive/2012/01)
- [December 2011 (3)](https://www.isaco.co.uk/blog/archive/2011/12)

© ISACO Ltd, 82 King Street, Manchester, M2 4WQ. ENGLAND

Tel: 0800 170 7750 | [Data Protection & Privacy Policy](https://www.isaco.co.uk/privacy-policy) | [Terms and Conditions](https://www.isaco.co.uk/terms-and-conditions) | Fax: 0870 757 8660

**ISACO Ltd is Authorised and Regulated by the Financial Conduct Authority**