Investment diary of a newbie

jamesd

The relative risk is partly observable from where they are invested. Neptune Global Equity Fund A Accumulation from HL:

• Russian Federation 24.4%
• United Kingdom 20.1%
• China 12.5%
• United States 8.2%
• Hong Kong 6.8%
• Cash 6.2%
• Japan 4.2%
• Finland 2.7%
• Norway 2.3%
• Germany 2.1%

43.7% in emerging markets (Russia, China including Hong Kong). Trustnet has different splits (that I trust to be more current than HL) but the same general picture. It's the sort of global fund I'd go for, at the higher end of the risk scale for such funds. The high growth recently is mostly because of the growth of the China and HK markets, though Russia hasn't been doing badly either.

INVESCO PERPETUAL High Income Accumulation Units:

• United Kingdom 89.6%
• United States 4.9%
• Other 2.6%
• Netherlands 1.5%
• Cash 1.0%
• Denmark 0.2%
• Managed Funds 0.2%

Not a sign of emerging markets there.

Now countries aren't the whole story because there are different risk levels in each country but this is a pretty good indication that the Neptune fund is substantially higher in risk than the IP fund.

Now have a look at the chart and see which one is most volatile and it's really clear that the Neptune fund swings more than the IP one.

Over to Trustnet and you see the neptune fund has a three year volatility of 16.30 and the IP fund 7.79. That's a pretty big clue.