Trust's Risk Appetite

These questions help us to gauge how much risk the trustees are willing to take on, bearing in mind that greater risk is needed in order to have the potential to achieve higher returns.

Please answer all the questions by selecting one of the options. Choose the option that best indicates how you feel about each question. If none of the options is exactly right for you, choose the option that is closest.

1. Compared to others, how do you rate your willingness to take financial risks?
Select:
2. When faced with a major financial decision, are you more concerned about the possible losses or the possible gains?
Select:
3. What degree of risk have you taken with your financial decisions in the past?
Select:
4. What degree of risk are you currently prepared to take with your financial decisions?
Select:

5. Most investment portfolios have a mix of investments - some of the investments may have high expected returns but with high risk, some may have medium expected returns and medium risk, and some may be low-risk/low-return. (For example, shares and property would be high-risk/high-return whereas cash and bank deposits would be low-risk/low-return.)

Which mix of investments do you find most appealing? Would you prefer all low-risk/low-return, all high-risk/high-return, or somewhere in between?

Please select one of the seven portfolios listed below.

Portfolio High Risk/Return Medium Risk/Return Low Risk/Return
0% 0% 100%
0% 30% 70%
10% 40% 50%
30% 40% 30%
50% 40% 10%
70% 30% 0%
100% 0% 0%

6. Although equity based investment is more volatile it can produce higher returns and over the longer term produce returns in excess of inflation.

Which statement most accurately reflects the trustees' views about the level of return the Trust is seeking in relation to the level of inflation?

7. Although equities have historically produced superior returns over the longer term they also fluctuate more and can fall in value.

When trying to achieve this return for the portfolio and in normal circumstances, what is the maximum loss the trustees would be willing to accept in any one year?

8. When making an investment, return and risk usually go hand-in-hand. Investments which produce above-average returns are usually of above-average risk.

With this in mind, how much of the funds you have available to invest would you be willing to place in investments where both returns and risks are expected to be above average?

Select:

9. Think of the average rate of return you would expect to earn on an investment portfolio over the next ten years. How does this compare with what you think you would earn if you invested the money in bank deposits?

Trust's Capacity to Take Loss

10. You are considering placing one-quarter of your investment funds into a single investment. This investment is expected to earn about twice the bank deposit rate. However, unlike a bank deposit, this investment is not protected against loss of the money invested.

How low would the chance of a loss have to be for you to make the investment?

11. With some types of investment, such as cash and bank deposits, the value of the investment is fixed. However inflation will cause the purchasing power of this value to decrease.

With other types of investment, such as shares and property, the value is not fixed. It will vary. In the short term it may even fall below the purchase price. However, over the long term, the value of shares and property should certainly increase by more than the rate of inflation.

With this in mind, which is more important to you - that the value of your investments does not fall or that it retains its purchasing power?

12. This questionnaire is scored on a scale of 0 to 100. When the scores are graphed they follow the familiar bell-curve of the Normal distribution shown below. The average score is 50. Two-thirds of all scores are within 10 points of the average. Only 1 in 1000 is less than 20 or more than 80.