What are FE Risk Scores?

FE Risk Scores provide a single, easy to understand, measurement of the relative riskiness of individual investments or portfolios.

FE Risk Scores define risk as a measure of volatility relative to the relative to an index of the 100 largest UK companies (the benchmark) index*, which has a risk rating of 100, and rebased to Sterling*. Instruments more volatile than the relative to an index of the 100 largest UK companies (the benchmark) have a score above 100 and vice versa giving a reliable indication of relative risk. Most volatility measures are based on absolute risk. Because the absolute levels of risk in markets naturally ebb and flow, risk levels can appear to change without there being significant changes to the fundamentals. So these changes could spuriously encourage people to sell or acquire particular investments. Relative risk is not affected in the same way, and is likely to provide a clearer indicator of important risk changes.

For more information, check our guide to FE Risk Scores

* For UK users