Investment Philosophy Principle 3 – Protect against losses before seeking return (Part 3 – Risk Vs Return)

The following chart shows the returns from each fund against the level of risk (volatility). The best possible fund would be up at the top left (high returns with no risk) and the worst would be in the bottom right (negative returns with high risk).

With the economic shock of COVID19 and Brexit, risk assets have not been rewarded over the short term which highly favours the more cautious HSBC fund. In time, of course, we would expect this to situation to revert to the long term trends of risk being rewarded.