Compared with the other advisory concepts (Comfort ESG, Active & Private Equity), Investment Consultation uses a risk budget which is linked to your risk profile. This memo is intended to provide you with further information about these risk budgets and their usage in your portfolio.
We start off with the MiFID questionnaire. This questionnaire generates a risk profile based on your willingness to take risks, your knowledge and experience of financial products, and your investment targets. ABN AMRO Private Banking Belgium differentiates six risk profiles, from highly defensive to highly offensive.
Within Investment Consultation, each of these risk profiles is linked to a risk budget. These risk budgets are calculated using Value-at-Risk (VaR). Further information can be found on our Value-at-Risk information sheet. Each risk profile is allocated a minimum and maximum VaR level. On this basis, risk monitoring is carried out within Investment Consultation.
An overview of the most recent ranges of the risk budget for each risk profile is provided below.
We have recently changed the calculation method of your risk budget, as a result of which the maximum VaR per risk profile has increased.
The ranges are calculated based on the 180 weekly volatility in the market and are updated each month according to the market situation.
This means that before carrying out a transaction proposal, we check that it suits within your risk budget. Moreover, on a regular basis we will also check whether your portfolio is still within the proposed risk budget. If it is not, we will contact you to amend the risk in your portfolio.
If you have any further questions regarding the risk budgets, the recent changes and/or Investment Consultation in general, please contact your relationship manager.
