What the risk number on a fund document tells you

Almost every fund document carries a scale of seven boxes with one shaded. The number comes mostly from how much the fund’s price has moved up and down in the past: the bigger the swings, the higher the box.

It is a useful way to compare funds at a glance. It does not tell you how long a fall might last, whether you could get your money out quickly, or how the fund fits with everything else you own.

That is why we use the same scale for whole portfolios, and set your level from a conversation about your plans, not from a fund’s past alone. General information, not advice.