The composition of a profiled fund is diversified and is based on a predefined management objective (prudent, balanced, dynamic, etc.).
Investor Profile: Investor who wants to save in the short term (conservative fund), medium term (balanced fund), or long term (dynamic fund)
Risk level: Low risk (conservative fund), moderate (balanced fund) or high risk (dynamic fund)
Expected return: Moderate return (prudent fund) to potentially high (dynamic fund)
Diversified funds do not meet any particular investment rule in terms of asset mix or geographic area. These funds have no guarantee on the invested capital.
The diversified funds offered by financial institutions are often “profiled funds”.
Risk and return of profiled funds
Profile funds are funds whose composition depends on the risk profile and the expected return. They include equities, bonds and money market products in varying proportions depending on the fund’s management profile.
Three profiles are generally proposed:
- Cautious profile: if you favor security and want to invest in the short term (fund mainly invested in bonds and money market products).
- Balanced profile: if you accept a little more risk for a better return (composition of the balanced fund between equities, bonds and money market products).
- Dynamic profile: if you hope to obtain a higher return in the long term (fund mainly invested in French and foreign equities).
Each investor can choose the corresponding risk / return mix.