Risk Control

Standard Life Investments take risk very seriously and have a dedicated Risk Management team to measure and monitor risk across all portfolios. In addition, their Asset Class Fund Managers and Client Account Managers play a role in managing risk in clients' funds.

Risk can take many forms, from the risks associated with a particular product to operational risks, to the risks associated with a given market or stock.

Product or fund risk is simply the risk associated with choosing a particular investment product or fund. Each of Standard Life Investments' funds has a clearly defined fund specification setting out the parameters within which the portfolio manager can invest. Standard Life Investments' clients also benefit from the security of knowing that there are always at least two managers, the Client Account Manager as well as the Asset Class Manager, monitoring every portfolio.

Operational risks are those associated with individual investment houses and their business processes. For instance, fund managers should not be allowed to expose their funds to unnecessary risk by investing in assets outside the remit of the fund specification. Standard Life Investments has a well developed and efficient Controls and Compliance function, which reports to the Chief Executive. Their independent monitoring provides comfort to investors that fund specifications will be appropriately controlled.

Market and stock specific risks are those associated with individual investment markets and shares which all investment managers aim to control through effective asset allocation and stock selection. Standard Life Investments' House View ensures a consistent approach to managing market risk across their product range. To reduce the potential risk associated with specific companies, Standard Life Investments undertake comprehensive research and company visits to minimise the potential risk associated with investing in certain companies. Their Risk Management team also uses computer based risk management programs to monitor each fund's exposure to individual stocks and sectors.