Darius McDermott: When investors shouldn't be scared of volatility

When it comes to measuring risk, one of the first metrics a client tends to focus on is a fund's volatility - that is, the day-to-day fluctuations in its price. The perception, of course, is that the lower the volatility, the better the investment is. While this view can indeed work for investors with a very low appetite for risk, however, a less volatile investment is more likely to achieve lower long-term gains than its higher-octane peers. As an example, data from FE Analytics shows 34 out of 55 funds - that  is, 62% - in the Investment Association's Global sector that are in the top ...