Graham Bentley: Why multi-asset fund risk labels are essentially meaningless

Only a minority of funds are managed to a volatility target - and even they are loath to state the targets in their objectives. As I suggested last time, most ‘risk-labelled' funds pay no more than a passing marketing reference to risk targeting, so best you ignore the labels. In fact, you might want to ignore volatility altogether. Volatility is measured by standard deviation - in fact, let's use ‘SD' to keep my word count down. SD tells us by how much members of a group - in our case historical price movements - differ from their average. On a chart, a ‘normal' distribution of value...