If you're not sure what type of investment profile best describes you, you can take our 'What type of investor am I?' questionnaire. This been developed with Morningstar and based on the answers you provide on your investment goals, time frames and attitude to risk will suggest a profile and expected return rate that suits you best. The profiles are:

• Defensive
• Conservative
• Moderate
• Growth
• High Growth

Morningstar also provide a guide to asset allocation for each profile as well as risk and expected returns rates.

The service offered at RaboDirect, in respect of all products including investments, is 'execution only'. All information is provided as a general guideline and in that respect should not be considered financial advice. Model portfolios, asset allocation and investment profiles should be taken as a guide only.

There are a huge number of investment funds on offer in the marketplace and not everyone is in a position to keep track of how they're performing. Traditional banks and financial Institutions offer their own financial wizards and investment advisors, but with RaboDirect we aim to provide you with all the information you need to make your own informed decision on how and where to invest.

This is where independent rating agencies play an important role in assisting you with the decision-making process. One of the most reputable of these agencies is Morningstar - an American institution that operates internationally and leading provider of independent investment research and ratings for individual investors, financial advisors, and institutional clients.

Their analysts closely track developments in the world of finance and economics. They process masses of numerical data and also frequently visit and interview the fund managers to gain even more detailed information and insight on how the funds managers perform in the markets.

These analysts express their opinion regarding the quality of an investment fund through a rating. This enables you, as a prospective fund purchaser, to see and measure at a glance how one fund is performing in comparison to other funds.

How does Morningstar rate the quality of a fund? In short: by comparing the most recent 36 monthly performances with those of other funds with a comparable investment objective. 

As there are numerous categories of investment funds available Morningstar avoids comparing apples with oranges. The Morningstar Rating compares funds' risk-adjusted historical returns. Among other things, the rating is designed to convey a sense of how skilfully a fund has been managed. Its usefulness depends, in part, on which funds are compared to one another. The institute also includes a correction based on a risk-return analysis. 

A fund is awarded 1 to 5 stars based on its historical performance. The stars indicate the following:

	top 10% of the funds
	next 22.5%
	next 35%
	next 22.5%
	last 10%

If a fund does not have a Morningstar Rating, this can mean a number of things; the fund was established less than three years ago; the fund has recently drastically changed its approach or objective; there is not enough information available; or there are too few comparable funds.
 
The Morningstar Rating is only one of the pieces of information you can use to perform a preliminary screening of funds within the categories that you are considering having in your portfolio. Of course, you will still need to pay attention to your asset allocation, your Investor Profile, your tax position, the costs incurred by your funds, as well as your requirements for income and liquidity. The Morningstar Rating does not account for these types of essential decisions and or personal circumstances dictating your choice or ability to invest.

The Morningstar Rating reflects a fund's past performance and does not forecast future performance.

No matter what type of investor you are, there is bound to be a mutual fund that fits your style. It's important to understand that each mutual fund has different risks and rewards. In general, the higher the potential return, the higher the risk of loss. Although some funds are less risky than others, all funds have some level of risk - it's not possible to diversify away all risk. This is a fact for all investments, otherwise you would be wiser to invest your funds in a Rabodirect Savings or Deposit Account. Each fund has a predetermined investment objective that tailors the fund's assets, regions of investments, and investment strategies. There are three varieties of mutual funds on offer at Rabodirect: Bond Funds, Equity Funds and Mixed Funds

Bond Funds
Sometimes referred to as Income funds. Invested in government and corporate debt, the investment objectives of these type of funds is to provide investors with a steady, balanced income as part of a balanced portfolio of investments. On their own, these would be more popular with the conservative low risk Defensive investor. 

Examples
Lux-O-Rente 
Robeco High Yield Bonds

Please consult the fact sheet and prospectus offered for further details on each Fund.
Fund selector

Equity Funds 
Representing one of the largest categories worldwide in investment funds, as the name suggests these funds invest in equity (share) portfolios. As you can well imagine there are many different classes of equities (shares) worldwide so this makes for many different sectors, classes and risks of Equity Funds. It is for this reason that it is important to take into consideration the equities that make up the investment of a particular fund. Some equity funds chop and change the mix of equities within a funds as part of the funds management strategy, in order to: gain better returns; to take advantage of market conditions; or simply to rebalance a fund in line with the funds objectives. Obviously some Equity Funds are far more risky than others. Therefore, being of varying risk you may find within our offering a fund or funds that would suit your Investor Profile and the portfolio you are looking to create. 

Examples
BlackRock Glob Fundamental Value
BlackRock US Basic 
Robeco MM Asia-Pac Equities
Robeco Emerging Markets Equities 
BlackRock Emerging Europe 
BlackRock World Financials Fund 
Henderson Pan European Property Equities Fund

All of the funds in the above category invest in Equities across various different industry sectors, geographical regions and levels of risk. Please consult the Prospectus and fact sheets offered for further details on each Investment Fund.

All of the funds in the above category invest in Equities across various different industry sectors, geographical regions and levels of risk. Please consult the fact sheet and prospectus offered for further details on each fund.
Fund selector

Mixed Funds 
Sometimes referred to as Balanced Funds, the investment objective of these funds is to provide a balanced mixture of safety, income, and capital appreciation. Normally, the strategy of these mixed funds is to invest in a combination of fixed-income bonds and equities in varying percentages, depending on the Investor Profile of the funds and the returns it seeks to achieve.

Example
BlackRock Global Allocation 

Please consult the fact sheet and prospectus offered for further details of the Fund.
Fund selector

Distribution funds can provide dividends, whilst Capital growth Funds do not. With a distribution fund one would receive constant benefits in the form of capital gains and or dividends, whilst Capital growth Funds any income or dividend is reinvested and accrued in the Fund Price.

Currently the only funds on offer on the Rabodirect website are Capital growth Funds.

Your Investor Profile, your tolerance and your appetite for risk 

Understanding your investment objectives, goals,what you wish to achieve from your investment(s) is one of the basics of good investing technique. 

Investment Timeframe and Horizon, the length of time you intend to invest, considering your financial situation and your cash requirements

The costs and management fees involved in your choice of investments, ongoing yearly fees to keep you invested in the fund, entry and exit fees paid when you buy or sell shares in a fund. Higher expense funds do not in certain cases perform better than lower expense funds. 

Ultimately as we are an execution-only service it is up to you the investor to look at the choice of investment funds on offer and to evaluate which funds suit you the best. Be sure to read and get an understanding of all the information provided by the funds providers. If you are in doubt about any of the information provided we suggest you seek professional advice or consult your independent financial advisor before you enter any form of Investment(s) of for that matter any financial transaction. 
 
At RaboDirect, we believe that we have chosen a very good quality cross-section of investment funds from leading product providers, JPMorgan, BlackRock Merrill Lynch Investment Managers, Robeco, Henderson Global Investors and Oppenheim Investment Managers for you to choose from for your investments portfolio. We will, of course, continue to increase and complement the number of funds we offer as new and interesting funds come to the market and as we continue to develop our investment offerings further at RaboDirect.

The stars of Morningstar say something about the fund's performance over the past 36 months compared to other funds in the same category. This rating consequently rests on hard figures and is important when deciding on the funds you wish to buy and the type of portfolio you wish to create.