The portfolios are classified into seven risk groups depending on the standard deviation of each individual portfolio. The standard deviation is a measure of how much the portfolio’s return fluctuates in relation to the average return. The standard deviation is measured based on the monthly returns over a five-year period.
With a low standard deviation, the return in each period will be close to the average return, whereas with a high standard deviation, the return will fluctuate significantly around the average.
LD Bonds
LD Discretionary
LD Danish Equities
LD Global Equities
LD Environment & Climate
New risk scale
From October 2024, the risk in all LD Pensions’ portfolios will be determined using a new scale based on the so-called PRIIPS Regulation. The new scale is an EU-standardised method for calculating risk. The actual risk in each individual portfolio remains unchanged, but the risk classification is new.
LD Pensions has chosen to use the new scale to make it easier for members to compare our portfolios with investment funds they may come across in Danish investment associations or at banks. It is easier to make comparisons when we use the same risk classification.
Most of LD Pensions’ portfolios will be classified in a lower risk category following the transition to the new scale – even if the composition of the portfolio remains completely unchanged. This is purely a technicality. The actual risk you, as a member, are taking on remains unchanged.
Significant differences in returns despite being in the same risk category
The risk group indicates the general risk of loss within the portfolio, and it provides an indication of the extent of fluctuations – both positive and negative – that can be expected when savings are invested in the portfolio. However, portfolios in the same risk group may well generate very different returns in both the short and long term.
On the ‘Return and Risk’ page, you will find further risk information for each individual portfolio, detailing the variation in returns, the average annual return, and the highest and lowest returns for that portfolio. Under each portfolio, you will find the ‘Further Risk Information’ sub-page.
The risk associated with the portfolios
Low risk is no guarantee against losses. Even if you have invested your savings in the lowest-risk option, you may incur minor losses over a period of time. If your savings are invested in a high-risk option, you must be prepared for significant fluctuations in both positive and negative directions.
By logging into your LD Account, you can experiment with different allocations within your portfolios. You can see how different allocations affect your savings risk. You do not need to place an order for a portfolio selection to use this feature. The portfolio selection process can be cancelled at any stage.
