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I am considering investing some money in shares and since I do not at all a specialist, I wanted to do this on ETFs that would be aligned with some large indexes (iShares Europe for instance).

My understanding is that this is a rather conservative choice, yet such ETFs are rated 6 in the Risk and Reward Profiles. This is one point short of the maximum risk.

Why is it so? I was expecting that "I go along the average changes in the economy" would be rated less risky.

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  • Rated by who? An EFT tracking an index should be somewhere near the behavior of that index. Of course if you want to track the economy (of which country, or do you mean internationally?), no one index does that as far as I know; the usual solution is to determine a mix of index funds which covers the distribution you think will have the desired behaviors. ALSO: Note that EFTs vary widely, so there is no single rating consideration for all EFTs and your question should be rephrased.
    – keshlam
    Nov 27, 2022 at 20:53

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Per the iShares prospectus that you linked to:

The Share Class is rated six due to the nature of its investments which include the risks listed below. These factors may impact the value of the Share Class or expose the Share Class to losses.

The value of equities and equity-related securities can be affected by daily stock market movements. Other influential factors include political, economic news, company earnings and significant corporate events.

ETFs might be less risky than single name stocks but equity ETFs and indices are still fairly volatile (the S&P 500 moved +/-5% on some days this year) and can incur substantial losses (-30% YTD at some point.)

Compare this to bond and money market funds, or even principal protected notes and you can guess why it's rated 6 out of 7 on iShares' proprietary risk/reward scale.

Growth vs value (dividends) would be another consideration as well as FX exposure.

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