Understanding and submitting your portfolio data

Why these categories exist

For risk rating purposes, Oxford Risk breaks portfolios down into nine asset allocation categories.

These categories are designed to:

a) cover most liquid asset types found in portfolios we assess

b) separate meaningfully different assets without unnecessary granularity

c) be usable for long-term risk/return projections based on representative indices. We avoid adding more splits where doing so offers little additional benefit.

Category definitions

Use only the categories below when mapping your asset allocations.

1) Cash

Cash is treated as the risk-free asset and is not split into subcomponents. Include only liquid, high credit quality, very low duration instruments such as bank deposits and money market funds.

2) Investment Grade Government Bonds

Investment grade sovereign bonds. These are perceived to carry de-minimis credit risk (central banks can print money) and are primarily exposed to interest rate (duration) risk.

3) Investment Grade Corporate Bonds

Investment grade bonds issued by corporations. Compared with sovereigns, they carry more credit risk and therefore combine interest rate and credit spread exposure.

4) High Yield Bonds

Sub-investment grade bonds. Most emerging market debt will naturally fall here; on occasion there may be investment grade EM credit to reflect (see mapping guidance below).

5) Developed Equity

Equities from developed markets as typically defined by the MSCI market classification schema. We do not split further by country or sector in our categories.

6) Emerging Equity

Equities from emerging markets per MSCI classifications; again, no further split by country or sector for our purposes.

7) Property

Property exposure represented using REITs—the only scalable way to include property in a liquid portfolio. Note: REITs behave very similarly to equities in the real estate sector; they are included due to their ubiquity despite that high correlation.

8) Commodities

A broad commodities exposure (not single commodity bets). Commodities can diversify equity/bond factors and may hedge short-term inflation but are poor long-term inflation hedges; inclusion here serves risk assessment, not portfolio construction guidance.

9) Hedge Funds

A broad bucket for hedge-fund styles (e.g., merger arbitrage, global macro, relative value) commonly present in liquid multi-asset funds; included despite representation challenges.

 

How to map your holdings to our categories

Follow these steps to translate your internal classifications to ours.

Step 1 — Identify the broad asset type

Decide whether each position is cash, fixed income, equity, or an alternative (property, commodities, hedge funds). Our framework aims to cover most liquid asset types found in portfolios submitted to us.

Step 2 — For fixed income, use credit quality first

Portfolios are typically organised by credit quality rather than duration.
Map as follows:

• Investment grade sovereigns → Investment Grade Government Bonds
• Investment grade corporates → Investment Grade Corporate Bonds
• Sub-investment grade (HY) → High Yield Bonds
  Note: Most EM debt belongs in High Yield, but investment grade EM may occur; when it does, include it with the appropriate investment grade bucket by issuer type (government vs corporate).

Step 3 — For equities, use developed vs emerging

Classify equities by market development status per MSCI (Developed vs Emerging). Do not split by country or cap‑size in our categories.

Step 4 — Map alternatives as defined

• Listed REITs → Property
• Broad, diversified commodities → Commodities
• Hedge fund strategies (regardless of wrapper) → Hedge Funds
  These are included because they account for the great majority of nontraditional assets in liquid multi-asset portfolios. We also assign Absolute Return allocations to this category.

 

How to fill in the asset allocation (step-by-step)

1. List your portfolio holdings (funds, ETFs, securities).
2. Assign each holding to one of the nine categories using the definitions above. (For fixed income, lead with credit quality; for equity, use Developed vs Emerging.)
3. Convert each position to a weight (% of total).
4. Aggregate weights by category and ensure the total equals 100%.
5. Enter the category percentages into the form
6. Validate: ensure you have not split by country, sector, or duration in ways our framework does not recognise.
7. Submit the completed template with your portfolio.

 

Examples

These examples show how to map holdings using the provided definitions. They are not new definitions. These are generic, for illustrative purposes only.

Example 1 — Diversified multi-asset fund

Holdings

• UK money market fund — 10%
• US Treasuries (IG sovereign) — 25%
• Global IG corporate bond ETF — 15%
• Global developed markets equity fund — 30%
• EM equity ETF — 10%
• Listed REIT — 5%
• Broad commodities index — 5%

Mapping

• Cash → UK money market fund
• Investment Grade Government Bonds → US Treasuries
• Investment Grade Corporate Bonds → Global IG corporate ETF
• Developed Equity → DM equity fund
• Emerging Equity → EM equity ETF
• Property → Listed REIT
• Commodities → Broad commodities index

Example 2 — Multi-credit fund

Holdings

• IG corporate bonds — 40%
• High yield bonds — 30%
• EM sovereign bonds (non-IG) — 20%
• Cash — 10%

Mapping

• Investment Grade Corporate Bonds → 40%
• High Yield Bonds → 30% + 20% EM sovereign (non-IG)
• Cash → 10%

 

Common mistakes (and how to avoid them)

• Putting EM equity into High Yield.
  High Yield is for sub-investment grade bonds; EM equity belongs in Emerging Equity.
• Classifying REITs as Developed Equity.
  Despite their equity‑like behaviour, REITs are your Property allocation in this framework.
• Splitting bonds by duration instead of credit quality.
  Classification leads with credit quality; duration is not the organising dimension here.
• Over-granularity in equities (country, sector, size).
  Only Developed vs Emerging is recognised for equities in our categories.
• Creating custom categories (e.g., “Infrastructure Equity”, “Private Credit”, “Gold”).
  We can only map to the nine categories listed