Shortfall risk

Shortfall risk

The risk of falling short of any investment target.

Shortfall Risk

The risk that an investment's actual return will be less than the expected return, or, more properly, the return needed to meet one's investment goals.
References in periodicals archive ?
Its important for advisors to understand risk along two dimensions: market risk and shortfall risk. By shifting the clients focus from benchmark performance to what it means if they cannot retire at 65 years old, the client and advisor can avoid knee-jerk reactions to short-term market movements, and instead focus on the end-game with full transparency, says J.
State Support Mitigates M&R Shortfall Risk - Infrastructure Renewal: Stronger
There can be a shortfall risk if investors choose highly conservative portfolios with low expected return.
Thus, certain kinds of social stimuli may facilitate optimal responding in situations of shortfall risk when it is optimal to cooperate with others.
MOST LIKELY PATH TO THE SHORTFALL RISK UNDER THE OPTIMAL HEDGING.
In these situations, liquidity risk can have a significant impact on the overall success of the investment program and result in shortfall risk.
We then examine whether an optimal risk management strategy consisting of gap insurance and an index-linked instrument can increase the net shareholder value (and reduce shortfall risk) as compared to a hedging strategy that only includes an index-linked instrument without gap insurance.
If our target is inflation plus five, and we are entirely in cash, we have no volatility risk, but we have a high shortfall risk. Our objective is to put together a portfolio that gives us the best chance of beating our goal.
While risk in the accumulation phase is often summed up by volatility, the central focus in the distribution phase becomes shortfall risk, or the risk of outliving your money.
NORWICH Union yesterday warned of a shortfall risk in nine out of 10 of their mortgage endowment policies.
The similarity is that in both cases there is a mismatch between the market-risk of the assets and liabilities that exposes the government guarantor to substantial shortfall risk.
Policy providers were accused of not warning of the shortfall risk and many have had to compensate the policyholders.