Asset Allocation & Risk

What is VaR (Value at Risk)?

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VaR is a statistical estimate of the size of the loss that could occur over a given period at a given confidence level.

For example, the criteria for determining the risk grade of investment products require funds that are more than 3 years past their establishment to be assigned one of 6 market risk grades based on a 97.5% VaR calculated from daily returns over the past 3 years. Because it is based on historical data, it may underestimate losses in extreme situations.

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This answer is general financial information as of 14/10/2026, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.