Product labelling in Mutual Funds

3. Product Labelling in Mutual Funds

• Product Labelling: As per SEBI guidelines, mutual fund schemes are labelled according to the level of risk involved.
• Risk-o-meter: A tool used to depict the level of risk involved in a mutual fund scheme, with the following labels:
  • Low: Principal at low risk
  • Low to Moderate: Principal at moderately low risk
  • Moderate: Principal at moderate risk
  • Moderately High: Principal at moderately high risk
  • High: Principal at high risk
  • Very High: Principal at very high risk
• Disclosure: Mutual Funds/AMCs shall disclose the Risk-o-meter along with portfolio disclosure for all their schemes on their respective websites and on AMFI website within 10 days from the close of each month.
• Evaluation: The Risk-o-meter is evaluated on a monthly basis.
• Investor Considerations:
  • Investors should not be influenced by commission or gifts given by agents/distributors.
  • Investors should consider the track record of the mutual fund and make objective and informed decisions.