Since the universe of mutual funds is vast with hundreds of funds out there, Investors can use the Riskometer provided by SEBI to choose schemes that align with their risk appetite. This tool is especially useful for investors who are new to mutual funds and are unsure which schemes match their risk profile.
However, it is essential to note that The Riskometer provides an overall indication of risk. However, there are many other factors to consider that should be considered while selecting a fund and a riskometer should not be the sole indicator.
A mutual fund is a trust that collects money from a number of investors who share a common investment objective
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| Schemes with Riskometer label | Suitable Investor Type | Investor Persona |
|---|---|---|
| Low | Conservative | Investor’s top priority is the safety of capital. She/he is willing to accept relatively low returns against a low risk of principal. |
| Moderately Low | Moderately Conservative | An investor is willing to accept a small level of risk in exchange for some potential returns over a medium to long-term. |
| Moderate | Moderate | An investor can tolerate a moderate level of risk in exchange for relatively higher potential returns over a medium to long-term. |
| Moderately High | Moderately Aggressive | Investor is keen to accept a relatively higher risk to maximize potential returns over the medium to long-term. |
| High Risk | Aggressive | Investor is willing to accept a significant risk to maximize potential returns over the long term and is aware that she/he may lose a significant part of the capital. |
| Very High Risk | Very Aggressive | Investor is willing to accept a significantly high level of risk to maximize potential returns over the long term and is aware that she/he may lose a significant part of the capital. |