Riskometer
SEBI's mandated six-level graphic indicating a mutual fund scheme's risk, disclosed monthly.
How it is identified
Levels: Low, Low to Moderate, Moderate, Moderately High, High, Very High, computed from the portfolio's own risk characteristics
Unit
qualitative
In depth
Since 2021 the riskometer is computed from the actual portfolio each month rather than assigned by category, so it can change as a fund's holdings change — which makes a shift in the reading genuinely informative. It scores credit risk, interest rate risk and liquidity risk for debt schemes and volatility, capitalisation and liquidity for equity ones. Its limitation is that it is a single label for a complex profile, and two funds at Very High can differ enormously in what would actually hurt them. It is a starting filter, not a substitute for reading the portfolio.
Worked example
A debt fund's riskometer moves from Moderate to High between two monthly disclosures. Nothing in the fund's name changed; the portfolio moved into lower-rated or longer-dated paper, and the reading is the notification.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Riskometer” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.