How to Know a Fund’s Risk Level?

🧭 How to Know a Fund’s Risk Level

The Riskometer is a standardized tool developed by SEBI and AMFI to help investors quickly understand the risk level associated with a mutual fund scheme. It classifies funds into six distinct risk categories, based on the nature of the underlying assets.

Risk Category	AMFI Description	Who is it for?
🟢 Low Risk	Funds with the least risk due to their conservative underlying securities.	Investors seeking capital protection with minimal volatility.
🟢 Low to Moderate Risk	Suitable for those willing to take a bit of risk for moderate returns over the medium to long term. Most ultra-short duration funds fall here.	Investors looking for better returns than fixed deposits, with controlled risk.
🟡 Moderate Risk	Ideal for investors open to taking some risk for balanced growth. Most dynamic bond funds fall here.	Investors with medium-term goals willing to accept moderate fluctuations.
🟠 Moderately High Risk	These funds have higher market exposure and may show greater volatility. Suitable for investors seeking higher growth potential.	Those with a longer investment horizon and moderate to high risk appetite.
🔴 High Risk	Mostly equity funds that carry significant market risk. Ideal for investors aiming for higher returns and comfortable with volatility.	Investors who can withstand high ups and downs in pursuit of long-term capital gains.
🔴 Very High Risk	Extremely risky funds investing in volatile stocks or overseas mutual funds. High-risk, high-reward strategy.	Sophisticated investors targeting aggressive growth or niche/global themes.

Note: Every mutual fund is required to disclose its Riskometer classification in its factsheet. The indicator is reviewed monthly and helps align investment choices with your personal risk profile.