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NEW DELHI: IDBI Mutual Fund, Canara Robeco Mutual Fund, and Axis Mutual fund have announced a revision in the Risk-o-meter for some of their schemes. In all the cases, the assessed risk level of the schemes has gone down from what it was earlier. This was done to reflect the change in the risk levels of these schemes subsequent to an evaluation.

The Risk-o-meter, a risk gauge introduced by the Securities and Exchange Board of India (Sebi),  gives investors an overall idea of the risk associated with a scheme. Mutual fund AMCs have been displaying a pictorial risk-o-meter for all their schemes in monthly factsheets since January 2021.

In case of IDBI MF, the risk level as per the scheme Risk-o-meter has been changed from ‘moderate’ to ‘low-to-moderate’ for both its liquid fund and ultra short term fund, effective 6 July. 

Canara Robeco MF has updated the risk level of its dynamic bond fund from ‘moderate’ to ‘low-to-moderate’ with effect from 6 July. 

Axis MF has revised the risk level for both its floater fund and low duration fund, ‘Treasury Advantage Fund’ from ‘moderate’ to ‘low to moderate’. The risk level for the Axis Retirement Savings Fund – Conservative Plan has been revised from ‘high’ to ‘moderately high’. This is effective 5 July. This is a retirement solution oriented scheme having a lock-in of five years or till retirement age, whichever is earlier.

Under the Risk-o-meter, each scheme is labelled choosing one of six different risk levels - Low, Moderately Low, Moderate, Moderately High, High and Very High – for depicting the associated risk of a mutual fund scheme. 

The risk level is arrived at by taking into account several factors. For example, debt securities in a scheme portfolio are evaluated based on credit, interest rate, and liquidity risks. For equity holdings, market cap, stock volatility and liquidity are considered. The final risk level is based on an average of scores on each parameter.

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