Mutual Fund Riskometer: Know Your Risk in 6 Levels

Before putting money in any mutual fund, check its riskometer. This colour-coded dial shows how risky the fund is — from Low to Very High — so you know what you're signing up for before your first SIP.

Here's what happened: SEBI mandates every mutual fund scheme display a riskometer — a dial-shaped label with six risk levels from Low to Very High Risk.. Two funds in the same category (e.g., large-cap) can show different riskometer levels depending on their actual stock and bond holdings.. Fund houses must update the riskometer every month as the portfolio changes, so a fund's risk rating can shift over time without much fanfare..

What you should do: Check the riskometer on your fund's latest factsheet at the AMC website or on apps like Kuvera/Groww before starting or increasing a SIP.. Compare riskometers across two or three similar funds — if one shows 'High' and another 'Moderately High' for the same category, dig into why before investing.. Review your existing portfolio once a quarter to see if any fund's riskometer has moved up a notch — your risk appetite may no longer match the fund..

A fund labelled 'Moderate Risk' can still hold volatile mid-cap stocks. Always read the portfolio disclosure alongside the riskometer — the label is a starting point, not the full story.