Risk-O-Meter — Mutual Fund Term Explained

SEBI's standardised risk label for mutual funds — a 6-level scale from Low to Very High risk. Displayed on all fund documents.

The risk-o-meter is a SEBI-mandated standardised risk label for every mutual fund scheme. It classifies funds on a 6-level scale: Low, Low-to-Moderate, Moderate, Moderately High, High, and Very High.

From January 2021, the risk-o-meter must be updated monthly. Match the risk-o-meter level to your own risk appetite.

Related terms

• Risk Appetite — Your willingness and ability to accept potential losses in exchange for higher returns. The fundamental factor in choosing the right fund.
• SEBI (Securities and Exchange Board of India) — The regulatory authority that governs all mutual funds and securities markets in India. Sets rules for AMC operations and investor protection.

Browse the full mutual fund glossary, or see this concept in action in the fund screener.