{"id":6660,"date":"2026-05-11T07:49:13","date_gmt":"2026-05-11T07:49:13","guid":{"rendered":"https:\/\/www.paytmmoney.com\/blog\/?p=6660"},"modified":"2026-05-11T07:49:13","modified_gmt":"2026-05-11T07:49:13","slug":"riskometer-in-mutual-funds","status":"publish","type":"post","link":"https:\/\/www.paytmmoney.com\/blog\/riskometer-in-mutual-funds\/","title":{"rendered":"What Is Riskometer in Mutual Funds? A Complete Beginner\u2019s Guide"},"content":{"rendered":"

Thinking about putting your money into mutual funds? You’re probably asking yourself the same question every new investor does: how much can I actually lose here? It’s a fair concern, and honestly, returns alone don’t tell the whole story. The risk you take to earn those returns matters just as much, sometimes more.\u00a0<\/span><\/p>\n

That’s exactly why the Securities and Exchange Board of India (SEBI) introduced a handy little tool called the Riskometer. Think of it as a speedometer, but instead of measuring speed, it tells you how risky a mutual fund scheme really is. In this beginner’s guide, we’ll break down what the Riskometer in mutual funds is, how it works, and why every investor should check it before investing.<\/span><\/p>\n

What Is Riskometer in Mutual Funds?<\/b><\/h2>\n

The Riskometer is a visual tool that displays the risk level of a <\/span>mutual fund<\/span><\/span><\/a> scheme. SEBI has made it mandatory for every asset management company (AMC) to show the Riskometer on their scheme documents, fact sheets, and promotional material.<\/span><\/p>\n

In simple terms, it converts complicated risk calculations into one easy-to-read graphic, allowing investors to instantly understand whether a fund is suitable for their risk appetite.<\/span><\/p>\n

How Does the Riskometer Work?<\/b><\/h2>\n

The Riskometer in mutual funds classifies schemes into six risk levels, each represented by a distinct colour for quick visual recognition.<\/span><\/p>\n

\n\n\n\n\n\n\n\n\n\n\n
Risk Level<\/th>\nColour Code<\/th>\nSuitable For<\/th>\nExample Fund Categories<\/th>\n<\/tr>\n<\/thead>\n
Low Risk<\/td>\nIrish Green<\/td>\nConservative investors prioritising capital protection<\/td>\nOvernight funds, arbitrage funds<\/td>\n<\/tr>\n
Low to Moderate Risk<\/td>\nChartreuse<\/td>\nInvestors with a medium to long-term view willing to take small risks<\/td>\nUltra short duration funds, money market funds<\/td>\n<\/tr>\n
Moderate Risk<\/td>\nNeon Yellow<\/td>\nInvestors ready to take calculated risks for slightly higher returns<\/td>\nMedium term funds, corporate bond funds, banking and PSU funds<\/td>\n<\/tr>\n
Moderately High Risk<\/td>\nCaramel<\/td>\nInvestors comfortable with greater volatility<\/td>\nEquity savings funds, credit risk funds<\/td>\n<\/tr>\n
High Risk<\/td>\nDark Orange<\/td>\nAggressive investors aiming to maximise gains<\/td>\nGold and silver funds<\/td>\n<\/tr>\n
Very High Risk<\/td>\nRed<\/td>\nInvestors seeking high returns and ready to accept significant risk<\/td>\nEquity funds, sectoral funds, dynamic asset allocation funds, international funds<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
\u2190 Swipe horizontally to view full risk parameters \u2192<\/div>\n