By the way So mutual funds give decent returns to their investors, but still a large number of investors remain worried about their capital. People fear that their investment might be in some high-risk fund. Now SEBI is going to solve this problem of investors. Market regulator SEBI has proposed color coding to better reflect the risk level on mutual fund schemes. With this, investors will be able to easily know how much risk is there in which mutual fund scheme.
You can also invest a small amount every month in mutual funds through SIP. If you want, you can also use annual step up. In this, the monthly SIP amount has to be increased by a certain percentage every year. Generally, mutual funds provide an average annual return of 12 percent in the long term.
sought suggestions from people
SEBI has said that funds should show the level of risk in such a way that customers can easily understand. According to SEBI’s proposal, there will be color coding for 6 levels of risk. According to this, green color will indicate less risk and red color will indicate very high risk. If there is any subsequent change in the risk level of a mutual fund, this information will also be immediately informed to the investor. This information will be given through SMS or e-mail. With this, the investor will keep getting information about the risk level in his mutual fund from time to time. SEBI has sought suggestions from people on this proposal till October 18.
These will be the 6 levels of risk
- Green: low risk
- Light green-yellow: low to moderate risk
- Bright yellow: moderate risk
- Light brown: medium high risk
- Dark orange: high risk
- Red: very high risk
