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A riskometer is a graphical representation of the risk level of a mutual fund scheme.
A mutual fund scheme’s risk level can be calculated in six phases, according to the latest riskometer introduced by Sebi in 2021: low, low to moderate, moderate, moderately high, high, and very high.
Mutual fund companies determine the risk level on the riskometer based on the scheme’s characteristics.
On the riskometer, for example, the risk level of equity funds is mostly between moderately high to very high.