Tata MF, Union Mutual Fund announce change in scheme Risk-o-meters

NEW DELHI: Tata Mutual Fund and Union Mutual Fund have announced revisions in the Risk-o-metres of a few of their schemes. This had been initiated to reflect the change in risk levels of these schemes subsequent to evaluation.

The Risk-o-metre, a risk gauge introduced by Sebi, gives investors an overall idea of the risk associated with a scheme. Mutual fund AMCs have been displaying a pictorial risk-o-meter for all their schemes in monthly factsheets since January 2021. The Risk-o-metre comes with six levels of risk – low, low to moderate, moderate, moderately high, high and very high. It is an indicator of risk associated with the portfolio of a mutual fund scheme and not the category to which the scheme belongs.

The Risk-o-metre takes into account factors such as market capitalisation, impact cost and volatility to gauge the risk level for equity funds. For debt funds, factors such as credit risk, liquidity risk and interest rate risk are considered to measure the level of risk. Sebi has mandated that the Risk-o-meter be reviewed on a monthly basis.

The risk level for Tata Balanced Advantage Fund has been changed from very high to moderately high, for Tata Dynamic Bond Fund from moderately high to low- to-moderate, and for Tata Gilt Securities Fund from moderate to low-to-moderate, as per the revised Risk-o-metres for these schemes. This has come into effect from 10 September. That is, the risk level for all three schemes has been revised downwards.

Based on the monthly evaluation dated 31 August, the Risk-o-metre for Union Balanced Advantage Fund has changed from very high to moderately high and that for Union Dynamic Bond Fund has changed from low-to-moderate to moderate. In case of Union Money Market Fund, the Risk-o-meter of the benchmark index, CRISIL Money Market Fund BI Index has changed from moderate to low-to-moderate.

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