Risk Profile

The type of mutual fund you should select depends on:

• your risk profile
• the risk profile of your funds

Your risk profile depends on your:

• age
• income
• location
• dependents

How is risk related to mutual funds investments?

Basically, if a mutual fund has a higher level of risk, it is better to invest in it for a longer period of time.

Similarly, if the mutual fund risk is low or moderately low, they can give stable returns and are better for short-term investments.

Does the risk concern the returns or the invested amount?

• The risk levels measured by the riskometre are on your principal (actual invested amount)

• If the riskometre indicates high risk, it means there is an increased risk of loss from your principal amount invested in that mutual fund.

• Therefore, it is better to understand mutual funds, the risk, terms and conditions well before investing. 

You must have heard this line spoken at the end of every mutual fund advertisement:

“Mutual fund investments are subject to market risk. Please read the offer document carefully before investing.”