A Survey Reveals a Little-Known Tool to Shield Mutual Fund Investors from Losses

While more and more people are investing in mutual funds, they are unaware of the risk-o-meter, a crucial tool to prevent losses.


The data reveals that the number of mutual fund investors in India has increased a lot recently, indicating the growth potential. However, most investors overlook an important factor while investing- the risk-0-meter. 


  • 61% of the Axis Mutual Fund survey lacked risk-o-meter awareness.
  • It reveals that investors still prioritise past performance and express limited confidence in assessing personal risk when choosing mutual funds.
  • Only a mere 16% of the overall respondents were familiar with the concept of a 'Riskometer'

What is Risk-O-Meter?

The Riskometer serves as a visual depiction of the level of risk associated with a mutual fund. This graphical representation adheres to the guidelines set forth by the Association of Mutual Funds in India (AMFI).

Its design draws a parallel with a vehicle's speedometer, featuring five distinct risk levels, each uniquely represented by a corresponding colour. Green indicates low risk, moderately low is denoted by light green while yellow shows moderate level of risk. Orange indicates moderately high risk and red indicates high risk. It measures various types of risks as debt funds, rebalancing, currency, equity funds, and more. 

Key Findings of the Survey

According to a survey conducted by Axis Mutual Fund, a significant 61% of the participants lacked awareness regarding the meaning and significance of the risk-o-meter. Interestingly, only a mere 16% of the overall respondents who were familiar with the concept of a 'Riskometer' and its connection to assessing fund risk admitted to routinely consulting it before making investment decisions. Nevertheless, there is a glimmer of hope as 66% of the investors expressed a keen interest in gaining a deeper understanding of the risk-o-meter and its pivotal role in enabling informed investment choices.

Also Read: Best Methods for Evaluating Risks in a Long-Term Investment

A notable finding from the survey is that 59% of investors continue to regard past performance as a crucial benchmark when it comes to making investment decisions in mutual funds. However, one needs to bear in mind that past performances can hardly indicate steady future performances. 

Indeed, the survey's results highlight that a significant 53% of investors lack a high level of confidence in their ability to assess personal risk when selecting a mutual fund. 

Also Read: 8 Mid Cap Funds with Over 23% Returns

The Bottom Line:

The survey report underscores the importance of recognising that each investor possesses a unique risk tolerance, which is influenced by factors such as their investment profile, financial objectives, and individual needs. The Axis Mutual Fund survey underscores the imperative of enhancing risk comprehension among investors. This is of paramount importance, given that the survey reveals a significant number of investors base their decisions on market noise, a behaviour that can potentially exacerbate volatility within the mutual fund market.

Read more articles on mutual funds here.


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