Sebi asks debt MFs to do a second risk-assessment label for investors

At present, they have to follow the only the risk-o-meter labelling system

The Securities and Exchange Board of India (Sebi) has directed mutual funds (MFs) to introduce another label called as potential risk class matrix to help investors assess risk better. At present, MFs have to follow the only the risk-o-meter labelling system.

The potential risk class matrix will consist of parameters based on maximum interest rate risk (measured by Macaulay Duration, or MD of the scheme) and maximum credit risk (measured by Credit Risk Value (CRV) of the scheme). This decision was taken based on the recommendation of the Mutual Fund Advisory Committee (MFAC) and discussions held with the mutual fund