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Capital markets regulator Securities and Exchange Board of India (Sebi) has tweaked its product-labelling system for mutual fund products. The two-year-old colour coding system will now be replaced by a graphic called 'riskometer' with effect from July.
Under the new system, a 180-degree scale and arrow will be used to help investors take a decision based on their risk appetite.
The arrow will point towards the left-hand side to denote low-risk schemes, while it will move towards the right as the risk level increases. The new system will have five categories as opposed to just three earlier:
