It has been decided that all the mutual funds shall ‘Label' their schemes on the parameters as mentioned under:
a. Nature of scheme such as to create wealth or provide regular income in an indicative time horizon (short/ medium/ long term).
b. A brief about the investment objective (in a single line sentence) followed by kind of product in which investor is investing (Equity/Debt).
c. Level of risk, depicted by colour code boxes as under:
• Blue - principal at low risk.
• Yellow - principal at medium risk.
• Brown - principal at high risk.
Few samples of product label for different schemes:
1. Enumeration of Product label of an Fixed Maturity Plan (FMP)
• Regular fixed income for short term.
• Investment in Debt/Money Market Instrument/Govt. Securities.
• Low risk. (BLUE)
2. Enumeration of Product label of a Hybrid Scheme
Long term capital appreciation and current income.
• Investment in equity and equity related securities as well as fixed income
securities (debt and money market securities).
• Medium risk (YELLOW)
3. Enumeration of Product label of an Equity Scheme
• Long-term capital growth.
• Investment in equity and equity-related securities including equity derivatives of
top 200 companies by market capitalisation.
• High risk. (BROWN)