Markets regulator SEBI has now ordered mutual fund companies investing in commodities to disclose the risk. This risk o meter will be implemented immediately. A guideline has been issued for this. According to SEBI, just as risk is disclosed on investment in shares, in the same way, risk in commodities will also have to be disclosed. The risk o meter will be implemented on the basis of 15 years volatility in the benchmark of the commodity.
SEBI said that if the volatility in the commodity is less than 10 per cent, then the risk will be less. Whereas if there is a fluctuation of 10 to 15 per cent, then it will have to be told a little more. If the volatility is 15-20%, then again it will have to be placed in the higher risk column. Similarly, if the volatility exceeds 20 per cent, it will have to be placed in the high risk column.
In October 2020, SEBI had said that investment in gold and its related resources would require mutual fund schemes to disclose four types of risk. Till now such information was given on the investment of shares. In this, full information has to be given in the scheme on the respective risk.