Risk value of commodities: volatility based scoring now determines risk o meter levels for mutual fund commodity investments. Mutual fund investments in commodities must receive a risk o meter score derived from the commodity's annualized volatility computed quarterly using the past 15 years of the commodity's benchmark index. Volatility bands map to risk values: <10% = 3 (Moderate); 10-15% = 4 (Moderately High); 15-20% = 5 (High); >20% = 6 (Very High). The rule modifies the earlier Annexure A provision for gold and related instruments and takes immediate effect, requiring AMCs and trustees to apply the volatility based scoring.
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Risk value of commodities: volatility based scoring now determines risk o meter levels for mutual fund commodity investments.
Mutual fund investments in commodities must receive a risk o meter score derived from the commodity's annualized volatility computed quarterly using the past 15 years of the commodity's benchmark index. Volatility bands map to risk values: <10% = 3 (Moderate); 10-15% = 4 (Moderately High); 15-20% = 5 (High); >20% = 6 (Very High). The rule modifies the earlier Annexure A provision for gold and related instruments and takes immediate effect, requiring AMCs and trustees to apply the volatility based scoring.
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