How Is Risk Preference Determined?

Each fund carries a different level of risk depending on the financial instruments it includes. In the Capital Markets Board's investment funds guide, risk levels of funds are defined and ranked from “1” to “7,” from lowest to highest risk. You can select a fund that matches your risk perception.

A fund’s risk level is calculated based on its volatility — in other words, the degree of fluctuation in its returns. Weekly returns are used for this calculation. The volatility is determined by using the fund's returns over the most recent five-year period in which it has been active.