Consultation paper: Draft guidance on risk indicators and descriptions of managed funds

First published 6 July 2015

Risk indicators are an important part of the disclosure information about managed funds. The indicators measure the volatility of past returns, which gives investors a simple tool for assessing and comparing the volatility of funds.  It is intended to help investors make investment decisions.

This consultation paper proposes guidance on how managed funds should describe a fund’s risk category, the methodology for calculating risk indicators, what to look out for when naming the funds to reflect their risk profile, and when to update investors when a fund’s risk category changes.

We are also seeking feedback from businesses on how to describe a fund’s volatility, how to name funds to reflect their risk profile, and the cost-benefit analysis of updating Product Disclosure Statements when a fund’s risk category changes.