To enhance investor awareness and curb mis-selling, the Securities and Exchange Board of India (SEBI) now requires mutual funds to disclose risk-adjusted returns (RAR) alongside their scheme returns. RAR provides a comprehensive measure of a scheme’s performance by showing the returns generated per unit of risk. Currently, mutual funds are not mandated to report RAR, leading to inconsistent disclosure practices among asset management companies (AMCs). SEBI’s proposal, open for public comment until July 19, suggests using the Information Ratio (IR) to standardize RAR reporting.
SEBI Mandates Risk-Adjusted Return Disclosure for Mutual Funds
![](https://affairsace-media.s3.ap-south-1.amazonaws.com/2024/06/30090018/newindianexpress_2024-06_ade5f305-118a-4481-9ebb-8e06f720da55_Sebi-ezgif.com-avif-to-jpg-converter-860x831.jpg)