How does MC30 measure risk in a mutual fund?

MC30 recommends a list of 30 investment-worthy MF schemes, which are shortlisted after going through a rigorous risk and return-testing process. It hand-holds the investor in getting into the finer aspects of every scheme – risks, returns and fund strategies. With respect to risk, MC30 is more concerned about the downward risk of returns. It looks at the Sortino ratio of funds which is a popular risk-return measure that accounts for a fund’s return over its downside risk. The MC30 also takes into account the cash level of the portfolio, stocks and sectors wise concentration and, allocation to securities that are rated AA and lower.