True-To-Label Simplified For You

You get what you see

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Have you ever been disappointed when the meal you ordered at a restaurant didn’t look as attractive as the images of it placed strategically on the menu card. Or just shrieked with frustration when the diet drink that you gulp down every morning didn’t quite shrink your vital stats to the same as the woman on the cover of the bottle? I mean, there is no way you would have known better. The label denoted to make you look like the woman in the picture. As consumers, we often take advertisements with a pinch of salt and grant advertisers a certain degree of poetic license. However, would you be as forgiving if the same thing happened in the case of financial services too?

When it comes to your hard-earned money, you deserve financial products and services that deliver as per their disclosure. For example, if you put your money in bank, you would expect it to be safe and earn interest. Similarly, when you invest in a mutual fund scheme, you would expect the scheme to stay true to its disclosures. For example, let us say that a particular scheme’s riskometer points to moderate risk. A true to label fund will abide by this disclosure and will endeavour to build an investment portfolio that has a moderate risk profile so that investors who choose to invest in this scheme get the indicated risk exposure. Thus, a fund is considered to be true to label if it stays committed to what it shows to its investors.