Mutual fund encyclopedia
Glossary
Clear definitions for the language used across mutual funds, portfolios and investing.
Asset Allocation
The distribution of a portfolio across asset classes such as equity, debt and cash.
Academy glossaryAssets Under Management
The total market value of assets managed by a mutual fund scheme or fund house at a given time.
Academy glossaryBenchmark
A market index or reference portfolio used to evaluate a scheme’s performance and risk.
Academy glossaryCapital Gain
The difference between sale value and applicable acquisition cost when an investment is transferred, subject to tax rules.
Academy glossaryCompounding
The process through which returns can earn further returns when gains remain invested.
Academy glossaryDirect Plan
A mutual fund plan bought without distributor commission; it generally has a lower expense ratio than the regular plan of the same scheme.
Academy glossaryELSS
An equity-linked savings scheme with a statutory three-year lock-in and tax treatment subject to prevailing law.
Academy glossaryEquity Fund Taxation
The tax rules applied to gains and distributions from equity-oriented mutual funds under prevailing Indian law.
Academy glossaryExit Load
A charge that may apply when units are redeemed before a scheme-specific holding period.
Academy glossaryExpense Ratio
The annual operating cost of a mutual fund scheme expressed as a percentage of its average assets.
Academy glossaryFund Manager
The investment professional responsible for implementing a scheme’s investment strategy within its mandate.
Academy glossaryInvestment Risk
The possibility that an investment outcome differs from expectations, including loss, volatility or failure to meet a goal.
Academy glossaryLumpsum Investment
A one-time investment made into a scheme instead of a scheduled series of instalments.
Academy glossaryMutual Fund
A pooled investment vehicle that collects money from investors and invests it according to a stated scheme objective.
Academy glossaryNet Asset Value
The per-unit value of a mutual fund scheme after subtracting liabilities from the market value of its assets.
Academy glossaryPortfolio Concentration
The degree to which a portfolio depends on a small number of holdings, sectors or issuers.
Academy glossaryPortfolio Holding
A security or instrument disclosed as part of a mutual fund scheme’s portfolio.
Academy glossaryPortfolio Overlap
The extent to which two or more portfolios own the same securities, usually assessed using holdings and weights.
Academy glossaryRebalancing
Restoring a portfolio toward its intended allocation after market movement or changed circumstances.
Academy glossaryRiskometer
SEBI’s standardized label indicating the assessed risk level of a mutual fund scheme.
Academy glossarySharpe Ratio
A risk-adjusted measure comparing excess return with return volatility; it should be interpreted with comparable data and periods.
Academy glossarySystematic Investment Plan
A facility for investing a fixed amount in a mutual fund scheme at regular intervals.
Academy glossary