- Mutual Fund: A mutual fund is an investment vehicle that pools money from many investors to invest in a diversified portfolio of assets such as stocks, bonds, or other securities. These funds are professionally managed by fund managers of an AMC to help investors earn returns in line with their goals and risk tolerance.
- AMC (Asset Management Company): The company that manages the mutual fund, makes investment decisions, and ensures the fund meets its goals.
- SIP (Systematic Investment Plan): A method of investing a fixed amount regularly in a mutual fund to build wealth over time. It helps build long-term wealth through disciplined investing. You can invest in fractional shares, benefit from rupee cost averaging, and automate your investments just like mutual fund SIPs.
- Lump-sum Investment: A one-time investment in a mutual fund, ideal for investors with large capital aiming for long-term returns.
- AUM (Assets Under Management): The total value of all assets managed by a mutual fund; it shows the fund's size and investor confidence.
- NAV (Net Asset Value): The price per unit of a mutual fund, calculated by dividing total assets minus liabilities by the number of units.
- Units: Represent your share of ownership in a mutual fund, based on how much you've invested.
- STP (Systematic Transfer Plan): Allows automatic transfer of a fixed amount from one mutual fund to another, helping with risk management and portfolio rebalancing.
- SWP (Systematic Withdrawal Plan): Lets you withdraw a fixed amount regularly from your mutual fund, creating a steady income stream.
- Expense Ratio: A yearly fee (percentage of your investment) charged by the fund to cover its operating costs. Lower ratios mean better returns.
- Entry Load: A fee for buying into a mutual fund. Many funds no longer charge this.
- Exit Load: A fee for redeeming mutual fund units early. It discourages short-term investing.
- NFO (New Fund Offer): The initial offer when a new mutual fund is launched, similar to a stock IPO.
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