This concept is used to calculate the correlation between the scheme of the mutual fund and the index of the benchmark calculated between 0 and 100. R-squared of 100 means that the mutual fund moves in accordance with the index of the benchmark and R-squared of 0 means the least correlation.
An investment's pace of growth, usually on an annual basis, expressed in other words on a hundred- or percentage-based basis.
After evaluating their creditworthiness as disclosed by the ratings, mutual funds invest in securities. The fund's rating profile becomes a depiction of the mutual fund in different investments based on their ratings. This is typically a debt fund feature.
A date on which a company's records are to be closed in order to determine the stockholders to whom are to be sent dividends, proxy rights, etc.
A device which can be sold back to the issuer.
A tax was imposed on a security's redemption.
If a mutual fund investor wants to leave his investment in the mutual fund, he can sell the units back to the mutual fund and receive cash. The mutual fund "repurchases" its units and its units are said to be "redeemed" by the investor.
The return of cash to the payer after a payment has been closed / failed.
Reinvestment is the process of equity investors or fixed-income securities reinvesting the intermediate disbursements they receive from their investment in the form of dividends, interest or coupon payments, capital gains, bonuses, etc. to purchase more units of the same investment, whether it is a stock or bond or any other security.
Reinvestment in fixed income assets such as bonds is very important as bonds have a daily coupon payment schedule that is set and guaranteed. A bond's YTM or yield-to-maturity is the expected return that an investor will obtain by holding the bond to maturity and reinvesting all the YTM coupon payments. The investor has to reinvest all the coupon payments that he/she receives from the bond at the interest rate available that may differ from the bond's coupon rate.
Assume an investor has purchased Energy Grid Pvt bonds. Ltd. with a face value of ' 1,000 which has a 3-year maturity and a 10 percent coupon premium charged semi-annually. The investor will receive ' 50 as a coupon payment every six months to be reinvested at the interest rate available. When market interest rates drop and therefore newly issued Energy Grid bonds deliver an 8 percent coupon, then the shareholder ends up reinvesting the ' 50 coupon sum in the newly issued bonds providing a 2 percent lower coupon. Reinvesting here would mean buying additional units of the bond for ' 50. At this point, the bond's current market price would be less than its face value of ' 1,000 as the bonds offer a lower coupon (8%) than the previously issued bonds (10%).
Therefore, creditors are vulnerable to interest rate volatility in the case of bond investment when reinvesting their coupon earnings until the bond maturity when they finally get back their principal.
If a mutual fund shareholder wants to leave his investment in the mutual fund, he can sell the units back to the mutual fund and receive cash.
Under this system, the investor buys fund units at regular intervals instead of buying them all at the same time. This allows him to take advantage of the unit price increases and decreases. Sales at low prices cover purchases made at high prices so that the units can be purchased at reasonable average value.