This is the value the mutual fund offers to shareholders units of a scheme.
Fees paid by a purchaser of shares in a load mutual fund to a brokerage house.
This is an information document, prepared on the launch of a new scheme by a mutual fund. It provides all the details of the scheme, such as price, time period, purchase method, etc. The fund must send this report to SEBI before the scheme is launched to receive its observation. Before investing in the scheme, investors are advised to read this document thoroughly.
It is India's Acronym for the Securities and Exchange Board, which is India's capital market regulator.
A fund that invests primarily in companies engaged in a specific investment segment's securities. Sector funds entail more uncertainty, but may provide more potential returns than funds diversifying their portfolios.
A sector fund invests as specified in the investment objective in securities of a particular sector or industry such as Fast Moving Consumer Goods (FMCG), pharmaceuticals, information technology, etc.
An investment scheme which invests in stocks of companies working in a particular sector or market is called a sector fund. A pharmaceutical fund, for example, would only invest in pharmaceutical companies.
These are financial instruments (equity stocks, bonds, etc.) that investors can buy or sell on the open market.
Whenever a security is bought or sold on a stock exchange, the purchase / sale is paid with a tax called Security Transaction Tax (STT).
A mutual fund that allows for more than one portfolio in its prospectus. Portfolios may be either specialized (Sector Fund) or broad (growth stock, together with a portfolio on the money market). Management can, as it sees fit, create additional portfolios.
The Sharpe Ratio is a calculation of risk-adjusted returns, named after its author, the Nobel laureate William Sharpe. To determine reward per unit of risk, it is calculated using standard deviation and excess return.
A mutual fund that specializes in securities of a particular industry or industry group or special securities types.
Standard deviation is a statistical measure of the performance range of an investment. If a mutual fund has a high standard deviation, it means that its performance range is wide, which implies greater volatility.
This is an extra file to a mutual fund scheme's key bid report. This includes additional information or modifications about the scheme and its activities.
A mutual fund invests mainly in shares.
A financial security that represents a part of a company's ownership.
This indicates that a fund will accept the smallest allowable additional purchase in an existing account.
Switching refers to the process of transferring the funds within the same Mutual Fund from one Mutual Fund scheme to another. If both schemes are managed by the same AMC i.e. they belong to the same fund house, you can switch or move your investments from one scheme to another.In order to switch funds, the shareholder must fill out a transfer form specifying the quantity / number of units to switch from the source scheme and the destination scheme name.
Switching is known to be an origin scheme selling or redemption and a destination scheme purchase. Therefore, for both switch-in and switch-out schemes, one must meet the minimum investment sum requirements. Exit-load and capital gains tax may have consequences when swapping as it is a sales payment for the origin scheme.
Apparently, moving between two schemes that belong to two separate fund houses is not feasible.
This is an option for mutual fund investors to switch their investments between schemes offered by the same mutual fund and/or options (dividend payout, dividend reinvestment and growth) either in whole or in part.
Many mutual funds offer programs for withdrawal by which shareholders receive payments from their investments. Generally, these payments are extracted from the dividend income and capital gain distributions of the company, if any, and only if necessary from the principal.
The idea of a structured investment plan parallels periodic bank deposits in which investors regularly contribute a fixed sum of money. SIPs make the timing of the market insignificant when one invests in the high and low points of the economy, making the best of an opportunity that is otherwise hard to predict. SIPs help investors resolve uncertainty and minimize portfolio losses by averaging the price â€ "the term is commonly referred to as the" rupee value average "â€" as investors buy more units when the NAV is small and less units when the NAV is large. SIPs provide a simple and disciplined way of generating higher risk-adjusted returns and achieving the desired objectives.
A Systematic Transfer Plan (STP) allows you to transfer a fixed number of units or sum from your portfolio into one Mutual Fund scheme each month to another scheme run by the same fund house on a predetermined day.
By investing a lumpsum amount in a mutual fund scheme and giving instructions to the fund house to move a fixed number of units or amount from that investment to the destination scheme, you can launch an STP.As a result, your account balance in the origin scheme i.e. the scheme in which you made the lumpsum investment slowly decreases every month as your investment in the destination scheme gradually increases each month.The STP automatically stops when all the money has been transferred over a period of time from the source scheme to the destination scheme.
STP is a risk mitigation strategy that allows you to move your investments from an equity fund to a debt fund or vice versa depending on your market outlook. Usually, STP is done by investing a lump sum in a debt scheme and transferring the money to an equity scheme over time or vice versa.
If you have a large amount of money to invest, STP is best advised, but you are not sure how the market will move once you have invested your money. So, you move or switch your money gradually over time from one scheme to another in a phased way.