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Has complicated jargon kept you away from mutual fund investment? Well, no more. Here is a glossary of mutual fund terms you should understand to begin a fulfilling investment journey.<\/p>\n\n\n\n
Asset Management Company<\/a> is a firm registered under SEBI. It uses the money pooled from individual investors to fund assets like shares, bonds, stocks, etc. based on a common objective. They are also called money management firms in common parlance.<\/p>\n\n\n\n The next commonly used jargon in our mutual funds<\/a> glossary <\/strong>is AUM or Asset Under Management.<\/p>\n\n\n\n It reflects the aggregate market value of all the assets a fund holds and manages at present. A fund’s AUM value is subject to change daily.<\/p>\n\n\n\n Benchmark offers a set of parameters for comparison. It offers a standard to analyse and compare the performance of a mutual fund online. A fund performs well when it surpasses its underlying benchmark index. NSE Nifty and BSE Sensex are two such benchmarks.<\/p>\n\n\n\n Additional Read: <\/strong>Understanding Mutual Fund Terminologies<\/a><\/p>\n\n\n\n Exit load is the fee you need to pay when redeeming a fund investment. However, the charges are usually different from one fund to another.<\/p>\n\n\n\n Also called Management Expense Ratio, Expense Ratio is the annual fee investors have to pay for fund operation and management. It is calculated as a percentage of the asset and covers legal costs, audit fees, advertising costs, insurance premiums, administration expenses, and other related charges.<\/p>\n\n\n\n Net Asset Value is the total value or price of a unit in a mutual fund scheme. It is calculated by dividing the AUM value by the number of units issued by the fund. Moreover, NAV is estimated after the end of a trading day, so its value changes every day.<\/p>\n\n\n\n Typically, the higher the NAV, the better the fund is performing.<\/p>\n\n\n\n This is a type of investment approach wherein you park a fixed amount in the same mutual fund irrespective of the per-unit cost. So you buy more units when the market is down and fewer units when the market is high. As a result, the total cost of purchase averages out.<\/p>\n\n\n\n A Systematic Investment Plan<\/a> is a route of investing in mutual funds at regular intervals instead of making a lump sum payment. Investors need to pay a fixed amount at a prespecified date to buy units of a particular scheme either weekly, monthly, quarterly, etc.<\/p>\n\n\n\n Additional Read: <\/strong>What is a Mutual Fund and How Does it Work?<\/a><\/p>\n\n\n\n It is a facility that allows investors to withdraw a specific amount at a specific date from their accumulated fund investment. They can choose to get the payment quarterly, monthly, bi-monthly, etc.<\/p>\n\n\n\n There! Now you’re familiar with some of the most common mutual fund terms. So, why wait any longer? Download the Moneyfy<\/a> app <\/strong>to begin your investment journey and experience the power of compounding over the long term.<\/p>\n\n\n\n2. AUM<\/strong><\/h2>\n\n\n\n
3. Benchmark<\/strong><\/h2>\n\n\n\n
4. Exit Load<\/strong><\/h2>\n\n\n\n
5. Expense Ratio<\/strong><\/h2>\n\n\n\n
6. NAV<\/strong><\/h2>\n\n\n\n
7. Rupee Cost Averaging<\/strong><\/h2>\n\n\n\n
8. SIP<\/strong><\/h2>\n\n\n\n
9. Withdrawal Plan<\/strong><\/h2>\n\n\n\n
Conclusion<\/strong> <\/h3>\n\n\n\n