Financial glossary

Every term, in plain English

74 words you’ll meet on fund pages, statements and policy documents — each with a short definition, a worked example where it helps, and the tools that put it to use.

Most looked up

21 of 74 terms in Mutual funds

Terms starting with A

AUM
Assets Under Management
The total market value of investments a scheme or fund house manages on behalf of investors at a point in time.
Mutual funds

Terms starting with D

Direct plan
The version of a mutual fund scheme bought directly from the fund house, with no distributor commission and so a lower expense ratio.
Mutual funds

Terms starting with E

ELSS
Equity Linked Savings Scheme
An equity mutual fund with a three-year lock-in whose investments can qualify for a tax deduction under the old tax regime, within limits.
Mutual funds
ETF
Exchange Traded Fund
A fund, usually tracking an index or holding gold or bonds, whose units are listed and traded on a stock exchange like shares.
Mutual funds
Exit load
A fee some mutual fund schemes charge if you redeem units within a specified period, deducted from the redemption amount.
Mutual funds
Expense ratio
The yearly cost of running a mutual fund scheme, shown as a percentage of its assets and deducted from the scheme before NAV is published.
Mutual funds

Terms starting with G

Growth option
A mutual fund option that keeps all gains invested in the scheme instead of paying them out, so returns show up entirely in the NAV.
Mutual funds

Terms starting with H

Hybrid fund
A mutual fund that invests across asset classes — usually equity and debt, sometimes gold — in proportions set by its category and mandate.
Mutual funds

Terms starting with I

IDCW
Income Distribution cum Capital Withdrawal
A mutual fund option that pays out distributions from time to time; payouts can include part of your own capital, not just income.
Mutual funds
Index fund
A mutual fund that aims to replicate a market index by holding the index’s constituents in the same proportions, at low cost.
Mutual funds

Terms starting with L

Liquid fund
A debt mutual fund that invests in very short-term money-market instruments, often used to park money needed soon.
Mutual funds
Lumpsum
Investing a single, larger amount at one time, rather than spreading it across instalments.
Mutual funds

Terms starting with N

NAV
Net Asset Value
The per-unit value of a mutual fund scheme, worked out from the market value of its holdings after expenses and published each business day.
Mutual funds

Terms starting with R

Regular plan
The version of a mutual fund scheme bought through a distributor; its expense ratio includes the distributor’s commission.
Mutual funds
Riskometer
A SEBI-mandated dial on every mutual fund scheme that shows its risk level on a six-step scale from Low to Very High.
Mutual funds
Rupee cost averaging
Investing a fixed amount at regular intervals, so you buy more units when prices are low and fewer when they are high.
Mutual funds

Terms starting with S

SIP
Systematic Investment Plan
A way to invest a fixed amount in a mutual fund at regular intervals, usually monthly, instead of investing everything at once.
Mutual funds
Step-up SIP
An SIP whose instalment rises at set intervals — usually yearly, by a fixed amount or percentage — so investing keeps pace with income.
Mutual funds
STP
Systematic Transfer Plan
An instruction to move a fixed amount at regular intervals from one mutual fund scheme to another within the same fund house.
Mutual funds
SWP
Systematic Withdrawal Plan
An instruction to redeem a fixed amount from a mutual fund at regular intervals, used to draw a steady cash flow from an existing investment.
Mutual funds

Terms starting with T

Tracking error
How much an index fund’s or ETF’s returns have deviated from its index over time; lower means it has followed the index more closely.
Mutual funds