What are Mutual Funds?
A mutual fund is an investment instrument , which pools money from various investors with common investment objectives that invested through a portfolio and managed by a professional fund manager.
Why to invest In Mutual Funds?
Following are the primary benefits of investing in mutual funds –
- Professional Investment Management: When you invest in a mutual fund, your money is managed by professional experts called fund manager.
- Low investment threshold: A mutual fund enables you to participate as little as Rs 500 and sometimes even lesser.
- Risk is diversified: Invesment made in mutual fund are thorugh portfolio that includes many companies from various sectors. By doing this investment risk is diversified.
- Convenience: Investing in mutual funds has its own convenience. You save amount of energy you invest in researching for the stocks, as well as actual market-monitoring.
What is NAV?
Net Asset Value is the market value of all the securities held by the Mutual Fund scheme. It is measured on a per-unit basis.
How Nav is calculated?
NAV is calculated by dividing the total net assets by the total number of units issued.
For example, if the market value of securities of a mutual fund scheme is Rs 500 crore and it has issued 10 crore units to investors, then the fund’s NAV per unit is Rs 50.
What is AUM?
AUM (Asest Under Management) – The total assets, owning by the mutual fund scheme is called AUM for that particular scheme.
What is SIP?
SIP or Systematic Investment Plan is a mode of investment that allows you to invest a fixed amound at a pre-defined intervals in the selected mutual fund scheme. An investor can start SIP of as low as Rs.500/ month.
How to select the right SIP for investment?
To select right SIP amount and right fund scheme depends on few factors like your income and expenditure, your financial goals, your age, risk taking capacity etc. We recommend one to speak to a professional wealth advisor before making any investment.
Is a higher or lower NAV better?
By having higher NAV, one would have lesser number of units in hand. Yes, a lower NAV would give you more units, that probably gives more potential to work better.
What is KYC compliance for a Mutual Fund?
The KYC process is your first step towards investing in mutual funds. As a new investor, you should approach a KYC registration agency (KRA) to complete the formalities. It is usually a one-time process for mutual fund investors.
What is Aadhaar-Based Ekyc Process?
To speed up the process, you could opt for the Aadhaar-based electronic KYC (eKYC).
For this, you need to visit the KRA’s website and find the section dealing with KYC proceedings. Fill in your basic details: your name, contact details, PAN card number, linked bank account number, and so on. If you are not KYC-compliant, the site will request you to provide your Aadhaar card number and registered mobile number.
A one-time password (OTP) will then be sent your registered mobile number. You must provide authentication by entering this OTP and your pin code.
Following this, you will have to upload a self-attested copy of your e-Aadhaar and provide your consent to the further processing. The KRA will automatically verify your details with the UIDAI database.
What is AMFI?
Association of Mutual Funds in India – A regulatory body for Indian Mutual Funds Industry.
What is ARN?
AMFI Registration Number – A registration no. given by AMFI to beocome authorised Mutual Fund Distributor.
What is EQUITY FUND?
A mutual fund that invest the amount in Equity shares only. On basis of stock’s categories there are different type of Equity funds like – Large Cap Mutual Fund, Mid Cap Mutual Fund, Small Cap Mutual Fund.
What is DEBT FUND?
Debt Fund is a mutual fund that invests the fund with guaranteed return instruments like bond, NCDs and short term fund.
What is Balanced Fund?
A Mutual fund that invest the amount in Stocks and Debt fund. Also know as Hybrid Fund.
What is Blue Chip?
Shares of large and well recognized companies, generally having high net-worth and pays regular dividend to their share holders.
What is CAGR?
|Compounded Annual Growth Rate ( A contant average rate of return over the period of time )|
What is Capital Gain?
Increase in the value of investment and can be calculated as difference between purchase price and sold price.
What is Close-ended Fund?
A mutual fund having fix investment term and can be bought through NFO only and can not be redeem before a maturity period.
What is ELSS?
Equity Linked Saving Scheme – A Mutual fund that provide facilities for tax saving investment with locking period of 3 year only.
What is ETF?
Exchange traded funds – That allows to investor to purchase and sold Mutual fund through trading account.
What is Beta?
A measurement to measure the performance of investment. It helps us to measure volatility of portfolio.