Mutual fund glossary, A to Z

Jump to a letter: A · B · C · D · E · F · G · H · I · K · L · N · R · S · T · U

A

AMC (Asset Management Company) - the company that runs a mutual fund and manages its portfolio.

ARN (AMFI Registration Number) - the number identifying a registered mutual fund distributor. See verify an ARN.

AUM (Assets Under Management) - the total value of the money a fund or fund house manages.

B

Benchmark - the market index a fund is measured against, such as a broad equity index.

C

CAS (Consolidated Account Statement) - one statement of all your holdings across fund houses. See CAS.

Compounding - earning returns on your past returns, so growth builds on itself over time.

Corpus - the total pool of money in a fund, or the total you have accumulated.

Cut-off time - the daily deadline that decides which day's NAV applies. See cut-off timing.

D

Debt fund - a fund investing mainly in bonds and money market instruments. See debt funds.

Direct plan - a plan bought without a distributor, with a lower expense ratio and no distributor to help. See regular vs direct.

Diversification - spreading money across many holdings so no single one dominates your risk.

E

ELSS (Equity Linked Savings Scheme) - a tax-saving equity fund with a lock-in. See ELSS and 80C.

Equity fund - a fund investing mainly in company shares, aiming for long-term growth.

EUIN - the number identifying the individual who advised your transaction. See what is an EUIN.

Exit load - a charge for redeeming within a set period. See exit load.

Expense ratio - the annual cost of a fund, taken as a share of its assets. See expense ratio.

F

FIFO (First In, First Out) - the rule that your earliest units are redeemed first. See FIFO.

Folio - your account number with a fund house, holding your units.

G

Growth option - the option where gains stay invested rather than being paid out, so units grow in value.

H

Hybrid fund - a fund holding a mix of equity and debt.

I

IDCW (Income Distribution cum Capital Withdrawal) - the option that periodically pays out, formerly called dividend.

Index fund - a fund that tracks an index rather than trying to beat it. See index funds and ETFs.

K

KYC (Know Your Customer) - the one-time identity verification before investing. See KYC.

KRA (KYC Registration Agency) - the central body that holds your KYC record.

L

LTCG (Long-Term Capital Gains) - gains on units held beyond the long-term threshold. See LTCG.

Liquid fund - a debt fund investing in very short-term instruments, used for parking money.

Lock-in - a period during which you cannot redeem, as with ELSS.

N

NAV (Net Asset Value) - the per-unit price of a fund. See what is NAV.

NFO (New Fund Offer) - the launch period of a new scheme. See what is an NFO.

Nomination - naming who receives your units if you die. See nomination.

R

Regular plan - a plan bought through a distributor, whose expense ratio includes trail commission.

Riskometer - the gauge showing a scheme's risk level, from Low to Very High. See riskometer.

RTA (Registrar and Transfer Agent) - a registrar such as CAMS or KFintech that processes servicing.

S

SIP (Systematic Investment Plan) - investing a fixed amount regularly. See what is a SIP.

STP (Systematic Transfer Plan) - moving money between funds systematically. See what is an STP.

STCG (Short-Term Capital Gains) - gains on units held within the short-term threshold. See STCG.

STT (Securities Transaction Tax) - a small levy on equity fund transactions. See STT.

SWP (Systematic Withdrawal Plan) - drawing a regular income by redeeming units. See what is an SWP.

T

Trail commission - the ongoing commission a distributor is paid by the fund house. See how distributors are paid.

Tracking error - the small gap between an index fund's return and its index.

U

Units - the shares of a fund you own; their price is the NAV.

If a term you need is missing, ask us and we will explain it and add it.