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Mutual Fund - Glossary

Mutual Fund - Fillable Forms

Benefit of Use of Fillable Forms -

  1. No risk of wrong records due to illegible or unclear filled forms
  2. They are free from cutting & overwriting which may create problem at the time of redemption

Understanding various terms of Mutual Fund (MF)

What is Mutual fund and why to invest in Mutual Fund

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An evaluation of a scheme in relation to a parameter. The rating could be done in respect of the creditworthiness of debt instruments, risk of loss in an investment or the performance of an investment.

record date

The date considered as a cut-off date for taking into account the unit holders of a fund who would be entitled to any benefit or who would be considered for any other purpose.

redemption of units / repurchase

Buying back/cancellation of the units by a fund on an on-going basis or on maturity of a scheme. The investor is paid a consideration linked to the nav of the scheme.


The act of returning money to an investor by the fund. This could be on account of rejection of an application to subscribe units or in response to an application made by the investor to the fund to redeem units held by him.


An agent appointed by the trustees of a mutual fund in consultation with the AMC or by the companies for the purpose of handling the records of the unit holders or shareholders.

repurchase date /period

In the case of close-ended schemes, the specified date on which or period during which the investor can redeem units held by him in the scheme before the maturity of the scheme.

redemption / repurchase price

The price of a unit (net of exit load) that the fund offers the investor to redeem his investment.


sales charge

A charge added on to the price of a mutual fund when you buy it.


Securities and exchange board of India established under securities and exchange board of India act, 1992.

sector funds

schemes of mutual funds that invest predominantly in a particular industry or sector of the economy such as information technology, pharmaceuticals, fast moving consumer goods etc. these funds tend to be more volatile than funds holding a diversified portfolio of securities across many industries, but may offer greater potential returns. These funds should be considered only if one has a relatively higher risk appetite.


The holdings of a mutual fund, such as stocks or bonds. Stocks are securities representing ownership shares. Bonds are securities representing a contractual debt obligation of the issuer to repay the holder, with interest.


The owner of shares of stock or shares of a mutual fund.


Units of ownership in a corporation or a mutual fund. In a mutual fund, the value of each unit is calculated by dividing net assets by the number of shares.

share ratio

Statistical measure of a portfolio's historic "risk-adjusted" performance. Calculated by dividing a fund's excess return by the standard deviation of those returns. This is a measure of return of a portfolio given the risk taken by it. The higher the ratio, the better the portfolio.

standard deviation

This is a measure of deviation or historic volatility of a portfolio. It measures the dispersion of a fund's periodic returns from its mean value. The wider the dispersion, the higher the standard deviation and thus higher the risk. Lower standard deviation is therefore preferred.


Stocks represent a part equity ownership of a corporation. when someone holds stocks of a certain company, it means that he/she owns shares of that company and therefore becomes a part owner of that company in proportion to his/her holding. These securities generally have the most potential for capital appreciation, but their rights are subordinated in the event of a company liquidation or bankruptcy.


It is the transfer of one's investment from one scheme to another.

systematic investment plan (sip)

A systematic investment plan allows an investor to buy units of a mutual fund scheme on a regular basis by means of periodic investments into that scheme in a manner similar to installments paid on purchase of normal goods. The investor is allotted units on a predetermined date specified in the offer document of the scheme. Here the plan allows the investor to take advantage of the rupee cost averaging methodology.

Systematic encashment/Withdrawal plan (SEP/SWP)

A systematic encashment / withdrawal plan permits the investor to receive a pre-determined amount / units from his investment in a mutual fund scheme on a periodic basis. Retirees in need of a regular income often opt for this.

systematic transfer pan (STP)

A stp allows the investor to transfer a pre-determined amount from his investment in a mutual fund scheme to another mutual fund scheme (of the same company) on a periodic basis. This plan is generally used to transfer sums from a money market / liquid / cash scheme to another scheme.

securities transaction tax (STT)

Tax levied on your equity mutual fund investment, equity shares and derivatives.

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