Hi friends,
This is the consolidation of all the terms used in Mutual fund related investments
Hope you find it useful!!
Terms
Descriptttion
Account Statement
It is the document issued by the mutual fund, giving details of various transactions and holdings of an investor in schemes of the fund.
Adjusted NAV (Total Return)
The Net Asset Value of a unit adjusting for all changes caused due to dividend declaration, bonus etc. assuming reinvestment of distributions made to the investors at the prevailing NAV.
Age of Fund
The time elapsed since the inception of the fund.
Alpha Coefficient
Defined by Jenson in his portfolio evaluation model, it is the excess return of the fund above risk adjusted market return, given its level of risk as measured by beta. An investment with a positive alpha indicates that the fund has performed better than expected and a negative alpha indicates that the fund has under performed, for the level of risk taken by it.
Annual Report
It is the yearly record of a Mutual Fund's performance in an year. Under SEBI's guidelines, it is distributed to investors and/or shareholders.
Annual Return
The percentage change in net asset value of any fund over a horizon of one year, assuming reinvestment of distribution such as dividend payment and bonuses.
Annualized Returns
It is the absolute return over a period either greater or less than a year aggregated to a period of one year.
Applicable NAV
The applicable NAV, if the application is received before that cut-off time on a day as set by the fund. All investments or redemptions are processed at that particular NAV. A different NAV holds if received thereafter.
Asset Allocation
It is a means of diversifying the risk associated with a fund and refers to the distribution of total funds available with the fund into instruments of various types such as stocks, bonds etc. based on the funds investmetn objective.
Asset Management Company (AMC)
It is the investment manager for the mutual fund. It is a company set up primarily for managing the investment of mutual funds and makes investment decisions in accordance with the scheme objectives, deed of Trust and other provisions of the Investment Management Agreement.
Automatic Investment Plan
A plan introduced in mutual funds that enables the investor to give the mandate of allotting fresh units at specified intervals (monthly, quarterly) against which the investor provides post-dated cheques. On the specified dates, the cheques are realized by the mutual fund and on realization, additional units are allotted to the investor at the prevailing NAV.
Automatic reinvestment plan
An investment option available to mutual fund unitholders in which the proceeds from either the fund's dividends, bonus etc. are automatically used to buy more units of the fund.
Average cost method
It is the method of finding out the cost per unit by adding up all the costs involved in purchasing all the units of investment and then dividing the sum by the total number of units.
Average Credit Quality
A measure of the creditworthiness of the debt securities held by a debt fund. It is the weighted average of the credit ratings of the securities given their relative weights in the portfolio. For these calculations, Government of India securities, cash and call money instruments are taken as AAA credit quality and non-rated debt instruments are taken as having BBB credit quality.
Balance Maturity Tenure Of A Scheme
It is defined In the case of close-ended schemes as the balance period till the redemption of the scheme.
Balanced Funds
A class of mutual fund that aims at allocating the total assets with it in the portfolio mix of debt as well as equity instruments.
Bear Market
It is a period in market when investors are on a selling spree and the share prices are going down.
Benchmark
It is the platform or the parameter with which a scheme can be compared. For example, the performance of an index fund can be benchmarked against the appropriate index specified by it.
Beta
It is the measure of the relative sensitivity of a stock or mutual fund to the market. The market is assigned a beta of 1. The higher the beta, the more sensitive the stock or fund is considered to be relative to the market as a whole. In other words, funds with beta more than 1 will react more to any fluctuaitons (whether upward or downward) in market than funds with beta less than 1.
Blue Chip Stock
Usually a high priced scrip of a major corporation with a long, fairly stable record of earnings and dividend payments and with good expected future growth..
Bond
An interest-bearing promise to pay a specified sum of money due on a specific date in the future (maturity date).
Bonus
Bonus is allocation of additional units to the investors on the basis of their existing holdings. Basically, there is a split of existing units into more than one unit resulting in the reduction of the NAV per unit.
Broker
A broker is an intermediary who guides the investors on one or more investment avenues available to an investor and facilitates the process of investment.
Brokerage
It is the fee payable to a broker for acting as an intermediary in a transaction (normally a buy transaction). For example, brokerage is paid by a fund to a broker for getting fresh investments from investors.
BSE Index
A index reflecting the stock prices of 30 companies listed on the Bombay Stock Exchange (BSE) which is taken to be representative of the stock market movement. It is usually considered as the benchmark forperformance evaluation of equity funds.
Bull Market
Period during which the prices of stocks in the stock market keep continuously rising for a significant period of time on the back of sustained demand for the stocks.
Capital Gains
The profit realizations on sale of securities and certain other capital assets (including units of mutual funds) are called capital gains. The gains can be classified into long-term or short-term depending on the period of holding of the asset and are charged to tax at different rates. Gains on mutual fund units held for a period of 12 months or more are long-term gains.
Certificates of Deposit (CD)
Certificate of Deposit (CD) is issued by scheduled commercial banks excluding regional rural banks. These are unsecured negotiable promissory notes. Bank CDs have maturity of 91 days to one year, while those issued by DFIs have maturities between one and three years.
Close-Ended Schemes
These schemes have a pre-specified maturity period. One can invest directly in the scheme at the time of the initial issue. Depending on the structure of the scheme there are two exit options available to an investor after the initial offer period closes. Investors can transact (buy or sell) the units of the scheme on the stock exchanges where they are listed. The market price at the stock exchanges could vary from the net asset value (NAV) of the scheme on account of demand and supply situation, expectations of unitholder and other market factors. Alternatively some close-ended schemes provide an additional option of selling the units directly to the Mutual Fund through periodic repurchase at the schemes NAV; however one cannot buy units and can only sell units during the liquidity window. SEBI Regulations ensure that at least one of the two exit routes is provided to the investor.
Commercial Paper
Commercial paper (CP) is a short term, unsecured instrument issued by corporate bodies (public & private) to meet short-term requirements of working capital. Maturity varies between 3 months to 1 year. CP is issued at a discount. These can be issued to any
Compliance Officer
He is the officer appointed by the AMC to comply with various regulatory requirement and to redress investor grieviences associated with the funds.
Contingent Deferred Sales Charge (CDSC)
It is the sales load charged by funds in the event of redemptions made within a pre-specified period of purchase. This charge is linked to the period of unit-holding and generally has an inverse relation with the holding period.
Corpus
The total amount of money invested by all the investors in a scheme.
Cost Of Churning/Turnover cost
It refers to the costs associated with the churning (or changes made to the holdings) of the portfolio. Portfolio changes have associated costs of brokerage, custody fees, transaction fees and registration fees, which lower the returns. The quantum depends on the managementstyle of teh fund manager.
Coupon Rate
The annual rate of interest payable on a debt security, expressed as a percentage of the face value of the instrument.
Current Load
It refers to the load structure applicable currently on any fund. Funds keep revising the load structures from time to time.
Current Yield
The ratio of interest to the actual market price of the bond expressed as a percentage: annual interest/ current market value = current yield
Custodian
The keeper of a fund's securities and other assets.
Cut off Time
In respect of all mutual funds regulated by SEBI, fresh subscripttttttions and redemptions are processed at a particular NAV. Every fund specifies a cut-off time in respect of fresh subscripttttttions and redemption of units. All requests received before the cut-off times are processed at that day's NAV and thereafter at the next day's NAV.
Debt /Income Funds
Funds that invest in income bearing instruments such as corporate debentures, PSU bonds, gilts, treasury bills, certificates of deposit and commercial papers. These funds are the least risky and are generally preferred by risk-averse investors.
Discount
When the market price of a listed scheme is less than the actual NAV of the units, then it is said to be tradiing at a discount.
Diversification
Spreading the risk; Mutual funds spread investments among a number of different securities to reduce the risk inherent in investing.
Dividend Distribution Tax
A tax payable by a debt oriented mutual fund (a mutual fund that invests more than 50% of its portfolio in the debt market) before dividend is distributed to the unit holders. The current Dividend Distribution Tax is 10% plus the 10% surcharge. There is no such tax applicable on open-end equity schemes.
Dividend Frequency
The periodicity of dividend payout of a scheme. This is especially valid in the case of an income/debt schemes like monthly income plans that normally have a regularity in such distributions.
Dividend History
The track record of dividends declared by a fund till date.
Dividend Per Unit
Total amount of dividend declared by a fund for a scheme divided by total number of units issued to all the investors.
Dividend Plan
In a dividend plan, the fund pays dividend from time to time as and when the dividend is declared.
Dividend Reinvestment
In a dividend reinvestment plan, the dividend is reinvested in the scheme itself and is not paid out to the investors. That is, instead of receiving dividend in cash, the unit holders receive units allotted to them at the Ex-dividend NAV.
Dividend Warrant
It is an instrument issued by companies/ mutual funds to an investor for the purpose of payment of dividends.
Dividend Yield
It refers to the dividend earned per unit of a scheme at the prevailing per unit price.
Dividends
Mutual fund dividends are paid out of income from the scheme's investments and can be announced out of the realized gains only. While dividends in the hands of the investor are free from tax, mutual funds are now required to pay a "distribution tax" for dividends declared from debt-oriented schemes.
Dow Jones Index
It is an American index similar to the BSE Index. Here the basket comprises 30 blue chip American stocks whose prices are indicative of the health of the economy.
Entry Load
It is the load charged by the fund when one invests into the fund. It increases the price of the units to more than the NAV and is expressed as a percentage of NAV.
Equity Linked Savings Scheme
A special product offered by mutual funds. These schemes invest in equity i.e shares and generally have a lock-in period of three years. The primary advantage to investors is the rebate under Section 80 c of the IT act, whereby a maximum of1 lakh invested in ELSS funds is not taxable.
Equity Schemes
Schemes where more than 50% of the investments are done in equity shares of various companies.
Ex-Bonus NAV
The NAV declared post record date in case of a bonus issue is the ex-bonus NAV.
Ex-Dividend Date
It is the effective date of a dividend distribution. When the dividend is paid, the NAV of the fund drops by the amount of the dividend.
Ex-Dividend NAV
The NAV declared post record date is the ex-dividend NAV.
Exit Load
It is the load charged by the fund when oneredeems the units from the fund. It reduces the price of the units to less than the NAV and is expressed as a percentage of NAV.
Expense Ratio
The Expenses of a mutual fund include management fees and all the fees associated with the fund's daily operations. Expense Ratio refers to the annual percentage of fund's assets that is paid out in expenses.
Floating Rate Bonds
These are short to medium term interest bearing instruments issued by financial intermediaries and corporates. These bonds are issued for minimum amount of10,000 and in multiples of10,000 only. The typical maturity of these bonds is 3 to 5 years.
Free Loading
A term used when mutual fund investors who have purchased load funds switch from one fund family to another family of funds without having to pay another sales charge. Not all funds families have freeloading procedures.
Face Value
The original issue price of one unit of a scheme
First-In, First-Out (FIFO)
A commonly used mechanism for the taxation purpose of redeemed mutual fund shares, it is an accounting method which assumes that the units purchased first are the units sold first.
Fund Category
Classification of a scheme depending on the type of assets in which the mutual fund company invests the corpus. It could be a growth, debt, balanced, gilt or liquid scheme
Fund Family
All the schemes, which are managed by one mutual fund.
Fund Management Costs
The charge levied by an AMC on a mutual fund for managing their funds.
Fund Manager
Appointed by the AMC, he is the person who makes all the final decisions regarding investments of a scheme.
Gilts/Government Securities
Securities created and issued by the Central Government and/or a State Government, and may include securities unconditionally guaranteed by the Government
Global Funds
Mutual funds that invest in stocks of companies from all over the world
Government Securities
These are medium to long term obligations issued by RBI on behalf of Government of India and various state governments. The RBI decides the cut-off coupon on the basis of the bids received. These securities are issued by auction process. On certain issues
Gilt funds
Funds that invest only in government securities of different maturities. They offer lower returns as the credit risk is virtually absent and there are no chances of government defaulting on its payment obligaitons. This effectiviely reduces the yield on them.
Growth scheme
A scheme where investments are made in equity and convertible debentures. They normally aim to provide capital appreciation over a period of time.
Guaranteed Returns
The return assured by the mutual funds as a minimum return in certain income plans. The launch of plans offering guaranteed returns is now subject to certain restrictions imposed by the SEBI.
Income / Debt Funds
They are mutual funds that invest primarily in fixed income securities and aim to provide reasonable returns with low degree of risks.
Index Funds
A type of mutual fund in which the portfolios are constructed to mirror a specific market index. Index funds are expected to provide a rate of return over time that will approximate or match, but not exceed, that of the market which they are mirroring.
Indexation
The central government specifies an index linked to the wholesale price index. The indices of two years (year of purchase and the year of sale) are used for the purpose of computing capital gains tax. The purchase price is multiplied by the index of the year of sale and the product is divided by the index of the year of purchase. This benefit is available only if the security has been held for more than 12 months. On sale of equity-oriented mutual fund schemes, one can opt for paying tax at the rate of a flat 10% or go in for paying 20% after taking the benefit of indexation.
Inflation
Defined as the fall in the value of a currency, it results in the rise in prices of goods and services over a period of time.
Inflation Risk
The chance that the value of assets or income will be diminished as inflation shrinks the value of a currency.
International Funds / Emerging Market Funds
Funds investing in assets or bonds/shares of companies from emerging economies. These are not permissible in India due to regulations against investing abroad. Most of the schemes of Foreign Institutional Investors (FII's) investing in India are funds of this type.
Investment Management
Investment analysis and execution of investment plans in keeping with certain objectives.
Investment objective
The declared purpose of investment of a mutual fund scheme
Investment strategy
The internal guidelines that a fund follows in investing the money received from the investors
Initial Load
a kind of sales charge that is paid before any amount gets invested into the mutual fund during its Initial Offer.
iSEC Bond Index (I-BEX)
An index created by ICICI Securities as a benchmark for returns from debt instruments in the market.
Launch Date
The date on which a scheme is first made open to the public for subscripttttttion
Liquid Funds /Money Market Funds
Funds investing only in short-term money market instruments including treasury bills, commercial paper and certificates of deposit. The objective is to provide liquidity and preserve the capital. Due to the low degree of risks available, they generally provide lower returns than other avenues.
Liquidity
The cash and cash equivalent assets available with a fund to meet expenses and immediate redemption requirements of the investors. It refers to the ability to buy or sell an asset quickly or the ability to convert to cash quickly.
Load
A charge that may be levied as a percentage of NAV at the time of entry into the Schemes or at the time of exiting from the Schemes.
Lock In Period
The period after investment in fresh units during which the investor cannot redeem the units. It is normally a key feature of Tax schemes.
Management Expense Ratio
The ratio of management expenses to the total funds under management. It is usually specified in the offer document as a percentage of teh assets under manaegment of the fund.
Management Fee/Expense
The charge made to a mutual fund for supervision of its portfolio, usually expressed as percentage of assets.
Market Risk
It refers to the risk posed by the market in itself i.e. the risk that the price of a security will rise or fall due to changing economic, political, or market conditions, or due to a company's individual situation.
Maturity or Maturity Date
The date upon which the principal of a security becomes due and payable to the security holder.
Minimum Additional Investment
The minimum amount, which an existing investor should invest for purchasing fresh units.
Minimum Balance
It is the minimum amount specified by a fund that should remain invested in a scheme after any redemption.
Minimum Subscripttttttion
It refers to the minimum amount required to be invested to purchase units of a scheme of a mutual fund.
Minimum Withdrawal
The smallest sum that an investor can withdraw (get redeemed) from the fund at one time.
Money Market
It refers to a market for very short-term securities. Money market instruments are forms of debt that mature in less than a year and are very liquid in nature. Securities such as Treasury Bills and Call Money make up the bulk of trading in the money markets.
Minimum Fill (MF)
This is one of the special conditions where a minimum quantity is specified for an order. The quantity of the trade involving an order with a MF attribute should at least be this minimum quantity specified.
Money Market Instruments
Refers to Commercial Papers, Treasury Bills, GOI Securities etc. with an unexpired maturity less than or up to one year, Call MSoney, Certificates of Deposit and any other instrument specified by the Reserve Bank of India.
Mutual Funds
An investment company that pools money from its unitholders and invests that money into a variety of securities, including stocks, bonds, and money-market instruments. This represents a way of investing money into a professionally managed and diversified pool of securities that hopefully will provide a good return on unitholders' money.
Net asset value (NAV)
The value of fund's portfolio at market value less current liabilities divided by the number of units outstanding. Net asset value is normally computed daily or weekly and can be found in the financial section of the daily newspaper.
Nifty
An index of prices of a group of fifty stocks listed on the NSE.
No-Load Mutual Fund or No-Load Scheme
It refers to the fund that does not charge any load for buying or selling its units.
Nominee
The person(s) to whom the assets should be distributed upon the death of the account holder.
Non Performing Investments
Part of the portfolio investment of a debt fund which is not making interest payment or principal amount repayments in time. SEBI has now evolved a valuation mechanism for assessing them.
Objective Of Investment
The purpose statement consisting of the goal and the avenues of investment released by the fund.
Offer Document or Prospectus
It is the official document issued by mutual funds prior to the launch of a fund describing the characteristics of the proposed fund to all its prospective investors. It contains information required by SEBI pertaining to issues such as investment objective and policies, services, and fees.
Offering period
The period during which the initial offer to subscribe for the units of a scheme is open.
Open-Ended Fund
Funds that do not have any fixed maturity and are continuosly open for subscripttttttion and redemption. The key features is liquidity. One can conveniently buy and sell the units held at the NAV related price.
Opening NAV
The NAV disclosed by the fund for the first time after the closure of an NFO.
Offshore Funds
The funds set up abroad to channelise foreign investments in the Indian capital markets.
Open
A time period in the trading day for the different markets that the exchange deals in. Order entry, matching, inquiries and other functions at the workstation will be allowed during this period.
Open-End Scheme
Scheme of a mutual fund where purchase or sale of units is allowed on a continued basis.
Optional Distribution
Payments (distributions) are from either income or capital gains. The unitholder of the fund may choose to take both, either, or none, in cash or additional units.
Opportunity Risk
The risk that a better opportunity may present itself after you have already committed your money elsewhere.
Pay-out
Pay-out day is the designated day on which securities and funds are paid out to the members by the clearing house of the Exchange.
Premium
When the market price of a unit is more than the NAV it is said to be trading at a premium.
Public Sector Undertakings (PSU) bonds
PSU Bonds are medium and long term obligations issued by public sector companies where the government share-holding is generally greater than 51% or more. Some of the PSU bonds carry tax exemptions also. Minimum maturity is 5 years for taxable bonds and 7
Purchase Price or Offering Price
The price at which a mutual fund's units can be purchased. The asked or offering price means the current net asset value per unit plus sales charge, if any.
Performance
Performance of an investment indicates the returns from an investment. The returns can come by way of income distributions as well as appreciation in the value of the investment.
Portfolio
It refers to the total investment holdings of the fund.
Portfolio Churning
It refers to the changes made to the portfolio keeping in view the market conditions. It includes both buying and selling of holdings and is aimed at giving a better yield to the investor.
Portfolio Managers
Also known as the Fund Managers, they are the specialists employed by Mutual Fund/AMC to invest the pool of money in accordance with the fund's investment objectives.
Prospectus
An offer document by which a mutual fund invites the public for subscribing to the units of a scheme. This document contains information about the scheme and the AMC so as to enable a prospective investor make an informed decision
RBI/ Reserve Bank of India
Reserve Bank of India, established under the Reserve Bank of India Act, 1934, is the Central Bank in India.
Rating
The rating is a symbolic indicator of the current opinion of the relative capability and timely servicing of debts and obligations. Ratings are based on an objective analysis of the information. 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 by which mutual fund holders are registered as unit owners to receive any future dividend or capital gains distribution.
Redemption Of Units
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.
Registrar or Transfer Agent
The institution that maintains a registry of unitholders of a fund and their unit ownership. Normally the registrar also distributes dividends and provides periodic statements to unitholders.
Repurchase
Buying back/ cancellation of the units by a fund on an ongoing basis or for a specified period or on maturity of a scheme. The investor is paid a consideration linked to the NAV of the scheme
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.
Repurchase price
The price of a unit (net of exit load) that the fund offers the investor to redeem his investment.
Right of Accumulation
Right provided to the unitholder of reduced sales charge on the units purchased if the total number of the units bought over a period of time exceeds a certain pre-determined amount.
Recurring Investment Facility
An arrangement provided by the fund management whereby regular purchases of small or large numbers of units may be allowed. The plan sometimes also provides for automatic reinvestment of income dividends and capital gains distribution.
Recurring Withdrawal Facility
The arrangement that the fund provides whereby shareholders can receive periodic payments in a specified amount. These amounts may be more or less than the income of the fund.
Redemption fee
A kind of sales charge, also referred to as a back-end load, imposed when an investor redeems, or sells back units of the fund.
Redemption Price
The price at which open-ended schemes repurchase their units and close-ended schems redeem their units on maturity. Such prices are NAV related.
Registrar or Transfer Agent
Firm responsible for maintaining register of unit holders or shareholders.
Risk-Free
Absence of credit risk in a security. Usually Government or Government guaranteed securities are only considered to be risk free.
Risk Adjusted Returns
The expected returns from an investment depend upon the risk involved in the investment. For the purpose of comparing returns from investments involving varying levels of risk, the returns are adjusted for the level of risk before comparison. Such returns (reduced for the level of risk involved) are called risk-adjusted returns.
Sale price
The price at which a fund offers to sell one unit of its scheme to investors. This NAV is grossed up with the entry load applicable, if any.
Scheme Objective
The purpose statement consisting of the goal and the avenues of investment released by the fund.
Sector Allocation
It refers to the portion of assets of a fund which is invested in a particular well-defined segment of the economy, like Information Technology, pharmaceuticals, utilities, media, telecommunications, etc.
Sector Funds
Sector Funds are mutual funds that are established to focus and invest in the stocks of specific sectors of the economy, such as pharmaceuticals, chemicals, or information technology. This is normally specified in the offer document of the funds.
Security
Generally, an instrument evidencing debt of or equity in a corporation in which a person invests. The term includes notes, stocks, bonds, debentures or other forms of negotiable and non-negotiable evidences of indebtedness or ownership.
Sharpe Ratio
The Sharpe ratio measures the risk-adjusted return of a fund. Simply put, the ratio measures the variability of ' excess returns' (defined by returns of the fund over the 'risk less' 91 day T-bill). Mathematically, the formula takes a fund's return in excess of a risk-free investment and divides this by the standard deviation of the returns. The higher the Sharpe ratio, the better the fund
Sponsors
A sponsor is the person who, acting alone or in combination with another body or corporate, establishes a mutual fund and applies to SEBI for its registration. The sponsor is also closely associated with the AMC. As per SEBI regulations, the sponsor has to contribute a minimum of 40% of the net worth of the AMC.
Systematic Investment Plan (SIP)/ Recurring invest
A program that allows an investor to provide post-dated cheques to the mutual fund to allot fresh units at specified intervals (usually monthly or quarterly). On the specified dates, the cheques are realized by the mutual fund and additional units at the prevailing NAV are allotted to the investor. This enables him to invest as little as1000 a month and take advantage of rupee cost averaging.
Systematic Transfer Program (STP)
A plan that allows the investor to give a mandate to the fund to periodically and systematically transfer a certain amount from one scheme to another.
Systematic Withdrawal Plan (SWP)/Recurring withdra
A plan offered with some schemes under which post-dated cheques for fixed amounts (as may be fixed by the fund) are issued to the investors for monthly, bi-monthly or quarterly withdrawals. The withdrawals are as per the requirements of the investor specified by him/ her at the time of investment.
Total Assets Under Management
The market value of the total investments of a fund as on a particular date
Total Return
Return on an investment, taking into account capital appreciation, dividends or interest, and individual tax considerations adjusted for present value and expressed on an annualised basis.
Trust
A legal arrangement under which property and assets may be held and managed for the benefit of another person. Mutual funds in India are registered under the Trusts Act.
Trustee
A person or a group of persons having an overall supervisory authority over the fund managers. They ensure that the managers keep to the trust deed, that the unit prices are calculated correctly and the assets of the funds are held safely.
Turnover
The extent to which the fund's portfolio is turned over during the course of a year. High turnover results in greater investment expenses and therefore in an erosion of the value of share assets.
Turnover Rate
A measure of the fund's trading activity calculated by dividing total purchases or sales of portfolio securities (whichever is lower) by the fund's net assets over a period of time.
Unit
A Unit represents one undivided share in the assets of the Schemes.
Unit Trust
A special type of fund, usually a bond fund, that has a fixed portfolio, shares or "units" are sold when the fund is formed, and the portfolio remains fixed until the maturity of the underlying securities.
Unitholder
A person who holds Unit(s) under a Mutual Fund.
Value Stocks
Stocks that are considered to be undervalued based upon such ratios as price-to-book or price-to-earnings (P/E). These stocks generally have lower price-to-book and price-earnings ratios, higher dividend yields and lower forecasted growth rates than growth stocks.
Yield
Distributions form investment income, usually expressed as a percentage of net asset value or market price. Unlike total return, yield has the single component of investment income and does not include capital gains distributions or capital appreciation of underlying shares.
Yield Curve
The Yield Curve gives the relationship at a given point in time between yields on a group of fixed-income securities with varying maturities viz. treasury bills, notes, and bonds. The curve typically slopes upward since longer maturities normally have higher yields, although it can be flat or even inverted.
Yield To Maturity
Used to determine the rate of return an investor will receive if a long-term, interest-bearing investment, such as a bond is held to its maturity date. It takes into account purchase price, redemption value, time to maturity, coupon yield and the time between interest payments.
Zero-Coupon Bond
A bond where no periodic interest payments are made. The investor purchases the bond at a discounted price and receives one payment at maturity. The maturity value an investor receives is equal to the principal invested plus interest earned compounded semi-annually at the original rate to maturity. Interest income from zero-coupon bonds is subject to taxes annually even though no payments will be made.
Source: mutualfundsindia.com
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