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OthersMutual Fund Encyclopedia

Last updated:2019/10/29 Print

What is Net Asset Value?

Net asset value is the value of a mutual fund's assets minus any liabilities and expenses. The result is then divided by the total number of outstanding units the resultant value is the NAV per unit.

What is a Mutual Fund Manager?

A mutual fund manager is responsible for implementing a fund's investing strategy and managing its portfolio trading activities. A mutual fund can be managed by one person.

What is Securities Investment Trust Enterprise?

Securities investment trust enterprise is the enterprise engaging in issuing beneficiary certificates for raising securities investment trust fund and using securities investment trust fund in the investment in securities and its related products.

What is Beneficiary Certificate?

Beneficiary certificate is a security which is issued by the securities investment trust enterprise for raising the securities investment trust fund.

What is Beneficiary?

The investor of a mutual fund.

What is Custodian Bank?

A custodian bank is a financial institution responsible for holding and safeguarding the securities owned by a mutual fund.

What is Systematic Investment Plan (SIP)?

Systematic investment plan is an investment strategy wherein an investor needs to invest the same amount of money in a particular mutual fund at every stipulated time period.
Investing in SIP enables an investor to benefit by buying more units when the NAV falls and fewer units when the NAV rises. This scheme helps reduce the average cost per unit of investment.

What is Redemption?

Redemption means selling of units of a mutual fund scheme.

What is Standard Deviation?

Standard deviation (SD) measures the volatility the mutual fund's returns in relation to its average. It tells you how much the fund's return can deviate from the historical mean return of the scheme. If a mutual fund has a 12% average rate of return and a standard deviation of 4%, its return will range from 8-16%.

What is Sharpe ratio?

The Sharpe ratio was developed by Nobel laureate William F. Sharpe and is used to help investors understand the return of an investment compared to its risk. The ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk.