A mutual fund pools money from multiple investors to invest in securities like stocks, bonds, and other assets, managed by professional fund managers.

NAV (Net Asset Value) represents the price per unit of a mutual fund on a specific date. It reflects the fund’s market value after accounting for expenses.

AUM refers to the total market value of assets that a mutual fund manages on behalf of its investors. A higher AUM usually reflects investor confidence and fund maturity.

A folio number is a unique ID assigned to an investor by a mutual fund house. It helps manage and track investments across different schemes under the same investor profile.

Exit load is a fee charged when you redeem (sell) units of certain mutual fund schemes within a specified period. It discourages early withdrawal and helps manage fund liquidity.

KYC (Know Your Customer) is a regulatory process to verify the identity of investors before allowing investments. It usually requires submitting PAN, address proof, and other personal information.

A fund manager makes investment decisions for the mutual fund, deciding where to invest your money based on research, market conditions, and fund objectives.

Risk profile represents an investor's ability and willingness to handle market volatility. It helps determine suitable investment options, like conservative, balanced, or aggressive portfolios.

A folio number is a unique ID assigned to an investor by a mutual fund house. It helps manage and track investments across different schemes under the same investor profile.

Yes, investors can switch between mutual fund schemes within the same AMC by placing a switch request. Some funds may charge an exit load or capital gains tax.

Lock-in period is the minimum time you must stay invested before you can withdraw your investment without penalties or exit loads. Some funds like ELSS have a 3-year lock-in.

Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly in a mutual fund scheme, encouraging disciplined savings and compounding benefits.

SWP is a facility where you can withdraw a fixed amount periodically from your mutual fund investment, offering regular income and tax efficiency.

SIP Top-up is an option that allows you to automatically increase your SIP investment amount by a fixed percentage or amount every year to match your rising income and goals

Lump Sum investment means investing a large amount of money at once in a mutual fund scheme, instead of spreading it out through regular SIP installments.

SIP cancellation refers to the process of stopping your ongoing SIP investments. You can cancel a SIP anytime through your mutual fund platform or directly with the fund house.

Missing a SIP installment usually does not lead to penalties by AMC, but investor’s Bank may impose NACH return charges. Multiple consecutive misses can result in cancellation of the SIP mandate by the fund house.

Some fund houses offer SIP Pause facility, allowing you to temporarily stop SIP payments for a few months and then resume without cancelling your SIP mandate.

The minimum amount to start a SIP varies across schemes but generally starts from ₹100 to ₹500 per month.

SIPs spread investment across market cycles reducing timing risk, while lump sum investments are beneficial when markets are undervalued. Choice depends on your financial situation and market conditions.

Systematic Transfer Plan (STP) allows you to transfer a fixed amount of money periodically from one mutual fund scheme to another, typically from a debt fund to an equity fund, helping you invest gradually over time.

Yes, you can stop your SIP at any time without affecting the money already invested. The existing investments will continue to stay in the fund and grow based on market performance.

In SIPs, exit load is calculated separately for each individual SIP installment based on its investment date. Exit load applies if you redeem units before the exit load period (e.g., before 1 year for equity funds).

No, SIPs do not have a maturity date like Recurring Deposits. SIPs are just a way to invest regularly into mutual funds, and your investments stay until you choose to redeem them. You decide when to stop SIPs or redeem your units.

An equity fund invests primarily in stocks or shares of companies. It aims to provide capital appreciation over the long term but comes with higher risk compared to debt funds.

A debt fund invests in fixed-income instruments like government bonds, corporate bonds, and treasury bills, providing relatively stable returns with lower risk.

An index fund is a type of mutual fund that tracks and mirrors the performance of a specific stock market index like NIFTY 50 or SENSEX.

A balanced fund invests in a mix of equity and debt instruments, aiming to offer both capital appreciation and income with moderate risk.

Liquid funds invest in short-term money market instruments like treasury bills and commercial papers, offering better returns than a savings account with high liquidity.

ELSS is a type of mutual fund that invests primarily in equities and offers tax benefits under Section 80C. It has a lock-in period of 3 years

Growth option reinvests your gains, while dividend option pays out profits as dividends. Growth is suitable for long-term compounding, while dividends offer periodic payouts. IDCW is the new name for the dividend option in mutual funds. It stands for Income Distribution cum Capital Withdrawal and indicates that dividends are paid from your own investment value.

Regular funds involve an intermediary and include a commission in the expense ratio, while direct funds are bought directly from the AMC, offering lower expense ratios and little higher returns.

A New Fund Offer (NFO) is the first-time subscription offer for a new mutual fund scheme launched by an Asset Management Company (AMC).

A Fund of Funds is a mutual fund that invests in other mutual funds instead of directly investing in stocks, bonds, or securities.

Asset allocation means dividing your investment across different asset classes like equity, debt, and gold to balance risk and return based on your goals.

Rebalancing means adjusting your asset allocation (equity, debt, gold etc.) back to your target percentages over time to maintain the desired risk level.

Choosing the right fund depends on your investment goals, risk appetite, investment horizon, and comparing factors like returns, fund manager track record, and expense ratio.

CAGR is the rate at which your investment would have grown if it had grown at the same rate every year. It is used to measure the smoothened annual return over a period.

XIRR (Extended Internal Rate of Return) calculates returns when investments and withdrawals happen at irregular intervals, commonly used for SIPs and redemptions.

Sharpe Ratio measures the risk-adjusted return of an investment. A higher Sharpe Ratio indicates better returns for the amount of risk taken.

Alpha measures a fund's performance compared to a benchmark, while Beta indicates the fund's volatility relative to the market.

Portfolio Turnover Ratio shows how frequently a fund manager buys and sells securities within a fund. Higher turnover means more trading activity.

A benchmark is a standard against which the performance of a mutual fund is compared, such as NIFTY 50 or SENSEX.

Tracking error measures how closely an index fund follows its benchmark index. Lower tracking error indicates better index replication.