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Financial Terms

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  • Account statement
    A document similar to a bank account statement that indicates the mutual fund units owned. A statement is issued each time the investor carries out a transaction.
  • Annual report
    A write-up given to shareholders containing the yearly record of a mutual fund's performance. The report also informs the investor about the fund's earnings and operations. Reports are sent out yearly.
  • Assets
    Assets are a resource of money value such as stocks, bonds, real estate and cash.
  • Asset class
    Different types of investments such as stocks, bonds, real estate and cash.
  • Asset Management Company (AMC)
    The trustee delegates the task of floating schemes and managing the collected money to a company of professionals, usually experts who are known for smart stock picks. This is an asset management company (AMC). AMC charges a fee for the services it renders to the MF trust. Thus the AMC acts as the investment manager of the trust under the broad supervision and direction of the trustees. The AMC must have a net worth of at least Rs10 crores at all times and it can not act as a trustee of any other mutual fund.
  • Annual Return
    The percentage of change in net asset value over a year's time, assuming reinvestment of distribution such as dividend payment and bonuses.
  • Annualized Returns
    Absolute returns over a period (which could be larger or smaller than a year) aggregated to a period of one year.
  • Applicable NAV
    NAV at which a transaction is effected. A cut-off time is set by the fund and all investments or redemptions are processed at that particular NAV. This NAV is relevant if the application is received before that cut-off time on a day. A different NAV holds if received thereafter.
  • Application FormForm prescribed for investors to make applications for subscribing to the units of a fund.
  • Asset Allocations
    Allocation of the portfolio of a mutual fund in various categories of assets such as equity, debt and others on the basis of the investment objective of the scheme. The process of diversifying investments among different types of assets like stocks, bonds and cash in order to optimise risk / return tradeoff based on a person's financial situation and goals.
  • Average Maturity
    Average time to maturity of all fixed-period investments in the portfolio of a scheme.
  • Appreciation
    An increase in an investment's value.
  • Automatic Investment Plan
    Periodic investment of a fixed amount by a unitholder , either directly from his bank account or by issuing post-dated cheques, in his mutual fund account.
  • Automatic Withdrawal Plan
    Allows an investor to receive periodic payments of fixed amount or units from his investment in a mutual fund scheme. Retirees who want a regular income supplement often choose this.
  • Average Portfolio Maturity
    The average maturity of all the bonds in a bond fund's portfolio.