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Glossary

Active Portfolio Management

Is a systematic and proactive approach to investment with the goal of beating the market. This strategy is based on the premise that markets are not efficient and that there is scope to earn abnormal profits through an active investment strategy.

Active Portfolio Management

Is a systematic and proactive approach to investment with the goal of beating the market. This strategy is based on the premise that markets are not efficient and that there is scope to earn abnormal profits through an active investment strategy.

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.

Annual Report

It is the record of a Mutual Fund's performance in an year. Under SEBI's guidelines, it is distributed to investors and/or shareholders.

AMFI

Association of Mutual Funds in India

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, is the NAV at which the mutual fund transaction is executed, if the application is received before the 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

Asset allocation refers to a strategy of diversifying the risk associated with a fund and refers to the distribution of total funds available with the fund into various asset classes such as stocks, bonds etc. based on the funds investment objective.

Asset Management Company (AMC)

A Company registered with SEBI, which takes investment/ divestment decisions for the mutual fund, and manages the assets of the mutual fund. It is the investment manager for the mutual fund. It is a company set up primarily for managing the investment of mutual funds and takes investment decisions in accordance with the scheme objectives, deed of Trust and other provisions of the Investment Management Agreement.

Automatic Investment Plan

A plan 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 unit-holders 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.

AUM

Assets under management.

What is a Mutual Fund?