AMC
The company that runs a mutual fund — pooling investors' money, employing the fund managers and operating the schemes you invest in.
AUM
The total market value of all the money a fund or company currently manages on behalf of investors. Scale, not a measure of performance by itself.
CAGR
The smoothed average yearly growth rate of an investment over a period, as if it grew steadily each year. Handy for comparing returns across time frames.
Debt Fund
A mutual fund investing mainly in fixed-income securities like bonds and government paper. Generally lower risk and lower return than equity, often used for shorter horizons or stability.
Direct Plan
A version of a fund bought straight from the fund house with no distributor commission, giving it a lower expense ratio. You research and manage it yourself.
ELSS
A tax-saving equity mutual fund eligible for Section 80C deduction, with the shortest 80C lock-in at just 3 years. Returns are market-linked.
Equity Fund
A mutual fund that invests primarily in company shares. Higher risk and higher growth potential, generally suited to longer horizons.
Exit Load
A small fee charged when you redeem units within a specified period, to discourage very short-term exits. Many funds have no exit load after a set holding period.
Expense Ratio
The annual cost of running a fund, shown as a percentage of assets and deducted from returns. Lower is cheaper; direct plans cost less than regular plans.
Folio
Your unique account number with a fund house — like a bank account number — under which all your holdings in that AMC are recorded.
Hybrid Fund
A fund investing in a mix of equity and debt (and sometimes other assets), aiming to balance growth and stability within a single scheme.
KYC
The one-time identity-and-address verification required by regulation before you can invest in mutual funds.
Large Cap
Funds that invest in India's largest, most established listed companies by market capitalisation — typically more stable than mid or small caps.
Lock-in Period
The minimum time you must stay invested before you can redeem — for example, 3 years for ELSS. Units cannot be withdrawn during lock-in.
Mid Cap
Funds investing in medium-sized companies — higher growth potential than large caps, but with more volatility.
NFO
The initial launch period when a new scheme is offered to investors, usually at a fixed price, before regular buying and selling begins.
Nominee
The person you designate to receive your investments in the event of your death. Adding a nominee makes it far easier for your family to claim your holdings.
Regular Plan
A version of a fund bought through an AMFI-registered distributor. Its expense ratio includes a commission that pays for advice and ongoing service.
Riskometer
A standardised dial on every mutual fund showing its risk level — from Low to Very High — so you can gauge how risky a scheme is at a glance.
Rupee Cost Averaging
The effect of investing a fixed amount regularly (as in a SIP): you buy more units when prices are low and fewer when high, averaging your cost over time.
SIP
A way to invest a fixed amount at regular intervals — usually monthly — into a fund, building discipline and averaging your purchase cost.
Small Cap
Funds investing in smaller companies — the highest growth potential of the three cap sizes, but also the most volatile and highest risk.
STP
A facility to move money automatically, in instalments, from one fund to another (often debt into equity) to stagger your market entry.
SWP
The reverse of a SIP — you withdraw a fixed amount at regular intervals from your investment, often to generate a steady income stream.
XIRR
A way to calculate your actual annualised return when you've invested at multiple dates (like SIP instalments), accounting for the timing of each cash flow.
From definitions to decisions
Now that the terms make sense, put them to work with our comparisons, calculators and guides.
Definitions are simplified for general understanding and are for information only, not investment advice. Gayatri Financial Synergy is an AMFI-registered Mutual Fund Distributor (ARN-315144), not a SEBI-registered Investment Adviser, and may earn commission on regular plans. Content here is for information only and is not investment advice. Mutual fund investments are subject to market risks. Read all scheme-related documents carefully.
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