Glossary
Plain-language meanings of common mutual fund terms.
- SIP (Systematic Investment Plan)
- Investing a fixed amount in a mutual fund at regular intervals, usually monthly. Each instalment buys units at that day’s NAV.
- The price of one unit of a mutual fund scheme, published by the AMC for every business day. AMFI publishes all NAVs daily.
- XIRR
- The annualised return for cash flows on different dates, such as SIP instalments and withdrawals. It is the right way to state SIP returns.
- CAGR
- Compound annual growth rate: the steady yearly rate that turns a starting value into an ending value. We show CAGR for periods of one year or more, and absolute return below a year.
- Absolute return
- The simple percentage change between two values, not annualised.
- Rolling returns
- Returns over every window of a fixed length (for example, every 3-year period), which shows how consistent a fund has been.
- TER (Total Expense Ratio)
- The yearly cost of running the scheme, taken out of the fund’s assets. Regular plans have a higher TER than Direct plans because they include distributor commission.
- Regular plan vs Direct plan
- The same portfolio sold two ways. A Regular plan is bought through a distributor, who earns a commission from the AMC. A Direct plan is bought from the AMC and has a lower TER.
- Exit load
- A fee some schemes charge if you redeem within a set period, for example 1% within one year.
- Riskometer
- SEBI’s six-level scale of a scheme’s risk, from Low to Very High. Every scheme must show it, and it is reviewed every month.
- SWP (Systematic Withdrawal Plan)
- Withdrawing a fixed amount from a fund at regular intervals, often used for income in retirement.
- STP (Systematic Transfer Plan)
- Moving money from one scheme to another (often from a debt fund to an equity fund) in regular instalments.
- NFO (New Fund Offer)
- The first subscription period of a new scheme, before it opens for continuous buying and selling.
- ARN and EUIN
- The AMFI Registration Number identifies a registered mutual fund distributor. The EUIN identifies the individual employee who gives service.
Riskometer
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Gain / Loss
Gain 12.34% Loss 4.10%