What is a mutual fund
mutual fund is a pool of money contributed by individuals who have similar
financial goals. The money collected is then invested in various securities
such as equities, debentures/bonds and/or money market instruments.
What is a fund house/family?
A group of funds managed under one umbrella. The most basic fund family would
include a stock, bond and money market-portfolio, although many funds have
variants like sector funds, balanced funds.
For instance, Zurich India Mutual Fund is a fund house with several funds under it.
What is the Net asset value (NAV)?
price or value of one unit of a fund. It is calculated by summing the current
market values of all securities held by the fund, adding in cash and any accrued
income, then subtracting liabilities and dividing the result by the number of
units outstanding. Most open-ended funds companies compute NAVs once a day
based on closing market prices.
What are a fund’s net assets?
total value of a fund's cash and securities less its liabilities or
What is a fund portfolio?
group of securities held by the mutual fund. A portfolio could be a mixture of
stocks, bonds and cash.
What is the portfolio turnover of a fund supposed to mean?
measure of the amount of buying and selling activity in a fund.Turnover is
defined as the lesser of securities sold or purchased during a year divided by
the average of monthly net assets. A turnover of 100 percent, for example,
implies positions are held on average for about a year.
Mutual Funds can be classified into the following 3 broad categories:
How are mutual funds classified?
- Portfolio classification
- Functional classification
- Geographical classification