Browse our comprehensive glossary of financial and mutual fund terms to enhance your understanding and prepare for the NISM certification exam.
The process of dividing investments among different kinds of assets, such as stocks, bonds, and cash, to optimize the risk/reward tradeoff based on an individual's goals, risk tolerance, and investment horizon.
A firm that invests pooled funds from clients, putting the capital to work through different investments including stocks, bonds, real estate, master limited partnerships, and more.
The total market value of the investments that a person or entity manages on behalf of clients.
A measure of an investment's performance on a risk-adjusted basis, taking into account the volatility compared to a benchmark.
A standard or point of reference against which the performance of a security, mutual fund, or investment manager can be measured.
A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.
A mutual fund plan that allows investors to invest directly with the fund house instead of going through a distributor, resulting in lower expense ratios.
The annual fee that all funds or ETFs charge their shareholders. It expresses the percentage of assets deducted each fiscal year for fund expenses, including management fees, administrative fees, operating costs, and all other asset-based costs.
A fee charged to an investor when they redeem or transfer money from a mutual fund within a specified period of time.
The new term for dividend in mutual funds, which represents the distribution of profits to unit holders.
The process of a business verifying the identity of its clients and assessing potential risks of illegal intentions for the business relationship.
The per-share value of a mutual fund, calculated by dividing the total value of all the securities in the portfolio, less any liabilities, by the number of fund shares outstanding.
The first-time subscription offer for a new scheme launched by asset management companies.
A measure of how frequently assets within a fund are bought and sold by the portfolio managers.
A mutual fund plan that involves investing through a distributor or financial advisor, which includes distribution fees and commissions in the expense ratio.
A visual representation of the risk level associated with a mutual fund scheme, as per SEBI guidelines.
An investment strategy that allows investors to invest a fixed amount in a mutual fund scheme at regular intervals (monthly, quarterly, etc.) instead of making a lump-sum investment.
The regulatory body for the securities market in India, established in 1992 to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market.
A document that contains all the necessary information about a mutual fund scheme that an investor should know before investing.
A facility that allows investors to withdraw a fixed amount from their mutual fund investments at regular intervals.
A facility that allows investors to transfer a fixed amount from one mutual fund scheme to another scheme of the same mutual fund at regular intervals.
A measure for calculating risk-adjusted return, representing the average return earned in excess of the risk-free rate per unit of volatility or total risk.
A measure of the dispersion of a set of data from its mean, used in finance to measure the historical volatility of an investment.
The total return anticipated on a bond if the bond is held until it matures.
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