Knowledge Center

MUTUAL FUND BASICS

What is Absolute Return?

Absolute Returns helps investors to calculate the simple returns on their initial investment.

What is CAGR return?

CAGR stands for Compounded Annual Growth Rate. It is the growth rate that your initial investment would need to experience to grow to a set level over a specified period of time.

What is FATCA?

FATCA is a United States (US) Federal Law, to improve compliance of US tax citizens who have foreign financial assets and offshore accounts

Can NRI’s invest in Mutual Funds?

Yes, Non Resident Indians (NRI) and Persons of Indian Origin (PIO) can invest in Indian Mutual Funds on a full repatriation as well as non-repatriation basis the completion of KYC procedure and other formalities if applicable

What is Repurchase/Redemption price?

The Repurchase/Redemption Price is the price per Unit at which a Mutual Fund would ‘repurchase’ the units

What is Purchase Price/ Sale Price?

Sale Price is the price payable per unit by an investor for purchase of units (subscription) and/or switch-in from other schemes of a mutual fund.

MYTH BUSTERS

An investor with huge money can only invest in a Mutual Fund.

Investors, who believe mutual funds investment is meant only for affluent investors, then the assumption itself is wrong.

One needs to have a Demat Account to invest in Mutual Funds.

Dematerialisation is holding financial securities in an electronic form in a Demat account.

Investment in only Top Rated Mutual fund Schemes ensures better returns.

Rating of mutual fund schemes is based on multiple parameters as structured inhouse by various rating agencies.

Investing in a scheme with Lower NAV is better than higher NAV

The above stated myth is a general misconception among investors since, investors associate mutual fund NAV with the equity Share price.

Mutual Fund only about invest in Equities

Today, Mutual fund offers investment exposure to not only Equity as an asset class, but includes Debt, money market, commodities, Real Estate & International equity as well.

Past returns in mutual funds indicate future returns

While past returns will indicate the consistency of the fund’s performance during good & rough times and the Fund Manager’s intellect in handling the scenario well in comparison with peer schemes in the same category.

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